Exhibit
10.2


 


FIRST AMENDMENT TO
MANAGEMENT STOCKHOLDERS AGREEMENT


 


 


THIS
FIRST AMENDMENT TO MANAGEMENT STOCKHOLDERS AGREEMENT (this “Amendment”)
is made as of the 20th day of November, 2007, by and among REABLE THERAPEUTICS, INC. (f/k/a, Encore Medical Corporation),
a Delaware corporation which, following the consummation of certain
transactions set forth in the Agreement and Plan of Merger, dated July 15,
2007, by and between ReAble Therapeutics, Inc. and certain other parties,
intends to change its name to “DJO Incorporated” (the “Company”), BLACKSTONE CAPITAL PARTNERS V L.P., a Cayman Islands limited
partnership (“BCP V”), BLACKSTONE FAMILY INVESTMENT PARTNERSHIP V L.P., a Cayman
Islands limited partnership (“BFIP V”),
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP V-A L.P.,
a Cayman Islands limited partnership (“BFIP
V-A”), BLACKSTONE PARTICIPATION PARTNERSHIP V L.P.,
a Cayman Islands limited partnership (“BPP
V”) and, together with BCP V, BFIP V, BFIP V-A and any of Blackstone
L.P. or its Affiliates that may from time to time hold Sponsor Interests,
collectively, the “Sponsors”), GRAND SLAM HOLDINGS, LLC, a Delaware limited liability
company (“Holdco”), and the
parties identified on the signature pages to the Management Stockholders
Agreement as Management Stockholders and the transferees of such parties (and
their respective transferees) identified on the signature pages in any
supplementary agreements to the Management Stockholders Agreement (and,
together with the Company, the Sponsors and Holdco, the “Parties”).


 


RECITALS:


 


WHEREAS, the Parties are parties to a certain
Management Stockholders Agreement dated November 3, 2006 (together with all
attachments thereto, the “Management Stockholders Agreement”); and


 


WHEREAS, the Parties desire to amend the Management
Stockholders Agreement in order to update the names of certain Parties and make
certain other minor administrative changes that will not materially affect on
the rights of the Parties; and


 


WHEREAS, provided the rights of certain Parties are
not materially affected, the Management Stockholder’ Agreement may be amended
by a written instrument signed by (i) the Company and (ii) the Parties which own, on a fully diluted basis,
shares of the Company’s common stock representing at least a majority of the
voting power represented by all of the Company’s common stock outstanding on a
fully diluted basis and owned by all Parties (collectively, the “Necessary
Parties”); and


 


WHEREAS, the Necessary Parties have duly executed this
Amendment on the signature pages attached hereto.


 


NOW, THEREFORE, in consideration of the foregoing
recitals which are incorporated by reference herein, and other good and
valuable consideration, the receipt and sufficiency of 




 


 


 

















 


which are hereby acknowledged, and intending to be legally bound
hereby, the Necessary Parties agree as follows:


 


1.  From and after the date hereof, every
reference in the Management Stockholders Agreement to “Encore Medical
Corporation” and the “Company” shall be and be deemed to be a reference to “DJO
Incorporated”, except that the references to “Encore Medical Corporation” in
the Management Stockholders Agreement which are a result of Sections 2 and 4 of
this Amendment shall not be affected.


 


2.  From and after the date hereof, the
paragraph preceding the Recitals of the Management Stockholders Agreement shall
be amended by adding the following parenthetical after “DJO Incorporated”
(giving effect to Section 1 of this Amendment):


 


(f/k/a Encore Medical Corporation
and, prior to the consummation of the transactions described in clause (ii) of
the definition of “Merger” set forth in Section 1 of this Agreement, f/k/a
ReAble Therapeutics, Inc.)


 


3.  From and after the date hereof, each and
every instance of:


 


                a.  “Blackstone Encore Stockholders” shall be amended to read “Blackstone DJO
Stockholders”;


 


                b.  “Drag-Along Selling Blackstone Encore Stockholder” shall be amended to read “Drag-Along Selling Blackstone DJO Stockholder”; and


 


                c.  “Tag-Along Selling Blackstone Encore Stockholder” shall be amended to read “Tag-Along Selling Blackstone DJO Stockholder”.


 


4.  From and after the date hereof, the
definition of “Merger” in the Management Stockholders Agreement shall be
amended to read as follows:


 


“Merger” means, as may be
applicable in each particular case, (i) the transactions contemplated by the
Agreement and Plan of Merger, dated as of June 30, 2006, by and among Holdco,
Grand Slam Acquisition Corp. and Encore Medical Corporation and (ii) the
transactions contemplated by the Agreement and Plan of Merger, dated as of July
15, 2007, by and among the Company, Reaction Acquisition Merger Sub and DJO
Incorporated.


 


5.  From and after the date hereof, the definition of “Cause”
in the Management Stockholders Agreement shall be amended to read as follows:


 


“Cause” means, with respect to
any Management Stockholder, the termination by the Company of such 






 


 

















 


Management
Stockholder’s employment with the Company for “cause”, as defined in the
employment agreement (“Employment Agreement”)
between the Company and such Management Stockholder, or, if there is no
employment agreement, the termination by the Company of such Management
Stockholder’s employment as a result of: 
(i) the commission by the Management Stockholder of an act of gross
negligence, willful misconduct, fraud, embezzlement, misappropriation or breach
of fiduciary duty against the Company or any of its Affiliates, or the
conviction of the Management Stockholder by a court of competent jurisdiction
of, or a plea of guilty or nolo contendere to, any felony or any crime
involving moral turpitude or any crime which reasonably could negatively affect
the reputation of the Company, or the Management Stockholder’s ability to
perform the duties required of his employment; (ii) the commission by the
Management Stockholder of a material breach of any of the covenants in this
Agreement, which breach has not been remedied within thirty (30) days of the
delivery to the Management Stockholder by the Board of Directors of written
notice of the facts constituting the breach; or (iii) the continued habitual
and willful neglect by the Management Stockholder of his or her obligations and
duties as an employee of the Company or any of its Subsidiaries after receiving
written notice from the Company or any Blackstone DJO Stockholder that such
neglect constitutes “Cause” under this Agreement and failing to cure such
neglect within thirty (30) calendar days of receipt of such notice.


 


6.  From and after the date
hereof, Sections 7(a)(i) and 7(a)(ii) of the Management Stockholders Agreement
shall be amended in their entirety to read as follows:


 


(i)           In the case of termination of
employment of such Call Option Management Stockholder for Cause (or a voluntary
termination of employment of such Call Option Management Stockholder if such termination
would have constituted a termination for Cause if it would have been initiated
by the Company), the consideration will be the lesser of (A) the purchase price
of such Callable Shares paid by the Call Option Management Stockholder; provided,
however, that in the case of any Callable Shares acquired by the Call
Option Management Stockholder, pursuant to a Rollover Option, the price paid
therefor shall be deemed to be the price paid by the applicable 




 


 

















 


Blackstone
DJO Stockholder for each share of Common Stock purchased by it in connection
with the Merger, or, if such Shares were granted to such Call Option Management
Stockholder in exchange for services, the fair market value of such services at
the time of grant, and (B) Fair Market Value of such Callable Shares on the
Exercise Date or the Sponsor Exercise Date, as the case may be.


 


(ii)          In the case of any other termination
of such Call Option Management Stockholder, the consideration will be Fair
Market Value of such Callable Shares on the Exercise Date or the Sponsor
Exercise Date, as the case may be.


 


7.  This Amendment may be executed in
counterparts, as may be deemed necessary and convenient by the parties hereto,
each of which counterpart, when so executed and delivered, shall be deemed an
original, but all of such counterparts shall constitute but one and the same
instrument.


 


8.  This Amendment shall be construed in
accordance with and governed by the laws of the State of New York.


 


[Signature Pages Follow]


 


 


 

















 


IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this First Amendment To Management Stockholders Agreement on the date
first written above.


 


	
   

  	
  BLACKSTONE CAPITAL PARTNERS V L.P.

  
	
   

  	
   

  
	
   

  	
  By: Blackstone Management
  Associates V 

  L.L.C., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chinh E. Chu

  	
   

  
	
   

  	
   

  	
  Name:Chinh E. Chu

  
	
   

  	
   

  	
  Title: Authorized Person

  
	
   

  	
   

  
	
   

  	
  BLACKSTONE FAMILY INVESTMENT 

  PARTNERSHIP V L.P.

  
	
   

  	
   

  
	
   

  	
  By: Blackstone Management
  Associates V 

  L.L.C., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chinh E. Chu

  	
   

  
	
   

  	
   

  	
  Name:Chinh E. Chu

  
	
   

  	
   

  	
  Title: Authorized Person

  
	
   

  	
   

  
	
   

  	
  BLACKSTONE FAMILY INVESTMENT 

  PARTNERSHIP V-A L.P.

  
	
   

  	
   

  
	
   

  	
  By: Blackstone Management Associates V 

  L.L.C., its
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chinh E. Chu

  	
   

  
	
   

  	
   

  	
  Name:Chinh E. Chu

  
	
   

  	
   

  	
  Title: Authorized Person

  
	
   

  	
   

  
	
   

  	
  BLACKSTONE PARTICIPATION 

  PARTNERSHIP V L.P.

  
	
   

  	
   

  
	
   

  	
  By: Blackstone Management
  Associates V L.L.C., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chinh E. Chu

  	
   

  
	
   

  	
   

  	
  Name:Chinh E. Chu

  
	
   

  	
   

  	
  Title: Authorized Person

  
	
   

  	
   

  
	
   

  	
  GRAND SLAM HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chinh E. Chu

  	
   

  
	
   

  	
   

  	
  Name:Chinh E. Chu

  
	
   

  	
   

  	
  Title: Authorized Person

  



 


[Signature Page 1 of 2 to First
Amendment To Management Stockholders Agreement]


 


 


 

















 


	
   

  	
  REABLE THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry L. Zimmerman

  	
   

  
	
   

  	
   

  	
  Name:Harry L. Zimmerman

  
	
   

  	
   

  	
  Title: Executive Vice President, General Counsel,
  Secretary and Assistant Treasurer

  



 


[Signature Page 2 of 2 to First
Amendment To Management Stockholders Agreement]