Exhibit 10.1
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EMPLOYMENT AGREEMENT
     This Employment Agreement (“Agreement”), is made and entered into this 17th
day of September, 2011, by and between Wright Medical Group, Inc. (“Company”), a
corporation organized and existing under the laws of the State of Delaware, with
its principal place of business at 5677 Airline Road, Arlington, Tennessee
38002, and Robert J. Palmisano (“Executive”), whose residence address is 2609
Barcelona Drive, Fort Lauderdale, Florida 33301.
     WHEREAS, the Company desires to employ the Executive as its President and
Chief Executive Officer to report to the Chairman of the Board and the Executive
Committee of the Company’s Board of Directors; and
     WHEREAS, the Company and the Executive desire to set forth the terms and
conditions of Executive’s employment with the Company as the President and Chief
Executive Officer;
     NOW, THEREFORE, for and in consideration of the mutual covenants contained
in this Agreement, Company and Executive agree as follows:
     1. Definitions. For the purposes of this Agreement, the following
capitalized terms have the meanings set forth below:
          1.1. “Affiliate” has the meaning set forth in Rule 12b-2 promulgated
under the Exchange Act.
          1.2. “Board” means the board of directors of the Company.
          1.3. “Cause” means:
               1.3.1. (i) the willful failure by the Executive to substantially
perform the Executive’s duties with the Company (other than any such failure
resulting from the Executive’s incapacity due to physical or mental illness), as
determined by the Board in its sole discretion, which failure amounts to an
intentional and extended neglect of the Executive’s duties; (ii) the
determination in the sole discretion of the Board that the Executive has engaged
or is about to engage in conduct materially injurious to the Company; (iii) the
determination by the Board that the Executive has engaged in or is about to
engage in conduct that is materially inconsistent with the Company’s legal and
healthcare compliance policies, programs or obligations; (iv) Executive’s bar
from participation in programs administered by the United States Department of
Health and Human Services or the United States Food and Drug Administration or
any succeeding agencies; (v) the Executive’s conviction of or entering of a
guilty or no contest plea to a felony charge (or equivalent thereof) in any
jurisdiction; and/or (vi) the Executive’s participation in activities proscribed
in Sections 17.1, 17.3, and 17.4 or the material breach by Executive of any
other material covenants contained herein. For the purposes of clause (i) of
this definition, no act, or failure to act, on the Executive’s part shall be
deemed to be “willful” unless done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that the Executive’s act, or failure
to act, was in the best interests of the Company.

 

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               1.3.2. Notwithstanding the foregoing, the Executive shall not be
deemed terminated for Cause for any reason other than clauses (iv) and (v) of
Section 1.3.1 unless and until the Executive shall have been provided with
reasonable notice of and, if possible, a reasonable opportunity to cure the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment for Cause and, following such cure period, if any, the
Executive is given an opportunity to be heard before the full Board and after
such hearing a majority of the entire Board, acting in good faith, votes to
terminate the Executive’s employment for Cause.
          1.4. “Change in Control” shall be deemed to have occurred on or
immediately before the effective date on which any of the following occurs with
regard to Company or its subsidiary Wright Medical Technology, Inc. (both or
either of which are collectively referred to as “Company” for purposes of this
definition):
               1.4.1. the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (for purposes of this Section 1.4, a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more (on a fully diluted basis) of either
(A) the then outstanding shares of common stock of the Company, taking into
account as outstanding for this purpose such common stock issuable upon the
exercise of options or warrants, the conversion of convertible stock or debt,
and the exercise of any similar right to acquire such common stock (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control: (w) any acquisition pursuant to an
initial public offering of shares of common stock of the Company pursuant to a
registration statement declared effective under the Securities Act of 1933, as
amended; (x) any acquisition by the Company or any “affiliate” of the Company,
within the meaning of 17 C.F.R. § 230.405 (an “Affiliate”); (y) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate; or (z) any acquisition by any corporation or business
entity pursuant to a transaction which complies with clauses (A), (B), and
(C) of Section 1.4.2 of this definition (persons and entities described in
clauses (w), (x), (y) and (z) being referred to herein as “Permitted Holders”);
               1.4.2. the consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), in each case, unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or

 

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more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any Permitted Holder referred to in clause (w), (x) or
(y) of Section 1.4.1) beneficially owns, directly or indirectly, 50% or more (on
a fully diluted basis) of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination, taking into
account as outstanding for this purpose such common stock issuable upon the
exercise of options or warrants, the conversion of convertible stock or debt,
and the exercise of any similar right to acquire such common stock, or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the incumbent Board at the time of the execution of the initial
agreement providing for such Business Combination;
               1.4.3. the approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company;
               1.4.4. the sale of at least 80% of the assets of the Company; or
               1.4.5. the individuals who on the date of this Agreement
constitute the Board thereafter cease to constitute at least a majority thereof;
provided, however, that any person becoming a member of the Board subsequent to
the date of this Agreement and whose election or nomination was approved by a
vote of at least two-thirds of the directors who then comprised the Board
immediately prior to such vote shall be considered a member of the Board on the
date of this Agreement.
          1.5. “Code” means the Internal Revenue Code of 1986, as amended and
the Treasury Regulations promulgated thereunder, as in effect from time to time.
          1.6. “Compensation Committee” means the compensation committee of the
Board.
          1.7. “Competitive Business” means the development, manufacturing,
supplying, producing, selling, distributing, marketing or providing for sale of
any product, device, instrument or intellectual property, created, developed,
manufactured or sold by the Company or any of its Affiliates or subsidiaries and
which is material to the business of the Company, Affiliate or subsidiary, in
each case as of the Executive’s Date of Termination.
          1.8. “Disability” means the Executive’s inability, due to physical or
mental incapacity, to substantially perform his duties and responsibilities for
a period of 120 consecutive days as determined by a medical doctor selected by
Executive and the Company. If the parties cannot agree on a medical doctor, each
party shall select a medical doctor and the two doctors shall select a third who
shall be the approved medical doctor for this purpose.
          1.9. “Good Reason” means:

 

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               1.9.1. The occurrence of any of the following without the prior
written consent of the Executive, unless such act or failure to act is corrected
by the Company prior to the Date of Termination specified in the Notice of
Termination (as discussed in Section 13.1 hereof):
                    1.9.1.1. the assignment to the Executive of any duties
materially inconsistent with the range of duties and responsibilities
appropriate to the president and chief executive officer of a public corporation
comparable in size and complexity to the Company and its consolidated
subsidiaries, such range to be determined by reference to reasonable corporate
governance practices within the United States;
                    1.9.1.2. a material and adverse change in the Executive’s
titles, authority as President and Chief Executive Officer of the Company,
duties, responsibilities or reporting lines, including, without limitation,
(i) failure to elect or re-elect the Executive as President and Chief Executive
Officer of the Company, (ii) failure to elect or re-elect the Executive as
President and Chief Executive Officer of Wright Medical Technology, Inc.,
(iii) failure to elect or re-elect Executive to the Board of the Company, the
board of directors of Wright Medical Technology, Inc., or the board of directors
of any successor companies, or (iv) the failure of the Executive to be the most
senior executive officer of the Company (and, following a Change in Control, of
any successor to the Company or the successor’s ultimate parent);
                    1.9.1.3. a material reduction (i.e., more than seven percent
(7%) by the Company in the Executive’s aggregate annualized compensation
(including target bonus opportunity as a percentage of Base Salary) and benefits
opportunities or the failure to continue in effect any material benefit plan in
which the Executive is participating, except for an across the board reduction
or modification to any benefit plan affecting all executives of the Company;
                    1.9.1.4. the failure by the Company to pay to the Executive
any portion of the Executive’s current compensation and benefits, including the
granting of the annual equity grants, under this Agreement (including its
Exhibits) or under any plan, program or policy of, or other contract or
agreement with, the Company or any of its Affiliates, within thirty (30) days of
the date such compensation and/or benefits are due;
                    1.9.1.5. the failure by the Company to obtain a satisfactory
agreement from any successor of the Company or Wright Medical Technology, Inc.
requiring such successor to assume and agree to perform the Company’s
obligations under this Agreement;
                    1.9.1.6. the failure of the Company to provide
indemnification and D&O insurance protection as required in Section 15 of this
Agreement;
                    1.9.1.7. the failure of the parties to agree on an
alternative compensation arrangement for incentive equity compensation for the
Executive if and as required by Section 5.3.2;

 

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                    1.9.1.8. the relocation of the Executive’s principal place
of employment immediately prior to such move (the “Principal Location”) to a
location which is more than forty (40) miles from the Principal Location; or
                    1.9.1.9. the material breach by the Company of any of the
other provisions of this Agreement which is not cured following notice and a
reasonable period of time to cure such breach.
               1.9.2. Notwithstanding any of the foregoing, placing the
Executive on a paid leave for up to sixty (60) days pending a determination by
the Board of whether there is a basis to terminate the Executive for Cause shall
not constitute a Good Reason.
               1.9.3. The Executive’s determination that an act or failure to
act constitutes Good Reason shall be presumed to be valid. The Executive’s right
to terminate the Executive’s employment for Good Reason shall not be affected by
the Executive’s incapacity due to physical or mental illness. The Executive’s
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good Reason hereunder. In all
events, if the Executive fails to deliver Notice of Termination with respect to
a termination of his employment for Good Reason within one hundred twenty
(120) days after the Executive becomes aware of the event giving rise to such
right to terminate, he shall be deemed to waive his right to terminate for Good
Reason with respect to such event.
          1.10. “Involuntary Termination” means (a) a termination of employment
by the Company other than for Cause, death or Disability, or (b) the Executive’s
resignation of employment for Good Reason.
          1.11. “Person,” unless otherwise defined, has the meaning set forth in
Section 3(a)(9) of the Exchange Act, as modified and used in sections 13(d) and
14(d) thereof, except that the term shall not include (i) the Company or any of
its Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, (iv) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of the stock in the Company, or (v) a person or group as used in
Rule 13d-1(b) promulgated under the Exchange Act.
     2. Employment. The Company hereby employs the Executive, and the Executive
hereby accepts employment, upon the terms and conditions herein set forth. The
employment shall begin on September 17, 2011 which shall be the “Effective Date”
under the terms of this Agreement.
     3. Positions; Duties and Authorities. During the Term, the Executive shall
be engaged as the President and Chief Executive Officer of the Company and its
wholly owned subsidiary Wright Medical Technology, Inc. and shall report solely
to the Chairman of the Board and the Executive Committee of the Board of
Directors of the Company and hereby promises to perform and discharge faithfully
and to the best of his abilities his duties hereunder. The

 

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Executive shall have such duties and authorities as are customarily associated
with the positions of president and chief executive officer of a public
corporation comparable in size and complexity to the Company and shall also
perform such other duties which may be assigned to him from time to time by the
Board in connection with the conduct of the Company’s business and which are
consistent with his positions. Promptly after the Effective Date, the Executive
shall be appointed as a member of the Board and he shall be nominated by the
Board for election as a member of the Board at each annual meeting of
stockholders of the Company held during the Term. During the Term, the Executive
shall be a member of the board of directors of Wright Medical Technology, Inc.
Executive may also be appointed to other positions with the Company or its
Affiliates consistent with his leadership role as President and CEO of the
Company.
     4. Extent of Services. During the Term, the Executive shall devote his
business time, attention, and energies to the business of the Company and shall
not, without the approval of the Company, during the Term, be engaged in any
other business activity, regardless of whether such activity is pursued for
gain, profit or other pecuniary advantage; provided, however, that this
requirement shall not be construed as preventing the Executive from
(a) investing his personal assets in any business that is not a Competitive
Business with the Company in such form or manner as will not require any
services on the part of the Executive in the operation of the affairs of the
companies in which such investments are made and in which his participation is
solely that of an investor, (b) purchasing securities in any corporation engaged
in a Competitive Business with the Company whose securities are regularly traded
on the NASDAQ Stock Market, a national or regional stock exchange, or the
over-the-counter market, provided that such purchase shall not result in his
collectively owning beneficially at any one time one percent (1%) or more of the
equity securities of such corporation or (c) engaging in charitable activities
or serving on the boards of trade associations and/or non-profit organizations
(including Providence College). Nothing in this Section 4 shall prevent the
Executive from continuing to serve on the board of directors of Bausch & Lomb
Incorporated (and retaining compensation with respect thereto). Nothing in this
Section 4 shall prevent the Executive from serving on the board of directors of
any other company (and retaining compensation with respect thereto), provided
the Board has provided written approval of each other directorship held or
proposed to be held by the Executive (which approval shall not be unreasonably
withheld).
     5. Compensation Matters.
          5.1. Base Salary. For services rendered under this Agreement, the
Company shall pay the Executive a base annualized salary of $750,000 ( “Base
Salary”), which shall be payable (after deduction of applicable payroll taxes)
in accordance with the Company’s customary payroll practices in effect from time
to time, but in all events no less frequently than semi-monthly. During the
Term, the Executive’s Base Salary shall be reviewed at least annually by the
Board for increase. After any such increase, “Base Salary” as that term is used
in this Agreement shall thereafter refer to the Base Salary as so increased.
Base Salary shall not be reduced at any time without the Executive’s prior
written consent.
          5.2. Incentive Bonus. During the Executive’s employment hereunder, in
addition to the Base Salary, the Executive shall be eligible to receive an
annual performance

 

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incentive bonus (an “Incentive Bonus”) in accordance with the terms and subject
to the conditions of the Company’s Executive Performance Incentive Plan, as the
same may be amended from time to time (the “Incentive Plan”). The performance
goals shall be established by the Compensation Committee in consultation with
the Executive and shall be reasonable and attainable in light of the Company’s
circumstances and the compensation practices of peer companies. The Executive’s
entitlement to receive an Incentive Bonus for any calendar year will depend on
whether, and to what extent, the performance goals established for such year by
the Compensation Committee in accordance herewith have been achieved. The
Incentive Bonus, if any, payable to the Executive for any calendar year is
targeted at 100% of Base Salary and shall not exceed 200% of the Base Salary
earned by the Executive in such year. The Compensation Committee shall determine
in good faith the Executive’s entitlement to an Incentive Bonus based on the
achievement of such performance goals as soon as reasonably practicable after
the end of each calendar year. The Company shall pay the Incentive Bonus, if
any, to the Executive within ten (10) days after the Compensation Committee
makes such determination and in any event not later than March 15 of the year
following the calendar year in which the services upon which the Incentive Bonus
is based were performed. For 2011, the annual Incentive Bonus is guaranteed at
the target rate of 100% of Base Salary on a prorated basis for the balance of
the year of 2011 determined as if the Executive commenced employment on
September 1, 2011.
          5.3. Equity Awards.
               5.3.1 On the Effective Date, the Executive shall receive an award
of non-qualified stock options covering 610,000 shares of the Company’s common
stock as inducement options in accordance with the exception provided in NASDAQ
Marketplace Rule 5635(c)(4). Except as otherwise provided in Section 13 hereof,
the options granted to the Executive pursuant to this Section shall vest on a
cumulative basis with thirty three and 1/3 percent (33 1/3%) of the total
vesting each succeeding year on the anniversary of the Effective Date of this
Agreement. The exercise price of the options shall be equal to the closing price
of the Company’s common stock on NASDAQ on September 16, 2011, which is the fair
market value of a share of the Company’s common stock on the Effective Date.
                    5.3.1.1 The options evidenced by this Section, to the extent
such right with respect thereto shall not previously have been exercised or
sooner terminated, shall expire and be rendered null and void at 5:00 p.m.,
Memphis, Tennessee time, on September 17, 2021.
                    5.3.1.2 Specific terms and conditions of this inducement
stock grant shall be governed by the Inducement Stock Option Grant Agreement
attached hereto as Exhibit A (“Grant Agreement”). This will include, for
example, vesting, change in control and term of the options. Any conflict
between this Agreement and the Grant Agreement shall be controlled by the Grant
Agreement
               5.3.2 During the Term, the Executive shall receive an annual
equity grant at the date selected by and in the sole discretion of the Board of
Directors as the date of the annual grant (this has in recent years been on the
date of the first Board of Directors meeting

 

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following the annual shareholders meeting and in all events shall be no later
than the date an annual equity grant is made to any other senior executive).
This annual equity grant shall be equal in value to 300% of the Base Salary and
may be composed of both non-qualified stock options (valued based on the
Black-Scholes option valuation model and using the valuation in the Company’s
annual report) and restricted stock (valued in the sole discretion of the
Compensation Committee acting reasonably). The composition of the annual equity
grant shall be determined in the sole discretion of the Compensation Committee
acting reasonably; provided that in all events, the value of the portion of such
grant which is comprised of non-qualified stock options shall be no less, as a
percentage of Base Salary, in the case of the Executive than in the case of
other senior executives. The Company agrees that it will seek shareholder
approval of an increase in the number of shares available under the Company’s
2009 Equity Incentive Plan (“Equity Plan”) sufficient to meet the Company’s
obligations under this Section. In the event that the Company is unsuccessful in
obtaining shareholder approval of the necessary increase, the parties will
negotiate in good faith to agree on an alternative compensation arrangement for
the Executive of equal cash value as of the time payable.
               5.3.3 The grants of stock options or other awards under
Section 5.3.2 are subject to the terms of the Equity Plan which is attached
hereto as Exhibit B and the applicable Stock Option Grant Agreement (“Option
Agreement”) attached hereto as Exhibit C or the applicable Restricted Stock
Grant Agreement (“Restricted Agreement”) attached hereto as Exhibit D.
          5.4 Fringe Benefits. Subject to the provisions of Section 9, the
Executive shall be eligible to receive and to participate in programs for such
fringe benefits (including, without limitation, medical and disability insurance
and retirement benefits) as the Company may make available generally to its
executive officers from time to time during the Term. The Executive shall be
responsible for making any generally applicable employee contributions required
under such fringe benefit programs.
     6. Sick Leave and Vacation. During the Term, the Executive shall be
entitled to annual vacation of at least four (4) weeks, or such greater time
period if permitted by Company policy, to be taken at his discretion in a manner
consistent with his obligations to the Company under this Agreement. The actual
dates of such vacation periods shall be agreed upon through mutual discussions
between the Chairman of the Board and the Executive; provided, however, that the
Company shall have the ultimate decision with respect to the actual vacation
dates to be taken by the Executive, which decision shall not be unreasonable.
The Executive also shall be entitled to sick leave consistent with Company
policy.
     7. Annual Physical. During the Term, the Executive will be provided an
annual physical examination at the expense of the Company to be conducted by
LifeSigns in Memphis, Tennessee or by such other organization as may be agreed
between the Executive and the Chairman of the Board of Directors.
     8. Temporary Living Allowance and Home Travel. During the Term, the
Executive shall receive $7,500 per month as an allowance for temporary housing
and automobile

 

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expenses. In that connection, it is anticipated by the parties that the
Executive may enter into a lease (the “Lease”) for temporary housing in or near
Arlington, Tennessee with duration of up to twelve months. Additionally,
Executive shall be reimbursed for reasonable travel expenses between Arlington,
Tennessee and the Executive’s homes consistent with the travel policies of the
Company. All such travel expenses shall be reimbursed upon presentation to the
Company of an itemized accounting of such expenses with reasonable supporting
data. To the extent that these reimbursements are not deductible by the
Executive for income tax purposes, such amounts will be “grossed-up” for income
tax purposes so that the reimbursed items will be received net of any deduction
for income and payroll taxes. These additional gross-up payments shall be made
after the end of each calendar year so as to be able to more effectively
identify the additional tax impact and in all events shall be paid consistent
with Treasury Regulation 1.409A-3(i)(1)(v).
     9. Insurance. During the Term, the Executive shall receive an annual
taxable reimbursement of up to $1,000 for personal insurance premiums. At any
time during the Term, the Executive shall be entitled to elect to provide
medical and/or disability insurance personally and, if he so elects, he will not
be eligible to participate in the medical and disability insurance programs
provided by the Company. Following any such election, the Executive shall
receive during the Term an additional monthly taxable reimbursement for personal
health and disability insurance premiums of up to $900.00 (or such greater
amount that would be otherwise paid by the Company for medical and disability
coverage for Executive and his spouse under the medical and disability benefit
programs provided by the Company at that time.)
     10. Financial Planning. During the Term, the Executive shall receive an
annual taxable reimbursement of up to $5,000 for financial and tax planning and
tax preparation.
     11. Expenses. During the Term, the Company shall reimburse the Executive
for all reasonable out-of-pocket expenses incurred by the Executive in
connection with the business of the Company and in performance of his duties
under this Agreement. Expenses shall be reimbursed upon the Executive’s
presentation to the Company of an itemized accounting of such expenses with
reasonable supporting data.
     12. Term. Executive’s employment by the Company under this Agreement shall
commence on the Effective Date and shall expire at the close of business on the
third anniversary of the Effective Date unless otherwise extended by written
agreement (the “Expiration Date”). Notwithstanding the foregoing but subject to
Section 13, the Company, in its sole and absolute discretion, or the Executive
may terminate the Executive’s employment hereunder.
          12.1 Any separation from employment with the Company shall be governed
by this Agreement, provided, however, that, except as otherwise specifically
provided herein, the Executive specifically agrees to provide ninety (90) days
notice of Executive’s intent to leave the Company or retire from the Company.
          12.2 Commencing on the second (2nd) anniversary of the Effective Date
(and each anniversary of the Effective Date thereafter), the Term shall
automatically be extended for one (1) additional year, unless at least thirty
(30) days prior to such date, the Company or the

 

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Executive shall give written notice to the other party that it or he, as the
case may be, does not wish to extend this Agreement.
          12.3 For all purposes hereof, the term of this Agreement, as extended
from time to time, is referred to as the “Term.”
     13. Termination and Effects of Termination.
          13.1 Notice and Date of Termination.
               13.1.1 Notice. Any termination of the Executive’s employment by
the Company or by the Executive prior to the Expiration Date shall be
communicated by a written notice of termination to the other party (the “Notice
of Termination”). Where applicable, the Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon for termination of
the Executive’s employment under the provision so indicated.
               13.1.2 Date. The date of the Executive’s termination of
employment with the Company (“Date of Termination”) shall be determined as
follows:
                    13.1.2.1 If due to the Company terminating the Executive’s
employment, either with or without Cause, the Date of Termination shall be the
date specified in the Notice of Termination; if for Cause, the Date of
Termination shall be after the requisite Board vote; if other than Cause, the
Date of Termination shall not be less than two (2) weeks from the date such
Notice of Termination is given, unless the Company elects to pay the Executive
for that period in lieu of notice. Any such payment in lieu of notice would be
in addition to any payments provided pursuant to Sections 13.3 or 13.4.
                    13.1.2.2 If due to death, the Date of Termination is the
date of death. If due to Disability, the Date of Termination is the date the
party terminating the Executive’s employment for Disability provides written
notice of termination due to Disability.
                    13.1.2.3 If the basis of the Executive’s Involuntary
Termination is the Executive’s resignation for Good Reason, the Date of
Termination shall be determined by the Company, but shall not be less than two
(2) weeks nor more than eight (8) weeks from the date Notice of Termination is
given.
                    13.1.2.4 If the basis of the Executive’s termination is the
Executive’s resignation for reasons other than Good Reason or if Executive gives
notice of retirement, the Date of Termination shall be determined by the Company
after the Company receives notice as set forth in Section 12.1.
                    13.1.2.5 If the basis of the Executive’s termination is the
expiration of the Term following notice of non-renewal of the Term, the Date of
Termination shall be the last day of the applicable Term.

 

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                    13.1.2.6 Notwithstanding the foregoing, for any compensation
that qualifies as non-qualified compensation under Code Section 409A, the Date
of Termination shall be the date the Executive experiences a “separation from
service” within the meaning of Code Section 409A.
                    13.1.2.7 Notwithstanding anything contained herein, this
Agreement shall automatically terminate and be of no further force and effect
and no benefits shall be payable hereunder in the event that, following a
transaction that results in a Change in Control, (A) the Executive is offered
employment by the successor to the Company in the capacities of president, chief
executive officer and as a member of the board of directors of such entity (and
if there is an ultimate parent, the parent entity), (B) the entity offering
employment is and remains a public corporation, (C) the Executive is offered the
opportunity to enter into an employment agreement containing terms which are no
less favorable to him than those which are contained in this Agreement,
including, without limitation, terms with respect to compensation (including
Base Salary, target bonus opportunity and annual equity awards), benefits,
perquisites and severance, but (D) the Executive declines to accept such offer.
Notwithstanding the foregoing, in all events, the Executive’s outstanding equity
awards shall fully vest immediately prior to a Change in Control and Sections
15, 17 and 21.9 shall survive any termination of this Agreement.
          13.2 Termination from the Board and any Offices Held. Upon termination
of the Executive’s employment for any reason, the Executive agrees the
Executive’s membership on the Board, the board of directors of any of the
Company’s Affiliates, any committees of the Board, any committees of the board
of directors of any of the Company’s Affiliates and any and all offices held, if
applicable, shall be automatically terminated. Executive hereby agrees to
cooperate with the Company and execute any documents reasonably required by the
Company or competent authorities to effect this provision.
          13.3 Severance Benefits upon Involuntary Termination Prior to Change
in Control or After the CIC Protection Period Expires. In the event of the
Involuntary Termination of the Executive’s employment prior to a Change in
Control or after the expiration of the CIC Protection Period (as defined in
Section 13.4), the Company shall, upon the execution of the Release required in
Section 17.5, pay to the Executive the following Non-Change in Control Severance
Payment in the following amounts and manner:
               13.3.1 The total severance payment will be equal to twenty four
months multiplied by monthly Base Salary times two (2) (which is intended by the
parties to represent Base Salary plus target bonus for two years).
               13.3.2 The payment will be paid in a lump sum, less all
applicable taxes withheld, on the 60th day following the Date of Termination.
The payment of severance is specifically conditioned on and designated as
consideration for execution of the Release required in Section 17.5 and
compliance with Executive’s covenants outlined in Sections 17.1, 17.3 and 17.4.

 

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               13.3.3 In addition to the Non-Change in Control Severance
Payment, the Executive shall be entitled to receive the following additional
benefits:
                    13.3.3.1 Accrued Obligations. The Company shall pay to the
Executive a lump sum amount in cash on the next payroll date immediately
following the Date of Termination equal to the sum of (i) the Executive’s annual
base salary through the Date of Termination to the extent not theretofore paid,
(ii) an amount equal to the target annual incentive for the calendar year of
termination, less any payments thereof already made during the calendar year of
termination, (iii) an amount equal to the value of any accrued and/or untaken
vacation, if any, (iv) reimbursement for unreimbursed business expenses, if any,
properly incurred by the Executive in the performance of the Executive’s duties
in accordance with the policies established from time to time by the Board and
payment of any allowances due but unpaid under Sections 8, 9 or 10, and
(v) until the expiration of the Lease, a monthly amount equal to the monthly
rental payable by the Executive with respect to the Lease; and, in addition,
(vi) the Executive shall remain entitled to all payments, benefits or
entitlements pursuant to Sections 15, 21.9 and 21.15 and any other plan, program
or policy of, or any contract or agreement with, the Company, including, without
limitation, any long-term incentive plans or the Indemnification Agreement. (The
amounts or entitlements specified in clauses (i), (ii), (iii), (iv) and
(v) shall be hereinafter referred to as the “Accrued Obligations”.)
                    13.3.3.2 Equity Based Compensation. All equity-based
incentive awards (including, without limitation, stock options, stock
appreciation rights, restricted stock awards, restricted stock units,
performance share awards or other related awards) held by the Executive shall be
governed by the terms of the Equity Plan and the applicable Option Agreement or
the applicable Restricted Agreement. All inducement grants shall be governed by
the terms of the Grant Agreement.
                    13.3.3.3 Welfare Benefits. The Executive (and his eligible
dependents) shall be eligible for health and dental coverage as provided for
under COBRA, using the normal COBRA administration process of the Company. The
Company shall pay directly the cost of COBRA participation. If the Executive
accepts employment with another employer and is no longer eligible for COBRA
coverage, these welfare benefits will cease to be provided. Notwithstanding the
foregoing, if the Executive has elected pursuant to Section 9 to provide medical
insurance personally, the Company shall continue to reimburse Executive on the
same terms as provided in Section 9 for a period of twelve (12) months and the
foregoing provision with respect to COBRA shall not apply.
                    13.3.3.4 Outplacement Benefits. The Executive shall receive
outplacement assistance and services following the Date of Termination for a
period of twelve (12) months. These services will be provided by a national firm
whose primary business is outplacement assistance, selected by the Company.
Notwithstanding the above, if the Executive accepts employment with another
employer, these outplacement benefits shall cease.
                    13.3.3.5 Financial Planning Services. The Executive shall
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the Date of Termination, at a level consistent with the benefits provided under
the Company’s financial planning program for the Executive and this Agreement as
in effect immediately prior to the Date of Termination.
                    13.3.3.6 Annual Physical. The Executive shall, within the
twelve (12) months following the Date of Termination, receive an annual physical
consistent with the physical provided under the Company’s annual physical
program as in effect immediately prior to the Date of Termination.
          13.4 Severance Benefits upon Involuntary Termination in Connection
with and after a Change in Control. Notwithstanding the provisions of
Section 13.3 above, in the event of the Involuntary Termination of the Executive
within twenty-four (24) months following a Change in Control (“CIC Protection
Period”), the Company shall, upon the execution of the Release required in
Section 17.5, pay to the Executive the following Post-Change in Control
Severance Payment in the following amounts and manner:
               13.4.1 The total payment will be equal to thirty six months
multiplied by the monthly Base Salary times two (2) (which is intended by the
parties to represent Base Salary plus target bonus for three years).
               13.4.2 The payment will be paid in a lump sum, less all
applicable taxes withheld, on the 60th day following the Date of Termination.
The payment of severance is specifically conditioned on and designated as
consideration for execution of the Release required in Section 17.5 and
compliance with Executive’s covenants outlined in Sections 17.1, 17.3 and 17.4.
               13.4.3 In addition to the Post-Change in Control Severance
Payment, the Executive shall be entitled to receive the following additional
benefits:
                    13.4.3.1 Accrued Obligations. The Company shall pay or
provide to the Executive the Accrued Obligations.
                    13.4.3.2 Equity Based Compensation. All equity-based
incentive awards (including, without limitation, stock options, stock
appreciation rights, restricted stock awards, restricted stock units,
performance share awards or other related awards) held by the Executive shall be
governed by the terms of the Equity Plan and the applicable Stock Option
Agreement or the applicable Restricted Agreement. All inducement grants shall be
governed by the terms of the Grant Agreement.
                    13.4.3.3 Welfare Benefits. The Executive (and his eligible
dependents) shall be eligible for health and dental coverage as provided for
under COBRA, using the normal COBRA administration process of the Company. The
Company shall pay directly the cost of COBRA participation. If the Executive
accepts employment with another employer and is no longer eligible for COBRA
coverage, these welfare benefits will cease to be provided. Notwithstanding the
foregoing, if the Executive has elected pursuant to Section 9 to provide medical
insurance personally, the Company shall continue to reimburse Executive on the

 

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same terms as provided in Section 9 for a period of twelve (12) months and the
foregoing provision with respect to COBRA shall not apply.
                    13.4.3.4 Outplacement Benefits. The Executive shall receive
outplacement assistance and services following the Date of Termination for a
period of twelve (12) months. These services will be provided by a national firm
whose primary business is outplacement assistance, selected by the Company.
Notwithstanding the above, if the Executive accepts employment with another
employer, these outplacement benefits shall cease.
                    13.4.3.5 Financial Planning Services. The Executive shall
receive financial planning services for a period of twelve (12) months following
the Date of Termination, at a level consistent with the benefits provided under
the Company’s financial planning program for the Executive and this Agreement as
in effect immediately prior to the Date of Termination.
                    13.4.3.6 Annual Physical. The Executive shall, within the
twelve (12) months following the Date of Termination, receive an annual physical
consistent with the physical provided under the Company’s annual physical
program as in effect immediately prior to the Date of Termination.
               13.4.4 Notwithstanding anything contained herein, if a Change in
Control occurs and the Executive’s employment with the Company is terminated by
reason of Involuntary Termination prior to the Change in Control Date, and if
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect the Change in Control or
(ii) otherwise arose in connection with or in anticipation of the Change in
Control, then the Executive shall, in lieu of the payments described in
Section 13.3 hereof, be entitled to the Post-Change in Control Severance Payment
and the additional benefits described in this Section 13.4 as if such
Involuntary Termination had occurred within twenty-four (24) months following
the Change in Control; provided that any additional cash severance which the
Executive is entitled to receive under Section 13.4 shall be paid on the later
of (i) the 60th day following the Date of Termination or (ii) the date of the
Change in Control.
          13.5 Severance Benefits upon Termination by the Company for Cause or
by the Executive Other than for Good Reason or Disability. If the Executive’s
employment shall be terminated for Cause, or if the Executive terminates
employment other than for Good Reason or Disability, the Company will have no
further obligations to the Executive under this Agreement other than the Accrued
Obligations.
          13.6 Severance Benefits upon Termination due to Death or Disability.
If the Executive’s employment shall terminate by reason of death, the Company
shall pay or provide to Executive’s estate the Accrued Obligations. If the
Executive’s employment shall terminate by reason of Disability, the Company
shall pay to Executive the Accrued Obligations. Such payments in the event of
death or Disability shall be in addition to those rights and benefits to which
the Executive or Executive’s estate may be entitled under the relevant Company
plans or programs, including any life or disability insurance. All equity-based
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awards(including, without limitation, stock options, stock appreciation rights,
restricted stock awards, restricted stock units, performance share awards or
other related awards) held by the Executive shall be governed upon death or
Disability by the terms of the Equity Plan and the applicable Stock Option
Agreement or the applicable Restricted Agreement. All inducement grants shall be
governed by the terms of the Grant Agreement.
          13.7 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive’s continuing or future participation in any
benefit, plan, program, policy or practice provided by the Company and for which
the Executive may qualify (except with respect to any benefit to which the
Executive has waived the Executive’s rights in writing), including, without
limitation, any and all indemnification arrangements in favor of the Executive
(whether under agreements or under the Company’s charter documents or
otherwise), and insurance policies covering the Executive, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
other contract or agreement entered into after the Effective Date with the
Company. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, program, policy or practice of, or any
contract or agreement with, the Company shall be payable in accordance with such
benefit, plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
     14. Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts
(including amounts for damages for breach) payable to the Executive under any of
the provisions of this Agreement, and such amounts shall not be reduced whether
or not the Executive obtains other employment.
     15. Indemnification. At all times during the Executive’s employment with
the Company and thereafter, the Company shall provide the Executive with
indemnification and director and officer insurance insuring the Executive
against events which occur or have occurred while the Executive was a director
or executive officer of the Company, on terms and conditions that are at least
as generous as those then provided to any other current or former director or
executive officer of the Company or any Affiliate. In addition, the Company
agrees that on the Effective Date it will enter into an indemnification
agreement with the Executive in the form attached hereto as Exhibit E (the
“Indemnification Agreement”).
     16. Representations. The Executive hereby represents to the Company that
the Executive is legally entitled to enter into this Agreement and to perform
the Executive’s obligations hereunder, and that the Executive has the full
right, power and authority to grant to the Company the rights herein.
     17. Executive’s Covenants. The Executive hereby agrees to the following:
          17.1 Confidentiality. The Executive recognizes and acknowledges that
the Company and its predecessor’s Confidential Information is a valuable,
special and unique asset of the Company’s businesses, access to and knowledge of
which are essential to the performance of the Executive’s duties. Confidential
Information shall include trade secrets and includes information acquired by the
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Company, including information acquired from third parties, that is (i) not
generally known or disseminated outside the Company (such as nonpublic
information), (ii) is designated or marked by the Company as “confidential” or
reasonably should be considered confidential or proprietary, or (iii) the
Company indicates through its policies, procedures or other instructions should
not be disclosed to anyone outside the Company. Without limiting the foregoing
definitions, some examples of Confidential Information under this Agreement
include (a) matters of a technical nature, such as scientific, trade or
engineering secrets, “know-how”, formulae, secret processes, inventions, and
research and development plans or projects regarding existing and prospective
customers, and products and services, (b) information about costs, profits,
markets, sales, customer lists, customer needs, customer preferences and
customer purchasing histories, supplier lists, internal financial data,
personnel evaluations, nonpublic information about medical devices or products
of the Company (including future plans about them), information and material
provided by third parties in confidence and/or with nondisclosure restrictions,
computer access passwords, and internal market studies or surveys and (c) any
other information or matters of a similar nature. The Executive shall not,
during his employment by the Company (other than in the ordinary course of
employment with the Company) or after the Executive’s employment by the Company,
in whole or in part, disclose such Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
nor shall the Executive make use of any such property for the Executive’s own
purposes or for the benefit of any person, firm, corporation, association or
other entity (except the Company) under any circumstances during or after the
Executive’s employment by the Company; provided, however, that these
restrictions shall not apply to such Confidential Information, if any, which is
in the public domain, and so long as the Executive was not responsible, directly
or indirectly, for such Confidential Information entering the public domain
without the Company’s consent. Notwithstanding anything to the contrary, the
provisions of this Section 17.1 shall not apply (i) when disclosure is required
by law or by legal process issued by any court, arbitrator, mediator or
administrative or legislative body (including any committee thereof) with
apparent jurisdiction to order the Executive to disclose or make accessible any
information; provided, however, that Executive shall, to the extent permitted by
law or such legal process, give immediate notice to the Company upon receipt of
any legal process that may compel disclosure of Confidential Information and
that the Executive shall, to the extent permitted by law or such legal process,
refrain from disclosure until Company shall have reasonable opportunity to
intervene or otherwise act to prevent compulsion of disclosure or to protect its
Confidential Information, (ii) with respect to any litigation, arbitration or
mediation involving this Agreement or any other agreement between or among the
parties hereto, including, without limitation, the Grant Agreement; provided,
however, that Executive will reasonably agree to such orders or agreements that
may be necessary to prevent public disclosure of Confidential Information, or
(iii) in connection with any assistance provided by the Executive pursuant to
Section 17.6.
          17.2 Inventions. The Executive hereby sells, transfers and assigns to
the Company or to any person or entity designated by the Company all of the
right, title and interest of the Executive in and to all inventions, ideas,
disclosures and improvements, whether patented or unpatented, and copyrightable
material, made or conceived by the Executive, solely or jointly, during the
Executive’s employment by the Company which relate to methods, apparatus,

 

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designs, products, processes or devices sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company, or which arise
from the efforts of the Executive during the Executive’s employment with the
Company. The Executive shall, during and after the Executive’s employment with
the Company, communicate promptly and disclose to the Company, in such form as
the Company requests and at the Company’s sole expense, all information, details
and data pertaining to the aforementioned inventions, ideas, disclosures and
improvements. The Executive shall, during and after the Executive’s employment
by the Company, at the Company’s sole expense, execute and deliver to the
Company such formal transfers and assignments and such other papers and
documents as may be necessary for the Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereof. Any
invention relating to the business of the Company and disclosed by the Executive
within one (1) year after the Executive’s employment with the Company ceases
shall be deemed to fall within the provisions of Section 17.2 unless proved to
have been first conceived and made following such termination or expiration.
          17.3 Non-Solicitation of Employees. The Executive recognizes that the
Executive possesses and will possess confidential information about other
employees of the Company and its Affiliates relating to their education,
experience, skills, abilities, compensation and benefits, and inter-personal
relationships with customers of the Company and its Affiliates. The Executive
recognizes that the information the Executive possesses and will possess about
these other employees is not generally known, is of substantial value to the
Company and its Affiliates in developing their business and in securing and
retaining customers, and has been and will be acquired by the Executive because
of the Executive’s business position with the Company and its Affiliates. The
Executive agrees that at all times during the Executive’s employment with the
Company and for a period of twenty four (24) months thereafter, the Executive
will not directly or indirectly through others, solicit or recruit or employ any
employee of the Company or its Affiliates for the purpose of being employed by
the Executive or by any competitor of the Company or its Affiliates on whose
behalf the Executive is acting as an agent, representative or employee and that
the Executive will not convey such confidential information or trade secrets
about other employees of the Company and its Affiliates to any other Person
(other than in the ordinary course of Executive’s employment by the Company);
provided, however, that it shall not constitute a solicitation or recruitment of
employment in violation of this paragraph to discuss employment opportunities
with any employee of the Company or its Affiliates if the Executive has first
discussed with and received the written approval of the Company’s Vice
President, Human Resources (or, if such position is vacant, the Company’s then
Chief Executive Officer), prior to making such solicitation or recruitment. The
post employment restriction period of this Section shall be modified to twelve
(12) months as it relates to the solicitation, recruitment and employment of any
person hired by the Company after September 17, 2011. In view of the nature of
the Executive’s employment with the Company, the Executive likewise agrees that
the Company and its Affiliates would be irreparably harmed by any such
solicitation or recruitment in violation of the terms of this paragraph and that
the Company and its Affiliates shall therefore be entitled to preliminary and/or
permanent injunctive relief prohibiting the Executive from engaging in any
activity or threatened activity in violation of the terms of this paragraph and
to any other relief available to them.

 

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          17.4 Non-Interference and Non-competition. During the Executive’s
employment by the Company and its Affiliates and for a period of twenty four
(24) months after such employment ceases, the Executive shall not, directly or
indirectly (whether as an officer, director, owner, employee, partner, or other
participant), engage in any Competitive Business. During this period, the
Executive shall not solicit or entice any customer, supplier, distributor, or
contractor, of the Company or its Affiliates which were known or should have
been known to the Executive, to make any changes whatsoever in their current
relationships with the Company or its Affiliates, and will not assist any other
Person or entity to interfere with or dispute such relationships. In view of the
nature of the Executive’s employment with the Company, the Executive likewise
agrees that the Company and its Affiliates would be irreparably harmed by any
such interference or competitive actions in violation of the terms of this
paragraph and that the Company and its Affiliates shall therefore be entitled to
preliminary and/or permanent injunctive relief prohibiting the Executive from
engaging in any activity or threatened activity in violation of the terms of
this paragraph and to any other relief available to them.
          17.5 Release. The Executive agrees that if the Executive’s employment
is terminated by the Company for any reason other than Cause, Disability or
death, the Executive will be required to execute a release of all claims
substantially in the form attached hereto as Exhibit F within forty-five
(45) days after the applicable Date of Termination to be eligible receive any
post employment payments of any kind under this Agreement other than the Accrued
Obligations. In the event that the Executive is covered under the Age
Discrimination in Employment Act (“ADEA”), the Executive will also be required
to execute the ADEA Release of all ADEA claims substantially in the form
attached hereto as Exhibit G within forty-five (45) days after the applicable
Date of Termination to be eligible receive any post employment payments of any
kind under this Agreement other than the Accrued Obligations. These two
documents are collectively referred to in this Agreement as the “Release.”
          The Executive recognizes and agrees that, notwithstanding any other
Section to the contrary, the Release must be executed and not revoked within the
time provided prior to the commencement of any post employment payments of any
kind under this Agreement other than the Accrued Obligations set forth in
Section 13.3.3.1.
          17.6 Cooperation with Legal Matters. Following termination of his
employment and provided such cooperation is not directly adverse to his legal
interests, the Executive agrees to cooperate with the Company and its designated
attorneys, representatives and agents in connection with any actual or
threatened judicial, administrative or other legal or equitable proceeding in
which the Company or any of its Affiliates is or may become involved. Upon
reasonable notice and subject to reasonable accommodation to the Executive’s
personal and business obligations, the Executive agrees to meet with and provide
to the Company or its designated attorneys, representatives or agents all
information and knowledge Executive may have relating to the subject matter of
any such proceeding. The Company agrees to reimburse Executive for any
reasonable costs incurred by Executive in providing such cooperation (including
the costs of separate representation if the Executive reasonably believes such
counsel is warranted under the circumstances) within 30 business days of receipt
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documentation of such expenses. Except as prohibited by law, Executive shall be
paid a per diem of $5,000 for his services under this Section 17.6.
          17.7 No Other Restrictions. Except as otherwise expressly set forth in
this Section 17, there are no other restrictions on the Executive’s
post-termination activities.
     18. Specific Remedies for Executive Breach of the Covenants as outlined in
Section 17. Without limiting the legal rights and remedies available to the
Company, in the event of any material breach by the Executive of the covenants
set forth in Section 17 above, the following actions may be taken by the
Company:
          18.1 After the Company has provided written notice to the Executive of
the events giving rise to the application of this Section 18.1 and has provided
him no less than ten (10) days to cure, the Company’s obligation to make any
payment or provide any benefits to the Executive under of this Agreement (except
those covered by COBRA) shall cease immediately and permanently if the Executive
fails to cure such breach to the reasonable satisfaction of the Company within
the time period provided herein, and such forfeiture shall not have any impact
whatsoever on the Executive’s continuing obligations under Section 17.
          18.2 Unless the breach is cured timely to the satisfaction of the
Company within the time provided in Section 18.1, the Executive shall repay to
the Company, within ten (10) days after the Executive receives written demand
therefore, an amount equal to thirty (30%) of the post employment payments and
benefits previously received by the Executive under this Agreement, plus
interest on such amount at an annual rate equal to the lesser of ten (5%)
percent or the maximum non usurious rate under Tennessee law from the date on
which such payments and benefits were received until the date of repayment to
the Company. The repayment provision of this Section 18.2 shall only apply if
Executive’s employment was terminated by the Company for Cause or if the
Executive voluntarily terminates his employment for any reason other than a Good
Reason.
          18.3 It is the desire and intent of the parties that the provisions of
Section 17 be enforced to the fullest extent permissible under the applicable
laws in each jurisdiction in which enforcement is sought. Accordingly, if any
portion of Section 17 is adjudicated to be invalid or unenforceable, Section 17
shall be deemed curtailed, whether as to time or location, to the minimum extent
required for its validity under applicable law and shall be binding and
enforceable with respect to the Executive as so curtailed, such curtailment to
apply only with respect to the operation of Section 17 in the jurisdiction in
which the such adjudication is made. If a court in any jurisdiction, in
adjudicating the validity of Section 17, imposes any additional terms or
restrictions, then Section 17 shall be deemed amended to incorporate such
additional terms or restrictions.
          18.4 Executive agrees and acknowledges that Executive has received
good and adequate consideration for the covenants set forth in Section 17 in the
form of employment, compensation and benefits separate and independent of any
post employment payments or potential payments in this Agreement.

 

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     19. Potential Impact of Accounting Restatements on Certain Bonuses and
Profits.
          19.1 If the Company is required to prepare an accounting restatement
of the Company’s consolidated balance sheet or statement of operations affecting
any reporting period that transpires during the Term due to the material
noncompliance of the Company with any financial requirements under the Federal
securities laws and if such material non-compliance is a direct result of the
Executive’s knowing, intentional, fraudulent or illegal conduct, then the Board
can require the Executive to reimburse the Company for (i) any bonus or other
incentive-based or equity-based compensation received by the Executive from the
Company during the Term and (ii) any profits realized from the sale of
securities of the Company by the Executive during the Term.
          19.2 In making the determination whether to seek reimbursement from
the Executive and in making the determination of what portion of the Executive’s
compensation and/or profits should be returned to the Company, the Board will
seek to achieve a result that is fair to the Executive and the Company and, in
that connection, the Board will consider whether any bonus, incentive payment,
equity award or other compensation has been awarded or received by the Executive
during the Term, whether the Executive realized any profits from the sale of
securities of the Company during the Term, whether and the extent to which such
compensation and/or profits were based on financial results and operating
metrics that were satisfied as a result of the Executive’s knowing, intentional,
fraudulent or illegal conduct, and what the Executive’s compensation and/or
profits would have been in the absence of the reporting issue. The Board has the
sole discretion in determining whether the Executive’s conduct has or has not
met the standard for such forfeiture and the amount of the forfeiture.
          19.3 If the Board of Directors determines that forfeiture is
appropriate as set forth in Section 19.1, such amounts shall be withheld from
any future amounts owed to the Executive as compensation. The Company may also
commence legal action to collect such sums as the Board determines are owed to
the Company.
          19.4 Any determination made by the Board under this Section 19 shall
be subject to de novo review in any litigation commenced by the Executive in
accordance with Section 21.2.
          19.5 The parties agree that this Section will be amended as necessary
to comply with any new rules or regulations issued by the Securities Exchange
Commission during the Term which are or become mandatorily applicable to this
Agreement.
     20. Successors.
          20.1 Assignment by the Executive. This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s legal representatives. If the

 

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Executive should die while any payment, benefit or entitlement is due to him
under this Agreement, such payment, benefit or entitlement shall be paid or
provided to his estate.
          20.2 Successors and Assigns of the Company. This Agreement shall inure
to the benefit of and be binding upon the Company and its successors and
assigns. The Company may not assign this Agreement to any person or entity
(except for a successor described in Section 20.3 and 21.4 below) without the
Executive’s written consent.
          20.3 Assumption. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company and/or Wright
Medical Technology, Inc. to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.
     21. Miscellaneous.
          21.1 Governing Law. This Agreement shall be governed by, construed
under and enforced in accordance with the laws of the State of Tennessee without
regard to conflicts-of-laws principles that would require the application of any
other law. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
          21.2 Selection of Venue. Any action to enforce the terms of this
Agreement shall be brought in the state or federal courts located in Shelby
County, Tennessee and both parties agree to submit to and not contest such
jurisdiction and venue in such courts.
          21.3 Amendment. This Agreement may not be amended, modified, repealed,
waived, extended or discharged except by an agreement in writing executed by all
parties. No person, other than pursuant to a resolution of the Board or the
Compensation Committee, shall have authority on behalf of the Company to agree
to amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference thereto.
          21.4 Assignment. This Agreement may be assigned, without the consent
of the Executive, by the Company to any person, partnership, corporation, and
association or other entity which has purchased all or substantially all the
assets of the Company or Wright Medical Technology, Inc., provided that such
assignee assumes all the liabilities of the Company hereunder as provided in
Section 20.3.
          21.5 Insurance. The Company may, at its election and for its benefit,
insure the Executive against accidental loss or death, and the Executive shall
submit to such physical examination and supply such information to the insurance
company as may be required in connection therewith; provided, however, that no
specific information concerning the Executive’s physical examination will be
provided to the Company or made available to the Company by the insurance
company.

 

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          21.6 Waiver of Breach. A waiver by the Company or the Executive of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach of the other party.
          21.7 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
          21.8 Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by personal delivery, by
a nationally recognized overnight courier (provided a written acknowledgement of
receipt is obtained) or by certified or express mail to the Executive at 2609
Barcelona Drive, Fort Lauderdale, Florida 33301, or to the Company at Wright
Medical Technology, Inc., Attention: General Counsel, 5677 Airline Road,
Arlington, Tennessee 38002, or to such other address as either party shall
notify the other. Notices and communications shall be effective when actually
received by the addressee.
          21.9 Taxes.
               21.9.1 General. The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
               21.9.2 Code Section 409A.
                    21.9.2.1 Notwithstanding anything else to the contrary
herein, to the maximum extent permitted, this Agreement shall be interpreted to
be exempt from Code Section 409A or in compliance therewith, as applicable. In
furtherance thereof, if payment or provision of any amount or benefit hereunder
at the time specified in this Agreement would subject such amount or benefit to
any additional tax under Code Section 409A, the payment or provision of such
amount or benefit shall be postponed to the earliest commencement date on which
the payment or the provision of such amount or benefit could be made without
incurring such additional tax (including paying any severance that is delayed in
a lump sum upon the earliest possible payment date which is consistent with Code
Section 409A). In addition, to the extent that any regulations or guidance
issued under Code Section 409A (after application of the previous provision of
this paragraph) would result in the Executive being subject to the payment of
interest or any additional tax under Code Section 409A, the Company and the
Executive agree, to the extent reasonably possible, to amend this Agreement in
order to avoid the imposition of any such interest or additional tax under Code
Section 409A, which amendment shall have the least possible economic effect on
the Executive as reasonably determined in good faith by the Company and the
Executive; provided however, that the Company and the Executive shall not be
required to substitute a cash payment for any non-cash benefit herein.
                    21.9.2.2 A termination of employment shall not be deemed to
have occurred for purposes of any provision of this Agreement providing for the
payment of

 

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any amounts or benefits that are considered nonqualified deferred compensation
under Code Section 409A upon or following a termination of employment, unless
such termination is also a “separation from service” within the meaning of Code
Section 409A and the payment thereof prior to a “separation from service” would
violate Code Section 409A. For purposes of any such provision of this Agreement
relating to any such payments or benefits, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service.”
                    21.9.2.3 For purposes of Code Section 409A, the Executive’s
right to receive any installment payments pursuant to this Agreement shall be
treated as a right to receive a series of separate and distinct payments.
Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty
(30) days following the date of termination”), the actual date of payment within
the specified period shall be within the sole discretion of the Company, as the
case may be.
                    21.9.2.4 With respect to any payment constituting
nonqualified deferred compensation subject to Code Section 409A: (A) all
expenses or other reimbursements provided herein shall be payable in accordance
with the Company’s policies in effect from time to time, but in any event shall
be made on or prior to the last day of the taxable year following the taxable
year in which such expenses were incurred by the Executive; (B) no such
reimbursement or expenses eligible for reimbursement in any taxable year shall
in any way affect the expenses eligible for reimbursement in any other taxable
year; and (C) the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchanged for another benefit.
                    21.9.2.5 If the Executive is deemed on the Date of
Termination to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B), then with regard to any payment or the provision of any
benefit that is considered nonqualified deferred compensation under Code Section
409A payable on account of a “separation from service,” such payment or benefit
shall be made or provided on the first business day following the date which is
the earlier of (A) the expiration of the six (6)-month period measured from the
date of such “separation from service” of the Executive, and (B) the date of the
Executive’s death (the “Delay Period”). Upon the expiration of the Delay Period,
all payments and benefits delayed pursuant to this Section (whether they would
have otherwise been payable in a single sum or in installments in the absence of
such delay) shall be paid or reimbursed to the Executive in a lump sum on the
first business day following the Delay Period, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.
               21.9.3 Section 280G. The provisions set forth in Exhibit H hereto
are hereby incorporated into this Agreement by this reference, and the Executive
shall be entitled to the benefit of those provisions. This Section 21.9.3 and
the provisions set forth in Exhibit H hereto shall be expressly assumed by any
successor to the Company.

 

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          21.10 Entire Agreement. This Agreement contains the entire agreement
of the parties with respect to the subject matter referred to herein and
supersedes any and all prior negotiations, understandings, arrangements, letters
of intent, and agreements, whether written or oral, between the Executive and
the Company and its Affiliates, or any of its or their directors, officers,
employees or representatives with respect thereto. This Agreement shall be
effective and binding on the parties as of the date it is executed. In the event
of any conflict between any provisions of this Agreement (including its
Exhibits) and the provisions of any plan, program or policy of the Company or
any of its Affiliates, the Agreement and its Exhibits shall govern.
          21.11 Survivability. Except as otherwise expressly set forth in this
Agreement, upon the termination or the expiration of the Term, the respective
rights of the parties shall survive such termination or expiration to the extent
necessary to carry out the intentions of the parties hereto. The Agreement shall
continue in effect until there are no further rights or obligations of the
parties hereto outstanding hereunder and shall not be terminated by any party
without the express written consent of all parties.
          21.12 No Right of Employment. Nothing in this Agreement shall be
construed as giving the Executive any right to be retained in the employ of the
Company or shall interfere in any way with the right of the Company to terminate
the Executive’s employment at any time, with or without Cause.
          21.12 Unfunded Obligation. The obligations under this Agreement shall
be unfunded. Benefits payable under this Agreement shall be paid from the
general assets of the Company. The Company shall have no obligation to establish
any fund or to set aside any assets to provide benefits under this Agreement.
          21.13 Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to
the contrary, if the Company receives a written opinion of independent counsel
selected by the Company and reasonably acceptable to the Executive that any
provision of this Agreement is likely to be interpreted as a personal loan
prohibited by the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated there under (the “Act”), then such provision shall be modified as
necessary or appropriate so as to not violate the Act; and if this cannot be
accomplished, then the Company shall use its best efforts to provide the
Executive with similar, but lawful, substitute benefit(s) at a cost to the
Company not to significantly exceed the amount the Company would have otherwise
paid to provide such benefit(s) to the Executive. In addition, if the Executive
is required to forfeit or to make any repayment of any compensation or
benefit(s) to the Company under the Act or any other law, such forfeiture or
repayment shall not constitute Good Reason.
          21.14 Public Announcement. This Agreement is being executed by the
parties hereto on September 17, 2011. No public announcement with respect to
this Agreement or the employment of the Executive by the Company shall be made
until after this Agreement has been executed by both parties. The text of any
such public announcement shall be subject to the prior approval of the Executive
and the Company (such approval not to be unreasonably withheld).

 

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          21.15 Attorneys’ Fees. Should either party file any action to enforce
any term of this Agreement, the prevailing party shall be entitled to recover
all reasonable attorney’s fees and litigation costs. The Company agrees to pay
directly to the Executive’s legal counsel reasonable attorneys’ fees and other
expenses incurred by the Executive in connection with the review and negotiation
of this Agreement.
          21.16 Execution. This Agreement and its Exhibits may be executed in
several counterparts each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Agreement and its
Exhibits may be executed by signatures delivered by facsimile or in pdf or other
electronic format, which shall be deemed to be an original.

 

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first stated above.
AGREED AND ACCEPTED

            EXECUTIVE
      /s/ Robert J. Palmisano     Robert J. Palmisano        WRIGHT MEDICAL
GROUP, INC.
      By:   /s/ David D. Stevens     Title:   Interim CEO and Chairman  

 

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EXHIBIT A
INDUCEMENT STOCK OPTION GRANT AGREEMENT
WRIGHT MEDICAL GROUP, INC.
Inducement Stock Option Grant Agreement

     
Award Granted to (“Grantee”):
  Robert J. Palmisano
 
   
Grant Date:
  September 17, 2011
 
   
Number of Shares (“Shares”):
  610,000
 
   
Option Price:
  $16.03

     THIS INDUCEMENT STOCK OPTION GRANT AGREEMENT (the “Agreement”) is made as
of the Grant Date by and between Wright Medical Group, Inc., a Delaware
corporation with its principal place of business at 5677 Airline Road,
Arlington, Tennessee 38002 (the “Company”) and Robert J. Palmisano (the
“Grantee”) pursuant to the terms of this Agreement.
     WHEREAS, the Compensation Committee of the Board of Directors of the
Company (the “Board”) has decided to grant the option and right to purchase the
Company’s Common Stock (the “Stock”) to induce Grantee to commence employment
with the Company and/or a Related Entity (as defined in this Agreement), to
strengthen Grantee’s commitment to the welfare of the Company, and to promote an
identity of interest between the Company’s stockholders and Grantee; and
     WHEREAS, pursuant to this Agreement the Compensation Committee of the Board
has authorized that Grantee be granted the right and option to purchase from the
Company the Shares of Stock subject to the terms and restrictions stated below.
     NOW, THEREFORE, the parties agree as follows:

1.   Definitions. Terms defined in this Agreement, including the introduction
and recitals, shall have the meaning set forth herein. The following definitions
shall be applicable to this Agreement:

  1.1   “Cause” shall mean the Company having cause to terminate Grantee’s
employment or service in accordance with the provisions of any existing
employment agreement between Grantee and the Company or, in the absence of such
an employment, consulting or other agreement, upon (i) the determination by the
Committee that Grantee has ceased to perform Grantee’s duties to the Company or
a Related Entity (other than as a result of Grantee’s incapacity due to physical
or mental illness or injury), which failure amounts to intentional and extended
neglect of Grantee’s duties, (ii) the Committee’s determination that Grantee has
engaged or is about to engage in conduct injurious to the Company or a Related
Entity, or (iii) Grantee having plead no contest to a charge of a felony or
having been convicted of a felony.     1.2   “Committee” shall mean the full
Board, the Compensation Committee of the Board, or such other committee that the
Board may appoint to administer this Agreement.     1.3   “Change of Control”
shall mean a Change in Control as that term is defined in any existing
employment agreement between Grantee and the Company or, in the absence of such
an employment agreement, shall mean the first to occur on or after the Grant
Date of any of the following:

 

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(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 50% or more (on a fully
diluted basis) of either (A) the then outstanding shares of Stock, taking into
account as outstanding for this purpose such Stock issuable upon the exercise of
options or warrants, the conversion of convertible stock or debt, and the
exercise of any similar right to acquire such Stock (the “Outstanding Company
Common Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (x) any acquisition by the Company or any
“affiliate” of the Company, within the meaning of 17 C.F.R. § 230.405 (an
“Affiliate”), (y) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate, or (z) any
acquisition by any corporation or business entity pursuant to a transaction
which complies with clauses (A) and (B) of subsection (a) of this
Section 0(persons and entities described in clauses (x), (y), and (z) being
referred to herein as “Permitted Holders”);
(b) The consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any Permitted Holder) beneficially owns, directly or
indirectly, 50% or more (on a fully diluted basis) of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination, taking into account as outstanding for this purpose such
common stock issuable upon the exercise of options or warrants, the conversion
of convertible stock or debt, and the exercise of any similar right to acquire
such common stock, or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the incumbent Board at the time of the execution of
the initial agreement providing for such Business Combination;
(c) The approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company;
(d) The sale of at least 80% of the assets of the Company to an unrelated party,
or completion of a transaction having a similar effect; or
(e) The individuals who on the date of this Agreement constitute the Board
thereafter cease to constitute at least a majority thereof; provided that any
person becoming a member of the Board subsequent to the date of this Agreement
and whose election or nomination was approved by a vote of at least two-thirds
of the directors who then comprised the Board

 

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      immediately prior to such vote shall be considered a member of the Board
on the date of this Agreement.     1.4   “Code” means the Internal Revenue Code
of 1986, as amended. Reference in this Agreement 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.     1.5   “Disability” shall
mean Disability as that term is defined in any existing employment, consulting
or any other agreement between Grantee and the Company or a Related Entity or,
in the absence of such an employment, consulting or other agreement, shall mean
the complete and permanent inability by reason of illness or accident to perform
the duties of the occupation at which Grantee was employed or served when such
disability commenced or, if Grantee 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.    
1.6   “Eligible Person” shall mean (i) a 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 related thereto, (ii) director of the
Company or any Related Entity; or (iii) consultant to the Company or any Related
Entity.     1.7   “Fair Market Value” on a given date shall mean (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.     1.8   “Related Entity” shall mean means, when referring to a
subsidiary, any business entity (other than the Company) which, at the Grant
Date, 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 Grant Date,
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.

2.   Grant of Options. Subject to the terms and conditions of this Agreement,
the Company hereby grants to Grantee the right and option (the right to purchase
any one share of Stock under this Agreement being an “Option”) during the period
commencing on the Grant Date and, subject to Section 0 of this Agreement, ending
on the 10th anniversary of the Grant Date (the “Expiration Date”) to purchase
from the Company the Shares. Each Option shall have an exercise price per share
equal to the Option Price indicated above. The Options are not designated as
incentive stock options within the meaning of Section 422 of the Code.

 

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3.   Vesting Schedule. The Options shall vest as to one-third (1/3) of the
Shares on the first anniversary of the Grant Date, and as to an additional
one-third (1/3) on each succeeding anniversary date, so as to be 100% vested on
the third anniversary of the Grant Date, conditioned upon Grantee maintaining
status as an Eligible Person as of each vesting date. Notwithstanding the
foregoing, (A) the interest of Grantee to the Options shall vest as to 100% of
the then unvested Options upon a Change of Control, (B) the Committee may in its
sole discretion accelerate the exercisability of the Options, provided that such
acceleration shall not affect the terms and conditions of any such Options other
than with respect to exercisability or (C) the Options shall vest as to 100% of
the then unvested Options if Grantee’s employment is terminated by the Company
for other than “Cause” or by the Grantee for “Good Reason” under the terms of
Grantee’s employment agreement or as a result of the Disability or death of
Grantee.   4.   Expiration of Options. The Option shall expire and cease to be
exercisable as to any share of Stock, when Grantee purchases the share or the
Expiration Date. Notwithstanding the foregoing, if prior to the Expiration Date
Grantee ceases to be an Eligible Person, the Options shall expire on the earlier
of (i) the Expiration Date or (ii) the date that is three years after the date
upon which Grantee ceased to be an Eligible Person unless Grantee ceased to be
an Eligible Person because of death or Disability (as that term is defined in
Grantee’s employment agreement) or (iii) the date that is one year after the
date upon which Grantee ceased to be an Eligible Person because of death or
Disability. The Options shall remain exercisable by Grantee until expiration
only to the extent the Options were exercisable at the time that Grantee ceased
to be an Eligible Person or became exercisable due to one of the following: a
Change of Control, Grantee’s employment being terminated by the Company for
other than “Cause” under the terms of Grantee’s employment agreement, Grantee’s
resignation for a “Good Reason” under the terms of the Grantee’s employment
agreement or the Disability or death of the Grantee.   5.   Restrictions.

  5.1   Except as specifically authorized by the Committee, Grantee may not
sell, assign, donate, or transfer or otherwise dispose of, mortgage, pledge or
encumber Grantee’s rights and interest in the Options, except, in the event of
Grantee’s death, to a designated beneficiary, or in the absence of such
designation, by will or the laws of descent and distribution or, in the event of
Grantee’s incapacity, Grantee’s 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.     5.2  
By accepting the Options, Grantee represents and agrees for Grantee and
Grantee’s transferees (whether by will or the laws of descent and distribution)
Grantee shall comply with the restrictive covenants contained in any existing
employment agreement between Grantee and the Company or, in the absence of such
an employment agreement, that:         (a) For the period commencing on the
Grant Date and ending on the first anniversary of the date upon which Grantee
loses status as an Eligible Person (such period is hereinafter referred to as
the “Covenant Period”), with respect to any state in which the Company is
engaged in business during Grantee’s employment with the Company, Grantee shall
not participate or engage, directly or indirectly, for Grantee or on behalf of
or in conjunction with any person, partnership, corporation or other entity,
whether as an employee, agent, officer, director, stockholder, partner, joint
venturer, investor or otherwise, in any business activities if such activity
consists of any activity undertaken or expressly planned to be undertaken by the
Company or any of its subsidiaries or by Grantee at any time during which
Grantee maintained status as an Eligible Person.

 

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    (b)   Except with the Company’s prior written approval or as may otherwise
be required by law or legal process, Grantee shall not disclose any material or
information which is confidential to the Company or its subsidiaries and not in
the public domain or generally known in the industry, whether tangible or
intangible, made available, disclosed or otherwise known to Grantee as a result
of Grantee’s status as an Eligible Person.       (c) During the Covenant Period,
Grantee shall not attempt to influence, persuade or induce, or assist any other
person in so persuading or inducing, any employee of the Company or its
subsidiaries to give up, or to not commence, employment or a business
relationship with the Company.

  5.3   The Company shall have the right, but not the obligation, to purchase
and acquire from Grantee any or all of the Shares previously acquired by Grantee
upon exercise of an Option (the “Repurchased Shares”) if the Committee
reasonably determines that Grantee has violated materially the covenants set
forth in this Agreement while the Grantee is an Eligible Person or following
Grantee’s loss of status as an Eligible Person as a result of termination of
employment for Cause or Grantee’s loss of status as an Eligible Person could
have resulted from termination of employment for Cause. The Company may exercise
the right granted to it under this Section 0 by delivering written notice to
Grantee stating that the Company is exercising the repurchase right granted to
it under this Section 0. The delivery of such notice by the Company to Grantee
shall constitute a binding commitment of the Company to purchase and acquire all
of the Repurchased Shares. The total purchase price for the Repurchased Shares
shall be delivered to the Grantee against delivery by Grantee of certificates
evidencing the Repurchased Shares no later than thirty days after the delivery
of the election notice by the Company. The price per share of the Repurchased
Shares shall be the lesser of 1) the Fair Market Value of each of the
Repurchased Shares on the date of the Company’s delivery of its written notice
to Grantee or 2) the Option Price.     5.4   The Company shall have the right,
and not the obligation, to cancel any or all of the Options if the Committee
reasonably determines that Grantee has violated materially the covenants set
forth in Section 5.2 of this Agreement while the Grantee is an Eligible Person
or following Grantee’s loss of status as an Eligible Person as a result of
termination of employment for Cause. The Company may exercise the right granted
to it under this Section 0by delivering a written notice to Grantee stating that
the Company is exercising the cancellation right granted to it under this
Section 0.     5.5   Notwithstanding anything in this Section 0 to the contrary,
the Company shall not be obligated to purchase any Stock at any time to the
extent that the purchase would result in a violation of any law, statute, rule,
regulation, order, writ, injunction, decree or judgment promulgated or entered
by any Federal, state, local or foreign court or governmental authority
applicable to the Company or any of its property.     5.6   The parties intend
the restrictions in Section 0to be completely severable and independent, and any
invalidity or unenforceability of any one or more such restrictions shall not
render invalid or unenforceable any one or more restrictions.

6.   Exercise; Payment for and Delivery of Shares. The Options or any portion
thereof that is exercisable shall be exercisable for the full amount or for any
part thereof.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

 

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    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. Payment in currency or
by certified or cashier’s check shall be considered payment in cash. Each share
of Stock purchased through the exercise of an Option shall be paid for in full
at the time of the exercise.   7.   Stockholder Rights. Grantee or a transferee
of the Options shall have no rights as a stockholder with respect to any Shares
covered by the Options until Grantee shall have become the holder of record of
such Shares (and the Company shall use its reasonable best efforts to cause
Grantee to become the holder of record of such Shares), and, except as provided
in Section 0 of this Agreement, no adjustment shall be made for dividends or
distributions or other rights in respect of such Shares for which the record
date is prior to the date upon which he or she shall become the holder of record
thereof.   8.   Changes in Capital Structure. 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, Grantee. 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 Grantee 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 stockholders 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 ten days advance
notice to the affected persons, cancel any outstanding Options and pay to
Grantee, in cash, the value of such Options based upon the price per share of
Stock received or to be received by other stockholders of the Company in such
event and the per share exercise price of the Options.

9.   Requirements of Law.

  9.1   By accepting the Options, Grantee represents and agrees for Grantee and
any transferees (whether by will or the laws of descent and distribution) that,
unless a registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), is in effect as to the shares purchased upon any
exercise of the Options, (i) any and all Shares so purchased shall be acquired
for his personal account and not with a view to or for sale in connection with
any distribution, and (ii) each notice of the exercise of any portion of this
Option shall be accompanied by a representation and warranty in writing, signed
by the person entitled to

 

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      exercise the same, that the Shares are being so acquired in good faith for
his personal account and not with a view to or for sale in connection with any
distribution.     9.2   No certificate or certificates for Shares may be
purchased, issued or transferred if the exercise hereof or the issuance or
transfer of such Shares shall constitute a violation by the Company or Grantee
of any (i) provision of any Federal, state or other securities law,
(ii) requirement of any securities exchange listing agreement to which the
Company may be a party, or (iii) other requirement of law or of any regulatory
body having jurisdiction over the Company. Any reasonable determination in this
connection by the Company, upon notice given to Grantee, shall be final, binding
and conclusive.Notwithstanding any terms or conditions of this Agreement to the
contrary, the Company shall be under no obligation to offer to sell or to sell
and shall be prohibited from offering to sell or selling any Shares of Stock
pursuant to the Options unless such Shares have been properly registered for
sale pursuant to the Securities Act with the Securities and Exchange Commission
or unless the Company has received an opinion of counsel, satisfactory to the
Company, that such Shares may be offered or sold without such registration
pursuant to an available exemption therefrom and the terms and conditions of
such exemption have been fully complied with. The Company shall be under no
obligation to register for sale under the Securities Act any of the Shares of
Stock to be offered or sold under this Agreement.     9.3   The certificates
representing Shares of Stock acquired pursuant to the exercise of Options shall
carry such appropriate legend, and such written instructions shall be given to
the Company’s transfer agent, as may be deemed necessary or advisable by counsel
to the Company in order to comply with the requirements of the Securities Act or
any state securities laws.     9.4   The obligation of the Company to make
payment upon the exercise of Options shall be subject to all applicable laws,
rules, and regulations, and to such approvals by governmental agencies as may be
required.

10.   Taxes. Grantee understands that Grantee may recognize income for federal
and, if applicable, state income tax purposes upon exercise of Options. Grantee
shall be liable for any and all taxes, including withholding taxes, arising out
of the grant of the Options or their exercise hereunder. By accepting the
Options, Grantee covenants to report such income in accordance with applicable
federal and state laws. To the extent that the exercise of Options results in
income to Grantee and withholding obligations of the Company, including federal
or state withholding obligations, Grantee agrees that the obligation shall be
satisfied in the manner Grantee has chosen prior to the exercise of the Options
by checking one of the following boxes:

  ¨ At least one working day prior to the exercise date Grantee may deliver to
the Company an amount of cash determined by the Company to be adequate to
satisfy the Company’s withholding obligation. If Grantee does not deliver such
amount of cash, the Company shall withhold an amount of the Grantee’s current or
future remuneration in an amount that satisfies the Company’s withholding
obligation. Notwithstanding the foregoing, the Company may in its sole
discretion withhold from the Shares to be issued the specific number of Shares
having a fair market value on the vesting date equal to the amount required to
satisfy the Company’s withholding obligation.

  ¨   The Company shall retain and instruct a registered broker(s) to sell such
number of Shares issued upon exercise of Options necessary to satisfy the
Company’s withholding obligations, after deduction of the broker’s commission,
and the broker shall remit to the Company the cash necessary in order for the
Company to satisfy its withholding obligations. Grantee

 

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covenants to execute any such documents as are requested by the broker of the
Company in order to effectuate the sale of the Shares and payment of the tax
obligations to the Company. The Grantee represents to the Company that, as of
the date hereof, he or she is not aware of any material nonpublic information
about the Company or the Shares. The Grantee and the Company have structured
this Agreement to constitute a “binding contract” relating to the sale of Shares
pursuant to this Section, consistent with the affirmative defense to liability
under Section 10(b) of the Exchange Act under Rule 10b5-1(c) promulgated under
the Exchange Act.*

11.   Governing Law; Venue.

  11.1   The grant of Options and the provisions of this Agreement are governed
by, and subject to, the laws of the State of Delaware, without regard to the
conflict of law provisions thereof.     11.2   For purposes of litigating any
dispute that arises under this grant or the Agreement, the parties hereby submit
to and consent to the jurisdiction of the State of Tennessee,agree that such
litigation shall be conducted in the courts of Shelby County, Tennessee, or the
federal courts for the United States for the Western District of Tennessee,
where this grant is made and/or to be performed.

12.   Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to the Options by electronic means and/or
administer the Options through electronic means. Grantee hereby consents to
receive such documents by electronic delivery and agrees to the administration
of the Options through an on-line or electronic system established and
maintained by the Company or a third party designated by the Company.   13.  
Prohibition on Repricing. Without the prior approval of the Company’s
stockholders, the Company shall not, and the Committee shall not authorize the
Company to, (i) amend this Option to reduce its Option Price or (ii) cancel this
Option and replace it with the grant of any new equity award with a higher
intrinsic value. This prohibition on Option repricing shall not be construed to
prohibit the adjustments for extraordinary changes in the Company’s capital
structure that are otherwise permitted under Section 0of this Agreement.   14.  
Designation and Change of Beneficiary. Grantee may file with the Committee a
written designation of one or more persons as the beneficiary who shall be
entitled to receive the rights or amounts payable with respect to the Options
upon Grantee’s death. Grantee may, from time to time, revoke or change Grantee’s
beneficiary designation without the consent of any prior beneficiary by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to Grantee’s death, and in no event shall it be effective as of
a date prior to such receipt. If no beneficiary designation is filed by Grantee,
the beneficiary shall be deemed to be Grantee’s spouse or, if Grantee is
unmarried at the time of death, Grantee’s estate.

15.   Payments to Persons other than Grantee. If the Committee shall find that
any person to whom any amount is payable under this Agreement is unable to care
for such person’s affairs because of illness or accident, or is a minor, or has
died, then any payment due to such person or such person’s estate

 

*   By selecting the second option, Grantee understands that the sale of Shares
to satisfy the Company’s withholding obligations will be considered a sale for
purposes of short-swing liability under Section 16(b) of the Exchange Act. Any
profit realized in a purchase of shares of the Company’s stock within six months
of the sale may be recovered by the Company or by a stockholder of the Company
on behalf of the Company.

 

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    (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs, be paid to such person’s
spouse, child, relative, an institution maintaining or having custody of such
person, or any other person deemed by the Committee to be a proper recipient on
behalf of such person otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Committee and the Company therefor.  
16.   Administration; No Liability of Committee Members. This Agreement shall be
administered by the full Board or the Committee. The majority of the members of
the Committee shall constitute a quorum. The acts of a majority of the members
of the Committee present at any meeting at which a quorum is present or acts
approved in writing by a majority of the Committee shall be deemed to be the
acts of the Committee. No member of the Committee shall be personally liable by
reason of any contract or other instrument executed by such member or on such
member’s behalf in such member’s capacity as a member of the Committee nor for
any mistake of judgment made in good faith, and the Company shall indemnify and
hold harmless each member of the Committee and each other employee, officer or
director of the Company to whom any duty or power relating to the administration
or interpretation of this Agreement may be allocated or delegated, against any
cost or expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with this Agreement unless arising out of such person’s own fraud or willful bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
certificate of incorporation or bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.   17.  
Funding. No provision of this Agreement shall require the Company, for the
purpose of satisfying any obligations under this Agreement, to purchase assets
or place any assets in a trust or other entity to which contributions are made
or otherwise to segregate any assets, nor shall the Company maintain separate
bank accounts, books, records or other evidence of the existence of a segregated
or separately maintained or administered fund for such purposes. Grantee shall
have no rights under this Agreement other than as an unsecured general creditor
of the Company, except that insofar as he may have become entitled to payment of
additional compensation by performance of services, he shall have the same
rights as other employees under general law.   18.   Reliance on Reports. Each
member of the Committee and each member of the Board shall be fully justified in
relying, acting or failing to act, and shall not be liable for having so relied,
acted or failed to act in good faith, upon any report made by the independent
public accountant of the Company and any Related Entity and upon any other
information furnished in connection with this Agreement by any person or persons
other than himself.   19.   Relationship to Other Benefits. No payment under
this Agreement shall be taken into account in determining any benefits under any
pension, retirement, profit sharing, group insurance or other benefit plan of
the Company except as otherwise specifically provided in such other plan.   20.
  Miscellaneous.

  20.1.   The Company shall not be required (i) to transfer on its books any
shares of Stock of the Company which have been sold or transferred in violation
of any provisions set forth in this Agreement, or (ii) to treat as owner of such
shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.

 

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  20.2   The parties agree to execute such further instruments and to take such
action as may be reasonably necessary to carry out the intent of this Agreement.
    20.3   Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon delivery to Grantee at the address of
Grantee then on file with the Company.     20.4   This Agreement shall not, nor
shall any provision hereunder, be construed so as to grant Grantee any right to
remain associated with the Company or any of its affiliates.     20.5   The
expenses of administering the Agreement shall be borne by the Company.     20.6
  The titles and headings of the sections in the Agreement are for convenience
of reference only, and in the event of any conflict, the text of the Agreement,
rather than such titles or headings shall control.     20.7   This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and may be amended only by a written instrument entered into
between Company and Grantee.

 

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     This Agreement and the Options evidenced by this Agreement will not be
effective until an original signed Agreement is received by the Wright Medical
Group, Inc. Legal Department. Please print and sign this Agreement immediately,
then send the signed Agreement to the Wright Medical Group, Inc. Legal
Department as soon as possible.
          AGREED AND ACCEPTED:

             
GRANTEE:
    WRIGHT MEDICAL GROUP, INC.  
 
           
/s/ Robert J. Palmisano
    By:   /s/ David D. Stevens  
 
         
Robert J. Palmisano
      David D. Stevens, Chairman of the Board  

 

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EXHIBIT B
2009 EQUITY INCENTIVE PLAN
WRIGHT MEDICAL GROUP, INC.
2009 EQUITY INCENTIVE PLAN
     1. Purpose.
     (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

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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.

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     (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;

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          (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

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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.

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     (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.
     (g) Prohibition on Option Repricing. Subject to Section 13, without the
prior approval of the Company’s stockholders, the Company shall not, and the
Committee shall not authorize the Company to, (i) amend any outstanding Option
to reduce its Option Price or (ii) cancel any Option and replace it with the
grant of any new Award with a higher intrinsic value. This prohibition on Option
repricing shall not be construed to prohibit the adjustments for extraordinary
changes in the Company’s capital structure that are otherwise permitted under
Section 13 of this Plan.
     8. Stock Appreciation Rights. Any Option granted under the Plan may include
SARs, either at the Date of Grant or, except in the case of an Incentive Stock
Option, by subsequent amendment. The Committee also may award SARs independent
of any Option. A SAR shall confer on the Holder thereof the right to receive in
shares of Stock, cash or a combination thereof the value equal to the excess of
the Fair Market Value of one share of Stock on the date of exercise over the
exercise price for the SAR, with respect to every share of Stock for which the
SAR is granted. An SAR shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose, including, but not
limited to, the following:
     (a) Vesting. SARs granted in connection with an Option shall become
exercisable, be transferable and shall expire according to the same vesting
schedule, transferability rules and expiration provisions as the corresponding
Option. A SAR granted independent of an Option shall become exercisable, be
transferable and shall expire in accordance with a vesting schedule,
transferability rules and expiration provisions as established by the Committee
and reflected in an Award agreement.
     (b) Automatic Exercise. If on the last day of the Option Period (or in the
case of a SAR independent of an Option, the period established by the Committee
after which the SAR shall expire), the Fair Market Value of the Stock exceeds
the Option Price (or in the case of an SAR granted independent of an Option, the
Fair Market

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Value of the Stock on the Date of Grant), the Holder has not exercised the SAR
or the corresponding Option, and neither the SAR nor the corresponding Option
has expired, such SAR shall be deemed to have been exercised by the Holder on
such last day and the Company shall make the appropriate payment therefore.
     (c) Payment. Upon the exercise of a SAR, the Company shall pay to the
Holder an amount equal to the number of shares subject to the SAR multiplied by
the excess, if any, of the Fair Market Value of one share of Stock on the
exercise date over the Option Price, in the case of an SAR granted in connection
with an Option, or the Fair Market Value of one share of Stock on the Date of
Grant, in the case of a SAR granted independent of an Option. The Company shall
pay such excess in cash, in shares of Stock valued at Fair Market Value, or any
combination thereof, as determined by the Committee. Fractional shares shall be
settled in cash.
     (d) Method of Exercise. A Holder may exercise a SAR after such time as the
SAR vests by filing an irrevocable written notice with the Committee or its
designee, specifying the number of SARs to be exercised, and the date on which
such SARs were awarded.
     (e) Expiration. Each SAR shall cease to be exercisable, as to any share of
Stock, when the Holder exercises the SAR or exercises a related Option, with
respect to such share of Stock. Except as otherwise provided, in the case of
SARs granted in connection with Options, a SAR shall expire on a date designated
by the Committee which is not later than seven years after the Date of Grant of
the SAR. In the case of SARs granted independent of Options, a SAR shall expire
on a date designated by the Committee which is not later than ten years after
the Date of Grant of the SAR.
     (f) Prohibition on SAR Repricing. Subject to Section 13, without the prior
approval of the Company’s stockholders, the Company shall not, and the Committee
shall not authorize the Company to, (i) amend any outstanding SAR to reduce its
exercise price or (ii) cancel any SAR and replace it with the grant of any new
Award with a higher intrinsic value. This prohibition on SAR repricing shall not
be construed to prohibit the adjustments for extraordinary changes in the
Company’s capital structure that are otherwise permitted under Section 13 of
this Plan.
     (g) Fair Market Value. No SAR shall be granted with an exercise price that
is less than the Fair Market Value of a share of Stock at the Date of Grant of
the SAR.
     9. Performance Share Units.
     (a) Award Grants. The Committee is authorized to establish Performance
Share Unit programs to be effective over designated Award Periods determined by
the Committee. The Committee may grant Performance Share Units to Eligible
Persons in accordance with such Performance Share Unit programs. At the
beginning of each Award Period, the Committee will establish written Performance
Goals based upon financial objectives for the Company for such Award Period and
a schedule relating the accomplishment of the Performance Goals to the Awards to
be earned by Participants. Performance Goals may include absolute or relative
growth in earnings per share or rate of return on stockholders’ equity or other
measurement of corporate performance and may be determined on an individual
basis or by categories of Participants. The Committee shall determine the number
of Performance Share Units to be awarded, if any, to each Eligible Person who is
selected to receive such an Award. The Committee may add new Participants to a
Performance Share program after its commencement by making pro rata grants.
     (b) Determination of Award. At the completion of an Award Period, or at
other times as specified by the Committee, the Committee shall calculate the
number of shares of Stock earned with respect to each Participant’s Performance
Share Units by multiplying the number of Performance Share Units granted to the
Participant by a performance factor representing the degree of attainment of the
Performance Goals.
     (c) Partial Awards. A Participant for less than a full Award Period,
whether by reason of commencement or termination of employment or otherwise,
shall receive such portion of an Award, if any, for that Award Period as the
Committee shall determine.
     (d) Form of Payment. Performance Share Units shall be payable in that
number of shares of Stock determined in accordance with Section 9(b); provided,
however, that, at its discretion, the Committee may make payment to any
Participant in the form of cash upon the specific request of such Participant.
The amount of any

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payment made in cash shall be based upon the Fair Market Value of the Stock on
the day of payment. Payments of Performance Share Units shall be made as soon as
practicable after the completion of an Award Period, but in no event later than
two and one half months after the end of the calendar year in which the Award
Period ends.
     (e) Adjustment of Performance Goals. The Committee may, during the Award
Period, make such adjustments to Performance Goals as it may deem appropriate,
to compensate for, or reflect, (i) extraordinary or non-recurring events
experienced during an Award Period by the Company or by any Related Entity whose
performance is relevant to the determination of whether Performance Goals have
been attained; (ii) any significant changes that may have occurred during such
Award Period in applicable accounting rules or principles or changes in the
Company’s method of accounting or in that of any Related Entity whose
performance is relevant to the determination of whether an Award has been earned
or (iii) any significant changes that may have occurred during such Award Period
in tax laws or other laws or regulations that alter or affect the computation of
the measures of Performance Goals used for the calculation of Awards; provided,
however, that with respect to Performance Share Units intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, such
adjustments shall be made only to the extent that the Committee determines that
such adjustments may be made without a loss of deductibility of the compensation
includible with respect to such Award under Section 162(m) of the Code.
     10. Restricted Stock and Restricted Stock Units.
     (a) Award of Restricted Stock and Restricted Stock Units.
     (i) The Committee shall have the authority (A) to grant Restricted Stock
and Restricted Stock Units, (B) to issue or transfer Restricted Stock to
Eligible Persons, and (C) to establish terms, conditions and restrictions
applicable to such Restricted Stock and Restricted Stock Units, including the
Restricted Period, which may differ with respect to each grantee, the time or
times at which Restricted Stock or Restricted Stock Units shall be granted or
become vested and the number of shares or units to be covered by each grant.
     (ii) The Holder of Restricted Stock shall execute and deliver to the
Company an Award agreement with respect to the Restricted Stock setting forth
the restrictions applicable to such Restricted Stock. If the Committee
determines that the Restricted Stock shall be held in escrow rather than
delivered to the Holder pending the release of the applicable restrictions, the
Holder additionally shall execute and deliver to the Company (A) an escrow
agreement satisfactory to the Committee, and (B) the appropriate blank stock
powers with respect to the Restricted Stock covered by such agreements. If a
Holder shall fail to execute a Restricted Stock agreement and, if applicable, an
escrow agreement and stock powers, the Award shall be null and void. Subject to
the restrictions set forth in Section 10(b), the Holder shall generally have the
rights and privileges of a stockholder as to such Restricted Stock, including
the right to vote such Restricted Stock. Cash dividends and stock dividends with
respect to the Restricted Stock shall be currently paid to the Holder.
     (iii) Upon the Award of Restricted Stock, the Committee shall either
(i) cause a stock certificate registered in the name of the Holder to be issued
and, if it so determines, deposited together with the stock powers with an
escrow agent designated by the Committee, or (ii) issue such Stock to be held in
a restricted book entry account in the name of the Holder. If an escrow
arrangement is used, the Committee shall cause the escrow agent to issue to the
Holder a receipt evidencing any stock certificate held by it registered in the
name of the Holder.
     (iv) The terms and conditions of a grant of Restricted Stock Units shall be
reflected in a written Award agreement. No shares of Stock shall be issued at
the time a Restricted Stock Unit Award is made, and the Company will not be
required to set aside a fund for the payment of any such Award.
     (b) Restrictions.
     (i) Restricted Stock awarded to a Participant shall be subject to the
following restrictions until the expiration of the Restricted Period, and to
such other terms and conditions as may be set forth in the applicable Award
agreement: (A) if a stock certificate registered in the name of the Holder is
issued and an escrow arrangement is used, the Holder shall not be entitled to
delivery of the stock certificate; (B) the shares shall be subject to the
restrictions on transferability set forth in the Award agreement; (C) the shares
shall be subject to

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forfeiture to the extent provided in subparagraph (d) and the Award Agreement
and, to the extent such shares are forfeited, the stock certificates, if any,
shall be returned to the Company, and all rights of the Holder to such shares
and as a stockholder shall terminate without further obligation on the part of
the Company.
     (ii) Restricted Stock Units awarded to any Participant shall be subject to
(A) forfeiture until the expiration of the Restricted Period, to the extent
provided in subparagraph (d) and the Award agreement, and to the extent such
Awards are forfeited, all rights of the Holder to such Awards shall terminate
without further obligation on the part of the Company and (B) such other terms
and conditions as may be set forth in the applicable Award agreement.
     (c) Restricted Period. The Restricted Period of Restricted Stock and
Restricted Stock Units shall commence on the Date of Grant and shall expire from
time to time as to that part of the Restricted Stock and Restricted Stock Units
indicated in a schedule established by the Committee and set forth in a written
Award agreement. Notwithstanding the foregoing, the Committee shall have the
authority to accelerate the end of the Restricted Period on the Restricted Stock
and Restricted Stock Units whenever it may determine that, by reason of changes
in applicable laws or other changes in circumstances arising after the Date of
Grant such action is appropriate.
     (d) Forfeiture Provisions. Except to the extent determined by the Committee
and reflected in the underlying Award agreement, in the event a Holder
terminates their status as an Eligible Person during a Restricted Period for any
reason, that portion of the Award with respect to which restrictions have not
expired shall be completely forfeited to the Company.
     (e) Delivery of Restricted Stock and Settlement of Restricted Stock Units.
Upon the expiration of the Restricted Period with respect to any shares of Stock
covered by a Restricted Stock Award, the restrictions set forth in Section 10(b)
and the Award agreement shall be of no further force or effect with respect to
shares of Restricted Stock which have not then been forfeited. If an escrow
arrangement is used, upon such expiration, the Company shall deliver to the
Holder, or the Holder’s beneficiary, without charge, the stock certificate
evidencing the shares of Restricted Stock which have not then been forfeited and
with respect to which the Restricted Period has expired (to the nearest full
share) and any cash dividends or stock dividends credited to the Holder’s
account with respect to such Restricted Stock and the interest thereon, if any.
If the shares of Stock are held in a restricted book entry account in the name
of the Holder, upon such expiration, the Company shall remove the restrictions
of such restricted book entry account for such shares of Restricted Stock which
have not been forfeited and with respect to which the Restricted Period has
expired (to the nearest full share) and any cash dividend or stock dividends
credited to the Holders’ account with respect to such Restricted Stock and the
interest thereon, if any.
     As soon as administratively feasible, but in no event later than two and
one half months after the end of the calendar year in which such occurs, upon
the expiration of the Restricted Period with respect to any Restricted Stock
Units the Company shall deliver to the Holder, or the Holder’s beneficiary,
without charge, one share of Stock for each Restricted Stock Unit which has not
then been forfeited and with respect to which the Restricted Period has expired
(“Vested Unit”); provided, however, that, if so noted in the applicable Award
agreement, the Committee may, in its sole discretion, elect to pay cash or part
cash and part Stock in lieu of delivering only Stock for Vested Units. If cash
payment is made in lieu of delivering Stock, the amount of such payment shall be
equal to the Fair Market Value of the Stock as of the date on which the
Restricted Period lapsed with respect to such Vested Unit.
     (f) Stock Restrictions. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend until the end of the
Restricted Period with respect to such Stock:
“Transfer of this certificate and the shares represented hereby is restricted
pursuant to the terms of a Restricted Stock Agreement, dated as of       
between Wright Medical Group, Inc. and           . A copy of such Agreement is
on file at the offices of the Company at 5677 Airline Road, Arlington, Tennessee
38002.”
     Stop transfer orders shall be entered with the Company’s transfer agent and
registrar against the transfer of legended securities.
     11. Stock Bonus. The Committee may issue unrestricted Stock to Eligible
Persons, alone or in tandem with other Awards, in such amounts and subject to
such terms and conditions as the Committee shall from time to time in

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its sole discretion determine. A Stock Bonus shall be granted as or in payment
of a bonus, to provide incentives, or to recognize special achievements or
contributions.
     12. General.
     (a) Additional Provisions of an Award. Awards may be subject to such other
provisions (whether or not applicable to the benefit awarded to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the purchase of
Stock upon the exercise of Options, provisions for the forfeiture of or
restrictions on resale or other disposition of shares of Stock acquired under
any Award, provisions giving the Company the right to repurchase shares of Stock
acquired under any Award in the event the Participant elects to dispose of such
shares, and provisions to comply with Federal and state securities laws and
Federal and state tax withholding requirements. Any such provisions shall be
reflected in the applicable Award agreement.
     (b) Privileges of Stock Ownership. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of stock
ownership in respect of shares of Stock which are subject to Awards hereunder
until such shares have been issued to that person.
     (c) Government and Other Regulations. The obligation of the Company to make
payment of Awards in Stock or otherwise shall be subject to all applicable laws,
rules, and regulations, and to such approvals by governmental agencies as may be
required. Notwithstanding any terms or conditions of any Award to the contrary,
the Company shall be under no obligation to offer to sell or to sell and shall
be prohibited from offering to sell or selling any shares of Stock pursuant to
an Award unless such shares have been properly registered for sale pursuant to
the Securities Act with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel, satisfactory to the Company, that
such shares may be offered or sold without such registration pursuant to an
available exemption therefrom and the terms and conditions of such exemption
have been fully complied with. The Company shall be under no obligation to
register for sale under the Securities Act any of the shares of Stock to be
offered or sold under the Plan. If the shares of Stock offered for sale or sold
under the Plan are offered or sold pursuant to an exemption from registration
under the Securities Act, the Company may restrict the transfer of such shares
and may legend the Stock certificates representing such shares in such manner as
it deems advisable to ensure the availability of any such exemption.
     (d) Tax Withholding. Notwithstanding any other provision of the Plan, the
Company or any Related Entity, as appropriate, shall have the right to deduct
from all Awards cash and/or Stock, valued at Fair Market Value on the date of
payment, in an amount necessary to satisfy all Federal, state or local taxes as
required by law to be withheld with respect to such Awards and, in the case of
Awards paid in Stock, the Holder or other person receiving such Stock may be
required to pay prior to delivery of such Stock, the amount of any such taxes
which are required to be withheld, if any, with respect to such Stock. Subject
in particular cases to the disapproval of the Committee, shares of Stock of
equivalent Fair Market Value in payment of such withholding tax obligations may
be accepted if the Holder of the Award elects to make payment in such manner.
     (e) Claim to Awards and Employment Rights. No employee or other person
shall have any claim or right to be granted an Award under the Plan or, having
been selected for the grant of an Award, to be selected for a grant of any other
Award. Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ or service of the
Company or any Related Entity.
     (f) Designation and Change of Beneficiary. Each Participant may file with
the Committee a written designation of one or more persons as the beneficiary
who shall be entitled to receive the rights or amounts payable with respect to
an Award due under the Plan upon the Participant’s death. A Participant may,
from time to time, revoke or change the Participant’s beneficiary designation
without the consent of any prior beneficiary by filing a new designation with
the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Participant’s death, and in no event shall it be effective as of a date prior to
such receipt. If no beneficiary designation is filed by the Participant, the
beneficiary shall be deemed to be the Participant’s spouse, if the Participant
is unmarried at the time of death, the Participant’s estate.

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     (g) Payments to Persons other Than Participants. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for such person’s affairs because of illness or accident, or is a minor, or
has died, then any payment due to such person or such person’s estate (unless a
prior claim therefor has been made by a duly appointed legal representative)
may, if the Committee so directs, be paid to such person’s spouse, child,
relative, an institution maintaining or having custody of such person, or any
other person deemed by the Committee to be a proper recipient on behalf of such
person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.
     (h) No Liability of Committee Members. No member of the Committee shall be
personally liable by reason of any contract or other instrument executed by such
member or on such member’s behalf in such member’s capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person’s
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company’s certificate of incorporation or bylaws, as a matter of law,
or otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
     (i) Governing Law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to the
principles of conflicts of law thereof.
     (j) Funding. No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Holders shall have
no rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they shall have the same
rights as other employees under general law.
     (k) Non-transferability. A person’s rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
a Holder’s death, to a designated beneficiary to the extent permitted by the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution; provided, however, the Committee may, in its sole discretion,
allow for transfer of Awards other than Incentive Stock Options to other persons
or entities. Notwithstanding the foregoing provision, in no event may an Award
be transferred by a grantee for value.
     (l) Reliance on Reports. Each member of the Committee and each member of
the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountant of the Company and any
Related Entity and upon any other information furnished in connection with the
Plan by any person or persons other than himself.
     (m) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company except as
otherwise specifically provided in such other plan.
     (n) Expenses. The expenses of administering the Plan shall be borne by the
Company.
     (o) Pronouns. Masculine pronouns and other words of masculine gender shall
refer to both men and women.
     (p) Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings shall control.
     13. Changes in Capital Structure. Awards granted under the Plan and any
agreements evidencing such Awards, the maximum number of shares of Stock subject
to all Awards, and the maximum number of shares of Stock with respect to which
any one person may be granted Options or SARs during any year, if applicable,
shall be

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subject to equitable adjustment or substitution, as determined by the Committee
in its sole discretion, as to the number, price or kind of a share of Stock or
other consideration subject to such Awards (a) 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 of Grant of any such
Award or (b) 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, Participants in the
Plan, or which otherwise warrants equitable adjustment because it interferes
with the intended operation of the Plan. In addition, in the event of any such
adjustment or substitution, the aggregate number of shares of Stock available
under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. With respect to Awards intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, such
adjustments or substitutions shall be made only to the extent that the Committee
determines that such adjustments or substitutions may be made without a loss of
deductibility for such Awards under Section 162(m) of the Code. With respect to
Awards of Stock rights intended to be excluded from the definition of “deferred
compensation” under Code Section 409A, such adjustments or substitutions shall
be made only to the extent that the adjustments or substitutions are made
pursuant to Treas. Reg. § 1.409A-1(b)(5)(v)(D). The Company shall give each
Participant notice of an adjustment hereunder and, upon notice, such adjustment
shall be conclusive and binding for all purposes.
     Notwithstanding the above, 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 reorganization or liquidation of the Company; then
the Committee may, in its discretion and upon at least 10 days advance notice to
the affected persons, cancel any outstanding Awards and pay to the Holders
thereof, in cash, the value of such Awards based upon the price per share of
Stock received or to be received by other shareholders of the Company in the
event. The terms of this Section 13 may be varied by the Committee in any
particular Award agreement.
     14. Non-exclusivity of the Plan. Neither the adoption of this Plan by the
Board nor the submission of this Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under this Plan, and such arrangements may be either applicable generally or
only in specific cases.
     15. Amendments and Termination. The Board may at any time terminate the
Plan. Subject to Sections 7(g), 8(f) and 13, with the express written consent of
an individual Participant, the Board or the Committee may cancel or reduce or
otherwise alter outstanding Awards if, in its judgment, the tax, accounting, or
other effects of the Plan or potential payouts thereunder would not be in the
best interest of the Company. The Board or the Committee may, at any time, or
from time to time, amend or suspend and, if suspended, reinstate, the Plan in
whole or in part; provided, however, that any amendment of the Plan shall
require the approval of the Company’s stockholders to the extent that such
approval is then required by the Plan, applicable law, the rules and regulations
of the Securities and Exchange Commission, or the rules and regulations of any
national securities exchange on which the Stock is then listed or any automated
quotation system on which the Stock is then quoted.
     16. Effect of Section 162(m) of the Code. The Plan, and all Awards issued
thereunder, are intended to be exempt from the application of Section 162(m) of
the Code, which restricts under certain circumstances the Federal income tax
deduction for compensation paid by a public company to named executives in
excess of $1 million per year. The Committee may, without shareholder approval,
amend the Plan retroactively and/or prospectively to the extent it determines
necessary in order to comply with any subsequent clarification of Section 162(m)
of the Code required to preserve the Company’s Federal income tax deduction for
compensation paid pursuant to the Plan. To the extent that the Committee
determines as of the Date of Grant of an Award that the Award is intended to
comply with Section 162(m) of the Code, such Award shall not be effective until
any stockholder approval required under Section 162(m) of the Code to provide a
full Federal income tax deduction has been obtained.

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Employment Agreement — Robert J. Palmisano
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     17. Compliance with Section 409A.
     (a) This Plan shall at all times be administered and the provisions of this
Plan shall be interpreted consistent with the requirements of Section 409A of
the Code and any and all regulations thereunder, including such regulations as
may be promulgated after the effective date of this Plan. Without limiting the
foregoing, for purposes of Section 409A of the Code,
     (i) each “payment” (as defined by Section 409A of the Code) made under this
Plan or an Award shall be considered a “separate payment;”
     (ii) payments shall be deemed exempt from the definition of deferred
compensation under Section 409A of the Code to the fullest extent possible under
(i) the “short-term deferral” exemption of Treasury Regulation § 1.409A-1(b)(4),
and (ii) with respect to amounts paid as separation pay no later than the second
calendar year following the calendar year containing the participant’s
“separation from service” (as defined for purposes of Section 409A of the Code)
the “two years/two-times” separation pay exemption of Treasury Regulation §
1.409A-1(b)(9)(iii), which are hereby incorporated by reference, and
     (iii) if the Participant is a “specified employee” as defined in
Section 409A of the Code (and as applied according to procedures of the Company
and its affiliates) as of the Participant’s separation from service, to the
extent any payment under the Plan or an Award constitutes deferred compensation
(after taking into account any applicable exemptions from Section 409A of the
Code) and to the extent required by Section 409A of the Code, no payments due
under the Plan or an Award may be made until the earlier of: (i) the first day
of the seventh month following the Participant’s separation from service, or
(ii) the Participant’s date of death; provided, however, that any payments
delayed during this six-month period shall be paid in the aggregate in a lump
sum, without interest, on the first day of the seventh month following the
Participant’s separation from service. To the extent that the payment terms for
an Award are otherwise set forth in a written employment agreement or change in
control agreement with a specified employee (or other Company plan applicable to
the specified employee) and such payment terms otherwise meet the requirements
of Section 409A of the Code and the application of such terms does not result in
a violation of Section 409A of the Code, the foregoing payment terms shall be
disregarded and the payment terms set forth in the applicable agreement or plan
shall apply.
     (b) If this Plan or any Award fails to meet the requirements of
Section 409A of the Code, neither the Company nor any of its affiliates shall
have any liability for any tax, penalty or interest imposed on the Participant
by Section 409A of the Code, and the Participant shall have no recourse against
the Company or any of its affiliates for payment of any such tax, penalty or
interest imposed by Section 409A of the Code.
     IN WITNESS WHEREOF, the undersigned has caused the Plan to be executed on
behalf of the Company as of May 13, 2009.
WRIGHT MEDICAL GROUP, INC.
By:
Gary D. Henley
President and Chief Executive Officer

 

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Employment Agreement — Robert J. Palmisano
Page 51
EXHIBIT C
STOCK OPTION GRANT AGREEMENT
WRIGHT MEDICAL GROUP, INC.
Stock Option Grant Agreement
Executive
Award Granted to (“Grantee”):
Grant Date:
Number of Shares (“Shares”):
Option Price:
     THIS STOCK OPTION GRANT AGREEMENT (the “Agreement”) is made as of the Grant
Date by and between Wright Medical Group, Inc., a Delaware corporation with its
principal place of business at 5677 Airline Road, Arlington, Tennessee 38002
(the “Company”) and Grantee pursuant to the Wright Medical Group, Inc. 2009
Equity Incentive Plan, as amended from time to time (the “Plan”) and which is
hereby incorporated by reference.
     WHEREAS, Grantee is associated with the Company or its affiliate as an
employee; and
     WHEREAS, the Compensation Committee of the Company’s Board of Directors
(the “Committee”) has authorized that Grantee be granted the right and option to
purchase from the Company the Shares of the Company’s Common Stock (“Stock”)
subject to the terms and restrictions stated below;
     NOW, THEREFORE, the parties agree as follows:

1.   Grant of Options. Subject to the terms and conditions of this Agreement and
of the Plan, the Company hereby grants to Grantee the right and option (the
right to purchase any one share of Stock under this Agreement being an “Option”)
during the period commencing on the Grant Date and ending on the 10th
anniversary of the Grant Date (the “Expiration Date”) to purchase from the
Company the Shares. Each Option shall have an exercise price per share equal to
the Option Price indicated above.   2.   Vesting Schedule. The Options shall
vest as to one-fourth (1/4) of the Shares on the first anniversary of the Grant
Date, and as to an additional one-fourth (1/4) on each succeeding anniversary
date, so as to be 100% vested on the fourth anniversary of the Grant Date,
conditioned upon Grantee maintaining status as an Eligible Person (as defined in
the Plan) as of each vesting date. Notwithstanding the foregoing, the interest
of Grantee to the Options shall vest as to:

  2.1   100% of the then unvested Options upon a Change of Control. For purposes
of this Agreement, a “Change of Control” shall mean the first to occur on or
after the Grant Date of any of the following:       (a) The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more (on a fully diluted basis) of either
(A) the then outstanding shares of Stock, taking into account as outstanding for
this purpose such Stock issuable upon the exercise of options or warrants, the
conversion of convertible stock or debt, and the exercise of any similar right
to acquire such Stock (the “Outstanding Company Common Stock”) or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control: (x) any acquisition by the Company or any “affiliate” of the Company,
within the meaning of 17 C.F.R. § 230.405 (an “Affiliate”), (y) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, (z) any acquisition by any corporation or business
entity pursuant to a transaction which complies with clauses (A) and (B) of
subsection (a) of this Section 2.1

 

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      (persons and entities described in clauses (x), (y), and (z) being
referred to herein as “Permitted Holders”);         The consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any Permitted
Holder) beneficially owns, directly or indirectly, 50% or more (on a fully
diluted basis) of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination, taking into account as
outstanding for this purpose such common stock issuable upon the exercise of
options or warrants, the conversion of convertible stock or debt, and the
exercise of any similar right to acquire such common stock, or the combined
voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the incumbent Board at the time of the execution of the initial
agreement providing for such Business Combination;       (b) The approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company;       (c) The sale of at least 80% of the assets of the Company to an
unrelated party, or completion of a transaction having a similar effect; or    
  (d) The individuals who on the date of this Agreement constitute the Board of
Directors thereafter cease to constitute at least a majority thereof; provided
that any person becoming a member of the Board of Directors subsequent to the
date of this Agreement and whose election or nomination was approved by a vote
of at least two-thirds of the directors who then comprised the Board of
Directors immediately prior to such vote shall be considered a member of the
Board of Directors on the date of this Agreement.

3.   Restrictions.

  3.1   Except as specifically authorized by the Committee, Grantee may not
transfer the Options except by will or the laws of descent and distribution and
the Options shall be exercisable during the Grantee’s lifetime only by the
Grantee or, in the event of Grantee’s incapacity, Grantee’s 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.     3.2   By accepting the Options, Grantee
represents and agrees for Grantee and Grantee’s transferees (whether by will or
the laws of descent and distribution) that:

 

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    (a) For the period commencing on the Grant Date and ending on the first
anniversary of the date upon which Grantee loses status as an Eligible Person
(such period is hereinafter referred to as the “Covenant Period”), with respect
to any state in which the Company is engaged in business during Grantee’s
employment with the Company, Grantee shall not participate or engage, directly
or indirectly, for Grantee or on behalf of or in conjunction with any person,
partnership, corporation or other entity, whether as an employee, agent,
officer, director, stockholder, partner, joint venturer, investor or otherwise,
in any business activities if such activity consists of any activity undertaken
or expressly planned to be undertaken by the Company or any of its subsidiaries
or by Grantee at any time during which Grantee maintained status as an Eligible
Person.       (b) Except with the Company’s prior written approval or as may
otherwise be required by law or legal process, Grantee shall not disclose any
material or information which is confidential to the Company or its subsidiaries
and not in the public domain or generally known in the industry, whether
tangible or intangible, made available, disclosed or otherwise known to Grantee
as a result of Grantee’s status as an Eligible Person.       (c) During the
Covenant Period, Grantee shall not attempt to influence, persuade or induce, or
assist any other person in so persuading or inducing, any employee of the
Company or its subsidiaries to give up, or to not commence, employment or a
business relationship with the Company.

  3.3   The Company shall have the right, but not the obligation, to purchase
and acquire from Grantee any or all of the Shares previously acquired by Grantee
upon exercise of an Option (the “Repurchased Shares”) if the Committee
reasonably determines that Grantee has violated the covenants set forth in this
Agreement or Grantee’s loss of status as an Eligible Person is a result of
termination of employment for Cause (as defined in the Plan) or Grantee’s loss
of status as an Eligible Person could have resulted from termination of
employment for Cause. The Company may exercise the right granted to it under
this Section 3.3 by delivering written notice to Grantee stating that the
Company is exercising the repurchase right granted to it under this Section 3.3.
The delivery of such notice by the Company to Grantee shall constitute a binding
commitment of the Company to purchase and acquire all of the Repurchased Shares.
The total purchase price for the Repurchased Shares shall be delivered to the
Grantee against delivery by Grantee of certificates evidencing the Repurchased
Shares no later than 30 days after the delivery of the election notice by the
Company. The price per share of the Repurchased Shares shall be the lesser of 1)
the Fair Market Value (as defined in the Plan) of each of the Repurchased Shares
on the date of the Company’s delivery of its written notice to Grantee or 2) the
Option Price.

  3.4   The Company shall have the right, and not the obligation, to cancel any
or all of the Options if the Committee reasonably determines that Grantee has
violated the covenants set forth in this Agreement. The Company may exercise the
right granted to it under this Section 3.4 by delivering a written notice to
Grantee stating that the Company is exercising the cancellation right granted to
it under this Section 3.4.

  3.5   Notwithstanding anything in this Section 3 to the contrary, the Company
shall not be obligated to purchase any Stock at any time to the extent that the
purchase would result in a violation of any law, statute, rule, regulation,
order, writ, injunction, decree or judgment promulgated or entered by any
Federal, state, local or foreign court or governmental authority applicable to
the Company or any of its property.

  3.6   The parties intend the restrictions in Section 3.2 to be completely
severable and independent, and any invalidity or unenforceability of any one or
more such restrictions shall not render invalid or unenforceable any one or more
restrictions.

 

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Employment Agreement — Robert J. Palmisano
Page 54

4.   Exercise; Payment for and Delivery of Shares. 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 value at the Fair Market Value (as
defined in the Plan) 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. Payment in currency or by certified or cashier’s check shall be
considered payment in cash.   5.   Loss of Status as an Eligible Person. If
prior to the Expiration Date Grantee ceases to be an Eligible Person, the
Options shall expire on the earlier of the Expiration Date or the date that is
ninety days after the date upon which Grantee ceased to be an Eligible Person.
In such event, the Options shall remain exercisable by Grantee until expiration
only to the extent the Options were exercisable at the time that Grantee ceased
to be an Eligible Person.   6.    Stockholder Rights. Grantee or a transferee of
the Options shall have no rights as a stockholder with respect to any Shares
covered by the Options until Grantee shall have become the holder of record of
such shares (and the Company shall use its reasonable best efforts to cause
Grantee to become the holder of record of such shares), and, except as provided
in Section 7 of this Agreement, no adjustment shall be made for dividends or
distributions or other rights in respect of such Shares for which the record
date is prior to the date upon which he or she shall become the holder of record
thereof.   7.    Changes in Capital Structure. 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, Grantee. 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 Grantee 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 stockholders 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 ten days advance
notice to the affected persons, cancel any outstanding Options and pay to
Grantee, in cash, the value of such Options based upon the price per share of
Stock received or to be received by other stockholders of the Company in such
event and the per share exercise price of the Options.

 

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Page 55

8.   Requirements of Law.

  8.1   By accepting the Options, Grantee represents and agrees for Grantee and
any transferees (whether by will or the laws of descent and distribution) that,
unless a registration statement under the Securities Act is in effect as to the
shares purchased upon any exercise of the Options, (i) any and all Shares so
purchased shall be acquired for his or her personal account and not with a view
to or for sale in connection with any distribution, and (ii) each notice of the
exercise of any portion of this Option shall be accompanied by a representation
and warranty in writing, signed by the person entitled to exercise the same,
that the shares are being so acquired in good faith for his or her personal
account and not with a view to or for sale in connection with any distribution.
    8.2   No certificate or certificates for Shares may be purchased, issued or
transferred if the exercise hereof or the issuance or transfer of such Shares
shall constitute a violation by the Company or Grantee of any (i) provision of
any Federal, state or other securities law, (ii) requirement of any securities
exchange listing agreement to which the Company may be a party, or (iii) other
requirement of law or of any regulatory body having jurisdiction over the
Company. Any reasonable determination in this connection by the Company, upon
notice given to Grantee, shall be final, binding and conclusive.     8.3   The
certificates representing shares of Common Stock acquired pursuant to the
exercise of Options shall carry such appropriate legend, and such written
instructions shall be given to the Company’s transfer agent, as may be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act or any state securities laws.

9.   Taxes. Grantee understands that Grantee may recognize income for federal
and, if applicable, state income tax purposes upon exercise of Options. Grantee
shall be liable for any and all taxes, including withholding taxes, arising out
of the grant of the Options or their exercise hereunder. By accepting the
Options, Grantee covenants to report such income in accordance with applicable
federal and state laws. To the extent that the exercise of Options results in
income to Grantee and withholding obligations of the Company, including federal
or state withholding obligations, Grantee agrees that the obligation shall be
satisfied in the manner Grantee has chosen by checking one of the following
boxes:

  o   At least one working day prior to the exercise date Grantee may deliver to
the Company an amount of cash determined by the Company to be adequate to
satisfy the Company’s withholding obligation. If Grantee does not deliver such
amount of cash, the Company shall withhold an amount of the Grantee’s current or
future remuneration in an amount that satisfies the Company’s withholding
obligation. Notwithstanding the foregoing, the Company may in its sole
discretion withhold from the Shares to be issued the specific number of Shares
having a fair market value on the vesting date equal to the amount required to
satisfy the Company’s withholding obligation.

  o   The Company shall retain and instruct a registered broker(s) to sell such
number of Shares issued upon exercise of Options necessary to satisfy the
Company’s withholding obligations, after deduction of the broker’s commission,
and the broker shall remit to the Company the cash necessary in order for the
Company to satisfy its withholding obligations. Grantee covenants to execute any
such documents as are requested by the broker of the Company in order to
effectuate the sale of the Shares and payment of the tax obligations to the
Company. The Grantee represents to the Company that, as of the date hereof, he
or she is not aware of any material nonpublic information about the Company or
the Shares. The Grantee and the Company have structured this Agreement to
constitute a “binding contract” relating to the sale

 

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    of Shares pursuant to this Section, consistent with the affirmative defense
to liability under Section 10(b) of the Exchange Act under Rule 10b5-1(c)
promulgated under the Exchange Act.*

10.   Governing Law. The grant of Options and the provisions of this Agreement
are governed by, and subject to, the laws of the State of Delaware, without
regard to the conflict of law provisions, as provided in the Plan.       For
purposes of litigating any dispute that arises under this grant or the
Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of Tennessee, agree that such litigation shall be conducted in the courts
of Shelby County, Tennessee, or the federal courts for the United States for the
Western District of Tennessee, where this grant is made and/or to be performed.
  11.   Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to current or future participation in the Plan by
electronic means. Grantee hereby consents to receive such documents by
electronic delivery and agrees to participate in the Plan through an on-line or
electronic system established and maintained by the Company or a third party
designated by the Company.   12.   Miscellaneous.

  12.1   The Company shall not be required (i) to transfer on its books any
shares of Stock of the Company which have been sold or transferred in violation
of any provisions set forth in this Agreement, or (ii) to treat as owner of such
shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.     12.2   The
parties agree to execute such further instruments and to take such action as may
be reasonably necessary to carry out the intent of this Agreement.     12.3  
Any notice required or permitted hereunder shall be given in writing and shall
be deemed effectively given upon delivery to Grantee at the address of Grantee
then on file with the Company.     12.4   Neither the Plan nor this Agreement
nor any provisions under either shall be construed so as to grant Grantee any
right to remain associated with the Company or any of its affiliates.     12.5  
This Agreement, subject to the provisions of the Plan, constitutes the entire
agreement of the parties with respect to the subject matter hereof.

 

*    By selecting the second option, Grantee understands that the sale of Shares
to satisfy the Company’s withholding obligations will be considered a sale for
purposes of short-swing liability under Section 16(b) of the Exchange Act. Any
profit realized in a purchase of shares of the Company’s stock within six months
of the sale may be recovered by the Company or by a stockholder of the Company
on behalf of the Company.

 

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Employment Agreement — Robert J. Palmisano
Page 57
     This Agreement and the Options evidenced by this Agreement will not be
effective until an original signed Agreement is received by the Wright Medical
Group, Inc. Legal Department. Please print and sign this Agreement immediately,
then send the signed Agreement to the Wright Medical Group, Inc. Legal
Department as soon as possible.
     AGREED AND ACCEPTED:

          GRANTEE:   WRIGHT MEDICAL GROUP, INC.
 
       
 
  By:    
 
       

 

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EXHIBIT D
RESTRICTED STOCK OPTION GRANT AGREEMENT
WRIGHT MEDICAL GROUP, INC.
Restricted Stock Grant Agreement
Executive
Award Granted to (“Grantee”):
Grant Date:
Number of Shares (“Shares”):
     THIS RESTRICTED STOCK GRANT AGREEMENT (the “Agreement”) is made as of the
Grant Date by and between Wright Medical Group, Inc., a Delaware corporation
with its principal place of business at 5677 Airline Road, Arlington, Tennessee
38002 (the “Company”) and Grantee pursuant to the Wright Medical Group, Inc.
2009 Equity Incentive Plan, as amended from time to time (the “Plan”) and which
is hereby incorporated by reference.
     WHEREAS, Grantee is associated with the Company or its affiliate as an
employee; and
     WHEREAS, the Compensation Committee of the Company’s Board of Directors
(the “Committee”) has authorized that Grantee be granted shares of the Company’s
Common Stock (“Stock”) subject to the restrictions stated below;
     NOW, THEREFORE, the parties agree as follows:

1.   Grant of Stock. Subject to the terms and conditions of this Agreement and
of the Plan, the Company hereby grants to Grantee the Shares.   2.   Vesting
Schedule. The interest of Grantee in the Shares shall vest as to one-fourth
(1/4) of the Shares on the first anniversary of the Grant Date, and as to an
additional one-fourth (1/4) on each succeeding anniversary date, so as to be
100% vested on the fourth anniversary thereof, conditioned upon Grantee
maintaining status as an Eligible Person (as defined in the Plan) as of each
vesting date. Notwithstanding the foregoing, the interest of Grantee in the
Shares shall vest as to:

  2.1   100% of the then unvested Shares upon a Change of Control. For purposes
of this Agreement, a “Change of Control” shall mean the first to occur on or
after the Grant Date of any of the following:       (a) The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more (on a fully diluted basis) of either
(A) the then outstanding shares of Stock, taking into account as outstanding for
this purpose such Stock issuable upon the exercise of options or warrants, the
conversion of convertible stock or debt, and the exercise of any similar right
to acquire such Stock (the “Outstanding Company Common Stock”) or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control: (x) any acquisition by the Company or any “affiliate” of the Company,
within the meaning of 17 C.F.R. § 230.405 (an “Affiliate”), (y) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliate, (z) any acquisition by any corporation or business
entity pursuant to a transaction which complies with clauses (A) and (B) of
subsection (a) of this Section 2.1 (persons and entities described in clauses
(x), (y), and (z) being referred to herein as “Permitted Holders”);       (b)
The consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a
“Business Combination”),

 

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      in each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any Permitted
Holder) beneficially owns, directly or indirectly, 50% or more (on a fully
diluted basis) of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination, taking into account as
outstanding for this purpose such common stock issuable upon the exercise of
options or warrants, the conversion of convertible stock or debt, and the
exercise of any similar right to acquire such common stock, or the combined
voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the incumbent Board at the time of the execution of the initial
agreement providing for such Business Combination;       (c) The approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company;       (d) The sale of at least 80% of the assets of the Company to an
unrelated party, or completion of a transaction having a similar effect; or    
  (e) The individuals who on the date of this Agreement constitute the Board of
Directors thereafter cease to constitute at least a majority thereof; provided
that any person becoming a member of the Board of Directors subsequent to the
date of this Agreement and whose election or nomination was approved by a vote
of at least two-thirds of the directors who then comprised the Board of
Directors immediately prior to such vote shall be considered a member of the
Board of Directors on the date of this Agreement.

  2.2   100% of the unvested Shares upon Grantee’s death.

3.   Restrictions.

  3.1   The Shares granted hereunder may not be sold, pledged or otherwise
transferred until the Shares become vested in accordance with this Agreement.
The period of time between the Grant Date and the date that the Shares become
vested is referred to as the “Restricted Period.”     3.2   If at any time
Grantee fails to maintain Grantee’s status as an Eligible Person, the balance of
the Shares subject to the provisions of this Agreement which have not vested at
the time of Grantee’s loss of status as an Eligible Person shall be forfeited by
Grantee, and ownership transferred back to the Company.     3.3   By accepting
the Shares, Grantee represents and agrees for Grantee and Grantee’s transferees
(whether by will or the laws of descent and distribution) that:

 

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    (a) For the period commencing on the Grant Date and ending on the first
anniversary of the date upon which Grantee loses status as an Eligible Person
(such period is hereinafter referred to as the “Covenant Period”), with respect
to any state in which the Company is engaged in business during Grantee’s
employment with the Company, Grantee shall not participate or engage, directly
or indirectly, for Grantee or on behalf of or in conjunction with any person,
partnership, corporation or other entity, whether as an employee, agent,
officer, director, stockholder, partner, joint venturer, investor or otherwise,
in any business activities if such activity consists of any activity undertaken
or expressly planned to be undertaken by the Company or any of its subsidiaries
or by Grantee at any time during which Grantee maintained status as an Eligible
Person.       (b) Except with the Company’s prior written approval or as may
otherwise be required by law or legal process, Grantee shall not disclose any
material or information which is confidential to the Company or its subsidiaries
and not in the public domain or generally known in the industry, whether
tangible or intangible, made available, disclosed or otherwise known to Grantee
as a result of Grantee’s status as an Eligible Person.       (c) During the
Covenant Period, Grantee shall not attempt to influence, persuade or induce, or
assist any other person in so persuading or inducing, any employee of the
Company or its subsidiaries to give up, or to not commence, employment or a
business relationship with the Company.

  3.4   The Company shall have the right, but not the obligation, to purchase
and acquire from Grantee any or all of the Shares (the “Repurchased Shares”) if
the Committee reasonably determines that Grantee has violated the covenants set
forth in this Agreement or Grantee’s loss of status as an Eligible Person is a
result of termination of employment for Cause (as defined in the Plan) or
Grantee’s loss of status as an Eligible Person could have resulted from
termination of employment for Cause. The Company may exercise the right granted
to it under this Section 3.4 by delivering written notice to Grantee stating
that the Company is exercising the repurchase right granted to it under this
Section 3.4. The delivery of such notice by the Company to Grantee shall
constitute a binding commitment of the Company to purchase and acquire all of
the Repurchased Shares. The total purchase price for the Repurchased Shares
shall be delivered to the Grantee against delivery by Grantee of certificates
evidencing the Repurchased Shares no later than 30 days after the delivery of
the election notice by the Company. The price per share of the Repurchased
Shares shall be the lesser of 1) the Fair Market Value (as defined in the Plan)
of each of the Repurchased Shares on the date of the Company’s delivery of its
written notice to Grantee or 2) the Fair Market Value of each of the Repurchased
Shares on the date that such shares vested to the Grantee without regard to any
election by the Grantee under Section 83(b) of the Internal Revenue Code of
1986, as amended (the “Code”).     3.5   The Company shall have the right, and
not the obligation, to cancel any or all of the Shares if the Committee
reasonably determines that Grantee has violated the covenants set forth in this
Agreement. The Company may exercise the right granted to it under this
Section 3.5 by delivering a written notice to Grantee stating that the Company
is exercising the cancellation right granted to it under this Section 3.5.    
3.6   Notwithstanding anything in this Section 3 to the contrary, the Company
shall not be obligated to purchase any Stock at any time to the extent that the
purchase would result in a violation of any law, statute, rule, regulation,
order, writ, injunction, decree or judgment promulgated or entered by any
Federal, state, local or foreign court or governmental authority applicable to
the Company or any of its property.

 

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  3.7   The parties intend the restrictions in Section 3.3 to be completely
severable and independent, and any invalidity or unenforceability of any one or
more such restrictions shall not render invalid or unenforceable any one or more
restrictions.

4.   Legend. All certificates representing any shares of Stock subject to the
provisions of this Agreement shall have endorsed thereon the following legend:

TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED
PURSUANT TO THE TERMS OF A RESTRICTED STOCK GRANT AGREEMENT, DATED AS OF
__________ BETWEEN WRIGHT MEDICAL GROUP, INC. AND ________. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE OFFICES OF THE WRIGHT MEDICAL GROUP, INC. AT 5677
AIRLINE ROAD, ARLINGTON, TENNESSEE 38002.

5.   Issuance of Shares. The Shares shall be issued and held in a restricted
book entry account in the name of Grantee until expiration of the Restricted
Period. Upon expiration of the Restricted Period, the Company shall remove the
restrictions of such restricted book entry account for such Shares which have
not been forfeited and with respect to which the Restricted Period has expired
(to the nearest full share) and any cash dividend or stock dividends shall be
credited to Grantee’s account with respect to such Shares and any interest
thereon, if any. Notwithstanding the foregoing, the Company may, in its
discretion, issue certificates for Shares for which the Restricted Period has
expired in the name of Holder in lieu of removing the restrictions of such
restricted book entry account.   6.   Stockholder Rights. During the Restricted
Period, Grantee shall have all the rights and privileges of a stockholder as to
Shares, including the right to vote such Shares, except for the right to
transfer the Shares as set forth in Section 3 and Section 7 of this Agreement
and Section 10(b) of the Plan. Cash dividends and stock dividends with respect
to the Shares shall be currently paid to Grantee.   7.   Changes in Stock. In
the event that as a result of (i) any stock dividend, stock split or other
change in the Stock, or (ii) any merger or sale of all or substantially all of
the assets or other acquisition of the Company, and by virtue of any such change
Grantee shall in Grantee’s capacity as owner of unvested shares of Stock which
have been awarded to Grantee (the “Prior Stock”) be entitled to new or
additional or different shares or securities, such new or additional or
different shares or securities shall thereupon be considered unvested Shares and
shall be subject to all of the conditions and restrictions which were applicable
to the Prior Stock pursuant to this Agreement.   8.   Disability of Grantee. In
the event of the Disability (as defined in the Plan) of Grantee, any unpaid but
vested Shares shall be paid to Grantee if legally competent or to a legally
designated guardian or representative if Grantee is legally incompetent.   9.  
Death of Grantee. In the event of Grantee’s death after the vesting date but
prior to the payment of Shares, such Shares shall be paid to Grantee’s estate or
designated beneficiary.   10.    Taxes. Grantee understands that Grantee will
recognize income for federal and, if applicable, state income tax purposes in an
amount equal to the amount by which the fair market value of the Shares, as of
the Grant Date or vesting date, as applicable, exceeds any consideration paid by
Grantee for such Shares. Grantee shall be liable for any and all taxes,
including withholding taxes, arising out of this grant or the vesting of Shares
hereunder. By accepting the Shares, Grantee covenants to report such income in
accordance with applicable federal and state laws. To the extent that the
receipt of the Shares or the end of the Restricted Period results in income to
Grantee and withholding obligations of the Company, including federal or state
withholding obligations, Grantee agrees that

 

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    the obligation shall be satisfied in the manner Grantee has chosen by
checking one of the following boxes:

  o   At least one working day prior to the vesting date Grantee may deliver to
the Company an amount of cash determined by the Company to be adequate to
satisfy the Company’s withholding obligation. If Grantee does not deliver such
amount of cash, the Company shall withhold an amount of the Grantee’s current or
future remuneration in an amount that satisfies the Company’s withholding
obligation. Notwithstanding the foregoing, the Company may in its sole
discretion withhold from the Shares to be issued the specific number of Shares
having a fair market value on the vesting date equal to the amount required to
satisfy the Company’s withholding obligation.     o   The Company shall retain
and instruct a registered broker(s) to sell such number of Shares necessary to
satisfy the Company’s withholding obligations, after deduction of the broker’s
commission, and the broker shall remit to the Company the cash necessary in
order for the Company to satisfy its withholding obligations. Grantee covenants
to execute any such documents as are requested by the broker of the Company in
order to effectuate the sale of the Shares and payment of the tax obligations to
the Company. The Grantee represents to the Company that, as of the date hereof,
he or she is not aware of any material nonpublic information about the Company
or the Shares. The Grantee and the Company have structured this Agreement to
constitute a “binding contract” relating to the sale of Shares pursuant to this
Section, consistent with the affirmative defense to liability under Section
10(b) of the Exchange Act under Rule 10b5-1(c) promulgated under the Exchange
Act.*

11.   Governing Law. The grant of Shares and the provisions of this Agreement
are governed by, and subject to, the laws of the State of Delaware, without
regard to the conflict of law provisions, as provided in the Plan.       For
purposes of litigating any dispute that arises under this grant or the
Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of Tennessee, agree that such litigation shall be conducted in the courts
of Shelby County, Tennessee, or the federal courts for the United States for the
Western District of Tennessee, where this grant is made and/or to be performed.
  12.   Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to current or future participation in the Plan by
electronic means. Grantee hereby consents to receive such documents by
electronic delivery and agrees to participate in the Plan through an on-line or
electronic system established and maintained by the Company or a third party
designated by the Company.   13.   Miscellaneous.

  13.1   The Company shall not be required (i) to transfer on its books any
shares of Stock of the Company which have been sold or transferred in violation
of any provisions set forth in this Agreement, or (ii) to treat as owner of such
shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.

 

*    By selecting the second option, Grantee understands that the sale of Shares
to satisfy the Company’s withholding obligations will be considered a sale for
purposes of short-swing liability under Section 16(b) of the Exchange Act. Any
profit realized in a purchase of shares of the Company’s stock within six months
of the sale may be recovered by the Company or by a stockholder of the Company
on behalf of the Company.

 

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  13.2   The parties agree to execute such further instruments and to take such
action as may be reasonably necessary to carry out the intent of this Agreement.
    13.3   Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon delivery to Grantee at the address of
Grantee then on file with the Company.     13.4   Neither the Plan nor this
Agreement nor any provisions under either shall be construed so as to grant
Grantee any right to remain associated with the Company or any of its
affiliates.     13.5   This Agreement, subject to the provisions of the Plan,
constitutes the entire agreement of the parties with respect to the subject
matter hereof.

 

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Employment Agreement — Robert J. Palmisano
Page 64
     This Agreement and the Shares evidenced by this Agreement will not be
effective until an original signed Agreement is received by the Wright Medical
Group, Inc. Legal Department. Please print and sign this Agreement immediately,
then send the signed Agreement to the Wright Medical Group, Inc. Legal
Department as soon as possible.
AGREED AND ACCEPTED:

          GRANTEE:   WRIGHT MEDICAL GROUP, INC.
 
       
 
  By:    
 
       

 

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Employment Agreement — Robert J. Palmisano
Page 65
EXHIBIT E
INDEMNIFICATION AGREEMENT
     This Indemnification Agreement (the “Agreement”) made and entered into as
of the Effective Date (defined below) by and between Wright Medical Group, Inc.,
a Delaware corporation (the “Company”), and Robert J. Palmisano (the
“Indemnitee”).
     WHEREAS, it is essential to the Company and its Affiliates (defined below)
to retain and attract the most capable persons available as directors and
officers;
     WHEREAS, directors and officers of public companies are subject to an
increased risk of litigation and claims being asserted against them;
     WHEREAS, the Company’s Fourth Amended and Restated Certificate of
Incorporation, as amended by Certificate of Amendment of Fourth Amended and
Restated Certificate of Incorporation (the “Certificate of Incorporation”) and
Second Amended and Restated By-laws (the “By-laws”) of the Company require the
Company to indemnify its directors and officers and those serving its Affiliates
at its request to the fullest extent permitted by Delaware law, and the
Indemnitee has been serving and continues to serve as a director or officer of
the Company or an Affiliate of the Company in part in reliance on such
Certificate of Incorporation and By-laws;
     WHEREAS, Indemnitee is or has agreed to become or will continue to serve as
a director or officer of the Company or an Affiliate of the Company;
     WHEREAS, the Company desires (i) to provide Indemnitee with specific
contractual assurance that the protection promised by such Certificate of
Incorporation and By-laws will be available to Indemnitee (regardless of, among
other things, any amendment to or revocation of such Certificate of
Incorporation or By-laws, change in the composition of the Company’s Board of
Directors (“Board of Directors”), or any change in the ownership of the
Company), (ii) to provide for the indemnification of and the advancing of
expenses to Indemnitee to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and (iii) to the extent
insurance is available, to provide for continued coverage of Indemnitee under
the Company’s directors and officers liability insurance policies; and
     WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in accepting or continuing Indemnitee’s position as a director or
officer of the Company or an Affiliate of the Company.
     NOW, THEREFORE, in consideration of the Indemnitee’s agreement to serve or
continue to serve as a director and/or officer of the Company or an Affiliate of
the Company and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company has agreed to the
covenants set forth herein for the purpose of further securing to the Indemnitee
the indemnification provided by the Certificate of Incorporation and the
By-laws:

 

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1.   Definitions.

(a) “Affiliate” has the meaning set forth in Rule 12b-2 promulgated under the
Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder.
(b) “Agreement” shall have the meaning specified in the introductory paragraph
hereof.
(c) “By-laws” shall have the meaning specified in the Recitals hereto.
(d) “Certificate of Incorporation” shall have the meaning specified in the
Recitals hereto.
(e) “Change in Control” shall be deemed to have occurred if (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 20% or more of the total
voting power represented by the Company’s then outstanding Voting Securities, or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors and any new director
whose election by the Board of Directors or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all the Company’s
assets.

 

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(f) “Claim” means any threatened, pending, or completed action, suit, or
proceeding, or any inquiry or investigation, whether instituted by the Company
or any other party, that Indemnitee in good faith believes might lead to the
institution of any such action, suit, or proceeding, whether civil, criminal,
administrative, investigative, or other and whether formal or informal.
(g) “Company” shall have the meaning specified in the introductory paragraph
hereof.
(h) “Expense Advance” shall have the meaning specified in Section 2.2.
(i) “Expenses” include attorneys’ fees and all other costs, expenses and
obligations (including, without limitation, experts’ fees, court costs,
retainers, transcript fees, duplicating, printing and binding costs, as well as
telecommunications, postage and courier charges) paid or incurred in connection
with investigating, defending, being a witness in or participating in, or
preparing to investigate, defend, be a witness in or participate in, any Claim
relating to any Indemnifiable Event.
(j) “Indemnifiable Amounts” include any and all Expenses, damages, judgments,
fines, penalties, excise taxes and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties, excise taxes or amounts
paid in settlement) arising out of or resulting from any Claim relating to an
Indemnifiable Event.
(k) “Indemnifiable Event” means any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, or agent of the Company or
an Affiliate of the Company, or is or was serving at the request of the Company
as a director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other enterprise,
whether for profit or not, or by reason of anything done or not done by
Indemnitee in any such capacity.
(l) “Indemnitee” shall have the meaning specified in the introductory paragraph
hereof.
(m) “Independent Legal Counsel” means an attorney or firm of attorneys, selected
in accordance with the provisions of Section 3, who shall not have otherwise
performed services for the Company or Indemnitee within the last five (5) years
(other than with respect to matters concerning the rights of Indemnitee under
this Agreement, or of other indemnitees under similar indemnity agreements).

 

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(n) “Reviewing Party” means any appropriate person or body consisting of a
member or members of the Board of Directors or any other person or body
appointed by the Board who is not a party to the particular Claim for which
Indemnitee is seeking indemnification, or Independent Legal Counsel.
(o) “Voting Securities” are any securities of the Company that vote generally in
the election of directors.

2.   Basic Indemnification Arrangement; Advancement of Expenses.

  2.1   In the event Indemnitee was, is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable, but in any event no later than
thirty days after written demand is presented to the Company, against any and
all Indemnifiable Amounts. For the avoidance of doubt, the foregoing
indemnification obligation includes, without limitation, claims for monetary
damages against Indemnitee in respect of an alleged breach of fiduciary duties,
to the fullest extent permitted under Section 102(b)(7) of the Delaware General
Corporation Laws.

  2.2   If requested by Indemnitee, the Company shall advance (within five (5)
business days of such request) any and all Expenses incurred by Indemnitee (an
“Expense Advance”). The Company shall, in accordance with such request (but
without duplication), either (i) pay such Expenses on behalf of Indemnitee, or
(ii) reimburse Indemnitee for such Expenses. Subject to the limitations
contained in Sections 2.3 and 2.4, Indemnitee’s right to an Expense Advance is
absolute and shall not be subject to any prior determination by the Reviewing
Party or any other person, that the Indemnitee has satisfied any applicable
standard of conduct for indemnification. In making any request for an Expense
Advance, Indemnitee shall submit to the Company a schedule setting forth in
reasonable detail the dollar amount expended or incurred and expected to be
expended or incurred. Each such listing shall be supported by the bill,
agreement, or other documentation relating thereto, each of which shall be
appended to the schedule as an exhibit.

  2.3   Notwithstanding anything in this Agreement to the contrary, Indemnitee
shall not be entitled to indemnification or an Expense Advance pursuant to this
Agreement in connection with any Claim initiated by Indemnitee unless (i) the
Company has joined in or the Board of Directors has authorized or consented to
the initiation of such Claim or (ii) the Claim is one to enforce Indemnitee’s
rights under this Agreement.

 

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  2.4   Notwithstanding anything in this Agreement to the contrary, (i) the
indemnification obligations of the Company under Section 2.1 shall be subject to
the condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the Independent Legal Counsel is involved) that
Indemnitee would not be permitted to be indemnified under applicable law, and
(ii) the obligation of the Company to make an Expense Advance pursuant to
Section 2.2 shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid (it being understood and agreed that the foregoing
agreement by Indemnitee shall be deemed to satisfy any requirement that
Indemnitee provide the Company with an undertaking to repay any Expense Advance
if it is ultimately determined that the Indemnitee is not entitled to
indemnification under applicable law); provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). Indemnitee’s undertaking to repay such Expense Advances shall be
unsecured and interest-free. If there has not been a Change in Control, the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control, the Reviewing Party shall be the Independent
Legal Counsel. If there has been no determination by the Reviewing Party within
thirty (30) days after written demand is presented to the Company or if the
Reviewing Party determines that Indemnitee would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the State of Delaware having
subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.

3.   Change in Control. The Company agrees that if there is a Change in Control
of the Company (other than a Change in Control which has been approved by a
majority of the Board of Directors who were directors immediately prior to such
Change in Control) then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and any Expense
Advance under this Agreement or any other

 

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    agreement or the Certificate of Incorporation or By-laws, now or later in
effect, relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld). The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to indemnify fully such counsel against any and all
expenses (including attorneys’ fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.

4.   Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all expenses (including attorneys’ fees) and, if
requested by Indemnitee, shall (within five (5) business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or the Certificate of Incorporation or By-laws, now or later in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors and officers liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment, or insurance recovery, as the case may
be.

5.   Partial Indemnity. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim
but not, however, for all of the total amount of the Claim, the Company shall
nevertheless indemnify Indemnitee for the portion of the Claim to which
Indemnitee is entitled. Notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter related to an Indemnifiable Event,
including dismissal without prejudice, Indemnitee shall be indemnified against
all Expenses incurred in connection therewith.

6.   Burden of Proof. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder the Reviewing Party or court shall presume that the Indemnitee has
satisfied the applicable standard of conduct and is entitled to indemnification,
and the burden of proof shall be on the Company to establish, by clear and
convincing evidence, that Indemnitee is not so entitled.

7.   Reliance. For purposes of this Agreement, Indemnitee shall be deemed to
have acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Company if Indemnitee’s actions or
omissions to act are taken in good faith reliance upon the records of the
Company, including its financial statements,

 

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  or upon information, opinions, reports or statements furnished to Indemnitee
by the officers or employees of the Company in the course of their duties, or by
committees of the Board of Directors, or by any other person (including legal
counsel, accountants, consultants and financial advisors) as to matters
Indemnitee reasonably believes are within such other person’s professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Company. In addition, the knowledge and/or actions, or failures to act,
of any other director, officer, agent or employee of the Company shall not be
imputed to Indemnitee for purposes of determining the right to indemnity
hereunder.

8.   No Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit, or proceeding by judgment, order, settlement (whether with
or without court approval), or conviction, or upon a plea of nolo contendere or
its equivalent shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Company (including, without limitation, the Board of
Directors, any committee of the Board of Directors, legal counsel, or the
stockholders) to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Company (including, without limitation, the Board of
Directors, any committee of the Board of Directors, legal counsel, or the
stockholders) that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law shall be a defense to Indemnitee’s claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.

9.   Nonexclusivity. The rights of the Indemnitee under this Agreement shall be
in addition to any other rights that Indemnitee may have under the Company’s
Certificate of Incorporation or By-laws or the General Corporation Law of the
State of Delaware. To the extent that a change in the General Corporation Law of
the State of Delaware (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the
Certificate of Incorporation, By-laws or this Agreement, it is the intent of the
Company and Indemnitee that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.

10.   Amendments; Waiver. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by the Company and
Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions of this Agreement, nor
shall such waiver constitute a continuing waiver.

11.   Insurance and Subrogation.

 

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  11.1   To the extent the Company or an Affiliate of the Company maintains an
insurance policy or policies providing directors and officers liability
insurance, Indemnitee shall be covered by such policy or policies in accordance
with its or their terms and to the maximum extent of the coverage available for
any Company or Affiliate director or officer.

  11.2   The Company represents that it presently has in force and effect
directors and officers liability insurance on behalf of Indemnitee against
certain customary liabilities which may be asserted against or incurred by
Indemnitee. The Company hereby agrees that, so long as Indemnitee shall continue
to serve as a director or officer, and thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that Indemnitee served as an officer or director, the Company shall purchase and
maintain in effect for the benefit of Indemnitee such insurance providing
(a) coverage at least comparable to that presently provided or (b) if such
coverage is hereafter changed to provide any enhanced rights or benefits, the
same coverage provided to the most favorably insured of the Company’s directors
or officers; provided, however, if, the then Board of Directors determines in
good faith that, either (x) the premium cost for such insurance is substantially
disproportionate to the amount of coverage, or (y) the coverage provided by such
insurance is so limited by exclusions that there is insufficient benefit from
such insurance, then and in that event, the Company shall not be required to
maintain such insurance; provided further, however, that if, after a Change in
Control, the Board of Directors determines that the Company shall not be
required to maintain such insurance, the Company shall be required to purchase a
“tail” policy which (i) has an effective term of six (6) years from a Change in
Control, (ii) covers Indemnitee for actions and omissions occurring on or prior
to the date of the Change in Control, (iii) contains terms and conditions that
are, in the aggregate, no less favorable to Indemnitee than those of the
Indemnitee immediately prior to the Change in Control. The Company shall
promptly notify Indemnitee of any good faith determination to reduce or not
provide such coverage.

  11.3   In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be reasonably necessary to secure such rights, including the execution of
such documents reasonably necessary to enable the Company effectively to bring
suit to enforce such rights.

12.   No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy,

 

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    provision of the Certificate of Incorporation, By-law or otherwise) of the
amounts otherwise indemnifiable under this Agreement.

13.   Defense of Claims. The Company shall be entitled to participate in the
defense of any Claim relating to an Indemnifiable Event or to assume the defense
of such Claim, with counsel reasonably satisfactory to the Indemnitee; provided,
however, that if Indemnitee believes, after consultation with counsel selected
by Indemnitee, that (i) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with an actual or potential conflict of
interest, (ii) the named parties in any such Claim (including any impleaded
parties) include both the Company and Indemnitee and Indemnitee concludes that
there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, or (iii) any
such representation by such counsel would be precluded under the applicable
standards of professional conduct then prevailing, then Indemnitee shall be
entitled to retain separate counsel (but not more than one law firm plus, if
applicable, local counsel in respect of any particular Claim) at the Company’s
expense. The Company shall not be liable to Indemnitee under this Agreement for
any amounts paid in settlement of any Claim relating to an Indemnifiable Event
effected without the Company’s prior written consent. The Company shall not,
without the prior written consent of the Indemnitee, effect any settlement of
any Claim relating to an Indemnifiable Event to which the Indemnitee is or could
have been a party unless such settlement solely involves the payment of money
and includes a complete and unconditional release of Indemnitee from all
liability on all claims that are the subject matter of such Claim. Neither the
Company nor Indemnitee shall unreasonably withhold its or his or her consent to
any proposed settlement; provided that Indemnitee may withhold consent to any
settlement that does not provide a complete and unconditional release of
Indemnitee.

14.   Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation, or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, executors, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director or officer of the Company or of any
other enterprise at the Company’s request. The Company shall require and cause
any successor to all or substantially all of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to Indemnitee
and his or her counsel, expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place.

15.   Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a single
section, paragraph or sentence) are held by a court of competent jurisdiction to
be invalid, void, or otherwise

 

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    unenforceable in any respect, and the validity and enforceability of any
such provision in every other respect and of the remaining provisions of this
Agreement shall not be in any way impaired and shall remain enforceable to the
fullest extent permitted by law.

16.   Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.

17.   Specific Performance. The parties recognize that if any provision of this
Agreement is violated by the Company, Indemnitee may be without an adequate
remedy at law. Accordingly, in the event of any such violation, Indemnitee shall
be entitled, if Indemnitee so elects, to institute proceedings, either in law or
at equity, to obtain damages, to enforce specific performance, to enjoin such
violation, or to obtain any relief or any combination of the foregoing as
Indemnitee may elect to pursue.

18.   Counterparts. This Agreement may be executed in counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement. This Agreement may be executed by
signatures delivered by facsimile or in pdf or other electronic format, which
shall be deemed an original.

19.   Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
understandings and agreements between the parties, whether written or oral, with
respect to the subject matter hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.

 

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AGREED AND ACCEPTED
Accepted by Wright Medical Group, Inc. and
effective as of 9/17/2011 (the
“Effective Date”)

         
 
      ROBERT J. PALMISANO
WRIGHT MEDICAL GROUP, INC.
   
 
       
By:
  /s/ David D. Stevens   /s/ Robert J. Palmisano
 
       
 
       
Title:
  Interim CEO and Chairman    
 
       

 

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EXHIBIT F
GENERAL RELEASE AGREEMENT
     This General Release Agreement (this “Agreement”), is made and entered into
this __ day of_________,_______, by and between Wright Medical Group, Inc. (the
“Company ”), a corporation organized and existing under the laws of the State of
Delaware, with its principal place of business at 5677 Airline Road, Arlington,
Tennessee 38002, and Robert J. Palmisano (the “Executive”).
     The Executive, on behalf of the Executive and the Executive’s heirs,
executors, administrators, successors and assigns, whether herein named or
referred to or not, does hereby release, discharge, and acquit and by these
presents does hereby release, acquit, and forever discharge the Company, its
successors and assigns, their agents, servants, and employees, its subsidiaries,
divisions, subdivisions, and affiliates (collectively, the “Company”), of and
from any and all past, present, and future claims, counterclaims, demands,
actions, causes of action, liabilities, damages, costs, loss of services,
expenses, compensation, third-party actions, suits at law or in equity, of every
nature and description, whether known or unknown, suspected or unsuspected,
foreseen, or unforeseen, real or imaginary, actual or potential, and whether
arising at law or in equity, under the common law, state or federal law, or any
other law, or otherwise, arising out of or relating to the Executive’s
employment with the Company or the termination thereof, hereinafter collectively
referred to as claims. It is the intention of the parties hereto to affect a
full and final general release of all such claims. It is expressly understood
and agreed that this release and agreement is intended to cover, and does cover,
not only all now known injuries, losses, and damages, but any future injuries,
losses, and damages not now known or anticipated, but which may later develop or
be discovered, including all the effects and consequences thereof. The Executive
is not releasing and “claims” shall not include any rights or claims the
Executive has (1) pursuant to the Employment Agreement between the Company and
the Executive, any equity award granted to the Executive by the Company or the
Indemnification Agreement between the Company and the Executive; (2) to be
indemnified and advanced expenses in accordance with applicable law, or the
Company’s corporate documents or be covered under any applicable directors’ and
officers’ liability insurance policies, (3) with respect to any rights which
have accrued or become vested as of the date of this Release, including any
rights to any outstanding equity awards, and (4) with respect to any claims
which arise after the date this Release is executed by the Executive.
     The Executive does hereby declare that the Executive does understand,
covenant, and agree that the Executive will not make any claims or demands, or
file any legal proceedings against the Company or join the Company as a party
with respect to any claims released by the Executive herein nor shall the
Executive proceed against any other party, person, firm, or corporation on the
claims released above except as is necessary to enforce the terms and conditions
of this Release and the Employment Agreement between the Executive and the
Company. The Executive further declares that he is voluntarily forfeiting any
right to recover or receive compensation in any form resulting from a legal
action or demand against the Company

 

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by any other person or persons with respect to the claims released by the
Executive herein.
THE FILING OF ANY CLAIM, DEMAND OR ANY AND ALL OTHER LEGAL PROCEEDINGS BY THE
EXECUTIVE AGAINST THE COMPANY WITH RESPECT TO CLAIMS RELEASED BY THE EXECUTIVE
HEREIN SHALL BE DEEMED TO BE A MATERIAL BREACH OF THE TERMS OF THIS AGREEMENT.
SUCH BREACH SHALL IMMEDIATELY TERMINATE COMPANY’S DUTY TO PAY ANY FURTHER SUMS
TO EXECUTIVE. ADDITIONALLY, EXECUTIVE SHALL INDEMNIFY AND HOLD HARMLESS THE
COMPANY FROM ANY AND ALL JUDGMENTS, COSTS, EXPENSES, OR ATTORNEY FEES WHATSOEVER
ARISING ON ACCOUNT OF THE FILING OF ANY SUCH CLAIM, DEMAND, OR OTHER LEGAL
PROCEEDINGS BY THE EXECUTIVE WITHIN RESPECT TO THE CLAIMS HE HAS RELEASED
HEREIN.
     It is further understood and agreed that the Company will pay and the
Executive is accepting severance payments and benefits more fully described in
the Employment Agreement between the parties in full accord and satisfaction of
any obligations, claims, and/or disputes that Executive may have with the
Company with respect to the claims released by the Executive herein.
     And the parties hereby declare, understand, covenant, and agree that the
terms of the Employment Agreement, and the severance payments and benefits
stated therein, are the sole consideration for this Release Agreement and that
the Executive voluntarily accepts said consideration for the purpose of making a
full and final compromise, adjustment and settlement of all claims for injuries,
losses, and damages resulting, or to result, from the claims released by the
Executive herein.
     It is further understood and agreed that this is the full and complete
understanding of the parties, that it is the integrated memorial of their
agreement and that there are no other written or oral understandings,
agreements, covenants, promises, or arrangements, directly or indirectly
connected with this release, that are not incorporated herein. The terms of this
release are contractual and are not mere recitals.
     Notwithstanding the foregoing, nothing in this Release shall release any
party from obligations resulting from the Employment Agreement nor prohibit any
party from seeking the enforcement of the Employment Agreement.

 

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     IN WITNESS WHEREOF, the parties executed this Release as of the date set
forth above.
AGREED AND ACCEPTED

          WRIGHT MEDICAL GROUP, INC.
    By:         Title:               

              EXECUTIVE
                 Robert J. Palmisano           

 

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EXHIBIT G
ADEA RELEASE
     In further consideration for the payment of severance payments and benefits
provided under the Employment Agreement between (i) Robert J. Palmisano
(hereinafter referred to as “Executive”) and (ii) Wright Medical Group, Inc..
(hereafter referred to as “Company”), Executive, for himself and Executive’s
heirs, executors, administrators and assigns, hereby unconditionally releases
and forever discharges the Company and each of the Company’s stockholders,
predecessors, successors, assigns, agents, directors, officers, employees,
representatives, attorneys, divisions, subsidiaries, affiliates and all persons
acting by, through, under, or in concert with any of them from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys’ fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected
arising out of or relating to his employment with the Company or his termination
of such employment, including, but not limited to, rights, under the Age
Discrimination in Employment Act of 1967, as amended from time to time, and
other federal, state, or local laws prohibiting discrimination, any claims the
employee may have with regard to Executive’s hiring, employment, and termination
of employment, and any claims growing out of any legal restrictions on the
Company’s right to terminate its employees (“Claim” or Claims”), which Executive
now has, owns or holds, or claims to have owned or held, or which Executive at
any time hereinafter may have owned or held or claimed to have owned or held
against the Company. Executive is not releasing and Claims shall not include any
rights or claims Executive has (1) pursuant to the Employment Agreement among
Executive and the Company, any equity award granted to Executive by the Company,
or the Indemnification Agreement between the Company and the Executive; (2) to
be indemnified and advanced expenses in accordance with applicable law, or the
Company’s corporate documents or to be covered under any applicable directors’
and officers’ liability insurance policies; (3) with respect to any rights which
have accrued or become vested as of the date of this Release, including any
rights to any outstanding equity awards; and (4) with respect to any Claims
which arise after the date this Release is executed by Executive.
     To comply with the Older Workers Benefit Protection Act of 1990, as amended
from time to time, this Release has advised Executive of the legal requirements
of this Act and fully incorporates the legal requirements by reference into this
Agreement as follows:

  a.   This Agreement is written in layman’s terms, and Executive understands
and comprehends its terms;     b.   Executive has been advised of Executive’s
rights to consult an attorney to review the Agreement;     c.   Executive does
not waive any rights or claims that may arise after the date the Release is
executed;

 

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  d.   Executive is receiving consideration beyond anything of value to which he
already is entitled;     e.   Executive has been given a reasonable period of
time to consider this Agreement (45 days).

The Executive enters into this Release with full knowledge of its contents and
enters into this Release voluntarily.
AGREED AND ACCEPTED

      EXECUTIVE:           I acknowledge that I fully understand and agree that
this Release may be pleaded by Wright Medical Group, Inc. as a complete defense
to any claim released by me herein which hereafter may be asserted by me or a
claim released by me herein against Wright Medical Group, Inc. for or on account
of any matter or thing whatsoever arising out of the employment relationship or
my termination from active employment for which I have released such claims
herein.          
 
    Robert J. Palmisano    

NOTE: EXECUTIVE IS HEREBY ADVISED OF HIS OR HER RIGHT TO RESCIND AND NULLIFY
THIS AGREEMENT, WHICH RIGHT MUST BE EXERCISED, IF AT ALL, WITHIN SEVEN (7) DAYS
OF THE DATE OF EXECUTIVE’S SIGNATURE. EXECUTIVE MUST REVOKE RELEASE BY LETTER TO
WRIGHT MEDICAL TECHNOLOGY, INC., ATTENTION: GENERAL COUNSEL, 5677 AIRLINE ROAD,
ARLINGTON, TN 38002, WITHIN SEVEN (7) DAYS. NO CONSIDERATION SHALL BE CONVEYED
UNTIL SUCH TIME PERIOD HAS EXPIRED.

 

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EXHIBIT H
MODIFIED 280G CUTBACK
     Notwithstanding anything to the contrary in this Agreement, in any other
agreement between or among the Executive, and the Company or in any plan
maintained by the Company or any Affiliate, if there is a 280G Change in Control
(as defined in Section (g)(i) below), the following rules shall apply:
     (a) Except as otherwise provided in Section (b) below, if it is determined
in accordance with Section (d) below that any portion of the Payments (as
defined in Section (g)(ii) below) that otherwise would be paid or provided to
the Executive or for his benefit in connection with the 280G Change in Control
would be subject to the excise tax imposed under Section 4999 of the Code
(“Excise Tax”), then such Payments shall be reduced by the smallest total amount
necessary in order for the aggregate present value of all such Payments after
such reduction, as determined in accordance with the applicable provisions of
Section 280G of the Code and the regulations issued thereunder, not to exceed
the Excise Tax Threshold Amount (as defined in Section (g)(iii) below).
     (b) No reduction in any of the Executive’s Payments shall be made pursuant
to Section (a) above if it is determined in accordance with Section (d) below
that the After Tax Amount of the Payments payable to the Executive without such
reduction would exceed the After Tax Amount of the reduced Payments payable to
him in accordance with Section (a) above. For purposes of the foregoing, (i) the
“After Tax Amount” of the Payments, as computed with, and as computed without,
the reduction provided for under Section (a) above, shall mean the amount of the
Payments, as so computed, that the Executive would retain after payment of all
taxes (including without limitation any federal, state or local income taxes,
the Excise Tax or any other excise taxes, any medicare or other employment
taxes, and any other taxes) imposed on such Payments in the year or years in
which payable; and (ii) the amount of such taxes shall be computed at the rates
in effect under the applicable tax laws in the year in which the 280G Change in
Control occurs, or if then ascertainable, the rates in effect in any later year
in which any Payment is expected to be paid following the 280G Change in
Control, and in the case of any income taxes, by using the maximum combined
federal, state and (if applicable) local income tax rates then in effect under
such laws.
     (c) Any reduction in the Executive’s Payments required to be made pursuant
to Section (a) above (the “Required Reduction”) shall be made as follows: first,
any Payments that became fully vested prior to the 280G Change in Control and
that pursuant to paragraph (b) of Treas. Reg. §1.280G-1, Q/A 24 are treated as
Payments solely by reason of the acceleration of their originally scheduled
dates of payment shall be reduced, by cancellation of the acceleration of their
dates of payment; second, any severance payments or benefits, performance-based
cash or performance-based equity incentive awards, or other Payments, in all
cases the full amounts of which are treated as contingent on the 280G Change in
Control pursuant to paragraph (a) of

 

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Treas. Reg. §1.280G-1, Q/A 24, shall be reduced; and third, any cash or equity
incentive awards, or nonqualified deferred compensation amounts, that vest
solely based on the Executive’s continued service with the Company, and that
pursuant to paragraph (c) of Treas. Reg. §1.280G-1, Q/A 24 are treated as
contingent on the 280G Change in Control because they become vested as a result
of the 280G Change in Control, shall be reduced, first by cancellation of any
acceleration of their originally scheduled dates of payment (if payment with
respect to such items is not treated as automatically occurring upon the vesting
of such items for purposes of Section 280G) and then, if necessary, by canceling
the acceleration of their vesting. In each case, the amounts of the Payments
shall be reduced in the inverse order of their originally scheduled dates of
payment or vesting, as applicable, and shall be so reduced only to the extent
necessary to achieve the Required Reduction.
     (d) A determination as to whether any Excise Tax is payable with respect to
the Executive’s Payments and if so, as to the amount thereof, and a
determination as to whether any reduction in the Executive’s Payments is
required pursuant to the provisions of Sections (a) and (b) above, and if so, as
to the amount of the reduction so required, shall be made by no later than
15 days prior to the closing of the transaction or the occurrence of the event
that constitutes the 280G Change in Control, or as soon thereafter as
administratively practicable. Such determinations, and the assumptions to be
utilized in arriving at such determinations, shall be made by an independent
auditor (the “Auditor”) jointly selected by the Executive and the Company, all
of whose fees and expenses shall be borne and directly paid solely by the
Company. The Auditor shall be a nationally recognized public accounting firm
which has not, during the two years preceding the date of its selection, acted
in any way on behalf of the Company or any of its Affiliates or for any entity
effecting the 280G Change in Control. If the Executive and the Company cannot
agree on the firm to serve as Auditor, then the Executive and the Company shall
each select one accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor. The Auditor shall provide a written
report of its determinations, including detailed supporting calculations, both
to the Executive and to the Company. If the Auditor determines that no Excise
Tax is payable with respect to the Executive’s Payments, either as a result of
any Required Reduction the Auditor has determined should be made thereto or
because the Auditor has determined that no Required Reduction must be made
thereto, the written report which the auditor furnishes to the Executive and to
the Company pursuant to the preceding sentence shall be accompanied by an
opinion reasonably acceptable to the Executive that no Excise Tax will be
imposed with respect to the Executive’s Payments. Except as otherwise provided
in Section (e) or Section (f) below, the determinations made by the Auditor
pursuant to this Section (d) shall be binding upon the Executive and the
Company.
     (e) If, notwithstanding (1) any determination made pursuant to Section
(d) above that a reduction in the Executive’s Payments is not required pursuant
to Section (a) above or (2) any reduction in the Executive’s Payments made
pursuant to Section (a) above, the IRS subsequently asserts that the Executive
is liable for Excise Tax with respect to such Payments, the Payments then
remaining to be paid or provided to Executive shall be reduced as provided in
Sections (a) and (b) above or shall be further reduced as provided in Section
(a) above, and (if still necessary after such reduction or further reduction)
any Payments already made to Executive shall be

 

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repaid to the Company, to the extent necessary to eliminate the Excise Tax
asserted by the IRS to be payable by the Executive. Any such reduction or
further reduction or repayment (i) shall be made only if the IRS agrees that
such reduction or further reduction or repayment will be effective to avoid the
imposition of any Excise Tax with respect to the Executive’s Payments as so
reduced or repaid and agrees not to impose such Excise Tax against the Executive
if such reduction or further reduction or repayment is made, and (ii) shall be
made in the manner described in Section (c) above,
     (f) Notwithstanding anything to the contrary in the foregoing provisions of
this Exhibit E, if (i) the Executive’s Payments have been reduced pursuant to
Section (a) above and the IRS nevertheless subsequently determines that Excise
Tax is payable with respect to the Executive’s Payments, and (ii) if the After
Tax Amount of the Payments payable to the Executive, determined without any
further reduction or repayment as provided in Section (e) above, and without any
initial reduction as provided in Section (a) above, would exceed the After Tax
Amount of the Payments payable to him as reduced in accordance with Section (a),
then (A) no such further reduction or repayment shall be made with respect to
the Executive’s Payments pursuant to Section (e) above, and (B) the Company
shall pay to Executive an amount equal to the reduction in the Executive’s
Payments that was initially made pursuant to Section (a). Such amount shall be
paid to the Executive in a cash lump sum by no later than the 15th day of the
third month following the close of the calendar year in which the IRS makes its
final determination that Excise Tax is due with respect to the Executive’s
Payments, provided that by such day the Executive has paid the Excise Tax so
determined to be due.
     (g) For purposes of the foregoing, the following terms shall have the
following respective meanings:
          (i) “280G Change in Control” shall mean a change in the ownership or
effective control of the Company or Wright Medical Technology, Inc. or in the
ownership of a substantial portion of the assets of the Company or Wright
Medical Technology, Inc., as determined in accordance with Section 280G(b)(2) of
the Code and the regulations issued thereunder.
          (ii) “Payment” shall mean any payment or benefit in the nature of
compensation that is to be paid or provided to the Executive or for his benefit
in connection with a 280G Change in Control, to the extent that such payment or
benefit is “contingent” on the 280G Change in Control within the meaning of
Section 280G (b) (2) (A) (i) of the Code and the regulations issued thereunder.
          (iii) “Excise Tax Threshold Amount” shall mean an amount equal to
(x) three times the Executive’s “base amount” within the meaning of
Section 280G(b)(3) of the Code and the regulations issued thereunder, less (y)
$1,000.