Exhibit 10.2

August 4, 2014

Mr. John E. Dean
ITT Educational Services, Inc.
13000 North Meridian Street
Carmel, IN 46032-1404

Dear John:

This letter agreement (this “Agreement”) is intended to set forth the terms of
your compensation in connection with your role as Executive Chairman of the
Board of Directors (the “Board”) of ITT Educational Services, Inc. (collectively
with its subsidiaries, affiliates, successors and assigns, the “Company”),
commencing as of the date hereof.
 
Accordingly, you and the Company agree as follows:
 
1. Base Salary.  While you remain employed as Executive Chairman, you will be
entitled to an annual base salary of $575,000, which will be paid to you in
accordance with the Company’s regular payroll practices.
 
2. Restricted Stock Unit Award.  On the date hereof, you will receive a grant of
restricted stock units (“RSUs”) with respect to shares of Company common stock
with an aggregate grant date value of $1 million.  The number of RSUs granted to
you will be determined based on the per share closing price of the Company’s
common stock on the New York Stock Exchange on the date hereof.  The terms and
conditions of the RSUs will be set forth in an award agreement which will
provide that (a) the RSUs will vest in full on the first anniversary of the
grant date, provided that you continue to serve the Company as an employee
and/or director through such date, and (b) will vest in full immediately in the
event that your service with the Company terminates prior to such date as a
result of death or disability (the latter, as defined in the Company’s Amended
and Restated 2006 Equity Compensation Plan).
 
3. Other Compensation.  You will not be entitled to any other compensation in
connection with your role as Executive Chairman and, during the period that you
serve as Executive Chairman, you will no longer be entitled to any additional
annual retainer or annual equity-based awards as a result of your service on the
Board.  Notwithstanding the foregoing, you will be entitled to retain the 2014
annual retainer that you have already received, and you will continue to vest,
based on your service as Executive Chairman, in the equity-based awards
previously granted to you in connection with your service as a non-employee
director of the Company.
 
4. Business Expense Reimbursement.  You will be entitled to reimbursement of
business expenses incurred in connection with your role as Executive Chairman,
including expenses relating to retaining counsel, which you will have the
authority to retain to the extent reasonably necessary in the performance of
your duties.
 
 
 

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

 
5. Continuation of Board Service.  You and the Company acknowledge and agree
that following the Company’s elimination of the role of Executive Chairman, you
will remain on the Board as a non-employee director for the remainder of your
term as then in effect.
 
6. General Provisions. (a) Modification or Waiver; Entire Agreement.  No
provision of this Agreement may be modified or waived except in a document
signed by you and a person authorized by the Board.  Failure to insist upon
strict compliance with any term of this Agreement will not be considered a
waiver of any such term or any other term of this Agreement.  This Agreement
contains the entire agreement of you and the Company with respect to the subject
matter hereof, and except as otherwise set forth herein, supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
and warranties between you and the Company, whether written or oral, with
respect to the subject matter hereof.
 
(b) Governing Law; Dispute Resolution.  The validity, construction and
interpretation of this Agreement and the rights and duties of you and the
Company will be governed by the laws of the State of Delaware without reference
to the Delaware choice of law rules.  You and the Company hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of any state or federal
court located in the State of Delaware for the purposes of any dispute arising
out of this Agreement.  You and the Company hereby waive, to the fullest extent
permitted by applicable law, any right you or it may have to a trial by jury in
respect of any dispute arising directly or indirectly out of, under or in
connection with this Agreement.
 
(c) Notices.  All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
 
If to you:
 
To the most recent address on file with the Company
 
If to the Company:
 
ITT Educational Services, Inc.
13000 North Meridian Street
Carmel, IN 46032-1404
Attention:  Chairman of the Compensation Committee
 
with a copy to:
 
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, New York 10019
Facsimile No.: (212) 474-3700
Attention:  Jennifer S. Conway, Esq.

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.
 
(d) Miscellaneous.  (i) You may not assign any right or interest to, or in, any
payments payable under this Agreement until they have become due from the
Company; provided, however, that this prohibition does not preclude you from
designating in writing one or more beneficiaries to receive any amount that may
be payable after your death and does not preclude the legal representative of
your estate from assigning any right under this Agreement to the person or
persons entitled to it.
 
(ii) This Agreement will be binding upon and will inure to your benefit, the
benefit of your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, legatees and assigns and the Company
and its successors.
 
(iii) The headings in this Agreement are inserted for convenience of reference
only and will not be a part of or control or affect the meaning of any provision
of the Agreement.
 
(iv) It is intended that the provisions of this Agreement comply with Section
409A, and all provisions of this Agreement shall be construed and interpreted in
a manner consistent with the requirements for avoiding taxes or penalties under
Section 409A.  Neither you nor any of your creditors or beneficiaries shall have
the right to subject any deferred compensation (within the meaning of Section
409A) payable under this Agreement to any anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment.  Except as
permitted under Section 409A, any deferred compensation (within the meaning of
Section 409A) payable to you or for your benefit under this Agreement may not be
reduced by, or offset against, any amount owing by you to the Company.  If, at
the time of your separation from service (within the meaning of Section 409A),
(A) you are a "specified employee" (within the meaning of Section 409A and using
the identification methodology selected by the Company from time to time) and
(B) the Company shall make a good faith determination that an amount payable
under this agreement constitutes deferred compensation (within the meaning of
Section 409A) the payment of which is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A in order to avoid taxes or
penalties under Section 409A, then the Company shall not pay such amount on the
otherwise scheduled payment date, but shall instead accumulate such amount and
pay it, without interest, on the first business day after such six-month
period.  For purposes of Section 409A, each payment hereunder will be deemed to
be a separate payment as permitted under Treasury Regulation Section
1.409A-2(b)(2)(iii).  Except as specifically permitted by Section 409A, the
benefits and reimbursements provided to you under this Agreement during any
calendar year shall not affect the benefits and reimbursements to be provided to
you under the relevant section of this Agreement in any other calendar year, and
the right to such benefits and reimbursements cannot be liquidated or exchanged
for any other benefit.  Further, reimbursement payments shall be made to you as
soon as practicable following the date that the applicable expense is incurred,
but in no event later than the last day of the calendar year following the
calendar year in which the underlying expense is incurred.
 
 
 

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

 
(v) All payments made to you or on your behalf under this Agreement will be
reduced by any amount that the Company is required by law to withhold in advance
payment of your federal, state and local income, wage and employment tax
liability.
 
(e) Successors to Company.  This Agreement may and will be assigned or
transferred to, and will be binding upon and will inure to the benefit of, any
successor of the Company, and any successor will be substituted for the Company
under the terms of this Agreement.  As used in this Agreement, the term
“successor” means any person, firm, corporation or business entity which at any
time, whether by merger, purchase or otherwise, acquires all or essentially all
of the assets of the business of the Company.  Notwithstanding any assignment,
the Company will remain, with any successor, jointly and severally liable for
all its obligations under this Agreement.
 
(f) Execution in Counterparts.  This Agreement may be executed in counterparts
(including by facsimile or by PDF), and by the parties hereto in separate
counterparts, each of which shall be deemed to be an original, and all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed and delivered by each of
the parties hereto.
 
[Remainder of the page intentionally left blank]
 

 
 

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

 

If the foregoing accurately reflects our agreement, please sign and return to us
the enclosed duplicate copy of this letter.
 

 
/s/ Ryan L. Roney
NAME:  Ryan L. Roney
TITLE:  Executive Vice President, Chief Administrative and Legal Officer and
Secretary
 
Date:8-4-2014
 

 

 
Accepted and Agreed to:
 

 
/s/ John E. Dean
John E. Dean
 
Date:8/4/2014