<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                        
                                   FORM 10-K
                                        
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
                                        
                         COMMISSION FILE NUMBER 0-14443
                                        
                              GARTNER GROUP, INC.
             (Exact name of Registrant as specified in its charter)
                                        
                     Delaware                          04-3099750
         (State or other jurisdiction of            (I.R.S. Employer
          incorporation or organization)         Identification Number)
                                        
                  P.O. Box 10212                       06904-2212
                56 Top Gallant Road                    (Zip Code)
                   Stamford, CT
      (Address of principal executive offices)
                                        
       Registrant's telephone number, including area code: (203) 316-1111
                                        
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                  Name of Each Exchange
Title of Class                                    On Which Registered
--------------                                    ---------------------
Common Stock, Class A, $.0005 Par Value           New York Stock Exchange
Common Stock, Class B, $.0005 Par Value           New York Stock Exchange

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None.

Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  YES X  NO __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

The aggregate market value of the voting stock held by persons other than those 
who may be deemed affiliates of the Company, as of November 30, 2000, was 
approximately $723.5 million. This calculation does not reflect a determination 
that persons are affiliates for any other purposes.

The number of shares outstanding of the registrant's capital stock as of 
November 30, 2000 was 53,994,898 shares of Common Stock, Class A and 32,559,916 
shares of Common Stock, Class B.

                      DOCUMENTS INCORPORATED BY REFERENCE

(1)  Annual Report to Stockholders of Registrant for the fiscal year ended
     September 30, 2000. Certain information therein is incorporated by
     reference into Part II hereof.

(2)  Proxy Statement for the Annual Meeting of Stockholders of Registrant to be
     held on January 25, 2001. Certain information in the Proxy Statement is
     incorporated by reference into Part III hereof.

<PAGE>   2

PART I


ITEM 1. BUSINESS.

GENERAL

Gartner Group, Inc. ("Gartner" or the "Company"), founded in 1979, is the
world's leading independent provider of research and analysis on the computer
hardware, software, communications and related information technology ("IT")
industries. The Company is organized into four business segments: research,
consulting, events and TechRepublic. Research encompasses products which, on an
ongoing basis, highlight industry developments, review new products and
technologies, provide quantitative market research, and analyze industry trends
within a particular technology or market sector. The Company's clients typically
enters into annual renewable subscription contracts for research products. The
Company distributes such products through print and electronic media. Consulting
consists primarily of consulting and measurement engagements, which provide
comprehensive assessments of cost performance, efficiency and quality for all
areas of IT. Events consists of various focused symposia, expositions and
conferences. TechRepublic consists of an IT professional online destination with
revenues consisting primarily of Web-based advertising. The Company's primary
clients are senior business executives, IT professionals, purchasers and vendors
of IT products and services. Gartner product and service offerings collectively
provide comprehensive coverage of the IT industry to over 10,000 client
organizations.


MARKET OVERVIEW

The explosion of complex IT products and services creates a growing demand for
independent research and analysis. Furthermore, IT is increasingly important to
organizations' business strategies as the pace of technological change has
accelerated and the ability of an organization to integrate and deploy new
information technologies is critical to its competitiveness. Companies planning
their IT needs must stay abreast of rapid technological developments and
industry best practices in a dynamic market where vendors continually introduce
new products with a wide variety of standards and ever-shorter life cycles. As a
result, senior business executives and IT professionals are making substantial
financial commitments to IT systems and products and require independent,
third-party research and consultative services which provide a comprehensive
view of the IT landscape in order to make purchasing and planning decisions for
their organization.


BUSINESS STRATEGY

The Company's objective is to maintain and enhance its market position as a
leading provider of in-depth, value-added, proprietary research and analysis of
the IT market. The Company applies five strategic imperatives to leverage its
thought leadership through both a services organization and an interactive
channel in order to maximize opportunity and financial results: deliver
cutting-edge provocative thought leadership in its research; dramatically grow
the Company's consulting business; enhance the Company's Internet-delivery
capabilities; attract and retain the best personnel; and increase client
loyalty.

Deliver Thought Leadership.  The Company is a leading provider of in-depth,
value-added, proprietary research and analysis of the IT industry. The Company's
global network of professionals is comprised or more than 1,400 consultants and
research analysts with an average of fifteen years of industry experience. The
Company maintains five primary research centers located in Stamford, CT; Santa
Clara, CA; Windsor, England; Brisbane, Australia; and Tokyo, Japan, plus a
number of smaller, satellite research centers throughout the world.

Grow the Consulting Business.  The Company continues to invest in and grow its
consulting business to further leverage its knowledge base. There is a
significant demand within the Company's current client base for the Company to
apply its knowledge and message to client-specific situations and industries.
The Company intends to continue to leverage its research knowledge to provide
cost-effective solutions and to staff appropriately to deliver on the expanding
consulting business.

Enhance Internet-Delivery Capabilities.  The Company is significantly investing
in re-architecting the Company's Internet-delivery capability. The Company is on
its third-generation Web platform, and has been a leader in using the Internet
to deliver research to its clients. In order to capture the full potential of
the Internet as an interactive delivery vehicle, the Company is redesigning its
research process to deliver into an Internet paradigm with launch anticipated in
the first quarter of fiscal 2001. The Company is expanding its research
capability to include tools and a Web-based interaction for research and inquiry
that is continuously refreshed within a dynamic Internet environment.
Additionally, the Company will continue to invest in TechRepublic, the leading
online destination for enterprise computing professionals, to ensure the
continued growth of the TechRepublic community and the Company's ability to
monetize the community through advertising and e-commerce.

Retain and Attract the Best Personnel.  The Company has over 4,300 associates,
an increase of approximately 27% from the prior year. The Company's goal is to
provide an environment where every associate is respected, challenged, and
empowered to make decisions and act in the best interest of the Company and its
clients. The Company believes that creating a positive, stimulating work



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<PAGE>   3
environment will attract new employees and increase retention.

Increase Client Loyalty.   The Company provides products and services to more
than 10,000 client organizations. The Company strives to have an intimate
knowledge of its clients and their industries in addition to the technological
expertise needed to redefine and transform their businesses. The Company's goal
is to rapidly deliver strategically relevant research and analysis that
surpasses client requirements and encourages a high level of satisfaction that,
in turn, results in increased client engagements and renewals, multi-year
contracts, additive services across business segments, and new client referrals.

The Company believes that successful execution of these strategies will enable 
the Company to expand its client base in domestic and international markets and 
create value-based relationships that lead to increased sales of its products 
and services.

PRODUCTS AND SERVICES

The Company's principal products and services are Research, Consulting, Events,
and Internet (TechRepublic, the Company's online community for IT
professionals).

Research.  Research consists primarily of annually renewable subscription-based
contracts for research products which, on an ongoing basis, highlight industry
developments, review new products and technologies, provide quantitative market
research, analyze industry trends within a particular technology or market
sector and provide comparative analysis of the IT operations of organizations.

Research provides qualitative and quantitative research and analysis that
clarifies decision-making for IT buyers, users and vendors. Research and
advisory services also provide objective analysis that helps clients stay ahead
of IT trends, directions and vendor strategies and provide worldwide coverage of
research, statistical analysis, growth projections and market share rankings of
suppliers and vendors to IT manufacturers and the financial community. Each
product is supported by a team of research staff members with substantial
experience in the covered segment or topic of the IT industry. The Company's
staff researches and prepares published reports and responds to telephone and
E-mail inquiries from clients. Clients receive Gartner research and analysis on
paper and through a number of electronic delivery formats.

The Company measures the volume of its research business based on research
contract value. The Company calculates research contract value as the annualized
value of all subscription-based research contracts in effect at a given point in
time, without regard to the duration of the contracts outstanding at such time.
Historically, the Company has experienced that a substantial portion of client
companies has renewed these services for an equal or higher level of total
payments each year.

Deferred revenues, as presented in the Company's Consolidated Balance Sheets,
represent unamortized revenues from billed research products, consulting
engagements and events. Total deferred revenues do not directly correlate to
contract value as of the same date since contract value represents an annualized
value of all outstanding contracts without regard to the duration of such
contracts, and deferred revenue represents unamortized revenue remaining on
outstanding and billed contracts.

Consulting.  Consulting consists of consulting and measurement engagements.
Consulting provides customized project consulting on the delivery, deployment
and management of high-tech products and services. Principal consulting service
offerings include Marketing Strategy, Competitive Analysis, E-Business Strategy,
Customer Satisfaction Surveys, and E-Business Web Diagnostic. Measurement
services provide benchmarking, continuous improvement and best practices
services. One of the Company's key measurements of its Consulting products is
consulting backlog. Consulting backlog represents future revenue to be derived
from in-process consulting and measurement engagements.

Events.  Events include symposia, conferences and exhibitions that provide
comprehensive coverage of IT issues and forecasts of key IT industry segments.
The conference season begins each year with Symposia and ITxpo, held in the
United States, Europe and the Asia/Pacific rim. Additionally, the Company
sponsors other conferences, seminars and briefings. Certain events are offered
as part of a continuous services subscription; however, the majority of events
are individually paid for prior to attendance.

Internet.  TechRepublic is an online destination developed exclusively for IT
professionals by IT professionals and provides career insight, community
interaction, and customized content to CIOs, IT managers, network
administrators, support professionals, and other enterprise computing
professionals. The TechRepublic Web site offerings include IT industry news,
newsletters, analysis, columns, articles, downloads, forums, event listings and
job, peer and vendor directories. TechRepublic revenues are derived primarily
from the sale of advertising on pages and are recognized upon delivery to users
of the TechRepublic Web site.

See Note 16 of the Notes to Consolidated Financial Statements included in the
2000 Annual Report to Stockholders, incorporated by reference herein, for a
summary of the Company's operating segments and geographic information.


                                       3

<PAGE>   4
COMPETITION


The Company believes that the principal competitive factors in its industry are
quality of research and analysis, timely delivery of information, customer 
service, the ability to offer products that meet changing market needs for 
information and analysis and price. The Company believes it competes favorably 
with respect to each of these factors.

The Company faces competition from a significant number of independent 
providers of information products and services, as well as the internal 
marketing and planning organizations of the Company's clients. The Company also 
competes indirectly against consulting firms and other information providers, 
including electronic and print media companies. These indirect competitors 
could choose to compete directly with the Company in the future. In addition, 
limited barriers to entry exist in the Company's market. As a result, 
additional new competitors may emerge and existing competitors may start to 
provide additional or complementary services. Increased competition may result 
in loss of market share, diminished value in the Company's products and 
services, reduced pricing and increased marketing expenditures. The Company may 
not be successful if it cannot compete effectively on quality of research and 
analysis, timely delivery of information, customer service, the ability to 
offer products to meet changing market needs for information and analysis, and 
price.

EMPLOYEES

As of September 30, 2000, the Company employed 4,322 persons, of which 1,032 
employees are located at the Company's headquarters in Stamford, CT; 1,880 are 
located at other domestic facilities; and 1,410 are located outside of the 
United States. None of the Company's employees are represented by a collective 
bargaining arrangement. The Company has experienced no work stoppages and 
considers its relations with employees to be favorable.

The Company's future success depends heavily upon the quality of its senior 
management, sales personnel, IT analysts, consultants and other key personnel. 
The Company faces intense competition for these qualified professionals from, 
among others, technology and Internet companies, market research firms, 
consulting firms and electronic and print media companies. Some of the 
personnel that the Company attempts to hire are subject to non-competition 
agreements that could impede the Company's short-term recruitment efforts. Any 
failure to retain key personnel or hire additional qualified personnel as may 
be required to support the evolving needs of clients or growth in the Company's 
business could adversely affect the quality of the Company's products and 
services, and, therefore, its future business and operating results.


I
TEM 2. PROPERTIES.

The Company's headquarters are located in approximately 244,000 square feet of
leased office space in five buildings located in Stamford, CT. These facilities
accommodate research and analysis, marketing, sales, client support, production
and corporate administration. The leases on these facilities expire in 2010. The
Company also leases office space in 40 domestic and 40 international locations
to support its research and analysis, domestic and international sales efforts
and other functions. The Company believes its existing facilities and expansion
options are adequate for its current needs and that additional facilities are
available for lease to meet future needs.


ITEM 3. LEGAL PROCEEDINGS.

The Company is involved in legal proceedings and litigation arising in the 
ordinary course of business. The Company believes the outcome of all current 
proceedings, claims and litigation will not have a material effect on the 
Company's financial position or results of operations when resolved in a future 
period.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of the Company's stockholders during the 
fourth quarter of the fiscal year covered by this report.


PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

As of November 30, 2000, there were approximately 250 holders of record of the 
Company's Class A Common Stock and approximately 4,300 holders of record of 
the Company's Class B Common Stock. Since September 15, 1998, the Company's 
Class A Common Stock has been listed for trading on the New York Stock Exchange 
under the symbol "IT". Prior to September 15, 1998, the


                                       4

<PAGE>   5
Class A Common Stock was listed on the Nasdaq National Market. Since July 20,
1999, the Company's Class B Common Stock has been listed for trading on the New
York Stock Exchange under the symbol "IT/B". The Class B Common Stock is
identical in all respects to the Class A Common Stock, except that the Class B
Common Stock is entitled to elect at least 80% of the members of the Company's
Board of Directors. In connection with the Company's recapitalization in July
1999, the Company declared a special, non-recurring cash dividend of $1.1945 per
share, payable to all Company stockholders of record as of July 16, 1999. The
cash dividend, totaling approximately $125.0 million, was paid on July 22, 1999
and was funded out of existing cash. While subject to periodic review, the
current policy of the Company's Board of Directors is to retain all earnings
primarily to provide funds for the continued growth of the Company.

The following table sets forth for the periods indicated the high and low sales
prices for the Class A Common Stock and Class B Common Stock as reported on the
New York Stock Exchange.

CLASS A COMMON STOCK

<TABLE>
<CAPTION>
                                         FISCAL YEAR 2000          FISCAL YEAR 1999
                                         -----------------        -----------------
                                         HIGH          LOW        HIGH          LOW
                                         ----          ---        ----          ---
<S>                                    <C>            <C>        <C>           <C>
First Quarter ended December 31         $19.00        $ 9.56     $24.81        $17.31
Second Quarter ended March 31           $22.25        $12.63     $25.75        $20.38
Third Quarter ended June 30             $17.00        $11.38     $24.94        $18.75
Fourth Quarter ended September 30       $15.25        $11.63     $23.38        $14.25
</TABLE>



CLASS B COMMON STOCK

<TABLE>
<CAPTION>
                                         FISCAL YEAR 2000          FISCAL YEAR 1999
                                         -----------------        -----------------
                                         HIGH          LOW        HIGH          LOW
                                         ----          ---        ----          ---
<S>                                    <C>            <C>        <C>           <C>
First Quarter ended December 31         $18.75        $ 9.38         --            --
Second Quarter ended March 31           $17.63        $10.00         --            --
Third Quarter ended June 30             $13.25        $ 9.19         --            --
Fourth Quarter ended September 30       $13.06        $ 9.75     $23.81        $16.25
</TABLE>



ITEM 6. SELECTED FINANCIAL DATA.

"Selected Consolidated Financial Data" contained on pages 56 and 57 of the 
Annual Report of Stockholders of the Company is incorporated herein by 
reference.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
        OF OPERATIONS.

"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained on pages 28 through 35 of the 2000 Annual Report to
Stockholders of the Company is incorporated herein by reference.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

"Quantitative and Qualitative Disclosures about Market Risk" contained on page 
35 of the 2000 Annual Report to Stockholders of the Company is incorporated 
herein by reference.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

"Consolidated Financial Statements and Selected Consolidated Financial Data" 
contained on pages 36 through 55 of the 2000 Annual Report to Stockholders of 
the Company is incorporated herein by reference.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
        FINANCIAL DISCLOSURE.

None.


                                       5

<PAGE>   6


PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information relating to the directors of the Company is set forth under the
caption "Proposal One: Election of Directors" on pages 3 through 6 in the Proxy
Statement for the Annual Meeting of Stockholders of the Company to be held
January 25, 2001 and is incorporated herein by reference. Information relating
to executive officers of the Company is set forth under the caption "Executive
Officers" on page 7 of the Proxy Statement for the Annual Meeting of
Stockholders of the Company to be held January 25, 2001 and is incorporated
herein by reference. Information relating to Section 16(a) of the Exchange Act
is set forth under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" on page 20 of the Proxy Statement for the Annual Meeting of
Stockholders of the Company to be held January 25, 2001 and is incorporated
herein by reference.


ITEM 11. EXECUTIVE COMPENSATION.

Information relating to Executive Compensation is set forth under the caption 
"Executive Compensation" on pages 9 through 17 of the Proxy Statement for the 
Annual Meeting of Stockholders of the Company to be held January 25, 2001 and 
is incorporated herein by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information relating to Security Ownership of Certain Beneficial Owners and 
Management is set forth under the caption "Security Ownership of Certain 
Beneficial Owners and Management" on pages 20 and 21 of the Company's Proxy 
Statement for the Annual Meeting of Stockholders of the Company to be held 
January 25, 2001 and is incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information relating to Certain Relationships and Related Transactions is set 
forth under the caption "Certain Relationships and Transactions" of the Proxy 
Statement for the Annual Meeting of Stockholders of the Company to be held 
January 25, 2001 on pages 21 and 22 and is incorporated herein by reference.


PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)  1.   Financial Statements

          The following consolidated financial statements are incorporated 
herein by reference to the 2000 Annual Report to Stockholders of the Company in 
response to Item 8 thereof:

          (i)    Independent Auditors' Report;

          (ii)   Consolidated Balance Sheets as of September 30, 2000 and 1999;

          (iii)  Consolidated Statements of Operations for Fiscal Years Ended 
                 September 30, 2000, 1999 and 1998;

          (iv)   Consolidated Statements of Changes in Stockholders' Equity for 
                 Fiscal Years Ended September 30, 2000, 1999 and 1998;

          (v)    Consolidated Statements of Cash Flows for Fiscal Years Ended 
                 September 30, 2000, 1999 and 1998;

          (vi)   Notes to Consolidated Financial Statements.

     2.   Financial Statement Schedule

          II.    Valuation and qualifying accounts

          Schedules not listed above have been omitted because the information
          required is not applicable or is shown in the financial statements or
          notes thereto.

                                       6

<PAGE>   7
3.   Exhibits


<TABLE>
<CAPTION>
EXHIBIT
NUMBER                        DESCRIPTION OF DOCUMENT
--------------------------------------------------------------------------------
<S>           <C>
3.1a           Amended and Restated Certificate of Incorporation

3.1b(6)        Certificate of Designation, Preferences and Rights of Series A
               Junior Participating Preferred Stock and Series B Junior
               Participating Preferred Stock of the Company, effective March 1,
               2000

3.2            Amended Bylaws, as amended through April 14, 2000

4.1(1)         Form of Certificate for Common Stock, Class A

4.2(4)         Form of Certificate for Common Stock, Class B

4.3(6)         Rights Agreement, dated as of February 10, 2000, between the
               Company and Bank Boston N.A., as Rights Agent, with related
               exhibits

4.4a(8)        Credit Agreement dated July 16, 1999 by and among the Company and
               certain financial institutions, including Chase Manhattan Bank in
               its capacity as a lender and as agent for the lenders

4.4b(9)        Amendment No. 1, dated as of February 25, 2000 in respect of the
               Credit Agreement dated as of July 16, 1999

10.1(1)        Form of Indemnification Agreement

10.2a(10)      Securities Purchase Agreement dated as of March 21, 2000 between
               Gartner Group, Inc., Silver Lake Partners, L.P., Silver Lake
               Technology Investors, L.L.C. and other parties thereto.

10.2b(10)      Amendment to the Securities Purchase Agreement dated as of April
               17, 2000 between Gartner Group, Inc., Silver Lake Partners, L.P.,
               Silver Lake Technology Investors, L.L.C. and the other parties
               thereto.

10.2c(10)      Form of 6% Convertible Junior Subordinated Promissory Note due
               April 17, 2005

10.2d(10)      Securityholders Agreement dated as of April 17, 2000 among
               Gartner Group, Inc., Silver Lake Partners, L.P. and the other
               parties thereto.

10.3(1)        Amended and Restated Registration Rights Agreement dated March
               19, 1993 among the Company, Dun & Bradstreet Corporation and D&B
               Enterprises, Inc.

10.4a(2)       Lease dated December 29, 1994 between Soundview Farms and the
               Company related to premises at 56 Top Gallant Road, 70 Gatehouse
               Road, and 88 Gatehouse Road, Stamford, Connecticut

10.4b(5)       Lease dated May 16, 1997 by and between Soundview Farms and the
               Company related to premises at 56 Top Gallant Road, 70 Gatehouse
               Road, 88 Gatehouse Road and 10 Signal Road, Stamford, Connecticut
               (amendment to lease dated December 29, 1994, see exhibit 10.4a)

10.5(1)*       Long Term Incentive Plan (Tenure Plan), including form of
               Employee Stock Purchase Agreement

10.6(5)*       1991 Stock Option Plan, as amended and restated on October 12,
               1999

10.7*          1993 Director Stock Option Plan as amended and restated on April
               14, 2000

10.8(1)*       Employee Stock Purchase Plan

10.9(5)*       1994 Long Term Stock Option Plan, as amended and restated on
               October 12, 1999
 
10.10(1)       Commitment Letter dated July 16, 1993 from The Bank of New York

10.11(1)       Indemnification Agreement dated April 16, 1993 by and among the
               Company, Cognizant (as successor to the Dun & Bradstreet
               Corporation) and the Information Partners Capital Fund

10.12(5)*      1998 Long Term Stock Option Plan, as amended and restated on
               October 12, 1999

10.13(3)       Commitment Letter dated September 30, 1996 from Chase Manhattan
               Bank

10.14(5)*      1996 Long Term Stock Option Plan, as amended and restated on
               October 12, 1999

10.15(5)*      Employment Agreement between Manuel A. Fernandez and Gartner
               Group, Inc. as of November 12, 1998 
</TABLE>


                                       7

<PAGE>   8
  
       10.15*      Addendum No. 1 to Employment Agreement between Manual A. 
                   Fernandez and Gartner Group, Inc. as of April 14, 2000.
  
       10.16(9)*   Employment Agreement between Michael D. Fleisher and Gartner
                   Group, Inc. as of November 1, 1999.
  
       10.17*      Employment Agreement between Regina M. Paolillo and Gartner 
                   Group, Inc. as of July 1, 2000.
  
       10.18(6)*   Employment Agreement between William R. McDermott and Gartner
                   Group, Inc. dated as of August 7, 2000
  
       10.19*      Employment Agreement between Robert E. Knapp and Gartner 
                   Group, Inc. dated as of August 7, 2000
  
       13.1        Annual report to stockholders
  
       21.1        Subsidiaries of Registrant
  
       23.1        Independent Auditors' Report on Financial Statement Schedule
  
       23.2        Independent Auditors' Consent
  
       24.1        Power of Attorney (see Signature Page)
  
       27.1        Financial Data Schedules
  
       * Management compensation plan or arrangement.
  
       -----------------
       (1) Incorporated by reference from the Company's Registration Statement 
           on Form S-1 (File No. 33-67576), as amended, effective October 4, 
           1993.
  
       (2) Incorporated by reference from the Company's Annual Report on Form 
           10-K as filed on December 21, 1995.
  
       (3) Incorporated by reference from the Company's Annual Report on Form 
           10-K as filed on December 17, 1996.
  
       (4) Incorporated by reference from the Company's Registration Statement 
           on Form 8-A as filed on July 7, 1999.
  
       (5) Incorporated by reference from the Company's Annual Report on Form 
           10-K filed on December 22, 1999.
  
       (6) Incorporated by reference from the Company's Quarterly Report on Form
           10-Q as filed on August 14, 2000.
  
       (7) Incorporated by reference from the Company's Form 8-K dated February 
           9, 2000 as filed on March 7, 2000.
  
       (8) Incorporated by reference from the Company's Tender Offer Statement 
           on Schedule 13E-4 as filed on July 27, 1999.
  
       (9) Incorporated by reference from the Company's Quarterly Report on Form
           10-Q as filed on May 12, 2000.
  
      (10) Incorporated by reference from the Company's Form 8-K dated April 17,
           2000 as filed on April 25, 2000.
  
  (b) Reports on Form 8-K

      No reports on Form 8-K were filed by the Company during the fiscal quarter
      ended September 30, 2000.
     


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange 
Act of 1934, the registrant has caused this report to be signed on its behalf 
by the undersigned, thereunto duly authorized, on December 29, 2000.

                                             GARTNER GROUP, INC.

                                             By: /s/ MICHAEL D. FLEISHER
                                                 -------------------------------
                                                 Michael D. Fleisher
                                                 Chief Executive Officer

                                       8

<PAGE>   9
                               POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Michael D.
Fleisher and Regina M. Paolillo and each of them acting individually, as his or
her attorney-in-fact, each with full power of substitution, for him or her in
any and all capacities, to sign any and all amendments to this Report on Form
10-K, and to file the same, with appropriate exhibits and other related
documents, with the Securities and Exchange Commission. Each of the undersigned
ratifies and confirms his or her signatures as they may be signed by his or her
attorney to any and all amendments to said Report.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:


<TABLE>
<CAPTION>
         NAME                               TITLE                               DATE
<S>                           <C>                                               <C>
/s/ MICHAEL D. FLEISHER           Director and Chief Executive Officer              December 29, 2000
-----------------------               (Principal Executive Officer)
    Michael D. Fleisher

/s/ REGINA M. PAOLILLO             Executive Vice President, Corporate              December 29, 2000
----------------------            Services and Chief Financial Officer
    Regina M. Paolillo        (Principal Financial and Accounting Officer)

/s/ MANUEL A. FERNANDEZ              Director, Chairman of the Board                December 29, 2000
-----------------------
    Manuel A. Fernandez

/s/ ANNE SUTHERLAND FUCHS                      Director                             December 29, 2000
-------------------------
    Anne Sutherland Fuchs

/s/ WILLIAM O. GRABE                           Director                             December 29, 2000
--------------------
    William O. Grabe

/s/ MAX D. HOPPER                              Director                             December 29, 2000
-------------------------
    Max D. Hopper

/s/ GLENN H. HUTCHINS                          Director                             December 29, 2000
-------------------------
    Glenn H. Hutchins

/s/ ROGER B. McNAMEE                           Director                              December 29, 2000
-------------------------
    Roger B. McNamee

/s/ STEPHEN G. PAGLIUCA                        Director                              December 29, 2000
-------------------------
    Stephen G. Pagliuca

/s/ KENNETH ROMAN                              Director                              December 29, 2000
-------------------------
    Kenneth Roman

/s/ DENNIS G. SISCO                            Director                              December 29, 2000
-------------------------
    Dennis G. Sisco

</TABLE>


                                       9

<PAGE>   10
                                           GARTNER GROUP, INC.
                           SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                                       (all amounts in thousands)
 

<TABLE>

<CAPTION>

                                     Additions    Additions
                       Balance at    Charged to   Charged to     Deductions    Deductions    
                       Beginning     Costs and    Other          from          for Sale of    Balance at
                       of Year       Expenses     Accounts(1)    Reserve(2)    Business       End of Year
                     -----------------------------------------------------------------------------------------------------   
<S>                    <C>          <C>          <C>          <C>          <C>            <C>
YEAR ENDED
SEPTEMBER 30, 1998
Allowance for 
 doubtful accounts
 and returns and
 allowances..........   $5,340      $4,051       $ -           $3,564       $1,702         $4,125
                      -----------------------------------------------------------------------------------------------------   
YEAR ENDED
SEPTEMBER 30, 1999
Allowance for 
 doubtful accounts
 and returns and 
 allowances..........   $4,125      $5,128       $274          $4,589       $ -            $4,938
                      -----------------------------------------------------------------------------------------------------   
YEAR ENDED
SEPTEMBER 30, 2000
Allowance for 
 doubtful accounts
 and returns and 
 allowances..........   $4,938      $4,256       $ 46          $4,236       $ -            $5,004
                      -----------------------------------------------------------------------------------------------------   


</TABLE>


(1)  Allowances of $46 and $274 recorded upon acquisitions of entities in years 
     ended September 30, 2000 and 1999, respectively.

(2)  Amounts written off.

                                       10


<PAGE>   11



                                EXHIBIT INDEX



<TABLE>
<CAPTION>
EXHIBIT
NUMBER                        DESCRIPTION OF DOCUMENT
--------------------------------------------------------------------------------
<S>           <C>
3.1a           Amended and Restated Certificate of Incorporation

3.1b(6)        Certificate of Designation, Preferences and Rights of Series A
               Junior Participating Preferred Stock and Series B Junior
               Participating Preferred Stock of the Company, effective March 1,
               2000

3.2            Amended Bylaws, as amended through April 14, 2000

4.1(1)         Form of Certificate for Common Stock, Class A

4.2(4)         Form of Certificate for Common Stock, Class B

4.3(6)         Rights Agreement, dated as of February 10, 2000, between the
               Company and Bank Boston N.A., as Rights Agent, with related
               exhibits

4.4a(8)        Credit Agreement dated July 16, 1999 by and among the Company and
               certain financial institutions, including Chase Manhattan Bank in
               its capacity as a lender and as agent for the lenders

4.4b(9)        Amendment No. 1, dated as of February 25, 2000 in respect of the
               Credit Agreement dated as of July 16, 1999

10.1(1)        Form of Indemnification Agreement

10.2a(10)      Securities Purchase Agreement dated as of March 21, 2000 between
               Gartner Group, Inc., Silver Lake Partners, L.P., Silver Lake
               Technology Investors, L.L.C. and other parties thereto.

10.2b(10)      Amendment to the Securities Purchase Agreement dated as of April
               17, 2000 between Gartner Group, Inc., Silver Lake Partners, L.P.,
               Silver Lake Technology Investors, L.L.C. and the other parties
               thereto.

10.2c(10)      Form of 6% Convertible Junior Subordinated Promissory Note due
               April 17, 2005

10.2d(10)      Securityholders Agreement dated as of April 17, 2000 among
               Gartner Group, Inc., Silver Lake Partners, L.P. and the other
               parties thereto.

10.3(1)        Amended and Restated Registration Rights Agreement dated March
               19, 1993 among the Company, Dun & Bradstreet Corporation and D&B
               Enterprises, Inc.

10.4a(2)       Lease dated December 29, 1994 between Soundview Farms and the
               Company related to premises at 56 Top Gallant Road, 70 Gatehouse
               Road, and 88 Gatehouse Road, Stamford, Connecticut

10.4b(5)       Lease dated May 16, 1997 by and between Soundview Farms and the
               Company related to premises at 56 Top Gallant Road, 70 Gatehouse
               Road, 88 Gatehouse Road and 10 Signal Road, Stamford, Connecticut
               (amendment to lease dated December 29, 1994, see exhibit 10.4a)

10.5(1)*       Long Term Incentive Plan (Tenure Plan), including form of
               Employee Stock Purchase Agreement

10.6(5)*       1991 Stock Option Plan, as amended and restated on October 12,
               1999

10.7*          1993 Director Stock Option Plan as amended and restated on April
               14, 2000

10.8(1)*       Employee Stock Purchase Plan

10.9(5)*       1994 Long Term Stock Option Plan, as amended and restated on
               October 12, 1999
 
10.10(1)       Commitment Letter dated July 16, 1993 from The Bank of New York

10.11(1)       Indemnification Agreement dated April 16, 1993 by and among the
               Company, Cognizant (as successor to the Dun & Bradstreet
               Corporation) and the Information Partners Capital Fund

10.12(5)*      1998 Long Term Stock Option Plan, as amended and restated on
               October 12, 1999

10.13(3)       Commitment Letter dated September 30, 1996 from Chase Manhattan
               Bank

10.14(5)*      1996 Long Term Stock Option Plan, as amended and restated on
               October 12, 1999

10.15(5)*      Employment Agreement between Manuel A. Fernandez and Gartner
               Group, Inc. as of November 12, 1998 
</TABLE>




<PAGE>   12
  
       10.15*      Addendum No. 1 to Employment Agreement between Manual A. 
                   Fernandez and Gartner Group, Inc. as of April 14, 2000.
  
       10.16(9)*   Employment Agreement between Michael D. Fleisher and Gartner
                   Group, Inc. as of November 1, 1999.
  
       10.17*      Employment Agreement between Regina M. Paolillo and Gartner 
                   Group, Inc. as of July 1, 2000.
  
       10.18(6)*   Employment Agreement between William R. McDermott and Gartner
                   Group, Inc. dated as of August 7, 2000
  
       10.19*      Employment Agreement between Robert E. Knapp and Gartner 
                   Group, Inc. dated as of August 7, 2000
  
       13.1        Annual report to stockholders
  
       21.1        Subsidiaries of Registrant
  
       23.1        Independent Auditors' Report on Financial Statement Schedule
  
       23.2        Independent Auditors' Consent
  
       24.1        Power of Attorney (see Signature Page)
  
       27.1        Financial Data Schedules
  
       * Management compensation plan or arrangement.
  
       -----------------
       (1) Incorporated by reference from the Company's Registration Statement 
           on Form S-1 (File No. 33-67576), as amended, effective October 4, 
           1993.
  
       (2) Incorporated by reference from the Company's Annual Report on Form 
           10-K as filed on December 21, 1995.
  
       (3) Incorporated by reference from the Company's Annual Report on Form 
           10-K as filed on December 17, 1996.
  
       (4) Incorporated by reference from the Company's Registration Statement 
           on Form 8-A as filed on July 7, 1999.
  
       (5) Incorporated by reference from the Company's Annual Report on Form 
           10-K filed on December 22, 1999.
  
       (6) Incorporated by reference from the Company's Quarterly Report on Form
           10-Q as filed on August 14, 2000.
  
       (7) Incorporated by reference from the Company's Form 8-K dated February 
           9, 2000 as filed on March 7, 2000.
  
       (8) Incorporated by reference from the Company's Tender Offer Statement 
           on Schedule 13E-4 as filed on July 27, 1999.
  
       (9) Incorporated by reference from the Company's Quarterly Report on Form
           10-Q as filed on May 12, 2000.
  
      (10) Incorporated by reference from the Company's Form 8-K dated April 17,
           2000 as filed on April 25, 2000.
  






<PAGE>   1
Exhibit 3.1a


                                    RESTATED
                          CERTIFICATE OF INCORPORATION
                             OF GARTNER GROUP, INC.
                             a Delaware corporation
                    (originally incorporated on June 1, 1990
                   under the name "GGI Holding Corporation")



         This Restated Certificate of Incorporation has been duly adopted by the
Corporation's Board of Directors and Stockholders in accordance with the
applicable provisions of Section 242 and 245 of the General Corporation Law of
the State of Delaware.

                                    ARTICLE I

         The name of the corporation is Gartner Group, Inc. (the "Corporation").

                                   ARTICLE II

         The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.

                                   ARTICLE III

         The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.

                                   ARTICLE IV

         1. Authorized Stock. This corporation is authorized to issue two
classes of stock to be designated, respectively, "common stock" and "preferred
stock." The total number of shares which this corporation is authorized to issue

is two hundred fifty-five million (255,000,000) shares. Two hundred fifty
million (250,000,000) shares shall be designated common stock (the "Common
Stock"), of which one hundred sixty-six million (166,000,000) shares shall be
designated Common Stock, Class A (the "Class A Common Stock") and eighty-four
million (84,000,000) shares shall be designated Common Stock, Class B (the
"Class B Common Stock"). Five million (5,000,000 shares) shall be designated
preferred stock (the "Preferred Stock"), all of which are presently undesignated
as to series.

         Each share of Preferred Stock shall have a par value of $0.01 and each
share of Common Stock shall have a par value of $0.0005.

         2. Common Stock. The Class A Common Stock and the Class B Common Stock
shall be

<PAGE>   2
identical in all respects, except as otherwise expressly provided
herein, and the relative powers, preferences, rights, qualifications,
limitations and restrictions of the shares of Class A Common Stock and Class B
Common Stock shall be as follows:

         (a) Cash or Property Dividends. Subject to the rights and preferences
of the Preferred Stock as set forth in any resolution or resolutions of the
Board of Directors providing for the issuance of such stock pursuant to this
Article IV, and except as otherwise provided for herein, the holders of Class A
Common Stock and Class B Common Stock are entitled to receive dividends out of
assets legally available therefor at such times and in such per share amounts as
the Board of Directors may from time to time determine; provided that whenever a
cash dividend is paid, the same amount shall be paid in respect of each
outstanding share of Class A Common Stock and Class B Common Stock.

         (b) Stock Dividends. If at any time a dividend is to be paid in shares
of Class A Common Stock or shares of Class B Common Stock (a "stock dividend"),
such stock dividend may be declared and paid only as follows: only Class A
Common Stock may be paid to holders of Class A Common Stock and only Class B
Common Stock may be paid to holders of Class B Common Stock, and whenever a
stock dividend is paid, the same rate or ratio of shares shall be paid in
respect of each outstanding share of Class A Common Stock and Class B Common
Stock.

         (c) Stock Subdivisions and Combinations. The Corporation shall not
subdivide, reclassify or combine stock of either class of Common Stock without
at the same time making a proportionate subdivision or combination of the other
class.

         (d) Voting. Voting power shall be divided between the classes and
series of stock as follows:

         (i) With respect to the election of directors, holders of Class A
Common Stock and holders of Voting Preferred Stock (as defined below), voting
together, shall be entitled to elect that number of directors which constitutes
20% of the authorized number of members of the Board of Directors (or, if such
20% is not a whole number, then the nearest lower whole number of directors that
is closest to 20% of such membership) (the "Class A Directors"). Each share of
Class A Common Stock shall have one vote in the election of the Class A
Directors and each share of Voting Preferred Stock shall have a number of votes
in the election of the Class A Directors as specified in the resolution of the
Board of Directors authorizing such Voting Preferred Stock. Holders of Class B
Common Stock shall be entitled to elect the remaining directors (the "Class B
Directors"). Each share of Class B Common Stock shall have one vote in the
election of such directors. For purposes of this Section (2)(d) and Section
(2)(e) of this Article IV, references to the authorized number of members of the
Board of Directors (or the remaining directors) shall not include any directors
which the holders of any shares of Preferred Stock may have the right to elect
upon the failure of the Corporation to pay regular dividends on such Preferred
Stock as and when due for a specified period of time. For purposes of this
Section (2)(d), "Special Voting Rights" means the different voting rights of the
holders of Class A Common Stock, holders of Class B Common Stock and holders of
Voting Preferred Stock with respect to the election of the applicable percentage
of the authorized number of members of the Board of Directors as described in
this Section (2)(d)(i). "Voting Preferred Stock" means shares of each series of
Preferred Stock upon which the right to vote for directors has been conferred in
accordance with Section (3) of this Article IV, except for any right to elect
directors which may be provided upon the failure of the Corporation to pay
regular dividends on such Preferred Stock as and when due for a specified period
of time.

<PAGE>   3
         (ii) Subject to the last sentence of this Section (2)(d)(ii),
notwithstanding anything to the contrary contained in Section 2(d)(i) of this
Article IV, for so long as any person or entity or group of persons or entities
acting in concert beneficially own 15% or more of the outstanding shares of
Class B Common Stock, then in any election of directors or other exercise of
voting rights with respect to the election or removal of directors, such person,
entity or group shall only be entitled to vote (or otherwise exercise voting
rights with respect to) a number of shares of Class B Common Stock that
constitutes a percentage of the total number of shares of Class B Common Stock
then outstanding which is less than or equal to such person, entity or group's
Entitled Voting Percentage. For the purposes hereof, a person, entity or group's
"Entitled Voting Percentage" at any time shall mean the percentage at such time
of the then outstanding shares of Class A Common Stock beneficially owned by
such person, entity or group. For purposes of this Section (2)(d)(ii), a
"beneficial owner" of Common Stock includes any person or entity or group of
persons or entities who, directly or indirectly, including through any contract,
arrangement, understanding, relationship or otherwise, written or oral, formal
or informal, control the voting power (which includes the power to vote or to
direct the voting) of such Common Stock. The provisions of this Section
(2)(d)(ii) shall be effective only following (A) the distribution by IMS Health
Incorporated ("IMS HEALTH") to its stockholders of all of the Class B Common
Stock owned by it, (B) the receipt of a private letter ruling from the Internal
Revenue Service (the "IRS") to the effect that the terms of this Section
(2)(d)(ii) will not have any adverse effect on the private letter ruling issued
by the IRS to IMS Health on April 14, 1999 and any other private letter ruling
issued by the IRS to IMS Health or any predecessor or former parent of IMS
Health and (C) the approval of the terms of this Section (2)(d)(ii) by the New
York Stock Exchange, Inc. or any other national securities exchange or automated
quotation service on which the Common Stock is then listed or admitted for
trading.

         (iii) Any Class A Director may be removed only for cause, by a vote of
a majority of the votes held by the holders of Class A Common Stock and holders
of Voting Preferred Stock, voting together as a class. Any Class B Director may
be removed only for cause, by a vote of a majority of the votes held by the
holders of Class B Common Stock, voting separately as a class.

         (iv) Except as otherwise specified herein, the holders of Class A
Common Stock and holders of Class B Common Stock (A) shall in all matters not
otherwise specified in this Section (2)(d) of this Article IV vote together
(including, without limitation, with respect to increases or decreases in the
authorized number of shares of any class of Common Stock), with each share of
Class A Common Stock and Class B Common Stock having one vote, and (B) shall be
entitled to vote as separate classes only when required by law to do so under
mandatory statutory provisions that may not be excluded or overridden by a
provision in the Certificate of Incorporation or as provided herein.

         (v) Except as set forth in this Section (2)(d) of this Article IV, the
holders of Class A Common Stock shall have exclusive voting power (except for
any voting powers of any Preferred Stock) on all matters at any time when no
Class B Common Stock is issued and outstanding, and the holders of Class B
Common Stock shall have exclusive voting power (except for any voting powers of
any Preferred Stock) on all matters at any time when no Class A Common Stock is
issued and outstanding.

         (e) Vacancies; Increase or Decreases in Size of the Board of Directors.
Any vacancy in the

<PAGE>   4
office of a director created by the death, resignation or removal of a director
elected by (or appointed on behalf of) the holders of the Class B Common Stock
or the holders of the Class A Common Stock and Voting Preferred Stock voting
together as a class, as the case may be, may be filled by the vote of the
majority of the directors (or the sole remaining director) elected by (or
appointed on behalf of) such holders of Class B Common Stock or Class A Common
Stock and Voting Preferred Stock (or on behalf of whom that director was
appointed), as the case may be, whose death, resignation or removal created the
vacancy, unless there are no such directors, in which case such vacancy may be
filled by the vote of the majority of the directors or by the sole remaining
director, regardless, in each instance, of any quorum requirements set out in
the By-laws. Any director elected by some or all of the directors to fill a
vacancy shall hold office for the remainder of the full term of the director
whose vacancy is being filled and until such director's successor shall have
been elected and qualified unless removed and replaced pursuant to Section
(2)(d)(iii) of this Article IV and this Section (2)(e). All newly-created
directorships resulting from an increase in the authorized number of directors
shall be allocated between Class A Directors and Class B Directors such that at
all times the number of directorships reserved for Class A Directors shall be
20% of the authorized number of members of the Board of Directors (or, if such
20% is not a whole number, then the nearest lower whole number of directors that
is closest to 20% of such membership) and the remaining directorships are
reserved for Class B Directors. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director. If the number of directors is changed, any increase or decrease shall
be apportioned among the classes of directors established pursuant to Article V
so as to maintain the number of directors in each class as nearly equal as
possible.

         (f) Merger or Consolidation. In case of any consolidation of the
Corporation with one or more other corporations or a merger of the Corporation
with another corporation, each holder of a share of Class A Common Stock shall
be entitled to receive with respect to such share the same kind and amount of
shares of stock and other securities and property (including cash) receivable
upon such consolidation or merger by a holder of a share of Class B Common
Stock, and each holder of a share of Class B Common Stock shall be entitled to
receive with respect to such share the same kind and amount of shares of stock
and other securities and property (including cash) receivable upon such
consolidation or merger by a holder of a share of Class A Common Stock; provided
that, in any such transaction, the holders of shares of Class A Common Stock and
the holders of shares of Class B Common Stock may receive different kinds of
shares of stock if the only difference in such shares is the inclusion of voting
rights which continue the Special Voting Rights.

         (g) Liquidation. In the event of any liquidation, dissolution or
winding up of the Corporation, the holders of the Class A Common Stock and Class
B Common Stock shall participate equally per share in any distribution to
stockholders, without distinction between classes.

         3. Preferred Stock. Any Preferred Stock not previously designated as to
series may be issued from time to time in one or more series pursuant to a
resolution or resolutions providing for such issue duly adopted by the Board of
Directors (authority to do so being hereby expressly vested in the Board), and
such resolution or resolutions shall also set forth the voting powers, full or
limited or none, of each such series of Preferred Stock and shall fix the
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions of each such series of
Preferred Stock. The Board of Directors is authorized to alter the designation,
rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock and, within the limits and
restrictions stated in any resolution or resolutions of the

<PAGE>   5
Board of Directors originally fixing the number of shares constituting any
series of Preferred Stock, to increase or decrease (but not below the number of
shares of any such series then outstanding) the number of shares of any such
series subsequent to the issue of shares of that series.

         Each share of Preferred Stock issued by the Corporation, if reacquired
by the Corporation (whether by redemption, repurchase, conversion to Common
Stock or other means), shall upon such reacquisition resume the status of
authorized and unissued shares of Preferred Stock, undesignated as to series and
available for designation and issuance by the Corporation in accordance with the
immediately preceding paragraph.

                                    ARTICLE V

         The directors, other than those who may be elected solely by the
holders of any class or series of Preferred Stock, if any, shall be classified,
with respect to the time for which they severally hold office, into three
classes, as nearly equal in number as possible, as determined by the Board of
Directors, one class ("Class I") To hold office initially for a term expiring at
the first annual meeting of stockholders to be held after the date this Article
V becomes effective (the "Classified Board Effective Date"), another class
("Class II") to hold office initially for a term expiring at the second annual
meeting of stockholders to be held after the Classified Board Effective Date,
and another class ("Class III") to hold office initially for a term expiring at
the third annual meeting of stockholders to be held after the Classified Board
Effective Date, with the members of each class to hold office until their
successors are elected and qualified. Directors elected by a class or series of
stock, or if applicable, classes or series of stock voting together, shall be
divided as evenly as possible, and shall be allocated by the Board of Directors,
among Class I, Class II and Class III. At each annual meeting of stockholders,
the successors of the class of directors whose term expires at that meeting
shall be elected to hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their election.

                                   ARTICLE VI

         In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized to
make, alter or repeal the by-laws of the Corporation.

                                   ARTICLE VII

         Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in the by-laws
of the Corporation. Election of directors need not be by written ballot unless
the by-laws of the Corporation so provide.

                                  ARTICLE VIII

         To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
the Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director. Any repeal or
modification of this Article VIII shall not adversely affect any right or
protection of a

<PAGE>   6
director of the Corporation existing at the time of such repeal or modification.

                                   ARTICLE IX

         The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate in the manner now or
hereafter prescribed herein and by the laws of the State of Delaware, and all
rights conferred upon stockholders herein are granted subject to this
reservation.

         IN WITNESS WHEREOF, the undersigned has executed this certificate on
July 16, 1999.


                                        GARTNER GROUP, INC.


                                        By:
                                                 Michael D. Fleisher
                                                 Executive Vice President and
                                                 Chief Financial Officer



<PAGE>   1

                                     BY-LAWS
                                       OF
                               GARTNER GROUP, INC.
                             A Delaware Corporation
                       (as amended through April 14, 2000)

                                    ARTICLE I
                                     OFFICES

         Section 1. Registered Office. The registered office of the corporation
in the State of Delaware shall be located in the City of Dover, County of Kent
at such location as the Board of Directors may determine from time to time.

         Section 2. Other Offices. The corporation may also have offices at such
other places, both within and without the state of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.


                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year at such price as shall be determined by the
board of directors of the corporation, for the purpose of electing directors
and, conducting such other proper business as may come before the meeting. The
date, time and place of the annual meeting shall be determined by the board.

         Section 2. Special Meetings. Special meetings of stockholders may be
called for any purpose and may be held at such time and place, within or without
the State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice
 thereof. Such meetings may be called at any time by
the board of directors or the president. No business may be transacted at any
special meeting otherwise than as specified in the notice to stockholders of
such meeting.

         Section 3. Place of Meetings. The board of directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal executive office of the
corporation.

         Section 4. Notice. Whenever stockholders are required or permitted to
take action at a meeting, written or printed notice stating the place, date,
time, and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting not
less than 10 nor more than 60 days before the date of the meeting. All such
notices shall be delivered, either personally or by mail, by or at the direction
of the board of directors, the president or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
postage prepaid, addressed to the stockholder at his, her or its address as



                                        1

<PAGE>   2
the same appears on the records of the corporation. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.

         Section 5. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, showing the address of each stockholder
and the class and number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

         Section 6. Quorum. The holders of a majority of the outstanding shares
of capital stock, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the certificate of incorporation. If a quorum is not present, the
holders of a majority of the shares present in person or represented by proxy at
the meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place.

         Section 7. Adjourned Meetings. When a meeting is adjourned to another
time and place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.

         Section 8. Vote Required. When a quorum is present, the affirmative
vote of the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. Where a separate vote by class is required, the
affirmative vote of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class.

         Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the certificate of incorporation
of the corporation or any amendments thereto and subject to Section 3 of Article
VI hereof, every stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of common stock held
by



                                       2

<PAGE>   3
such stockholder. The holders of preferred stock will be entitled to vote as
provided by law and by the corporation's certificate of incorporation or any
amendments thereto.

         Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally. Any proxy is suspended when the person
executing the proxy is present at a meeting of stockholders and elects to vote,
except that when such proxy is coupled with an interest and the fact of the
interest appears on the face of the proxy, the agent named in the proxy shall
have all voting and other rights referred to in the proxy, notwithstanding the
presence of the person executing the proxy. At each meeting of the stockholders,
and before any voting commences, all proxies filed at or before the meeting
shall be submitted to and examined by the secretary or a person designated by
the secretary, and no shares may be represented or voted under a proxy that has
been found to be invalid or irregular.

         Section 11. Action by Written Consent. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing the dates of
signatures of the stockholders who signed the consent or consents, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the state of Delaware, or the corporation's principal place of business, or an
officer or agent of the corporation having custody of the book or books in which
proceedings of meetings of the stockholders are recorded. Delivery made to the
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. All consents properly delivered in accordance
with this section shall be deemed to be recorded when so delivered. No written
consent shall be effective to take the corporate action referred to therein
unless, within sixty (60) days of the earliest dated consent delivered to the
corporation as required by this section, written consents signed by the holders
of a sufficient number of shares to take such corporate action are so recorded.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. Any action taken pursuant to such written consent or
consents of the stockholders shall have the same force and effect as if taken by
the stockholders at a meeting thereof.

         Section 12. Advance Notice of Stockholder Nominees and Stockholder
Business. To be properly brought before an annual meeting or special meeting,
nominations for the election of director or other business must be (a) specified
in the notice of meeting (or any supplement thereto)




                                       3

<PAGE>   4
given by or at the direction of the board of directors, (b) otherwise properly
brought before the meeting by or at the direction of the board of directors, or
(c) otherwise properly brought before the meeting by a stockholder. For such
nominations or other business to be considered properly brought before the
meeting by a stockholder, such stockholder must have given timely notice and in
proper form of his intent to bring such business before such meeting. To be
timely, such stockholder's notice must be delivered or mailed to and received by
the secretary of the corporation not less than 90 days prior to the meeting;
provided, however, that in the event that less than 100 days notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. To be in
proper form, a stockholder's notice to the secretary shall set forth:

             (i) the name and address of the stockholder who intends to make the
         nominations or propose the business, and, as the case may be, the name
         and address of the person or persons to be nominated or the nature of
         the business to be proposed;

             (ii) a representation that the stockholder is a holder of record of
         stock of the corporation entitled to vote at such meeting and, if
         applicable, intends to appear in person or by proxy at the meeting to
         nominate the person or persons specified in the notice or introduce the
         business specified in the notice;

            (iii) if applicable, a description of all arrangements or
         understandings between the stockholder and each nominee and any other
         person or persons (naming such person or persons) pursuant to which the
         nomination or nominations are to be made by the stockholder;

             (iv) such other information regarding each nominee or each matter
         of business to be proposed by such stockholder as would be required to
         be included in a proxy statement filed pursuant to the proxy rules of
         the Securities and Exchange Commission had the nominee been nominated,
         or intended to be nominated, or the matter been proposed, or intended
         to be proposed by the board of directors; and

             (v) if applicable, the consent of each nominee to serve as director
         of the corporation if so elected.

         The chairman of the meeting may refuse to acknowledge the nomination of
any person or the proposal of any business not made in compliance with the
foregoing procedure.


                                   ARTICLE III
                               BOARD OF DIRECTORS

         Section 1. General Powers. The business and affairs of the corporation
shall be managed by or under the direction of the board of directors.



                                       4

<PAGE>   5
         Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the board of directors shall be ten (10). The number of
directors may be changed from time to time by resolution of the board of
directors or the stockholders, although in no event shall the number of
directors be less than five (5) for so long as the Special Voting Rights (as
defined in Article IV, Section (2)(d)(i) of the Certificate of Incorporation)
shall be in effect. Each director shall be elected by a plurality of the votes
of the shares of one or more class or classes or series of stock (as provided in
the Certificate of Incorporation), as the case may be, entitled to vote for such
director that are present in person or represented by proxy at the annual
meeting of stockholders. At each annual meeting of the stockholders, the
stockholders shall elect the successors of the class of directors whose terms
expire at such meeting, to hold office until their successors are duly elected
and qualified at the third annual meeting of stockholders following the year of
their election or until their earlier death, resignation or removal as herein or
in the Certificate of Incorporation provided. The directors shall be elected in
this manner, except as provided in Section 4 of this Article III and the
Certificate of Incorporation.

         Section 3. Removal and Resignation. Any director or the entire board of
directors may be removed at any time, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors.
Whenever the holders of any class or series are entitled to elect one or more
directors by the provisions of the corporation's certificate of incorporation,
the provisions of this section shall apply, in respect to the removal without
cause of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Any director may resign at any time upon written
notice to the corporation.

         Section 4. Vacancies. Vacancies resulting from newly created
directorships resulting from an increase in the authorized number of directors
and vacancies resulting from the death, resignation or removal of a director
elected by (or appointed on behalf of) the holders of one or more class or
classes or series of stock (as provided in the Certificate of Incorporation),
voting together as a class, as the case may be, shall be filled by the vote of
the majority of the directors (or the sole remaining director) elected by (or
appointed on behalf of) such holders of one or more class or classes or series
of stock (as provided in the Certificate of Incorporation) (or on whose behalf
the director was appointed), as the case may be, whose death, resignation or
removal created the vacancy, or to which the newly-created directorship has been
allocated. Each director so chosen shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as provided herein.

         Section 5. Annual Meetings. The annual meeting of the board of
directors shall be held without other notice than this by-law immediately after,
and at the same place as, the annual meeting of stockholders.

         Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at the
request of the president or any two directors on at least 48 hours notice to
each director, either personally, by telephone, by mail or by telegraph.

         Section 7. Quorum, Required Vote and Adjournment. A majority of the
total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of




                                       5

<PAGE>   6
directors present at a meeting at which a quorum is present shall be the act of
the board of directors. If a quorum shall not be present at any meeting of the
board of directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.

         Section 8. Committees. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation, which
to the extent provided in such resolution or these by-laws shall have and may
exercise the powers of the board of directors in the management and affairs of
the corporation except as otherwise limited by law. The board of directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep regular minutes of its meetings and report the same to the board of
directors when required.

         Section 9. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by a resolution of the board of
directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. In the event that a member and that
member's alternate, if alternates are designated by the board of directors as
provided in Section 8 of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in place of any such absent or disqualified member.

         Section 10. Communications Equipment. Members of the board of directors
or any committee thereof may participate in and act at any meeting of such board
or committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.

         Section 11. Waiver of Notice and Presumption of Assent. Any member of
the board of directors or any committee thereof who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except when
such member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.



                                       6

<PAGE>   7
         Section 12. Action by Written Consent. Unless otherwise restricted by
the certificate of incorporation, any action required or permitted to be taken
at any meeting of the board of directors, or of any committee thereof, may be
taken without a meeting if all members of the board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the board or committee.


         Section 13. Directors Emeritus. The board of directors may, by
resolution adopted by a majority of the whole board, appoint a director or
former director who has served the corporation with distinction as a Director
Emeritus. Such appointment shall be for a term expiring at the next Annual
Meeting of Stockholders but shall be subject to renewal, by the same vote, at
the meeting of the Board immediately following the Annual Meeting. A Director
Emeritus shall not be considered a member of the board of directors, but shall
be a consultant to the board and, in such capacity, shall be invited to attend
all meetings of the board and such meetings of the committees of the board as
the chairman of the board or the president shall determine to be appropriate.
For his or her services, a Director Emeritus shall be entitled to receive the
same compensation for meetings actually attended as members of the board of
directors, but shall not be entitled to receive any annual or other periodic fee
or retainer paid to members of the Board.



                                       7

<PAGE>   8
                                   ARTICLE IV
                                    OFFICERS

         Section 1. Number. The officers of the corporation shall be elected by
the board of directors and shall consist of a president, one or more
vice-presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable, except that the offices of president and secretary shall be filled as
expeditiously as possible.

         Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at any meeting
of the board of directors. Each officer shall hold office until a successor is
duly elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided.

         Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.

         Section 4. Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.

         Section 5. Compensation. Compensation of all officers shall be fixed by
the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the corporation.

         Section 6. The President. The president shall be the chief executive
officer of the corporation; shall preside at all meetings of the stockholders
and board of directors at which he or she is present subject to the powers of
the board of directors, shall have general charge of the business, affairs and
property of the corporation, and control over its officers, agents and
employees; and shall see that all orders and resolutions of the board of
directors are carried into effect. The president shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the corporation. The
president shall have such other powers and perform such other duties as may be
prescribed by the board of directors or as may be provided in these by-laws.

         Section 7. Vice-presidents. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the




                                       8

<PAGE>   9
president, act with all of the powers and be subject to all the restrictions of
the president. The vice-presidents shall also perform such other duties and have
such other powers as the board of directors, the president or these by-laws may,
from time to time, prescribe.

         Section 8. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the board of directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
president's supervision, the secretary shall give, or cause to be given, all
notices required to be given by these by-laws or by law; shall have such powers
and perform such duties as the board of directors, the president or these
by-laws may, from time to time, prescribe; and shall have custody of the
corporate seal of the corporation. The secretary, or an assistant secretary,
shall have authority to affix the corporate seal to any instrument requiring it
and when so affixed, it may be attested by his or her signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his or her signature. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
board of directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors, the
president or secretary may, from time to time, prescribe.

         Section 9. The Treasurer and Assistant Treasurer. The treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors;
shall cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements; and
shall render to the president and the board of directors, at its regular meeting
or when the board of directors so requires, an account of the corporation; shall
have such powers and perform such duties as the board of directors, the
president or these by-laws may, from time to time, prescribe. If required by the
board of directors, the treasurer shall give the corporation a bond (which shall
be rendered every six years) in such sums and with such surety or sureties as
shall be satisfactory to the board of directors for the faithful performance of
the duties of the office of treasurer and for the restoration to the
corporation, in case of death, resignation, retirement, or removal from office,
of all books, papers, vouchers, money, and other property of whatever kind in
the possession or under the control of the treasurer belonging to the
corporation. The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the board of directors, shall in
the absence or disability of the treasurer perform the duties and exercise the
powers of the treasurer. The assistant treasurers shall perform such other
duties and have such other powers as the board of directors, the president or
treasurer may, from time to time, prescribe.

         Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these by-laws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.


                                       9

<PAGE>   10
         Section 11. Absence or Disability of Officers. In the case of the
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the board of directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.

                                  ARTICLE IV-A
                               APPOINTED OFFICERS

         Section 1. Appointment of Officers. The Board of Directors may employer
the President or Chairman of the board to appoint such other vice presidents and
other officers as the business of Corporation may require, each of whom shall
hold office for such period, have such authority and perform such duties as are
provided in the bylaws or as the Board of Directors may from time to time
determine (or, in the absence of such determination by the Board of Directors,
as the President or Chairman of the Board from time to time determine).

         Section 2. Removal. Any officer appointed in accordance with the
provisions of Section 1 may be removed by the Board of Directors or by the
President or Chairman of the Board (if appointed by such person) whenever in his
or her judgment the best interest of the Corporation would be served thereby,
provided that such removal shall be without prejudice to the contract rights, if
any of the persons so removed.

         Section 3. Appointment Officers and Deemed Elected Officers. Officers
appointed pursuant to Section 1 hereof shall not be deemed to be elected
officers of the Corporation, and in particular but without limitation shall not
be deemed to be executive officers of the corporation for the purposes of the
Securities Exchange Act of 1934, as amended, or any successor statute.


                                    ARTICLE V
                INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

         Section 1. Nature of Indemnity. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the representative, is or was a director or officer of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless by the corporation to the fullest extent which it is empowered to
do so unless prohibited from doing so by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all expense,
liability and loss including attorneys' fees actually and reasonably incurred by
such person in connection with such

                                       10

<PAGE>   11
proceeding, and such indemnification shall inure to the benefit of his or her
heirs, executors and administrators; provided, however, that, except as provided
in Section 2 hereof, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only if
such proceeding was authorized by the board of directors of the corporation. The
right to indemnification conferred in this Article V shall be a contract right
and, subject to sections 2 and 5 hereof, shall include the right to be paid by
the corporation the expenses incurred in defending any such proceeding in
advance of its final disposition. The corporation may, by action of its board of
directors, provide indemnification to employees and agents of the corporation
with the same scope and effect as the foregoing indemnification of directors and
officers.

         Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall be
made promptly, and in any event within 30 days, upon the written request of the
director or officer. If a determination by the corporation that the director or
officer is entitled to indemnification pursuant to this Article V is required,
and the corporation fails to respond within 60 days to a written request for
indemnity, the corporation shall be deemed to have approved the request. If the
corporation denies a written request for indemnification or advancing of
expenses, in whole or in part, or if payment in full pursuant to such request is
not made within 60 days, the right to indemnification or advances as granted by
this Article V shall be enforceable by the director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the corporation. It
shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law of the State of Delaware for
the corporation to indemnify the claimant for the amount claimed, but the burden
of such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the State of Delaware, nor an actual determination by
the corporation (including its board of directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

         Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.

         Section 4. Insurance. The corporation may purchase and maintain
insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee, fiduciary, or agent of

                                       11

<PAGE>   12
the corporation or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him or her and
incurred by him or her in any such capacity, whether or not the corporation
would have the power to indemnify such person against such liability under this
Article V.

         Section 5. Expenses. Expenses incurred by any person described in
Section 1 of this Article V in defending a proceeding shall be paid by the
corporation in advance of such proceeding's final disposition unless otherwise
determined by the board of directors in the specific case, upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the corporation. Such expenses incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board of
directors deems appropriate.

         Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the corporation, or who are or were serving at the request of the corporation
as employees or agents of another corporation, partnership, joint venture, trust
or other enterprise, may be indemnified to the extent authorized at any time or
from time to time by the board of directors.

         Section 7. Contract Rights. The provisions of this Article V shall be
deemed to be a contract right between the corporation and each director or
officer who serves in any such capacity at any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.

         Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article V
with respect to the resulting or surviving corporation as he or she would have
with respect to such constituent corporation if its separate existence had
continued.

                                   ARTICLE VI
                              CERTIFICATES OF STOCK

         Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the president or a vice-president and the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by such

                                       12

<PAGE>   13
holder in the corporation. If such a certificate is countersigned (1) by a
transfer agent or an assistant transfer agent other than the corporation or its
employee or (2) by a registrar, other than the corporation or its employee, the
signature of any such president, vice-president, secretary, or assistant
secretary may be facsimiles. In case any officer or officers who have signed, or
whose facsimile signature or signatures have been used on, any such certificate
or certificates shall cease to be such officer or officers of the corporation
whether because of death, resignation or otherwise before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be issued and delivered as though the person or
persons who signed such certificate or certificates or whose facsimile signature
or signatures have been used thereon had not ceased to be such officer or
officers of the corporation. All certificates for shares shall be consecutively
numbered or otherwise identified. The name of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the books of the corporation. Shares of stock of the
corporation shall only be transferred on the books of the corporation by the
holder of record thereof or by such holder's attorney duly authorized in
writing, upon surrender to the corporation of the certificate or certificates
for such shares endorsed by the appropriate person or persons, with such
evidence of the authenticity of such endorsement, transfer, authorization, and
other matters as the corporation may reasonably require, and accompanied by all
necessary stock transfer stamps. In that event, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate or certificates, and record the transaction on its books.
The board of directors may appoint a bank or trust company organized under the
laws of the United States or any state thereof to act as its transfer agent or
registrar, or both in connection with the transfer of any class or series of
securities of the corporation.

         Section 2. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against the corporation on account of the loss, theft or destruction of any such
certificate or the issuance of such new certificate.

         Section 3. Fixing a Record Date for Stockholder Meetings. In order that
the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting. If no record date is fixed by the
board of directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be the close of business
on the next day preceding the day on which notice is given, or if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders


                                       13

<PAGE>   14
shall apply to any adjournment of the meeting; provided, however, that the board
of directors may fix a new record date for the adjourned meeting.

         Section 4. Fixing a Record Date for Action by Written Consent. In order
that the corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
statute, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the board of directors and prior action by the board of directors is required by
statute, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action.

         Section 5. Fixing a Record Date for Other Purposes. In order that the
corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange
of stock, or for the purposes of any other lawful action, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted, and which record date shall be
not more than sixty (60) days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose shall be at
the close of business on the day on which the board of directors adopts the
resolution relating thereto.

         Section 6. Registered Stockholders. Prior to the surrender to the
corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications, and otherwise to exercise all the rights and
powers of an owner. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof.

         Section 7. Subscriptions for Stock. Unless otherwise provided for in
the subscription agreement, subscriptions for shares shall be paid in full at
such time, or in such installments and at such times, as shall be determined by
the board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same class or as to all
shares of the same series. In case of default in the payment of any installment
or call when such payment is

                                       14

<PAGE>   15
due, the corporation may proceed to collect the amount due in the same manner as
any debt due the corporation.


                                   ARTICLE VII
                               GENERAL PROVISIONS

         Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or any other purpose,
and the directors may modify or abolish any such reserve in the manner in which
it was created.

         Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.

         Section 3. Contracts. The board of directors may authorize any officer
or officers, or any agent or agents, of the corporation to enter into any
contract or to execute and deliver any instrument in the name of and on behalf
of the corporation, and such authority may be general or confined to specific
instances.

         Section 4. Loans. The corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest and may be unsecured or secured in such manner as the board of
directors shall approve, including without limitation a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.

         Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.

         Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words


                                       15

<PAGE>   16
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.

         Section 7. Voting Securities Owned by Corporation. Voting securities in
any other corporation held by the corporation shall be voted by the president,
unless the board of directors specifically confers authority to vote with
respect thereto, which authority may be general or confined to specific
instances, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.

         Section 8. Inspection of Books and Records. Any stockholder of record,
in person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in the State of Delaware or at its principal place of business.

         Section 9. Section Headings. Section headings in these by-laws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.

         Section 10. Inconsistent Provisions. In the event that any provision of
these by-laws is or becomes inconsistent with any provision of the certificate
of incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these by-laws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.

                                  ARTICLE VIII
                                   AMENDMENTS

         These by-laws may be amended, altered, or repealed and new by-laws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter, or repeal the by-laws has been conferred
upon the board of directors shall not divest the stockholders of the same
powers.

                                  *************


                                       16



<PAGE>   1
                               GARTNER GROUP, INC.

                         1993 DIRECTOR STOCK OPTION PLAN

                       (As amended through April 14, 2000)


         1. Purpose of the Plan. The purpose of this 1993 Director Stock Option
Plan is to attract and retain highly qualified personnel to serve as Outside
Directors of the Company.

         All options granted hereunder shall be "non-statutory stock options".
In addition, Common Stock Equivalents may be granted under the Plan.

         2. Definitions. As used herein, the following definitions shall apply:

                  (a) "Board" means the Board of Directors of the Company.

                  (b) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (c) "Common Stock" means the Common Stock of the Company.

                  (d) "Common Stock Equivalent" means an unfunded and unsecured
right to receive Shares in the future that may be granted to an Outside Director
pursuant to Section 5.

                  (e) "Company" means Gartner Group, Inc., a Delaware
corporation.

                  (f) "Continuous Status as a Director" means the absence of any
interruption or termination of service as a Director.

                  (g) "Director" means a member of the Board and, except for the
purposes of determining the eligibility for grants of options, shall also mean
any person appointed as a Director Emeritus in accordance with the Company's
Bylaws.

                  (h) "Employee" means any person, including
 officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company,
who is not a beneficial owner of or representative of a beneficial owner of more
than 5% of the Corporation's outstanding stock. The payment of a Director's fee
by the Company shall not be sufficient in and of itself to constitute
"employment" by the Company.

                  (i) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                  (j) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

<PAGE>   2
                           (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the date of
determination, or, if not a market trading day, on the last market trading day
prior to the date of determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable;

                           (ii) If the Common Stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the date of determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable; or

                           (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

                  (k) "Option" means a stock option granted pursuant to the
Plan.

                  (l) "Optioned Stock" means the Common Stock subject to an
Option.

                  (m) "Optionee" means an Outside Director who receives an
Option.

                  (n) "Outside Director" means a Director who is not an
Employee.

                  (o) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (p) "Plan" means this 1993 Director Stock Option Plan.

                  (q) "Quarterly Compensation" means the retainer fee and
committee fees, as applicable, that an Outside Director receives from the
Company for each of the Company's fiscal quarters.

                  (r) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.

                  (s) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.


                                                                               2

<PAGE>   3
         3. Stock Subject to the Plan. Subject to the provisions of Section 10
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 1,200,000 Shares (the "Pool") of Common Stock. The Shares
may be authorized but unissued, or reacquired Common Stock.

                  If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares, which were
subject thereto, shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.

         4.       Administration of and Grants of Options under the Plan.
                  

                  (a) Administrator. Except as otherwise required herein, the
Plan shall be administered by the Board.

                  (b) Procedure for Grants. The provisions set forth in this
Section 4(b) shall not be amended more than once every six months, other than to
comply with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. All grants of Options hereunder shall
be automatic and non-discretionary and shall be made strictly in accordance with
the following provisions:

                           (i) No person shall have any discretion to select
which Outside Directors shall be granted Options or to determine the number of
Shares to be covered by Options granted to Outside Directors.

                           (ii) Each new Outside Director who shall first join
the Board on or after February 1, 1993, shall automatically be granted an Option
to purchase 15,000 Shares upon the date on which such person first becomes an
Outside Director, whether through election by the stockholders of the Company,
appointment by the Board to fill a vacancy, or termination of employment by the
Company while remaining as a Director (a "One-Time Grant"). In addition, on
March 1, 1994, and on each March 1 thereafter until March 1, 1998, during the
term of this Plan, each Outside Director who shall have been an Outside Director
for at least six (6) months as of such date shall automatically receive an
Option to purchase 3,000 Shares, and on March 1, 1999, and on each March 1
thereafter during the term of this Plan, each Outside Director who shall have
been an Outside Director for at least six (6) months as of such date shall
automatically receive an Option to purchase 7,000 Shares (an "Annual Grant").
Notwithstanding any other provision in the Plan, the amount of the Annual Grant
and the One-Time Grant shall not be adjusted in the event of any stock split,
reverse stock split, recapitalization or other change in the capitalization of
the Company, unless otherwise specifically provided by the Board.


                                                                               3

<PAGE>   4
                           (iiii) The terms of each Option granted hereunder
shall be as follows:

                                    (A) the term of the Option shall be five (5)
years;

                                    (B) the Option shall be exercisable only
while the Outside Director remains a Director of the Company, except as set
forth in Section 8 hereof;

                                    (C) the exercise price per Share shall be
100% of the Fair Market Value per Share on the date of grant of the Option;

                                    (D) each Annual Grant and One-Time Grant
shall become exercisable in installments cumulatively as to one-third of the
Optioned Stock on each anniversary of the date of grant, so that 100% of the
Optioned Stock granted under any such grant shall be exercisable in full three
(3) years after the date of grant of the Option, assuming in each case
Continuous Status as a Director.

                           (iv) In the event that any Option granted under the
Plan would cause the number of Shares subject to outstanding Options plus the
number of Shares previously purchased upon exercise of Options to exceed the
Pool, then each such automatic grant shall be for that number of Shares
determined by dividing the total number of Shares remaining available for grant
by the number of Outside Directors entitled to receive Options on the grant
date. No further grants shall be made until such time, if any, as additional
Shares become available for grant under the Plan through action of the
shareholders to increase the number of Shares which may be issued under the Plan
or through cancellation or expiration of Options previously granted hereunder.

                  (c) Powers of the Board. Subject to the provisions and
restrictions of the Plan, the Board shall have the authority, in its discretion:
(i) to determine, upon review of relevant information and in accordance with
Section 2(i) of the Plan, the Fair Market Value of the Common Stock; (ii) to
interpret the Plan; (iii) to prescribe, amend and rescind rules and regulations
relating to the Plan; (iv) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option or Common
Stock Equivalent previously granted hereunder; and (v) to make all other
determinations deemed necessary or advisable for the administration of the Plan.

                  (d) Effect of Board's Decision. All decision determinations
and interpretations of the Board shall be final.

         5.  Common Stock Equivalents.

                  (a) Award of Common Stock Equivalents. On the first business
day of each of the Company's fiscal quarters during the term of this Plan
(beginning on April 1, 1999), the Company shall grant to each Outside Director
that number of Common Stock Equivalents equal in value to the Outside Director's
Quarterly Compensation for such quarter divided by the Fair Market Value of the
Common Stock on such day. Commencing with the January 2000 payment, each Outside
Director 


                                                                               4

<PAGE>   5
may elect to receive up to 50% of his or her compensation in cash and the
balance in Common Stock Equivalents. The Common Stock Equivalents granted to
each Outside Director shall be calculated based upon the percentage of
compensation such director is receiving in Common Stock Equivalents. 

                  (b) Bookkeeping Account; Nontransferability. The number of
Common Stock Equivalents awarded pursuant to Section 5(a) to each Outside
Director shall be credited to a bookkeeping account established in the name of
the Outside Director. The Company's obligation with respect to such Common Stock
Equivalents shall not be funded or secured in any manner. An Outside Director's
right to receive Common Stock Equivalents may not be assigned or transferred,
voluntarily or involuntarily, except as expressly provided herein.

                  (c) Dividends. If the Company pays a cash dividend with
respect to the Shares at any time while Common Stock Equivalents are credited to
an Outside Director's account, there shall be credited to the Outside Director's
account additional Common Stock Equivalents equal to (i) the dollar amount of
the cash dividend the Outside Director would have received had he or she been
the actual owner of the Shares to which the Common Stock Equivalents then
credited to the Outside Director's account relate, divided by (ii) the Fair
Market Value of one Share on the dividend payment date.


                  (d) Conversion. As soon as practicable following the date on
which an Outside Director's Continuous Status as a Director terminates for any
reason, or as otherwise provided herein, the Company shall deliver to the
Outside Director (or his or her designated beneficiary or estate) a number of
Shares equal to the whole number of Common Stock Equivalents then credited to
the Outside Director's account, or at the Company's option, shall have the
Shares credited to an account for the Director with a brokerage firm of the
Company's choosing.

                  (e) Stockholder Rights. An Outside Director (or his or her
designated beneficiary or estate) shall not be entitled to any voting or other
stockholder rights as a result of the credit of Common Stock Equivalents to the
Outside Director's account, until certificates representing Shares are delivered
to the Outside Director (or his or her designated beneficiary or estate) until
conversion of the Outside Director's Common Stock Equivalents to Shares pursuant
to Section 5(d).

         6. Eligibility. Options and Common Stock Equivalents may be granted
only to Outside Directors. All Options shall be granted automatically in
accordance with the terms set forth in Section 4(b) hereof. All Common Stock
Equivalents shall be granted automatically in accordance with the terms set
forth in Section 5 hereof An Outside Director who has been granted an Option
may, if he or she is otherwise eligible, be granted an additional Option or
Options in accordance with such provisions.

                  The Plan shall not confer upon any Optionee any right with
respect to continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the Director
or the Company may have to terminate his or her directorship at any time.

         7. Term of Plan. The Plan shall become effective upon the earlier to
occur of its 


                                                                               5

<PAGE>   6
adoption by the Board or its approval by the stockholders of the Company as
described in Section 16 of the Plan. It shall continue in effect until March 31,
2003, unless sooner terminated under Section 12 of the Plan.

         8. Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Board and may consist entirely of (i) cash, (ii) check, (iii)
promissory note, (iv) other shares which have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised and which, in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than 12 months
on the date of surrender, (v) delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds required to pay the exercise price,
(vi) delivery of an irrevocable subscription agreement for the Shares which
irrevocably obligates the Optionee to take and pay for the Shares not more than
12 months after the date of delivery of the subscription agreement, (vii) any
combination of the foregoing methods of payment, or (viii) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under applicable law.

         9.       Exercise of Option.

                  (a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable at such times as are set forth in
Section 4(b) hereof; provided, however, that no Options shall be exercisable
until stockholder approval of the Plan in accordance with Section 17 hereof has
been obtained.

                  An Option may not be exercised for a fraction of a Share.

                  An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may consist of any consideration and method of payment
allowable under the Plan. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. A share
certificate for the number of Shares so acquired shall be issued to the Optionee
as soon as practicable after exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 11 of the Plan.

                  Exercise of an Option in any manner shall result in a decrease
in the number of Shares, which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.


                                                                               6

<PAGE>   7
                  (b) Termination of Continuous Status as a Director. In the
event an Optionee's Continuous Status as a Director terminates (other than upon
the Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code)), the Optionee may exercise his or her Option, but only
within 90 days from the date of such termination, and only to the extent that
the Optionee was entitled to exercise it at the date of such termination (but in
no event later than the expiration of its five-year term). To the extent that
the Optionee was not entitled to exercise an Option at the date of such
termination, and to the extent that the Optionee does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.

                  (c) Disability of Optionee. In the event Optionee's Continuous
Status as a Director terminates as a result of total and permanent disability
(as defined in Section 22(e)(3) of the Code), the Optionee may exercise his or
her Option, but only within six months from the date of such termination, and
only to the extent that the Optionee was entitled to exercise it at the date of
such termination (but in no event later than the expiration of its five-year
term). To the extent that the Optionee was not entitled to exercise an Option at
the date of termination, or if he or she does not exercise such Option (to the
extent otherwise so entitled) within the time specified herein, the Option shall
terminate.

                  (d) Death of Optionee. In the event of an Optionee's death
while a Director, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance may exercise the Option, but only
within one year following the date of death, and only to the extent that the
Optionee was entitled to exercise it at the date of death (but in no event later
than the expiration of its five-year term). To the extent that the Optionee was
not entitled to exercise an Option at the date of death, and to the extent that
the Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.

         10. Non-Transferability of Options. The Option and Common Stock
Equivalents may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will, by the laws of descent or
distribution or pursuant to a qualified domestic relations order, and may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
permitted transferee.

         11.      Adjustments.

                  (a) Changes in Capitalization. In the event that the stock of
the Company is changed by reason of any stock split, reverse stock split,
recapitalization, or other change in the capital structure of the Company, or
converted into or exchanged for other securities as a result of any merger,
consolidation or reorganization, or in the event that the outstanding number of
shares of stock of the Company is increased through payment of a stock dividend,
appropriate proportionate adjustments shall be made in the number and class of
shares of stock subject to the Plan, the number and class of shares subject to
any Option and Common Stock Equivalent outstanding under the Plan, the number of
Common Stock Equivalents credited to an Outside Director's account under Section
5(b) and the exercise price of any such outstanding Option; provided, however,
that the 


                                                                               7

<PAGE>   8
Company shall not be required to issue fractional shares as a result of
any such adjustment. Any such adjustment shall be made upon approval by the
Board, whose determination shall be conclusive. If there is any other change in
the number or type of the outstanding shares of stock of the Company, or of any
other security into which such stock shall have been changed or for which it
shall have been exchanged, and if the Board in its sole discretion determines
that such change equitably requires an adjustment in the Options then
outstanding under the Plan, such adjustment shall be made in accordance with the
determination of the Board. No adjustments shall be required by reason of the
issuance or sale by the Company for cash or other consideration of additional
shares of its stock or securities convertible into or exchangeable for shares of
its stock.

                  (b) Change in Control. In the event of a "Change in Control"
of the Company, as defined in paragraph (c) below, then the following provisions
shall apply:

                           (i) Any Option outstanding on the date of such Change
in Control ("Outstanding Option") that is not yet exercisable and vested on such
date shall become fully exercisable and vested;

                           (ii) Each Outstanding Option shall be assumed by the
successor corporation (if any) or by a Parent or Subsidiary of the successor
corporation (if any);

                           (iii) Each Outstanding Option shall remain
exercisable by the Optionee for a period of at least ninety (90) days from the
date of the Change in Control;

                           (iv) Each Optionee with an Outstanding Option shall
be provided with written notice of the period of exercisability provided for in
subsection (b)(iii) above promptly after the date of the Change in Control by
the Company or by the entity surviving after the Change in Control.

                           (v) Each outstanding Common Stock Equivalent shall
convert into Shares (as provided in Section 5(d)) immediately prior to the
Change in Control.


                  (c) Definition of "Change in Control". For purposes of this
Section, a "Change in Control" means the happening of any of the following:

                           (i) when any "person," as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, a
Subsidiary or a Company employee benefit plan, including any trustee of such
plan acting as trustee) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than fifty (50%) of the combined voting power of the
Company's then outstanding securities entitled to vote generally in the election
of directors; or


                                                                               8

<PAGE>   9
                           (ii) a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or

                           (iii) the stockholders of the Company approve an
agreement for the sale or disposition by the Company of all or substantially all
the Company's assets; or

                           (iv) a change in the composition of the Board
occurring as a result of any one meeting of the stockholders of the Company, as
a result of which fewer than a majority of the directors are Incumbent
Directors. "Incumbent Directors" shall mean directors who either are (A)
directors of the Company as of the date the Plan is approved by the
stockholders, or (B) elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

         12.      Amendment and Termination of the Plan.

                  (a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act (or any other applicable law or regulation), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.

                  (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated.

         13. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

         14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws and the requirements of any stock exchange or
market system upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.


                                                                               9

<PAGE>   10
                  As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

                  Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

         15. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

         16. Option Agreement. Options shall be evidenced by written option
agreements in such form, as the Board shall approve.

         17. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company at or prior to the first annual
meeting of stockholders held subsequent to the first granting of an Option
hereunder. Such stockholder approval shall be obtained in the degree and manner
required under applicable state and federal law.


                                                                              10



<PAGE>   1
                     ADDENDUM NO. 1 TO EMPLOYMENT AGREEMENT



     This Addendum No. 1 (the "Addendum") is entered into as of April 14, 2000,
by and between Manuel A. Fernandez, an individual ("Executive") and Gartner
Group, Inc. a Delaware corporation (the "Company").

                                    RECITALS

     A. Executive and the Company are parties to an Employment Agreement dated
as of November 12, 1998 (the "Employment Agreement"), which provides for
Executive to serve as Chairman of the Board through October 1, 2000 (the
"Employment Term").

     B. The Company and Executive desire to provide for Executive's continuing
service to the Company following the Employment Term, upon and subject to the
terms and conditions set forth herein.

                                    AGREEMENT

     THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereby agree as follows:

     1. Continuation of Agreement. Following the Employment Term, Executive
shall continue to serve as Chairman of the Board through the Extended Term
specified in Section 3. Executive will report to the Board of Directors and will
render such services consistent with such role as the Executive and the Board of
Directors may agree from time to time.

     2. Board of Directors. During the Extended Term, the Company shall include
Executive on the Company's
 slate of nominees to be elected to the Board of
Directors of the Company at each annual meeting of stockholders of the Company,
shall use its best efforts to cause Executive to be elected to the Board of
Directors at such meetings, and if elected shall use its best efforts to cause
Executive to continue to serve on the Board of Directors until Executive's
successor is duly elected and qualified. Upon termination of the Extended Term
for any reason, Executive shall promptly resign as director of the Company.

     3. Term.

         (a) Extended Term. Following the Employment Term, and without further
action by the Company or Executive, Executive shall continue service as Chairman
of the Board. The service of Executive as Chairman of the Board pursuant to this
Addendum shall continue through October 1, 2001 (the "Extended Term"), unless
extended or earlier terminated as provided in this Addendum.

         (b) Further Extensions. The Extended Term may be further extended upon
mutual agreement of Executive and the Company for additional one-year periods.
Any such extension shall be on the terms and conditions set forth in the
Employment Agreement, as 

<PAGE>   2

modified by this Addendum, except that the Extension Compensation (as defined in
Section 4) for each extension period shall be $16,666.67 per month and the
target bonus shall be $100,000 and except that the Change in Control payments
described in Section 8(d)(B) hereof equal to three (3) times certain amounts
shall not be available to Executive.

     4. Compensation.

         (a) Extension Compensation. As compensation for the services rendered
by Executive under this Addendum, the Company shall pay to Executive continued
salary of $33,333 per month ("Extension Compensation") during the Extended Term.

         (b) Option Exercise. All options and other exercisable rights held by
Executive, other than those options and rights which have an exercise price less
than the current fair market value of the securities for which they are
exercisable on the date of this Agreement, shall remain exercisable for the
longest period available for a continuing employee under the applicable plan or
agreement, regardless of whether or not Executive remains employed by the
Company. The Company represents that it has obtained all necessary approvals of
the Committee under the applicable stock option or rights plan to the extent
required to enforce this paragraph.

     5. Bonus. In addition to his Extension Compensation, Executive shall be
entitled during the Extended Term to participate in the Company's executive
bonus program. The annual target bonus shall be established by the Board of
Directors or its Compensation Committee, in the discretion of the Board or such
Committee, and shall be payable at the same time and in the same proportion as
bonus may be payable to the President and Chief Executive Officer of the
Company. Executive's target bonus for the fiscal year ending September 30, 2000
has previously been set at $400,000, with a maximum bonus of $800,000.
Executive's target bonus for the fiscal year ending September 30, 2001 shall be
$400,000, with a maximum bonus of $800,000. By way of example, if the President
were awarded a 100% bonus for the 2000 fiscal year, then Executive shall receive
a 100% bonus, or $400,000. If the President were awarded a 200% bonus for the
2000 fiscal year, then Executive shall receive a 200% bonus, or $800,000. This
method of calculating Executive's bonus shall apply to the bonus payable to
Executive during the Employment Term under the Employment Agreement as well as
to the bonus payable to Executive during the Extended Term.

     6. Executive Benefits.

         (a) Employee and Executive Benefits. Executive will be entitled during
the Extended Term to receive all benefits provided to executives and employees
of the Company generally from time to time, including medical, dental, life
insurance and long-term disability, and the executive split-dollar life
insurance and executive disability plan, as well as Executive's auto benefit
program (with the full cost of operation not to exceed $15,000 per year) so long
as and to the extent the same exist; provided, that in respect to each such plan
Executive is otherwise eligible and insurable in accordance with the terms of
such plans.

         (b) Vacation, Sick Leave, Sabbaticals and Holidays. Executive shall be
entitled during the Extended Term to vacation, sick leave, sabbatical leave and
vacation in 

                                      -2-

<PAGE>   3

accordance with the policies of Gartner and its subsidiaries as they exist from
time to time. Executive understands that under the current policy he will
receive six (6) weeks vacation per calendar year. Vacation which is not used
during any calendar year will not roll over to the following year.

         (c) Office Support, Administrator. Executive shall be entitled to an
office in Fort Myers, Florida, comparable to his office on the date of this
Addendum, the services of a full-time administrative assistant, and support
services customary for a person of Executive's position, all at Company expense,
during the Employment Term and Extended Term.

         (d) Benefits as Director. Executive shall receive the benefits granted
to outside directors, other than additional monetary compensation and stock
options, for so long as he remains on the Board of Directors of the Company.

     7. Stock Options. The Company shall, promptly following the execution and
delivery of this Agreement, grant the Executive a non-qualified stock option to
purchase up to 100,000 shares of the Company's Class A Common Stock with an
exercise price equal to the fair market value of the Company's Class A Common
Stock on the date of issuance, as determined by the Compensation Committee. Such
option shall vest one quarter on the first anniversary of the date of this
Addendum and the balance in equal amounts on a monthly basis for the next 36
months following such first anniversary. Such option shall be subject to the
other terms and conditions adopted by the Company for its executive stock
options, and if the Company has multiple plans, then the terms and conditions
set forth in the plan under which the President has received options in 1999;
provided, however, that whether or not the same is the practice for the Company
in granting executive stock options, the options granted pursuant to this
Section 7 shall remain exercisable for the maximum permitted time period (but
not to exceed ten (10) years in any event), regardless of whether or not
Executive continues to provide services to the Company hereunder and regardless
of the reason for any termination of Executive's engagement.

     8. Severance Benefits. Executive shall be entitled during the Extended Term
to the severance benefits set forth in this Section 8.

         (a) Salary Continuation. If the Company terminates the services of
Executive involuntarily and without Business Reasons or a Constructive
Termination occurs, or Executive shall become unable to perform his duties as a
result of incapacity, which gives rise to termination of employment for
Disability, or Executive voluntarily terminates his employment or resigns as
Chairman of the Board, or Executive's employment is terminated because of death,
then in any such case (other than following a Change in Control or in
contemplation of a pending Change in Control, which are governed by Section 8(d)
below), Executive shall be entitled to receive (A) Extended Compensation through
October 1, 2001, payable in accordance with the Company's regular payroll
schedule as in effect from time to time, (B) on the Termination Date, 100% of
Executive's target bonus for the fiscal year in which the Termination Date
occurs (plus any unpaid bonus from the prior fiscal year), and (C) following the
end of the fiscal year in which the Termination Date occurs and management
bonuses have been determined, a pro rata share (based on the proportion of the
fiscal year during which Executive provided services to the Company) of the
bonus that would have been payable to Executive under Section 5 in excess of
100% of Executive's target bonus for the fiscal year.


                                      -3-

<PAGE>   4


         (b) Continuation of Benefits. Executive shall be entitled to
continuation of (i) group health benefits and life and disability pursuant to
the Company's standard programs as in effect from time to time (or continuation
by the Company of substantially similar group health benefits as in effect at
the Termination Date, through a third party carrier, at Company's election) for
Executive, his spouse and any children for so long as they are under the age of
19 (25, if a full-time student) and (ii) life and disability insurance coverage
pursuant to the Company's programs as in effect for Executive on the date of
this Addendum (or continuation by the Company of substantially similar life and
disability insurance coverage, at Company's election), in each instance until
such time as Executive reaches or would have reached the age of 65. This
provision shall apply regardless of the reason for termination or resignation
and shall further apply if the Employment Agreement or this Addendum expires by
its terms.

         (c) Stock Options and Related Rights. If the Company terminates the
services of Executive involuntarily and without Business Reasons or a
Constructive Termination occurs, or Executive shall become unable to perform his
duties as a result of incapacity, which gives rise to termination of employment
for Disability, or Executive voluntarily terminates his employment or resigns as
Chairman of the Board, or Executive's employment is terminated because of death,
then in any such case (other than following a Change in Control or in
contemplation of a pending Change in Control, which are governed by Section 8(d)
below), Executive shall be entitled to receive acceleration in full of vesting
of all outstanding stock options, TARPs and other equity arrangements subject to
vesting and held by Executive (and in this regard, all options and other
exercisable rights held by executive shall remain exercisable for the period
specified in Section 4(b) of this Addendum).

         (d) Change in Control. If a Change in Control occurs, whether during
the Employment Term or the Extended Term, then in lieu of the benefits set forth
in Section 7(c) of the Employment Agreement, Executive shall be entitled to
receive (A) salary or Extension Compensation, as the case may be, and vacation
and sabbaticals accrued through the Termination Date (B) an amount equal to
three (3) times the greater of (i) Executive's average annual compensation
(salary or Extension Compensation plus bonus) for those three of the last seven
fiscal years in which such compensation was highest or (ii) $800,000, whichever
is greater, payable immediately upon the Change in Control, (C) any unpaid bonus
from the prior fiscal year, payable immediately upon the Change in Control, (D)
acceleration in full of vesting of all outstanding stock options, TARPs and
other equity arrangements subject to vesting and held by Executive (and in this
regard, all options, TARPs, restricted stock and other exercisable rights held
by Executive shall remain exercisable for the longest period available for a
continuing employee under the applicable plan or agreement, regardless of the
reasons for termination, (E) continuation of (i) group health benefits and life
and disability pursuant to the Company's standard programs as in effect from
time to time (or continuation by the Company of substantially similar group
health benefits as in effect at the Termination Date, through a third party
carrier, at Company's election) for Executive, his spouse and any children for
so long as they are under the age of 19 (25, if a full-time student) and (ii)
life and disability insurance coverage pursuant to the Company's programs as in
effect for Executive on the date of this Addendum (or continuation by the
Company of substantially similar life and disability insurance coverage, at
Company's election), in each instance until such time as Executive reaches or
would have reached the age of 65, (F) continuation of Executive's auto benefits
for one year following the Termination Date, (G) forgiveness by the Company of
all outstanding principal and interest 

                                      -4-

<PAGE>   5

due to the Company under indebtedness incurred by Executive to purchase shares
of capital stock of the Company, and (H) no other compensation, severance or
other benefits. Notwithstanding the foregoing, however, if Executive violates
the non-competition agreement set forth in Section 12 of the Employment
Agreement during the five (5) year period following the Termination Date,
Executive shall be obligated to repay to the Company any amounts previously
received pursuant to clause (B) hereof, to the extent the same correspond to any
period following the Termination Date during which the non-competition agreement
is violated.

         (e) Other Benefits. If the Company terminates the services of Executive
involuntarily and without Business Reasons or a Constructive Termination occurs,
or Executive shall become unable to perform his duties as a result of
incapacity, which gives rise to termination of employment for Disability, or
Executive voluntarily terminates his employment or resigns as Chairman of the
Board, then in any such case, Executive shall be entitled to receive
continuation of Executive's auto benefits for one year following the Termination
Date,

         (f) Gross-Up Payment. If any payment or distribution by the Company or
any of its affiliates to or for the benefit of Executive, whether paid or
distributed pursuant to the terms of the Employment Agreement, this Addendum or
otherwise pursuant to or by reason of any plan or agreement referenced herein or
any other agreement, policy, plan, program or arrangement, including without
limitation any stock option, TARP, restricted stock or similar right, or the
lapse or termination of any restriction on, or the vesting or exercisability of,
any of the foregoing (a "Payment"), would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
(or any successor provision thereto) by reason of being considered "contingent
on a change in ownership or control" of the Company, within the meaning of
Section 280G of the Code (or any successor provision thereto) or to any similar
tax imposed by state or local law, or any interest or penalties with respect to
such tax (such tax or taxes, together with any such interest and penalties,
being hereafter collectively referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional payment or payments (collectively, a
"Gross-Up Payment"). The Gross-Up Payment shall be in an amount such that, after
payment by Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including any Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payment.

         (g) Retention of Equipment. Executive shall be entitled upon
termination for any reason or for no reason to retain for his personal use and
benefit his office furnishings and equipment, including without limitation
cellular phones, computers, printers, copier and similar equipment. The Company
shall assign and transfer ownership of the foregoing to Executive upon
termination without further payment by Executive to the Company.

         (h) Support Services. Executive shall be entitled to continuation of
use of technical office support services, including without limitation voice
mail, e-mail, internet access services and other connectivity services, until
such time as Executive reaches age 65.

         (i) General. Upon the death or disability of the Executive prior to age
65, benefits provided in Section 8(b) and 8(d)(E) hereunder for the benefit of
Executive, his spouse 

                                      -5-

<PAGE>   6

and his children shall continue to be provided for the benefit of his spouse and
his children (within the applicable age limits) until such time as Executive
would have reached age 65.

     9. Termination Date. The definition of "Termination Date" in Section 8 of
the Employment Agreement is hereby modified to mean (i) if the Employment
Agreement is terminated on account of death, the date of death; (ii) if the
Employment Agreement is terminated for disability, the date specified in Section
8(b) of the Employment Agreement; (iii) if the Employment Agreement is
terminated by the Company, whether during the Employment Term or the Extended
Term, the date on which a notice of termination is given to Executive; (iv) if
the Employment Agreement is terminated by Executive, whether during the
Employment Term or the Extended Term, the date on which Executive delivers the
notice of termination to the Company; or (v) if the Employment Agreement expires
by its terms, then the last day of the Extended Term.

     10. Constructive Termination. In addition to the actions deemed to
constitute "Constructive Termination" under the Employment Agreement,
"Constructive Termination" shall be deemed to occur if (i) Executive shall no
longer be Chairman of the Board of the Company (other than at the end of the
Extended Term) or (ii) there is a reduction of Executive's Extension
Compensation and within the thirty (30) day period immediately following such
change or reduction Executive elects to terminate his consulting arrangement
voluntarily.

     11. Annuity Payment. Upon the termination of the Employment Agreement,
regardless of the reason therefor and regardless of whether prior to or upon its
expiration by its terms, the Company shall continue to make payments to
Executive of $200,000 per year for 10 years. Executive shall make himself
available to the Company to provide advice and guidance on a limited basis, as
the Company may reasonably request, with respect to the business of the Company
during such 10-year period, provided that such advice and guidance may be
rendered by telephone and at such times during normal business hours as may be
convenient to Executive in light of his schedule and other commitments. The
Company shall make such payments in equal monthly installments, on the first day
of each month, commencing with the month following the last day of the Extended
Term. In the event of the Executive's death prior to the end of such 10-year
period, including during the Employment Term or Extended Term, the balance of
payments under this Section shall be payable to his estate. Upon any Change in
Control, the Company shall at its expense purchase an annuity for the benefit of
Executive or his estate, as the case may be, with an annuity company reasonably
satisfactory to Executive. Such annuity shall provide Executive or his estate,
as the case may be, with the balance of payments otherwise due under this
Section, when and as due. Payment of such amounts pursuant to the annuity shall
excuse the Company from its obligations under this Section.

     12. Non-Competition Agreement. The Non-Competition Agreement set forth in
Section 12 of the Employment Agreement is hereby modified as follows:

         (a) Term. References to three (3) years shall be deemed extended to
five (5) years.


                                      -6-

<PAGE>   7


         (b) Employees. The restriction in Section 12(b)(2) on hiring another
entity or person who was an employee of the Company or any subsidiary at any
time during the Employment Period shall be limited to current employees of the
Company at the time of hiring.

         (c) Venture Funds. Nothing in Section 12 shall preclude or limit
Executive's ability to invest, manage or otherwise participate in SI Ventures
Affiliates Fund, L.P., SI Fund I, L.L.C., SI Services Company, L.L.C., SI
Venture Management I, L.L.C. or any similar venture capital fund, management
company, service company or similar company that invests generally in
information technologies businesses.

     13. Survival of Employment Agreement. As modified by this Addendum, the
Employment Agreement shall remain in full force and effect. References herein to
the "Employment Agreement" shall mean the Employment Agreement as modified by
this Addendum, except as the context otherwise requires. Those provisions that
by their terms apply to periods following the Employment Term or the Extended
Term shall survive the termination of the Employment Agreement.

     14. Counterparts. This Addendum may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument.

     15. Capitalized Terms. Capitalized terms used without definition in this
Addendum shall have the meanings ascribed to them in the Employment Agreement.

     IN WITNESS WHEREOF, each of the parties has executed this Addendum, in the
case of the Company by its duly authorized officer, as of the day and year first
above written.

                                         COMPANY

                                         GARTNER GROUP, INC.




                                         By: 
                                             ----------------------------------
                                             William O. Grabe, Chairman,
                                             Compensation Committee


                                         By: 
                                             ----------------------------------
                                               Kenneth Siegel
                                               General Counsel

                                         EXECUTIVE


                                          ----------------------------------
                                             Manuel A. Fernandez




                                      -7-





<PAGE>   1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement") is entered into on July 1,
2000, between Regina M. Paolillo, an individual ("Executive") and Gartner Group,
Inc., a Delaware corporation (the "Company").

                                    RECITALS


         A.       Executive currently serves as the Executive Vice President,
                  Chief Financial Officer of the Company.

         B.       The Company and Executive desire to provide for Executive's
                  continued employment by the Company upon the terms and
                  conditions set forth herein.

                                    AGREEMENT

         THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereby agree as follows:

         1. Employment. Executive will serve as Executive Vice President, Chief
Financial Officer of the Company for the Employment Term specified in Section 2
below. Executive will report solely to the Chief Executive Officer of the
Company and will render such services consistent with the foregoing role as the
Chief Executive Officer or Board of Directors may from time to time direct.
Executive's office shall be located at the executive offices of the Company in
Stamford, Connecticut. Executive may (i) serve on corporate, civic or charitable
boards or committees and (ii) deliver lectures, fulfill speaking engagements or
teach
 at educational institutions, to the extent consistent with the Company's
policies (as applicable) or disclosed to the Chief Executive Officer and that
the Chief Executive Officer determines in good faith do not interfere with the
performance of Executive's responsibilities hereunder.


         2. Term. The employment of Executive pursuant to this Agreement shall
continue through September 30, 2003 (the "Employment Term"), unless extended or
earlier terminated as provided in this Agreement. The Employment Term shall
automatically be extended for additional one-year periods commencing on October
1, 2003 and continuing each year thereafter, unless either Executive or the
Company gives the other written notice, in accordance with Section 12(a) and at
least 90 days prior to the then scheduled expiration of the Employment Term, of
such party's intention not to extend the Employment Term.

         3. Salary. As compensation for the services rendered by Executive under
this Agreement, the Company shall pay to Executive a base salary initially equal
to $29,167 per month ("Base Salary") for the balance of fiscal year 2000 and for
fiscal 2001, payable to Executive in accordance with the Company's payroll
practices as in effect from time to time during the Employment Term. The Base
Salary shall be subject to adjustment by the Board of Directors of the Company
or the Compensation Committee of the Board of Directors, in the sole discretion
of the Board or such Committee, on an annual basis; provided, however, that
Executive's salary may not be decreased other than any such reduction consistent
with a general reduction of pay across the

<PAGE>   2
executive staff as a group as an economic or strategic measure due to poor
financial performance by the Company.

         4. Bonus. In addition to her Base Salary, Executive shall be entitled
to participate in the Company's executive bonus program. The Board or its
Compensation Committee shall establish the annual target bonus, in the
discretion of the Board or such Committee, and shall be payable based on
achievement of specified Company and individual objectives. Executive's target
bonus for the fiscal year ending September 30, 2000 and September 30, 2001 shall
be between $300,000 and $600,000. Such bonus amounts shall be subject to annual
adjustment by the Board or the Compensation Committee of the Board, in the sole
discretion of the Board or such Committee, on an annual basis; provided,
however, that Executive's target bonus may not be decreased without Executive's
consent other than any such reduction consistent with a general reduction of pay
across the executive staff as a group, as an economic or strategic measure due
to poor financial performance by the Company.

         5. Executive Benefits.

            (a) Stock Options. In the event that during the Employment Term the
Company should create a material spin-off entity in which the Company intends to
offer an equity stake to third party investors or the public and in which
executives or employees of the Company or such entity are to receive capital
stock or options to purchase capital stock, then Executive shall be granted
capital stock in such entity, or an option to purchase such capital stock, in
such amounts as the Board of Directors of the Company or its compensation
Committee shall deem appropriate in connection with the formation or spin-off.

            (b) Other Employee and Executive Benefits. Executive will be
entitled to receive all benefits provided to senior executives, executives and
employees of the Company generally from time to time, including medical, dental,
life insurance and long-term disability, and the executive split-dollar life
insurance and executive disability plan, in each case so long as and to the
extent the same exist; provided, that in respect to each such plan Executive is
otherwise eligible and insurable in accordance with the terms of such plans.
Executive will also be entitled to automobile benefits pursuant to a policy to
be implemented by the Company with the concurrence of the Chairman of the
Compensation Committee of the Board of Directors.

            (c) Vacation, Sick Leave, Holidays and Sabbatical. Executive shall
be entitled to vacation, sick leave, holidays and sabbatical in accordance with
the policies of the Company as they exist from time to time. Executive
understands that under the current policy she is entitled to up to four (4)
weeks vacation per calendar year. Vacation which is not used during any calendar
year will roll over to the following year only to the extent provided under the
Company's vacation policies as they exist from time to time.


         6. Severance Benefits.


            (a) At Will Employment. Executive's employment shall be "at will."
Either the Company or Executive may terminate this agreement and Executive's
employment at any time, with or without Business Reasons (as defined in Section
7(a) below), in its or her sole discretion, upon sixty days' prior written
notice of termination.


                                      -2-

<PAGE>   3
            (b) Involuntary Termination. If at any time during the term of this
Agreement, other than following a Change in Control to which Section 6(c)
applies, the Company terminates the employment of Executive involuntarily and
without Business Reasons or a Constructive Termination occurs, then in addition
to salary and vacation accrued through the Termination Date, Executive shall be
entitled to receive the following: (i) continued salary for a period of three
years following the Termination Date at the rate then in effect, payable in
accordance with the Company's regular payroll schedule as in effect from time to
time, (ii) at the Termination Date Executive's minimum target bonus for the
fiscal year in which the Termination Date occurs plus any unpaid bonus from the
prior fiscal year, (iii) following the end of the fiscal year in which the
Termination Date occurs and management bonuses have been determined, a pro rata
share (based on the proportion of the fiscal year during which Executive
remained an employee of the Company) of the bonus that would have been payable
to Executive under the bonus plan in excess of Executive's minimum target bonus
for the fiscal year, (iv) following the end of the first fiscal year following
the fiscal year in which the Termination Date occurs, Executive's minimum target
bonus for such following fiscal year (or, if the target bonus for such year was
not previously set, then Executive's minimum target bonus for the fiscal year in
which the Termination Date occurred), (v) acceleration in full of vesting of all
outstanding stock options, TARPs and other equity arrangements subject to
vesting and held by Executive (and in this regard, all such options and other
exercisable rights held by Executive shall remain exercisable for one year
following the Termination Date, (vi) (A) continuation of group health benefits
at the Company's cost pursuant to the Company's standard programs as in effect
from time to time (or at the Company's election substantially similar health
benefits as in effect at the Termination Date, through a third party carrier)
for Executive, her spouse and any children, for three years following the
Termination Date, and (B) thereafter, to the extent COBRA shall be applicable to
the Company, continuation of health benefits for such persons at Executive's
cost, for a period of 18 months or such longer period as may be applicable under
the Company's policies then in effect, provided the Executive makes the
appropriate election and payments, (vii) continuation of Executive's automobile
benefits for one year following the Termination Date, and (viii) no other
compensation, severance or other benefits, except only that this provision shall
not limit any benefits otherwise available to Executive under Section 6(c) in
the case of a termination following a Change in Control. Notwithstanding the
foregoing, however, the Company shall not be required to continue to pay the
salary or bonus specified in clauses (i)(iii) or (iv) hereof for any period
following the Termination Date if Executive violates the noncompetition
agreement set forth in Section 11.


         (c) Change in Control.


            (i) Benefits. If during the term of this Agreement a "Change in
Control" occurs (as defined below), then Executive shall be entitled to receive
the following: (i) salary and vacation accrued through the date of the Change in
Control plus an amount equal to three years of Executive's salary as then in
effect, payable immediately upon the Change in Control, (ii) an amount equal to
three times Executive's target bonus for the fiscal year in which the Change in
Control occurs (as well as any unpaid bonus from the prior fiscal year), all
payable immediately upon the Change in Control, (iii) acceleration in full of
vesting of all outstanding stock options, TARPs and other equity arrangements
subject to vesting and held by Executive (and in this regard, all such options
and other exercisable rights held by Executive shall remain exercisable one year
following the date of the Change in Control, (iv) (A) continuation of group
health benefits at the Company's cost pursuant to the Company's standard
programs as in effect from time to time (or at the

                                      -3-

<PAGE>   4
Company's election substantially similar health benefits as in effect at the
Termination Date (if applicable), through a third party carrier) for Executive,
her spouse and any children, for three years following the date of the Change in
Control (even if Executive ceases employment), and (B) thereafter, to the extent
COBRA shall be applicable, continuation of health benefits for such persons at
Executive's cost, for a period of 18 months or such longer period as may be
applicable under the Company's policies then in effect, provided the Executive
makes the appropriate election and payments, and (v) no other compensation,
severance or other benefits.

         (ii) Additional Payments by the Company.

              A. If it is determined (as hereafter provided) that any payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such excise tax (such
tax or taxes, together with any such interest and penalties, are hereafter
collectively referred to as the "Excise Tax"), then Executive will be entitled
to receive an additional payment or payments (a "Gross-Up Payment") in an amount
such that, after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.


              B. Subject to the provisions of clause F below, all determinations
required to be made under this Section 6(c)(ii), including whether an Excise Tax
is payable by Executive and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, will be made by the
Company's independent certified public accountants prior to the Change in
Control (the "Accounting Firm"). The Company will direct the Accounting Firm to
submit its determination and detailed supporting calculations to both the
Company and Executive within 15 calendar days after the date of the Change in
Control or the date of Executive's termination of employment, if applicable, and
any other such time or times as may be requested by the Company or Executive. If
the Accounting Firm determines that any Excise Tax is payable by Executive, the
Company will pay the required Gross-Up Payment to Executive within five business
days after receipt of such determination and calculations. If the Accounting
Firm determines that no Excise Tax is payable by Executive, it will, at the same
time as it makes such determination, furnish Executive with an opinion that she
has substantial authority not to report any Excise Tax on her federal, state,
local income or other tax return. Any determination by the Accounting Firm as to
the amount of the Gross-Up Payment will be binding upon the Company and
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code (or any successor provision thereto) and the possibility of similar
uncertainty regarding applicable state or local tax law at the time of any
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made hereunder.
In the event that the Company exhausts or fails to pursue its remedies pursuant
to clause F below and Executive

                                      -4-

<PAGE>   5
thereafter is required to make a payment of any Excise Tax, the Company or
Executive may direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and Executive as promptly as
possible. Any such Underpayment will be promptly paid by the Company to, or for
the benefit of, Executive within twenty days after receipt of such determination
and calculations.


              C. The Company and Executive will each provide the Accounting Firm
access to and copies of any books, records and documents in the possession of
the Company or Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determination contemplated by clause B
above.

              D. The federal, state and local income or other tax returns filed
by Executive will be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
Executive. Executive will make proper payment of the amount of any Excise Tax,
and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of her federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of Executive's federal income tax return, or corresponding state
or local tax return, if relevant, the Accounting Firm determines that the amount
of the Gross-Up Payment should be reduced, Executive will within twenty days
thereafter pay to the Company the amount of such reduction.

              E. The fees and expenses of the Accounting Firm for its services
in connection with the determinations and calculations contemplated by clauses B
and D above will be borne by the Company. If such fees and expenses are
initially advanced by Executive, the Company will reimburse Executive the full
amount of such fees and expenses within twenty days after receipt from Executive
of a statement therefor and reasonable evidence of her payment thereof.


              F. Executive will notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of a Gross-Up Payment. Such notification will be given as promptly
as practicable but no later than 10 business days after Executive actually
receives notice of such claim and Executive will further apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid (in each case, to the extent known by Executive). Executive will not pay
such claim prior to the earlier of (i) the expiration of the 30-calendar-day
period following the date on which she gives such notice to the Company and (ii)
the date that any payment of amount with respect to such claim is due. If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive will:


                  (i) provide the Company with any written records or documents
         in her possession relating to such claim reasonably requested by the
         Company;
                                      -5-

<PAGE>   6
                  (ii) take such action in connection with contesting such claim
         as the Company will reasonably request in writing from time to time,
         including without limitation accepting legal representation with
         respect to such claim by an attorney competent in respect of the
         subject matter and reasonably selected by the Company;

                  (iii) cooperate with the Company in good faith in order
         effectively to contest such claim; and

                  (iv) permit the Company to participate in any proceedings
         relating to such claim;

provided, however, that the Company will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and will indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such representation and payment of
costs and expenses. Without limiting the foregoing provisions of this clause F,
the Company will control all proceedings taken in connection with the contest of
any claim contemplated by this clause F and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim (provided that Executive may
participate therein at her own cost and expense) and may, at its option, either
direct Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company will determine;
provided, however, that if the Company directs Executive to pay the tax claimed
and sue for a refund, the Company will advance the amount of such payment to
Executive on an interest-free basis and will indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such
advance; and provided further, however, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Executive with
respect to which the contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's control of any such contested
claim will be limited to issues with respect to which a Gross-Up Payment would
be payable hereunder and Executive will be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.


              G. If, after the receipt by Executive of an amount advanced by the
Company pursuant to clause F above, Executive receives any refund with respect
to such claim, Executive will (subject to the Company's complying with the
requirements of clause F above) within twenty days thereafter pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after any taxes applicable thereto). If, after the receipt by Executive of an
amount advanced by the Company pursuant to clause F above, a determination is
made that Executive will not be entitled to any refund with respect to such
claim and the Company does not notify Executive in writing of its intent to
contest such denial or refund prior to the expiration of 30 days after such
determination, then such advance will be forgiven and will not be required to be
repaid and the amount of such advance will offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid pursuant to this Section
6(c)(ii).


                                      -6-

<PAGE>   7
              (d) Termination for Disability. If at any time during the term of
this Agreement other than following a Change in Control to which Section 6(c)
applies Executive shall become unable to perform her duties as an employee as a
result of incapacity, which gives rise to termination of employment for
Disability, then in addition to salary and vacation accrued through the
Termination Date, Executive shall be entitled to receive the following: (i)
continued salary for a period of three years following the Termination Date,
payable in accordance with the Company's regular payroll schedule as in effect
from time to time, (ii) at the Termination Date, Executive's minimum target
bonus for the fiscal year in which the Termination Date occurs (plus any unpaid
bonus from the prior fiscal year), (iii) following the end of the fiscal year in
which the Termination Date occurs and management bonuses have been determined,
any bonus that would have been payable to Executive under the bonus plan in
excess of Executive's target bonus, (iv) acceleration in full of vesting of all
outstanding stock options held by Executive (and in this regard, all such
options and other exercisable rights held by Executive shall remain exercisable
one year following the Termination Date (v) (A) continuation of group health
benefits at the Company's cost pursuant to the Company's standard programs as in
effect from time to time (or at the Company's election substantially similar
health benefits as in effect at the Termination Date, through a third party
carrier) for Executive, her spouse and any children, for three years following
the Termination Date, and (B) thereafter, to the extent COBRA shall be
applicable to the Company, continuation of health benefits for such persons at
Executive's cost, for a period of 18 months or such longer period as may be
applicable under the Company's policies then in effect, provided the Executive
makes the appropriate election and payments, and (vi) no other compensation,
severance or other benefits, except only that this provision shall not limit any
benefits otherwise available to Executive under Section 6(c) in the case of a
termination following a Change in Control. Notwithstanding the foregoing,
however, the Company may deduct from the salary specified in clause (i) hereof
the amount of any payments then received by Executive under any disability
benefit program maintained by the Company.


              (e) Involuntary Termination for Business Reasons, Termination
following a Change in Control or Voluntary Termination. If (A) Executive is
terminated involuntarily for Business Reasons, or (B) Executive is terminated
involuntarily, is terminated in a Constructive Termination or is terminated upon
the Disability of Executive, in any such case following a Change in Control to
which Section 6(c) applies, then in addition to salary and accrued vacation
through the Termination Date, Executive or her representatives shall be entitled
to receive the following: (i) the right to exercise all stock options held by
Executive for thirty days following the Termination Date (or such longer period
as may be provided in the applicable stock option plan or agreement), but only
to the extent vested as of the Termination Date, (ii) to the extent COBRA shall
be applicable to the Company, continuation of group health plan benefits
pursuant to the Company's standard programs as in effect from time to time (or
at the Company's election continuation by the Company of substantially similar
group health benefits as in effect at the Termination Date, through a third
party carrier), for Executive, her spouse and any children, for a period of 18
months (or such longer period as may be applicable under the Company's policies
then in effect) following the Termination Date provided Executive makes the
appropriate election and payments, and (iii) no further severance, benefits or
other compensation, except only that this provision shall not limit any benefits
otherwise available to Executive under Section 6(c) in the case of a termination
following a Change in Control. If Executive voluntarily terminates her
employment (other than in the case of a Constructive Termination), then in
addition to salary and accrued vacation through the Termination 

                                      -7-

<PAGE>   8
Date, Executive or her representatives shall be entitled to receive the
following: (i) salary for eighteen months following the Termination Date, at the
rate then in effect, payable in accordance with the Company's regular payroll
schedule as in effect from time to time, (ii) the right to vest in all stock
options, restricted stock or other equity arrangements subject to vesting while
salary continues to be paid and the right to exercise all stock options held by
Executive for thirty days following the last date on which salary is paid (or
such longer period as may be provided in the applicable stock option plan or
agreement), but only to the extent vested as of the Termination Date, (iii) to
the extent COBRA shall be applicable to the Company, continuation of group
health plan benefits pursuant to the Company's standard programs as in effect
from time to time (or at the Company's election continuation by the Company of
substantially similar group health benefits as in effect at the Termination
Date, through a third party carrier), for Executive, her spouse and any
children, for a period of 18 months (or such longer period as may be applicable
under the Company's policies then in effect) following the Termination Date
provided Executive makes the appropriate election and payments, and (iv) no
further severance, benefits or other compensation, except only that this
provision shall not limit any benefits otherwise available to Executive under
Section 6(c) in the case of a termination following a Change in Control.

              (f) Termination Upon Death. If Executive's employment is
terminated because of death, then Executive's representatives shall be entitled
to receive the following: (i) salary and vacation accrued through the
Termination Date, (ii) a pro rata share of Executive's target bonus for the year
in which death occurs, based on the proportion of the fiscal year during which
Executive remained an Employee of the Company (plus any unpaid bonus from the
prior fiscal year), (iii) except in the case of any such termination following a
Change in Control to which Section 6(c) applies, acceleration in full of vesting
of all outstanding stock options, TARPs and other equity arrangements subject to
vesting and held by Executive (and in this regard, all such options and other
exercisable rights held by Executive shall remain exercisable for one year
following the Termination (iv) to the extent COBRA shall be applicable to the
Company, continuation of group health benefits pursuant to the Company's
standard programs as in effect from time to time (or at the Company's election
continuation by the Company of substantially similar group health benefits as in
effect at the Termination Date, through a third party carrier), for Executive's
spouse and any children for a period of 18 months (or such longer period as may
be applicable under the Company's policies then in effect) provided Executive's
estate makes the appropriate election and payments, (v) any benefits payable to
Executive or her representatives upon death under insurance or other programs
maintained by the Company for the benefit of the Executive, and (vi) no further
benefits or other compensation, except only that this provision shall not limit
any benefits otherwise available to Executive under Section 6(c) in the case of
a termination following a Change in Control.

              (g) Exclusivity. The provisions of this Section 6 are intended to
be and are exclusive and in lieu of any other rights or remedies to which
Executive or the Company may otherwise be entitled, either at law, tort or
contract, in equity, or under this Agreement, in the event of any termination of
Executive's employment. Executive shall be entitled to no benefits, compensation
or other payments or rights upon termination of employment other than those
benefits expressly set forth in paragraph (b), (c), (d), (e) or (f) of this
Section 6, whichever shall be applicable and those benefits required to be
provided by law.


                                      -8-

<PAGE>   9
              7. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:

                 (a) Business Reasons. "Business Reasons" means (i) gross
negligence, willful misconduct or other willful malfeasance by Executive in the
performance of her duties, (ii) Executive's conviction of a felony, or any other
criminal offense involving moral turpitude, (iii) Executive's material breach of
this Agreement, including without limitation any repeated breach of Sections 8
through 11 hereof, provided that, in the case of any such breach, the Board
provides written notice of breach to the Executive, specifically identifying the
manner in which the Board believes that Executive has materially breached this
Agreement, and Executive shall have the opportunity to cure such breach to the
reasonable satisfaction of the Board within thirty days following the delivery
of such notice. For purposes of this paragraph, no act or failure to act by
Executive shall be considered "willful" unless done or omitted to be done by
Executive in bad faith or without reasonable belief that Executive's action or
omission was in the best interests of the Company or its affiliates. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. The Board must notify Executive
of any event constituting Business Reasons within ninety days following the
Board's actual knowledge of its existence (which period shall be extended during
the period of any reasonable investigation conducted in good faith by or on
behalf of the Board) or such event shall not constitute Business Reasons under
this Agreement.


              (b) Disability. "Disability" shall mean that Executive has been
unable to perform her duties as an employee as the result of her incapacity due
to physical or mental illness, and such inability, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to Executive or Executive's legal
representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least sixty days written notice by the Company of its intention to terminate
Executive's employment. In the event that Executive resumes the performance of
substantially all of her duties hereunder before the termination of her
employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.

                 (c) Termination Date. "Termination Date" shall mean (i) if this
Agreement is terminated on account of death, the date of death; (ii) if this
Agreement is terminated for Disability, the date specified in Section 7(b);
(iii) if this Agreement is terminated by the Company, the date on which
indicated in a notice of termination is given to Executive by the Company in
accordance with Sections 6(a) and 12(a); (iv) if the Agreement is terminated by
Executive, the date indicated in a notice of termination given to the Company by
Executive in accordance with Sections 6(a) and 12(a); or (v) if this Agreement
expires by its terms, then the last day of the term of this Agreement.

                 (d) Constructive Termination. A "Constructive Termination"
shall be deemed to occur if (A) (1) Executive's position changes as a result of
an action by the Company such that (w) Executive shall no longer be an Executive
Vice President of the Company, or (x) Executive shall have duties and
responsibilities demonstrably less than those typically associated with a Chief
Marketing Officer or (2) Executive is required to relocate her place of
employment, other than a

                                      -9-

<PAGE>   10
relocation within fifty miles of Executive's current residence or the Company's
current Stamford headquarters, (3) there is a reduction in Executive's base
salary or target bonus (other than any such reduction or termination consistent
with a general reduction of pay across the executive staff as a group, as an
economic or strategic measure as a result of poor performance by the Company) or
(4) there occurs any other material breach of this Agreement by the Company
(other than a reduction of Executive's base salary or target bonus which is not
described in the immediately preceding clause (3)) after a written demand for
substantial performance is delivered to the Board by Executive which
specifically identifies the manner in which Executive believes that the Company
has materially breached this Agreement, and the Company has failed to cure such
breach to the reasonable satisfaction of Executive within thirty days following
the delivery of such notice and (B) within the ninety day period immediately
following an action described in clauses (A)(1) through (4), Executive elects to
terminate her employment voluntarily.


              (e) Change in Control. A "Change in Control" shall be deemed to
have occurred if:

                 (i) any "Person," as such term is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than (i) the Company, (ii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or (iii) any company
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
becomes the "Beneficial Owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing (A) in
the case of any Person filing as a "passive investor" on Schedule 13G under the
Exchange Act, 25% or more of the combined voting power of the Company's
then-outstanding securities (but only for so long as such Person continues to
report as a 13G passive investor), and (B) in the case of any Person not filing
or no longer filing as a 13G passive investor, 20% or more of the combined
voting power of the Company's then-outstanding securities;


                 (ii) during any period of twenty-four months (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
(i) a director nominated by a Person who has entered into an agreement with the
Company to effect a transaction described in Section (7)(e)(i), (iii) or (iv)
hereof, (ii) a director nominated by any Person (including the Company) who
publicly announces an intention to take or to consider taking actions
(including, but not limited to, an actual or threatened proxy contest) which if
consummated would constitute a Change in Control or (iii) a director nominated
by any Person who is the Beneficial Owner, directly or indirectly, of securities
of the Company representing 10% or more of the combined voting power of the
Company's securities) whose election by the Board or nomination for election by
the Company's stockholders was approved in advance by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at lease a majority
thereof;


                 (iii) the stockholders of the Company approve any transaction
or series of transactions under which the Company is merged or consolidated with
any other company, other than a merger or consolidation (A) which would result
in the voting securities of the Company

                                      -10-

<PAGE>   11
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 66 2/3% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation and (B) after which no Person holds 20% or more of
the combined voting power of the then-outstanding securities of the Company or
such surviving entity;

                 (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; or 

                 (v) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Change in Control has occurred.

                 (vi) Notwithstanding the foregoing, the issuance of shares of
the Company's common stock upon conversion of the Company's 6% Convertible
Subordinated Notes (as such notes may be amended, restated, refinanced,
supplemented or otherwise modified from time to time), which Notes were issued
pursuant to the Securities Purchase Agreement dated as of March 21, 2000 among
the Company and the purchasers party thereto, shall not constitute a Change of
Control for purposes of this Agreement.

              8. Confidential Information.


                 (a) Executive acknowledges that the Confidential Information
(as defined below) relating to the business of the Company and its subsidiaries
which Executive has obtained or will obtain during the course of her association
with the Company and subsidiaries and her performance under this Agreement are
the property of the Company and its subsidiaries. Executive agrees that she will
not disclose or use at any time, either during or after the Employment period,
any Confidential Information without the written consent of the Company, other
than proper disclosure or use in the performance of her duties hereunder.
Executive agrees to deliver to the Company at the end of the Employment Term, or
at any other time that the Company may request, all memoranda, notes, plans,
records, documentation and other materials (and copies thereof) containing
Confidential Information relating to the business of the Company and its
subsidiaries, no matter where such material is located and no matter what form
the material may be in, which Executive may then possess or have under her
control. If requested by the Company, Executive shall provide to the Company
written confirmation that all such materials have been delivered to the Company
or have been destroyed. Executive shall take all appropriate steps to safeguard
Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft.

                 (b) "Confidential Information" shall mean information which is
not generally known to the public and which is used, developed, or obtained by
the Company or its subsidiaries relating to the businesses of any of the Company
and its subsidiaries or the business of any customer thereof including, but not
limited to: products or services; fees, costs and pricing structure; designs;
analyses; formulae; drawings; photographs; reports; computer software, including
operating systems, applications, program listings, flow charts, manuals and
documentation; databases; accounting and business methods; inventions and new
developments and methods, whether patentable or



                                   -11-

<PAGE>   12
unpatentable and whether or not reduced to practice; all copyrightable works;
the customers of any of the Company and its subsidiaries and the Confidential
Information of any customer thereof; and all similar and related information in
whatever form. Confidential Information shall not include any information which
(i) was rightfully known by Executive prior to the Employment Term; (ii) is
publicly disclosed by law or in response to an order of a court or governmental
agency; (iii) becomes publicly available through no fault of Executive or (iv)
has been published in a form generally available to the public prior to the date
upon which Executive proposes to disclose such information. Information shall
not be deemed to have been published merely because individual portions of the
information have been separately published, but only if all the material
features comprising such information have been published in combination.

              9. Inventions and Patents. In the event that Executive, as a part
of Executive's activities on behalf of the Company, generates, authors or
contributes to any invention, new development or method, whether or not
patentable and whether or not reduced to practice, any copyrightable work, any
trade secret, any other Confidential Information, or any information that gives
any of the Company and its subsidiaries an advantage over any competitor, or
similar or related developments or information related to the present or future
business of any of the Company and its subsidiaries (collectively "Developments
and Information"), Executive acknowledges that all Developments and Information
are the exclusive property of the Company. Executive hereby assigns to the
Company, its nominees, successors or assigns, all rights, title and interest to
Developments and Information. Executive shall cooperate with the Company to
protect the interests of the Company and its subsidiaries in Developments and
Information. Executive shall execute and file any document related to any
Developments and Information requested by the Company including applications,
powers of attorney, assignments or other instruments which the Company deems
necessary to apply for any patent, copyright or other proprietary right in any
and all countries or to convey any right, title or interest therein to any of
the Company's nominees, successors or assigns.

              10. No Conflicts.

                 (a) Executive agrees that in her individual capacity she will
not enter into any agreement, arrangement or understanding, whether written or
oral, with any supplier, contractor, distributor, wholesaler, sales
representative, representative group or customer, relating to the business of
the Company or any of its subsidiaries, without the express written consent of
the Company.

                 (b) As long as Executive is employed by the Company or any of
its subsidiaries, Executive agrees that she will not, except with the express
written consent of the Company, become engaged in, render services for, or
permit her name to be used in connection with, any for-profit business other
than the business of the Company, any of its subsidiaries or any corporation or
partnership in which the Company or any of its subsidiaries have an equity
interest.


              11. Non-Competition Agreement.

                 (a) Executive acknowledges that her services are of a special,
unique and extraordinary value to the Company and that she has access to the
Company's trade secrets, Confidential Information and strategic plans of the
most valuable nature. Accordingly, Executive


                                      -12-

<PAGE>   13
agrees that during the term of this Agreement and for the period of three years
following the Termination Date, Executive shall not directly or indirectly own,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business competing with the businesses of the Company or
any of its subsidiaries as such businesses exist or are in process of
development on the Termination Date (as evidenced by written proposals, market
research or similar materials), including without limitation the publication of
periodic research and analysis of the information technology industries. Nothing
herein shall prohibit Executive from being a passive owner of not more than 1%
of the outstanding stock of any class of a corporation which is publicly traded,
so long as Executive has no active participation in the business of such
corporation.


                 (b) In addition, for a period of three years commencing on the
Termination Date, Executive shall not (i) directly or indirectly induce or
attempt to induce any employee of the Company or any subsidiary (other than her
own assistant) to leave the employ of the Company or such subsidiary, or in any
way interfere with the relationship between the Company or any subsidiary and
any employee thereof, (ii) hire directly or through another entity any person
who was an employee of the Company or any subsidiary at any time during the then
preceding 12 months, or (iii) directly or indirectly induce or attempt to induce
any customer, supplier, licensee or other business relation of the Company or
any subsidiary to cease doing business with the Company or such subsidiary, or
in any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any subsidiary.


                 (c) Executive agrees that these restrictions on competition and
solicitation shall be deemed to be a series of separate covenants not-to-compete
and a series of separate non-solicitation covenants for each month within the
specified periods, separate covenants not-to-compete and non-solicitation
covenants for each state within the United States and each country in the world,
and separate covenants not-to-compete for each area of competition. If any court
of competent jurisdiction shall determine any of the foregoing covenants to be
unenforceable with respect to the term thereof or the scope of the subject
matter or geography covered thereby, such remaining covenants shall nonetheless
be enforceable by such court against such other party or parties or upon such
shorter term or within such lesser scope as may be determined by the court to be
enforceable.



                 (d) Because Executive's services are unique and because
Executive has access to Confidential Information and strategic plans of the
Company of the most valuable nature, the parties agree that the covenants
contained in this Section 11 are necessary to protect the value of the business
of the Company and that a breach of any such covenant would result in
irreparable and continuing damage for which there would be no adequate remedy at
law. The parties agree therefore that in the event of a breach or threatened
breach of this Agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
hereof.

              12. Miscellaneous Provisions.


                 (a) Notice. Notices and all other communications contemplated
by this Agreement shall be in writing, shall be effective when given, and in any
event shall be deemed to
                                      -13-

<PAGE>   14
have been duly given (i) when delivered, if personally delivered, (ii) three
business days after deposit in the U.S. mail, if mailed by U.S. registered or
certified mail, return receipt requested, or (iii) one business day after the
business day of deposit with Federal Express or similar overnight courier, if so
delivered, freight prepaid. In the case of Executive, notices shall be addressed
to her at the home address which he most recently communicated to the Company in
writing. In the case of the Company, notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Corporate Secretary.


                 (b) Notice of Termination. Any termination by the Company or
Executive shall be communicated by a notice of termination to the other party
hereto given in accordance with paragraph (a) hereof. Such notice shall indicate
the specific termination provision in this Agreement relied upon.


                 (c) Successors.

                 (i) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall be entitled to assume the rights and shall be obligated to
assume the obligations of the Company under this Agreement and shall agree to
perform the Company's obligations under this Agreement in the same manner and to
the same extent as the Company would be required to perform such obligations in
the absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to the Company's business and/or assets
which executes and delivers the assumption agreement described in this
subsection (i) or which becomes bound by the terms of this Agreement by
operation of law.


                 (ii) Executive's Successors. The terms of this Agreement and
all rights of Executive hereunder shall inure to the benefit of, and be
enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

                 (iii) No Other Assignment of Benefits. Except as provided in
this Section 12(c), the rights of any person to payments or benefits under this
Agreement shall not be made subject to option or assignment, either by voluntary
or involuntary assignment or by operation of law, including (without limitation)
bankruptcy, garnishment, attachment or other creditor's process, and any action
in violation of this subsection (iii) shall be void.

              (d) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by Executive and by an authorized officer of the Company
(other than Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.


              (e) Entire Agreement. This Agreement shall supersede any and all
prior agreements, representations or understandings (whether oral or written and
whether express or implied) between the parties with respect to the subject
matter hereof.

                                      -14-

<PAGE>   15
              (f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.


                 (g) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Stamford, Connecticut, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. No party shall be entitled to seek or be awarded
punitive damages. All attorneys fees and costs shall be allocated or apportioned
as agreed by the parties or, in the absence of an agreement, in such manner as
the arbitrator or court shall determine to be appropriate to reflect the final
decision of the deciding body as compared to the initial positions in
arbitration of each party. This Agreement shall be construed in accordance with
and governed by the laws of the State of Connecticut as they apply to contracts
entered into and wholly to be performed within such State by residents thereof.


                 (h) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable taxes.

                 (i) Indemnification. In the event Executive is made, or
threatened to be made, a party to any legal action or proceeding, whether civil
or criminal, by reason of the fact that Executive is or was a director or
officer of the Company or serves or served any other entity of which the Company
owns 50% or more of the equity in any capacity, Executive shall be indemnified
by the Company, and the Company shall pay Executive's related expenses when and
as incurred, all to the full extent permitted by law, pursuant to Executive's
existing indemnification agreement with the Company in the form made available
to all Executive and all other officers and directors or, if it provides greater
protection to Executive, to the maximum extent allowed under the law of the
State of the Company's incorporation.

                 (j) Legal Fees. The Company will pay directly the fees and
expenses of counsel retained by Executive in connection with the preparation,
negotiation and execution of this Agreement.



                 (k) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.



                                      -15-

<PAGE>   16
         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.


                                                 GARTNER GROUP, INC.


                                                 By:
                                                 ------------------------
                                                 Michael D. Fleisher
                                                 Chief Executive Officer


                                                 REGINA M. PAOLILLO

                                                 ------------------------












<PAGE>   1
                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement") is entered into on August
7, 2000, by and between Robert E. Knapp, an individual ("Executive") and Gartner
Group, Inc., a Delaware corporation (the "Company").

                                    RECITALS

         A. The Company and the Executive desire to set forth their agreement
pursuant to which the Executive will become the Chief Marketing Officer of the
Company effective August 7, 2000 and to provide for Executive's employment by
the Company upon the terms and conditions set forth herein.

                                    AGREEMENT

         THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereby agree as follows:

         1. Employment. Executive will serve as Chief Marketing Officer of the
Company for the Employment Term specified in Section 2 below. Executive will
report solely to the Chief Executive Officer of the Company and will render such
services consistent with the foregoing role as the Chief Executive Officer or
Board of Directors may from time to time direct. Executive's office shall be
located at the executive offices of the Company in Stamford, Connecticut.
Executive may (i) serve on corporate, civic or charitable boards or committees
and (ii) deliver lectures, fulfill speaking engagements
 or teach at educational
institutions, to the extent consistent with the Company's policies (as
applicable) or disclosed to the Chief Executive Officer and that the Chief
Executive Officer determines in good faith do not interfere with the performance
of Executive's responsibilities hereunder.

         2. Term. The employment of Executive pursuant to this Agreement shall
continue through September 30, 2003 (the "Employment Term"), unless extended or
earlier terminated as provided in this Agreement. The Employment Term shall
automatically be extended for additional one-year periods commencing on October
1, 2003 and continuing each year thereafter, unless either Executive or the
Company gives the other written notice, in accordance with Section 12(a) and at
least 90 days prior to the then scheduled expiration of the Employment Term, of
such party's intention not to extend the Employment Term.

         3. Salary. As compensation for the services rendered by Executive under
this Agreement, the Company shall pay to Executive a base salary initially equal
to $27,083 per month ("Base Salary") for fiscal year 2000, payable to Executive
in accordance with the Company's payroll practices as in effect from time to
time during the Employment Term. The Base Salary shall be subject to adjustment
by the Board of Directors of the Company or the Compensation Committee of the
Board of Directors, in the sole discretion of the Board or such Committee, on an
annual basis; provided, however, that Executive's salary may not be decreased
other than any such reduction consistent with a general reduction of pay across
the executive staff as a group as an economic or strategic measure due to poor
financial performance by the Company.

<PAGE>   2
         4. Bonus. In addition to his Base Salary, Executive shall be entitled
to participate in the Company's executive bonus program. The Board or its
Compensation Committee shall establish the annual target bonus, in the
discretion of the Board or such Committee, and shall be payable based on
achievement of specified Company and individual objectives. Executive's target
bonus for the fiscal year ending September 30, 2000 shall be $250,000, prorated
based on the portion of the year employed. Executive's target bonus for the year
ending September 30, 2001 shall be between $250,000 and $500,000. Such bonus
amounts shall be subject to annual adjustment by the Board or the Compensation
Committee of the Board, in the sole discretion of the Board or such Committee,
on an annual basis; provided, however, that Executive's target bonus may not be
decreased without Executive's consent other than any such reduction consistent
with a general reduction of pay across the executive staff as a group, as an
economic or strategic measure due to poor financial performance by the Company.
Employee will receive a one-time sign on bonus in the amount of $59,000.

         5.       Executive Benefits.

                  (a) Stock Options. You will be granted by the Compensation
Committee options to purchase an aggregate of 250,000 shares of Class A Common
Stock of the Company ("Stock") (the "Fiscal 2000 Option Grant") under the
Company's 1991 Stock Option Plan (the "1991 Plan"). The Fiscal 2000 Option Grant
shall vest 25% one year after grant and 2.08% per month thereafter, subject to
continuous status as an employee or consultant (such that all the options
subject to each grant shall have vested 4 years from the date of grant assuming
continuous service); provided that vesting of all or a portion of such options
shall accelerate upon certain events as described below. Shares issuable under
the Company's 1991 Plan (including the shares issuable on exercise of
Executive's Fiscal 2000 Option grant) have been registered on Form S-8 under the
Securities Act of 1933, as amended.

                  In the event that during the Employment Term the Company
should create a material spin-off entity in which the Company intends to offer
an equity stake to third party investors or the public and in which executives
or employees of the Company or such entity are to receive capital stock or
options to purchase capital stock, then Executive shall be granted capital stock
in such entity, or an option to purchase such capital stock, in such amounts as
the Board of Directors of the Company or its compensation Committee shall deem
appropriate in connection with the formation or spin-off.

                   (b) Other Employee and Executive Benefits. Executive will be
entitled to receive all benefits provided to senior executives, executives and
employees of the Company generally from time to time, including medical, dental,
life insurance and long-term disability, and the executive split-dollar life
insurance and executive disability plan, in each case so long as and to the
extent the same exist; provided, that in respect to each such plan Executive is
otherwise eligible and insurable in accordance with the terms of such plans.
Executive will also be entitled to automobile benefits pursuant to a policy to
be implemented by the Company with the concurrence of the Chairman of the
Compensation Committee of the Board of Directors.

                   (c) Vacation, Sick Leave, Holidays and Sabbatical. Executive
shall be entitled to vacation, sick leave, holidays and sabbatical in accordance
with the policies of the Company as they 


                                      -2-

<PAGE>   3
exist from time to time. Executive understands that under the current policy he
is entitled to up to four (4) weeks vacation per calendar year. Vacation which
is not used during any calendar year will roll over to the following year only
to the extent provided under the Company's vacation policies as they exist from
time to time.

         6.       Severance Benefits.

                  (a) At Will Employment. Executive's employment shall be "at
will." Either the Company or Executive may terminate this agreement and
Executive's employment at any time, with or without Business Reasons (as defined
in Section 7(a) below), in its or his sole discretion, upon sixty days' prior
written notice of termination.

                  (b) Involuntary Termination. If at any time during the term of
this Agreement, other than following a Change in Control to which Section 6(c)
applies, the Company terminates the employment of Executive involuntarily and
without Business Reasons or a Constructive Termination occurs, then in addition
to salary and vacation accrued through the Termination Date, Executive shall be
entitled to receive the following: (i) continued salary for a period of one and
one-half years following the Termination Date at the rate then in effect,
payable in accordance with the Company's regular payroll schedule as in effect
from time to time, (ii) at the Termination Date Executive's minimum target bonus
for the fiscal year in which the Termination Date occurs plus any unpaid bonus
from the prior fiscal year, (iii) following the end of the fiscal year in which
the Termination Date occurs and management bonuses have been determined, a pro
rata share (based on the proportion of the fiscal year during which Executive
remained an employee of the Company) of the bonus that would have been payable
to Executive under the bonus plan in excess of Executive's minimum target bonus
for the fiscal year, (iv) following the end of the first fiscal year following
the fiscal year in which the Termination Date occurs, Executive's minimum target
bonus for such following fiscal year (or, if the target bonus for such year was
not previously set, then Executive's minimum target bonus for the fiscal year in
which the Termination Date occurred), (v) acceleration in full of vesting of all
outstanding stock options, TARPs and other equity arrangements subject to
vesting and held by Executive (and in this regard, all such options and other
exercisable rights held by Executive shall remain exercisable for one year
following the Termination Date, (vi) (A) for one and one-half years following
the Termination Date, continuation of group health benefits at the Company's
cost pursuant to the Company's standard programs as in effect from time to time
(or at the Company's election substantially similar health benefits as in effect
at the Termination Date, through a third party carrier) for Executive, his
spouse and any children, and (B) thereafter, to the extent COBRA shall be
applicable to the Company, continuation of health benefits for such persons at
Executive's cost, for a period of 18 months or such longer period as may be
applicable under the Company's policies then in effect, provided the Executive
makes the appropriate election and payments, (vii) continuation of Executive's
auto benefits for one year following the Termination Date, and (viii) no other
compensation, severance or other benefits, except only that this provision shall
not limit any benefits otherwise available to Executive under Section 6(c) in
the case of a termination following a Change in Control. Notwithstanding the
foregoing, however, the Company shall not be required to continue to pay the
salary or bonus specified in clauses (i)(iii) or (iv) hereof for any period
following the Termination Date if Executive violates the noncompetition
agreement set forth in Section 11.


                                      -3-

<PAGE>   4
                  (c)      Change in Control.

                                    (i) Benefits. If during the term of this
Agreement a "Change in Control" occurs (as defined below), then Executive shall
be entitled to receive the following: (i) salary and vacation accrued through
the date of the Change in Control plus an amount equal to one and one-half years
of Executive's salary as then in effect, payable immediately upon the Change in
Control, (ii) an amount equal to one and one-half times Executive's target bonus
for the fiscal year in which the Change in Control occurs (as well as any unpaid
bonus from the prior fiscal year), all payable immediately upon the Change in
Control, (iii) acceleration in full of vesting of all outstanding stock options,
TARPs and other equity arrangements subject to vesting and held by Executive
(and in this regard, all such options and other exercisable rights held by
Executive shall remain exercisable one year following the date of the Change in
Control, (iv) (A) continuation of group health benefits at the Company's cost
pursuant to the Company's standard programs as in effect from time to time (or
at the Company's election substantially similar health benefits as in effect at
the Termination Date (if applicable), through a third party carrier) for
Executive, his spouse and any children, for one and one-half years following the
date of the Change in Control (even if Executive ceases employment), and (B)
thereafter, to the extent COBRA shall be applicable, continuation of health
benefits for such persons at Executive's cost, for a period of 18 months or such
longer period as may be applicable under the Company's policies then in effect,
provided the Executive makes the appropriate election and payments, and (v) no
other compensation, severance or other benefits.

                                    (ii) Additional Payments by the Company.

                                          A. If it is determined (as hereafter
provided) that any payment or distribution by the Company to or for the benefit
of Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar right, or the
lapse or termination of any restriction on or the vesting or exercisability of
any of the foregoing (a "Payment"), would be subject to the excise tax imposed
by Section 4999 of the Code (or any successor provision thereto) or to any
similar tax imposed by state or local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any such interest
and penalties, are hereafter collectively referred to as the "Excise Tax"), then
Executive will be entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.

                                          B. Subject to the provisions of clause
F below, all determinations required to be made under this Section 6(c)(ii),
including whether an Excise Tax is payable by Executive and the amount of such
Excise Tax and whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, will be made by the Company's independent certified public
accountants prior to the Change in Control (the "Accounting Firm"). The Company
will direct the Accounting Firm to submit its determination and detailed
supporting calculations to both the Company and Executive within 15 calendar
days after the date of the Change in Control or the date of Executive's
termination of employment, if applicable, and any other such time or times as
may be 


                                      -4-

<PAGE>   5
requested by the Company or Executive. If the Accounting Firm determines that
any Excise Tax is payable by Executive, the Company will pay the required
Gross-Up Payment to Executive within five business days after receipt of such
determination and calculations. If the Accounting Firm determines that no Excise
Tax is payable by Executive, it will, at the same time as it makes such
determination, furnish Executive with an opinion that he has substantial
authority not to report any Excise Tax on his federal, state, local income or
other tax return. Any determination by the Accounting Firm as to the amount of
the Gross-Up Payment will be binding upon the Company and Executive. As a result
of the uncertainty in the application of Section 4999 of the Code (or any
successor provision thereto) and the possibility of similar uncertainty
regarding applicable state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to clause F
below and Executive thereafter is required to make a payment of any Excise Tax,
the Company or Executive may direct the Accounting Firm to determine the amount
of the Underpayment that has occurred and to submit its determination and
detailed supporting calculations to both the Company and Executive as promptly
as possible. Any such Underpayment will be promptly paid by the Company to, or
for the benefit of, Executive within twenty days after receipt of such
determination and calculations.

                                          C. The Company and Executive will each
provide the Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or Executive, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the
Accounting Firm in connection with the preparation and issuance of the
determination contemplated by clause B above.

                                          D. The federal, state and local income
or other tax returns filed by Executive will be prepared and filed on a
consistent basis with the determination of the Accounting Firm with respect to
the Excise Tax payable by Executive. Executive will make proper payment of the
amount of any Excise Tax, and at the request of the Company, provide to the
Company true and correct copies (with any amendments) of his federal income tax
return as filed with the Internal Revenue Service and corresponding state and
local tax returns, if relevant, as filed with the applicable taxing authority,
and such other documents reasonably requested by the Company, evidencing such
payment. If prior to the filing of Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, Executive
will within twenty days thereafter pay to the Company the amount of such
reduction.

                                          E. The fees and expenses of the
Accounting Firm for its services in connection with the determinations and
calculations contemplated by clauses B and D above will be borne by the Company.
If such fees and expenses are initially advanced by Executive, the Company will
reimburse Executive the full amount of such fees and expenses within twenty days
after receipt from Executive of a statement therefor and reasonable evidence of
his payment thereof.

                                          F. Executive will notify the Company
in writing of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up Payment. Such
notification will be given as promptly as practicable but no later than 10


                                      -5-

<PAGE>   6
business days after Executive actually receives notice of such claim and
Executive will further apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid (in each case, to the extent
known by Executive). Executive will not pay such claim prior to the earlier of
(i) the expiration of the 30-calendar-day period following the date on which he
gives such notice to the Company and (ii) the date that any payment of amount
with respect to such claim is due. If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive will:

                                                 (i) provide the Company with
                                    any written records or documents in his
                                    possession relating to such claim reasonably
                                    requested by the Company;

                                                 (ii) take such action in
                                    connection with contesting such claim as the
                                    Company will reasonably request in writing
                                    from time to time, including without
                                    limitation accepting legal representation
                                    with respect to such claim by an attorney
                                    competent in respect of the subject matter
                                    and reasonably selected by the Company;

                                                 (iii) cooperate with the
                                    Company in good faith in order effectively
                                    to contest such claim; and

                                                 (iv) permit the Company to
                                    participate in any proceedings relating to
                                    such claim;

provided, however, that the Company will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and will indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such representation and payment of
costs and expenses. Without limiting the foregoing provisions of this clause F,
the Company will control all proceedings taken in connection with the contest of
any claim contemplated by this clause F and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim (provided that Executive may
participate therein at his own cost and expense) and may, at its option, either
direct Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company will determine;
provided, however, that if the Company directs Executive to pay the tax claimed
and sue for a refund, the Company will advance the amount of such payment to
Executive on an interest-free basis and will indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such
advance; and provided further, however, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Executive with
respect to which the contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's control of any such contested
claim will be limited to issues with respect to which a Gross-Up Payment would
be payable hereunder and Executive will be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.


                                      -6-

<PAGE>   7
                                    G. If, after the receipt by Executive of an
amount advanced by the Company pursuant to clause F above, Executive receives
any refund with respect to such claim, Executive will (subject to the Company's
complying with the requirements of clause F above) within twenty days thereafter
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company pursuant to clause F above, a
determination is made that Executive will not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial or refund prior to the expiration of 30 days
after such determination, then such advance will be forgiven and will not be
required to be repaid and the amount of such advance will offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid pursuant to this
Section 6(c)(ii).

                  (d) Termination for Disability. If at any time during the term
of this Agreement other than following a Change in Control to which Section 6(c)
applies Executive shall become unable to perform his duties as an employee as a
result of incapacity, which gives rise to termination of employment for
Disability, then in addition to salary and vacation accrued through the
Termination Date, Executive shall be entitled to receive the following: (i)
continued salary for a period of one and one-half years following the
Termination Date, payable in accordance with the Company's regular payroll
schedule as in effect from time to time, (ii) at the Termination Date,
Executive's minimum target bonus for the fiscal year in which the Termination
Date occurs (plus any unpaid bonus from the prior fiscal year), (iii) following
the end of the fiscal year in which the Termination Date occurs and management
bonuses have been determined, any bonus that would have been payable to
Executive under the bonus plan in excess of Executive's target bonus, (iv)
acceleration in full of vesting of all outstanding stock options held by
Executive (and in this regard, all such options and other exercisable rights
held by Executive shall remain exercisable one year following the Termination
Date (v) (A) for one and one-half years following the Termination Date,
continuation of group health benefits at the Company's cost pursuant to the
Company's standard programs as in effect from time to time (or at the Company's
election substantially similar health benefits as in effect at the Termination
Date, through a third party carrier) for Executive, his spouse and any children,
and (B) thereafter, to the extent COBRA shall be applicable to the Company,
continuation of health benefits for such persons at Executive's cost, for a
period of 18 months or such longer period as may be applicable under the
Company's policies then in effect, provided the Executive makes the appropriate
election and payments, and (vi) no other compensation, severance or other
benefits, except only that this provision shall not limit any benefits otherwise
available to Executive under Section 6(c) in the case of a termination following
a Change in Control. Notwithstanding the foregoing, however, the Company may
deduct from the salary specified in clause (i) hereof the amount of any payments
then received by Executive under any disability benefit program maintained by
the Company.

                  (e) Voluntary Termination, Involuntary Termination for
Business Reasons or Termination following a Change in Control. If (A) Executive
voluntarily terminates his employment (other than in the case of a Constructive
Termination), (B) Executive is terminated involuntarily for Business Reasons, or
(C) Executive is terminated involuntarily, is terminated in a Constructive
Termination or is terminated upon the Disability of Executive, in any such case
following a Change in Control to which Section 6(c) applies, then in any such
event Executive or his representatives shall be entitled to receive the
following: (i) salary and accrued vacation through the Termination 


                                      -7-

<PAGE>   8
Date only, (ii) the right to exercise all stock options held by Executive for
thirty days following the Termination Date (or such longer period as may be
provided in the applicable stock option plan or agreement), but only to the
extent vested as of the Termination Date, (iii) to the extent COBRA shall be
applicable to the Company, continuation of group health plan benefits pursuant
to the Company's standard programs as in effect from time to time (or at the
Company's election continuation by the Company of substantially similar group
health benefits as in effect at the Termination Date, through a third party
carrier), for Executive, his spouse and any children, for a period of 18 months
(or such longer period as may be applicable under the Company's policies then in
effect) following the Termination Date provided Executive makes the appropriate
election and payments, and (iv) no further severance, benefits or other
compensation, except only that this provision shall not limit any benefits
otherwise available to Executive under Section 6(c) in the case of a termination
following a Change in Control.

                  (f) Termination Upon Death. If Executive's employment is
terminated because of death, then Executive's representatives shall be entitled
to receive the following: (i) salary and vacation accrued through the
Termination Date, (ii) a pro rata share of Executive's target bonus for the year
in which death occurs, based on the proportion of the fiscal year during which
Executive remained an Employee of the Company (plus any unpaid bonus from the
prior fiscal year), (iii) except in the case of any such termination following a
Change in Control to which Section 6(c) applies, acceleration in full of vesting
of all outstanding stock options, TARPs and other equity arrangements subject to
vesting and held by Executive (and in this regard, all such options and other
exercisable rights held by Executive shall remain exercisable for one year
following the Termination (iv) to the extent COBRA shall be applicable to the
Company, continuation of group health benefits pursuant to the Company's
standard programs as in effect from time to time (or at the Company's election
continuation by the Company of substantially similar group health benefits as in
effect at the Termination Date, through a third party carrier), for Executive's
spouse and any children for a period of 18 months (or such longer period as may
be applicable under the Company's policies then in effect) provided Executive's
estate makes the appropriate election and payments, (v) any benefits payable to
Executive or his representatives upon death under insurance or other programs
maintained by the Company for the benefit of the Executive, and (vi) no further
benefits or other compensation, except only that this provision shall not limit
any benefits otherwise available to Executive under Section 6(c) in the case of
a termination following a Change in Control.

                  (g) Exclusivity. The provisions of this Section 6 are intended
to be and are exclusive and in lieu of any other rights or remedies to which
Executive or the Company may otherwise be entitled, either at law, tort or
contract, in equity, or under this Agreement, in the event of any termination of
Executive's employment. Executive shall be entitled to no benefits, compensation
or other payments or rights upon termination of employment other than those
benefits expressly set forth in paragraph (b), (c), (d), (e) or (f) of this
Section 6, whichever shall be applicable and those benefits required to be
provided by law.

         7. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:

                  (a) Business Reasons. "Business Reasons" means (i) gross
negligence, willful misconduct or other willful malfeasance by Executive in the
performance of his duties, (ii) 


                                      -8-

<PAGE>   9
Executive's conviction of a felony, or any other criminal offense involving
moral turpitude, (iii) Executive's material breach of this Agreement, including
without limitation any repeated breach of Sections 8 through 11 hereof, provided
that, in the case of any such breach, the Board provides written notice of
breach to the Executive, specifically identifying the manner in which the Board
believes that Executive has materially breached this Agreement, and Executive
shall have the opportunity to cure such breach to the reasonable satisfaction of
the Board within thirty days following the delivery of such notice. For purposes
of this paragraph, no act or failure to act by Executive shall be considered
"willful" unless done or omitted to be done by Executive in bad faith or without
reasonable belief that Executive's action or omission was in the best interests
of the Company or its affiliates. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by Executive in good faith and in the best interests of
the Company. The Board must notify Executive of any event constituting Business
Reasons within ninety days following the Board's actual knowledge of its
existence (which period shall be extended during the period of any reasonable
investigation conducted in good faith by or on behalf of the Board) or such
event shall not constitute Business Reasons under this Agreement.

                  (b) Disability. "Disability" shall mean that Executive has
been unable to perform his duties as an employee as the result of his incapacity
due to physical or mental illness, and such inability, at least 26 weeks after
its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to Executive or
Executive's legal representative (such Agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be
effected after at least sixty days written notice by the Company of its
intention to terminate Executive's employment. In the event that Executive
resumes the performance of substantially all of his duties hereunder before the
termination of his employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.

                  (c) Termination Date. "Termination Date" shall mean (i) if
this Agreement is terminated on account of death, the date of death; (ii) if
this Agreement is terminated for Disability, the date specified in Section 7(b);
(iii) if this Agreement is terminated by the Company, the date on which
indicated in a notice of termination is given to Executive by the Company in
accordance with Sections 6(a) and 12(a); (iv) if the Agreement is terminated by
Executive, the date indicated in a notice of termination given to the Company by
Executive in accordance with Sections 6(a) and 12(a); or (v) if this Agreement
expires by its terms, then the last day of the term of this Agreement.

                  (d) Constructive Termination. A "Constructive Termination"
shall be deemed to occur if (A) (1) Executive's position changes as a result of
an action by the Company such that (w) Executive shall no longer be an Executive
Vice President of the Company, or (x) Executive shall have duties and
responsibilities demonstrably less than those typically associated with a Chief
Marketing Officer or (2) Executive is required to relocate his place of
employment, other than a relocation within fifty miles of Executive's current
residence or the Company's current Stamford headquarters, (3) there is a
reduction in Executive's base salary or target bonus (other than any such
reduction or termination consistent with a general reduction of pay across the
executive staff as a group, as an economic or strategic measure as a result of
poor performance by the Company) or (4) there occurs any other material breach
of this Agreement by the Company (other than a reduction of 


                                      -9-

<PAGE>   10
Executive's base salary or target bonus which is not described in the
immediately preceding clause (3)) after a written demand for substantial
performance is delivered to the Board by Executive which specifically identifies
the manner in which Executive believes that the Company has materially breached
this Agreement, and the Company has failed to cure such breach to the reasonable
satisfaction of Executive within thirty days following the delivery of such
notice and (B) within the ninety day period immediately following an action
described in clauses (A)(1) through (4), Executive elects to terminate his
employment voluntarily.

                  (e) Change in Control. A "Change in Control" shall be deemed
to have occurred if:

                           (i) any "Person," as such term is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (other than (i) the Company, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
(iii) any company owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company), becomes the "Beneficial Owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
(A) in the case of any Person filing as a "passive investor" on Schedule 13G
under the Exchange Act, 25% or more of the combined voting power of the
Company's then-outstanding securities (but only for so long as such Person
continues to report as a 13G passive investor), and (B) in the case of any
Person not filing or no longer filing as a 13G passive investor, 20% or more of
the combined voting power of the Company's then-outstanding securities;

                           (ii) during any period of twenty-four months (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than (i) a director nominated by a Person who has entered into an
agreement with the Company to effect a transaction described in Section
(7)(e)(i), (iii) or (iv) hereof, (ii) a director nominated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in Control or
(iii) a director nominated by any Person who is the Beneficial Owner, directly
or indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company's securities) whose election by the Board
or nomination for election by the Company's stockholders was approved in advance
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at lease a majority thereof;

                           (iii) the stockholders of the Company approve any
transaction or series of transactions under which the Company is merged or
consolidated with any other company, other than a merger or consolidation (A)
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 66 2/3% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation and (B) after which no Person holds 20% or more of 


                                      -10-

<PAGE>   11
the combined voting power of the then-outstanding securities of the Company or
such surviving entity;

                           (iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
or

                           (v) the Board adopts a resolution to the effect that,
for purposes of this Agreement, a Change in Control has occurred.

                           (vi) Notwithstanding the foregoing, the issuance of
shares of the Company's common stock upon conversion of the Company's 6%
Convertible Subordinated Notes (as such notes may be amended, restated,
refinanced, supplemented or otherwise modified from time to time), which Notes
were issued pursuant to the Securities Purchase Agreement dated as of March 21,
2000 among the Company and the purchasers party thereto, shall not constitute a
Change of Control for purposes of this Agreement.

         8.       Confidential Information.

                  (a) Executive acknowledges that the Confidential Information
(as defined below) relating to the business of the Company and its subsidiaries
which Executive has obtained or will obtain during the course of his association
with the Company and subsidiaries and his performance under this Agreement are
the property of the Company and its subsidiaries. Executive agrees that he will
not disclose or use at any time, either during or after the Employment period,
any Confidential Information without the written consent of the Company, other
than proper disclosure or use in the performance of his duties hereunder.
Executive agrees to deliver to the Company at the end of the Employment Term, or
at any other time that the Company may request, all memoranda, notes, plans,
records, documentation and other materials (and copies thereof) containing
Confidential Information relating to the business of the Company and its
subsidiaries, no matter where such material is located and no matter what form
the material may be in, which Executive may then possess or have under his
control. If requested by the Company, Executive shall provide to the Company
written confirmation that all such materials have been delivered to the Company
or have been destroyed. Executive shall take all appropriate steps to safeguard
Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft.

                  (b) "Confidential Information" shall mean information which is
not generally known to the public and which is used, developed, or obtained by
the Company or its subsidiaries relating to the businesses of any of the Company
and its subsidiaries or the business of any customer thereof including, but not
limited to: products or services; fees, costs and pricing structure; designs;
analyses; formulae; drawings; photographs; reports; computer software, including
operating systems, applications, program listings, flow charts, manuals and
documentation; databases; accounting and business methods; inventions and new
developments and methods, whether patentable or unpatentable and whether or not
reduced to practice; all copyrightable works; the customers of any of the
Company and its subsidiaries and the Confidential Information of any customer
thereof; and all similar and related information in whatever form. Confidential
Information shall not include any information which (i) was rightfully known by
Executive prior to the Employment Term; (ii) is 


                                      -11-

<PAGE>   12
publicly disclosed by law or in response to an order of a court or governmental
agency; (iii) becomes publicly available through no fault of Executive or (iv)
has been published in a form generally available to the public prior to the date
upon which Executive proposes to disclose such information. Information shall
not be deemed to have been published merely because individual portions of the
information have been separately published, but only if all the material
features comprising such information have been published in combination.

         9. Inventions and Patents. In the event that Executive, as a part of
Executive's activities on behalf of the Company, generates, authors or
contributes to any invention, new development or method, whether or not
patentable and whether or not reduced to practice, any copyrightable work, any
trade secret, any other Confidential Information, or any information that gives
any of the Company and its subsidiaries an advantage over any competitor, or
similar or related developments or information related to the present or future
business of any of the Company and its subsidiaries (collectively "Developments
and Information"), Executive acknowledges that all Developments and Information
are the exclusive property of the Company. Executive hereby assigns to the
Company, its nominees, successors or assigns, all rights, title and interest to
Developments and Information. Executive shall cooperate with the Company to
protect the interests of the Company and its subsidiaries in Developments and
Information. Executive shall execute and file any document related to any
Developments and Information requested by the Company including applications,
powers of attorney, assignments or other instruments which the Company deems
necessary to apply for any patent, copyright or other proprietary right in any
and all countries or to convey any right, title or interest therein to any of
the Company's nominees, successors or assigns.

         10.      No Conflicts.

                  (a) Executive agrees that in his individual capacity he will
not enter into any agreement, arrangement or understanding, whether written or
oral, with any supplier, contractor, distributor, wholesaler, sales
representative, representative group or customer, relating to the business of
the Company or any of its subsidiaries, without the express written consent of
the Company.

                  (b) As long as Executive is employed by the Company or any of
its subsidiaries, Executive agrees that he will not, except with the express
written consent of the Company, become engaged in, render services for, or
permit his name to be used in connection with, any for-profit business other
than the business of the Company, any of its subsidiaries or any corporation or
partnership in which the Company or any of its subsidiaries have an equity
interest.

         11.      Non-Competition Agreement.

                  (a) Executive acknowledges that his services are of a special,
unique and extraordinary value to the Company and that he has access to the
Company's trade secrets, Confidential Information and strategic plans of the
most valuable nature. Accordingly, Executive agrees that during the term of this
Agreement and for the period of three years following the Termination Date,
Executive shall not directly or indirectly own, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or any of its subsidiaries as such
businesses exist or are in process of 


                                      -12-

<PAGE>   13
development on the Termination Date (as evidenced by written proposals, market
research or similar materials), including without limitation the publication of
periodic research and analysis of the information technology industries. Nothing
herein shall prohibit Executive from being a passive owner of not more than 1%
of the outstanding stock of any class of a corporation which is publicly traded,
so long as Executive has no active participation in the business of such
corporation.

                  (b) In addition, for a period of three years commencing on the
Termination Date, Executive shall not (i) directly or indirectly induce or
attempt to induce any employee of the Company or any subsidiary (other than his
own assistant) to leave the employ of the Company or such subsidiary, or in any
way interfere with the relationship between the Company or any subsidiary and
any employee thereof, (ii) hire directly or through another entity any person
who was an employee of the Company or any subsidiary at any time during the then
preceding 12 months, or (iii) directly or indirectly induce or attempt to induce
any customer, supplier, licensee or other business relation of the Company or
any subsidiary to cease doing business with the Company or such subsidiary, or
in any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any subsidiary.

                  (c) Executive agrees that these restrictions on competition
and solicitation shall be deemed to be a series of separate covenants
not-to-compete and a series of separate non-solicitation covenants for each
month within the specified periods, separate covenants not-to-compete and
non-solicitation covenants for each state within the United States and each
country in the world, and separate covenants not-to-compete for each area of
competition. If any court of competent jurisdiction shall determine any of the
foregoing covenants to be unenforceable with respect to the term thereof or the
scope of the subject matter or geography covered thereby, such remaining
covenants shall nonetheless be enforceable by such court against such other
party or parties or upon such shorter term or within such lesser scope as may be
determined by the court to be enforceable.

                  (d) Because Executive's services are unique and because
Executive has access to Confidential Information and strategic plans of the
Company of the most valuable nature, the parties agree that the covenants
contained in this Section 11 are necessary to protect the value of the business
of the Company and that a breach of any such covenant would result in
irreparable and continuing damage for which there would be no adequate remedy at
law. The parties agree therefore that in the event of a breach or threatened
breach of this Agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
hereof.

         12.      Miscellaneous Provisions.

                  (a) Notice. Notices and all other communications contemplated
by this Agreement shall be in writing, shall be effective when given, and in any
event shall be deemed to have been duly given (i) when delivered, if personally
delivered, (ii) three business days after deposit in the U.S. mail, if mailed by
U.S. registered or certified mail, return receipt requested, or (iii) one
business day after the business day of deposit with Federal Express or similar
overnight courier, if so delivered, freight prepaid. In the case of Executive,
notices shall be addressed to him at 


                                      -13-

<PAGE>   14
the home address which he most recently communicated to the Company in writing.
In the case of the Company, notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Corporate Secretary.

                  (b) Notice of Termination. Any termination by the Company or
Executive shall be communicated by a notice of termination to the other party
hereto given in accordance with paragraph (a) hereof. Such notice shall indicate
the specific termination provision in this Agreement relied upon.

                  (c) Successors.

                           (i) Company's Successors. Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall be entitled to assume the rights and
shall be obligated to assume the obligations of the Company under this Agreement
and shall agree to perform the Company's obligations under this Agreement in the
same manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (i) or which becomes bound by the terms of this
Agreement by operation of law.

                           (ii) Executive's Successors. The terms of this
Agreement and all rights of Executive hereunder shall inure to the benefit of,
and be enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

                           (iii) No Other Assignment of Benefits. Except as
provided in this Section 12(c), the rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this subsection (iii) shall be void.

                  (d) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by Executive and by an authorized officer of the Company
(other than Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.

                  (e) Entire Agreement. This Agreement shall supersede any and
all prior agreements, representations or understandings (whether oral or written
and whether express or implied) between the parties with respect to the subject
matter hereof.

                  (f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.


                                      -14-

<PAGE>   15
                  (g) Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration in
Stamford, Connecticut, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. No party shall be entitled to seek or be awarded
punitive damages. All attorneys fees and costs shall be allocated or apportioned
as agreed by the parties or, in the absence of an agreement, in such manner as
the arbitrator or court shall determine to be appropriate to reflect the final
decision of the deciding body as compared to the initial positions in
arbitration of each party. This Agreement shall be construed in accordance with
and governed by the laws of the State of Connecticut as they apply to contracts
entered into and wholly to be performed within such State by residents thereof.

                  (h) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable taxes.

                  (i) Indemnification. In the event Executive is made, or
threatened to be made, a party to any legal action or proceeding, whether civil
or criminal, by reason of the fact that Executive is or was a director or
officer of the Company or serves or served any other entity of which the Company
owns 50% or more of the equity in any capacity, Executive shall be indemnified
by the Company, and the Company shall pay Executive's related expenses when and
as incurred, all to the full extent permitted by law, pursuant to Executive's
existing indemnification agreement with the Company in the form made available
to all Executive and all other officers and directors or, if it provides greater
protection to Executive, to the maximum extent allowed under the law of the
State of the Company's incorporation.

                  (j) Legal Fees. The Company will pay directly the fees and
expenses of counsel retained by Executive in connection with the preparation,
negotiation and execution of this Agreement.

                  (k) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.


                                      -15-

<PAGE>   16
         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.


                                                GARTNER GROUP, INC.


                                                By:                             
                                                    ----------------------------
                                                    Michael D. Fleisher
                                                    Chief Executive Officer


                                                ROBERT E. KNAPP


                                                --------------------------------



<PAGE>   1
Exhibit 13.1
                                                          (Financial Highlights)



x_F.H+2




<TABLE>
<CAPTION>
Fiscal Year Ended September 30, (in thousands,
except per share, employee and client data)              2000           1999           1998           1997           1996
-------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>            <C>            <C>            <C>            <C>
Total revenues                                       $858,671       $734,234       $641,957       $511,239       $394,672
Ongoing revenues(1)                                  $858,671       $734,234       $623,881       $489,925       $382,453
Net income                                           $ 25,546       $ 88,271       $ 88,347       $ 73,130       $ 16,438
EBITDA(2)                                            $121,867       $193,610       $178,628       $134,814       $ 97,217
Earnings per common share:
    Basic                                            $   0.29       $   0.86       $   0.88       $   0.77       $   0.18
    Diluted                                          $   0.29       $   0.84       $   0.84       $   0.71       $   0.17
    Cash(3)                                          $   0.57       $   0.92       $   0.91       $   0.76       $   0.20
Weighted average shares outstanding (diluted)          89,529        104,948        105,699        102,751         98,854
Cash provided by operations(4)                       $ 75,565       $143,915       $145,068       $123,990       $ 95,104
</TABLE>



<TABLE>
<CAPTION>
At September 30,                                         2000           1999           1998           1997           1996
-------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>            <C>            <C>            <C>            <C>
Client organizations(5)                                10,014          9,692          9,144          8,124          7,241
Research contract value                              $599,169       $560,779       $511,422       $450,276       $344,106
Consulting backlog(6)                                $ 94,441       $ 71,620       $ 42,687       $ 26,831             --
Events deferred revenue                              $ 72,212       $ 51,442       $ 30,958       $ 21,212       $ 12,830
Employees                                               4,322          3,402          2,972          2,885          2,129
=========================================================================================================================
</TABLE>


(1)  Excludes GartnerLearning revenue, a unit sold in fiscal 1998.

(2)  EBITDA is defined as earnings before interest, taxes, depreciation and
     amortization. The EBITDA calculation excludes other charges.

(3)  Cash EPS excludes other charges and the amortization of intangibles
 (net of
     tax benefits).

(4)  Restated for required reclassification of tax benefits.

(5)  Excludes Datapro and GartnerLearning.

(6)  Consulting backlog was not a calculated business measurement in 1996.

<PAGE>   2
                    (Management's Discussion & Analysis of Financial Condition &
                                                          Results of Operations)



x_M.D+A



OVERVIEW

Total revenues for the Company for fiscal 2000 were $858.7 million, up 17% from
$734.2 million for fiscal 1999. Current year revenue growth consisted of a 6%
increase in research revenues, a 39% increase in consulting revenues, a 44%
increase in events revenues and a 6% increase in other revenues. Research
encompasses products which, on an ongoing basis, highlight industry
developments, review new products and technologies, provide quantitative market
research, and analyze industry trends within a particular technology or market
sector. The Company typically enters into annually renewable subscription
contracts for research products. Revenues from research products are recognized
as products are delivered and as the Company's obligation to the client is
completed over the contract period. Consulting revenues, primarily derived from
consulting and measurement engagements, are recognized as work is performed on a
contract by contract basis. Events revenues are deferred and recognized upon the
completion of the related symposium, exposition or conference. Other revenues
are derived primarily from software sales, which are recognized upon the
shipment of products, and the Company's Internet segment, TechRepublic, whose
revenues consist primarily of advertising sales which are recognized upon
delivery of the advertisement to users of the TechRepublic Internet Web site.

         The Company believes the following business measurements are important
indicators of future revenues of its significant business segments.


<TABLE>
<CAPTION>
REVENUE CATEGORY              BUSINESS MEASUREMENTS
-----------------------------------------------------------------------------------------------------
<S>                           <C>
Research                      Contract value attributable to all subscription-based research products
                              with ratable revenue recognition. Contract value is calculated as the
                              annualized value of all subscription-based research contracts in effect
                              at a given point in time, without regard to the duration of such
                              contracts. Research contract value increased 7% to approximately $599.2
                              million at September 30, 2000 from $560.8 million at September 30,
                              1999.

-----------------------------------------------------------------------------------------------------
Consulting                    Consulting backlog represents future revenue to be derived from
                              in-process consulting and measurement engagements. Backlog is not
                              included in deferred revenue. Consulting backlog increased 32% to
                              approximately $94.4 million at September 30, 2000 from $71.6 million at
                              September 30, 1999.

-----------------------------------------------------------------------------------------------------
Events                        Deferred revenue directly related to symposia, expositions and
                              conferences. Deferred revenue from events increased 40% to
                              approximately $72.2 million at September 30, 2000 from $51.4 million at
                              September 30, 1999 primarily due to upcoming symposia and ITxpo events
                              to occur in the first quarter of fiscal 2001.
</TABLE>


<PAGE>   3
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



Contract value is a significant measure of the Company's volume of business. The
Company's past experience has been that a substantial portion of client
companies renew these subscription-based products for an equal or higher level
of total payments each year. In addition, the Company has also been able to
increase its multi-year contracts to 40% of total contract value at September
30, 2000 from 32% at September 30, 1999. Total research deferred revenues of
$296.9 million and $291.1 million at September 30, 2000 and 1999, respectively,
represent unamortized revenues from billed products and services. Deferred
revenues do not directly correlate to contract value as of the same date since
contract value represents an annualized value of all outstanding contracts
without regard to the duration of such contracts, and deferred revenue
represents unamortized revenue remaining on all outstanding and billed
contracts.

         The Company has generally realized significant renewals and growth in
contract value at the end of each quarter. The fourth quarter of the fiscal year
typically has been the fastest growth quarter for contract value and the first
quarter has been the slowest growth quarter due to the largest amount of
contract renewals. As a result of growth in contract value and overall business
volume, fees receivable, deferred revenues, deferred commissions and commissions
payable reflect this activity and typically show substantial increases at
quarter end and at fiscal year end. All contracts are billable upon signing,
absent special terms granted on a limited basis from time to time. All contracts
are non-cancelable and non-refundable, except for government contracts which
have a 30-day cancellation clause, but have not produced material cancellations
to date. The Company's policy is to record at the time of signing of a contract
the entire amount of the contract billable as deferred revenue and fees
receivable. The Company also records the related commission obligation upon the
signing of the contract and amortizes the corresponding deferred commission
expense over the contract period in which the related revenues are earned and
amortized to income.

         Research revenues typically increase in the first quarter of the fiscal
year over the immediately preceding quarter primarily due to the increase in
contract value at the end of the prior fiscal year. Events revenues have
increased similarly due to annual conferences and exhibition events held in the
first quarter. Additionally, operating income margin (operating income as a
percentage of total revenues) typically improves in the first quarter of the
fiscal year versus the immediately preceding quarter. The operating income
margin improvement in the first quarter of a fiscal year is generally due to the
increase in research revenue upon which the Company is able to further leverage
its selling, general and administrative expenses, plus operating income
generated from the first quarter symposium and ITxpo exhibition events. Although
historically, operating income margin has generally not been as high in the
remaining quarters, especially the third and fourth quarters of the fiscal year
compared to the first quarter of the fiscal year, the full year impact of
TechRepublic and other acquisitions and strategic initiatives may result in
operating margin trends in the future that are not comparable to historical
trends.

         During fiscal 2000, the Company made significant investments in the
hiring of consultants to support the demand for consultative services. As a
result of successful recruiting efforts, the Company increased its billable
consultants to 711 at the end of fiscal 2000 and generated $208.8 million in
consulting revenues, a 39% increase over the prior year. In addition, backlog
increased 32% from the previous year, which provides future revenue to be
delivered on in fiscal 2001.

         In fiscal 2000, the Company's events business grew 44% to $108.6
million in revenues compared to fiscal 1999. This growth reflects continued
strong attendance by clients and non-clients at symposia and conferences as well
as demand by exhibitors to showcase their products at Company events.

         In addition, the Company's Internet segment, TechRepublic, provided
$4.1 million of revenue in fiscal 2000 that consisted primarily of revenue from
the sale of advertisements. Expansion of TechRepublic's registered user
population has contributed to its ability to sequentially grow advertising
revenues in fiscal 2000. The ability of TechRepublic to maintain or increase
advertising rates and volumes will depend, in part, on the level and quality of
traffic on the TechRepublic site and the ability to develop content and services
that attract, retain and expand a loyal user base that is attractive to
advertisers and sellers.

         Operating income in fiscal 2000 was $48.2 million, net of $17.5 million
in other charges. Excluding the effect of other charges in fiscal 2000 and 1999,
operating income decreased 59% to $65.7 million from $162.0 million. Operating
income, excluding other charges, was impacted significantly by expenditures
related to strategic investments in rearchitecting the research methodology and
delivery processes, the hiring of analysts and consultants, higher revenue
growth in lower margin consultative services and the Company's investment in
TechRepublic.

         Diluted net income per common share decreased 65% to $0.29 per share in
fiscal 2000 compared to $0.84 per share in fiscal 1999. Excluding the effect of
other charges, net gain (loss) on sale of investments and loss on extinguishment
of debt in fiscal 2000 and other charges and a one-time tax benefit in fiscal
1999, diluted net income per common share for fiscal 2000 was $0.26 per share in
fiscal 2000 and $1.02 per share in fiscal 1999. Basic earnings per common share
was $0.29 per common share in fiscal 2000 compared to $0.86 per common share in
fiscal 1999.

<PAGE>   4
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



RESULTS OF OPERATIONS

The following table sets forth certain results of operations as a percentage of
revenues:


<TABLE>
<CAPTION>
Fiscal Year Ended September 30,              2000        1999       1998
--------------------------------------------------------------------------
<S>                                          <C>         <C>        <C>
Percent of revenues:
Revenues:
    Research                                   59%         65%        68%
    Consulting                                 24          21         17
    Events                                     13          10          8
    Other                                       4           4          5
    Learning                                   --          --          2
--------------------------------------------------------------------------
        Total revenues                        100         100        100
Costs and expenses:
    Cost of services and
        product development                    47          40         39
    Selling, general and
        administrative                         39          34         34
    Depreciation                                3           3          3
    Amortization of intangibles                 3           1          1
    Other charges                               2           4          0
    Acquisition-related charge                 --          --          1
--------------------------------------------------------------------------
        Total costs and expenses               94          82         78
--------------------------------------------------------------------------
Operating income                                6          18         22
Net gain (loss) on sale of investments          3          --          0
Interest income and other                       0           1          2
Interest expense                               (3)          0          0
--------------------------------------------------------------------------
Income before provision for income
    taxes and extraordinary loss                6          19         24
Provision for income taxes                      3           7         10
--------------------------------------------------------------------------
Income before extraordinary loss                3          --         --
Loss on debt extinguishment,
    net of tax benefit                          0          --         --
--------------------------------------------------------------------------
Net income                                      3%         12%        14%
===========================================================================
</TABLE>


FISCAL YEAR ENDED SEPTEMBER 30, 2000
VERSUS FISCAL YEAR ENDED SEPTEMBER 30, 1999

Total revenues increased 17% to $858.7 million in fiscal 2000 as compared to
$734.2 million in fiscal 1999. Revenues from research products increased 6% in
fiscal 2000 to $509.8 million compared to $479.0 million in fiscal 1999 and
comprised approximately 59% and 65% of total revenues in fiscal 2000 and 1999,
respectively. Consulting revenue, consisting primarily of consulting and
measurement engagements, increased 39%, to $208.8 million in fiscal 2000 as
compared to $149.8 million in fiscal 1999 and comprised approximately 24% of
total revenue in fiscal 2000 versus 21% in fiscal 1999. Events revenue was
$108.6 million in fiscal 2000, an increase of 44% over the $75.6 million in
fiscal 1999. Other revenues, consisting principally of software licensing fees
and TechRepublic, experienced a slight increase of $1.7 million to $31.5 million
in fiscal 2000 from $29.8 million in fiscal 1999. Although the rate of growth in
total Company revenues declined slightly in fiscal 2000, the increase in total
revenues reflects the ability of the Company to gain client acceptance of new
products and services, deliver high value consultative services, increase sales
penetration into new and existing clients and develop incremental revenues from
current and prior year acquisitions. Consulting backlog increased 32% to
approximately $94.4 million at September 30, 2000 and represents future revenues
that will be recognized on in-process consulting and measurement engagements.

         Revenue has grown in the three defined geographic market areas of the
Company: United States and Canada, Europe, and Other International. Revenues
from sales to United States clients increased 20% to $567.6 million in fiscal
2000 from $471.8 million in fiscal 1999. Revenues from sales to European clients
increased 9% to $230.3 million in fiscal 2000 from $212.1 million in fiscal
1999. Although European revenues increased in fiscal 2000, the rate of growth
was less than in fiscal 1999. This decrease in growth rate was attributable, in
part, to research revenues remaining relatively unchanged from fiscal 1999 as a
result of foreign exchange rates. On a constant dollar basis, revenues from
Europe would have increased 16% compared to fiscal 1999. Revenues from sales to
Other International clients increased by 21% to $60.7 million in fiscal 2000
from $50.3 million in fiscal 1999. This increase reflects primarily the general
recovery in the economic climate in the Asian markets from fiscal 1999.

         The Company's sales strategy is to continue to extend the Company's
sales channels to clients with revenues ranging from $150 million and up, to
maintain its focus on large customers and to expand sales of product and service
offerings to smaller companies and to different user bases within existing and
potential larger company clients. The Company continues to invest in direct
sales personnel and distributor relationships in Europe and Other International
markets and intends to pursue continued expansion of operations outside of the
United States in fiscal 2001.

         Operating income decreased 63% to $48.2 million in fiscal 2000 compared
to $131.8 million in fiscal 1999. In 2000, the United States and Canada, Europe,
and Other International markets experienced declines in operating income of 63%,
63% and 71%, respectively. On a consolidated basis, operating income as a
percentage of total revenues was 6% and 18%, respectively, for fiscal 2000 and
1999. Operating income was impacted, in part, by expenditures related to planned
investments and rearchitecture of the Company's Web capabilities and the
research methodology and delivery processes, the hiring of analysts and
consultants, higher growth in lower margin consultative services and other
investments to expand and augment TechRepublic's initiatives. Additionally,
TechRepublic's operating loss of $34.2 million in fiscal 2000 impacted
significantly the Company's operating income.

         Costs and expenses, excluding other charges, increased to $793.0
million in 2000 from $572.3 million in 1999. The increase in costs and expenses
reflects the additional support required for the growing client base,
incremental costs associated with conferences, costs associated with acquired
businesses and previously planned strategic investments which included the
hiring of additional consultants, analysts, project executives and sales
personnel, and spending on sales productivity tools and interactive initiatives.
Cost of services and product development expenses were $398.8 million and $289.1
million for 2000 and 1999, respectively. The increase in costs of services and
product development expenses, as a percentage of total revenues to 47% from 40%,
is primarily attributable to continuing growth in personnel costs associated
with the development and delivery of products and services and the hiring of
personnel in association with the planned strategic investments. Costs and
expenses in fiscal 2000 were also impacted by

<PAGE>   5
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



the amounts earned by employees under the retention bonus program as well as the
performance-related variable compensation expense incurred in fiscal 2000. In
contrast, costs and expenses in fiscal 1999 were favorably impacted through the
elimination of variable compensation costs linked to financial performance.

         Selling, general and administrative expenses, increased to $338.0
million in fiscal 2000 from $251.6 million in fiscal 1999 as a result of the
Company's continued expansion of worldwide distribution channels and additional
general and administrative resources needed to meet the expanding infrastructure
requirements of the growing revenue base and fiscal 2000 and fiscal 1999
acquisitions. These infrastructure requirements involve information systems
support, telecommunication, facilities and human capital costs.

         Other charges of $17.5 million in fiscal 2000 were incurred in relation
to a special one-time cash incentive plan designed to enhance retention of key
personnel in response to the recapitalization and reorganization of the Company
that was initiated in fiscal 1999. In fiscal 1999, the Company recorded pre-tax
other charges totaling $9.2 million of legal and advisory fees related to the
recapitalization (see Note 15--Recapitalization in the Notes to Consolidated
Financial Statements), $14.2 million of costs, primarily severance related,
incurred as part of strategic reduction in workforce initiatives and $6.7
million related to the special, retention incentive plan.

         Depreciation expense increased to $28.3 million in fiscal 2000 from
$21.6 million in fiscal 1999, primarily due to capital spending required to
support business growth. Additionally, amortization of intangibles increased by
$17.8 million ($14.8 million of which related to the TechRepublic acquisition)
in fiscal 2000 as compared to fiscal 1999, reflecting primarily goodwill
associated with fiscal 2000 and 1999 acquisitions and the shorter life of
intangibles attributable to Internet related fiscal 2000 acquisitions.

         Net gain on sale of investments in fiscal 2000 reflects the sale of
1,995,950 shares of Jupiter Communications, Inc. (now known as Jupiter Media
Metrix) for net cash proceeds of $55.5 million for a pre-tax gain of $42.9
million. This gain was partially offset by the sale of the Company's 8%
investment in NETg, Inc., a subsidiary of Harcourt, Inc., to an affiliate of
Harcourt, Inc. for $36.0 million in cash that resulted in a pre-tax loss of
approximately $6.6 million. The Company had acquired this investment as
consideration for its sale of GartnerLearning in September 1998. In addition,
the Company negotiated the settlement of a joint venture agreement associated
with the sale of GartnerLearning that resulted in a pre-tax loss of
approximately $6.7 million.

         Interest expense increased to $24.9 million in fiscal 2000 from $1.3
million in fiscal 1999. This increase related primarily to debt facility
borrowings, of which the proceeds were used primarily to fund the Company's
recapitalization in the prior fiscal year. Interest income and other decreased
in fiscal 2000 which was due primarily to a lower average balance of investable
funds as compared to the prior fiscal year.

         Provision for income taxes decreased by 43% or $22.2 million to $28.8
million in fiscal 2000 from $51.0 million in 1999. The effective tax rate was
52% and 37% for fiscal 2000 and 1999, respectively. The increase in the
effective rate principally reflects the impact of non-deductible goodwill
related to the TechRepublic acquisition. A more detailed analysis of the changes
in the provision for income taxes is provided in Note 13 of the Notes to
Consolidated Financial Statements.

         In fiscal 2000, the Company entered into a second amendment to the
Credit Agreement. Under this amendment, the Company agreed to refinance all
existing indebtedness and to repay in full and terminate the term loans drawn
under the existing Credit Agreement. In connection with the extinguishment of
the term loan, the Company wrote-off $2.9 million of deferred debt issuance
costs in the fourth quarter of fiscal 2000. The charge was recorded, net of tax
benefit of $1.2 million, as an extraordinary loss.

FISCAL YEAR ENDED SEPTEMBER 30, 1999
VERSUS FISCAL YEAR ENDED SEPTEMBER 30, 1998

Total revenues increased 14% to $734.2 million in fiscal 1999 from $642.0
million in fiscal 1998. Revenues from research products increased 11% in fiscal
1999 to $479.0 million compared to $433.1 million in fiscal 1998 and comprised
approximately 65% and 68% of total revenues in fiscal 1999 and 1998,
respectively. Consulting revenue, consisting primarily of consulting and
measurement engagements, increased 35%, to $149.8 million in fiscal 1999 as
compared to $111.0 in fiscal 1998 and comprised approximately 21% of total
revenue in fiscal 1999 versus 17% in fiscal 1998. Events revenue was $75.6
million in fiscal 1999, an increase of 54% over $49.1 million in fiscal 1998.
Other revenues, consisting principally of software licensing fees, experienced a
slight decrease to $29.8 million in fiscal 1999 from $30.7 million in fiscal
1998. Although the rate of growth in Company revenue slowed in fiscal 1999, the
increase in total revenues reflected the ability of the Company to gain client
acceptance of new products and services, increase sales penetration into new and
existing clients, and develop incremental revenues from current and prior year
acquisitions. Pricing pressures in the Company's traditional research products
from smaller competitors with lower profit margins and less robust product
suites contributed to the slowed revenue growth rate. Consulting backlog
increased 68% to approximately $71.6 million at September 30, 1999 and
represented future revenues that would be recognized from in-process consulting
and measurement engagements.

         Revenues from sales to United States and Canadian clients increased 14%
to $471.8 million in fiscal 1999 from $415.6 million in fiscal 1998. Revenues
from sales to European clients increased 22% to $212.1 million in fiscal 1999
from $173.8 million in fiscal 1998. Revenue in Europe, primarily in the Research
area, increased as a result of continuing investments to expand penetration of
this market, offset in part by lower than expected growth in measurement
revenues. Revenues from sales to Other International clients decreased by 4% to
$50.3 million in fiscal 1999 from $52.6 million in fiscal 1998. This decrease
was caused primarily by the general unfavorable economic climate in the Asian
markets.

         Operating income decreased 8% to $131.8 million in fiscal 1999 from
$144.0 million in fiscal 1998. Excluding acquisition-related and other charges,
operating income in fiscal 1999 increased 7%. Excluding such charges in 1999 and
1998, the United States and Canada experienced an increase of 7% and Europe
experienced a 19% growth rate. Other International markets experienced a decline
of 24% primarily from a decrease in revenue. Operating income remained favorable
as a result of continuing revenue growth that allowed the Company to develop new
products and services and to gain economies of scale through the leveraging of
its resources (additional revenues have been generated using essentially the
same resources). However, operating contribution margin, excluding acquisition
related and other charges, decreased in fiscal 1999 to 22% from 24% in fiscal
1998. This decrease was due in part to higher growth in lower margin
consultative services. In addition, operating contribution margin from
consulting in 1999 declined primarily from lower margin acquisitions.

         Costs and expenses, excluding acquisition-related and other charges,
increased to $572.3 million in 1999 from $490.6 million in 1998, and increased
slightly as a percentage of total revenue to 78% in 1999 from 76% in 1998. Cost
of

<PAGE>   6
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



services and product development expenses were $289.1 million and $247.9 million
for 1999 and 1998, respectively. This increase over the prior fiscal year
reflected the additional support required for the growing client base, costs
associated with acquired businesses and continued product development costs. The
increase in cost of services and product development expenses, as a percentage
of total revenues, was primarily attributable to increasing pricing pressure in
research products, continuing growth in personnel costs associated with the
development of new products and services, and the delivery of products and
services to broader markets.

         Selling, general and administrative expenses increased to $251.6
million from $215.4 million for fiscal 1999 and 1998, respectively, due to the
Company's continuing expansion of worldwide distribution channels and the
resulting commissions earned on the revenue generated. Although the Company
added general and administrative resources to support the growing revenue base,
selling, general and administrative expenses remained consistent at 34% of total
revenues for fiscal 1999 and 1998, respectively. Costs and expenses in fiscal
2000 were anticipated to be impacted both by the remaining amounts earned by
employees under the Company's retention incentive program as well as the fiscal
2000 performance-related variable compensation expense expected to be incurred.

         Other charges in fiscal 1999 consisted of $9.2 million in legal and
advisory fees related to the recapitalization (see Note 15--Recapitalization in
the Notes to Consolidated Financial Statements), $14.2 million of costs,
primarily severance related, incurred as part of strategic reduction in
workforce initiatives and $6.7 million of bonuses paid in relation to a
retention incentive plan approved by the Board of Directors in response to the
recapitalization and reorganization. Costs and expenses were favorably impacted
in 1999 through the elimination of variable costs linked to financial
performance.

         Depreciation expense increased to $21.6 million in fiscal 1999 from
$17.9 million in fiscal 1998, primarily due to capital spending required to
support business growth. Additionally, amortization of intangibles increased by
$0.7 million in fiscal 1999 as compared to fiscal 1998, reflecting primarily
goodwill associated with fiscal 1999 and 1998 acquisitions.

         Interest income and other decreased slightly to $8.7 million in fiscal
1999, versus $9.1 million for fiscal 1998, due principally to the sale of cash
equivalents and marketable securities to fund the recapitalization and working
capital requirements. Interest expense increased to $1.3 million due to debt
facility borrowings of $250 million.

         Provision for income taxes decreased by 19% or $11.8 million to $51.0
million in 1999 from $62.8 million in 1998. The effective tax rate was 37% and
42% for 1999 and 1998, respectively. In 1999, the Company incurred $8.6 million
of non-deductible recapitalization costs during the year, the tax effect of
which was partially offset by a one-time income tax benefit of $2.5 million
related primarily to the settlement of certain tax examinations in the second
quarter. Absent nondeductible costs, the one-time income tax benefit and
additional taxes incurred in fiscal 1998 related to the sale of GartnerLearning,
the effective rate was 37% for 1999 and 39% for 1998. The decrease of two
percentage points was achieved primarily through the utilization of tax loss and
credit carryforwards and ongoing tax planning initiatives. A more detailed
analysis of the changes in the provision for income taxes is provided in Note 13
of the Notes to Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities during fiscal 2000 was $75.6 million,
compared to $143.9 million in the prior fiscal year, resulting primarily from
the impact of the decrease in net income, the increase in depreciation and
amortization, the net gain on sale of investments, the change in deferred tax
benefit and the changes in balance sheet accounts, particularly fees receivable,
deferred revenues, accounts payable and accrued liabilities. Cash provided by
operating activities include a $4.2 million credit to additional paid-in capital
for tax benefits received from stock transactions with employees. The tax
benefit of stock transactions with employees is due to a reduction in the
corporate income tax liability based on an imputed compensation deduction equal
to employees' gain upon the exercise of stock options at an exercise price below
fair market value.

         Cash used for investing activities totaled $100.0 million for fiscal
2000, compared to $1.1 million provided by investing activities in fiscal 1999,
due to the effect of cash used for property and equipment additions of $55.9
million and business acquisitions and investments of $135.6 million, partially
offset by proceeds from the sale of marketable securities and investments of
$55.5 million and $36.0 million, respectively. During fiscal 2000, the Company
used $115.2 million in cash for acquisitions, primarily for the purchase of
TechRepublic, Inc. for $78.5 million, Computer Financial Consultants Limited for
$16.0 million and Rendall and Associates, Inc. for $12.0 million.

         Cash provided by financing activities totaled $1.0 million in fiscal
2000, compared to $213.8 million used for financing activities in fiscal 1999.
The cash provided by financing activities resulted primarily from the $420.0
million in borrowings under the Credit Agreement and issuance of the convertible
notes (see Note 9--Long-Term Debt in the Notes to the Consolidated Financial
Statements) offset by repayments of $370.0 million of Credit Agreement
borrowings. Additionally, the Company paid $49.9 million for the repurchase of
2,493,500 shares of Class A Common Stock and 2,006,700 shares of Class B Common
Stock under the terms of the recapitalization, as well as $8.2 million for the
settlement of a forward purchase agreement on the Company's common stock. Cash
provided by financing activities also includes $8.1 million in proceeds from the
issuance of common stock upon the exercise of employee stock options.

         The effect of exchange rates reduced cash and cash equivalents by $3.8
million for the year ended September 30, 2000, and was due to the strengthening
of the U.S. dollar versus certain foreign currencies. In fiscal 1999, the effect
of exchange rates reduced cash and cash equivalents by $0.1 million. At
September 30, 2000, cash and cash equivalents totaled $61.7 million. The
Company issues letters of credit in the ordinary course of business. At
September 30, 2000, the Company had outstanding letters of credit for $1.5
million with Chase Manhattan Bank and $2.0 million with The Bank of New York.
The Company believes that its current cash balances, together with cash
anticipated to be provided by operating activities, the sale of marketable
equity securities, and borrowings available under the existing senior revolving
credit facility, will be sufficient for the expected short-term and foreseeable
long-term cash needs of the Company in the ordinary course of business,
including capital commitments related to TechRepublic and the Company's
remaining obligation to make open market purchases of its common stock required
as part of the recapitalization. If the Company were to require substantial
amounts of additional capital in the future to pursue business opportunities
that may arise involving substantial investments of additional capital, there
can be no assurances that such capital will be available to the Company or will
be available on commercially reasonable terms. As of September 30, 2000, the
Company has a remaining commitment to purchase an additional 662,363 shares of
Class A

<PAGE>   7
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



Common Stock and 4,128 shares of Class B Common Stock in the open market by July
2001. The Company intends to fund this remaining commitment through existing
cash balances, cash proceeds anticipated from the sale of marketable equity
securities, cash expected to be provided from operations or borrowings available
under the senior revolving credit facility. The Company is subject to certain
customary affirmative, negative and financial covenants under the senior
revolving credit facility, and continued compliance with these covenants could
preclude the Company from borrowing the maximum amount of the credit facility.
As a result of these covenants, the Company's borrowing availability at
September 30, 2000 is $121.9 million of the $200.0 million senior revolving
credit facility. Additionally, there can be no assurance that the Company's debt
service obligations will not have a material adverse effect on the Company's
business, results of operations and financial condition. Although a default
under the terms of the Company's credit facility could result in an acceleration
of the Company's debt obligations, management believes that such an occurrence
is not likely.

FACTORS THAT MAY AFFECT FUTURE RESULTS

The Company operates in a very competitive and rapidly changing environment that
involves numerous risks and uncertainties, some of which are beyond the
Company's control. The following section discusses many, but not all, of these
risks and uncertainties.

Competitive Environment The Company faces competition from a significant number
of independent providers of information products and services, as well as the
internal marketing and planning organizations of the Company's clients. The
Company also competes indirectly against consulting firms and other information
providers, including electronic and print media companies. These indirect
competitors could choose to compete directly with the Company in the future. In
addition, limited barriers to entry exist in the Company's market. As a result,
additional new competitors may emerge and existing competitors may start to
provide additional or complementary services. Increased competition may result
in loss of market share, diminished value in the Company's products and
services, reduced pricing and increased marketing expenditures. The Company may
not be successful if it cannot compete effectively on quality of research and
analysis, timely delivery of information, customer service, the ability to offer
products to meet changing market needs for information and analysis and price.

Hiring and Retention of Employees The Company's future success depends heavily
upon the quality of its senior management, sales personnel, IT analysts,
consultants and other key personnel. The Company faces intense competition for
these qualified professionals from, among others, technology and Internet
companies, market research firms, consulting firms and electronic and print
media companies. Some of the personnel that the Company attempts to hire are
subject to non-competition agreements that could impede the Company's short-term
recruitment efforts. Any failure to retain key personnel or hire additional
qualified personnel, as may be required to support the evolving needs of clients
or growth in the Company's business, could adversely affect the quality of the
Company's products and services, and, therefore, its future business and
operating results.

Maintenance of Existing Products and Services The Company operates in a rapidly
evolving market and the Company's success depends upon its ability to deliver
high quality and timely research and analysis to its clients and to anticipate
and understand the changing needs of its clients. Any failure to continue to
provide credible and reliable information that is useful to its clients could
have a material adverse effect on future business and operating results.
Further, if the Company's predictions prove to be wrong or are not substantiated
by appropriate research, the Company's reputation may suffer and demand for its
products and services may decline.

Introduction of New Products and Services The market for the Company's products
and services are characterized by rapidly changing needs for information and
analysis. To maintain its competitive position, the Company must continue to
successfully enhance and improve its products and services, develop or acquire
new products and services in a timely manner, and appropriately position and
price products and services. Any failure to successfully do so could have a
material adverse effect on the Company's business, results of operations or
financial position. In addition, the Company must continue to improve its
methods for delivering its products and services. For example, the Company
believes that it needs to continue to invest in and develop its ability to use
the Web as a delivery channel for products and services. Failure to increase and
improve the Company's Web capabilities could adversely affect the Company's
future business and operating results.

Expanding Markets The Company has recently begun to expand its product and
service offerings to smaller companies and to different user bases within
existing and potential larger company clients. These target market segments are
relatively new to the Company's sales and marketing personnel. As a result, the
Company may not be able to compete effectively or generate significant revenues
in these new market segments.

Internet Business Risks The Company, through TechRepublic, operates a Web site
targeted to IT professionals that offers IT industry news, analysis, articles,
forums, event listings and job, peer and vendor directories. The majority of
revenues from this business are derived from advertising and subscriptions. The
Company's ability to continue to achieve and grow significant advertising
revenues depends upon growth of its user base, the user base being attractive to
advertisers, the ability to derive demographic and other information from users,
and acceptance by advertisers of the Web as an advertising medium. Similarly,
the Company's ability to generate significant subscription revenues depends on
its ability to continue to develop content and services that are attractive to
its user base. If the Company was unable to successfully adapt to the needs of
its users and advertisers, the Company's Internet business would be materially
and adversely affected.

International Operations A substantial portion of the Company's revenues are
derived from international sales. As a result, the Company's operating results
are subject to the risks inherent in international business activities,
including general political and economic conditions in each country, changes in
market demand as a result of exchange rate fluctuations and tariffs, challenges
in staffing and managing foreign operations, changes in regulatory requirements,
compliance with numerous foreign laws and regulations, different or overlapping
tax structures, higher levels of United States taxation on foreign income, and
the difficulty of

<PAGE>   8
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



enforcing client agreements and protecting intellectual property rights in
international jurisdictions. Additionally, the Company relies on local
distributors or sales agents in some international locations. If any of these
arrangements are terminated, the Company may not be able to replace the
terminated arrangement on equally beneficial terms or on a timely basis or
clients of the local distributor or sales agent may not want to continue to do
business with the Company or its new agent.

Branding The Company believes that its Gartner brand is critical to the
Company's efforts to attract and retain clients and that the importance of brand
recognition will increase as competition increases. The Company expects to
expand its marketing activities to promote and strengthen the Gartner brand and
may need to increase its marketing budget, hire additional marketing and public
relations personnel, expend additional sums to protect the brand and otherwise
increase expenditures to create and maintain brand loyalty among clients. If the
Company fails to effectively promote and maintain the Gartner brand, or incurs
excessive expenses in attempting to do so, the Company's future business and
operating results could be materially and adversely impacted.

Investment Activities The Company maintains investments in equity securities in
private and publicly-traded companies through direct ownership and through
wholly and partially owned venture capital funds. The companies invested in are
primarily early to mid-stage IT-based and Internet-enabled businesses. It is the
Company's objective to seek financial returns from these investments as an
additional source of capital to fund strategic initiatives. The risks related to
such investments, due to their nature and the volatile public markets, include
the possibilities that anticipated returns may not materialize or could be
significantly delayed. As a result, the Company's financial results could be
materially impacted.

Significant Indebtedness In connection with its recapitalization transactions
(see Note 15--Recapitalization in the Notes to Consolidated Financial
Statements) and strategic repositioning, which include the purchase and
continued investment in TechRepublic, the Company has incurred significant
indebtedness. The associated debt service could impair future operating results.
Further, the outstanding debt could limit the amount of cash or additional
credit available to the Company, which in turn, could restrain the Company's
ability to expand or enhance products and services, respond to competitive
pressures or pursue business opportunities that may arise in the future and
involve substantial investments of additional capital. In addition, the
convertible notes issued by the Company (see Note 9--Long-Term Debt in the Notes
to Consolidated Financial Statements) contain a reset provision allowing in
fiscal 2001 for the possible reduction of the conversion price under certain
conditions. If the Company did not elect to redeem the convertible notes in the
event of a reset, the impact of a reduction in the conversion price would result
in additional shares of common stock being issued (compared to the amount that
would be issued based on the original conversion price) if the notes are
ultimately converted into shares. Correspondingly, if the Company elected to
redeem the convertible notes in the event of a reset, there can be no assurances
that the capital required to be raised would be available on commercially
reasonable or comparable terms which in turn could impact future business and
operating results.

Organizational and Product Integration Related to Acquisitions The Company has
made and expects to continue to make acquisitions of, or significant investments
in, businesses that offer complementary products and services. The risks
involved in each acquisition or investment include the possibility of paying
more than the value the Company derives from the acquisition, the assumption of
undisclosed liabilities and unknown and unforeseen risks, the difficulty of
integrating the operations and personnel of the acquired business, the ability
to retain key personnel of the acquired company, the time to train the sales
force to market and sell the products of the acquired company, the potential
disruption of the Company's ongoing business and the distraction of management
from the Company's business. The Company may also incur additional debt or issue
equity securities to pay for future acquisitions.

Enforcement of the Company's Intellectual Rights The Company relies on a
combination of copyright, patent, trademark, trade secrets, confidentiality
procedures and contractual procedures to protect its intellectual property
rights. Despite the Company's efforts to protect its intellectual property
rights, it may be possible for unauthorized third parties to obtain and use
technology or other information that the Company regards as proprietary. In
addition, the Company's intellectual property rights may not survive a legal
challenge to their validity or provide significant protection for the Company.
Furthermore, the laws of certain countries do not protect the Company's
proprietary rights to the same extent as do the laws of the United States.
Accordingly, the Company may not be able to protect its intellectual property
against unauthorized third party copying or use, which could adversely affect
the Company's competitive position.

Agreements with IMS Health Incorporated In connection with its recapitalization,
the Company agreed to certain restrictions on business activity to reduce the
risk to IMS Health and its stockholders of substantial tax liabilities
associated with the spinoff by IMS Health of its equity interest in the Company.
The Company also agreed to assume the risk of such tax liabilities if the
Company were to undertake certain business activities that give rise to the
liabilities. As a result, the Company may be limited in its ability to undertake
acquisitions involving the issuance of a significant amount of stock unless the
Company were to seek and obtain a ruling from the IRS that the transaction will
not give rise to such tax liabilities. In addition, the Company has certain
limits in purchasing its common stock under the terms of the recapitalization.

Possibility of Infringement Claims Third parties may assert infringement claims
against the Company in the future. Regardless of the merits, responding to any
such claim could be time consuming, result in costly litigation and require the
Company to enter into royalty and licensing agreements which may not be offered
or available on terms acceptable to the Company. If a successful claim is made
against the Company and the Company fails to develop or license a substitute
technology, the Company's business, results of operations or financial position
could be materially adversely affected.

Potential Fluctuations in Operating Results The Company's quarterly operating
income may fluctuate in the future as a result of a number of factors, including
the timing of the execution of research contracts, the performance of consulting
engagements, the timing of symposia and other events, the amount of new business
generated by the Company, the restructuring of the Company's sales force and the
change in territories of sales personnel at the end of each fiscal year, the mix
of domestic and international business, changes in market demand for the
Company's products and services, the timing of the development, introductions
and marketing of new products and services, the results of operations of
TechRepublic and competition in the industry. As a result, the Company's
operating results in any quarter are not necessarily a good predictor of its
operating results for any future period.

<PAGE>   9
                    (Management's Discussion & Analysis of Financial Condition &
                                               Results of Operations, continued)



FORWARD-LOOKING STATEMENTS

In addition to historical information, this report contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of 1934, as amended.
These forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those discussed in, or
implied by, the forward-looking statements. Factors that might cause such a
difference include, but are not limited to, those discussed in "Factors That May
Affect Future Results" above. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect management's opinion only as
of the date hereof. The Company undertakes no obligation to revise or update
these forward-looking statements. Readers should also carefully review the risk
factors described in other documents the Company files from time to time with
the Commission.

EURO CONVERSION

On January 1, 1999, eleven of the fifteen member countries of the European Union
established fixed conversion rates between their sovereign currencies and a new
currency called the "euro" and adopted the euro as their common legal currency.
In 2002, participating countries will adopt the euro as their single currency.
Beginning that date, the participating countries will issue new euro-denominated
bills and coins for use in cash transactions. Legacy currency will no longer be
legal tender for any transactions beginning July 1, 2002, making conversion to
the euro complete.

         As of September 30, 2000, the Company has not found the impact of the
adoption of the euro to have an impact on the competitive conditions in European
markets and does not believe that the translation of financial transactions into
euros has had or will have a significant effect on the Company's results of
operations, liquidity, or financial condition. Additionally, the Company does
not anticipate any material impact from the euro conversion on the Company's
financial information systems which currently accommodate multiple currencies.
Costs associated with the adoption of the euro have not been and are not
expected to be significant and are being expensed as incurred.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("FAS 133") was issued. FAS
133, as amended by FAS 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities" establishes a new model for accounting for
derivatives and hedging activities. The Statement requires all derivatives be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in fair value will either be offset against
the change in fair value of the hedged assets, liabilities, or firm commitments
through earnings, or recognized in other comprehensive income until the hedged
item is recognized in earnings. In June 1999, Statement of Financial Accounting
Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133," was
issued. Citing concerns about the ability of companies to modify their
information systems in time to apply the new model for accounting for
derivatives and hedging activities, FAS 137 was issued to delay the effective
date for one year to fiscal years beginning after June 15, 2000, or October 1,
2000 for the Company. The Company does not currently have any derivative
instruments or engage in any hedging activities. The adoption of this statement
will not have a material impact on the Company's financial position or results
of operations.

         In December 1999, the Securities and Exchange Commission (the
"Commission") issued Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements" ("SAB 101"), which summarized certain views of the
Commission in applying generally accepted accounting principles to revenue
recognition in financial statements. The Company believes that its current
revenue recognition policies are consistent with the guidance of SAB 101.

         In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation--An Interpretation of Accounting Principles Board ("APB") Opinion
No. 25" ("FIN 44"). FIN 44 clarifies the application of APB Opinion No. 25
regarding the definition of an employee for purposes of applying Opinion No. 25,
the criteria for determining whether a plan qualifies as a noncompensatory plan,
the accounting consequence of various modifications to the terms of a previously
fixed stock option or award, and the accounting for an exchange of stock
compensation awards in a business combination. In general, this interpretation
is effective July 1, 2000. The adoption of FIN 44 in fiscal 2000 did not have a
material impact on the Company's consolidated results of operations or financial
position.

         In March 2000, the Emerging Issues Task Force reached a consensus on
Issue No. 00-2 "Accounting for Web Site Development Costs" ("EITF Issue No.
00-2"), which applies to all Web site development costs incurred for quarters
beginning after June 30, 2000. The consensus states that the accounting for
specific Web site development costs should be based on a model consistent with
AICPA Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." The Company believes that its current
Web site development costs accounting policies are consistent with the guidance
of EITF Issue No. 00-2.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's exposure to market risk for changes in interest rates relates
primarily to borrowings under the Company's unsecured senior revolving credit
facility with The Chase Manhattan Bank. These borrowings bear interest at
variable rates and the fair value of this indebtedness is not significantly
affected by changes in market interest rates. An increase or decrease of 10% in
the current effective interest rates under the Credit Agreement would not have a
material effect on the Company's results of operations.

         In addition, the Company is exposed to market risk from a series of
forward purchase agreements on its Class A Common Stock. As of September 30,
2000, a forward purchase agreement in place covered approximately $9.3 million
or 672,365 shares of Class A Common Stock having a forward purchase price
established at $13.81 per share. If the market priced portion of this agreement
was settled based on the September 30, 2000 market price of Class A Common Stock
($11.63 per share), the Company would settle under the terms of the forward
purchase agreement with a payment of either $1.5 million in cash or 126,316
shares of Class A Common Stock.

         Amounts invested in the Company's foreign operations are translated
into U.S. dollars at the exchange rates in effect at September 30, 2000.
The resulting translation adjustments are recorded as a component of Accumulated
other comprehensive income (loss) in the Stockholders' equity section of the
Consolidated Balance Sheets.

<PAGE>   10
                                                   (Consolidated Balance Sheets)



x_cB.S




<TABLE>
<CAPTION>
September 30, (in thousands, except share data)                                          2000             1999
---------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                <C>
ASSETS:
Current assets:
    Cash and cash equivalents                                                     $    61,698        $  88,894
    Marketable equity securities                                                       35,404               --
    Fees receivable, net of allowances of $5,004 in 2000 and $4,938 in 1999           326,359          282,047
    Deferred commissions                                                               46,756           31,332
    Prepaid expenses and other current assets                                          42,651           29,911
---------------------------------------------------------------------------------------------------------------
        Total current assets                                                          512,868          432,184
Property, equipment and leasehold improvements, net                                    91,259           63,592
Intangible assets, net                                                                315,197          223,100
Other assets                                                                           83,641           84,568
---------------------------------------------------------------------------------------------------------------
        Total assets                                                              $ 1,002,965        $ 803,444
===============================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
    Accounts payable and accrued liabilities                                      $   201,407        $ 117,363
    Deferred revenues                                                                 385,932          354,517
---------------------------------------------------------------------------------------------------------------
        Total current liabilities                                                     587,339          471,880
---------------------------------------------------------------------------------------------------------------
Long-term debt                                                                        307,254          250,000
Other liabilities                                                                      33,552            7,078

Commitments and contingencies

Stockholders' equity:
Preferred stock:
    $.01 par value, authorized 5,000,000 shares; none issued or outstanding                --               --
Common stock:
    $.0005 par value, authorized 166,000,000 shares of Class A Common
    Stock and 84,000,000 shares of Class B Common Stock; issued 77,483,438
    shares of Class A Common Stock (76,129,558 in 1999) and 40,689,648
    shares of Class B Common Stock in 2000 and in 1999                                     59               58
Additional paid-in capital                                                            333,828          314,829
Unearned compensation                                                                  (6,451)          (8,280)
Accumulated other comprehensive income (loss)                                              (1)          (3,830)
Accumulated earnings                                                                  182,286          156,740
Treasury stock, at cost, 23,740,562 shares of Class A Common
    Stock (21,448,536 in 1999) and 8,129,732 shares of Class B
    Common Stock (6,123,032 in 1999)                                                 (434,901)        (385,031)
---------------------------------------------------------------------------------------------------------------
        Total stockholders' equity                                                     74,820           74,486
---------------------------------------------------------------------------------------------------------------
            Total liabilities and stockholders' equity                            $ 1,002,965        $ 803,444
===============================================================================================================
</TABLE>



See Notes to Consolidated Financial Statements

<PAGE>   11
                                         (Consolidated Statements of Operations)



x_cS.O




<TABLE>
<CAPTION>
Year Ended September 30, (in thousands, except per share data)             2000             1999             1998
-----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>              <C>              <C>
Revenues:
    Research                                                          $ 509,781        $ 479,045        $ 433,141
    Consulting                                                          208,810          149,840          110,955
    Events                                                              108,589           75,581           49,121
    Other                                                                31,491           29,768           30,664
    Learning                                                                 --               --           18,076
-----------------------------------------------------------------------------------------------------------------
        Total revenues                                                  858,671          734,234          641,957
Costs and expenses:
    Cost of services and product development                            398,773          289,053          247,913
    Selling, general and administrative                                 338,031          251,571          215,416
    Depreciation                                                         28,332           21,592           17,909
    Amortization of intangibles                                          27,824           10,041            9,357
    Other charges                                                        17,501           30,130            2,819
    Acquisition-related charge                                               --               --            4,494
-----------------------------------------------------------------------------------------------------------------
        Total costs and expenses                                        810,461          602,387          497,908
-----------------------------------------------------------------------------------------------------------------
Operating income                                                         48,210          131,847          144,049
Net gain (loss) on sale of investments                                   29,630               --           (1,973)
Interest income and other                                                 3,161            8,672            9,139
Interest expense                                                        (24,900)          (1,272)             (94)
-----------------------------------------------------------------------------------------------------------------
Income before provision for income taxes and extraordinary loss          56,101          139,247          151,121
Provision for income taxes                                               28,826           50,976           62,774
-----------------------------------------------------------------------------------------------------------------
Income before extraordinary loss                                         27,275           88,271           88,347
Loss on debt extinguishment, net of tax benefit of $1,152                 1,729               --               --
-----------------------------------------------------------------------------------------------------------------
Net income                                                            $  25,546        $  88,271        $  88,347
=================================================================================================================

Net income per common share:
    Basic:
        Income before extraordinary loss                              $     .31        $     .86        $     .88
        Extraordinary loss                                            $    (.02)              --               --
        Net income                                                    $     .29        $     .86        $     .88
    Diluted:
        Income before extraordinary loss                              $     .30        $     .84        $     .84
        Extraordinary loss                                            $    (.02)              --               --
        Net income                                                    $     .29        $     .84        $     .84
Weighted average shares outstanding:
    Basic                                                                86,985          102,226          100,194
=================================================================================================================

    Diluted                                                              89,529          104,948          105,699
=================================================================================================================
</TABLE>



See Notes to Consolidated Financial Statements


<PAGE>   12

<TABLE>
<CAPTION>

                                                                                          Additional
                                                             Preferred         Common        Paid-in        Unearned
(in thousands, except share data)                                Stock          Stock        Capital    Compensation
---------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>            <C>            <C>             <C>
Balance September 30, 1997                                   $       0      $      54      $ 179,017       $       0
Net income                                                          --             --             --              --
Foreign currency translation adjustments                            --             --             --              --
        Comprehensive income                                        --             --             --              --
Issuance of 5,370,690 shares of Class A Common
        Stock upon exercise of stock options                        --              3         35,727              --
Issuance from treasury stock of 195,904 shares of
        Class A Common Stock for purchases by employees             --             --          5,885              --
Tax benefits of stock transactions with employees                   --             --         47,273              --
Net share settlement of 365,949 shares of Class A
        Common Stock on forward purchase agreement                  --             --             --              --
Net cash settlement paid on forward purchase agreement              --             --        (12,045)             --
Acquisition of 655,800 shares of Class A Common Stock               --             --             --              --
        302,003 shares of Class A Common Stock received
        in settlement of officer loans                              --             --             --              --
Issuance from treasury stock of 225,927 shares of
        Class A Common Stock related to acquisitions                --             --          6,919              --
---------------------------------------------------------------------------------------------------------------------
Balance September 30, 1998                                           0             57        262,776               0
Net income                                                          --             --             --              --
Foreign currency translation adjustments                            --             --             --              --
        Comprehensive income                                        --             --             --              --
Issuance of 2,648,169 shares of Class A Common
        Stock upon exercise of stock options                        --              1         18,032              --
Issuance from treasury stock of 286,033 shares of
        Class A Common Stock for purchases by employees             --             --          4,842              --
Tax benefits of stock transactions with employees                   --             --         15,096              --
Net share settlement of 155,962 shares of Class A
        Common Stock on forward purchase agreement                  --             --             --              --
Net cash settlement paid on forward purchase agreement              --             --        (10,900)             --
Special cash dividend paid                                          --             --             --              --
Restricted stock award of 452,000 shares of Class A
        Common Stock, net of forfeitures                            --             --          9,940          (9,940)
Dutch auction repurchase of 9,636,247 shares of
        Class A Common Stock and 6,123,032 shares
        of Class B Common Stock                                     --             --             --              --
Acquisition of 65,500 shares of Class A Common Stock                --             --             --              --
Issuance of 663,716 shares of Class A Common Stock
        related to acquisitions                                     --             --         15,043              --
Amortization of unearned compensation                               --             --             --           1,660
---------------------------------------------------------------------------------------------------------------------
Balance September 30, 1999                                   $       0      $      58      $ 314,829       $  (8,280)
</TABLE>



<TABLE>
<CAPTION>
                                                                  Accumulated
                                                                        Other                                          Total
                                                                Comprehensive    Accumulated         Treasury  Stockholders'
(in thousands, except share data)                               Income (Loss)       Earnings            Stock         Equity
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>             <C>             <C>
Balance September 30, 1997                                         $  (1,098)      $ 105,138       $ (13,241)      $ 269,870
Net income                                                                --          88,347              --          88,347
Foreign currency translation adjustments                              (1,057)             --              --          (1,057)
                                                                                                                   ----------
        Comprehensive income                                              --              --              --          87,290
Issuance of 5,370,690 shares of Class A Common
        Stock upon exercise of stock options                              --              --              --          35,730
Issuance from treasury stock of 195,904 shares of
        Class A Common Stock for purchases by employees                   --              --             184           6,069
Tax benefits of stock transactions with employees                         --              --              --          47,273
Net share settlement of 365,949 shares of Class A
        Common Stock on forward purchase agreement                        --              --              --              --
Net cash settlement paid on forward purchase agreement                    --              --              --         (12,045)
Acquisition of 655,800 shares of Class A Common Stock                     --              --         (16,187)        (16,187)
        302,003 shares of Class A Common Stock received
        in settlement of officer loans                                    --              --          (9,985)         (9,985)
Issuance from treasury stock of 225,927 shares of
        Class A Common Stock related to acquisitions                      --              --               4           6,923

Balance September 30, 1998                                            (2,155)        193,485         (39,225)        414,938
Net income                                                                --          88,271              --          88,271
Foreign currency translation adjustments                              (1,675)             --              --          (1,675)
                                                                                                                   ----------
        Comprehensive income                                              --              --              --          86,596
Issuance of 2,648,169 shares of Class A Common
        Stock upon exercise of stock options                              --              --              --          18,033
Issuance from treasury stock of 286,033 shares of
        Class A Common Stock for purchases by employees                   --              --               6           4,848
Tax benefits of stock transactions with employees                         --              --              --          15,096
Net share settlement of 155,962 shares of Class A
        Common Stock on forward purchase agreement                        --              --              --              --
Net cash settlement paid on forward purchase agreement                    --              --              --         (10,900)
Special cash dividend paid                                                --        (125,016)             --        (125,016)
Restricted stock award of 452,000 shares of Class A
        Common Stock, net of forfeitures                                  --              --              --              --
Dutch auction repurchase of 9,636,247 shares of
        Class A Common Stock and 6,123,032 shares
        of Class B Common Stock                                           --              --        (344,633)       (344,633)
Acquisition of 65,500 shares of Class A Common Stock                      --              --          (1,192)         (1,192)
Issuance of 663,716 shares of Class A Common Stock
        related to acquisitions                                           --              --              13          15,056
Amortization of unearned compensation                                     --              --              --           1,660
----------------------------------------------------------------------------------------------------------------------------
Balance September 30, 1999                                         $  (3,830)      $ 156,740       $(385,031)      $  74,486
</TABLE>


(continued)

<PAGE>   13
         (Consolidated Statements of Changes in Stockholders' Equity, continued)


<TABLE>
<CAPTION>

                                                                                          Additional
                                                             Preferred         Common        Paid-in        Unearned
(in thousands, except share data)                                Stock          Stock        Capital    Compensation
---------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>            <C>            <C>             <C>
Balance September 30, 1999                                   $       0      $      58      $ 314,829       $  (8,280)
Net income                                                          --             --             --              --
Foreign currency translation adjustments                            --             --             --              --
Net unrealized gain on marketable investments,
        net of tax effect of $12,084                                --             --             --              --
        Comprehensive income                                        --             --             --              --
Issuance of 1,379,306 shares of Class A Common
        Stock upon exercise of stock options                        --              1          8,091              --
Issuance from treasury stock of 394,279 shares of
        Class A Common Stock for purchases by employees             --             --          5,008              --
Tax benefits of stock transactions with employees                   --             --          4,179              --
Net share settlement of 155,792 shares of Class A
        Common Stock on forward purchase agreement                  --             --             --              --
Net cash settlement paid on forward purchase agreement              --             --         (8,200)             --
Restricted stock net forfeitures of 27,500 shares of
        Class A Common Stock                                        --             --           (719)            719
Acquisition of 2,493,500 shares of Class A and
        2,006,700 shares of Class B Common Stock                    --             --             --              --
Increase in carrying value of Jupiter Media Metrix                  --             --          8,321              --
Issuance of 2,074 shares of Class A Common Stock
        issued for services rendered                                --             --             42              --
Option to purchase subsidiary shares                                --             --          1,000              --
Return of 37,013 shares of Class A Common Stock
        related to acquisitions                                     --             --           (723)             --
Issuance of subsidiary stock related to an acquisition              --             --          2,000              --
Amortization of unearned compensation                               --             --             --           1,110
                                                             ---------      ---------      ---------       ---------
Balance September 30, 2000                                   $       0      $      59      $ 333,828       $  (6,451)
=====================================================================================================================
</TABLE>



<TABLE>
<CAPTION>
                                                               Accumulated
                                                                     Other                                          Total
                                                             Comprehensive    Accumulated         Treasury  Stockholders'
(in thousands, except share data)                            Income (Loss)       Earnings            Stock         Equity
-------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>             <C>            <C>             <C>
Balance September 30, 1999                                      $  (3,830)      $ 156,740      $(385,031)      $  74,486
Net income                                                             --          25,546             --          25,546
Foreign currency translation adjustments                          (11,667)             --             --         (11,667)
Net unrealized gain on marketable investments,
        net of tax effect of $12,084                               15,496              --             --          15,496
                                                                                                               ---------
        Comprehensive income                                           --              --             --          29,375
Issuance of 1,379,306 shares of Class A Common
        Stock upon exercise of stock options                           --              --             --           8,092
Issuance from treasury stock of 394,279 shares of
        Class A Common Stock for purchases by employees                --              --              8           5,016
Tax benefits of stock transactions with employees                      --              --             --           4,179
Net share settlement of 155,792 shares of Class A
        Common Stock on forward purchase agreement                     --              --             --              --
Net cash settlement paid on forward purchase agreement                 --              --             --          (8,200)
Restricted stock net forfeitures of 27,500 shares of
        Class A Common Stock                                           --              --             --              --
Acquisition of 2,493,500 shares of Class A and
        2,006,700 shares of Class B Common Stock                       --              --        (49,877)        (49,877)
Increase in carrying value of Jupiter Media Metrix                     --              --             --           8,321
Issuance of 2,074 shares of Class A Common Stock
        issued for services rendered                                   --              --             --              42
Option to purchase subsidiary shares                                   --              --             --           1,000
Return of 37,013 shares of Class A Common Stock
        related to acquisitions                                        --              --             (1)           (724)
Issuance of subsidiary stock related to an acquisition                 --              --             --           2,000
Amortization of unearned compensation                                  --              --             --           1,110
                                                                ---------       ---------      ---------       ---------
Balance September 30, 2000                                      $      (1)      $ 182,286      $(434,901)      $  74,820
=========================================================================================================================
</TABLE>


See Notes to Consolidated Financial Statements

<PAGE>   14
                                         (Consolidated Statements of Cash Flows)



<TABLE>
<CAPTION>
Year Ended September 30, (in thousands)                                                    2000              1999              1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>               <C>               <C>
Operating activities:
        Net income                                                                    $  25,546         $  88,271         $  88,347
Adjustments to reconcile net income to cash provided by operating activities:
        Depreciation and amortization of intangibles                                     56,156            31,633            27,266
        Deferred compensation                                                             2,151             1,660                --
        Tax benefit associated with employee exercise of stock options                    4,179            15,096            47,273
        Acquisition-related charge                                                           --                --             4,494
        Provision for doubtful accounts                                                   4,256             5,128             4,051
        Equity in loss of minority owned companies                                          776               846               512
        Deferred revenues                                                                36,993            57,270            30,292
        Deferred tax (benefit) expense                                                  (10,474)            6,648               906
        Net (gain) loss on sale of investments                                          (29,630)               --             1,973
        Accretion of interest and amortization of debt issue costs                        9,520                --                --
        Loss on debt extinguishment, net of tax benefit                                   1,729                --                --
        Acquisition-related tax benefit applied to reduce goodwill                          966               327                --
Changes in assets and liabilities, net of effects of acquisitions:
        Increase in fees receivable                                                     (53,414)          (40,628)          (39,737)
        Increase in deferred commissions                                                (16,552)           (3,186)           (5,132)
        (Increase) decrease in prepaid expenses and other current assets                (12,074)              381           (10,645)
        Increase in other assets                                                        (11,190)           (4,880)           (5,100)
        Increase (decrease) in accounts payable and accrued liabilities                  66,627           (14,651)              568
------------------------------------------------------------------------------------------------------------------------------------
Cash provided by operating activities                                                    75,565           143,915           145,068
------------------------------------------------------------------------------------------------------------------------------------
Investing activities:
        Payments for businesses acquired (excluding cash acquired)                     (115,162)          (57,769)          (45,418)
        Proceeds from sale of marketable securities                                      55,516                --                --
        Proceeds from sale of investments                                                36,000                --             5,000
        Payments for investments                                                        (20,427)          (13,960)          (19,814)
        Addition of property, equipment and leasehold improvements                      (55,895)          (31,747)          (24,269)
        Marketable debt securities sold (purchased), net                                     --           104,550           (58,220)
        Loans to officers                                                                    --                --            (2,475)
------------------------------------------------------------------------------------------------------------------------------------
Cash (used for) provided by investing activities                                        (99,968)            1,074          (145,196)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(continued)

<PAGE>   15

<TABLE>
<CAPTION>
Year Ended September 30, (in thousands)                                                    2000              1999              1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>               <C>               <C>
Financing activities:
        Proceeds from the exercise of stock options                                       8,092            18,033            35,730
        Proceeds from Employee Stock Purchase Plan offering                               5,016             4,842             5,885
        Net cash settlement on forward purchase agreement                                (8,200)          (10,900)          (12,045)
        Purchase of treasury stock                                                      (49,877)         (345,819)          (13,931)
        Proceeds from issuance of debt and related option                               420,000           250,000                --
        Payments on debt                                                               (370,000)               --                --
        Payments for debt issuance costs                                                 (3,993)           (4,925)               --
        Dividends paid                                                                       --          (125,016)               --
------------------------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) financing activities                                          1,038          (213,785)           15,639
------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                                    (23,365)          (68,796)           15,511
Effect of exchange rates on cash and cash equivalents                                    (3,831)              (54)             (182)
Cash and cash equivalents, beginning of period                                           88,894           157,744           142,415
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                              $  61,698         $  88,894         $ 157,744
====================================================================================================================================

Supplemental disclosures of cash flow information:
Cash paid during the period for:
        Interest                                                                      $  14,964         $     976                --
        Income taxes                                                                  $  13,685         $  47,045         $   7,721
Supplemental schedule of non-cash investing and financing activities:
        Change in net unrealized gain on marketable securities                        $  16,548                --                --
        Change in carrying value of Jupiter Media Metrix due to the
                public offering of unissued shares                                    $   7,269                --                --
        Common stock received in settlement of officer loans and
                related interest                                                             --                --         $   9,985
        Equity interest received in connection with sale of GartnerLearning                  --                --         $  42,500
        Stock issued by Company and subsidiary in connection
                with acquisitions                                                     $   2,000         $  15,056         $   6,923
        Option to purchase subsidiary shares issued by Company                        $   1,000                --                --
        Treasury stock transactions settled subsequent to year end                           --                --         $   2,072
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


See Notes to Consolidated Financial Statements

<PAGE>   16
                                  ( Notes to Consolidated Financial Statements )



NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation The consolidated financial statements include the
accounts of Gartner Group, Inc. (the "Company") and its majority-owned
subsidiaries. All significant intercompany transactions and balances have been
eliminated. The results of operations for acquisitions of companies accounted
for using the purchase method have been included in the Consolidated Statements
of Operations beginning on the closing date of acquisition. The Company's
investments in 20% to 50% owned companies in which it has the ability to
exercise significant influence over operating and financial policies are
accounted for on the equity method.

Revenue and commission expense recognition Revenue from research products is
deferred and recognized as products are delivered, and as the Company's
obligation to the client is completed over the contract term. Consulting
revenues, primarily derived from consulting and measurement engagements, are
recognized as work is performed on a contract by contract basis. Events revenue
is deferred and recognized upon the completion of the related symposium,
exposition or conference. In addition, the Company defers direct event related
costs until completion of the related symposium, exposition or conference. Other
revenues includes software licensing fees which are recognized when delivery has
occurred and when collectibility is probable, and the fees are fixed or
determinable, as well as Web based advertising revenues, which are recognized
when an advertisement is delivered to a user of the Internet network. The
Company's policy is to record at the time of signing of a research and
measurement contract the fees receivable and related deferred revenues for the
full amount of the contract billable on that date. All research and measurement
contracts are non-cancelable and non-refundable, except for government
contracts, which have a 30-day cancellation clause. Government contracts have
not produced material cancellations to date. All research and measurement
contracts are billable upon signing, absent special terms granted on a limited
basis. The Company also records the related commission obligation upon the
signing of the contract and amortizes the corresponding deferred commission
expense over the contract period in which the related revenues are earned and
amortized to income.

Cash and cash equivalents Marketable securities that mature within three months
of purchase are considered cash equivalents. Investments with maturities of more
than three months are classified as marketable securities. During the year ended
September 30, 1999, the Company sold all debt securities with maturities of more
than three months at the amortized cost of $43.2 million to finance a portion of
the Company's recapitalization (see Note 15--Recapitalization).

Investments in equity securities The Company accounts for its investments in
publicly traded equity securities under Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("FAS 115"). In accordance with FAS 115, unrealized gains on
marketable investments are classified as available-for-sale securities and are
carried net of tax as a component of Accumulated other comprehensive income in
the Stockholders' equity section of the Consolidated Balance Sheets. Investments
that are not publicly traded are carried at cost. A decline in the market value
of an available-for-sale investment below cost deemed to be other than temporary
results in a reduction in the carrying value amount to fair value. The
impairment would be charged to earnings and a new cost basis for the security
established. The cost of equity securities sold is based on specific
identification. Publicly traded equity securities that are expected to be sold
within one year of the balance sheet date are classified as Marketable equity
securities on the Consolidated Balance Sheets. All other investments are
included in Other assets on the Consolidated Balance Sheets.

Property, equipment and leasehold improvements Property, equipment and leasehold
improvements are stated at cost less accumulated depreciation and amortization.
Property and equipment are depreciated using the straight-line method over the
estimated useful lives of the assets. Leasehold improvements are amortized using
the straight-line method over the shorter of the estimated useful lives of the
assets or the remaining term of the related leases.

<PAGE>   17
                       ( Notes to Consolidated Financial Statements, continued )



Impairment of long-lived assets and intangible assets The Company regularly
reviews long-lived assets and intangible assets for impairment. Management's
policy regarding long-lived assets and intangible assets is to evaluate the
recoverability of these assets when the facts and circumstances suggest that
these assets may be impaired. Should events or circumstances indicate that the
carrying value may not be recoverable based on undiscounted future cash flows,
an impairment loss measured by the difference between the discounted future cash
flows (or another acceptable method for determining fair value) and the carrying
value of the long-lived assets would be recognized by the Company. This analysis
relies on a number of factors including operating results, business plans,
budgets, economic projections and changes in management's strategic direction.

Software development costs The Company capitalizes certain computer software
development costs and enhancements upon the establishment of technological
feasibility, limited to the net realizable value of the software product, and
ceases when the software product is available for general release to clients.
Until these products reach technological feasibility, all costs related to
development efforts are charged to expense. Once technological feasibility has
been determined, additional costs incurred in development, including coding,
testing, and documentation, are capitalized. Amortization of software
development costs is provided on a product-by-product basis over the estimated
economic life of the software, generally two years, using the straight-line
method. Amortization of capitalized computer software development costs begins
when the products are available for general release to customers. Additionally,
the Company capitalizes certain costs that are incurred to purchase or to create
and implement internal use software. The Company performs periodic reviews to
ensure that unamortized capitalized software development costs remain
recoverable from future revenue.

Intangible assets Intangible assets include goodwill, non-compete agreements,
tradenames and other intangibles. Goodwill represents the excess of the purchase
price of acquired businesses over the estimated fair value of the tangible and
identifiable intangible net assets acquired. Amortization is recorded using the
straight-line method over periods ranging from three to thirty years.
Non-compete agreements are being amortized on a straight-line basis over the
period of the agreement ranging from two to five years. Tradenames are being
amortized on a straight-line basis over their estimated useful lives ranging
from nine to twelve years.

Foreign currency translation All assets and liabilities of foreign subsidiaries
are translated into U.S. dollars at fiscal year-end exchange rates. Income and
expense items are translated at average exchange rates prevailing during the
year. The resulting translation adjustments are recorded as a component of
stockholders' equity.

Income taxes Deferred tax assets and liabilities are recognized based on
differences between the book and tax basis of assets and liabilities using
presently enacted tax rates. The provision for income taxes is the sum of the
amount of income tax paid or payable for the year as determined by applying the
provisions of enacted tax laws to taxable income for that year and the net
changes during the year in the Company's deferred tax assets and liabilities.
Undistributed earnings of subsidiaries outside of the U.S. amounted to
approximately $33.0 million as of September 30, 2000, and will either be
indefinitely reinvested or remitted substantially free of U.S. tax. Accordingly,
no material provision has been made for taxes that may be payable upon
remittance of such earnings, nor is it practicable to determine the amount of
this liability. The Company credits additional paid-in capital for realized tax
benefits arising from stock transactions with employees. The tax benefit on a
nonqualified stock option is equal to the tax effect of the difference between
the market price of a share of the Company's common stock on the exercise and
grant dates.

Fair value of financial instruments Most of the Company's financial instruments,
including cash, trade receivables and payables, and accruals are short-term in
nature. Accordingly, the carrying amounts of these financial instruments
approximate their fair value (see Note 11 regarding forward purchase
agreements). Investments in publicly traded equity securities are valued based
on quoted market prices. Investments in equity securities that are not publicly
traded are valued at cost, which approximates fair market value.

            The carrying amounts of long-term debt approximates fair value as
the rates of interest on these credit facilities approximate current market
rates of interest for similar instruments with comparable maturities. The
Company believes that it is not practical to estimate a fair value different
from the carrying face value of the $300.0 million of 6% convertible
subordinated notes given the numerous features that are unique to these
convertible notes (see Note 9--Long-Term Debt).

Concentrations of credit risk Financial instruments that potentially subject the
Company to concentrations of credit risk consist primarily of cash and fees
receivable. Concentrations of credit risk with respect to fees receivable are
limited due to the large number of clients comprising the Company's client base
and their dispersion across many different industries and geographic regions.

Use of estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities and
disclosures, if any, of contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
Estimates are used when accounting for such items as allowance for doubtful
accounts, depreciation, amortization, income taxes and certain accrued
liabilities.

Reclassifications In July 2000, the Emerging Issues Task Force reached a
consensus on Issue No. 00-15, "Classification in the Statement of Cash Flows of
the Income Tax Benefit Received by a Company upon Exercise of a Nonqualified
Employee Stock Option" which requires that stock option income tax benefits be
classified as cash from operations in the cash flows statement. Prior period
Consolidated Statements of Cash Flows have been restated to conform to this
presentation. Certain other reclassifications have been made in the prior years
financial statements to conform with the year ended September 30, 2000
presentation.

NOTE 2 : BUSINESS ACQUISITIONS

On October 7, 1998, the Company acquired all the assets and assumed the
liabilities of Griggs-Anderson, Inc., for $10.9 million in cash and 305,808
shares of Class A Common Stock of the Company, which had an approximate fair
market value of $7.3 million. Griggs-Anderson, Inc. provides custom market
research to vendors in the technology marketplace, research and surveys for the
evaluation of Web sites for effectiveness of content, technical performance,
ease of navigation, impact of

<PAGE>   18
                       ( Notes to Consolidated Financial Statements, continued )



graphics, and demographic profiles of users. The acquisition was accounted for
by the purchase method and the purchase price has been allocated to the assets
acquired and the liabilities assumed, based upon estimated fair values at the
date of acquisition. The excess purchase price over the fair value of amounts
assigned to the net tangible assets acquired was $16.9 million, of which $15.5
million has been recorded as goodwill, which is being amortized over 30 years.
In addition, $1.4 million of the purchase price was allocated to a non-compete
agreement which is being amortized over 5 years.

            On November 13, 1998, the Company acquired all of the outstanding
shares of Wentworth Research, Limited ("Wentworth") for $8.3 million in cash.
Wentworth provides research and advisory services to chief information officers
and the senior information technology management community in the United Kingdom
and Hong Kong. The acquisition was accounted for by the purchase method, and the
purchase price has been allocated to the assets acquired and the liabilities
assumed, based upon estimated fair values at the date of acquisition. The excess
purchase price over the fair value of amounts assigned to the net tangible
assets acquired was approximately $10.5 million, of which $9.7 million has been
recorded as goodwill, which is being amortized over 30 years. In addition, $0.8
million of the purchase price was allocated to a non-compete agreement which is
being amortized over 2 years.

            On January 1, 1999, the Company acquired all of the assets and
assumed the liabilities of G2R, Inc. ("G2R") for $7.8 million in cash and
358,333 shares of Class A Common Stock of the Company which had an approximate
fair market value of $7.8 million. G2R is a provider of research and consulting
services to IT product vendors and professional services and outsourcing firms.
The acquisition was accounted for by the purchase method and the purchase price
has been allocated to the assets acquired and the liabilities assumed, based
upon estimated fair values at the date of acquisition. The excess purchase price
over the fair value of amounts assigned to the net tangible assets acquired was
approximately $13.4 million, of which $12.6 million has been recorded as
goodwill, which is being amortized over 30 years. In addition, $0.8 million of
the purchase price was allocated to a non-compete agreement which is being
amortized over 4 years.

            On July 30, 1999, the Company acquired all of the outstanding shares
of The Warner Group ("Warner") for $18.0 million in cash. Warner is a leading
management consulting firm specializing in information technology,
communications technology and performance improvement for government agency
clients. The acquisition was accounted for by the purchase method, and the
purchase price has been allocated to the assets acquired and the liabilities
assumed, based upon estimated fair values at the date of acquisition. The excess
purchase price over the fair value of amounts assigned to the net tangible
assets acquired was approximately $15.2 million, of which $14.3 million has been
recorded as goodwill and is being amortized over 30 years. In addition, $0.9
million of the purchase price was allocated to non-compete agreements which are
being amortized over 2 and 5 years.

            On October 29, 1999, the Company acquired a 70% ownership interest
in cPulse, LLC ("cPulse") for $2.5 million in cash and a $1.0 million note
payable on the first anniversary date of the acquisition. Additional
consideration is payable as a percentage of 2001 and 2002 net revenues of
cPulse. cPulse provides a Web-satisfaction monitoring service that enables
companies to prioritize their Web investments and evaluate the effectiveness of
changes through customer satisfaction intelligence. The acquisition was
accounted for by the purchase method. Approximately $3.3 million of the purchase
price was allocated to goodwill, which is being amortized over 5 years and $0.2
million of the purchase price was allocated to a non-compete agreement, which is
being amortized over 3 years. Any additional consideration will be recorded as
goodwill.

            On November 30, 1999, the Company acquired all of the outstanding
shares of Computer Financial Consultants Limited ("CFC") for $16.0 million in
cash. CFC provides senior executives in IT and purchasing with assistance
intended to enhance the procurement of IT related products and services. The
acquisition was accounted for by the purchase method and the purchase price has
been allocated to the assets acquired and the liabilities assumed, based upon
estimated fair values at the date of the acquisition. The excess purchase price
over the fair value of amounts assigned to the net tangible assets acquired was
approximately $11.6 million, of which $11.0 million has been allocated to
goodwill and is being amortized over 30 years. In addition, $0.6 million of the
purchase price was allocated to a non-compete agreement which is being amortized
over 5 years.

            On December 10, 1999, the Company acquired all of the assets and
assumed the liabilities of Rendall and Associates, Inc. ("Rendall") for $12.0
million in cash. Rendall provides strategic planning advice, feasibility and
competitive analysis and research on the telecommunications market,
technologies, regulation and public policies. Additionally, Rendall provides
technical expertise in broadband technologies. The acquisition was accounted for
by the purchase method and the purchase price has been allocated to the assets
acquired and the liabilities assumed, based upon estimated fair values at the
date of the acquisition. The excess purchase price over the fair value of
amounts assigned to the net tangible assets acquired was approximately $11.1
million, of which $9.9 million has been allocated to goodwill and is being
amortized over 20 years. In addition, $1.2 million of the purchase price was
allocated to a non-compete agreement which is being amortized over 5 years.

            On March 21, 2000, the Company acquired 90% of the outstanding
common stock of TechRepublic, Inc. ("TechRepublic") for approximately $78.5
million in cash. TechRepublic is an online destination developed exclusively for
IT professionals by IT professionals and provides career insight, community
interaction, and customized content to CIOs, IT managers, network
administrators, support professionals, training providers, and other enterprise
computing professionals. The TechRepublic Web site offerings include IT industry
news, newsletters, analysis, columns, articles, downloads, forums, event
listings and job, peer and vendor directories. The acquisition was accounted for
by the purchase method and the purchase price has been allocated to the assets
acquired and the liabilities assumed, based upon estimated fair values at the
date of the acquisition. The excess purchase price over the fair value of
amounts assigned to the net tangible assets acquired was approximately $83.0
million, of which $79.3 million has been allocated to goodwill (non-deductible
for tax purposes) and is being amortized over 3 years. In addition, $3.7 million
of the purchase price was allocated to non-compete agreements which are being
amortized over 3 years.

<PAGE>   19
                       ( Notes to Consolidated Financial Statements, continued )



            The following unaudited pro forma consolidated results of operations
are presented as if the acquisition of TechRepublic had been made at the
beginning of fiscal 1999 (in thousands, except per share data). The effects of
the other fiscal 2000 acquisitions on the consolidated financial statements are
not significant and have been excluded from the pro forma presentation.


<TABLE>
<CAPTION>
Year Ended September 30,                            2000            1999
------------------------------------------------------------------------
<S>                                             <C>             <C>
Total revenues                                  $859,730        $734,775
Income before extraordinary loss                $  7,382        $ 53,211
Net income                                      $  5,653        $ 53,211
Diluted earnings per common share before
        extraordinary loss                      $   0.08        $   0.51
Diluted earnings per common share               $   0.06        $   0.51
========================================================================
</TABLE>


            The unaudited pro forma information is not necessarily indicative of
the combined results of operations that might have occurred had the purchase
been effective at the beginning of fiscal 1999.

            On August 24, 2000, a majority-owned subsidiary of the Company
acquired the outstanding common stock of IT-Radar.com, Inc. ("ITRadar") for
approximately $6.4 million in cash and 419,287 shares of Common Stock of
TechRepublic, which had an approximate fair market value of $2.0 million.
Additional consideration of up to 1,530,398 shares of Common Stock of
TechRepublic is payable contingent based upon the achievement of future targeted
earnings. ITRadar is a business-to-business information technology marketplace
that connects buyers and sellers of information technology services. ITRadar's
proprietary technology streamlines the vendor-selection process and enables
information technology services buyers to more rapidly identify, evaluate, and
engage with information technology providers. The acquisition was accounted for
by the purchase method and the purchase price has been allocated to the assets
acquired and the liabilities assumed, based upon estimated fair values at the
date of the acquisition. The excess purchase price over the fair value of
amounts assigned to the net tangible assets acquired was approximately $10.6
million, which has been allocated to goodwill and is being amortized over 3
years. Any additional consideration paid will be recorded as goodwill.

            During 2000, the Company completed additional acquisitions for
consideration of $7.2 million in cash. During 1999, the Company completed
additional acquisitions for consideration of $16.1 million in cash. These
acquisitions have been accounted for under the purchase method and substantially
all of the purchase price has been assigned to goodwill.

            On October 2, 2000, the Company acquired all of the assets and
assumed the liabilities of Solista Global LLC. ("Solista") for approximately
$7.0 million in cash. An additional $2.0 million of purchase price is contingent
based upon the achievement of certain financial targets in the future. Solista
is a provider of strategic consulting services that merge technology and
business expertise to help clients build strategies for the digital world. The
acquisition was accounted for under the purchase method.

NOTE 3 : NET GAIN (LOSS) ON SALE OF INVESTMENTS

On October 7, 1999, Jupiter Communications, Inc. ("Jupiter") completed its
initial public offering at $21.00 per share of common stock. Upon completion of
Jupiter's initial public offering, the Company owned 4,028,503 shares of
Jupiter's outstanding common stock. The change in the Company's proportionate
share of Jupiter's equity resulted in the Company's write-up of the investment
by approximately $15.4 million and increases in deferred tax liability and
additional paid-in capital of approximately $7.1 million and $8.3 million,
respectively. During the quarter ended June 30, 2000, the Company's investment
decreased below 20% of Jupiter's outstanding common stock. Because the Company
had concluded it no longer exercised significant influence over Jupiter, it
changed its method of accounting for this investment from the equity method to
the cost method. During the year ended September 30, 2000, the Company sold
1,995,950 shares for net cash proceeds of $55.5 million at an average price of
$27.81 per share for a pre-tax gain of $42.9 million. In September 2000, Jupiter
merged with Media Metrix, Inc., creating Jupiter Media Metrix. Jupiter
shareholders received 0.946 shares of Jupiter Media Metrix for each share of
Jupiter that they owned. At the date of the merger, the Company owned 2,032,553
shares of Jupiter, which were exchanged for shares of Jupiter Media Metrix. At
September 30, 2000, the Company's investment of 1,922,795 shares of Jupiter
Media Metrix had a fair market value of $30.6 million and is recorded at fair
value and is included in Marketable equity securities in the Consolidated
Balance Sheets at September 30, 2000.

            On September 1, 1998, the Company sold GartnerLearning, a division
of the Company that provides technology based training and services for IT
professionals to NETg Inc. ("NETg"), a subsidiary of Harcourt, Inc. (formerly
Harcourt Brace & Company), for $5.0 million in cash and an 8% equity interest in
NETg. In addition, the Company received a put option, which would allow the
Company to sell its 8% equity interest to an affiliate of Harcourt, Inc. for
$48.0 million in cash. This put option was exercisable for two years beginning
on September 1, 2002, if certain conditions were met. The Company's 8% interest
in NETg was independently appraised at $42.5 million on the date of sale and has
been included in Other assets in the Consolidated Balance Sheets at September
30, 1999. Including transaction costs related to the sale of $3.8 million, the
pre-tax loss on sale of GartnerLearning was approximately $2.0 million.

            On June 30, 2000, the Company sold its 8% investment in NETg for
$36.0 million in cash to an affiliate of Harcourt, Inc. resulting in a pre-tax
loss of approximately $6.6 million. The Company received the cash proceeds on
July 7, 2000. In addition, the Company negotiated the settlement of a joint
venture agreement associated with the sale of GartnerLearning for approximately
$6.7 million.

NOTE 4 : INVESTMENTS

In addition to equity securities owned directly by the Company and through SI
Venture Associates, LLC ("SI I"), a wholly owned affiliate, the Company owns 34%
of SI Venture Fund II, L.P. ("SI II"). Both entities are engaged in making
venture capital investments in early to mid-stage IT-based or Internet-enabled
companies. Both entities are managed pursuant to a management contract with SI
Services Company, LLC, an entity controlled by the current Chairman of the Board
of the Company and a former officer of the Company. The accounts of SI I are
included in the Company's Consolidated Financial Statements. The Company's
investment in SI II is recorded on the equity method. The Company has a total
investment commitment to SI I and SI II of $10.0 million and $30.0 million,
respectively, of which

<PAGE>   20
                       ( Notes to Consolidated Financial Statements, continued )



$7.4 million of the SI II commitment remains unfunded at September 30, 2000.
This remaining commitment is expected to be funded in fiscal 2001.

            A summary of the Company's investments in marketable equity
securities and cost based investments at September 30, 2000 is as follows (in
thousands):


<TABLE>
<CAPTION>
                                                               Gross          Gross
                                                          Unrealized     Unrealized
                                                Cost           Gains         Losses     Fair Value
--------------------------------------------------------------------------------------------------
<S>                                          <C>          <C>            <C>            <C>
Marketable equity securities
    available for sale                       $14,205        $21,265        $   (66)        $35,404
Other investments                             18,349           --             --            18,349
--------------------------------------------------------------------------------------------------
        Total                                $32,554        $21,265        $   (66)        $53,753
==================================================================================================
</TABLE>


At September 30, 1999, the Company had $65.3 million in cost based investments.

            Also included in Other assets in the Consolidated Balance Sheets is
the Company's equity method investment in SI II which amounted to $28.7 million
and $9.9 million at September 30, 2000 and 1999, respectively. The Company's
share of equity loss in SI II as of September 30, 2000 amounted to $0.1 million.
In addition, for the year ended September 30, 2000 the Company recorded $6.4
million of its share of net unrealized holding gains in available for sale
equity securities owned by SI II.

NOTE 5 : OTHER CHARGES

During 1999, the Company recorded other charges related to reorganization and
recapitalization of approximately $30.1 million on a pre-tax basis.
Approximately $14.2 million of the charge related to certain job eliminations
associated with certain strategic reduction in force initiatives. Approximately
$9.2 million of the other charge pertained to legal and advisory fees associated
with the Company's recapitalization (see Note 15--Recapitalization). In
relation to the Company's recapitalization, the Company's Board of Directors
approved a special one-time cash incentive plan to be earned and paid in three
installments and designed to enhance retention of key personnel. Approximately
twenty-five percent of the retention incentive, or $6.7 million, was vested in
1999 and was paid on October 15, 1999. The second and third payments incurred
and paid under the retention incentive plan in fiscal 2000 were approximately
$17.5 million.

            During 1998, the Company recorded other charges, primarily
consisting of relocation and severance costs, totaling approximately $2.8
million related to the Company's relocation of certain accounting and order
processing operations from Stamford, Connecticut to a new financial services
center in Ft. Myers, Florida. These expenses are presented as Other charges in
the Consolidated Statements of Operations.

NOTE 6 : PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Property, equipment and leasehold improvements, less accumulated depreciation
and amortization consist of the following (in thousands):


<TABLE>
<CAPTION>
                                                                September 30,
                                                         ---------------------------
                                     Useful Life
                                         (Years)              2000              1999
------------------------------------------------------------------------------------
<S>                                  <C>                 <C>               <C>
Computer equipment and software              2-3         $ 111,151         $  75,780
Furniture and equipment                      3-8            47,879            42,737
Leasehold improvements                      2-15            29,891            23,955
------------------------------------------------------------------------------------
                                                           188,921           142,472
Less--accumulated depreciation
    and amortization                                       (97,662)          (78,880)
------------------------------------------------------------------------------------
                                                         $  91,259         $  63,592
====================================================================================
</TABLE>


            At September 30, 2000 and 1999, development costs for internal use
software were $26.3 million and $16.4 million, respectively, net of accumulated
amortization of $10.3 million and $3.1 million, respectively. Amortization of
capitalized internal software development costs totaled $7.2 million, $2.3
million and $0.8 million in fiscal 2000, 1999 and 1998, respectively.

NOTE 7 : INTANGIBLE ASSETS, NET

Intangible assets, less accumulated amortization, consist of the following (in
thousands):


<TABLE>
<CAPTION>
                                                                 September 30,
                                                        ---------------------------
                                     Amortization
                                   Period (Years)            2000              1999
-----------------------------------------------------------------------------------
<S>                                <C>                  <C>               <C>
Goodwill                                   3-30         $ 352,482         $ 237,933
Non-compete agreements                      2-5            15,733            10,600
Tradenames                                 9-12             2,247             3,140
-----------------------------------------------------------------------------------
                                                          370,462           251,673
Less--accumulated amortization                            (55,265)          (28,573)
-----------------------------------------------------------------------------------
                                                        $ 315,197         $ 223,100
===================================================================================
</TABLE>


NOTE 8 : ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following
(in thousands):


<TABLE>
<CAPTION>
                                                    September 30,
                                            ------------------------
                                                2000            1999
--------------------------------------------------------------------
<S>                                         <C>             <C>
Taxes payable                               $ 51,100        $ 26,491
Payroll and related benefits payable          44,099          25,955
Commissions payable                           33,985          23,235
Accounts payable                              25,981           8,917
Current deferred tax payable                  13,917             515
Other accrued liabilities                     32,325          32,250
--------------------------------------------------------------------
                                            $201,407        $117,363
====================================================================
</TABLE>


<PAGE>   21
                       ( Notes to Consolidated Financial Statements, continued )



NOTE 9 : LONG-TERM DEBT

On July 16, 1999, the Company entered into an unsecured Credit Agreement with
The Chase Manhattan Bank, as administrative agent for the participating
financial institutions thereunder, providing for a maximum of $500.0 million of
credit facilities, consisting of a $350.0 million term loan and a $150.0 million
senior revolving credit facility. On February 25, 2000, the Company modified
certain financial and other covenants to permit the TechRepublic acquisition and
issuance of convertible debt. Loans under the revolving facility will be
available for five years, subject to certain customary conditions on the date of
any such loan. On July 17, 2000, the Company entered into a second amendment to
the Credit Agreement. Under this amendment, the Company agreed to refinance all
existing indebtedness and to repay in full and terminate the term loans drawn
under the existing Credit Agreement. As part of the second amendment to the
Credit Agreement, the Company entered into a senior revolving credit facility
totaling a maximum aggregate principal amount of up to $200.0 million. In
connection with the extinguishment of the term loan, the Company wrote off $2.9
million, net of tax benefit of $1.2 million, of deferred debt issuance costs in
the fourth quarter of fiscal 2000. The charge was recorded as an extraordinary
loss. At September 30, 2000, there were no amounts outstanding under the
revolving credit facility. A commitment fee of 0.30% to 0.50% is paid on the
unused revolving credit amount. Pursuant to certain financial covenants of the
revolving credit facility, the Company had available $121.9 million of
borrowings at September 30, 2000. The weighted average interest rate on
borrowings was 7.6% for the year ended September 30, 2000.

            In connection with the TechRepublic acquisition entered into on
March 21, 2000, the Company issued in a private placement transaction on April
17, 2000, $300.0 million of 6% convertible subordinated notes (the "convertible
notes") to Silver Lake Partners, L.P. ("Silver Lake") and certain of Silver
Lake's affiliates. The convertible notes mature in April 2005. The convertible
notes accrue interest at 6% per annum. Interest accrues semiannually by a
corresponding increase in the face amount of the convertible notes commencing
September 15, 2000. Accordingly, $7.4 million has been added to the face amount
of the convertible notes balance outstanding at September 30, 2000. The
convertible notes are convertible into shares of the Company's Class A Common
Stock, commencing April 17, 2003, at an initial price of $15.87 per share. On
the first anniversary date of issuance of the convertible notes, April 17, 2001,
the conversion price will be adjusted, or reset, to be equal to the lower of the
initial conversion price of $15.87 per share or, if the average closing price
over the thirty trading day period ending April 17, 2001 is less than $14.43, a
price equal to a 10% premium to the average closing price over that same period.
In the event the conversion price is subject to downward adjustment due to the
first anniversary reset provision, the Company can elect to redeem the
convertible notes in whole, but not in part, for 125% of the then outstanding
face amount subject to certain restrictions unless a majority of the convertible
noteholders elect to waive the reset. At the Company's option, the conversion
rights can be settled in cash based on the market price of the Class A Common
Stock at the time of conversion. The Company has also granted to Silver Lake an
option to acquire 5% of the fully diluted capital stock of TechRepublic at a
cost to be based upon the market capitalization of TechRepublic at time of
exercise. Additionally, the option grants Silver Lake the right to acquire 5% of
any Company subsidiary that is spun off or spun out at 80% of the initial public
offering price. The Company has valued the option at $1.0 million, which has
been recorded as a discount to the convertible notes and is included in
Additional paid-in capital on the Consolidated Balance Sheets at September 30,
2000. As part of the transaction, two Silver Lake representatives have been
elected to the Company's ten member Board of Directors. The Company may call the
convertible notes for redemption any time after April 17, 2003. On April 18,
2000, $200.0 million of the proceeds were used to pay down term loan borrowings
under the Credit Agreement. The Company incurred $7.9 million of transaction and
advisory fees related to the transaction. These fees are being amortized over
the life of the debt using the effective interest method.

            Letters of credit are issued by the Company in the ordinary course
of business. At September 30, 2000, the Company had outstanding letters of
credit with Chase Manhattan Bank for $1.5 million and with The Bank of New York
for $2.0 million.

NOTE 10 : COMMITMENTS AND CONTINGENCIES

The Company leases various facilities, furniture and computer equipment under
operating lease arrangements expiring between 2000 and 2026. Future minimum
annual payments under non-cancelable operating lease agreements at September
30, 2000 are as follows (in thousands):


<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------
<S>                                     <C>
2001                                    $ 27,322
2002                                      17,772
2003                                      15,928
2004                                      14,211
2005                                      13,110
Thereafter                               103,918
------------------------------------------------
Total minimum lease payments            $192,261
================================================
</TABLE>


            Rental expense for operating leases, net of sublease income, was
$30.6 million, $24.4 million, and $21.3 million for the years ended September
30, 2000, 1999 and 1998, respectively. The Company has commitments with two
facilities management companies for printing, copying, mailroom and other
related services. The minimum annual obligations under these service agreements
are $4.7 million for 2000, $4.0 million for 2001, $4.0 million for 2002, and
$1.3 million for 2003.

            In addition, the Company has a remaining commitment to repurchase
662,363 shares of Class A Common Stock and 4,128 shares of Class B Common Stock
on the open market by July 2001 as part of its recapitalization (see Note
15--Recapitalization).

            The Company is involved in legal proceedings and litigation arising
in the ordinary course of business. The Company believes the outcome of all
current proceedings, claims and litigation will not have a material effect on
the Company's financial position or results of operations when resolved in a
future period.



<PAGE>   22
                         (Notes to Consolidated Financial Statements, continued)



NOTE 11 : STOCKHOLDERS' EQUITY

Capital stock   Class A Common Stock and Class B Common Stock stockholders are
entitled to one vote per share on all matters to be voted by stockholders, other
than the election of directors. Class A Common Stock stockholders are entitled
to one vote per share on the election of Class A directors, which constitute no
more than 20% of the directors, and Class B Common Stock stockholders are
entitled to one vote per share on the election of Class B directors, which
constitute at least 80% of the directors.

Stock option plans and warrants   Under the terms of the 1991 Stock Option Plan,
the Board of Directors may grant non-qualified and incentive options, entitling
employees to purchase shares of the Company's common stock at the fair market
value on the date of grant. The Board can determine the date on which options
vest and become exercisable. A total of 32,800,000 shares of Class A Common
Stock have been reserved for issuance under this plan. At September 30, 2000 and
1999, 1,354,876 and 5,948,420 options were available for grant, respectively.

         In January 1993, the Company adopted the 1993 Director Option Plan, a
stock option plan for directors, and reserved an aggregate of 1,200,000 shares
of Class A Common Stock for issuance under this plan. The plan currently
provides for the automatic grant of 15,000 options to purchase shares of Class A
Common Stock to each non-employee director upon first becoming an outside
director and the automatic grant of an option to purchase an additional 7,000
shares of Class A Common Stock annually based on continuous service as an
outside director. The exercise price of each option granted under the plan is
equal to the fair market value of the Class A Common Stock at the date of grant.
Options granted are subject to cumulative yearly vesting over a three-year
period after the date of grant. At September 30, 2000 and 1999, 464,635 and
526,000 options were available for grant, respectively.

         In October 1994, the Board of Directors and stockholders of the Company
approved the adoption of a Long Term Stock Option Plan and the reservation of an
aggregate of 6,560,000 shares of Class A Common Stock for issuance thereunder.
The purpose of the plan is to provide to senior personnel long-term equity
participation in the Company as an incentive to promote the long-term success of
the Company. The exercise price of each option granted under the plan is equal
to the fair market value of the Class A Common Stock at the date of grant. All
options granted under the plan vest and become fully exercisable five years
following the date of grant, based on continued employment, and have a term of
ten years from the date of grant assuming continued employment. Vesting and
exercisability accelerates upon achievement of certain financial performance
targets determined by the Board of Directors. If the financial performance
targets are met for the year of grant in accordance with parameters as set by
the Board at its sole discretion, 25% of the shares granted become exercisable
on the first anniversary date following the date of grant and, if cumulative
financial performance targets are met for both the first and second years
following the date of grant, a second 25% become exercisable three years
following the date of grant. If cumulative financial performance targets are met
for all three years following the date of grant, a third 25% become exercisable
on the fourth anniversary date following the date of grant and the final 25%
become exercisable on the fifth anniversary following the date of grant. Based
on cumulative performance through 2000, 1,996,195 shares were exercisable on
September 30, 2000. At September 30, 2000 and 1999, 600,250 and 624,000 options
were available for grant, respectively.

         In October 1996, the Company adopted the 1996 Long Term Stock Option
Plan. Under the terms of the plan, the Board of Directors may grant
non-qualified and incentive options, entitling employees to purchase shares of
the Company's common stock at the fair market value at the date of option grant.
A total of 1,800,000 shares of Class A Common Stock was reserved for issuance
under this plan. All options granted under the plan vest and become fully
exercisable six years following the date of grant, based on continued
employment, and have a term of ten years from the date of grant assuming
continued employment. Vesting and exercisability accelerates upon achievement of
certain financial performance targets determined by the Board of Directors. If
financial performance targets are met in the year of grant in accordance with
parameters as set by the Board in its sole discretion, 25% of the shares granted
become exercisable on the third anniversary date following the date of grant. If
cumulative financial performance targets are met for both the first and second
years following the date of grant, a second 25% become exercisable three years
following the date of grant. If financial performance targets are met
cumulatively for all three years following the date of grant, a third 25% become
exercisable on the fourth anniversary date following the date of grant and the
final 25% become exercisable on the fifth anniversary following the date of
grant. Based on 1997 and 1998 performance, 501,250 options were exercisable on
September 30, 2000. Based on 1999 performance, an additional 194,500 will vest
in 2001. At September 30, 2000 and 1999, 812,000 and 473,000 options to purchase
common stock were available for grant, respectively.

         In October 1998, the Company adopted the 1998 Long Term Stock Option
Plan. Under the terms of the plan, the Board of Directors may grant
non-qualified and incentive options, entitling employees to purchase shares of
the Company's common stock at the fair market value at the date of option or
restricted stock grant. A total of 2,500,000 shares of Class A Common Stock was
reserved for issuance under this plan. All options currently granted under the
plan vest and become fully exercisable six years following the date of grant,
based on continued employment, and have a term of ten years from the date of
grant assuming continued employment. Vesting and exercisability accelerates upon
achievement of certain financial performance targets determined by the Board of
Directors. If financial performance targets are met in the year of grant in
accordance with parameters as set by the Board in its sole discretion, 25% of
the shares granted become exercisable in the third anniversary date following
the date of grant. If cumulative financial performance targets are met for both
the first and second years following the date of grant, a second 25% become
exercisable three years following the date of grant. If financial performance
targets are met cumulatively for all three years following the date of grant, a
third 25% become exercisable on the fourth anniversary date following the date
of grant and the final 25% become exercisable on the fifth anniversary following
the date of grant. Based on cumulative 2000 performance, no vesting has
accelerated; however, if cumulative financial performance targets are met for
1999, 2000 and 2001, vesting may still accelerate. At September 30, 2000,
662,001 options to purchase common stock were available for grant.

         On December 15, 1998, the Company adopted an option exchange program
that allowed the exchange of certain stock options granted from July 1998
through April 1998 for options with an exercise price of $20.46. In total,
options to purchase 4,737,400 shares of common stock were exchanged under this
program. The original vesting schedules and expiration dates associated with
these stock options were also amended to commence with the stock option exchange
program date. These amounts have been included as granted and canceled options
during 1999 in the summary activity table shown below.

<PAGE>   23
                         (Notes to Consolidated Financial Statements, continued)



         In connection with the recapitalization (see Note 15--
Recapitalization), substantially all options with an exercise price below the
fair market value of the stock on the effective date were reduced to maintain
the ratio of the exercise price to the fair market value of the stock prior to
the special, nonrecurring cash dividend, which was $1.1945 per share. The
exercise prices of options with an exercise price equal to or greater than the
fair market value of the stock on the effective date were reduced by an amount
equal to the dividend per share paid by the Company. No changes were made in
either the number of shares of common stock covered or in the vesting schedule
of the options.

         A summary of stock option activity under the plans and agreement
through September 30, 2000 follows:


<TABLE>
<CAPTION>
                                                                Weighted
                                               Class A           Average
                                          Common Stock          Exercise
                                          Under Option             Price
------------------------------------------------------------------------
<S>                                       <C>                   <C>
Outstanding at September 30, 1997           17,821,350           $11.462
    Granted                                  5,060,949           $33.329
    Exercised                               (5,370,690)          $ 6.716
    Canceled                                (1,380,577)          $20.539
------------------------------------------------------------------------
Outstanding at September 30, 1998           16,131,032           $19.086
    Granted                                 11,818,259           $20.946
    Exercised                               (2,648,169)          $ 6.810
    Canceled                                (7,511,554)          $21.637
------------------------------------------------------------------------
Outstanding at September 30, 1999           17,789,568           $17.475
    Granted                                 18,256,310           $11.859
    Exercised                               (1,379,306)          $ 5.886
    Canceled                                (4,099,846)          $17.240
------------------------------------------------------------------------
Outstanding at September 30, 2000           30,566,726           $14.669
========================================================================
</TABLE>


         Options for the purchase of 6,754,574 and 4,417,986 shares of Class A
Common Stock were exercisable at September 30, 2000 and 1999, respectively.

         The following table summarizes information about stock options
outstanding at September 30, 2000:


<TABLE>
<CAPTION>
                                                             Weighted              Average
                                                              Average            Remaining
       Range of            Number              Number        Exercise          Contractual
Exercise Prices       Outstanding         Exercisable           Price         Life (Years)
---------------       -----------         -----------        --------         ------------
<S>                   <C>                 <C>                <C>              <C>
$  1.00- 4.83             173,430             138,430          $ 3.36                 1.71
$  5.51- 9.69           2,253,650           2,253,650          $ 7.02                 3.95
$ 10.28-14.56          15,149,040             108,540          $11.41                 9.25
$ 15.67-19.90           8,916,728           3,013,620          $18.35                 7.91
$ 20.46-24.49           3,564,878             900,970          $22.29                 8.16
$ 25.18-37.29             509,000             339,364          $31.36                 6.17
                       ----------          ----------                                     
                       30,566,726          6,754,574                                      
                       ==========          =========                                      
</TABLE>


         A warrant expiring December 1, 2000 to purchase 599,400 shares of Class
A Common Stock at $16.42 per share is held by IMS Health.

Employee stock purchase plan  In January 1993, the Company adopted an employee
stock purchase plan, and reserved an aggregate of 4,000,000 shares of Class A
Common Stock for issuance under this plan. The plan permits eligible employees
to purchase Class A Common Stock through payroll deductions, which may not
exceed 10% of an employee's compensation (or $21,250 in any calendar year), at a
price equal to 85% of the Class A Common Stock price as reported by NYSE at the
beginning or end of each offering period, whichever is lower. During the year
ended September 30, 2000, 394,279 shares were issued from treasury stock at an
average purchase price of $12.59 per share in conjunction with this plan. At
September 30, 2000, 1,429,406 shares were available under the plan.

Restricted stock awards  Beginning in 1998, the Company granted restricted stock
awards under the 1991 Stock Option Plan and the 1998 Long Term Stock Option
Plan. The restricted stock awards vest in six equal installments with the first
installment vesting two years after the grant and then annually thereafter.
Recipients are not required to provide consideration to the Company other than
rendering service and have the right to vote the shares and to receive
dividends. The restricted stock may not be sold by the employee during the
vesting period. In 1999, the Company also granted 35,000 stock options under the
1998 Long Term Stock Option Plan with an exercise price of $1.00 per share that
vest on the same basis as the restricted stock awards to certain international
employees. Such stock options had a fair market value of $23.25 per stock option
on the date of grant. At September 30, 2000, a total of 377,500 restricted
shares of Class A Common Stock are outstanding at a weighted average market
value of $21.37 per share. In 2000, the Company granted a restricted stock award
of 50,000 shares with a fair market value of $13.00 per share. During 2000,
there were forfeitures and accelerated grants of 77,500 shares and 12,000
shares, respectively. At September 30, 2000 the aggregate market value of the
restricted stock awards and stock option grants was $8.9 million. Total
compensation expense recognized for the restricted stock awards and option
grants was $1.1 million and $1.7 million for 2000 and 1999, respectively.

Stock repurchases  Beginning in 1997, the Company entered into a series of
forward purchase agreements to effect the repurchase of 1,600,000 shares of its
Class A Common Stock. These agreements are settled quarterly at the Company's
option on a net basis in either shares of its own Class A Common Stock or cash.
To the extent that the market price of the Company's Class A Common Stock on a
settlement date is higher (lower) than the forward purchase price, the net
differential is received (paid) by the Company. During the year ended September
30, 1999, four settlements resulted in the Company receiving 155,962 shares of
Class A Common Stock (recorded in Treasury stock at no cost) and paying
approximately $10.9 million in cash (recorded as a reduction of additional
paid-in capital). During the year ended September 30, 2000, four settlements
resulted in the Company receiving 155,792 shares of Class A Common Stock and
paying approximately $8.2 million in cash. As of September 30, 2000, a forward
purchase agreement in place covered approximately $9.3 million or 672,365 shares
of Class A Common Stock having forward purchase prices established at $13.81 per
share. If the market priced portion of this agreement was settled based on the
September 30, 2000 market price of Class A Common Stock ($11.63 per share), the
Company would settle under the terms of the forward purchase agreement with a
payment of either $1.5 million in cash or 126,316 shares of Class A Common
Stock.

         On August 24, 1998, the Company's Board of Directors approved the
repurchase of an additional 2,500,000 shares of Class A Common Stock in

<PAGE>   24
                         (Notes to Consolidated Financial Statements, continued)



an effort to offset the dilutive effect of the Company's stock-based
employee compensation plans. To date, the Company has repurchased 721,300 shares
of Class A Common Stock at a cost of approximately $17.4 million. There are no
open commitments to repurchase under this approval. No additional repurchases
under this approval are anticipated due to open market repurchase limitations
under the terms of the recapitalization.

Stock based compensation  The Company applies the provisions of APB Opinion No.
25, "Accounting for Stock Issued to Employees" and related interpretations in
accounting for stock-based compensation plans. Accordingly, no compensation cost
has been recognized for the fixed stock option plans. Pursuant to the
requirements of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation," the following are the pro forma net income and
net income per share for the years ended September 30, 2000, 1999, and 1998 had
compensation cost for the Company's stock based compensation plans been
determined based on the fair value at the grant date for grants under those
plans (in thousands, except per share data):


<TABLE>
<CAPTION>
Year Ended September 30,                  2000              1999             1998
---------------------------------------------------------------------------------
<S>                                    <C>               <C>              <C>
Net income (loss):
    As reported                        $25,546           $88,271          $88,347
    Pro forma                          $(3,325)          $67,128          $58,480
Net income (loss) per diluted
    common share:
        As reported                    $  0.29           $  0.84          $  0.84
        Pro forma                      $ (0.04)          $  0.64          $  0.55
=================================================================================
</TABLE>


         The pro forma disclosures shown above reflect options granted after the
year ended September 30, 1995 and are not likely to be representative of the
effects on net income and net income per common share in future years.

         The fair value of the Company's stock plans used to compute pro forma
net income and diluted earnings per share disclosures is the estimated fair
value at grant date using the Black-Scholes option pricing model. The following
weighted-average assumptions were utilized for stock options granted or
modified:


<TABLE>
<CAPTION>
                                     2000           1999           1998
------------------------------------------------------------------------
<S>                            <C>            <C>            <C>
Expected life (in years)          3.1-5.2        3.1-5.0        2.4-6.4
Expected volatility                   .44            .40            .40
Risk-free interest rate        5.76%-6.08%    4.93%-5.82%    4.22%-4.39%
Expected dividend yield              0.00%          0.00%          0.00%
------------------------------------------------------------------------
</TABLE>


         The weighted average fair values of the Company's stock options granted
in the years ended September 30, 2000, 1999 and 1998 are $6.63, $10.19 and
$12.00, respectively.

NOTE 12 : COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK

Basic earnings per share ("EPS") is computed by dividing earnings available to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution of securities that
could share in earnings, including stock options and warrants. When the exercise
of stock options is antidilutive they are excluded from the calculation.

         The following table sets forth the required disclosures of the
reconciliation of the basic and diluted net earnings per share computations.


<TABLE>
<CAPTION>
Year Ended September 30,                      2000           1999           1998
--------------------------------------------------------------------------------
<S>                                        <C>           <C>            <C>
Numerator:
    Net income                             $25,546       $ 88,271       $ 88,347
================================================================================

Denominator:
    Denominator for basic earnings
        per share--weighted
        average number of
        common shares outstanding           86,985        102,226        100,194
Effect of dilutive securities:
    Weighted average number of
        common shares under
        warrant outstanding                     --            155            298
    Weighted average number of
        option shares outstanding            2,544          2,567          5,207
--------------------------------------------------------------------------------
    Dilutive potential common shares         2,544          2,722          5,505
--------------------------------------------------------------------------------
    Denominator for diluted earnings
        per share--adjusted
        weighted average number of
        common shares outstanding           89,529        104,948        105,699
================================================================================

Basic earnings per common share            $  0.29       $   0.86       $   0.88
================================================================================

Diluted earnings per common share          $  0.29       $   0.84       $   0.84
================================================================================
</TABLE>


         For the years ended September 30, 2000 and 1999, options to purchase
14.3 million and 4.3 million shares of Class A Common Stock of the Company with
exercise prices greater than the average fair market value of $13.78 and $21.32
for the respective periods were not included in the computation of diluted net
income per share because the effect would have been antidilutive. Additionally,
convertible notes outstanding for the year ended September 30, 2000 representing
8.8 million common shares, if converted, are not included in the computation of
diluted net income per share because the effect would have been antidilutive.

<PAGE>   25
                         (Notes to Consolidated Financial Statements, continued)



NOTE 13 : INCOME TAXES

Following is a summary of the components of income before provision for income
taxes and extraordinary loss (in thousands):


<TABLE>
<CAPTION>
Year Ended September 30,                    2000           1999           1998
-------------------------------------------------------------------------------
<S>                                      <C>           <C>            <C>
U.S.                                     $27,016       $107,243       $113,589
Non-U.S                                   26,204         32,004         37,532
-------------------------------------------------------------------------------
Income before provision for income        53,220        139,247        151,121
    tax
Loss on debt extinguishment                2,881             --             --
-------------------------------------------------------------------------------
Income before provision for income
    taxes and extraordinary loss         $56,101       $139,247       $151,121
===============================================================================
</TABLE>


         The provision for income tax on the above income consists of the
following components (in thousands):


<TABLE>
<CAPTION>
Year Ended September 30,                         2000           1999           1998
-----------------------------------------------------------------------------------
<S>                                          <C>             <C>           <C>
Current tax expense from operations:
    U.S. federal                             $ 15,571        $18,613       $  2,081
    State and local                            11,373          2,977          2,257
    Foreign                                     7,211          6,533          8,927
-----------------------------------------------------------------------------------
Total current                                  34,155         28,123         13,265
Deferred tax (benefit) expense:
    U.S. federal                               (5,903)         4,286            921
    State and local                            (2,934)         1,052            552
    Foreign                                    (1,637)         1,310           (567)
-----------------------------------------------------------------------------------
Total deferred                                (10,474)         6,648            906
-----------------------------------------------------------------------------------
Total current and deferred                     23,681         34,771         14,171
Benefit of stock transactions with
    employees                                   4,179         15,878         48,603
Benefit of purchased tax benefits
    applied to reduce goodwill                    966            327             --
-----------------------------------------------------------------------------------
        Subtotal                               28,826         50,976         62,774
Current taxes from extraordinary loss:
    U.S. federal tax expense on
        debt extinguishment                      (922)            --             --
    State and local tax
        expense on debt
        extinguishment                           (230)            --             --
-----------------------------------------------------------------------------------
                                             $ 27,674        $50,976       $ 62,774
===================================================================================
</TABLE>


         Current and long-term deferred tax assets and liabilities are comprised
of the following (in thousands):


<TABLE>
<CAPTION>
Year Ended September 30,                     2000            1999
------------------------------------------------------------------
<S>                                      <C>             <C>
Depreciation and amortization            $  3,052        $  1,585
Expense accruals for book purposes         11,277           7,495
Loss and credit carryforwards              13,320           4,622
Intangible assets                           2,150           1,668
Other                                       1,420           1,210
------------------------------------------------------------------
Gross deferred tax asset                   31,219          16,580
------------------------------------------------------------------
Intangible assets                         (12,691)         (8,457)
Equity interest                           (15,651)         (2,478)
Other                                        (165)         (1,577)
------------------------------------------------------------------
Gross deferred tax liability              (28,507)        (12,512)
------------------------------------------------------------------
Valuation allowance                       (10,083)         (3,559)
------------------------------------------------------------------
Net deferred tax (liability) asset       $ (7,371)       $    509
==================================================================
</TABLE>


         Current and long-term net deferred tax assets were $4.7 million and
$16.4 million at September 30, 2000, and were $5.7 million and $0 at September
30, 1999, respectively, and are included in Prepaid expenses and other current
assets and Other assets in the Consolidated Balance Sheets. Current and
long-term net deferred tax liabilities were $13.9 million and $14.6 million at
September 30, 2000 and were $0.9 million and $4.3 million at September 30,
1999, and are included in Accounts payable and accrued liabilities and Other
liabilities in the Consolidated Balance Sheets.

         The valuation allowance relates to state and foreign tax loss
carryforwards that more likely than not will expire unutilized. The net
increase in the valuation allowance of approximately $6.5 million in the current
year results primarily from the increase in federal and state tax carryforwards
of $4.6 million and $2.1 million, respectively, and the net utilization of
foreign tax loss carryforwards of approximately $0.1 million. The tax benefit
from such tax loss carryforwards was $0.6 million, $2.5 million, and $1.2
million for fiscal years 2000, 1999, and 1998, respectively. Approximately $6.7
million and $2.6 million of the valuation allowance would reduce goodwill and
additional paid-in capital, respectively, upon subsequent recognition of any
related tax benefits.

         The differences between the U.S. federal statutory income tax rate and
the Company's effective rate are:


<TABLE>
<CAPTION>
Year Ended September 30,                            2000           1999           1998
---------------------------------------------------------------------------------------
<S>                                                 <C>            <C>            <C>
Statutory tax rate                                  35.0%          35.0%          35.0%
State income taxes, net of
    federal benefit                                 10.9            3.1            4.3
Foreign income taxed at a different                 (4.3)           1.7            0.7
    rate
Non-deductible goodwill and direct
    acquisition costs                               13.1            1.1            3.5
Non-taxable income                                  (0.2)          (1.3)          (1.3)
Exempt foreign trading gross receipts               (1.4)          (2.3)          (1.4)
Non-deductible recapitalization costs                 --            2.2             --
Settlement of tax exams                               --           (1.8)            --
Benefit of operating loss and tax
    credit carryforwards                              --           (2.0)            --
Other items                                         (1.1)           0.9            0.7
---------------------------------------------------------------------------------------
Effective tax rate                                  52.0%          36.6%          41.5%
=======================================================================================
</TABLE>



<PAGE>   26
                         (Notes to Consolidated Financial Statements, continued)


         As of September 30, 2000, the Company had U.S. federal tax loss carry-
forwards of $13.2 million, which will expire in fifteen to twenty years and
state and local tax loss carryforwards of $81.1 million, of which $26.8 million
will expire within one to five years, $9.4 million will expire within six to
fifteen years, and $44.9 million will expire within sixteen to twenty years. In
addition, the Company had foreign tax loss carryforwards of $4.3 million, of
which $1.3 million will expire within one to five years, and $3.0 million which
can be carried forward indefinitely.

         In 1999, the Company incurred $8.6 million of non-deductible recapi-
talization costs during the year, the tax effect of which was approximately
offset by a one-time income tax benefit of $2.5 million related primarily to the
settlement of certain tax examinations in the second quarter. In 1998, the sale
of GartnerLearning resulted in an additional tax provision of $4.2 million
primarily due to the reversal of non-deductible goodwill. The effective tax
rate, less the impact of the above mentioned items, was 37% and 39% for 1999 and
1998, respectively.

NOTE 14 : EMPLOYEE BENEFITS

The Company has a savings and investment plan covering substantially all domes-
tic employees. The Company contributes amounts to this plan based upon the level
of the employee contributions. In addition, the Company also contributes fixed
and discretionary amounts based on employee participation and attainment of
operating margins set by the Board of Directors. Amounts expensed in
connection with the plan totaled $8.5 million, $6.6 million, and $5.4 million
for the years ended September 30, 2000, 1999, and 1998, respectively.

         In addition, the Company has supplemental deferred compensation
arrangements for the benefit of certain officers, managers and other key employ-
ees. These arrangements are funded by life insurance contracts, which have been
purchased by the Company. The plan permits the participants to diversify in
marketable equity securities. The value of the assets held, managed and
invested, pursuant to the agreement total $7.2 million at September 30, 2000 and
are consolidated with those of the Company. The corresponding deferred
compensation liability of $8.2 million at September 30, 2000 is recorded at the
fair market value of the shares held in a rabbi trust and adjusted, with a
corresponding charge or credit to compensation cost, to reflect the fair value
of the amount owned by the employee. Total compensation expense recognized for
the plan was $1.0 million for 2000.

NOTE 15 : RECAPITALIZATION

The Dun and Bradstreet Corporation ("D&B"), an investor in Information Partners
Capital Fund, L.P. ("Fund"), provided a portion of the financing in connection
with the acquisition of the Company in October 1990. In April 1993, D&B acquired
a majority of the outstanding voting securities of the Company in transactions
among the Company, D&B and persons and entities associated with the Fund. On
November 1, 1996, D&B transferred ownership of its common stock of the Company
to Cognizant Corporation ("Cognizant"), a spinoff of D&B and an independent
public company. At the date of transfer, these shares represented 51% of the
Company's outstanding common stock. During the year ended September 30, 1997,
Cognizant's ownership of the Company's outstanding common stock fell below 50%.
On June 30, 1998, Cognizant transferred its ownership in the Company to IMS
Health Incorporated ("IMS Health"), a spinoff of Cognizant and an independent
public company.

         On July 16, 1999, the Company's stockholders approved a series of
transactions that resulted in the separation of the Company and IMS Health. This
was accomplished, in part, through the recapitalization of the Company's out-
standing Common Stock into two classes of Common Stock, consisting of Class A
Common Stock and Class B Common Stock, and the issuance of an aggregate of
40,689,648 shares of Class B Common Stock to IMS Health in exchange for a like
number of shares of Class A Common Stock held by IMS Health. The separation was
effected, in part, through the July 26, 1999 tax-free distribution by IMS Health
to its stockholders of the newly issued Class B Common Stock of the Company
owned by IMS Health. The Class B Common Stock is identical in all respects to
the Class A Common Stock, except that the Class B Common Stock is entitled to
elect at least 80% of the members of the Company's Board of Directors. The
Company's stockholders also approved an amendment to the Company's Certificate
of Incorporation to create a classified Board of Directors of three classes
having staggered three-year terms.

         The Company also declared a special, nonrecurring cash dividend of
$1.1945 per share, payable to all Company stockholders of record as of July 16,
1999. The cash dividend, totaling approximately $125.0 million, was paid on July
22, 1999 and was funded out of existing cash.

         Under the terms of the recapitalization agreement, the Company is
required to indemnify IMS Health for additional taxes, under certain
circumstances, if actions by the Company cause the distribution to become
taxable to IMS Health and its stockholders. These actions include the use of
stock for substantial acquisitions and the issuance, without regulatory
approval, of stock options over set limitations during a two-year period
following the recapitalization. In addition, the Company has indemnified IMS
Health for any tax liabilities associated with the spinoff that may result from
the acquisition of the Company. The Company monitors its actions for
compliance in this regard and believes that it is unlikely, within matters under
the Company's control, that it will incur any significant costs as a result of
its indemnity.

NOTE 16 : SEGMENT INFORMATION

The Company manages its business in four reportable segments organized on the
basis of differences in its related products and services: research, consulting,
events, and TechRepublic. Research consists primarily of subscription-based
research products. Consulting consists primarily of consulting and measurement
engagements. Events consist of various symposia, expositions, and conferences.
TechRepublic consists of an IT professional online destination with revenues
consisting primarily of Web based advertising.

         The Company evaluates reportable segment performance and allocates
resources based on gross contribution margin. Gross contribution, as presented
below, is the profit or loss from operations before interest income and expense,
certain selling, general and administrative costs, income taxes, other charges,
and foreign exchange gains and losses. The accounting policies used by the
reportable segments are the same as those used by the Company.

         The Company earns revenue from clients in many countries. Other than
the United States, the Company's country of domicile, there is no individual
country in which revenues from external clients represent 10% or more of the
Company's consolidated revenues. Additionally, no single client accounted for
10% or more of total revenue and the loss of a single client, in management's
opinion, would not have a material adverse effect on revenues.

         The Company does not identify or allocate assets, including capital
expenditures, by operating segment, with the exception of TechRepublic. Accord-
ingly, assets are not being reported by segment, other than TechRepublic,
because the information is not available by segment and is not reviewed in the
evaluation of performance or making decisions in the allocation of resources. At
September 30, 2000, TechRepublic had identifiable tangible assets of $7.5
million. For the year ended September 30, 2000, TechRepublic had capital
expenditures totaling $1.6 million and depreciation and amortization expense of
$15.3 million.

<PAGE>   27
                       ( Notes to Consolidated Financial Statements, continued )


         The following tables present information about reportable segments (in
thousands). The "Other" column includes certain revenues and corporate and other
expenses (primarily selling, general and administrative) unallocated to
reportable segments, expenses allocated to operations that do not meet the
segment reporting quantitative threshold, and other charges. There are no
intersegment revenues:


<TABLE>
<CAPTION>
Year Ended September 30, 2000                  Research     Consulting      Events    TechRepublic        Other         Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>           <C>         <C>              <C>              <C>       
Revenues                                       $ 509,781    $ 208,810     $ 108,589    $    4,077      $    27,414      $  858,671
Gross contribution                               341,061       75,652        50,604       (20,328)          11,231         458,220
Corporate and other expenses                                                                              (410,010)       (410,010)
Net gain (loss) on sale of investments                                                                                      29,630
Interest income and other                                                                                                    3,161
Interest expense                                                                                                           (24,900)
Income before provision for income taxes                                
  and extraordinary loss                                                                                                    56,101
====================================================================================================================================
</TABLE>




<TABLE>
<CAPTION>
Year Ended September 30, 1999                  Research     Consulting      Events    TechRepublic        Other         Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>           <C>         <C>           <C>                 <C>       
Revenues                                       $ 479,045    $ 149,840     $   75,581         --     $    29,768         $  734,234 
Gross contribution                               336,919       55,857         32,532         --          12,152            437,460 
Corporate and other expenses                                                                           (305,613)          (305,613)
Interest income and other                                                                                                    8,672 
Interest expense                                                                                                            (1,272)
Income before provision for income taxes                                                                                           
  and extraordinary loss                                                                                                   139,247 
====================================================================================================================================
</TABLE>




<TABLE>
<CAPTION>
Year Ended September 30, 1998                  Research     Consulting      Events    TechRepublic        Other         Consolidated
------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>           <C>         <C>           <C>                 <C>       
Revenues                                       $ 433,141    $ 110,955     $   49,121         --     $    48,740(1)      $  641,957
Gross contribution                               312,855       50,787         19,546         --           9,597(1)         392,785
Corporate and other expenses                                                                           (248,736)          (248,736)
Net gain (loss) on sale of investments                                                                                      (1,973)
Interest income and other                                                                                                    9,139
Interest expense                                                                                                               (94)
Income before provision for income taxes                                
  and extraordinary loss                                                                                                   151,121
====================================================================================================================================
</TABLE>


(1)  Represents the sum of Other and Learning revenues and gross contributions,
     respectively, for the fiscal year ended September 30,1998

<PAGE>   28
                       ( Notes to Consolidated Financial Statements, continued )


         The Company's consolidated revenues are generated primarily through
direct sales to clients by domestic and international sales forces and a network
of independent international distributors. The Company defines "Europe Revenues"
as revenues attributable to clients located in England and the European region
and "Other International Revenues" as revenues attributable to all areas located
outside of the United States, Canada and Europe. Most products and services of
the Company are provided on an integrated worldwide basis. Because of the inte-
gration of products and services delivery, it is not practical to separate
precisely the revenues and operating income of the Company by geographic
location. Accordingly, the separation set forth in the table below is based upon
internal allocations, which involve certain management estimates and judgments.

         European identifiable tangible assets consist primarily of the assets
of the European subsidiaries and include the accounts receivable balances
carried directly by the subsidiaries located in England, France and Germany. All
other European customer receivables are maintained by, and therefore are
included as identifiable assets of, the United States operations.

         Summarized information by geographic location is as follows
(in thousands):


<TABLE>
<CAPTION>
Year Ended September 30,                            2000           1999           1998
-----------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>     
United States and Canada:
     Revenues                                     $567,629       $471,783       $415,622
     Operating income                             $ 26,570       $ 70,991       $ 82,406
     Identifiable tangible assets                 $483,502       $437,452       $551,030
     Long-lived assets                            $422,796       $318,509       $285,125
Europe:
     Revenues                                     $230,307       $212,131       $173,762
     Operating income                             $ 18,085       $ 48,433       $ 44,455
     Identifiable tangible assets                 $171,420       $110,472       $ 93,409
     Long-lived assets                            $ 56,918       $ 41,233       $ 25,533
Other International:
     Revenues                                     $ 60,735       $ 50,320       $ 52,573
     Operating income                             $  3,555       $ 12,423       $ 17,188
     Identifiable tangible assets                 $ 32,846       $ 32,420       $ 31,888
     Long-lived assets                            $ 10,383       $ 11,518       $ 11,134
-----------------------------------------------------------------------------------------
</TABLE>


          Excluding other charges, operating income was $39.3 million, $22.0
million and $4.4 million in the United States and Canada, Europe, and Other
International, respectively, for the year ended September 30, 2000 and was $96.0
million, $52.9 million and $13.1 million, respectively, for the year ended
September 30, 1999. Excluding acquisition-related and other charges, operating
income in the United States and Canada was $89.7 million for the year ended
September 30, 1998.

NOTE 17 : QUARTERLY FINANCIAL DATA (UNAUDITED)

(In thousands except per share data)


<TABLE>
<CAPTION>
Year Ended September 30, 2000         1st            2nd            3rd            4th
-----------------------------------------------------------------------------------------
<S>                                 <C>            <C>            <C>            <C>     
Revenues                            $222,897       $193,393       $222,511       $219,870
Operating income(1)(2)              $ 32,142       $ 10,626       $  5,238       $    204
Net income                          $ 16,462       $  2,788       $  2,382       $  3,914
Diluted earnings per
     common share(3)                $   0.18       $   0.03       $   0.03       $   0.04
-----------------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>
Year Ended September 30, 1999         1st            2nd            3rd            4th
-----------------------------------------------------------------------------------------
<S>                                 <C>            <C>            <C>            <C>     
Revenues                            $190,380       $171,328       $185,658       $186,868
Operating income(1)(4)              $ 45,970       $ 39,913       $ 37,996       $  7,968
Net income                          $ 30,088       $ 28,841       $ 26,416       $  2,926
Diluted earnings per
     common share                   $   0.29       $   0.27       $   0.25       $   0.03
-----------------------------------------------------------------------------------------
</TABLE>


(1)  Amounts for the first three quarters of 2000 and all quarters of 1999
     reflect the reclassification of equity gains (losses) from minority-owned
     investments to Interest income and other from Costs and expenses in the
     Consolidated Statements of Operations.

(2)  Includes Other charges of $6.1 million and $11.4 million in the quarters
     ended December 31, 1999 and March 31, 2000, respectively.

(3)  The aggregate of the four quarters' diluted earnings per common share does
     not total the reported full fiscal year amount due to rounding.

(4)  Includes Other charges of $4.4 million, $1.5 million, and $24.2 million in
     the quarters ended March 31, 1999, June 30, 1999 and September 30, 1999,
     respectively.

<PAGE>   29
MANAGEMENT'S RESPONSIBILITY
FOR FINANCIAL REPORTING

Management has prepared and is responsible for the integrity and objectivity of
the consolidated financial statements and related information included in the
Annual Report. The consolidated financial statements, which include amounts
based on management's best judgments and estimates, were prepared in conformity
with generally accepted accounting principles. Financial information elsewhere
in this Annual Report is consistent with that in the consolidated financial
statements.

         The Company maintains a system of internal controls designed to pro-
vide reasonable assurance at reasonable cost that assets are safeguarded and
transactions are properly executed and recorded for the preparation of financial
information. The internal control system is augmented with an organizational
structure providing division of responsibilities, careful selection and
training of qualified financial people and a program of internal audits.

         The Audit Committee of the Board of Directors, composed solely of
outside directors, meets regularly with management, internal auditors and our
independent accountants to ensure that each is meeting its responsibilities and
to discuss matters concerning internal controls and financial reporting. Both
the independent and internal auditors have unrestricted access to the Audit
Committee.

         The independent auditors for fiscal 2000, 1999 and 1998, KPMG LLP,
audit and render an opinion on the financial statements in accordance with gen-
erally accepted accounting standards. These standards include an assessment of
the systems of internal controls and tests of transactions to the extent
considered necessary by them to support their opinion.




/s/ Manuel A. Fernandez
----------------------------------------
Manuel A. Fernandez
Chairman of the Board



/s/ Michael D. Fleisher
----------------------------------------
Michael D. Fleisher
Chief Executive Officer



THE BOARD OF DIRECTORS AND STOCKHOLDERS
GARTNER GROUP, INC.:

We have audited the accompanying consolidated balance sheets of Gartner Group,
Inc. and subsidiaries as of September 30, 2000 and 1999, and the related consol-
idated statements of operations, changes in stockholders' equity and cash flows
for each of the years in the three-year period ended September 30, 2000. These
consolidated financial statements are the responsibility of the Company's man-
agement. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

         We conducted our audits in accordance with auditing standards gener-
ally accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Gartner
Group, Inc. and subsidiaries as of September 30, 2000 and 1999, and the results
of their operations and their cash flows for each of the years in the
three-year period ended September 30, 2000, in conformity with accounting
principles generally accepted in the United States of America.




/s/ KPMG LLP
--------------------------------
St. Petersburg, Florida
October 30, 2000

<PAGE>   30
                                          (Selected Consolidated Financial Data)



<TABLE>
<CAPTION>
Fiscal Year Ended September 30,
(in thousands except per share data)                2000             1999             1998             1997            1996
-----------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>              <C>              <C>              <C>             <C>      
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
     Research                                    $ 509,781        $ 479,045        $ 433,141        $ 349,600       $ 279,629
     Consulting                                    208,810          149,840          110,955           84,631          61,348
     Events                                        108,589           75,581           49,121           34,256          26,449
     Other                                          31,491           29,768           30,664           21,438          15,027
     Learning                                           --               --           18,076           21,314          12,219
-----------------------------------------------------------------------------------------------------------------------------
         Total revenues                            858,671          734,234          641,957          511,239         394,672
Total costs and expenses(1)                        810,461          602,387          497,908          394,424         345,232
-----------------------------------------------------------------------------------------------------------------------------
Operating income(1)                                 48,210          131,847          144,049          116,815          49,440
Minority interest                                       --               --               --               --              25
Net gain (loss) on sale of investments              29,630               --           (1,973)              --              --
Interest income and other(1)                         3,161            8,672            9,139            7,058           3,665
Interest expense                                   (24,900)          (1,272)             (94)              --              --
-----------------------------------------------------------------------------------------------------------------------------
Income before provision for income taxes
  and extraordinary loss                            56,101          139,247          151,121          123,873          53,130
Provision for income taxes                          28,826           50,976           62,774           50,743          36,692
-----------------------------------------------------------------------------------------------------------------------------
Income before extraordinary loss                    27,275           88,271           88,347           73,130          16,438
Loss on debt extinguishment, net of tax
  of $1,152                                          1,729               --               --               --              --
-----------------------------------------------------------------------------------------------------------------------------
Net income                                       $  25,546        $  88,271        $  88,347        $  73,130       $  16,438
=============================================================================================================================
NET INCOME PER COMMON SHARE:
Basic:
     Income before extraordinary loss            $    0.31        $    0.86        $    0.88        $    0.77       $   0.18
     Extraordinary loss                          $   (0.02)              --               --               --             --
     Net income                                  $    0.29        $    0.86        $    0.88        $    0.77       $   0.18
Diluted:
     Income before extraordinary loss            $    0.30        $    0.84        $    0.84        $    0.71       $   0.17
     Extraordinary loss                          $   (0.02)              --               --               --             --
     Net income                                  $    0.29        $    0.84        $    0.84        $    0.71       $   0.17
=============================================================================================================================
</TABLE>


(continued)

<PAGE>   31
                               (Selected Consolidated Financial Data, continued)



<TABLE>
<CAPTION>
Fiscal Year Ended September 30,
(in thousands except per share data)                   2000             1999             1998             1997             1996
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>              <C>              <C>              <C>       
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents, marketable securities    $   97,102       $   88,894       $  218,684       $  171,054       $  126,809
Fees receivable, net                                   326,359          282,047          239,243          205,760          143,762
Other current assets                                    89,407           61,243           53,152           48,794           39,579
----------------------------------------------------------------------------------------------------------------------------------
         Total current assets                          512,868          432,184          511,079          425,608          310,150
Intangibles and other assets                           490,097          371,260          321,792          219,704          133,958
----------------------------------------------------------------------------------------------------------------------------------
         Total assets                               $1,002,965       $  803,444       $  832,871       $  645,312       $  444,108
==================================================================================================================================
Deferred revenues                                   $  385,932       $  354,517       $  288,013       $  254,071       $  198,952
Other current liabilities                              201,407          117,363          126,822          118,112           92,456
----------------------------------------------------------------------------------------------------------------------------------
         Total current liabilities                     587,339          471,880          414,835          372,183          291,408
Long-term debt                                         307,254          250,000               --               --               --
Other liabilities                                       33,552            7,078            3,098            3,259            2,465
Stockholders' equity                                    74,820           74,486          414,938          269,870          150,235
----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity          $1,002,965       $  803,444       $  832,871       $  645,312       $  444,108
==================================================================================================================================
</TABLE>


(1)  Amounts for 2000 through 1997 reflect the reclassification of equity losses
     from minority-owned investments to Interest income and other from Costs and
     expenses in the Consolidated Statements of Operations.





<PAGE>   1



EX-21.1
               SUBSIDIARIES OF REGISTRANT

 
                                                                    EXHIBIT 21.1



<TABLE>
<CAPTION>
SUBSIDIARIES OF REGISTRANT                                    STATE/COUNTRY OF
                                                               INCORPORATION

<S>                                                           <C>
Computer & Communications Information                            New Jersey
  Group, Inc. (dba Datapro Information
  Services)
Computer Consultancy Group, Limited                              United Kingdom
Computer Financial Consultants, Inc.                             Delaware
Computer Financial Consultants, Limited                          United Kingdom
cPulse, LLC                                                      Delaware
Dataquest Australia Pty. Ltd.                                    Australia
Dataquest, Incorporated                                          California
Dataquest (Korea), Inc.                                          Delaware
Decision Drivers, Inc.                                           Delaware
Gartner Group Canada Co.                                         Nova Scotia
G.G. Canada, Inc.                                                Delaware
G.G. Credit, Inc.                                                Delaware
G.G. Global Holdings, Inc.                                       Delaware
G.G. Properties, Ltd.                                            Bermuda
G.G. West Corporation                                            Delaware
Gartner (Cambridge) Holdings, Inc.                               Delaware
Gartner Enterprises, Ltd.                                        Delaware
Gartner Fund I, Inc.                                             Delaware
Gartner Fund II, Inc.                                            Delaware
Gartner Group Advisory (Singapore) PTE ltd                       Singapore
Gartner Group Argentina, S.A                                     Argentina
Gartner Group Austria GmbH                                       Austria
Gartner Group Belgium BVBA                                       Belgium
Gartner Group Chile, S.A                                         Chile
Gartner Group do Brasil, S/C Ltda                                Brazil
Gartner Group Europe Holdings, B.V                               The Netherlands
Gartner Group Financial Services Company                         Ireland
Gartner Group France S.A.R.L
                                     France
Gartner Group FSC, Inc.                                          Barbados
Gartner Group, GmbH                                              Germany
Gartner Group Hong Kong, Ltd.                                    Hong Kong
Gartner Group Holdings Ireland, Limited                          Ireland
Gartner Group Ireland, Limited                                   Ireland
Gartner Group Italia, S.r.L                                      Italy
Gartner Group Japan K.K                                          Japan
Gartner Group Learning, Inc.                                     Minnesota
Gartner Group Nederland B.V                                      The Netherlands
Gartner Group Norge A/S                                          Norway
Gartner Group Pacific Pty Ltd.                                   Australia
Gartner Group (Thailand) Ltd.                                    Thailand
Gartner Group Scandinavia ApS                                    Denmark
Gartner Group Sverige AB                                         Sweden
Gartner Group Switzerland AG                                     Switzerland
Gartner Group Taiwan Ltd.                                        Taiwan
Gartner Group UK Ltd.                                            United Kingdom
</TABLE>




<PAGE>   2


<TABLE>
<CAPTION>
SUBSIDIARIES OF REGISTRANT                                    STATE/COUNTRY OF
                                                               INCORPORATION
<S>                                                           <C>
Griggs-Anderson, Inc.                                            Delaware
IT-radar.com, Inc.                                               Minnesota
National Institute for Management Technology                     Ireland
People3, Inc.                                                    Delaware
SI Venture Associates, L.L.C                                     Delaware
SI Venture Fund II, LP                                           Delaware
TechRepublic Holdings, Inc.                                      Delaware
TechRepublic Inc.                                                Delaware
The IT Management Programme                                      United Kingdom
The Research Board, Inc.                                         Delaware
The Warner Group                                                 California
Vision Events International, Inc.                                Delaware
Wentworth Research Limited                                       United Kingdom
</TABLE>


































<PAGE>   1

INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENT SCHEDULE



The Board of Directors and Stockholders
Gartner Group, Inc.:


Under date of October 30, 2000, we reported on the consolidated balance sheets
of Gartner Group, Inc. and subsidiaries as of September 30, 2000 and 1999, and
the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for the three-year period ended September 30, 2000, which
are incorporated by reference in the Form 10K. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedule in Form 10K. This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement schedule based on our
audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.

                                                                    /s/ KPMG LLP

St. Petersburg, Florida
October 30, 2000





<PAGE>   1
                          INDEPENDENT AUDITORS' CONSENT


The Board of Directors and Stockholders
Gartner Group, Inc.:

We consent to incorporation by reference in the registration statements (No.
33-67576, No. 33-85926, No. 33-92486, No. 333-35169, No. 333-42587, No.
333-77015, No. 333-77013 and No. 333-30546) on Form S-8 of Gartner Group, Inc.
of our reports dated October 30, 2000 relating to the consolidated balance
sheets of Gartner Group, Inc. and subsidiaries as of September 30, 2000 and
1999, and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for each of the years in the three year
period ended September 30, 2000, and financial statement schedule, which report
appears in the September 30, 2000 Annual Report on Form 10-K of Gartner Group,
Inc.


                                                                    /s/ KPMG LLP
St. Petersburg, Florida
December 28, 2000


























































<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GARTNER GROUP, INC. FOR THE PERIOD ENDED SEPTEMBER 30,
2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          SEP-30-2000
<PERIOD-START>                             OCT-01-1999
<PERIOD-END>                               SEP-30-2000
<CASH>                                          61,698
<SECURITIES>                                    35,404
<RECEIVABLES>                                  326,359
<ALLOWANCES>                                     5,004
<INVENTORY>                                          0
<CURRENT-ASSETS>                               512,868
<PP&E>                                         188,921
<DEPRECIATION>                                  97,662
<TOTAL-ASSETS>                               1,002,965
<CURRENT-LIABILITIES>                          587,339
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                            59
<OTHER-SE>                                      74,761
<TOTAL-LIABILITY-AND-EQUITY>                 1,002,965
<SALES>                                        858,671
<TOTAL-REVENUES>                               858,671
<CGS>                                          398,773
<TOTAL-COSTS>                                  398,773
<OTHER-EXPENSES>                               411,688
<LOSS-PROVISION>                                 4,256
<INTEREST-EXPENSE>                              24,900
<INCOME-PRETAX>                                 56,101
<INCOME-TAX>                                    28,826
<INCOME-CONTINUING>                             27,275
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                  1,729
<CHANGES>                                            0
<NET-INCOME>                                    25,546
<EPS-BASIC>                                       0.29<F1>
<EPS-DILUTED>                                     0.29
<FN>
<F1>Amount reported is EPS-BASIC
</FN>
        

</TABLE>