Form of Non-Qualified Stock Option Agreement



 Exhibit 10.3 
 FORM OF 
 CAREER EDUCATION CORPORATION 
 2008 INCENTIVE COMPENSATION PLAN 
 NON-QUALIFIED STOCK OPTION AGREEMENT 

 This STOCK OPTION AGREEMENT (this “Agreement”), dated
[                    ], by and between Career Education Corporation, a Delaware corporation (the “Company”), and
[                    ] (the “Grantee”). 
 In accordance with Section 6 of the Career Education Corporation 2008 Incentive Compensation Plan (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 this Option to the Grantee on
[                    ] (the “Grant Date”) for the purchase from the Company of all or any part of an aggregate of
             Shares (subject to adjustment as provided in Section 4.2 of the Plan. 
 2. Option Price. The purchase price of this Option shall be equal to $         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, and, except as otherwise provided herein, vested Shares subject to this Option may be exercised either upon or following the
applicable vesting dates (set forth in the table below), as long as such exercise occurs prior to the expiration of this Option as provided in this Agreement and the Plan. The applicable vesting dates for the Shares subject to this Option are as
follows: 
  

				
	 Vesting Date
	  	Percentage of Option Shares
Vested	 
	 1st Anniversary of Grant
Date
	  	25	%
	 2nd Anniversary of Grant
Date
	  	50	%
	 3rd Anniversary of Grant
Date
	  	75	%
	 4th Anniversary of Grant
Date
	  	100	%








 Notwithstanding the foregoing provisions of this Paragraph 3, and except as otherwise determined by the
Committee, as provided in the Plan or as provided herein, any portion of this Option which is not vested (or otherwise not exercisable) at the time of the Grantee’s Termination of Service with the Company and its Subsidiaries shall not become
exercisable after such termination and shall be immediately cancelled and forfeited to the Company. 
 4. Exercisability. In the event
the Grantee incurs a Termination of Service for any reason, the Grantee will have such rights with respect to this Option as are provided for in the Plan. 
 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 Paragraphs 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 Paragraph 6 hereof, by his or her permitted successor) upon delivery of the following to the Company: 
 (a) a written notice of exercise 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 payable to the Company), 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 Paragraph 5 and the Plan, the Company shall deliver to the Grantee (or his or her 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 the Common Stock for which the Option has been
exercised, and the Grantee shall not be treated as a stockholder for any purposes whatsoever prior to such issuance. 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. 
  

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 6. Limitation Upon Transfer. This 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 this 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 this Option or of any rights granted hereunder
contrary to the provisions hereof, or upon the levy of any attachment or similar process upon this 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. This 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 this Option as are
provided for in the Plan. 
 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 this 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 this 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 this 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 cause to be issued or delivered any certificates for Shares pursuant to the exercise of this Option, unless and until the Company is advised by its counsel that the issuance and delivery of such certificates 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 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 this Option shall impose no obligation upon the Grantee to exercise this Option. 

 

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 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 this Option, the Grantee shall be required to pay such amount to the Company, or make arrangements
satisfactory to the Committee 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 or she is responsible for the tax consequences associated with the grant and exercise of this
Option. 
 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. 
 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 this 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 

  

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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 (the “Restrictive Covenants”) below 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
for twelve (12) months thereafter, 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) Accept employment with, own, manage, operate, consult or provide expert 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: DeVry Inc., Kaplan, Inc., Apollo Group Inc., Education Management LLC, Embanet Corporation, Capella Education Company, ITT Educational Services, Inc., Corinthian Colleges, Inc., and Strayer Education,
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. 
 (b) 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 received hereunder, subject to the terms and conditions of the applicable Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such Option. 
 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. 
  

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 19. Condition to Return Signed Agreement.
This Agreement shall be null and void unless the Grantee signs, dates, and returns this Agreement to the Company on or before the thirty-third (33r
d) day following the earliest of the date this Agreement is (a) placed in the mail addressed to the Grantee at his or her home address (as
contained in the Company’s records); (b) delivered to the Grantee at his or her e-mail address as contained in the Company’s internal e-mail directory; or (c) hand delivered to the Grantee, as applicable. 
 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. 
 IN WITNESS WHEREOF, this Agreement has been
duly executed as of the day and year first written above. 
  

			
	Career Education Corporation
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

	
	Grantee
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  



  

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