WRIGHT MEDICAL GROUP,
INC.
2009 EQUITY INCENTIVE
PLAN
(a) The
purpose of the Plan is to provide a means through which the Company
may attract able persons to become and remain directors of the
Company or any Related Entity and enter and remain in the employ of
the Company or any Related Entity and to provide a means whereby
employees, directors and consultants of the Company and any Related
Entity can acquire and maintain Stock ownership, or be paid
incentive compensation measured by reference to the value of Stock,
thereby strengthening their commitment to the welfare of the
Company and promoting an identity of interest between stockholders
and these employees, directors and consultants.
(b) So
that the appropriate incentive can be provided, the Plan provides
for granting Incentive Stock Options, Nonqualified Stock Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Share Units and Stock Bonus, or any combination
of the foregoing.
2.
Definitions . The following definitions shall be applicable
throughout the Plan:
(a)
“Award” means, individually or collectively, any
Incentive Stock Option, Nonqualified Stock Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit,
Performance Share Unit or Stock Bonus granted under the
Plan.
(b)
“Award Period” means a period of time within which
performance is measured for the purpose of determining whether a
Performance Share Unit has been earned.
(c)
“Board” means the Board of Directors of the
Company.
(d)
“Cause” means the Company or a Related Entity having
cause to terminate a Participant’s employment or service in
accordance with the provisions of any existing employment,
consulting or any other agreement between the Participant and the
Company or a Related Entity or, in the absence of such an
employment, consulting or other agreement, upon (i) the
determination by the Committee that the Participant has ceased to
perform the Participant’s duties to the Company or a Related
Entity (other than as a result of the Participant’s
incapacity due to physical or mental illness or injury), which
failure amounts to intentional and extended neglect of the
Participant’s duties, (ii) the Committee’s
determination that the Participant has engaged or is about to
engage in conduct injurious to the Company or a Related Entity, or
(iii) the Participant having plead no contest to a charge of a
felony or having been convicted of a felony.
(e)
“Code” means the Internal Revenue Code of 1986, as
amended. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such
section and any regulations under such section.
(f)
“Committee” means the full Board, the Compensation
Committee of the Board or such other committee as the Board may
appoint to administer the Plan.
(g)
“Common Stock” means the common stock, par value $0.01
per share, of the Company.
(h)
“Company” means Wright Medical Group, Inc., a Delaware
corporation, and any successor thereto.
(i)
“Date of Grant” means the date on which the granting of
an Award is authorized, or such other date as may be specified in
such authorization.
(j)
“Disability” means the complete and permanent inability
by reason of illness or accident to perform the duties of the
occupation at which a Participant was employed or served when such
disability commenced or, if the Participant was retired when such
disability commenced, the inability to engage in any substantial
gainful activity, in either case as determined by the Committee
based upon medical evidence acceptable to it.
(k)
“Eligible Person” means any (i) person regularly
employed by the Company or any Related Entity; provided, however,
that no such employee covered by a collective bargaining agreement
shall be an Eligible Person unless and to the extent that such
eligibility is set forth in such collective bargaining agreement or
in an agreement or instrument relating thereto; (ii) director
of the Company or any Related Entity; or (iii) consultant to
the Company or any Related Entity.
(l)
“Exchange Act” means the Securities Exchange Act of
1934, as amended.
(m)
“Fair Market Value” on a given date means (i) if
the Stock is listed on a national securities exchange, the closing
price of a share of Stock reported as having occurred on the
primary exchange with which the Stock is listed and traded on the
date prior to such date, or, if there is no such sale on that date,
then on the last preceding date on which such a sale was reported;
(ii) if the Stock is not listed on any national securities
exchange but is quoted on an automated quotation system, the
closing price of a share of Stock reported on the date prior to
such date, or, if there is no such sale on that date, then on the
last preceding date on which a sale was reported; or (iii) if
the Stock is not listed on a national securities exchange nor
quoted on an automated quotation system, the amount determined
pursuant to one of the methods set forth in Treas. Reg. §
1.409A-1(b)(5)(iv)(B)(2), as elected by the Committee.
(n)
“Full Value Award” means any Award, other than Options
or Stock Appreciation Rights, which is settled by the issuance of
Common Stock.
(o)
“Holder” means a Participant who has been granted an
Award.
(p)
“Incentive Stock Option” means an Option granted by the
Committee to a Participant under the Plan which is designated by
the Committee as an Incentive Stock Option pursuant to
Section 422 of the Code.
(q)
“Non-Employee Director” means a “non-employee
director” within the meaning of Rule 16b-3 of the
Exchange Act or any successor rule or regulation.
(r)
“Nonqualified Stock Option” means an Option granted
under the Plan which is not designated as an Incentive Stock
Option.
(s)
“Normal Termination” means termination of status as an
Eligible Person:
(i) upon
retirement pursuant to the retirement plan of the Company or any
Related Entity, as may be applicable at the time to the Participant
in question;
(ii) on
account of Disability;
(iii) with
the written approval of the Committee;
(iv) voluntary
on the part of the Participant; or
(v) by
the Company or any Related Entity without Cause.
(t)
“Option” means an Award granted under Section 7 of
the Plan.
(u)
“Option Period” means the period described in
Section 7(c).
(v)
“Option Price” means the exercise price set for an
Option described in Section 7(a).
(w)
“Participant” means an Eligible Person who has been
selected by the Committee to participate in the Plan and to receive
an Award.
(x)
“Performance Goals” means the performance objectives of
the Company or a Related Entity during an Award Period or
Restricted Period established for the purpose of determining
whether, and to what extent, Awards will be earned for an Award
Period or Restricted Period.
(y)
“Performance Share Unit” means a hypothetical
investment equal to one share of Stock granted in connection with
an Award made under Section 9 of the Plan.
(z)
“Plan” means the Wright Medical Group, Inc. 2009 Equity
Incentive Plan, as may be amended and/or restated from time to
time.
(aa)
“Qualified Committee” means a committee composed of at
least two Qualified Directors.
(bb)
“Qualified Director” means a person who is (i) an
Non-Employee Director and (ii) an “outside
director” within the meaning of Section 162(m) of the
Code.
(cc)
“Related Entity” means, when referring to a subsidiary,
any business entity (other than the Company) which, at the time of
the granting of an Award, is in an unbroken chain of entities
ending with the Company, if stock or voting interests possessing
50% or more of the total combined voting power of all classes of
stock or other ownership interests of each of the entities other
than the Company is owned by one of the other entities in such
chain and, when referring to a parent entity, the term
“Related Entity” shall mean any entity in an unbroken
chain of entities ending with the Company if, at the time of the
granting of the Award, each of the entities other than the Company
owns stock or other ownership interests possessing 50% or more of
the total combined voting power of all classes of stock (or other
ownership interests) in one of the other entities in such chain. In
addition, with respect to an Incentive Stock Option, the definition
of “Related Entity” as used in this Plan shall apply by
only considering entities that are corporations.
(dd)
“Restricted Period” means, with respect to any share of
Restricted Stock or any Restricted Stock Unit, the period of time
determined by the Committee during which such Award is subject to
the restrictions set forth in Section 10.
(ee)
“Restricted Stock” means an Award of Restricted Stock
granted under Section 10 of the Plan.
(ff)
“Restricted Stock Unit” means a hypothetical investment
equal to one share of Stock granted in connection with an Award
made under Section 10 of the Plan.
(gg)
“Securities Act” means the Securities Act of 1933, as
amended.
(hh)
“Stock” means the Common Stock or such other authorized
shares of stock of the Company as from time to time may be
authorized for use under the Plan.
(ii)
“Stock Appreciation Right” or “SAR” means
an Award granted under Section 8 of the Plan.
(jj)
“Stock Bonus” means an Award granted under
Section 11 of the Plan.
(kk)
“Stock Option Agreement” means the agreement between
the Company and a Participant who has been granted an Option
pursuant to Section 7 which defines the rights and obligations
of the parties as required in Section 7(d).
(ll)
“Vested Unit” shall have the meaning ascribed thereto
in Section 10(e).
3.
Effective Date, Duration and Shareholder Approval . The Plan
shall be effective as of May 13, 2009. The effectiveness of
the Plan and the validity of any and all Awards granted hereunder
is contingent upon approval of the Plan by the stockholders of the
Company in a manner which complies with
(i) Section 422(b)(1) and, to the extent provided in
Section 16 herein, Section 162(m) of the Code and (ii) if
listed, the requirements of the national securities exchange with
which the Stock is listed. Unless and until the stockholders
approve the Plan in compliance with the applicable requirements, no
Award granted hereunder shall be effective. The expiration date of
the Plan, after which no Awards may be granted hereunder, shall be
May 13, 2019; provided, however, that the administration of
the Plan shall continue in effect until all matters relating to the
payment of Awards previously granted have been settled.
4.
Administration . The Plan shall be administered by the full
Board or the Committee, provided that the Committee shall be
composed of at least two persons, each member of which, at the time
he takes any action with respect to an Award under the Plan, shall
be a Non-Employee Director; and further provided, that to the
extent that the Company determines that an Award is intended to
comply with Section 162(m) of the Code, the Plan shall be
administered by a Qualified Committee. The majority of the members
of the Committee shall constitute a quorum. The acts of a majority
of the members present at any meeting at which a quorum is present
or acts approved in writing by a majority of the Committee shall be
deemed the acts of the Committee. Subject to the provisions of the
Plan, the Committee shall have exclusive power to:
(a) select
the Eligible Persons to participate in the Plan;
(b) determine
the nature and extent of the Awards to be made to each
Participant;
(c) determine
the time or times when Awards will be made to
Participants;
(d) determine
the duration of each Award Period and Restricted Period;
(e) determine
the conditions to which the payment of Awards may be
subject;
(f) establish
the Performance Goals for each Award Period;
(g) prescribe
the form of Stock Option Agreement or other form or forms
evidencing Awards; and
(h) cause
records to be established in which there shall be entered, from
time to time as Awards are made to Participants, the date of each
Award, the number of Incentive Stock Options, Nonqualified Stock
Options, SARs, Restricted Stock Units, Performance Share Units,
shares of Restricted Stock and Stock Bonuses awarded by the
Committee to each Participant, the expiration date, the Award
Period and the duration of any applicable Restricted
Period.
The Committee
shall have the authority, subject to the provisions of the Plan, to
establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem
necessary or advisable for the administration of the Plan. The
Committee’s interpretation of the Plan or any documents
evidencing Awards granted pursuant thereto and all decisions and
determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise
determined by the Board.
5. Grant
of Awards; Shares Subject to the Plan . The Committee may, from
time to time, grant Awards of Options, Stock Appreciation Rights,
Restricted Stock Units, Performance Share Units, shares of
Restricted Stock, Stock Bonuses to one or more Eligible Persons;
provided, however, that:
(a) Subject
to Section 13, the aggregate number of shares of Stock which
may be made subject to all Awards shall be equal to the sum of
(i) 750,000 shares of Common Stock plus (ii) the number
of shares of Stock granted under the Company’s Fifth Amended
and Restated 1999 Equity Incentive Plan, as amended, that are not
exercised or are forfeited, lapse or expire, or otherwise terminate
without delivery of any Stock subject thereto, to the extent such
Stock would otherwise again have been available for issuance under
such Fifth Amended and Restated 1999 Equity Incentive Plan, as
amended. The number of Full Value Awards may not exceed the sum of
(i) 750,000 shares of Common Stock plus (ii) the number
of shares of Full Value Awards permitted under the Company’s
Fifth Amended and Restated 1999 Equity Incentive Plan, as amended,
that have not been granted to an Eligible Person, to the extent
such Stock would otherwise again have been available for issuance
under such Fifth Amended and Restated 1999 Equity Incentive Plan.
Any and all shares of Stock that may be made subject to Awards are
authorized to be issued pursuant to Incentive Stock
Options;
(b) Such
shares shall be deemed to have been used in payment of Awards
whether they are actually delivered or the Fair Market Value
equivalent of such shares is paid in cash. In the event any Option,
SAR not attached to an Option, Restricted Stock, Restricted Stock
Unit or Performance Share Unit shall be surrendered, terminate,
expire, or be forfeited, the number of shares of Stock no longer
subject thereto shall thereupon be released and shall thereafter be
available for new Awards under the Plan;
(c) Stock
delivered by the Company in settlement of Awards under the Plan may
be authorized and unissued Stock or Stock held in the treasury of
the Company or may be purchased on the open market or by private
purchase; and
(d) The
Committee may, in its sole discretion, require a Participant to pay
consideration for an Award in an amount and in a manner as the
Committee deems appropriate.
6.
Eligibility . Participation shall be limited to Eligible
Persons who have received written notification from the Committee,
or from a person designated by the Committee, that they have been
selected to participate in the Plan.
7.
Discretionary Grant of Stock Options . The Committee is
authorized to grant one or more Incentive Stock Options or
Nonqualified Stock Options to any Eligible Person; provided,
however, that no Incentive Stock Options shall be granted to any
Eligible Person who is not an employee of the Company or a Related
Entity. Each Option granted shall be subject to the following
conditions, or to such other conditions as may be reflected in the
applicable Stock Option Agreement:
(a)
Option Price . The exercise price (“Option
Price”) per share of Stock for each Option shall be set by
the Committee at the time of grant; provided, however, that no
Option shall be granted with a per share exercise price that is
less than the Fair Market Value of a share of Stock at the Date of
Grant.
(b)
Manner of Exercise and Form of Payment . Options which have
become exercisable may be exercised by delivery of written notice
of exercise to the Committee accompanied by payment of the Option
Price. The Option Price shall be payable in cash and/or shares of
Stock valued at the Fair Market Value on the date the Option is
exercised or, in the discretion of the Committee, either
(i) in other property having a fair market value on the date
of exercise equal to the Option Price, or (ii) by delivering
to the Committee a copy of irrevocable instructions to a
stockbroker to deliver promptly to the Company an amount of sale or
loan proceeds sufficient to pay the Option Price.
(c)
Option Period and Expiration . Options shall vest and become
exercisable in such manner and on such date or dates determined by
the Committee and shall expire after such period, not to exceed ten
years
from the Date
of Grant, as may be determined by the Committee (the “Option
Period”), provided, however, that notwithstanding any vesting
dates set by the Committee, the Committee may in its sole
discretion accelerate the exercisability of any Option, which
acceleration shall not affect the terms and conditions of any such
Option other than with respect to exercisability. If an Option is
exercisable in installments, such installments or portions thereof
which become exercisable shall remain exercisable until the Option
expires.
Unless otherwise
stated in the applicable Option Agreement, the Option shall expire
earlier than the end of the Option Period in the following
circumstances:
(i) If
prior to the end of the Option Period, the Holder shall undergo a
Normal Termination, the Option shall expire on the earlier of the
last day of the Option Period or the date that is thirty days after
the date of such Normal Termination. In such event, the Option
shall remain exercisable by the Holder until its expiration, only
to the extent the Option was exercisable at the time of such Normal
Termination.
(ii) If
the Holder dies prior to the end of the Option Period and while
still in the employ or service of the Company or any Related Entity
or within thirty days of Normal Termination, the Option shall
expire on the earlier of the last day of the Option Period or the
date that is thirty days after the date of death of the Holder. In
such event, the Option shall remain exercisable by the person or
persons to whom the Holder’s rights under the Option pass by
will or the applicable laws of descent and distribution until its
expiration, only to the extent the Option was exercisable by the
Holder at the time of death.
(iii) If
the Holder ceases to be Eligible Person for reasons other than
Normal Termination or death, the Option shall expire immediately
upon such cessation of the Holder’s status as an Eligible
Person.
(d)
Stock Option Agreement — Other Terms and Conditions .
Each Option granted under the Plan shall be evidenced by a Stock
Option Agreement, which shall contain such provisions as may be
determined by the Committee and, except as may be specifically
stated otherwise in such Stock Option Agreement, which shall be
subject to the following terms and conditions:
(i) Each
Option issued pursuant to this Section 7 or portion thereof
that is exercisable shall be exercisable for the full amount or for
any part thereof.
(ii) Each
share of Stock purchased through the exercise of an Option issued
pursuant to this Section 7 shall be paid for in full at the
time of the exercise. Each Option shall cease to be exercisable, as
to any share of Stock, when the Holder purchases the share or
exercises a related SAR or when the Option expires.
(iii) Subject
to Section 12(k), Options issued pursuant to this
Section 7 shall not be transferable by the Holder except by
will or the laws of descent and distribution and shall be
exercisable during the Holder’s lifetime only by such
Holder.
(iv) Each
Option issued pursuant to this Section 7 shall vest and become
exercisable by the Holder in accordance with the vesting schedule
established by the Committee and set forth in the Stock Option
Agreement.
(v)
Each Stock Option Agreement may contain a provision that, upon
demand by the Committee for such a representation, the Holder shall
deliver to the Committee at the time of any exercise of an Option
issued pursuant to this Section 7 a written representation
that the shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such
representation prior to the delivery of any shares issued upon
exercise of an Option issued pursuant to this Section 7 shall
be a condition precedent to the right of the Holder or such other
person to purchase any shares. In the event certificates for Stock
are delivered under the Plan with respect to which such investment
representation has been obtained, the Committee may cause a legend
or legends to be placed on such certificates
to make
appropriate reference to such representation and to restrict
transfer in the absence of compliance with applicable federal or
state securities laws.
(vi) Each
Incentive Stock Option Agreement shall contain a provision
requiring the Holder to notify the Company in writing immediately
after the Holder makes a disqualifying disposition of any Stock
acquired pursuant to the exercise of such Incentive Stock Option. A
disqualifying disposition is any disposition (including any sale)
of such Stock before the later of (a) two years after the Date
of Grant of the Incentive Stock Option or (b) one year after
the date the Holder acquired the Stock by exercising the Incentive
Stock Option.
(e)
Incentive Stock Option Grants to 10% Stockholders .
Notwithstanding anything to the contrary in this Section 7, if
an Incentive Stock Option is granted to a Holder who owns stock
representing more than ten percent of the voting power of all
classes of stock of the Company or of a Related Entity, the Option
Period shall not exceed five years from the Date of Grant of such
Option and the Option Price shall be at least 110 percent of
the Fair Market Value (on the Date of Grant) of the Stock subject
to the Option.
(f)
$100,000 Per Year Limitation for Incentive Stock Options .
To the extent the aggregate Fair Market Value (determined as of the
Date of Grant) of Stock for which Incentive Stock Options are
exercisable for the first time by any Participant during any
calendar year (under all plans of the Company and its Subsidiaries)
exceeds $100,000, such excess Incentive Stock Options shall be
treated as Nonqualified Stock Options.
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