Form 8-K

(Signature of Grantee)

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0001193125-12-099167.txt : 20120306 0001193125-12-099167.hdr.sgml : 20120306 20120306164553 ACCESSION NUMBER: 0001193125-12-099167 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20120229 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120306 DATE AS OF CHANGE: 20120306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAREER EDUCATION CORP CENTRAL INDEX KEY: 0001046568 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 363932190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23245 FILM NUMBER: 12671117 BUSINESS ADDRESS: STREET 1: 231 N. MARTINGALE ROAD CITY: SCHAUMBURG STATE: IL ZIP: 60173 BUSINESS PHONE: 8477813600 MAIL ADDRESS: STREET 1: 231 N. MARTINGALE ROAD CITY: SCHAUMBURG STATE: IL ZIP: 60173 8-K 1 d311905d8k.htm FORM 8-K Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported) February 29, 2012

Career Education Corporation

(Exact Name of Registrant as Specified in Charter)


Delaware	0-23245	36-3932190
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

231 North Martingale Road Schaumburg, IL		60173
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (847) 781-3600

Not Applicable

(Former Name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers, Compensatory Arrangements of Certain Officers.

1. Adoption of Form of Restricted Stock Unit Agreement and Revised Form of Stock Option Agreement

On February 29, 2012, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Career Education Corporation (the “Company”) determined to begin granting restricted stock units (“RSUs”) to eligible employees and approved a form of restricted stock unit agreement (the “RSU Agreement”) under the Career Education Corporation 2008 Incentive Compensation Plan (the “Plan”). The Committee also approved a revised form of stock option agreement (the “Revised Option Agreement”) under the Plan. Effective March 1, 2012, the Committee granted RSUs to certain eligible employees, including the Company’s current executive officers.

The amount and terms of each award of RSUs will be determined by the Committee in its sole discretion and will be set forth in an individual’s RSU Agreement. Each RSU constitutes a right to receive one share of the Company’s common stock, subject to vesting. Shares of the Company’s common stock underlying the number of vested RSUs will be delivered as soon as practicable after vesting. If the grantee’s employment is terminated because of death or disability, then the remaining unvested portion of the RSUs will immediately vest as of the grantee’s termination date. If the grantee’s employment is terminated for any other reason, then any unvested RSUs under the award will automatically terminate and be forfeited. Upon a change of control of the Company, the grantee will have such rights with respect to the RSUs as are provided in the Plan.

The form of Revised Option Agreement has been amended primarily to remove specific vesting terms and to permit any notice thereunder to be transmitted by electronic means.

The foregoing descriptions of the form RSU Agreement and form Revised Option Agreement do not purport to be complete and are qualified in their entirety by reference to the form agreements, copies of which are attached to this Current Report on Form 8-K (this “Report”) as Exhibits 10.1 and 10.2 and are incorporated herein by reference to this Report.

2. Grants of Stock Options and Restricted Stock Units to Steven H. Lesnik

On March 1, 2012, the Compensation Committee granted to Steven H. Lesnik, the Company’s Chairman, President and Chief Executive Officer: (a) time-based options to purchase 114,811 shares of Company common stock, which options shall vest and become exercisable in full on March 1, 2013 and (b) performance-based options to purchase 143,513 shares of Company common stock, which options shall vest and become exercisable in full on the later to occur of (1) March 1, 2013, and (2) the achievement of certain performance criteria. The exercise price of the options is $8.63 per share, the closing price of the Company’s common stock on the date of grant. The Committee also granted to Mr. Lesnik 114,811 performance-based RSUs. Each RSU will cease to be restricted and shall become non-forfeitable on March 1, 2013, subject to the achievement of certain performance criteria on or prior to such date.

The grant of time-based options to Mr. Lesnik is evidenced by the Non-Qualified Stock Option Agreement filed with this Report as Exhibit 10.3. The grant of performance-based options to Mr. Lesnik is evidenced by the Non-Qualified Stock Option Agreement filed with this Report as Exhibit 10.4. The grant of performance-based RSUs to Mr. Lesnik is evidenced by the form of Restricted Stock Unit Agreement filed with this Report as Exhibit 10.5.

The foregoing descriptions of Exhibits 10.3, 10.4 and 10.5 do not purport to be complete and are qualified in their entirety by reference to the agreements, copies of which are attached to this Report as Exhibits 10.3, 10.4 and 10.5 and are incorporated herein by reference to this Report.

3. Budlong Separation Agreement.

Mr. Thomas G. Budlong, the Company’s former Senior Vice President, Chief Administrative Officer and Chief of Staff separated from the Company on October 31, 2011. In connection with the preparation of the Company’s Proxy Statement for it’s 2012 Annual Meeting of Stockholders, the Company has determined that Mr. Budlong will be designated as a “named executive officer” for the year ended December 31, 2011, in such Proxy Statement. As a result, the Company is filing the Separation Agreement and General Release, dated October 31, 2011, entered into between Mr. Budlong and the Company, as Exhibit 10.6 to this Report, which is incorporated herein by reference to this Report.

Item 9.01. Financial Statements and Exhibits.

(d)

Exhibits


Exhibit Number		Description of Exhibits

10.1		Form of Restricted Stock Unit Agreement (Time-Based)

10.2		Form of Non-Qualified Stock Option Agreement

10.3		Non-Qualified Stock Option Agreement dated March 1, 2012, by and between Career Education Corporation and Steven H. Lesnik (Time-Based)

10.4		Non-Qualified Stock Option Agreement dated March 1, 2012, by and between Career Education Corporation and Steven H. Lesnik (Performance-Based)

10.5		Form of Restricted Stock Unit Agreement (Performance-Based)

10.6		Separation Agreement and General Release dated October 31, 2011, by and between Career Education Corporation and Thomas A. Budlong

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


CAREER EDUCATION CORPORATION

By:		/s/ Jeffrey D. Ayers
		Jeffrey D. Ayers Senior Vice President, General Counsel and Corporate Secretary

Dated: March 6, 2012

Exhibit Index


Exhibit Number		Description of Exhibits

10.1		Form of Restricted Stock Unit Agreement (Time-Based)

10.2		Form of Non-Qualified Stock Option Agreement

10.3		Non-Qualified Stock Option Agreement dated March 1, 2012, by and between Career Education Corporation and Steven H. Lesnik (Time-Based)

10.4		Non-Qualified Stock Option Agreement dated March 1, 2012, by and between Career Education Corporation and Steven H. Lesnik (Performance-Based)

10.5		Form of Restricted Stock Unit Agreement (Performance-Based)

10.6		Separation Agreement and General Release dated October 31, 2011, by and between Career Education Corporation and Thomas A. Budlong

EX-10.1 2 d311905dex101.htm FORM OF RESTRICTED STOCK UNIT AGREEMENT Form of Restricted Stock Unit Agreement

EXHIBIT 10.1

FORM OF

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated (the “Grant Date”) is by and between Career Education Corporation, a Delaware corporation (the “Company”), and (the “Grantee”).

To evidence such award and to set forth its terms, the Company and the Grantee agree as follows. All capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the Career Education Corporation 2008 Incentive Compensation Plan, as amended (the “Plan”).

1. Grant of Restricted Stock Units. Subject to and upon the terms and conditions set forth in this Agreement and the Plan, the Committee granted to the Grantee the following number of Restricted Stock Units (the “RSUs”) on the Grant Date, and the Grantee hereby accepts the grant of the RSUs as set forth herein:

Total Number of Restricted Stock Units Granted

and Available for Vesting under this Agreement: [Insert Number] (the “RSUs”)

2. Limitations on Transferability. At any time prior to the Settlement Date, the RSUs, or any interest therein, cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated, encumbered or otherwise disposed.

3. Dates of Vesting. Subject to the provisions of Sections 5 and 6 of this Agreement, the RSUs shall cease to be restricted and shall become non-forfeitable (thereafter being referred to as “Vested Shares”) in ([each such anniversary, a] “Vesting Date”); provided, however, that a whole number of RSUs shall vest on each Vesting Date and the Company shall accordingly allocate such RSUs across the Vesting Dates as evenly as possible.

Notwithstanding the foregoing, and subject to Sections 5 and 6 below, in the event that the Grantee incurs a Termination of Service prior to any Vesting Date, any RSUs that were unvested at the date of such Termination of Service shall be immediately forfeited to the Company.

4. Crediting and Settling RSUs.

(a) RSU Accounts. The Company shall establish an account on its books for each grantee who receives a grant of RSUs (the “RSU Account”). The RSUs granted hereby shall be credited to the Grantee’s RSU Account as of the Grant Date. The RSU Account shall be maintained for record keeping purposes only and the Company shall not be obligated to segregate or set aside assets representing securities or other amounts credited to the RSU Account. The obligation to make distributions of securities or other amounts credited to the RSU Account shall be an unfunded, unsecured obligation of the Company.

RSUs then credited to the Grantee’s RSU Account (or a specified portion in the event of any partial settlement). The Settlement Date for all RSUs credited to a Grantee’s RSU Account shall be as soon as administratively practical following when the Restrictions applicable to any portion of the RSUs granted hereby have lapsed, but in no event shall such Settlement Date be later than March 15 of the calendar year following the calendar year in which the Restrictions applicable to an the RSUs have lapsed.

5. Termination of Service. Subject to Section 6, the provisions of this Section 5 shall apply in the event the Grantee incurs a Termination of Service at any time prior to an applicable Vesting Date set forth in Section 3:

(a) If the Grantee incurs a Termination of Service because of his or her death or Disability, any RSUs that had not become Vested Shares prior to the date of the Termination of Service shall become Vested Shares, and, as of the relevant Settlement Date, the Grantee shall own a number of Shares equal to the whole number of Vested Shares underlying the RSUs free of all restrictions otherwise imposed by this Agreement except for Shares used to satisfy the tax withholding obligations set forth in Section 26 of this Agreement or otherwise required by any taxing authority.

(b) If the Grantee incurs a Termination of Service for any reason other than his or her death or Disability, then any RSUs that had not become Vested Shares prior to the date of the Termination of Service shall be immediately forfeited to the Company.

6. Change in Control. Upon a Change in Control, the Grantee will have such rights with respect to the RSUs as are provided for in the Plan.

7. Stock Certificates and Escrow. On each Settlement Date, the Company, at its election, shall either (a) credit any Shares issued to the Grantee pursuant hereto through a book entry on the records kept by the Company’s stockholder record keeper, or (b) issue certificates for such Shares.

8. Liability of the Company. The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and transfer of any Shares pursuant to this Agreement shall relieve the Company of any liability with respect to the non-issuance or transfer of the Shares as to which such approval shall not have been obtained. However, the Company shall use its best efforts to obtain all such approvals.

9. Adjustment in RSUs. The Committee may make or provide for such adjustments as provided for in Section 4.2 of the Plan.

10. Plan Amendment. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Grantee, adversely affect the rights of the Grantee under this Agreement, except as otherwise provided under the Plan.

11. Stockholder Rights. The RSUs shall not represent an equity security of the Company and shall not carry any voting or dividend rights. The Grantee shall have no rights of a stockholder of the Company with respect to any Vested Shares to be issued pursuant to a RSU until certificates for the Shares underlying the RSUs granted hereby are issued to the Grantee or such Shares are otherwise reflected in a book entry on the records kept by the Company’s stockholder record keeper. Notwithstanding the foregoing, on the relevant Settlement Date, the Grantee shall be entitled to receive an amount in cash equal to the dividends, if any, that would have become payable on or after the Vesting Date, but prior to the Settlement Date, with respect to the Shares issued on the Settlement Date.

12. Employment Rights. This Agreement is not a contract of employment, and the terms of employment of the Grantee or other relationship of the Grantee with the Company shall not be affected in any way by this Agreement except as specifically provided herein. Grantee’s execution or acceptance of this Agreement shall not be construed as conferring any legal rights upon the Grantee for a continuation of an employment or other relationship with the Company, nor shall it interfere with the right of the Company to discharge the Grantee and to treat him or her without regard to the effect which such treatment might have upon him or her as a Grantee.

13. Disclosure Rights. Except as required by applicable law, the Company (or any of its affiliates) shall not have any duty or obligation to disclose affirmatively to a record or beneficial holder of Common Stock, RSUs or Vested Shares, and such holder shall have no right to be advised of, any material information regarding the Company at any time prior to, upon or in connection with receipt of the Shares.

14. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by and enforced in accordance with the laws of the State of Delaware (other than its laws respecting choice of law).

15. Compliance with Laws and Regulations. Notwithstanding anything herein to the contrary, the Company shall not be obligated to either (a) cause to be issued or delivered any certificates for Shares, or (b) credit a book entry related to the Shares to be entered on the records of the Company’s stockholder record keeper, unless and until the Company is advised by its counsel that such issuance and delivery of such certificates or entry on the records, as applicable, is in compliance with all applicable laws, regulations of governmental authority, and the requirements of any exchange upon which Shares are traded. The Company may require, as a condition of such issuance and delivery of such certificates or entry on the records, as applicable, and in order to ensure compliance with such laws, regulations and requirements, that the Grantee make such covenants, agreements, and representations as the Company, in its sole discretion, considers necessary or desirable.

16. Successors and Assigns. Except as otherwise expressly set forth in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the succeeding administrators, heirs and legal representatives of the Grantee and the successors and assigns of the Company.

17. No Limitation on Rights of the Company. This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise make changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

18. Notices. Any communication or notice required or permitted to be given hereunder shall be in writing, and, if to the Company, to its principal place of business, attention: Secretary, and, if to the Grantee, to the address appearing on the records of the Company. Such communication or notice shall be delivered personally or sent by certified, registered, or express mail, postage prepaid, return receipt requested, or by a reputable overnight delivery service. Any such notice shall be deemed given when received by the intended recipient. Notwithstanding the foregoing, any notice required or permitted hereunder from the Company to the Grantee may be made by

electronic means, including by electronic mail to the Company-maintained electronic mailbox of the Grantee, and the Grantee hereby consents to receive such notice by electronic delivery. To the extent permitted in an electronically delivered notice described in the previous sentence, the Grantee shall be permitted to respond to such notice or communication by way of a responsive electronic communication, including by electronic mail.

19. Construction. Notwithstanding any other provision of this Agreement, this Agreement is made, and the RSUs and Shares are granted, pursuant to the Plan and are in all respects limited by and subject to the express provisions of the Plan, as amended from time to time. To the extent any provision of this Agreement is inconsistent or in conflict with any term or provision of the Plan, the Plan shall govern. The interpretation and construction by the Committee of the Plan, this Agreement and any such rules and regulations adopted by the Committee for purposes of administering the Plan, shall be final and binding upon the Grantee and all other persons.

20. Entire Agreement. This Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction.

21. Amendment. This Agreement may be amended as provided under the Plan, but except as provided in the Plan no such amendment shall adversely affect the Grantee’s rights under the Agreement without the Grantee’s written consent, unless otherwise permitted by the Plan.

22. Waiver; Cumulative Rights. The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time.

23. Counterparts. This Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

24. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

25. Severability. If any provision of this Agreement shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not effect any other provision hereof, and this Agreement shall be construed as if such invalid or unenforceable provision were omitted.

26. Tax Consequences. The Grantee acknowledges and agrees that the Grantee is responsible for all taxes and tax consequences with respect to the grant of RSUs, the lapse of restrictions otherwise imposed by this Agreement and the issuance of Shares pursuant hereto. The Grantee further acknowledges that it is the Grantee’s responsibility to obtain any advice that the Grantee deems necessary or appropriate with respect to any and all tax matters that may exist as a result of the grant of the RSUs, the lapse of restrictions otherwise imposed by this Agreement and the issuance of Shares pursuant hereto. Notwithstanding any other provision of this Agreement, Shares shall not be issued to the Grantee pursuant hereto unless, as provided in Section 17 of the Plan, the Grantee shall have paid to the Company, or made arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to the grant of the RSUs, the lapse of restrictions otherwise imposed by this Agreement and the issuance of Shares pursuant hereto.

27. Receipt of Plan. The Grantee acknowledges receipt of a copy of the Plan, and represents that the Grantee is familiar with the terms and provisions thereof, and hereby accepts the RSUs subject to all the terms and provisions of this Agreement and of the Plan. The Shares issued pursuant hereto are granted pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and the RSUs and such Shares shall in all respects be interpreted in accordance with the Plan. The Committee shall interpret and construe the Plan and this Agreement, and its interpretation and determination shall be conclusive and binding upon the parties hereto and any other person claiming an interest hereunder, with respect to any issue arising hereunder or thereunder.

28. Restrictive Covenants. [The following shall be applicable to Non-California and Non-Attorney Grantees] In consideration of receiving the RSUs hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools, provides on-line education classes or otherwise conducts business. The Grantee further acknowledges that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or its subsidiaries’ legitimate business interests.

During the Grantee’s employment with the Company and/or any of its subsidiaries and continuing thereafter for the post-termination periods specified below, the Grantee will not, in any way, directly or indirectly, either for the Grantee or any other person or entity, whether paid or unpaid:

(a) For months following Grantee’s voluntary resignation from Grantee’s employment with the Company or Grantee’s termination from employment by the Company for Cause, accept employment with, own, manage, operate, consult or provide expert services to any person or entity that competes with the Company or any of its subsidiaries in any capacity that involves any responsibilities or activities involving or relating to any Competing Educational Service, as defined herein. “Competing Educational Service” means any educational service that competes with the educational services provided by the Company and/or any of its subsidiaries, including but not limited to coursework in the areas of visual communication and design technologies; information technology; business studies; culinary arts; and health education, or any education service. The Grantee hereby acknowledges that the following organizations, among others, provide Competing Educational Services and, should the Grantee accept employment with, own, manage, operate, consult or provide expert services to any of these organizations, it would inevitably require the use and/or disclosure of confidential information belonging to the Company and/or its subsidiaries and would provide such organizations with an unfair business advantage over the Company: DeVry Inc., Kaplan, Inc., Apollo Group Inc., Education Management LLC, Embanet Corporation, Capella Education Company, ITT Educational Services, Inc., Corinthian Colleges, Inc., Laureate Education, Inc. and Strayer Education, Inc. and each of their respective subsidiaries, affiliates and successors. The Grantee further acknowledges that the Company and/or its subsidiaries provide career-

oriented education through physical and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. For avoidance of doubt, in the event the Grantee is involuntarily terminated from employment with the Company other than for Cause, the Grantee will not be subject to any post-termination noncompete restriction under this Section 28(a).

(b) For months following Grantee’s termination of employment with the Company for any reason, solicit, attempt to solicit, assist with the solicitation of, direct another to solicit, or otherwise entice any employee of the Company or any of its subsidiaries to leave his/her employment.

Should the Grantee breach the terms of these Restrictive Covenants, the Company reserves the right to enforce the terms herein in court and seek any and all remedies available to it in equity and law, and the Grantee agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Grantee breach the terms of these Restrictive Covenants, the Grantee will forfeit any right to the RSUs or Shares issued hereunder, subject to the terms and conditions of the Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or Shares issued pursuant hereto.

It is the intention of the Grantee and the Company that in the event any of the covenants contained in these Restrictive Covenants are determined to be unreasonable and/or unenforceable with respect to scope, time or geographical coverage, the Grantee and the Company agree that such covenants may be modified and narrowed by a court, so as to provide the maximum legally enforceable protection of the Company’s and any of its subsidiaries’ interests as described in this Agreement.

[The following shall be applicable to California and Attorney Grantees] In consideration of receiving the RSUs hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools, provides on-line education classes or otherwise conducts business. The Grantee further acknowledges that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or its subsidiaries’ legitimate business interests.

29. Condition to Accept Agreement. This Agreement will be null and void unless the Grantee indicates his or her acceptance of the award of RSUs provided for hereunder by signing, dating and returning this Agreement to the Company on or before .

[Signature Page Follows]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.

CAREER EDUCATION CORPORATION

By:

Name:

Title:

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

The undersigned, the Grantee, hereby: (select one of the options below)

¨	ACCEPTS the award of RSUs as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.

REJECTS the award of RSUs contemplated by this Agreement and forfeits all rights relating thereto. Please note that a rejection of this award has no impact on any other award of options, restricted stock or restricted stock units you have previously received, including any restrictive covenants you are subject to pursuant to the agreement(s) governing your previous awards.

Please sign and return your signed copy of this Restricted Stock Unit Agreement by , to at CEC corporate via pdf, fax or inter-office mail ([insert email address] or [insert fax #] (fax)). Failure to do so will result in forfeiture of the award. Please retain a copy of this signed Restricted Stock Unit Agreement for your records.

EX-10.2 3 d311905dex102.htm FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT Form of Non-Qualified Stock Option Agreement

EXHIBIT 10.2

FORM OF

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”) dated (the “Grant Date”) is by and between Career Education Corporation, a Delaware corporation (the “Company”), and (the “Grantee”).

In accordance with Section 6 of the Career Education Corporation 2008 Incentive Compensation Plan, as amended (the “Plan”), and subject to the terms of the Plan and this Agreement, the Company hereby grants to the Grantee an option to purchase shares of common stock, par value $0.01 per share, of the Company (“Shares”) on the terms and conditions as set forth below (“Option”). The Option granted hereby is not intended to constitute an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Plan.

To evidence the Option and to set forth its terms, the Company and the Grantee agree as follows:

1. Grant. The Committee hereby grants the Option to the Grantee on the Grant Date for the purchase from the Company of all or any part of an aggregate of Shares (subject to adjustment as provided in Section 4.2 of the Plan).

2. Option Price. The purchase price per Share purchasable under the Option shall be $ per Share (the “Option Price”) (subject to adjustment as provided in Section 4.2 of the Plan). The Option Price is equal to 100% of the Fair Market Value of one share of Common Stock on the Grant Date, as calculated under the Plan.

3. Term and Vesting of the Option. The Option Term shall expire on the tenth anniversary of the Grant Date. The Option shall vest and become exercisable ([each such anniversary, a] “Vesting Date”); provided, however, that the Option shall only vest and become exercisable with respect to a whole number of Shares on each Vesting Date and the Company shall accordingly allocate such vesting across the Vesting Dates as evenly as possible. Except as otherwise provided herein, the Option may be exercised on or following the applicable Vesting Dates with respect to the vested portion, as long as such exercise occurs prior to the expiration of the Option as provided in this Agreement and the Plan.

Notwithstanding the foregoing provisions of this Section 3, and except as otherwise determined by the Committee, as provided in the Plan or as provided herein, any portion of the Option which is not vested (or otherwise not exercisable) at the time of the Grantee’s Termination of Service shall not become exercisable after such termination and shall be immediately cancelled and forfeited to the Company.

4. Exercisability. In the event the Grantee incurs a Termination of Service for any reason, the Grantee will have such rights with respect to the Option as are provided for in the Plan.

5. Exercise of Option. On or after the date any portion of the Option becomes exercisable, but prior to the expiration of the Option in accordance with Sections 3 and 4 above, the portion of the Option that has become exercisable may be exercised in whole or in part by the Grantee (or, pursuant to Section 6, by his or her permitted successor) upon delivery of the following to the Company (or any Person designated by the Company):

(a) a written notice of exercise (which may include a notice made through any electronic system designated by the Company) which identifies this Agreement and states the number of whole Shares then being purchased; and

(b) any combination of cash (or by certified or personal check or wire transfer), and/or (i) with the approval of the Committee, Shares or Shares of Restricted Stock then owned by the Grantee in an amount having a combined Fair Market Value on the exercise date equal to the aggregate Option Price of the Shares then being purchased, or (ii) unless otherwise prohibited by law for either the Company or the Grantee, an irrevocable authorization of a third party to sell Shares acquired upon the exercise of the Option and promptly remit to the Company a sufficient portion of the sale proceeds to pay the entire Option Price and any tax withholdings resulting from such exercise.

Notwithstanding the foregoing, the Grantee (or any permitted successor) shall take whatever additional actions, including, without limitation, the furnishing of an opinion of counsel, and execute whatever additional documents the Company may, in its sole discretion, deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed by the Plan, this Agreement or applicable law.

No Shares shall be issued upon exercise of the Option until full payment has been made. Upon satisfaction of the conditions and requirements of this Section 5 and the Plan, the Company, in its sole discretion, shall either (a) credit the number of Shares for which the Option was exercised in a book entry on the records kept by the Company’s stockholder record keeper or (b) shall deliver to the Grantee (or his or her permitted successor) a certificate or certificates for the number of Shares in respect of which the Option shall have been exercised. Upon exercise of the Option (or a portion thereof), the Company shall have a reasonable time to issue shares or credit a book entry for the Common Stock for which the Option has been exercised, and the Grantee shall not be treated as a stockholder for any purpose whatsoever prior to such issuance or book entry. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date such Common Stock is recorded as issued and transferred in the Company’s official stockholder records, except as otherwise provided in the Plan or this Agreement.

6. Limitation Upon Transfer. The Option and all rights granted hereunder shall not (a) be transferred by the Grantee, other than by will, by the laws of descent and distribution, or to a Permitted Transferee; (b) be otherwise assigned, pledged or hypothecated in any way; and (c) be subject to execution, attachment or similar process. Any attempt to transfer the Option, other than by will or by the laws of descent and distribution or to a Permitted Transferee, or to assign, pledge or hypothecate or otherwise dispose of the Option or of any rights granted hereunder contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option or such rights, shall be void and unenforceable against the Company or any Subsidiary; provided, however, that the Grantee may designate a Beneficiary to receive benefits in the event of the Grantee’s death. The Option shall be exercised during the Grantee’s lifetime only by the Grantee, the Grantee’s guardian, the Grantee’s legal representative or a Permitted Transferee.

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7. Change in Control. Upon a Change in Control, the Grantee will have such rights with respect to the Option as are provided for in the Plan.

8. Effect of Amendment of Plan. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Grantee, adversely affect the rights of the Grantee under the Option, except as otherwise provided under the Plan.

This Agreement may be amended as provided under the Plan, but no such amendment shall adversely affect the Grantee’s rights under the Agreement without the Grantee’s written consent, unless otherwise permitted by the Plan.

9. No Limitation on Rights of the Company. The grant of the Option shall not in any way affect the right or power of the Company to make adjustments, reclassifications, or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

10. Rights as a Stockholder. The Grantee shall have the rights of a stockholder with respect to the Shares subject to the Option only upon becoming the holder of record of such Shares.

11. Compliance with Applicable Law. Notwithstanding anything herein to the contrary, the Company shall not be obligated to either (a) cause to be issued or delivered any certificates for Shares pursuant to the exercise of the Option, or (b) credit a book entry related to the shares issued pursuant to the exercise of the Option to be entered on the records of the Company’s stockholder record keeper, unless and until the Company is advised by its counsel that the issuance and delivery of such certificates or entry on the records, as applicable, is in compliance with all applicable laws, regulations of governmental authority, and the requirements of any exchange upon which Shares are traded. The Company may require, as a condition of the issuance and delivery of such certificates or entry on the records, as applicable, and in order to ensure compliance with such laws, regulations and requirements, that the Grantee make such covenants, agreements, and representations as the Company, in its sole discretion, considers necessary or desirable.

12. No Obligation to Exercise Option. The granting of the Option shall impose no obligation upon the Grantee to exercise the Option.

13. Agreement Not a Contract of Employment or Other Relationship. This Agreement is not a contract of employment, and the terms of employment of the Grantee or other relationship of the Grantee with the Company or its Subsidiaries shall not be affected in any way by this Agreement except as specifically provided herein. The execution of this Agreement shall not be construed as conferring any legal rights upon the Grantee for a continuation of an employment or other relationship with the Company or its Subsidiaries, nor shall it interfere with the right of the Company or its Subsidiaries to discharge the Grantee and to treat him or her without regard to the effect that such treatment might have upon him or her as a Grantee.

14. Withholding. If the Company is obligated to withhold an amount on account of any tax imposed as a result of the exercise of the Option, the Grantee shall be required to pay such amount to the Company, or make arrangements satisfactory to the Company regarding the payment of such amount, as provided in Section 17 of the Plan. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Grantee. The Grantee acknowledges and agrees that he or she is responsible for the tax consequences associated with the grant and exercise of the Option.

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15. Notices. Any communication or notice required or permitted to be given hereunder shall be in writing, and, if to the Company, to its principal place of business, attention: Secretary, and, if to the Grantee, to the address appearing on the records of the Company. Such communication or notice shall be delivered personally or sent by certified, registered, or express mail, postage prepaid, return receipt requested, or by a reputable overnight delivery service. Any such notice shall be deemed given when received by the intended recipient. Notwithstanding the foregoing, any notice required or permitted hereunder from the Company to the Grantee may be made by electronic means, including by electronic mail to the Company-maintained electronic mailbox of the Grantee, and the Grantee hereby consents to receive such notice by electronic delivery. To the extent permitted in an electronically delivered notice described in the previous sentence, the Grantee shall be permitted to respond to such notice or communication by way of a responsive electronic communication, including by electronic mail.

16. Governing Law. Except to the extent preempted by federal law, this Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of Delaware without regard to the principles thereof relating to the conflicts of laws.

17. Receipt of Plan. The Grantee acknowledges receipt of a copy of the Plan, and represents that the Grantee is familiar with the terms and provisions thereof, and hereby accepts the Option subject to all the terms and provisions of this Agreement and of the Plan. The Option is granted pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and the Option shall in all respects be interpreted in accordance with the Plan. The Committee shall interpret and construe the Plan and this Agreement, and its interpretation and determination shall be conclusive and binding upon the parties hereto and any other person claiming an interest hereunder, with respect to any issue arising hereunder or thereunder.

18. Restrictive Covenants. [The following shall be applicable to Non-California and Non-Attorney Grantees] In consideration of receiving the Option hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools, provides on-line education classes or otherwise conducts business. The Grantee further acknowledges that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or its subsidiaries’ legitimate business interests.

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Should the Grantee breach the terms of these Restrictive Covenants, the Company reserves the right to enforce the terms herein in court and seek any and all remedies available to it in equity and law, and the Grantee agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Grantee breach the terms of these Restrictive Covenants, the Grantee will forfeit any right to the Option or Shares issued hereunder, subject to the terms and conditions of the Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering the Option or Shares issued pursuant hereto.

[The following shall be applicable to California and Attorney Grantees] In consideration of receiving the Option hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools,

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provides on-line education classes or otherwise conducts business. The Grantee further acknowledges that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or its subsidiaries’ legitimate business interests.

Should the Grantee breach the terms of these Restrictive Covenants, the Company reserves the right to enforce the terms herein in court and seek any and all remedies available to it in equity and law, and the Grantee agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Grantee breach the terms of these Restrictive Covenants, the Grantee will forfeit any right to the Option or Shares issued hereunder, subject to the terms and conditions of the Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering the Option or Shares issued pursuant hereto.

19. Condition to Return Signed Agreement. This Agreement shall be null and void unless the Grantee indicates his or her acceptance of the Option and this Agreement by signing, dating, and returning this Agreement to the Company on or before .

20. Other Terms and Conditions. The foregoing does not modify or amend any terms of the Plan. To the extent any provisions of the Agreement are inconsistent or in conflict with any terms or provisions of the Plan, the Plan shall govern.

[Signature Page Follows]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.


CAREER EDUCATION CORPORATION

By:
Name:
Title:

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

The undersigned, the Grantee, hereby: (select one of the options below)

ACCEPTS the award of the Option as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.

REJECTS the award of the Option contemplated by this Agreement and forfeits all rights relating thereto. Please note that a rejection of this award has no impact on any other award of options, restricted stock or restricted stock units you have previously received, including any restrictive covenants you are subject to pursuant to the agreement(s) governing your previous awards.

Please sign and return your signed copy of this Stock Option Agreement by , to at CEC corporate via pdf, fax or inter-office mail ([insert email address] or [insert fax #] (fax)). Failure to do so will result in forfeiture of the award. Please retain a copy of this signed Stock Option Agreement for your records.

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EX-10.3 4 d311905dex103.htm NON-QUALIFIED STOCK OPTION AGREEMENT DATED MARCH 1, 2012 Non-Qualified Stock Option Agreement dated March 1, 2012

EXHIBIT 10.3

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”) dated March 1, 2012 (the “Grant Date”) is by and between Career Education Corporation, a Delaware corporation (the “Company”), and Steven H. Lesnik (the “Grantee”).

To evidence the Option and to set forth its terms, the Company and the Grantee agree as follows:

1. Grant. The Committee hereby grants the Option to the Grantee on the Grant Date for the purchase from the Company of all or any part of an aggregate of 114,811 Shares (subject to adjustment as provided in Section 4.2 of the Plan).

2. Option Price. The purchase price per Share purchasable under the Option shall be $8.63 per Share (the “Option Price”) (subject to adjustment as provided in Section 4.2 of the Plan). The Option Price is equal to 100% of the Fair Market Value of one share of Common Stock on the Grant Date, as calculated under the Plan.

3. Term and Vesting of the Option. The Option Term shall expire on the tenth anniversary of the Grant Date. The Option shall vest and become exercisable in full on the first anniversary of the Grant Date (the “Vesting Date”). Except as otherwise provided herein, the Option may be exercised on or following the Vesting Date, as long as such exercise occurs prior to the expiration of the Option as provided in this Agreement and the Plan.

4. Termination of Service. Notwithstanding the provisions of the Plan, In the event the Grantee incurs a Termination of Service for any reason, the provisions of this Section 4 shall control.

(a) In the event the Grantee incurs a Termination of Service prior to the Vesting Date due to his death or Disability, the Option shall become fully vested and exercisable and shall remain outstanding until the third anniversary of such Termination of Service. Any portion of the Option that remains outstanding at such time shall be immediately forfeited.

(b) In the event the Grantee incurs a Termination of Service for Cause, any portion of the Option that remains outstanding at the time of such Termination of Service shall be immediately forfeited.

(c) In the event the Grantee incurs a Termination of Service for any reason other than his death or Disability prior to the Vesting Date, any portion of the Option that remains outstanding at the time of such Termination of Service shall be immediately forfeited.

(d) In the event the Grantee incurs a Termination of Service for any reason other than Cause following the Vesting Date, the Option shall remain outstanding and exercisable until the first to occur of (i) the third anniversary of such Termination of Service, and (ii) the expiration of the Option Term.

5. Exercise of Option. On or after the date the Option becomes exercisable, but prior to the expiration of the Option in accordance with Sections 3 and 4 above, the Option that may be exercised in whole or in part by the Grantee (or, pursuant to Section 6, by his or her permitted successor) upon delivery of the following to the Company (or any Person designated by the Company):

7. Change in Control. Upon a Change in Control, the Grantee will have such rights with respect to the Option as are provided for in the Plan. In addition, in the event of a Termination of Service for any reason other than Cause during the two-year period following the occurrence of a Change in Control, the Option shall remain outstanding and exercisable until the firs to occur of (i) the third anniversary of such Termination of Service, and (ii) the expiration of the Option Term.

10. Rights as a Stockholder. The Grantee shall have the rights of a stockholder with respect to the Shares subject to the Option only upon becoming the holder of record of such Shares.

12. No Obligation to Exercise Option. The granting of the Option shall impose no obligation upon the Grantee to exercise the Option.

18. Restrictive Covenants. In consideration of receiving the Option hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools, provides on-line education classes or otherwise conducts business. The Grantee further acknowledges that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or its subsidiaries’ legitimate business interests.

(a) For twelve (12) months following Grantee’s voluntary resignation from Grantee’s employment with the Company or Grantee’s termination from employment by the Company for Cause, accept employment with, own, manage, operate, consult or provide expert services to any person or entity that competes with the Company or any of its subsidiaries in any capacity that involves any responsibilities or activities involving or relating to any Competing Educational Service, as defined herein. “Competing Educational Service” means any educational service that competes with the educational services provided by the Company and/or any of its subsidiaries, including but not limited to coursework in the areas of visual communication and design technologies; information technology; business studies; culinary arts; and health education, or any education service. The Grantee hereby acknowledges that the following organizations, among others, provide Competing Educational Services and, should the Grantee accept employment with, own, manage, operate, consult or provide expert services to any of these organizations, it would inevitably require the use and/or disclosure of confidential information belonging to the Company and/or its subsidiaries and would provide such organizations with an unfair business advantage over the Company: DeVry Inc., Kaplan, Inc., Apollo Group Inc., Education Management LLC, Embanet Corporation, Capella Education Company, ITT Educational Services, Inc., Corinthian Colleges, Inc., Laureate Education, Inc. and Strayer Education, Inc. and each of their respective subsidiaries, affiliates and successors. The Grantee further acknowledges that the Company and/or its subsidiaries provide career-oriented education through physical and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. For the avoidance of doubt, if the Grantee is involuntarily terminated from employment with the Company other than for Cause, the Grantee will not be subject to any post-termination non-compete restriction under this Section 18(a).

(b) For twelve (12) months following Grantee’s termination of employment with the Company for any reason, solicit, attempt to solicit, assist with the solicitation of, direct another to solicit, or otherwise entice any employee of the Company or any of its subsidiaries to leave his/her employment.

it succeed on its claim(s). Further, should the Grantee breach the terms of these Restrictive Covenants, the Grantee will forfeit any right to the Option or Shares issued hereunder, subject to the terms and conditions of the Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering the Option or Shares issued pursuant hereto.

[Signature Page Follows]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.


				CAREER EDUCATION CORPORATION

				/s/ Michael J. Graham
				Executive Vice President and Chief Financial Officer

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

The undersigned, the Grantee, hereby: (select one of the options below)

x	ACCEPTS the award of the Option as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.


Date: 3/2/12				/s/ Steven H. Lesnik
				(Signature of Grantee)
				Print Name: Steven H. Lesnik

Please sign and return your signed copy of this Stock Option Agreement by March 20, 2012, to Catherine Andersen at CEC corporate via pdf, fax or inter-office mail (CAndersen@careered.com or 847-551-7416 (fax)). Failure to do so will result in forfeiture of the award. Please retain a copy of this signed Stock Option Agreement for your records.

EX-10.4 5 d311905dex104.htm NON-QUALIFIED STOCK OPTION AGREEMENT DATED MARCH 1, 2012 Non-Qualified Stock Option Agreement dated March 1, 2012

EXHIBIT 10.4

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

To evidence the Option and to set forth its terms, the Company and the Grantee agree as follows:

1. Grant. The Committee hereby grants the Option to the Grantee on the Grant Date for the purchase from the Company of all or any part of an aggregate of 143,513 Shares (subject to adjustment as provided in Section 4.2 of the Plan).

3. Term, Vesting and Forfeiture of the Option.

(a) The Option Term shall expire on the tenth anniversary of the Grant Date. In all cases, any portion of the Option that remains outstanding at the time of the expiration of the Option Term shall be immediately forfeited.

(b) The Option shall vest in full upon the later to occur of (i) the first anniversary of the Grant Date, and (ii) satisfaction of Performance Criteria (such later occurrence, the “Vesting Date”). For the avoidance of doubt, the Option shall be immediately forfeited and shall not vest if (A) the Grantee incurs a Termination of Service prior to the first anniversary of the Grant Date for any reason other than his death or Disability, or (B) the Performance Criteria are not timely satisfied. For purposes of this Agreement, satisfaction of the “Performance Criteria” shall occur when the closing trading price of a Share (as reported by NASDAQ) equals or exceeds $30.00 for any 30 trading days during any 90 calendar day period occurring between the Grant Date and the third anniversary of the Grant Date.

(c) Notwithstanding the foregoing provisions of this Section 3 or the provisions of the Plan, if the Grantee incurs a Termination of Service, the following provisions shall apply:

(i) In the event the Grantee incurs a Termination of Service by reason of his death or Disability following the Vesting Date, then the Option shall remain outstanding until the first to occur of (A) the third anniversary of such Termination of Service, or (B) the expiration of the Option Term. Thereafter, any portion of the Option which remains unexercised shall be immediately forfeited.

(ii) In the event the Grantee incurs a Termination of Service by reason of his death or Disability prior to the timely satisfaction of the Performance Criteria and prior to the third anniversary of the Grant Date, then the Option shall remain outstanding and shall vest in full if the Performance Criteria are timely satisfied. If the Performance Criteria are timely satisfied, then the Option shall remain outstanding and exercisable until the third anniversary of the date the Performance Criteria are timely satisfied and any portion of the Option that remains unexercised thereafter shall be immediately forfeited. If the Performance Criteria are not timely satisfied, then the Option shall never vest and shall be immediately forfeited upon the third anniversary of the Grant Date.

(iii) In the event the Grantee incurs a Termination of Service for Cause, any portion of the Option that remains outstanding at the time of such Termination of Service shall be immediately forfeited.

(iv) In the event the Grantee incurs a Termination of Service for any reason other than his death, his Disability or for Cause after the first anniversary of the Grant Date but prior to the Vesting Date, then the Option shall remain outstanding and shall vest in full if the Performance Criteria are timely satisfied. If the Performance Criteria are timely satisfied, then the Option shall remain outstanding and exercisable until the third anniversary of the date the Performance Criteria are timely satisfied and any portion of the Option that remains unexercised thereafter shall be immediately forfeited. If the Performance Criteria are not timely satisfied, then the Option shall never vest and shall be immediately forfeited upon the third anniversary of the Grant Date. For the avoidance of doubt, in the event the Grantee incurs a Termination of Service for any reason other than his death, his Disability or for Cause prior to the first anniversary of the Grant Date, then the terms of Section 3(b) hereof shall control.

4. [Reserved].

5. Exercise of Option. On or after the date the Option becomes exercisable, but prior to the expiration of the Option in accordance with Sections 3 above, the Option may be exercised in whole or in part by the Grantee (or, pursuant to Section 6, by his or her permitted successor) upon delivery of the following to the Company (or any Person designated by the Company):

7. Change in Control. Notwithstanding the provisions of the Plan or Section 3 above, upon a Change in Control prior to the timely satisfaction of the Performance Criteria and prior to the third anniversary of the Grant Date, (a) the Option shall remain outstanding and shall vest in full if the Performance Criteria are timely satisfied (or, if later, on the first anniversary of the Grant Date), (b) if the Performance Criteria are not timely satisfied, then the Option shall never vest and shall be immediately forfeited upon the third anniversary of the Grant Date. Notwithstanding the provisions of the Plan or Section 3 above, if the Grantee incurs a Termination of Service by the Company without Cause during the two-year period following the occurrence of a Change in Control prior to the timely satisfaction of the Performance Criteria then the Option shall remain outstanding and (i) shall vest in full if the Performance Criteria are timely satisfied and shall remain outstanding until the third anniversary of the date the Performance Criteria were timely satisfied (and any portion of the Option which thereafter remains outstanding shall be immediately forfeited), or (ii) shall be immediately forfeited if the Performance Criteria are not timely satisfied. For the avoidance of doubt, if the Grantee incurs a Termination of Service for any reason other than by the Company without Cause during the two-year period following the occurrence of a Change in Control, then the provisions of Section 3(d) hereof shall control, except that for this purpose, the Grantee will be treated as if he had continued to provide service to the Company through the first anniversary of the Grant Date.

10. Rights as a Stockholder. The Grantee shall have the rights of a stockholder with respect to the Shares subject to the Option only upon becoming the holder of record of such Shares.

12. No Obligation to Exercise Option. The granting of the Option shall impose no obligation upon the Grantee to exercise the Option.

educational service that competes with the educational services provided by the Company and/or any of its subsidiaries, including but not limited to coursework in the areas of visual communication and design technologies; information technology; business studies; culinary arts; and health education, or any education service. The Grantee hereby acknowledges that the following organizations, among others, provide Competing Educational Services and, should the Grantee accept employment with, own, manage, operate, consult or provide expert services to any of these organizations, it would inevitably require the use and/or disclosure of confidential information belonging to the Company and/or its subsidiaries and would provide such organizations with an unfair business advantage over the Company: DeVry Inc., Kaplan, Inc., Apollo Group Inc., Education Management LLC, Embanet Corporation, Capella Education Company, ITT Educational Services, Inc., Corinthian Colleges, Inc., Laureate Education, Inc. and Strayer Education, Inc. and each of their respective subsidiaries, affiliates and successors. The Grantee further acknowledges that the Company and/or its subsidiaries provide career-oriented education through physical and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. For the avoidance of doubt, if the Grantee is involuntarily terminated from employment with the Company other than for Cause, the Grantee will not be subject to any post-termination non-compete restriction under this Section 18(a).

Should the Grantee breach the terms of these Restrictive Covenants, the Company reserves the right to enforce the terms herein in court and seek any and all remedies available to it in equity and law, and the Grantee agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Grantee breach the terms of these Restrictive Covenants, the Grantee will forfeit any right to the Option or Shares issued hereunder, subject to the terms and conditions of the Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering the Option or Shares issued pursuant hereto.

[Signature Page Follows]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.


				CAREER EDUCATION CORPORATION

				/s/ Michael J. Graham
				Executive Vice President and Chief Financial Officer

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

The undersigned, the Grantee, hereby: (select one of the options below)

x	ACCEPTS the award of the Option as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.


Date: 3/2/12				/s/ Steven H. Lesnik
				(Signature of Grantee)
				Print Name: Steven H. Lesnik

EX-10.5 6 d311905dex105.htm FORM OF RESTRICTED STOCK UNIT AGREEMENT Form of Restricted Stock Unit Agreement

EXHIBIT 10.5

FORM OF

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

RESTRICTED STOCK UNIT AGREEMENT

Total Number of Restricted Stock Units Granted

and Available for Vesting under this Agreement: [Insert Number] (the “RSUs”)

3. Dates of Vesting. Subject to the provisions of Sections 5 and 6 of this Agreement, the RSUs shall cease to be restricted and shall become non-forfeitable (thereafter being referred to as “Vested Shares”) on the anniversary of the Grant Date (the “Vesting Date”), but only if the Performance Criteria set forth on Exhibit A attached hereto have been satisfied. If, as of the Vesting Date, the Performance Criteria set forth on Exhibit A attached hereto have not been satisfied, then the RSUs shall be immediately forfeited.

Notwithstanding the foregoing, and subject to Sections 5 and 6 below, in the event that the Grantee incurs a Termination of Service prior to the Vesting Date, any RSUs that were unvested at the date of such Termination of Service shall be immediately forfeited to the Company.

4. Crediting and Settling RSUs.

(b) Settlement of RSU Accounts. The Company shall settle the RSU Account by delivering to the holder thereof (who may be the Grantee or his or her Beneficiary, as applicable) a number of Shares equal to the whole number of Vested Shares underlying the RSUs then credited to the Grantee’s RSU Account (or a specified portion in the event of any partial settlement). The Settlement Date for all RSUs credited to a Grantee’s RSU Account shall be as soon as administratively practical following when the Restrictions applicable to any portion of the RSUs granted hereby have lapsed, but in no event shall such Settlement Date be later than March 15 of the calendar year following the calendar year in which the Restrictions applicable to an the RSUs have lapsed.

5. Termination of Service. Subject to Section 6, the provisions of this Section 5 shall apply in the event the Grantee incurs a Termination of Service at any time prior to the Vesting Date set forth in Section 3:

(a) If the Grantee incurs a Termination of Service because of his death or Disability, any RSUs that had not become Vested Shares prior to the date of the Termination of Service shall become Vested Shares, and, as of the relevant Settlement Date, the Grantee shall own a number of Shares equal to the whole number of Vested Shares underlying the RSUs free of all restrictions otherwise imposed by this Agreement except for Shares used to satisfy the tax withholding obligations set forth in Section 26 of this Agreement or otherwise required by any taxing authority.

6. Change in Control. Upon a Change in Control, the Grantee will have such rights with respect to the RSUs as are provided for in the Plan.

7. Stock Certificates and Escrow. On the Settlement Date, the Company, at its election, shall either (a) credit any Shares issued to the Grantee pursuant hereto through a book entry on the records kept by the Company’s stockholder record keeper, or (b) issue certificates for such Shares.

9. Adjustment in RSUs. The Committee may make or provide for such adjustments as provided for in Section 4.2 of the Plan.

12. Employment Rights. This Agreement is not a contract of employment, and the terms of employment of the Grantee or other relationship of the Grantee with the Company shall not be affected in any way by this Agreement except as specifically provided herein. The Grantee’s execution or acceptance of this Agreement shall not be construed as conferring any legal rights upon the Grantee for a continuation of an employment or other relationship with the Company, nor shall it interfere with the right of the Company to discharge the Grantee and to treat him or her without regard to the effect which such treatment might have upon him or her as a Grantee.

23. Counterparts. This Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument.

24. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

28. Restrictive Covenants. In consideration of receiving the RSUs hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools, provides on-line education classes or otherwise conducts business. The Grantee further acknowledges that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or its subsidiaries’ legitimate business interests.

therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. For the avoidance of doubt, in the event the Grantee is involuntarily terminated from employment with the Company other than for Cause, the Grantee will not be subject to any post-termination noncompete restriction under this Section 28(a).

[Signature Page Follows]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.


CAREER EDUCATION CORPORATION

By:
Name:
Title:

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

The undersigned, the Grantee, hereby: (select one of the options below)

¨	ACCEPTS the award of RSUs as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.


Date:
				(Signature of Grantee)
				Print Name:

Please sign and return your signed copy of this Restricted Stock Unit Agreement by , to at CEC corporate via pdf, fax or inter-office mail ([insert email address] or [insert fax #] (fax)). Failure to do so will result in forfeiture of the award. Please retain a copy of this signed Restricted Stock Unit Agreement for your records.

EXHIBIT A

PERFORMANCE CRITERIA

EX-10.6 7 d311905dex106.htm SEPARATION AGREEMENT AND GENERAL RELEASE DATED OCTOBER 31, 2011 Separation Agreement and General Release dated October 31, 2011

Exhibit 10.6

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement”) is made and entered into by and between Thomas G. Budlong (the “Executive”) and Career Education Corporation, a Delaware corporation (the “Company”).

1. Separation and Effective Dates. The Executive’s employment with the Company and, to the extent applicable, with its direct and indirect subsidiaries, affiliates, companies, divisions, units, schools, and affiliated schools (the “Company Affiliates”), terminates effective October 31, 2011 (the “Separation Date”). Executive agrees that on or before the Separation Date, Executive will tender his resignation from any officer and/or director positions held with any subsidiary companies or affiliates including Istituto Marangoni S.r.l., International University of Monaco and Career Education Corporation France. The Executive understands and agrees that from and after the Separation Date, he is no longer authorized to incur any expenses, obligations or liabilities on behalf of the Company or the Company Affiliates. This Agreement shall not become effective or enforceable until all parties have signed an original of this Agreement and the revocation period referenced in Paragraph 19 has expired. The Executive may not sign this agreement until close of business on October 31, 2011.

2. No Claims. The Executive represents and agrees that he has not filed any notices, claims, complaints, charges, or lawsuits of any kind whatsoever against the Releasees (as defined in Paragraph 11) with any court, any governmental agency, any regulatory body or any other third party with respect to any matter related to the Company, a Company Affiliate or a Releasee, or arising out of his employment with and/or separation from the Company.

3. Payment of Moneys Owed. The Executive and the Company acknowledge that the Company has paid, or will pay no later than November 15, 2011, all remuneration owed to the Executive as a result of his employment with and separation from the Company, related to (a) his salary through the Separation Date, (b) all accrued (but unused) vacation pay for 2011 through the Separation Date, and (c) all business expenses, if any, incurred by him through the Separation Date as a result of his employment with the Company, provided that such expenses are authorized under and consistent with the expense reimbursement policies of the Company. Except as specifically provided for in this Paragraph 3 and in Paragraphs 6 and 9, the Executive shall not be entitled to receive any compensation or benefits of employment from the Company or any Company Affiliate following the Separation Date.

4. Non-Admission of Liability and Acknowledgement of Compliance. This Agreement and the fact that it was offered are not and shall not in any way be construed as admissions by the Company that it violated any federal, state or local law, statute or regulation, or that it acted wrongfully with respect to the Executive or to any other person or entity in any manner. The Company specifically disclaims any liability to or wrongful acts against the Executive or any other person or entity. Further, the Executive acknowledges and agrees that it is the policy of the Company to comply with all applicable federal, state and local laws and regulations. The Executive affirms that he has reported all compliance issues and violations of federal, state and local laws or regulations or Company policy of which he had knowledge during

the term of his employment, if any. The Executive represents and acknowledges that he has no further or additional knowledge or information regarding compliance issues or possible violations of federal, state or local laws or regulations or Company policy other than what the Executive has previously raised, if any.

5. Non-Admissibility. Neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in any proceeding as evidence of or an admission by the Company or the Executive of any violation of any state, federal or local laws or regulations or any rules, regulations, criteria or standards of any regulatory body. This Agreement may be introduced, however, in any proceeding to enforce the Agreement.

6. Consideration.

6.1 Severance, AIP and COBRA. In exchange for the promises and agreements made by the Executive contained in this Agreement and in addition to the benefits provided there under, the Company will (a) within ten (10) days following the date this Agreement may no longer be revoked by the Executive as described in Paragraph 19 of this Agreement (and provided that this Agreement has not been revoked), pay to the Executive a lump-sum payment of $346,000.00 (which amount is equal to one year of pay calculated based on the Executive’s base salary as of the Separation Date), less all applicable taxes and other withholdings; (b) pay to the Executive a lump-sum pro-rated bonus payment, less all applicable taxes and other withholdings, calculated in accordance with the method for determining bonuses for other similarly situated employees and based on the Executive’s employment through the Separation Date, paid in accordance with the normal procedures at the time such payments are made to Employees of the Company, but not later than March 15, 2012; and (c) if the Executive is currently a participant in the Company health and/or dental insurance plan(s) and the Executive timely elects to continue insurance coverage under federal COBRA law, the Company will partially subsidize such COBRA coverage such that the Executive will only pay the same cost that similarly situated active employees of the Company pay for such insurance coverage for the following month(s): November 2011 through October 2012.

6.2 Stock Awards.

(a) Non-Forfeiture of Unvested Awards. The Executive and the Company hereby agree and acknowledge that prior to the date hereof the Compensation Committee of the Company’s Board of Directors (the “Committee”) took action to ensure that, notwithstanding the provisions of the Career Education Corporation 1998 Employee Incentive Compensation Plan (the “1998 Plan”) and the Career Education Corporation 2008 Incentive Compensation Plan (the “2008 Plan”, and together with the 1998 Plan, the “Stock Plans”) and the provisions of the Award Agreements underlying the Executive’s Awards, all unvested Options and Restricted Stock held by the Executive as of his Separation Date (the “Unvested Awards”) shall remain outstanding until forty (40) days following the Separation Date (the “Award Forfeiture Date”). A schedule of the Executive’s unvested Options and Restricted Stock is attached hereto as Attachment A.

(b) Waiver of Conditions and Accelerated Vesting. Based on the above-referenced prior approval of the Committee, the Company and the Executive hereby agree that, so long as this Agreement is executed by the Executive and becomes fully irrevocable prior to the Award Forfeiture Date, then all performance and continued employment conditions to which the Unvested Awards would otherwise be subject shall be waived and the Unvested Awards shall become vested upon the later of (i) the date this Agreement becomes fully irrevocable by the Executive, or (ii) the third trading day following the Company’s filings of its Form 10-Q for the fiscal quarter ending on September 30, 2011. For the purpose of clarity, to the extent this Agreement is either not executed by the Executive prior to the Award Forfeiture Date or any portion of this Agreement remains revocable by the Executive as of the Award Forfeiture Date, then as of the Award Forfeiture Date all Unvested Awards shall be forfeited, cancelled and shall otherwise be of no force or effect.

(c) Post Termination Exercise Period. Based on the above-referenced prior approval of the Committee, the Company and the Executive hereby agree that, so long as this Agreement is executed by the Executive and becomes fully irrevocable prior to the Award Forfeiture Date, the post-termination exercise period for all vested Options held by the Executive under the Stock Plans (including the Options which become vested pursuant to Paragraph 6.2(b) immediately above) shall be extended until the earlier of (i) the tenth anniversary of the grant date of such Option, or (ii) the first anniversary of the Separation Date. For the purpose of clarity, to the extent this Agreement is either not executed by the Executive prior to the Award Forfeiture Date or any portion of this Agreement remains revocable by the Executive as of the Award Forfeiture Date, then the vested Options held by the Executive under the Stock Plans shall be forfeited, cancelled and shall otherwise be of no force or effect on the Award Forfeiture Date.

(d) General. For purposes of this Paragraph 6.2, capitalized terms which are used but not otherwise defined in this Agreement shall have the definition set forth in the relevant Stock Plan. In addition, to the extent the treatment of the Executive’s Awards described herein is different than the treatment that would otherwise occur pursuant to the existing terms of the underlying Award Agreements, this Agreement shall be deemed a written amendment of such Award Agreements.

6.3 Acknowledgment. The Executive acknowledges that the monies and benefits set forth in this Paragraph 6 constitute additional consideration above and beyond anything to which the Executive is already entitled, in exchange for Executive’s execution of this Agreement.

7. No Disparagement or Encouragement of Claims. The Executive agrees that Executive will not, nor will he cause anyone else to, make any statement or issue any communication, written or otherwise, that disparages, criticizes or otherwise reflects adversely on or encourages any adverse action against the Company, any Company Affiliate or any Releasee (as defined in Paragraph 11), to either the press, the media or any other third party, except if testifying truthfully under oath pursuant to any lawful court order or subpoena or otherwise responding to or providing disclosures required by law. The Company similarly agrees that its officers and directors will not, nor will they cause anyone else to, make any statement or issue any communication, written or otherwise, that disparages, criticizes or otherwise reflects adversely on or encourages any adverse action against the Executive to either the press, the media or any third party, except if testifying truthfully under oath pursuant to lawful court order or subpoena or otherwise responding to or providing disclosures required by law.

8. Non-Competition, Non-Solicitation and Confidential Information.

8.1 Confidential Information and Protection of Confidential Information. The Executive acknowledges that, throughout and as an incident to his employment with the Company, the Executive has become acquainted with and received Confidential Information relating to the Company, including trade secrets, processes, methods of operation, business models and plans, advertising and marketing plans and strategies, Company records, research techniques and results, academic programs, academic course development, methods of instruction, training programs, computer programs, databases, software codes, systems and models, marketing, promotional and sales programs, and financial information concerning the business of the Company, which information is not readily available to the public and gives the Company an opportunity to gain an advantage over competitors who do not know or use this information in the same manner as the Company, and which the Company regards as confidential and proprietary (collectively “Confidential Information”). Such Confidential Information includes, but is not limited to: (i) information relating to the Company’s past and existing students and vendors and the development of prospective students and vendors, including, but not limited to, specific student service and product requirements, pricing, arrangements, payment terms, student lists and other similar information; (ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; (iii) advertising and marketing plans and strategies; (iv) the Company’s proprietary programs, processes or software; (v) the subject matter of any patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property; and (vi) other confidential and proprietary information or documents relating to the Company or its students or vendors which the Company reasonably regards as being confidential. Confidential Information does not include: (a) information known in general to the Executive’s profession, or that becomes known thereafter, other than by an unauthorized act of the Executive; (b) information that was lawfully in the Executive’s possession before his employment with the Company; or (c) information obtained lawfully and in good faith from another party after such disclosure emanating from an original source other than the Company.

The Executive acknowledges that the Confidential Information is of incalculable value to the Company and is the exclusive property of the Company, and that the Company would suffer irreparable damage if any of the Confidential Information is improperly disclosed or used. Accordingly, the Executive will not, at any time during Executive’s employment with, or after the Executive’s separation from employment with, the Company, reveal, divulge, or make known to any person, firm or corporation any Confidential Information made known to the Executive or of which the Executive has become aware, regardless of whether developed, prepared, devised, or otherwise created in whole or in part by the efforts of the Executive. The Executive further agrees that he will retain all Confidential Information in trust for the sole benefit of the Company, and will not divulge or deliver any Confidential Information to any unauthorized person including, without limitation, any other employer of the Executive except as required by the order of any court or similar tribunal or any other governmental body or agency of appropriate jurisdiction; provided, that the Executive will, to the extent practicable, give the Company prior written notice of any such disclosure and will cooperate with the Company in obtaining a protective order or such similar protection as the Company may deem appropriate to preserve the confidential nature of such information. The foregoing obligations to maintain the Confidential Information shall not apply to any Confidential Information that is, or without any action by the Executive becomes, generally available to the public.

8.2 Non-Competition. Commencing on the Separation Date and for fifty-two (52) weeks thereafter, the Executive shall not, in any way, directly or indirectly, either for the Executive or any other person or entity, whether paid or unpaid, accept employment with, own, manage, operate, consult or provide expert services to any person or entity that competes with the Company or any of its subsidiaries in any capacity that involves any responsibilities or activities involving or relating to any Competing Educational Service, as defined herein. “Competing Educational Service” means any educational service that competes with the educational services provided by the Company and/or any of its subsidiaries, including, but not limited to, coursework in the areas of visual communication and design technologies; information technology; business studies; culinary arts; and health education, or any education service. The Executive hereby acknowledges that the following organizations, among others, provide Competing Educational Services, and should the Executive accept employment with, own, manage, operate, consult or provide expert services to any of these organizations within said 52-week period, it would inevitably require the use and/or disclosure of Confidential Information belonging to the Company and/or its subsidiaries and would provide such organizations with an unfair business advantage over the Company: DeVry, Inc.; Kaplan, Inc.; Apollo Group Inc.; Education Management LLC; Embanet Corporation; Capella Education Company; ITT Educational Services, Inc.; Corinthian Colleges, Inc.; Laureate Education, Inc.; and Strayer Education, Inc. and each of their respective subsidiaries, affiliates and successors. The Executive further acknowledges that the Company and/or its subsidiaries provide career-oriented education through physical and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Paragraph 8.2. Nothing herein shall prevent the Executive from owning less than two percent (2%) of the capital stock of a company whose stock is publicly traded and that is engaged in Competing Educational Services.

8.3 Non-Solicitation/Non-Hire. Commencing on the Separation Date and for eighteen (18) months thereafter, the Executive will not, directly or indirectly, individually or on behalf of any Person (as defined below) (a) hire, solicit, aid or induce any then-current employee of the Company or Company Affiliates to leave the Company or Company Affiliates to accept employment with or render services for the Executive or such Person, or (b) solicit, aid or induce any then-current student, customer, client, vendor, lender, supplier or sales representative of the Company or Company Affiliates or similar persons engaged in business with the Company or Company Affiliates to discontinue the relationship or reduce the amount of business done with the Company or Company Affiliates. “Person” means any individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity, or any department, agency or political subdivision thereof, or an accrediting body.

8.4 Acknowledgements. The Executive fully understands the nature and burdens of this Paragraph 8. The Executive acknowledges that the provisions of this Paragraph 8 are fair, reasonable, and not excessively broad, that they are necessary to protect important and legitimate business interests of the Company, Company Affiliates and each school, and that in light of the Executive’s education, experience, and capabilities, the Executive can honor all parts of this Paragraph 8 without being prevented from earning a fully adequate livelihood for the Executive and the Executive’s dependents from now throughout any period during which the Executive’s activities are restricted hereunder. The Executive agrees that the covenants in this Paragraph 8 are in addition to any common law, statutory or contractual obligations of the Executive.

8.5 Remedies and Enforcement. The Executive acknowledges that a breach on his part of the terms of the Restrictive Covenants set forth in this Paragraph 8 will cause irreparable damage to the Company and that monetary damages will not provide an adequate remedy to the Company. Accordingly, the Executive agrees that the Company will be entitled to enforce the terms herein in court and seek any and all remedies available to it in equity and law, including, but not limited to, injunctive relief, without the posting of any bond or other security. The parties agree that the prevailing party in any action related to enforcement of such Restrictive Covenants shall be entitled to reimbursement from the non-prevailing party for attorneys fees and costs incurred related to such action. The Executive further acknowledges and agrees that in the event any of the Restrictive Covenants contained in this Paragraph 8, or any part thereof, hereafter is construed to be illegal, invalid or unenforceable, the same shall not affect the remainder of such covenant or any other covenants. The Executive and the Company expressly empower a court of competent jurisdiction to modify any Restrictive Covenant in this Paragraph 8 to the extent necessary to make it legal, valid, and enforceable.

9. Indemnity and Cooperation. In the event of a lawsuit or claim by a third party in which the Executive is sued either jointly or separately for acts arising out of the scope of the Executive’s employment with the Company, the Company agrees to defend the Executive and hold the Executive harmless in accordance with the Executive’s rights to indemnification under the Company’s certificate of incorporation or bylaws of the Company or any existing Indemnification Agreement between the Executive and the Company. In turn, in the event of any

pending or threatened legal action against the Company or the Company Affiliates or Releasees relating to events which occurred during the Executive’s employment, the Executive acknowledges and agrees that he will cooperate to the fullest extent possible in the investigation, preparation, prosecution, or defense of the Company’s or the Company Affiliate’s case, including, but not limited to, the execution of affidavits or documents or providing of information requested by the Company or the Company’s counsel. Reasonable out-of-pocket expenses related to such assistance will be reimbursed by the Company, if the Company’s written approval is obtained in advance. In addition, the Executive will be compensated by the Company for his time, at the rate of $100/hour, when requested by the Company to prepare to provide testimony or spend time assisting the Company in any of the foregoing activities or with such matters. The Executive will not, however, be compensated for the time he spends providing testimony. Nothing in this Paragraph should be construed as suggesting or implying that the Executive should testify in any way other than truthfully or provide anything other than accurate, truthful information. The Executive further agrees to provide truthful and timely answers to any reasonable questions the Company may have from time to time about the work the Executive performed during his employment. A failure on the part of the Executive to reasonably cooperate with the Company shall constitute and be treated as a material breach of this Agreement. Any amount paid to the Executive pursuant to this Paragraph 9 for his time shall be paid promptly, and in any event no later than March 15 of the year following the year in which such services occurred. For purposes of complying with Section 409A, with respect to any reimbursement required to be made pursuant to this Paragraph 9, (i) the provision of such reimbursements during one calendar year shall not affect the reimbursements made available in a different calendar year, (ii) such reimbursements shall not be subject to liquidation or exchange for other benefits, and (iii) any reimbursements shall be paid as soon as administratively feasible (or in accordance with the timing prescribed under the applicable Company policy) after the applicable expense is incurred but no later than the last day of the calendar year following the calendar year in which the applicable expense was incurred.

10. Company Property. The Executive represents, warrants and covenants that the Executive has returned to the Company (or will return to the Company on or before the Separation Date) all Company property in the Executive’s possession or control, including, without limitation, all telephones, keys, access cards, security badges, credit cards, phone cards, equipment, computer hardware and encryption devices (including, but not limited to, all computers, Blackberry devices, and personal data assistants), all contents of all such hardware, all passwords and codes needed to obtain access to or operate all or part of any such hardware, all electronic storage devices (including but not limited to all hard drives, disk drives, diskettes, CDs, CD-ROMs, DVDs, and DVD-ROMs), all contents of all such electronic storage devices, all passwords and codes needed to obtain access to or use all or part of any such electronic storage device, all computer software and programs, financial information, accounting records, computer printouts, manuals, data, materials, papers, books, files, documents, records, policies, student information and lists, customer information and lists, marketing information, specifications and plans, data base information and lists, mailing lists, and notes, including but not limited to any property describing or containing any Confidential Information, and the Executive agrees that the Executive will not retain any copies, duplicates, reproductions or excerpts thereof in any form whatsoever.

11. General Release, Discharge of All Claims and Agreement Not to Sue. In consideration of the payments and benefits referred to in Paragraph 6 from the Company to the Executive as set forth herein and other consideration the receipt and sufficiency of which is hereby acknowledged, the Executive, on behalf of himself, his dependents, heirs, executors, administrators, assigns and successors, and each of them hereby:

(a) voluntarily, fully and unconditionally releases and forever discharges the Company, the Company Affiliates, and associated organizations, past and present, and each of them, as well as its and their trustees, directors, officers, agents, attorneys, employees, contractors, insurers, representatives, assigns, and successors, past and present, and each of them, (hereinafter “Releasees”), with respect to and from any and all legally waivable claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders, liabilities, complaints, and promises whatsoever, in law or equity, known or unknown, suspected or unsuspected, and whether or not concealed or hidden (collectively, “Claims”), which he now owns or holds or he has at any time heretofore owned or held or may in the future hold as against any or all said Releasees, arising on or before the date this Agreement is executed, including, but not limited to, any Claims arising out of or in any way connected with his employment with and/or separation from the Company, any Claims arising under the Sarbanes-Oxley Act of 2002, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act, the False Claims Act, as amended, the Employee Retirement Income Security Act, as amended, Illinois civil rights laws and regulations, Illinois wage/hour laws and regulations, or any other federal, state or local law, regulation, ordinance or public policy, and any Claims for severance pay, bonus pay, sick leave, holiday pay, vacation pay, life insurance, health, medical or disability insurance or any other fringe benefit or the common law of any state relating to employment contracts, wrongful discharge, defamation or any other matter; and

(b) agrees not to sue any or all of the Releasees with respect to any matter released or discharged herein, except that the Executive may seek a determination of the validity of the waiver of his rights under the ADEA. Nothing in this Agreement is intended to reflect any party’s belief that the waiver of the Executive’s claims under the ADEA is invalid or unenforceable, it being the intent of the parties that such claims are waived.

12. Exclusions from General Release and Discharge. Notwithstanding the above, the Executive does not release and discharge (a) any right to continue his group health insurance coverage pursuant to applicable law; (b) any vested benefits in any qualified retirement plan; (c) any claim for breach of this Agreement; and (d) any claim that cannot be released by law, including but not limited to the right to file a charge with or participate in an investigation by the Equal Employment Opportunity Commission (“EEOC”). The Executive does, however, hereby waive any right to recover any money should the EEOC or any other agency or individual pursue any claims on his behalf.

13. Obligations Regarding Section 16 Reporting. The Executive understands that his Form 4 reporting obligations cease November 1, 2011, and that he has no reporting obligations related to the delayed vesting or forfeiture of his Unvested Awards as provided pursuant to Paragraph 6.2 of this Agreement, as those transactions will occur after the termination of his Form 4 reporting period has terminated. The Executive agrees that with respect to any Form 4 or Form 5 filing made on his behalf by the Company, regardless of whether it is made with or without his review, (1) he is fully responsible for such filing and the contents of such Form, and (2) neither the Company nor its Insider Trading Compliance Officer (nor any of its or his designees, representative, agents or legal counsel) have any responsibility or liability with respect to such filing or the contents of such Form. The Executive understands and agrees that the Company will not undertake to file any additional Forms 4 or 5 or other reports with the Securities and Exchange Commission on his behalf. The Executive further understands and agrees that all responsibility for Section 16 compliance under the Securities Exchange Act of 1934 is his own and that neither the Company nor the Insider Trading Compliance Officer (nor any of its or his designees, representatives, agents or legal counsel) will have any responsibility or liability with respect to any failure to file (or delinquent filing of) a Form 4 or 5, any violation of Section 16(a) of the Securities Exchange Act of 1934 or any “short swing profits” under Section 16(b) of that Act.

14. No Representation. The Executive agrees and acknowledges that in executing this Agreement he does not rely and has not relied on any representation or statement by any of the Releasees or by any of the Releasees’ agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15. No Assignment. The Executive represents that he has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any claim or any portion thereof or interest therein, and the Executive agrees to indemnify, defend and hold harmless each and all of the Releasees against any and all disputes based on, arising out of, or in connection with any such transfer or assignment, or purported transfer or assignment, of any claims or any portion thereof or interest therein.

16. Severability. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given their intended effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable. If, however, a court of competent jurisdiction finds that any release by the Executive in Paragraph 11 above is illegal, void, or unenforceable, the Executive will promptly sign a release, waiver, and/or agreement that is legal and enforceable to the greatest extent permitted by law.

17. No Continuing Relationship. The Executive and the Company acknowledge that any employment, contractual or other relationship between the Executive and the Company terminated as of the Separation Date and that they have no further employment, contractual or other relationship except as may arise out of this Agreement. The Executive waives any right or claim to reinstatement as an employee of the Company, and will not seek employment, an independent contractor relationship or any relationship in the future with the Company.

18. Voluntary Execution of Agreement and Consultation with Counsel. The Executive is hereby advised to consult with an attorney prior to executing this Agreement. The Executive represents, warrants and agrees that he has carefully read the Agreement and understands its meaning and has had the opportunity to seek independent legal advice from an attorney of his choice with respect to the advisability of this Agreement and is signing this Agreement, knowingly, voluntarily and without any coercion or duress. The Executive further acknowledges that he has been given a period of twenty-one (21) days within which to consider whether to sign this Agreement. The Executive may execute this Agreement at any time within the twenty-one day period and by doing so the Executive waives any right to the remaining days.

19. Revocabilitv of Agreement. The Executive has the right to revoke this Agreement, solely with respect to his release of claims under the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act, for up to seven (7) days after the Executive signs it. In order to revoke this Agreement, the Executive must sign and send a written notice of the decision to do so, following the notice provisions set forth in Paragraph 20, below, which must be received no later than the eighth day after the Executive executes the Agreement. If the Executive revokes this Agreement, the Executive will not be entitled to the consideration from the Company described herein.

20. Notice. All notices, requests, demands and other communications hereunder to either party shall be in writing and shall be delivered, either by hand, by facsimile, by overnight courier or by certified mail, return receipt requested, duly addressed as indicated below or to such changed address as the party may subsequently designate:

To the Company:

Senior Vice President of Human Resources

Career Education Corporation

231 N. Martingale Road

Schaumburg, IL 60173

(FAX) 847-585-2641

To the Executive:

Thomas G. Budlong

[Address Redacted]

21. Governing Law. This Agreement is made and entered into in the State of Illinois and shall be interpreted, enforced and governed under Illinois law, without regard to its conflict of laws principles.

22. Binding Effect. This Agreement shall be binding upon the Executive and upon the Executive’s dependents, heirs, representatives, executors, administrators, successors and assigns, and shall inure to the benefit of the Company and others released in this Agreement, and to their respective dependents, heirs, representatives, executors, administrators, successors and assigns.

23. No Presumption. This Agreement shall be construed and interpreted as if all of its language were prepared jointly by the Executive and the Company. No language in this Agreement shall be construed against a party on the ground that such party drafted or proposed that language.

24. Violation of Agreement. If the Executive or the Company prevails in a legal or equitable action claiming that the other party has breached this Agreement, the prevailing party shall be entitled to recover from the other party the reasonable attorneys’ fees and costs incurred by the prevailing party in connection with such action.

25. Execution of Counterparts. This Agreement may be executed in counterparts, but shall be construed as if signed in one document.

26. Entire Agreement. This Agreement constitutes and contains the entire agreement and understanding concerning the Executive’s employment with and separation from the Company and the other subject matters addressed herein between the parties, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, except for the parties’ agreements relating to indemnification, trade secrets, confidential and proprietary information, copyrights, and the like, if any, which shall remain in force and effect in accordance with the terms thereof. The Executive represents and agrees that no promises, statements or inducements have been made to him which caused him to sign this Agreement other than those which are expressly stated in this Agreement. This is an integrated document and may not be altered except by written agreement signed by an officer designated by the Company, and the Executive.

I have carefully read the entire Agreement and accept and agree to the provisions it contains and hereby execute it voluntarily and with full understanding of its consequences.

DO NOT SIGN PRIOR TO OCTOBER 31, 2011

Executed this 31st day of October, 2011.


	/s/ Thomas G. Budlong
	Thomas G. Budlong

	CAREER EDUCATION CORPORATION

DATED: October 31, 2011	By:	/s/ Colon S. McLean
	Name: Colon S. McLean
	Title: SVP HR

ATTACHMENT A


Grant Date	Grant Date Price		Plan		# of Options		Vested		Unvested		Time RSA Unvested		Perf RSA Unvested
8/31/2007	$	29.70		1998		35,000		35,000		—		—		—
3/31/2008	$	13.32		1998		39,500		29,625		9,875		—		—
2/25/2009	$	26.15		2008		20,445		10,222		10,223		3,748		9,369
3/3/2010	$	29.02		2008		22,024		5,506		16,518		—		16,152
3/14/2011	$	21.80		2008		23,616		—		23,616		4,328		7,577
Total						140,585		80,353		60,232		8,076		33,098


Accelerated stock options:			60,232
Total stock options:			140,585
Accelerated restricted stock:			41,174