Exhibit 10.3

2015 Cash-Settled RSU Agreement (Non-Plan)

(Performance-Based)

Ronald McCray

CAREER EDUCATION CORPORATION

CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT

This CASH-SETTLED RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated
March 6, 2015 (the “Grant Date”) is by and between Career Education Corporation,
a Delaware corporation (the “Company”), and Ronald McCray (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
11,324 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. Vesting.

(a) Eligibility for Vesting. The number of RSUs eligible to become Vested RSUs
pursuant to Section 3(b) will be determined based on the date Grantee ceases to
be employed by the Company in the capacity of Interim President and Chief
Executive Officer (the “Separation Date”), as follows:

 

If the Separation Date is on or after

   # of RSUs eligible to become Vested
RSUs (the “Eligible RSUs”)  

March 6, 2015

     2,831   

April 1, 2015

     5,662   

July 1, 2015

     8,493   

October 1, 2015

     11,324   

Any RSUs which have not become Eligible RSUs pursuant to this Section 3(a) on or
prior to the Separation Date shall be immediately forfeited to the Company on
the Separation Date.

(b) Vesting Date. Subject to the provisions of Sections 5 and 6 of this
Agreement, the Eligible RSUs shall cease to be restricted and shall become
non-forfeitable (thereafter being referred to as “Vested RSUs”) on March 14,
2016 (the “Vesting Date”), but only to the extent and in the proportion
determined pursuant to the Performance Criteria and Payout Scale set forth on
Exhibit A.

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Notwithstanding the foregoing, and subject to Sections 5 and 6 below, in the
event that (i) the Grantee incurs a Termination of Service prior to the Vesting
Date, or (b) any Eligible RSUs do not become Vested RSUs on the Vesting Date due
to the application of the Performance Criteria and Payout Scale set forth on
Exhibit A, then in either case the RSUs shall be immediately forfeited to the
Company. For the avoidance of doubt, the Company and the Grantee acknowledge
that, pursuant to the Plan, a Termination of Service does not occur until the
Grantee ceases providing services to the Company in any capacity, including as a
director or consultant.

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 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 or her
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 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 the Vesting Date (or the relevant vesting date set forth in
Section 5(a) hereof), subject to achievement of the Performance Criteria, but in
no event shall such Settlement Date be later than March 15 of the calendar year
following the calendar year in which the 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 the Vesting Date set forth in Section 3:

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

(b) If the Grantee incurs a Termination of Service for any reason other than his
or her death or Disability, then any RSUs that had not become Vested RSUs prior
to the date of the Termination of Service shall be immediately forfeited to the
Company.

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.

 

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7. Adjustment in RSUs. The Committee may make or provide for such adjustments as
provided for in 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.

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.

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

 

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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.

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

 

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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. Confidentiality. During the Grantee’s employment with the Company and/or any
of its subsidiaries and at all times following the Grantee’s termination of
employment with the Company for any reason, the Grantee will not, in any way,
directly or indirectly, either for the Grantee or any other person or entity,
whether paid or unpaid, 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. Should the Grantee breach the terms of this Section 26, 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 this Section 26, the Grantee
will forfeit any right to the RSUs or any amounts 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 such RSUs or amounts
issued pursuant hereto.

27. 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.

28. 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.

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

[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 [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 a fully executed .pdf of this Restricted Stock Unit
Agreement by                     to                     via
                    . Failure to do so will result in forfeiture of the award.
Please retain a copy of this signed Restricted Stock Unit Agreement for your
records.

 

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Exhibit A

Performance Criteria and Payout Scale

 

Actual 2015 EBITDA as a percentage of Targeted EBITDA(1)

   Percent of Eligible RSUs to become
Vested RSUs pursuant to Section 3(b)  

115%

     100 % 

100%

     60 % 

85%

     20 % 

<85%

     0 % 

Straight line interpolation between points.

 

(1) “Actual 2015 EBITDA” shall be the EBITDA at the corporate organizational
level determined in accordance with, and used for purposes of determining the
EBITDA Performance Factor under, the 2015 Annual Incentive Award Program
pursuant to the Plan (the “AIP”). “Targeted EBITDA” shall have the meaning set
forth in the AIP with respect to the Company (and its affiliates).

 

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