EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into on
10/5, 2002, effective as of September 23, 2002, by and between Xxxxxxx
X'Xxxxxxx, an individual ("Executive") and Gartner, Inc., a Delaware corporation
(the "Company").
RECITALS
A. The Company and the Executive desire to set forth their agreement
pursuant to which the Executive will become the Chief Financial and
Administrative Officer of the Company effective September 23, 2002, and to
provide for Executive's employment by the Company upon the terms and conditions
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 and
Chief Financial and Administrative Officer of the Company for the Employment
Term specified in Section 2 below. Executive will report solely to the Chairman
and Chief Executive Officer of the Company, and will render such services
consistent with the foregoing role as the Chairman and Chief Executive Officer
or 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 Chief Executive Officer and the Chief
Executive Officer determines in good faith that such activities do not interfere
with the performance of Executive's responsibilities hereunder. Company
acknowledges and agrees that Executive is and may continue to serve as Director
of Beazer Homes USA (NYSE; BZH), a corporation in the business of residential
construction.
2. Term. The employment of Executive pursuant to this Agreement shall
continue though 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 12(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 $41,666.68 per month ("Base Salary") for fiscal year 2003, payable to
Executive in accordance with the Company's payroll practices 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 her 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 September 30, 2003 shall be $400,000. 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. Executive will receive a one-time sign on bonus in the amount of
$400,000, payable within 30-days following the start of her employment.
5. Executive Benefits.
(a) Stock Options. Executive shall be granted options to
purchase 650,000 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 start date of Executive's
employment, determined as provided under the appropriate Plan. Such options
shall vest 25% one year after grant and 1/36th 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,
401k, 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
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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 the Company's
policy as it exists from time to time. The Company shall, at all possible times,
provide executive with thirty (30) days prior written notice of its intention to
discontinue any benefits plan or policy.
(c) Paid Time Off. Holidays and Sabbatical. Executive shall be
entitled to vacation and sick leave (collectively "PTO"), nine (9) 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 she is
entitled to up to thirty-five (35) 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 7(a) below), in its or her sole discretion, upon thirty (30) 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 6(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) continued vesting during the Severance
Period 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 one
year following the Severance Period), (v) (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, her 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
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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 6(c) in the case of a termination following a Change in
Control.
(c) 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 II.
(d) 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 one year following the date of the Change in Control or until
Termination following a Change in Control, whichever is later) (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, her 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
similar tax imposed by state or 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
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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 6(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 written 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 a written opinion that she has substantial
authority not to report any Excise Tax on her 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 falls 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 her federal income tax return as
filed with the Internal 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
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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 her
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 she gives such notice to
the Company and (ii) the date that any payment of amount with respect to such
claim is due without penalty. 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 her
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 and paid for 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 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 her 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
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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 6(c)(ii).
(e) Termination for Disability. If at any time during the term
of this Agreement other than following a Change in Control to which Section 6(c)
applies Executive shall become unable to perform her 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 one year following the Termination Date), (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, her 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
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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 6(c) in the case of a termination
following a Change in Control, nor shall this provision limit any benefits
available under long-term disability and executive disability plans maintained
by the Company. 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.
(f) Voluntary Termination, Involuntary Termination for
Business Reasons or Termination following a Change in Control. If (A) Executive
voluntarily terminates her 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 6(c) applies, then in any such
event Executive or her 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 6 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, her 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 end of
group health benefits provided in accordance with Section 6(c)(i) 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 6(c) in
the case of a termination following a Change in Control.
(g) 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 6(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 one year
following the Termination Date), (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 her 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
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compensation, except only that this provision shall not limit any benefits
otherwise available to Executive under Section 6(c) in the case of a termination
following a Change in Control.
(h) Exclusivity. The provisions of this Section 6 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 other than a termination, constructive or otherwise of
Executive's employment in violation of Title VII of the Civil Rights Act of
1964, as amended, the 1991 Civil Rights Act, 42 U.S.C. Section 1981, the Equal
Pay Act, the Americans With Disabilities Act, the Fair Labor Standards Act, the
Age Discrimination in Employment Act, the Family and Medical Leave Act, the
Employee Retirement Income Security Act of 1974, the New York City Human Rights
Laws or any other like federal, state or other governmental civil rights
statute, regulation or ordinance (collectively "Civil Rights Violations"). Where
the termination of Executive does not arise from or result from Civil Rights
Violations, Executive's sole remedies shall be the benefits, compensation or
other payments or rights upon termination of employment expressly set forth in
subparagraphs (b), (c), (d), (e) or (f) of this Section 6, 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 her 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 8
through 11 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.
(b) Disability. "Disability" shall mean that Executive has
been unable to perform her duties as an employee as the result of her 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
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resulting from Disability may only be effected after at least sixty (60) days
prior written notice by the Company after a disability determination has been
made of its intention to terminate Executive's employment. In the event that
Executive resumes the performance of substantially all of her duties hereunder
before the termination of her 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 7(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 6(a) and 12(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 6(a) and 12(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 Chief
Financial and Administrative Officer of the Company, (x) Executive shall have
duties and responsibilities demonstrably less than those typically associated
with a Chief Financial and Administrative Officer, or (y) Executive shall no
longer report directly to the Company's Chief Executive Officer; provided that
if the Board of Directors of the Company determines by unanimous vote of all
directors that it is required either by law or by rule of any exchange or
listing entity whose rules must be complied with in order for the Company to
maintain such listing that Executive not be Chief Financial Officer, then the
involuntary removal of Executive from the position of Chief Financial Officer
will not, in and of itself, constitute a Constructive Termination under this
clause (A)(l)(y)), (2) Executive is required to relocate her 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 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 her 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
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"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 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 7(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.
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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 her employment
with the Company and subsidiaries and her performance under this Agreement are
the property of the Company and its subsidiaries. Executive agrees that she 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 her duties hereunder or as otherwise required by law. 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 her 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 by other Company employees without
Executive's knowledge; (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
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(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
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 her individual capacity as long
as she is employed by the Company she 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) Except as provided for in Section 1, as long as Executive
is employed by the Company or any of its subsidiaries, Executive agrees that she
will not, except with the express written consent of the Board of Directors of
the Company, which consent shall not be unreasonably withheld, become engaged
in, render services for, or permit her 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 her services are of a special,
unique and extraordinary value to the Company and that she 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 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 her
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
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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 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 11 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) if mailed by U.S. registered or certified mail, return receipt
requested, upon receipt 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 her at
the home address from which she 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.
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(c) Successors.
(i) Company's Successors. Company shall take all
steps necessary to insure that 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 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, by a panel of three arbitrators 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. All Costs associated
with an arbitration shall be paid by the Company. Attorneys fees 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
-15-
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.
(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 for, from and against any and all claims, losses, damages, costs
and expenses, including but not limited to attorneys' fees and costs of suit,
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. The terms of this subparagraph (i) shall
survive the termination of this Agreement.
(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 X'XXXXXXX
/s/ XXXXXXX X'XXXXXXX
-----------------------------------------
0/10/02
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