Document:

exv10w4

Exhibit 10.4

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is entered into as of September 12, 2008,
by and between The Advisory Board Company (the “Company”) and Frank J. Williams
(“Executive”). This Agreement replaces and supersedes the Employment Agreement, dated as
of October 25, 2001, between the Company and Executive, effective as of the Commencement Date (as
defined in Section 1(a)).

     1. Duties and Scope of Employment.

          (a) Positions and Duties. Effective as of September 1, 2008 (the “Commencement
Date”), Executive ceased serving as the Company’s Chief Executive Officer and became the
Company’s Executive Chairman, an executive officer of the Company. As of the Commencement Date,
Executive continued to serve as Chairman of the Board of Directors of the Company (the
“Board”). Executive’s duties as Executive Chairman include leadership, and presiding at
meetings, of the Board, and advising and working closely with the Chief Executive Officer
concerning the activities of the Company, including activities focused on improving the business
climate for the Company around the world and enhancing relationships with the Company’s key
members, strategic partners and investors, and such other duties consistent with his position as
may be reasonably assigned to him.

          (b) Board Membership. Executive continued to serve as Chairman of the Board of
Directors (the “Board”) as of the Commencement Date. At each annual meeting of the
Company’s stockholders during the Term (as defined in Section 2), the Board shall nominate
Executive to serve as a member of the Board and, subject to Executive’s election to the Board, the
Board shall elect Executive as Chairman of the Board. Executive’s service as a member of the Board
shall be subject to any required stockholder approval. Upon the termination of Executive’s
employment for any reason, unless otherwise requested by the Board, Executive shall tender his
resignation from the Board (and all other positions held at the Company and its affiliates)
effective as of the end of Executive’s employment, and Executive will, at the Board’s request,
execute and deliver any documents necessary to reflect his resignation.

          (c) Obligations. Executive shall devote such portion of his business time and
efforts to the rendition of services to the Company as is mutually agreed upon by the Board,
Executive and the Executive Chairman, and he shall use good faith efforts to discharge Executive’s
obligations under this Agreement to the best of Executive’s ability. During the period commencing
on the Commencement Date and continuing through the first anniversary thereof (the “First
Period”), it is anticipated that Executive shall devote at least 32 hours per week on average
to the Company, it being understood and agreed that Executive, the Board and the Chief Executive
Officer shall determine on or about the first anniversary of the Commencement Date the number of
hours on average Executive shall devote to the Company during the period commencing on or about the
first anniversary of the Commencement Date and continuing through the second anniversary of the
Commencement Date (the “Second Period”). Executive shall be permitted to engage in other
activities as disclosed to the Board from time to time, so long as such activities do not
interfere, and are consistent, with his duties and obligations to the Company.

     2. Term. The term of employment of Executive by the Company pursuant to this Agreement
shall commence on the Commencement Date and, unless earlier terminated pursuant to Section 7, shall
end on the later of (x) August 31, 2010 or (y) the date of the Company’s 2010 annual meeting of
stockholders (the “Term”).

     3. Compensation.

          (a) Base Salary. As of the Commencement Date and during the First Period, the
Company shall pay Executive an annual salary of $400,000 as compensation for his services (such
annual salary, as is then effective, “Base Salary”), payable in installments in accordance
with the Company’s payroll schedule from time to time (less any deductions required for Social
Security, state, federal and local withholding taxes, and any other authorized or mandated similar
withholdings). The Base Salary shall be reviewed by the Board and/or the Compensation Committee of
the Board (the “Committee”) on or about

 

 

the first anniversary of the Commencement Date and shall be subject to adjustment upon mutual
agreement of the Committee and Executive to reflect the number of hours on average Executive shall
devote to the Company and Executive’s duties and responsibilities to the Company during the Second
Period and such other factors deemed appropriate by the Committee and Executive.

          (b) Annual Incentive Bonus. Executive shall be eligible to earn a bonus based upon
Executive’s achievement of performance objectives set by the Committee after consultation with
Executive. Executive’s annual incentive bonus target on account of the First Period is $350,000.
The actual incentive bonus payable to Executive shall be based upon criteria established and
approved by the Board and/or the Committee in its sole discretion, which need not be objective
performance criteria, and may be less than (including zero) or greater than the annual incentive
bonus target for such period. Executive may also receive special bonuses in additional to his
annual bonus eligibility at the discretion of the Committee.

          (c) Additional Compensation. At appropriate times hereafter, the Board and/or the
Committee shall consider, after consultation with Executive, granting additional equity-based
compensation to Executive that reflects Executive’s duties and responsibilities to the Company and
the number of hours on average Executive shall devote to the Company during calendar year 2009 and
such other factors deemed appropriate by the Board and/or the Committee. Executive confirms and
acknowledges that any other elements of compensation, including, without limitation, grants of
equity-based compensation, are provided at the sole discretion of the Board and/or the Committee,
which also shall have the sole discretion to determine the terms, amount and frequency of any such
other elements of compensation.

          (d) Board Service. Unless otherwise specifically approved by the Board, Executive
shall not receive separate or additional compensation for service on the Board or for service in
any other capacity to the Company and/or any Subsidiary.

     4. Employee Benefits. During the Term, Executive shall be eligible to participate in
all benefit plans, policies and arrangements that are applicable to other senior executives of the
Company, as such plans, policies and arrangements may exist from time to time.

     5. Expenses. The Company shall reimburse Executive for all reasonable and necessary
business expenses incurred by him in the performance of his duties hereunder, in accordance with
its policies, and provided they are documented in a form satisfactory to the Internal Revenue
Service and consistent with Company policy with respect to such expenses. In addition, the Company
agrees, subject to the Board’s approval, to reimburse Executive for membership fees and other
reasonable expenses incurred with respect to Executive’s participation in professional development,
community and business-related organizations.

     6. Compliance With Other Agreements. Executive and the Company are parties to a
Non-Competition Agreement dated as of October 25, 2001, which is hereby affirmed and incorporated
herein in its entirety by this reference (as such may be amended from time to time, the
“Non-Competition Agreement”).

     7. Termination.

          (a) Death or Disability. Executive’s employment shall terminate immediately upon his
death or Disability. For purposes of this Agreement, “Disability” means any physical or
mental disability or incapacity that can be expected to result in Executive’s death or that has
rendered Executive unable to carry out Executive’s duties and obligations to the Company for a
period of 90 consecutive days or for shorter periods aggregating to 120 days (whether or not
consecutive) during any consecutive 12 months of the Term. The Company, at its expense, may retain
a physician reasonably acceptable to Executive to confirm the existence of such disability or
incapacity.

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          (b) Termination by the Company With Cause. The Board, on behalf of the Company, may
terminate Executive’s employment with Cause upon written notice to Executive of the alleged act or
omission constituting Cause, which notice shall set forth in reasonable detail the reason or
reasons that the Board believes Executive is to be terminated for Cause. For purposes of this
Agreement, “Cause” means the occurrence of any one or more of the following events:
(i) any willful act or willful omission (other than as a result of Disability) that represents a
breach of any of the terms of this Agreement to the material detriment of the Company;
(ii) Executive’s conviction of, or plea of nolo contendere to, a felony (other than a traffic
infraction); or (iii) the commission by Executive of a material act of fraud, theft or dishonesty
against the Company. If an event described in clause (i) of the preceding sentence is reasonably
capable of being cured, (A) Executive shall be given 45 days from the date of such written notice
to effect a cure of such alleged act or omission constituting Cause which, upon such cure to the
reasonable satisfaction of the Board, shall no longer constitute a basis for Cause, and (B)
Executive shall be given an opportunity to make a presentation to the Board (accompanied by counsel
or other representative, if Executive so desires) at a meeting of the Board held promptly following
such 45-day cure period if the Board intends to determine that no cure has occurred. At or
following such meeting, the Board shall determine whether or not to terminate Executive with Cause
and shall notify Executive of its determination and the effective date of such termination (which
date may be no earlier than the date of the aforementioned Board meeting). For purposes hereof, no
act or omission shall be deemed “willful” if it was done with a good faith belief that it was in
the best interests of the Company.

          (c) Termination by Executive With Good Reason. Executive may terminate Executive’s
employment with the Company with Good Reason upon written notice to the Company of the alleged act
or omission constituting Good Reason, which notice shall set forth in reasonable detail the reason
or reasons that Executive believes his employment is to be terminated for Good Reason. For
purposes of this Agreement, “Good Reason” means, without Executive’s written consent, (i) a
reduction of Executive’s Base Salary other than as provided in or contemplated by Section 3(a),
(ii) Executive is no longer the Executive Chairman of the Company or (iii) in the event of a Change
of Control (as defined in Section 11(b)), Executive is no longer serving on the board of directors
or similar governing body of the successor to the Company’s business or assets, except in each case
on account of removal from the Board for cause pursuant to a vote of the stockholders of the
Company or due to Executive’s resignation from, or refusal to stand for reelection to, the Board,
or (iv) any material breach by the Company of any of the material terms of this Agreement;
provided, however, that for any of the foregoing to constitute Good Reason, Executive must provide
written notification of such event or condition constituting Good Reason within 90 days after
Executive knows of the occurrence of any such event or condition, and the Company shall have 60
days from the date of receipt of such written notice to effect a cure of the event or condition
constituting Good Reason, and, upon cure thereof by the Company, such event or condition shall no
longer constitute Good Reason.

          (d) Termination by the Company Without Cause or by Executive Without Good Reason.
The Company may terminate Executive’s employment without Cause at any time upon 60 days’ written
notice to Executive. Executive may terminate Executive’s employment without Good Reason upon 60
days’ written notice to the Company.

     8. Effect of Termination.

          (a) Accrued Obligations. The Company shall pay all Accrued Obligations (as defined
in Section 11(a)) to Executive (or Executive’s estate, in the case of termination of Executive’s
employment on account of death) within 30 days following the effective date of the termination of
Executive’s employment (the “Termination Date”).

          (b) Equity Awards.

          (i) Death or Disability. In the event Executive’s employment is terminated due to
Executive’s death or Disability, all restricted stock units, shares of restricted Company
common

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stock, options to purchase Company common stock, and other equity awards granted to
Executive by the Company (collectively, “Equity Awards”) shall become vested in full
as of the day immediately preceding the Termination Date (and, in the case of options, shall
be exercisable until the earlier of the expiration of such Equity Awards or the first
anniversary of the Termination Date).

          (ii) Termination by the Company Without Cause or by Executive with Good Reason. In the
event Executive’s employment is terminated by the Company without Cause or by Executive with
Good Reason, all Equity Awards shall become vested as of the day immediately preceding the
Termination Date (and, in the case of options, shall be exercisable until the earlier of the
expiration of such Equity Awards or the first anniversary of the Termination Date).

          (c) Severance. In the event of Executive’s “separation from service” with the
Company (as defined in Treas. Reg. § 1.409A-1(h)) due to a termination of Executive’s employment by
the Company without Cause or by Executive with Good Reason, Executive will receive an amount equal
to one hundred fifty percent (150%) of Executive’s then-current Base Salary for 12 full calendar
months in a single lump sum within 38 days after the date of such separation from service. In
addition, for a period of 18 months after the date of Executive’s separation from service, the
Company shall continue to provide medical, dental and vision care and life insurance benefits to
Executive and/or Executive’s family at least equal to those which would have been provided to them
in accordance with Section 4, provided that Executive agrees to elect COBRA coverage to the extent
available under the Company’s health insurance plans (and the Company shall reimburse the cost of
any premiums for such coverage on an after-tax basis).

          (d) Required Delay. In the event that any compensation with respect to Executive’s
termination is “deferred compensation” within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder
(“Section 409A”), the stock of the Company (or any of its affiliates) is publicly traded on
an established securities market or otherwise, and Executive is determined to be a “specified
employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall
be delayed as required by Section 409A.  Such delay shall last six months from the date of
Executive’s termination, except in the event of Executive’s death.  Within 30 days following the
end of such six-month period, or, if earlier, Executive’s death, the Company will make a catch-up
payment to Executive equal to the total amount of such payments that would have been made during
the six-month period but for this Section 8(e).  Such catch-up payment shall bear simple interest
at the prime rate of interest as published by the Wall Street Journals’ bank survey as of the first
day of the six month period, which such interest shall be paid with the catch-up payment.  Wherever
payments under this Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A.

     9. Conditions to Receipt of Severance; No Duty to Mitigate; Non-Exclusivity of Rights.

          (a) Waiver and Release Agreement. In consideration of the severance payments and
other benefits described in Section 8(c), to which severance payments and benefits Executive would
not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance
payments and other benefits under this Agreement (other than on account of Executive’s death),
Executive agrees to execute and deliver to the Company within 30 days after the applicable date of
Executive’s separation of service a Waiver and Release Agreement in the form attached hereto as
Appendix A (the “Release”) and not revoking it during the revocation period
provided therein. The timing of severance payments under Section 8(c) shall be further governed by
the following provisions:

          (i) In any case in which the Release (and the expiration of any revocation rights
provided therein) could only become effective in a particular tax year of Executive,
payments conditioned on execution of the release shall be made within 10 days after the
Release becomes effective and such revocation rights have lapsed.

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          (ii) In any case in which the Release (and the expiration of any revocation rights
provided therein) could become effective in one of two taxable years of Executive depending
on when Executive executes and delivers the Release, payments conditioned on execution of
the Release shall be made within 10 days after the Release becomes effective and such
revocation rights have lapsed, but not earlier than the first business day of the later of
such tax years.

If Executive fails to execute and deliver the Release within 30 days after Executive’s separation
from service, or if Executive revokes such Release as provided therein, the Company shall have no
obligation to provide any of the severance payments or other benefits provided in Section 8(c).

          (b) No Duty to Mitigate. Executive shall not be required to mitigate the amount of
any payment contemplated by this Agreement, nor shall any earnings that Executive may receive from
any other source reduce any such payment.

          (c) Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company and for which Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as Executive may have under any other contract or agreement with the Company at
or subsequent to the Termination Date, which shall be payable in accordance with such plan, policy,
practice or program or contract or agreement, except as explicitly modified by this Agreement.

     10.  Certain Additional Payments.

          (a)  In the event it shall be determined that any payment, benefit or distribution by the
Company (or any other payor described in Treas. Reg. Sec. 1.280G-1, Q&A 10) to Executive or for
Executive’s benefit (a “Payment”) would be subject to the excise tax (the “Excise
Tax”) imposed under Section 4999 of the Code, Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that, after payment by
Executive of all taxes (and any interest or penalties imposed with respect to such taxes),
including any income and employment taxes and Excise Taxes imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon such
Payments. Notwithstanding the foregoing provisions of this Section, if it shall be determined that
Executive is entitled to a Gross-Up Payment, but that the portion of the Payments that would be
treated as “parachute payments” under Section 280G of the Code does not exceed $50,000, then no
Gross-Up Payment shall be made to Executive and the amounts payable under Section 8(c) shall be
reduced so that the Payments, in the aggregate, are reduced to the Safe Harbor Amount. The “Safe
Harbor Amount” is the greatest amount of payments in the nature of compensation that are contingent
on a Change in Control for purposes of Section 280G of the Code that could be paid to Executive
without giving rise to any Excise Tax. If the reduction of the amounts payable under Section 8(c)
would not result in a reduction of the Payments to the Safe Harbor Amount, no amounts payable under
this Agreement shall be reduced pursuant hereto and a Gross-Up Payment shall be made to Executive.

          (b) All determinations required to be made under this Section 10, including whether a
Gross-Up Payment or reduction is required and the amount of any Gross-Up Payment or reductions of
Payments, shall be made by a nationally recognized certified public accounting firm that shall be
designated by the Company and reasonably acceptable to Executive (the “Accounting Firm”).
The Accounting Firm shall provide detailed supporting calculations both to the Company and
Executive within 15 business days of the receipt of notice from Executive that there has been a
Payment or such earlier time as is requested by the Company or Executive. All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section, shall be paid by the Company to Executive within five business days of
the receipt of the Accounting Firm’s determination and in any event not later than the last day of
the calendar year after the calendar year in which the applicable Excise Tax is paid. If the
Accounting Firm determines that no Excise Tax is payable by Executive or that a reduction is
required, it shall so indicate to Executive in writing.

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          (c) Any determination by the Accounting Firm shall be binding upon the Company and Executive
(absent manifest error), provided that, in the event that Executive’s tax advisor delivers to the
Accounting Firm and the Company a written opinion that the actual Excise Tax payable by Executive
is greater than the Excise Tax amount initially determined by the Accounting Firm by reason of (i)
manifest error, (ii) any Payment the existence or amount of which could not have been, or was not,
determined or known at the time the Excise Tax was initially determined or (iii) any determination,
claim or assertion made by any tax authority that the actual Excise Tax is greater than the amount
initially determined by the Accounting Firm, then, in any such case, the Accounting Firm shall
recalculate the amount of the Excise Tax and any required (or additional) Gross-Up Payment.  Any
such additional calculation or determination shall be performed consistent with this Section 10.

          (d) Executive shall notify the Company in writing of any written claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a Gross-Up
Payment.  Executive shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid.  Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such claim is due).  If
the Company notifies Executive in writing prior to the expiration of such period that the Company
desires to contest such claim, Executive shall (i) give the Company any information reasonably
requested by the Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from time to time,
including accepting legal representation with respect to such claim by an attorney reasonably
selected by the Company, (iii) cooperate with the Company in good faith in order effectively to
contest such claim, and (iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that (A) the Company shall bear and pay directly all costs and expenses
(including additional income taxes, interest and penalties) incurred in connection with such
contest, and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest or penalties) imposed as a result of such representation and
payment of costs and expenses, and (B) Executive’s obligation to cooperate with the Company shall
not require Executive to take any action, or forego taking any action, that would have an adverse
effect on Executive’s overall tax position.

          (e) Notwithstanding anything in this Agreement to the contrary, in no event shall any payment
by the Company pursuant to this Section 10 be made later than the end of Executive’s taxable year
next following Executive’s taxable year in which Executive remits the related taxes.

     11. Definitions.  

          (a)  “Accrued Obligations” means the sum of (i) Executive’s Salary hereunder through
the Termination Date, (ii) the amount of any incentive compensation, deferred compensation and
other cash compensation accrued by Executive as of the Termination Date, and (iii) any expense
reimbursements and other cash entitlements accrued by Executive as of the Termination Date, in each
case to the extent not previously paid.

          (b) “Change of Control” means 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 (as
defined in Section 11(d)), 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;

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          (ii)  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) one or more Permitted Holders are the
only stockholders of the company(ies) resulting from such merger, consolidation, or
reorganization;

          (iii)  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, unless the
person to which such transfer is made is either (A) a Subsidiary (as defined in the
Company’s 2005 Stock Incentive Plan), (B) wholly owned by all of the stockholders of the
Company, or (C) wholly owned by Permitted Holders; or

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

          (c)  “Change of Control Period” means the period commencing on (i) the earlier of
(x) the date that the Board recommends to the Company’s stockholders approval of a transaction or
series of transactions that would effect a Change of Control, (y) the date that the Board approves
the execution and delivery by the Company of a definitive agreement for a transaction or series of
transactions that would effect a Change of Control, or (z) a Change of Control, and continuing
through (ii) the close of business on the day following a Change of Control.

          (d) “Permitted Holders” means (i) the Company, (ii) any Subsidiary, or (iii) any
employee benefit plan of the Company or any Subsidiary.

     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 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 arbitrator, who shall be impartial. Except as the parties may otherwise agree,
the arbitrator 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 arbitrator, the appointing authority shall give due consideration to the issues
to be resolved, but his or her decision as to the identity of the arbitrator shall be final.
Except as otherwise provided in this Section 12, all of the arbitration proceedings shall be
conducted in accordance with the rules of the arbitrator.

          (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 arbitrator ten days following such service or
thereafter. If the arbitrator is not appointed by the appointing authority within 30 days following
such reference, any party may apply to any court within the District of Columbia for an order
appointing an arbitrator qualified as set forth below.

          (c) The prevailing party in any arbitration under this Section 12 shall be entitled to
reimbursement from the losing party of all reasonable attorneys’ fees and costs in connection with
such arbitration. The parties hereby expressly waive punitive damages, and under no circumstances
shall an award contain any amount that in any way reflects punitive damages.

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

          (e) It is intended that controversies or claims submitted to arbitration under this
Section 12 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. Notices. All notices, requests, demands, and other communications called for
hereunder shall be in writing and shall be deemed given (a) on the date of delivery if delivered
personally, (b) one day after being sent by a well established commercial overnight service, or
(c) four days after being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors at the following addresses, or at such other
addresses as the parties may later designate in writing:

  If to the Company:

The Advisory Board Company

Attn: Chairman of the Compensation Committee of the Board of Directors

2445 M Street, N.W.

Washington, D.C. 20037

  If to Executive:

at the last residential address known by the Company as provided by Executive in writing.

     14. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with the laws of the
District of Columbia (other than its choice of laws rules).

          (b) The paragraph headings and captions contained in this Agreement are for convenience only
and shall not be construed to define, limit or affect the scope or meaning of the provisions
hereof.

          (c) This Agreement represents the entire agreement and understanding between the parties and
supersedes all prior or contemporaneous agreements whether written or oral, as to the subject
matter hereof. No waiver, alteration, or modification of any of the provisions of this Agreement
shall be binding unless in a writing signed by duly authorized representatives of the Company and
Executive.

          (d) If any provision hereof becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable, or void, this Agreement shall continue in full force and effect without
said provision.

          (e) The waiver of a breach of any term or provision of this Agreement, which must be in
writing, shall not operate as or be construed to be a waiver of any other previous or subsequent
breach of this Agreement.

          (f) All payments made pursuant to this Agreement shall be subject to withholding of
applicable taxes.

          (g) Executive acknowledges that he has had the opportunity to discuss this matter with and
obtain advice from his legal, tax and other professional advisors, has had sufficient time to, and
has carefully read and fully understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

          (h) This Agreement may be executed in counterparts (including by fax or PDF), and each
counterpart shall have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.

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          (i) The respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement and Executive’s employment with the Company to the extent necessary
to preserve the intended rights and obligations of the parties.

          (j) For purposes of Section 409A, each COBRA continuation reimbursement payment shall be
considered one of a series of separate payments.

          (k) Any amount that Executive is entitled to be reimbursed under this Agreement shall be
reimbursed to Executive as promptly as practical and in any event not later than the last day of
the calendar year after the calendar year in which the expenses are incurred, and the amount of the
expenses eligible for reimbursement during any calendar year shall not affect the amount of
expenses eligible for reimbursement in any other calendar year.

          (l)  This Agreement shall be binding upon and inure to the benefit of (a) the heirs,
executors, and legal representatives of Executive upon Executive’s death and (b) any successor of
the Company. Any such successor of the Company shall be deemed substituted for the Company under
the terms of this Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation, or other business entity which at any time, whether by purchase, merger, or
otherwise, directly or indirectly acquires all or substantially all of the assets or business of
the Company.

[Remainder of page intentionally left blank.]

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first
written above.

THE ADVISORY BOARD COMPANY

	 	 	 	 	 	 	 	 	 
	By: 

	 	 /s/ Leon D. Shapiro
 

Leon D. Shapiro
	 	 	 	/s/ Frank J. Williams
 

Frank J. Williams
	 	 
	 

	 	Chairman, Compensation Committee	 	 	 	 	 	 

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APPENDIX A

Form of Waiver and Release Agreement

     This WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [TO BE
DETERMINED AT TERMINATION OF EMPLOYMENT] (the “Effective Date”), by Frank J. Williams (the
“Executive”) in consideration of severance pay and benefits (the “Severance
Payment”) provided to Executive by The Advisory Board Company, a Delaware corporation (the
“Company”), pursuant to Section 8(c) of the Employment Agreement by and between the Company
and Executive (the “Employment Agreement”).

     1.  Waiver and Release. Subject to the last sentence of the first paragraph of this
Section 1, Executive, on his own behalf and on behalf of his heirs, executors, administrators,
attorneys and assigns, hereby unconditionally and irrevocably releases, waives and forever
discharges the Company and each of its affiliates, parents, successors, predecessors, and the
subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the
Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all
of the foregoing are referred to as the “Employer”), from any and all causes of action,
claims and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen,
presently asserted or otherwise arising through the date of his signing of this Release, concerning
his employment or separation from employment. Subject to the last sentence of the first paragraph
of this Section 1, this Release includes, but is not limited to, any payments, benefits or damages
arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of
1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act,
and the Worker Adjustment and Retraining Notification Act, each as amended); any claim arising
under any state or local laws, ordinances or regulations (including, but not limited to, any state
or local laws, ordinances or regulations requiring that advance notice be given of certain
workforce reductions); and any claim arising under any common law principle or public policy,
including, but not limited to, all suits in tort or contract, such as wrongful termination,
defamation, emotional distress, invasion of privacy or loss of consortium. Notwithstanding any
other provision of this Release to the contrary, this Release does not encompass, and Executive
does not release, waive or discharge, the obligations of the Company (a) to make the payments and
provide the other benefits contemplated by the Employment Agreement, or (b) under any restricted
stock agreement, option agreement or other agreement pertaining to Executive’s equity ownership, or
(c) under any indemnification or similar agreement with Executive.

     Executive understands that by signing this Release, he is not waiving any claims or
administrative charges which cannot be waived by law. He is waiving, however, any right to
monetary recovery or individual relief should any federal, state or local agency (including the
Equal Employment Opportunity Commission) pursue any claim on his behalf arising out of or related
to his employment with and/or separation from employment with the Company.

     Executive further agrees without any reservation whatsoever, never to sue the Employer or
become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly
released in this Release.

     2.  Acknowledgments. Executive is signing this Release knowingly and voluntarily. He
acknowledges that:

          (a)  He is hereby advised in writing to consult an attorney before signing this Release;

          (b)  He has relied solely on his own judgment and/or that of his attorney regarding the
consideration for and the terms of this Release and is signing this Release knowingly and
voluntarily of his own free will;

 

 

          (c)  He is not entitled to the Severance Payment unless he agrees to and honors the terms of
this Release;

          (d)  He has been given at least twenty-one (21) calendar days to consider this Release, or he
expressly waives his right to have at least twenty-one (21) days to consider this Release;

          (e)  He may revoke this Release within seven (7) calendar days after signing it by submitting
a written notice of revocation to the Employer. He further understands that this Release is not
effective or enforceable until after the seven (7) day period of revocation has expired without
revocation, and that if he revokes this Release within the seven (7) day revocation period, he
shall not receive the Severance Payment;

          (f)  He has read and understands the Release and further understands that, subject to the
limitations contained herein, it includes a general release of any and all known and unknown,
foreseen or unforeseen claims presently asserted or otherwise arising through the date of his
signing of this Release that he may have against the Employer; and

          (g)  No statements made or conduct by the Employer has in any way coerced or unduly influenced
him or her to execute this Release.

     3.  No Admission of Liability. This Release does not constitute an admission of
liability or wrongdoing on the part of the Employer, the Employer does not admit there has been any
wrongdoing whatsoever against Executive, and the Employer expressly denies that any wrongdoing has
occurred.

     4.  Entire Agreement. There are no other agreements of any nature between the
Employer and Executive with respect to the matters discussed in this Release, except as expressly
stated herein, and in signing this Release, Executive is not relying on any agreements or
representations, except those expressly contained in this Release.

     5.  Execution. It is not necessary that the Employer sign this Release following
Executive’s full and complete execution of it for it to become fully effective and enforceable.

     6.  Severability. If any provision of this Release is found, held or deemed by a
court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute
or controlling law, the remainder of this Release shall continue in full force and effect.

     7.  Governing Law. This Release shall be governed by and construed in accordance with
the laws of the District of Columbia (other than its choice of laws rules).

     8.  Headings. Section and subsection headings contained in this Release are inserted
for the convenience of reference only. Section and subsection headings shall not be deemed to be a
part of this Release for any purpose, and they shall not in any way define or affect the meaning,
construction or scope of any of the provisions hereof.

[Remainder of page intentionally left blank.]

2

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day and year
first herein above written.

	 	 	 
	 
	 

	 	 
	 

	 	Frank J. Williams

3exv10w5

Exhibit 10.5

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is entered into as of September 12, 2008,
by and between The Advisory Board Company (the “Company”) and Robert W. Musslewhite
(“Executive”).

     1. Duties and Scope of Employment.

          (a) Positions and Duties. Effective as of September 1, 2008 (the “Commencement
Date”), the Company shall employ Executive as Chief Executive Officer of the Company.
Executive shall report directly to the Board of Directors of the Company (the “Board”).
Executive shall perform all the duties and obligations reasonably associated with the position of
Chief Executive Officer and consistent with the Bylaws of the Company as in effect from time to
time, subject to the supervision of the Board, and such other executive duties consistent with the
foregoing as are mutually agreed upon from time to time by Executive and the Board.

          (b) Board Membership. Executive continued to serve as a member of the Board as of
the Commencement Date. Thereafter, at each annual meeting of the Company’s stockholders during the
Term (as defined in Section 2), the Board shall nominate Executive to serve as a member of the
Board. Executive’s service as a member of the Board shall be subject to any required stockholder
approval. Upon the termination of Executive’s employment for any reason, unless otherwise requested
by the Board, Executive shall tender his resignation from the Board (and all other positions held
at the Company and its affiliates) effective as of the end of Executive’s employment, and Executive
shall, at the Board’s request, execute and deliver any documents necessary to reflect his
resignation.

          (c) Obligations. Executive shall devote substantially all his business time and
efforts to the rendition of services to the Company, and he shall use good faith efforts to
discharge Executive’s obligations under this Agreement to the best of Executive’s ability. During
the Term, Executive agrees not to actively engage in any other employment, occupation, or
consulting activity for any direct or indirect remuneration without the prior approval of the
Board; provided, however, that (i) Executive may, without the approval of the Board, serve in any
capacity with any civic, educational, or community organization and (ii) Executive may, with the
prior approval of the Board (which approval shall not be unreasonably withheld), serve as a
director of any company that is not directly or indirectly in competition with the Company, in each
case as long as such activities or service do not materially interfere with his duties and
obligations to the Company.

     2. Term. The term of employment of Executive by the Company pursuant to this Agreement
shall commence on the Commencement Date and, unless earlier terminated pursuant to Section 7, shall
end on August 31, 2012 (the “Initial Term”); provided, however, that the term of
Executive’s employment under this Agreement shall be extended automatically for one additional year
as of the fourth anniversary and each subsequent anniversary of the Commencement Date (each such
additional year, an “Extended Term”; together with the Initial Term, the “Term”),
unless no later than one year prior to the last day of the then-current Term either the Board, on
behalf of the Company, or Executive gives written notice to the other that the Term shall not be so
extended. For example, notice of nonrenewal would need to be provided prior to September 1, 2011
for the Term not to renew automatically on September 1, 2012 for an additional one year. Following
a Change of Control (as defined in Section 11(b)), the Term shall continue for the longer of (x)
the remainder of the Initial Term or (y) the first anniversary of the Change of Control, and
thereafter shall be extended automatically for one additional year, unless no later than one year
prior to the last day of the then-current Term either the Board, on behalf of the Company, or
Executive gives written notice to the other that the Term shall not be so extended.

     3. Compensation.

          (a) Base Salary. As of the Commencement Date, the Company shall pay Executive an
annual salary of $500,000 as compensation for his services (such annual salary, as is then
effective, “Base Salary”), payable in installments in accordance with the Company’s payroll
schedule from time to time

 

 

(less any deductions required for Social Security, state, federal and local withholding taxes,
and any other authorized or mandated similar withholdings). The Base Salary shall be reviewed by
the Board and/or the Compensation Committee of the Board (the “Committee”) no less
frequently than annually and may be increased from its then-existing level at the discretion of the
Board or the Committee.

          (b) Annual Incentive Bonus. Executive shall be eligible to earn bonuses with respect
to each fiscal year (or partial fiscal year) during the Term based upon Executive’s achievement of
performance objectives set by the Committee after consultation with Executive. Executive’s initial
annual incentive bonus target is $225,000. The actual incentive bonus payable to Executive for any
fiscal year (or partial fiscal year) shall be based upon criteria established and approved by the
Board and/or the Committee in its sole discretion, which need not be objective performance
criteria, and may be less than (including zero) or greater than the annual incentive bonus target
for such fiscal year (or partial fiscal year). Executive may also receive special bonuses in
additional to his annual bonus eligibility at the discretion of the Committee.

          (c) Additional Compensation. Executive confirms and acknowledges that any element of
compensation other than Base Salary (which shall be determined in accordance with Section 3(a)),
including, without limitation, grants of equity-based compensation, are provided at the sole
discretion of the Board and/or the Committee, which also shall have the sole discretion to
determine the terms, amount and frequency of any such other elements of compensation.

          (d) Board Service. Unless otherwise specifically approved by the Board, Executive
shall not receive separate or additional compensation for service on the Board or for service in
any other capacity to the Company and/or its subsidiaries.

     4. Employee Benefits. During the Term, Executive shall be eligible to participate in
all benefit plans, policies and arrangements that are applicable to other senior executives of the
Company, as such plans, policies and arrangements may exist from time to time.

     5. Expenses. The Company shall reimburse Executive for all reasonable and necessary
business expenses incurred by him in the performance of his duties hereunder, in accordance with
its policies, and provided they are documented in a form satisfactory to the Internal Revenue
Service and consistent with Company policy with respect to such expenses. In addition, the Company
agrees, subject to the Board’s approval, to reimburse Executive for membership fees and other
reasonable expenses incurred with respect to Executive’s participation in professional development,
community and business-related organizations.

     6. Compliance With Other Agreements. Executive and the Company are parties to an
Employer Protection Agreement dated December 30, 2003, a copy of which is attached to this
Agreement as Appendix A, which is hereby affirmed and incorporated herein in its entirety
by this reference (as such may be amended from time to time, the “Employer Protection
Agreement”), except that the definition of “Cause” in the Employer Protection Agreement shall
have the same meaning as “Cause” as defined in this Agreement.

     7. Termination.

          (a) Death or Disability. Executive’s employment shall terminate immediately upon his
death or Disability. For purposes of this Agreement, “Disability” means any physical or
mental disability or incapacity that can be expected to result in Executive’s death or that has
rendered Executive unable to carry out Executive’s duties and obligations to the Company for a
period of 90 consecutive days or for shorter periods aggregating to 120 days (whether or not
consecutive) during any consecutive 12 months of the Term. The Company, at its expense, may retain
a physician reasonably acceptable to Executive to confirm the existence of such disability or
incapacity.

          (b) Termination by the Company With Cause. The Board, on behalf of the Company, may

2

 

terminate Executive’s employment with Cause upon written notice to Executive of the alleged
act or omission constituting Cause, which notice shall set forth in reasonable detail the reason or
reasons that the Board believes Executive is to be terminated for Cause. For purposes of this
Agreement, “Cause” means the occurrence of any one or more of the following events: (i)
any willful act or willful omission (other than as a result of Disability) that represents a breach
of any of the terms of this Agreement to the material detriment of the Company; (ii) Executive’s
conviction of, or plea of nolo contendere to, a felony (other than a traffic infraction); or (iii)
the commission by Executive of a material act of fraud, theft or dishonesty against the Company.
If an event described in clause (i) of the preceding sentence is reasonably capable of being cured,
(A) Executive shall be given 45 days from the date of such notice to effect a cure of such alleged
act or omission constituting Cause which, upon such cure to the reasonable satisfaction of the
Board, shall no longer constitute a basis for Cause, and (B) Executive shall be given an
opportunity to make a presentation to the Board (accompanied by counsel or other representative, if
Executive so desires) at a meeting of the Board held promptly following such 45-day cure period if
the Board intends to determine that no cure has occurred. At or following such meeting, the Board
shall determine whether or not to terminate Executive with Cause and shall notify Executive of its
determination and the effective date of such termination (which date may be no earlier than the
date of the aforementioned Board meeting). For purposes hereof, no act or omission shall be deemed
“willful” if it was done with a good faith belief that it was in the best interests of the Company.

          (c) Termination by Executive With Good Reason. Executive may terminate Executive’s
employment with the Company with Good Reason upon written notice to the Company of the alleged act
or omission constituting Good Reason, which notice shall set forth in reasonable detail the reason
or reasons that Executive believes his employment is to be terminated for Good Reason. For
purposes of this Agreement, “Good Reason” means, without Executive’s written consent, (i) a
reduction of Executive’s Base Salary, (ii) a reduction in Executive’s annual incentive bonus target
below Executive’s initial annual incentive bonus target, (iii) Executive is no longer the Chief
Executive Officer of (A) the Company, or (B) in the event of a Change of Control, the successor to
the Company’s business or assets, (iv) Executive is no longer serving on (A) the Board or (B) in
the event of a Change of Control, the board of directors or similar governing body of successor to
the Company’s business or assets, except in each case on account of removal from the Board for
cause pursuant to the vote of the stockholders of the Company or due to Executive’s resignation
from, or refusal to stand for reelection to, the Board, (v) any material breach by the Company of
any of the material terms of this Agreement, or (vi) during the one-year period following a Change
of Control, Executive is required to relocate his place of employment to a location that is more
than 35 miles from the location of the Company’s headquarters as of the date first set forth above;
provided, however, that for any of the foregoing to constitute Good Reason, Executive must provide
written notification of such event or condition constituting Good Reason within 90 days after
Executive knows of the occurrence of any such event or condition, and the Company shall have 60
days from the date of receipt of such written notice to effect a cure of the event or condition
constituting Good Reason, and, upon cure thereof by the Company, such event or condition shall no
longer constitute Good Reason.

          (c) Termination by the Company Without Cause or by Executive Without Good Reason.
The Company may terminate Executive’s employment without Cause at any time upon 60 days’ written
notice to Executive. Executive may terminate Executive’s employment without Good Reason upon 60
days’ written notice to the Company. Nonrenewal of the Term by the Company shall not constitute a
termination without Cause, except that notice of nonrenewal by the Company shall constitute
termination without Cause if the notice of nonrenewal is provided to Executive during the period
commencing on (i) the earlier of (x) the date that the Board recommends to the Company’s
stockholders approval of a transaction or series of transactions that would effect a Change of
Control, (y) the date that the Board approves the execution and delivery by the Company of a
definitive agreement for a transaction or series of transactions that would effect a Change of
Control, or (z) a Change of Control, and continuing through (ii) the close of business on the day
following a Change of Control (such period, the “Change of Control Period”).

3

 

     8. Effect
of Termination.

          (a) Accrued Obligations. The Company shall pay all Accrued Obligations (as defined
in Section 11(a)) to Executive (or Executive’s estate, in the case of termination of Executive’s
employment on account of death) within 30 days following the effective date of the termination of
Executive’s employment (the “Termination Date”).

          (b) Equity Awards.

          (i) Death or Disability. In the event Executive’s employment is terminated due to
Executive’s death or Disability, all restricted stock units, shares of restricted Company
common stock, options to purchase Company common stock, and other equity awards granted to
Executive by the Company (collectively, “Equity Awards”) shall become vested in full
as of the day immediately preceding the Termination Date (and, in the case of options, shall
be exercisable until the earlier of the expiration of such Equity Awards or the first
anniversary of the Termination Date).

          (ii) Termination by the Company Without Cause or by Executive with Good Reason. In the
event Executive’s employment is terminated by the Company without Cause or by Executive with
Good Reason, all Equity Awards that were granted to Executive on May 20, 2008 and after the
date first written above (the May 20, 2008 Equity Awards, together with any such subsequent
awards, the “Subsequent Equity Awards”) shall become vested as of the day
immediately preceding the Termination Date to the extent they would have vested on or prior
to the first anniversary of the Termination Date (and, in the case of options, shall be
exercisable until the earlier of the expiration of such Subsequent Equity Awards or the
first anniversary of the Termination Date), unless the Board or the Committee determines in
its sole discretion to accelerate vesting of additional portions of any Equity Awards. For
purposes of the preceding sentence, any Subsequent Equity Award that has “cliff vesting”
(i.e., other than pro rata annual vesting) shall become vested pro rata based on the total
vesting period of such Subsequent Equity Award and the period commencing on the grant date
of such Subsequent Equity Award and the first anniversary of the Termination Date.
Notwithstanding the foregoing, in the event Executive’s employment is terminated by the
Company without Cause or by Executive with Good Reason during the Change of Control Period
or prior to the first anniversary of a Change of Control, all Equity Awards shall become
vested in full as of the day immediately preceding the Termination Date (and, in the case of
options, exercisable until the earlier of the expiration of such Equity Awards or the first
anniversary of the Termination Date).

          (c) Severance. In the event of Executive’s “separation from service” with the
Company (as defined in Treas. Reg. § 1.409A-1(h)) due to a termination of Executive’s employment by
the Company without Cause or by Executive with Good Reason, Executive shall receive an amount equal
to two hundred percent (200%) of Executive’s then-current Base Salary for 12 full calendar months
in a single lump sum within 38 days after the date of such separation from service. In addition,
for a period of 18 months after the date of Executive’s separation from service, the Company shall
continue to provide medical, dental and vision care and life insurance benefits to Executive and/or
Executive’s family at least equal to those which would have been provided to them in accordance
with Section 4, provided that Executive agrees to elect COBRA coverage to the extent available
under the Company’s health insurance plans (and the Company shall reimburse the cost of any
premiums for such coverage on an after-tax basis).

          (d) Required Delay. In the event that any compensation with respect to Executive’s
termination is “deferred compensation” within the meaning of Section 409A of the Internal Revenue

4

 

Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder
(“Section 409A”), the stock of the Company (or any of its affiliates) is publicly traded on
an established securities market or otherwise, and Executive is determined to be a “specified
employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall
be delayed as required by Section 409A. Such delay shall last six (6) months from the date of
Executive’s termination, except in the event of Executive’s death. Within 30 days following the
end of such six-month period, or, if earlier, Executive’s death, the Company shall make a catch-up
payment to Executive equal to the total amount of such payments that would have been made during
the six-month period but for this Section 8(e). Such catch-up payment shall bear simple interest
at the prime rate of interest as published by the Wall Street Journals’ bank survey as of the first
day of the six month period, which such interest shall be paid with the catch-up payment. Wherever
payments under this Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A.

     9. Conditions to Receipt of Severance; No Duty to Mitigate; Non-Exclusivity of Rights.

          (a) Waiver and Release Agreement. In consideration of the severance payments and
other benefits described in Section 8(c), to which severance payments and benefits Executive would
not otherwise be entitled, and as a precondition to Executive becoming entitled to such severance
payments and other benefits under this Agreement (other than on account of Executive’s death),
Executive agrees to execute and deliver to the Company within 30 days after the applicable date of
Executive’s separation of service a Waiver and Release Agreement in the form attached hereto as
Appendix B (the “Release”) and not revoking it during the revocation period
provided therein. The timing of severance payments under Section 8(c) shall be further governed by
the following provisions:

          (i) In any case in which the Release (and the expiration of any revocation rights
provided therein) could only become effective in a particular tax year of Executive,
payments conditioned on execution of the release shall be made within 10 days after the
Release becomes effective and such revocation rights have lapsed.

          (ii) In any case in which the Release (and the expiration of any revocation rights
provided therein) could become effective in one of two taxable years of Executive depending
on when Executive executes and delivers the Release, payments conditioned on execution of
the Release shall be made within 10 days after the Release becomes effective and such
revocation rights have lapsed, but not earlier than the first business day of the later of
such tax years.

If Executive fails to execute and deliver the Release within 30 days after Executive’s separation
from service, or if Executive revokes such Release as provided therein, the Company shall have no
obligation to provide any of the severance payments or other benefits provided in Section 8(c).

          (b) No Duty to Mitigate. Executive shall not be required to mitigate the amount of
any payment contemplated by this Agreement, nor shall any earnings that Executive may receive from
any other source reduce any such payment.

          (c) Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company and for which Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as Executive may have under any other contract or agreement with the Company at
or subsequent to the Termination Date, which shall be payable in accordance with such plan, policy,
practice or program or contract or agreement, except as excplicitly modified by this Agreement.

     10. Certain Additional Severance Payments.

          (a) In the event it shall be determined that any payment, benefit or distribution by the
Company (or any other payor described in Treas. Reg. Sec. 1.280G-1, Q&A 10) to Executive or for
Executive’s benefit (a “Payment”) would be subject to the excise tax (the “Excise
Tax”) imposed under

5

 

Section 4999 of the Code, Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that, after payment by Executive of all taxes (and
any interest or penalties imposed with respect to such taxes), including any income and employment
taxes and Excise Taxes imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon such Payments. Notwithstanding the foregoing
provisions of this Section, if it shall be determined that Executive is entitled to a Gross-Up
Payment, but that the portion of the Payments that would be treated as “parachute payments” under
Section 280G of the Code does not exceed $50,000, then no Gross-Up Payment shall be made to
Executive and the amounts payable under Section 8(c) shall be reduced so that the Payments, in the
aggregate, are reduced to the Safe Harbor Amount. The “Safe Harbor Amount” is the greatest amount
of payments in the nature of compensation that are contingent on a Change in Control for purposes
of Section 280G of the Code that could be paid to Executive without giving rise to any Excise Tax.
If the reduction of the amounts payable under Section 8(c) would not result in a reduction of the
Payments to the Safe Harbor Amount, no amounts payable under this Agreement shall be reduced
pursuant hereto and a Gross-Up Payment shall be made to Executive.

          (b) All determinations required to be made under this Section 10, including whether a
Gross-Up Payment or reduction is required and the amount of any Gross-Up Payment or reductions of
Payments, shall be made by a nationally recognized certified public accounting firm that shall be
designated by the Company and reasonably acceptable to Executive (the “Accounting Firm”).
The Accounting Firm shall provide detailed supporting calculations both to the Company and
Executive within 15 business days of the receipt of notice from Executive that there has been a
Payment or such earlier time as is requested by the Company or Executive. All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section, shall be paid by the Company to Executive within five (5) business days
of the receipt of the Accounting Firm’s determination and in any event not later than the last day
of the calendar year after the calendar year in which the applicable Excise Tax is paid. If the
Accounting Firm determines that no Excise Tax is payable by Executive or that a reduction is
required, it shall so indicate to Executive in writing.

          (c) Any determination by the Accounting Firm shall be binding upon the Company and Executive
(absent manifest error), provided that, in the event that Executive’s tax advisor delivers to the
Accounting Firm and the Company a written opinion that the actual Excise Tax payable by Executive
is greater than the Excise Tax amount initially determined by the Accounting Firm by reason of (i)
manifest error, (ii) any Payment the existence or amount of which could not have been, or was not,
determined or known at the time the Excise Tax was initially determined or (iii) any determination,
claim or assertion made by any tax authority that the actual Excise Tax is greater than the amount
initially determined by the Accounting Firm, then, in any such case, the Accounting Firm shall
recalculate the amount of the Excise Tax and any required (or additional) Gross-Up Payment. Any
such additional calculation or determination shall be performed consistent with this Section 10.

          (d) Executive shall notify the Company in writing of any written claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a Gross-Up
Payment. Executive shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such claim is due). If
the Company notifies Executive in writing prior to the expiration of such period that the Company
desires to contest such claim, Executive shall (i) give the Company any information reasonably
requested by the Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from time to time,
including accepting legal representation with respect to such claim by an attorney reasonably
selected by the Company, (iii) cooperate with the Company in good faith in order effectively to
contest such claim, and (iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that (A) the Company shall bear and pay directly

6

 

all costs and expenses (including additional income taxes, interest and penalties) incurred in
connection with such contest, and shall indemnify and hold Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest or penalties) imposed as a result of
such representation and payment of costs and expenses, and (B) Executive’s obligation to cooperate
with the Company shall not require Executive to take any action, or forego taking any action, that
would have an adverse effect on Executive’s overall tax position.

          (e) Notwithstanding anything in this Agreement to the contrary, in no event shall any payment
by the Company pursuant to this Section 10 be made later than the end of Executive’s taxable year
next following Executive’s taxable year in which Executive remits the related taxes.

     11. Definitions.

          (a) “Accrued Obligations” means the sum of (i) Executive’s Salary hereunder through
the Termination Date, (ii) the amount of any incentive compensation, deferred compensation and
other cash compensation accrued by Executive as of the Termination Date, and (iii) any expense
reimbursements and other cash entitlements accrued by Executive as of the Termination Date, in each
case to the extent not previously paid.

          (b) “Change of Control” means 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 (as
defined in Section 11(d)), 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) 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) one or more Permitted Holders are the
only stockholders of the company(ies) resulting from such merger, consolidation, or
reorganization;

          (iii) 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, unless the
person to which such transfer is made is either (A) a Subsidiary (as defined in the
Company’s 2005 Stock Incentive Plan), (B) wholly owned by all of the stockholders of the
Company, or (C) wholly owned by Permitted Holders; or

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

          (c) “Change of Control Period” means the period commencing on (i) the earlier of (x)
the date that the Board recommends to the Company’s stockholders approval of a transaction or
series of transactions that would effect a Change of Control, (y) the date that the Board approves
the execution and delivery by the Company of a definitive agreement for a transaction or series of
transactions that would effect a Change of Control, or (z) a Change of Control, and continuing
through (ii) the close of business on the day following a Change of Control.

          (d) “Permitted Holders” means (i) the Company, (ii) any Subsidiary, or (iii) any
employee

7

 

benefit plan of the Company or any Subsidiary

     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 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 arbitrator, who shall be impartial. Except as the parties may otherwise agree,
the arbitrator 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 arbitrator, the appointing authority shall give due consideration to the issues
to be resolved, but his or her decision as to the identity of the arbitrator shall be final.
Except as otherwise provided in this Section 12, all of the arbitration proceedings shall be
conducted in accordance with the rules of the arbitrator.

          (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 arbitrator ten days following such service or
thereafter. If the arbitrator is not appointed by the appointing authority within 30 days following
such reference, any party may apply to any court within the District of Columbia for an order
appointing an arbitrator qualified as set forth below.

          (c) The prevailing party in any arbitration under this Section 12 shall be entitled to
reimbursement from the losing party of all reasonable attorneys’ fees and costs in connection with
such arbitration. 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 arbitrator may be entered in any court having
jurisdiction thereof.

          (e) It is intended that controversies or claims submitted to arbitration under this Section
12 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. Notices. All notices, requests, demands, and other communications called for
hereunder shall be in writing and shall be deemed given (a) on the date of delivery if delivered
personally, (b) one day after being sent by a well established commercial overnight service, or (c)
four days after being mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors at the following addresses, or at such other addresses
as the parties may later designate in writing:

	 	 	 	 	 	 	 
	 	 	If to the Company:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	The Advisory Board Company	 	 
	 

	 	 	 	Attn: Chairman of the Compensation Committee of the Board of Directors	 	 
	 

	 	 	 	2445 M Street, N.W.	 	 
	 

	 	 	 	Washington, D.C. 20037	 	 
	 
	 	 	 	 	 	 
	 	 	If to Executive:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	at the last residential address known by the Company as provided by Executive in
writing.

8

 

     14. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with the laws of the
District of Columbia (other than its choice of laws rules).

          (b) The paragraph headings and captions contained in this Agreement are for convenience only
and shall not be construed to define, limit or affect the scope or meaning of the provisions
hereof.

          (c) This Agreement represents the entire agreement and understanding between the parties, and
supersedes all prior or contemporaneous agreements whether written or oral, as to the subject
matter hereof. No waiver, alteration, or modification of any of the provisions of this Agreement
shall be binding unless in a writing signed by duly authorized representatives of the Company and
Executive.

          (d) If any provision hereof becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable, or void, this Agreement shall continue in full force and effect without
said provision.

          (e) The waiver of a breach of any term or provision of this Agreement, which must be in
writing, shall not operate as or be construed to be a waiver of any other previous or subsequent
breach of this Agreement.

          (f) All payments made pursuant to this Agreement shall be subject to withholding of
applicable taxes.

          (g) Executive acknowledges that he has had the opportunity to discuss this matter with and
obtain advice from his legal, tax and other professional advisors, has had sufficient time to, and
has carefully read and fully understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

          (h) This Agreement may be executed in counterparts (including by fax or PDF), and each
counterpart shall have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.

          (i) The respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement and Executive’s employment with the Company to the extent necessary
to preserve the intended rights and obligations of the parties.

          (j) For purposes of Section 409A, each COBRA continuation reimbursement payment shall be
considered one of a series of separate payments.

          (k) Any amount that Executive is entitled to be reimbursed under this Agreement shall be
reimbursed to Executive as promptly as practical and in any event not later than the last day of
the calendar year after the calendar year in which the expenses are incurred, and the amount of the
expenses eligible for reimbursement during any calendar year shall not affect the amount of
expenses eligible for reimbursement in any other calendar year.

          (l) This Agreement shall be binding upon and inure to the benefit of (a) the heirs,
executors, and legal representatives of Executive upon Executive’s death and (b) any successor of
the Company. Any such successor of the Company shall be deemed substituted for the Company under
the terms of this Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation, or other business entity which at any time, whether by purchase, merger, or
otherwise, directly or indirectly acquires all or substantially all of the assets or business of
the Company.

[Remainder of page intentionally left blank.]

9

 

     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 	 	 
	THE ADVISORY BOARD COMPANY	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Leon D. Shapiro
 

Leon D. Shapiro
	 	 	 	/s/ Robert W. Musslewhite
 

Robert W. Musslewhite
	 	 
	 

	 	Chairman, Compensation Committee	 	 	 	 	 	 

10

 

APPENDIX A

EMPLOYER PROTECTION AGREEMENT

     This
Employer Protection Agreement (“Agreement”) is made this
30th day of December , 2003, by and
between The Advisory Board Company (including any and all affiliates) (the “Company”) and Robert Musslewhite
(the “Employee”).

RECITALS

     The Company is engaged in the business of providing research and advisory 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. In order to remain
competitive in this business, the company must protect its goodwill, its base of members and
prospective members, its employees, its confidential and proprietary information, and the work
product of its employees. The Company has offered employment or continued employment to the
Employee. During the course of employment, the Employee will develop important contacts with
the members and prospective members of the Company, and will also become aware of certain
methods, practices, information and procedures with which the Company conducts its business.
The 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. Covenant Not to Compete: (a) If the Employee’s employment is terminated by the Company
with or
without Cause, or if the Employee voluntarily resigns, the Employee shall not, directly or
indirectly, either individually or
as a stockholder, director, officer, partner, consultant, owner, employee, agent, or in any other
capacity, for a period of
two (2) years following such termination, (i) provide “Company Services” within a one hundred (100)
mile radius of any
city in the United States or in any foreign country in which the Company has an office or a member
or in which the
Company had a member or directly or indirectly solicited a prospective member at any time during
the two-year period
prior to the termination of the Employee’s employment; or (ii) solicit or offer to provide or
provide “Company Services”
to any person or entity who was a member of the Company or was directly or indirectly solicited to
be a member of the
Company at any time during the two-year period prior to the termination of the Employee’s
employment with the
Company. For the purposes of this Section l(a), the term “Company Services” shall mean: (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; or (bb)
preparing published
multiple client or syndicated studies, including without limitation studies of the same or
substantially similar type
provided by the Company; or (cc) selling benchmarking data and databases of the same or
substantially similar type
provided by the Company; or (dd) providing conferences, seminars, training or education of the same
or substantially
similar type provided by the Company or (ee) assisting individual members in implementing
strategies arising from
multiple client or syndicated studies of the type described in (bb) above, or (ff) providing any
other services or products
not described in (aa) through (ee) above that the Company or its affiliates is providing, has
provided or proposes to
provide as of the date of the Employee’s termination; where any of the foregoing services described
in (aa) through (ff)
above are provided to any of the following: physicians, hospitals, health plans, pharmaceutical
companies, insurance companies, managed care companies, commercial banks, brokerage houses, mutual fund companies
or Fortune 1000 companies. Notwithstanding the foregoing, the Employee may upon termination in
the situations described above (i) work as a consultant or for a consulting firm, provided
he/she complies with all of the provisions of this Section 1(a),
and (ii) be employed fay The
Corporate Executive Board Company, a Delaware corporation (“CEB”), if such employment is
permitted and consistent with the terms of any noncompetition agreement between the Company
and CEB (the “Other Noncompetition Agreement”). The Company may release the Employee from some
or all of the restrictions in this section only in a written instrument signed by the Employee
and the Chairman of the Company. For purposes of this Agreement, so long as the Other
Noncompetition Agreement is in effect, CEB shall be deemed to be an affiliate of the Company.

For the purposes of this Section l(a), “Cause” for termination shall mean the commission of an
act of fraud, theft or dishonesty against the Company; conviction for any felony; conviction
for any misdemeanor involving moral turpitude which might, in the Company’s reasonable opinion,
cause embarrassment to the Company; misconduct; tardiness or absenteeism; substance abuse in
violation of Company policy; insubordination; incompetence; violation

 

 

of Company policy; willful or repeated non-performance or substandard performance of duties;
violation of any applicable laws, rules or regulations in connection with or during
performance of work; or any other act(s) or omissions to act which the Company deems to
constitute reason for termination in its judgment.

     (b)The Employee agrees that the restrictions imposed upon him/her by the provisions of
this section are fair and reasonable considering the nature of the Company’s business, and are
reasonably required for the protection of the Company. The Employee further agrees that the
provisions of Section l(a) relating to areas of restriction, member limitations and time
periods of restriction were specifically discussed with and are acceptable to the Employee.
Nevertheless, to the extent that these restrictions exceed the maximum areas of restriction,
which a court of competent jurisdiction would enforce, such restrictions shall be modified by
such court to be the maximum restrictions which such court would enforce. If any other part of
Section 1 (a) is held to be invalid or unenforceable, the remaining parts shall nevertheless
continue to be valid and enforceable as though the unenforceable portions were absent.

2. Solicitation of Employees: The Employee agrees that during the term of his/her
employment, and for a
period of two (2) years after termination of such employment for any reason, he/she shall not,
except in the course of
his/her duties for the Company, directly or indirectly induce or attempt to induce or otherwise
counsel, advise, ask or
encourage any person who at the time is a current employee of the Company or its affiliates, or who left such employ
within the preceding six months, to leave the employ of the Company or to accept employment with another employer
besides the Company or as an independent contractor.

3. Employment Statement: The Employee also agrees to abide by the restrictions imposed in the
“Employment Statement” addressing confidential information and return of company property,
which is attached hereto and incorporated by reference herein.

4. Miscellaneous: 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. The Employee
acknowledges that a breach
of any of the provisions of this Agreement may result in continuing and irreparable damages to the
Company for which
there may 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 the Employee from committing or
continuing to commit any
breach of this Agreement. If the Company is the prevailing party in any action for breach of this
Agreement, the
Employee shall reimburse the Company for its reasonable attorneys’ fees and costs incurred in such
action. This
Agreement shall be construed in accordance with and governed by the laws of the District of
Columbia, irrespective of
the principles of conflicts of law therein. This Agreement does not constitute a contract of
employment for a definite period of time. Either party may terminate the employment relationship with or without cause at
any time for any lawful
reason. The provisions of this Agreement shall survive the termination of the employment
relationship between the Company and the 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, the Employee shall not assign his/her obligations under this
Agreement without the express written consent of the Company and its successors and assigns.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	EMPLOYEE

	 	 	 	THE ADVISORY BOARD COMPANY
	 	 
	 
	 	 	 	 	 	 
	Robert Musslewhite
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Print Name

	 	 	 	Witness	 	 
	 
	 	 	 	 	 	 
	/s/ Robert Musslewhite
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature

	 	 	 	Title	 	 
	 
	 	 	 	 	 	 
	12/30/2003
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Date

	 	 	 	Date	 	 

 

 

APPENDIX B

Form of Waiver and Release Agreement

     This WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [TO BE
DETERMINED AT TERMINATION OF EMPLOYMENT] (the “Effective Date”), by Robert W. Musslewhite
(the “Executive”) in consideration of severance pay and benefits (the “Severance
Payment”) provided to Executive by The Advisory Board Company, a Delaware corporation (the
“Company”), pursuant to Section 8(c) of the Employment Agreement by and between the Company
and Executive (the “Employment Agreement”).

     1. Waiver and Release. Subject to the last sentence of the first paragraph of this
Section 1, Executive, on his own behalf and on behalf of his heirs, executors, administrators,
attorneys and assigns, hereby unconditionally and irrevocably releases, waives and forever
discharges the Company and each of its affiliates, parents, successors, predecessors, and the
subsidiaries, directors, owners, members, shareholders, officers, agents, and employees of the
Company and its affiliates, parents, successors, predecessors, and subsidiaries (collectively, all
of the foregoing are referred to as the “Employer”), from any and all causes of action,
claims and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen,
presently asserted or otherwise arising through the date of his signing of this Release, concerning
his employment or separation from employment. Subject to the last sentence of the first paragraph
of this Section 1, this Release includes, but is not limited to, any payments, benefits or damages
arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of
1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act,
and the Worker Adjustment and Retraining Notification Act, each as amended); any claim arising
under any state or local laws, ordinances or regulations (including, but not limited to, any state
or local laws, ordinances or regulations requiring that advance notice be given of certain
workforce reductions); and any claim arising under any common law principle or public policy,
including, but not limited to, all suits in tort or contract, such as wrongful termination,
defamation, emotional distress, invasion of privacy or loss of consortium. Notwithstanding any
other provision of this Release to the contrary, this Release does not encompass, and Executive
does not release, waive or discharge, the obligations of the Company (a) to make the payments and
provide the other benefits contemplated by the Employment Agreement, or (b) under any restricted
stock agreement, option agreement or other agreement pertaining to Executive’s equity ownership, or
(c) under any indemnification or similar agreement with Executive.

     Executive understands that by signing this Release, he is not waiving any claims or
administrative charges which cannot be waived by law. He is waiving, however, any right to
monetary recovery or individual relief should any federal, state or local agency (including the
Equal Employment Opportunity Commission) pursue any claim on his behalf arising out of or related
to his employment with and/or separation from employment with the Company.

     Executive further agrees without any reservation whatsoever, never to sue the Employer or
become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly
released in this Release.

     2. Acknowledgments. Executive is signing this Release knowingly and voluntarily. He
acknowledges that:

          (a) He is hereby advised in writing to consult an attorney before signing this Release;

          (b) He has relied solely on his own judgment and/or that of his attorney regarding the

 

 

consideration for and the terms of this Release and is signing this Release knowingly and
voluntarily of his own free will;

          (c) He is not entitled to the Severance Payment unless he agrees to and honors the terms of
this Release;

          (d) He has been given at least twenty-one (21) calendar days to consider this Release, or he
expressly waives his right to have at least twenty-one (21) days to consider this Release;

          (e) He may revoke this Release within seven (7) calendar days after signing it by submitting
a written notice of revocation to the Employer. He further understands that this Release is not
effective or enforceable until after the seven (7) day period of revocation has expired without
revocation, and that if he revokes this Release within the seven (7) day revocation period, he
shall not receive the Severance Payment;

          (f) He has read and understands the Release and further understands that, subject to the
limitations contained herein, it includes a general release of any and all known and unknown,
foreseen or unforeseen claims presently asserted or otherwise arising through the date of his
signing of this Release that he may have against the Employer; and

          (g) No statements made or conduct by the Employer has in any way coerced or unduly influenced
him or her to execute this Release.

     3. No Admission of Liability. This Release does not constitute an admission of
liability or wrongdoing on the part of the Employer, the Employer does not admit there has been any
wrongdoing whatsoever against Executive, and the Employer expressly denies that any wrongdoing has
occurred.

     4. Entire Agreement. There are no other agreements of any nature between the
Employer and Executive with respect to the matters discussed in this Release, except as expressly
stated herein, and in signing this Release, Executive is not relying on any agreements or
representations, except those expressly contained in this Release.

     5. Execution. It is not necessary that the Employer sign this Release following
Executive’s full and complete execution of it for it to become fully effective and enforceable.

     6. Severability. If any provision of this Release is found, held or deemed by a
court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute
or controlling law, the remainder of this Release shall continue in full force and effect.

     7. Governing Law. This Release shall be governed by and construed in accordance with
the laws of the District of Columbia (other than its choice of laws rules).

     8. Headings. Section and subsection headings contained in this Release are inserted
for the convenience of reference only. Section and subsection headings shall not be deemed to be a
part of this Release for any purpose, and they shall not in any way define or affect the meaning,
construction or scope of any of the provisions hereof.

[Remainder of page intentionally left blank.]

2

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day and year
first herein above written.

	 	 	 	 	 
	 
	 

	 	 

Robert W. Musslewhite
	 	 

3

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