Exhibit 10.7
WRIGHT MEDICAL GROUP, INC.
Stock Option Grant Agreement
Non-Employee Director
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 a
non-employee director; 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

 

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Stock Option Grant Agreement
Page 2
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”), 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.

3.   Restrictions. 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.   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

 

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Stock Option Grant Agreement
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    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.

(a) If, prior to the Expiration Date, Grantee does not stand for reelection by a
vote of the Company’s stockholders and retires from the Board at the end of
Grantee’s term as Director and Grantee ceases to be an Eligible Person, then
subject to Section 5(c), (i) the Options shall expire on the earlier of the
Expiration Date or the date that is ninety days after the last day of Grantee’s
term as a Director; (ii) the Options that are unexercisable on the last day of
Grantee’s term as a Director shall continue to vest and become exercisable until
the Options expire; and (iii) the Options that are exercisable on the last day
of Grantee’s term as a Director and the Options that become exercisable
thereafter pursuant to clause (ii) shall be exercisable until the Options
expire.
(b) If, prior to the Expiration Date, Grantee stands for reelection as a
Director by a vote of the Company’s stockholders but is not so reelected and
Grantee ceases to be an Eligible Person, then subject to Section 5(c), (i) the
Options shall expire on the earlier of the Expiration Date or the date that is
ninety days after the date of the stockholders’ vote; (ii) the Options that are
unexercisable on the date of the stockholders’ vote shall continue to vest and
become exercisable until the Options expire; and (iii) the Options that are
exercisable on the date of the stockholders’ vote and the Options that become
exercisable pursuant to clause (ii) shall be exercisable until the Options
expire.
(c) If, prior to the Expiration Date, Grantee dies after ceasing to serve as a
Director but before the Options would otherwise expire pursuant to Sections 5(a)
or 5(b) above, then (a) the Options shall expire on the earlier of the
Expiration Date or the date that is one (1) year after the date of the
Participant’s death; (B) the Options that are unexercisable on the date of the
event specified in Sections 5(a) or 5(b), as applicable, shall either cease or
continue to vest and become exercisable pursuant to clause (ii) of such section;
and (C) the Options that are exercisable on the date of the event specified in
Sections 5(a) or 5(b), as applicable, and the Options that become exercisable
thereafter pursuant to clause (ii) of such Section, if any, shall be exercisable
until the Options expire. In the event of Grantee’s death, the Options shall be
exercisable by the executor or administrator of the estate of Grantee or the
person or persons to whom the Options have been validly transferred by the
executor or administrator pursuant to a will or the laws of descent and
distribution.
(d) If, prior to the Expiration Date, Grantee ceases to serve as a Director for
a reason other than those specified in Section 5(a) or 5(b) and Director 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 serve as a Director or 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.
(e) Whether the Grantee has ceased to be a Director and the basis therefore
shall be determined by the Committee, whose determination shall be final,
binding and conclusive.
(f) If Grantee ceases to be a Director, but remains an Eligible Person, this
Agreement will continue to apply to the Options granted hereunder.

 

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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.

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

 

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      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 exercise of this Option. By accepting the Option, Grantee covenants to
report such income in accordance with applicable federal and state laws. To the
extent that the exercise of the Options results in income to Grantee and
withholding obligations of the Company, including federal or state withholding
obligations, Grantee agrees that the Company shall retain and instruct a
registered broker(s) to sell such number of Grantee’s 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. Grantee represents to the Company that, as of the date hereof,
Grantee is not aware of any material nonpublic information about the Company or
the Shares. 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.*   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.

 

*   Grantee understands that the sale of Shares to satisfy tax or any
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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  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.

 

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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.    
 
               
 
      By:        
 
          Jason P. Hood, Vice President,
General Counsel, and Secretary