Exhibit 10.1

 

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July 30, 2015

Via Electronic Mail

Mr. Todd S. Nelson

Dear Todd,

On behalf of Career Education Corporation (the “Company”), I am pleased to
confirm our offer of employment to you for the position of President and Chief
Executive Officer. Upon your acceptance of this offer as outlined below, you
will join the Company effective as of the Commencement Date (as defined below)
as a full-time employee reporting to the Company’s Board of Directors (the
“Board”).

Your employment with the Company will be subject to the terms and conditions set
forth in this letter (“Letter”). It is anticipated that you will commence
employment on August 12, 2015 (the actual date you commence employment, the
“Commencement Date”).

 

  1. Positions and Duties. You will serve as the Company’s President and Chief
Executive Officer, and shall report directly to the Board. You will render such
business and professional services in the performance of your duties, consistent
with your position in the Company, as are reasonably assigned to you by the
Board. The period you are employed by the Company under this Letter is referred
to herein as the “Employment Term.” During the Employment Term, you will devote
your full business time and efforts to the Company and will use good faith
efforts to discharge your obligations under this Letter to the best of your
ability and in accordance with applicable law and each of the Company’s ethics
guidelines, conflict of interest policies and any code of business conduct
policies as may be in effect from time to time. During the Employment Term, you
agree not to actively engage in any other employment, occupation, or consulting
activity for any direct or indirect remuneration without the prior approval of
the Board; provided, you may engage in charitable and civic activities and, upon
prior approval of the Board, may serve on one for-profit board of directors,
provided such activities and service are not competitive with the Company and do
not interfere with your duties. It is expected that you will perform a majority
of your duties for the Company at its headquarters, which is currently located
in Schaumburg, Illinois.

 

  2. At-will Employment. You and the Company agree that your employment with the
Company constitutes “at-will” employment and either you or the Company may
terminate your employment at any time for any reason, subject to the terms of
this Letter below. Without limiting the foregoing, you may be entitled to
severance and other benefits in connection with termination of your employment
depending upon the circumstances of the termination of your employment, as set
forth in this Letter.

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  3. Board Membership. It is expected that you will be appointed to serve as a
member of the Board upon or shortly following the Commencement Date. Your
continued service as a member of the Board will be subject to the Board’s
ongoing nomination process and any required stockholder approval. Upon the
termination of your employment for any reason and unless otherwise requested by
the Board, you will be deemed to have resigned from the Board (and all other
positions held at the Company and its affiliates) voluntarily and without
further action from the Board, effective as of the end of your employment, and
you, at the Board’s request, will execute the documents necessary to reflect
your resignation from the Board.

 

  4. Base Salary. You will be paid an annual base salary of $770,000 (“Base
Salary”), payable in installments in accordance with the Company’s standard
payroll schedule.

 

  5. Annual Bonus. You will be eligible to participate in the Company’s Annual
Incentive Award Program (or successor program) (“AIP”) and thereby earn an
annual target performance bonus equal to 100% of your Base Salary (prorated for
the portion of the year that you are employed by the Company), with a maximum
payment level of 200% of your target bonus amount for fiscal year 2015 payable
in cash in an amount determined by the Board, or the Compensation Committee of
the Board (the “Compensation Committee”), in its sole and absolute discretion,
based upon performance criteria determined by the Board or the Compensation
Committee (the “Annual Bonus”); provided that for fiscal year 2015, you will be
eligible to receive an Annual Bonus equal to not less than 100% of your target
Annual Bonus, pro-rated based on the number of days in fiscal year 2015 you are
employed from the Commencement Date through the last day of fiscal year 2015.
For years after 2015, subject to any change that may be implemented by the
Compensation Committee and similarly effects all executive officers of the
Company, your target bonus opportunity for each year’s Annual Bonus (expressed
as a percentage of your Base Salary) will not be less than the target bonus
opportunity for fiscal year 2015. The Annual Bonus for each year shall be paid
within a reasonable amount of time after the amount of such Annual Bonus is
determined by the Compensation Committee for the applicable fiscal year to which
the Annual Bonus relates, based on the achievement of the applicable performance
conditions. In any event, the Annual Bonus shall be paid no later than
seventy-five (75) days following the end of the Company’s fiscal year to which
such bonus relates.

 

  6. Benefits. During the Employment Term, you will be eligible to participate
in the benefit programs generally available to senior executive employees of the
Company.

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  7. Long-Term Incentive Awards. On the later of the Commencement Date and the
first date thereafter upon which the granting of equity-based awards are
permitted under the Company’s Amended and Restated Guidelines for Equity Awards
(such later date, the “Grant Date”), you will receive the following long-term
incentive awards (the “Long-Term Incentive Awards”):

 

  (a) a stock option award (the “Stock Options”) to purchase shares of the
common stock, par value $0.01 per share, of the Company (the “Common Stock”),
with the number of shares subject to the award determined by dividing
(i) $600,000 by (ii) the product of (x) the Black-Scholes value determined as of
the date which is two trading days prior to the Grant Date, and (y) the 30-day
average price of the Common Stock on the date that is one calendar week prior to
the Grant Date. The Stock Options will have a per share exercise price equal to
100% of the closing price per share of the Common Stock on the Grant Date and,
except as otherwise provided herein, will otherwise be granted in accordance
with, and subject to the terms of, the Company’s 2008 Incentive Compensation
Plan, as amended (or successor plan) (the “Plan”) and an applicable award
agreement thereunder. The Stock Options, will vest and become exercisable in
four equal annual installments on each of September 14, 2016, 2017, 2018 and
2019, provided that you remain employed by the Company on each applicable
vesting date, except as set forth in the Plan, the applicable award agreement or
this Letter.

 

  (b) an award of restricted stock units (the “RSUs”), half of which will be
cash-settled and the other half of which will be stock-settled, with the number
of shares of Common Stock underlying the RSUs subject to the award determined by
dividing $400,000 by the 30-day average price of the Common Stock on the date
that is one calendar week prior to the Grant Date. The RSUs will vest in equal
annual installments on each of September 14, 2016, 2017, 2018 and 2019, provided
that you remain employed by the Company through each applicable vesting date,
except as set forth in the Plan, the applicable award agreement or this Letter.
The RSUs will be granted in accordance with, and subject to the terms of, the
Plan and an applicable award agreement thereunder, provided that, all or a
portion of the cash-settled RSUs, may be granted outside of the Plan but subject
to terms consistent with the terms of the Plan, an applicable award agreement
thereunder or this Letter.

 

  (c) an award of cash-settled performance units (the “Performance Units”), with
a target amount of $1,000,000 and a maximum payment level of 200%. The
performance condition related to the Performance Units will be based on the
total shareholder return of the Common Stock as compared to the total
shareholder return of the Company’s peer group during the period beginning on
January 1, 2015 and ending on December 31, 2017. The Performance Units will vest
on December 31, 2017, provided that you remain employed by the Company through
each applicable vesting date, except as set forth in the Plan, the applicable
award agreement or this Letter. The payment due in connection with the
Performance Units will be determined pursuant to the applicable award agreement
based on the Company’s comparative total shareholder return, and paid no later
than March 15, 2018. The Performance Units will otherwise be granted in
accordance with, and subject to the terms of, the Plan, an applicable award
agreement and this Letter.

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Except as set forth below, or otherwise provided in an applicable award
agreement, upon termination of your employment, the Long-Term Incentive Awards
shall cease to vest or be exercisable (as applicable) and, to the extent not
then vested, shall be cancelled and forfeited.

 

  (i) In the event your employment is terminated by the Company without “Cause”
or you resign for “Good Reason,” as such terms are defined in Exhibit A to this
Letter, (A) the Stock Options shall vest in full on your date of termination and
remain exercisable for three years following your termination date, but in no
case beyond the expiration of the 10-year option term, (B) the RSUs shall vest
in full on the termination date and shall be payable within 30 days following
such termination date, and (C) the Performance Units shall vest and become
payable based on the actual performance results applicable to the Performance
Units and payable at such time as the Performance Units would otherwise be paid,
but in no event will such amount be paid after March 15, 2018; provided that the
amount paid to you shall be multiplied by a fraction, the numerator of which is
the number of days on or after the Commencement Date through the date of your
termination of employment and the denominator of which is 873.

 

  (ii) In the event your employment is terminated due to death or “Disability,”
as defined in Exhibit A to this Letter, (A) the Stock Options shall vest in full
on the date of your termination and remain exercisable for one year following
your termination date, but in no case beyond the expiration of the 10-year
option, (B) the RSUs shall vest in full on the date of your termination and
shall be payable within 30 days following such termination date, and (C) the
Performance Units shall vest and become payable at target on the date of
termination.

 

  (iii) If your employment is terminated by the Company without Cause or you
resign for Good Reason on or within 18 months following a “Change in Control”
(as defined in the Plan), with respect to the Performance Units, such award will
become vested and payable as of the date of your termination based on the
greater of (A) target performance or (B) actual performance measured as of the
date of the Change in Control, taking into account any price of the Common Stock
applicable in connection with the Change in Control, with future performance
extrapolated accordingly on the same basis.

 

  (iv) If your employment terminates by reason of your “Retirement” (as defined
in the Plan), the Stock Options shall remain exercisable for three years
following the date of your termination, but in no case beyond the expiration of
the 10-year option term.

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Commencing with the Company’s 2016 fiscal year, you will be eligible for annual
long-term incentive awards under the Plan, commensurate with the eligibility of
other senior executives for such awards, the actual awards to be determined in
the sole discretion of the Board or the Compensation Committee, as applicable.

 

  8. Sign-on Award. On the Commencement Date or within 10 days thereafter, you
shall receive a lump-sum cash payment in the amount of $1,000,000 (the “Sign-on
Cash Award”), as well as an award of cash-settled restricted stock units (the
“Sign-on RSUs,” and together with the “Sign-on Cash Award, the “Sign-on Award”)
with the number of shares of Common Stock underlying the Sign-on RSUs determined
by dividing $1,750,000 by the 30-day average price of the Common Stock on the
date that is one calendar week prior to the Grant Date. The Sign-on RSUs will be
granted outside of the Plan but subject to terms consistent with the terms of
the Plan and an applicable award agreement thereunder. You agree that as a
result of the Sign-on Award, you will neither be entitled to any reimbursement
for any commuting, living or relocation expenses you may incur in connection
with your employment by the Company, nor will you be eligible for any other
provision of commuting, housing or relocation assistance benefits from the
Company.

If your employment is terminated by the Company for Cause or you resign without
Good Reason (and not due to Disability), as to the after-tax amount of the of
the Sign-on Cash Award (the “After-Tax Cash Amount”), you shall repay to the
Company 100% of the After-Tax Cash Amount if such termination occurs prior to
the first anniversary of the Commencement Date. The Sign-on RSUs shall become
vested as follows: (i) fifty percent (50%) of the Sign-on RSUs shall become
vested on September 14, 2016, and (ii) the remaining fifty percent (50%) of the
Sign-on RSUs shall become vested September 14, 2017, provided that you remain
employed by the Company through each applicable vesting date, except as set
forth in the Plan or the applicable award agreement.

 

  9. Severance. To the extent your employment is terminated by the Company
without Cause or by you for Good Reason (not including death or Disability) at
any time, you will be eligible for benefits under the Company’s Executive
Severance Plan (as most recently amended and restated as of January 1, 2015), as
such plan may be further amended, restated or replaced from time to time (the
“Severance Plan”), subject to satisfaction of the Severance Plan’s relevant
requirements (e.g., incurring a qualifying termination and execution of
release). Notwithstanding the foregoing, for purposes of determining the
benefits due to you pursuant to the Severance Plan,

 

  (a) the following shall be deemed to be added to the end of Section I.C of the
Severance Plan: “For purposes of this Plan, the Eligible Employee shall be
deemed to have been involuntarily terminated by action of the Company if the
Eligible Employee terminated his employment with the Company for “Good Reason”
(as defined in Exhibit A to that certain Letter Agreement between the Company
and the Eligible Individual dated as of July 30, 2015 (the “Letter
Agreement”));”

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  (b) the definition of “Pay” in Section II.A.1 of the Severance Plan, shall be
deemed to be “the sum of (a) two times his or her annual base salary as shown on
the Company’s records at the time of termination, and (b) two times the target
value of his or her annual incentive under the Company’s applicable annual
incentive program (or program of similar effect) for the year in which
termination occurs;” and

 

  (c) a new Section II.A.4 shall be deemed to have been added to the Severance
Plan, which Section II.A.4 shall be deemed to read as follows: “Prorated Bonus.
Subject to compliance with Plan requirements, an Eligible Employee shall receive
payment of a pro rata portion of his Annual Bonus (as defined in the Letter
Agreement) for the fiscal year of the Company in his termination occurs, based
on the number of days of such fiscal year that elapsed through the date his
employment terminated and calculated based on the actual performance results
applicable to such fiscal year (with any exercise of negative discretion to be
based only on achievement (or lack thereof) of previously-established
performance goals and not subjective personal performance), payable at such time
as bonuses are paid by the Company to senior executives pursuant to the terms of
the AIP (as defined in the Letter Agreement), but in no event will such amount
be paid after the 75th day following the end of the fiscal year to which the
Annual Bonus relates.”

The treatment of your Long-Term Incentive Awards and Sign-on Award in the event
of such termination is as provided in Sections 7 and 8 above, respectively.

 

  10.

Golden Parachute Excise Tax. If the payments and benefits provided for in this
Letter or otherwise payable to you from the Company constitute “parachute
payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and would be subject to the excise tax imposed by
Section 4999 of the Code, then such payments and benefits shall be subject to
reduction to the extent necessary to assure that the payments and benefits
provided to you under this Letter will be limited to the greater of (a) the
amount of payments and benefits that can be provided without triggering a
parachute payment under Section 280G or (b) the maximum dollar amount of
payments and benefits that can be provided so as to provide you with the
greatest after-tax amount of such payments and benefits after taking into
account any excise tax you may incur under Section 4999 with respect to those
payments and benefits and any other benefits or payments to which you may be
entitled in connection with any change in control or ownership of the Company
under Section 280G or the subsequent termination of your employment. To the
extent reduction of any payments and benefits is required by this Section 10
such that no portion of your severance benefits will be subject to the excise
tax imposed by Section 4999, the severance benefits shall be reduced in the

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  following order: (i) cash severance pay, (ii) cash payments based on the
awards granted under Section 7 of this Letter, and (iii) the Stock Options,
RSUs, Performance Units and any other equity awards granted to you.

 

  11. Indemnification. On the Commencement Date, the Company and you will enter
into the Company’s then current form of Indemnification Agreement applicable to
executive officers and members of the Board of the Company and will cover you as
an insured (including coverage after a termination of your employment and
service as a director respecting your acts and omissions occurring during your
employment or as a director) under any contract of directors and officers
liability insurance that covers directors as insureds.

 

  12. Prerequisite. As a prerequisite to commencing employment with the Company,
you will be expected to satisfactorily pass (in the reasonable discretion of the
Board) a background check conducted at the request of the Company.

 

  13. Professional Fees. The Company agrees to reimburse you for any reasonable
attorneys’ fees incurred in connection with the negotiation and preparation of
documents relating to your commencement of employment with the Company,
including this Letter, provided that such reimbursed amounts shall not exceed
$20,000.

 

  14. Employment Representation. You hereby represent to the Company that your
execution and delivery of this Letter and the performance by you of your duties
hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which you are a
party or are otherwise bound.

 

  15.

Section 409A. It is intended that the payments provided under this Letter shall
be exempt from or comply with the requirements of Section 409A of the Code. This
Letter shall be construed, administered and governed in a manner that effects
such intent. It is further acknowledged and agreed that to the extent required
to avoid accelerated taxation or tax penalties under Section 409A of the Code,
(i) you will not be considered to have terminated employment or service for
purposes of this Letter, and no payments will be due under this Letter that are
payable upon termination of your employment or service until you would be
considered to have incurred a “separation from service” with the Company within
the meaning of Section 409A of the Code, and (ii) if at the time of your
termination of employment or service with the Company, you are a “specified
employee” as defined under Section 409A of the Code, then to the extent required
by Section 409A(a)(ii)(B)(i) of the Code, amounts due under this Letter that are
provided as a result of your separation from service, within the meaning of
Section 409A of the Code, and that would otherwise be paid or provided during
the first six months following such separation from service, shall be delayed
until the earlier to occur of (A) the first day of the seventh month following
your separation from service or (B) the date of your death. Subject to the
foregoing, in the event any payment or benefit becomes due under Section 9
conditioned upon your entering into a Release, and as a result of the date of

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  such Release the payment or benefit could be made in either of two of your
taxable years, such payment or benefit shall be made on the later of January 15
of the later such taxable year or within 10 days after the date such Release
becomes effective. No reimbursement payable to you pursuant to any provision of
this Letter or otherwise pursuant to any plan or arrangement of the of the
Company shall be paid later than the last day of the calendar year following the
calendar year in which the related expense was incurred, and no such
reimbursement during any calendar year shall affect the amounts eligible for
reimbursement in any other calendar year, except, in each case, to the extent
that the right to reimbursement does not provide for a “deferral of
compensation” within the meaning of Section 409A of the Code. In addition, your
right to reimbursement (or in-kind benefits) cannot be liquidated or exchanged
for any other benefit or payment.

 

  16. Restrictive Covenants.

 

  (a) Return of Company Property. You represent, warrant and covenant that upon
termination of your employment, you will return to the Company all Company
property in the your possession or control, including, without limitation, all
telephones, keys, access cards, security badges, credit cards, phone cards,
equipment, computer hardware and encryption devices (including, but not limited
to, all computers, smartphones, and personal data assistants), all contents of
all such hardware, all passwords and codes needed to obtain access to or operate
all or part of any such hardware, all electronic storage devices (including but
not limited to all hard drives, disk drives, diskettes, CDs, CD-ROMs, DVDs, and
DVD-ROMs), all contents of all such electronic storage devices, all passwords
and codes needed to obtain access to or use all or part of any such electronic
storage device, all computer software and programs, financial information,
accounting records, computer printouts, manuals, data, materials, papers, books,
files, documents, records, policies, student information and lists, customer
information and lists, marketing information, specifications and plans, data
base information and lists, mailing lists, and notes, including but not limited
to any property describing or containing any Confidential Information (as
defined below), and you agree that you will not retain any copies, duplicates,
reproductions or excerpts thereof in any form whatsoever.

 

  (b)

Confidential Information and Protection of Confidential Information. You
acknowledge that, throughout and as an incident to your employment with the
Company, you will become acquainted with and receive confidential information
relating to the Company, including trade secrets, processes, methods of
operation, business models and plans, advertising and marketing plans and
strategies, Company records, research techniques and results, academic programs,
academic course development, methods of instruction, training programs, computer
programs, databases, software codes, systems and models, marketing, promotional
and sales programs, and financial information concerning the

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  business of the Company, which information is not readily available to the
public and gives the Company an opportunity to gain an advantage over
competitors who do not know or use this information in the same manner as the
Company, and which the Company regards as confidential and proprietary
(collectively “Confidential Information”). Such Confidential Information
includes, but is not limited to: (i) information relating to the Company’s past
and existing students and vendors and the development of prospective students
and vendors, including, but not limited to, specific student service and product
requirements, pricing, arrangements, payment terms, student lists and other
similar information; (ii) inventions, designs, methods, discoveries, works of
authorship, creations, improvements or ideas developed or otherwise produced,
acquired or used by the Company; (iii) advertising and marketing plans and
strategies; (iv) the Company’s proprietary programs, processes or software;
(v) the subject matter of any patents, design patents, copyrights, trade
secrets, trademarks, service marks, trade names, trade dress, manuals, operating
instructions, training materials, and other industrial property; and (vi) other
confidential and proprietary information or documents relating to the Company or
its students or vendors which the Company reasonably regards as being
confidential. Confidential Information does not include: (a) information known
in general to your profession, or that becomes known thereafter, other than by
an unauthorized act by you; (b) information that was lawfully in your possession
before your employment with the Company; or (c) information obtained lawfully
and in good faith from another party after such disclosure emanating from an
original source other than the Company. You acknowledge that the Confidential
Information is of incalculable value to the Company and is the exclusive
property of the Company, and that the Company would suffer irreparable damage if
any of the Confidential Information is improperly disclosed or used.
Accordingly, you will not, at any time during your employment with (except as
you reasonably determine is required to discharge your duties as an officer of
the Company hereunder), or after the your separation from employment with, the
Company, reveal, divulge, or make known to any person, firm or corporation any
Confidential Information made known to you or of which you have become aware,
regardless of whether developed, prepared, devised, or otherwise created in
whole or in part by your efforts. You further agree that you will retain all
Confidential Information in trust for the sole benefit of the Company, and will
not (except, as provided above, to perform your duties) divulge or deliver any
Confidential Information to any unauthorized person including, without
limitation, any other employer of yours except as required by the order of any
court or similar tribunal or any other governmental body or agency of
appropriate jurisdiction; provided, that the you will, to the extent
practicable, give the Company prior written notice of any such disclosure and
will cooperate with the Company in obtaining a protective order or such similar
protection as the Company may deem appropriate to preserve the confidential
nature of such information. The foregoing obligations to maintain the
Confidential Information shall not apply to any Confidential Information that
is, or without any action by you becomes, generally available to the public

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  (c) Nondisparagement. You agree that, during your employment with the Company
and at any time thereafter, regardless of the reason for your termination
(whether voluntary or involuntary), you will not, directly or indirectly,
through any agent or affiliate, make any comments or criticisms (whether of a
professional or personal nature) to any individual or entity regarding the
Company (or the terms of any agreement or arrangement of the Company) or any of
its respective affiliates, stockholders or employees, that disparage the
Company, its business or reputation, or any of its affiliates, stockholders or
employees. The Company agrees that, during your employment with the Company and
at any time thereafter, regardless of the reason for your termination (whether
voluntary or involuntary), the Company will instruct its officers to not,
directly or indirectly, through any agent or affiliate, make any comments or
criticisms (whether of a professional or personal nature) to any individual or
entity regarding you that disparage you or your reputation. Nothing herein shall
preclude you or the Company from testifying, providing documents or otherwise
responding to the extent required by lawful subpoena or other legal process,
making appropriate reports to regulatory (or quasi-regulatory) bodies or
authorities, completing internal investigations (whether requested by a
regulatory (or quasi-regulatory) body or otherwise), completing any required or
recommended securities filings or disclosures, or communicating within the
Company to the extent consistent with legitimate business purposes.

 

  (d) Non-Solicitation/Non-hire. Commencing on the date of termination of your
employment with the Company and for a period of two years thereafter, you will
not, directly or indirectly, individually or on behalf of any Person (as defined
below) (i) hire, solicit, aid or induce any individual employed by the Company
or any affiliate of the Company, in either case during the 6-month period
immediately preceding such hiring, solicitation, aid or inducement, to leave the
Company or any affiliate of the Company to accept employment with or render
services for you or such Person, or (ii) solicit, aid or induce any then-current
student, customer, client, vendor, lender, supplier or sales representative of
the Company or any of its affiliates or similar persons engaged in business with
the Company or any of its affiliates to discontinue the relationship or reduce
the amount of business done with the Company or any of its affiliates. “Person”
means any individual, a partnership, a corporation, an association, a limited
liability company, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental entity, or any department, agency or
political subdivision thereof, or an accrediting body.

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  (e) Non-Competition. During your employment with the Company and/or any of its
subsidiaries and continuing for twenty-four (24) months thereafter, you shall
not, in any way, directly or indirectly, either for yourself or any other person
or entity, whether paid or unpaid, accept employment with, own, manage, operate,
consult or provide expert services to any person or entity that competes with
the Company or any of its subsidiaries in any capacity that involves any
responsibilities or activities involving or relating to any Competing
Educational Service, as defined herein. “Competing Educational Service” means
any educational service that competes with the educational services provided by
the Company and/or any of its subsidiaries, including but not limited to
coursework in the areas of visual communication and design technologies;
information technology; business studies; culinary arts; and health education,
or any education service. You hereby acknowledge that the following
organizations, among others, provide Competing Educational Services and, should
you 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 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; Grand Canyon Education Inc.; ITT Educational Services Inc.; Kaplan,
Inc.; Laureate Education, Inc.; Learning Tree International Inc.; Lincoln
Educational Services, Inc.; National American University Holdings Inc.; Pearson
Embanet; Ross Education, LLC; Strayer Education Inc.; Universal Technical
Institute Inc.; Zenith Education Group, Inc. and each of their respective
subsidiaries, affiliates and successors. You further acknowledge that the
Company and/or its subsidiaries 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 Section 16(e). Nothing herein shall prevent
you from owning less than two percent (2%) of the capital stock of a company
whose stock is publicly traded and that is engaged in Competing Educational
Services.

 

  (f) You acknowledge and agree that the Company will suffer irreparable injury
in the event of a breach by you of the terms of this Section 16. In the event of
a breach of the terms of this Section 16, the Company shall be entitled, in
addition to any other remedies and damages available and without proof of
monetary or immediate damage, to a temporary and/or permanent injunction,
without bond, to restrain the violation of this Section 16 by you or any persons
acting for or in concert with you. Such remedy, however, shall be cumulative and
nonexclusive and shall be in addition to any other remedy that the parties may
have.

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  (g) To the extent inconsistent, the provisions of this Section 16 will control
over any restrictive covenant provided in any other agreement (including the
duration of any covenant following termination of employment), including any
award agreement granted under the Plan, entered into from time to time unless
such other agreement specifically provides that it controls over this
Section 16.

 

  (h) The provisions of this Section 16 shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision in this
Section 16 is found by a court of competent jurisdiction to be unenforceable or
unreasonable as written, you and the Company hereby specifically and irrevocably
authorize and request said court to revise the unenforceable or unreasonable
provisions in a manner that shall result in the provision being enforceable
while remaining as similar as legally possible to the purpose and intent of the
original.

 

  17. Arbitration.

 

  (a) Arbitrable Claims. You and the Company mutually consent to the resolution
by final and binding arbitration of any and all disputes, controversies or
claims related in any way to your employment with the Company, including, but
not limited to, any dispute, controversy or claim of alleged discrimination,
harassment or retaliation (including, but not limited to, claims based on race,
sex, sexual orientation, gender identity, gender expression, religion, national
origin, age, marital or family status, medical condition, military status,
handicap or disability, or any other legally-protected status), any claim
arising out of or relating to this Letter, any awards granted hereunder, or the
breach thereof, and any dispute as to the arbitrability of a matter under this
provision (collectively, “Claims”); provided, however, that nothing herein shall
require arbitration of any claim or charge which, by law, cannot be the subject
of a compulsory arbitration agreement. You and the Company expressly acknowledge
that you waive the right to litigate Claims in a judicial forum before a judge
or jury.

 

  (b) Claim Initiation/Time Limits. A party must notify the other party in
writing of a request to arbitrate Claims within the same statute of limitations
applicable to the legal claim asserted. The written request for arbitration must
specify: (i) the factual basis on which the Claims are made; (ii) the statutory
provision or legal theory under which Claims are made; and (iii) the nature and
extent of any relief or remedy sought.

 

  (c)

Procedures. The arbitration will be administered in Chicago, Illinois, in
accordance with the Employment Arbitration Rules and Mediation Procedures then
in effect (“Rules”) of the American Arbitration Association (“AAA”), a copy of
which is available upon request to the Company. The arbitration shall be
conducted by a tribunal of three arbitrators, of whom you shall appoint one and

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July 30, 2015

Page 13

 

  the Company shall appoint one. The two arbitrators so appointed shall select
the chairman of the tribunal within thirty days of the appointment of the second
arbitrator. If any arbitrator is not appointed within the time limits provided
herein or in the Rules, such arbitrator shall be appointed by the American
Arbitration Association. You and the Company may be represented by counsel of
your choosing. You and the Company shall pay your own legal fees (including
counsel fees), and other fees and expenses incurred by you in obtaining or
defending any right or benefit under such Claims; provided, however, that,
irrespective of the outcome of any arbitration under this Section 17, the
Company will pay any fees of the AAA, filing costs, arbitrator fees or expenses
and any reasonable travel expenses incurred by you in connection with your
travel to Chicago, Illinois for any arbitration proceeding.

 

  (d) Responsibilities of Tribunal; Award; Judgment. The tribunal will act as
the impartial decision maker of any Claims that come within the scope of this
arbitration provision. The tribunal will have the powers and authorities
provided by the Rules and the state or common law under which the claim is made.
For example, the tribunal will have the power and authority to include all
remedies in the award available under the statute or common law under which the
claim is made including, without limitation, the issuance of an injunction. The
tribunal will apply the elements and burdens of proof, mitigation duty, interim
earnings offsets and other legal rules or requirements under the statutory
provision or common law under which such claim is made. The tribunal will permit
reasonable pre-hearing discovery. The tribunal will have the power to issue
subpoenas. The tribunal will have the authority to issue a summary disposition
if there are no material factual issues in dispute requiring a hearing and you
or the Company is clearly entitled to an award in its or your favor. The
tribunal will not have the power or authority to add to, detract from or modify
any provision of this Letter, or any related agreements or plans, including but
not limited to any equity awards. The tribunal, in rendering an award in any
arbitration conducted pursuant to this provision, shall issue a reasoned award
in a signed written opinion stating the findings of fact and conclusions of law
on which it is based. The tribunal shall be required to follow the law of the
state designated by the parties herein. Any judgment on or enforcement of any
award, including an award providing for interim or permanent injunctive relief,
rendered by the tribunal may be entered, enforced or appealed in any court
having jurisdiction thereof. Any arbitration proceedings, decision or award
rendered hereunder, and the validity, effect and interpretation of this
arbitration provision, shall be governed by the Federal Arbitration Act, 9
U.S.C. § 1 et seq.

 

  18. Survival; Successors. Sections 9, 11, and 16 through 23 of this Letter
shall survive and remain in effect following the date you terminate employment
with the Company, as provided for therein.

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July 30, 2015

Page 14

 

This Letter shall inure to the benefit of and be enforceable by your legal
representatives, including payment or provision of any unpaid amount or benefit
due you immediately prior to your death. This Letter shall inure to the benefit
of and be binding upon the Company and its successors.

 

  19. Entire Agreement. This Letter constitutes the entire agreement between the
parties hereto with respect to the matters referred to herein and supersedes any
and all prior agreements, whether written or oral. No other agreement relating
to the terms of your employment by the Company, oral or otherwise, shall be
binding between the parties unless it is in writing and signed by the party
against whom enforcement is sought. There are no promises, representations,
inducements or statements between the parties other than those that are
expressly contained herein. You acknowledge that you are entering into this
Letter of your own free will and accord, and with no duress, that you have read
this Letter and that you understand it and its legal consequences.

 

  20. Withholding Taxes. The Company may withhold from any amounts payable under
this Letter such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.

 

  21. Governing Law. The rights and obligations of you and the Company pursuant
to this Letter shall be governed by the laws of the State of Illinois, and you
and the Company specifically consent to the jurisdiction of the courts of the
State of Illinois located in Cook County, Illinois over any action arising out
of or related to this letter.

 

  22. Amendments and Waivers. Any term of this Letter may be amended or
terminated and the observance of any term of this Letter may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and you. No waivers
of or exceptions to any term, condition or provisions of this Letter, in any one
or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.

 

  23. Construction. You agree that we have participated jointly in the
negotiation and drafting of this Letter. In the event any ambiguity or question
of intent arises, this Letter shall be construed as having been drafted jointly
by us and no presumption or burden of proof shall arise favoring or disfavoring
either of us by virtue of the authorship of any of the provisions of this
letter.

 

  24. Counterparts. This Letter may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall be
deemed to be one and the same instrument. Signatures delivered by facsimile or
electronically (e.g., via .pdf file) shall be effective for all purposes.

[Signature Page to Letter Follows]

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[Signature Page to Letter]

We are enthusiastic about you joining the Company and look forward to working
with you. Please return a signed copy of this letter to either of us at your
earliest convenience

Sincerely,

CAREER EDUCATION CORPORATION

 

By:  

/s/ Thomas B. Lally

Name:   Thomas B. Lally Title:   Lead Director of the Board of Directors By:  

/s/ Patrick W. Gross

Name:   Patrick W. Gross Title:   Chairman of the Compensation Committee of the
Board of Directors

Accepted and Agreed to:

 

/s/ Todd S. Nelson

   

7-30-15

Todd S. Nelson     Date

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Exhibit A

“Cause” means, as reasonably determined by the Board, the occurrence of any one
of the following by you: (a) any willful misconduct, gross negligence, willful
abandonment of duty or material act of dishonesty; (b) a violation of the
Company’s Code of Ethics for the Executive Officers and Senior Financial
Officers or the Company Code of Business Conduct & Ethics, each as amended,
restated or superseded; (c) commission of a felony or any other crime involving
fraud or embezzlement; (d) a failure to reasonably cooperate in any
investigation or proceeding concerning the Company; or (e) any violation of any
non-compete, non-solicit or non-disclosure restrictive covenant applicable to
you. For all purposes, no act or omission to act by you shall be “willful” if
such act or omission was conducted in good faith or with a reasonable belief
such conduct was in the best interests of the Company.

“Disability” has the meaning set forth in treasury regulation section
1.409A-3(i)(4).

“Good Reason” means the occurrence of any one of the following, without your
prior written consent: (a) any material diminution in your title, duties or
responsibilities (including reporting requirements); for which purpose, “Good
Reason” will be deemed to occur upon any Change in Control in which occurs
either (i) you are not the most-senior officer of the top-most parent company
following such Change in Control or (ii) the Company stock ceases to be
publicly-traded upon such Change in Control; (b) any material reduction in Base
Salary, other than a proportional across-the-board reduction of applicable to
all senior executives not exceeding 20% of Base Salary, or any material
reduction in target Annual Bonus opportunity; (c) any material failure to pay
any compensation when otherwise payable; or (d) any failure of a successor to
the Company’s assets or business to assume the Company’s obligations to you
under all applicable agreements. Notwithstanding the foregoing, your employment
shall not be deemed to terminate for Good Reason unless you have given notice to
the Company within 30 days of your knowledge of the first occurrence of one or
more events alleged to give rise to Good Reason, the Company has failed to cure
such event or events within 30 days following such notice, and your employment
has terminated within two years following the occurrence of such events.

 

A-1