Exhibit 10.5

Employee Stock Option Agreement

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”) dated [INSERT DATE HERE] (the
“Grant Date”) is by and between Career Education Corporation, a Delaware
corporation (the “Company”), and Todd Nelson (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
[INSERT NUMBER OF SHARES] 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 $[INSERT OPTION PRICE] 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 and Vesting of the Option; Termination of Service.

(a) The Option Term shall expire on the tenth anniversary of the Grant Date. The
Option shall vest and become exercisable in four equal installments on each of
September 14, 2016, 2017, 2018 and 2019 (each a “Vesting Date”); provided,
however, that the Option shall only vest and become exercisable with respect to
a whole number of Shares on each Vesting Date and the Company shall accordingly
allocate such vesting across the Vesting Dates as evenly as possible. Except as
otherwise provided herein, the Option may be exercised on or following the
applicable Vesting Dates with respect to the vested portion, as long as such
exercise occurs prior to the expiration of the Option as provided in this
Agreement and the Plan.

(b) If the Grantee incurs a Termination of Service either (i) by the Company
without Cause, or (ii) by the Grantee for Good Reason (as defined in the that
certain Letter Agreement between the Grantee and the Company dated as of
July 30, 2015), then any portion of the Option that had not become vested prior
to the date of the Termination of Service shall become vested as of the date of
such Termination of Service, and shall remain outstanding and exercisable until
the earlier of (A) the third anniversary of the applicable Termination of
Service, and (B) the tenth anniversary of the Grant Date.

(c) If the Grantee incurs a Termination of Service because of his death or
Disability, then any portion of the Option that had not become vested prior to
the date of the Termination of Service shall become vested as of the date of
such Termination of Service, and shall remain outstanding and exercisable until
the earlier of (i) the first anniversary of the applicable Termination of
Service, and (ii) the tenth anniversary of the Grant Date.

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Employee Stock Option Agreement

 

(d) If the Grantee incurs a Termination of Service because of his Retirement,
then the portion of the Option that was vested as of the date of such
Termination of Service shall shall remain outstanding and exercisable until the
earlier of (i) the third anniversary of the applicable Termination of Service,
and (ii) the tenth anniversary of the Grant Date.

(e) Except as otherwise provided in this Section 3, any portion of the Option
which is not vested (or otherwise not exercisable) at the time of the Grantee’s
Termination of Service shall not become exercisable after such termination and
shall be immediately cancelled and forfeited to the Company.

4. Exercisability. In the event the Grantee incurs a Termination of Service for
any reason, the Grantee will have such rights with respect to the Option as are
provided for in the Plan.

5. Exercise of Option. On or after the date any portion of the Option becomes
exercisable, but prior to the expiration of the Option in accordance with
Sections 3 and 4 above, the portion of the Option that has become exercisable
may be exercised in whole or in part by the Grantee (or, pursuant to Section 6,
by his 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.

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 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

 

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Employee Stock Option Agreement

 

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

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.

 

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Employee Stock Option Agreement

 

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 without regard to the effect that such treatment might have upon him
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 is responsible for the
tax consequences associated with the grant and exercise of the Option.

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

 

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Employee Stock Option Agreement

 

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 24 months following Grantee’s Termination of Service, 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. 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: 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. The Grantee further acknowledges 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 Restrictive Covenant.

(b) For 24 months following Grantee’s Termination of Service, 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.

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

 

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Employee Stock Option Agreement

 

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

20. Condition to Return Signed Agreement. This Agreement shall be null and void
unless the Grantee indicates his acceptance of the Option and this Agreement by
signing, dating, and returning this Agreement to the Company on or before
[INSERT DATE HERE].

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

[Signature Page Follows]

 

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Employee Stock Option Agreement

 

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

 

CAREER EDUCATION CORPORATION 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 the Option as set forth in this Agreement and agrees
to be bound by the terms and conditions of this Agreement and the Plan.       
REJECTS the award of the Option contemplated by this Agreement and forfeits all
rights relating thereto. Please note that a rejection of this award has no
impact on any other award of options, restricted stock or restricted stock units
you have previously received, including any restrictive covenants you are
subject to pursuant to the agreement(s) governing your previous awards.

 

Date:  

 

   

 

      (Signature of Grantee)       Print Name:   Todd Nelson

Please sign and return a fully executed .pdf of this Stock Option Agreement by
[INSERT DATE HERE], to                     . Failure to do so will result in
forfeiture of the award. Please retain a copy of this signed Stock Option
Agreement for your records.

 

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