**Exhibit 10.48**

 

**Description of ITT Educational Services, Inc.’sCompensation of Directors, 2005 Executive BonusParameters, Payment of 2004 Bonus Compensation and 2005 Executive Salaries andPerquisites**

 

Compensation of Directors

 

On January 25,2005, the Company’s Board of Directors approved the following compensation fornon-employee directors, effective April 1, 2005:

 

•                  an annual retainer of $40,000;

•                  a meeting fee of $1,500 for eachmeeting of the Board of Directors attended;

•                  a meeting fee of $2,000 for eachmeeting of a standing committee of the Board of Directors attended by thechairperson of the committee; and

•                  a meeting fee of $1,500 for eachmeeting of a standing committee of the Board of Directors attended by a memberof the committee, other than the chairperson.

 

The Company’s Board ofDirectors also reaffirmed the following additional compensation fornon-employee directors who are members of the Special Committee of the Board ofDirectors:

 

•                  an annual retainer of $15,000 for thechairperson of the Special Committee;

•                  an annual retainer of $10,000 for amember of the Special Committee, other than the chairperson; and

•                  a meeting fee of $500 for eachmeeting of the Special Committee of the Board of Directors attended by a memberof the committee.

 

The Company alsoreimburses non-employee directors for reasonable out-of-pocket travel expensesincurred in connection with serving on the Company’s Board of Directors.

 

#### **2005 Executive Bonus Parameters**

#### ** **

On January 25, 2005, the Compensation Committeeof the Company’s Board of Directors approved the 2005 Executive BonusParameters (the “Bonus Parameters”) for participation by the Company’s ChiefExecutive Officer, and the Company’s Board of Directors approved the same BonusParameters for participation by the other executive officers of the Company, aswell as other vice presidents and key employees.  Bonuses payable to individual participantsare based upon a formula that takes into account the Company’s ability toachieve specified targets in 2005 in each of four performance categories, eachweighted equally:

 

•                  earnings per share (excluding workers’compensation expense and special legal and other investigation costs and anysettlements or fines paid in the U.S. Department of Justice (“DOJ”) or Officeof Attorney General for the State of California investigations, the Securitiesand Exchange commission inquiry and the securities class action and shareholderderivative lawsuits arising from the DOJ investigation);

•                  new student enrollment;

•                  total student enrollment; and

•                  graduate employment rate.

 

TheBonus Parameters establish for each participant a standard bonus targetpercentage of 2005 annual base salary, ranging from 10% to 100%, and a maximumbonus percentage ranging from 20% to 200%, with the percentage depending on theparticipant’s position within the Company. An individual participant’s bonus may be more or less than theparticipant’s potential award as calculated under the formula, depending uponthe individual participant’s personal performance and contribution towardachieving the specified targets in the four performance categories.  The

 

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total amount availablefor the payment of bonuses is capped at an amount equal to the cumulative sum ofthe products of each participant’s bonus percentage multiplied by eachparticipant’s 2005 annual base salary.

 

Bonuseswill be paid in cash.  Bonuses payableunder the Bonus Parameters are determined by the Compensation Committee, uponthe recommendation of the Chief Executive Officer, except for the ChiefExecutive Officer’s bonus, which is determined by the Compensation Committeewithout a recommendation from the Chief Executive Officer.

 

#### **Payment of 2004 Bonus Compensation**

#### ** **

On January 25,2005, the Compensation Committee approved the payment of cash bonus awards for2004 in the following amounts to the Company’s named executive officers:

 
| **Name and Principal Position**                                      | ** ** | **Bonus** | ** ** |
|----------------------------------------------------------------------|------------|-----------|------------|
|                                                                 |       |      |       |
| Rene R. Champagne                                                    |       | $         | 775,000    |   |
| Chairman and Chief Executive Officer                                 |       |      |       |
|                                                                 |       |      |       |
| Kevin M. Modany                                                      |       | $         | 198,000    |   |
| Senior Vice President and Chief Financial Officer                    |       |      |       |
|                                                                 |       |      |       |
| Clark D. Elwood                                                      |       | $         | 178,000    |   |
| Senior Vice President, General Counsel and Secretary                 |       |      |       |
|                                                                 |       |      |       |
| Martin A. Grossman                                                   |       | $         | 153,059    |   |
| Senior Vice President, Director of Marketing and  Investor Relations |       |      |       |
|                                                                 |       |      |       |
| Eugene W. Feichtner                                                  |       | $         | 146,852    |   |
| Senior Vice President, Operations                                    |       |      |       |

 

#### **2005 Executive Salaries and Perquisites**

#### ** **

On January 25, 2005, the Compensation Committeealso approved an increase, effective April 1, 2005, in the annual basesalary level of the Company’s Chief Executive Officer, and the Board ofDirectors approved an increase, effective April 1, 2005, in the annualbase salary level of the Company’s other named executive officers, to thefollowing amounts:

 
| **Name and Principal Position**                                      | ** ** | **Salary** | ** ** |
|----------------------------------------------------------------------|------------|------------|------------|
|                                                                 |       |       |       |
| Rene R. Champagne                                                    |       | $          | 530,000    |   |
| Chairman and Chief Executive Officer                                 |       |       |       |
|                                                                 |       |       |       |
| Kevin M. Modany                                                      |       | $          | 256,000    |   |
| Senior Vice President and Chief Financial Officer                    |       |       |       |
|                                                                 |       |       |       |
| Clark D. Elwood                                                      |       | $          | 230,000    |   |
| Senior Vice President, General Counsel and Secretary                 |       |       |       |
|                                                                 |       |       |       |
| Martin A. Grossman                                                   |       | $          | 196,000    |   |
| Senior Vice President, Director of Marketing and  Investor Relations |       |       |       |
|                                                                 |       |       |       |
| Eugene W. Feichtner                                                  |       | $          | 190,000    |   |
| Senior Vice President, Operations                                    |       |       |       |

 

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On January 25, 2005, the Compensation Committeealso approved the following executive perquisites for 2005 for the Company’sChief Executive Officer, and the Board of Directors approved the followingexecutive perquisites for 2005 for the Company’s other named executiveofficers:

 

•                  for the Chief Executive Officer, theuse of a leased car;

 

•                  for the Chief Executive Officer andeach Senior Vice President:

 

•                  an allowance to be used for taxreturn preparation and financial planning; and

 

•                  tickets to sporting, theater andother events.

 

The aggregate incremental cost to the Company from allof the perquisites described above is not expected to exceed $45,000.

 

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