Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrantþ | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o Preliminary Proxy Statement | ||
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to §240.14a-12 |
The Corporate Executive Board Company
Payment of Filing Fee (Check the appropriate box):
þ | No fee required. | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies: | |||
(2) | Aggregate number of securities to which transaction applies: | |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |||
(4) | Proposed maximum aggregate value of transaction: | |||
(5) | Total fee paid: | |||
o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | |||
(1) | Amount previously paid: | |||
(2) | Form, schedule or registration statement No.: | |||
(3) | Filing party: | |||
(4) | Date filed: |
Table of Contents
Sincerely, | |
Thomas L. Monahan III | |
Chief Executive Officer |
Table of Contents
1. | Election of seven directors. | |
2. | Adoption of Amendments to the 2004 Stock Incentive Plan. | |
3. | Ratification of the appointment of Ernst & Young LLP as independent registered accountant for the year ending December 31, 2005. |
Sincerely, |
James C. Edgemond | |
Secretary |
1 | |||||
1 | |||||
1 | |||||
1 | |||||
1 | |||||
2 | |||||
2 | |||||
2 | |||||
2 | |||||
3 | |||||
3 | |||||
4 | |||||
4 | |||||
4 | |||||
4 | |||||
5 | |||||
6 | |||||
6 | |||||
8 | |||||
16 | |||||
16 | |||||
17 | |||||
18 | |||||
19 | |||||
19 | |||||
20 | |||||
20 | |||||
20 | |||||
22 | |||||
24 | |||||
25 | |||||
25 | |||||
25 | |||||
25 | |||||
26 |
Table of Contents
Table of Contents
2
Table of Contents
3
Table of Contents
4
Table of Contents
5
Table of Contents
Director | ||||||||||
Name of Director/ Nominee | Age | Principal Occupation | Since | |||||||
James J. McGonigle | 41 | Executive Chairman of the Board of Directors | 1998 | |||||||
Thomas L. Monahan III | 38 | Chief Executive Officer of the Company | 2001 | |||||||
Russell P. Fradin | 49 | President and Chief Executive Officer of The BISYS Group, Inc. | 2004 | |||||||
Robert C. Hall | 74 | Former Chairman of Harborside Plus, Inc. | 1999 | |||||||
Nancy J. Karch | 57 | Director (Senior Partner) Emeritus, McKinsey & Company | 2001 | |||||||
David W. Kenny | 43 | Chairman and Chief Executive Officer of Digitas, Inc. | 1999 | |||||||
Daniel O. Leemon | 51 | Retired former Executive Vice President and Chief Strategy Officer of Charles Schwab Corporation | 2003 |
6
Table of Contents
7
Table of Contents
• | allow non-employee directors to participate in the 2004 Plan, and | |
• | place annual limits on the size of awards that may be granted to non-employee directors. |
8
Table of Contents
• | Granting stock options at a price below market price on the date of grant. | |
• | Granting options that are exercisable sooner than one (1) year after the date of grant except in the event of death, disability or a change of control. | |
• | Granting options with a term of more than seven (7) years. | |
• | Granting restricted stock or restricted stock units that are scheduled to become fully vested in less than three years except in the event of death, disability or retirement, except that performance vesting restricted stock and restricted stock units can vest based on performance over a period of at least one year. | |
• | Repricing a stock option or stock appreciation right without stockholder approval. |
• | Options and stock appreciation rights: 30,000 shares | |
• | Other stock awards: 12,000 shares |
• | Options and stock appreciation rights: 500,000 shares | |
• | Other stock awards: 200,000 | |
• | Incentive Bonus: $4,000,000, if such bonus is intended to qualify as performance-based compensation for purposes of Section 162(m) of the Code. |
9
Table of Contents
• | to prescribe, amend and rescind rules and regulations relating to the 2004 Plan and to define terms not otherwise defined therein; | |
• | to determine which persons are eligible to participate, to which of such participants, if any, awards shall be granted hereunder and the timing of any such awards, and to grant awards; | |
• | to determine the terms and conditions thereof, including the number of shares subject to awards and the exercise or purchase price of such shares and the circumstances under which awards become exercisable or vested or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events (including events which the Board or the Administrator determine constitute a change of control), or other factors; | |
• | to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any award; | |
• | to prescribe and amend the terms of the agreements or other documents evidencing awards made under the 2004 Plan (which need not be identical) and the terms of or form of any document or notice required to be delivered to the Company by participants under the 2004 Plan; | |
• | to determine whether, and the extent to which, adjustments are required as a result of any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off or dividend (other than regular, quarterly cash dividends); | |
• | to interpret and construe the 2004 Plan, any rules and regulations under the 2004 Plan and the terms and conditions of any award granted thereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; and | |
• | to make all other determinations deemed necessary or advisable for the administration of the 2004 Plan. |
10
Table of Contents
11
Table of Contents
• | cash flow (before or after dividends) | |
• | return on operating revenue | |
• | stock price | |
• | return on equity | |
• | total stockholder return | |
• | return on capital (including return on total capital or return on invested capital) | |
• | return on assets or net assets | |
• | market capitalization | |
• | economic value added | |
• | debt leverage (debt to capital) | |
• | revenue | |
• | income or net income | |
• | operating income | |
�� | operating profit or net operating profit | |
• | operating margin or profit margin | |
• | earnings per share (including earnings before interest, taxes, depreciation and amortization) | |
• | cash from operations | |
• | operating ratio | |
• | operating revenue | |
• | customer service |
• | asset write-downs; | |
• | litigation, claims, judgments or settlements; | |
• | the effect of changes in tax law, accounting principles or other laws or provisions affecting reported results; | |
• | accruals for reorganization and restructuring programs; and | |
• | any extraordinary, unusual or non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s Form 10-K or Forms 10-Q filed with the SEC for the applicable year. |
• | Increase the maximum number of shares that may be issued under the 2004 Plan; | |
• | Permit granting of stock options at less than fair market value; | |
• | Reduce the exercise price of outstanding options; |
12
Table of Contents
• | Extend the term of the 2004 Plan; | |
• | Change the class of individuals eligible for the 2004 Plan; | |
• | Otherwise amend the 2004 Plan in any manner requiring stockholder approval by law or under the NASDAQ National Market listing requirements; | |
• | Increase the individual annual award limitations; and | |
• | Impair the rights of any award holder without his or her consent (unless the Administrator determines prior to any change of control that the amendment or alteration is required or advisable in certain situations). |
13
Table of Contents
14
Table of Contents
(A) | (B) | (C) | ||||||||||
Number Of | ||||||||||||
Securities To Be | Number Of Securities | |||||||||||
Issued Upon | Weighted-Average | Remaining Available for | ||||||||||
Exercise Of | Exercise Price Of | Future Issuances Under Equity | ||||||||||
Outstanding | Outstanding Options, | Compensation Plans (Excluding | ||||||||||
Options, Warrants | Warrants And | Securities Reflected In | ||||||||||
Plan Category | And Rights | Rights | Column (A)) | |||||||||
Equity compensation plans approved by stockholders | 3,093,052 | $ | 35.87 | 3,968,320 | ||||||||
Equity compensation plans not approved by stockholders(1) | 2,318,654 | 36.63 | — | |||||||||
Total | 5,411,706 | $ | 36.20 | 3,968,320 | ||||||||
(1) | See Note 13 to the Company’s audited financial statements for the year ended December 31, 2004 for a narrative description of the 2002 Non-Executive Stock Incentive Plan, which was not approved by stockholders. |
15
Table of Contents
Year Ended December 31, | ||||||||
2003 | 2004 | |||||||
Audit fees | $ | 196,940 | $ | 341,906 | ||||
Audit-related fees | 12,237 | 13,000 | ||||||
Tax fees | 122,994 | 133,385 | ||||||
All other fees | — | — | ||||||
Total | $ | 332,171 | $ | 488,291 | ||||
16
Table of Contents
Amount and Nature of | ||||||||||||||||
Beneficial Ownership(1) | Total Equity Stake(2) | |||||||||||||||
Name of Beneficial Owner | Number | Percent | Number | Percent | ||||||||||||
James J. McGonigle | 512,427 | 1.3 | % | 824,927 | 2.0 | % | ||||||||||
Russell P. Fradin | — | * | 36,000 | * | ||||||||||||
Robert C. Hall | 30,000 | * | 36,000 | * | ||||||||||||
Nancy J. Karch | 71,000 | * | 77,000 | * | ||||||||||||
David W. Kenny | 61,000 | * | 67,000 | * | ||||||||||||
Daniel O. Leemon | 82,240 | * | 88,240 | * | ||||||||||||
Thomas L. Monahan III | 169,066 | * | 410,316 | 1.0 | % | |||||||||||
Michael A. Archer | 38,750 | * | 230,000 | * | ||||||||||||
Derek C. M. van Bever | 18,280 | * | 89,530 | * | ||||||||||||
Timothy R. Yost | 36,687 | * | 179,186 | * | ||||||||||||
Morgan Stanley(3) | 3,210,716 | 8.0 | % | 3,210,716 | 7.7 | % | ||||||||||
All current directors and executive officers as a group (10 people) | 1,019,450 | 2.5 | % | 2,038,199 | 4.9 | % |
* | Indicates ownership of less than 1%. |
�� | |
(1) | Unless indicated in the notes, each stockholder has sole voting and investment power for all shares shown, subject to community property laws that may apply to create shared voting and investment power. Beneficial ownership includes all options held by a stockholder that are currently exercisable or exercisable within 60 days of June 21, 2005 (which would be August 20, 2005) as follows: Mr. McGonigle, 459,275 shares; Mr. Fradin, 0 shares; Mr. Hall, 30,000 shares; Ms. Karch, 70,000 shares; Mr. Kenny, 60,000 shares; Mr. Leemon, 82,240 shares; Mr. Monahan, 165,525 shares; Mr. Archer, 38,750 shares; Mr. van Bever, 3,225 shares; Mr. Yost, 31,251 shares; and all current directors and executive officers as a group, 940,266 shares. |
(2) | The Total Equity Stake column indicates the number of shares owned 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. |
(3) | Based solely upon on a Schedule 13G filed on February 14, 2005. This holder has sole voting power over 3,136,662 of these shares. The address of Morgan Stanley is 1585 Broadway, New York, NY 10036. |
17
Table of Contents
Officer | ||||||||||
Name of Officer | Age | Position | Since | |||||||
James J. McGonigle | 41 | Executive Chairman of the Board of Directors | 1998 | |||||||
Thomas L. Monahan III | 38 | Chief Executive Officer | 2001 | |||||||
Michael A. Archer | 42 | President, Marketing and International | 2002 | |||||||
Derek C. M. van Bever | 47 | Chief Research Officer | 1997 | |||||||
Timothy R. Yost | 34 | Chief Financial Officer | 2002 |
18
Table of Contents
Long-Term | |||||||||||||||||
Compensation | |||||||||||||||||
Annual Compensation | |||||||||||||||||
Securities | |||||||||||||||||
Name and Principal Position | Year | Salary | Bonus | Underlying Options | |||||||||||||
James J. McGonigle | 2004 | $ | 600,000 | $ | 550,000 | 150,000 | |||||||||||
Chief Executive Officer(1) | 2003 | 591,667 | 400,000 | 200,000 | |||||||||||||
2002 | 541,700 | 325,000 | 350,000 | (2) | |||||||||||||
Michael A. Archer | 2004 | $ | 395,834 | $ | 385,000 | 55,000 | |||||||||||
Chief Marketing Officer(3) | 2003 | 375,000 | 380,000 | 150,000 | |||||||||||||
2002 | 251,300 | 450,000 | (4) | 100,000 | |||||||||||||
Thomas L. Monahan III | 2004 | $ | 445,000 | $ | 250,000 | 65,000 | |||||||||||
General Manager, | 2003 | 416,671 | 200,000 | 50,000 | |||||||||||||
Corporate Practice(5) | 2002 | 400,000 | 80,000 | 70,000 | |||||||||||||
Derek C. M. van Bever | 2004 | $ | 430,000 | $ | 80,000 | 25,000 | |||||||||||
Chief Research Officer | 2003 | 426,667 | 108,000 | 50,000 | |||||||||||||
2002 | 410,000 | 102,000 | 70,000 | ||||||||||||||
Timothy R. Yost | 2004 | $ | 295,833 | $ | 150,000 | 65,000 | |||||||||||
Chief Financial Officer | 2003 | 267,500 | 120,000 | 50,000 | |||||||||||||
2002 | 191,700 | 64,000 | (6) | 65,000 |
(1) | Mr. McGonigle became our Executive Chairman of the Board of Directors effective July 1, 2005. |
(2) | Includes options to purchase 150,000 shares of our common stock granted to Mr. McGonigle for his election to Chairman of the Board of Directors. |
(3) | Mr. Archer became our President, Marketing and International effective July 1, 2005. |
(4) | Includes a signing bonus of $50,000 paid to Mr. Archer upon the commencement of his employment. |
(5) | Mr. Monahan became our Chief Executive Officer effective July 1, 2005. |
(6) | Mr. Yost became our Chief Financial Officer effective September 1, 2002. |
19
Table of Contents
Individual Grants(1) | ||||||||||||||||||||||||
% of Total | Potential Realizable Value | |||||||||||||||||||||||
Number of | Options | at Assumed Annual Rates | ||||||||||||||||||||||
Shares | Granted to | of Stock Price Appreciation | ||||||||||||||||||||||
Underlying | Employees | Exercise | for Option Term | |||||||||||||||||||||
Option | in | Price | ||||||||||||||||||||||
Name | Grants | Fiscal Year | (per share) | Expiration Date | 5% | 10% | ||||||||||||||||||
James J. McGonigle | 150,000 | 9.46 | % | $ | 45.10 | March 16, 2011 | $ | 2,754,034 | $ | 6,418,071 | ||||||||||||||
Michael A. Archer | 55,000 | 3.47 | 45.10 | March 16, 2011 | 1,009,813 | 2,353,293 | ||||||||||||||||||
Thomas L. Monahan III | 65,000 | 4.10 | 45.10 | March 16, 2011 | 1,193,415 | 2,781,164 | ||||||||||||||||||
Derek C. M. van Bever | 25,000 | 1.58 | 45.10 | March 16, 2011 | 459,006 | 1,069,680 | ||||||||||||||||||
Timothy R. Yost | 65,000 | 4.10 | 45.10 | March 16, 2011 | 1,193,415 | 2,781,164 |
(1) | Options granted under the 1999, 2001 and Directors’ Plans become exercisable 25% per year beginning one year after the date of grant. |
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Underlying Unexercised | In-the-Money Options | |||||||||||||||||||||||
Shares | Options at Fiscal Year-End | at Fiscal Year-End(1) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
James J. McGonigle | 232,796 | $ | 6,438,546 | 300,000 | 425,000 | $ | 10,364,500 | $ | 12,823,500 | |||||||||||||||
Michael A. Archer | 37,500 | 667,875 | 50,000 | 217,500 | 1,654,500 | 6,752,700 | ||||||||||||||||||
Thomas L. Monahan III | 37,610 | 1,087,681 | 103,750 | 156,250 | 3,663,175 | 4,601,025 | ||||||||||||||||||
Derek C. M. van Bever | 49,658 | 1,160,070 | 47,500 | 106,250 | 1,641,550 | 3,368,025 | ||||||||||||||||||
Timothy R. Yost | 34,500 | 805,040 | 37,750 | 138,750 | 1,363,875 | 4,065,100 |
(1) | Based on the closing price of our common stock on December 31, 2004 of $66.94 per share. |
20
Table of Contents
• | attract and retain highly talented executives; | |
• | link rewards to performance at various levels in the organization including company, program and individual performance; and | |
• | drive favorable returns and value for its shareholders. |
21
Table of Contents
22
Table of Contents
23
Table of Contents
The Corporate | The Lehman | |||||||||||||||
Executive Board | Goldman Sachs | Brothers Business | NASDAQ National | |||||||||||||
Company | Services Index | Services Index | Market (U.S.) Index | |||||||||||||
2/23/99 | 100 | 100 | 100 | 100 | ||||||||||||
12/31/99 | 234 | 128 | 156 | 172 | ||||||||||||
12/31/00 | 333 | 114 | 197 | 104 | ||||||||||||
12/31/01 | 307 | 121 | 229 | 82 | ||||||||||||
12/31/02 | 267 | 76 | 188 | 56 | ||||||||||||
12/31/03 | 391 | 94 | 265 | 84 | ||||||||||||
12/31/04 | 564 | 102 | * | 91 |
24
Table of Contents
25
Table of Contents
26
Table of Contents
1. | Purpose |
2. | Definitions |
(a) “Administrator” means the Administrator of the Plan in accordance with Section 18. | |
(b) “Award” means an Incentive Stock Option, Non-Qualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Deferred Stock Unit or Incentive Bonus granted to a Participant pursuant to the provisions of the Plan, any of which the Administrator may structure to qualify in whole or in part as a Performance Award. | |
(c) “Award Agreement” means a written agreement or other instrument as may be approved from time to time by the Administrator implementing the grant of each Award. An Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Administrator. | |
(d) “Board of Directors” or “Board” means the Board of Directors of the Company. | |
(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings and regulations issues thereunder. | |
(f) “Common Stock” means the Company’s common stock, par value $.01, subject to adjustment as provided in Section 12. | |
(g) “Company” means The Corporate Executive Board Company, a Delaware corporation. | |
(h) “Deferred Stock Unit” or “DSU” means an Award granted pursuant to Section 9 representing the unfunded and unsecured right to receive Common Stock or cash or a combination thereof, as determined by the Administrator, at the end of a specified deferral period. | |
(i) “Incentive Bonus” means a bonus opportunity awarded under Section 10 pursuant to which a Participant may become entitled to receive an amount based on satisfaction of such performance criteria as are specified in the Award Agreement. | |
(j) “Incentive Stock Option” or “ISO” means a stock option that is intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. | |
(k) “Nonemployee Director” means each person who is, or is elected to be, a member of the Board of Directors and who is not an employee of the Company or any Subsidiary. | |
(l) “Option” means an ISO and/or a NQSO granted pursuant to Section 6 of the Plan. | |
(m) “Participant” means any individual described in Section 3 to whom Awards have been granted from time to time by the Administrator and any authorized transferee of such individual. |
27
Table of Contents
(n) “Performance Award” means an Award, the grant, issuance, retention, vesting or settlement of which is subject to satisfaction of one or more Qualifying Performance Criteria established pursuant to Section 13. | |
(o) “Plan” means The Corporate Executive Board Company 2004 Stock Incentive Plan as set forth herein and as amended from time to time. | |
(p) “Prior Plans” mean The Corporate Executive Board Company 1999 Stock Option Plan, The Corporate Executive Board Company 2001 Stock Option Plan and The Corporate Executive Board Company 2002 Non-Executive Stock Incentive Plan. | |
(q) “Qualifying Performance Criteria” has the meaning set forth in Section 13(b). | |
(r) “Restricted Stock” means shares of Common Stock granted pursuant to Section 8 of the Plan. | |
(s) “Restricted Stock Unit” means an Award granted to a Participant pursuant to Section 8 pursuant to which shares of Common Stock may be issued in the future. | |
(t) “Retirement” has the meaning specified by the Administrator in the terms of an Award Agreement or, in the absence of any such term, shall mean, with respect to Participants other than Nonemployee Directors, retirement from active employment with the Company and its Subsidiaries (i) at or after age 55 and with the approval of the Administrator or (ii) at or after age 65. The determination of the Administrator as to an individual’s Retirement shall be conclusive on all parties. | |
(u) “Stock Appreciation Right” means a right granted pursuant to Section 7 of the Plan that entitles the Participant to receive, in cash or shares of Common Stock or a combination thereof, as determined by the Administrator, value equal to or otherwise based on the excess of (i) the market price of a specified number of shares of Common Stock at the time of exercise over (ii) the exercise price of the right, as established by the Administrator on the date of grant. | |
(v) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company where each of the corporations in the unbroken chain other than the last corporation owns stock possessing at least 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, and if specifically determined by the Administrator in the context other than with respect to Incentive Stock Options, may include an entity in which the Company has a significant ownership interest or that is directly or indirectly controlled by the Company. | |
(w) “Termination of employment” means ceasing to serve as a full-time employee of the Company and its Subsidiaries or, with respect to aNonemployee Director or service provider, ceasing to serve as such for the Company, except that (i) subject to Section 6(c), an approved leave of absence or approved employment on a less than full-time basis may constitute employment as determined by the Administrator, (ii) the Administrator may determine that a transition of employment to service with a partnership, joint venture or corporation not meeting the requirements of a Subsidiary in which the Company or a Subsidiary is a party is not considered a “termination of employment,” (iii) service as a member of the Board of Directors shall constitute continued employment with respect to Awards granted to a Participant while he or she served as an employeeand (iv) service as an employee of the Company or a Subsidiary shall constitute continued employment with respect to Awards granted to a Participant while he or she served as a member of the Board of Directors. The Administrator shall determine whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a termination of employment with the Company and its Subsidiaries for purposes of any affected Participant’s Options, and the Administrator’s decision shall be final and binding. | |
(x) “Total and Permanent Disablement” has the meaning specified by the Administrator in the terms of an Award Agreement or, in the absence of any such term or in the case of an Option intending to qualify as an ISO, the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. The determination of the Administrator as to an individual’s Total and Permanent Disablement shall be conclusive on all parties. |
28
Table of Contents
3. | Eligibility |
4. | Effective Date and Termination of Plan |
5. | Shares Subject to the Plan and to Awards |
29
Table of Contents
6. | Options |
(1) Death. Upon the death of a Participant while in the employ of the Company or any Subsidiaryor while serving as a member of the Board of Directors, all of the Participant’s Options then held shall be exercisable by his or her estate, heir or beneficiary at any time during the twelve (12) months next succeeding the date of death. Any and all of the deceased Participant’s Options that are not exercised during the twelve (12) months next succeeding the date of death shall terminate as of the end of such twelve (12) month period. | |
If a Participant should die within thirty (30) days of his or her termination of employment with the Company and its Subsidiaries, an Option shall be exercisable by his or her estate, heir or beneficiary at any time during the twelve (12) months succeeding the date of termination, but only to the extent of the |
30
Table of Contents
number of shares as to which such Option was exercisable as of the date of such termination. Any and all of the deceased Participant’s Options that are not exercised during the twelve (12) months succeeding the date of termination shall terminate as of the end of such twelve (12) month period. A Participant’s estate shall mean his or her legal representative or other person who so acquires the right to exercise the Option by bequest or inheritance or by reason of the death of the Participant. | |
(2) Total and Permanent Disablement. Upon termination of employment as a result of the Total and Permanent Disablement of any Participant, all of the Participant’s Options then held shall be exercisable for a period of twelve (12) months after termination. Any and all Options that are not exercised during the twelve (12) months succeeding the date of termination shall terminate as of the end of such twelve (12) month period. | |
(3) Retirement. Upon Retirement of a Participant, the Participant’s Options then held shall be exercisable for a period of twelve (12) months after Retirement. The number of shares with respect to which the Options shall be exercisable shall equal the total number of shares that were exercisable under the Participant’s Option on the date of his or her Retirement. Any and all Options that are unexercised during the twelve (12) months succeeding the date of termination shall terminate as of the end of such twelve (12) month period. | |
(4) Other Reasons. Upon the date of a termination of a Participant’s employment for any reason other than those stated above in Sections 6(e)(1), (e)(2) and (e)(3) or as described in Section 15, (A) any Option that is unexercisable as of such termination date shall remain unexercisable and shall terminate as of such date, and (B) any Option that is exercisable as of such termination date shall expire the earlier of (i) ninety (90) days following such date or (ii) the expiration date of such Option. |
7. | Stock Appreciation Rights |
31
Table of Contents
8. | Restricted Stock and Restricted Stock Units |
32
Table of Contents
9. | Deferred Stock Units |
10. | Incentive Bonuses |
33
Table of Contents
11. | Conditions and Restrictions Upon Securities Subject to Awards |
12. | Adjustment of and Changes in the Stock |
34
Table of Contents
13. | Qualifying Performance-Based Compensation |
14. | Transferability |
15. | Suspension or Termination of Awards |
35
Table of Contents
16. | Compliance with Laws and Regulations |
17. | Withholding |
18. | Administration of the Plan |
36
Table of Contents
19. | Amendment of the Plan or Awards |
37
Table of Contents
(a) increase the maximum number of shares for which Awards may be granted under this Plan; | |
(b) reduce the price at which Options may be granted below the price provided for in Section 6(a); | |
(c) reduce the exercise price of outstanding Options; | |
(d) extend the term of this Plan; | |
(e) change the class of persons eligible to be Participants; |
(f) | otherwise amend the Plan in any manner requiring stockholder approval by law or under the NASDAQ National Market listing requirements; or |
(g) increase the individual maximum limits in Sections 5(c) and (d). |
20. | No Liability of Company |
21. | Non-Exclusivity of Plan |
22. | Governing Law |
23. | Arbitration of Disputes |
38
Table of Contents
24. | No Right to Employment, Reelection or Continued Service |
39
Table of Contents
Table of Contents
THE CORPORATE EXECUTIVE BOARD COMPANY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
August 18, 2005
The undersigned hereby appoints Thomas L. Monahan III and James C. Edgemond, or either of them, each with full power of substitution, to represent the undersigned at the Annual Meeting of Stockholders of The Corporate Executive Board Company, which will be held at our offices at 2000 Pennsylvania Avenue, NW, Suite 6000, Washington, D.C., 20006, on August 18, 2005, at 9:00 a.m. local time, and at any adjournments or postponements thereof, and to vote the number of shares the undersigned would be entitled to vote if personally present at the meeting on the matters set forth on the reverse side of this proxy card.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL NOMINEES TO THE BOARD OF DIRECTORS AND FOR PROPOSALS NUMBER 2 AND NUMBER 3.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATE EXECUTIVE BOARD COMPANY. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR ELECTION AND FOR PROPOSALS NUMBER 2 AND NUMBER 3. IN THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF TO THE EXTENT AUTHORIZED BY RULE 14a-4(c) PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION AND BY APPLICABLE STATE LAWS (INCLUDING MATTERS THAT THE PROXY HOLDERS DO NOT KNOW, A REASONABLE TIME BEFORE THIS SOLICITATION, ARE TO BE PRESENTED).
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
Table of Contents
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
THE CORPORATE EXECUTIVE BOARD COMPANY
August 18, 2005
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
FOR | WITHHOLD | |||||||
All nominees listed | Authority | |||||||
(except as indicated | to vote for all | |||||||
to the contrary) | nominees listed | |||||||
1. | Election of | |||||||
Directors | [ ] | [ ] | ||||||
Nominees: | James J. McGonigle | |||||||
Russell P. Fradin | ||||||||
Robert C. Hall | ||||||||
Nancy J. Karch | ||||||||
David W. Kenny | ||||||||
Daniel O. Leemon | ||||||||
Thomas L. Monahan III |
(Instructions: To withhold authority to vote for any named nominee(s), strike a line through the nominee’s name in the list above.)
FOR | AGAINST | ABSTAIN | ||||||
2. | Adoption of Amendments to the 2004 Stock Incentive Plan | [ ] | [ ] | [ ] | ||||
3. | Ratification of the Appointment of Ernst & Young LLP as Independent Registered Accountant for the Year Ending December 31, 2005. | [ ] | [ ] | [ ] |
Whether or not you plan to attend the meeting in person, you are urged to complete, date, sign and promptly mail this proxy card in the enclosed return envelope so that your shares may be represented at the meeting.
Signature _______________________________________________ | Dated: ___________________, 2005. | |||||
Signature (if held jointly) ____________________________________ | Dated: ___________________, 2005. |
NOTE: Please sign exactly as your name(s) appear(s) on your stock certificate. If shares of stock stand of record in the names of two or more persons or in the name of husband and wife, whether as joint tenants or otherwise, both or all of such persons should sign the proxy card. If shares of stock are held of record by a corporation, the proxy card should be executed by the president or vice president and the secretary or assistant secretary. Executors, administrators or other fiduciaries who execute the above proxy card for a stockholder should give their full title. Please date the proxy card.