**Exhibit 10.10**

 

**DJO INCORPORATED**

 

**INCENTIVE STOCK OPTION ROLLOVERAGREEMENT**

 

This AGREEMENT (this “Agreement”), dated as of November 20,2007 (the “Grant Date”), is made by and between ReAble Therapeutics, Inc.,a Delaware corporation which, following the consummation of certaintransactions (the “Transactions”) set forth in the Agreement and Plan ofMerger, dated July 15, 2007, intends to change its name to “DJOIncorporated” (the “Company”), and **                                    **(the “Optionee”).  The Optionee holdscertain incentive stock options to purchase common shares of DJO Incorporated(as constituted prior to the Transactions) (the “DJO Options”), which theOptionee desires exchange for an option to purchase shares of the Company’scommon stock of equal value.  As acondition to the Company granting the Option (as defined in Section 1below) to the Optionee, the Optionee has agreed to release the Optionee’sinterest in, and rights with respect to, the DJO Options.  By accepting the Option, the Optionee agreesand understands that the Option is subject to the terms and conditions setforth in this Agreement and the Company’s 2007 Incentive Stock Plan (the “Plan”).

 

1.                                       **Grant of Option**. Subject to the terms and conditions set forth in this Agreement and inthe Plan, the Company hereby grants to the Grantee an Incentive Stock Option(the “Option”) to purchase shares of the Company’s common stock (the “Shares”).  Set forth on Exhibit A is thenumber of shares subject to the Option and the per share exercise price of suchshares.

 

2.                                       **Vesting and Exercisability**. The Option shall be fully vested and exercisable as of the Date ofGrant.

 

3.                                       **Term of Option**.

 

(a)                                  The term applicable to each Option Shareis set forth on Exhibit A, unless it is terminated at an earlierdate pursuant to the provisions of this Agreement or the Plan.

 

(b)                                 Unless a later termination date isprovided for in a Company-sponsored plan, policy or arrangement, or anyagreement to which the Company is a party, the Option shall automaticallyterminate upon the happening of the first of the following events:

 

(i)                                     If the Grantee’s termination ofemployment is for Cause (as defined in Section 7(i) of the Plan), theOption shall expire and be deemed cancelled and forfeited as of suchtermination date.

 

(ii)                                  If the Grantee’s termination ofemployment is due to his Disability or death, the Option as of the date of suchtermination shall remain exercisable for a period of one (1) year (but notbeyond the term of the Option) following such termination of employment, andshall thereafter be deemed canceled and forfeited; and

 

(iii)                               If the Grantee’s termination ofemployment is for any reason other than those set forth in subparagraphs (ii) and(iii) above, the Option as of the date of such termination shall remainexercisable for a period of ninety (90) days (but not beyond the 

 

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term of the Option)following such termination of employment, and shall thereafter be deemedcanceled and forfeited.

 

Notwithstandinganything herein to the contrary, in no event shall any shares subject to theOption be exercisable after their applicable term has expired.

 

4.                                       **Exercise Procedures**.

 

(a)                                  Subject to the provisions of Sections 2and 3 above, the Grantee may exercise part or all of the exercisable Option bygiving the Company written notice of intent to exercise in the manner providedin this Agreement, specifying the number of Shares as to which the Option is tobe exercised.  At such time as the Boardshall determine, the Grantee shall pay the exercise price (i) in cash orby check, (ii) by payment through a broker in accordance with procedurespermitted by Regulation T of the Federal Reserve Board, or (iii) by suchother method as the Company may approve. The Company may impose from time to time such limitations as it deemsappropriate on the use of Shares of the Company to exercise the Option.

 

(b)                                 The obligation of the Company to deliverShares upon exercise of the Option shall be subject to all applicable laws,rules, and regulations and such approvals by governmental agencies as may bedeemed appropriate by the Company, including such actions as Company counselshall deem necessary or appropriate to comply with relevant securities laws andregulations.  The Company may requirethat the Grantee (or other person exercising the Option after the Grantee’sdeath) represent that the Grantee is purchasing Shares for the Grantee’s ownaccount and not with a view to or for sale in connection with any distributionof the Shares, or such other representation as the Company deems appropriate.

 

(c)                                  All obligations of the Company under thisAgreement shall be subject to the rights of the Company as set forth in thePlan to withhold amounts required to be withheld for any taxes, ifapplicable.  Subject to Board approval,the Grantee may elect to satisfy any tax withholding obligation of the Employerwith respect to the Option by having Shares withheld up to an amount that doesnot exceed the minimum applicable withholding tax rate for federal (includingFICA), state and local tax liabilities.

 

5.                                       **Designation as IncentiveStock Option**.

 

(a)                                  This Option is designated an incentivestock option under Section 422 of the Internal Revenue Code of 1986, asamended (the “Code”).  If the aggregatefair market value of the stock on the date of the grant with respect to whichincentive stock options are exercisable for the first time by the Granteeduring any calendar year, under the Plan or any other stock option plan of theCompany or a parent or subsidiary, exceeds one hundred thousand dollars($100,000), then the Option, as to the excess, shall be treated as anonqualified stock option that does not meet the requirements of Section 422.  If and to the extent that the Option fails toqualify as an incentive stock option under the Code, the Option shall remainoutstanding according to its terms as a nonqualified stock option.

 

(b)                                 The Grantee understands that favorableincentive stock option tax treatment is available only if the Option isexercised while the Grantee is an employee of the Company or a parent orsubsidiary of the Company or within a period of time specified in the Codeafter the 

 

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Grantee ceases tobe an employee.  The Grantee understandsthat the Grantee is responsible for the income tax consequences of the Option,and, among other tax consequences, the Grantee understands that he or she maybe subject to the alternative minimum tax under the Code in the year in whichthe Option is exercised.  The Granteewill consult with his or her tax adviser regarding the tax consequences of theOption.

 

(c)                              The Grantee agrees that the Grantee shallimmediately notify the Company in writing if the Grantee sells or otherwisedisposes of any Shares acquired upon the exercise of the Option and such saleor other disposition occurs on or before the later of (i) two (2) yearsafter the Date of Grant or (ii) one (1) year after the exercise ofthe Option.  The Grantee also agrees toprovide the Company with any information requested by the Company with respectto such sale or other disposition.

 

6.                                       **Stockholder’s Agreement**. As a condition of receiving this Option, the Grantee hereby agrees toexecute, simultaneously with the Grantee’s execution of this Agreement, theManagement Stockholders Agreement attached hereto as Exhibit B, andthe Grantee agrees to be bound thereby.

 

7.                                       **Restrictions on Exercise**. Except as the Company may otherwise permit pursuant to the Plan, onlythe Grantee may exercise the Option during the Grantee’s lifetime and, afterthe Grantee’s death, the Option shall be exercisable (subject to thelimitations specified in the Plan) solely by the legal representatives of theGrantee, or by the person who acquires the right to exercise the Option by willor by the laws of descent and distribution, to the extent that the Option is exercisablepursuant to this Agreement.

 

8.                                       **Grant Subject to PlanProvisions**.  This grant is made pursuant to the Plan, theterms of which are incorporated herein by reference, and in all respects shallbe interpreted in accordance with the Plan. The grant and exercise of the Option are subject to interpretations,regulations and determinations concerning the Plan established from time totime by the Board in accordance with the provisions of the Plan, including, butnot limited to, provisions pertaining to (i) rights and obligations withrespect to withholding taxes, (ii) the registration, qualification orlisting of the Shares, (iii) changes in capitalization of the Company and (iv) otherrequirements of applicable law.  TheBoard shall have the authority to interpret and construe the Option pursuant tothe terms of the Plan, and its decisions shall be conclusive as to anyquestions arising hereunder.

 

9.                                       **No Employment or OtherRights**.  The grant of the Option shall not confer uponthe Grantee any right to be retained by or in the employ or service of theCompany and shall not interfere in any way with the right of the Company toterminate the Grantee’s employment or service at any time.  The right of the Company to terminate at willthe Grantee’s employment or service at any time for any reason is specificallyreserved.

 

10.                                 **No Stockholder Rights**. Neither the Grantee, nor any person entitled to exercise the Grantee’srights in the event of the Grantee’s death, shall have any of the rights andprivileges of a stockholder with respect to the Shares subject to the Option,until certificates for Shares have been issued upon the exercise of the Option.

 

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11.                                 **Assignment and Transfers**. Except as the Board may otherwise permit pursuant to the Plan, therights and interests of the Grantee under this Agreement may not be sold,assigned, encumbered or otherwise transferred except, in the event of the deathof the Grantee, by will or by the laws of descent and distribution.  In the event of any attempt by the Grantee toalienate, assign, pledge, hypothecate, or otherwise dispose of the Option orany right hereunder, except as provided for in this Agreement, or in the eventof the levy or any attachment, execution or similar process upon the rights orinterests hereby conferred, the Company may terminate the Option by notice tothe Grantee, and the Option and all rights hereunder shall thereupon becomenull and void.  The rights andprotections of the Company hereunder shall extend to any successors or assignsof the Company and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may be assigned by the Companywithout the Grantee’s consent.

 

12.                                 **Applicable Law**. The validity, construction, interpretation and effect of this Agreementshall be governed by and construed in accordance with the laws of the New York,without giving effect to the conflicts of laws provisions thereof.

 

13.                                 **Notice**. Any notice to the Company provided for in this Agreement shall beaddressed to the Company in care of Donald Roberts, and any notice to theGrantee shall be addressed to such Grantee at the current address shown on thepayroll of the Company, or to such other address as the Grantee may designateto the Company in writing.  Any noticeshall be delivered by hand, sent by telecopy or enclosed in a properly sealedenvelope addressed as stated above, deposited, postage prepaid, in a postoffice regularly maintained by the United States Postal Service.

 

*[Signature Page Follows]*

 

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**IN WITNESS WHEREOF**, the Company has caused its dulyauthorized officer to execute this Agreement, and the Grantee has executed thisAgreement, effective as of the Date of Grant.

 
|   |   | **ReAble Therapeutics, Inc.** |
|--------|--------|------------------------------------|
|   |   |                               |
|   |   | By:                                |   |
|   |   |                               |   |
|   |   | HARRY L. ZIMMERMAN                 |
|        |        |                                    |  |  |

 

I hereby accept theOption described in this Agreement, and I agree to be bound by the terms of thePlan and the Management Stockholders Agreement. I hereby further agree that I have released any interest in, and allrights with respect to, the DJO Options. I understand that all of the decisions and determinations of the Boardshall be final and binding.

 
|   | Optionee: |   |
|--------|-----------|--------|
|   |      |
|   |      |
|   | Date:     |   |
|        |           |        |  |

 

 

*[Signature Page to IncentiveStock Option Rollover Agreement]*

 

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**EXHIBIT A**

 

**DESCRIPTION OF THE OPTION**

 

**Date of Grant:**

 

**Exercise Price Per Share:**

 

**Total Number of Options Granted:**

 

**Term/Expiration Date:**

 

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**EXHIBIT B**

 

**MANAGEMENT STOCKHOLDERS AGREEMENT**

 

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