Summary of Certain Director and Executive Compensation



 Exhibit 10.48 
 Description of ITT Educational Services, Inc.’s Compensation of Directors, 2006 Executive Bonus 
 Parameters, Payment of 2005 Bonus Compensation and 2006 Executive Salaries and Perquisites 
 Compensation of Directors 
 The compensation that ITT Educational Services, Inc. (the “Company”) currently pays its
non-employee directors for their service on the Company’s Board of Directors consists of: 
  

	 	•	 	an annual retainer of $40,000; 

  

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

  

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

  

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

 On January 24, 2006, the Company’s Board of Directors modified the compensation that the Company will pay its non-employee directors for their
service on the Company’s Board of Directors as follows, effective January 1, 2007: 
  

	 	(1)	eliminated the payment of any meeting or participation fee for any regular, special or standing committee meeting of the Company’s Board of Directors that a non-employee
director attends, whether in person or telephonically; and 

  

	 	(2)	increased to $60,000 the annual retainer paid to each non-employee director for his or her service on the Board of Directors of the Corporation, payable in shares of the
Corporation’s common stock in semi-annual installments on January 1st and July 1st of each calendar year. 

 2006 Executive Bonus Parameters 
 On January 23, 2006, the Compensation Committee of the Company’s Board of Directors approved the 2006 Executive Bonus Parameters (the “Bonus Parameters”) for participation by the Company’s
executive officers, as well as other vice presidents and key employees. Bonuses payable to individual participants are based on a formula that takes into account the Company’s ability to achieve specified targets in 2006 in each of four
performance categories, each weighted equally: 
  

	 	•	 	earnings per share before equity-based compensation expenses (excluding: (i) workers’ compensation expense; and (ii) 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); 

  

	 	•	 	total student enrollment; 

  

	 	•	 	free cash flow; and 

  

	 	•	 	graduate employment rate. 

 The Bonus Parameters establish
for each participant a standard bonus target percentage of 2006 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 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 2006 annual base salary. 
  

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 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 2005 Bonus Compensation 
 On January 23, 2006, the Compensation Committee approved the payment of cash bonus awards for 2005 in the following amounts to the Company’s named executive officers: 
  

				
	 Name and Principal Position
	  	Bonus
		
	 Rene R. Champagne
 Chairman and Chief Executive Officer
	  	$	530,000
		
	 Kevin M. Modany
 President and Chief Operating Officer
	  	$	217,000
		
	 Clark D. Elwood
 Senior Vice President, General Counsel and Secretary
	  	$	126,500
		
	 Eugene W. Feichtner
 Senior Vice President, Operations
	  	$	95,000
		
	 Daniel M. Fitzpatrick
 Senior Vice President, Chief Financial Officer
	  	$	87,300

 2006 Executive Salaries and Perquisites 
 On January 23, 2006, the Compensation Committee also approved an increase, effective April 1, 2006, in the annual base salary level of the
Company’s named executive officers, to the following amounts: 
  

				
	 Name and Principal Position
	  	Salary
		
	 Rene R. Champagne
 Chairman and Chief Executive Officer
	  	$	560,000
		
	 Kevin M. Modany
 President and Chief Operating Officer
	  	$	332,500
		
	 Clark D. Elwood
 Senior Vice President, General Counsel and Secretary
	  	$	246,100
		
	 Eugene W. Feichtner
 Senior Vice President, Operations
	  	$	202,200
		
	 Daniel M. Fitzpatrick
 Senior Vice President, Chief Financial Officer
	  	$	247,500

  

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 On January 23, 2006, the Compensation Committee also approved the following executive perquisites for 2006 for the
Company’s named executive officers: 
  

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

  

	 	•	 	for the Chief Executive Officer, the President and Chief Operating Officer and each of the Senior Vice Presidents: 

  

	 	•	 	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 $65,000. 
 ESI Pension Plan
and ESI Excess Pension Plan 
 On January 24, 2006, the Company’s Board of Directors decided to freeze the benefit accruals
under the ESI Pension Plan and ESI Excess Pension Plan for all employees of the Company who participate in those plans. The effective date of the freeze will be March 31, 2006. The ESI Pension Plan is a cash balance defined benefit plan, which
provides a set benefit to the Company’s participating employees at their retirement that is not affected by the amount of the Company’s contributions to the ESI Pension Plan trust or the investment gains or losses with respect to such
contributions. The ESI Excess Pension Plan is an unfunded, non-qualified retirement plan for a select group of the Company’s management and highly compensated employees. The purpose of the ESI Excess Pension Plan is to restore benefits earned,
but not available, to eligible employees under the ESI Pension Plan due to federal limitations on the amount of benefits that can be paid and compensation that may be recognized under a tax-qualified retirement plan. 
 The freeze on the ESI Pension Plan and ESI Excess Pension Plan will stop all further benefits from accruing under those plans after March 31, 2006.

  

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