Non-Competition Agreement - The Corporate Executive Board Co., The Advisory Board Co. and David G. Bradley
NON-COMPETITION AGREEMENT
This Agreement is entered into effective January 1, 1999, by and among The
Corporate Executive Board Company, a Delaware corporation, including its
subsidiaries, successors and assigns (collectively, "CEB"), The Advisory Board
Company, a Maryland corporation, including its subsidiaries, successors and
assigns (collectively, "ABC") and David G. Bradley, including his successors,
assigns and any entity controlled by him (collectively, "Bradley").
Whereas, CEB, ABC and Bradley desire to enter into an agreement to place
certain limitations on competition between CEB, on the one hand, and, on the
other hand, ABC and Bradley (ABC and Bradley together are referred to herein as
the "Bradley Parties").
Now, Therefore, in consideration of the premises and covenants contained
herein and intending to be legally bound hereby, CEB, ABC and Bradley agree as
follows:
1. Definitions.
(a) "Covered Services" shall mean membership based subscription services
substantially similar to the services provided by ABC and CEB as of
the date of this agreement, in which members receive a bundle of
services incorporating a meaningful combination of the following:
multi-client syndicated studies, meetings focused on discussions of
syndicated studies, short answer custom research, and on site
seminars.
(b) "Health Care Provider Company" shall mean any company or institution,
or any division or subsidiary of any company or institution, that is
principally engaged in the health care provider business, which shall
include providers of patient care (such as hospitals, outpatient
facilities, home health agencies and relevant government agencies) and
providers of medical professional services (such as physician and
nursing services and physician practice management companies).
(c) "Other Health Care Company" shall mean any company or institution, or
any division or subsidiary of any company or institution, that is not
a Health Care Provider Company and which is principally engaged in
other types of health care business, including: pharmaceuticals
companies; medical supply companies; medical equipment companies;
technology, software, communications, financing and services vendors
selling predominantly to Health Care Provider Companies; companies
providing health insurance; and managed care companies.
(d) "Non-Health Care Company" shall mean any company or institution, or
any division or subsidiary of any company or institution, that is not
a Health Care Provider Company or an Other Health Care Company.
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2. Non-Competition.
(a) The Bradley Parties. The Bradley Parties shall not offer or sell
Covered Services to any Non-Health Care Companies. Notwithstanding
the forgoing, the Bradley Parties may:
(i) sell products and services to any company or institution, or any
division or subsidiary of any company or institution, that is a
Health Care Provider Company;
(ii) sell products and services to divisions and subsidiaries of
companies other than Health Care Provider Companies, if such
divisions or subsidiaries themselves are Health Care Provider
Companies; and
(iii) continue to renew pre-existing subscriptions with respect to
those products and services that it has sold as of the closing
date of the initial public offering of shares of Common Stock of
CEB (the "Offering Date") to any then existing client, if such
client was a subscriber to such products or services immediately
prior to such subscription renewal and such products and
services specifically address health care provider industry
issues; and
(iv) offer and sell to any entity:
(A) magazines, newspapers and news services;
(B) advertising for its publications, news or on-line services;
and
(C) products and services that are specifically addressed to
and deal with advertising and promotion activities by
companies and institutions and advertising agencies,
provided that such products and services are offered only
to the offices and divisions of companies, institutions or
advertising agencies that are responsible for the placement
or designing of advertisements;
(D) products and services that are specifically addressed to
and deal with government relations and lobbying activities
by companies and institutions, provided that such products
and services are offered only to the offices and divisions
of companies or institutions that are responsible for
government relations and lobbying.
(b) CEB. CEB shall not offer or sell Covered Services to Health Care
Provider Companies. Notwithstanding the forgoing, CEB may:
(i) sell its products and services to Non-Health Care Companies;
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(ii) sell its products and services to divisions and subsidiaries of
companies other than Non-Health Care Companies, if such
divisions or subsidiaries are themselves Non-Health Care
Companies; and
(iii) continue to renew pre-existing subscriptions with respect to
those products and services that it has sold as of the Offering
Date to any then existing client, if such client was a
subscriber to such products or services immediately prior to
such subscription renewal and such products and services do not
specifically address health care provider industry issues.
(c) Provision of Services to Other Health Care Companies. Notwithstanding
the forgoing:
(i) the Bradley Parties may sell Covered Services to Other Health
Care Companies provided that Bradley Parties do not offer
programs targeted to the same executives and covering the same
subjects as that of CEB's Human Resources, Chief Financial
Officer or General Counsel programs; and also provided that all
research agendas, brochures and any other sales and marketing
materials associated with such services make explicit the health
care industry focus of such services.
(ii) CEB may sell Covered Services to Other Health Care Companies,
only if such services are of a general business nature and are
also sold by CEB principally to Non-Health Care Companies.
3. Employees.
(a) Except as provided in Section 3(c) of this Agreement, the Bradley
Parties shall not recruit or employ any person who is at the time of
such recruitment an employee of CEB, or who was employed by CEB at any
time during the 24-month period preceding the date of such recruitment
or employment, unless CEB's chief executive officer consents to such
recruitment and employment.
(b) CEB shall not recruit or employ any person who is at the time of such
recruitment an employee of ABC or Bradley, or who was employed by ABC
or Bradley at any time during the 24-month period preceding the date
of such recruitment or employment, unless ABC's chief executive
officer or Bradley, as the case may be, consents to such recruitment
and employment.
(c) Bradley or ABC may hire Derek C. van Bever, the Chief Research Officer
of CEB, at any time after January 1, 2002.
(d) Each of CEB and ABC shall incorporate in each of the noncompetition
agreements that it has entered into, or will enter into, with its
current or future employees provisions (the "Noncompetition
Provision") that would prohibit such employee from competing with CEB
or ABC, as the case may be, to the same extent and under the same
terms and conditions that similar level employees
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generally are prohibited from competing with the company employing
such employee, and that would impose similar restrictions on the use
of confidential information. Neither CEB nor ABC shall waive any
rights under, or agree to any settlements in connection with the
enforcement of, the Noncompetition Provision contained in any
noncompetition agreement without the prior written consent of the
other company, but only to the extent that such waiver or such
settlement relates to the rights of such other company. Each of CEB
and ABC shall use its best efforts to enforce the Noncompetition
Provision promptly upon being notified or becoming aware of a breach
of such provision by any of its current or previous employees who are
subject to the Noncompetition Provision; provided, however, that the
company for whose benefit the Noncompetition Provision is being
enforced shall pay all reasonable costs and expenses incurred in
connection with such enforcement. In addition, each company may assert
directly its own rights under the Noncompetition Provision with
respect to current or previous employees of the other company to the
maximum extent permitted by law.
4. Name License.
(a) ABC continues to own all rights, title, interest and any other
intellectual property or proprietary right in the name "The Advisory
Board Company" and all derivations thereof, including but not limited
to, "The Corporate Advisory Board Company" and CEB has no right or
interest therein, except for the license granted in Section 4(b)
below.
(b) ABC hereby grants an exclusive, non-transferable, royalty-free, paid-
up license to CEB to use the derivative name "The Corporate Advisory
Board Company" for a period of two years from the date of this
Agreement only for Transitional Purposes, provided that, the name "The
Corporate Advisory Board Company" may be used for recruiting of
prospective employees only if CEB receives prior written approval from
ABC. "Transitional Purposes" shall mean for purposes of this Section,
use of the name to inform the general public that The Corporate
Advisory Board Company has changed its name to The Corporate Executive
Board Company. Upon the expiration of the two year period, all
rights, title and interest in the name "The Corporate Advisory Board
Company" will revert back to ABC.
(c) ABC shall not use the name "The Corporate Advisory Board Company" or
any other derivation of its name with the word "Corporate" during the
term of this agreement.
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5. Term.
The term of this Agreement will commence on the date first written in the
preamble above and will end on the date that is five years from such date.
6. Further Assurances.
CEB, ABC and Bradley agree that at any time and from time to time, upon
written request, they will execute and deliver such further documents and do
such further acts and things as may be reasonably requested in order to
effectuate the purposes of this Agreement and the transactions contemplated
hereby.
7. Governing Law.
This Agreement will be governed by and construed in accordance with the
internal laws of the State of Delaware (excluding its choice of law rules).
8. Arbitration.
The parties shall endeavor to settle all disputes by amicable negotiations.
Any claim, dispute, disagreement or controversy that arises among the parties
("Disputed Matter") relating to this Agreement that is not amicably settled
shall be referred to and settled by arbitration administered by the American
Arbitration Association in accordance with the Expedited Procedures of the
Commercial Arbitration Rules of the American Arbitration Association (the "AAA
Rules") by a single arbitrator who is mutually agreeable to the parties. If the
parties are unable to agree upon an arbitrator, one arbitrator shall be selected
in accordance with the AAA Rules. All proceedings in any such arbitration shall
be conducted in Washington, D.C. Each party to such arbitration proceeding
shall bear its respective costs, fees and expenses in connection with such
arbitration. Upon a final determination by the arbitrator with respect to the
Disputed Matter, the arbitrator shall notify the parties (such notice being the
"Arbitration Order"). Any judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. Jurisdiction of such
arbitrator shall be exclusive as to disputes among the parties relating to this
Agreement and each of the parties agrees that this Agreement to arbitrate shall
be specifically enforceable under the laws of the respective domiciliary
jurisdictions of the parties. None of the parties shall have the right to
appeal the Arbitration Order or otherwise to submit a dispute relating to this
Agreement to a court of law.
9. Counterparts.
This Agreement may be executed in counterparts, each of which will
constitute an original and all of which will be one and the same document.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first written above.
THE CORPORATE EXECUTIVE BOARD COMPANY
/s/ James J. McGonigle
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By: James J. McGonigle
Its: Chief Executive Officer
THE ADVISORY BOARD COMPANY
/s/ Jeffrey D. Zients
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By: Jeffrey D. Zients
Its: Chief Executive Officer
/s/ David G. Bradley
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David G. Bradley
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