Exhibit 10.2
August14,2026
DearBob:
It gives me great pleasure to offer you (“Executive”) employment as the Chief Executive OfficerofStride,Inc.,aDelawarecorporation(the“Company”),onthetermssetforthinthisletter (this “Agreement”), effective as of July 29, 2026 (the “Effective Date”).If you agree with the terms and conditions of this Agreement, please sign the last page of this Agreement and return it to me.
1.Employment.The Company hereby employs Executive on the terms and conditionssetforthinthisAgreementandExecutiveherebyacceptssuchemployment.Executive shall serve as the Chief Executive Officer of the Company and report to theCompany’s board of directors (the“Board”).Executive shall performsuch duties andhave suchresponsibilities as are normally commensurate with Executive’s position, including such other duties as are reasonably assignedtoExecutivefromtimetotime.ExecutiveagreesthattheCompanyshallbehisexclusive employer and Executive shall devote his full business time to performing Executive’s responsibilities under this Agreement. During the term of his employment as Chief Executive Officer,ExecutiveshallcontinuetoserveasamemberoftheBoard,toserveuntilhissuccessoris dulyappointedorelectedinaccordancewiththeCompany’sorganizationaldocuments.Executive shall cease to be eligible for compensation under the Company’s non-employee director compensation program for periods following the Effective Date during the term of his employment, although any equity awards Executive received in his capacity as a non-employee member of the Board will continue to vest based on his continued employment or service under this Agreement.
2.Salary.EffectiveasoftheEffectiveDate,Executive’sannualizedbasesalaryshall be $1,000,000 (the “Base Salary”).The Base Salary shall be paid on the Company’s regular payrolldatesinaccordancewiththeCompany’snormalpayrollpractices.Executive’sBaseSalary shall be reviewed annually, and the Board or its compensation committee (the “Compensation Committee”)shalldetermine,intheirsoleandabsolutediscretion,whethertograntExecutiveany increases to the Base Salary based on the performance of Executive and the Company.
3.Performance** **Bonus.Executivewillbeeligibletoreceiveanannualendof fiscal year bonus (the “Performance Bonus”) with a target equal to two hundred percent (200%) of the Executive’s Base Salary.Actual bonus paymentsmay vary (above or below target) based on the overall performance of the Company, including Company performance metrics to be determined bytheBoardorCompensationCommittee, thesuccessfulcompletionoftheExecutive’spersonal
performance goals and objectives and the discretion of the Board or Compensation Committee. Payment of any amount is conditioned upon Executive’s employment with the Company on the scheduledpayrolldatewhenbonuspaymentsareissued.Executive’sPerformanceBonuswillnot be prorated for the Company’s 2027 fiscal year.
Any Performance Bonus shall be paid in accordance with the terms of the Company’s bonus plan, but in any event within the period required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) such thatit qualifies as a “short-term deferral” pursuant to Treasury Regulation Section 1.409A-1(b)(4).
4.Annual Equity Incentive Awards.During Executive’s employment as Chief Executive Officer, commencingwithfiscal year 2027, Executivewill be eligible toparticipate in and will receive awards under the Company’s equity incentive award plans and programs as in effectfromtimetotimeatalevelandontermscommensuratewithhispositionasChiefExecutive Officer (“OngoingEquityAwards”).OngoingEquityAwardsarecurrentlygrantedonanannual basis at or near the beginning of each fiscal year of the Company, in each case as determined by the Board or the Compensation Committee of the Board, and are expected to be granted in the formofperformance-basedrestrictedstockunits,restrictedstockawardsorsimilarawards,ineach case as determined bytheBoard or theCompensation Committeeof theBoard intheir discretion from time to time.For the avoidance of doubt, all equity compensation awards are subject to approvalbytheBoardonanannualbasisorotherwiseatthetimeofgrant.ThisAgreementisnot intended to impact any outstanding equity compensation awards that were previously granted, which awards remain unchanged and in effectin accordance with their terms.For the avoidance of doubt, Executive will be eligible for continued vesting of any Ongoing Equity Awards he receives during his employment based on continued service in any capacity, including as a non-employee member of the Board or as a consultant.
5.Personal** Time **Off.Executiveshallbeeligibletotakevacationandpersonaltime off in accordance with the Company’s policy, which is subject to change or deletion at the discretion of the Company.
6.Expenses.During Executive’s employment, the Company shall reimburse Executive for reasonable travel, business entertainment, and other business expenses incurred in the performance of Executive’s duties, upon presentation of supporting documentation, in accordance with and subject to all Company policies that may be in effect from time to time, including any bring-your-own-device or similar policy. In addition, the Company shall pay the costs of temporary housing for Executive near the Company’s headquarters on terms mutually agreed by Executive and the Company.
7.Benefits.Executive will be eligible to participate in such health, welfare and retirement benefit plans as may be adopted from time to time by the Company on the same basis assimilarlysituatedemployees,includingparticipationinanysenior-levelexecutivebenefitplans that may be adopted by the Company.Executive’s participation shall be subject to: (i) the terms oftheapplicableplandocuments;(ii)generallyapplicableCompanypolicies;and(iii)the
discretionoftheBoardoranyadministrativeorothercommitteeprovidedforin,orcontemplated by, suchplanorprograms.Theseplansandprogramsaresubjecttoamendmentorterminationat the discretion of the Company.
8.Holidays.Executive will be eligible for paid holidays in accordance with the Company’s holiday policy and schedule, as may be amended by the Company from time to time at the sole discretion of the Company.
| 9. | Employment** at **Will;Termination. |
9.1.Employment at Will.Executive’s employment with the Company will be on an “atwill”basis,meaningthatExecutive’semploymentisnotforaspecifiedperiodoftimeandcan beterminatedbyExecutiveortheCompanyatanytime,withorwithoutCause(asdefinedbelow), and with or without notice.
9.2.Termination by Company for Cause.The Company may terminate this Agreementatanytime,effectiveimmediately,for“Cause,”whichshallbedefinedas:(i)aWillful andcontinuedmaterialfailuretoperformExecutive’sdutiesunderthisAgreementinasatisfactory manner (other than as a result of total or partial incapacity due to physical or mental illness or Disability, as defined in Section 9.3 below), where “Willful” means, when applied to any action or omissionmadebyExecutive, thatExecutive didsowithoutagoodfaithbeliefthatsuchaction oromissionwasin,orwasnotcontraryto,thebestinterestsoftheCompany;(ii)actsofdishonesty, fraud, embezzlement, misrepresentation, and misappropriation involving the Company or any of its affiliates; (iii) unprofessional conduct which may adversely affect the reputation of the Company and/or its relationship with its customers, employees or suppliers; or (iv) a conviction of,orentryofaguiltypleaornocontestto,anycrimeinvolvingmoralturpitudeordishonesty.In the event of termination of this Agreement for Cause, Executive shall be paid all accrued Base Salary in accordance with applicable law and any reasonable and necessary business expenses properly incurred by Executive in connection with the duties hereunder and timely submitted for reimbursement, all through the date of termination. All Stock Awards held by Executive shall expire atthe dateof terminationfor anyof the above-enumerated reasons to terminatefor Cause. Inaddition,theparties’obligationshereunder,exceptassetforthintheCOBA(asdefinedbelow), Agreement to Arbitrate (as defined below), and Sections 9, 10 and 11 of this Agreement, shall terminate.
9.3.Termination upon Disability or Death. Executive’s employment with the Company shall terminate upon thedeath of Executive. If Executive has incurred aDisability, the Company may terminate Executive’s employment with the Company.In the event of such termination,ExecutiveshallbepaidallaccruedBaseSalaryinaccordancewithapplicablelawand anyreasonableandnecessarybusinessexpensesproperlyincurredbyExecutiveinconnectionwith thedutieshereunder andtimelysubmittedforreimbursement, allthroughthedateoftermination. Asusedherein,theterm“Disability”meansaphysicalormentaldisabilitythatrendersExecutive unableto performExecutive’snormal dutiesfortheCompanyfor aperiodof ninety(90)or more daysasdeterminedinthegoodfaithjudgmentoftheCompensationCommitteeortheBoard.If
ExecutivedisagreeswiththegoodfaithdeterminationofDisability,themattershallbesubmitted toarbitrationpursuanttotheAgreementtoArbitrate,whichisincorporatedhereinbyreferenceas provided in Section 10.1 of this Agreement.
9.4.Termination by Company without Cause.The Company may terminate Executive’s employment and this Agreement at any time, effective immediately, without Cause. In the event that the Company terminates Executive’s employment and this Agreement without Cause,ExecutiveshallbepaidallaccruedBaseSalaryinaccordancewithapplicablelawandany reasonable and necessary business expenses properly incurred by Executive in connection with Executive’s duties hereunder and timely submitted for reimbursement, all through the date of termination, and, provided that such termination of employment constitutes a “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto(a “Separation from Service”), Executive shall be eligible to receivetheseverancepaysetforthinSection9.6orSection9.7,asapplicable,below.Inaddition, the parties’ obligations hereunder, except as set forth in the COBA, Agreement to Arbitrate, and Sections 9, 10 and 11 of this Agreement, shall terminate.
9.5.Termination by Employee.In the event that Executive resigns his employment and terminates this Agreement other than for Good Reason (as defined in Section 9.5.1 below), Executive shall be paid all accrued Base Salary in accordance with applicable law and any reasonableandnecessarybusinessexpensesproperlyincurredbyExecutiveinconnectionwiththe duties hereunder and timely submitted for reimbursement, all through the date of termination. Executive shall not be entitled to or eligible for any additional salary, bonus, benefits, severance pay or other remuneration after the effective date of termination. In addition, the parties’ obligations hereunder, except as set forth in the COBA, Agreement to Arbitrate, and Sections 9, 10 and 11 of this Agreement, shall terminate.
9.5.1.Resignation** for Good **Reason.IntheeventthatExecutiveresignshisemployment and terminates this Agreement for Good Reason, then, Executive shall be paid all accrued Base Salary in accordance with applicable law and any reasonable and necessary business expenses properly incurred by Executive in connection with Executive’s duties hereunder and timely submitted for reimbursement, all through the date of termination, and, provided that such resignation constitutes a Separation from Service, Executive shall be eligible to receive the severancepaysetforthinSection9.6orSection9.7,asapplicable,below.Inaddition,theparties’ obligations hereunder, except as set forth in the COBA, Agreement to Arbitrate, and Sections 9, 10 and 11 of this Agreement, shall terminate.“Good Reason” shall be defined as the occurrence of any of the following events or conditions without Executive’s written consent:
| (i) | amaterial diminution inExecutive’sauthority,dutiesorresponsibilities; |
| (ii) | amaterialdiminutioninExecutive’sbasesalaryortargetannualbonus |
level;
(iii)a material change in the geographic location at which Executive must perform his duties, which shall not include a relocation of Executive’s principal place of employment to any location within a fifty (50) mile radius of the location from which Executive served the Company immediately prior to the relocation; or
(iv)a material breach of this Agreement by the Company or the failure of the Company to obtain an agreementfromany successor to the Company ina Change in Control (as defined below) to assume and agree to perform this Agreement.
Executive must provide written notice to the Company of the occurrence of any of the foregoingeventsorconditionswithinninety(90) daysof theoccurrenceof sucheventorthedate upon which Executive reasonably became aware that such an event or condition had occurred. TheCompanyoranysuccessororaffiliateshallhaveaperiodofthirty(30)daystocuresuchevent or condition after receipt of written notice of such event from Executive.Any voluntary terminationfor“GoodReason”followingsuchthirty(30)daycureperiodmustoccurnolaterthan the date that is six (6) months following the date notice was provided by Executive.
9.6.Effect of Termination (Severance Pay).Upon termination of Executive’s employment and this Agreement by the Company without Cause pursuant to Section 9.4 or by Executive for Good Reason pursuant to Section 9.5.1 above, and provided that such termination constitutes a Separation from Service and provided further that Executive executes a general release of claims satisfactory to the Company within thirty (30) days following the date of termination thatincludes arestatementofthe non-competition andnon-solicitation obligations in theCOBA(“Release”)anddoesnotrevoketheReleaseasmaybepermittedtherein,andprovided furtherExecutivecomplieswiththeRelease, Section10.1below, andtheCOBA,Executiveshall be entitled to:(1) twenty-four (24) months of severance pay at the then-existing Base Salary (the “SeverancePay”),(2)anamountequaltoanyaccruedandearnedannualbonusforthecompleted fiscal year immediately preceding the date of termination that has been declared by the Compensation Committeebut not yet paid asof thedateof termination, payableat thesametime as annual performance bonus payments are made to other senior Company executives, (3) a pro-ratedannualbonusfortheyearoftermination,payablebasedonactualperformance(asdetermined by the Board or Compensation Committee in goodfaith) after the end of the fiscal year in which theterminationdateoccursandatthesametimeasannualperformancebonuspaymentsaremade tootherseniorCompanyexecutives(the“ProRataBonus”),and(4)ifExecutiveelectstoreceive continuedmedical,dentalorvisioncoverageunderoneormoreoftheCompany’sgroupmedical, dental or vision plans pursuant tothe Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), reimbursement (ordirectpaymenttothe carrier)fortheCompany-paid portion of the applicable COBRA premiums for Executive and Executive’s covered dependents under such plans (at the same cost sharing levels as in effect for similarly-situated active employees)duringaperiodcommencingimmediatelyuponthedateofterminationandendingon theearliestof(x)thetwelve(12)monthanniversaryoftheExecutive’sSeparationfromService,
(y) the date that Executive and/or Executive’s covered dependents become no longer eligible for COBRA and (z) the date Executive becomes eligible to receive healthcare coverage from a subsequentemployer(and ExecutiveagreestopromptlynotifytheCompanyofsucheligibility).
The Severance Pay shall be payable in equal installments over twenty-four months, at the same intervals and in the same manner as the Base Salary had been paid prior to such termination; providedthatanypaymentsrequiredtobemadepriortothethirtieth(30th)dayfollowingthedate ofterminationofemployment(the“FirstPayDate”)shallbepaidinasinglelumpsumonthefirst regularlyscheduledpayrolldateonorfollowingtheFirstPayDate.ForpurposesofSection409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(iii)), each payment that Executive may be eligible to receive under this Agreement shall be treated as a separate and distinct payment.
9.7.Change in Control.In the event Executive’s employment is terminated by the Company without Cause pursuant to Section 9.4 or by Executive for Good Reason pursuant to Section 9.5.1 above, in either case within two years after the date of a Change in Control, and provided that such termination constitutes a Separation from Service, then, provided Executive timely signs and does not revoke the Release and provided further Executive complies with the Release and the COBA, Executive shall receive the same severance benefits as are set forth in Section 9.6 above, except that(i) the Severance Pay Executive is eligibleto receive shall be paid in a single lump sum as soonas practicable after the FirstPay Date, (ii) theProRata Bonus shall bebasedonExecutive’stargetannualbonusamountandpaidassoonaspracticableaftertheFirst PayDate,(iii)Executiveshalladditionallyreceiveanamountequalto200%ofExecutive’starget annualbonusfortheyearoftheSeparationfromService,paidassoonaspracticableaftertheFirst PayDate, (iv)allunvestedequityor equity-basedawardsgrantedunder anyequitycompensation plans of the Company shall immediately become 100% vested, provided that, unless a provision more favorable to Executive is included in an applicable award agreement, any such awards that aresubjecttoperformance-basedvestingconditionsshallonlybepayablesubjecttotheattainment oftheperformancemeasuresfortheapplicableperformanceperiodasprovidedunderthetermsof theapplicableawardagreement,and(v)themaximumperiodofreimbursementoftheCompany-paid portionof the applicable COBRA premiumsshall be twenty-four (24) monthsfollowingthe Executive’s Separation from Service (and, for the avoidance of doubt, such period shall remain subject to earlier termination as set forth in Section 9.6 above).For purposes of this Agreement, “Change in Control” means:
(i)a transaction or series of transactions occurring after the Effective Date whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company oranyofitssubsidiariesora“person”that,priortosuchtransaction,directlyorindirectlycontrols, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within themeaning of Rule13d-3 under theExchangeAct) of securitiesof the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such transaction; or
(ii)the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) after the EffectiveDateof(x)amerger,consolidation,reorganization,orbusinesscombinationor(y)asale
or otherdisposition ofallorsubstantially alloftheCompany’sassets inanysingle transaction or seriesofrelatedtransactionsor(z)theacquisitionofassetsorstockofanotherentity,ineachcase other than a transaction:
(A)which results in the Company’s voting securities outstanding immediatelybeforethetransactioncontinuingtorepresent(eitherbyremainingoutstandingorby being converted into voting securities of the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (such person, the “SuccessorEntity”))directlyorindirectly,atleastamajorityofthecombinedvotingpowerofthe Successor Entity’s outstanding voting securities immediately after the transaction, and
(B)after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this paragraph as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.
Notwithstanding the foregoing, no transaction, event or occurrence shall constitute a Change in Control for purposes of this Agreement, unless such transaction, event or occurrence also constitutes a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5).
| 10. | Other Conditions** of **Employment. |
10.1.Employee** Continuing Obligations Agreement and Agreement to Arbitrate. **On the Effective Date, as a condition to his commencement of employment, Executive will have executed and delivered to the Company (i) the Employee Continuing Obligations Agreement (“COBA”) and(ii) AgreementtoArbitrate(“AgreementtoArbitrate”).Executiveagreestoabide by the terms of the COBA and Agreement to Arbitrate, which are hereby expressly incorporated byreferenceintothisAgreement.ExecutiveacknowledgesthatthereareobligationsintheCOBA and Agreement to Arbitrate that will survive the termination of Executive’s employment. In addition, during theperiodinwhichExecutive isreceiving any compensationfromtheCompany (including and no less than the severance period) and for a twelve-month period thereafter, Executiveshallnotengagein,orbeemployedby,abusinessororganizationthatrendersthesame or similar services as the Company or otherwise competes with the Company or its business. In applyingthisnon-competitionprovision,theCompanywillnotunreasonablywithholditsconsent for futureemploymentwithentitiesthat are notdirect competitors or offer substantiallythe same or similar services as the Company.Executive expressly acknowledges that the Severance Pay and the other payments under Section 9.6 or Section 9.7 above, as applicable, that Executive is eligible to receive in the event Executive’s employment terminates without Cause each, individually, constitute sufficient severance benefits or an “other monetary payment” under Virginia law to support both the non-compete in this Section 10.1 and any non-compete or non-solicitsintheCOBA.IntheeventExecutiveisterminatedwithoutCauseanddoesnottimelysign
theRelease,revokestheRelease,orotherwiseisnoteligiblefortheSeverancePayand/ortheother payments under Section 9.6 or Section 9.7 above, as applicable, the Company may provide Executive,initssolediscretion,$1,000,lessapplicablewithholdingsanddeductions,withinsixty (60) days of the termination of Executive’s employment, which Executive acknowledges is a sufficient “other monetary payment” under Virginia law to support both the non-compete in this Section 10.1 and any non-compete or non-solicits in the COBA.
10.2.Policies and Procedures.Executive’s employment is subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.
| 11. | Miscellaneous. |
11.1.Entire Agreement.The terms described in this Agreement, together with the COBA, and Agreement to Arbitrate, both incorporated herein by reference, set forth the entire understanding between Executive and the Company, and supersede any prior representations or agreements,whetherwrittenororal,withrespecttothesubjectmatterhereof.Notermorprovision of this Agreement may be amended, waived, released, discharged or modified except in writing, signed by Executive and an authorized officer of the Company, except as otherwise specifically provided herein.
11.2.Governing** Law and **Venue.ThisAgreementshallbegovernedbyandconstrued in accordance with the laws of the Commonwealth of Virginia, without reference to conflict of law principles.If any legal action is initiated by either party arising from or related to this Agreement,thepartiesagreetotheexclusivejurisdictionofthecourtsofFairfaxCounty,Virginia.
11.3.Successors.This Agreement shall be binding upon and shall inure to the benefit oftheCompanyanditssuccessorsandassigns.InthatthisAgreementconstitutesanon-delegable personal services agreement, it may not be assigned by Executive and any attempted assignment by Executive in violation of this Agreement shall be null and void.
11.4.Severability.IntheeventthatanyoneormoreoftheprovisionsofthisAgreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceabilityoftheremainingprovisionsofthisAgreementshallnotbeaffectedthereby,andall such remaining provisions shall remain in full force and effect.
11.5.Waiver.The failure of either party to insist on strict compliance with any of the terms of this Agreement will not be deemed to bea waiver of any terms of this Agreement or of theparty’srighttorequirestrictcompliancewiththetermsofthisAgreementinanyotherinstance.
11.6.Notices.All notices, demands, or requests provided for or permitted to be given pursuant to this Agreement must be given in writing, unless otherwise specified, and shall be deemedtohavebeenproperlygiven,delivered,orservedbydepositingthesameintheUnited
Statesmail,postageprepaid,certifiedorregisteredmail,withdeliveriestobemadetothe following addresses:
IftoExecutive:
RobertE. Knowling, Jr.,at theaddress containedintheCompany’s Human Resources records.
IftotheCompany:
Attn:GeneralCounsel Stride, Inc.
11720PlazaAmericaDrive 9th Floor
Reston, VA20190
Eitherpartymaychangesuchparty’saddressfornoticesasnecessarybynoticegiven pursuant to this Section.
12.Captions.Section headings used in this Agreement are for convenience of reference only and shall not be considered a part of this Agreement.
13.Amendments and Further Assurances.This Agreement may be amended or modifiedfrom timeto time, butonly bywritteninstrument executedby allthepartieshereto.No variations, modifications, or changes herein or hereof shall be binding upon any party except as set forth in such a written instrument.The partieswill execute such further instruments and take such further action as may be reasonably necessary to carry out the intent of this Agreement.
14.Counterparts.ThisAgreementmaybeexecutedinoneormorecounterparts,each of which shall be deemed an original, and all of which together shall constitute one instrument.
| 15. | Representations** **by Executive:Executiverepresentsand warrantsthat: |
(a)Executiveisfreetoenter intoand perform each ofthetermsand conditionsofthis Agreement.Executive is not subject to any agreement, judgment, order or restriction that would beviolatedbyExecutivebeingemployedbytheCompanyorthatinanywayrestrictstheservices that may be rendered by Executive for the Company.Executive’s execution of this Agreement andperformanceofExecutive’sobligationsunderthisAgreementdoesnotandwillnotviolateor breach any other agreement between Executive and any other person or entity.In addition, Executive has disclosed to the Company the educational and religious institutions to which Executive has made charitable contributions and donated his services prior to entering into this Agreement,andtheCompanyhasdeterminedthatacontinuationofthoseactivitiesafterexecution of thisAgreement, absent amaterial change in thestatus of thoseinstitutions as theyrelateto the Company, is consistent with the Company’s Code of Business Conduct and Ethics.
(b)Executive has carefully considered the nature and extent of the restrictions and covenants in this Agreement and the COBA and Executive agrees that they will not prevent Executive from earning a livelihood after employment with the Company and that they are fair, reasonable and necessary to protect and maintain the proprietary interests, goodwill and other legitimatebusinessinterestsoftheCompanyinviewofthefollowingfacts:(i)Executivewillhold a position of confidence and trust with the Company as a result of Executive’s employment with the Company, access to confidential financial and other information, and relationship with the customers, suppliers and other employees of the Company, (ii) it would be impossible for Executive to be employed or engaged in a directly competitive business to that of the Company without inevitably using the Company’s proprietary information, and (iii) Executive has broad skills that will permit gainful employment in many areas and businesses outside the scope of the Company’s business.
(c)Executive acknowledges that but for the above representations and warranties of Executive, the Company would not employ Executive or enter into this Agreement.
| 16. | Parachute** **Payments. |
(i)ItistheobjectiveofthisAgreementtomaximizeExecutive’sNetAfter-TaxBenefit (asdefinedherein)ifpaymentsorbenefitsprovidedunderthisAgreementaresubjecttoexcisetax under Section4999 of theCode.Notwithstandingany other provisions of this Agreement, inthe event that anypaymentorbenefitbytheCompanyor otherwiseto orforthebenefitofExecutive, whether paidor payable or distributed or distributable pursuantto thetermsof thisAgreement or otherwise (all such payments andbenefits being hereinafter referredto as the“TotalPayments”), would besubject (in wholeorin part)to theexcisetaximposed by Section 4999 of theCode(the “ExciseTax”),thenthecashseverancepaymentsshallfirstbereduced,andthenon-cashseverance payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments shall be subject to the Excise Tax, but only if the net amount of such Total Payments, assoreduced(andaftersubtractingthenetamountoffederal,stateandlocalincometaxesonsuch 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 the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which Executive 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).
(ii)The Total Payments shall be reduced by the Company in the following order: (w) reduction of any cash severance payments otherwise payable to Executive that are exempt from Section409AoftheCode,(x)reductionofanyothercashpaymentsorbenefitsotherwisepayable to Executive that are exempt from Section 409A of the Code, but excluding any payments attributabletotheaccelerationofvestingorpaymentswithrespecttoanyequityawardwithrespect to the Company’s commonstock that is exempt from Section 409Aof the Code, (y) reduction of anyother payments or benefits otherwise payable toExecutive on a pro-ratabasis or suchother
manner thatcomplieswithSection409Aof theCode, butexcludinganypayments attributableto the acceleration of vesting and payments with respect to any equity award with respect to the Company’s common stock that are exempt from Section 409A of the Code, and (z) reduction of any payments attributable to the acceleration of vesting or payments with respect to any other equityawardwithrespecttotheCompany’scommonstockthatareexemptfromSection409Aof the Code.
(iii)AlldeterminationsregardingtheapplicationofthisSection16shallbemadebyan accountingfirmwithexperienceinperformingcalculationsregardingtheapplicabilityof Section 280G of the Code and the Excise Tax selected by the Company (“Independent Advisors”).For purposesofdeterminingwhetherandtheextenttowhichtheTotalPaymentswillbesubjecttothe ExciseTax,(x)noportionoftheTotalPaymentsthereceiptorenjoymentofwhichExecutiveshall havewaivedatsuchtimeandinsuchmannerasnottoconstitutea“payment”withinthemeaning of Section 280G(b) of theCode shall be taken into account, (y) no portion of theTotal Payments shallbetakenintoaccountwhich,intheopinionof theIndependentAdvisors, doesnotconstitute a“parachutepayment”withinthemeaningofSection280G(b)(2)oftheCode(includingbyreason ofSection280G(b)(4)(A)oftheCode)and,incalculatingtheExciseTax,noportionofsuchTotal Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of theCode) allocabletosuchreasonablecompensationand(z) thevalueof anynon-cashbenefitor any deferred payment or benefit included in the Total Payments shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.The costs of obtaining such determination and all related fees and expenses (including related fees and expenses incurred in any later audit) shall be borne by the Company.
(iv)In the event it is later determined that a greater reduction in the Total Payments shouldhavebeenmadetoimplementtheobjectiveandintentofthisSection16,theexcessamount shall bereturned immediately by Executiveto theCompany, plusinterest at arateequal to 120% of the semi-annual applicable federal rate as in effect at the time of the Change in Control.
| 17. | Section** **409A. |
(a)Compliance.IntheeventthatfollowingthedatehereoftheCompanyorExecutive reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and Executive shall work together to adopt suchamendmentstothisAgreementoradoptotherpoliciesorprocedures(includingamendments, policiesandprocedureswithretroactiveeffect),ortakeanyothercommerciallyreasonableactions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.
(b)In-Kind Benefits and Reimbursements.Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement shall be provided in accordance with the requirements of Treasury Regulation Section 1.409A-3(i)(1)(iv), such that any in-kind benefits and reimbursements provided under this Agreement duringanycalendaryearshallnotaffectin-kindbenefitsorreimbursementstobeprovidedinany other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section 105(b) of theCode, and any in-kind benefits and reimbursements shall not be subject to liquidation or exchange for another benefit.Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and,iftimelysubmitted,reimbursementpaymentsshallbepromptlymadetoExecutivefollowing such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred.In no event shall Executive be entitled to any reimbursement payments afterDecember 31stofthe calendar yearfollowingthecalendar yearin which the expense was incurred.This paragraph shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.
(c)Distribution.Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable toExecutive pursuant to Section 9.6 or 9.7 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans)orTreas.Reg.Section1.409A-1(b)(4)(Short-TermDeferrals).However,totheextentany paymentsaretreatedasnon-qualifieddeferredcompensationsubjecttoSection409AoftheCode, thenifExecutiveisdeemedatthetimeofhisSeparationfromServicetobea“specifiedemployee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion ofExecutive’sterminationbenefitsshallnotbeprovidedtoExecutivepriortotheearlierof(i)the expirationofthesix-monthperiodmeasuredfromthedateofExecutive’sSeparationfromService or(ii)thedateofExecutive’sdeath.Upontheearlierofsuchdates,allpaymentsdeferredpursuant to thisSection 17(c) shall be paid in alump sum to Executive.Thereafter, payments will resume in accordance with this Agreement.The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Serviceshall bemadeby theCompanyin accordancewith thetermsof Section409Aof the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i)).This Agreement is intended to be written, administered, interpreted and construed inamannersuchthatnopaymentorbenefitsprovidedundertheAgreementbecomesubjectto(a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest andadditionaltaxsetforthwithinSection409A(a)(1)(B)oftheCode(together,referredtoherein as the “Section409APenalties”), including, whereappropriate, the constructionof defined terms tohavemeaningsthatwouldnotcausetheimpositionofSection409APenalties.Innoeventshall the Company berequiredto provide atax gross-up payment toExecutiveor otherwise reimburse Executive with respect to Section 409A Penalties.
18.Withholding. The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as shall be required pursuant to applicable law or governmental regulation or ruling or other required withholdings.
Please acknowledge your acceptance of the terms of this Agreement by signing the enclosed copy of this letter and returning it to me as soon as possible.Should you have any questions, please feel free to contact me.
Sincerely,
Steven B.Fink,Chairmanofthe Board
[Countersignature* Page *Follows]
Agreed andAccepted:
Robert E. Knowling, Jr. Date:8/14/2026|6:28PMPDT