Exhibit 10.5

2013 Employee Stock Option Agreement

Mr. Lesnik

CAREER EDUCATION CORPORATION

2008 INCENTIVE COMPENSATION PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”) dated March 4, 2013 (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
450,000 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 $2.72 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. The Option Term shall expire on the tenth
anniversary of the Grant Date. To the extent any portion of the Option is not
exercised by the expiration of the Option Term, such portion of the Option shall
be immediately cancelled and forfeited to the Company. Except as provided in
Section 4, the Option shall vest and become exercisable in twelve (12) equal
installments on the fourteenth (14th) day of each calendar month beginning on
April 14, 2013, and ending on March 14, 2014 (each a “Vesting Date”), such that
the Option shall become fully vested on March 14, 2014; 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.

Notwithstanding the foregoing provisions of this Section 3, and except as
otherwise determined by the Committee, as provided in the Plan or as provided
herein, any portion of the Option which is not vested (or otherwise not
exercisable) at the time of the Grantee’s Termination of Service (as defined in
Section 4 below) shall not become exercisable after such termination and shall
be immediately cancelled and forfeited to the Company.

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

4. Vesting and Exercisability Following Termination of Service.

(a) Except as provided in Section 7, in the event the Grantee incurs a
Termination of Service for any reason other than by the Company for Cause, or as
a result of his death or Disability, then the portion of the Option that was
vested immediately prior to such Termination of Service, plus an additional
portion of the Option equal to the Termination Vesting Portion which shall
become vested and exercisable as a result of such Termination of Service, shall
remain exercisable until the third anniversary of the date of such Termination
of Service, but not beyond the expiration of the Option Term. To the extent any
of the remaining portion of the Option is not exercised by the third anniversary
of such Termination of Service, such portion of the Option shall be immediately
cancelled and forfeited to the Company. For purposes of this Section 4(a), the
“Termination Vesting Portion” shall be a portion of the Option relating to a
number of Shares equal the result of the following formula (rounded to the
nearest whole Share): (A/12) x (B/C), where “A” equals the aggregate number of
Shares purchasable pursuant to the Option (as set forth in Section 1 above); “B”
equals the number of days elapsing after the Vesting Date which immediately
precedes the Termination of Service through and including the date of such
Termination of Service; and “C” equals the number of days following the Vesting
Date which immediately precedes the Termination of Service through and including
the Vesting Date which coincides with or immediately succeeds the Termination of
Service. For purposes of the preceding sentence, to the extent the relevant
termination occurs on or prior to April 14, 2013, the Grant Date shall be deemed
to be a Vesting Date.

(b) In the event the Grantee incurs a Termination of Service as a result of his
death or Disability, then the Option shall become fully vested and exercisable,
and shall remain exercisable until the third anniversary of the date of such
Termination of Service, but not beyond the expiration of the Option Term. To the
extent any portion of the Option is not exercised by the third anniversary of
such Termination of Service, such portion of the Option shall be immediately
cancelled and forfeited to the Company.

(c) Except as provided in Section 7, in the event the Grantee incurs a
Termination of Service by the Company for Cause, any portion of the Option that
remains outstanding as of the date of such Termination of Service shall be
immediately cancelled and forfeited to the Company.

(d) Solely for purposes of this Agreement, “Termination of Service” shall have
the meaning set forth in the Plan, except that no Termination of Service shall
be deemed to have occurred so long as, until March 14, 2014, either (i) the
Grantee retains the position of chief executive officer of the Company, or
(ii) the Grantee remains available to provide executive consulting agent
services to the Company at reasonable times and upon the reasonable notice from,
and request of, any successor chief executive officer of the Company (as
described in that certain letter agreement between the Grantee and the Company
dated as of February 26, 2013).

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):

 

-2-

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

(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 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. In addition,
in the event of a Termination of Service for any reason following the occurrence
of a Change in Control, the Option shall become fully vested and exercisable,
and shall remain exercisable until the third anniversary of the date of such
Termination of Service, but not beyond the expiration of the Option Term. To the
extent any portion of the Option is not exercised by the third anniversary of
such Termination of Service, such portion of the Option shall be immediately
cancelled and forfeited to the Company.

 

-3-

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

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 is responsible for the
tax consequences associated with the grant and exercise of the Option.

 

-4-

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

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

 

-5-

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

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., Apollo Group, Inc., Bridgepoint
Education, Inc., Capella Education Company, Corinthian Colleges, Inc., DeVry,
Inc., Education Management Corporation, EmbanetCompass, Grand Canyon Education
Inc., ITT Educational Services Inc., Kaplan, Inc., Laureate Education, Inc.,
Learning Tree International Inc., Lincoln Education Services Corporation,
National American University Holdings Inc., Strayer Education Inc., Universal
Technical Institute 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.
If the Grantee is involuntarily terminated from employment with the Company for
other than 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.

 

-6-

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

19. 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
March 15, 2013.

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]

 

-7-

--------------------------------------------------------------------------------

2013 Employee Stock Option Agreement

Mr. Lesnik

 

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:                          
                                                             

Please sign and return your signed copy of this Stock Option Agreement by
March 15, 2013, 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.

 

-8-