Exhibit 10.48
Description of ITT Educational
Services, Inc.’s 2009 Executive Bonus Parameters, Payment of
2008 Bonus Compensation, 2009 Executive Salaries, 2009 Executive
Perquisites and 2009 Director Compensation
2009 Executive Bonus
Parameters
On January 19, 2009, the
Compensation Committee of our Board of Directors approved the 2009
Executive Bonus Parameters (the “2009 Executive Bonus
Parameters”) for participation by our executives. Bonuses
payable to participants will be paid in cash and based on a formula
that takes into account our ability to achieve specified targets in
2009 in each of four performance categories, each weighted
equally:
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Our diluted earnings per share
(“EPS”) in 2009.
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The percentage increase in total student
enrollment at our institutes as of December 31, 2009 compared to
the total student enrollment at our institutes as of December 31,
2008.
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Our Free Cash Flow in 2009. Free Cash Flow is
defined as our net cash flows from operating activities,
less:
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capital expenditures, net (excluding facility
purchases); and
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any change in restricted cash.
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The percentage of Employable Graduates (as
defined below) from our institutes' programs of study in the third
and fourth calendar quarters of 2008 and first and second calendar
quarters of 2009 who either obtain employment by December 31, 2009,
or are already employed, in positions that require the direct or
indirect use of skills taught in their programs of study.
Employable Graduates include all of the graduates from our
institutes, except for those graduates who:
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have been admitted into other programs of study
at postsecondary educational institutions that are scheduled to
begin within one academic year following their
graduation;
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possessed visas that did not permit them to work
in the United States following their graduation;
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were personally suffering from a health
condition that prevented them from working;
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were actively engaged in U.S. military service;
or
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moved out of the Continental United States with
a spouse or parent who was actively engaged in U.S. military
service.
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Each target level associated with each
incremental bonus percentage is progressively higher and,
therefore, more of a challenge to achieve. If we applied the actual
results that we achieved in 2008 with respect to each of those four
performance factors to the 2009 performance categories, the
weighted average performance points under the 2009 performance
categories would be 3.00, for a maximum bonus percentage of 100.0%,
compared to 4.50 under the 2008 performance categories, for a
maximum bonus percentage of 175.0%. We have publicly disclosed that
the range of $6.25 to $6.45 is our internal goal for our 2009 EPS.
The mid-point of that range is the basis for the target level
associated with 2.00 performance points in the EPS performance
category of the 2009 Executive Bonus Parameters.
The 2009 Executive Bonus Parameters
establish for each participant a standard bonus target percentage
of annualized base salary as of December 31, 2009, ranging from 10%
to 100%, with the percentage depending on the participant’s
position. The following table sets forth the standard bonus target
percentage of annualized base salary as of December 31, 2009 for
each of the named executive officers under the 2009 Executive Bonus
Parameters. The named executive officers are those executive
officers of ours who will be included as such in the Proxy
Statement for our 2009 Annual Meeting of Shareholders.
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Named Executive
Officer
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2009 Standard Bonus
Target
Percentage of Annualized Base
Salary
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Kevin M. Modany
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100%
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Daniel M. Fitzpatrick
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65%
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Clark D. Elwood
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65%
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Eugene W. Feichtner
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60%
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Glenn E. Tanner
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60%
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The maximum bonus percentage under
the 2009 Executive Bonus Parameters ranges from 25% to 200% of the
standard bonus target percentage of annualized bas
