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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into on July 1,
2000, between Xxxxxx X. Xxxxxxxx, an individual ("Executive") and Gartner Group,
Inc., a Delaware corporation (the "Company").
RECITALS
A. Executive currently serves as the Executive Vice President,
Chief Financial Officer of the Company.
B. The Company and Executive desire to provide for Executive's
continued 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, Chief
Financial Officer 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 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 disclosed to the Chief Executive Officer and that
the Chief Executive Officer determines in good faith 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, 2003 (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, 2003 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 $29,167 per month ("Base Salary") for the balance of fiscal year 2000 and for
fiscal 2001, payable to Executive 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
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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 Board or its
Compensation Committee shall establish the annual target bonus, 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, 2000 and September 30, 2001 shall
be between $300,000 and $600,000. 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. 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.
(c) Vacation, Sick Leave, 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 she is entitled to up to four (4)
weeks vacation per calendar year. Vacation which is not used during any calendar
year will roll over to the following year only to the extent provided under the
Company's vacation 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 sixty days' prior written
notice of termination.
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(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, then in addition
to salary and vacation accrued through the Termination Date, Executive shall be
entitled to receive the following: (i) continued salary for a period of three
years following the Termination Date at the rate then in effect, payable in
accordance with the Company's regular payroll schedule as in effect from time to
time, (ii) at the Termination Date Executive's minimum 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, a pro rata
share (based on the proportion of the fiscal year during which Executive
remained an employee of the Company) of the bonus that would have been payable
to Executive under the bonus plan in excess of Executive's minimum target bonus
for the fiscal year, (iv) following the end of the first fiscal year following
the fiscal year in which the Termination Date occurs, Executive's minimum target
bonus for such following fiscal year (or, if the target bonus for such year was
not previously set, then Executive's minimum target bonus for the fiscal year in
which the Termination Date occurred), (v) 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, (vi) (A) 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, for three years following the
Termination Date, 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, (vii) continuation of Executive's automobile
benefits for one year following the Termination Date, 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. Notwithstanding the
foregoing, however, the Company shall not be required to continue to pay the
salary or bonus specified in clauses (i)(iii) or (iv) hereof for any period
following the Termination Date if Executive violates the noncompetition
agreement set forth in Section 11.
(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 vacation accrued through the date of the Change in
Control plus an amount equal to three 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, (iv) (A) 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
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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, for three years following the date of the Change in
Control (even if Executive ceases employment), 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 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 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 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 fails to pursue its remedies pursuant
to clause F below and Executive
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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
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. 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;
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(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 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 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).
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(d) 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 in addition to salary and vacation accrued through the
Termination Date, Executive shall be entitled to receive the following: (i)
continued salary for a period of three 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, Executive's minimum 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
one year following the Termination Date (v) (A) 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, for three years following
the Termination Date, 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 6(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) Involuntary Termination for Business Reasons, Termination
following a Change in Control or Voluntary Termination. If (A) Executive is
terminated involuntarily for Business Reasons, or (B) 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 addition to salary and accrued vacation
through the Termination Date, Executive or her representatives shall be entitled
to receive the following: (i) the right to exercise all stock options held by
Executive for thirty days following the Termination Date (or such longer period
as may be provided in the applicable stock option plan or agreement), but only
to the extent vested as of the Termination Date, (ii) 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 Termination Date provided Executive makes the
appropriate election and payments, and (iii) 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. If Executive voluntarily terminates her
employment (other than in the case of a Constructive Termination), then in
addition to salary and accrued vacation through the Termination
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Date, Executive or her representatives shall be entitled to receive the
following: (i) salary for eighteen months following the Termination Date, at the
rate then in effect, payable in accordance with the Company's regular payroll
schedule as in effect from time to time, (ii) the right to vest in all stock
options, restricted stock or other equity arrangements subject to vesting while
salary continues to be paid and the right to exercise all stock options held by
Executive for thirty days following the last date on which salary is paid (or
such longer period as may be provided 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 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 6(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 vacation 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 (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 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) 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. 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 6, whichever shall be applicable and those benefits required to be
provided by law.
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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 any 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 days following the delivery
of such notice. For purposes 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 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 resulting from Disability may only be effected after at
least sixty 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 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 an Executive
Vice President of the Company, or (x) Executive shall have duties and
responsibilities demonstrably less than those typically associated with a Chief
Marketing Officer or (2) Executive is required to relocate her place of
employment, other than a
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relocation within fifty 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 or termination consistent
with a general reduction of pay across the executive staff as a group, as an
economic or strategic measure as a result of poor 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 days following
the delivery of such notice and (B) within the ninety 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 "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 lease 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
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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.
(vi) Notwithstanding the foregoing, the issuance of shares of
the Company's common stock upon conversion of the Company's 6% Convertible
Subordinated Notes (as such notes may be amended, restated, refinanced,
supplemented or otherwise modified from time to time), which Notes were issued
pursuant to the Securities Purchase Agreement dated as of March 21, 2000 among
the Company and the purchasers party thereto, shall not constitute a Change of
Control for purposes of this Agreement.
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 association
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 Company, other
than proper disclosure or use in the performance of her 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 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
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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 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 including applications,
powers of attorney, assignments or other instruments which the Company 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 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 Company.
(b) 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 Company, 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
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agrees that during the term of this Agreement and for the period of three 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 three 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 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
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have been duly given (i) when delivered, if personally delivered, (ii) three
business days after deposit in the U.S. mail, if mailed by U.S. registered or
certified mail, return receipt requested, or (iii) one 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 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 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.
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(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
Stamford, Connecticut, 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 Connecticut 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, 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.
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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 GROUP, INC.
By:
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Xxxxxxx X. Xxxxxxxx
Chief Executive Officer
XXXXXX X. XXXXXXXX
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