**Exhibit10.1**

 

 

 

**Symmetry Medical Inc.2004 Employee Stock Purchase Plan**

Reportof Independent Registered Public Accounting Firm****andFinancial Statements

December31, 2005

 

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**Reportof Independent Registered Public Accounting Firm**

 

 

Compensation Committee of the Board of Directors

Symmetry Medical Inc.

Warsaw, Indiana

 

 

We have auditedthe accompanying statement of financial condition of the Symmetry Medical Inc.2004 Employee Stock Purchase Plan as of December 31, 2005, and the relatedstatements of income and changes in plan equity for the year then ended.  These financial statements are theresponsibility of the Plan’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted ouraudit in accordance with the standards of the Public Company AccountingOversight Board (United States).  Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement.  An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements.  An audit alsoincludes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation.  We believe that our auditprovides a reasonable basis for our opinion.

 

In our opinion,the financial statements referred to above present fairly, in all materialrespects, the financial position of the Symmetry Medical Inc. 2004 EmployeeStock Purchase Plan as of December 31, 2005, and the results of itsoperations for the year then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

 

/s/ BKD, LLP

 

Fort Wayne, Indiana

April 25, 2006

 

Federal Employer Identification Number:  44-0160260

 

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**Symmetry Medical Inc.2004 Employee Stock Purchase Plan**

**Statement of FinancialCondition**

**December 31, 2005**

** **

 
| **Assets**      | ** ** | ** ** | ** ** |
|-----------------|------------|------------|------------|
| Cash            |       | $          | 5,177      |   |
|            |       |       |       |
| **Plan Equity** |       | $          | 5,177      |   |

 

*See Notes to Financial Statements*

 

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**Symmetry Medical Inc.2004 Employee Stock Purchase Plan**

**Statement of Income andChanges in Plan Equity**

**Year Ended December 31,2005**

** **

 
| **Additions**                                       | ** ** | ** ** | ** ** |
|-----------------------------------------------------|------------|------------|------------|
| ** **                                          | ** ** | ** ** | ** ** |
| Participant contributions                           |       | $          | 847,498    |   |
|                                                |       |       |       |
| **Reductions**                                      |       |       |       |
| ** **                                          |       |       |       |
| Withdrawals and  terminations paid in cash          |       | (8,680     | )          |
| Purchase and distribution  of stock (60,793 shares) |       | (833,641   | )          |
|                                                |       |       |       |
|                                                |       | (842,321   | )          |
|                                                |       |       |       |
| Income and changes in plan  equity for the year     |       | 5,177      |       |
|                                                |       |       |       |
| Plan equity, beginning of  year                     |       | 0          |       |
|                                                |       |       |       |
| Plan equity, end of year                            |       | $          | 5,177      |   |

 

*See Notes to Financial Statements*

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**Note 1:**                                      Summaryof Significant Accounting Policies

 

***PlanAdministration***

 

The Compensation Committee (Committee) of the Board ofDirectors of Symmetry Medical Inc. (Company) administers the Plan.  The Committee has the authority to interpretthe Plan, to prescribe, amend and rescind rules and regulations relating to thePlan, and to make all other determinations necessary or advisable for theadministration of the Plan.  Theadministration, interpretation or application of the Plan by the Committee willbe final, conclusive and binding upon all persons.  The Company will bear the expenses of administeringthe Plan, except that any stamp duties or transfer taxes applicable toparticipation in the Plan may be charged to the accounts of the participants.

 

The purpose of the Plan is to provide eligibleemployees of the Company the opportunity to purchase the Company’s common stockthrough semiannual offerings financed by payroll deductions.  Participants may elect to have up to 10% ofcompensation deducted from their pay annually to purchase shares.  Participant contributions for any plan yearmay not, in the aggregate, exceed an amount that allows the participant topurchase Company stock with a collective fair market value of more than $25,000on the date of the grant to purchase Company stock.

 

***Organization***

 

The Plan was originally adopted by the Board ofDirectors on December 2, 2004.  A totalof 600,000 shares of common stock have been reserved for issuance under thePlan.  The number of shares reserved forissuance will be increased each year until 2014 by the lowest of 100,000shares, 1% of all shares outstanding at the end of the previous year, or alower amount determined by the Board of Directors.  The shares of common stock issued under thePlan may be newly issued shares or shares reacquired in private transactions oropen market purchases.  In 2005, allshares issued under the Plan were newly issued. Shares are issued to participants in their name, and the shares are notincluded in Plan assets.

 

The Plan began enrolling participants on March 28,2005, in an initial enrollment period that ended April 8, 2005.  During the initial enrollment period,participants were permitted to purchase shares with a lump sum contribution notto exceed 10% of eligible compensation participants have received or expectedto receive during the six-month period ended June 30, 2005.  Participants enrolled prior to June 30, 2005,were able to purchase stock at 85% of the lower of the Company’s initial publicoffering price of $15 per share or the closing price at June 30, 2005, asquoted on the New York Stock Exchange. Subsequent to June 30, 2005, participants can purchase shares at 95% ofthe closing on the last day of each exercise period.

 

The Company issued 50,468 shares at $12.75 per shareand 10,325 shares at $18.42 per share in June and December 2005, respectively,to participants in the Plan.  As ofDecember 31, 2005, the Plan had 249 participants.

 

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**Note 2:**                                      IncomeTax Status

The plan is not and will not be qualified underSection 401(a) of the Internal Revenue Code of 1986, as amended (Code).  The Plan is intended to qualify as anemployee stock purchase plan under Section 423 of the Code.  Consequently, the difference between thepurchase price and the fair market value of the stock purchase under the planis not includable in the participant’s gross income for federal income taxpurposes, unless a disqualifying distribution occurs.

 

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