NON-EMPLOYEE
DIRECTOR STOCK OPTION AGREEMENT
Award
Granted to (“Participant”):
Effective Date (“Effective Date”):
Number of Shares (“Shares”):
Exercise Price (“Exercise Price”)
THIS
NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT (this
“Agreement”) is made as of the Effective Date, by and
between Wright Medical Group, Inc., a Delaware corporation (the
“Company”), and the Participant.
WHEREAS,
the Participant currently serves as a director of the Company (a
“Director”); and
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 (s)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 . On the terms and subject to the
conditions set forth herein and in the Company’s 1999 Equity
Incentive Plan, as the same may be amended and restated from time
to time (the “Plan”), a copy of the current version of
which is attached hereto as Exhibit A, 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
Shares of Common Stock from the Company. The Option to purchase
such Common Stock shall have an exercise price equal to the
Exercise Price per share indicated above. The Options granted
pursuant to this Agreement shall constitute Nonqualified Stock
Options under the Plan.
2.
Limitations on Exercise of Options .
(a) On
the terms and subject to the conditions set forth herein
(including, without limitation, Section 4) and in the Plan,
the Options shall vest and become exercisable in their entirety on
the first anniversary of the Effective Date; provided, however,
that upon the occurrence of a Change of 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.
2
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 or her incapacity, his or her
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.
Cessation of Service as Director .
(a)
Resignation . If, prior to the Expiration Date, the
Participant resigns from his or her position as a Director, then
subject to Section 4(e)(ii), (i) the Options shall expire
on the earlier of the Expiration Date or the date that is ninety
(90) days after the effective date of the Participant’s
resignation; (ii) the Options that are unexercisable on the
effective date of the Participant’s resignation shall cease
to vest and become exercisable; and (iii) the Options that are
exercisable on the effective date of the Participant’s
resignation shall be exercisable until the Options
expire.
(b)
Removal . If, prior to the Expiration Date, the Participant
is removed as a Director by a vote of the Company’s
stockholders in accordance with applicable law and the applicable
provisions of the Company’s certificate of incorporation and
bylaws, then subject to Section 4(e)(ii), (i) the Options
shall expire on the earlier of the Expiration Date or the date that
is ninety (90) days after the date of the stockholders vote;
(ii) the Options that are unexercisable on the date of the
stockholders vote shall cease to vest and become exercisable; and
(iii) the Options that are exercisable on the date of the
stockholders vote shall be exercisable until the Options
expire.
(c)
Retirement . If, prior to the Expiration Date, a Participant
does not stand for reelection by a vote of the Company’s
stockholders and retires from the Board at the end of the
Participant’s term as a Director, then subject to
Section 4(e)(ii), (i) the Options shall expire on the
earlier of the Expiration Date or the date that is ninety
(90) days after the last day of the Participant’s term
as a Director; (ii) the Options that are unexercisable on the
last day of the Participant’s term as a Director shall
continue to vest and become exercisable until the Options expire;
and (iii) the Options that are exercisable on the last day of
the Participant’s term as a Director and the Options that
become exercisable thereafter pursuant to clause (ii) shall be
exercisable until the Options expire.
(d)
Failure to be Reelected . If, prior to the Expiration Date,
a Participant stands for reelection as a Director by a vote of the
Company’s stockholders but is not so reelected, then subject
to Section 4(e)(ii), (i) the Options shall expire on the
earlier of the Expiration Date or the date that is ninety
(90) days after the date of the stockholders vote;
(ii) the Options that are unexercisable on t
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