Exhibit 10.2


 


AMENDMENT NUMBER ONE


TO


NONSTATUTORY STOCK OPTION AGREEMENT


 


This Amendment
Number One to Nonstatutory Stock Option Agreement (“Amendment”), dated as of March 7,
2009, is made by and between DJO Incorporated, a Delaware corporation (the “Company”)
and                  
(the “Optionee”).


 


WHEREAS, the Company and Optionee have
previously entered into that certain Nonstatutory Stock Option Agreement (the “Agreement”)
dated              ,
2008 under which the Company granted Optionee an option to purchase shares of
Common Stock on terms and conditions set forth therein;


 


WHEREAS, the Company and Optionee desire to
amend the Agreement and thereby amend the terms of the option granted pursuant
to the Agreement in the manner set forth in this Amendment;


 


NOW, THEREFORE, the parties hereby agree as
follows.  Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement.


 


1.              Amendment of
Certain Definitions.


 


(a)           A new Section 1(n) is
hereby inserted to read as follows:


 


“(n)         “IRR” shall mean, as determined by the Board based on an
analysis provided by the Company’s management, Blackstone’s annually compounded
internal rate of return based on the applicable sale price of Blackstone’s
aggregate investment in the Company taking into account all dividends,
distributions, and other proceeds received by Blackstone, but excluding any
fees paid to Blackstone pursuant to that certain Monitoring Agreement by and
between the Company and Blackstone dated November 3, 2006, as amended from
time to time, or any successor thereto, and based on the assumption that all
shares available for or subject to award under the Plan are outstanding shares
of Company common stock.”


 


(b)           A
new Section 1(o) is hereby inserted to read as follows:


 


“(o)         “MOIC” shall mean the multiple of
Blackstone’s aggregate invested equity capital in the Company since its initial
investment in the Company through the date of determination as determined by
the Board based on an analysis provided by the Company’s management.  It being understood that the invested capital
on the date here of equals $792 million.”


 

















 


(c)           Sections
1(n) and (o) and all other subsections of Section 1 as they
existed prior to the preceding amendments shall not be deleted, but are hereby “renumbered”
in an appropriate fashion.


 


2.              Amendment to
First Performance-Based Tranche of Vesting.


 


(a)           Section 4(b) of the
Agreement is hereby amended to substitute the attached version of Attachment A
for the version thereof previously attached to the Agreement.  Each reference in Section 4(b) of
the Agreement to “Attachment A” shall be considered as a reference to
Attachment A attached to this Amendment.


 


(b)           The
last paragraph in section 4(b) is hereby amended in its entirety to read
as follows:


 


“Any Option Shares
in the First Performance-Based Tranche which the Optionee does not earn the
right to exercise at any of the dates set forth above shall remain capable of
vesting at any of the later dates set forth above in the following manner.  If the Option Shares in the First
Performance-Based Tranche on any of the dates set forth above (the “Current
Date”) vest in any percentage between 80% and 100% on such date (the “Current
Vesting Percentage”), then the Option Shares in the First Performance-Based Tranche
that were subject to vesting at any earlier date set forth above that did not
vest at such earlier date in the same or a greater percentage as the Current
Vesting Percentage shall vest and be exercisable on the Current Date at the
same percentage as the Current Vesting Percentage.  Any Option Shares in the First
Performance-Based Tranche that have not vested by the latest date set forth
above shall thereupon expire and terminate.”


 


3.             Amendment
to Second Performance-Based Tranche of Vesting.  Section 4(c) of the Agreement is
hereby amended in its entirety to read as follows:


 


“(c)         The
Option Shares in the Second Performance-Based Tranche shall become vested and
exercisable on such date, if any, prior to the expiration of the term hereof,
that all of the following three conditions are satisfied:  (i)  Blackstone shall have disposed of
some or all of its holdings of common stock in the Company; (ii) Blackstone
shall have realized an IRR on its aggregate investment in the common stock of
the Company of at least 22.5%; and (iii) Blackstone shall have realized a
MOIC in the Company of at least 2.5 times.”


 


3.             Section 4(d) of
the Agreement is hereby amended in its entirety to read as follows:


 


“(d)  Notwithstanding the
foregoing, (i) the Option Shares of the Time-Based Tranche granted hereby
shall become immediately exercisable upon the occurrence of a Change in Control
if Optionee remains in the continuous employ of the Company or any Subsidiary
until the date of the consummation of such Change in 


 

















 


Control, and (ii) the Option Shares of
the First Performance-Based Tranche for the year in which such Change of
Control is consummated and for any subsequent year in the Performance Period
shall become immediately exercisable if the Optionee remains in the continuous
employ of the Company or any Subsidiary until the date of consummation of such
Change in Control.”


 


4.             Section 4(g) of
the Agreement is hereby amended in its entirety to read as follows:


 


“(g) All of the financial
factors utilized to establish the vesting of the Option Shares in the First
Performance-Based Tranche shall be determined by the Board based on an analysis
provided by the Company’s management and any such determination shall be final
and binding on Optionee for all purposes under this Agreement.”


 


5.             Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.


 


6.             Effect
of Amendment.  Except as specifically
amended by this Amendment, the Agreement remains in force and unmodified and
its terms and provisions, as amended hereby, remain in full force and effect.


 

















 


IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed on its behalf by its duly authorized officer and the Optionee has
executed this Amendment, as of the day and year first above written.


 


 


	
   

  	
  DJO INCORPORATED:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DONALD ROBERTS

  
	
   

  	
  Executive Vice President, General Counsel and Secretary

  



 


 


I hereby agree
to be bound by the terms of the Plan, the Agreement as amended by this
Amendment and the Stockholder’s Agreement. 
I hereby further agree that all the decisions and determinations of the
Board or an officer of the Company as provided in the Agreement as amended by
this Amendment shall be final and binding.


 


 


	
   

  	
  OPTIONEE: