Exhibit 10.4


    
      

    

    
      Exhibit
        10.4

       

       

      EMPLOYMENT
        AGREEMENT (this “Agreement”),
        dated
        as of February 1, 2007, between LINCOLN EDUCATIONAL SERVICES CORPORATION,
        a New
        Jersey corporation (the “Company”),
        and
        Scott M. Shaw (the “Executive”).

       

      WHEREAS,
        the Executive is currently employed by the Company;

       

      WHEREAS,
        the Executive and the Company entered into an Employment Agreement, dated
        January 3, 2005 (the “Original
        Agreement”),
        which
        set forth the terms and conditions of the Executive’s employment with the
        Company;

       

      WHEREAS,
        the Original Agreement was amended on March 1, 2005 and again on January
        24,
        2007 (the “Amendments”);

       

      WHEREAS,
        the parties desire that this Agreement supersede the Original Agreement and
        the
        Amendments;

       

      NOW,
        THEREFORE, in consideration of the covenants and agreements hereinafter set
        forth, the parties hereto agree as follows:

       

      
        	 	
                1.

              	
                EFFECTIVENESS
                  OF AGREEMENT

              


      

       

      This
        Agreement shall become effective, and shall supersede the Original Agreement
        and
        the Amendments as of the date hereof (the “Effective
        Date”).

       

      
        	 	
                2.

              	
                EMPLOYMENT
                  AND DUTIES

              


      

       

      2.1    Position
        and Duties.
        The
        Company hereby continues to employ the Executive, and the Executive agrees
        to
        serve, as Executive Vice President of the Company, upon the terms and conditions
        contained in this Agreement.  The Executive shall report to the Chairman of
        the Board of Directors of the Company (the “Board”)
        and
        the Chief Executive Officer of the Company and perform duties and services
        for
        the Company commensurate with the Executive’s position.  Except as may
        otherwise be approved in advance by the Board or the Compensation Committee
        of
        the Board (the “Committee”),
        the
        Executive shall render his services exclusively to the Company during his
        employment under this Agreement and shall devote substantially all of his
        working time and efforts to the business and affairs of the
        Company.

       

      2.2    Term
        of Employment.
        The
        Executive’s employment under this Agreement shall terminate on December 31,
        2008, unless terminated earlier pursuant to Section 5 or extended pursuant
        to
        Section 6.1 (the “Employment
        Period”).

       

      2.3    Location
        of Work.
        The
        Executive shall be based in the United States in West Orange, New Jersey.
        However, the Executive agrees to undertake whatever domestic and worldwide
        travel is required by the Company. The Executive shall not be required or
        permitted to relocate without the mutual, written consent of the Executive
        and
        the Company.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        	 	
                3.

              	
                COMPENSATION

              


      

       

      3.1    Base
        Salary.
        Subject
        to the provisions of Sections 5 and 6, the Executive shall be entitled to
        receive a base salary (the “Base
        Salary”)
        at a
        rate of $290,000 per annum during the Employment Period, such rate to be
        effective as of January 1, 2007. Such rate may be adjusted upwards, but not
        downwards, from time to time by the Board or the Committee, in their sole
        discretion. The Base Salary shall be paid in equal installments on a biweekly
        basis or in accordance with the Company’s current payroll practices, less all
        required deductions. The Base Salary shall be pro-rated for any period of
        service less than a full year.

       

      3.2    Annual
        Bonus.
        Subject
        to the provisions of Sections 5 and 6, the Executive shall be eligible to
        earn
        an annual bonus for 2007 and each full calendar year thereafter during the
        Employment Period (the “Annual
        Bonus”),
        the
        amount of which shall be based upon performance targets or such other criteria
        that are determined by the Board or the Committee pursuant to the provisions
        of
        the Company’s Key Management Team Incentive Compensation Plan ( the
“Incentive
        Plan”)
        in
        effect for the applicable calendar year. The Company shall pay the Annual
        Bonus
        to the Executive no later than three weeks following receipt by the Board
        or the
        Committee of the Company’s audited financial statements for the applicable
        fiscal year. The Annual Bonus shall be prorated for any year in which the
        Executive’s employment is terminated due to death or Disability (as defined in
        Appendix A). If
        during
        the Employment Period the Executive’s employment is terminated by the Company
        (or any successor thereto) for Cause (as defined in Exhibit A) or the Executive
        resigns from his employment other than for Good Reason (as defined in Exhibit
        A)
        prior to the payout of any Annual Bonus due for a completed calendar, the
        Executive shall not receive such Annual Bonus.

       

      3.3    Reimbursement
        of Expenses.
        The
        Company shall reimburse the Executive for reasonable travel and other business
        expenses incurred by him in the fulfillment of his duties hereunder upon
        presentation by the Executive of an itemized account of such expenditures,
        in
        accordance with Company practices.

       

      
        	 	
                4.

              	
                EMPLOYEE
                  BENEFITS

              


      

       

      4.1    General.
        The
        Executive shall, during the Employment Period, be included, to the extent
        eligible thereunder, in all employee benefit plans, programs and arrangements
        (including, without limitation, any plans, programs or arrangements providing
        for retirement benefits, profit sharing, disability benefits, health and
        life
        insurance or vacation and paid holidays) that shall be established by the
        Company for, or made available to, its senior executives. In addition, the
        Company shall furnish the Executive with coverage by the Company’s customary
        director and officer indemnification arrangements, subject to applicable
        law.

       

      4.2    Automobile.
        During
        the Employment Period, the Company shall provide the Executive with an
        automobile for business and personal use and pay for associated costs, including
        automobile insurance, parking and fuel, in accordance with the Company’s
        practices as consistently applied to other key employees.

       

      
        
          
          

        

        
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                5.

              	
                TERMINATION
                  OF EMPLOYMENT

              


      

       

      5.1    Effect
        of an Involuntary Termination.
        Subject
        to the provisions of Sections 6, 9.5 and 11.2, if during the Employment Period
        there is an “Involuntary Termination” (as defined below) of the Executive’s
        employment, the Company shall pay to the Executive: 

       

      (i)    an
        amount
        equal to one and one half times the sum of (x) the Executive’s annual Base
        Salary, at a rate in effect at the date of such termination plus (y) the
        average
        of the Annual Bonuses paid to the Executive for the two years immediately
        prior
        to the year in which the Involuntary Termination occurs;

       

      (ii)   all
        outstanding reasonable travel and other business expenses that he incurred
        as of
        the date of his termination; and

       

      (iii)   the
        employer portion of the premiums necessary to continue the Executive’s health
        care coverage until the earlier of (1) the first anniversary of the date
        of such
        Involuntary Termination and (2) the date on which the Executive is covered
        under
        another group health plan (which coverage, once obtained, must be promptly
        disclosed by the Executive to the Company).

       

      The
        Executive shall also be entitled to (i) the continued use of an automobile
        and
        payment of associated costs by the Company pursuant to Section 4.2 until
        the
        later of (x) the first anniversary of the date of such Involuntary Termination
        and (y) the second anniversary of the Effective Date and (ii) receive any
        other
        accrued compensation and benefits otherwise payable to him as of the date
        of his
        termination, including, without limitation, any Annual Bonus due for a completed
        calendar year. All payments made under Sections 5.1(a)(i) and (ii) above
        shall
        be made by the Company (or its successor) in a lump-sum amount no later than
        thirty days after the date of the Executive’s termination of employment;
provided,
        however,
        that
        the payment of such lump sum shall be deferred for six months and one day
        following such termination (i) if necessary to comply with Section 409A of
        the
        Internal Revenue Code of 1986, as amended (the “Code”) or (ii) in the event such
        payment, as determined in the sole discretion of the Company (or its successor),
        could cause the Executive to be subject to interest and penalties under Section
        409A of the Code.

       

      For
        purposes of this Agreement, “Involuntary
        Termination”
means
        the termination of the Executive’s employment (i) by the Company (or any
        successor thereto) without Cause, as defined in Appendix A, or (ii) by the
        Executive for Good Reason, as defined in Appendix A.

       

      5.2    Effect
        of a Termination for Cause or Resignation without Good Reason.
        Subject
        to the provisions of Sections 3.2 and 6, if during the Employment Period,
        the
        Executive’s employment is terminated by the Company (or any successor thereto)
        for Cause or the Executive resigns from his employment other than for Good
        Reason, the Company shall pay to the Executive, any (i) accrued but unpaid
        Base
        Salary earned through the date of his termination, (ii) unreimbursed
        expenses, plus (iii) accrued but unpaid employee benefits set forth in Section
        4.1 above as determined in accordance with the provisions of the applicable
        employee benefit plans or programs of the Company. 

       

      
        
          
          

        

        
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      5.3    Effect
        of a Termination due to Death or Disability.
        Subject
        to the provisions of Sections 3.2 and 6, if during the Employment Period,
        the
        Executive’s employment is terminated by the Company (or any successor thereto)
        due to death or Disability, as defined in Appendix A, the Company shall pay
        to
        the Executive, or if applicable his estate any (i) accrued but unpaid Base
        Salary earned through the date of his termination, (ii) unreimbursed expenses,
        plus (iii) accrued but unpaid employee benefits set forth in Section 4.1
        above
        as determined in accordance with the provisions of the applicable employee
        benefit plans or programs of the Company including, without limitation, any
        Annual Bonus due but not yet paid for a completed calendar year.

       

      
        	 	
                6.

              	
                EFFECT
                  OF A CHANGE IN CONTROL

              


      

       

      6.1    New
        Term of Employment.
        Notwithstanding anything to the contrary in this Agreement, upon the occurrence
        of a Change in Control, as defined in Appendix A, during the Employment Period,
        the Company (or its successor) shall renew this Agreement for a period of
        two
        years commencing on the date of the Change in Control and ending on the second
        anniversary of the date of the Change in Control.

       

      6.2    Acceleration
        of Options.
        Notwithstanding anything to the contrary in any of the Option Documents,
        as
        defined in Appendix A, upon a Change in Control, all outstanding stock options
        granted by the Company or any of its affiliates to the Executive shall become
        fully vested and immediately exercisable on the date of the Change in
        Control.

       

      6.3    Right
        of Termination.
        Notwithstanding anything to the contrary in this Agreement, during a thirty-day
        period commencing on the first anniversary of the date of the Change in Control,
        the Executive shall have the right to resign from his employment with the
        Company (or its successor) for any reason and receive an amount equal to
        (i) one
        times the amount of his Base Salary, as is then in effect, plus (ii) one
        times
        the average of the Annual Bonuses paid to the Executive for the two years
        immediately prior to the year in which such resignation occurs; provided,
        however,
        that,
        if such resignation constitutes an Involuntary Termination, Section 5.1 shall
        apply (in lieu of this Section 6.3). All payments made under this Section
        6.3
        shall be made by the Company (or its successor) in a lump-sum amount no later
        than thirty days after the date of the Executive’s termination of employment;
provided,
        however,
        that
        the payment of such lump sum shall be deferred for six months and one day
        following such termination (i) if necessary to comply with Section 409A of
        the
        Code or (ii) in the event such payment, as determined in the sole discretion
        of
        the Company (or its successor), could cause the Executive to be subject to
        interest and penalties under Section 409A of the Code.

       

      
        	 	
                7.

              	
                REDUCTION
                  OF PAYMENTS

              


      

       

      If
        any
        amounts due to the Executive under this Agreement and any other agreement,
        plan
        or arrangement of or with the Company or any of its affiliates constitute
        a
“parachute payment” as such term is defined in Section 280G(b)(2) of
        the Code,
        and
        the amount of the parachute payment, reduced by all federal, state and local
        taxes applicable thereto, including the excise tax imposed pursuant to Section
        4999 of the Code, is less than the amount the Executive would receive if
        he was
        paid three times his “base amount”, as defined in Section 280G(b)(3) of the
        Code, less $1.00, reduced by all federal, state and local taxes applicable
        thereto, then the aggregate of the amounts constituting the parachute payment
        will be reduced (or returned by the Executive if it has already been paid
        to
        him) to an amount that will equal three times the Executive’s base amount less
        $1.00. Any determination to be made with respect to this Section 7 shall
        be made
        by an accounting firm jointly selected by the Company and the Executive and
        paid
        for by the Company, and which may be the Company’s independent auditors.


       

      
        
          
          

        

        
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                8.

              	
                NO
                  ADDITIONAL RIGHTS

              


      

       

      The
        Executive shall have no right to receive any compensation or benefits upon
        his
        termination or resignation of employment, except (i) as expressly set forth
        in
        Sections 5 and 6 above, where applicable, or (ii) as determined in accordance
        with the provisions of the employee benefit plans or programs of the
        Company.

       

      
        	 	
                9.

              	
                RESTRICTIVE
                  COVENANTS

              


      

       

      9.1    Noncompetition.
        During
        the term of the Executive’s employment with the Company (or any successor
        thereto) and continuing for one year thereafter, the Executive shall not,
        without the prior written consent of the Company, directly or indirectly,
        own,
        manage, operate, join, control, or participate in the ownership, management,
        operation or control of, or be employed by or connected in any manner with,
        any
        Competing Business, whether for compensation or otherwise; provided,
        however,
        that
        the Executive shall be permitted to hold, directly or indirectly, less than
        1%
        of any class of securities of any entity that is listed on a national securities
        exchange or on the NASDAQ National Market System. Notwithstanding the foregoing,
        this Section 9.1 shall cease to apply upon the termination of the Executive’s
        employment with the Company (or any successor thereto) resulting from (i)
        an
        Involuntary Termination or (ii) the Executive’s resignation pursuant to Section
        6.3. For purposes of this Agreement, “Competing
        Business”
means
        any business within the United States that involves for-profit, post secondary
        education.

       

      9.2    Nonsolicitation.
        During
        the term of the Executive’s employment with the Company (or any successor
        thereto) and continuing for one year thereafter, the Executive shall not,
        without the prior written consent of the Company, directly or indirectly,
        as a
        sole proprietor, member of a partnership, stockholder, investor, officer
        or
        director of a corporation, or as an employee, associate, consultant or agent
        of
        any person, partnership, corporation or other business organization or entity
        other than a member of the Company or any of its subsidiaries or affiliates
        (the
“Company
        Group”)
        (i)
        solicit or endeavor to entice away from any member of the Company Group,
        any
        person or entity who is, or was on the date of this Agreement, employed by,
        or
        serving as a key consultant of, any member of the Company Group or (ii) solicit
        or endeavor to entice away from any member of the Company Group, any person
        or
        entity who is, or was on the date of this Agreement, a customer or client
        (or
        reasonably anticipated to become a customer or client) of any member of the
        Company Group.

       

      
        
          
          

        

        
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      9.3    Confidentiality.
        The
        Executive shall not at any time, except in performance of his obligations
        to the
        Company Group under the provisions of this Agreement and as an employee of
        the
        Company, directly or indirectly, disclose or use any secret or protected
        information that he may learn or has learned by reason of his association
        with
        any member of the Company Group. The term “protected information” includes trade
        secrets and confidential and proprietary business information of the Company
        Group, including, but not limited to, customers (including potential customers),
        sources of supply, processes, methods, plans, apparatus, specifications,
        materials, pricing information, intellectual property (including applications
        and rights in discoveries, inventions or patents), internal memoranda, marketing
        plans, contracts, finances, personnel, research and internal policies, but
        shall
        exclude any information which (i)
        is or
        becomes available to the public or is generally known in the industry or
        industries in which the Company Group operates other than as a result of
        disclosure by the Executive in violation of this Section 9.3 or (ii)
        the
        Executive is required to disclose under any applicable laws, regulations
        or
        directives of any government agency, tribunal or authority having jurisdiction
        in the matter or under subpoena or other process of law.

       

      9.4    Exclusive
        Property.
        The
        Executive confirms that all protected information is and shall remain the
        exclusive property of the Company Group. All business records, papers and
        documents kept or made by the Executive relating to the business of the Company
        shall be and remain the property of the Company Group.

       

      9.5    Compliance
        with Restrictive Covenants.
        Without
        intending to limit any other remedies available to the Company Group and
        except
        as required by law, in the event that the Executive breaches or threatens
        to
        breach any of the covenants set forth in this Section 9, (i) the Company
        Group shall be entitled to seek a temporary restraining order and/or a
        preliminary or permanent injunction restraining the Executive from engaging
        in
        activities prohibited by this Section 9 or such other relief as may be required
        to enforce any of such covenants and (ii) all obligations of the Company
        to make
        payments and provide benefits under this Agreement shall immediately
        cease.

       

      
        	 	
                10.

              	
                ARBITRATION

              


      

       

      10.1   General.
        Subject
        to Section 9.5 above, any dispute or controversy arising under or in connection
        with this Agreement that cannot be mutually resolved by the Executive and
        the
        Company shall be settled exclusively by arbitration in West Orange, New Jersey
        before three arbitrators of exemplary qualifications and stature. The Executive
        and the Company shall each select one arbitrator. The arbitrators selected
        by
        the Executive and the Company shall jointly select the third arbitrator.
        Judgment may be entered on the arbitrators’ award in any court having
        jurisdiction. The Executive and the Company hereby agree that the arbitrators
        shall be empowered to enter an equitable decree mandating specific enforcement
        of the provisions of this Agreement.

       

      10.2   Associated
        Costs.
        The
        cost of the arbitration shall be borne by the parties in the manner determined
        by the arbitrators. If, however, the dispute concerns contractual rights
        that
        arise in the event of or subsequent to a Change in Control, the costs of
        arbitration (and any reasonable attorney’s fees incurred by the Executive) shall
        be borne by the Company, unless the arbitrators determine that the Executive
        commenced such arbitration on unfounded or unreasonable grounds.

       

      
        
          
          

        

        
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                11.

              	
                MISCELLANEOUS

              


      

       

      11.1   Communications.
        All
        notices and other communications given or made pursuant hereto shall be in
        writing and shall be deemed to have been duly given or made as of the date
        delivered, or on the fifth business day after mailed if delivered personally
        or
        mailed by registered or certified mail (postage prepaid, return receipt
        requested), to the relevant party at the following address (or at such other
        address for a party as shall be specified by like notice, except that notices
        of
        change of address shall be effective upon receipt):

       

       

      if
        to the
        Company:

      200
        Executive Drive, Suite 340

      West
        Orange, New Jersey 07052

      Attention:
        General Counsel

       

      if
        to the
        Executive:

      200
        Executive Drive, Suite 340

      West
        Orange, New Jersey 07052

       

      11.2   Waiver
        and Release.
        As a
        condition to receiving the payments set forth in Section 5.1 or Section 6.3,
        as
        applicable, the Executive shall be required to execute and not revoke a Waiver
        and Release (relating to the Executive’s release of claims against the Company
        Group) substantially in the form attached hereto as Appendix B.

       

      11.3   Waiver
        of Breach; Severability.
        (a)
        The
        waiver by the Executive or the Company of a breach of any provision of this
        Agreement by the other party hereto shall not operate or be construed as
        a
        waiver of any subsequent breach by either party.

       

      (b) 
         The parties hereto recognize that the laws and public policies of various
        jurisdictions may differ as to the validity and enforceability of covenants
        similar to those set forth herein. It is the intention of the parties that
        the
        provisions of this Agreement be enforced to the fullest extent permissible
        under
        the laws and policies of each jurisdiction in which enforcement may be sought,
        and that the unenforceability (or the modification to conform to such laws
        or
        policies) of any provisions hereof shall not render unenforceable, or impair,
        the remainder of the provisions hereof. Accordingly, if at the time of
        enforcement of any provision hereof, a court of competent jurisdiction holds
        that the restrictions stated herein are unreasonable under circumstances
        then
        existing, the parties hereto agree that the maximum period, scope, or geographic
        area reasonable under such circumstances shall be substituted for the stated
        period, scope or geographical area and that such court shall be allowed to
        revise the restrictions contained herein to cover the maximum period, scope
        and
        geographical area permitted by law.

       

      11.4   Assignment;
        Successors.
        No
        right, benefit or interest hereunder shall be assigned, encumbered, charged,
        pledged, hypothecated or be subject to any setoff or recoupment by the
        Executive. This Agreement shall inure to the benefit of and be binding upon
        the
        successors and assigns of the Company.

       

      
        
          
          

        

        
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      11.5   Entire
        Agreement.
        This
        Agreement and the Option Documents represent the entire agreement of the
        parties
        and shall supersede any and all previous contracts, arrangements or
        understandings between the Company and the Executive relating to the subject
        matter hereof, including, without limitation, the Original Agreement and
        the
        Amendments. This Agreement may be amended at any time by mutual written
        agreement of the parties hereto.

       

      11.6   Withholding.
        The
        payment of any amount pursuant to this Agreement shall be subject to applicable
        withholding and payroll taxes, and such other deductions as may be required
        under the Company’s employee benefit plans, if any.

       

      11.7   Governing
        Law.
        This
        Agreement shall be governed by, and construed in accordance with, the laws
        of
        the State of New Jersey.

       

      11.8   Headings.
        The
        headings in this Agreement are for convenience only and shall not be used
        to
        interpret or construe any of its provisions.

       

      11.9   Counterparts.
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original but all of which together shall constitute one and the
        same
        instrument.

       

      IN
        WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
        and
        the Executive has hereunto set his hand as of the day and year first written
        above.

       

       

      
        	 	
                LINCOLN
                  EDUCATIONAL SERVICES CORPORATION

              
	 	 	 
	 	
                By:
                  

              	
                /s/
                  David F. Carney

              
	 	 	
                Name:
                  David F. Carney

              
	 	 	
                Title:
                  Chairman & CEO

              
	 	 	 
	 	
                EXECUTIVE

              
	 	 	 
	 	
                /s/
                  Scott M. Shaw 

              
	 	
                Scott
                  M. Shaw

              


      

       

      
        
          
          

        

        
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      APPENDIX
        A

       

      “Cause”
shall
        mean, with respect to the Executive, the following:

       

      
        	 	
                (a)

              	
                prior
                  to a Change in Control, (i) the Executive’s willful failure to perform the
                  duties of his employment in any material respect, (ii) malfeasance
                  or
                  gross negligence in the performance of the Executive’s duties of
                  employment, (iii) the Executive’s conviction of a felony under the laws of
                  the United States or any state thereof (whether or not in connection
                  with
                  his employment), (iv) the Executive’s intentional or reckless disclosure
                  of protected information respecting any member of the Company Group’s
                  business to any individual or entity which is not in the performance
                  of
                  the duties of his employment, (v) the Executive’s commission of an act or
                  acts of sexual harassment that would normally constitute grounds
                  for
                  termination, or (vi) any other act or omission by the Executive
                  (other
                  than an act or omission resulting from the exercise by the Executive
                  of
                  good faith business judgment), which is materially injurious to
                  the
                  financial condition or business reputation of any member of the
                  Company
                  Group; provided,
                  however,
                  that in the case of (i) and (ii) above, the Executive shall not
                  be deemed
                  to have been terminated for cause unless he has received written
                  notice of
                  the alleged basis therefor from the Company, and fails to remedy
                  the
                  matter within 30 days after he has received such notice, except
                  that no
                  such “cure opportunity” shall be required in the case of two separate
                  episodes occurring within any 12-month period that give the Company
                  the
                  right to terminate for cause for such reason;
                  or

              


      

       

      
        	 	
                (b)

              	
                on
                  or after a Change in Control, (i) the Executive’s willful failure to
                  perform the duties of his employment in any material respect, (ii)
                  malfeasance or gross negligence in the performance of the Executive’s
                  duties of employment, (iii) the Executive’s conviction of a felony under
                  the laws of the United States or any state thereof (whether or
                  not in
                  connection with his employment), (iv) the Executive’s intentional or
                  reckless disclosure of protected information respecting any member
                  of the
                  Company Group’s business to any individual or entity which is not in the
                  performance of the duties of his employment; provided,
                  however,
                  that in the case of (i) and (ii) above, the Executive shall not
                  be deemed
                  to have been terminated for cause unless he has received written
                  notice of
                  the alleged basis therefor from the Company, and fails to remedy
                  the
                  matter within 30 days after he has received such notice, except
                  that no
                  such “cure opportunity” shall be required in the case of two separate
                  episodes occurring within any 12-month period that give the Company
                  the
                  right to terminate for cause for such
                  reason.

              


      

       

      “Change
        in Control”
shall
        mean:

       

      
        	 	
                (a)

              	
                when
                  a “person” (as defined in Section 3(a)(9) of the Exchange Act), including
                  a “group” (as defined in Section 13(d) and 14(d) of the Exchange Act),
                  either directly or indirectly becomes the “beneficial owner” (as defined
                  in Rule 13d-3 under the Exchange Act) of 25% or more of either
                  (1) the
                  then outstanding Common Stock, or (2) the combined voting power
                  of the
                  then outstanding voting securities of the Company entitled to vote
                  generally in the election of directors; provided,
                  however,
                  that
                  the following acquisitions shall not constitute a Change in Control:
                  (1)
                  any acquisition directly from the Company; (2) any acquisition
                  by the
                  Company; or (3) any acquisition by an employee benefit plan (or
                  related
                  trust) sponsored or maintained by the Company or any corporation
                  controlled by the Company;

              


      

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      


      
        	 	
                (b)

              	
                when,
                  during any period of 24 consecutive months during the Employment
                  Period,
                  the individuals who, at the beginning of such period, constitute
                  the Board
                  (the “Company
                  Incumbent Directors”)
                  cease for any reason other than death to constitute at least a
                  majority
                  thereof; provided,
                  however,
                  that a director who was not a director at the beginning of such
                  24-month
                  period shall be deemed to be a Company Incumbent Director if such
                  director
                  was elected by, or on the recommendation of or with the approval
                  of at
                  least two-thirds of the directors of the Company, who then qualified
                  as
                  Company Incumbent Directors;

              


      

       

      
        	 	
                (c)

              	
                when
                  the stockholders of the Company approve a reorganization, merger
                  or
                  consolidation of the Company without the consent or approval of
                  a majority
                  of the Company Incumbent Directors;

              


      

       

      
        	 	
                (d)

              	
                consummation
                  of a merger, amalgamation or consolidation of the Company with
                  any other
                  corporation, the issuance of voting securities of the Company in
                  connection with a merger, amalgamation or consolidation of the
                  Company or
                  sale or other disposition of all or substantially all of the assets
                  of the
                  Company or the acquisition of assets of another corporation (each,
                  a
                  “Business
                  Combination”),
                  unless, in each case of a Business Combination, immediately following
                  such
                  Business Combination, all or substantially all of the individuals
                  and
                  entities who were the beneficial owners of the Common Stock outstanding
                  immediately prior to such Business Combination beneficially own,
                  directly
                  or indirectly, more than 50% of the then outstanding shares of
                  common
                  stock and 50% of the combined voting power of the then outstanding
                  voting
                  securities entitled to vote generally in the election of directors,
                  as the
                  case may be, of the entity resulting from such Business Combination
                  (including, without limitation, an entity which as a result of
                  such
                  transaction owns the Company or all or substantially all of the
                  Company’s
                  assets either directly or through one or more subsidiaries) in
                  substantially the same proportions as their ownership, immediately
                  prior
                  to such Business Combination, of the Common Stock;
                  or

              


      

       

      
        	 	
                (e)

              	
                a
                  complete liquidation or dissolution of the Company or the sale
                  or other
                  disposition of all or substantially all of the assets of the
                  Company;

              



        
          
            
            

          

          
            A-2

            
              

            

          

          
            
            

          

        

      

       

      provided,
        however,
        that in
        no event shall a Change in Control be deemed to have occurred so long as
        Stonington Partners, Inc., together with Five Mile River Capital, LLC and
        any of
        their respective affiliates, remain the person or group with the largest
        single
        beneficial ownership stake in the outstanding Common Stock and combined voting
        power of the then outstanding voting securities of the Company entitled to
        vote
        generally in the election of the Company’s directors.

       

      “Disability”
shall
        mean the inability of the Executive to perform substantially his duties and
        responsibilities to the Company or any of its subsidiaries by reason of a
        physical or mental disability or infirmity (a) for a continuous period of
        six
        months or (b) at such earlier time as the Executive submits medical evidence
        of
        such disability to the reasonable satisfaction of the Committee that the
        Executive has a physical or mental disability or infirmity that shall likely
        prevent him from substantially performing his duties and responsibilities
        for
        six months or longer. The date of such Disability shall be on the last day
        of
        such six-month period or the day on which the Committee determines that the
        Executive has a physical or mental disability or infirmity as provided in
        clause
        (b) herein.

       

      “Good
        Reason”
shall
        mean, with respect to the Executive, the occurrence of any of the following
        (without his written consent): (a) a reduction in the Executive’s Base Salary or
        minimum guaranteed Annual Bonus; (b) an adverse change in the Executive’s title,
        authority, duties, responsibilities or reporting lines as specified in Section
        2.1; (c) the relocation of the Executive’s principal place of employment to a
        location more than 10 miles from West Orange, New Jersey; (d) a failure by
        the
        Company to pay material compensation when due in connection with the Executive’s
        employment; or (e) a material breach of this Agreement by the Company;
provided,
        however,
        that,
        if any such Good Reason is reasonably susceptible to cure, then the Executive
        shall not terminate his employment hereunder unless the Executive first provides
        the Company with written notice of his intention to terminate and of the
        grounds
        for such termination, and the Company has not, within 10 business days following
        receipt of such written notice, cured such Good Reason.

       

      “Option
        Documents”
shall
        mean, with respect to the Executive, each of the following documents to the
        extent applicable: (a) the Management Stockholders Agreement, dated January
        1,
        2002, among the Company, Back to School Acquisition LLC and certain Management
        Investors; (b) the Lincoln Technical Institute Management Stock Option Plan,
        effective January 1, 2002, and any stock option agreement thereunder; (c)
        the
        Management Stock Subscription Agreement, dated January 1, 2002, among the
        Company and certain Management Investors; (d) any option agreements or other
        equity awards under the Company’s 2005 Long-Term Incentive Plan; and (e) any
        stock pledge agreement or promissory note relating to the Executive’s stock
        options or shares of Company common stock underlying such options. 

       

       

    

    A-3