Item 8.01. Other Events.
DJO Incorporated (“DJO”)
and the other named defendants have entered into a memorandum of understanding
with plaintiffs’ counsel in connection with two purported class action lawsuits
filed in the California Superior Court, in the County of San Diego and
consolidated as
In re DJO Shareholder Litigation
, Master File No: 37-2007-00074195-CU-BT-CTL. Those
consolidated actions were filed in connection with the DJO Board of Directors’
approval of a merger agreement with an affiliate of ReAble Therapeutics, Inc.
Under the terms of
the memorandum, DJO, the other named defendants, and plaintiffs have agreed to
settle the consolidated action subject to court approval. DJO and the other
defendants deny all allegations of wrongdoing, fault, liability or damage to
the plaintiffs and the putative class in the consolidated action, deny that
they are engaged in any wrongdoing or violation of law or breach of duty and
believe they acted properly at all times. The memorandum provides for dismissal
of the consolidated action with prejudice upon approval of a stipulation of
settlement by the court. Pursuant to the terms of the memorandum, DJO
acknowledged that the consolidated action resulted in a decision to provide
additional information to shareholders in the definitive proxy statement
concerning the proposed merger and to modify certain terms in the merger
agreement as described below, and agreed to pay certain attorneys’ fees, costs,
and expenses incurred by the plaintiffs. DJO does not make any admission that
the supplemental disclosures are material.
Pursuant to the
terms of the memorandum, DJO,
ReAble
Therapeutics Finance LLC and Reaction Acquisition Merger Sub, Inc. have agreed that (i)
notwithstanding Section 8.5(d) of the merger agreement, in the event that the
merger agreement is terminated by ReAble Therapeutics Finance LLC or DJO
pursuant to Sections 8.2(a), 8.2(b) or 8.4(b) of the merger agreement, DJO
shall be obligated to pay the termination fee only in the event that it enters
into a definitive agreement with respect to, or consummates, a takeover
proposal (as such term is defined in the merger agreement) within eight months
(rather than twelve months) after such termination, and (ii) notwithstanding
Section 6.2(g)(i)(A) of the merger agreement, the five calendar days period in
the definition of notice period in the merger agreement shall be deemed to be
three calendar days.
Additional Information
About the Merger and Where to Find It
In
connection with the proposed merger referred to above, DJO filed a definitive
proxy statement with the SEC on October 9, 2007. 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 CONTAIN IMPORTANT INFORMATION
ABOUT DJO AND THE PROPOSED MERGER. The final proxy statement was mailed to DJO’s
stockholders. Stockholders are able to obtain free copies of the final proxy
statement, as well as the Company’s other filings, without charge, at the SEC’s
Web site (www.sec.gov) when they become available. Copies of the filings may
also be obtained without charge from DJO 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).
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