EXHIBIT 10.4

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

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

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

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

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

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

3. Term, Vesting and Forfeiture of the Option.

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

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

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

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

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

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

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

4. [Reserved].

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

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

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

 

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

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

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

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

 

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

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

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

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

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

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

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

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

 

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

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

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

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

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

(a) For twelve (12) months following Grantee’s voluntary resignation from
Grantee’s employment with the Company or Grantee’s termination from employment
by the Company for Cause, accept employment with, own, manage, operate, consult
or provide expert services to any person or entity that competes with the
Company or any of its subsidiaries in any capacity that involves any
responsibilities or activities involving or relating to any Competing
Educational Service, as defined herein. “Competing Educational Service” means
any

 

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

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

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

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

19. Condition to Return Signed Agreement. This Agreement shall be null and void
unless the Grantee indicates his or her acceptance of the Option and this
Agreement by signing, dating, and returning this Agreement to the Company on or
before March 20, 2012.

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

[Signature Page Follows]

 

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

 

    CAREER EDUCATION CORPORATION    

/s/ Michael J. Graham

   

Executive Vice President and Chief

Financial Officer

ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE

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

 

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

 

¨ 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: 3/2/12      

/s/ Steven H. Lesnik

    (Signature of Grantee)     Print Name: Steven H. Lesnik

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

 

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