10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2009

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 000-24799

THE CORPORATE EXECUTIVE BOARD COMPANY

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	52-2056410 (I.R.S. Employer Identification Number)
1919 North Lynn Street Arlington, Virginia (Address of principal executive offices)	22209 (Zip Code)

(571) 303-3000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $0.01 per share	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: Not applicable

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated Filer þ	Accelerated filer o	Non-accelerated filer o	Smaller Reporting Company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

Based upon the closing price of the registrant’s common stock as of June 30, 2009, the aggregate market value of the common stock held by non-affiliates of the registrant was $708,514,947*.

There were 34,147,008 shares of the registrant’s common stock outstanding at February 25, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents incorporated by reference and the Part of the Form 10-K into which the document is incorporated:

Portions of the registrant’s Proxy Statement relating to its 2010 Annual Stockholders’ Meeting to be filed pursuant to Regulation 14A within 120 days after year-end are incorporated by reference into Part III of this Report.

* Solely for purposes of this calculation, all executive officers and directors of the registrant and all shareholders reporting beneficial ownership of more than 5% of the registrant’s common stock are considered to be affiliates.

THE CORPORATE EXECUTIVE BOARD COMPANY
TABLE OF CONTENTS

	Page
PART I
Item 1. Business		3
Item 1A. Risk Factors		8
Item 1B. Unresolved Staff Comments		13
Item 2. Properties		13
Item 3. Legal Proceedings		14
Item 4. Submission of Matters to a Vote of Security Holders		14
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		14
Item 6. Selected Financial Data		15
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		28
Item 8. Financial Statements and Supplementary Data		29
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		54
Item 9A. Controls and Procedures		54
Item 9B. Other Information		54
PART III
Item 10. Directors, Executive Officers and Corporate Governance		54
Item 11. Executive Compensation		55
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		55
Item 13. Certain Relationships and Related Transactions, and Director Independence		55
Item 14. Principal Accounting Fees and Services		55
PART IV
Item 15. Exhibits and Financial Statement Schedules		56
Signatures		61
Exhibit Index
Exhibit 10.20
Exhibit 10.21
Exhibit 10.22
Exhibit 10.23
Exhibit 10.24
Exhibit 10.25
Exhibit 21.1
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

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Forward-looking Statements

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7, contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”) that involve risks, uncertainties and assumptions. If the risks or uncertainties materialize or the assumptions prove incorrect, the results of The Corporate Executive Board Company and its consolidated subsidiaries (“CEB”) may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenues, margins, expenses, provision for income taxes, earnings, cash flows, share repurchases, acquisition synergies, foreign currency exchange rates or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the execution of cost reduction programs and restructuring plans; any statements concerning expected development, performance or market share relating to products or services; any statements regarding future economic conditions or performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing.

Factors that could cause actual results to differ materially from those indicated by forward-looking statements include, among others, our dependence on renewals of our membership-based services, the sale of additional programs to existing members and our ability to attract new members, our potential failure to adapt to member needs and demands, our potential inability to attract and retain a significant number of highly skilled employees, risks associated with the results of restructuring plans, fluctuations in operating results, our potential inability to protect our intellectual property, our potential exposure to loss of revenues resulting from our unconditional service guarantee, exposure to litigation related to our content, various factors that could affect our estimated income tax rate or our ability to utilize our deferred tax assets, changes in estimates or assumptions used to prepare our consolidated financial statements, our potential inability to make, integrate and maintain acquisitions and investments, and the amount and timing of the benefits expected from acquisitions and investments, our potential inability to effectively anticipate, plan for and respond to changing economic and financial markets conditions, especially in light of ongoing uncertainty in the worldwide economy and possible volatility of our stock price. These and other factors are discussed more fully in “Risk Factors” in Item 1A of this report. We assume no obligation and do not intend to update these forward-looking statements.

Item 1. Business.

Our Company

The Corporate Executive Board Company enables superior business outcomes by delivering authoritative data, tools, best practices research, and peer insights to the leaders of the world’s great enterprises. We primarily deliver these products and services to a global client base through annual, fixed-fee membership subscriptions. At December 31, 2009, our member network included executives and professionals from more than 50 countries and 4,800 institutions, including approximately 90% of the Fortune 100 and 85% of the Fortune 500.

Our member network is essential to our business. Close relationships with our members enable us to deliver superior business insights, solutions, and analytics that support executives and professionals during their careers. Over time, our data sets expand, thereby strengthening the power of our products and services and the member network.

Our Products and Services

We provide business leaders with business insights, data, and tools to enable their most important decisions and provide solutions to their biggest problems. To fully support these leaders, our products and services focus on five corporate functions. These corporate functions, which we consider our end markets, are:

• Finance, Strategy, and Operations;

• Human Resources;

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• Information Technology;

• Legal and Compliance; and

• Sales, Marketing, and Communications

We serve business leaders in these corporate functions across a wide range of industries. In addition to these corporate functions, we also serve operational business leaders in the financial services industry and government agencies through insights, tools, and peer collaboration designed to advance executive decision making. Our products and services enable business leaders to address critical issues such as cost savings, risk management, employee engagement, communications, and corporate governance. We are continuing to expand our product and service offerings, through dedicated sales and marketing staff, to government agencies and additional markets in the Asia-Pacific region and Europe.

Below is a summary of the products and services we provide to members:

• Best Practices Research and Solutions. We analyze and document corporate best practices for significant and pressing issues that members confront. Through our proprietary research, we identify key economic leverage points and isolate high return-on-investment solutions for members to implement. We deliver this research through various channels, including web-based resources, interactive workshops, live meetings, and published studies.

• Active Executive Network. We connect members to networks of peer executives and professionals across industries and geographies. These networks operate through in-person meetings and web- and email-based platforms. In 2009, these networks supported approximately 1,000 virtual events for more than 67,000 participants and 500 live meetings for more than 9,500 attendees worldwide.

• Proprietary Data Assets and Analytic Tools. We provide members with tools and analysis that enable decision-making and improve performance. For example, our “World Class Performance” diagnostic tool allows a member executive to understand how other executives assess the performance of their own department. In 2009, we created more than 100 analytical tools and more than 400 benchmarking data sets that helped business leaders save time and deliver improved results in their daily workflows.

• Decision Support on Urgent Issues. We deliver decision support and advice to members on time-sensitive issues. For example, in the fourth quarter of 2009, we conducted four global teleconferences that addressed six enemies of post-recession performance in conjunction with our second annual Executive Guidance publication. More than 2,000 global executives and professionals participated in these teleconferences.

• Advisory Support. We deliver a proprietary on site executive education curriculum to executives and their teams, supported through e-learning resources. In certain corporate functions, such as HR, Finance, IT, and Legal, the curriculum is accredited to meet professional continuing education requirements. In 2009, to provide a deeper and more robust layer of support to business leaders, we invested in additional executive advisor capacity to advise members on pressing business concerns.

Our Business Strategy

Our strategy is to enable business leaders to achieve performance excellence in their roles. In 2009, we focused on positioning business leaders to excel during unprecedented economic uncertainty and operational demands. In 2010, as the global economy recovers, we will focus on continuing to drive retention and cross sales by improving the member experience. We intend to implement this strategy through the following efforts:

1. High Value Personal Engagement to Drive Large Company Member Loyalty. We are deepening our relationships with executives and professionals who need solutions to challenging business issues, especially during unusual market conditions. We have restructured our North America sales and service model to establish integrated account teams focusing on serving our large company members. We also added executive advisor capacity to deliver more direct member impact. We believe these service-oriented enhancements will further develop relationships with executives and professionals, particularly at our large company members, and increase the value of the member network. In 2010, while we continue to move toward full productivity in North America, we will begin the roll out of the new sales and service model in Europe.

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2. Global Investment in Our Strongest Brands. In 2009, we restructured our product portfolio to focus on our strongest brands. As part of this effort, we reduced our product portfolio by approximately 20%. We then redirected our resources toward strengthening the remaining products and selling those with the greatest member impact and long-term value. Through this resource allocation, we expanded our product offerings for government agencies, we continued our investment in the middle market platform by expanding sales and service capacities, and we established a foundation for expansion in Asia by growing our Australia-based operations. In 2010, we will continue to invest globally in our strongest brands with targeted investments and selective marketing efforts.

3. Improve Member Experience Through Enhanced Technology and Analytics Platforms. Our experience tells us that the quality and number of member interactions correlates strongly with renewals and cross sales. Accordingly, we continue to invest in technology, including Web enhancements, to more effectively match our key analytical tools to our members’ pressing issues and routine workflow. In 2009, we implemented a new customer relationship management information system, consolidated our employee analytics business onto an improved platform, upgraded the Toolbox.com platform, and enhanced our news and data feed platforms. These improvements have increased per institution user penetration and downloads over the prior year. In 2010, we intend to further enhance our technology assets to provide a more personalized, interactive, and productive member experience.

4. Elevate Member Performance Through Product Innovation. We are launching renewable and scalable products and services to support executive and business leader needs and further enhance the support we provide to members. Execution of our business strategy also may include the acquisition of companies that bring us capabilities and intellectual property assets that target additional member needs and have the potential to extend our existing core end markets and product offerings. In 2009, we launched two new offerings, SEC Solutions and Government Finance Roundtable, and we acquired The Tower Group, Inc. (“Tower Group”). We used our data assets to identify, evaluate, and communicate emerging insights and solutions to over 200,000 business leaders through more than 40 programs. In 2010, we plan to increase new product launch activity to leverage existing relationships, extend current and develop new best-in-class data and analytics, and target high dollar problems and recurring roles and work.

Our acquisition of Tower Group expands our offerings of products targeted at the financial services industry. Tower Group is a research and advisory firm serving the top financial services companies, professional services firms, and technology providers on the marketing, technology, strategy, and product management issues that impact the financial services industry. See Note 4 to our consolidated financial statements for additional information regarding acquisitions.

In 2008, we purchased Warrillow & Co., (now operating as the Enterprise Council on Small Business), a research and advisory firm serving marketing and sales executives responsible for targeting the small and medium-sized business markets; and Genesee Survey Services, Inc. (now operating as CLC Genesee), an employee survey and analytics firm that designs surveys, collects data, and provides reports on employee engagement to managers in a timely and accurate manner. We believe these acquisitions deepen the advice, support, and analysis we provide to executives and professionals in the Sales and Marketing and HR corporate functions, respectively.

In 2007, we purchased Information Technology Toolbox, Inc. (now operating as Toolbox.com), an on-line professional networking community of IT professionals. The Toolbox.com community, which now includes human resources and finance professionals and operates on an updated platform, enables registered users to share knowledge with a worldwide network of experienced professionals. In 2009, the Toolbox.com community increased by more than 20%, to approximately 1.7 million users.

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Our Pricing

We believe that we offer a lower-priced alternative to traditional professional, information, and advisory services. For the majority of our products and services, membership is for one year, typically payable at the beginning of the contract term. The average subscription price was $28,552 at December 31, 2009, a decline from $30,714 at December 31, 2008. The decline in the average subscription price largely reflects continued growth in our middle market platform, which we sell to members at a lower price point. The average subscription price for our large company members decreased by less than 1% from 2008 to 2009. Actual subscription price varies by program and may be further adjusted based on a member’s revenue or headcount. We offer discounted pricing schedules and modified terms for members that purchase a large number of memberships. In 2009, no single member accounted for more than 0.5% of consolidated revenues.

Certain products and services offer a service guarantee, which allows members to request a refund of the fee in the event that they terminate their membership prior to the completion of their membership term. Under the service guarantee, refunds are provided on a pro-rata basis relative to the remaining membership term. In 2009, members requested refunds for 216 memberships out of almost 13,800 sold or renewed, or 1.6% of all memberships, compared to a 2.3% refund rate in 2008. We believe that the decline in the rate of refund reflects the value that we provide to members through our products and services, as well as the movement toward a more stable economic outlook.

Certain of our products, such as Performance Analytics, Leadership Academies, and Toolbox.com, have pricing models that can be different from our core products and services:

• Performance Analytics delivers data and analytics to support improved performance of executives and their teams. Some elements of the product set are available on a customized fee basis.

• Leadership Academies provide access, for an annual per participant fee, to training and development services that include skills diagnostic reports, learning portal access, classroom-based development sessions, webinars, and virtual office hours with faculty.

• Toolbox.com provides knowledge on information technology, human resources, and finance topics free of charge to users. Toolbox.com revenues principally are generated through advertisements and lead generation campaigns posted to the online community portals.

Our Competition

Our industry is highly competitive. We believe that our differentiators include the quality and size of the member network, quality of research and analysis, effectiveness of advice, price, breadth of data assets, accessibility of data assets, and service levels. We believe that we provide members with significant value at a lower cost than either an internal research effort or an external consulting contract.

We compete with firms that offer customized information and professional service products, such as traditional consulting firms, benchmarking firms, research and data analytics firms, and training and development firms. These companies offer a variety of products and services, including market research, performance data, analysis, implementation services, networking opportunities, and educational programs. We believe these competitors, in general, charge more for their products and services than we do. We also compete against entities such as trade associations, nonprofit organizations, and research and database companies. We believe that these competitors offer less detailed and lower-priced research and fewer networking opportunities and educational services. Our direct competitors generally compete with us in a single decision support center, a single corporate function (e.g., information technology), and/or in a specific industry.

The Advisory Board Company serves the health-care industry and educational institutions with products and services that are similar to what we provide on a cross-industry basis. In February 2010, we extended a collaboration agreement with The Advisory Board Company, entered into in 2007, to enhance services to members and explore new product development opportunities. To advance these efforts, which require the companies to share proprietary information, the agreement includes a limited non-competition provision.

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Our Employees

We employ individuals from top undergraduate and graduate programs, as well as experienced talent from outside our Company, who often have functional, industry, academic, or consulting expertise. Our success depends on our ability to attract, develop, engage, and retain outstanding talent, including in the sales, service, and marketing functions. We believe that we offer compelling career paths, opportunities for professional development, and competitive compensation. We compete for employees with numerous information and professional services providers, many of which are significantly larger than we are and, we believe, have greater resources than we do.

At December 31, 2009, we employed 1,742 staff members, a reduction of 28% versus December 31, 2008. Of this employee base, 1,301 were located in the United States and Canada (primarily in Arlington, Virginia), 226 were located in England, 177 were located in India, and 38 were located in Australia. Our staff reductions in 2009 were the result of workforce reductions and a voluntary separation plan to reduce our cost structure, restructuring of the sales and service function to align with our new commercial model, and unfilled positions. We intend to selectively add to the staff and skill base in 2010 while continuing to manage costs. None of our employees are represented by a collective bargaining arrangement.

We believe that our relations with our employees remain favorable, despite the reductions in our staff. In 2009, we enhanced our communications, performance management, recruiting, and on-boarding protocols in an effort to retain talent with the capabilities required to perform effectively in light of increasing geographic, market, role, and product diversity.

Our Sales & Marketing Efforts

We sell products and services in more than 50 countries. We generally sell our products and services as a package, which enables business leaders to obtain the greatest value from our products and services, as well as from our global member network. Generally, and including in 2009, we experience higher bookings in the first and fourth quarters of each year due to the size of the renewal pool and corporate budgeting cycles.

In 2009, we continued the implementation of a relationship-driven account management structure. The new commercial model simplifies the member interface, improves sales team understanding of member needs, enhances our sales roles, and facilitates focus on our large company members. We believe this model, which aligns with member preferences and will be supported by continued investments in our technology platforms, has and will continue to improve member loyalty, existing account growth, new account acquisitions, and sales team efficiency. In light of improving sales performance towards the end of 2009, which we believe reflects, in part, the impact of this model, we plan to implement the model in the United Kingdom and elsewhere in Europe in 2010.

In 2009, we focused efforts on increasing awareness of the CEB brand and the value that our products and services deliver through traditional electronic, print, and social media. In 2010, we intend to increase our presence as a thought leader by sharing advice and insights through traditional media as well as extending our Web presence through social media outlets. We maintain and actively defend our portfolio of trademarks, including for Toolbox.com, and rely on nondisclosure and confidentiality arrangements with employees, members, and third-parties, as well as copyright, trademark, trade secret, and other laws, to protect our proprietary rights in our products, services, and other proprietary information.

Financial Information on Geographic Areas

For information regarding revenues related to our operations in the United States and foreign countries, see Note 19 to our consolidated financial statements.

Corporate Information

The Corporate Executive Board Company is a Delaware corporation that was incorporated in 1997. We are a publicly traded company with common stock listed on the NASDAQ Global Stock Market under the symbol “EXBD.”

Our executive offices are located at 1919 North Lynn Street, Arlington, Virginia, 22209. Our telephone number is (571) 303-3000. Our website is www.executiveboard.com. The information contained on our website is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K.

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Available Information

We make available, free of charge, through our website (follow the “Investors” link to the “Shareholder Information” link, then “SEC Filings”) our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such material was electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). Our Corporate Governance Guidelines, Board of Directors committee charters (including the charters of the Audit Committee, Compensation Committee, and Nominating and Governance Committee) and Code of Conduct for Officers, Directors and Employees also are available at that same location on our website.

Item 1A. Risk Factors.

All of the following risks could materially and adversely affect our business, financial condition, and results of operations. In addition to the risks discussed below and elsewhere in this Annual Report on Form 10-K, other risks and uncertainties not currently known to us or that we currently consider immaterial could, in the future, materially and adversely affect our business, financial condition, and financial results.

The ongoing uncertainty in the global economy and the financial markets could adversely impact our business, results of operations, financial condition, and liquidity.

Continuing global economic uncertainty and financial market instability, as well as the impact of the recent recession and the risk of a prolonged period of weak economic and business conditions, could materially and adversely affect our business, results of operations, financial condition, and liquidity. These conditions also could materially impact our members and prospective members, including our large accounts, causing them to defer purchasing their first product; defer, reduce, or not increase the volume of memberships they purchase from us in the future; or terminate existing memberships during the membership term under our service guarantee. These conditions also could materially impact our vendors causing them to go out of business entirely or be unable or unwilling to meet their commitments to us. Changes of this type could significantly affect our business and liquidity or could have a material adverse effect on our results of operations and financial condition. If we are unable to successfully anticipate changing economic and financial markets conditions, we may be unable to effectively plan for and respond to those changes, and our business could be adversely affected. In addition, the current global economic conditions could reduce the overall demand for professional information services as global companies consolidate purchasing, downsize departmental budgets, and reduce company-wide discretionary spending. While we market and sell our products throughout the year, a significant percentage of our new business and renewal bookings historically have taken place in the fourth quarter of the year. Significant volatility or weakness in economic conditions in the fourth quarter could have a disproportionately adverse effect on our current and future financial results.

We anticipate downward pressure on our operating margins in 2010.

In 2009, we worked aggressively to align our cost structure with a lower revenue profile by implementing a range of expense management activities, including the elimination of lower-performing programs, workforce reductions, discretionary expense controls, and real estate subleases. We continue to face difficulty with new business and renewal bookings in light of the current macroeconomic environment. Lower overall bookings during the year continue to apply pressure to revenues. As a result, we anticipate decreasing operating margins in the near term given the decrease in Contract Value and the lag between Contract Value growth and revenue growth.

We may fail to attract new members to our programs, obtain renewals from existing members, or sell additional programs to existing members.

We derive most of our revenues from annual memberships for our products and services. Revenue growth depends on our ability to attract prospects to their first membership, sustain a high renewal rate of existing memberships, and sell additional products and services to existing members. Failure to achieve new member and member renewal rate levels, or to cross-sell additional memberships to existing members at the level we forecast, could materially and adversely affect our operating results.

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We may experience difficulty collecting membership fees as a result of deteriorating operating conditions at our member institutions resulting from current market conditions.

While we believe we have a stable member base and have experienced strong collections in the past, if market conditions deteriorate further or remain weak for a prolonged period, we may experience increased turnover in our member base, including reductions in members’ commitments to us, which could have a material adverse effect on our results of operations and financial condition. In addition, we cannot predict how the strength or duration of the recent economic slowdown or the pace of economic recovery may negatively impact our members’ ability to pay us on a timely basis or at all. Payment delinquencies at higher rates than we have estimated would adversely affect our operating results.

If we do not retain members for the duration of their membership terms, we would suffer a loss of future revenues due to our service guarantee.

We offer a service guarantee to certain members under which a member may request a refund of the membership fee for a research program. When available, refunds are provided on a proportionate basis relative to the unused period of the membership term. Requests for refunds by a significant number of our members could adversely affect our financial results and future growth. We cannot predict the timing or strength of any recovery from the ongoing economic slowdown, and a weak or delayed recovery may cause more members to request refunds. Failure to retain members for the duration of their membership term at the level we forecast could materially and adversely affect our operating results.

The ongoing uncertainty in the global economy and the financial markets could make it more difficult for us to anticipate member needs and demands and provide relevant support and advice.

Our products and services provide insights, information, and advice to business executives and professionals. Our continuing and future success depends upon our ability to anticipate changing market trends and adapt our research, analysis, advice, new product development, and sales and service model to the evolving needs of our members. The industries and business sectors that we serve undergo frequent changes, including the introduction of new products 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 presents significant challenges to our ability to provide our members with current and timely research and analysis on issues of importance. In response to the ongoing economic uncertainty, we have developed new products and services, and we have adjusted our sales and service model to better serve our new and existing members. If the new products and services we have developed are not timely and relevant, or if we do not serve members in a manner that meets their evolving needs, we may experience increased member turnover, lower new business and renewal bookings, and decreased cross-sales of additional products to existing members, which would adversely affect our financial results and future growth.

Our restructuring plans may be unsuccessful or may have unanticipated negative results.

We announced restructuring plans in the fourth quarter of 2008 and in the second quarter of 2009. These restructuring plans were designed to reduce our workforce; realign our products and services, including consolidation or retirement of certain products, to focus on five corporate decision centers and industries we serve; and to implement an integrated approach to account management. Our restructuring plans have involved significant changes to our business and operations, which have created risk and uncertainty. While the intent of the restructuring plans was to enhance our product and service offerings, strengthen our relations with existing and prospective members, revise our sales and service model, and improve our efficiency as an organization, we may not realize some or any of these intended benefits, or they may take longer to realize than we projected. We may not have identified the appropriate products to consolidate or retire, and additional consolidation and/or retirement may be required. The plans may not have sufficiently reduced our workforce, and additional reductions may be required. We may not have identified the appropriate products to focus on, and adjustments to our areas of focus may be required. The plans may adversely affect our relationships with existing and prospective members, causing them to defer joining their first program, reduce the number of programs they join, cancel or choose not to renew existing memberships, or terminate their memberships before the end of the term under our service guarantee. Our workforce is approximately 28% smaller than at the end of 2008. As a result, we may have negatively affected our relationships with current and former employees, harmed their morale and productivity, and damaged our ability to recruit new employees. If we do not realize the intended benefits of the restructuring, if the restructuring takes longer than anticipated to realize the intended benefits, or if the restructuring has other negative effects, our business, financial results, and reputation may be harmed.

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We may not compete successfully and, as a result, may experience reduced demand for our products and services.

The information, professional services, research, networking, and advisory services industry is a highly competitive industry with numerous differentiators, including quality and size of the member network, pricing, quality of research and analysis, breadth of databases, and service. We compete against traditional consulting firms, training and development firms, trade associations, nonprofit organizations, and research and database companies. We also compete against providers of free content over the Internet and through other delivery channels. Our failure to compete effectively, both in terms of product quality and in terms of price, with our competition could adversely affect our financial results and future growth.

Continued uncertainty, consolidation, business failures, and increased regulation in the financial services industry may cause us to lose additional members.

A number of our products and services, including those provided by our newly acquired entity, Tower Group, provide insights and information to business leaders in the financial services industry. The financial services industry has been experiencing turmoil, consolidation, business failures, and increased regulation since the second half of 2007. The instability, consolidation, business failures, and increased regulation have resulted, and are expected to continue to result, in a reduction in the number of members and prospective members from the financial services industry. At December 31, 2009, approximately 21% of our Contract Value was attributable to members in the financial services industry, which includes commercial banks, thrifts, credit unions, credit card issuers, mutual fund companies, consumer credit lenders, brokerage houses, private and trust banks and insurance companies. Additional uncertainty, consolidation, business failures, and increased regulation in the financial services industry could adversely affect our financial results and future growth.

Our international operations involve financial, regulatory, and business risks that differ from or are in addition to those faced by our U.S. operations.

We are scaling our infrastructure to support our businesses outside the United States. We sell our membership programs in approximately 50 foreign countries, and those international sales accounted for approximately 30% of our revenues in 2009. Our international operations involve operational, financial, legal, compliance, and regulatory risks that differ from or are in addition to those faced by our U.S. operations, including: cultural and language differences; limited brand recognition for The Corporate Executive Board Company; difficulties in managing overseas operations; higher operating costs; restrictions on the repatriation of earnings; differing accounting principles and standards; potentially adverse tax consequences; different and potentially less stable political environments for our employees and our members; catastrophic events that could interrupt or adversely affect operations; less favorable employment laws that could affect our relations with our employees; different legal requirements, compliance obligations, and regulatory systems; and different data security and privacy rules. Our failure to manage our international operations effectively could adversely affect our operating results, limit growth, and damage our reputation.

We are subject to foreign currency risk.

Our international operations subject us to risks related to foreign currency exchange fluctuations. Prices for our products are denominated primarily in U.S. dollars, even when sold outside the United States. However, many of the costs associated with our international operations are denominated in local currencies. As a consequence, if the U.S. dollar weakens against the foreign currencies in countries where we have foreign operations, our operating costs in those countries would increase (on a U.S. dollar basis) and reduce our earnings. We use financial instruments, primarily cash flow hedging instruments, to hedge certain forecasted foreign currency commitments related to our operations in the United Kingdom. The maximum length of time of these hedging contracts is 12 months. Although we believe that our foreign exchange hedging policies are reasonable and prudent under the circumstances, they may only partially offset any adverse financial impact resulting from unfavorable changes in foreign currency exchange rates, especially if these changes are extreme and occur over a short period of time.

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Our transition to an integrated account management model may be unsuccessful or may have unanticipated negative results.

We are continuing the integration of our sales and service model to increase individual member impact, with completion for our European sales and service teams targeted for 2010. While we are integrating the sales and service functions to strengthen our relations with existing and prospective members and deliver greater value to them from our products and services, we may not realize some or any of these intended benefits, or it may take longer than anticipated to realize the intended benefits. The integrated sales and service model may adversely affect our relationships with existing and prospective members, causing them to defer joining their first program, reduce the number of programs they join, cancel or choose not to renew existing memberships, or terminate their memberships before the end of the term under our service guarantee. Our transition to an integrated account management model is requiring our sales and service staff to learn new skills, roles, and responsibilities. Our failure to adequately train employees for new account management roles could result in a failure to achieve our sales goals, which could adversely affect our financial results. It also could reduce employee morale and productivity.

Our acquisitions involve financial, operational, and human resources risks that differ from or are in addition to those faced by our existing operations.

We may make acquisitions that bring us capabilities and intellectual properties that address gaps in member needs and workflows. The acquisitions generally do not result in immediate material changes to our revenues and earnings. In addition, these acquisitions could require significant capital infusions. We may seek to obtain additional cash to fund potential acquisitions by selling equity or debt securities or by securing a bank credit facility. Any issuance of equity or convertible debt securities may be dilutive to existing shareholders.

Our acquisitions involve financial, operational, and human resources risks that differ from or are in addition to those faced by our ongoing U.S. operations, including: difficulties integrating and maintaining the operations, personnel, technologies, products, vendors, and information systems of the companies we acquire; assumption of potential unknown liabilities; failure to retain key personnel and customers; the acquisition of products with lower margins than our existing products; and exposure under arrangements such as earn-outs, employment agreements, and other acquisition-related agreements. As a result of these risks, we may not be able to achieve the expected benefits, which could adversely affect our operating results and limit future growth. Acquisitions may involve additional costs and could result in increased debt or contingent liabilities, adverse tax consequences, additional stock-based compensation expense, and the recording of amortization of amounts related to certain purchased intangible assets, any of which could adversely impact our results of operations.

We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimates and assumptions could have a material adverse effect on our results of operations.

In connection with the preparation of our consolidated financial statements, we use certain estimates and assumptions based on historical experience and other factors. Our most critical accounting estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, as discussed in Note 2 to our consolidated financial statements, we make certain estimates, including decisions related to provisions for revenue, income taxes and other contingencies. While we believe that these estimates and assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material adverse effect on our results of operations.

We may be subject to additional impairment losses due to potential declines in the fair value of our assets.

As a result of acquisitions and capital expenditures, we have goodwill, intangible assets, and fixed assets on our balance sheets. We test goodwill, intangible assets, and fixed assets for impairment on a periodic basis as required, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The events or changes that could require us to test our goodwill, intangible assets, and fixed assets for impairment include a reduction in our stock price and market capitalization, changes in estimated future cash flows, changes in rates of growth in our industry or in any of our reporting units, and ceasing to use portions of our existing leased office space.

The potential for goodwill impairment is increased during a period of substantial economic uncertainty. To the extent we acquire a company at a negotiated price based on anticipated future performance, subsequent market conditions may result in the acquired business performing at a lower level than was anticipated at the time of the acquisition. Any of these charges would reduce our reported results of operations and could cause the price of our common stock to decline. A prolonged downturn in the U.S. or global economy may result in declining performance that would require us to examine our goodwill for potential additional impairment. See Note 9 to our consolidated financial statements for additional information related to impairment of goodwill and other intangible assets.

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In 2009, we ceased using and entered into a sublease agreement for a portion of our headquarters facility in Arlington, Virginia. In addition, we ceased using a portion of two other facilities. We incurred a total pre-tax charge of $11.5 million, primarily related to the impairment of leasehold improvements and furniture, fixtures and equipment at our headquarters. In 2008, we incurred an impairment charge of $27 million related to Toolbox.com. In 2009, we conducted our annual impairment test, which indicated that the estimated fair value of the Toolbox.com reporting unit exceeded its carrying value by more than 15%. We will continue to evaluate the carrying value of our remaining goodwill, intangible assets, and fixed assets, and if we determine in the future that there is a potential further impairment, we may be required to record additional losses, which could materially and adversely affect our financial results.

We may be unable to attract and retain highly skilled management and employees.

Our continued and future success depends upon our ability to hire, train, and retain highly skilled management and employees, particularly senior leaders, research analysts, and sales and marketing staff. We may continue to adjust compensation packages to remain competitive in light of the performance of our stock price, and because we expect to continue to experience intense competition for our professional personnel from management consulting firms and other producers of professional information services. If we fail to attract, train, and retain a sufficient number of highly skilled management and employees in the future, our financial results and future growth could be adversely affected.

We may fail to implement, maintain, and upgrade our technology and information infrastructure quickly enough to meet member needs and changing legal requirements.

We serve our global membership through a technology and information management infrastructure. Among other functions, we use our technology and information management infrastructure, as well as the technology and information management infrastructure of vendors, to promote, sell, service, develop, store, and deliver our products and services to members; as well as to bill, collect, and make payments related to our products and services. Our failure to make capital expenditures in this infrastructure and to update the infrastructure in order to meet our members’ demands for products and services; and to address information security, privacy, data management, and other concerns with our infrastructure and the infrastructure of our vendors, both in the United States and internationally, could adversely affect our results of operations, future performance, and reputation. In many countries and in individual states within the United States, the rules governing information security, privacy, and related concerns are evolving and vary across regions. Our failure to optimize the use of the technology and information infrastructure, to properly anticipate or meet member demands and expectations, or to address the evolving regulatory environment governing our use of technology and information could adversely affect our operating results, limit our future growth, and harm our reputation. Our failure to protect our technology and information infrastructure from natural disasters, power loss, malicious and negligent actions by employees or third parties, and other failures, could result in interruptions to our business and operations, which could adversely affect our financial results, future growth, and reputation.

We may be unable to protect our intellectual property.

We rely on nondisclosure and confidentiality arrangements with employees, members, and third-parties, as well as copyright, trademark, trade secret, and other laws, to protect our proprietary rights in our products, services, and other proprietary information. We cannot assure that the steps we have taken to protect our intellectual property rights will be adequate to deter negligent or intentional misappropriation of our intellectual property or confidential information, 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.

We may be exposed to litigation related to the content we publish.

As a publisher and distributor of original research and analysis, a user of third-party content, and an on-line content provider through Toolbox.com and other services, we face potential liability for trademark and copyright infringement and other claims based on the material we publish. 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.

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Unanticipated changes in our tax provision, the adoption of new U.S. tax legislation or exposure to additional income and other tax liabilities could affect our profitability.

We are subject to income and other taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our provision for income taxes. During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain. For example, there could be changes in the valuation of our deferred tax assets and liabilities; or changes in the relevant tax, accounting, and other laws, regulations, principles and interpretations. We are subject to audits in various jurisdictions, and such jurisdictions may assess additional income tax against us. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on our operating results or cash flows in the period or periods for which that determination is made.

We are exposed to interest rate fluctuations that could have a negative impact on our financial results or condition.

We are exposed to interest rate risk primarily through our portfolio of cash and cash equivalents and marketable securities, which is intended to protect principal and liquidity. Cash and cash equivalents consist primarily of cash held at various financial institutions. Marketable securities consist primarily of U.S. Treasury notes and Washington, D.C. tax exempt bonds. We perform periodic evaluations of the relative credit ratings related to the cash and cash equivalents and marketable securities. Our portfolio is subject to interest rate risk as investments mature and are reinvested at current market interest rates. We currently do not use derivative financial instruments to adjust our investment portfolio risk or income profile. In an environment of generally low interests rates, as currently exists, we will likely realize lower interest income on our investments, which will reduce our overall earnings.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our headquarters are located in Arlington, Virginia. The terms of the lease contain provisions for rental and operating expense escalations. Our facilities accommodate research, marketing and sales, information technology, administration, graphic and editorial services and operations personnel. At December 31, 2009, our leases for office space consist of:

Location	Square feet		Lease Expiration
Arlington, Virginia		625,000		2028
London, England		79,000		2018
Chicago, Illinois		52,000		2018
Gurgaon, India		48,000		2013
San Francisco, California		28,000		2012
Needham, Massachusetts		20,000		2010
Rochester, New York		13,000		2013
Scottsdale, Arizona		9,000		2014
West Chester, Pennsylvania		6,000		2011
Sydney, Australia		7,600		2013
Toronto, Canada		4,000		2011

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 any future needs. We sublease approximately 203,000 square feet of our headquarters to unaffiliated third parties. These subleases expire in 2013 and 2021. One sublease for 172,000 may be extended through 2028 at the election of the sublessee. We also sublease 25,000 square feet at two other facilities.

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Item 3. Legal Proceedings.

From time to time, we are subject to litigation related to normal business operations. The Company vigorously defends itself in litigation and is not currently a party to, and our property is not subject to, any legal proceedings likely to materially affect our financial results.

Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted for a vote of our stockholders in the fourth quarter of 2009.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information, Holders and Dividends

Our common stock is quoted on the Nasdaq Stock Market under the symbol “EXBD.” At February 4, 2010, there were 43 stockholders of record. 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 Global Stock Market and cash dividends declared per common share.

	High		Low		Dividends
2009
First quarter	$	23.59	$	12.35	$	0.44
Second quarter		21.69		13.84		0.10
Third quarter		27.18		16.50		0.10
Fourth quarter		26.83		20.81		0.10
2008
First quarter	$	60.37	$	37.50	$	0.44
Second quarter		47.50		38.15		0.44
Third quarter		42.79		30.06		0.44
Fourth quarter		31.68		18.79		0.44

We expect to continue paying regular quarterly cash dividends, although there is no assurance as to future dividends because they depend on future earnings, capital requirements, and financial condition. In February 2010, the Board of Directors declared a first quarter 2010 cash dividend of $0.11 per common share.

Recent Sales of Unregistered Securities

There were no sales of unregistered equity securities in 2009.

Issuer Purchases of Equity Securities

A summary of the share repurchase activity for the fourth quarter of 2009 is as follows:

					Total Number of
					Shares		Approximate $
			Average		Purchased as		Value of Shares
	Total		Price		Part of		That May Yet Be
	Number of		Paid Per		Publicly		Purchased
	Shares Purchased		Share		Announced Plans		Under the Plans
October 1, 2009 to October 31, 2009 (1)		236	$	24.72		236	$	22,316,404
November 1, 2009 to November 30, 2009		—		—		—		22,316,404
December 1, 2009 to December 31, 2009		—		—		—		22,316,404
Total		236				236	$	22,316,404

(1) Amounts relate to the effect of employees using common stock received from the exercise of share-based awards to satisfy the statutory minimum federal and state withholding requirements generated from the exercise of such awards. In effect, the Company repurchased, at fair market value, a portion of the common stock received by employees upon exercise of their awards.

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Repurchases may continue to be made from time to time in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. We fund our share repurchases with cash on hand and cash generated from operations.

Item 6. Selected Financial Data.

The following table sets forth selected financial and operating data. The selected financial data presented below has been derived from our consolidated financial statements which have been audited by our independent registered public accounting firm. You should read the selected financial data presented below in conjunction with our consolidated financial statements, the notes to our consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	Year ended December 31,
	2009		2008			2007		2006		2005
	(In thousands, except per-share amounts)
Consolidated Statements of Income Data
Revenues	$	442,906	$	558,352		$	532,716	$	460,623	$	362,226
Costs and expenses:
Cost of services		147,019		179,950			183,088		164,022		120,944
Member relations and marketing		126,023		161,670			150,032		122,177		93,657
General and administrative		59,415		76,120			71,984		59,629		40,295
Depreciation and amortization		22,991		21,631			15,573		10,381		7,308
Impairment loss		—		27,449			—		—		—
Costs associated with exit activities		11,518		—			—		—		—
Restructuring costs		8,568		8,006			—		—		—
Total costs and expenses		375,534		474,826			420,677		356,209		262,204
Income from operations		67,372		83,526			112,039		104,414		100,022
Other income (expense), net		6,246		(5,438	)		16,049		24,318		13,588
Income before provision for income taxes		73,618		78,088			128,088		128,732		113,610
Provision for income taxes		27,989		33,291			47,501		49,561		38,550
Net income	$	45,629	$	44,797		$	80,587	$	79,171	$	75,060
Earnings per share-basic	$	1.34	$	1.31		$	2.20	$	1.99	$	1.90
Weighted average shares outstanding-basic		34,111		34,205			36,666		39,712		39,572
Earnings per share-diluted	$	1.33	$	1.30		$	2.17	$	1.94	$	1.83
Weighted average shares outstanding-diluted		34,293		34,329			37,159		40,721		41,092
Cash dividends declared per common share	$	0.74	$	1.76		$	1.60	$	1.20	$	0.40

	December 31,
	2009		2008		2007		2006		2005
	(In thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents and marketable securities	$	76,210	$	76,103	$	144,356	$	487,287	$	544,636
Total assets		423,195		446,192		544,772		736,055		726,995
Deferred revenues		222,053		264,253		323,395		308,671		261,300
Total stockholders’ equity		50,277		22,609		67,547		317,865		385,414

	December 31,
	2009			2008			2007			2006			2005
Other Operating Data (Unaudited)
Membership programs		44			52			48			42			37
Member institutions		4,812			5,114			4,711			3,739			2,831
Total membership subscriptions		13,790			15,747			16,349			14,190			10,825
Average subscriptions per member institution (1)		2.87			3.08			3.47			3.80			3.82
Client renewal rate (2)		78	%		84	%		90	%		92	%		92	%
Contract value (in thousands) (3)	$	393,737		$	487,107		$	526,386		$	475,653		$	381,366
Average subscription price	$	28,552		$	30,714		$	32,196		$	33,519		$	35,229

(1)	Also known as “cross-sell ratio,” represents the average across all subscription memberships, including the traditional large company market average of 3.30, 3.63, 4.03, 4.15 and 3.91 and the middle market average of 1.79, 1.58, 1.44, 1.1 and 1.0 in 2009, 2008, 2007, 2006 and 2005, respectively.
(2)	For the year then ended. Client renewal rate is defined as the percentage of member institutions renewed, adjusted to reflect reductions in member institutions resulting from mergers and acquisitions of members. The client renewal rate was 83% and 88% for our traditional large company market and 70% and 71% for the middle market in 2009 and 2008, respectively.
(3)	For the year then ended. Contract value (“Contract Value”) is defined as the aggregate annualized revenues attributed to all agreements in effect at a given date without regard to the remaining duration of any such agreement.

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Non-GAAP Financial Measures

The tables below include financial measures of EBITDA, Adjusted EBITDA, Adjusted net income, and Non-GAAP diluted earnings per share, which are non-GAAP financial measures provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The term “EBITDA” refers to a financial measure that we define as earnings before interest income, net, depreciation and amortization, and provision for income taxes. The term “Adjusted EBITDA” refers to a financial measure that we define as earnings before interest income, net, depreciation and amortization, provision for income taxes, impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition. The term “Adjusted net income” refers to net income excluding the after tax effects of impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition. “Non-GAAP diluted earnings per share” refers to net income per diluted share, excluding the per share after-tax effects of impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition.

These non-GAAP measures may be considered in addition to results prepared in accordance with GAAP, but they should not be considered a substitute for, or superior to, GAAP results. We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP results is provided below.

We believe that EBITDA, Adjusted EBITDA, Adjusted net income and Non-GAAP diluted earnings per share are relevant and useful supplemental information for our investors. We use these non-GAAP financial measures for internal budgeting and other managerial purposes, when publicly providing our business outlook and as a measurement for potential acquisitions. A limitation associated with EBITDA and Adjusted EBITDA is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management compensates for these limitations by also relying on the comparable GAAP financial measure of income from operations, which includes depreciation and amortization.

	Year ended December 31,
	2009			2008			2007			2006			2005
	(In thousands, except per-share amounts)
EBITDA and Adjusted EBITDA
Net income	$	45,629		$	44,797		$	80,587		$	79,171		$	75,060
Interest income, net		(1,787	)		(4,268	)		(14,937	)		(23,566	)		(13,588	)
Depreciation and amortization		22,991			21,631			15,573			10,381			7,308
Provision for income taxes		27,989			33,291			47,501			49,561			38,550
EBITDA		94,822			95,451			128,724			115,547			107,330
Impairment loss		—			27,449			—						—
Costs associated with exit activities		11,518			—			—			—			—
Restructuring costs		8,568			8,006			—			—			—
Shared-based compensation (1)		—			—			—			—			(26,370	)
Gain on acquisition		(680	)		—			—			—			—
Adjusted EBITDA	$	114,228		$	130,906		$	128,724		$	115,547		$	80,960
Adjusted EBITDA margin		25.8	%		23.4	%		24.2	%		25.1	%		22.4	%
Adjusted net income
Net income	$	45,629		$	44,797		$	80,587		$	79,171		$	75,060
Adjustments, net of tax
Impairment loss		—			17,073			—			—			—
Costs associated with exit activities		7,141			—			—			—			—
Restructuring costs		5,312			4,804			—			—			—
Shared-based compensation (1)		—			—			—			—			(17,422	)
Gain on acquisition		(422	)		—			—			—			—
Adjusted net income	$	57,660		$	66,674		$	80,587		$	79,171		$	57,638
Non-GAAP earnings per diluted share
GAAP earnings per diluted share	$	1.33		$	1.30		$	2.17		$	1.94		$	1.83
Adjustments, net of tax
Impairment loss		—			0.50			—			—			—
Costs associated with exit activities		0.20			—			—			—			—
Restructuring costs		0.16			0.14			—			—			—
Shared-based compensation (1)		—			—			—			—			(0.42	)
Gain on acquisition		(0.01	)		—			—			—			—
Non-GAAP earnings per diluted share	$	1.68		$	1.94		$	2.17		$	1.94		$	1.41

(1) We began recording share-based compensation expense beginning January 1, 2006 under the appropriate accounting guidance. Accordingly, the effect of share-based compensation has been reported above for comparative purposes.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with Selected Financial Data and our annual audited consolidated financial statements and related notes thereto. The following discussion includes forward-looking statements that involve certain risks and uncertainties. For additional information regarding forward-looking statements and risk factors, see Forward-Looking Statements and Item 1A. Risk Factors.

Operating results for Toolbox.com and other operating segments do not meet the quantitative thresholds for separate disclosure; thus, the Company has one reportable segment.

Executive Overview

Our focus for 2010 is to drive large company member loyalty through high value engagement, invest globally in our strongest brands, improve the member experience with enhanced technology and analytic platforms, and elevate member performance with product innovation. We expect to leverage and expand our integrated sales and service model to retain and grow our existing membership base, version our products and services for markets with a substantial growth opportunity (e.g., government, Asia-Pacific region, and Europe), launch new products and services, and protect the core economics of our business through effective cost management. Our plans may include the acquisition of companies that bring us capabilities and intellectual property that address additional member needs.

In 2009, net income was $45.6 million, Adjusted net income was $57.7 million, diluted earnings per share was $1.33, and Non-GAAP diluted earnings per share was $1.68. Our 2009 results were affected by the depth of the world-wide economic downturn and the uncertainty about its duration. As is evident in the decline in Contract Value from December 31, 2008, we continue to face difficulty with new business and renewal bookings in light of the current macroeconomic environment. Lower overall bookings during the year continue to apply pressure to revenues. However, we believe that we made progress operationally in 2009 as both our new commercial model and an improving economic environment contributed to improved bookings late in the year in comparison to the fourth quarter of 2008.

On a sequential basis, Contract Value at December 31, 2009 was up 1.7% from the third quarter, reflecting both improving sales performance and the addition of Tower Group. In our large company market, renewals, cross-sales, and win-back all showed gains attributable to our reorganization and increased focus on these companies. This focus came at the expense of our overall institutional renewal rate, which declined due to both the economy and the loss of renewals from some smaller companies in the large company market. We also saw continued strength in our middle market platform, which contributed to a decline in our average subscription price in 2009, which we sell to members at a lower price point.

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In 2009, we worked aggressively to align our cost structure with a lower revenue profile by implementing a range of expense management activities, including the elimination of lower-performing programs, workforce reductions, discretionary expense controls, and real estate subleases. Our total costs and expenses decreased by approximately $99 million and, as a result, our Adjusted EBITDA margin was 25.8% in 2009 compared to 23.4% in 2008. We restructured our product portfolio, eliminating approximately 20% of our programs, to focus on the strongest brands. This move allowed us to cut costs, but the primary purpose was to re-direct our resources toward strengthening the remaining products and focusing our sales force on selling products with the greatest member impact and long-term value. We rolled out a service-led growth strategy and organization in North America whereby we restructured our sales and service model to establish integrated account teams focused on serving our largest member organizations. We also added executive advisor capacity to enhance our ability to directly impact members. Focusing our sales talent on those Fortune 500 companies that were not yet members, we aimed at increasing our already high penetration of these top tier companies.

We anticipate improving sales, cross sales, and renewal activity throughout 2010 and into the future. However, we expect near-term margin pressure given the lag between Contract Value growth and revenue growth and selective investments. Therefore, we expect lower revenues and earnings in 2010 when compared to 2009. We believe that the characteristics of our business — a renewable revenue stream, fast cash conversion cycle, scalable cost structure, and low capital intensity — remain intact.

Critical Accounting Policies

We have identified the following policies as critical to our business and the understanding of our results of operations. This is not a comprehensive list of all of our accounting policies. Our accounting policies are particularly important to the portrayal of our financial position and results of operations and may require the application of significant judgment by management. As a result, they are subject to an inherent degree of uncertainty. In applying those policies, management uses judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical experience, our observance of trends in the industry, information provided by our members, and information available from other outside sources, as appropriate. For a more detailed discussion of the application of these and other accounting policies, see Note 2 to our consolidated financial statements. Our critical accounting policies include:

Revenue recognition

Revenue is recognized when (1) there is persuasive evidence of an arrangement, (2) the fee is fixed and determinable, (3) services have been rendered and payment has been contractually earned, and (4) collectability is reasonably assured. Revenues from membership subscriptions are recognized ratably over the term of the related subscription, which generally is 12 months. Membership fees generally are billable, and revenue recognition begins, when a member agrees to the terms of the membership and fees receivable and the related deferred revenue are recorded upon the commencement of the agreement or collection of fees, if earlier. Certain membership fees are billed on an installment basis. Members generally may request a refund of their membership fees, which is provided on a pro-rata basis relative to the length of the remaining membership term, under our service guarantee. Revenues from membership subscriptions were greater than 95% of total revenues in 2009, 2008, and 2007.

Advertising and content related revenues from Toolbox.com are recognized as the services are provided.

Allowance for uncollectible revenue

We record an allowance for uncollectible revenue, as a reduction in revenues, based upon management’s analysis and estimates as to the collectability of membership fees receivable, which generally is not the result of a members’ ability to pay. Revenues under membership agreements are generally recognized ratably over the membership period, typically 12 months. Accordingly, the allowance for uncollectible revenue is recorded against the amount of revenues that have been recognized under the contracts that are deemed uncollectible. Membership fees receivable that have not been recognized as revenues are recorded in deferred revenues. As part of our analysis, we examine our collections history, the age of the receivables in question, any specific member collection issues that we have identified, general market conditions, member concentrations and current economic and industry trends. Membership fees receivable balances are not collateralized.

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Income taxes

Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting basis and the tax basis of assets and liabilities. These deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when such amounts are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. A valuation allowance is provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized. We provided a valuation allowance of $9.1 million at December 31, 2009 for the estimated loss of Washington, D.C. tax credits, which resulted from our move to Virginia in 2008, a capital loss carryforward expected to expire unused in 2010, and state deferred tax assets, consisting primarily of state net operating loss carryforwards and tax credits.

In determining the provision for income taxes, we analyze various factors, including projections of our annual earnings and tax jurisdictions in which the earnings will be generated; the impact of state, local, and foreign income taxes; and our ability to use tax incentives. We file income tax returns in U.S. federal, state, and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state, and local tax examinations in major tax jurisdictions for periods prior to 2006.

Goodwill and intangible assets

As the result of acquisitions, we record any excess purchase price over the net tangible and identifiable intangible assets acquired as goodwill. A preliminary allocation of the purchase price to tangible and intangible net assets acquired is based upon a preliminary valuation, and our estimates and assumptions may be subject to change. Intangible assets consist primarily of purchased software and customer relationships. Intangible assets are amortized on a straight-line basis over their estimated useful lives of 2 to 20 years.

We test our goodwill for impairment annually on October 1, or whenever events or changes in circumstances indicate impairment may have occurred, by comparing its fair value to its carrying value. We have concluded that our reporting units used to assess goodwill impairment are the same as our operating segments. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, and a variety of other circumstances. If we determine that impairment has occurred, we are required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. Although we believe goodwill is appropriately stated in our consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance.

The determination of the fair value of individual reporting units is based upon the average of an income approach (discounted cash flow method) and a market approach (guideline company method and transaction method). These models require us to make various judgmental estimates and assumptions about sales, operating margins, growth rates, discount factors, and valuation multiples. Our discounted cash flow model is prepared by forecasting anticipated cash flows over a thirty year period and discounting them to their present value using an appropriate rate of return. The guideline company method is prepared by forecasting revenues for a five year period and utilizing a comparative revenue multiplier to determine a terminal value at the end of that time horizon, discounted using an appropriate rate of return. Our estimates are based upon our historical experience, our current knowledge from our commercial relationships, and available external information about future trends.

The 2009 annual impairment test for the Toolbox.com reporting unit indicated that the estimated fair value of the reporting unit exceeded its carrying value by more than 15%. We have assumed that the expansion of existing communities, the growth and scale of new community platforms, and a recovery of the online advertising market will generate additional revenues and cash flows from operations. We also performed a sensitivity analysis using slower revenues and cash flow growth rates. The estimated fair value of the reporting unit from the sensitivity analysis also exceeded its carrying value. Actual performance could be materially different from these forecasts, which could impact future estimates of fair value. Goodwill allocated to the Toolbox.com reporting unit was $13.0 million at December 31, 2009.

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Long-lived assets, including intangibles

Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for recoverability is made using an estimate of the undiscounted expected future cash flows and, if required, the impairment loss is measured as the amount that the carrying value of the asset exceeds the asset’s fair value if the asset is not recoverable. At December 31, 2009, we have not identified any instances where the carrying values of our long-lived assets were not recoverable.

Deferred incentive compensation

Direct incentive compensation paid to our employees related to the negotiation of new and renewal memberships is deferred and amortized over the term of the related memberships.

Operating Leases

We have non-cancelable operating lease agreements for our offices with original lease periods expiring between 2010 and 2028. We are committed to pay a portion of the related operating expenses and real estate taxes under certain of these lease agreements. Certain of these leases have escalating rent payment provisions. We recognize rent expense under such leases on a straight-line basis over the non-cancelable term of the lease, including free-rent periods. Lease incentives, relating to allowances provided by landlords, are amortized over the term of the lease as a reduction of rent expense. We recognize sublease income on a straight line basis over the term of the sublease, including free rent periods and escalations, as a reduction of rent expense. Costs associated with acquiring a subtenant, including broker commissions and tenant allowances, are amortized over the sublease term as a reduction of sublease income.

Share-based compensation

The grant date fair value of restricted stock units is measured by reducing the share price at that date by the present value of the dividends expected to be paid during the requisite vesting period. The grant date fair value of stock appreciation rights is calculated using a lattice valuation model. Determining the fair value of share-based awards is judgmental in nature and involves the use of significant estimates and assumptions, including the term of the share-based awards, risk-free interest rates over the vesting period, expected dividend rates, the price volatility of our stock and estimated forfeiture rates of the awards. Fair value and forfeiture rate estimates are based on assumptions we believe to be reasonable. Actual future results may differ from those estimates.

Results of Operations

We generate the majority of our revenues through memberships that provide access to our products and services, which are delivered through several channels. Memberships, which principally are annually renewable agreements, primarily are payable by members at the beginning of the contract term. Billings attributable to memberships for our products and services initially are recorded as deferred revenues and then generally are recognized on a pro-rata basis over the membership contract term, which typically is 12 months. Generally, a member may request a refund of its membership fee during the membership term under our service guarantee. Refunds are provided on a pro-rata basis relative to the remaining term of the membership.

Our operating costs and expenses consist of:

• Cost of services, which represents the costs associated with the production and delivery of our products and services, consisting of compensation, including share-based compensation, for research personnel, in-house faculty, and product advisors; the organization and delivery of membership meetings, seminars, and other events; ongoing product development costs; production of published materials, costs of developing and supporting our membership web platform and digital delivery of products and services; and associated support services.

• Member relations and marketing, which represents the costs of acquiring new members and the costs of account management, consisting of compensation, including sales incentives and share-based compensation; travel; recruiting and training of personnel; sales and marketing materials; and associated support services, as well as the costs of maintaining our customer relationship management software (“CRM”).

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• General and administrative, which represents the costs associated with the corporate and administrative functions, including human resources and recruiting, finance and accounting, legal, management information systems, facilities management, business development and other. Costs include compensation, including share-based compensation; third-party consulting and compliance expenses; and associated support services.

• Depreciation and amortization, consisting of depreciation of our property and equipment, including leasehold improvements, furniture, fixtures and equipment, capitalized software and Web site development costs and the amortization of intangible assets.

We have significantly reduced our costs in light of macroeconomic conditions and a decline in revenues in 2009 and expect to experience the full-year effect of our restructuring plans in 2010. We continue to manage our costs and expenses aggressively. In addition, we plan to make selective investments in the business to support our efforts to return to growth in Contract Value.

Years ended December 31, 2009, 2008, and 2007

Contract Value

Contract Value decreased 19.2% to $393.7 million at December 31, 2009 from $487.1 million at December 31, 2008 and decreased 7.5% in 2008 from $526.4 million at December 31, 2007.

In 2009, the largest driver of the $93.4 million decrease in Contract Value was reduced memberships from some large company members, as evidenced by the decrease in the cross-sell ratio, decreased new bookings due to macro-economic conditions, and anticipated Contract Value losses of $29 million from programs that we retired or consolidated in 2009. The total number of member institutions decreased 5.9%, to 4,812 at December 31, 2009 from to 5,114 at December 31, 2008. The total number of membership subscriptions decreased 12.4% to 13,790 at December 31, 2009 from 15,747 at December 31, 2008. The average subscription price at December 31, 2009 decreased 7.0% to $28,552 from $30,714 at December 31, 2008.

In 2008, the largest driver of the $39.3 million decrease in Contract Value resulted from large company members who experienced disruptive economic distress themselves, or from other member companies that disappeared entirely, primarily in the financial services, transportation, and building materials industries. This decrease, which we experienced both in North America and Europe, accounted for approximately $32 million, or 80%, of the Contract Value decrease. The remaining Contract Value decrease was driven by a reduction in spending by the general membership base, partially offset by sales to new members and sales of new products. The total number of membership subscriptions decreased 3.7% to 15,747, the total number of member institutions increased 8.6% to 5,114, and the average subscription price decreased 4.6% to $30,714 at December 31, 2008.

Revenues

Revenues decreased 20.7% to $442.9 million in 2009 from $558.4 million in 2008 and increased 4.8% in 2008 from $532.7 million in 2007. As discussed in the Executive Overview, we expect revenues to decline in 2010.

In 2009, both lower deferred revenues from 2008 and lower bookings throughout 2009 contributed to the decrease in revenues. The decrease in bookings is due to the factors described in Contract Value above.

In 2008, the largest drivers of the increase in revenues related to the recognition of the year end 2007 deferred revenue balance, which increased from year end 2006, and new members joining their first program, and to a lesser extent, the introduction of new research programs, and the inclusion of revenues from Toolbox.com for the entire year compared to only five months in 2007.

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Costs and expenses

Declines in share-based compensation, facilities expense, and the impact of changes in the exchange rates of the U.S. dollar to the British Pound all contributed to year-over-year reductions in costs and expenses in 2009. These items are allocated to Cost of services, Member relations and marketing, and General and administrative expenses. We discuss them on an aggregated basis below:

• Share-based compensation decreased $1.8 million from 2008 to 2009 and $10.2 million from 2007 to 2008. The decrease in 2009 is primarily a result of a decrease in the fair value of new share-based awards granted mainly as a result of declines in the trading price of our common stock. The decrease in 2008 relates to the decrease in the fair value of new share-based awards granted and an increase in our anticipated forfeiture rate. In 2008, we increased our estimated forfeiture rate from 3% to 14%. The cumulative effect of the change in estimate was a reduction in compensation expense of $2.9 million.

• Facilities expense decreased $9.6 million from 2008 to 2009. The decrease in 2009 is primarily due to subleases of a portion of our headquarters and the consolidation of the Washington, D.C. office locations into our new headquarters in the first quarter of 2008. In 2008, we also recorded $6.0 million of moving-related costs, including $3.0 million associated with overlapping office leases in conjunction with the move to our new headquarters.

• We also benefited from the strength of the U.S. dollar compared to the British Pound in 2009 versus 2008 and from 2007 to 2008. The value of the British Pound versus the U.S. dollar decreased approximately $0.30, on average across 2009, and decreased approximately $0.15, on average across 2008. Costs incurred for foreign subsidiaries will fluctuate based upon changes in foreign currency rates in addition to other operational factors. We enter into cash flow hedges for our UK subsidiary to mitigate foreign currency risk, which offsets a large portion of the impact foreign currency fluctuations have on costs and expenses.

Cost of services

Cost of services decreased 18.3% to $147.0 million in 2009 from $180.0 million in 2008 and decreased 1.7% in 2008 from $183.1 million in 2007.

In 2009, the decrease of $33.0 million was primarily due to a $21.0 million reduction in compensation and related costs, including salaries, payroll taxes, incentives, and share-based compensation expense. The primary cause of the decrease in compensation was headcount reductions related to the restructuring plans announced in 2008 and 2009. Additional decreases included member meeting costs of $6.5 million, travel and entertainment costs of $4.2 million, facilities expense of $4.1 million, and printing costs of $1.5 million. The decrease in Cost of services also benefited from strength of the U.S. dollar versus the British Pound as discussed above. These decreases were partially offset by a $3.6 million increase in deferred compensation expense and $2.1 million of expenses from Tower Group, a business acquired in October 2009, primarily related to compensation related costs.

In 2008, the decrease of $3.1 million was primarily due to a reduction in compensation and related costs, including salaries, payroll taxes, and incentives, a decrease in deferred compensation expense and a decrease in share-based compensation expense of $4.8 million. Offsetting the decreases, in part, was an increase in facilities expense due to overlapping lease periods related to the move from Washington, D.C. to our new headquarters. Additional increases included external consulting fees, executive education seminar costs, and expenses related to the inclusion of Toolbox.com, a business acquired in 2007, for the entire year in 2008.

Member relations and marketing

Member relations and marketing decreased 22.1% to $126.0 million in 2009 from $161.7 million in 2008 and increased 7.8% in 2008 from $150.0 million in 2007.

In 2009, the decrease of $35.7 million was primarily due to a $26.4 million reduction in compensation and related costs, including salaries, payroll taxes, and incentives. The primary cause of the decrease in compensation was headcount reductions related to the restructuring plans announced in 2008 and 2009. Additional decreases included travel and entertainment expenses of $6.8 million and facilities expense of $4.3 million. The decrease in Member relations and marketing also benefited from strength of the U.S. dollar versus the British Pound as discussed above. These decreases were partially offset by a $2.6 million increase in external consulting fees related to our purchase and implementation of a new CRM and a $1.6 million increase in deferred compensation expense.

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In 2008, the increase of $11.7 million was primarily due to compensation and related costs including salaries, payroll taxes and incentives. Facilities costs also increased as noted above. The increased compensation costs were part of our initiative to strengthen our North American sales force and resulted from incremental investments in staffing, incentives and training. To a lesser extent, the increase was due to an increase in facilities and related costs and the inclusion of Toolbox.com for the entire year in 2008. These increases were partially offset by a $3.2 million decrease in share-based compensation expense and a decrease in deferred compensation expense.

General and administrative

General and administrative decreased 21.9% to $59.4 million in 2009 from $76.1 million in 2008 and increased 5.7% in 2008 from $72.0 million in 2007.

In 2009, the decrease of $16.7 million was primarily due to a $5.7 million decrease in compensation and related costs, including salaries, payroll taxes and incentives; and a $4.7 million decrease in external consulting fees, primarily information technology related. The primary cause of the decrease in compensation was headcount reductions related to the restructuring plans announced in 2008 and 2009. The primary cause of the decrease in external consulting fees was costs incurred in 2008 relating to infrastructure investments related to the build out of our headquarters. Additional decreases included travel and entertainment expenses of $2.3 million, employee placement fees and signing bonuses of $2.3 million and facilities costs of $1.3 million. The decrease in General and administrative also benefited from strength of the U.S. dollar versus the British Pound as discussed above. These decreases were partially offset by a $1.7 million increase in deferred compensation expense.

In 2008, the increase of $4.1 million was primarily due to an increase in external consulting fees relating to infrastructure investments for the build out of our headquarters and to a lesser extent, facilities costs, compensation and related costs, including salaries and payroll taxes and the inclusion of Toolbox.com in the results for the full year of 2008 compared with five months in 2007. These increases were partially offset by decreases in severance expense not related to restructuring costs and a $2.0 million decrease in share-based compensation expense. To a lesser extent, the following also decreased during the year: non-revenue related incentives, deferred compensation expense, and employment placement fees.

Depreciation and amortization

Depreciation and amortization increased 6.5% to $23.0 million in 2009 from $21.6 million in 2008 and increased 38.5% in 2008 from $15.6 million in 2007.

In 2009, the increase was primarily due to the full year’s effect of depreciating the 2008 capital expenditures, primarily relating to leasehold improvements for our headquarters placed into service in the first and second quarters of 2008. Amortization of intangible assets remained relatively unchanged from 2008 to 2009.

In 2008, the increase of $6.0 million was primarily due to a full year’s amortization of intangible assets from Toolbox.com and other smaller acquisitions. The total increase in amortization expense was $3.3 million. The increase was also due to depreciation related to leasehold improvements and computer hardware placed into service in 2008 at our headquarters.

Impairment loss

In the fourth quarter of 2008, based on a combination of factors (including the economic environment and the near term outlook for advertising related revenues), we concluded that goodwill and intangible asset amounts previously recorded for the 2007 acquisition of Toolbox.com were impaired. We utilized the income approach (discounted cash flow method) and the market approach (guideline company method and the transaction method) in the determination of the fair value of Toolbox.com. The total impairment loss recognized in 2008 was $27.4 million.

Costs associated with exit activities

In June 2009, we ceased using and entered into a sublease agreement for a portion of our headquarters. In addition, we ceased using a portion of two other facilities, whereby we sublet a portion of one facility and are attempting to sublease a portion of the other facility. We incurred a total pre-tax charge of $11.5 million, substantially all of which is non-cash, primarily related to the impairment of leasehold improvements and furniture, fixtures and equipment at our headquarters. We expect that these actions will reduce rent expense approximately $5.1 million in 2010 compared to 2009.

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These actions advance our ongoing transition to an integrated account management model, which has reduced the need for space in our headquarters and other existing facilities, because we are locating sales and service staff closer to members. In addition, these actions represent another step in our efforts to align operating expenses more closely with our outlook, in light of economic conditions, and to redirect resources to areas with a greater potential for future growth. We believe existing facilities will be adequate for our current needs and additional facilities are available for lease at advantageous terms to meet any future needs.

Restructuring Costs

In October 2009, we acquired the stock of Tower Group. As part of our integration plans, we initiated a workforce reduction plan whereby approximately ten Tower Group employees were offered severance and related termination benefits. Restructuring costs associated with this action were $1.2 million.

In the second quarter of 2009, we committed to a separation plan (the “2009 Plan”), initially offering additional benefits for employees electing to voluntarily separate, for which approximately 155 employees submitted resignations effective beginning July 24, 2009. The 2009 Plan, which has concluded, is part of our continuing efforts to align expenses more closely with our outlook and to accelerate the placement of resources in areas that we believe have a greater potential for future growth. The 2009 Plan was not offered to executive officers, critical staff, and most sales staff. Pre-tax restructuring charges for the 2009 Plan were $7.8 million, most of which was associated with severance and related termination benefits. The annualized pre-tax savings associated with these restructuring activities were expected to be approximately $15 million.

In the fourth quarter of 2008, we committed to a plan of workforce reductions to restructure our business to align expenses more closely with our revenue outlook, in light of continued economic turmoil in the U.S. and global economy, and to redirect resources to areas that we believe have a greater potential for future growth. This restructuring included a reduction of approximately 15% of our workforce; a realignment of products and services, including consolidation or retirement of certain products, to focus on five corporate decision centers and industries we serve; and the implementation of a new, integrated approach to prospect and member account management. We recorded a pre-tax restructuring charge of $8.0 million for these actions in the fourth quarter of 2008 and $1.0 million in the first quarter of 2009, most of which was associated with severance and related termination benefits. The annualized pre-tax savings associated with these restructuring activities were expected to be approximately $31 million.

We currently do not expect to incur any significant additional costs under the plans.

Other income (expense), net

Other income (expense), net increased in 2009 to income of $6.2 million from expense of $5.4 million in 2008 and decreased in 2008 from income of $16.0 million in 2007. Changes in 2009 and 2008 were primarily related to interest income earned on cash and cash equivalents, foreign currency remeasurement of the net monetary assets from our UK subsidiary, and fluctuations in the fair value of participant accounts associated with the deferred compensation plan. The components are further described below.

In 2009, Other income (expense), net was primarily comprised of $2.7 million related to an increase in deferred compensation plan assets, $1.8 million of interest income, $1.1 million foreign currency re-measurement gain, and a $0.7 million gain on acquisition. The decrease in interest income, net was primarily due to lower investment returns for cash and cash equivalents in a lower interest rate environment and decreased levels of marketable securities.

In 2008, Other income (expense), net was comprised of interest income of $4.3 million, including a realized gain on the sale of marketable securities, offset by a $1.8 million write-down of a cost method investment, a $3.4 million foreign currency re-measurement loss, and $4.5 million related to a decrease in deferred compensation plan assets. The decrease in interest income, net was primarily due to decreased levels of cash and cash equivalents and marketable securities relative to 2007 and lower investment returns in a lower interest rate environment.

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In 2007, Other income (expense), net was comprised of interest income of $14.9 million and $1.1 million related to an increase in deferred compensation plan assets.

Provision for income taxes.

We recorded a Provision for income taxes of $28.0 million, $33.3 million and $47.5 million in 2009, 2008 and 2007, respectively. Changes in the effective tax rate in 2009 and 2008 were primarily related to changes in unrealized currency translation gains/losses recognized for book purposes.

In 2009, our effective income tax rate was 38.0%, as opposed to the Federal statutory rate of 35%, primarily due to the effects of unrealized currency translation gains recognized for book purposes, a reduced amount of permanently nondeductible expenses, state tax credits, and state income taxes.

In 2008, our effective income tax rate was 42.6%, as opposed to the Federal statutory rate of 35%, primarily due to the effects of unrealized currency translation losses recognized for book purposes, an increase in the state effective rate due to the move to Virginia, as well as an increase to the valuation allowance related to certain state deferred tax assets, and state income taxes.

In 2007, our effective tax rate was 37.1%, as opposed to the Federal statutory rate of 35%, primarily due to the effects of state income taxes and permanently nondeductible expenses.

We recorded net deferred tax assets of $46.9 million and $53.9 million in 2009 and 2008 respectively. We will need to generate approximately $118 million of future taxable income to realize the net deferred tax assets at December 31, 2009.

Deferred tax assets related to share based compensation are expected to reverse over a six year period. Deferred tax assets related to goodwill, intangible assets and operating leases are expected to reverse over periods up to eighteen years.

Liquidity and Capital Resources

Cash flows generated from operating activities are our primary source of liquidity. As discussed above, in 2009 we worked aggressively to align our cost structure with a lower revenue profile by implementing a range of expense management activities, including the elimination of lower-performing programs, workforce reductions, discretionary expense controls, and real estate subleases. In addition, we reduced our quarterly dividend from $0.44 to $0.10 resulting in a reduction of $34.7 million.

We believe that existing cash and cash equivalents and marketable securities balances and operating cash flows will be sufficient to support operations, capital expenditures, and the payment of dividends, as well as potential share repurchases during the next 12 months. Our future cash flows will depend on many factors, including our rate of Contract Value growth and selective investments to expand our brands and enhance technology. Also, we may make investments in, or acquisitions of, complementary businesses, which could also require us to seek additional financing.

We had cash and cash equivalents and marketable securities of $76.2 million and $76.1 million at December 31, 2009 and 2008, respectively. In 2008, we completed the build-out of the office space for our headquarters which included total cash payments of $59.7 million, net of lease incentives received. Of this amount, $25.5 million was paid in 2007 and the remaining $34.2 was paid in 2008.

Cash flows from operating activities.

Membership subscriptions, which principally are annually renewable agreements, generally are payable by members at the beginning of the contract term. The combination of revenue growth, profitable operations, and advance payments of membership subscriptions historically has resulted in net cash flows provided by operating activities. We generated net cash flows from operating activities of $28.6 million, $85.2 million, and $110.0 million in 2009, 2008, and 2007, respectively.

The decrease of $56.6 million in cash flows provided by operations to $28.6 million in 2009 from $85.2 million in 2008 is primarily attributable to decreases in bookings in late 2008 and throughout 2009 when compared to prior periods. Membership fees receivable, net decreased $34.3 million at December 31, 2008 compared to December 31, 2007, which impacted cash collections in 2009 compared to 2008.

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We made income tax payments of $32.7 million, $55.2 million, and $60.8 million in 2009, 2008, and 2007, respectively, and expect to continue making tax payments in future periods. In 2008, we received $9.0 million of incentives associated with our lease and relocation to Arlington, Virginia.

Cash flows from investing activities.

Our cash management, acquisition, and capital expenditure strategies affect cash flows from investing activities. In 2009, net cash flows provided by investing activities were $11.5 million. In 2008, net cash flows used in investing activities were $16.3 million. In 2007, net cash flows provided by investing activities were $121.8 million.

In 2009, we generated $14.4 million from maturities of marketable securities and $5.2 million from the acquisition of businesses. We used $7.1 million for capital expenditures, primarily on technology infrastructure, and $1.0 million for a cost method investment.

In October 2009, we acquired 100% of the equity interests of Tower Group to supplement our existing financial services products. As part of the acquisition, we agreed to assume certain obligations that might otherwise have been resolved prior to consummating the transaction. In return, the seller agreed to leave assets on the balance sheet to settle those obligations.

In 2008, we used $42.5 million in investing activities for capital expenditures, including furniture, fixtures and equipment and leasehold improvements primarily related to the build-out of our headquarters. The build-out was complete at December 31, 2008. In addition, we acquired two companies totaling $10.0 million, net of cash acquired. These activities were offset by $36.5 million of net proceeds from maturities and sales of marketable securities.

In October and December 2008, we acquired 100% of the equity interests of two companies that supplement our existing product offerings in two corporate decision centers by providing access to proprietary data assets. The total purchase price for both acquisitions was $10.0 million, net of cash acquired, which was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values. We allocated $5.6 million to intangible assets with a weighted average amortization period of eight years and $6.7 million was allocated to goodwill. The purchase price for one of the acquisitions may be increased if certain performance targets are met in each of the three annual periods ending December 31, 2009, 2010 and 2011. We currently do not expect to pay any additional purchase price based on the achievement of these performance targets.

In 2007, we used $34.5 million in investing activities for capital expenditures, including furniture, fixtures and equipment and leasehold improvements primarily related to the build-out of our headquarters. We used $61.6 million, net of cash acquired, for acquisitions, which primarily related to the acquisition of Toolbox.com and $3.8 million for a cost method investment. These activities were offset by $221.7 million of net proceeds from maturities and sales of marketable securities.

In July 2007, we acquired 100% of the equity interests of Information Technology Toolbox, Inc., now operating as Toolbox.com. The purchase price was $58.9 million, reduced by the assumption of $1.0 million in transition bonuses that were paid by us. Under the terms of the acquisition agreement, the purchase price may be increased if certain financial thresholds are achieved during the 12-month period ending on or before December 31, 2010. We currently do not expect to pay any additional purchase price based on the achievement of these financial thresholds. As discussed above, we recorded an impairment loss of $27.4 million related to goodwill and intangible assets of this reporting unit.

We estimate that capital expenditures to support our infrastructure will be approximately $8.0 million in 2010.

Cash flows from financing activities.

Net cash flows used in financing activities were $24.6 million, $100.3 million, and $355.6 million in 2009, 2008, and 2007, respectively.

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In 2009, dividend payments were $25.2 million and we repurchased approximately five thousand shares of our common stock for $0.1 million. The quarterly dividend was decreased from $0.44 to $0.10 per share in the second quarter of 2009 and increased to $0.11 per share in the first quarter of 2010. Proceeds from the issuance of common stock under the employee stock purchase plan were $0.7 million.

In 2008, dividend payments were $59.9 million and we repurchased 1.0 million shares of our common stock at a total cost of $41.8 million. Proceeds from the issuance of common stock under the employee stock purchase plan were $1.4 million. In addition, we received $0.1 million from the exercise of common stock options.

In 2007, dividend payments were $57.8 million and we repurchased 4.3 million shares of our common stock at a total cost of $303.0 million. Proceeds from the issuance of common stock under the employee stock purchase plan were $2.1 million. In addition, we received $0.7 million from the exercise of common stock options and recognized excess tax benefits of $2.4 million from the exercise of share-based compensation.

At December 31, 2009, we had outstanding letters of credit totaling $6.4 million for security deposits related to certain office leases. The letters of credit expire at various times from January 2010 through September 2010, but will automatically extend for another year from their expiration dates. To date, no amounts have been drawn on these agreements. In 2008, we terminated letters of credit relating to security deposits for Washington, D.C. operating leases when the leases expired. Under the terms of the Arlington, Virginia lease, we initially committed to providing the landlord security deposits totaling $50 million and pledged $50 million of long-term marketable securities to the landlord as collateral for this obligation. In August 2008, we replaced the $50 million pledge of long-term marketable securities with a letter of credit for $4.5 million.

Contractual obligations

The following summarizes our known contractual obligations at December 31, 2009 and the effect such obligations are expected to have on our liquidity and cash flows in future periods:

			Payments due by period (in thousands) at December 31, 2009
	Total		YE 2010		YE 2011		YE 2012		YE 2013		YE 2014		Thereafter
Operating lease obligations	$	630,014	$	34,674	$	34,468	$	34,509	$	34,385	$	34,126	$	457,852
Deferred compensation liability		16,537		1,407		914		1,144		1,149		779		11,144
Purchase commitments		13,918		8,346		4,341		1,231		—		—		—
Total	$	660,469	$	44,427	$	39,723	$	36,884	$	35,534	$	34,905	$	468,996

			Sublease receipts by period (in thousands) at December 31, 2009
	Total		YE 2010		YE 2011		YE 2012		YE 2013		YE 2014		Thereafter
Subleases receipts	$	104,422	$	9,218	$	9,146	$	9,157	$	9,394	$	8,005	$	59,502

The net operating lease obligations relate to our office leases, excluding expected rental income under non-cancelable subleases, which are more fully described in Note 18 to our consolidated financial statements. Operating lease obligations include scheduled rent increases for our headquarters of 1.85% per year through 2017, and 2% per year thereafter. Purchase commitments primarily relate to information technology and infrastructure contracts.

Not included in the table above are unrecognized tax benefits of $592,000.

Off-Balance Sheet Arrangements

At December 31, 2009, we had no off-balance sheet financing or other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing or other debt arrangements or for other contractually narrow or limited purposes.

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Recent Accounting Pronouncements

See Note 3 to our consolidated financial statements for a description of recent accounting pronouncements, including the expected dates of adoption.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of business, we are exposed to interest rate and foreign currency exchange rate risks that could impact our financial position and results of operations.

Interest rate risk

We are exposed to interest rate risk primarily through our portfolio of cash and cash equivalents and marketable securities, which is designed for safety of principal and liquidity. Cash and cash equivalents are primarily comprised of cash held in demand deposit accounts at various financial institutions. Marketable securities consist primarily of U.S. Treasury notes and Washington, D.C. tax exempt bonds. We perform periodic evaluations of the relative credit ratings related to cash and cash equivalents and marketable securities. This portfolio is subject to inherent interest rate risk as investments mature and are reinvested at current market interest rates. We currently do not use derivative financial instruments to adjust our portfolio risk or income profile. A hypothetical 10% adverse movement in interest rates would not have a material impact on our results of operations or cash flows.

The following table provides the principal (notional) amount by expected maturity of our available-for-sale marketable securities at December 31, 2009 (dollars in thousands):

																					Fair
																					Value
	2010			2011			2012			2013			2014			Thereafter			Total		12/31/09
Marketable securities	$	18,440		$	9,845		$	3,700		$	7,355		$	1,000		$	2,000		$	42,340	$	44,450
Average effective interest rate		3.94	%		4.24	%		4.25	%		4.60	%		4.31	%		5.00	%

Foreign currency risk

Our international operations subject us to risks related to currency exchange fluctuations. Prices for our products are denominated primarily in U.S. dollars, even when sold to members that are located outside the United States. Many of the costs associated with our operations located outside the United States are denominated in local currencies. As a consequence, increases in local currencies against the U.S. dollar in countries where we have foreign operations would result in higher operating costs and, potentially, reduced earnings. We use forward contracts, designated as cash flow hedging instruments, to protect against foreign currency exchange rate risks inherent with our cost reimbursement agreement with our UK subsidiary. A forward contract obligates us to exchange a predetermined amount of U.S. dollars to make an equivalent British Pound payment equal to the value of such exchange. The maximum length of time over which we hedge our exposure to the variability in future cash flows is 12 months.

The functional currency of substantially all of our wholly-owned foreign subsidiaries is the U.S. dollar. For these foreign subsidiaries, monetary balance sheet and related income statement accounts, representing claims receivable or payable in a fixed number of foreign currency units regardless of changes in exchange rates, are re-measured at the current exchange rate with exchange gains and losses recorded in income. Non-monetary balance sheet items and related income statement accounts, which do not result in a fixed future cash inflow or outflow of foreign currency units, are re-measured at their historical exchange rates. In 2009 and 2008, we recorded foreign currency translation gains (losses) totaling $1.1 million and ($3.4) million, respectively, which are included in Other income (expense), net in the consolidated statements of income. A hypothetical 10% adverse movement in British Pounds would result in additional expense of approximately $2 million.

28

Item 8. Financial Statements and Supplementary Data.

Report of Management’s Assessment of Internal Control Over Financial Reporting

Management is responsible for the preparation and integrity of the consolidated financial statements appearing in our Annual Report. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States and include amounts based on management’s estimates and judgments.

Management also is responsible for establishing and maintaining adequate internal control over financial reporting. Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2009 based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon the evaluation under this framework, management concluded with reasonable assurance that our internal control over financial reporting was effective as of December 31, 2009.

Our control environment is the foundation for our system of internal control over financial reporting and is reflected in our Code of Conduct for Officers, Directors and Employees. It sets the tone of our organization and includes factors such as integrity and ethical values. Our internal control over financial reporting is supported by formal policies and procedures that are reviewed, modified and improved as changes occur in business conditions and operations.

The Audit Committee of the Board of Directors, which is comprised solely of outside directors, meets periodically with members of management and the independent auditors to review and discuss internal control over financial reporting and accounting and financial reporting matters. The independent registered public accounting firm reports to the Audit Committee and accordingly has full and free access to the Audit Committee at any time.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this Annual Report, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2009.

/s/ Thomas L. Monahan III

Thomas L. Monahan III

Chief Executive Officer

March 1, 2010

/s/ Richard S. Lindahl

Richard S. Lindahl

Chief Financial Officer

March 1, 2010

29

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

The Board of Directors and Stockholders of
The Corporate Executive Board Company

We have audited The Corporate Executive Board Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Corporate Executive Board Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management’s Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, The Corporate Executive Board Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the accompanying consolidated balance sheets of The Corporate Executive Board Company and subsidiaries as of December 31, 2009 and 2008 and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009 of The Corporate Executive Board Company and Subsidiaries, and our report dated March 1, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Baltimore, Maryland
March 1, 2010

30

Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements

The Board of Directors and Stockholders of
The Corporate Executive Board Company

We have audited the accompanying consolidated balance sheets of The Corporate Executive Board Company and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009. 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 the standards of the Public Company Accounting Oversight Board (United States). 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 consolidated financial position of The Corporate Executive Board Company and subsidiaries at December 31, 2009 and 2008, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Corporate Executive Board Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Baltimore, Maryland
March 1, 2010

31

THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	December 31,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	31,760		$	16,214
Marketable securities		18,666			13,545
Membership fees receivable, net		125,716			127,007
Deferred income taxes, net		7,989			12,459
Deferred incentive compensation		9,721			12,621
Prepaid expenses and other current assets		9,584			9,140
Total current assets		203,436			190,986
Deferred income taxes, net		39,744			41,427
Marketable securities		25,784			46,344
Property and equipment, net		89,462			109,133
Goodwill		27,129			26,392
Intangible assets, net		12,246			17,266
Other non-current assets		25,394			14,644
Total assets	$	423,195		$	446,192
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	48,764		$	66,178
Accrued incentive compensation		27,975			25,145
Deferred revenues		222,053			264,253
Total current liabilities		298,792			355,576
Deferred tax liabilities		867			—
Other liabilities		73,259			68,007
Total liabilities		372,918			423,583
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 100,000,000 shares authorized; 43,313,597 and 43,205,367 shares issued and 34,147,008 and 34,043,752 shares outstanding at December 31, 2009 and 2008, respectively		433			432
Additional paid-in-capital		401,629			395,434
Retained earnings		274,718			254,285
Accumulated elements of other comprehensive income		1,181			55
Treasury stock, at cost, 9,166,589 and 9,161,615 shares at December 31, 2009 and 2008, respectively		(627,684	)		(627,597	)
Total stockholders’ equity		50,277			22,609
Total liabilities and stockholders’ equity	$	423,195		$	446,192

See accompanying notes to consolidated financial statements.

32

THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

	Year ended December 31,
	2009		2008			2007
Revenues	$	442,906	$	558,352		$	532,716
Costs and expenses:
Cost of services		147,019		179,950			183,088
Member relations and marketing		126,023		161,670			150,032
General and administrative		59,415		76,120			71,984
Depreciation and amortization		22,991		21,631			15,573
Impairment loss		—		27,449			—
Costs associated with exit activities		11,518		—			—
Restructuring costs		8,568		8,006			—
Total costs and expenses		375,534		474,826			420,677
Income from operations		67,372		83,526			112,039
Other income (expense), net		6,246		(5,438	)		16,049
Income before provision for income taxes		73,618		78,088			128,088
Provision for income taxes		27,989		33,291			47,501
Net income	$	45,629	$	44,797		$	80,587
Earnings per share:
Basic	$	1.34	$	1.31		$	2.20
Diluted	$	1.33	$	1.30		$	2.17
Dividends per share	$	0.74	$	1.76		$	1.60
Weighted average shares outstanding:
Basic		34,111		34,205			36,666
Diluted		34,293		34,329			37,159

See accompanying notes to consolidated financial statements.

33

THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Year ended December 31,
	2009			2008			2007
Cash flows from operating activities:
Net income	$	45,629		$	44,797		$	80,587
Adjustments to reconcile net income to net cash flows provided by operating activities:
Deferred income taxes		(255	)		(22,064	)		(10,923	)
Amortization of marketable securities premiums (discounts), net		691			695			(449	)
Share-based compensation		10,751			12,525			22,764
Excess tax benefits from share-based compensation arrangements		—			—			(2,398	)
Depreciation and amortization		22,991			21,631			15,573
Impairment loss		—			27,449			—
Costs associated with exit activities		11,518			—			—
Gain on acquisition		(680	)		—			—
Changes in operating assets and liabilities:
Membership fees receivable, net		3,622			36,112			(6,688	)
Deferred incentive compensation		2,900			2,923			(2,384	)
Prepaid expenses and other current assets		(91	)		2,283			(645	)
Other non-current assets		(9,525	)		6,375			(5,578	)
Accounts payable and accrued liabilities		(18,533	)		11,053			(11,739	)
Accrued incentive compensation		2,387			(6,210	)		6,293
Deferred revenues		(47,512	)		(60,548	)		14,724
Other liabilities		4,681			8,211			10,904
Net cash flows provided by operating activities		28,574			85,232			110,041
Cash flows from investing activities:
Purchases of property and equipment, net		(7,052	)		(42,483	)		(34,532	)
Cost method investment		(1,000	)		(386	)		(3,829	)
Acquisition of businesses, net of cash acquired		5,173			(10,005	)		(61,593	)
Purchases of marketable securities		—			(12,489	)		(108,801	)
Sales and maturities of marketable securities		14,409			49,024			330,556
Net cash flows provided by (used in) investing activities		11,530			(16,339	)		121,801
Cash flows from financing activities:
Proceeds from the exercise of common stock options		—			100			691
Proceeds from issuance of common stock under the employee stock purchase plan		725			1,419			2,087
Excess tax benefits from share-based compensation arrangements		—			—			2,398
Purchase of treasury shares		(87	)		(41,842	)		(302,974	)
Payment of dividends		(25,196	)		(59,941	)		(57,826	)
Net cash flows used in financing activities		(24,558	)		(100,264	)		(355,624	)
Net increase (decrease) in cash and cash equivalents		15,546			(31,371	)		(123,782	)
Cash and cash equivalents, beginning of year		16,214			47,585			171,367
Cash and cash equivalents, end of year	$	31,760		$	16,214		$	47,585

See accompanying notes to consolidated financial statements.

34

THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Years ended December 31, 2007, 2008, and 2009

(In thousands, except share amounts)

												Accumulated
												elements of other									Annual
	Common stock					Additional			Retained			comprehensive			Treasury						comprehensive
	Shares			Amount		paid-in-capital			earnings			income (loss)			stock			Total			income
Balance at December 31, 2006		38,947,908		$	428	$	353,990		$	246,668		$	(440	)	$	(282,781	)	$	317,865		$	78,855
Issuance of common stock upon the exercise of common stock options and release of restricted stock units		280,510			3		685			—			—			—			688			—
Issuance of common stock under the employee stock purchase plan		33,677			—		2,087			—			—			—			2,087			—
Share-based compensation		—			—		22,764			—			—			—			22,764			—
Tax effect of share-based compensation		—			—		4,110			—			—			—			4,110			—
Purchase of treasury shares		(4,268,514	)		—		—			—			—			(302,974	)		(302,974	)		—
Change in unrealized gain on available-for-sale marketable securities, net of tax		—			—		—			—			1,312			—			1,312			1,312
Foreign currency hedge		—			—		—			—			(1,066	)		—			(1,066	)		(1,066	)
Payment of dividends		—			—		—			(57,826	)		—			—			(57,826	)		—
Net income		—			—		—			80,587			—			—			80,587			80,587
Balance at December 31, 2007		34,993,581		$	431	$	383,636		$	269,429		$	(194	)	$	(585,755	)	$	67,547		$	80,833
Issuance of common stock upon the exercise of common stock options and release of restricted stock units		46,125			1		100			—			—			—			101			—
Issuance of common stock under the employee stock purchase plan		39,730			—		1,419			—			—			—			1,419			—
Share-based compensation		—			—		12,525			—			—			—			12,525			—
Tax effect of share-based compensation		—			—		(2,246	)		—			—			—			(2,246	)
Purchase of treasury shares		(1,035,684	)		—		—			—			—			(41,842	)		(41,842	)		—
Change in unrealized gain on available-for-sale marketable securities, net of tax		—			—		—			—			208			—			208			208
Foreign currency hedge		—			—		—			—			(333	)		—			(333	)		(333	)
Cumulative translation adjustment		—			—		—			—			374			—			374			374
Payment of dividends		—			—		—			(59,941	)		—			—			(59,941	)		—
Net income		—			—		—			44,797			—			—			44,797			44,797
Balance at December 31, 2008		34,043,752		$	432	$	395,434		$	254,285		$	55		$	(627,597	)	$	22,609		$	45,046
Issuance of common stock upon release of restricted stock units		59,782			—		—			—			—			—			—			—
Issuance of common stock under the employee stock purchase plan		48,448			1		724			—			—			—			725			—
Share-based compensation		—			—		10,751			—			—			—			10,751			—
Tax effect of share-based compensation		—			—		(5,280	)		—			—			—			(5,280	)
Purchase of treasury shares		(4,974	)		—		—			—			—			(87	)		(87	)		—
Change in unrealized gains on available-for-sale marketable securities, net of tax		—			—		—			—			(195	)		—			(195	)		(195	)
Foreign currency hedge		—			—		—			—			1,341			—			1,341			1,341
Cumulative translation adjustment		—			—		—			—			(20	)		—			(20	)		(20	)
Payment of dividends		—			—		—			(25,196	)		—			—			(25,196	)		—
Net income		—			—		—			45,629			—			—			45,629			45,629
Balance at December 31, 2009		34,147,008		$	433	$	401,629		$	274,718		$	1,181		$	(627,684	)	$	50,277		$	46,755

See accompanying notes to consolidated financial statements.

35

THE CORPORATE EXECUTIVE BOARD COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of operations

The Corporate Executive Board Company (the “Company”) drives better decision making and superior outcomes among a global network of executives and business professionals. The Company provides its members with the authoritative and timely decision support they need to elevate company performance and excel in their careers. For an annual fee, members of each program and service have access to an integrated set of products and services, including best practices studies, executive education, customized analysis, proprietary databases and decision support tools. The Company also generates advertising and content-related revenues through its wholly-owned subsidiary, Toolbox.com, Inc. (“Toolbox.com”).

Note 2. Summary of significant accounting policies

Basis of presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of estimates in preparation of financial statements

The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These accounting principles require the Company to make certain estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions upon which it relies are reasonable based upon information available to the Company at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions may affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, the Company’s financial statements will be affected.

Foreign currency

The functional currency of substantially all of the Company’s wholly-owned foreign subsidiaries is the U.S. dollar. For these foreign subsidiaries, monetary balance sheet and related income statement accounts, representing claims receivable or payable in a fixed number of foreign currency units regardless of changes in exchange rates, are re-measured at the current exchange rate, with exchange gains and losses recorded in income. Non-monetary balance sheet items and related income statement accounts, which do not result in a fixed future cash inflow or outflow of foreign currency units, are re-measured at their historical exchange rates. In 2009 and 2008, the Company recorded foreign currency translation gains (losses) totaling $1.1 million and $(3.4) million, respectively, which are included in Other income (expense), net in the consolidated statements of income.

For one of the Company’s wholly owned subsidiaries, the functional currency is the local currency. For this subsidiary, the translation of its foreign currency into U.S. dollars is performed for assets and liabilities using current foreign currency exchange rates in effect at the balance sheet date and for revenue and expense accounts using average foreign currency exchange rates during the period. Capital accounts are translated at historical foreign currency exchange rates. Translation gains and losses are included in stockholders’ equity as a component of accumulated other comprehensive income (loss). Adjustments that arise from foreign currency exchange rate changes on transactions denominated in a currency other than the local currency are included in Other income (expense), net on the consolidated statements of income.

36

Cash and cash equivalents and marketable securities

The Company’s cash and cash equivalents balance is primarily comprised of cash held in demand deposit accounts at various financial institutions. Investments with maturities of more than three months of purchase are classified as marketable securities. At December 31, 2009 and 2008, the Company’s marketable securities consisted primarily of U.S. Treasury notes and Washington, D.C. tax exempt bonds. The Company classifies its marketable securities as available-for-sale, which are carried at fair value based on quoted market prices. The net unrealized gains and losses on available-for-sale marketable securities are excluded from net income and are included within accumulated elements of comprehensive income (loss). The specific identification method is used to compute the realized gains and losses on the sale of marketable securities. The Company may elect not to hold these marketable securities to maturity and may elect to sell these securities at any time.

Allowance for uncollectible revenue

The Company records an allowance for uncollectible revenue, as a reduction in revenues, based upon management’s analysis and estimates as to the collectability of membership fees receivable, which generally is not the result of a members’ ability to pay. Revenues under membership agreements are generally recognized ratably over the membership period, typically 12 months. Accordingly, the allowance for uncollectible revenue is recorded against the amount of revenues that have been recognized under the contracts that are deemed uncollectible. Membership fees receivable that have not been recognized as revenues are recorded in deferred revenues. As part of its analysis, the Company examines its collections history, the age of the receivables in question, any specific member collection issues that it has identified, general market conditions, member concentrations and current economic and industry trends. Membership fees receivable balances are not collateralized.

Property and equipment

Property and equipment consists of furniture, fixtures and equipment, leasehold improvements, capitalized computer software and Web site development costs. Property and equipment are stated at cost, less accumulated depreciation expense. Furniture, fixtures and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are depreciated using the straight-line method over the shorter of the estimated useful lives of the assets or the lease term. Capitalized software and Web site development costs are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Maintenance and repairs are charged to expense as incurred.

Goodwill

As the result of acquisitions, the Company records any excess purchase price over the net tangible and identifiable intangible assets acquired as goodwill. The Company tests goodwill for impairment annually on October 1, or whenever events or changes in circumstances indicate impairment may have occurred, by comparing its fair value to its carrying value. The Company has concluded that its reporting units used to assess goodwill impairment are the same as its operating segments. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, and a variety of other circumstances. If it is determined that impairment has occurred, the Company records a write-down of the carrying value and charges the impairment as an operating expense in the period the determination is made. Although the Company believes goodwill is appropriately stated in its consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance.

The determination of the fair value of individual reporting units is based upon the average of an income approach (discounted cash flow method) and a market approach (guideline company method and transaction method). These models require the Company to make various judgmental estimates and assumptions about sales, operating margins, growth rates, discount factors, and valuation multiples.

In 2008, the Company recorded an impairment loss of $27.4 million related to its Toolbox.com reporting unit ($22.9 million related to goodwill and $4.5 million related to intangible assets).

Intangible assets, net

Intangible assets, net consists primarily of technology and customer relationships. These assets are amortized on a straight-line basis over their estimated useful lives of 2 to 20 years. The gross carrying amount of intangible assets was $26.9 million and $26.3 million and accumulated amortization was $14.7 million and $9.0 million at December 31, 2009 and 2008, respectively. Amortization expense was $5.7 million, $5.8 million and $2.5 million in 2009, 2008, and 2007, respectively. In 2008, the Company recorded an impairment loss on intangible assets of $4.5 million. The estimated aggregate amortization expense for each of the succeeding five years ended 2010 through 2014 is $5.0 million, $2.5 million, $1.7 million, $0.6 million, and $0.5 million, respectively.

37

Recovery of long-lived assets

Long-lived assets, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for recoverability is made using an estimate of the undiscounted expected future cash flows and, if required, the impairment loss is measured as the amount that the carrying value of the asset exceeds the asset’s fair value if the asset is not recoverable.

In 2009, the Company incurred costs associated with exit activities and recorded a charge of $11.5 million primarily related to the impairment of leasehold improvements and furniture, fixtures and equipment at its Arlington, Virginia headquarters.

Fair value of financial instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, membership fees receivable, investments in variable insurance products for the Company’s deferred compensation plan, forward currency contracts, and accounts payable. The carrying value of the Company’s financial instruments approximates their fair value. The fair value of the Company’s financial instruments approximates their carrying value. In 2008, the Company recorded a $1.8 million other than temporary impairment loss for a cost method investment.

Revenue recognition

Revenue is recognized when (1) there is persuasive evidence of an arrangement, (2) the fee is fixed and determinable, (3) services have been rendered and payment has been contractually earned, and (4) collectability is reasonably assured. Revenues from membership subscriptions are recognized ratably over the term of the related subscription, which generally is 12 months. Membership fees generally are billable, and revenue recognition begins, when a member agrees to the terms of the membership and fees receivable and the related deferred revenue are recorded upon the commencement of the agreement or collection of fees, if earlier. Certain membership fees are billed on an installment basis. Members generally may request a refund of their membership fees, which is provided on a pro-rata basis relative to the length of the remaining membership term, under a service guarantee. Revenues from membership subscriptions were greater than 95% of total revenues in 2009, 2008, and 2007.

Advertising and content related revenues from Toolbox.com are recognized as the services are provided.

Deferred incentive compensation

Direct incentive compensation paid to the Company’s employees related to the negotiation of new and renewal memberships is deferred and amortized over the term of the related memberships.

Operating leases

The Company recognizes rent expense under operating leases on a straight-line basis over the non-cancelable term of the lease, including free-rent periods. Lease incentives, relating to allowances provided by landlords, are amortized over the term of the lease as a reduction of rent expense. The Company recognizes sublease income on a straight line basis over the term of the sublease, including free rent periods and escalations, as a reduction of rent expense. Costs associated with acquiring a subtenant, including broker commissions and tenant allowances, are amortized over the sublease term as a reduction of sublease income.

Share-based compensation

The Company has several share-based compensation plans. These plans provide for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units and incentive bonuses to employees and non-employee members of the Board of Directors. Share-based compensation cost is measured at the grant date of the share-based awards based on their fair values, and is recognized on a straight line basis as expense over the vesting periods of the awards, net of an estimated forfeiture rate.

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The grant date fair value of restricted stock units is measured by reducing the share price at that date by the present value of the dividends expected to be paid during the requisite vesting period. The grant date fair value of stock appreciation rights is calculated using a lattice valuation model. Determining the fair value of share-based awards is judgmental in nature and involves the use of significant estimates and assumptions, including the term of the share-based awards, risk-free interest rates over the vesting period, expected dividend rates, the price volatility of the Company’s stock and estimated forfeiture rates of the awards. Fair value and forfeiture rate estimates are based on assumptions the Company believes to be reasonable. Actual future results may differ from those estimates.

Income taxes

Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting basis and the tax basis of assets and liabilities. These deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when such amounts are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. A valuation allowance is provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized.

Concentration of credit risk and sources of revenues

Financial instruments, which potentially expose the Company to concentration of credit risk, consist primarily of membership fees receivable, cash and cash equivalents, and marketable securities. Concentration of credit risk with respect to membership fees receivable is limited due to the large number of members and their dispersion across many different industries and countries worldwide. However, the Company may be exposed to a declining membership base in periods of unforeseen market downturns, severe competition or international developments. The Company performs periodic evaluations of the membership base and related membership fees receivable and establishes allowances for potential credit losses.

The Company’s international operations subject it to risks related to currency exchange fluctuations. Prices for the Company’s products and services are primarily denominated in U.S. dollars, even when sold to members that are located outside the United States. Many of the costs associated with the Company’s operations located outside the United States are denominated in local currencies. The Company uses forward contracts, designated as cash flow hedging instruments, to protect against foreign currency exchange rate risks inherent with its cost reimbursement agreement with its UK subsidiary. A forward contract obligates the Company to exchange a predetermined amount of U.S. dollars to make an equivalent British Pound payment equal to the value of such exchange. The maximum length of time over which the Company hedges its exposure to the variability in future cash flows is 12 months.

The Company maintains a portfolio of cash and cash equivalents and marketable securities, which is designed for safety of principal and liquidity. Cash and cash equivalents is comprised of cash held in demand deposit accounts at various financial institutions. Marketable securities consist primarily of U.S. Treasury notes and Washington, D.C. tax exempt bonds. The Company performs periodic evaluations of the relative credit ratings related to cash and cash equivalents and marketable securities.

Accumulated elements of other comprehensive income

Accumulated elements of other comprehensive income included within stockholders’ equity consist of the following (in thousands):

	December 31,
	2009			2008
Unrealized gains, net of tax, for available-for-sale marketable securities	$	876		$	1,071
Unrealized losses, net of tax, for forward currency exchange contracts		(49	)		(1,390	)
Cumulative translation adjustment		354			374
Accumulated elements of other comprehensive income	$	1,181		$	55

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Earnings per share

Basic earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the number of weighted average common shares outstanding during the period increased by the dilutive effect of potential common shares outstanding during the period. The number of potential common shares outstanding has been determined in accordance with the treasury stock method to the extent they are dilutive. Common share equivalents consist of common shares issuable upon the exercise of outstanding share-based compensation awards. A reconciliation of basic to diluted weighted average common shares outstanding is as follows (in thousands):

	Year ended December 31,
	2009		2008		2007
Basic weighted average shares outstanding		34,111		34,205		36,666
Effect of dilutive shares outstanding		182		124		493
Diluted weighted average shares outstanding		34,293		34,329		37,159

In 2009, 2008, and 2007, 3.15 million, 3.46 million, and 1.35 million shares, respectively, related to share-based compensation awards have been excluded from the calculation of the effect of dilutive shares outstanding shown above because their impact would be anti-dilutive.

Note 3. Recent accounting pronouncements

Recently adopted

On April 1, 2009, the Company adopted new guidance that addressed the accounting for and disclosure requirements of events or transactions that occur after the balance sheet date, but before the financial statements are issued. In February 2010, the FASB issued amended guidance to (a) require an SEC filer to evaluate subsequent events through the date the financial statements are issued with the SEC, (b) add the definitions of an SEC filer and revised financial statements, (c) no longer require that an SEC filer disclose the date through which subsequent events have been reviewed, and (d) remove the definition of a public entity. The adoption of the new guidance did not have a material impact on the Company's financial position or results of operations.

On April 1, 2009, the Company adopted new guidance that provides additional guidelines for estimating fair value when there has been a significant decrease in the volume and level of activity for an asset or liability in relation to the normal market activity for the asset or liability (or similar assets or liabilities). In addition, the new guidance includes guidelines for identifying circumstances that indicate a transaction for the asset or liability is not orderly, in which case the entity shall place little, if any, weight on that transaction price as an indicator of fair value. The adoption of the new guidance did not impact the Company’s financial position or results of operations.

On April 1, 2009, the Company adopted new guidance that changes existing guidance for determining whether debt securities are other-than temporarily impaired and replaces the existing requirement that the entity’s management assert it has both the intent and ability to hold an impaired security until recovery with a requirement that management assert: (a) it does not have the intent to sell the security; and (b) it is more likely than not it will not be required to sell the security before recovery of its cost basis. Assuming these two criteria are met, the new guidance requires entities to separate an other-than-temporary impairment of a debt security into two components. The amount of the other-than temporary impairment related to a credit loss is recognized in earnings, and the amount of the other-than-temporary impairment related to other factors is recorded in other comprehensive income. The adoption of the new guidance did not impact the Company’s financial position or results of operations.

On January 1, 2009, the Company adopted new guidance requiring enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity’s financial position, financial performance, and cash flows. Among other things, the new guidance requires disclosure of the fair values of derivative instruments and associated gains and losses in a tabular format. Since this guidance requires only additional disclosures about the Company’s derivatives and hedging activities, the adoption did not impact the Company’s financial position or results of operations.

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On January 1, 2009, the Company adopted new guidance on business combinations that expands the scope of acquisition accounting to all transactions under which control of a business is obtained. This guidance requires an acquirer to recognize the assets acquired and liabilities assumed at the acquisition date fair values with limited exceptions. Additionally, the guidance requires that contingent consideration be recorded at fair value on the acquisition date and also requires transaction costs and costs to restructure the acquired company be expensed. On April 1, 2009, additional guidance was issued further amending the accounting for business combinations to require that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability would be recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability would be recognized. The adoption of the new guidance did not have a material impact on the Company’s financial position or results of operations.

Not yet adopted

In October 2009, the Financial Accounting Standards Board issued new guidance for revenue recognition with multiple deliverables that is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, although early adoption is permitted. This guidance eliminates the residual method under the current guidance and replaces it with the “relative selling price” method when allocating revenue in a multiple deliverable arrangement. The selling price for each deliverable shall be determined using vendor specific objective evidence of selling price, if it exists, otherwise third-party evidence of selling price shall be used. If neither exists for a deliverable, the vendor shall use its best estimate of the selling price for that deliverable. After adoption, this guidance will also require expanded qualitative and quantitative disclosures. The Company’s memberships are sold with multiple elements, and the Company is currently assessing the impact of adoption on its financial position and results of operations.

Note 4. Acquisitions

2009 Acquisition

In October 2009, the Company acquired 100% of the equity interest of The Tower Group, Inc. (“Tower Group”) to supplement its existing financial services products. As part of the acquisition, the Company agreed to assume certain obligations that might otherwise have been resolved prior to consummating the transaction. In return, the seller agreed to leave assets on the balance sheet to settle those obligations. As a result, the Company recorded a $0.7 million gain, which is included in Other income (expense), net.

2008 Acquisitions

In October and December 2008, the Company acquired 100% of the equity interests of two companies that supplement its existing product offerings. The total purchase price for both acquisitions was $10.0 million, net of cash acquired, which was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values. The Company allocated $5.6 million to intangible assets with a weighted average amortization period of eight years and $6.7 million was allocated to goodwill. The purchase price for one of the acquisitions may be increased if certain performance targets are met in each of the three annual periods ending December 31, 2009, 2010 and 2011.

2007 Acquisitions

On July 31, 2007, the Company acquired 100% of the equity interests of Information Technology Toolbox, Inc, now operating as Toolbox.com. Toolbox.com operates an online platform that connects a community of IT and other professionals who share practical, job-related information. This community provides free access to a worldwide audience of experienced, knowledgeable professionals and generates advertising and content related revenues that are recognized as the services are provided.

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The purchase price of Toolbox.com was $58.9, reduced by the assumption of $1.0 million in transition bonuses that were paid by the Company. Transactions costs were $0.5 million. The purchase price may be increased if certain financial thresholds are achieved during a 12-month period on or before December 31, 2010. The operating results after July 31, 2007 are included in the Company’s consolidated statements of income. Pro forma information disclosing the results of operations for the period from January 1, 2007 to July 31, 2007 are not presented as the effects were not material. The purchase price was allocated to the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values. The purchase price was assigned as follows (in thousands):

Net working capital	$	1,547
Property and equipment		600
Intangible assets		20,294
Goodwill (deductible for tax purposes)		35,916
Allocated purchase price	$	58,357

Intangible assets acquired primarily include advertising customer relationships, user database, and technology integral to content management and connection with users and are being amortized over assigned lives ranging from 3 to 20 years with a weighted average amortization period of 6 years.

In 2008, the Company recorded an impairment loss relating to the goodwill and intangible assets of Toolbox.com.

Note 5. Fair value measurements

Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There is a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company has segregated all assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below (in thousands):

	Fair Value
	as of		Fair Value Measurements Using
	December 31,		Fair Value Hierarchy
	2009		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	31,760	$	31,760	$	—	$	—
Available-for-sale marketable securities		44,450		44,450		—		—
Variable insurance products held in a Rabbi Trust		13,612		—		13,612		—
Financial liabilities
Forward currency exchange contracts	$	173	$	—	$	173	$	—

Certain assets, such as goodwill, intangible assets, and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is impairment). No fair value adjustments or material fair value measurements were required for non-financial assets or liabilities in 2009.

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Note 6. Marketable securities

The aggregate fair value, amortized cost, gross unrealized gains and gross unrealized losses on available-for-sale marketable securities are as follows (in thousands):

	December 31, 2009
					Gross		Gross
	Fair		Amortized		Unrealized		Unrealized
	Value		Cost		Gains		Losses
U.S. Treasury notes	$	12,591	$	12,542	$	49	$	—
Washington D.C. tax exempt bonds		31,859		30,462		1,397		—
Total marketable securities	$	44,450	$	43,004	$	1,446	$	—

	December 31, 2008
					Gross		Gross
	Fair		Amortized		Unrealized		Unrealized
	Value		Cost		Gains		Losses
U.S. Treasury notes	$	25,845	$	25,365	$	480	$	—
Washington D.C. tax exempt bonds		34,044		32,739		1,383		78
Total marketable securities	$	59,889	$	58,104	$	1,863	$	78

The following table summarizes marketable securities maturities (in thousands):

	December 31, 2009
	Fair		Amortized
	Value		Cost
Less than one year	$	18,666	$	18,521
Matures in 1 to 5 years		23,779		22,483
Matures in 6 to 10 years		2,005		2,000
Total marketable securities	$	44,450	$	43,004

In 2008 and 2007, sales of marketable securities resulted in a net realized investment gain of $73,000 and $142,000, respectively, which is included in Other income (expense), net. The Company did not sell any marketable securities in 2009.

Note 7. Membership fees receivable

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

	December 31,
	2009			2008
Billed	$	99,273		$	103,478
Unbilled		28,929			28,460
		128,202			131,938
Allowance for uncollectible revenue		(2,486	)		(4,931	)
Membership fees receivable, net	$	125,716		$	127,007

Note 8. Property and equipment

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

	December 31,
	2009			2008
Furniture, fixtures, and equipment	$	42,671		$	41,651
Leasehold improvements		77,120			83,250
Computer software and Web site development costs		20,289			17,185
		140,080			142,086
Accumulated depreciation		(50,618	)		(32,953	)
Property and equipment, net	$	89,462		$	109,133

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Depreciation expense was $17.3 million, $15.8 million, and $13.1 million in 2009, 2008, and 2007, respectively.

Note 9. Goodwill and intangible assets

The changes in the carrying amount of goodwill are as follows (in thousands):

	December 31,
	2009		2008
Beginning of year	$	26,392	$	42,626
Goodwill acquired		737		6,712
Impairment loss		—		(22,946	)
Goodwill	$	27,129	$	26,392

In the fourth quarter of 2008, based on a combination of factors (including the current economic environment and the near term outlook for advertising related revenues), the Company concluded that goodwill and intangible asset amounts previously recorded for the 2007 acquisition of Information Technology Toolbox, Inc. were impaired. The Company utilized the income approach (discounted cash flow method) and the market approach (guideline company method and the transaction method) in the determination of the fair value of Toolbox.com. The total impairment loss recognized in 2008 was $27.4 million ($22.9 million related to goodwill and $4.5 million related to intangible assets).

Note 10. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consists of the following (in thousands):

	December 31,
	2009		2008
Accounts payable	$	7,411	$	6,658
Advanced membership payments received		10,995		15,402
Other accrued liabilities		30,358		44,118
Accounts payable and accrued liabilities	$	48,764	$	66,178

Note 11. Other liabilities

Other liabilities consist of the following (in thousands):

	December 31,
	2009		2008
Deferred compensation	$	9,890	$	7,256
Lease incentives		33,588		35,558
Deferred rent benefit — long term		19,459		17,148
Other		10,322		8,045
Total other liabilities	$	73,259	$	68,007

Note 12. Derivative instruments and hedging

The Company’s international operations are subject to risks related to currency exchange fluctuations. Prices for the Company’s products and services are denominated primarily in U.S. dollars, including products and services sold to members that are located outside the United States. Many of the costs associated with the Company’s operations located outside the United States are denominated in local currencies. As a consequence, increases in local currencies against the U.S. dollar in countries where the Company has foreign operations would result in higher effective operating costs and, potentially, reduced earnings. The Company uses forward contracts, designated as cash flow hedging instruments, to protect against foreign currency exchange rate risks inherent with its cost reimbursement agreements with its United Kingdom subsidiary. A forward contract obligates the Company to exchange a predetermined amount of U.S. dollars to make equivalent Pound Sterling (“GBP”) payments equal to the value of such exchanges.

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The Company formally documents all relationships between hedging instruments and hedged items as well as its risk-management objective and strategy for undertaking hedge transactions. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows is 12 months. The forward contracts are recognized on the consolidated balance sheets at fair value. Changes in the fair value measurements of the derivative instruments are reflected as adjustments to other comprehensive income (“OCI”) and/or current earnings. The notional amount of outstanding forward contracts was $10.4 million at December 31, 2009.

The fair values of all derivative instruments, which are designated as hedging instruments, on the Company’s consolidated balance sheets are as follows (in thousands):

	December 31,
Balance Sheet Location	2009		2008
Liability
Accounts payable and accrued liabilities	$	173	$	4,057

The pre-tax effect of derivative instruments on the Company’s condensed consolidated statements of income is shown in the table below (in thousands):

					Amount of Gain (Loss)
Location of Loss Reclassified from	Amount of Gain (Loss) Reclassified				Recognized in OCI on
Accumulated OCI into Income	from Accumulated OCI into Income			Derivatives in cash flow	Derivative
(Effective portion)	(Effective portion)			hedging relationships	(Effective portion)
	Year ended December 31, 2009				Year ended December 31, 2009
Cost of services	$	(1,052	)	Forward currency	$	168
Member relations and marketing		(780	)	contracts
General & Administrative		(401	)
Total	$	(2,233	)

The ineffective portion of the cash flow hedges in 2009 was immaterial.

Note 13. Stockholders’ equity and share-based compensation

Share-based compensation

Under share-based compensation plans, the Company may grant certain employees, directors and consultants options to purchase common stock, stock appreciation rights and restricted stock units. Options are rights to purchase common stock of the Company at the fair market value on the date of grant. Stock appreciation rights are equity settled share-based compensation arrangements whereby the number of shares of the Company’s common stock that will ultimately be issued is based upon the appreciation of the Company’s common stock and the number of awards granted to an individual. Restricted stock units are equity settled share-based compensation arrangements of a number of shares of the Company’s common stock. Holders of options and stock appreciation rights do not participate in dividends until after the exercise of the award. Restricted stock unit holders do not participate in dividends nor do they have voting rights until the restrictions lapse.

Forfeitures are estimated at the time of grant and adjusted, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The forfeiture rate is based on historical experience. Share-based compensation expense is recognized on a straight line basis, net of an estimated forfeiture rate, for only those shares expected to vest over the requisite service period of the award, which is generally the vesting term of four years. When estimating forfeitures, the Company considers voluntary termination behaviors as well as trends of actual forfeitures. In 2008, the Company increased its estimated forfeiture rate from 3% to 14% and the cumulative effect of the change in estimate was a reduction in compensation expense of $2.9 million. In 2009, the Company increased its estimated forfeiture rate to 16%.

The Company recognized total share-based compensation costs of $10.8 million, $12.5 million and $22.8 million in 2009, 2008, and 2007, respectively. These amounts are allocated to Cost of Services, Member relations and marketing, and General and administrative expenses in the consolidated statements of income. The total income tax benefit recognized in the consolidated statements of income for share-based compensation arrangements was $4.3 million, $5.0 million and $8.5 million in 2009, 2008, and 2007, respectively. At December 31, 2009, $12.1 million of total estimated unrecognized share-based compensation cost is expected to be recognized over a weighted-average period of approximately 2 years.

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Equity incentive plans

The Company issues awards under the 2004 Stock Incentive Plan, as amended, (the “2004 Plan’’) and the Directors’ Stock Option Plan, adopted in 1998 (the “Directors’ Plan’’) (together “the Plans’’). All regular employees, directors and consultants are eligible to receive equity awards. The Plans provide for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units and incentive bonuses. The 2004 Plan provides for the issuance of up to 6.3 million shares of common stock, plus any shares subject to outstanding awards under prior equity compensation plans up to an aggregate maximum of 9.4 million shares. The terms of the awards granted under the Plans, including vesting, forfeiture and post termination exercisability are set by the plan administrator, subject to certain restrictions. The contractual term of equity awards ranges from 4 to 10 years. The Company had 3.0 million shares available for issuance under the Plans at December 31, 2009.

Restricted stock units

The following table summarizes the changes in restricted stock units:

	2009					2008					2007
	Number			Weighted Average		Number			Weighted Average		Number			Weighted Average
	of Restricted			Grant Date Fair		of Restricted			Grant Date Fair		of Restricted			Grant Date Fair
	Stock Units			Value		Stock Units			Value		Stock Units			Value
Nonvested, beginning of year		133,196		$	60.18		101,268		$	84.03		60,123		$	94.78
Granted		665,059			10.72		70,235			36.37		73,529			74.07
Forfeited		(81,940	)		19.42		(13,045	)		68.56		(17,499	)		83.21
Vested		(60,523	)		59.60		(25,262	)		85.26		(14,885	)		94.78
Nonvested, end of year		655,792		$	15.17		133,196		$	60.18		101,268		$	84.03

Stock appreciation rights

The following assumptions were used to value grants of stock appreciation rights for each respective period:

	Year ended December 31,
	2008			2007
Risk-free interest rate		4.31	%		4.47	%
Dividend yield		3.86	%		2.01	%
Expected life of option (in years)		5.1			4.8
Expected volatility (calculated historically)		35	%		30	%
Weighted-average fair value of share-based compensation awards granted	$	7.37		$	17.85

The following table summarizes the changes in stock appreciation rights:

	2009					2008					2007
	Number of					Number of					Number of
	Stock			Weighted		Stock			Weighted		Stock			Weighted
	Appreciation			Average		Appreciation			Average		Appreciation			Average
	Rights			Exercise Price		Rights			Exercise Price		Rights			Exercise Price
Outstanding, beginning of year		1,848,263		$	66.16		1,293,319		$	83.82		614,145		$	97.36
Granted		—			—		816,507			40.95		840,486			74.48
Forfeited		(496,565	)		70.81		(261,563	)		74.80		(161,312	)		86.67
Exercised		—			—		—			—		—			—
Outstanding, end of year		1,351,698		$	64.51		1,848,263		$	66.16		1,293,319		$	83.82
Vested or expected to vest, end of year		1,089,856		$	65.39		1,270,404		$	69.22		1,171,169		$	84.13
Exercisable, end of year		604,176		$	74.04		383,237		$	87.38		134,292		$	97.52

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The per share weighted average grant date fair value of stock appreciation rights granted was $40.95 and $74.48 in 2008 and 2007, respectively. At December 31, 2009, the aggregate intrinsic value of stock appreciation rights outstanding and exercisable was $0.

The following table summarizes the characteristics of stock appreciation rights at December 31, 2009:

	Stock Appreciation Rights Outstanding						Stock Appreciation Rights Exercisable
					Weighted						Weighted
			Weighted		Average				Weighted		Average
			Average		Remaining				Average		Remaining
Range of Exercise			Exercise		Contractual				Exercise		Contractual
Prices	Shares		Price		Life-Years		Shares		Price		Life-Years
$25.99 – $45.74		587,381	$	41.06		5.17		149,381	$	41.00		5.09
66.60 – 76.00		476,302		73.43		4.31		238,780		73.44		4.30
97.56 – 97.56		288,015		97.56		3.20		216,015		97.56		3.20
$25.99 – $97.56		1,351,698	$	64.51		4.45		604,176	$	74.04		4.10

Stock appreciation rights are not exercisable unless the market value of Company stock is greater than the exercise price.

Common stock options

The following table summarizes the changes in common stock options:

	2009					2008					2007
				Weighted					Weighted					Weighted
	Number			Average		Number			Average		Number			Average
	of Options			Exercise Price		of Options			Exercise Price		of Options			Exercise Price
Outstanding, beginning of year		1,803,027		$	52.75		2,198,953		$	53.28		2,942,132		$	50.63
Granted		—			—		—			—		—			—
Forfeited		(600,310	)		52.19		(326,869	)		61.14		(149,250	)		56.92
Exercised		—			—		(69,057	)		29.74		(593,929	)		39.20
Outstanding, end of year		1,202,717		$	53.03		1,803,027		$	52.75		2,198,953		$	53.28
Vested or expected to vest, end of year		1,202,717		$	53.03		1,701,917		$	51.97		2,151,328		$	53.13
Exercisable, end of year		1,202,717		$	53.03		1,580,902		$	50.89		1,338,954		$	48.66

At December 31, 2009, the aggregate intrinsic value (the difference between the market price and the exercise price) of common stock options outstanding and exercisable was $0. The total intrinsic value of common stock options exercised in 2008 and 2007 was $0.9 million and $17.4 million respectively.

The following table summarizes the characteristics of options at December 31, 2009:

	Options Outstanding and Exercisable
					Weighted
			Weighted		Average
			Average		Remaining
Range of Exercise			Exercise		Contractual
Prices	Shares		Price		Life-Years
$21.19 – $36.81		226,976	$	31.76		2.69
45.10 – 64.30		415,865		46.30		1.67
64.88 – 89.70		559,876		66.66		2.24
$21.19 – $89.70		1,202,717	$	53.03		2.13

Share Repurchases

Repurchases may continue to be made from time to time in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. The Company funds its share repurchases with cash on hand and cash generated from operations. In 2009, 2008, and 2007, the Company repurchased approximately 5,000, 1.0 million and 4.3 million shares, respectively, of its common stock at a total cost of $0.1 million, $41.8 million and $303.0 million, respectively. The remaining share repurchase authorization was $22.3 million at December 31, 2009.

47

Dividends

In 2009, the Company’s Board of Directors declared quarterly cash dividends of $0.44 per share for the first quarter and $0.10 for each of the second, third and fourth quarters of 2009. The Company funds its dividend payments with cash on hand and cash generated from operations.

Preferred stock

At December 31, 2009 and 2008, the Company had 5.0 million shares of preferred stock authorized with a par value of $0.01 per share. No shares were issued and outstanding at December 31, 2009 and 2008.

Note 14. Costs associated with exit activities

In June 2009, the Company ceased using and entered into a sublease agreement for a portion of its headquarters facility. Also in the three months ended June 30, 2009, the Company ceased using a portion of two other facilities. The Company has sublet a portion of one facility and is attempting to sublease a portion of the other facility. The Company incurred a total pre-tax charge of $11.5 million in 2009 primarily related to the impairment of leasehold improvements and furniture, fixtures and equipment.

Note 15. Restructuring costs

As part of the Company’s plans to integrate Tower Group, the Company initiated a workforce reduction plan (“Tower Group Plan”) whereby approximately ten Tower Group employees were offered severance agreements subsequent to the acquisition. Restructuring costs associated with this action were $1.2 million, consisting of severance and related termination benefits. The Company does not expect to incur any significant additional costs under this plan.

In the second quarter of 2009, the Company committed to a separation plan (the “2009 Plan”), initially offering additional benefits for employees electing to voluntarily separate, for which approximately 155 employees submitted resignations effective beginning July 24, 2009. The 2009 Plan, which has concluded, is part of the Company’s continuing efforts (as previously reported) to align its expenses more closely with its outlook and to accelerate the placement of resources in areas that management believes have a greater potential for future growth. The 2009 Plan was not offered to executive officers, critical staff, and most sales staff of the Company. Pre-tax restructuring charges for the 2009 Plan were originally estimated to be approximately $7.8 million, most of which was associated with severance and related termination benefits.

In the fourth quarter of 2008, the Company committed to a plan (the “2008 Plan”) of workforce reductions to restructure its business. The restructuring included a reduction of approximately 15% of the Company’s workforce at that time; a realignment of products and services, including consolidation or retirement of certain products, to focus on five corporate decision centers and industries we serve; and the implementation of a new, integrated approach to prospect and member account management. Pre-tax restructuring charges for the 2008 Plan were originally estimated to be approximately $9.3 million, most of which was associated with severance and related termination benefits. The Company recorded a pre-tax restructuring charge of $8.0 million in the fourth quarter of 2008.

The Company does not expect to incur any significant additional costs under the 2008 Plan or 2009 Plan.

Changes to the restructuring liability are as follows (in thousands):

							Tower
	2008			2009			Group
	Plan			Plan			Plan
Balance at December 31, 2007	$	—		$	—		$	—
Costs incurred		8,006			—			—
Cash payments		(399	)		—			—
Balance at December 31, 2008		7,607			—			—
Costs incurred		1,253			7,808			1,162
Cash payments		(7,089	)		(5,292	)		(53	)
Change in estimate		(1,239	)		(44	)		—
Balance at December 31, 2009	$	532		$	2,472		$	1,109

48

Note 16. Income taxes

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

	Year ended December 31,
	2009			2008			2007
Current tax expense
Federal	$	20,914		$	42,607		$	54,328
State and local		6,035			9,639			1,547
Foreign		1,295			1,865			1,476
		28,244			54,111			57,351
Deferred tax (benefit) expense
Federal		1,077			(19,535	)		(10,552	)
State and local		(949	)		(841	)		919
Foreign		(383	)		(444	)		(217	)
		(255	)		(20,820	)		(9,850	)
Provision for income taxes	$	27,989		$	33,291		$	47,501

In 2009, 2008 and 2007, the Company made cash payments for income taxes of $32.7 million, $55.2 million and $60.8 million, respectively.

The components of Income before provision for income taxes were as follows:

	Year ended December 31,
	2009		2008		2007
U.S. sources	$	69,600	$	74,002	$	124,288
Non-U.S. sources		4,018		4,086		3,800
Total	$	73,618	$	78,088	$	128,088

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

	Year ended December 31,
	2009			2008			2007
Statutory U.S. federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		4.9			5.3			3.3
Foreign income tax		(0.3	)		(0.4	)		(0.1	)
Foreign currency loss		(0.6	)		1.7			—
Permanent differences and credits, net		(1.0	)		1.0			(1.1	)
Effective tax rate		38.0	%		42.6	%		37.1	%

49

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities consist of the following (in thousands):

	December 31,
	2009			2008
Deferred tax assets
Share-based compensation	$	14,529		$	16,551
Goodwill and intangibles		11,498			11,305
Accrued incentive compensation		10,070			9,250
Accruals and reserves		1,729			5,273
Net operating loss and tax credit carry forwards		8,189			7,612
Depreciation		—			2,480
Deferred compensation plan		3,893			4,244
Deferred revenues		525			2,411
Operating leases and lease incentives		13,671			9,639
Other		1,614			2,256
Total deferred tax assets		65,718			71,021
Valuation allowance		(9,091	)		(8,211	)
Total deferred tax assets, net of valuation allowance		56,627			62,810
Deferred tax liabilities
Deferred incentive compensation		3,882			5,016
Depreciation		2,846			—
Other		3,033			3,908
Total deferred tax liabilities		9,761			8,924
Deferred tax assets, net	$	46,866		$	53,886

In estimating future tax consequences, accounting guidance generally considers all expected future events in the determination and valuation of deferred tax assets and liabilities. The valuation allowance at December 31, 2009 and 2008 was primarily related to state tax credit carryforwards from the District of Columbia described below and state net operating loss carryforwards. The valuation allowance at December 31, 2009 also included also a capital loss carryforward. The net change in the valuation allowance was an increase of $0.9 million and $0.3 million in 2009 and 2008, respectively.

The Company generated net operating loss carryforwards for state income tax purposes of $0.2 million, $0.2 million and $0.1 million in 2009, 2008 and 2007, respectively, which are available to offset future state taxable income through years 2027 through 2029. The Company recorded a $0.2 million, $0.2 million and $0.1 million valuation allowance related to these net operating loss carryforwards at December 31, 2009, 2008 and 2007, respectively.

Upon moving its headquarters to Arlington, Virginia, the Company became eligible to receive the Major Business Facilities Job Tax Credit (“JTC”). The JTC was measured in 2009 based on the number of full-time jobs that were created or relocated to Virginia. The amount of the credit measured in 2009 was $1.0 million. This credit can be applied against Virginia state income taxes in 2009 and 2010. Virginia code requires this credit to be recaptured and refunded to the extent average levels of employment decrease during the five years following the measurement of the credit. The Company has estimated $0.3 million of this credit will be recaptured and a valuation allowance has been recorded in this amount against the tax credit carryforward.

The Office of Tax and Revenue of the Government of the District of Columbia (the “Office of Tax and Revenue”) adopted regulations in accordance with the New E-Conomy Transformation Act of 2000 (the “Act”) that modify the income and franchise tax, sales and use tax and personal property tax regulations, effective April 2001. Specifically, the regulations provide certain credits, exemptions and other benefits to a Qualified High Technology Company (“QHTC”). In 2003, the Company received notification from the Office of Tax and Revenue that its certification as a QHTC under the Act had been accepted. As a QHTC, the Company’s Washington, D.C. statutory income tax rate was 0.0% through 2005 and 6.0% thereafter. The Company was also eligible for certain Washington, D.C. income tax credits and other benefits. The Company has Washington D.C. tax credit carry forwards resulting in a deferred tax asset of $7.4 million at December 31, 2009 and 2008, respectively. These credits expire in years 2011 through 2017. The Company recorded a $7.4 million valuation allowance related to these credit carryforwards at December 31, 2009 and 2008, respectively.

Undistributed earnings of the Company’s foreign subsidiaries amounted to $15.2 million, $15.1 million and $10.3 million at December 31, 2009, 2008 and 2007, respectively. Those earnings are considered to be indefinitely reinvested; accordingly, no provision for U.S. federal and state income taxes has been provided thereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable due to the complexities associated with its hypothetical calculation; however, unrecognized foreign tax credit carry forwards would be available to reduce some portion of the U.S. liability.

50

A reconciliation of the beginning and ending unrecognized tax benefit is as follows (in thousands):

	December 31,
	2009			2008
Balance at beginning of the year	$	427		$	900
Additions based on tax positions related to the current year		32			—
Additions for tax positions of prior years		177			—
Reductions for tax positions of prior years		—			(288	)
Reductions for lapse of statute of limitations		(44	)		(185	)
Settlements		—			—
Balance at end of the year	$	592		$	427

The Company files income tax returns in U.S. federal, state, and foreign jurisdictions. With few exceptions, the Company is no longer subject to tax examinations in major tax jurisdictions for periods prior to 2006. All of the Company’s unrecognized tax benefit liability would affect the Company’s effective tax rate if recognized. Interest and penalty expense recognized related to uncertain tax positions amounted to $0.2 million, $0.1 million, and $0.1 million in 2009, 2008 and 2007, respectively. Total accrued interest and penalties at December 31, 2009 and December 31, 2008 was $0.5 million and $0.3 million respectively, and was included in accrued expenses.

Note 17. Employee benefit plans

Defined contribution 401(k) plan

The Company sponsors 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 21 are eligible to participate. Effective January 1, 2007, the Company adopted amendments to the Plan in which the Company provides a discretionary contribution equal to 50% of an employee’s contribution up to a maximum of 6% of base salary. The amendments to the Plan additionally provide that the Company’s matching contribution on behalf of an employee is subject to a four-year vesting schedule of 25% per year beginning one year from the employee’s date of hire, and that an employee must be employed by the Company on the last day of a Plan year in order to vest in the Company’s contribution for that year. Company contributions to the Plan were $3.1 million, $4.0 million and $3.1 million in 2009, 2008, and 2007, respectively.

Employee stock purchase plan

The Company sponsors an employee stock purchase plan (the “ESPP”) for all eligible employees. Under the ESPP, employees authorize payroll deductions from 1% to 10% of their eligible compensation to purchase shares of the Company’s common stock. The total shares of the Company’s common stock authorized for issuance under the ESPP is 1,050,000. Under the plan, shares of the Company’s common stock may be purchased over an offering period, typically three months, at 85% of the lower of the fair market value on the first day of the applicable offering period or on the last day of the three month purchase period. In 2009, 2008, and 2007, the Company issued 48,448 shares, 39,730 shares and 33,677 shares of common stock, respectively, under the ESPP. At December 31, 2009, 0.8 million shares were available for issuance.

Deferred compensation plan

The Company has a Deferred Compensation Plan (the “Deferred Compensation Plan”) for certain employees and members of the Board of Directors to provide an opportunity to defer compensation on a pre-tax basis. The Deferred Compensation Plan provides for deferred amounts to be credited with investment returns based upon investment options selected by participants from alternatives designated from time to time by the plan administrative committee. Investment earnings associated with the Deferred Compensation Plan’s assets are included in Other income (expenses), net while changes in individual participant account balances are recorded as compensation expense in the consolidated statements of income. The Plan also allows the Company to make discretionary contributions at any time based on individual or overall Company performance, which may be subject to a different vesting schedule than elective deferrals, and provides that the Company will make up any 401(k) plan match that is not credited to the participant’s 401(k) account due to his or her participation in the Plan. The Company has established a rabbi trust to hold assets utilized by the Company to pay benefits under the Plan. The Company did not make any discretionary contributions to the Plan in 2009, 2008, and 2007.

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Note 18. Commitments and contingencies

Operating leases

The Company leases office facilities that expire on various dates through 2028. Generally, the leases carry renewal provisions and rental escalations and require the Company to pay for executory costs such as taxes and insurance. In June 2009, the Company entered into a sublease with a third party for approximately 172,000 square feet of the Company’s headquarters. The term of the sublease is from October 2009 through September 2021 with a one-time expansion right for an additional floor in the fifth year and a renewal option to extend the sublease for the remainder of the Company’s existing lease through January 2028. Rent expense, net of sublease income, was $31.1 million, $35.2 million, and $21.9 million in 2009, 2008 and 2007, respectively. The Company’s future minimum rental payments under non-cancelable operating leases and future minimum receipts under subleases, excluding executory costs, are scheduled as follows:

	Payments due and sublease receipts by period (in thousands) at December 31, 2009
	Total		YE 2010		YE 2011		YE 2012		YE 2013		YE 2014		Thereafter
Operating lease obligations	$	630,014	$	34,674	$	34,468	$	34,509	$	34,385	$	34,126	$	457,852
Subleases receipts		104,422		9,218		9,146		9,157		9,394		8,005		59,502
Total net lease obligations		525,592		25,456		25,322		25,352		24,991		26,121		398,350

The Company completed the tenant build-out of its headquarters in 2008. The total cost of the build-out was approximately $100 million, of which approximately $40 million was paid by the landlord through lease incentives. In 2007, approximately $32 million of the lease incentives were paid directly to vendors and was excluded from the statement of cash flows as a non-cash investing activity. The remaining $8 million of lease incentives was received by the Company in September 2008 and was included in cash flows from operations. The lease incentives are being amortized over the term of the lease (through 2028) as a reduction of rent expense.

Other

At December 31, 2009, the Company had outstanding letters of credit totaling $6.4 million to provide security deposits for certain office space leases. The letters of credit expire in the period from January 2010 through September 2010, but will automatically extend for another year from their expiration dates unless the Company terminates them. To date, no amounts have been drawn on these agreements. In 2008, the Company terminated letters of credit relating to the security deposits for the Washington, D.C. office space leases when the leases expired. Under the terms of the headquarter’s lease agreement, the Company committed to providing the landlord a security deposit totaling $50 million and pledged $50 million of long-term marketable securities to the landlord as collateral for this obligation. In August 2008, the Company replaced the $50 million pledge of long-term marketable securities with a letter of credit for $4.5 million.

From time to time, the Company is subject to litigation related to normal business operations. The Company vigorously defends itself in litigation and is not currently a party to, and the Company’s property is not subject to, any legal proceedings likely to materially affect the Company’s financial results.

The Company continues to evaluate potential tax exposure relating to sales and use, payroll, income and property tax laws, and regulations for various states in which the Company sells or supports its goods and services. Accruals for potential contingencies are recorded by the Company when it is probable that a liability has been incurred, and the liability can be reasonably estimated. As additional information becomes available, changes in the estimates of the liability are reported in the period that those changes occur. The Company accrued a liability of $3.9 million and $3.7 million at December 31, 2009 and 2008, respectively, relating to certain sales and use tax regulations for states in which the Company sells or supports its goods and services.

Note 19. Segments and geographic areas

Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision maker of an enterprise. Operating results for Toolbox.com and other operating segments do not meet the quantitative thresholds for separate disclosure; thus, the Company has one reportable segment.

52

The Company has net sales and long-lived assets, consisting of property, plant and equipment, goodwill and intangible assets, net of accumulated depreciation and amortization, in the following geographic areas (in thousands):

	United States		Europe		Other countries		Total
2009
Revenues	$	293,994	$	77,573	$	71,339	$	442,906
Long-lived assets		112,932		5,843		10,062		128,837
2008
Revenues		382,705		98,828		76,819		558,352
Long-lived assets		136,280		14,730		1,781		152,791
2007
Revenues		380,544		86,595		65,577		532,716
Long-lived assets		149,969		6,272		432		156,673

Note 20. Quarterly financial data (unaudited)

Unaudited summarized quarterly financial data is as follows (in thousands, except per-share amounts):

	2009 Quarter Ended
	March 31		June 30		September 30		December 31
Revenues	$	117,440	$	110,695	$	106,819	$	107,952
Costs associated with exit activities		—		11,518		—		—
Restructuring costs		944		4,244		2,327		1,053
Total costs and expenses		95,740		106,596		84,900		88,298
Income from operations		21,700		4,099		21,919		19,654
Income before provision for income taxes		21,790		8,243		22,746		20,839
Net income	$	13,072	$	4,946	$	14,177	$	13,434
Earnings per share:
Basic	$	0.38	$	0.15	$	0.42	$	0.39
Diluted	$	0.38	$	0.14	$	0.41	$	0.39

	2008 Quarter Ended
	March 31		June 30		September 30		December 31
Revenues	$	138,023	$	141,173	$	142,409	$	136,747
Impairment loss		—		—		—		27,449
Restructuring costs		—		—		—		8,006
Total costs and expenses		114,004		115,763		106,618		138,441
Income (loss) from operations		24,019		25,410		35,791		(1,694	)
Income (loss) before provision for income taxes		24,717		26,351		31,902		(4,882	)
Net income (loss)	$	14,830	$	15,811	$	20,002	$	(5,846	)
Earnings (loss) per share:
Basic	$	0.43	$	0.46	$	0.59	$	(0.17	)
Diluted	$	0.42	$	0.46	$	0.59	$	(0.17	)

Note 21. Subsequent events

Dividends

In February 2010, the Board of Directors declared a quarterly cash dividend of $0.11 per share. The dividend is payable on March 31, 2010 to stockholders of record at the close of business on March 15, 2010. The Company funds its dividend payments with cash on hand and cash generated from operations.

53

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as amended, as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recently completed fiscal quarter. Based on that evaluation, our principal executive officer and principal financial officer concluded that there has not been any change in our internal control over financial reporting during that quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

See Report of Management’s Assessment of Internal Control Over Financial Reporting in Item 8.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following information is included in the Company’s Proxy Statement related to its 2010 Annual Meeting of Stockholders to be filed within 120 days after the Company’s fiscal year end of December 31, 2009 (the “Proxy Statement”) and is incorporated herein by reference:

• Information regarding directors of the Company who are standing for reelection and any persons nominated to become directors of the Company is set forth under “Election of Directors.”

• Information regarding executive officers of the Company is set forth under “Directors and Executive Officers.”

• Information regarding the Company’s Audit Committee and designated audit committee financial expert is set forth under “Board of Directors Meeting and Committees.”

• Information regarding the recommendation of nominees to the Board of Directors is set forth under “Corporate Governance Matters.”

• Information on the Company’s code of business conduct and ethics for directors, officers and employees, also known as the “Code of Conduct for Officers, Directors and Employees,” and on the Company’s corporate governance guidelines is set forth under “Corporate Governance Matters.”

• Information regarding Section 16(a) beneficial ownership reporting compliance is set forth under “Section 16(a) Beneficial Ownership Reporting Compliance.”

54

Item 11. Executive Compensation.

The following information is included in the Proxy Statement and is incorporated herein by reference:

• Information regarding the Company’s compensation of its named executive officers is set forth under “Executive Compensation.”

• Information regarding the Company’s compensation of its directors is set forth under “Compensation of the Board.”

• The report of the Company’s Compensation Committee is set forth under “Compensation Committee Report.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following information is included in the Proxy Statement and is incorporated herein by reference:

• Information regarding security ownership of certain beneficial owners, directors and executive officers is set forth under “Security Ownership of Certain Beneficial Owners and Management.”

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information about the securities authorized for issuance under our equity compensation plans at December 31, 2009.

	(A)		(B)		(C)
	Number Of
	Securities To Be				Number of Securities
	Issued Upon				Remaining Available
	Exercise Of		Weighted-Average		For Future Issuances under
	Outstanding		Exercise Price Of		Equity Compensation Plans
	Options, Warrants		Outstanding Options,		(Excluding Securities
Plan Category	And Rights		Warrants And Rights		Reflected In Column (A))
Equity compensation plans approved by stockholders		2,960,857	$	61.10		2,998,838
Equity compensation plans not approved by stockholders (1)		249,350		40.69		—
Total		3,210,207	$	59.10		2,998,838

(1) In March 2002, the Company adopted the 2002 Non-Executive Stock Incentive Plan, as amended (the “2002 Plan”), which was not approved by stockholders. In December 2006, the Company further amended the 2002 Plan to address new guidance regarding equity restructurings under FAS 123(R). The 2002 Plan provided for the issuance of up to 7,300,000 shares of common stock under stock options or restricted stock grants. Any person who is an employee or prospective employee of the Company was eligible for the grant of awards under the 2002 Plan, unless such person is an officer or director of the Company. The terms of awards granted under the 2002 Plan, including vesting, forfeiture and post termination exercisability are set by the plan administrator, subject to certain restrictions set forth in the 2002 Plan. The common stock options granted under the 2002 Plan generally become exercisable 25% per year beginning one year from the date of grant and expire between March 2011 and March 2013. With stockholder approval of the Company’s 2004 Stock Incentive Plan in July 2004, the 2002 Plan was suspended and no new grants will be made under the 2002 Plan. Stockholder approval of the 2004 Plan terminated the Company’s ability to issue awards for 4,497,625 shares that at that time remained available under the 2002 Plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

None.

Item 14. Principal Accounting Fees and Services.

The information required by this Item is incorporated by reference from the information provided under the heading “Independent Registered Accounting Firm’s Fees and Services” of our Proxy Statement.

55

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(1) The following financial statements of the registrant and reports of Independent Registered Public Accounting Firm are included in Item 8 hereof:

Report of Management’s Assessment of Internal Control over Financial Reporting,

Reports of Independent Registered Public Accounting Firm, Consolidated Balance Sheets at December 31, 2009 and 2008,

Consolidated Statements of Income for the years ended December 31, 2009, 2008, and 2007,

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008, and 2007,

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2009, 2008, and 2007, and

Notes to Consolidated Financial Statements.

(2) Except as provided below, all schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission either have been included in the consolidated financial statements or are not required under the related instructions, or are not applicable and therefore have been omitted.

Schedule II-Valuation and Qualifying Accounts.

(3) The exhibits listed below are filed or incorporated by reference as part of this Form 10-K.

Exhibit
No.		Description of Exhibit
	3.1	Second Amended and Restated Certificate of Incorporation. (Incorporated by reference to the registrant’s registration statement on Form S-1, declared effective by the Securities and Exchange Commission on February 22, 1999 (Registration No. 333-5983).)
	3.2	Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 from the Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on March 10, 2009.)
	4.1	Specimen Common Stock Certificate. (Incorporated by reference to the registrant’s registration statement on Form S-1, declared effective by the Securities and Exchange Commission on February 22, 1999 (Registration No. 333-5983).)
	10.1	The Corporate Executive Board Company Stock-Based Incentive Compensation Plan, adopted on October 31, 1997, as amended and restated in February 1999. (Incorporated by reference to the registrant’s registration statement on Form S-8, filed with the Securities and Exchange Commission on March 9, 1999 (Registration No. 333-74145).) *
	10.2	Amended Directors’ Stock Plan and Standard Terms and Conditions for Director Non-qualified Stock Options. (Incorporated by reference to the registrant’s registration statement on Form S-8, filed with the Securities and Exchange Commission on March 9, 1999 (Registration No. 333-74145).) *
	10.3	1999 Stock Option Plan and Standard Terms and Conditions for 1999 Stock Option Plan Incentive Stock Options. (Incorporated by reference to the registrant’s registration statement on Form S-8, filed with the Securities and Exchange Commission on March 9, 1999 (Registration No. 333-74145).) *
	10.4	Employee Stock Purchase Plan dated June 23, 2000. (Incorporated by reference to Exhibit 10.1 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2000.)

56

Exhibit
No.		Description of Exhibit
	10.5	2001 Stock Option Plan. (Incorporated by reference to Exhibit 10.1 to the registrant’s registration statement on Form S-8 filed with the Securities and Exchange Commission on August 10, 2001 (Registration No. 333-67238).) *
	10.6	2002 Non-Executive Stock Incentive Plan. (Incorporated by reference to Exhibit 10.21.3 from the Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the year ended December 31, 2002.) *
	10.7	2004 Stock Incentive Plan, as amended June 14, 2007. (Incorporated by reference to Exhibit 10.11 from the Annual Report Pursuant to Section 13 or 15(d) of the Securities Act of 1934 for the year ended December 31, 2007.) *
	10.8	Form of term sheet for director non-qualified stock options. (Incorporated by reference to Exhibit 10.43 from the Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the year ended December 31, 2001.) *
	10.9	The Corporate Executive Board Deferred Compensation Plan, as amended, effective January 1, 2008. (Incorporated by reference to Exhibit 10.17 from the Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the year ended December 31, 2008)*
	10.10	Standard Terms and Conditions for Restricted Stock Units under the 2004 Stock Incentive Plan and form of Term Sheet for Restricted Stock Units. (Incorporated by reference to Exhibit 10.1 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2006.) *
	10.11	Standard Terms and Conditions for Non-Qualified Stock Options and Stock Appreciation Rights under the 1999 Stock Option Plan, 2001 Stock Option Plan, 2002 Non-Executive Stock Incentive Plan and the 2004 Stock Incentive Plan and form of Term Sheet for Stock Appreciation Rights. (Incorporated by reference to Exhibit 10.2 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2006.) *
	10.12	Employment Agreement, dated May 19, 2006, between The Corporate Executive Board Company and Thomas L. Monahan III. (Incorporated by reference to Exhibit 10.1 from the Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on July 26, 2006.) *
	10.13	Agreement Concerning Exclusive Services, Confidential Information, Business Opportunities, Non-Competition, Non-Solicitation and Work Product, dated August 20, 1997, between the Company’s predecessor and Thomas L. Monahan III. (Incorporated by reference to Exhibit 10.2 from the Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on July 26, 2006.)
	10.14	Amendments to the 2004 Stock Incentive Plan, 2002 Non-Executive Stock Incentive Plan, 2001 Stock Option Plan, 1999 Stock Option Plan, Employee Stock Purchase Plan and Directors’ Stock Plan, adopted December 22, 2006. (Incorporated by reference to Exhibit 10.23 from the Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the year ended December 31, 2006.) *
	10.15	Collaboration Agreement, dated February 6, 2007, with The Advisory Board Company, as extended on February 4, 2010 (Confidential treatment has been requested for portions of this agreement.) (Incorporated by reference to Exhibit 10.26 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2007.)
	10.16	Form of Employer Protection Agreement, revised February 12, 2010. (Incorporated by reference to Exhibit 10.28 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2007.)
	10.17	Amendments, adopted February 21, 2007, to the 2004 Stock Incentive Plan. (Incorporated by reference to Exhibit 10.29 from the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2007.) *

57

Exhibit
No.		Description of Exhibit
	10.18	Form of Indemnity Agreement between The Corporate Executive Board Company and its directors and officers. (Incorporated by reference to Exhibit 10.30 from the Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the year ended December 31, 2007.)
	10.19	Form of Change in Control Agreement. (Incorporated by reference to Exhibit 10.1 from the Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on October 23, 2008.) *
	10.20	Revised Form of Employer Protection Agreement, adopted February 12, 2010. †
	10.21	Revised Standard Terms and Conditions for Restricted Stock Units under the 2004 Stock Incentive Plan. * †
	10.22	Revised Standard Terms and Conditions for Non-Qualified Stock Options and Stock Appreciation Rights under 2004 Stock Incentive Plan. * †
	10.23	Extension letter, dated February 4, 2010, to the Collaboration Agreement with The Advisory Board Company. †
	10.24	Glenn Tobin Agreement and Release, dated February 4, 2009. *†
	10.25	Severance Program — Corporate Leadership Team, adopted January 8, 2010. *†
	10.26	Separation Agreement — Richard S. Lindahl, dated April 29, 2009. (Incorporated by reference to Exhibit 10.1 to the Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on May 1, 2009.) *
	14.1	Code of Conduct For Directors, Executives and Employees (Restated as of May 1, 2008). (Incorporated by reference to Exhibit 14.1 to the Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission on May 7, 2008.)
	21.1	List of the Subsidiaries of The Corporate Executive Board Company.
	23.1	Consent of Ernst and Young LLP, Independent Registered Public Accounting Firm.
	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
	32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 USC Section 1350.

*	Management contract or compensatory plan or arrangement.
†	Filed herewith.

58

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of
The Corporate Executive Board Company

We have audited the consolidated financial statements of The Corporate Executive Board Company as of December 31, 2009 and 2008, and for each of the three years in the period ended December 31, 2009 and have issued our report thereon dated March 1, 2010 (included elsewhere in this Form 10-K). Our audits also included the financial statement schedule listed in Item 15 (2) of this Form 10-K. This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Baltimore, Maryland
March 1, 2010

59

THE CORPORATE EXECUTIVE BOARD COMPANY
Schedule II-Valuation and Qualifying Accounts
(In thousands)

					Additions
					Charged to
	Balance at		Additions		Provision		Deductions
	Beginning		Charged to		for Income		from		Balance at
	of Year		Revenues		Taxes		Reserve		End of Year
Year ended December 31, 2009
Allowance for uncollectible revenue	$	4,931	$	5,820	$	—	$	8,265	$	2,486
Valuation allowance on deferred tax assets		8,211		—		888		8		9,091
Year ended December 31, 2008
Allowance for uncollectible revenue	$	1,748	$	15,629	$	—	$	12,446	$	4,931
Valuation allowance on deferred tax assets		7,878		—		800		467		8,211
Year ended December 31, 2007
Allowance for uncollectible revenue	$	1,155	$	8,560	$	—	$	7,967	$	1,748
Valuation allowance on deferred tax assets		5,821		—		2,057		—		7,878

60

Signatures

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized dated as of March 1, 2010.

The Corporate Executive Board Company
By:	/s/ Thomas L. Monahan III
	Thomas L. Monahan III
	Chairman of the Board of Directors and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 1, 2010 by the following persons on behalf of the registrant and in the capacity indicated.

Signature	Title
/s/ Thomas L. Monahan III Thomas L. Monahan III	Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
/s/ Richard S. Lindahl Richard S. Lindahl	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
/s/ Gregor S. Bailar
Gregor S. Bailar	Director
/s/ Stephen M. Carter
Stephen M. Carter	Director
/s/ Gordon J. Coburn
Gordon J. Coburn	Director
/s/ Nancy J. Karch
Nancy J. Karch	Director
/s/ David W. Kenny
David W. Kenny	Director
/s/ Daniel O. Leemon
Daniel O. Leemon	Director

61

EX-10.20

Exhibit 10.20

EMPLOYER PROTECTION AGREEMENT

This Employer Protection Agreement (“Agreement”) is made by and between The Corporate Executive Board Company (including any and all affiliates) (the “Company”) and the employee named below (the “Employee”).

The Company is engaged in the business of providing research, advisory and networking services to individual members in various industries, including without limitation such services as short-answer or custom research on demand, multiple client or syndicated studies, benchmarking data and databases and conferences, seminars, training and education, and on-line communities concerning the same.

The Company has offered employment or continued employment to Employee. During the course of employment, Employee will develop, at the Company’s expense, important relationships with members and prospective members of the Company. Employee will also become aware of certain confidential methods, practices, information and procedures with which the Company conducts its business and of certain confidential information regarding the Company’s members and/or prospective members. Employee may also prepare studies and other written materials using the Company’s resources.

NOW THEREFORE, in consideration of the recitals above, initial and/or continued employment and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. Non-Solicitation of, and Non-Provision of Competing Services and Products to, Members and Prospective Members:

(a) During Employee’s employment, and for a period of one (1) year following the Company’s termination of Employee’s employment for Cause or Employee’s voluntary resignation of employment, Employee agrees that Employee shall not, directly or indirectly, on behalf of himself or any other person or entity other than the Company, offer to provide or provide Company Services to any Covered Person or induce or attempt to induce or otherwise counsel, advise, ask or encourage any Covered Person to discontinue membership, elect not to renew membership, or elect not to commence membership with the Company.

(b) For purposes of this Agreement, the following terms shall have the following meanings:

“Cause” shall mean the commission of an act of fraud, theft or dishonesty against the Company or any of its members or prospective members and/or in the course of Employee’s duties for the Company; conviction of or a plea of nolo contendere to any felony; conviction of or a plea of nolo contendere to any misdemeanor involving moral turpitude which might, as determined by the Company in its sole discretion, cause embarrassment to the Company; tardiness or absenteeism; insubordination; violation of Company policy; or violation of any applicable laws, rules or regulations in connection with or during performance of work for the Company.

“Company Services” shall mean the provision of decision support, business advice and management support by (aa) providing short-answer or custom research on demand, including without limitation literature or database searches, telephone interviews, or other research of the same or substantially similar type as that provided by the Company; (bb) preparing published multiple client or syndicated studies of the same or substantially similar type provided by the Company; (cc) selling benchmarking data and databases of the same or substantially similar type provided by the Company; (dd) providing to a membership organization conferences, seminars, training or education of the same or substantially similar type provided by the Company; (ee) providing decision or implementation support and related analytical tools of the same or substantially similar type provided by the Company; (ff) facilitating, developing, building, enhancing or establishing in any way an online community sharing IT-related information, including but not limited to through the use of groups, blogs, Wiki, knowledge bases, and professional networking; (gg) facilitating, developing or building a process associated with software that generates marketing plans; (hh) facilitating, developing or building a survey-based assessment of a workforce’s capabilities and behaviors for the marketing function; or (ii) providing any other services or products that the Company was providing during Employee’s employment, or that Employee learned during Employee’s employment that the Company planned to provide in the future.

“Covered Person” shall mean any person or entity (i) that was a member of the Company or was solicited to be a member of the Company at any time during the lesser of the two-year period prior to the termination of Employee’s employment with the Company, or the period of Employee’s employment with the Company; and (ii) with which Employee had contact on behalf of the Company or about which Employee learned confidential information in the course of Employee’s employment with the Company.

“Non-Solicitation Period” shall mean the period of Employee’s employment and one (1) year period following the Company’s termination of Employee’s employment for Cause or Employee’s voluntary resignation of employment.

(c) Employee agrees that the restrictions imposed upon Employee by the provisions of this section are fair and reasonable, are reasonably required for the protection of the Company, and will not unreasonably restrict Employee’s ability to work during the Non-Solicitation Period.

2. Non-Solicitation of Employees: During Employee’s employment, and for a period of one (1) year following resignation or termination of such employment for any reason, Employee agrees that Employee shall not, except in the course of Employee’s duties for the Company, directly or indirectly, induce or attempt to induce or otherwise counsel, advise, ask or encourage any person who is then a current employee of the Company and whom Employee worked with, supervised, or learned confidential information about while employed by the Company to leave the employ of the Company to accept employment with another employer that competes with the Company in the provision of Company Services.

3. Confidential Information: During Employee’s employment, Employee will have access to confidential information about the Company’s business that is not generally available to the public, including, without limitation, research, designs, methods, pricing, financial information, personnel information, marketing strategies, member profiles, materials prepared for members, and the like. Employee hereby acknowledges the Company’s exclusive ownership of such confidential information. Employee may also have access to confidential information provided to the Company in confidence by its members, vendors or other third parties. At all times during and after Employee’s employment, Employee agrees to maintain the confidentiality of confidential information belonging to the Company, and/or provided to the Company by its members, vendors or other third parties in confidence, and to use or disclose such information only as authorized by the Company or required by law.

4. Return of Company Property: Upon demand of the Company or resignation or termination of employment for any reason, whichever is sooner, Employee will deliver to the Company, and cease to have authorized access to, any and all of its and/or its members’ and/or vendors’ property, as well as any other property provided to the Company by third parties in confidence, including without limitation all studies, reports, disks, membership data, membership lists, member materials, manuals, designs, recordings and any other medium in any form or format by which, through which or on which Company, member or vendor property or other property provided to the Company by third parties in confidence has been recorded or stored.

5. Ownership of Intellectual Property: The Company owns (a) any inventions, trade secrets, ideas, original works of authorship or confidential information that Employee conceives, develops, discovers or makes in whole or in part during Employee’s employment by the Company that relate to the Company’s business or the Company’s actual or demonstrably anticipated research or development; and (b) any inventions, ideas, original works of authorship, trade secrets or other confidential information that Employee conceives, develops, discovers or makes in whole or in part during or after Employee’s employment that are made through the use of any of the Company’s time, equipment, facilities, supplies, trade secrets or other confidential information, or which result from any work Employee performs for the Company. To the maximum extent permitted under applicable law, all of the foregoing shall be deemed to be “works made for hire” under the United States Copyright Act, and the Company shall be deemed to be the author and owner thereof. To the extent any of the foregoing is not deemed to be a work made for hire, Employee does hereby grant ownership of all copyrights, patent rights, inventions, and discoveries to Company, and no further action by Employee will be required to grant ownership to the Company.

6. No Breach of Other Agreements or Obligations: Employee will not knowingly use for the benefit of or disclose to the Company any confidential information of any of Employee’s former employers or of any other third party who has not authorized such use or disclosure and will not otherwise knowingly infringe any proprietary right of any third party. Employee represents and warrants that no contract or agreement between Employee and any third party will interfere in any manner with Employee’s performance of Employee’s duties for the Company or with Employee’s compliance with this Agreement.

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7. Provision Invalidated: If any provision of this Agreement shall be determined, by a court having jurisdiction, to be unenforceable, the remainder of this Agreement shall not be affected but shall continue in full force and effect as though such unenforceable provision were not originally a part of this Agreement, and the unenforceable provision shall be modified so as to be enforceable to the maximum extent permitted by law. In the event that a court refuses to modify any unenforceable provision, the parties agree to renegotiate the unenforceable provision in good faith to accomplish its objective to the extent permitted by law.

8. Injunctive Relief: Employee acknowledges that a breach of any of the provisions of this Agreement will result in continuing and irreparable damages to the Company for which there would be no adequate remedy at law and that the Company, in addition to all other relief available to it, shall be entitled to the issuance of injunctive relief restraining Employee from committing or continuing to commit any breach of this Agreement.

9. Attorney’s Fees: In any action for breach of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs.

10. Governing Law and Choice of Forum: This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Virginia, irrespective of the principles of conflicts of laws therein, and Employee and the Company agree to submit to the personal jurisdiction of the state and federal courts in the Commonwealth of Virginia for the resolution of any disputes arising under or relating in any way to this Agreement.

11. Not a Contract of Employment: This Agreement does not constitute a contract of employment for a definite period of time. Employee is an at-will employee of the Company. This means that either Employee or the Company may terminate the employment relationship with or without cause at any time with or without notice for any lawful reason or for no reason.

12. No Waiver of Breach and No Effect on Employee’s Other Obligations: The waiver by any party of a breach of any provision herein shall not operate or be construed as a waiver of any subsequent breach by any party. In addition, this Agreement does not relieve Employee of any obligation imposed by law including, for example and without limitation, any statutory or common law obligation to protect the Company’s trade secrets and to refrain from tortiously interfering with the Company’s contractual relations.

13. Entire Agreement: This Agreement sets forth the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior oral or written discussions, agreements or understandings with respect to the subject matter hereof.

14. Survival of Agreement: The provisions of this Agreement shall survive the termination of the employment relationship between the Company and Employee. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Notwithstanding the foregoing, Employee shall not assign Employee’s obligations under this Agreement without the express written consent of the Company or its successors and/or assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement as of this _______ day of                     , 20____.

EMPLOYEE	THE CORPORATE EXECUTIVE BOARD COMPANY
Print Name	Print Name and Title
Signature	Signature

3

EX-10.21

Exhibit 10.21

THE CORPORATE EXECUTIVE BOARD COMPANY
STANDARD TERMS AND CONDITIONS FOR
RESTRICTED STOCK UNITS

These Standard Terms and Conditions apply to any Award of restricted stock units granted to an employee of the Company after February 1, 2010 under The Corporate Executive Board Company 2004 Stock Incentive Plan (as amended) (the “Plan”), which are evidenced by a Term Sheet or an action of the Administrator that specifically refers to these Standard Terms and Conditions.

1.	TERMS OF RESTRICTED STOCK UNITS
	THE CORPORATE EXECUTIVE BOARD COMPANY, a Delaware corporation (the “Company”), has granted to the Participant named in the Term Sheet provided to said Participant herewith (the “Term Sheet”) an award of a number of restricted stock units (the “Award”) specified in the Term Sheet. Each restricted stock unit represents the right to receive one share of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”), upon the terms and subject to the conditions set forth in the Term Sheet, these Standard Terms and Conditions, and the Plan, each as amended from time to time. For purposes of these Standard Terms and Conditions and the Term Sheet, any reference to the Company shall, unless the context requires otherwise, include a reference to any Subsidiary, as such term is defined in the Plan.
2.	VESTING OF RESTRICTED STOCK UNITS
	The Award shall not be vested as of the Grant Date set forth in the Term Sheet and shall be forfeitable unless and until otherwise vested pursuant to the terms of the Term Sheet and these Standard Terms and Conditions. After the Grant Date, subject to termination or acceleration as provided in these Standard Terms and Conditions and the Plan, the Award shall become vested as described in the Term Sheet with respect to that number of restricted stock units as set forth in the Term Sheet; provided that (except as set forth in Section 5 below) the Participant does not experience a Termination of employment (as defined in the Plan) prior to the applicable vesting date. Each date on which restricted stock units subject to the Award vest is referred to herein as a “Vesting Date.” Notwithstanding anything herein or in the Term Sheet to the contrary, if a Vesting Date is not a business day, the applicable portion of the Award shall vest on the next following business day. Restricted stock units granted under the Award that have vested and are no longer subject to forfeiture are referred to herein as “Vested Units.” Restricted stock units granted under the Award that are not vested and remain subject to forfeiture are referred to herein as “Unvested Units.” The vesting period of an Award may be adjusted by the Administrator to reflect the decreased level of employment during any period in which the Participant is on an approved leave of absence or is employed on a less than full time basis, provided that the Administrator may take into consideration any accounting consequences to the Company in making any such adjustment.
3.	SETTLEMENT OF RESTRICTED STOCK UNITS
	Each Vested Unit will be settled by the delivery of one share of Common Stock (subject to adjustment under Section 12 of the Plan) to the Participant or, in the event of the Participant’s death, to the Participant’s estate, heir or beneficiary, within 60 days following the applicable Vesting Date. The issuance of the shares of Common Stock hereunder may be affected by the issuance of a stock certificate, recording shares on the stock records of the Company or by crediting shares in an account established on the Participant’s behalf with a brokerage firm or other custodian, in each case as determined by the Company. Fractional shares will not be issued pursuant to the Award.
	Notwithstanding the above, (i) for administrative or other reasons, the Company may from time to time temporarily suspend the issuance of shares of Common Stock in respect of Vested Units, (ii) the Company shall not be obligated to deliver any shares of the Common Stock during any period when the Company determines that the delivery of shares hereunder would violate any federal, state or other applicable laws, (iii) the Company may issue shares of Common Stock hereunder subject to any restrictive legends that, as determined by the Company’s counsel, are necessary to comply with securities or other regulatory requirements, (iv) the date on which shares are issued hereunder may include a delay in order to provide the Company such time as it determines appropriate to address tax withholding and other administrative matters, and (v) shares shall not be issued or issuable pursuant to this provision to the extent of any deferral pursuant to a deferred compensation program that the Company has made available for purposes of allowing deferral of such shares; provided that, in the case of clauses (i) — (iv), in no event shall the date of delivery be later than the last date on which settlement may take place without converting this Award into “non-qualified compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended.

4.	RIGHTS AS STOCKHOLDER
	Prior to any issuance of shares of Common Stock in settlement of the Award, no shares of Common Stock will be reserved or earmarked for the Participant or the Participant’s account nor shall the Participant have any of the rights of a stockholder with respect to such shares. The Participant will not be entitled to any privileges of ownership of the shares of Common Stock (including, without limitation, any voting or dividend rights) underlying Vested Units and/or Unvested Units unless and until shares of Common Stock are actually delivered to the Participant hereunder.
5.	TERMINATION OF EMPLOYMENT
	Except as provided in this Section 5, all Unvested Units shall be forfeited by the Participant and cancelled and surrendered to the Company without payment of any consideration to the Participant upon the date of the Participant’s Termination of employment (as defined in the Plan) for any reason.

A. Upon the Participant’s Termination of employment as a result of the death of the Participant, the Award shall be deemed to have become fully vested immediately prior to such Termination of employment.

B. Upon the Participant’s Termination of employment as a result of the Total and Permanent Disablement (as defined in the Plan) of the Participant, the Award shall be deemed to have become fully vested immediately prior to such Termination of employment.

C. Upon the Participant’s Termination of employment as a result of the Participant’s Retirement (as defined in the Plan), the Award shall be deemed to have become fully vested immediately prior to such Termination of employment.

D. If, within one year after a Change in Control (as defined in Section 19 hereof), the Participant incurs a Termination of employment for any reason other than for Cause (as defined in Section 19 hereof) or voluntary resignation by the Participant, the Award shall be deemed to have become fully vested immediately prior to such Termination of employment.

6.	RESTRICTIONS ON RESALES OF SHARES
	The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any re-sales by the Participant or other subsequent transfers by the Participant of any shares of Common Stock issued in respect of Vested Units, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and other holders and (c) restrictions as to the use of a specified brokerage firm for such re-sales or other transfers.
7.	INCOME TAXES
	The Participant will be subject to federal and state income and other tax withholding requirements on a date (generally, the Vesting Date) determined by applicable law (any such date, the “Taxable Date”), based on the fair market value of the shares of Common Stock underlying the Vested Units that vest. The Participant will be solely responsible for the payment of all U.S. federal income and other taxes, including any state, local or non-U.S. income or employment tax obligation that may be related to the Vested Units, including any such taxes that are required to be withheld and paid over to the applicable tax authorities (the “Tax Withholding Obligation”). The Participant will be responsible for the satisfaction of such Tax Withholding Obligation in a manner acceptable to the Company in its sole discretion.

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	By accepting the Award the Participant agrees that, unless and to the extent the Participant has otherwise satisfied the Tax Withholding Obligations in a manner permitted or required by the Administrator pursuant to the Plan, the Company is authorized to withhold from the shares of Common Stock issuable to the Participant in respect of Vested Units the whole number of shares (rounding up) having a value (as determined by the Company consistent with any applicable tax requirements) on the Taxable Date or the first trading day before the Taxable Date sufficient to satisfy the applicable Tax Withholding Obligation. If the withheld shares are not sufficient to satisfy the Participant’s Tax Withholding Obligation, the Participant agrees to pay to the Company as soon as practicable any amount of the Tax Withholding Obligation that is not satisfied by the withholding of shares of Common Stock described above and if the withheld shares are more than sufficient to satisfy the Participant’s Tax Withholding Obligation the Company shall make such arrangement as it determines appropriate to credit such amount for the Participant’s benefit.
	At any time not less than five (5) business days before any Tax Withholding Obligation arises (e.g., a settlement date), the Participant may elect to satisfy all or any part of the Participant’s Tax Withholding Obligation by delivering to the Company an amount that the Company determines is sufficient (in light of the uncertainty of the exact amount thereof) to so satisfy the Tax Withholding Obligation by (i) wire transfer to such account as the Company may direct, (ii) delivery of a certified check payable to the Company, or (iii) such other means as specified from time to time by the Administrator, in each case unless the Company has specified prior to such date that the Participant is not permitted to so satisfy the Tax Withholding Obligation.
	The Company may refuse to issue any shares of Common Stock to the Participant until the Participant satisfies the Tax Withholding Obligation. The Participant acknowledges that the Company has the right to retain without notice from shares issuable under the Award or from salary or other amounts payable to the Participant, shares or cash having a value sufficient to satisfy the Tax Withholding Obligation.
	The Participant is ultimately liable and responsible for all taxes owed by the Participant in connection with the Award, regardless of any action the Company takes or any transaction pursuant to this Section 7 with respect to any tax withholding obligations that arise in connection with the Award. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the grant, issuance, vesting or settlement of the Award or the subsequent sale of any of the shares of Common Stock underlying Vested Units. The Company does not commit and is under no obligation to structure the Award to reduce or eliminate the Participant’s tax liability.
8.	NON-TRANSFERABILITY OF AWARD
	Unless otherwise provided by the Administrator, the Participant may not assign, transfer or pledge the Award, the shares of Common Stock subject thereto or any right or interest therein to anyone other than by will or the laws of descent and distribution. The Company may cancel the Participant’s Award if the Participant attempts to assign or transfer it in a manner inconsistent with this Section 8.
9.	THE PLAN AND OTHER AGREEMENTS
	In addition to these Terms and Conditions, the Award shall be subject to the terms of the Plan, which are incorporated into these Standard Terms and Conditions by this reference. Certain capitalized terms not otherwise defined herein are defined in the Plan. In the event of a conflict between the terms and conditions of these Standard Terms and Condition and the Plan, the Plan controls.
	The Term Sheet, these Standard Terms and Conditions and the Plan constitute the entire understanding between the Participant and the Company regarding the Award. Any prior agreements, commitments or negotiations concerning the Award are superseded.

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10.	LIMITATION OF INTEREST IN SHARES SUBJECT TO AWARD
	Neither the Participant (individually or as a member of a group) nor any beneficiary or other person claiming under or through the Participant shall have any right, title, interest, or privilege in or to any shares of Common Stock allocated or reserved for the purpose of the Plan or subject to the Term Sheet or these Standard Terms and Conditions except as to such shares of Common Stock, if any, as shall have been issued to such person in respect of Vested Units.
11.	NOT A CONTRACT FOR EMPLOYMENT.
	Nothing in the Plan, in the Term Sheet, these Standard Terms and Conditions or any other instrument executed pursuant to the Plan shall confer upon the Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate the Participant’s employment at any time for any reason.
12.	NOTICES
	All notices, requests, demands and other communications pursuant to these Standard Terms and Conditions shall be in writing and shall be deemed to have been duly given if personally delivered, telexed or telecopied to, or, if mailed, when received by, the other party at the following addresses (or at such other address as shall be given in writing by either party to the other):
	If to the Company to:
	The Corporate Executive Board Company
	1919 North Lynn Street
	Arlington, Virginia 22209
	Attention: Chief Financial Officer
	If to the Participant, to the address set forth below the Participant’s signature on the Term Sheet.
13.	SEPARABILITY.
	In the event that any provision of these Standard Terms and Conditions is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of these Standard Terms and Conditions shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision.
14.	HEADINGS.
	The headings preceding the text of the sections hereof are inserted solely for convenience of reference, and shall not constitute a part of these Standard Terms and Conditions, nor shall they affect its meaning, construction or effect.
15.	FURTHER ASSURANCES.
	Each party shall cooperate and take such action as may be reasonably requested by another party in order to carry out the provisions and purposes of these Standard Terms and Conditions.
16.	BINDING EFFECT.
	These Standard Terms and Conditions shall inure to the benefit of and be binding upon the parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.

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17.	DISPUTES
	All questions arising under the Plan or under these Standard Terms and Conditions shall be decided by the Administrator in its total and absolute discretion. In the event the Participant or other holder of an Award believes that a decision by the Administrator with respect to such person was arbitrary or capricious, the Participant or other holder may request arbitration with respect to such decision in accordance with Section 23 of the Plan. The review by the arbitrator shall be limited to determining whether the Administrator’s decision was arbitrary or capricious. This arbitration shall be the sole and exclusive review permitted of the Administrator’s decision, and the Participant and any other holder hereby explicitly waive any right to judicial review.
18.	ELECTRONIC DELIVERY
	The Company may, in its sole discretion, decide to deliver any documents related to any awards granted under the Plan by electronic means or to request the Participant’s consent to participate in the Plan by electronic means. By accepting the Award, the Participant consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and such consent shall remain in effect throughout the Participant’s term of employment or service with the Company and thereafter until withdrawn in writing by the Participant.
19.	DEFINITIONS

For purposes of these Standard Terms and Conditions, the terms set forth below shall have the following meanings:

A. “Cause” means (i) the commission of an act of fraud or theft against the Company; (ii) conviction for any felony; (iii) conviction for any misdemeanor involving moral turpitude which might, in the Company’s opinion, cause embarrassment to the Company; (iv) a significant violation of any material Company policy; (v) willful or repeated non-performance or substandard performance of material duties which is not cured within thirty (30) days after written notice thereof to the Participant; or (vi) violation of any material District of Columbia, state or federal laws, rules or regulations in connection with or during performance of the Participant’s work which, if such violation is curable, is not cured within thirty (30) days after notice thereof to the Participant.

B. “Change in Control” means the occurrence of any of the following:

(i) the “acquisition” by a “person” or “group” (as those terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules promulgated thereunder), other than by Permitted Holders, of beneficial ownership (as defined in Exchange Act Rule 13d-3) directly or indirectly, of any securities of the Company or any successor of the Company immediately after which such person or group owns securities representing 50% or more of the combined voting power of the Company or any successor of the Company;

(ii) within any 12-month period, the individuals who were directors of the Company as of December 31, 2005 (the “Incumbent Directors”) ceasing for any reason other than death or disability to constitute at least a majority of the Board of Directors, provided that any director who was not a director as of December 31, 2005 shall be deemed to be an Incumbent Director if such director was appointed or elected to the Board of Directors by, or on the recommendation or approval of, at least a majority of directors who then qualified as Incumbent Directors, provided further that any director appointed or elected to the Board of Directors to avoid or settle a threatened or actual proxy contest shall in no event be deemed to be an Incumbent Director; or

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(iii) approval by the stockholders of the Company of any merger, consolidation or reorganization involving the Company, unless either (A) the stockholders of the Company immediately before such merger, consolidation or reorganization own, directly or indirectly immediately following such merger, consolidation or reorganization, at least 60% of the combined voting power of the company(ies) resulting from such merger, consolidation or reorganization in substantially the same proportion as their ownership immediately before such merger, consolidation or reorganization, or (B) the stockholders of the Company immediately after such merger, consolidation or reorganization include Permitted Holders;

(iv) approval by the stockholders of the Company of a transfer of 50% or more of the assets of the Company or a transfer of assets that during the current or either of the prior two fiscal years accounted for more than 50% of the Company’s revenues or income (for the avoidance of doubt, “assets” for this purpose shall exclude cash, cash equivalents and marketable securities), unless the person to which such transfer is made is either (A) a Subsidiary of the Company, (B) wholly owned by all of the stockholders of the Company, or (C) wholly owned by Permitted Holders; or

(v) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

C. “Permitted Holders” means:

(i) the Company;

(ii) any Subsidiary;

(iii) any employee benefit plan of the Company or any Subsidiary; and

(iv) any group which includes or any person who is wholly or partially owned by a majority of the individuals who immediately prior to such acquisition of securities or stockholder approval under paragraphs (i), (iii) or (iv) of the definition of Change in Control are executive officers (as defined in Exchange Act Rule 3b-7) of the Company or any successor of the Company; provided that immediately prior to and for six months following such acquisition of securities or stockholder approval such executive officers of the Company are beneficial owners (as defined in Exchange Act Rule 16a-1(a)(2)) of the common stock of the Company or any successor of the Company; and provided further that such executive officers’ employment is not terminated by the Company or any successor of the Company (other than as a result of death or disability) during the six months following such acquisition of securities or stockholder approval. A Change of Control shall be deemed to have occurred on any date within six months following an acquisition of securities or stockholder approval under paragraphs (i), (iii) or (iv) of the definition of Change in Control on which any of the conditions set forth in this clause (iv) cease to be satisfied.

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EX-10.22

Exhibit 10.22

THE CORPORATE EXECUTIVE BOARD COMPANY
STANDARD TERMS AND CONDITIONS FOR
NON-QUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

(Mandatory Net Share Settlement)

These Standard Terms and Conditions apply to any Non-Qualified Stock Option and Stock Appreciation Rights granted after February 1, 2010 under The Corporate Executive Board Company 2004 Stock Incentive Plan (as amended) (the “Plan”) which are evidenced by a Term Sheet or an action of the Administrator that specifically refers to these Standard Terms and Conditions.

1.	TERMS OF NON-QUALIFIED STOCK OPTION AND STOCK APPRECIATION RIGHTS
	THE CORPORATE EXECUTIVE BOARD COMPANY, a Delaware corporation (the “Company”), has granted to the Optionee named in the Term Sheet provided to said Optionee herewith (the “Term Sheet”) a non-qualified stock option or a stock appreciation right (hereafter referred to as the “Option”) to purchase up to the number of shares of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”), set forth in Term Sheet, at the purchase price per share and upon the other terms and subject to the conditions set forth in the Term Sheet, these Standard Terms and Conditions (as amended from time to time), and the Plan. For purposes of these Standard Terms and Conditions and the Term Sheet, any reference to the Company shall include a reference to any Subsidiary, as such term is defined in the Plan.
2.	NON-QUALIFIED STOCK OPTION OR STOCK APPRECIATION RIGHT
	The Option is not intended to be an incentive stock Option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and will be interpreted accordingly.
3.	EXERCISE OF OPTION
	The Option shall not be exercisable as of the Grant Date set forth in the Term Sheet. After the Grant Date, to the extent not previously exercised, and subject to termination or acceleration as provided in these Standard Terms and Conditions and the Plan, the Option shall be exercisable to the extent it becomes vested, as described in the Term Sheet, to purchase up to that number of shares of Common Stock as set forth in the Term Sheet provided that (except as set forth in Section 4.C. below) Optionee remains employed with the Company and does not experience a termination of employment prior to the applicable vesting date. The vesting period and/or exercisability of an Option may be adjusted by the Administrator to reflect the effects of any period during which the Optionee is on an approved leave of absence or is employed on a less than full time basis, provided that no such adjustment may be made which would result in an accounting charge to the Company.
	To exercise the Option (or any part thereof), Optionee shall deliver a “Notice of Exercise” to the Company specifying the number of whole shares of Common Stock Optionee wishes to purchase and how Optionee’s shares of Common Stock should be registered (in Optionee’s name only or in Optionee’s and Optionee’s spouse’s names as community property or as joint tenants with right of survivorship).
	The exercise price (the “Exercise Price”) of the Option is set forth in the Term Sheet. The Company shall not be obligated to issue any shares of Common Stock until Optionee shall have paid the total Exercise Price for that number of shares of Common Stock. Unless the Administrator permits or requires the Optionee to pay the Exercise Price in such other form(s) of consideration as the Administrator in its discretion shall specify pursuant to the Plan, the Exercise Price shall be paid by the Company withholding from the shares of Common Stock otherwise issuable to the Optionee upon the exercise of the Option (or portion thereof) the whole number of shares (rounded up) having a fair market value on the date of exercise sufficient to satisfy the Exercise Price. If the withheld shares are not sufficient to pay the Exercise Price, the Optionee shall pay to the Company on the date of exercise any amount of the Exercise Price that is not satisfied by the withholding of shares of Common Stock described above and if the withheld shares are more than sufficient to satisfy the Exercise Price the Company shall make such arrangement as it determines appropriate to credit such amount for the Optionee’s benefit.

Fractional shares may not be exercised. Shares of Common Stock will be issued as soon as practical after exercise. Notwithstanding the above, the Company shall not be obligated to deliver any shares of Common Stock during any period when the Company determines that the exercisability of the Option or the delivery of shares hereunder would violate any federal, state or other applicable laws.

4. EXPIRATION OF OPTION

Except as provided in this Section 4, the Option shall expire and cease to be exercisable as of the Expiration Date set forth in the Term Sheet.

A. Upon the Optionee’s Termination of employment (as defined in the Plan) as a result of the death of the Optionee, (i) any part of the Option that is unexercisable as of such Termination of employment shall immediately become exercisable, and (ii) the unexercised portion of the Option shall be exercisable by the Optionee’s estate, heir or beneficiary at any time during the twelve (12) months following such Termination of employment and shall expire on the earlier of the first anniversary of such Termination of employment or the Expiration Date of the Option.

B. Upon the Optionee’s Termination of employment as a result of the Total and Permanent Disablement (as defined in the Plan) of the Optionee, (i) any part of the Option that is unexercisable as of such Termination of employment shall immediately become exercisable, and (ii) the unexercised portion of the Option shall be exercisable by the Optionee at any time during the twelve (12) months following such Termination of employment and shall expire on the earlier of the first anniversary of such Termination of employment or the Expiration Date of the Option.

C. Upon the Optionee’s Termination of employment due to Retirement (as defined in the Plan), (i) any part of the Option that is unexercisable as of such Termination of employment shall immediately become exercisable, and (ii) the unexercised portion of the Option shall be exercisable by the Optionee at any time during the twelve (12) months following such Termination of employment and shall expire on the earlier of the first anniversary of such Termination of employment or the Expiration Date of the Option.

D. Upon Optionee’s Termination of employment for any reason other than the Optionee’s death, Total and Permanent Disablement or Retirement and except as otherwise provided under paragraph (E) of this Section 4, (i) any part of the Option that is unexercisable as of such Termination of employment shall remain unexercisable and shall terminate as of such Termination of employment, and (ii) any part of the Option that is exercisable as of such Termination of employment shall expire on the earlier of ninety (90) days following such Termination of employment or the Expiration Date of the Option.

E. If, within one year after a Change of Control (as defined in Section 12 hereof), the Optionee incurs a Termination of employment for any reason other than for Cause (as defined in Section 12 hereof) or voluntary resignation by the Optionee, the Option shall become exercisable in its entirety upon the date of such Termination of employment and shall expire on the earlier of the first anniversary of such Termination of employment or the Expiration Date of the Option. The Option shall become exercisable in its entirety one year after a Change of Control if the Optionee is employed by the Company at such time.

5. RESTRICTIONS ON RESALES OF OPTION SHARES

The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by the Optionee or other subsequent transfers by the Optionee of any shares of Common Stock issued as a result of the exercise of the Option, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Optionee and other optionholders and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

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6.	INCOME TAXES
	The Optionee will be subject to federal and state income and other tax withholding requirements on the date (generally, the date of exercise) determined by applicable law (any such date, the “Taxable Date”), based on the excess of the fair market value of the shares of Common Stock underlying the portion of the Option that is exercised over the Exercise Price. The Optionee will be solely responsible for the payment of all U.S. federal income and other taxes, including any state, local or non-U.S. income or employment tax obligation that may be related to the exercise of the Option, including any such taxes that are required to be withheld and paid over to the applicable tax authorities (the “Tax Withholding Obligation”). The Optionee will be responsible for the satisfaction of such Tax Withholding Obligation in a manner acceptable to the Company in its sole discretion.
	By accepting the Option the Optionee agrees that, unless and to the extent the Optionee has otherwise satisfied the Tax Withholding Obligations in a manner permitted or required by the Administrator pursuant to the Plan, the Company is authorized to withhold from the shares of Common Stock issuable to the Optionee in respect of Vested Units the whole number of shares (rounding up) having a value (as determined by the Company consistent with any applicable tax requirements) on the Taxable Date or the first trading day before the Taxable Date sufficient to satisfy the applicable Tax Withholding Obligation. If the withheld shares are not sufficient to satisfy the Optionee’s Tax Withholding Obligation, the Optionee agrees to pay to the Company as soon as practicable any amount of the Tax Withholding Obligation that is not satisfied by the withholding of shares of Common Stock described above and if the withheld shares are more than sufficient to satisfy the Optionee’s Tax Withholding Obligation the Company shall make such arrangement as it determines appropriate to credit such amount for the Optionee’s benefit.
	At any time not less than five (5) business days before any Tax Withholding Obligation arises (e.g., a settlement date), the Optionee may elect to satisfy all or any part of the Optionee’s Tax Withholding Obligation by delivering to the Company an amount that the Company determines is sufficient (in light of the uncertainty of the exact amount thereof) to so satisfy the Tax Withholding Obligation by (i) wire transfer to such account as the Company may direct, (ii) delivery of a certified check payable to the Company, or (iii) such other means as specified from time to time by the Administrator, in each case unless the Company has specified prior to such date that the Optionee is not permitted to so satisfy the Tax Withholding Obligation.
	The Company may refuse to issue any shares of Common Stock to the Optionee until the Optionee satisfies the Tax Withholding Obligation. The Optionee acknowledges that the Company has the right to retain without notice from shares issuable upon exercise of the Option (or any portion thereof) or from salary or other amounts payable to the Optionee, shares or cash having a value sufficient to satisfy the Tax Withholding Obligation.
	The Optionee is ultimately liable and responsible for all taxes owed by the Optionee in connection with the Option, regardless of any action the Company takes or any transaction pursuant to this Section 6 with respect to any tax withholding obligations that arise in connection with the Option. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the grant, issuance, vesting or exercise of the Option or the subsequent sale of any of the shares of Common Stock acquired upon exercise of the Option. The Company does not commit and is under no obligation to structure the Option to reduce or eliminate the Optionee’s tax liability.
7.	NON-TRANSFERABILITY OF OPTION
	Unless otherwise provided by the Administrator, the Optionee may not assign or transfer the Option to anyone other than by will or the laws of descent and distribution and the Option shall be exercisable only by the Optionee during his or her lifetime. The Company may cancel the Optionee’s Option if the Optionee attempts to assign or transfer it in a manner inconsistent with this Section 7.

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8.	THE PLAN AND OTHER AGREEMENTS
	In addition to these Terms and Conditions, the Option shall be subject to the terms of the Plan, which are incorporated into these Standard Terms and Conditions by this reference. Certain capitalized terms not otherwise defined herein are defined in the Plan.
	The Term Sheet, these Standard Terms and Conditions and the Plan constitute the entire understanding between the Optionee and the Company regarding the Option. Any prior agreements, commitments or negotiations concerning the Option are superseded.
9.	LIMITATION OF INTEREST IN SHARES SUBJECT TO OPTION
	Neither the Optionee (individually or as a member of a group) nor any beneficiary or other person claiming under or through the Optionee shall have any right, title, interest, or privilege in or to any shares of Common Stock allocated or reserved for the purpose of the Plan or subject to the Term Sheet or these Standard Terms and Conditions except as to such shares of Common Stock, if any, as shall have been issued to such person upon exercise of the Option or any part of it. Nothing in the Plan, in the Term Sheet, these Standard Terms and Conditions or any other instrument executed pursuant to the Plan shall confer upon the Optionee any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate the Optionee’s employment at any time for any reason.
10.	NOTICES
	All notices, requests, demands and other communications pursuant to these Standard Terms and Conditions shall be in writing and shall be deemed to have been duly given if personally delivered, telexed or telecopied to, or, if mailed, when received by, the other party at the following addresses (or at such other address as shall be given in writing by either party to the other):
	If to the Company to:
	The Corporate Executive Board Company 1919 North Lynn Street Arlington, Virginia 22209 Attention: Chief Financial Officer
	If to the Optionee, to the address set forth below the Optionee’s signature on the Term Sheet.
11.	GENERAL
	In the event that any provision of these Standard Terms and Conditions is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of these Standard Terms and Conditions shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision.
	The headings preceding the text of the sections hereof are inserted solely for convenience of reference, and shall not constitute a part of these Standard Terms and Conditions, nor shall they affect its meaning, construction or effect.
	These Standard Terms and Conditions shall inure to the benefit of and be binding upon the parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.

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	All questions arising under the Plan or under these Standard Terms and Conditions shall be decided by the Administrator in its total and absolute discretion. In the event the Optionee or other holder of an Option believes that a decision by the Administrator with respect to such person was arbitrary or capricious, the Optionee or other optionholder may request arbitration with respect to such decision. The review by the arbitrator shall be limited to determining whether the Administrator’s decision was arbitrary or capricious. This arbitration shall be the sole and exclusive review permitted of the Administrator’s decision, and the Optionee and any other option holder hereby explicitly waive any right to judicial review.
	Notice of demand for arbitration shall be made in writing to the Administrator within 30 days after the applicable decision by the Administrator. The arbitrator shall be selected by those members of the Board of Directors who are neither members of the Compensation Committee of the Board of Directors nor employees of the Company. If there are no such members of the Board of Directors, the arbitrator shall be selected by the Board of Directors. The arbitrator shall be an individual who is an attorney licensed to practice law in the District of Columbia. Such arbitrator shall be neutral within the meaning of the Commercial Rules of Dispute Resolution of the American Arbitration Association; provided, however, that the arbitration shall not be administered by the American Arbitration Association. Any challenge to the neutrality of the arbitrator shall be resolved by the arbitrator whose decision shall be final and conclusive. The arbitration shall be administered and conducted by the arbitrator pursuant to the Commercial Rules of Dispute Resolution of the American Arbitration Association. The decision of the arbitrator on the issue(s) presented for arbitration shall be final and conclusive and may be enforced in any court of competent jurisdiction.
12.	DEFINITIONS
	For purposes of this Agreement, the terms set forth below shall have the following meanings:

A. “Cause” means the commission of an act of fraud or theft against the Company; conviction for any felony; conviction for any misdemeanor involving moral turpitude which might, in the Company’s opinion, cause embarrassment to the Company; significant violation of any material Company policy; willful or repeated non-performance or substandard performance of material duties which is not cured within thirty (30) days after written notice thereof to the Optionee; or violation of any material District of Columbia, state or federal laws, rules or regulations in connection with or during performance of the Optionee’s work which, if such violation is curable, is not cured within thirty (30) days after notice thereof to the Optionee.

B. “Change of Control” means any of the following:

1. the “acquisition” by a “person” or “group” (as those terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules promulgated thereunder), other than by Permitted Holders, of beneficial ownership (as defined in Exchange Act Rule 13d-3) directly or indirectly, of any securities of the Company or any successor of the Company immediately after which such person or group owns securities representing 50% or more of the combined voting power of the Company or any successor of the Company;

2. within any 12-month period, the individuals who were directors of the Company as of December 31, 2005 (the “Incumbent Directors”) ceasing for any reason other than death or disability to constitute at least a majority of the Board of Directors, provided that any director who was not a director as of December 31, 2005 shall be deemed to be an Incumbent Director if such director was appointed or elected to the Board of Directors by, or on the recommendation or approval of, at least a majority of directors who then qualified as Incumbent Directors, provided further that any director appointed or elected to the Board of Directors to avoid or settle a threatened or actual proxy contest shall in no event be deemed to be an Incumbent Director; or

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3. approval by the stockholders of the Company of any merger, consolidation or reorganization involving the Company, unless either (A) the stockholders of the Company immediately before such merger, consolidation or reorganization own, directly or indirectly immediately following such merger, consolidation or reorganization, at least 60% of the combined voting power of the company(ies) resulting from such merger, consolidation or reorganization in substantially the same proportion as their ownership immediately before such merger, consolidation or reorganization, or (B) the stockholders of the Company immediately after such merger, consolidation or reorganization include Permitted Holders;

4. approval by the stockholders of the Company of a transfer of 50% or more of the assets of the Company or a transfer of assets that during the current or either of the prior two fiscal years accounted for more than 50% of the Company’s revenues or income (for the avoidance of doubt, “assets” for this purpose shall exclude cash, cash equivalents and marketable securities), unless the person to which such transfer is made is either (A) a Subsidiary of the Company, (B) wholly owned by all of the stockholders of the Company, or (C) wholly owned by Permitted Holders; or

5. approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

C. “Permitted Holders” means:

1. the Company,

2. any Subsidiary,

3. any employee benefit plan of the Company or any Subsidiary, and

4. any group which includes or any person who is wholly or partially owned by a majority of the individuals who immediately prior to such acquisition of securities or stockholder approval under Sections A(i), A(iii) or A(iv) are executive officers (as defined in Exchange Act Rule 3b-7) of the Company or any successor of the Company; provided that immediately prior to and for six months following such acquisition of securities or stockholder approval such executive officers of the Company are beneficial owners (as defined in Exchange Act Rule 16a-1(a)(2)) of the common stock of the Company or any successor of the Company; and provided further that such executive officers’ employment is not terminated by the Company or any successor of the Company (other than as a result of death or disability) during the six months following such acquisition of securities or stockholder approval. A Change of Control shall be deemed to have occurred on any date within six months following an acquisition of securities or stockholder approval under Sections A(i), A(iii) or A(iv) on which any of the conditions set forth in this clause (iv) cease to be satisfied.

D. “Subsidiary” means any corporation in which the Company owns, directly or indirectly, stock possessing 50% or more of the total combined voting power of all classes of stock in such corporation.

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EX-10.23

Exhibit 10.23

February 4, 2010

Thomas L. Monahan, III
Chairman of the Board and Chief Executive Officer
The Corporate Executive Board Company
1919 North Lynn Street
Arlington, VA 22209

Re: Collaboration Agreement, dated as of February 6, 2007, by and between The Corporate Executive Board Company and The Advisory Board Company (the “Collaboration Agreement”)

Dear Tom:

This letter confirms that The Corporate Executive Board Company (“CEB”) and The Advisory Board Company (“ABCO”) have agreed to extend the Initial NP Term and the Initial EC Term (as such terms are defined in the Collaboration Agreement) through February 5, 2012 as contemplated by Sections 3.3(a) and 3.4(a) of the Collaboration Agreement, respectively, effective as of February 4, 2010.

Please indicate your agreement with the foregoing by signing and returning one copy of this letter to my attention, which shall constitute CEB’s and ABCO’s agreement with respect to the subject matter hereof.

Very truly yours,
 

/s/ Robert W. Musslewhite  

Robert W. Musslewhite 

Chief Executive Officer 

ACCEPTED AND AGREED:
THE CORPORATE EXECUTIVE BOARD COMPANY
By:	/s/ Thomas L. Monahan, III
	Thomas L. Monahan, III
	Chairman of the Board and Chief Executive Officer

EX-10.24

Exhibit 10.24

AGREEMENT AND RELEASE

IT IS HEREBY AGREED by and between Glenn Tobin (“Employee”) and The Corporate Executive Board Company (“CEB”), for the good and sufficient consideration set forth below, as follows:

1. Employee resigns his employment with CEB, and CEB accepts Employee’s resignation, effective March 31, 2009 (the “date of separation”). Employee agrees to comply with CEB’s policies and procedures and, as requested by CEB, to continue to work and to perform all duties in a professional and satisfactory manner and to provide assistance in the transition of Employee’s responsibilities through and including the date of separation. Subject to Employee’s compliance with these conditions and the remaining provisions of this Agreement and Release, CEB agrees:

(a) (i) to employ Employee through the date of separation and (ii) to make available to Employee, at CEB’s expense, outplacement services through a provider designated by CEB for a period of nine (9) months commencing no later than the date of separation;

(b) (i) to provide Employee with salary continuation at Employee’s current salary rate, minus applicable withholdings and deductions, from the date following the date of separation through and including March 31, 2010 (ii) to pay the employer portion of any Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premium, or any Retiree Medical Plan premium, through and including March 31, 2010 if Employee elects COBRA or Retiree Medical coverage; and

(c) to pay to Employee a bonus in the amount of $120,000, minus applicable withholdings and deductions, on or about May 29, 2009. (This amount includes Employee’s 2008 bonus and a pro rata bonus for 2009.)

Employee’s benefits will be governed by applicable plan terms. (Employee may elect to continue health insurance coverage, following the date of separation at Employee’s own expense, in accordance with the provisions of COBRA, regardless of whether Employee enters into this Agreement and Release.)

2. Employee acknowledges receipt of any salary, wages, incentives, bonuses, commissions and any other type of compensation, as well as payment for accrued, unused paid time off, where mandated by law, due to Employee, and Employee acknowledges that Employee has been paid in full and is owed no additional compensation of any kind, for work performed through and including the last paycheck prior to the date of this Separation Agreement. Employee further acknowledges that, as of the date of Employee’s signing of this Agreement and Release, Employee has sustained no injury or illness related in any way to Employee’s employment with CEB for which a workers compensation claim has not already been filed.

3. In return for CEB’s agreement to provide Employee with the consideration referred to in Paragraph 1, Employee, for Employee and Employee’s heirs, beneficiaries, devisees, privies, executors, administrators, attorneys, representatives, and agents, and Employee’s and their assigns, successors and predecessors, hereby releases and forever discharges CEB and its parents, subsidiaries and affiliates, its and their officers, directors, employees, members, agents, attorneys and representatives, and the predecessors, successors and assigns of each of the foregoing (collectively, the “Released Parties”) from any and all actions, causes of action, suits, debts, claims, complaints, charges, contracts, controversies, agreements, promises, damages, counterclaims, cross-claims, claims for contribution and/or indemnity, claims for costs and/or attorneys’ fees, judgments and demands whatsoever, in law or equity, known or unknown, Employee ever had, now has, or may have against the Released Parties as of the date of Employee’s signing of this Agreement and Release. This release includes, but is not limited to, any claims alleging breach of express or implied contract, wrongful discharge, constructive discharge, breach of an implied covenant of good faith and fair dealing, negligent or intentional infliction of emotional distress, negligent supervision or retention, violation of the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Virginia Human Rights Act or the Arlington County Human Rights Ordinance, claims pursuant to any other federal, state or local law regarding discrimination, harassment or retaliation based on age, race, sex, religion, national origin, marital status, disability, sexual orientation or any other unlawful basis or protected status or activity, and claims for alleged violation of any other local, state or federal law, regulation, ordinance, public policy or common-law duty having any bearing whatsoever upon the terms and conditions of, and/or the cessation of Employee’s employment with and by CEB. This release does not include claims that may not be released under applicable law.

4. Employee agrees not only to release and discharge the Released Parties from any and all claims against the Released Parties that Employee could make on Employee’s own behalf, but also those which may have been or may be made by any other person or organization on Employee’s behalf. Employee specifically waives any right to become, and promises not to become, a member of any class in a case in which any claim or claims are asserted against any of the Released Parties based on any acts or omissions occurring on or before the date of Employee’s signing of this Agreement and Release. If Employee is asserted to be a member of a class in a case against any of the Released Parties based on any acts or omissions occurring on or before the date of Employee’s signing of this Agreement and Release, Employee shall immediately withdraw with prejudice in writing from said class, if permitted by law to do so. Employee agrees that Employee will not encourage or assist any person in filing or pursuing any proceeding, action, charge, complaint, or claim against the Released Parties, except as required by law.

5. This Agreement and Release is not intended to interfere with Employee’s exercise of any protected, nonwaivable right, including Employee’s right to file a charge with the Equal Employment Opportunity Commission or other government agency. By entering into this Agreement and Release, however, Employee acknowledges that the consideration set forth herein is in full satisfaction and is inclusive of any and all amounts, including but not limited to attorneys’ fees, to which Employee might be entitled or which may be claimed by Employee or on Employee’s behalf against the Released Parties and Employee is forever discharging the Released Parties from any liability to Employee for any acts or omissions occurring on or before the date of Employee’s signing of this Agreement and Release.

6. Neither this Agreement and Release, nor anything contained herein, shall be construed as an admission by the Released Parties of any liability or unlawful conduct whatsoever. The parties hereto agree and understand that the consideration set forth in Paragraph 1 is in excess of that which CEB is obligated to provide to Employee, and that it is provided solely in consideration of Employee’s execution of this Agreement and Release. CEB and Employee agree that the consideration set forth in Paragraph 1 is sufficient consideration for the release being given by Employee in Paragraphs 3, 4 and 5, and for Employee’s other promises herein.

7. Employee will direct all requests for references to Melody Jones, Chief Human Resources Officer. Ms. Jones will confirm Employee’s job title, dates of employment and Employee’s salary. Employee agrees to refrain from making statements that may reasonably be construed as disparaging of the Released Parties, and CEB agrees that its Corporate Leadership Team will refrain from making statements that may reasonably be construed as disparaging of Employee.

8. Employee agrees not to use, disclose to others, or permit anyone access to any of CEB’s trade secrets or confidential or proprietary information without CEB’s express consent, and to return immediately to CEB all CEB property upon termination of Employee’s employment. Employee shall not retain any copy or other reproduction whatsoever of any CEB property after the termination of Employee’s employment. Employee will also comply with the Employer Protection Agreement executed by Employee on April 19, 2007. The parties agree that Employee will be deemed to have “voluntarily resigned” for purposes of the Employer Protection Agreement.

9. Following the date of separation, Employee agrees to provide such reasonable assistance as CEB may request with respect to matters relating to Employee’s work for CEB, provided that, if such assistance is requested after March 31, 2010, CEB provides reasonable compensation to Employee for time and expenses incurred in providing such assistance to CEB.

10. Each party shall bear its own costs and attorneys’ fees, if any, incurred in connection with this Agreement and Release.

11. This Agreement and Release contains the full agreement of the parties and may not be modified, altered, changed or terminated except upon the express prior written consent of CEB and Employee or their authorized agents. It expressly supersedes all prior agreements and understandings between the parties with respect to its subject matter, including but not limited to the Severance Agreement dated July 30, 2004. For the avoidance of doubt, the parties agree that the Indemnity Agreement dated March 6, 2008, remains in force.

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12. Employee acknowledges and agrees that: (a) no promise or inducement for this Agreement and Release has been made except as set forth in this Agreement and Release; (b) this Agreement and Release is executed by Employee without reliance upon any statement or representation by CEB except as set forth herein; (c) Employee is legally competent to execute this Agreement and Release and to accept full responsibility therefore; (d) Employee has been given twenty-one (21) days within which to consider this Agreement and Release; (e) Employee has used all or as much of that twenty-one (21) day period as Employee deemed necessary to consider fully this Agreement and Release and, if Employee has not used the entire twenty-on (21) day period, Employee waives that period not used; (f) Employee has read and fully understands the meaning of each provision of this Agreement and Release; (g) CEB has advised Employee to consult with an attorney concerning this Agreement and Release; (h) Employee freely and voluntarily enters into this Agreement and Release; and (i) no fact, evidence, event, or transaction currently unknown to Employee but which may hereafter become known to Employee shall affect in any manner the final and unconditional nature of the release stated above.

13. This Agreement and Release shall become effective and enforceable on the eighth (8th) day following execution hereof by Employee unless Employee revokes it by so advising CEB in writing received by Melody Jones, Chief Human Resource Officer, at CEB’s offices at 1919 North Lynn Street, Arlington, VA 22209 before the end of the seventh (7th) day after its execution by Employee.

14. CEB and Employee agree that any dispute arising under or relating in any way to this Agreement and Release will be submitted to arbitration in Northern Virginia, in front of a single arbitrator, in accordance with the then-current employment dispute resolution rules of the American Arbitration Association, as the exclusive remedy for such dispute, except that CEB reserves the right to seek preliminary or injunctive relief and/or appropriate equitable relief in a court of competent jurisdiction for violations by Employee of Paragraphs 7 or 8 of this Agreement and Release. CEB and Employee agree that such arbitration will be confidential except that the parties may discuss the arbitration if required by law or as reasonably necessary to prosecute or defend the arbitration or to enforce any decision in such arbitration. Any damages awarded in such arbitration shall be limited to the contract measure of damages, and shall not include punitive damages. Each party shall be responsible for its own attorneys’ fees and costs associated with such arbitration, except that, to the extent permitted by law, the cost of the arbitration (such as the Arbitrator’s fee) shall be shared equally between CEB and Employee.

15. This Agreement and Release shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia.

16. The waiver by any party of a breach of any provision herein shall not operate or be construed as a waiver of any subsequent breach by any party.

17. The provisions of this agreement are severable. Should any provision herein be declared invalid by a court or arbitrator of competent jurisdiction, the remainder of the agreement will continue in force, and the parties agree to renegotiate the invalidated provision in good faith to accomplish its objective to the extent permitted by law.

18. This Agreement and Release may be signed in counterparts, and each counterpart shall be considered an original agreement for all purposes.

IN WITNESS WHEREOF, the parties have hereunto set their hands.

/s/ Glenn Tobin	/s/ Melody Jones
Glenn Tobin	For The Corporate Executive Board Company
February 4, 2009	February 4, 2009
Date	Date

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EX-10.25

Exhibit 10.25

Severance Program-Corporate Leadership Team

PURPOSE

The Corporate Executive Board (“CEB” or “Company”) provides a severance program for Corporate Leadership Team (“CLT”) members, at the levels of Executive Director and above, to provide severance benefits in the event that a member of the CLT is terminated without Cause. This program is in lieu of the Severance Program-U.S. Staff, and completely supersedes that program for CLT members.

Definitions Applicable to Severance Program — Corporate Leadership Team

“Base Salary” means the CLT member’s annual rate of base salary in effect on the date of the CLT member’s termination of employment, determined in each case prior to reduction for any employee-elected salary reduction contributions made to an employer-sponsored non-qualified deferred compensation plan or an employer-sponsored plan pursuant to Section 401(k) or 125 of the Internal Revenue Code, and excluding bonuses, allowances, commissions, deferred compensation payments and any other extraordinary remuneration.

“Cause” shall mean CLT member’s commission of a material act of fraud, theft or dishonesty against the Company; conviction of any felony; or willful non-performance of material duties which is not cured within sixty (60) days after receipt of written notice to the CLT member.

“Corporate Leadership Team member” shall mean members of the Corporate Leadership Team of the Company, at the levels of Executive Director and above. This policy applies to Executive Director and above members of the CLT once they have served as an official member of the CLT for twelve consecutive months, and applies only during the time they serve as an official part of this leadership body of the firm; should any CLT member rotate off this leadership body, yet remain employed by the Company, he/she will be administered under the Company’s standard Severance Program at and after the time of rotation off the Corporate Leadership Team.

“Release” shall mean a release to be signed by the CLT member in such form as the Company shall determine, which shall, to the extent permitted by law, waive all claims and actions against the Company and its affiliates and such other related parties and entities as the Company chooses to include in the release except for claims and actions for benefits provided under this Severance Program (which Release is not revoked by the CLT member).

“Target Bonus” shall mean the CLT member’s annual target bonus (as defined in the Corporate Leadership Team Bonus Plan) for the year in which the termination occurs.

Eligibility

To be eligible for this program, an individual must have a title of Executive Director or above, must have served as a member of the CLT for at least twelve consecutive months, and must be an active member of the CLT, as defined above. The requirement of twelve consecutive months of service on the CLT may be waived on a case-by-case basis in the Company’s sole discretion by the Compensation Committee or, in the case of CLT members who are not Named Executive Officers, by the Company’s Chairman and Chief Executive Officer. This program does not apply to the Company’s Chairman and Chief Executive Officer.

Severance Benefits

(a) If the CLT member is terminated from employment with CEB without Cause, then he/she shall be entitled to receive, in lieu of any further payments (including, without limitation, in lieu of any annual bonus payments or pro-rata bonus payments), a cash amount equal to the sum of (i) twelve (12) months of Base Salary and (ii) a pro rata Target Bonus for the year in which the termination occurs. The base salary will be paid in equal installments over the twelve (12) months following the CLT member’s termination, and commencing within ten (10) business days following his/her termination (or, if later, upon the expiration of the revocation period, if applicable, under the Release, but in no event later than the later of the December 31 next-following the termination or 2-1/2 months after the termination). The pro rata Target Bonus will be paid in a lump sum within ten (10) business days following the CLT member’s termination (or, if later, upon the expiration of the revocation period, if applicable, under the Release). These payments are in lieu of (and not in addition to) any severance payments the CLT member may have been entitled to receive under any other agreement, plan or policy (including any Change in Control Severance Agreement or Employment Agreement), and any payments under any such agreement, plan or policy shall offset dollar-for-dollar the amounts payable hereunder.

(b) If the CLT member is terminated from employment with CEB without Cause, for a period of twelve (12) months following the CLT member’s termination (the “coverage period”), he/she shall be entitled to the continuation of the same or equivalent health benefit coverage as he/she was receiving immediately prior to termination at active employee rates, and his/her COBRA period shall commence at the end of such twelve (12) month period. These benefits shall be reduced to the extent of the eligibility of the CLT member for substantially equivalent coverage from any successor employer.

(c) Receipt of above benefits is subject to the CLT member signing (and not revoking) a Release as defined above. The above benefits are available only to CLT members who are terminated by CEB without Cause, and are not available in the event of voluntary resignation or termination due to death or disability or for Cause.

Accrued Benefits

Upon termination of the employment of the CLT member for any reason, he/she shall be entitled to receive any unpaid Base Salary through the date of such termination and any bonus earned but unpaid as of the date of such termination for any previously-completed fiscal year of the Company. In addition, the CLT member shall be entitled to prompt reimbursement of any unreimbursed expenses properly incurred in accordance with Company policies prior to the date of his/her termination. The CLT member shall also receive such other compensation (including any stock options or other equity-related payments) and benefits, if any, to which he/she may be entitled from time to time pursuant to the terms and conditions of the employee compensation, incentive, equity, benefit or fringe benefit plans, policies or programs of the Company.

Section 409A of the Internal Revenue Code

Notwithstanding any other provision of this Severance Program to the contrary, severance benefits pursuant to the Severance Program, to the extent of payments made from the date of termination of the CLT member’s employment through March 15 of the calendar year following such termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury regulations and thus are payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations. To the extent such severance payments are made following said March 15, they are intended to constitute separate payments for purposes of Section 1.409A-1(b)(9)(iii) of the Treasury Regulations to the maximum extent permitted by said provision, with any excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Internal Revenue Code that payment be delayed until six (6) months after separation from service if the CLT member is a “specified employee” with the meaning of the aforesaid section of the Internal Revenue Code at the time of such separation from service.

Amendment

CEB reserves the right to amend and/or discontinue this program at any time through action of the Board of Directors or the Compensation Committee. The Compensation Committee reserves the right to interpret the terms of the program, and any such interpretation shall be final and binding on all persons.

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EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

Active subsidiaries of The Corporate Executive Board Company as of December 31, 2009:

Company Name	Jurisdiction of Organization
The Corporate Executive Board Company (UK) Ltd.	United Kingdom
Corporate Executive Board India Private Ltd.	India
CEB International Holdings, Inc.	United States
Toolbox.com, Inc.	United States
CEB Canada Inc.	Canada
Genesee Survey Services, Inc.	United States
CEB Israel, Ltd.	Israel
CEB Tower, Inc.	United States
The Tower Group, Inc.	United States
TowerGroup Europe Ltd.	United Kingdom
The Corporate Executive Board Spain, S.L.	Spain

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of The Corporate Executive Board Company of our reports dated March 1, 2010, with respect to the consolidated financial statements and schedule of The Corporate Executive Board Company, and the effectiveness of internal control over financial reporting, included in this Annual Report (Form 10-K) for the year ended December 31, 2009:

Registration Statements on Form S-3:

Registration Number	Date Filed
333-55864	February 20, 2001
333-82642	February 21, 2002
333-113218	March 15, 2004

Registration Statements on Form S-8:

Name	Registration Number		Date Filed
Amended Directors’ Stock Plan		333-74145	March 9, 1999
1999 Stock Option Plan		333-74145	March 9, 1999
Employee Stock Purchase Plan		333-39832	June 22, 2000
2001 Stock Option Plan		333-67238	August 10, 2001
2002 Non-Executive Stock Incentive Plan		333-103538	February 28, 2003
2004 Stock Incentive Plan		333-117774	July 30, 2004
Deferred Compensation Plan		333-138685	November 14, 2006
2004 Stock Incentive Plan		333-150744	May 8, 2008

/s/ Ernst & Young LLP

Baltimore, Maryland
March 1, 2010

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Thomas L. Monahan III, certify that:

1. I have reviewed this annual report on Form 10-K of The Corporate Executive Board Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2010

/s/ Thomas L. Monahan III

Thomas L. Monahan III

Chairman of the Board of Directors and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard S. Lindahl, certify that:

1. I have reviewed this annual report on Form 10-K of The Corporate Executive Board Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2010

/s/ Richard S. Lindahl

Richard S. Lindahl

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION
OF
CHIEF EXECUTIVE OFFICER
AND
CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas L. Monahan III, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Annual Report on Form 10-K of The Corporate Executive Board Company for the fiscal year ended December 31, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of The Corporate Executive Board Company.

Date: March 1, 2010

/s/ Thomas L. Monahan III

Thomas L. Monahan III

Chairman of the Board of Directors and

Chief Executive Officer

I, Richard S. Lindahl, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Annual Report on Form 10-K of The Corporate Executive Board Company for the fiscal year ended December 31, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of The Corporate Executive Board Company.

Date: March 1, 2010

/s/ Richard S. Lindahl

Richard S. Lindahl

Chief Financial Officer