| Small & Micro Cap project

K12’s CEO employment amendment agreement caught our attention.

by | Oct 15, 2019

On August 15, 2019, the company amended the employment agreement of Nathaniel A. Davis, the company’s CEO. The company awarded a one-time issue of performance-based restricted stock, valued at $10 million that will vest over three years, subject to the company attaining its free cash flow goals for 2020, 2021 and 2022.

  • One-third of the shares subject to the Stock Award (the “First Tranche”) will vest on the two-year anniversary of the date of grant of the Stock Award if K12’s Free Cash Flow for fiscal year 2020 equals or exceeds $60,000,000.
  • One-third of the shares subject to the Stock Award (the “Second Tranche”) will vest on the two-year anniversary of the date of grant of the Stock Award if K12’s Free Cash Flow for fiscal year 2021 equals or exceeds $65,000,000.
  • One-third of the shares subject to the Stock Award (the “Third Tranche”) will vest on the three year anniversary of the date of grant of the Stock Award if either (i) K12’s Free Cash Flow for fiscal year 2022 equals or exceeds $70,000,000, or (ii) K12’s cumulative aggregate Free Cash Flow for fiscal years 2020, 2021 and 2022 equals or exceeds $195,000,000.
  • If the First Tranche or Second Tranche shares do not vest pursuant to Section 2.a or 2.b above, as applicable, and K12’s cumulative aggregate Free Cash Flow for fiscal years 2020, 2021 and 2022 equals or exceeds $195,000,000, then such shares will vest on the three-year anniversary of the date of grant of the Stock Award.

Source: https://www.sec.gov/Archives/edgar/data/1157408/000115752319001938/a52087335ex10_1.htm

 

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