Filed by the Registrant | | | ☒ | ||
Filed by a Party other than the Registrant | | | ☐ | ||
Check the appropriate box: | | | |||
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
STRIDE, INC. | ||||
(Name of Registrant as Specified | ||||
(Name of Person(s) Filing Proxy Statement, if | ||||
☒ | | | No fee required. | |||
| | | | |||
☐ | | | Fee paid previously with preliminary materials | |||
| | | | ||||
☐ | | | Fee computed on table | |||
26, 2022
| | | | Sincerely, | |
| | |  | ||
|  | | Dr. Craig R. Barrett | |
| | ||||
| | Chair of the Board |
| | Important Information Regarding Meeting Attendance | |
| | | |
| | We are sensitive to the public health and travel concerns our stockholders may have regarding our in person Annual Meeting and recommendations that public health officials have issued and may issue in light of | |
STOCKHOLDERS
1.Elect nine (9) directors to the Company's Board of Directors each to serve for a one-year term;2.Consider and vote upon a non-binding advisory resolution approving the compensation of the named executive officers of the Company ("Say on Pay");3.Consider and vote upon the ratification of the appointment of BDO USA, LLP, as the Company's independent registered public accounting firm for the fiscal year ending June 30, 2020; and4.Act upon such other matters as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.
| 1. | Elect eight (8) directors to the Company’s Board of Directors each to serve for a one-year term; |
| 2. | Consider and vote upon the ratification of the appointment of BDO USA, LLP, as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2023; |
| 3. | Consider and vote upon a non-binding advisory resolution approving the compensation of the named executive officers of the Company (“Say-on-Pay”); |
| 4. | Consider and vote upon the approval of the amendment and restatement of the Company’s 2016 Equity Incentive Award Plan; and |
| 5. | Act upon such other matters as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting. |
10, 2022.
26, 2022.
26, 2022 Fiscal 2022 Summary Compensation Table June 30, through a broker, bank or other nominee must bring a legal proxy, which can be obtained only from the broker, bank or other nominee. be supplemented by telephone or personal solicitation by our directors, officers or other regular employees of the Company. No additional compensation will be paid to our directors, officers or other regular employees for these services. Stride@dfking.com. Corporate Governance Guidelines and Code of Business Conduct and Ethics https://investors.stridelearning.com/governance. from time to time). The restated 2016 Plan. Audit Committee Compensation Committee Nominating and Corporate Governance Committee Academic Committee Aida M. Alvarez (2) Craig R. Barrett (3) Guillermo Bron (4) Robert L. Cohen (5) John M. Engler (6) Steven B. Fink (7) Robert E. Knowling, Jr. (8) Liza McFadden (9) The Administrator may make awards of restricted stock to eligible individuals in such amounts and at purchase prices to be established by the Administrator in connection with each award. Such awards will be subject to restrictions and other terms and conditions as are established by the Administrator. Upon issuance of restricted stock, recipients generally have the rights of a stockholder with respect to such shares, subject to the limitations and restrictions established by the Administrator in the individual award agreement. Such rights generally include the right to receive dividends and other distributions in relation to the award; however, dividends may be paid with respect to restricted stock that is subject to vesting only to the extent the vesting conditions have been satisfied and the restricted stock vests. . For fiscal 2022, our NEOs were: school districts as the world has changed. related policies and practices. To assess our executive compensation against the competitive market, the Committee reviews and considers the compensation levels and practices of a select group of peer companies. In general, the Committee seeks to establish the range of target total direct compensation for our executive officers near the median for similar positions at the companies in our compensation peer group, with a greater emphasis on variable cash compensation versus fixed cash compensation, and provide executive severance and change in control agreements that are aligned with our compensation peer group and market best practices. to the peer group (j2 Global, Proofpoint and Stitch Fix) to better align with the Company’s ongoing business focus. the peer group. Nathaniel A. Davis James J. Rhyu Kevin P. Chavous Shaun E. McAlmont Vincent W. Mathis The following table sets forth, for each NEO, the Nathaniel A. Davis James P. Rhyu Kevin P. Chavous Shaun E. McAlmont Vincent W. Mathis our Board. future. Defined Contribution Plan period. Table” below. our stock price. policy or are still within the five-year period to accumulate the specified level of ownership. Stock on margin or engaging in transactions, in puts, calls, or other derivative securities designed to hedge or offset any decrease in the market value of the manage risks. We believe we have effective internal controls. Name Nathaniel A. Davis Chief Executive Officer and Chairman James J. Rhyu Chief Financial Officer President, Product and Technology Kevin P. Chavous President of Academics, Policy and Schools Shaun E. McAlmont President, Career Readiness Education Vincent W. Mathis Executive Vice President, General Counsel and Secretary Name Nathaniel A. Davis Chief Executive Officer and Chairman James J. Rhyu Chief Financial Officer President, Product and Technology Kevin P. Chavous President of Academics, Policy and Schools Shaun E. McAlmont President, Career Readiness Education Vincent W. Mathis Executive Vice President, General Counsel and Secretary termination, payable as soon as practicable after the date of termination; (iii) continued health benefits at Company expense for a period of 12 months following his date of termination; and (iv) a prorated annual bonus for the year of termination based on actual performance for the year and payable at the same time annual performance bonus payments are made to other senior executives of the Company. Potential Value of Termination and 2022. Audit Fees Audit-Related Fees Tax Fees All Other Fees Total James J. Rhyu (2) Kevin P. Chavous (3) Shaun E. McAlmont (4) Vincent W. Mathis (5) Nathaniel A. Davis (6) Aida M. Alvarez (7) Craig R. Barrett (8) Guillermo Bron (9) Robert L. Cohen (10) John M. Engler (11) Steven B. Fink (12) Robert E. Knowling, Jr. (13) Liza McFadden (14) All Directors and Executive Officers as a Group (13 persons) (15) BlackRock, Inc. (16) The Vanguard Group (17) Dimensional Fund Advisors (18) Section 16 of the Exchange Act requires directors and executive officers and persons, if any, owning more than 10% of a class of the cover taxes. Rule 14a-19 under the Exchange Act no later than October 10, 2023. Delivery of Documents to Stockholders Sharing an Addressthen votepromptly submit your proxy or voting instructions by Internet, by phonetelephone, or sign, date and return your proxy card (if you request a paper copy) at your earliest convenience. Sending in your proxy cardmail. Voting before the Annual Meeting will not prevent you from voting your shares at the Annual Meeting, if you desire to do so. By Order of the Board of Directors, 
Herndon,25, 2019IMPORTANT NOTICE ABOUT THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 13, 20192019 Proxy StatementCompany’s 2022 proxy statement and the 20192022 Annual Report are available at: www.edocumentview.com/LRN.at PROXY STATEMENT QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THESE PROXY MATERIALS CORPORATE GOVERNANCE AND BOARD MATTERS Board of Directors Director Independence Board of Directors Leadership Structure Risk Management Director Compensation for Fiscal 2019 PROPOSAL 1: ELECTION OF DIRECTORS NOMINEES FOR ELECTION AT THE ANNUAL MEETING Executive Officers COMPENSATION DISCUSSION AND ANALYSIS Executive Summary Say on Pay Results and Stockholder Engagement 2019 Performance Highlights 2019 Compensation Highlights 23Tying Executive Pay to Company Performance25Determining Executive Compensation262019 Compensation Decisions27Other Compensation32Compensation Governance, Process and Incentive Decisions33Other Compensation Policies and Practices34COMPENSATION TABLES38 for Fiscal 2019 Pay Ratio Disclosure COMPENSATION COMMITTEE REPORT CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Policies and Procedures for Related-Party Transactions Compensation Committee Interlocks and Insider Participation PROPOSAL 2: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION Prior Year Vote and Fiscal 2019 Compensation Highlights PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR Fees Paid to Independent Registered Public Accounting Firm AUDIT COMMITTEE REPORT SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT DELINQUENT SECTION 16(a) REPORTS DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS 55PROPOSALS BY OUR STOCKHOLDERSWHERE YOU CAN FIND MORE INFORMATION56 TO BE HELD ONDECEMBER 13, 2019We are providing access to our proxy materials primarily over the Internet rather than mailing paper copies of those materials to each stockholder. On or about October 25, 2019 we mailed a Notice of Internet Availability of Proxy Materials ("Notice") to all stockholders entitled to vote at the Annual Meeting. The Notice tells you how to:•View our proxy materials for the Annual Meeting, including this Proxy Statement and the K12 Inc. Annual Report to Stockholders for the fiscal year ended June 30, 2019, on the Internet and vote; and•Instruct us to send proxy materials to you by mail or email.K12Stride, Inc., a Delaware corporation, for use at the annual meeting of stockholders to be held at the law firm of Latham & Watkins LLP, 555 Eleventh Street, N.W.,NW, Suite 1000, Washington, D.C.DC 20004-1304, on Friday, December 13, 2019,9, 2022, at 10:11:00 A.M.a.m., Eastern Time, and any adjournments or postponements thereof ("Annual Meeting"(the “Annual Meeting”). "K12," "we," "our," "us"“Stride,” “we,” “our,” “us” and the "Company"“Company” each refer to K12Stride, Inc. The mailing address of our principal executive offices is 2300 Corporate Park11720 Plaza America Drive, Herndon,9th Floor, Reston, VA, 20171.20190. This Proxy Statement will be made available on or about October 25, 2019,26, 2022, to holders of record as of the close of business on October 18, 20192022 of our common stock, par value $0.0001 per share ("(“Common Stock"Stock”). of Directors has fixed the close of business on October 18, 20192022 as the record date ("(“Record Date"Date”) for determining the stockholders entitled to notice of, and to vote at, the Annual Meeting. On the Record Date, we had 40,955,11043,031,568 shares of Common Stock outstanding and entitled to vote.The presence, in person or by duly executed proxy, of stockholders representing aall the votesshares of Common Stock issued and outstanding and entitled to be castvote at the Annual Meeting, the holders of which are present in person or represented by proxy, will constitute a quorum.quorum for the transaction of business at the Annual Meeting. If a quorum is not present at the Annual Meeting, we expect that the Annual Meeting will be adjourned or postponed to solicit additional proxies.Board of Directors;Board; and an affirmative vote of a majority of the votes present in person or represented by proxy at the Annual Meeting is required for (i) the non-binding advisory resolution approving the executive compensation of the named executive officers of the Company, (ii) the ratification of the appointment of BDO USA, LLP as the Company'sCompany’s independent registered public accounting firm for the fiscal year ending2020 ("2023 (“fiscal 2020"2023”), (ii) the non-binding advisory resolution approving the compensation of the(iii)restatement of the Company’s 2016 Equity Incentive Award Plan, and (iv) such other matters as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.•of Director nominees named in Proposal 1;•named executive officersNEOs of the Company;•3,4, the ratificationapproval of the appointmentamendment and restatement of BDO USA, LLP as the Company's independent registered public accounting firm for fiscal 2020;Company’s 2016 Equity Incentive Award Plan; and•proxy;proxy card; (iii) voting again by telephone; (iv) voting again via the Internet; or (iii)(v) attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, in and of itself, constitute revocation of a proxy. Any written notice revoking a proxy should be delivered to K12Stride, Inc., Attn: General Counsel and Secretary, 2300 Corporate Park Drive, Herndon,11720 Plaza America, 9th Floor, Reston, VA, 20171.20190. If your shares of Common Stock are heldregistered in a brokerage account,the name of your broker, bank or other nominee, you must follow your broker'sthe instructions of such broker, bank or other nominee to revoke a proxy.Abstentions and Broker Non-VotesBroker non-votes occur when a nominee holdingvoting securities forCommon Stock in their own names should provide identification and have their ownership verified against the list of registered stockholders as of the close of business on the Record Date. Those who have beneficial ownership of stock through a beneficial owner does not vote on a particular proposal because thebroker, bank or other nominee does not have discretionary voting power on that item and has not received instructionsmust bring account statements or letters from the beneficial owner. Abstentions, withheld votes, and broker, non-votes are included in determining whether a quorum is present but are not deemed a vote cast "For"bank or "Against" a given proposal, and therefore, are not included in the tabulationother nominee indicating that they owned Common Stock as of the voting results. As such, abstentions, withheld votes and broker non-votes do not affectclose of business on the voting results with respectRecord Date.election of directors. Abstentionspublic health and broker non-votes willtravel concerns our stockholders may have the effect of a vote against the approval of any items requiring the affirmative voteregarding our in person Annual Meeting and recommendations that public health officials have issued and may issue in light of the holderscontinuing public health crisis caused by COVID-19. As a result, we will enforce appropriate protocols consistent with then applicable federal, state and local guidelines, mandates or recommendations or facility requirements. These requirements may include the use of a majorityface coverings, proof of vaccination and maintaining appropriate social distancing. We may also impose additional procedures or greaterlimitations on meeting attendees. We plan to announce any such updates on our website https://investors.stridelearning.com/governance/2022-annual-meeting/default.aspx, and we encourage you to check this website prior to the meeting if you plan to attend.outstandingAnnual Meeting will be provided during the Annual Meeting. To vote at the Annual Meeting, those who have beneficial ownership of Common Stock entitled to vote.("(“DF King"King”) to assist in obtaining proxies from stockholders for the Annual Meeting. The estimated cost of such services is $17,500, plus out-of-pocket expenses. DF King may be contacted at (800) 431-9633848-2998 (banks and brokers may call (212) 269-5550) or via email at K12@dfking.com.thirty (30)30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. We do not currently intend to seek an adjournment of the Annual Meeting.ContentsQUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THESE PROXY MATERIALSThe following addresses some questions you may have regarding the matters to be voted uponnine members, each of whose term expires at the Annual Meeting. These questionsEight of the nine directors have been nominated for election for a term expiring at the 2023 annual meeting of stockholders. The eight nominees are: Aida M. Alvarez, Craig R. Barrett, Robert L. Cohen, Steven B. Fink, Robert E. Knowling, Jr., Liza McFadden, James J. Rhyu, and answers may not address all questions that may be importantJoseph A. Verbrugge. Each of the nominees has agreed to youserve as a stockholderdirector if elected, and the Company believes that each nominee will be available to serve.
Please referIf the nominees for the Board are duly elected at the Annual Meeting, then each of our directors, other than Mr. Rhyu, will serve as an independent director.more detailed information contained elsewhere indate of this Proxy Statement, membership on the committees of the Board is as follows: documents referredfollowing criteria, as well as any other factors it deems appropriate, in recommending candidates for election to our Board:incorporatedformer officer of a publicly traded company, and a general understanding of marketing, finance, operations, governance and other elements relevant to the success of the Company in today’s business environment;referencestockholders, provided such recommendations are submitted in this Proxy Statement for additional information.Why am I receiving this Proxy Statement?The Company is soliciting proxies for the Annual Meeting. You are receiving a Proxy Statement because you owned shares of Common Stock atOctober 18, 2019, the Record Date for the Annual Meeting, which entitles you to vote at the Annual Meeting. By use of a proxy, you can vote whether90th day, or not you attend the Annual Meeting. This Proxy Statement describes the matters on which we would like you to cast a vote and provides information on those matters so that you can make an informed decision.Why is K12 calling the Annual Meeting?We are calling the Annual Meeting and submitting proposals to stockholders of the Company to consider and vote upon Annual Meeting matters, including (i) the election of directors, (ii) a non-binding advisory resolution approving the compensation of the Company's named executive officers, and (iii) the ratification of the appointment of our independent registered public accounting firm.How does the Board of Directors recommend that I vote?Our Board of Directors recommends that you voteFOR the election of each of the Board of Director nominees named in Proposal 1 andFOR each of Proposals 2 and 3.What do I need to do now?After carefully reading and considering the information in this Proxy Statement, please vote electronically via the Internet or by telephone by following the instructions provided by your bank or broker or complete, date, sign and promptly mail the proxy card (if you request a paper copy) in the envelope provided, which requires no postage if mailed in the United States.May I vote in person?Yes. If you were a stockholder of record as ofearlier than the close of business on October 18, 2019, youthe 120th day, prior to the anniversary of the preceding year’s annual meeting of stockholders. Such recommendations should include the name and address and other pertinent information about the candidate as is required to be included in the Company’s proxy statement. Recommendations should be submitted to the corporate secretary of the Company at Stride, Inc., 11720 Plaza America Drive, 9th Floor, Reston, VA, 20190, Attention: General Counsel and Secretary. The Nominating and Corporate Governance Committee will consider the criteria set forth above and other relevant information when evaluating director candidates recommended by stockholders.attendcommunicate directly with our Board, individually or as a group, by sending an email to our General Counsel at OGC@K12.com, or by mailing a letter to Stride, Inc., 11720 Plaza America Drive, 9th Floor, Reston, VA, 20190, Attention: General Counsel and Secretary. Our General Counsel will monitor these communications and provide summaries of all received communications to our Board at its regularly scheduled meetings. Where the nature of a communication warrants, our General Counsel may decide to seek the more immediate attention of the appropriate committee of the Board or an individual director, or our management or independent advisors and will determine whether any response is necessary. (1) Represents the aggregate grant date fair values of stock awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. On January 3, 2022, each non-employee director who held such position at the beginning of the calendar year, was eligible to receive an award of restricted stock as discussed above. Ms. McFadden and Mr. Knowling elected to receive their awards in deferred stock units under the Directors Deferred Compensation Plan. The restricted stock and deferred stock units vest on the date of the Annual Meeting. (2) As of June 30, 2022, Ms. Alvarez held 4,362 unvested restricted shares. (3) As of June 30, 2022, Mr. Barrett held 4,362 unvested restricted shares. (4) Mr. Bron was not nominated for reelection at the Company’s 2021 Annual Meeting of Stockholders and ceased serving on our Board on December 10, 2021. The amount shown represents a pro-rated portion of Mr. Bron’s annual retainer based on his partial year of service. (5) As of June 30, 2022, Mr. Cohen held 4,362 unvested restricted shares. (6) Mr. Engler was not nominated for reelection at the Company’s 2021 Annual Meeting of Stockholders and ceased serving on our Board on December 10, 2021. The amount shown represents a pro-rated portion of Mr. Engler’s annual retainer based on his partial year of service. (7) As of June 30, 2022, Mr. Fink held 4,362 unvested restricted shares. (8) As of June 30, 2022, Ms. Harker held 4,362 unvested restricted shares. (9) As of June 30, 2022, Mr. Knowling held 4,362 unvested deferred stock units. (10) On January 3, 2022, Mr. Knowling was granted a one-time award of 6,045 deferred stock units that vested on April 3, 2022. (11) As of June 30, 2022, Ms. McFadden held 4,362 unvested deferred stock units. vote yourManagement table below for additional information on the beneficial ownership of our Common Stock by each of our directors.person insteadcompliance with this policy by September 28, 2021 or five years after they begin service on our Board, whichever date is later. As of voting by Internetthe date of this Proxy Statement, all of our non-employee directors are in compliance with this policy or telephoneare within the period to accumulate the specified level of ownership.returning your signed proxy card (if you request a paper copy). However, we urge youportion of their cash and equity compensation for service on our Board. In the case of a deferral of an equity award, the non-employee director is granted an equal amount of deferred stock units in lieu of restricted shares. Deferred stock units granted in lieu of a restricted stock award are subject to vote in advance even if you are planning to attend the Annual Meeting.How do I vote if my shares are held in "street name" by my bank, broker or agent?If you are a beneficial owner of shares registered in the name of your broker, bank,same vesting requirements or other agent, you shouldrestrictions that would have received voting instructions with these proxy materials fromapplied to such restricted stock award.organization rather than from us. Simply complete and mail your voting instructions as directed by your brokerthe cash compensation would have been paid but for the deferral. Deferred stock units credited in lieu of cash compensation are fully vested.bank to ensure that your vote is counted. To vote in personcash, at the Annual Meeting, you must obtain a valid proxy fromCompany’s discretion.your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.If my shares are held in "street name" by a broker, will my broker vote my shares for me even if I do not give my broker voting instructions?Under the rules that govern brokers who have record ownership of shares that are held in "street name" for their clients, brokers may vote such shares on behalf of their clients with respect to "routine" matters (such as the ratification of auditors in Proposal 3), but not with respect to non-routine matters (such as Proposals 1 and 2). If the proposals to be acted upon at the Annual Meeting include both routine and non-routine matters, the broker may turn in a proxy card for uninstructed shares that votes on the routine matters, but expressly states that the broker is not voting on non-routine matters. This is called a "broker non-vote" as to non-routine matters. Broker non-votes on non-routine matters will be counted for the purpose of determining the presence or absence of a quorum, but will not be counted for the purpose of determining the number of votes cast. We encourage you to provide specific instructions to your broker by returning your proxy card or by voting electronically via the Internet or by telephone, if permitted by the broker or other nominee that holds your shares. This ensures that your shares will be properly voted at the Annual Meeting.Can I revoke my proxy and change my vote?Yes. You have the right to revoke your proxy at any time prior to the time your shares are voted at the Annual Meeting. If you are a stockholder of record, your proxy can be revoked in several ways: by timely delivery of a written revocation to our corporate secretary, by submitting another valid proxy bearing a later date or by attending the Annual Meeting and voting your shares in person, even if you have previously voted using one of the available methods.When and where is the Annual Meeting?The Annual Meeting will be held on December 13, 2019 at 10:00 A.M., Eastern Time, at the law firm of Latham & Watkins LLP, 555 Eleventh Street, N.W., Suite 1000, Washington, DC 20004-1304.Who can help answer my questions regarding the Annual Meeting or the proposals?You may contact K12 to assist you with questions about the Annual Meeting. You may reach K12 at:K12 Inc.Attention: Investor Relations2300 Corporate Park DriveHerndon, VA 20171(703) 483-7000You may also contact DF King to assist you with questions about proxies or voting. You may reach DF King at:D.F. King & Co.,Inc.,48 Wall Street, 22nd FloorNew York, New York 10005(800) 431-9633Banks and brokers may call (212) 269-5550CORPORATE GOVERNANCE AND BOARD MATTERS of Directors oversees the management of the Company and its business for the benefit of our stockholders in order to enhance stockholder value over the long-termlong term and to achieve its educational mission. The Board of Directors also has adopted Corporate Governance Guidelines to assist it in the exercise of its responsibilities. The Guidelines are reviewed annually and periodically amended as the Board of Directors enhances the Company'sCompany’s corporate governance practices. The Board of Directors has also adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees. The purpose of this code is to promote honest and ethical conduct for conducting the business of the Company, consistent with the highest standards of business ethics. The Corporate Governance Guidelines and Code of Business Conduct and Ethics are available on our website at www.K12.com under theK12 Corporate-Investor Relations-Governance section.•Regular•IndependentChairmanCEO;and Chief Executive Officer ("CEO");•Anwho is an independent director;•A Lead Independent Director with delineated authority and responsibility;•Director•A("(“Exchange Act"Act”), regarding any amendment to, or waiver from a material provision of our Code of Business Conduct and Ethics involving our principal executive, financial or accounting officer or controller by posting such information on our website.DirectorsTermthe board of Office. All directors or the compensation committee of any other company. During fiscal 2022, no members of the Compensation Committee were current or former officers of the Company serve terms of one year and until the election and qualification of their respective successors.Attendance at Board and Committee Meetings and the 2018 Annual Meeting. Our Board of Directors met nine times in person or telephonically during fiscal 2019. Each director attended at least 75% of the total Board and committee meetings to which they were assigned. Our policy with respect to director attendance at the annual meeting of stockholders is to encourage, but not require, director attendance. Mr. Davis was the only member of our Board of Directors to attend our 2018 annual meeting of stockholders. Our director attendance policy is included in our Corporate Governance Guidelines, which is available on our website at www.K12.com.Communication with Directors. Stockholders and other interested parties may communicate directly with our Board of Directors, individually or as a group, by sending an email to our General Counsel at OGC@K12.com, or by mailing a letter to K12 Inc., 2300 Corporate Park Drive, Herndon, VA 20171, Attention: General Counsel and Secretary. Our General Counsel will monitor these communications and provide summaries of all received communications to our Board of Directors at its regularly scheduled meetings. Where the nature of a communication warrants, our General Counsel may decide to seek the more immediate attention of the appropriate committee of the Board of Directors or an individual director, or our management or independent advisors and will determine whether any response is necessary.Our Board of Directors has affirmatively determined that each of our non-employee directors is "independent" as defined in the currently applicable listing standards of the New York Stock Exchange ("NYSE") and the rules and regulations of the Securities and Exchange Commission ("SEC"). Mr. Davis is not independent under either NYSE or SEC rules because he is an executive officer of the Company. If the nominees for the Board of Directors are duly elected at the Annual Meeting, then each of our directors, other than Mr. Davis, will serve as an independent director. Board of Directors Leadership StructureOur Board of Directors is comprised of independent, accomplished and experienced directors who provide advice and oversight of management to further the interestsemployees of the Company and its stockholders. Our governance framework provides the Board of Directors with the flexibility to determine an optimal organizational structure for leadership and engagement while ensuring appropriate insight into the operations and strategic issuesno members of the Company. The Board of Directors has evaluated its leadership structure and determined that Mr. Davis should serve as Chairman of the Board and that Dr. Craig Barrett should serve as Lead Independent Director.Chairman. Our Board of Directors elects a chairman from among the directors and determines whether to separate or combine the roles of chairman and chief executive officer based on what it believes best serves the needs ofCompensation Committee had any relationship requiring disclosure by the Company and its stockholders at any particular time. Both approaches have been taken depending on the circumstances. The determination to appoint Mr. Davis as Chairman was based onunder Item 404 of Regulation S-K.number of factors that made him particularly well-suited for the role. These factors included his prior position as Chairman and CEO, his prior service on the Board of Directors and its Compensation Committee, and his understanding of the Company's business and day-to-day operations, growth opportunities, challenges and risk management practices. This combination of Company experience and expertise enables Mr. Davis to provide strong and effective leadership to the Board of Directors and to ensure that the Board of Directors is informed of important issues. In consultation with our Lead Independent Director, the Chairman sets the agenda for the regular and special meetings of the Board of Directors, presides at the annual meeting of stockholders and performs such other functions and responsibilities as set forth in the Corporate Governance Guidelines, or as requestedwritten charter adopted by the Board, of Directors.Lead Independent Director. The role of the Lead Independent Director is to facilitate communications between the Chairman and CEO and the independent directors and the committees of the Board of Directors. In doing so, the Lead Independent Director, Dr. Barrett, serves as the liaison between the Board of Directors and the Chairman and CEO, thereby giving guidance to management in meeting the objectives set by the Board of Directors and monitoring compliance with corporate governance policies. Additionally, the Lead Independent Director serves as a liaison between the Board of Directors and stockholders. The Lead Independent Director has the authority to call meetings of the independent directors and chairs executive sessions of the Board of Directors during which no members of management are present. These meetings are intended to provide the Lead Independent Director withinformation that he can use to assist the Chairman and CEO to function in the most effective manner. The Board of Directors believes the Lead Independent Director provides additional independent oversight of executive management and Board matters.Executive Sessions of the Board. Our Board of Directors holds executive sessions without management directors or management present at each regularly scheduled meeting of the Board of Directors. The independent directors also may meet without management present at other times as requested by any independent director. As Lead Independent Director, Dr. Barrett chairs the executive sessions of the Board of Directors. Committees of the Board of DirectorsThe standing committees of our Board of Directors are the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Academic Committee. Asor the “Committee”, assists the Board in fulfilling its responsibility for oversight of the date of this Proxy Statement, membership on the Committeesquality and integrity of the BoardCompany’s financial reporting processes and its internal audit function. Management has the primary responsibility for the financial statements and the reporting process, including the system of Directors is as follows:
Audit CommitteeThe Audit Committee, which was established in accordance with Section 3(a)(58)(A)internal controls and for assessing the effectiveness of the Exchange Act, consists of Mr. Fink, who serves as the Chairman, Ms. Alvarez and Mr. Cohen. Our Board of Directors has determined that each of Messrs. Cohen and Fink and Ms. Alvarez qualify asCompany’s internal control over financial reporting. The independent directors under the applicable NYSE listing requirements and SEC regulations.The Audit Committee met six times during fiscal 2019. The meetings to review the Company's quarterly and annual periodic filings with the SEC each include at least two separate sessions (which together count as only one meeting). Mr. Fink engaged in routine separate communications with the Company's external auditors and Chief Financial Officer, held the required executive sessions at each meeting, and requested participation by outside counsel, as needed. The Audit Committee has a charter, available on our website at www.K12.com, setting forth its structure, powers and responsibilities. Pursuant to the charter, the Audit Committee is comprised of at least three members appointed by our Board of Directors, each of whom satisfies the requirements of independence and financial literacy. In addition, our Board of Directors has determined that Messrs. Cohen and Fink and Ms. Alvarez are eachresponsible for performing an independent audit committeefinancial expert, as that term is defined under the Exchange Act. Under its charter, the responsibilities of the Audit Committee include:•discussing with our independent registered public accounting firm the conduct of the annual audit, the adequacyCompany’s consolidated financial statements and effectiveness of our accounting, the effectiveness of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board and for issuing reports thereon.auditor independence;•approvingthe independent accountant’s communications with the Committee concerning independence and has discussed with the independent auditors the auditors’ independence from the Company and its management.to be includedfor the fiscal year ended June 30, 2022, in ourthe Company’s Annual Report on Form 10-K;•selecting annually an10-K for the fiscal year ended June 30, 2022, filed with the SEC on August 10, 2022. The Committee also recommended to the Board, subject to stockholder ratification, the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm;•pre-approving all auditfirm for the fiscal year ending June 30, 2023, and non-audit servicesthe Board accepted its recommendation. fees associated with ourshall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, each as amended (together, the “Acts”), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Acts.firm;firm for the fiscal years ended June 30, 2022 and•reviewing June 30, 2021. BDO USA has billed the Company the following fees for professional services rendered in respect of fiscal 2022 and discussingfiscal 2021: management significant accounting mattersstatutory and disclosures.In addition, our Corporate Governance Guidelines provideregulatory filings or engagements. Audit-related fees in fiscal 2022 and 2021 were for professional services associated with audits of certain managed schools and other minor matters.members ofunder the Audit Committee maycharter, all auditor engagements must be approved in advance by the Audit Committee. All of the services provided to the Company by BDO USA during fiscal 2022 and 2021 were pre-approved by the Audit Committee.serverequired by law, our Board believes that stockholders should be given the opportunity to express their view on the audit committeessubject. While not binding on the Audit Committee, if the stockholders do not ratify this appointment, the appointment will be reconsidered by the Audit Committee. Even if the appointment is ratified, the Audit Committee, in its discretion, may appoint a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of more than two other companiesthe Company and our stockholders. A representative of BDO USA is expected to attend the Annual Meeting and this representative will be provided with an opportunity to make a statement, if he or she desires, and will be available to respond to appropriate questions from stockholders, if any.same time as they serve on our Audit Committee.Compensation CommitteeThe Compensation Committee consistsAnnual Meeting is required to ratify the appointment of Mr. Knowling, who servesBDO USA as the Chairman, and Messrs. Engler and Fink. Our Board of Directors has determined that each of Messrs. Engler, Fink and Knowling qualify asCompany’s independent directors within the meaningregistered public accounting firm.applicable NYSE listing requirementsExchange Act, we are asking our stockholders to cast a non-binding advisory vote to approve the fiscal 2022 compensation of our NEOs, as disclosed in this Proxy Statement. This Proposal, commonly known as a “Say-on-Pay” proposal, gives our stockholders the opportunity to express their views on the design and SEC regulations.The Compensation Committee met six times during fiscal 2019. The Compensation Committee has a charter, available oneffectiveness of our website at www.K12.com, setting forth its structure, powersexecutive compensation program.responsibilities. These include:•reviewingAnalysis,” our executive compensation program is designed to attract, motivate and retain our NEOs, who are critical to our success. Under this program, our NEOs are rewarded for the achievement of specific annual, long-term and strategic goals, and the realization of increased stockholder value. Please read the “Compensation Discussion and Analysis” and the compensation philosophytables that follow for additional details about our executive compensation program, including information about the fiscal 2022 compensation of our Company;•reviewing, approvingNEOs, our engagement with stockholders in fiscal 2022 relating to our compensation program and recommending corporate goalsthe responsive actions we have taken in and objectives relatingsubsequent to fiscal 2022.ChairmanNEOs as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and CEOthe philosophy, policies and based upon an evaluationpractices described in this Proxy Statement. Accordingly, we ask our stockholders to vote FOR the following resolution:achievementamendment and restatement of these goals, recommendingthe Company’s 2016 Equity Incentive Award Plan (the “2016 Plan”) to (1) increase the number of shares of common stock available for issuance under the 2016 Plan by 1,045,000 shares, (2) remove certain provisions which were otherwise required for awards to qualify as performance-based compensation under an exception to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), prior to its repeal and (3) extend the term of the 2016 Plan to October 7, 2032, the tenth anniversary of the date the 2016 Plan, as amended and restated, was approved by the Board, (4) increase the limit on the number of shares that may be issued upon the exercise of incentive stock options under the plan, and (5) provide that dividends and dividend equivalents may not be paid on unvested awards, as described below.Chairmansuccess. Providing long term incentive compensation opportunities in the form of equity awards aligns the interests of the Company’s employees, directors and CEO'sconsultants with the long-term interests of our stockholders, linking compensation to Company performance while building the value of our Company. The use of equity awards as compensation also allows the Company to conserve cash resources for other important purposes. (1) Based on the closing price of our common stock on September 19, 2022 of $40.34 per share. (2) PSUs shown at target. compensation;•reviewingof 43,039,379 shares of common stock outstanding.approving salaries, bonusesthe fact that the ability to continue to grant equity compensation is vital to the Company’s ability to continue to attract and retain talented employees in the industry in which it competes, the Board has determined that the size of the share reserve under the amended and restated 2016 Plan after giving effect to the amendment and restatement is reasonable and appropriate at this time. The Board will not create a subcommittee to evaluate the risk and benefits for issuing shares under the amended and restated 2016 Plan.formsservice providers is essential to our success. Equity awards are intended to motivate high levels of performance, align the interests of our employees, directors and consultants with those of our stockholders by giving these individuals the perspective of an owner with an equity stake in our Company and provide a means of recognizing their contributions to the success of our Company. Our Board and leadership team believe that long-term equity incentive awards are necessary to remain competitive in the market and are essential to recruiting and retaining the highly qualified employees who help our Company meet its goals.executive officers, including without limitationprior equity incentive plans during the period from the original effective date of the 2016 Plan through September 19, 2022 in accordance with the terms of the 2016 Plan.restrictedunder the 2016 Plan during its term. Shares issued under the 2016 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares.other forms ofrestated 2016 Plan expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring shares covered by the award at a price not greater than the price (as adjusted to reflect any equity compensation;•considering and adopting changes to our compensation structurerestructuring) paid by the participant for the shares or not issuing any shares covered by the award, the unused shares covered by the award will, as applicable, become or again be available for award grants under the amended and restated 2016 Plan. In addition, except as provided below with respect to all non-executive officer employees, including,options, shares delivered to the Company to satisfy any tax withholding obligation (including shares retained by the Company from the award being purchased and/or creating the tax obligation) will, as applicable, become or again be available for award grants under the amended and restated 2016 Plan. However, the amended and restated 2016 Plan does not allow the share reserve to be recharged or replenished with shares that (1) are tendered or withheld to satisfy the exercise price or tax withholding obligation of an option; (2) are subject to a stock appreciation right but are not limited to, salariesissued in connection with the stock settlement of the stock appreciation right; or (3) the Company purchases on the open market with cash proceeds from the exercise of options.benefits;restated 2016 Plan.•performing such duties and exercising such authority restated 2016 Plan is administered by the Committee or a subcommittee thereof (or by the Board or another Board committee as may be assigneddetermined by the Board of Directors, including under the terms of our equity incentive and bonus plans.Nominating and Corporate Governance CommitteeNominating and Corporate Governance Committee consists of Ms. McFadden, who serves as the Chairman, and Messrs. Bron and Engler. Our Board of Directors has determined that each ofMs. McFadden and Messrs. Bron and Engler qualify as independent directors within the meaningadministrator of the applicable NYSE listing requirementsamended and SEC regulations. Our Board of Directors has adopted Corporate Governance Guidelines which are available on our website at www.K12.com.The Nominating and Corporate Governance Committee met five times during fiscal 2019. The Nominating and Corporate Governance Committee has a charter, available on our website at www.K12.com, setting forth its structure, powers and responsibilities. Under its charter, the Nominating and Corporate Governance Committeerestated 2016 Plan (the “Administrator”) has the authority to nominate persons to stand for electiondetermine which service providers receive awards and to fill vacancies on our Board of Directors. The Nominatingsets the terms and Corporate Governance Committee may consider the following criteria, as well as any other factors it deems appropriate, in recommending candidates for election to our Board of Directors:•personal and professional integrity, ethics and values;•experience in corporate management, such as serving as an officer or former officer of a publicly traded company, and a general understanding of marketing, finance, operations, governance and other elements relevantconditions applicable to the successaward within the confines of the Company in today's businessamended and regulatory environment;•experience inrestated 2016 Plan’s terms. The Administrator has the field of education policy and administration;•service as a board member of another publicly traded company;•practical and mature business judgment, including the abilityauthority to make independent analytical inquiries;all determinations and•diversity interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the Board of Directors, which includes gender, racialamended and ethnic diversity, as well a diversity of backgrounds and experiences.Board of Directors strives to nominate directors with a variety of complementary skills so that, as a group, the Board of Directors will possess a mix of the appropriate backgrounds, talent, gender, race, perspectives, skills and expertise to oversee the Company's business. Currently, our nine member Board has two Hispanic directors, two African American directors, and two female directors. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders, provided such recommendations are submitted in writing not later than the close of business on the 90th day, or earlier than the close of business on the 120th day, prior to the anniversary of the preceding year's annual meeting of the stockholders. Such recommendations should include the name and address and other pertinent information about the candidate as is required to be included in the Company's proxy statement. Recommendations should be submitted to the corporate secretary of the Company at K12 Inc., 2300 Corporate Park Drive, Herndon, VA 20171, Attention: General Counsel and Secretary. The Nominating and Corporate Governance Committee will consider the criteria set forth above and other relevant information when evaluating director candidates recommended by stockholders.On the recommendation of the Nominating and Corporate Governance Committee, Mr. Cohen was appointed to the Board of Directors, the Audit Committee and the Academic Committee. Accordingly, he is standing for election as a director for the first time. Our directors as a group, recommended Mr. Cohen to the Nominating and Corporate Governance Committee, which evaluated him prior to his appointment to the Board of Directors.Academic CommitteeThe Academic Committee consists of Dr. Barrett, who serves as the Chairman, and Messrs. Cohen and Engler. The primary role of the Academic Committee is to make recommendations and assistmanagement in discharging its responsibility to ensure continuous improvement in academic outcomes for the students and schools we serve.The Academic Committee has a charter, available on our website at www.K12.com, setting forth the structure, powers and responsibilities of the Academic Committee. Members of the Academic Committee participated in four meetings of the Company's Educational Advisory Committee ("EAC") during fiscal 2019. Under its charter, the responsibilities of the Academic Committee include:•monitoring the effectiveness of the Company's education products and services;•participating in the meetings of the Company's EAC;•obtaining information, data, and recommendations from the Company's Chief Academic Officer to assist in its decision making;•evaluating and implementing, as necessary, the proposals of the EAC; and•reporting and recommending to the Board of Directors to maximize the Company's ability to provide an effective education to students enrolled in the schools served by the Company.Our Board of Directors believes full and open communication with management is essential for effective enterprise risk management and oversight. Members discuss strategy and risks facing the Company with our Chairman and CEO and our senior management at meetings of our Board of Directors or when members of our Board of Directors seek to focus on a particular area of risk, such as meeting state academic accountability standards at the schools we manage, ensuring the privacy of student information, compliance with state regulatory and reporting requirements, or information technology cybersecurity protections and preparedness. Because our Chairman and CEO sets the agenda for the Board of Directors' meetings, each functional division of the Company can identify risk-related topics that may require added attention, which have included evolving state curriculum standards, student engagement and retention, education technology, legal and policy matters, information security, and succession planning. Each quarter, our Chairman and CEO also presents an assessment of the strategic, financial and operational issues facing the Company, which frequently includes a review of associated risks and opportunities.Management is responsible for identifying, prioritizing, remediating and monitoring the day-to-day management of risks that the Company faces, while our Board of Directors, as a whole and through its committees, is responsible for the oversight of enterprise risk management. In fiscal 2019, the Audit Committee continued to work directly with a major independent accounting firm to support the Company's internal audit function in risk management. This combination provides us with the focus, scope, expertise and continuous attention necessary for effective risk management.While our Board of Directors is ultimately responsible for risk oversight, three of its committees concentrate on specific risk areas:•The Audit Committee oversees financial reporting and internal controls, school and corporate compliance, cybersecurity, and operations risk and discusses with management the Company's policies with respect to those matters. Our internal audit department prepares various risk management reports that are provided to the Audit Committee on a quarterly basis, or as needed. The reports to the Audit Committee also include an evaluation by our Chief Information Officer regarding the security of our information systems and the initiatives we undertake to continually assess vulnerabilities and take preventativemeasures. The Audit Committee reports on our cybersecurity measures in its regular reports to the Board of Directors. In addition, the Audit Committee assists the Board of Directors in the oversight of legal risk management. A Legal Compliance and Ethics Committee (consisting of senior management members) maintains a Legal Compliance and Ethics Program, which includes a Chief School Compliance Officer within the Office of the General Counsel. The Legal Compliance and Ethics Committee provides reports to the Audit Committee on the Company's legal risks and compliance-related matters in the schools we serve and at the corporate level.•Our Compensation Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs, and retains outside compensation and legal experts for that purpose, as further explained in the Compensation Committee Report which begins on page 47.•Finally, our Nominating and Corporate Governance Committee assists our Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks associated with the organization, membership and structure of the Board of Directors, succession planning for our directors and corporate governance. Director Compensation for Fiscal 2019In fiscal 2019, pursuant to our Amended Non-Employee Directors Compensation Plan ("Directors Compensation Plan"), our non-employee directors were eligible to receive annual cash retainers for service on the Board of Directors and assigned committees and annual restricted stock awards. Mr. Davis, our Chairman and CEO, received no additional compensation for his service on our Board of Directors.Pursuant to the terms of the Directors Compensation Plan, each non-employee director receives an annual cash retainer of $70,000 and an additional amount for each committee on which the non-employee director serves, as shown below: Additional Cash
RetainerCommittee Chair Member $35,000 $10,000 $15,000 $5,000 $10,000 $5,000 $5,000 $5,000 The Directors Compensation Plan also provides for annual restricted stock awards for each non-employee director, valued at $120,000 as of the grant date (prorated for a partial year of service), with the shares underlying such awards vesting fully one year from the date of the grant. The annual cash retainer, including the committee fees, and the annual restricted stock award may be deferred under our Deferred Compensation Plan for Non-Employee Directors ("Directors Deferred Compensation Plan").The following table sets forth the compensation paid to our non-employee directors for their services during fiscal 2019, including amounts that were deferred under the Directors Deferred Compensation Plan:Name Fees Earned or
Paid in Cash ($) Stock Awards ($) (1) Total ($) 75,000 120,000 195,000 70,000 120,000 190,000 80,000 120,000 200,000 25,795 103,874 129,669 85,000 120,000 205,000 105,000 120,000 225,000 75,000 120,000 195,000 75,000 120,000 195,000 (1)Represents themaximum aggregate grant date fair values of stock awards computedvalue, as determined in accordance with FASB ASC Topic 718. On January 2, 2019, each718 (or any successor thereto), of all equity and cash-based awards granted to a non-employee director who held such position atfor services as a director under the beginningamended and restated 2016 Plan during any fiscal year may not exceed $750,000 per year (or $1,000,000 in the fiscal year of a director’s initial service). Notwithstanding the foregoing, in no event will more than the authorized number of shares available for issuance under the amended and restated 2016 Plan be granted to any one person during any fiscal year of the calendar year, wasCompany.an award of 5,006 shares of restricted stock. Mr. Bron, Mr. Knowling and Ms. McFadden elected to receive their awards in deferred stock units under the Directors Deferred Compensation Plan. The restricted stockamended and deferred stock units vest on January 2, 2020.(2)As of June 30, 2019, Ms. Alvarez held 5,006 unvested restricted shares.(3)As of June 30, 2019, Mr. Barrett held 5,006 unvested restricted shares.(4)As of June 30, 2019, Mr. Bron held 5,006 unvested deferred stock units.(5)Mr. Cohen joined the Board of Directors in February 2019. The amounts shown represent a pro-rated portion of Mr. Cohen's annual retainer and annual restricted stock award based on his partial year of service. Mr. Cohen elected to receive his restricted stock award in deferred stock units under the Directors Deferred Compensationrestated 2016 Plan. As of June 30, 2019, Mr. Cohen held 3,240 unvested deferredSeptember 19, 2022, the Company and its subsidiaries had approximately 8,000 employees and 8 non-employee directors who were eligible to receive awards under the 2016 Plan. Based on our historical practices, our approximately 700 consultants and other service providers are generally not considered for awards under our long-term equity incentive program.units.(6)Asoptions, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or cash based awards. Awards to eligible individuals shall be subject to the terms of June 30, 2019, Mr. Engler held 5,006 unvested restricted shares.(7)Asan individual award agreement between the Company and the individual. A brief description of June 30, 2019, Mr. Fink held 5,006 unvested restricted shares.(8)As of June 30, 2019, Mr. Knowling held 5,006 unvested deferredeach award type follows.units.(9)As of June 30, 2019, Ms. McFadden held 5,006 unvested deferredoptions and non-qualified stock units.Please seeoptions, which provide the Security Ownership of Certain Beneficial Owners and Management table starting on page 53 for additional information on the beneficial ownership of the Company's Common Stock by each of our directors.Director Stock Ownership GuidelinesThe Company encourages each directorholder a right to purchase shares of common stock at a specified exercise price. The exercise price per share for each stock option shall be set by the Company's Common Administrator, but shall not be less than the fair market value on the date of the grant (or 110% of the price of an incentive stock option in the case of an individual who, on the date of the grant, owns or is deemed to own shares representing more than 10% of the stock of the Company). The term of any option award may not be longer than ten years (or five years in the case of an incentive stock option granted to a 10% stockholder of the Company). The Administrator will determine the time period for exercise of each award, including the time period for exercise following a termination of service by the recipient, subject to the ten year limitation.maintainexercise the stock appreciation right to acquire shares of the Company’s common stock upon exercise within a minimum ownership level during his or her tenure to foster alignment with our investing stockholders. To reinforce this objective, in early fiscal 2017, we adopted minimum director stockspecified time period from the date ofContentsthe stock appreciation right award agreement, the recipient may receive from the Company an amount determined by multiplying the difference between the price per share of the stock appreciation right and the value of the share on the date of exercise by the number of shares of common stock subject to the award. The maximum term for which stock appreciation rights may be exercisable under the amended and restated 2016 Plan is ten years.guidelines for allor as stockholders in relation to the award, unless and until the restrictions lapse and the restricted stock unit award vests in accordance with the terms of our non-employee directors. Pursuantthe grant. Restricted stock units may be accompanied by the right to those guidelines, these directors must holdreceive the equivalent value of dividends paid on shares of the Company’s common stock prior to the delivery of the underlying shares (i.e., dividend equivalent rights); however, dividend equivalents with respect to an award subject to vesting that are based on dividends paid prior to the vesting of such award will only be paid out to the holder to the extent that the vesting conditions are subsequently satisfied and the award vests. The Administrator may provide that settlement of restricted stock units will occur upon or as soon as reasonably practicable after the restricted stock units vest or will instead be deferred, on a mandatory basis or at the participant’s election, in a manner intended to comply with Section 409A of the Code.Commoncommon stock prior to the delivery of the shares underlying an award; however, dividends and dividend equivalents may be paid on awards subject to vesting conditions only to the extent such conditions are met. No dividend equivalents may be granted with respect to stock options or stock appreciation rights.lesser of: (i) three timesdifference between the annualamount realized on the sale and the basis of the stock. Generally, if the shares are not held for that period, the participant will recognize ordinary income upon disposition in an amount equal to the excess of the fair market value of the shares on the date of exercise over the amount paid for the shares, or if less (and if the disposition is a transaction in which loss, if any, will be recognized), the gain on disposition. Any additional gain realized by the participant upon the disposition will be a capital gain. The excess of the fair market value of shares received upon the exercise of an incentive stock option over the option price for the shares is an item of adjustment for the participant for purposes of the alternative minimum tax. Therefore, although no income is recognized upon exercise of an incentive stock option, a participant may be subject to the alternative minimum tax as a result of the exercise.retainer and (ii) 15,000the fair market value of any common stock received. Subject to the deduction limitations described below, the employer generally will be entitled to a corresponding tax deduction equal to the amount includible in the participant’s income.Non-employeeThe employer will be entitled to a deduction at the time of income recognition to the participant in an amount equal to the amount the participant is required to include in income with respect to the shares, subject to the deduction limitations described below. If a Section 83(b) election is made within 30 days after the date the restricted stock is received, the participant will recognize ordinary income at the time of the receipt of the restricted stock, and the employer will be entitled to a corresponding deduction, equal to the fair market value of the shares at the time, less the amount paid, if any, by the participant for the restricted stock. If a Section 83(b) election is made, no additional income will be recognized by the participant upon the lapse of restrictions on the restricted stock, but, if the restricted stock is subsequently forfeited, the participant may not deduct the income that was recognized pursuant to the Section 83(b) election at the time of the receipt of the restricted stock.mustpursuant to our Director Compensation Plan, the number of awards that our NEOs, other executive officers, other employees and non-employee directors may receive under the amended and restated 2016 Plan will be determined in compliance with this policy by September 28, 2021 or five years after they begin Board service, whichever date is later. Asthe discretion of the Committee in the future, and the Committee has not made any determination to make future grants to any persons under the amended and restated 2016 Plan as of the date of this Proxy Statement, allproxy statement. Therefore, other than as set forth below, it is not possible to determine the benefits that will be received in the future by participants in the amended and restated 2016 Plan. (1) Pursuant to our Director Compensation Plan, each of our non-employee directors receives an automatic annual grant of shares of restricted stock on the date of each annual meeting having a fair market value as of the date of grant equal to $200,000. Amount shown represents the number of restricted shares that would be granted based on the per share value of $40.34, which was the closing price of our common stock on September 19, 2022. (1) Share numbers shown do not take into account shares subject to awards that that have been cancelled, forfeited or expired unexercised. (2) Vested performance-based restricted stock are shown based on the actual number of shares earned. (3) Unvested performance-based awards are shown based on the target level of performance. The maximum number of performance-based awards that may vest is generally equal to 200% of the target level. non-employee directors are in compliance with this policy.Deferred Compensation Plan for Non-Employee DirectorsOurexecutive officers and non-employee directors may elect, pursuantbe considered to our Directors Deferred Compensationhave an interest in the approval of the amendment and restatement of the 2016 Plan to defer payment of all or a portion of their cash and equity compensation for service onbecause they may receive awards under such plan. Nevertheless, the Board believes that it is important to provide incentives and rewards for superior performance and the retention of Directors. Inexperienced directors and officers by adopting the caseamendment and restatement of a deferralthe 2016 Plan.an equity award, the non-employee director is granted an equal amount of deferred stock units in lieu of restricted stock. Deferred stock units granted in lieu of a restricted stock award are subjectOctober 18, 2022, certain information with respect to the same vesting requirements or other restrictions that would have applied to such restricted stock award.In the casebeneficial ownership of a deferralCommon Stock by each beneficial owner of cash compensation, the director receives a number of deferred stock units equal to the amountmore than 5% of the cash compensation being deferred, dividedCompany’s voting securities (based solely on review of filings with the SEC), each director and each NEO and all directors and executive officers of the Company as a group, except as qualified by the per-share closing priceinformation set forth in the notes to this table. To our knowledge, except as noted below, no person or entity is the beneficial owner of a sharemore than 5% of the voting power of the Company’s voting securities. As of October 18, 2022, 43,031,568 shares of our Common Stock onwere outstanding.dateaddress for each director and executive officer is c/o Stride, Inc., 11720 Plaza America Drive, 9th Floor, Reston, VA, 20190. * Denotes less than 1%. (1) Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person or entity exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable community property laws, to our knowledge, each stockholder identified in the table possesses sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by the stockholder. The number of shares beneficially owned by a person or entity includes shares of Common Stock subject to options held by that person or entity that are currently exercisable or exercisable within 60 days of October 18, 2022 and not subject to repurchase as of that date. Shares issuable pursuant to options and deferred stock units are deemed outstanding for calculating the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of calculating the percentage ownership of any other person. (2) Includes 177,268 unvested shares of restricted Common Stock that are subject to forfeiture. (3) Includes 35,389 unvested shares of restricted Common Stock that are subject to forfeiture. (4) Based on a Form 4 filed by Mr. Medina on April 18, 2022. (5) Includes 49,894 unvested shares of restricted Common Stock that are subject to forfeiture. (6) Based on a Form 4 filed by Mr. Davis on August 16, 2022 and includes 170,786 shares of Common Stock held by the Nathaniel A. Davis Revocable Trust. (7) Includes 4,362 unvested shares of restricted Common Stock that are subject to forfeiture. (8) Includes 4,362 unvested shares of restricted Common Stock that are subject to forfeiture. (9) Includes 4,362 unvested shares of restricted Common Stock that are subject to forfeiture. (10) Includes 4,362 unvested shares of restricted Common Stock that are subject to forfeiture. Mr. Fink has voting and investment control with respect to the securities held by S&C Fink Living Trust. (11) Includes 4,362 unvested shares of restricted Common Stock that are subject to forfeiture. (12) Includes 4,362 deferred stock units that are subject to forfeiture. (13) Includes 4,362 deferred stock units that are subject to forfeiture. (14) Includes 257 unvested shares of restricted Common Stock and 1,101 deferred stock units. The unvested shares of restricted Common Stock and deferred stock units are subject to forfeiture. (15) Includes 323,301 unvested shares of restricted Common Stock and 8,724 deferred stock units. The unvested shares of restricted Common Stock and deferred stock units are subject to forfeiture. (16) (17) Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on May 10, 2022. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. (18) Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 8, 2022. The address for Dimensional Fund Advisors, LP is 6300 Bee Cave Road, Building One, Austin, TX 78746. (19) cash compensation would have been paid but for the deferral. Deferred stock units credited in lieu of cash compensation are fully vested.Deferred stock units generally become payable, in a lump sum, within 90 days of the date the director no longer serves on the Board of Directors. Deferred stock units are settled in shares of Common Stock or cash, at the Company's discretion.PROPOSAL 1:ELECTION OF DIRECTORSOur Board of Directors currently has nine members: Aida M. Alvarez, Craig R. Barrett, Guillermo Bron, Robert L. Cohen, Nathaniel A. Davis, John M. Engler, Steven B. Fink, Robert E. Knowling, Jr.objectives and Liza McFadden.The term of office of each memberelements of our Board of Directors expires atexecutive compensation program, describes the Annual Meeting, or in any event at such time as their respective successors are duly elected and qualified or their earlier resignation, death, or removal from office. Each year, the stockholders will elect the members of our Board of Directors to a one-year term of office.Upon the recommendation of our Nominating and Corporate Governance Committee, the Board of Directors has approved the nomination of nine directors, Aida M. Alvarez, Craig R. Barrett, Guillermo Bron, Robert L. Cohen, Nathaniel A. Davis, John M. Engler, Steven B. Fink, Robert E. Knowling, Jr. and Liza McFadden, for election at the Annual Meeting to serve until the next annual meeting of the stockholders (or until such time as their respective successors are elected and qualified or their earlier resignation, death, or removal from office).Our Board of Directors has no reason to believe that the persons listed below as nominees for directors will be unable or decline to serve if elected. In the event of death or disqualification of any nominee or the refusal or inability of any nominee to serve as a director, proxies cast for that nominee may be voted with discretionary authority for a substitute or substitutes as shall be designated by the Board of Directors. Nominees for election to the Board of Directors shall be elected by a plurality of votes present in person or by proxy at the Annual Meeting and entitled to vote.OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ALL OF THE NOMINEES LISTED BELOW. NOMINEES FOR ELECTION AT THE ANNUAL MEETINGSet forth below are the names and other information pertaining to each person nominated to the Board of Directors.Aida M. Alvarez, Age 70Ms. Alvarez joined us a director in April 2017 and is a member of our Audit Committee. She currently serves as Chair of the Latino Community Foundation. As Administrator of the U.S. Small Business Administration, she was a member of President Clinton's Cabinet from 1997 to 2001. Previously, Ms. Alvarez served as the Director of the Office of Federal Housing Enterprise Oversight from 1993 to 1997, where she was charged with financial oversight of the secondary housing market, the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"). Prior to that, she worked for the New York City Health and Hospitals Corporation, Bear Stearns & Company, Inc. and the First Boston Corporation. She has served on the boards of directors of Fastly, Inc. since August 2019; Oportun, Inc. (formerly Progress Financial Corporation) since 2011; Zoosk, Inc. since 2014; and HP Inc. since February 2016. From 2006 to June 2016, Ms. Alvarez served on the board of Wal-Mart Stores Inc., and from 2004 to 2014, served on the boards of MUFG Americas Holdings Corporation (formerly UnionBanCal Corporation) and MUFG Union Bank N.A. (formerly Union Bank N.A.). Ms. Alvarez holds a B.A. from Harvard College. Ms. Alvarez was selected as a director because of her financial expertise, government experience, and ability to bring diverse perspectives to the Board of Directors.Craig R. Barrett, Age 80Dr. Barrett joined us as a director in September 2010, currently serves as Chairman of our Academic Committee and became our Lead Independent Director in September 2017. He served as Chief Executive Officer of Intel Corporation from 1998, until his retirement in 2009, and was also Chairman of the Board of Intel from 2005 to 2009. He previously served in various roles at Intel Corporation, including Chief Operating Officer, since joining Intel in 1974. Prior to Intel Corporation, Dr. Barrett was a member of the Department of Materials Science and Engineering faculty of Stanford University. Dr. Barrett currently serves as Co-Chairman of Achieve, Inc., an independent, bipartisan, non-profit education reform organization; President and Chairman of BASIS Schools, Inc.; Vice Chair of the Science Foundation Arizona; and Co-Chairman of the Business Coalition for Student Achievement. Dr. Barrett holds a B.S., M.S. and Ph.D. in Materials Science from Stanford University. Dr. Barrett was selected as a director because of his deep knowledge and experience in information technology innovation, as well as his global, operational, and leadership experience as Chairman and Chief Executive Officer of Intel Corporation. He also brings a unique perspective to the Board of Directors from his tenure as a professor and his volunteer work and support of numerous educational organizations.Guillermo Bron, Age 67Mr. Bron joined us as a director in July 2007 and currently serves as a member of our Nominating and Corporate Governance Committee and our Audit Committee. Mr. Bron was Managing Director at Pine Brook Road Partners, LLC, an investment firm, from December 2013 to June 2017, and served as a Managing Director of Acon Funds Management LLC, a private equity firm, from 2005 to 2012. Mr. Bron has also served as Chairman and a director of United Pan Am Financial Corp. (UPFC) since 1994, and he served as a director of Pan American Bank, FSB (Pan American), a former wholly owned subsidiary of UPFC, from 1994 to 2005. Mr. Bron has served as Chairman of idX Corporation from 2008 to 2018, and from 2000 to 2002, Mr. Bron was a director of Telemundo Group, Inc. From 1994 to 2003, Mr. Bron was an officer, director and principal stockholder of a general partner of Bastion Capital Fund, L.P., a private equity investment fund primarily focused on the Hispanic market. Previously, Mr. Bron was a Managing Director of Corporate Finance and Mergers and Acquisitions at Drexel Burnham Lambert. Mr. Bron holds B.S. degrees in Electrical Engineering and Management Science from Massachusetts Institute of Technology and an M.B.A. from Harvard University. Mr. Bron was selected as a director because of his extensive executive leadership and international experience, as well as his expertise in investment banking and capital markets, which enables him to bring valuable insights to the Board of Directors in the areas of finance and strategy. The Board of Directors also benefits from his prior experience as a public company director and audit committee member.Robert L. Cohen, Age 54Mr. Cohen joined us as a director in February 2019. Mr. Cohen currently serves in various roles including strategic advisor, investor, and board observer to high growth education technology companies including 2U Inc. and Zybooks. Mr. Cohen served as President and Chief Operating Officer of 2U through January 2016. He was appointed President in November 2013 and Chief Operating Officer in April 2012. In addition, Mr. Cohen was 2U's founding Chief Financial Officer beginning in June 2008. From 2001 to 2008, Mr. Cohen held several senior roles at The Princeton Review, including executive vice president of strategic development and executive vice president and general manager of K12 Services. From 1983 to 2001, Mr. Cohen founded and operated the largest network of franchises of The Princeton Review before selling them back to that company. Mr. Cohen attended Princeton University. He was selected as a director because of his deep knowledge and experience in the education technology industry, as well as his operational and leadership experience as Chief Operating Officer of 2U.Nathaniel A. Davis, Age 65Mr. Davis joined us as a director in July 2009 and has served as our Chairman since June 2012. In January 2013, he became our Executive Chairman, and in January 2014, Mr. Davis was appointed to be our CEO, serving in that role through February 2016 and again beginning in March 2018. Prior to joining the Company, he served as the managing director of RANND Advisory Group from 2003 until December 2012. Previously, Mr. Davis worked for XM Satellite Radio from June 2006 to November 2008, serving as President and then Chief Executive Officer until the company's merger with Sirius Radio. He also served on the XM Satellite Radio board from 1999 through 2008. From 2000 to 2003, Mr. Davis was President and Chief Operating Officer and a board member of XO Communications Inc. Mr. Davis has also held senior executive positions at Nextel Communications (EVP, Network and Technical Service), MCI Telecommunications (Chief Financial Officer) and MCI Metro (President and Chief Operating Officer). Since 2011, Mr. Davis has served as a director of Unisys Corporation and RLJ Lodging Trust. Mr. Davis has also previously served on the board of several public and private firms including Mutual of America Capital Management Corporation, Charter Communications and Telica, Inc. Mr. Davis holds an M.B.A. from the Wharton School of the University of Pennsylvania, an M.S. in Engineering Computer Science at the Moore School of the University of Pennsylvania, and a B.S. in Engineering from Stevens Institute of Technology. Mr. Davis was selected as a director based on his strong record of executive management, finance and systems engineering skills, as well as his insight into the considerations necessary to run a successful, diverse global business. The Board of Directors also benefits from his previous service on other public company boards and his experience in accounting and financial reporting.John M. Engler, Age 71Mr. Engler joined us as a director in October 2012 and is Chairmanrelated processes of our Compensation Committee and a member of our Nominating and Corporate Governance Committee and our Academic Committee. He served as President of the Business Roundtable from January 2011 to February 2017. From 2004 to 2011, Mr. Engler was the President and Chief Executive Officer of the National Association of Manufacturers. He was President of State and Local Government and Vice President of Government Solutions for North America for Electronic Data Systems Corporation from 2003 to 2004. Mr. Engler served as Michigan's 46th governor for three terms from 1991 to 2003. He also served as Interim President of Michigan State University from February 2018 to January 2019. Previously, Mr. Engler was a director of Universal Forest Products from 2003 to 2019, a director of Northwest Airlines from 2003 to 2008, a director of Dow Jones & Company, Inc. from 2005 to 2007, and a director of Delta Airlines from 2008 to 2012, and he was also a director of Munder Capital Management. Mr. Engler holds a B.S. in Agricultural Economics from Michigan State University and a J.D. from the Thomas M. Cooley Law School. Mr. Engler was selected as a director because of his executive and legislative expertise as a state governor, including working with state education budgets, and for his business experience. The Board of Directors also benefits from Mr. Engler's perspective as a director of numerous public companies and as a member of their audit committees.Steven B. Fink, Age 68Mr. Fink joined us as a director in October 2003, currently serves as Chairman of our Audit Committee and is a member of our Compensation Committee. Mr. Fink is the Co-Chairman of Heron International. He served as a director of Nobel Learning Communities, Inc. from 2003 to 2011 and as Chairman of the Board of Life Storage, LLC from 2013 to 2016. In addition, Mr. Fink is a member of the Boards of the Jackson Laboratory, City of Hope, St. Helena Hospital, Ole Health and the Herb Ritts Foundation, and is a member of The J. Paul Getty Photographs Council. From 1999 to 2009, Mr. Fink served as a director of Leapfrog Enterprises, Inc. and was its Chairman from 2004 to 2009. From 2000 to 2008, Mr. Fink was the Chief Executive Officer of Lawrence Investments, LLC. Mr. Fink has also previously served as Chairman and Chief Executive Officer of Anthony Manufacturing, Chairman and Managing Director of KnowledgeUniverse and Chairman and Chief Executive Officer of Nextera Enterprises, Inc. Mr. Fink holds a B.S. in Psychology from the University of California, Los Angeles and a J.D. and an L.L.M. from New York University. Mr. Fink was selected as a director based on his significant experience in operations and financial oversight gained as serving as director or chairman for various public and private companies in addition to his membership on various company audit committees which enables him to contribute significantly to the financial oversight, risk oversight and governance of the Company.Robert E. Knowling, Jr., Age 64Mr. Knowling joined us as a director in January 2018 and is a member of our Compensation Committee. Since May 2009, he has served as Chairman of Eagles Landing Partners, which specializes in helping senior management formulate strategy, lead organizational transformations, and re-engineer businesses. From 2002 to 2005 he served as Chief Executive Officer of the NYC Leadership Academy, an independent non-profit corporation created by Chancellor Joel I. Klein and Mayor Michael R. Bloomberg that is chartered with developing the next generation of principals in the New York City public school system. Mr. Knowling has also held roles as Chief Executive Officer of Telwares, Chairman and Chief Executive Officer of SimDesk Technologies, Inc. and Chairman, President and Chief Executive Officer of Covad Communications. He was awarded the Wall Street Project's Reginald Lewis Trailblazers Award by President Clinton and the Reverend Jesse Jackson in 1999. Mr. Knowling serves on the board of directors for Roper Technologies, Inc., Rite Aid Corporation and Stream Companies. He also previously served on the board of Heidrick & Struggles, Inc. from 2010 to 2015 and Convergys Corporation from 2017 to 2018. He holds a B.A. in theology from Wabash College and an M.B.A. from Kellogg School of Management, Northwestern University. Mr. Knowling was selected as a director based on his experience in public education, public company leadership roles, technology and organizational development.Liza McFadden, Age 56Ms. McFadden joined us as a director in August 2017 and is a member of our Nominating and Corporate Governance Committee. Ms. McFadden currently leads LIZA and Partners LLC. Previously, she was President and Chief Executive Officer of the Barbara Bush Foundation for Family Literacy from 2012 to 2018. She is a former high school teacher, Florida Department of Education administrator, and served in Governor Jeb Bush's administration. Additionally, Ms. McFadden was appointed by President George W. Bush to serve on the National Institute for Literacy Board. She holds an M.A. from Florida State University and a B.A. from Fitchburg State University. Ms. McFadden was selected as a director because of her dedication to the education community and expertise in literacy.Set forth below is biographical information for each of our current executive officers who is not also a director.Kevin P. Chavous, President, Academics, Policy & Schools Group, Age 63Mr. Chavous joined us in January 2017 and currently serves as President, Academics, Policy & Schools Group. He was a member of our Board of Directors from January 2017 to October 2017 before resigning to take his current position. Previously, he was the Founder and Chief Executive Officer of The Chavous Group, an educational consulting firm, a position he held from January 2012 until January 2018 and was a founding Board Member of the American Federation for Children ("AFC"(the “Committee”). He served as AFC's Executive Counsel from 2012 to 2016. Previously, Mr. Chavous was a partner at the SNR Denton law firm from 2002 to 2012 and served as a member of the Council of the District of Columbia from 1993 to 2005, where he was Chair of the Council's Education Committee. He also has served on the board of various charterschools across the country including the Friendship Charter Schools in Washington, D.C. Mr. Chavous holds a B.A. from Wabash College and a J.D. from the Howard University School of Law.Vincent W. Mathis, Executive Vice President, General Counsel and Secretary, Age 55Mr. Mathis joined us in September 2018 and serves as Executive Vice President, General Counsel and Secretary. In this role, he has executive responsibility for providing comprehensive legal counsel for our business, including matters relating to securities, litigation, regulatory compliance, intellectual property, contracts and licensing, and corporate governance. Mr. Mathis has more than 20 years of legal experience counseling diverse global businesses. Prior to joining the Company, Mr. Mathis served as Senior Vice President Corporate Affairs, Corporate Secretary and Chief of Staff to the CEO at The AES Corporation where he earlier was Vice President and Deputy General Counsel. Prior to his roles at The AES Corporation, Mr. Mathis was an Executive Vice President and General Counsel at ContourGlobal, LLC, a private international energy company. Previously, Mr. Mathis worked for Venable, LLP, Shearman and Sterling, LLP and the United States Securities and Exchange Commission. Mr. Mathis formerly served on the Board of Directors of Indianapolis Power and Light Company Enterprises, Inc., AES Tietê Energia S.A., and AES Elpa S.A. In addition, he previously served ondiscusses the Board of Directors at IPALCO Enterprises, Inc., DPL Inc. and The Dayton Power and Light Company and was Chairman of Eletropaulo Metropolitana Eletricidade de São Paulo S.A. Mr. Mathis holds a J.D. from the University of Virginia and a B.A. in Economics and Political Science from The University of Richmond.Shaun E. McAlmont, President, Career Readiness Education, Age 53Dr. McAlmont joined us in August 2018 and serves as President, Career Readiness Education. In this role, he has executive responsibility for managing all aspects of K12's career readiness education programs, including development of the Destinations Career Academies and Programs, and related market expansion. Prior to joining the Company, Dr. McAlmont served as President and CEO of Neumont College of Computer Science, which included Helio Training, LLC, a software development bootcamp. Previously, Dr. McAlmont served as President and CEO of Lincoln Educational Services (NASDAQ: LINC), a national provider of career training programs, where he earlier was President and Chief Operating Officer. Prior to his roles at Lincoln, Dr. McAlmont served as President of the Online Learning Division at Alta Colleges following a role as regional vice president over multiple school campuses. Dr. McAlmont holds an Ed.D. in Higher Education Management, with distinction, from the University of Pennsylvania, an M.A. in Education Administration from the University of San Francisco, and a B.S. from Brigham Young University.James J. Rhyu, Chief Financial Officer and President, Product and Technology, Age 49Mr. Rhyu joined us in June 2013 and serves as Chief Financial Officer and President, Product and Technology. Prior to joining the Company, Mr. Rhyu served as Chief Financial Officer and Chief Administrative Officer of Match.com, a subsidiary of publicly traded IAC/InterActiveCorp, since June 2011. In those roles, he was responsible for overseeing a broad range of functions, including finance, human resources, legal, information technology and operations, certain international operations and product development. Prior to his roles at Match.com, Mr. Rhyu was a Senior Vice President of Finance at Dow Jones & Company from January 2009 until May 2011, where he ran the global financial function. Previously, Mr. Rhyu served for three years as the Corporate Controller of Sirius XM Radio Inc. and its predecessor company, XM Satellite Radio, as well as serving in the same role for Graftech International. Mr. Rhyu also served six years as an auditor with Ernst & Young LLP in the United States and South America. Mr. Rhyu holds a B.S. from the Wharton School of Business at the University of Pennsylvania and an M.B.A. from the London Business School.COMPENSATION DISCUSSION AND ANALYSISThis Compensation Discussion and Analysis provides information aboutcompensation earned by our fiscal 2019 compensation for the following named executive officers ("NEOs"(our “NEOs”):•Nathaniel A. Davis, Chairman and Chief Executive Officer•James J. Rhyu, Chief Financial Officer and President, Product and Technology•Kevin P. Chavous, President, Academics, Policy and Schools•Shaun E. McAlmont, President, Career Readiness Education•Vincent W. Mathis, Executive Vice President, General Counsel and Secretary (1) Effective September 30, 2022, Mr. Davis stepped down from his position as Executive Chair of the Company and as a member of the Board. Upon his retirement, Mr. Davis became entitled to the benefits upon a termination by reason of our election not to renew the term of his employment agreement, as described in the section “Potential Payments Upon Termination or Change in Control—Employment Agreements” below. (2) Effective June 30, 2022, Mr. Medina retired from his position as Chief Financial Officer. He remains employed by the Company in a non-executive capacity as Special Advisor to the Chief Executive Officer. In August 2022, we entered into a transition agreement with Mr. Medina setting forth the terms and conditions of his employment as Special Advisor, as further described under the section “Potential Payments Upon Termination or Change in Control—Medina Transition Agreement” below. continued to deliverAre Today20192022, and despite the results of our 2018 votechallenges, we remain committed to approve named executive officer compensation evidenced our stockholders' overwhelming approval of our executive compensation programs, which are designedtaking steps towards achieving the fiscal 2025 financial targets we outlined in November 2020. The COVID-19 pandemic drove increased awareness, acceptance, and demand for online and hybrid educational solutions. Our business is uniquely positioned to link compensation to performance, stockholder interestshelp the academic community by offering a seamless education experience for students, families and student success.12th12th grade. Although we have undergone a periodWhile the impact of significantthe COVID-19 pandemic has resulted in an unprecedented transformation in recent years, highlighted by a shift in our strategic focus and changes in our executive leadership structure,the academic landscape, we remain committed to fulfilling our educational mission of helping students reach their potential through personalized learning and inspired teaching. DuringIn recent years, we have expanded these offerings to address the nation’s growing skills and labor gap with new programs in Career Learning and acquisitions in the Adult Learning market.2019 we actively pursued2022 with strong financial performance. The Committee believes that performance-based compensation incentivizes our executive officers to promote the strategies necessary to accelerateoverall success of our business growth and promote our educational mission by focusing on: (1) strengthening our business foundation in the managed public school programs; (2) preparing our students for the future by building a comprehensive career readiness program; (3) positioning ourselves as a trusted software services provider delivering end to end digital learning solutions; and (4) developing international opportunities by building partnership-focused relationshipsaligns managements’ interests with in-country organizations.As in prior years, during fiscal 2019 we continued to respond to the feedback received from stockholders and major proxy advisory firms on our executive compensation programs by further developing our long-term performance-oriented approach to executive compensation through the introduction of a multi-year equity incentive plan intended to encourage the creation of stockholder value over a longer three-year performance period. Say on Pay Results and Stockholder Engagement95% of the shares voted at our 2018 annual meeting of stockholders voted to approve our named executive officer compensation for fiscal 2018, reflecting significant improvement over prior years and our stockholders' strong supportthose of our executive pay programs and practices. We recognize the significance of stockholder support ofstockholders. Consistent with this philosophy, we reward our executive compensation programs and continued our stockholder outreach efforts during fiscal 2019. This year we endeavored to remain responsive to stockholder feedback and ensure that the elements of our executive compensation programs effectively reflect our desire to further our strategic business objectives while tightly linking executive pay to measurable performance results.At the beginning of fiscal 2019, we proactively reached out to our top 35 stockholders, speaking with a total of four stockholders that responded and in the aggregate held over 8% of our shares outstanding.Our Investor Relations and Human Resources leaders conducted the outreach efforts. 100% of the stockholders that we spoke with supported our fiscal 2018 advisory vote on named executive officer compensation and several noted key improvements in our compensation practices, most notably our consolidation of the distinct roles of a separate CEO and Executive Chairman, our enhanced disclosure of stockholder outreach efforts and our continued responsiveness to stockholder and proxy advisory firm feedback. While no significant concerns were raised by stockholders during these conversations, an area for consideration involved the use of longer-term performance metrics for our equity incentive programs. In response to this and similar feedback received in prior years regarding the use of one-year performance periods for certain equity awards granted to certain of our named executive officers for fiscal 2019 we introduced a new long-term shareholdergreat performance plan (the "2019 SPP") designedrelative to create stockholder value over a multi-year performance period by encouraging our NEOs to focus on executing our key strategic objectives. Awards under the 2019 SPP are based entirely on a three-year performance periodfinancial and will be earned only if we realize significant stock price appreciation as of the end of the three-year period.By actively pursuing our strategic priorities during fiscal 2019, we realized strong financial results and our core business delivered key operational and academic achievements. Highlightsmetrics that drive stockholder value. Fiscal 2022 highlights include:•Managed Public School Retention and Enrollments. Improving student retention in our virtual schools is a key aspect of our business strategy. Research shows that students who remain in the same school setting longer generally perform better academically. To ensure the best outcomes for students, we partner with the school boards we serve to seek to enroll and retain students who are truly engaged and ready to learn. For fiscal 2019, retention at our managed public schools improved by more than ten basis points over fiscal 2018. In part, as a result of these improvements, total average enrollments in our Managed Public School Programs increased 6.3% over fiscal 2018.•year, as illustrated in theyear. The following table: Metric2018 2021Fiscal 2019 ActualPerformance% Increase overFiscal 2018 Profit—Adjusted Operating Income$49.2M$62.2M26.4% Revenue917.2M$1,015.8M10.7% 1,686.7M For fiscal 2019 our profit metrics were expressed on an "adjusted" basis to eliminate the impact of certain extraordinary and variable elements that are beyond the control of our executives. "Fiscal 2019“Fiscal 2022 Executive Compensation Decisions"Program in Detail” beginning on page 2758 for a discussion of how theseAdjusted EBITDA, a non-GAAP financial measure, is calculated. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measures are calculated.is provided in Appendix A.•Continued Expanding Our Career Readiness EducationLearning Offering. We continued to expandbuild upon our Career ReadinessLearning offering, highlightsincluding delivering our middle and high school offering to more than approximately 42 thousand students and continuing to grow our adult learning offerings which achieved $91.5 million in revenue, up 64% from fiscal 2021. The Career Learning offering expansions resulted in Career Learning revenue growth of which included increasing386% from fiscal 2020 to fiscal 2022.numberCommittee evaluated our short-term and long-term incentive compensation plans and decided to adjust the performance-based metrics of Destinations Career Academies ("DCAs") from 13 in school year 2018-2019these plans for fiscal 2022, as well as the approach to 20 in school year 2019-2020 and launching our National Job Shadow Week offering hands-on learning experiences for the DCA students.setting these metrics.While the structural changes made to our executive compensation programs and practices in recent years were continued into fiscal 2019, the Compensation Committee (the "Committee") worked to ensure that fiscal 2019 compensation decisions reflect positive pay for performance practices in each of the key elementsFor purposes of our executive compensation programs. Highlights include:•No Significant Base Salary Increases. Other than modest increases in the base salaries of Mr. Rhyu and Mr. Chavous of not more than 3%, none of our NEOs received an increase in base salary for fiscal 2019.•Continued to Simplify our Executive Bonus Plan. Beginning in fiscal 2018, the Committee focused on restructuring our Executive Bonus Plan by reducing the number of corporate performance management objectives ("PMOs") for our most senior executives. The Committee built upon this approach for fiscal 2019 by further reducing the number of corporate PMOs from five to three so that our annual bonusshort-term incentive plan, is more closely tied to driving stockholder value through the achievement of key metrics related to profitability, growth and business initiatives. Again in fiscal 2019, the Executive Bonus Plan, our executive officers’ performance for Mr. Davis, Mr. Rhyu and Mr. Chavousfiscal 2022 was 100% tied to the achievement of pre-established objective measures and not to individual performance criteria.•Introduced Long-Term Shareholder Performance Plan. Our executives previously participated in a long-term incentive plan that was introduced in fiscal 2016 and concluded in early fiscal 2019. Following the conclusion of this 2016 plan, the Committee adopted the 2019 SPP with the intent that awards under the 2019 SPP are not granted on an annual basis. Accordingly, the size of awards granted under the 2019 SPP takes into account that additional similar performance share units ("PSUs") with overlapping performance periods and measured based on the attainment of two metrics: revenue and Adjusted EBITDA (with each metric equally weighted). Bonus payments to our executive officers were to be paid at 50% of an individual’s target bonus if threshold performance was achieved, target bonus was to be earned if target performance was achieved, and there was the ability to earn up to 200% of target bonus if the maximum outperform performance level was achieved. Results between performance levels were to be interpolated linearly.will not be granted in fiscal 2020 and fiscal 2021.The 2019 SPP is a departure from the Company's historical practice of tying performance-based equity awards to achieving pre-established financial goals that may not directly correlate to stock price appreciation. Instead, the 2019 SPP was designed to focus on the creation of stockholder value over a three-year performance period and enable our NEOs to participate in a percentage of that growth. Awards under the 2019 SPP are earnedrate (“CAGR”) as measured at the end of a three-year performance period, based solely on stock price increases over the three-year periodwith each metric weighted equally. As with our Executive Bonus Plan, threshold, target, and determined as a percentageoutperform performance levels were established with award earning potential for our executive officers at 50%, 100%, and 200% of the total stockholder value creation thattarget award payouts, respectively.delivered. Ifset at or above the prior year actual results and target performance has been set at the established budget for the fiscal year. For fiscal 2022, the Committee deviated from historical practices with respect to the Executive Bonus Plan and established threshold performance at the approved budget for the fiscal year given the extraordinary performance of fiscal 2021 and difficulty in predicting and potential impact of COVID-19 pandemic on fiscal 2022.minimum percentagemajority of stock price growth of 25% (measured on an absolute basis)our NEOs’ target total direct compensation is not attained during the performance period, the awards will be forfeited.•No Supplemental Equity Grants. We made no off-cycle or supplemental equity awards to our NEOs for fiscal 2019. Equity awardsvariable and performance-based (60% for our NEOs were limited to regular time-vesting awards, which comprise a portionCEO, 33% for our Executive Chair, and an average of each NEO's annual equity award, and awards under52% for our 2019 SPP. The potential award opportunities under our 2019 SPP take into account that additional similar awards with overlapping performance periods and measured based on stock price growth are not expected to be granted in fiscal 2020 and fiscal 2021.
Table of ContentsTABLE OF CONTENTS Executive Compensation Principles, Policies andPrinciples. Our executive compensation programs are guided by basic principles that we seek to incorporate in our executive pay practices:1.Link Compensation to Performance, Stockholder Interests and Student Success. Compensation levels should reflect actual performance, consistent with our business strategy and be aligned with stockholder interests and the success of the students in the schools we serve.2.Maintain Competitive Compensation Levels. Levels of compensation should be competitive with those offered by comparable companies in our industry to attract, retain and reward our executives. We set base pay levels near the median of our compensation peer group and provide above-peer median compensation opportunities to executives only if performance is attained at levels above rigorously set target-level goals.3.Reflect our Industry Circumstances and Unique Business. As the only publicly traded company in the K-12 space, our compensation programs must be tailored to address the interests of stockholders and our public education obligations as we execute on our long-term strategy of creating schools of academic excellence with innovative technologies, inspired teaching and personalized learning.4.Engage Independent Compensation Consultant. We engage an independent compensation consultant to inform the Committee and evaluate the alignment of pay, performance relative to our compensation peer group, and compensation risk.Policies and Practices.executives'executive officers’ compensation with stockholder interests. Listed below are those compensation policies and practices we employ and certain policies and practices we do not employ because we believe they would not serve the long-term interests of our stockholders.What We Do NEOs' potentialNEOs for fiscal 2021. While our Board was satisfied with this result, particularly in light of the fact that our 2020 Say-on-Pay proposal was supported by only 22% of the votes cast, it noted that this result was still significantly lower than the results of our 2019 and 2018 Say-on-Pay proposals, which were each supported by approximately 95% of votes cast, and that we should do better.is not guaranteed but is linkedprogram. As a result of the level of support for our 2021 Say-on-Pay proposal, our Board directed management and the Committee to continue to actively seek additional feedback from our stockholders on what motivated their votes so that the Committee could determine whether it was appropriate to take further action to mitigate any ongoing concerns.financialexecutive compensation program for fiscal 2021 and operational performance. For fiscal 2019, only 8%2022. Ultimately, these members of pay for our Chairmanmanagement and CEO was fixed in the form of base salary.Align Compensation to Share Price. A significant portionMr. Knowling met with stockholders representing more than 39% of our performance-basedoutstanding Common Stock. In our outreach to stockholders, we have committed to maintaining an open and ongoing dialogue multiple times per year.is tiedsuch as moving to growth in our stock price which directly alignsa multi-year performance period for 60% of annual equity awards to stockholder interests. Awards underexecutive officers, eliminating any cumulative measurements that allow for the 2019 SPP will be earned only if we realize significant stock price appreciation as ofability to earn missed payouts at the end of the performance period, and avoiding use of one-time, “special” equity awards, Stockholders appreciated our outreach and encouraged a three-year performance period.Establish Performance Goals Alignedcontinued dialogue on a regular basis as well as robust disclosure.Strategy. Our Executive Bonus Plan and 2019 SPP utilize objective performance-based goals that the Committee believes are rigorous and challenging.Target Pay Competitively. We seekforegoing feedback related to targetfiscal 2022 executive compensation, within a competitive rangeour stockholders expressed appreciation of our compensation peer group and seekcommitment to deliver greater compensation only when warranted by market conditions or superior performance.Use Meaningful Vesting Conditions to Promote Retention. Awards under the 2019 SPP are earned and vest after three years, and only to the extent that we experience significant stock price appreciation over such period. Time-based restricted stock awards ("RSAs") vest over three years.Carefully Consider Stockholder Input. We regularly seek and engage in dialogues withCorporate Sustainability, including our stockholders on executive compensation matters. Recent enhancements in our executive compensation programs have been influenced by these discussions.Maintain a Clawback Policy. We can recover incentive compensation wrongly awarded to an executive officer where fraud or intentional misconduct led to a restatementpublication of our financial statements.Require Mandatory Share Ownership. All ofESG Report in fiscal 2021, as well as our executive officers, including our NEOs, and our non-employee directors are requiredongoing commitment to maintain a minimum ownership level of our Common Stock.stockholder outreach.Perform Competitive Market Analysis. The Committee reviews competitive market data provided by its independent compensation consultant for our executive officers prior to making annual executive compensation decisions.Analyze Executive Compensation Risk. We reviewexecutive compensation programs annually to ensure that they do not encourage excessive or unnecessary risk taking.What We Do Not DoGrant Multi-Year or Guaranteed Bonuses or Equity Awards. We do not pay guaranteed bonuses and have no guaranteed equity-based awards. This ensures that we are able to base all compensation awards on measurable performance factors, operational results and competitive market needs.Provide Generous Executive Perquisites. We do not provide significant perquisites to our executive officers, such as club memberships, personal income tax advisory services and similar items.Offer Tax Gross-Ups. We do not provide income tax gross-ups for personal or broad-based benefits nor excise tax gross-ups for change in control payments or benefits.Offer Pension or Supplemental Retirement Plans. We do not provide costly retirement benefits to our executive officers that reward longevity rather than contributions to Company performance.Reprice Options. Our 2016 Incentive Award Plan ("2016 Plan") specifically prohibits repricing of options without stockholder approval.Increase Shares without Stockholder Approval. Our 2016 Plan does not contain an "evergreen" provision to increase the number of shares available for grants each year. Any increase to the maximum number of shares available will require stockholder approval.Provide Non-Performance Based Single Trigger Change in Control Payments. We maintain a "double trigger" vesting policyfollowing actions with respect to our equity awards whereby accelerated vestingexecutive compensation program in connection with a change in controlfiscal 2022 and 2023:
There were no one-time “special” awards granted to executive officers in fiscal 2022 Company generally requires a qualifying termination of employment. Awards under the 2019 SPP will be earned and vest in connection with a change in control only to the extent our stock price has increased as of the transaction. Legacy "single-trigger" vesting stock option awards from prior yearsforegoing changes that have been completely eliminated frommade to our executive compensation program.Allow Hedging or Pledging. Ultimately, we want to ensure that the various elements of our program effectively reflect our desire to further our strategic business objectives while tightly linking executive pay to measurable performance results and creation of stockholder valueinsider trading policy specifically prohibits short sales, hedging and margin transactions andProgram2016 Plan prohibits pledging of any award granted under the plan unless otherwise determined by the plan administrator.executive pay practices:
Table of ContentsTABLE OF CONTENTS Tying Executive to CompanyVersus Performanceprograms areprogram is designed to link pay and performance in the following ways: CompensationElement Represents a lower percentage of target total direct compensation than at most peer companies, with average base salaries benchmarking near the 50th percentile when compared to the peer group in June 2018. executives.our executive officers. Executive Bonus Plan
Ties a meaningful portion of target annual cash compensation to attaining pre-established objectiveperformance goals. executivesour executive officers on attaining financial and strategic performance objectives from year to year. Long-Term IncentivesTime-based RSAs: Encourages retention of executives and results in less dilution to our stockholders as compared to stock option grants. RSAs are subject to vesting over three years.2019 SPP PSUs: Incentivizes creation of stockholder value over a three-year performance period. PSUs are earned and vest based on stock price growth over the performance period. No PSUs will be earned if total stock price growth is below threshold levels.executivesexecutive officers who drive consistent performance.executivesour executive officers for executing strategic changes to our businessachievement of long-term goals that deliver concrete increases toincrease stockholder value. Other CompensationExecutivesExecutives supplementalexecutive disability and life insurance benefits for executives are paid by the Company but no costly supplemental retirement programs are offered.Provides benefits having high perceived values and offers tax advantages. Company. 
ComparativeCompetitive Market DataPracticesthe Committee considered a number of factors, including revenue, market capitalization, industry and status as an existing peer. Compensia also considered companies that list us as a peer as well as our peers as identified by the major proxy advisory firms. The Committee seeks to maintain as much consistency as possible in the peer group year over year and carefully considers changes. The companies in thefor fiscal 2019 compensation peer group were:• ACI Worldwide, Inc.• Adtalem Global Education, Inc. (formerly DeVry Education Group)• American Public Education, Inc.• Blackbaud, Inc.• Bridgepoint Education, Inc.• Capella Education Co.• Career Education Corp.• Chegg Inc.• Graham Holdings Co.• Grand Canyon Education, Inc.• Houghton Mifflin Harcourt Co.• Huron Consulting Group• Scholastic Corporation• Strayer Education, Inc.• Weight Watchers International, Inc.• Zynga, Inc.• 2U, Inc.This peer group reflects an adjustment made in late fiscal 2018 to remove The Advisory Board Company because it was acquired. In seeking a replacement,2022, the Committee considered the previously mentionedfollowing primary factors which are intended to identify a reasonable group of peers from a number of related industry sectors for consideration in our unique situation, where there are, at present, no other publicly-traded providers of online and blended schools in the kindergarten through 12th grade market:Huron Consulting Group. 2019,2022, Compensia used this peer group to prepare an analysis for the Committee that compared the compensation levels of our executive officers to comparable executive positions.In general,positions at the companies in the peer group. The Committee seeksused data drawn from theestablishevaluate the range of targetcompetitive market when reviewing and adjusting the total direct compensation packages for our executive officers near the medianCEO, Executive Chair, and our other NEOs, including annual base salary, target annual bonus opportunities, and long-term incentive compensation opportunities, for similar positions infiscal 2022.with a greater emphasis on variable cash compensation versus fixed cash compensation.Chairmanregularly and CEO Pay MixCompensia assistedmakes adjustments to its composition annually, taking into account changes in both our business and the Committee in designing competitive pay packages that focus heavily on variable pay components, with the intent that the target total direct compensation for our Chairman and CEOshould be overwhelmingly performance-based. A graphic illustrationbusinesses of the basic annual target total pay mix of our Chairman and CEO, which is set forthcompanies in his employment agreement, is depicted below:
SalariesBaseSalaryby the Committee, and for executive officers other than the CEO, in conjunction with recommendations made by theour CEO, to ensure that our executive compensation structure remains aligned with our compensation objectives.Other than modest Compensation adjustments for our Executive Chair and CEO are recommended by the Committee and reviewed and approved by the independent members of our Board.increasesadjustments for fiscal 2022 in August 2021, the Committee reviewed a competitive market assessment of executive compensation levels prepared by Compensia, which showed that the base salary level of our CEO approximated the 25th percentile of our compensation peer group, and the base salary level of our other NEOs, on average, approximated the 50th percentile of our compensation peer group. The Committee also reviewed tally sheets which detailed the historical pay for each NEO. The independent members of our Board determined to leave our Executive Chair’s fiscal 2022 base salary at its fiscal 2021 level but to increase the base salary of our CEO to bring it further into line with the 50th percentile of our compensation peer group. Mr. RhyuMathis also received an increase in base salary to ensure internal equity alignment and to recognize his additional efforts during the year to facilitate a smooth CEO transition. Mr. ChavousOttolenghi’s fiscal 2022 base salary was set at the time of 3% and 1.5% respectively, nonehis commencement of employment based on the foregoing competitive market assessment.received a base salary increase for fiscal 2019. The fiscal 2019 base salaries for our NEOs are2022 as set forth in the table below:Name Base Salary for
Fiscal 2019 $ 735,000 $ 515,000 $ 497,350 $ 415,000 (1) $ 405,000 (2)
follows:(1)Dr. McAlmont was hiredAugust 2021 were as our Executive Vice President, President of Career Readiness Education effective August 29, 2018. (2)Mr. Mathis was hired as our Executive Vice President, General Counsel effective September 4, 2018.Determination of Annual Incentive CompensationNEOs'NEOs’ target total cash compensation is "at risk" based upon Company and, for certain NEOs, individual performance. As part of our continued effort to align our pay for performance practices with our redefined business strategy,“at risk.” For the Committee has focused in recent years on restructuring the Executive Bonus Plan. This has included updating and reducing the corporate PMOs, removing performance metrics that overlap with our performance-based equity incentive awards, eliminating individual performance criteria for our most senior NEOs and decreasing the weighting of individual PMOs for our other NEOs. The Committee continued this process for fiscal 2019 by further reducing the number of corporate PMOs for all of our NEOs from five in fiscal 2018 to three for fiscal 2019 so that the2022 Executive Bonus Plan, is more closely tiedthe Committee used two corporate performance management objectives (“PMOs”) – revenue and Adjusted EBITDA – as these key metrics are related to drivingprofitability and growth, which ultimately enhances stockholder value through the achievement of key financial metrics and operational goals.value.levelsopportunities for our NEOs are reviewed by the Committee annually and set at levels that, when combined with base salary levels, are intended to provide target total cash compensation opportunities that approximate the market median. For Mr. Davis, theour Executive Chair, his target annual bonus levelopportunity is set pursuant to his employment agreement. NoneFollowing its review of a competitive market assessment of executive compensation levels prepared by Compensia, the Committee (and the Board, in the case of our CEO) determined to leave the target annual bonus opportunities of our CEO and our other NEOs received an increase inat their fiscal 2021 levels.levels under our Executive Bonus Plan for fiscal 2019. Target bonus levelsopportunities for our NEOs for fiscal 20192022 as set in August 2021 were as follows: NameTarget Bonus Level(% of Base Salary) Nathaniel A. Davis 150% JamesRhyu80% Medina Kevin P. Chavous80% Shaun E. McAlmont65% Vincent W. Mathis65% metricscorporate PMOs to be included in our Executive Bonus Plan each fiscal year. For fiscal 2019, in order to tie annual bonuses more closely to top line financial results,Over the past several years, the Committee increasedhas restructured the weighting attributable to the revenue metric and eliminated the performance metrics tied to CTE and MPS enrollments. Executive Bonus Plan by updating and reducing the number of corporate PMOs to focus our NEOs on the achievement of key financial metrics and operational goals. For fiscal 2022, the Committee used revenue and Adjusted EBITDA, each equally weighted, as the corporate PMOs for the fiscal 2019 generally fell into the three categories set forth in the table below. Category ProfitabilityOperating IncomeEBITDA Growth Key Business InitiativesRetention Specifically,After careful consideration, the Committee set thresholddetermined that Adjusted EBITDA would be removed as a performance for themetric under our Long-term Incentive program and Adjusted EBITDA would replace Adjusted Operating Income and Revenue metrics aboveas the actual results for fiscal 2018 and target performance for all metrics at levels at or above fiscal 2019 budgeted performance. The threshold and target levels for the Retentionprofitability metric required further improvement in student retention as compared to fiscal 2018, which saw robust student retention improvement. The threshold and target levels were set below the level of retention improvement weexperienced in fiscal 2018 in light of the strong recovery in student retention during fiscal 2018 from the retention drop we experienced in the prior year.Metrics under the Executive Bonus Plan for Mr. Davis, Mr. Rhyufiscal 2022 as it provides a measure of corporate performance exclusive of capital structure and Mr. Chavousthe method by which assets were acquired. The Committee set the target performance levels for the revenue and Adjusted EBITDA metrics at $1,561.8 million and $259.7 million, respectively. For fiscal 2022, the Committee deviated from historical practices with respect to the Executive Bonus Plan and established threshold performance at the approved budget for the fiscal year given the extraordinary performance of fiscal 2021 and difficulty in predicting the potential impact of COVID-19 pandemic on fiscal 2022. The threshold performance level for the revenue metric were set above our actual results for fiscal 2021. The threshold performance level for the Adjusted EBITDA metric was set just below fiscal 2021 actual.theirthe efforts of our NEOs on improving Company performance and increasing stockholder value. However, for Dr. McAlmont and Mr. Mathis, thealso included individual PMOs intended to motivate these executives to produce measurable legal, compliance and business results, mindful of their functional roles within our organization and, particularly with respect to Dr. McAlmont, to ensure that a portion of his target total direct compensation is tied directly to growth of our Career Readiness business. For these NEOs, awards under the Executive Bonus Plan for fiscal 2019 were based 70% on the achievement of the corporate PMOs and 30% on the achievement of individual PMOs.
for fiscal 2019 are set forth in the table below. The PMOs provideEach PMO provided our NEOs with the opportunity to earn an above target awardsaward for that PMO in the event they exceed the pre-established performance levels,level for the PMO, but also provideprovided for no awards below minimum thresholds of performance. Achievement of a PMO at the threshold level resultsresulted in a payout at 33%50% of the target level, and achievement at the outperform level resultsresulted in a payout at 200% of the target level. Performance between the two levels iswas extrapolated on a straight-line basis. In August 2019,2022, the Committee reviewed our achievement against these corporate PMOs, andwith the results are included in the following table. (1) For purposes of the fiscal 2022 Executive Bonus Plan, “revenue” may be adjusted at the Committee’s discretion for any unusual, non-recurring event that is separately identified and quantified in our financial statements. (2) For purposes of the fiscal 2022 Executive Bonus Plan, “Adjusted EBITDA” means earnings before interest, taxes, depreciation and amortization, less stock-based compensation, and subject to adjustment in the Committee’s discretion for any acquisition-related charges and/or any unusual, non-recurring gain or loss that is separately identified and quantified in our financial statements. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in Appendix A. Weighting Metric Davis Rhyu
Chavous McAlmont
Mathis Performance Levels Actual Results Adjusted Threshold $51.8M Operating 40% 28% Target $57.5M $62.2M Income (1) Outperform $63.3M Threshold $950M Revenue 40% 28% Target $1,000M $1,015.8M Outperform $1,050M Threshold 150 bps Retention (2) 20% 14% Target 200 bps Improvement 10 bps Outperform 250 bps (1)Operating income is adjusted for stock-based compensation expense and may exclude any acquisition related charges (which would include amortization subsequent to an acquisition transaction) and any other unusual, non-recurring gain or loss that is separately identified and quantified in our financial statements.(2)Measures the overall improvement in retention rate of students that are active in our Managed Public School Programs on or after June 1st and the percent of these students that remain active at the end of the school year, or on May 31st, subject to certain exclusions for students ineligible to return (e.g., graduating students) or commence enrollment until the following school year.Individual PMOsTABLE OF CONTENTSFor Dr. McAlmont and Mr. Mathis, individual PMOs accounted for 30% of the NEO's target annual bonus opportunity under thefor fiscal 2019, although the Committee retains discretion toallow for individual adjustments based on factors and considerations it deems relevant. A general description of the individual PMOs for fiscal 2019 and the NEOs' achievements are provided below. NEOIndividual GoalsPerformance ResultsShaun E. McAlmontDevelop and grow the Career Readiness business, including through the introduction of new models, acquisition targets and opening of new DCAsDr. McAlmont launched ten new standalone DCAs and added three new career readiness programs to existing managed schools resulting in significant growth of our Career Readiness presence for school year 2019 - 2020 and beyond; introduced the National Job Shadow Week to highlight career pathways and partnerships; and entered strategic partnership with TALLO (formerly known as Stem Premier).124% Vincent W. MathisAchieve favorable outcomes in pending litigation;Oversee Board training programs;Ensure all public company filing requirements are satisfied;Support corporate development activitiesMr. Mathis achieved his established goals with respect to obtaining favorable outcomes in litigation; effectively oversaw the Board training programs; ensured all public company filing requirements were satisfied; and facilitated all corporate development activities. 120.1% Fiscal 2019 Executive Bonus Plan PaymentsCommittee'sCommittee’s approved annual bonus award under our fiscal 2022 Executive Bonus Plan for fiscal 2019 based upon performance against the corporate PMOs and, for Dr. McAlmont and Mr. Mathis, performance against the executive's individual PMOs. Corporate PMOs NEO Adjusted
Operating
Income Revenue Retention Individual PMOs % of Target
Bonus Earned Amount of
Bonus 73% 52.6% 0% — 125.6% $1,385,277 73% 52.6% 0% — 125.6% $517,673 73% 52.6% 0% — 125.6% $499,931 51.1% 36.8% 0% 36% 124.0% $334,366 51.1% 36.8% 0% 32.1% 120.1% $316,042 Determination(1) Our revenue and Adjusted EBITDA payment percentages were 180% and 126%, respectively. Based on their respective weighting of 50%, the revenue performance metric resulted in a 90% achievement percentage and the Adjusted EBITDA performance metric resulted in a 63% achievement percentage, resulting in each NEO earning 153% of their target annual bonus opportunity. stockholders while buildingstockholders. We have historically used a one-year financial performance metric in our executive equity award program and we believe this has played an important role in the valuemotivation and retention of our Company. During fiscal 2019,executives. Based on consistent feedback from our stockholders, we granted time-based RSAs and PSUs to allreevaluated our design of our NEOs.Time-Based Restricted Stocklong-term incentive compensation program. Beginning in fiscal 2022, we moved to the use of three-year performance metrics for our long-term incentives tied to gross margin percentage and our stock price CAGR which are intended to enhance our operational effectiveness and drive greater alignment with the creation of sustainable stockholder value. Additionally, the Committee determined to weight the long-term incentive compensation awards for our NEOs to be 60% performance based, an increase from fiscal 2021 where 50% of their long-term incentive compensation awards were performance based.Mr. Davis. Pursuant to Mr. Davis' employment agreement, as amended in connection with his appointment asCEO in March 2018, beginning with fiscal 2019 Mr. Davis is entitled to a target award level under our2022 annual equity incentive award plansawards for our NEOs, 40% of their awards were time-based restricted stock awards and 60% were performance stock unit awards (except in the rangecase of $2,700,000 to $3,300,000, which awards may be subject to such vesting criteria determined by the Board of Directors and Mr. Davis,our Executive Chair, who only received a time-based restricted stock award).performance-based vesting criteria. While the Board of Directors has historically granted 100% of Mr. Davis' long-term incentives in the form of performance-based equity awards, in light of recent tax law changes (which no longer provide tax benefits for granting performance-based awards) and to more closely match customary practices among companies incompetitive market data drawn from our compensation peer group, and among public companies in general,our executive retention objectives, a greater emphasis on performance-based awards for fiscal 2019,2022, and our strong performance in fiscal 2021. Additionally, for Messrs. Medina and Ottolenghi, the BoardCommittee considered the size and potential impact of Directors determinedtheir initial equity awards upon joining the Company in determining the award levels to grant a portionbe granted to them in fiscal 2022. In particular, the Committee took into consideration the fact that the equity award granted to Mr. Medina in fiscal 2021 was lower than would typically have been granted in recognition of his initial equity award granted in fiscal 2020. Similarly, the value of Mr. Davis' annual long-term incentiveOttolenghi’s fiscal 2022 equity award was lower than typically be considered in a normal year due to the formsize of a time-based RSA with a value of $2 million.his initial equity award granted in fiscal 2021. The following table sets forth the target award values for our NEOs for fiscal 2022 and the resultinggrantedsubject to each type of award, which was determined based upon the fair market value of our Common Stock on the date of grant, which resulted in an awardgrant. The awards granted to our Executive Chair and our CEO were recommended by the Committee and reviewed and approved by the independent members of 115,674 restricted shares.remainder of Mr. Davis' long-term incentive award wasannual equity awards for our NEOs for fiscal 2022 as granted in August 2021 were as follows: form of PSUs under the 2019 SPP as described in more detail below under "Determination of Long-Term Incentive Compensation—2019 Long-Term Shareholder Performance Plan."Mr. Rhyu and Mr. Chavous. For fiscal 2019, Mr. Rhyu and Mr. Chavous were granted time-based RSAs having a value of $1,000,000 for Mr. Rhyu and $700,000 for Mr. Chavous. The number of shares granted was determined based upon the fair market valueexception of our Common Stock on the date of grant, which resulted in an award of 60,386 restricted shares to Mr. Rhyu and 42,271 restricted shares to Mr. Chavous.Dr. McAlmont and Mr. Mathis. In connection with commencing employment in early fiscal 2019, Dr. McAlmont was granted a time-based RSA for 45,000 shares and Mr. Mathis was granted a time-based RSA for 35,000 shares.All ofExecutive Chair, the time-based RSAsrestricted stock awards granted to our NEOs duringfor fiscal 20192022 vest based on our standard vesting schedule which is semi-annually over a three yearthree-year period, with 20% of the shares of our Common Stock subject to the awardawards vesting in the first year and 40% vesting in each of the next two years following the grant date.2019 Long-Term Shareholder The time-based restricted stock award granted to our Executive Chair for fiscal 2022 vested in full on June 30, 2022.Plan (SPP)In early fiscal 2019,Stock Unit (“PSU”) Awards. The PSU awards are to be earned based on the attainment of gross margin percentage and our stock price performance associated with established levels of compound annual growth rate (“CAGR”) as measured at the end of a three-year performance period, with each metric weighted equally. Gross margin percentage and stock price CAGR were selected as the performance metrics for the PSU awards as the Committee adoptedbelieves they best reflect a mean for monitoring the management team’s execution of our long-term strategy aimed at delivering greater value to stockholders, and ensuring a strong alignment between management and stockholders.Boardgross margin percentage metric, 50% of Directors approved the 2019 SPP—our new long-term shareholdershares will be earned if the threshold performance plan under which a meaningfullevel (gross margin percentage equal to 37%) is achieved, the target (100%) of the shares will be earned if the target performance level (gross margin percentage equal to 38%) is achieved, and 200% of the shares will be earned if the outperform performance level (gross margin percentage equal to 40%) is achieved. If performance for the gross margin percentage metric is below the threshold performance level, no portion of the total long-term incentive award opportunities are providedPSUs subject to the gross margin percentage metric will be earned.NEOs infinancial statements. Financial achievement falling between the formspecified levels will be interpolated linearly between performance levels for the gross margin percentage metricPSUs designed to provide these executives with a percentage of stockholder value growth.The 2019 SPP was adopted following the conclusion of our prior long-term incentive plan as a means of continuing our practice of providing multi-year performance-based equity incentive awards. SincePSU awards under the 2019 SPP will not be granted on an annual basis, award amounts granted during fiscal 2019 take into account that no similar PSUs with overlapping performance periods and measuredis earned based on stock priceachievement of compound annual growth are expectedrate targets, with the starting point equal to be provided to our NEOs.Awards under the 2019 SPP were originally granted to Mr. Davis, Mr. Rhyu and Mr. Chavous in September 2018 and in January 2019 the Committee determined to expand participation in the 2019 SPP to Dr. McAlmont and Mr. Mathis to ensure that the long-term incentive compensation opportunities for our NEOs were aligned to driving long-term stockholder value. PSUs granted under the 2019 SPP will be earned and vest only based on our market capitalization growth over a completed three-year performance period ending in 2021. The PSUs will be earned and vest based on the Company's average closing stock price over the 3020 calendar day period that begins ondays preceding the eighth day after thegrant date the Company releases its earnings results for fiscal 2021.The total number of shares that would be earned at each applicable stock price hurdle was determined in order to correspond to a specified percentage of market capitalization growth delivered by the stock price increases, thereby directly aligning long-term incentive awards for the NEOs with long-term stock value growth for our stockholders. This percentage amount, along with the number of shares that would be earned by each of the NEOs underaward, with performance to be determined as follows: 50% of the 2019 SPP at different stock price hurdles and growth outcomes is illustrated in the following chart: 3-Year
CAGR Absolute Stock
Price Growth Stock Price
Hurdle Share of
Market
Cap
Growth # of Shares Earned Davis Rhyu Chavous McAlmont Mathis 7.6% 25% $21.18 1.0% 54,649 12,882 10,539 — — 10% 33% $22.63 6.0% 413,331 93,885 83,257 — — 15% 52% $25.86 6.5% 528,571 179,714 172,666 — — 20% 73% $29.38 6.5% 596,022 243,827 243,827 — — 25% 95% $33.21 7.5% 724,185 362,093 362,093 118,265 88,699 30% 120% $37.35 7.5% 727,673 382,433 382,433 138,606 103,954 40% 174% $46.65 7.5% 848,857 425,372 425,372 181,545 136,158 50% 238% $57.38 7.5% 939,858 425,372 (1) 425,372 (1) 181,545 136,158 (1)Amounts shown for Mr. Rhyu and Mr. Chavous reflect an incremental increase in the maximum award amount approved in January 2019 to ensure share payout levels are not reduced at greater performance levels.No amountsshares will be earned if total stock price growth over the three-year periodthreshold performance level (10% CAGR) is below certain threshold levels, which levels are below 25% (7.6% annualized) for Mr. Davis, Mr. Rhyu and Mr. Chavous and below 95% (25% annualized) for Dr. McAlmont and Mr. Mathis. A maximumachieved, the target (100%) of 7.5% of total value growththe shares will be earned if totalthe target performance level (20% CAGR) is achieved, and 200% of the shares will be earned if the outperform performancegrowth equals or exceeds 95%. The numberCAGR metric is below the threshold performance level, no portion of the PSUs subject to the stock price CAGR metric will be earned. Any earned shares will be immediately vested upon the attainment of the performance metric at the end of the three-year performance period. Performance against the stock price portion of the PSU award will be assessed as of September 15, 2024 (or the next following date if September 15, 2024 is a non-trading day) and will be based on the average closing stock price over the preceding 20 calendar days. Achievement falling between the specified levels will be interpolated on a straight line basis iflinearly between performance levels for the stock price fallsCAGR metric, measured at 2.5% intervals between twoperformance levels. levelsgrant date as set forth in the table above. In the event the free cash flow goal for a given performance year is not attained, the shares of a change in control duringour Common Stock eligible to be earned for such year will remain eligible to vest on August 15, 2022 if cumulative free cash flow for fiscal years 2020, 2021, and 2022 equals or exceeds $195 million.PSUs will becumulative metric for the award of $195.0 million. Accordingly, the remaining two-thirds of the shares of Common Stock subject to the award (which included the 119,431 shares from the initial one-third of the shares subject to the award and the 119,431 shares from the final one-third of the shares subject to the award), or 238,863 shares, were earned at the conclusion of fiscal 2022.stock price paid or impliedability to earn missed payouts in the transaction and the earned PSUs will vest immediately.below in the "Fiscal 2019our “Fiscal 2022 Non-Qualified Deferred Compensation" table.Compensation Table” below.We currently provideEffective January 1, 2022, our matching contributions are equal to $0.25$0.50 for each dollar of a participant'sparticipant’s contributions on the first 5% of eligible salary that they contribute each pay period, subject to certain statutory limits. Prior to that date, our matching contributions were equal to $0.50 for each dollar of a participant’s contributions on the first 4% of eligible salary that they contribute each pay period, subject to certain statutory limits.programsprogram but recognize to be an important factor in attracting and retaining talented executives. Our NEOs participate in the same medical, dental, vision, disability and life insurance plans as our employees generally. We also pay for supplemental long-term disability and life insurance premiums for our executive officers and provide them with the opportunity to receive annual Company-paid executive physical examinations and reimburse certain executivesexecutive officers for their relocation expenses from time to time and for temporary housing expenses they may incur in connection with their provision of services. We provide these supplemental benefits to our executive officers due to the relatively low cost of such benefits and the value they provide in assisting us in attracting and retaining talented executives. None of our executive officers receive tax gross-ups or other tax payments in connection with our provision of any perquisites or personal benefits.In order to incentivize Dr. McAlmont and Mr. Mathis to join the company in early fiscal 2019, each of these executives received a one-time sign-on bonus in the amount of $85,000 for Dr. McAlmont and $50,000 for Mr. Mathis. In addition, Dr. McAlmont and Mr. Mathis were provided reimbursement of relocation expenses in the amounts set forth in the "Summary Compensation Table for Fiscal 2019" below.20192022 is set forth below in our "Summary“Fiscal 2022 Summary Compensation Table for Fiscal 2019."Compensation CommitteeThe Committee is responsible for overseeing our executivethe overall compensation programs, as specified in its charter. The Committee's role includes:•Determining and approving the compensation of our Chairman, CEO and other executive officers, including the other NEOs;•Establishing and approving compensation planspackage for our executive officers based on the recommendations of the Chairmanofficers. We provide severance to attract and CEO,retain individuals with superior ability and the Committee's compensation consultant; and•Proposing revisions to the Committee's charter for our Board of Directors' approval to ensure compliance with new SEC regulations and NYSE listing standards as enacted.In performing its responsibilities with respect to the compensation ofmanagerial talent, provide our executive officers the Committee uses information fromwith appropriate protections due to their vulnerability to terminations of employment due to a number of sources. The information utilized by the Committee includes advice from its compensation consultant, market data regarding the compensation practices of competitors, advice from outside legal counsel specializingchange in executive compensation, tally sheetsshowing prior compensation awards, the recommendations of our Chairmancontrol, merger or acquisition and CEO and an assessment of the outstanding equity holdings of our executive officers.Role of ManagementOur management, under the leadership of our Chairman and CEO, plays an important role in establishing and maintaining our executive compensation programs. Management's role includes recommending plans and programs to the Committee, implementing the Committee's decisions and assisting and administering plans in support of the Committee. Our Chairman and CEO provides information on the individual performance of our other executive officers and makes annual recommendations to the Committee on compensation levels forencourage our executive officers includingto focus their attention on their work duties and responsibilities in all situations.(other than his own compensation). Our Chairmanare generally entitled to receive severance pay upon a qualifying termination of employment under the Company’s severance guidelines and CEO isindividual change in control severance agreements, as described under “Potential Payments Upon Termination or Change in Control—Employment Agreements” below.present whenhave any program, plan, or practice to time the grant of equity awards to our employees in coordination with the release of material non-public information. We generally grant awards at the time employment commences and annually in connection with our annual compensation review process. Neither our Board nor the Committee discusses and determines matters regarding his own compensation.Roleseek to time the grant of Committee's Compensation ConsultantThe Committee's charter gives it the authority to retain and approve fees and other terms of engagement for compensation consultants and other advisors to assist it in performing its duties. In fiscal 2019, the Committee continued to retain Compensia as its compensation consultant. Compensia reports directly to the Committee, which will annually review its performance, independence and fees.The Committee receives a report from Compensiaequity awards based on an annual basis reviewing its independence in light of SEC regulations and NYSE listing standards. Other Compensation Policies and Practicesourthe Company to align their interests with those of our stockholders. TheOur stock ownership policy has expanded over the years such that it now applies to all of our executive officers. The policywas amended in February 2022 and requires our ChairmanExecutive Chair and CEO to each maintain ownership of our Common Stock having a value equal to threefive times histheir base salary, our CFOand all other executive officers to maintain ownership of our Common Stock equal to twothree times histheir base salary, and each ofwhich was an increase over our other executive officers to maintain Common Stock ownership equal to one time their respective base salaries.prior policy. Our executive officers have five years from the date the policy became applicable to them to accumulate the specified level of ownership. As of the date of this Proxy Statement, all of our NEOs are in compliance with this policy. ("Clawback"(“Clawback”) Policy of Directors has adopted a clawbackcompensation recovery (“clawback”) policy pursuant to which the Company may recover from current or former executive officers the amount of previously paid incentive compensation (including both cash bonuses and equity awards) that it determines to be appropriate if a material error or inaccuracy resulted in whole or in part from the fraud or intentional misconduct of an executive that leads to a financial restatement.officer. This policy is intended to provide enhanced safeguards against certain types of employee misconduct, and allows for recovery of significant compensation paid to an executive.executive officer. Additionally, under Section 304 of the Sarbanes-Oxley Act, if we are required to restate our financial statements due to material noncompliance with any financial reportingCompany'sCompany’s securities. Company employees (including officers), directors, and consultants are prohibited from purchasing CommonCompany'sCompany’s equity securities. In addition, our 2016 Equity Incentive Award Plan prohibits the pledging of any award granted under the 2016 Planplan unless otherwise determined by the plan administrator.Tax DeductibilityAdministrator.Annual CompensationPrior Policies and Practicesthe passage of the Tax Cutsreview our Company’s existing executive compensation program and Jobs Act of 2017 (the "Tax Act"), Section 162(m) of the Internal Revenue Code limited tax deductions for certain annual compensation in excess of $1 million paid to certain executive officers of a publicly traded corporation. Compensation that qualified as "performance-based" under Section 162(m) was exempt from this $1 million limitation. As part of the Tax Act, the ability to rely on this "qualified performance-based compensation" exception was eliminated and the limitation on deductibility was generally expanded to include all named executive officers. Although we maintained compensation arrangements that were intended to qualify as performance-based compensation under Section 162(m), following passage of the Tax Act we may no longer take a deduction for any compensation paid to our covered employees in excess of $1 million, subject to certain transition relief rules. The Committee believes that tax deductibility is only one of several relevant considerations when structuring compensation programs and strives to balance the effectiveness and overall goals ofassess whether our executive compensation programspolicies and practices create risks that are reasonably likely to have a material adverse effect on our Company. Among other factors, this assessment considered the program structure, design characteristics, and performance-based measures associated with our executive compensation program and concluded that our executive compensation program contains a number of safeguards that are expected to minimize excessive risk taking, including a reasonable mix of cash and equity compensation opportunities, a compensation recovery (“clawback”) policy, a balanced annual incentive plan design that emphasizes top and bottom line performance, formal policies for the materialityadministration of reduced tax deductions. Accordingly, the Committee has approved compensation amountsour equity program, a succession plan for key executives, and stock ownership policies for our non-employee directors and executive officersofficers.wereour compensation policies and practices do not fully deductible because of Section 162(m)create risks that are reasonably likely to have a material adverse effect on our Company as a whole. We also believe that our incentive compensation arrangements provide incentives that do not encourage risk-taking beyond our Company’s ability to effectively identify and in light of the repeal of the performance-based compensation exception to Section 162(m), expects in the future to approve compensation that is not deductible for federal income tax purposes in order to achieve the desired flexibility in the design and delivery of compensation.Equity Award Grant PracticesWe do not have any program, plan or practice to time the grantequity awards to our employees in coordination with the release of material non-public information. We generally grant awards at the time employment commences and annually in connection with our annual compensation review process. Neither the Board of Directors nor the Committee seek to time the grant of equity awards based on our stock price.Severance and Change in Control ArrangementsWe consider severance to be an integral partExecutive CompensationoverallCode limits the deduction certain employers may take for otherwise deductible compensation package for our executives. We provide severancepayable to attract and retain individuals with superior ability and managerial talent, provide our executives with appropriate protections due to their vulnerability to terminations of employment due to a change in control, mergercertain current or acquisition and encourage our executives to focus their attention on their work duties and responsibilities in all situations.We believe that providing the NEOs with severance payments and benefits upon certain terminations of employment are key retention tools that help us remain competitive with the companies in our compensation peer group, provide ourformer executive officers with incentives to focus onof the best interests ofour stockholders in the context of a potential change in control, and appropriately protect our executive officers in the event of an involuntary termination of employment without creating a windfall due solely to a change in control.Severance. We have entered into an employment agreement with Mr. Davis and a letter agreement with Mr. Rhyu that provide for severance payments and benefits upon certain terminations of employment as further described below under the section "Potential Payments Upon Termination or Change in Control—Employment Agreements." Our other NEOs are generally entitled to receive severance pay upon a qualifying termination of employment under the Company's severance guidelines in an amount determined based on their position and tenure with the Company, which for Mr. Chavous, Dr. McAlmont and Mr. Mathis is currently equal to six months of base salary. In addition, upon a termination without cause or resignation for good reason, the NEOs may be eligible to receive, subject entirelyemployer to the Committee's discretion and contingent upon signing a releaseextent the compensation paid to such an officer for the taxable year exceeds $1 million. The Committee believes that tax deductibility is only one of claims in favor of the Company: (i) accelerated vesting of outstanding and unvested stock options that otherwise would have vested in the one year period following the date of termination (all other options to be forfeited), and (ii) accelerated vesting of outstanding and unvested restricted stock awards.several relevant considerations whenPursuant to the terms of their outstanding award agreements, in the event the employment of Mr. Rhyu, Mr. Chavous, Dr. McAlmont or Mr. Mathis is terminated due to his death or by the Company due to disability, the executive (or his estate) would be entitled to full accelerated vesting of outstanding and unvested restricted stock awards.Change in Control. Except as described below with respect to PSUs granted under the 2019 SPP, the NEOs are generally not entitled to receive cash payments or accelerated vesting of equity awards solely as a result of a change in control of the Company.We have entered into change in control agreements with our NEOs, other than Mr. Davis, whose entitlements to payments or benefits upon a change in control is set forth in his employment agreement, pursuant to which, in the event the NEO is terminated without cause or resigns for good reason within 24 months following a change in control, the executive would be entitled to receive 1.5 times the cash severance amount available under the Company's standard severance guidelines as described above and reimbursement for COBRA premiums for up to 12 months following termination. In addition, all unvested equity awards would become fully vested, provided that any awards subject to performance-based vesting would generally only vest subject to the attainment of the applicable performance conditions.Under the 2019 SPP, in the event of a change in control during the three-year performance period, the PSUs will be earned based on the stock price paid or implied in the transaction and the earned PSUs will vest immediately.Risk Assessment in Compensation ProgramsConsistent with SEC disclosure requirements, we periodically evaluate the risk profile associated with the Company's executive and other programs. In fiscal 2019, the Committee engaged Compensia to review the existing programs and assess whether our compensation policiesstrives to balance the effectiveness and practices create risks that are reasonably likely to have a material adverse effect on the Company. Among other factors, this assessment considered the program structure, design characteristics and performance-based measures associated withoverall goals of our executive compensation programsprogram with the materiality of reduced tax deductions. Accordingly, the Committee may approve compensation that is not deductible for federal income tax purposes in order to achieve the desired flexibility in the design and concludeddelivery of compensation.our executive compensation programs contain a number of safeguards that are expected to minimize excessive risk taking, including a reasonable mix of cashthe Compensation Discussion and equity compensation opportunities, a compensation recovery ("clawback") policy, a balanced annual incentive plan design that emphasizes topAnalysis be included in this Proxy Statement and bottom line performance, formal policiesincorporated by reference in the Company’s Annual Report on Form 10-K for the administrationfiscal year ended June 30, 2022. our equity program, aTable1933 or under the Securities Exchange Act of Contentssuccession plan for key executives and a stock ownership policy for our non-employee directors and executive officers.Based on1934, each as amended (together, the foregoing, we believe“Acts”), except to the extent that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company as a whole. We also believe that our incentive compensation arrangements provide incentives that dospecifically incorporates this information by reference, and shall not encourage risk-taking beyondotherwise be deemed filed under the Company's ability to effectively identify and manage significant risks, are compatible with effective internal controls and the risk management practices of our Company, and are supported by the oversight and administration of the Committee with regard to our executive compensation programs.Acts.2019, 20182022, 2021, and 2017.2020. Name Fiscal
YearBase
SalaryBonus (1) Stock
Awards (2)Nonequity
Incentive Plan
Compensation
(3)All Other
Compensation
(4)Total Nathaniel A. Davis 2019 $706,731 $— $7,676,558 $1,385,277 $17,131 $9,785,697 Chief Executive Officer and Chairman 2018 509,129 — 4,205,001 1,704,087 17,672 6,435,889 2017 400,000 — 1,999,989 716,520 15,210 3,131,719 James J. Rhyu 2019 $495,192 $— $3,654,349 $517,673 $9,211 $4,676,425 Chief Financial Officer 2018 500,000 — 755,967 618,263 9,549 1,883,779 President, Product and Technology 2017 500,000 — 815,840 458,300 9,048 1,783,188 Kevin P. Chavous 2019 $487,644 $— $3,329,353 $499,931 $14,943 $4,331,871 President of Academics, Policy and 2018 317,557 85,000 1,000,017 388,439 94,303 1,885,317 Schools Shaun E. McAlmont (5) 2019 $332,000 $85,000 $4,334,902 $334,366 $100,014 $5,186,282 President, Career Readiness Education Vincent W. Mathis (5) 2019 $317,769 $50,000 $3,265,637 $316,042 $45,286 $3,994,734 Executive Vice President, General Counsel and Secretary (1)Amounts shown for fiscal 2019 represent signing bonuses Dr. McAlmont and Mr. Mathis received in connection with their commencement of employment with the Company.(2)(1) This column represents the aggregate grant date fair value of stock awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For the portion of the performance-based stock awards granted during fiscal year 2022 tied to gross margin percentage, amounts are shown based on the probable outcome of the performance condition as determined at the date of grant, which was determined to be the target level of performance. For the portion of the performance-based stock awards granted during fiscal year 2022 tied to stock price CAGR, amounts are shown based on fair value determined using a Monte Carlo simulation model and the following assumptions: the Company’s Common Stock price at the date of grant of $35.62; a three-year continuously compounded equivalent risk-free rate of 0.44%; an expected stock price volatility of 55%; a dividend yield of 0%; and an expected term of approximately three years. computed in accordance with FASB ASC Topic 718. For PSUs, amounts shown reflectgranted to our NEOs during fiscal year 2022, the total grant date fair values calculated using a Monte Carlo simulation modelvalue of such performance-based stock awards for each NEO would be as these awards were market-based awards. The fair value was determined using a Monte Carlo simulation model and the following assumptions: the Company's Common Stock price at the date of grant of $17.29 (for Messrs. Davis, Rhyu and Chavous) and $31.51 (for Dr. McAlmontfollows: Mr. Rhyu: $4,557,144, Mr. Medina: $1,275,914, Mr. Mathis: $1,139,016, and Mr. Mathis); a three-year continuously compounded equivalent risk-free rate; an expected stock price volatility of 30% and 40%, respectively; and an expected term of approximately 3.00 and 2.75 years, respectively, for shares granted on September 18, 2018 and January 31, 2019, respectively.(3)All amounts are reported in the year earned, regardless of when they are paid.(4)The amounts in this column consist of 401(k) plan matching contributions, Company-paid life insurance, and long-term disability premiums. The amounts paid to Dr. McAlmont and Mr. Mathis also include $92,698 and $43,300, respectively, in moving expenses.(5)The base salary earned by Dr. McAlmont and Mr. Mathis for fiscal 2019 was prorated for their partial years of service.(2) All amounts are reported in the year earned, regardless of when they are paid. (3) The amounts in this column for fiscal year 2022 consist of 401(k) plan matching contributions, Company-paid life insurance and long-term disability premiums. 2019.2022. The equity awards described in the following table were granted under our 2016 Equity Incentive Award Plan. ��� Estimated Possible
Payouts under
Nonequity
Incentive Plan
Awards (1) Estimated Possible
Payouts under
Equity Incentive Plan Awards All Other
Stock
Awards:
Number of
Shares of Grant Date
Fair Value
of Stock Target Maximum Threshold Target Maximum Stock Awards Name Grant Date ($) ($) (#) (#) (#) (#) ($) Nathaniel A. Davis — 1,102,500 2,205,000 — — — — — Chief Executive Officer and 9/18/2018 (2 ) — — 54,649 413,331 939,858 — 5,676,554 Chairman 9/18/2018 (3 ) — — — — — 115,674 2,000,003 James J. Rhyu 412,000 824,000 — — — — Chief Financial Officer 9/18/2018 (2 ) — — 12,882 93,885 413,537 — 2,448,346 President, Product and Technology 1/31/2019 (4 ) — — — 11,835 11,835 — 206,011 8/31/2018 (3 ) — — — — — 60,386 999,992 Kevin P. Chavous — 397,880 795,760 — — — — — President of Academics, Policy and 9/18/2018 (2 ) — — 10,539 83,257 413,537 — 2,422,334 Schools 1/31/2019 (4 ) — — 11,835 11,835 — 207,011 8/31/2018 (3 ) — — — — — 42,271 700,008 Shaun E. McAlmont — 269,750 581,000 — — — — — President, Career Readiness 1/31/2019 (2 ) — — 118,265 138,606 181,545 — 3,587,002 Education 8/29/2018 (3 ) — — — — — 45,000 747,900 Vincent W. Mathis — 263,250 567,000 — — — — — Executive Vice President, 1/31/2019 (2 ) — — 88,699 103,954 136,158 — 2,690,237 General Counsel and Secretary 9/4/2018 (3 ) — — — — — 35,000 575,400 (1) Represents the target and maximum incentive awards payable under our Executive Bonus Plan based on fiscal 2022 base salaries for each NEO. For additional information regarding our Executive Bonus Plan, see “Fiscal 2022 Compensation Decisions—Determination of Annual Incentive Compensation” above. (2) Represents PSUs that will be earned based on the attainment of gross margin percentage objectives for the three-year performance period. (3) Represents PSUs that will be earned based on the attainment of stock price CAGR objectives for the three-year performance period. (4) Represents restricted stock awards vesting semi-annually over a three-year period, with 20% vesting in the first year and 40% vesting in each of the next two years following the grant date. (5) Represents restricted stock awards that vested on June 30, 2022. (6) This column represents the aggregate grant date fair value of stock awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. See footnote 1 to the Summary Compensation Table above for more information. Also, refer to Note 9, “Equity Incentive Plan,” to the consolidated audited financial statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 for a discussion of the relevant assumptions used to determine the grant date fair value of these awards. (1)Represents the target and maximum incentive awards payable under our Executive Bonus Plan based on fiscal 2019 base salaries for each NEO. For additional information regarding our Executive Bonus Plan, see "Fiscal 2019 Compensation Decisions—Determination of Annual Incentive Compensation" above.(2)Represents PSUs that will be earned based on the attainment of stock price growth measured at the end of fiscal 2021. For more information, see "Determination of Long-Term Incentive Compensation—2019 Long-Term Shareholder Performance Plan (SPP)" above. The PSUs do not have target award levels. In accordance with the instructions to Item 402(d) of Regulation S-K, which requires disclosure of a representative amount if the target amount is not determinable, the target amount shown in the table is based on the 3-Year CAGR of 10.0% with respect to the PSUs granted to Mr. Davis, Mr. Rhyu and Mr. Chavous and based on the 3-Year CAGR of 30.0% with respect to the PSUs granted to Dr. McAlmont and Mr. Mathis. If the target amount were shown based on the prior fiscal year's performance, the amount shown in the table would be $0.(3)Represents restricted stock awards vesting semi-annually over a three-year period, with 20% vesting in the first year and 40% vesting in each of the next two years following the grant date.(4)Amounts shown for Mr. Rhyu and Mr. Chavous reflect an incremental increase in the maximum award amount approved in January 2019 to ensure share payout levels are not reduced at greater performance levels. See "Fiscal 2019 Compensation Decisions—Determination of Long-Term Incentive Compensation—2019 Long-Term Shareholder Performance Plan (SPP)" for additional information.2019.2022. The section titled "Determination of Long-Term“Long-Term Incentive Compensation"Compensation” in the Compensation Discussion and Analysis above provides additional information regarding the outstanding equity awards set forth in this table. The payout and market values below are based upon the price per share of our Common Stock on June 30, 2022 of $40.79. (1) Mr. Rhyu’s outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date: Option Awards Stock Awards Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)Option
Exercise
Price
($)Option
Expiration
Date Equity
Incentive
Plan Awards:
Amount of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)Equity
Incentive
Plan Awards:
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($) Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
420,000
—
$21.26
01/07/21
—
—
—
— 97,720 — $33.92 09/19/21 — — — — 185,985 — $18.17 09/04/22 — — — — 227,917 15,195 (1) $13.43 09/10/23 — — — — — — — — 724,185 (2) 22,022,466 — — — — — — — — 341,276 (3) 10,378,203 — — — — 362,093 (2) 11,011,248 — — — — — — — — 5,124 (4) 155,821 — — — — — — 3,200 (5) 97,312 — — — — — — 87,649 (6) 2,665,406 — — — — 362,093 (2) 11,011,248 — — — — — — — — 7,251 (7) 220,503 — — — — — — 67,651 (8) 2,057,267 — — — — 118,265 (2) 3,596,439 — — — — — — — — 40,500 (9) 1,231,605 — — — — 88,699 (2) 2,697,337 — — — — — — — — 31,500 (10) 957,915 (1)Mr. Davis' unvested stock options13,069 shares vested on SeptemberAugust 10, 2019.(2)Represents PSUs that will be earned based2022;the attainment of stock price growth measured at the end of fiscal 2021. The number of shares is based on the 3-Year CAGR of 25.0% and a stock price hurdle of $33.21 per share.(3)Mr. Davis' outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:•79,373August 15, 2022;DavisRhyu in connection with his appointment as CEO through September 2019.fiscal 2021. The shares were deemed earned in early fiscal 2022. 4,918 shares vested on August 6, 2022 and 4,918 shares will vest on August 6, 2023;September 2019;•92,600two equal installments beginning on February 12, 2023;(2) Represents PSUs that will be earned based on the attainment of gross margin percentage measured at the end of fiscal 2024. The number of shares reflected in the table above is based on target achievement levels. (3) Represents PSUs that will be earned based on the attainment of stock price growth measured at the beginning of fiscal 2025. The number of shares reflected in the table above is based on target achievement levels. (4) Mr. Davis’ outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date: 2018.2021. The shares were deemed earned in early fiscal 2019. 46,300 of the2022. 14,534 shares vested on August 2, 20196, 2022 and the remaining14,534 shares will vest one year later;•65,196 restricted shares represent performance-based restricted stock granted to Mr. Davis in fiscal 2017. Theseon August 6, 2023;31, 2019;14, 2022, and•11,567 shares vested on September 18, 2019 and 92,540 shares will vest semi-annually in four equal installments beginning March 18, 2020.(4)Represents performance-based restricted shares granted in fiscal 2018. These shares were deemed earned in early fiscal 2019 based upon the attainment of free cash flow performancemetrics for fiscal 2018, as modified by our total stockholder return ranking as compared to companies in the Russell 2000 Index.•1,708 shares vested on August 1, 2019 and 3,416 13,114 shares will vest semi-annually in two equal installments beginning on February 1, 2020.(5)Represents market-based RSAs that were granted in fiscal 201714, 2023; and that began to vest when we achieved an average stock price of $14.35 per share measured during the 30 consecutive calendar days following the report of fiscal 2017 earnings. TheSeptember 8, 2019.(6)Mr. Rhyu'sJuly 1, 2022.(5) Represents performance-based restricted stock granted to Mr. Davis in fiscal 2020. The restricted shares were eligible to vest based on attaining free cash flow performance goals for each of fiscal year 2020, 2021 and 2022 or based on attaining a cumulative three-year free cash flow goal for fiscal 2020-2022. The free cash flow performance goal for fiscal year 2021 was deemed earned in early fiscal 2022 and 119,431 shares vested on August 15, 2021. The three-year free cash flow goal for fiscal 2020-2022 was deemed earned in early fiscal 2023 and 238,863 shares vested on August 15, 2022. (6) Mr. Medina’s outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date: vest as follows, subjectgranted to his continued employment throughMr. Medina in fiscal 2021. The shares were deemed earned in early fiscal 2022. 3,442 of the applicable vesting date:•6,039 shares vested on August 31, 20195, 2022 and 48,3083,441 shares will vest on August 5, 2023;28, 2020;•6,834 shares vested on September 20, 2019 and 13,668 shares will vest semi-annually in two equal installments beginning on March 20, 2020; and•12,80013, 2023.(7) Mr. Mathis’ outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date: 24, 2019.(7)Represents10, 2022;sharesstock granted to Mr. Mathis in fiscal 2018. These2021. The shares were deemed earned in early fiscal 2019 based upon2022. 3,934 of the attainment of free cash flow performance metrics for fiscal 2018, as modified by our total stockholder return ranking as compared to companies in the Russell 2000 Index.•2,417 shares vested on August 1, 20195, 2022 and 4,8343,934 shares will vest on August 5, 2023;1, 2020.(8)Mr. Chavous' outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:•11,481 restricted shares represent performance-based restricted stock granted to Mr. Chavous in fiscal 2018. The shares were deemed earned in early fiscal 2019 based on Mr. Chavous' performance as measured against individual performance metrics. 5,74012, 2023; and1, 201913, 2022, and 5,741 shares will vest on August 1, 2020;•4,228 shares vested on August 31, 2019 and 33,81611,224 shares will vest semi-annually in four equal installments beginning on February 28, 2020; and•18,12613, 2023.(8) Mr. Ottolenghi’s outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date: threefour equal installments beginning on December 15, 2019.(9)Dr. McAlmont's outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:•4,5002022;15, 201913, 2022, and 36,0006,736 shares will vest semi-annually in four equal installments beginning on February 15, 2020.(10)Mr. Mathis's outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:•3,500 shares vested on September 15, 2019 and 28,000 shares will vest semi-annually in four equal installments beginning on March 15, 2020.theour NEOs as a result of the vesting of restricted stock awards during the fiscal year ended June 30, 2019. No2022. None of our NEOs exercised any stock options were exercised byduring the NEOs during fiscal 2019.year ended June 30, 2022. (1) Represents the value of vested shares calculated by multiplying (i) the gross number of shares acquired on vesting by (ii) the closing market price of our Common Stock on the date of vesting. Stock Awards Number of Shares
Acquired on
Vesting
(#)Value Realized on
Vesting (1)
($) 351,092 6,113,631 122,431 2,549,550 23,865 600,118 4,500 144,270 3,500 118,230 (1)Represents the value of vested shares calculated by multiplying (i) the gross number of shares acquired on vesting by (ii) the closing price of our Common Stock on the date of vesting.2019,2022, under our Deferred Compensation Plan, which is discussed in more detail in the Compensation Discussion and Analysis above. (1) All contributions have been previously reported within the Summary Compensation Table. Name Executive
Contributions
in Last Fiscal
Year ($) Company
Contributions
in Last Fiscal
Year ($) Aggregate
Earnings / (Losses)
in Last Fiscal
Year ($) Aggregate
Withdrawals /
Distributions
($) Aggregate
Balance at
Last FYE
($) Nathaniel A. Davis — — — — — Chief Executive Officer and Chairman James J. Rhyu 61,826 — 5,341 — 476,690 Chief Financial Officer President, Product and Technology Kevin P. Chavous — — — — — President of Academics, Policy and Schools Shaun E. McAlmont — — — — — President, Career Readiness Education Vincent W. Mathis — — — — — Executive Vice President, General Counsel and Secretary Mr. Davis' appointmenthis transition from service as our CEO during fiscal 2018,Chief Executive Officer, in January 2021, we entered into an amendment toamended the second amended and restated employment agreement with Mr. Davis.Davis pursuant to which Mr. Davis served as our Executive Chair. The amendment extended the term of the employment agreement to September 30, 2019, which term automatically renews for successive one year periods unless notice of non-renewal is delivered by either party at least 60 days prior to the expiration of the applicable term.Under the terms of the employment agreement, as amended, expired on September 30, 2022, following our delivery of a notice of non-renewal to Mr. Davis is entitledin July 2022.receive anhis employment agreement in effect during fiscal 2022, Mr. Davis’ annual base salary of $735,000was $500,000, and ishe was eligible for an annual performance-based bonuses with a target award amount equal to 150% of his base salary and a maximum award opportunity of 300% of his base salary. Mr. Davis iswas also entitled to annual awards under the Company'sCompany’s equity incentive awardsaward plans and programs as in effect from time to time, with the target level for Mr. Davis’ awards under the Company’s equity award plans and programs to be established in a target award level beginning with fiscal 2019 inrange to be determined based on good faith negotiations between Mr. Davis and our Board or the range of $2,700,000Committee. Equity awards granted to $3,300,000,Mr. Davis were subject to such vesting criteria to be determined by theour Board of Directors and Mr. Davis at the time of the grant, including performance-based vesting criteria.To maintain flexibility and ensure that stockholders are not overly burdened with excessive severance costs ascontinue to evaluate our leadership needs, in connection with his re-appointment as CEO, we negotiated an arrangement withhad terminated Mr. Davis’ employment without cause or he resigned for good reason, Mr. Davis that would eliminatehave been entitled to receive (i) a lump sum cash payment equal to three times his base salary, plus one times his target annual bonus, and (ii) 12 months of continued health, medical, dental and vision benefits (or a payment in lieu thereof). In addition, upon such a termination, or upon our cash severance obligations to Mr. Davis in the event Mr. Davis is replaced by a new chief executive officer. Specifically, if we (i) hire a replacement CEO and Mr. Davis' employment is terminated prior to September 30, 2019 or (ii) electelection not to renew the employment agreement, no severance payments will be made; however, Mr. Davis'Davis’ outstanding equity awards willwere eligible to continue to vest while he continues to serve as a member of the Board and if Mr. Davis iswas also asked to leave the Board in connection with such termination or non-renewal, Mr. Davis will bewas entitled to accelerated vesting of his outstanding equity awards, provided that performance-based awards will only be payable subject to the attainment of the applicable performance measures, and an extended option exercise period of one year. Notwithstanding the terms of his employment agreement, as a means to incentivize Mr. Davis' continued employment, the Board approved a "modifier" to Mr. Davis' award under the 2019 SPP that reduces the number of PSUs that would otherwise be eligible to vest in certain circumstances. Pursuant to this modifier, if Mr. Davis voluntarily resigns from employment during the second year of the performance period (and he is not asked to leave the Board), he will remain eligible to vest in 50% of the PSUs that otherwise would have vested had he remained employed through the end of the performance period. If Mr. Davis voluntarily resigns from employment (i) during the second year of the performance period and is asked to leave the Board or (ii) during the third year of the performance period, he will remain eligible to vest in 75% of the PSUs that otherwise would have vested had he remained employed through the end of the performance period.If the foregoing circumstances do not apply and we terminate Mr. Davis' employment without cause or he resigns for good reason, Mr. Davis will be entitled to receive (i) a lump sum cash payment equal to three times his base salary, (ii) a pro-rated portion of the annual bonus he would have received for the year of termination, based upon actual performance for such year and generally paid at the same time annual bonuses are paid to the Company's executives, and (iii) one year of continued health, medical, dental and vision benefits (or a payment in lieu thereof). Mr. Davis would also be entitled to accelerated vesting of hisoutstanding equity awards to the extent such awards would have vested during the 24-month period following his termination of employment; provided that performance-based equity awards will only be payable subject to the attainment of the applicable performance measures. If Mr. Davis'Davis’ termination without cause or resignation for good reason occursoccurred within 24 months following a change in control, Mr. Davis will bewould have been entitled to receive the severance payments and benefits described above, except that, he would have received two times his target annual bonus and all of Mr. Davis'Davis’ outstanding equity awards would have become 100% vested and any performance-based equity awards will remainwould have remained subject to the attainment of applicable performance measures as such measures apply in connection with the change in control.Davis'Davis’ employment iswas terminated due to his death or by the Company due to disability, Mr. Davis (or his estate) will bewould have been entitled to receive (i) continued base salary payments for three months, (ii) a pro-rated annual bonus, and (iii) one year of continued health, medical, dental and vision benefits (or a payment in lieu thereof). Mr. Davis would also behave been entitled to accelerated vesting of his outstanding equity awards to the extent such awards would have vested during the 12-month period following his termination of employment; provided that performance-based equity awards will only be payable subject to the attainment of the applicable performance measures.Davis'Davis’ receipt of any severance payments or benefits (other than upon death or disability) iswas generally contingent upon his entering into a customary separation agreement with the Company containing a release of claims in favor of the Company. The employment agreement also containscontained a three yearthree-year confidentiality covenant and additional restrictive covenants pursuant to which Mr. Davis has agreed not to compete with us or solicit our customers or employees for 12 months following termination.termination of employment. If Mr. Davis iswas terminated without cause or resigns for good reason, in either case, within 24 months following a change in control and the Company or the successor entity electselected to continue Mr. Davis'Davis’ compliance with the non-compete provision, then Mr. Davis will bewould have been entitled to an additional payment equal to one timetimes his then-current base salary.SummaryWe havehisthat Mr. Rhyu’s employment is terminated by the Company without cause or heMr. Rhyu resigns for good reason, Mr. Rhyu iswill be entitled to 12 monthsreceive, subject to his signing and not revoking a general release of claims, (i) continued payment of his annual base salary continuation andfor a period of 24 months; (ii) any earned but unpaid annual bonus for the fiscal year immediately preceding the year of termination.isremains subject to the terms of our Confidentiality, Proprietary Rights and Non-Solicitation Agreement which prohibits the solicitation of employees during the one yearone-year period following termination of employment. In addition, during any period in which Mr. Rhyu is receiving any compensation from the Company (including and no less than any applicable severance period) and for a 12-month period thereafter, Mr. Rhyu is prohibited from competing with the Company or its business. granted under the 2019 SPP, none of our NEOs are entitled to any payments or benefits upon a change in control of the Company absent a qualifying termination of employment in connection with the change in control. We have entered intocontrol of the Company. The change in control severance agreements with our executives, otherNEOs (other than Mr.Messrs. Davis pursuant to which theyand Rhyu, whose change in control benefits are entitled to certain additional payments and benefitsset forth in the event they incur a qualifyingtheir individual employment agreements) provide that, upon termination of the NEO’s employment by the Company without cause or the resignation of employment by the NEO for good reason, in either case, within the 24 month periodtwo years following a change in control of the Company. These agreements are describedCompany, the NEO will be entitled to receive, subject to the NEO signing and not revoking a general release of claims in more detail abovefavor of the Company and continued compliance with certain restrictive covenants, (i) a lump sum severance payment in an amount equal to 1.5 times the standard severance the NEO would be entitled to receive under the heading "SeveranceCompany’s then-prevailing severance practices and Change1.5 times the NEO’s target annual bonus; (ii) reimbursement for the Company paid portion of the COBRA premiums required to continue group medical, dental and vision coverage for the NEO and the NEO’s covered dependents for a period of up to 12 months following termination; and (iii) accelerated vesting of all unvested equity or equity-based awards, provided that, unless a provision more favorable to the NEO is included in Control Arrangements—Changean applicable equity award agreement, any such awards that are subject to performance-based vesting conditions will only be payable subject to the attainment of the performance measures for the applicable performance period as provided under the terms of the applicable award agreement. Mr. Medina’s change in Control." control severance agreement was terminated in connection with his resignation as our Chief Financial Officer effective June 30, 2022.hisMr. Davis’s employment agreement, as amended, and Mr. Rhyu’s amended and restated letter agreement, each of Mr. Davis isand Mr. Rhyu are entitled to certain additional payments and benefits in the event he incurs a qualifying termination of employment within 24 months following a change in control as described above.Under2019 SPP,Company’s severance guidelines in an amount determined based on their position and tenure with the Company, which is currently equal to 12 months of base salary. In addition, upon a termination of employment without cause or resignation for good reason, these NEOs may be eligible to receive (subject entirely to the Committee’s discretion and contingent upon signing a general release of claims in favor of the Company) accelerated vesting of outstanding and unvested restricted stock awards.changetransition agreement (the “Transition Agreement”). The Transition Agreement provides that Mr. Medina will continue as a non-executive employee of the Company in control duringhis role as Special Advisor to the three-year performance period,Chief Executive Officer until June 30, 2023 (the “Employment Period”). During the PSUsEmployment Period, Mr. Medina will be earned based onreceive a base salary at an annualized rate equal to $475,000 until September 30, 2022, reduced to $36,000 for the stock price paid or impliedremainder of the Employment Period, and continue to vest in his outstanding equity awards. Provided that Mr. Medina remains employed through January 1, 2023,transactionamount of $237,500, on or before January 15, 2023. If Mr. Medina remains employed with the Company through June 30, 2023, or, if prior to that date his employment with the Company is terminated for reasons other than his voluntary resignation, then, subject to Mr. Medina executing and not revoking a general release of claims in favor of the earned PSUsCompany, he will vest immediately.receive a lump-sum payment equal to $237,500 (plus the amount in the preceding sentence if not previously paid).Change-in-ControlChange in Control Benefits2019,2022, and the price per share of our Common Stock equaled $30.41,$40.79, the value of one share of our Common Stock on the last trading day of fiscal 2019. Name Payment Death Disability Termination
Without
Cause Constructive
Termination /
Good
Reason Change in
Control (no
Termination) Change in
Control (and
Qualifying
Termination) Nathaniel A. Davis (1) Salary Continuation $183,750 $183,750 $2,205,000 $2,205,000 — $2,205,000 (2) Chief Executive Officer Bonus 1,385,277 1,385,277 1,385,277 1,385,277 — 1,385,277 and Chairman Benefit Continuation (3) 6,989 6,989 6,989 6,989 — 6,989 Option Vesting (4) 258,011 258,011 258,011 258,011 — 258,011 Restricted Stock Vesting (5) 6,859,614 6,859,614 9,674,668 9,674,668 — 10,378,203 PSU Vesting (6) — — 19,173,165 19,173,165 19,173,165 — James J. Rhyu Salary Continuation — — 515,000 515,000 — 772,500 Chief Financial Officer Benefit Continuation (3) — — — — — 6,862 President, Product and Restricted Stock Vesting (5) 2,918,539 2,918,539 — — — 2,918,539 Technology PSU Vesting (6) — — — — 8,381,976 — Kevin P. Chavous Salary Continuation — — 248,675 248,675 — 373,013 President of Academics, Benefit Continuation (3) — — — — — 6,902 Policy and Schools Restricted Stock Vesting (5) 2,277,770 2,277,770 — — — 2,277,770 PSU Vesting (6) — — — — 8,381,976 — Shaun E. McAlmont Salary Continuation — — 207,500 207,500 — 311,250 �� President, Career Benefit Continuation (3) — — — — — 6,887 Readiness Education Restricted Stock Vesting (5) 1,231,605 1,231,605 — — — 1,231,605 PSU Vesting (6) — — — — 967,188 — Vincent W. Mathis Salary Continuation — — 202,500 202,500 — 303,750 Executive Vice Benefit Continuation (3) — — — — — 6,774 President, General Restricted Stock Vesting (5) 957,915 957,915 — — — 957,915 Counsel and Secretary PSU Vesting (6) — — — — 725,393 — (1) Amount shown assumes that the Company or a successor to the Company does not require Mr. Davis’ continued compliance with the non-compete provision of his employment agreement after his termination of employment. If the Company does require his continued compliance with the non-compete provision of his employment agreement after his termination, he would receive an additional payment of an amount equal to one time his base salary, which was equal to $500,000 as of June 30, 2022. (1)In the event Mr. Davis' termination of employment occurred on June 30, 2019 in connection with our hiring a new Chief Executive Officer or a non-renewal of his employment agreement, Mr. Davis would not have received the cash severance amounts stated in this table.(2)Amount shown assumes that the Company or a successor to the Company does not require Mr. Davis' continued compliance with the non-compete provision of his employment agreement after his termination. If the Company does require his continued compliance with the non-compete provision of his employment agreement after his termination, he would receive an additional payment of one time his base salary, which was equal to $735,000 as of June 30, 2019.(3)Amounts shown represent an estimate of the cost to provide continued health, medical, dental and vision benefits.(4)Amounts shown include unvested stock options that were in the money as of June 30, 2019 and that would vest in each of the circumstances described above.Table of ContentsTABLE OF CONTENTS(5)Amounts shown include the portion of outstanding restricted shares that would vest in each of the circumstances described above.(6)Amounts shown include the portion of PSUs that would vest in a change in control based on the closing price of our Common Stock on June 30, 2019.(2) Amounts shown represent an estimate of the cost to provide continued health, medical, dental and vision benefits. (3) Amounts shown include the dollar value of the portion of outstanding restricted shares that would vest in each of the circumstances described above. (4) Amounts shown include the dollar value of the portion of PSUs that would vest in a change in control assuming target achievement as it relates to the gross margin growth metric and three-year CAGR metric and the closing price of our Common Stock on June 30, 2022. (5) Effective September 30, 2022, Mr. Davis stepped down from his position as Executive Chair of the Company and as a member of the Board. Upon his retirement, Mr. Davis became entitled to the benefits upon a termination by reason of our election not to renew the term of his employment agreement, as described in the section “Potential Payments Upon Termination or Change in Control—Employment Agreements” above. (6) Effective June 30, 2022, Mr. Medina retired from his position as Chief Financial Officer. He remains employed by the Company in a non-executive capacity as Special Advisor to the Chief Executive Officer. In August 2022, we entered into a transition agreement with Mr. Medina setting forth the terms and conditions of his employment as Special Advisor, as further described under the section “Potential Payments Upon Termination or Change in Control—Medina Transition Agreement” above. Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information regarding the relationship of the annual total compensation of our employees and the annual total compensation of our Chairman and CEO, Mr. Davis.Rhyu. We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner intended to be consistent with Item 402(u) of Regulation S-K.20182021 to fiscal 20192022 that would significantly impact our pay ratio disclosure. As a result, we are using the same median employee identified in the CEO Pay Ratio disclosure included in our 2018fiscal 2021 proxy statement. This employee representedWe identified the median employee following an examination of annual base salaries for fiscal 2018 of allfrom among those employees who were employed by us on April 30, 2018,June 17, 2021, excluding our CEO.CEO, based on annual base salaries for fiscal 2021, which we believe is reasonably representative of our employees’ total compensation for the year. We included all employees, in this analysis, whether employed on a full-time, part-time or seasonal basis, which yielded a total employee population of 4,757.7,348. We did not make any cost-of-living or other adjustments to employee compensation.20182021 to fiscal 2019.2022. For the median employee, we calculated the annual total compensation for fiscal 20192022 for such employee using the same methodology we used for our NEOs as set forth in the Summary Compensation Table for Fiscal 2019.2019,2022, the annual total compensation for our median employee was $52,182$61,798 and the annual total compensation for our Chairman and CEO was $9,785,697,$7,691,994, resulting in an estimated pay ratio of 188124 to 1.The Compensation Committee ("Committee") has reviewed and discussed with management the Compensation Discussion and Analysis set forth above. Based on its review and discussion with management, the Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2019.This report is provided by the following independent directors, who comprise the Committee:Members of the Compensation CommitteeRobert E. Knowling, Jr. (Chairman)John M. EnglerSteven B. FinkThe foregoing report is not "soliciting material," shall not be deemed "filed" and shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, each as amended (together, the "Acts"), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Acts.Table of ContentsTABLE OF CONTENTSCERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Policies and Procedures for Related-Party TransactionsWe recognize that related-party transactions present a heightened risk of conflicts of interest and have adopted a written policy to which all related-party transactions shall be subject. Pursuant to the policy, the Audit Committee of our Board of Directors, or in the case of a transaction in which the aggregate amount is, or is expected to be, in excess of $250,000, the Board of Directors will review the relevant facts and circumstances of all related-party transactions, including, but not limited to: (i) whether the transaction is on terms comparable to those that could be obtained in arm's length dealings with an unrelated third party; and (ii) the extent of the related party's interest in the transaction. Pursuant to the policy, no director, including the Chairman of the Audit Committee, may participate in any approval of a related-party transaction to which he or she is a related party. The Board of Directors or Audit Committee, as applicable, will then, in its sole discretion, either approve or disapprove the transaction.Certain types of transactions, which would otherwise require individual review, have been pre-approved by the Audit Committee. These types of transactions include, for example: (i) compensation to an officer or director where such compensation is required to be disclosed in our proxy statement; (ii) transactions where the interest of the related party arises only by way of a directorship or minority stake in another organization that is a party to the transaction; and (iii) transactions involving competitive bids or fixed rates. Additionally, pursuant to the terms of our related-party transaction policy, all related-party transactions are required to be disclosed in our applicable filings as required by the Securities Act of 1933, as amended and the Exchange Act and related rules. Furthermore, any material related-party transactions are required to be disclosed to the full Board of Directors. We have established internal policies relating to disclosure controls and procedures, which include policies relating to the reporting of related-party transactions that must be pre-approved under our related-party transactions policy. Compensation Committee Interlocks and Insider ParticipationDuring fiscal 2019, Messrs. Engler, Fink, and Knowling served on our Compensation Committee. During fiscal 2019, there were no interlocking relationships existing between members of our Board of Directors and our Compensation Committee and members of the board of directors or the compensation committee of any other company. During fiscal 2019, no members of the Compensation Committee were current or former officers of the Company or were employees of the Company and no members of the Compensation Committee had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K.PROPOSAL 2:ADVISORY VOTE TO APPROVE NAMED EXECUTIVEOFFICER COMPENSATIONIn accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") andDelinquent Section 14 of the Exchange Act, we are asking our stockholders to cast a non-binding advisory vote to approve the fiscal 2019 compensation of our NEOs, as disclosed in this Proxy Statement. This Proposal, commonly known as a "Say on Pay" proposal gives our stockholders the opportunity to express their views on the design and effectiveness of our executive compensation programs.As described in detail under the heading "Compensation Discussion and Analysis," our executive compensation programs are designed to attract, motivate, and retain our NEOs, who are critical to our success. Under these programs, our NEOs are rewarded for the achievement of specific annual, long-term and strategic goals, corporate goals, and the realization of increased stockholder value. Please read the "Compensation Discussion and Analysis" and the compensation tables that follow, included in this Proxy Statement, for additional details about our executive compensation programs, including information about the fiscal 2019 compensation of our NEOs. Prior Year Vote and Fiscal 2019 Compensation HighlightsThe annual stockholder advisory vote on our named executive officer compensation for fiscal 2018 yielded an approval rate of 95%, which reflected a significant improvement over prior years and our stockholders' strong support of our executive pay programs and practices. As in prior years, we endeavored to remain responsive to stockholder feedback when designing and implementing our executive compensation programs to ensure that the elements of these programs effectively reflect our desire to further our strategic business objectives while tightly linking executive pay to measurable performance results. For fiscal 2019, we introduced a new long-term shareholder performance plan designed to create stockholder value over a multi-year performance period by encouraging our NEOs to focus on executing our key strategic objectives. Awards under this plan are based entirely on a three-year performance period and will be earned only if we realize significant stock price appreciation as of the end of the three-year period.By actively pursuing our strategic business objectives during fiscal 2019, we realized solid financial results and key achievements in the following areas:•Managed Public School Retention and Enrollments. Improving student retention in our virtual schools is a key aspect of our business strategy. Research shows that students who remain in the same school setting longer generally perform better academically. To ensure the best outcomes for students, we partner with the school boards we serve to seek to enroll and retain students who are truly engaged and ready to learn. For fiscal 2019, retention at our managed public schools improved by more than ten basis points over fiscal 2018. In part, as a result of these improvements, total average enrollments in our Managed Public School Programs increased 6.3% over fiscal 2018.•Strong Financial Performance. We set rigorous goals for the financial performance metrics under our Executive Bonus Plan and delivered solid results for the year, as discussed in the "Compensation Discussion and Analysis" above.•Continued Expanding Our Career Readiness Education Offering. We continued to expand our Career Readiness offering, highlights of which include increasing the number ofDCAs from 13 in school year 2018-2019 to 20 in school year 2019-2020 and launching our National Job Shadow Week offering hands-on learning experiences for the DCA students.We are asking our stockholders to indicate their support for the compensation of our NEOs as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our stockholders to voteFOR the following resolution:"RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED."The Say on Pay vote is advisory and, therefore, not binding on the Company, the Compensation Committee, or our Board of Directors. Our Board of Directors and our Compensation Committee value the opinions of our stockholders, and to the extent there is a significant vote against the NEO compensation, as disclosed in this Proxy Statement, we will consider our stockholders' concerns and will evaluate what, if any, further actions are necessary to address those concerns. We expect to hold our next Say on Pay vote at our 2020 annual meeting of stockholders.OUR BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE NON-BINDING ADVISORY RESOLUTION APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SEC.PROPOSAL 3:RATIFICATION OF APPOINTMENT OFINDEPENDENT AUDITORSubject to stockholder ratification, the Audit Committee has appointed the firm of BDO USA, LLP ("BDO USA"), as the Company's independent registered public accounting firm for our fiscal year ending June 30, 2020. Although ratification is not required by law, our Board of Directors believes that stockholders should be given the opportunity to express their view on the subject. While not binding on the Audit Committee, if the stockholders do not ratify this appointment, the appointment will be reconsidered by the Audit Committee. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders. A representative of BDO USA is expected to attend the Annual Meeting and this representative will be provided with an opportunity to make a statement, if he or she desires, and will be available to respond to appropriate questions of stockholders, if any.The affirmative vote of the holders of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting is required to ratify the appointment of BDO USA as the Company's independent registered public accounting firm.OUR BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE RATIFICATION OF BDO USA AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JUNE 30, 2020. Fees Paid to Independent Registered Public Accounting FirmThe following table sets forth the aggregate fees and expenses billed to us by BDO USA for fiscal years 2018 and 2019: 2018 2019 $ 1,111,788 $ 1,119,500 81,497 142,750 — — — — $ 1,193,285 $ 1,262,250 Audit Fees are for professional services for the Company's annual audit, including the audit of internal control over financial reporting for fiscal 2018 and 2019, reviews of the interim financial statements included in the Company's quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements. Audit-related fees in fiscal 2018 and 2019 were for professional services associated with audits of certain managed schools and other minor matters.The Audit Committee maintains policies and procedures for the pre-approval of work performed by the independent auditors in that, under the Audit Committee charter, all auditor engagements must be approved in advance by the Audit Committee. All of the services provided to the Company by BDO USA during fiscal 2018 and 2019 were pre-approved by the Audit Committee.In accordance with a written charter adopted by the Board of Directors, the Audit Committee, or the "Committee", assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the Company's financial reporting processes and its internal audit function. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls and for assessing the effectiveness of the Company's internal control over financial reporting. The independent auditors are responsible for performing an independent audit of the Company's consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board and for issuing reports thereon.In this context, the Committee has met and held discussions with management, the independent auditors and internal audit, as well as legal counsel. Management represented to the Committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. The Committee discussed with the independent auditors matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC.In addition, the Committee has received the written disclosures and the letter from the independent auditors required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Committee concerning independence and has discussed with the independent auditors the auditors' independence from the Company and its management.The Committee discussed with the Company's internal and independent auditors the overall scope and plans for their respective audits. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of the Company's internal controls and the overall quality of the Company's accounting principles.In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board of Directors approved, the inclusion of the audited financial statements of the Company for the fiscal year ended June 30, 2019, in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2019, filed with the SEC on August 7, 2019. The Committee also recommended to the Board of Directors, subject to stockholder ratification, the selection of BDO USA as the Company's independent registered public accounting firm for the fiscal year ending June 30, 2020, and the Board of Directors accepted its recommendation.Members of the Audit CommitteeSteven B. Fink (Chairman)Aida M. AlvarezRobert L. CohenThe foregoing report is not "soliciting material," shall not be deemed "filed" and shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, each as amended (together, the "Acts"), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Acts.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth, as of October 18, 2019, certain information with respect to the beneficial ownership of Common Stock by each beneficial owner of more than 5% of the Company's voting securities (based solely on review of filings with the SEC), each director and each named executive officer and all directors and executive officers of the Company as a group, except as qualified by the information set forth in the notes to this table. To our knowledge, except as noted below, no person or entity is the beneficial owner of more than 5% of the voting power of the Company's voting securities. As of October 18, 2019, 40,955,110 shares of our Common Stock were outstanding.Unless otherwise noted, the address for each director and executive officer is c/o K12 Inc., 2300 Corporate Park Drive, Herndon, VA 20171. Shares Beneficially
Owned (1) Percent 294,683 * 99,263 * 59,460 * 44,382 * 1,577,495 3.76% 15,084 * 50,733 * 53,241 * 3,240 * 45,422 * 142,529 * 11,051 * 13,532 * 2,410,115 5.75% 2,682,386 6.55% 3,239,885 7.91% 3,434,707 8.39% *Denotes less than 1%.(1)Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person or entity exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable community property laws, to our knowledge, each stockholder identified in the table possesses sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by the stockholder. The number of shares beneficially owned by a person or entity includes shares of Common Stock subject to options held by that person or entity that are currently exercisable orexercisable within 60 days of October 18, 2019 and not subject to repurchase as of that date. Shares issuable pursuant to options and deferred stock units are deemed outstanding for calculating the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of calculating the percentage ownership of any other person.(2)Includes 101,221 unvested shares of restricted Common Stock that are subject to forfeiture.(3)Includes 84,014 unvested shares of restricted Common Stock that are subject to forfeiture.(4)Includes 53,914 unvested shares of restricted Common Stock that are subject to forfeiture.(5)Includes 40,540 unvested shares of restricted Common Stock that are subject to forfeiture.(6)Includes 271,957 unvested shares of restricted Common Stock and 946,817 shares of Common Stock underlying options that are currently exercisable or exercisable within 60 days of October 18, 2019. The unvested shares of restricted Common Stock are subject to forfeiture.(7)Includes 5,006 unvested shares of restricted Common Stock that are subject to forfeiture.(8)Includes 5,006 unvested shares of restricted Common Stock that are subject to forfeiture.(9)Includes 5,006 deferred stock units that are subject to forfeiture.(10)Includes 3,240 deferred stock units that are subject to forfeiture.(11)Includes 5,006 unvested shares of restricted Common Stock that are subject to forfeiture.(12)Includes 5,006 unvested shares of restricted Common Stock that are subject to forfeiture. Mr. Fink has voting and investment control with respect to the securities held by S&C Fink Living Trust.(13)Includes 5,006 deferred stock units that are subject to forfeiture.(14)Includes 5,006 deferred stock units that are subject to forfeiture.(15)Includes 571,670 unvested shares of restricted Common Stock, 18,258 deferred stock units and 946,817 shares of Common Stock underlying options that are currently exercisable or exercisable within 60 days of October 18, 2019. The unvested shares of restricted Common Stock and deferred stock units are subject to forfeiture.(16)Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 6, 2019. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.(17)Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 11, 2019. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.(18)Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 8, 2019. The address for Dimensional Fund Advisors, LP is Building One 6300, Bee Cave Road, Austin, TX 78746.DELINQUENT SECTION 16(a) REPORTSCompany'sCompany’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of the Company'sCompany’s equity and equity-derivative securities. Based solely upon a review of the copies of such reports and written representations from reporting persons, we believe that all Section 16(a) filing requirements applicable to our directors, officers directors and greater than 10% stockholders were complied with on a timely basis during fiscal 2019,2022, except late Forms 4 for Mr.Messrs. Chavous, Davis, thatMathis and Rhyu and Dr. McAlmont were filed on September 8, 2021 due to an administrative error. Each such late on August 16, 2018 and October 11, 2018 in connection with theForm 4 related to a single vesting of equity awards, dueresulting in the individual receiving shares of the Company’s common stock and certain shares being withheld to administrative error.executive officerbring any other business before the stockholders at an annual meeting must notify our corporate secretary of K12 who has servedthis proposal in such capacity since July 1, 2018, or any associate of any such director or officer,writing not later than 90 days nor earlier than 120 days prior to the knowledgefirst anniversary of the executive officerspreceding year’s annual meeting of K12,stockholders. Accordingly, for our 2023 annual meeting of stockholders, any notification must be made no earlier than August 11, 2023 and no later than September 10, 2023. If during the prior year we did not hold an annual meeting, or if the date of the meeting has any material interest, direct or indirect, through security holdings or otherwise, in any matter proposed tochanged more than 30 days from the prior year, then notice must be acted onreceived a reasonable time before we mail our proxy materials for the current year. The stockholder must be a stockholder of record at the Annual Meeting, which istime of giving notice must be entitled to vote at that annual meeting. The fact that the Company may not sharedinsist upon compliance with these requirements should not be construed as a waiver of our right to do so at any time in the future.all other stockholders or as is otherwise described in this Proxy Statement.DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESSSEC'sSEC’s rules permit the Company to deliver a single set of Annual Meeting materials to one address shared by two or more of the Company'sCompany’s stockholders. The Company has delivered only one Notice of Internet Availability of Proxy Materials or Proxy Statement and Annual Report (where paper copies were previously requested) to multiple stockholders who share an address, unless the Company received contrary instructions from the affected stockholders prior to the mailing date. The Company will promptly deliver, upon written or oral request, a separate copy of the Notice of Internet Availability of Proxy Materials or separate paper copies of all Annual Meeting materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the Proxy StatementAnnual Meeting materials or Annual Report,the materials for future meetings, contact K12Stride, Inc., 2300 Corporate Park11720 Plaza America Drive, Herndon,9th Floor, Reston, VA, 20171,20190, Attention: Investor Relations, or call us at (703) 483-7000.K12Stride, Inc., 2300 Corporate Park11720 Plaza America Drive, Herndon,9th Floor, Reston, VA, 20171,20190, Attention: Investor Relations, or call us at (703) 483-7000.intended for inclusionpresented in next year's proxy statement under Rule 14a-8this Proxy Statement will be brought before the Annual Meeting. However, if other matters are properly presented at the Annual Meeting or any adjournments or postponements of the Exchange Act shouldAnnual Meeting, then the proxy holders will vote in their discretion with respect to those matters.sentadjourned from time to our principal executive officestime upon the approval of the holders of shares representing a majority of the votes present in person or by proxy at the Annual Meeting, until a quorum is present. Any business may be transacted at the adjourned meeting which might have been transacted at the meeting originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. We do not currently intend to seek an adjournment of the Annual Meeting. mustmotivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities. Capitalized terms used in the Plan are defined in Article XI.receivedgranted Awards under the Plan, subject to the limitations described herein.120 calendar days prior to October 25, 2020. Accordingly, stockholder proposals must be received no later than June 27, 2020. As the rules100% of the SEC make clear, simply submitting a proposal doesFair Market Value on the grant date of the Option or Stock Appreciation Right. Notwithstanding the foregoing, if on the last day of the term of an Option or Stock Appreciation Right the Fair Market Value of one Share exceeds the applicable exercise or base price per Share, the Participant has not guarantee that itexercised the Option or Stock Appreciation Right and remains employed by the Company or one of its Subsidiaries and the Option or Stock Appreciation Right has not expired, the Option or Stock Appreciation Right shall be deemed to have been exercised by the Participant on such day with payment made by withholding Shares otherwise issuable in connection with its exercise. In such event, the Company shall deliver to the Participant the number of Shares for which the Option or Stock Appreciation Right was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price and required withholding taxes; provided, however, any fractional Share shall be settled in cash.includedexercisable at such times and as specified in the Proxy Statement.Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years. Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (i) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable current or former Service Provider due to any Company insider trading policy (including blackout periods) or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right unless the exercise would violate an Applicable Law. Notwithstanding theTable of ContentsTABLE OF CONTENTSAdditionally, our Bylaws provide that stockholders desiring to nominate a director or bring any other business beforestockholders at an annual meeting must notify our corporate secretary of this proposal in writing not later than 90 days nor earlier than 120 daysParticipant, prior to the first anniversaryend of the preceding year's annual meetingterm of stockholders. Accordingly,an Option or Stock Appreciation Right, violates the non-competition, non-solicitation or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right to exercise the Option or Stock Appreciation Right, as applicable, may be terminated by the Company and the Company may suspend the Participant’s right to exercise the Option or Stock Appreciation Right when it reasonably believes that the Participant has participated in any such violation. In addition, if, prior to the end of the term of an Option or Stock Appreciation Right, the Participant is given notice by the Company or any of its Subsidiaries of the termination of his or her employment or other relationship by the Company or any of its Subsidiaries for our 2020 annual meetingCause, and the effective date of stockholders, any notification must be made no earlier than August 15, 2020 and no later than September 14, 2020. If during the prior year we did not hold an annual meeting,such employment or ifother termination is subsequent to the date of the meeting has changed more than 30 daysdelivery of such notice, the right to exercise the Option or Stock Appreciation Right, as applicable, shall be suspended from the prior year, thentime of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s employment or other relationship shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment or other relationship (in which case the right to exercise the Option or Stock Appreciation Right, as applicable, shall terminate immediately upon the effective date of such termination of employment or other relationship).receivedpaid by:reasonable time before we mail our proxy materialspublic market for the current year. The stockholder must be a stockholder of record bothShares at the time of exercise, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;annual meeting. The fact that the Company may not insist upon compliance with these requirements should not be construed as a waiver of our right to do sodetermination, securities or interests representing at any time in the future.WHERE YOU CAN FIND MORE INFORMATIONWe are subject to the information filing requirementsleast 50% of the Exchange Act and,total combined voting power of all classes of securities or interests in accordance with the Exchange Act, file certain reports and other information with the SEC relating to our business, financial condition and other matters.Copies of these materials can be obtained, upon paymentone of the SEC's customary charges,other entities in such chain. writing to the SEC's principal office at 100 F Street, NE, Washington, DC 20549. The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and other information.Any person from whom proxies for the meeting are solicited may obtain, if not already received, from the Company, without charge, a copy of the Company's Annual Report on Form 10-K for fiscal 2019, by written request addressed to K12 Inc., 2300 Corporate Park Drive, Herndon, VA 20171, Attention: Investor Relations Department. The Annual Report on Form 10-K is not soliciting material and is not incorporated in this document by reference.In order to obtain any documents you request from the Company in timeassumption of, or in substitution or exchange for, awards previously granted, or the Annual Meeting, you must request the documents fromright or obligation to make future awards, in each case by a company acquired by the Company by Tuesday, December 3, 2019,or any Subsidiary or with which is eight business days prior tothe Company or any Subsidiary combines.of the Annual Meeting.You should rely only on the information contained in this documentParticipant ceases to vote your shares of Common Stock at the Annual Meeting. We have not authorized anyone to provide you with information that is different from what is contained in this document. This document is dated as of October 25, 2019. You should not assume that the information contained in this document is accurate as of any date other than that date, and the mailing of this document to stockholders does not create any implication to the contrary. This document does not constitutebe a solicitation of a proxy in any jurisdiction where, or to or from any person to whom, it is unlawful to make such solicitation in that jurisdiction.
Service Provider.MMMMMMMMMMMM MMMMMMMMMMMMMMM C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000004 ENDORSEMENT_LINE______________ SACKPACK_____________ Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 received by 1:00am, Central Time, on December 13, 2019 Online GIof ntoo welwewct.rinovneicstvoortviontge,.com/LRN or scan delete QR code and control # the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/LRN Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: For Withhold For Withhold For Withhold 01 - Aida M. Alvarez 02 - Craig R. Barrett 03 - Guillermo Bron 04 - Robert L. Cohen 05 - Nathaniel A. Davis 06 - John M. Engler 07 - Steven B. Fink 08 - Robert E. Knowling, Jr. 09 - Liza McFadden ForAgainst Abstain ForAgainst Abstain 2. TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATIONTABLE OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. 3. RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JUNE 30, 2020. PLEASE SIGN name(s) exactly as shown above. Where there is more than one holder, each should sign. When signing as an attorney, administrator, executor, guardian or trustee or in another representative capacity, please add your title as such. If executed by a corporation or partnership, the Proxy should be executed in the full corporate or partnership name and signed by a duly authorized person, stating his or her title or authority. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. MMMMMMM C 1234567890 J N T 3 0 5 3 1 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 9 2 D V 4 034CMC MMMMMMMMM B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2 and 3. 2019 Annual Meeting Proxy Card1234 5678 9012 345CONTENTS
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders. The material is available at: www.edocumentview.com/LRN q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + Notice of 2019 Annual Meeting of Stockholders This Proxy is solicited by the Board of Directors for the Annual Meeting of Stockholders on December 13, 2019 at 10:00 A.M. The above signed stockholder of K12 Inc., a Delaware corporation (the “Company”), hereby constitutes and appoints Nathaniel A. Davis and Vincent W. Mathis, and each of them, with the power to act without the other and with the power of substitution, as proxies (the “Proxy Holders”) and attorneys-in-fact for the above signed, to attend the annual meeting of stockholders of the Company to be held at the law firm of Latham & Watkins LLP, located at 555 Eleventh Street, NW, Suite 1000, Washington, DC 20004-1304, on December 13, 2019 at 10:00 A.M., Eastern Time, and any adjournment(s), continuation(s) or postponement(s) thereof, to cast on behalf of the above signed all votes that the above signed is entitled to cast at such annual meeting and in their discretion, to vote upon such other business as may properly come before the annual meeting and otherwise to represent the above signed at the annual meeting with all powers possessed by the above signed if personally present at the annual meeting. This proxy when properly executed will be voted in the manner directed herein by the above signed stockholder. If no instruction is indicated but the Proxy Card is signed, this Proxy Card will be voted “FOR” the election of the Board of Directors nominees named in the proxy statement; “FOR” the approval, on a non-binding advisory basis, of the compensation of the named executive officers of the Company; and “FOR” the ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2020. Stockholders who plan to attend the annual meeting may revoke their Proxy by attending and casting their vote at the annual meeting in person. PLEASE ACT PROMPTLY. PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. The above signed hereby acknowledge(s) receipt of a copy of the accompanying Notice of 2019 Annual Meeting of Stockholders and access to the proxy statement with respect thereto and hereby revokes any proxy or proxies heretofore given with respect to such annual meeting. (Items to be voted appear on reverse side) Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. + C Non-Voting Items REVOCABLE PROXY – K12 INC. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/LRN
