The following disclosure was included in a
Current Report on Form 8-K filed with the Securities and Exchange Commission on
November 5, 2007:
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).
2