Exhibit
10.1





EXECUTIVE BONUS PLAN


MASTER PLAN DOCUMENT


2007


Plan Purpose


Career
Education Corporation (“CEC”) has introduced the Executive Bonus Plan, as
specified in this Master Plan Document (the “Plan”), to:  (1) develop a high quality organization by
attracting, retaining and rewarding “Participants” (as defined below), and  (2) reward those employees who exceed CEC’s
performance goals.


Effective
Date


This Plan is effective
for all bonuses calculated for payment or otherwise earned hereunder during the
Plan term, which begins on January 1, 2007 and ends on December 31, 2007.  This Plan will remain in effect for the
entire term as the governing plan until explicitly amended, replaced by another
plan, or terminated.   


Eligibility



All designated CEC
executives who are full-time and active are eligible to participate in the Plan
(each a “Participant”).  


All Participants must be
employed by CEC at the end of the calendar year (December 31) in order to
receive an award.  Annual awards are
based on actual earnings and may be prorated based on the period of time
a Participant is in an eligible position/role. 


Bonus pools for
Participants who are Group level employees (“Group Senior Management”) will be
based on Group EBITA as well as CEC EBIT as described in Bonus Pool
Funding.  The Bonus pool for other CEC
Corporate Participants (“Corporate Executives”) will be based on CEC EBIT
performance only.


Payout
Elements


1.               EBIT - defined as
earnings before interest income and expense, federal and state income taxes and
gains or losses on the sale of securities and fixed or capital assets involving
the sale of a business unit and before other extraordinary gains and
losses.  











2.               EBITA - defined as
earnings before interest income and expense, federal and state income taxes,
amortization expense, and gains or losses on the sale of securities and fixed
or capital assets involving the sale of a business unit and before other
extraordinary gains and losses.  For
eligible Participants of this Plan, EBITA is calculated and paid annually based
on the Group’s actual financial performance relative to EBITA target (both in
actual dollars and as a percentage of revenue).


3.               Individual
performance relative to performance goals as established at time of hire or at
the beginning of the Plan year and adjusted as necessary during the Plan year.


Bonus
Pool Funding


The target bonus
pool is based on the following factors:


1.               The sum of all
Participants’ target bonus percentages times (x) eligible salaries.


2.               CEC’s performance
relative to targeted EBIT.


3.               Number of
Participants in the bonus pool.


Bonus
Pool Funding – Group Senior Management


The target bonus
pool is based on the following factors:


1.               The sum of all
Participants’ target bonus percentages times (x) eligible salaries.


2.               Twenty-five percent
(25%) of the bonus pool will be funded based on individual performance.


3.               Of the remaining
seventy-five percent (75%), 


a.               Forty percent  (40%) of the bonus pool will be funded based
on CEC’s performance relative to targeted EBIT.


b.              Sixty percent (60%)
of the bonus pool will be funded based on the Group’s colleges’ and schools’
performance relative to targeted EBITA (both in actual dollars and as a
percentage of revenue).


Bonus
Pool Funding – Corporate Executives


Individual Performance


Twenty-five percent (25%)
of the pool created will be funded based on Career Education Corporation (CEC)
achieving at least 80% of its targeted EBIT. 
If CEC does not meet 80% or greater of its EBIT target, the pool will
not be funded and individual bonuses will not be paid.   


Corporate Profitability
Portion


Seventy-five percent
(75%) of the pool created will be funded based on Career Education Corporation
(CEC) achieving its targeted EBIT or EBIT and EBITA for CEC Group and
Divisional Senior Management.  Career
Education Corporation (CEC) must meet a threshold of 90% of its EBIT target in
order to fund this portion of the bonus pool as follows:


	
  EBIT Target

  Achievement

  	
   

  	
  % Pool

  Funding

  	
   

  
	
  <90%

  	
   

  	
  0

  	
  %

  
	
  90%-94.9%

  	
   

  	
  50

  	
  %

  
	
  95%-99.9%

  	
   

  	
  75

  	
  %

  
	
  100%

  	
   

  	
  100

  	
  %

  



 











The bonus Plan is
self-funded so that any and all accruals to fund the bonus Plan will be
included in CEC’s financial results, EBIT or EBITA.


Award
Payout – Group Senior Management – 75%


For Group Senior
Management, up to 60% of a Participant’s bonus target will be awarded based on
the respective Group’s performance relative to the Group’s colleges and schools
achieving at least 90% of the Group’s targeted EBITA.  The remaining 40% of such Participant’s bonus
target will be awarded based on CEC achieving 90% of its targeted EBIT. 


If CEC does not achieve
at least 90% of its EBIT target, that portion of the Group bonus pool which is
based on Group EBITA will still be funded and awarded to Group Senior
Management based on the colleges and schools meeting or exceeding 90% of
targeted EBITA. The Corporate Bonus Plan is self-funded which means that any
and all accruals to fund the bonus plan will be included in the Group financial
results (EBITA) when calculating whether or not bonuses will be awarded. 


Award
Payout – Corporate Profitability Portion – 75%


Up to 75% of a
Participant’s bonus target will be awarded based on CEC achieving at least 90%
of its targeted EBIT as outlined in the table above. 


Award
Payout – Individual Performance Portion – 25%


Up to twenty-five percent
(25%) of a Participant’s bonus target will be awarded based on achievement of
individual performance goals established either at the time of hire or at the
beginning of the bonus plan year.  If the
Participant’s performance is rated “Meets Expectations” or better as documented
in his/her annual performance appraisal form, then the Participant would
receive 25% of his/her target bonus percentage so long as the Plan has been
fully funded as described above.  A bonus
payment may be lowered if either an individual has a performance rating of less
than “Meets Expectations” or he/she failed to meet his/her individual
performance objectives outlined during the bonus period.


Bonus awards are
calculated and paid as soon as practicable after the final audited numbers are
released following the close of the previous CEC fiscal year.  Unless a timely election is made pursuant to,
and subject to the terms and conditions of the Career Education Inc. Deferred
Compensation Plan, annual earned bonus awards will be paid by the 15th day of the third month of the year following
the close of the year for which the bonus is paid.


No Participant’s total
award under this Plan, including any Over-Achievement award, may exceed 200% of
that Participant’s target bonus percentage. 



Over-Achievement
Bonus


Funding


The Over-Achievement
Bonus Pool is funded by calculating 20% of the total company’s EBIT, after
extraordinary items, in excess of budget. 
This Pool is shared with members of the Corporate Bonus Plan.


Note:  Funding of an Over-Achievement Bonus Pool
cannot reduce the post Over-Achievement Net Income margin to less than the
targeted Net Income margin.  


Over-Achievement
Bonus Award


The Over-Achievement
Bonus award will be determined and paid after the final audited numbers are
released following the close of the previous CEC fiscal year.  If an Over-Achievement Bonus Pool is funded,
25% of the Pool will be allocated to the Chief Executive Officer for him or her
to distribute on a











discretionary basis.  The remaining 75% will be distributed to Plan
Participants based upon their earned bonus payouts for the same year.  Individual Over-Achievement awards are discretionary
based on individual performance and contribution to the success of the
operation.











General
Administrative Provisions


1.               This Plan
supersedes all prior bonus or incentive compensation plans applicable to
Participants.  The provisions of any
prior commission, bonus or incentive compensation plans not specifically
addressed in this Plan shall no longer operate nor be considered part of the
Plan. 


2.               Participants must
be actively employed at the end of the calendar year to receive any portion of
the bonus award based on earnings.  If a
Participant was not employed in the position for the full year, the annual
bonus award will be prorated accordingly, based on full months worked in the
position.  


Transfers:  If at any time during
the plan year a Participant transfers to any other CEC entity, he/she will
receive a prorated bonus amount (if earned) for the time he/she was employed at
each entity.  


3.               Participants
in this Plan may not participate in any other CEC commission or bonus plan
unless approved in writing by the President/CEO and the EVP/Chief Financial Officer.


4.               Bonus
awards that are not earned nor paid to Participants who have terminated from
CEC for any reason will be retained by CEC.


5.               Career Education
Corporation reserves the sole and exclusive right to interpret, reinterpret,
amend, modify, extend, adjust, change, revise or terminate the Plan, in whole
or in part, at any time.  This right
includes, but is not limited to, any and all decisions regarding salaries,
bonus eligibility, performance measurement targets, EBIT, EBITA or Goal/MBO
attainment, areas of responsibility or any other Bonus-related classifications
and determinations, or any other matter affecting the Participant’s
employment.  Career Education Corporation
likewise reserves the right to adjust performance measurement targets for any
or all Participants during the year if, in Career Education Corporation’s sole
discretion, significant changes occur with regard to the industry, Career
Education Corporation’s assessment of the industry, or Career Education
Corporation’s position within the industry. 
Career Education Corporation further reserves the right to adjust
performance measurement determinations, including decisions regarding the
attainment of such targets or levels by any Participant and the corresponding
right to adjust or offset bonuses paid or payable and the applicable dollar
amount based on such determinations.  All
such interpretations, reinterpretations, amendments, modifications, extensions,
adjustments, changes, revisions and/or terminations to the Plan shall be
binding on all Participants.  Notification of any such changes to the Plan
may be made in writing or by electronic mail to the affected Participants.  In all such matters of administration of the
Plan, the President/CEO, the EVP/Chief Financial Officer and the Sr. VP of
Human Resources (or their designees) shall have final responsibility and
authority.  All decisions of the
President/CEO, the EVP/Chief Financial Officer and the Sr. VP of Human
Resources  in interpreting this
Plan shall be final and binding.  


6.               If a Participant
disagrees with the calculation of Bonus payments or any other decision by
Career Education Corporation hereunder, the Participant may appeal the decision
by submitting an explanation, in writing or by email, to the Participant’s
assigned manager and the CEC Sr. VP of Human Resources.  All such appeals must be submitted within
90 days of the original Career Education Corporation decision forming the
basis of the appeal or the Bonus payment or non-payment.  Within a reasonable period of time, not to
exceed forty-five (45) days following the submission of the appeal, the manager
and the CEC Sr. VP of Human Resources will issue a decision regarding the
appeal.  


7.               Earned Bonuses are
paid to Participants who are still employed by Career Education Corporation as
of December 31 of the plan year.











8.               Taxes and all
applicable deductions will be withheld from all Bonus payments in accordance
with applicable laws.


9.               If any of the
provisions of this Plan shall be determined to be invalid or unenforceable,
such invalidity or unenforceability shall not render the entire Plan invalid or
unenforceable  In such event, the
provisions of the Plan so affected shall be modified and/or restricted only to
the extent necessary to bring them within legal requirements, and the remainder
of the Plan and the affected/modified provisions shall be construed and
enforced accordingly.


10.         The
terms and conditions of this Plan constitute the complete and exclusive
statement of the understanding between Career Education Corporation and each
Participant, which supersedes and excludes all prior or contemporaneous
proposals, understandings, agreements or representations, oral or written,
between Career Education Corporation and each Participant with respect to the
subject matter hereof.  


11.         For all Participants
employed by Career Education Corporation, the terms and conditions of this Plan
shall be governed by Illinois law, excluding its choice of law principles and
the choice of law principles of any other jurisdiction. Any dispute, claim or
controversy arising out of or relating to this Plan or the breach, termination,
enforcement, interpretation or validity thereof, including the determination of
the scope or applicability of this Plan to arbitrate, shall be settled by
arbitration in Chicago, Illinois, in accordance with the rules of the American
Arbitration Association, and judgment on the award rendered in such arbitration
may be entered in any court having jurisdiction. The arbitration shall be
conducted before a single arbitrator selected by Career Education Corporation
and the Participant.  If Career Education
Corporation and the Participant cannot agree on the appointment of an
arbitrator, one shall be appointed by Career Education Corporation and one by
the Participant, and a third appointed by the other two arbitrators. The
arbitrator(s) shall have the power to determine any and all such claims, to
issue any and all appropriate relief, including but not limited to injunctive
relief (temporary and/or permanent) and to award attorney’s fees and costs to
the prevailing party in its discretion. 




12.         Career Education
Corporation may, at its sole discretion, suspend, defer or cancel bonus
payments if it determines conditions exist which in whole, or for selected
participant groups, would violate any governmental regulation or any ethical
considerations, including but not limited to policies and procedures required
by the federal Sarbanes-Oxley Act.  




13.         Nothing in this Plan is
intended to create an employment agreement with any Participant.  By participating in this Plan, the
Participant agrees that his or her employment remains “at-will” and that the
Participant or Career Education Corporation may terminate the employment
relationship at any time for any reason, with or without notice.