================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) OCTOBER 15, 2004 ---------------------------- GARTNER, INC. (Exact name of registrant as specified in its charter) DELAWARE 1-14443 04-3099750 - ------------------------------- ------------------------ ------------------- (State or Other Jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) P.O. BOX 10212 56 TOP GALLANT ROAD STAMFORD, CT 06902-7747 (Address of Principal Executive Offices, including Zip Code) (203) 316-1111 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On October 15, 2004, Gartner, Inc. (the "Company") entered into an Employment Agreement (the "Agreement") with Mr. Eugene A. Hall, with an effective date of August 1, 2004, pursuant to which Mr. Hall will serve as Chief Executive Officer and a director of the Company. The Agreement has an initial term of three years, with automatic one year renewals commencing on the third anniversary, unless either party provides the other with at least 90 days prior written notice that the term shall not be extended. Under the Agreement, Mr. Hall's annual base salary initially is $650,000 and he will be eligible to receive a bonus upon the achievement of certain performance objectives. The annual target bonus shall be equal to 100% of Mr. Hall's annual base salary, with the actual bonus being subject to adjustment for over- or under-achievement of Company and individual objectives, provided, however, that the maximum actual bonus will not exceed 200% of Mr. Hall's base salary. The bonus for the first (12) months of Mr. Hall's employment will be guaranteed at 100% of Mr. Hall's base salary. The Agreement further provides that Mr. Hall will receive a nonqualifed stock option to purchase an aggregate of 800,000 shares of Class A Common Stock of the Company, with a per-share exercise price equal to the per-share fair market value of Class A Common Stock of the Company on the date of grant. The option shall vest in equal annual installments on the first four anniversaries of the date of grant, subject to Mr. Hall's continued employment with the Company on each vesting date. Notwithstanding the preceding sentence, the option shall vest in full upon a change in control. The Agreement also provides that Mr. Hall will be granted 500,000 restricted shares of Class A Common Stock of the Company, with a par value purchase price. Restrictions shall lapse as to (i) 300,000 shares when the Company's Class A Common Stock trades at an average price of $20 or more for sixty (60) consecutive trading days, (ii) 100,000 shares when the Company's Class A Common Stock trades at an average price of $25 or more for sixty (60) consecutive trading days, and (iii) 100,000 shares when the Company's Class A Common Stock trades at an average price of $30 or more for sixty (60) consecutive trading days, subject to Mr. Hall's continued employment with the Company through each such date. Notwithstanding the preceding sentence, all restrictions shall lapse in full upon a change in control. Pursuant to the Agreement, Mr. Hall is also 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, in each case so long as and to the extent the same exist. Pursuant to the Agreement, if the Company terminates the employment of Mr. Hall involuntarily and without business reasons or a constructive termination occurs, or if the Company elects not to renew the Agreement upon the expiration of the employment term and Mr. Hall within ninety (90) days following the expiration of the employment term terminates his employment, then, subject to Mr. Hall signing and not revoking a general release of claims against the Company and its successors, Mr. Hall shall be entitled to receive the following: (i) base salary and paid time off ("PTO") accrued through the termination date plus continued base salary for a period of twenty-four months 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, 200% of Mr. Hall's target bonus for the fiscal year in which the termination date occurs, and any earned but unpaid bonus from the prior fiscal year, (iii) 24 months' continued vesting under all outstanding stock options and other equity arrangements subject to vesting and held by Mr. Hall (with a post-termination exercise period of approximately 24 months, subject to the maximum term of the award), and (iv) reimbursement for premiums incurred to continue group health benefits (or, at the Company's election, to obtain substantially similar health benefits through a third party carrier) for twenty-four (24) months for Mr. Hall, his spouse and any children, provided that Mr. Hall makes the appropriate election. In the event of a change in control, Mr. Hall shall be entitled to receive the following: (i) base salary and PTO accrued through the date of the change in control plus an amount equal to three (3) years of Mr. Hall's base salary as then in effect, (ii) an amount equal to three (3) times Mr. Hall's target bonus for the fiscal year in which the change in control occurs, and (iii) (a) for at least three (3) years following the date of the change in control (even if Mr. Hall 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 Mr. Hall, his spouse and any children, and (b) thereafter, to the extent COBRA shall be applicable, continuation of health benefits for such persons at Mr. Hall'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 that Mr. Hall makes the appropriate election and payments. Pursuant to the Agreement, Mr. Hall will also receive additional payments equal to any excise tax and related income tax incurred as a result of any payments made by the Company that would not have been imposed absent such payments (including excise taxes on change in control payments made to Mr. Hall) sufficient to restore him to the same after-tax position he would have been in if the excise tax had not been imposed. The Employment Agreement between the Company and Mr. Hall is attached hereto as Exhibit 10.1 and incorporated herein by reference. On October 15, 2004, the Company also entered into a Restricted Stock Agreement with Mr. Hall, the material terms of which are included in the description above. The Restricted Stock Agreement between the Company and Mr. Hall is attached hereto as Exhibit 10.2 and incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 10.1 Employment Agreement, dated as of October 15, 2004, by and between Gartner and Eugene A. Hall. 10.2 Restricted Stock Agreement, dated as of October 15, 2004, by and between Gartner and Eugene A. Hall. 99.1 Press Release dated as of October 15, 2004.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GARTNER, INC. By: /s/ Christopher Lafond ------------------------------------ Christopher Lafond Executive Vice President, Chief Financial Officer Date: October 15, 2004
EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 10.1 Employment Agreement, dated as of October 15, 2004, by and between Gartner and Eugene A. Hall. 10.2 Restricted Stock Agreement, dated as of October 15, 2004, by and between Gartner and Eugene A. Hall. 99.1 Press Release dated as of October 15, 2004.
EXHIBIT 10.1 EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement") is entered into on October 15, 2004, effective as of August 4, 2004, by and between Eugene A. Hall, an individual ("Executive") and Gartner, Inc., a Delaware corporation (the "Company"). 1. Employment. Executive will serve as Chief Executive Officer of the Company for the Employment Term specified in Section 3 below. Executive will report solely to the Board of Directors and will render such services consistent with the foregoing role as the Board of Directors (the "Board") may from time to time direct. Executive's office shall be located at the executive offices of the Company in Stamford, Connecticut. Executive may (i) serve on corporate, civic or charitable boards or committees and (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, to the extent consistent with the Company's policies (as applicable) or are disclosed to the Board and the Board determines in good faith that such activities do not interfere with the performance of Executive's responsibilities hereunder. 2. Board of Directors. Executive shall be appointed to the Board immediately upon commencement of his employment, filling the unexpired term of Michael D. Fleisher. During the Employment Term, the Company shall include Executive on the Company's slate of nominees to be elected to the Board at appropriate meetings of stockholders of the Company. Upon termination of the Employment Term for any reason, Executive shall promptly resign as a director of the Company if the Board so requests. 3. Term. The employment of Executive pursuant to this Agreement shall continue through July 31, 2007 (the "Employment Term"), unless extended or earlier terminated as provided in this Agreement. The Employment Term automatically shall be extended for additional one-year periods commencing on August 1, 2007 and continuing each year thereafter, unless either Executive or the Company gives the other written notice, in accordance with Section 13(a) and at least 90 days prior to the then scheduled expiration of the Employment Term, of such party's intention not to extend the Employment Term. Upon termination of the Employment Term for any reason, Executive shall promptly resign from all positions he holds with the Company if the Board so requests. 4. Salary. As compensation for the services rendered by Executive under this Agreement, the Company shall pay to Executive an annual base salary ("Base Salary") initially equal to $650,000, payable to Executive on a semi-monthly basis in accordance with the Company's payroll practices as in effect from time to time during the Employment Term. The Base Salary shall be subject to adjustment by the Board of Directors of the Company or the Compensation Committee of the Board of Directors, in the sole discretion of the Board or such Committee, on an annual basis; provided, however, that Executive's salary may not be decreased other than pursuant to a 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. Bonus. In addition to Base Salary, Executive shall be entitled to participate in the Company's executive bonus program. Executive's annual target bonus (the "Target Bonus") shall be 100% of Base Salary, and shall be payable based on achievement of specified Company and 1
individual objectives. The actual bonus paid may be higher or lower than the Target Bonus for over- or under-achievement of Company and individual objectives, as determined by the Compensation Committee of the Board (the "Committee"); provided, however, that the maximum actual bonus will not exceed 200% of Base Salary. Bonus amounts shall be subject to annual adjustment by the Board or the Committee, in the sole discretion of the Board or the Committee; provided, however, that Executive's Target Bonus may not be decreased without Executive's consent other than pursuant to a 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. The bonus for the first twelve (12) months of Executive's employment will be guaranteed at 100% of target ($270,833 for fiscal year 2004 and $379,167 for fiscal year 2005). To receive a bonus, Executive must be an employee at the time bonuses are paid to executives. 6. Executive Benefits. (a) Stock Options. On the first market trading day on or after August 15, 2004, Executive shall be granted a nonqualifed stock option to purchase an aggregate of 800,000 shares of Class A Common Stock of the Company (the "Option"), with a per-share exercise price equal to per-share fair market value of Class A Common Stock of the Company on the date of grant, determined in accordance with the Company's 2003 Long Term Incentive Plan (the "Plan"). The Option shall vest in equal annual installments on the first four annual anniversaries of the date of grant, subject to Executive's continued employment with the Company on each vesting date, and, except as otherwise provided herein, shall be on terms consistent with the Company's standard form of notice of grant and the Plan. Notwithstanding the preceding sentence, if a Change in Control occurs prior to the termination of Executive's employment and prior to the expiration of the Option, then the Option shall vest in full and be exercisable as to all of the covered shares, including shares as to which the Option would not otherwise be exercisable, and subsequently shall expire in accordance with its terms. (b) Restricted Stock. Executive shall be granted 500,000 restricted shares of Class A Common Stock of the Company (the "Stock Grant"), with a par value purchase price, on the same day that the Option is granted. Restrictions shall lapse as to (i) 300,000 shares when the Company's Class A Common Stock trades at an average price of $20 or more for sixty (60) consecutive trading days, (ii) 100,000 shares when the Company's Class A Common Stock trades at an average price of $25 or more for sixty (60) consecutive trading days, and (iii) 100,000 shares when the Company's Class A Common Stock trades at an average price of $30 or more for sixty (60) consecutive trading days, subject to Executive's continued employment with the Company through each such date (the "Vesting Schedule"). Notwithstanding the Vesting Schedule, all restrictions on the Stock Grant shall lapse in full upon a Change in Control, provided there still are unvested, outstanding shares. If Executive's employment with the Company terminates for any reason, any portion of the Stock Grant still subject to restrictions shall be forfeited to the Company. (c) Other Employee and Executive Benefits. Executive shall 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, executive disability plan, and all other benefits under the Company's Executive Benefits program, in each case so long as and to the extent the same exist; provided, that -2-
in respect to each such plan Executive is otherwise eligible and insurable in accordance with the terms of such plans. Notwithstanding the preceding sentence, Executive's right to receive severance payments and benefits shall be only as provided in Section 7 hereof. Executive also shall be eligible to participate in the Company's relocation program, in accordance with terms and conditions outlined in the Company's relocation policy. Relocation expenses must be incurred within thirty months from the commencement of Executive's employment to be eligible for reimbursement. If Executive chooses to postpone relocation, the Company shall provide Executive with an appropriate apartment rental for up to thirty months. Furthermore, the Company shall provide Executive with an automobile and driver for Executive's ground transportation needs during the Employment Term. (d) Vacation, Sick Leave, Holidays and Sabbatical. Executive shall be entitled to paid time off ("PTO"), sick leave, holidays and sabbatical in accordance with the policies of the Company as they exist from time to time. Executive understands that under the current policy he is entitled to 35 PTO days per calendar year. PTO 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. 7. 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, in its or his sole discretion, upon sixty (60) days' prior written notice of termination. (b) Involuntary Termination. If at any time during the term of this Agreement (other than following a Change in Control to which Section 7(c) applies) the Company terminates the employment of Executive involuntarily and without Business Reasons or a Constructive Termination occurs, or if the Company elects not to renew this Agreement upon the expiration of the Employment Term and Executive within ninety (90) days following the expiration of the Employment Term terminates his employment, then, subject to Executive signing and not revoking a general release of claims against the Company and its successors, Executive shall be entitled to receive the following: (i) Base Salary and PTO accrued through the Termination Date plus continued Base Salary for a period of twenty-four months 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, 200% of Executive's Target Bonus for the fiscal year in which the Termination Date occurs, and any earned but unpaid bonus from the prior fiscal year, (iii) 24 months' continued vesting under all outstanding stock options and other equity arrangements subject to vesting and held by Executive other than any award that vests pursuant to performance-based criteria (such other awards to include the Stock Grant) (and in this regard, all such options and other exercisable rights held by Executive shall remain exercisable for 30 days following the last day of the 24 month continued vesting period, subject to the maximum term of the award), (iv) reimbursement for premiums incurred to continue group health benefits (or, at the Company's election, to obtain substantially similar health benefits through a third party carrier) for twenty-four (24) months for Executive, his spouse and any children, provided the Executive makes the appropriate election, and (v) no other compensation, severance or other benefits, except only that this provision shall not limit any benefits otherwise available to Executive under Section 7(c)(ii) in the case of a Change in -3-
Control. Notwithstanding the foregoing, if Executive violates the provisions set forth in Section 12, Executive no longer shall be entitled to receive any severance payments and benefits and Executive's outstanding stock options and other equity arrangements shall expire immediately. (c) Change in Control. (i) Benefits. If during the term of this Agreement a "Change in Control" occurs, then Executive shall be entitled to receive the following: (A) Base Salary and PTO accrued through the date of the Change in Control plus an amount equal to three (3) years of Executive's Base Salary as then in effect, payable immediately upon the Change in Control, (B) an amount equal to three (3) times Executive's Target Bonus for the fiscal year in which the Change in Control occurs (as well as any earned but unpaid bonus from the prior fiscal year, such bonus not to be multiplied by three (3)), all payable immediately upon the Change in Control, and (C) (a) for at least three (3) years following the date of the Change in Control (even if Executive ceases employment), continuation of group health benefits at the Company's cost pursuant to the Company's standard programs as in effect from time to time (or at the Company's election substantially similar health benefits as in effect at the Termination Date (if applicable), through a third party carrier) for Executive, his spouse and any children, and (b) thereafter, to the extent COBRA shall be applicable, continuation of health benefits for such persons at Executive's cost, for a period of 18 months or such longer period as may be applicable under the Company's policies then in effect, provided the Executive makes the appropriate election and payments, and (D) no other compensation, severance or other benefits. (ii) Additional Payments by the Company. A. If any payment or benefit Executive would receive pursuant to Section 7(c)(i) or otherwise (collectively, the "Payment") would (x) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and (y) be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties payable with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then Executive shall be entitled to receive from the Company an additional payment (the "Gross-Up Payment," and any iterative payments pursuant to this paragraph also shall be "Gross-Up Payments") in an amount that shall fund the payment by Executive of any Excise Tax on the Payment, as well as all income and employment taxes on the Gross-Up Payment, any Excise Tax imposed on the Gross-Up Payment and any interest or penalties imposed with respect to income and employment taxes imposed on the Gross-Up Payment. B. Subject to the provisions of clause F below, all determinations required to be made under this Section 7(c)(ii), including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, will be made by the Company's independent certified public accountants prior to the Change in Control (the "Accounting Firm"). The Company will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within fifteen (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 -4-
may be requested by the Company or Executive. If the Accounting Firm determines that any Excise Tax is payable by Executive, the Company will pay the required Gross-Up Payment to Executive within five business days after receipt of such determination and calculations. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. Any determination by the Accounting Firm as to the amount of the Gross-Up Payment will be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar uncertainty regarding applicable state or local tax law at the time of any determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts or fails to pursue its remedies pursuant to clause F below and Executive thereafter is required to make a payment of any Excise Tax, the Company or Executive may direct the Accounting Firm to determine the amount of the Underpayment that has occurred and to submit its determination and detailed supporting calculations to both the Company and Executive as promptly as possible. Any such Underpayment will be promptly paid by the Company to Executive within twenty days after receipt of such determination and calculations. C. The Company and Executive will each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by clause B above. D. The federal, state and local income or other tax returns filed by Executive will be prepared and filed on a consistent basis with the determination of the Accounting Firm with respect to the Excise Tax payable by Executive. Executive will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the Company true and correct copies (with any amendments) of his federal income tax return as filed with the Internal 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 (20) 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 (20) days after receipt from Executive of a statement therefore and reasonable evidence of his payment thereof. F. Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later than ten (10) -5-
business days after Executive actually receives notice of such claim and Executive will further apprise the Company of the nature of such claim and the date on which such claim is requested to be paid (in each case, to the extent known by Executive). Executive will not pay such claim prior to the earlier of (i) the expiration of the 30-calendar-day period following the date on which he gives such notice to the Company and (ii) the date that any payment of amount with respect to such claim is due. If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive will: (i) provide the Company with any written records or documents in his possession relating to such claim reasonably requested by the Company; (ii) take such action in connection with contesting such claim as the Company will reasonably request in writing from time to time, including without limitation accepting legal representation with respect to such claim by an attorney competent in respect of the subject matter and reasonably selected by the Company; (iii) cooperate with the Company in good faith in order effectively to contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company will bear and pay directly all costs and expenses (including interest and penalties) incurred in connection with such contest and will indemnify and hold harmless Executive, on an after-tax basis, for and against any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limiting the foregoing provisions of this clause F, the Company will control all proceedings taken in connection with the contest of any claim contemplated by this clause F and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim (provided that Executive may participate therein at his own cost and expense) and may, at its option, either direct Executive to pay the tax claimed and sue 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 sue 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. -6-
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 (20) 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 thirty (30) days after such determination, then such advance will be forgiven and will not be required to be repaid and the amount of such advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid pursuant to this Section 7(c)(ii). (d) Termination for Disability. If at any time during the Employment Term Executive becomes unable to perform his duties as an employee as a result of incapacity, which gives rise to termination of employment for Disability, then (i) Executive shall be entitled to receive payments and benefits in accordance with the Company's then applicable plans, policies, and arrangements and (ii) Executive's outstanding stock options and other equity arrangements shall expire in accordance with the terms of the applicable award agreement(s). (e) Voluntary Termination, Involuntary Termination for Business Reasons or Termination following a Change in Control. If (i) Executive voluntarily terminates his employment (other than in the case of a Constructive Termination), (ii) Executive is terminated involuntarily for Business Reasons, or (iii) Executive's employment is terminated following a Change in Control to which Section 7(c) applies, then in any such event (A) all further vesting of Executive's stock options and other equity arrangements will cease immediately and such awards will expire in accordance with the terms of the applicable award agreement(s), (B) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned), and (C) Executive will not be entitled to any severance but Executive will be paid all accrued but unpaid PTO, expense reimbursements and other benefits due to Executive through his termination date under any Company-provided or paid plans, policies, and arrangements. (f) Termination Upon Death. If Executive's employment is terminated because of death, then (i) Executive's representatives shall be entitled to receive payments and benefits in accordance with the Company's then applicable plans, policies, and arrangements and (ii) Executive's outstanding stock options and other equity arrangements shall expire in accordance with the terms of the applicable award agreement(s). (g) Exclusivity. The provisions of this Section 7 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, either at law, tort or contract, in equity, or under this Agreement, in the event of any termination of Executive's employment. Executive shall be entitled to no benefits, compensation or other payments or rights upon termination of employment other than those benefits expressly set forth in paragraph (b), (c), (d), (e) or (f) of this Section 7, whichever shall be applicable and those benefits required to be provided by law. -7-
(h) Mitigation. Amounts provided under this Section 7 shall not be reduced by any future earnings Executive may receive following the termination of his employment with the Company. 8. Definition of Terms. The following terms referred to in this Agreement shall have the following meanings: (a) Business Reasons. "Business Reasons" means (i) gross negligence, willful misconduct or other willful malfeasance by Executive in the performance of his duties, (ii) Executive's conviction of a felony, or an other criminal offense involving moral turpitude, or (iii) Executive's material breach of this Agreement, including without limitation any repeated breach of Sections 9 through 12 hereof, provided that, in the case of any such breach, the Board provides written notice of breach to the Executive, specifically identifying the manner in which the Board believes that Executive has materially breached this Agreement, and Executive shall have the opportunity to cure such breach to the reasonable satisfaction of the Board within thirty (30) days following the delivery of such notice. For purpose of this paragraph, no act or failure to act by Executive shall be considered "willful" unless done or omitted to be done by Executive in bad faith or without reasonable belief that Executive's action or omission was in the best interests of the Company or its affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. The Board must notify Executive of any event constituting Business Reasons within ninety (90) days following any Board member's (excluding Executive) 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 his duties as an employee as the result of his incapacity due to physical or mental illness, and such inability, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Company's insurers. Termination resulting from Disability may only be effected after at least sixty (60) days written notice by the Company of its intention to terminate Executive's employment. In the event that Executive resumes the performance of substantially all of his duties hereunder before the termination of his employment becomes effective, the notice of intent to terminate automatically shall be deemed to have been revoked. (c) Termination Date. "Termination Date" shall mean (i) if this Agreement is terminated on account of death, the date of death; (ii) if this Agreement is terminated for Disability, the date specified in Section 8(b); (iii) if this Agreement is terminated by the Company, the date on which indicated in a notice of termination is given to Executive by the Company in accordance with Sections 7(a) and 13(a); (iv) if the Agreement is terminated by Executive, the date indicated in a notice of termination given to the Company by Executive in accordance with Sections 7(a) and 13(a); or (v) if this Agreement expires by its terms, then the last day of the term of this Agreement. (d) Constructive Termination. A "Constructive Termination" shall be deemed to occur if Executive elects to voluntarily terminate employment within the ninety (90) day period -8-
immediately following any of the following events: (i) Executive's position changes as a result of an action by the Company such that (A) Executive shall no longer be Chief Executive Officer of the Company, (B) Executive shall have duties and responsibilities demonstrably less than those typically associated with a Chief Executive Officer, or (C) Executive shall no longer report directly to the Company's Board of Directors; provided that if the Board determines by unanimous vote of all directors (excluding Executive) 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 Executive Officer, then the involuntary removal of Executive from the position of Chief Executive Officer will not, in and of itself, constitute a Constructive Termination, (ii) Executive is required to relocate his place of employment, other than a relocation within fifty (50) miles of the Company's current Stamford headquarters, (iii) 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 (iv) 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 (iii) or the termination of Executive's service as a director due to applicable legal or listing requirements or stockholders failing to reelect Executive to the Board) 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. (e) Change in Control. "Change in Control" shall have the same meaning as in the Company's 2003 Long Term Incentive Plan. 9. Confidential Information. (a) Executive acknowledges that the Confidential Information relating to the business of the Company and its subsidiaries which Executive has obtained or will obtain during the course of his association with the Company and subsidiaries and his performance under this Agreement are the property of the Company and its subsidiaries. Executive agrees that he will not disclose or use at any time, either during or after the Employment period, any Confidential Information without the written consent of the Board of Directors of the Company, other than proper disclosure or use in the performance of his duties hereunder. Executive agrees to deliver to the Company at the end of the Employment Term, or at any other time that the Company may request, all memoranda, notes, plans, records, documentation and other materials (and copies thereof) containing Confidential Information relating to the business of the Company and its subsidiaries, no matter where such material is located and no matter what form the material may be in, which Executive may then possess or have under his control. If requested by the Company, Executive shall provide to the Company written confirmation that all such materials have been delivered to the Company or have been destroyed. Executive shall take all appropriate steps to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. (b) "Confidential Information" shall mean information which is not generally known to the public and which is used, developed, or obtained by the Company or its subsidiaries relating to the businesses of any of the Company and its subsidiaries or the business of any customer thereof -9-
including, but not limited to: products or services; fees, costs and pricing structure; designs; analyses; formulae; drawings; photographs; reports; computer software, including operating systems, applications, program listings, flow charts, manuals and documentation; databases; accounting and business methods; inventions and new developments and methods, whether patentable or unpatentable and whether or not reduced to practice; all copyrightable works; the customers of any of the Company and its subsidiaries and the Confidential Information of any customer thereof; and all similar and related information in whatever form. Confidential Information shall not include any information which (i) was rightfully known by Executive prior to the Employment Term; (ii) is publicly disclosed by law or in response to an order of a court or governmental agency; (iii) becomes publicly available through no fault of Executive or (iv) has been published in a form generally available to the public prior to the date upon which Executive proposes to disclose such information. Information shall not be deemed to have been published merely because individual portions of the information have been separately published, but only if all the material features comprising such information have been published in combination. 10. Inventions and Patents. In the event that Executive, as a part of Executive's activities on behalf of the Company, generates, authors or contributes to any invention, new development or method, whether or not patentable and whether or not reduced to practice, any copyrightable work, any trade secret, any other Confidential Information, or any information that gives any of the Company and its subsidiaries an advantage over any competitor, or similar or related developments or information related to the present or future business of any of the Company and its subsidiaries (collectively "Developments and Information"), Executive acknowledges that all Developments and Information are the exclusive property of the Company. Executive hereby assigns to the Company, its nominees, successors or assigns, all rights, title and interest to Developments and Information. Executive shall cooperate with the Company's Board of Directors to protect the interests of the 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. 11. No Conflicts. (a) Executive agrees that in his individual capacity he will not enter into any agreement, arrangement or understanding, whether written or oral, with any supplier, contractor, distributor, wholesaler, sales representative, representative group or customer, relating to the business of the Company or any of its subsidiaries, without the express written consent of the Board. (b) As long as Executive is employed by the Company or any of its subsidiaries, Executive agrees that he will not, except with the express written consent of the Board, become engaged in, render services for, or permit his name to be used in connection with, any for-profit business other than the business of the Company, any of its subsidiaries or any corporation or partnership in which the Company or any of its subsidiaries have an equity interest. -10-
12. Non-Competition Agreement. (a) Executive acknowledges that his services are of a special, unique and extraordinary value to the Company and that he has access to the Company's trade secrets, Confidential Information and strategic plans of the most valuable nature. Accordingly, Executive agrees that for the period of twenty-four (24) months 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 that is publicly traded, so long as Executive has no active participation in the business of such corporation. (b) In addition, for a period of twenty-four (24) months commencing on the Termination Date, Executive shall not (i) directly or indirectly induce or attempt to induce any employee of the Company or any subsidiary (other than his own assistant) to leave the employ of the Company or such subsidiary, or in any way interfere with the relationship between the Company or any subsidiary and any employee thereof, (ii) hire directly or through another entity any person who was an employee of the Company or any subsidiary at any time during the then preceding 12 months, (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, or (iv) disparage the Company, its executive officers, or its directors. (c) Executive agrees that these restrictions on competition and solicitation shall be deemed to be a series of separate covenants not-to-compete and a series of separate non-solicitation covenants for each month within the specified periods, separate covenants not-to-compete and non-solicitation covenants for each state within the United States and each country in the world, and separate covenants not-to-compete for each area of competition. If any court of competent jurisdiction shall determine any of the foregoing covenants to be unenforceable with respect to the term thereof or the scope of the subject matter or geography covered thereby, such remaining covenants shall nonetheless be enforceable by such court against such other party or parties or upon such shorter term or within such lesser scope as may be determined by the court to be enforceable. (d) Because Executive's services are unique and because Executive has access to Confidential Information and strategic plans of the Company of the most valuable nature, the parties agree that the covenants contained in this Section 12 are necessary to protect the value of the business of the Company and that a breach of any such covenant would result in irreparable and continuing damage for which there would be no adequate remedy at law. The parties agree therefore that in the event of a breach or threatened breach of this Agreement, the Company or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof. -11-
13. Miscellaneous Provisions. (a) Notice. Notices and all other communications contemplated by this Agreement shall be in writing, shall be effective when given, and in any event shall be deemed to have been duly given (i) when delivered, if personally delivered, (ii) three (3) business days after deposit in the U.S. mail, if mailed by U.S. registered or certified mail, return receipt requested, or (iii) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, if so delivered, freight prepaid. In the case of Executive, notices shall be addressed to him at the home address which he most recently communicated to the Company in writing. In the case of the Company, notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Corporate Secretary. (b) Notice of Termination. Any termination by the Company or Executive shall be communicated by a notice of termination to the other party hereto given in accordance with paragraph (a) hereof. Such notice shall indicate the specific termination provision in this Agreement relied upon. (c) Successors. (i) Company's Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall be entitled to assume the rights 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 13(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. -12-
(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. (f) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect. (g) Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New York, New York, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. No party shall be entitled to seek or be awarded punitive damages. All attorneys fees and costs shall be allocated or apportioned as agreed by the parties or, in the absence of an agreement, in such manner as the arbitrator or court shall determine to be appropriate to reflect the final decision of the deciding body as compared to the initial positions in arbitration of each party. This Agreement shall be construed in accordance with and governed by the laws of the State of New York as they apply to contracts entered into and wholly to be performed within such State by residents thereof. (h) Withholding of Taxes. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes. (i) Indemnification. Executive will be covered under the Company's insurance policies and, subject to applicable law, will be provided indemnification to the maximum extent permitted by the Company's bylaws and Certificate of Incorporation, with such insurance coverage and indemnification to be in accordance with the Company's standard practices for senior executive officers but on terms no less favorable than provided to any other Company senior executive officer or director. (j) Compliance with Company Policies. During the Employment Term, Executive will comply with all Company policies generally applicable to the Company's executive officers. (k) Legal Fees. The Company will pay directly the reasonable fees and expenses of counsel retained by Executive in connection with the preparation, negotiation and execution of this Agreement (and the offer letter that preceded this Agreement), up to a maximum of $10,000. (l) 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. o O o -13-
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/ Maynard G. Webb, Jr. ------------------------------------------ Maynard G. Webb, Jr., Chairman, Compensation Committee of the Board of Directors EUGENE A. HALL /s/ Eugene A. Hall ------------------------------------------ 14
EXHIBIT 10.2 GARTNER, INC. RESTRICTED STOCK AGREEMENT FOR EUGENE A. HALL Gartner, Inc. (the "Company") hereby awards to you, Eugene A. Hall (the "Employee"), an award of restricted Class A Common Stock of the Company (the "Restricted Stock"). The date of this Restricted Stock Agreement (the "Agreement") is October 15, 2004 (the "Award Date"). Subject to the provisions of Appendix A (attached hereto), the principal features of this award are as follows: TOTAL NUMBER OF SHARES OF RESTRICTED STOCK: 500,000 SCHEDULED VESTING DATES: NUMBER OF SHARES: ------------------------ ----------------- The first date after October 15, 2004 on which the Company's Class A Common Stock trades at an average price of $20 per share (the average price shall equal the average of the high and low sales price for the Company's Class A Common Stock for the trading day in question) or more on any established stock exchange or a national market system for sixty (60) consecutive trading days* 300,000 The first date after October 15, 2004 on which the Company's Class A Common Stock trades at an average price of $25 per share (the average price shall equal the average of the high and low sales price for the Company's Class A Common Stock for the trading day in question) or more on any established stock exchange or a national market system for sixty (60) consecutive trading days* 100,000 The first date after October 15, 2004 on which the Company's Class A Common Stock trades at an average price of $30 per share (the average price shall equal the average of the high and low sales price for the Company's Class A Common Stock for the trading day in question) or more on any established stock exchange or a national market system for sixty (60) consecutive trading days* 100,000 *Except as otherwise provided in Appendix A, Employee will not vest in the Restricted Stock unless he is employed by the Company or one of its Affiliates through the applicable vesting date. Your signature below indicates your agreement and understanding that this award is subject to all of the terms and conditions contained in Appendix A. For example, important additional information on vesting and forfeiture of the shares covered by this award is contained in Paragraphs 3, 4 and 6 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT. GARTNER, INC. EMPLOYEE By:________________________________ ____________________________________ EUGENE A. HALL Title:_____________________________
APPENDIX A TERMS AND CONDITIONS OF RESTRICTED STOCK 1. Award. The Company hereby awards to the Employee an award of 500,000 shares of Restricted Stock at a purchase price $0.0005 (par value) per share, commencing on the date hereof, subject to all of the terms and conditions in this Agreement. By accepting this award of Restricted Stock, the par value purchase price for each share of Restricted Stock will be deemed paid by the Employee by past services rendered by the Employee. 2. Transfer of Shares. As soon as practicable after the Award Date, the Company will record the Restricted Stock in book form with stock transfer agent subject to the terms and conditions set forth in the Plan. As soon as practicable after the shares of Restricted Stock shall have vested in the manner set forth in Paragraphs 3 or 6, the Company will have the shares listed in street name with a brokerage company of the Company's choice, free of any restrictions imposed pursuant to this Agreement. In no event shall the shares be so listed unless and until the shares have vested and all other terms and conditions in this Agreement have been satisfied. By accepting the Restricted Stock, the Employee irrevocably nominates and appoints the Secretary of the Company as agent (the "Agent") for purposes of surrendering or transferring the Restricted Stock to the Company upon any forfeiture or transfer required or authorized by this Agreement. This power is intended as a power coupled with an interest and will survive the Employee's death. In addition, it is intended as a durable power and will survive the Employee's disability. 3. Vesting Schedule. Subject to Paragraphs 4 and 6, the shares of Restricted Stock awarded by this Agreement shall vest in accordance with the vesting provisions set forth on the first page of this Agreement. Shares of Restricted Stock shall not vest in the Employee in accordance with any of the provisions of this Agreement unless the Employee shall have been continuously employed by the Company or by one of its Affiliates from the Award Date until the date such vesting is deemed to have occurred. For purposes of this Agreement, "trading day" means any day on which the New York Stock Exchange is open for trade. For purposes of this Agreement, "Affiliate" means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company. 4. Forfeiture. Notwithstanding any contrary provision of this Agreement, the balance of the shares of Restricted Stock that have not vested at the time of the Employee's Termination of Service shall thereupon be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company. The Employee hereby appoints the Agent with full power of substitution, as the Employee's true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of the Employee to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates (whether in book form or otherwise) evidencing such unvested shares to the Company upon such Termination of Service. For purposes of this Agreement, "Termination of Service" means a cessation of the employee-employer relationship between the Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate. 5. Death of Employee. Any distribution or delivery to be made to the Employee under this Agreement shall, if the Employee is then deceased, be made to the Employee's designated beneficiary, or if no beneficiary survives the Employee, to the administrator or executor of the Employee's estate. Any designation of a beneficiary by the Employee shall be effective only if such designation is made in a form and manner acceptable to the Committee. Any transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer. For purposes of this Agreement, "Committee" means a committee appointed by the Board of Directors of the Company, and the delegee(s) of such committee. 6. Change in Control and other Acceleration. In the event of a Change in Control, the shares of Restricted Stock awarded pursuant to this Agreement shall vest as to 100% of the shares. For purposes of this Agreement, "Change in Control" shall have the same meaning as in the Company's 2003 Long Term Incentive Plan. Further, the Committee in its absolute discretion at any time may accelerate the vesting of all or any portion of the shares of Restricted Stock awarded pursuant to this Agreement. -ii-
7. Withholding of Taxes. Notwithstanding any contrary provision of this Agreement, the Company may delay delivery of any stock unless and until the Employee shall have delivered to the Company or its designated Affiliate the full amount of any federal, state or local income or other taxes which the Company or such Affiliate may be required by law to withhold with respect to such shares. The Employee may elect to satisfy any such income tax withholding requirement by having the Company withhold shares of Common Stock otherwise deliverable to the Employee or by delivering to the Company already-owned shares of Common Stock, subject to the absolute discretion of the Committee to disallow satisfaction of such withholding by the delivery or withholding of stock. 8. Rights as Stockholder. Effective as of the Award Date, the Employee shall have all of the rights or privileges of a stockholder of the Company in respect of the Restricted Stock, including with respect to voting such shares and receipt of dividends and distributions on such shares. If any such dividends or distributions are paid in shares of Company Common Stock, the shares shall be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. 9. No Effect on Employment. Subject to any employment contract with the Employee, the terms of such employment shall be determined from time to time by the Company, or the Affiliate employing the Employee, as the case may be, and the Company, or the Affiliate employing the Employee, as the case may be, shall have the right, which is hereby expressly reserved, to terminate or change the terms of the employment of the Employee at any time for any reason whatsoever, with or without good cause. The transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued employment for any period of time. A leave of absence or an interruption in service (including an interruption during military service) authorized or acknowledged by the Company, or the Affiliate employing the Employee, as the case may be, shall not be deemed a Termination of Service for the purposes of this Agreement. 10. Changes in Stock. In the event that as a result of a stock dividend, stock split, reverse stock split, reclassification, recapitalization, combination of shares or the adjustment in capital stock of the Company or otherwise, or as a result of a merger, consolidation, spin-off or other reorganization, the Company's Class A Common Stock shall be increased, reduced or otherwise changed, and by virtue of any such change the Employee shall in his or her capacity as owner of unvested shares of Restricted Stock which have been awarded to him or her (the "Prior Shares") be entitled to new or additional or different shares of stock, securities or cash; such new or additional or different shares, securities or cash shall thereupon be considered to be unvested Restricted Stock, except as provided in Paragraph 6 above, and shall be subject to all of the conditions and restrictions which were applicable to the Prior Shares pursuant to this Agreement. If the Employee receives rights or warrants with respect to any Prior Shares, such rights or warrants may be held or exercised by the Employee, provided that until such exercise any such rights or warrants and after such exercise any shares or other securities acquired by the exercise of such rights or warrants shall be considered to be unvested Restricted Stock and shall be subject to all of the conditions and restrictions which were applicable to the Prior Shares pursuant to this Agreement. The Committee in its absolute discretion at any time may accelerate the vesting of all or any portion of such new or additional shares of stock, securities, cash, rights or warrants to purchase securities or shares or other securities acquired by the exercise of such rights or warrants. 11. Tax Consequences. Set forth below is a brief summary, as of the Award Date, of some of the federal tax consequences arising from the award of shares of Restricted Stock and disposition of such shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. (a) Award of Shares of Restricted Stock. Generally, no income will be recognized by the Employee in connection with the award of unvested shares of Restricted Stock. Generally, as the shares vest, the Employee will recognize compensation income in an amount equal to the difference between the fair market value of the shares of Restricted Stock at the time the shares vest and the amount paid for the stock, if any (the "Spread"). Generally, the Spread will be subject to tax withholding by the Company, and the Company will be entitled to a tax deduction in the amount at the time the Employee recognizes compensation income with respect to shares of Restricted Stock. (b) Disposition of Shares. Upon disposition of the shares of Restricted Stock, any gain or loss is treated as capital gain or loss. If the shares are held for at least one year, any gain realized on disposition of the shares will be treated as long-term capital gain for federal income tax purposes. Long-term capital gains are grouped and netted -iii-
by holding periods. Net capital gains on assets held for more than 12 months is currently capped at 15%. Capital losses are allowed in full against capital gains, and up to $3,000 against other income. 12. Address for Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company, in care of its Secretary, at 56 Top Gallant Road, Stamford, CT 06904 or at such other address as the Company may hereafter designate in writing. 13. Award is Not Transferable. Except as provided in Paragraph 5 above, until the applicable shares of Restricted Stock vest this award and the rights and privileges conferred hereby shall not be sold, transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this award, or of any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this award and the rights and privileges conferred hereby immediately shall become null and void. If the Employee effects any action in contravention of this Paragraph 13, any provision of this Agreement to the contrary notwithstanding, the Restricted Stock at issue shall immediately be forfeited to the Company. 14. Binding Agreement. Subject to the limitation on the transferability of this award contained herein, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto. 15. Conditions for Transfer of Stock. The shares of stock deliverable to the Employee may be either previously authorized but unissued shares or issued shares that have been reacquired by the Company. The Company shall not be required to transfer on its books or listed in street name with a brokerage company any shares of Restricted Stock prior to fulfillment of all the following conditions: (a) the admission of such shares to listing on all stock exchanges on which such class of stock is then listed; (b) the completion of any registration or other qualification of such shares under any State or Federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any State or Federal governmental agency, which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the Award Date as the Committee may establish from time to time for reasons of administrative convenience. 16. Committee Authority. The Committee shall have the power to interpret this Agreement and to adopt such rules for the administration, interpretation and application of this Agreement as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Employee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to this Agreement. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under this Agreement. 17. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 18. Agreement Severable. In the event that any provision in this Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement. 19. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Connecticut, other than its conflicts of laws provisions. 20. Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. The Employee expressly warrants that he or she is not executing this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement can be made only in an express written contract executed by a duly authorized officer of the Company. o 0 o -iv-
EXHIBIT 99.1 GARTNER CEO GENE HALL RECEIVES INDUCEMENT GRANT OF RESTRICTED STOCK STAMFORD, Conn., October 15, 2004--Gartner, Inc. (NYSE: IT and ITB) (the "Company"), the world's leading technology research and advisory firm, announced that it has made an inducement grant of 500,000 shares of restricted stock to Gene Hall, its new chief executive officer. Mr. Hall officially joined Gartner as chief executive officer on August 4, 2004, succeeding Michael Fleisher who had previously announced his intention to depart as Gartner's chairman and CEO. The company announced the hiring of Mr. Hall on July 23, 2004. The shares of restricted stock were granted with the approval of the compensation committee of Gartner's board of directors. The shares are in addition to non-qualified options to purchase 800,000 shares of Gartner's Class A Common Stock issued to Mr. Hall in August under Gartner's 2003 Long Term Incentive Plan. As long as Mr. Hall remains an employee through the applicable lapse date, the restrictions on the 500,000 shares of restricted stock will lapse upon the earlier of (a) Gartner's 60-day average stock price meeting certain targets, (b) ten years from the date of grant, or (c) a change in control of Gartner. The price targets are: $20 for the first 300,000 shares, $25 for the next 100,000 shares and $30 for the remaining 100,000 shares. ABOUT GARTNER Gartner, Inc. is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Gartner Intelligence, research and events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has more than 3,500 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. For more information, visit www.gartner.com. SAFE HARBOR STATEMENT Statements in this release other than recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to, risks listed from time to time in the Company's reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2003 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. These
filings can be found on Gartner's Web site at www.gartner.com/investors and the SEC's Web site at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and the Company disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances. CONTACT: Gartner, Inc. Investor: Lisa Nadler, 203-316-3701 Lisa.nadler@gartner.com Media: Tom Hayes, 203-316-6835 tom.hayes@gartner.com