Document:

Exh. 10.4 Admin Proc's for Exec Mgmt Annual Incentive Comp Prog 27Jan2015

Exhibit 10.4

Administrative Procedures for the
Executive Management Annual Incentive Compensation Program
under the United States Steel Corporation 2010 Annual Incentive Compensation Plan
As amended by the Compensation & Organization Committee on January 27, 2015

		
	1.
	Administration.  The Compensation & Organization Committee (the “Committee”) shall administer the Annual Incentive Compensation Program (the “Program”) under and pursuant to the authority provided in the Board of Directors’ April 27, 2010 delegation to the Committee and Section 3 of the United States Steel Corporation 2010 Annual Incentive Compensation Plan (the “Plan”).

		
	A.
	Definitions.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Plan.

		
	2.
	Participation/Eligibility.  All management employees of the Corporation, its Subsidiaries and affiliates are eligible to participate in the Program upon designation by the Committee, in the case of Covered Employees, or, in the case of other management employees, upon designation by the Chief Executive Officer. 

		
	A.
	Executive Management.  All Executive Management employees (defined as those employees whose compensation is approved or reviewed by the Committee) of U. S. Steel, its subsidiaries and affiliates designated via written notice as participants are eligible to participate (“Eligible Employees” or “Participants”).

		
	B.
	New Participants.  A Participant who was not a Participant on the first day of the Performance Period may, subject to the Committee’s discretion, become a Participant during the Performance Period, participating on a pro rata basis for the remaining portion of the period in which such Participant first becomes eligible to participate, but shall be ineligible to participate in this Program for any portion of a year during which the Participant participates in any other cash incentive or bonus plan or program; provided, however, that a Covered Employee (as defined in Section 162(m) of the Internal Revenue Code) may so participate only if he or she becomes a Participant effective not later than 90 days after the beginning of the Performance Period.

		
	C.
	Rights.  No Participant or other employee shall have any claim to be granted an Award under the Program, and nothing contained in the Program or any Award Agreement shall confer upon any Participant any right to continue in the employ of the Corporation, its Subsidiaries or affiliates or interfere in any way with the right of the Corporation, its Subsidiaries or affiliates to terminate a Participant's employment at any time.

		
	3.
	Performance Period.

		
	A.
	Calendar year.  Unless otherwise determined by the Committee at the commencement of each Performance Period, each such Performance Period shall be a calendar year.

		
	4.
	Award Pool.

		
	A.
	Amount of the Award Pool.  The amount of the award pool (the “Award Pool”) shall be established by the Committee during the first 90 days of the Performance Period, and 

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shall apply to the Section 16 officers of the Company for purposes of complying with Section 162(m) of the Internal Revenue Code.  The total amount of the Award Pool shall be the aggregate of the total Individual Maximum Awards approved by the Committee for each Section 16 officer for the Performance Period.  The “Individual Maximum Award” for purposes of these Administrative Procedures shall be the Incentive Target as defined in Section 5.01 of the Plan.

		
	B.
	Funding the Pool.  The funding of the Award Pool will be dependent on the achievement of the Threshold Corporation Performance Goal, which shall also be established by the Committee during the first 90 days of the Performance Period.  Unless otherwise determined by the Committee, the Threshold Corporation Performance Goal shall be based on total revenue, which is a permitted performance measure pursuant to Section 5.03(a) of the Plan.  If the Threshold Corporation Performance Goal is achieved, the Award Pool will be funded at the level established by the Committee with respect to the degree of attainment of the Threshold Performance Goal.  Should the Company fail to meet the Threshold Corporation Performance Goal, the Total Award Pool shall not be funded and no awards shall be made under the Plan for the Performance Period.

The Committee will use negative discretion pursuant to Section 5.05 of the Plan to reduce the amount of the Individual Maximum Award payable based on the Incentive Award Calculation Formula, as described below, and calculate the amount of the Incentive Award payable to each Participant for the Performance Period; provided further that any forfeitures or reductions, whether through exercise of downward discretion or otherwise, shall not be permitted to result in any increase in the amount of any Individual Maximum Award payable to any other Participant.

		
	C.
	Threshold Corporation Performance Goal.  The Threshold Corporation Performance Goal for the Performance Period shall be the target assigned to one or more Performance Goals, which shall be set by the Committee during the first 90 days of the Performance Period.  Unless otherwise determined by the Committee at the beginning of the relevant Performance Period, the Threshold Corporation Performance Goal will be the following objective measure:

		
	(1)
	Total Revenue.  Total Revenue shall mean the total amount of Net Sales as reported on the consolidated statements of operations of United States Steel Corporation, including net sales to related parties.  It is intended that the target for this measure and its related performance calculation be consistent with the target and performance calculations for the Segment Income, Total Income, and Cash Flow, including the Business Plan Target Segment Income, Business Plan Total Income, and Business Plan Cash Flow, such that, to the extent an asset is excluded for any reason from the target calculation for Business Plan Target Segment Income, Business Plan Total Income, and Business Plan Cash Flow, the corresponding net sales, if any, are to be excluded from the Net Sales target and performance calculations, and, if an asset is included in the target calculation for the Business Plan Target Segment Income, Business Plan Total Income, and Business Plan Cash Flow, the corresponding net sales, if any, are to be included in the Net Sales target and performance calculations.  

		
	(2)
	Adjustments.  Subject to the foregoing, the Committee may determine that changes in accounting standards or extraordinary items (as determined by the 

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independent accountants of the Corporation in accordance with generally accepted accounting principles), shall be excluded from the calculation of the Threshold Corporation Performance Goal to the extent permitted in Section 162(m) of the Code.   

		
	5.
	 
Incentive Award Determination.

		
	A.
	Incentive Award Goals.  The Committee will use negative discretion pursuant to Section 5.05 of the Plan to reduce the amount of the Individual Maximum Award payable based on the achievement of one or more Incentive Award Goals, which will be used in the Incentive Award Calculation Formula.  Unless otherwise determined by the Committee, the Incentive Award Goals shall be the following objective measures:

		
	(1)
	Segment Income and Total Income.  Segment Income shall mean, for the Performance Period, income from operations (including minority interests) for each business unit (reportable segments and other businesses).  Total Income shall mean, for the Performance Period, total consolidated income from operations (including minority interests).

Income from operations (including minority interests) for each business unit (reportable segment) and in total shall mean segment income (loss) and total income (loss) from operations as reported in the notes to the consolidated financial statements of United States Steel Corporation for the Performance Period.  

		
	(2)
	Cash Flow.  Cash Flow shall mean, for the Performance Period, earnings before interest, taxes, depreciation, depletion, and amortization (EBITDA) for consolidated worldwide operations (including minority interests), plus or minus changes in current receivables, inventories, and current accounts payable and accrued expenses, less consolidated worldwide capital expenditures.

		
	(a)
	EBITDA for consolidated worldwide operations (including minority interests) shall mean income from operations as reported in the consolidated statements of operations of United States Steel Corporation, plus or minus the effect of items not allocated to segments (excluding postretirement benefit expenses) as disclosed in the notes to the consolidated financial statements of United States Steel Corporation, plus depreciation, depletion and amortization as reported in the consolidated statements of cash flows of United States Steel Corporation.  

		
	(b)
	Changes in current receivables, inventories, and current accounts payable and accrued expenses shall mean those amounts reported on the consolidated statements of cash flows of United States Steel Corporation.

		
	(c)
	Consolidated worldwide capital expenditures shall mean capital expenditures as reported on the consolidated statements of cash flows of United States Steel Corporation.

		
	(3)
	Safety Performance.  Safety Performance, for target and actual performance purposes, shall mean the number of serious injury cases and work-related fatalities occurring during the Performance Period involving the represented and 

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non-represented employees at the properties and operations of United States Steel Corporation and its subsidiaries as contemplated by the targets set by the Committee at the beginning of the Performance Period.  A serious injury case shall mean a work-related injury that prevents an employee from returning to work for 31 or more calendar days.  Whether an employee injury or fatality is “work-related,” or not, will be determined by the Corporation’s top safety officer consistent with OSHA guidelines.
 
		
	B.
	Adjustments.  The Committee may make adjustments to the Incentive Award Goal calculations as determined by the Committee in its discretion.

		
	C.
	Setting of Individual Incentive Targets and Payout Scales.  

		
	(1)
	The Individual Incentive Target, defined as a percentage of base salary (expressed for the Participant, grade level and/or position), and the Payout Scales for all levels of performance goals shall be set by the Committee.    

		
	(2)
	The Individual Incentive Target shall be calculated by multiplying the designated target percentage by the actual base salary earned by the Participant during the relevant portions of the Performance Period.  

		
	(3)
	The Payout Scale applied to all performance goals based on the actual performance achieved will determine the payout percent applied in the Incentive Award Calculation Formula under section 6, subject to negative adjustment by the Committee and the Individual Maximum Award for the Performance Period.

		
	D.
	Assignment of Segment Income Performance Goal to Participants.  The Committee shall assign to each Participant a Segment Income performance goal representing the reportable segment’s performance for which the Participant is responsible for driving.  Participants who are “corporate staff” executives responsible for multiple segments shall be assigned a Weighted Segment Income performance goal, which shall be determined by the Committee and reflect a relative weighting of the segments for which the Participant is responsible.  Certain Participants (i.e. the Chief Executive Officer) may be assigned a Total Income performance goal.

Should a Participant’s responsibilities change during the Performance Period with respect to the segments that are supported, the Committee shall assign the established Segment, Weighted Segment, or Total Income performance goal to apply for the portion of the Performance Period related to the period for which the new responsibilities are effective.  

		
	E.
	Individual Performance.  Individual Performance relative to individual performance goals as specified in the Participant’s goal plan for the Performance Period will be assessed for each Participant by the Chief Executive Officer with input from the Participant’s direct manager following the end of the Performance Period.  The Chief Executive Officer’s Individual Performance will be assessed by the Committee with input from the full Board of Directors.  The Individual Performance assessment will impact the Participant’s calculated award as set forth under the Incentive Award Calculation Formula, however, the assessment of Individual Performance does not preclude the Committee from exercising downward discretion and/or determining that no award should be paid to a Participant for a Performance Period.

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	6.
	Incentive Award Calculation Formula.

		
	A.
	Relative weighting.  Unless otherwise determined by the Committee when establishing the Incentive Award Goals, the relative weighting assigned to each of the performance measures shall be as follows:

		
	(1)
	Segment Income/Total Income.  Segment Income/Total Income shall be weighted at 60% of the Total Corporate Payout Percent.

		
	(2)
	Cash Flow.  Cash Flow shall be weighted at 40% of the Total Corporate Payout Percent.

		
	(3)
	Individual Performance.  Individual Performance shall be applied as a modifier to the Total Corporate Payout Percent, which is the sum of the weighted Segment Income/Total Income and Cash Flow payout percentages.  The assessment of Individual Performance shall be quantified as a percentage between 50% (representing individual performance at a level of “needs improvement”) and 130% (representing individual performance at a level of “far exceeds expectations”), with 100% representing a level of “meets expectations”.

		
	(4)
	Safety Performance.  Safety Performance shall add 5% of the Individual Incentive Target value if the Safety goal is met.  If the Safety goal is not met, there shall be no impact to the award calculation.

  
		
	B.
	Calculated award.  The calculated award for each Participant shall be determined by adding the product of the Individual Incentive Target and the Total Corporate Payout Percent, modified for Individual Performance, to the product of the Individual Incentive Target and the Safety payout percent, as illustrated below:

(Individual Incentive Target x Total Corporate Payout Percent x Individual Performance modifier) + (Individual Incentive Target x Safety Performance)

		
	C.
	Maximum award level.  The maximum award level shall be 233% of the Individual Incentive Target value with achievement of the highest level of performance for the Segment Income, Total Income, Cash Flow, Individual Performance, and Safety Goals, further subject to the individual per‐employee maximum set forth in the Plan.

		
	7.
	Payout Mechanics.

		
	A.
	Payout determination.  

		
	(1)
	   Evaluation.  The Committee shall determine and certify in writing the extent to which the Threshold Corporation Performance Goal for the Performance Period was satisfied following the end of the relevant Performance Period and if satisfied, determine through the exercise of negative discretion the amount of the Incentive Award payable to each Participant.   

		
	(2)
	Calculation.

		
	(a)
	Rounding Performance Calculations.  The calculation of actual performance for each performance measure in the Incentive Award Formula shall be rounded to the nearest decimal place consistent with the 

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number of decimal places approved by the Committee at the time it set the relevant target, rounding up in the case of 5 or more and rounding down in the case of 4 or less.

		
	(b)
	Interpolation.  Interpolation will be used to determine an Incentive Award for performance that correlates to performance between the pre-determined Segment Income, Total Income and Cash Flow Performance Goals.  The interpolated payout percentages for Segment Income, Total Income and Cash Flow shall be rounded  independently to the nearest whole percentage point, rounding up in the case of 5 or more and rounding down in the case of 4 or less.

		
	(c)
	Maximum award.  No one Participant may receive more than $7 million in Incentive Awards for any one calendar year, as provided in the Plan.

		
	B.
	Form of Payout.  

		
	(1)
	   Cash and/or Common Stock.  The Committee may determine to pay the awards in the form of cash or common stock, or any combination thereof, which determination may be made on a non-uniform basis among Participants.  

		
	(2)
	   Common Stock Awards.  The determination to pay awards in the form of common stock shall be a determination to satisfy the award through shares available under the 2005 Stock Incentive Plan (or any successor plan thereto), subject to the terms and conditions of such plan, and provided that the performance period under this Program shall also count toward any minimum performance period required for an unrestricted grant of shares under such plan.

		
	(3)
	   Award Unit Determination Procedure.  If the Committee determines to pay all or a portion of an award in the form of common stock, the value of such award, or portion thereof, under this Program shall be converted into a number of shares of common stock by dividing (i) the value of such award, or portion thereof, by (ii) the Common Stock Unit Value, which is to be determined as follows:

		
	(a)
	Common Stock Unit Value.  The Common Stock Unit Value shall be equal to the Fair Market Value (as defined in the 2005 Stock Incentive Plan, or any successor plan thereto) of a share of common stock on the date of award (Date of Award).  The Date of Award shall be established prospectively by the Committee at the time it determines the award, with the goal of setting the date close in proximity to the related payroll processing date for awards under the Plan.  Unless otherwise established by the Committee, the Date of Award shall be the day prior to the date the Corporation files its report on Form 10-K with the Securities and Exchange Commission for the period ending on the last date of the relevant Performance Period.

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	(4)
	   Netting of Common Stock Shares.  To the extent permitted under the 2005 Stock Incentive Plan and unless otherwise determined by the Committee or an election with respect to a different medium of payment is offered to and elected by a Participant in accordance with procedures approved by the Company, the shares of common stock delivered in connection with any common stock award under this Program shall be net of any tax withholding obligation.

		
	8.
	Timing of Payments.  Unless otherwise determined by the Committee in its discretion, payment of Annual Incentive Compensation, if any, under this Program with respect to any Performance Period will be paid following the Committee’s determination of such Incentive Award and following the date the Corporation files its report on Form 10-K with the Securities and Exchange Commission for the period ending on the last date of relevant Performance Period; provided, however, the payment of any such award shall be paid on or before March 15 of the year following the end of the relevant calendar year Performance Period and as provided in Section 6 of the Plan.

		
	9.
	Termination of Employment.  The following provisions apply in the case of a Participant’s termination of employment during the Performance Period:

		
	A.
	Retirement, Death, or Disability.  Following a Participant’s Retirement, Death or Disability, a prorated value of such Participant’s Award may be awarded by the Committee based upon the base salary earned during the Performance Period; provided that (i) such Award is calculated and delivered following the relevant Performance Period in accordance with the terms of the Plan, (ii) the relevant Threshold Corporation Performance Goal and other performance goals are achieved, (iii) the Participant is employed for a minimum period of time determined by the Committee and (iv) the Committee retains its negative discretion with respect to such awards. 

		
	(1)
	   Retirement.  Retirement shall mean, for all purposes under the Program, the applicable Participant’s termination of employment that constitutes a separation from service under Section 409A of the Code after having satisfied the age, service and/or other requirements necessary to commence an immediate pension under either: (i) the applicable defined benefit pension plan for the Participant’s home country, regardless of whether the Participant is a participant in such pension plan, or (ii) in the case of a home country for which there is no applicable defined benefit plan, the applicable local law or regulation; provided, however, such term does not include, unless the Committee consents with knowledge of the specific facts, retirement under circumstances in which the Participant accepts employment with a company that owns, or is owned by, a business that competes with the Corporation, or its Subsidiaries or affiliates.  Further, to the extent necessary under applicable local law, Retirement may have such other meaning adopted by the Committee and set forth in the applicable Award notice. 

(2)     Disability.  Disability shall be as defined in the Plan.

		
	B.
	Resignation, Early Retirement and Other Termination.  Following a Participant’s Resignation, Early Retirement or other termination, all pending Incentive Awards are forfeited.

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	(1)
	   Early Retirement.  Early Retirement shall mean a retirement other than a Retirement. 

		
	10.
	Forfeiture and Repayment.  The Committee may determine that an Incentive Award shall be forfeited and/or any value received from the Incentive Award shall be repaid to the Corporation pursuant to any recoupment policies, rules or regulations in effect at the time of the Incentive Award.

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 Exhibit 10.1 

April 29, 2015 
 Mr. Daniel M. Fitzpatrick 

ITT Educational Services, Inc. 
 13000 N. Meridian Street 

Carmel, Indiana 46032 
 Dear Mr. Fitzpatrick: 

This letter agreement (this “Agreement”) is intended to set forth our mutual understanding and agreement regarding your
resignation as Executive Vice President and Chief Financial Officer of ITT Educational Services, Inc. (collectively with its subsidiaries, affiliates, successors and assigns, the “Company”) and the transition of your
responsibilities in connection with such employment separation. 
 Accordingly, you and the Company agree as follows: 

1. Transition Period; Duties and Responsibilities. You shall remain employed by the Company as its Executive Vice President, Chief
Financial Officer (or, if determined by the Company’s Board of Directors (the “Board”), in the position of Special Advisor to a successor Chief Financial Officer or any person authorized by the Company to act in such capacity
(the “New CFO”)) during the six-month period immediately following the date hereof; provided, however, that the Company may extend such six-month period in increments of one month each (each a “Extended Month”) up
to a maximum of four additional Extended Months by providing you with written notice of such extension at least ten (10) days prior to the end of the then applicable term. Such six month period of time, together with any applicable Extended
Months, is referred to as the “Transition Period.” The Company may terminate your employment at any time prior to the end of the Transition Period by providing written notice of termination to you. Your duties during the Transition
Period shall consist of your duties as of the date hereof, as well as providing support and assistance to the Board and the Company’s Chief Executive Officer and assisting the Company in its search for a New CFO. You shall devote such time as
is necessary for the diligent and faithful performance of your duties and such other matters assigned to you by the Board and the Company’s Chief Executive Officer during the Transition Period. During your employment, you (a) will not,
except with the Company’s written consent, engage in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage; (b) will not engage, directly or indirectly, in any activity
that is competitive with the Company’s business in any respect or make any preparations to engage in any competitive activities; and (c) will not take any action that deprives the Company of any business opportunities or otherwise act in a
manner that conflicts with the best interests of the Company or that is detrimental to the business of the Company. 

  
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 2. Compensation. 

(a) During the period you are employed under this Agreement, (1) you shall continue to receive your current cash compensation (including
salary and, to the extent applicable, any short-term compensation payment for which you qualify pursuant to written terms of the 2015 Short Term Compensation Parameters (the “STC Parameters”) in the event you remain an employee of the
Company and a participant under the terms of STC Parameters as of the payment date of any short-term compensation payable under the STC Parameters)), and (2) you may continue to participate in the Company’s employee benefit plans in which
you participate as of the date hereof, provided you continue to satisfy eligible requirements applicable under the written terms of those plans. The only equity-based compensation you shall be entitled to receive during the Transition Period shall
be (i) a stock option grant to acquire 15,000 shares of the Company’s common stock, which stock option shall have an exercise price equal to the closing price of a share of the Company’s common stock on the effective grant date and
shall vest in thirds on the first, second and third anniversaries of the effective grant date; and (ii) a grant of 6,750 restricted stock units, which shall vest in thirds on the first, second and third anniversaries of the effective grant
date, and, in each case, having such other terms and conditions as are set forth in the Company’s standard form of award agreements. The effective grant date for these equity awards will be the third trading day following the date that the
Company becomes current in its filings with the Securities and Exchange Commission (the “SEC”) (unless within that three trading day period, the Company again becomes no longer current in its filings with the SEC). 

(b) If the Company terminates your employment during the Transition Period other than for Cause (as defined below), you will be entitled to
receive a lump sum payable thirty (30) days after your employment termination equal to the base salary that would have otherwise been payable to you during the remainder of the Transition Period had your employment not terminated (the
“Severance Payment”). Notwithstanding the foregoing, you shall only be entitled to receive the Severance Payment if you satisfy the Release of Claims requirement described in Section 7 below. For purposes of this Agreement,
“Cause” means any action by you involving willful malfeasance or your failure to act involving material nonfeasance that would have a materially adverse effect on the Company. An act or omission shall not be considered
“willful” unless it is done or omitted in bad faith or without reasonable belief that the action or omission was in the interest of the Company. 

3. Separation Date. 
 (a)
Effective as of the termination of your employment for any reason (the “Separation Date”), you shall resign from, and will be deemed to have resigned from, all positions and offices with the Company that you then hold. 

(b) Upon the Separation Date, the Company shall pay or provide to you (i) an amount in cash equal to your earned but unpaid base salary
through the Separation Date, payable on the next regular payroll date after the Separation Date, (ii) any unreimbursed business expenses as of the Separation Date, payable in accordance with the Company’s expense

  
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reimbursement policy, and (iii) your earned and vested amounts, entitlements or benefits (including any deferred compensation) as of the Separation Date determined and payable in accordance
with the terms of the applicable plans, programs, arrangements or agreements of the Company. Without limiting the generality of the foregoing, you expressly acknowledge and agree that you are not entitled to receive any severance pay or separation
benefits if you voluntarily terminate your employment before the expiration of the Transition Period. 
 4. Consulting Period. 

(a) Provided that you remain employed until the expiration of the Transition Period, or in the event the Company terminates your employment
without Cause prior to the expiration of the Transition Period, and in either event subject to your satisfaction of the Release of Claims requirement described in Section 7 below and your compliance with your obligations under Section 5
and Section 6, upon the Separation Date you shall assume the responsibilities of a consultant to the Company performing consulting services (the “Consulting Services”) for the 18 month period immediately following the
Separation Date (the “Consulting Period”) in accordance with, and subject to the terms and conditions of, the Consulting Agreement described in Section 4(e) below. For the avoidance of doubt and subject to your obligations
pursuant to Section 5 and Section 6, the Company acknowledges and agrees that you will be permitted to seek and/or obtain new employment during the Consulting Period and that the Consulting Services will be performed at such times and in
such locations as are reasonably convenient to you, taking into account your other professional and personal commitments. For avoidance of doubt, you shall not be entitled to enter into the Consulting Agreement with the Company if you voluntarily
terminate your employment with the Company prior to the expiration of the Transition Period. 
 (b) During the Consulting Period, any
outstanding Company equity-based awards that you hold as of the Separation Date, including but not limited to the equity grants described in Section 2 above, will remain outstanding during the Consulting Period and continue to vest (and, as
applicable, remain exercisable) in accordance with their terms so long as you remain available to perform the Consulting Services during the Consulting Period. Provided that you remain available to perform the Consulting Services during the
Consulting Period, the last day of the Consulting Period shall be deemed to be the date that your service terminates for purposes of such awards. 

(c) For the avoidance of doubt, you and the Company hereby acknowledge that the Separation Date is expected to constitute a “separation
from service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (“Section 409A”). In furtherance of the preceding sentence, you and the Company agree
that the level of Consulting Services that you will perform after the Separation Date will not exceed the maximum level that is presumed to result in a “separation from service” in accordance with Treasury Regulation
Section 1.409A-1(h)(1)(ii). Your status during the Consulting Period shall be that of an independent contractor and not, for any purpose, that of an employee or agent with authority to bind the Company in any respect. 

(d) Provided that you remain employed until the expiration of the Transition Period, or in the event the Company terminates your employment
without Cause prior to the 

  
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expiration of the Transition Period, and in either event subject to your satisfaction of the Release of Claims requirement described in Section 7 below and your compliance with your
obligations under Section 5 and Section 6, on the next regular payroll date immediately following the date on which the Release (as defined in Section 7) becomes effective and irrevocable, the Company shall pay you a lump-sum payment
in cash equal to eighteen (18) times the monthly COBRA premium that, as of the Separation Date, is charged to COBRA qualified beneficiaries for the same coverage options and levels of medical, prescription drug, dental and vision coverage that
was in effect for you under the Company’s group health plans (medical, prescription drug, dental and vision) immediately prior to the Separation Date. 

(e) Prior to the commencement of the Consulting Period, you and the Company shall enter into a consulting agreement in the form of the
Consulting Agreement attached hereto as Exhibit A. 
 5. Restrictive Covenants. 

(a) Non-Disclosure of Confidential Information. (i) You acknowledge that (A) the Company is engaged in a highly competitive
business, (B) you have served the Company in an executive capacity, (C) you have had access to and have gained knowledge of substantial trade secrets and confidential information of the Company and (D) the covenants and restrictions
contained in this Agreement are reasonably necessary to protect the legitimate interests of the Company. 
 (ii) For purposes of this
Agreement, “Confidential Information” means any and all of the Company’s trade secrets, confidential and proprietary information and all other non-public information and data of or about the Company and its business, including,
but not limited to, confidential business methods and processes, research and development information, business plans and strategies, marketing plans and strategies, information pertaining to customers, pricing information, cost information,
financial information, personnel information, contract information, data compilations, information received from third parties that the Company is obligated to keep confidential, and information about prospective products or services, whether or not
reduced to writing or other tangible medium of expression, including work product created by you in rendering services for the Company. 

(iii) You acknowledge that the Confidential Information is a valuable, special and unique asset of the Company. During your employment with
the Company and thereafter, you will not use or disclose to others any of the Confidential Information, except (A) in the course of your work for and on behalf of the Company, (B) with the prior written consent of the Company, (C) as
required by law or judicial process, provided you promptly notify the Company in writing of any subpoena or other judicial request for disclosure involving confidential information or trade secrets, and cooperate with any effort by the Company to
obtain a protective order preserving the confidentiality of the Confidential Information or trade secrets, or (D) in connection with your reporting possible violations of law or regulations to any governmental agency or making other disclosures
protected under any applicable whistleblower laws. You agree that the Company owns the Confidential Information and you have no rights, title or interest in any of the Confidential Information. Except as otherwise agreed by the Company in writing,
upon the Separation Date, you will immediately deliver to the Company 

  
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any and all materials (including all copies and electronically stored data) containing any Confidential Information in your possession or subject to your custody or control. Your non-disclosure
obligations hereunder shall continue as long as the Confidential Information remains confidential, and shall not apply to any information which becomes generally publicly available through no fault or action of your own or others who were under
confidentiality obligations with respect to such information. 
 (b) Non-Competition. (i) During the 18 month period following
the Separation Date (the “Restricted Period”), you shall not be employed by, work for, consult with, lend assistance to, or engage in any Competitive Business (as defined below) within the United States (A) in the same or
similar capacity or function to that in which you worked for the Company, (B) in any executive or managerial capacity, (C) in any consulting capacity or function or (D) in any other capacity in which your knowledge of the
Company’s Confidential Information would facilitate or support your work for the Competitive Business. 
 (ii) You acknowledge that
the foregoing restriction is reasonable given (A) the position in which you have been employed with the Company, (B) the Company’s business is national in scope and (C) you, for or on behalf of a Competitive Business, could
compete effectively with the Company from any location in the United States. 
 (iii) Notwithstanding the restrictions contained in this
Section 5(b), if a Competitive Business has multiple divisions, units or segments, some of which are not engaged in providing post-secondary education, you may work for or consult with only that division, unit or segment that is not engaged in
providing post-secondary education; provided that (A) you first provide the Company with a written notice describing in reasonable detail your position with and anticipated activities for the Competitive Business, which written notice
also includes an assurance that your affiliation with and work for the Competitive Business shall relate only to the non-competitive division, unit or segment and shall not involve any activities that are competitive with the Company, and
(B) your affiliation with and/or work for the non-competitive division, unit or segment of the Competitive Business would not likely cause you to inevitably use and/or disclose any Confidential Information. 

(iv) For purposes of this Agreement, “Competitive Business” means any for-profit entity that is engaged in the business of
providing post-secondary education with annual revenues of at least $100 million and that is competitive with the business of the Company. 

(c) Non-Solicitation. (i) During the Restricted Period, you shall not (A) solicit, recruit or attempt to hire or employ any
person who is an employee of the Company, (B) assist any person or entity in the recruitment or hiring of any person who is an employee of the Company, (C) urge, induce or seek to induce any person to terminate his or her employment with
the Company or (D) advise, suggest to or recommend to any person or entity that it employ or solicit for employment any person who is an employee of the Company. 

(ii) During the Restricted Period, you will not urge, induce or seek to induce any of the Company’s customers, independent contractors,
subcontractors, consultants, business partners, licensors, licensees, vendors, suppliers or others with whom the Company has 

  
 - 5 - 

 
a business relationship to terminate their relationship with, or representation of, the Company, or to cancel, withdraw, reduce, limit or in any manner modify any such person’s or
entity’s business with, or representation of, the Company. 
 (d) Non-Disparagement. For a period of thirty-six (36) months
following the date hereof, you shall not make or publish any statements or comments that disparage or injure the reputation or goodwill of the Company, or any of its or their respective officers or directors, or otherwise make any oral or written
statements that a reasonable person would expect at the time such statement is made to likely have the effect of diminishing or injuring the reputation or goodwill of the Company or any of its or their respective officers or directors;
provided, however, that nothing herein shall prevent you from (A) making or providing any truthful disclosures or information to a governmental agency or entity, including without limitation in connection with a complaint by you
against the Company or the investigation of any complaint against the Company or (B) providing any truthful information that may be required by law. 

(e) You acknowledge and agree that the covenants contained in this Section 5 prohibit you from engaging in certain activities on your own
behalf or on behalf of or in conjunction with any person or entity, regardless of whether you are acting as an employee, owner, independent contractor, consultant or advisor and regardless whether your are acting directly or indirectly. 

(f) In the event that you violate any covenant contained in this Section 5, the duration of such covenant shall automatically be extended
by the length of time during which you were in violation of such covenant, including, but not limited to, an extension for the period from the date of your first violation until an injunction is entered enjoining such violation. 

(g) You agree to the Company filing with the Securities and Exchange Commission a Form 8-K with respect to the termination of your employment
with the Company and your resignation as described in Section 1 above, which 8-K shall disclose the fact that such termination has occurred by our mutual agreement in connection with your planned resignation as CFO. Nothing herein shall limit
any communication you may have with your legal advisor, nor by the Company with its legal advisor and independent registered audit firm, provided that you and Company, as applicable, will cause them to comply with this Section 5(g). Further,
nothing shall limit your duty to respond to any request by the Company’s Board of Directors or a committee thereof, any attorney representing the Company, or in response to a lawfully issued subpoena from a court or agency of competent
jurisdiction, provided that in the event you receive such a subpoena you shall provide notice to the Company within two days of receipt thereof to enable the Company to move to quash, or otherwise limit such subpoena. Further, you agree not to
oppose any action by the Company in connection with any such subpoena. 
 (h) Severability. If any provision of this Agreement, or
the application of any provision of this Agreement to any person or circumstance, is, for any reason and to any extent, held invalid or unenforceable, such invalidity and unenforceability will not affect the remaining provisions of this Agreement of
its application to other persons or circumstances, all of which will be enforced to the greatest extent permitted by law; and you and the Company agree that any invalid or unenforceable provision may and will be reformed and applied to the extent
needed to avoid that invalidity or unenforceability and in a manner that is as similar as possible to the intent of yourself and the Company (as described in this Agreement) and preserves the essential economic substance and effect of this
Agreement. 

  
 - 6 - 

 (i) Injunctive Relief. You acknowledge that any violation of the restrictions contained in
this Agreement may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law and that such violation may result in irreparable and continuing harm to the Company. Accordingly, you agree
that, in addition to any other remedy that the Company may have at law or in equity, the Company shall be entitled to injunctive relief to restrain any violation by you of the restrictions contained in this Agreement. 

6. Cooperation. From and after the date hereof, you agree and covenant that if the Company desires you to provide any information or
testimony relating to any judicial, administrative or other proceeding involving the Company, you will cooperate in making yourself reasonably available for such purposes and will provide truthful information and/or testimony. Should you be served
with a subpoena or notice of deposition in any legal proceeding relating to the Company, you agree to (a) inform the Company immediately of the subpoena or notice of deposition, (b) reasonably cooperate with the Company and its attorneys
in responding to such subpoena or notice of deposition and in preparing for any hearings, depositions or other formal process by which evidence is taken or received and (c) provide truthful testimony in response to questions that are within the
scope of proper discovery. The Company agrees to reimburse you for all necessary and reasonable out-of-pocket expenses you incur in connection with providing the aforementioned cooperation or responding to a subpoena or notice of deposition. For the
avoidance of doubt, with respect to cooperation requested of you, or responding to a subpoena or notice of deposition, you shall be entitled to the advancement of legal fees and expenses, and to your rights to indemnification, as set forth in
section 8. 
 7. Release of Claims. You shall execute irrevocably and deliver to the Company a release of claims in the form attached
hereto as Exhibit B (the “Release”) prior to the 21st day after the Separation Date. In the event you do not execute irrevocably and deliver to the Company the Release within such time period, or any proceeding, action, claim
or demand is brought in breach of the Release after its execution by you, you shall be deemed to have terminated the Consulting Period and, for the avoidance of doubt, you shall not be entitled to any of the amounts provided in Section 2(b),
Section 4(b) and Section 4(d) above and any unvested equity-based compensation awards held by you shall be immediately forfeited. 

8. Indemnification. Nothing in this Agreement shall affect your rights to indemnification, or advancement of legal fees and expenses,
from the Company under the Company’s articles of incorporation, by laws or existing D&O insurance policies for acts or omissions that occurred or may occur while you were or are an officer of the Company, and you at no time shall have any
lesser rights to indemnification/advancement that any director or officer of the Company as may exist from time to time. 
 9. Return of
Company Property. You shall continue to have use of your Company-provided electronic devices and equipment during the Transition Period and, to the extent set forth in the following sentence, the Consulting Period. Upon the expiration of the
Consulting Period (or such earlier date as determined by the Company in its sole discretion), you shall promptly return all materials in any form acquired by you as a result of your employment with, or provision of Consulting Services to, the
Company, and all property of the Company. 

  
 - 7 - 

 10. Clawback. You acknowledge that the amounts paid to you by the Company, including
amounts payable pursuant to this Agreement, may be subject to recoupment or clawback pursuant to the Sarbanes-Oxley Act of 2002, the Dodd–Frank Wall Street Reform and Consumer Protection Act or other applicable law, and you agree to repay such
amounts to the extent required thereunder. 
 11. No Mitigation. You shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided under this Agreement be reduced by any compensation or benefits earned by you as a result of employment by another
employer or by retirement benefits. 
 12. Reimbursement of Attorney’s Fees for Review of this Agreement. The Company agrees to
reimburse you for your reasonable legal fees and costs incurred in retaining legal counsel of your choice to review this Agreement. 
 13.
General Provisions. 
 (a) Your Representation. You hereby represent and warrant that you are an experienced senior executive
knowledgeable about the matters (and their effect) within the purview of this Agreement and are not under any contractual or legal restraint that prevents or prohibits you from entering into this Agreement or performing the duties and obligations
described in this Agreement. 
 (b) Modification or Waiver; Entire Agreement. No provision of this Agreement may be modified or
waived except in a document signed by you and a person authorized by the Board. Failure to insist upon strict compliance with any term of this Agreement will not be considered a waiver of any such term or any other term of this Agreement. This
Agreement contains the entire agreement of you and the Company with respect to the subject matter hereof, and except as otherwise set forth herein, supersedes all prior agreements, promises, covenants, arrangements, communications, representations
and warranties between you and the Company, whether written or oral, with respect to the subject matter hereof. 
 (c) Governing Law;
Dispute Resolution. The validity, construction and interpretation of this Agreement and the rights and duties of you and the Company hereunder will be governed by the laws of the State of Indiana without reference to the Indiana choice of law
rules. You and the Company agree that any legal action relating to this Agreement, your employment with the Company or the termination of your employment shall be commenced and maintained exclusively before any appropriate state court of record in
Hamilton County, Indiana, or in the United States District Court for the Southern District of Indiana, Indianapolis Division; further, you and the Company hereby irrevocably submit to the jurisdiction and venue of such courts and waive any right to
challenge or otherwise object to personal jurisdiction or venue in any action commenced or maintained in such courts; provided, however, the foregoing shall not affect any applicable right you or the Company may have to remove a legal action to
federal court. You and the Company hereby waive, to the fullest extent permitted by applicable law, any right you or it may have to a trial by jury in respect of any dispute arising directly or indirectly out of, under or in connection with this
Agreement. 

  
 - 8 - 

 (d) Survival. You and the Company agree that the covenants and promises set forth in this
Agreement will survive the termination of this Agreement and continue in full force and effect after this Agreement terminates to the extent that their performance is required to occur after this Agreement terminates. 

(e) Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 
 If to you: 

To the most recent address on file with the Company 

If to the Company: 
 ITT
Educational Services, Inc. 
 13000 North Meridian Street 

Carmel, IN 46032-1404 

Attention: Chairman of the Compensation Committee 

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall
be effective when actually received by the addressee. 
 (f) Miscellaneous. (i) You may not assign any right or interest to, or
in, any payments payable under this Agreement until they have become due from the Company; provided, however, that this prohibition does not preclude you from designating in writing one or more beneficiaries to receive any amount that
may be payable after your death and does not preclude the legal representative of your estate from assigning any right under this Agreement to the person or persons entitled to it. 

(ii) This Agreement will be binding upon and will inure to your benefit, the benefit of your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees and the Company and its successors. The services to be provided by you to the Company hereunder are personal to you, and you shall not have the right to assign this Agreement or
any of your rights or obligations under this Agreement. 
 (iii) The headings in this Agreement are inserted for convenience of reference
only and will not be a part of or control or affect the meaning of any provision of the Agreement. 
 (iv) It is intended that the
provisions of this Agreement comply with Section 409A, and all provisions of this Agreement shall be construed and interpreted in a manner consistent so that no payments made to you under this Agreement or otherwise constitute

  
 - 9 - 

 
a deferral of compensation or, if so, will constitute a deferral for which the payment and other terms are compliant with Section 409A so as to avoid imposition of any additional tax to you
under Section 409A. Neither you nor any of your creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A) payable under this Agreement to any anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to you or for your benefit under this Agreement may not be
reduced by, or offset against, any amount owing by you to the Company. If, at the time of your separation from service (within the meaning of Section 409A), (i) you are a “specified employee” (within the meaning of
Section 409A and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable under this agreement constitutes deferred compensation
(within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then the Company shall not pay
such amount on the otherwise scheduled payment date, but shall instead accumulate such amount and pay it, without interest, on the first business day after such six-month period. For purposes of Section 409A, each payment hereunder will be
deemed to be a separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii). Except as specifically permitted by Section 409A, the benefits and reimbursements provided to you under this Agreement during any calendar
year shall not affect the benefits and reimbursements to be provided to you under the relevant section of this Agreement in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other
benefit. Further, reimbursement payments shall be made to you as soon as practicable following the date that the applicable expense is incurred, but in no event later than the last day of the calendar year following the calendar year in which the
underlying expense is incurred. 
 (v) All payments made to you or on your behalf under this Agreement will be reduced by any amount that
the Company is required by law to withhold in advance payment of your federal, state and local income, wage and employment tax liability. 

(g) Successors to Company. This Agreement may and will be assigned or transferred to, and will be binding upon and will inure to the
benefit of, any successor of the Company, and any successor will be substituted for the Company under the terms of this Agreement. As used in this Agreement, the term “successor” means any person, firm, corporation or business entity which
at any time, whether by merger, purchase or otherwise, acquires all or essentially all of the assets of the business of the Company. Notwithstanding any assignment, the Company will remain, with any successor, jointly and severally liable for all
its obligations under this Agreement. 
 (h) Authority. The Company represents that it is authorized to enter into and take the
actions set forth in this Agreement. 
 (i) Execution in Counterparts. This Agreement may be executed in counterparts (including by
facsimile or by PDF), and by the parties hereto in separate counterparts, each of which shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement (and all signatures need not appear on any one
counterpart), and this Agreement shall become effective when one or more counterparts has been signed and delivered by each of the parties hereto. 

  
 - 10 - 

 If the foregoing accurately reflects our agreement, please sign and return to us the enclosed duplicate copy of
this letter. 
  

	
	 /s/ Kevin M. Modany

	NAME: Kevin M. Modany
	TITLE: CEO
	
	Date:
	 4/29/15

 

			
	Accepted and Agreed to:
	
	 /s/ Daniel M. Fitzpatrick

	Daniel M. Fitzpatrick
		
	Date:		 4/29/15

  
 - 11 - 

 Exhibit A 

CONSULTING AGREEMENT 

This Consulting Agreement (this “Agreement”) is entered into as of
            , 2015 (“Effective Date”), by and between ITT Educational Services, Inc. (the “Company”), and Daniel M. Fitzpatrick
(“Consultant”) (the Company and Consultant will sometimes hereinafter be referred to collectively as the “parties” and singularly as a “party”). 

Recitals 

A. Consultant has been employed with the Company pursuant to that certain letter agreement dated April 29, 2015 (the
“Letter Agreement”). Consultant’s employment with the Company ended on the end of the Applicable Period (the “Employment Termination Date”) as set forth in the Letter Agreement. 

B. Consultant possesses valuable confidential information and knowledge regarding the Company’s business. 

C. The Company desires to engage Consultant and Consultant desires to be engaged by the Company to render consulting services on an
independent contractor basis to assist with an orderly transition of certain business matters Consultant previously was handling as an employee of the Company and certain other consulting services upon the terms and conditions set forth in this
Agreement. 
 Agreement 

In consideration of the foregoing recitals, the covenants and promises herein provided, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and Consultant agree as follows: 
 1. Consulting Services. 

a. The Company hereby engages Consultant as an independent contractor to provide business consulting services to the Company,
and Consultant hereby accepts such engagement as an independent contractor, upon the terms and conditions set forth in this Agreement. During the Term of this Agreement, Consultant will provide general business consulting services as requested by
the Company (the “Consulting Services”). 
 b. The Company acknowledges and agrees that Consultant will be
permitted to provide the Consulting Services to the Company indirectly through a wholly-owned consulting entity; provided that the Consulting Services shall be performed by Consultant personally. Consultant may designate that the consulting
fees described in Section 4 below shall be paid to his wholly-owned consulting entity by providing the Company with prior written notice. 

c. Except for participation in meetings as may be requested by the Company, Consultant will provide the Consulting Services
from any location(s) he chooses. 

  
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 d. The exact number of days Consultant performs Consulting Services in a given
month will vary depending on various factors. 
 e. Other than the obligations and restrictions expressly contained in this
Agreement, nothing contained herein shall prohibit Consultant from performing services for other persons or entities during the term of this Agreement. 

f. Consultant agrees to use Consultant’s best efforts in providing the Consulting Services under this Agreement. 

g. Consultant shall have sole discretion and responsibility for the selection of procedures, processes, materials, working
hours, and other incidents of performance of the Consulting Services under this Agreement. Although the Company may specify the results it desires Consultant to achieve in rendering the Consulting Services and may control Consultant in that regard,
the Company shall not have the right or power to exercise the control over Consultant as would indicate or establish that a relationship of employer and employee exists between the Company and Consultant. 

h. Consultant agrees, and will ensure, that Consultant’s performance of the Consulting Services under this Agreement will
comply with all legal requirements of any kind, including, but not limited to, compliance with all applicable federal, state and/or local laws and regulations. 

i. During the Term of this Agreement, Consultant will not (i) engage in any activity, business or employment that is
competitive with the business of the Company or any of its affiliates, or (ii) take any action or make any omission that is detrimental to the business of the Company or any of its affiliates. 

j. Consultant represents and warrants to the Company that he has no existing obligation or commitment that conflicts with, or
would preclude him from performing his responsibilities under, this Agreement, and he agrees not to enter into any such conflicting obligation or commitment. 

2. Term. The term of this Agreement shall be for a period of eighteen (18) months commencing as of the Effective Date and
ending eighteen (18) months after the end of the Applicable Period (“Expiration Date”), unless terminated earlier in accordance with Section 3 (the “Term”).  

3. Termination. Notwithstanding any other provision of this Agreement, this Agreement may be terminated before the Expiration
Date as follows: 
 a. This Agreement may be terminated at any time by mutual written agreement of the parties. 

b. This Agreement shall terminate immediately on the death of Consultant. 

  
 2 

 4. Compensation. During the Term, the Company will compensate Consultant on a
monthly fee basis at the rate of $34,333.33 per month. The Company shall pay such monthly consulting fee to Consultant within five days of the end of each applicable month during the Term. Such consulting fee shall be prorated for any partial month.
 
 5. Expenses. All expenses and disbursements incurred by the Consultant in connection with the Consultant’s
rendering of services under this Agreement will be the sole responsibility of the Consultant; provided, however, the Company will reimburse Consultant, in a manner consistent with the Company’s policy regarding travel and entertainment expense
reimbursement, for (a) necessary and reasonable out-of-pocket travel expenses, including without limitation airfare, ground transportation, lodging and meal expenses, incurred by Consultant in rendering services to the Company under this
Agreement and (b) any other necessary and reasonable expenses which are approved in advance by the Company. Consultant must submit an itemized written account and receipts acceptable to the Company within sixty (60) days after the expenses
have been incurred with respect to any expenses for which Consultant seeks reimbursement. 
 6. Relationship of
Parties. The parties acknowledge and agree that all of the services to be provided by Consultant under this Agreement shall be performed by Consultant as an independent contractor, and not as an employee, agent, partner, or joint venturer of
Company. Consultant does not have, nor shall Consultant hold himself out as having any right, power or authority to create any contract or obligation, expressed or implied, on behalf of, in the name of, or binding on the Company unless a duly
authorized officer of the Company shall consent thereto in writing. Consultant acknowledges and agrees that Consultant is not eligible to participate in any employee benefit plans or programs of the Company; provided, however, nothing herein is
intended to affect Consultant’s vested rights, if any, as a former employee of the Company in any of the Company’s employee benefit plans.  

7. Assumption of Risk. The parties acknowledge and agree that the services to be performed by Consultant under this Agreement
are to be performed by Consultant at Consultant’s own risk and that Consultant assumes all responsibility for any injuries that may result from Consultant’s performance of services under this Agreement. 

8. Taxes. The parties acknowledge and agree that Consultant will be solely and completely responsible for any and all taxes due
and owing to any governmental entity or agency (federal, state and/or local) on any monies or compensation received by Consultant from the Company under this Agreement. Consultant will pay all taxes arising from Consultant’s receipt of
compensation under this Agreement, including, but not limited to, any self-employment taxes, and shall hold the Company and its officers, directors and employees harmless from any liability arising from Consultant’s failure to comply with the
foregoing provisions of this sentence. 
 9. Company Property and Proprietary Rights. All work performed by the Consultant
under this Agreement, and all inventions, discoveries, materials, products and deliverables developed or prepared for the Company by the Consultant under this Agreement (collectively, the “Works”), are the property of the Company
and all title and interest therein shall vest in the Company and shall be deemed to be a work made for hire and made in the 

  
 3 

 
course of the services rendered hereunder. To the extent that title to any such Works may not, by operation of law, vest in the Company or such Works may not be considered works made for hire,
all rights, title and interest therein are hereby irrevocably assigned by the Consultant to the Company. All such Works shall belong exclusively to the Company, with the Company having the right to obtain and to hold in its own name, patents,
copyrights, trademarks, registrations or such other intellectual property protections as may be appropriate to the subject matter, and any extensions and renewals thereof. The Consultant agrees to give the Company and any person designated by the
Company, reasonable assistance, at the Company’s expense, required to establish or perfect any intellectual property rights relating to any Works. Consultant acknowledges and agrees that all tangible materials, equipment, documents, copies of
documents, data compilations (in whatever form), and electronically created or stored materials that Consultant receives or makes in the course of Consultant’s engagement with the Company are and shall remain the property of the Company. Upon
the Company’s request or upon the termination of this Agreement, Consultant shall immediately deliver to the Company all Works and other materials that Consultant created or received in rendering services under this Agreement. Notwithstanding
any other provision of this section to the contrary, this section does not apply to an invention for which no equipment, supplies, facility, or Confidential Information of the Company was used and which was developed by Consultant entirely on
Consultant’s own time unless: (a) the invention relates (i) to the business of the Company, or (ii) to the Company’s actual or demonstrably anticipated research or development; or (b) the invention results from any work
performed by Consultant for the Company. 
 10. Non-Disclosure of Confidential Information. As used in this Agreement, the term
“Confidential Information” means any and all of the Company’s trade secrets, confidential and proprietary information and all other non-public information and data of or about the Company or any of its affiliates, including,
without limitation, lists of customers, information pertaining to customers, marketing plans and strategies, information pertaining to suppliers, pricing information, engineering and technical information, cost information, data compilations,
research and development information, business plans, financial information, personnel information, information received from third parties that the Company has agreed to keep confidential, and information about prospective customers or prospective
products and services, whether or not reduced to writing or other tangible medium of expression, including, without limitation, work product created by Consultant in rendering services for the Company. During Consultant’s engagement with the
Company and thereafter, Consultant will not use or disclose to others any of the Confidential Information Consultant acquires, receives or creates, except (a) in the performance of work assigned to Consultant by the Company, (b) as
authorized in writing by the Company, or (c) as required by law or judicial process, provided Consultant promptly notifies the Company in writing of any subpoena or other judicial request for disclosure involving confidential information or
trade secrets, and cooperates with any effort by the Company to obtain a protective order preserving the confidentiality of the confidential information or trade secrets. With respect to any particular Confidential Information that does not
constitute a trade secret, Consultant’s confidentiality and non-disclosure obligations under this Agreement shall continue for a period of five (5) years after the termination of Consultant’s
engagement with the Company for any reason. With respect to any particular trade secret information, Consultant’s confidentiality and non-disclosure obligations shall continue as long as such information
constitutes a trade secret under applicable law. Consultant agrees that the Company owns the Confidential Information and Consultant has no rights, title or interest in any 

  
 4 

 
of the Confidential Information. At the Company’s request or upon termination of Consultant’s engagement with the Company, Consultant will immediately deliver to the Company any and all
materials (including all copies and electronically stored data) containing any Confidential Information in Consultant’s possession, custody or control. Upon termination of Consultant’s engagement with the for any reason, Consultant will,
if requested by the Company, provide the Company with a signed written statement disclosing whether Consultant has returned to the Company all materials (including all copies and electronically stored data) containing any Confidential Information
previously in Consultant’s possession, custody or control. Notwithstanding any other provision of this Agreement, Consultant’s confidentiality obligations shall not apply to information that becomes generally known to the public through no
fault or action of Consultant or others who were under confidentiality obligations with respect to such information. 
 11.
Separation from Service under Section 409A. It is the parties’ intent that the level of services Consultant renders under this Agreement be at a sufficiently low level so as not to negate or otherwise override the “separation
from service” that has occurred between Consultant and the Company as of the Employment Termination Date within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the related Treasury Regulation, 26
C.F.R. § 1.409A-1(h) (collectively “Section 409A”). Accordingly, notwithstanding any other provision or term of this Agreement, in no event will the level of services Consultant performs under this Agreement be more
than twenty percent (20%) of the average level of services Consultant performed for the Company over the 36-month period immediately preceding the Employment Termination Date. 

12. Severability. The provisions in this Agreement are separate and divisible, and to the extent any provision or portion of
this Agreement is determined to be unenforceable or invalid for any reason, such unenforceability or invalidity shall not affect the enforceability or validity of the remainder of this Agreement. If any particular provision or portion of this
Agreement is determined to be invalid or unenforceable for any reason, such covenant, provision or portion shall automatically be deemed reformed such that the contested covenant, provision or portion will have the closest effect permitted by
applicable law to the original form and shall be given effect and enforced as so reformed to whatever extent would be reasonable and enforceable under applicable law.  

13. Survival of Obligations. Consultant acknowledges and agrees that certain of Consultant’s obligations under this
Agreement, including, without limitation, certain of Consultant’s intellectual property and non-disclosure covenant obligations, will survive the termination of this Agreement and Consultant’s
engagement, regardless the reason for such termination.  
 14. Entire Agreement and Amendments. This Agreement constitutes
the entire agreement of the parties and supersedes and cancels all previous written or oral agreements, understandings or representations relating to the Company’s engagement of Consultant to provide services as an independent contractor;
provided, however, this Agreement does not affect or supersede the parties’ respective rights and/or obligations under any agreements the parties may have entered into in connection with or in the course of Consultant’s prior employment
with the Company, including without limitation the Letter Agreement. This 

  
 5 

 
Agreement may not be amended, supplemented, or modified except by mutual agreement of the parties memorialized in a written instrument signed by Consultant and a duly-authorized officer of the
Company. 
 15. Successors and Assigns. The Company shall have the right to assign this Agreement to any affiliate or any
person or entity that acquires all or substantially all of the business and/or assets of the Company. This Agreement shall inure to the benefit of, and may be enforced by, the Company’s successors and assigns of the Company, including without
limitation by asset assignment, stock sale, merger, consolidation or other corporate reorganization. Consultant shall not have the right to assign or delegate this Agreement nor any of his rights or duties hereunder. 

16. Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the United States, if federal law is
applicable, and the laws of the State of Indiana (without application of its conflict-of-law principles), if state law is applicable. The Company and Consultant agree that any legal action relating to this Agreement shall be commenced and maintained
exclusively before any appropriate state court located in Hamilton County, Indiana, or the United States District Court for the Southern District of Indiana, Indianapolis Division; further, the Company and Consultant hereby irrevocably consent and
submit to the personal jurisdiction and venue of such courts located in Hamilton County, Indiana, or the United States District Court for the Southern District of Indiana, Indianapolis Division, and waive any right to challenge or otherwise object
to personal jurisdiction or venue (including, without limitation, any objection based on inconvenient forum grounds) in any action commenced or maintained in such courts located in Hamilton County, Indiana, or the United States District Court for
the Southern District of Indiana, Indianapolis Division; provided, however, the foregoing shall not affect any applicable right either party may have to remove a legal action to federal court. 

  
 6 

 17. Notices. Any notices provided for under this Agreement shall be in writing and shall
be deemed given and effective if delivered personally, sent by nationally recognized overnight courier (such as FedEx), sent by registered or certified mail, return receipt requested, with postage prepaid, at the following respective address (or to
such other or further address as a party may hereafter designate by like notice): 
 If to Consultant: 

Daniel M. Fitzpatrick 
 [Redacted]

 [Redacted] 
 If to Company:

 ITT Educational Services, Inc. 

Attention: Chief Administrative and Legal Officer 

13000 North Meridian Street 

Carmel, Indiana 46032 
 A notice
delivered personally shall be deemed delivered and effective as of the date of delivery. A notice sent by overnight courier or overnight express mail shall be deemed delivered and effective the next business day after it is deposited with the postal
authority or commercial carrier. A notice sent by certified or registered mail shall be deemed delivered and effective three (3) days after it is deposited with the postal authority. 

18. Non-Waiver. The failure of any party to insist in any one or more instances upon the performance of any of the provisions of
this Agreement or to pursue its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishment of any such rights. 

19. Negotiated Agreement. This Agreement is the result of negotiations between the parties, and no party shall be deemed to be
the drafter of this Agreement. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning and not strictly for or against any party. This Agreement shall be interpreted without any
presumption or inference based upon or against the party causing this Agreement to be drafted. 
 20. Counterparts.
This Agreement may be executed in counterparts, each of which shall constitute an original, but both of which when taken together shall constitute one and the same agreement. Signatures transmitted by facsimile or other electronic means are
acceptable the same as original signatures for execution of this Agreement. 
 [Remainder of page intentionally left blank;
signature page follows.] 

  
 7 

 IN WITNESS WHEREOF, the parties have executed this Agreement intending it to be effective as of
the date first above written. 
  

							
	COMPANY				CONSULTANT
			
	ITT EDUCATIONAL SERVICES, INC.				
				
	By:		  
				  

							Daniel M. Fitzpatrick

  
 8 

 Exhibit B 

GENERAL RELEASE 
 I,
Daniel M. Fitzpatrick, have entered into the letter agreement dated April 29, 2015 (the “Letter Agreement”) with ITT Educational Services, Inc. (collectively with its subsidiaries, affiliates, successors and assigns, the
“Company”). I understand that, under the terms of the Letter Agreement, I will only be able to receive certain payments and benefits (the “Letter Agreement Benefits”) in consideration for my signing and not revoking
this General Release (this “Release”). 
 I hereby acknowledge and agree to the following: 

The Company has advised me that (a) I will have 21 days from the date I receive this Release to consider and sign it; (b) if
I do not return this signed Release in 21 days, the Company will consider this my refusal to sign, and I will not receive the Letter Agreement Benefits; (c) if I do sign this Release, it will not be effective for a period of seven
(7) days, during which time I can change my mind and revoke my signature;(d) to revoke my signature, I must notify the Company in writing within seven (7) days of the date I signed this Release; and (e) this Release
will not become binding and effective until the seven-day revocation has expired without my having exercised my right of revocation.  

By signing this Release, I am giving up my right to sue ITT Educational Services, Inc. and any and all affiliates, parent companies and
subsidiaries, and their past, present, and future officers, directors, employees, and agents (together, the “Releasees”) based upon any act or event occurring prior to my signing this Release. Without limitation, I specifically
release the Releasees from any and all claims arising out of my employment and termination of employment, including claims based on discrimination under federal anti-discrimination laws such as Title VII of the Civil Rights Act, the Age
Discrimination in Employment Act, and any and all federal, state, and local laws. 
 By signing this Release, I am NOT giving up my right to
appeal a denial of a claim for benefits submitted under any health coverage (medical, dental, vision, and prescription drug coverage), life insurance or disability program maintained by the Company, nor am I giving up any claim for benefits under
the terms of any pension or retirement plan maintained by the Company. Also, I am not giving up my right to file for unemployment insurance benefits at the appropriate time if I so choose, and my signing of this Release will not affect my rights, if
any, to any coverage by workers’ compensation insurance. In addition, this Release will not affect any benefits to which I am entitled under the Letter Agreement or any claim arising out of the enforcement of the Letter Agreement. I also am not
giving up any right to indemnification/advancement or directors’ and officers’ liability insurance coverage and benefits to which I am entitled under applicable law, the Company’s articles of incorporation or by-laws or any
agreements, or under which I have been covered. I also am not giving up any rights as a shareholder of the Company under applicable law. 

  
 - 1 - 

 My signature below acknowledges that I have read the above, understand what I am signing, and
am acting of my own free will. The Company has advised me to consult with an attorney and any other advisors of my choice prior to signing this Release.\ 
  

									
	Signature:		  
				Date:		  

	Print Name:		  
						
					
	Witness:		  
						

  
 - 2 -

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