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ESI > SEC Filings for ESI > Form 8-K on 6-Mar-2014All Recent SEC Filings

Show all filings for ITT EDUCATIONAL SERVICES INC

Form 8-K for ITT EDUCATIONAL SERVICES INC


6-Mar-2014

Change in Directors or Principal Officers


Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The following information is provided pursuant to Sub-item (e) of Item 5.02:

On March 1, 2014, the Compensation Committee of the Registrant's Board of Directors established a short-term compensation element for the Registrant's executive officers that will be payable in early 2015, if certain management objectives (the "2014 Management Objectives") are accomplished during 2014. The 2014 Management Objectives and their relative weightings are as follows:

                             Management Objectives                          Weight
  1.   Obtain requisite state and accrediting commission authorizations
       for corporate training, continuing education and/or test
       preparation programs.                                                  20%

  2.   Design and implement an operational optimization plan to increase
       ITT/ESI's operational efficiencies for the corporation.                20%

  3.   Obtain requisite federal, state and accrediting commission
       authorizations for additional health science, technology and/or
       engineering programs at the ITT Technical Institutes at both the
       associate degree and diploma levels.                                   20%

  4.   Improve the 2014 ITT Technical Institute quarterly student
       evaluation average score.                                              10%

  5.   Revise and begin teaching the six identified high volume,
       high-impact program courses at the majority of ITT Technical
       Institute campuses.                                                    10%

  6.   Acquire a training company to support strategic initiatives
       associated with The Center for Professional Development.               10%

  7.   Obtain requisite federal, state and accrediting commission
       authorizations for a dual high school diploma and associate
       degree program at an ITT Technical Institute.                          5%

  8.   Obtain requisite federal, state and accrediting commission
       authorizations for additional nursing programs at the ITT
       Technical Institutes at both the associate and bachelor degree
       levels                                                                 5%

The determination of the extent to which the 2014 Management Objectives are accomplished by the Registrant's executive officers will be made by the Compensation Committee in early 2015. The Committee intends to assign one to five points to each 2014 Management Objective based on the extent to which the Committee determines the objective was accomplished. The following table sets forth the maximum short-term compensation percentage that is associated with the total weighted points that are assigned to the 2014 Management Objectives by the Compensation Committee:

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Total Weighted Points   Maximum Short-Term Compensation Percentage
     4.76 - 5.00                          200.0%
     4.51 - 4.75                          187.5%
     4.26 - 4.50                          175.0%
     4.01 - 4.25                          162.5%
     3.76 - 4.00                          150.0%
     3.51 - 3.75                          137.5%
     3.26 - 3.50                          125.0%
     3.01 - 3.25                          112.5%
     2.76 - 3.00                          100.0%
     2.51 - 2.75                          87.5%
     2.26 - 2.50                          75.0%
     2.01 - 2.25                          62.5%
     1.76 - 2.00                          50.0%
     1.51 - 1.75                          41.7%
     1.26 - 1.50                          33.3%
     1.00 - 1.25                          25.0%

To determine the maximum short-term compensation amount that an executive officer may receive, the maximum short-term compensation percentage (determined as described above) will be multiplied by a standard short-term compensation percentage of annualized base salary as of December 31, 2014, ranging from 32% to 100%, with the percentage depending on the officer's position, and the result will be multiplied by the officer's annualized base salary. The following table sets forth the 2014 standard short-term compensation percentage of annualized base salary as of December 31, 2014 for each of the named executive officers (those executive officers of the Registrant who will be included as such in the Proxy Statement for the Registrant's 2014 Annual Meeting of Shareholders):

                               2014 Standard Short-
                          Term Compensation Percentage of
Named Executive Officer       Annualized Base Salary
Kevin M. Modany                        100%
Daniel M. Fitzpatrick                   65%
Eugene W. Feichtner                     60%
June M. McCormack                       60%
Glenn E. Tanner                         60%

An executive officer's actual short-term compensation payment, however, may be more or less than the officer's potential short-term compensation as calculated as described above. An executive officer's actual short-term compensation amount will be based on the Compensation Committee's discretionary assessment of the officer's individual contribution toward accomplishing each 2014 Management Objective. Any 2014 short-term compensation payment will be made in cash. The Compensation Committee may, in its sole discretion, modify the terms of the short-term compensation element at any time before it is paid.

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