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                                                                     Exhibit 4.4







                                       THE
                        EDUCATION MANAGEMENT CORPORATION
                           DEFERRED COMPENSATION PLAN





                     AMENDED FOR IMPLEMENTATION JULY 1, 2003











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                                TABLE OF CONTENTS





Welcome to the Plan!........................................................1

Participation...............................................................1

Salary Deferrals............................................................2

Company Credits.............................................................3

Investment Credits..........................................................5

Deferral of Gain from the Exercise of Stock Options.........................6

Plan not Funded.............................................................8

Payment of Benefits.........................................................9

Hardship Withdrawals.......................................................11

Administration, Claims and Appeals.........................................12

Miscellaneous..............................................................13



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                              WELCOME TO THE PLAN!


         INTRODUCTION. This is the plan document for the Education Management
Corporation Deferred Compensation Plan. This is an unfunded, non-qualified
deferred compensation arrangement. The purpose is to allow additional retirement
savings for a select group of management or highly compensated employees in view
of the restrictions on the contributions that can be made, or benefits that can
be accrued, for these employees under tax-qualified retirement plans of the
employer.

         ORDINARY NAMES. In this document, we will call things by their ordinary
names. Education Management Corporation will be called "the company." This plan
will simply be called "the plan." When we say "you," we mean employees who are
eligible to participate in the plan and choose to do so. When we say "the Code,"
we mean the Internal Revenue Code of 1986, as amended.

         EFFECTIVE DATE. This document amends and restates the plan effective
January 1, 2003. This amendment and restatement does not attempt to describe the
rules that were in effect under the plan before that date and therefore does not
apply to any participant whose employment with the employer terminated before
that date (any such participant's rights being governed by the terms of the plan
as in effect when his termination of employment occurred).



                                  PARTICIPATION


         COMMITTEE DISCRETION. The Retirement Committee has complete discretion
to select employees for participation in this plan.

         CURRENT CRITERIA. At present, the Retirement Committee has exercised
its discretion to make eligible:

         o outside directors of the company, with respect to their director's
fees and gain on the exercise of stock options,

         o school presidents, and

         o executive employees of the company and designated subsidiaries who
earn $150,000 or more per year.

         LEGAL LIMITATION. Despite the discretion of the Retirement Committee
and the current criteria just described, no employee will be selected for
participation or continued as a participant in this plan if, due to the
employee's participation, the plan would fail to qualify as primarily for the
purpose of providing deferred compensation to a select group of management or
highly compensated employees, within the meaning of sections 201, 301 and 401 of
the Employee Retirement Income Security Act of 1974, as amended.


         PARTICIPATION AGREEMENT. Participation is not automatic if and when you
satisfy the current criteria. Instead, employees who satisfy the current
criteria will be notified of their eligibility and offered the


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opportunity to participate. If you wish to participate, you must complete and
file with the administrator of the plan a written participation agreement.

         If you choose to make salary deferrals, the participation agreement
will reflect your choice. But in any event, the participation agreement will (i)
confirm your participation, (ii) indicate your initial choice with regard to
investment credits on any company credits that may be made, (iii) indicate your
choice as to the form of payment and (iv) designate your beneficiary.

         ANNUAL DETERMINATION. Eligibility to participate is determined
annually. The fact that you were eligible to participate (and did participate)
in one year does not automatically entitle you to participate in any future
year.

         Your participation agreement, however, is "evergreen." It remains in
effect and governs your choices under the plan during those years when you do
participate in the plan, unless and until you change it.

         CHANGING YOUR PARTICIPATION AGREEMENT. Except for changes with regard
to investment credits (which we will explain in just a moment), you change your
participation agreement by completing and filing a new one with the
administrator of the plan.

         A change in the amount of salary deferrals will take effect at the
beginning of the next calendar year, as long as it is filed with the
administrator no later than December 31 of the preceding calendar year. A change
in the time or form of payment will take effect as described later in the plan
in the section called "Payment." A change of beneficiary will take effect
immediately upon filing with the administrator.

         With regard to investment credits, you change your choices in the same
manner as under the Retirement Plan-by calling Fidelity at (800) 835-5092 during
normal business hours-and the changes take effect as soon as Fidelity processes
them.


                                SALARY DEFERRALS


         INTRODUCTION. You may choose to defer a certain percentage of your
salary and/or bonus into the plan. If you do, that amount will not be paid to
you currently in cash but will be credited to a bookkeeping account in your name
under the plan. (With regard to outside directors, references in this section to
"salary" will be understood as referring to director's fees.)

         AMOUNT. There are two possible elements of your choice to defer.

         Ordinary deferral of salary. First, you may defer a fixed, whole
percentage of your salary and/or bonus. The amount of deferral must be at least
1% of your compensation or $1,000, whichever is less. The amount may not be more
than 100% of your compensation. Alternatively, you may defer a fixed dollar
amount, as long as the amount is within those limits.

         Supplemental deferral based on amounts returned under Retirement Plan.
Second, entirely separate from the percentage described in the preceding
paragraph (and assuming you have not already chosen to defer 100% of your
compensation, of course), you may defer an additional amount of salary equal to
all or a portion of any elective contributions (plus interest) that are returned
to you from the Education Management Corporation Retirement Plan (we'll just
call it the "Retirement Plan") by reason of the non-discrimination requirements
of law.


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         That is to say, in a given calendar year, elective contributions made
under the Retirement Plan in the preceding year may be returned to you (with
interest) because of the non-discrimination requirements of law. If you have
elected supplemental deferral under this paragraph, while the elective
contributions (and interest) will still be returned to you in cash from the
Retirement Plan, an offsetting additional deferral will be taken from your
current salary under this plan. The net economic effect will be that the amount
remains deferred, but under this plan instead of under the Retirement Plan. You
may elect to defer any whole percentage of any such return of elective
contributions, from zero to 100%.

         WRITTEN ELECTION. In order to defer compensation into the plan, you
must complete and file with the administrator of the plan a written election.
The written election will specify the percentage and whether it applies to
salary or bonus or both. The election will also specify whether you wish to
defer an additional amount equal to all or any portion of any elective
contributions (and interest) that may be returned to you in the particular
calendar year.

         TIMING. In order to defer for a particular calendar year, you must
complete and file the written election with the administrator of the plan no
later than December 31 of the preceding calendar year.

         With respect to the additional deferral equal to all or a portion of
the elective contributions that may be returned under the Retirement Plan, the
timing may require more explanation. An election made by December 31 of Year 1
applies to compensation earned in Year 2. In the case of supplemental deferrals
equal to contributions that are returned under the Retirement Plan, the
supplemental deferral occurs in Year 2 based on elective contributions that are
returned in Year 2 and the deferral is made from compensation earned and
otherwise payable in Year 2.

         This is so even though the contributions returned from the Retirement
Plan in Year 2 were made to the Retirement Plan in Year 1. An election of
supplemental deferral under this plan must therefore be made before it is known
whether elective contributions will be returned from the Retirement Plan at all.
The election will therefore be contingent-applicable only if and when elective
contributions are in fact returned under the Retirement Plan.


                                 COMPANY CREDITS


         INTRODUCTION. Whether or not you choose to defer salary and/or bonus,
you may receive company credits under the plan in the following circumstances.

         MATCHING CONTRIBUTIONS. If you made elective contributions under the
Retirement Plan that generated the maximum matching contribution under the
Retirement Plan (or your matching contributions did not reach the maximum
because your elective contributions reached the dollar limit before the end of
the year), you may be entitled to a company credit under this section.

         If so, you are entitled to a credit under this section if the amount of
matching contributions that you received under the Retirement Plan was limited:

         o by section 401(a)(17) of the Code (which limits compensation taken
into account under the Retirement Plan to a stated amount, which is $170,000 in
2000, for example) or


Deferred Compensation Plan                                              Page 3


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         o by section 402(g) of the Code (which limits elective contributions
under the Retirement Plan to a stated amount, which is $10,500 in 2000, for
example).

If so, the company will credit you under this plan with an amount equal to the
additional matching contribution that you would have received under the
Retirement Plan if you had not been so limited.

         EXAMPLE 1-Not eligible for company matching credit. It is 2000. Your
         compensation is $200,000 (although only $170,000 can be taken into
         account under the Retirement Plan). You make elective contributions
         under the Retirement Plan of 4% of compensation. You receive no credit
         under this section of this plan, because you did not make elective
         contributions under the Retirement Plan that generated the maximum
         matching contribution under the Retirement Plan, nor did your matching
         contributions reach the maximum because your elective contributions
         reached the dollar limit.

         EXAMPLE 2-Eligible and limited by 401(a)(17). It is 2000. Your
         compensation is $200,000 (although only $170,000 can be taken into
         account under the Retirement Plan). You make elective contributions
         under the Retirement Plan of 6% of compensation, which generate the
         maximum matching contribution of 4.5% (that is, 4.5% of $170,000, which
         is $7,650). If the compensation that is taken into account under the
         Retirement Plan were not limited to $170,000, your matching
         contribution would have been $9,000 (that is, 4.5% of $200,000).
         Therefore, under this section of this plan, you receive a company
         credit equal to the difference-$9,000 minus $7,650, or $1,350.

         EXAMPLE 3-Eligible and limited by 402(g). It is 2000. Your compensation
         is $170,000. You make elective contributions under the Retirement Plan
         of 10% of compensation, a percentage calculated to generate the maximum
         matching contribution. But your elective contributions reach the limit
         of $10,500 well before the end of the year (whenever your cumulative
         compensation during the year reaches $105,000), at which point they
         stop. When your elective contributions stop, so do the matching
         contributions, which up to that point have accumulated to $4,725.
         Effective January 1, 1999, under the Retirement Plan a "catch-up"
         matching contribution is made at the end of the year to bring your
         matching contributions up to the maximum of $7,650; that adjustment
         relieves you of the effect of your elective contributions stopping
         before the end of the year. But before 1999 (and if that "catch-up"
         provision is ever eliminated), you would get a credit under this
         section equal to the "catch-up" amount (that is, the maximum of $7,650
         minus your actual matching contributions of $4,725, or 2,925).

         DISCRETIONARY CONTRIBUTIONS AND FORFEITURES. Your share of company
discretionary contributions and forfeitures under the Retirement Plan may be
limited by either or both of two legal limits-the limit on compensation that may
be taken into account (in 2000, $170,000) and the limit under section 415 of the
Code on total allocations of contributions and forfeitures. If so, the company
will credit you under this plan with the discretionary contributions and/or
forfeitures that you would have received under the Retirement Plan (if the
Retirement Plan had not been subject to those two legal limits) but did not
receive under the Retirement Plan. (These are credits of cash, not stock, even
if they relate to forfeitures from employer stock accounts under the Retirement
Plan.)


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                               INVESTMENT CREDITS


         INTRODUCTION. The amount that you are entitled to receive under the
plan is a function of the salary deferrals that you make, the company credits
that you receive under the plan, and investment credits. This section will
explain the system of investment credits.

         HYPOTHETICAL INVESTMENTS. Investment credits are calculated as if the
amounts standing to your credit under the plan were invested in one or more of a
variety of mutual or collective funds (listed below). While we call them
investment "credits," you realize of course that they may be either positive or
negative, depending on the performance of the funds that are used as measuring
devices.

         In addition, we want to emphasize that, for legal reasons, the amounts
standing to your credit under the plan are nothing more than bookkeeping entries
that measure the extent of the company's contractual obligation to pay you under
the terms of the plan. That includes the investment credits. You do not have any
right to, or interest in, any assets that the company may set aside for this
purpose or investment gains on them.

         YOUR CHOICE. You do, however, have a choice as to the mutual or
collective funds that will be used as the measuring stick for the investment
credits that will be added to your account. When you first become eligible to
participate, you will be asked to choose from among the funds offered under the
Retirement Plan. Those choices are shown on Appendix B to the Retirement Plan,
which is incorporated here by reference as it may be in effect from time to
time. As an exception, the Managed Income Portfolio (Fidelity) is not available
under this plan. Employer stock may be made available as an investment option
under this Plan at such time and under such conditions as the company may
determine.

         If employer stock does become an investment option and you elect to
allocate a portion of your account to the employer stock fund, you will receive
stock credits under this plan, expressed as the number of shares of stock that
represent the portion of your account invested in this fund. We will call these
"stock credits" in the remainder of this plan. As with all other amounts
deferred under this plan, stock credits represent nothing more than the
company's unfunded, unsecured promise to pay the shares to you at a future date,
in accordance with the terms of this plan. You do not own the stock unless and
until it is paid to you pursuant to the terms of this plan.

         If for any reason there is no current choice on file for you, the plan
         hereby requires that the measuring stick be the Fidelity Intermediate
         Bond Fund, and neither the plan administrator nor any other fiduciary
         of the plan shall have any authority or discretion to direct otherwise.
         The same applies to any portion of your choice that becomes out of
         date, such as if you have chosen a particular fund and that fund is no
         longer offered (unless a substitute fund is automatically provided).

         The choice that you make for the amounts currently standing to your
credit under the plan need not be the same as the choice you make for future
credits. But choices among the funds are not permitted in increments smaller
than 10% of the amount to which they apply.

         As noted above, you may change your choice with regard to investment
credits at any time by calling Fidelity during normal business hours at (800)
835-5092.


Deferred Compensation Plan                                              Page 5


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         STATEMENTS. The administrator of the plan will provide annual
statements showing the amounts standing to your credit under the plan. The
statements will separately account for salary deferrals, different types of
company credits, and investment credits. But you may inquire about your balance
or get a statement at any time by calling Fidelity at (800) 835-5092. Or you can
visit the Fidelity website at www.401k.com.


                            DEFERRAL OF GAIN FROM THE
                            EXERCISE OF STOCK OPTIONS


         INTRODUCTION. If you hold a stock option under the company's 1996 Stock
Incentive Plan, then entirely apart from the system of salary deferrals, company
credits and investment credits which has been described up to this point, you
may choose to defer under this plan the gain that you would otherwise realize
upon the exercise of that stock option. If you do, the stock that you would
otherwise have received upon exercise of the stock option will not be paid to
you currently but will be credited to a bookkeeping account in your name under
the plan for payment to you (or your beneficiary) at a future date.

         WRITTEN ELECTION. In order to defer gain from the exercise of a stock
option into the plan, you must complete and file with the administrator of the
plan a written election. The written election will specify either (a) the
particular options from which the gain will be deferred under this plan,
regardless of when the option is exercised, or (b) the particular exercises from
which the gain will be deferred under this plan, identified by a date or range
of dates, or (c) a combination of both.

         For example, you may elect to defer under this plan the gain from (a)
the exercise of all non-qualified stock options granted under the 1996 Stock
Incentive Plan, but none of the incentive stock options, or (b) all exercises of
stock options during a stated calendar year, or (c) all exercises of
non-qualified stock options granted under the 1996 Stock Incentive Plan that
occur during a particular calendar year.

         Please note: As explained in more detail below, the purpose of this
         section of the plan is to postpone federal income taxation on the
         element of gain from exercising a stock option-taxation that would
         otherwise occur when you exercise the option. Since federal income
         taxation of the gain at exercise applies to non-qualified stock options
         but not to incentive stock options, you may reasonably conclude that
         this section should only be used with respect to non-qualified stock
         options.

         TIMING. You may make the election to defer under this section of the
plan at any time. But the election will apply only to exercises that satisfy
both of the following conditions:

         o the exercise occurs in a calendar year following the calendar year in
which the election was filed with the administrator of this plan, and

         o the exercise occurs at least six months after the election was filed
with the administrator of this plan.

         For example, if an election is filed with the plan administrator on
February 15, 2002, it cannot apply to any exercises that occur before January 1,
2003. If an election is filed with the administrator on October 15, 2002, it
cannot apply to any exercises that occur before April 15, 2003.


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         Once filed with the plan administrator, an election under this section
of the plan may only be revoked by a written revocation election filed with the
plan administrator at least 13 months prior to the effective date of such
revocation.

         For example, if you filed an election effective January 1, 2002 to
defer the gain on non-qualified options granted to you in 2001 and you file a
revocation of that election on March 15, 2003, that revocation may take effect
no earlier than April 15, 2004.

         EXERCISING THE OPTION. If you have elected to defer under this section
of the plan, do not initiate an exercise of your stock option through Mellon
Investor Services (or the then-current transfer agent). Instead, please contact
Human Resources to initiate the process, in order to assure that the option
stock is not issued to you, as we will explain here.

         Upon exercise, you will not receive the shares of stock that represent
the element of gain from exercising the stock option. When we say "the element
of gain from exercising the stock option," we mean the excess of the value of
the stock that you would receive by exercising the stock option over the amount
that you had to pay to exercise the stock option (either in cash or in stock).
This is the amount on which you would ordinarily be taxed if you did not use
this section of this plan.

         EXAMPLE: You have the option to buy 100 shares of company stock at an
         option price of $20. The stock has a current market value of $25. You
         exercise your option by paying $2,000 and, in return, would ordinarily
         receive 100 shares of stock valued at $2,500. In this example, $2,000
         worth of that stock represents a return of your purchase price; $500
         worth of stock represents the element of gain from exercising the stock
         option. In this example, the gain from exercising the option consists
         of 20 shares of stock ($500 worth of stock at $25 per share equals 20
         shares).

         EXAMPLE: The facts are the same as the previous example, except that
         you exercise by using a cashless method such as "exercise and sell to
         cover," meaning that you are treated as if you exercised the option by
         buying 100 shares at $20, costing $2,000, and then sold 80 shares at
         $25 to cover the cost of exercising the option (selling 80 shares at
         $25 raises $2,000). That would likewise leave you with 20 shares as the
         element of gain from exercising the option.

         Upon exercise, instead of receiving the shares of stock that represent
the element of gain from exercising the option, you will receive stock credits
under this plan, expressed as the number of shares of stock that represent the
element of gain. In the examples above, you would receive a stock credit under
this plan equal to 20 shares of stock.

         DIVIDENDS. You do not earn investment credits on shares of stock that
are credited to your account under this section of the plan. Instead, if
dividends are payable on the stock for which the stock credit under this plan is
a substitute, then your account under this plan will receive additional credits,
expressed in shares of company stock, equal to the value of the dividends.
Alternatively, if you so choose by written election made and filed with the plan
administrator before a dividend is declared, you may receive a current cash
payment from the company equal to the dividend in the same manner as if you
actually owned the stock that stands to your credit under this plan.


Deferred Compensation Plan                                              Page 7


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                                 PLAN NOT FUNDED

         INTRODUCTION. We say "credits" in this document deliberately, because
this plan involves nothing more than a contractual promise by the company to pay
deferred compensation when (and in the amounts) determined under the terms of
the plan. Legally, the plan is unfunded and unsecured, as this section will
explain.

         UNFUNDED, UNSECURED PROMISE TO PAY. This plan is unfunded and has no
assets. The promise of benefits under the plan is no more than a contractual
obligation of the company to be satisfied from its general assets. Participation
in the plan gives you nothing more than the company's contractual promise to pay
deferred compensation when due in accordance with the terms of this plan.

         SALARY DEFERRAL. Just to make the point clear once again, if you choose
to defer salary under the plan, the amount that you choose to defer is not an
"employee contribution" and is not an asset of yours or of the plan. It reflects
nothing more than a re-structuring of your compensation arrangement, whereby
current compensation is somewhat less and deferred compensation is somewhat
more.

         RESERVES. The company is not required to segregate, maintain or invest
any portion of its assets by reason of its contractual commitment to pay
deferred compensation under this plan. If the company nevertheless chooses to
establish and invest a reserve (as a matter of prudent management of its
contractual liability), such reserve remains an asset of the company in which no
participating employee has any right, title or interest. Employees entitled to
deferred compensation under this plan have the status of general unsecured
creditors of the company.

         RABBI TRUST. Though not required to do so, the company may establish
(and has in fact established) a so-called rabbi trust (so named because it was
invented by a synagogue and first approved by the IRS for a rabbi). Here is how
the rabbi trust works:

         o The rabbi trust is held by a financial institution as trustee under
a detailed, written trust agreement.

         o The company contributes cash to the rabbi trust at whatever times
and in whatever amounts it chooses. Please note that this applies only to salary
deferrals, company credits, and investment credits. If you use this plan to
defer the element of gain from the exercise of a stock option, and therefore
receive stock credits under this plan, no stock is transferred to, or held in,
the rabbi trust.

         o The assets of the trust are considered to be assets of the company.
For example, the investment earnings of the trust are taxable income to the
company under the "grantor trust" rules. As noted in the previous section of
this plan, no participant or beneficiary of the plan has any right, title or
interest in the assets of the rabbi trust.

         o But under the terms of the rabbi trust, the assets may be used only
for the purpose of paying benefits under this plan, barring bankruptcy of the
company (or similar events), in which event the assets of the rabbi trust are
available not just to participants and beneficiaries of this plan but to all
other creditors of the company as well.


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         o To the extent that payments are made to participants and
beneficiaries by the trustee from the rabbi trust, those payments are considered
payments by the company under the plan and satisfy the company's obligation
under the plan.

         The trustee of the rabbi trust is Fidelity Management Trust Company,
which is why the plan refers you to Fidelity for information about your account
and to change your choices about investment credits.


                               PAYMENT OF BENEFITS

         INTRODUCTION. This section of the plan explains when you are entitled
to payment under the plan, how much, and in what form.

         DEFERRALS TO A STATED DATE, EVEN BEFORE TERMINATION OF EMPLOYMENT. On
your participation form, you may designate salary deferrals (not company
credits, which are subject to vesting) to be credited to accounts which are
payable on dates that you specify. When the stated date arrives, you are
entitled to the total amount standing to your credit in that account (including
investment credits), regardless of whether your employment with the company has
terminated. You may use this feature to defer for a child's education, for
example.

         TERMINATION OF EMPLOYMENT. Apart from accounts that are payable on a
stated date (as explained in the previous section), payment is triggered by any
one of the following events, whichever happens first. When we say " the total
amount standing to your credit under the plan," remember that we are only
talking about accounts that are not designated to be paid on stated dates (as
explained the in previous section).

         o Normal retirement. If your employment with the company terminates on
or after your 65th birthday, you are entitled to receive payment equal to the
total amount standing to your credit under the plan, including salary deferral
credits, company credits, investment credits and stock credits (if any).

         o Early retirement. If your employment with the company terminates on
or after your 55th birthday and you have completed at least 5 years of service
with the company (with the meaning of the Retirement Plan), you are entitled to
receive payment equal to the total amount standing to your credit under the
plan, including salary deferral credits, company credits, investment credits,
and stock credits (if any).

         o Disability. If you become totally and permanently disabled while
still employed by the company, you are entitled to receive payment equal to the
total amount standing to your credit under the plan, including salary deferral
credits, company credits, investment credits, and stock credits (if any).

         For this purpose, total and permanent disability means that you are
unable to engage in any substantial gainful activity by reason of any physical
or mental impairment which is expected to result in death or be of a long,
continued and indefinite duration, as certified by a written opinion of a
physician selected by the administrator of the plan.

         o Death. If you die while still employed by the company, your
beneficiary is entitled to receive payment equal to the total amount standing to
your credit under the plan, including salary deferral credits, company credits,
investment credits, and stock credits (if any).


Deferred Compensation Plan                                              Page 9


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         o Other termination of employment. If your employment with the company
terminates under any circumstances other than those previously listed in this
section, you are entitled to receive all of your salary deferral credits and
investment credits on them, as well as all of your stock credits (if any). You
are also entitled to receive all of the company credits and investment credits
on them if you have completed at least 3 years of service (within the meaning of
the Retirement Plan). If you have not completed at least 3 years of service
(within the meaning of the Retirement Plan), you are not entitled to receive any
of the company credits and investment credits on them, with one exception.

         As an exception, if you had completed at least 3 years of service
(within the meaning of the Retirement Plan) by April 1, 2000, then you are
entitled to 20% of the company credits and investment credits on them (if you
have completed only 3 years of service at the time of your termination) or 40%
of the company credits and investment credits on them (if you have completed
only 4 years of service at the time of your termination).

         WHEN PAYMENT IS MADE. By default, payment is made (or begun, if payment
is to be made in installments) as soon as administratively feasible after the
triggering event. If you die before payment is made in full, the balance of your
entitlement will be paid to your beneficiary as soon as administratively
feasible.

         But you may alter the default time of payment if you act sufficiently
in advance of the triggering event. Sufficiently in advance of the triggering
event means (a) during the calendar year before the calendar year in which the
triggering event occurs and (b) at least six months before the triggering event
occurs. If you file a written form with the plan administration sufficiently in
advance of the triggering event, you may postpone the triggering event either
for a fixed period or until a fixed date (stated on your form).

         EXAMPLE 1: It is August 2002. You are thinking of taking early
         retirement (age 55 plus 5 years of service) on April 1, 2003. Early
         retirement will trigger payment under this plan. But you file a written
         form with the plan administrator no later than September 30, 2002
         stating that you wish payment to be deferred until 3 years after your
         early retirement. You take early retirement on April 1, 2003. Because
         the form was filed during the preceding calendar year and at least six
         months before your early retirement, payment is successfully postponed
         until 3 years after your early retirement.

         EXAMPLE 2: Same facts as Example 1, except that you die on January 15,
         2003. Your death triggers payment under this plan. Because your form
         was not filed at least six months before the triggering event, however,
         it is not given effect. Your beneficiary is paid as soon as
         administratively possible after your death.

         FORM OF PAYMENT. Payment of salary deferral credits, company credits
and investment credits on both is made in cash, except that you may elect to
receive for your stock credits in the form of shares of employer stock (the
value of fractional shares will be paid in cash). Payment of stock units
resulting from the deferral of option gains is automatically made in stock. In
either case, by default, payment is made in a single payment.

         But you may alter the default form of payment if you act sufficiently
in advance of the triggering event. Sufficiently in advance of the triggering
event means (a) during the calendar year before the calendar year in which the
triggering event occurs and (b) at least six months before the triggering event
occurs. If you file a written form with the plan administration sufficiently in
advance of the triggering event, you may choose to have payments made in annual
installments over a period that you choose, as long as it is at least 2 years
and not more than 10 years.


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<PAGE>

         If you choose installment payments, the unpaid balance of your
entitlement will remain in the plan and will remain subject to investment
credits. The amount of each annual payment will be the balance then standing to
your credit under the plan multiplied by a fraction which is 1 divided by the
number of remaining payments.

         Please note: Before January 1, 2003, the plan required you to choose
         the form of payment on your original participation agreement, and you
         could not change the form of payment except as applied to amounts
         deferred in the future. That restriction no longer applies. The choices
         that you made on your original participation agreement will remain in
         effect on and after January 1, 2003 if you take no further action. But
         if you would like to change your choices, you may do so at any time (in
         accordance with the rules just described) with respect to both past and
         future accruals.

         YOUR BENEFICIARY. Your beneficiary is the individual or entity
designated on the last participation agreement that was completed and filed with
the administrator of the plan before your death. Please note that separation or
divorce does not automatically change your designation of beneficiary. It is
your responsibility to keep your designation current based on your current
circumstances.

         If no designated beneficiary survives you, your estate will be
considered your beneficiary. This might occur if you fail to name a beneficiary
or if all of your designated beneficiaries die before you do.

         If your beneficiary is a minor or legally incompetent, the
administrator may, in its discretion, make payment to a legal or natural
guardian, other relative, court-appointed representative, or any other adult
with whom the minor or incompetent resides. Any payment made in good faith by
the administrator will fully discharge the obligation of the plan with regard to
that payment, and the administrator will have no duty or responsibility to see
to the proper application of any such payment.

         FORFEITURES. If your employment terminates as described above under the
heading "Other termination of employment" and you are not entitled to 100% of
your company credits (and investment credits on them), the balance will be
retained on the books of the plan until you have a "Break in Service" within the
meaning of the Retirement Plan but will then be permanently forfeited.

         That is to say, if you return to employment before incurring a "Break
in Service," the forfeiture amount will remain in your account and you may be
able to earn additional entitlement to that amount with additional years of
service. But if you return after incurring a "Break in Service," the forfeiture
amount will have been removed from your account and you will never be able to
earn any additional entitlement to that amount.


                              HARDSHIP WITHDRAWALS

         INTRODUCTION. Besides deferrals to a stated date, there is one more
circumstance in which you may be able to withdraw from the plan while still
employed.

         ADMINISTRATOR'S DISCRETION. The administrator of the plan has
discretion to grant an in-service withdrawal in the circumstance where you
establish hardship. But hardship withdrawal is limited to your salary deferral
credits and stock credits (if any). That means no company credits and no
investment credits on either salary deferral credits or company credits.

         HARDSHIP. For this purpose, hardship means severe financial hardship
to you resulting from:


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<PAGE>

         o a sudden and unexpected illness or accident of you or a dependent
(within the meaning of section 152(a) of the Code),

         o loss of your property due to casualty, or

         o other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond your control.

         The need to send a child to college and the desire to purchase a home
do not qualify for a hardship withdrawal.

         AMOUNT AVAILABLE. The amount available is not more than is reasonably
necessary to satisfy the need after exhaustion of other sources such as:

         o reimbursement or compensation by insurance or otherwise,

         o liquidation of other assets (except to the extent that such
liquidation would itself create a hardship), and

         o cessation of salary deferrals under this plan.


                             ADMINISTRATION, CLAIMS
                                   AND APPEALS


         INTRODUCTION. The administrator of the plan is the Retirement Committee
appointed by the board of directors of the company. The administrator has all
rights, duties and powers necessary or appropriate for the administration of the
plan.

         CLAIMS. To claim your money (or stock) under the plan, file a written
claim with the administrator (c/o Education Management Corporation, 300 Sixth
Avenue, Pittsburgh, PA 15222). The plan administrator will respond in writing
within 90 days and, if the claim is denied, point out the specific reasons and
plan provisions on which the denial is based, describe any additional
information needed to complete the claim, and describe the appeal procedure.

         APPEAL. If your claim is denied and you disagree and want to pursue the
matter, you must file an appeal in accordance with the following procedure. You
cannot take any other steps unless and until you have exhausted the appeal
procedure. For example, if your claim is denied and you do not use the appeal
procedure, the denial of your claim is conclusive and cannot be challenged, even
in court.

         To file an appeal, write to the administrator stating the reasons why
you disagree with the denial of your claim. You must do this within 60 days
after the claim was denied. In the appeal process, you have the right to review
pertinent documents. You have the right to be represented by anyone else,
including a lawyer if you wish. And you have the right to present evidence and
arguments in support of your position.

         The administrator will ordinarily issue a written decision within 60
days. The administrator may extend the time to 120 days as long as it notifies
you of the extension within the original 60 days. The administrator may, in its
sole discretion, hold a hearing. The decision will explain the reasoning of the
administrator and refer to the specific provisions of this plan on which the
decision is based.



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<PAGE>


         DISCRETIONARY AUTHORITY. The administrator shall have and shall
exercise complete discretionary authority to construe, interpret and apply all
of the terms of the plan, including all matters relating to eligibility for
benefits, amount, time or form of benefits, and any disputed or allegedly
doubtful terms. In exercising such discretion, the administrator shall give
controlling weight to the intent of the company in establishing the plan. All
decisions of the administrator in the exercise of its appellate authority under
the plan (or in the exercise of its claims authority, absent an appeal) shall be
final and binding on the plan, the company and all participants and
beneficiaries.


                                  MISCELLANEOUS

         NO GUARANTEE OF TAX CONSEQUENCES. While the company is pleased to be
able to offer this plan for those employees who are eligible for it and wish to
take advantage of it, the plan does not qualify for any program under which the
Internal Revenue Service would issue an advance ruling or other determination on
the federal tax consequences of the plan. This is particularly true of the
feature under which the element of gain on the exercise of a stock option may be
deferred under this plan-a relatively recent innovation on which the IRS has not
yet spoken (when this edition of the plan was adopted). The company does not
guarantee the tax consequences of the plan; consult your own tax advisor.

         INTEGRATION. This plan document represents the totality of the
company's commitment to provide deferred compensation under this plan. There are
no other writings, nor are there any oral representations or understandings,
that reflect, add to, subtract from, or alter the terms of this document.

         AMENDMENT AND TERMINATION. Although the plan was not established with
the intention that it be temporary or expire on a certain date, the company
reserves the right, in its sole discretion, to amend or terminate the plan at
any time, for any reason (or no reason), without notice, retroactively or
prospectively.

         As the only exception to the foregoing authority to amend or terminate,
the company may not amend or terminate the plan in such a way as to reduce the
balance that stands to the credit of any participant as of the date of adoption
of any such amendment or termination, including salary deferral credits, company
credits, and investment credits earned up to that time.

         EXPENSES.  The expenses of the plan will be borne by the company.

         NON-ALIENATION. As required by the Internal Revenue Service, your right
to benefits under this plan is not subject in any manner to anticipation, sale,
transfer, assignment, pledge, encumbrance, attachment, garnishment or any other
type of alienation, whether initiated by you or by creditors of you or your
beneficiary. Any attempt at alienation will simply be void.

         LIMITATION OF LIABILITY. No director, officer, or other employee of the
company shall be personally liable for any action taken or omitted in connection
with this plan and its administration unless attributable to his own fraud or
willful misconduct.

         The company hereby agrees to provide insurance to, or otherwise
indemnify, every director, officer, and other employee of the company who serves
the plan in an administrative or fiduciary capacity against any and all claims,
loss, damages, expense, and liability arising from any act or failure to act in
that capacity unless there is a final court decision that the person was guilty
of gross negligence or willful misconduct.


         APPLICABLE LAW. This plan will be construed according to the law of the
Commonwealth of Pennsylvania to the extent not pre-empted by ERISA.

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