Form of 2023 Equity Incentive Plan for each of Stride Enrichment Programs, Inc., Stride eSports, Inc., Stride Learning Hub, Inc., Stride Learning Intelligence, Inc., Stride Online Tutoring, Inc., Stride Professional Development Platform, Inc. and Road2Teach, Inc. (the Form of Subsidiary Equity Incentive Plan)
Exhibit 10.16
[STRIDE SUBCO]
2023 EQUITY INCENTIVE PLAN
The purpose of the Plan is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company, Parent or their Subsidiaries by providing such persons with equity ownership opportunities and thereby better aligning the interests of such persons with those of the Company’s stockholders. Capitalized terms used in the Plan are defined in Section 11 below.
Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein, provided that, unless otherwise determined by the Compensation Committee of the Parent Board, no Service Provider who, as of any date, was a named executive officer (within the meaning of Item 402 of Regulation S-K promulgated under the Securities Act) in Parent’s most recently filed Proxy Statement on Schedule 14A shall be eligible to be granted Awards under the Plan.
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Other Stock or Cash-Based Awards may be granted hereunder to Participants in consideration for their agreement to provide services to the Company or a subsidiary thereof. Such Other Stock or Cash-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan, as stand-alone payments and/or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock or Cash-Based Awards may be paid in shares of Common Stock, cash or other property, as the Administrator shall determine. Subject to the provisions of the Plan, the Administrator shall determine the terms and conditions of each Other Stock or Cash-Based Award, including any purchase price (the value of which in respect of any shares of Common Stock issued upon the exercise of any Other Stock Awards shall not be less than the par value thereof (which may be in the form of services rendered to the Company and/or a subsidiary thereof)), transfer restrictions, vesting conditions and other terms and conditions applicable thereto, which shall be set forth in the applicable Award Agreement.
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(i)In the event of any Termination of Service other than a Termination of Service by the Company for Cause, the Fair Market Value, as of the date the Call Right is being exercised, of the shares of Common Stock with respect to which the Call Right is being exercised; and
(ii)In the event of any Termination of Service by the Company for Cause, the lesser of (x) the Fair Market Value, as of the date the Call Right is being exercised, of the shares of Common Stock with respect to which the Call Right is being exercised and (y) the aggregate purchase price paid for such shares by the Participant.
(a)In the event that any payment or benefit received or to be received by a Participant pursuant to the terms of this Plan or any other plan, arrangement or agreement (including any payment or benefit received in connection with a change in ownership or control or the Participant’s Termination of Service) (all such payments and benefits being hereinafter referred to as the “Total Payments”) would be subject (in whole or part) to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, then the Total Payments shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (after subtracting the amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments). Except to the extent that an alternative reduction order would result in a greater economic benefit to the Participant on an after-tax basis, the parties intend that the Total Payments shall be reduced in the following order: (w) reduction of any cash severance payments otherwise payable to the Participant that are
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exempt from Section 409A of the Code, (x) reduction of any other cash payments or benefits otherwise payable to the Participant that are exempt from Section 409A of the Code, but excluding any payment attributable to the acceleration of vesting or payment with respect to any equity award that is exempt from Section 409A of the Code, (y) reduction of any other payments or benefits otherwise payable to the Participant on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payment attributable to the acceleration of vesting and payment with respect to any equity award that is exempt from Section 409A of the Code, and (z) reduction of any payments attributable to the acceleration of vesting or payment with respect to any equity award that is exempt from Section 409A of the Code; provided, in case of clauses (x), (y) and (z), that reduction of any payments or benefits attributable to the acceleration of vesting of equity awards shall be first applied to equity awards with later vesting dates; provided, further, that, notwithstanding the foregoing, any such reduction shall be undertaken in a manner that complies with and does not result in the imposition of additional taxes on the Participant under Section 409A of the Code.
(b)All determinations regarding the application of this Section 10.11 shall be made by an independent accounting firm or consulting group with nationally recognized standing and substantial expertise and experience in performing calculations regarding the applicability of Section 280G of the Code and the Excise Tax retained by the Company prior to the date of the applicable change in ownership or control (the “280G Firm”). All determinations related to the calculations to be performed pursuant to this Section 10.11 shall be done by the 280G Firm. The 280G Firm will be directed to submit its determination and detailed supporting calculations to both the Participant and the Company within 15 days after notification from either the Company or the Participant that the Participant may receive payments which may be “parachute payments” or such other period determined by the Company. The fees and expenses of the 280G Firm for its services in connection with the determinations and calculations contemplated by this Plan will be borne solely by the Company.
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[STRIDE SUBCO]
2023 EQUITY INCENTIVE PLAN
CALIFORNIA SUPPLEMENT
This supplement is intended to satisfy the requirements of Section 25102(o) of the California Corporations Code and the regulations issued thereunder (“Section 25102(o)”). Notwithstanding anything to the contrary contained in the Plan and except as otherwise determined by the Administrator, the provisions set forth in this supplement shall apply to all Awards granted under the Plan to a Participant who is a resident of the State of California on the date of grant (a “California Participant”) and which are intended to be exempt from registration in California pursuant to Section 25102(o), and otherwise to the extent required to comply with applicable law (but only to such extent). Definitions in the Plan are applicable to this supplement.
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