Exhibit 10.1

 

EMPLOYMENT AGREEMENT
(Michael Mogul; Chief Executive Officer)

 

EMPLOYMENT AGREEMENT (the “Agreement”) dated as of May 31, 2011 by and between
DJO Global, Inc. (the “Company”) and Michael Mogul (the “Executive”).

 

The Company desires to employ Executive and to enter into an employment
agreement embodying the terms of such employment;

 

Executive desires to accept such employment and enter into such agreement;

 

In consideration of the premises and mutual covenants herein and for other good
and valuable consideration, the parties agree as follows:

 

1.   Term of Employment.

 

Subject to the provisions of Section 7 of this Agreement, Executive shall be
employed by the Company and certain of its affiliates for a period commencing on
June 13, 2011 (the “Start Date”) and ending on June 13, 2015 (the “Employment
Term”) on the terms and subject to the conditions set forth in this Agreement;
provided, however, that commencing with June 13, 2015 and on each June 13
thereafter (each an “Extension Date”), the Employment Term shall be
automatically extended for an additional one-year period, unless the Company or
Executive provides the other party hereto 60 days prior Notice before the next
Extension Date that the Employment Term shall not be so extended.

 

2.   Position.

 

(a)   During the Employment Term, Executive shall serve as the Company’s Chief
Executive Officer.  In such position, Executive shall report directly to the
board of directors of the Company (the “Board”) and have such duties and
authority as are customary for the Chief Executive Officer of the Company and as
shall be otherwise determined from time to time by the Board.  Executive shall
also serve as a member of the Board without additional compensation.

 

(b)   During the Employment Term, Executive will devote Executive’s full
business time and best business efforts to the performance of Executive’s duties
as Chief Executive Officer of the Company and will not engage in any other
business, profession or occupation for compensation or otherwise which would
conflict or interfere with the rendition of such services either directly or
indirectly, without the prior written consent of the Board; provided that
nothing herein shall preclude Executive, (i) from engaging in charitable and
civic activities, including accepting appointment to or continuing to serve on
any board of directors or trustees of any charitable organization or (ii)
subject to the prior approval of the Board, from accepting appointment to or
continuing to serve on any board of directors or trustees of any business
corporation; provided in each case, and in the aggregate, that such activities
do not conflict or interfere with the performance of Executive’s duties
hereunder or conflict with Section 8.

 

3.   Base Salary.

 

During the Employment Term, the Company shall pay Executive a base salary at the
annual rate of $750,000, payable in regular installments in accordance with the
Company’s usual payment practices.  Executive shall be entitled to such
increases in Executive’s base salary, if any, as may be determined in the sole
discretion of the Board at least annually.  Executive’s annual base salary, as
in effect from time to time, is hereinafter referred to as the “Base Salary.”

 

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4.   Incentive Compensation.

 

(a)   Annual Bonus.  With respect to each full fiscal year during the Employment
Term, Executive shall be eligible to earn an annual bonus award (an “Annual
Bonus”) in such amount, if any, as may be determined in the sole discretion of
the Board, of 100 percent (100%) of Executive’s Base Salary (the “Target Annual
Bonus”), and of 150 percent (150%) of Executive’s Base Salary at maximum, based
upon the achievement of such target and maximum performance objectives as may be
established by the Board.  The Annual Bonus, if any, shall be paid to Executive
within two and one-half (2.5) months after the end of the applicable fiscal
year; provided that if the audited financial statements of the Company shall not
have been completed by such date, the Annual Bonus shall instead be payable
within 30 days of such completion and no later than December 31 of the
applicable year.  Notwithstanding the foregoing, Executive shall receive a bonus
for 2011 in the amount of $652,000.

 

(b)   Equity Arrangements.  Contingent on Executive’s purchase (the “Co-Invest”)
of $2,600,000 of shares of newly issued common stock (the “Common Stock”) of the
Company at a price equal to the per share fair market value of the Common Stock
on the purchase date (it being acknowledged that the current fair market value
is $16.46 per share) not later than the 90th day after the Start Date, the
Company will grant and issue to Executive 60,753 restricted stock or RSUs (the
“Incentive Shares/RSUs”).  Prior to the Start Date, Executive will select by
written notice to the Company to receive the Incentive Shares/RSUs as either (x)
restricted stock or (y) deferred restricted stock units.  The award of Incentive
Shares/RSUs will be made pursuant to either the restricted stock award agreement
attached as Exhibit B-1 or the RSU award agreement attached as Exhibit B-2, as
applicable.  The Co-Invest shall be effected pursuant to the subscription
agreement attached as Exhibit C.  In addition (and not contingent on the
Co-Invest), the Company shall, on the Start Date, grant to Executive 800,000
options to acquire shares of Common Stock pursuant to the option award agreement
attached as Exhibit D.

 

5.   Employee Benefits.

 

During the Employment Term, Executive shall be entitled to participate in the
Company’s employee benefit plans (other than annual bonus and incentive plans)
as in effect from time to time (collectively “Employee Benefits”), on the same
basis as those benefits are generally made available to other senior executives
of the Company. Executive shall be entitled to four (4) weeks’ vacation per
fiscal year.

 

Executive acknowledges that the primary business location for Executive’s
employment will be Vista, California.  As a result, Executive will be expected
to relocate to that area on or around the Start Date.  The Company shall
reimburse Executive for reasonable and customary moving expenses in accordance
with the Company’s relocation policy for other senior executives of the Company,
which shall include at a minimum: (i) a reasonable number of house hunting trips
(not to exceed three) by Executive, his spouse and their child prior to
Executive’s relocation and reasonable expenses incurred during such house
hunting trip, (ii) reasonable closing costs associated with the sale of
Executive’s current house (excluding, for the avoidance of doubt, any loss
Executive incurs on such sale) (iii) temporary housing approved by the Board in
southern California for up to twelve (12) months; and (iv) in the event that
Executive is not

 

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able with reasonable diligence to sell his current house prior to purchasing a
new house, mortgage payments on his current house for a period up to the lesser
of (x) twelve (12) months and (y) the number of months during which Executive
makes mortgage payments on both his current and new houses; provided, that the
sum of the number of months provided under both clauses (x) and (y) shall not
exceed twelve (12) months.  The Company shall provide the foregoing benefits on
an after-tax basis to the extent any such amount is not deductible as customary
relocation expenses on Executive’s federal income tax return.

 

6.   Business Expenses.

 

During the Employment Term, reasonable business expenses incurred by Executive
in the performance of Executive’s duties hereunder shall be advanced or promptly
reimbursed by the Company in accordance with Company policies.

 

7.   Termination.

 

The Employment Term and Executive’s employment hereunder may be terminated by
the Company at any time and for any reason upon Notice to Executive and by
Executive upon at least 30 days’ advance Notice of any such resignation of
Executive’s employment; provided, that in the event that the Company terminates
Executive’s employment without Cause (as defined in Section 7(a)(ii)) after
Executive has given advance Notice of his resignation but before the end of the
notice period, Executive shall receive full payment of Base Salary, any Annual
Bonus, and benefits as an active employee for the unexpired portion of such
notice period.  Notwithstanding any other provision of this Agreement, the
provisions of this Section 7 shall exclusively govern Executive’s rights to
payment of compensation, severance, employee benefits and Executive’s business
expenses upon termination of employment with the Company and its affiliates.

 

(a)   By the Company For Cause or By Executive Other Than as a Result of a
Constructive Termination.

 

(i)    The Employment Term and Executive’s employment hereunder may be
terminated by the Company for Cause and shall terminate automatically upon the
effective date of Executive’s resignation other than as result of a Constructive
Termination (as defined in Section 7(c)(ii)).

 

(ii)    For purposes of this Agreement, “Cause” shall mean (A) Executive’s
willful and continued failure to substantially perform Executive’s duties (other
than any such failure resulting from the Executive’s Disability or any such
failure subsequent to the Executive being delivered notice of the Company’s
intent to terminate the Executive’s employment without Cause), (B) conviction
of, or a plea of nolo contendere to, (x) a felony (other than traffic-related)
under the laws of the United States or any state thereof or any similar criminal
act in a jurisdiction outside the United States or (y) a crime involving moral
turpitude that could be injurious to the Company or its reputation, (C) the
Executive’s willful malfeasance or willful misconduct which is materially and
demonstrably injurious to the Company, or (D) any act of fraud by the Executive
in the performance of the Executive’s duties.  The determination of Cause shall
be made by the Company.

 

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(iii)    If Executive’s employment is terminated by the Company for Cause, or if
Executive resigns other than as a result of a Constructive Termination,
Executive shall be entitled to receive:

 

(A)   the Base Salary and unused vacation accrued through the date of
termination, payable within fifteen days following the date of such termination;

 

(B)   any Annual Bonus earned, but unpaid, as of the date of termination for the
immediately preceding fiscal year, paid in accordance with Section 4 (except to
the extent payment is otherwise deferred pursuant to any applicable deferred
compensation arrangement with the Company, in which case such amount shall be
paid in full at the earliest such time as is provided under such arrangement);

 

(C)   reimbursement, within 60 days following submission by Executive to the
Company of appropriate supporting documentation) for any unreimbursed business
expenses properly incurred by Executive in accordance with Company policy prior
to the date of Executive’s termination; provided, that claims for such
reimbursement (accompanied by appropriate supporting documentation) are
submitted to the Company within 90 days following the date of Executive’s
termination of employment; and

 

(D)   such Employee Benefits, if any, as to which Executive may be entitled
under the employee benefit plans of the Company (the amounts described in
clauses (A) through (D) hereof being referred to as the “Accrued Rights”).

 

Following such termination of Executive’s employment by the Company for Cause or
resignation by Executive other than as a result of a Constructive Termination,
except as set forth in this Section 7(a)(iii),  Executive shall have no further
rights to any compensation or any other benefits under this Agreement.

 

(b)   Disability or Death.

 

(i)    The Employment Term and Executive’s employment hereunder shall terminate
upon Executive’s death and may be terminated by the Company if Executive becomes
physically or mentally incapacitated, after providing Executive reasonable
accommodation, and is therefore unable, for a period of nine consecutive months
or for an aggregate of twelve months in any eighteen consecutive month period,
to perform Executive’s duties.  The period of nine months shall be deemed
continuous unless Executive returns to work for a period of at least 30
consecutive days during such period and performs during such period at the level
and competence that existed prior to the beginning of the nine-month period. 
Such incapacity is hereinafter referred to as “Disability”.  Any question as to
the existence of the Disability of Executive as to which Executive and the
Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company.  If Executive and
the Company cannot agree as to a qualified independent physician, each shall
appoint such a physician and those two physicians shall select a third qualified
independent physician which third such physician shall make such determination. 
The determination of Disability made by such physician in writing to the Company
and Executive shall be final and conclusive for all purposes of the Agreement
and any other agreement between any Company and Executive that incorporates the
definition of “Disability”.

 

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(ii)    Upon termination of Executive’s employment hereunder for either
Disability or death, Executive or Executive’s estate (as the case may be) shall
be entitled to receive (A) the Accrued Rights and (B) a pro rata portion of the
actual Annual Bonus paid for the year of termination, payable on the date when
bonuses are otherwise paid to executives.

 

Following Executive’s termination of employment due to death or Disability,
except as set forth in this Section 7(b)(ii), Executive shall have no further
rights to any compensation or any other benefits under this Agreement.

 

(c)   By the Company Without Cause or Resignation by Executive as a result of
Constructive Termination.

 

(i)    The Employment Term and Executive’s employment hereunder may be
terminated by the Company without Cause or by Executive as a result of a
Constructive Termination.

 

(ii)    For purposes of this Agreement, a “Constructive Termination” shall be
deemed to have occurred upon (A) the failure of the Company to pay or cause to
be paid Executive’s base salary or annual bonus (if any) when due; (B) a
reduction in Executive’s base salary or target bonus opportunity percentage of
base salary (excluding any change in value of equity incentives or a reduction
in base salary affecting substantially all similarly situated executives by the
same percentage of base salary); (C) any diminution in Executive’s title or any
substantial and sustained diminution in Executive’s duties; (D) a relocation of
Executive’s primary work location more than 50 miles without Executive’s prior
written consent; (E) a Company Notice to Executive of the Company’s election not
to extend the Employment Term; or (F) a failure to elect or reelect or the
removal as a member of the Board; provided, that none of these events shall
constitute Constructive Termination unless the Company fails to cure such event
within 30 days after Notice is given by Executive specifying in reasonable
detail the event which constitutes Constructive Termination; provided, further,
that “Constructive Termination” shall cease to exist for an event on the
60th day following Executive’s knowledge thereof, unless Executive has given the
Company Notice thereof prior to such date.

 

(iii)    If Executive’s employment is terminated by the Company without Cause
(other than by reason of death or Disability) or if Executive resigns as a
result of a Constructive Termination, Executive shall be entitled to receive:

 

(A)   the Accrued Rights;

 

(B)   a pro rata portion of the actual Annual Bonus paid for the year of
termination, payable on the date when bonuses are otherwise paid to executives
and after Executive has entered into a release of claims set forth below, based
upon the percentage of the fiscal year that shall have elapsed through the date
of Executive’s termination of employment;

 

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(C)   subject to Executive’s continued compliance with the provisions of
Sections 8 and 9, payment, of an amount equal to (x) one and one-half multiplied
by (y) the sum of the annual Base Salary amount plus Executive’s Target Annual
Bonus amount for the year of termination, which shall be payable to Executive in
equal installments in accordance with the Company’s normal payroll practices, as
in effect on the date of termination of Executive’s employment, for eighteen
months after the date of such termination; provided, that the aggregate amount
described in this clause (C) shall be reduced by the present value of any other
cash severance benefits payable to Executive under any other severance plans,
programs or arrangements of the Company or its affiliates; and

 

(D)   continued coverage under the Company’s group health, life and disability
plans until the earlier of (i) eighteen months from Executive’s date of
termination of employment with the Company and (ii) the date such Executive
receives comparable coverage (determined, to the extent practicable, on a
coverage-by-coverage and benefit-by-benefit basis) under health, life and
disability plans of another employer.

 

Amounts payable to Executive under subparagraphs (B), (C) and (D) above, are
subject to Executive providing a release of all claims to the Company in the
form attached hereto as Exhibit A.  Following Executive’s termination of
employment by the Company without Cause (other than by reason of Executive’s
death or Disability) or by Executive’s resignation as a result of a Constructive
Termination, except as set forth in this Section 7(c)(iii), Executive shall have
no further rights to any compensation or any other benefits under this
Agreement.

 

(d)   Expiration of Employment Term.

 

(i)    Election Not to Extend the Employment Term.  In the event either party
elects not to extend the Employment Term pursuant to Section 1, unless
Executive’s employment is terminated pursuant to paragraphs (a), (b) or (c) of
this Section 7 (including, without limitation, due to a Constructive Termination
pursuant to clause (F) under Section 7(c)(ii) hereof), Executive’s termination
of employment hereunder (whether or not Executive continues as an employee of
the Company thereafter) shall be deemed to occur on the close of business on the
day immediately preceding the next scheduled Extension Date and Executive shall
be entitled to receive the Accrued Rights.  Following such termination of
Executive’s employment hereunder as a result of either party’s election not to
extend the Employment Term, except as set forth in this Section 7(d)(i) and
subject to the provisions of paragraphs (a), (b) or (c) of this Section 7 as may
apply, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.

 

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(ii)    Continued Employment Beyond the Expiration of the Employment Term. 
Unless the parties otherwise agree in writing, continuation of Executive’s
employment with the Company beyond the expiration of the Employment Term shall
be deemed an employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and Executive’s employment may thereafter be
terminated at will by either Executive or the Company; provided, that the
provisions of Sections 8, 9 and 10 of this Agreement, and any accrued and vested
rights of Executive as of the last day of the Employment Term, shall survive any
termination of this Agreement or Executive’s termination of employment
hereunder.

 

(e)   Notice of Termination.  Any purported termination of employment by the
Company or by Executive (other than due to Executive’s death) shall be
communicated by Notice of Termination to the other party hereto in accordance
with Section 11(i) hereof.  For purposes of this Agreement, a “Notice of
Termination” shall mean a Notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
employment under the provision so indicated.  If Executive receives a Notice of
Termination from the Company pursuant to Section 7(c) of this Agreement, the
Company may not thereafter assert that the termination of Executive constitutes
a termination by the Company for Cause.

 

(f)   Board/Committee Resignation.  Upon termination of Executive’s employment
for any reason, Executive agrees to resign, as of the date of such termination
and to the extent applicable, from the Board (and any committees thereof) and
the Board of Directors (and any committees thereof) of any of the Company’s
affiliates (and if Executive fails to tender such resignation within five (5)
business days following the Company’s request for such resignation, all amounts
payable under this Section 7 other than the Accrued Rights shall be forfeited).

 

8.   Non-Competition.

 

(a)          The Executive acknowledges that in the course of the Executive’s
employment with the Company, the Executive will become familiar with trade
secrets and other confidential information of the Company and that the
Executive’s services will be of special, unique and extraordinary value to the
Company.  Therefore, the Executive agrees that, during the Employment Term and
for the 18 months thereafter (the “Restricted Period”), the Executive shall not
directly or indirectly own, manage, control, participate in, consult with, or in
any manner engage in any business competing with any business of the Company
within the United States and any other geographical area in which the Company
then engages in business or engaged in business at any time during the
Executive’s employment with the Company (a “Competitor”); provided, however,
that none of (i) Stryker, (ii) Zimmer, (iii) Johnson & Johnson, (iv) Biomet or
(v) Smith & Nephew shall not be considered a Competitor.  Nothing herein shall
prohibit the Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation that is publicly traded so long
as the Executive has no direct or indirect active participation in the business
of such corporation.

 

(b)   During the Restricted Period, the Executive shall not directly or
indirectly (i) induce or attempt to induce any employee of the Company to
terminate such employment, or in any way interfere with the employee
relationship between the Company and any such employee, (ii) hire any person who
is, or at any time during the Employment Term was, an employee of the Company or
(iii) induce or attempt to induce any customer, licensor, licensee or supplier
of the Company having a business relationship with the Company to cease doing
business with the Company or interfere materially with the relationship between
any such person and the Company

 

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(c)   The period of time during which the provisions of this Section 8 shall be
in effect shall be extended by the length of time during which Executive is in
breach of the terms hereof as determined by any court of competent jurisdiction
on the Company’s application for injunctive relief.

 

(d)   The parties hereto agree that the duration and area for which the
covenants set forth in this Section 8 are to be effective and are reasonable. 
In the event that any court or arbitrator determines that the time period or the
area, or both of them, are unreasonable and that any of the covenants are to
that extent unenforceable, the parties hereto agree that such covenants will
remain in full force and effect, first, for the greatest time period, and
second, in the greatest geographical area that would not render them
unenforceable.  The parties intend that this Agreement will be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America.

 

(e)   Notwithstanding anything in this Section 8 to the contrary, Executive may
request a waiver from the Company with regard to any restrictions contained in
this Section by providing written notice of any such request to the Company’s
Chief Legal Officer or General Counsel.  Upon receipt of any such written
notice, the Company’s Chief Legal Officer or General Counsel shall confer with
the Board regarding such request and make reasonable efforts to respond to
Executive within 15 days of receipt of such notice whether the Board (in its
sole determination) shall agree to waive any of the restrictions contained in
this Section 8.

 

9.   Confidentiality; Mutual Non-Disparagement; Intellectual Property.

 

(a)   Confidentiality.

 

(i)  Executive will not at any time (whether during or after Executive’s
employment with the Company) (x) retain or use for the benefit, purposes or
account of Executive or any other person; or (y) disclose, divulge, reveal,
communicate, share, transfer or provide access to any person outside the Company
(other than its professional advisers who are bound by confidentiality
obligations), any non-public, proprietary or confidential information
--including without limitation trade secrets, know-how, research and
development, software, databases, inventions, processes, formulae, technology,
designs and other intellectual property, information concerning finances,
investments, profits, pricing, costs, products, services, vendors, customers,
clients, partners, investors, personnel, compensation, recruiting, training,
advertising, sales, marketing, promotions, government and regulatory activities
and approvals — concerning the past, current or future business, activities and
operations of the Company, its subsidiaries or affiliates and/or any third party
that has disclosed or provided any of same to the Company on a confidential
basis (“Confidential Information”) without the prior written authorization of
the Board except as may be required for Executive to discharge his employment
duties to the Company.

 

(ii)  “Confidential Information” shall not include any information that is (a)
generally known to the industry or the public other than as a result of
Executive’s breach of this covenant or any breach of other confidentiality
obligations by third parties; (b) made legitimately

 

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available to Executive by a third party without breach of any confidentiality
obligation; or (c) required by law to be disclosed (including via subpoena);
provided that Executive shall give prompt Notice to the Company of such
requirement of law, disclose no more information than is so required, and
cooperate, at the Company’s cost, with any attempts by the Company to obtain a
protective order or similar treatment.

 

(iii)  Except as required by law, Executive will not disclose to anyone, other
than Executive’s immediate family and legal or financial advisors, the existence
or contents of this Agreement (unless this Agreement shall be publicly available
as a result of a regulatory filing made by the Company or its affiliates or
otherwise is disclosed by the Company to any unaffiliated party that is not
under a restriction of confidentiality at least as restrictive as this
restriction upon Executive); provided, that Executive may disclose to any
prospective future employer the notice provisions of that part of Section 7
preceding Section 7(a) and the provisions of Sections 8 and 9 of this Agreement
provided they agree to maintain the confidentiality of such terms.

 

(iv)  Upon termination of Executive’s employment with the Company for any
reason, Executive shall (x) cease and not thereafter commence use of any
Confidential Information or intellectual property (including without limitation,
any patent, invention, copyright, trade secret, trademark, trade name, logo,
domain name or other source indicator) owned or used by the Company, its
subsidiaries or affiliates; (y) immediately destroy, delete, or return to the
Company, at the Company’s option, all originals and copies in any form or medium
(including memoranda, books, papers, plans, computer files, letters and other
data) in Executive’s possession or control (including any of the foregoing
stored or located in Executive’s office, home, laptop or other computer, whether
or not Company property) that contain Confidential Information or otherwise
relate to the business of the Company, its affiliates and subsidiaries, except
that Executive may retain only those portions of any personal notes, notebooks
and diaries that do not contain any Confidential Information and his rolodex (or
other physical or electronic address book); and (z) fully cooperate with the
Company regarding the delivery or destruction of any other Confidential
Information not within Executive’s possession or control of which Executive is
or becomes aware.

 

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(b)   Mutual Non-Disparagement

 

Executive will not, other than as required by law or by order of a court or
other competent authority, make or publish, or cause any other person to make or
publish, any statement that is disparaging or that reflects negatively upon the
Company or its affiliates, or that is or reasonably would be expected to be
damaging to the reputation of the Company or its affiliates.  The Company will
not (and it will instruct its executive officers and members of the board of
directors or other governing board of the Company not to), other than as
required by law or by order of a court or other competent authority, make or
publish, or cause any other person to make or publish, any public statement that
is disparaging or that reflects negatively upon the Executive, or that is or
reasonably would be expected to be damaging to the reputation of the Executive.

 

(c)   Intellectual Property

 

(i)  If Executive creates, invents, designs, develops, contributes to or
improves any works of authorship, inventions, intellectual property, materials,
documents or other work product (including without limitation, research,
reports, software, databases, systems, applications, presentations, textual
works, content, or audiovisual materials), either alone or with third parties,
at any time during Executive’s employment by the Company and within the scope of
such employment and/or with the use of any the Company resources (“Company
Works”), Executive shall promptly and fully disclose same to the Company and
hereby irrevocably assigns, transfers and conveys, to the maximum extent
permitted by applicable law, all rights and intellectual property rights therein
(including rights under patent, industrial property, copyright, trademark, trade
secret, unfair competition and related laws) to the Company to the extent
ownership of any such rights does not vest originally in the Company.

 

(ii)  All of Executive’s records regarding Company Works will be available to
and remain the sole property and intellectual property of the Company at all
times.

 

(iii)  Executive shall take all requested actions and execute all requested
documents (including any licenses or assignments required by a government
contract) at the Company’s expense (but without further remuneration) to assist
the Company in validating, maintaining, protecting, enforcing, perfecting,
recording, patenting or registering any of the Company’s rights in the Company
Works.  If the Company is unable for any other reason to secure Executive’s
signature on any document for this purpose, then Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as Executive’s agent and attorney in fact, to act for and in Executive’s behalf
and stead to execute any documents and to do all other lawfully permitted acts
in connection with the foregoing.

 

(iv)  Executive shall not knowingly improperly use for the benefit of, bring to
any premises of, divulge, disclose, communicate, reveal, transfer or provide
access to, or share with the Company any confidential, proprietary or non-public
information or intellectual property relating to a former employer or other
third party without the prior written permission of such third party.  Executive
shall comply with all relevant policies and guidelines of the Company, including
regarding the protection of confidential information and intellectual property
and potential conflicts of interest.  Executive acknowledges that the Company
may amend any such policies and guidelines from time to time, and that Executive
remains at all times bound by their most current version.

 

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(v)  The provisions of Section 8, 9 and 10 shall survive the termination of
Executive’s employment for any reason.

 

10.   Specific Performance.

 

Executive acknowledges and agrees that the Company’s remedies at law for a
breach or threatened breach of any of the provisions of Sections 8 or 9 would be
inadequate and the Company would suffer irreparable damages as a result of such
breach or threatened breach.  In recognition of this fact, Executive agrees
that, in the event of such a breach or threatened breach, in addition to any
remedies at law, the Company, may seek equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.

 

11.   Miscellaneous.

 

(a)   Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflicts
of laws principles thereof.

 

(b)   Entire Agreement/Amendments.  This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company.  There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein or as may be set forth from time to
time in the Company’s employee benefit plans and policies applicable to
Executive.  This Agreement may not be altered, modified, or amended except by
written instrument signed by the parties hereto.  In the event of any
inconsistency between this Agreement and any other plan, program, practice or
agreement of which Executive is a participant or a party, this Agreement shall
control unless such other plan, program, practice or agreement specifically
refers to the provisions of this sentence.

 

(c)   No Waiver.  The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

 

(d)   Severability.  In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.

 

(e)   Assignment.  This Agreement, and all of Executive’s rights and duties
hereunder, shall not be assignable or delegable by Executive.  Any purported
assignment or delegation by Executive in violation of the foregoing shall be
null and void ab initio and of no force and effect.  This Agreement may be
assigned by the Company to a person or entity which is an affiliate or a
successor in interest to substantially all of the business operations of the
Company, provided, that (i) such assignment shall be subject to Executive’s
rights under Section 7(c)(ii), and (ii) the Board has exercised reasonable
diligence to determine that such assignee is then solvent (on a balance sheet
and cash flow basis) to satisfy the Company’s obligations under this Agreement
together with all of the assignee’s other liabilities and (iii) no such
assignment shall relieve the Company from its obligations and duties hereunder. 
Upon such assignment, the rights and obligations of the Company hereunder shall
become the rights and obligations of such affiliate or successor person or
entity.

 

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(f)   Counterclaim; No Mitigation.  The Company’s obligation to pay Executive
the amounts provided and to make the arrangements provided hereunder shall be
subject to counterclaim and to seek recoupment of amounts owed by Executive to
the Company or its affiliates.  Executive shall not be required to mitigate the
amount of any payment provided for pursuant to this Agreement by seeking other
employment, and such payments shall not be reduced by any compensation or
benefits received from any subsequent employer or other endeavor except as
provided at Section 7(c)(iii)(E)(ii).

 

(g)   Compliance with IRC Section 409A.  Notwithstanding anything herein to the
contrary, (i) if at the time of Executive’s termination of employment with the
Company Executive is a “specified employee” as defined in Section 409A of the
U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the deferral of
the commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to Executive) until the date that is six months following Executive’s
termination of employment with the Company (or the earliest date as is permitted
under Section 409A of the Code) and (ii) if any other payments of money or other
benefits due to Executive hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or
other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner,
determined by the Board, that does not cause such an accelerated or additional
tax.  For purposes of Section 409A of the Code, each payment made under this
Agreement shall be designated as a “separate payment” within the meaning of the
Section 409A of the Code, and references herein to Executive’s “termination of
employment” shall refer to Executive’s separation from service with the Company
within the meaning of Section 409A.  To the extent any reimbursements or in-kind
benefits due to Executive under this Agreement constitute “deferred
compensation” under Section 409A of the Code, any such reimbursements or in-kind
benefits shall be paid to Executive in a manner consistent with Treas. Reg.
Section 1.409A-3(i)(1)(iv).  The Company shall consult with Executive in good
faith regarding the implementation of the provisions of this Section 11(g);
provided that neither the Company nor any of its employees or representatives
shall have any liability to Executive with respect to thereto.

 

(h)   Successors; Binding Agreement.  This Agreement shall inure to the benefit
of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  In the
event of Executive’s death prior to receipt of all amounts payable to Executive
(including any unpaid amounts due under Section 7), such amounts shall be paid
to Executive’s beneficiary designated by him by Notice to the Company or, in the
absence of such designation, to his estate.

 

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(i)   Notice.  For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three postal delivery days after it has been mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below in this Agreement, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that Notice of change of address shall be effective only upon receipt (each such
communication,  “Notice”).

 

If to the Company, addressed to:

 

DJO Global, Inc.

1430 Decision Street

Vista, CA 92081

Attention:  General Counsel

 

with a copy which shall not constitute Notice to:

 

The Blackstone Group
345 Park Avenue
New York, New York 10154
Attention: Chinh Chu

 

with a copy which shall not constitute Notice to:

 

Simpson Thacher & Bartlett LLP
425 Lexington Ave.
New York, NY 10017
Attention:  Gregory T. Grogan

 

If to Executive, to the address listed in the Company’s payroll records from
time to time.

 

(j)   Executive Representation.  Executive hereby represents to the Company that
the execution and delivery of this Agreement by Executive and the Company and
the performance by Executive of Executive’s duties hereunder shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.

 

(k)   Prior Agreements.  This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company
and/or its affiliates regarding the terms and conditions of Executive’s
employment with the Company and/or its affiliates (collectively, the “Prior
Agreements”).

 

(l)   Cooperation.  Executive shall provide Executive’s reasonable cooperation
in connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during Executive’s employment
hereunder, provided, that, following termination of Executive’s employment, the
Company shall pay all expenses incurred by Executive in providing such
cooperation, including, without limitation, all transportation,

 

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lodging and meal expenses (in the same level of comfort provided to Executive
for his business travel during his period of employment) and reasonable
attorneys fees.  This provision shall survive any termination of this Agreement.

 

(m)   Withholding Taxes.  The Company may withhold from any amounts payable
under this Agreement such Federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.

 

(n)   Counterparts.  This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

 

(o)   Attorney’s Fees.  The Company shall reimburse Executive for the reasonable
legal fees and expenses of Executive’s counsel in connection with the
negotiation and preparation of this Agreement (and related agreements entered
into in connection with this Agreement) in an amount not to exceed $20,000.

 

(p)   Indemnification.  Without limiting and without regards to any other
indemnification provided to Executive under any other plan or agreement in which
Executive is a fiduciary or a party, the Company shall indemnify Executive and
hold Executive harmless from and against all costs, expenses, claims, losses and
liabilities (including, without limitation, fees, judgments, fines, penalties
and settlement payments) incurred by Executive in connection with any action,
suit or proceeding in which Executive is made, or is threatened to be made, a
party or a witness by reason of Executive’s performance as an officer, director
or employee of the Company or its subsidiaries or in any other capacity
(including a fiduciary capacity) in which Executive serves at the request of the
Company or its subsidiaries (each, a “Proceeding”) to the maximum extent
permitted by applicable law.  If any claim is asserted with respect to which
would reasonably be expected to be entitled to indemnification, the Company
shall pay Executive’s reasonable costs and expenses (including reasonable
attorneys fees) with respect to any Proceeding (or cause such expenses to be
paid) on a quarterly basis; provided that Executive shall reimburse the Company
for such amounts, plus simple interest thereon at the 90-day United States
Treasury Bill rate as in effect from time to time, compounded annually, if
Executive ultimately shall be found by a court of competent jurisdiction not to
have been entitled to such indemnification.  The Company or its affiliates shall
at all times maintain or cause to be maintained a directors and officers’
liability insurance and indemnification policy covering Executive which is
consistent with the policy that covers members of the Board.  The provisions of
this Section 11(p) shall (i) survive any termination of Executive’s employment
with the Company, (ii) survive any termination of this Agreement and (iii) be
binding on any successor to the Company.

 

 [Signature Page Follows this Page]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the day and year first above written.

 

 

 

DJO GLOBAL, INC.

 

 

 

 

 

/s/ Thomas A. Capizzi

 

By: Thomas A. Capizzi

 

Title: Executive Vice President, Global Human Resources

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Michael Mogul

 

Michael Mogul

 

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EXHIBIT A

 

RELEASE OF CLAIMS

 

This Release of Claims is entered into by Michael Mogul (“Executive”).

 

WHEREAS, Executive and DJO Global, Inc., with offices at 1430 Decision Street,
Vista, CA 92081 (the “Company”) entered into an Employment Agreement (the
“Employment Agreement”) dated as of May 31, 2011 that provides Executive certain
severance and other benefits in the event of an involuntary termination of
Executive’s termination without Cause or Executive’s resignation of employment
due to a Constructive Termination (each term as defined under the Employment
Agreement);

 

WHEREAS, Executive’s employment has so terminated; and

 

WHEREAS, pursuant to Section 7(c)(iii) of the Employment Agreement, a condition
of Executive’s entitlement to certain severance and other benefits thereunder is
his agreement to this Release of Claims.

 

NOW, THEREFORE, in consideration of the severance and other benefits provided
under Section 7(c)(iii)(B) and (C), Executive agrees as follows:

 

1.                                      Executive, for himself and his heirs,
executors and administrators, hereby fully and finally waives, discharges and
releases the Company, including each of the Company’s past, current and future
parents, subsidiaries, and affiliates, and its and their shareholders, members,
directors, officers, and employees, from any and all claims relating to his
employment with the Company or his termination therefrom, whether now known or
later discovered, which he or anyone acting on his behalf might otherwise have
had or asserted, including, but not limited to, any express or implied contract
of employment claims, any tort claims, claims under Title VII of the Civil
Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1866,
the Age Discrimination in Employment Act of 1967, as amended, the Older Workers
Benefit Protection Act of 1990, the laws, including the labor laws of any state,
including the State of California, and all claims under related common law,
statutes, and executive orders at the federal, state and local levels of
government, and any claims to any benefits from employment with the Company
other than: (i) those benefits set forth enumerated in Section 7(c)(iii) of the
Employment Agreement and (ii) any claims for accrued and vested benefits under
any of the Company’s employee retirement and welfare benefit plans in which
Executive participated immediately prior to the date of termination of his
employment.

 

2.                                      Executive represents that he has not
brought, and covenants and agrees that he will not bring or cause to be brought,
any charges, claims, demands, suits or actions, known or unknown, in any forum,
against the Company arising out of, connected with or related in any way to his
dealings with the Company that occurred prior to the effective date of this
Agreement, including, without limitation, his employment or his termination;
provided, however, that Executive shall not be prevented from enforcing any
rights he may have under the terms of this Release of Claims, in accordance with
the Employment Agreement.

 

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3.                                      Executive acknowledges that he is
subject to a confidentiality covenant pursuant to Section 9 of the Employment
Agreement and a noncompetition covenant pursuant to Section 8 of the Employment
Agreement and hereby reaffirms his obligations thereunder.

 

4.                                      EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN
ADVISED, IN WRITING, TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING
THIS AGREEMENT AND THAT HE HAS SIGNED THIS AGREEMENT KNOWINGLY, VOLUNTARILY, AND
FREELY, AND WITH SUCH COUNSEL AS HE DEEMED APPROPRIATE. IN ADDITION, EMPLOYEE
ACKNOWLEDGES THAT HE HAS BEEN PROVIDED WITH A PERIOD OF UP TO TWENTY-ONE (21)
DAYS IN WHICH TO CONSIDER WHETHER OR NOT TO ENTER INTO THIS RELEASE. FURTHER,
EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF HIS RIGHT TO REVOKE THIS
AGREEMENT DURING THE SEVEN (7) DAY PERIOD FOLLOWING EXECUTION HEREOF, AND THAT
THE AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION
PERIOD HAS EXPIRED.

 

5.                                      Nothing contained herein shall be
construed as an admission by the Company of any liability of any kind to
Executive, all such liability being expressly denied except for obligations of
the Company imposed by the Employment Agreement which survive pursuant to this
Release of Claims.

 

 

 

 

Michael Mogul

 

 

 

Date:                                        , 20              

 

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EXHIBIT B-1

 

FORM OF RESTRICTED SHARE AGREEMENT

 

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EXHIBIT B-2

 

FORM OF RSU AGREEMENT

 

B-1

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EXHIBIT C

 

FORM OF SUBSCRIPTION AGREEMENT

 

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EXHIBIT D

 

FORM OF STOCK OPTION AGREEMENT

 

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