SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
FILED BY THE REGISTRANT [ X ]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 240.14a-12
GARTNER, INC.
(Name of Registrant as Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[GARTNER LOGO]
April 29, 2004
Dear Stockholder:
On behalf of the Board of Directors and Management of Gartner, Inc., I invite
you to attend our Annual Meeting of Stockholders. The meeting will be held on
Wednesday, June 30, 2004, at 10 a.m. local time, at our corporate headquarters
at 56 Top Gallant Road, Stamford, Connecticut 06902.
At our Annual Meeting, holders of our Class A and Class B Common Stock will each
be asked to elect certain directors. This item is fully described in the
attached Proxy Statement. There also will be an opportunity for you to ask
questions about our business.
It is important that your stock is represented, regardless of the number of
shares you hold. After reading the enclosed Proxy Statement, please vote your
proxy in accordance with the instructions provided.
If you have any questions about the meeting, please contact our Investor
Relations Department at (203) 316-6537.
Sincerely,
/s/ Michael D. Fleisher
MICHAEL D. FLEISHER
Chairman of the Board and
Chief Executive Officer
[GARTNER LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: Wednesday, June 30, 2004
TIME: 10:00 a.m. local time
LOCATION: 56 Top Gallant Road
Stamford, Connecticut 06902
MATTERS TO BE VOTED ON: Election of 3 directors (2 of our Class B Common
Stock and 1 of our Class A Common Stock)
Any other business properly brought before the
meeting
These items are more particularly described in
the Proxy Statement
RECORD DATE: May 3, 2004 - You are eligible to vote if you
were a stockholder of record on this date
VOTING METHODS: By Internet
By Telephone
By Proxy Card
In Person
IMPORTANCE OF VOTE: Submit a proxy as soon as possible to ensure that
your shares are represented
Voting promptly will insure that we have a quorum
at the meeting and will save us proxy
solicitation expenses
If you own shares of both our Class A and Class B
Common Stock, you will need to vote separately
for each class of stock
By Order of the Board of Directors,
/s/ Lewis G. Schwartz
April 29, 2004
TABLE OF CONTENTS
SUMMARY.................................................................................................... 1
GENERAL INFORMATION........................................................................................ 3
THE ANNUAL MEETING................................................................................ 3
PURPOSE OF MEETING................................................................................ 3
INFORMATION CONCERNING VOTING AND SOLICITATION OF PROXIES......................................... 3
WHO CAN VOTE?................................................................................ 3
HOW YOU CAN VOTE............................................................................. 3
HOW TO REVOKE YOUR PROXY OR CHANGE YOUR VOTE................................................. 3
HOW MANY VOTES YOU HAVE...................................................................... 4
QUORUM....................................................................................... 4
VOTES REQUIRED............................................................................... 4
PROPOSAL ONE: ELECTION OF DIRECTORS........................................................................ 5
GENERAL INFORMATION ABOUT OUR BOARD OF DIRECTORS.................................................. 5
NOMINEES.......................................................................................... 5
RECOMMENDATION OF OUR BOARD....................................................................... 5
INFORMATION ABOUT NOMINEES FOR ELECTION AS CLASS II DIRECTORS..................................... 6
INFORMATION ABOUT THE MEMBERS OF OUR BOARD WHOSE TERMS OF OFFICE DO NOT EXPIRE AT
THE ANNUAL MEETING........................................................................... 6
COMPENSATION OF DIRECTORS......................................................................... 8
BOARD MEETINGS HELD DURING FISCAL 2003............................................................ 8
BOARD INDEPENDENCE................................................................................ 8
DIRECTOR ATTENDANCE AT ANNUAL MEETING............................................................. 8
DIRECTOR STOCK OWNERSHIP GUIDELINES............................................................... 9
CODE OF ETHICS.................................................................................... 9
COMMITTEES........................................................................................ 9
EXECUTIVE OFFICERS......................................................................................... 10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.................................................... 11
EXECUTIVE COMPENSATION..................................................................................... 13
SUMMARY COMPENSATION TABLE........................................................................ 13
OPTIONS GRANTED IN 2003 TO THE NAMED EXECUTIVE OFFICERS........................................... 14
OPTIONS EXERCISED IN 2003 BY THE NAMED EXECUTIVE OFFICERS AND 2003 YEAR-END OPTION VALUES......... 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION....................................... 14
EMPLOYMENT AGREEMENTS WITH CURRENT AND NAMED EXECUTIVE OFFICERS................................... 14
AUDIT COMMITTEE REPORT..................................................................................... 18
COMPARISON OF TOTAL CUMULATIVE STOCKHOLDER RETURN.......................................................... 20
OTHER INFORMATION.......................................................................................... 21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................... 21
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE........................................... 23
CERTAIN RELATIONSHIPS AND TRANSACTIONS..................................................................... 23
RELATIONSHIP WITH SILVER LAKE PARTNERS, L.P....................................................... 23
RELATIONSHIPS WITH OTHER THIRD PARTIES............................................................ 23
MISCELLANEOUS.............................................................................................. 23
SOLICITATION OF PROXIES........................................................................... 23
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR OUR 2005 ANNUAL MEETING......................... 24
ANNUAL REPORT..................................................................................... 24
APPENDIX A: AUDIT COMMITTEE CHARTER........................................................................ A-1
GARTNER, INC.
56 TOP GALLANT ROAD
STAMFORD, CT 06902
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 30, 2004
SUMMARY
The summary information provided below in "question and answer" format
is for your convenience. This summary may not contain all the information that
may be important to you. To better understand the items being voted on, you
should read carefully this entire document, including the appendix.
WHEN AND WHERE IS THE ANNUAL MEETING?
The Annual Meeting will take place on Wednesday, June 30, 2004, at
10:00 a.m. local time, at our corporate headquarters, 56 Top Gallant Road,
Stamford, Connecticut 06902. This Proxy Statement and the accompanying Notice of
Annual Meeting and form of proxy are being made available to our stockholders on
April 29, 2004.
WHAT MATTERS WILL BE VOTED ON AT THE ANNUAL MEETING?
- The holders of our Class A Common Stock will vote on the
re-election of Maynard G. Webb, Jr. as a director to hold
office for a term of three years.
- The holders of our Class B Common Stock will vote on the
re-election of Anne Sutherland Fuchs and the election of
Jeffrey W. Ubben as directors to hold office for a term of
three years.
- The holders of our Class A and Class B Common Stock will
transact any other business that is brought properly before
the Annual Meeting.
WHO IS ENTITLED TO VOTE?
Stockholders of record at the close of business on May 3, 2004, which
is the "Record Date," are entitled to notice of, and to vote at, the Annual
Meeting.
IF YOUR BROKER HOLDS YOUR SHARES IN "STREET NAME," HOW WILL YOUR BROKER VOTE?
Your broker MAY vote your shares without instructions from you. YOU SHOULD
FOLLOW THE DIRECTIONS PROVIDED BY YOUR BROKER TO INSTRUCT YOUR BROKER HOW TO
VOTE YOUR SHARES. See "How You Can Vote" on Page 3.
1
CAN YOU REVOKE OR CHANGE YOUR VOTE AFTER YOU SUBMIT A PROXY?
Yes. To revoke or change your vote you can:
- give written notice of revocation to: Corporate Secretary,
Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford,
Connecticut 06904-2212 prior to the Annual Meeting; or
- submit another timely proxy by the Internet, telephone or
mail; or
- attend the Annual Meeting and vote in person. If your shares
are not held in your name, to vote at the meeting you must
obtain a proxy executed in your favor from the holder of
record.
WHO CAN ANSWER YOUR QUESTIONS?
If you have questions about this Proxy Statement or the Annual Meeting,
please call our Investor Relations Department at (203) 316-6537.
YOU SHOULD READ CAREFULLY THIS PROXY STATEMENT (INCLUDING THE
APPENDIX) IN ITS ENTIRETY.
2
GENERAL INFORMATION
THE ANNUAL MEETING
Our Board of Directors is soliciting proxies to be used at our Annual
Meeting of Stockholders to be held on June 30, 2004. This Proxy Statement and
the accompanying Notice of Annual Meeting and form of proxy are being made
available to our stockholders on or about April 29, 2004.
PURPOSE OF MEETING
The proposal to be acted upon at the Annual Meeting is summarized in
the accompanying Notice of Annual Meeting. This proposal is described in more
detail in this Proxy Statement, under the heading "PROPOSAL ONE" on page 5.
INFORMATION CONCERNING VOTING AND SOLICITATION OF PROXIES
WHO CAN VOTE?
Only stockholders of record at the close of business on May 3, 2004 may
vote at the Annual Meeting. As of May 3, 2004, there were 103,584,493 shares of
our Class A Common Stock and 28,175,143 shares of our Class B Common Stock
outstanding.
HOW YOU CAN VOTE
You may vote using one of the following methods:
- INTERNET. You may vote by the Internet by going to the website
for Internet voting on your proxy card. If you vote by the
Internet, you should not return your proxy card.
- TELEPHONE. You may vote by telephone by calling the toll-free
telephone number on your proxy card. If you vote by telephone,
you should not return your proxy card.
- MAIL. You may vote by mail by marking your proxy card, dating
and signing it, and returning it in the postage-paid envelope
provided.
- IN PERSON. You may vote your shares in person by attending the
Annual Meeting.
If you own both Class A and Class B Common Stock, you will need to vote
separately for each class of stock.
If a broker holds your shares in "street name," the broker is required
to vote those shares in accordance with your instructions. If you do not give
instructions to the broker, the broker may vote your shares with respect to the
election of directors.
All shares that have been voted properly by an unrevoked proxy will be
voted at the Annual Meeting in accordance with your instructions. If you sign
your proxy card, but do not give voting instructions, the shares represented by
that proxy will be voted as our Board recommends.
If any other matters are brought properly before the Annual Meeting,
the persons named as proxies in the enclosed proxy card will have the discretion
to vote on those matters for you. As of the date of this Proxy Statement, we did
not know of any other matter to be raised at the Annual Meeting.
HOW TO REVOKE YOUR PROXY OR CHANGE YOUR VOTE
You can revoke your proxy or change your vote before your proxy is
voted at the Annual Meeting by:
- giving written notice of revocation to: Corporate Secretary,
Gartner, Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford,
Connecticut 06904-2212; or
- submitting another timely proxy by the Internet, telephone or
mail; or
- attending the Annual Meeting and voting in person. If your
shares are held in the name of a bank, broker or other holder
of record, to vote at the Annual Meeting you must obtain a
proxy executed in your favor from the holder of record.
Attendance at the Annual Meeting will not, by itself, revoke
your
3
prior proxy.
HOW MANY VOTES YOU HAVE
Each Common A stockholder has one vote for each share of Class A Common
Stock that he or she owned on the Record Date for all matters being voted on,
except the election of the Common B Directors.
Each Common B stockholder has one vote for each share of Class B Common
Stock that he or she owned on the Record Date for all matters being voted on,
except the election of the Common A Director. Any holder of our Class B Common
Stock who owns more than 15% of the outstanding Class B Common Stock cannot vote
all of his or her Class B Common Stock in the election of the Common B Directors
unless such holder owns an equivalent percentage of our Class A Common Stock.
For example, if a holder of our Class B Common Stock owns shares representing
17% of our Class B Common Stock and shares representing 5% of our Class A Common
Stock, the stockholder may vote shares representing only 5% of our Class B
Common Stock.
QUORUM
ELECTION OF COMMON A DIRECTORS BY CLASS A COMMON STOCKHOLDERS. A quorum
to elect the Common A Director is constituted by the presence, in person or by
proxy, of holders of our Class A Common Stock representing a majority of the
aggregate number of shares of Class A Common Stock entitled to vote. Abstentions
and broker non-votes will be considered present to determine the presence of a
quorum. (See "General Information About Our Board Of Directors" on page 5).
ELECTION OF COMMON B DIRECTORS BY CLASS B COMMON STOCKHOLDERS. A quorum
to elect the Common B Directors is constituted by the presence, in person or by
proxy, of holders of our Class B Common Stock representing a majority of the
aggregate number of shares of Class B Common Stock entitled to vote. Abstentions
and broker non-votes will be considered present to determine the presence of a
quorum. (See "General Information About Our Board Of Directors" on page 5).
VOTES REQUIRED
ELECTION OF COMMON A DIRECTOR BY CLASS A COMMON STOCKHOLDERS. The one
nominee for Common A Director receiving the highest vote total will be elected.
Abstentions and broker non-votes will have no effect on the election of the
Common A Director. (See "General Information About Our Board Of Directors" on
page 5).
ELECTION OF COMMON B DIRECTORS BY CLASS B COMMON STOCKHOLDERS. The two
nominees for Common B Director receiving the highest vote totals will be
elected. Abstentions and broker non-votes will have no effect on the election of
the Common B Directors. (See "General Information About Our Board Of Directors"
on page 5).
4
PROPOSAL ONE:
ELECTION OF DIRECTORS
GENERAL INFORMATION ABOUT OUR BOARD OF DIRECTORS
Each of our directors is elected for a three-year staggered term. Our
Board's ten directors are divided into three classes: Class I, Class II and
Class III. Each director is further designated as a Common A Director or a
Common B Director. Holders of our Class A Common Stock elect two directors and
holders of our Class B Common Stock elect eight directors. One class of
directors is elected at each Annual Meeting.
The following table shows our current directors, when each class of
directors is elected, how many of those directors are Common A or Common B
Directors and how each director is classified:
Number of Names of Number of Names of
Common A Common A Common B Common B
Directors Directors Directors Directors
Class I: Term Expires 2006 0 None 3 Hutchins, Pagliuca, Roux
and every 3 years thereafter
Class II: Term Expires 2004 1 Webb 2 Fuchs, Sisco
and every 3 years thereafter
Class III: Term Expires 2005 1 Grabe 3 Fleisher, Hopper, Smith
and every 3 years thereafter
NOMINEES
Of the three nominees listed below, Maynard G. Webb, Jr. and Anne
Sutherland Fuchs are currently directors and have agreed to serve another term.
Jeffrey W. Ubben is standing for election as a director for the first time and,
if elected, will take the position currently filled by Dennis G. Sisco. If any
nominee is unable or declines unexpectedly to stand for election as a director
at the Annual Meeting, proxies will be voted for a nominee designated by the
present Board to fill the vacancy. Each person elected as a director will
continue to be a director until the 2007 Annual Meeting or until a successor has
been elected.
RECOMMENDATION OF OUR BOARD
OUR BOARD RECOMMENDS THAT OUR CLASS A COMMON STOCKHOLDERS VOTE "FOR"
THE NOMINEE LISTED BELOW:
- Maynard G. Webb, Jr.
OUR BOARD RECOMMENDS THAT OUR CLASS B COMMON STOCKHOLDERS VOTE "FOR"
THE NOMINEES LISTED BELOW:
- Anne Sutherland Fuchs
- Jeffrey W. Ubben
None of our directors or executive officers is related to another
director or executive officer by blood, marriage or adoption. Mr. Fleisher's
employment agreement provides that we will include him on the slate of nominees
to be elected to our Board during the term of his agreement. See "Executive
Compensation - Employment Agreements with Executive Officers" on page 14.
Messrs. Hutchins and. Roux serve as directors pursuant to an agreement we
entered into in connection with the issuance of our convertible notes in April
2000. See "Certain Relationships and Transactions - Relationship with Silver
Lake Partners, L.P." on page 23. There are no other arrangements between any
director or nominee and any other person pursuant to which the director or
nominee was selected.
5
INFORMATION ABOUT NOMINEES FOR ELECTION AS CLASS II DIRECTORS
CLASS II COMMON A DIRECTOR
MAYNARD G. WEBB, JR., age 48, has been a director since October 2001.
Since June 2002, Mr. Webb has been chief operating officer of eBay, Inc., an
online marketplace. Prior to that he was president of eBay Technologies, a
division of eBay, Inc. from August 1999 through June 2002. From July 1998 to
August 1999, Mr. Webb was Senior Vice President and Chief Information Officer at
Gateway, Inc. From February 1995 to July 1998, Mr. Webb was Vice President and
Chief Information Officer at Bay Networks, Inc. Mr. Webb holds a bachelor's
degree from Florida Atlantic University.
CLASS II COMMON B DIRECTORS
ANNE SUTHERLAND FUCHS, age 57, has been a director since July 1999. On
January 1, 2003, Ms. Fuchs became a consultant to private equity firms. Prior to
this, Ms. Fuchs was employed by LVMH Moet Hennessy Louis Vuitton, a global
luxury products conglomerate, where she served as Executive Vice President of
LVMH from March to December 2002 and as the global chief executive at Phillips
de Pury & Luxembourg, LVMH's auction house subsidiary, from July 2001 to
February 2002. From 1994 to 2001, Ms. Fuchs worked for Hearst Magazines, where
she was most recently the Senior Vice President and Group Publishing Director.
Prior to joining Hearst, Ms. Fuchs held executive and publisher positions with a
number of companies. Ms. Fuchs is Chair of the Commission on Women's Issues for
New York City. Ms. Fuchs holds a bachelor's degree from New York University and
two honorary doctorate degrees.
JEFFREY W. UBBEN, age 42, is standing for election for the first time
as one of our directors. Mr. Ubben is a founder and Managing Partner of ValueAct
Capital, an investment partnership. From 1995 to 2000, Mr. Ubben was a Managing
Partner of Blum Capital. Prior to that, he was a portfolio manager for Fidelity
Investments from 1987 to 1995. Mr. Ubben is Chairman of the Board of Martha
Stewart Living Omnimedia, Inc. and a director of Per-Se Technologies, Inc. and
Mentor Corporation. Mr. Ubben holds a bachelor's degree from Duke University and
an M.B.A. degree from the J. L. Kellogg Graduate School of Management at
Northwestern University. Mr. Ubben is the beneficial owner of 8,560,100 shares
or 8.26% of our Class A Common Stock and 5,122,546 shares or 18.18% of our Class
B Common Stock. See "Security Ownership of Certain Beneficial Holders and
Management" on page 21.
INFORMATION ABOUT THE MEMBERS OF OUR BOARD WHOSE TERMS OF OFFICE DO NOT EXPIRE
AT THE ANNUAL MEETING
CLASS I COMMON B DIRECTORS (TERM EXPIRES AT THE 2006 ANNUAL MEETING)
GLENN H. HUTCHINS, age 48, has been a director since April 2000. Mr.
Hutchins is a managing director of Silver Lake Partners, which he co-founded in
January 1999. Silver Lake Partners is a private equity investment partnership.
From 1994 to 1999, Mr. Hutchins was a Senior Managing Director of The Blackstone
Group, where he focused on private equity investing. Mr. Hutchins is a director
of Ameritrade Holding Corp. and Seagate Technology. He is also a trustee of
Lawrenceville School. Mr. Hutchins holds a bachelor's degree from Harvard
College, an M.B.A. degree from Harvard Business School and a J.D. degree from
Harvard Law School.
STEPHEN G. PAGLIUCA, age 49, has been a director since July 1990. Mr.
Pagliuca is a founding partner of Information Partners Capital Fund, L.P., a
venture capital fund, and has served as its Managing Partner since 1989. He is
also a Managing Director of Bain Capital, Inc., an investment firm with which
Information Partners is associated. Prior to 1989, Mr. Pagliuca was a partner at
Bain & Company, where he managed client relationships in the information
services, software, credit services and health care industries. Mr. Pagliuca is
a director of Ameritrade Holding Corp., Instinet Group Incorporated and FTD. Mr.
Pagliuca, a certified public accountant, holds a bachelor's degree from Duke
University and an M.B.A. degree from Harvard Business School.
DAVID J. ROUX, age 47, has been a director since July 2001. Mr. Roux is
a managing director of Silver Lake Partners, which he co-founded in January
1999. Silver Lake Partnersis a private equity partnership. From February 1998 to
November 1998, he served as the Chief Executive Officer and President of
Liberate Technologies, a software platform provider. From September 1994 to
December 1998, Mr. Roux held various management positions with Oracle
Corporation, a systems and applications software provider, most recently as
Executive Vice President of Corporate Development. Mr. Roux is a director of
Business Objects S.A. and VERITAS Software Corporation. Mr. Roux holds a
bachelor's degree from Harvard College, an M.B.A. degree from Harvard Business
School and a M. Phil. degree from Kings College, Cambridge University in the
United Kingdom.
6
CLASS III COMMON A DIRECTOR (TERM EXPIRES AT THE 2005 ANNUAL MEETING)
WILLIAM O. GRABE, age 66, has been a director since April 1993. Since
January 1994, Mr. Grabe has been a general partner of General Atlantic Partners,
an investment firm, where he has worked since April 1992. Prior to his
affiliation with General Atlantic, Mr. Grabe retired from IBM Corporation as an
IBM Vice President and Corporate Officer. Mr. Grabe is a director of Bottomline
Technologies, Compuware Corporation, Digital China Holdings Limited, Exact
Holding N.V., and FirePond, Inc. Mr. Grabe is a trustee of the Cancer Research
Institute and Outward Bound USA. Mr. Grabe is on the Board of Visitors of the
UCLA Graduate School of Business. Mr. Grabe holds a bachelor's degree from New
York University and an M.B.A. degree from the University of California at Los
Angeles.
CLASS III COMMON B DIRECTORS (TERM EXPIRES AT THE 2005 ANNUAL MEETING)
MICHAEL D. FLEISHER, age 39, has been Chairman of our Board since
October 2001, a director and our Chief Executive Officer since October 1999, and
our President from May 2001 to October 2003. From February 1999 to October 1999,
he served as our Chief Financial Officer and Executive Vice President, Finance
and Administration. Mr. Fleisher joined Gartner in April 1993 and has held
several other management positions, including Executive Vice President and
President, Emerging Business; Vice President, Business Development; and
Director, Strategic Planning. Prior to joining Gartner, Mr. Fleisher worked at
Bain Capital, Inc. where he was involved in the buyout of Gartner by management
and Bain Capital from Saatchi & Saatchi in October 1990. Mr. Fleisher is a
director of Ameritrade Holding Corp. and is on the board of NYC 2012, Inc. Mr.
Fleisher holds a bachelor's degree from the Wharton School of the University of
Pennsylvania.
MAX D. HOPPER, age 69, has been a director since January 1994. In 1995,
he founded Max D. Hopper Associates, Inc., a consulting firm specializing in
creating benefits from the strategic use of advanced information systems. He is
the retired chairman of the SABRE Technology Group and served as Senior Vice
President for American Airlines, both units of AMR Corporation. Mr. Hopper is a
director of Perficient, Inc. and United Stationers, Inc. Mr. Hopper holds a
bachelor's degree from the University of Houston.
JAMES C. SMITH, age 63, has been a director since October 2002. Mr.
Smith is Chairman of the Board of First Health Group Corp., a national health
benefits company. Prior to that, Mr. Smith was the Chief Executive Officer of
First Health from January 1984 through January 2002 and President of First
Health from January 1984 to January 2001. Mr. Smith holds a bachelor's degree
from Northeastern University.
7
COMPENSATION OF DIRECTORS
Directors who are also employees, and directors who we appoint at the
request of another entity because of the relationship between that entity and
us, receive no fees for their services as directors. All other directors receive
the following compensation for their services:
Annual Fee: $40,000 per director, payable in four equal quarterly
installments, on the first day of each quarter. Up to
50% of the fee may be paid in cash and the balance is
paid in our Class A Common Stock equivalents. All
payments in stock equivalents are credited to an
account based on the fair market value of the stock
on the last day of the preceding quarter. Payment of
the stock equivalents, which may be in cash or shares
of Class A Common Stock, is deferred until the
director ceases to be a director.
Annual Committee Chair $1,500 per chair of each committee of our Board;
Fee: payable in the same manner as the Annual Fee.
Attendance Fee for Board None; however, we do reimburse directors for their
Meetings: expenses to attend meetings.
Attendance Fee for $1,000 per committee meeting attended.
Committee Meetings:
Initial Option Grant: 15,000 shares of our Class A Common Stock upon
becoming a director.
Annual Option Grant: 7,000 shares of our Class A Common Stock on March 1
of each year if the director has served for at least
six months.
Option Vesting and Term: Option grants vest in 3 equal installments on the
first three anniversaries of grant and remain
exercisable until 10 years from the date of grant (5
years for those issued prior to the adoption of our
2003 Long-Term Incentive Plan). If the director
ceases to be a director, the option expires in 90
days, unless the director is permanently disabled or
dies while serving as a director, in which cases the
option may be exercised for 6 months or one year,
respectively, but in no event beyond its regular
term.
BOARD MEETINGS HELD DURING 2003
Our Board held eight meetings during 2003 and acted four times by
written consent. During 2003, each director attended at least 75 percent of the
Board and committee meetings held while such director served as a director and
committee member. At each Board meeting the non-management directors meet in
executive session with the appointment of a presiding director for such session
left to the directors' discretion.
BOARD INDEPENDENCE
Our Board Governance Guidelines are available at http://
www3.gartner.com/ir/asset_8465.jsp. Under these guidelines, the Governance
Committee and the full Board annually assess the independence of the
non-management directors of the Board by reviewing the financial and other
relationships between the directors and us. This review is designed to determine
whether these directors are independent, as defined under the standards of the
New York Stock Exchange. The Governance Committee and the Board have determined
that all of our non-management directors and our director nominee are
independent under those standards.
Stockholders and other interested parties may communicate with any of
our directors, including our non-management directors, by writing to them c/o
Corporate Secretary, Gartner, Inc., 56 Top Gallant Road, P.O. 10212, Stamford,
CT 06904.
DIRECTOR ATTENDANCE AT ANNUAL MEETING
The Board's policy regarding director attendance at the Annual Meeting
is that they are welcome to attend, and that we will make all appropriate
arrangements for directors that choose to attend. In 2003, only Mr. Fleisher
8
attended the Annual Meeting.
DIRECTOR STOCK OWNERSHIP GUIDELINES
The Board believes directors should have a financial interest in the
Company. Accordingly, each director is required to own at least 10,000 shares of
our stock. New directors also have three years from election or appointment to
comply with the policy - 25% within one year of election or appointment; 50%
within two years of election or appointment and 100% within three years of
election or appointment.
CODE OF ETHICS
Our Code of Ethics is available at
http://www3.gartner.com/ir/asset_8465.jsp.
COMMITTEES
Our Board has three standing committees: Audit Committee, Compensation
Committee and Governance Committee. All Committee members are non-management
directors who, in the opinion of our Board, are independent as defined under the
standards of the New York Stock Exchange. Our Board of Directors has approved a
written charter for each committee which is available at http://
www3.gartner.com/ir/asset_8465.jsp
Our Audit Committee currently consists of Messrs. Hopper, Pagliuca and
Sisco. Our Board has determined that Mr. Pagliuca qualifies as an Audit
Committee Financial Expert as defined by the rules of the Securities and
Exchange Commission. During 2003, the Audit Committee held five meetings and
consisted of Messrs. Hopper, Hutchins, Pagliuca and Sisco. Our Audit Committee
reviews reports of our financial results, audits and internal controls. It is
also the supervisor of our internal auditors and our independent auditors and
approves all related fees and compensation and reviews their selection with the
Board of Directors. The committee also reviews the procedures of our independent
auditors for ensuring their independence with respect to the services performed
for us. The committee also reports to stockholders as required by the Securities
and Exchange Commission (please see page 18).
Our Compensation Committee consists of Messrs. Roux, Smith and Webb and
held six meetings during 2003. The Compensation Committee has responsibility for
administering and approving all elements of compensation for the Chief Executive
Officer and certain other senior management positions. It also approves, by
direct action or through delegation, participation in and all equity awards,
grants, and related actions under the provisions of our equity incentive plans.
The committee reports to stockholders on executive compensation items as
required by the Securities and Exchange Commission (please see page 10).
Our Governance Committee consists of Ms. Fuchs and Messrs. Grabe and
Hutchins and held five meetings during 2003. Our Governance Committee reviews
issues regarding our governance, reviews and implements policies for our Board,
reviews the size of our Board and criteria for membership, nominates potential
members for election to the Board, recommends the assignment of directors to our
Board's committees and reviews the performance of our Chief Executive Officer
and our Board members. Candidates may come to the attention of the Governance
Committee through current Board of Directors members, stockholders or other
persons. These candidates are evaluated at regular or special meetings of the
Governance Committee. Stockholders wishing to recommend director candidates for
consideration by the committee may do so by writing to the Chairman of the
committee, giving the recommended candidate's name, biographical data, and
qualifications.
9
EXECUTIVE OFFICERS
The following individuals were serving as our executive officers on
April 30, 2004:
NAME AGE TITLE
---- --- -----
Michael D. Fleisher 39 Chairman of the Board and Chief Executive Officer
Maureen E. O'Connell 42 President and Chief Operating Officer
Christopher Lafond 38 Executive Vice President and Chief Financial Officer
Zachary Morowitz 47 Executive Vice President, Corporate Development
MR. FLEISHER has been Chairman of our Board since October 2001, a
director and Chief Executive Officer since October 1999 and our President from
May 2001 to October 2003. For more information on Mr. Fleisher's business
experience, see the description provided under "Information About The Members Of
Our Board Whose Terms Of Office Do Not Expire At The Annual Meeting" on page 6.
MS. O'CONNELL has been President and Chief Operating Officer since
October 2003. From October 2002 to October 2003, Ms. O'Connell served as
Executive Vice President, Chief Financial and Administrative Officer. Prior to
joining us, Ms. O'Connell served as Executive Vice President and Chief Financial
Officer at Barnes & Noble from March 2000 through October 2002. Prior to that,
Ms. O'Connell was Chief Financial Officer at Publishers Clearing House and BMG
Direct, two Primedia divisions. Ms. O'Connell holds a bachelor's degree from the
Stern School of Business at New York University and is a certified public
accountant.
MR. LAFOND has been Executive Vice President, Chief Financial Officer
since October 2003. From January 2002 to October 2003, Mr. Lafond served as
Chief Financial Officer for North America and Latin America. From July 2000 to
December 2001, Mr. Lafond was Group Vice President and North American
Controller. Mr. Lafond joined us in 1995 and has held several finance positions,
including, Director of Finance, Vice President of Finance and Assistant
Controller. Prior to joining us, Mr. Lafond was Senior Financial Planner at
International Business Machines Corporation and an Analyst in fixed-income asset
management at J.P. Morgan Investment Management. Mr. Lafond holds a bachelor's
from the University of Connecticut and a master's degree from the Columbia
University Graduate School of Business.
MR. MOROWITZ has been Executive Vice President, Corporate Development
since October 2002. From October 1999 to October 2002, Mr. Morowitz served as
Senior Vice President, Corporate Development. Mr. Morowitz joined us in 1993 and
has held several other management positions, including Senior Vice President,
Worldwide Events; Senior Vice President, Product & Service Development; and Vice
President, Business Development. Prior to joining us, Mr. Morowitz was Chief
Operating Officer at New Science Associates, a company we acquired in 1993. Mr.
Morowitz holds a bachelor's and a master's degree from the University of
California at Berkeley.
10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Our role is to set overall compensation principles and review Gartner's
entire compensation program annually. We also review and establish the
individual compensation levels for our executive officers and consider the
advice of independent, outside consultants in determining whether the amounts
and types of compensation we pay our executive officers are appropriate. We also
administer our employee stock purchase plan and stock option plans. In
discharging these responsibilities, we consult with outside compensation
consultants, attorneys and other specialists.
The goal of our compensation program is to attract, motivate and retain
highly talented individuals. Our guiding philosophy is that compensation should
be linked to performance. We believe that the better an individual performs, the
higher the individual's compensation should be. Our compensation program is
designed to balance short and long term financial objectives, build stockholder
value and reward individual, group and corporate performance. We believe that
individual compensation should be tied to our financial performance so that when
our performance is better than established objectives, individuals should be
paid more and when our financial performance does not meet our established
objectives, incentive award payments should be reduced. The proportion of an
individual's total compensation that varies with individual and corporate
performance objectives should increase as the individual's business
responsibilities increase. In addition, we believe that the total compensation
package must be competitive with other companies in our industry to ensure that
we continue to attract, motivate and retain the people who are critical to our
long-term success.
We believe that our employees should own our stock. We provide
employees at all levels with several ways to become stockholders. We have stock
option plans under which we have made discretionary stock option grants to broad
segments of the employee population worldwide. We also have an employee stock
purchase plan that enables employees to purchase our Class A Common Stock at a
discount through payroll deductions and a 401(k) savings plan that allows U.S.
employees to invest in our Class A Common Stock. Our goal is to have market
competitive stock programs that encourage each employee to act like an owner of
the business.
Compensation for our executive officers consists of three principal
components: base salary, short-term incentives and long-term incentives.
Base Salary. We set base salaries by evaluating the responsibilities of
the position and the experience of the individual. We reference the competitive
marketplace for executive talent and conduct surveys periodically for comparable
positions at companies with whom we compare for compensation purposes.
Short-Term Incentives (Cash Bonuses). We designed the annual bonus
component of incentive compensation to align pay with our short-term (annual)
performance. The full bonus is tied to achievement of financial performance
objectives established by our Board on an annual basis.
Long-Term Incentives (Stock Plans). The principal equity component of
executive compensation is options granted under our stock option plans. Stock
option awards are granted at the commencement of employment, with additional
options granted from time to time for promotions and performance. We believe
that ownership of our stock is a key element of our compensation program and
that stock options provide a retention incentive for our executive officers and
align their personal objectives with long-term stock price appreciation.
CEO Compensation. Mr. Fleisher's compensation package for 2003
consisted primarily of base salary and short-term incentives. For 2003, Mr.
Fleisher received base salary of $650,000 and a bonus of $442,000. Mr.
Fleisher's minimum base salary and target bonus range are set in his employment
agreement; we review annually these aspects of his compensation in light of his
tenure of service and his current job responsibilities as well as the relative
compensation of his peers. Although the payment of Mr. Fleisher's bonus is tied
to our performance, his base salary and his target bonus are not related
directly to the achievement of specific measures of corporate performance.
11
Other Compensation. Other elements of executive compensation include
life insurance and long-term disability insurance programs and participation in
our U.S. profit sharing plan under which a specified percentage of operating
profit is distributed pro-rata among all employees based on salary. Executive
officers are eligible for company-wide medical benefits, a supplemental life
insurance program, a supplemental long term disability program, a 401(k) plan
under which we provide matching contributions to all participants and a payroll
deduction employee stock purchase plan under which participants may purchase our
Class A Common Stock at 85% of the lower of the fair market value of our Class A
Common Stock at the beginning or end of each six-month offering period (up to a
maximum stock value of the lesser of $25,000 per calendar year or 10 percent of
salary).
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Maynard G. Webb, Jr. (Chairman)
David J. Roux
James C. Smith
12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides information about compensation paid by us
during the years ended December 31, 2001, 2002 and 2003 to (i) our Chief
Executive Officer and (ii) each of our other executive officers who were serving
in such capacity at the end of 2003 (collectively, the "Named Executive
Officers"):
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION(1) SECURITIES
------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(2) OPTIONS(#) COMPENSATION($)(3)
--------------------------- ---- ---------- ------------ ------------- ------------------
Michael D. Fleisher 2003 $ 650,000 $ 442,000 250,000 $ 16,544
Chief Executive Officer 2002 500,000 450,000 250,000 16,451
2001 450,000 803,250 500,000 10,383
Maureen O'Connell(4) 2003 518,740 416,000 250,000 12,758
President and 2002 136,538 400,000 650,000 1,550
Chief Operating Officer
Christopher Lafond (5) 2003 262,500 81,840 100,000 9,835
Executive Vice President,
And Chief Financial Officer
Zachary Morowitz(6) 2003 275,000 92,070 --------- 14,352
Executive Vice President, 2002 230,000 77,000 200,000 7,573
Corporate Development
Robert E. Knapp (7) 2003 390,000 250,000 --------- 1,525,550
Executive Vice President, 2002 341,250 250,000 100,000 7,550
Research and Advisory 2001 325,000 200,000 250,000 5,283
Services
--------------------
(1) The amounts shown exclude certain perquisites and other personal
benefits, such as car allowances. These amounts, in the aggregate, did
not equal or exceed the lesser of $50,000 or 10 percent of the total
annual salary and bonus for each executive officer.
(2) The amounts shown include bonuses earned in the year noted although
such amounts are payable in the subsequent year. The amounts shown
exclude bonuses paid in the year noted but earned in prior years.
(3) For 2003, the amount shown represents (i) premiums paid for life
insurance: Mr. Fleisher - $8,737; Ms. O'Connell - $1,670; Mr. Lafond -
$1,230; Mr. Morowitz - $4,230; Mr. Knapp - $1,610; (ii) premiums paid
for long term disability insurance: Mr. Fleisher - $5,807; Ms.
O'Connell - $4,288; Mr. Lafond - $1,805; Mr. Morowitz - $3,322; Mr.
Knapp - $5,105; (iii) matching and profit sharing contributions under
our 401(k) plan: Mr. Fleisher - $2,000; Ms. O'Connell - $6,800; Mr.
Lafond - $6,800; Mr. Morowitz - $6,800; Mr. Knapp - $6,800; and (iv)
severance payments: Mr. Knapp $1,512,035.
(4) Ms. O'Connell was appointed President and Chief Operating Officer in
October 2003. Ms. O'Connell joined the Company as Executive Vice
President and Chief Financial Officer in October 2002.
(5) Mr. Lafond was appointed Executive Vice President and Chief Financial
Officer in October 2003.
(6) Mr. Morowitz was appointed Executive Vice President, Corporate
Development in October 2002.
(7) Mr. Knapp resigned as of December 31, 2003.
13
OPTIONS GRANTED IN 2003 TO THE NAMED EXECUTIVE OFFICERS
The following table provides information regarding stock options to
purchase our Class A Common Stock granted to the Named Executive Officers during
2003:
INDIVIDUAL GRANT (1) POTENTIAL REALIZABLE
------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL OPTIONS STOCK PRICE RATES OF
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR OPTION TERM (2)
UNDERLYING EMPLOYEES PRICE EXPIRATION --------------------------------
NAME OPTIONS IN FISCAL YEAR PER SHARE DATE 5% 10%
---- ---------- ------------------ --------- ---------- ----------- -----------
Michael D. Fleisher 250,000 9.79% $ 11.57 10/01/13 $ 1,819,078 $ 4,609,900
Maureen O'Connell 250,000 9.79 12.49 10/21/13 1,963,723 4,976,461
Christopher Lafond 100,000 3.92 12.49 10/21/13 785,489 1,990,584
------------------------
(1) These options were granted under our 2003 Long Term Incentive Plan and
are subject to its terms. Twenty-five percent of the options become
exercisable on the first anniversary of the grant date and 2.08% of the
options become exercisable monthly thereafter.
(2) Shown are the hypothetical gains or option spreads that would exist for
the respective options. These gains are based on assumed rates of
annual compounded stock price appreciation on our Class A Common Stock
of 5% and 10% from the date the option was granted over the option term
of ten years. The 5% and 10% assumed rates of appreciation are mandated
by SEC rules and do not represent our projection of future increases in
the price of our Class A Common Stock.
OPTIONS EXERCISED IN FISCAL 2003 BY THE NAMED EXECUTIVE OFFICERS AND FISCAL 2003
YEAR-END OPTION VALUES
The following table provides information regarding options exercised by
each Named Executive Officer during fiscal 2003, the number of unexercised
options at fiscal year-end and the value of unexercised "in-the-money" options
at fiscal year-end:
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR-END AT YEAR-END (1)
ACQUIRED VALUE ---------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Michael D. Fleisher --- --- 1,543,250 656,250 $ 1,615,390 $ 1,379,270
Maureen O'Connell --- --- 189,584 710,416 885,357 2,150,143
Christopher Lafond --- --- 69,900 141,200 66,677 39,111
Zachary Morowitz --- --- 193,500 209,500 489,096 772,042
Robert E. Knapp --- --- 600,000 --- 1,002,500 ---
-----------------------
(1) The values for "in-the-money" options represent the difference between
the exercise price of the options and the closing price of our Class A
Common Stock on December 31, 2003, which was $11.31 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation Committee currently consists of Messrs. Roux, Smith
and Webb. No member of our Compensation Committee is a current or former officer
or employee of Gartner or any of our subsidiaries. None of our executive
officers has served on the board of directors or on the compensation committee
of any other entity that had an executive officer serving on our Board or our
Compensation Committee.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
MR. FLEISHER. Mr. Fleisher entered into an Employment Agreement
effective October 1, 2002 (the "Fleisher Agreement"). Under the Fleisher
Agreement, he was to serve as Chairman and Chief Executive Officer through
September 30, 2005. During the term of the Fleisher Agreement, we agreed to
include Mr. Fleisher on our slate of nominees to be elected to our Board.
14
Under the Fleisher Agreement, Mr. Fleisher received a base salary of
$650,000 for fiscal 2003. For fiscal 2003, Mr. Fleisher's target bonus was
between $650,000 and $975,000. Under the Fleisher Agreement, Mr. Fleisher
received grants of 250,000 stock options on each of October 1, 2002, and October
1, 2003. These stock options vest 25% one year after grant and 2.08% per month
thereafter.
Mr. Fleisher's employment is at will and may be terminated by him or us
upon sixty days' notice. If we terminate Mr. Fleisher's employment involuntarily
without Business Reasons (as defined in the Fleisher Agreement) or a
Constructive Termination (as defined in the Fleisher Agreement) occurs, or if we
do not renew the Fleisher Agreement upon its expiration, Mr. Fleisher will be
entitled to receive: (a) his base salary for two years following the Termination
Date (as defined in the Fleisher Agreement) at the rate then in effect, payable
in accordance with our regular payroll schedule; (b) his target bonus for the
year in which the Termination Date occurs, target bonus for the next fiscal
year, and a pro-rated portion of his target bonus for the balance of the two
year severance period, payable concurrently with our payment of bonuses to other
executives; (c) acceleration in full of vesting of all equity arrangements
subject to vesting and granted prior to October 1, 2002; (d) continued vesting
during the Severance Period (as defined in the Fleisher Agreement) of all
outstanding equity awards granted on or after October 1, 2002; (e) the ability
to exercise all equity arrangements for either one year following the
Termination Date or one year following the end of the Severance Period; (f) at
our cost, group health benefits pursuant to our standard programs for himself,
his spouse and any children for two years after the Termination Date or until he
obtains other employment, if that occurs sooner; and (g) reasonable office
support for one year following the Termination Date, or until he obtains other
employment, if that occurs sooner. We will not be required to continue to pay
the bonus specified in clause (b) above if Mr. Fleisher violates his
non-competition obligations to us.
If a Change in Control (as defined in the Fleisher Agreement) occurs,
upon the Change in Control Mr. Fleisher will be entitled to receive: (a) three
times his base salary then in effect; (b) three times his minimum target bonus
for the fiscal year in which the Change in Control occurs (plus any unpaid bonus
from the prior fiscal year); (c) acceleration in full of vesting of all equity
arrangements subject to vesting; (d) the ability to exercise all options
received for either 90 days or one year following the Change in Control; (e) at
our cost, group health benefits pursuant to our standard programs for himself,
his spouse and any children for three years after the Change in Control; and (f)
any Gross-Up Payments (as defined in the Fleisher Agreement) for Mr. Fleisher's
excise tax liabilities.
If Mr. Fleisher's employment is terminated due to his disability, Mr.
Fleisher will be entitled to receive (a) base salary for three years after the
Termination Date at the rate then in effect; (b) his minimum target bonus for
the fiscal year in which the termination occurs, payable on the Termination
Date; (c) following the end of the fiscal year in which the termination occurs,
any bonus that would have been payable in excess of the minimum target bonus for
the year in which the termination occurs; (d) acceleration in full of vesting of
all equity arrangements subject to vesting, and all options will remain
exercisable for either 90 days or one year after the Termination Date; and (e)
at our cost, group health benefits pursuant to our standard programs for
himself, his spouse and any children for three years after the Termination Date.
We may deduct from the salary specified in clause (a) above, any payments
received by Mr. Fleisher under any disability benefit program maintained by us.
On April 29, 2004, Mr. Fleisher announced his intention to leave
Gartner sometime prior to the end of the year. In conjunction with his
departure, Mr. Fleisher has entered into an amendment to the Fleisher Agreement
pursuant to which he has agreed that he will continue to serve in the capacity
of Chief Executive Officer for up to six months in order to assist the Board of
Directors in selecting a successor and ensure a smooth transition. In
satisfaction of existing obligations under the Fleisher Agreement and in
consideration of his assistance in the transition, Gartner has agreed that Mr.
Fleisher will receive: (a) payments totaling four million three hundred
forty-two thousand dollars ($4,301,811), which includes his 2003 bonus and
compensation in respect of the transition period; (b) acceleration in full of
vesting of all equity arrangements subject to vesting and granted prior to
October 1, 2002; (c) continued vesting until October 29, 2006 of all outstanding
equity awards granted on or after October 1, 2002; (d) the ability to exercise
all equity arrangements granted after October 1, 2001 until October 29, 2007 and
all equity arrangements granted on or prior to October 1, 2001 until October 29,
2005; (e) at our cost, group health benefits pursuant to our standard programs
for himself, his spouse and any children for two years or until he obtains other
employment, if that occurs sooner; and (f) reasonable office support for one
year, or until he obtains other employment, if that occurs sooner. Mr. Fleisher
will be entitled to receive Gross-Up Payments (as defined in the Fleisher
Agreement) in respect of any excise tax liabilities he may incur should a Change
in Control (as defined in the Fleisher Agreement) occur.
MS. O'CONNELL. Ms. O'Connell entered into an Employment Agreement
effective September 23, 2002 (the "O'Connell Agreement"). Under the O'Connell
Agreement, she will serve as Executive Vice President and Chief
15
Financial and Administrative Officer through September 30, 2005, and thereafter
for subsequent one year periods unless either party provides ninety days'
written notice of its intention not to renew.
Under the O'Connell Agreement, Ms. O'Connell received a base salary of
$500,000 for fiscal 2003; thereafter her base salary is subject to annual
adjustments by our Board or Compensation Committee. For fiscal 2003, Ms.
O'Connell's target bonus was between $400,000 and $800,000; thereafter our Board
or Compensation Committee will establish the annual target bonus, and the bonus
will be payable based on achievement of specified objectives. Under the
O'Connell Agreement, Ms. O'Connell received a grant of 650,000 stock options on
October 17, 2002. These stock options will vest 25% one year after grant and
2.08% per month thereafter, subject to continuous status as an employee or
consultant. Ms. O'Connell also received a sign-on bonus of $400,000.
Ms. O'Connell's employment is at will and may be terminated by her or
us upon thirty days' notice. If we terminate Ms. O'Connell's employment
involuntarily without Business Reasons (as defined in the O'Connell Agreement)
or a Constructive Termination (as defined in the O'Connell Agreement) occurs, or
if we do not renew the O'Connell Agreement upon its expiration, Ms. O'Connell
will be entitled to receive: (a) her base salary for two years following the
Termination Date (as defined in the O'Connell Agreement) at the rate then in
effect, payable in accordance with our regular payroll schedule; (b) her target
bonus for the year in which the Termination Date occurs, target bonus for the
next fiscal year, and a pro-rated portion of her target bonus for the balance of
the two year severance period, payable concurrently with our payment of bonuses
to other executives; (c) continued vesting during the Severance Period (as
defined in the O'Connell Agreement) of all outstanding equity awards; (d) the
ability to exercise all equity arrangements for one year following the Severance
Period; (e) at our cost, group health benefits pursuant to our standard programs
for herself, her spouse and any children for two years after the Termination
Date or until she obtains other employment if that occurs sooner; and (f)
reasonable office support for one year following the Termination Date, or until
she obtains other employment, if that occurs sooner. We will not be required to
continue to pay the bonus specified in clause (b) above if Ms. O'Connell
violates her non-competition obligations to us.
If a Change in Control (as defined in the O'Connell Agreement) occurs,
upon the Change in Control, Ms. O'Connell will be entitled to receive: (a) three
times her base salary then in effect; (b) three times her minimum target bonus
for the fiscal year in which the Change in Control occurs (plus any unpaid bonus
from the prior fiscal year); (c) acceleration in full of vesting of all
outstanding equity arrangements subject to vesting; (d) the ability to exercise
all options received for one year following the Change in Control or termination
of employment, whichever is later; (e) at our cost, group health benefits
pursuant to our standard programs for herself, her spouse and any children for
three years after the Change in Control; and (f) any Gross-Up Payments (as
defined in the O'Connell Agreement) for Ms. O'Connell's excise tax liabilities.
If Ms. O'Connell's employment is terminated due to her disability, Ms.
O'Connell will be entitled to receive: (a) base salary for three years after the
Termination Date at the rate then in effect; (b) her minimum target bonus for
the fiscal year in which the termination occurs, payable on the Termination
Date; (c) following the end of the fiscal year in which the termination occurs,
any bonus that would have been payable in excess of the minimum target bonus for
the year in which the termination occurs; (d) acceleration in full of vesting of
all outstanding stock options, and all options will remain exercisable for one
year after the Termination Date; and (e) at our cost, group health benefits
pursuant to our standard programs for herself, her spouse and any children for
three years after the Termination Date. We may deduct from the salary specified
in clause (a) above, any payments received by Ms. O'Connell under any disability
benefit program maintained by us.
MR. LAFOND. Mr. Lafond is covered by Gartner's Executive Benefits
Program which provides that upon either a Change of Control, involuntary
termination without business reason, or a constructive termination, Mr. Lafond
will be entitled to receive: (a) one times his base salary then in effect; (b)
acceleration in full of vesting of all outstanding stock options that would have
vested within twelve months of the termination date; and (c) at our cost, group
health benefits pursuant to our standard programs for himself, his spouse and
any children for one year after the termination date.
MR. MOROWITZ. Mr. Morowitz entered into an Employment Agreement
effective October 1, 2002 (the "Morowitz Agreement"). Under the Morowitz
Agreement, he will serve as Executive Vice President through September 30, 2005,
and thereafter for subsequent one year periods unless either party provides
ninety days' written notice of its intention not to renew.
Under the Morowitz Agreement, Mr. Morowitz received a base salary of
$275,000 for fiscal 2003; thereafter his
16
base salary is subject to annual adjustments by our Board or Compensation
Committee. For fiscal 2003, Mr. Morowitz's target bonus was $135,000; thereafter
our Board or Compensation Committee will establish the annual target bonus, and
the bonus will be payable based on achievement of specified objectives. Under
the Morowitz Agreement, Mr. Morowitz received a grant of 200,000 stock options
on October 10, 2002. These stock options will vest 25% one year after grant and
2.08% per month thereafter, subject to continuous status as an employee or
consultant.
Mr. Morowitz's employment is at will and may be terminated by him or us
upon sixty days' notice. If we terminate Mr. Morowitz's employment involuntarily
without Business Reasons (as defined in the Morowitz Agreement) or a
Constructive Termination (as defined in the Morowitz Agreement) occurs, or if we
do not renew the Morowitz Agreement upon its expiration, Mr. Morowitz will be
entitled to receive: (a) his base salary for two years following the Termination
Date (as defined in the Morowitz Agreement) at the rate then in effect, payable
in accordance with our regular payroll schedule; (b) his target bonus for the
year in which the Termination Date occurs, target bonus for the next fiscal
year, and a pro-rated portion of his target bonus for the balance of the two
year severance period, payable concurrently with our payment of bonuses to other
executives; (c) continued vesting during the Severance Period (as defined in the
Morowitz Agreement) of outstanding equity awards issued subsequent to the date
of the Morowitz Agreement and such option will remain exercisable until one year
after the Severance Period; (d) acceleration in full of vesting of all equity
arrangements subject to vesting issued prior to the date of the Morowitz
Agreement, and such options will remain exercisable for one year after the
Termination Date; (e) at our cost, group health benefits pursuant to our
standard programs for himself, his spouse and any children for two years after
the Termination Date or until he obtains other employment if that occurs sooner;
and (f) reasonable office support for one year following the Termination Date,
or until he obtains other employment, if that occurs sooner. We will not be
required to continue to pay the bonus specified in clause (b) above if Mr.
Morowitz violates his non-competition obligations to us.
If a Change in Control (as defined in the Morowitz Agreement) occurs,
upon the Change in Control, Mr. Morowitz will be entitled to receive: (a) three
times his base salary then in effect; (b) three times his minimum target bonus
for the fiscal year in which the Change in Control occurs (plus any unpaid bonus
from the prior fiscal year); (c) acceleration in full of vesting of all
outstanding equity arrangements subject to vesting; (d) the ability to exercise
all options received for either one year or ninety days following the Change in
Control; (e) at our cost, group health benefits pursuant to our standard
programs for himself, his spouse and any children for three years after the
Change in Control; and (f) any Gross-Up Payments (as defined in the Morowitz
Agreement) for Mr. Morowitz's excise tax liabilities.
If Mr. Morowitz's employment is terminated due to his disability, Mr.
Morowitz will be entitled to receive: (a) base salary for three years after the
Termination Date at the rate then in effect; (b) his minimum target bonus for
the fiscal year in which the termination occurs, payable on the Termination
Date; (c) following the end of the fiscal year in which the termination occurs,
any bonus that would have been payable in excess of the minimum target bonus for
the year in which the termination occurs; (d) acceleration in full of vesting of
all outstanding stock options, and all options will remain exercisable for one
year or ninety days after the Termination Date; and (e) at our cost, group
health benefits pursuant to our standard programs for himself, his spouse and
any children for three years after the Termination Date. We may deduct from the
salary specified in clause (a) above, any payments received by Mr. Morowitz
under any disability benefit program maintained by us.
17
AUDIT COMMITTEE REPORT
Our Board has appointed an Audit Committee consisting of three
"independent" directors, as defined under current New York Stock Exchange
listing standards and the Sarbanes-Oxley Act of 2002 (the "Act").
We operate under a written charter adopted by our Board. We review the
charter at least annually and we last modified the charter in January 2004. A
copy of the modified charter is attached as Appendix A. We hold regularly
scheduled meetings at least four times each fiscal year and we meet more
frequently as appropriate. We have the power and funding to retain independent
counsel and other advisers as we deem necessary to carry out our duties as
required by Section 301 of the Act.
We are directly responsible for the appointment, compensation and
oversight of the independent auditors, including establishing the independence
of the auditors, approving the engagement letter describing the scope of the
audit and resolving disagreements between management and the auditors regarding
financial reporting, for the purpose of issuing an audit report in connection
with our financial statements. The auditors report directly to us. By meeting
regularly with independent auditors and internal auditing, operating and
financial management personnel, we oversee matters relating to accounting
standards, policies and practices, changes to these standards, polices and
practices and the effects of any changes on our financial statements, financial
reporting practices and the quality and adequacy of internal controls.
Additionally our internal audit function reports directly to the Audit
Committee.
KPMG LLP has audited our financial statements since September 1996.
During 2003, KPMG performed recurring audit services, including the examination
of our annual financial statements, limited reviews of quarterly financial
information and certain statutory audits. KPMG also performed services for us in
other business areas. The following table sets forth the fees billed for these
professional services during (a) Calendar 2003, (b) Stub Period 2002 (the 3
month period from October 1, 2002 and December 31, 2002), and (c) Fiscal 2002
(the twelve month period from October 1, 2001 to September 30, 2002). Please
note that we changed to a calendar fiscal year effective January 1, 2003.
Calendar 2003 Stub Period 2002 Fiscal 2002
------------------------------------------------------------------------------
Audit Fees (1): $ 806,145 $ 225,388 $ 695,406
Audit Related Fees (2): 48,000 - 40,000
Tax Fees (3): 533,828 34,776 525,835
All Other Fees: - - -
-----------------------------------------------------------------------------
Total: $1,364,973 $ 260,164 $1,261,241
-----------------------------------------------------------------------------
(1) Audit fees consisted of audit work performed on consolidated financial
statements, as well as work normally performed by the independent auditors in
connection with statutory and regulatory filings.
(2) Audit related fees consisted primarily of audits of our employee benefit
plan, as well as an audit of a foreign subsidiary not required by statute or
regulation.
(3) Tax fees are fees associated with tax compliance in foreign locations, tax
advice, and tax planning.
The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors. These services may
include audit services, audit-related services, tax services and other services.
Pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is generally
subject to a specific budget. The independent auditors and management are
required to periodically report to the Audit Committee regarding the extent of
services provided by the independent auditors in accordance with this
pre-approval, and the fees for the services performed to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis. All
of the services relating to the fees set forth on the above table were
pre-approved by the Audit Committee. We reviewed and discussed our audited
financial statements for 2003 with management and KPMG. We also discussed with
KPMG the matters required by Statement on Auditing Standards No. 61
(Communications with Audit Committees), as amended. This included a discussion
of our auditors' judgments as to the quality, not just the acceptability, of our
accounting principles, and other matters that generally accepted auditing
standards require to be discussed with an audit committee. We also received the
written disclosures and the letter from KPMG required by Independence Standards
Board Standard No. 1 (Independence Discussion with Audit Committees) and
discussed with KPMG their independence. We have determined
18
that the provision of all non-audit services by KPMG is compatible with the
auditors' independence.
Based on our review and discussions noted above, we recommended to our
Board, and our Board approved, that the audited financial statements be included
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003.
We have reappointed KPMG as our independent auditors for 2004. We are
not asking stockholders to ratify this appointment since the Act requires that
the audit committee have the sole responsibility for appointing the independent
auditors. A representative of KPMG will be at the Annual Meeting, will have the
opportunity to make a statement and will answer appropriate questions.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Stephen G. Pagliuca (Chairman)
Max D. Hopper
Dennis G. Sisco
19
COMPARISON OF TOTAL CUMULATIVE STOCKHOLDER RETURN
The following graph compares our Class A Common Stock performance to
the performance of Standard & Poor's Stock 400 Index and a Peer Group Index.
Our Peer Group Index consists of The Corporate Executive Board Company,
Forrester Research, Inc., and Meta Group, Inc. These companies represent the
most significant publicly traded companies that we believe compete with us in
our most important line of business: independent research and analysis on
information technology, computer hardware, software, communications and related
technology industries. There are no publicly traded information technology
research companies that also compete with us in our consulting and events
businesses.
The comparison assumes $100.00 was invested on September 30, 1998 in
our Class A Common Stock and in each of the indices, and assumes the
reinvestment of dividends, if any.
The comparisons in the graph below are provided in response to SEC
disclosure requirements and are not intended to forecast or be indicative of
future performance of our Class A Common Stock.
[LINE GRAPH]
DATE GARTNER CLASS A S&P MID CAP 400 PEER INDEX
9/30/1998 100 100 100
9/30/1999 81.13 125.50 78.33
9/30/2000 58.94 179.73 171.14
9/30/2001 45.89 145.58 74.22
9/30/2002 41.07 138.74 77.05
12/31/2003 57.35 199.14 119.50
20
OTHER INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Based on our review of information on file with the Securities and
Exchange Commission and our stock records, the following table provides certain
information about beneficial ownership of our Class A and Class B Common Stock
as of April 15, 2004 by: (i) each person (or group of affiliated persons) which
is known by us to own beneficially more than five percent of our Class A or
Class B Common Stock, (ii) each of our directors, (iii) each Named Executive
Officer, and (iv) all directors and current executive officers as a group.
Except as indicated in the footnotes to this table, the persons named in the
table have sole voting and investment power with respect to all shares shown as
owned beneficially by them, subject to community property laws where applicable.
NUMBER OF PERCENT OF NUMBER OF PERCENT OF
NAME OF BENEFICIAL OWNER CLASS A SHARES CLASS A CLASS B SHARES CLASS B
------------------------ -------------- ---------- -------------- ----------
Michael D. Fleisher (1) 1,747,442 1.66% 3,000 *
Anne Sutherland Fuchs (2) 41,001 * --- ---
William O. Grabe (3) 95,001 * --- ---
Max D. Hopper (4) 42,001 * --- ---
Glenn H. Hutchins(5) 46,969,066 45.35% --- ---
Stephen G. Pagliuca (6) 60,001 * --- ---
David J. Roux(7) 46,969,066 45.35% --- ---
Dennis G. Sisco (8) 26,001 * 1,089 *
James C. Smith(9) 5,000 * --- ---
Maynard G. Webb, Jr. (10) 32,334 * --- ---
Jeffrey W. Ubben(11) 8,560,100 8.26% 5,122,546 18.18%
Maureen O'Connell(12) 270,834 * --- ---
Christopher Lafond (13) 74,221 * --- ---
Zachary Morowitz(14) 259,837 * --- ---
Robert E. Knapp (15) 254,643 * --- ---
All current directors, director nominees and current executive
officers as a group (14 persons) (16) 58,152,685 54.93% 5,126,635 18.20%
Shaprio Capital Management Company, Inc. (17) --- --- 3,509,630 12.46%
3060 Peachtree Road, N.W., Atlanta, GA 30305
Entities Affiliated with Silver Lake Partners, L.P. (18) 46,969,066 45.35% --- ---
2725 Sand Hill Road, Suite 150, Melno Park, CA 94025
VA Partners, L.L.C. (19) 8,560,100 8.26% 5,122,546 18.18%
One Maritime Plaza, Suite 1400, San Francisco, CA 94111
* Less than 1%
--------------------
(1) Includes 1,637,000 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(2) Includes 36,001 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(3) Includes 21,001 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004 .
(4) Includes 21,001 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(5) Silver Lake Partners, L.P., Silver Lake Investors, L.P. and Silver Lake
Technology Investors, L.L.C. own 46,969,006 shares of Class A Common
Stock. Silver Lake Technology Associates, L.L.C. is the General Partner
of each of Silver Lake Partners, L.P. and Silver Lake Investors, L.P.
Mr. Hutchins is a Managing Member and Officer of Silver Lake Technology
Associates, L.L.C. and a Senior Member of Silver Lake
21
Technology Investors, L.L.C. As such, Mr. Hutchins could be deemed to
have shared voting or dispositive power over these shares. Mr.
Hutchins, however, disclaims beneficial ownership in these shares,
except to the extent of his pecuniary interest.
(6) Includes 21,001 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004, and includes 10,000 shares of Class A Common Stock that are
owned by Mr. Pagliuca indirectly.
(7) Silver Lake Partners, L.P., Silver Lake Investors, L.P. and Silver Lake
Technology Investors, L.L.C. own 46,969,006 shares of Class A Common
Stock. Silver Lake Technology Associates, L.L.C. is the General Partner
of each of Silver Lake Partners, L.P. and Silver Lake Investors, L.P.
Mr. Roux is a Managing Member and Officer of Silver Lake Technology
Associates, L.L.C. and a Senior Member of Silver Lake Technology
Investors, L.L.C. As such, Mr. Roux could be deemed to have shared
voting or dispositive power over these shares. Mr. Roux, however,
disclaims beneficial ownership in these shares, except to the extent of
his pecuniary interest.
(8) Includes 21,001 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(9) Includes 5,000 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(10) Includes 12,334 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(11) ValueAct Capital Partners, L.P., ValueAct Capital Partners II, L.P.,
and ValueAct International, Ltd. own 8, 560,100 shares of our Class A
Common Stock and 5,122,546 shares of our Class B Common Stock. VA
Partners, L.L.C. is the General Partner of each of these entities. Mr.
Ubben is a Managing Member of VA Partners, L.L.C. As such, Mr. Ubben
could be deemed to have shared voting or dispositive power over these
shares.
(12) Includes 270,834 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(13) Includes 74,067 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004.
(14) Includes 231,000 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004 and 2,840 shares of Class A Common Stock that are held by Mr.
Morowitz through our 401(k) plan.
(15) Includes 250,000 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004 and 4,643 shares of Class A Common Stock that are held by Mr.
Knapp through our 401(k) plan.
(16) Includes 2,350,240 shares of Class A Common Stock issuable upon the
exercise of stock options that are exercisable within 60 days of April
15, 2004. Mr. Knapp's holdings have not been included in this number as
he was not an executive officer of the Company as of April 15, 2004.
(17) The shares shown as beneficially owned by Shapiro Capital Management
Company, Inc. were reported in its Schedule 13G filed with the SEC on
February 10, 2004.
(18) Represents shares owned by a group of investment funds affiliated with
Silver Lake Partners, L.P., the General Partner of which is Silver Lake
Technology Associates, including (i) 43,254,088 shares owned by Silver
Lake Partners, L.P.; (ii) 1,242,922 shares owned by Silver Lake
Investors, L.P.; and (iii) 2,472,056 shares owned by Silver Lake
Technology Investors, L.L.C.
(19) Represents shares owned by a group of investments whose General Partner
is VA Partners, L.L.C., including: (i) 6,626,381 shares of Class A
Common Stock and 3,124,138 shares of Class B Common Stock owned by
ValueAct Capital Partners, L.P.; (ii) 901,671 shares of Class A Common
Stock and 288,606 shares of Class B Common Stock owned by ValueAct
Capital Partners II, L.P.; and (iii) 1,032,048 shares of Class A Common
Stock and 1,709,802 shares of Class B Common Stock owned by ValueAct
Capital International, Ltd.
22
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers, directors and persons who beneficially own more than 10% of
either class of our Common Stock to file reports of ownership and changes of
ownership with the SEC and to furnish us with copies of the reports they file.
Based solely on our review of the reports received by us, or written
representations from certain reporting persons, we believe that all reports were
timely filed, except the acquisition of shares upon the conversion of our
Convertible Junior Subordinated Promissory Notes by Messrs. Hutchins and Roux
was not reported on a timely-filed Form 4, but such transaction was subsequently
reported on Form 5, and all transactions are reflected in this Proxy.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
RELATIONSHIP WITH SILVER LAKE PARTNERS, L.P.
On April 17, 2000, we issued and sold an aggregate of $300 million principal
amount of our unsecured 6% Convertible Junior Subordinated Promissory Notes due
April 17, 2005 to Silver Lake Partners, L.P. ("Silver Lake") and certain of
Silver Lake's affiliates and to Integral Capital Partners IV, L.P. and one of
its affiliates. In October 2003, these notes were converted into 49,441,122
shares of our Class A Common Stock. The determination of the number of shares
issued upon the conversion was based upon a $7.45 conversion price and a
convertible note of $368.3 million, consisting of the original face amount of
$300 million plus accrued interest of $68.3 million. In connection with the
issuance of the notes, we agreed, among other things, that Silver Lake would
recommend two nominees for director and we would include two Silver Lake
nominees on our slate of nominees to be elected to our Board. This obligation
exists while Silver Lake owns Class A Common Stock representing at least 20
percent of the amount of Class A Common Stock into which the notes were
converted.
Messrs. Hutchins and Roux, managing members of the general partner of
Silver Lake and members of some of the affiliates of Silver Lake, are Silver
Lake's nominees to our board.
Silver Lake purchased $140,809 in research and consulting services from
us during 2003 and has contracted to purchase subscription research services
from us in 2004 in the amount of $114,050.
RELATIONSHIPS WITH OTHER THIRD PARTIES
Several of our other directors, as well as our director nominee, are
employed by companies that purchase our research and consulting services in the
ordinary course of their business. The following chart shows the amount of
research and consulting services purchased by each company during 2003 and the
amount for which each company has signed commitments to date for 2004.
NAME OF COMPANY 2003 2004
---------------------------------------------------------
Bain Capital, Inc. $205,715 $ 98,600
Behrman Capital $164,140 $ 5,860
Ebay, Inc. $ 70,196 $111,282
General Atlantic Partners, L.P. $410,107 $208,390
Value Act Capital $ 93,500 $ 37,500
MISCELLANEOUS
SOLICITATION OF PROXIES
We will bear the entire cost of this solicitation of proxies, including
the preparation, assembly, printing, and mailing of this Proxy Statement, the
proxy, and any additional solicitation material that we may provide to
shareholders. Copies of solicitation material will be provided to brokerage
firms, fiduciaries and custodians holding shares in their names that are
beneficially owned by others so that they may forward the solicitation material
to such beneficial owners. In addition, we have retained Georgeson Shareholder
Communications, Inc. to act as a proxy solicitor in conjunction with the
meeting. We have agreed to pay that firm $9,500, plus reasonable out of pocket
expenses, for proxy solicitation services. The original solicitation of proxies
by mail may be supplemented by solicitation by telephone, telegram and other
means by our directors, officers and employees. No additional compensation will
be paid to these individuals for any such services.
23
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR OUR 2005 ANNUAL MEETING
If you want to make a proposal for consideration at next year's Annual
Meeting and have it included in our proxy materials, we must receive your
proposal by December 31, 2004, and the proposal must comply with the rules of
the Securities and Exchange Commission.
If you want to make a proposal for consideration at next year's Annual
Meeting without having the proposal included in our proxy materials, we must
receive your proposal at least 90 days prior to the 2005 Annual Meeting. If we
give less than 100 days' notice of the 2004 Annual Meeting, we must receive your
proposal within ten days after we give the notice.
If we do not receive your proposal by the appropriate deadline, then it
may not be brought before the 2005 Annual Meeting.
Proposals should be addressed to the Corporate Secretary, Gartner,
Inc., 56 Top Gallant Road, P.O. Box 10212, Stamford, Connecticut 06904-2212.
ANNUAL REPORT
Our Annual Report for the year ended December 31, 2003 has been mailed
to our stockholders of record. Our Annual Report is not part of this Proxy
Statement.
Upon written request of any person solicited, our Annual Report on Form
10-K for the year ended December 31, 2003 as filed with the SEC may be obtained,
without charge, by writing to Investor Relations, Gartner, Inc., 56 Top Gallant
Road, P.O. Box 10212, Stamford, Connecticut 06904-2212.
THE BOARD OF DIRECTORS
GARTNER, INC.
/s/ Lewis G. Schwartz
Lewis G. Schwartz
Corporate Secretary
Stamford, Connecticut
April 29, 2004
24
APPENDIX A
GARTNER, INC.
AUDIT COMMITTEE CHARTER
I. STATEMENT OF POLICY AND PURPOSE
The Audit Committee (the "Committee") of the Board of Directors (the "Board") of
Gartner, Inc. (the "Company") shall be, through regular and special meetings
with management, the supervisor of the Company's internal auditors and the
Company's independent auditors, and shall assist the Board in fulfilling its
oversight responsibilities on matters relating to accounting, financial
reporting, internal control, auditing, regulatory compliance and other matters
as the Board or the Chairperson of the Committee (the "Chairperson") deems
appropriate. The Company shall post this Audit Committee Charter (the "Charter")
on its website.
The Committee shall:
- serve as an independent body to assist in Board oversight of (i) the
integrity of the Company's financial statements, (ii) the Company's
compliance with legal and regulatory requirements, (iii) the
independent auditor's qualifications and independence and (iv) the
performance of the Company's internal audit function and independent
auditors;
- prepare a Committee report as required by the Securities and Exchange
Commission ("SEC") to be included in the Company's annual proxy
statement;
- retain and terminate the Company's independent auditors (subject, if
applicable, to stockholder ratification); and
- provide an open avenue of communication among the independent
accountants, management and the Board.
The Committee's role is one of oversight. The Company's management is
responsible for preparing the Company's financial statements and the independent
auditors are responsible for auditing the financial statements. The independent
auditors shall report directly to, and are ultimately accountable to, the
Committee. However, in carrying out its oversight responsibilities, the
Committee is not providing any expert or special assurance as to the Company's
financial statements or any professional certification as to the independent
auditors' work.
The Committee will fulfill its responsibilities by carrying out the activities
enumerated in Sections III and IV of this Charter.
II. COMMITTEE MEMBERSHIP
The Committee will consist of not less than three (3) directors, one of whom
shall act as Chairperson, and each of whom shall meet the independence
requirements of the listing standards of the New York Stock Exchange ("NYSE"),
as well as independence requirements of the rules and regulations promulgated by
the SEC and by other applicable authorities from time to time.
The Board shall appoint the Committee members and the Chairperson of the
Committee, upon recommendation from the Governance/Nominating Committee of the
Board, and shall have the power to remove a Committee member for any reason. If
a Chairperson is not designated or present at a meeting of the Committee, the
members of the Committee may designate a Chairperson by majority vote.
Each member of the Committee shall have a basic understanding of finance and
accounting practices, and the Chairperson of the Committee must have accounting
or related financial management expertise as contemplated by the NYSE listing
requirements and the rules of the SEC.
If a Committee member simultaneously serves on the audit committees of more than
three public companies, the Board must determine that such simultaneous service
would not impair the ability of such member to effectively serve on the
Committee, and the Company must disclose this determination in its proxy
statement for its annual meeting of stockholders.
III. MEETINGS OF THE COMMITTEE
The Committee will meet regularly at least four times each fiscal year and more
frequently as appropriate. The Committee shall have separate direct lines of
communication between itself and management, the internal auditors (or other
personnel responsible for the internal audit function) and the independent
auditors, and shall meet
A-1
separately with each of them, at least quarterly, to discuss any matters the
Committee deems necessary or appropriate. The Committee shall report regularly
to the Board.
IV. RESPONSIBILITIES
The Committee shall review the Company's financial statements and shall be
directly responsible for the appointment, compensation, retention and oversight
of the work of the independent auditor (including resolving disagreements
between management and the independent auditor regarding financial reporting).
The Committee shall also review the Company's internal audit function and
financial reporting processes.
Committee functions are solely the responsibility of the Committee and may not
be allocated to a different committee of the Board.
A. Documents and Reports Review.
1. Audited Financial Statements. The Committee shall review and discuss
with management and the independent auditors the Company's annual
audited financial statements to be included in the Company's Annual
Report on Form 10-K (or the Annual Report to Stockholders if
distributed prior to the filing of the Annual Report on Form 10-K).
2. Interim Financial Statements. The Committee shall review and discuss
with management and the independent auditors the Company's interim
financial results to be included in the Company's Quarterly Report on
Form 10-Q.
3. MD&A. The Committee's review and discussion of all financial statements
shall include a review of the Company's disclosures under "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" contained in any document or report to be filed with the
SEC.
B. Independent Auditors. The Committee has the sole authority to retain, oversee
and terminate the outside independent auditors (subject, if applicable, to
stockholder ratification). The Committee may, if it deems appropriate, seek the
input of management in this decision-making role, but these responsibilities may
not be delegated to management. Additionally, the Committee shall:
1. Have sole authority to pre-approve all audit engagement fees and terms,
as well as all non-audit engagements, with the independent auditors.
Such pre-approval may be delegated to one or more members of the
Committee who shall report on any pre-approvals to the full Committee
at its regularly scheduled meetings, or may be waived in compliance
with the de minimis exceptions provided by applicable law.
2. At least annually, obtain and review a report by the independent
auditor describing:
(a) the audit firm's internal quality-control procedures;
(b) any material issues raised by the most recent internal quality-control
review, or peer review, of the firm, or by any inquiry or investigation
by governmental or professional authorities, within the preceding five
(5) years, respecting one or more independent audits carried out by the
firm, and any steps taken to deal with any such issues; and
(c) all relationships between the independent auditors and the Company (in
order to assess the auditor's independence).
3. After reviewing the foregoing report and the independent auditor's work
throughout the year, evaluate the auditor's qualifications, performance
and independence, and present its conclusions with respect to the
independent auditor to the full Board. This evaluation should include
the review and evaluation of the lead partner of the independent
auditor. In making its evaluation, the Committee should take into
account the opinions of management and the Company's internal auditors.
4. Ensure that the lead audit partner is rotated at the intervals required
by law, and consider whether, in order to assure continuing auditor
independence, there should be more frequent rotation of the lead audit
partner, or even of the audit firm itself.
5. Review with the independent auditor any audit problems or difficulties
the auditor encountered in the course of the audit work, and
management's response to such problems or difficulties. The review
should include any restrictions on the scope of the independent
auditor's activities or on access to requested information, and any
significant disagreements with management. Among the items the
Committee should review with the auditor are:
(a) any accounting adjustments that were noted or proposed by the
auditor but were "passed" by management as immaterial or
otherwise;
(b) any communications between the audit team and the audit firm's
national office respecting auditing or accounting issues
presented by the engagement;
A-2
(c) any management or internal control letter issued, or proposed
to be issued, by the audit firm to the Company; and
(d) a discussion of the responsibilities, budget and staffing of
the Company's internal audit functions.
6. Set clear hiring policies for employees or former employees of the
independent auditors.
7. Review the proposed scope of the annual independent audit of the
Company's financial statements and the associated fees, as well as any
significant variations in the actual scope of the independent audit and
the associated fees.
8. Present its conclusions with respect to the independent auditor to the
full Board.
C. Financial Reporting Processes. On a continuing and periodic basis, the
Committee shall review and discuss with management, the internal audit function
and the independent auditors, and shall take appropriate action with respect to:
1. Issues regarding accounting principles and financial statement presentations,
including any significant changes in the Company's selection or application of
accounting principles.
2. Issues as to the adequacy of the Company's internal controls and any special
audit steps adopted in light of material control deficiencies.
3. Analyses prepared by management and/or the independent auditor setting forth
significant financial reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements.
4. The effect of regulatory and accounting initiatives, as well as off-balance
sheet structures, on the financial statements of the Company.
5. The types of information to be disclosed and the type of presentation to be
made in the Company's earnings press releases (paying particular attention to
any use of "pro forma," or "adjusted" non-GAAP, information), as well as
financial information and earnings guidance provided to analysts and rating
agencies.
6. The quality and adequacy of the Company's internal accounting controls and
the Company's financial reporting processes, and the results of the internal
auditor's examinations.
7. Policies with respect to risk assessment and risk management, including
guidelines and policies to govern the process by which risk assessment and
management is undertaken. The Audit Committee should discuss the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.
8. The nature of any unusual or significant commitments or contingent
liabilities together with the underlying assumptions and estimates of
management. In connection with the foregoing, the Committee should review with
the Company's General Counsel legal and regulatory matters that may have a
material impact on the financial statements.
9. The information provided by the independent auditors pursuant to applicable
law concerning (i) all critical accounting policies and practices; (ii) all
alternative treatments of financial information within GAAP that have been
discussed with management, the ramifications of the use of such alternatives and
the treatment preferred by the independent auditors; and (iii) other material
written communications with management.
The resolution of any disagreements between management and the independent
auditors regarding financial reporting.
D. General.
1. The Committee shall review the adequacy of this Charter on an annual basis.
The Committee will recommend to the Board any modifications to this Charter that
the Committee deems appropriate for approval by the Board.
2. On an as needed basis, the Committee shall review such other matters as the
Board or the Committee considers appropriate.
3. The Committee may receive presentations from management personnel on key
functional activities of the Company, including information technology, taxes,
treasury, risk management and legal.
4. The Committee may cause an investigation to be made into any matter within
the scope of its responsibility. The Committee may engage independent resources
to assist in its investigations as it deems necessary.
5. The Committee Chairperson shall make regular reports to the Board on the
Committee's activities and review with the full Board any issues that arise with
respect to the quality or integrity of the Company's financial statements, the
Company's compliance with legal or regulatory requirements, the performance and
independence of the Company's independent auditors, or the performance of the
internal audit function.
6. The Committee shall have the authority to engage, and to obtain advice and
assistance from, outside independent legal, accounting or other advisors without
seeking board approval, as the Committee may determine necessary to carry out
its duties.
A-3
7. The Committee shall determine appropriate funding for payment of compensation
to the independent auditors and to any outside independent legal, accounting or
other advisors, and for payment of ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties.
8. Director's and committee service fees are the only compensation a Committee
member may receive from the Company.
9. The Committee shall establish procedures for (i) the receipt, retention and
treatment of complaints regarding accounting, internal accounting controls or
auditing matters and (ii) the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.
10. The Committee shall receive, and act upon as appropriate, the disclosures
made by the Chief Executive Officer and the Chief Financial Officer concerning
internal controls and fraud required by Rule 13a-14 of the Securities Exchange
Act of 1934, as amended.
V. EVALUATION
The Governance/Nominating Committee of the Board shall conduct an annual
performance evaluation of the Committee in light of its duties and
responsibilities as set forth in this Charter.
A-4
GARTNER, INC.
Proxy for the Annual Meeting of Stockholders
To Be Held on June 30, 2004
Class A Common Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I acknowledge receipt of the Notice of the Annual Meeting of Stockholders and
Proxy Statement of Gartner, Inc., each dated April 29, 2004. I appoint
Christopher Lafond and Lewis G. Schwartz, and each of them, Proxies and
attorneys-in-fact, with full power to each of substitution, to represent me at
Gartner's Annual Meeting, to be held on June 30, 2004, at 10:00 a.m. local time,
and at any adjournments, and to vote all shares of my Class A Common Stock as I
specify on the reverse side of this card.
THE PROXYHOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY AS SPECIFIED. IF
NO SPECIFICATION IS INDICATED, THE PROXYHOLDERS WILL VOTE THE SHARES REPRESENTED
BY THIS PROXY "FOR" THE PROPOSALS AND FOR SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING AS THE PROXYHOLDERS DEEM ADVISABLE.
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- FOLD AND DETACH HERE -
Please mark
your votes as /X/
indicated in
this example
1. Election of Director
FOR the nominee WITHHOLD
listed below AUTHORITY
(except as marked to vote for the nominee
to the contrary) listed below
/ / / /
Nominee: (01) Maynard G. Webb, Jr.
2. Other
To vote or otherwise represent the shares on other business which may
properly come before the meeting or any adjournments, according to their
discretion.
Mark here for address change and note at left. / /
Date: _______________________________________
Signature:____________________________________
Signature:____________________________________
Note: Please sign exactly as your name appears on your stock certificate. If
shares are held jointly, each holder should sign. Executors, administrators,
trustees, guardians, attorneys and agents should sign using their full title.
Corporations should sign using the full corporate name by the authorized
officer.
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
[PHONE ICON] VOTE BY TELEPHONE OR INTERNET [COMPUTER ICON]
QUICK *** EASY *** IMMEDIATE
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: CALL TOLL-FREE 1-888-XXX-XXXX ON A TOUCH TONE TELEPHONE 24
HOURS A DAY-7 DAYS A WEEK
THERE IS NO CHARGE TO YOU FOR THIS CALL. - HAVE YOUR PROXY CARD IN HAND.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER, WHICH IS LOCATED IN THE BOX IN THE
LOWER RIGHT HAND CORNER OF THIS FORM
OPTION 1: To vote as the Board of Directors recommends on ALL proposals, press 1
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OR
2. VOTE BY INTERNET: Follow the instructions at our Website Address:
http://
OR
3. VOTE BY PROXY: Mark, sign and date your proxy card and return promptly in
the enclosed envelope.
NOTE: IF YOU VOTE BY INTERNET OR TELEPHONE, THERE IS NO NEED TO RETURN YOUR
PROXY CARD.
THANK YOU FOR VOTING.
GARTNER, INC.
Proxy for the Annual Meeting of Stockholders
To Be Held on June 30, 2004
Class B Common Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I acknowledge receipt of the Notice of the Annual Meeting of Stockholders and
Proxy Statement of Gartner, Inc., each dated April 29, 2004. I appoint
Christopher Lafond and Lewis G. Schwartz, and each of them, Proxies and
attorneys-in-fact, with full power to each of substitution, to represent me at
Gartner's Annual Meeting, to be held on June 30, 2004, at 10:00 a.m. local time,
and at any adjournments, and to vote all shares of my Class B Common Stock as I
specify on the reverse side of this card.
THE PROXYHOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY AS SPECIFIED. IF
NO SPECIFICATION IS INDICATED, THE PROXYHOLDERS WILL VOTE THE SHARES REPRESENTED
BY THIS PROXY "FOR" THE PROPOSALS AND FOR SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING AS THE PROXYHOLDERS DEEM ADVISABLE.
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
Please mark
your votes as /X/
indicated in
this example
1. Election of Director
FOR the nominee WITHHOLD
listed below AUTHORITY
(except as marked to vote for the nominee
to the contrary) listed below
/ / / /
Nominees: (01) Anne Sutherland Fuchs and (02) Jeffrey W. Ubben
(Instruction: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
------------------------------------------------------
2. Other
To vote or otherwise represent the shares on other business which may
properly come before the meeting or any adjournments, according to their
discretion.
Mark here for address change and note at left. / /
Date: _______________________________________
Signature:____________________________________
Signature:____________________________________
Note: Please sign exactly as your name appears on your stock certificate. If
shares are held jointly, each holder should sign. Executors, administrators,
trustees, guardians, attorneys and agents should sign using their full title.
Corporations should sign using the full corporate name by the authorized
officer.
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
[PHONE ICON] VOTE BY TELEPHONE OR INTERNET [COMPUTER ICON]
QUICK *** EASY *** IMMEDIATE
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: CALL TOLL-FREE 1-888-XXX-XXXX ON A TOUCH TONE TELEPHONE 24
HOURS A DAY-7 DAYS A WEEK
THERE IS NO CHARGE TO YOU FOR THIS CALL. - HAVE YOUR PROXY CARD IN HAND.
YOU WILL BE ASKED TO ENTER A CONTROL NUMBER, WHICH IS LOCATED IN THE BOX IN THE
LOWER RIGHT HAND CORNER OF THIS FORM
OPTION 1: To vote as the Board of Directors recommends on ALL proposals, press 1
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OR
2. VOTE BY INTERNET: Follow the instructions at our Website Address:
http://
OR
3. VOTE BY PROXY: Mark, sign and date your proxy card and return promptly in
the enclosed envelope.
NOTE: IF YOU VOTE BY INTERNET OR TELEPHONE, THERE IS NO NEED TO RETURN YOUR
PROXY CARD.
THANK YOU FOR VOTING.