S-1/A

As filed with the Securities and Exchange Commission on December 12, 2007

Registration No. 333-144894

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 7

to

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

K12 INC.

(Exact name of registrant as specified in its charter)

Delaware	8211	95-4774688
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Number)	(IRS Employer Identification No.)

K12 Inc.
2300 Corporate Park Drive
Herndon, VA 20171
(703) 483-7000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Ronald J. Packard
Chief Executive Officer

K12 Inc.

2300 Corporate Park Drive

Herndon, VA 20171

(703) 483-7000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

William P. O’Neill, Esq.	Howard D. Polsky, Esq.	Richard D. Truesdell, Jr., Esq.
Blaise F. Brennan, Esq.	Senior Vice President, General Counsel and Secretary	Davis Polk & Wardwell
Latham & Watkins LLP	K12 Inc.	450 Lexington Avenue
555 Eleventh Street, N.W	2300 Corporate Park Drive	New York, NY 10017
Washington, D.C. 20004	Herndon, VA 20171	(212) 450-4674
(202) 637-2200	(703) 483-7000

Approximate date of commencement of proposed sale to the public:  As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering Price Per	Aggregate Offering	Amount of
Securities to be Registered	Registered(a)	Share(b)	Price(b)	Registration Fee(c)
Common Stock, $0.0001 par value	6,900,000	$18.00	$124,200,000	$3,812.94

(a)	Including shares of common stock which may be purchased by the underwriters to cover overallotments, if any.
(b)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) promulgated under the Securities Act of 1933.
(c)	Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 13.   Other Expenses of Issuance and Distribution

Set forth below is a table of the registration fee for the Securities and Exchange Commission, the filing fee for the National Association of Securities Dealers, Inc., the listing fee for NYSE Arca and estimates of all other expenses to be incurred in connection with the issuance and distribution of the securities described in the registration statement, other than underwriting discounts and commissions:

SEC registration fee	$	3,813
NYSE Arca listing fee		100,000
NASD fee		17,750
Printing and engraving expenses		500,000
Legal fees and expenses		1,600,000
Accounting fees and expenses		750,000
Transfer agent and registrar fees		5,000
Miscellaneous		23,437
Total	$	3,000,000

* To be completed by amendment.

Item 14.   Indemnification of Directors and Officers

K12 Inc. is incorporated under the laws of the State of Delaware. Reference is made to Section 102(b)(7) of the Delaware General Corporation Law, or DGCL, which enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director for violations of the director’s fiduciary duty, except (1) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) pursuant to Section 174 of the DGCL, which provides for liability of directors for unlawful payments of dividends of unlawful stock purchase or redemptions or (4) for any transaction from which a director derived an improper personal benefit.

Reference is also made to Section 145 of the DGCL, which provides that a corporation may indemnify any person, including an officer or director, who is, or is threatened to be made, party to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of such corporation, by reason of the fact that such person was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer, director, employee or agent acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the corporation’s best interest and, for criminal proceedings, had no reasonable cause to believe that his conduct was unlawful. A Delaware corporation may indemnify any officer or director in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses that such officer or director actually and reasonably incurred.

Our Amended and Restated Certificate of Incorporation provides for, and upon consummation of this offering, our amended and restated bylaws will provide for indemnification of the officers and directors to the full extent permitted by applicable law.

The Underwriting Agreement provides for indemnification by the underwriters of the registrant and its officers and directors for certain liabilities arising under the Securities Act of 1933, as amended, or otherwise.

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Item 15.   Recent Sales of Unregistered Securities

Set forth in chronological order is information regarding all securities sold and employee stock options granted from June 2004 to date by the Company. Also included is the consideration, if any, received for such securities, and information relating to the section of the Securities Act and the rules of the Securities and Exchange Commission pursuant to which the following issuances were exempt from registration. None of these securities were registered under the Securities Act. No award of options involved any sale under the Securities Act. No sale of securities involved the use of an underwriter and no commissions were paid in connection with the sales of any securities.

1. At various times during the period from July 2004 through July 2007, we granted options to purchase an aggregate of 2,432,206 shares of common stock to current and prior employees and directors at a weighted average exercise price of $10.66 per share.

2. In addition to the foregoing option grants, at various times during the period from July 2004 through July 2007, we granted options to purchase 1,441,168 shares of our common stock to current and prior employees related to stand-alone agreements at a weighted average exercise price of $12.35 per share.

3. In December 2003, we issued and sold an aggregate of 18,656,716 shares of Series C Preferred Stock. Pursuant to the payment in kind dividend feature of Series C Preferred Stock, we have issued an aggregate of 12,399,833 additional shares of Series C Preferred Stock through a series of stock dividends to existing Series C Preferred stockholders from January 2005 through January 2007.

4. In October 2007, we issued an aggregate of 196,078 shares of common stock in connection with our acquisition of Power-Glide Language Courses, Inc. to the stockholders thereof.

5. On November 6, 2007, the Company entered into an agreement to sell to a non-U.S. person in a transaction outside the United States in reliance upon Regulation S under the Securities Act, concurrently with and contingent upon the closing of the initial public offering and at the initial public offering price, $15,000,000 worth of shares of the Company’s common stock.

The issuances of the securities described in paragraph 1 were exempt from registration under the Securities Act under Rule 701, as transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under such Rule 701. The recipients of such options and common stock were related to compensation. Appropriate legends were affixed to any share certificates issued in such transactions. All recipients either received adequate information from us or had adequate access, through their employment with us or otherwise, to information about us.

The issuances of the securities described in paragraphs 2, 3 and 4 were exempt from registration under the Securities Act in reliance on Section 4(2) because the issuance of securities to recipients did not involve a public offering. The recipient of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to resale or distribution thereof, and appropriate legends were affixed to share certificates and warrants issued in such transactions. Each of the recipients of securities in the transactions described in paragraphs 2, 3 and 4 were accredited or sophisticated investors and had adequate access, through employment, business or other relationships, to information about us.

Upon issuance and sale, the securities described in paragraph 5 will be exempt from registration under the Securities Act pursuant to the terms of Regulation S promulgated thereunder.

All of the shares of Series C Preferred Stock described in paragraph 3 will automatically convert into shares of common stock prior to completion of this offering.

Item 16.   Exhibits and Financial Statement Schedule

(a) Exhibits

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Exhibit No.			Description of Exhibit
	1	.1*	Form of Underwriting Agreement
	3	.1*	Amended and Restated Certificate of Incorporation
	3	.2*	Bylaws (as amended)
	3	.3*	Certificate of Amendment, dated December 15, 2006, to Second Amended and Restated Certificate of Incorporation
	3	.4*	Certificate of Amendment to Second Amended and Restated Certificate of Incorporation dated November 2, 2007, and Certificate of Correction related thereto
	3	.5*	Form of Third Amended and Restated Certificate of Incorporation to be effective upon completion of this offering
	3	.6*	Form of Amended and Restated Bylaws to be effective upon completion of this offering
	4	.1*	Form of stock certificate of common stock
	4	.2*	Amended and Restated Stock Option Plan and Amendment thereto
	4	.3*	Form of Stock Option Contract — Employee
	4	.4*	Form of Stock Option Contract — Director
	4	.5*	Form of Second Amended and Restated Stockholders Agreement
	4	.6*	Form of Common Stock Warrant Agreement
	4	.7*	Form of Series B Convertible Preferred Stock Warrant Agreement
	4	.8*	2007 Equity Incentive Award Plan
	4	.9*	2007 Employee Stock Purchase Plan
	5	.1*	Opinion of Latham & Watkins LLP
	10	.1*	Revolving Credit Agreement and Certain Other Loan Documents by and among K12 Inc., School Leasing Corporation, American School Supply Corporation and PNC Bank, N.A.
	10	.2*	Stockholders Agreement dated as of April 26, 2000 (as amended) by and among Premierschool.com, Inc., Knowledge Universe Learning, Inc. and Ronald J. Packard
	10	.3*	Stockholders Agreement dated as of February 20, 2000 (as amended) by and among Premierschool.com, Inc., Knowledge Universe Learning, Inc. and William J. Bennett
	10	.4*	Series B Convertible Preferred Stock Warrant Agreement of Mollusk Holdings LLC
	10	.5*†	Amended and Restated Stock Option Agreement of Ronald J. Packard dated as of July 12, 2007
	10	.6*	Stock Option Agreement of Bruce J. Davis
	10	.7*	Stock Option Agreement of John Baule
	10	.8*	Stock Option Agreement of Bror Saxberg
	10	.9*†	Amended and Restated Employment Agreement of Ronald J. Packard
	10	.10*	Employment Agreement of John F. Baule and Amendment thereto
	10	.11*	Employment Agreement of Bruce J. Davis
	10	.12*	Employment Agreement of Bror V. H. Saxberg
	10	.13*	Deed of Lease by and between ACP/2300 Corporate Park Drive, LLC and K12 Inc.
	10	.14*	Sublease between France Telecom Long Distance USA, LLC and K12 Inc.
	10	.15*	Employment Agreement of Celia M. Stokes
	10	.16*	Employment Agreement of Howard D. Polsky
	10	.17*†	Stock Option Agreement of Ronald J. Packard dated as of July 12, 2007
	10	.18*	First Amendment to Employment Agreement of Howard D. Polsky

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Exhibit No.			Description of Exhibit
	10	.19*	Amendment No.1 to Revolving Credit Agreement by and among K12 Inc., School Leasing Corporation, American School Supply Corporation and PNC Bank N.A.
	10	.20*	Stock Subscription Agreement dated as of November 1, 2007 by and among K12 Inc. and KB Education Investments Limited
	10	.21*	Second Amended and Restated Educational Products, and Administrative, and Technology Services Agreement between the Ohio Virtual Academy and K12 Ohio L.L.C.
	10	.22	Stock Option Agreement of John Baule effective as of June 1, 2006
	10	.23	Stock Option Agreement of Richard N. Rasmus effective as of June 15, 2005
	21	.1*	Subsidiaries of K12 Inc.
	23	.1*	Consent of BDO Seidman, LLP
	23	.2*	Consent of Latham & Watkins LLP (included in Exhibit 5.1)
	24	.1*	Power of Attorney (excluding Dr. Mary H. Futrell)
	24	.2*	Power of Attorney of Dr. Mary H. Futrell

*	Previously filed.
†	Portions omitted pursuant to a request for confidential treatment. The omitted information has been filed separately with the Securities and Exchange Commission.

(b) Financial Statement Schedules:

See Schedule II — “Valuation and Qualifying Accounts” contained on page F-37. All other schedules are omitted as the information is not required or is included in the Registrant’s financial statements and related notes.

Item 17.   Undertakings

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issues.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement, certificates in such denomination and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

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Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Herndon, Commonwealth of Virginia on December 12, 2007.

K12 INC.

By:  /s/  Ronald J. Packard

Name:	Ronald J. Packard
Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature		Title	Date
/s/  Ronald J. Packard Ronald J. Packard		Chief Executive Officer (Principal Executive Officer)	December 12, 2007
/s/  John F. Baule John F. Baule		Chief Operating Officer and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	December 12, 2007
/s/  Andrew H. Tisch* Andrew H. Tisch		Chairman of the Board and Director	December 12, 2007
/s/  Guillermo Bron* Guillermo Bron		Director	December 12, 2007
/s/  Liza A. Boyd* Liza A. Boyd		Director	December 12, 2007
/s/  Steven B. Fink* Steven B. Fink		Director	December 12, 2007
/s/  Dr. Mary H. Futrell* Dr. Mary H. Futrell		Director	December 12, 2007
/s/  Thomas J. Wilford* Thomas J. Wilford		Director	December 12, 2007
*By:	/s/  Howard D. Polsky Howard D. Polsky	Attorney-in-Fact

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EX-10.22

Exhibit 10.22

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (“Agreement”) is entered into effective as of June 1, 2006 by and between K12 INC., a Delaware corporation (the “Company”), and JOHN BAULE (the “Optionee”).

RECITALS

     WHEREAS, the Company and the Optionee mutually desire that the Company grant Optionee stock options to purchase shares of Common Stock of the Company to provide an incentive for the Optionee’s continuous employment with the Company and to motivate the Optionee to increase value for the Company’s stockholders.

     NOW THEREFORE, the parties agree as follows:

     1. Grant of Stock Options. Subject to the terms and conditions hereinafter set forth, the Company hereby grants to the Optionee an option to purchase up to Four Hundred Thousand (400,000) shares of Common Stock of the Company (the “Stock”) at an option exercise price of One Dollar and Fifty Cents ($1.50) per share (the “Options”). The shares of Stock purchasable upon exercise of the Options are hereinafter sometimes collectively referred to as the “Option Shares.” The Options are not intended to be, and shall not be treated as, incentive stock options (as such term is defined under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)). Optionee understands and acknowledges that the Company is granting the Options hereunder outside of, and not as a part of, the K12 Inc. Amended and Restated Stock Option Plan. The Company shall reserve sufficient shares of Stock from its authorized but unissued and not outstanding shares of Stock as set forth in its Certificate of Incorporation, for purposes of issuing Option Shares to the Optionee upon the exercise of the Options in accordance with the terms set forth herein.

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

(a)	on and after June 1, 2007, One Hundred Thousand (100,000) Option Shares;
(b)	on and after June 1, 2008, One Hundred Thousand (100,000) Option Shares;
(c)	on and after June 1, 2009, One Hundred Thousand (100,000) Option Shares; and
(d)	on and after June 1, 2010, One Hundred Thousand (100,000) Option Shares.

     Notwithstanding the foregoing, if a Vesting Acceleration Event occurs prior to the date that all Options have vested pursuant to the above vesting schedule, fifty percent (50%) of the Options that have not yet vested as of the date of the Vesting Acceleration Event shall automatically accelerate and become immediately vested and exercisable as of the date of the Vesting Acceleration Event.

     As used herein, a “Vesting Acceleration Event” means the occurrence of any of the following events while Optionee is employed with the Company: (i) a sale of all or substantially all of the assets of the Company, or (ii) a merger or consolidation of the Company into or with another entity that results in the Company’s stockholders immediately prior to such transaction owning less than fifty percent (50%) of the voting power of the surviving entity (or its parent) immediately after such transaction, or (iii) a sale of outstanding securities of the Company by stockholders of the Company (excluding any sale in connection with any public offering) that results in the Company’s stockholders immediately prior to such transaction owning less than fifty percent (50%) of the Company’s voting power immediately after such transaction.

3. Termination of Options.

     (a) Subject to earlier termination as provided in the other provisions of this Agreement, the Options and all rights hereunder with respect thereto, to the extent such rights shall not have been exercised, shall terminate and become null and void on December 31, 2013 (the “Option Term”).

     (b) Upon termination of Optionee’s employment or engagement with the Company by reason of Optionee’s death, the Options held by Optionee to the extent not exercisable on the date of Optionee’s death shall terminate on the date of Optionee’s death. The Options, to the extent exercisable on the date of Optionee’s death, maybe exercised by Optionee’s estate or beneficiaries, personal representative or heirs, provided that such exercise occurs prior to the earlier of: (i) one hundred eighty (180) days after the date of Optionee’s death, or (ii) the expiration of the Option Term. The Options held by Optionee to the extent exercisable on the date of Optionee’s death shall terminate at the end of the earliest of the periods specified in clauses (i) and (ii) of the immediately preceding sentence.

     (c) Upon termination of Optionee’s employment or engagement with the Company by reason of “permanent disability” (as determined by the Company’s Compensation Committee, or if Optionee has an employment or engagement agreement with the Company, then as determined pursuant to the applicable provisions of said agreement, if any), the Options held by Optionee to the extent not exercisable on the date of Optionee’s termination shall terminate on the date of Optionee’s termination. The Options, to the extent exercisable on the date of Optionee’s termination, may be exercised by Optionee or personal representatives, provided that such exercise occurs prior to the earlier of: (i) one hundred eighty (180) days after the date of Optionee’s termination, or (ii) the expiration of the Option Term. The Options held by Optionee to the extent exercisable on the date of Optionee’s termination shall terminate at the

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end of the earliest of the periods specified in clauses (i) and (ii) of the immediately preceding sentence.

     (d) Upon Optionee’s termination of employment or engagement with the Company either by resignation or upon termination of Optionee’s employment or engagement with the Company for “cause” (as determined by the Company’s Compensation Committee, or if Optionee has an employment or engagement agreement with the Company, then as determined pursuant to the applicable provisions of said agreement, if any), all the Options held by Optionee to the extent not exercisable on the date of Optionee’s termination shall terminate on such date, and all Options held by Optionee to the extent exercisable on such date shall terminate on the date of Optionee’s termination.

     (e) If Optionee’s employment or engagement with the Company terminates for any reason other than as described in paragraphs (b), (c) or (d) of this Section 3, then the Options held by Optionee to the extent not exercisable on the date of Optionee’s termination shall terminate on the date of Optionee’s termination. The Options, to the extent exercisable on the date of Optionee’s termination, may be exercised by Optionee, provided that such exercise occurs prior to the earlier of: (i) ninety (90) days after the date of Optionee’s termination, or (ii) the expiration of the Option Term. The Options held by Optionee to the extent exercisable on the date of Optionee’s termination shall terminate at the end of the earliest of the periods specified in clauses (i) and (ii) of the immediately preceding sentence.

4. Exercise of Options.

     (a) The Optionee may exercise the Options with respect to all or any part of the number of Option Shares then exercisable hereunder from time to time by giving the Chief Financial Officer of the Company written notice of exercise. Each such notice of exercise shall specify the number of Option Shares as to which the Options are to be exercised and the date of exercise thereof, which date shall be at least five days (but not more than fifteen days) after the giving of such notice unless an earlier time shall have been mutually agreed upon by Optionee and the Company.

     (b) Full payment of the option price for the Option Shares being purchased by the Optionee shall be made by the Optionee in cash (in U.S. dollars) on or prior to the date of exercise specified in the notice of exercise.

     (c) The Company shall cause to be delivered to the Optionee a certificate or certificates for the Option Shares then being purchased (out of theretofore unissued Stock or reacquired Stock, as the Company may elect) as soon as is reasonably practicable after the full payment for such Option Shares and satisfaction of all other conditions to exercise set forth in this Agreement.

     (d) If the Optionee fails to pay for any of the Option Shares specified in a notice of exercise or fails to accept delivery thereof, the Optionee’s right to purchase such Option Shares shall terminate.

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     (e) Notwithstanding any other provision of this Agreement, the Optionee’s right to exercise Options and be issued Option Shares is subject to the conditions set forth in this Section 4(e) in addition to any other conditions set forth elsewhere in this Agreement. The Optionee may not exercise any Options in whole or in part or be issued any Option Shares unless (i) the transaction is in compliance with all applicable state and Federal securities laws, (ii) the transaction is exempt from the qualification and registration requirements of applicable state and Federal securities laws, and (iii) the Company and the Optionee comply with any requirements applicable to the transaction, if any, that are contained in any credit or loan agreement to which the Company is a party. In addition, the obligation of the Company to deliver Stock shall be subject to the condition that if at any time the Company shall determine that the listing, registration, or qualification of the Options or the Option Shares upon any securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Options or the issuance or purchase of Stock thereunder, the Options may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors of the Company.

     5. Adjustment of and Changes in Stock of the Company. In the event of any change in the outstanding shares of Stock by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination, exchange of shares, or the like, the Company’s Compensation Committee shall appropriately adjust the number and kind of shares subject to the Options and the option price.

     6. No Rights of Stockholders. Neither the Optionee nor any personal representative shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any shares of Stock purchasable or issuable upon the exercise of the Options, in whole or in part, prior to the date certificates for shares of Stock are issued to the Optionee.

     7. Non-Transferability of Options. During the Optionee’s lifetime, the Options hereunder shall be exercisable only by the Optionee or any guardian or legal representative of the Optionee, and the Options shall not be transferable except, in case of the death of the Optionee, by will or the laws of descent and distribution, nor shall the Options be subject to attachment, execution, or other similar process. In the event of (a) any attempt by the Optionee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Options, except as provided for herein, or (b) the levy of any attachment, execution, or similar process upon the rights or interest hereby conferred, the Company may terminate the Options by notice to the Optionee and they shall thereupon become null and void.

     8. Employment/Engagement Not Affected. Neither the granting of the Options nor exercise thereof shall be construed as granting to the Optionee any right with respect to continuance of employment or engagement with the Company or affect any right which the Company may have to terminate the employment or engagement of Optionee.

     9. Amendment of Options. The Options may be amended by the Company’s Compensation Committee at any time (i) if the Company’s Compensation Committee

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determines, in its reasonable discretion, that amendment is necessary or advisable in the light of any addition to or change in the Internal Revenue Code of 1986, as amended, or in the regulations issued thereunder, or any federal or state securities law or other law or regulation, which change occurs after the date of grant of an Option and by its terms applies to the Option; or (ii) other than in the circumstances described in clause (i), with the consent of the Optionee.

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

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

     (a) Except as otherwise expressly set forth in this Section 11, Optionee shall not, voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise, sell, transfer, assign, hypothecate, pledge or in any way alienate any Option Shares now or hereafter owned by the Optionee or any right or interest therein (hereinafter, a “Transfer”) without the prior written consent of the Company’s Compensation Committee, which the Compensation Committee may withhold in its sole discretion. Any attempt to consummate a Transfer in violation of this Agreement shall be null and void.

     (b) Notwithstanding the restrictions contained in Section 11(a) above, (i) Optionee may Transfer Optionee’s Option Shares to the Company or a designee of the Company, or (ii) Optionee may contribute Optionee’s Option Shares to a trust formed solely for the benefit of Optionee and/or Optionee’s immediate family, or (iii) upon the death of Optionee, Optionee’s Option Shares may be transferred to Optionee’s estate, personal representative or heirs by will or the laws of descent and distribution; provided, however, that as a condition to any transfer under clause (i), (ii) or (iii) above, the transferee shall hold the Option Shares subject to the terms and conditions of this Agreement and the transferee shall execute and deliver to the Company an agreement in form and substance satisfactory to the Company agreeing to be bound by the terms and conditions of this Agreement.

     (c) The Company shall have the option (the “Repurchase Option”) exercisable at any time after six (6) months and one (1) day after the date of termination of Optionee’s employment or engagement with the Company for any reason, including, but not limited to, termination with or without cause, death, permanent disability or voluntary termination, to repurchase all or any portion of the Option Shares held by Optionee (or by a permitted transferee or Optionee’s estate or legal representative, if applicable). If the Company elects to exercise the Repurchase Option in whole or in part, it shall give written notice of such election (the “Repurchase Notice”) to Optionee (or permitted transferee or Optionee’s estate or legal representative, if applicable). The Company shall pay to Optionee (or permitted transferee or

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Optionee’s estate or legal representative, if applicable) in cash the “fair market value” of the Option Shares being purchased (determined as provided below) within thirty (30) days after the later of: (i) the date of the Repurchase Notice, or (ii) the final determination of fair market value. Optionee agrees to execute (and directs Optionee’s permitted transferee or estate or legal representative to execute, if applicable) such documents and instruments as are reasonably necessary to effectuate such purchase. The Company may exercise the Repurchase Option as many times as the Company may decide. For purposes hereof, “fair market value” of the Option Shares shall be determined as of the last day of the Company’s fiscal quarter ended immediately preceding the date of the Repurchase Notice and means (i) the average closing price of a share of Common Stock of the Company on the principal exchange on which such shares are then trading, if any (or as reported on any composite index which includes such principal exchange), on the ten most recent trading days immediately prior to such date, or (ii) if such shares are not traded on an exchange but are quoted on NASDAQ or a successor quotation system, the average mean between the closing representative bid and asked prices for such shares on the ten most recent trading days immediately prior to such date as reported by NASDAQ or such successor quotation system; or (iii) in the event that clauses (i) and (ii) above are inapplicable, the “fair market value” shall be determined in good faith by the Board of Directors of the Company.

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

     (e) All Option Shares now or hereafter owned by Optionee shall be subject to all of the terms and conditions of this Agreement. All certificates representing such Option Shares shall contain legends to the following effect:

ANY SALE, TRANSFER, PLEDGE, ASSIGNMENT OR ENCUMBRANCE OF THIS SECURITY IS SUBJECT TO THE PROVISIONS OF A STOCK OPTION AGREEMENT BETWEEN THE CORPORATION AND THE STOCKHOLDER, DATED AS OF JUNE 1, 2006, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION.

THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN QUALIFIED OR REGISTERED UNDER ANY STATE OR FEDERAL SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF EITHER QUALIFICATION AND REGISTRATION UNDER STATE AND FEDERAL SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED.

     (f) The provisions of Sections 11(a)through 11(d) shall terminate effective upon the consummation an underwritten public offering of shares of Stock by the Company that

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results in such shares being listed for trading on a national securities exchange or being authorized for trading on the NASDAQ National Market System.

     12. Representations.

     (a) By executing this Stock Option Agreement, Optionee represents and warrants to the Company that Optionee is acquiring the Options for Optionee’s own account, for investment purposes only and not with the intent of distributing, transferring or selling all or any part of the Options.

     (b) In connection with the exercise of any portion of the Options, Optionee represents and warrants to the Company as of the date of such exercise as follows:

          (i) Optionee is acquiring the Stock for Optionee’s own account, for investment purposes only and not with the intent of distributing, transferring or selling all or any part thereof in violation of applicable securities laws.

          (ii) Optionee acknowledges that the Stock has not been registered under any Federal or state securities laws and is being issued pursuant to one or more exemptions from the registration and qualification requirements of such securities laws.

          (iii) Optionee acknowledges that the Company is under no obligation to register or qualify the Stock and that the Stock may not be sold unless it is so registered and qualified or an exemption from registration and qualification is available.

     13. Lock Up In Connection with Public Offering.

     (a) In order to induce the underwriters that may participate in a public offering of the Company’s equity securities to continue their efforts in connection with such a public offering, the Optionee, during the period commencing 30 days prior to and ending 180 days after the effective date of any underwritten public offering of the Company’s equity securities (except as part of such underwritten registration):

          (i) agrees not to (x) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Stock or any securities convertible into or exercisable or exchangeable for Stock (including, without limitation, Stock or securities convertible into or exercisable or exchangeable for Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission) or (y) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any Stock (regardless of whether any of the transactions described in clause (x) or (y) is to be settled by the delivery of Stock, or such other securities, in cash or otherwise), without prior written consent of the lead managing underwriter of such public offering;

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          (ii) agrees not to make any demand for, or exercise any right with respect to, the registration of any Stock or any securities convertible into or exercisable or exchangeable for Stock, without the prior written consent of the lead underwriter; and

          (iii) authorizes the Company to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on the transfer books and records of the Company with respect to any Stock and any securities convertible into or exercisable or exchangeable for Stock for which the Optionee is the record holder and, in the case of any such shares or securities for which the Optionee is the beneficial but not the record holder, agrees to cause the record holder to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on such books and records with respect to such shares or securities.

     Upon the Company’s request, the Optionee agrees to execute any additional documents necessary or desirable to confirm Optionee’s obligations set forth above and/or in connection with the enforcement of the foregoing provisions. The foregoing provisions shall survive the death or incapacity of the Option and any obligations of the Optionee set forth above shall be binding upon the heirs, personal representatives, successors and assigns of the Optionee.

     14. Notice. Any notice to the Company provided for in this instrument shall be addressed as follows:

K12 Inc.
2300 Corporate Park Drive, Suite 200
Herndon, Virginia 20171
Attention: Compensation Committee

With a copy to:

K12 Inc.
2300 Corporate Park Drive, Suite 200
Herndon, Virginia 20171
Attention: Office of the General Counsel

     And any notice to the Optionee shall be addressed to the Optionee at the current address shown on the records of the Company.

     Any notice shall be deemed to be duly given if and when properly addressed and posted by registered or certified mail, postage prepaid.

     15. Income Tax Consequences. Optionee acknowledges, represents, and warrants that the Company has made no representations whatsoever to Optionee concerning the specific Federal and/or state income tax and alternative minimum tax consequences to Optionee of the Options granted hereunder or the exercise thereof, and Optionee shall be responsible for consulting with Optionee’s personal tax advisor regarding such matters. Without limiting the generality of the foregoing, Optionee acknowledges that pursuant to Code Section 409A, an option that is granted with a per share exercise price that is determined by the Internal Revenue

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Service (the “IRS”) to be less than the fair market value of a share of Stock on the date of grant (a “discount option”) may be considered “deferred compensation.” An option that is a “discount option” may result in (i) income recognition by the Optionee prior to the exercise of the option, (ii) an additional twenty percent (20%) tax payable by Optionee, and (iii) potential penalty and interest charges payable by Optionee. Optionee acknowledges that the Company cannot and has not guaranteed that in the event of an examination the IRS will agree that the per share exercise price of the Stock that is subject to this Option equals or exceeds the fair market value of a share of Stock on the date of grant. Optionee agrees that if the IRS determines that the Option was granted with a per share exercise price that was less than the fair market value of a share of Stock on the date of grant, Optionee will be solely responsible for all consequences to Optionee related to such a determination.

     16. Withholding Taxes. Whenever the Company issues or transfers shares of Stock hereunder, the Company shall have the right to require the Optionee to remit to the Company an amount sufficient to satisfy any Federal, state, and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. Alternatively, the Company may (but shall not be obligated to) issue or transfer such shares of Stock net of the number of shares sufficient to satisfy the withholding tax requirements. For withholding tax purposes, the shares of Stock shall be valued on the date the withholding obligation is incurred.

     17. Governing Law. The validity, construction, interpretation, and effect of this Agreement shall exclusively be governed by and determined in accordance with the laws of the State of Delaware (without regard to conflicts of law principles), except to the extent preempted by Federal law, which shall to such extent govern.

     IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement effective as of the date first set forth above.

“Company”   K12 INC. a Delaware corporation
By:	/s/ Andrew Tisch

“Optionee”
 

/s/ John Baule 

John Baule

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EX-10.23

Exhibit 10.23

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (“Agreement”) is entered into effective as of June 16, 2005 by and between K12 INC., a Delaware corporation (the “Company”), and RICHARD RASMUS (the “Optionee”).

RECITALS

     WHEREAS, the Company desires to grant to the Optionee stock options to purchase shares of Common Stock of the Company to motivate the Optionee to increase value for the Company’s stockholders.

     NOW THEREFORE, the parties agree as follows:

     1. Grant of Stock Options. Subject to the terms and conditions hereinafter set forth, the Company, with the approval and at the direction of the Company’s Compensation Committee, hereby grants to the Optionee an option to purchase up to Eight Hundred Thousand (800,000) shares of Common Stock of the Company (the “Stock”) at an option exercise price of One Dollar and Thirty Four Cents ($1.34) per share (the “Options”). The shares of Stock purchasable upon exercise of the Options are hereinafter sometimes collectively referred to as the “Option Shares.” The Options are not intended to be, and shall not be treated as, incentive stock options (as such term is defined under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)). Optionee understands and acknowledges that the Company is granting the Options hereunder outside of, and not as a part of, the K12 Inc. Amended and Restated Stock Option Plan. The Company shall reserve sufficient shares of Stock from its authorized but unissued and not outstanding shares of Stock as set forth in its Certificate of Incorporation, for purposes of issuing Option Shares to the Optionee upon the exercise of the Options in accordance with the terms set forth herein.

     2. Fully Vested Options. The Options are fully vested and immediately exercisable, subject to the other terms of this Agreement.

     3. Termination of Options.

     (a) Subject to earlier termination as provided in the other provisions of this Agreement, the Options and all rights hereunder with respect thereto, to the extent such rights shall not have been exercised, shall terminate and become null and void on September 21, 2010 (the “Option Term”).

     (b) Upon termination of Optionee’s employment or engagement with the Company by reason of Optionee’s death, the unexercised Options held by Optionee may be exercised by Optionee’s estate, provided that such exercise occurs prior to the earlier of: (i) three hundred sixty five (365) days after the date of Optionee’s death, or (ii)

the expiration of the Option Term. The Options shall terminate at the end of the earliest of the periods specified in clauses (i) and (ii) of the immediately preceding sentence.

     (c) Upon termination of Optionee’s employment or engagement with the Company by reason of “permanent disability” (as determined by the Board of Directors of the Company, or if Optionee has an employment or engagement agreement with the Company, then as determined pursuant to the applicable provisions of said agreement, if any), the unexercised Options held by Optionee may be exercised by Optionee, provided that such exercise occurs prior to the earlier of: (i) three hundred sixty five (365) days after the date of Optionee’s termination, or (ii) the expiration of the Option Term. The Options shall terminate at the end of the earliest of the periods specified in clauses (i) and (ii) of the immediately preceding sentence.

     (d) Upon Optionee’s termination of employment or engagement with the Company either by resignation (excluding a resignation resulting from the Company’s material breach of Optionee’s employment agreement) or upon termination of Optionee’s employment or engagement with the Company for “cause” (as that term is defined in Optionee’s employment agreement), all Options shall terminate on the date of Optionee’s termination.

     (e) If Optionee’s employment or engagement with the Company terminates for any reason other than as described in paragraphs (b), (c) or (d) of this Section 3, then the unexercised Options held by Optionee may be exercised by Optionee, provided that such exercise occurs prior to the earlier of: (i) ninety (90) days after the date of Optionee’s termination, or (ii) the expiration of the Option Term. The Options shall terminate at the end of the earliest of the periods specified in clauses (i) and (ii) of the immediately preceding sentence.

4. Exercise of Options.

     (a) The Optionee may exercise the Options with respect to all or any part of the number of Option Shares then exercisable hereunder from time to time by giving the Chief Financial Officer of the Company written notice of exercise. Each such notice of exercise shall specify the number of Option Shares as to which the Options are to be exercised and the date of exercise thereof, which date shall be at least five days (but not more than fifteen days) after the giving of such notice unless an earlier time shall have been mutually agreed upon by Optionee and the Company.

     (b) Full payment of the option price for the Option Shares being purchased by the Optionee shall be made by the Optionee in cash (in U.S. dollars) on or prior to the date of exercise specified in the notice of exercise.

     (c) The Company shall cause to be delivered to the Optionee a certificate or certificates for the Option Shares then being purchased (out of theretofore unissued Stock or reacquired Stock, as the Company may elect) as soon as is reasonably

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practicable after the full payment for such Option Shares and satisfaction of all other conditions to exercise set forth in this Agreement.

     (d) If the Optionee fails to pay for any of the Option Shares specified in a notice of exercise or fails to accept delivery thereof, the Optionee’s right to purchase such Option Shares shall terminate.

     (e) Notwithstanding any other provision of this Agreement, the Optionee’s right to exercise Options and be issued Option Shares is subject to the conditions set forth in this Section 4(e) in addition to any other conditions set forth elsewhere in this Agreement. The Optionee may not exercise any Options in whole or in part or be issued any Option Shares unless (i) the transaction is in compliance with all applicable state and Federal securities laws, (ii) the transaction is exempt from the qualification and registration requirements of applicable state and Federal securities laws, and (iii) the Company and the Optionee comply with any requirements applicable to the transaction, if any, that are contained in any credit or loan agreement to which the Company is a party. In addition, the obligation of the Company to deliver Stock shall be subject to the condition that if at any time the Company shall determine that the listing, registration, or qualification of the Options or the Option Shares upon any securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Options or the issuance or purchase of Stock thereunder, the Options may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors of the Company.

     5. Adjustment of and Changes in Stock of the Company. In the event of any change in the outstanding shares of Stock by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination, exchange of shares, or the like, the Company’s Compensation Committee shall appropriately adjust the number and kind of shares subject to the Options and the option price.

     6. No Rights of Stockholders. Neither the Optionee nor any personal representative shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any shares of Stock purchasable or issuable upon the exercise of the Options, in whole or in part, prior to the date certificates for shares of Stock are issued to the Optionee, which certificates shall be issued without unreasonable delay.

     7. Non-Transferability of Options. During the Optionee’s lifetime, the Options hereunder shall be exercisable only by the Optionee or any guardian or legal representative of the Optionee, and the Options shall not be transferable except, in case of the death of the Optionee, by will or the laws of descent and distribution, nor shall the Options be subject to attachment, execution, or other similar process. In the event of (a) any attempt by the Optionee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Options, except as provided for herein, or (b) the levy of any attachment,

3

execution, or similar process upon the rights or interest hereby conferred, the Company may terminate the Options by notice to the Optionee and they shall thereupon become null and void.

     8. Employment/Engagement Not Affected. Neither the granting of the Options nor exercise thereof shall be construed as granting to the Optionee any right with respect to continuance of employment or engagement with the Company or affect any right which the Company may have to terminate the employment or engagement of Optionee.

     9. Amendment of Options. The Options may be amended by the Company’s Compensation Committee at anytime (i) if the Compensation Committee determines, in its reasonable discretion, that amendment is necessary or advisable in the light of any addition to or change in the Internal Revenue Code of 1986, as amended, or in the regulations issued thereunder, or any federal or state securities law or other law or regulation, which change occurs after the date of grant of an Option and by its terms applies to the Option, or (ii) other than in the circumstances described in clause (i), with the consent of the Optionee.

     10. Sale, Merger, Consolidation and Liquidation of the Company. In the event of any of the following (a “Termination Event”): (i) a sale of all or substantially all of the assets of the Company, or (ii) a sale of all of the outstanding shares of stock of the Company, or (iii) a merger or consolidation in which the Company is not the surviving corporation, or (iv) a merger or consolidation in which the Company is the surviving corporation but the shares of the Company’s Stock outstanding immediately prior to the merger or consolidation are converted into other property, whether in the form of securities, cash or otherwise, then, if the surviving entity or purchaser does not assume the Options issued hereunder, all Options which are not exercised prior to the closing of the applicable Termination Event shall terminate upon the closing of the applicable Termination Event. In the event of a dissolution or liquidation of the Company, all Options issued hereunder which are not exercised prior to completion of such dissolution or liquidation shall terminate. The Company shall give Optionee reasonable prior written notice of any termination of Options pursuant to this Section 10.

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

     (a) Except as otherwise expressly set forth in Section ll(b) below, Optionee shall not, voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise, sell, transfer, assign, hypothecate, pledge or in any way alienate any Option Shares now or hereafter owned by the Optionee or any right or interest therein (hereinafter, a “Transfer”) without the prior written consent of the Company’s Compensation Committee, which the Compensation Committee may withhold in its sole discretion. Any attempt to consummate a Transfer in violation of this Agreement shall be null and void.

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     (b) Notwithstanding the restrictions contained in Section 11 (a) above, (i) Optionee may Transfer Optionee’s Option Shares to the Company or a designee of the Company, or (ii) Optionee may contribute Optionee’s Option Shares to a trust formed solely for the benefit of Optionee and/or Optionee’s immediate family, or (iii) upon the death of Optionee, Optionee’s Option Shares may be transferred to Optionee’s estate, personal representative or heirs by will or the laws of descent and distribution; provided, however, that as a condition to any transfer under clause (i), (ii) or (iii) above, the transferee(s) shall hold the Option Shares subject to the terms and conditions of this Agreement and the transferee(s) shall execute and deliver to the Company an agreement in form and substance satisfactory to the Company agreeing to be bound by the terms and conditions of this Agreement.

     (c) All Option Shares now or hereafter owned by Optionee shall be subject to all of the terms and conditions of this Agreement. All certificates representing such Option Shares shall contain legends to the following effect:

ANY SALE, TRANSFER, PLEDGE, ASSIGNMENT OR ENCUMBRANCE OF THIS SECURITY IS SUBJECT TO THE PROVISIONS OF A STOCK OPTION AGREEMENT BETWEEN THE CORPORATION AND THE STOCKHOLDER, DATED AS OF JUNE 16, 2005, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION.

THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN QUALIFIED OR REGISTERED UNDER ANY STATE OR FEDERAL SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF EITHER QUALIFICATION AND REGISTRATION UNDER STATE AND FEDERAL SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED.

     (d) The provisions of Sections 11(a) and 11(b) shall terminate effective upon the consummation an underwritten public offering of shares of Stock by the Company that results in such shares being listed for trading on a national securities exchange or being authorized for trading on the NASDAQ National Market System.

12. Representations.

     (a) By executing this Stock Option Agreement, Optionee represents and warrants to the Company that Optionee is acquiring the Options for Optionee’s own account, for investment purposes only and not with the intent of distributing, transferring or selling all or any part of the Options.

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     (b) In connection with the exercise of any portion of the Options, Optionee represents and warrants to the Company as of the date of such exercise as follows:

          (i) Optionee is acquiring the Stock for Optionee’s own account, for investment purposes only and not with the intent of distributing, transferring or selling all or any part thereof in violation of applicable securities laws.

          (ii) Optionee acknowledges that the Stock has not been registered under any Federal or state securities laws and is being issued pursuant to one or more exemptions from the registration and qualification requirements of such securities laws.

          (iii) Optionee acknowledges that the Company is under no obligation to register or qualify the Stock and that the Stock may not be sold unless it is so registered and qualified or an exemption from registration and qualification is available.

13. Lock Up In Connection with Public Offering.

     (a) In order to induce the underwriters that may participate in a public offering of the Company’s equity securities to continue their efforts in connection with such a public offering, the Optionee during the period commencing 30 days prior to and ending 180 days after the effective date of any underwritten public offering of the Company’s equity securities (except as part of such underwritten registration):

          (i) agrees not to (x) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Stock or any securities convertible into or exercisable or exchangeable for Stock (including, without limitation, Stock or securities convertible into or exercisable or exchangeable for Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission) or (y) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any Stock (regardless of whether any of the transactions described in clause (x) or (y) is to be settled by the delivery of Stock, or such other securities, in cash or otherwise), without prior written consent of the lead managing underwriter of such public offering;

          (ii) agrees not to make any demand for, or exercise any right with respect to, the registration of any Stock or any securities convertible into or exercisable or exchangeable for Stock, without the prior written consent of the lead underwriter; and

          (iii) authorizes the Company to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on the transfer books and

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          records of the Company with respect to any Stock and any securities convertible into or exercisable or exchangeable for Stock for which the Optionee is the record holder and, in the case of any such shares or securities for which the Optionee is the beneficial but not the record holder, agrees to cause the record holder to cause the transfer agent to decline to transfer and/or to note stop transfer restrictions on such books and records with respect to such shares or securities.

Upon the Company’s request, the Optionee agrees to execute any additional documents necessary or desirable to confirm Optionee’s obligations set forth above and/or in connection with the enforcement of the foregoing provisions. The foregoing provisions shall survive the death or incapacity of the Option and any obligations of the Optionee set forth above shall be binding upon the heirs, personal representatives, successors and assigns of the Optionee.

     14. Notice. Any notice to the Company provided for in this instrument shall be addressed as follows:

K12 Inc.
8000 Westpark Drive, Suite 500
McLean, Virginia 22102
Attention: Compensation Committee

With a copy to:

Maron & Sandler
1250 Fourth Street, Suite 550
Santa Monica, California 90401
Attention: David S. Kyman, Esq.

And any notice to the Optionee shall be addressed to the Optionee at the current address shown on the records of the Company.

Any notice shall be deemed to be duly given if and when properly addressed and posted by registered or certified mail, postage prepaid.

     15. Income Tax Consequences. Optionee acknowledges, represents, and warrants that the Company has made no representations whatsoever to Optionee concerning the specific Federal and/or state income tax and alternative minimum tax consequences to Optionee of the Options granted hereunder or the exercise thereof, and Optionee shall be responsible for consulting with Optionee’s personal tax advisor regarding such matters.

     16. Withholding Taxes. Whenever the Company issues or transfers shares of Stock hereunder, the Company shall have the right to require the Optionee to remit to the Company an amount sufficient to satisfy any Federal, state, and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares.

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Alternatively, the Company may (but shall not be obligated to) issue or transfer such shares of Stock net of the number of shares sufficient to satisfy the withholding tax requirements. For withholding tax purposes, the shares of Stock shall be valued on the date the withholding obligation is incurred.

     17. Governing Law. The validity, construction, interpretation, and effect of this Agreement shall exclusively be governed by and determined in accordance with the laws of the State of Delaware (without regard to conflicts of law principles), except to the extent preempted by Federal law, which shall to such extent govern.

     18. Entire Agreement. This Agreement sets forth the entire understanding and agreement between the Company and the Optionee relating to the subject matter hereof and supercedes all prior understandings and agreements between the Company and the Optionee relating to the subject matter hereof. Without limiting the foregoing,

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this Agreement supercedes and replaces all other stock option agreements between the Company and the Optionee dated prior to the date of this agreement, except for the Stock Option Agreement dated September 6, 2003 which shall remain in full force and effect in accordance with its terms.

     IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement effective as of the date first set forth above.

“Company” K12 INC. a Delaware corporation
By:	/s/ Andrew Tisch

“Optionee”
 

/s/ Richard Rasmus  

RICHARD RASMUS  

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