**Exhibit 10.48**

 

**Description of ITT Educational Services, Inc.’s 2009 Executive Bonus Parameters, Payment of 2008 Bonus Compensation, 2009 Executive Salaries, 2009 Executive Perquisites and 2009 Director Compensation**

 

**2009 Executive Bonus Parameters**

 

On January 19, 2009, the Compensation Committee of our Board of Directors approved the 2009 Executive Bonus Parameters (the “2009 Executive Bonus Parameters”) for participation by our executives. Bonuses payable to participants will be paid in cash and based on a formula that takes into account our ability to achieve specified targets in 2009 in each of four performance        categories, each weighted equally:

 

| **•** | Our diluted earnings per share (“EPS”) in 2009. |
|------------|-------------------------------------------------------------|

 

| **•** | The percentage increase in total student enrollment at our institutes as of December 31, 2009 compared to the total student enrollment at our institutes as of December 31, 2008. |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| **•** | Our Free Cash Flow in 2009. Free Cash Flow is defined as our net cash flows from operating activities, less: |
|------------|--------------------------------------------------------------------------------------------------------------|

 

| **•** | capital expenditures, net (excluding facility purchases); and |
|------------|---------------------------------------------------------------|

 

| **•** | any change in restricted cash. |
|------------|--------------------------------|

 

| **•** | The percentage of Employable Graduates (as defined below) from our institutes' programs of study in the third and fourth calendar quarters of 2008 and first and second calendar quarters of 2009 who either obtain employment by December 31, 2009, or are already employed, in positions that require the direct or indirect use of skills taught in their programs of                    study. Employable Graduates include all of the graduates from our institutes, 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. |
|------------|-----------------------------------------------------------------------------------------------------------------------|

 

Each target level associated with each incremental bonus percentage is progressively higher and, therefore, more of a challenge to achieve. If we applied the actual results that we achieved in 2008 with respect to each of those four performance factors to the 2009 performance categories, the weighted average performance points under the 2009 performance categories would be 3.00, for a maximum bonus        percentage of 100.0%, compared to 4.50 under the 2008 performance categories, for a maximum bonus percentage of 175.0%. We have publicly disclosed that the range of $6.25 to $6.45 is our internal goal for our 2009 EPS. The mid-point of that range is the basis for the target level associated with 2.00 performance points in the EPS performance category of the 2009 Executive Bonus Parameters.

 

The 2009 Executive Bonus Parameters establish for each participant a standard bonus target percentage of annualized base salary as of December 31, 2009, ranging from 10% to 100%, with the percentage depending on the participant’s position. The following table sets forth the standard bonus target percentage of annualized base salary as of December 31, 2009 for each of the named        executive officers under the 2009 Executive Bonus Parameters. The named executive officers are those executive officers of ours who will be included as such in the Proxy Statement for our 2009 Annual Meeting of Shareholders.

 

| **Named Executive Officer** | **2009 Standard Bonus Target**

**Percentage of Annualized Base Salary**                                   |
|-----------------------------|------------------------------------------------------------------------------------------------------------|
| Kevin M. Modany             | 100%                                                                                                       |
| Daniel M. Fitzpatrick       | 65%                                                                                                        |
| Clark D. Elwood             | 65%                                                                                                        |
| Eugene W. Feichtner         | 60%                                                                                                        |
| Glenn E. Tanner             |                   60% |

 

The maximum bonus percentage under the 2009 Executive Bonus Parameters ranges from 25% to 200% of the standard bonus target percentage of annualized base salary as of December 31, 2009 and is based on the weighted average performance points associated with the actual results achieved with respect to each performance category. To determine the weighted average performance points, the sum        of the performance points associated with the actual performance in the four performance categories will be divided by four. The following table sets forth the maximum bonus percentage associated with each range of weighted average performance points under the 2009 Executive Bonus Parameters:

 

| **Weighted Average****Performance Points** | **Maximum****Bonus 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% |   |
|                                       | 1.01 – 1.25               | 25.0% |   |
|                                            |                                 |  |  |

 

The annual bonus parameters are typically based on our primary financial and operating goals for the ensuing year. While the bonus parameters reflect our financial and operating goals, as opposed to the individual executive’s performance goals, achievement of our financial and operating goals depends on, and is affected by, each executive’s performance with respect to his or        her individual goals. The Compensation Committee may, in its sole discretion, modify the bonus parameters at any time prior to the payment of the annual bonus awards under the parameters. A participant’s annual bonus award may be more or less than the participant’s potential award as calculated under the formula. A participant’s actual annual bonus award is based on a discretionary assessment of the participant’s individual performance and contribution toward        achieving the specified targets in the four performance categories that is made by the Compensation Committee upon the recommendation of our Chief Executive Officer, except for our Chief Executive Officer’s annual bonus award, which is made by the Committee without a recommendation from our Chief Executive Officer. The total amount available for the payment of bonuses for each year is capped at an amount equal to the cumulative sum of the products of each participant’s bonus        percentage multiplied by each participant’s annualized base salary as of the end of the year.

 

**Payment of 2008 Bonus Compensation**

 

On January 19, 2009, the Compensation Committee of our Board of Directors approved the payment of a 2008 annual bonus award in cash to each of our named executive officers, as follows:

----

 

| **Named Executive Officer** | **2008 Annual Bonus Amount** |
|-----------------------------|------------------------------|
| Kevin M. Modany             | $1,181,250                   |   |
| Daniel M. Fitzpatrick       | $299,250                     |   |
| Clark D. Elwood             | $269,500                     |   |
| Eugene W. Feichtner         | $235,813                     |   |
| Glenn E. Tanner             | $145,688                     |   |

 

**2009 Executive Salaries**

 

On January 19, 2009, the Compensation Committee of our Board of Directors authorized a salary increase for our named executive officers effective March 30, 2009. The following table sets forth the annualized base salary information for each of our named executive officers as of March 30, 2009:

 

| **Named Executive Officer** | **2009 Annualized Base Salary** |
|-----------------------------|---------------------------------|
| Kevin M. Modany             | $725,000                        |   |
| Daniel M. Fitzpatrick       | $305,000                        |   |
| Clark D. Elwood             | $300,000                        |   |
| Eugene W. Feichtner         | $275,000                        |   |
| Glenn E. Tanner             | $230,000                        |   |

 

**2009 Executive Perquisites**

 

On January 19, 2009, the Compensation Committee of our Board of Directors also approved the following executive perquisites in 2009 for our named executive officers:

 

| **•** | 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 30, 2009; |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| **•** | for Messrs. Fitzpatrick, Elwood, Feichtner and Tanner, an allowance to be used for tax return preparation and financial planning of up to 1% of annualized base salary as of March 30, 2009; and |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| **•** | for each of our named executive officers: |
|------------|-------------------------------------------|

 

| **•** | tickets to sporting, theater and other events; |
|------------|------------------------------------------------|

 

| **•** | enhanced disability benefits; and |
|------------|-----------------------------------|

 

| **•** | an annual physical examination. |
|------------|---------------------------------|

 

The aggregate incremental cost to us in 2009 for providing all of the 2009 perquisites described above is not expected to exceed $125,000.

 

**2009 Director Compensation**

 

The compensation for non-employee Directors on our Board of Directors in 2009 consists of:

 

| **•** | an annual retainer of $60,000 payable in one installment on January 5, 2009, 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 2009 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. |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

We also reimburse Directors for reasonable, out-of-pocket travel expense related to attending our Board of Directors and its committee meetings and other business of the Board.