CORPORATE EXECUTIVE BOARD CO, S-1/A, 2000-02-07

CORPORATE EXECUTIVE BOARD CO
S-1/A, 2000-02-07
MANAGEMENT CONSULTING SERVICES

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<PAGE>

As filed with the Securities and Exchange Commission on February 7, 2000

Registration No. 333-95779

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------

AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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THE CORPORATE EXECUTIVE BOARD COMPANY
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
Delaware 8742 52-2056410
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

---------------

The Corporate Executive Board Company
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 777-5000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

---------------

Clay M. Whitson
The Corporate Executive Board Company
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 777-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

---------------

Copies to:
<TABLE>
<S> <C>
Steven R. Finley, Esq. Thomas R. Brome, Esq.
Gibson, Dunn & Crutcher LLP Cravath, Swaine & Moore
200 Park Avenue 825 Eighth Avenue
New York, N.Y. 10166 New York, N.Y. 10019
(212) 351-4000 (212) 474-1000
</TABLE>

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to such
Section 8(a) may determine.

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- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED FEBRUARY 7, 2000

PROSPECTUS

4,800,000 Shares
[CORPORATE EXECUTIVE BOARD LOGO APPEARS HERE]

The Corporate Executive Board Company
Common Stock

$ per share

--------

All of the shares of common stock offered hereby are being offered by the
selling stockholders. We will not receive any of the proceeds from the sale of
shares of common stock by the selling stockholders. The underwriters named in
this prospectus may purchase up to 711,520 additional shares of our common
stock from several of the selling stockholders to cover over-allotments.

The common stock is quoted on the Nasdaq National Market under the symbol
"EXBD." The last reported sales price of the common stock on the Nasdaq
National Market on February 4, 2000 was $41.75 per share.

--------

Investing in our common stock involves risks. See "Risk Factors" beginning
on page 9.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

--------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price $ $
Underwriting Discount $ $
Proceeds to the Selling Stockholders (before expenses) $ $
</TABLE>

The underwriters are offering the shares subject to various conditions. The
underwriters expect to deliver the shares to purchasers on or about ,
2000.

--------

Salomon Smith Barney
Donaldson, Lufkin & Jenrette
Friedman Billings Ramsey
Goldman, Sachs & Co.
Merrill Lynch & Co.

, 2000
<PAGE>

[Picture of pillars and statues on a building facade with the following quote by
Victor Hugo: "A stand can be made against invasion by an army, no stand can be
made against invasion by an idea." A partial list of the Corporate Executive
Board's members is included on the inside back cover.]

<PAGE>

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. We are
not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information provided by this
prospectus is accurate as of any date other than the date on the front of this
prospectus.

----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
A Note About Forward-Looking Statements.................................. 4
Prospectus Summary....................................................... 5
Risk Factors............................................................. 9
Use of Proceeds.......................................................... 12
Price Range of Common Stock and Dividend Policy.......................... 12
Capitalization........................................................... 13
Selected Financial and Operating Data.................................... 14
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 16
Business................................................................. 20
Management............................................................... 33
Certain Relationships and Transactions................................... 42
Principal and Selling Stockholders....................................... 44
Description of Capital Stock............................................. 46
Underwriting............................................................. 48
Legal Matters............................................................ 50
Experts.................................................................. 50
Where You Can Find Additional Information................................ 50
Index to Financial Statements............................................ F-1
</TABLE>

3
<PAGE>

A NOTE ABOUT FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this prospectus, including the
section entitled "Management's Discussion and Analysis of Financial Condition
and Results of Operations", that are based on our management's beliefs and
assumptions and on information currently available to our management. Forward-
looking statements include the information concerning our possible or assumed
results of operations, business strategies, financing plans, competitive
position and potential growth opportunities. Forward-looking statements
include all statements that are not historical facts and can be identified by
the use of forward-looking terminology such as the words "believes",
"expects", "anticipates", "intends", "plans", "estimates" or similar
expressions.

Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these forward-
looking statements. You should not put undue reliance on any forward-looking
statements. We do not have any intention or obligation to update forward-
looking statements after we distribute this prospectus.

You should understand that many important factors, in addition to those
discussed elsewhere in this prospectus, could cause our results to differ
materially from those expressed in these forward-looking statements. These
factors include:

. our dependence on renewals of our membership-based services,

. our inability to know in advance if new products will be successful,

. difficulties we may experience in anticipating market trends,

. our reliance on certain key personnel,

. our need to attract and retain a significant number of highly skilled
employees,

. restrictions on selling our products and services to the health care
industry,

. continued consolidation in the financial institution industry,

. fluctuations in operating results,

. our potential inability to protect our intellectual property rights,

. our potential exposure to litigation related to content and

. our potential exposure to loss of revenue resulting from our
unconditional service guarantee.

4
<PAGE>

PROSPECTUS SUMMARY

This summary highlights selected information in this prospectus, but it may
not contain all of the information that is important to you. For a better
understanding of this offering and our results of operations and financial
condition, you should read this entire prospectus, including the "Risk Factors"
section and our financial statements and the notes to our financial statements,
which are included elsewhere in this prospectus.

The Corporate Executive Board

We provide "best practices" research and analysis focusing on corporate
strategy, operations and general management issues. Best practices research
identifies and analyzes specific management initiatives, processes and
strategies that have been determined to produce the best results in solving
common business problems or challenges.

We provide research and analysis on an annual subscription basis to a
membership of 1,480 of the world's largest and most prestigious corporations.
For a fixed annual fee, members of each subscription program have access to an
integrated set of services, including:

. best practices research studies,

. executive education seminars,

. customized research briefs and

. on-line access to the program's content database and other services.

For each of the last three years, our program renewal rate (defined as the
percentage of prior year's membership subscriptions renewed, adjusted to
reflect reductions in membership resulting from mergers and acquisitions of
members), equaled or exceeded 84%. More than 70% of the Fortune 500 companies
are members of the Corporate Executive Board.

Our membership-based model, in which all subscribers (or "members")
participate in our research and analysis, is central to our business strategy.
This model gives us access to the best business practices of our members and
enables us to provide comprehensive analysis on current business issues,
assessing the collective experiences and knowledge of our members on leading-
edge topics. By participating in the Corporate Executive Board, members can
learn about the best practices of the most progressive corporations in the
world at a fraction of the cost of a customized analysis performed by any of
the major consulting firms. We do not believe that in-house research and
analysis departments at individual corporations could obtain, at any price,
similar information from other corporations about their management practices.

In general, our membership comprises the most progressive competitors in each
industry sector. Representative members include American Express, British
Airways, Citigroup, Coca-Cola, Dell, Deutsche Bank, eBay, Hewlett-Packard,
Lucent, Merrill Lynch, Microsoft, Procter & Gamble, Xerox and Yahoo!. No one
member accounted for more than 2% of revenues in any of the last three fiscal
years. We do not know of any other entity that enables corporations to study a
broad range of the best business practices of hundreds of other business
enterprises for fixed, annual subscription fees.

We currently offer 13 discrete subscription programs, each focusing on a
single business constituency:

. human resources,

. corporate strategy,

. information technology,

5
<PAGE>

. sales,

. finance,

. legal,

. marketing,

. employee retention,

. retail banking,

. business banking,

. trust and private banking,

. insurance and

. bank operations.

We added four new subscription programs during the past two years and
anticipate adding two to three new subscription programs per year for the
foreseeable future. Each subscription program charges a separate fixed annual
subscription fee and is served by a dedicated staff of analysts and
researchers. Subscriptions generally are renewable on a 12-month basis. The
average price per subscription program at December 31, 1999 was $28,900. In
1999, we published 44 best practices research studies, completed over 11,000
customized research briefs and provided executive education services to 1,298
member corporations reaching over 30,000 executive participants. Our 243
analysts and researchers have compiled a proprietary database of 305 best
practices research studies and 33,000 customized research briefs.

Our revenue and costs have grown at compound annual rates of 37.4% and 25.4%,
respectively, from December 31, 1996 through December 31, 1999. Because each
subscription program provides our membership with standardized best practices
research studies and executive education seminars, new members immediately add
to our revenues while only incrementally increasing our operating costs. Our
growth strategy is to cross-sell additional subscription programs to existing
members, to add new members and to develop new subscription programs and
research products.

We maintain our executive offices in Washington, D.C. at 2000 Pennsylvania
Avenue, N.W., Washington, D.C. 20006. Our telephone number is (202) 777-5000.

6
<PAGE>

The Offering

<TABLE>
<C> <S>
Common stock offered by the selling
stockholders.............................. 4,800,000 shares
Common stock to be outstanding after the
offering.................................. 15,303,015 shares
Use of proceeds............................ We will not directly receive any proceeds
from the sale of the common stock. Since a
number of the shares being offered will be
issued upon the exercise of currently
outstanding stock options, we will receive
$4.3 million from the selling stockholders in
payment of their option exercise prices. We
will use these funds for general corporate
purposes.
Other effects of stock option exercises.... We will incur compensation expense in the
first quarter of $ reflecting
additional Federal Insurance Corporation Act
taxes that we will become obligated to pay as
a result of the taxable income that our
employees will receive upon exercise of these
options. We will incur additional
compensation expense for tax reporting
purposes, but not for financial reporting
purposes, that will increase our deferred tax
asset by $ , to reflect allowable tax
deductions that will be realized in the
determination of our income tax liability and
therefore reduce our future income tax
payments. Although our provision for income
taxes for financial reporting purposes will
not change, our actual cash payments will be
reduced as we utilize our deferred tax asset.
As a result of the receipt of cash for the
exercise of options and the recognition of a
deferred tax asset, our stockholders' equity
will increase to $ . If these
options had been exercised on December 31,
1999, our fully diluted shares outstanding
would have increased by approximately 650,000
shares.
Nasdaq National Market symbol.............. EXBD
</TABLE>

Unless we specifically state otherwise, the information in this prospectus
does not take into account the sale of up to 711,520 shares of common stock
that the underwriters have the option to purchase from some of the selling
stockholders solely to cover over-allotments.

The number of shares to be outstanding after the offering does not include
3,459,365 shares that may be issued upon the exercise of currently outstanding
stock options. The average exercise price of these options is $6.70. The number
of shares to be outstanding after the offering also does not include options
under our 1999 Stock Option Plan and our Directors Stock Plan that will be
granted upon the closing of this offering.

Risk Factors

See "Risk Factors" beginning on page 9 for a discussion of material risks
that you should consider before purchasing our common stock.

7
<PAGE>

SUMMARY FINANCIAL AND OPERATING DATA

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1995 1996 1997 1998 1999
-------- ------- ------- ------- -------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Statements of Income Data:
Revenues............................ $ 17,547 $27,283 $38,669 $53,030 $70,767
Costs and expenses:
Cost of services................... 10,849 15,078 20,036 25,373 28,602
Member relations and marketing..... 5,275 6,677 8,106 11,676 15,525
General and administrative......... 2,589 3,832 5,660 6,920 8,485
Depreciation....................... 233 452 722 885 1,318
Stock option restructuring and
repurchase and special bonus
plan(1)........................... 9,390 1,473 3,063 5,342 383
-------- ------- ------- ------- -------
Total costs and expenses.......... 28,336 27,512 37,587 50,196 54,313
-------- ------- ------- ------- -------
Income (loss) from operations....... (10,789) (229) 1,082 2,834 16,454
Interest income..................... -- -- 122 786 1,114
-------- ------- ------- ------- -------
Income (loss) before provision
(benefit) for income taxes......... (10,789) (229) 1,204 3,620 17,568
Provision (benefit) for income
taxes(2)........................... (1,076) (23) 120 361 4,322
-------- ------- ------- ------- -------
Net income (loss)................... $ (9,713) $ (206) $ 1,084 $ 3,259 $13,246
======== ======= ======= ======= =======
Earnings (loss) per share--
basic(2)........................... $ (0.78) $ (0.02) $ 0.09 $ 0.26 $ 1.00
Weighted average shares
outstanding--basic................. 12,504 12,504 12,504 12,504 13,223
Earnings (loss) per share--
diluted(2)......................... $ (0.78) $ (0.02) $ 0.08 $ 0.22 $ 0.83
Weighted average shares
outstanding--diluted............... 12,504 12,504 13,752 14,950 16,027
</TABLE>

<TABLE>
<CAPTION>
As of December 31,
-------------------------------------------------------
1999
1995 1996 1997 1998 1999 Pro forma(3)
------ ------ ------- ------- ------- ------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash, cash equivalents
and marketable
securities............. $ -- $ -- $12,691 $16,104 $33,074 $37,342
Deferred income taxes... 1,100 956 1,150 1,438 8,047
Working capital......... (3,530) (4,645) (5,005) (8,721) (11,610)
Total assets............ 18,568 23,107 39,868 48,928 81,764
Deferred revenues....... 15,382 21,696 31,474 39,061 55,436
Total stockholders'
equity (deficit)....... (7,205) (7,411) (5,042) (8,147) 10,846
</TABLE>

<TABLE>
<CAPTION>
December 31,
-----------------
1997 1998 1999
----- ----- -----
<S> <C> <C> <C> <C> <C>
Other Operating Data:
Subscription programs.. 9 10 12
Member
institutions(4)....... 1,151 1,333 1,480
Total membership
subscriptions(4)...... 1,808 2,263 2,790
Average subscription
programs per
member(4)............. 1.57 1.70 1.89
Program renewal
rate(5)............... 85% 85% 84%
</TABLE>
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(1) Reflects charges relating to agreements with certain employees to
repurchase outstanding stock options at fixed amounts and the substitution
of our stock options for those of The Advisory Board Company, as well as
special bonus plan charges. See note (1) to the Selected Financial and
Operating Data table for a discussion of these charges.
(2) Prior to our initial public offering in February 1999, we had elected to be
taxed under subchapter S of the Internal Revenue Code. In February 1999, we
terminated our S corporation election and became subject to U.S. Federal
and state income taxes at prevailing corporate rates. See note (2) to the
Selected Financial and Operating Data table for a discussion of results if
we had been taxed under subchapter C of the Internal Revenue Code for U.S.
Federal and state income tax purposes.

(3) Assumes that the exercise by selling stockholders of options to purchase an
aggregate of 1,733,055 shares of common stock to be sold in this offering
took place at December 31, 1999. See note (3) to the Selected Financial and
Operating Data table for a discussion of the effects of that exercise.
(4) This information includes our estimate of pending membership renewals and
an estimate of members who will discontinue their membership prior to their
annual renewal date in the subsequent year.
(5) For the year then ended. Program renewal rate is defined as the percentage
of memberships renewed for the year, adjusted to reflect reductions in
memberships resulting from mergers and acquisitions of members.

8
<PAGE>

RISK FACTORS

In addition to the other information contained in this prospectus, you
should carefully consider the following risk factors in evaluating us and our
business before purchasing any shares of our common stock.

We depend on renewals of our membership-based services.

We derive all of our revenues from annual membership subscriptions for our
products and services. Our prospects therefore depend on our ability to
achieve and sustain high renewal rates on existing subscription programs and
to enter into new membership arrangements. Failure to achieve high membership
renewal rate levels would have a material adverse effect on our operating
results. Our ability to secure membership renewals depends upon our ability to
deliver consistent, high-quality and timely research and analysis with respect
to issues, developments and trends that members view as important. We cannot
assure you that we will be able to sustain the necessary level of performance
to achieve a high rate of membership renewals. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business."

We cannot know in advance if new products will be successful.

Our future success will depend on our ability to develop new subscription
programs that address specific industry and business constituencies and the
changing needs of our current and prospective members for information,
analysis and advice. We cannot assure you that our efforts to introduce new
subscription programs will be successful. The process of internally
researching, developing, launching and gaining client acceptance of new
subscription programs is time-consuming, expensive and inherently risky.
Delays or failures during development or implementation, or lack of market
acceptance of new subscription programs, could have a material adverse effect
on our business, financial condition and results of operations. Our business,
financial condition and results of operations would be materially adversely
affected if we were unable to develop and introduce successful new
subscription programs or other new products, or to make enhancements to
existing subscription programs in a timely manner in response to member
requirements. See "Business--Products and Services."

We may experience difficulties in anticipating market trends.

Our future success also will depend upon our ability to anticipate rapidly
changing market trends and to adapt our research and analysis to meet the
changing information needs of our members. We may fail to continue to provide
helpful and timely research and analysis of developments and trends in a
manner that meets market needs. Any such failure would have a material adverse
effect on our business, financial condition and results of operations. The
industry and business sectors that we analyze undergo frequent and often
dramatic changes, including the introduction of new and the obsolescence of
old products, shifting strategies and market positions of major industry
participants and changing objectives and expectations of users of members'
products and services. This environment of rapid and continuous change
presents significant challenges to our ability to provide our members with
current and timely research and analysis on issues of importance. Meeting
these challenges requires the commitment of substantial resources.

We rely heavily on certain key personnel.

Our future success will depend to a significant degree upon the continued
services of certain key management, research, sales and product development
personnel and on our ability to continue to motivate and retain these highly
qualified employees. If we are unable to retain and motivate these key
personnel, our results of operations will be adversely affected. Our key
personnel include Jeffrey D. Zients, the Chairman of our Board of Directors,
James J. McGonigle, our Chief Executive Officer, Clay M. Whitson, our Chief
Financial Officer, Sally Chang, our General Manager, Sales and Marketing, and
Derek C. M. van Bever, our Chief Research Officer.

9
<PAGE>

We also must attract and retain a significant number of highly-skilled
employees.

Our future success also will depend upon our ability to hire, train,
motivate and retain a significant number of highly-skilled employees,
particularly research analysts and sales and marketing staff. Our inability to
do so would have a material adverse effect on our business. We have
experienced, and expect to continue to experience, intense competition for
professional personnel from management consulting firms and other producers of
research and analysis products and services. Many of these firms have
substantially greater financial resources than we do to attract and compensate
qualified personnel. We cannot assure you that we will be successful in
attracting a sufficient number of highly-skilled employees in the future, or
that we will be successful in training, motivating and retaining the employees
we are able to hire. See "Business--Employees."

We are restricted from selling our products and services to the health care
industry.

At the time of our initial public offering, we entered into an agreement
with The Advisory Board Company that restricts us from selling our membership-
based subscription products and services to companies principally engaged in
the health care business, although we may sell such products and services to
non-health care divisions or subsidiaries of health care companies. This
restriction may limit our future growth opportunities. See "Certain
Relationships and Transactions--Noncompetition Agreement" for a more detailed
discussion of this agreement.

Continued consolidation in the financial institution industry may adversely
affect our business.

The financial services industry is continuing to experience substantial
consolidation. This consolidation has resulted, and is expected to continue to
result, in a reduction in the number of our financial institution members. We
cannot assure you that this consolidation will not materially and adversely
affect our results of operations. At December 31, 1999, approximately 40% of
our Contract Value was attributable to financial institution members, which
include commercial banks, thrifts, credit unions, credit card issuers, mutual
fund companies, consumer credit lenders, brokerage houses, private and trust
banks and insurance companies. We calculate Contract Value as the aggregate
annualized subscription membership revenue attributed to all subscription
membership agreements in effect at a given time, without regard to the
remaining duration of any such agreement, including an estimate of pending
subscription membership renewals and an estimate of members who will
discontinue their membership prior to their annual renewal date in the
subsequent year.

We may experience fluctuations in operating results.

Our operating results may fluctuate significantly due to various factors,
including the growth in and timing of new memberships, the timing of the
development, introduction and marketing of new products and services, the
timing of the hiring of research analysts and sales and marketing staff,
changes in the spending patterns of our members, our accounts receivable
collection experience, changes in market demand for research and analysis,
foreign currency exchange rate fluctuations, competitive conditions in the
industry and general economic conditions. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

We may be unable to protect our intellectual property rights.

We rely on copyright laws, as well as nondisclosure and confidentiality
arrangements, to protect our proprietary rights in our products and services.
We cannot assure you that the steps we have taken to protect our intellectual
property rights will be adequate to deter misappropriation of our rights or
that we will be able to detect unauthorized uses and take timely and effective
steps to enforce our rights. If substantial and material unauthorized uses of
our proprietary products and services were to occur, we would be required to
engage in costly and time-consuming litigation to enforce our rights. We
cannot assure you that we would prevail in such litigation. If others were
able to use our intellectual property, our ability to charge our fees for our
products and services would be adversely affected.

10
<PAGE>

We may be exposed to litigation related to content.

As a publisher and distributor of original research and analysis and user of
licensed third-party content, we face potential liability for defamation,
negligence and copyright and trademark infringement. Any such litigation,
whether or not resulting in a judgment against us, could have a material
adverse effect on our financial condition and results of operations. Third-
party content includes information created or provided by information services
organizations and consultants whom we retain and may be delivered in writing,
over the internet or orally to clients.

We may be exposed to loss of revenue resulting from our unconditional service
guarantee.

We offer an unconditional service guarantee to our members. At any time, a
member may demand a pro rata refund of its subscription fee for a program.
Requests for refunds of subscription fees by a significant number of our
members could have a material adverse effect on our financial condition and
results of operations.

11
<PAGE>

USE OF PROCEEDS

All of the shares of common stock being sold in the offering are being sold
by the selling stockholders. We will not directly receive any proceeds from
the sale of the common stock. Since a number of the shares being offered will
be issued upon the exercise of currently outstanding stock options, we will
receive $4.3 million from the selling stockholders in payment of their option
exercise prices. If the underwriters fully exercise their over-allotment
option, we will receive an additional $0.2 million from the selling
stockholders in payment of the additional option exercise prices. We will use
these funds for general corporate purposes.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

Our common stock has been quoted on the Nasdaq National Market under the
symbol "EXBD" since our initial public offering on February 23, 1999. The
following table sets forth, for the periods indicated, the high and low sales
prices per share of our common stock as reported on the Nasdaq National
Market.

<TABLE>
<CAPTION>
High Low
------- -------
<S> <C> <C>
1999:
First quarter (from February 23, 1999)................. $27.875 $22.500
Second quarter......................................... 39.000 25.000
Third quarter.......................................... 41.375 31.375
Fourth quarter......................................... 57.125 36.750
2000:
First quarter (through February 4, 2000)............... $56.250 $40.500
</TABLE>

On February 4, 2000, the last reported sale price of our common stock on the
Nasdaq National Market was $41.75 per share. As of February 3, 2000, there
were approximately 40 holders of record of our common stock.

We have not declared or paid any dividend on our common stock since the
closing of our initial public offering. We do not anticipate declaring or
paying dividends in the foreseeable future. The timing and amount of future
dividends, if any, would be determined by our Board of Directors and would
depend upon our earnings, financial condition and cash requirements.

12
<PAGE>

CAPITALIZATION

The following table sets forth our capitalization at December 31, 1999, and
adjusts that information as of December 31, 1999 to give effect to the
offering. You should read this table in conjunction with the financial
statements and notes to the financial statements included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
December 31, 1999
-----------------------
Actual As adjusted(1)
------- --------------
(in thousands)
<S> <C> <C>
Cash, cash equivalents and marketable securities......... $33,074 $37,342
======= =======
Preferred stock, par value $0.01; 5,000,000 shares
authorized, no shares issued and outstanding............ -- --
Common stock, par value $0.01; 100,000,000 shares
authorized, 13,569,960 shares issued and outstanding
(actual), 15,303,015 shares issued and outstanding (as
adjusted)(2)............................................ 136 153
Additional paid-in-capital............................... 269
Deferred compensation.................................... (570)
Retained earnings........................................ 11,691
Accumulated elements of comprehensive income............. (680)
------- -------
Total capitalization................................... $10,846
======= =======
</TABLE>
- --------
(1) Adjusted information reflects the effects of the option exercises as
described in note (3) to the Selected Financial and Operating Data table.

(2) Does not include options to purchase 3,459,365 shares of common stock
outstanding under our various option plans, which have a weighted average
exercise price of $6.70 per share.

13
<PAGE>

SELECTED FINANCIAL AND OPERATING DATA

The following table sets forth selected financial and operating data. The
selected balance sheet data presented below as of December 31, 1996, 1997,
1998 and 1999, and the selected statements of income data for each of the
years in the five-year period ended December 31, 1999, have been derived from
our financial statements which have been audited by Arthur Andersen LLP,
independent public accountants. The selected balance sheet data presented
below as of December 31, 1995 have been derived from our unaudited financial
statements, which have been prepared on the same basis as our audited
financial statements. You should read the selected financial data presented
below in conjunction with our financial statements, the notes to our financial
statements and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1995 1996 1997 1998 1999
-------- ------- ------- ------- -------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Statements of Income Data:
Revenues............................ $ 17,547 $27,283 $38,669 $53,030 $70,767
Costs and expenses:
Cost of services.................. 10,849 15,078 20,036 25,373 28,602
Member relations and marketing.... 5,275 6,677 8,106 11,676 15,525
General and administrative........ 2,589 3,832 5,660 6,920 8,485
Depreciation...................... 233 452 722 885 1,318
Stock option restructuring and
repurchase and special bonus
plan(1).......................... 9,390 1,473 3,063 5,342 383
-------- ------- ------- ------- -------
Total costs and expenses........ 28,336 27,512 37,587 50,196 54,313
-------- ------- ------- ------- -------
Income (loss) from operations....... (10,789) (229) 1,082 2,834 16,454
Interest income..................... -- -- 122 786 1,114
-------- ------- ------- ------- -------
Income (loss) before provision
(benefit) for income taxes. (10,789) (229) 1,204 3,620 17,568
Provision (benefit) for income
taxes(2)........................... (1,076) (23) 120 361 4,322
-------- ------- ------- ------- -------
Net income (loss)................... $ (9,713) $ (206) $ 1,084 $ 3,259 $13,246
======== ======= ======= ======= =======
Earnings (loss) per share--
basic(2)........................... $ (0.78) $ (0.02) $ 0.09 $ 0.26 $ 1.00
Weighted average shares
outstanding--basic................. 12,504 12,504 12,504 12,504 13,223
Earnings (loss) per share--
diluted(2)......................... $ (0.78) $ (0.02) $ 0.08 $ 0.22 $ 0.83
Weighted average shares
outstanding--diluted............... 12,504 12,504 13,752 14,950 16,027
</TABLE>

<TABLE>
<CAPTION>
As of December 31,
------------------------------------------------------
1999 Pro
1995 1996 1997 1998 1999 forma(3)
------- ------- ------- ------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash, cash equivalents
and marketable
securities............. $ -- $ -- $12,691 $16,104 $ 33,074 $37,342
Deferred income taxes... 1,100 956 1,150 1,438 8,047
Working capital......... (3,530) (4,645) (5,005) (8,721) (11,610)
Total assets............ 18,568 23,107 39,868 48,928 81,764
Deferred revenues....... 15,382 21,696 31,474 39,061 55,436
Total stockholders'
equity (deficit)....... (7,205) (7,411) (5,042) (8,147) 10,846
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
December 31,
-----------------
1997 1998 1999
----- ----- -----
<S> <C> <C> <C>
Other Operating Data:
Subscription programs......................................... 9 10 12
Member institutions(4)........................................ 1,151 1,333 1,480
Total membership subscriptions(4)............................. 1,808 2,263 2,790
Average subscription programs per member(4)................... 1.57 1.70 1.89
Program renewal rate(5)....................................... 85% 85% 84%
</TABLE>
- --------

(1) Prior to our spin-off from The Advisory Board Company in October 1997, The
Advisory Board Company entered into agreements with certain employees to
repurchase outstanding stock options at fixed amounts. For background
information on the spin-off, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview." We assumed the
obligations under these agreements in the spin-off to the extent they were
attributable to our employees. We reflect the charges relating to these
agreements as stock option repurchase expenses over the required
employment period ending December 31, 1998. In addition, we substituted
our stock options for The Advisory Board Company stock options in the
spin-off. The terms of the stock option substitution resulted in
compensation expense being charged for the intrinsic value of certain
stock options. We reflect these charges as stock option restructuring
expenses over the vesting period of the options. We will continue to
recognize compensation expense related to certain substitution agreements
of approximately $0.4 million in 2000 and $0.2 million in 2001.
Furthermore, in December 1998, we and our principal stockholder at the
time agreed to make certain payments in the aggregate amount of $2.4
million to selected employees under a special bonus plan. We recorded the
special bonus plan charge of $2.4 million at the time of the commitment in
December 1998. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation--Years Ended December 31, 1997, 1998
and 1999--Stock option restructuring and repurchase and special bonus
plan."

(2) Prior to our initial public offering in February 1999, we had elected to
be taxed under subchapter S of the Internal Revenue Code. In February
1999, we terminated our S corporation election and became subject to U.S.
Federal and state income taxes at prevailing corporate rates. If we had
elected to be taxed under subchapter C of the Internal Revenue Code for
U.S. Federal and state income tax purposes beginning January 1, 1995 and
recorded income tax expense using an annual effective rate of 41.0%, pro
forma net income (loss) and basic and diluted earnings (loss) per share
would have been $(6.4) million, $(0.51) and $(0.51), respectively, for
1995, $(0.1) million, $(0.01) and $(0.01), respectively, for 1996, $0.7
million, $0.06 and $0.05, respectively, for 1997, $2.1 million, $0.17 and
$0.14, respectively, for 1998, and $10.4 million, $0.78 and $0.65,
respectively, for 1999.

(3) The pro forma balance sheet data assumes that the exercise by selling
stockholders of options to purchase an aggregate of 1,733,055 shares of
common stock to be sold in this offering took place at December 31, 1999.
As a result of the exercise of the options to purchase common stock, we
would (i) receive a cash payment of $4.3 million representing the
aggregate option exercise prices paid by the employees, (ii) incur
additional compensation expense of $ representing additional Federal
Insurance Corporation Act taxes that we will become obligated to pay as a
result of the taxable income that our employees will recognize upon the
exercise of these options, and (iii) increase our deferred tax asset by
$ to reflect allowable tax deductions that will be realized in the
determination of our income tax liability and therefore reduce our future
income tax payments.

(4) This information includes our estimate of pending membership renewals and
an estimate of members who will discontinue their membership prior to
their annual renewal date in the subsequent year.

(5) For the year then ended. Program renewal rate is defined as the percentage
of memberships renewed for the year, adjusted to reflect reductions in
memberships resulting from mergers and acquisitions of members.

15
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This discussion and analysis and the accompanying financial statements
present our results of operations as if we had operated as a stand-alone
entity in accordance with the accounting rules prescribed for "carve-out"
financial statements. We were incorporated on September 11, 1997. Our business
was operated as a division of The Advisory Board Company until October 31,
1997 when the business was contributed to us and spun-off to The Advisory
Board Company's sole stockholder. On February 23, 1999, certain of our
stockholders sold 9,415,280 shares of our common stock in an initial public
offering.

Subscription memberships, which are annually renewable contracts, are
generally payable by members at the beginning of the contract term. Billings
attributable to our subscription programs are recorded initially as deferred
revenues and then recognized pro rata over the subscription contract term.

Over the last three years, our revenues have grown at a compound annual
growth rate of 37.4% from $27.3 million in 1996 to $70.8 million in 1999,
while costs have grown at a compound annual growth rate of 25.4% from $27.5
million in 1996 to $54.3 million in 1999, resulting in operating losses prior
to 1997 and income from operations of $1.1 million, $2.8 million and $16.5
million for 1997, 1998 and 1999. We attribute the growth in revenues to an
increase in the number of memberships which has been driven primarily by new
sales for existing subscription programs and the introduction of new
subscription programs. The increase in costs is a function of the growth in
memberships and subscription programs and investments in certain
administrative functions. Stock option restructuring and repurchase charges
also affect costs as further explained below.

One measure of our business is our annualized "Contract Value," which we
calculate as the aggregate annualized subscription membership revenue
attributed to all subscription membership agreements in effect at a given
point in time without regard to the remaining duration of any such agreement,
including an estimate of pending subscription membership renewals and an
estimate of members who will discontinue their subscription membership prior
to their annual renewal date in the subsequent year. Our experience is that a
substantial portion of members renews subscriptions for an equal or higher
level each year. Contract Value has grown at a compound annual growth rate of
31.3% over the past three years and was $80.6 million at December 31, 1999.

Our operating costs and expenses consist of cost of services, member
relations and marketing, general and administrative expenses and depreciation.
Cost of services represents the costs associated with the production and
delivery of our products and services, including compensation of research
personnel and in-house faculty, the production of published materials, the
organization of member meetings and all associated support services. Member
relations and marketing expenses include the costs of acquiring new members
and renewing existing members and also include compensation expenses
(including sales commissions), travel and all associated support services.
General and administrative expenses include the costs of human resources and
recruiting, finance and accounting, management information systems, facilities
management, new product development and other administrative functions.

16
<PAGE>

Results of Operations

The following table sets forth certain financial data as a percentage of
total revenues for the periods indicated:

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Revenues............................................ 100.0% 100.0% 100.0%
Cost of services.................................. 51.8 47.8 40.4
------- ------- -------
Gross profit.................................... 48.2 52.2 59.6
Costs and expenses:
Member relations and marketing.................... 21.0 22.0 21.9
General and administrative........................ 14.6 13.1 12.0
Depreciation...................................... 1.9 1.7 1.9
Stock option restructuring and repurchase and
special bonus plan............................... 7.9 10.1 0.5
------- ------- -------
Total costs and expenses........................ 45.4 46.9 36.3
------- ------- -------
Income from operations.............................. 2.8 5.3 23.3
Interest income..................................... 0.3 1.5 1.6
------- ------- -------
Income before provision for income taxes............ 3.1 6.8 24.9
Provision for income taxes.......................... 0.3 0.7 6.2
------- ------- -------
Net income.......................................... 2.8% 6.1% 18.7%
======= ======= =======
</TABLE>

Years Ended December 31, 1997, 1998 and 1999

Revenues. Total revenues increased 37.1% from $38.7 million for 1997 to
$53.0 million for 1998, and 33.4% to $70.8 million for 1999. The increase in
revenues was primarily attributable to increased sales of subscriptions for
existing research programs, the introduction of new subscription programs and,
to a lesser degree, price increases. We introduced two new subscription
programs in 1997, one new subscription program in 1998 and two new
subscription programs in 1999.

Cost of services. Cost of services increased 26.6% from $20.0 million for
1997 to $25.4 million for 1998, and 12.7% to $28.6 million for 1999. The
increase in cost of services was principally due to increased research
staffing and related compensation costs to support the introduction of new
subscription programs and an increase in short answer research and executive
education services staffing to serve the growing membership base across all
programs. Cost of services as a percentage of revenues decreased from 51.8%
for 1997 to 47.8% for 1998, and to 40.4% for 1999. This decrease was
attributable to the fixed nature of the production costs of best practices
research studies, as growth in the number of subscription memberships does not
significantly affect these costs.

Member relations and marketing. Member relations and marketing costs
increased 44.0% from $8.1 million for 1997 to $11.7 million for 1998, and
33.0% to $15.5 million for 1999. The increase in member relations and
marketing costs was primarily due to the increase in sales staff and related
costs, the increase in commission expense associated with increased revenues,
and the increase in member relations personnel and related costs to serve the
expanding membership base. Although we have added member relations and
marketing resources to increase revenues, member relations and marketing costs
have remained largely consistent as a percentage of total revenues from 1997
to 1999.

General and administrative. General and administrative expenses increased
22.3% from $5.7 million for 1997 to $6.9 million for 1998, and 22.6% to $8.5
million for 1999. The increase in general and administrative expenses resulted
primarily from staffing increases in general management, human resources and
recruiting, finance and accounting, management information systems, and
facilities management to support our overall growth. Although general and
administrative expenses have increased, general and administrative expenses
have

17
<PAGE>

decreased as a percentage of total revenues from 1997 to 1999 due to the
relatively fixed nature of many of these costs.

Depreciation. Depreciation expense increased 22.6% from $0.7 million for
1997 to $0.9 million for 1998, and 48.9% to $1.3 million for 1999. The
increase in depreciation expense was due to purchases of computer and
telephone equipment, software and office furniture and capitalization of
leasehold improvements for the new office facilities required to support
organizational growth.

Stock option restructuring and repurchase and special bonus plan. We
recognized $3.1 million, $2.9 million, and $0.4 million for 1997, 1998 and
1999 related to stock option agreements in existence at the time of the spin-
off. In connection with the spin-off, we executed substitution agreements with
each of our employees participating in The Advisory Board Company stock option
plan. These substitution agreements resulted in compensation expense being
recognized by us over the vesting period. We will continue to recognize
compensation expense related to certain substitution agreements estimated at
$0.4 million in 2000 and $0.2 million in 2001. In addition, in December 1998,
we and our principal stockholder agreed to make payments in an aggregate
amount of $2.4 million to selected employees under a special bonus plan, and
we recorded the full amount of that charge at that time.

Provision for income taxes. We recorded a provision for income taxes of $0.1
million, $0.4 million, and $4.3 million for 1997, 1998 and 1999. Prior to
February 22, 1999, we were treated as an S corporation for Federal income tax
purposes and recognized income taxes only related to the District of Columbia.
However, just prior to our initial public offering, we terminated our S
corporation status and are now subject to Federal and state income taxes at
prevailing corporate rates. The difference in the effective income tax rates
for 1997, 1998 and 1999 primarily reflects the termination of the S
corporation status just prior to the initial public offering in February 1999
and the benefit of Federal income tax incentives associated with the location
of our new office facilities. If we had elected to be taxed under subchapter C
of the Internal Revenue Code for U.S. Federal and state income tax purposes
beginning January 1, 1997 and recorded income tax expense using an annual
effective rate of 41.0%, pro forma net income and basic and diluted earnings
per share would have been $0.7 million, $0.06 and $0.05 for 1997, $2.1
million, $0.17 and $0.14 for 1998 and $10.4 million, $0.78 and $0.65 for 1999.

Gross profit trend. Historically, the gross margin (gross profit as a
percentage of total revenues) has fluctuated based upon the growth in revenues
offset by the cost of delivering best practices research studies, the timing
of executive education seminars, the volume of customized research briefs and
the hiring of personnel. Accordingly, the gross margin for 1999 may not be
indicative of future results.

Liquidity and Capital Resources

We have financed our operations to date through funds generated from
operating activities. Subscription memberships, which are annually renewable
contracts, are generally payable by members at the beginning of the contract
term. The combination of revenue growth and advance payment of subscription
memberships has resulted historically in operating activities generating net
positive cash flows. We generated net cash flows from operating activities of
$13.6 million, $17.8 million and $26.3 million for 1997, 1998 and 1999. For
1997 and 1998, operating cash flow was generated primarily by increased
revenues and related changes in the balance sheet accounts. For 1999,
operating cash flow was generated primarily by increased revenues, the use of
tax deductions associated with the exercise of non-qualified stock options and
related changes in the balance sheet accounts. As of December 31, 1998 and
1999, we had cash, cash equivalents and marketable securities of $16.1 million
and $33.1 million. Management expects that its current cash and cash
equivalents and marketable securities balances and net positive cash flows
from operations will satisfy working capital, financing activities and capital
expenditure requirements for at least the next 12 months.

Net cash flows used in investing activities during 1997, 1998 and 1999 were
$11.8 million, $2.2 million and $11.4 million. Net cash flows used in
investing activities during 1997 were attributable to the additional
investment in property and equipment of $1.5 million, the lending of $6.5
million under a note agreement to our

18
<PAGE>

previous sole stockholder and the purchase (sale) of marketable securities of
$3.8 million. Net cash flows used in investing activities during 1998 were
attributable primarily to the additional investment in property and equipment
of $2.1 million. Net cash flows used in investing activities during 1999
related to the additional investment in property and equipment of $7.3 million
and the purchase (sale) of marketable securities of $10.6 million offset by
the repayment of a note receivable from our previous sole stockholder.

Net cash flows provided by financing activities during 1997 were $7.2
million. Net cash flows used in financing activities during 1998 and 1999 were
$12.3 million and $7.4 million. Net cash flows provided by financing
activities during 1997 were attributable to the administrative and facilities
management services provided to us by The Advisory Board Company. Amounts owed
to or to be received from The Advisory Board Company are recorded in the due
to/due from affiliate account. Net cash flows used in financing activities
during 1998 were attributable to the payment to The Advisory Board Company for
the administrative and facilities management services provided to us, the
distribution to our previous sole stockholder of $6.9 million to pay income
taxes on our S corporation earnings and to distribute our estimated
undistributed taxed or taxable earnings, and the payment of $2.6 million for
stock option agreements with certain employees prior to the spin-off relating
to the repurchase of stock options at fixed amounts. Net cash flows used in
financing activities during 1999 were attributable to agreements with certain
employees prior to the spin-off relating to the repurchase of stock options at
fixed amounts. We paid $3.1 million related to these agreements in 1999, and
are obligated to pay an additional $4.7 million in 2000. We also distributed
$4.0 million to our previous sole stockholder. In addition, we paid $1.7
million in expenses related to our initial public offering, which is treated
for accounting purposes as a distribution to our previous sole stockholder.

We have obtained a commitment for a $10.0 million, 12-month revolving line
of credit from a commercial bank. In addition, we have entered into a $1.3
million letter of credit agreement, expiring June 2003, with a commercial bank
to provide a security deposit for our office space lease. We pledged certain
of our assets as collateral under the letter of credit agreement.

As a result of the exercise by employees of options to purchase an aggregate
of 1,733,055 shares which are being sold in this offering, we will receive
$4.3 million in cash in payment of the option exercise prices. We will incur
compensation expense in the quarter in which the offering occurs of $
reflecting additional Federal Insurance Corporation Act taxes that we will
become obligated to pay as a result of the taxable income that our employees
will receive upon exercise of these options. We will incur additional
compensation expense for tax reporting purposes, but not for financial
reporting purposes, that will increase our deferred tax asset by $ to
reflect allowable tax deductions that will be realized in the determination of
our income tax liability. We expect to be able to use this deferred tax asset
to reduce our future income tax payments. Although our provision for income
taxes for financial reporting purposes will not change, our actual cash
payments will be reduced as we utilize our deferred tax asset. As a result of
the receipt of cash for the exercise of options and the recognition of
deferred tax asset, our stockholders' equity will increase to $ . If
these options had been exercised on December 31, 1999, our fully diluted
shares outstanding would have increased by approximately 650,000 shares.

Market Risk

We are exposed to interest rate risk primarily through our portfolio of cash
equivalents and marketable securities, which is designed for safety of
principal and liquidity and consists primarily of Washington, D.C. municipal
and agency fixed income securities. This portfolio is subject to inherent
interest rate risk as investments mature and are re-invested at current market
interest rates. We currently do not use derivative financial instruments to
adjust our portfolio risk or income profile.

19
<PAGE>

BUSINESS

Overview

. best practices research studies,

. executive education seminars,

. customized research briefs and

. on-line access to the program's content database and other services.

For each of the last three years, our program renewal rate (defined as the
percentage of prior year's membership subscriptions renewed, adjusted to
reflect reductions in membership resulting from mergers and acquisitions of
members) equaled or exceeded 84%. More than 70% of the Fortune 500 companies
are members of the Corporate Executive Board.

In general, our membership comprises the most progressive competitors in
each industry sector. Representative members include American Express, British
Airways, Citigroup, Coca-Cola, Dell, Deutsche Bank, eBay, Hewlett-Packard,
Lucent, Merrill Lynch, Microsoft, Procter & Gamble, Xerox and Yahoo!. No one
member accounted for more than 2% of revenues in any of the last three fiscal
years. We do not know of any other entity that enables corporations to study a
broad range of the best business practices of hundreds of other business
enterprises for fixed, annual subscription fees.

We currently offer 13 discrete subscription programs, each focusing on a
single business constituency:

. human resources,

. corporate strategy,

. information technology,

. sales,

. finance,

. legal,

. marketing,

. employee retention,

. retail banking,

. business banking,

. trust and private banking,

. insurance and

. bank operations.

20
<PAGE>

Our revenue and costs have grown at compound annual rates of 37.4% and
25.4%, respectively, from December 31, 1996 through December 31, 1999. Because
each subscription program provides our membership with standardized best
practices research studies and executive education seminars, new members
immediately add to our revenues while only incrementally increasing our
operating costs. Our growth strategy is to cross-sell additional subscription
programs to existing members, to add new members and to develop new
subscription programs and research products.

Industry Background

Corporations today are experiencing greater competitive demands and facing
increasingly complex strategic and operational issues. The globalization of
the economy, the transformation from an industrial era to an information age,
the accelerating pace of technological change and the emergence of e-commerce
are dramatically altering the business environment. In response to these
trends, companies are exploring new business strategies as well as
reevaluating the performance of individual departments within their
organizations in order to maintain their competitive edge. The pace of change
is driving a greater interest in gaining access to leading management
practices and solutions to common business problems on a cross-industry basis.

Capitalizing on the growing demand for information on business and
management issues, the professional information services industry has
experienced significant growth over the past few years. Participants in the
industry have approached the market for business-focused information by
offering a variety of products and services, including market research,
strategic planning, implementation services and educational programs. Services
also differ by the level of engagement, with some offering project-driven or
long-term consulting contracts, and others providing continuous research
publishing. Within this broad industry, the management consulting segment and
the training and development segment have emerged as key segments,
representing $53 billion and $60 billion in 1998 revenues, respectively. Other
entities, such as trade associations, non-profit think-tanks and research and
database companies, also offer research, consulting and education services.

We offer a distinctive approach that combines many of the benefits of
general management consulting and training and development firms. Our research
and analysis covers the same major business issues generally addressed by
management consulting firms, such as issues concerning managing growth,
reducing costs, outsourcing and developing strategy. What makes our approach
distinctive is that we provide the same, standardized product to our entire
membership at a fraction of the cost of consulting services to each individual
member. In common with training and development firms, we offer education
services both on-site at member institutions and in large multi-company
settings. Unlike training and development firms, which typically invest only
periodically in new curriculum development, our curriculum is constantly
updated by our best practices research organization. Another distinguishing
characteristic is the seniority and breadth of our audience: we brief
executive and senior management staff drawn from a broad range of industry
sectors, business units and departments. Because of our high quality research
product, unique approach to the market and network of leading companies, we
believe that we offer our customers a superior value proposition.

Business Strategy

Our goal is to research and analyze the most pertinent and timely strategic
and operational issues facing our membership, and to distribute the results of
this analysis to our membership in the most efficient, effective and helpful
manner. Our membership model allows us to draw upon a large and growing
universe of issues and solutions of relevance to today's leading corporations.
We actively engage our membership to help focus our

21
<PAGE>

research on the challenges of the current business environment and to maintain
and enhance our position as the leading provider of best practices research
and analysis.

. Maintain Membership-Based Model. We believe that our membership-based
model is key to our success. We continually strive to increase our ties
to our members. We encourage members to view us as their proprietary
off-site research facility. Our fixed-fee economic model promotes
frequent use of our products and services. We believe that member
satisfaction grows as members access more of our services, and that the
growing roster of satisfied members validates our business model and
induces new members to join the Corporate Executive Board.

. Focus on Best Practices Research. The focus of our work is on
researching best demonstrated business and management practices. Many
large corporations believe that there are research economies and other
benefits that can be realized by learning from the experiences of
similar entities facing common business problems. We believe that there
will be a continuing desire on the part of progressive corporations to
access ever-evolving solutions to these common business problems. We
believe that our success to date has uniquely positioned us as a leading
source for identifying, studying, evaluating and communicating these
evolving solutions.

. Continue Research and Analysis Excellence. We believe that the quality
of our research and analysis has driven our success. We regularly
interact with senior executives at member institutions to identify the
most important strategic and operational issues for research and
analysis. Experienced program directors are responsible for assuring
that our research methodology is applied to all studies and that
research quality is maintained across all subscription programs. We are
highly selective in our hiring, recruiting only the top graduates of the
leading universities and graduate schools. Furthermore, we emphasize
continual training of all employees in key areas, including industry
analysis, economics, quantitative modeling, root-cause analysis and
presentation skills.

. Build Membership Network. As our research programs grow in size and
influence, we are constantly expanding our network of executives at our
member companies. We believe that the growth of this network benefits
members by increasing the number of executives they can contact for
information, and by providing them with access to a broader range of
companies. We believe that these positive "network effects" further
strengthen our membership-based business model.

. Leverage Economic Model. We derive all of our revenues from annual fees
for our subscription programs. A large portion of our costs of
delivering our products and services in each subscription program are
fixed and do not vary with the number of subscribers. We expect to
increase revenues and improve program operating margins as we add new
members to our subscription programs.

Growth Strategy

We believe that demand for our services will continue to grow, as even the
most prestigious corporations recognize the need to improve their performance
and seek access to other companies' solutions to common corporate problems.
Our growth strategy centers on leveraging the formula that we have developed
across the past decade by cross-selling subscription programs to existing
members, adding new members and developing new subscription programs and
research products.

. Cross-Sell Additional Subscription Programs to Existing Members. On
average, members currently participate in 1.9 subscription programs. We
actively are cross-selling additional programs to our members and
believe that most members are potential participants in approximately
five to six of our current subscription programs, which are directed at
corporate staff positions maintained by most major companies. We believe
that cross-selling opportunities will increase as we develop new
subscription programs.

. Add New Members. We have targeted more than 1,500 additional
institutions worldwide as potential new members, including corporations
with revenues greater than $500 million and financial institutions

22
<PAGE>

with assets in excess of $1 billion. We are also exploring opportunities
to expand our target company universe to include smaller companies as
well as large firms in parts of the world, such as Asia, where we have
not actively marketed our services in the past.

. Develop New Subscription Programs. We currently offer subscription
programs covering 13 business constituencies. We have added four new
subscription programs during the past two years. We also have identified
25 additional corporate constituencies we might target as we develop new
research programs. This list includes both opportunities to serve large
corporate functions we do not serve today, as well as new product
extensions within existing research programs, such as our new Employee
Retention program within the Human Resources constituency. These product
extensions create new revenue streams while taking advantage of our
established areas of expertise and member constituencies.

The Membership Network

Our membership-based model, in which all subscribers (or "members")
participate in our research and analysis, is central to our business strategy.
This model gives us access to the best business practices of our members and
enables us to provide comprehensive analysis on current business issues,
assessing the collective experiences and knowledge of our members on leading-
edge topics. By participating in the Corporate Executive Board, members can
learn about the best practices and access tools and frameworks of the most
progressive corporations in the world at a fraction of the cost of a
customized analysis performed by any of the major consulting firms. We do not
believe that in-house research and analysis departments at individual
corporations could obtain, at any price, similar information from other
corporations about their business practices. We believe that there is no other
entity that enables corporations to study a broad range of the business
practices of hundreds of other business enterprises for fixed annual
subscription fees.

We regularly interact with senior executives at member institutions to
identify the most important strategic and operational issues for research and
analysis and continually strive to increase our ties to our members. Our
products and services are available exclusively to members. Our fixed-fee
economic model promotes frequent use of our products and services. We
encourage members to view us as their proprietary off-site research facility.
We believe that member satisfaction grows as members access more of our
services, and that the growing roster of satisfied members validates our
business model and induces new members to join the Corporate Executive Board.

More than 70% of Fortune 500 companies are members of the Corporate
Executive Board. At December 31, 1999, we had 1,480 members. Our membership
includes 26,000 executives at member companies in each sector who are
registered users of our Web sites. Selected members that are representative of
our membership base are identified in the following table:

<TABLE>
<CAPTION>
CHEMICALS CONSUMER PRODUCTS ENERGY
<C> <C> <S>
Bayer Corporation Anheuser-Busch Companies, Inc. BP Amoco PLC
The Dow Chemical Company British Airways PLC Enron Corporation
Eastman Chemical Company Cadbury Schweppes PLC Mobil Corporation
E.I. du Pont de Nemours & The Coca-Cola Company PacifiCorp
Co. The Gillette Company Shell International
Imperial Chemical Industries NIKE, Inc. Limited
p.l.c. The Procter & Gamble Company Texaco Inc.
Monsanto Company Nabisco, Inc. TransCanada Pipelines
Unilever PLC Limited
<CAPTION>
FINANCIAL SERVICES INSURANCE MANUFACTURING
<C> <C> <S>
American Express Company Aetna Inc. ABB Asea Brown Boveri
Barclays Bank PLC The Allstate Corporation The Boeing Company
Charles Schwab & Co., Inc. CIGNA Corp. Ford Motor Company
The Chase Manhattan John Hancock Mutual Life General Electric Company
Corporation Insurance Company Lockheed Martin
Citigroup Inc. New York Life Insurance Company Corporation
Deutsche Bank AG The Prudential Insurance 3M
Fidelity Investment Co. Company of America Philips Electronics NV
Merrill Lynch and Co., Inc. State Farm Companies Siemens Corporation
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
MEDIA AND PUBLISHING RETAIL TECHNOLOGY/INTERNET
<C> <C> <S>
British Sky Broadcasting Best Buy Co., Inc. America Online Inc.
Group plc The Gap, Inc. Compaq Computer
Comcast Corporation The Home Depot, Inc. Corporation
Dow Jones & Company. Inc. The Limited, Inc. Dell Computer Corp.
The McGraw-Hill Companies L.L. Bean, Inc. eBay Inc.
The New York Times Company McDonald's Corporation Electronic Data Systems
The Thomson Corporation Sears Roebuck and Co. Corporation
Time, Inc. Starbucks Coffee Company Hewlett-Packard Company
The Washington Post Company Intel Corporation
Lucent Technologies Inc.
Microsoft Corp.
Sony Corporation
Sun Microsystems, Inc.
Xerox Corporation
Yahoo! Inc.
<CAPTION>
TELECOMMUNICATIONS INSTITUTIONAL
<C> <C> <S>
AT&T Corporation Department of Commerce
Bell Atlantic Corporation Department of Treasury
Bell Canada Duke University
BellSouth Corporation Harvard University
British Telecommunications National Security Agency
p.l.c. University of Virginia
GTE Corporation
MCIWorldCom
Nokia Group
US WEST Inc.
</TABLE>

Memberships are renewable annually. The following table sets forth
information with respect to members, subscriptions and renewals at the dates
shown:

<TABLE>
<CAPTION>
December 31,
-----------------
1997 1998 1999
----- ----- -----
<S> <C> <C> <C>
Subscription programs...................................... 7 10 12
Member institutions(1)(2).................................. 1,151 1,333 1,480
Total membership subscriptions(2).......................... 1,808 2,263 2,790
Average subscription programs per member(2)................ 1.57 1.70 1.89
Program renewal rate(3).................................... 85% 85% 84%
</TABLE>
- --------
(1) Our members are primarily domestic and multinational corporations and
secondarily large subsidiaries of corporations and non-profit
institutions.
(2) This information includes our estimate of pending membership renewals and
an estimate of members who will discontinue their membership prior to
their annual renewal date in the subsequent year.
(3) For the year then ended. Program renewal rate is defined as the percentage
of memberships renewed, adjusted to reflect reductions in memberships
resulting from mergers and acquisitions of members.

Products and Services

General

Our research products and services are renewable, membership-based
subscription programs that focus on identifying, analyzing and describing best
demonstrated management practices. In 1999, we published 44 best practices
research studies, delivered over 11,000 customized research briefs and
provided executive education services to 1,298 member corporations reaching
30,000 executive participants. In general, our research focuses primarily on
identifying best demonstrated management practices, and secondarily on
critiquing widely-followed but ineffective practices. Our staff of 243
analysts and researchers conducted thousands of company interviews in 1999,
focusing on a large number of substantive areas, including e-business,
compensation, employee relations, training, finance, cost management,
performance metrics, risk management, marketing, sales, new product
development and strategic alliances. We believe that we add value by focusing
the attention of senior management on important issues and providing an
unbiased, objective analysis of best practices currently employed by the most
successful corporations in the world for dealing with those issues.

24
<PAGE>

Our research programs offer a cost-effective, time-efficient opportunity for
senior executives to learn from the practices and experiences of other
corporations from around the world. Member institutions can participate in one
of our subscription programs for a fraction of the cost of proceeding
independently either through an internal research effort or through engaging a
management consulting firm.

Each subscription program is guided by a 12- to 18-month agenda. Each
subscription program has a research director who is responsible for applying
our research methodology to produce best practices studies and for maintaining
research quality across all subscription program services. Using fax and
electronic polls, steering sessions and one-on-one interviews, the
subscription program's director works closely with the membership of that
program to identify agenda topics of shared interest and to set the
subscription program's research priorities. Each subscription program is
staffed by a dedicated team of researchers, analysts and instructors who
collectively research and write the best practices studies, complete the
customized research briefs and present the findings to the program's
membership.

We currently offer the following 13 subscription programs, each targeting a
specific group of senior executives within a corporation's headquarters or
divisions:

<TABLE>
<CAPTION>
Subscription Year
Program Name Introduced Constituency Membership Base
- ------------ ---------- ------------ ---------------
<S> <C> <C> <C>
Council on Financial 1983 Retail banking: executives in line Commercial banks,
Competition management, marketing and consumer credit lenders
brand management

Business Banking 1986 Business banking: executive vice Commercial banks
Board presidents of commercial banking and nonbank lenders

The VIP Forum 1989 Trust and private banking: executives Brokerage houses,
in marketing and line management commercial, trust
and private banks,
mutual fund companies
Insurance Advisory 1991 Insurance: senior marketing executives Insurance providers
Board

Operations Council 1992 Bank operations: senior Commercial banks
vice presidents of bank operations

Corporate Leadership 1993 Human resources: senior human Corporations across
Council resources executives all industries

Corporate Strategy 1996 Corporate strategy: senior corporate Corporations across
Board strategists all industries

Working Council for 1997 Information technology: chief Corporations across
Chief Information information officers all industries
Officers

Sales Executive 1997 Sales: senior sales executives Corporations across
Council all industries

Working Council for 1998 Finance: chief financial officers Corporations across
Chief Financial all industries
Officers

General Counsel 1999 Legal: general counsels Corporations across
Roundtable all industries

Marketing Leadership 1999 Marketing: chief marketing officers Corporations across
Council all industries

Forum for Workforce 2000 Employee retention: senior human Corporations across
Engagement resources executives and line managers all industries
</TABLE>

Our subscription programs provide members an integrated set of products and
services for a single annual fee. Each program provides its members with a
combination of:

. best practices research studies,

. executive education services,

25
<PAGE>

. customized research briefs, and

. on-line access to the program's content database and other services.

A description of each service follows.

Best Practices Research Studies

Each subscription program generally publishes two to five best practices
research studies annually, each addressing a specific corporate issue or
problem identified in the research agenda. We design each best practices study
to present the conclusions and supporting best practices in a graphical
format, enabling the intended audience quickly to assimilate the 50 to 200
pages of research content. We create each report using our structured research
methodology: topic selection, root cause analysis, secondary research, primary
interviewing, analysis of findings and report writing. Each program director
can call upon the support of the Chief Research Officer and his staff to
provide assistance in framing arguments, screening best practices, developing
on-line deliverables and editing studies and their derivative executive
education curriculum content.

In the course of researching a best practices study topic, the research team
typically will review thousands of pages of business and academic literature
to ground their understanding of the issues. They then will initiate the
research process to identify and evaluate specific business processes,
strategies and management practices, typically conducting hundreds of in-depth
interviews with corporations, industry experts, management consultants and
academic leaders. During the course of its research, a team generally analyzes
and evaluates dozens of specific management practices in an attempt to isolate
the five to 15 most important practices worthy of potential implementation by
members, separating out demonstrated and proven business practices and
disposing of those concepts, whether popular or conventional, that largely
have failed.

The following table lists selected agenda topics for each of our 12
subscription programs as of year end 1999. We chose these topics because we
believe them to be representative of the agenda topics for our subscription
programs:

<TABLE>
<CAPTION>
Program Name Representative Best Practices Report Titles
------------ -------------------------------------------
<S> <C> <C>
Council on Financial Competition Present at the Creation: Traveling by Daylight: Using
Redefining Profitability
Competitive Advantage Through Information to Guide the Retail
Data-Driven Financial
Marketing and Management Institution
Business Banking Board Escaping the Commodity Trap: The Chosen Few: Focusing the
Strategies for Competing in an Enterprise
Economically Rational Market on Strategic Customers
The VIP Forum Beyond Customer Satisfaction: A
The "Newly Wealthy": Cultivating Quantitative Analysis of
and Serving Wealthy Customers Satisfaction in the Affluent Market
Insurance Advisory Board Essential Growth: Strategies for The New Gold Standard: Restoring
Identifying Profitability Through Customer Value
New Insurer Growth Opportunities Management
Operations Council Retail Teleservicing: Achieving Competing Against Scale: Best
Operational Excellence in Practices in
Financial Services Call Centers ACH Processing
Corporate Leadership Forced Outside: Leadership Talent The Employment Brand: Building
Council Sourcing Competitive Advantage in the Labor
and Retention Market
Corporate Strategy Board Strategic Challenges in the New
Economy: Stall Points: Barriers to Growth for
Twelve Driving Forces the Large Corporate Enterprise
Working Council for Chief Great Leap Forward: Launching E- Creating Business Advantage: Models
Financial Officers Business for
at the Large Corporation Partnering with the Line
Sales Executive Council Perfecting the Sales Channel:
Restoring the Balance of Power: Economics and
Profiting from Strategic Customer Impact of the New Electronic
Relationships Marketplace
Working Council for Chief Motivating and Rewarding Growth: The Agile Enterprise: Frontier
Financial Officers Finance's Practices for
Role in Supporting Growth Long-Term Value Creation
General Counsel Roundtable Innovative Career Pathing:
A New Horizon: Implications of the Overcoming the
New Limits of Flat Organizational
Economy for the General Counsel Structures
Marketing Leadership Marketing in the Internet Era:
Council Leading Practices Managing the Brand Portfolio:
for the "Extended" Marketing Diagnosing
Organization Brand Portfolio Health
</TABLE>

26
<PAGE>

Executive Education

We provide our executive education curriculum, which is based on our
proprietary best practices research, to member companies worldwide. We deliver
executive education services through two primary channels--general membership
meetings and, in some programs, tailored on-site seminars. Our executive
education provides lively, interactive forums for reinforcing our textual best
practices research studies.

In 1999, we delivered executive education services to 1,298 member
companies, reaching 30,000 executive participants. Each subscription program
hosts a series of general membership meetings, where we present the most
important research findings from the annual agenda to groups of ten to 200
members. In 1999, we hosted 79 member meetings in North America, Europe and
Australia/Asia.

As an example, the following table sets forth the general membership
meetings hosted in 1999 by the Corporate Leadership Council, our human
resources subscription program, which has the largest membership base of any
of our subscription programs. The Corporate Leadership Council was selected
because we believe that the meetings hosted by this subscription program are
representative of the meetings hosted by our subscription programs. Each
subscription program hosts similar general membership meetings.

<TABLE>
<CAPTION>
Meeting Date Meeting Location Target Audience
------------ ---------------- ---------------
<S> <C> <C>
January 8 San Francisco, CA HR Staff & Line Managers
January 25-26 Washington, D.C. HR Staff & Line Managers
February 8-9 Sydney, Australia HR Executives
February 10 Sydney, Australia HR Staff & Line Managers
May 10-11 Washington, D.C. HR Executives
September 9-10 Washington, D.C. HR Executives
September 23-24 Washington, D.C. HR Executives
October 4-5 Washington, D.C. HR Executives
October 12-13 Palo Alto, CA HR Executives
October 15 Atlanta, GA HR Staff & Line Managers
October 20 Chicago, IL HR Staff & Line Managers
October 25 New York, NY HR Staff & Line Managers
October 28-29 Washington, D.C. HR Executives
November 1-2 London, England HR Executives
November 3 London, England HR Staff & Line Managers
November 15 Toronto, Canada HR Staff & Line Managers
December 1-2 Washington, D.C. HR Executives
December 6-7 Washington, D.C. HR Executives
</TABLE>

Certain subscription programs also provide on-site executive education
seminars as part of their membership services. Once a year, those members
entitled to an on-site seminar can schedule a Corporate Executive Board
faculty member to travel to their corporation to deliver an executive
education module, typically a one- to three-hour lecture, case study or
facilitated working group discussion, of the member's choice. In 1999, we
conducted 1,148 on-site seminars at member corporations.

We deploy a staff of 19 full-time and part-time faculty who conduct the on-
site education seminars. We update our library of executive education modules
throughout the year as we translate new best practices research into executive
education content.

27
<PAGE>

As an example, the following table sets forth current executive education
modules available for on-site seminars to members of the Corporate Leadership
Council. We selected the Corporate Leadership Council because we believe that
the executive education modules offered by this subscription program are
representative of the executive education modules offered by those
subscription programs that offer on-site education.

<TABLE>
<CAPTION>
Module Target Audience
------ ---------------
<S> <C>
Role of Human Resources
in the New Corporate
Headquarters HR Management Teams
Strategic Implications
of the New Economy HR Management Teams
Transforming the HR
Function HR Executives
Revolutionizing
Transactional Service
Delivery HR Executives
Roles and Priorities in
the New Economy HR Management Teams
Accelerating the
Development of Rising HR Executives, Executive Development and
Leaders Succession Planning Teams
Leadership Talent
Sourcing and Retention HR Management Teams, Recruiting and Staffing Teams
</TABLE>

Research Briefs

Members of most subscription programs may assign short-answer, customized
research requests. Individual briefs may take the form of a literature search,
vendor profile, data retrieval or original primary and secondary research,
depending upon the need of the requesting member. In 1999, we completed over
11,000 customized assignments.

Once initiated, each customized research effort takes several days
(approximately eight days on average) to complete, depending on the depth of
the information request, the type of research product desired and the time
requirements of the member. Researchers typically begin their inquiry with a
review of our proprietary research archives and then conduct a broad
literature search to identify relevant background material and practices.

In addition, certain subscription programs produce a series of short
research briefs (20-50 pages) that address issues of critical interest to the
membership. Projects are generated through an ongoing dialogue between members
and research managers and are executed over the year by the research staff.

Written research briefs generally contain five case studies or profiles of
interviewed institutions, highlighting significant trends, successful
practices and comparative responses to a range of questions. After we have
completed and delivered the written brief to the requesting member, we make
the best of these briefs accessible to other members through proprietary
databases. Members are able to search, select, view and print research briefs
directly from the subscription program database at no additional charge.

We believe that the research service of our subscription programs builds our
proprietary databases, serves as an excellent marketing tool for attracting
new members and encourages members to view us as a reliable and effective
resource for primary research.

The following table sets forth sample report topics of customized research
briefs that we have undertaken in the recent past:

Sales Executive Council

. Team-Based Selling

. Developing Electronic Commerce Channels

. Intermediary Management

. Customer Mix Management

. Sales Force Integration with New Product Launches

28
<PAGE>

Working Council For Chief Information Officers

. SAP Implementation Contracting

. Digital Asset Management

. Knowledge Management Intranets

. The Role of the Project Office: Embedding Project Management Discipline

. Global IT Organization

Corporate Strategy Board

. Advertising and Sponsorship on the Web

. Best Practices in M&A Execution

. Asia Pacific Region Business Climate

. Assessing Risk Dimensions of New Market Opportunities

. Centralized Sourcing of Consultants

Corporate Leadership Council

. Best Practice in Call Center Operations

. Creating a Customer Service Culture

. Diversity Initiatives at Financial Services Institutions

. Developing a Corporate University or Learning Center

. Gainsharing Programs for Hourly Employees

Operations Council

. Policy & Procedure Dissemination Tactics

. Lockbox Transmission Details

. ATM Support Services

. Automated Investment Accounting Systems

. Practices for Handling Peak Check Volumes

Insurance Advisory Board

. Channel Management and Direct Insurance Distribution

. New Business Processing & Post-Sale Support for Intermediaries

. Group Life & Health Renewal Process

. No-Load and Low-Load Whole Life Insurance Products

. Group Disability Insurance Marketing

29
<PAGE>

Business Banking Board

. ACH Credit Lines

. Acquiring and Retaining Small Business Accounts

. Asset Securitization for Middle Market Customers

. Turnkey 401(k) Products for Small Businesses

. Benchmarking the Commercial Credit Underwriting and Approval Process

The VIP Forum

. Asset Management Organizational Structures & Compensation Practices

. Australian Private Banking Overview

. Niche Segmentation Strategy Implementation

. Personal Banking Programs

. Centralized Credit Underwriting for Private Banking Departments

Council On Financial Competition

. The Global Account Market

. Customer Privacy

. Branch Site Selection Procedures in Spanish Speaking Countries

. Customer Referral Programs

. Branding Issues Associated with Bank Mergers and Acquisitions

On-Line Proprietary Databases

Each subscription program maintains a proprietary database of best practices
and, in some cases, quantitative survey data accessible only to members of the
subscription program. We continually update our growing proprietary databases
with new corporate practices, quantitative performance data and related
information supplied by other members and derived by our researchers. We
include all information and graphics generated in best practices research
studies and customized research briefs in the databases and make them
accessible to member executives and our staff.

Our proprietary databases currently include 305 best practices research
studies and 30,000 customized research briefs containing over 120,000 profiles
of corporate practices.

Since 1996, we have been offering our members internet access to research
content and other services through password-protected sites. We believe that
the internet provides a convenient means for members to commission customized
research briefs, browse and download the electronic library of research
studies and graphics, review executive education modules and meeting schedules
and communicate with our staff and other members.

Pricing

We sell memberships in the Corporate Executive Board subscription programs
as renewable one-year agreements. Agreements generally are paid in full within
three months of the start of the subscription period. At December 31, 1999,
the average price for a subscription program was approximately $28,900. The
actual price varies by size of member and by subscription program, and may be
lower for charter subscribers to new

30
<PAGE>

subscription programs. By spreading our costs across a broad membership and
offering a largely standardized research product, we are able to charge fees
that are a small fraction of the typical engagement fees of specialized
research or consulting firms.

We offer an unconditional service guarantee to our members. At any time, a
member may demand a pro rata refund of its subscription fee for a program. In
1999, members requested refunds for nine subscriptions out of over 2,200.

Sales and Marketing

We market an integrated set of services, consisting of best practices
research studies, executive education, customized research briefs and on-line
access to our proprietary databases, for a fixed fee per subscription program.
We believe that this marketing strategy highlights the value to members of our
range of services and emphasizes the membership nature of our business model,
actively engaging the membership and reinforcing members' commitment to the
Corporate Executive Board.

At December 31, 1999, our sales force consisted of 42 new business
development representatives who are responsible for selling new memberships to
assigned geographic market segments in the United States and abroad, as well
as 39 member services representatives who are responsible for servicing and
renewing existing memberships. We have invested extensively in the expansion
of our direct sales force in order to continue the growth of our member base.
Our sales and member services staff is based at our headquarters in
Washington, D.C. We maintain an additional sales and member services office in
London, England.

The separation of responsibility for new membership sales and membership
renewal reflects the varying difficulty and cost of the respective functions.
New business development representatives are compensated with a base salary
and variable, goal-based incentive bonuses and travel on average 60% of the
time, conducting face-to-face meetings with senior executives at prospective
member institutions. Member services representatives assume more of an in-
house coordinating role, conducting most of their responsibilities over the
telephone.

Although we actively market our subscription programs throughout the year,
historically over 50% of all renewals have taken place in the fourth quarter
of the year.

Competition

We currently have few direct competitors, and those that do exist generally
compete only against a single subscription program. We compete indirectly
against other professional information services providers, including
management consulting firms, training and development companies, non-profit
think-tanks and research and database companies. We are not aware of any other
entity that enables corporations to study as broad a range of the best
corporate management practices for fixed annual subscription fees.

We believe that the principal competitive factors in our market include
quality and timeliness of research and analysis, reliable delivery, depth and
quality of the membership, ability to meet changing customer needs, superior
service and affordably-priced products. We believe we compete favorably with
respect to each of these factors.

The Advisory Board Company provides products and services to the health care
industry that are similar to the types of products and services that we
generally provide. We have entered into a noncompetition agreement with The
Advisory Board Company and David Bradley, its principal stockholder. The
noncompetition agreement generally prohibits us from competing with The
Advisory Board Company with respect to health care clients and issues and
prohibits The Advisory Board Company and Mr. Bradley from competing with us
with respect to non-health care clients and issues, other than products and
services relating to advertising, magazines and newspapers, and government
relations and lobbying activities. The agreement extends through December 31,
2003. See "Certain Relationships and Transactions--Noncompetition Agreement."

31
<PAGE>

Employees

At December 31, 1999, we employed 509 persons. Of these employees, 485 were
located at our headquarters in Washington, D.C. and 24 were located at our
facilities in London, England. None of our employees is represented by a
collective bargaining arrangement. We believe that our relations with our
employees are favorable.

We believe strongly in a culture of meritocracy, rewarding key contributors
with opportunities for rapid professional growth and advancement as well as
competitive compensation. Training is a critical job component for all of our
employees, including industry analysis, economics, quantitative modeling,
root-cause analysis and presentation skills.

Facilities

Our headquarters currently are located in approximately 90,000 square feet
of office space in Washington, D.C. The facility accommodates research,
marketing and sales, information technology, administration, graphic services
and operations personnel. We believe that our existing and planned facilities
will be adequate for our current needs and that additional facilities are
available for lease to meet future needs.

32
<PAGE>

MANAGEMENT

Directors and Executive Officers

The following table sets forth the names, ages and positions with the
Corporate Executive Board of the persons who serve as our directors and
executive officers:

<TABLE>
<CAPTION>
Directors and Executive Officers Age Position
- -------------------------------- --- --------
<S> <C> <C>
Jeffrey D. Zients....... 33 Chairman of the Board

James J. McGonigle...... 36 Chief Executive Officer and Director

Michael A. D'Amato...... 46 Director

Harold L. Siebert....... 54 Director

Robert C. Hall.......... 68 Director

David W. Kenny.......... 38 Director

Stephen G. Pagliuca..... 45 Director

Clay M. Whitson......... 42 Chief Financial Officer and Secretary

Sally Chang............. 35 General Manager, Sales and Marketing

Derek C. M. van Bever... 42 Chief Research Officer

Paul C. Amoruso......... 34 Chief Operating Officer and Executive Director,
Research, Information Technology and Sales Practices
</TABLE>

Jeffrey D. Zients has been a director since July 1998, and became Chairman
of the Board in January 2000. From the spin-off in October 1997 until July
1998, Mr. Zients was our Executive Vice President. He also has served as the
Chief Operating Officer of DGB Enterprises, Inc. since the spin-off. From
1992, Mr. Zients held various positions with The Advisory Board Company, most
recently serving as its Chief Operating Officer from 1996 until July 1998 and
Chief Executive Officer since July 1998. Prior to 1992, Mr. Zients was
employed at Mercer Management Consulting and Bain and Company. Mr. Zients
received a B.S. from Duke University.

James J. McGonigle has been our Chief Executive Officer and a director since
July 1998. Mr. McGonigle is also the Chairman of our Management Operating
Committee. From the spin-off until July 1998, Mr. McGonigle was our General
Manager, and from 1995 until the spin-off, he was the General Manager of the
corporate division of The Advisory Board Company with responsibility for
managing the business assumed by us in the spin-off. From 1990 to 1995, Mr.
McGonigle was a consultant in the Financial Institutions Group at McKinsey &
Company. Mr. McGonigle received a B.A. from the Woodrow Wilson School at
Princeton University and a J.D. from Harvard Law School.

Michael A. D'Amato has been a director since July 1998. From July 1998 until
February 1999, Mr. D'Amato served as our Executive Vice President--Finance and
our Secretary. From the date of the spin-off until November 1998, Mr. D'Amato
served as our Chief Financial Officer. Since the spin-off, Mr. D'Amato also
has served as the Executive Vice President of The Advisory Board Company and
the Chief Financial Officer of DGB Enterprises, Inc. From 1996 until July
1998, he was the Chief Financial Officer of The Advisory Board Company. From
1995 to 1996, Mr. D'Amato served as the Special Advisor to the Chairman of The
Advisory Board Company. From 1982 until 1995, Mr. D'Amato was a partner with
Bain and Company. Mr. D'Amato received a B.S. from Massachusetts Institute of
Technology and an M.B.A. from Harvard University. Mr. D'Amato also serves on
the Board of Directors of Wesley Jessen Visioncare, Inc., a publicly held
contact lens company.

33
<PAGE>

Harold L. Siebert has been a director since July 1998, and served as the
Chairman of the Board from July 1998 until January 2000. From 1996 through
July 1998, Mr. Siebert served as Chief Executive Officer and Chairman of
Inforum Inc., a company providing marketing and planning systems for
healthcare clients, and as Executive Vice President of Medstat/Thomson, a
healthcare information company. From 1995 until 1996, Mr. Siebert served as
Bureau Chief of TennCare, the State of Tennessee's Medicaid managed care
program. From 1993 until 1995, Mr. Siebert was a consultant to
Medstat/Thomson. In 1988, Mr. Siebert founded Inforum, Inc. and served as its
President and Chief Executive Officer from 1988 through 1993. Prior to 1988,
he held various senior-level positions at HBO & Co. and Baxter International.
Mr. Siebert received his B.S. from Miami University in Oxford, Ohio.

Robert C. Hall has been a director since February 1999. From 1995 to January
1999, Mr. Hall served as the Vice President of The Thomson Corporation, a
publicly held information publishing company. From 1990 to 1995, Mr. Hall was
the Chief Executive Officer of Thomson Information and Publishing Group, a
division of The Thomson Corporation involved in professional information and
publishing. From 1985 to 1990, Mr. Hall was the President of Thomson Financial
Services Group, another publishing division of The Thomson Corporation. Mr.
Hall serves on the Board of Directors of Advanta Corporation, a publicly held
financial services company, and Advanta Partners Company, a venture capital
firm. Mr. Hall received a B.S. from Iowa State University.

David W. Kenny has been a director since February 1999. Since 1997, Mr.
Kenny has been the Chief Executive Officer of Digitas, Inc. (formerly Bronner
Slosberg Humphrey), an internet professional services company, of which he has
also been Chairman since December 1999. From 1987 to 1997, Mr. Kenny was a
partner at Bain and Company, a management consulting firm. Mr. Kenny serves on
the Board of Directors of the Harvard Business School Publishing Corporation,
a publishing company. Mr. Kenny received a B.S. from General Motors Institute
and an M.B.A. from Harvard University.

Stephen G. Pagliuca has been a director since February 1999. Mr. Pagliuca
founded Information Partners for Bain Capital in 1989 and is currently a
Managing Director of Bain Capital, Inc., a private equity investment firm,
which he joined in 1989. Prior to becoming a Managing Director at Bain
Capital, he was a partner at Bain and Company, a management consulting firm.
Mr. Pagliuca serves on the Board of Directors of Wesley Jessen Visioncare,
Inc., a publicly held contact lens company; Dade Behring Inc., a supplier of
in vitro diagnostics products and services; Epoch Senior Living, assisted
living facilities; and the Gartner Group, a publicly held information
publishing company. Mr. Pagliuca received a B.A. from Duke University and an
M.B.A. from Harvard University.

Clay M. Whitson has been our Chief Financial Officer since November 1998 and
our Secretary since February 1999. Mr. Whitson is also a member of our
Management Operating Committee. From 1996 through October 1998, Mr. Whitson
served as the Chief Financial Officer and Treasurer of PMT Services, Inc., a
publicly held credit card processing company. From 1990 to 1996, Mr. Whitson
served as the Chief Financial Officer of the Gemala Group, a diversified
conglomerate based in Indonesia. Prior to joining the Gemala Group in 1990,
Mr. Whitson was a director in the Mergers and Acquisitions Department of The
Chase Manhattan Bank, NA. Mr. Whitson received a B.A. from Southern Methodist
University and an M.B.A. from the University of Virginia.

Sally Chang has been our General Manager, Sales and Marketing, since June
1998. Ms. Chang is also a member of our Management Operating Committee. From
1992 until joining us, she served in various management capacities with The
Advisory Board Company, including as General Manager, Health Care Member
Services; General Manager, Health Care Research; and an Executive Director,
Research. Prior to 1992, Ms. Chang worked in the corporate planning department
of Fuji Xerox in Tokyo, as a general management consultant with Touche Ross,
and in the merger and acquisitions group of Drexel Burnham Lambert. Ms. Chang
received an A.B. from Harvard University, an M.A. from the University of
Pennsylvania and an M.B.A. from the Wharton School of Business at the
University of Pennsylvania.

34
<PAGE>

Derek C. M. van Bever has been our Chief Research Officer since the spin-
off. Mr. van Bever is also a member of our Management Operating Committee.
From 1995 through the date of the spin-off, he served as the Chief Research
Officer of the business assumed by us in the spin-off. Prior to that, he
served in various management capacities with The Advisory Board Company, which
he joined in 1981. Mr. van Bever received a B.A. and an M.A. from the
University of Delaware and an M.B.A. from Harvard University.

Paul C. Amoruso has been our Chief Operating Officer since July 1999 and an
Executive Director, Research, since the spin-off, focusing on the information
technology and sales practices. Mr. Amoruso is also a member of our Management
Operating Committee. Prior to the spin-off, Mr. Amoruso worked in various
capacities with The Advisory Board Company, which he joined in 1994. From 1993
to 1994, he was owner and President of Daedalus Partners, a consulting firm
and broker-dealer serving early-stage corporations. Mr. Amoruso received a
B.A. from Wesleyan University and an M.B.A. from the Wharton School of
Business at the University of Pennsylvania.

Management Operating Committee

Our Management Operating Committee consists of members of our senior
management. This committee meets approximately every two weeks and establishes
the guidelines for, and manages, our general operations. Our Management
Operating Committee is not a committee of the Board of Directors.

----------------

All directors are elected annually and serve until the next annual meeting
of stockholders or until the election and qualification of their successors.
The Board of Directors elects our executive officers and these officers serve
at the discretion of the Board. Except for Sally Chang and Paul C. Amoruso who
are married, there are no family relationships among our directors and
executive officers.

Committees of the Board of Directors

Audit Committee

The members of our audit committee are Messrs. Hall, Kenny and Pagliuca. The
Audit Committee, among other things: makes recommendations to the Board of
Directors concerning the engagement of independent public accountants;
monitors and reviews the quality and activities of our independent
accountants; and monitors the adequacy of our operating and internal controls
as reported by management and the independent auditors.

Compensation Committee

The members of our compensation committee are Messrs. Hall, Kenny and
Pagliuca. The Compensation Committee, among other things, reviews salaries,
benefits and other compensation, including stock-based compensation under the
Incentive Plan, the 1999 Plan and the Directors Plan, of directors, officers
and other key employees and makes recommendations to the Board of Directors.

Director Compensation

The Board of Directors or, to the extent authorized by the Board, the
Compensation Committee, sets directors' compensation under the Directors Plan
and such other arrangements as the Compensation Committee determines to be
appropriate. Each director who is not an employee, upon election as a non-
employee director, receives a one-time grant of options to purchase 36,120
shares of common stock. Non-employee directors also receive an annual grant of
options to purchase 5,000 shares of common stock and a $20,000 annual
retainer. Under the Directors Plan, the Board of Directors or the Compensation
Committee may provide for stock options or stock grants to be awarded to
directors and has the discretion to establish the terms, provisions and
conditions of such awards, except that options may not be granted with an
exercise price less than the fair market value of the common stock at the time
such options are granted. Currently, 180,600 shares are subject to options
previously granted under the Directors Plan. Directors who are employees do
not receive any additional compensation for their service as directors. We
reimburse each director for reasonable out-of-pocket expenses for attending
Board of Directors meetings.

35
<PAGE>

Executive Compensation

The following table presents certain information concerning compensation
earned for services rendered for 1998 and 1999 by certain executive officers
whose annual salary and bonus during fiscal year 1999 exceeded $100,000 (the
"Named Officers"):

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensaion
-------------------- -----------
Name and Principal Number of All Other
Positions Year Salary Bonus(1) Options Compensation(2)
------------------ ---- --------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
James J. McGonigle(3).... 1999 $ 440,000 -- 61,000 --
Chief Executive Officer 1998 413,849 $ 100,000(4) -- --
Derek C. M. van Bever.... 1999 400,000 -- 17,500 $850,000
Chief Research Officer 1998 394,231 100,000(4) -- 850,000
Paul C. Amoruso.......... 1999 337,212 -- 42,500 --
Chief Operating Officer
and Executive 1998 308,558 118,750(4) -- --
Director, Research,
Information Technology
and Sales Practices
Sally Chang(5)........... 1999 325,000 -- 17,500 --
General Manager, Sales
and 1998 175,961 100,000(4) 240,800 --
Marketing
Clay M. Whitson(6)....... 1999 250,000 -- -- --
Chief Financial Officer 1998 31,730 100,000(7) 172,000 --
</TABLE>
- --------
(1) We generally do not pay bonuses to our executive officers. However, from
time to time we have paid discretionary bonuses under certain special
circumstances. Performance bonuses are pro-rated over the related
employment period.
(2) Reflects $850,000 for Mr. van Bever in each of 1999 and 1998 in connection
with the repurchase of certain options of The Advisory Board Company prior
to the time of the spin-off.
(3) Mr. McGonigle was named our Chief Executive Officer in July 1998. Prior to
July 1998, we did not have a Chief Executive Officer.
(4) Includes a special bonus paid in connection with our initial public
offering: $40,000 paid by us in cash and $60,000 paid in shares of common
stock (valued at the initial public offering price) by our principal
stockholder.
(5) Ms. Chang joined us as General Manager, Sales and Marketing, in June 1998.
(6) Mr. Whitson joined us as Chief Financial Officer in November 1998.
(7) Reflects a signing bonus of $100,000 paid to Mr. Whitson upon the
commencement of his employment.

36
<PAGE>

The following table sets forth certain information concerning grants of
stock options to each of the Named Officers during 1999:

Stock Option Grants in 1999

<TABLE>
<CAPTION>
Individual Grants(1)
-----------------------------------------------------------------
Potential Realizable
% of Total Value at Assumed
Number of Options Market Annual Rates of
Shares Granted to Exercise Price on Stock Price
Underlying Employees in Price Date of Expiration Appreciation
Name Option Grants Fiscal Year (per share) Grant Date for Option Term
---- ------------- ------------ ----------- -------- ----------------- ---------------------
5% 10%
---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
James J. McGonigle...... 61,000 8.2% $19.00 $19.00 February 22, 2009 $ 728,889 $ 1,847,148
Derek C. M. van Bever... 17,500 2.3 19.00 19.00 February 22, 2009 209,107 529,919
Paul C. Amoruso......... 17,500 2.3 19.00 19.00 February 20, 2009 209,107 529,919
25,000 3.4 27.06 27.06 May 17, 2009 425,447 1,078,167
Sally Chang............. 17,500 2.3 19.00 19.00 February 22, 2009 209,107 529,919
Clay M. Whitson......... -- -- -- -- -- -- --
</TABLE>
- --------
(1) Options granted under the 1999 Plan generally become exercisable 25% per
year beginning one year after the date of grant.

The following table sets forth certain information concerning stock options
held by each of the Named Officers during 1999:

Aggregated Option Exercises in 1999
and Year-End Option Values

<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year- In-the-Money Options at
Shares End Fiscal Year-End(1)
Acquired Value ------------------------- -------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James J. McGonigle(2)... -- $ -- -- 551,200 $ -- $29,497,142
Derek C. M. van Bever... -- -- -- 198,100 -- 10,369,720
Paul C. Amoruso......... -- -- -- 197,300 -- 9,925,354
Sally Chang............. -- -- -- 258,300 -- 12,419,229
Clay M. Whitson......... -- -- -- 172,000 -- 7,161,220
</TABLE>
- --------
(1) Based on the closing price of our common stock on December 31, 1999 of
$55.875 per share.
(2) Mr. McGonigle's stock option agreement with respect to 490,200 options
provides that the number of shares of common stock issuable pursuant to
those options will be increased if the number of shares of common stock
outstanding on a fully diluted basis exceeds 18,920,000 shares, and again
if the number of shares of common stock outstanding on a fully diluted
basis exceeds 20,640,000 shares. The amount of the increase on each
occasion will be 10% of the sum of the number of shares that remain
issuable pursuant to those options at the time and the number of shares
that were issued to him upon the exercise of those options that he
continues to hold at the time. The exercise price per each additional
share on each such date will be the fair market value of a share of common
stock on each such date.

We anticipate that we will grant options to our key employees in 2000 in
amounts that will be consistent with prior year grants.

37
<PAGE>

Employment Agreements

We have entered into an employment agreement with Mr. McGonigle which
continues in effect until he resigns or we terminate his employment. Under the
terms of the employment agreement, he receives an annual salary of $440,000,
which is subject to periodic increases in our discretion. His employment
agreement requires him to devote his efforts and abilities to us on a full-
time basis and provides that, in addition to salary, he is entitled to certain
fringe benefits, including participation in our 401(k) plan, the reimbursement
of business-related expenses, disability insurance coverage and reimbursement
of fees and expenses incurred in connection with participation in community
and business related organizations. His employment agreement also provides
that he will receive an amount equal to 125% of one year's base salary and
that all the options granted to him will vest and become exercisable
immediately if we terminate his employment without cause.

Contemporaneously with the execution of his employment agreement, Mr.
McGonigle executed a noncompetition agreement pursuant to which, among other
things, he agreed not to compete with us for a period of up to three years
after termination of his employment if he voluntarily resigns or if we
terminate his employment for cause. In addition, if we terminate his
employment without cause, he will not compete with us for one year and we may
require him not to compete with us for up to two additional years if we pay
him 125% of his base salary at the time of termination for each additional
one-year period of noncompetition. Mr. McGonigle also agreed not to disclose
any of our confidential or proprietary information during the course of his
employment or after termination of his employment for any reason and not to
solicit our employees to leave for a period of three years after the
termination of his employment.

We have entered into an employment agreement with Mr. Whitson which
continues in effect until he resigns or we terminate his employment. Under the
terms of the employment agreement, he receives an annual salary of $250,000,
which is subject to periodic increases in our discretion. Mr. Whitson also
received a bonus of $100,000 when he entered into his employment agreement,
and we granted him options to purchase 172,000 shares of common stock at a
purchase price of $14.24 per share at that time. His employment agreement
requires him to devote his efforts and abilities to us on a full-time basis
and provides that, in addition to salary, he is entitled to certain fringe
benefits, including participation in our 401(k) plan and the reimbursement of
business-related expenses, disability insurance coverage and reimbursement of
fees and expenses incurred in connection with participation in community and
business related organizations. His employment agreement also provides that he
will receive an amount equal to one year's base salary and that all the
options granted to him will vest and become exercisable immediately if we
terminate his employment without cause.

Contemporaneously with the execution of his employment agreement, Mr.
Whitson executed a noncompetition agreement pursuant to which, among other
things, he agreed not to compete with us for one year after termination of
employment, or for a period of up to three years after termination of his
employment if he voluntarily resigns or if we terminate his employment for
cause. In addition, if we terminate his employment without cause or if he
resigns with good reason, we may require him not to compete with us for up to
two additional years if we pay him 100% of his base salary at the time of
termination for each additional one-year period of noncompetition. Mr. Whitson
also agreed not to disclose any of our confidential or proprietary information
during the course of his employment or after termination of his employment for
any reason and not to solicit our employees to leave for a period of three
years after the termination of his employment.

There are no other employment agreements in effect with respect to any of
our directors or executive officers. All executive officers enter into
noncompetition, nonsolicitation and confidentiality agreements with us.

38
<PAGE>

Stock Plans and Agreements

The Corporate Executive Board Company Stock-Based Incentive Compensation Plan
(the "1997 Incentive Plan")

On October 31, 1997, the Board of Directors adopted the 1997 Incentive Plan.
This plan is designed to provide only for the grant of stock options that do
not qualify as incentive stock options under Section 422 of the Code.

We may not issue more than 5,504,000 shares of common stock pursuant to all
options granted under the 1997 Incentive Plan. As of December 31, 1999,
approximately 4,273,320 shares had been issued under or were subject to 1997
Incentive Plan options.

Generally, 1997 Incentive Plan options become exercisable 50% on February
22, 2000, 30% on February 22, 2001 and 20% on February 22, 2002 and expire on
April 30, 2003. Options granted to certain former executives and directors to
purchase an aggregate of 315,000 shares of common stock expire later,
extending to March 31, 2009. The number of shares subject to outstanding 1997
Incentive Plan options or reserved for issuance under the 1997 Incentive Plan
is subject to anti-dilution provisions for reorganizations, recapitalizations,
stock splits, reverse stock splits, stock dividends and similar events. After
granting options with respect to shares available for issuance under the 1997
Incentive Plan, the Board of Directors does not intend to make any additional
grants under this plan.

The purpose of the 1997 Incentive Plan is to provide participants with an
increased economic and proprietary interest in us in order to encourage them
to contribute to our success and progress. The Compensation Committee of the
Board of Directors, or the Board of Directors itself, administers the 1997
Incentive Plan and may establish the terms, provisions and conditions upon
which 1997 Incentive Plan options are granted, including exercise price,
exercisability, vesting and termination. Options under this plan may only be
granted to employees who are members of a select group of management or other
key employees whom the Compensation Committee or the Board from time to time
designates for participation in the plan. With the approval of the
Compensation Committee or the Board, participants may pay for shares purchased
upon the exercise of any 1997 Incentive Plan options by cash or promissory
notes secured by the shares then issuable upon exercise of 1997 Incentive Plan
options. Options granted under this plan generally are nontransferable other
than by will or the laws of descent and distribution, and are exercisable only
by the optionholder during his or her lifetime. No 1997 Incentive Plan options
will have a term extending beyond May 1, 2009.

1999 Stock Option Plan

In February 1999, the Board of Directors adopted the 1999 Stock Option Plan.
The purpose of the 1999 Plan is to provide participants with an increased
economic and proprietary interest in us in order to encourage them to
contribute to our success and progress. The 1999 Plan provides for the grant
of stock options that qualify as incentive stock options under Section 422 of
the Code as well as options that do not qualify as incentive stock options
under Section 422 of the Code. Options may be granted only to our officers,
independent contractors, employees and prospective employees.

We may not issue more than 1,892,000 shares of common stock pursuant to all
options granted under the 1999 Plan, although we may increase that number by
the number of shares subject to 1997 Incentive Plan options that are
cancelled, expire or terminate or that otherwise are available for issuance
but for any other reason are not issued under the 1997 Incentive Plan. We may
not issue options for more than 430,000 shares during any calendar year to any
one participant. The number and type of shares or other securities subject to
1999 Plan options are subject to anti-dilution provisions for reorganizations,
reclassifications, stock dividends, or other distributions, stock splits,
reverse stock splits, spin-offs or similar transactions, or if substantially
all of our property and assets are sold.

As of December 31, 1999, 745,500 shares of common stock subject to options
had been granted under the 1999 Plan. We anticipate that we will grant
additional options under the 1999 Plan in 2000 in amounts that will be
consistent with prior year grants.

39
<PAGE>

The Compensation Committee or the Board administers the 1999 Plan, and may
establish the terms, provisions and conditions of options, including exercise
price, exercisability, vesting and termination. No option may have an exercise
price less than the fair market value of the common stock on the date of
grant, unless that option is 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. Options granted to 10%
stockholders that are intended to qualify as incentive stock options under
Section 422 of the Code may not have an exercise price of less than 110% of
the fair market value of the common stock on the date of grant. Options
granted under the 1999 Plan generally expire within ten years of the date of
grant. Options granted under the 1999 Plan generally become exercisable 25%
per year beginning one year after the date of grant. Delivery of shares of
common stock upon the exercise of options may be deferred, with such deferral
generally evidenced by an unfunded and unsecured obligation referred to as a
"stock unit." A stock unit is a bookkeeping entry representing the fair market
value of one share of common stock. Settlement of stock units upon expiration
of the deferral period will be made in common stock or as otherwise determined
by the 1999 Plan administrator.

With the approval of the Compensation Committee or the Board, participants
may pay for shares purchased upon the exercise of any 1999 Plan options by
cash or promissory notes secured by the shares then issuable upon exercise of
1999 Plan options. We may lend money to the option holder to pay the exercise
price and any taxes due in connection with the exercise of options. Unless
otherwise provided by the Compensation Committee or the Board, options granted
under the 1999 Plan are nontransferable other than by will or the laws of
descent and distribution, and are exercisable only by the optionholder during
his or her lifetime.

Unless approved by our stockholders, the 1999 Plan may not be amended to
materially increase the number of shares of common stock authorized for
issuance. Except as otherwise required by law, the Board of Directors may
amend the 1999 Plan in other respects without stockholder approval. The 1999
Plan will terminate in February 2009.

Directors Stock Plan

On December 14, 1998, the Board of Directors adopted our Directors Plan. The
purpose of the Directors Plan is to assist us in attracting, retaining and
motivating qualified individuals to serve on our Board of Directors and to
align their financial interests with those of our stockholders by providing
for or increasing their proprietary interest in us.

Any member of our Board of Directors or of the board of directors of a
subsidiary is eligible for the award of stock options and stock grants under
the Directors Plan. The Directors Plan is administered by the Board of
Directors or by the Compensation Committee to the extent the Board of
Directors so designates. The Directors Plan is intended to operate in a manner
that exempts grants of stock under the Directors Plan from Section 16(b) of
the Securities Exchange Act of 1934.

As of December 31, 1999, 180,600 shares of common stock were subject to
options granted under the Directors Plan. We intend to grant additional
options under the Directors Plan in 2000.

We may not issue more than 430,000 shares of common stock under the
Directors Plan. Any shares that are reacquired under the stock option or stock
grant are not counted against the number of shares that can be issued under
the Directors Plan. The number and type of shares or other securities subject
to options under the Directors Plan are subject to anti-dilution provisions
for reorganizations, reclassifications, stock dividends, or other
distributions, stock splits, reverse stock splits, spin-offs or similar
transactions, or if substantially all of our property and assets are sold.

Under the Directors Plan, the Compensation Committee or the Board may
provide for stock options and stock grants to be awarded to directors and may
establish the terms, provisions and conditions of such awards, including
exercise price, exercisability, vesting and termination. No option may have an
exercise price less than

40
<PAGE>

the fair market value of the common stock on the date of grant, unless the
option holder pays or foregoes compensation in the amount of any discount.

We may not issue options for more than 86,000 shares to any person on
account of his or her service as a director for any calendar year. Awards
granted under the Directors Plan are nontransferable by the director other
than by will or the laws of descent and distribution, and are exercisable only
by the director during his or her lifetime.

Unless approved by our stockholders, the Directors Plan may not be amended
to increase the number of shares of common stock authorized for issuance.
Except as otherwise required by law, the Board of Directors otherwise may
amend the Directors Plan without further stockholder approval. The Directors
Plan will terminate on May 1, 2009.

Indemnification Arrangements

Our 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. Our bylaws
provide that we will indemnify our officers, directors, employees and other
agents to the fullest extent permitted by law.

41
<PAGE>

CERTAIN RELATIONSHIPS AND TRANSACTIONS

Services Agreements

Administrative Services Agreement. The Advisory Board Company provides
certain administrative services to us pursuant to the Administrative Services
Agreement. We believe that the services provided under the Administrative
Services Agreement may be obtained from alternative sources and that the fees
pursuant to the Administrative Services Agreement approximate the cost to
internally provide or otherwise externally source those services. During 1999,
The Advisory Board Company provided an aggregate of $1.6 million of services
to us under this agreement. The aggregate value of the services currently
provided under this agreement is less than $10,000 per month. This agreement
expires on December 31, 2000.

Vendor Contracts Agreement. Pursuant to the Vendor Contracts Agreement, we
participate in certain vendor contracts entered into by The Advisory Board
Company for the provision of certain services, such as telecommunications,
mailing and general office services. The Vendor Contracts Agreement specifies
that we will pay the vendor directly if costs can be segregated and billed
separately, or we will reimburse The Advisory Board Company for our reasonably
allocated share of commonly billed costs. This agreement expires on December
31, 2000. We expect to enter into separately negotiated vendor agreements as
soon as reasonably practical, and do not expect to incur material incremental
costs.

We record costs associated with the Administrative Services Agreement and
the Vendor Contracts Agreement monthly as a payable to an affiliate and settle
amounts owed on a quarterly basis.

Noncompetition Agreement

On January 1, 1999, we entered into the Noncompetition Agreement with The
Advisory Board Company and David Bradley, who was the sole beneficial owner of
our common stock prior to our initial public offering. The Noncompetition
Agreement has a term of five years, and prohibits us from selling membership-
based subscription services substantially similar to those provided by us and
The Advisory Board Company to any company that is principally engaged in the
health care provider business. We may sell our products and services to any
company that is neither a health care company nor principally engaged in other
types of health care business. We may continue to renew pre-existing
subscriptions with respect to those products and services that we had sold as
of our initial public offering if they do not specifically address health care
provider industry issues. The Noncompetition Agreement generally prohibits The
Advisory Board Company and Mr. Bradley from selling services covered by the
agreement to any non-health care companies. They may continue to renew pre-
existing subscriptions with respect to those products and services that they
had sold as of our initial public offering, if such products and services
specifically address health care provider industry issues. The Noncompetition
Agreement does not cover magazines, newspapers and news services, advertising
for publications and news or on-line services, advertising and promotion
activities offered to companies, institutions or advertising agencies that are
responsible for the placement or designing of advertisements and government
relations and lobbying activities. The Noncompetition Agreement prohibits the
parties from recruiting or employing the other's employees.

Registration Rights Agreement

Following the closing of this offering, Mr. Bradley will hold 646,520 shares
of our common stock (no shares if the underwriters' overallotment option is
exercised in full). Pursuant to a Registration Rights Agreement, Mr. Bradley
is entitled to certain rights with respect to the registration of his shares
of common stock under the Securities Act of 1933. Through February 26, 2004,
Mr. Bradley may require us, at his expense, on two separate occasions, to file
a registration statement under the Securities Act of 1933 with respect to some
or all of his shares of common stock. If Mr. Bradley continues to hold shares
after this offering, he will be unable

42
<PAGE>

to exercise his registration rights prior to the expiration of the lock-up
period in connection with this offering without the prior written consent of
Salomon Smith Barney. Under certain circumstances, we may, on no more than one
occasion, delay such registration for not more than three months.

In addition, during the same period, if we propose to register our shares of
capital stock under the Securities Act of 1933, subject to certain exceptions,
Mr. Bradley is entitled to notice of the registration and to include his
shares in that registration, provided that the managing underwriters have the
right, in certain circumstances, to limit the number of shares that Mr.
Bradley may include in such registration.

Promissory Note

Mr. Bradley borrowed $6.5 million from us on October 31, 1997 pursuant to a
promissory note and repaid the principal amount and all related accrued
interest in February 1999.

Cross-Indemnification Agreement

On January 21, 1999, we and Mr. Bradley entered into a cross-indemnification
agreement. Under this agreement, we agreed to indemnify Mr. Bradley, and Mr.
Bradley agreed to indemnify us, with respect to adverse tax effects resulting
from the reallocation of income and expenses between S corporation and C
corporation tax years.

Lease Guarantee

We have entered into a lease for our headquarters facility in Washington,
D.C. The initial term of this lease will expire on June 30, 2009. Our
obligations under this lease are guaranteed by The Advisory Board Company. The
guarantee will expire on March 31, 2002 provided that certain conditions
regarding our financial condition have been met.

43
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of the date of this prospectus with respect to
each person who to our knowledge beneficially owns 5% or more of the
outstanding shares of common stock, each director and named executive officer,
all executive officers and members of the Board of Directors as a group and
each of the selling stockholders. Except as indicated in the footnotes to the
table, the persons named in the table have sole voting and investment power
with respect to all shares beneficially owned.

<TABLE>
<CAPTION>
Total Shares
Beneficially Owned
Shares Beneficially Shares to Be and Subject to
Owned Prior To Number Beneficially Owned Options After
Offering(1) of After Offering(1)(3) Offering(4)(5)
-------------------- Shares ------------------------ ------------------
Name Number(2) Percent(2) Offered Number Percent Number Percent
- ---- --------- ---------- --------- ------------- ---------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
David G. Bradley(6)..... 3,697,891 27.3% 3,051,371 646,520 4.2% 646,520 3.4%
Jeffrey D. Zients(7).... 351,120 2.5 100,000 251,120 1.6 251,120 1.3
Michael A. D'Amato(7)... 172,160 1.3 35,000 137,160 * 137,160 *
James J. McGonigle(7)... 266,258 1.9 175,000 91,258 * 382,108 2.0
Harold L. Siebert....... 169,000 1.2 - 169,000 1.1 384,000 2.0
Robert C. Hall.......... 36,120 * - 36,120 * 36,120 *
David W. Kenny.......... 36,120 * - 36,120 * 36,120 *
Stephen G. Pagliuca..... 36,120 * - 36,120 * 36,120 *
Clay M. Whitson(7)...... 59,333 * 40,000 19,333 * 134,000 *
Sally Chang............. 128,459 * 128,459 - - 133,525 *
Derek C. M. van
Bever(7)............... 100,333 * 60,000 40,333 * 143,758 *
Paul C. Amoruso......... 85,459 * 85,459 - - 115,525 *
<CAPTION>
Other employees:
<S> <C> <C> <C> <C> <C> <C> <C>
David P. Apgar......... 20,510 * 16,000 4,510 * 26,320 *
Jefferson Jonathan
Farrar Baker.......... 90,300 * 90,300 - - 90,300 *
Ashwin S. Bhave........ 1,125 * 875 250 * 2,875 *
Peter J. Buer.......... 40,825 * 40,825 - - 45,075 *
Vikram Capoor.......... 44,633 * 42,508 2,125 * 47,200 *
Donald R. Carison...... 1,875 * 1,000 875 * 3,500 *
Eric L. Carter......... 875 * 875 - - 2,625 *
Christopher A.
DeConti............... 43,983 * 40,825 3,158 * 48,233 *
Jonathan N. Dyke....... 1,375 * 1,375 - - 4,125 *
Peter Freire........... 94,675 * 94,675 - - 103,425 *
Derek T. Frost......... 890 * 890 - - 2,625 *
Julie E. Gess.......... 50,256 * 44,720 5,536 * 56,631 *
Leab Haunz Johnson..... 875 * 875 - - 2,625 *
Michael Kostoff........ 94,675 * 94,675 - - 103,583 *
Alan B. Landis......... 10,710 * 9,460 1,250 * 14,460 *
Mark D. Little......... 1,100 * 1,100 - - 2,625 *
William B. McKinnon.... 63,950 * 63,950 - - 71,450 *
Christopher G. Miller.. 44,708 * 40,825 3,883 - 48,958 *
Thomas L. Monahan...... 60,433 * 48,250 12,183 * 81,208 *
Mathew S. Olson........ 95,958 * 93,458 2,500 * 100,300 *
Paul R. O'Neill........ 27,925 * 25,800 2,125 * 34,300 *
Timothy M. Pollard..... 27,050 * 27,050 - * 29,550 *
Kurt J. Reisenberg..... 10,710 * 7,920 2,790 * 16,000 *
Anthony J. Skarupa..... 34,400 * 17,000 17,400 * 17,400 *
Elizabeth A. Smith..... 40,810 * 39,560 1,250 * 44,560 *
Jerome D. Sorkin....... 62,325 * 60,200 2,125 * 68,700 *
Srinivasan
Soundaraajan.......... 875 * 875 - - 2,625 *
Ursula Srauch.......... 41,685 * 39,560 2,125 * 48,060 *
Jessica M. Sweeney..... 27,925 * 25,800 2,125 * 34,300 *
Cara A. Wallinsky...... 40,810 * 39,560 1,250 * 44,560 *
Pope B. Ward........... 27,925 * 25,800 2,125 * 34,300 *
Scott M. Winslow....... 58,120 * 55,900 2,250 * 64,400 *
Bruce M. Young......... 32,225 * 32,225 - * 36,475 *
The TCW Group,
Inc./Robert Day (8).... 1,336,935 9.9 - 1,336,935 8.8 1,336,935 7.1
All executive officers
and directors
as a group (11
persons)............... 1,440,482 9.6 623,918 816,564 5.3 1,789,556 9.5
</TABLE>

(notes on following page)

44
<PAGE>

- --------
* Represents less than 1%

(1) The information contained in this table reflects "beneficial ownership"
as defined in Rule 13d-3 under the Securities Exchange Act of 1934.
(2) The number of shares and percentages included in these columns are
calculated in accordance with Rule 13d-3(d) under the Securities Exchange
Act of 1934. Pursuant to that rule, in addition to the issued and
outstanding shares beneficially owned, holders are treated as
beneficially owning shares that are subject to options that are
exercisable within 60 days. For purposes of calculating the percentage of
shares owned, the option shares attributed to each holder are deemed to
be outstanding for the purpose of calculating the percentage of
outstanding common stock owned by that holder, but are not deemed to be
outstanding for the purpose of computing the percentage of common stock
owned by any other person.

(3) Assumes no exercise of the underwriters' over-allotment option. In the
event the over-allotment option is exercised in full by the underwriters,
Mr. Bradley will no longer beneficially own any shares of our common
stock, Mr. Zients will beneficially own 236,120 shares (1.5%) Mr. D'Amato
will beneficially own 132,160 shares (less than 1%), Mr. McGonigle will
beneficially own 66,258 shares (less than 1%), Mr. Whitson will
beneficially own 9,333 shares (less than 1%), Mr. van Bever will
beneficially own 30,333 shares (less than 1%) and all executive officers
and directors as a group will beneficially own 751,564 shares (4.7%) of
the outstanding common stock.

(4) The number column indicates the number of shares owned after the offering
assuming the exercise of all options, whether vested or unvested, without
regard to whether or not the options are exercisable within 60 days.
Percentages in the percent column are calculated on a diluted basis,
assuming that all shares subject to options are deemed to be outstanding,
whether vested or unvested and without regard to whether or not the
options are exercisable within 60 days.

(5) Assumes no exercise of the underwriters' over-allotment option. In the
event the over-allotment option is exercised in full by the underwriters,
Mr. Bradley will no longer own any shares of our common stock, Mr. Zients'
total ownership (calculated as per note (4) above) will be 236,120 shares
(1.3%), Mr. D'Amato's total ownership will be 132,160 shares (less than
1%), Mr. McGonigle's total ownership will be 357,108 shares (1.9%), Mr.
Whitson's total ownership will be 124,000 shares (less than 1%), Mr. van
Bever's total ownership will be 133,457 shares (less than 1%) and the
total ownership by all executive officers and directors as a group will be
1,724,556 shares (9.2%).

(6) Includes shares held by the Bradley Trust.

(7) Includes shares to be sold by such holder in this offering that will be
issued immediately prior to the date of this prospectus as a result of the
exercise of options.

(8) As reported in a Schedule 13G filed on July 12, 1999. The Schedule 13G
states that The TCW Group, Inc. and Robert Day share voting and investment
power with respect to the shares, and that shares reported for Robert Day
include shares reported for The TCW Group, Inc.

45
<PAGE>

DESCRIPTION OF CAPITAL STOCK

General

Our certificate of incorporation provides that we are authorized to issue
100 million shares of common stock, par value $.01 per share, and five million
shares of preferred stock, par value $.01 per share.

Common Stock

Stockholders are entitled to one vote for each share of common stock held of
record on all matters on which stockholders are entitled or permitted to vote.
The common stock does not have cumulative voting rights in the election of
directors. As a result, holders of a majority of the shares of common stock
voting for the election of directors can elect all the directors standing for
election.

Holders of the common stock are entitled to receive dividends out of funds
legally available therefor when and if declared from time to time by the Board
of Directors. See "Price Range of Common Stock and Dividend Policy." In the
event of our liquidation, dissolution or winding up, the holders of the common
stock will be entitled to share ratably in all assets remaining after payment
of liabilities, subject to the rights of any then outstanding preferred stock.
The common stock has no preemptive, subscription or conversion rights and
there are no redemption or sinking fund provisions in our certificate of
incorporation. The rights, preferences and privileges of holders of the common
stock are subject to, and may be adversely affected by, the rights of holders
of shares of any series of preferred stock that we may designate and issue in
the future. The issued and outstanding shares of common stock are fully paid
and nonassessable.

Preferred Stock

The Board of Directors may issue the preferred stock in different series and
classes and fix the dividend rights, dividend rate, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions),
liquidation preferences and other rights and preferences of the preferred
stock not in conflict with our certificate of incorporation or Delaware law.
There currently are no shares of preferred stock outstanding, and the Board of
Directors has no present plans to issue any shares of preferred stock. The
Board of Directors, without stockholder approval, may issue shares of
preferred stock with voting and conversion rights that could adversely affect
the voting power of holders of the common stock. The issuance of shares of
preferred stock might have the effect of delaying, deferring or preventing a
change in control.

Corporate Governance Provisions of Our Certificate of Incorporation and Bylaws

Our certificate of incorporation provides that the Board may not adopt a
"stockholders rights plan" (as defined in the certificate of incorporation),
commonly called a "poison pill," unless the rights plan is ratified by the
affirmative vote of the holders of a majority of the shares of common stock,
expires no later than 37 months after adoption and permits the rights issued
thereunder to be redeemed at any time by the affirmative vote of the holders
of a majority of the shares of common stock. We have elected not to be subject
to Section 203 of the Delaware General Corporation Law, which generally
prevents an "interested stockholder" (defined generally as a person owning 15%
or more of a corporation's outstanding voting stock) from engaging in a
"business combination" (as defined) with a Delaware corporation for three
years following the date such person became an interested stockholder unless
certain conditions are satisfied. Our certificate of incorporation does not
permit stockholders to act by written consent without a meeting of
stockholders. Our certificate of incorporation and bylaws provide that special
meetings of stockholders may be called by a majority of the full Board of
Directors, the Chairman of the Board or any holder or holders of at least 40%
of any class of our outstanding capital stock then entitled to vote at the
meeting.

46
<PAGE>

Our bylaws provide that the number of directors will be fixed from time to
time by the stockholders or the Board of Directors. We currently have seven
directors.

Limitation on Liability and Indemnification Matters

Our certificate of incorporation provides that, to the fullest extent
permitted by the Delaware General Corporation Law, no director will be liable
to us or our stockholders for monetary damages for breach of fiduciary duty as
a director. Under the Delaware General Corporation Law, liability of a
director may not be limited for any breach of the director's duty of loyalty
to the company or its stockholders, for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, in respect
of certain unlawful dividend payments or stock redemptions or repurchases and
for any transaction from which the director derives an improper personal
benefit. The effect of this provision of our certificate of incorporation is
to eliminate our rights and the rights of our stockholders (through
stockholders' derivative suits on our behalf) to recover monetary damages
against a director for breach of the fiduciary duty of care as a director,
including breaches resulting from negligent or grossly negligent behavior,
except in the situations described above. This provision does not limit or
eliminate our rights or the rights of any stockholder to seek non-monetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. In addition, our bylaws provide that we will
indemnify our directors, officers, employees and agents to the fullest extent
permitted by the Delaware General Corporation Law. We may purchase and
maintain insurance or furnish similar protection on behalf of any officer or
director against any liability asserted against the officer or director and
incurred by the officer or director in such capacity, or arising out of the
status, as an officer or director.

Transfer Agent and Registrar

The Transfer Agent and Registrar for the common stock is Chase Mellon
Shareholder Services LLC.

47
<PAGE>

UNDERWRITING

Subject to the terms and conditions stated in the underwriting agreement
dated , 2000, each underwriter named below has severally agreed to
purchase and the selling stockholders have agreed to sell to such underwriter,
the number of shares set forth below opposite their respective names.

<TABLE>
<CAPTION>
Number of
Underwriter Shares
----------- ---------
<S> <C>
Salomon Smith Barney Inc. .........................................
Donaldson, Lufkin & Jenrette Securities Corporation................
Friedman, Billings, Ramsey & Co., Inc. ............................
Goldman, Sachs & Co. ..............................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated.................
---------
Total............................................................ 4,800,000
=========
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
approval of various legal matters by counsel and to various other conditions.
The underwriters are obligated to purchase all the shares, other than those
covered by the over-allotment option described below, if they purchase any of
the shares.

The underwriters, for whom Salomon Smith Barney Inc., Donaldson, Lufkin &
Jenrette Securities Corporation, Friedman, Billings, Ramsey & Co., Inc.,
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
are acting as representatives, propose to offer some of the shares directly to
the public at the public offering price set forth on the cover page of this
prospectus and some of the shares to various dealers at the public offering
price less a concession not in excess of $ per share. The underwriters may
allow, and those dealers may reallow, a concession not in excess of $ per
share on sales to certain other dealers. If all of the shares are not sold at
the initial offering price, the representatives may change the public offering
price and the other selling terms.

Several selling stockholders have granted to the underwriters an option,
exercisable for 30 days from the date of this prospectus, to purchase up to
711,520 additional shares of common stock at the public offering price less
the underwriting discount. The underwriters may exercise this option solely
for the purpose of covering over-allotments, if any, in connection with this
offering. To the extent the option is exercised, each underwriter will be
obligated, subject to various conditions, to purchase a number of additional
shares approximately proportionate to each underwriter's initial purchase
commitment.

We, the selling stockholders, our executive officers and directors have
agreed that, for a period of 90 days from the date of this prospectus, we and
these other parties will not, without the prior written consent of Salomon
Smith Barney Inc., dispose of or hedge any shares of common stock or any
securities convertible into or exchangeable for our common stock. Salomon
Smith Barney Inc. in its sole discretion may release any of the securities
subject to these lock-up agreements at any time without notice. These
restrictions will not affect our ability (i) to issue and sell our common
stock or make any awards pursuant to the 1997 Incentive Plan, the 1999 Plan
and the Directors Plan, (ii) to issue shares of our common stock pursuant to
the exercise of stock options currently outstanding or granted pursuant to the
1997 Incentive Plan, the 1999 Plan or the Directors Plan, or (iii) to issue
shares of our common stock or securities convertible into, or exercisable or
exchangeable for, shares of our common stock in connection with an acquisition
of or merger with another corporation as long as the securities are not
registered under the Securities Act of 1933 during the lock-up period.

Our common stock is quoted on the Nasdaq National Market under the symbol
"EXBD."

48
<PAGE>

The following table shows the underwriting discounts and commissions to be
paid to the underwriters by the selling stockholders in connection with this
offering. These amounts are shown assuming both no exercise and full exercise
of the underwriters' option to purchase additional shares of common stock.

<TABLE>
<CAPTION>
Paid by Selling
Stockholders
-----------------
No Full
Exercise Exercise
-------- --------
<S> <C> <C>
Per share.................................................. $ $
Total...................................................... $ $
</TABLE>

In connection with the offering, Salomon Smith Barney Inc., on behalf of the
underwriters, may over-allot, or engage in syndicate covering transactions,
stabilizing transactions and penalty bids. Over-allotment involves syndicate
sales of common stock in excess of the number of shares to be purchased by the
underwriters in the offering, which creates a syndicate short position.
Syndicate covering transactions involve purchases of the common stock in the
open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of bids or
purchases of common stock made for the purpose of preventing or retarding a
decline in the market price of the common stock while the offering is in
progress. Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when Salomon Smith Barney Inc., in covering syndicate
short positions or making stabilizing purchases, repurchases shares originally
sold by that syndicate member. These activities may cause the price of the
common stock to be higher than the price that otherwise would exist in the
open market in the absence of these types of transactions. These transactions
may be effected on the Nasdaq National Market or in the over-the-counter
market, or otherwise, and, if commenced, may be discontinued at any time.

Most of the shares to be sold by the selling stockholders in this offering
will be sold to U.S. purchasers, but a limited number of shares may be sold to
non-U.S. purchasers.

If and to the extent that any shares are offered or sold in the United
Kingdom, each underwriter agrees that it:

. will not offer or sell any shares to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (whether as principal or
agent) for the purposes of their businesses or in other circumstances
which do not constitute an offer to the public in the United Kingdom for
the purposes of the Public Offers of Securities Regulation 1995 (the
"Regulations");

. will comply with all applicable provisions of the Regulations and of the
Financial Services Act 1986 with respect to anything done by it in
relation to the shares of common stock offered hereby in, from other
otherwise involving the United Kingdom; and

. will only issue or pass on in the United Kingdom any document received
by it in connection with the issue of these shares if that person is of
a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 (as amended) or is a
person to whom such document may otherwise lawfully be issued or passed
on.

The selling stockholders will bear the expenses of this offering, which are
estimated to be $650,000.

Certain of the underwriters have performed various investment banking,
commercial banking and advisory services for us for which they have received
customary fees and expenses. The representatives may, from time to time,
engage in transactions with and perform services for us in the ordinary course
of their business.

We and the selling stockholders have agreed to indemnify the underwriters
against various liabilities, including liabilities under the Securities Act of
1933, or to contribute to payments the underwriters may be required to make in
respect of any of those liabilities.

49
<PAGE>

LEGAL MATTERS

The validity of the shares of common stock offered by this prospectus will
be passed upon for us by Gibson, Dunn & Crutcher LLP. The underwriters will be
represented by Cravath, Swaine & Moore.

EXPERTS

The audited financial statements and schedule as of December 31, 1998 and
1999, and for each of the three years in the period ended December 31, 1999
included in this prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed a registration statement on Form S-1 with the Securities and
Exchange Commission under the Securities Act with respect to the common stock
offered hereby. This prospectus does not contain all the information set forth
in the registration statement and the exhibits and schedules thereto. For
further information with respect to us and our common stock, reference is made
to the registration statement and the exhibits and schedules filed as part
thereof. Statements contained in this prospectus as to the contents of any
contract or any other document referred to are not necessarily complete, and,
in each instance, if such contract or document is filed as an exhibit,
reference is made to the copy of such contract or document filed as an exhibit
to the registration statement, each such statement being qualified in all
respects by such reference to such exhibit. A copy of the registration
statement, and the exhibits and schedules thereto, may be inspected without
charge at the public reference facilities maintained by the Securities and
Exchange Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Securities and Exchange Commission's regional offices
located at the Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New
York, New York 10048, and copies of all or any part of the registration
statement may be obtained from such offices upon the payment of the fees
prescribed by the Securities and Exchange Commission. The Securities and
Exchange Commission also maintains a World Wide Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants like us who file electronically with the Securities and
Exchange Commission. The registration statement, including all exhibits
thereto and amendments thereof, are available on this World Wide Web site.

We are subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, and in accordance therewith, we file annual and quarterly
reports, proxy statements and other information with the Securities and
Exchange Commission. Such reports, proxy statements and other information may
be inspected, and copies of such material may be obtained upon payment of the
prescribed fees, at the Securities and Exchange Commission's public reference
facilities at the addresses set forth above.

We intend to furnish to our stockholders annual reports containing financial
statements audited by its independent public accountants and will make
available copies of quarterly reports for the first three quarters of each
fiscal year containing unaudited financial information.

50
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants.................................. F-2
Balance Sheets as of December 31, 1998 and 1999........................... F-3
Statements of Income for the years ended December 31, 1997, 1998 and
1999..................................................................... F-4
Statements of Changes in Stockholders' Equity (Deficit) for the years
ended December 31, 1997, 1998 and 1999................................... F-5
Statements of Cash Flows for the years ended December 31, 1997, 1998 and
1999..................................................................... F-6
Notes to Financial Statements............................................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of The Corporate Executive Board Company:

We have audited the accompanying balance sheets of The Corporate Executive
Board Company (formerly The Corporate Advisory Board Company and a division of
The Advisory Board Company until October 31, 1997) as of December 31, 1998 and
1999, and the related statements of income, stockholders' equity (deficit) and
cash flows for each of the three years in the period ended December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Corporate Executive
Board Company as of December 31, 1998 and 1999, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting
principles.

/s/ Arthur Andersen LLP

Washington, D.C.
January 31, 2000

F-2
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

BALANCE SHEETS
(In thousands, except share amounts)

<TABLE>
<CAPTION>
December 31,
----------------
1998 1999
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................................. $12,232 $19,726
Marketable securities...................................... 3,872 --
Receivables:
Membership fees receivable, net.......................... 17,165 26,603
Due from stockholder..................................... 6,500 --
Due from affiliate....................................... 350 --
Other assets............................................... 383 1,318
Deferred income taxes, net................................. 1,438 8,047
Deferred offering costs.................................... 1,251 --
Deferred incentive compensation............................ 2,023 2,801
------- -------
Total current assets................................... 45,214 58,495
------- -------
MARKETABLE SECURITIES........................................ -- 13,348
PROPERTY AND EQUIPMENT, NET.................................. 3,714 9,921
------- -------
Total assets........................................... $48,928 $81,764
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued liabilities................... $ 5,159 $ 6,041
Accrued incentive compensation............................. 2,661 3,877
Due to affiliate........................................... -- 41
Stock option repurchase and special bonus plan liability... 7,054 4,710
Deferred revenues.......................................... 39,061 55,436
------- -------
Total current liabilities.............................. 53,935 70,105
------- -------
OTHER LIABILITIES............................................ -- 813
LONG-TERM STOCK OPTION REPURCHASE LIABILITY.................. 3,140 --
------- -------
Total liabilities...................................... 57,075 70,918
------- -------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, par value $0.01; 5,000,000 shares
authorized,
no shares issued and outstanding.......................... -- --
Common stock, par value $0.01; 100,000,000 shares
authorized and
12,504,400 and 13,569,960 shares issued and outstanding as
of
December 31, 1998 and 1999, respectively.................. 125 136
Additional paid-in-capital................................. 2,646 269
Deferred compensation...................................... (953) (570)
Retained earnings (deficit)................................ (9,965) 11,691
Accumulated elements of comprehensive income............... -- (680)
------- -------
Total stockholders' equity (deficit)................... (8,147) 10,846
------- -------
Total liabilities and stockholders' equity (deficit)... $48,928 $81,764
======= =======
</TABLE>

See accompanying notes to financial statements.

F-3
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

STATEMENTS OF INCOME
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
REVENUES.............................................. $38,669 $53,030 $70,767
Cost of services.................................... 20,036 25,373 28,602
------- ------- -------
GROSS PROFIT.......................................... 18,633 27,657 42,165
------- ------- -------
COSTS AND EXPENSES:
Member relations and marketing...................... 8,106 11,676 15,525
General and administrative.......................... 5,660 6,920 8,485
Depreciation........................................ 722 885 1,318
Stock option restructuring and repurchase and
special bonus plan................................. 3,063 5,342 383
------- ------- -------
17,551 24,823 25,711
------- ------- -------
INCOME FROM OPERATIONS................................ 1,082 2,834 16,454
INTEREST INCOME....................................... 122 786 1,114
------- ------- -------
INCOME BEFORE PROVISION FOR INCOME TAXES.............. 1,204 3,620 17,568
PROVISION FOR INCOME TAXES............................ 120 361 4,322
------- ------- -------
NET INCOME............................................ $ 1,084 $ 3,259 $13,246
======= ======= =======
EARNINGS PER SHARE:
Basic............................................... $ 0.09 $ 0.26 $ 1.00
Diluted............................................. $ 0.08 $ 0.22 $ 0.83
======= ======= =======
WEIGHTED AVERAGE SHARES USED IN THE CALCULATION OF
EARNINGS PER SHARE:
Basic............................................... 12,504 12,504 13,223
Diluted............................................. 13,752 14,950 16,027
</TABLE>

See accompanying notes to financial statements.

F-4
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

For the years ended December 31, 1997, 1998, and 1999
(In thousands, except share amounts)

<TABLE>
<CAPTION>
Accumu-
lated
Preferred Common elements of Annual
stock stock Additional Deferred Retained compre- Compre-
------------- ----------------- paid-in- compen- earnings hensive hensive
Shares Amount Shares Amount capital sation (deficit) income Total income
------ ------ ---------- ------ ---------- -------- --------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1996...... -- $ -- -- $ -- $ -- $ -- $(7,411) $ -- $(7,411) $ --
Distributions to
stockholder........... -- -- -- -- -- -- (20) -- (20) --
Division spin-off...... -- -- 12,504,400 125 -- -- (7) -- 118 --
Deferred compensation
pursuant to
substitution of stock
options............... -- -- -- -- 2,646 (1,459) -- -- 1,187 --
Net income............. -- -- -- -- -- 1,084 -- 1,084 1,084
---- ----- ---------- ----- ------- ------ ------- ------ ------- -------
Balance at
December 31, 1997...... -- -- 12,504,400 125 2,646 (1,459) (6,354) -- (5,042) 1,084
==== ===== ========== ===== ======= ====== ======= ====== ======= =======
Distributions to
stockholder........... -- -- -- -- -- -- (6,870) -- (6,870) --
Amortization of
deferred
compensation.......... -- -- -- -- -- 506 -- -- 506 --
Net income............. -- -- -- -- -- 3,259 -- 3,259 3,259
---- ----- ---------- ----- ------- ------ ------- ------ ------- -------
Balance at
December 31, 1998...... -- -- 12,504,400 125 2,646 (953) (9,965) -- (8,147) 3,259
==== ===== ========== ===== ======= ====== ======= ====== ======= =======
Distributions to
(contributions
from) stockholder,
net................... -- -- -- -- -- -- (6,519) -- (6,519) --
Net income--pre-
termination of
S corporation status.. -- -- -- -- -- -- 1,555 -- 1,555 1,555
Termination of
S corporation status.. -- -- -- -- (14,929) -- 14,929 -- -- --
Issuance of common
stock under special
bonus plan............ -- -- -- -- 1,440 -- -- -- 1,440 --
Issuance of common
stock upon the
exercise of stock
options............... -- -- 1,065,560 11 984 -- -- -- 995 --
Tax benefits related to
the exercise of stock
options............... -- -- -- -- 10,128 -- -- -- 10,128 --
Amortization of
deferred
compensation.......... -- -- -- -- -- 383 -- -- 383 --
Unrealized losses on
available-for-sale
marketable securities,
net of tax............ -- -- -- -- -- -- -- (680) (680) (680)
Net income--post-
termination of
S corporation status.. -- -- -- -- -- -- 11,691 -- 11,691 11,691
---- ----- ---------- ----- ------- ------ ------- ------ ------- -------
Balance at December 31,
1999................... -- $ -- 13,569,960 $ 136 $ 269 $ (570) $11,691 $ (680) $10,846 $12,566
==== ===== ========== ===== ======= ====== ======= ====== ======= =======
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
Year ended December 31,
---------------------------
1997 1998 1999
-------- ------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income....................................... $ 1,084 $ 3,259 $ 13,246
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Depreciation.................................... 722 885 1,318
Tax deductions resulting from the exercise of
common stock options........................... -- -- 5,385
Deferred income taxes........................... (194) (288) (1,458)
Stock option restructuring and repurchase....... 3,063 5,342 383
Changes in operating assets and liabilities:
Membership fees receivable, net................ (1,902) (1,369) (9,438)
Other assets................................... (122) (261) (935)
Deferred incentive compensation................ (226) (927) (778)
Deferred revenues.............................. 9,778 7,587 16,375
Accounts payable and accrued liabilities....... 984 2,777 1,115
Accrued incentive compensation................. 365 762 1,216
Other liabilities.............................. -- -- 813
Special bonus plan............................. -- -- (960)
-------- ------- --------
Net cash flows provided by operating
activities................................... 13,552 17,767 26,282
-------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) disposal of property and equipment,
net............................................. (1,530) (2,086) (7,282)
Receivable from stockholder...................... (6,500) -- 6,500
(Purchase) sale of marketable securities, net.... (3,754) (118) (10,610)
-------- ------- --------
Net cash used in investing activities......... (11,784) (2,204) (11,392)
-------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in payable to/due from affiliate.......... 7,189 (1,857) 391
Distributions to stockholder..................... (20) (6,870) (4,000)
Proceeds from the exercise of common stock
options......................................... -- -- 995
Payment of offering costs........................ -- (951) (1,698)
Stock option repurchases......................... -- (2,590) (3,084)
-------- ------- --------
Net cash provided by (used in) financing
activities................................... 7,169 (12,268) (7,396)
-------- ------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS......... 8,937 3,295 7,494
Cash and cash equivalents, beginning of period.... -- 8,937 12,232
-------- ------- --------
Cash and cash equivalents, end of period.......... $ 8,937 $12,232 $ 19,726
======== ======= ========
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS

1. Description of operations

The Corporate Executive Board Company (the "Company") provides "best
practices" research and analysis focusing on corporate strategy, operations
and general management issues. Best practice research identifies and analyzes
specific management initiatives, processes and strategies that have been
determined to produce the best results in solving common business problems or
challenges. For a fixed annual fee, members of each subscription program have
access to an integrated set of services, including best practices research
studies, executive education seminars, customized research briefs and on-line
access to the program's content database and other services.

2. Spin-off, recapitalization and initial public offering

The Company was incorporated on September 11, 1997, under the laws of the
State of Delaware. The Company's business was operated as a division of The
Advisory Board Company, a Maryland corporation, until October 31, 1997 when
the business was contributed to the Company and spun-off to The Advisory Board
Company's sole stockholder (the "Spin-off"). Prior to the Spin-off, the
Company did not maintain separate bank accounts and all cash receipts and
disbursements were made via The Advisory Board Company and are reflected as
changes in due to/ due from affiliate. Subsequent to the Spin-off, the Company
is responsible for its own cash management and records amounts owed to The
Advisory Board Company in due to/ due from affiliate.

On February 23, 1999, 9,415,280 shares of common stock of the Company were
sold by the sole stockholder and certain optionholders in an initial public
offering (the "Initial Public Offering"). The Company did not directly receive
any of the proceeds from the sale of common stock by the selling stockholders
pursuant to the Initial Public Offering. In addition, immediately prior to the
Initial Public Offering, the Company amended and restated its certificate of
incorporation to increase the number of authorized shares of Class A Stock and
Class B Stock to 17,200 shares and 13,171,760 shares, respectively, and to
authorize 100,000,000 shares of Common Stock, and 5,000,000 shares of
Preferred Stock, each with a par value of $0.01 per share. In addition, to
facilitate the Initial Public Offering, the Company effected a 17.2-for-1
stock split of the shares of Class A Stock and Class B Stock in the form of a
stock dividend. The Class A Stock and the Class B Stock were converted into
Common Stock contemporaneously with the Initial Public Offering. Accordingly,
all share and per share amounts have been retroactively adjusted to give
effect to these events.

3. Summary of significant accounting policies

Cash equivalents and marketable securities

Marketable securities that mature within three months of purchase are
classified as cash equivalents. Investments with maturities of more than three
months are classified as marketable securities. As of December 31, 1998 and
1999, the Company's marketable securities consisted of fixed income
securities. Effective January 1, 1999, the Company classified its marketable
securities as available-for-sale securities. Unrealized gains and losses on
available-for-sale marketable securities are excluded from net income and are
included within accumulated elements of comprehensive income within
stockholders' equity (deficit). Prior to January 1, 1999, the Company
classified its marketable securities as trading securities. The unrealized
holding gains and losses at the date the marketable securities were
transferred to the available-for-sale classification from the trading
classification, have already been recognized into earnings and will not be
reversed.

Property and equipment and leasehold improvements

Property and equipment are stated at cost, less accumulated depreciation.
Replacements and major improvements are capitalized; maintenance and repairs
are charged to expense as incurred. Property and equipment depreciation
expense is calculated using the straight-line method over the estimated useful
lives of the assets, which range from five to eleven years.

F-7
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

The costs of leasehold improvements are capitalized and amortized using the
straight-line method over the shorter of their useful lives or the lease term.

Recovery of long-lived assets

Long-lived assets and identifiable assets to be held and used are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company recognizes an
impairment loss when the sum of the expected undiscounted future cash flows is
less than the carrying amount of the asset. The Company believes that no such
impairment exists as of December 31, 1999.

Revenue recognition

Membership fees are recognized ratably over the term of the related
membership, which is generally twelve months. Membership fees are generally
billable when the member signs a letter of agreement. Certain membership fees
are billed on an installment basis. The Company's policy is to record the full
amount of membership fees receivable and related deferred revenue when a
member signs a letter of agreement.

Commission expense recognition

Certain incentive compensation expenses related to the negotiation of new
and renewal memberships are deferred and are amortized over the term of the
related memberships.

Earnings per share

Basic earnings per share is computed by dividing net income by the number of
basic weighted average common shares outstanding during the period. Diluted
earnings per share is computed by dividing net income by the number of diluted
weighted average common shares outstanding during the period. The number of
weighted average common share equivalents outstanding is determined in
accordance with the treasury-stock method. Common share equivalents consist of
common shares issuable upon the exercise of outstanding common stock options.
Weighted-average shares outstanding for the year ended December 31, 1997 was
calculated assuming that the capital structure established at the date of the
Spin-off was in effect during that period. A reconciliation of basic to
diluted weighted average common shares outstanding is as follows (in
thousands):

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Basic weighted average
common shares
outstanding............ 12,504 12,504 13,223
Weighted average common
share equivalents
outstanding............ 1,248 2,446 2,804
------- ------- -------
Diluted weighted average
common shares
outstanding............ 13,752 14,950 16,027
======= ======= =======
</TABLE>

Concentrations of credit risk

Financial instruments that potentially expose the Company to concentration
of credit risk consist primarily of membership fees receivable and marketable
securities. Although the Company believes that the diversity of its large
membership base has historically minimized the risk of incurring material
losses due to concentrations of credit risk, the Company may be exposed to a
declining membership base in periods of market downturns, severe competition
or international developments.

The Company generates revenues from members located outside the United
States. For the years ending December 31, 1997, 1998, and 1999, approximately
31%, 33%, and 31% of revenues, respectively, were generated from members
located outside the United States. Sales to customers in European countries
for the years ended December 31, 1997, 1998, and 1999 were approximately 13%,
15%, and 15%, respectively, with no other geographic area representing more
than 10% of revenues in any period. No one member accounted for more than 2%
of revenues for any period presented.

F-8
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

In addition, the Company maintains a portfolio of marketable securities
which consist primarily of Washington, D.C. municipal and agency fixed income
securities. The fixed income securities are issued by institutions which
operate within many different industries. As part of its cash management
process, the Company performs periodic evaluations of the relative credit
ratings of these marketable securities.

Fair value of financial instruments

The fair value of current assets and current liabilities approximates their
carrying value due to their short maturity.

Income taxes

Deferred income taxes are determined on the asset and liability method.
Under this method, temporary differences arise as a result of the difference
between the reported amounts of assets and liabilities and their tax basis.
Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or the entire
deferred tax asset will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax law and tax rates on the date
of the enactment of the change.

Research and development expenses

Costs related to the research and development of new company programs are
expensed when incurred.

Reclassification of prior-years' balances

Prior-years' balances have been reclassified to conform with the current-
year presentation.

Use of estimates in preparation of financial statements

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and costs and expenses during
the reporting period. Actual results could differ from those estimates.

4. Transactions with affiliates

Administrative support and management services

The Advisory Board Company provides the Company with limited administrative
support services. Subsequent to the Spin-off, fees are charged to the Company
for these services in accordance with an Administrative Services Agreement
(the "ASA"). The term of the ASA expires on December 31, 2000. The ASA
provides for fees based on either direct costs, costs per certain transaction,
headcount, or a fixed cost per month. For periods prior to the Spin-off, the
Company allocated the costs for administrative support services using
methodologies designed to consistently apply the provisions of the ASA (e.g.,
direct costs, revenue activity drivers, or headcount). In management's
opinion, the cost allocation methodology developed approximates the cost of
internally providing or externally sourcing such services and, therefore,
represents what the costs would be on a stand-alone basis.

Management cost allocations consisting primarily of senior executive costs
allocated by DGB Enterprises, Inc., a separate entity controlled by the
Company's principal stockholder, are charged to the Company (pre and post
Spin-off) based on an allocation of time spent on the Company's activities by
each executive monthly. In management's opinion, the allocations represent
what the costs would be on a stand-alone basis.

F-9
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

Due from (due to) affiliate

Activity in the due from (due to) affiliate is as follows (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Balance at beginning of period.................. $ 5,682 $(1,507) $ 350
Costs allocated to the Company:
The Advisory Board Company.................... (5,502) (4,931) (1,595)
DGB Enterprises, Inc.......................... (1,490) (1,211) --
Cash transfers from the Company to The Advisory
Board Company.................................. 4,079 14,513 3,169
Cash transfers to the Company from The Advisory
Board Company.................................. (4,276) (6,514) (1,965)
------- ------- -------
Balance at end of period........................ $(1,507) $ 350 $ (41)
======= ======= =======
</TABLE>

5. Membership fees receivable

Membership fees receivable consist of the following (in thousands):

<TABLE>
<CAPTION>
As of December 31,
--------------------
1998 1999
--------- ---------
<S> <C> <C>
Billed membership fees receivable...................... $ 13,339 $ 23,328
Unbilled membership fees receivable.................... 5,059 4,616
--------- ---------
18,398 27,944
Allowance for doubtful accounts........................ (1,233) (1,341)
--------- ---------
Membership fees receivable, net...................... $ 17,165 $ 26,603
========= =========
</TABLE>

6. Receivable from stockholder

The Company held a promissory note in the amount of $6.5 million from its
then sole stockholder prior to the Initial Public Offering that was due and
payable on October 31, 2007. Interest of 7% on the outstanding promissory note
balance was payable semiannually on each May 1 and November 1. The stockholder
repaid the note in 1999 using proceeds from the Initial Public Offering.

7. Property and equipment

Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
As of December 31,
--------------------
1998 1999
--------- ---------
<S> <C> <C>
Furniture, fixtures, and equipment..................... $ 4,636 $ 8,310
Leasehold improvements................................. 1,272 5,213
--------- ---------
5,908 13,523
Accumulated depreciation............................... (2,194) (3,602)
--------- ---------
Property and equipment, net.......................... $ 3,714 $ 9,921
========= =========
</TABLE>

8. Income taxes

The Company was an S corporation for Federal income tax purposes until
immediately prior to the Initial Public Offering. As an S corporation, the
taxable income of the Company was passed through to

F-10
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

the sole stockholder and was reported on the sole stockholder's Federal income
tax return. However, as the District of Columbia does not recognize S
corporation status, income taxes related to the District of Columbia were
provided for within the Company's financial statements prior to the Initial
Public Offering. Just prior to the Initial Public Offering, the Company
terminated its S corporation status and is now subject to Federal and state
income taxes at prevailing corporate rates. As a result, the Company recorded
a one-time deferred income tax benefit of $2.7 million due to the change in
tax status. The one-time deferred income tax benefit is reflected in net
income for the year ended December 31, 1999, as a reduction of the provision
for income taxes. If the Company had been a C corporation for U.S. Federal and
state income tax purposes since January 1, 1997 and recorded income taxes
using an annual effective rate of 41.0%, pro forma net income and basic and
diluted earnings per share would have been $0.7 million (unaudited), $0.06
(unaudited) and $0.05 (unaudited) for the year ended December 31, 1997, $2.1
million (unaudited), $0.17 (unaudited) and $0.14 (unaudited) for the year
ended December 31, 1998, and $10.4 million (unaudited), $0.78 (unaudited) and
$0.65 (unaudited) for the year ended December 31, 1999.

The provision for income taxes consists of the following (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1997 1998 1999
------- ------- ---------
<S> <C> <C> <C>
Current......................................... $ 314 $ 649 $ 5,780
Deferred........................................ (194) (288) (1,458)
------- ------- ---------
Provision for income taxes.................... $ 120 $ 361 $ 4,322
======= ======= =========
</TABLE>

The provision for income taxes differs from the amount of income taxes
determined by applying the U.S. Federal income tax statutory rates to income
before provision for income taxes as follows:

<TABLE>
<CAPTION>
Year Ended
December 31,
1999
------------
<S> <C>
Statutory U.S. Federal income tax rate.......................... 35.0%
State income tax, net of U.S. Federal income tax benefit........ 6.5
Termination of S corporation status............................. (15.6)
Phase-in rate differential...................................... (4.0)
Other permanent differences..................................... 2.7
-----
Effective tax rate............................................ 24.6%
=====
</TABLE>

The statutory state and effective income tax rates reflected in the
provision for income taxes are both 9.975% for the years ended December 31,
1997 and 1998.

F-11
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities consist of
the following (in thousands):
<TABLE>
<CAPTION>
As of
December 31,
-------------
1998 1999
------ ------
<S> <C> <C>
Deferred tax assets:
Deferred compensation agreements........................... $1,167 $1,608
Tax deduction resulting from the exercise of common stock
options................................................... -- 4,744
Financial reporting reserves............................... 123 568
Stock option restructuring and repurchase.................. 265 1,050
Employee benefits.......................................... 20 301
Unrealized losses on available-for-sale securities......... -- 454
Other...................................................... 65 484
------ ------
Total deferred tax assets................................ 1,640 9,209
------ ------
Deferred tax liabilities:
Deferred incentive compensation............................ 202 1,162
------ ------
Deferred tax assets, net................................. $1,438 $8,047
====== ======
</TABLE>

Management believes that the Company likely will utilize these net deferred
tax assets to reduce future income tax expense.

9. Comprehensive income (loss)

Comprehensive income (loss) is the change in equity of a business enterprise
during a period from transactions and other events and circumstances from non-
owner sources. Other comprehensive income (loss) refers to revenues, expenses,
gains and losses that under generally accepted accounting principles are
included in comprehensive income (loss), but excluded from net income (loss).
For the year ended December 31, 1999, the element within comprehensive income
consists solely of unrealized losses on available-for-sale securities. At
December 31, 1999, unrealized losses on available-for-sale securities amounted
to approximately $1.1 million. The related tax effect allocated to the
unrealized losses on available-for-sale securities included in comprehensive
income is approximately $454,000. There was no difference between net income
and comprehensive income for the years ended December 31, 1997 and 1998.

10. Defined contribution 401(k) plan

In fiscal 1993, The Advisory Board Company began sponsoring a defined
contribution 401(k) Plan (the "Plan") in which the Company's employees
participate. Pursuant to the Plan, all employees who have reached the age of
twenty-one are eligible to participate. The sponsor provides contributions
equal to 25% of an employee's contribution up to a maximum of 4% of base
salary. Contributions to the Plan for the Company's participants were
approximately $79,000, $112,000 and $159,000, during the years ending December
31, 1997, 1998, and 1999, respectively. In September 1998, the Company
established a defined contribution 401(k) Plan (the "New Plan") with the same
provisions as The Advisory Board Company Plan. As of September 1, 1998,
participants' accounts were transferred to the New Plan and subsequent
participant and Company contributions were made directly to the New Plan.

11. Stock option plans

Background

On March 1, 1994, The Advisory Board Company adopted the Stock-Based
Incentive Compensation Plan (the "Original Plan") to provide for granting of
incentive stock options ("Original Options"). The Original Plan

F-12
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

entitled certain employees to purchase shares of The Advisory Board Company's
Class B Nonvoting Common Stock at a price equal to at least the fair market
value of The Advisory Board Company's stock on the date of grant. The Original
Options were exercisable on the date ten years after the date of grant,
subject to acceleration upon the occurrence of certain events that would alter
the current ownership of The Advisory Board Company, including an initial
public offering or private sale.

Liquid Markets Agreements

On March 31, 1995, The Advisory Board Company and existing optionees adopted
the Liquid Markets Agreements ("Liquid Markets Agreements") to provide the
optionees an opportunity to (i) sell all or a portion of their Original
Options to The Advisory Board Company immediately and/or (ii) modify all or a
portion of their Original Options in accordance with the terms and conditions
of the Continuing Stock-Based Incentive Compensation Plan, which is described
below (the "Continuing Option Plan").

The Liquid Markets Agreements provided for the designation of Original
Options as described above and governed the payments to be made to the
optionees for options sold ("Sold Options"). For the options elected to be
sold, The Advisory Board Company was committed to pay an initial payment of
$55 per option, minus the exercise price, in two installments (25% no later
than December 31, 1995, and 75% no later than December 31, 1996). The Advisory
Board Company was also obligated to pay the optionee an additional payment
(the "Earn Out Payment") based on The Advisory Board Company's income from
operations for the fiscal year ending March 31, 1998.

In March 1997, The Advisory Board Company amended the Liquid Markets
Agreements to provide for (1) guaranteed versus variable Earn Out Payments,
(2) revised payment schedules, (3) revised employment requirements, and (4) in
limited instances, the ability to put current options retroactively into the
Liquid Markets plan.

In December 1998, the Company amended the Liquid Markets Agreements relating
to its employees by eliminating the future employment requirements. The
Company recognized approximately $1.8 million and $2.4 million in compensation
expense related to the Liquid Markets Agreements in years 1997, and 1998,
respectively. There are no earnings charges subsequent to December 31, 1998,
related to these agreements. The Company's obligation under the Liquid Markets
Agreements is reflected in stock option repurchase and special bonus plan
liability in the accompanying balance sheets. At December 31, 1999, the future
cash commitments related to the Liquid Markets Agreements were approximately
$4.7 million. In January 2000, the Company paid approximately $1.6 million in
accordance with the Liquid Markets Agreements.

Stock-Based Incentive Compensation Plan

Adopted on March 31, 1995, the Continuing Option Plan amended and restated
the Original Plan and formalized the terms and conditions of the remaining
modified options (the "Continuing Options"). In conjunction with the Spin-off,
The Advisory Board Company executed Substitution Agreements with each of the
employees of the Company participating in the Continuing Option Plan. The
Substitution Agreement provided for the exchange of The Advisory Board Company
Continuing Options for options in the Company (the "Options") granted under
the Company's Stock-Based Incentive Compensation Plan (the "Current Plan"),
which was adopted at the time of the Spin-off. The Options generally become
exercisable 50% in February 2000, 30% in February 2001 and 20% in February
2002. The Current Plan provides for the issuance of options to purchase up to
5,504,000 shares of common stock. As of December 31, 1999, approximately
4,273,320 shares had been issued or were subject to Options under the Current
Plan. The Options expire between April 2001 and March 2009.

F-13
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

The terms of the Substitution Agreement resulted in a new measurement date
for 1,855,880 options held by employees of the Company, resulting in the
recognition of compensation expense. The compensation expense is being
recognized over the related vesting period. The compensation expense is
reflected in stock option restructuring and repurchase and special bonus plan
in the accompanying statements of income and was approximately $1.3 million,
$500,000, and $380,000 for the years ending December 31, 1997, 1998, and 1999,
respectively. The Company will continue to recognize compensation expense
related to certain substitution agreements in the years ending 2000 and 2001.
The recognition of compensation expense was not required for the remaining
1,421,993 options outstanding at the time of the Spin-off.

1999 Stock Option Plan

On February 18, 1999, the Company adopted the 1999 Stock Option Plan ("1999
Plan"), which reserves 1,892,000 shares of common stock for issuance. During
1999, the Company granted 738,500 common stock options under the 1999 Plan at
a weighted average exercise price of $19.60 per share.

Directors' Stock Option Plan

On December 14, 1998, the Company adopted the Directors' Stock Plan
("Directors' Plan"), which reserves 430,000 shares of common stock for
issuance. During 1999, the Company granted 36,120 common stock options under
the Directors' Plan at a weighted average exercise price of $14.24 per share.

Transactions

The following table summarizes the changes in common stock options under
employee common stock option plans described above:

<TABLE>
<CAPTION>
Number Exercise Price Weighted-Average
of Options per Share Exercise Price
---------- -------------- ----------------
<S> <C> <C> <C>
The Advisory Board Company
Original Options:
Outstanding at December 31,
1996 ....................... 174,475 $15.00-$70.00 $49.15
Options granted ........... 17,500 74.00 74.00
Options sold under Liquid
Markets
Agreement ................ (18,000) 15.00-30.00 17.92
Options cancelled ......... (5,000) 63.00 63.00
---------- ------------- ------
Outstanding prior to Spin-Off
Transaction................. 168,975 $15.00-$74.00 $53.59
========== ============= ======
Company Options:
Outstanding subsequent to
Spin-Off Transaction, re-
lated substitution and re-
capitalization ............. 3,277,873 $ 0.06-$ 1.28 $ 0.77
Options granted ........... 1,407,407 2.03-2.73 2.18
---------- ------------- ------
Outstanding at December 31,
1997 ....................... 4,685,280 0.06-2.73 1.19
Options granted ........... 865,160 2.73-14.24 7.30
Options cancelled ......... (211,560) 2.03-2.73 2.14
---------- ------------- ------
Outstanding at December 31,
1998 ....................... 5,338,880 0.06-14.24 2.13
Options granted ........... 745,500 19.00-38.13 19.60
Options cancelled ......... (7,000) 19.00 19.00
Options exercised ......... (1,065,560) 0.93 0.93
---------- ------------- ------
Outstanding at December 31,
1999 ....................... 5,011,820 $ 0.06-$38.13 $ 4.96
========== ============= ======
</TABLE>

F-14
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

Exercise prices for employee stock options outstanding at December 31, 1999,
are as follows:

<TABLE>
<CAPTION>
Weighted-
Average
Number Outstanding Remaining Weighted-
as of Contractual Average
Range of Exercise Prices December 31, 1999 Life-Years Exercise Price
------------------------ ------------------ ----------- --------------
<S> <C> <C> <C>
$0.06 -- $ 0.06............. 172,000 3.33 $ 0.06
0.29 -- 0.41............. 696,600 3.33 0.31
0.58 -- 0.87............. 447,200 3.33 0.75
0.93 -- 1.28............. 896,513 3.82 0.71
2.03 -- 2.03............. 963,647 3.69 2.03
2.73 -- 3.11............. 476,440 3.33 2.88
6.98 -- 6.98............. 448,920 3.87 6.98
14.24 -- 14.24............. 172,000 3.58 14.24
19.00 -- 19.00............. 686,000 9.13 19.60
23.38 -- 38.13............. 52,500 9.38 27.44
$0.06 -- $38.13............. 5,011,820 4.40 $ 4.96
========== ==== =======
</TABLE>
-------------

As of December 31, 1999, 448,040 options with a weighted average exercise
price of $1.15 are exercisable.

Accounting for stock based compensation

The Company has elected to account for stock and stock rights in accordance
with Accounting Principles Board Opinion number 25, Accounting for Stock
Issued to Employees (APB No. 25). However, pro forma information regarding net
income is required by Financial Accounting Standards Number 123, Accounting
for Stock Based Compensation (FAS No. 123) if the provisions of FAS No. 123
are not elected to be adopted.

Under the FAS No. 123 pro forma disclosure provisions, the fair value of
options granted subsequent to December 15, 1995, has been estimated using the
Black-Scholes option valuation model. The Black-Scholes option valuation model
was developed for use in estimating the fair value of traded options that have
no vesting restrictions and are fully transferable. In addition, option
valuation models require the input of highly subjective assumptions, including
the expected stock price characteristics that are significantly different from
those of traded options. Because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the
fair value of the Company's stock rights.

The fair value of options granted during the years ended December 31, 1997,
1998 and 1999 was estimated using the Black-Scholes option valuation model
with the following weighted-average assumptions: risk free interest rate of
5.5%, 5.5% and 6.5%, respectively; no dividend yield for any year; weighted-
average expected lives of the option of three years, three years and five
years, respectively; and expected volatility of 50%, 50% and 60%,
respectively.

The weighted-average fair value of The Advisory Board Company original
options granted in 1997 during the period January 1 to the date of the Spin-
off was $2.16 per share, the weighted-average fair value of Company options
granted from the date of the Spin-off to December 31, 1997 was $1.27 per
share. The weighted average fair value of Company options granted during the
years ended December 31, 1998 and 1999 was $3.19 per share and $10.03 per
share, respectively. For purposes of pro forma disclosures, the estimated fair
value of options is amortized to expense over the estimated service period.
Under the FAS No. 123 pro forma disclosure provisions, pro forma net income
for 1997 would have been approximately $1.6 million or $0.13 per share (pro
forma basic)

F-15
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

and $0.11 per share (pro forma diluted), pro forma net income for 1998 would
have been approximately $1.6 million or $0.13 per share (pro forma basic) and
$0.10 per share (pro forma diluted), and pro forma net income for 1999 would
have been approximately $9.8 million or $0.74 per share (pro forma basic) and
$0.61 per share (pro forma diluted). The provisions of FAS No. 123 may not
necessarily be indicative of future results.

12. Special bonus plan

In December 1998, the Company and its sole stockholder agreed to pay a
special bonus to selected employees in an amount totaling $2.4 million. The
special bonus was paid at the Initial Public Offering--60% in stock owned by
the sole stockholder and 40% in cash by the Company. The Company recognized
$2.4 million in expense related to this plan in 1998.

13. Supplemental cash flows disclosures

Income taxes paid during the years ended December 31, 1997, 1998 and 1999,
amounted to $90,000, $470,000 and $260,000, respectively. For the year ended
December 31, 1999, the Company recognized $10.1 million in stockholders'
equity (deficit) for tax deductions associated with the exercise of non-
qualified stock options. Estimated current income tax payments for the year
ended December 31, 1999 have been reduced by the consideration of the tax
deductions associated with the exercise of non-qualified stock options.

In addition, in connection with the Initial Public Offering, the sole
stockholder gave $1.4 million in shares of common stock to selected employees
to satisfy a portion of the special bonus plan liability.

14. Commitments and contingencies

Operating Leases

The Company leases office facilities in the United States and the United
Kingdom expiring on various dates over the next eight years. The lease
agreements include provisions for rental escalations based on the Consumer
Price Index and require the Company to pay for executory costs such as taxes
and insurance. Future minimum rental payments under non-cancelable operating
leases, excluding executory costs are as follows (in thousands):

<TABLE>
<CAPTION>
Year Ending
December 31,
------------
<S> <C>
2000.............................................................. $ 2,736
2001.............................................................. 3,165
2002.............................................................. 3,225
2003.............................................................. 3,296
2004.............................................................. 3,320
Thereafter........................................................ 15,858
-------
Total........................................................... $31,600
=======
</TABLE>

Rent expense charged to operations during the fiscal years ended December
31, 1997, 1998, and 1999, was approximately $1.6 million, $2.4 million, and
$3.6 million, respectively. The Company obtained a $1.3 million Letter of
Credit Agreement to provide a security deposit for the office space lease. The
Company's cash, accounts receivable and property and equipment collateralize
the Letter of Credit Agreement.

F-16
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

NOTES TO FINANCIAL STATEMENTS--(Continued)

15. Quarterly financial data (unaudited)

Unaudited summarized financial data by quarter for the years ending December
31, 1998 and 1999 is as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
1998 Quarter Ended
-----------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Revenues......................... $11,598 $12,909 $13,732 $14,791
Gross profit..................... 6,180 6,671 7,494 7,312
Income before provision (benefit)
for income taxes................ 2,051 1,851 1,932 (2,213)
Net income (loss)................ $ 1,847 $ 1,681 $ 1,713 ($1,984)
Earnings (loss) per share:
Basic........................... $ 0.15 $ 0.13 $ 0.14 ($ 0.16)
Diluted......................... $ 0.13 $ 0.11 $ 0.11 ($ 0.13)
</TABLE>

<TABLE>
<CAPTION>
1999 Quarter Ended
-----------------------------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Revenues......................... $15,703 $16,700 $18,414 $19,950
Gross profit..................... 8,950 9,952 11,324 11,939
Income before provision for in-
come taxes...................... 3,464 3,987 4,811 5,306
Net income....................... $ 4,867 $ 2,332 $ 2,863 $ 3,184
Earnings per share:
Basic........................... $ 0.38 $ 0.18 $ 0.21 $ 0.23
Diluted......................... $ 0.31 $ 0.15 $ 0.18 $ 0.19
</TABLE>

F-17
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of The Corporate Executive Board Company:

We have audited, in accordance with generally accepted auditing standards,
the financial statements of The Corporate Executive Board Company (formerly
The Corporate Advisory Board Company and a division of The Advisory Board
Company until October 31, 1997) included in this registration statement and
have issued our report thereon dated January 31, 2000. Our audits were made
for the purpose of forming an opinion on the basic financial statements taken
as a whole. The Schedule II--Valuation and Qualifying Accounts is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, fairly states, in all material respects, the financial
data required to be set forth therein in relation to the basic financial
statements taken as a whole.

/s/ Arthur Andersen LLP

Washington, D.C.
January 31, 2000

F-18
<PAGE>

THE CORPORATE EXECUTIVE BOARD COMPANY

Schedule II--Valuation and Qualifying Accounts
(In thousands)

<TABLE>
<CAPTION>
Additions Additions
Balance at Charged to Charged to Deductions
Beginning Costs and Other from Balance at
of Year Expenses Accounts Reserve End of Year
---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Year ending December 31, 1997
Allowance for doubtful accounts.. $ 400 $1,180 $ -- $ 580 $1,000
------ ------ ----- ------ ------
$ 400 $1,180 $ -- $ 580 $1,000
====== ====== ===== ====== ======
Year ending December 31, 1998
Allowance for doubtful accounts.. $1,000 $1,409 $ -- $1,176 $1,233
------ ------ ----- ------ ------
$1,000 $1,409 $ -- $1,176 $1,233
====== ====== ===== ====== ======
Year ending December 31, 1999
Allowance for doubtful accounts.. $1,233 $1,851 $ -- $1,743 $1,341
------ ------ ----- ------ ------
$1,233 $1,851 $ -- $1,743 $1,341
====== ====== ===== ====== ======
</TABLE>

F-19
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

4,800,000 Shares

The Corporate Executive Board Company

Common Stock

[CORPORATE EXECUTIVE BOARD LOGO APPEARS HERE]

--------

PROSPECTUS

, 2000

--------

Salomon Smith Barney
Donaldson, Lufkin & Jenrette
Friedman Billings Ramsey
Goldman, Sachs & Co.
Merrill Lynch & Co.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The estimated expenses in connection with the offering (all of which will be
borne by the selling stockholders), are as follows:

<TABLE>
<CAPTION>
Expenses Amount
-------- ---------
<S> <C>
Securities and Exchange Commission registration fee............... $ 77,661
NASD filing fee................................................... 29,917
Printing expenses................................................. 250,000
Accounting fees and expenses...................................... 100,000
Legal fees and expenses........................................... 100,000
Transfer agent's fees and expenses................................ 8,500
Miscellaneous..................................................... 83,922
---------
Total........................................................... $650,000
=========
</TABLE>

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------

<C> <S>
1.1 --Form of Underwriting Agreement.+
3.1 --Second Amended and Restated Certificate of Incorporation.*
3.2 --Amended and Restated Bylaws.*
4.1 --Specimen Common Stock Certificate.*
5.1 --Opinion of Gibson, Dunn & Crutcher LLP.+
10.1 --Employment Agreement, dated January 21, 1999, between the Company
and James J. McGonigle.*
10.2 --[Omitted]
10.3 --Employment Agreement, dated November 1, 1998, between the Company
and Clay M. Whitson.*
10.4 --Stock Option Agreement Pursuant to The Corporate Advisory Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and James J. McGonigle, as
amended on January 21, 1999.*
10.5 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
April 15, 1998, between the Company and Harold L. Siebert.*
10.6 --[Omitted]
10.7 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, dated as of
November 1, 1998, between the Company and Clay M. Whitson.*
10.8 --Stock Option Agreement #1 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Michael A. D'Amato.*
10.9 --Stock Option Agreement #2 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Michael A. D'Amato.*
10.10 --Stock Option Agreement #1 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Jeffrey D. Zients.*
10.11 --Stock Option Agreement #2 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Jeffrey D. Zients.*
</TABLE>

II-1
<PAGE>

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------

<C> <S>
10.12 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
June 1, 1998, between the Company and Sally Chang.*
10.13 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Derek C. van Bever, as
amended on July 21, 1998.*
10.14 --Form of Stock Option Agreement Pursuant to The Corporate Advisory
Board Company Stock-Based Incentive Compensation Plan, including
form of amendment.*
10.15 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated January 21, 1999, between the Company and James J.
McGonigle.*
10.16 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, effective as of April 15, 1998, between the Company and
Harold L. Siebert.*
10.17 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated November 1, 1998, between the Company and Clay M.
Whitson.*
10.18 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non- Solicitation and Work
Product, dated October 30, 1997, between the Company and Michael A.
D'Amato.*
10.19 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated October 30, 1997, between the Company and Jeffrey D.
Zients.*
10.20 --Form of Agreement Concerning Exclusive Services, Confidential
Information, Business Opportunities, Non-Competition, Non-
Solicitation and Work Product.*
10.21 --The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan, adopted on October 31, 1997, as amended and
restated.*
10.21.1 --The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan, adopted on October 31, 1997, as amended and
restated in February 1999.*
10.22 --Directors' Stock Plan.*
10.22.1 --Amended Directors' Stock Plan and Standard Terms and Conditions for
Director Non-Qualified Stock Options.*
10.23 --1998 Stock Option Plan.*
10.23.1 --1999 Stock Option Plan and Standard Terms and Conditions for 1999
Stock Option Plan Incentive Stock Options.*
10.24 --Cross-Indemnification Agreement, dated as of January 21, 1999,
between David G. Bradley and The Corporate Executive Board Company.*
10.25 --Promissory Note, dated October 31, 1998, between David G. Bradley
and The Corporate Executive Board Company.*
10.26 --Security Agreement, dated October 31, 1997, between David G. Bradley
and The Corporate Executive Board Company.*
10.27 --Letter Agreement, dated January 18, 1999, between The Corporate
Executive Board Company and David G. Bradley with respect to the
repayment of $6.5 million Promissory Note.*
10.28 --Administrative Services Agreement, dated as of October 31, 1997, as
amended and restated on July 21, 1998, between The Advisory Board
Company and The Corporate Executive Board Company.*
10.29 --Member Contracts Agreement, dated as of October 31, 1997, between
The Advisory Board Company and The Corporate Executive Board
Company.*
10.30 --Vendor Contracts Agreement, dated as of October 31, 1997, as amended
and restated on July 21, 1998, between The Advisory Board Company
and The Corporate Executive Board Company.*
10.31 --Non-Competition Agreement, effective as of January 1, 1999, among
The Advisory Board Company, The Corporate Executive Board Company
and David G. Bradley.*
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------

<C> <S>
10.32 --[Omitted]
10.33 --Distribution Agreement, dated as of October 31, 1997, between The
Corporate Executive Board Company and The Advisory Board Company.*
10.34 --Agreement of Lease, dated June 25, 1998, between The Corporate
Executive Board Company and The George Washington University.*
10.35 --Registration Rights Agreement, dated January 22, 1999, between The
Corporate Executive Board Company and David G. Bradley.*
10.36 --License Agreement, effective as of October 31, 1997, between The
Corporate Executive Board Company and The Advisory Board Company.*
10.37 --Letter agreement regarding the special bonus plan.*
10.38 --Amended and Restated "Liquid Markets" Agreement, dated August 20,
1997, between The Corporate Executive Board Company and Derek C. van
Bever, as amended on December 28, 1998.*
10.39 --Letter to Michael A. D'Amato from the Chairman of The Corporate
Executive Board Company re Accelerated Vesting of Options.*
10.40 --Clarification Letter to Michael A. D'Amato from The Corporate
Executive Board Company re Stock Option Agreements.*
10.41 --Letter to Jeffrey Zients from David Bradley re Accelerated Vesting
of Options.*
10.42 --Clarification Letter to Jeffrey Zients from The Corporate Executive
Board Company re Stock Option Agreements.*
10.43 --Term Sheet for Director Non-Qualified Stock Options between Robert
C. Hall and The Corporate Executive Board Company.*
10.44 --Term Sheet for Director Non-Qualified Stock Options between David W.
Kenny and The Corporate Executive Board Company.*
10.45 --Term Sheet for Director Non-Qualified Stock Options between Stephen
G. Pagliuca and The Corporate Executive Board Company.*
10.46 --Term Sheet for Director Non-Qualified Stock Options between Jeffrey
D. Zients and The Corporate Executive Board Company.*
10.47 --Term Sheet for Director Non-Qualified Stock Options between Michael
A. D'Amato and The Corporate Executive Board Company, as amended on
January 27, 1999.*
21.1 --List of Subsidiaries of The Corporate Executive Board Company.*
23.1 --Consent of Gibson, Dunn & Crutcher LLP (included in its opinion
filed as Exhibit 5.1).+
23.2 --Consent of Arthur Andersen LLP.
24.1 --Power of Attorney.**
27 --Financial Data Schedule.**
</TABLE>
- --------

+To be filed by amendment.

* Incorporated by reference to the same exhibit to the registrant's
Registration Statement on Form S-1, declared effective by the Securities and
Exchange Commission on February 22, 1999 (Registration No. 333-59833).

**Previously filed.

(b) Financial Statement Schedules

The financial statement schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission
are either not required under the related instructions or are inapplicable,
and therefore have been omitted, except for Schedule II--Valuation and
Qualifying Accounts which is provided on page F-19.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the District of
Columbia, on February 4, 2000.

The Corporate Executive Board
Company

/s/ James J. McGonigle
By___________________________________
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ James J. McGonigle Chief Executive Officer February 4, 2000
______________________________________ and Director (Principal
James J. McGonigle Executive Officer)

/s/ Clay M. Whitson Chief Financial Officer February 4, 2000
______________________________________ (Principal Financial
Clay M. Whitson Officer and Principal
Accounting Officer)

* Director February 4, 2000
______________________________________
Michael A. D'Amato

* Director February 4, 2000
______________________________________
Jeffrey D. Zients

* Director February 4, 2000
______________________________________
Harold L. Siebert

* Director February 4, 2000
______________________________________
Robert C. Hall

* Director February 4, 2000
______________________________________
David W. Kenny

* Director February 4, 2000
______________________________________
Stephen G. Pagliuca
</TABLE>

*By:

/s/ Clay M. Whitson
-----------------------------

Clay M. Whitson

Attorney-in-fact
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
1.1 --Form of Underwriting Agreement.+
3.1 --Second Amended and Restated Certificate of Incorporation.*
3.2 --Amended and Restated Bylaws.*
4.1 --Specimen Common Stock Certificate.*
5.1 --Opinion of Gibson, Dunn & Crutcher LLP.+
10.1 --Employment Agreement, dated January 21, 1999, between the Company
and James J. McGonigle.*
10.2 --[Omitted]
10.3 --Employment Agreement, dated November 1, 1998, between the Company
and Clay M. Whitson.*
10.4 --Stock Option Agreement Pursuant to The Corporate Advisory Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and James J. McGonigle, as
amended on January 21, 1999.*
10.5 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
April 15, 1998, between the Company and Harold L. Siebert.*
10.6 --[Omitted]
10.7 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, dated as of November
1, 1998, between the Company and Clay M. Whitson.*
10.8 --Stock Option Agreement #1 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Michael A. D'Amato.*
10.9 --Stock Option Agreement #2 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Michael A. D'Amato.*
10.10 --Stock Option Agreement #1 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Jeffrey D. Zients.*
10.11 --Stock Option Agreement #2 Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Jeffrey D. Zients.*
10.12 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of June
1, 1998, between the Company and Sally Chang.*
10.13 --Stock Option Agreement Pursuant to The Corporate Executive Board
Company Stock-Based Incentive Compensation Plan, effective as of
October 31, 1997, between the Company and Derek C. van Bever, as
amended on July 21, 1998.*
10.14 --Form of Stock Option Agreement Pursuant to The Corporate Advisory
Board Company Stock-Based Incentive Compensation Plan, including form
of amendment.*
10.15 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated January 21, 1999, between the Company and James J.
McGonigle.*
10.16 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, effective as of April 15, 1998, between the Company and
Harold L. Siebert.*
10.17 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated November 1, 1998, between the Company and Clay M.
Whitson.*
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
10.18 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non- Solicitation and Work
Product, dated October 30, 1997, between the Company and Michael A.
D'Amato.*
10.19 --Agreement Concerning Exclusive Services, Confidential Information,
Business Opportunities, Non-Competition, Non-Solicitation and Work
Product, dated October 30, 1997, between the Company and Jeffrey D.
Zients.*
10.20 --Form of Agreement Concerning Exclusive Services, Confidential
Information, Business Opportunities, Non-Competition, Non-
Solicitation and Work Product.*
10.21 --The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan, adopted on October 31, 1997, as amended and
restated.*
10.21.1 --The Corporate Executive Board Company Stock-Based Incentive
Compensation Plan, adopted on October 31, 1997, as amended and
restated in February 1999.*
10.22 --Directors' Stock Plan.*
10.22.1 --Amended Directors' Stock Plan and Standard Terms and Conditions for
Director Non-Qualified Stock Options.*
10.23 --1998 Stock Option Plan.*
10.23.1 --1999 Stock Option Plan and Standard Terms and Conditions for 1999
Stock Option Plan Incentive Stock Options.*
10.24 --Cross-Indemnification Agreement, dated as of January 21, 1999,
between David G. Bradley and The Corporate Executive Board Company.*
10.25 --Promissory Note, dated October 31, 1998, between David G. Bradley
and The Corporate Executive Board Company.*
10.26 --Security Agreement, dated October 31, 1997, between David G. Bradley
and The Corporate Executive Board Company.*
10.27 --Letter Agreement, dated January 18, 1999, between The Corporate
Executive Board Company and David G. Bradley with respect to the
repayment of $6.5 million Promissory Note.*
10.28 --Administrative Services Agreement, dated as of October 31, 1997, as
amended and restated on July 21, 1998, between The Advisory Board
Company and The Corporate Executive Board Company.*
10.29 --Member Contracts Agreement, dated as of October 31, 1997, between
The Advisory Board Company and The Corporate Executive Board
Company.*
10.30 --Vendor Contracts Agreement, dated as of October 31, 1997, as amended
and restated on July 21, 1998, between The Advisory Board Company and
The Corporate Executive Board Company.*
10.31 --Non-Competition Agreement, effective as of January 1, 1999, among
The Advisory Board Company, The Corporate Executive Board Company and
David G. Bradley.*
10.32 --[Omitted]
10.33 --Distribution Agreement, dated as of October 31, 1997, between The
Corporate Executive Board Company and The Advisory Board Company.*
10.34 --Agreement of Lease, dated June 25, 1998, between The Corporate
Executive Board Company and The George Washington University.*
10.35 --Registration Rights Agreement, dated January 22, 1999, between The
Corporate Executive Board Company and David G. Bradley.*
10.36 --License Agreement, effective as of October 31, 1997, between The
Corporate Executive Board Company and The Advisory Board Company.*
10.37 --Letter agreement regarding the special bonus plan.*
10.38 --Amended and Restated "Liquid Markets" Agreement, dated August 20,
1997, between The Corporate Executive Board Company and Derek C. van
Bever, as amended on December 28, 1998.*
10.39 --Letter to Michael A. D'Amato from the Chairman of The Corporate
Executive Board Company re Accelerated Vesting of Options.*
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit
------- ----------------------
<C> <S>
10.40 --Clarification Letter to Michael A. D'Amato from The Corporate
Executive Board Company re Stock Option Agreements.*
10.41 --Letter to Jeffrey Zients from David Bradley re Accelerated Vesting
of Options.*
10.42 --Clarification Letter to Jeffrey Zients from The Corporate Executive
Board Company re Stock Option Agreements.*
10.43 --Term Sheet for Director Non-Qualified Stock Options between Robert
C. Hall and The Corporate Executive Board Company.*
10.44 --Term Sheet for Director Non-Qualified Stock Options between David W.
Kenny and The Corporate Executive Board Company.*
10.45 --Term Sheet for Director Non-Qualified Stock Options between Stephen
G. Pagliuca and The Corporate Executive Board Company.*
10.46 --Term Sheet for Director Non-Qualified Stock Options between Jeffrey
D. Zients and The Corporate Executive Board Company.*
10.47 --Term Sheet for Director Non-Qualified Stock Options between Michael
A. D'Amato and The Corporate Executive Board Company, as amended on
January 27, 1999.*
21.1 --List of Subsidiaries of The Corporate Executive Board Company.*
23.1 --Consent of Gibson, Dunn & Crutcher LLP (included in its opinion
filed as Exhibit 5.1).+
23.2 --Consent of Arthur Andersen LLP.
24.1 --Power of Attorney.**
27 --Financial Data Schedule.**
</TABLE>

- --------

+To be filed by amendment.

**Previously filed.

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
amendment to registration statement.

/s/ Arthur Andersen LLP

Washington, D.C.

February 4, 2000