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EXHIBIT 10.5
AGREEMENT CONCERNING EXCLUSIVE SERVICES.
CONFIDENTIAL INFORMATION, BUSINESS OPPORTUNITIES.
NON-COMPETITION, NON-SOLICITATION AND WORK PRODUCT
This Agreement is made this _____ day of ________, ______, by and
between The Advisory Board Company, including its affiliates, successors and
assigns (the "Company") and _________________ (the "Employee").
RECITALS
R1. 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 good will, its base of members and
prospective members, its employees, its confidential and proprietary
information, and the work product of its employees.
R2. 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, all of which are considered
confidential and proprietary by the Company. The Employee may also prepare
studies and other written materials using the Company's resources.
R3. The Company and the Employee agree that it is reasonable and
necessary to enter into an Agreement to protect the Company's good will, its
base of members and prospective members, its employees, its confidential and
proprietary information, and its work product.
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NOW THEREFORE, in consideration of the recitals above, initial and/or
continued employment, participation in the Company's employee benefit programs
as reflected in the Liquid Markets Agreement and Continuing Stock Options
Agreement between the Employee and the Company (the "Employee Benefit Programs")
and other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties agree as follows:
1. EXCLUSIVE SERVICES
During the term of employment, the Employee shall at all times
devote his/her entire working time, attention, energies, efforts and skills to
the business of the Company, and shall not, directly or indirectly, engage in
any other business activity, whether or not for profit, gain or other pecuniary
advantages, without the express written permission of the Company. The Employee
shall not, without prior written permission of the Company, directly or
indirectly, either as an officer, director, employee, agent, adviser,
consultant, principal, stockholder, partner, owner or in any other capacity, on
his/her own behalf or otherwise, in any way engage in, represent, be connected
with or have a financial interest in, any business which is, or to the best of
his/her knowledge, is about to become, engaged in the same or substantially
similar business lines as the Company or any of its affiliates or which
otherwise competes with or is about to compete with the Company or any of its
affiliates.
2. CONFIDENTIAL INFORMATION
The Employee shall not at any time during his/her employment with
the Company or after the termination thereof for any reason disclose or use,
directly or indirectly, any confidential or proprietary information of the
Company or its affiliates. For the purposes of this Agreement, "confidential or
proprietary information" shall mean all information disclosed to the Employee,
or known by him/her as a consequence of or through his/her employment with the
Company, where such information is not generally known in the trade or industry
or which is considered confidential
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by the Company or was the subject of efforts by the Company to maintain its
confidentiality, and where such information refers or relates in any manner
whatsoever to the business activities, processes, services or products of the
Company or its affiliates. Such information includes, but is not limited to,
trade secrets as defined by the District of Columbia Trade Secrets Act, D.C.
Code Section 48-501 et seq., business and development plans (whether
contemplated, initiated or completed), business contacts, methods of operation,
policies, results of analysis, member and prospective member lists, employee
lists, business forecasts, financial data, advertising and marketing methods,
manuals, training materials, management, performance review, project assessment
and all other forms and documents used in management of the Company's employees
and in performing work for the Company, reports, correspondence, data collection
forms and other documents provided to members, syndicated, multi-client studies,
custom research reports, statements, reports, strategic information and other
information distributed to policy or management committee members, information
relating to costs and revenues, and similar information.
3. RETURN OF COMPANY PROPERTY
Upon termination of employment for any reason, the Employee shall
immediately return to the Company all of its property and confidential or
proprietary information which is in tangible form and all copies thereof in the
Employee's possession, custody or control, provided that the Employee may retain
one copy of each published study to which he/she contributed personally.
4. BUSINESS OPPORTUNITIES
During the term of his/her employment, the Employee shall
promptly disclose to the Company each business opportunity of a type which,
based upon its prospects and relationship to the business of the Company or its
affiliates, the Company might reasonably consider pursuing. In the event that
the Employee's employment is terminated for any reason, the Company or its
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affiliates shall have the exclusive right to participate in or undertake any
such opportunity on their own behalf without any involvement by or compensation
to the Employee.
5. COVENANT NOT TO COMPETE
(a) If the Employee's employment is terminated by the Company for
Cause, or if the Employee voluntarily resigns for any reason, 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" or work for or provide services to any person or entity that provides
"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," or work for a person or entity that solicits or
offers to provide or provides "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 5(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; where any of the foregoing services
described
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in (aa) through (dd) 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 work as a consultant or for a
consulting firm, provided he/she complies with all of the provisions of this
Section 5(a). 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 the purposes of this Section 5(a), "Cause" for termination shall
mean the commission of an act of fraud, theft or dishonesty against the Company;
arrest or conviction for any felony; arrest or conviction for any misdemeanor
involving moral turpitude which might, in the Company's reasonable opinion,
cause embarrassment to the Company; misconduct; substance abuse;
insubordination; violation of Company policy; willful or repeated
non-performance or substandard performance of duties; violation of any District
of Columbia, state or federal laws, rules or regulations in connection with or
during performance of work; or Performance Inconsistent with Past Levels of
Contribution. For the purposes of this Section 5(a), "Performance Inconsistent
with Past Levels of Contribution" means any neglect of, or refusal or inability
to perform, the Employee's duties or responsibilities with respect to the
Company with the same level of contribution as in past periods of employment; or
any insubordination, dishonesty, negligence or malfeasance in the performance of
such duties and responsibilities; or the taking of actions which impair the
Employee's ability to perform such duties and responsibilities; or any material
violation of Company rules or regulations.
(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
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the provisions of Section 5(a) relating to areas of restriction, member
limitations, or time periods of restriction were specifically discussed in good
faith and are acceptable to the Employee. Nevertheless, to the extent that these
restrictions exceed the maximum areas of restriction, member limitations or
periods of time which a court of competent jurisdiction would enforce, the areas
of restriction, member limitations or time periods shall be modified by such
court to be the maximum areas of restriction, member limitations or time periods
which such court would enforce in any state in which such court shall be
convened. If any other part of Section 5(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.
6. 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, or
offer employment to or hire such person, or work for any person or entity that
offers employment to or hires such person.
7. INVENTIONS, IMPROVEMENTS AND COPYRIGHTABLE MATERIALS
The Employee shall disclose promptly in writing and assign
immediately, and hereby assigns to the Company, all of the Employee's right,
title and interest in and to, any inventions, improvements, original works of
authorship, formulas, processes, programs, benchmarking or other databases,
techniques, know-how, data, developments or discoveries, whether or not
patentable or copyrightable (hereinafter referred to collectively as "Work
Product"), which the Employee may
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make or conceive, or first reduce to practice or learn either solely or jointly
with others, during the employment period with the Company through the
Employee's work with the Company or with any other person or entity pursuant to
an assignment by the Company. The Employee acknowledges the special interest the
Company holds in its processes, techniques and technologies in producing its
editorial works and agrees that such processes, techniques and technologies
shall not be directly or indirectly used or distributed by the Employee for the
interests of any person or entity besides the Company.
(a) All disclosures and assignments made pursuant to this
Agreement are made without royalty or any additional consideration to the
Employee other than the regular compensation paid to the Employee by the
Company.
(b) The Employee shall execute, acknowledge and deliver to the
Company all necessary documents, and shall take such other action as may be
necessary to assist the Company in obtaining by statute, letters patent,
copyrights, trademarks or other statutory or common law protections for the Work
Product covered by this Agreement, vesting title and right in such patents,
copyrights, trademarks and other protections in the Company and its designees.
The Employee hereby agrees that the Work Product constitutes a "work made for
hire" in accordance with the definition of that term under the U.S. copyright
laws. The Employee shall further assist the Company in every proper and
reasonable way to enforce such patents, copyrights, trademarks and other
protections as the Company may desire. The Employee's obligation to deliver
documents and assist the Company under this Agreement applies both during and
subsequent to the term of his/her employment.
(c) Any Work Product which the Employee may disclose to anyone
within six (6) months after the termination of his/her employment, or for which
the Company may file application for letters patent, copyright, trademark or
other statutory or common law protection
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within eighteen (18) months after the termination of said employment, shall be
presumed to have been made, conceived, first reduced to practice or learned
during the term of Employee's employment and fully subject to the terms and
conditions set forth herein; provided that if the Employee, in fact, conceived
any such Work Product subsequent to the termination of the employment and such
Work Product is not based upon or derived from confidential or proprietary
information of the Company or does not relate to the scope of work performed by
the Employee pursuant to his/her employment duties, then such Work Product shall
belong to the Employee and shall be the Employee's sole property. Employee
assumes the responsibility of establishing by competent legal evidence that such
Work Product is not based on such confidential or proprietary information and
that the Employee conceived any such Work Product after the termination of
his/her employment.
(d) The Employee represents that the Work Product does not
infringe any copyright or other proprietary right of any person or entity.
(e) Attached to and made as part of this Agreement as Exhibit A
is a complete list of all Work Product, patented or copyrighted, which has been
made or conceived or first reduced to practice by the Employee alone or jointly
prior to the date of his/her employment. Such Work Product shall be excluded
from the operation of this Agreement. If there is no such list on Exhibit A, the
Employee represents that no such Work Product exists at the time of signing this
Agreement.
8. SEVERABILITY
If any provision of this Agreement shall be determined, by a
court having jurisdiction, to be invalid, illegal or unenforceable, the
remainder of this Agreement shall not be affected but shall continue in full
force and effect as though such invalid, illegal or unenforceable provision were
not originally a part of this Agreement.
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9. SPECIFIC PERFORMANCE, LIQUIDATED DAMAGES AND ATTORNEYS' FEES
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 a temporary restraining order, preliminary injunction and permanent
injunction restraining the Employee from committing or continuing to commit any
breach of this Agreement both pending further legal proceedings and for
appropriate periods in the future. Furthermore, the Employee understands that
his/her breach of this Agreement may cause monetary damages to the Company that
are difficult to calculate. Thus, should the Employee breach any term of this
Agreement, he/she shall be required to pay the Company as liquidated damages
100% of the value of all cash income (including gain from the sale of stock
obtained on exercise of any continuing options) he/she has received with respect
to the Employee Benefit Programs during the five-year period preceding said
breach and he/she shall forfeit 100% of the value of all such cash income to
which he/she may be entitled in the future. The Employee agrees that the
foregoing amount of liquidated damages is reasonable and does not constitute a
penalty. 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.
10. CHOICE OF LAW
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.
11. LIMITATIONS OF AGREEMENT
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
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any lawful reason. The provisions of this Agreement shall survive the
termination of the employment relationship between the Company and the Employee.
12. SUCCESSORS AND ASSIGNS
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
By:
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Print Name
Title:
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Signature
Date: Date:
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