Non-Qualified Stock Option Agreement dated March 1, 2012



 EXHIBIT 10.4 
 CAREER EDUCATION CORPORATION 
 2008 INCENTIVE COMPENSATION PLAN

 NON-QUALIFIED STOCK OPTION AGREEMENT 
 This STOCK OPTION AGREEMENT (this “Agreement”) dated March 1, 2012 (the “Grant Date”) is by and between Career Education Corporation, a Delaware corporation
(the “Company”), and Steven H. Lesnik (the “Grantee”). 
 In accordance with Section 6 of
the Career Education Corporation 2008 Incentive Compensation Plan, as amended (the “Plan”), and subject to the terms of the Plan and this Agreement, the Company hereby grants to the Grantee an option to purchase shares of common
stock, par value $0.01 per share, of the Company (“Shares”) on the terms and conditions as set forth below (“Option”). The Option granted hereby is not intended to constitute an Incentive Stock Option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Plan. 

To evidence the Option and to set forth its terms, the Company and the Grantee agree as follows: 

1. Grant. The Committee hereby grants the Option to the Grantee on the Grant Date for the purchase from the Company of all or any
part of an aggregate of 143,513 Shares (subject to adjustment as provided in Section 4.2 of the Plan). 
 2. Option
Price. The purchase price per Share purchasable under the Option shall be $8.63 per Share (the “Option Price”) (subject to adjustment as provided in Section 4.2 of the Plan). The Option Price is equal to 100% of the Fair
Market Value of one share of Common Stock on the Grant Date, as calculated under the Plan. 
 3. Term, Vesting and Forfeiture
of the Option. 
 (a) The Option Term shall expire on the tenth anniversary of the Grant Date. In all cases, any portion of
the Option that remains outstanding at the time of the expiration of the Option Term shall be immediately forfeited. 
 (b) The
Option shall vest in full upon the later to occur of (i) the first anniversary of the Grant Date, and (ii) satisfaction of Performance Criteria (such later occurrence, the “Vesting Date”). For the avoidance of doubt, the
Option shall be immediately forfeited and shall not vest if (A) the Grantee incurs a Termination of Service prior to the first anniversary of the Grant Date for any reason other than his death or Disability, or (B) the Performance Criteria
are not timely satisfied. For purposes of this Agreement, satisfaction of the “Performance Criteria” shall occur when the closing trading price of a Share (as reported by NASDAQ) equals or exceeds $30.00 for any 30 trading days
during any 90 calendar day period occurring between the Grant Date and the third anniversary of the Grant Date. 
 (c)
Notwithstanding the foregoing provisions of this Section 3 or the provisions of the Plan, if the Grantee incurs a Termination of Service, the following provisions shall apply: 







 (i) In the event the Grantee incurs a Termination of Service by reason of his death or
Disability following the Vesting Date, then the Option shall remain outstanding until the first to occur of (A) the third anniversary of such Termination of Service, or (B) the expiration of the Option Term. Thereafter, any portion of the
Option which remains unexercised shall be immediately forfeited. 
 (ii) In the event the Grantee incurs a Termination of
Service by reason of his death or Disability prior to the timely satisfaction of the Performance Criteria and prior to the third anniversary of the Grant Date, then the Option shall remain outstanding and shall vest in full if the Performance
Criteria are timely satisfied. If the Performance Criteria are timely satisfied, then the Option shall remain outstanding and exercisable until the third anniversary of the date the Performance Criteria are timely satisfied and any portion of the
Option that remains unexercised thereafter shall be immediately forfeited. If the Performance Criteria are not timely satisfied, then the Option shall never vest and shall be immediately forfeited upon the third anniversary of the Grant Date.

 (iii) In the event the Grantee incurs a Termination of Service for Cause, any portion of the Option that remains outstanding
at the time of such Termination of Service shall be immediately forfeited. 
 (iv) In the event the Grantee incurs a Termination
of Service for any reason other than his death, his Disability or for Cause after the first anniversary of the Grant Date but prior to the Vesting Date, then the Option shall remain outstanding and shall vest in full if the Performance Criteria are
timely satisfied. If the Performance Criteria are timely satisfied, then the Option shall remain outstanding and exercisable until the third anniversary of the date the Performance Criteria are timely satisfied and any portion of the Option that
remains unexercised thereafter shall be immediately forfeited. If the Performance Criteria are not timely satisfied, then the Option shall never vest and shall be immediately forfeited upon the third anniversary of the Grant Date. For the avoidance
of doubt, in the event the Grantee incurs a Termination of Service for any reason other than his death, his Disability or for Cause prior to the first anniversary of the Grant Date, then the terms of Section 3(b) hereof shall control.

 4. [Reserved]. 
 5. Exercise of Option. On or after the date the Option becomes exercisable, but prior to the expiration of the Option in accordance with Sections 3 above, the Option may be exercised in whole or in
part by the Grantee (or, pursuant to Section 6, by his or her permitted successor) upon delivery of the following to the Company (or any Person designated by the Company): 

(a) a written notice of exercise (which may include a notice made through any electronic system designated by the Company) which
identifies this Agreement and states the number of whole Shares then being purchased; and 
 (b) any combination of cash (or by
certified or personal check or wire transfer), and/or (i) with the approval of the Committee, Shares or Shares of Restricted Stock then owned by the Grantee in an amount having a combined Fair Market Value on the exercise date equal to the
aggregate Option Price of the Shares then being purchased, or (ii) unless otherwise prohibited by law for either the Company or the Grantee, an irrevocable authorization of a third party to sell Shares acquired upon the exercise of the Option
and promptly remit to the Company a sufficient portion of the sale proceeds to pay the entire Option Price and any tax withholdings resulting from such exercise. 

  
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 Notwithstanding the foregoing, the Grantee (or any permitted successor) shall take whatever
additional actions, including, without limitation, the furnishing of an opinion of counsel, and execute whatever additional documents the Company may, in its sole discretion, deem necessary or advisable in order to carry out or effect one or more of
the obligations or restrictions imposed by the Plan, this Agreement or applicable law. 
 No Shares shall be issued upon
exercise of the Option until full payment has been made. Upon satisfaction of the conditions and requirements of this Section 5 and the Plan, the Company, in its sole discretion, shall either (a) credit the number of Shares for which the
Option was exercised in a book entry on the records kept by the Company’s stockholder record keeper or (b) shall deliver to the Grantee (or his or her permitted successor) a certificate or certificates for the number of Shares in respect
of which the Option shall have been exercised. Upon exercise of the Option (or a portion thereof), the Company shall have a reasonable time to issue shares or credit a book entry for the Common Stock for which the Option has been exercised, and the
Grantee shall not be treated as a stockholder for any purpose whatsoever prior to such issuance or book entry. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date such Common Stock is
recorded as issued and transferred in the Company’s official stockholder records, except as otherwise provided in the Plan or this Agreement. 
 6. Limitation Upon Transfer. The Option and all rights granted hereunder shall not (a) be transferred by the Grantee, other than by will, by the laws of descent and distribution, or to a
Permitted Transferee; (b) be otherwise assigned, pledged or hypothecated in any way; and (c) be subject to execution, attachment or similar process. Any attempt to transfer the Option, other than by will or by the laws of descent and
distribution or to a Permitted Transferee, or to assign, pledge or hypothecate or otherwise dispose of the Option or of any rights granted hereunder contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the
Option or such rights, shall be void and unenforceable against the Company or any Subsidiary; provided, however, that the Grantee may designate a Beneficiary to receive benefits in the event of the Grantee’s death. The Option shall be exercised
during the Grantee’s lifetime only by the Grantee, the Grantee’s guardian, the Grantee’s legal representative or a Permitted Transferee. 
 7. Change in Control. Notwithstanding the provisions of the Plan or Section 3 above, upon a Change in Control prior to the timely satisfaction of the Performance Criteria and prior to the
third anniversary of the Grant Date, (a) the Option shall remain outstanding and shall vest in full if the Performance Criteria are timely satisfied (or, if later, on the first anniversary of the Grant Date), (b) if the Performance
Criteria are not timely satisfied, then the Option shall never vest and shall be immediately forfeited upon the third anniversary of the Grant Date. Notwithstanding the provisions of the Plan or Section 3 above, if the Grantee incurs a
Termination of Service by the Company without Cause during the two-year period following the occurrence of a Change in Control prior to the timely satisfaction of the Performance Criteria then the Option shall remain outstanding and (i) shall
vest in full if the Performance Criteria are timely satisfied and shall remain outstanding until the third anniversary of the date the Performance Criteria were timely satisfied (and any portion of the Option which thereafter remains outstanding
shall be immediately forfeited), or (ii) shall be immediately forfeited if the Performance Criteria are not timely satisfied. For the avoidance of doubt, if the Grantee incurs a Termination of Service for any reason other than by the Company
without Cause during the two-year period following the occurrence of a Change in Control, then the provisions of Section 3(d) hereof shall control, except that for this purpose, the Grantee will be treated as if he had continued to provide
service to the Company through the first anniversary of the Grant Date. 

  
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 8. Effect of Amendment of Plan. No discontinuation, modification, or amendment of the
Plan may, without the written consent of the Grantee, adversely affect the rights of the Grantee under the Option, except as otherwise provided under the Plan. 
 This Agreement may be amended as provided under the Plan, but no such amendment shall adversely affect the Grantee’s rights under the Agreement without the Grantee’s written consent, unless
otherwise permitted by the Plan. 
 9. No Limitation on Rights of the Company. The grant of the Option shall not in any
way affect the right or power of the Company to make adjustments, reclassifications, or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

 10. Rights as a Stockholder. The Grantee shall have the rights of a stockholder with respect to the Shares subject to
the Option only upon becoming the holder of record of such Shares. 
 11. Compliance with Applicable Law. Notwithstanding
anything herein to the contrary, the Company shall not be obligated to either (a) cause to be issued or delivered any certificates for Shares pursuant to the exercise of the Option, or (b) credit a book entry related to the shares issued
pursuant to the exercise of the Option to be entered on the records of the Company’s stockholder record keeper, unless and until the Company is advised by its counsel that the issuance and delivery of such certificates or entry on the records,
as applicable, is in compliance with all applicable laws, regulations of governmental authority, and the requirements of any exchange upon which Shares are traded. The Company may require, as a condition of the issuance and delivery of such
certificates or entry on the records, as applicable, and in order to ensure compliance with such laws, regulations and requirements, that the Grantee make such covenants, agreements, and representations as the Company, in its sole discretion,
considers necessary or desirable. 
 12. No Obligation to Exercise Option. The granting of the Option shall impose no
obligation upon the Grantee to exercise the Option. 
 13. Agreement Not a Contract of Employment or Other Relationship.
This Agreement is not a contract of employment, and the terms of employment of the Grantee or other relationship of the Grantee with the Company or its Subsidiaries shall not be affected in any way by this Agreement except as specifically provided
herein. The execution of this Agreement shall not be construed as conferring any legal rights upon the Grantee for a continuation of an employment or other relationship with the Company or its Subsidiaries, nor shall it interfere with the right of
the Company or its Subsidiaries to discharge the Grantee and to treat him or her without regard to the effect that such treatment might have upon him or her as a Grantee. 
 14. Withholding. If the Company is obligated to withhold an amount on account of any tax imposed as a result of the exercise of the Option, the Grantee shall be required to pay such amount to the
Company, or make arrangements satisfactory to the Company regarding the payment of such amount, as provided in Section 17 of the Plan. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the
Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Grantee. The Grantee acknowledges and agrees that he or she is responsible for the tax consequences associated with the
grant and exercise of the Option. 

  
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 15. Notices. Any communication or notice required or permitted to be given hereunder
shall be in writing, and, if to the Company, to its principal place of business, attention: Secretary, and, if to the Grantee, to the address appearing on the records of the Company. Such communication or notice shall be delivered personally or sent
by certified, registered, or express mail, postage prepaid, return receipt requested, or by a reputable overnight delivery service. Any such notice shall be deemed given when received by the intended recipient. Notwithstanding the foregoing, any
notice required or permitted hereunder from the Company to the Grantee may be made by electronic means, including by electronic mail to the Company-maintained electronic mailbox of the Grantee, and the Grantee hereby consents to receive such notice
by electronic delivery. To the extent permitted in an electronically delivered notice described in the previous sentence, the Grantee shall be permitted to respond to such notice or communication by way of a responsive electronic communication,
including by electronic mail. 
 16. Governing Law. Except to the extent preempted by federal law, this Agreement shall
be construed and enforced in accordance with, and governed by, the laws of the State of Delaware without regard to the principles thereof relating to the conflicts of laws. 
 17. Receipt of Plan. The Grantee acknowledges receipt of a copy of the Plan, and represents that the Grantee is familiar with the terms and provisions thereof, and hereby accepts the Option subject
to all the terms and provisions of this Agreement and of the Plan. The Option is granted pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and the Option shall in all respects be interpreted in accordance
with the Plan. The Committee shall interpret and construe the Plan and this Agreement, and its interpretation and determination shall be conclusive and binding upon the parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder. 
 18. Restrictive Covenants. In consideration of receiving the Option
hereunder, and as a term and condition of the Grantee’s employment with the Company, the Grantee agrees to adhere to, and be bound by, the following restrictions. The Grantee hereby acknowledges that the Grantee’s job responsibilities give
the Grantee access to confidential and proprietary information belonging to the Company and/or its subsidiaries, and that this and other confidential information to which the Grantee has access would be of value, and provide an unfair advantage, to
a competitor in competing against the Company or its subsidiaries in any of the markets in which the Company or its subsidiaries maintains schools, provides on-line education classes or otherwise conducts business. The Grantee further acknowledges
that the following restrictions will not cause the Grantee undue hardship. Consequently, the Grantee agrees that the restrictions below (the “Restrictive Covenants”) are reasonable and necessary to protect the Company’s and/or
its subsidiaries’ legitimate business interests. 
 During the Grantee’s employment with the Company and/or any of its subsidiaries
and continuing thereafter for the post-termination periods specified below, the Grantee will not, in any way, directly or indirectly, either for the Grantee or any other person or entity, whether paid or unpaid: 

(a) For twelve (12) months following Grantee’s voluntary resignation from Grantee’s employment with the Company or
Grantee’s termination from employment by the Company for Cause, accept employment with, own, manage, operate, consult or provide expert services to any person or entity that competes with the Company or any of its subsidiaries in any capacity
that involves any responsibilities or activities involving or relating to any Competing Educational Service, as defined herein. “Competing Educational Service” means any 


  
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educational service that competes with the educational services provided by the Company and/or any of its subsidiaries, including but not limited to coursework in the areas of visual
communication and design technologies; information technology; business studies; culinary arts; and health education, or any education service. The Grantee hereby acknowledges that the following organizations, among others, provide Competing
Educational Services and, should the Grantee accept employment with, own, manage, operate, consult or provide expert services to any of these organizations, it would inevitably require the use and/or disclosure of confidential information belonging
to the Company and/or its subsidiaries and would provide such organizations with an unfair business advantage over the Company: DeVry Inc., Kaplan, Inc., Apollo Group Inc., Education Management LLC, Embanet Corporation, Capella Education
Company, ITT Educational Services, Inc., Corinthian Colleges, Inc., Laureate Education, Inc. and Strayer Education, Inc. and each of their respective subsidiaries, affiliates and successors. The Grantee further acknowledges that the Company and/or
its subsidiaries provide career-oriented education through physical and web-based virtual campuses throughout the world and, therefore, it is impracticable to identify a limited, specific geographical scope for this Restrictive Covenant. For the
avoidance of doubt, if the Grantee is involuntarily terminated from employment with the Company other than for Cause, the Grantee will not be subject to any post-termination non-compete restriction under this Section 18(a). 

(b) For twelve (12) months following Grantee’s termination of employment with the Company for any reason, solicit, attempt
to solicit, assist with the solicitation of, direct another to solicit, or otherwise entice any employee of the Company or any of its subsidiaries to leave his/her employment. 
 Should the Grantee breach the terms of these Restrictive Covenants, the Company reserves the right to enforce the terms herein in court and seek any and all remedies available to it in equity and law, and
the Grantee agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Grantee breach the terms of these Restrictive Covenants, the Grantee will forfeit any right to the Option or Shares
issued hereunder, subject to the terms and conditions of the Plan, and the Grantee agrees to pay the Company’s attorneys’ fees and costs incurred in recovering the Option or Shares issued pursuant hereto. 

It is the intention of the Grantee and the Company that in the event any of the covenants contained in these Restrictive Covenants are determined to be
unreasonable and/or unenforceable with respect to scope, time or geographical coverage, the Grantee and the Company agree that such covenants may be modified and narrowed by a court, so as to provide the maximum legally enforceable protection of the
Company’s and any of its subsidiaries’ interests as described in this Agreement. 
 19. Condition to Return Signed
Agreement. This Agreement shall be null and void unless the Grantee indicates his or her acceptance of the Option and this Agreement by signing, dating, and returning this Agreement to the Company on or before March 20, 2012. 

20. Other Terms and Conditions. The foregoing does not modify or amend any terms of the Plan. To the extent any provisions of the
Agreement are inconsistent or in conflict with any terms or provisions of the Plan, the Plan shall govern. 
 [Signature Page
Follows] 

  
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 IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year
first written above. 
  

					
		 		 	CAREER EDUCATION CORPORATION
			
		 		 	 /s/ Michael J. Graham

		 		 	 Executive Vice President and Chief

Financial Officer


 ACCEPTANCE (OR REJECTION) OF AWARD BY GRANTEE 

The undersigned, the Grantee, hereby: (select one of the options below) 

 

	x	ACCEPTS the award of the Option as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.


  

	 ̈	REJECTS the award of the Option contemplated by this Agreement and forfeits all rights relating thereto. Please note that a rejection of this award has no impact on
any other award of options, restricted stock or restricted stock units you have previously received, including any restrictive covenants you are subject to pursuant to the agreement(s) governing your previous awards. 


 

					
	Date: 3/2/12	 	 	 	 /s/ Steven H. Lesnik

		 		 	(Signature of Grantee)
		 		 	Print Name: Steven H. Lesnik

 Please sign and return your signed copy of this Stock Option Agreement by March 20, 2012, to Catherine
Andersen at CEC corporate via pdf, fax or inter-office mail (CAndersen@careered.com or 847-551-7416 (fax)). Failure to do so will result in forfeiture of the award. Please retain a copy of this signed Stock Option Agreement
for your record. 

  
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