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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
[X] THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTER ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-015144
GARTNER GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-3099750
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 10212 06904-2212
56 Top Gallant Road (Zip Code)
Stamford, CT
(Address of principal executive offices)
Registrant's telephone number, including area code: (203) 316-1111
Indicate by check mark whether the Registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
The number of shares outstanding of the Registrant's capital stock as of
December 31, 1997 was 99,097,056 shares of Common Stock, Class A.
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TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS Page
Consolidated Balance Sheets at December 31, 1997 and
September 30, 1997 3
Consolidated Statements of Operations for the Three
Months ended December 31, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows for
the Three Months ended December 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7
PART II OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 12
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PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
GARTNER GROUP, INC.
Consolidated Balance Sheets
(In thousands, except share data)
December 31, September 30,
1997 1997
---------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $147,274 $142,415
Marketable securities 29,192 28,639
Fees receivable, net 216,114 205,760
Deferred commissions 19,167 23,019
Prepaid expenses and other current assets 27,609 25,775
---------------- --------------
Total current assets 439,356 425,608
Long-term marketable securities 17,952 17,691
Property, equipment and leasehold improvements, net 44,899 44,102
Intangible assets, net 136,304 132,195
Other assets 38,129 25,716
---------------- --------------
Total assets $676,640 $645,312
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $78,982 $ 85,411
Commissions payable 7,994 16,979
Accrued bonuses payable 5,829 15,722
Deferred revenues 245,282 254,071
---------------- --------------
Total current liabilities 338,087 372,183
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Long-term deferred revenues 3,933 3,259
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock: $.0005 par value 55 54
Additional paid-in capital 219,313 179,017
Cumulative translation adjustment (2,289) (1,098)
Accumulated earnings 130,782 105,138
Treasury stock, at cost (13,241) (13,241)
---------------- --------------
Total stockholders' equity 334,620 269,870
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Total liabilities and stockholders' equity $676,640 $645,312
================ ==============
See accompanying notes.
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GARTNER GROUP, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
For the three months ended
December 31,
---------------------------------
1997 1996
---------------- ---------------
Revenues:
Advisory and measurement $115,989 $92,090
Learning 4,963 4,064
Other, principally consulting and conferences 41,715 29,213
--------------- ---------------
Total revenues 162,667 125,367
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Costs and expenses:
Cost of services and product development 66,403 50,523
Selling, general and administrative 48,995 39,234
Depreciation 3,940 2,595
Amortization of intangibles 2,184 1,496
--------------- ---------------
Total costs and expenses 121,522 93,848
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Operating income 41,145 31,519
Interest income, net 2,202 1,316
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Income before provision for income taxes 43,347 32,835
Provision for income taxes 17,703 13,793
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Net income $25,644 $19,042
=============== ===============
Earnings per common share:
Basic $0.26 $0.20
Diluted $0.25 $0.19
Weighted average common shares outstanding:
Basic 97,838 93,327
Diluted 104,412 101,951
See accompanying notes.
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GARTNER GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
For the three months ended
December 31,
-------------------------------------
1997 1996
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Operating activities:
Cash (used in) provided by operating activities $(10,276) $9,161
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Investing activities:
Payment for businesses acquired (excluding cash acquired) (6,537) --
Investments in unconsolidated subsidiaries (10,507) (1,500)
Addition of property, equipment and leasehold improvements, net (4,359) (2,921)
(Purchase) sale of marketable securities, net (814) 9,784
Loans to officers (2,475) --
Other investing -- (204)
---------------- ---------------
Cash (used in) provided by investing activities (24,692) 5,159
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Financing activities:
Issuance of common stock 16,165 5,174
Tax benefits of stock transactions with employees 24,131 7,639
---------------- ---------------
Cash provided by financing activities 40,296 12,813
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Net increase in cash and cash equivalents 5,328 27,133
Effect of exchange rates on cash and cash equivalents (469) (191)
Cash and cash equivalents, beginning of period 142,415 96,755
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Cash and cash equivalents, end of period $147,274 $123,697
================ ===============
See accompanying notes.
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GARTNER GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Interim Consolidated Financial Statements
These interim consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and should be read in conjunction with
the consolidated financial statements and related notes of Gartner Group, Inc.
(the "Company") on Form 10-K for the fiscal year ended September 30, 1997. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of financial position,
results of operations and cash flows at the dates and for the periods presented
have been included. The results of operations for the three month period ended
December 31, 1997 may not be indicative of the results of operations for the
remainder of fiscal 1998.
Note 2 - Loans to Officers
On December 18, 1997, with the Board of Directors approval, the Company provided
additional loans totaling approximately $2.5 million to certain officers to
facilitate the purchase of common stock arising out of the exercise of stock
options. The loan proceeds were not used to fund the option exercise price of
the common stock acquired. The loans are full recourse obligations to the
officers and are also secured by shares of the Company's stock held by the
officers. The loans bear interest at an annual rate of 5.6% and mature on
December 17, 1999. The principal amount of the loans are included in Other
Assets on the December 31, 1997 Consolidated Balance Sheet.
Note 3 - Acquisitions
On October 29, 1997, the Company acquired a 32% membership interest in Jupiter
Communications, LLC ("Jupiter") for $8.0 million in cash. Jupiter is a provider
of analyst-based research and strategic planning services to the consumer and
Internet and interactive industry. This investment will be accounted for under
the equity method.
In addition, during the first quarter of fiscal 1998, the Company completed
additional acquisitions for consideration of $6.5 million in cash. These
acquisitions have been accounted for under the purchase method and substantially
all of the purchase price has been assigned to goodwill.
On January 30, 1998, the Company acquired all the assets and assumed the
liabilities of Interpose, Inc., for $7.5 million in cash and $0.5 million in
Class A Common Stock of the Company. Interpose, Inc. is a leading provider of
total cost of ownership (TCO) measurement and analysis tools and training.
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ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
The discussion and analysis below contains trend analysis and other
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth below under
"Quarterly Operating Income Trends," "Other Factors that May Affect Future
Performance" and elsewhere in this report.
RESULTS OF OPERATIONS
The following table sets forth certain results of operations as a percentage of
total revenues:
For the three months ended
December 31,
------------------------------------
1997 1996
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Revenues:
Advisory and measurement 71.3 % 73.5 %
Learning 3.1 3.2
Other, principally consulting and conferences 25.6 23.3
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Total revenues 100.0
100.0
---------------- ----------------
Costs and expenses:
Cost of services and product development 40.8 40.3
Selling, general and administrative 30.1 31.3
Depreciation 2.4 2.1
Amortization of intangibles 1.3 1.2
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Total costs and expenses 74.7 74.9
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Operating income 25.3 25.1
Interest income, net 1.4 1.1
---------------- ----------------
Income before provision for income taxes 26.6 26.2
Provision for income taxes 10.9 11.0
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Net income 15.8 % 15.2 %
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TOTAL REVENUES increased 30% to $162.7 million for the first quarter of fiscal
1998 from $125.4 million for the first quarter of fiscal 1997. This growth
consisted of a 26% increase in advisory (excluding consulting) and measurement
services, a 22% increase in learning revenue and a 43% increase in other revenue
(principally from consulting services and conferences). Advisory and measurement
services encompass services which, on an ongoing basis, highlight industry
developments, review new products and technologies, provide quantitative market
research, analyze industry trends within a particular technology or market
sector and provide comparative analysis of the information technology operations
of organizations. Learning represents technology-based training products and
related services. The Company enters into annual renewable contracts for
advisory and measurement services and learning
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products ("AML"). Revenues from advisory and measurement services as well as
learning are recognized as services and products are delivered, and as the
Company's obligation to the client is completed over the contract period. The
increase in AML revenues reflects the combined successes of increased
penetration of the existing client base, investments in overseas distribution
and incremental revenue from current and prior year acquisitions.
Contract value increased 37% to $519.7 million at December 31, 1997 versus
$380.0 million at December 31, 1996. The Company believes that contract value,
which is calculated as the annualized value of all advisory, measurement and
learning contracts in effect at a given point in time, without regard to the
duration of the contracts outstanding at such time, is a significant measure of
the Company's volume of business. Historically, a substantial portion of client
companies have renewed these services and products for an equal or higher level
of total value each year, and annual revenues from these services in any fiscal
year have approximated contract value at the beginning of the fiscal year. As of
December 31, 1997, 85% of the Company's clients had renewed one or more services
in the last twelve months. However, this renewal rate is not necessarily
indicative of the rate of retention of the Company's revenue base, and contract
value at any time may not be indicative of future AML revenues or cash flows if
the rate of renewal of contracts, or the timing of new business were to
significantly change during the following twelve months compared to historic
patterns. Total deferred revenues of $249.2 million and $257.3 million at
December 31, 1997 and September 30, 1997, respectively, as presented in the
Company's Consolidated Balance Sheets, represent unamortized revenues from AML
services and products plus unamortized revenues of certain other products and
services not included in AML services and products. Deferred revenues do not
directly correlate to contract value as of the same date, since contract value
represents an annualized value of all outstanding contracts without regard to
the duration of such contracts, and deferred revenue represents unamortized
revenue remaining on all outstanding contracts including AML and certain other
services and products not included in AML revenue.
Other revenues for the first quarter of fiscal 1998 increased 43% to $41.7
million compared to $29.2 million for the first quarter of fiscal 1997. Other
revenues consist principally of revenues from consulting engagements and
conferences. The increase of $12.5 million for the first quarter of fiscal 1998
over the first quarter of fiscal 1997 was primarily due to increased revenues
from the Company's Symposia conferences and ITxpo exhibition events held
annually during the first quarter of the fiscal year. Consulting services also
contributed to the revenue growth for the first quarter of 1998 compared to the
first quarter of 1997 as a result of the expansion of consulting services to new
geographic regions and incremental revenue from fiscal 1997 and 1998
acquisitions.
OPERATING INCOME rose 31% to $41.1 million, for the first quarter of fiscal
1998, from $31.5 for the first quarter of fiscal 1997. Operating income has
increased reflecting continued revenue growth coupled with controlled spending
that has allowed the Company to gain economies of scale through the leveraging
of its resources (additional revenues have been generated using essentially the
same resources) while investing in both the Learning business as well as global
product and distribution expansion. Although Datapro Information Services, Inc.
("Datapro"), which was acquired in August 1997, had an adverse effect on first
quarter operating margins due to costs associated with the initial stages of
integration, operating income as a percent of revenues increased to 25.3% for
the first quarter of 1998 from 25.1% for the first quarter of 1997. The effect
of fluctuations in foreign exchange rates did not have a significant impact on
operating income during the first quarter of fiscal 1998.
While costs and expenses increased to $121.5 million in the first quarter of
fiscal 1998 from $93.8 million in the first quarter of fiscal 1997, such costs
have remained a consistent 75% of total revenues. The increase in cost of
services and product development expenses to $66.4 million for the first quarter
of fiscal 1998 from $50.5 million for the first quarter of fiscal 1997 reflects
the need to provide additional support to the growing client base, including
investment in product development costs (particularly for
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technology-based training products) and costs associated with conferences.
Selling, general and administrative expenses, which were $49.0 million and $39.2
million for the first quarter of fiscal 1998 and 1997, respectively, increased
as a result of the Company's continuing expansion of worldwide distribution
channels and resulting commissions earned on the revenue generated and due to
additional selling and marketing costs associated with acquisitions. Although
the Company has added general and administrative resources to support the
growing revenue base, and has incurred additional costs associated with the
general and administrative expenses of acquired companies, it has benefited from
economies of scale and leveraging of its general and administrative staff and
facilities. Consequently, selling, general and administrative expenses were 30%
of total revenues for the first quarter of fiscal 1998 as compared to 31% for
the same period in the prior fiscal year.
Depreciation expense increased to $3.9 million for the first quarter of fiscal
1998 from $2.6 million for the first quarter of 1997 due primarily to capital
spending required to support business growth. Amortization of intangibles
increased by $0.7 million for the first quarter of fiscal 1998 as compared to
the same period in fiscal 1997, reflecting primarily goodwill associated with
fiscal 1997 acquisitions.
INTEREST INCOME, NET was $2.2 million for the first quarter of fiscal 1998, up
from $1.3 million from the first quarter of fiscal 1997. This improvement
resulted from interest income accumulating on the Company's total cash, cash
equivalents and marketable securities ($194.4 million at December 31, 1997,
versus $147.0 million at December 31, 1996 and $188.7 million at September 30,
1997) and changes in the mix to long-term investments which generally have
higher interest yields.
PROVISION FOR INCOME TAXES increased to $17.7 million in the first quarter of
fiscal 1998, compared to $13.8 million for the first quarter fiscal 1997. The
effective tax rate for the first quarter of fiscal 1998 was 41%, a decrease from
42% for the same period last fiscal year. The decrease in the effective tax rate
is due to on-going tax planning initiatives.
DILUTED EARNINGS PER COMMON SHARE increased 32% to 25 cents per common share for
the first quarter of fiscal 1998, compared to 19 cents for the first quarter of
fiscal 1997. Basic earnings increased 30% to 26 cents per common share for the
first quarter of fiscal 1998 from 20 cents for the first quarter of fiscal 1997.
QUARTERLY OPERATING INCOME TRENDS. Historically, the Company has realized
significant renewals and growth in contract value at the end of quarters. The
fourth quarter of the fiscal year typically is the fastest growth quarter for
contract value and the first quarter of the fiscal year typically represents the
slowest growth quarter as it is the quarter in which the largest amount of
contact renewals are due. As a result of the quarterly trends in contract value
and overall business volume, fees receivable, deferred revenues, deferred
commissions and commissions payable reflect this activity and typically show
substantial increases at quarter end, particularly at fiscal year end. All
contracts are billable upon signing, absent special terms granted on a limited
basis from time to time. All contracts are non-cancelable and non-refundable,
except for government contracts which have a 30-day cancellation clause, but
which have not produced material cancellations to date. The Company's policy is
to record at the time of signing of an AML contract the entire amount of the
contract billable as deferred revenue and fees receivable. The Company also
records the related commission obligation upon the signing of the contract and
amortizes the corresponding deferred commission expense over the contract period
in which the related AML revenues are earned and amortized to income.
Historically, AML revenues have increased significantly in the first quarter of
the ensuing fiscal year over the immediately preceding quarter and other
revenues have increased similarly due to annual conferences and exhibition
events held in the first quarter. Additionally, operating income margin
(operating income as a percentage of total revenues) typically improves in the
first quarter of the fiscal year versus the
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immediately preceding quarter. The operating income margin improvement in the
first quarter of the fiscal year is due to the increase in operating income
generated on the first quarter Symposia and ITxpo exhibition events plus an
increase in AML revenue upon which the Company is able to further leverage its
selling, general and administrative expenses. The Company does not expect the
operating income improvement realized in the first quarter of fiscal 1998 to be
as significant in the next three quarters of this fiscal year as the operating
income margins on the ITxpo event in the first fiscal quarter are higher than on
conferences and other events held later in the fiscal year. Therefore, the
operating income for the first quarter of fiscal 1998 may not be indicative of
the quarterly operating income results for the remainder of fiscal 1998.
OTHER FACTORS THAT MAY AFFECT FUTURE PERFORMANCE. The Company's future operating
results will depend upon the Company's ability to continue to compete
successfully in the market for information products and services. The Company
faces competition from a significant number of independent providers of similar
services, as well as the internal marketing and planning organizations of the
Company's clients. The Company also competes indirectly against other
information providers, including electronic and print media companies and
consulting firms. In addition, there are limited barriers to entry into the
Company's market and additional new competitors could readily emerge. There can
be no assurance that the Company will be able to continue to provide the
products and services that meet client needs as the Information Technology
("IT") market rapidly evolves, or that the Company can otherwise continue to
compete successfully. In this regard, the Company's ability to compete is
largely dependent upon the quality of its staff of IT analysts. Competition for
qualified analysts is intense. There can be no assurance that the Company will
be able to hire additional qualified IT analysts as may be required to support
the evolving needs of customers or any growth in the Company's business. Any
failure to maintain a premier staff of IT analysts could adversely affect the
quality of the Company's products and services, and therefore its future
business and operating results. Additionally, there may be increased business
risk as the Company expands product and service offerings to smaller domestic
companies. The Company's operating results are also subject to risks inherent in
international sales, including changes in market demand as a result of exchange
rate fluctuations, tariffs and other barriers, challenges in staffing and
managing foreign sales operations, and higher levels of taxation on foreign
income than domestic income. Further expansion would require additional
management attention and financial resources.
The Company has expanded its presence in the technology-based training industry.
The success of the Company in the technology-based training industry will depend
on its ability to compete with vendors of these products and services which
include a range of education and training specialists, hardware and system
manufacturers, software vendors, system integrators, dealers, value-added
resellers and network/communications vendors, certain of whom have significantly
greater product breadth and market presence in the technology-based training
sector. There can be no assurance that the Company will be able to provide
products that compare favorably with new competitive products or that
competitive pressures will not require the Company to reduce prices. Future
success will also depend on the Company's ability to develop new training
products that are released timely with the introductions of the underlying
software products.
The Year 2000 Issue exists as the result of many computer systems and
applications using two digit date fields rather than four to define the
applicable year. As the century change occurs, date-sensitive systems will
recognize the year 2000 as 1900, or not at all. This inability to recognize or
properly treat the Year 2000 may cause systems to process critical financial and
operational information incorrectly. The Company has assessed and continues to
assess the impact of the Year 2000 on its operations. The Company believes,
based upon its internal reviews and other factors, that there will be no
interruption of operations and the future external and internal costs to be
incurred relating to the modification of internal use software for the Year 2000
will not have a material effect on the Company's results of operations or
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financial position. Additionally, computer software products sold by the Company
are Year 2000 compliant.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition remains very strong. As of December 31, 1997,
total cash and cash equivalents and marketable securities (including both
current and long-term maturities) totaled $194.4 million, an increase from
$188.7 million at September 30, 1997. Cash used in operating activities totaled
$10.3 million for the first three months of fiscal 1998 (compared to $9.2
million provided for the first three months of fiscal 1997) reflecting primarily
the impact of increased revenues and operating margins and related changes in
the balance sheet accounts offset primarily by the payment of fiscal 1997
commission and bonus payable totaling approximately $32.7 million and a $24.1
million non-cash reduction in the corporate income tax liability due to tax
benefits received on stock transactions with employees. Cash used in investing
activities was $24.7 million for the first three months of fiscal 1998 (compared
to $5.2 million of cash provided for the first three months of fiscal 1997)
primarily due to the acquisition of consolidated and unconsolidated
subsidiaries. During the first quarter of fiscal 1998 the Company made a 32%
equity investment for $8.0 million in cash in Jupiter Communications, LLC
("Jupiter"), a provider of analyst-based research and strategic planning
services to the consumer Internet and interactive industry. Cash provided by
financing activities totaled $40.3 million for the three months ended December
31, 1997 (compared to $12.8 million of cash provided for the three months ended
December 31, 1996) and resulted primarily from a $24.1 million non-cash increase
in additional paid-in capital for tax benefits received from stock transactions
with employees and $16.2 million from the issuance of common stock upon the
exercise of employee stock options. The tax benefit of stock transactions with
employees is due to a reduction in the corporate income tax liability based on
an imputed compensation deduction equal to employees' gain upon the exercise of
stock options at an exercise price below fair market. As additional stock
options have become exercisable each fiscal year under the Company's stock
option plans, both the volume of option exercises and gains on these exercises
have increased, thereby resulting in significant tax benefits being received in
the first quarter of fiscal 1998 and 1997.
The effect of exchange rates reduced cash and cash equivalents by $0.5 million
through the three months ended December 31, 1997, and was due to the
strengthening of the U.S. dollar versus certain foreign currencies. The Company
has available two unsecured credit lines, with The Bank of New York and Chase
Manhattan Bank for $5.0 million and $25.0 million, respectively. These lines may
be canceled by the banks at any time without prior notice or penalty.
Additionally, the Company issues letters of credit in the ordinary course of
business. The Company had outstanding letters of credit with Chase Manhattan
Bank of approximately $4.0 million and $2.0 million with The Bank of New York at
December 31, 1997. The Company currently has no material capital commitments.
The Company believes that its current cash balances and marketable securities,
together with cash anticipated to be provided by operating activities and
borrowings available under the existing lines of credit, will be sufficient for
the expected short-term and foreseeable long-term cash needs of the Company,
including possible acquisitions.
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PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number Description of Document
10.22 Promissory Note from Manuel A. Fernandez dated December 18, 1997
10.23 Promissory Note from William Clifford dated December 18, 1997
10.24 Promissory Note from John F. Halligan dated December 18, 1997
10.25 Promissory Note from E. Follett Carter dated December 18, 1997
11.1 Computation of Basic and Diluted Earnings per Common Share
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Registrant during the fiscal
quarter ended December 31, 1997.
Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.
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SIGNATURE
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 thereunto duly authorized.
Gartner Group, Inc.
----------------------------
Date February 10, 1998 /s/ John F. Halligan
----------------------------
John F. Halligan
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
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EXHIBIT 10.22
PROMISSORY NOTE
$1,900,000 As of December 18, 1997
1. FOR VALUE RECEIVED, the undersigned, MANUEL A. FERNANDEZ (the
"Maker"), promises to pay to the order of GARTNER GROUP, INC. (the "Lender"), at
its office at 56 Top Gallant Road, Stamford, Connecticut, or at such other place
as the holder hereof (including the Lender, hereinafter referred to as the
"Holder") may designate, in lawful money of the United States, the principal sum
of ONE MILLION NINE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,900,000), together
with interest on the unpaid balance of this Note, beginning as of the date
hereof, before maturity, default or judgment, at an annual rate of interest
equal to 5.60%, which interest rate is the Applicable Federal Rate (the "Note
Rate").
2. Interest under this Note shall be compounded semi-annually and
payable in arrears on the basis of a 360-day year, and the actual days elapsed
together with (a) all taxes levied or assessed against the Holder on this Note
or the debt evidenced hereby, except for income or other similar taxes, however
designated, on income derived by the Holder herefrom, and (b) all costs,
expenses, attorneys' fees and professionals' fees incurred by the Holder in (i)
any action to collect this Note or to foreclose any security for this Note, or
(ii) in protecting or sustaining the lien of any security, or (iii) in any
litigation or controversy arising from or connected with any security agreement
or this Note.
3. The Maker shall repay the principal amount of this Note, together
with accrued interest on December 17, 1999 (the "Maturity Date"); however, the
Holder, in its sole and absolute discretion, may elect to accelerate the
indebtedness of this Note upon the occurrence of an "Event of Default" (as
defined below).
4. The Maker agrees that (i) if Maker shall cease to be employed by the
Lender, for any reason, (ii) if Maker shall suffer or permit the filing by or
against him of any petition for relief, arrangement, reorganization or the like
under any bankruptcy or insolvency law, make an assignment for the benefit of
creditors or suffer or permit the appointment of a receiver for any part of his
property; or (iii) if any Event of Default shall occur under any agreement
securing this Note or executed in connection with this Note; or (iv) if any
Event of Default shall occur under any other liability, indebtedness or
obligation of the Maker to the Holder; (each of the events and circumstances in
(i), (ii), (iii) and (iv) being an Event of Default), then, upon the happening
of any such Event of Default, the entire indebtedness with accrued interest due
under this Note and all other expenses, including, but not limited to,
attorneys' fees incurred by the Holder in collecting or enforcing payment
hereof, shall accelerate and become immediately due and payable at the option of
the Holder without notice and without regard to the Maturity Date and the Holder
may proceed to exercise any rights or remedies that it may have by law or at
equity under this Note or any other agreement relating to the loan evidenced by
this Note.
5. Failure of the Holder to exercise its option to accelerate the
indebtedness of this Note shall not constitute a waiver of the Holder's right to
exercise the same in the event of any subsequent default.
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6. The Maker agrees that the interest rate shall increase by 2% per
annum above the Note Rate from and after the date of an Event of Default or
after maturity, by acceleration or otherwise, or judgment, and such additional
rate shall remain in effect until all unpaid principal and interest are
satisfied in full.
7. The Maker may prepay the indebtedness of this Note in part or in
full at any time without the imposition of any penalty. Unless applicable law
provides otherwise, all payments received by the Holder under this Note shall,
at the option of the Holder, be applied (a) to the then outstanding charges and
expenses incurred by the Holder in sustaining and/or enforcing this Note or any
security granted for this Note; then (b) to any unpaid and accrued interest; and
finally, (c) to the outstanding principal indebtedness.
8. Notwithstanding any provisions of this Note, the maximum rate of
interest to be paid hereunder shall not exceed the maximum rate of interest
permissible to be charged by the Holder under applicable laws. Any amount paid
in excess of such rate shall be considered to have been payments in reduction of
principal.
9. The Maker gives the Holder a lien and right of setoff for all the
Maker's liabilities upon and against all the deposits, credits, collateral and
property of the Maker, now or hereafter in the possession or control of the
Holder or in transit to it. The Holder may, upon the occurrence of an Event of
Default, apply or set off the same, or any part thereof, to any liability of the
Maker even though unmatured.
10. The Holder's failure to insist upon the strict performance of any
term herein shall not be deemed to be a waiver, and the Holder shall retain the
right thereafter to insist upon strict performance by the Maker of all terms of
this Note or any agreement securing this Note or executed in connection
herewith.
11. All amounts due under this Note are secured by the Maker's pledge
to the Lender of this date of shares of the Lender's common stock.
12. THE MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES HIS RIGHTS TO NOTICE AND HEARING AS ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER
MAY DESIRE TO USE. THE MAKER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THIS NOTE, AND ALL RIGHTS UNDER ANY STATUTES OF LIMITATIONS.
THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS ATTORNEYS.
13. THE MAKER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR
PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE
TRANSACTION OF WHICH THIS NOTE IS A PART AND/OR TO THE DEFENSE OR ENFORCEMENT OF
ANY OF THE HOLDER'S RIGHTS AND REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT
CLAIMS. THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY
AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS
ATTORNEYS.
16
3
14. This Note and the provisions hereof shall inure to the benefit of
the Holder, its successors and assigns and shall be binding upon the undersigned
his heirs, executors, administrators and assigns.
15. This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut. The Maker submits to personal jurisdiction in
the State of Connecticut for the enforcement of the Maker's obligations
hereunder and under any agreement securing this Note, and the Maker waives all
rights under the laws of any other state to object to jurisdiction within the
State of Connecticut. If litigation is commenced, the Maker agrees that service
of process may be made and personal jurisdiction over the Maker obtained, by
service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon the Maker by registered or certified mail to or by
personal service at the last known address of the Maker.
---------------------------
MANUEL A. FERNANDEZ
17
1
EXHIBIT 10.23
PROMISSORY NOTE
$125,000 As of December 18, 1997
1. FOR VALUE RECEIVED, the undersigned, WILLIAM CLIFFORD (the "Maker"),
promises to pay to the order of GARTNER GROUP, INC. (the "Lender"), at its
office at 56 Top Gallant Road, Stamford, Connecticut, or at such other place as
the holder hereof (including the Lender, hereinafter referred to as the
"Holder") may designate, in lawful money of the United States, the principal sum
of ONE HUNDRED TWENTY FIVE THOUSAND AND NO/100 DOLLARS ($125,000), together with
interest on the unpaid balance of this Note, beginning as of the date hereof,
before maturity, default or judgment, at an annual rate of interest equal to
5.60%, which interest rate is the Applicable Federal Rate (the "Note Rate").
2. Interest under this Note shall be compounded semi-annually and
payable in arrears on the basis of a 360-day year, and the actual days elapsed
together with (a) all taxes levied or assessed against the Holder on this Note
or the debt evidenced hereby, except for income or other similar taxes, however
designated, on income derived by the Holder herefrom, and (b) all costs,
expenses, attorneys' fees and professionals' fees incurred by the Holder in (i)
any action to collect this Note or to foreclose any security for this Note, or
(ii) in protecting or sustaining the lien of any security, or (iii) in any
litigation or controversy arising from or connected with any security agreement
or this Note.
3. The Maker shall repay the principal amount of this Note, together
with accrued interest on December 17, 1999 (the "Maturity Date"); however, the
Holder, in its sole and absolute discretion, may elect to accelerate the
indebtedness of this Note upon the occurrence of an "Event of Default" (as
defined below).
4. The Maker agrees that (i) if Maker shall cease to be employed by the
Lender, for any reason, (ii) if Maker shall suffer or permit the filing by or
against him of any petition for relief, arrangement, reorganization or the like
under any bankruptcy or insolvency law, make an assignment for the benefit of
creditors or suffer or permit the appointment of a receiver for any part of his
property; or (iii) if any Event of Default shall occur under any agreement
securing this Note or executed in connection with this Note; or (iv) if any
Event of Default shall occur under any other liability, indebtedness or
obligation of the Maker to the Holder; (each of the events and circumstances in
(i), (ii), (iii) and (iv) being an Event of Default), then, upon the happening
of any such Event of Default, the entire indebtedness with accrued interest due
under this Note and all other expenses, including, but not limited to,
attorneys' fees incurred by the Holder in collecting or enforcing payment
hereof, shall accelerate and become immediately due and payable at the option of
the Holder without notice and without regard to the Maturity Date and the Holder
may proceed to exercise any rights or remedies that it may have by law or at
equity under this Note or any other agreement relating to the loan evidenced by
this Note.
5. Failure of the Holder to exercise its option to accelerate the
indebtedness of this Note shall not constitute a waiver of the Holder's
18
2
right to exercise the same in the event of any subsequent default.
6. The Maker agrees that the interest rate shall increase by 2% per
annum above the Note Rate from and after the date of an Event of Default or
after maturity, by acceleration or otherwise, or judgment, and such additional
rate shall remain in effect until all unpaid principal and interest are
satisfied in full.
7. The Maker may prepay the indebtedness of this Note in part or in
full at any time without the imposition of any penalty. Unless applicable law
provides otherwise, all payments received by the Holder under this Note shall,
at the option of the Holder, be applied (a) to the then outstanding charges and
expenses incurred by the Holder in sustaining and/or enforcing this Note or any
security granted for this Note; then (b) to any unpaid and accrued interest; and
finally, (c) to the outstanding principal indebtedness.
8. Notwithstanding any provisions of this Note, the maximum rate of
interest to be paid hereunder shall not exceed the maximum rate of interest
permissible to be charged by the Holder under applicable laws. Any amount paid
in excess of such rate shall be considered to have been payments in reduction of
principal.
9. The Maker gives the Holder a lien and right of setoff for all the
Maker's liabilities upon and against all the deposits, credits, collateral and
property of the Maker, now or hereafter in the possession or control of the
Holder or in transit to it. The Holder may, upon the occurrence of an Event of
Default, apply or set off the same, or any part thereof, to any liability of the
Maker even though unmatured.
10. The Holder's failure to insist upon the strict performance of any
term herein shall not be deemed to be a waiver, and the Holder shall retain the
right thereafter to insist upon strict performance by the Maker of all terms of
this Note or any agreement securing this Note or executed in connection
herewith.
11. All amounts due under this Note are secured by the Maker's pledge
to the Lender of this date of shares of the Lender's common stock.
12. THE MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES HIS RIGHTS TO NOTICE AND HEARING AS ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER
MAY DESIRE TO USE. THE MAKER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THIS NOTE, AND ALL RIGHTS UNDER ANY STATUTES OF LIMITATIONS.
THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS ATTORNEYS.
13. THE MAKER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR
PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE
TRANSACTION OF WHICH THIS NOTE IS A PART AND/OR TO THE DEFENSE OR ENFORCEMENT OF
ANY OF THE HOLDER'S RIGHTS AND REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT
CLAIMS. THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY
AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS
ATTORNEYS.
19
3
14. This Note and the provisions hereof shall inure to the benefit of
the Holder, its successors and assigns and shall be binding upon the undersigned
his heirs, executors, administrators and assigns.
15. This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut. The Maker submits to personal jurisdiction in
the State of Connecticut for the enforcement of the Maker's obligations
hereunder and under any agreement securing this Note, and the Maker waives all
rights under the laws of any other state to object to jurisdiction within the
State of Connecticut. If litigation is commenced, the Maker agrees that service
of process may be made and personal jurisdiction over the Maker obtained, by
service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon the Maker by registered or certified mail to or by
personal service at the last known address of the Maker.
---------------------------
WILLIAM CLIFFORD
20
1
EXHIBIT 10.24
PROMISSORY NOTE
$200,000 As of December 18, 1997
1. FOR VALUE RECEIVED, the undersigned, JOHN F. HALLIGAN (the "Maker"),
promises to pay to the order of GARTNER GROUP, INC. (the "Lender"), at its
office at 56 Top Gallant Road, Stamford, Connecticut, or at such other place as
the holder hereof (including the Lender, hereinafter referred to as the
"Holder") may designate, in lawful money of the United States, the principal sum
of TWO HUNDRED THOUSAND NO/100 DOLLARS ($200,00), together with interest on the
unpaid balance of this Note, beginning as of the date hereof, before maturity,
default or judgment, at an annual rate of interest equal to 5.60%, which
interest rate is the Applicable Federal Rate (the "Note Rate").
2. Interest under this Note shall be compounded semi-annually and
payable in arrears on the basis of a 360-day year, and the actual days elapsed
together with (a) all taxes levied or assessed against the Holder on this Note
or the debt evidenced hereby, except for income or other similar taxes, however
designated, on income derived by the Holder herefrom, and (b) all costs,
expenses, attorneys' fees and professionals' fees incurred by the Holder in (i)
any action to collect this Note or to foreclose any security for this Note, or
(ii) in protecting or sustaining the lien of any security, or (iii) in any
litigation or controversy arising from or connected with any security agreement
or this Note.
3. The Maker shall repay the principal amount of this Note, together
with accrued interest on December 17, 1999 (the "Maturity Date"); however, the
Holder, in its sole and absolute discretion, may elect to accelerate the
indebtedness of this Note upon the occurrence of an "Event of Default" (as
defined below).
4. The Maker agrees that (i) if Maker shall cease to be employed by the
Lender, for any reason, (ii) if Maker shall suffer or permit the filing by or
against him of any petition for relief, arrangement, reorganization or the like
under any bankruptcy or insolvency law, make an assignment for the benefit of
creditors or suffer or permit the appointment of a receiver for any part of his
property; or (iii) if any Event of Default shall occur under any agreement
securing this Note or executed in connection with this Note; or (iv) if any
Event of Default shall occur under any other liability, indebtedness or
obligation of the Maker to the Holder; (each of the events and circumstances in
(i), (ii), (iii) and (iv) being an Event of Default), then, upon the happening
of any such Event of Default, the entire indebtedness with accrued interest due
under this Note and all other expenses, including, but not limited to,
attorneys' fees incurred by the Holder in collecting or enforcing payment
hereof, shall accelerate and become immediately due and payable at the option of
the Holder without notice and without regard to the Maturity Date and the Holder
may proceed to exercise any rights or remedies that it may have by law or at
equity under this Note or any other agreement relating to the loan evidenced by
this Note.
5. Failure of the Holder to exercise its option to accelerate the
indebtedness of this Note shall not constitute a waiver of the Holder's right to
exercise the same in the event of any subsequent default.
21
2
6. The Maker agrees that the interest rate shall increase by 2% per
annum above the Note Rate from and after the date of an Event of Default or
after maturity, by acceleration or otherwise, or judgment, and such additional
rate shall remain in effect until all unpaid principal and interest are
satisfied in full.
7. The Maker may prepay the indebtedness of this Note in part or in
full at any time without the imposition of any penalty. Unless applicable law
provides otherwise, all payments received by the Holder under this Note shall,
at the option of the Holder, be applied (a) to the then outstanding charges and
expenses incurred by the Holder in sustaining and/or enforcing this Note or any
security granted for this Note; then (b) to any unpaid and accrued interest; and
finally, (c) to the outstanding principal indebtedness.
8. Notwithstanding any provisions of this Note, the maximum rate of
interest to be paid hereunder shall not exceed the maximum rate of interest
permissible to be charged by the Holder under applicable laws. Any amount paid
in excess of such rate shall be considered to have been payments in reduction of
principal.
9. The Maker gives the Holder a lien and right of setoff for all the
Maker's liabilities upon and against all the deposits, credits, collateral and
property of the Maker, now or hereafter in the possession or control of the
Holder or in transit to it. The Holder may, upon the occurrence of an Event of
Default, apply or set off the same, or any part thereof, to any liability of the
Maker even though unmatured.
10. The Holder's failure to insist upon the strict performance of any
term herein shall not be deemed to be a waiver, and the Holder shall retain the
right thereafter to insist upon strict performance by the Maker of all terms of
this Note or any agreement securing this Note or executed in connection
herewith.
11. All amounts due under this Note are secured by the Maker's pledge
to the Lender of this date of shares of the Lender's common stock.
12. THE MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES HIS RIGHTS TO NOTICE AND HEARING AS ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER
MAY DESIRE TO USE. THE MAKER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THIS NOTE, AND ALL RIGHTS UNDER ANY STATUTES OF LIMITATIONS.
THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS ATTORNEYS.
13. THE MAKER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR
PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE
TRANSACTION OF WHICH THIS NOTE IS A PART AND/OR TO THE DEFENSE OR ENFORCEMENT OF
ANY OF THE HOLDER'S RIGHTS AND REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT
CLAIMS. THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY
AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS
ATTORNEYS.
14. This Note and the provisions hereof shall inure to the benefit of
the Holder, its successors and assigns and shall be binding upon the undersigned
his heirs, executors, administrators and assigns.
22
3
15. This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut. The Maker submits to personal jurisdiction in
the State of Connecticut for the enforcement of the Maker's obligations
hereunder and under any agreement securing this Note, and the Maker waives all
rights under the laws of any other state to object to jurisdiction within the
State of Connecticut. If litigation is commenced, the Maker agrees that service
of process may be made and personal jurisdiction over the Maker obtained, by
service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon the Maker by registered or certified mail to or by
personal service at the last known address of the Maker.
---------------------------
JOHN F. HALLIGAN
23
1
EXHIBIT 10.25
PROMISSORY NOTE
$250,000 As of December 18, 1997
1. FOR VALUE RECEIVED, the undersigned, E. FOLLETT CARTER, (the
"Maker"), promises to pay to the order of GARTNER GROUP, INC. (the "Lender"), at
its office at 56 Top Gallant Road, Stamford, Connecticut, or at such other place
as the holder hereof (including the Lender, hereinafter referred to as the
"Holder") may designate, in lawful money of the United States, the principal sum
of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000), together with
interest on the unpaid balance of this Note, beginning as of the date hereof,
before maturity, default or judgment, at an annual rate of interest equal to
5.60%, which interest rate is the Applicable Federal Rate (the "Note Rate").
2. Interest under this Note shall be compounded semi-annually and
payable in arrears on the basis of a 360-day year, and the actual days elapsed
together with (a) all taxes levied or assessed against the Holder on this Note
or the debt evidenced hereby, except for income or other similar taxes, however
designated, on income derived by the Holder herefrom, and (b) all costs,
expenses, attorneys' fees and professionals' fees incurred by the Holder in (i)
any action to collect this Note or to foreclose any security for this Note, or
(ii) in protecting or sustaining the lien of any security, or (iii) in any
litigation or controversy arising from or connected with any security agreement
or this Note.
3. The Maker shall repay the principal amount of this Note, together
with accrued interest on December 17, 1999 (the "Maturity Date"); however, the
Holder, in its sole and absolute discretion, may elect to accelerate the
indebtedness of this Note upon the occurrence of an "Event of Default" (as
defined below).
4. The Maker agrees that (i) if Maker shall cease to be employed by the
Lender, for any reason, (ii) if Maker shall suffer or permit the filing by or
against him of any petition for relief, arrangement, reorganization or the like
under any bankruptcy or insolvency law, make an assignment for the benefit of
creditors or suffer or permit the appointment of a receiver for any part of his
property; or (iii) if any Event of Default shall occur under any agreement
securing this Note or executed in connection with this Note; or (iv) if any
Event of Default shall occur under any other liability, indebtedness or
obligation of the Maker to the Holder; (each of the events and circumstances in
(i), (ii), (iii) and (iv) being an Event of Default), then, upon the happening
of any such Event of Default, the entire indebtedness with accrued interest due
under this Note and all other expenses, including, but not limited to,
attorneys' fees incurred by the Holder in collecting or enforcing payment
hereof, shall accelerate and become immediately due and payable at the option of
the Holder without notice and without regard to the Maturity Date and the Holder
may proceed to exercise any rights or remedies that it may have by law or at
equity under this Note or any other agreement relating to the loan evidenced by
this Note.
5. Failure of the Holder to exercise its option to accelerate the
indebtedness of this Note shall not constitute a waiver of the Holder's right to
exercise the same in the event of any subsequent default.
24
2
6. The Maker agrees that the interest rate shall increase by 2% per
annum above the Note Rate from and after the date of an Event of Default or
after maturity, by acceleration or otherwise, or judgment, and such additional
rate shall remain in effect until all unpaid principal and interest are
satisfied in full.
7. The Maker may prepay the indebtedness of this Note in part or in
full at any time without the imposition of any penalty. Unless applicable law
provides otherwise, all payments received by the Holder under this Note shall,
at the option of the Holder, be applied (a) to the then outstanding charges and
expenses incurred by the Holder in sustaining and/or enforcing this Note or any
security granted for this Note; then (b) to any unpaid and accrued interest; and
finally, (c) to the outstanding principal indebtedness.
8. Notwithstanding any provisions of this Note, the maximum rate of
interest to be paid hereunder shall not exceed the maximum rate of interest
permissible to be charged by the Holder under applicable laws. Any amount paid
in excess of such rate shall be considered to have been payments in reduction of
principal.
9. The Maker gives the Holder a lien and right of setoff for all the
Maker's liabilities upon and against all the deposits, credits, collateral and
property of the Maker, now or hereafter in the possession or control of the
Holder or in transit to it. The Holder may, upon the occurrence of an Event of
Default, apply or set off the same, or any part thereof, to any liability of the
Maker even though unmatured.
10. The Holder's failure to insist upon the strict performance of any
term herein shall not be deemed to be a waiver, and the Holder shall retain the
right thereafter to insist upon strict performance by the Maker of all terms of
this Note or any agreement securing this Note or executed in connection
herewith.
11. All amounts due under this Note are secured by the Maker's pledge
to the Lender of this date of shares of the Lender's common stock.
12. THE MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES HIS RIGHTS TO NOTICE AND HEARING AS ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER
MAY DESIRE TO USE. THE MAKER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THIS NOTE, AND ALL RIGHTS UNDER ANY STATUTES OF LIMITATIONS.
THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS ATTORNEYS.
13. THE MAKER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR
PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE
TRANSACTION OF WHICH THIS NOTE IS A PART AND/OR TO THE DEFENSE OR ENFORCEMENT OF
ANY OF THE HOLDER'S RIGHTS AND REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT
CLAIMS. THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY
AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS
ATTORNEYS.
14. This Note and the provisions hereof shall inure to the benefit of
the Holder, its successors and assigns and shall be binding upon the undersigned
his heirs, executors, administrators and assigns.
25
3
15. This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut. The Maker submits to personal jurisdiction in
the State of Connecticut for the enforcement of the Maker's obligations
hereunder and under any agreement securing this Note, and the Maker waives all
rights under the laws of any other state to object to jurisdiction within the
State of Connecticut. If litigation is commenced, the Maker agrees that service
of process may be made and personal jurisdiction over the Maker obtained, by
service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon the Maker by registered or certified mail to or by
personal service at the last known address of the Maker.
---------------------------
E. FOLLETT CARTER
26
1
EXHIBIT 11.1
Gartner Group, Inc.
Computation of Basic and Diluted Earnings per Common Share
(In thousands, except per share amounts)
For the three months ended,
December 31,
--------------------------------
1997 1996
--------------- --------------
Numerator:
Net income $25,644 $19,042
=============== ==============
Denominator
Denominator for basic earnings per share - weighted average
number of common shares outstanding 97,838 93,327
Effect of dilutive securities:
Weighted average number of common shares under warrant
outstanding 288 316
Weighted average number of option shares outstanding 6,286 8,308
--------------- --------------
Dilutive potential common shares 6,574 8,624
--------------- --------------
Denominator for diluted earnings per share - adjusted
weighted average number of common shares outstanding 104,412 101,951
=============== ==============
Basic earnings per common share $0.26 $0.20
=============== ==============
Diluted earnings per common share $0.25 $0.19
=============== ==============
14
5
1,000
U.S. DOLLARS
3-MOS
SEP-30-1998
OCT-01-1997
DEC-31-1997
1
147,274
29,192
221,416
5,302
0
439,356
95,712
50,813
676,640
338,087
0
0
0
55
334,565
676,640
162,667
162,667
66,403
66,403
55,119
13
0
43,347
17,703
25,644
0
0
0
25,644
0.26
0.25
