EXHIBIT 10.1

FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT
BY AND AMONG
JOHN M. LARSON, CAREER EDUCATION CORPORATION
AND
CEC EMPLOYEE GROUP, LLC

WHEREAS, JOHN M. LARSON (the “Executive”), CAREER EDUCATION CORPORATION, a
Delaware corporation (the “Company”) and CEC EMPLOYEE GROUP, LLC (“Employee
Group”) entered into that certain Employment Agreement as of the 1st day of
August, 2000 (the “Agreement”); and

WHEREAS, the Company intends to remove Executive from the offices of President
and Chief Executive Officer of the Company and to reduce the amount of
compensation paid to Executive effective as of Transition Date as defined in
this amendment to the Agreement; and

WHEREAS, the Company otherwise desires to continue to employ Executive as the
Chairman of the Board, the Board desires that Executive continue to serve as a
member of the Board and as the Chairman of the Board notwithstanding such
changed employment and does not desire Executive tender his resignation from the
Board or from his position as Chairman of the Board, and except as specifically
modified herein, the Board and Company desire that the Agreement remain in full
force and effect;

NOW, THEREFORE, in consideration of the mutual undertakings of the parties, the
parties agree:

I.

Section 2 of the Agreement is amended by adding a new sentence to the end of
Section 2.1 to read as follows:

Notwithstanding any prior increase in Base Salary, effective during the term of
the Agreement after September 24, 2006 (the “Transition Date”), the Company
agrees to pay Larson a reduced Base Salary at the rate of $500,000 per annum. 
Such reduced Base Salary shall be subject to annual review by the Board and may
be increased by the Board in its sole and absolute discretion but may not be
decreased, and shall otherwise be payable as set forth in this Section 2.1.

II.

Section 2.4(d)(i)(A)(2) of the Agreement is amended to read as follows:

(2)           a cash amount equal to twenty-four (24) times the sum of:

(i)            one-twelfth (1/12) of Larson’s Base Salary at the greater of:

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(x)                                 the highest rate in effect at any time
during the twelve (12)-month period prior to the Date of Termination, or

(y)                               the highest rate in effect at any time during
the twelve (12)-month period prior to the Transition Date,

(ii)           one-twelfth (1/12) of the greater of:

(x)                                 Larson’s Average Bonus, or

(y)                               Larson’s Average Bonus calculated as if the
Transition Date were the Date of Termination, and

(iii)                             one twelfth (1/12) of an amount equal to the
greater of:

(x)                                 the amount the Company contributed on
Larson’s behalf for the prior fiscal year ending before the Date of Termination
under any qualified or unqualified (under Section 401(a) of the Internal Revenue
Code of 1986, as amended) defined contribution plans (“DC Plans”) maintained by
the Company as of the Date of Termination, or

(y)                               the amount the Company contributed on Larson’s
behalf for the 2005 fiscal year under any DC Plans maintained by the Company as
of the Transition Date,

that total amount being payable in equal monthly installments during each of the
twenty-four (24) months following the month in which the Date of Termination
occurs; and

III.

Section 2.4(d)(ii)(A)(2) of the Agreement is amended to read as follows:

(2)           a cash amount equal to thirty-six (36) times the sum of:

(i)            one-twelfth (1/12) of Larson’s Base Salary at the greater of:

(x)                                 the highest rate in effect at any time
during the twelve (12)-month period prior to the Date of Termination, or

(y)                               the highest rate in effect at any time during
the twelve (12)-month period prior to the Transition Date,

(ii)           one-twelfth (1/12) of the greater of:

(x)                                 Larson’s Average Bonus, or

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(y)                               Larson’s Average Bonus calculated as if the
Transition Date were the Date of Termination, and

(iii)                             one twelfth (1/12) of an amount equal to the
greater of:

(x)                                 the amount the Company contributed on
Larson’s behalf for the prior fiscal year ending before the Date of Termination
under any DC Plans maintained by the Company as of the Date of Termination, or

(y)                               the amount the Company contributed on Larson’s
behalf for the 2005 fiscal year under any DC Plans maintained by the Company as
of the Transition Date,

that total amount being payable in equal monthly installments during each of the
thirty-six (36) months following the month in which the Date of Termination
occurs; and

IV.

Section 3.3 of the Agreement is amended by adding a new sentence to the end
thereof to read as follows:

The parties hereto acknowledge and agree that the change in Larson’s duties and
responsibilities by the Company as of the Transition Date by removing Larson
from the offices of President and Chief Executive Officer and the reduction of
Larson’s compensation each separately constitute Good Reason as such term is
defined in this Section 3.3.  The Company and Board acknowledge and agree that
Larson’s agreement to continue employment with the Company after the Transition
Date under the Agreement as modified by the first amendment to the Agreement
shall not in any way be deemed to constitute (i) consent of Larson to such
change, removal or reduction or (ii) a waiver of Larson’s right to subsequently
terminate his employment with the Company for Good Reason at any time after the
Transition Date based on such change, removal or reduction, or based on any
other facts and circumstances that may occur or have occurred.

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V.

Except as provided herein, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment on and effective as
of September 24, 2006.

CAREER EDUCATION CORPORATION

 

 

 

 

 

 

 

By:

/s/ Robert E. Dowdell

 

 

 

 

Its:

Lead Director

 

 

 

 

 

 

 

 

 

 

CEC EMPLOYEE GROUP, LLC

 

 

 

 

 

 

 

By:

/s/ Robert E. Dowdell

 

 

 

 

Its:

Authorized Signatory

 

 

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

By:

/s/ John M. Larson

 

 

John M. Larson

 

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