- Current report filing (8-K)
February 27 2009 - 6:04AM
Edgar (US Regulatory)
UNITED STATES
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
Date
of Report (Date of Earliest Event Reported):
February 24,
2009
CardioNet, Inc.
(Exact name of registrant as specified in its
charter)
Delaware
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001-33993
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33-0604557
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(State or other
jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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227
Washington Street #300
Conshohocken, PA
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19428
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(Address of principal
executive offices)
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(Zip Code)
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Registrants
telephone number, including area code:
(610)
729-7000
Not
Applicable
Former name or former address, if changed since last report
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02
Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On
January 28, 2009, we entered into a letter agreement with Randy Thurman
pursuant to which Mr. Thurman agreed to serve as our Interim President and
Chief Executive Officer (Interim CEO).
On
February 25, 2009, we announced that we entered into an employment
agreement (the Employment Agreement) with Mr. Thurman which provides
that he will serve as our President and Chief Executive Officer, and remain as
the Chairman of our Board of Directors.
A copy of the press release is attached as Exhibit 99.1.
The
Employment Agreement commenced on February 24, 2009 and continues until
terminated in accordance with its terms. Except with respect to the
continued vesting of equity grants previously made to Mr. Thurman while
serving as Executive Chairman of our Board of Directors or the Interim CEO, the
Employment Agreement supersedes and replaces (i) the letter agreement we
previously entered into with Mr. Thurman dated January 28, 2009
regarding the terms and conditions of Mr. Thurmans service as the Interim
CEO, and (ii) the letter agreement we previously entered into with Mr. Thurman
dated July 7, 2008 regarding the terms and conditions of Mr. Thurmans
service as Executive Chairman of our Board of Directors.
Pursuant
to the terms of the Employment Agreement, Mr. Thurman is entitled to a
base salary of $500,000. Mr. Thurman
will also receive a bonus payment for the 2008 fiscal year equal to $450,000,
in consideration of the 2008 incentive and equity compensation Mr. Thurman
will forfeit from his prior employer (subject to pro rata repayment if Mr. Thurman
voluntarily resigns or is terminated for cause prior to February 24, 2010). Beginning with the 2009 fiscal year, Mr. Thurman
will be eligible to participate in our Management Incentive Plan and Long Term
Incentive Plan in accordance with the terms of those plans. Mr. Thurmans target annual bonus
opportunity under the Management Incentive Plan will be 100% of base salary and
Mr. Thurmans target dollar value for purposes of the Long Term Incentive
Plan will be 200% of base salary.
Contemporaneously with his entry into the Employment Agreement, Mr. Thurman
received a restricted stock unit award with respect to 50,000 shares of our
common stock and a stock option to purchase 500,000 shares of our common
stock. In each case, the equity awards
are subject to the restrictions and conditions set forth in our 2008 Equity
Incentive Plan and will vest in equal annual installments of 25% a year over 4
years beginning with the first anniversary of the date of grant; provided that Mr. Thurman
remains in continuous service as of each applicable vesting date. The vested restricted stock units will be
distributed in the form of common stock on the earliest to occur of Mr. Thurmans
death, Disability (as defined in the 2008 Equity Incentive Plan) or separation
from service (as defined in the Internal Revenue Code of 1986, as amended (the
Code)), or a 409A Change in Control, which means a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of the Companys assets, as provided in the Code. If a corporate transaction
occurs (as defined in the Employment Agreement) while Mr. Thurman is
employed by the Company, all of his outstanding equity awards will become fully
vested and exercisable (to the extent applicable). Although Mr. Thurman will no longer be a
non-employee member of our Board of Directors, during the term of the
Employment Agreement he agreed to continue to comply with the sale restrictions
and holding requirements applicable to our non-employee directors.
The
Employment Agreement provides that in the event we terminate Mr. Thurman
without cause or Mr. Thurman resigns for good reason (each as defined
in the Employment Agreement), we will pay to Mr. Thurman severance
benefits that consist of the following: (i) base salary and accrued and
unused vacation earned through the date of his termination; (ii) an amount
equal to two times (2.0x) his base salary at the rate in effect at the time of
termination plus two times (2.0x) his on-target annual performance incentive
bonus in effect for the year of termination, such amount to be paid in 24
monthly installments. Mr. Thurman will also be eligible for continued
participation in our medical, dental and vision plans for a period of up to 24
months. Mr. Thurmans receipt of
the amount described in clause (ii) above and the continued participation
in our medical, dental and vision plans are contingent upon his execution and
non-revocation of a release of claims in the form attached to the Employment
Agreement.
2
If
an excise tax under sections 280G and 4999 of Internal Revenue Code is
triggered by any payment upon a change in control, Mr. Thurman will
receive a modified amount which will be either the largest portion of the payments that would result in no portion of
the payments being subject to the excise tax or the entire amount of the
payments plus an additional partial gross-up payment such that after taking
into account all applicable federal, state and local employment taxes, income
taxes, and the excise tax (all computed at the highest applicable marginal
rate), Mr. Thurman will
receive, on an after tax basis, an amount equal to one-half of the excise tax that would be imposed
on the payment if the full payment was made.
As
a condition of Mr. Thurmans employment as President and Chief Executive
Officer, he must execute and abide by the Companys Proprietary Information and
Inventions Agreement. Under the
Employment Agreement Mr. Thurman will be subject to non-competition
restrictions for the term of his employment and during any period thereafter in
which he is receiving severance benefits.
Mr. Thurmans
employment with us is at will and may be terminated by us at any time and for
any reason, or for no reason. Upon any termination by us, Mr. Thurman
agrees to resign all positions, including as an officer and, if applicable, as
a director or member of the board or any committee thereof.
The
foregoing description of the Employment Agreement between us and Mr. Thurman
is qualified in its entirety by reference to the copy of the Employment Agreement
which is attached as Exhibit 99.2 and which is incorporated by reference
herein.
Mr. Thurman,
59, has served as our Executive Chairman and a member of our Board of Directors
since July 2008. From January 28,
2009 to February 23, 2009, Mr. Thurman served as our Interim President
and Chief Executive Officer. Since May 2008
Mr. Thurman has served as an advisor to New Mountain Capital, LLC, a
private and public equity investment firm.
From July 2007 through June 2008 Mr. Thurman served as a
consultant to Cardinal Health, Inc., a global healthcare provider. From April 2001
until its acquisition by Cardinal Health, Inc. in July 2007, Mr. Thurman
served as Chief Executive Officer of VIASYS Healthcare Inc., a healthcare
technology company. Mr. Thurman also served as Chairman of the Board of
Directors and President of VIASYS Healthcare Inc. from November 2001
and July 2004, respectively, until the time of its acquisition by Cardinal
Health, Inc. From 1996 to April 2001, Mr. Thurman served as
Chairman and Chief Executive Officer of Strategic Reserves LLC, a
privately held company providing funding and strategic direction to healthcare
technology companies. From 1993 to 1996, Mr. Thurman was Chairman and CEO
of Corning Life Sciences, Inc., which was a global leader in clinical
laboratory testing, pharmaceutical research and esoteric reference testing.
Concurrent with the aforementioned positions, Mr. Thurman served as
Chairman of the Board of Directors of Enzon Pharmaceuticals, Inc. from
1994 to 2001. From 1984 to 1993, Mr. Thurman held various positions at
Rhone-Poulenc Rorer Pharmaceuticals, Inc., a global pharmaceutical
company.
Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit Number
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Exhibit Title
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99.1
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Press
Release by the Company, dated February 25, 2009
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99.2
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Employment
Agreement, dated February 24, 2009, between Randy Thurman and the
Company
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3
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.
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CardioNet, Inc.
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February 27,
2009
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By:
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/s/
Martin P. Galvan
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Name:
Martin P. Galvan
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Title:
Chief Financial Officer
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4
Exhibit Index
Exhibit Number
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Exhibit Title
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99.1
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Press
Release by the Company, dated February 25, 2009
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99.2
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Employment
Agreement, dated February 24, 2009, between Randy Thurman and the
Company
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