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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
January 3, 2000
Date of Report
(Date of earliest event reported)
GARTNER GROUP, INC.
Delaware 1-14443 04-3099750
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
P.O. Box 10212
56 Top Gallant Road
Stamford, CT 06904-2212
(Address of principal executive offices)
(203) 964-0096
(Registrant's telephone number, including area code)
Item 5. Other Events.
The purpose of this Form 8-K is to announce the receipt by IMS Health
Incorporated ("IMS HEALTH") of a ruling from the Internal Revenue Service
("IRS") that impacts the rights, preferences and privileges of the outstanding
shares of Common Stock of Gartner Group, Inc. (the "COMPANY"). As indicated in
prior public filings, the Certificate of Incorporation of the Company, as
adopted by the stockholders of the Company at a Special Meeting of Stockholders
held July 16, 1999, contains a provision intended to limit the ability of a
third party to obtain effective control of the Company by obtaining control only
of the outstanding shares of Class B Common Stock (the "SPECIAL 15% PROVISION").
The Special 15% Provision by its terms was to become effective upon the receipt
by IMS Health of a private letter ruling from the IRS to the effect that the
terms of the Special 15% Provision will not have an adverse tax effect with
respect to the distribution of the Company's Class B Common Stock effected by
IMS Health in July 1999 and will not have an adverse effect on certain private
letter rulings previously issued to IMS Health and its predecessors.
IMS Health received the requested private letter ruling from the IRS on
December 3, 1999. Accordingly, the Special 15% Provision automatically became
effective on such date. The Special 15% Provision is described more fully below
in the description of the Company's capital stock:
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DESCRIPTION OF CAPITAL STOCK
The Company has authorized (i) an aggregate of 250,000,000 shares of common
stock, consisting of 166,000,000 shares of Common Stock, Class A ("CLASS A
COMMON STOCK") and 84,000,000 shares of Common Stock, Class B ("CLASS B COMMON
STOCK"), and (ii) an aggregate of 5,000,000 shares of preferred stock. The par
value of each share of common stock is $0.0005 and the par value of each share
of preferred stock is $0.01. The relative rights, powers, preferences,
qualifications, limitations and restrictions of the Company's capital stock are
as follows:
Common Stock
The Class A Common Stock and Class B Common Stock are identical in all
respects except as otherwise expressly described below.
(a) Cash or Property Dividends. Subject to the rights and preferences of
the Preferred Stock as set forth in any resolution or resolutions that may be
adopted by the Board of Directors providing for the issuance of Preferred Stock,
the holders of common stock are entitled to receive dividends out of assets
legally available therefor, at such time and in such amounts as the Board of
Directors may determine from time to time. Whenever cash dividends are paid on
the common stock, the same amount shall be paid for each share of Class A Common
Stock and share of Class B Common Stock outstanding.
(b) Stock Dividends. If any dividend on the outstanding shares of common
stock is paid in common stock, then the same ratio of shares shall be paid with
respect to each outstanding share of Class A Common Stock and Class B Common
Stock. In such event the dividend paid to holders of Class A Common Stock shall
be paid only in Class A Common Stock and the dividend paid to holders of Class B
Common Stock shall be paid only in Class B Common Stock.
(c) Stocks Splits, Subdivisions and Combinations. The Company will not
subdivide, reclassify or combine stock of either class of common stock without
at the same time making a proportionate subdivision, reclassification or
combination of the other class.
(d) Voting. The holders of Class A Common Stock and Class B Common Stock
vote together as a single class in all matters requiring the vote of holders of
common stock of the Company, except only that (i) the holders of each such class
are entitled to vote as a separate class when required by law to do so under
mandatory statutory provisions that may not be excluded or overridden by a
provision of the certificate of incorporation of the Company and (ii) the
holders of common stock vote in respect of directors as specified below.
With respect to the election of directors, the holders of Class A Common
Stock vote with the holders of all shares of Preferred Stock having a right to
vote in the election of directors. The holders of Class A Common Stock and
voting Preferred Stock are entitled to elect a number of directors that
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equals 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
as is closest to 20% of such membership) (the "CLASS A DIRECTORS"). In the
election of Class A Directors, each share of Class A Common Stock has one vote
and each share of voting Preferred Stock shall have the number of votes
specified in the resolution of the Board authorizing such voting Preferred
Stock. The remaining members of the Board of Directors are elected by holders of
Class B Common Stock (the "CLASS B DIRECTORS"). In the election of Class B
Directors, each share of Class B Common Stock has one vote. Any Class A Director
may be removed only for cause by the vote of a majority of the votes represented
by the outstanding shares of Class A Common Stock and voting Preferred Stock,
voting together as a single class. Any Class B Director may be removed only for
cause by the vote of a majority of the outstanding shares of Class B Common
Stock. Any vacancy in a Class A Director may be filled by the vote of a majority
of the remaining Class A Directors, and any vacancy in Class B Directors may be
filled by the vote of a majority of the remaining Class B Directors. All newly
created directorships resulting from an increase in the number of directors
shall be allocated between Class A Directors and Class B Directors, such that at
all times the number of Class A Directors shall be 20% of the authorized number
of directors (or, if such 20% is not a whole number, then the nearest lower
whole number of directors as is closest to 20% of such membership) and the
remaining directors shall be Class B Directors. No decrease in the authorized
number of directors shall shorten the term of any incumbent director.
(e) Merger or Consolidation. Upon any merger or consolidation of the
Company, the holders of Class A Common Stock and Class B Common Stock shall be
entitled to receive, per share, the identical kind and amount of consideration
receivable upon such consolidation or merger, except only that the holders of
Class A Common Stock and 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 identical to the voting rights with respect to election of directors
provided for the Class A Common Stock and Class B Common Stock.
(f) Liquidation. The holders of Class A Common Stock and Class B Common
Stock will participate equally in any liquidation, dissolution or winding up of
the Company.
(g) Special 15% Provision. The Certificate of Incorporation of the Company
includes a special voting provision intended to limit the ability of a third
party to obtain effective control of the Company by obtaining control only of
the outstanding shares of Class B Common Stock. This special provision states
that so long as any person or entity, or group of persons or entities acting in
concert, beneficially owns 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 that are
outstanding which is less than or equal to such person, entity or group's Voting
Percentage. For these purposes, "VOTING PERCENTAGE" means the percentage of the
then outstanding shares of Class A Common Stock beneficially owned at such time
by such person, entity or group.
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Preferred Stock
The Board of Directors has the authority, without further stockholder
approval, to issue the Preferred Stock from time to time in one or more series;
to establish the number of shares to be included in any such series; to fix or
alter the voting powers and the designation, preferences and relative
participating, optional, or other special rights and qualifications, limitations
and restrictions of any such series of Preferred Stock; and to increase or
decrease the number of shares of any series of Preferred Stock subsequent to the
issue of shares of such series (but not below the number of shares of any series
then outstanding).
Classified Board
The directors are divided into three classes, Class I, Class II and Class
III. The Class I Directors hold office for an initial term expiring at the
annual meeting of stockholders to be held in January 2000, the Class II
Directors shall hold office for an initial term expiring at the next annual
meeting thereafter, and the Class III Directors shall hold office for an initial
term expiring at the second annual meeting of stockholders held after the
January 2000 meeting. The directors of each class elected at each subsequent
annual meeting of stockholders shall hold office for three year terms. Directors
elected by any class or series of stock, including Class A Directors and Class B
Directors, shall be divided as evenly as possible among Class I, Class II and
Class III.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GARTNER GROUP, INC.
Dated: January 3, 2000 By: /s/ Michael D. Fleisher
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Michael D. Fleisher,
President and Chief Executive Officer
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