Stock-Based Incentive Compensation Plan - The Corporate Executive Board Co.
THE CORPORATE EXECUTIVE BOARD COMPANY
STOCK-BASED INCENTIVE COMPENSATION PLAN
1. ESTABLISHMENT AND PURPOSE OF THE PLAN. The Stock-Based Incentive
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Compensation Plan (the "Original Plan") was established by The Corporate
Executive Board Company, a Delaware corporation (the "Company"), as of October
31, 1997, to provide certain employees of the Company with an increased economic
and proprietary interest in the Company in order to encourage those employees'
contributions to the success and progress of the Company. This Stock-Based
Incentive Compensation Plan (the "Plan") was amended and restated in its
entirety on _______, 1998. The Plan is designed to provide for the grant of
options ("Options") that will not qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended.
2. STOCK SUBJECT TO THE PLAN. The maximum number of shares of stock that
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may be subject to Options granted hereunder shall not exceed [400,000] shares of
the capital stock, one cent ($0.01) par value (the "Stock"), of the Company,
subject to adjustment under Section 10 hereof. The Stock that may be subject to
Options granted may be authorized and unissued Stock or Stock reacquired by the
Company and held as treasury stock. Except as provided in Section 13 hereof, if
any Option granted under the Plan is canceled without the Optionee having
received any benefit of ownership, the number of shares subject to such Option
that have not been exercised prior to the Option's cancellation may not again be
optioned hereunder.
3. ELIGIBILITY. Persons who shall be eligible for grants of Options
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hereunder ("Eligible Employees") shall be those employees of the Company who are
members of a select group of management or other key employees that the
Committee may from time to time designate to participate under the Plan (
"Optionees") through grants of Options.
4. OPTIONEE'S AGREEMENT. The terms upon which Options are granted shall
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be evidenced by a written agreement executed by the Company and the Optionee to
whom Options are granted (the "Optionee's Agreement"). The Options shall be
subject to the terms and restrictions contained in the Optionee's Agreement.
5. STOCKHOLDERS' AGREEMENT. Prior to a public offering, Stock issued
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pursuant to Options shall also be subject to the terms and restrictions
contained in a Stockholders' Agreement related to the Company. The
Stockholders' Agreement may contain such terms, provisions, and conditions as
may be determined by the Committee as long as such terms, conditions and
provisions are not inconsistent with the Plan. A copy of the Stockholders
Agreement shall be delivered to the Optionee at the time of grant.
6. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
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compensation committee of the Board of Directors of the Company (the "Board") or
by the Board itself (if no Committee exists) (any such plan administrator, the
"Committee").
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All actions of the Committee shall be authorized by a majority vote thereof
at a duly called meeting or by unanimous written consent. The Committee shall
have the sole authority, in its absolute discretion, to adopt, amend, and
rescind such rules and regulations as, in its opinion, may be advisable in the
administration of the Plan, in construing and interpreting the Plan, the rules
and regulations, and the agreements and other instruments evidencing Options
granted under the Plan, and in making all other determinations deemed necessary
or advisable for the administration of the Plan. All decisions, determinations,
and interpretations of the Committee shall be final and conclusive upon the
Eligible Employees. Notwithstanding the foregoing, any dispute arising under
any Optionee's Agreement shall be resolved pursuant to the dispute resolution
mechanism set forth in such Agreement.
Subject to the express provisions of the Plan, the Committee shall
determine the number of shares of Stock subject to grants or issuances and the
terms thereof, including but not limited to the provisions relating to the
exercisability of Options, vesting of Options and the termination and/or
forfeiture of Options under the Plan.
7. TERMS AND CONDITIONS OF OPTIONS. No Option shall be granted for a term
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beyond May 1, 2009. The Committee shall have full and sole discretion to
determine the exercisability of the Options under the Plan. The Optionee's
Agreement may contain such other terms, provisions, and conditions as may be
determined by the Committee (including, but not limited to, exercise price,
exercisability, expiration date and vesting) as long as such terms, conditions
and provisions are not inconsistent with the Plan.
8. EXERCISE PRICE OF OPTIONS. The exercise price for each Option granted
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hereunder shall be set forth in the applicable Optionee's Agreement. Payment
for Stock purchased upon exercise of any Option granted hereunder shall be in
cash at the time of exercise. At its sole discretion on an individual basis,
the Committee may permit payment or agree to permit payment by such other
alternative means as may be lawful, including (but not limited to) the
acceptance of a promissory note secured by the number of shares of Stock then
issuable upon the exercise of the Option.
9. NON-TRANSFERABILITY. Unless provided otherwise in the Optionee's
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Agreement, any Option granted under this Plan shall, by its terms, be
nontransferable by the Optionee other than by will or the laws of descent and
distribution (in which case such descendant or beneficiary shall be subject to
all terms of the Plan applicable to Optionees), and is exercisable during the
Optionee's lifetime only by the Optionee.
10. ADJUSTMENTS. If at any time the Stock subject to this Plan is changed
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into, or outstanding Stock is exchanged for, a different number or kind of
shares or securities, as the result of any one or more reorganizations,
recapitalizations, stock splits, reverse stock splits, stock dividends or
similar events, an appropriate adjustment shall be made in the number, exercise
or sale price and/or type of shares or securities for which Options may
thereafter be granted under the Plan unless waived in writing by the Optionee.
The Committee also shall designate the appropriate changes that shall be made in
Options under the Plan, and the Committee may do so either at the time the
Option is granted or at the time of the event causing
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the adjustment. Any such adjustment in outstanding Options shall be made
without changing the aggregate exercise price applicable to the unexercised
portions of such Options.
11. AMENDMENT AND TERMINATION OF THE PLAN. Unless earlier terminated by
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the Board of Directors of the Company, the Plan shall terminate on May 1, 2009.
The Committee may amend the Plan or any agreement issued hereunder to the
extent necessary for any Option granted under the Plan to comply with applicable
tax or securities laws.
No Option may be granted during any suspension or after the termination of
the Plan. No amendment, suspension or termination of the Plan or of any
Optionee's Agreement issued hereunder shall, without the consent of the affected
holder of such Option alter or impair any rights or obligations in any Option
theretofore granted or issued to such holder under the Plan.
12. NATURE OF PLAN. This Plan is intended to qualify as a compensatory
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benefit plan within the meaning of Rule 701 under the Securities Act of 1933.
This Plan is intended to constitute an unfunded arrangement for a select group
of management or other key employees.
13. CANCELLATION OF OPTIONS. Any Option granted under the Plan may be
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canceled at any time with the consent of the holder and a new Option may be
granted to such holder in lieu thereof.
14. WITHHOLDING TAXES. The Committee may in its discretion require the
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Optionee to remit to the Company, prior to the delivery of any certificate or
certificates for such Stock or the payment of any such amounts, all or any part
of the amount determined in the Committee's discretion to be sufficient to
satisfy federal, state and local withholding tax obligations (the "Withholding
Obligation") that the Company or its counsel determines may arise with respect
to such exercise, issuance or payment. At the sole discretion of the Committee
on an individual basis, the Optionee may (i) request the Company to withhold
delivery of a sufficient number of shares of Stock or a sufficient amount of the
Optionee's compensation or (ii) deliver a sufficient number of previously-issued
shares of Stock, to satisfy the Withholding Obligation.
15. RIGHT OF REDEMPTION. The Committee, in its sole discretion and on an
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individual basis, may provide within any agreement issued hereunder the right of
the Company to redeem the Options and/or the shares of Stock issued under the
Plan (the "Right of Redemption"). The Right of Redemption shall be subject to
such terms, provisions, and conditions as may be determined by the Committee as
long as such terms, conditions and provisions are not inconsistent with the
Plan.
16. RIGHT OF SALE. The Committee, in its sole discretion and on an
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individual basis, may provide within any agreement issued hereunder the right of
the Optionee to sell his or her Options and/or shares of Stock issued under the
Plan to the Company (the "Right of Sale"). The Right of Sale shall be subject
to such terms, provisions, and conditions as may be determined by the Committee
as long as such terms, conditions and provisions are not inconsistent with the
Plan.
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