**Exhibit 10.1**

 

**NONSTATUTORYSTOCK OPTION AGREEMENT**

 

This NONSTATUTORY STOCK OPTION AGREEMENT (this “Agreement”), dated asof March7, 2009 (the “Effective Date”), is made by and between DJOIncorporated, a Delaware corporation (the “Company”), and **[                 ]**(the “Optionee”).

 

**WHEREAS**, the Company desires to grant theOptionee a nonqualified stock option in recognition of the Optionee’s serviceto the Company and to further align the Optionee’s interests with those of theCompany’s stockholders.

 

**NOW THEREFORE**, the parties to this Agreement,hereby agree as follows:

 

# 1.**             CertainDefinitions**.  Capitalizedterms used, but not otherwise defined, in this Agreement will have the meaningsgiven to such terms in the Company’s 2007 Incentive Stock Plan (the “Plan”).  As used in this Agreement:

#  

## (a)           “Board”means the Board of Directors of the Company.

##  

## (b)           “Blackstone”means each of Blackstone Capital Partners V L.P. a Cayman Islands limitedpartnership, Blackstone Family Investment Partnership V L.P., a Cayman Islandslimited partnership, Blackstone Family Investment Partnership V-A L.P., aCayman Islands limited partnership, Blackstone Participation Partnership VL.P., a Cayman Islands limited partnership and each of their respectiveAffiliates.

##  

## (c)           “Changein Control” means (i) the sale or disposition, in one or a series ofrelated transactions, of all or substantially all of the assets of the Companyto any “person” or “group” (as such terms are defined in Sections 13(d)(3) and14(d)(2) of the Exchange Act) other than a sale or disposition whereBlackstone retains all or substantially all of the assets of the Company, or (ii) anyperson or group, other than Blackstone, is or becomes the ‘beneficial owner”(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly orindirectly, of more than 50% of the total voting power of the voting stock ofthe Company, including by way of merger, consolidation or otherwise (other thanan offering of stock to the general public through a registration statement filedwith the Securities and Exchange Commission); or (iii) the approval by thestockholders of the Company of a plan of complete liquidation of the Company.

##  

## (d)           “Code”means the Internal Revenue Code of 1986, as amended.

##  

## (e)           “Company”has the meaning specified in the introductory paragraph of this Agreement orits successors; provided, that to the extent that any class of equitysecurities of a member of the Company’s controlled group becomes publiclytraded on an established securities market, the term “Company” shall be deemedto refer to such publicly traded entity.

##  

## (f)            “CompensationCommittee” means the Executive Compensation Committee of the Board.

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## (g)           “CreditAgreement” means that certain Credit Agreement dated November 20, 2007, byand between DJO Finance LLC (f/k/a ReAble Therapeutics Finance LLC), DJOHoldings LLC (f/k/a ReAble Therapeutics Holdings LLC), Credit Suisse andcertain other lenders.

 

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## (h)           “Disability”shall mean the Optionee is disabled as determined under Section 409A(a)(2)(C) ofthe Code.

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## (i)            “EBITDA” shall mean,for any applicable period, “Consolidated EBITDA” as defined in the CreditAgreement for such period, excluding forward cost savings as determined by theBoard.

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## (j)            “FairMarket Value” has the meaning specified in the Plan, except as expressly setforth herein.

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## (k)           “FirstPerformance-Based Tranche” has the meaning specified in Section 2 of thisAgreement.

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## (l)        “FreeCash Flow” shall mean, for any applicable period, EBITDA (as defined above) forsuch period minus capital expenditures during such period and increased ordecreased, as the case may be, by the change in Operating Working Capitalduring such period.

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## (m)          “GoodReason” shall mean a material reduction in the Optionee’s compensation belowthe amount of compensation in effect on the date of this Agreement which is notcured within thirty (30) days following the Company’s or its subsidiary’s, asapplicable, receipt of written notice from such Optionee describing the eventconstituting Good Reason.

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

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

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## (p)           “OperatingWorking Capital” as of any date shall mean the difference between currentassets (excluding cash and investments, interest and tax accounts) and currentliabilities (excluding debt, interest and tax accounts).  Accrued liabilities related to restructuringcharges added back for the purposes of computing EBITDA are also excluded fromcurrent liabilities to compute Operating Working Capital.

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## (q)           “Option”has the meaning specified in Section 2 of this Agreement.

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## (r)            “OptionPrice” has the meaning specified in Section 2 of this Agreement.

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## (s)           “OptionShares” has the meaning specified in Section 2 of this Agreement.

 

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## (t)             “SecondPerformance-Based Tranche” has the meaning specified in Section 2 of thisAgreement.

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## (u)           “StockholdersAgreement” shall mean that certain stockholders agreement applicable to theOptionee, as amended from time to time.

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## (v)           “Terminationfor Cause” shall mean the termination by the Company of Optionee’s employmentwith the Company as a result of (i) the Optionee’s willful and continuedfailure to substantially perform Optionee’s duties (other than any such failureresulting from the Optionee’s Disability or any such failure subsequent to theOptionee being delivered notice of the Company’s intent to terminate theOptionee’s employment without Cause), (ii) conviction of, or a plea ofnolo contendere to, (A) a felony (other than traffic-related) under thelaws of the United States or any state thereof or any similar criminal act in ajurisdiction outside the United States or (B) a crime involving moralturpitude that could be injurious to the Company or its reputation, (iii) theOptionee’s willful malfeasance or willful misconduct which is materially anddemonstrably injurious to the Company, or (iv) any act of fraud by theOptionee in the performance of the Optionee’s duties.

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# 2.**             Grant of StockOption**.  Subject to andupon the terms, conditions, and restrictions set forth in this Agreement and inthe Plan, the Company has granted to Optionee an option (the “Option”) topurchase **[      ]**shares of the Company’s common stock (the “Option Shares”) at a price (the “OptionPrice”) of $**[      ]**per share, which is the Fair Market Value per share on the Effective Date.  The Option may be exercised from time to timein accordance with the terms of this Agreement. Subject to adjustment as hereinafter provided, (a) [**        **] of theOption Shares constitute the “Time-Based Tranche”, (b) [**       **] of the OptionShares constitute the First Performance-Based Tranche, and (c) [      ]of the Option Shares constitute the Second Performance-Based Tranche.

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# 3.**             Term of Option**.  The term of the Option shall commence on theEffective Date and, unless earlier terminated in accordance with Section 7hereof, shall expire ten (10) years from the Effective Date.

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# 4.**             Right to Exercise**.  Unless terminated as hereinafter provided,the Option shall become exercisable only as follows:

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## (a)           TheOption Shares in the Time-Based Tranche shall become vested and exercisable inaccordance with the schedule set forth immediately below, provided the Optioneeremains in the continuous employ of the Company, any Subsidiary or Affiliate asof each such date.

 
| **Vesting Date** | ** ** | **Percentage of Time-Based Tranche Option  Shares that Vest** | ** ** |
|-----------------------|------------|---------------------------------------------------------------------------------------------|------------|
| March 7,  2010   |       | 25                                                                                          | %          |
| March 7,  2011   |       | 20                                                                                          | %          |
| March 7,  2012   |       | 18.33                                                                                       | %          |
| March 7,  2013   |       | 18.33                                                                                       | %          |
| March 7,  2014   |       | 18.34                                                                                       | %          |

 

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## (b)           TheOption Shares in the First Performance-Based Tranche shall become vested andexercisable as of the date of the certification of the satisfaction of eachsuch Annual Performance Target in accordance with the schedule set forthimmediately below:

 
| **Vesting Date if First Performance-Based  Target is Satisfied** | ** ** | **Percentage of First Performance-Based  Tranche Option Shares that Vest** |
|------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------|
| December 31,  2009                                                                        |       | 25% times Performance Percentage                                                                              |
| December 31,  2010                                                                        |       | 20% times Performance Percentage                                                                              |
| December 31,  2011                                                                        |       | 18.33% times Performance Percentage                                                                           |
| December 31,  2012                                                                        |       | 18.33% times Performance Percentage                                                                           |
| December 31,  2013                                                                        |       | 18.33% times Performance Percentage                                                                           |

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## For purposes of the foregoing schedule, thePerformance Percentage is the weighted average of the EBITDA Factor, weightedat seventy percent (70%), and the Free Cash Flow Factor, weighted at thirtypercent (30%), where the EBITDA Factor and Free Cash Flow Factor are determinedas follows:

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## (i) The EBITDAFactor.  The EBITDA Factor is determinedin accordance with the schedule set forth on Attachment A.  If the actual EBITDA achieved is less thanthe EBITDA Base Case for the applicable year set forth on Attachment A, thenthe EBITDA Factor is zero percent (0%). If the actual EBITDA achieved is equal to or exceeds the EBITDA BaseCase for the applicable year as set forth on Attachment A, then the EBITDAFactor shall equal eighty percent (80%) plus an additional percentage betweenzero percent (0%) and twenty percent (20%) determined in linear proportion tothe portion of the difference between the EBITDA Base Case and the EBITDA Targetthat is actually achieved.  For example,for 2009 the EBITDA Base Case is $            million and the EBIDTA Target is $           million.  If the actual EBITDA achievedfor 2009 was $           million, then the EBITDA Factor would equal eighty percent (80%) for achievingthe EBITDA Base Case plus ten percent (10%) because half of the differencebetween the EBITDA Base Case and the EBITDA Target was actually achieved.  Accordingly, the EBITDA Factor in thisexample would be ninety percent (90%).

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## (ii) Free Cash FlowFactor.  The Free Cash Flow Factor isdetermined in the same manner as the EBITDA Factor as described in Section (c)(i) aboveusing the Free Cash Flow Base Case and Free Cash Flow Target set forth onAttachment A**.**

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## Any Option Shares in the FirstPerformance-Based Tranche which the Optionee does not earn the right toexercise at any of the dates set forth above shall remain capable of vesting atany of the later dates set forth above in the following manner.  If the Option Shares in the FirstPerformance-Based Tranche on any of the dates set forth above (the “CurrentDate”) vest in any percentage between 80% and 100% on such date (the “CurrentVesting Percentage”), then the Option Shares in the First Performance-BasedTranche that were subject to vesting at any earlier date set forth above thatdid not vest at such earlier date in the same or a greater percentage as theCurrent Vesting Percentage shall vest and be exercisable on the Current Date atthe same percentage as the Current Vesting Percentage.  Any Option Shares in the First

 

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## Performance-Based Tranche that have notvested by the latest date set forth above shall thereupon expire and terminate.

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## (c)           TheOption Shares in the Second Performance-Based Tranche shall become vested andexercisable 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 ofsome or all of its holdings of common stock in the Company; (ii) Blackstoneshall have realized an IRR on its aggregate investment in the common stock ofthe Company of at least 22.5%; and (iii) Blackstone shall have realized aMOIC in the Company of at least 2.5 times.

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## (d)           Notwithstandingthe foregoing, (i) the Option Shares of the Time-Based Tranche grantedhereby shall become immediately exercisable upon the occurrence of a Change inControl if Optionee remains in the continuous employ of the Company or anySubsidiary until the date of the consummation of such Change in Control, and (ii) theOption Shares of the First Performance-Based Tranche for the year in which suchChange of Control is consummated and for any subsequent year in Attachment Ashall become immediately exercisable if the Optionee remains in the continuousemploy of the Company or any Subsidiary until the date of consummation of suchChange in Control.

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## (e) Notwithstandinganything herein to the contrary, if the Optionee is on an approved leave ofabsence, as provided in the last paragraph of Section 7 hereof, theOptionee will be considered as still in continuous employ of the Company, aSubsidiary or an Affiliate for purposes of this Plan.

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## (f) The Optionee shall beentitled to the privileges of ownership with respect to Option shares purchasedand delivered to Optionee upon the exercise of all or part of this Option,subject to Section 8 hereof.

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## (g) All of the financialfactors utilized to establish the vesting of the Option Shares in the FirstPerformance-Based Tranche shall be determined by the Board based on an analysisprovided by the Company’s management and any such determination shall be finaland binding on Optionee for all purposes under this Agreement.

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# 5.**             OptionNontransferable**.  TheOptionee may not transfer or assign all or any part of the Option other than bywill or by the laws of descent and distribution.  This Option may be exercised, during thelifetime of the Optionee, only by the Optionee, or in the event of the Optionee’slegal incapacity, by the Optionee’s guardian or legal representative acting onbehalf of the Optionee in a fiduciary capacity under state law and courtsupervision.  Notwithstanding anythingherein to the contrary, the Optionee may transfer or assign all or any part ofthe Option to “family members” (as defined in the General Instructions to Form S-8of the Securities Act of 1933) or trusts, partnerships or similar entities forthe benefit of such family members, for estate planning purposes or inconnection with the disposition of Optionee’s estate.

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# 6.**             Notice ofExercise; Payment**.

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## (a)           Tothe extent then exercisable, the Option may be exercised in whole or in part bywritten notice to the Company stating the number of Option Shares for which theOption is being exercised and the intended manner of payment.  The date of such notice shall be the exercisedate.  Payment equal to the aggregateOption Price of the Option Shares being purchased pursuant to an exercise ofthe Option must be tendered in full with the notice of

 

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## exercise to the Company in one or a combination of the followingmethods as specified by the Optionee in the notice of exercise:  (i) cash in the form of currency orcheck or by wire transfer as directed by the Company, (ii) solely following an IPO in Sharesotherwise being traded on an established securities market, through thesurrender to the Company of Shares owned by the Optionee for at least sixmonths as valued at their Fair Market Value on the date of exercise, (iii) throughnet exercise, using Shares to be acquired upon exercise of the Option, suchShares being valued at their Fair Market Value (which for such purpose shallhave the meaning set forth in the Stockholders Agreement) on the date ofexercise, or (iv) through such other form of consideration as is deemedacceptable by the Board.

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## (b)           Assoon as practicable upon the Company’s receipt of the Optionee’s notice ofexercise and payment, the Company shall direct the due issuance of the OptionShares so purchased.

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## (c)           Asa further condition precedent to the exercise of this Option in whole or inpart, the Optionee shall comply with all regulations and the requirements ofany regulatory authority having control of, or supervision over, the issuanceof the shares of common stock and in connection therewith shall execute anydocuments which the Board shall in its sole discretion deem necessary oradvisable.

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# 7.**             Termination ofAgreement**.  The Agreementand the Option granted hereby shall terminate automatically and without furthernotice on the earliest of the following dates:

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## (a)           Afterthe Optionee’s termination due to the Optionee’s death or Disability, allunvested Time-Based Options will be forfeited immediately and terminate and allvested Options from any Tranche shall remain exercisable until the lesser of (i) one(1) year following the Optionee’s date of termination or (ii) theremaining term of the Option; provided, however, that it shall be a conditionto the exercise of the Option in the event of the Optionee’s death that thePerson exercising the Option shall (i) have agreed in a form satisfactoryto the Company to be bound by the provisions of this Agreement and theStockholders Agreement and (ii) comply with all regulations and therequirements of any regulatory authority having control of, or supervisionover, the issuance of the shares of common stock and in connectiontherewith shall execute any documents which the Board shall in its solediscretion deem necessary or advisable. Unvested Options from the First and Second Performance-Based Tranchesshall remain outstanding for the twelve (12) month period following the date ofsuch termination by reason of death or Disability.  To the extent applicable performance targetsare achieved, or a Change in Control occurs, within such twelve (12) monthperiod following the date of termination due to the Optionee’s death orDisability (each, a “Post-Termination Vesting Event”), the appropriate numberof Options will vest as of such Post-Termination Vesting Event, and remainexercisable for twelve (12) months following such Post-Termination VestingEvent (but not beyond the remaining term of the Option).  On the twelve (12) month anniversary of thedate of termination of employment by reason of death or Disability, allremaining unvested options from the First and Second Performance-Based Trancheswill be forfeited;

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## (b)           Afterthe Optionee’s termination by the Company without Cause or by the Optionee forGood Reason, all unvested Time-Based Options will be forfeited immediately andterminate and all vested Options from any Tranche shall remain exercisableuntil the lesser of (i) ninety (90) calendar days following the Optionee’sdate of termination or (ii) the remaining term of the Option.  Unvested options from the First and SecondPerformance-Based Tranches shall remain outstanding for the twelve (12) monthperiod following the date of such termination by reason of termination by theCompany without Cause or by the Optionee for

 

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## Good Reason.  To the extent aPost-Termination Vesting Event occurs within such twelve (12) month period, theappropriate number of Options will vest as of such Post-Termination VestingEvent, and remain exercisable for ninety (90) calendar days following suchPost-Termination Vesting Event (but not beyond the remaining term of theOption).  On the twelve (12) monthanniversary of the date of termination of employment by reason of terminationby the Company without Cause or by the Executive with Good Reason, allremaining unvested options from the First and Second Performance-Based Trancheswill be forfeited;

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## (c)           Thedate of the Optionee’s Termination for Cause, upon which all vested andunvested Options will be forfeited immediately and terminate;

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## (d)           Afterthe Optionee’s termination without Good Reason, all unvested options will beforfeited immediately and terminate and all vested Options from any Trancheshall remain exercisable until the lesser of (i) ninety (90) calendar daysfollowing the Optionee’s date of termination or (ii) the remaining term ofthe Option; or

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## (e)           Ten(10) years from the Effective Date.

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Notwithstanding the foregoing, in all termination events other than atermination of the Optionee’s employment for Cause, if the last day to exercisevested Options occurs after the date on which the Company’s common stock ispublicly traded on a national stock exchange and during a lock-up period orsecurities law blackout period, the otherwise applicable post-terminationOption exercise period shall continue, but not beyond the remaining term of theOption, until thirty (30) calendar days after the first day when theterminating Optionee is no longer precluded from selling stock acquired uponexercise of Options for either of such reasons. Notwithstanding anything to the contrary herein, nothing herein shallprohibit the Optionee from exercising his or her vested Options through netexercise, using Shares to be acquired upon exercise of the Option, during anylock-up or securities law blackout period to the extent not prohibited by law.

 

In the event that the Optionee’s employment is terminated in thecircumstances described in Section 7(c) hereof, this Agreement shallterminate at the time of such termination notwithstanding any other provisionof this Agreement and the Optionee’s Option will cease to be exercisable to theextent exercisable as of such termination and will not be or become exercisableafter such termination.  The Optioneeshall be deemed to be an employee of the Company or any Subsidiary if on aleave of absence approved in writing by the Board or the Chief ExecutiveOfficer of the Company to the extent consistent with Section 409A of theCode.

 

# 8.**             StockholdersAgreement**.  The Optioneeagrees that any Option Shares that the Optionee receives pursuant to thisAgreement or under the Plan are subject to the terms and conditions set forthin the Stockholders Agreement.

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# 9.**            ****No Employment Contract**.  Nothing contained in this Agreement shall (a) conferupon the Optionee any right to be employed by or remain employed by the Companyor any Subsidiary, or (b) limit or affect in any manner the right of theCompany or any Subsidiary to terminate the employment or adjust thecompensation of the Optionee.

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# 10.**          ****Dividend Equivalents**.  Upon the payment of any ordinary orextraordinary cash dividend (or similar distributions) to holders of Companycommon stock, the Optionee will be credited with dividend equivalent rightswith respect to the Options as follows. Dividend equivalents relating to vested Options shall be paid to theOptionee in cash at the same time dividends are paid to holders of Companycommon stock.  Dividend equivalentsrelating to

 

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# unvestedOptions will be credited to a notional account maintained on the books of theCompany for the benefit of the Optionee, which account shall not accrueinterest.  The Optionee will becomevested in such account at the same time as the Options to which the dividendequivalents relate vest and become exercisable, and such vested amounts shallbe payable in cash upon the applicable vesting date, and in no event later than21⁄2 months following the end of the calendar year in which the applicablevesting date occurs.  Unvested amountsheld in such account shall be forfeited by the Optionee upon the date of anytermination of employment; provided, however, that if such termination resultsin the continuation of unvested Options from the First and SecondPerformance-Based Tranches, as provided in Sections 7(a) and 7(b), above,forfeiture of dividend equivalents shall be delayed until the twelve (12) monthanniversary of such termination, and to the extent that any Options vest duringsuch twelve (12) month period, such related dividend equivalents shall alsovest and be paid to the Optionee in cash on the twelve (12) month anniversaryof such termination or, if the Options are forfeited, such related dividendequivalents shall also be forfeited.

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# 11.**          ****Taxes and Withholding**.  The Company or any Subsidiary may withhold,or require the Optionee to remit to the Company or any Subsidiary, an amountsufficient to satisfy federal, state, local or foreign taxes (including theOptionee’s FICA obligation) in connection with any payment made or benefitrealized by the Optionee or other person under this Agreement or otherwise, andif the amounts available to the Company or any Subsidiary for such withholdingare insufficient, it shall be a condition to the receipt of such payment or therealization of such benefit that Optionee or such other person makearrangements satisfactory to the Company or any Subsidiary for payment of thebalance of such taxes required to be withheld. The Optionee may elect to have such withholding obligation satisfied by surrenderingto the Company or any Subsidiary a portion of the Option Shares that are issued ortransferred to the Optionee upon the exercise of an Option (but only to theextent of the minimum withholding required by law), and the Option Shares sosurrendered by Optionee shall be credited against any such withholdingobligation at the Fair Market Value (which for such purpose shall havethe meaning set forth in the Stockholders Agreement) of such Shares on the date of such surrender.

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# 12.**           Compliance with Law**.  The Company shall make reasonable efforts tocomply with all applicable federal and state securities laws; provided,however, that notwithstanding any other provision of this Agreement, the Optionshall not be exercisable if the exercise thereof would result in a violation ofany such law.

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# 13.**           Adjustments**.

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## (a)           TheBoard shall make or provide for such substitution or adjustments in the numberof Option Shares covered by this Option, in the Option Price applicable to suchOption, and in the kind of shares covered thereby and/or such other equitablesubstitution or adjustments as the Board may determine to prevent dilution orenlargement of the Optionee’s rights that otherwise would result from (i) anystock dividend, extraordinary cash-dividend, stock split, combination ofshares, recapitalization, or other change in the capital structure of theCompany, (ii) any merger, consolidation, spin-off, split-off, spin-out,split-up, reclassification, reorganization, partial or complete liquidation, orother distribution of assets or issuance of rights or warrants to purchasesecurities, or (iii) any other corporate transaction or event having aneffect similar to any of the foregoing. In the case of a Change in Control, such substitutions and adjustmentsinclude, without limitation, canceling any and all Options in exchange for cashpayments equal to the excess, if any, of the value of the consideration paid toa shareholder of an Option Share over the Option Price per share subject tosuch Option in connection with such an adjustment event.

 

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## (b)           Tothe extent that any equity securities of any member of the Company’s controlledgroup become publicly traded, at such time all Options shall be exchanged, in amanner consistent with Sections 409A and 424 of the Code, for options with thesame intrinsic value in the publicly-traded entity, and all Shares shall beexchanged for shares of common stock with the same aggregate value of thepublicly-traded entity.

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# 14.**           Relation to OtherBenefits**.  Any economic orother benefit to Optionee under this Agreement shall not be taken into accountin determining any benefits to which Optionee may be entitled under anyprofit-sharing, retirement or other benefit or compensation plan maintained bythe Company or any Subsidiary and shall not affect the amount of any lifeinsurance coverage available to any beneficiary under any life insurance plancovering employees of the Company or any Subsidiary.

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# 15.**           Amendments**.  Any amendment to the Plan shall be deemed tobe an amendment to this Agreement to the extent that the amendment isapplicable hereto.

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# 16.**           Severability**.  If one or more of the provisions of thisAgreement is invalidated for any reason by a court of competent jurisdiction,any provision so invalidated shall be deemed to be separable from the otherprovisions hereof, and the remaining provisions hereof shall continue to bevalid and fully enforceable.

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# 17.**           Relation to Plan**.  This Agreement is subject to the terms andconditions of the Plan.  In the event ofany inconsistent provisions between this Agreement and the Plan, the Plan shallgovern.  The Board acting pursuant to thePlan, as constituted from time to time, shall, except as expressly providedotherwise herein, have the right to determine any questions which arise inconnection with the Option or its exercise.

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# 18.**           Successors andAssigns**.  The provisionsof this Agreement shall inure to the benefit of, and be binding upon, thesuccessors, administrators, heirs, legal representatives and assigns ofOptionee, and the successors and assigns of the Company.

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# 19.**           Governing Law**.  The interpretation, performance, andenforcement of this Agreement shall be governed by the laws of the State of NewYork, without giving effect to the principles of conflict of laws thereof andall parties, including their successors and assigns, consent to thejurisdiction of the state and federal courts of New York.

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# 20.**           Prior Agreement**.  As of the Effective Date, this Agreementsupersedes any and all prior and/or contemporaneous agreements, either oral orin writing, between the parties hereto, or between either or both of theparties hereto and the Company, with respect to the subject matter hereof.  Each party to this Agreement acknowledgesthat no representations, inducements, promises, or other agreements, orally orotherwise, have been made by any party, or anyone acting on behalf of anyparty, pertaining to the subject matter hereof, which are not embodied herein,and that no prior and/or contemporaneous agreement, statement or promisepertaining to the subject matter hereof that is not contained in this Agreementshall be valid or binding on either party.

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# 21.**           Notices**.  For all purposes of this Agreement, allcommunications, including without limitation notices, consents, requests orapprovals, required or permitted to be given hereunder will be in writing andwill be deemed to have been duly given when hand delivered or dispatched byelectronic facsimile transmission (with receipt thereof confirmed), or fivebusiness days after having been mailed by United States registered or certifiedmail, return receipt requested, postage prepaid, or three business days afterhaving been sent by a nationally

 

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# recognized overnightcourier service such as Federal Express, UPS, or Purolator, addressed to theCompany (to the attention of the Secretary of the Company) at its principalexecutive offices and to Optionee at his principal residence, or to such otheraddress as any party may have furnished to the other in writing and inaccordance herewith, except that notices of changes of address shall beeffective only upon receipt.

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# 22.**           Counterparts**.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same agreement.

 

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IN WITNESS WHEREOF, the Company has causedthis Agreement to be executed on its behalf by its duly authorized officer andthe Optionee has executed this Agreement, as of the day and year first abovewritten.

 

 
|   | **DJO INCORPORATED:**                                   |
|--------|---------------------------------------------------------|
|   |                                                    |
|   |                                                    |
|   | DONALD ROBERTS                                          |
|   | Executive Vice President, General Counsel and Secretary |

 

 

I hereby agreeto be bound by the terms of the Plan, this Agreement and the Stockholder’sAgreement.  I hereby further agree thatall the decisions and determinations of the Board or an officer as provided inthis Agreement shall be final and binding.

 

 
|   | **OPTIONEE:** |
|--------|---------------|
|   |          |
|   |          |

 

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