Exhibit
10.1
 

 

Agreement and General Release

This Agreement and General Release (“Agreement”) sets forth the agreement
between Career Education Corporation (“CEC” or “the Company”) and you, Stephen
C. Fireng (“You”).

1.           Employment Separation.  Your employment with CEC terminates
effective February 11, 2008 (the “Separation Date”).  On that date, You must
resign from all of Your positions, including but not limited to CEC Group
President and member of the American InterContinental University and the
Colorado Technical University Governing Boards.  You understand and agree that
from and after the Separation Date, except as described in provision 9, You are
no longer authorized to incur any expenses, obligations or liabilities on behalf
of CEC.  On its part, CEC agrees to reimburse You, in accordance with CEC’s
regular expense reimbursement processes, for any expenses incurred through the
Separation Date, provided that such expenses are consistent with CEC’s expense
policy and practice.
 
2.           Benefits Following the Separation Date. You hereby acknowledge
that, after the Separation Date, You will no longer be entitled to participate
in any employee benefit plan sponsored or maintained by the Company, except for
(a) continuation coverage that may be elected under group health plans
maintained by the Company, which coverage is intended to satisfy the
requirements of Sections 601 through 608 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and (b) any benefit provided under
the provisions of a pension plan (as defined in Section 3(2) of ERISA) which is
accrued and vested as of the Separation Date, any such benefit to be paid in
accordance with the written terms of such pension plan. In the event that
You elect to continue the benefit coverage described in clause (a) of the
preceding sentence, the following benefit coverage will be continued at CEC’s
cost for the thirty-two (32) week period following the Separation Date, upon the
same terms and conditions as such coverage (if any) is provided to other
actively employed key executives of the Company generally during such thirty-two
(32) week period: (i) medical plan including vision (normal); (ii) medical plan
(Execu-Care) and (iii) dental; provided, that You do not become eligible to
receive similar benefits from a subsequent employer.   
 
3.           Payments by CEC.  In exchange for the promises and agreements made
by You contained in this Agreement, and in lieu of the payments described in
CEC’s Severance Plan for Executive Level Employees CEC will pay You an amount
equal to thirty-two (32) weeks of pay (subject to taxes and withholdings),
calculated based on Your gross base wages as of Your Separation Date.  The gross
amount of separation pay payable to You as calculated in accordance with this
paragraph is $246,153.85 and will be paid to You by check, mailed to Your
last-known address according to CEC’s payroll records, within two weeks
following the receipt by the Company of the fully executed Agreement at the
address and within the fourteen (14) day time frame described in Paragraph 11 of
this Agreement.  In addition the Company will pay to you on or before March 15,
2009, a lump sum payment of Your pro-rated bonus earned (Your 2008 target bonus
being 40% of base salary) during you period of employment in calendar year 2008,
calculated in accordance with the method for determining bonuses for other
similarly situated employees (it being understood that the amount may be zero)
and paid in accordance with the normal procedures of the Company.  The parties
agree that the monies and benefits set forth in this provision 3 constitute
additional consideration, above and beyond anything to which You are already
entitled, in exchange for You executing this Agreement.

4.           Waiver and Release of All Claims.  In exchange for the
consideration described in Paragraphs 2(a) and 3, You, on behalf of Yourself,
Your agents, executors, attorneys, administrators, heirs and assigns, are
waiving and releasing all known or unknown claims or causes of action against
CEC, its divisions, subsidiaries, affiliates and predecessors, and each of their
assigns, successors, officers, directors, employees, shareholders and agents
(collectively, “the Releases”), which claims have or could have arisen out of
Your employment with and/or termination of employment from CEC and/or any other
occurrence whatsoever arising on or before the date this Agreement is executed,
including but not limited to:

(a)  
claims arising under Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, the Equal Pay Act, the Americans with Disabilities Act
of 1990, the Family and Medical Leave Act of 1993, the Age Discrimination in
Employment Act of 1967, as amended, Section 1981 of the Civil Rights Act of
1866, the Pregnancy Discrimination Act, the Employee Retirement Income Security
Act, as amended, the National Labor Relations Act, and/or any other federal,
state, county, or local employment discrimination or civil rights laws or
regulations (including but not limited to claims based on race, color, creed,
sex, national origin, religion, age, ancestry, veteran status, pregnancy,
disability, marital status, sexual orientation, gender identity, familial
status, whistleblower status, retaliation and/or attainment of benefit plan
rights); and/or

(b)  
claims arising out of any other federal, state, or local statute, law,
constitution, ordinance or regulation; and/or

(c)  
claims that CEC has violated its personnel policies, procedures, handbooks, any
covenant of good faith and fair dealing, or any express or implied contract of
any kind; and/or

(d)  
claims of a violation of public policy, statutory or common law, including but
not limited to claims for: personal injury; invasion of privacy; retaliatory
discharge; negligent hiring, retention or supervision; defamation; intentional
or negligent infliction of emotional distress and/or mental anguish; intentional
interference with contract; negligence; detrimental reliance; loss of consortium
to you or any member of your family; and/or promissory estoppel; and/or

(e)  
claims that CEC is in any way obligated for any reason to pay You damages,
expenses, litigation costs (including attorneys’ fees), back pay, front pay,
disability or other benefits (other than accrued 401(k) or vacation benefits),
compensatory damages, punitive damages, and/or interest, and/or

(f)  
claims to employment, reinstatement, or seniority with CEC.

 
You represent that you have not commenced or joined in any claim, charge, action
or proceeding whatsoever against CEC or any of the other Releases, arising out
of or relating to any of the matters set forth in this Agreement. You further
agree that You will not be entitled to any personal recovery in, and shall not
commence or join, any action or proceeding whatsoever against CEC or any of the
Releases for any of the matters set forth in this Agreement. You acknowledge
that other than as set forth in provisions 2(a) and 3 above, the Company’s
obligations under the Agreement are in lieu of and in full satisfaction of any
and all amounts that might otherwise be payable to You or for Your benefit under
any contract, agreement, plan, policy, program, practice or otherwise, past or
present, of the Company.
 
 
You further acknowledge that, other than the Company’s obligations under this
Agreement, following the Separation Date, the Company shall have no further
obligations to You, and that You shall have no right to any other payments or
benefits from the Company with respect to Your employment with the Company or
the termination thereof.
 
5.           Exclusions from Waiver and Release of All Claims.  Excluded from
the above Waiver and Release of All Claims are any claims which by law cannot be
waived, including but not limited to the right to file a charge with or
participate in an investigation by the Equal Employment Opportunity Commission
(“EEOC).  You do, however, hereby waive any right to recover any money should
the EEOC or any other agency or individual pursue any claims on Your behalf.  In
addition, the above Waiver and Release of Claims will not be construed to affect
(i) Your eligibility to receive continuation coverage in the Company’s medical
plan(s) following the Separation Date pursuant to the Sections 601 through 608
of ERISA, provided that You timely elect such coverage, (ii) Your right to
benefits under the Company’s 401(k) plan to the extent that You are vested
therein as of the Separation Date, (iii) Your rights to indemnification under
the Company’s certificate of incorporation or bylaws of the Company or any
existing Indemnification Agreement between You and the Company, (iv) rights to
workers compensation, disability insurance benefits and life insurance benefits
(to the extent such benefits, by their terms, may be available after the
Separation Date), (v) rights to vested benefits under the Company’s deferred
compensation plan, and (vi) claims to enforce this Agreement.
 
6.           Non-Competition, Non-Solicitation and Confidential Information.
 
 
6.1           Non-Competition. Commencing on the Separation Date and for
thirty-two (32) weeks thereafter, You will not own or engage in, either directly
or indirectly, as an officer, manager, employee, independent contractor,
consultant, director, partner, sole proprietor, stockholder, or in any other
capacity, any business operating any post-secondary, private trade or vocational
schools, that offers classes, courses or instruction in or is otherwise engaged
in any curriculum or field of study offered by any of the schools operated by
the Company (the “Schools”) or any other curriculum or field of study that the
Company has expressed an interest in offering, during Your employment by the
Company, whether through the Schools or through a potential acquisition (the
“Competitive Activities”).  You hereby acknowledge that the Company intends to
promote the Schools on an international basis and that the geographical scope of
this Agreement is intended to encompass all Competitive Activities engaged in
anywhere in the United States, its possessions and territories and any other
country where the Company and its subsidiaries are promoting the Schools on the
Separation Date. Nothing herein shall prevent You from owning less than two
percent (2%) of the capital stock of a company whose stock is publicly traded
and that is engaged in Competitive Activities.
 
 
6.2           Non-Solicitation. Commending on the Separation Date and for
thirty-two (32) weeks thereafter, You will not, directly or indirectly,
individually or on behalf of any Person (as defined below) solicit, aid or
induce (a) any then-current employee of the Company or its Affiliates to leave
the Company or its Affiliates to accept employment with or render services for
You or such Person, or (b) any student, customer, client, vendor, lender,
supplier or sales representative of the Company or its Affiliates or similar
persons engaged in business with the Company or its Affiliates to discontinue
the relationship or reduce the amount of business done with the Company or its
Affiliates. “Person” means any individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, a governmental entity, or any
department, agency or political subdivision thereof, or an accrediting body.
“Affiliate” means: (i) with respect to any natural Person, any individual
related by blood or marriage to such Person; and (ii) with respect to any other
Person, any Person controlling, controlled by or under common control with such
Person.
 
 
6.3           Confidential Information. You acknowledge and agree that
throughout and as an incident to Your employment by the Company, You have been
in possession of and exposed to Confidential Information relating to the
Company, its Affiliates and each School. “Confidential Information” means all
proprietary or confidential information concerning the business, finances,
financial statements, curricula, properties and operations of the Company, its
Affiliates and each School, including, without limitation, all student and
prospective student and supplier lists, know-how, trade secrets, business and
marketing plans, techniques, forecasts, projections, budgets, unpublished
financial statements, price lists, costs, computer programs, source and object
codes, algorithms, data, and other original works of authorship, along with all
information received from third parties and held in confidence by the Company,
its Affiliates and each School (including, without limitation, personnel files
and student records). At all times after the Separation Date, You will hold the
Confidential Information in the strictest confidence and will not disclose or
make use of (directly or indirectly) the Confidential Information or any portion
thereof to or on behalf of Yourself or any third party except as required by the
order of any court or similar tribunal or any other governmental body or agency
of appropriate jurisdiction; provided, that You will, to the extent practicable,
give the Company prior written notice of any such disclosure and will cooperate
with the Company in obtaining a protective order or such similar protection as
the Company may deem appropriate to preserve the confidential nature of such
information. The foregoing obligations to maintain the Confidential Information
shall not apply to any Confidential Information that is, or without any action
by You becomes, generally available to the public.
 
 
6.4           Acknowledgements. You fully understand the nature and burdens of
this provision 6.  You acknowledge that the provisions of this provision 6 are
fair, reasonable, and not excessively broad, that they are necessary to protect
important and legitimate business interests of the Company, its Affiliates and
each School, and that in light of Your education, experience, and capabilities,
You can honor all parts of this provision 6 without being prevented from earning
a fully adequate livelihood for Yourself and Your dependents from now throughout
any period during which Your activities are restricted hereunder.
 
 
6.5  Scope of Restriction. The parties have attempted to limit the scope of the
covenants set forth in this provision 6 to the extent necessary to give the
Company the benefit of its bargain with respect to the other provisions of this
Agreement. The parties agree that if the scope and duration of any of the
covenants would, but for this provision, be deemed by a court of competent
authority to be unreasonable or otherwise unenforceable, such court may modify
such covenant(s) to the extent that the court determines to be necessary to
grant enforcement thereof as modified.
 
 
6.6   Remedies. The parties recognize that the Company will suffer irreparable
injury in the event of any breach or threatened or anticipated breach of the
terms of this provision 6 by You, and that the remedy at law for any such actual
breach or threatened or anticipated breach will be inadequate. Accordingly, in
the event of any breach or threatened or anticipated breach of the terms of this
provision 6 by You and/or any Persons acting for or in concert with You, the
Company will be entitled, in addition to any other remedies and damages
available and without proof of monetary or immediate damage, to seek and obtain
from any court of competent jurisdiction a decree of specific performance and a
temporary and permanent injunction, without bond or other security, enjoining
and restricting the breach or threatened or anticipated breach.
 
 
6.7           Common Law of Torts or Trade Secrets. The parties agree that
nothing in this Agreement will be construed to limit or negate the common law of
torts or trade secrets where it provides the Company with broader protection
than that provided herein.
 
7.           Non-Admission.  Both parties acknowledge that this Agreement does
not constitute an admission by either party of any liability, wrongdoing or
violation of law whatsoever.

8.           Company Property.  You represent, warrant and covenant that You
have returned to the Company (or will return to the Company on or before the
Separation Date) all Company property in Your possession or control, including,
without limitation, all telephones, keys, access cards, security badges, credit
cards, phone cards, equipment, computer hardware (including but not limited to
all computers, Blackberry devices, and personal data assistants), all contents
of all such hardware, all passwords and codes needed to obtain access to or
operate all or part of any such hardware, all electronic storage devices
(including but not limited to all hard drives, disk drives, diskettes, CDs,
CD-ROMs, DVDs, and DVD-ROMs), all contents of all such electronic storage
devices, all passwords and codes needed to obtain access to or use all or part
of any such electronic storage device, all computer software and programs,
financial information, accounting records, computer printouts, manuals, data,
materials, papers, books, files, documents, records, policies, student
information and lists, customer information and lists, marketing information,
specifications and plans, data base information and lists, mailing lists, and
notes, including but not limited to any property describing or containing any
Confidential Information, and You agree that You will not retain any cop­ies,
dupli­cates, reproductions or excerpts thereof in any form whatsoever.
 
9.           Indemnity and Cooperation.  In the event of a lawsuit or claim in
which You are sued either jointly or separately for acts arising out of the
scope of Your employment with CEC, CEC agrees to defend You and hold You
harmless in accordance with its policies and practices for defending employees
and subject to any limitations and exceptions therein.  In turn, with respect to
matters as to which You obtained knowledge during Your employment with the
Company, You agree to cooperate fully, at the Company’s reasonable request, with
the Company and any of its officers, directors, attorneys or employees (a) in
connection with the defense or prosecution of any and all charges, complaints,
claims, liabilities, obligations, promises, agreements, demands and causes of
action of any nature whatsoever, which are asserted by any person or entity
(including the Company) concerning or related to any matter that arises out of
or concerns events or occurrences during Your employment with the Company, and
(b) concerning requests for information about the business of the Company or
Your involvement and participation therein. You will provide such cooperation on
reasonable notice.  To the extent such cooperation (i) is rendered at the
written request of the Company and (ii) does not include testimony given
pursuant to a lawfully issued and valid subpoena or notice of deposition (as
opposed to preparation for testimony with employees of the Company or counsel to
the Company), You will be entitled to compensation at a rate of $150 per
hour.  You will also be entitled to reimbursement, upon receipt by the Company
of suitable documentation, for reasonable and necessary travel and other
expenses not reimbursed or reimbursable by a third party that You may incur at
the specific request of the Company and as approved in advance by the Company in
accordance with its policies and procedures.  Nothing in this provision 9 should
be construed as suggesting or implying that You should testify in any way other
than truthfully or provide anything other than accurate, truthful information.
 
 
 10.       Non-Disparagement.  You agree that You will not disparage or speak
negatively about CEC or any school affiliated with CEC, or any former or present
Company director, officer, shareholder, agent, employee, or student, to any
third parties, including but limited to the press, the media or the public
generally, or to any current, former or prospective employee or student of CEC,
except if testifying truthfully under oath pursuant to any lawful court order or
subpoena or otherwise responding to or providing disclosures required by
law.  Likewise, CEC agrees that its executive officers and directors shall not
disparage the You to third parties in any manner likely to be harmful to Your
personal or business reputation, except if testifying truthfully under oath
pursuant to any lawful court order or subpoena or otherwise responding to or
providing disclosures required by law.
 
11.           Deadline for Return of Signed Agreement.  The signed Agreement
must be returned via U.S. mail or facsimile within thirty (30) days of the
Separation Date to:

Harry L. Geller
Senior Vice President of Human Resources
Career Education Corporation
2895 Greenspoint Parkway
Hoffman Estates, Illinois 60169
(FAX) 847-585-2062
(TEL) 847-585-2022

12.           Entire Agreement.  This Agreement constitutes the entire agreement
between CEC and You concerning your separation, and it supersedes and replaces
all prior negotiations and all agreements proposed or otherwise, whether written
or oral, concerning the subject matters of the Agreement.  You represent and
agree that no promises, statements or inducements have been made to You that
caused You to sign this Agreement other than those which are expressly stated in
this Agreement.  This is an integrated document and may not be altered except by
a written agreement signed by both parties.
 
13.           Separability.  If any portion of this Agreement is found to be
unenforceable, the remainder of the Agreement will remain in full force and
effect. The provisions of this Agreement shall be deemed severable and the
invalidity, illegality or unenforceability of any provision shall not affect or
impair the validity, legality or enforceability of the other provisions hereof.
Moreover, if any one or more of the provisions of this Agreement shall be held
to be excessively broad as to duration, activity or subject, such provision
shall be construed by limiting and reducing them so as to be enforceable to the
maximum extent allowed by applicable law.
 
14.           Choice of Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and all
its attachments will be governed by and construed in accordance with the laws of
the State of Illinois, without giving effect to any choice of law or conflict of
law rules or provisions (whether of Illinois or any other jurisdiction) that
would cause the laws of any other jurisdiction other than the State of Illinois
to apply.
 

WHEREFORE, You agree that You have read and voluntarily entered into this
Agreement with full knowledge of its significance.
 

 
Career Education Corporation
 
/s/ Stephen C.
Fireng                                                                           By:
/s/ Gary E. McCullough
 
Stephen C.
Fireng                                                                                 Gary
E. McCullough
 
Date: March 11,
2008                                                                           President
& Chief Executive Officer
 
Date: March 13, 2008

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