Exhibit 10.4

2013 Cash-Settled RSU Agreement

Performance-Based

Mr. Steffey

CAREER EDUCATION CORPORATION

CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT

This CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated
April 8, 2013 (the “Grant Date”) is by and between Career Education Corporation,
a Delaware corporation (the “Company”), and Scott Steffey (the “Grantee”).

The Company hereby grants such award to the Grantee. Notwithstanding that the
award is not, and shall not be deemed to be, granted under the Company’s 2008
Incentive Compensation Plan, as amended (the “Plan”), the award shall be subject
to all of the terms of the Plan as if it had been granted thereunder, provided,
however, that the terms of this Agreement shall control with respect to such
matters expressly addressed herein, and all capitalized terms not otherwise
defined in this Agreement shall have the meaning set forth in Plan.

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

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

3.        Dates of Vesting. Subject to the provisions of Sections 5 and 6 of
this Agreement, the RSUs shall cease to be restricted and shall, subject to
achievement of the Performance Goal set forth below, become non-forfeitable
(thereafter being referred to as “Vested RSUs”) in four equal installments on
each of April 8, 2014, March 14, 2015, March 14, 2016 and March 14, 2017 (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 aggregate Revenue for the four consecutive fiscal
quarters, commencing with the Company’s second quarter for fiscal year 2013,
equals or exceeds $500 million in the aggregate (the “Performance Goal”).
“Revenue” means, with respect to each fiscal quarter of the Company applicable
with respect to determination of the Performance Goal, the revenue of the
Company as reported on the Company’s Form 10-Q for such quarter (which is
prepared in accordance with the generally accepted accounting principles of the
U.S.).

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

 

4.        Crediting

and Settling RSUs.

(a)      RSU Accounts. The Company shall establish an account on its books for
each grantee who receives a grant of RSUs (the “RSU Account”). The RSUs granted
hereby shall be credited to the RSU Account as of the Grant Date. The RSU
Account shall

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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 Grantee or his Beneficiary,
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 24 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, as
applicable, 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 Grantee in respect of an
RSU exceed an amount equal to five times (5x) the Fair Market Value of a Share
on the Grant Date.

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

(a)       In the event the Grantee incurs a Termination of Service by the
Grantee for Good Reason or by the Company other than for Cause, death or
Disability (as such terms are defined in the employment letter agreement between
the Grantee and the Company, dated April 1, 2013 (the “Employment Letter
Agreement”), then the RSUs shall service-vest in full on the date of Termination
of Service, subject to achievement of the Performance Goal, and shall be payable
within 30 days following the later of such Termination of Service and the date
of achievement of the Performance Goal.

(b)       In the event the Grantee incurs a Termination of Service because of
his death or Disability, all RSUs that had not become Vested RSUs prior to the
date of the Termination of Service, shall become Vested RSUs as of the date of
such Termination of Service, and, as of the applicable Settlement Date, the
Grantee (or his Beneficiary, as applicable) shall be entitled to receive an
amount determined pursuant to Section 4 hereof.

(c)       If the Grantee incurs a Termination of Service for any reason other
than as set forth in 5(a) and 5(b) above, including by reason of Termination of
Service for Cause, except as provided in Section 6 of this Agreement, then the
RSUs shall be immediately forfeited to the Company and no amount or Shares will
become due or owing to the Grantee under this Agreement.

6.        Change in Control. Upon a Change in Control, the Grantee will have
such rights with respect to the RSUs as are provided for in the Plan with
respect to awards granted under the Plan. In addition, in the event the Grantee
incurs a Termination of Service by the Grantee for Good Reason or by the Company
other than for Cause, death or Disability, in either case on or within 18 months
following a Change in Control, all RSUs that had not become Vested RSUs prior to
the date of such Termination of Service shall become Vested RSUs, which for such
purpose the Performance Goal shall then be deemed achieved, and, as of the
Settlement Date, the Grantee shall be entitled to receive an amount determined
pursuant to Section 4 hereof in respect of such Vested RSUs.

 

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7.         Adjustment in RSUs. The Committee may make or provide for such
adjustments consistent with the terms of Section 4.2 of the Plan.

8.         Plan Amendment. No discontinuation, modification, or amendment of the
Plan may, without the written consent of the Grantee, adversely affect the
rights of the Grantee under this Agreement, except as otherwise provided under
the Plan with respect to awards granted under the Plan.

9.         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.

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

11.         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.

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

13.         Compliance with 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 Grantee make
such covenants, agreements, and representations as the Company, in its sole
discretion, considers necessary or desirable. The RSUs are intended to comply
with the Performance-Based Exception and shall, to the greatest extent
reasonably possible, be administered in a manner that complies with the
requirements of the Performance-Based Exception. This Agreement shall be
interpreted as reserving to the Committee all powers necessary to ensure that
amounts payable hereunder satisfy the requirements of the Performance-Based
Exception.

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

15.         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.

 

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

17.         Construction. Notwithstanding any other provision of this Agreement,
including that the RSUs are not granted under the Plan, it is the intent of the
parties that the RSUs are granted consistent with the terms of the Plan and
shall be deemed in all respects limited by and subject to the express provisions
of the Plan as such provisions would apply to awards granted under the Plan.
Notwithstanding the terms of the Plan, this Agreement shall control with respect
to such matters expressly addressed herein. 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 this Agreement consistent
herewith, shall be final and binding upon the Grantee and all other persons.

18.         Entire Agreement. This Agreement, together with the terms of the
Plan as if the RSUs had been granted under 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.

19.         Amendment. This Agreement may be amended consistent with the terms
of the Plan, but except as provided in the Plan no such amendment shall
adversely affect the Grantee’s rights under the Agreement without the Grantee’s
written consent, unless otherwise permitted by the Plan with respect to awards
granted under the Plan.

20.         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.

21.         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.

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

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 effect any other provision hereof, and this Agreement
shall be construed as if such invalid or unenforceable provision were omitted.

 

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24.        Tax Consequences. Payments made pursuant hereto shall be subject to
all required tax withholding obligations.

25.        Receipt of Plan. The Grantee acknowledges receipt of a copy of the
Plan, and represents that the Grantee is familiar with the terms and provisions
thereof, and hereby accepts the RSUs subject to all the terms and provisions of
this Agreement and acknowledges and agrees that the terms of the Plan shall
apply to the RSUs as if the RSUs had been granted under the Plan; provided,
however, this Agreement shall control with respect to such matters expressly
addressed herein. 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.

26.        Restrictive Covenants. In consideration of receiving the RSUs
hereunder, and as a term and condition of the Grantee’s employment with the
Company, the Grantee acknowledges and agrees to adhere to, and be bound by, the
restrictive covenants set forth in the Employment Letter Agreement. The Grantee
hereby further acknowledges that the Grantee’s job responsibilities give the
Grantee access to confidential and proprietary information belonging to the
Company and/or its subsidiaries, and that this and other confidential
information to which the Grantee has access would be of value, and provide an
unfair advantage, to a competitor in competing against the Company or its
subsidiaries in any of the markets in which the Company or its subsidiaries
maintains schools, provides on-line education classes or otherwise conducts
business. The Grantee further acknowledges that the restrictive covenants set
forth in the Employment Letter Agreement will not cause the Grantee undue
hardship and are reasonable and necessary to protect the Company’s and/or its
subsidiaries’ legitimate business interests. Furthermore, it is the intention of
the Grantee and the Company that in the event any of the restrictive covenants
set forth in the Employment Letter Agreement are determined to be unreasonable
and/or unenforceable with respect to scope, time or geographical coverage, the
Grantee and the Company agree that such covenants may be modified and narrowed
by a court, so as to provide the maximum legally enforceable protection of the
Company’s and any of its subsidiaries’ interests.

27.        Clawback Policy. By accepting the grant of RSUs pursuant to this
Agreement, the Grantee hereby acknowledges that the Board has adopted a policy
pursuant to which the Grantee 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 Grantee 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
Grantee based upon the restated financial results (collectively, the “Policy”).
By accepting the grant of RSUs pursuant to this Agreement, the Grantee hereby
agrees to be bound by the Policy and to repay amounts that Grantee may be
required to be repay thereunder.

28.        Condition to Accept Agreement. This Agreement will be null and void
unless the Grantee indicates his acceptance of the award of the RSUs provided
for hereunder by signing, dating and returning this Agreement to the Company on
or before April     , 2013.

[Signature Page Follows]

 

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

 

CAREER EDUCATION CORPORATION

 

By:     Name:     Title:    

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

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

 

        

ACCEPTS the award of RSUs as set forth in this Agreement and agrees to be bound
by the terms and conditions of this Agreement and the terms of the Plan as if
the RSUs had been granted under the Plan.

 

        

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

 

Date:

       

 

     

(Signature of Grantee)

     

Print Name:

   

Please sign and return your signed copy of this Cash-Settled Restricted Stock
Unit Agreement by April     , 2013, to                                          
   . 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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