GARTNER, INC.
EXECUTIVE PERFORMANCE BONUS PLAN
(Effective January 1, 2008)
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TABLE OF CONTENTS
(continued)
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SECTION 1
BACKGROUND, PURPOSE AND DURATION
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1.1 Effective
Date
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1.2 Purpose of the
Plan
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SECTION 2
DEFINITIONS
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2.1 “Actual
Award”
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2.2
“Affiliate”
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2.3 “Base
Salary”
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2.4
“Board”
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2.5 “Cash
Flow”
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2.6
“Code”
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2.7
“Committee”
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2.8
“Company”
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2.9
“Contract Value”
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2.10
“Customer Efficiency”
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2.11
“Determination Date”
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2.12
“Disability”
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2.13
“Earnings Per Share”
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2.14
“Employee”
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2.15
“Financial Efficiency”
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2.16 “Fiscal
Year”
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2.17
“Maximum Award”
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2.18
“Participant”
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2.19 “Payout
Formula”
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2.20
“Performance Period”
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2.21
“Performance Goals”
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2.22
“Plan”
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2.23
“Profit”
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2.24
“Retirement”
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2.25
“Revenue”
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2.26
“SG&A”
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2.27 “Target
Award”
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2.28
“Termination of Employment”
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2.29 “Total
Stockholder Return”
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SECTION 3
SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS
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3.1 Selection of
Participants
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3.2 Determination
of Performance Goals
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TABLE OF CONTENTS
(continued)
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3.3 Determination
of Target Awards
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3.4 Determination
of Payout Formula or Formulae
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3.5 Date for
Determinations
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3.6 Determination
of Actual Awards
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SECTION 4
PAYMENT OF AWARDS
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4.1 Right to
Receive Payment
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4.2 Timing of
Payment
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4.3 Form of
Payment
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4.4 Termination of
Employment
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SECTION 5
ADMINISTRATION
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5.1 Committee is
the Administrator
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5.2 Committee
Authority
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5.3 Decisions
Binding
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5.4 Delegation by
the Committee
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SECTION 6
GENERAL PROVISIONS
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6.1 Tax
Withholding
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6.2 No Effect on
Employment
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6.3
Participation
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6.4
Indemnification
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6.5
Successors
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6.6 Beneficiary
Designations
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6.7
Nontransferability of Awards
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6.8
Deferrals
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SECTION 7
AMENDMENT, TERMINATION AND DURATION
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7.1 Amendment,
Suspension or Termination
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7.2 Duration of
the Plan
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SECTION 8 LEGAL
CONSTRUCTION
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8.1 Gender and
Number
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8.2
Severability
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8.3 Requirements
of Law
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8.4 Governing
Law
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8.5 Captions
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-iii-
GARTNER, INC.
EXECUTIVE PERFORMANCE BONUS PLAN
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1 Effective Date . The Plan
is effective as of January 1, 2008, subject to ratification by
an affirmative vote of the holders of a majority of the Shares that
are present in person or by proxy and entitled to vote at the 2007
Annual Meeting of Stockholders of the Company.
1.2 Purpose of the Plan . The
Plan is intended to increase stockholder value and the success of
the Company by motivating Participants (1) to perform to the
best of their abilities, and (2) to achieve the
Company’s objectives. The Plan’s goals are to be
achieved by providing Participants with the opportunity to earn
incentive awards for the achievement of goals relating to the
performance of the Company. The Plan is intended to permit the
payment of bonuses that qualify as performance-based compensation
under Section 162(m) of the Code.
SECTION 2
DEFINITIONS
The following words and phrases shall
have the following meanings unless a different meaning is plainly
required by the context:
2.1 “ Actual Award
” means as to any Performance Period, the actual award (if
any) payable to a Participant for the Performance Period. Each
Actual Award is determined by the Payout Formula for the
Performance Period, subject to the Committee’s authority
under Section 3.6 to eliminate or reduce the award otherwise
determined by the Payout Formula.
2.2 “ Affiliate ”
means any corporation or other entity (including, but not limited
to, partnerships and joint ventures) controlled by the
Company.
2.3 “ Base Salary
” means as to any Performance Period, the Participant’s
earned salary during the Performance Period. Such Base Salary shall
be before both (a) deductions for taxes or benefits, and
(b) deferrals of compensation pursuant to Company-sponsored
plans and Affiliate-sponsored plans.
2.4 “ Board ”
means the Board of Directors of the Company.
2.5 “ Cash Flow ”
means as to any Performance Period, cash generated from operating
activities, free cash flow or total cash flow and includes cash
flow return on investment (calculated by dividing any of the
foregoing measures of Cash Flow by total capital).
2.6 “ Code ” means
the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include
such section or regulation, any
valid
regulation promulgated thereunder, and any comparable provision of
any future legislation or regulation amending, supplementing or
superseding such section or regulation.
2.7 “ Committee ”
means the committee appointed by the Board (pursuant to
Section 5.1) to administer the Plan.
2.8 “ Company ”
means Gartner, Inc., a Delaware corporation, or any successor
thereto.
2.9 “ Contract Value
” means as to any Performance Period, the value attributable
to all subscription-related research products that recognize
revenue on a ratable basis. Contract value is calculated as the
annualized value of all subscription research contracts in effect
at a specific point in time, without regard to the duration of the
contract.
2.10 “ Customer
Efficiency ” means as to any Performance Period, a
performance measurement related to interaction with customers and
other third-party entities (for example, but not by way of
limitation, client retention, wallet retention, utilization rates,
sales performance, billable headcount and user retention, each as
defined by the Committee).
2.11 “ Determination
Date ” means the latest possible date that will not
jeopardize a Target Award or Actual Award’s qualification as
performance-based compensation under Section 162(m) of the
Code.
2.12 “ Disability
” means a permanent disability in accordance with a policy or
policies established by the Committee (in its discretion) from time
to time.
2.13 “ Earnings Per
Share ” means as to any Performance Period, the
Company’s after-tax Profit, divided by a weighted average
number of common shares outstanding and/or dilutive common
equivalent shares deemed outstanding.
2.14 “ Employee ”
means any employee of the Company or of an Affiliate, whether such
employee is so employed at the time the Plan is adopted or becomes
so employed subsequent to the adoption of the Plan.
2.15 “ Financial
Efficiency ” means as to any Performance Period, the
percentage equal to Profit (or Revenue) for the Performance Period,
divided by a financial metric determined by the Committee (for
example, but not by way of limitation, stockholders’ equity
or Revenue). Financial Efficiency shall include, but not be limited
to, return on stockholders’ equity, return on capital, return
on assets, return on investment, economic value added and any
measure of internal rate of return, each as defined by the
Committee.
2.16 “ Fiscal Year
” means the fiscal year of the Company.
2.17 “ Maximum Award
” means as to any Participant for any Performance Period, $5
million.
2.18 “ Participant
” means as to any Performance Period, an Employee who has
been selected by the Committee for participation in the Plan for
that Performance Period.
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2.19 “ Payout Formula
” means as to any Performance Period, the formula or payout
matrix established by the Committee pursuant to Section 3.4 in
order to determine the Actual Awards (if any) to be paid to
Participants. The formula or matrix may differ from Participant to
Participant.
2.20 “ Performance
Period ” means a Fiscal Year.
2.21 “ Performance Goals
” means the goal(s) (or combined goal(s)) determined by the
Committee (in its discretion) to be applicable to a Participant for
a Target Award for a Performance Period. As determined by the
Committee, the Performance Goals for any Target Award applicable to
a Participant may provide for a targeted level or levels of
achievement using one or more of the following measures:
(a) Cash Flow, (b) Contract Value, (c) Customer
Efficiency, (d) Earnings Per Share, (e) Financial
Efficiency, (f) Profit, (g) Revenue, (h) SG&A and
(i) Total Stockholder Return. Performance Goals may differ
from Participant to Participant, Performance Period to Performance
Period and from award to award. Any criteria used may be measured,
as applicable, (i) in absolute terms, (ii) in relative
terms (including, but not limited, any increase (or decrease with
respect to SG&A) over the passage of time and/or any
measurement against other companies or financial or business or
stock index metrics particular to the Company), (iii) on a per
share and/or share per capita basis, (iv) against the
performance of the Company as a whole or against any Affiliate(s),
or a particular segment(s), a business unit(s) or a product(s) of
the Company, (v) on a pre-tax or after-tax basis and/or (vi)
using an actual foreign exchange rate or on a foreign exchange
neutral basis. Prior to the Determination Date, the Committee shall
determine whether any element(s) (for example, but not by way of
limitation, the effect of mergers or acquisitions) shall be
included in or excluded from the calculation of any Performance
Goal with respect to any Participants (whether or not such
determinations result in any Performance Goal being measured on a
basis other than generally accepted accounting principles).
2.22 “ Plan ”
means the Gartner, Inc. Executive Performance Bonus Plan, as set
forth in this instrument and as hereafter amended from time to
time.
2.23 “ Profit ”
means as to any Performance Period, a measurement of net income as
determined by the Committee with respect to a Performance Goal.
Profit may be determined in accordance with United States Generally
Accepted Accounting Principles (“GAAP”) or adjusted to
exclude any or all non-GAAP items.
2.24 “ Retirement
” means with respect to any Participant, a Termination of
Employment occurring in accordance with a policy or policies
established by the Committee (in its discretion) from time to
time.
2.25 “ Revenue ”
means as to any Performance Period, net revenues generated or to be
generated (backlog) from third parties.
2.26 “ SG&A ”
means as to any Performance
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