EXECUTIVE
STOCK OPTION AGREEMENT
Award
Granted to (“Participant”):
Effective Date (“Effective Date”):
Number of Shares (“Shares”):
Exercise Price (“Exercise Price”)
THIS
AGREEMENT, made as of the Effective Date, by and between Wright
Medical Group, Inc., a Delaware corporation formerly known as
Wright Acquisition Holdings, Inc. (the “Company”), and
the Participant.
WHEREAS,
the Company desires to afford the Participant the opportunity to
acquire ownership of the Company’s common stock, par value
$.01 per share (“Common Stock”), so that he may have a
direct proprietary interest in the Company’s
success.
NOW,
THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereby agree as follows:
1.
Grant of Options . Subject to the terms and conditions set
forth herein and in the Company’s 1999 Equity Incentive Plan,
as amended from time to time, a copy of which is attached hereto as
Exhibit A (the “Plan”), on the Effective Date the
Company does hereby grant to the Participant, during the period
commencing on the Effective Date and ending on the 10th anniversary
of the Effective Date (the “Expiration Date”), the
right and option (the right to purchase any one share under this
Agreement being an “Option”) to purchase from the
Company the Shares of Common Stock indicated above. The Option to
purchase such Common Stock shall have an exercise price per share
equal to the Exercise Price indicated above.
2.
Limitations on Exercise of Options .
(a) Subject
to the terms and conditions set forth herein and in the Plan, the
Options shall vest and become exercisable, on a cumulative basis,
with respect to 25% of the shares of Common Stock on the first
anniversary of the Effective Date and on each succeeding
anniversary thereafter so long as the Participant is employed by
the Company; provided, however, that upon the occurrence of a
Change in Control (as defined below), all of the then unvested
Options shall automatically vest and be fully exercisable and shall
remain so exercisable in accordance with the terms of this
Agreement. The Committee or the Board may accelerate the vesting
and exercisability of any or all of the then unvested Options at
any time.
(b) For
the purposes of this Agreement, the term “Change in
Control” means the first to occur on or after the Effective
Date of any of the following:
(i) the
acquisition by any person or persons acting as a group
(“Person”) of capital stock of the Company which, when
added to any capital stock of the
Company
already owned by the Person, constitutes more than fifty percent
(50%) of either (i) the total fair market value of the
outstanding capital stock of the Company, or (ii) the total
voting power of the outstanding capital stock of the Company;
provided, however, that a Change in Control will not be deemed to
have occurred when any Person who owns more than fifty percent
(50%) of the total fair market value or the total voting power of
the outstanding capital stock of the Company as of the date of this
Agreement acquires any additional capital stock of the Company; and
provided further, that an increase in the percentage of the
outstanding capital stock of the Company owned by a Person as a
result of a transaction in which the Company acquires its capital
stock in exchange for property will be treated as an acquisition of
such capital stock by such Person; or
(ii) the
acquisition by a Person, in a single transaction or a series of
transactions within a twelve (12) month period, of capital
stock of the Company representing not less than thirty-five percent
(35%) of the total voting power of the outstanding capital stock of
the Company; or
(iii) the
acquisition by a Person, in a single transaction or a series of
transactions within a twelve (12) month period, of
consolidated assets of the Company which have a total gross fair
market value of not less than forty percent (40%) of the total
gross fair market value of all of the consolidated assets of the
Company immediately prior to such acquisition(s), in each case
without regard to any liabilities associated with such assets;
provided, however, that a Change in Control will not be deemed to
have occurred when such assets are acquired by:
(1)
an entity of which the Company owns, directly or indirectly, fifty
percent (50%) or more of the total fair market value or the total
voting power of the outstanding capital stock;
(2)
a Person which owns, directly or indirectly, fifty percent (50%) or
more of the total fair market value or the total voting power of
the outstanding capital stock of the Company;
(3)
an entity of which a Person described in clause (ii) owns,
directly or indirectly, fifty percent (50%) or more of the total
fair market value or the total voting power of the outstanding
capital stock;
(4)
an entity which is controlled by the stockholders of the Company
immediately after the transfer; or
(5)
a stockholder of the Company in exchange for or with respect to
capital stock of the Company; or
(iv) a
majority of the members of the Board is replaced in any twelve
(12) month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board prior to
the date of the appointment or election.
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In making a
determination as to whether a Change in Control has occurred, the
foregoing definition shall be construed and applied in a manner
which would avoid the imposition of federal income tax on the
Participant by operation of Section 409A of the Code, if
applicable.
3.
Non-Transferable . Except as specifically authorized by the
Committee, the Participant may not transfer the Options except by
will or the laws of descent and distribution and the Options shall
be exercisable during the Participant’s lifetime only by the
Participant or, in the event of his incapacity, his guardian or
legal representative. Except as so authorized, no purported
assignment or transfer of the Options, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or
otherwise (except by will or the laws of descent and distribution),
shall vest in the assignee or transferee any interest or right
herein whatsoever.
4.
Loss of Status as an Eligible Person . If prior to the
Expiration Date Participant ceases to be an Eligible Person, unless
otherwise determined by the Committee, the Options shall expire on
the earlier of the Expiration Date or the date that is ninety
(90) days after the date upon which Participant ceased to be
an Eligible Person. In such event, the Options shall remain
exercisable by Participant until expiration only to the extent the
Options were exercisable at the time Participant ceased to be an
Eligible Person.
5.
Adjustments and Corporate Reorganizations . In accordance
with and subject to the applicable terms of the Plan, the Options
shall be subject to adjustment or substitution, as determined by
the Committee, as to the number, price or kind of Stock or other
consideration subject to such Options or as otherwise determined by
the Committee to be equitable (i) in the event of changes in
the outstanding Stock or in the capital structure of the Company by
reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in
capitalization occurring after the date hereof or (ii) in the
event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial
dilution or enlargement of the rights granted to, or available for,
the Participant. No such adjustment shall be made which would
result in an increase in the amount of gain or a decrease in the
amount of loss inherent in the Options. The Company shall give the
Participant written notice of an adjustment hereunder.
Notwithstanding anything herein to the contrary, in the event of
any of the following:
(a) The
Company is merged or consolidated with another corporation or
entity and, in connection therewith, consideration is received by
shareholders of the Company in a form other than stock or other
equity interests of the surviving entity;
(b) All
or substantially all of the assets of the Company are acquired by
another person; or
(c) The
Company’s reorganization or liquidation;
then the
Committee may, in its discretion and upon at least 10 days
advance notice to the affected persons, cancel any outstanding
Options and pay to the Participant, in cash, the value of such
Options based upon the price per share of Stock received or to be
received by other shareholders of the Company in such event and the
per share exercise price of the Options.
3
6.
Exercise; Payment for and Delivery of Common Stock . The
Options shall be exercised by delivering written notice to the
Committee stating the number of shares of Common Stock to be
purchased, the person or persons in whose name the shares of Common
Stock are to be registered and each such person’s address and
social security number. Such notice shall not be effective unless
accompanied by the full purchase price for all shares to be
purchased, and any applicable withholding (as described below). The
purchase price shall be payable in cash, in shares of Common Stock,
any combination of cash or shares of Common Stock or any other
method authorized by the Plan and consented to by the Committee. In
the event that all or part of the purchase price is paid in shares
of Common Stock, the shares used in payment shall be valued at
their Fair Market Value on the date of exercise of the Options.
Payment in currency or by certified or cashier’s check shall
be considered payment in cash.
7.
Restrictive Covenants; Repurchase Rights .
(a) By
accepting the Options
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