EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into on January 20,
2003, effective as of October 1, 2002, by and between Xxxxxxx Xxxxxxxx, an
individual ("Executive") and Gartner, Inc., a Delaware corporation (the
"Company").
RECITALS
A. Executive is currently Senior Vice President of the Company. The
parties desire to provide for Executive's continued employment with the Company
in the position of Executive Vice President effective as of October 1, 2002, and
in connection therewith desire that the terms of Executive's employment be set
forth herein.
AGREEMENT
THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereby agree as follows:
1. Employment. Executive will serve as Executive Vice President of the
Company for the Employment Term specified in Section 2 below. Executive will
report solely to the Chief Executive Officer of the Company, and will render
such services consistent with the foregoing role as the Chief Executive Officer
or the Board of Directors may from time to time direct. Executive's office shall
be located at the executive offices of the Company in Stamford, Connecticut.
Executive may (i) serve on corporate, civic or charitable boards or committees
and (ii) deliver lectures, fulfill speaking engagements or teach at educational
institutions, to the extent consistent with the Company's policies (as
applicable) or are disclosed to the board of directors and the board determines
in good faith that such activities do not interfere with the performance of
Executive's responsibilities hereunder.
2. Term. The employment of Executive pursuant to this Agreement shall
continue through September 30, 2005 (the "Employment Term"), unless extended or
earlier terminated as provided in this Agreement. The Employment Term shall
automatically be extended for additional one-year periods commencing on October
1, 2005 and continuing each year thereafter, unless either Executive or the
Company gives the other written notice, in accordance with Section 13(a) and at
least 90 days prior to the then scheduled expiration of the Employment Term, of
such party's intention not to extend the Employment Term.
3. Salary. As compensation for the services rendered by Executive under
this Agreement, the Company shall pay to Executive a base salary initially equal
to $22,917 per month ("Base Salary") for fiscal year 2003, payable to Executive
on a monthly basis in accordance with the Company's payroll practices as in
effect from time to time during the Employment Term. The Base Salary shall be
subject to adjustment by the Board of Directors of the Company or the
Compensation Committee of the Board of Directors, in the sole discretion of the
Board or such Committee, on an annual basis; provided, however, that Executive's
salary may not be decreased other than any such reduction consistent with a
general reduction of pay across the executive staff as a group, as an economic
or strategic measure due to poor financial performance by the Company.
4. Bonus. In addition to his Base Salary, Executive shall be entitled to
participate in the Company's executive bonus program. The annual target bonus
shall be established by the Board or its Compensation Committee, in the
discretion of the Board or such Committee, and shall be payable based on
achievement of specified Company and individual objectives. Executive's target
bonus for the fiscal year ending December 31, 2003 shall be $135,000. Such bonus
amounts shall be subject to annual adjustment by the Board or the Compensation
Committee of the Board, in the sole discretion of the Board or such Committee,
on an annual basis; provided, however, that Executive's target bonus may not be
decreased without Executive's consent other than any such reduction consistent
with a general reduction of pay across the executive staff as a group, as an
economic or strategic measure due to poor financial performance by the Company.
5. Executive Benefits.
(a) Stock Options. Executive shall be granted options to purchase
200,000 shares of Class A Common Stock of the Company ("Stock") under the
Company's 1994 and 1996 Stock Option Plans and/or the Company's 1998 Long Term
Stock Option Plan and/or any future Stock Option Plans adopted by the Company
and approved by shareholders (each, a "Plan"), at an exercise price equal to
fair market value of the Stock on the date of grant, determined as provided
under the appropriate Plan. Each option grant shall vest 25% one year after
grant and 1/48th per month thereafter, subject to continuous status as an
employee or consultant (such that all the options subject to each grant shall
have vested 4 years from the date of grant assuming continuous service);
provided that vesting of all or a portion of such options shall accelerate upon
certain events as described below.
(i) Shares issuable under each of the Plans have been
registered on Form S-8 under the Securities Act of 1933, as amended or, as to
each Plan, will be so registered no later than the earliest date on which an
option under each Plan is granted to Executive.
(ii) In the event that during the Employment Term the Company
should create a material spin-off entity in which the Company intends to offer
an equity stake to third party investors or the public and in which executives
or employees of the Company or such entity are to receive capital stock or
options to purchase capital stock, then Executive shall be granted capital stock
in such entity, or an option to purchase such capital stock, in such amounts as
the Board of Directors of the Company or its Compensation Committee shall deem
appropriate in connection with the formation or spin-off.
(b) Other Employee and Executive Benefits. Executive will be
entitled to receive all benefits provided to senior executives, executives and
employees of the Company generally from time to time, including medical, dental,
life insurance and long-term disability, and the executive split-dollar life
insurance and executive disability plan, in each case so long as and to the
extent the same exist; provided, that in respect to each such plan Executive is
otherwise eligible and insurable in accordance with the terms of such plans.
Executive will also be entitled to automobile benefits pursuant to a policy to
be implemented by the Company with the concurrence of the Chairman of the
Compensation Committee of the Board of Directors.
-2-
(c) Paid Time Off, Holidays and Sabbatical. Executive shall be
entitled to vacation, sick leave, holidays and sabbatical in accordance with the
policies of the Company as they exist from time to time. Executive understands
that under the current policy he is entitled to up to 35 Paid Time Off (PTO)
days per calendar year. PTO which is not used during any calendar year will roll
over to the following year only to the extent provided under the Company's PTO
policies as they exist from time to time.
6. Severance Benefits.
(a) At Will Employment. Executive's employment shall be "at will."
Either the Company or Executive may terminate this agreement and Executive's
employment at any time, with or without Business Reasons (as defined in Section
8(a) below), in its or his sole discretion, upon sixty (60) days' prior written
notice of termination.
(b) Involuntary Termination. If at any time during the term of this
Agreement, other than following a Change in Control to which Section 7(c)
applies, the Company terminates the employment of Executive involuntarily and
without Business Reasons or a Constructive Termination occurs, or if the Company
elects not to renew this Agreement upon the expiration of the Employment Term,
then Executive shall be entitled to receive the following: (i) salary and PTO
days accrued through the Termination Date, plus continued salary for a period of
two (2) years following the Termination Date (the "Severance Period"), payable
in accordance with the Company's regular payroll schedule as in effect from time
to time, (ii) any unpaid bonus from the fiscal year prior to the fiscal year in
which the Termination Date occurred, payable concurrently with the Company's
payment of bonuses for that year to other Company executives, (iii) target bonus
for the year in which the Termination Date occurs, target bonus for the next
following fiscal year, and a pro rated portion of target bonus for the balance
of the Severance Period (or, if the target bonus for a fiscal year within the
Severance Period was not previously set, then such calculation shall be based on
Executive's target bonus for the fiscal year in which the Termination Date
occurred), payable concurrently with the Company's payment of bonuses for those
years to other Company executives (iv) acceleration in full of vesting of all
outstanding stock options, TARPs and other equity arrangements granted to
Executive prior to the effective date of this Agreement, subject to vesting and
held by Executive (and in this regard, all such options and other exercisable
rights held by Executive shall remain exercisable for (A) in the case of the
Fiscal 1999 Option Grant, the Fiscal 2000 Option Grant, any subsequent option
grants prior to the effective date of this Agreement, and all prior option
grants having an exercise price per share equal to or less than the fair market
value of the Company's Common Stock on the date hereof, one year following the
Termination Date and (B) in the case of all other option grants, one year
following the expiration of the Severance Period, or in the case of any option
such longer period as may be provided in the applicable plan or agreement), (v)
continued vesting during the Severance Period of all outstanding stock options,
TARPs and other equity arrangements granted to Executive on or following the
effective date of this Agreement, subject to vesting and held by Executive (vi)
(A) for two (2) years following the Termination Date (or until Executive obtains
other employment, whichever first occurs), continuation of group health benefits
at the Company's cost pursuant to the Company's standard programs as in effect
from time to time (or at the Company's election substantially similar health
benefits as in effect at the Termination Date, through a third party carrier)
for Executive, his spouse and any children, and (B) thereafter, to the extent
COBRA shall be applicable to the Company, continuation of health benefits
-3-
for such persons at Executive's cost, for a period of 18 months or such longer
period as may be applicable under the Company's policies then in effect,
provided the Executive makes the appropriate election and payments, (vii)
reasonable office support for one year following the Termination Date (or until
Executive obtains other employment, whichever first occurs), and (viii) no other
compensation, severance or other benefits, except only that this provision shall
not limit any benefits otherwise available to Executive under Section 7(c) in
the case of a termination following a Change in Control. Notwithstanding the
foregoing, however, the Company shall not be required to continue to pay the
bonus specified in clause (iii) hereof for any period following the Termination
Date if Executive violates the noncompetition agreement set forth in Section 12
during the two (2) year period following the Termination Date.
(c) Change in Control.
(i) Benefits. If during the term of this Agreement a "Change
in Control" occurs (as defined below), then Executive shall be entitled to
receive the following: (i) salary and PTO days accrued through the date of the
Change in Control plus an amount equal to three (3) years of Executive's salary
as then in effect, payable immediately upon the Change in Control, (ii) an
amount equal to three times Executive's target bonus for the fiscal year in
which the Change in Control occurs (as well as any unpaid bonus from the prior
fiscal year), all payable immediately upon the Change in Control, (iii)
acceleration in full of vesting of all outstanding stock options, TARPs and
other equity arrangements subject to vesting and held by Executive (and in this
regard, all such options and other exercisable rights held by Executive shall
remain exercisable for (A) in the case of the Fiscal 1999 Option Grant, the
Fiscal 2000 Option Grant, any future option grants, and all prior option grants
having an exercise price per share equal to or less than the fair market value
of the Company's Common Stock on the date hereof, one year following the date of
the Change in Control and (B) in the case of all other option grants, 90 days
following the date of the Change in Control, or in the case of any option such
longer period as may be provided in the applicable plan or agreement) (iv) (A)
for at least three (3) years following the date of the Change in Control (even
if Executive ceases employment), continuation of group health benefits at the
Company's cost pursuant to the Company's standard programs as in effect from
time to time (or at the Company's election substantially similar health benefits
as in effect at the Termination Date (if applicable), through a third party
carrier) for Executive, his spouse and any children, and (B) thereafter, to the
extent COBRA shall be applicable, continuation of health benefits for such
persons at Executive's cost, for a period of 18 months or such longer period as
may be applicable under the Company's policies then in effect, provided the
Executive makes the appropriate election and payments, and (v) no other
compensation, severance or other benefits.
(ii) Additional Payments by the Company.
A. If it is determined (as hereafter provided) that any
payment or distribution by the Company to or for the benefit of Executive,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without limitation any stock
option, stock appreciation right or similar right, or the lapse or termination
of any restriction on or the vesting or exercisability of any of the foregoing
(a "Payment"), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) or to any
-4-
similar tax imposed by stateor local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any such interest
and penalties, are hereafter collectively referred to as the "Excise Tax"), then
Executive will be entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
B. Subject to the provisions of clause F below, all
determinations required to be made under this Section 7(c)(ii), including
whether an Excise Tax is payable by Executive and the amount of such Excise Tax
and whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, will be made by the Company's independent certified public accountants
prior to the Change in Control (the "Accounting Firm"). The Company will direct
the Accounting Firm to submit its determination and detailed supporting
calculations to both the Company and Executive within 15 calendar days after the
date of the Change in Control or the date of Executive's termination of
employment, if applicable, and any other such time or times as may be requested
by the Company or Executive. If the Accounting Firm determines that any Excise
Tax is payable by Executive, the Company will pay the required Gross-Up Payment
to Executive within five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it will, at the same time as it makes such determination, furnish
Executive with an opinion that he has substantial authority not to report any
Excise Tax on his federal, state, local income or other tax return. Any
determination by the Accounting Firm as to the amount of the Gross-Up Payment
will be binding upon the Company and Executive. As a result of the uncertainty
in the application of Section 4999 of the Code (or any successor provision
thereto) and the possibility of similar uncertainty regarding applicable state
or local tax law at the time of any determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts or fails to pursue its remedies pursuant to clause F below and
Executive thereafter is required to make a payment of any Excise Tax, the
Company or Executive may direct the Accounting Firm to determine the amount of
the Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and Executive as promptly as
possible. Any such Underpayment will be promptly paid by the Company to, or for
the benefit of, Executive within twenty days after receipt of such determination
and calculations.
C. The Company and Executive will each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or Executive, as the case may be, reasonably requested
by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determination contemplated
by clause B above.
D. The federal, state and local income or other tax
returns filed by Executive will be prepared and filed on a consistent basis with
the determination of the Accounting Firm with respect to the Excise Tax payable
by Executive. Executive will make proper payment of the amount of any Excise
Tax, and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of his federal income tax return as filed with the
Internal
-5-
Revenue Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other documents reasonably
requested by the Company, evidencing such payment. If prior to the filing of
Executive's federal income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, Executive will within twenty days thereafter
pay to the Company the amount of such reduction.
E. The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations contemplated by
clauses B and D above will be borne by the Company. If such fees and expenses
are initially advanced by Executive, the Company will reimburse Executive the
full amount of such fees and expenses within twenty days after receipt from
Executive of a statement therefor and reasonable evidence of his payment
thereof.
F. Executive will notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification will be given as
promptly as practicable but no later than 10 business days after Executive
actually receives notice of such claim and Executive will further apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by Executive). Executive
will not pay such claim prior to the earlier of (i) the expiration of the
30-calendar-day period following the date on which he gives such notice to the
Company and (ii) the date that any payment of amount with respect to such claim
is due. If the Company notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive will:
(i) provide the Company with any written records
or documents in his possession relating to such claim
reasonably requested by the Company;
(ii) take such action in connection with
contesting such claim as the Company will reasonably
request in writing from time to time, including without
limitation accepting legal representation with respect
to such claim by an attorney competent in respect of the
subject matter and 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 the Company will bear and pay directly all costs
and expenses (including interest and penalties) incurred in connection with such
contest and will indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such representation and payment of
costs and expenses. Without limiting the foregoing provisions of this clause F,
the Company will control all proceedings taken in connection with the contest of
any claim
-6-
contemplated by this clause F and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim (provided that Executive may
participate therein at his own cost and expense) and may, at its option, either
direct Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company will determine;
provided, however, that if the Company directs Executive to pay the tax claimed
and xxx for a refund, the Company will advance the amount of such payment to
Executive on an interest-free basis and will indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such
advance; and provided further, however, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Executive with
respect to which the contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's control of any such contested
claim will be limited to issues with respect to which a Gross-Up Payment would
be payable hereunder and Executive will be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
G. If, after the receipt by Executive of an amount
advanced by the Company pursuant to clause F above, Executive receives any
refund with respect to such claim, Executive will (subject to the Company's
complying with the requirements of clause F above) within twenty days thereafter
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company pursuant to clause F above, a
determination is made that Executive will not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial or refund prior to the expiration of 30 days
after such determination, then such advance will be forgiven and will not be
required to be repaid and the amount of such advance will offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid pursuant to this
Section 7(c)(ii).
(d) Termination for Disability. If at any time during the term of
this Agreement other than following a Change in Control to which Section 7(c)
applies Executive shall become unable to perform his duties as an employee as a
result of incapacity, which gives rise to termination of employment for
Disability, then Executive shall be entitled to receive the following: (i)
salary and PTO days accrued through the Termination Date plus continued salary
for a period of three (3) years following the Termination Date, payable in
accordance with the Company's regular payroll schedule as in effect from time to
time, (ii) at the Termination Date, 100% of Executive's target bonus for the
fiscal year in which the Termination Date occurs (plus any unpaid bonus from the
prior fiscal year), (iii) following the end of the fiscal year in which the
Termination Date occurs and management bonuses have been determined, any bonus
that would have been payable to Executive under the bonus plan in excess of
Executive's target bonus, (iv) acceleration in full of vesting of all
outstanding stock options held by Executive (and in this regard, all such
options and other exercisable rights held by Executive shall remain exercisable
for (A) in the case of the Fiscal 1999 Option Grant, the Fiscal 2000 Option
Grant, any future option grants, and all prior option grants having an exercise
price per share equal to or less than the fair market value of the Company's
Common Stock on the date hereof, one year following the Termination Date and (B)
in the case of
-7-
all other option grants, 90 days following the Termination Date, or in the case
of any option such longer period as may be provided in the applicable plan or
agreement), (v) (A) for three (3) years following the Termination Date,
continuation of group health benefits at the Company's cost pursuant to the
Company's standard programs as in effect from time to time (or at the Company's
election substantially similar health benefits as in effect at the Termination
Date, through a third party carrier) for Executive, his spouse and any children,
and (B) thereafter, to the extent COBRA shall be applicable to the Company,
continuation of health benefits for such persons at Executive's cost, for a
period of 18 months or such longer period as may be applicable under the
Company's policies then in effect, provided the Executive makes the appropriate
election and payments, and (vi) no other compensation, severance or other
benefits, except only that this provision shall not limit any benefits otherwise
available to Executive under Section 7(c) in the case of a termination following
a Change in Control. Notwithstanding the foregoing, however, the Company may
deduct from the salary specified in clause (i) hereof the amount of any payments
then received by Executive under any disability benefit program maintained by
the Company.
(e) Voluntary Termination, Involuntary Termination for Business
Reasons or Termination following a Change in Control. If (A) Executive
voluntarily terminates his employment (other than in the case of a Constructive
Termination), (B) Executive is terminated involuntarily for Business Reasons, or
(C) Executive is terminated involuntarily, is terminated in a Constructive
Termination or is terminated upon the Disability of Executive, in any such case
following a Change in Control to which Section 7(c) applies, then in any such
event Executive or his representatives shall be entitled to receive the
following: (i) salary and accrued PTO days through the Termination Date only,
(ii) the right to exercise all stock options held by Executive for thirty (30)
days following the Termination Date (or such longer period as may be provided in
paragraph (b), (c), (d) or (f) of this Section 7 or in the applicable stock
option plan or agreement), but only to the extent vested as of the Termination
Date, (iii) to the extent COBRA shall be applicable to the Company, continuation
of group health plan benefits pursuant to the Company's standard programs as in
effect from time to time (or at the Company's election continuation by the
Company of substantially similar group health benefits as in effect at the
Termination Date, through a third party carrier), for Executive, his spouse and
any children, for a period of 18 months (or such longer period as may be
applicable under the Company's policies then in effect) following the
Termination Date provided Executive makes the appropriate election and payments,
and (iv) no further severance, benefits or other compensation, except only that
this provision shall not limit any benefits otherwise available to Executive
under Section 7(c) in the case of a termination following a Change in Control.
(f) Termination Upon Death. If Executive's employment is terminated
because of death, then Executive's representatives shall be entitled to receive
the following: (i) salary and PTO days accrued through the Termination Date,
(ii) a pro rata share of Executive's target bonus for the year in which death
occurs, based on the proportion of the fiscal year during which Executive
remained an Employee of the Company (plus any unpaid bonus from the prior fiscal
year), (iii) except in the case of any such termination following a Change in
Control to which Section 7(c) applies, acceleration in full of vesting of all
outstanding stock options, TARPs and other equity arrangements subject to
vesting and held by Executive (and in this regard, all such options and other
exercisable rights held by Executive shall remain exercisable for (A) in the
case of the Fiscal 1999 Option Grant, the Fiscal 2000 Option Grant, any future
option grants, and all prior option grants having an exercise price per share
equal to or less than the fair market value of the Company's
-8-
Common Stock on the date hereof, one year following the Termination Date and (B)
in the case of all other option grants, 90 days following the Termination Date,
or in the case of any option such longer period as may be provided in the
applicable plan or agreement), (iv) to the extent COBRA shall be applicable to
the Company, continuation of group health benefits pursuant to the Company's
standard programs as in effect from time to time (or at the Company's election
continuation by the Company of substantially similar group health benefits as in
effect at the Termination Date, through a third party carrier), for Executive's
spouse and any children for a period of 18 months (or such longer period as may
be applicable under the Company's policies then in effect) provided Executive's
estate makes the appropriate election and payments, (v) any benefits payable to
Executive or his representatives upon death under insurance or other programs
maintained by the Company for the benefit of the Executive, and (vi) no further
benefits or other compensation, except only that this provision shall not limit
any benefits otherwise available to Executive under Section 7(c) in the case of
a termination following a Change in Control.
(g) Exclusivity. The provisions of this Section 7 are intended to be
and are exclusive and in lieu of any other rights or remedies to which Executive
or the Company may otherwise be entitled, either at law, tort or contract, in
equity, or under this Agreement, in the event of any termination of Executive's
employment. Executive shall be entitled to no benefits, compensation or other
payments or rights upon termination of employment other than those benefits
expressly set forth in paragraph (b), (c), (d), (e) or (f) of this Section 7,
whichever shall be applicable and those benefits required to be provided by law.
7. Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:
(a) Business Reasons. "Business Reasons" means (i) gross negligence,
willful misconduct or other willful malfeasance by Executive in the performance
of his duties, (ii) Executive's conviction of a felony, or an other criminal
offense involving moral turpitude, (iii) Executive's material breach of this
Agreement, including without limitation any repeated breach of Sections 9
through 12 hereof, provided that, in the case of any such breach, the Board
provides written notice of breach to the Executive, specifically identifying the
manner in which the Board believes that Executive has materially breached this
Agreement, and Executive shall have the opportunity to cure such breach to the
reasonable satisfaction of the Board within thirty (30) days following the
delivery of such notice. For purpose of this paragraph, no act or failure to act
by Executive shall be considered "willful" unless done or omitted to be done by
Executive in bad faith or without reasonable belief that Executive's action or
omission was in the best interests of the Company or its affiliates. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. The Board must notify Executive
of any event constituting Business Reasons within ninety (90) days following the
Board's actual knowledge of its existence (which period shall be extended during
the period of any reasonable investigation conducted in good faith by or on
behalf of the Board) or such event shall not constitute Business Reasons under
this Agreement.
-9-
(b) Disability. "Disability" shall mean that Executive has been
unable to perform his duties as an employee as the result of his incapacity due
to physical or mental illness, and such inability, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to Executive or Executive's legal
representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least sixty (60) days written notice by the Company of its intention to
terminate Executive's employment. In the event that Executive resumes the
performance of substantially all of his duties hereunder before the termination
of his employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.
(c) Termination Date. "Termination Date" shall mean (i) if this
Agreement is terminated on account of death, the date of death; (ii) if this
Agreement is terminated for Disability, the date specified in Section 8(b);
(iii) if this Agreement is terminated by the Company, the date on which
indicated in a notice of termination is given to Executive by the Company in
accordance with Sections 7(a) and 13(a); (iv) if the Agreement is terminated by
Executive, the date indicated in a notice of termination given to the Company by
Executive in accordance with Sections 7(a) and 13(a); or (v) if this Agreement
expires by its terms, then the last day of the term of this Agreement.
(d) Constructive Termination. A "Constructive Termination" shall be
deemed to occur if (A) (1) Executive's position changes as a result of an action
by the Company such that (w) Executive shall no longer be Executive Vice
President of the Company, or (y) Executive shall no longer report directly to
the Chief Executive Officer, (2) Executive is required to relocate his place of
employment, other than a relocation within fifty (50) miles of Executive's
current residence or the Company's current Stamford headquarters, (3) there is a
reduction in Executive's base salary or target bonus other than any such
reduction consistent with a general reduction of pay across the executive staff
as a group, as an economic or strategic measure due to poor financial
performance by the Company or (4) there occurs any other material breach of this
Agreement by the Company (other than a reduction of Executive's base salary or
target bonus which is not described in the immediately preceding clause (3))
after a written demand for substantial performance is delivered to the Board by
Executive which specifically identifies the manner in which Executive believes
that the Company has materially breached this Agreement, and the Company has
failed to cure such breach to the reasonable satisfaction of Executive within
thirty (30) days following the delivery of such notice and (B) within the ninety
(90) day period immediately following an action described in clauses (A)(1)
through (4), Executive elects to terminate his employment voluntarily.
(e) Change in Control. A "Change in Control" shall be deemed to have
occurred if:
(i) any "Person," as such term is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than (i) the Company, (ii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or (iii) any company
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
becomes the "Beneficial Owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing (A) in
the case of any Person filing as a "passive investor" on
-10-
Schedule 13G under the Exchange Act, 25% or more of the combined voting power of
the Company's then-outstanding securities (but only for so long as such Person
continues to report as a 13G passive investor), and (B) in the case of any
Person not filing or no longer filing as a 13G passive investor, 20% or more of
the combined voting power of the Company's then-outstanding securities;
(ii) during any period of twenty-four months (not including
any period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
(i) a director nominated by a Person who has entered into an agreement with the
Company to effect a transaction described in Section (8)(e)(i), (iii) or (iv)
hereof, (ii) a director nominated by any Person (including the Company) who
publicly announces an intention to take or to consider taking actions
(including, but not limited to, an actual or threatened proxy contest) which if
consummated would constitute a Change in Control or (iii) a director nominated
by any Person who is the Beneficial Owner, directly or indirectly, of securities
of the Company representing 10% or more of the combined voting power of the
Company's securities) whose election by the Board or nomination for election by
the Company's stockholders was approved in advance by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;
(iii) the stockholders of the Company approve any transaction
or series of transactions under which the Company is merged or consolidated with
any other company, other than a merger or consolidation (A) which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 66 2/3% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation and (B) after
which no Person holds 20% or more of the combined voting power of the
then-outstanding securities of the Company or such surviving entity;
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets; or
(v) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Change in Control has occurred.
Notwithstanding the foregoing definition of "Change in Control," Executive
acknowledges and agrees that the issuance of Class A Common Stock by the Company
upon conversion of certain notes issued by the Company to Silver Lake Partners,
L.P. and affiliates pursuant to that certain Securities Purchase Agreement dated
as of March 21, 2000 shall not, in and of itself, constitute a Change in Control
for purposes of this Agreement, it being understood that if such conversion,
when combined with any other event, meets the criteria described in any of
clauses (i) through (v) above, then such combination of events shall constitute
a Change in Control for purposes of this Agreement.
-11-
8. Confidential Information.
(a) Executive acknowledges that the Confidential Information (as
defined below) relating to the business of the Company and its subsidiaries
which Executive has obtained or will obtain during the course of his association
with the Company and subsidiaries and his performance under this Agreement are
the property of the Company and its subsidiaries. Executive agrees that he will
not disclose or use at any time, either during or after the Employment period,
any Confidential Information without the written consent of the Board of
Directors of the Company, other than proper disclosure or use in the performance
of his duties hereunder. Executive agrees to deliver to the Company at the end
of the Employment Term, or at any other time that the Company may request, all
memoranda, notes, plans, records, documentation and other materials (and copies
thereof) containing Confidential Information relating to the business of the
Company and its subsidiaries, no matter where such material is located and no
matter what form the material may be in, which Executive may then possess or
have under his control. If requested by the Company, Executive shall provide to
the Company written confirmation that all such materials have been delivered to
the Company or have been destroyed. Executive shall take all appropriate steps
to safeguard Confidential Information and to protect it against disclosure,
misuse, espionage, loss and theft.
(b) "Confidential Information" shall mean information which is not
generally known to the public and which is used, developed, or obtained by the
Company or its subsidiaries relating to the businesses of any of the Company and
its subsidiaries or the business of any customer thereof including, but not
limited to: products or services; fees, costs and pricing structure; designs;
analyses; formulae; drawings; photographs; reports; computer software, including
operating systems, applications, program listings, flow charts, manuals and
documentation; databases; accounting and business methods; inventions and new
developments and methods, whether patentable or unpatentable and whether or not
reduced to practice; all copyrightable works; the customers of any of the
Company and its subsidiaries and the Confidential Information of any customer
thereof; and all similar and related information in whatever form. Confidential
Information shall not include any information which (i) was rightfully known by
Executive prior to the Employment Term; (ii) is publicly disclosed by law or in
response to an order of a court or governmental agency; (iii) becomes publicly
available through no fault of Executive or (iv) has been published in a form
generally available to the public prior to the date upon which Executive
proposes to disclose such information. Information shall not be deemed to have
been published merely because individual portions of the information have been
separately published, but only if all the material features comprising such
information have been published in combination.
9. Inventions and Patents. In the event that Executive, as a part of
Executive's activities on behalf of the Company, generates, authors or
contributes to any invention, new development or method, whether or not
patentable and whether or not reduced to practice, any copyrightable work, any
trade secret, any other Confidential Information, or any information that gives
any of the Company and its subsidiaries an advantage over any competitor, or
similar or related developments or information related to the present or future
business of any of the Company and its subsidiaries (collectively "Developments
and Information"), Executive acknowledges that all Developments and Information
are the exclusive property of the Company. Executive hereby assigns to the
Company, its nominees, successors or assigns, all rights, title and interest to
Developments and Information. Executive shall cooperate with the Company's Board
of Directors to protect the interests of the
-12-
Company and its subsidiaries in Developments and Information. Executive shall
execute and file any document related to any Developments and Information
requested by the Company's Board of Directors including applications, powers of
attorney, assignments or other instruments which the Company's Board of
Directors deems necessary to apply for any patent, copyright or other
proprietary right in any and all countries or to convey any right, title or
interest therein to any of the Company's nominees, successors or assigns.
10. No Conflicts.
(a) Executive agrees that in his individual capacity he will not
enter into any agreement, arrangement or understanding, whether written or oral,
with any supplier, contractor, distributor, wholesaler, sales representative,
representative group or customer, relating to the business of the Company or any
of its subsidiaries, without the express written consent of the Board of
Directors of the Company.
(b) As long as Executive is employed by the Company or any of its
subsidiaries, Executive agrees that he will not, except with the express written
consent of the Board of Directors of the Company, become engaged in, render
services for, or permit his name to be used in connection with, any for-profit
business other than the business of the Company, any of its subsidiaries or any
corporation or partnership in which the Company or any of its subsidiaries have
an equity interest.
11. Non-Competition Agreement.
(a) Executive acknowledges that his services are of a special,
unique and extraordinary value to the Company and that he has access to the
Company's trade secrets, Confidential Information and strategic plans of the
most valuable nature. Accordingly, Executive agrees that for the period of two
(2) years following the Termination Date, Executive shall not directly or
indirectly own, manage, control, participate in, consult with, render services
for, or in any manner engage in any business competing with the businesses of
the Company or any of its subsidiaries as such businesses exist or are in
process of development on the Termination Date (as evidenced by written
proposals, market research or similar materials), including without limitation
the publication of periodic research and analysis of the information technology
industries. Nothing herein shall prohibit Executive from being a passive owner
of not more than 1% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) In addition, for a period of two (2) years commencing on the
Termination Date, Executive shall not (i) directly or indirectly induce or
attempt to induce any employee of the Company or any subsidiary (other than his
own assistant) to leave the employ of the Company or such subsidiary, or in any
way interfere with the relationship between the Company or any subsidiary and
any employee thereof, (ii) hire directly or through another entity any person
who was an employee of the Company or any subsidiary at any time during the then
preceding 12 months, or (iii) directly or indirectly induce or attempt to induce
any customer, supplier, licensee or other business relation of the Company or
any subsidiary to cease doing business with the Company or
-13-
such subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
subsidiary.
(c) Executive agrees that these restrictions on competition and
solicitation shall be deemed to be a series of separate covenants not-to-compete
and a series of separate non-solicitation covenants for each month within the
specified periods, separate covenants not-to-compete and non-solicitation
covenants for each state within the United States and each country in the world,
and separate covenants not-to-compete for each area of competition. If any court
of competent jurisdiction shall determine any of the foregoing covenants to be
unenforceable with respect to the term thereof or the scope of the subject
matter or geography covered thereby, such remaining covenants shall nonetheless
be enforceable by such court against such other party or parties or upon such
shorter term or within such lesser scope as may be determined by the court to be
enforceable.
(d) Because Executive's services are unique and because Executive
has access to Confidential Information and strategic plans of the Company of the
most valuable nature, the parties agree that the covenants contained in this
Section 12 are necessary to protect the value of the business of the Company and
that a breach of any such covenant would result in irreparable and continuing
damage for which there would be no adequate remedy at law. The parties agree
therefore that in the event of a breach or threatened breach of this Agreement,
the Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof.
12. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by
this Agreement shall be in writing, shall be effective when given, and in any
event shall be deemed to have been duly given (i) when delivered, if personally
delivered, (ii) three (3) business days after deposit in the U.S. mail, if
mailed by U.S. registered or certified mail, return receipt requested, or (iii)
one (1) business day after the business day of deposit with Federal Express or
similar overnight courier, if so delivered, freight prepaid. In the case of
Executive, notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Corporate Secretary.
(b) Notice of Termination. Any termination by the Company or
Executive shall be communicated by a notice of termination to the other party
hereto given in accordance with paragraph (a) hereof. Such notice shall indicate
the specific termination provision in this Agreement relied upon.
(c) Successors.
(i) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall be entitled to assume the rights
-14-
and shall be obligated to assume the obligations of the Company under this
Agreement and shall agree to perform the Company's obligations under this
Agreement in the same manner and to the same extent as the Company would be
required to perform such obligations in the absence of a succession. For all
purposes under this Agreement, the term "Company" shall include any successor to
the Company's business and/or assets which executes and delivers the assumption
agreement described in this subsection (i) or which becomes bound by the terms
of this Agreement by operation of law.
(ii) Executive's Successors. The terms of this Agreement and
all rights of Executive hereunder shall inure to the benefit of, and be
enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
(iii) No Other Assignment of Benefits. Except as provided in
this Section 12(c), the rights of any person to payments or benefits under this
Agreement shall not be made subject to option or assignment, either by voluntary
or involuntary assignment or by operation of law, including (without limitation)
bankruptcy, garnishment, attachment or other creditor's process, and any action
in violation of this subsection (iii) shall be void.
(d) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by Executive and by an authorized officer of the Company
(other than Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(e) Entire Agreement. This Agreement shall supersede any and all
prior agreements, representations or understandings (whether oral or written and
whether express or implied) between the parties with respect to the subject
matter hereof, including without limitation the Prior Agreement.
(f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(g) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
New York, New York, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. No party shall be entitled to seek or be awarded
punitive damages. All attorneys fees and costs shall be allocated or apportioned
as agreed by the parties or, in the absence of an agreement, in such manner as
the arbitrator or court shall determine to be appropriate to reflect the final
decision of the deciding body as compared to the initial positions in
arbitration of each party. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York as they apply to contracts
entered into and wholly to be performed within such State by residents thereof.
-15-
(h) Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
(i) Indemnification. In the event Executive is made, or threatened
to be made, a party to any legal action or proceeding, whether civil or
criminal, by reason of the fact that Executive is or was a director or officer
of the Company or serves or served any other entity of which the Company owns
50% or more of the equity in any capacity, Executive shall be indemnified by the
Company, and the Company shall pay Executive's related expenses when and as
incurred, all to the full extent permitted by law, pursuant to Executive's
existing indemnification agreement with the Company in the form made available
to all Executive and all other officers and directors or, if it provides greater
protection to Executive, to the maximum extent allowed under the law of the
State of the Company's incorporation.
(j) Legal Fees. The Company will pay directly the fees and expenses
of counsel retained by Executive in connection with the preparation, negotiation
and execution of this Agreement.
(k) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
GARTNER, INC.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxxx
Chairman of the Board and
Chief Executive Officer
XXXXXXX XXXXXXXX
/s/ XXXXXXX XXXXXXXX
----------------------------------------
1/3/03
-16-