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
September 19, 2007
Date of Report (Date of earliest event
reported)
DJO INCORPORATED
(Exact
name of Registrant as specified in its charter)
Delaware
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001-16757
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33-0978270
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(State or other
jurisdiction of
incorporation)
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(Commission File
Number)
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(I.R.S. Employer
Identification
Number)
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1430 Decision Street
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Vista,
California
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92081
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(Address of
principal executive offices)
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(Zip Code)
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(800) 336-5690
Registrants
telephone number, including area code
N/A
(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 (see General Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
x
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
September 19, 2007, DJO Incorporated (the Company) entered into Change in
Control Severance Agreements (Change in Control Agreements) with Leslie H.
Cross, Chief Executive Officer and President, Vickie L. Capps, Executive Vice
President, Chief Financial Officer and Treasurer, Luke T. Faulstick, Chief
Operating Officer, Lou T. Ruggiero, Chief Sales and Marketing Officer, and
Donald M. Roberts, Senior Vice President and General Counsel (the Named
Executive Officers). The Change in
Control Agreements are intended to provide for continuity of management in the
context of a prospective change in control of the Company. Following a change in control, as will occur
in connection with the proposed merger with a subsidiary of ReAble Therapeutics
Finance, LLC (the Merger) and related transactions, the Change in Control
Agreements will remain in effect for a period of two years.
Pursuant
to the Change in Control Agreements, if a Named Executive Officers employment
is terminated by the Company without cause (as such term is defined in the
Change in Control Agreements) or if such executive officer terminates
employment for good reason (as such term is defined in the Change in Control
Agreements), in each case within three months prior to or two years after the
Merger, the executive is entitled, in addition to accrued salary and bonus, to
the following benefits:
·
A
lump sum payment equal to the sum of the executives highest annual rate of
base salary during the 12 month period preceding the termination date
multiplied by 1.5 (or 2 in the case of our chief executive officer), plus:
·
the executives aggregate annual target bonus
for the year of termination; and
·
a pro rata portion of the executives
aggregate annual target bonus for the portion of the year of termination during
which the executive served as an employee, less any amounts paid from our annual
incentive plan for the year of termination.
·
A
lump sum cash payment of an amount equal to (i) 18 (or 24 in the case of our
chief executive officer), multiplied by (ii) the amount by which the monthly
premium the executive would be required to pay for continued coverage pursuant
to COBRA, for such executive and his or her eligible dependents covered under
our health plans as of the termination date, exceeds the contributions required
by the executive immediately prior to the termination date.
·
A
lump sum cash payment of an amount equal to (i) 18 (or 24 in the case of our
chief executive officer), multiplied by (ii) the amount by which the total
monthly premium paid for accidental death and dismemberment and life insurance
coverage as of the termination date exceeds the contributions required by the
executive immediately prior to the termination date.
·
The
full vesting and ability to exercise all outstanding awards of stock options
granted to the executive prior to the closing of the Merger.
As
a condition to receiving the severance benefits under the Change in Control
Agreements, an executive must execute a waiver and release of claims in favor
of the Company. The following table shows the amount of potential cash payments
and the value of other severance benefits each of the Named Executive Officers
would be entitled to if his or her employment were terminated without cause
or he or she resigned for good reason as of September 30, 2007 (assuming the
Merger had closed on or before such date):
2
Name
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Base
Salary Payment
($)
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Bonus
Payment
($)
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Health
Benefits ($)
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Life and Accidental
Death &
Dismemberment
Benefits
($)
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Total ($)
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Leslie H. Cross
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1,060,000
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645,121
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15,417
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1,908
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1,722,446
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Vickie L. Capps
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472,500
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306,737
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11,255
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851
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791,343
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Luke T.
Faulstick
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472,500
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306,737
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11,255
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851
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791,343
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Louis T.
Ruggiero
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472,500
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306,737
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8,025
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851
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788,113
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Donald M. Roberts
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412,500
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267,786
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9,137
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743
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690,166
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The
foregoing description of the Change in Control Agreements with the above
officers is qualified in its entirety by reference to the terms of such
agreements, the forms of which are filed as Exhibits 10.1 and 10.2 to this
current report on Form 8-K.
Item 8.01. Other Events.
Additional
Information About the Merger and Where to Find It
In
connection with the proposed merger referred to in Item 5.02 above, the Company
intends to file a definitive proxy statement with the SEC. STOCKHOLDERS ARE
URGED TO READ THE PROXY STATEMENT (AND ALL AMENDMENTS AND SUPPLEMENTS TO IT)
AND OTHER MATERIALS THAT THE COMPANY MAY FILE WITH THE SEC IN THEIR ENTIRETY
WHEN SUCH MATERIALS BECOME AVAILABLE, BECAUSE THE MATERIALS WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED MERGER. The final
proxy statement will be mailed to the Companys stockholders. Stockholders will
be able to obtain free copies of the final proxy statement, as well as the
Companys other filings, without charge, at the SECs Web site (www.sec.gov)
when they become available. Copies of the filings may also be obtained without
charge from the Company by directing a request to: DJO Incorporated, 1430
Decision Street, Vista, CA, 92081, Attention: Mark Francois, Director of
Investor Relations (Tel: 1-760-734-4766, Email: mark.francois@djortho.com).
Participants
in the Solicitation
The
Company and its directors, executive officers and other members of management
and employees may be deemed to be participants in the solicitation of proxies
from stockholders in respect of the proposed merger referred to in Item 5.02
above. Information regarding the Companys directors and executive officers is
available in the Companys 2006 Annual Report on Form 10-K, filed with the
SEC on March 1, 2007 and the Companys proxy statement for its 2007 annual
meeting of stockholders, filed with the SEC on April 20, 2007. Additional
information regarding the interests of such potential participants will be
included in the definitive proxy statement filed with the SEC in connection
with the Special Meeting of Stockholders when it becomes available.
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Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit No.
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Document
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10.1
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Form of Change in Control Severance Agreement
entered into with Chief Executive Officer
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10.2
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Form of Change in Control Severance Agreement
entered into with other Named Executive Officers
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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.
DJO INCORPORATED
(Registrant)
Date:
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September 25,
2007
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BY:
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/s/ Donald M. Roberts
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Donald M. Roberts
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Senior Vice President, General Counsel and Secretary
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