<PAGE>
As filed with the Securities and Exchange Commission on March 9, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
THE CORPORATE EXECUTIVE BOARD COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware The Watergate 52-2056410
(State or Other 600 New Hampshire Avenue, N.W. (I.R.S. Employer
Jurisdiction of Washington, D.C. 20037 Identification No.)
Incorporation or (Address of Principal Executive
Organization) Offices Including Zip Code)
--------------------------
THE CORPORATE EXECUTIVE BOARD COMPANY
STOCK-BASED INCENTIVE COMPENSATION PLAN
THE CORPORATE EXECUTIVE BOARD COMPANY
1999 STOCK OPTION PLAN
THE CORPORATE EXECUTIVE BOARD COMPANY
DIRECTORS' STOCK PLAN
(Full Title of the Plans)
--------------------------
Copies to:
James J. McGonigle Ronald O. Mueller, Esq.
The Corporate Executive Board Company Gibson, Dunn & Crutcher LLP
The Watergate 1050 Connecticut Avenue, N.W.
600 New Hampshire Avenue, N.W. Washington, D.C. 20036
Washington, D.C. 20037 (202) 955-8500
(Name and Address of Agent For Service)
--------------------------
(202) 777-5000
(Telephone Number, Including Area Code, of Agent For Service)
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered/(1)/ Offering Price Aggregate Registration Fee
Per Share Offering Price/(2)/
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 7,826,000 N/A $83,643,476.80 $23,252.89
value $.01 per share
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Of the 7,826,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), of the Registrant being registered, up to (i) 5,504,000 of
the Shares are reserved for issuance pursuant to The Corporate Executive
Board Company Stock-Based Incentive Compensation Plan (the "Incentive
Plan"), (ii) 1,892,000 of the Shares and any shares described in (i) which
for any reason are not issued under the Incentive Plan are reserved for
issuance pursuant to The Corporate Executive Board Company 1999 Stock
Option Plan (the "1999 Plan"), and (iii) 430,000 of
<PAGE>
the Shares are reserved for issuance pursuant to The Corporate Executive
Board Company Directors' Stock Plan (the "Directors' Plan"). Pursuant to
Rule 416, there is also being registered such additional Common Stock that
become available under the foregoing plans in connection with certain
changes in the number of outstanding Common Stock because of events such as
recapitalizations, stock dividends, stock splits and reverse stock splits,
and any other securities with respect to which the outstanding Shares are
converted or exchanged.
(2) Estimated solely for the purpose of calculating the registration fee. The
registration fee has been calculated in accordance with Rule 457(h) under
the Securities Act of 1933 (a) in the case of 2,298,080 Shares that remain
available for award under the Incentive Plan, the 1999 Plan and the
Directors' Plan, based upon the average high and low prices for the Common
Stock on March 3, 1999, which was $24.875; and (b) in the case of 5,527,920
Shares that are being registered with respect to outstanding options under
the Incentive Plan, the 1999 Plan and the Directors' Plan, based on their
aggregate exercise price of $26,478,736.80.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information requested in Part I of this Registration Statement is
included in the prospectus for the Incentive Plan, the 1999 Plan, and the
Directors' Plan (collectively with the Incentive Plan and the 1999 Plan, the
"Plans"), respectively, which the Registrant has excluded from this Registration
Statement in accordance with the instructions to Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed with the Securities and
Exchange Commission ("Commission") are hereby incorporated by reference into
this Registration Statement:
1. The Registrant's Registration Statement on Form S-1 (File No. 333-
59833), filed with the Commission on July 24, 1998, as amended, under
which the Registrant registered the Common Stock under the Securities
Act of 1933, as amended.
2. The description of the Common Stock set forth in the Registrant's
Registration Statement on Form 8-A (File No. 000-24799), filed with
the Commission on August 13, 1998, under which the Registrant
registered the Shares under Section 12(g) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act").
All reports and other documents that the Registrant subsequently files
with the Securities and Exchange Commission (the "Commission") pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment indicating that the Registrant has sold all of the
securities offered under this Registration Statement or that deregisters the
distribution of all such securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement from the date that
the Registrant files such report or document. Any statement contained in this
Registration Statement or any report or document incorporated into this
Registration Statement by reference, however, shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained in a subsequently dated report or document that is also
considered part of this Registration Statement, or in any amendment to this
Registration Statement, is inconsistent with such prior statement. The
Registrant's file number with the Commission is 000-24799.
3
<PAGE>
Item 4. Description of Securities.
Inapplicable.
Item 5. Interests of Named Experts and Counsel.
Inapplicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Second Amended and Restated Certificate of
Incorporation limits, to the maximum extent permitted by the Delaware General
Corporation Law, the personal liability of directors for monetary damages for
breach of their fiduciary duties as directors. The Registrant's Amended and
Restated Bylaws provide that the Registrant shall indemnify its officers,
directors, employees and other agents to the fullest extent permitted by law.
Item 7. Exemption from Registration Claimed.
Inapplicable.
4
<PAGE>
Item 8. Exhibits.
Exhibit
No. Description
- ------- ---------------------------------------------------------------
4.1 Second Amended and Restated Certificate of Incorporation of the
Registrant as filed with the Secretary of State on February 18,
1999, incorporated herein by reference to Exhibit 3.1 of the
Registrant's Registration Statement on Form S-1 (File No.
333-59833)
4.1.1 Certificate of Retirement, retiring certain shares of Class A and
Class B Stock, filed with the Secretary of State on February 26,
1999, incorporated herein by reference to Exhibit 1 of the
Registrant's Form 8-K (File No. 000-24799), filed with the
Commission on March 3, 1999
4.2 Amended and Restated Bylaws of the Registrant, incorporated
herein by reference to Exhibit 3.2 of the Registrant's
Registration Statement on Form S-1 (File No. 333-59833)
5.1 Opinion of Gibson, Dunn & Crutcher, LLP
10.1 The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan
10.2 The Corporate Executive Board Company 1999 Stock Option Plan
10.3 The Corporate Executive Board Company Directors' Stock Plan
23.1 Consent of Gibson, Dunn & Crutcher, LLP (contained in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP, independent auditors
24.1 Power of Attorney (included on the signature page of this
Registration Statement)
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act, (ii) to reflect in the prospectus any facts or events
arising after the
5
<PAGE>
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information
in the Registration Statement, provided, however, that clauses (i) and
(ii) do not apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
[SIGNATURES ON THE NEXT PAGE]
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Washington, District of Columbia, on this 9th day of
March, 1999.
THE CORPORATE EXECUTIVE BOARD COMPANY
/s/ James J. McGonigle
By:_____________________________
Name: James J. McGonigle
Title: Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the directors and/or officers of
the Registrant whose signature appears below hereby appoints James J. McGonigle
and Clay M. Whitson, and each of them severally as his attorney-in-fact to sign
his name and on his behalf, in any and all capacities stated below, and to file
with the Securities and Exchange Commission any and all amendments, including
post-effective amendments to this Registration Statement as appropriate, and
generally to do all such things in their behalf in their capacities as officers
and directors to enable Registrant to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities and Exchange
Commission.
Name and Signature Title Date
- ---------------------- ----------------------------------- ------------------
/s/ Harold L. Siebert
______________________ Chairman of the Board of March 9, 1999
Harold L. Siebert Directors
/s/ James J. McGonigle
______________________ Chief Executive Officer and March 9, 1999
James J. McGonigle Director
(Principal Executive Officer)
/s/ Clay M. Whitson
______________________ Chief Financial Officer March 9, 1999
Clay M. Whitson (Principal Financial Officer and
Principal Accounting Officer)
7
<PAGE>
/s/ Michael A. D'Amato
________________________ Director March 9, 1999
Michael A. D'Amato
/s/ Robert C. Hall
________________________ Director March 9, 1999
Robert C. Hall
/s/ David W. Kenny
________________________ Director March 9, 1999
David W. Kenny
/s/ Stephen G. Pagliuca
________________________ Director March 9, 1999
Stephen G. Pagliuca
/s/ Jeffrey D. Zients
________________________ Director March 9, 1999
Jeffrey D. Zients
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- ---------------------------------------------------------------
<C> <S>
4.1 Second Amended and Restated Certificate of Incorporation of the
Registrant as filed with the Secretary of State on February 18,
1999, incorporated herein by reference to Exhibit 3.1 of the
Registrant's Registration Statement on Form S-1 (File No.
333-59833)
4.1.1 Certificate of Retirement, retiring certain shares of Class A
and Class B. Stock, filed with the Secretary of State on
February 26, 1999 incorporated herein by reference to Exhibit
1 of the Registrant's Form 8-K (File No. 000-24799), filed
with the Commission on March 3, 1999
4.2 Amended and Restated Bylaws of the Registrant, incorporated
herein by reference to Exhibit 3.2 of the Registrant's
Registration Statement on Form S-1 (File No. 333-59833)
5.1 Opinion of Gibson, Dunn & Crutcher, LLP
10.1 The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan
10.2 The Corporate Executive Board Company 1999 Stock Option Plan
10.3 The Corporate Executive Board Company Directors' Stock Plan
23.1 Consent of Gibson, Dunn & Crutcher, LLP (contained in Exhibit
5.1)
23.2 Consent of Arthur Andersen LLP, independent auditors
24.1 Power of Attorney (included on the signature page of this
Registration Statement)
</TABLE>
<PAGE>
EXHIBIT 5.1
OPINION OF GIBSON, DUNN & CRUTCHER LLP
March 9, 1999
(202) 955-8500 18815-00002
The Corporate Executive Board Company
The Watergate
600 New Hampshire Avenue, N.W.
Washington, D.C. 20037
Re: Proposed Offering of up to 7,826,000 Shares of Common Stock
Ladies and Gentlemen:
We refer to an aggregate of 7,826,000 shares of Common Stock, par value
$.01 per share, of The Corporate Executive Board Company, a Delaware corporation
(the "Company"), which are the subject of a registration statement on Form S-8
(the "Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"). The shares of Common Stock (the "Shares") subject to the Registration
Statement are to be issued under The Corporate Executive Board Company Stock-
Based Incentive Compensation Plan, The Corporate Executive Board Company 1999
Stock Option Plan and The Corporate Executive Board Company Directors' Stock
Plan (together, the "Plans").
We have examined the original, or a photostatic or certified copy, of such
records of the Company, certificates of officers of the Company and of public
officials and such other documents as we have determined relevant and necessary
as the basis for the opinion set forth below. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon our examination mentioned above, we are of the opinion that the
Shares have been validly authorized for issuance and, when issued and paid for
in accordance with the terms set forth in the Registration Statement and the
Plans, and, when (a) the Registration Statement has become effective under the
Act, (b) the pertinent provisions of any applicable state securities law have
been complied with, and (c) in the case of options issued under the Plans, the
Shares
<PAGE>
Securities and Exchange Commission
March 9, 1999
Page 2
have been paid for, the Shares so issued will be legally issued and will be
fully paid and nonassessable.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement and to the reference to our firm appearing on the cover of the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Act or the General Rules and Regulations of the Commission.
Very truly yours,
GIBSON, DUNN & CRUTCHER LLP
<PAGE>
Exhibit 10.1
THE CORPORATE EXECUTIVE BOARD COMPANY
STOCK-BASED INCENTIVE COMPENSATION PLAN
l. Establishment and Purpose of the Plan. The Stock-Based Incentive
-------------------------------------
Compensation Plan (the "Original Plan") was established by The Corporate
Executive Board Company, a Delaware corporation (the "Company"), as of October
31, 1997, to provide certain employees of the Company with an increased economic
and proprietary interest in the Company in order to encourage those employees'
contributions to the success and progress of the Company. This Stock-Based
Incentive Compensation Plan (the "Plan") was amended and restated in its
entirety on February 18, 1999. The Plan is designed to provide for the grant of
options ("Options") that will not qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended.
2. Stock Subject to the Plan. The maximum number of shares of stock that
-------------------------
may be subject to Options granted hereunder shall not exceed 5,504,000 shares of
the Common Stock, one cent ($0.01) par value (the "Stock"), of the Company,
subject to adjustment under Section 10 hereof. The Stock that may be subject to
Options granted may be authorized and unissued Stock or Stock reacquired by the
Company and held as treasury stock. Except as provided in Section 13 hereof, if
any Option granted under the Plan is canceled without the Optionee having
received any benefit of ownership, the number of shares subject to such Option
that have not been exercised prior to the Option's cancellation may not again be
optioned hereunder.
3. Eligibility. Persons who shall be eligible for grants of Options
-----------
hereunder ("Eligible Employees") shall be those employees of the Company who are
members of a select group of management or other key employees that the
Committee may from time to time designate to participate under the Plan (
"Optionees") through grants of Options.
4. Optionee's Agreement. The terms upon which Options are granted shall
--------------------
be evidenced by a written agreement executed by the Company and the Optionee to
whom Options are granted (the "Optionee's Agreement"). The Options shall be
subject to the terms and restrictions contained in the Optionee's Agreement.
5. Stockholders' Agreement. Prior to a public offering, Stock issued
-----------------------
pursuant to Options shall also be subject to the terms and restrictions
contained in a Stockholders' Agreement related to the Company. The
Stockholders' Agreement may contain such terms, provisions, and conditions as
may be determined by the Committee as long as such terms, conditions and
provisions are not inconsistent with the Plan. A copy of the Stockholders
Agreement shall be delivered to the Optionee at the time of grant.
6. Administration of the Plan. The Plan shall be administered by the
--------------------------
compensation committee of the Board of Directors of the Company (the "Board") or
by the Board itself (if no Committee exists) (any such plan administrator, the
"Committee").
<PAGE>
All actions of the Committee shall be authorized by a majority vote thereof
at a duly called meeting or by unanimous written consent. The Committee shall
have the sole authority, in its absolute discretion, to adopt, amend, and
rescind such rules and regulations as, in its opinion, may be advisable in the
administration of the Plan, in construing and interpreting the Plan, the rules
and regulations, and the agreements and other instruments evidencing Options
granted under the Plan, and in making all other determinations deemed necessary
or advisable for the administration of the Plan. All decisions, determinations,
and interpretations of the Committee shall be final and conclusive upon the
Eligible Employees. Notwithstanding the foregoing, any dispute arising under
any Optionee's Agreement shall be resolved pursuant to the dispute resolution
mechanism set forth in such Agreement.
Subject to the express provisions of the Plan, the Committee shall
determine the number of shares of Stock subject to grants or issuances and the
terms thereof, including but not limited to the provisions relating to the
exercisability of Options, vesting of Options and the termination and/or
forfeiture of Options under the Plan.
7. Terms and Conditions of Options. No Option shall be granted for a term
-------------------------------
beyond May 1, 2009. The Committee shall have full and sole discretion to
determine the exercisability of the Options under the Plan. The Optionee's
Agreement may contain such other terms, provisions, and conditions as may be
determined by the Committee (including, but not limited to, exercise price,
exercisability, expiration date and vesting) as long as such terms, conditions
and provisions are not inconsistent with the Plan.
8. Exercise Price of Options. The exercise price for each Option granted
-------------------------
hereunder shall be set forth in the applicable Optionee's Agreement. Payment
for Stock purchased upon exercise of any Option granted hereunder shall be in
cash at the time of exercise. At its sole discretion on an individual basis,
the Committee may permit payment or agree to permit payment by such other
alternative means as may be lawful, including (but not limited to) the
acceptance of a promissory note secured by the number of shares of Stock then
issuable upon the exercise of the Option.
9. Non-transferability. Unless provided otherwise in the Optionee's
-------------------
Agreement, any Option granted under this Plan shall, by its terms, be
nontransferable by the Optionee other than by will or the laws of descent and
distribution (in which case such descendant or beneficiary shall be subject to
all terms of the Plan applicable to Optionees), and is exercisable during the
Optionee's lifetime only by the Optionee.
10. Adjustments. If at any time the Stock subject to this Plan is changed
-----------
into, or outstanding Stock is exchanged for, a different number or kind of
shares or securities, as the result of any one or more reorganizations,
recapitalizations, stock splits, reverse stock splits, stock dividends or
similar events, an appropriate adjustment shall be made in the number, exercise
or sale price and/or type of shares or securities for which Options may
thereafter be granted under the Plan unless waived in writing by the Optionee.
The Committee also shall designate the appropriate changes that shall be made in
Options under the Plan, and the Committee may do so either at the time the
Option is granted or at the time of the event causing
2
<PAGE>
the adjustment. Any such adjustment in outstanding Options shall be made without
changing the aggregate exercise price applicable to the unexercised portions of
such Options.
11. Amendment and Termination of the Plan. Unless earlier terminated by
-------------------------------------
the Board of Directors of the Company, the Plan shall terminate on May 1, 2009.
The Committee may amend the Plan or any agreement issued hereunder to the
extent necessary for any Option granted under the Plan to comply with applicable
tax or securities laws.
No Option may be granted during any suspension or after the termination of
the Plan. No amendment, suspension or termination of the Plan or of any
Optionee's Agreement issued hereunder shall, without the consent of the affected
holder of such Option alter or impair any rights or obligations in any Option
theretofore granted or issued to such holder under the Plan.
12. Nature of Plan. This Plan is intended to qualify as a compensatory
--------------
benefit plan within the meaning of Rule 701 under the Securities Act of 1933.
This Plan is intended to constitute an unfunded arrangement for a select group
of management or other key employees.
13. Cancellation of Options. Any Option granted under the Plan may be
-----------------------
canceled at any time with the consent of the holder and a new Option may be
granted to such holder in lieu thereof.
14. Withholding Taxes. The Committee may in its discretion require the
-----------------
Optionee to remit to the Company, prior to the delivery of any certificate or
certificates for such Stock or the payment of any such amounts, all or any part
of the amount determined in the Committee's discretion to be sufficient to
satisfy federal, state and local withholding tax obligations (the "Withholding
Obligation") that the Company or its counsel determines may arise with respect
to such exercise, issuance or payment. At the sole discretion of the Committee
on an individual basis, the Optionee may (i) request the Company to withhold
delivery of a sufficient number of shares of Stock or a sufficient amount of the
Optionee's compensation or (ii) deliver a sufficient number of previously-issued
shares of Stock, to satisfy the Withholding Obligation.
15. Right of Redemption. The Committee, in its sole discretion and on an
-------------------
individual basis, may provide within any agreement issued hereunder the right of
the Company to redeem the Options and/or the shares of Stock issued under the
Plan (the "Right of Redemption"). The Right of Redemption shall be subject to
such terms, provisions, and conditions as may be determined by the Committee as
long as such terms, conditions and provisions are not inconsistent with the
Plan.
16. Right of Sale. The Committee, in its sole discretion and on an
-------------
individual basis, may provide within any agreement issued hereunder the right of
the Optionee to sell his or her Options and/or shares of Stock issued under the
Plan to the Company (the "Right of Sale"). The Right of Sale shall be subject
to such terms, provisions, and conditions as may be determined by the Committee
as long as such terms, conditions and provisions are not inconsistent with the
Plan.
3
<PAGE>
Exhibit 10.2
THE CORPORATE EXECUTIVE BOARD COMPANY
1999 STOCK OPTION PLAN
1. PURPOSE
The purpose of The Corporate Executive Board Company 1999 Stock Option Plan
(the "Plan") is to provide Participants with an increased economic and
proprietary interest in the Company in order to encourage those
Participants to contribute to the success and progress of the Company. The
Plan provides for the grant of Options which shall qualify as incentive
stock options, as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and for the grant of Options which shall not
qualify as incentive stock options pursuant to Section 422 of the Code.
2. DEFINITIONS
(a) "Administrator" means the Administrator of the Plan in accordance with
Section 11.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Common Stock" means the Company's Common Stock, par value $.01,
subject to adjustment as provided in Section 8.
(d) "Company" means The Corporate Executive Board Company, a Delaware
corporation.
(e) "ISOs" shall mean Options which qualify as incentive stock options
within the meaning of Section 422 of the Code.
(f) "Options" shall mean stock options granted pursuant to the Plan.
(g) "Participants" shall mean those individuals described in Section 3 to
whom Options have been granted from time to time by the Administrator
and any authorized transferee of such individuals.
(h) "Plan" means The Corporate Executive Board Company 1999 Stock Option
Plan.
(i) "Retirement" shall have the meaning specified by the Administrator in
the terms of an option grant or, in the absence of any such term,
shall mean retirement from active employment with the Company or its
Subsidiaries (i) at or after age 55 and with the approval of the
Administrator or (ii) at or after age 65. The determination of the
Administrator as to an individual's Retirement shall be conclusive on
all parties.
(j) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company where each
of the
1
<PAGE>
corporations in the unbroken chain other than the last corporation
owns stock possessing at least 50 percent or more of the total
combined voting power of all classes of stock in one of the other
corporations in the chain.
(k) "Total and Permanent Disablement" shall have the meaning specified by
the Administrator in the terms of an option grant or, in the absence
of any such term or in the case of an Option intending to qualify as
an ISO, the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12 months.
The determination of the Administrator as to an individual's Total and
Permanent Disablement shall be conclusive on all parties.
3. PARTICIPANTS
Options may only be granted to officers, independent contractors, employees
and prospective employees of the Company and its Subsidiaries as selected
by the Administrator, except that Options intending to qualify as ISOs may
only be granted to employees of the Company and its Subsidiaries as
selected by the Administrator. For purposes of this Plan, the Chairman of
the Board's status as an employee shall be determined by the Board of
Directors. Options may not be granted to directors of the Company or its
Subsidiaries unless such directors otherwise qualify for participation in
the Plan.
4. EFFECTIVE DATE AND TERMINATION OF PLAN
This Plan was adopted by the Board of Directors and approved by the
stockholders of the Company on February 18, 1999 (the "Effective Date").
The Plan shall remain available for the grant of Options until the tenth
anniversary of the Effective Date. Notwithstanding the foregoing, the Plan
may be terminated at such earlier time as the Board of Directors may
determine. Termination of the Plan will not affect the rights and
obligations of the Participants and the Company arising under Options
theretofore granted and then in effect.
5. SHARES SUBJECT TO THE PLAN AND TO OPTIONS
The aggregate number of shares of Common Stock issuable pursuant to all
Options granted under the Plan will not exceed 1,892,000 shares of the
Company's Common Stock, or the number and kind of shares of stock or other
securities which shall be substituted or adjusted for such shares as
provided in Section 8. Notwithstanding the foregoing, in the event that
shares of Common Stock subject to the Company's Stock-Based Incentive
Compensation Plan, as amended and restated on February 18, 1999 (the
"Incentive Plan"), are canceled, expire or terminate or that otherwise are
available for issuance but for any other reason are not issued under the
2
<PAGE>
Incentive Plan, then the number of shares of Common Stock authorized for
issuance under the Plan shall be increased accordingly (the maximum number
of shares available for issuance under the Incentive Plan is 5,504,000).
Such shares may be authorized and unissued shares of the Company's Common
Stock. The aggregate number of shares of Common Stock issued pursuant to
the Plan at any time shall equal only the number of shares of Common Stock
issued upon the exercise of Options and not returned to the Company upon
the cancellation, expiration or forfeiture of an award or delivered (either
actually or by attestation) in payment or satisfaction of the purchase
price or tax obligation with respect to an Option. All shares of Common
Stock available for issuance under the Plan may be subject to Options which
intend to qualify as ISOs.
6. GRANT, TERMS AND CONDITIONS OF OPTIONS
Options may be granted at any time and from time to time prior to the
termination of the Plan, to Participants selected by the Administrator.
The aggregate number of shares of Common Stock subject to Options granted
pursuant to the Plan during any calendar year to any one Participant shall
not exceed 430,000 shares. No Participant shall have any rights as a
stockholder with respect to any shares of stock subject to Option hereunder
until said shares have been issued. Each Option shall be evidenced by a
written stock option agreement and/or such other written arrangements as
may be approved from time to time by the Administrator. Options granted
pursuant to the Plan need not be identical but each Option must contain and
be subject to the following terms and conditions:
(a) Price: The purchase price under each Option shall be established by
-----
the Administrator. In no event will the purchase price be less than
the fair market value of the Common Stock on the date of grant unless
such Options are granted in substitution of options granted by a new
employee's previous employer or the Participant pays or foregoes
compensation in the amount of any discount. Notwithstanding the
foregoing, in the case of the grant of an Option intending to qualify
as an ISO, if the Participant owns stock possessing more than 10
percent of the combined voting power of all classes of stock of the
Company or its Subsidiaries (after applying the ownership attribution
rules set forth under Section 422(d) of the Code and any successor
provision), the purchase price of such Option must be no less than 110
percent of the fair market value of the Common Stock on the date of
grant.
The purchase price of any Option may be paid in cash or any
alternative means acceptable to the Administrator, including an
irrevocable commitment by a broker to pay over such amount from a sale
of the shares issuable under an Option and the acceptance of a
promissory note secured by the number of shares of Common Stock then
issuable upon exercise of the Options.
(b) Duration and Exercise or Termination of Option: Unless the
----------------------------------------------
Administrator provides otherwise, Options shall become
exercisable 25 percent per year beginning one year after the date
of the grant. Unless the Administrator provides otherwise, or if
the Option is intending to qualify as an ISO, each Option granted
must expire within a period of not more than ten (10) years from
the date of grant.
3
<PAGE>
Notwithstanding the foregoing, in the case of the grant of an
Option intending to qualify as an ISO, if the Participant owns
stock possessing more than 10 percent of the combined voting
power of all classes of stock of the Company or its Subsidiaries
(after applying the ownership attribution rules set forth under
Section 422(d) of the Code and any successor provision), the
Option must expire within a period of not more than five (5)
years from the date of grant.
(c) Suspension or Termination of Option: Except as otherwise
-----------------------------------
provided by the Administrator, if at any time (including after a
notice of exercise has been delivered) the Chief Executive
Officer or any other person designated by the Administrator (each
such person, an "Authorized Officer") reasonably believes that a
Participant has committed an act of misconduct as described in
this Section, the Authorized Officer may suspend the
Participant's rights to exercise any Option pending a
determination of whether an act of misconduct has been committed.
Except as otherwise provided by the Administrator, if the
Administrator or an Authorized Officer determines a Participant
has committed an act of embezzlement, fraud, dishonesty,
nonpayment of any obligation owed to the Company or its
Subsidiaries, breach of fiduciary duty or deliberate disregard of
the Company or Subsidiary rules resulting in loss, damage or
injury to the Company or its Subsidiaries, or if a Participant
makes an unauthorized disclosure of any Company or Subsidiary
trade secret or confidential information, engages in any conduct
constituting unfair competition, induces any Company or
Subsidiary customer to breach a contract with the Company or its
Subsidiaries, or induces any principal for whom the Company or
its Subsidiaries acts as agent to terminate such agency
relationship, neither the Participant nor his or her estate nor
transferee shall be entitled to exercise any Option whatsoever.
In making such determination, the Administrator or an Authorized
Officer shall act fairly and shall give the Participant an
opportunity to appear and present evidence on his or her behalf
at a hearing before the Administrator or the Board of Directors.
For any Participant who is an "executive officer" for purposes of
Section 16 of the Securities Exchange Act of 1934, the
determination of the Authorized Officer shall be subject to the
approval of the Administrator.
(d) Termination of Employment: Subject to Section 6(b), unless the
-------------------------
Administrator specifies otherwise, upon the termination of the
Participant's employment, his or her rights to exercise an Option
then held shall be only as follows:
(1) Death. Upon the death of a Participant while in the
-----
employ of the Company or its Subsidiaries, all of the
Participant's Options then held shall be exercisable by his
or her estate, heir or beneficiary at any time during the
twelve (12) months next succeeding the date of death. Any
and all Options that are unexercised during the twelve (12)
months next succeeding
4
<PAGE>
succeeding the date of death shall terminate as of the end
of such twelve (12) month period.
If a Participant should die within thirty (30) days of his
or her termination of employment with the Company or its
Subsidiaries, an Option shall be exercisable by his or her
estate, heir or beneficiary at any time during the twelve
(12) months succeeding the date of termination, but only to
the extent of the number of shares as to which such Option
was exercisable as of the date of such termination. Any and
all Options that are unexercised during the twelve (12)
months succeeding the date of termination shall terminate as
of the end of such twelve (12) month period. A Participant's
estate shall mean his or her legal representative or other
person who so acquires the right to exercise the Option by
bequest or inheritance or by reason of the death of the
Participant.
(2) Total and Permanent Disablement. Upon termination as a
-------------------------------
result of the Total and Permanent Disablement of any
Participant, all of the Participant's Options then held
shall be exercisable for a period of twelve (12) months
after termination. Any and all Options that are unexercised
during the twelve (12) months succeeding the date of
termination shall terminate as of the end of such twelve
(12) month period.
(3) Retirement. Upon Retirement of a Participant, the
----------
Participant's Options then held shall be exercisable for a
period of twelve (12) months after Retirement, except in the
case of Options intending to qualify as ISOs, such Options
shall be exercisable for a period of three (3) months after
Retirement. The number of shares with respect to which the
Options shall be exercisable shall equal the total number of
shares which were exercisable under the Participant's Option
on the date of his or her Retirement. Any and all Options
that are unexercised during the twelve (12) months or three
(3) months (as appropriate) succeeding the date of
termination shall terminate as of the end of such twelve
(12) or three (3) month period.
(4) Other Reasons. Upon the date of a termination of a
-------------
Participant's employment for any reason other than those
stated above in Sections 6(d)(1), (d)(2) and (d)(3) or as
described in Section 6(c) above, (A) any Option that is
unexercisable as of such termination date shall remain
unexercisable and shall terminate as of such date, and (B)
any Option that is exercisable as of such termination date
shall expire the earlier of (i) thirty (30) days following
such date or (ii) the expiration date of such Option.
(e) Transferability of Option: Unless the Administrator specifies
-------------------------
otherwise, each Option shall be nontransferable by the
Participant other than by will or the laws
5
<PAGE>
of descent and distribution and shall only be exercisable by the
Participant during his or her lifetime.
(f) Cancellation: The Administrator may, at any time prior to
------------
exercise and subject to consent of the Participant, cancel any
Options previously granted and may or may not substitute in their
place Options at a different price and different type under
different terms or in different amounts.
(g) Conditions and Restrictions Upon Securities Subject to Options:
--------------------------------------------------------------
The Administrator may provide that the shares of Common Stock
issued upon exercise of an Option shall be subject to such
further conditions or agreements as the Administrator in its
discretion may specify prior to the exercise of such Option,
including without limitation, conditions on vesting or
transferability, forfeiture or repurchase provisions and method
of payment for the shares issued upon exercise (including the
actual or constructive surrender of Common Stock already owned by
the Participant). The Administrator may establish rules for the
deferred delivery of Common Stock upon exercise of an Option with
the deferral evidenced by use of "Stock Units" equal in number to
the number of shares of Common Stock whose delivery is so
deferred. A "Stock Unit" is a bookkeeping entry representing an
amount equivalent to the fair market value of one share of Common
Stock. Unless the Administrator specifies otherwise, Stock Units
represent an unfunded and unsecured obligation of the Company.
Settlement of Stock Units upon expiration of the deferral period
shall be made in Common Stock or otherwise as determined by the
Administrator. The amount of Common Stock, or other settlement
medium, to be so distributed may be increased by an interest
factor or by dividend equivalents. Until a Stock Unit is so
settled, the number of shares of Common Stock represented by a
Stock Unit shall be subject to adjustment pursuant to Section 8.
Any Stock Units that are settled after the holder's death shall
be distributed to the holder's designated beneficiary(ies) or, if
none was designated, the holder's estate.
(h) Other Terms and Conditions: Options may also contain such other
--------------------------
provisions, which shall not be inconsistent with any of the
foregoing terms, as the Administrator shall deem appropriate. No
Option, however, nor anything contained in the Plan shall confer
upon any Participant any right to continue in the Company's or
its Subsidiaries' employ or service nor limit in any way the
Company's or its Subsidiaries' right to terminate his or her
employment at any time. In the case of Options intending to
qualify as ISOs, Section 422 of the Code provides that Options
shall not be treated as ISOs if and to the extent that the
aggregate fair market value of shares of Common Stock (determined
as of the time of grant) with respect to which such Options are
exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and its
subsidiaries) exceeds $100,000, taking Options into account in
the order in which they were granted.
6
<PAGE>
7. LOANS
The Company may make loans, at the request of the Participant and in the
sole discretion of the Administrator, for the purpose of enabling the
Participant to exercise Options granted under the Plan and to pay the tax
liability resulting from an Option exercised under the Plan. The
Administrator shall have full authority to determine the terms and
conditions of such loans. Such loans may be secured by the shares received
upon exercise of such Option.
8. ADJUSTMENT OF AND CHANGES IN THE STOCK
In the event that the number of shares of Common Stock of the Company shall
be increased or decreased through reorganization, reclassification,
combination of shares, stock splits, reverse stock splits, spin-offs, or
the payment of a stock dividend, (other than regular, quarterly cash
dividends) or otherwise, then each share of Common Stock of the Company
which has been authorized for issuance under the Plan, whether such share
is then currently subject to or may become subject to an Option under the
Plan, may be proportionately adjusted to reflect such increase or decrease,
unless the terms of the transaction provide otherwise. Outstanding Options
may also be amended as to price and other terms if necessary to reflect the
foregoing events.
In the event there shall be any other change in the number or kind of the
outstanding shares of Common Stock of the Company, or any stock or other
securities into which such Common Stock shall have been changed, or for
which it shall have been exchanged, whether by reason of merger,
consolidation or otherwise, then the Administrator shall, in its sole
discretion, determine the appropriate adjustment, if any, to be effected.
In addition, in the event of such change described in this paragraph, the
Administrator may accelerate the time or times at which any Option may be
exercised and may provide for cancellation of such accelerated Options
which are not exercised within a time prescribed by the Administrator in
its sole discretion. Notwithstanding anything to the contrary herein, any
adjustment to Options granted pursuant to this Plan, particularly Options
intending to qualify as ISOs, shall comply with the requirements,
provisions and restrictions of the Code.
No right to purchase fractional shares shall result from any adjustment in
Options pursuant to this Section 8. In case of any such adjustment, the
shares subject to the Option shall be rounded down to the nearest whole
share. Notice of any adjustment shall be given by the Company to each
Participant which shall have been so adjusted and such adjustment (whether
or not notice is given) shall be effective and binding for all purposes of
the Plan.
9. LISTING OR QUALIFICATION OF STOCK
In the event that the Board of Directors or the Administrator determines in
its discretion that the listing or qualification of the Plan shares on any
securities exchange or quotation or trading system or under any applicable
law or governmental regulation is necessary as
7
<PAGE>
a condition to the issuance of such shares under the Option, the Option may
not be exercised in whole or in part unless such listing, qualification,
consent or approval has been unconditionally obtained.
10. WITHHOLDING
To the extent required by applicable federal, state, local or foreign law,
a Participant shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise by reason of an
Option exercise. The Company shall not be required to issue shares or to
recognize the disposition of such shares until such obligations are
satisfied. The Administrator may permit these obligations to be satisfied
by having the Company withhold a portion of the shares of stock that
otherwise would be issued to him or her upon exercise of the Option, or to
the extent permitted, by tendering shares previously acquired, provided
that such will not result in an accounting charge to the Company or its
Subsidiaries.
11. ADMINISTRATION AND AMENDMENT OF THE PLAN
The Plan shall be administered by the Administrator who shall be the
Compensation Committee of the Board of Directors or, in the absence of a
Compensation Committee, the Board of Directors itself. Subject to the
express provisions of this Plan, the Administrator shall be authorized and
empowered to do all things necessary or desirable in connection with the
administration of this Plan, including, without limitation: (a) to
prescribe, amend and rescind rules and regulations relating to this Plan
and to define terms not otherwise defined herein; (b) to determine which
persons are Participants (as defined in Section 3 hereof) and to which of
such Participants, if any, an Option shall be granted hereunder and the
timing of any such Option grants; (c) to determine the number of shares of
Common Stock subject to an Option and the exercise or purchase price of
such shares; (d) to establish and verify the extent of satisfaction of any
conditions to exercisability applicable to an Option; (e) to waive
conditions to and/or accelerate exercisability of an Option, either
automatically upon the occurrence of specified events (including in
connection with a change of control of the Company) or otherwise in its
discretion; (f) to prescribe and amend the terms of Option grants made
under this Plan (which need not be identical); (g) to determine whether,
and the extent to which, adjustments are required pursuant to Section 8
hereof; and (h) to interpret and construe this Plan, any rules and
regulations under the Plan and the terms and conditions of any Option
granted hereunder, and to make exceptions to any such provisions in good
faith and for the benefit of the Company or its Subsidiaries.
All decisions, determinations and interpretations by the Administrator
regarding the Plan, any rules and regulations under the Plan and the terms
and conditions of any Option granted hereunder, shall be final and binding
on all Participants and optionholders. The Administrator shall consider
such factors as it deems relevant, in its sole and absolute discretion, to
making such decisions, determinations and interpretations including,
8
<PAGE>
without limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and accountants as
it may select.
The Administrator may, from time to time, delegate some of its
responsibilities with respect to the administration of the Plan to such
persons as it may designate in its sole discretion but may not delegate
authority to grant options to a person who is not a member of the Board of
Directors.
The interpretation and construction of any provision of the Plan by the
Board of Directors shall be final and conclusive. The Board of Directors
may periodically adopt rules and regulations for carrying out the Plan, and
amend the Plan as desired, without further action by the Company's
stockholders except to the extent required by applicable law. Any
amendment to the Plan will not affect the rights and obligations of the
Participants and the Company arising under Options theretofore granted and
then in effect. Notwithstanding the foregoing, and subject to adjustment
pursuant to Section 8, the Plan may not be amended to materially increase
the number of shares of Common Stock authorized for issuance, unless
approved by the Company's stockholders.
12. TIME OF GRANTING OPTIONS
The effective date of such Option shall be the date on which the grant was
made by the Administrator. Within a reasonable time thereafter, the
Company will deliver the Option to the Participant.
9
<PAGE>
Exhibit 10.3
THE CORPORATE EXECUTIVE BOARD COMPANY
DIRECTORS' STOCK PLAN
1. PURPOSE
-------
The purpose of The Corporate Executive Board Company Directors' Stock Plan
(the "Plan") is to advance the interests of The Corporate Executive Board
Company, a Delaware corporation (hereinafter the "Company"), by enabling the
Company to attract, retain and motivate qualified individuals to serve on
the Company's Board of Directors and to align the financial interests of
such individuals with those of the Company's stockholders by providing for
or increasing their proprietary interest in the Company. Any stock options
granted pursuant to this Plan shall not qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), as incentive stock
options. The plan is intended to operate in a manner that exempts grants of
Common Stock under the Plan from Section 16(b) of the Securities Exchange
Act of 1934, as amended.
2. DEFINITIONS
-----------
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Board and/or the Compensation Committee of the
Board acting pursuant to its authorization to administer this Plan under
Section 7.
(c) "Common Stock" means the Company's Common Stock, par value $.01 per
share, subject to adjustment as provided in Section 9.
(d) "Market Value" means, as of any date, and unless the Committee shall
specify otherwise, the closing sale price of the Common Stock as reported
for such date pursuant to the consolidated quotation system or any other
transaction reporting plan under Section 11A of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or, if there have been no sales so
reported for such date, the average of the best bid and best offer prices
quoted under the consolidated quotation system or any other such transaction
reporting plan as of 4:00 p.m., New York time, on such date, or if on any
date the Common Stock is not so quoted, the average of the best bid and best
offered prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor or comparable organization. If at any time the Common Stock is not
listed on any domestic securities exchange or quoted under a transaction
reporting plan or in the domestic over-the-counter market, the "Market
Value" shall be the fair value thereof determined by the Committee.
(e) "Options" shall mean the stock options granted to a Participant with
respect to shares of Common Stock pursuant to the terms of this Plan.
<PAGE>
(f) "Stock Grant" shall mean the award of shares of Common Stock to a
Participant pursuant to the terms of this Plan.
3. SHARES SUBJECT TO THE PLAN
--------------------------
Subject to adjustment as provided in Section 9, the maximum number of shares
of Common Stock which may be issued pursuant to this Plan shall not exceed
430,000. Shares issued under this Plan may be authorized and unissued
shares of Common Stock or shares of Common Stock reacquired by the Company.
All or any shares of Common Stock subject to an Option or a Stock Grant
which for any reason are not issued, do not become vested or are reacquired
pursuant to the Plan or the terms of an Option or Stock Grant may again be
made subject to an Option or Stock Grant under the Plan.
4. PARTICIPANTS
------------
Any person who is, or is elected to be, a director of the Company or any of
its subsidiaries shall be eligible for the award of Options and/or Stock
Grants hereunder. The Committee shall determine to which directors any such
Options and/or Stock Grants shall be awarded hereunder (any such director
and his or her authorized transferees hereinafter referred to as a
"Participant").
5. DIRECTOR AWARDS
---------------
The Committee may provide for Options and/or Stock Grants to be awarded to
Directors in consideration for their service to the Company. The Committee
shall specify the number of shares subject to each Option or Stock Grant
provided for under this Section 5, or the formula pursuant to which such
number shall be determined, the Participants to receive any such award, the
date of award and the vesting and expiration terms applicable to such Option
or Stock Grant. The award of Options or Stock Grants hereunder may, but need
not, be conditioned on the Director electing to forego his or her right to
all or any part of his or her cash retainer or other fees. Subject to
adjustment pursuant to Section 9, the maximum number of shares of Common
Stock subject to Options and Stock Grants awarded under this Plan during any
calendar year to any person on account of his or her service as a director
shall not exceed 86,000 shares.
6. TERMS AND CONDITIONS OF OPTIONS AND STOCK GRANTS
------------------------------------------------
(a) General Terms and Conditions: Options and Stock Grants awarded pursuant
----------------------------
to the Plan need not be identical but each Option and Stock Grant shall be
subject to the following general terms and conditions:
(1) Terms and Restrictions Upon Shares: The Committee may provide that
----------------------------------
the shares of Common Stock issued upon exercise of an Option or receipt
of a Stock Grant shall be subject to such further conditions,
restrictions or agreements as the Committee in its discretion may
specify prior to the exercise of such Option or receipt of such Stock
Grant, including without limitation, deferrals on issuance, conditions
on vesting or transferability, and forfeiture or repurchase provisions.
The Committee may establish rules for the deferred
2
<PAGE>
delivery of Common Stock upon exercise of an Option or receipt of a
Stock Grant with the deferral evidenced by use of "Stock Units" equal in
number to the number of shares of Common Stock whose delivery is so
deferred. A "Stock Unit" is a bookkeeping entry representing an amount
equivalent to the Market Value of one share of Common Stock. Stock Units
represent an unfunded and unsecured obligation of the Company except as
otherwise provided by the Board. Settlement of Stock Units upon
expiration of the deferral period shall be made in Common Stock or
otherwise as determined by the Committee. The amount of Common Stock, or
other settlement medium, to be so distributed may be increased by an
interest factor or by dividend equivalents. Until a Stock Unit is
settled, the number of shares of Common Stock represented by a Stock
Unit shall be subject to adjustment pursuant to Section 9.
(2) Transferability: Unless otherwise provided by the Committee, awards
---------------
of Options or Stock Grants under the Plan shall be nontransferable by
the Participant other than by will or the laws of descent and
distribution and Options shall be exercisable only by the Participant
during his or her lifetime.
(3) Other Terms and Conditions: No holder of an Option or Stock Grant
--------------------------
shall have any rights as a stockholder with respect to any shares of
Common Stock subject to an Option or Stock Grant hereunder until said
shares have been issued. Options and Stock Grants may also contain such
other provisions, which shall not be inconsistent with any of the
foregoing terms, as the Committee shall deem appropriate. The Committee
may waive conditions to and/or accelerate exercisability of an Option or
Stock Grant, either automatically upon the occurrence of specified
events (including in connection with a change of control of the Company)
or otherwise in its discretion. No Option or Stock Grant, however, nor
anything contained in the Plan, shall confer upon any Participant any
right to serve as a director of the Company or any of its subsidiaries.
(b) Option Terms: The Committee may establish the terms, provisions and
------------
conditions applicable to awards of Options (including, but not limited to,
exercise price, exercisability and vesting) to the extent such terms,
provisions and conditions are consistent with the express provisions of the
Plan. The exercise price for each Option shall be established by the
Committee or under a formula established by the Committee. Notwithstanding
the forgoing, the exercise price shall not be less than the Market Value of
the Common Stock on the date of grant of the Option, unless the Participant
pays or foregoes compensation in the amount of any discount. The exercise
price of an Option shall be payable (i) in cash, (ii) by payment under an
arrangement with a broker where payment is made pursuant to an irrevocable
direction to the broker to deliver all or part of the proceeds from the sale
of the Option shares to the Company, (iii) by tendering (either physically
or by attestation) shares of Common Stock owned by the Participant
exercising the Option and having a Market Value on the date of exercise
equal to the exercise price but only if such will not result in an
accounting charge to the Company, or (iv) by any combination of the
foregoing. In addition, the exercise price may be payable in such other
form(s) of consideration as the
3
<PAGE>
Committee in its discretion shall specify, including without limitation by
loan (as described in Section 8) or by techniques that may result in an
accounting charge to the Company.
(c) Stock Grant Terms: Stock Grants under the Plan may, in the sole
-----------------
discretion of the Committee, but need not, be conditioned upon the
Participant paying cash or cash-equivalent consideration or agreeing to
forego other compensation for the shares of Common Stock covered by the
Stock Grant. Stock Grants under the Plan may be subject to terms, provisions
and conditions (including, but not limited to, vesting) as are established
in the sole discretion of the Committee, provided such terms, provisions and
conditions are consistent with the express provisions of the Plan. The
terms, provisions and conditions may be contingent upon the passage of time,
continued service or achievement of Company or individual performance goals,
as specified by the Committee.
7. ADMINISTRATION OF THE PLAN
--------------------------
The Plan shall be administered by the Board, except to the extent the Board
designates that the Plan shall be administered by the Compensation Committee
of the Board (the Board or any such designated committee, the "Committee").
The Committee shall act pursuant to a majority vote or unanimous written
consent.
Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without
limitation: (a) to prescribe, amend and rescind rules relating to this Plan
and to define terms not otherwise defined herein; (b) to prescribe the form
of documentation used to evidence any Option or Stock Grant awarded
hereunder, including provision for such terms as it considers necessary or
desirable, not inconsistent with the terms established by the Committee; (c)
to establish and verify the extent of satisfaction of any conditions to
exercisability applicable to Options or to receipt or vesting of Stock
Grants; (d) to determine whether, and the extent to which, adjustments are
required pursuant to Section 9 hereof; and (e) to interpret and construe
this Plan, any rules and regulations under the Plan and the terms and
conditions of any Option or Stock Grant awarded hereunder, and to make
exceptions to any procedural provisions in good faith and for the benefit of
the Company.
All decisions, determinations and interpretations by the Committee regarding
the Plan, any rules and regulations under the Plan and the terms and
conditions of any Option or Stock Grant awarded hereunder, shall be final
and binding on all Participants and holders of Options and Stock Grants.
The Committee may consider such factors as it deems relevant, in its sole
and absolute discretion, in making such decisions, determinations and
interpretations including, without limitation, the recommendations or advice
of any officer or other employee of the Company and such attorneys,
consultants and accountants as it may select.
8. LOANS
-----
The Company may, if authorized by the Committee, make loans for the purpose
of enabling a Participant to exercise Options and, if applicable, receive
Common Stock awarded under the Plan and to pay the tax liability resulting
from an Option exercise or
4
<PAGE>
Stock Grant under the Plan. The Committee shall have full authority to
determine the terms and conditions of such loans. Such loans may be secured
by the shares of Common Stock received upon exercise of such Option or
receipt of such Stock Grant.
9. ADJUSTMENT OF AND CHANGES IN THE STOCK
--------------------------------------
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind of shares or securities, or if cash, property or
shares or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization,
reclassification, dividend (other than a regular, quarterly cash dividend or
an issuance of the class of securities then subject to this Plan as part of
a public or private offering thereof) or other distribution, stock split,
reverse stock split, spin-off or the like, or if substantially all of the
property and assets of the Company are sold, then, unless the terms of such
transaction shall provide otherwise, the maximum number and type of shares
or other securities that may be issued under this Plan shall be
appropriately adjusted. The Committee shall determine in its sole
discretion the appropriate adjustment, if any, to be effected pursuant to
the immediately preceding sentence. In addition, in connection with any
such change in the class of securities then subject to this Plan, the
Committee may make appropriate and proportionate adjustments in the number
and type of shares or other securities or cash or other property that may be
acquired pursuant to Options and Stock Grants theretofore awarded under this
Plan and the exercise price of such Options or price, if any, of such Stock
Grants.
No right to purchase or receive fractional shares shall result from any
adjustment in Options or Stock Grants pursuant to this Section 9. In case
of any such adjustment, the shares subject to the Option or Stock Grant
shall be rounded up to the nearest whole share of Common Stock.
10. REGISTRATION, LISTING OR QUALIFICATION OF STOCK
-----------------------------------------------
In the event that the Committee determines in its discretion that the
registration, listing or qualification of the shares of Common Stock
issuable under the Plan on any securities exchange or under any applicable
law or governmental regulation is necessary as a condition to the issuance
of such shares under the Option or Stock Grant, the Option or Stock Grant
shall not be exercisable or exercised in whole or in part unless such
registration, listing, qualification, consent or approval has been
unconditionally obtained.
11. TAXES
-----
The Committee may make such provisions or impose such conditions as it may
deem appropriate for the withholding or payment by a Participant of any
taxes which it determines are necessary or appropriate in connection with
any issuance, exercise or vesting of any Options, Stock Grants or shares
under this Plan, and the rights of a holder of an Option or Stock Grant or
shares are subject to satisfaction of such conditions. The Company shall not
be required to issue shares of Common Stock or to recognize the disposition
of such shares until such obligations are satisfied. At the Participant's
election, any such obligations may be satisfied by having the Company
5
<PAGE>
withhold a portion of the shares of Common Stock that otherwise would be
issued to the holder of the Option or Stock Grant upon exercise of the
Option or vesting or receipt of the Stock Grant or by surrendering to the
Company shares of Common Stock previously acquired, provided that such will
not result in an accounting charge to the Company. The Company and any
affiliate of the Company shall not be liable to a Participant or any other
persons as to any tax consequence expected, but not realized, by any
Participant or other person due to the receipt of any Options or shares
awarded hereunder.
12. ARBITRATION AND APPLICABLE LAW
------------------------------
Any claim, dispute or other matter in question of any kind relating to this
Plan shall be settled by arbitration before a single arbitrator (who is
mutually agreeable to the parties) and otherwise conducted in accordance
with the Rules of the American Arbitration Association (the "AAA Rules"),
which proceedings shall be held in the city in which the Company's executive
offices are located. If the parties are unable to agree upon an arbitrator,
the arbitrator shall be selected in accordance with the AAA Rules. Notice
of demand for arbitration shall be made in writing to the opposing party and
to the American Arbitration Association within a reasonable time after the
claim, dispute or other matter in question has arisen. In no event shall a
demand for arbitration be made after the date when the applicable statute of
limitations would bar the institution of a legal or equitable proceeding
based on such claim, dispute or other matter in question. The decision of
the arbitrator shall be final and may be enforced in any court of competent
jurisdiction. This Plan and any rights hereunder shall be interpreted and
construed in accordance with the laws of the State of Delaware and
applicable federal law.
13. EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
-------------------------------------------------
This Plan shall become effective upon its adoption by the Board and approval
by the Company's stockholders. Any Options and Stock Grants awarded prior
to the such date shall be contingent on such approval and, if such approval
is not obtained, shall be null and of no effect.
Unless earlier suspended or terminated by the Board, no Options or Stock
Grants may be awarded after May 1, 2009. The Board may periodically amend
the Plan as it determines appropriate, without further action by the
Company's stockholders except to the extent required by applicable law. Any
amendment to the Plan will not affect the rights and obligations arising
under Options or Stock Grants theretofore awarded and then in effect.
Notwithstanding the foregoing, and subject to adjustment pursuant to Section
9, the Plan may not be amended to increase the number of shares of Common
Stock authorized for issuance under the Plan, unless any such amendment is
approved by the Company's stockholders. The Plan may be earlier terminated
at such earlier time as the Board may determine. Termination and expiration
of the Plan will not affect the rights and obligations arising under Options
or Stock Grants theretofore awarded and then in effect.
6
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our reports dated
February 19, 1999 included in The Corporate Executive Board Company's
Registration Statement on Form S-1 file no. 333-59833, and to all references to
our firm included in this registration statement.
ARTHUR ANDERSEN LLP
Washington, D.C.
March 8, 1999
