Exhibit 10.48


 


Description of ITT Educational Services, Inc.’s
Compensation of Directors, 2005 Executive Bonus

Parameters, Payment of 2004 Bonus Compensation and 2005 Executive Salaries and
Perquisites


 


Compensation of Directors


 


On January 25,
2005, the Company’s Board of Directors approved the following compensation for
non-employee directors, effective April 1, 2005:


 


•                  an annual retainer of $40,000;


•                  a meeting fee of $1,500 for each
meeting of the Board of Directors attended;


•                  a meeting fee of $2,000 for each
meeting of a standing committee of the Board of Directors attended by the
chairperson of the committee; and


•                  a meeting fee of $1,500 for each
meeting of a standing committee of the Board of Directors attended by a member
of the committee, other than the chairperson.


 


The Company’s Board of
Directors also reaffirmed the following additional compensation for
non-employee directors who are members of the Special Committee of the Board of
Directors:


 


•                  an annual retainer of $15,000 for the
chairperson of the Special Committee;


•                  an annual retainer of $10,000 for a
member of the Special Committee, other than the chairperson; and


•                  a meeting fee of $500 for each
meeting of the Special Committee of the Board of Directors attended by a member
of the committee.


 


The Company also
reimburses non-employee directors for reasonable out-of-pocket travel expenses
incurred in connection with serving on the Company’s Board of Directors.


 


2005 Executive Bonus Parameters


 


On January 25, 2005, the Compensation Committee
of the Company’s Board of Directors approved the 2005 Executive Bonus
Parameters (the “Bonus Parameters”) for participation by the Company’s Chief
Executive Officer, and the Company’s Board of Directors approved the same Bonus
Parameters for participation by the other executive officers of the Company, as
well as other vice presidents and key employees.  Bonuses payable to individual participants
are based upon a formula that takes into account the Company’s ability to
achieve specified targets in 2005 in each of four performance categories, each
weighted equally:


 


•                  earnings per share (excluding workers’
compensation expense and special legal and other investigation costs and any
settlements or fines paid in the U.S. Department of Justice (“DOJ”) or Office
of Attorney General for the State of California investigations, the Securities
and Exchange commission inquiry and the securities class action and shareholder
derivative lawsuits arising from the DOJ investigation);


•                  new student enrollment;


•                  total student enrollment; and


•                  graduate employment rate.


 


The
Bonus Parameters establish for each participant a standard bonus target
percentage of 2005 annual base salary, ranging from 10% to 100%, and a maximum
bonus percentage ranging from 20% to 200%, with the percentage depending on the
participant’s position within the Company. 
An individual participant’s bonus may be more or less than the
participant’s potential award as calculated under the formula, depending upon
the individual participant’s personal performance and contribution toward
achieving the specified targets in the four performance categories.  The


 


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total amount available
for the payment of bonuses is capped at an amount equal to the cumulative sum of
the products of each participant’s bonus percentage multiplied by each
participant’s 2005 annual base salary.


 


Bonuses
will be paid in cash.  Bonuses payable
under the Bonus Parameters are determined by the Compensation Committee, upon
the recommendation of the Chief Executive Officer, except for the Chief
Executive Officer’s bonus, which is determined by the Compensation Committee
without a recommendation from the Chief Executive Officer.


 


Payment of 2004 Bonus Compensation


 


On January 25,
2005, the Compensation Committee approved the payment of cash bonus awards for
2004 in the following amounts to the Company’s named executive officers:


 


	
  Name and Principal Position

  	
   

  	
  Bonus

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rene R. Champagne

  	
   

  	
  $

  	
  775,000

  	
   

  
	
  Chairman and Chief Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kevin M. Modany

  	
   

  	
  $

  	
  198,000

  	
   

  
	
  Senior Vice President and Chief Financial Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Clark D. Elwood

  	
   

  	
  $

  	
  178,000

  	
   

  
	
  Senior Vice President, General Counsel and Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Martin A. Grossman

  	
   

  	
  $

  	
  153,059

  	
   

  
	
  Senior Vice President, Director of Marketing and
  Investor Relations

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Eugene W. Feichtner

  	
   

  	
  $

  	
  146,852

  	
   

  
	
  Senior Vice President, Operations

  	
   

  	
   

  	
   

  



 


2005 Executive Salaries and Perquisites


 


On January 25, 2005, the Compensation Committee
also approved an increase, effective April 1, 2005, in the annual base
salary level of the Company’s Chief Executive Officer, and the Board of
Directors approved an increase, effective April 1, 2005, in the annual
base salary level of the Company’s other named executive officers, to the
following amounts:


 


	
  Name and Principal Position

  	
   

  	
  Salary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Rene R. Champagne

  	
   

  	
  $

  	
  530,000

  	
   

  
	
  Chairman and Chief Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kevin M. Modany

  	
   

  	
  $

  	
  256,000

  	
   

  
	
  Senior Vice President and Chief Financial Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Clark D. Elwood

  	
   

  	
  $

  	
  230,000

  	
   

  
	
  Senior Vice President, General Counsel and Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Martin A. Grossman

  	
   

  	
  $

  	
  196,000

  	
   

  
	
  Senior Vice President, Director of Marketing and
  Investor Relations

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Eugene W. Feichtner

  	
   

  	
  $

  	
  190,000

  	
   

  
	
  Senior Vice President, Operations

  	
   

  	
   

  	
   

  



 


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On January 25, 2005, the Compensation Committee
also approved the following executive perquisites for 2005 for the Company’s
Chief Executive Officer, and the Board of Directors approved the following
executive perquisites for 2005 for the Company’s other named executive
officers:


 


•                  for the Chief Executive Officer, the
use of a leased car;


 


•                  for the Chief Executive Officer and
each Senior Vice President:


 


•                  an allowance to be used for tax
return preparation and financial planning; and


 


•                  tickets to sporting, theater and
other events.


 


The aggregate incremental cost to the Company from all
of the perquisites described above is not expected to exceed $45,000.


 


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