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): June 1,
2009
__________________
DIGITAL
ALLY, INC.
(Exact
Name of Registrant as Specified in Charter)
__________________
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Nevada
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001-33899
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20-0064269
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(State
or other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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7311
W. 130th Street, Suite 170, Overland Park, KS 66213
(Address
of Principal Executive Offices) (Zip Code)
(913)
814-7774
(Registrant’s
telephone number, including area code)
__________________
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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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02
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Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain
Officers.
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Appointment
of Certain Officers
Effective
on June 1, 2009, the Company appointed Michael Caulfield as the Vice President
of Strategic Development for the Company.
A copy of
the press release announcing the appointments of Mr. Caulfield is attached
hereto as Exhibit
99.1.
Retention
Agreements
On June
1, 2009, the Company entered into a retention agreement with Michael Caulfield
in conjunction with his appointment as the Vice President of Strategic
Development for the Company:
The
retention agreement guarantees the executive officer specific payments and
benefits upon a Change in Control of the Company. The retention
agreement also provides for specified severance benefits if, after a Change in
Control of the Company occurs, the executive officer voluntarily terminates
employment for “Good Reason” or is involuntarily terminated without
“Cause.”
Under the
retention agreement, a “Change in Control” means (i) one party alone, or acting
with others, has acquired or gained control over more than fifty percent (50%)
of the voting shares of the Company; or (ii) the Company merges or consolidates
with or into another entity or completes any other corporate reorganization, if
more than fifty percent (50%) of the combined voting power of the surviving
entity’s securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not shareholders of the
Company immediately prior to such merger, consolidation or other reorganization;
or (iii) a majority of the Company’s Board of Directors is replaced and/or
dismissed by the shareholders of the Company without the recommendation of or
nomination by the Company’s current Board of Directors; or (iv) the Company’s
Chief Executive Officer (the “CEO”) is replaced and/or dismissed by shareholders
without the approval of the Company’s Board of Directors; or (v) the Company
sells, transfers or otherwise disposes of all or substantially all of the
consolidated assets of the Company and the Company does not own stock in the
purchaser or purchasers having more than fifty percent (50%) of the voting power
of the entity owning all or substantially all of the consolidated assets of the
Company after such purchase.
“Good
Reason” means either (i) a material adverse change in the executive’s status as
an executive or other key employee of the Company, including without limitation,
a material adverse change in the executive’s position, authority, or aggregate
duties or responsibilities; or (ii) any adverse change in the executive’s base
salary, target bonus or benefits; or (iii) a request by the Company to
materially change the executive’s geographic work location.
“Cause”
means (i) the executive has acted in bad faith and to the detriment of the
Company; (ii) the executive has refused or failed to act in accordance with any
specific lawful and material direction or order of his or her supervisor; (iii)
the executive has exhibited, in regard to employment, unfitness or
unavailability for service, misconduct, dishonesty, habitual neglect,
incompetence, or has committed an act of embezzlement, fraud or theft with
respect to the property of the Company; (iv) the executive has abused alcohol or
drugs on the job or in a manner that affects the executive’s job performance;
and/or (v) the executive has been found guilty of or has plead nolo contendere to the
commission of a crime involving dishonesty, breach of trust, or physical or
emotional harm to any person. Prior to termination for Cause, the
Company shall give the executive written notice of the reason for such potential
termination and provide the executive a thirty (30) day period to cure such
conduct or act or omission alleged to provide grounds for such
termination.
If any
Change in Control occurs and the executive continues to be employed as of the
completion of such Change in Control, upon completion of such Change in Control,
as payment for the executive’s additional efforts during such Change in Control,
the Company shall pay the executive a Change in Control benefit payment equal to
three (3) months of the executive’s base salary at the rate in effect
immediately prior to the Change in Control completion date, payable in a lump
sum net of required tax withholdings.
If any
Change in Control occurs, and if, during the one (1) year period following the
Change in Control, the Company terminates the executive’s employment without
Cause or the executive submits a resignation for Good Reason (the effective date
of such termination or resignation, the “Termination Date”), then:
(a) The Company shall pay the executive
severance pay equal to twelve (12) months of the executive’s base salary at the
higher of the rate in effect immediately prior to the Termination Date or the
rate in effect immediately prior to the occurrence of the event or events
constituting Good Reason, payable on the Termination Date in a lump sum net of
required tax withholdings, plus all other amounts then payable by the Company to
the executive less any amounts then due and owing from the executive to the
Company;
(b) The Company shall provide continuation
of the executive’s health benefits at the Company’s expense for eighteen (18)
months following the Termination Date; and
(c) The executive’s outstanding employee
stock options shall fully vest and be exercisable for a 90-day period following
the Termination Date.
The
executive is not entitled to the above severance benefits for a termination
based on death or disability, resignation without Good Reason or termination for
Cause. Following the Termination Date, the Company shall also pay the
executive all reimbursements for expenses in accordance with the Company’s
policies, within ten (10) days of submission of appropriate evidence
thereof by the executive.
A copy of
the form of retention agreements for Mr. Caulfield is filed herewith as Exhibits
10.21, and is incorporated herein by reference.
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Item
9.01
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Financial
Statements and
Exhibits.
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(d) Exhibits.
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10.21
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Retention
Agreement between Digital Ally, Inc. and Michael Caulfield, dated as of
June 1, 2009.
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99.1
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Text
of press release entitled “Michael Caulfield to Join Digital Ally as Vice
President of Strategic Development” dated June 1,
2009.
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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.
Date:
June 3,
2009
Digital
Ally, Inc.
By: /s/ Stanton
E.
Ross
Name: Stanton
E. Ross
Title: Chairman,
President and Chief Executive Officer
EXHIBIT
INDEX
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10.21
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Key
Executive Retention Agreement dated June 1, 2009 between Digital Ally,
Inc. and Michael Caulfield
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99.1
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Text
of press release entitled “Michael Caulfield to Join Digital Ally as Vice
President of Strategic Development” dated June 1,
2009
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