TO REFER TO SUCH PUBLICLY TRADED ENTITY.
(F)
"COMPENSATION COMMITTEE" MEANS THE EXECUTIVE COMPENSATION
COMMITTEE OF THE BOARD.
(G)
"CREDIT AGREEMENT" MEANS THAT CERTAIN CREDIT AGREEMENT DATED
NOVEMBER 20, 2007, BY AND BETWEEN DJO FINANCE LLC (F/K/A REABLE THERAPEUTICS
FINANCE LLC), DJO HOLDINGS LLC (F/K/A REABLE THERAPEUTICS HOLDINGS LLC), CREDIT
SUISSE AND CERTAIN OTHER LENDERS.
(H)
"DISABILITY" SHALL MEAN THE OPTIONEE IS DISABLED AS DETERMINED
UNDER SECTION 409A(A)(2)(C) OF THE CODE.
(I)
"EBITDA" SHALL MEAN, FOR ANY APPLICABLE PERIOD, "CONSOLIDATED
EBITDA" AS DEFINED IN THE CREDIT AGREEMENT FOR SUCH PERIOD, EXCLUDING FORWARD
COST SAVINGS AS DETERMINED BY THE BOARD.
(J)
"FAIR MARKET VALUE" HAS THE MEANING SPECIFIED IN THE PLAN, EXCEPT
AS EXPRESSLY SET FORTH HEREIN.
(K)
"FIRST PERFORMANCE-BASED TRANCHE" HAS THE MEANING SPECIFIED IN
SECTION 2 OF THIS AGREEMENT.
(L)
"FREE CASH FLOW" SHALL MEAN, FOR ANY APPLICABLE PERIOD, EBITDA
(AS DEFINED ABOVE) FOR SUCH PERIOD MINUS CAPITAL EXPENDITURES DURING SUCH PERIOD
AND INCREASED OR DECREASED, AS THE CASE MAY BE, BY THE CHANGE IN OPERATING
WORKING CAPITAL DURING SUCH PERIOD.
(M)
"GOOD REASON" SHALL MEAN A MATERIAL REDUCTION IN THE OPTIONEE'S
COMPENSATION BELOW THE AMOUNT OF COMPENSATION IN EFFECT ON THE DATE OF THIS
AGREEMENT WHICH IS NOT CURED WITHIN THIRTY (30) DAYS FOLLOWING THE COMPANY'S OR
ITS SUBSIDIARY'S, AS APPLICABLE, RECEIPT OF WRITTEN NOTICE FROM SUCH OPTIONEE
DESCRIBING THE EVENT CONSTITUTING GOOD REASON.
(N)
"OPERATING WORKING CAPITAL" AS OF ANY DATE SHALL MEAN THE
DIFFERENCE BETWEEN CURRENT ASSETS (EXCLUDING CASH AND INVESTMENTS, INTEREST AND
TAX ACCOUNTS) AND CURRENT LIABILITIES (EXCLUDING DEBT, INTEREST AND TAX
ACCOUNTS).
ACCRUED LIABILITIES RELATED TO RESTRUCTURING CHARGES ADDED BACK FOR
THE PURPOSES OF COMPUTING EBITDA ARE ALSO EXCLUDED FROM CURRENT LIABILITIES TO
COMPUTE OPERATING WORKING CAPITAL.
(O)
"OPTION" HAS THE MEANING SPECIFIED IN SECTION 2 OF THIS AGREEMENT.
(P)
"OPTION PRICE" HAS THE MEANING SPECIFIED IN SECTION 2 OF THIS
AGREEMENT.
(Q)
"OPTION SHARES" HAS THE MEANING SPECIFIED IN SECTION 2 OF THIS
AGREEMENT.
(R)
"PERFORMANCE PERIOD" SHALL MEAN THE FIVE-YEAR PERIOD COMMENCING
JANUARY 1, 2008 AND ENDING DECEMBER 31, 2012.
(S)
"SECOND PERFORMANCE-BASED TRANCHE" HAS THE MEANING SPECIFIED IN
SECTION 2 OF THIS AGREEMENT.
(T)
"STOCKHOLDERS AGREEMENT" SHALL MEAN THAT CERTAIN STOCKHOLDERS
AGREEMENT APPLICABLE TO THE OPTIONEE, AS AMENDED FROM TIME TO TIME.
(U)
"TERMINATION FOR CAUSE" SHALL MEAN THE TERMINATION BY THE COMPANY
OF OPTIONEE'S EMPLOYMENT WITH THE COMPANY AS A RESULT OF (I) THE OPTIONEE'S
WILLFUL AND CONTINUED
2
FAILURE TO SUBSTANTIALLY PERFORM OPTIONEE'S DUTIES (OTHER THAN ANY SUCH FAILURE
RESULTING FROM THE OPTIONEE'S DISABILITY OR ANY SUCH FAILURE SUBSEQUENT TO THE
OPTIONEE BEING DELIVERED NOTICE OF THE COMPANY'S INTENT TO TERMINATE THE
OPTIONEE'S EMPLOYMENT WITHOUT CAUSE), (II) CONVICTION OF, OR A 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 SIMILAR CRIMINAL ACT IN A JURISDICTION
OUTSIDE THE UNITED STATES OR (B) A CRIME INVOLVING MORAL TURPITUDE THAT COULD BE
INJURIOUS TO THE COMPANY OR ITS REPUTATION, (III) THE OPTIONEE'S WILLFUL
MALFEASANCE