8-K

0001193125-16-605287.txt : 20160527 0001193125-16-605287.hdr.sgml : 20160527 20160527090055 ACCESSION NUMBER: 0001193125-16-605287 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20160524 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Submission of Matters to a Vote of Security Holders ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160527 DATE AS OF CHANGE: 20160527 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: 161680092 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 d171928d8k.htm 8-K 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): May 24, 2016

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

(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.

As disclosed in Item 5.07, the Career Education Corporation 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by the stockholders of Career Education Corporation (the “Company”). In connection with the adoption of the 2016 Plan, on May 24, 2016, the Compensation Committee (the “Committee”) of the Board of Directors of the Company approved the following forms under the 2016 Plan:

•

a form of employee stock option agreement, which is attached as Exhibit 10.1;

•

a form of non-employee director stock option agreement, which is attached as Exhibit 10.2;

•

a form of restricted stock unit agreement, which is attached as Exhibit 10.3;

•

a form of performance-based restricted stock unit agreement, which is attached as Exhibit 10.4;

•

a form of cash-settled restricted stock unit agreement, which is attached as Exhibit 10.5.

•

a form of performance-based cash-settled restricted stock unit agreement, which is attached as Exhibit 10.6;

•

a form of performance unit agreement, which is attached as Exhibit 10.7;

The amount and terms of each award are determined by the Committee in its sole discretion and will be set forth in an individual’s applicable award agreement. The terms of the form award agreements under the 2016 Plan are substantially consistent with the terms of the existing forms under the Company’s 2008 Incentive Compensation Plan. The foregoing description of the award agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the forms attached hereto as Exhibits 10.1 through 10.7.

Item 5.07

Submission of Matters to a Vote of Security Holders.

The Company held its Annual Meeting of Stockholders on May 24, 2016 and the following matters were voted on at that meeting:

(1)	The Company’s stockholders voted as follows to elect seven directors to the Company’s Board of Directors:


Directors:	Votes For:	Against:	Abstain:	Broker Non-Votes:
Dennis H. Chookaszian	49,420,379	1,181,191	18,353	9,741,498
Patrick W. Gross	43,856,880	6,744,690	18,353	9,741,498
Gregory L. Jackson	49,590,726	1,010,844	18,353	9,741,498
Thomas B. Lally	50,017,818	583,752	18,353	9,741,498
Todd D. Nelson	50,442,498	169,072	8,353	9,741,498
Leslie T. Thornton	50,331,772	279,798	8,353	9,741,498
Richard D. Wang	49,953,963	657,857	8,103	9,741,498

(2)	The Company’s stockholders approved, on a nonbinding advisory basis, the executive compensation paid by the Company to its named executive officers, by the votes set forth in the table below:


Votes For:	Against:	Abstain:	Broker Non-Votes:
41,241,269	9,316,122	62,532	9,741,498

(3)	The Company’s stockholders voted as follows to approve the Career Education Corporation 2016 Incentive Compensation Plan:


Votes For:	Against:	Abstain:	Broker Non-Votes:
41,892,454	8,668,496	58,973	9,741,498

(4)	The Company’s stockholders voted as follows to ratify the selection of Grant Thornton LLP as the independent registered public accounting firm to audit the Company’s financial statements for the year ended December 31, 2016:


Votes For:	Against:	Abstain:	Broker Non-Votes
60,284,672	17,279	59,470	0

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits.


Exhibit Number		Description of Exhibits

10.1		Form of Employee Non-Qualified Stock Option Agreement under the Career Education Corporation 2016 Incentive Compensation Plan (the “2016 Plan”)

10.2		Form of Non-Employee Director Non-Qualified Stock Option Agreement under the 2016 Plan

10.3		Form of Restricted Stock Unit Agreement under the 2016 Plan (Time-Based)

10.4		Form of Restricted Stock Unit Agreement under the 2016 Plan (Performance-Based)

10.5		Form of Cash-Settled Restricted Stock Unit Agreement under the 2016 Plan (Time-Based)

10.6		Form of Cash-Settled Restricted Stock Unit Agreement under the 2016 Plan (Performance-Based)

10.7		Form of Performance Unit Agreement under the 2016 Plan

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: May 27, 2016

Exhibit Index


Exhibit Number		Description of Exhibits

10.1		Form of Employee Non-Qualified Stock Option Agreement under the Career Education Corporation 2016 Incentive Compensation Plan (the “2016 Plan”)

10.2		Form of Non-Employee Director Non-Qualified Stock Option Agreement under the 2016 Plan

10.3		Form of Restricted Stock Unit Agreement under the 2016 Plan (Time-Based)

10.4		Form of Restricted Stock Unit Agreement under the 2016 Plan (Performance-Based)

10.5		Form of Cash-Settled Restricted Stock Unit Agreement under the 2016 Plan (Time-Based)

10.6		Form of Cash-Settled Restricted Stock Unit Agreement under the 2016 Plan (Performance-Based)

10.7		Form of Performance Unit Agreement under the 2016 Plan

EX-10.1 2 d171928dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

Employee Stock Option Agreement

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”), dated , 20 (the “Grant Date”), is by and between Career Education Corporation, a Delaware corporation (the “Company”), and (the “Participant”).

In accordance with Article VI of the Career Education Corporation 2016 Incentive Compensation Plan, as amended from time to time (the “Plan”), and subject to the terms of the Plan and this Agreement, the Company hereby grants to the Participant an option to purchase shares (“Shares”) of common stock, par value $0.01 per Share, of the Company (“Common Stock”) on the terms and conditions as set forth below (the “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 Participant agree as follows:

1. Grant. The Committee hereby grants the Option to the Participant 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 4.3 of the Plan).

2. Exercise Price. The purchase price per Share purchasable under the Option shall be $ per Share (the “Exercise Price”) (subject to adjustment as provided in Section 4.3 of the Plan). The Exercise Price is equal to or greater than 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 “Term”). The Option shall vest and become exercisable in [equal] installment[s] on [each of] ([each 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.

4. Effect of Termination of Service on Vesting and Exercisability.

(a) Except as otherwise provided herein, any portion of the Option which is not vested (or is otherwise not exercisable) at the time of the Participant’s Termination of Service for any reason shall not become exercisable after such termination and shall be immediately cancelled and forfeited to the Company.

(b) If the Participant incurs a Termination of Service due to his or her death or Disability, the Option shall become fully vested and exercisable at the time of such Termination of Service, and shall remain exercisable for a period of one (1) year from the date of such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such one (1) year period, the Option shall be immediately cancelled and forfeited to the Company.

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Employee Stock Option Agreement

(c) If the Participant incurs a Termination of Service due to his or her Retirement, (i) the Option shall continue to vest during the three (3) year period following such Termination of Service, and (ii) to the extent vested, such Option shall remain exercisable for the three (3) year period following such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such three (3) year period, the Option shall be immediately cancelled and forfeited to the Company.

(d) If the Participant incurs a Termination of Service by the Company without Cause, the Option may thereafter be exercised, to the extent it was vested and exercisable at the time of such Termination of Service, for a period of ninety (90) days from the date of such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such ninety (90) day period, the Option shall be immediately cancelled and forfeited to the Company.

(e) If the Participant incurs a voluntary Termination of Service (that is not due to death, Disability or Retirement), the Option may thereafter be exercised, to the extent it was vested and exercisable at the time of such Termination of Service, for a period of thirty (30) days from the date of such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such thirty (30) day period, the Option shall be immediately cancelled and forfeited to the Company.

(f) If the Participant incurs a Termination of Service for Cause, the entire Option, whether vested or unvested, shall be immediately cancelled and forfeited to the Company.

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 Participant (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) payment of the Exercise Price (and any related tax withholdings) in full, either: (i) in cash, or its equivalent, in United States dollars; (ii) unless otherwise prohibited by law for either the Company or the Participant, 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 Exercise Price and any tax withholdings resulting from such exercise; or (iii) by any other means the Committee determines to be consistent with the Plan’s purposes and applicable law.

Notwithstanding the foregoing, the Participant (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

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Employee Stock Option Agreement

exercised in a book entry on the records kept by the Company’s stockholder record keeper or (B) deliver to the Participant (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 Participant 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. Limitations Upon Transfer. The Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or pursuant to a domestic relations order (as defined in Code Section 414(p)). Further, the Option will be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative, as provided in Section 6.10 of the Plan.

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

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

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

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Employee Stock Option Agreement

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 or Affiliates and would provide such organizations with an unfair business advantage over the Company: [American Public Education, Inc., Anthem Education, Apollo Education Group, Inc., Bridgepoint Education, Inc., Capella Education Company, Career Step, LLC, Delta Career Education Corporation, DeVry Education Group Inc., Education Management Corporation, EmbanetCompass, Grand Canyon Education Inc., ITT Educational Services Inc., Kaplan, Inc., Laureate Education, Inc., Learning Tree International Inc., Lincoln Education Services Corporation, National American University Holdings Inc., Ross Education, LLC, Strayer Education Inc., Universal Technical Institute Inc., Zenith Education Group, Inc.] and each of their respective subsidiaries, affiliates and successors. [Bracketed text to be updated annually by management.] The Participant further acknowledges that the Company and/or its subsidiaries or Affiliates provide career-oriented education through physical campuses throughout the United States 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 Participant incurs an involuntary Termination of Service by the Company other than for Cause, the Participant will not be subject to any post-termination non-compete restriction under this Section 8(a).

(b) For following Participant’s Termination of Service 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 or Affiliates to leave his/her employment.

(c) At all times following the Participant’s Termination of Service with the Company for any reason, reveal, divulge, or make known to any person, firm or corporation any confidential information, or take any other action, in violation of the Confidential Information Policy in the Company’s Code of Business Conduct & Ethics.

Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the Option or Shares issued hereunder, subject to the terms and conditions of the Plan. If the Participant has previously sold any Shares derived from the Option, the Company shall also have the right to recover from the Participant the economic value thereof. The Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering the Option or Shares issued, or the economic value of the Shares, pursuant hereto.

It is the intention of the Participant 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 Participant 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’ or Affiliates’ interests as described in this Agreement.

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Employee Stock Option Agreement

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

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

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Employee Stock Option Agreement

9. Effect of Amendment of Plan or Agreement. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Participant, adversely affect the rights of the Participant 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 Participant’s rights under the Agreement without the Participant’s written consent, unless otherwise permitted by the Plan.

10. 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.

11. Rights as a Stockholder. The Participant 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. 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 Participant make such covenants, agreements, and representations as the Company, in its sole discretion, considers necessary or desirable.

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

14. Agreement Not a Contract of Employment or Other Relationship. This Agreement is not a contract of employment, and the terms of employment of the Participant or other relationship of the Participant with the Company or its subsidiaries and Affiliates 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 Participant for a continuation of an employment or other relationship with the Company or its subsidiaries and Affiliates, nor shall it interfere with the right of the Company or its subsidiaries and Affiliates to discharge the Participant and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant.

15. No Guarantee of Future Awards. This Agreement does not guarantee the Participant the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.

16. No Impact on Other Benefits. The value of the Participant’s Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

17. 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 Participant shall be required to

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Employee Stock Option Agreement

pay such amount to the Company, or make arrangements satisfactory to the Company regarding the payment of such amount, as provided in Article XVIII of the Plan. The obligations of the Company under the Plan shall be conditioned 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 Participant. The Participant acknowledges and agrees that he or she is responsible for the tax consequences associated with the grant and exercise of the Option.

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

19. 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 Participant and the successors and assigns of the Company.

20. Compliance with Section 409A of the Code. This Agreement is intended to be exempt from Section 409A of the Code and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. Notwithstanding any provision of this Agreement or the Plan to the contrary, to the extent that the Committee determines that any portion of the Option granted hereunder is subject to Section 409A of the Code and fails to comply with the requirements thereof, the Committee reserves the right to amend, restructure, terminate or replace such portion of the Option in order to cause it to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

21. Governing 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.

22. Receipt of Plan. The Participant acknowledges receipt of a copy of the Plan, and represents that the Participant 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.

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Employee Stock Option Agreement

23. Cooperation. In the event of any pending or threatened investigation, proceeding, lawsuit, claim or legal action against or involving the Company, the Participant acknowledges and agrees to cooperate to the fullest extent possible in the investigation, preparation, prosecution, or defense of the Company’s case, including, but not limited to, the execution of affidavits or documents, providing of information requested by the Company or the Company’s counsel, and meeting with Company representatives or the Company’s counsel. Nothing in this paragraph shall be construed as suggesting or implying that the Participant should testify in any way other than truthfully or provide anything other than accurate, truthful information.

24. 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.

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

26. 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.

27. 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.

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

29. Condition to Return Signed Agreement. This Agreement shall be null and void unless the Participant 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 .

30. 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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Employee Stock Option Agreement

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

CAREER EDUCATION CORPORATION

[Name]

[Title]

ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT

The undersigned, the Participant, 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.



Date:
						(Signature of Participant)

						Print Name:

Please sign and return a fully executed .pdf of this Stock Option Agreement by , 20 to at CEC corporate via email ( ). 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-10.2 3 d171928dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

Non-Employee Director Stock Option Agreement

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

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

3. Term and Vesting of the Option. The Option Term shall expire on the tenth anniversary of the Grant Date (the “Term”). The Option shall vest and become exercisable on ([each/the] “Vesting Date”). Except as otherwise provided herein, the Option may be exercised on or following the Vesting Date 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.

4. Effect of Termination of Service on Vesting and Exercisability.

(b) Upon the Participant’s Termination of Service, unless the Committee determines that Cause exists at the time of such Termination of Service, the Option may thereafter be exercised, to the extent it was vested and exercisable at the time of such Termination of Service, for a period of three (3) years from the date of such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such three (3) year period, the Option shall be immediately cancelled and forfeited to the Company.

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(c) If the Participant incurs a Termination of Service due to his or her death or Disability, the Option shall become fully vested and exercisable at the time of such Termination of Service, and shall remain exercisable for a period of three (3) years from the date of such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such three (3) year period, the Option shall be immediately cancelled and forfeited to the Company.

(d) If the Participant incurs a Termination of Service due to his or her Retirement, (i) the Option shall continue to vest during the three (3) year period following such Termination of Service, and (ii) to the extent vested, such Option shall remain exercisable for the three (3) year period following such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such three (3) year period, the Option shall be immediately cancelled and forfeited to the Company.

(e) If the Participant incurs a Termination of Service at the time of the Company’s 20 annual meeting of stockholders due to his or her failure to be nominated for, or refusal to stand for, reelection as a director at such annual meeting, the Option shall become fully vested and exercisable on the Vesting Date, and shall remain exercisable for a period of three (3) years from the date of such Termination of Service (but not beyond the original Term). To the extent the Option is not exercised at the end of such three (3) year period, the Option shall be immediately cancelled and forfeited to the Company.

(f) If the Participant incurs a Termination of Service for Cause, the entire Option, whether vested or unvested, shall be immediately cancelled and forfeited to the Company.

(b) payment of the Exercise Price in full, either: (i) in cash, or its equivalent, in United States dollars; (ii) unless otherwise prohibited by law for either the Company or the Participant, 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 Exercise Price; or (iii) by any other means the Committee determines to be consistent with the Plan’s purposes and applicable law.

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

8. Effect of Amendment of Plan or Agreement. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Participant, adversely affect the rights of the Participant 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 Participant’s rights under the Agreement without the Participant’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 Participant 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 Participant 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 Participant to exercise the Option.

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13. Agreement Not a Contract of Employment or Other Relationship. This Agreement is not a contract of employment, and the terms of the relationship of the Participant with the Company or its subsidiaries and Affiliates 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 Participant for a continuation of an employment or other relationship with the Company or its subsidiaries and Affiliates, nor shall it interfere with the right of the Company or its subsidiaries and Affiliates to discharge the Participant and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant.

14. 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 Participant, 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 Participant may be made by electronic means, including by electronic mail, and the Participant hereby consents to receive such notice by electronic delivery. To the extent permitted in an electronically delivered notice described in the previous sentence, the Participant shall be permitted to respond to such notice or communication by way of a responsive electronic communication, including by electronic mail.

15. 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 Participant and the successors and assigns of the Company.

16. Compliance with Section 409A of the Code. This Agreement is intended to be exempt from Section 409A of the Code and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. Notwithstanding any provision of this Agreement or the Plan to the contrary, to the extent that the Committee determines that any portion of the Option granted hereunder is subject to Section 409A of the Code and fails to comply with the requirements thereof, the Committee reserves the right to amend, restructure, terminate or replace such portion of the Option in order to cause it to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

17. Governing 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.

18. Receipt of Plan. The Participant acknowledges receipt of a copy of the Plan, and represents that the Participant 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.

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19. 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.

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

21. 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.

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

24. 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

[Name]

[Title]

PARTICIPANT



By:

Name:

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EX-10.3 4 d171928dex103.htm EX-10.3 EX-10.3

Exhibit 10.3

Restricted Stock Unit Agreement

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

RESTRICTED STOCK UNIT AGREEMENT

This RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”), dated , 20 (the “Grant Date”), is by and between Career Education Corporation, a Delaware corporation (the “Company”), and (the “Participant”).

To evidence such award and to set forth its terms, the Company and the Participant agree as follows. All capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the Career Education Corporation 2016 Incentive Compensation Plan, as amended from time to time (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 Participant Restricted Stock Units (the “RSUs”) on the Grant Date, and the Participant hereby accepts the grant of the RSUs as set forth herein.

2. Limitations on Transferability. Except in the event of the death of the Participant, at any time prior to the payment date for the RSUs (the “Settlement Date”), the RSUs, or any interest therein, cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated, encumbered or otherwise disposed.

3. 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 [equal] installment[s] on [each of] ([each 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 Participant 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 Participant who receives a grant of RSUs (the “RSU Account”). The RSUs granted hereby shall be credited to the Participant’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.

(b) Settlement of RSU Accounts. The Company shall settle the RSU Account by delivering to the holder thereof (who may be the Participant or his or her beneficiary determined in accordance with Article XIV of the Plan, as applicable) a number of Shares equal to the whole number of Vested Shares underlying the RSUs then credited to the Participant’s RSU Account (or a specified portion in the event of any partial settlement). The Settlement Date for all RSUs credited to a Participant’s RSU Account shall be as soon as administratively practical following the date on which the restrictions applicable to any portion of the RSUs

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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 Participant incurs a Termination of Service at any time prior to an applicable Vesting Date set forth in Section 3:

(a) If the Participant 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 Participant (or his or her beneficiary, as applicable) 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 17 of this Agreement or otherwise required by any taxing authority.

(b) If the Participant 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.

(c) Notwithstanding any other provision in this Agreement, if the Participant is a “specified employee” (as such term is defined for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) at the time of his or her Termination of Service, no amount that is subject to Code Section 409A and that becomes payable under this Agreement by reason of such Termination of Service shall be paid to the Participant before the earlier of (i) the expiration of the six (6) month period measured from the date of the Participant’s Termination of Service, and (ii) the date of the Participant’s death.

6. Change in Control. Upon a Change in Control, the Participant 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 Participant 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. Adjustments. The Committee may make or provide for such adjustments to the RSUs as provided for in Section 4.3 of the Plan.

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

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(a) For following Participant’s voluntary Termination of Service with the Company or Participant’s Termination of Service 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 and Affiliates 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 or Affiliates, 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 Participant hereby acknowledges that the following organizations, among others, provide Competing Educational Services and, should the Participant 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 or Affiliates and would provide such organizations with an unfair business advantage over the Company: [American Public Education, Inc., Anthem Education, Apollo Education Group, Inc., Bridgepoint Education, Inc., Capella Education Company, Career Step, LLC, Delta Career Education Corporation, DeVry Education Group Inc., Education Management Corporation, EmbanetCompass, Grand Canyon Education Inc., ITT Educational Services Inc., Kaplan, Inc., Laureate Education, Inc., Learning Tree International Inc., Lincoln Education Services Corporation, National American University Holdings Inc., Ross Education, LLC, Strayer Education Inc., Universal Technical Institute Inc., Zenith Education Group, Inc.] and each of their respective subsidiaries, affiliates and successors. [Bracketed text to be updated annually by management.] The Participant further acknowledges that the Company and/or its subsidiaries or Affiliates provide career-oriented education through physical campuses throughout the United States and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. If the Participant incurs an involuntary Termination of Service by the Company other than for Cause, the Participant will not be subject to any post-termination non-compete restriction under this Section 9(a).

Should the Participant 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

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to it in equity and law, and the Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or Shares issued hereunder, subject to the terms and conditions of the Plan. If the Participant has previously sold any Shares derived from the RSUs, the Company shall also have the right to recover from the Participant the economic value thereof. The Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or Shares issued, or the economic value of the Shares, pursuant hereto.

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

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Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or Shares issued hereunder, subject to the terms and conditions of the Plan. If the Participant has previously sold any Shares derived from the RSUs, the Company shall also have the right to recover from the Participant the economic value thereof. The Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or Shares issued, or the economic value of the Shares, pursuant hereto.

10. Effect of Amendment of Plan or Agreement. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Participant, adversely affect the rights of the Participant under this Agreement, except as otherwise provided under the Plan. This Agreement may be amended as provided under the Plan, but except as provided in the Plan no such amendment shall adversely affect the Participant’s rights under the Agreement without the Participant’s written consent, unless otherwise permitted by the Plan.

11. 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.

12. Stockholder Rights. The RSUs shall not represent an equity security of the Company and shall not carry any voting or dividend rights. The Participant 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 Participant 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 Participant 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.

13. Compliance with Applicable 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 any Vested Shares, or (b) credit a book entry related to the Vested 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 payment 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 payment, and in order to ensure compliance with such laws, regulations and requirements, that the Participant make such covenants, agreements, and representations as the Company, in its sole discretion, considers necessary or desirable.

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14. Agreement Not a Contract of Employment or Other Relationship. This Agreement is not a contract of employment, and the terms of employment of the Participant or other relationship of the Participant with the Company shall not be affected in any way by this Agreement except as specifically provided herein. The Participant’s execution or acceptance of this Agreement shall not be construed as conferring any legal rights upon the Participant 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 Participant and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant.

15. No Guarantee of Future Awards. This Agreement does not guarantee the Participant the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.

16. No Impact on Other Benefits. The value of the Participant’s RSUs is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

17. Tax Consequences. The Participant acknowledges and agrees that the Participant 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 Participant further acknowledges that it is the Participant’s responsibility to obtain any advice that the Participant 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 Participant pursuant hereto unless, as provided in Article XVIII of the Plan, the Participant 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.

18. 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.

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

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20. 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 Participant and the successors and assigns of the Company.

21. Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. Notwithstanding any provision of this Agreement or the Plan to the contrary, to the extent that the Committee determines that any portion of the RSUs granted hereunder is subject to Section 409A of the Code and fails to comply with the requirements thereof, the Committee reserves the right to amend, restructure, terminate or replace such portion of the RSUs in order to cause it to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

22. Governing 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.

23. Receipt of Plan. The Participant acknowledges receipt of a copy of the Plan, and represents that the Participant 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.

24. Cooperation. In the event of any pending or threatened investigation, proceeding, lawsuit, claim or legal action against or involving the Company, the Participant acknowledges and agrees to cooperate to the fullest extent possible in the investigation, preparation, prosecution, or defense of the Company’s case, including, but not limited to, the execution of affidavits or documents, providing of information requested by the Company or the Company’s counsel, and meeting with Company representatives or the Company’s counsel. Nothing in this paragraph shall be construed as suggesting or implying that the Participant should testify in any way other than truthfully or provide anything other than accurate, truthful information.

25. 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.

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

27. 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.

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28. 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.

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

30. Condition to Return Signed Agreement. This Agreement will be null and void unless the Participant indicates his or her acceptance of the RSUs provided for hereunder by signing, dating and returning this Agreement to the Company on or before , 20 .

31. 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 Participant and all other persons.

[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

[Name]

[Title]

ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT

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


.		ACCEPTS the award of the 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 the 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.



Date:
						(Signature of Participant)

						Print Name:

Please sign and return a fully executed .pdf of this Restricted Stock Unit Agreement by , 20 to at CEC corporate via email ( ). 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.

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EX-10.4 5 d171928dex104.htm EX-10.4 EX-10.4

Exhibit 10.4

Restricted Stock Unit Agreement

Performance-Based

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

RESTRICTED STOCK UNIT AGREEMENT

3. Vesting. Subject to the provisions of Sections 5 and 6 of this Agreement, the RSUs shall cease to be restricted and shall, subject to achievement of the Performance Goal set forth below, become non-forfeitable (thereafter being referred to as “Vested Shares”) in [equal] installment[s] on [each of] ([each 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, except as set forth in Sections 5 and 6 of this Agreement, none of the RSUs shall become Vested Shares on any Vesting Date unless (the “Performance Goal”).

Notwithstanding the foregoing, and subject to Sections 5 and 6 below, in the event that (a) the Participant incurs a Termination of Service prior to any Vesting Date, any RSUs that were unvested at the date of such Termination of Service, or (b) the Performance Goal is not achieved, then in either case the RSUs shall be immediately forfeited to the Company.

4. Crediting and Settling RSUs.

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RSU Account (or a specified portion in the event of any partial settlement). The Settlement Date for all RSUs credited to a Participant’s RSU Account shall be as soon as administratively practical following the date on which the restrictions applicable to any portion of the RSUs granted hereby have lapsed, subject to achievement of the Performance Goal, 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.

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

8. Adjustments. The Committee may make or provide for such adjustments to the RSUs as provided for in Section 4.3 of the Plan.

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

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Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or Shares issued hereunder, subject to the terms and conditions of the Plan. If the Participant has previously sold any Shares derived from the RSUs, the Company shall also have the right to recover from the Participant the economic value thereof. The Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or Shares issued, or the economic value of the Shares, pursuant hereto.

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Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or Shares issued hereunder, subject to the terms and conditions of the Plan. If the Participant has previously sold any Shares derived from the RSUs, the Company shall also have the right to recover from the Participant the economic value thereof. The Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or Shares issued, or the economic value of the Shares, pursuant hereto.

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upon which Shares are traded. The Company may require, as a condition of such payment, and in order to ensure compliance with such laws, regulations and requirements, that the Participant make such covenants, agreements, and representations as the Company, in its sole discretion, considers necessary or desirable.

14. Agreement Not a Contract of Employment or Other Relationship. This Agreement is not a contract of employment, and the terms of employment of the Participant or other relationship of the Participant with the Company shall not be affected in any way by this Agreement except as specifically provided herein. The Participant’s execution or acceptance of this Agreement shall not be construed as conferring any legal rights upon the Participant 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 Participant and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant.

15. No Guarantee of Future Awards. This Agreement does not guarantee the Participant the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.

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25. 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.

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

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32. Clawback Policy. By accepting the grant of the RSUs pursuant to this Agreement, the Participant hereby acknowledges that the Board has adopted a policy pursuant to which the Participant may be required to repay amounts otherwise paid pursuant to this Agreement to the extent (a) such amounts were predicated upon achieving certain financial results that were subsequently the subject of a material restatement of Company financial statements filed with the Securities and Exchange Commission; (b) the Board determines the Participant engaged in intentional misconduct that caused or substantially caused the need for the material restatement; and (c) a lower payment would have been made to the Participant based upon the restated financial results (collectively, the “Policy”). By accepting the grant of the RSUs pursuant to this Agreement, the Participant hereby agrees to be bound by the Policy and any amendment or replacement thereof designed to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or to comport with good corporate governance practices, and to repay amounts that the Participant may be required to be repay thereunder.

[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

[Name]

[Title]

ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT

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


.		ACCEPTS the award of the 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 the 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.



Date:
						(Signature of Participant)

						Print Name:

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EX-10.5 6 d171928dex105.htm EX-10.5 EX-10.5

Exhibit 10.5

Cash-Settled RSU Agreement

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT

This CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated , 20 (the “Grant Date”) is by and between Career Education Corporation, a Delaware corporation (the “Company”), and (the “Participant”).

2. Limitations on Transferability. Except in the event of the death of the Participant, at any time prior to the payment date of the RSUs (the “Settlement Date”), the RSUs, or any interest therein, cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated, encumbered or otherwise disposed.

4. Crediting and Settling RSUs.

(a) RSU Accounts. The Company shall establish an account on its books for each Participant who receives a grant of RSUs (the “RSU Account”). The RSUs granted hereby shall be credited to the 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 amounts credited to the RSU Account. The obligation to make distributions of amounts credited to the RSU Account shall be an unfunded, unsecured obligation of the Company.

(b) Settlement of RSU Accounts. The Company shall settle the RSU Account by delivering to the holder thereof (who may be the Participant or his or her beneficiary determined in accordance with Article XIV of the Plan, as applicable) an amount in cash, equal to the product of (i) the number of Vested RSUs in the RSU Account as of the applicable Settlement Date, multiplied by (ii) the Fair Market Value of a Share on the applicable Vesting Date (subject to applicable tax withholding obligations set forth in Section 16 of this Agreement or otherwise required by any taxing authority). The Settlement Date for all RSUs credited to the RSU Account shall be as soon as administratively practical following each Vesting Date (or the relevant vesting date set forth in Section 5(a) hereof), but in no event shall such Settlement

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Cash-Settled RSU Agreement

Date be later than March 15 of the calendar year following the calendar year in which a Vesting Date (or the relevant vesting date set forth in Section 5(a) hereof) occurs. Notwithstanding the foregoing, in no case will the amount due to the Participant in respect of an RSU exceed an amount equal to five times (5x) the Fair Market Value of a Share on the Grant Date.

(a) If the Participant incurs a Termination of Service because of his or her death or Disability, then any RSUs that had not become Vested RSUs prior to the date of the Termination of Service shall become Vested RSUs, and, as of the applicable Settlement Date, the Participant (or his or her beneficiary, as applicable) shall be entitled to receive an amount determined pursuant to Section 4 hereof.

(b) If the Participant incurs a Termination of Service for any reason other than his or her death or Disability, then any RSUs that had not become Vested RSUs 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 Participant will have such rights with respect to the RSUs as are provided for in the Plan.

7. Adjustments. The Committee may make or provide for such adjustments to the RSUs as provided for in Section 4.3 of the Plan.

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

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Cash-Settled RSU Agreement

Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or payments made or remaining due hereunder, subject to the terms and conditions of the Plan, and the Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or payments made pursuant hereto.

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Cash-Settled RSU Agreement

Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or payments made or remaining due hereunder, subject to the terms and conditions of the Plan, and the Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or payments made pursuant hereto.

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Cash-Settled RSU Agreement

9. Effect of Amendment of Plan or Agreement. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Participant, adversely affect the rights of the Participant under this Agreement, except as otherwise provided under the Plan. This Agreement may be amended as provided under the Plan, but except as provided in the Plan no such amendment shall adversely affect the Participant’s rights under the Agreement without the Participant’s written consent, unless otherwise permitted by the Plan.

10. 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.

11. No Stockholder Rights. The RSUs represent only the right to receive cash pursuant to the terms hereof and shall not represent an equity security of the Company and shall not carry any voting or dividend rights.

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 Participant or other relationship of the Participant with the Company shall not be affected in any way by this Agreement except as specifically provided herein. The Participant’s execution or acceptance of this Agreement shall not be construed as conferring any legal rights upon the Participant 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 Participant and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant.

14. No Guarantee of Future Awards. This Agreement does not guarantee the Participant the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.

15. No Impact on Other Benefits. The value of the Participant’s RSUs is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

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Cash-Settled RSU Agreement

16. Tax Consequences. Payments made pursuant hereto shall be subject to all required tax withholding obligations in accordance with Article XVIII of the Plan.

17. Disclosure Rights. Except as required by applicable law, the Company (or any of its Affiliates) shall not have any duty or obligation to disclose any information to a record or beneficial holder of RSUs or Vested RSUs.

20. Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. Notwithstanding any provision of this Agreement or the Plan to the contrary, to the extent that the Committee determines that any portion of the RSUs granted hereunder is subject to Section 409A of the Code and fails to comply with the requirements thereof, the Committee reserves the right to amend, restructure, terminate or replace such portion of the RSUs in order to cause it to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

22. Receipt of Plan. The Participant acknowledges receipt of a copy of the Plan, and represents that the Participant 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 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.

23. Cooperation. In the event of any pending or threatened investigation, proceeding, lawsuit, claim or legal action against or involving the Company, the Participant

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Cash-Settled RSU Agreement

acknowledges and agrees to cooperate to the fullest extent possible in the investigation, preparation, prosecution, or defense of the Company’s case, including, but not limited to, the execution of affidavits or documents, providing of information requested by the Company or the Company’s counsel, and meeting with Company representatives or the Company’s counsel. Nothing in this paragraph shall be construed as suggesting or implying that the Participant should testify in any way other than truthfully or provide anything other than accurate, truthful information.

24. 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.

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

29. Condition to Return Signed Agreement. This Agreement will be null and void unless the Participant indicates his or her acceptance of the award of the RSUs provided for hereunder by signing, dating and returning this Agreement to the Company on or before , 20 .

30. Construction. Notwithstanding any other provision of this Agreement, this Agreement is made, and the RSUs 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 Participant and all other persons.

[Signature Page Follows]

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Cash-Settled RSU Agreement

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

CAREER EDUCATION CORPORATION

[Name]

[Title]

ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT

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


.		ACCEPTS the award of the 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 the 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.



Date:
						(Signature of Participant)

						Print Name:

Please sign and return a fully executed .pdf of this Cash-Settled Restricted Stock Unit Agreement by , 20 to at CEC corporate via email ( ). Failure to do so will result in forfeiture of the Award. Please retain a copy of this signed Cash-Settled Restricted Stock Unit Agreement for your records.

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EX-10.6 7 d171928dex106.htm EX-10.6 EX-10.6

Exhibit 10.6

Cash-Settled RSU Agreement

Performance-Based

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT

3. Vesting. Subject to the provisions of Sections 5 and 6 of this Agreement, the RSUs shall cease to be restricted and shall, subject to achievement of the Performance Goal set forth below, become non-forfeitable (thereafter being referred to as “Vested RSUs”) in [equal] installments on [each of] ([each a] “Vesting Date”). Notwithstanding the foregoing, except as set forth in Sections 5 and 6 of this Agreement, none of the RSUs shall become Vested RSUs on any Vesting Date unless (the “Performance Goal”).

4. Crediting and Settling RSUs.

(a) RSU Accounts. The Company shall establish an account on its books for each Participant who receives a grant of RSUs (the “RSU Account”). The RSUs granted hereby shall be credited to the 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 amounts credited to the RSU Account. The obligation to make distributions of amounts credited to the RSU Account shall be an unfunded, unsecured obligation of the Company.

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Cash-Settled RSU Agreement

Date (subject to applicable tax withholding obligations set forth in Section 16 of this Agreement or otherwise required by any taxing authority). The Settlement Date for all RSUs credited to the RSU Account shall be as soon as administratively practical following each Vesting Date (or the relevant vesting date set forth in Section 5(a) hereof), subject to achievement of the Performance Goal, but in no event shall such Settlement Date be later than March 15 of the calendar year following the calendar year in which a Vesting Date (or the relevant vesting date set forth in Section 5(a) hereof) occurs. Notwithstanding the foregoing, in no case will the amount due to the Participant in respect of an RSU exceed an amount equal to five times (5x) the Fair Market Value of a Share on the Grant Date.

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

7. Adjustments. The Committee may make or provide for such adjustments to the RSUs as provided for in Section 4.3 of the Plan.

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

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Cash-Settled RSU Agreement

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Cash-Settled RSU Agreement

or remaining due hereunder, subject to the terms and conditions of the Plan, and the Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or payments made pursuant hereto.

Should the Participant 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

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Cash-Settled RSU Agreement

equity and law, and the Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or payments made or remaining due hereunder, subject to the terms and conditions of the Plan, and the Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or payments made pursuant hereto.

9. Effect of Amendment of Plan or Agreement. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Participant, adversely affect the rights of the Participant under this Agreement, except as otherwise provided under the Plan. This Agreement may be amended as provided under the Plan, but except as provided in the Plan no such amendment shall adversely affect the Participant’s rights under the Agreement without the Participant’s written consent, unless otherwise permitted by the Plan.

14. No Guarantee of Future Awards. This Agreement does not guarantee the Participant the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.

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Cash-Settled RSU Agreement

16. Tax Consequences. Payments made pursuant hereto shall be subject to all required tax withholding obligations in accordance with Article XVIII of the Plan.

22. Receipt of Plan. The Participant acknowledges receipt of a copy of the Plan, and represents that the Participant 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 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.

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Cash-Settled RSU Agreement

24. 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.

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

31. Clawback Policy. By accepting the grant of the RSUs pursuant to this Agreement, the Participant hereby acknowledges that the Board has adopted a policy pursuant to which the Participant may be required to repay amounts otherwise paid pursuant to this Agreement to the extent (a) such amounts were predicated upon achieving certain financial results that were subsequently the subject of a material restatement of Company financial statements filed with

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Cash-Settled RSU Agreement

the Securities and Exchange Commission; (b) the Board determines the Participant engaged in intentional misconduct that caused or substantially caused the need for the material restatement; and (c) a lower payment would have been made to the Participant based upon the restated financial results (collectively, the “Policy”). By accepting the grant of the RSUs pursuant to this Agreement, the Participant hereby agrees to be bound by the Policy and any amendment or replacement thereof designed to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or to comport with good corporate governance practices, and to repay amounts that the Participant may be required to be repay thereunder.

[Signature Page Follows]

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Cash-Settled RSU Agreement

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

CAREER EDUCATION CORPORATION

[Name]

[Title]

ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT

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


.		ACCEPTS the award of the 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 the 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.



Date:
						(Signature of Participant)

						Print Name:

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EX-10.7 8 d171928dex107.htm EX-10.7 EX-10.7

Exhibit 10.7

Performance Unit Agreement

CAREER EDUCATION CORPORATION

2016 INCENTIVE COMPENSATION PLAN

PERFORMANCE UNIT AGREEMENT

This PERFORMANCE UNIT AGREEMENT (this “Agreement”), dated , 20 (the “Grant Date”) is by and between Career Education Corporation, a Delaware corporation (the “Company”), and (the “Participant”).

To evidence such Award and to set forth its terms, the Company and the Participant agree as follows:

1. Definitions. All capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the Career Education Corporation 2016 Incentive Compensation Plan, as amended from time to time (the “Plan”). When used herein, the following terms shall have the meaning set forth in this Section 1.

(a) “Award Percentage” means a percentage determined pursuant to the table set forth below, based on the Company’s Performance Percentile:


Performance Percentile		Award Percentage
75 or higher		200%
70		180%
60		140%
50		100%
40		80%
30		60%
25		50%
Lower than 25		0%

Note: To the extent the Performance Percentile is in between the percentiles listed in the table above, the applicable Award Percentage will be interpolated. For example, if the Performance Percentile is 55, then the Award Percentage would be 120%.

Notwithstanding the foregoing table, if the Company’s Total Shareholder Return is less than zero (0), then the Award Percentage will be determined pursuant to the table set forth above, but in such case, the Award Percentage shall not exceed 100%.

(b) “Closing Stock Price” means the average of the closing prices of the stock of the Company or the Peer Group member, as applicable, for each trading day during the ninety (90) calendar day period immediately preceding, but not including, the last day of the Performance Period, except as otherwise provided in Section 1(e). The Closing Stock Price shall be adjusted so that such price represents the amount it would have been had all dividends paid during the Performance Period been reinvested in stock of the Company or the Peer Group member, as applicable, on the dividend date.

(c) “Opening Stock Price” means the average of the closing prices of the stock of the Company or the Peer Group member, as applicable, for each trading day during the ninety (90) calendar day period immediately preceding, but not including, the first day of the Performance Period.

(d) “Payment Date” means a date selected by the Company, which shall occur any time in the period beginning January 1, 20 and ending on March 15, 20 .

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Performance Unit Agreement

(e) “Peer Group” means the entities listed on Exhibit A, but in each case only if the stock of such entity remains publicly traded on a national securities exchange as of the last day of the Performance Period, except as follows:

(i) If during the Performance Period a member of the Peer Group files a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code or liquidation under Chapter 7 of the U.S. Bankruptcy Code, then such member shall remain as part of the Peer Group; provided, however, that the Closing Stock Price with respect to such member shall be the average of the closing stock prices for each trading day during the ninety (90) calendar day period immediately preceding, but not including, the last trading day on which such member’s stock is publicly traded on a national securities exchange. If such member has not ceased to be publicly traded on a national securities exchange prior to the last day of the Performance Period, then such member shall remain as part of the Peer Group without the adjustment to the Closing Stock Price set forth in this Section 1(e)(i).

(ii) If during the Performance Period the stock of a member of the Peer Group ceases to be publicly traded on a national securities exchange as a result of voluntary or involuntary delisting (other than pursuant to an event described in Section 1(e)(iii)), then such member shall remain as part of the Peer Group; provided, however, that the Closing Stock Price with respect to such member shall be the average of the closing stock prices for each trading day during the ninety (90) calendar day period immediately preceding, but not including, the last trading day on which such member’s stock is publicly traded on a national securities exchange. If such member again becomes publicly traded on a national securities exchange prior to the date that is ninety (90) calendar days prior to the last day of the Performance Period, and remains continuously traded thereon during such period, then such member shall remain as part of the Peer Group without the adjustment to the Closing Stock Price set forth in this Section 1(e)(ii).

(iii) If during the Performance Period the stock of a member of the Peer Group ceases to be publicly traded on a national securities exchange as a result of a management buyout or other “going private” transaction, or a merger, acquisition or business combination transaction of such member by or with another entity where such member is not the surviving entity, then such member shall be removed from the Peer Group.

For the avoidance of doubt, if during the Performance Period a member of the Peer Group merges or otherwise combines with another entity in a transaction where such member is the surviving entity and remains publicly traded on a national securities exchange, then such member shall remain as part of the Peer Group until determined otherwise pursuant to this Section 1(e). A “national securities exchange” means a securities exchange that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934, as amended.

(f) “Performance Percentile” means the rank, expressed as a percentile and approved and certified by the Committee, of the Company’s Total Shareholder Return for the Performance Period when compared against the Total Shareholder Return of each of the members of the Peer Group. For purposes of this ranking, the Total Shareholder Return for each member of the Peer Group shall first be determined and ranked and then the Total Shareholder Return of the Company shall be compared to the ranking of the Peer Group members.

-2-

Performance Unit Agreement

(g) “Performance Period” means the period beginning on January 1, 20 and ending on December 31, 20__.

(h) “Target Value” means $[ ].

(i) “Total Shareholder Return” means the result (positive or negative) of the following formula (expressed as a percentage): (A – B)/B; where “A” equals the Closing Stock Price, and “B” equals the Opening Stock Price.

2. Grant of Performance Unit. Subject to and upon the terms and conditions set forth in this Agreement and the Plan, the Committee granted to the Participant a performance unit (the “Performance Unit”) on the Grant Date, and the Participant hereby accepts the grant of the Performance Unit as set forth herein. Except as otherwise provided herein, the Performance Unit granted hereby shall have no value until the Payment Date.

3. Limitations on Transferability. Except in the event of the death of the Participant, at any time prior to the Payment Date, the Performance Unit, or any interest therein, cannot be directly or indirectly transferred, sold, assigned, pledged, hypothecated, encumbered or otherwise disposed.

4. Payment for Performance Unit. Following the end of the Performance Period, but not later than March 15, 20__, the Company will pay the Participant an amount in respect of the Performance Unit (which amount may not be less than zero dollars ($0)) determined pursuant to this Section 4. The amount due to the Participant in respect of the Performance Unit shall equal the product of (a) the Target Value, multiplied by (b) the Award Percentage. The amount payable to the Participant hereunder shall be subject to tax withholding as required by Section 16.

5. Termination of Service. Subject to Section 6, the provisions of this Section 5 shall apply in the event that the Participant incurs a Termination of Service at any time prior to the end of the Performance Period.

(a) If the Participant incurs a Termination of Service prior to the end of the Performance Period because of his or her death or Disability, the Participant (or his or her beneficiary, if applicable, as selected in accordance with Article XIV of the Plan) shall receive a payment in respect of the Performance Unit equal to the result of the following formula: A x (B/1095); where “A” equals the Target Value and “B” equals the number of days elapsing between the beginning of the Performance Period and the applicable Termination of Service. The amount payable pursuant to this Section 5(a) (i) will be paid as soon as reasonably possible following the date of such Termination of Service, but in no case later than March 15 of the year following the year in which such Termination of Service occurs, and (ii) will be subject to tax withholding as required by Section 16.

(b) If the Participant incurs a Termination of Service prior to the end of the Performance Period for any reason other than his or her death or Disability, then the Performance Unit shall be immediately forfeited to the Company and no amount will become due or owing to the Participant under this Agreement.

(c) For the avoidance of doubt, (i) if the Participant incurs a Termination of Service for any reason other than Cause after the end of the Performance Period but prior to the Payment Date, he or she shall remain eligible for the payment described in Section 4 hereof, and (ii) in the event the Participant incurs a Termination of Service for Cause at any time prior to the Payment Date, no amount shall be payable to the Participant hereunder and the Performance Unit shall be forfeited by the Participant as of the date of such Termination of Service.

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Performance Unit Agreement

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

7. Adjustments. The Committee may make or provide for such adjustments as provided for in Section 4.3 of the Plan.

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

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Performance Unit Agreement

Corporation, National American University Holdings Inc., Ross Education, LLC, Strayer Education Inc., Universal Technical Institute Inc., Zenith Education Group, Inc.] and each of their respective subsidiaries, affiliates and successors. [Bracketed text to be updated annually by management.] The Participant further acknowledges that the Company and/or its subsidiaries or Affiliates provide career-oriented education through physical campuses throughout the United States and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. If the Participant incurs an involuntary Termination of Service by the Company other than for Cause, the Participant will not be subject to any post-termination non-compete restriction under this Section 8(a).

Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the payments made or remaining due hereunder, subject to the terms and conditions of the Plan, and the Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such payments made pursuant hereto.

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

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Performance Unit Agreement

Should the Participant 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 Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the payments made or remaining due hereunder, subject to the terms and conditions of the Plan, and the Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such payments made pursuant hereto.

9. Effect of Amendment of Plan or Agreement. No discontinuation, modification, or amendment of the Plan may, without the written consent of the Participant, adversely affect the rights of the Participant under this Agreement, except as otherwise provided under the Plan. This Agreement may be amended as provided under the Plan, but except as provided in the Plan no such amendment shall adversely affect the Participant’s rights under the Agreement without the Participant’s written consent, unless otherwise permitted by the Plan.

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Performance Unit Agreement

11. No Stockholder Rights. The Performance Unit represents only the right to receive cash pursuant to the terms hereof and shall not represent an equity security of the Company and shall not carry any voting or dividend rights.

12. Compliance with Applicable Laws and Regulations. Notwithstanding anything herein to the contrary, the Company shall not be obligated to pay amounts due hereunder unless and until the Company is advised by its counsel that such payment 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 payment, and in order to ensure compliance with such laws, regulations and requirements, that the Participant make such covenants, agreements, and representations as the Company, in its sole discretion, considers necessary or desirable. In addition, to the extent that all or any portion of any payment otherwise due hereunder would not be deductible by the Company for federal tax purposes (irrespective of whether the Company would, in fact, have the ability to take advantage of such deduction), then the Company reserves the right to reduce or eliminate such payment to an amount that would be deductible by the Company for federal tax purposes.

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 Participant or other relationship of the Participant with the Company shall not be affected in any way by this Agreement except as specifically provided herein. The Participant’s execution or acceptance of this Agreement shall not be construed as conferring any legal rights upon the Participant 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 Participant and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant.

14. No Guarantee of Future Awards. This Agreement does not guarantee the Participant the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.

15. No Impact on Other Benefits. The value of the Performance Unit is not part of the Participant’s normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

16. Tax Consequences. Payments made pursuant hereto shall be subject to all required tax withholding obligations, in accordance with Article XVIII of the Plan.

17. Disclosure Rights. Except as required by applicable law, the Company (or any of its Affiliates) shall not have any duty or obligation to disclose any information to the holder of the Performance Unit.

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Performance Unit Agreement

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

20. Compliance with Section 409A of the Code. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. Notwithstanding any provision of this Agreement or the Plan to the contrary, to the extent that the Committee determines that the Performance Unit granted hereunder is subject to Section 409A of the Code and fails to comply with the requirements thereof, the Committee reserves the right to amend, restructure, terminate or replace the Performance Unit in order to cause it to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

22. Receipt of Plan. The Participant acknowledges receipt of a copy of the Plan, and represents that the Participant is familiar with the terms and provisions thereof, and hereby accepts the Performance Unit subject to all the terms and provisions of this Agreement and of 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.

24. 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.

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

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Performance Unit Agreement

29. Condition to Return Signed Agreement. This Agreement will be null and void unless the Participant indicates his or her acceptance of the award of the Performance Unit provided for hereunder by signing, dating and returning this Agreement to the Company on or before , 20 .

30. Construction. Notwithstanding any other provision of this Agreement, this Agreement is made, and the Performance Unit is 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 Participant and all other persons.

31. Clawback Policy. By accepting the grant of the Performance Unit pursuant to this Agreement, the Participant hereby acknowledges that the Board has adopted a policy pursuant to which the Participant may be required to repay amounts otherwise paid pursuant to this Agreement to the extent (a) such amounts were predicated upon achieving certain financial results that were subsequently the subject of a material restatement of Company financial statements filed with the Securities and Exchange Commission; (b) the Board determines the Participant engaged in intentional misconduct that caused or substantially caused the need for the material restatement; and (c) a lower payment would have been made to the Participant based upon the restated financial results (collectively, the “Policy”). By accepting the grant of the Performance Unit pursuant to this Agreement, the Participant hereby agrees to be bound by the Policy and any amendment or replacement thereof designed to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or to comport with good corporate governance practices, and to repay amounts that the Participant may be required to be repay thereunder.

[Signature Page Follows]

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Performance Unit Agreement

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

CAREER EDUCATION CORPORATION

[Name]

[Title]

ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT

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


.		ACCEPTS the award of the Performance Unit 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 Performance Unit 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.



Date:
						(Signature of Participant)

						Print Name:

Please sign and return a fully executed .pdf of this Performance Unit Agreement by , 20 to at CEC corporate via email ( ). Failure to do so will result in forfeiture of the Award. Please retain a copy of this signed Performance Unit Agreement for your records.

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Performance Unit Agreement

EXHIBIT A

PEER GROUP

1.	American Public Education, Inc.

2.	Apollo Group, Inc.

3.	Bridgepoint Education, Inc.

4.	Capella Education Company

5.	DeVry, Inc.

6.	ITT Educational Services Inc.

7.	Grand Canyon Education Inc.

8.	Graham Holdings Company

K-12 Inc.

10.	Lincoln Education Services Corporation

11.	National American University Holdings Inc.

12.	Strayer Education Inc.

13.	Universal Technical Institute Inc.

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