8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 29, 2010

WRIGHT MEDICAL GROUP, INC.

(Exact name of registrant as specified in charter)

Delaware
(State or other jurisdiction
of incorporation) 000-32883
(Commission
File Number) 13-4088127
(IRS Employer
Identification Number)

5677 Airline Road, Arlington, Tennessee
(Address of principal executive offices) 38002
(Zip Code)

Registrant’s telephone number, including area code: (901) 867-9971

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On September 30, 2010, Wright Medical Group, Inc. announced that its wholly-owned subsidiary, Wright Medical Technology, Inc. (Company), entered into a Deferred Prosecution Agreement (DPA) with the United States Attorney’s Office for the District of New Jersey (USAO) and a civil Settlement Agreement (CSA) with the United States. These agreements resolve the USAO’s investigation into the Company’s consulting arrangements with orthopaedic surgeons relating to its hip and knee products in the United States. A copy of the press release is furnished as Exhibit 99.

Under the DPA, the USAO agrees not to prosecute the Company in connection with the matter if the Company satisfies its obligations during the 12 month term of the DPA. Pursuant to the CSA, the Company will settle civil and administrative claims relating to the matter for a payment of $7,929,900, without any admission by the Company. In conjunction with the CSA, the Company also entered into a five (5) year Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the United States Department of Health and Human Services. The Corporate Integrity Agreement acknowledges the existence of our corporate compliance program and provides for certain other compliance-related activities during the five-year term of the agreement.

Pursuant to the DPA, an independent monitor will review and evaluate the Company’s compliance with its obligations under the DPA.

Together, the agreements announced today resolve the investigation commenced by the USAO in December of 2007. The USAO specifically acknowledges in the DPA that it does not allege that the Company’s conduct adversely affected patient health or patient care.

The Company previously accrued approximately $8 million for an anticipated settlement of this investigation, and therefore, these agreements are not anticipated to materially impact the Company’s results of operations for the third quarter of 2010.

The foregoing description of the Settlement Agreement, the Corporate Integrity Agreement and the Deferred Prosecution Agreement is not complete and is qualified in its entirety by reference to the full text of such agreements, which are filed hereto as Exhibit 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.

This current report contains “forward-looking statements” as defined under U.S. federal securities laws. These statements reflect management’s current knowledge, assumptions, beliefs, estimates, and expectations and express management’s current views of future performance, results, and trends and may be identified by their use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” and other similar terms. Forward-looking statements are subject to a number of risks and uncertainties that could cause the Company’s actual results to materially differ from those described in the forward-looking statements. Such risks and uncertainties include the impact of the Company’s settlement of the federal investigation into the Company’s consulting arrangements with orthopaedic surgeons relating to its hip and knee products in the United States, including the Company’s compliance with the DPA through September 2011 and the CIA through September 2015, and those risks and uncertainties discussed in the Company’s filings with the Securities and Exchange Commission (including those described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, under the heading, “Risk Factors” and the Company’s subsequently filed Securities and Exchange Act of 1934 reports). Readers should not place undue reliance on forward-looking statements. Such statements are made as of the date of this report, and the Company undertakes no obligation to update such statements after this date.

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Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
10.1	Settlement Agreement dated September 29, 2010, among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services, and Wright Medical Technology, Inc.
10.2	Corporate Integrity Agreement dated September 29, 2010, between Wright Medical Technology, Inc. and the Office of Inspector General of the Department of Health and Human Services
10.3	Deferred Prosecution Agreement dated September 29, 2010, between Wright Medical Technology, Inc. and the United States Attorney’s Office for the District of New Jersey
99	Press Release, dated September 30, 2010, issued by Wright Medical Group, Inc.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

     Date: September 30, 2010

WRIGHT MEDICAL GROUP, INC.
By:	/s/ Gary D. Henley
	Gary D. Henley
	President and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Settlement Agreement dated September 29, 2010, among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services, and Wright Medical Technology, Inc.
10.2	Corporate Integrity Agreement dated September 29, 2010, between Wright Medical Technology, Inc. and the Office of Inspector General of the Department of Health and Human Services
10.3	Deferred Prosecution Agreement dated September 29, 2010, between Wright Medical Technology, Inc. and the United States Attorney’s Office for the District of New Jersey
99	Press Release, dated September 30, 2010, issued by Wright Medical Group, Inc.

EX-10.1

Exhibit 10.1

SETTLEMENT AGREEMENT

I. PARTIES

     This Settlement Agreement (“Agreement”) is entered into among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General (“HHS-OIG”) of the Department of Health and Human Services (“HHS”) (collectively the “United States”); and Wright Medical Technology, Inc. (“Wright”), through their authorized representatives.

II. PREAMBLE

     As a preamble to this Agreement, the Parties agree to the following:

     A. Wright is a Delaware Corporation headquartered in Arlington, Tennessee that manufactures, sells and distributes orthopaedic medical devices in the United States.

     B. Wright has executed contemporaneously with this Agreement a Deferred Prosecution Agreement (“DPA”) with the United States Attorney’s Office for the District of New Jersey.

     C. The United States contends that Wright caused to be submitted improper claims for payment to the Medicare Program (“Medicare”), Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395kkk-1.

     D. The United States contends that it has certain civil claims, against Wright, as specified in Section III, Paragraph 2, below, for engaging in the following conduct during the period from January 1, 2002 to December 31, 2007 (hereinafter the “Covered Conduct”):

     Wright used, and conspired to use, various forms of financial arrangements to induce orthopaedic surgeons to cause providers to use Wright’s hip and knee joint replacement implants

Settlement Agreement Between the United States
of America and Wright Medical Technology, Inc.

in order to maintain and increase Wright’s market share. These financial arrangements included, but were not limited to fee-for-service contracts, fixed fee contracts, and product development contracts, among others. The United States contends that certain of these financial arrangements were improper, that the remuneration paid thereunder was improper and/or unlawful, and that these arrangements caused hospitals and physicians to submit false and fraudulent claims for replacement of hip and knee joints using Wright implants to Medicare.

     E. The United States contends also that it has certain administrative claims, as specified in Section III, Paragraph 3, below, against Wright for engaging in the Covered Conduct.

     F. This Agreement is made in compromise of disputed claims. It is neither an admission by Wright nor a concession by the United States.

     G. To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the above claims, the Parties mutually desire to reach a full and final settlement pursuant to the Terms and Conditions below.

III. TERMS AND CONDITIONS

     NOW THEREFORE, in consideration of the mutual promises, covenants, and obligations set forth below, and for good and valuable consideration as stated herein, the Parties agree as follows:

     1. Wright agrees to pay to the United States $7,929,900 (seven million, nine hundred twenty-nine thousand, nine hundred dollars ) (the “Settlement Amount”). Wright agrees to pay the Settlement Amount by electronic funds transfer pursuant to written instructions to be provided by the United States Attorney’s Office for the District of New Jersey. Wright shall

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make this electronic funds transfer within ten business days of the Effective Date of this Agreement.

     2. Subject to the exceptions specified in Paragraph 4, below, and conditioned upon Wright’s full payment of the Settlement Amount, the United States releases Wright together with its current and former parent corporations; direct and indirect subsidiaries; brother or sister corporations; divisions; and affiliates; and the predecessors, successors and assigns of any of them from any civil or administrative monetary claim that the United States has or may have for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; and any statutory provision applicable to the federally-funded programs listed in this Agreement for which the Civil Division, United States Department of Justice has actual and present authority to assert and compromise pursuant to 28 C.F.R. Part 0, Subpart I, § 0.45(d); and common law theories of payment by mistake, unjust enrichment, disgorgement, fraud, and recoupment.

     3. In consideration of the obligations of Wright set forth in this Agreement, in the DPA, and in the Corporate Integrity Agreement (“CIA”) entered into between HHS-OIG and Wright, and conditioned upon Wright’s full payment of the Settlement Amount and compliance with its obligations under the DPA, the HHS-OIG agrees to release and refrain from instituting, directing, or maintaining any administrative claim or action seeking exclusion from Medicare, Medicaid, and other Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f)) against Wright, together with its current and former parent corporations; direct and indirect subsidiaries; brother or sister corporations; divisions; and affiliates; and the predecessors, successors and

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assigns of any of them, under 42 U.S.C. § 1320a-7a (Civil Monetary Penalties Law) or 42 U.S.C. § 1320a-7(b)(7) (permissive exclusion for fraud, kickbacks, and other prohibited activities) for the Covered Conduct, except as reserved in Paragraph 4, below, and as reserved in this Paragraph. The HHS-OIG expressly reserves all rights to comply with any statutory obligations to exclude Wright, together with its current and former parent corporations; each of its direct and indirect subsidiaries; brother or sister corporations; divisions; current or former owners, officers, directors, and affiliates; and the predecessors, successors and assigns of any of them, from Medicare, Medicaid, or other Federal health care programs under 42 U.S.C. § 1320a-7(a) (mandatory exclusion) based upon the Covered Conduct. The HHS-OIG also expressly reserves all rights to exclude Wright pursuant to the terms and conditions of Paragraph 51 of the DPA. Nothing in this Paragraph precludes the HHS-OIG from taking action against entities or persons, or for conduct and practices, for which claims have been reserved in Paragraph 4, below.

     4. Notwithstanding any term of this Agreement, specifically reserved and excluded from the scope and terms of this Agreement as to any entity or person (including Wright) are the following:

a.	Any civil, criminal, or administrative liability arising under Title 26, U.S. Code (Internal Revenue Code);
b.	Any criminal liability;
c.	Except as explicitly stated in this Agreement, any administrative liability, including mandatory exclusion from Federal health care programs;
d.	Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct;

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e.	Any liability based upon such obligations as are created by this Agreement;
f.	Any liability for personal injury or property damage or for other consequential damages arising from the Covered Conduct;
g.	Any liability for failure to deliver goods or services due;
h.	Any liability of individuals, including officers and employees; and
i.	Any liability for express or implied warranty claims or other claims for defective or deficient products or services.

     5. Wright waives and shall not assert any defenses Wright may have to any criminal prosecution or administrative action relating to the Covered Conduct, which defenses may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action. Nothing in this Paragraph or any other provision of this Agreement constitutes an agreement by the United States concerning the characterization of the Settlement Amount for purposes of the Internal Revenue laws, Title 26 of the United States Code.

     6. Wright fully and finally releases the United States, its agencies, employees, servants, and agents from any claims (including attorney’s fees, costs, and expenses of every kind and however denominated) that Wright has asserted, could have asserted, or may assert in the future against the United States, its agencies, employees, servants, and agents, related to the Covered Conduct and the United States’ investigation and prosecution thereof.

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     7. The Settlement Amount shall not be decreased as a result of the denial of claims for payment now being withheld from payment by any Medicare carrier or intermediary or any state payor, related to the Covered Conduct; and, if applicable, Wright agrees not to resubmit to any Medicare carrier or intermediary or any state payor any previously denied claims related to the Covered Conduct, and agrees not to appeal any such denials of claims.

     8. Wright agrees to the following:

          a. Unallowable Costs Defined: That all costs (as defined in the Federal Acquisition Regulation, 48 C.F.R. § 31.205-47; and in Titles XVIII and XIX of the Social Security Act, 42 U.S.C. §§ 1395-1395kkk-1 and 1396-1396w-5; and the regulations and official program directives promulgated thereunder) incurred by or on behalf of Wright, together with its current and former parent corporations; each of its direct and indirect subsidiaries; brother or sister corporations; divisions; current or former owners, officers, directors, employees, shareholders, agents, and affiliates; and the predecessors, successors and assigns of any of them in connection with the following shall be “unallowable costs” on government contracts and under the Medicare Program, Medicaid Program, TRICARE Program, and Federal Employees Health Benefits Program (FEHBP):

               (1) the matters covered by this Agreement and any related plea or deferred prosecution agreement;

               (2) the United States’ audit(s) and civil and any criminal investigation(s) of the matters covered by this Agreement;

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               (3) Wright’s investigation, defense, and corrective actions undertaken in response to the United States’ audit(s) and civil and any criminal investigation(s) in connection with the matters covered by this Agreement (including attorney’s fees);

               (4) the negotiation and performance of this Agreement and any plea or deferred prosecution agreement;

               (5) the payment Wright makes to the United States pursuant to this Agreement, including any costs and attorneys fees; and

               (6) the negotiation of, and obligations undertaken pursuant to the CIA to: (i) retain an independent review organization to perform annual reviews as described in Section III of the CIA; and (ii) prepare and submit reports to the HHS-OIG. However, nothing in this Paragraph 8.a.(6) that may apply to the obligations undertaken pursuant to the CIA affects the status of costs that are not allowable based on any other authority applicable to Wright. (All costs described or set forth in this Paragraph 8.a. are hereafter “unallowable costs.”)

          b. Future Treatment of Unallowable Costs: If applicable, these unallowable costs shall be separately determined and accounted for by Wright, and Wright shall not charge such unallowable costs directly or indirectly to any contracts with the United States or any State Medicaid program, or seek payment for such unallowable costs through any cost report, cost statement, information statement, or payment request submitted by Wright or any of its subsidiaries or affiliates to the Medicare, Medicaid, TRICARE, or FEHBP Programs.

          c. Treatment of Unallowable Costs Previously Submitted for Payment: If applicable, Wright further agrees that within 90 days of the Effective Date of this Agreement it shall identify to applicable Medicare and TRICARE fiscal intermediaries, carriers, and/or

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contractors, and Medicaid and FEHBP fiscal agents, any unallowable costs (as defined in this Paragraph) included in payments previously sought from the United States, or any State Medicaid program, including, but not limited to, payments sought in any cost reports, cost statements, information reports, or payment requests already submitted by Wright or any of its subsidiaries or affiliates, and shall request, and agree, that such cost reports, cost statements, information reports, or payment requests, even if already settled, be adjusted to account for the effect of the inclusion of the unallowable costs. Wright agrees that the United States, at a minimum, shall be entitled to recoup from Wright any overpayment plus applicable interest and penalties as a result of the inclusion of such unallowable costs on previously-submitted cost reports, information reports, cost statements, or requests for payment.

     Any payments due after the adjustments have been made shall be paid to the United States pursuant to the direction of the Department of Justice and/or the affected agencies. The United States reserves its rights to disagree with any calculations submitted by Wright or any of its subsidiaries or affiliates on the effect of inclusion of unallowable costs (as defined in this Paragraph) on Wright or any of its subsidiaries or affiliates’ cost reports, cost statements, or information reports.

          d. Nothing in this Agreement shall constitute a waiver of the rights of the United States to examine or reexamine Wright’s books and records to determine that no unallowable costs have been claimed in accordance with the provisions of this Paragraph.

     9. This Agreement is intended to be for the benefit of the Parties only. The Parties do not release any claims against any other person or entity, except to the extent provided for in Paragraphs 2, 3, 6, and 10.

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     10. Wright waives and shall not seek payment for any of the health care billings covered by this Agreement from any health care beneficiaries or their parents, sponsors, legally responsible individuals, or third party payors based upon the claims defined as Covered Conduct.

     11. Wright warrants that it has reviewed its financial situation and that it currently is solvent within the meaning of 11 U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(I), and shall remain solvent following its payment to the United States of the Settlement Amount. Further, the Parties warrant that, in evaluating whether to execute this Agreement, they (a) have intended that the mutual promises, covenants, and obligations set forth constitute a contemporaneous exchange for new value given to Wright, within the meaning of 11 U.S.C. § 547(c)(1); and (b) conclude that these mutual promises, covenants, and obligations do, in fact, constitute such a contemporaneous exchange. Further, the Parties warrant that the mutual promises, covenants, and obligations set forth herein are intended to and do, in fact, represent a reasonably equivalent exchange of value that is not intended to hinder, delay, or defraud any entity to which Wright was or became indebted, on or after the date of this transfer, all within the meaning of 11 U.S.C. § 548(a)(1).

     12. Each Party to this Agreement shall bear its own legal and other costs incurred in connection with this matter, including the preparation and performance of this Agreement.

     13. Wright represents that this Agreement is freely and voluntarily entered into without any degree of duress or compulsion whatsoever.

     14. This Agreement is governed by the laws of the United States. The Parties agree that the exclusive jurisdiction and venue for any dispute arising between and among the Parties under this Agreement is the United States District Court for the District of New Jersey, except

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that disputes arising under the DPA and/or CIA shall be resolved exclusively under the dispute resolution provisions in those agreements.

     15. For purposes of construing this Agreement, this Agreement shall be deemed to have been drafted by all the Parties to this Agreement and shall not therefore be construed against any Party for that reason in any subsequent dispute.

     16. This Agreement, together with the CIA and the DPA, constitute the complete agreement between the Parties. This Agreement may not be amended except by written consent of the Parties.

     17. The individuals signing this Agreement on behalf of Wright represent and warrant that they are authorized by Wright to execute this Agreement. The United States signatories represent that they are signing this Agreement in their official capacities and that they are authorized to execute this Agreement.

     18. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same Agreement.

     19. This Agreement is binding on Wright’s successors, transferees, heirs, and assigns.

     20. All Parties consent to the United States’ disclosure of this Agreement and information about this Agreement to the public.

     21. This Agreement is effective on the later of (1) the date of signature of the last signatory to the Agreement; or (2) the date the Court approves of the DPA (“Effective Date” of the Agreement). Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Agreement.

[SIGNATURE BLOCKS ON FOLLOWING PAGE].

Settlement Agreement Between the United States
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THE UNITED STATES OF AMERICA

	J. GILMORE CHILDERS Attorney for the United States Acting Under Authority Conferred by 28 U.S.C. § 515 District of New Jersey
DATED: 9/29/10	BY:	/s/: ALEX KRIEGSMAN
			ALEX KRIEGSMAN Assistant United States Attorney
DATED: 9/29/10	BY:	/s/: GREGORY E. DEMSKE
			GREGORY E. DEMSKE Assistant Inspector General for Legal Affairs Office of Counsel to the Inspector General Office of Inspector General United States Department of Health and Human Services

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WRIGHT MEDICAL TECHNOLOGY, INC. — DEFENDANT

DATED: 9/22/10	BY:	/s/: GARY D. HENLEY
			GARY D. HENLEY President and Chief Executive Officer
DATED: 9/23/10	BY:	/s/: KAREN F. GREEN, ESQ.
			KAREN F. GREEN, ESQ. Wilmer Cutler Pickering Hale and Dorr LLP Counsel for Wright Medical Technology, Inc.

DATED: 9/22/10	BY:	/s/: SANFORD V. TEPLITZKY, ESQ.
			SANFORD V. TEPLITZKY, ESQ. Ober, Kaler, Grimes & Shriver, P.C. Counsel for Wright Medical Technology, Inc.

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EX-10.2

Exhibit 10.2

CORPORATE INTEGRITY AGREEMENT
between the
Office of Inspector General
of the
Department of Health and Human Services
and
Wright Medical Technology, Inc.

I. Preamble

     Wright Medical Technology, Inc. (Wright) hereby enters into this Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG) of the United States Department of Health and Human Services (HHS) to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f)) (Federal health care program requirements). Contemporaneously with this CIA, Wright is entering into a Settlement Agreement and Deferred Prosecution Agreement (DPA) with the United States. This CIA shall apply only to U.S. operations of Wright that are subject to U.S. Federal health care program requirements.

     Wright represented to the OIG that, prior to the effective date of this CIA, Wright established a voluntary compliance program, which includes a corporate compliance officer, a corporate compliance committee, a Code of Business Conduct and Ethics for all employees, written policies and procedures, educational and training initiatives, review and disciplinary procedures, a confidential disclosure program, an ineligible persons screening program, and internal audit and review procedures. Wright agrees to continue the operation of its compliance program in accordance with the terms set forth below for the term of this CIA.

II. Term and Scope of the CIA

     A. The period of the compliance obligations assumed by Wright under this CIA shall be 5 years from the effective date of this CIA, unless otherwise specified. The effective date shall be the date on which the final signatory of this CIA executes this CIA (Effective Date). Each one-year period, beginning with the one-year period following the Effective Date, shall be referred to as a “Reporting Period.”

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     B. Suspension of Requirements of Section III.A through Section III.E.

     The requirements set forth in Section III.A through Section III.E will be suspended during the first 12 months of the CIA unless (a) the DPA is no longer in effect; or (b) OIG lifts the suspension. The determination as to whether or not to lift the suspension of Section III.A through Section III.E requirements shall be made at the sole discretion of the OIG. In the event that any requirements of Section III.A through Section III.E are no longer suspended, Wright shall within 90 days implement all requirements of Section III.A through III.E. Within 30 days of Wright’s engagement of an Independent Review Organization (“IRO”), Wright shall provide the information described in Appendix A.

     C. Sections VII, X, and XI shall expire no later than 120 days after OIG=s receipt of: (1) Wright’s final annual report; or (2) any additional materials submitted by Wright pursuant to OIG’s request, whichever is later.

     D. The scope of this CIA shall be governed by the following definitions:

          1. “Arrangements” shall mean every arrangement or transaction that involves, directly or indirectly, the offer, payment, solicitation, or receipt of anything of value; and is between Wright and any actual or potential source of health care business or referrals to Wright or any actual or potential recipient of health care business or referrals from Wright. The term “source of health care business or referrals” shall mean any individual or entity that refers, recommends, arranges for, orders, leases, or purchases any good, facility, item, or service for which payment may be made in whole or in part by a Federal health care program and the term “recipient of health care business or referrals” shall mean any individual or entity (1) to whom Wright refers an individual for the furnishing or arranging for the furnishing of any item or service, or (2) from whom Wright purchases, leases or orders or arranges for or recommends the purchasing, leasing, or ordering of any good, facility, item, or service for which payment may be made in whole or in part by a Federal health care program.

          2. “Focus Arrangements” means every Arrangement that is between Wright and any actual source of health care business or referrals to Wright and involves, directly or indirectly, the offer, payment, or provision of anything of value.

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     Notwithstanding the foregoing provisions of Section II.D.2, any Arrangement that satisfies the requirements of 42 C.F.R. § 411.357(g) (remuneration unrelated to the provision of designated health services); 42 C.F.R. § 411.357(i) (payments by a physician for items and services); 42 C.F.R. § 411.357(k) (non-monetary compensation); or any exception to the prohibitions of 42 U.S.C. § 1395nn, enacted following the Effective Date that does not require a written agreement shall not be considered a Focus Arrangement for purposes of this CIA.

          3. “Covered Persons” includes:

a. all owners (other than shareholders who: (1) have an ownership interest of less than 5%; and (2) acquired the ownership interest through public trading), officers, directors, and employees of Wright;

b. all contractors, subcontractors, agents, and other persons who, on behalf of Wright, perform functions related to the sale or marketing of items or services reimbursable by Federal health care programs; and

c. all individuals that sell or market on behalf of Wright items or services for which reimbursement may be made by the Federal health care programs.

          Notwithstanding the above, this term does not include part-time or per diem employees, contractors, subcontractors, agents, and other persons who are not reasonably expected to work more than 160 hours per year, except that any such individuals shall become “Covered Persons” at the point when they work more than 160 hours during the calendar year.

          4. “Arrangements Covered Persons” includes each Covered Person who is involved with the development, approval, management, or review of Wright’s Arrangements.

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III. Corporate Integrity Obligations

     Wright shall maintain a Compliance Program that includes the following elements:

     A. Compliance Officer and Committee.

          1. Compliance Officer. Wright has appointed, and shall maintain during the term of the CIA, an individual to serve as its Compliance Officer. To the extent necessary, within 120 days after the Effective Date, Wright shall modify the position description, scope of responsibility, and authority of the Compliance Officer such that the following requirements are satisfied. The Compliance Officer shall be responsible for developing and implementing policies, procedures, and practices designed to ensure compliance with the requirements set forth in this CIA and with Federal health care program requirements. The Compliance Officer shall be a member of senior management of Wright, and shall report directly to the Nominating, Compliance and Governance Committee of the Board of Directors and indirectly to the President and CEO. The Compliance Officer shall make periodic (at least quarterly) reports regarding compliance matters directly to the Board of Directors of Wright, and shall be authorized to report on such matters to the Board of Directors at any time. The Compliance Officer shall not be or be subordinate to the General Counsel or Chief Financial Officer. The Compliance Officer shall be responsible for monitoring the day-to-day compliance activities engaged in by Wright as well as for any reporting obligations created under this CIA. Any noncompliance job responsibilities of the Compliance Officer shall be limited and must not interfere with the Compliance Officer’s ability to perform the duties outlined in this CIA.

     Wright shall report to OIG, in writing, any changes in the identity or position description of the Compliance Officer, or any actions or changes that would affect the Compliance Officer’s ability to perform the duties necessary to meet the obligations in this CIA, within five days after such a change.

          2. Compliance Committee. Wright has appointed, and shall maintain during the term of the CIA, a Compliance Committee. To the extent necessary, within 120 days after the Effective Date, Wright shall amend the duties, responsibilities and authorities of the Compliance Committee to meet the requirements set forth below. The Compliance Committee shall, at a minimum, include the Compliance Officer and other members of senior management necessary to meet the requirements of this CIA (e.g.,

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senior executives of relevant departments, such as billing, clinical, human resources, audit, and operations). The Compliance Officer shall chair the Compliance Committee and the Committee shall support the Compliance Officer in fulfilling his/her responsibilities (e.g., shall assist in the analysis of Wright’s risk areas and shall oversee monitoring of internal and external audits and investigations). The Compliance Committee shall meet at least quarterly.

     Wright shall report to OIG, in writing, any changes in the composition of the Compliance Committee, or any actions or changes that would affect the Compliance Committee’s ability to perform the duties necessary to meet the obligations in this CIA, within 15 days after such a change.

     B. Written Standards.

          1. Code of Conduct. Within 90 days after the Effective Date, Wright shall develop, implement, and distribute a written Code of Conduct to all Covered Persons. Wright shall make the promotion of, and adherence to, the Code of Conduct an element in evaluating the performance of all employees. The Code of Conduct shall, at a minimum, set forth the following elements:

a. Wright’s commitment to full compliance with all Federal health care program requirements;

b. Wright’s requirement that all of its Covered Persons shall be expected to comply with all Federal health care program requirements and with Wright’s own Policies and Procedures;

c. the requirement that all of Wright’s Covered Persons shall be expected to report to the Compliance Officer, or other appropriate individual designated by Wright, suspected violations of any Federal health care program requirements or of Wright’s own Policies and Procedures;

d. the right of all individuals to use the Disclosure Program described in Section III.F, and Wright’s commitment to nonretaliation and to maintain, as appropriate, confidentiality and anonymity with respect to such disclosures.

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     Within 90 days after the Effective Date, each Covered Person shall certify, in writing, that he or she has received, read, understood, and shall abide by Wright’s Code of Conduct. New Covered Persons shall receive the Code of Conduct and shall complete the required certification within 30 days after becoming a Covered Person or within 90 days after the Effective Date, whichever is later.

     Wright shall periodically review the Code of Conduct to determine if revisions are appropriate and shall make any necessary revisions based on such review. Any revised Code of Conduct shall be distributed within 30 days after any revisions are finalized. Each Covered Person shall certify, in writing, that he or she has received, read, understood, and shall abide by the revised Code of Conduct within 30 days after the distribution of the revised Code of Conduct.

          2. Policies and Procedures. Within 90 days after the Effective Date, Wright shall implement written Policies and Procedures regarding the operation of Wright’s compliance program, including the compliance program requirements outlined in this CIA, and Wright’s compliance with Federal health care program requirements. The Policies and Procedures also shall address:

a. 42 U.S.C. § 1320a-7b(b) (Anti-Kickback Statute) and the regulations and other guidance documents related to this statute, and business or financial arrangements or contracts that generate unlawful Federal health care program business in violation of the Anti-Kickback Statute; and

b. the requirements set forth in Section III.D (Compliance with the Anti-Kickback Statute).

     Within 90 days after the Effective Date, the relevant portions of the Policies and Procedures shall be distributed and/or made available (electronically or in hard copy form) to all Covered Persons whose job functions relate to those Policies and Procedures. Appropriate and knowledgeable staff shall be available to explain the Policies and Procedures.

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     At least annually (and more frequently, if appropriate), Wright shall assess and update, as necessary, the Policies and Procedures. Within 30 days after the effective date of any revisions, the relevant portions of any such revised Policies and Procedures shall be distributed and/or made available to all Covered Persons whose job functions relate to those Policies and Procedures.

     C. Training and Education.

          1. General Training. Within 90 days after the Effective Date, Wright shall provide at least two hours of General Training to each Covered Person. This training, at a minimum, shall explain Wright’s:

a. CIA requirements; and

b. Wright’s Compliance Program, including the Code of Conduct.

     New Covered Persons shall receive the General Training described above within 30 days after becoming a Covered Person or within 90 days after the Effective Date, whichever is later. After receiving the initial General Training described above, each Covered Person shall receive at least one hour of General Training in each subsequent Reporting Period.

          2. Arrangements Training. Within 90 days after the Effective Date, each Arrangements Covered Person shall receive at least three hours of Arrangements Training, in addition to the General Training required above. The Arrangements Training shall include a discussion of:

a. Arrangements that potentially implicate the Anti-Kickback Statute as well as the regulations and other guidance documents related to this statute;

b. Wright’s policies, procedures, and other requirements relating to Arrangements and Focus Arrangements, including but not limited to the Focus Arrangements Tracking System, the internal review and approval process, and the tracking of remuneration to and from sources of health care business or referrals required by Section III.D of the CIA;

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c. the personal obligation of each individual involved in the development, approval, management, or review of Wright’s Arrangements to know the applicable legal requirements and Wright’s policies and procedures;

d. the legal sanctions under the Anti-Kickback Statute; and

e. examples of violations of the Anti-Kickback Statute.

     New Arrangements Covered Persons shall receive this training within 30 days after the beginning of their employment or becoming Arrangements Covered Persons, or within 90 days after the Effective Date, whichever is later.

     After receiving the initial Arrangements Training described in this Section, each Arrangements Covered Person shall receive at least two hours of Arrangements Training in each subsequent Reporting Period.

          3. Certification. Each individual who is required to attend training shall certify, in writing, or in electronic form, if applicable, that he or she has received the required training. The certification shall specify the type of training received and the date received. The Compliance Officer (or designee) shall retain the certifications, along with all course materials. These shall be made available to OIG, upon request.

          4. Qualifications of Trainer. Persons providing the training shall be knowledgeable about the subject area.

          5. Update of Training. Wright shall review the training annually, and, where appropriate, update the training to reflect changes in Federal health care program requirements, any issues discovered during internal audits or the Arrangements Review, and any other relevant information.

          6. Computer-based Training. Wright may provide the training required under this CIA through appropriate computer-based training approaches. If Wright chooses to provide computer-based training, it shall make available appropriately qualified and knowledgeable staff or trainers to answer questions or provide additional information to the individuals receiving such training.

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     D. Compliance with the Anti-Kickback Statute.

          1. Focus Arrangements Procedures. Within 90 days after the Effective Date, Wright shall create procedures reasonably designed to ensure that each existing and new or renewed Focus Arrangement does not violate the Anti-Kickback Statute or the regulations, directives, and guidance related to this statute (Focus Arrangements Procedures). These procedures shall include the following:

a. creating and maintaining a centralized tracking system for all existing and new or renewed Focus Arrangements (Focus Arrangements Tracking System);

b. tracking remuneration to and from all parties to Focus Arrangements;

c. tracking service and activity logs to ensure that parties to the Focus Arrangement are performing the services required under the applicable Focus Arrangement(s) (if applicable);

d. monitoring the use of leased space, medical supplies, medical devices, equipment, or other patient care items to ensure that such use is consistent with the terms of the applicable Focus Arrangement(s) (if applicable);

e. establishing and implementing a written review and approval process for all Focus Arrangements, the purpose of which is to ensure that all new and existing or renewed Focus Arrangements do not violate the Anti-Kickback Statute, and that includes at least the following: (i) a legal review of all Focus Arrangements by counsel with expertise in the Anti-Kickback Statute, (ii) a process for specifying the business need or business rationale for all Focus Arrangements, and (iii) a process for determining and documenting the fair market value of the remuneration specified in the Focus Arrangement;

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f. requiring the Compliance Officer to review the Focus Arrangements Tracking System, internal review and approval process, and other Focus Arrangements Procedures on at least an annual basis and to provide a report on the results of such review to the Compliance Committee; and

g. implementing effective responses when suspected violations of the Anti-Kickback Statute are discovered, including disclosing Reportable Events pursuant to Section III.I. when appropriate.

          2. New or Renewed Focus Arrangements. Prior to entering into new Focus Arrangements or renewing existing Focus Arrangements, in addition to complying with the Focus Arrangements Procedures set forth above, Wright shall comply with the following requirements (Focus Arrangements Requirements):

a. Ensure that each Focus Arrangement is set forth in writing and signed by Wright and the other parties to the Focus Arrangement;

b. Include in the written agreement a requirement that each party to a Focus Arrangement who meets the definition of a Covered Person shall complete the Arrangements Training set forth in Section III.C.2 of this CIA. Additionally, Wright shall provide each party to the Focus Arrangement with a copy of its Code of Conduct and Anti-Kickback Statute Policies and Procedures;

c. Include in the written agreement a certification by the parties to the Focus Arrangement that the parties shall not violate the Anti-Kickback Statute with respect to the performance of the Arrangement.

          3. Records Retention and Access. Wright shall retain and make available to OIG, upon request, the Focus Arrangements Tracking System and all supporting documentation of the Focus Arrangements subject to this Section and, to the extent available, all non-privileged communications related to the Focus Arrangements and the actual performance of the duties under the Focus Arrangements.

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     E. Review Procedures.

          1. General Description.

a. Engagement of Independent Review Organization. Within 90 days after the Effective Date, Wright shall engage an individual or entity (or entities), such as an accounting, auditing, law, or consulting firm (hereinafter “Independent Review Organization” or “IRO”), to perform the review outlined in Appendix B of this CIA. (Arrangements Review). The IRO engaged by Wright to perform the Arrangements Review shall be knowledgeable about the Anti-Kickback Statute and the regulations and other guidance documents related to this statute.

Each IRO shall assess, along with Wright, whether it can perform the IRO review in a professionally independent and objective fashion, as appropriate to the nature of the engagement, taking into account any other business relationships or other engagements that may exist. The engagement of the IRO for the Arrangements Review shall not be deemed to create an attorney-client or other privileged relationship between Wright and the IRO. The other applicable requirements relating to the IRO(s) are outlined in Appendix A to this CIA, which is incorporated by reference.

b. Frequency of Arrangements Review. The Arrangements Review shall be performed annually and shall cover each of the Reporting Periods. The IRO(s) shall perform all components of each annual Arrangements Review.

c. Retention of Records. The IRO and Wright shall retain and make available to OIG, upon request, all work papers, supporting documentation, correspondence, and draft reports (those exchanged between the IRO and Wright) related to the reviews.

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d. Responsibilities and Liabilities. Nothing in this Section III.E affects Wright’s responsibilities or liabilities under any criminal, civil, or administrative laws or regulations applicable to any Federal health care program including, but not limited to, the Anti-Kickback Statute.

          2. Arrangements Review. The IRO shall perform Arrangements Reviews and prepare reports as outlined in Appendix B to this CIA, which is incorporated by reference.

          3. Validation Review. In the event OIG has reason to believe that: (a) Wright’s Arrangements Review fails to conform to the requirements of this CIA; or (b) the IRO’s findings or Arrangements Review results are inaccurate, OIG may, at its sole discretion, conduct its own review to determine whether the Arrangements Review complied with the requirements of the CIA and/or the findings or Arrangements Review results are inaccurate (Validation Review). Wright shall pay for the reasonable cost of any such review performed by OIG or any of its designated agents. Any Validation Review of Reports submitted as part of Wright’s final Annual Report shall be initiated no later than one year after Wright’s final submission (as described in Section II)is received by OIG.

          Prior to initiating a Validation Review, OIG shall notify Wright of its intent to do so and provide a written explanation of why OIG believes such a review is necessary. To resolve any concerns raised by OIG, Wright may request a meeting with OIG to: (a) discuss the results of any Arrangements Review submissions or findings; (b) present any additional information to clarify the results of the Arrangements Review or to correct the inaccuracy of the Arrangements Review; and/or (c) propose alternatives to the proposed Validation Review. Wright agrees to provide any additional information as may be requested by OIG under this Section III.E.3. in an expedited manner. OIG will attempt in good faith to resolve any Arrangements Review issues with Wright prior to conducting a Validation Review. However, the final determination as to whether or not to proceed with a Validation Review shall be made at the sole discretion of OIG.

          4. Independence and Objectivity Certification. The IRO shall include in its report(s) to Wright a certification or sworn affidavit that it has evaluated its professional independence and objectivity, as appropriate to the nature of the engagement, with regard to the Arrangements Review and that it has concluded that it is, in fact, independent and objective.

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          5. New or Renewed Consulting Agreements. All new Consulting Agreements and renewals executed on or after the Effective Date shall require Consultants to disclose their financial engagement with Wright to their patients, as well as to their affiliated hospitals.

a. “Consultant” is defined as any United States-based orthopaedic surgeon, PhD, health care professional, non-physician practitioner, medical fellow, resident or student, hospital, medical institution, or any employee or agent of any educational or health care organization that Wright retains for any personal or professional services or compensates or remunerates in any way, directly or indirectly, for or in anticipation of personal or professional services relating to hip and knee reconstruction and replacement in the United States. The term “Consultant” shall not include accountants, auditors, attorneys, fair market value specialists, CME providers, reimbursement specialists, any non-physician engineering or marketing consultants, or any other types of non-physician professionals or entities excluded from this definition by the OIG upon recommendation by Wright.

b. “Consulting Agreement” includes all contracts with Consultants for services to be performed on behalf of Wright relating to hip and knee reconstruction and replacement in the United States. This includes, but is not limited to, agreements for compensation, payments, remuneration, honoraria, fellowships, professional meetings, speaking engagements, teaching, publications, clinical studies, fee-for-service consulting, product development and license agreements, research, and professional services agreements. The term “Consulting Agreement” also includes agreements to provide grants, donations, sponsorships and other forms of payment to medical educational organizations, medical societies and training institutions.

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     F. Disclosure Program.

     Wright currently has a disclosure program that Wright represents is designed to facilitate communications relating to compliance with Federal health care program requirements and Wright’s policies (the (Disclosure Program”). Wright shall continue to maintain a Disclosure Program that includes a mechanism (e.g., a toll-free compliance telephone line) to enable individuals to disclose, to the Compliance Officer or some other person who is not in the disclosing individual’s chain of command, any identified issues or questions associated with Wright’s policies, conduct, practices, or procedures with respect to a Federal health care program believed by the individual to be a potential violation of criminal, civil, or administrative law. Wright shall appropriately publicize the existence of the disclosure mechanism (e.g., via periodic e-mails to employees or by posting the information in prominent common areas).

     The Disclosure Program shall emphasize a nonretribution, nonretaliation policy, and shall include a reporting mechanism for anonymous communications for which appropriate confidentiality shall be maintained. Upon receipt of a disclosure, the Compliance Officer (or designee) shall gather all relevant information from the disclosing individual. The Compliance Officer (or designee) shall make a preliminary, good faith inquiry into the allegations set forth in every disclosure to ensure that he or she has obtained all of the information necessary to determine whether a further review should be conducted. For any disclosure that is sufficiently specific so that it reasonably: (1) permits a determination of the appropriateness of the alleged improper practice; and (2) provides an opportunity for taking corrective action, Wright shall conduct an internal review of the allegations set forth in the disclosure and ensure that proper follow-up is conducted.

     The Compliance Officer (or designee) shall maintain a disclosure log, which shall include a record and summary of each disclosure received (whether anonymous or not), the status of the respective internal reviews, and any corrective action taken in response to the internal reviews. The disclosure log shall be made available to OIG upon request.

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     G. Ineligible Persons.

          1. Definitions. For purposes of this CIA:

a. an “Ineligible Person” shall include an individual or entity who:

i. is currently excluded, debarred, suspended, or otherwise ineligible to participate in the Federal health care programs or in Federal procurement or nonprocurement programs; or

ii. has been convicted of a criminal offense that falls within the scope of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, or otherwise declared ineligible.

b. “Exclusion Lists” include:

i. the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://www.oig.hhs.gov); and

ii. the General Services Administration’s List of Parties Excluded from Federal Programs (available through the Internet at http://www.epls.gov).

          2. Screening Requirements. Wright shall ensure that all Covered Persons are not Ineligible Persons, by implementing the following screening requirements:

a. Wright shall screen all Covered Persons against the Exclusion Lists prior to engaging their services and, as part of the hiring or contracting process, shall require such Covered Persons to disclose whether they are Ineligible Persons.

b. Wright shall screen all Covered Persons against the Exclusion Lists within 90 days after the Effective Date and on an annual basis thereafter.

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c. Wright shall implement a policy requiring all Covered Persons to disclose immediately any debarment, exclusion, suspension, or other event that makes that person an Ineligible Person.

          Nothing in this Section affects Wright’s responsibility to refrain from (and liability for) billing Federal health care programs for items or services furnished, ordered, or prescribed by an excluded person. Wright understands that items or services furnished by excluded persons are not payable by Federal health care programs and that Wright may be liable for criminal, civil, and administrative sanctions for employing or contracting with an excluded person regardless of whether Wright meets the requirements of this Section III.G.

          3. Removal Requirement. If Wright has actual notice that a Covered Person has become an Ineligible Person, Wright shall remove such Covered Person from responsibility for, or involvement with, Wright’s business operations related to the Federal health care programs and shall remove such Covered Person from any position for which the Covered Person’s compensation or the items or services furnished, ordered, or prescribed by the Covered Person are paid in whole or part, directly or indirectly, by Federal health care programs or otherwise with Federal funds at least until such time as the Covered Person is reinstated into participation in the Federal health care programs.

          4. Pending Charges and Proposed Exclusions. If Wright has actual notice that a Covered Person is charged with a criminal offense that falls within the scope of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(1)-(3), or is proposed for exclusion during the Covered Person’s employment or contract term of during the term of a physician’s or other practitioner’s medical staff privilege, Wright shall take all appropriate actions to ensure that the responsibilities of that Covered Person have not and shall not adversely affect the quality of care rendered to any beneficiary, patient, or resident, or any claims submitted to any Federal health care program.

     H. Notification of Government Investigation or Legal Proceedings.

     Within 30 days after discovery, Wright shall notify OIG, in writing, of any ongoing investigation or legal proceeding known to Wright conducted or brought by a governmental entity or its agents involving an allegation that Wright has committed a crime or has engaged in fraudulent activities. This notification shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding. Wright shall also provide written notice to OIG

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within 30 days after the resolution of the matter, and shall provide OIG with a description of the findings and/or results of the investigation or proceedings, if any.

     I. Reportable Events.

          1. Definition of Reportable Event. For purposes of this CIA, a “Reportable Event” means anything that involves:

a. a matter that a reasonable person would consider a probable violation of criminal, civil, or administrative laws applicable to any Federal health care program for which penalties or exclusion may be authorized;

b. the employment of or contracting with a Covered Person who is an Ineligible Person as defined by Section III.G.1.a; or

c. the filing of a bankruptcy petition by Wright.

A Reportable Event may be the result of an isolated event or a series of occurrences.

          2. Reporting of Reportable Events. If Wright determines (after a reasonable opportunity to conduct an appropriate review or investigation of the allegations) through any means that there is a Reportable Event, Wright shall notify OIG, in writing, within 30 days after making the determination that the Reportable Event exists.

          3. Reportable Events under Section III.I.1.a. and b. For Reportable Events under Section III.I.1.a. and b., the report to the OIG shall include:

a. a complete description of the Reportable Event, including the relevant facts, persons involved, and legal and Federal health care program authorities implicated;

b. a description of Wright’s actions taken to correct the Reportable Event; and

c. any further steps Wright plans to take to address the Reportable Event and prevent it from recurring.

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          4. Reportable Events under Section III.I.1.c. For Reportable Events under Section III.I.1.c., the report to the OIG shall include documentation of the bankruptcy filing and a description of any Federal health care program authorities implicated.

     J. Cooperation With Government Investigations.

     Upon reasonable notice, Wright shall cooperate with all OIG investigations and understands that full cooperation includes: (1) prompt and truthful disclosure to OIG of all matters relating to any Federal or state health care law investigation, prosecution, or other enforcement action, related to the Covered Conduct, including other matters involving possible violations of Federal or state health care law by individuals or entities in the orthopedic medical device industry; and (2) truthful testimony in any administrative hearing and/or court proceeding. Wright, upon reasonable notice, will make reasonable efforts to facilitate access to, and encourage the cooperation of, its directors, officers, and employees for interviews and testimony, and will furnish to the OIG, upon reasonable request, all documents and records in its possession, custody, or control relating to the Covered Conduct. Section III.J. shall not require the Company’s waiver of attorney-client and work product protections. Nothing in Section III.J. shall be construed as a waiver of any applicable attorney-client or work product privileges.

     As used herein, the term “Covered Conduct” shall have the same meaning as set forth in the Civil Settlement Agreement.

IV. Changes to Business Units or Locations

     A. Change or Closure of Unit or Location.

     In the event that, after the Effective Date, Wright changes locations or closes a business unit or location related to the furnishing of items or services that may be reimbursed by Federal health care programs, Wright shall notify OIG of this fact as soon as possible, but no later than within 30 days after the date of change or closure of the location.

     B. Purchase or Establishment of New Unit or Location.

     In the event that, after the Effective Date, Wright purchases or establishes a new business unit or location related to the furnishing of items or services that may be

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reimbursed by Federal health care programs, Wright shall notify OIG at least 30 days prior to such purchase or the operation of the new business unit or location. This notification shall include the address of the new business unit or location, phone number, fax number, the location’s Medicare and state Medicaid program provider number and/or supplier number(s), (if applicable), and the name and address of each contractor that issued each number (if applicable). Each new business unit or location and all Covered Persons at each new business unit or location shall be subject to the applicable requirements of this CIA.

     C. Sale of Unit or Location.

     In the event that, after the Effective Date, Wright proposes to sell any or all of its business units or locations that are subject to this CIA, Wright shall notify OIG of the proposed sale at least 30 days prior to the sale of such business unit or location. This notification shall include a description of the business unit or location to be sold, a brief description of the terms of the sale, and the name and contact information of the prospective purchaser. This CIA shall be binding on the purchaser of such business unit or location, unless otherwise determined and agreed to in writing by the OIG.

V. Implementation and Annual Reports

     A. Implementation Report.

     Within 90 days after either the termination or lifting of the suspension, Wright shall submit a written report to OIG summarizing the status of its implementation of the requirements of this CIA (Implementation Report). The Implementation Report shall, at a minimum, include:

          1. the name, address, phone number, and position description of the Compliance Officer required by Section III.A, and a summary of other noncompliance job responsibilities the Compliance Officer may have;

          2. the names and positions of the members of the Compliance Committee required by Section III.A;

          3. a copy of Wright’s Code of Conduct required by Section III.B.1;

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          4. a summary of all Policies and Procedures required by Section III.B.2 (a copy of such Policies and Procedures shall be made available to OIG upon request);

          5. the number of individuals required to complete the Code of Conduct certification required by Section III.B.1, the percentage of individuals who have completed such certification, and an explanation of any exceptions (the documentation supporting this information shall be available to OIG, upon request);

          6. the following information regarding each type of training required by Section III.C:

a. a description of such training, including a summary of the topics covered, the length of sessions, and a schedule of training sessions;

b. the number of individuals required to be trained, percentage of individuals actually trained, and an explanation of any exceptions.

A copy of all training materials and the documentation supporting this information shall be available to OIG, upon request.

          7. a description of the Focus Arrangements Tracking System required by Section III.D.1.a;

          8. a description of the internal review and approval process required by Section III.D.1.e;

          9. a description of the tracking and monitoring procedures and other Focus Arrangements Procedures required by Section III.D.1;

          10. a description of the Disclosure Program required by Section III.F;

          11. information regarding the IRO(s) described in Appendix A;

          12. a description of the process by which Wright fulfills the requirements of Section III.G regarding Ineligible Persons;

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          13. a list of all of Wright’s locations (including locations and mailing addresses); the corresponding name under which each location is doing business; the corresponding phone numbers and fax numbers; each location’s Medicare and state Medicaid program provider number(s) and/or supplier number(s) (if applicable); and the name and address of each Medicare and state Medicaid program contractor to which Wright currently submits claims (if applicable);

          14. a description of Wright’s corporate structure, including identification of any parent and sister companies, subsidiaries, and their respective lines of business;

          15. a summary of Reportable Events (as defined in Section III.I.) identified during the Reporting Period and the status of any corrective and preventative action relating to all such Reportable Events;

          16. a summary of the disclosures in the disclosure log required by Section III.F that: (a) relate to Federal health care programs; or (b) involve allegations of conduct that may involve illegal remunerations or inappropriate referrals in violation of the Anti-Kickback Statute;

          17. a summary describing any ongoing investigation or legal proceeding required to have been reported pursuant to Section III.H. The summary shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding; and

          18. the certifications required by Section V.D.

     B. Monitor Reports.

     1. Wright shall submit to OIG any report or written recommendations produced by the Monitor (as defined under the DPA) pursuant to the DPA within 5 days of Wright receiving any report or written recommendations from the Monitor.

     2. Wright shall submit to OIG any report Wright provides to the Monitor pursuant to the DPA at the same time Wright provides such documentation to the Monitor.

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     3. Any written documentation Wright provides to the Monitor pursuant to the DPA shall be made available to the OIG upon request.

     C. Annual Reports.

     Wright shall submit to OIG annually a report with respect to the status of, and findings regarding, Wright’s compliance activities for each Reporting Period (Annual Report).

Each Annual Report shall include, at a minimum:

          1. any change in the identity, position description, or other noncompliance job responsibilities of the Compliance Officer and any change in the membership of the Compliance Committee described in Section III.A;

          2. a summary of any significant changes or amendments to the Policies and Procedures required by Section III.B.2 and the reasons for such changes (e.g., change in contractor policy);

          3. the number of individuals required to complete the Code of Conduct certification required by Section III.B.1, the percentage of individuals who have completed such certification, and an explanation of any exceptions (the documentation supporting this information shall be available to OIG, upon request);

          4. the following information regarding each type of training required by Section III.C:

a. a description of the initial and annual training, including a summary of the topics covered, the length of sessions, and a schedule of training sessions;

b. the number of individuals required to complete the initial and annual training, the percentage of individuals who actually completed the initial and annual training, and an explanation of any exceptions.

A copy of all training materials and the documentation supporting this information shall be available to OIG, upon request.

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          5. a description of any changes to the Focus Arrangements Tracking System required by Section III.D.1.a;

          6. a description of any changes to the internal review and approval process required by Section III.D.1.e;

          7. a description of any changes to the tracking and monitoring procedures and other Focus Arrangements Procedures required by Section III.D.1;

          8. a complete copy of all reports prepared pursuant to Section III.E, along with a copy of the IRO’s engagement letter;

          9. Wright’s response to the reports prepared pursuant to Section III.E., along with corrective action plan(s) related to any issues raised by the reports;

          10. a summary and description of any and all current and prior engagements and agreements between Wright and the IRO, if different from what was submitted as part of the Implementation Report;

          11. a certification from the IRO regarding its professional independence and objectivity with respect to Wright;

          12. a summary of Reportable Events (as defined in Section III.I.) identified during the Reporting Period and the status of any corrective and preventative action relating to all such Reportable Events;

          13. a summary of the disclosures in the disclosure log required by Section III.F that: (a) relate to Federal health care programs; or (b) involve allegations of conduct that may involve illegal remunerations or inappropriate referrals in violation of the Anti-Kickback Statute;

          14. any changes to the process by which Wright fulfills the requirements of Section III.G regarding Ineligible Persons;

          15. a summary describing any ongoing investigation or legal proceeding required to have been reported pursuant to Section III.H. The summary shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding;

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          16. a description of all changes to the most recently provided list of Wright’s locations (including addresses) as required by Section V.A.13; the corresponding name under which each location is doing business; the corresponding phone numbers and fax numbers; each location’s Medicare and state Medicaid program provider number(s) and/or supplier number(s) (if applicable); and the name and address of each Medicare and state Medicaid program contractor to which Wright currently submits claims (if applicable); and

          17. the certifications required by Section V.D.

     The first Annual Report shall be received by OIG no later than 60 days after the end of the second Reporting Period. Subsequent Annual Reports shall be received by OIG no later than the anniversary date of the due date of the first Annual Report.

     D. Certifications.

     The Implementation Report and Annual Reports shall include a certification by the Compliance Officer that:

          1. to the best of his or her knowledge, except as otherwise described in the applicable report, Wright is in compliance with all of the requirements of this CIA;

          2. to the best of his or her knowledge, Wright has implemented procedures reasonably designed to ensure that all Focus Arrangements do not violate the Anti-Kickback Statute, including the Focus Arrangements Procedures required in Section III.D of the CIA;

          3. to the best of his or her knowledge, Wright has fulfilled the requirements for New and Renewed Focus Arrangements under Section III.D.2 of the CIA;

          4. he or she has reviewed the Report and has made reasonable inquiry regarding its content and believes that the information in the Report is accurate and truthful; and

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     E. Designation of Information. Wright shall clearly identify any portions of its submissions that it believes are trade secrets, or information that is commercial or financial and privileged or confidential, and therefore potentially exempt from disclosure under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. Wright shall refrain from identifying any information as exempt from disclosure if that information does not meet the criteria for exemption from disclosure under FOIA.

VI. Notifications and Submission of Reports

     Unless otherwise stated in writing after the Effective Date, all notifications and reports required under this CIA shall be submitted to the following entities:

OIG:	Administrative and Civil Remedies Branch Office of Counsel to the Inspector General Office of Inspector General U.S. Department of Health and Human Services Cohen Building, Room 5527 330 Independence Avenue, S.W. Washington, DC 20201 Telephone: 202.619.2078 Facsimile: 202.205.0604
Wright:	Lisa L. Michels, J.D., M.S.O.L.Q. Vice President and Chief Compliance Officer 5677 Airline Road Arlington, TN 38002 Telephone: 901.867.4361 Facsimile: 901.867.4332

Unless otherwise specified, all notifications and reports required by this CIA may be made by certified mail, overnight mail, hand delivery, or other means, provided that there is proof that such notification was received. For purposes of this requirement, internal facsimile confirmation sheets do not constitute proof of receipt. Upon request by OIG, Wright may be required to provide OIG with an electronic copy of each notification or

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report required by this CIA in searchable portable document format (pdf), either instead of or in addition to, a paper copy.

VII. Oig Inspection, Audit, and Review Rights

     In addition to any other rights OIG may have by statute, regulation, or contract, OIG or its duly authorized representative(s) may examine or request copies of Wright’s books, records, and other documents and supporting materials and/or conduct on-site reviews of any of Wright’s locations for the purpose of verifying and evaluating: (a) Wright’s compliance with the terms of this CIA; and (b) Wright’s compliance with the requirements of the Federal health care programs in which it participates. The documentation described above shall be made available by Wright to OIG or its duly authorized representative(s) at all reasonable times for inspection, audit, or reproduction. Furthermore, for purposes of this provision, OIG or its duly authorized representative(s) may interview any of Wright’s employees, contractors, or agents who consent to be interviewed at the individual’s place of business during normal business hours or at such other place and time as may be mutually agreed upon between the individual and OIG. Wright shall assist OIG or its duly authorized representative(s) in contacting and arranging interviews with such individuals upon OIG’s request. Wright’s employees may elect to be interviewed with or without a representative of Wright present.

VIII. Document and Record Retention

     Wright shall maintain for inspection all documents and records relating to reimbursement from the Federal health care programs, or to compliance with this CIA, for six (6) years (or longer if otherwise required by law) from the Effective Date.

IX. Disclosures

     Consistent with HHS’s FOIA procedures, set forth in 45 C.F.R. Part 5, OIG shall make a reasonable effort to notify Wright prior to any release by OIG of information submitted by Wright pursuant to its obligations under this CIA and identified upon submission by Wright as trade secrets, or information that is commercial or financial and privileged or confidential, under the FOIA rules. With respect to such releases, Wright shall have the rights set forth at 45 C.F.R. § 5.65(d).

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X. Breach and Default Provisions

     Wright is expected to fully and timely comply with all of its CIA obligations.

     A. Stipulated Penalties for Failure to Comply with Certain Obligations. As a contractual remedy, Wright and OIG hereby agree that failure to comply with certain obligations as set forth in this CIA may lead to the imposition of the following monetary penalties (hereinafter referred to as “Stipulated Penalties”) in accordance with the following provisions.

          1. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each calendar day Wright fails to establish and implement any of the following obligations as described in Section III:

a. a Compliance Officer;

b. a Compliance Committee;

c. a written Code of Conduct;

d. written Policies and Procedures;

e. the training of Covered Persons and Arrangements Covered Persons;

f. the Focus Arrangements Procedures and/or Focus Arrangements Requirements described in Sections III.D.1 and III.D.2;

g. a Disclosure Program;

h. Ineligible Persons screening and removal requirements;

i. notification of Government investigations or legal proceedings; and

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j. reporting of Reportable Events.

          2. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Wright fails to engage an IRO, as required in Section III.E and Appendix A.

          3. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Wright fails to submit the Implementation Report, documentation required under Section V.B., or any Annual Reports to OIG in accordance with the requirements of Section V by the deadlines for submission.

          4. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Wright fails to submit the annual Arrangements Review Report in accordance with the requirements of Section III.E and Appendix B.

          5. A Stipulated Penalty of $1,500 for each day Wright fails to grant access as required in Section VII. (This Stipulated Penalty shall begin to accrue on the date Wright fails to grant access.)

          6. A Stipulated Penalty of $5,000 for each false certification submitted by or on behalf of Wright as part of its Implementation Report, Annual Report, additional documentation to a report (as requested by the OIG), or otherwise required by this CIA.

          7. A Stipulated Penalty of $10,000 (which shall begin to accrue on the day after the date the obligation became due) for each day Wright fails to cooperate and otherwise satisfy any of the obligations and requirements as described in Section III.J.

          8. A Stipulated Penalty of $1,000 for each day Wright fails to comply fully and adequately with any obligation of this CIA. OIG shall provide notice to Wright stating the specific grounds for its determination that Wright has failed to comply fully and adequately with the CIA obligation(s) at issue and steps Wright shall take to comply with the CIA. (This Stipulated Penalty shall begin to accrue 10 days after Wright receives this notice from OIG of the failure to comply.) A Stipulated Penalty as described in this Subsection shall not be demanded for any violation for which OIG has sought a Stipulated Penalty under Subsections 1-7 of this Section.

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     B. Timely Written Requests for Extensions.

     Wright may, in advance of the due date, submit a timely written request for an extension of time to perform any act or file any notification or report required by this CIA. Notwithstanding any other provision in this Section, if OIG grants the timely written request with respect to an act, notification, or report, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until one day after Wright fails to meet the revised deadline set by OIG. Notwithstanding any other provision in this Section, if OIG denies such a timely written request, Stipulated Penalties for failure to perform the act or file the notification or report shall not begin to accrue until three business days after Wright receives OIG’s written denial of such request or the original due date, whichever is later. A “timely written request” is defined as a request in writing received by OIG at least five business days prior to the date by which any act is due to be performed or any notification or report is due to be filed.

     C. Payment of Stipulated Penalties.

          1. Demand Letter. Upon a finding that Wright has failed to comply with any of the obligations described in Section X.A and after determining that Stipulated Penalties are appropriate, OIG shall notify Wright of: (a) Wright’s failure to comply; and (b) OIG’s exercise of its contractual right to demand payment of the Stipulated Penalties (this notification is referred to as the “Demand Letter”). Such Demand Letter shall specifically state the conduct that the OIG contends constitutes the basis for imposing the Stipulated Penalty.

          2. Response to Demand Letter. Within 10 days after the receipt of the Demand Letter, Wright shall either: (a) cure the breach to OIG’s satisfaction and pay the applicable Stipulated Penalties or (b) request a hearing before an HHS administrative law judge (ALJ) to dispute OIG’s determination of noncompliance, pursuant to the agreed upon provisions set forth below in Section X.E. In the event Wright elects to request an ALJ hearing, the Stipulated Penalties shall continue to accrue until Wright cures, to OIG’s satisfaction, the alleged breach in dispute. Failure to respond to the Demand Letter in one of these two manners within the allowed time period shall be considered a material breach of this CIA and shall be grounds for exclusion under Section X.D.

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          3. Form of Payment. Payment of the Stipulated Penalties shall be made by electronic funds transfer to an account specified by OIG in the Demand Letter.

          4. Independence from Material Breach Determination. Except as set forth in Section X.D.1.d, these provisions for payment of Stipulated Penalties shall not affect or otherwise set a standard for OIG’s decision that Wright has materially breached this CIA, which decision shall be made at OIG’s discretion and shall be governed by the provisions in Section X.D, below.

     D. Exclusion for Material Breach of this CIA.

          1. Definition of Material Breach. A material breach of this CIA means:

          a. a failure by Wright to report a Reportable Event, take corrective action, and make the appropriate refunds, as required in Section III.I;

          b. a repeated or flagrant violation of the obligations under this CIA, including, but not limited to, the obligations addressed in Section X.A;

          c. a failure to respond to a Demand Letter concerning the payment of Stipulated Penalties in accordance with Section X.C; or

          d. a failure to engage and use an IRO in accordance with Section III.E. and Appendix A.

          e. a repeated or flagrant failure by Wright to cooperate in accordance with Section III.J.

          2. Notice of Material Breach and Intent to Exclude. The parties agree that a material breach of this CIA by Wright constitutes an independent basis for Wright’s exclusion from participation in the Federal health care programs. Upon a determination by OIG that Wright has materially breached this CIA and that exclusion is the appropriate remedy, OIG shall notify Wright of: (a) Wright’s material breach; and (b) OIG’s intent to exercise its contractual right to impose exclusion (this notification is hereinafter referred

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to as the “Notice of Material Breach and Intent to Exclude”).

          3. Opportunity to Cure. Wright shall have 30 days from the date of receipt of the Notice of Material Breach and Intent to Exclude to demonstrate to OIG’s satisfaction that:

a. Wright is in compliance with the obligations of the CIA cited by OIG as being the basis for the material breach;

b. the alleged material breach has been cured; or

c. the alleged material breach cannot be cured within the 30-day period, but that: (i) Wright has begun to take action to cure the material breach; (ii) Wright is pursuing such action with due diligence; and (iii) Wright has provided to OIG a reasonable timetable for curing the material breach.

          4. Exclusion Letter. If, at the conclusion of the 30-day period, Wright fails to satisfy the requirements of Section X.D.3, OIG may exclude Wright from participation in the Federal health care programs. OIG shall notify Wright in writing of its determination to exclude Wright (this letter shall be referred to hereinafter as the “Exclusion Letter”). Subject to the Dispute Resolution provisions in Section X.E, below, the exclusion shall go into effect 30 days after the date of Wright’s receipt of the Exclusion Letter. The exclusion shall have national effect and shall also apply to all other Federal procurement and nonprocurement programs. Reinstatement to program participation is not automatic. After the end of the period of exclusion, Wright may apply for reinstatement by submitting a written request for reinstatement in accordance with the provisions at 42 C.F.R. §§ 1001.3001-.3004.

     E. Dispute Resolution

          1. Review Rights. Upon OIG’s delivery to Wright of its Demand Letter or of its Exclusion Letter, and as an agreed-upon contractual remedy for the resolution of disputes arising under this CIA, Wright shall be afforded certain review rights comparable to the ones that are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R. Part 1005 as if they applied to the Stipulated Penalties or exclusion sought pursuant to this CIA. Specifically, OIG’s determination to demand payment of Stipulated Penalties or to

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seek exclusion shall be subject to review by an HHS ALJ and, in the event of an appeal, the HHS Departmental Appeals Board (DAB), in a manner consistent with the provisions in 42 C.F.R. § 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. § 1005.2(c), the request for a hearing involving Stipulated Penalties shall be made within 10 days after receipt of the Demand Letter and the request for a hearing involving exclusion shall be made within 25 days after receipt of the Exclusion Letter.

          2. Stipulated Penalties Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of Federal Regulations, the only issues in a proceeding for Stipulated Penalties under this CIA shall be: (a) whether Wright was in full and timely compliance with the obligations of this CIA for which OIG demands payment; and (b) the period of noncompliance. Wright shall have the burden of proving its full and timely compliance and the steps taken to cure the noncompliance, if any. OIG shall not have the right to appeal to the DAB an adverse ALJ decision related to Stipulated Penalties. If the ALJ agrees with OIG with regard to a finding of a breach of this CIA and orders Wright to pay Stipulated Penalties, such Stipulated Penalties shall become due and payable 20 days after the ALJ issues such a decision unless Wright requests review of the ALJ decision by the DAB. If the ALJ decision is properly appealed to the DAB and the DAB upholds the determination of OIG, the Stipulated Penalties shall become due and payable 20 days after the DAB issues its decision.

          3. Exclusion Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of Federal Regulations, the only issues in a proceeding for exclusion based on a material breach of this CIA shall be:

a. whether Wright was in material breach of this CIA;

b. whether such breach was continuing on the date of the Exclusion Letter; and

c. whether the alleged material breach could not have been cured within the 30-day period, but that: (i) Wright had begun to take action to cure the material breach within that period; (ii) Wright has pursued and is pursuing such action with due diligence; and (iii) Wright provided to OIG within that period a reasonable timetable for curing the material breach and Wright has followed the timetable.

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          For purposes of the exclusion herein, exclusion shall take effect only after an ALJ decision favorable to OIG, or, if the ALJ rules for Wright, only after a DAB decision in favor of OIG. Wright’s election of its contractual right to appeal to the DAB shall not abrogate OIG’s authority to exclude Wright upon the issuance of an ALJ’s decision in favor of OIG. If the ALJ sustains the determination of OIG and determines that exclusion is authorized, such exclusion shall take effect 20 days after the ALJ issues such a decision, notwithstanding that Wright may request review of the ALJ decision by the DAB. If the DAB finds in favor of OIG after an ALJ decision adverse to OIG, the exclusion shall take effect 20 days after the DAB decision. Wright shall waive its right to any notice of such an exclusion if a decision upholding the exclusion is rendered by the ALJ or DAB. If the DAB finds in favor of Wright, Wright shall be reinstated effective on the date of the original exclusion.

          4. Finality of Decision. The review by an ALJ or DAB provided for above shall not be considered to be an appeal right arising under any statutes or regulations. Consequently, the parties to this CIA agree that the DAB’s decision (or the ALJ’s decision if not appealed) shall be considered final for all purposes under this CIA.

XI. Effective and Binding Agreement

     Wright and OIG agree as follows:

     A. This CIA shall be binding on the successors, assigns, and transferees of Wright;

     B. This CIA shall become final and binding on the later of (1) the date the final signature is obtained on the CIA; or (2) the date the Civil Settlement Agreement becomes effective.

     C. This CIA constitutes the complete agreement between the parties and may not be amended except by written consent of the parties to this CIA;

     D. OIG may agree to a suspension of Wright’s obligations under this CIA based on a certification by Wright that it is no longer providing health care items or services that will be billed to any Federal health care program and that it does not have any ownership

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or control interest, as defined in 42 U.S.C. §1320a-3, in any entity that bills any Federal health care program. If Wright is relieved of its CIA obligations, Wright will be required to notify OIG in writing at least 30 days in advance if Wright plans to resume providing health care items or services that are billed to any Federal health care program or to obtain an ownership or control interest in any entity that bills any Federal health care program. At such time, OIG shall evaluate whether the CIA will be reactivated or modified.

     E. The undersigned Wright signatories represent and warrant that they are authorized to execute this CIA. The undersigned OIG signatory represents that he is signing this CIA in his official capacity and that he is authorized to execute this CIA.

     F. This CIA may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same CIA. Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this CIA.

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On Behalf of Wright Medical Technology, Inc.

/s/: GARY D. HENLEY	9/22/10
GARY D. HENLEY President and Chief Executive Officer Wright Medical Technology, Inc.	DATE
/s/: SANFORD V. TEPLITZKY, ESQ.	9/22/10
SANFORD V. TEPLITZKY, ESQ. Ober, Kaler, Grimes & Shriver, P.C. Counsel for Wright Medical Technology, Inc.	DATE
/s/: KAREN F. GREEN, ESQ.	9/23/10
KAREN F. GREEN, ESQ. Wilmer Cutler Pickering Hale and Dorr LLP Counsel for Wright Medical Technology, Inc.	DATE

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On Behalf of the Office of Inspector General
of the Department of Health and Human Services

/s/: GREGORY E. DEMSKE	9/29/10
GREGORY E. DEMSKE Assistant Inspector General for Legal Affairs Office of Inspector General U. S. Department of Health and Human Services	DATE

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APPENDIX A

INDEPENDENT REVIEW ORGANIZATION

This Appendix contains the requirements relating to the Independent Review Organization (IRO) required by Section III.E of the CIA.

A. IRO Engagement.

     Wright shall engage an IRO that possesses the qualifications set forth in Paragraph C, of this Appendix, to perform the responsibilities in Paragraph D, of this Appendix. The IRO shall conduct the review in a professionally independent and objective fashion, as set forth in Paragraph E, of this Appendix. Within 30 days after OIG receives the information identified in Paragraph B, of this Appendix, OIG will notify Wright if the IRO is unacceptable. Absent notification from OIG that the IRO is unacceptable, Wright may continue to engage the IRO.

     If Wright engages a new IRO during the term of the CIA, this IRO shall also meet the requirements of this Appendix. If a new IRO is engaged, Wright shall submit the information identified in Paragraph B, of this Appendix, to OIG within 30 days of engagement of the IRO. Within 30 days after OIG receives this information, OIG will notify Wright if the IRO is unacceptable. Absent notification from OIG that the IRO is unacceptable, Wright may continue to engage the IRO.

B. Information Regarding the IRO.

1.	identity, address, and phone number;
2.	a copy of the engagement letter;
3.	a summary and description of any and all current and prior engagements and agreements between Wright and the IRO;
4.	the proposed start and completion dates of the Arrangements Review;
5.	a certification from the IRO regarding its professional independence and objectivity with respect to Wright; and
6.	the professional qualifications of individuals assigned by the IRO to the engagement.

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C. IRO Qualifications.

The IRO shall:

     1. assign individuals to conduct the Arrangements Review engagement who are knowledgeable in the requirements of the Anti-Kickback Statute and the regulations and other guidance documents related to this statute; and

     2. have sufficient staff and resources to conduct the reviews required by the CIA on a timely basis.

D. IRO Responsibilities.

The IRO shall:

     1. perform each Arrangements Review in accordance with the specific requirements of the CIA;

     2. respond to all OIG inquiries in a prompt, objective, and factual manner; and

     3. prepare timely, clear, well-written reports that include all the information required by Appendix B to the CIA.

E. IRO Independence and Objectivity.

     The IRO must perform the Arrangements Review in a professionally independent and objective fashion, as appropriate to the nature of the engagement, taking into account any other business relationships or engagements that may exist between the IRO and Wright.

F. IRO Removal/Termination.

     1. Provider. If Wright terminates its IRO during the course of the engagement, Wright must submit a notice explaining its reasons to OIG no later than 30 days after termination. Wright must engage a new IRO in accordance with Paragraph A, of this Appendix.

     2. OIG Removal of IRO. In the event OIG has reason to believe that the IRO does not possess the qualifications described in Paragraph B, of this Appendix, is not independent and objective as set forth in Paragraph E, of this Appendix, or has failed to carry out its responsibilities as described in Paragraph D, of this Appendix, OIG may, at its sole discretion, require Wright to engage a new IRO in accordance with Paragraph A of this Appendix.

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     Prior to requiring Wright to engage a new IRO, OIG shall notify Wright of its intent to do so and provide a written explanation of why OIG believes such a step is necessary. To resolve any concerns raised by OIG, Wright may request a meeting with OIG to discuss any aspect of the IRO’s qualifications, independence or performance of its responsibilities and to present additional information regarding these matters. Wright shall provide any additional information as may be requested by OIG under this Paragraph in an expedited manner. OIG will attempt in good faith to resolve any differences regarding the IRO with Wright prior to requiring Wright to terminate the IRO. However, the final determination as to whether or not to require Wright to engage a new IRO shall be made at the sole discretion of OIG.

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Appendix B

Arrangements Review

     The Arrangements Review shall consist of two components: a systems review and a transactions review. The IRO shall perform all components of each Arrangements Review. If there are no material changes to Wright’s systems, processes, policies, and procedures relating to Arrangements, the Arrangements Systems Review shall be performed for the second and fourth Reporting Periods. If Wright materially changes the Arrangements systems, processes, policies and procedures, the IRO shall perform an Arrangements Systems Review for the Reporting Period in which such changes were made in addition to conducting the systems review for the second and fourth Reporting Periods. The Arrangements Transactions Review shall be performed annually and shall cover each of the five Reporting Periods.

     A. Arrangements Systems Review. The Arrangements Systems Review shall be a review of Wright’s systems, processes, policies, and procedures relating to the initiation, review, approval, and tracking of Arrangements. Specifically, the IRO shall review the following:

          1. Wright’s systems, policies, processes, and procedures with respect to creating and maintaining a centralized tracking system for all existing and new and renewed Focus Arrangements (Focus Arrangements Tracking System), including a detailed description of the information captured in the Focus Arrangements Tracking System;

          2. Wright’s systems, policies, processes, and procedures for tracking remuneration to and from all parties to Focus Arrangements;

          3. Wright’s systems, policies, processes, and procedures for tracking service and activity logs to ensure that parties to the Focus Arrangement are performing the services required under the applicable Focus Arrangement(s) (if applicable);

          4. Wright’s systems, policies, processes, and procedures for monitoring the use of leased space, medical supplies, medical devices, equipment, or other patient care items to ensure that such use is consistent with the terms of the applicable Focus Arrangement(s) (if applicable);

          5. Wright’s systems, policies, processes, and procedures for initiating Arrangements, including those policies that identify the individuals with

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authority to initiate an Arrangement and that specify the business need or business rationale required to initiate an Arrangement;

          6. Wright’s systems, policies, processes, and procedures for the internal review and approval of all Arrangements, including those policies that identify the individuals required to approve each type or category of Arrangement entered into by Wright, the internal controls designed to ensure that all required approvals are obtained, and the processes for ensuring that all Focus Arrangements are subject to a legal review by counsel with expertise in the Anti-Kickback Statute;

          7. the Compliance Officer’s annual review of and reporting to the Compliance Committee on the Focus Arrangements Tracking System, Wright’s internal review and approval process, and other Arrangements procedures;

          8. Wright’s systems, policies, processes, and procedures for implementing effective responses when suspected violations of the Anti-Kickback Statute are discovered, including disclosing Reportable Events and quantifying and repaying Overpayments when appropriate; and

          9. Wright’s systems, policies, processes, and procedures for ensuring that all new and renewed Focus Arrangements comply with the Focus Arrangements Requirements set forth in Section III.D.2 of the CIA.

     B. Arrangements Systems Review Report. The IRO shall prepare a report based upon each Arrangements Systems Review performed. The report shall include the following items:

          1. a description of the documentation (including policies) reviewed and personnel interviewed;

          2. a detailed description of Wright’s systems, policies, processes, and procedures relating to the items identified in Section A.1-9 above;

          3. findings and supporting rationale regarding weaknesses in Wright’s systems, processes, policies, and procedures relating to Arrangements described in Section A.1-9 above; and

          4. recommendations to improve Wright’s systems, policies, processes, or procedures relating to Arrangements described in Section A.1-9 above.

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     C. Arrangements Transactions Review. The Arrangements Transactions Review shall consist of a review by the IRO of 50 randomly selected Focus Arrangements that were entered into or renewed by Wright during the Reporting Period. The IRO shall assess whether Wright has complied with the Focus Arrangements Procedures and the Focus Arrangements Requirements described in Sections III.D.1 and III.D.2 of the CIA, with respect to the selected Focus Arrangements.

     The IRO’s assessment with respect to each Focus Arrangement that is subject to review shall include:

          1. verifying that the Focus Arrangement is maintained in Wright’s centralized tracking system in a manner that permits the IRO to identify the parties to the Focus Arrangement and the relevant terms of the Focus Arrangement (i.e., the items/services/equipment/space to be provided, the amount of compensation, the effective date, the expiration date; etc.)

          2. verifying that the Focus Arrangement was subject to the internal review and approval process (including both a legal and business review) and obtained the necessary approvals and that such review and approval is appropriately documented;

          3. verifying that the remuneration related to the Focus Arrangement is properly tracked;

          4. verifying that the service and activity logs are properly completed and reviewed (if applicable);

          5. verifying that leased space, medical supplies, medical devices, and equipment, and other patient care items are properly monitored (if applicable); and

          6. verifying that the Focus Arrangement satisfies the Focus Arrangements Requirements of Section III.D.2 of the CIA.

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     D. Arrangements Transaction Review Report. The Arrangements Transaction Review Report shall include the following information:

          1. Review Methodology.

a.	Review Protocol: A detailed narrative description of the procedures performed and a description of the sampling unit and universe utilized in performing the procedures for the sample reviewed.
b.	Sources of Data: A full description of the documentation and other information, if applicable, relied upon by the IRO in performing the Arrangements Transaction Review.

          2. Review Findings. The IRO’s findings with respect to whether Wright has complied with the Focus Arrangements Procedures and Focus Arrangements Requirements with respect to each of the randomly selected Focus Arrangements reviewed by the IRO. In addition, the Arrangements Transactions Review Report shall include observations, findings and recommendations on possible improvements to Wright’s policies, procedures, and systems in place to ensure that all Focus Arrangements comply with the Focus Arrangements Procedures and Focus Arrangements Requirements.

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EX-10.3

Exhibit 10.3

Deferred Prosecution Agreement

     1. Wright Medical Technology, Inc. (the “Company”), by its undersigned attorneys, pursuant to authority granted by its Board of Directors, and the United States Attorney’s Office for the District of New Jersey (the “Office”), enter into this Deferred Prosecution Agreement (the “DPA”). Except as specifically provided below, the DPA shall be in effect for a period of twelve (12) months from the date on which it is fully executed (the “Effective Date”).

     2. The Office has informed the Company that it will file, on or shortly after the Effective Date of this DPA, a criminal complaint in the United States District Court for the District of New Jersey charging the Company with conspiracy to commit violations of the Federal Anti-Kickback Statute, contrary to Title 42, United States Code, Section 1320a - 7b(b), in violation of Title 18, United States Code, Section 371, during the years 2002 through 2007 (the “Criminal Complaint”). This Office acknowledges that neither this DPA nor the Criminal Complaint alleges the Company’s conduct adversely affected patient health or patient care.

     3. The Company and the Office agree that, upon filing of the Criminal Complaint in accordance with the preceding paragraph, this DPA shall be publicly filed in the United States District Court for the District of New Jersey, and the Company agrees to post the DPA prominently on the Company website for the duration of the DPA.

     4. In light of the Company’s remedial actions to date and its willingness to (a) undertake additional remediation as necessary; (b) acknowledge responsibility for its behavior; (c) continue its cooperation with the Office and other government agencies; and (d) demonstrate its good faith and commitment to full compliance with federal health care laws, the Office shall recommend to the Court that prosecution of the Company on the Criminal Complaint be deferred for a period of twelve (12) months from the filing date of such Criminal Complaint. If the Court declines to defer prosecution for any reason, this DPA shall be null and void, and the parties will revert to their pre-DPA positions.

     5. In 2004, the Company incorporated the provisions of the newly promulgated AdvaMed Code of Ethics on Interactions with Health Care Professionals (“AdvaMed Code”) into its Code of Business Conduct, which the Company first issued in 1994. More recently, the Company has undertaken a Compliance Initiative designed to strengthen its compliance processes, procedures and controls, with a particular focus on those concerning consulting arrangements with customers or potential customers of the Company’s hip and knee reconstruction and replacement products. In that respect, the Company has separated the roles of General Counsel and Chief Compliance Officer, appointed a new Chief Compliance Officer, expanded the obligations of its Nominating, Compliance and Governance Committee, undertaken a review of its existing consulting agreements with respect to hip and knee reconstruction and replacement products, and developed a comprehensive needs assessment process for such consulting services. The Company also has developed additional policies and standard operating procedures regarding, among other things, educational grants and charitable donations, product development consultants, research consultants, training and education consultants, and employee and distributor compliance training programs.

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General Commitment to Compliance and Remedial Actions

     6. The Company commits itself to exemplary corporate citizenship, the best practices of effective corporate governance, the highest principles of honesty and professionalism, the integrity of the operation of federal health care programs including Medicare and Medicaid, the sanctity of the doctor-patient relationship, and a culture of openness, accountability, and compliance throughout the Company. The Company also commits not to attempt to influence medical practitioners and institutions to use the Company’s products through the use of unlawful inducements. To advance and underscore this commitment, the Company agrees to take, or has acknowledged that it has taken, the remedial and compliance measures set forth herein.

     7. In matters relating to federal health care laws, the Company will cooperate fully with all federal law enforcement and regulatory agencies, including but not limited to: the Criminal and Civil Divisions of the Office; the United States Department of Justice, Criminal and Civil Divisions; the United States Department of Health and Human Services, Office of Inspector General (“HHS-OIG”); the Federal Bureau of Investigation (“FBI”); and the United States Postal Inspection Service (“USPIS”); provided, however, that such cooperation shall not require the Company’s waiver of attorney-client and work product protections or any other applicable legal privileges. Nothing in this DPA shall be construed as a waiver of any applicable attorney-client or work product privileges (hereafter “privilege”).

     8. The Company shall communicate to its employees and distributors that Company personnel and agents are required to report to the Company any suspected violations of any federal laws, regulations, federal health care program requirements, or internal policies and procedures.

     9. The Company shall implement or continue its operation of an effective corporate compliance program and function to ensure that internal controls are in place to prevent recurrence of the activities that resulted in this DPA. The Company shall also develop and implement policies, procedures, and practices designed to ensure compliance with federal health care program requirements, including the Anti-Kickback Statute, with respect to all its dealings with Consultants, as defined herein, and others who cause the purchase of Company hip and knee reconstruction and replacement products in the United States.

     10. The Company shall adhere to the Revised and Restated AdvaMed Code of Ethics on Interactions with Health Care Professionals. The Revised and Restated AdvaMed Code, which became effective on July 1, 2009, can be found at www.advamed.org. The principles set forth in the AdvaMed Code are expressly incorporated as compliance requirements under this DPA.

     11. The Company agrees that its President and Chief Executive Officer, Vice President, General Counsel and Secretary, Vice President, Chief Compliance Officer (“Compliance Officer”), and appropriate Company executives will meet quarterly with representatives of the Office and with the Monitor, in conjunction with the Monitor’s quarterly reports described in paragraph 19(c) herein.

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Definitions

     12. “Consultant” is defined as any United States-based orthopaedic surgeon, PhD, health care professional, non-physician practitioner, medical fellow, resident or student, hospital, medical institution, or any employee or agent of any educational or health care organization the Company retains for any personal or professional services or compensates or remunerates in any way, directly or indirectly, for or in anticipation of personal or professional services relating to hip and knee reconstruction and replacement in the United States. The term “Consultant” shall not include accountants, auditors, attorneys, fair market value specialists, CME providers, reimbursement specialists, any non-physician engineering or marketing consultants, or any other types of non-physician professionals or entities excluded from this definition by the Monitor upon recommendation by the Company.

     13. “Consulting Agreement” includes all contracts with Consultants for services to be performed on behalf of the Company relating to hip and knee reconstruction and replacement in the United States. This includes, but is not limited to, agreements for compensation, payments, remuneration, honoraria, fellowships, professional meetings, speaking engagements, teaching, publications, clinical studies, fee-for-service consulting, product development and license agreements, research, and professional services agreements. The term “Consulting Agreement” also includes agreements to provide grants, donations, sponsorships and other forms of payment to medical educational organizations, medical societies and training institutions.

     14. “Consulting Services” or “Services” include any and all professional services provided by a Consultant to or on behalf of the Company relating to hip and knee reconstruction and replacement in the United States.

     15. “Payment” shall include any and all compensation or remuneration paid to or for the benefit of Consultants, including but not limited to payments and reimbursements for personal or professional services, any type of securities, registered or unregistered, meals, entertainment, travel, gifts, grants, honoraria, charitable contributions, donations, sponsorships, research grants, clinical studies, professional meetings, product training, medical education, research funding, product development services, in-kind services (e.g., use of aircraft), advertising, promotion, and marketing expenses or support, and royalties or other payments for transfer of documented intellectual property. Unless otherwise approved by the Monitor, the Company shall only compensate or remunerate Consultants through direct Payments made pursuant to a Consulting Agreement. The Company shall not knowingly make any Payments to Consultants indirectly, such as through distributors. Subject to Monitor approval, payments may be made to Consultants through consulting entities provided that (1) the Consultant is named in the corresponding Consulting Agreement, and (2) the Consultant is named on any and all payment documents.

Retention and Obligations of a Monitor

     16. The Company agrees that until the expiration of this DPA, it will retain an outside, independent individual (the “Monitor”) selected by the Office consistent with United

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States Department of Justice guidelines and after consultation with the Company, to evaluate and monitor the Company’s compliance with this DPA. The Monitor is an independent third party, and not an employee or agent of the Company, and no attorney-client relationship shall be formed between the Monitor and the Company. The Company agrees that it will not employ or be affiliated with any selected Monitor for a period of not less than one year from the date the monitorship is terminated.

     17. The Monitor shall have access to all non-privileged Company documents and information the Monitor determines are reasonably necessary to assist in the execution of his or her duties. The Monitor shall have the authority to meet with any officer, employee, or agent of the Company. The Company shall use its best efforts to have its independent distributors for hip and knee reconstruction and replacement products in the United States and their employees and agents fully cooperate and meet with the Monitor as requested. For all distributor agreements for hip and knee reconstruction and replacement products and renewals in the United States executed after the Effective Date, the Company shall require provisions allowing the Monitor access to non-privileged relevant documents and information relating to Consulting Agreements and Services, and compliance with all applicable provisions of the DPA.

     18. The Monitor shall conduct a review and evaluation of all Company policies, practices, and procedures relating to compliance with the DPA and the following subjects, and shall report and make written recommendations as necessary (“Recommendations”) to the Company and the Office concerning:

a.	The corporate structure and governance of the Company relative to selecting, engaging, and paying Consultants;
b.	The effectiveness of the procedures and practices at the Company to select, engage, and pay Consultants in exchange for the provision of Services to the Company, as well as the related legal, compliance, research and development, marketing, sales, internal controls, and finance functions;
c.	The effectiveness of the training and education programs in the following areas: federal health care laws concerning relationships between the Company and Consultants; Medicare, Medicaid and other health care benefit programs; ethics; and compliance and corporate governance issues relating to federal health care laws;
d.	The structure and content of agreements memorializing arrangements to engage and pay Consultants in exchange for the provision of Services to the Company and the Company’s payments to Consultants made thereunder. The Monitor shall have access to and may review all previously entered agreements to the extent he or she reasonably deems necessary; and

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e. The influence, actual or potential, over Consultants’ selection of Company products as a result of the financial relationships between the Company and those Consultants.

     19. The Monitor shall, inter alia:

a.	Monitor and review the Company’s compliance with this DPA and all applicable federal health care laws, statutes, regulations, and programs, including the Anti-Kickback Statute and regulations promulgated thereunder in connection with the sale and marketing by the Company of the Company’s hip and knee reconstruction and replacement products in the United States;
b.	As requested by the Office, cooperate with the Criminal and Civil Divisions of the Office, the United States Department of Justice, Criminal and Civil Divisions, HHS-OIG, the FBI and the USPIS, and, as requested by the Office, provide information about the Company’s compliance with the terms of this DPA;
c.	Provide written reports to the Office, on at least a quarterly basis, concerning the Company’s compliance with this DPA. In these reports or at other times the Monitor deems appropriate, the Monitor shall make Recommendations to the Company to take any steps he or she reasonably believes are necessary for the Company to comply with the terms of this DPA and enhance future compliance with federal health care laws in connection with the sale and marketing by the Company of the Company’s hip and knee reconstruction and replacement products in the United States, and, as agreed by the Company or mandated by the Office pursuant to paragraph 46, require the Company to take such steps when it is agreed that such steps are reasonable and necessary for compliance with the DPA. The first report to the Office shall be due three (3) months after the Effective Date, and subsequent reports shall be made quarterly thereafter;
d.	After consultation with the Company and the Office, and allowing reasonable time for the Company or the Office to object, the Monitor may retain, at the Company’s expense, consultants, accountants or other professionals the Monitor reasonably deems necessary to assist the Monitor in the execution of the Monitor’s duties. Before retention, these consultants, accountants or other professionals shall provide to the Monitor and the Company a proposed budget. If the Company believes the costs to be unreasonable, the Company may bring the matter to the Office’s attention for dispute resolution by the Office;
e.	Monitor the preparation of and approve the Needs Assessment and any Modifications thereto described in paragraphs 27-30 herein;

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f.	Review and approve all new or renewed Consulting Agreements executed between the Effective Date and the date the Needs Assessment is approved;
g.	Review in his or her discretion any requests for Consulting Services made between the Effective Date and the date the Needs Assessment is approved;
h.	Review in his or her discretion any Payments made to Consultants between the Effective Date and the date the Needs Assessment is approved;
i.	Review and approve in his or her discretion all Consulting Agreements with new Consultants executed after the Needs Assessment is approved;
j.	Review in his or her discretion any Consulting Agreement renewals executed after the Needs Assessment is approved;
k.	Review in his or her discretion any requests for Consulting Services made after the Needs Assessment is approved;
l.	Review in his or her discretion any Payments made to Consultants after the Needs Assessment is approved;
m.	Review in his or her discretion any payments made to CME providers, reimbursement specialists, any non-physician engineering or marketing consultants, or other excluded consultants as described in paragraph 12, for personal or professional services relating to hip and knee reconstruction and replacement in the United States;
n.	Review in his or her discretion any payments made to Consultants as honoraria, fellowships, gifts, donations, charitable contributions and other non-Service payments as described in paragraph 27;
o.	Review and approve any new or substitute Consultants as described in paragraphs 33 and 34 herein;
p.	Approve any changes to the Hourly Rate or any Payments made at a rate other than the Hourly Rate, as described in paragraphs 36-37 herein;
q.	Monitor the Company’s compliance with its Consultant disclosure obligations as described in paragraphs 40-41 herein; and
r.	Monitor the information received by the confidential hotline and e-mail address as described in paragraph 43 herein.

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     In the event the Monitor opposes any Consulting Agreement, request for Consulting Services, or request for Payment, the Monitor will promptly meet with the Company to discuss his or her concerns. The Consulting Agreement shall not be executed, the Consulting Services shall not be rendered, or the Payment shall not be made unless and until the Monitor’s objections are remedied. All actions of the Monitor in this regard shall be subject to review by the Office and shall not require the Company to breach any existing contractual requirements so long as those requirements comply with all applicable laws. The Office will act promptly to resolve any issues on a good faith and reasonable basis.

     20. The Company shall promptly notify the Monitor and the Office in writing of any credible evidence of criminal corporate conduct as well as of any known criminal investigations of any type of the corporation or any of its officers or directors that becomes known to the Company after the Effective Date. In addition, the Company shall promptly notify the Monitor and the Office in writing of any credible evidence of criminal conduct or serious wrongdoing relating to federal health care laws by the Company, its officers, employees and agents. The Company shall provide the Monitor and the Office with all relevant non-privileged documents and information concerning such allegations, including but not limited to internal audit reports, letters threatening litigation, “whistleblower” complaints, civil complaints, and documents produced in civil litigation. In addition, the Company shall report to the Monitor and the Office concerning its planned investigative measures and any resulting remedial measures, internal and external. The Monitor in his or her discretion may conduct an investigation into any such matters, and nothing in this paragraph shall be construed as limiting the ability of the Monitor to investigate and report to the Company and the Office concerning such matters.

Remedial Measures

     Responsibilities of Compliance Officer

     21. The Compliance Officer shall be responsible for monitoring the day-to-day compliance activities of the Company. The Compliance Officer shall be a member of senior management of the Company who reports directly to the Nominating, Compliance and Governance Committee of the Board of Directors and indirectly to the President and Chief Executive Officer, and shall not be a subordinate to the General Counsel, the Chief Financial Officer, or any sales or marketing officers. The Compliance Officer shall make periodic (at least quarterly) reports regarding compliance matters to the Company Board of Directors and is authorized to report on such matters directly to the Company Board of Directors at any time.

     22. The Compliance Officer shall have the authority to meet with, and require reports and certifications on any subject from, any officer or employee of the Company and any distributor and its employees.

     23. The Compliance Officer shall be responsible for oversight, evaluation, and approval of the Company’s Needs Assessments (described more fully at paragraphs 27-30), and shall evaluate and approve requests for Consulting Agreements, Services, and Payments, subject to review and approval by the Monitor as set forth in paragraph 19.

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     24. The Compliance Officer shall be responsible for approving the Consulting Services budget. All requests for Consulting Services and Payments must be made to and approved by the Compliance Officer. Any Payments to or for the benefit of a Consultant must be approved by the Compliance Officer, subject to review of the Monitor as set forth in paragraph 19.

     25. Consulting Agreements shall be managed by Company employees who have no sales responsibilities and who report to the Compliance Officer on issues relating to Consulting Services. These employees shall interface directly with the Consultants on the terms of their Consulting Agreements and on issues relating to Payments.

     26. From the Effective Date until the Needs Assessment is approved, all requests for Consulting Services and Payments shall be pre-approved by the Compliance Officer. In considering these requests, the Compliance Officer and any other Company personnel with knowledge of the request shall evaluate the bona fides of the activity for which the Services or Payments are requested, subject to review of the Monitor. No Consulting Services may be approved unless the Compliance Officer verifies that the Company has a bona fide commercial need for such services. No Payments may be made without appropriate documentation and verification of services rendered on a standard form to be developed by the Compliance Officer and approved by the Monitor.

Needs Assessment

     27. The Company shall complete a Needs Assessment no later than December 31, 2010, and annually thereafter. The Needs Assessment may be modified if bona fide, commercially reasonable, unexpected business needs arise (“Modification”). The Needs Assessment must reflect the Company’s expected, commercially reasonable needs for all Consulting Services to fulfill its medical, clinical, training, educational, and research and development needs for its hip and knee reconstruction and replacement products in the United States. The Needs Assessment shall also contain a budget for the total amount of honoraria, fellowships, gifts, donations, charitable contributions, and any other payments contemplated to be made to Consultants for which no Consulting Services are provided. The Needs Assessment and any Modifications shall be prepared in consultation with those areas of the Company that have bona fide needs for the services to be performed. The Needs Assessment and any Modifications must be approved by the Compliance Officer and the Monitor before they are finalized. As of January 1, 2011, the Needs Assessment and any Modifications shall be used as a basis for Consultant selection and all Consulting Agreements, Services and Payments. The Compliance Officer shall attest to the best of his or her knowledge, after conducting reasonable due diligence, that the Needs Assessment and any Modifications reflect the bona fide, commercially reasonable consulting needs of the Company.

     28. The Needs Assessment shall establish or incorporate by reference detailed protocols or procedures that must be followed before a Consulting Agreement will be authorized. The Needs Assessment must identify and quantify the services needed within each discrete service category (e.g., operating room training, speaking engagements, clinical studies, product development groups), and provide written support for the needs. The Needs Assessment must set

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forth the nature of the services needed, the range of hours or other quantitative measure needed to complete the services, the number of Consultants needed, and the maximum fair market value compensation to be paid for each consulting service. The Needs Assessment shall also identify the qualifications and expertise required to perform the services. The Needs Assessment shall ensure that Services are distributed appropriately to all regions of the country.

     29. The Needs Assessment and any approved Modifications shall be used to define and limit all Consulting Services performed for the Company for the ensuing year. All Consulting Agreements entered into by the Company shall be for services specified and enumerated by the Needs Assessment and any approved Modifications. No Consulting Agreement shall be entered into with any Consultant for services outside those specified in the Needs Assessment and any approved Modifications, or for services exceeding the number of services specified in the Needs Assessment and any approved Modifications. For example, if the Needs Assessment specifies that the Company will require Consultants to conduct 50 speaking engagements on a particular topic, once the total number of contracted-for speaking engagements reaches 50, the Company may not engage any additional Consultants for such speaking engagements unless it obtains an approved Modification.

     30. The Company shall maintain a record of all Consulting Services provided under the Needs Assessment and any Modifications. Monthly reports will be issued by the Compliance Officer to the Monitor and to senior executives in the areas in which services are provided summarizing the Consulting Services provided or submitted for Payment, by Consultant, by region, and by total, with a list of services left to be provided during the calendar year in fulfillment of the Needs Assessment.

     Consulting Agreements

     31. All Consulting Agreements shall be in writing and executed by the Compliance Officer, the President and Chief Executive Officer, and the Vice President, General Counsel and Secretary. For product development and research agreements, the Senior Vice President, Research and Development also shall sign. For research and clinical services agreements (such as clinical trials, clinical studies, and follow-up visits), the Vice President, Clinical and Regulatory Affairs also shall sign. On an annual basis, the Compliance Officer, the Senior Vice President, Research and Development, for product development and research agreements, the Vice President, Clinical and Regulatory Affairs, for clinical services agreements, shall attest and certify in writing that, based on their reasonable inquiry and knowledge, all Consulting Agreements and all Consulting Services performed thereunder were bona fide, commercially reasonable, and compliant with all federal health care programs. The Company shall not enter into Consulting Agreements with Consultants through any third parties, including distributors. Subject to Monitor approval, payments may be made to Consultants through consulting entities provided that (1) the Consultant is named in the corresponding Consulting Agreement, and (2) the Consultant is named on any and all payment documents.

     32. All Consulting Agreements for Consulting Services to be rendered in 2011 and thereafter shall be for a term of the calendar year, with the exception of product development agreements that could result in the payment of royalties, clinical agreements, external research

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agreements, or other agreements which may be for a length appropriate to the type of Service being rendered, upon approval of the Monitor. All Consulting Agreements shall identify the specific Services to be provided as defined by the Needs Assessment and any Modification thereto, and specify the rate to be paid for each Service. The Company may not enter into Consulting Agreements for Services exceeding the total number of Services set forth in the Needs Assessment and any Modification thereto. Consultants shall be paid only for the actual time expended in providing Consulting Services, in hourly billing increments or other reasonable quantitative measure as identified in the Needs Assessment, without regard to the total amount of consulting services permissible under their Consulting Agreements.

     New and Substitute Consultants

     33. The Compliance Officer, in consultation with the Monitor and appropriate Company employees, shall conduct an evaluation of each new Consultant to be considered for a Consulting Agreement. This evaluation shall ensure that the proposed Consultant’s qualifications and experience are commensurate with those required by the Needs Assessment and any Modification thereto, and that any new relationship meets an unfilled bona fide commercial need of the Company.

     34. In the event a Consultant is unable to provide services to the Company under a Consulting Agreement in any given year, the Company may substitute another Consultant or retain a new Consultant to perform the specified yet unfulfilled Consulting Services of the Consulting Agreement. The substitute Consultant must be authorized by the Compliance Officer and approved by the Monitor after conducting a substantive review of the Consultant’s qualifications and expertise.

     Payments to Consultants

     35. A Company employee or representative must be present for every Consulting Service, except that the Monitor, upon application by the Compliance Officer, may exempt certain Services from this requirement (such as collection of clinical study data, travel or preparation time). Upon completion of the Consulting Service, both the Company employee (or representative) in attendance and the Consultant must independently verify in writing that the Service took place, identify the participants present and length of service, and summarize the Service provided. These verifications must be certified, made under penalty of perjury, and submitted to the Compliance Officer within ninety (90) calendar days of the date of the Service and as a condition precedent to any Payments being issued under a Consulting Agreement.

     36. For all Consulting Agreements entered into after the Effective Date of this DPA, the Company agrees to make Payments to Consultants at a fair market value hourly rate (“Hourly Rate”) of no more than $500 per hour for time actually expended by a Consultant performing Consulting Services. In the event the Company wishes to make Payments to a Consultant at a higher Hourly Rate or at a different rate because of the Consultant’s special expertise or the nature of the service (such as a per patient rate for clinical studies), the Company must obtain or have obtained a fair market value analysis conducted by an independent organization with

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expertise in valuation as approved or accepted by the Monitor. Any changes to the Hourly Rate or Payments at other than the Hourly Rate must be approved by the Monitor.

     37. With respect to product development agreements and renewals entered into after the Effective Date and for all Services to be rendered after January 1, 2011, the Company shall pay a Consultant on a product development team for the actual time spent providing Services to the Company, at no more than the Hourly Rate. In addition to the Hourly Rate payments, the Company may pay each member of a product development team royalties on any product the team may develop. The number of Consultants serving on a product development team must not exceed the number reasonably necessary to achieve the identified design and development needs of the project. The aggregate royalties paid per project to all Consultants shall not exceed fair market value expressed as a certain percentage of all domestic and international product sales of the product or products that are the subject of the product development agreement as proposed by the Company and approved by the Monitor. These royalty payments and Hourly Rate payments shall be the only compensation a Consultant may receive for participation on a product design team; that is, the Company shall not make any flat rate payments or minimum guaranteed payments in lieu of or in addition to Hourly Rate payments and royalty payments. The Company may offset royalty payments to a Consultant with Hourly Rate payments for Services the Consultant appropriately performed. The Company may pay royalties to a Consultant only for Intellectual Property received by the Company for products that have actually been sold. (Products may be considered to have been sold when the products are transferred to an unrelated third-party or to a Company affiliate located outside the United States.) If the Intellectual Property has been patented in the United States, royalty payments may not extend beyond the life of the U.S. patent. If the Intellectual Property has not been patented, royalties may not extend beyond a reasonable period (in light of factors such as the life cycle and commercial advantages of the products and Intellectual Property and the burden of administering the royalty arrangement). As used herein, “Intellectual Property” includes patents, trade secrets and knowhow received by the Company from the Consultant or product development team under a product development agreement. The Company shall establish processes for reviewing individual Consultant contributions to determine whether Intellectual Property has been provided to the Company, and such processes shall be approved by the Monitor. The persons responsible for deciding whether Intellectual Property has been provided shall not be involved in sales functions, and their decision is subject to Monitor approval. The identity of royalty-bearing products must be reasonable (in light of factors such as the scope of Intellectual Property transferred, the relationship of the Intellectual Property to the products and the burden of administering the royalty arrangement) and is subject to Monitor approval. Royalties must not be paid in advance or in anticipation of product development that might result in a royalty. No royalty may be paid to a Consultant that is earned by virtue of the use of the product in question by the Consultant or by any hospital or medical institution with which the Consultant is affiliated. In lieu of royalties, a fixed amount may be paid for Intellectual Property provided to the Company, provided the amount is commercially reasonable; such fixed amounts are subject to Monitor approval. For patents and patent applications that are not assigned or licensed to the Company under a product development agreement, royalties, patent fees, patent costs, and/or a fixed amount may be paid for the acquisition or licensing of such patents and patent applications, subject to Monitor approval.

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     38. All Consultants on product design teams shall submit invoices, at least quarterly, and supporting documentation for services rendered to the Company’s design team project manager for approval, prior to any Payments being made. A Company employee shall be present at all meetings of product development teams. That employee shall report the date, the participants, and a summary of the meeting to the project manager. The project manager must certify in writing that the invoices reflect bona fide services provided by the Consultant. These invoices, supporting documentation, and certification must be submitted to the Compliance Officer for Payment.

     39. In addition, the following practices have been or shall be implemented no later than sixty (60) calendar days after the Effective Date:

a.	The Company may not make Payments to Consultants for collection of clinical data unless there is a written agreement defining the required procedures and protocol and the amount of clinical data to be collected by the Consultant, pre-approved by the Vice President, Clinical and Regulatory Affairs.
b.	The Company may not make Payments to Consultants for research unless there is a written agreement defining the required procedures and protocol, pre-approved by the Senior Vice President, Research and Development. The Company may not provide unrestricted grants to Consultants.
c.	The Company may not fund any fellowships for fellows who work with any Consultant, with the exception of fellowship funding to legitimate medical education foundations or institutions so long as that funding is approved in advance by the Compliance Officer and the Monitor.
d.	The Company may not make charitable contributions to 501(c)(3) organizations that are, to the best of the Company’s knowledge after reasonable due diligence is conducted, controlled by a Consultant or an immediate family member of a Consultant, or at which an immediate family member of a Consultant is employed. All charitable contributions must be approved in advance by the Compliance Officer in consultation with the Monitor, and the Monitor has the discretion to make exceptions to the above standard.
e.	Other than Consulting Agreements, the sale of products and associated equipment and instruments and the purchase of Intellectual Property, the Company may have no commercial dealings with any Consultant or any entity or organization that the Company has reason to believe, after reasonable due diligence is conducted, is controlled by the Consultant or an immediate family member of the Consultant. The Monitor has the discretion to make exceptions to the above standard.

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f.	The Company shall not hire or engage as an agent or distributor anyone in order to induce a specific Consultant to use or purchase Company products.
g.	The Compliance Officer shall notify the Monitor of any employees or independent distributors who are known to bear an immediate family relationship to any Consultant. In such cases, the Monitor may recommend changes in assignment or case coverage to avoid actual or perceived conflicts of interest.

Disclosure

     40. All new Consulting Agreements and renewals shall require Consultants to disclose their financial engagement with the Company to their patients, as well as to their affiliated hospitals.

     41. Within thirty (30) calendar days of the Effective Date of this DPA, the Company shall prominently feature on its web site the name, city, and state of residence for each of the Company’s Consultants who were retained at any time in 2010, who provided Consulting Services to the Company at any time in 2010, or who received any Payments from the Company in 2010. The Company shall also there disclose the Payments made to each Consultant to date in 2010 within $25,000 increments, and all other Payments made in other than dollar form. Within ten (10) calendar days after a new Consulting Agreement or renewal is executed, the Company shall post the name of the Consultant on its web site. If the Company has or does enter into a Consulting Agreement with an entity rather than an individual, the Company shall post both the name of the entity and the individual providing Services to the Company under the Consulting Agreement. Payment information shall be updated quarterly during the term of this DPA to reflect the total Payments made to each Consultant within $25,000 increments, and all other Payments made in other than dollar form. The Company must also disclose this information to the Consultant’s affiliated hospitals.

Compliance, Training, Hotline

     42. The Company agrees to enhance, support, and maintain its existing training and education programs, including any programs recommended by the Monitor pursuant to paragraph 18, above. The programs, which shall be reviewed and approved by the Company President and Chief Executive Officer, Board of Directors, Vice President, General Counsel and Secretary, Compliance Officer, and the Monitor, shall be designed to advance and underscore the Company’s commitment to exemplary corporate citizenship, to best practices of effective corporate governance and the highest principles of integrity and professionalism, and to fostering a culture of openness, accountability and compliance with federal health care laws throughout the Company. Completion of such training shall be mandatory for all Company officers, executives, and employees who are involved in Sales, Marketing, Legal, Compliance, and other senior executives at the Company as proposed by the Compliance Officer and approved by the Monitor (collectively the “Mandatory Participants”). Such training and education shall cover, at a minimum, all relevant federal health care laws and regulations, internal controls in place concerning Consultants and their Consulting Agreements with the Company, and the obligations

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assumed by, and responses expected of, the Mandatory Participants upon learning of improper, illegal, or potentially illegal acts relating to the Company’s sales and marketing practices. The Company Chief Executive Officer and Board of Directors shall communicate to the Mandatory Participants, in writing or by video, their review and endorsement of the training and education programs. The Company shall commence providing this training within ninety (90) calendar days after the Effective Date of this DPA.

     43. The Company agrees to maintain its confidential hotline and e-mail address, of which Company employees, agents, and customers are informed and which they can use to notify the Company of any concerns about unlawful conduct, other wrongdoing, or evidence that Company practices do not conform to the requirements of this Agreement. Subject to Monitor approval, the Company may retain a vendor to assist in the maintenance of the Company’s confidential hotline and e-mail address. This hotline and e-mail address shall be reviewed by the Monitor. The Company shall post information about this hotline on its website and shall inform all those who avail themselves of the hotline of the Company’s commitment to non-retaliation and to maintain confidentiality and anonymity with respect to such reports.

Disclosure of Monitor Reports

     44. The Company agrees that the Monitor may disclose his or her written reports, as directed by the Office, to any other federal law enforcement or regulatory agency in furtherance of an investigation of any other matters discovered by, or brought to the attention of, the Office in connection with the Office’s investigation of the Company or the implementation of this DPA. The Company may identify any trade secret or proprietary information contained in any report, and request that the Monitor redact such information prior to disclosure.

Replacement of Monitor

     45. The Company agrees that if the Monitor resigns or is unable to serve the balance of his or her term, a successor shall be selected by the Office consistent with United States Department of Justice guidelines and after consultation with the Company, within forty-five (45) calendar days. The Company agrees that all provisions in this DPA that apply to the Monitor shall apply to any successor Monitor.

Adopting Recommendations of Monitor

     46. The Company shall adopt all Recommendations contained in each report submitted by the Monitor to the Office, unless the Company objects to the Recommendation and the Office agrees that adoption of the Recommendation shall not be required. The Monitor’s reports to the Office shall not be received or reviewed by the Company prior to submission to the Office; such reports will be preliminary until the Company is given the opportunity, within fifteen (15) calendar days after the submission of the report to the Office, to comment to the Monitor and the Office in writing upon such reports, and the Monitor has reviewed and provided to the Office responses to such comments, upon which such reports shall be considered final. In the event the Company disagrees with any Recommendation of the Monitor, the Company and the Monitor may present the issue to the United States Attorney for his consideration and final decision, which is non-appealable.

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Meeting with the U.S. Attorney

     47. Within thirty (30) calendar days of the Effective Date of this DPA, the Company agrees to call a meeting, on a date mutually agreed upon by the Company and the Office, of Company senior compliance, sales, and marketing executives, and any other Company employees whom the Company desires to attend, such meeting to be attended by the United States Attorney, his designee, and/or other representatives of the Office for the purpose of communicating the goals and expected effect of this DPA.

Cooperation

     48. The Company agrees that its continuing cooperation during the term of this DPA shall include, but shall not be limited to, the following:

a.	Not engaging in or attempting to engage in any criminal conduct;
b.	Completely, truthfully and promptly disclosing all non-privileged information concerning all matters about which the Office and other government agencies designated by the Office may inquire with respect to the Company’s compliance with health care laws, and continuing to provide the Office, upon request, all non-privileged documents and other materials relating to such inquiries;
c.	Consenting to any order sought by the Office permitting disclosure to the Civil Division of the United States Department of Justice of any materials relating to compliance with federal health care laws that constitute “matters occurring before the grand jury” within the meaning of Rule 6(e) of the Federal Rules of Criminal Procedure. If the Company asserts that any such any material contains trade secrets or other proprietary information, the Company shall propose redactions to the Office prior to disclosure to any other governmental entity, or the material shall be accompanied by a prominent warning notifying the agency of the protected status of the material;
d.	Making available current Company officers and employees and using its best efforts to make available former Company officers and employees to provide information and/or testimony at all reasonable times as requested by the Office, including sworn testimony before a federal grand jury or in federal trials, as well as interviews with federal law enforcement authorities as may relate to matters involving compliance with health care laws. The Company is not required to request of its current or former officers and employees that they forego seeking the advice of an attorney nor that they act contrary to that advice. Cooperation under this paragraph shall include, upon request, identification of witnesses who, to the Company’s knowledge, may have material non-privileged information regarding the matters under investigation;
e.	Providing testimony, certifications, and other non-privileged information deemed necessary by the Office or a court to identify or establish the original location, authenticity, or other evidentiary foundation necessary to admit into evidence

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documents in any criminal or other proceeding relating to compliance with health care laws as requested by the Office;

f.	The Company acknowledges and understands that its future cooperation is an important factor in the decision of the Office to enter into this DPA, and the Company agrees to continue to cooperate fully with the Office, and with any other government agency designated by the Office, regarding any issue about which the Company has knowledge or information with respect to compliance with health care laws;
g.	This agreement to cooperate does not apply to any information provided by the Company to legal counsel in connection with the provision of legal advice and the legal advice itself, or to information or documents prepared in anticipation of litigation, and nothing in this DPA shall be construed to require the Company to provide any such information or advice to the Office or any other government agency; and
h.	The cooperation provisions in this paragraph shall not apply in the event that the Office pursues a criminal prosecution against the Company.

Breach of Agreement

     49. Should the Office determine, in good faith and in its sole discretion, during the term of this DPA that the Company has committed any criminal conduct relating to compliance with health care laws subsequent to the Effective Date of this DPA, the Company shall, in the discretion of the Office, thereafter be subject to prosecution for any federal crimes of which the Office has knowledge.

     50. Should the Office determine in good faith and in its sole discretion that the Company has knowingly and willfully breached any material provision of this DPA, the Office shall provide written notice to the Company of the alleged breach and provide the Company with a three-week period from receipt of such notice in which to make a presentation to the Office to demonstrate that no breach occurred, or, to the extent applicable, that the breach was not material or knowingly and willfully committed or has been cured. The parties understand and agree that should the Company fail to make a presentation to the Office within the three-week period after receiving written notice of an alleged breach, it shall be conclusively presumed that the Company is in breach of this DPA. In the event the Office determines, in good faith and in its sole discretion, that a second material breach has occurred, or that the first material breach has not been adequately cured, the Office shall provide written notice to the Company of the breach, and the breach may result, in the sole discretion of the Office, in the prosecution of the Company relating to the allegations set forth in the criminal complaint described in paragraph 2 above. In the event of any breach of this DPA that results in a prosecution of the Company, such prosecution may be premised upon any information provided by or on behalf of the Company to the Office at any time, unless otherwise agreed at the time the information was provided. The parties further understand and agree that the determination whether the Company has breached this DPA rests solely in the discretion of the Office, and the exercise of discretion by the Office

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under this paragraph is not subject to review in any court or tribunal outside the United States Department of Justice.

     51. In the event of breach of this DPA as defined in paragraph 49 or 50 above, the Company may be subject to exclusion by HHS-OIG from participation in all federal health care programs. Such exclusion shall have national effect and shall also apply to all other federal procurement and non-procurement programs. Federal health care programs shall not pay anyone for services or items manufactured, furnished, or distributed by the Company in any capacity while the Company is excluded. This payment prohibition applies to the Company and all other individuals and entities (including, for example, anyone who employs or contracts with the Company, and any hospital or other provider where the Company provides services). The exclusion applies regardless of who submits the claim or other request for payment. The Company shall not submit or cause to be submitted to any federal health care program any claim or request for payment for services or items manufactured, furnished, or distributed by the Company during the exclusion. Violation of the conditions of the exclusion may result in criminal prosecution, the imposition of civil monetary penalties and assessments, and an additional period of exclusion. The Company further agrees to hold the federal health care programs, and all federal beneficiaries and/or sponsors, harmless from any financial responsibility for services or items manufactured, furnished or distributed to such providers, beneficiaries or sponsors after the effective date of the exclusion. The Company waives any further notice of the exclusion under 42 U.S.C. § 1320a-7(b)(7), and agrees not to contest such exclusion either administratively or in any state or federal court. Reinstatement to program participation is not automatic. If at the end of the period of exclusion the Company wishes to apply for reinstatement, the Company must submit a written request for reinstatement to the OIG in accordance with the provisions of 42 C.F.R. §§ 1001.3001-.3005. The Company will not be reinstated unless and until the OIG approves such request for reinstatement.

     52. In the event of breach of this DPA as defined in paragraph 49 and 50 above, the Office shall have discretion to extend the term of the Monitor by a period of up to 6 months, with a total term not to exceed 18 months, in lieu of prosecuting or subjecting the Company to exclusion.

     53. In the event that the Company can demonstrate to the Office that there exists a change in circumstances sufficient to eliminate the need for a Monitor, the Office may exercise its discretion, consistent with United States Department of Justice policy, to terminate the monitorship.

Waivers and Limitations

     54. The Company shall expressly waive all rights to a speedy trial pursuant to the Sixth Amendment of the United States Constitution, Title 18, United States Code, Section 3161, Federal Rule of Criminal Procedure 48(b), and any applicable Local Rules of the United States District Court for the District of New Jersey, for the period that this DPA is in effect for any prosecution of the Company relating to the allegations set forth in the criminal complaint described in paragraph 2 above.

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     55. In case of a knowing and willful material breach of this DPA, any prosecution of the Company relating to the allegations set forth in the criminal complaint described in paragraph 2 above that is not time-barred by the applicable statute of limitations as of the Effective Date of this DPA may be commenced against the Company notwithstanding the expiration of any applicable statute of limitations during the term of the DPA. The Company agrees to waive any claims of improper venue with respect to any prosecution of the Company relating to the allegations set forth in the criminal complaint described in paragraph 2 above. This waiver is knowing and voluntary and in express reliance on the advice of counsel. Any such waiver shall terminate upon final expiration of this DPA.

     56. Absent the express written consent of the Office to conduct itself otherwise, and consistent with United States Department of Justice policy, the Company agrees that if, after the Effective Date of this Agreement, the Company sells all or substantially all of its business operations as they exist as of the Effective Date of this Agreement to a single purchaser or group of affiliated purchasers during the term of this Agreement, or merges with a third party in a transaction in which the Company is not the surviving entity, the Company shall include in any contract for such sale or merger a provision binding the purchaser, successor, or surviving entity to continue to comply with the Company’s obligations as contained in this DPA.

     57. The Company is simultaneously entering into an agreement with the Office’s Civil Division (the “Civil Settlement Agreement’) regarding the payment of money to settle certain civil claims. The Company is also simultaneously entering into a Corporate Integrity Agreement (“CIA”) with HHS-OIG to implement certain specified compliance measures. Failure by the Company to comply fully with those material terms of the Civil Settlement Agreement scheduled to occur during the Effective Period of this DPA may constitute a breach of this DPA; provided, however, that a breach of the CIA referenced in the Civil Settlement Agreement does not constitute a breach of this DPA. Any disputes arising under the CIA shall be resolved exclusively through the dispute resolution provisions of the CIA.

     58. Nothing in this DPA restricts in any way the ability of the Office to investigate and prosecute any current or former Company officer, employee, agent or attorney.

     59. It is understood that this DPA is limited to the Company and the Office, and it cannot bind other federal, state or local authorities. However, the Office will bring this DPA, the United States Department of Justice Petite Policy and the cooperation of the Company and its compliance with its other obligations under this DPA to the attention of other prosecuting offices, if requested to do so.

Dismissal of Complaint

     60. The Office agrees that if the Company is in full compliance with all of its obligations under this DPA, the Office, within ten (10) calendar days of the expiration of the term of this DPA, will seek dismissal with prejudice of the criminal complaint described in paragraph 2 above. Except as otherwise provided herein, during and upon the conclusion of the term of this DPA, the Office agrees that it will not prosecute the Company further for the matters

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that have been the subject of the Office’s investigation relating to this DPA, including but not limited to Payments that the Company made to Consultants between 2002 and 2007.

The Full Agreement

     61. This DPA constitutes the full and complete agreement between the Company and the Office and supersedes any previous agreement between them. No additional promises, agreements, or conditions have been entered into other than those set forth in this DPA, and none will be entered into unless in writing and signed by the Office, Company counsel, and a duly authorized representative of the Company. It is understood that the Office may permit exceptions to or excuse particular requirements set forth in this DPA at the written request of the Company or the Monitor, but any such permission shall be in writing.

     62. This DPA may be executed in counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same agreement. The exchange of copies of this DPA and of signature pages by facsimile or electronic transmission shall constitute effective execution and delivery of this DPA as to the parties and may be used in lieu of the original DPA for all purposes. Signatures of the parties transmitted by facsimile or electronic transmission shall be deemed to be their original signatures for all purposes.

AGREED TO:

/s/: Gary D. Henley	/s/: J. Gilmore Childers
Gary D. Henley	J. Gilmore Childers
President and Chief Executive Officer	Attorney for the United States, Acting Under
Wright Medical Technology, Inc.	Authority Conferred by 28 U.S.C. § 515
9/22/10 Date	9/29/10Date

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DIRECTOR’S CERTIFICATE

     I have read this agreement and carefully reviewed every part of it with counsel for Wright Medical Technology, Inc. (the “Company”). I understand the terms of this Deferred Prosecution Agreement and voluntarily agree, on behalf of the Company, to each of the terms. Before signing this Deferred Prosecution Agreement, I consulted with the attorney for the Company. The attorney fully advised me of the Company’s rights, of possible defenses, of the Sentencing Guidelines’ provisions, and of the consequences of entering into this Deferred Prosecution Agreement. No promises or inducements have been made other than those contained in this Deferred Prosecution Agreement. Furthermore, no one has threatened or forced me, or to my knowledge any person authorizing this Deferred Prosecution Agreement on behalf of the Company, in any way to enter into this Deferred Prosecution Agreement. I am also satisfied with the attorney’s representation in this matter. I certify that I am a director of the Company, and that I have been duly authorized by the Board of Directors of the Company to execute this certificate on behalf of the Company.

/s/: Gary D. Henley	9/22/10
Wright Medical Technology, Inc.	Date
By: Gary D. Henley

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CERTIFICATE OF COUNSEL

     I am counsel for Wright Medical Technology, Inc. (the “Company”). In connection with such representation, I have examined relevant Company documents, and have discussed this Deferred Prosecution Agreement with the authorized representative of the Company. Based on my review of the foregoing materials and discussions, I am of the opinion that:

     1. Gary D. Henley, President, Chief Executive Officer and a Director of the Company, is duly authorized to enter into this Deferred Prosecution Agreement on behalf of the Company; and

     2. This Deferred Prosecution Agreement has been duly and validly authorized, executed and delivered on behalf of the Company, and is a valid and binding obligation of the Company.

     Further, I have carefully reviewed every part of this Deferred Prosecution Agreement with directors of the Company. I have fully advised these directors of the Company’s rights, of possible defenses, of the Sentencing Guidelines’ provisions, and of the consequences of entering into this Agreement. To my knowledge, the Company’s decision to enter into this Agreement is an informed and voluntary one.

/s/: Karen F. Green, Esq.	9/23/10
Karen F. Green, Esq.	Date
Wilmer Cutler Pickering Hale and Dorr LLP

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CERTIFIED COPY OF RESOLUTION

     Upon motion duly made, seconded, and unanimously carried by the affirmative vote of all the Directors present, the following resolutions were adopted:

     WHEREAS, Wright Medical Technology, Inc. (the “Company”) has been engaged in discussions with the United States Attorney’s Office for the District of New Jersey (the “Office”) in connection with an investigation being conducted by that Office;

     WHEREAS, the Board of the Company consents to resolution of these discussions by entering into a deferred prosecution agreement that the Company Board of Directors has reviewed with outside counsel representing the Company, relating to a criminal complaint to be filed in the U.S. District Court for the District of New Jersey charging the Company with conspiracy to commit violations of the federal anti-kickback statute;

     NOW THEREFORE, BE IT RESOLVED that Gary D. Henley, the Company’s President, Chief Executive Officer and a Director, be, and hereby is authorized to execute the Deferred Prosecution Agreement on behalf of the Company substantially in the same form as reviewed by the Company Board of Directors at this meeting and as attached hereto as Exhibit A, and is authorized to execute the Director’s Certificate attached thereto.

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SECRETARY’S CERTIFICATION

     I, Raymond C. Kolls, the duly elected Secretary of Wright Medical Technology, Inc. (the “Company”) a corporation duly organized under the laws of the State of Delaware, hereby certify that the following is a true and exact copy of a resolution approved by the Board of Directors of the Company at its telephonic meeting held on the 21^st day of September, 2010;

     WHEREAS, Wright Medical Technology, Inc. has been engaged in discussions with the United States Attorney’s Office for the District of New Jersey (the “Office”) in connection with an investigation being conducted by the Office into activities of the Company relating to certain payments to Consultants who have selected orthopaedic hip and knee replacement products manufactured by the Company in surgeries performed by them;

     WHEREAS, the Board of Directors of the Company consents to resolution of these discussions on behalf of the Company by entering into a deferred prosecution agreement that the Board of Directors has reviewed with outside counsel representing the Company, relating to a criminal complaint to be filed in the U.S. District Court for the District of New Jersey charging the Company with conspiracy to commit violations of the federal anti-kickback statute;

     NOW THEREFORE, BE IT RESOLVED that Gary D. Henley, the Company’s President, Chief Executive Officer and a Director be, and hereby is authorized to execute the Deferred Prosecution Agreement on behalf of the Company substantially in the same form as reviewed by the Board of Directors at this meeting and as attached hereto as Exhibit A, and is authorized to execute the Director’s Certificate attached thereto.

     IN WITNESS WHEREOF, I have hereunto signed my name as Secretary and affixed the Seal of said Corporation this 21st day of September, 2010.

/s/: Raymond C. Kolls

Raymond C. Kolls, Secretary

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EX-99

Exhibit 99

FOR IMMEDIATE RELEASE
Contact: Lance A. Berry
(901) 867-4607

Wright Medical Announces Resolution of Government Investigation

Arlington, TENN—September 30, 2010—Wright Medical Group, Inc. (NASDAQ: WMGI), announced today that its wholly-owned subsidiary, Wright Medical Technology, Inc. (Company), has entered into a Deferred Prosecution Agreement (DPA) with the United States Attorney’s Office for the District of New Jersey (USAO) and a civil Settlement Agreement (CSA) with the United States. These agreements resolve the USAO’s investigation into the Company’s consulting arrangements with orthopaedic surgeons relating to its hip and knee products in the United States. Under the DPA, the USAO agrees not to prosecute the Company in connection with the matter if the Company satisfies its obligations during the 12 month term of the DPA. Pursuant to the CSA, the Company will settle civil and administrative claims relating to the matter for a payment of $7,929,900, without any admission by the Company. In conjunction with the CSA, the Company has also entered into a five (5) year Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the United States Department of Health and Human Services.

Pursuant to the DPA, an independent monitor will review and evaluate the Company’s compliance with its obligations under the DPA.

Together, the agreements announced today resolve the investigation commenced by the USAO in December of 2007. The USAO specifically acknowledges in the DPA that it does not allege that the Company’s conduct adversely affected patient health or patient care.

The Company previously accrued approximately $8 million for an anticipated settlement of this investigation, and therefore, these agreements are not anticipated to materially impact the Company’s results of operations for the third quarter of 2010.

Wright Medical’s President and Chief Executive Officer, Gary D. Henley, stated “We are pleased to announce these agreements and look forward to working with the independent monitor as we continue our commitment to the highest standards of ethical and legal conduct. This commitment applies to all our dealings with our customers, vendors and business partners, as well as with our surgeon consultants who are an important source of innovation in medical technology and integral to the training of their peers. We believe this resolution is in the best interest of our shareholders and that the terms of the resolution reflect our cooperation with the government throughout the investigation.”

A copy of the DPA has been posted to the Company’s website.

Wright Medical Group, Inc. is a global orthopaedic medical device company specializing in the design, manufacture and marketing of devices and biologic products for the extremity, hip and knee repair and reconstruction markets. The Company is a leading provider of surgical solutions for the foot and ankle market. The Company has been in business for more than 50 years and

headquarters
Wright Medical Technology, Inc.    5677 Airline Road  Arlington, TN 38002 901.867.9971 phone www.wmt.com

markets its products in over 60 countries worldwide. For more information about Wright Medical, visit the Company’s website at www.wmt.com.

This press release contains “forward-looking statements” as defined under U.S. federal securities laws. These statements reflect management’s current knowledge, assumptions, beliefs, estimates, and expectations and express management’s current views of future performance, results, and trends and may be identified by their use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” and other similar terms. Forward-looking statements are subject to a number of risks and uncertainties that could cause the Company’s actual results to materially differ from those described in the forward-looking statements. Such risks and uncertainties include the impact of the Company’s settlement of the federal investigation into the Company’s consulting arrangements with orthopaedic surgeons relating to its hip and knee products in the United States, including the Company’s compliance with the DPA through September 2011 and the CIA through September 2015, and those risks and uncertainties discussed in the Company’s filings with the Securities and Exchange Commission (including those described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, under the heading, “Risk Factors” and the Company’s subsequently filed Securities and Exchange Act of 1934 reports). Readers should not place undue reliance on forward-looking statements. Such statements are made as of the date of this report, and the Company undertakes no obligation to update such statements after this date.

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headquarters
Wright Medical Technology, Inc.    5677 Airline Road  Arlington, TN 38002 901.867.9971 phone www.wmt.com