| ·   | Our diluted earnings per share (“EPS”) in 2010. |
|--------------------|-------------------------------------------------------------|

| ·   | The percentage increase in total student enrollment at our campuses as of December 31, 2010 compared to the total student enrollment at our campuses as of December 31, 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our Free Cash Flow in 2010.  Free Cash Flow is defined as our net cash flows from operating activities and any change in restricted cash, less capital expenditures, net (excluding facility purchases). |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The percentage of Employable Graduates (as defined below) from our campuses ' programs of study in the third and fourth calendar quarters of 2009 and first and second calendar quarters of 2010 who either obtain employment by December 31, 2010, or are already employed, in positions that require the direct or indirect use of skills taught in their programsof study.  “Employable Graduates” are defined in accordance with the graduate employment metrics that we are required to report by one of the accrediting commissions that accredits our institutions and include all of the graduates from our campuses, except for those graduates who: |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | have been admitted into other programs of study at postsecondary educational institutions that are scheduled to begin within one academic year following their graduation; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | possessed visas that did not permit them to work in the United States following their graduation; |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   | were personally suffering from a health condition that prevented them from working; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | were actively engaged in U.S. military service; or |
|--------------------|----------------------------------------------------|

| ·   | moved out of the Continental United States with a spouse or parent who was actively engaged in U.S. military service. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

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|  Named Executive Officer | 2010 Standard Bonus Target Percentage of Annualized Base Salary                                            |
|-------------------------------|------------------------------------------------------------------------------------------------------------|
| Kevin M. Modany               |                 100%       |
| Daniel M. Fitzpatrick         |                   65% |
| Clark D. Elwood               |                   65% |
| Eugene W. Feichtner           |                   60% |
| June M. McCormack             | 60%                                                                                                        |

| Weighted AveragePerformance Points | MaximumBonus Percentage |
|------------------------------------|-------------------------|
| 4.76 – 5.00                  | 200.0%                  |   |
| 4.51 – 4.75                  | 187.5%                  |   |
| 4.26 – 4.50                  | 175.0%                  |   |
| 4.01 – 4.25                  | 162.5%                  |   |
| 3.76 – 4.00                  | 150.0%                  |   |
| 3.51 – 3.75                  | 137.5%                  |   |
| 3.26 – 3.50                  | 125.0%                  |   |
| 3.01 – 3.25                  | 112.5%                  |   |
| 2.76 – 3.00                  | 100.0%                  |   |
| 2.51 – 2.75                  | 87.5%                   |   |
| 2.26 – 2.50                  | 75.0%                   |   |
| 2.01 – 2.25                  | 62.5%                   |   |
| 1.76 – 2.00                  | 50.0%                   |   |
| 1.51 – 1.75                  | 41.7%                   |   |
| 1.26 – 1.50                  | 33.3%                   |   |
| 1.00 – 1.25                  | 25.0%                   |   |

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| Named Executive Officer |   | 2009 Annual Bonus Amount |      |
|-------------------------|--------|--------------------------|-----------|
| Kevin M. Modany         |   | $                        | 1,450,000 |   |
| Daniel M. Fitzpatrick   |   | $                        | 396,500   |   |
| Clark D. Elwood         |   | $                        | 390,000   |   |
| Eugene W. Feichtner     |   | $                        | 330,000   |   |
| June M. McCormack       |   | $                        | 294,000   |   |

| Named Executive Officer |   | 2010 Annualized Base Salary |    |
|-------------------------|--------|-----------------------------|---------|
| Kevin M. Modany         |   | $                           | 769,000 |   |
| Daniel M. Fitzpatrick   |   | $                           | 324,000 |   |
| Clark D. Elwood         |   | $                           | 319,000 |   |
| Eugene W. Feichtner     |   | $                           | 295,000 |   |
| June M. McCormack       |   | $                           | 263,000 |   |

| ·   | for Mr. Modany, the use of a company car; |
|--------------------|-------------------------------------------|

| ·   | for Mr. Modany, an allowance to be used for tax return preparation and financial planning of up to 2% of annualized base salary as of March 29, 2010; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | for Messrs. Fitzpatrick, Elwood and Feichtner and Ms. McCormack, an allowance to be used for tax return preparation and financial planning of up to 1% of annualized base salary as of March 29, 2010; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | for each of our named executive officers: |
|--------------------|-------------------------------------------|

| ·   | tickets to sporting, theater and other events; |
|--------------------|------------------------------------------------|

| ·   | enhanced disability benefits; and |
|--------------------|-----------------------------------|

| ·   | an annual physical examination. |
|--------------------|---------------------------------|

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| ·   | an annual retainer of $60,000 payable in one installment on January 4, 2010, at the election of each non-employee Director, in cash or shares of our common stock in increments of 25% each; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | no separate meeting fees; |
|--------------------|---------------------------|

| ·   | a grant under the 2006 ITT Educational Services, Inc. Equity Compensation Plan of restricted stock units (“RSUs”) with a time-based period of restriction that: |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | has a value of $100,000, plus the value associated with any fractional RSU necessary to cause the grant to be for a whole number of RSUs, pursuant to which the value is determined based on the closing market price of a share of our common stock on the effective date of the grant; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | is effective on the tenth business day following our 2010 Annual Meeting of Shareholders; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | has a time-based period of restriction of three years; and |
|--------------------|------------------------------------------------------------|

| ·   | is settled on the first business day following the last day of the period of restriction by the delivery of one share of our common stock for each RSU in the grant. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|