Document:

EX-10.2

 Exhibit 10.2 

ITT EDUCATIONAL SERVICES, INC. 

Amendment to Equity Award Agreements 

This Amendment to Equity Award Agreements (this “Amendment”), effective as of April 29, 2015, is by and between ITT Educational
Services, Inc. (the “Company”) and Daniel M. Fitzpatrick (“Grantee”). 
 Recitals 

 

	 	A.	The Company and Grantee are parties to the following equity-based award agreements: 

  

	 	1.	2006 ITT Educational Services, Inc. Equity Compensation Plan Nonqualified Stock Option Agreement, dated as of the 28th day of January, 2009, relating to an Option to
purchase 20,000 shares of common stock of the Company granted by the Company to Grantee (the “2009 Option Award Agreement”); 

  

	 	2.	2006 ITT Educational Services, Inc. Equity Compensation Plan Nonqualified Stock Option Agreement, dated as of the 27th day of January, 2010, relating to an Option to
purchase 22,000 shares of common stock of the Company granted by the Company to Grantee (the “2010 Option Award Agreement”); 

  

	 	3.	2006 ITT Educational Services, Inc. Equity Compensation Plan Nonqualified Stock Option Agreement, dated as of the 27th day of January, 2011, relating to an Option to
purchase 16,500 shares of common stock of the Company granted by the Company to Grantee (the “2011 Option Award Agreement”); 

  

	 	4.	2006 ITT Educational Services, Inc. Equity Compensation Plan Nonqualified Stock Option Agreement, dated as of the 13th day of February, 2012, relating to an Option to
purchase 11,000 shares of common stock of the Company granted by the Company to Grantee (the “2012 Option Award Agreement”); 

  

	 	5.	ITT Educational Services, Inc. Amended and Restated 2006 Equity Compensation Plan Restricted Stock Unit Award Agreement, dated as of the 9th day of May, 2013,
relating to 6,750 RSUs granted by the Company to Grantee (the “2013 RSU Award Agreement”); 

  

	 	6.	ITT Educational Services, Inc. Amended and Restated 2006 Equity Compensation Plan Nonqualified Stock Option Agreement, dated as of the 9th day of May, 2013, relating
to an Option to purchase 15,000 shares of common stock of the Company granted by the Company to Grantee (the “2013 Option Award Agreement”); 

	 	7.	ITT Educational Services, Inc. Amended and Restated 2006 Equity Compensation Plan Restricted Stock Unit Award Agreement, dated as of the 4th day of February, 2014,
relating to 6,750 RSUs granted by the Company to Grantee (the “2014 RSU Award Agreement”); and 

  

	 	8.	ITT Educational Services, Inc. Amended and Restated 2006 Equity Compensation Plan Nonqualified Stock Option Agreement, dated as of the 4th day of February, 2014,
relating to an Option to purchase 15,000 shares of common stock of the Company granted by the Company to Grantee (the “2014 Option Award Agreement”). 

  

	 	B.	The 2009 Option Award Agreement, the 2010 Option Award Agreement, the 2011 Option Award Agreement, the 2012 Option Award Agreement, the 2013 Option Award Agreement and the 2014 Option Award Agreement are herein referred
to as the “Option Award Agreements.” The 2013 RSU Award Agreement and the 2014 RSU Award Agreement are referred to herein as the “RSU Award Agreements.” 

 

	 	C.	The Company and Grantee have entered into a letter agreement dated as of April 29, 2015 (the “Letter Agreement”) in which, among other things, the Company and Grantee have agreed to a different treatment
of outstanding equity-based awards upon certain types of termination of Grantee’s employment by the Company. 

  

	 	D.	The Company and the Grantee desire to amend the Option Award Agreements and the RSU Award Agreements to reflect the modification of the treatment of the Options and RSUs as provided in the Letter Agreement.

 In consideration of the foregoing, the provisions set forth herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Grantee agree as follows: 
 1. Paragraph 5 of each Option Award
Agreement is hereby amended to add the following subparagraph (c): 
 (c) Notwithstanding the foregoing, during the
Consulting Period (as defined in the Letter Agreement), so long as Grantee remains available to perform the Consulting Services (as defined in the Letter Agreement), all Options that were outstanding as of the Separation Date (as defined in the
Letter Agreement) will (i) remain outstanding and will not be forfeited; (ii) if not exercisable as of the Separation Date, will continue to vest and become exercisable in accordance with their terms; and (iii) if exercisable as of
the Separation Date, will remain exercisable, in each case until the earlier of (A) the Option otherwise expiring in accordance with the terms of the Plan and this Agreement, or (B) the date 90 days after the termination of Grantee’s
service. If Grantee remains available to perform the Consulting Services during the Consulting Period, then the last day of the Consulting Period shall be deemed to be the date that Grantee’s service terminates for purposes of such Options.

  
 - 2 - 

 2. Paragraph 6 of each RSU Award Agreement is hereby amended to add the following two sentences
to the end of that paragraph: 
 Notwithstanding the foregoing, during the Consulting Period, so long as Grantee remains available to perform
the Consulting Services, all Restricted Stock Units that were outstanding as of the Separation Date will (i) remain outstanding and will not be forfeited; and (ii) continue to vest in accordance with their terms. Provided that Grantee
remains 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 Grantee’s service terminates for purposes of such awards. 

3. Except as specifically amended in this Amendment, all provisions of the Award Agreements shall remain unchanged and in full force and
effect. 

  
 - 3 - 

 The Company and the Grantee have executed this Amendment as of the date first above written. 

 

			
	 /s/ Daniel M. Fitzpatrick

	[GRANTEE SIGNATURE]
	
	Grantee Name: Daniel M. Fitzpatrick
	
	ITT EDUCATIONAL SERVICES, INC.
		
	By:		 /s/ Kevin M. Modany

			
		
	Print Name:		 Kevin M. Modany

 
			
		
	Title:		 CEO

  
 - 4 -EX-10.3

 Exhibit 10.3 

April 28, 2015 
 Mr. Kevin M. Modany 

ITT Educational Services, Inc. 
 13000 North Meridian Street 

Carmel, IN 46032-1404 
 Re: Amendment to
Letter Agreement 
 Dear Kevin: 

Reference is made to that certain letter agreement (the “Letter Agreement”) dated as of August 4, 2014, between you and ITT
Educational Services, Inc. (the “Company”). You and the Company hereby agree to extend the Applicable Period (as defined and used in the Letter Agreement) to and including May 29, 2015. Other than such amendment, all other terms and
conditions of the Letter Agreement remain in full force and effect without modification. 
 If the foregoing accurately reflects our
agreement, please sign and return to us the enclosed duplicate copy of this letter. 
  

					
	ITT EDUCATIONAL SERVICES, INC.
		
	By:		 /s/ John E. Dean

			Name:		John E. Dean
			Title:		Executive Chairman
	
	Accepted and Agreed to:
	
	 /s/ Kevin M. Modany

	Kevin M. ModanyExhibit 10.1 Q1 2015

Exhibit 10.1

Federal-Mogul Powertrain Management Incentive Plan 
for Fiscal Year 2015

		
	I.
	PURPOSE

The Federal-Mogul Powertrain Management Incentive Plan (the “Plan”) has been established for Fiscal Year 2015 for those Participants defined under Section III below.

The purpose of this Plan is to provide additional compensation to Participants for their contribution to the achievement of the objectives of the Company, encouraging and stimulating superior performance by such individuals, and assisting in attracting and retaining highly qualified key employees.

		
	II.
	DEFINITIONS

		
	A.
	Base Salary equals the base annual salary for each Participant, effective as of January 1, 2015.  If a Participant’s Base Salary changes during the year, the Base Salary used to calculate the Bonus under this Plan will be prorated for the portion of the year each Base Salary was in effect based on a 12-month year. For the avoidance of doubt, Base Salary shall be determined before reductions for contributions (if any) under Code Section 401(k), and shall not include, without limitation and to the extent applicable, (i) any Financial Award under the Plan; (ii) variable compensation such as incentive awards, commissions or spot bonuses, if any; (iii) imputed income from such programs as life insurance, auto allowance, or non-recurring earnings such as moving or relocation expenses, allowances or perquisites, or reimbursed business expenses; (iv) long-term incentive compensation (including stock or stock-equivalent awards, if any); or (v) overtime, unless required to be included in Base Salary for purposes of the Plan in accordance with applicable law.

		
	B.
	Chief Executive Officer means the Chief Executive Officer of Federal-Mogul, Powertrain.

		
	C.
	Chief Financial Officer means the Chief Financial Officer of Federal-Mogul,  Powertrain.

		
	D.
	Senior Vice President, Human Resources means the Senior Vice President of Human Resources, Federal-Mogul, Powertrain.

		
	E.
	Code means the Internal Revenue Code of 1986, as amended.

		
	F.
	Company means Federal-Mogul Powertrain and its subsidiaries and its successors and assigns.

		
	G.
	Compensation Committee means the Compensation Committee of the Board of Directors of the Company.

		
	H.
	Financial Awards mean the awards that Participants may earn pursuant to the Plan.

		
	I.
	Fiscal Year means the Company’s Fiscal Year beginning January 1, 2015 and ending December 31, 2015.

		
	J.
	Plan means the Federal-Mogul Powertrain Management Incentive Plan, as from time to time amended.

		
	III.
	EMPLOYEES COVERED BY THIS PLAN

Participating employees of the Company selected to participate in the Plan shall be subject to the review and approval by the Compensation Committee (each a “Participant”).  If a Participant vacates a listed position, the employee selected as the replacement would be eligible to participate in the Plan pro-rata for the months in the position, subject to approval by the Chief Executive Officer (except that, in the case of Participants who are executive officers, subject to the approval by the Compensation Committee in its sole discretion).  Notwithstanding the foregoing, no Participant shall be eligible to participate in the Plan unless he or she has returned to the Company an executed Integrity Policy Agreement and Confidentiality Agreement, and acknowledged its understanding and acceptance of the Company’s policies consistent with the Company practices and procedures. 

In order to receive a payout under the Plan, on the actual bonus payout date, a Participant must be in good standing and not on a performance improvement plan or in corrective action status as a result of poor performance during the Fiscal Year.

		
	IV.
	FINANCIAL AWARD

Computation of a Participant’s Financial Award is described in Appendix A. 

A Participant in the Plan shall be entitled to a Financial Award computed as the product of:

		
	A.
	“Participant’s Base Salary” shall be the Base Salary (as defined in Section II) of a Participant.

		
	B.
	“Target Bonus Percentage” that is selected for each Participant shall be subject to the review and approval by the Compensation Committee.

		
	C.
	“Financial and Operational Performance as a % of Performance Target” shall be determined in the manner set forth in Exhibit A based on the attainment of both the financial and operational targets for the Fiscal Year.  The financial and operational targets shall be the attainment by the Company and business units in the Fiscal Year of a.) an Adjusted EBITDA target; b.) the budgeted total revenue target; c.) operational targets tied to health and safety, customer service and quality; and d.) individual performance assessment of each bonus-eligible employee.

V.FINANCIAL AND OPERATIONAL PERFORMANCE TARGETS 
AND     PAYOUT RANGES

The financial performance target and payout ranges used under this Plan in the Fiscal Year have been approved by the Compensation Committee based on the annual business plan and are set forth in Exhibit A.  The payout percentage for the performance target will be based on the level of attainment as set forth in Exhibit A.  For purposes of the Plan (including, without limitation, Exhibit A), “Adjusted EBITDA” shall mean operating income including joint venture earnings (or loss) and other income (or loss), adjusted to exclude stock based compensation expense (or income), and before interest, taxes, depreciation, and amortization.

At any time prior to the final determination of awards, the Compensation Committee may, in its sole discretion, increase, decrease, or otherwise adjust performance measures, targets, and payout ranges used hereunder, as a result of extraordinary or non-recurring events, changes in applicable accounting rules or principles, changes in the Company’s methods of accounting, changes in applicable law, changes due to consolidations, acquisitions, or reorganizations affecting the Company and its subsidiaries and affiliates, or other similar changes in the Company’s business.

		
	VI.
	COMPUTATION AND DISBURSEMENT OF FUNDS

As soon as practicable after the close of the Fiscal Year and approval of the Company’s annual financial statements, the Chief Financial Officer and the Senior Vice President of Human Resources shall calculate the applicable financial and operating performance measures under the Plan.  The Senior Vice President of Human Resources shall then calculate the proposed payout under the Plan based upon the proposed achievement of the financial and operating performance measures.  The proposed payout shall be verified by the Chief Executive Officer and presented to the Compensation Committee for review and final approval.  Once approved, payment of the Financial Awards shall be made within 30 days after completion of the annual audit, but not later than March 15th of the calendar year following the fiscal year for which the award is earned. Any determination by the Compensation Committee made under this paragraph shall be final and binding on all parties.

Each Participant shall be liable for any and all federal, state, provincial, local or foreign taxes, pension plan contributions, employment insurance premiums, social insurance contributions, amounts payable to a governmental and/or regulatory body in the Participant’s country and other levies of any kind required by applicable laws to be deducted or withheld with respect to the awards granted pursuant to the Plan (collectively, the “Withholding Taxes”). The Company and its subsidiaries shall have the right to deduct and withhold all required Withholding Taxes from any payment or other consideration deliverable to the Participant.

		
	VII.
	PRORATION OF FINANCIAL AWARDS

Any Participant who is not employed with the Company in a Bonus-eligible position on or prior to October 1, 2015 shall not be eligible to receive a Financial Award for the Fiscal Year, except as otherwise provided by the Chief Executive Officer or, in the case of the Chief Executive Officer and executives at the level of Vice President or above, by the Compensation Committee.  Any Participant who is eligible for a Financial Award but who did not serve in a Bonus-eligible position during the entire 2015 Fiscal Year will be eligible to receive a pro-rated Bonus payment based on the amount of time such eligible Participant was actively and continuously employed in an eligible position during the Fiscal Year.

		
	•
	New Hires and Rehires - The Financial Award will be prorated based upon the number of full months the Participant was employed during the Fiscal Year.  For example, a Participant initially hired on July 1st would be eligible for 50% of the annual Financial Award.  In the case of rehires, there is no credit for prior service and the rehire date must occur prior to October 1st in order for the Participant to be Bonus-eligible under the Plan for the Fiscal Year.

		
	•
	Leaves of Absence - Time taken during a leave of absence (including disability leave) is not credited toward eligibility for a Financial Award; therefore, awards will be prorated for the length of time on leave of absence. Furthermore, payments of Financial Awards are not considered earned and payable unless and until the Participant returns to work, with the exception of military leave. If the leave of absence lasts nine months or more during the Fiscal Year, the Participant will not have met the three-month eligibility required to earn a Bonus for that Fiscal Year.

		
	•
	Promotions and Demotions - If the action results in a movement from one Bonus-eligible position to another Bonus-eligible position (with either a higher or lower Bonus target) a prorated Financial Award will be calculated.  The Financial Award will be calculated separately by factoring the time in each Bonus-eligible position by the corresponding Bonus target and Base Salary during the Participant’s tenure in each position.  However, if a Participant is both promoted and later demoted during the Fiscal Year, the Participant’s entire Bonus eligibility and Bonus target percent will be determined by the lower position. 

		
	▪
	Status Change

		
	◦
	Change in employment status - The Financial Award is not payable unless the Participant has occupied a Bonus-eligible position for at least three months during the Fiscal Year on a full-time basis (i.e., 40-hour or more per week), unless specifically approved by the company’s CEO, and meets all eligibility criteria during the last full quarter of the Fiscal Year, i.e., from October 1st through December 31st.  The Financial Award will be based upon the Base Salary and the annual Bonus target while in the Bonus-eligible position.

		
	◦
	Bonus-eligible position to a non-Bonus eligible position - The Financial Award will be prorated based upon the time in a Bonus-eligible position as long as the Participant was in the position for a minimum of three months during the Fiscal Year.  A Participant must occupy a Bonus-eligible position prior to October 1st in order to be eligible to receive a Bonus payment for the Fiscal Year. The Financial Award will be based upon the Base Salary and the annual Bonus target while in the Bonus-eligible position.

		
	◦
	Non-Bonus-eligible position to a Bonus-eligible position - The Financial Award will be prorated based on the time worked, the corresponding Bonus target, and the Base Salary in effect while in the Bonus-eligible position as long as the Participant was in the eligible position for a minimum of three months during the Fiscal Year.  A Participant must move into the Bonus-eligible position prior to October 1st in order to be eligible to receive a Bonus payment for the Fiscal Year.

		
	VIII.
	FORFEITURE / RECOUPMENT OF FINANCIAL AWARDS

Financial Awards are not considered earned until they are approved by the Compensation Committee and are actually paid by the Company.  Consequently, a Participant whose employment with the Company is voluntarily or involuntarily terminated prior to the actual Financial Award payment date will be ineligible for payment of the Financial Award, except as otherwise provided by the Chief Executive Officer or, in the case of the Chief Executive 

Officer and executives at the level of Vice President or above, by the Compensation Committee, in its sole and absolute discretion, in which case any such Financial Award to the terminated employee shall be paid at the time Financial Awards are paid to active employees pursuant to Section VII above. 

If the Compensation Committee, in its sole and absolute discretion, determines that (i) there has been misconduct or a gross dereliction of duty resulting in either a violation of law or Company policy or procedures, that, in either case, causes significant financial or reputational harm to the Company (or any of its affiliates), and that a Participant committed the misconduct/ gross dereliction of duty, or failed in his or her responsibility to manage or monitor the applicable conduct or risk; (ii) a conduct of a Participant involves an immoral act which is reasonably likely to impair the reputation of the Company (or any of its affiliates); (iii) a Participant committed, or was indicted for, a felony or any crime involving fraud or embezzlement or dishonesty or was convicted of, or entered a plea of nolo contendere to a misdemeanor (other than a traffic violation) punishable by imprisonment under federal, state or local law; (iv) a Participant violated any securities or employment laws or regulations; (v) a Participant materially breached the Integrity Policy Agreement and/or the Confidentiality Agreement; or (vi) a Participant embezzled and/or misappropriated any property of the Company (or any of its affiliates) or committed any act involving fraud with respect to the Company (or any of its affiliates), then, to the extent not prohibited by applicable law, the Compensation Committee, in its sole and absolute discretion, may seek reimbursement from such Participant (and such Participant shall be obligated to repay) all or any portion of any payments made to such Participant in respect of the Financial Award; provided, however, that the Compensation Committee may only seek such reimbursement in respect of payments of the Financial Award  made to a Participant within the three-year period preceding the date that the Compensation Committee makes a determination that there has been misconduct or a gross dereliction of duty.

If the Compensation Committee determines, in its sole and absolute discretion, that calculations underlying the performance measures and targets, including but not limited to mistakes in the Company’s financial statements for the Fiscal Year, were incorrect, then the Compensation Committee may, in its sole and absolute discretion, seek to recover the amount of any payment made to Participants that exceeded the amount that would have been paid based on the corrected calculations; provided, however, that the Compensation Committee may only seek to recover such amounts within the three-year period preceding the date that the Compensation Committee makes a determination that the calculations were incorrect.

To the extent not prohibited by applicable law, if a Participant is an officer of the Company, or, if applicable, has otherwise been designated by the Board of Directors as an “officer” for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, the Board of Directors shall seek reimbursement of any payment made to such Participant in respect of the Financial Award in the event of a restatement of the Company’s (or any of its subsidiaries’) financial results (occurring due to material noncompliance with any financial reporting requirements under applicable securities laws) that reduced a previously granted payment made to such Participant in respect of the Financial Award.  In that event, the Compensation Committee may, in its sole and absolute discretion, seek to recover the amount of any such payment made to the Participant that exceeded the amount that would have been paid based on the restated financial results.

If the Company subsequently determines that it is required by law to apply a “clawback” or alternate recoupment provision to the Financial Award, under the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, then such clawback or recoupment provision also shall apply to such Financial Award, as if it had been included on the effective date of this Plan.

To the extent not prohibited under applicable law, the Company, in its sole and absolute discretion, will have the right to set off (or cause to be set off) any amounts otherwise due to a Participant from the Company in satisfaction of any repayment obligation of such Participant hereunder, provided that any such amounts are exempt from, or set off in a manner intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.

For the avoidance of doubt, the Company’s rights under this Section IX shall apply to Participants, without regard to whether any such Participant is currently providing, or previously provided, services to the Company as an employee.

		
	IX.
	ADMINISTRATION

This Plan shall be administered by the Senior Vice President of Human Resources, subject to the control and supervision of the Chief Executive Officer and the Compensation Committee.  In the event of a claim or dispute brought forth by a Participant (other than the Chief Executive Officer), the decision of the Chief Executive Officer as to the facts in the case and the meaning and intent of any provision of the Plan, or its application, shall be final, 

binding, and conclusive. In the event of a claim or dispute brought forth by the Chief Executive Officer, the decision of the Compensation Committee as to the facts in the case and the meaning and intent of any provision of the Plan, or its application, shall be final, binding, and conclusive.

		
	X.
	NO EMPLOYMENT CONTRACT; FUTURE PLANS 

Participation in this Plan shall not confer upon any Participant any right to continue in the employ of the Company nor interfere in any way with the right of the Company to terminate any Participant’s employment at any time.  The Company is under no obligation to continue the Plan in future years.  Participation in this Plan shall also supersede and eliminate any incentive bonus plan or other contractual bonus arrangement (including, without limitation, any sales commission, safety incentive, personal incentives and project incentives) that the Participant has or may have had by contract or otherwise, except as may be expressly provided in the acceptance document that such Participant executes.

		
	XI.
	AMENDMENT OR TERMINATION

The Compensation Committee may at any time, or from time to time, in its sole and absolute discretion, (a) amend, alter or modify the provisions of this Plan, (b) terminate this Plan, or (c) terminate the participation of an employee or group of employees in this Plan; provided, however, that in the event of the termination of this Plan or a termination of participation, the Compensation Committee may determine that a prorated award is payable to employees who were Participants in this Plan under such terms and conditions as established by the Compensation Committee in its sole and absolute discretion. 

		
	XII.
	GENERAL PROVISIONS

		
	A.
	No rights of the Participants under this Plan shall be transferable or assignable by a Participant, either voluntarily or involuntarily by way of encumbrance, pledge, attachment, levy or charge of any nature (except as may be required by state or federal law).

		
	B.
	Nothing in the Plan shall require the Company to segregate or set aside any funds or other property for the purpose of paying any portion of an award.  No Participant, beneficiary or other person shall have any right, title or interest in any amount awarded under the Plan prior to the payment of such award to him or her.  A Participant’s rights to a Financial Award under this Plan are no greater than those of unsecured general creditors of the Company.

		
	C.
	By participating in the Plan, each Participant hereunder shall consent to the holding and processing of personal information provided by such Participant to the Company, any affiliate of the Company, trustee or third party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to: (i) administering and maintaining Participant records; (ii) providing information to the Company, its affiliates, trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan; (iii) providing information to future purchasers or merger partners of the Company or any of its affiliates, or the business in which the Participant works; and (iv) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country.

		
	D.
	This Plan is governed by the laws of the State of New York and as such will be construed under and in accordance with the laws of the State of New York without regard to conflicts of law.

                
Chief Executive Officer                               Date

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