**Exhibit 10.7**

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**DJO INCORPORATEDDIRECTORS’**

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**NONSTATUTORY STOCKOPTION AGREEMENT**

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This DJO INCORPORATED DIRECTORS’ NONSTATUTORY STOCKOPTION AGREEMENT (this “Agreement”), dated as of March **[      ]**, 2008 (the “EffectiveDate”), is made by and between DJO Incorporated, a Delaware corporation (the “Company”),and **[                        ]**(the “Optionee”).

 

**WHEREAS**, the Optionee serves as a member of the Company’sBoard of Directors (the “Board”); and

 

**WHEREAS**, the Company desires to grant the Optionee a nonqualifiedstock option in recognition of the Optionee’s service to the Company and tofurther align the Optionee’s interests with those of the Company’sstockholders.

 

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

 

# 1.             **Certain Definitions**.  Capitalized terms used, but not otherwisedefined, in this Agreement will have the meanings given to such terms in theCompany’s 2007 Incentive Stock Plan (the “Plan”).  As used in this Agreement:

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## (a)           “Blackstone” means each of Blackstone Capital Partners VL.P. a Cayman Islands limited partnership, Blackstone Family InvestmentPartnership V L.P., a Cayman Islands limited partnership, Blackstone FamilyInvestment Partnership V-A L.P., a Cayman Islands limited partnership,Blackstone Participation Partnership V L.P., a Cayman Islands limitedpartnership and each of their respective Affiliates.

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## (b)           “Cause” shall mean the removal of the Optionee from theBoard in connection with (i) the Optionee’s indictment for, conviction of,or plea of nolo contendere to, (A) a felony (other than traffic-related)under the laws of the United States or any state thereof or any similarcriminal act in a jurisdiction outside the United States or (B) a crimeinvolving moral turpitude that could be injurious to the Company or itsreputation, or (ii) any act of fraud by the Optionee in the performance ofthe Optionee’s duties.

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## (c)           “Change in Control” means (i) the sale ordisposition, in one or a series of related transactions, of all orsubstantially all of the assets of the Company to any “person” or “group” (assuch terms are defined in Sections 13(d)(3) and 14(d)(2) of the ExchangeAct) other than a sale or disposition where Blackstone retains all orsubstantially all of the assets of the Company, or (ii) any person or group,other than Blackstone, is or becomes the ‘beneficial owner” (as defined in Rules 13d-3and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% ofthe total voting power of the voting stock of the Company, including by way ofmerger, consolidation or otherwise (other than an offering of stock to thegeneral public through a registration statement filed with the Securities andExchange Commission); or (iii) the approval by the stockholders of theCompany of a plan of complete liquidation of the Company.

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

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## (e)           “Company” has the meaning specified in the introductoryparagraph of this Agreement or its successors; provided, that to the extentthat any class of equity securities of a member of the Company’s controlledgroup becomes publicly traded on an established securities market, the term “Company”shall be deemed to refer to such publicly traded entity.

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

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## (g)           “Disability” shall mean the Optionee is disabled asdetermined under Section 409A(a)(2)(C) of the Code.

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## (h)           “Fair Market Value” has the meaning specified in the Plan,except as expressly set forth herein.

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## (i)            “Option” has the meaning specified in Section 2 ofthis Agreement.

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

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

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## (l)            “Stockholders Agreement” shall mean that certainstockholders agreement applicable to the Optionee, as amended from time totime.

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# 2.             **Grant of Stock Option**.  Subject to and upon the terms, conditions,and restrictions set forth in this Agreement and in the Plan, the Company hasgranted to the Optionee an option (the “Option”) to purchase **[        ]** shares ofthe Company’s common stock (the “Option Shares”) at a price (the “Option Price”)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.

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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**.

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## (a)           Unless terminated as hereinafter provided, Option Sharesshall become vested and exercisable in accordance with the schedule set forthimmediately below, provided the Optionee continues serve as a member of the Boardas of each such date.

 
| **Vesting Date**                  | ** ** | **Percentage of the Option Shares that Vest** | ** ** |
|----------------------------------------|------------|-----------------------------------------------------------------------------|------------|
| 1st  Anniversary of the Effective Date |       | 33                                                                          | %          |
| 2nd  Anniversary of the Effective Date |       | 33                                                                          | %          |
| 3rd  Anniversary of the Effective Date |       | 34                                                                          | %          |

 

## (b)           Notwithstanding theforegoing, the Option Shares shall become immediately exercisable upon theoccurrence of a Change in Control if the Optionee is a Board member on the dateof the consummation of such Change in Control.

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## (c)           The Optionee shall be entitled to the privileges ofownership with respect to Option shares purchased and delivered to the Optioneeupon the exercise of all or part of this Option, subject to Section 8hereof.

 

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# 5.             **Option Nontransferable**.  The Optionee may not transfer or assign allor any part of the Option other than by will or by the laws of descent anddistribution.  This Option may beexercised, during the lifetime of the Optionee, only by the Optionee, or in theevent of the Optionee’s legal incapacity, by the Optionee’s guardian or legalrepresentative acting on behalf of the Optionee in a fiduciary capacity understate law and court supervision. Notwithstanding anything herein to the contrary, the Optionee maytransfer or assign all or any part of the Option to “family members” (asdefined in the General Instructions to Form S-8 of the Securities Act of1933) or trusts, partnerships or similar entities for the benefit of suchfamily members, for estate planning purposes or in connection with thedisposition of the Optionee’s estate.

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# 6.             **Notice of Exercise;Payment**.

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## (a)           To the extent then exercisable, the Option may beexercised in whole or in part by written notice to the Company stating thenumber of Option Shares for which the Option is being exercised and theintended manner of payment.  The date ofsuch notice shall be the exercise date. Payment equal to the aggregate Option Price of the Option Shares beingpurchased pursuant to an exercise of the Option must be tendered in full withthe notice of 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 Shares otherwise being traded on anestablished securities market, through the surrender tothe Company of Shares owned by the Optionee for at least six months as valuedat their Fair Market Value on the date of exercise, (iii) through netexercise, using Shares to be acquired upon exercise of the Option, such Sharesbeing valued at their Fair Market Value (which for such purpose shall have themeaning set forth in the Stockholders Agreement) on the date of exercise, or (iv) throughsuch other form of consideration as is deemed acceptable by the Board.

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## (b)           As soon as practicable upon the Company’s receipt of theOptionee’s notice of exercise and payment, the Company shall direct the dueissuance of the Option Shares so purchased.

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## (c)           As a further condition precedent to the exercise of thisOption in whole or in part, the Optionee shall comply with all regulations andthe requirements of any regulatory authority having control of, or supervisionover, the issuance of the shares of commonstock and in connection therewith shall execute any documents which theBoard shall in its sole discretion deem necessary or advisable.

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# 7.             **Termination of Agreement**.  The Agreement and the Option granted herebyshall terminate automatically and without further notice on the earliest of thefollowing dates:

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## (a)           One (1) year following the date that the Optionee isno longer serving as a Board member as a result of the Optionee’s death orDisability or, if earlier, the expiration date of the term of the Option;provided, however, that it shall be a condition to the exercise of the Optionin the event of the Optionee’s death that the Person exercising the Optionshall (i) have agreed in a form satisfactory to the Company to be bound bythe provisions of this Agreement and the Stockholders Agreement and (ii) complywith all regulations and the requirements of any regulatory authority havingcontrol of, or supervision over, the issuance of 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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## (b)           The date that the Optionee is removed from the Board bythe Company without Cause or resigns from the Board, upon which all unvestedOption Shares will be 

 

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## forfeited immediately and terminate and allvested Option Shares shall remain exercisable until the lesser of (i) ninety(90) calendar days following the Optionee’s date of removal or (ii) theremaining term of the Option;

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## (c)           The date that the Optionee is removed from the Board bythe Company for Cause, upon which all vested and unvested Options will beforfeited immediately and terminate; and

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

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Notwithstanding the foregoing, upon the Optionee nolonger serving as a member of the Board for any reason other than thetermination of the Optionee’s service 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-service Optionexercise period shall continue, but not beyond the remaining term of theOption, until thirty (30) calendar days after the first day when the Optioneeis no longer precluded from selling stock acquired upon exercise of the Optionfor 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 no longer serves as aBoard member due to the circumstances described in Section 7(c) hereof,this Agreement shall terminate at the time of such termination notwithstandingany other provision of this Agreement and the Optionee’s Option will cease tobe exercisable to the extent exercisable as of such cessation of service andwill not be or become exercisable after such cessation of service.

 

# 8.             **Stockholders Agreement**.  The Optionee agrees that any Option Sharesthat the Optionee receives pursuant to this Agreement or under the Plan aresubject to the terms and conditions set forth in the Stockholders Agreement.

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# 9.             **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 unvested Options will be credited to a notional account maintainedon the books of the Company for the benefit of the Optionee, which accountshall not accrue interest.  The Optioneewill become vested in such account at the same time as the Options to which thedividend equivalents relate vest and become exercisable, and such vestedamounts shall be payable in cash upon the applicable vesting date, and in noevent later than 21⁄2 months following the end of the calendar year in which theapplicable vesting date occurs.  Unvestedamounts held in such account shall be forfeited by the Optionee upon the datethe Optionee ceases to be a member of the Board; provided, however, that ifsuch cessation results in the continuation of unvested Options as provided in Section 7(a) above,forfeiture of dividend equivalents shall be delayed until the 1st anniversaryof such cessation.

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# 10.           **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 

 

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# or otherwise, and if the amounts available tothe Company or any Subsidiary for such withholding are insufficient, it shallbe a condition to the receipt of such payment or the realization of suchbenefit that the Optionee or such other person make arrangements satisfactoryto the Company or any Subsidiary for payment of the balance of such taxesrequired to be withheld.  The Optionee may elect to have such withholding obligationsatisfied by surrendering to 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 the Optionee shall be credited against any such withholdingobligation at the Fair Market Value (which for such purposeshall have the meaning set forth in the Stockholders Agreement) of such Shares on the date of such surrender.

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# 11.           **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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# 12.           **Adjustments**.

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## (a)           The Board shall make or provide for such substitution oradjustments in the number of Option Shares covered by this Option, in theOption Price applicable to such Option, and in the kind of shares coveredthereby and/or such other equitable substitution or adjustments as the Boardmay determine to prevent dilution or enlargement of the Optionee’s rights thatotherwise would result from (i) any stock dividend, extraordinarycash-dividend, stock split, combination of shares, recapitalization, or other changein the capital structure of the Company, (ii) any merger, consolidation,spin-off, split-off, spin-out, split-up, reclassification, reorganization,partial or complete liquidation, or other distribution of assets or issuance ofrights or warrants to purchase securities, or (iii) any other corporatetransaction or event having an effect similar to any of the foregoing.  In the case of a Change in Control, suchsubstitutions and adjustments include, without limitation, canceling any andall Options in exchange for cash payments equal to the excess, if any, of thevalue of the consideration paid to a shareholder of an Option Share over theOption Price per share subject to such Option in connection with such anadjustment event.

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## (b)           To the extent that any equity securities of any member ofthe Company’s controlled group become publicly traded, at such time all Optionsshall be exchanged, in a manner consistent with Sections 409A and 424 of theCode, for options with the same intrinsic value in the publicly-traded entity,and all Shares shall be exchanged for shares of common stock with the sameaggregate value of the publicly-traded entity.

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# 13.           **Relation to Other Benefits**.  Any economic or other benefit to the Optioneeunder this Agreement shall not be taken into account in determining anybenefits to which the Optionee may be entitled under any profit-sharing,retirement or other benefit or compensation plan maintained by the Company orany Subsidiary and shall not affect the amount of any life insurance coverageavailable to any beneficiary under any life insurance plan covering employeesor nonemployee directors of the Company or any Subsidiary.

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# 14.           **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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# 15.           **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 

 

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# to be separable from theother provisions hereof, and the remaining provisions hereof shall continue tobe valid and fully enforceable.

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# 16.           **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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# 17.           **Successors and Assigns**.  The provisions of this Agreement shall inureto the benefit of, and be binding upon, the successors, administrators, heirs,legal representatives and assigns of the Optionee, and the successors andassigns of the Company.

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# 18.           **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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# 19.           **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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# 20.           **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 five businessdays after having been mailed by United States registered or certified mail,return receipt requested, postage prepaid, or three business days after havingbeen sent by a nationally recognized overnight courier service such as FederalExpress, UPS, or Purolator, addressed to the Company (to the attention of theSecretary of the Company) at its principal executive offices and to theOptionee at his principal residence, or to such other address as any party mayhave furnished to the other in writing and in accordance herewith, except thatnotices of changes of address shall be effective only upon receipt.

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# 21.           **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, theCompany has caused this Agreement to be executed on its behalf by its dulyauthorized officer and the Optionee has executed this Agreement, as of the dayand year first above written.

 

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

 

 

I hereby agree to be boundby the terms of the Plan, this Agreement and the Stockholder’s Agreement.  I hereby further agree that all the decisionsand determinations of the Board shall be final and binding.

 

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

 

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