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                                                                   EXHIBIT 10.16

                          THE ADVISORY BOARD COMPANY
                                TERM SHEET FOR
                     DIRECTOR NON-QUALIFIED STOCK OPTIONS

FOR GOOD AND VALUABLE CONSIDERATION, The Advisory Board Company, a Maryland
corporation (the "Company"), hereby grants to Optionee named below the
non-qualified stock option (the "Option") to purchase any part or all of the
number of shares of its $0.01 par value Class B Nonvoting Common Stock (the
"Common Stock") that are covered by this Option, as specified below, at the
Exercise Price per share specified below and upon the terms and subject to the
conditions set forth in this Term Sheet, the Plan specified below (the "Plan")
and the Standard Terms and Conditions (the "Standard Terms and Conditions")
promulgated under such Plan, each as amended from time to time. This Option is
granted pursuant to the Plan and is subject to and qualified in its entirety by
the Standard Terms and Conditions.

<TABLE>
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<S>                               <C>
The Plan:                         This Option is granted pursuant to the Company's
                                  Directors' Stock Plan attached hereto as Exhibit A.
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Name of Optionee:
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Social Security Number:
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Grant Date:
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Number of Shares of Common
Stock covered by Option:
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Exercise Price Per Share:         $
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Expiration Date:
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Vesting Schedule:
                                  -----------, subject to the Standard Terms and Conditions
                                  attached hereto as Exhibit B.
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</TABLE>

This Option is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended. By accepting this
Term Sheet, Optionee acknowledges that he or she has received and read, and
agrees that this Option shall be subject to, the terms of this Term Sheet, the
Plan and the Standard Terms and Conditions.

THE ADVISORY BOARD COMPANY           THE OPTIONEE

By:
    --------------------------       ------------------------------------------
Name:                                Name:
Title:                               Address:

<PAGE>   2
                         THE ADVISORY BOARD COMPANY
                      STANDARD TERMS AND CONDITIONS FOR
                    DIRECTOR NON-QUALIFIED STOCK OPTIONS

1.      TERMS OF OPTION

        THE ADVISORY BOARD COMPANY, a Maryland 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 (the
        "Option") to purchase any part or all of the number of shares of the
        Company's Class B 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 specified in the Term Sheet (the "Plan"). The Option
        is granted in consideration for Optionee's service as a director of the
        Company.

2.      NON-QUALIFIED STOCK OPTION

        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.      CONTINUED SERVICE

        Except as otherwise provided in these Standard Terms and Conditions and
        the Plan, the Option shall be exercisable only if Optionee serves as a
        director of the Company on the date that the Option becomes vested, as
        set forth in the Term Sheet.

4.      OPTION EXERCISE PRICE

        The exercise price (the "Exercise Price") of the Option is set forth in
        the Term Sheet.

5.      TERM OF OPTION AND EXERCISE OF OPTION

        To the extent not previously exercised, and subject to termination or
        acceleration as provided in these Standard Terms and Conditions, the
        Option shall be fully exercisable on and after 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. Notwithstanding anything to
        the contrary in Sections 6 through 9 hereof, no part of the Option may
        be exercised after ten (10) years from the grant date set forth in the
        Term Sheet.

        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 Company shall not be

<PAGE>   3
        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.
        The Exercise Price may be paid (a) in cash, (b) by payment under an
        arrangement with a broker where payment is made pursuant to an
        irrevocable direction to the broker to deliver all or part of the
        proceeds from the sale of the Option shares to the Company, (c) by
        tendering (either physically or by attestation) shares of Common Stock
        owned by Optionee and having a Market Value (defined in the Plan) on the
        date of exercise equal to the Exercise Price but only if such will not
        result in an accounting charge to the Company, or (d) by any combination
        of the foregoing. In addition, the Exercise Price may be payable in such
        other form(s) of consideration as the Committee (defined in the Plan) in
        its discretion shall specify, including without limitation by loan or by
        techniques that may result in an accounting charge to the Company.
        Fractional shares may not be exercised. Shares of Common Stock will be
        issued as soon as practical after exercise. Optionee will have the
        rights of a stockholder only after the shares of Common Stock have been
        issued.

        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.

6.      TERMINATION OF RELATIONSHIP

        After the effective date of his or her election as a director, if
        Optionee ceases to be a director of the Company for any reason other
        than death, Disablement (defined below) or Retirement (defined below),
        Optionee may at any time within ninety (90) days from the date of such
        termination exercise the Option to the extent it was exercisable on the
        date of termination. After such ninetieth (90th) day, the Option shall
        terminate to the extent that it is unexercised.

7.      DEATH

        If Optionee ceases to be a director of the Company on account of
        Optionee's death while in the service of the Company as a director, the
        executor of Optionee's will, administrator of Optionee's estate or any
        successor trustee of a grantor trust may exercise Optionee's rights
        during the twelve (12) months next succeeding the date of death. The
        number of shares exercisable by Optionee's estate or beneficiary will be
        the total number of unexercised shares under the Option were exercisable
        on the date of Optionee's death. If Optionee dies within thirty (30)
        days of ceasing service with the Company as a director, the executor of
        Optionee's will, administrator of Optionee's estate or any successor
        trustee of a grantor trust may exercise within twelve (12) months from
        the date of Optionee's termination those outstanding options which were
        exercisable on the date of Optionee's termination.

        After either twelve (12) month period described in this Section 7, the
        Option shall terminate to the extent that it is unexercised.

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8.      DISABILITY

        If Optionee ceases to be a director of the Company on account of
        Optionee's Disablement, Optionee may within twelve (12) months from the
        date of Optionee's Disablement exercise the Option to the extent it was
        exercisable on the date of Optionee's Disablement. After such twelve
        (12) month period, the Option shall terminate to the extent that it is
        unexercised. For purposes of these Standard Terms and Conditions,
        "Disablement" means a physical condition arising from an illness or
        injury which renders an individual incapable of performing work. The
        determination of the Committee as to an individual's Disablement shall
        be conclusive on all of the parties.

9.      RETIREMENT

        If Optionee ceases to be a director of the Company on account of
        Optionee's retirement from the Board of Directors, the Option, to the
        extent it was exercisable on the date of Retirement, may be exercised by
        Optionee for a period of twelve (12) months following the date of
        Optionee's Retirement.

        After such twelve (12) month period, the Option shall terminate to the
        extent that it is unexercised. "Retirement" means ceasing from service
        as a director of the Company at or after age 60.

10.     INCOME TAXES WITHHOLDING

        The Company shall not be obligated to issue any shares of Common Stock
        pursuant to the exercise of the Option until the Optionee has satisfied
        in full any and all taxes and tax withholding requirements as may be
        applicable. Such taxes may be paid in the manner provided for payment of
        the Exercise Price of the Option. The Committee may, in its discretion,
        make such provisions and take such steps as it may deem necessary or
        appropriate for the withholding of all federal, state, local and other
        taxes required by law to be withheld with respect to the issuance or
        exercise of the Option including, but not limited to, deducting the
        amount of any such withholding taxes from any amount then or thereafter
        payable to the Optionee.

11.     NON-TRANSFERABILITY OF OPTION

        Unless otherwise provided by the Committee, Optionee may not assign or
        transfer the Option to anyone other than by will or the laws of descent
        and distribution and Options shall be exercisable only by Optionee
        during his or her lifetime. The Company may cancel Optionee's Option if
        Optionee attempts to assign or transfer it in a manner inconsistent with
        this Section 11.

12.     DISPUTES

        Any disagreement concerning Optionee's Option shall be finally and
        conclusively determined as provided in the Plan.

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<PAGE>   5
13.     THE PLAN AND OTHER AGREEMENTS

        The provisions of the Plan are incorporated into these Standard Terms
        and Conditions by this reference. In the event of a conflict between the
        terms and conditions of these Standard Terms and Condition and the Plan,
        the Plan controls. 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 Optionee and the Company
        regarding the Option. Any prior agreements, commitments or negotiations
        concerning the Option are superseded.

14.     NO INTEREST IN SHARES SUBJECT TO OPTION.

        Neither Optionee (individually or as a member of a group) nor any
        beneficiary or other person claiming under or through 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.

15.     NOT A CONTRACT FOR SERVICES.

        Nothing in the Plan, in the Term Sheet, these Standard Terms and
        Conditions or any other instrument executed pursuant the Plan shall
        confer upon Optionee any right to continue to serve as a director of the
        Company or shall affect the right of the Company to terminate Optionee
        with or without cause.

16.     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 Advisory Board Company
        600 New Hampshire Avenue, N.W.
        Washington, D.C.  20037
        Attention:  Chairman of the Board

        If to the Optionee, to the address set forth below the Optionee's
        signature on the Term Sheet.

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<PAGE>   6
17.     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.

18.     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.

19.     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.

20.     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.

                                       5<PAGE>   1
                                                                   EXHIBIT 10.17

                             OPTION REPURCHASE PLAN

       THIS OPTION REPURCHASE PLAN (this "Agreement") is made as of March 31,
2001 (the "Effective Date"), between The Advisory Board Company, a Maryland
corporation (the "Company"), and Richard Schwartz (the "Employee").

                                R E C I T A L S

       A.  The Company adopted the Stock-Based Incentive Compensation Plan (the
"Plan") to provide for the grant of options ("Options") to certain employees of
the Company ("Participants") to purchase shares of Class B Nonvoting Stock,
$0.01 par value, of the Company (the "Stock").

       B. As a Participant, Employee was granted Options as reflected in the
stock option agreements between the Employee and the Company (the "Option
Agreements").

       C. The Options are not transferable.

       D. The Employee has been granted Options as follows:

          October 1997     7,200 options @ $200 per share
          November 1998    4,000 options @ $175 per share
          June 1999        28,800 options @ $120 per share
          December 2000    1,875 options @ $120 per share

       E. The Company and Employee now desire to effect the repurchase of
certain Options resulting in the cancellation of the October 1997, November
1998 and December 2000 Option Agreements and the modification of the number of
Options granted pursuant to the June 1999 Option Agreement.

                               AGREEMENTS

       1. DEFINITIONS. Capitalized terms used herein shall have the following
meanings:

       "Agreement" is defined in the preamble.

       "Agreement Not to Compete" is the Agreement Concerning Exclusive
Services, Confidential Information, Business Opportunities, Non-Competition,
Non-Solicitation and Work Product between the Employee and the Company attached
as Exhibit A.

       "Cause" for termination is the commission of an act of fraud, theft or
dishonesty against the Company; arrest or conviction for any felony; arrest or
conviction for any misdemeanor involving moral turpitude which might, in the
Company's opinion, cause embarrassment to the Company; misconduct; substance
abuse; insubordination; violation of Company policy; willful or repeated
non-performance or substandard performance of duties; violation of any District
of Columbia, state or federal laws, rules or regulations in connection with or
during performance of work; or Performance Inconsistent with Past Levels of
Contribution, as defined below.

<PAGE>   2
       "Company" is defined in the preamble.

       "Disability" shall mean a serious and permanent medical incapacity or
disability that precludes the Employee from performing professional work. The
Company, at its option and expense, shall be entitled to retain a physician
reasonably acceptable to the Optionee to confirm the existence of such
incapacity or disability. The Chairman of the Board of Directors of the Company
reserves the right to define Disability in a more liberal manner.

       "Effective Date" is defined in the preamble.

       "Employee" is defined in the preamble.

       "Option Agreement" is defined in Recital B.

       "Options" is defined in Recital A.

       "Plan" is defined in Recital A.

       "Participants" is defined in Recital A.

       "Stock" is defined in Recital A.

       "Voluntary Resignation Date" means the date on which the Employee ceases
employment with the Company for voluntary reasons. Voluntary Resignation Date
shall not include the date on which the Employee ceases to be employed by the
Company due to death or a Disability.

       2. OPTION REPURCHASE PLAN. The Employee hereby agrees to the following
regarding the Option Repurchase Plan and existing stock option plans.

       a. Employee hereby agrees to the cancellation of 15,000 previously
granted Options for $1,000,000. The Options to be cancelled are as follows:

          October 1997 grant     7,200 options (100% of position)
          November 1998 grant    4,000 options (100% of position)
          June 1999 grant        1,925 options (partial position)
          December 2000 grant    1,875 options (100% of position)

       b. Employee hereby acknowledges that the previously executed Agreement
Not to Compete shall remain in full force and effect.

       c. Employee hereby acknowledges that the Stock Option Agreements dated
October 31, 1997, November 1, 1998 and December 1, 2000 are cancelled effective
as of the date of this Option Repurchase Plan. Furthermore, Employee hereby
acknowledges that the Stock Option Agreement dated June 15, 1999 between the
Company and the Employee is hereby modified to reflect Options to purchase
26,875 Options at a purchase price of $120.00 per Option; this modification is
effective as of the date of this Option Repurchase Plan. All other

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<PAGE>   3
terms and conditions of the June 15, 1999 Stock Option Agreement remain in full
force and effect.

       d. Employee hereby agrees to the Option Repurchase Plan as consideration
for the agreements modified above. Under the Option Repurchase Plan, scheduled
payments will be made to the Employee as described in Section 3 below.

       3. PAYMENTS TO BE MADE BY THE COMPANY. The Company agrees to pay to
Employee as scheduled below:

          May 2001      $300,000
          May 2002      $300,000
          May 2003      $400,000

       a. These payments will be made as long as the Employee is employed by
the Company at the date of the scheduled payment.

       b. If the employee is terminated for Cause or if there is a Voluntary
Resignation Date prior to May 30, 2003, the Employee must repay to the Company
all amounts previously received in accordance with this agreement.

       4. NONTRANSFERABILITY. The right to all or any portion of the payments
shall not be transferable by the Employee except, after the Employee's death,
to his or her spouse, child, estate, personal representative, heir or successor.

       5. TAXES. The Company may, in its discretion, make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
all federal, state, local and other taxes required by law to be withheld with
respect to scheduled payments, including but not limited to, deducting the
amount of any such withholding taxes from any other amount then or thereafter
payable to the Employee, requiring the Employee to pay to the Company the
amount required to be withheld or to execute such documents as the Committee
deems necessary or desirable to enable it to satisfy its withholding
obligations, or any other reasonable means.

       6. NOTICES. All notices, requests, demands and other communications
pursuant to this Agreement 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, if to the Company at its principal
executive offices addressed to the attention of the Company's Chairman of the
Board of Directors, and if to Employee at his or her address as it appears on
the books of the Company (or at such other address as shall be given in writing
by Employee or his or her permitted transferee to the Company).

       7. AMENDMENTS AND WAIVERS. This Agreement may be amended, and any
provision hereof may be waived, only by a writing signed by the party to be
charged.

       8. ENTIRE AGREEMENT. This Agreement and the related Agreement Not to
Compete sets forth the entire agreement and understanding between the parties as
to the subject matter hereof (including, but not limited to, any rights of the
Employee to any value or appreciation in

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<PAGE>   4

value of the Company or its capital stock) and supersedes all prior oral
and written and all contemporaneous oral discussions, agreements and
understandings of any kind or nature.

       9. HEADINGS. The headings preceding the text of the sections hereof are
inserted solely for convenience of reference, and shall not constitute a part
of this Agreement, nor shall they affect its meaning, construction or effect.

       10. 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 this Agreement.

       11. GOVERNING LAW. All terms of and rights under this Agreement shall be
governed by and construed in accordance with the internal law of the State of
Maryland, without giving effect to principles of conflicts of law.

       12. ARBITRATION. The parties shall endeavor to settle all disputes by
amicable negotiations. Any claim, dispute, disagreement or controversy that
arises among the parties relating to this Agreement (excluding enforcement by
the Company of its rights under the Agreement Not to Compete) that is not
amicably settled shall be resolved by arbitration, as follows:

       a. Any such arbitration shall be heard in the District of Columbia,
before a panel consisting of one (1) to three (3) arbitrators, each of whom
shall be impartial. Except as the parties may otherwise agree, all arbitrators
shall be appointed in the first instance by the appropriate official in the
District of Columbia office of the American Arbitration Association or, in the
event of his or her unavailability by reason of disqualification or otherwise,
by the appropriate official in the New York City office of the American
Arbitration Association. In determining the number and appropriate background of
the arbitrators, the appointing authority shall give due consideration to the
issues to be resolved, but his or her decision as to the number of arbitrators
and their identity shall be final. Except as otherwise provided in this Section
13, all of the arbitration proceedings shall be conducted in accordance with the
rules of the arbitrators.

       b. An arbitration may be commenced by any party to this Agreement by the
service of a written request for arbitration upon the other affected parties.
Such request for arbitration shall summarize the controversy or claim to be
arbitrated, and shall be referred by the complaining party to the appointing
authority for appointment of arbitrators ten (10) days following such service or
thereafter. If the panel of arbitrators is not appointed by the appointing
authority within thirty (30) days following such reference, any party may apply
to any court within the District of Columbia for an order appointing arbitrators
qualified as set forth above.

       c. All attorneys' fees and costs of the arbitration shall in the first
instance be borne by the respective party incurring such costs and fees, but the
arbitrators shall have the discretion to award costs and/or attorneys' fees as
they deem appropriate under the circumstances. The parties hereby expressly
waive punitive damages, and under no circumstances shall an award contain any
amount that in any way reflects punitive damages.

       d. Judgment on the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.

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<PAGE>   5
       e. It is intended that controversies or claims submitted to arbitration
under this Section 13 shall remain confidential, and to that end it is agreed by
the parties that neither the facts disclosed in the arbitration, the issues
arbitrated, nor the views or opinions of any persons concerning them, shall be
disclosed to third persons at any time, except to the extent necessary to
enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration.

       13. ACTIONS BY THE COMPANY. Any reference within this Agreement to an
action, judgment, conclusion, or determination by the Company shall mean an
action, judgment, conclusion, or determination of the Board of Directors of the
Company or its authorized representative(s).

       14. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective permitted successors and
assigns.

       IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

                             THE ADVISORY BOARD COMPANY

                             By:  /s/ MICHAEL D'AMATO
                                 ------------------------
                             Name: Michael D'Amato
                             Title: Executive Vice President

                                  /s/ RICHARD SCHWARTZ
                                 ------------------------
                                      Richard Schwartz

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