DEFM14A 1 d855327ddefm14a.htm DEFM14A DEFM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material under §240.14a-12

WRIGHT MEDICAL GROUP N.V.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

   No fee required.
   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
   (1)   

Title of each class of securities to which transaction applies:

 

   (2)   

Aggregate number of securities to which transaction applies:

 

   (3)   

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

   (4)   

Proposed maximum aggregate value of transaction:

 

   (5)   

Total fee paid:

 

   Fee paid previously with preliminary materials.
   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
   (1)   

Amount Previously Paid:

 

   (2)   

Form, Schedule or Registration Statement No.:

 

   (3)   

Filing Party:

 

   (4)   

Date Filed:

 

 

 

 


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WRIGHT MEDICAL GROUP N.V.

 

 

LOGO

NOTICE OF AND AGENDA FOR THE EXTRAORDINARY GENERAL MEETING OF

SHAREHOLDERS TO BE HELD APRIL 24, 2020

YOUR VOTE IS VERY IMPORTANT. PLEASE VOTE YOUR SHARES PROMPTLY.

March 20, 2020

Dear Shareholder:

You are invited to attend an Extraordinary General Meeting (the “Extraordinary General Meeting”) of Wright Medical Group N.V., a public limited liability company (naamloze vennootschap) organized under the laws of the Netherlands (“Wright”, “we” or “us”), to be held on April 24, 2020 at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, at 12:00 p.m., central European time.

Stryker B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands (“Purchaser”), and an indirect, wholly-owned subsidiary of Stryker Corporation, a Michigan corporation (“Stryker”), has made an offer to purchase all of the outstanding ordinary shares, par value €0.03 per share, of Wright (the “Shares”) at a purchase price of $30.75 per Share, without interest and less applicable withholding taxes, to the holders thereof, payable in cash pursuant to a Purchase Agreement, dated November 4, 2019 (as it may be amended from time to time, the “Purchase Agreement”), by and among Wright, Purchaser and Stryker, upon the terms and subject to the conditions set forth in an Offer to Purchase, dated December 13, 2019 (as it may be amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). The Offer is described in a Tender Offer Statement on Schedule TO (as amended and supplemented from time to time) filed by Stryker and Purchaser with the U.S. Securities and Exchange Commission (“SEC”) on December 13, 2019.

Our Extraordinary General Meeting will be held for the following purposes and with the following agenda:

 

  1.

Opening of the meeting

 

  2.

Explanation of the Offer (for discussion)

 

  3.

Appointment of directors to Wright’s Board of Directors (bestuur) (the “Wright Board”)

 

  a.

Conditional appointment of Spencer S. Stiles as executive director, upon binding nomination by the Wright Board (for resolution)

 

  b.

Conditional appointment of William E. Berry, Jr. as non-executive director, upon binding nomination by the Wright Board (for resolution)

 

  c.

Conditional appointment of Dean H. Bergy as non-executive director, upon binding nomination by the Wright Board (for resolution)

 

  d.

Conditional appointment of Jeanne M. Blondia as non-executive director, upon binding nomination by the Wright Board (for resolution)


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  e.

Conditional appointment of David G. Furgason as non-executive director, upon binding nomination by the Wright Board (for resolution)

 

  4.

Acceptance of resignation of members of the Wright Board

 

  a.

Conditional acceptance of the resignation of Robert J. Palmisano as executive director, subject to Offer Closing (for resolution)

 

  b.

Conditional acceptance of the resignation of J. Patrick Mackin as non-executive director, subject to Offer Closing (for resolution)

 

  c.

Conditional acceptance of the resignation of John L. Miclot as non-executive director, subject to Offer Closing (for resolution)

 

  d.

Conditional acceptance of the resignation of Kevin O’Boyle as non-executive director, subject to Offer Closing (for resolution)

 

  e.

Conditional acceptance of the resignation of Amy S. Paul as non-executive director, subject to Offer Closing (for resolution)

 

  f.

Conditional acceptance of the resignation of Richard F. Wallman as non-executive director, subject to Offer Closing (for resolution)

 

  g.

Conditional acceptance of the resignation of Elizabeth H. Weatherman as non-executive director, subject to Offer Closing (for resolution)

 

  5.

Discharge of directors (for resolution)

Granting of full and final discharge to each member of the Wright Board for his or her acts of management or supervision, as applicable, up to the date of the Extraordinary General Meeting and effective as of the Acceptance Time (as defined below)

 

  6.

Approval of the Asset Sale (for resolution)

Conditional approval of the sale, transfer and assumption of the business of Wright, including substantially all of the assets and liabilities of Wright, to or by Purchaser (or an affiliate of Purchaser) (the “Asset Sale”) pursuant to an asset sale agreement between Stryker, Purchaser (or an affiliate of Purchaser) and Wright, a copy of which is attached to the enclosed proxy statement as Annex C, as required under article 2:107a of the Dutch Civil Code

 

  7.

Dissolution (for resolution)

Conditional resolution to (i) dissolve (ontbinden) Wright in accordance with article 2:19 of the Dutch Civil Code as soon as practicable following the consummation of the Asset Sale, (ii) appoint Stichting Vereffening Wright Medical Group as the liquidator of Wright, (iii) appoint Purchaser as the custodian of the books and records of Wright, and (iv) reimburse the liquidator’s reasonable salary and costs (subject to approval of such reimbursement by the Independent Directors (as defined in the Purchase Agreement)), which shall result in one or more advance liquidation distributions and a final liquidation distribution being made.

 

  8.

Amendment of the Articles of Association regarding Compensation of Dissenting Shareholders (for resolution)

Resolution to (i) amend Wright’s articles of association to fix the amount of compensation that dissenting shareholders may claim in connection with the proposed Mergers (as defined in the Purchase Agreement) and (ii) authorize any and all lawyers and deputy civil law notaries practicing at Stibbe N.V., Amsterdam, the Netherlands or Houthoff Coöperatief U.A., Amsterdam, the Netherlands (collectively, the “Authorized Notaries”), to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to the enclosed proxy statement as Annex D


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  9.

Entry into and approval of the Mergers (for resolution)

Approval of the Mergers, including the entry into by Wright of the First-Step Merger pursuant to the common draft terms of the cross-border merger, a copy of which is attached to the enclosed proxy statement as Annex E

 

  10.

Amendment of the Articles of Association regarding the Demerger (for resolution)

Resolution to (i) amend Wright’s articles of association to authorize the Wright Board to resolve on a potential statutory demerger to an entity wholly-owned by Wright and (ii) authorize the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to the enclosed proxy statement as Annex F

 

  11.

Conversion and Amendment of the Articles of Association (for resolution)

Conditional resolution to (a) convert Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), and (b) amend Wright’s articles of association as set forth in Annex G to the enclosed proxy statement in connection with the conversion of Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) and authorize the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment

 

  12.

Amendment of the Articles of Association Following Delisting (for resolution)

Conditional resolution to (i) amend Wright’s articles of association as set forth in Annex H to the enclosed proxy statement in connection with the delisting of the Shares on The Nasdaq Stock Market LLC and (ii) authorize the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment

 

  13.

Amendment of the Articles of Association to Change Wright’s Financial Year (for resolution)

Conditional resolution to (i) amend Wright’s articles of association to align Wright’s financial year with that reckoned by Purchaser and (ii) authorize the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to the enclosed proxy statement as Annex I

 

  14.

Non-binding advisory vote on transaction-related executive compensation arrangement (for non-binding resolution)

The Wright Board has unanimously, among other things (a) determined that the terms of the Purchase Agreement, the Offer, certain transactions contemplated by the Purchase Agreement (including the Asset Sale, the Liquidation and Second Step Distribution and the Mergers (each as defined in the Purchase Agreement)) are in the best interests of Wright, its businesses and its shareholders, employees and other relevant stakeholders, (b) approved and adopted the Purchase Agreement and (c) resolved, on the terms and subject to the conditions set forth in the Purchase Agreement, to recommend that Wright’s shareholders tender their Shares into the Offer and approve and adopt the matters to be proposed for consideration and approval by Wright’s shareholders at the Extraordinary General Meeting. The Wright Board unanimously recommends that you vote “FOR” the agenda items that have been put for binding or non-binding resolution on the agenda of this Extraordinary General Meeting.

Subject to certain restrictions under Dutch law, each Share entitles the holder thereof to one vote on each matter submitted to a vote at the Extraordinary General Meeting. You may vote if you are the shareholder of record of Shares as of the close of business on the record date (registratiedatum), March 27, 2020 (the “Record Date”), even if you have previously tendered your Shares in the Offer. The Wright Board has determined that Wright’s shareholders’ register kept by American Share Transfer & Trust Company, LLC (the “Register”) is the relevant register for determination, as of the Record Date, of the holders of Shares and others with meeting rights under Dutch law who are entitled to attend and, if relevant, vote at the Extraordinary General Meeting. Those who are holders of Shares or who otherwise have such meeting rights with respect to Shares on the Record Date may attend the Extraordinary General Meeting and, if relevant, vote at such meeting in person, or authorize a third party to attend and, if relevant, vote at the meeting on their behalf through the use of a proxy.


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Admittance of shareholders and acceptance of written voting proxies shall be governed by Dutch law. Only shareholders of record as of the Record Date, beneficial owners as of the Record Date, holders of valid proxies for the Extraordinary General Meeting, in each case subject to such requirements as set forth in this proxy statement, and other persons admitted by the chairman of the meeting may attend the Extraordinary General Meeting. Persons who wish to attend the Extraordinary General Meeting must give notice in writing to the Wright Board of their intention to attend the Extraordinary General Meeting prior to April 17, 2020. The notice must contain the name and the number of Shares the person will represent in the Extraordinary General Meeting. Failure to comply with such notification requirement may result in not being admitted to the Extraordinary General Meeting. In addition, it is possible that shareholders who seek to attend the Extraordinary General Meeting in-person will be subject to screening with regard to the coronavirus (COVID-19) in order to comply with local health and government guidelines and applicable building policies. We may also impose additional procedure or limitations on meeting attendees or decide to hold the meeting in a different location and will announce any such change in advance. Proxy cards to vote Shares must be completed and received by Wright no later than 11:59 p.m., Eastern Time, on April 22, 2020 (the Voter Deadline”). Proxy cards to vote Shares received after the Voter Deadline may be disregarded. All attendees must be prepared to identify themselves with a valid proof of identity for admittance.

The enclosed proxy statement provides detailed information about the Extraordinary General Meeting, the Offer, the other transactions contemplated by the Purchase Agreement and the various items that will be discussed or that will be voted on at the Extraordinary General Meeting. The enclosed proxy statement contains a number of annexes, including the Purchase Agreement, which is attached as Annex A to the proxy statement. The proxy statement also describes the actions and determinations of the Wright Board in connection with its evaluation of the Offer, the Purchase Agreement and the transactions contemplated thereby. We encourage you to read the proxy statement attached to this notice and its annexes, including the Purchase Agreement, carefully and in their entirety. You may also obtain more information about Wright from documents we file with the SEC from time to time. You may also obtain more information about the Offer from documents Stryker files with the SEC from time to time. For additional information regarding the Offer, you may refer to the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC by Wright on December 13, 2019 and the Offer to Purchase (as each may be amended or supplemented from time to time).

Your vote is very important, regardless of the number of Shares that you own. If you fail to return your proxy card, to grant your proxy electronically over the Internet prior to the Voter Deadline or to vote in person at the Extraordinary General Meeting, your Shares will not be considered present or represented for purposes of determining whether a quorum is present at the Extraordinary General Meeting. If you hold your Shares in “street name,” the failure to instruct your broker, bank or other nominee on how to vote your Shares will have no effect on the vote to adopt the proposed resolutions set forth in the proxy statement, but your Shares will be considered present or represented for purposes of determining whether a quorum is present at the Extraordinary General Meeting.

If you have any questions or need assistance voting your Shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200 toll free.

On behalf of the Wright Board, I thank you for your support and appreciate your consideration of this matter.

 

Sincerely,
LOGO

James A. Lightman

Senior Vice President, General Counsel and Secretary

March 20, 2020


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As part of our precautions regarding the coronavirus (COVID-19) outbreak, we are sensitive to the public health and travel concerns that our shareholders may have, as well as any protocols that governments may impose. We are planning for the possibility that we may need to take additional steps regarding how the Extraordinary General Meeting is conducted, including via virtual attendance on the Internet, and we will announce any decision in advance via a press release and by posting details on our website that will also be filed with the SEC as proxy material.

Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in this document; passed upon the merits or fairness of the transactions described in this document; or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

The enclosed proxy statement is dated March 20, 2020 and, together with the enclosed form of proxy card, is first being mailed to shareholders of Wright on or about March 20, 2020.


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YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU EXPECT TO ATTEND THE EXTRAORDINARY GENERAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) THROUGH THE INTERNET OR (2) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the Extraordinary General Meeting. If your Shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction card furnished to you by such broker, bank or other nominee, which is considered the shareholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the Shares in your account. Your broker, bank or other nominee cannot vote on any of the resolutions included in the agenda for this Extraordinary General Meeting without your instructions.

If you fail to return your proxy card, to grant your proxy electronically over the Internet or to attend the Extraordinary General Meeting, your Shares will not be considered present or represented for purposes of determining whether a quorum is present at the Extraordinary General Meeting. If you are a shareholder of record, voting in person at the Extraordinary General Meeting will revoke any proxy that you previously submitted. If you hold your Shares through a broker, bank or other nominee, you must obtain from the record holder a valid legal proxy issued in your name in order to vote in person at the Extraordinary General Meeting.

Admittance of shareholders and acceptance of written voting proxies shall be governed by Dutch law. Please take note of the requirements for admittance set forth in this proxy statement. Failure to provide the requested documents at the door or failure to comply with the procedures for the Extraordinary General Meeting may prevent shareholders from being admitted to the meeting.

We encourage you to read this proxy statement, including all documents incorporated by reference into this proxy statement, and annexes to this proxy statement, carefully and in their entirety. If you have any questions concerning the Offer, the Post-Offer Reorganization (as defined in the Purchase Agreement), the Extraordinary General Meeting Proposals, the Extraordinary General Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your Shares, please contact our proxy solicitor:

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902

Banks and Brokerage Firms Call: (203) 658-9400

Shareholders Call Toll Free: (800) 662-5200

Email: WMGI@investor.morrowsodali.com

 

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TABLE OF CONTENTS

 

SUMMARY

     1  

Parties Involved in the Offer and the Other Transactions Contemplated by the Purchase Agreement

     1  

Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement

     2  

Effect on Wright if the Offer is Not Completed

     4  

Offer Consideration

     5  

Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement

     5  

Change of Recommendation

     5  

Opinion of Wright’s Financial Advisor to the Wright Board

     5  

No Solicitation

     6  

Conditions to the Closing of the Offer

     7  

Termination of the Purchase Agreement

     7  

Expenses

     9  

Specific Performance

     9  

Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement

     9  

Treatment of Equity and Equity-Based Awards

     10  

Treatment of Certain Wright Indebtedness

     11  

Certain Material Tax Consequences

     11  

Appraisal Rights

     12  

Regulatory Approvals; Efforts

     13  

Litigation Related to the Transactions

     13  

Market Prices and Dividend Data

     13  

QUESTIONS AND ANSWERS

     14  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     25  

THE EXTRAORDINARY GENERAL MEETING

     26  

EXPLANATORY NOTES TO THE AGENDA OF THE EXTRAORDINARY GENERAL MEETING

     29  

THE OFFER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT

     47  

Parties Involved in the Offer and the Other Transactions Contemplated by the Purchase Agreement

     47  

Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement

     47  

Effect on Wright if the Offer is Not Completed

     52  

Offer Consideration

     52  

Background of the Offer

     53  

 

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Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement

     59  

Opinion of Wright’s Financial Advisor to the Wright Board

     64  

Certain Wright Management Projections

     76  

Purchase Agreement

     78  

Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement

     100  

Acceptance Time of the Offer and the Transactions

     111  

Litigation Related to the Transactions

     111  

Certain Material Tax Consequences

     111  

Appraisal Rights

     117  

Financing of the Offer and the Other Transactions Contemplated by the Purchase Agreement

     117  

DIRECTORS AND EXECUTIVE OFFICERS

     119  

BOARD STRUCTURE AND COMPOSITION

     126  

APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

     132  

AUDIT, AUDIT-RELATED, TAX, AND ALL OTHER FEES

     133  

PRE-APPROVAL POLICIES AND PROCEDURES

     134  

COMPENSATION DISCUSSION AND ANALYSIS

     135  

EXECUTIVE COMPENSATION

     156  

DIRECTOR COMPENSATION

     177  

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     181  

MARKET PRICES AND DIVIDEND DATA

     182  

SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     183  

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

     186  

FUTURE SHAREHOLDER PROPOSALS

     187  

WHERE YOU CAN FIND MORE INFORMATION

     188  

MISCELLANEOUS

     190  

Annex A

     A-1  

Annex B

     B-1  

Annex C

     C-1  

Annex D

     D-1  

Annex E

     E-1  

Annex F

     F-1  

Annex G

     G-1  

Annex H

     H-1  

Annex I

     I-1  

 

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SUMMARY

This summary highlights selected information from this proxy statement related to (i) the previously announced offer made by Stryker B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands (“Purchaser”), and an indirect, wholly-owned subsidiary of Stryker Corporation, a Michigan corporation (“Stryker”), to purchase all of the outstanding ordinary shares, par value €0.03 per share of Wright (the “Shares”) at a purchase price of $30.75 per Share, without interest and less applicable withholding taxes, to the holders thereof, payable in cash (such amount or any higher amount per Share paid pursuant to the Offer (as defined below), the “Offer Consideration”) pursuant to the Purchase Agreement, dated November 4, 2019, (as it may be amended from time to time, the “Purchase Agreement”) by and among Wright, Purchaser and Stryker, upon the terms and subject to the conditions set forth in an Offer to Purchase, dated December 13, 2019 (as amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal (as amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”), (ii) the Extraordinary General Meeting Proposals (as defined below) and (iii) the Purchase Agreement. This summary may not contain all of the information that is important to you. To understand the Offer, the Purchase Agreement and the Extraordinary General Meeting Proposals more fully and for a more complete description of the legal terms of the transactions, you should read carefully this entire proxy statement, the annexes to this proxy statement, including the Purchase Agreement, and the documents incorporated by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under “Where You Can Find More Information” beginning on page 188. The Purchase Agreement is attached as Annex A to this proxy statement.

Except as otherwise specifically noted in this proxy statement or as the context otherwise requires, “Wright,” or “we,” “our,” “us” and similar words in this proxy statement refer to Wright Medical Group N.V., including, in certain cases, its subsidiaries.

Parties Involved in the Offer and the Other Transactions Contemplated by the Purchase Agreement (page 47)

Wright Medical Group N.V.

Wright is a public limited liability company (naamloze vennootschap) organized under the laws of the Netherlands. Wright is a global medical device company focused on extremities and biologics. Wright has an official registered office and principal executive offices located at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, telephone number +31 20 521 4777. The Shares are traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WMGI.”

Stryker Corporation

Stryker is a Michigan corporation. Stryker is one of the world’s leading medical technology companies and, together with its customers, is driven to make healthcare better. Stryker offers innovative products and services in orthopaedics, medical and surgical, and neurotechnology and spine that help improve patient and hospital outcomes. Stryker’s common stock is traded on the New York Stock Exchange under the symbol “SYK.”

Stryker B.V.

Purchaser is a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands. Purchaser was formed for the purpose of negotiating the Purchase Agreement and structuring and effecting the transactions contemplated thereby, including the Offer and the Post-Offer Reorganization (as defined below). Purchaser is a direct, wholly-owned subsidiary of Stryker Delaware, Inc., a Delaware corporation (“Stryker Delaware”).



 

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Stryker Delaware, Inc.

Stryker Delaware is a Delaware corporation. Stryker Delaware was formed for the purpose of structuring and effecting the transactions contemplated by the Purchase Agreement, including the Offer and the Post-Offer Reorganization (as defined below). Stryker Delaware is a direct, wholly-owned subsidiary of Stryker.

The address of Stryker’s and Stryker Delaware’s principal executive offices is 2825 Airview Boulevard, Kalamazoo, Michigan, USA, and the telephone number at such address is +1 (269) 385-2600. The address of Purchaser’s principal executive offices is Herikerbergweg 145, Mercurius Building, 2nd floor, 1101 CN, Amsterdam, the Netherlands, and the telephone number at such address is +31 20 808 3777.

Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement (page 47)

As previously announced, on December 13, 2019, Purchaser commenced the Offer. Unless the Offer is earlier terminated, the Offer will expire at 5:00 p.m., New York City time, on April 30, 2020 (the “Expiration Time,” unless the Offer is extended in accordance with the Purchase Agreement, in which event “Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire).

Following the later of the Offer Closing and the closing of any Subsequent Offering Period (as defined below), as it may be extended by the Minority Exit Offering Period (each as defined below), Stryker or Purchaser intend to effectuate or cause to be effectuated a corporate reorganization of or involving Wright and its subsidiaries (the “Post-Offer Reorganization”). The Post-Offer Reorganization will utilize processes available to Purchaser under Dutch and other applicable law aimed at strengthening Stryker’s direct or indirect control over Wright or its assets and business operations. More specifically, the Asset Sale and Liquidation, the Mergers and the Compulsory Acquisition (each as defined below) would ensure that Purchaser or one of its affiliates becomes the owner of all or substantially all of Wright’s business operations from and after the consummation of such Post-Offer Reorganization. In the event the Asset Sale and Liquidation, the Mergers or the Compulsory Acquisition are consummated, Wright will either be liquidated, disappear or become wholly owned by Purchaser. For purposes of this summary, “Subsequent Offering Period” means a subsequent offering period of at least 10 business days in accordance with Rule 14d-11 promulgated under the United States Securities Exchange Act of 1934 (the “Exchange Act”) and in accordance with the Purchase Agreement. In the event that prior to the expiration of any such Subsequent Offering Period, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Asset Sale, Purchaser will (and Stryker will cause Purchaser to) extend the Subsequent Offering Period for at least five business days to permit any remaining minority shareholders to tender their Shares in exchange for the Offer Consideration (such extension, the “Minority Exit Offering Period”). In the event that promptly following the Expiration Time, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Mergers (as defined below), Purchaser will not be required to provide either a Subsequent Offering Period or Minority Exit Offering Period, but may do so if Purchaser chooses.

The Post-Offer Reorganization may involve, among other restructuring options specified in the Purchase Agreement, one of the following (or any combination thereof):

 

   

the sale, transfer and assumption of the business of Wright, including substantially all of the assets and liabilities of Wright, to or by Purchaser (or an affiliate of Purchaser) (the “Asset Sale”) followed by the liquidation and dissolution of Wright (the “Liquidation”) in accordance with applicable Dutch procedures, with Purchaser (or an affiliate of Purchaser) providing certain funds and indemnities to enable Wright’s liquidator to make an immediate advance liquidation distribution (the “Second Step Distribution”);



 

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a compulsory acquisition procedure (uitkoopprocedure) of non-tendered Shares as provided by Dutch law (the “Compulsory Acquisition”);

 

   

a series of mergers whereby (i) Wright will merge with and into a Luxembourg société anonyme that is a direct, wholly-owned subsidiary of Wright (“Wright Luxembourg”) with Wright Luxembourg surviving the merger (the “First-Step Merger”), (ii) Wright Luxembourg will merge with and into a Bermuda exempted company that is a direct, wholly-owned subsidiary of Wright Luxembourg (“Wright Bermuda”) with Wright Bermuda surviving the merger (the “Second-Step Merger”) and (iii) a Bermuda exempted company formed by Stryker as a wholly-owned subsidiary of Purchaser will merge with and into Wright Bermuda with Wright Bermuda surviving the merger (the “Third-Step Merger” and, together with the First-Step Merger and the Second-Step Merger, the “Mergers”); or

 

   

a statutory spin-off (afsplitsing) of certain assets and liabilities of Wright to a wholly-owned subsidiary of Wright (the “Demerger”).

For more information on the Offer and the Post-Offer Reorganization please see the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement,” beginning on page 47.

The Extraordinary General Meeting is being called in connection with the Offer and the Post-Offer Reorganization in order to provide information regarding the Offer and for Wright shareholders to vote on the following:

 

   

resolutions for the conditional appointment of Spencer S. Stiles as executive director on the Board of Directors (bestuur) of Wright (the “Wright Board”) and each of William E. Berry, Jr., Dean H. Bergy, Jeanne M. Blondia and David G. Furgason as non-executive directors on the Wright Board, each of whom has been designated by Purchaser in accordance with the Purchase Agreement and has been nominated pursuant to a binding nomination by the Wright Board (the “Director Resolutions”);

 

   

resolutions for the conditional acceptance of the resignations of each of Robert J. Palmisano, J. Patrick Mackin, John L. Miclot, Kevin O’Boyle, Amy S. Paul, Richard F. Wallman and Elizabeth H. Weatherman as members of the Wright Board (the “Resignation Resolutions”);

 

   

a resolution granting full and final discharge to each member of the Wright Board for his or her acts of management or supervision, as applicable, up to the date of the Extraordinary General Meeting and effective as of the Acceptance Time (as defined below) (the “Discharge Resolution”);

 

   

a resolution conditionally approving the Asset Sale as required under article 2:107a of the Dutch Civil Code;

 

   

a resolution conditionally approving (i) the dissolution (ontbinden) of Wright, (ii) the appointment of Stichting Vereffening Wright Medical Group as the liquidator of Wright, (iii) the appointment of Purchaser as the custodian of the books and records of Wright, and (iv) the reimbursement by Wright of the liquidator’s reasonable salary and costs (subject to approval of such reimbursement by the Independent Directors (as defined in the Purchase Agreement)) (together with the resolution above conditionally approving the Asset Sale, the “Asset Sale Resolutions”);

 

   

a resolution approving (i) the amendment of Wright’s articles of association to fix the amount of compensation that dissenting shareholders may claim in connection with the proposed Mergers and (ii) the authorization of any and all lawyers and deputy civil law notaries practicing at Stibbe N.V., Amsterdam, the Netherlands or Houthoff Coöperatief U.A., Amsterdam, the Netherlands (collectively, the “Authorized Notaries”), to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to this proxy statement as Annex D (collectively, the “Dissenting Shareholder Resolution”);



 

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a resolution conditionally approving the Mergers, including the First-Step Merger pursuant to the common draft terms of the cross-border merger (the “Common Draft Terms of Merger”), a copy of which is attached to this proxy statement as Annex E of this proxy statement (the “Merger Resolution” and, together with the Dissenting Shareholder Resolutions, the “Merger Resolutions”);

 

   

a resolution approving (i) the amendment of Wright’s articles of association to authorize the Wright Board to resolve on a statutory demerger to an entity wholly-owned by Wright and (ii) the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to this proxy statement as Annex F (collectively, the “Demerger Resolution”);

 

   

resolutions conditionally approving (a) the conversion of Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) and (b) the amendment of Wright’s articles of association as set forth in Annex G of this proxy statement in connection with the conversion of Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) and the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment (collectively, the “Conversion Resolutions”);

 

   

a resolution conditionally approving (i) the amendment of Wright’s articles of association as set forth in Annex H of this proxy statement in connection with the delisting of the Shares on Nasdaq and (ii) the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment (collectively, the “Delisting Articles Amendment Resolution”);

 

   

a resolution conditionally approving (i) the amendment of Wright’s articles of association to align Wright’s financial year with that reckoned by Purchaser and (ii) the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to this proxy statement as Annex I (collectively, the “Financial Year Articles Amendment Resolution” and, together with the Director Resolutions, the Resignation Resolutions, the Conversion Resolutions, and the Delisting Articles Amendment Resolution, the “Governance Resolutions”); and

 

   

a resolution to approve, by means of a non-binding advisory vote, compensation that will or may become payable by Wright to its named executive officers in connection with the completion of the Offer (the “Non-Binding Vote on Executive Compensation Proposal” and, collectively with the Discharge Resolution, the Asset Sale Resolutions, the Merger Resolutions, the Demerger Resolution, and the Governance Resolutions, the “Extraordinary General Meeting Proposals”).

Each of the Extraordinary General Meeting Proposals, as well as the conditions to the effectiveness of each of the Extraordinary General Meeting Proposals, is more fully described in the “Explanatory Notes to the Agenda of the Extraordinary General Meeting,” beginning on page 29.

Effect on Wright if the Offer is Not Completed (page 52)

If the Offer is not completed, Wright shareholders will not receive the Offer Consideration pursuant to the Offer and the Extraordinary General Meeting Proposals that are adopted will not be implemented. Instead, Wright would remain an independent public company, your Shares would continue to be listed and traded on Nasdaq and registered under the Exchange Act and Wright would continue to file periodic reports with the United States Securities and Exchange Commission (the “SEC”).

Under specified circumstances, Wright will be required to pay Stryker a termination fee in an amount equal to $150 million, as described in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Termination Fee,” beginning on page 98.



 

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Offer Consideration (page 52)

If you tender your Shares in the Offer, upon completion of the Offer, you will be entitled to receive the Offer Consideration of $30.75 per Share, without interest and less applicable withholding taxes, payable in cash, upon the terms and subject to the conditions set forth in the Purchase Agreement and the Offer to Purchase. For example, if you own 100 Shares, you will receive $3,075 in cash in exchange for your Shares, without interest and less applicable withholding taxes, upon the terms and subject to the conditions set forth in the Purchase Agreement and the Offer to Purchase. If you are the record owner of your Shares and you tender your Shares directly to American Stock Transfer & Trust Company, LLC (the “Depositary”), you will not have to pay brokerage fees, commissions, or similar expenses. If you own your Shares through a broker, dealer, commercial bank, trust company, or other nominee and your broker, dealer, commercial bank, trust company, or other nominee tenders your Shares on your behalf, your broker, dealer, commercial bank, trust company, or nominee may charge you a fee for doing so. You should consult your broker, dealer, commercial bank, trust company, or nominee to determine whether any charges will apply.

Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement (page 59)

The Wright Board, after considering various factors described in this proxy statement under the caption “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement,” beginning on page 59, has unanimously, among other things (a) determined that the terms of the Purchase Agreement, the Offer, certain of the Post-Offer Reorganization transactions (including the Asset Sale, the Liquidation and Second Step Distribution and the Mergers (each as defined in the Purchase Agreement)) and the other transactions contemplated by the Purchase Agreement are in the best interests of Wright, its businesses and its shareholders, employees and other relevant stakeholders, (b) approved and adopted the Purchase Agreement and (c) resolved, on the terms and subject to the conditions set forth in the Purchase Agreement, to recommend that Wright’s shareholders tender their Shares into the Offer and approve and adopt the matters to be proposed for consideration and approval by Wright’s shareholders at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote (i) “FOR” each of the Governance Resolutions, (ii) “FOR” the Discharge Resolution, (iii) “FOR” each of the Asset Sale Resolutions, (iv) “FOR” each of the Merger Resolutions, (v) “FOR” the Demerger Resolution and (vi) “FOR” the Non-Binding Vote on Executive Compensation Proposal.

Change of Recommendation (page 63)

The Wright Board has unanimously recommended that the holders of Wright Shares vote “FOR” the Extraordinary General Meeting Proposals. The Purchase Agreement provides that the Wright Board may not change its recommendation, or take other actions constituting a Change of Board Recommendation (as defined in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase AgreementRecommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase AgreementChange of Recommendation,” beginning on page 63) except in certain circumstances. For more information, see the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase AgreementRecommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase AgreementChange of Recommendation,” beginning on page 63.

Opinion of Wright’s Financial Advisor to the Wright Board (page 64)

The Wright Board retained Guggenheim Securities, LLC (“Guggenheim Securities”) as its financial advisor in connection with the potential sale of Wright. Guggenheim Securities rendered an opinion to the



 

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Wright Board to the effect that, as of November 3, 2019 and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (other than in the case of any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration) was fair, from a financial point of view, to such holders. The full text of Guggenheim Securities’ written opinion, which is attached as Annex B to this proxy statement and which you should read carefully and in its entirety, is subject to the assumptions, limitations, qualifications and other conditions contained in such opinion and is necessarily based on economic, capital markets and other conditions, and the information made available to Guggenheim Securities, as of the date of such opinion.

Guggenheim Securities’ opinion was provided to the Wright Board (in its capacity as such) for its information and assistance in connection with its evaluation of the Offer Consideration. Guggenheim Securities’ opinion and any materials provided in connection therewith did not constitute a recommendation to the Wright Board with respect to the transactions contemplated by the Purchase Agreement, nor does Guggenheim Securities’ opinion or the summary of its underlying financial analyses elsewhere in this proxy statement constitute advice or a recommendation to any holder of Shares as to whether to tender any such shares pursuant to the Offer or how to vote or act in connection with the transactions contemplated by the Purchase Agreement or otherwise. Guggenheim Securities’ opinion addresses only the fairness, from a financial point of view and as of the date of such opinion, of the Offer Consideration to be received by holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (excluding any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration) to the extent expressly specified in such opinion and does not address (i) any other term, aspect or implication of (a) the transactions contemplated by the Purchase Agreement (including, without limitation, the form or structure of the Offer, any Post-Offer Reorganization or any other transaction contemplated by the Purchase Agreement or the implementation of any of the foregoing) or the Purchase Agreement or (b) any other agreement, transaction document or instrument contemplated by the Purchase Agreement or to be entered into or amended in connection with the transactions contemplated by the Purchase Agreement or (ii) the fairness, financial or otherwise, of the transactions contemplated by the Purchase Agreement to, or of any consideration to be paid to or received by, the holders of any other class of securities, creditors or other constituencies of Wright.

For a description of the opinion that the Wright Board received from Guggenheim Securities, see the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Opinion of Wright’s Financial Advisor to the Wright Board,” beginning on page 64.

No Solicitation (page 88)

Wright has agreed that it will not, will cause its subsidiaries not to, and will instruct (and use it reasonable best efforts to cause) its representatives not to:

 

   

directly or indirectly initiate, solicit or knowingly encourage or knowingly facilitate (including by way of providing information) any inquiries, proposals or offers, or the making of any submission or announcement of any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal or any inquiry, proposal or offer that, in each case, constitutes or would reasonably be expected to lead to an Acquisition Proposal (as defined in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase AgreementPurchase Agreement—No Solicitation,” beginning on page 88);

 

   

directly or indirectly engage in, enter into or participate in any discussions or negotiations with any person (or its representatives) making an Acquisition Proposal or inquiry, proposal or offer that, in each case, constitutes or would reasonably be expected to lead to an Acquisition Proposal; or



 

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provide any information or afford access to the properties of Wright or its subsidiaries to, or take any other action to knowingly assist or knowingly encourage or knowingly facilitate any effort by any person (other than Stryker, Purchaser or any representatives of Stryker or Purchaser) in a manner that would reasonably be expected to lead to an Acquisition Proposal or in connection with or in response to any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal.

Conditions to the Closing of the Offer (page 98)

The Offer is conditioned upon, among other things, (a) the Purchase Agreement not having been terminated in accordance with its terms and (b) the satisfaction or waiver (to the extent permitted by the Purchase Agreement and applicable law) of the following as of the scheduled Expiration Time: (i) the Minimum Condition (as its threshold may be lowered pursuant to the Purchase Agreement); (ii) the Regulatory Clearance Condition; (iii) the Legal Restraints Condition; (iv) the Governance Resolutions Condition; and (v) the Material Adverse Effect Condition, each defined in the section of this proxy statement under the caption “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement,” beginning on page 47. The Offer is not subject to a financing condition.

Termination of the Purchase Agreement (page 96)

The Purchase Agreement may be terminated and the transactions contemplated by the Purchase Agreement may be abandoned at any time prior to the Acceptance Time (as defined in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement,” beginning on page 47):

 

   

by mutual written consent of Wright and Stryker;

 

   

by either Wright or Stryker, if:

 

   

any court or other governmental body of competent jurisdiction has issued a final judgment, injunction order, decree or ruling or taken any other final action permanently restraining, enjoining or otherwise prohibiting the Offer, Asset Sale, Compulsory Acquisition, Liquidation, Second Step Distribution, the Mergers or any other transaction contemplated by the Purchase Agreement, and such judgment, injunction, order, decree, ruling or other action has become final and non-appealable (a “Judgment Termination”), provided that the Judgment Termination will not be available to any party if the failure of such party to perform or comply with any of its obligations under the Purchase Agreement in any material respect has been the principal cause of or principally resulted in the issuance of such judgment, injunction, order, decree or ruling or the taking of such other action;

 

   

the Acceptance Time has not occurred on or prior to November 4, 2020 (subject to automatic extension to February 4, 2021 if, at such earlier date, all conditions to the closing of the Offer have been satisfied or waived, other than the Regulatory Clearance Condition and the Minimum Condition) (such date and time, including any automatic extension thereof, the “Outside Date” and such termination, an “Outside Date Termination”), provided that the right to an Outside Date Termination will not be available to any party if the failure of such party to perform or comply with any of its obligations under the Purchase Agreement in any material respect has been the principal cause of or principally resulted in the failure of the Acceptance Time to have occurred on or before the Outside Date;

 

   

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terminated pursuant to its terms and the Purchase Agreement without Purchaser having accepted for purchase any Shares validly tendered (and not withdrawn) pursuant to the Offer (a “Condition Failure Termination”), provided that the Condition Failure Termination will not be available to any party if the failure of such party to perform or comply with any of its obligations under the Purchase Agreement in any material respect has been the principal cause of or principally resulted in the non-satisfaction of any such condition to the Offer or the termination of the Offer pursuant to its terms without Purchaser having accepted for purchase any Shares validly tendered (and not withdrawn) pursuant to the Offer; or

 

   

the Extraordinary General Meeting has been held and been concluded and (a) the Governance Resolutions have not been adopted, (b) the Asset Sale Resolutions have not been adopted, (c) the Merger Resolutions have not been adopted or (d) the Demerger Resolution has not been adopted (an “EGM Failure Termination”);

 

   

by Stryker:

 

   

there has been a breach of any covenant or agreement made by Wright in the Purchase Agreement, or any representation or warranty of Wright is inaccurate or becomes inaccurate after the date of this Agreement, and such breach or inaccuracy gives rise to a failure of the Wright No Breach Condition (as defined below), and such breach or inaccuracy is not capable of being cured within 30 days following receipt by Wright of written notice from Stryker or Purchaser of such breach or inaccuracy or, if such breach or inaccuracy is capable of being cured within such period, it has not been cured within such period (a “Wright Breach Termination”), provided the Wright Breach Termination shall not be available if Stryker or Purchaser is then in material breach of any of its representations, warranties, covenants or agreements under the Purchase Agreement; or

 

   

(a) the Wright Board or any committee thereof effects a Change of Board Recommendation or (b) the Wright Board or any committee thereof or Wright breaches in any material respect the non-solicitation provisions of the Purchase Agreement (a “Change of Board Recommendation Termination”);

 

   

by Wright:

 

   

if (a) Purchaser fails to commence the Offer in violation of the Purchase Agreement or (b) Purchaser, in violation of the terms of the Purchase Agreement, fails to accept for purchase Shares validly tendered (and not withdrawn) pursuant to the Offer (a “Failed Offer Termination”), provided, however, that the Failed Offer Termination will not be available if Wright has breached its obligations under the Purchase Agreement in any manner that is the principal cause of or principally resulted in the failure of the Offer to so commence;

 

   

if there has been a breach of any covenant or agreement made by Stryker or Purchaser in the Purchase Agreement, or any representation or warranty of Stryker or Purchaser is inaccurate or becomes inaccurate after the date of the Purchase Agreement, and such breach or inaccuracy gives rise to a Purchaser Material Adverse Effect, and such breach or inaccuracy is not capable of being cured within 30 days following receipt by Stryker or Purchaser of written notice from Wright of such breach or inaccuracy or, if such breach or inaccuracy is capable of being cured within such period, it has not been cured within such period (a “Purchaser Breach Termination”), provided that the Purchaser Breach Termination will not be available if Wright is then in material breach of any of its representations, warranties, covenants or agreements under the Purchase Agreement; or

 

   

in order for Wright to enter into a definitive Alternative Acquisition Agreement with respect to a Superior Proposal to the extent permitted by, and subject to the applicable terms and conditions of, the non-solicitation provisions of the Purchase Agreement (an “Alternative Acquisition Agreement Termination”).



 

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Expenses

All fees, costs and expenses incurred in connection with the Purchase Agreement and the transactions contemplated by the Purchase Agreement will be paid by the party incurring such fees, costs and expenses, whether or not the transactions contemplated by the Purchase Agreement are consummated, except that Stryker will reimburse Wright for any reasonable and documented out-of-pocket costs or expenses incurred by Wright in connection with any financing Stryker pursues in connection with the transactions contemplated by the Purchase Agreement.

Specific Performance (page 98)

Stryker, Purchaser and Wright have agreed that in the event of any breach of the Purchase Agreement, irreparable harm would occur that monetary damages could not make whole and that accordingly each party will be entitled, in addition to any other remedy to which it may be entitled at law or in equity, to compel specific performance to prevent or restrain breaches or threatened breaches of the Purchase Agreement in any action without the posting of a bond or undertaking.

Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement (page 100)

When considering the recommendation of the Wright Board that you vote to adopt each of the Extraordinary General Meeting Proposals, you should be aware that certain members of Wright management and the Wright Board may be deemed to have certain interests in the Offer and the other transactions contemplated by the Purchase Agreement that are different from or in addition to the interests of Wright shareholders generally. The Wright Board was aware of these interests and considered that such interests may be different from or in addition to the interests of Wright shareholders generally, among other matters, in determining to approve the Purchase Agreement, the Offer and the other transactions contemplated by the Purchase Agreement and in recommending that the Extraordinary General Meeting Proposals be adopted by the shareholders of Wright. These interests may include the following:

 

   

Continued exculpation, indemnification and advancement of expenses, and directors’ and officers’ liability insurance through six years following the Offer Closing (as defined below), to be provided by Wright or which Stryker will cause Wright to provide.

 

   

Continued services related to the administrative process of filing taxes in the Netherlands to be provided by Stryker.

 

   

Vesting, in full, at the Acceptance Time, of each Stock Option (as defined below) whether held by directors, executive officers or other employees, that is outstanding and unvested immediately prior to the Acceptance Time (except, if the Offer Closing (as defined below) does not occur prior to July 1, 2020, for 2020 Stock Options (as defined below) will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 Stock Option that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor).

 

   

Cancellation of all unexercised Stock Options (as defined below) that are outstanding and vested (whether held by directors, executive officers or other employees) immediately prior to the time that all Shares validly tendered and not properly withdrawn pursuant to the Offer as of the Acceptance Time are paid for by Purchaser (such time of payment, the “Offer Closing”) in exchange for the right to receive an amount in cash (without interest and less applicable withholding taxes) equal to the product of (i) the excess, if any, of the Offer Consideration over the applicable per Share exercise price of the respective Stock Option multiplied by (ii) the total number of Shares subject to the unexercised Stock Option held immediately prior to the Offer Closing.



 

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Vesting, in full, at the Acceptance Time, of each RSU (as defined below) that is outstanding and unvested immediately prior to the Acceptance Time (whether held by directors, executive officers or other employees) and of each PSU (as defined below) that is outstanding and unvested immediately prior to the Acceptance Time, with any applicable performance conditions associated with such PSUs deemed to have been achieved at maximum performance.

 

   

Cancellation of all RSUs that are vested and PSUs in exchange for the right to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number of Shares deliverable under the RSUs or PSUs held immediately prior to the Offer Closing multiplied by the Offer Consideration.

 

   

Payment of certain severance and change of control payments, and provision of certain benefits and services to executive officers upon a qualifying termination pursuant to individual employment or separation agreements.

 

   

Certain potential employment or consultancy, compensation, severance or other employee or consultant benefits arrangements between certain executive officers, Stryker and Purchaser to be effective following the Offer Closing (but for which no definitive agreements or arrangements have been executed).

Treatment of Equity and Equity-Based Awards

The Purchase Agreement provides that each option to acquire Shares, other than awards under Wright’s Amended and Restated Employee Stock Purchase Plan (the “Wright ESPP”) (each such option, a “Stock Option”) (whether held by directors, executive officers or other employees) that is outstanding and unvested immediately prior to the Acceptance Time will vest in full at the Acceptance Time (except, if the Offer Closing does not occur prior to July 1, 2020, for Stock Options granted after July 1, 2020 (“2020 Stock Options”), which will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 Stock Option that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor). All unexercised Stock Options outstanding (whether held by directors, executive officers or other employees) that are vested immediately prior to the Offer Closing will be cancelled, and, in exchange for such cancelled Stock Options, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the product of (i) the excess, if any, of the Offer Consideration over the per Share exercise price of the respective Stock Option multiplied by (ii) the total number of Shares subject to the unexercised Stock Option they hold immediately prior to the Offer Closing.

The Purchase Agreement provides that each restricted stock unit (“RSU”) that is outstanding and unvested immediately prior to the Acceptance Time (whether held by directors, executive officers or other employees) will vest in full at the Acceptance Time (except, if the Offer Closing does not occur prior to July 1, 2020, for RSUs granted after July 1, 2020 (“2020 RSUs”), which will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 RSU that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor). At the Offer Closing, all outstanding RSUs that are vested will be cancelled and, in exchange for such cancelled RSUs, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number of Shares deliverable under the RSUs they hold immediately prior to the Offer Closing multiplied by the Offer Consideration.

The Purchase Agreement provides that each performance share unit (“PSU”) that is outstanding and unvested immediately prior to the Acceptance Time will vest in full at the Acceptance Time, with any applicable performance conditions associated with such PSUs deemed to have been achieved at maximum performance. At



 

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the Offer Closing, PSUs will be cancelled and, in exchange for such cancelled PSUs, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number of Shares deliverable under the PSUs they hold immediately prior to the Offer Closing multiplied by the Offer Consideration.

Treatment of Certain Wright Indebtedness (page 95)

Wright has agreed not to make any change to the terms of the indentures governing its Cash Convertible Senior Notes due 2020 (which matured on February 15, 2020), Cash Convertible Senior Notes due 2021 and Cash Convertible Senior Notes due 2023 (collectively, the “Convertible Notes”) without the prior written consent of Stryker. At the Offer Closing, Wright will take all necessary action to perform and comply with all of its obligations under the indentures governing its Convertible Notes within the time periods required thereby. In addition, Wright will take all commercially reasonable actions requested by Stryker in connection with making elections under, amending, obtaining waivers, and/or unwinding or otherwise settling the hedge and warrant transactions associated with the Convertible Notes.

Certain Material Tax Consequences (page 111)

Certain U.S. Federal Income Tax Consequences

The receipt of cash in exchange for your Shares pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period) or the Post-Offer Reorganization generally will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or other tax laws.

We urge you to consult your own tax advisor as to the particular tax consequences to you of the Offer and the Post-Offer Reorganization.

Certain Dutch Tax Consequences

For non-Dutch resident Wright shareholders who or that:

 

  a)

are not individuals and do not have, nor are deemed to have, directly or indirectly, a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief aanmerkelijk belang) in Wright that is held with the principal purpose or one of the principal purposes of avoiding income tax at the level of another party and such interest is held as part of an artificial arrangement or transaction or series of arrangements or combination of transactions, whereby such arrangement or series of arrangements or transaction or combination of transactions is considered artificial if it is not set up on the basis of valid commercial motives and whereby an arrangement or transaction may consists of several steps or parts, and (i) do not derive profits from an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands to which permanent establishment or permanent representative the Shares are attributable or (ii) are not, other than by way of securities, entitled to a share in the profits of an enterprise or a co-entitlement to the net worth of an enterprise, which is effectively managed in the Netherlands and to which enterprise the Shares are attributable; and

 

  b)

are individuals and do not have, nor are deemed to have, directly or indirectly, a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief aanmerkelijk belang) in Wright that is not part of the assets of an enterprise (behoort niet tot het vermogen van een onderneming) and (i) do not derive profits from an enterprise or an interest in an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands to which



 

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  permanent establishment or permanent representative the Shares are attributable, (ii) do not realize income or gains with respect to the Shares that qualify as income from miscellaneous activities in the Netherlands, which include activities with respect to the Shares that exceed regular, active portfolio management or (iii) are not, other than by way of securities, entitled to a share in the profits of an enterprise that is effectively managed in the Netherlands and to which enterprise the Shares are attributable,

any gains realized in respect of Shares tendered pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period) or as a result of the Post-Offer Reorganization will generally not be subject to Dutch corporate or personal income tax.

Depending on the circumstances, Dutch resident Wright shareholders and certain non-Dutch resident Wright shareholders may be subject to Dutch corporate or personal income tax on any gains realized pursuant to the Offer or the Post-Offer Reorganization.

In the event that the Mergers are implemented and a Wright shareholder exercises a Merger Withdrawal Right (as defined below), then any cash compensation paid to such withdrawing Wright shareholder will be subject to Dutch dividend withholding tax (dividendbelasting) at the statutory rate of 15% to the extent that the amount of the cash compensation exceeds the average paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes subject to any exemption, reduction or refund that may be available to such withdrawing Wright shareholder. As a result, the net amount received by such withdrawing Wright shareholder may be lower than the amount that they would have received had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period).

If the Asset Sale and Liquidation are implemented, Dutch dividend withholding tax (dividendbelasting) will be due at the statutory rate of 15% to the extent that the amount of the Second Step Distribution exceeds the average paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes subject to any exemption, reduction or refund that may be available to a Wright shareholder. As a result, the net amount received by Wright shareholders in the Second Step Distribution for Shares that are not tendered in the Offer may be lower than the amount that they would have received had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period).

For a more detailed discussion of certain material Dutch tax consequences of the Offer and the Post-Offer Reorganization, please see the section of this proxy statement captioned “Certain Material Tax Consequences—Certain Dutch Tax Consequences,” beginning on page 114. We urge you to consult your own tax advisor as to the particular Dutch tax consequences to you of the Offer and the Post-Offer Reorganization.

Appraisal Rights (page 117)

Wright shareholders are not entitled under Dutch law or otherwise to appraisal rights with respect to the Offer.

In the event that the Compulsory Acquisition is permissible under applicable law and implemented, the Dutch Court will determine in its sole discretion the price to be paid for the non-tendered Shares, which price may be greater than, equal to or less than the Offer Consideration. Such price will be increased by statutory interest (“Dutch Statutory Interest”) accrued at the rate applicable in the Netherlands (currently 2% per annum). The non-tendering Wright shareholders do not have the right to commence a Compulsory Acquisition proceeding to oblige Stryker or Purchaser to buy their Shares.

In the event the Merger Resolutions are adopted at the Extraordinary General Meeting or any subsequent extraordinary general meeting, any Wright shareholder that votes against the Merger Resolutions may exercise



 

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its withdrawal right under Dutch law in connection with the First-Step Merger (the “Merger Withdrawal Right”) by filing a request for compensation in accordance with Section 2:333h of the Dutch Civil Code and the Common Draft Terms of Merger within one month after the date of the Extraordinary General Meeting or subsequent extraordinary general meeting at which the Merger Resolutions were adopted. If the Mergers are then implemented, such compensation would be paid in cash in connection with the consummation of the First-Step Merger. The Merger Resolutions include certain amendments to Wright’s articles of association that fix the cash compensation payable to any such Wright shareholders exercising the Merger Withdrawal Right at an amount per Share equal to the Offer Consideration without interest and less applicable withholding taxes.

Regulatory Approvals; Efforts (page 94)

Stryker, Purchaser and Wright have agreed to use their respective reasonable best efforts to promptly obtain all regulatory approvals required to consummate the Offer and the other transactions contemplated by the Purchase Agreement. These approvals include (i) the expiration or termination of the applicable waiting period (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”); (ii) approvals required by the Austrian Federal Competition Authority, (iii) approvals required by the Superintendence of Industry and Commerce of Colombia, (iv) approvals required by the German Act against Restraints of Competition, (v) approvals required by the General Authority for Competition for the Kingdom of Saudi Arabia and (iv) approvals required by the Competition and Markets Authority of the United Kingdom. Stryker and Wright filed their respective HSR Act notifications on December 16, 2019 and on December 31, 2019 received a request from the Federal Trade Commission of the United States for additional information and documentary material.

Litigation Related to the Transactions (page 111)

Two putative class action lawsuits have been filed against Wright and the members of the Wright Board, one in the United States District Court for the District of Delaware and the other in the United States District Court for the Eastern District of New York. Each lawsuit alleges that Wright and the members of the Wright Board violated federal securities laws and regulations by failing to disclose material information in the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC by Wright on December 13, 2019 in connection with the transactions contemplated by the Purchase Agreement.

Market Prices and Dividend Data (page 182)

The Offer Consideration of $30.75 per Share represents a premium of approximately 50% over the volume-weighted average closing price of Shares over the 30 calendar days ended October 31, 2019, the last trading day prior to speculation that Wright was exploring a sale of the company. On December 12, 2019, the last full trading day before the commencement of the Offer, the reported closing price of the Shares on Nasdaq was $29.44 per Share.

Wright has not previously declared or paid cash dividends and has no plans to declare or pay any dividends in the near future.



 

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QUESTIONS AND ANSWERS

The following questions and answers are intended to address some commonly asked questions regarding the Offer, the Extraordinary General Meeting Proposals, the Purchase Agreement and the Extraordinary General Meeting. The questions and answers may not address all questions that may be important to you as a shareholder of Wright. We encourage you to read carefully the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement, including the Purchase Agreement, and the documents we incorporate by reference in this proxy statement. You may obtain the documents and information incorporated by reference in this proxy statement without charge by following the instructions under the section of this proxy statement captioned “Where You Can Find More Information,” beginning on page 188.

 

Q:

Why am I receiving these materials?

 

A:

The Wright Board is furnishing this proxy statement and form of proxy card to the holders of Shares, in connection with the solicitation of proxies to be voted at the Extraordinary General Meeting.

 

Q:

When and where is the Extraordinary General Meeting?

 

A:

Wright’s Extraordinary General Meeting will be held on April 24, 2020 at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, at 12:00 p.m., central European time.

As part of our precautions regarding the coronavirus (COVID-19) outbreak, we are sensitive to the public health and travel concerns that our shareholders may have, as well as any protocols that governments may impose. We are planning for the possibility that we may need to take additional steps regarding how the Extraordinary General Meeting is conducted, including via virtual attendance on the Internet, and we will announce any decision in advance via a press release and by posting details on our website that will also be filed with the SEC as proxy material.

 

Q:

Who is entitled to vote at the Extraordinary General Meeting?

 

A:

Subject to certain restrictions under Dutch law, each Share entitles the holder thereof to one vote on each matter submitted to a vote at the Extraordinary General Meeting. You may vote if you are the shareholder of record of Shares as of the close of business on the Record Date, even if you have previously tendered your Shares in the Offer. The Wright Board has determined that Wright’s shareholders’ register (the “Register”) is the relevant register for determination, as of the Record Date, of the holders of Shares and others with meeting rights under Dutch law who are entitled to attend and, if relevant, vote at the Extraordinary General Meeting. Those who are holders of Shares or who otherwise have such meeting rights with respect to Shares on the Record Date and who are registered as such in the Register may attend the Extraordinary General Meeting and, if relevant, vote at such meeting in person, or authorize a third party to attend and, if relevant, vote at the meeting on their behalf through the use of a proxy.

 

Q:

May I attend the Extraordinary General Meeting and vote in person?

 

A:

Admittance of shareholders and acceptance of written voting proxies shall be governed by Dutch law. Only shareholders of record as of the Record Date, beneficial owners as of the Record Date, holders of valid proxies for the Extraordinary General Meeting and other persons admitted by the chairman of the meeting may attend the Extraordinary General Meeting. Persons who wish to attend the Extraordinary General Meeting must give notice in writing to the Wright Board of their intention to attend the Extraordinary General Meeting prior to April 17, 2020. The notice must contain the name and the number of Shares the person will represent in the meeting. All attendees must be prepared to identify themselves with a valid proof of identity for admittance. The additional items that attendees must bring depends on whether they are shareholders of record, beneficial owners or proxy holders.

A shareholder who holds Shares directly registered in such shareholder’s name in the Register (a “shareholder of record”) and who wishes to attend the Extraordinary General Meeting in person must bring a valid proof of identity.

 

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A person who holds a validly executed proxy entitling such person to vote on behalf of a shareholder of record and who wishes to attend the Extraordinary General Meeting in person must bring: (i) a valid proof of identity and (ii) the validly executed proxy naming such person as the proxy holder, signed by the shareholder of record.

A shareholder who holds Shares in “street name” through a broker, bank or other nominee (a “beneficial owner”) and who wishes to attend the Extraordinary General Meeting in person must bring: (i) a valid proof of identity and (ii) proof of beneficial ownership as of the close of business on the Record Date (e.g., a letter from the broker, bank or other nominee that is the record owner of such beneficial owner’s Shares, a brokerage account statement or the voting instruction form provided by the broker).

A person who holds a validly executed proxy entitling such person to vote on behalf of a beneficial owner of Shares and who wishes to attend the Extraordinary General Meeting in person must bring: (i) a valid proof of identity (ii) the validly executed proxy naming such person as the proxy holder, signed by the beneficial owner of the Shares and (iii) proof of beneficial ownership of the relevant beneficial owner as of the close of business on the Record Date (e.g., a letter from the broker, bank or other nominee that is the record owner of such beneficial owner’s Shares, a brokerage account statement or the voting instruction form provided by the broker).

Failure to provide the requested documents at the door or failure to comply with the procedures for the Extraordinary General Meeting may prevent shareholders from being admitted to the meeting.

In addition, it is possible that shareholders who seek to attend the Extraordinary General Meeting in-person will be subject to screening with regard to the coronavirus (COVID-19) in order to comply with local health and government guidelines and applicable building policies. We may also impose additional procedure or limitations on meeting attendees or decide to hold the meeting in a different location and will announce any such change in advance.

 

Q:

Why is this Extraordinary General Meeting being called?

 

A:

As previously announced, Purchaser has made an offer to purchase all of the outstanding Shares at a purchase price of $30.75 per share, without interest and less applicable withholding taxes, to the holders thereof, payable in cash pursuant to the Purchase Agreement, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the Letter of Transmittal. The Extraordinary General Meeting is being called in order to provide information regarding the Offer and for Wright shareholders to vote on the Extraordinary General Meeting Proposals.

 

Q:

What am I being asked to vote on at the Extraordinary General Meeting?

 

A:

You are being asked to consider and vote on the following:

 

   

resolutions for the conditional appointment, effective upon the Offer Closing, of Spencer S. Stiles as executive director on the Wright Board and each of William E. Berry, Jr., Dean H. Bergy, Jeanne M. Blondia and David G. Furgason as non-executive directors on the Wright Board, each of whom has been designated by Purchaser in accordance with the Purchase Agreement and has been nominated pursuant to a binding nomination by the Wright Board;

 

   

resolutions for the conditional acceptance of the resignations of each of Robert J. Palmisano, J. Patrick Mackin, John L. Miclot, Kevin O’Boyle, Amy S. Paul, Richard F. Wallman and Elizabeth H. Weatherman as members of the Wright Board;

 

   

a resolution granting full and final discharge to each member of the Wright Board for his or her acts of management or supervision, as applicable, up to the date of the Extraordinary General Meeting and effective upon the Acceptance Time;

 

   

a resolution conditionally approving, at Purchaser’s election, the sale, transfer and assumption of the business of Wright, including substantially all of the assets and liabilities of Wright, to or by Purchaser (or an affiliate of Purchaser) as required under article 2:107a of the Dutch Civil Code;

 

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a resolution to, subject to, among other things, the completion of the sale, transfer and assumption of the business of Wright, including substantially all of the assets and liabilities of Wright, to or by Purchaser (or an affiliate of Purchaser), (i) dissolve (ontbinden) Wright in accordance with article 2:19 of the Dutch Civil Code, (ii) appoint Stichting Vereffening Wright Medical Group as the liquidator of Wright, (iii) appoint Purchaser as the custodian of the books and records of Wright, and (iv) reimburse the liquidator’s reasonable salary and costs (subject to approval of such reimbursement by the Independent Directors);

 

   

a resolution to (i) amend Wright’s articles of association to fix the amount of compensation that dissenting shareholders may claim in connection with the proposed Mergers and (ii) authorize any and all lawyers and deputy civil law notaries practicing at Stibbe N.V., Amsterdam, the Netherlands or Houthoff Coöperatief U.A., Amsterdam, the Netherlands to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to the enclosed proxy statement as Annex D;

 

   

a resolution approving the Mergers, including the entry into by Wright of the First-Step Merger pursuant to the common draft terms of the cross-border merger, a copy of which is attached to the enclosed proxy statement as Annex E (the implementation of the Mergers being, inter alia, subject to the Purchaser’s election to do so);

 

   

a resolution to (i) amend Wright’s articles of association to authorize the Wright Board to resolve on a statutory demerger to an entity wholly-owned by Wright and (ii) authorize the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to the enclosed proxy statement as Annex F;

 

   

a resolution conditionally approving (i) the conversion of Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), (ii) the amendment of Wright’s articles of association as set forth in Annex G of this proxy statement, and (iii) the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, at Purchaser’s election;

 

   

a resolution conditionally approving (i) the amendment of Wright’s articles of association as set forth in Annex H of this proxy statement in connection with the delisting of the Shares on Nasdaq and (ii) the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, at Purchaser’s election;

 

   

a resolution conditionally approving (i) the amendment of Wright’s articles of association to align Wright’s financial year with that reckoned by Purchaser and (ii) the authorization of the Authorized Notaries to execute the notarial deed of amendment of Wright’s articles of association to effect the aforementioned amendment, a copy of which is attached to the enclosed proxy statement as Annex I; and

 

   

a resolution to approve, by means of a non-binding advisory vote, compensation that will or may become payable by Wright to its named executive officers in connection with the completion of the Offer.

Each of the Extraordinary General Meeting Proposals, as well as the conditions to the effectiveness of each of the Extraordinary General Meeting Proposals, is more fully described in the “Explanatory Notes to the Agenda of the Extraordinary General Meeting,” beginning on page 29.

 

Q:

What will I receive if the Offer is completed?

 

A:

If you tender your Shares in the Offer, you will be entitled to receive the Offer Consideration at the Offer Closing, upon the terms and subject to the conditions set forth in the Purchase Agreement and the Offer to Purchase and the related Letter of Transmittal. If you are the record owner of your Shares and you tender your Shares directly to the Depositary, you will not have to pay brokerage fees, commissions, or similar expenses. If you own your Shares through a broker, bank or other nominee, and your broker, bank or other nominee tenders your Shares on your behalf, your broker, bank or other nominee may charge you a fee for doing so. You should consult your broker, bank or other nominee to determine whether any charges will apply.

 

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Q:

If I decide not to tender, how will the Offer affect my Shares and what will happen to Wright?

 

A:

After the Offer Closing, Purchaser intends to cause Wright to terminate the listing of the Shares on Nasdaq (the “Delisting”). As a result, we anticipate that there will not be an active trading market for the Shares. In addition, after the Offer Closing, Purchaser intends to cause Wright to terminate the registration of the Shares under the Exchange Act as promptly as practicable and take steps to cause the suspension of its reporting obligations with respect to the Shares with the SEC. As a result, with respect to the Shares, Wright would no longer be required to make filings with the SEC or otherwise comply with the rules of the SEC. Furthermore, the ability of “affiliates” of Wright and persons holding “restricted securities” of Wright to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933 (the “Securities Act”) may be impaired or eliminated.

In addition, after amendment of Wright’s articles of association following the Delisting, pursuant to the Governance Resolutions proposed to be approved at the Extraordinary General Meeting, record ownership of Shares can only be transferred pursuant to a notarial deed executed before a Dutch notary. This will require compliance by the transferor and transferee of Shares with various administrative formalities under Dutch law, including execution of a power of attorney that must be legalized and apostilled and provision of know-your-customer information, and will also require shareholders to incur costs for Dutch notarial fees when they transfer Shares. Obtaining a notarial deed in the Netherlands can be expected to cost between €2,000 and €5,000 depending on the regular hourly rates for partners and associates of the Dutch law firm with which the relevant notary is associated. The time to obtain a notarial deed in the Netherlands depends on a variety of factors, including how quickly a local notary can legalize a signature and passport, how quickly a formal legal opinion can be provided (if applicable) and how quickly an apostille can be obtained. Furthermore, after such amendment of Wright’s articles of association, any transfer of record ownership of Shares prior to June 1, 2022 would require the prior approval of the Wright Board. The foregoing amendments to Wright’s articles of association will not become effective during the Offer or any Subsequent Offering Period.

If the Asset Sale or the Mergers are consummated, it is anticipated that Wright shareholders who do not tender their Shares pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period) will be offered or will receive the same consideration for their Shares as those Wright shareholders who tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period), without interest and less applicable withholding taxes. However, in the Compulsory Acquisition, the Dutch Court will determine in its sole discretion the price to be paid for the non-tendered Shares, which price may be greater than, equal to or less than the Offer Consideration. Such price will be increased by Dutch Statutory Interest. In the event the Asset Sale and Liquidation, the Mergers or the Compulsory Acquisition are consummated, Wright will either be liquidated, disappear or become wholly owned by Purchaser.

The applicable withholding taxes and other taxes, if any, imposed on non-tendering Wright shareholders in respect of any Post-Offer Reorganization may be different from, and greater than, the taxes imposed upon such Wright shareholders had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period).

In addition, if the Offer and the Post-Offer Reorganization are completed, another difference between tendering your Shares and not tendering your Shares pursuant to the Offer is that holders of Shares tendered in the Offer may be paid in respect of such Shares sooner than holders of non-tendering Shares are paid in respect of non-tendering Shares in any Post-Offer Reorganization.

It is possible that Purchaser may not be able to, or may elect not to, implement any proposed Post-Offer Reorganization after the consummation of the Offer, or that such Post-Offer Reorganization may be delayed or unable to be completed. Any Post-Offer Reorganization could be the subject of litigation, and a court could delay the Post-Offer Reorganization or prohibit it from occurring on the terms described in the Offer to Purchase, or from occurring at all. Moreover, even if Purchaser is able to effect any proposed Post-Offer

 

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Reorganization, the consideration that non-tendering Wright shareholders receive therefrom may be different than the consideration that they would have received had they tendered their Shares in the Offer (and they may also be subject to increased or additional taxes).

See also the section of this proxy statement captioned “Certain Material Tax Consequences,” beginning on page 111 for additional information.

 

Q:

How does the per Share Offer Consideration compare to the market price of the Shares prior to the announcement of execution of the Purchase Agreement and as of a recent date?

 

A:

The Offer Consideration of $30.75 per Share, without interest and less applicable withholding taxes, represents a premium of (a) 48% compared to the closing price of the Shares of $20.80 per Share on October 31, 2019 (the last trading day prior to speculation that Wright was exploring a sale), (b) 48% compared to the volume weighted average sales price of Wright’s ordinary shares of $20.84 per Share over the 10 days ended October 31, 2019, (c) 50% compared to the volume weighted average sales price of the Shares of $20.49 per Share over the 30 days ended October 31, 2019 and (d) 46% compared to the volume weighted average sales price of the Shares of $21.06 per Share over the 90 days ended October 31, 2019, but a discount of 6% to the 52-week high sales price of the Shares of $32.86 per Share. On March 19, 2020, the last full trading day before the filing of this proxy statement, the reported closing price of the Shares was $26.43 per Share.

 

Q:

What do I need to do now?

 

A:

We encourage you to read this proxy statement, the annexes to this proxy statement, including the Purchase Agreement, and the documents we refer to in this proxy statement carefully and consider how the Extraordinary General Meeting Proposals affect you. Then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet, so that your Shares can be voted at the Extraordinary General Meeting. If you hold your Shares in “street name,” please refer to the voting instruction forms provided by your broker, bank or other nominee to vote your Shares.

 

Q:

How does the Wright Board recommend that I vote?

 

A:

The Wright Board, after considering the various factors described in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement— Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement,” beginning on page 59, unanimously, among other things, (a) determined that the terms of the Purchase Agreement, the Offer, certain transactions contemplated by the Purchase Agreement (including the Mergers, Asset Sale, the Liquidation and Second Step Distribution (each as defined in the Purchase Agreement) are in the best interests of Wright, its businesses and its shareholders, employees and other relevant stakeholders, (b) approved and adopted the Purchase Agreement and (c) resolved, on the terms and subject to the conditions set forth in the Purchase Agreement, to recommend that Wright’s shareholders tender their Shares into the Offer and approve and adopt the matters to be proposed for consideration and approval by Wright’s shareholders at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote (i) “FOR” each of the Governance Resolutions, (ii) “FOR” the Discharge Resolution, (iii) “FOR” each of the Asset Sale Resolutions, (iv) “FOR” each of the Merger Resolutions, (v) “FOR” the Demerger Resolution and (vi) “FOR” the Non-Binding Vote on Executive Compensation Proposal.

 

Q:

What happens if the Offer is not completed?

 

A:

If the Offer is not completed, Wright shareholders will not receive the Offer Consideration pursuant to the Offer and the Extraordinary General Meeting Proposals will have no effect. Instead, Wright would remain an independent public company, your Shares would continue to be listed and traded on Nasdaq and registered under the Exchange Act and Wright would continue to file periodic reports with the SEC.

 

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Under specified circumstances, Wright will be required to pay Stryker a termination fee in an amount equal to $150 million following the termination of the Purchase Agreement, as described in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Purchase Agreement—Termination of the Purchase Agreement—Termination Fee,” beginning on page 98.

 

Q:

Do any of Wright’s directors or officers have interests in the Offer, the transactions contemplated by the Purchase Agreement and the Extraordinary General Meeting Proposals that may differ from those of Wright shareholders generally?

 

A:

When considering the recommendation of the Wright Board that you vote to adopt each of the Extraordinary General Meeting Proposals, you should be aware that certain members of Wright management and the Wright Board may be deemed to have certain interests in the Offer and the other transactions contemplated by the Purchase Agreement that are different from or in addition to the interests of Wright shareholders generally. The Wright Board was aware of these interests and considered that such interests may be different from or in addition to the interests of Wright shareholders generally, among other matters, in determining to approve the Purchase Agreement, the Offer and the other transactions contemplated by the Purchase Agreement and in recommending that the Extraordinary General Meeting Proposals be adopted by the shareholders of Wright. For a description of the interests of our directors and executive officers in the Offer, see the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement,” beginning on page 100.

 

Q:

What vote is required to adopt the Extraordinary General Meeting Proposals?

 

A:

For each of the Discharge Resolution, Asset Sale Resolutions, Demerger Resolution, Conversion Resolutions, Delisting Articles Amendment Resolution and the Financial Year Articles Amendment Resolution, the affirmative vote of an absolute majority of the votes cast at the Extraordinary General Meeting, either in person or by proxy, is required to adopt each such resolution.

For the Merger Resolutions, the affirmative vote of a majority of the votes cast at the Extraordinary General Meeting, either in person or by proxy, is required to adopt such resolution if at least 50% of the issued share capital of Wright is represented, either in person or by proxy, at the Extraordinary General Meeting. If less than 50% of the issued share capital of Wright is represented, either in person or by proxy, at the Extraordinary General Meeting, two-thirds of the votes cast is required to adopt the Merger Resolutions. Shares abstaining from voting will count as Shares present at the Extraordinary General Meeting but will not count for the purpose of determining the number of votes cast.

The Director Resolutions will be adopted unless the binding nature of the nominations is overridden.

The failure of any shareholder of record to submit a signed proxy card, grant a proxy electronically over the Internet or vote in person at the Extraordinary General Meeting will have no effect on the outcome of the vote to adopt the Extraordinary General Meeting Proposals unless a quorum is not present at the Extraordinary General Meeting.

If you are a beneficial owner, the failure to instruct your broker, bank or other nominee on how to vote your Shares will have no effect on the outcome of the vote to adopt the Extraordinary General Meeting Proposals unless a quorum is not present at the Extraordinary General Meeting.

 

Q:

What constitutes a quorum?

 

A:

Our articles of association require a general quorum (which applies unless another quorum applies by law or our articles of association) of one third of the issued Shares (not including Shares on which, pursuant to our articles of association, no votes may be cast) present or represented at our Extraordinary General Meeting.

 

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  In case the quorum is not met in the Extraordinary General Meeting, a second meeting may be convened at which the relevant resolutions—except for the Director Resolutions and the Merger Resolutions—may be adopted without a quorum.

 

Q:

What is the difference between holding Shares as a shareholder of record and as a beneficial owner?

 

A:

If your Shares are registered directly in your name in the Register (including a registration directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC), you are considered, with respect to those Shares, to be the “shareholder of record.” In this case, this proxy statement and your proxy card have been sent directly to you by Wright.

If your Shares are held through a broker, bank or other nominee, you are considered the “beneficial owner” of the Shares held in “street name.” In that case, this proxy statement has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those Shares, to be the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your Shares by following their instructions for voting. You are also invited to attend the Extraordinary General Meeting. However, because you are not the shareholder of record, you may not vote your Shares in person at the Extraordinary General Meeting unless you request and obtain a valid legal proxy from your broker, bank or other nominee, and if you meet the requirements set out in this proxy statement.

 

Q:

How may I vote?

 

A:

If you are a shareholder of record, there are four ways to vote:

 

   

By attending the Extraordinary General Meeting and voting in person;

 

   

By attending the Extraordinary General Meeting and voting by proxy;

 

   

By visiting the Internet at the address on your proxy card; or

 

   

By completing, dating, signing and returning the enclosed proxy card in the accompanying prepaid reply envelope.

A control number, located on your proxy card, is designed to verify your identity and allow you to vote your Shares, and to confirm that your voting instructions have been properly recorded when voting electronically over the Internet. Please be aware that, although there is no charge for voting your Shares, if you vote electronically over the Internet, you may incur costs such as Internet access charges for which you will be responsible.

Even if you plan to attend the Extraordinary General Meeting in person or by proxy, you are strongly encouraged to vote your Shares by proxy. If you are a shareholder of record or if you obtain a valid legal proxy to vote Shares which you beneficially own, you may still vote your Shares in person or by proxy at the Extraordinary General Meeting, even if you have previously voted by proxy. If you are present at the Extraordinary General Meeting and vote in person or by proxy, your previous vote by proxy will not be counted.

If you are a beneficial owner you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or electronically over the Internet through your broker, bank or other nominee if such a service is provided. To vote via the Internet through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee.

 

Q:

If my broker holds my Shares in “street name,” will my broker vote my Shares for me?

 

A:

Not without your direction. Your broker, bank or other nominee will only be permitted to vote your Shares on any Extraordinary General Meeting Proposal if you instruct your broker, bank or other nominee on how

 

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  to vote. “Broker non votes” are Shares held by a broker, bank or other nominee that are present in person or represented by proxy at the Extraordinary General Meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such Shares (e.g., the “street name” holder) on how to vote on a particular proposal and the broker, bank or other nominee does not have discretionary voting power on such proposal. Because brokers, banks and other nominees do not have discretionary voting authority with respect to the Extraordinary General Meeting Proposals, if a beneficial owner of Shares held in “street name” does not give voting instructions to the broker, bank or other nominee with respect to any of these proposals, then those Shares will not be voted thereat. However, if there are any broker non votes, then such broker non votes will count for the purpose of determining the presence of a quorum for the transaction of business at the Extraordinary General Meeting. Therefore, it is important that you instruct your broker, bank or other nominee on how you wish to vote your Shares.

 

Q:

May I change my vote after I have mailed my signed proxy card or otherwise submitted my vote by proxy?

 

A:

Yes. If you are a shareholder of record, you may change your vote or revoke your proxy at any time within the time indicated on the accompanying proxy (the “Voter Deadline”) by:

 

   

Submitting a new proxy electronically over the Internet after the date of the earlier submitted proxy prior to the Voter Deadline;

 

   

Delivering a written notice of revocation to our Secretary prior to the Voter Deadline;

 

   

Signing another proxy card with a later date and returning it to us prior to the Voter Deadline; or

 

   

Attending the Extraordinary General Meeting and voting in person.

If you are you a beneficial owner, you should contact your broker, bank or other nominee for instructions regarding how to change your vote or contact our proxy solicitor, Morrow Sodali LLC at (800) 662-5200. You may also vote in person at the Extraordinary General Meeting if you obtain a valid legal proxy from your broker, bank or other nominee, and if you meet the requirements set out in this proxy statement.

 

Q:

What is a proxy?

 

A:

A proxy is your legal designation of another person, referred to as a “proxy,” to vote your Shares. The written document describing the matters to be considered and voted on at the Extraordinary General Meeting is called a “proxy statement.” The document used to designate a person designated by the Wright Board as a proxy to vote your Shares is called a “proxy card.” The Wright Board has designated each of Robert J. Palmisano, Lance A. Berry and James A. Lightman, and each of them with full power of substitution, as proxies for the Extraordinary General Meeting.

 

Q:

If a shareholder gives a proxy, how are the Shares voted?

 

A:

The individuals named on the enclosed proxy card, or your proxies, will vote your Shares in the way that you indicate. When completing the Internet process or the proxy card, you may specify whether your Shares should be voted “FOR” or “AGAINST” or to “ABSTAIN” from voting on all, some or none of the specific items of business to come before the Extraordinary General Meeting. Abstentions will count for the purpose of determining the presence of a quorum for the transaction of business at the Extraordinary General Meeting, but will not count as a vote “FOR” or “AGAINST” each of the Extraordinary General Meeting Proposals.

If you properly sign and return your proxy card but do not mark the boxes showing how your Shares should be voted on a matter, the Shares represented by your properly signed proxy will be voted as recommended by the Wright Board with respect to such matter.

 

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Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your Shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold Shares. If you are a shareholder of record and your Shares are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return (or vote via the Internet with respect to) each proxy card and voting instruction card that you receive.

 

Q:

Who will count the votes?

 

A:

All votes will be counted by the independent inspector of election appointed for the Extraordinary General Meeting. The chairman of the Extraordinary General Meeting will determine whether resolutions are adopted.

 

Q:

Where can I find the voting results of the Extraordinary General Meeting?

 

A:

Wright intends to announce preliminary voting results at the Extraordinary General Meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC within four business days following the Extraordinary General Meeting. All reports that Wright files with the SEC are publicly available when filed. See the section of this proxy statement captioned “Where You Can Find More Information,” beginning on page 188.

 

Q:

What are the U.S. federal income tax consequences of tendering Shares for U.S. shareholders?

 

A:

The receipt of cash in exchange for your Shares pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period) or the Post-Offer Reorganization generally will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or other tax laws.

We urge you to consult your own tax advisor as to the particular tax consequences to you of the Offer and the Post-Offer Reorganization.

A more complete description of the U.S. federal income tax consequences of the Offer and the Post-Offer Reorganization is provided in this proxy statement captioned “Certain Material Tax Consequences—Certain U.S. Federal Income Tax Consequences,” beginning on page 111.

 

Q:

What are the material Dutch tax consequences of having my Shares accepted for payment in the Offer?

 

A:

For non-Dutch resident Wright shareholders who or that:

 

a)

are not individuals and do not have, nor are deemed to have, directly or indirectly, a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief aanmerkelijk belang) in Wright that is held with the principal purpose or one of the principal purposes of avoiding income tax at the level of another party and such interest is held as part of an artificial arrangement or transaction or series of arrangements or combination of transactions, whereby such arrangement or series of arrangements or transaction or combination of transactions is considered artificial if it is not set up on the basis of valid commercial motives and whereby an arrangement or transaction may consists of several steps or parts, and (i) do not derive profits from an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands to which permanent establishment or permanent representative the Shares are attributable or (ii) are not, other than by way of securities, entitled to a share in the profits of an enterprise or a co-entitlement to the net worth of an enterprise, which is effectively managed in the Netherlands and to which enterprise the Shares are attributable; and

 

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b)

are individuals and do not have, nor are deemed to have, directly or indirectly, a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief aanmerkelijk belang) in Wright that is not part of the assets of an enterprise (behoort niet tot het vermogen van een onderneming) and (i) do not derive profits from an enterprise or an interest in an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands to which permanent establishment or permanent representative the Shares are attributable, (ii) do not realize income or gains with respect to the Shares that qualify as income from miscellaneous activities in the Netherlands, which include activities with respect to the Shares that exceed regular, active portfolio management or (iii) are not, other than by way of securities, entitled to a share in the profits of an enterprise that is effectively managed in the Netherlands and to which enterprise the Shares are attributable, any gains realized in respect of Shares tendered pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period) or as a result of the Post-Offer Reorganization will generally not be subject to Dutch corporate or personal income tax.

Depending on the circumstances, Dutch resident Wright shareholders and certain non-Dutch resident Wright shareholders may be subject to Dutch income tax or Dutch corporate income tax (as applicable) on any gains realized in respect of Shares tendered pursuant to the Offer.

For a more detailed discussion of certain material Dutch tax consequences of the Offer please see the section of this proxy statement captioned “Certain Material Tax Consequences—Certain Dutch Tax Consequences,” beginning on page 114. We urge you to consult your own tax advisor as to the particular Dutch tax consequences to you of the Offer.

 

Q:

What will the holders of outstanding Wright equity awards receive in the Offer?

 

A:

The Purchase Agreement provides that each Stock Option (whether held by directors, executive officers or other employees) that is outstanding and unvested immediately prior to the Acceptance Time will vest in full at the Acceptance Time (except for 2020 Stock Options, which will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 Stock Option that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor). All unexercised Stock Options outstanding (whether held by directors, executive officers or other employees) that are vested immediately prior to the Offer Closing will be cancelled, and, in exchange for such cancelled Stock Options, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the product of (i) the excess, if any, of the Offer Consideration over the per Share exercise price of the respective Stock Option multiplied by (ii) the total number of Shares subject to the unexercised Stock Option they hold immediately prior to the Offer Closing.

The Purchase Agreement provides that each RSU that is outstanding and unvested immediately prior to the Acceptance Time (whether held by directors, executive officers or other employees) will vest in full at the Acceptance Time (except for 2020 RSUs, which will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 RSU that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor). At the Offer Closing, all outstanding RSUs that are vested will be cancelled and, in exchange for such cancelled RSUs, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number of Shares deliverable under the RSUs they hold immediately prior to the Offer Closing multiplied by the Offer Consideration.

The Purchase Agreement provides that each PSU that is outstanding and unvested immediately prior to the Acceptance Time will vest in full at the Acceptance Time, with any applicable performance conditions associated with such PSUs deemed to have been achieved at maximum performance. At the Offer Closing, PSUs will be cancelled and, in exchange for such cancelled PSUs, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number

 

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of Shares deliverable under the PSUs they hold immediately prior to the Offer Closing multiplied by the Offer Consideration.

 

Q:

When do you expect the Offer Closing to occur?

 

A:

While there is no assurance that the Offer Closing will occur, we are working toward an Offer Closing as soon as possible following the initial expiration of the Offer on April 30, 2020. However, the exact timing of completion of the Offer cannot be predicted because the completion of the Offer is subject to conditions, including, among other things, the receipt of the required regulatory approvals.

 

Q:

Am I entitled to appraisal rights?

 

A:

Wright shareholders are not entitled under Dutch law or otherwise to appraisal rights with respect to the Offer. In the event that the Compulsory Acquisition is permissible under applicable law and implemented, the Dutch Court will determine in its sole discretion the price to be paid for the non-tendered Shares, which price may be greater than, equal to or less than the Offer Consideration. Such price will be increased by Dutch Statutory Interest accrued at the rate applicable in the Netherlands (currently 2% per annum). The non-tendering Wright shareholders do not have the right to commence a Compulsory Acquisition proceeding to oblige Stryker or Purchaser to buy their Shares.

In the event the Merger Resolutions are adopted at the Extraordinary General Meeting or any subsequent extraordinary general meeting, any Wright shareholder that votes against the Merger Resolutions may exercise its Merger Withdrawal Right by filing a request for compensation in accordance with Section 2:333h of the Dutch Civil Code and the Common Draft Terms of Merger within one month after the date of the Extraordinary General Meeting or subsequent extraordinary general meeting at which the Merger Resolutions were adopted. If the Mergers are then implemented, such compensation would be paid in cash in connection with the consummation of the First-Step Merger. The Merger Resolutions include certain amendments to Wright’s articles of association that fix the cash compensation payable to any such Wright shareholders exercising the Merger Withdrawal Right at an amount per Share equal to the Offer Consideration without interest and less applicable withholding taxes.

 

Q:

Who can help answer my questions?

 

A:

If you have any questions concerning the Offer, the Post-Offer Reorganization, the Extraordinary General Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your Shares, please contact our proxy solicitor:

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902

Banks and Brokerage Firms Call: (203) 658-9400

Shareholders Call Toll Free: (800) 662-5200

Email: WMGI@investor.morrowsodali.com

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement includes forward-looking statements that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those implied by the forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including all statements regarding the intent, belief or current expectation of Wright and members of its senior management team and can typically be identified by words such as “believe,” “expect,” “estimate,” “predict,” “target,” “potential,” “likely,” “continue,” “ongoing,” “could,” “should,” “intend,” “may,” “might,” “plan,” “seek,” “anticipate,” “project” and similar expressions, as well as variations or negatives of these words. Forward-looking statements include, without limitation, statements regarding the proposed transaction, prospective performance, future plans, events, expectations, performance, objectives and opportunities and the outlook for Wright’s business; filings and approvals relating to the proposed transaction; the expected timing of the completion of the proposed transaction; the ability to complete the proposed transaction considering the various closing conditions; forecasts, including revenue and cost projections; and the accuracy of any assumptions underlying any of the foregoing. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those currently anticipated due to a number of risks and uncertainties. Risks and uncertainties that could cause the actual results to differ from expectations contemplated by forward-looking statements include: uncertainties as to the timing of the tender offer and other proposed transactions; uncertainties as to how many of Wright’s shareholders will tender their shares in the offer or approve the resolutions to be solicited at the Extraordinary General Meeting; the possibility that various closing conditions for the proposed transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the purchase agreement; the effects of the proposed transaction (or the announcement thereof) on relationships with associates, customers, other business partners or governmental entities; transaction costs; the risk that the proposed transaction will divert management’s attention from Wright’s ongoing business operations; changes in Wright’s businesses during the period between now and the Offer Closing; risks associated with litigation; and other risks and uncertainties detailed from time to time in documents filed with the SEC by Wright, including current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, and other documents to be filed by Wright. All forward-looking statements are based on information currently available to Wright, and Wright assumes no obligation to update any forward-looking statements. All forward-looking statements in this proxy statement are qualified in their entirety by this cautionary statement. Wright acknowledges that forward-looking statements made in connection with the Offer are not subject to the safe harbors created by the Private Securities Litigation Reform Act of 1995, as amended. Wright is not waiving any other defenses that may be available under applicable law.

 

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THE EXTRAORDINARY GENERAL MEETING

This proxy statement of Wright, which is first being mailed to holders of Shares on or about March 20, 2020, is furnished in connection with the solicitation of proxies on behalf of Wright, which asks you to vote promptly, and if voting by mail, to complete, sign, date and mail the enclosed proxy for use at the Extraordinary General Meeting, for the purposes set forth in the foregoing notice and agenda and the following explanation to the agenda.

Subject to certain restrictions under Dutch law, each Share entitles the holder thereof to one vote on each matter submitted to a vote at the Extraordinary General Meeting. You may vote if you are the shareholder of record of Shares on the Record Date, even if you have previously tendered your Shares in the Offer. As of March 17, 2020 the latest practicable date prior to the date of this proxy statement, we had 128,818,169 Shares issued and outstanding and entitled to vote. The Wright Board has determined that the Register is the relevant register for determination, as of the Record Date, of the holders of Shares and others with meeting rights under Dutch law who are entitled to attend and, if relevant, vote at the Extraordinary General Meeting. Those who are holders of Shares or who otherwise have such meeting rights with respect to Shares on the Record Date and who are registered as such in the Register may attend the Extraordinary General Meeting and, if relevant, vote at such meeting in person, or authorize a third party to attend and, if relevant, vote at the meeting on their behalf through the use of a proxy.

Resolutions by the Extraordinary General Meeting must be adopted by an absolute majority of votes cast, unless another standard of votes and/or a quorum is required by virtue of applicable law or our articles of association. Our articles of association require a general quorum of one third of the issued Shares (not including Shares on which, pursuant to our articles of association, no votes may be cast) present or represented at our Extraordinary General Meeting. In case the quorum is not met in the Extraordinary General Meeting, a second meeting may be convened at which the relevant resolutions—except for the resolutions included in Item 3 (the appointment of directors to the Wright Board upon binding nomination) and Item 9 (entry into and approval of the Mergers)—may be adopted without a quorum. The affirmative vote of an absolute majority of the votes cast at the Extraordinary General Meeting is required to adopt resolutions on the agenda items listed for resolution in this proxy statement, unless indicated otherwise in this proxy statement.

All Shares represented by proxies duly executed and received by us prior to the Voter Deadline will be voted at the Extraordinary General Meeting in accordance with the terms of the proxies. Proxy cards to vote Shares received after the Voter Deadline may be disregarded. A shareholder may revoke a proxy by delivering a written notice of revocation to our Secretary prior to the Voter Deadline, by submitting a duly executed proxy bearing a later date prior to the Voter Deadline or by attending the Extraordinary General Meeting and voting in person (with regard to which the attendance requirements set forth below apply).

For all proposals, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” Blank votes and invalid votes will be regarded as not having been cast. If you do not provide a valid proxy or otherwise vote your Shares held in your name and do not attend the Extraordinary General Meeting, your Shares will not be voted and your Shares will not be considered present or represented for purposes of determining the presence of a quorum for the transaction of business at the Extraordinary General Meeting. Abstentions will count for the purpose of determining the presence of a quorum for the transaction of business at the Extraordinary General Meeting, but will not count as a vote “FOR” or “AGAINST” each of the proposals listed for resolution in this proxy statement.

“Broker non votes” are Shares held by a broker, bank or other nominee that are present in person or represented by proxy at the Extraordinary General Meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such Shares (e.g,. the “street name” holder) on how to vote on a particular proposal and the broker, bank or other nominee does not have discretionary voting power on such proposal. Because brokers, banks and other nominees do not have discretionary voting authority with respect to

 

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the proposals listed for resolution in this proxy statement, if a beneficial owner of Shares held in “street name” does not give voting instructions to the broker, bank or other nominee with respect to any of these proposals, then those Shares will not be voted thereat. However, if there are any broker non votes, then such broker non votes will count for the purpose of determining the presence of a quorum for the transaction of business at the Extraordinary General Meeting.

Admittance of shareholders and acceptance of written voting proxies shall be governed by Dutch law. Only shareholders of record as of the Record Date, beneficial owners as of the Record Date, holders of valid proxies for the Extraordinary General Meeting and other persons admitted by the chairman of the meeting may attend the Extraordinary General Meeting. Persons who wish to attend the Extraordinary General Meeting must give notice in writing to the Wright Board of their intention to attend the Extraordinary General Meeting prior to April 17, 2020. The notice must contain the name and the number of Shares the person will represent in the meeting. All attendees must be prepared to identify themselves with a valid proof of identity for admittance. The additional items that attendees must bring depend on whether they are shareholders of record, beneficial owners or proxy holders.

A shareholder of record who wishes to attend the Extraordinary General Meeting in person must bring a valid proof of identity.

A person who holds a validly executed proxy entitling such person to vote on behalf of a shareholder of record and who wishes to attend the Extraordinary General Meeting in person must bring: (i) a valid proof of identity and (ii) the validly executed proxy naming such person as the proxy holder, signed by the shareholder of record.

A beneficial owner who holds Shares in “street name” through a broker, bank or other nominee and who wishes to attend the Extraordinary General Meeting in person must bring: (i) a valid proof of identity and (ii) proof of beneficial ownership as of the Record Date (e.g., a letter from the broker, bank or other nominee that is the record owner of such beneficial owner’s Shares, a brokerage account statement or the voting instruction form provided by the broker).

A person who holds a validly executed proxy entitling such person to vote on behalf of a beneficial owner and who wishes to attend the Extraordinary General Meeting in person must bring: (i) a valid proof of identity, (ii) the validly executed proxy naming such person as the proxy holder, signed by the beneficial owner and (iii) proof of beneficial ownership of the relevant beneficial owner as of the Record Date (e.g., a letter from the broker, bank or other nominee that is the record owner of such beneficial owner’s Shares, a brokerage account statement or the voting instruction form provided by the broker).

Failure to provide the requested documents at the door or failure to comply with the procedures for the Extraordinary General Meeting may prevent shareholders from being admitted to the meeting.

As of March 17, 2020, the latest practicable date prior to the date of this proxy statement, Wright directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 1,352,308 Shares (excluding any Shares that would be delivered upon exercise or conversion of stock options or other equity-based awards), which represented approximately 1.0% of the outstanding Shares on such date. The directors and executive officers of Wright have informed Wright that they currently intend to vote all of their Shares “FOR” each of the proposals listed for resolution in this proxy statement.

Wright will bear the cost of soliciting proxies on the accompanying proxy card. Some of our directors, officers and regular employees may solicit proxies in person or by mail, telephone or fax, but will not receive any additional compensation for their services. We may reimburse banks, brokers and others for their reasonable expenses in forwarding proxy solicitation materials to beneficial owners of Shares. Wright has retained Morrow Sodali LLC, a proxy solicitation firm (the “Proxy Solicitor”), to assist in the solicitation of proxies in connection

 

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with the Extraordinary General Meeting at a cost of approximately $20,000 plus expenses. We will also indemnify the Proxy Solicitor against losses arising out of its provision of these services on our behalf.

Shareholders and interested persons may communicate with the Wright Board or one or more directors by sending a letter addressed to the Wright Board or to any one or more directors in care of James A. Lightman, Senior Vice President, General Counsel and Secretary, Wright Medical Group N.V., Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, (+ 31) 20 521-4777.

 

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EXPLANATORY NOTES TO THE AGENDA OF THE EXTRAORDINARY GENERAL MEETING

 

ITEM 1

OPENING OF THE MEETING

Welcome and announcements.

 

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ITEM 2

EXPLANATION OF THE OFFER (for discussion)

Stryker B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands (“Purchaser”), and an indirect, wholly-owned subsidiary of Stryker Corporation, a Michigan corporation (“Stryker”), has made an offer to purchase all of the outstanding ordinary shares, par value €0.03 per share, of Wright (the “Shares”) at a purchase price of $30.75 per Share, without interest and less applicable withholding taxes, to the holders thereof, payable in cash (such amount or any higher amount per Share paid pursuant to the Offer (as defined below), the “Offer Consideration”) pursuant to a purchase agreement, dated November 4, 2019 (as it may be amended from time to time, the “Purchase Agreement”), by and among Wright, Purchaser and Stryker, upon the terms and subject to the conditions set forth in an Offer to Purchase, dated December 13, 2019 (as it may be amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”).

During the extraordinary general meeting of Wright to be held on April 24, 2020 at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, at 12:00 p.m., central European time (the “Extraordinary General Meeting”), Wright will explain the terms of the Offer. For further information with respect to the material terms of the Offer, please see the information contained in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement,” beginning on page 47 as well as the Offer to Purchase and related documents prepared by Stryker and filed with the U.S. Securities and Exchange Commission (the “SEC”) and the Solicitation/Recommendation Statement on Schedule 14D-9 and related documents prepared by Wright and filed with the SEC. Shareholders attending the Extraordinary General Meeting will be given the opportunity to provide their views on the Offer.

After consideration, the Board of Directors (bestuur) of Wright (the “Wright Board”) has unanimously, among other things, (a) determined that the terms of the Purchase Agreement, the Offer, certain transactions contemplated by the Purchase Agreement (including the Asset Sale, the Liquidation and Second Step Distribution and the Mergers (each as defined in the Purchase Agreement)) are in the best interests of Wright, its businesses and its shareholders, employees and other relevant stakeholders, (b) approved and adopted the Purchase Agreement and (c) resolved, on the terms and subject to the conditions set forth in the Purchase Agreement, to recommend that Wright’s shareholders tender their Shares into the Offer and approve and adopt the matters to be proposed for consideration and approval by Wright’s shareholders at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the agenda items that have been put for binding or non-binding resolution on the agenda of this Extraordinary General Meeting.

 

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ITEM 3

APPOINTMENT OF DIRECTORS TO THE WRIGHT BOARD (for resolution)

Stryker, Purchaser and Wright have agreed that, effective as of the time that all Shares validly tendered and not properly withdrawn pursuant to the Offer as of the Acceptance Time (as defined below) are paid for by Purchaser (such time of payment, the “Offer Closing”), certain changes are to be made in the composition of the Wright Board.

Upon the Offer Closing, the Wright Board will be comprised of seven directors, five of whom have been designated by Stryker and Purchaser in writing and are set forth below in Item 3(a) up to and including Item 3(e) (the “Purchaser Directors”), and two of whom will be Gary D. Blackford and David D. Stevens, who are independent directors currently serving on the Wright Board (the “Independent Directors”). The Independent Directors will, in accordance with Dutch practice, look after the corporate interest of Wright and the interests of all relevant stakeholders of Wright, including the interests of any non-tendering shareholders of Wright, and will resign from the Wright Board upon the earliest of (i) such time after the Acceptance Time (as defined below), as Purchaser and its affiliates, in the aggregate, own 100% of the issued and outstanding Shares, including pursuant to the Mergers (as defined below) and (ii) the Second Step Distribution (as defined below) having been made and the Liquidation (as defined below) having been completed. “Acceptance Time” means the time at or as promptly as practicable following the Expiration Time (as defined below) (but in any event within two business days thereafter), that Purchaser accepts for payment. Unless the Offer is earlier terminated, the Offer will expire at 5:00 p.m., New York City time, on April 30, 2020 (the “Expiration Time,” unless the Offer is extended in accordance with the Purchase Agreement, in which event “Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire).

As permitted under Dutch law and our articles of association, the Wright Board is authorized to make binding nominations for each open position on the Wright Board. The binding nature of the Wright Board’s nomination may be overridden by a vote of two-thirds of the votes cast at the Extraordinary General Meeting if such two-thirds vote constitutes more than one-half of our issued share capital (not including Shares on which, pursuant to Dutch law, no votes may be cast). Should the binding nature of the nomination be overridden, a new general meeting is called at which the resolution for appointment of a member of the Wright Board shall require a majority of two-thirds of the votes cast, representing more than half of the issued share capital. If a binding nomination only contains one nominee for a seat to be filled, a resolution on the nomination has the effect that such nominee is appointed, unless the binding nature of the nomination is overridden.

The Wright Board has made binding nominations (containing only one nominee for each seat to be filled) for the appointment of each Purchaser Director, effective as of the Offer Closing and for a term ending at the end of Wright’s second annual general meeting held after the date of the Offer Closing.

The information as required pursuant to our articles of association in respect of each Purchaser Director nominee is set forth below. Shares deemed beneficially owned by each Purchaser Director nominee as shown in the information below include (i) Shares held by immediate family members and (ii) Shares that can be acquired through stock options or other Wright equity awards exercisable through the date that is 60 days after March 17, 2020.

Adoption of each of the resolutions set forth in Item 3(a) up to and including Item 3(e) below (together the “Director Resolutions”) and the proposals set out under Items 4, 11, 12 and 13 (together with the Director Resolutions, the “Governance Resolutions”) is a condition to each of Stryker’s and Purchaser’s obligation to accept for payment and pay for any Share validly tendered and not properly withdrawn pursuant to the Offer (an “Offer Condition”). If the Governance Resolutions are not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may not occur.

Each resolution for appointment is subject to and conditioned upon the occurrence of, and effective as of, the Offer Closing.

The Wright Board unanimously recommends that you vote “FOR” the conditional appointment of each of the Purchaser Directors set forth in this Item 3.

 

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a.

Appointment of Spencer S. Stiles as executive director, upon binding nomination by the Wright Board subject to Offer Closing (for resolution)

Mr. Stiles, age 43, has served as Group President, Orthopaedics and Spine at Stryker since August 2019. Previously, he served at Stryker as Group President, Neurotechnology, Instruments and Spine from August 2018 to July 2019, Global President of Instruments from April 2015 to July 2018, President of Spine from January 2011 to March 2015 and General Manager of the Communications business unit from September 2008 to December 2010. Mr. Stiles joined Stryker in 1999. Mr. Stiles is not the beneficial owner of any Shares.

 

b.

Appointment of William E. Berry, Jr. as non-executive director, upon binding nomination by the Wright Board subject to Offer Closing (for resolution)

Mr. Berry, age 53, has held the role of Vice President, Corporate Controller and Principal Accounting Officer of Stryker since February 2014. Prior to this, he served as Corporate Controller of Stryker from August 2011 to February 2014. Before joining Stryker in August 2011, Mr. Berry served as Assistant Corporate Controller for Whirlpool Corporation, the world’s leading global manufacturer and marketer of major home appliances. From 2007 to 2009, Mr. Berry served as Controller of the Electronics and Safety Division of Delphi Automotive LLP, a leading global vehicle components manufacturer. From 1995 to 2007, Mr. Berry held various positions with Federal-Mogul Corporation, a leading global supplier of vehicle and industrial products, most recently serving as Director of Finance for Global Powertrain. Mr. Berry is not the beneficial owner of any Shares.

 

c.

Appointment of Dean H. Bergy as non-executive director, upon binding nomination by the Wright Board subject to Offer Closing (for resolution)

Mr. Bergy, age 60, has served as Vice President, Corporate Secretary of Stryker since October 2012. He also served as Interim CFO and Vice President, Corporate Secretary of Stryker from October 2012 until April 2013. Mr. Bergy joined Stryker in 1994 as Corporate Controller and has held a number of roles of increasing responsibility during his tenure. Prior to joining Stryker, Mr. Bergy was an Audit Senior Manager for Ernst & Young LLP. Mr. Bergy is not the beneficial owner of any Shares.

 

d.

Appointment of Jeanne M. Blondia as non-executive director, upon binding nomination by the Wright Board subject to Offer Closing (for resolution)

Ms. Blondia, age 54, has served as Vice President and Treasurer of Stryker since May 2008. In January of 2014, she became Vice President, Finance and Treasurer of Stryker. Prior to joining Stryker in May 2008, Ms. Blondia served as the Vice President and Treasurer of Constellation Energy Group. Earlier in her career, she worked at the General Motors Treasurer’s office in New York, holding various roles of increasing responsibility, including Director of Business Development for GMAC, GM’s finance subsidiary. She began her career as an Analyst at DRI, an economic consulting firm. Ms. Blondia is not the beneficial owner of any Shares.

 

e.

Appointment of David G. Furgason as non-executive director, upon binding nomination by the Wright Board subject to Offer Closing (for resolution)

Mr. Furgason, age 55, has served as Vice President, Tax of Stryker since August 2012. Previously, he served at Stryker as Director of Tax, U.S. from August 2006 to 2010 and as Director, Global Tax Operations from 2010 to August 2012. Mr. Furgason began his career with Stryker in 2004 as Senior Manager, Tax Planning, Audits and Accounting. Prior to joining Stryker, Mr. Furgason had an 18-year career in public accounting as a principal with Jansen Furgason & Valk, PC and a manager with Ernst & Young LLP. Mr. Furgason is not the beneficial owner of any Shares.

The Wright Board intends to designate (i) Mr. Stiles as chairperson of the Wright Board, subject to the appointment of Mr. Stiles as a member of the Wright Board and (ii) Mr. Stiles as Chief Executive Officer of Wright, subject to the appointment of Mr. Stiles as a member of the Wright Board.

 

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ITEM 4

ACCEPTANCE OF RESIGNATION OF MEMBERS OF THE WRIGHT BOARD (for resolution)

The directors of the Wright Board currently in office have been appointed during the annual general meeting of shareholders held on June 28, 2019 and will remain in office after the Extraordinary General Meeting, until the 2020 annual general meeting of shareholders or his or her earlier death, resignation or removal. Stryker, Purchaser and Wright have agreed that, effective as of the Offer Closing, certain changes are to be made in the composition of the Wright Board.

Upon the Offer Closing, the Wright Board will be comprised of seven directors, five of whom shall be the Purchaser Directors, and two of whom will be the Independent Directors. Each of Robert J. Palmisano, J. Patrick Mackin, John L. Miclot, Kevin O’Boyle, Amy S. Paul, Richard F. Wallman, and Elizabeth H. Weatherman has tendered his or her resignation and will voluntarily step down as a member of the Wright Board effective upon the Offer Closing.

Adoption of each of the resolutions set forth in Item 4(a) up to and including Item 4(g) below (together, the “Resignation Resolutions”) is an Offer Condition. If the Resignation Resolutions are not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may not occur.

Each resolution for acceptance of resignation is subject to and conditioned upon the occurrence of, and effective as of, the Offer Closing.

Each resolution to accept the resignation of the relevant member of the Wright Board as set forth in this Item 4 must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the conditional acceptance of resignation of each of the members of the Wright Board set forth in this Item 4.

 

  a.

Acceptance of resignation of Robert J. Palmisano as executive director, subject to Offer Closing (for resolution)

 

  b.

Acceptance of resignation of J. Patrick Mackin as non-executive director, subject to Offer Closing (for resolution)

 

  c.

Acceptance of resignation of John L. Miclot as non-executive director, subject to Offer Closing (for resolution)

 

  d.

Acceptance of resignation of Kevin O’Boyle as non-executive director, subject to Offer Closing (for resolution)

 

  e.

Acceptance of resignation of Amy S. Paul as non-executive director, subject to Offer Closing (for resolution)

 

  f.

Acceptance of resignation of Richard F. Wallman as non-executive director, subject to Offer Closing (for resolution)

 

  g.

Acceptance of resignation of Elizabeth H. Weatherman as non-executive director, subject to Offer Closing (for resolution)

 

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ITEM 5

DISCHARGE OF DIRECTORS (for resolution)

Granting of full and final discharge to each member of the Wright Board for his or her acts of management or supervision, as applicable, up to the date of the Extraordinary General Meeting and effective upon the Acceptance Time.

It is proposed that each of the current members of the Wright Board will be granted full and final discharge in respect of his or her acts of management or supervision up to the date of the Extraordinary General Meeting, except for acts as a result of fraud (bedrog), gross negligence (grove schuld) or willful misconduct (opzet) of such member.

Adoption of the resolution to discharge the members of the Wright Board is not an Offer Condition. If this resolution is not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may still occur.

The discharge for acts of management or supervision of each current member of the Wright Board up to the date of the Extraordinary General Meeting will be effective as of the Acceptance Time and granted for the performance of their duties, on the basis of the information provided to the general meeting through publicly available information prior to the date of the Extraordinary General Meeting. The resolution to approve the granting of full and final discharge to each member of the Wright Board as set forth in this Item 5 must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the proposal to grant discharge to each of the current members of the Wright Board as set forth in this Item 5.

 

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ITEM 6

APPROVAL OF THE ASSET SALE (for resolution)

Conditional approval of the sale, transfer and assumption of the business of Wright, including substantially all of the assets and liabilities of Wright, to or by Purchaser (or an affiliate of Purchaser) (the “Asset Sale”) as required under article 2:107a of the Dutch Civil Code.

Except as described below, following the Acceptance Time, in accordance with the Purchase Agreement, Purchaser will (and Stryker will cause Purchaser to) provide for a subsequent offering period of at least 10 business days in accordance with Rule 14d-11 promulgated under the Exchange Act (the “Subsequent Offering Period”). In the event that prior to the expiration of any such Subsequent Offering Period, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Asset Sale, Purchaser will (and Stryker will cause Purchaser to) extend the Subsequent Offering Period for at least five business days to permit any remaining minority shareholders to tender their Shares in exchange for the Offer Consideration (such extension, the “Minority Exit Offering Period”). In the event that promptly following the Expiration Time, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Mergers (as defined below), Purchaser will not be required to provide either a Subsequent Offering Period or Minority Exit Offering Period, but may do so if Purchaser chooses.

Following the later of the Offer Closing and the closing of any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period), Stryker or Purchaser intend to effectuate or cause to be effectuated a corporate reorganization of or involving Wright and its subsidiaries (the “Post-Offer Reorganization”). The Post-Offer Reorganization will utilize processes available to Purchaser under Dutch and other applicable law aimed at strengthening Stryker’s direct or indirect control over Wright or its assets and business operations. More specifically, the Asset Sale and Liquidation (as defined below) would ensure that Purchaser or one of its affiliates becomes the owner of all or substantially all of Wright’s business operations from and after the consummation of such Post-Offer Reorganization. In the event the Asset Sale and Liquidation are consummated Wright will be liquidated and cease to exist.

In the event Stryker or Purchaser elects to implement the Asset Sale, the Asset Sale will be implemented together with the Liquidation and the Second Step Distribution (each as defined in Item 7 of these explanatory notes to the agenda) in accordance with the terms of the asset sale agreement to be entered into by Purchaser (or an affiliate of Purchaser), Stryker and Wright, attached hereto as Annex C. Reference is made to the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement, beginning on page 47 for a more detailed description of the Asset Sale.

The approval of each of the Asset Sale (this Item 6), the Liquidation (Item 7) (together with this Item 6, the “Asset Sale Resolutions”), the Mergers (Item 9) and the Demerger (Item 10) will allow Wright to gain greater certainty that the Offer Closing will occur and that its relevant stakeholders will realize the benefits of the transactions contemplated thereby, as it lowers the threshold percentage for purposes of the Minimum Condition (an Offer Condition requiring that the number of Shares validly tendered pursuant to the Offer, and not properly withdrawn, together with the Shares then owned by Stryker or its wholly-owned subsidiaries, represents at least a minimum percentage of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal)) from 95% to 80%. However, even if such resolutions are not approved, Purchaser may also, in its sole discretion, reduce the threshold percentage for purposes of the Minimum Condition from 95% to 80%.

The Asset Sale requires the approval of the general meeting pursuant to article 2:107a of the Dutch Civil Code.

The resolution approving the Asset Sale is conditioned upon, and subject to, (i) Purchaser’s election to implement the Asset Sale, (ii) the Acceptance Time having occurred and (iii) the number of Shares validly tendered pursuant to the Offer and not properly withdrawn (including Shares tendered during the Subsequent

 

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Offering Period, as it may be extended by the Minority Exit Offering Period), together with the Shares owned by Stryker or its wholly-owned subsidiaries, represents at least 80% of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal). Approval of the Asset Sale Resolutions is not an Offer Condition. If the Asset Sale Resolutions are not approved by shareholders at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may still occur.

The resolution to approve, on the conditions set forth above, the Asset Sale as set forth in this Item 6 must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the proposal to approve, on the conditions precedent set forth above, the Asset Sale as set forth in this Item 6.

 

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ITEM 7

DISSOLUTION (for resolution)

Conditional approval to (i) dissolve (ontbinden) Wright in accordance with article 2:19 of the Dutch Civil Code, (ii) appoint Stichting Vereffening Wright Medical Group as the liquidator of Wright, (iii) appoint Purchaser as the custodian of the books and records of Wright, and (iv) reimburse the liquidator’s reasonable salary and costs (subject to approval of such reimbursement by the Independent Directors).

The Purchase Agreement provides that if Purchaser or Stryker determines to effectuate the Asset Sale, subject to the conditions explained below, as soon as practicable following the consummation of the Asset Sale, Wright shall be liquidated and dissolved (the “Liquidation”) in accordance with applicable Dutch procedures, which shall result in one or more advance liquidation distributions and a final liquidation distribution (collectively, the “Second Step Distribution”) being made, whereby the initial advance liquidation distribution is expected to result in payment, through a settlement agent, to each non-tendering Wright shareholder of an amount in cash equal to the Offer Consideration, without interest and less applicable withholding taxes, for each Share then owned by such non-tendering Wright shareholder. Reference is made to the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement, beginning on page 47 for a more detailed description of the Liquidation and the Second Step Distribution. For certain material Dutch tax consequences of the Liquidation and Second Step Distribution, reference is made to the section of this proxy statement captioned “Certain Material Tax Consequences Certain Dutch Tax Consequences,” beginning on page 114.

The approval of each of the Asset Sale Resolutions, the Mergers (Item 9) and the Demerger (Item 10) will allow Wright to gain greater certainty that the Offer Closing will occur and that its relevant stakeholders will realize the benefits of the transactions contemplated thereby, as it lowers the threshold percentage for purposes of the Minimum Condition (an Offer Condition requiring that the number of Shares validly tendered pursuant to the Offer, and not properly withdrawn, together with the Shares then owned by Stryker or its wholly-owned subsidiaries, represents at least a minimum percentage of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal)) from 95% to 80%. However, even if such resolutions are not approved, Purchaser may also, in its sole discretion, reduce the threshold percentage for purposes of the Minimum Condition from 95% to 80%.

This resolution to dissolve Wright, appoint Stichting Vereffening Wright Medical Group as the liquidator of Wright, appoint Purchaser as the custodian of the books and records of Wright and approve the reimbursement by Wright of the liquidator’s reasonable salary and costs is conditioned upon, and subject to (i) Purchaser’s election to implement the Asset Sale, (ii) the Acceptance Time having occurred, (iii) the number of Shares validly tendered pursuant to the Offer and not properly withdrawn (including Shares tendered during the Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period), together with the Shares owned by Stryker or its wholly-owned subsidiaries, representing at least 80% of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal) and (iv) the Asset Sale having been completed. The Wright Board will determine the exact date and time as of which such conditions precedent have been fulfilled, pursuant to which the resolution to dissolve Wright shall become effective. The approval of the reimbursement by Wright of the liquidator’s reasonable salary and costs is further subject to and conditioned upon both of the Independent Directors having approved such reimbursement. Adoption of the Asset Sale Resolutions is not an Offer Condition. If the Asset Sale Resolutions are not adopted by shareholders at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may still occur.

The resolutions to (i) dissolve Wright, (ii) appoint Stichting Vereffening Wright Medical Group as the liquidator of Wright, (iii) appoint Purchaser as the custodian of the books and records of Wright and (iv) reimburse the liquidator’s reasonable salary and costs (subject to approval of such reimbursement by the Independent Directors) as set forth in this Item 6 must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting and will be subject to the conditions precedent set forth above.

 

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The Wright Board unanimously recommends that you vote “FOR” the proposal to (i) dissolve Wright in accordance with article 2:19 of the Dutch Civil Code, (ii) appoint Stichting Vereffening Wright Medical Group as liquidator of Wright, (iii) appoint Purchaser as the custodian of the books and records of Wright and (iv) approve the reimbursement by Wright of the liquidator’s reasonable salary and costs (subject to approval of such reimbursement by the Independent Directors), in each case as set forth in this Item 7, which resolution will be subject to the conditions precedent set forth above.

 

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ITEM 8

AMENDMENT OF THE ARTICLES OF ASSOCIATION REGARDING COMPENSATION OF DISSENTING SHAREHOLDERS (for resolution)

Resolution to amend Wright’s articles of association to fix the amount of compensation that dissenting shareholders may claim in connection with the proposed Mergers.

In the event the resolution to approve the Mergers (including the First-Step Merger (as defined below)) is adopted by the general meeting, any Wright shareholder that votes against such resolution may exercise its withdrawal right under Dutch law in connection with the First-Step Merger by filing a request for compensation in accordance with Section 2:333h of the Dutch Civil Code and the common draft terms of the cross-border merger (the “Common Draft Terms of Merger”) within one month after the date on which such resolution was adopted. If the Mergers are then implemented, such compensation would be paid in cash in connection with the consummation of the First-Step Merger (as defined below).

The Wright Board proposes to resolve to amend Wright’s articles of association to fix the amount of compensation that dissenting shareholders may claim in connection with the proposed Mergers at an amount equal to the Offer Consideration, without interest and less applicable withholding taxes, and to authorize each member of the Wright Board, as well as each lawyer, (junior) civil law civil law notaries practicing at Stibbe N.V., Amsterdam, the Netherlands or Houthoff Coöperatief U.A., Amsterdam, the Netherlands (collectively, the “Authorized Notaries”) jointly and each of them individually, to execute the notarial deed of amendment to the articles of association and to undertake all other activities that any recipient of such authorization deems necessary or useful in connection therewith. For certain material Dutch tax consequences of the compensation of dissenting shareholders, reference is made to the section of this proxy statement captioned “Certain Material Tax ConsequencesCertain Dutch Tax Consequences,” beginning on page 114.

Annex D to this proxy statement contains the notarial deed of amendment of Wright’s articles of association fixing the amount of compensation that dissenting shareholders may claim in connection with the proposed Mergers. We encourage you to read Annex D carefully and in its entirety. The text of the notarial deed of amendment is also available for inspection by Wright shareholders at Wright’s offices and on our website from the date of the notice convening the Extraordinary General Meeting.

This amendment to Wright’s articles of association shall become effective upon the execution of the notarial deed of amendment to the articles of association and will be effectuated immediately prior to the adoption of the resolution approving the Mergers (including the First-Step Merger (as defined below)).

An absolute majority of the votes cast at the Extraordinary General Meeting, either in person or by proxy, is required to adopt the proposal to amend Wright’s articles of association, and authorize each member of the Wright Board as well as the Authorized Notaries both jointly and each of them individually, as set forth in this Item 8.

The Wright Board unanimously recommends that you vote “FOR” the proposal to amend Wright’s articles of association as set forth in this Item 8.

 

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ITEM 9

ENTRY INTO AND APPROVAL OF THE MERGERS (for resolution)

Resolution to approve the Mergers.

As described under Item 6 above, following the later of the Offer Closing and the closing of any Subsequent Offering Period, Stryker or Purchaser intend to effectuate or cause to be effectuated a Post-Offer Reorganization, which may include the Mergers (as defined below). The Post-Offer Reorganization will utilize processes available to Purchaser under Dutch and other applicable law aimed at strengthening Stryker’s direct or indirect control over Wright or its assets and business operations, and would ensure that Purchaser or one of its affiliates becomes the owner of all or substantially all of Wright’s business operations from and after the consummation of such Post-Offer Reorganization. In the event that the Mergers are implemented, Wright will become an indirect, wholly-owned subsidiary of Stryker.

In the event that the Mergers are implemented as the Post-Offer Reorganization (for which Stryker has a preference), which is subject to (a) Purchaser’s election to implement the Mergers, (b) the approval of the Merger Resolutions by Wright shareholders at the Extraordinary General Meeting (or any subsequent extraordinary general meeting), and (c) the Acceptance Time having occurred and the Reorganization Threshold having been achieved, Wright and Purchaser will complete a series of mergers whereby (i) Wright will merge with and into a Luxembourg société anonyme that is a direct, wholly-owned subsidiary of Wright (“Wright Luxembourg”) with Wright Luxembourg surviving the merger (the “First-Step Merger”), (ii) Wright Luxembourg will merge with and into a Bermuda exempted company that is a direct, wholly-owned subsidiary of Wright Luxembourg (“Wright Bermuda”) with Wright Bermuda surviving the merger (the “Second-Step Merger”) and (iii) a Bermuda exempted company formed by Stryker as a wholly-owned subsidiary of Purchaser will merge with and into Wright Bermuda with Wright Bermuda surviving the merger (the “Third-Step Merger” and, together with the First-Step Merger and the Second-Step Merger, the “Mergers”). Upon completion of the Mergers, any Wright shareholders who did not tender their Shares pursuant to the Offer will no longer have any equity interest in the surviving entities from such Mergers and will ultimately receive, for each Share held immediately prior to the completion of the First-Step Merger, cash in an amount equal to the Offer Consideration. Such amount would be without interest and less applicable withholding taxes. Stryker and Purchaser have no current intention to require the deduction and withholding of any amounts under any tax law in respect of any amounts payable upon completion of the Mergers to any Wright shareholders who did not tender their Shares pursuant to the Offer and who do not exercise its withdrawal right under Dutch law in connection with the First-Step Merger (a “Merger Withdrawal Right”), but such tax deduction and withholding will take place to the extent required under applicable tax law.

In the event that a Wright shareholder exercises a Merger Withdrawal Right, then any cash compensation paid to such withdrawing Wright shareholder will be subject to Dutch dividend withholding tax (dividendbelasting) at the statutory rate of 15% to the extent that the amount of the cash compensation exceeds the average paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes (which amount may be subject to an advance tax clearance by the Dutch tax authorities on the amount of paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes) subject to any exemption, reduction or refund that may be available to such withdrawing Wright shareholder. As a result, the net amount received by such withdrawing Wright shareholder may be lower than the amount that they would have received had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period). No compensation will be paid to non-tendering Wright shareholders for any administrative costs charged by banks in relation to the transfer of the cash proceeds of the Third-Step Merger to their bank account or otherwise.

In the event Stryker or Purchaser elects to implement the Mergers, the Mergers will be implemented subject to the terms of the Merger Documentation (as defined in the Purchase Agreement). Reference is made to the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement,” beginning on page 47 for a more detailed description of the Mergers.

 

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The approval of each of the Asset Sale Resolutions, the Merger Resolutions and the Demerger (Item 10) will allow Wright to gain greater certainty that the Offer Closing will occur and that its relevant stakeholders will realize the benefits of the transactions contemplated thereby, as it lowers the threshold percentage for purposes of the Minimum Condition (an Offer Condition requiring that the number of Shares validly tendered pursuant to the Offer, and not properly withdrawn, together with the Shares then owned by Stryker or its wholly-owned subsidiaries, represents at least a minimum percentage of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal)) from 95% to 80%. However, even if such resolutions are not approved, Purchaser may also, in its sole discretion, reduce the threshold percentage for purposes of the Minimum Condition from 95% to 80%.

The Wright Board proposes (A) to resolve, in accordance with the Common Draft Terms of Merger that was signed on March 13, 2020 by the Wright Board and the management board of Wright Luxembourg, that Wright will merge with and into Wright Luxembourg pursuant to Title X, Chapter II of the Luxembourg Company Law and Section 2:309 et seq. and Section 2:333b et seq. Dutch Civil Code, as a result of which all the assets and liabilities of Wright will be transferred to Wright Luxembourg by universal succession of title and Wright shall cease to exist and (B) to approve the Second-Step Merger and Third-Step Merger.

The implementation of the resolution resolving on the First-Step Merger (and approving the Mergers) is conditioned upon, and subject to, (i) the Acceptance Time having occurred and (ii) the number of Shares validly tendered pursuant to the Offer and not properly withdrawn (including Shares tendered during the Subsequent Offering Period, together with the Shares owned by Stryker or its wholly-owned subsidiaries, represents at least 80% of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal). Approval of the Merger Resolutions is not an Offer Condition. If the Merger Resolutions are not approved by shareholders at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may still occur.

The affirmative vote of a majority of the votes cast at the Extraordinary General Meeting, either in person or by proxy, is required to approve the First-Step Merger if at least 50% of the issued share capital of Wright is represented, either in person or by proxy, at the Extraordinary General Meeting. If less than 50% of the issued share capital of Wright is represented, either in person or by proxy, at the Extraordinary General Meeting, two-thirds of the votes cast is required to approve the Mergers.

The Wright Board unanimously recommends that you vote “FOR” the proposal to approve the Mergers (including the First-Step Merger) as set forth in this Item 9.

 

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ITEM 10

AMENDMENT OF THE ARTICLES OF ASSOCIATION REGARDING THE DEMERGER (for resolution)

Resolution to amend Wright’s articles of association to authorize the Wright Board to resolve on a statutory demerger to an entity wholly owned by Wright.

The Wright Board proposes to resolve to amend Wright’s articles of association to authorize the Wright Board to resolve to effectuate and complete a statutory spin-off (afsplitsing) of certain assets and liabilities into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands that is wholly-owned by Wright (the “Demerger”), and to authorize the Authorized Notaries both jointly and each of them individually, to execute the notarial deed of amendment to the articles of association of Wright and to undertake all other activities that any recipient of such authorization deems necessary or useful in connection therewith.

Annex F to this proxy statement contains the notarial deed of amendment of Wright’s articles of association authorizing the Wright Board to resolve on the Demerger. We encourage you to read Annex F carefully and in its entirety.

This amendment to Wright’s articles of association shall become effective upon the execution of the notarial deed of amendment to the articles of association at a time selected by Purchaser. Adoption of the resolution to amend Wright’s articles of association to authorize the Wright Board to resolve on the Demerger is not an Offer Condition. If the Demerger Resolution is not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may still occur.

An absolute majority of the votes cast at the Extraordinary General Meeting, either in person or by proxy, is required to adopt the proposal to amend Wright’s articles of association, and authorize each member of the Wright Board as well as the Authorized Notaries both jointly and each of them individually, as set forth in this Item 10.

The Wright Board unanimously recommends that you vote “FOR” the proposal to amend Wright’s articles of association as set forth in this Item 10.

 

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ITEM 11

CONVERSION AND AMENDMENT OF THE ARTICLES OF ASSOCIATION (for resolution)

Conditional approval to (a) convert Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) and (b) amend Wright’s articles of association in connection with the conversion of Wright into a private Company with limited liability (besloten vennootschap met beperkte aansprakelijkheid).

Purchaser wishes to convert Wright from a public limited liability company (naamloze vennootschap met beperkte aansprakelijkheid) into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (the “Conversion”) as soon as practicable after the Shares have been delisted from the Nasdaq Global Select Market (“Nasdaq”).

The Wright Board proposes to resolve on the Conversion, amend the articles of association of Wright, and authorize each member of the Wright Board, as well as the Authorized Notaries, both jointly and each of them individually, to execute the notarial deed of conversion and amendment to the articles of association and to undertake all other activities that any recipient of such authorization deems necessary or useful in connection therewith.

Annex G to this proxy statement contains the draft articles of association of Wright as they would read after the Conversion and the amendment of its articles of association in connection therewith. We encourage you to read Annex G carefully and in its entirety.

In the event Stryker or Purchaser elects to implement the Conversion, which is conditioned upon and subject to the Offer Closing, the Conversion and the amendment of Wright’s articles of association in connection therewith shall become effective upon the execution of the notarial deed of conversion and amendment to the articles of association. Adoption of the Governance Resolutions (of which this conditional approval to convert Wright into a private company with limited liability and amend Wright’s articles of association is a part) is an Offer Condition. If the Governance Resolutions are not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may not occur.

The conditional approval to (a) convert Wright into a private company with limited liability and (b) amend Wright’s articles of association in connection with the conversion of Wright into a private company with limited liability and authorize each member of the Wright Board as well as the Authorized Notaries both jointly and each of them individually, as set forth in this Item 11, must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the proposals to (a) convert Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) and (b) amend Wright’s articles of association in connection with the conversion of Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), in each case as set forth in this Item 11.

 

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ITEM 12

AMENDMENT OF THE ARTICLES OF ASSOCIATION FOLLOWING DELISTING (for resolution)

Conditional approval to amend Wright’s articles of association in connection with the delisting of the Shares on Nasdaq.

The Wright Board proposes to resolve to amend the articles of association of Wright in connection with the delisting of the Shares on Nasdaq, and to authorize each member of the Wright Board, as well as Authorized Notaries, both jointly and each of them individually, to execute the notarial deed of conversion and amendment to the articles of association and to undertake all other activities that any recipient of such authorization deems necessary or useful in connection therewith.

Annex H to this proxy statement contains the draft articles of association of Wright as they would read after the amendment of its articles of association in connection with the delisting of the Shares on Nasdaq. After such amendment of Wright’s articles of association, any transfer of record ownership of Shares prior to June 1, 2022 would require the prior approval of the Wright Board. We encourage you to read Annex H carefully and in its entirety.

In the event Stryker or Purchaser elects to amend Wright’s articles of association following the delisting of the Shares from Nasdaq, which is conditioned upon, and subject to the delisting of the Shares from Nasdaq and the Offer Closing, such amendment of Wright’s articles of association contained in Annex H shall become effective upon the execution of the notarial deed of amendment to the articles of association. Adoption of the Governance Resolutions (of which this conditional approval to amend Wright’s articles of association is a part) is an Offer Condition. If the Governance Resolutions are not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may not occur.

The conditional approval to amend Wright’s articles of association, and authorize each member of the Wright Board as well as the Authorized Notaries both jointly and each of them individually, as set forth in this Item 12 must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the proposal to amend Wright’s articles of association as set forth in this Item 12.

 

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ITEM 13

FINANCIAL YEAR DEED OF AMENDMENT OF THE ARTICLES OF ASSOCIATION (for resolution)

Conditional approval to amend Wright’s articles of association to align the financial year of Wright with the financial year reckoned by Purchaser.

The Wright Board proposes to resolve to amend the articles of association of Wright to align the financial year of Wright with the financial year reckoned by Purchaser, and to authorize each member of the Wright Board, as well as Authorized Notaries, both jointly and each of them individually, to execute the notarial deed of amendment to the articles of association and to undertake all other activities that any recipient of such authorization deems necessary or useful in connection therewith.

Annex I to this proxy statement contains the notarial deed of amendment of Wright’s articles of association amending Wright’s articles of association as described in this Item 13. We encourage you to read Annex I carefully and in its entirety.

This resolution to amend Wright’s articles of association to align the financial year of Wright with the financial year reckoned by Purchaser is conditioned upon, and subject to Purchaser’s election to implement this measure and the Offer Closing. The notarial deed of amendment to Wright’s articles of association contained in Annex I shall become effective upon the execution of the notarial deed of amendment to the articles of association. Adoption of the Governance Resolutions (of which this conditional approval to amend Wright’s articles of association is a part) is an Offer Condition. If the Governance Resolutions are not adopted at the Extraordinary General Meeting (or any adjournment, postponement or cancellation and reconvention thereof), the Offer Closing may not occur.

The conditional approval of the deed of amendment, and authorization each member of the Wright Board as well as the Authorized Notaries both jointly and each of them individually, as set forth in this Item 13 must be adopted by an absolute majority of the votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the proposal to amend Wright’s articles of association as set forth in this Item 13.

 

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ITEM 14

NON-BINDING ADVISORY VOTE ON TRANSACTION-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (for non-binding resolution)

Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that we provide our shareholders with the opportunity to vote to approve, on an advisory non-binding basis, the payment of certain compensation that will or may become payable by Wright to its named executive officers in connection with the completion of the Offer, as disclosed in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement—Transaction-Related Compensation,” beginning on page 109. In general, the various plans and arrangements pursuant to which these compensation payments may be made formed part of Wright’s overall compensation program for its named executive officers, and have previously been disclosed to our shareholders as part of the Compensation Discussion and Analysis and related sections of our annual proxy statement. The Compensation Committee of the Wright Board, which is composed solely of non-executive directors, believes such compensatory arrangements to be reasonable.

The Wright Board encourages you to review carefully the named executive officer transaction-related compensation information disclosed in this proxy statement. The Wright Board unanimously recommends that you vote “FOR” the following resolution (the “Non-Binding Vote on Executive Compensation Proposal”):

“RESOLVED, that the shareholders of Wright Medical Group N.V. approve, on a nonbinding, advisory basis, the compensation that will or may become payable to Wright’s named executive officers that is based on or otherwise relates to the completion of the Offer as disclosed pursuant to Item 402(t) of Regulation S-K in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement—Transaction-Related Compensation.”

Shareholders should note that adoption of the Non-Binding Vote on Executive Compensation Proposal is not an Offer Condition and, as an advisory vote, the result will not be binding on Wright, the Wright Board, Purchaser or Stryker. Further, the underlying plans and arrangements are contractual in nature and are not, by their terms, subject to shareholder approval. Accordingly, regardless of the outcome of the advisory vote, if the Offer Closing occurs our named executive officers will be entitled to receive the compensation that is based on or otherwise relates to the Offer and the transactions in accordance with the terms and conditions applicable to those payments.

Adoption of the Non-Binding Vote on Executive Compensation Proposal requires the affirmative vote of an absolute majority of votes cast at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote “FOR” the Non-Binding Vote on Executive Compensation Proposal as set forth in this Item 14.

 

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THE OFFER AND THE OTHER TRANSACTIONS CONTEMPLATED

BY THE PURCHASE AGREEMENT

This discussion of the terms and conditions set forth in an Offer to Purchase, dated December 13, 2019 (as it may be amended or supplemented from time to time, the “Offer to Purchase”) and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) and the other transactions contemplated by a Purchase Agreement, dated as of November 4, 2019 (as it may be amended from time to time, the “Purchase Agreement”) is qualified in its entirety by reference to the Purchase Agreement, which is attached to this proxy statement as Annex A, and which is incorporated into this proxy statement by reference. You should read the entire Purchase Agreement carefully as it is the legal document that governs the transactions.

Parties Involved in the Offer and the Other Transactions Contemplated by the Purchase Agreement

Wright Medical Group N.V.

Wright Medical Group N.V. is a public limited liability company (naamloze vennootschap) organized under the laws of the Netherlands. Wright is a global medical device company focused on extremities and biologics. Wright has an official registered office and principal executive offices located at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, telephone number +31 20 521 4777. The ordinary shares, par value €0.03 per share, of Wright (the “Shares”), are traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “WMGI.”

Stryker Corporation

Stryker Corporation (“Stryker”) is a Michigan corporation. Stryker is one of the world’s leading medical technology companies and, together with its customers, is driven to make healthcare better. Stryker offers innovative products and services in orthopaedics, medical and surgical, and neurotechnology and spine that help improve patient and hospital outcomes. Stryker’s common stock is traded on the New York Stock Exchange under the symbol “SYK.”

Stryker B.V.

Stryker B.V. (“Purchaser”) is a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands. Purchaser was formed for the purpose of negotiating the Purchase Agreement and structuring and effecting the transactions contemplated thereby, including the Offer and the Post-Offer Reorganization (as defined below). Purchaser is a direct, wholly-owned subsidiary of Stryker Delaware, Inc., a Delaware corporation (“Stryker Delaware”).

Stryker Delaware, Inc.

Stryker Delaware is a Delaware corporation. Stryker Delaware was formed for the purpose of structuring and effecting the transactions contemplated by the Purchase Agreement, including the Offer and the Post-Offer Reorganization (as defined below). Stryker Delaware is a direct, wholly-owned subsidiary of Stryker.

The address of Stryker’s and Stryker Delaware’s principal executive offices is 2825 Airview Boulevard, Kalamazoo, Michigan, USA, and the telephone number at such address is +1 (269) 385-2600. The address of Purchaser’s principal executive offices is Herikerbergweg 145, Mercurius Building, 2nd floor, 1101 CN, Amsterdam, the Netherlands, and the telephone number at such address is +31 20 808 3777.

Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement

The Offer was commenced on December 13, 2019, pursuant to the Offer to Purchase, upon the terms and subject to the conditions set forth in the Purchase Agreement. Unless the Offer is earlier terminated, the Offer

 

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will expire at 5:00 p.m., New York City time, on April 30, 2020 (the “Expiration Time,” unless the Offer is extended in accordance with the Purchase Agreement, in which event “Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire).

Purchaser may extend the Offer to such other date and time as may be agreed in writing by Wright and Stryker, and will extend the Offer for the minimum period required by applicable law, rule, regulation, interpretation or position of the United States Securities and Exchange Commission (the “SEC”) or the rules of Nasdaq. Purchaser will also extend the Offer on one or more occasions in consecutive periods of up to 10 business days each if, at the then-scheduled Expiration Time, any condition to the Offer has not been satisfied or waived, in order to permit satisfaction of such condition, or for periods of up to 20 business days in case of the Regulatory Clearance Condition (as defined below) if such condition is not reasonably likely to be satisfied within such 10 business-day extension period. Purchaser may, but will not be required to, extend the Offer (a) on more than two occasions in consecutive periods of 10 business days each, if the only remaining unsatisfied condition to the Offer is the Minimum Condition (as defined below) and (b) to the business day immediately following the date that is one month after the date of the Extraordinary General Meeting (as defined below) or subsequent extraordinary general meeting at which the Merger Resolutions (as defined below) are approved. Purchaser is not required to, and cannot without the consent of Wright, extend the Offer beyond November 4, 2020 (subject to automatic extension to February 4, 2021 if, at such earlier date, all conditions to the closing of the Offer have been satisfied or waived, other than the Regulatory Clearance Condition (as defined below) and the Minimum Condition (as defined below)).

The Purchase Agreement provides, among other things, that, subject to the terms and conditions set forth therein, Purchaser will (and Stryker will cause Purchaser to), (a) at or as promptly as practicable following the Expiration Time (but in any event within two business days thereafter), accept for payment (the time of acceptance for payment, the “Acceptance Time”) and (b) at or as promptly as practicable following the Acceptance Time (but in any event within two business days (calculated as set forth in Rule 14d-1(g)(3) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) thereafter), pay for all Shares validly tendered and not properly withdrawn pursuant to the Offer as of the Acceptance Time (such time of payment, the “Offer Closing”). It is expected that following the Offer Closing, the listing of the Shares on Nasdaq will be terminated, Wright will no longer be a publicly traded company and the Shares will be deregistered under the Exchange Act, resulting in the cessation of Wright’s reporting obligations with respect to the Shares with the SEC.

Following the Acceptance Time, except as described below, Purchaser will (and Stryker will cause Purchaser to) provide for a subsequent offering period of at least 10 business days in accordance with Rule 14d-11 promulgated under the Exchange Act and in accordance with the Purchase Agreement (the “Subsequent Offering Period”). In the event that prior to the expiration of any such Subsequent Offering Period, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Asset Sale, Purchaser will (and Stryker will cause Purchaser to) extend the Subsequent Offering Period for at least five business days to permit any remaining minority shareholders to tender their Shares in exchange for $30.75 per Share, without interest and less applicable withholding taxes, to the holders thereof, payable in cash (the “Offer Consideration”) (such extension, the “Minority Exit Offering Period”). In the event that promptly following the Expiration Time, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Mergers (as defined below), Purchaser will not be required to provide either a Subsequent Offering Period or Minority Exit Offering Period, but may do so if Purchaser chooses. Under no circumstance will interest be paid on the Offer Consideration paid pursuant to the Offer, regardless of any extension of the Offer, any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period) or any delay in making payment for Shares.

Following the later of the Offer Closing and the closing of any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period), Stryker or Purchaser intend to effectuate or cause to be effectuated a corporate reorganization of or involving Wright and its subsidiaries (the “Post-Offer

 

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Reorganization”). The Post-Offer Reorganization will utilize processes available to Purchaser under Dutch and other applicable law aimed at strengthening Stryker’s direct or indirect control over Wright or its assets and business operations. More specifically, the Asset Sale (as defined below) and Liquidation (as defined below), the Mergers (as defined below) and the Compulsory Acquisition (as defined below) would ensure that Purchaser or one of its affiliates becomes the owner of all or substantially all of Wright’s business operations from and after the consummation of such Post-Offer Reorganization. In the event the Asset Sale and Liquidation, the Mergers or the Compulsory Acquisition are consummated, Wright will either be liquidated, disappear or become wholly owned by Purchaser.

In the event that the Asset Sale and Liquidation is implemented, which is subject to (a) the approval of the Asset Sale Resolutions by Wright shareholders at the extraordinary general meeting of Wright to be held on April 24, 2020 at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, at 12:00 p.m., central European time (the “Extraordinary General Meeting” (or any subsequent extraordinary general meeting) and (b) the Acceptance Time having occurred and the number of Shares validly tendered pursuant to the Offer and not properly withdrawn (including Shares tendered during the Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period), together with the Shares owned by Stryker or its wholly-owned subsidiaries, representing at least 80% of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal) (the “Reorganization Threshold”), any Wright shareholders who did not tender their Shares pursuant to the Offer (including during the Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period) will receive for each Share held immediately prior to completion of the Asset Sale cash in an amount equal to the Offer Consideration, without interest and less applicable withholding taxes. Upon consummation of the Asset Sale: (a) Wright will hold only the cash received in the Asset Sale and certain other immaterial assets and liabilities; (b) Purchaser (or an affiliate of Purchaser) will (i) own all of Wright’s business operations and (ii) be the principal shareholder in Wright; and (c) the non-tendering Wright shareholders will continue to own Shares representing, in the aggregate, a minority of the Shares then outstanding. As soon as practicable following consummation of the sale, transfer and assumption of the business of Wright, including substantially all of the assets and liabilities of Wright, to or by Purchaser (or an affiliate of Purchaser) (the “Asset Sale”), the liquidator of Wright would then complete the liquidation and dissolution of Wright (the “Liquidation”) in accordance with applicable Dutch procedures, with Purchaser (or an affiliate of Purchaser) providing certain funds and indemnities to enable the liquidator to make an immediate advance liquidation distribution (the “Second Step Distribution”) to a settlement agent on behalf of each non-tendering Wright shareholder of an amount in cash for each Share held immediately prior to the completion of the Asset Sale equal to the Offer Consideration, without interest and less applicable withholding taxes, for each Share then owned by such non-tendering Wright shareholder. No compensation will be paid to non-tendering Wright shareholders for any administrative costs charged by banks in relation to the transfer of the Second Step Distribution to their bank account or otherwise.

In the event that the Mergers are implemented, which is subject to (a) the approval of the Merger Resolutions by Wright shareholders at the Extraordinary General Meeting (or any subsequent extraordinary general meeting) and (b) the Acceptance Time having occurred and the Reorganization Threshold having been achieved, Wright and Purchaser will complete a series of mergers whereby (i) Wright will merge with and into a Luxembourg société anonyme that is a direct, wholly-owned subsidiary of Wright (“Wright Luxembourg”) with Wright Luxembourg surviving the merger (the “First-Step Merger”), (ii) Wright Luxembourg will merge with and into a Bermuda exempted company that is a direct, wholly-owned subsidiary of Wright Luxembourg (“Wright Bermuda”) with Wright Bermuda surviving the merger (the “Second-Step Merger”) and (iii) a Bermuda exempted company formed by Stryker as a wholly-owned subsidiary of Purchaser will merge with and into Wright Bermuda with Wright Bermuda surviving the merger (the “Third-Step Merger” and, together with the First-Step Merger and the Second-Step Merger, the “Mergers”). Upon completion of the Mergers, any Wright shareholders who did not tender their Shares pursuant to the Offer will no longer have any equity interest in the surviving entities from such Mergers and will ultimately receive, for each Share held immediately prior to the completion of the First Step Merger, cash in an amount equal to the Offer Consideration. Such amount would be without interest and less applicable withholding taxes. Stryker and Purchaser have no current intention to require the deduction and withholding of any amounts under any tax law in respect of any amounts payable upon

 

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completion of the Mergers to any Wright shareholders who did not tender their Shares pursuant to the Offer and who do not exercise any Merger Withdrawal Right (as defined below), but such tax deduction and withholding will take place to the extent required under applicable tax law. In the event that a Wright shareholder exercises a Merger Withdrawal Right, then any cash compensation paid to such withdrawing Wright shareholder will be subject to Dutch dividend withholding tax (dividendbelasting) at the statutory rate of 15% to the extent that the amount of the cash compensation exceeds the average paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes (which amount may be subject to an advance tax clearance by the Dutch tax authorities on the amount of paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes) subject to any exemption, reduction or refund that may be available to such withdrawing Wright shareholder. As a result, the net amount received by such withdrawing Wright shareholder may be lower than the amount that they would have received had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period).

Upon completion of the Mergers, Wright will be an indirect, wholly-owned subsidiary of Stryker. No compensation will be paid to non-tendering Wright shareholders for any administrative costs charged by banks in relation to the transfer of the cash proceeds of the Third-Step Merger to their bank account or otherwise.

In the event that a compulsory acquisition procedure (uitkoopprocedure) of non-tendered Shares as provided by Dutch law (the “Compulsory Acquisition”) is permissible under applicable law and implemented, then Shares held by non-tendering Wright shareholders will be acquired in accordance with Section 2:92a or Section 2:201a of the Dutch Civil Code. In that circumstance, the Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeals (Gerechtshof Amsterdam) (the “Dutch Court”) will determine the price to be paid for the non-tendered Shares. The Dutch Court has sole discretion to determine such price, and the Dutch Court will select a reference date on which to value the Shares for purposes of determining such price (the “Reference Date”). If the Compulsory Acquisition is commenced shortly following the Offer Closing and at the Offer Closing the Purchaser and its affiliates hold at least 95% of Wright’s issued and outstanding capital (geplaatst en uitstaand kapitaal) (the “Compulsory Acquisition Threshold”), it is expected that the Reference Date will be the date of the Offer Closing and that the per Share price paid in the Compulsory Acquisition will be equal to the Offer Consideration. If Purchaser has not achieved the Compulsory Acquisition Threshold at the time of the Offer Closing but does so shortly afterwards and then commences the Compulsory Acquisition, the Dutch Court will generally use as a Reference Date the earlier of (i) the date on which Purchaser demonstrates it has achieved the Compulsory Acquisition Threshold and (ii) the date on which the Dutch Court renders an interim judgment preliminarily allowing the claim for the Compulsory Acquisition. The Share price determined by the Dutch Court may be greater than, equal to or less than the Offer Consideration. Such price will be increased by Dutch Statutory Interest accrued at the rate applicable in the Netherlands (currently 2% per annum) from the Reference Date. The end of the period for the calculation of the Dutch Statutory Interest would be the date Purchaser pays for the Shares then owned by the non-tendering Wright shareholders (whether directly or through a payment made to the relevant governmental authority in the Netherlands). Upon execution (tenuitvoerlegging) of the Dutch Court’s ruling in the Compulsory Acquisition, each non-tendering Wright shareholder will receive the per Share price determined by the Dutch Court and Purchaser will become the sole shareholder of Wright. If payment by Purchaser is made to the relevant governmental authority in the Netherlands, rather than directly to non-tendering Wright shareholders, such shareholders may only seek their consideration directly from such governmental authority in the Netherlands. Upon completion of the Compulsory Acquisition, Wright will be an indirect, wholly-owned subsidiary of Stryker. No compensation will be paid to non-tendering Wright shareholders for any administrative costs charged by banks in relation to the transfer of the cash proceeds of the Compulsory Acquisition to their bank account or otherwise.

The applicable withholding taxes and other taxes, if any, imposed on non-tendering Wright shareholders in respect of any Post-Offer Reorganization may be different from, and greater than, the taxes imposed upon such Wright shareholders had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period, as it may be extended by the Minority Exit Offering Period).

 

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It is possible that Purchaser may not be able to, or may elect not to, implement any proposed Post-Offer Reorganization after the consummation of the Offer, or that such Post-Offer Reorganization may be delayed or unable to be completed. Any Post-Offer Reorganization could be the subject of litigation, and a court could delay the Post-Offer Reorganization or prohibit it from occurring on the terms described in the Offer to Purchase, or from occurring at all. Moreover, even if Purchaser is able to effect any proposed Post-Offer Reorganization, the consideration that Wright shareholders receive therefrom may be different than the consideration that they would have received had they tendered their Shares in the Offer (and they may also be subject to increased or additional taxes).

Following completion of the Offer, the Board of Directors (bestuur) of Wright (the “Wright Board”) will be comprised of seven directors, at least five of whom have been designated in writing by Stryker and Purchaser and who are Spencer S. Stiles, William E. Berry, Jr., Dean H. Bergy, Jeanne M. Blondia and David G. Furgason, and at least two of whom are current non-executive directors of Wright designated by Wright and Purchaser by mutual written agreement and who will at all times be independent from Stryker and Purchaser and qualify as independent under the Dutch Corporate Governance Code 2008 (the “Independent Directors”), and who are Gary D. Blackford and David D. Stevens.

The two Independent Directors will, in accordance with Dutch practice, look after the corporate interest of Wright and the interests of all stakeholders of Wright, including the interests of any non-tendering shareholders of Wright.

Each Independent Director will resign from the Wright Board upon the earliest of (a) such time after the Acceptance Time as Purchaser and its affiliates, in the aggregate, own 100% of the issued and outstanding Shares, including pursuant to the Mergers and (b) the Second Step Distribution having been made and the Liquidation having been completed.

The affirmative vote of the Independent Directors will be required for approving (a) any restructuring that would reasonably be expected to lead to a dilution of the shareholdings of the non-tendering Wright shareholders, other than (i) pursuant to a rights issue by Wright or any other share issue where the non-tendering Wright shareholders have been offered an opportunity to subscribe pro rata to their then existing shareholding in Wright (voorkeursrecht), (ii) the Asset Sale, the Liquidation and the Second Step Distribution, (iii) the Mergers or (iv) the Compulsory Acquisition and (b) any other form of unequal treatment that prejudices or would reasonably be expected to prejudice or negatively affect the value of the Shares or voting rights attached to the Shares held by the non-tendering Wright shareholders, but in any event not including (i) the Asset Sale, the Liquidation and the Second Step Distribution, (ii) the Mergers or (iii) the Compulsory Acquisition.

The Offer is conditioned upon, among other things, (a) the Purchase Agreement not having been terminated pursuant to its terms and (b) the satisfaction or waiver (to the extent permitted by the Purchase Agreement and applicable law) of the following as of the scheduled Expiration Time: (i) the Minimum Condition; (ii) the Regulatory Clearance Condition; (iii) the Legal Restraints Condition; (iv) the Governance Resolutions Condition; and (v) the Material Adverse Effect Condition, each as defined below.

The “Minimum Condition” requires that there have been validly tendered pursuant to the Offer, and not properly withdrawn, a number of Shares (excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been delivered in settlement or satisfaction of such guarantee prior to the Expiration Time) that, together with the Shares then owned by Stryker or its wholly-owned subsidiaries, represents at least 95% of Wright’s issued and outstanding share capital (geplaatst en uitstaand kapitaal) immediately prior to the Expiration Time, provided that, Purchaser may, in its sole discretion, reduce the required threshold to a percentage not less than 80%, provided, further, that if, prior to the Expiration Time, the Asset Sale Resolutions, the Merger Resolutions and the Demerger Resolution are adopted at the Extraordinary General Meeting or any subsequent extraordinary general meeting, the required threshold will be reduced to 80%.

 

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The “Regulatory Clearance Condition” requires the expiration or termination of any applicable waiting period (and extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and certain other applicable regulatory or antitrust laws, and the receipt of any relevant approvals, consents or waivers obtained pursuant to such laws, which, in each case, do not impose a condition or require a remedy that Stryker is not required to accept or agree to under the terms of the Purchase Agreement.

The “Legal Restraints Condition” requires that there is no law, regulation, judgment, injunction, order, decree or ruling (whether temporary, preliminary or permanent) entered, enacted, promulgated, enforced or issued by any court or other governmental body of competent jurisdiction in effect that prohibits, renders illegal or enjoins, the consummation of the Offer, the Asset Sale, the Compulsory Acquisition, the Liquidation, the Second Step Distribution, the Mergers or the other transactions contemplated by the Purchase Agreement or that imposes a condition or requires a remedy that Stryker is not required to accept or agree to under the terms of the Purchase Agreement.

The “Governance Resolutions Condition” requires that, at the Extraordinary General Meeting or a subsequent extraordinary general meeting, Wright shareholders have adopted the Governance Resolutions.

The “Material Adverse Effect Condition” requires that no change, effect, event, inaccuracy, occurrence or other matter has occurred following the date of the Purchase Agreement that has had, or would reasonably be expected to have, individually or in the aggregate, a Wright Material Adverse Effect (as defined in the Purchase Agreement).

The Offer is not subject to a financing condition but is subject to other conditions as described in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Certain Effects of the Offer and the Other Transactions Contemplated by the Purchase Agreement,” beginning on page 47.

Effect on Wright if the Offer is Not Completed

If the Offer is not completed, Wright shareholders will not receive the Offer Consideration pursuant to the Offer and the Extraordinary General Meeting Proposals will have no effect. Instead, Wright would remain an independent public company, your Shares would continue to be listed and traded on Nasdaq and registered under the Exchange Act and Wright would continue to file periodic reports with the SEC.

In the event of certain terminations of the Purchase Agreement, Wright will be required to pay Stryker a termination fee in an amount equal to $150 million as described in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Termination Fee,” beginning on page 98.

Offer Consideration

If you tender your Shares in the Offer, upon completion of the Offer, you will be entitled to receive the Offer Consideration of $30.75 per Share, without interest and less applicable withholding taxes, payable in cash, upon the terms and subject to the conditions set forth in the Purchase Agreement and the Offer to Purchase. For example, if you own 100 Shares, you will receive $3,075 in cash in exchange for your Shares, without interest and less applicable withholding taxes, upon the terms and subject to the conditions set forth in the Purchase Agreement and the Offer to Purchase. If you are the record owner of your Shares and you tender your Shares directly to American Stock Transfer & Trust Company, LLC (the “Depositary”), you will not have to pay brokerage fees, commissions, or similar expenses. If you own your Shares through a broker, dealer, commercial bank, trust company, or other nominee and your broker, dealer, commercial bank, trust company, or other nominee tenders your Shares on your behalf, your broker, dealer, commercial bank, trust company, or nominee may charge you a fee for doing so. You should consult your broker, dealer, commercial bank, trust company, or nominee to determine whether any charges will apply.

 

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Background of the Offer

The following chronology summarizes the key contacts and events between representatives of Wright and representatives of Stryker, and between representatives of Wright and representatives of other potential parties to a strategic transaction during the period preceding the signing of the Purchase Agreement. The following description does not purport to catalogue every conversation among representatives of Wright, Stryker or other third parties. For a review of Stryker’s additional key activities that led to the signing of the Purchase Agreement, please refer to the Schedule TO and Offer to Purchase.

The Wright Board, along with Wright’s management, regularly reviews Wright’s operations, financial condition and performance, capital structure, and long-term strategic plans. As part of this ongoing review, the Wright Board has regularly considered a variety of options to maximize shareholder value and benefit other stakeholders of Wright, including acquisitions, dispositions, and other financial and strategic alternatives, considering, in each instance, Wright’s business strategy, changes in the industry in which Wright operates, and execution risks.

On March 22, 2019, Robert J. Palmisano, Wright’s President and Chief Executive Officer, met with the Chief Executive Officer of a large medical device company, which we refer to as Party A. During the meeting, the Chief Executive Officer of Party A stated that Party A was interested in a potential strategic transaction with Wright, but did not propose a price, structure or other terms of a potential transaction. Following the meeting, the Chief Executive Officer of Party A sent a message to Mr. Palmisano emphasizing Party A’s interest in Wright.

On March 24, 2019, Mr. Palmisano and Lance A. Berry, Wright’s Executive Vice President, Chief Financial and Operations Officer, played golf with Kevin A. Lobo, Chairman and Chief Executive Officer of Stryker, and Gordon Van Ummersen, Vice President and General Manager, Extremities of Stryker. During the game, Mr. Lobo stated to Mr. Palmisano that Stryker was evaluating potential business development opportunities and may contact Wright in the summer of 2019 to discuss a potential strategic transaction. Mr. Lobo did not provide any further details about a potential transaction, including price, structure or other terms.

On June 10, 2019, the Chief Executive Officer of Party A contacted Mr. Palmisano to request a meeting to continue the prior discussions about Party A’s interest in Wright.

On June 21, 2019, Mr. Palmisano and Jason D. Asper, Wright’s Senior Vice President, Chief Digital Officer and head of business development, met with the Chief Executive Officer and another representative of Party A. During the meeting, the Chief Executive Officer of Party A expressed interest in acquiring only certain of Wright’s product lines, and explained that Party A would only pursue an acquisition of the entire company if it could first identify a partner that would acquire the portion of Wright’s business that Party A was not prepared to acquire. Additionally, the Chief Executive Officer of Party A noted that Party A would require additional financing to fund an acquisition of all or part of Wright. The parties agreed that they would enter into a confidentiality agreement after which Wright would provide certain non-public information regarding its business to assist Party A’s evaluation of a potential transaction.

On June 26, 2019, Wright and Party A entered into a confidentiality agreement, which did not contain a standstill provision.

On July 16, 2019, Mr. Lobo contacted Mr. Palmisano to propose a meeting to discuss Stryker’s current analysis of Wright. Mr. Lobo stated that he would not be making an offer during the meeting.

On July 26, 2019, the Wright Board held a regularly scheduled, in-person meeting, a portion of which was attended by representatives of Guggenheim Securities, LLC (“Guggenheim Securities”), a financial advisor to Wright. During the meeting, representatives of Guggenheim Securities made a presentation about strategic alternatives for Wright, including a potential sale of Wright, and market conditions. The representatives also responded to questions from the Wright Board about potential business development opportunities.

 

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On July 31, 2019, representatives of a large multinational corporation, which we refer to as Party B, met with Messrs. Palmisano and Berry to discuss potential collaborations. Party B did not express interest in an acquisition of Wright at that time. Between July 31 and September 5, 2019, representatives of Wright and Party B had multiple calls to discuss potential collaborations and to negotiate the terms of a confidentiality agreement that was not ultimately executed.

On August 7, 2019, after the close of trading on Nasdaq, Wright reported its financial results for the quarter ended June 30, 2019, which had not previously been discussed with Stryker, Party A or Party B. On August 8, 2019, Wright’s stock price dropped approximately 21.5%.

Also on August 7, 2019, Wright provided Party A with access to an electronic data room that included limited non-public information about Wright. Between August 7 and September 9, 2019, representatives of Wright had periodic calls with a representative of Party A regarding diligence.

On August 12, 2019, Mr. Palmisano and Mr. Lobo held a breakfast meeting. During the meeting, Mr. Lobo confirmed his earlier statement that Stryker would not make an offer to acquire Wright at that time and noted Stryker’s concerns about Wright’s financial performance and projections. Mr. Palmisano suggested that a meeting between the companies’ respective chief financial officers could help Stryker better understand Wright’s longer-term financial outlook. Later that day, Mr. Palmisano updated Mr. Berry about the meeting with Mr. Lobo, explaining that Stryker was not interested in acquiring Wright at that time, but that Mr. Lobo had agreed that a meeting between Mr. Berry and Glenn Boehnlein, Stryker’s Chief Financial Officer, might be useful.

On August 16, 2019, the Chief Executive Officer of a multinational medical device company, which we refer to as Party C, placed an unsolicited call to Mr. Palmisano to propose a meeting the following week to discuss their respective businesses and the industry. Party C’s Chief Executive Officer did not mention a potential transaction during the call.

On August 22, 2019, Mr. Palmisano and the Chief Executive Officer of Party C met for dinner. During the meeting, the Chief Executive Officer of Party C informed Mr. Palmisano that Party C had completed significant diligence on Wright based on public information and was interested in acquiring Wright. He did not propose a price or other terms for a transaction. They agreed to set up a meeting between certain members of Wright’s and Party C’s respective management teams so that Party C could learn more about Wright.

On August 30, 2019, in anticipation of a meeting among certain members of their management teams, Wright and Party C entered into a confidentiality agreement, which included a 12-month standstill provision that terminated upon the effectiveness of the Purchase Agreement.

On September 4, 2019, representatives of a large multinational medical device company, which we refer to as Party D, expressed interest in meeting with representatives of Wright at the American Orthopaedic Foot & Ankle Society’s annual meeting in Chicago, Illinois in September 2019 to discuss potential business development opportunities. A meeting was tentatively scheduled but never took place.

On September 5, 2019, the Wright Board held a telephonic meeting that was attended by members of Wright management. During the meeting, Mr. Palmisano updated the Wright Board about discussions with third parties that had occurred since the July 26, 2019 Wright Board meeting (including the unsolicited call from and follow-up dinner meeting with Party C’s Chief Executive Officer), and the members of the Wright Board and management discussed the upcoming meeting with Party C.

On September 6, 2019, Messrs. Palmisano, Berry and Asper held an in-person meeting with the Chief Executive Officer and other representatives of Party C in Boston, Massachusetts. During the meeting, Wright’s management presented about Wright and responded to diligence questions from Party C. The representatives of Party C confirmed Party C’s interest in acquiring Wright and stated that it would soon submit a written proposal.

 

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On September 9, 2019, Messrs. Berry and Asper, attended a previously scheduled dinner meeting with Mr. Boehnlein and Katherine Owen, Stryker’s Vice President, Strategy and Investor Relations, during which they discussed Wright’s publicly disclosed financial results and projections.

On September 10, 2019, the Chief Executive Officer of Party C called Mr. Palmisano to confirm Party C’s interest in acquiring Wright and said that Party C would submit a non-binding indication of interest the following day, the key terms of which he summarized.

On September 11, 2019, Party C sent Mr. Palmisano a non-binding indication of interest (the “September 11 Letter”) proposing to acquire Wright for $29.00 per share, 75% of which would be in cash and 25% of which would be in Party C equity. The September 11 Letter also requested an exclusive negotiating period lasting until October 30, 2019 with an automatic extension of 14 days if both parties were working in good faith towards the execution of a definitive transaction agreement.

On September 11, 2019, following receipt of the September 11 Letter, Mr. Palmisano called Mr. Lobo to inform him that Wright had received a written proposal to acquire Wright and suggested that if Stryker was interested in acquiring Wright, it should submit a proposal prior to a September 19, 2019 meeting of the Wright Board. Mr. Lobo told Mr. Palmisano that he appreciated the call but that Stryker remained unlikely to make an offer at this time. Mr. Lobo did, however, commit to discuss a potential transaction internally and respond.

Also on September 11, 2019, following receipt of the September 11 Letter, during a previously scheduled in-person meeting regarding unrelated topics, representatives of Guggenheim Securities, at the direction of Mr. Palmisano, informed Party B that Wright had received an acquisition proposal from a third party. Also at the direction of Mr. Palmisano, the representatives of Guggenheim Securities suggested that Party B submit a proposal prior to the Wright Board’s September 19, 2019 meeting if it was interested in acquiring Wright. Separately, at the direction of Mr. Palmisano, representatives of Guggenheim Securities also contacted representatives of Party D to advise them that Wright had received an acquisition proposal from a third party and provided substantially similar guidance with respect to submitting an acquisition proposal as provided to Party B.

On September 12, 2019, the Wright Board held a telephonic meeting with members of Wright management and representatives of Guggenheim Securities in attendance. During the meeting, Mr. Palmisano advised the Wright Board that the previous day Party C had delivered to Wright a non-binding written proposal to acquire Wright and he summarized its key economic terms. Mr. Palmisano also updated the Wright Board on the status of discussions with other third parties, including his conversation with Mr. Lobo the previous evening and Guggenheim’s conversations with Parties B and D, about which the Guggenheim Securities representatives elaborated. Mr. Palmisano further advised the Wright Board that he had a call scheduled for later that day with the Chief Executive Officer of Party A, during which he intended to deliver substantially the same message he had delivered to Mr. Lobo the previous evening. The Wright Board discussed with Wright management and representatives of Guggenheim Securities the possibility of contacting additional parties to assess their interest in pursuing a transaction with Wright, including the risks and benefits of such outreach, and the probability of success. Following the discussion, the Wright Board directed Mr. Palmisano to inform Party C that the Wright Board was evaluating its proposal and intended to respond following a meeting on September 19, 2019. The Guggenheim Securities representatives then outlined a proposed bidding process in the event any parties in addition to Party C expressed an interest in acquiring Wright. The Guggenheim representatives then departed the meeting. After the representatives of Guggenheim Securities departed the meeting, the Wright Board discussed formally engaging Guggenheim Securities as a financial advisor to Wright. The Wright Board noted Guggenheim Securities’ existing relationship with Wright and its extensive experience with medical device companies and mergers and acquisitions, and noted Guggenheim Securities’ report of past work for, and other relationships with, Wright and potential counterparties. After discussion, the Wright Board authorized management to negotiate and execute an engagement letter with Guggenheim Securities.

On September 12, 2019, following the Wright Board meeting, at the request of the Wright Board, Mr. Palmisano sent an email to the Chief Executive Officer of Party C to inform him that the Wright Board had

 

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reviewed the September 11 Letter and intended to discuss it further on September 19, 2019 after which Mr. Palmisano would provide a more complete response.

Also on September 12, 2019, following the Wright Board meeting, Mr. Palmisano spoke with the Chief Executive Officer of Party A and delivered the message Mr. Palmisano described during the Wright Board meeting.

On September 18, 2019, Mr. Lobo called Mr. Palmisano and informed him that after internal deliberations, Stryker proposed to acquire Wright for $30.00 per share in cash, but Mr. Lobo did not propose additional terms for a potential transaction. That same day, Party A informed Guggenheim Securities that it would not be able to submit a proposal to acquire Wright without a partner, and Party B and Party D each informed Guggenheim Securities that it would not submit a proposal at this time.

On September 19, 2019, the Wright Board held a telephonic meeting attended by members of Wright management and representatives of Guggenheim Securities. During the meeting, Mr. Palmisano and representatives of Guggenheim Securities reported on their recent interactions with potential counterparties, including Stryker’s proposal and the decisions of Party A, Party B and Party D not to make proposals at this time. The Wright Board discussed the status of the transaction process and, following discussion, the Wright Board determined to continue discussions with Stryker and Party C and instructed management to make non-public information about Wright available to those parties following execution of an appropriate confidentiality agreement by Stryker.

On September 22, 2019, Wright and Stryker entered into a confidentiality agreement, which included a 12-month standstill provision.

On September 24, 2019, Wright provided Stryker and Party C access to an electronic data room that included non-public information about Wright. Between September 24, 2019 and October 18, 2019, representatives of Wright held separate in-person diligence meetings and calls with representatives of Stryker and Party C regarding various aspects of Wright’s business. Wright and its representatives also hosted visits at certain of its facilities, and responded to extensive diligence requests, from representatives of Stryker and Party C.

On September 25, 2019, Wright sent letters to Stryker and Party C outlining Wright’s process for evaluating a potential transaction, including that final price proposals would be due on October 24, 2019.

On each of September 27, 2019 and October 3, 2019, representatives of Ropes & Gray LLP (“Ropes & Gray”), outside counsel to Wright, and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), outside counsel to Stryker, held telephonic meetings to discuss the structure of a potential transaction.

On October 3, 2019, Wright entered into an engagement letter with Guggenheim Securities.

Between October 7 and 9, 2019, representatives of Wright met separately with representatives of Stryker and Party C in Boston, Massachusetts to make presentations about Wright and to hold diligence sessions focused on specific functional areas of Wright.

On October 8, 2019, Ropes & Gray distributed a draft purchase agreement to Stryker and Party C. The draft agreement included, among other things, a termination fee payable by Wright in certain circumstances equal to 1% of Wright’s equity value and a commitment by the acquiror to take all actions necessary to obtain regulatory clearances for the transaction.

On October 18, 2019, the Wright Board held a telephonic meeting with Wright management and representatives of Guggenheim Securities and Ropes & Gray in attendance. Mr. Palmisano provided an update on the status of the diligence process, summarized recent interactions with the potential counterparties and previewed the next steps of the process, including the anticipated receipt of draft purchase agreements and financial proposals from Stryker and Party C the following week.

 

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On October 20, 2019, a representative of Party C called Mr. Palmisano to notify him of an announcement Party C would make the following day. Following that announcement on October 21, 2019, the Chairman of Party C’s Board of Directors called Mr. Palmisano to inform him that, although Party C remained interested in a potential transaction, in light of its announcement, it would be a challenge for Party C to submit a proposal to acquire Wright on the schedule proposed by Wright. The Chairman of Party C’s Board of Directors did not indicate that Party C would not submit a proposal and said that Party C would contact Wright with an update later in the week.

On October 21, 2019, Skadden, on behalf of Stryker, sent Ropes & Gray a revised draft of the purchase agreement. The revised draft purchase agreement provided, among other things, that under certain circumstances Wright would owe Stryker a termination fee equal to 4.0% of the equity value of the transaction (including all amounts payable with respect to Wright’s convertible notes), that the Wright Board would only be permitted to accept an alternative acquisition proposal if such proposal was for a cash amount at least 10% greater than the value of the consideration offered by Stryker, and that Stryker’s obligation to divest assets in order to obtain regulatory clearances would be limited to divestitures of total ankle replacement products and services.

On October 22, 2019, a representative of Wright sent an email to representatives of Stryker indicating certain key changes in the proposed purchase agreement submitted by Stryker were not acceptable to Wright, including the amount of the termination fee, the incremental cash amount required for an alternative proposal to be deemed a superior proposal that Wright could accept, and Stryker’s limited commitment to divest assets in order to obtain regulatory approvals.

On October 23, 2019, a financial advisor who Wright had engaged in the past contacted Mr. Berry to advise him that a medical device company, which we refer to as Party E, was interested in exploring a potential merger of equals between Wright and Party E. No specific terms of a potential transaction were proposed.

On October 24, 2019, Stryker submitted a written proposal to acquire Wright for $30.25 per share in cash. Following the submission, a representative of Stryker called Mr. Palmisano to discuss the proposal. Mr. Palmisano expressed disappointment with Stryker’s proposed price and proposed a price of $32.00 per share. The representative of Stryker agreed to discuss the matter internally. Later that day, the same representative of Stryker called Mr. Palmisano again and said Stryker would increase its proposed purchase price to $30.50 per share in cash. Mr. Palmisano responded on the call with a proposal of $31.00 per share, which the representative of Stryker also agreed to discuss internally.

Also on October 24, 2019, a representative of Party C’s financial advisor notified Wright that Party C would not submit a proposal to acquire Wright on that day.

On October 25, 2019, the Wright Board held a regularly scheduled, in-person meeting, a portion of which was attended by members of Wright management and representatives of Ropes & Gray, Guggenheim Securities, and J.P. Morgan Securities LLC (“J.P. Morgan”), a financial advisor to Wright. During the meeting, Mr. Palmisano provided an update on recent interactions with Stryker and Party C, and a representative of Guggenheim Securities reported on its discussions with Party C’s financial advisor. Both Wright management and the representatives of Guggenheim Securities shared their views that, in light of its October 21 announcement, Party C was unlikely to make a proposal in the near-term. A representative of Ropes & Gray outlined the Wright Board’s fiduciary duties in considering a sale of Wright and noted that no director had identified any potential conflicts with Stryker or Party C, including through ownership of securities, employment or consulting arrangements, or personal or family relationships. The representative of Ropes & Gray also noted that Guggenheim Securities and J.P. Morgan had each provided the Wright Board with information regarding their prior work for Wright, Stryker and Party C, and J.P. Morgan also had provided information regarding an affiliate of J.P. Morgan being a counterparty to certain of Wright’s convertible note hedging arrangements. The representative of Ropes & Gray summarized the key terms of the draft purchase agreement received from Stryker and a representative of Guggenheim Securities provided its preliminary financial analysis of the proposed

 

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transaction with Stryker. During the presentations, the Wright Board asked questions and discussed the proposed transaction, as well as potential alternative courses of action, including continuing as an independent company, and the potential risks and benefits of each option. Following the discussion, the Wright Board instructed management and Wright’s advisors to seek to increase the price proposed by Stryker and to negotiate a higher level of closing certainty in the purchase agreement.

During the Wright Board meeting, Mr. Palmisano received a phone call from Mr. Lobo during which Mr. Lobo agreed to increase Stryker’s proposal to $30.75 in cash, but stated Stryker was unwilling to increase the proposed price further. Mr. Palmisano agreed to discuss this with the Wright Board and reiterated that closing certainty was a critical issue for Wright. Later in the meeting, Mr. Palmisano received a phone call from the Chairman of Party C’s Board of Directors who advised Mr. Palmisano that, while Party C remained interested in a potential transaction with Wright, it would likely not be in a position to pursue a transaction with Wright until February 2020 at the earliest.

Between October 25, 2019 and November 3, 2019, representatives of Wright and Stryker, together with Ropes & Gray and Skadden, at the direction of their respective clients, negotiated the terms of the purchase agreement. Among the key areas of negotiation were Stryker’s commitment to divest assets in order to obtain regulatory clearances; the material adverse effect definition; the Wright Board’s ability to accept a superior proposal and to change its recommendation, including whether a competing proposal must be for all cash consideration and at least a certain amount greater than Stryker’s proposed price; and the size of the termination fee.

On October 25, 2019, the financial advisor who had called about Party E again contacted Mr. Berry to discuss a potential merger of equals between Wright and Party E, but did not provide more specific details about the potential transaction.

On October 31, 2019, the Wright Board held a telephonic meeting attended by members of Wright management. Mr. Palmisano provided an update on the status of contract negotiations with Stryker.

On Friday November 1, 2019, after the close of trading on Nasdaq, Bloomberg reported that Wright was exploring a sale.

On November 2, 2019, Party E sent Mr. Palmisano and the Chairman of the Wright Board a non-binding proposal to acquire Wright for $30.00 per share, 40% of which would be cash and 60% of which would be Party E equity. The proposal was subject to diligence and indicated that Party E intended to issue debt and new equity to fund the cash portion of the purchase price but had not yet secured commitments from potential financing sources. The same day, a representative of Party E called the Chairman of the Wright Board to deliver the proposal orally.

On November 3, 2019, the Wright Board held a telephonic meeting, which was attended by members of Wright management and representatives of Guggenheim Securities, J.P. Morgan and Ropes & Gray. Mr. Palmisano summarized the status of discussions with Stryker and developments since the Wright Board’s meeting on October 31, 2019. A representative of Ropes & Gray then outlined the Wright Board’s fiduciary duties. The Wright Board discussed Party C’s indication that it would not be able to pursue a transaction until at least February 2020, and Party E’s proposal, which the Wright Board noted (1) contained a nominal price below the all-cash price in Stryker’s proposal, (2) was subject to substantial conditionality, (3) proposed a consideration package substantially weighted towards equity, rather than cash, and (4) indicated that Party E would need at least two additional weeks to complete diligence and negotiate a transaction agreement, during which time Stryker may determine not to pursue the proposed transaction. The representative of Ropes & Gray noted that neither Party C nor Party E would be subject to any standstill restrictions that would preclude a bid if a transaction with Stryker were announced. The representative of Ropes & Gray then summarized the terms of the proposed purchase agreement with Stryker, which had been provided to the Wright Board in advance of the

 

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meeting, highlighting, among other things, the proposed $150 million termination fee, the nature of Stryker’s obligations to obtain regulatory approvals, and Wright’s ability to accept superior proposals in certain circumstances. Representatives of Guggenheim Securities reviewed its financial analysis of the Offer Consideration and provided an analysis of the proposal received from Party E, including Guggenheim Securities’ preliminary view of the Party E equity that comprised a substantial portion of the proposal. Following its presentation, Guggenheim Securities rendered an oral opinion, confirmed by delivery of a written opinion dated November 3, 2019, to the Wright Board to the effect that, as of that date and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (other than in the case of any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration) was fair, from a financial point of view, to such holders. The Wright Board continued its discussion of the proposed transaction and considered the reasons for and against the transaction described under “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement” on page 59 of this proxy statement. At the conclusion of this discussion, after consideration of the matters presented, the Wright Board unanimously voted to approve the proposed transaction with Stryker. The Wright Board also approved formally engaging J.P. Morgan as a financial advisor. The independent directors then considered the implications of the transaction on certain compensation arrangements between Wright and certain of its executives and employees, and approved such matters.

Following the meeting, also on November 3, 2019, Wright and J.P. Morgan executed an engagement letter in respect of J.P. Morgan’s services to Wright as an additional financial advisor to Wright.

On November 4, prior to the opening of trading on the U.S. stock markets, Wright and Stryker executed and delivered the Purchase Agreement and each party issued a press release announcing the proposed transaction.

Recommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement

Recommendation of the Wright Board to Approve the Offer and the Transactions Contemplated by the Purchase Agreement

The Wright Board, after considering various factors described below, has unanimously, among other things, (a) determined that the terms of the Purchase Agreement, the Offer, certain transactions contemplated by the Purchase Agreement (including the Asset Sale, the Liquidation and Second Step Distribution and the Mergers) are in the best interests of Wright, its businesses and its shareholders, employees and other relevant stakeholders, (b) approved and adopted the Purchase Agreement and (c) resolved, on the terms and subject to the conditions set forth in the Purchase Agreement, to recommend that Wright’s shareholders tender their Shares into the Offer and approve and adopt the matters to be proposed for consideration and approval by Wright’s shareholders at the Extraordinary General Meeting.

The Wright Board unanimously recommends that you vote (i) “FOR” each of the Governance Resolutions, (ii) “FOR” the Discharge Resolution, (iii) “FOR” each of the Asset Sale Resolutions, (iv) “FOR” each of the Merger Resolutions, (v) “FOR” the Demerger Resolution and (vi) “FOR” the Non-Binding Vote on Executive Compensation Proposal.

Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement

The Wright Board has reviewed and considered the Offer after consultation with members of Wright’s management and financial and legal advisors. After considering its fiduciary duties under applicable law, the Wright Board has unanimously determined that the Offer is in the best interests of Wright, its businesses and its shareholders, employees and other relevant stakeholders.

 

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The Wright Board considered each of the following reasons, among others, when reaching its recommendation that shareholders accept the Offer and tender their Shares to Purchaser:

 

   

Transaction Financial Terms. The Wright Board considered the relationship of the Offer Consideration to the historical market prices of the Shares, and expectations regarding expected trading prices if Wright remained an independent company. The Wright Board considered that the Offer Consideration of $30.75 per Share, without interest and less applicable withholding taxes, represents a premium of (a) 48% compared to the closing price of the Shares of $20.80 per Share on October 31, 2019 (the last trading day prior to speculation that Wright was exploring a sale), (b) 48% compared to the volume weighted average sales price of the Shares of $20.84 per Share over the 10 days ended October 31, 2019, (c) 50% compared to the volume weighted average sales price of the Shares of $20.49 per Share over the 30 days ended October 31, 2019 and (d) 46% compared to the volume weighted average sales price of the Shares of $21.06 per Share over the 90 days ended October 31, 2019, but a discount of 6% to the 52-week high sales price of the Shares of $32.86 per Share.

 

   

Wright’s Operating and Financial Condition; Prospects of Wright. The Wright Board considered Wright’s business, financial condition and results of operations, as well as the Management Forecast (as defined below) and its long-range plan. The Wright Board considered, among other factors that the holders of the Shares would continue to be subject to the risks and uncertainties of Wright executing on its operating plan if it remained independent. These risks and uncertainties included risks relating to Wright’s ability to achieve its strategy to become a high-growth, pure-play medical technology company; market acceptance of Wright’s products; Wright’s ability to successfully compete against current or future competitors; the magnitude of potential liabilities related to existing or future product liability claims; the impact of regulatory decisions on Wright’s product candidates and existing products, including recalls; the impact of losing existing or future intellectual property lawsuits, or Wright’s patents or other intellectual property rights failing to protect adequately Wright’s products; and Wright’s ability to service its debt and secure additional financing. The Wright Board also considered other risks and uncertainties discussed in Wright’s filings with the SEC.

 

   

Results of Process Conducted. The Wright Board considered the results of the process that had been conducted by Wright, with the assistance of Wright’s management and advisors, to solicit proposals for alternative transactions, the resulting discussions and negotiations, and the fact that none of these discussions or negotiations resulted in a proposal for a transaction more favorable than the transactions contemplated by the Purchase Agreement.

 

   

Type of Consideration. The Wright Board considered the cash consideration to be paid to Wright’s shareholders, which will provide liquidity and certainty of value to shareholders.

 

   

Negotiations with Stryker. The Wright Board considered the enhancements that Wright and its advisors were able to obtain as a result of robust arm’s-length negotiations with Stryker, including the increase in the Offer Price proposed by Stryker from the time of its initial indication of interest to the end of the negotiations. The Wright Board determined that, based on Wright’s negotiations with Stryker, it had received Stryker’s best offer.

 

   

Ability to Respond to Unsolicited Takeover Proposals and Terminate the Purchase Agreement to Accept a Superior Proposal. The Wright Board considered the provisions in the Purchase Agreement that permit Wright, subject to the terms and conditions of the Purchase Agreement, to provide information to, and engage in negotiations with, a third party that makes an unsolicited proposal, and, subject to payment of a termination fee and the other conditions set forth in the Purchase Agreement, to enter into a transaction with a party that makes a superior proposal.

 

   

Termination Fee Provisions. The Wright Board considered the termination fee provisions of the Purchase Agreement, which require a termination fee of $150 million to be paid to Stryker in the event of certain terminations of the Purchase Agreement, and determined that they are reasonable under the circumstances and likely would not be a significant deterrent to a competing offer that might be superior to the Offer Consideration.

 

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Conditions to the Consummation of the Offer; Likelihood of Closing. The Wright Board considered the conditions to the Offer reasonable and the consummation of the transactions contemplated by the Purchase Agreement probable. In particular, the Wright Board considered that the consummation of the transactions is not subject to a financing condition and that Stryker agreed to take all actions necessary to obtain any consents, clearances or approvals under the HSR Act (as defined below) and under foreign competition laws (except that Stryker’s obligations to divest assets is limited to total ankle replacement assets and other assets that, individually or in the aggregate, generated less than $25 million of revenue in 2018).

 

   

Opinion of Guggenheim Securities. The Wright Board considered the financial presentation and the opinion, each dated as of November 3, 2019, of Guggenheim Securities to the Wright Board as to the fairness, from a financial point of view and as of the date of the opinion, of the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (other than in the case of any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration), which opinion was based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken as more fully described under the section entitled “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Opinion of Wright’s Financial Advisor to the Wright Board,” beginning on page 64 below.

 

   

Advice of J.P. Morgan. J.P. Morgan was retained by the Wright Board to act as a financial advisor, and the Wright Board considered J.P. Morgan’s advice regarding the desirability of effecting the transactions under the Purchase Agreement.

 

   

Ability of Shareholders to Determine Whether to Tender. The Wright Board considered the fact that the Offer is structured as a tender offer, so all shareholders may elect whether to tender their Shares. Furthermore, the Wright Board considered that the Offer could be followed by a Post-Offer Reorganization consisting of, among other potential transactions, the Mergers or the Asset Sale, the Liquidation and the Second Step Distribution, in which case shareholders who do not tender their Shares in the Offer will receive the same cash price payable for the Shares in the Offer, without interest and less applicable withholding taxes, or a Compulsory Acquisition, in which case shareholders who do not tender their Shares in the Offer will receive cash in an amount determined by the Dutch Court.

 

   

Subsequent Offering Period. The Wright Board considered the requirement that, except in the event that promptly following the Expiration Time Purchaser or Stryker publicly announces its intention to effectuate the Mergers, Purchaser commence a subsequent offering period (as it may be further extended under the terms of the Purchase Agreement) after the Acceptance Time, which it considered important because such subsequent offering period would allow non-tendering shareholders of Wright, who may be subject to different and potentially adverse tax treatment on the consideration received in respect of their Shares in connection with the Asset Sale, the Liquidation and the Second Step Distribution, if effectuated (as compared to the Offer), an additional opportunity to tender their Shares into the Offer and avoid any such adverse tax treatment.

 

   

Post-Offer Reorganization. The Wright Board considered the terms of the Post-Offer Reorganization, including that such transactions were necessary to effect Stryker’s proposal of a transaction for all of the equity of Wright, which Stryker indicated was necessary in order for Stryker and its affiliates to obtain the operational, commercial and financial benefits Stryker anticipated to receive as a result of the transaction. The Wright Board considered the Post-Offer Reorganization desirable, because Stryker had indicated that it would not pursue an acquisition of Wright if it did not have the ability to acquire all of the outstanding Shares or the entire business of Wright and, in the event such transactions are implemented, the holders of the Shares would generally be offered or receive an amount equal to the Offer Consideration and would not be required to hold a potentially illiquid, minority stake in Wright.

 

   

Other Stakeholder Considerations. The Wright Board considered the opportunity for Wright’s employees in connection with the Offer and other transactions contemplated by the Purchase

 

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Agreement. Wright considered that the Purchase Agreement provides that for the period from Closing through the one year anniversary of Closing, Stryker will cause Wright or its subsidiaries to provide Current Employees with specified compensation and benefits. The Wright Board also considered the treatment of equity awards in connection with the Offer.

The Wright Board also considered Stryker’s leading position as a medical technology company and how the proposed combination of Wright and Stryker offers significant opportunities to advance innovation, improve outcomes and reach more patients, thereby benefitting Wright’s customers, suppliers and employees.

The Wright Board also considered a number of uncertainties and risks in their deliberations concerning the transactions contemplated by the Purchase Agreement, including the following:

 

   

Restrictions; Termination Fee. The Wright Board considered the restrictions that the Purchase Agreement would impose on Wright actively soliciting competing bids, and the insistence of Stryker as a provision in the Purchase Agreement that Wright would be obligated to pay a termination fee of $150 million following certain terminations of the Purchase Agreement, and the potential effect of such termination fee in deterring other potential bidders from proposing alternative transactions.

 

   

Failure to Close. The Wright Board considered that Stryker and Purchaser’s obligations to consummate the Offer were subject to conditions, and the possibility that such conditions may not be satisfied, including as a result of events outside of Wright’s control, such as shareholders of Wright failing to tender a number of Shares equal to at least 95% (or to a percentage not less than 80% if elected by Purchaser or if resolutions are adopted by Wright’s shareholders at the Extraordinary General Meeting related to the Extraordinary General Meeting Proposals (as defined below), including the Asset Sale Resolutions, the Merger Resolutions and the Demerger Resolution) of all Shares then outstanding, failure to obtain antitrust approvals or a governmental authority issuing an injunction that would prohibit the transaction. The Wright Board also considered the fact that, if the proposed transactions were not completed, the market’s perception of Wright’s continuing business could potentially result in an adverse impact on Wright’s business and the trading price of the Shares. The Wright Board also considered the fact that, if the Offer was not consummated, Wright’s directors, officers and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the transaction, and Wright will have incurred significant transaction costs, attempting to consummate the transaction.

 

   

Pre-Closing Covenants. The Wright Board considered that, under the terms of the Purchase Agreement, Wright agreed that it will carry on its business in the ordinary course consistent with past practice and, subject to specified exceptions, will not take a number of actions related to the conduct of its business without the prior written consent of Stryker. The Wright Board further considered that these terms of the Purchase Agreement may limit Wright’s ability to pursue business opportunities that it might otherwise pursue.

 

   

No Future Shareholder Participation in Future Earnings or Growth of Wright as an Independent Company. The Wright Board considered the fact that, following the Offer Closing, Wright will no longer operate as an independent public company, and former shareholders of Wright will not have the opportunity to participate in its future earnings growth and future profits as an independent company.

 

   

Potential Conflicts of Interest. The Wright Board considered the financial interests of certain of the directors of the Wright Board, executive officers and financial advisors in the transactions contemplated by the Purchase Agreement, as described in this proxy statement, and considered whether a potential conflict of interest existed in relation to any of the directors of the Wright Board, executive officers and financial advisors, concluding that this was not the case.

 

   

Tax Treatment. The Wright Board considered that the receipt of the cash consideration by U.S. holders of Shares in the Offer and the Post-Offer Reorganization will be a taxable transaction for such holders

 

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for U.S. federal income tax purposes. The Wright Board also considered the applicable withholding taxes (including Dutch dividend withholding tax (dividendbelasting)) and other taxes, if any, imposed on Wright’s shareholders in respect of the Offer and the Post-Offer Reorganization. Please see Section 5—“Certain Material Tax Consequences” of the Offer to Purchase for a more detailed discussion of certain material U.S. federal income tax consequences and certain material Dutch tax consequences of the Offer and the Post-Offer Reorganization.

The Wright Board believed that, overall, the potential benefits of the Purchase Agreement to Wright, its businesses and its shareholders, employees and other relevant stakeholders outweigh the risks, and that the Purchase Agreement was reasonably likely to represent the most attractive alternative for Wright, its businesses and its shareholders, employees and other relevant stakeholders of Wright. In analyzing the Purchase Agreement and the transactions contemplated thereby, the Wright Board and Wright’s management were assisted and advised by legal counsel and financial advisors.

The foregoing discussion of information and reasons considered by the Wright Board is not intended to be exhaustive. In light of the variety of reasons considered in connection with its evaluation of the Purchase Agreement, including the Offer, the Wright Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific reasons considered in reaching its determinations and recommendations. Moreover, each member of the Wright Board applied his or her own personal business judgment to the process and may have given different weight to different reasons.

Change of Recommendation

As described in the section of this proxy statement captioned “The Offer and the Other Transactions Contemplated by the Purchase AgreementRecommendation of the Wright Board and Reasons for the Offer and the Transactions Contemplated by the Purchase Agreement,” beginning on page 59, and subject to the provisions described below, the Wright Board has made the recommendation that the holders of Wright Shares vote “FOR” each of the Extraordinary General Meeting Proposals. The Purchase Agreement provides that the Wright Board may not effect a change of recommendation except as described below.

Wright has agreed that the Wright Board and each committee thereof will not (a) approve or adopt, or permit Wright or any of its subsidiaries to (and neither Wright nor any of its subsidiaries will) enter into or execute, any binding or non-binding letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, option agreement, merger agreement, joint venture agreement, partnership agreement or other agreement relating to or that would reasonably be expected to lead to (other than a confidentiality agreement pursuant to the non-solicitation covenant) an Acquisition Proposal (an “Alternative Acquisition Agreement”) or publicly propose to take such action or (b) make a Change of Board Recommendation (as defined below).

For purposes of the Purchase Agreement, “Change of Board Recommendation” means:

 

   

the withdrawal or modification or qualification of the Wright Board Recommendation (as defined below) or any public proposal to withdraw, modify or qualify the Wright Board Recommendation;

 

   

the approval, authorization or recommendation by the Wright Board or any committee thereof of any Acquisition Proposal or any public proposal by the Wright Board or any committee thereof to approve, authorize or recommend any Acquisition Proposal;

 

   

the failure to include the Wright Board Recommendation (as defined below) in the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC by Wright on December 13, 2019 (the “Schedule 14D-9”) or in this proxy statement when disseminated to the holders of Shares;

 

   

the failure by Wright, within 10 business days of the public announcement of the commencement of a tender or exchange offer for Shares that constitutes an Acquisition Proposal (whether or not a Superior

 

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Proposal (as defined below)) by a person other than Stryker or any of its subsidiaries, to file a Schedule 14D-9 pursuant to Rule 14e-2 and Rule 14d-9 promulgated under the Exchange Act recommending that the holders of the Shares reject such Acquisition Proposal and not tender any Shares into such tender or exchange offer; or

 

   

the failure by the Wright Board to publicly reaffirm the Wright Board Recommendation within 10 business days after receiving a written request from Stryker to provide such public reaffirmation following public disclosure of an Acquisition Proposal (or, if earlier (but still, after a written request delivered by Stryker to Wright at least 48 hours prior to the then-scheduled Expiration Time, or the Extraordinary General Meeting or any subsequent extraordinary general meeting, as applicable), prior to the then-scheduled Expiration Time, or the Extraordinary General Meeting or any subsequent extraordinary general meeting, as applicable), provided, that, Stryker may deliver only one such request with respect to any Acquisition Proposal subject to this clause (it being understood that any change to the financial terms or any other material terms of any such Acquisition Proposal, will constitute a new Acquisition Proposal for this purpose).

Opinion of Wright’s Financial Advisor to the Wright Board

The Wright Board retained Guggenheim Securities as its financial advisor in connection with the potential sale of Wright. In selecting Guggenheim Securities as its financial advisor, the Wright Board considered, among other things, Guggenheim Securities’ existing relationship with Wright and that it is an internationally recognized investment banking, financial advisory and securities firm whose senior professionals have substantial experience advising companies in the medical device industry. Guggenheim Securities, as part of its investment banking, financial advisory and capital markets businesses, is regularly engaged in the valuation and financial assessment of businesses and securities in connection with mergers and acquisitions, recapitalizations, spin-offs/split-offs, restructurings, securities offerings in both the private and public capital markets and valuations for corporate and other purposes.

At the November 3, 2019 meeting of the Wright Board, Guggenheim Securities rendered an oral opinion, which was confirmed by delivery of a written opinion, to the Wright Board to the effect that, as of November 3, 2019 and based on and subject to the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken, the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (other than in the case of any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration) was fair, from a financial point of view, to such holders.

This description of Guggenheim Securities’ opinion is qualified in its entirety by the full text of the written opinion, which is attached as Annex B to this proxy statement and which you should read carefully and in its entirety. Guggenheim Securities’ written opinion sets forth the matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken by Guggenheim Securities. Guggenheim Securities’ written opinion, which was authorized for issuance by the Fairness Opinion and Valuation Committee of Guggenheim Securities, is necessarily based on economic, capital markets and other conditions, and the information made available to Guggenheim Securities, as of the date of such opinion. Guggenheim Securities has no responsibility for updating or revising its opinion based on facts, circumstances or events occurring after the date of the rendering of the opinion.

In reading the discussion of Guggenheim Securities’ opinion set forth below, you should be aware that such opinion (and, as applicable, any materials provided in connection therewith or the summary of Guggenheim Securities’ underlying financial analyses elsewhere in this proxy statement):

 

   

was provided to the Wright Board (in its capacity as such) for its information and assistance in connection with its evaluation of the Offer Consideration;

 

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did not constitute a recommendation to the Wright Board with respect to the transactions contemplated by the Purchase Agreement;

 

   

does not constitute advice or a recommendation to any holder of Shares as to whether to tender any such shares pursuant to the Offer or how to vote or act in connection with the transactions contemplated by the Purchase Agreement or otherwise;

 

   

did not address Wright’s underlying business or financial decision to pursue or effect the transactions contemplated by the Purchase Agreement, the relative merits of the transactions contemplated by the Purchase Agreement as compared to any alternative business or financial strategies that might exist for Wright, the effects of any other transaction in which Wright might engage or the financing or funding of the transactions contemplated by the Purchase Agreement by Stryker and Purchaser;

 

   

addressed only the fairness, from a financial point of view and as of the date of such opinion, of the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (excluding any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration) to the extent expressly specified in such opinion;

 

   

expressed no view or opinion as to (i) any other term, aspect or implication of (a) the transactions contemplated by the Purchase Agreement (including, without limitation, the form or structure of the Offer, any Post-Offer Reorganization or any other transaction contemplated by the Purchase Agreement or the implementation of any of the foregoing) or the Purchase Agreement or (b) any other agreement, transaction document or instrument contemplated by the Purchase Agreement or to be entered into or amended in connection with the transactions contemplated by the Purchase Agreement or (ii) the fairness, financial or otherwise, of the transactions contemplated by the Purchase Agreement to, or of any consideration to be paid to or received by, the holders of any other class of securities, creditors or other constituencies of Wright;

 

   

expressed no view or opinion as to any aspects of the transactions contemplated by the Purchase Agreement or the Offer Consideration in accordance with or under applicable Dutch corporation law or securities regulations, including whether the Offer Consideration was the fair price within the meaning of Section 5:80a of the Dutch Financial Supervision Act; and

 

   

expressed no view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of Wright’s directors, officers or employees, or any class of such persons, in connection with the transactions contemplated by the Purchase Agreement relative to the Offer Consideration or otherwise.

In the course of performing its reviews and analyses for rendering its opinion, Guggenheim Securities:

 

   

reviewed a draft of the Purchase Agreement dated as of November 3, 2019;

 

   

reviewed certain publicly available business and financial information regarding Wright;

 

   

reviewed certain non-public business and financial information regarding Wright’s business and future prospects (including the Management Forecast (as defined below)), all as prepared and approved for Guggenheim Securities’ use by Wright’s senior management;

 

   

discussed with Wright’s senior management their strategic and financial rationale for the transactions contemplated by the Purchase Agreement as well as their views of Wright’s business, operations, historical and projected financial results and future prospects and the commercial, competitive and regulatory dynamics in the medical device sector;

 

   

reviewed the historical prices, trading multiples and trading activity of the Shares;

 

   

compared the financial performance of Wright and the trading multiples and trading activity of the Shares with corresponding data for certain other publicly traded companies that Guggenheim Securities deemed relevant in evaluating Wright;

 

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reviewed the valuation and financial metrics of certain mergers and acquisitions that Guggenheim Securities deemed relevant in evaluating the transactions contemplated by the Purchase Agreement;

 

   

performed a discounted cash flow analysis based on the Management Forecast; and

 

   

conducted such other studies, analyses, inquiries and investigations as Guggenheim Securities deemed appropriate.

With respect to the information used in arriving at its opinion, Guggenheim Securities noted that:

 

   

Guggenheim Securities relied upon and assumed the accuracy, completeness and reasonableness of all industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information (including, without limitation, the Management Forecast, any other estimates and any other forward-looking information) provided by or discussed with Wright or obtained from public sources, data suppliers and other third parties.

 

   

Guggenheim Securities (i) did not assume any responsibility, obligation or liability for the accuracy, completeness, reasonableness, achievability or independent verification of, and Guggenheim Securities did not independently verify, any such information (including, without limitation, the Management Forecast, any other estimates and any other forward-looking information), (ii) expressed no view, opinion, representation, guaranty or warranty (in each case, express or implied) regarding the reasonableness or achievability of the Management Forecast, any other estimates and any other forward-looking information or the assumptions upon which they are based and (iii) relied upon the assurances of Wright’s senior management that they were unaware of any facts or circumstances that would make such information (including, without limitation, the Management Forecast, any other estimates and any other forward-looking information) incomplete, inaccurate or misleading.

 

   

Specifically, with respect to (i) the Management Forecast, any other estimates and any other forward-looking information provided by or discussed with Wright, (a) Guggenheim Securities was advised by Wright’s senior management, and Guggenheim Securities assumed, that the Management Forecast, such other estimates and such other forward-looking information utilized in its analyses had been reasonably prepared on bases reflecting the best then-currently available estimates and judgments of Wright’s senior management as to the expected future performance of Wright and (b) Guggenheim Securities assumed that the Management Forecast, such other estimates and such other forward-looking information had been reviewed by the Wright Board with the understanding that such information would be used and relied upon by Guggenheim Securities in connection with rendering its opinion and (ii) any financial projections, any other estimates and/or any other forward-looking information obtained by Guggenheim Securities from public sources, data suppliers and other third parties, Guggenheim Securities assumed that such information was reasonable and reliable.

Guggenheim Securities also noted certain other considerations with respect to its engagement and the rendering of its opinion:

 

   

During the course of its engagement, Guggenheim Securities was asked by the Wright Board to solicit indications of interest from various third parties regarding a potential transaction with Wright, and Guggenheim Securities considered the results of such solicitation process in rendering its opinion.

 

   

Guggenheim Securities did not perform or obtain any independent appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of Wright or any other entity or the solvency or fair value of Wright or any other entity, nor was Guggenheim Securities furnished with any such appraisals.

 

   

Guggenheim Securities’ professionals are not legal, regulatory, tax, consulting, accounting, appraisal or actuarial experts and Guggenheim Securities’ opinion should not be construed as constituting advice with respect to such matters; accordingly, Guggenheim Securities relied on the assessments of Wright’s senior management and Wright’s other professional advisors with respect to such matters. Guggenheim

 

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Securities assumed that the transactions contemplated by the Purchase Agreement would have the tax consequences contemplated by the parties to the Purchase Agreement and that any changes to the tax consequences (including any tax basis step-up or other such changes) would not have a meaningful impact on its analyses and opinion. Guggenheim Securities did not express any view or render any opinion regarding the tax consequences of the transactions contemplated by the Purchase Agreement to Wright or its securityholders (including with respect to any withholding taxes associated with the transactions contemplated by the Purchase Agreement, any tax basis step-up or other such changes to the tax attributes of Wright which may result from the transactions contemplated by the Purchase Agreement).

 

   

Guggenheim Securities further assumed that:

 

   

in all respects meaningful to its analyses, (i) the final executed Purchase Agreement would not differ from the draft that Guggenheim Securities reviewed, (ii) Wright, Stryker and Purchaser will comply with all terms and provisions of the Purchase Agreement, (iii) the representations and warranties of Wright, Stryker and Purchaser contained in the Purchase Agreement were true and correct and all conditions to the obligations of each party to the Purchase Agreement to consummate the transactions contemplated by the Purchase Agreement would be satisfied without any waiver, amendment or modification thereof and (iv) the execution versions of the exhibits to the Purchase Agreement (including the Asset Sale Agreement and the Merger Agreement) would not differ in any material respects from the exhibits attached to the Purchase Agreement;

 

   

the transactions contemplated by the Purchase Agreement will be consummated in a timely manner in accordance with the terms of the Purchase Agreement and in compliance with all applicable laws, documents and other requirements, without any delays, limitations, restrictions, conditions, divestiture or other requirements, waivers, amendments or modifications (regulatory, tax-related or otherwise) that would have an effect on Wright, Stryker, Purchaser or the transactions contemplated by the Purchase Agreement in any way meaningful to Guggenheim Securities’ analyses or opinion; and

 

   

any Post-Offer Reorganization would not result in any changes to the Offer Consideration to be received by the holders of Shares or adversely impact Wright or Stryker, in each case in any way meaningful to Guggenheim Securities’ analyses or opinion.

 

   

Guggenheim Securities did not express any view or opinion as to the price or range of prices at which the Shares or other securities or financial instruments of or relating to Wright may trade or otherwise be transferable at any time, including subsequent to the announcement or consummation of the transactions contemplated by the Purchase Agreement.

Summary of Financial Analyses

Overview of Financial Analyses

This “Summary of Financial Analyses” presents a summary of the principal financial analyses performed by Guggenheim Securities and presented to the Wright Board in connection with Guggenheim Securities’ rendering of its opinion. Such presentation to the Wright Board was supplemented by Guggenheim Securities’ oral discussion, the nature and substance of which may not be fully described herein.

Some of the financial analyses summarized below include summary data and information presented in tabular format. In order to understand fully such financial analyses, the summary data and tables must be read together with the full text of the summary. Considering the summary data and tables alone could create a misleading or incomplete view of Guggenheim Securities’ financial analyses.

The preparation of a fairness opinion is a complex process and involves various judgments and determinations as to the most appropriate and relevant financial analyses and the application of those methods to

 

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the particular circumstances involved. A fairness opinion therefore is not readily susceptible to partial analysis or summary description, and taking portions of the financial analyses set forth below, without considering such analyses as a whole, would in Guggenheim Securities’ view create an incomplete and misleading picture of the processes underlying the financial analyses considered in rendering Guggenheim Securities’ opinion.

In arriving at its opinion, Guggenheim Securities:

 

   

based its financial analyses on various assumptions, including assumptions concerning general business, economic and capital markets conditions and industry-specific and company-specific factors, all of which are beyond the control of Wright, Stryker and Guggenheim Securities;

 

   

did not form a view or opinion as to whether any individual analysis or factor, whether positive or negative, considered in isolation, supported or failed to support its opinion;

 

   

considered the results of all of its financial analyses and did not attribute any particular weight to any one analysis or factor; and

 

   

ultimately arrived at its opinion based on the results of all of its financial analyses assessed as a whole and believes that the totality of the factors considered and the various financial analyses performed by Guggenheim Securities in connection with its opinion operated collectively to support its determination as to the fairness, from a financial point of view and as of the date of such opinion, of the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (excluding any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration) to the extent expressly specified in such opinion.

With respect to the financial analyses performed by Guggenheim Securities in connection with rendering its opinion:

 

   

Such financial analyses, particularly those based on estimates and projections, are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by these analyses.

 

   

None of the selected publicly traded companies used in the selected publicly traded companies analysis described below is identical or directly comparable to Wright or Stryker, and none of the selected precedent merger and acquisition transactions used in the selected precedent merger and acquisition transactions analysis described below is identical or directly comparable to the transactions contemplated by the Purchase Agreement. However, such companies and transactions were selected by Guggenheim Securities, among other reasons, because they represented publicly traded companies or involved target companies which may be considered broadly similar, for purposes of Guggenheim Securities’ financial analyses, to Wright and Stryker based on Guggenheim Securities’ familiarity with the medical device industry.

 

   

In any event, selected publicly traded companies analysis and selected precedent merger and acquisition transactions analysis are not mathematical. Rather, such analyses involve complex considerations and judgments concerning the differences in business, operating, financial and capital markets-related characteristics and other factors regarding the selected publicly traded companies to which Wright and Stryker were compared and the selected precedent merger and acquisition transactions to which the transactions contemplated by the Purchase Agreement was compared.

 

   

Such financial analyses do not purport to be appraisals or to reflect the prices at which any securities may trade at the present time or at any time in the future.

 

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Certain Definitions

Throughout this “Summary of Financial Analyses,” the following financial terms are used in connection with Guggenheim Securities’ various financial analyses:

 

   

CY: means calendar year.

 

   

EBITDA: means the relevant company’s operating earnings (after deduction of stock-based compensation) before interest, taxes, depreciation and amortization.

 

   

Enterprise value: represents the relevant company’s net equity value (as defined below) plus (i) the principal or face amount of total debt and (ii) the book value of any non-controlling/minority interests less (iii) cash, cash equivalents, short- and long-term marketable investments and certain other cash-like items and (iv) the book value of any non-consolidated investments.

 

   

Net equity value: represents the relevant company’s (i) gross equity value as calculated (a) based on outstanding common shares, restricted stock units and performance stock units (in each of the foregoing cases, as applicable) plus shares issuable upon the conversion or exercise of all in-the-money convertible securities, stock options and/or stock warrants times (b) the relevant company’s stock price less (ii) the cash proceeds from the assumed exercise of all in-the-money stock options and stock warrants.

 

   

NTM: means next twelve months.

 

   

Unlevered free cash flow: means the relevant company’s after-tax unlevered operating cash flow minus capital expenditures and changes in working capital.

 

   

VWAP: means volume-weighted average share price over the indicated period of time.

 

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Summary of Implied Transaction Financial Metrics

Based on the Offer Consideration of $30.75 per share in cash, Guggenheim Securities calculated various implied premiums and multiples related to the transactions contemplated by the Purchase Agreement as outlined in the table below:

 

Transaction-Implied Premiums and Transaction-Implied Multiples

     

Offer Consideration per Share

 

   $ 30.75  
     Wright’s
Stock
Price
        

Acquisition Premium/(Discount) Relative to Wright’s:

     

Unaffected Stock Price @ 10/31/19(1)

   $ 20.80        48

Unaffected VWAPs @ 10/31/19(1):

     

10-Day

     20.84        48  

30-Day

     20.49        50  

90-Day

     21.06        46  

52-Week High(2)

     32.86        (6

Enterprise Value / Revenue:

     

CY2020E                Management Forecast

        5.2

        Wall Street Consensus Estimates

        5.3  

NTM @ 9/30/19     Management Forecast

        5.3  

        Wall Street Consensus Estimates

        5.4  

Enterprise Value / Adj. EBITDA(3):

     

CY2020E                Management Forecast

        24.9

        Wall Street Consensus Estimates

        26.4  

NTM @ 9/30/19     Management Forecast

        26.6  

        Wall Street Consensus Estimates

        27.9  

 

(1)

Represents the last full trading day prior to a 5.8% increase on November 1, 2019 in the trading price of the Shares on Nasdaq, which coincided with a Bloomberg article suggesting Wright was contemplating a sale transaction.

(2)

Based on intraday stock trading prices.

(3)

Adj. EBITDA is not burdened by stock-based compensation.

 

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Financial Analyses

Summary of Wright’s Financial Analyses

In evaluating Wright in connection with rendering its opinion, Guggenheim Securities performed various financial analyses, which are summarized in the table below and described in more detail elsewhere herein, including selected publicly traded companies analysis, selected precedent merger and acquisition transactions analysis and discounted cash flow analysis. Solely for informational reference purposes, Guggenheim Securities also reviewed the historical trading price range for Shares, Wall Street equity research analysts’ price targets for Shares and premiums paid in connection with the selected precedent merger and acquisition transactions listed below in the section entitled “Selected Precedent Merger and Acquisition Transactions Analysis,” beginning on page 73.

 

Summary of Wright’s Financial Analyses

Offer Consideration per Share

     $30.75  
     Reference Range
for Wright’s
Valuation
 
     Low(1)      High(1)  
Financial Analyses      

Selected Publicly Traded Companies Analysis

   $ 23.00      $ 34.00  

Selected Precedent M&A Transactions Analysis

     

NTM Revenue

   $ 26.75      $ 33.00  

NTM EBITDA

     22.25        31.00  

Discounted Cash Flow Analysis

   $ 22.25      $ 40.25 (2) 

For Informational Reference Purposes

     

Wright’s 52-Week Low / High Stock Price(3)

   $ 19.00      $ 32.75  

Wall Street Equity Research Price Targets(4)

     21.25        29.75  

Precedent One-Day Stock Price Premiums(5)

     27.00        31.25  

 

(1)

Rounded to the nearest $0.25.

(2)

Includes approximately $1.00 per Share attributable to the estimated present value of Wright’s net operating loss carryforwards.

(3)

Based on intraday stock trading prices.

(4)

Wall Street 12-month stock price targets are discounted by one year using Wright’s estimated cost of equity midpoint.

(5)

Based on approximate 25th to 75th percentile of precedent premiums analysis, involving MedTech acquisitions with a transaction value greater than $700 million since 2016.

 

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Selected Publicly Traded Companies Analysis

Guggenheim Securities reviewed and analyzed Wright’s historical stock price performance, trading metrics and historical and projected/forecasted financial performance compared to corresponding data for selected publicly traded companies that Guggenheim Securities deemed relevant for purposes of this analysis (i.e., medical device companies with market capitalizations of ~$700 million to $10 billion, 2019 to 2020 estimated growth of ~7% to 17% and gross margins greater than 60%). Guggenheim Securities calculated, among other things, various public market trading multiples for Wright and the selected publicly traded companies (in the case of the selected publicly traded companies, based on Wall Street equity research consensus estimates and each company’s most recent publicly available financial filings), which are summarized in the table below:

 

Selected Publicly Traded Companies Analysis
     CY 2020E Trading
Enterprise
Value /
Revenue
 

Publicly Traded Companies

  

AtriCure, Inc.

     4.2

Avanos Medical, Inc.

     2.8  

BioTelemetry, Inc.

     3.3  

Cardiovascular Systems, Inc.

     4.9  

CryoLife, Inc.

     3.6  

Globus Medical, Inc.

     5.6  

Masimo Corporation

     8.1  

Nevro Corp.

     6.8  

Statistical Summary

  

Median

     4.6

Wright

  

Management Forecast

     3.7

In performing its selected publicly traded companies analysis with respect to Wright, Guggenheim Securities selected a trading enterprise value / revenue multiple range of 4.0x – 5.5x based on CY 2020E for purposes of evaluating Wright on a stand-alone public market trading basis.

Guggenheim Securities’ selected publicly traded companies analysis resulted in an overall reference range of $23.00 – $34.00 per share for purposes of evaluating the Shares on a stand-alone public market trading basis.

 

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Selected Precedent Merger and Acquisition Transactions Analysis

Guggenheim Securities reviewed and analyzed certain financial metrics associated with selected precedent merger and acquisition transactions announced since January 1, 2016 involving a target company in the medical device sector with transaction values ranging from $700 million to $10 billion and forward revenue growth between 7.0% and 17.0% that Guggenheim Securities deemed relevant for purposes of this analysis. Guggenheim Securities calculated, among other things and to the extent publicly available, certain implied change-of-control transaction multiples for the selected precedent merger and acquisition transactions (based on Wall Street equity research consensus estimates, each company’s most recent publicly available financial filings and certain other publicly available information), which are summarized in the table below:

 

Selected Precedent Merger and Acquisition (“M&A”) Transactions Analysis

Date
Announced

 

Acquiror

 

Target Company

  Enterprise
Value /
NTM
Revenue
    Enterprise
Value /
NTM
EBITDA(1)
 

Precedent M&A Transactions

   

8/30/2018

  Stryker Corporation   K2M Group Holdings, Inc.     4.8     NM  

12/04/2017

  TPG Capital   Exactech, Inc.     2.6       14.1

8/07/2017

  Fresenius Medical Care Holdings, Inc.   NxStage Medical, Inc.     4.7       38.2  

2/14/2017

  Hologic, Inc.   Cynosure, Inc.     2.9       15.5  

2/13/2017

  Allergan Plc   ZELTIQ Aesthetics, Inc.     5.7       46.3  

12/2/2016

  Teleflex Incorporated   Vascular Solutions, Inc.     5.4       21.6  

6/27/2016

  Medtronic plc   HeartWare International, Inc.     4.6       NM  

6/07/2016

  Zimmer Biomet Holdings, Inc.   LDR Holding Corporation     5.4       NM  

2/01/2016

  Stryker Corporation   Sage Products, LLC     5.7       19.0  

Statistical Summary

   

Mean

    4.6     25.8

Median

    4.8       20.3  

 

(1)

Excludes the burden of stock-based compensation.

In performing its selected precedent merger and acquisition transactions analysis with respect to Wright, Guggenheim Securities selected a reference range of transaction multiples for purposes of evaluating Wright on a change-of-control basis as follows: (i) transaction enterprise value / NTM revenue multiple range of 4.6x – 5.5x, which resulted in an overall reference range of $26.75 – $33.00 per share for purposes of evaluating the Shares on a change-of-control basis; and (ii) transaction enterprise value / NTM EBITDA multiple range of 20.0x – 26.0x, which resulted in an overall reference range of $22.25 – $31.00 per share for purposes of evaluating the Shares on a change-of-control basis.

Discounted Cash Flow Analysis

Guggenheim Securities performed a stand-alone discounted cash flow analysis of Wright based on projected after-tax unlevered free cash flows (after deducting stock-based compensation) for Wright and an estimate of its terminal/continuing value at the end of the projection horizon.

In performing its discounted cash flow analysis with respect to Wright:

 

   

Guggenheim Securities utilized the Management Forecast.

 

   

Guggenheim Securities used a discount rate range of 7.03% – 8.39% based on its estimate of Wright’s weighted average cost of capital (which was estimated based on Guggenheim Securities’ (i) investment banking and capital markets judgment and experience in valuing companies similar to Wright and

 

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(ii) application of the capital asset pricing model, which requires certain (a) general inputs such as the prospective global equity risk premium and the corresponding risk-free rate and (b) company-specific inputs such as the subject company’s forward-looking equity beta reference range, the subject company’s assumed forward-looking capital structure and the corresponding blended cost of debt, the subject company’s prospective marginal cash income tax rate and, as applicable, the appropriate size/liquidity premium for the subject company).

 

   

In estimating Wright’s terminal/continuing value for purposes of its discounted cash flow analysis, Guggenheim Securities used a perpetual growth rate range of 2.0% – 3.0%. Guggenheim Securities selected such terminal/continuing value-related perpetual growth rates based on its professional judgment taking into account various considerations and factors, including among others (i) the nature of Wright’s businesses, including recent and expected trends in and competitive dynamics with respect to, and expected long-term growth prospects for, the industry and markets in which Wright operates, (ii) the Management Forecast and (iii) then-prevailing market expectations regarding global long-term economic growth and global long-term inflation. Guggenheim Securities applied a two-stage methodology to calculate the terminal value, which was discussed with Wright’s senior management. During the first stage of the terminal value, free cash flow growth decelerates linearly to the assumed perpetuity growth rate by 2029, and thereafter the perpetuity growth rate is applied.

Guggenheim Securities’ discounted cash flow analysis resulted in an implied equity value range of $22.25 – $40.25 per share, including, at the high end of the range, approximately $1.00 per share attributable to the estimated present value, as of November 1, 2019, of Wright’s net operating loss carryforwards as of December 31, 2018, for purposes of evaluating the Shares on a stand-alone intrinsic-value basis.

Other Financial Reviews and Analyses Solely for Informational Reference Purposes

In order to provide certain context for the financial analyses in connection with its opinion as described above, Guggenheim Securities undertook various additional financial reviews and analyses as summarized below solely for informational reference purposes. As a general matter, Guggenheim Securities did not consider such additional financial reviews and analyses to be determinative methodologies for purposes of its opinion.

Wrights 52-Week Intraday High and Low Stock Prices. Guggenheim Securities reviewed the trading price of the Shares over the 52-week period ending on October 31, 2019 (the last full trading day prior to a 5.8% increase on November 1, 2019 in the trading price of the Shares on Nasdaq, which coincided with a Bloomberg article suggesting Wright was contemplating a sale transaction). Among other things, Guggenheim Securities noted that the range of such 52-week intraday high and low trading prices was $19.04 – $32.86.

Wright’s Wall Street Equity Research Analyst Stock Price Targets. Guggenheim Securities reviewed selected Wall Street equity research analyst stock price targets for Wright as published prior to October 31, 2019 (the last full trading day prior to a 5.8% increase on November 1, 2019 in the trading price of the Shares on Nasdaq, which coincided with a Bloomberg article suggesting Wright was contemplating a sale transaction). Guggenheim Securities noted that such Wall Street equity research analyst stock price targets for the Shares were $21.25 – $29.75 per share on a present value basis using an illustrative discount rate of 7.7% (which reflected Guggenheim Securities’ estimate of the midpoint of Wright’s cost of equity).

Precedent One-Day Stock Price Premiums. Guggenheim Securities reviewed the one-day stock price premiums in selected transactions announced since 2016 involving targets in the medical device sector with transaction values in excess of $700 million. Based on, among other things, an approximate 25th and 75th percentile of the precedent one-day stock price premiums analysis, Guggenheim Securities noted that the range of such one-day stock price premiums was 30 – 50%, implying share prices of $27.00 – $31.25 based on the closing share price of the Shares of $20.80 per share on October 31, 2019.

 

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Wright’s Illustrative Theoretical Future Stock Price. Guggenheim Securities reviewed implied illustrative ranges of theoretical future values per share at January 1 in each year from 2020 through 2023 of the Shares on a stand-alone basis utilizing projected revenues from the Management Forecast. Among other things, Guggenheim Securities noted that for the Shares on a stand-alone basis, the theoretical future values per share at January 1 in each year from 2020 through 2023 were approximately (i) $21.58, $25.05, $29.77 and $34.79, respectively, based on Wright’s current NTM revenue multiple of 3.8x, and (ii) $26.80, $30.73, $35.46 and $41.06, respectively, based on an illustrative upside NTM revenue multiple of 4.5x. Guggenheim Securities also noted that the corresponding present values of the above theoretical future values per Share, using an illustrative discount rate of 7.7% (which reflected Guggenheim Securities’ estimate of the midpoint of Wright’s cost of equity), were (i) $21.58, $23.26, $25.65 and $27.84, based on Wright’s current NTM revenue multiple of 3.8x, and (ii) $26.80, $28.53, $30.56 and $32.85, based on an upside illustrative NTM revenue multiple of 4.5x.

Other Considerations

Except as described in the summary above, Wright did not provide specific instructions to, or place any limitations on, Guggenheim Securities with respect to the procedures to be followed or factors to be considered in performing its financial analyses or providing its opinion. The type and amount of consideration payable in the transactions contemplated by the Purchase Agreement were determined through negotiations between Wright and Stryker and were approved by the Wright Board. Wright’s decision to enter into the Purchase Agreement was solely that of the Wright Board. Guggenheim Securities’ opinion was just one of the many factors taken into consideration by the Wright Board. Consequently, Guggenheim Securities’ financial analyses should not be viewed as determinative of the decision of the Wright Board with respect to the fairness, from a financial point of view and as of the date of Guggenheim Securities’ opinion, of the Offer Consideration to be received by the holders of Shares (excluding Stryker, Purchaser or any of their affiliates) pursuant to the Purchase Agreement (excluding any Compulsory Acquisition or any other Post-Offer Reorganization resulting in payments other than the Offer Consideration).

Pursuant to the terms of Guggenheim Securities’ engagement, Wright has agreed to pay Guggenheim Securities a cash transaction fee (based on a percentage of the aggregate value associated with the transactions contemplated by the Purchase Agreement) upon consummation of the transactions contemplated by the Purchase Agreement, which cash transaction fee currently is estimated to be $37.6 million. Wright has previously paid Guggenheim Securities a cash milestone fee of $1.0 million that became payable upon the rendering of Guggenheim Securities’ opinion, which will be credited against the foregoing cash transaction fee. In addition, Wright has agreed to reimburse Guggenheim Securities for certain expenses and to indemnify Guggenheim Securities against certain liabilities arising out of its engagement.

Aside from its current engagement by Wright, during the two years prior to the rendering of its opinion, Guggenheim Securities has not previously been engaged by (i) Wright to provide financial advisory or other investment banking services for which Guggenheim Securities received compensation (ii) Stryker to provide financial advisory or other investment banking services for which Guggenheim Securities has received compensation, except in connection with Stryker’s acquisition of Entellus Medical, Inc. in February 2018, for which services Guggenheim Securities received customary fees of less than $10 million. Guggenheim Securities may seek to provide Wright and Stryker and their respective affiliates with financial advisory and investment banking services unrelated to the transactions contemplated by the Purchase Agreement in the future, for which services Guggenheim Securities would expect to receive compensation.

Guggenheim Securities and its affiliates and related entities engage in a wide range of financial services activities for its and their own accounts and the accounts of customers, including but not limited to: asset, investment and wealth management; insurance services; investment banking, corporate finance, mergers and acquisitions and restructuring; merchant banking; fixed income and equity sales, trading and research; and derivatives, foreign exchange and futures. In the ordinary course of these activities, Guggenheim Securities and its affiliates and related entities may (i) provide such financial services to Wright, Stryker, Purchaser, other

 

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participants in the transactions contemplated by the Purchase Agreement and their respective affiliates, for which services Guggenheim Securities and its affiliates and related entities may have received, and may in the future receive, compensation and (ii) directly and indirectly hold long and short positions, trade and otherwise conduct such activities in or with respect to loans, debt and equity securities and derivative products of or relating to Wright, Stryker, Purchaser, other participants in the transactions contemplated by the Purchase Agreement and their respective affiliates. Furthermore, Guggenheim Securities and its affiliates and related entities and Guggenheim Securities’ or their respective directors, officers, employees, consultants and agents may have investments in Wright, Stryker, Purchaser, other participants in the transactions contemplated by the Purchase Agreement and their respective affiliates.

Consistent with applicable legal and regulatory guidelines, Guggenheim Securities has adopted certain policies and procedures to establish and maintain the independence of its research departments and personnel. As a result, Guggenheim Securities’ research analysts may hold views, make statements or investment recommendations and publish research reports with respect to Wright, Stryker, other participants in the transactions contemplated by the Purchase Agreement and their respective affiliates and the transactions contemplated by the Purchase Agreement that differ from the views of Guggenheim Securities’ investment banking personnel.

Certain Wright Management Projections

Wright does not, as a matter of course, publicly disclose long-term projections about its future financial performance due to, among other reasons, the unpredictability of the underlying assumptions and estimates, although Wright has in the past provided investors with qualitative financial guidance, which it has updated from time to time during the relevant year. However, in connection with the Wright Board’s evaluation of a potential transaction with Stryker and other potential strategic alternatives, Wright’s management provided the Wright Board with certain non-public, unaudited and prospective financial information for the calendar years 2019 through 2024 (the “Management Forecast”). Wright’s management also provided the Management Forecast to Guggenheim Securities in connection with the rendering of its fairness opinion to the Wright Board and in performing the related financial analyses. Wright’s management also provided the Management Forecast to Stryker prior to signing the Purchase Agreement in connection with Stryker’s due diligence on Wright.

The Management Forecast was prepared solely for internal use of Wright, the Wright Board and its advisors, and is subjective in many respects. It was not prepared with a view to public disclosure and is included in this proxy statement only because such information was made available as described above. The Management Forecast was not prepared with a view to compliance with U.S. generally accepted accounting principles (“GAAP”), the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, KPMG LLP, our independent auditor, has not examined, reviewed, compiled or otherwise applied procedures to, the Management Forecast and, accordingly, assumes no responsibility for, and expresses no opinion on, the Management Forecast. The Management Forecast included in this proxy statement has been prepared by, and is the responsibility of, Wright’s management.

Although a summary of the Management Forecast is presented with numerical specificity, it reflects numerous assumptions and estimates as to future events made by Wright’s management, including about regulatory approvals, launch timing, pricing, market growth, market share, competition and other relevant factors. Wright’s management believed the assumptions and estimates were reasonable at the time the Management Forecast was prepared, taking into account the relevant information available to Wright’s management at the time. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. Important factors that may affect actual results and cause the Management Forecast not to be achieved include, but are not limited to, general economic conditions, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures and changes in tax laws. For additional information on reasons that may cause Wright’s future results to materially vary, see the

 

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section of this proxy statement captioned “Cautionary Note Regarding Forward-Looking Statements” beginning on page 25.

In addition, the Management Forecast, which is a forward-looking statement, does not take into account any circumstances or events occurring after the date that they were prepared and does not account for the consummation of the transactions contemplated by the Purchase Agreement. As a result, there can be no assurance that the Management Forecast will be realized, and actual results may be materially better or worse than those contained in the Management Forecast. The inclusion of this information should not be regarded as an indication that the Wright Board, Wright, Guggenheim Securities, Stryker or any other recipient of this information considered, or now considers, the Management Forecast to be material information of Wright or predictive of actual future results. Nor should it be construed as financial guidance, and it should not be relied upon as such. The summary of the Management Forecast is not included in this proxy statement as an offer to purchase or a solicitation of an offer to sell Shares or to induce any shareholder to vote in favor of any proposal to be voted on at the Extraordinary General Meeting, or to influence any shareholder to make any investment decision with respect to the transactions contemplated by the Purchase Agreement.

The Management Forecast should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding Wright contained in its public filings with the SEC.

Except to the extent required by applicable federal securities laws, Wright does not intend, and expressly disclaims any responsibility, to update or otherwise revise the Management Forecast to reflect circumstances existing after the date when Wright prepared the Management Forecast or to reflect the occurrence of future events or changes in general economic or industry conditions.

In light of the foregoing factors and the uncertainties inherent in the Management Forecast, shareholders are cautioned not to rely on the Management Forecast included in this proxy statement.

Certain of the measures included in the Management Forecast may be considered non-GAAP financial measures, as noted below. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Wright may not be comparable to similarly titled amounts used by other companies.

The following table reflects selected measures from the Management Forecast prepared by Wright’s management and, at Wright’s direction, used by Guggenheim Securities in connection with the rendering of its fairness opinion to the Wright Board and in performing the related financial analyses summarized under the section entitled “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Opinion of Wright’s Financial Advisor to the Wright Board,” beginning on page 64 of this proxy statement.

 

Calendar Year Ending December 31 (dollars in millions)  
     2019E     2020E     2021E     2022E     2023E     2024E  

Revenues

    $  930      $  1,039      $ 1,171      $  1,319      $  1,484      $  1,652  

Gross Profit(1)

    $ 742      $ 839      $ 950      $ 1,059      $ 1,193      $ 1,329  

Adj. EBITDA(2)

    $ 160      $ 216      $ 279      $ 333      $ 405      $ 467  

Stock-Based Compensation

   ($ 33   ($ 35   ($ 37   ($ 39   ($ 42   ($ 44

Depreciation

   ($ 63   ($ 68   ($ 73   ($ 73   ($ 72   ($ 71

Amortization(3)

   ($ 32   ($ 32   ($ 32   ($ 32   ($ 32   ($ 32

Operating Income(4)

    $ 32      $ 81      $ 137      $ 189      $ 260      $ 321  

Capital Expenditures

    $ 90      $ 70      $ 81      $ 78      $ 74      $ 70  

(Increase)/Decrease in Net Working Capital & Other(5)

   ($ 20   ($ 48   ($ 45   ($ 45   ($ 53   ($ 53

Unlevered Free Cash Flow(6)

    $ 3      $ 36      $ 74      $ 117      $ 164      $ 211  

Non-Operating Cash Flows(7)

   ($ 81   ($ 37   ($ 27   ($ 6   ($ 11   ($ 6

 

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(1)

Gross profit reflects revenues less cost of sales, which includes, among other items, royalties and excess and obsolete inventory.

(2)

Adjusted EBITDA excludes stock-based compensation expense. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income as a measure of operating performance or cash flow or as a measure of liquidity.

(3)

$8mm of amortization expense per year is tax-deductible.

(4)

Operating income reflects gross profit less operating expenses.

(5)

Net Working Capital & Other reflects accounts receivable, inventory, accounts payable and other working capital items. (Increase)/Decrease in Net Working Capital & Other is a non-GAAP financial measure and should not be considered as an alternative to financial measures prepared in accordance with GAAP as a measure of operating performance or as a measure of liquidity.

(6)

Unlevered free cash flow excludes non-operating cash flows, as described below, and reflects a 25.7% tax rate. Unlevered free cash flow is a non-GAAP financial measure and should not be considered as an alternative to financial measures prepared in accordance with GAAP as a measure of operating performance or as a measure of liquidity.

(7)

Non-operating cash flow includes the cash impact of integration costs related to Cartiva, Inc., remaining milestones to IMASCAP SAS and estimated legal and settlement payments through 2024. Non-operating cash flows is a non-GAAP financial measure and should not be considered as an alternative to financial measures prepared in accordance with GAAP as a measure of operating performance or as a measure of liquidity.

Purchase Agreement

The following summary of certain provisions of the Purchase Agreement, and all other provisions of the Purchase Agreement discussed herein, are qualified by reference to the Purchase Agreement itself, which is attached as Annex A to this proxy statement and is incorporated herein by reference. Shareholders and other interested parties should read the Purchase Agreement for a more complete description of the provisions summarized below. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Purchase Agreement.

This summary of the Purchase Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual disclosures about Stryker, Purchaser, Wright, or their respective affiliates. The Purchase Agreement contains representations, warranties, agreements, and covenants that are the product of negotiations among the parties thereto and made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations, warranties, agreements, and covenants are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part by a confidential disclosure letter delivered by Wright to Purchaser in connection with the Purchase Agreement (the “Wright Disclosure Letter”). The representations, warranties, agreements, and covenants in the Purchase Agreement were made for the purpose of allocating contractual risk between the parties thereto and governing contractual rights and relationships between the parties thereto instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to security holders of Stryker or Wright. In reviewing the representations, warranties, agreements and covenants contained in the Purchase Agreement or any descriptions thereof in this proxy statement, it is important to bear in mind that such representations, warranties, agreements, and covenants or any descriptions thereof were not intended by the parties to the Purchase Agreement to be characterizations of the actual state of facts or conditions of Stryker, Purchaser, Wright, or their respective affiliates. Moreover, information concerning the subject matter of the representations, warranties, agreements, and covenants may have changed since the date of the Purchase Agreement and may change after the date hereof, and such subsequent information may or may not be fully reflected in public disclosures. For the foregoing reasons, such representations, warranties, agreements and covenants or descriptions thereof should not be read alone and should instead be read in conjunction with the other information contained in the reports,

 

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statements, and filings that Stryker and Wright publicly file. Please see the section of this proxy statement captioned “Where You Can Find More Information,” beginning on page 188.

The Offer

Purchaser has agreed to commence (within the meaning of Rule 14d-2 promulgated under the Exchange Act) the Offer as promptly as reasonably practicable after the date of the Purchase Agreement, but in no event later than 25 business days following the date of the Purchase Agreement and, without the consent of Wright (such consent not to be unreasonably withheld, conditioned or delayed), no earlier than 20 business days following the date of the Purchase Agreement. Subject to the satisfaction or waiver (in accordance with the Purchase Agreement and applicable law) of the conditions to the Offer, Purchaser has agreed to (and Stryker has agreed to cause Purchaser to), (a) at, or as promptly as practicable following, the Expiration Time (but in any event within two business days thereafter) accept for payment and (b) at, or as promptly as practicable following, the Acceptance Time (but in any event within two business days (calculated as set forth in Rule 14d-1(g)(3) promulgated under the Exchange Act) thereafter), pay for all Shares validly tendered and not properly withdrawn pursuant to the Offer.

Purchaser expressly reserves the right at any time, in its sole discretion, to waive, in whole or in part, any condition to the Offer and to make any change in the terms of, or conditions to, the Offer. However, Purchaser will not, and Stryker will cause Purchaser not to (without the prior written consent of Wright): (a) waive or change the Minimum Condition (except to the extent contemplated under the Purchase Agreement); (b) decrease the Offer Consideration; (c) change the form of consideration to be paid in the Offer; (d) decrease the number of Shares sought in the Offer; (e) extend or otherwise change the Expiration Time (except to the extent contemplated under the Purchase Agreement); (f) impose additional conditions to the Offer or otherwise amend, modify, or supplement any of the conditions to the Offer or terms of the Offer in a manner adverse to Wright shareholders; or (g) increase the Offer Consideration by an increment of less than $0.10 per Share.

Extensions of the Offer

In the Purchase Agreement, the parties agreed that, unless extended as provided in the Purchase Agreement, the Offer will expire at 9:00 a.m. (Eastern Time) or such other time as the parties may mutually agree, on the date that is 50 business days (calculated as set forth in Rule 14d-1(g)(3) promulgated under the Exchange Act) after the date of commencement of the Offer, provided that in no event will the Offer expire prior to the date of the Extraordinary General Meeting. Purchaser may extend the Offer to such other date and time as may be agreed in writing by Wright and Stryker, and Purchaser has agreed in the Purchase Agreement that it will extend the Offer:

 

   

for the minimum period required by applicable law, rule, regulation, interpretation or position of the SEC or the rules of Nasdaq; and

 

   

on one or more occasions in consecutive periods of up to 10 business days each, with such period to end at 5:00 p.m., Eastern Time on the last business day of such period (or such other duration as Purchaser and Wright may agree) if, at any then-scheduled Expiration Time, any condition to the Offer has not been satisfied or waived, in order to permit satisfaction of such condition(s); except that:

 

   

if Purchaser determines in good faith, after consultation with outside legal counsel, that at any then-scheduled Expiration Time the Regulatory Clearance Condition is not reasonably likely to be satisfied within such 10 business-day extension period, then Purchaser will be permitted to extend the Offer on such occasion for periods of up to 20 business days;

 

   

if the only remaining unsatisfied condition to the Offer is the Minimum Condition, Purchaser will not be required to extend the Offer on more than two occasions in consecutive periods of up to 10 business days each (or such other duration as Purchaser and Wright may agree); and

 

   

Purchaser is not required to, and cannot without Wright’s consent, extend the Offer beyond the Outside Date. In addition, Purchaser may extend the Offer to the business day immediately

 

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following the date that is one month after the date of the Extraordinary General Meeting or subsequent extraordinary general meeting at which the Merger Resolutions are approved.

Following the Acceptance Time, except as described below, Purchaser will provide for a Subsequent Offering Period of at least 10 business days in accordance with Rule 14d-11 under the Exchange Act and in accordance with the Purchase Agreement. For purposes of the Offer, a “business day” means a day, other than Saturday, Sunday or other day on which commercial banks in Amsterdam, the Netherlands or New York, New York, United States, are authorized or required by applicable law to close. The Subsequent Offering Period is not an extension of the Offer. The Subsequent Offering Period would be an additional period of time, following the Expiration Time, in which shareholders may tender Shares not previously tendered pursuant to the Offer. Purchaser will announce additional details with respect to the Subsequent Offering Period in accordance with applicable rules, regulations and interpretations of the SEC. In the event that prior to the expiration of any such Subsequent Offering Period, Purchaser or Stryker publicly announces its intention to effectuate the Asset Sale, Purchaser will extend the Subsequent Offering Period for the Minority Exit Offering Period of at least five business days to permit any remaining minority Wright shareholders to tender their shares in exchange for the Offer Consideration. In the event that promptly following the Expiration Time, Purchaser or Stryker has publicly announced its intention to, subject to the terms of the Purchase Agreement, effectuate the Mergers, Purchaser will not be required to provide either a Subsequent Offering Period or Minority Exit Offering Period, but may do so if Purchaser chooses. There will be no withdrawal rights during any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period) and any Shares tendered will immediately be accepted and promptly paid for. Any shares tendered during any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period) will be acquired by Purchaser for an amount equal to the Offer Consideration, in cash, without interest and less applicable withholding taxes. Under no circumstance will interest be paid on the Offer Consideration paid pursuant to the Offer, regardless of any extension of the Offer, any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period) or any delay in making payment for Shares.

Treatment of Wright Equity Awards

In connection with the Offer, outstanding Wright equity awards (other than certain equity awards that may be granted if the Offer Closing does not occur by July 1, 2020 and which will be subject to pro rata vesting at the Offer Closing) will be treated as follows:

 

   

Each restricted stock unit in respect of Shares (an “RSU”) and performance share unit in respect of Shares (a “PSU”) that is outstanding and unvested immediately prior to the Acceptance Time, whether or not then subject to any performance or other condition, will vest in full at the Acceptance Time and at the Offer Closing will be cancelled and converted into the right to receive an amount in cash (without interest and subject to required tax withholding) equal to the product of (a) the Offer Consideration multiplied by (b) the total number of Shares subject to such PSU or RSU as of immediately prior to the Offer Closing (which, in the case of PSUs, will be determined based on the maximum achievement of the applicable performance conditions).

 

   

Each outstanding option to purchase Shares, other than under the Wright Employee Stock Purchase Plan (a “Wright Stock Option”) that is outstanding immediately prior to the Offer Closing will be automatically canceled and converted into a right to receive an amount in cash (without interest and subject to required tax withholding) equal to the product of (a) the number of Shares subject to the unexercised portion of such Wright Stock Option immediately prior to the Offer Closing multiplied by (b) the excess, if any, of the Offer Consideration over the applicable per Share exercise price of such Wright Stock Option.

Treatment of Wright Employee Stock Purchase Plan

In connection with the Offer, Wright’s Amended and Restated Employee Stock Purchase Plan (the “Wright ESPP”) was operated in accordance with its terms and past practice until December 31, 2019, which was the last

 

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day of the offering period that was in effect as of the date of the Purchase Agreement. Wright has suspended the commencement of any future offering periods under the Wright ESPP and, unless and until the Purchase Agreement is terminated, no subsequent offering period will commence, and Wright will terminate the Wright ESPP as of the Offer Closing.

Extraordinary General Meeting

Wright has agreed to hold the Extraordinary General Meeting to:

 

   

provide information regarding the Offer;

 

   

adopt the Asset Sale Resolutions;

 

   

adopt the Merger Resolutions;

 

   

adopt the Governance Resolutions;

 

   

adopt the Demerger Resolution;

 

   

adopt one or more resolutions effective upon the Acceptance Time to provide full and final discharge to each member of the Wright Board for their acts of management or supervision, as applicable, up to the date of the Extraordinary General Meeting, provided such discharge will be limited to the extent provided by general principles of Dutch law as in effect from time to time; and

 

   

conduct such other business as may properly come before the meeting.

Wright has further agreed that it will as promptly as possible, but in any event within 45 business days after the date of the Purchase Agreement, file with the SEC a preliminary proxy statement in connection with the Extraordinary General Meeting. Promptly following the later of (a) confirmation by the SEC that it has no further comments on the proxy statement and (b) the expiration of the 10-day waiting period contemplated by Rule 14a-6(a) promulgated by the SEC, Wright will cause the proxy statement in definitive form to be filed with the SEC and mailed to Wright’s shareholders.

If the Wright Board determines in its reasonable discretion that any additional shareholder resolutions should be adopted, or if the Governance Resolutions, the Asset Sale Resolutions, the Merger Resolutions or the Demerger Resolution have not been adopted at the Extraordinary General Meeting, Wright will, following consultation with Purchaser and Stryker, duly call and give notice of another Extraordinary General Meeting, which will take place at a date determined by Wright and reasonably acceptable to Purchaser and Stryker and not later than a date that will be prior to the date of the Expiration Time, at which the Governance Resolutions, the Asset Sale Resolutions, the Merger Resolutions or the Demerger Resolution, or such additional resolutions will be considered or reconsidered, as the case may be.

Wright has agreed that its obligation to duly call, give notice of, convene and hold the Extraordinary General Meeting (and any subsequent extraordinary general meeting) in accordance with and subject to the terms of the Purchase Agreement, and its other obligations with regards to the Extraordinary General Meeting as specified in the Purchase Agreement, will not be affected by the commencement, public proposal, public disclosure or communication to Wright of any Acquisition Proposal (as defined below) (whether or not a Superior Proposal (as defined below)) or any Change of Board Recommendation (as defined below). Unless the Purchase Agreement is terminated in accordance with its terms, Wright has agreed not to submit to a vote of the shareholders of Wright any Acquisition Proposal (whether or not a Superior Proposal) or any matters relating thereto.

Wright will consult with Purchaser and Stryker regarding the date of the Extraordinary General Meeting (or any subsequent extraordinary general meeting) and, unless the Purchase Agreement is terminated in accordance with its terms and notwithstanding any Change of Board Recommendation (as defined below), will not cancel,

 

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postpone or adjourn the Extraordinary General Meeting (or any subsequent extraordinary general meeting) without the prior written consent of Purchaser and Stryker, provided that Wright may, following reasonable consultation with Purchaser and Stryker, and, to the extent requested in writing by Stryker and Purchaser, Wright will, adjourn, postpone or cancel and reconvene the Extraordinary General Meeting (or any subsequent extraordinary general meeting) solely to the extent reasonably necessary (a) to ensure that any supplement or amendment to the relevant Extraordinary General Meeting materials that the Wright Board, after consultation with outside counsel, reasonably determines is necessary to comply with applicable law is made available to Wright shareholders in advance of the Extraordinary General Meeting (and any subsequent extraordinary general meeting) or (b) on no more than two occasions of not more than 10 business days each, to solicit additional proxies in favor of the approvals set forth in the Purchase Agreement, if as of the date of the scheduled Extraordinary General Meeting (or any subsequent extraordinary general meeting) there are not sufficient proxies that have been received approving such matters. In the event the Extraordinary General Meeting (or any subsequent extraordinary general meeting) is adjourned, postponed or canceled and reconvened, Wright will duly give notice of and reconvene the Extraordinary General Meeting on a date scheduled by mutual agreement of Wright, on the one hand, and Purchaser and Stryker, on the other hand, acting reasonably, or, in the absence of such agreement, as soon as practicable following the date of such adjournment, postponement or cancellation but, in any event, no later than the day that is 35 days following the date of such adjournment, postponement or cancellation (or, in the case of any subsequent extraordinary general meeting, a date that is prior to the date on which the Expiration Time will occur).

Directors

Stryker, Purchaser and Wright will use their respective reasonable best efforts (including, in the case of Wright, obtaining the necessary resignations of existing directors) to ensure that the Wright Board will, upon the Offer Closing, be comprised of at least seven directors, at least five of whom will be designated in writing by Purchaser and Stryker, in their sole discretion, as soon as reasonably practicable and in any event prior to convening the Extraordinary General Meeting, and at least two of whom will initially be current non-executive directors of Wright designated by Wright and Purchaser by mutual written agreement and who are at all times independent from Purchaser and Stryker and qualify as independent under the Dutch Corporate Governance Code 2016. The initial Independent Directors will be current non-executive directors of Wright, to the extent that they will agree to serve on the Wright Board after the Offer Closing. Each Independent Director will resign from the Wright Board upon the earliest of (a) such time after the Acceptance Time as Purchaser and its affiliates, in the aggregate, own 100% of the issued and outstanding Shares, including pursuant to the Mergers and (b) the Second Step Distribution having been made and the Liquidation having been completed.

Post-Offer Reorganization

Following the later of the Offer Closing and the closing of any Subsequent Offering Period (as it may be extended by the Minority Exit Offering Period), Stryker or Purchaser may but is not required to, effectuate or cause to be effectuated a Post-Offer Reorganization. The Post-Offer Reorganization will be (a) one of (i) the Asset Sale, Liquidation and Second Step Distribution, (ii) the Mergers, (iii) if permissible under applicable law, the Compulsory Acquisition, (iv) an election by Wright pursuant to U.S. Treasury Regulations Section 301.7701-3 to be classified as a partnership or as a disregarded entity for U.S. federal tax purposes, (v) the Demerger or (vi) a conversion of Wright into a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) (or any combination of the foregoing) or (b) with Wright’s prior written consent (such consent not to be unreasonably withheld) and if permissible under applicable law, at Stryker’s or Purchaser’s election any of the Post-Offer Reorganizations described in clause (a) or any Alternative Post-Offer Reorganization (as defined below).

Certain Adjustments

In the event that, during the period between the date of the Purchase Agreement and the Expiration Time, the number of outstanding Shares or securities convertible or exchangeable into or exercisable for Shares is

 

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changed into a different number of shares or securities of a different class as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer or other similar transaction, then the Offer Consideration and any other amounts payable pursuant to the Purchase Agreement will be equitably adjusted, without duplication, to reflect such change.

Representations and Warranties

In the Purchase Agreement, Wright has made customary representations and warranties to Stryker and Purchaser that are subject to specified exemptions and qualifications contained in the Purchase Agreement and the Wright Disclosure Letter and to certain disclosures in Wright’s SEC filings publicly available at least one business day prior to the date of the Purchase Agreement, including representations relating to, among other things: its organization and corporate power; its authorization with respect to the Purchase Agreement and the transactions contemplated by the Purchase Agreement; its capitalization; its subsidiaries; no breach of its organizational documents, law or its contracts; required consents; its SEC reports and financial statements; internal controls and procedures over disclosures and financial reporting; the absence of undisclosed liabilities; the absence of certain developments; its compliance with laws; its tangible and real properties; tax matters; its material contracts and commitments; intellectual property matters; litigation matters; insurance matters; employee benefit plan matters; environmental matters; employment and labor matters; regulatory matters; brokerage fees; the accuracy of information supplied for purposes of the Offer documents, the Schedule 14D-9 and the proxy statement; anti-takeover measures; and the opinion of Wright’s financial advisor with respect to the fairness of the Offer Consideration.

The representations and warranties in the Purchase Agreement made by Wright are, in certain cases, modified by “knowledge,” “materiality” and “Wright Material Adverse Effect” qualifiers. For purposes of the Purchase Agreement, with respect to Wright, “knowledge” means the actual knowledge of certain employees of Wright. For purposes of the Purchase Agreement, “Wright Material Adverse Effect” means any change, effect, event, inaccuracy, occurrence or other matter that, individually or in the aggregate, (a) prevents or materially delays Wright from consummating the transactions contemplated by the Purchase Agreement or performing its obligations under the Purchase Agreement or (b) has a material adverse effect on the business, condition (financial or otherwise), assets, operations, or results of operations of Wright and its subsidiaries, taken as a whole, provided, however, that in the case of clause (b), any changes, effects, events, inaccuracies, occurrences, or other matters resulting from any of the following will be disregarded in determining whether a Wright Material Adverse Effect has occurred:

 

   

matters generally affecting the U.S. or foreign economies, financial or securities markets, or matters generally affecting the political, legislative or regulatory conditions in the industry in which Wright and its subsidiaries operate, except to the extent such matters have a disproportionate adverse effect on Wright and its subsidiaries, taken as a whole, relative to the impact on other companies in the industry in which Wright and its subsidiaries operate;

 

   

the announcement or pendency of the Purchase Agreement or the transactions contemplated by the Purchase Agreement;

 

   

any change in the market price or trading volume of the Shares; provided, that, this exception will not preclude a determination that a matter underlying such change has resulted in a Wright Material Adverse Effect;

 

   

acts of war or terrorism (or the escalation of the foregoing) or natural disasters, national emergencies, or other similar force majeure events, except to the extent such matters have a disproportionate adverse effect on Wright and its subsidiaries, taken as a whole, relative to the impact on other companies in the industry in which Wright and its subsidiaries operate;

 

   

changes in GAAP, laws, regulations or accounting principles, or interpretations thereof, except to the extent such changes have a disproportionate adverse effect on Wright and its subsidiaries, taken as a

 

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whole, relative to the impact on other companies in the industry in which Wright and its subsidiaries operate;

 

   

any action taken by Wright expressly required to be taken by the terms of the Purchase Agreement;

 

   

any action taken by Wright at the express written request of Stryker or Purchaser after the date of the Purchase Agreement; or

 

   

any failure by Wright to meet any internal or analyst projections or forecasts or estimates of revenues, earnings, or other financial metrics for any period; provided, that, this exception will not preclude a determination that a matter underlying such failure has resulted in a Wright Material Adverse Effect.

Additionally, the Purchase Agreement provides, among other things, that Wright has represented that the Wright Board, at a meeting duly called and held, has unanimously (a) determined that the Purchase Agreement and certain of the transactions contemplated by the Purchase Agreement are in the best interests of Wright, its business and its shareholders, employees and other relevant stakeholders, (b) approved and adopted the Purchase Agreement (including the execution, delivery and performance of the Purchase Agreement) and approved certain transactions contemplated by the Purchase Agreement and (c) resolved, on the terms and subject to the conditions set forth in the Purchase Agreement, to support the Offer and certain other transactions contemplated by the Purchase Agreement, and to recommend acceptance of the Offer by the shareholders of Wright and to recommend approval and adoption of the shareholder approvals at the Extraordinary General Meeting (such recommendation, the “Wright Board Recommendation”) and that such recommendation is not required to be conditioned on works council consultation or approval.

In the Purchase Agreement, Stryker and Purchaser have also made customary representations and warranties to Wright that are subject to specified exemptions and qualifications contained in the Purchase Agreement. Purchaser’s representations and warranties are, in certain cases, modified by “knowledge,” “materiality” and “Purchaser Material Adverse Effect.” For purposes of the Purchase Agreement, “Purchaser Material Adverse Effect” means any change, effect, event, inaccuracy, occurrence or other matter that has a material adverse effect on the ability of Stryker or Purchaser to perform its obligations under the Purchase Agreement or to consummate the transactions contemplated by the Purchase Agreement or on the consummation of, whether by prevention or material delay, any of the transactions contemplated by the Purchase Agreement.

Purchaser’s representations and warranties include representations relating to, among other things: the organization and corporate power of Stryker and Purchaser; the authorization of Stryker and Purchaser with respect to the Purchase Agreement and the transactions contemplated by the Purchase Agreement; no breach of Stryker’s or Purchaser’s organizational documents or law; required consents; litigation matters; the accuracy of information supplied for purposes of the Offer documents, the Schedule 14D-9 and the proxy statement; brokerage fees; operations of Purchaser; lack of ownership of Shares by Stryker, Purchaser or their subsidiaries; Stryker and Purchaser having, at the Offer Closing, all funds necessary to consummate the Offer Closing; and the absence of other agreements with any member of the Wright Board or officers or employees of Wright or its subsidiaries.

None of the representations and warranties contained in the Purchase Agreement will survive the Acceptance Time.

Conduct of Wright Pending the Offer Closing

Except (a) as set forth in the Wright Disclosure Letter, (b) as required by applicable law, (c) as expressly required by the Purchase Agreement or (d) with the prior written consent of Stryker (which consent will not be unreasonably delayed, withheld or conditioned), from the date of the Purchase Agreement until the earlier of the Offer Closing or the date the Purchase Agreement is validly terminated in accordance with its terms (the “Pre-Closing Period”), Wright will, and will cause its subsidiaries to, carry on their respective businesses in the

 

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ordinary course of business consistent with past practice and use reasonable best efforts to preserve intact their respective current business organizations, keep available the services of their respective current officers, employees and consultants and preserve their respective relationships with customers, suppliers, partners, licensors, licensees, distributors and others having business dealings with it. During the Pre-Closing Period and except as set forth in the Wright Disclosure Letter, as required by applicable law or as expressly required by the Purchase Agreement, Wright will not and will not permit any of its subsidiaries, without the prior written consent of Stryker (which, in the case of clauses 3, 5, 6, 10, 13, 14, 17 and 24 (solely to the extent relating to the foregoing actions described in this parenthetical) below, consent will not be unreasonably delayed, withheld or conditioned), to:

 

  1.

(A) declare, set aside or pay any dividends on or make other distributions (whether in cash, stock or property) in respect of any of its share capital, equity interests or other ownership or voting interests or (B) directly or indirectly redeem, repurchase or otherwise acquire any shares of its share capital, equity interests or other ownership or voting interests or any Wright Stock Options, RSUs, PSUs, or rights to acquire the Shares under the Wright ESPP with respect thereto except, in each case, (i) for the declaration and payment of cash dividends or distributions by a direct or indirect, wholly-owned subsidiary of Wright solely to its parent in the ordinary course of business consistent with past practice, (ii) Shares for the purpose of fulfilling its obligations under the Wright ESPP, to the extent consistent with past practice and as contemplated by the Purchase Agreement, (iii) for any dispositions of Shares to Wright as a result of a net share settlement of any Wright Stock Option or to satisfy withholding Tax obligations in respect of any Wright Stock Option, RSU or PSU, in each case in accordance with the applicable Wright Equity Plan or (iv) any forfeitures or repurchases of Shares issued pursuant to or granted as awards under Wright Equity Plans, in each case, in accordance with the applicable Wright Equity Plan;

 

  2.

issue, transfer, sell, pledge, dispose of or otherwise encumber, or authorize the issuance, transfer, sale, pledge, disposition or other encumbrance of, (A) any shares of its share capital, equity interests or other ownership or voting interests in Wright or any of its subsidiaries, (B) any securities convertible into or exchangeable or exercisable for any such shares, equity interests or ownership or voting interests, (C) any phantom equity or similar contractual rights or (D) any rights, warrants or options to acquire or with respect to any such share capital, equity interests or other ownership or voting interests or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing share option plan except, in each case: for issuances of the Shares in respect of (i) any exercise of Wright Stock Options outstanding on the date of the Purchase Agreement, in accordance with their terms on the date of the Purchase Agreement, (ii) any vesting or delivery of Shares under RSUs outstanding on the date of the Purchase Agreement, in accordance with their terms as of the date of the Purchase Agreement or (iii) the exercise of any rights to acquire the Shares under the terms of the Wright ESPP;

 

  3.

except as required by the terms of a Wright employee benefit plan or pursuant to a collective bargaining agreement or similar contract as in effect as of the date of the Purchase Agreement, (A) increase the wages, salary or other compensation or benefits with respect to any of Wright’s or any of its subsidiaries’ officers, directors, independent contractors or employees, except for increases in compensation in the ordinary course of business consistent with past practice, (B) establish, adopt, enter into, amend in any material respect or terminate any Wright employee benefit plan or any other plan, agreement, program or arrangement that would be a Wright employee benefit plan if in existence on the date of the Purchase Agreement, except in the ordinary course or business consistent with past practice and as would not result in material liability to Wright, (C) accelerate or take any action to accelerate any payment or benefit, or accelerate the funding of any payment or benefit, payable or to become payable to any current or former director, officer, employee or consultant of Wright or any subsidiary or (D) communicate with the employees of Wright or any of its subsidiaries regarding the compensation, benefits or other treatment they will receive following the Offer Closing, unless such communication is (i) in the case of written communications, approved by Stryker in advance of such communication, (ii) required by applicable law or (iii) in the case of communications not in writing,

 

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  consistent with how such compensation, benefits or other treatment is contemplated in the Purchase Agreement;

 

  4.

(A) adopt, enter into or amend any collective bargaining agreement or other contract with any labor union, labor or trade organization or other employee representative body applicable to Wright or its subsidiaries or (B) recognize or certify any labor union, labor or trade organization, works council or group of employees of Wright or its subsidiaries as the bargaining representative for any employees of Wright or its subsidiaries;

 

  5.

waive the restrictive covenant obligations of any current or former director, officer or employee of Wright or any of its subsidiaries;

 

  6.

(A) hire or engage, or make a written offer to hire or engage, any (i) officer or employee (other than sales representatives), whose annual base salary or fee arrangement would exceed $175,000, other than in the ordinary course of business consistent with past practices to replace an employee who has resigned or had his or her employment or engagement terminated or (ii) sales representatives other than in the ordinary course of business consistent with past practices or (B) terminate the employment or service of any officer;

 

  7.

amend, or propose to amend, or permit the adoption of any amendment of any organizational document of Wright (including by merger, consolidation or otherwise) or any of its subsidiaries or adopt a shareholders’ rights plan, or enter into any agreement with respect to the voting of its share capital;

 

  8.

effect a recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for shares of its share capital, equity interests or other ownership or voting interests;

 

  9.

merge or consolidate with any person or adopt or effect a plan of complete or partial liquidation, dissolution, consolidation, restructuring, including an internal reorganization or transfer of equity of a subsidiary, or recapitalization;

 

  10.

subject to clause 11 below, make capital expenditures (other than amounts spent on instruments in the ordinary course of business consistent with past practices) in any year in an aggregate amount in excess of 115% of the aggregate amount indicated in the capital expenditure budget of Wright for such year set forth in the Wright Disclosure Letter;

 

  11.

acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a material portion of the assets of any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any material assets of any other person, except for the purchase of inventory and supplies from suppliers or vendors in the ordinary course of business or in individual transactions involving less than $1.5 million in assets;

 

  12.

(A) incur, create, assume or otherwise become liable or responsible for, whether directly, indirectly, contingently or otherwise, any indebtedness, renew or extend any existing credit or loan arrangements, enter into any “keep well” or other agreement to maintain any financial condition of another person or enter into any agreement or arrangement having the economic effect of any of the foregoing, except for loans between or among Wright and any of its subsidiaries incurred in the ordinary course of business consistent with past practice, (B) make any loans or advances to any other person other than loans between or among Wright and any of its subsidiaries made in the ordinary course of business consistent with past practice, (C) make any capital contributions to, or investments in, any other person, (D) repurchase, prepay or refinance any indebtedness, except for short-term indebtedness incurred in the ordinary course of business consistent with past practice, (E) cancel any material indebtedness (individually or in the aggregate), (F) enter into any capital lease with aggregate annual payments of an amount greater than $1 million and (G) incur any Indebtedness not otherwise covered by the foregoing clauses (A) – (F) in the ordinary course of business consistent with past practice of any amount greater than $1 million per incurrence or $5 million in the aggregate;

 

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  13.

sell, contribute, distribute, transfer, license, assign, mortgage, encumber, or incur or permit to exist any lien on (other than certain permitted liens) or otherwise abandon, withdraw or dispose of (A) any assets (other than intellectual property owned by Wright or any of its subsidiaries) with a net book value in excess of $100,000 in the aggregate or (B) any intellectual property owned by Wright or any of its subsidiaries or intellectual property exclusively licensed to Wright or any of its subsidiaries, except, in the case of clause (A), in the ordinary course of business consistent with past practices among Wright and any of its subsidiaries or, in the case of clause (B), with respect to (i) certain licenses and non-exclusive licenses granted in the ordinary course of business consistent with past practices pursuant to Wright’s or its subsidiaries’ standard customer contracts or (ii) abandonments or withdrawals of immaterial intellectual property owned by Wright or any of its subsidiaries in the ordinary course of business consistent with past practices;

 

  14.

commence, pay, discharge, settle, compromise or satisfy any legal action, except, in the case of legal actions unrelated to the Purchase Agreement or the transactions contemplated by the Purchase Agreement, settlements that result solely in payment of monetary consideration (without the admission of wrongdoing) not greater than $500,000 in any individual legal action or $5 million in the aggregate;

 

  15.

change its fiscal year, revalue any of its material assets (except for the revaluation of inventory on an annual basis in the ordinary course of business) or change any of its financial, actuarial, reserving or tax accounting methods or practices in any material respect, except as required by GAAP or applicable law;

 

  16.

(A) make, change or revoke any material tax election with respect to Wright or any of its subsidiaries, (B) file any material amended tax return or claim for refund of material taxes with respect to Wright or any of its subsidiaries, (C) enter into any “closing agreement” as described in Section 7121 of the United States Internal Revenue Code of 1986 (the “Code”) (or any corresponding or similar provision of state, local or non-U.S. law), tax allocation agreement, tax sharing agreement, tax indemnity agreement relating to or affecting any material tax liability or refund of material taxes with respect to Wright or any of its subsidiaries, (D) extend or waive the application of any statute of limitations regarding the assessment or collection of any material tax with respect to Wright or any of its subsidiaries or (E) settle or compromise any material tax liability or refund of material taxes with respect to Wright or any of its subsidiaries or surrender any right to claim a material tax refund;

 

  17.

enter into, waive, release or assign any material rights or claims under, or renew, affirmatively determine not to renew, amend or modify in any material respect, exercise any options or rights of first offer or refusal under or terminate, material contracts, except, in the case of certain material contracts, in the ordinary course of business consistent with past practices, provided, that the foregoing exception will not apply to the extent such entry into, waiver, release or assignment of, renewal or affirmative determination not to renew, amendment, exercise or termination of such contract requires or provides for consent, acceleration, termination or any other material right for the benefit of a third party or consequence to Wright that is triggered in whole or in part by any of the transactions contemplated by the Purchase Agreement;

 

  18.

abandon, withdraw, terminate, suspend, abrogate, amend or modify in any material respect any material permits held by Wright or any of its subsidiaries in a manner that would materially impair the operation of the business of Wright and its subsidiaries;

 

  19.

enter into a research or collaboration arrangement (other than any service or product development agreements with health care providers entered into in the ordinary course of business consistent with past practice) under which contemplated payments by or to Wright are in excess of $2.5 million in the aggregate in any 12 month period;

 

  20.

grant any options or rights or enter into any agreement, which requires payments to or from Wright or any of its subsidiaries in excess of $2.5 million, to (A) sell, assign, transfer, lease, license or otherwise dispose of any real property owned or leased by Wright or any of its subsidiaries or any portion thereof or interest therein or (B) purchase or otherwise acquire any real property or any interest therein;

 

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  21.

unless Wright determines in good faith, after consultation with its outside legal counsel, that a meeting is required by applicable law, convene any general or special meeting of the shareholders of Wright other than the Extraordinary General Meeting, any subsequent extraordinary general meeting, pursuant to the Purchase Agreement and the holding of the 2020 annual general meeting of shareholders of Wright on or prior to June 30, 2020;

 

  22.

forgive any loans or advances to any officers, employees or directors of Wright or its subsidiaries, or any of their respective affiliates, or change its existing borrowing or lending arrangements for or on behalf of any of such persons;

 

  23.

fail to use commercially reasonable efforts to (A) maintain in effect the existing material insurance policies covering Wright and its subsidiaries and their respective properties, assets and businesses or (B) preserve the rights of Wright and its subsidiaries to pursue current and/or future claims under the current and prior versions of such material insurance policies, provided that Wright or its subsidiaries will not be required to institute a lawsuit against any present or former insurance carrier; or

 

  24.

authorize, agree or commit to take any of the actions described in clauses 1 through 23 above.

No Solicitation

Wright has agreed that it will not, will cause its subsidiaries not to, and will instruct (and use it reasonable best efforts to cause) its representatives not to:

 

   

directly or indirectly initiate, solicit or knowingly encourage or knowingly facilitate (including by way of providing information) any inquiries, proposals or offers, or the making of any submission or announcement of any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal or any inquiry, proposal or offer that, in each case, constitutes or would reasonably be expected to lead to an Acquisition Proposal;

 

   

directly or indirectly engage in, enter into or participate in any discussions or negotiations with any person (or its representatives) making an Acquisition Proposal or inquiry, proposal or offer that, in each case, constitutes or would reasonably be expected to lead to an Acquisition Proposal; or

 

   

provide any information or afford access to the properties of Wright or its subsidiaries to, or take any other action to knowingly assist or knowingly encourage or knowingly facilitate any effort by any person (other than Stryker, Purchaser or any representatives of Stryker or Purchaser) in a manner that would reasonably be expected to lead to an Acquisition Proposal or in connection with or in response to any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal.

Wright has also agreed that it will, and will cause its subsidiaries to, and will instruct (and use it reasonable best efforts to cause) its representatives to, (a) immediately cease any activities, solicitation, discussions or negotiations with any person (or its representatives) (other than Stryker, Purchaser or any representatives of Stryker or Purchaser) with respect to any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal, (b) to the extent Wright has the right to do so, will, within one business day of the date of the Purchase Agreement, request the return or destruction of all confidential information provided by or on behalf of Wright or its subsidiaries to any such person (or its representatives) and (c) terminate, within one business day of the date of the Purchase Agreement, access to any such person (or its representatives) any physical or electronic data rooms relating to a possible Acquisition Proposal. Subject to the provisions of the Purchase Agreement, Wright and its representatives may in any event inform a person that has made an Acquisition Proposal about the non-solicitation provisions of the Purchase Agreement.

If, at any time following the date of the Purchase Agreement and prior to the Acceptance Time, (a) Wright has received a written Acquisition Proposal that did not result from a material breach of the non-solicitation provisions of the Purchase Agreement and (b) the Wright Board determines, in good faith, after consultation with

 

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its outside counsel and financial advisor, that such Acquisition Proposal constitutes or is reasonably likely to lead to or result in a Superior Proposal (as defined below), then Wright may (i) furnish information with respect to Wright and its subsidiaries to the person making such Acquisition Proposal and its representatives and (ii) participate in discussions or negotiations with such person and its representatives regarding such Acquisition Proposal, provided that (x) Wright will not, and will instruct (and use it reasonable best efforts to cause) its representatives not to, disclose any non-public information to such person (or its representatives) unless Wright has, or first enters into, a confidentiality agreement with such person with confidentiality provisions that, taken as a whole, are not less restrictive to the other Person than those contained in the confidentiality agreement between Stryker and Wright and (y) Wright will, substantially concurrently, and in any event within one business day, provide or make available to Stryker any information concerning Wright or its subsidiaries provided or made available to such other person (or any of its representatives) that was not previously provided or made available to Stryker and Purchaser.

Wright will not, and will cause its representatives not to, release any person from, or waive, amend or modify any provision of, or grant permission under or fail to enforce, any standstill provision in any agreement to which Wright is a party, provided that, if the Wright Board determines in good faith, after consultation with its outside counsel that the failure to take such action would be inconsistent with its fiduciary duties under applicable law, Wright may waive any such standstill provision to the extent necessary to permit the applicable person (if such person has not been solicited in material breach of the non-solicitation provisions of the Purchase Agreement) to make, on a confidential basis to the Wright Board, an Acquisition Proposal, conditioned upon such person agreeing that Wright will not be prohibited from providing any information to Stryker (including regarding any such Acquisition Proposal) in accordance with, and otherwise complying with, the non-solicitation provisions of the Purchase Agreement.

Wright is required to promptly (and in any event within one business day after receipt thereof) notify Stryker of (a) the receipt by Wright of an Acquisition Proposal or inquiry, proposal or offer that constitutes or would reasonably be expected to lead to an Acquisition Proposal or any requests for information, or any discussions or negotiations sought to be initiated or continued related to the foregoing and (b) the terms and conditions of any Acquisition Proposal (including a copy of such Acquisition Proposal) and any such inquiry, proposal, offer, request or contact. Wright has agreed to keep Stryker reasonably informed, on a prompt basis (and, in any case, within one business day of any significant development, discussions or negotiations) as to the status of such Acquisition Proposal or such inquiry, proposal, offer, request or contact, including by promptly (and in no event later than one business day) (i) disclosing to Stryker the identity of the person making such Acquisition Proposal or such inquiry, proposal, offer, request or contact and (ii) providing to Stryker complete, unredacted copies of any correspondence, proposals, indications of interest and/or draft and final agreements (including schedules, exhibits and any other written materials related thereto (including any financing commitments received)) (and comments thereon) exchanged between Wright or its subsidiaries or any of its or its subsidiaries’ representatives, on the one hand, and the person (or any of its representatives) making such Acquisition Proposal or such inquiry, proposal, offer, request or contact, on the other hand.

For purposes of the Purchase Agreement, “Acquisition Proposal” means any offer or proposal (whether or not in writing) made or renewed by a person or group (other than Stryker or Purchaser) at any time after the date of the Purchase Agreement relating to, or that would reasonably be likely to lead to, any person or group acquiring, directly or indirectly, beneficial ownership of 15% or more of any class of equity or voting securities of Wright (or of any resulting parent company of Wright ) or assets representing 15% or more of the consolidated revenues, net income or total assets of Wright and its subsidiaries, pursuant to a merger, consolidation, joint-venture, recapitalization, dissolution, liquidation or other business combination, sale of share capital, sale, license or other transfer or disposition of assets, tender offer or exchange offer, or similar transaction, including any single or multi-step transaction or series of related transactions, in each case, other than the Offer, Asset Sale, Compulsory Acquisition, Liquidation, Second Step Distribution and the Mergers.

For purposes of the Purchase Agreement, “Superior Proposal” means a written Acquisition Proposal (provided that for purposes of this definition, references to “15% or more” in the definition of “Acquisition

 

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Proposal” will be deemed to be references to “more than 50%”) that did not result from a material breach of the non-solicitation provisions of the Purchase Agreement that (a) the Wright Board determines in good faith is reasonably likely to be consummated on the terms proposed and (b) the Wright Board determines in good faith, after consultation with its outside counsel and financial advisor, is more favorable to Wright, and its shareholders, employees and other stakeholders than the transactions contemplated by the Purchase Agreement after giving effect to any changes to the Purchase Agreement proposed by Stryker in response to such Acquisition Proposal.

Wright has agreed that the Wright Board and each committee thereof will not (a) approve or adopt, or permit Wright or any of its subsidiaries to (and neither Wright nor any of its subsidiaries will) enter into or execute, any binding or non-binding letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, option agreement, merger agreement, joint venture agreement, partnership agreement or other agreement relating to or that would reasonably be expected to lead to (other than a confidentiality agreement pursuant to the non-solicitation covenant) an Acquisition Proposal (an “Alternative Acquisition Agreement”) or publicly propose to take such action or (b) make a Change of Board Recommendation.

For purposes of the Purchase Agreement, “Change of Board Recommendation” means:

 

   

the withdrawal or modification or qualification of the Wright Board Recommendation or any public proposal to withdraw, modify or qualify the Wright Board Recommendation;

 

   

the approval, authorization or recommendation by the Wright Board or any committee thereof of any Acquisition Proposal or any public proposal by the Wright Board or any committee thereof to approve, authorize or recommend any Acquisition Proposal;

 

   

the failure to include the Wright Board Recommendation in the Schedule 14D-9 or in the proxy statement when disseminated to the holders of Shares;

 

   

the failure by Wright, within 10 business days of the public announcement of the commencement of a tender or exchange offer for Shares that constitutes an Acquisition Proposal (whether or not a Superior Proposal) by a person other than Stryker or any of its subsidiaries, to file a Schedule 14D-9 pursuant to Rule 14e-2 and Rule 14d-9 promulgated under the Exchange Act recommending that the holders of the Shares reject such Acquisition Proposal and not tender any Shares into such tender or exchange offer; or

 

   

the failure by the Wright Board to publicly reaffirm the Wright Board Recommendation within 10 business days after receiving a written request from Stryker to provide such public reaffirmation following public disclosure of an Acquisition Proposal (or, if earlier (but still, after a written request delivered by Stryker to Wright at least 48 hours prior to the then-scheduled Expiration Time, or the Extraordinary General Meeting or any subsequent extraordinary general meeting, as applicable), prior to the then-scheduled Expiration Time, or the Extraordinary General Meeting or any subsequent extraordinary general meeting, as applicable), provided, that, Stryker may deliver only one such request with respect to any Acquisition Proposal subject to this clause (it being understood that any change to the financial terms or any other material terms of any such Acquisition Proposal, will constitute a new Acquisition Proposal for this purpose).

Prior to the Acceptance Time, Wright may make a Change of Board Recommendation and terminate the Purchase Agreement to enter into a definitive Alternative Acquisition Agreement with respect to a Superior Proposal (so long as prior to or concurrently with, and as a condition to the effectiveness of, such termination, Wright pays to Stryker the termination fee described below) if:

 

   

Wright receives a written Acquisition Proposal that did not result from a material breach of the non-solicitation provisions of the Purchase Agreement, and the Wright Board determines in good faith, after consultation with its outside counsel and financial advisor, constitutes a Superior Proposal;

 

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the Wright Board determines in good faith, after consultation with its outside counsel, that the failure to take any such action would be inconsistent with its fiduciary duties under applicable law;

 

   

Wright has notified Stryker in writing that it intends to terminate the Purchase Agreement to enter into such Alternative Acquisition Agreement and provided Stryker a copy of the proposed definitive agreement (and related agreements);

 

   

Wright has negotiated, and has instructed (and will have used it reasonable best efforts to cause) its representatives to negotiate, in good faith, with Stryker and its representatives during the four or two business day notice period, as applicable, to the extent Stryker requests to negotiate, to enable Stryker to revise the terms of the Purchase Agreement in such a manner that would cause such Superior Proposal to no longer constitute a Superior Proposal; and

no earlier than the end of the four or two business day notice period, as applicable, the Wright Board determines in good faith (after consultation with its outside counsel and financial advisor), after taking into consideration the terms of any proposed amendment or modification to the Purchase Agreement that Stryker has committed in writing to make during the four or two business day notice period, as applicable, that (a) the relevant Acquisition Proposal continues to constitute a Superior Proposal and (b) that the failure to take any such action would be inconsistent with its fiduciary duties under applicable law.

In addition, prior to the Acceptance Time, Wright may, other than in connection with or relating to an Acquisition Proposal, make a Change of Board Recommendation in response to an Intervening Event (as defined below) if:

 

   

the Wright Board determines in good faith, after consultation with its outside counsel, that the failure to take any such action would be inconsistent with its fiduciary duties under applicable law;

 

   

Wright has notified Stryker in writing that it intends to effect a Change of Board Recommendation (which notice will reasonably specify the facts and circumstances providing the basis of the Intervening Event and for the Wright Board’s determination to effect the Change of Board Recommendation);

 

   

Wright has negotiated, and has instructed (and will have used it reasonable best efforts to cause) its representatives to negotiate, in good faith, with Stryker and its representatives during the four business day notice period, to the extent Stryker requests to negotiate, to enable Stryker to revise the terms of the Purchase Agreement in such a manner that would eliminate the need for taking such action; and

 

   

no earlier than the end of the four business day notice period, the Wright Board determines in good faith (after consultation with its outside counsel), after considering the terms of any proposed amendment or modification to the Purchase Agreement that Stryker has committed in writing to make during the four business day notice period, that the failure to effect a Change of Board Recommendation in response to such Intervening Event would be inconsistent with its fiduciary duties under applicable law.

For purposes of the Purchase Agreement, “Intervening Event” means a material change, effect, event, circumstance, occurrence or other matter that was not known to the Wright Board or any committee thereof on the date of the Purchase Agreement (or if known, the consequences of which were not known to the Wright Board or any committee thereof as of the date of the Purchase Agreement), which change, effect, event, circumstance, occurrence or other matter, or any consequence thereof, becomes known to the Wright Board or any committee thereof prior to the Acceptance Time, provided, that in no event will any Acquisition Proposal or any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal constitute an Intervening Event.

The Purchase Agreement does not prohibit Wright or the Wright Board or a committee thereof from (a) taking and disclosing to the holders of Shares a position contemplated by Rule 14e-2(a) and Rule 14d-9 promulgated under the Exchange Act or (b) making any disclosure if the Wright Board determines, in good faith,

 

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after consultation with its outside counsel, that the failure to make such statement would be inconsistent with its fiduciary duties under applicable law, provided that any such disclosure (other than issuance by Wright of a “stop, look and listen” or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act) that does not expressly reaffirm the Wright Board Recommendation will be deemed to be a Change of Board Recommendation.

Compensation Arrangements

Prior to the Acceptance Time, the Compensation Committee of the Wright Board will take all actions that may be required to approve, as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(2) promulgated under the Exchange Act, any and all Compensation Actions taken after January 1 of the current fiscal year and prior to the Acceptance Time that have not already been so approved, where “Compensation Action” means any (a) granting by Wright or its subsidiaries to any present or former director or officer of any increase in compensation or benefits or of the right to receive any severance or termination compensation or benefit; (b) entry by Wright or its subsidiaries into any employment, consulting, indemnification, termination, change of control, non-competition or severance agreement with any present or former director or officer, or any approval, amendment, or modification of any such agreement; or (c) approval of, amendment to, or adoption of any a Wright employee benefit plan.

Delisting

Wright has agreed that prior to the Offer Closing it will, at Purchaser’s request, cooperate with Stryker and Purchaser and use reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable laws and rules and policies of Nasdaq to cause the delisting of Wright and the Shares from Nasdaq as promptly as practicable after the Offer Closing and the deregistration of the Shares under the Exchange Act as promptly as practicable after such delisting.

Anti-Takeover Measures

Wright and the Wright Board (and any applicable committees thereof) will take all actions necessary so that no anti-takeover measure is or becomes applicable to any of the transactions contemplated by the Purchase Agreement. If any anti-takeover measure becomes applicable to any of the transactions contemplated by the Purchase Agreement, Wright and the Wright Board (and any applicable committees thereof) will grant such approvals and take such actions as are necessary so that any such transactions may be consummated as promptly as practicable on the terms contemplated by the Purchase Agreement and otherwise act to eliminate such anti-takeover measures in respect of such transactions.

Director and Officer Liability

For a period of six years after the Offer Closing, Wright will, and Stryker will cause Wright to, maintain in effect the exculpation, indemnification and advancement of expenses equivalent to the provisions of Wright’s organizational documents as in effect immediately prior to the Offer Closing solely with respect to acts or omissions occurring prior to the Offer Closing and will not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any present (as of the Offer Closing) or former director or officer of Wright.

In addition, Stryker and Purchaser will, jointly and severally, from and after the Offer Closing, indemnify and hold harmless Wright, its subsidiaries and each present (as of the Offer Closing) or former director or officer of Wright against any liability for or on account of tax in connection with a Post-Offer Reorganization, including all obligations to pay a judgment, settlement, or penalty and reasonable expenses incurred in connection with any action in relation thereto, provided that, any such indemnity will be limited to taxes incurred in such person’s capacity as a director or officer of Wright and not as a holder of Shares or other equity of Wright.

 

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Wright may purchase prior to the Offer Closing, and if Wright does not purchase prior to the Offer Closing, Stryker will use reasonable best efforts to cause Wright to purchase at or after the Offer Closing, a tail policy under the current directors’ and officers’ liability insurance policies maintained at such time by Wright in respect of acts or omissions occurring at or prior to the Offer Closing, which tail policy (a) will be effective for a period from the Offer Closing through and including the date six years after the Offer Closing with respect to claims arising from facts or events that existed or occurred prior to or at the Offer Closing and (b) will contain coverage that is at least as protective to such directors and officers as the coverage provided by such existing policies, provided, that, the premium for such tail policy may not be (and Stryker will not be required to cause Wright to expend) in excess of 300% of the last annual premium paid prior to the Offer Closing. Stryker will cause any such policy to be maintained in full force and effect for their full term, and cause all obligations thereunder to be honored by Wright.

Employee Matters

For a period beginning on the date of the Offer Closing and ending on the first anniversary of such date or such earlier date as a Current Employee’s (as defined below) employment terminates, Stryker will or will cause Wright and its subsidiaries to, maintain for each individual who is employed by Wright or its subsidiaries at the Offer Closing (each, a “Current Employee”):

 

   

base compensation and target annual cash incentive compensation or bonus opportunity (but subject to applicable adjustments to performance goals following the Offer Closing) that are at least as favorable as that provided to such Current Employee immediately prior to the Offer Closing;

 

   

benefits that are at least as favorable in the aggregate to those benefits (excluding equity or equity-related awards and any defined benefit pension benefits) provided to such Current Employee immediately prior to the Offer Closing; and

 

   

severance benefits that are at least as favorable as the severance benefits (excluding equity or equity-related severance benefits) provided to such Current Employee immediately prior to the Offer Closing.

Prior to the Acceptance Time, Wright may pay to each Current Employee who is employed by Wright or one of its subsidiaries at the time of such payments the following cash bonuses:

 

   

at the time such bonuses are typically paid, up to an amount due to such Current Employee under Wright’s annual bonus program assuming the achievement of applicable performance metrics at the higher of “target” or actual performance in 2019;

 

   

up to an amount due to such Current Employee under Wright’s annual bonus program assuming if the Acceptance Time occurs in 2020, the achievement of applicable performance metrics at “target” in 2020 with such amount being pro-rated for the portion of the year prior to the Acceptance Time; and

 

   

up to an amount due to such Current Employee under Wright’s annual bonus program assuming if the Acceptance Time occurs in 2021, (a) the achievement of applicable performance metrics at the higher of “target” or actual performance in 2020 and (b) the achievement of applicable performance metrics at “target” in 2021 with such amount being pro-rated for the portion of the year prior to the Acceptance Time.

Each Current Employee will be credited with his or her years of service for purposes of eligibility, vesting and level of benefits under the employee benefit plans of Stryker, Wright and its other subsidiaries (excluding for benefit accrual purposes under any defined benefit plan) that such Current Employees may be eligible to participate in after the Offer Closing, to the same extent as such service was taken into account under any comparable Wright benefit plan immediately prior to the date of the Offer Closing. In addition, Stryker will not subject Current Employees to any eligibility requirements, actively-at-work requirements, pre-existing condition limitations or waiting periods under any employee benefit plan of Stryker, Wright or its other subsidiaries for any

 

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condition for which the Current Employee would have been entitled to coverage under a corresponding benefit plan of Wright prior to the Offer Closing, and if Current Employees commence participating in employee benefit plans of Stryker, Wright and other subsidiaries other than on the first day of a plan year, Stryker will use commercially reasonable efforts to provide credit under such benefit plans for any expenses incurred by Current Employees and their covered dependents under a benefit plan of Wright during the portion of the plan year that includes the Offer Closing for purposes of satisfying any applicable copayments, co-insurance, deductibles, maximum out-of-pocket requirements and other out-of-pocket expenses or similar requirements under any such plans applicable to Current Employees and their covered dependents in respect of the plan year in which the Offer Closing occurs, subject to Stryker’s receipt of necessary information related to amounts paid by such Current Employees.

Regulatory Approvals; Efforts

Stryker, Purchaser and Wright have agreed to use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper, or advisable under applicable laws to consummate the Offer by or before the Outside Date. In addition, Stryker, Purchaser and Wright have agreed to, (a) in cooperation and consultation with each other, make an appropriate filing of a Notification and Report Form pursuant to the HSR Act and all other filings required pursuant to applicable foreign antitrust laws with respect to the Transactions as promptly as reasonably practicable and in any event prior to the expiration of any applicable legal deadline (provided that the filing of a Notification and Report Form pursuant to the HSR Act must be made within 10 business days after the date of the Purchase Agreement, unless otherwise agreed to by Wright and Stryker in writing) and (b) to supply as promptly as reasonably practicable any additional information and documentary material that may be requested (including pursuant to a second or similar request) pursuant to the HSR Act or any other antitrust law. Stryker will, with the reasonable cooperation of Wright, be responsible for making any filing or notification, or draft filing as may be the case, required or advisable under foreign antitrust laws as promptly as reasonably practicable after the date of the Purchase Agreement, unless otherwise agreed to by Wright and Stryker in writing. Stryker, Purchaser and Wright will also consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to each other in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by, or on behalf of, them in connection with proceedings under or relating to any antitrust laws, provided that Stryker will have the right to devise, control and direct the strategy and timing for, and making of all material decisions relating to (and will take the lead in all meetings and communications with any governmental body relating to), obtaining any consent of a governmental body relating to antitrust laws, including resolving any action related to any such consent.

Stryker, Purchaser and Wright have agreed (a) to furnish to each other such information and assistance as the other may reasonably request in connection with obtaining any consent or any action under or relating to antitrust laws or otherwise relating to or to facilitate a Remedy (as defined below), (b) to give each other reasonable advance notice of all meetings with any governmental body relating to any antitrust laws or otherwise relating to or to facilitate a Remedy, (c) to give each other an opportunity to participate in each of such meetings, (d) to the extent practicable, to give each other reasonable advance notice of all substantive oral communications with any governmental body relating to any antitrust laws, (e) if any governmental body initiates a substantive oral communication regarding any antitrust laws, to promptly notify the other party of the substance of such communication, (f) to provide each other with a reasonable advance opportunity to review and comment upon all substantive written communications (including any analyses, presentations, memoranda, briefs, arguments, opinions and proposals) with a governmental body regarding any antitrust laws and (g) to provide each other with copies of all substantive written communications to or from any governmental body relating to any antitrust laws.

Stryker has agreed to, and will cause each of its subsidiaries to, take any and all actions necessary to obtain any consents, clearances or approvals required under or in connection with the HSR Act and any other antitrust laws to enable all applicable waiting periods to expire, and to avoid or eliminate impediments under applicable antitrust laws asserted by any governmental body, in each case, to cause the Offer to be consummated prior to the

 

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Outside Date, including if necessary to obtain clearance by any governmental body before the Outside Date, offering, negotiating, committing to, and effecting, by consent decree, hold, separate order, or otherwise, the sale, divestiture, license or other disposition of any and all of the capital stock, assets, equity holdings, rights, products or businesses of Stryker and its subsidiaries (including Wright and its subsidiaries), and any other restrictions on the activities of Stryker and its subsidiaries (including Wright and its subsidiaries) (the foregoing, a “Remedy”). To assist Stryker in complying with such obligations, Wright will (and will cause its subsidiaries to) enter into one or more agreements requested by Stryker to be entered into by any of them prior to the Offer Closing with respect to a Remedy. Without Stryker’s prior written consent, Wright will not (and will not permit any of its subsidiaries to) take or cause to be taken, do or cause to be done, offer, negotiate, commit to or effect any Remedy. Notwithstanding anything in the Purchase Agreement to the contrary, (a) Stryker’s obligation to (and to cause its subsidiaries (including for this purpose, Wright and its subsidiaries) to) offer, negotiate, commit to or effect any Remedy or Remedies will be limited to (i) total ankle replacement products and services and (ii) other products and services that represented, individually or in the aggregate, less than $25 million of annual revenue generated during the 2018 fiscal year and (b) Stryker will not be required to (or to cause its subsidiaries (including for this purpose, Wright and its subsidiaries) to) offer, negotiate, commit to or effect any Remedy or Remedies other than those required pursuant to clause (a).

In the event that any administrative or judicial action or proceeding is instituted (or threatened to be instituted) by a governmental body challenging any transaction contemplated by the Purchase Agreement, Stryker, Purchaser and Wright will cooperate in all respects with each other and will use their reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction, decision or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of such transactions.

Litigation

Except as otherwise set forth in the Purchase Agreement with regards to regulatory approvals, Wright will control any action brought against Wright or any of its subsidiaries or their directors or officers relating to or in connection with the Purchase Agreement or the transactions contemplated thereby, provided that (a) Wright will notify Stryker as soon as possible of such actions, (b) Wright will consult with Stryker regarding the defense of any such actions, and Stryker will have a right to participate in such defense and (c) Wright will not compromise or settle or offer to compromise or settle any such actions without the prior written consent of Stryker (which consent will not be unreasonably withheld, delayed or conditioned).

Financing Cooperation

Wright has agreed to, and will cause its Subsidiaries to, and will use its reasonable best efforts to cause its and their respective representatives to, on a timely basis, provide reasonable cooperation requested in writing by Stryker that is customary in connection with the arrangement, marketing, syndication and consummation of any public or private debt financing or any public or private equity offering, including any offering of derivative securities or other securities exchangeable for, or convertible into, equity securities (and the satisfaction of the conditions precedent to funding thereof) for transactions that are similar to the transactions contemplated by the Purchase Agreement. The obtaining of any financing is not a condition to the Offer Closing. If financing has not been obtained, Stryker and Purchaser will continue to be obligated, prior to any valid termination of the Purchase Agreement, and subject to the fulfillment or waiver of the conditions of the Offer, to complete the Offer and consummate the transactions contemplated by the Purchase Agreement.

Treatment of Certain Wright Indebtedness

Wright has agreed not to make any change to the terms of the indentures governing its Cash Convertible Senior Notes due 2020 (which matured on February 15, 2020), Cash Convertible Senior Notes due 2021 and Cash Convertible Senior Notes due 2023 (collectively, the “Convertible Notes”) without the prior written

 

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consent of Stryker. In addition, Wright and its subsidiaries will take all actions as may be required in accordance with, and subject to, the terms of such indentures including, without limitation, delivery, issuance or entry into, as applicable, of any notices, certificates, press releases, supplemental indentures, legal opinions, officers’ certificates or other documents or instruments required to comply with such indentures. At the Offer Closing, Wright will take all necessary action to perform and comply with all of its obligations under the indentures governing its Convertible Notes within the time periods required thereby, provided that any opinions of counsel required by such indentures, or as may be required by the trustee pursuant to such indentures, will be delivered by Wright and its counsel to the extent required to be delivered in connection with the transactions contemplated by the Purchase Agreement. In addition, Wright has agreed to take all commercially reasonable actions requested by Stryker in connection with making elections under, amending, obtaining waivers, and/or unwinding or otherwise settling the hedge and warrant transactions associated with the Convertible Notes.

Other Covenants

The Purchase Agreement contains other customary covenants and agreements, including, but not limited to, covenants related to access to information, confidentiality, public announcements and notification of certain matters.

Termination of the Purchase Agreement

The Purchase Agreement may be terminated and the transactions contemplated by the Purchase Agreement may be abandoned at any time prior to the Acceptance Time:

 

   

by mutual written consent of Wright and Stryker;

 

   

by either Wright or Stryker, if:

 

   

any court or other governmental body of competent jurisdiction has issued a final judgment, injunction order, decree or ruling or taken any other final action permanently restraining, enjoining or otherwise prohibiting the Offer, Asset Sale, Compulsory Acquisition, Liquidation, Second Step Distribution, the Mergers or any other transaction contemplated by the Purchase Agreement, and such judgment, injunction, order, decree, ruling or other action has become final and non-appealable (a “Judgment Termination”), provided that the Judgment Termination will not be available to any party if the failure of such party to perform or comply with any of its obligations under the Purchase Agreement in any material respect has been the principal cause of or principally resulted in the issuance of such judgment, injunction, order, decree or ruling or the taking of such other action;

 

   

the Acceptance Time has not occurred on or prior to the Outside Date (an “Outside Date Termination”), provided that the right to an Outside Date Termination will not be available to any party if the failure of such party to perform or comply with any of its obligations under the Purchase Agreement in any material respect has been the principal cause of or principally resulted in the failure of the Acceptance Time to have occurred on or before the Outside Date;

 

   

the Offer (as it may have been extended and re-extended in accordance with the terms of the Purchase Agreement) expires as a result of the non-satisfaction of any condition to the Offer or is terminated pursuant to its terms and the Purchase Agreement without Purchaser having accepted for purchase any Shares validly tendered (and not withdrawn) pursuant to the Offer (a “Condition Failure Termination”), provided that the Condition Failure Termination will not be available to any party if the failure of such party to perform or comply with any of its obligations under the Purchase Agreement in any material respect has been the principal cause of or principally resulted in the non-satisfaction of any such condition to the Offer or the termination of the Offer pursuant to its terms without Purchaser having accepted for purchase any Shares validly tendered (and not withdrawn) pursuant to the Offer; or

 

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the Extraordinary General Meeting has been held and been concluded and (a) the Governance Resolutions have not been adopted, (b) the Asset Sale Resolutions have not been adopted, (c) the Merger Resolutions have not been adopted or (d) the Demerger Resolution have not been adopted (an “EGM Failure Termination”);

 

   

by Wright:

 

   

if (a) Purchaser fails to commence the Offer in violation of the Purchase Agreement or (b) Purchaser, in violation of the terms of the Purchase Agreement, fails to accept for purchase Shares validly tendered (and not withdrawn) pursuant to the Offer (a “Failed Offer Termination”), provided, however, that the Failed Offer Termination will not be available if Wright has breached its obligations under the Purchase Agreement in any manner that is the principal cause of or principally resulted in the failure of the Offer to so commence;

 

   

if there has been a breach of any covenant or agreement made by Stryker or Purchaser in the Purchase Agreement, or any representation or warranty of Stryker or Purchaser is inaccurate or becomes inaccurate after the date of the Purchase Agreement, and such breach or inaccuracy gives rise to a Purchaser Material Adverse Effect, and such breach or inaccuracy is not capable of being cured within 30 days following receipt by Stryker or Purchaser of written notice from Wright of such breach or inaccuracy or, if such breach or inaccuracy is capable of being cured within such period, it has not been cured within such period (a “Purchaser Breach Termination”), provided that the Purchaser Breach Termination will not be available if Wright is then in material breach of any of its representations, warranties, covenants or agreements under the Purchase Agreement; or

 

   

in order for Wright to enter into a definitive Alternative Acquisition Agreement with respect to a Superior Proposal to the extent permitted by, and subject to the applicable terms and conditions of, the non-solicitation provisions of the Purchase Agreement (an “Alternative Acquisition Agreement Termination”);

 

   

by Stryker, if:

 

   

there has been a breach of any covenant or agreement made by Wright in the Purchase Agreement, or any representation or warranty of Wright is inaccurate or becomes inaccurate after the date of this Agreement, and such breach or inaccuracy gives rise to a failure of the Wright No Breach Condition (as defined below), and such breach or inaccuracy is not capable of being cured within 30 days following receipt by Wright of written notice from Stryker or Purchaser of such breach or inaccuracy or, if such breach or inaccuracy is capable of being cured within such period, it has not been cured within such period (a “Wright Breach Termination”), provided the Wright Breach Termination shall not be available if Stryker or Purchaser is then in material breach of any of its representations, warranties, covenants or agreements under the Purchase Agreement; or

 

   

(a) the Wright Board or any committee thereof effects a Change of Board Recommendation or (b) the Wright Board or any committee thereof or Wright breaches in any material respect the non-solicitation provisions of the Purchase Agreement (a “Change of Board Recommendation Termination”).

Effect of Termination

If the Purchase Agreement is terminated pursuant to its terms, it will become void and of no effect with no liability on the part of any party (or of any of its representatives) and all rights and obligations of any party shall cease, except that (a) certain specified provisions of the Purchase Agreement will survive, including those with respect to the Termination Fee (as defined below) and (b) no such termination will relieve any person of any liability for damages resulting from a material breach of the Purchase Agreement that is a consequence of an act or omission intentionally undertaken by the breaching party with the knowledge that such act or omission would, or would reasonably be expected to, result in a material breach of the Purchase Agreement or fraud. Stryker will cause the Offer to be terminated immediately after any termination of the Purchase Agreement.

 

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Termination Fee

Wright has agreed to pay Stryker a termination fee of $150 million (the “Termination Fee”) if:

 

   

the Purchase Agreement is terminated by Wright pursuant to an Alternative Acquisition Agreement Termination;

 

   

the Purchase Agreement is terminated by Stryker pursuant to a Change of Board Recommendation Termination; or

 

   

(a) the Purchase Agreement is terminated by (i) Stryker pursuant to a Wright Breach Termination on the basis of a breach of a covenant or agreement, (ii) either Stryker or Wright pursuant to an EGM Failure Termination or (iii) either Stryker or Wright pursuant to an Outside Date Termination or a Condition Failure Termination (and in the case of a termination by either Stryker or Wright pursuant to a Condition Failure Termination, at the time of the expiration or termination of the Offer, all conditions to the Offer (other than the Minimum Condition) were satisfied or waived), (b) in any such termination under clause (a), prior to such termination, an Acquisition Proposal made after the date of the Purchase Agreement has been publicly disclosed and not publicly withdrawn or is otherwise known to the Wright Board and not withdrawn (publicly, if publicly disclosed) and (c) within 12 months after any such termination, Wright or any of its subsidiaries enters into an Alternative Acquisition Agreement with respect to any Acquisition Proposal (regardless of when or whether such transaction is consummated) or any Acquisition Proposal is consummated (provided, that for purposes of clause (c), references to “15% or more” in the definition of Acquisition Proposal will be substituted for “more than 50%”).

Governing Law, Jurisdiction

The Purchase Agreement and any action arising out of or relating to the Purchase Agreement or the transactions contemplated thereby, will be governed by, and construed in accordance with, the laws of the State of Delaware. Stryker, Purchaser and Wright have (a) expressly and irrevocably submitted to the exclusive personal jurisdiction of the Court of Chancery of the State of Delaware or if such Court of Chancery lacks subject matter jurisdiction, the United States District Court for the District of Delaware, in the event any dispute arises out of the Purchase Agreement, the Offer, or the other transactions contemplated by the Purchase Agreement, (b) agreed not to attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agreed not to bring any action relating to the Purchase Agreement, the Offer, or the other transactions contemplated by the Purchase Agreement in any court other than the Court of Chancery of the State of Delaware or if such Court of Chancery lacks subject matter jurisdiction, the United States District Court for the District of Delaware.

Specific Performance

Stryker, Purchaser and Wright have agreed that in the event of any breach of the Purchase Agreement, irreparable harm would occur that monetary damages could not make whole and that accordingly each party will be entitled, in addition to any other remedy to which it may be entitled at law or in equity, to compel specific performance to prevent or restrain breaches or threatened breaches of the Purchase Agreement in any action without the posting of a bond or undertaking.

Conditions to the Closing of the Offer

Purchaser is not required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares validly tendered and not properly withdrawn in connection with the Offer, unless, immediately prior to the then

 

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applicable Expiration Time, each of the following conditions to the Offer has been satisfied or waived (to the extent such waiver is permitted by applicable law and the terms of the Purchase Agreement):

 

  (a)

the Minimum Condition;

 

  (b)

the Regulatory Clearance Condition;

 

  (c)

the Legal Restraints Condition;

 

  (d)

(a) Wright has not breached or failed to comply in any material respect with any of its agreements or covenants to be performed or complied with by it under the Purchase Agreement on or before the Acceptance Time, (b) the representations and warranties of Wright contained in the Purchase Agreement (other than the representations and warranties set forth in Section 3.2 (Authorization; Valid and Binding Agreement), Section 3.3(a), the first sentences of Section 3.3(b) and Section 3.3(c), Sections 3.3(d)-(f) and Section 3.3(h) (to the extent it relates to Wright, its share capital or other interests therein) (Capitalization), Section 3.5(a)(i) (No Breach), the first sentence of Section 3.9 (Absence of Certain Developments), Section 3.21 (Brokerage), Section 3.23 (Anti-Takeover Measures) and Section 3.24 (Opinion) of the Purchase Agreement) and that (i) are not made as of a specific date are true and correct as of the Expiration Time, as though made on and as of the Expiration Time and (ii) are made as of a specific date are true as of such date, in each case, except, in the case of (i) or (ii), where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or “Wright Material Adverse Effect”) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Wright Material Adverse Effect, (c) the representations and warranties set forth in Section 3.2 (Authorization; Valid and Binding Agreement), Section 3.3(a), the first sentence of Section 3.3(c), Sections 3.3(d)-(f) and Section 3.3(h) (to the extent it relates to Wright, its share capital or other interests therein) (Capitalization), Section 3.5(a)(i) (No Breach), the first sentence of Section 3.9 (Absence of Certain Developments) and Section 3.23 (Anti-Takeover Measures) of the Purchase Agreement are true and correct in all respects, except in the case of Section 3.3(a), the first sentence of Section 3.3(c), Sections 3.3(d)-(f) and Section 3.3(h) (to the extent it relates to Wright, its share capital or other interests therein) (Capitalization) of the Purchase Agreement for de minimis inaccuracies, as of the Expiration Time as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is so true and correct or (d) the representations and warranties set forth in the first sentence of Section 3.3(b) (Capitalization), Section 3.21 (Brokerage) and Section 3.24 (Opinion) of the Purchase Agreement are true and correct in all material respects as of the Expiration Time as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty is so true and correct as of such earlier date) (collectively, the “Wright No Breach Condition”);

 

  (e)

the Material Adverse Effect Condition;

 

  (f)

Wright has delivered to Stryker a certificate dated as of the Expiration Time signed on behalf of Wright by a senior executive officer of Wright to the effect that the Wright No Breach Condition and the Material Adverse Effect Condition have been satisfied as of the Expiration Time;

 

  (g)

the resignations of the existing members of the Wright Board as contemplated by the Purchase Agreement have been obtained;

 

  (h)

the Governance Resolutions Condition; and

 

  (i)

the Purchase Agreement has not been terminated pursuant to its terms.

The foregoing conditions are for the benefit of Stryker and Purchaser and (except for the Minimum Condition and the condition set forth in the last bullet above) may be waived (where permitted by applicable law) by Stryker or Purchaser in whole or in part at any time or from time to time prior to the Expiration Time, in each

 

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case, subject to the terms and conditions of the Purchase Agreement and the applicable rules and regulations of the SEC. The foregoing conditions are in addition to, and not a limitation of, the rights and obligations of Purchaser to extend, terminate, amend and/or modify the Offer in accordance with the terms and conditions of the Purchase Agreement and the applicable rules and regulations of the SEC. Each of the foregoing conditions is independent of any of the other foregoing conditions; the exclusion of any event from a particular condition does not mean that such event may not be included in another condition. Neither Purchaser nor Stryker may assert that any of the foregoing conditions have not been satisfied if the circumstances giving rise to such condition having not been satisfied resulted from the action or inaction of Purchaser or Stryker. If Purchaser waives a material condition of the Offer, Purchaser will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c), and 14e-1 under the Exchange Act.

With respect to the Minimum Condition, in order to comply with U.S. tender offer rules, if Purchaser waives (in whole or in part with the written consent of Wright) the Minimum Condition, or the threshold contemplated by the Minimum Condition changes (to the extent contemplated under the Purchase Agreement and described in the definition of “Minimum Condition”), prior to the expiration of the Offer (including during any extension of the Expiration Time), then at least five business days prior to the Expiration Time (as it may be extended pursuant to the terms of the Purchase Agreement and as described in the Offer to Purchase), Purchaser will announce such waiver or change of the Minimum Condition and amend the Schedule TO and the Offer to Purchase to reflect such waiver or change, including, if applicable, the effect of any change to the ownership percentage that Purchaser and Stryker may own after the offer. Such an announcement of any waiver of or change in the threshold applicable under the Minimum Condition will be made by Purchaser in a press release, which will state the exact percentage threshold applicable under the Minimum Condition (in the case of change of the threshold applicable under the Minimum Condition) and will advise Wright shareholders to withdraw their tendered Shares immediately if their willingness to tender their Shares into the Offer would be affected by such waiver or change of the Minimum Condition. During the five business day period after Purchaser makes the announcement described in this paragraph, the Offer will remain open and holders of Shares who have tendered their Shares in the Offer will be entitled to withdraw their Shares. Once the Expiration Time has occurred, holders of Shares will not be entitled to withdraw their tendered Shares.

Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement

When considering the recommendation of the Wright Board that you vote to adopt each of the Extraordinary General Meeting Proposals, you should be aware that certain members of Wright management and the Wright Board may be deemed to have certain interests in the Offer and the other transactions contemplated by the Purchase Agreement that are different from or in addition to the interests of Wright shareholders generally, as more fully described below. The Wright Board was aware of these interests and considered that such interests may be different from or in addition to the interests of Wright shareholders generally, among other matters, in determining to approve the Purchase Agreement, the Offer and the other transactions contemplated by the Purchase Agreement and in recommending that the Extraordinary General Meeting Proposals be adopted by the shareholders of Wright. For the purpose of each of the Wright plans and agreements described below, the consummation of the Offer and the other transactions contemplated by the Purchase Agreement will constitute a “change in control,” “change of control” or term of similar meaning with respect to Wright.

Insurance and Indemnification of Directors and Executive Officers

For a period of six years after the Offer Closing, Wright will, and Stryker will cause Wright to, maintain in effect the exculpation, indemnification and advancement of expenses equivalent to the provisions of Wright’s organizational documents as in effect immediately prior to the Offer Closing solely with respect to acts or omissions occurring prior to the Offer Closing and will not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any present (as of the Offer Closing) or former director or officer of Wright.

 

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In addition, Stryker and Purchaser will, jointly and severally, from and after the Offer Closing, indemnify and hold harmless Wright, its subsidiaries and each present (as of the Offer Closing) or former director or officer of Wright against any liability for or on account of tax in connection with a Post-Offer Reorganization, including all obligations to pay a judgment, settlement, or penalty and reasonable expenses incurred in connection with any action in relation thereto, provided that, any such indemnity will be limited to taxes incurred in such person’s capacity as a director or officer of Wright and not as a holder of Shares or other equity of Wright.

Wright may purchase prior to the Offer Closing, and if Wright does not purchase prior to the Offer Closing, Stryker will use reasonable best efforts to cause Wright to purchase at or after the Offer Closing, a tail policy under the current directors’ and officers’ liability insurance policies maintained at such time by Wright in respect of acts or omissions occurring at or prior to the Offer Closing, which tail policy (a) will be effective for a period from the Offer Closing through and including the date six years after the Offer Closing with respect to claims arising from facts or events that existed or occurred prior to or at the Offer Closing and (b) will contain coverage that is at least as protective to such directors and officers as the coverage provided by such existing policies, provided, that, the premium for such tail policy may not be (and Stryker will not be required to cause Wright to expend) in excess of 300% of the last annual premium paid prior to the Offer Closing. Stryker will cause any such policy to be maintained in full force and effect for their full term, and cause all obligations thereunder to be honored by Wright.

Treatment of Stock Options

The Purchase Agreement provides that each Wright Stock Option (whether held by directors, executive officers or other employees) that is outstanding and unvested immediately prior to the Acceptance Time will vest in full at the Acceptance Time (except, if the Offer Closing does not occur prior to July 1, 2020, for Wright Stock Options granted after July 1, 2020 (“2020 Stock Options”), which will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 Stock Option that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor). All unexercised Wright Stock Options outstanding (whether held by directors, executive officers or other employees) that are vested immediately prior to the Offer Closing will be cancelled, and, in exchange for such cancelled Wright Stock Options, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the product of (i) the excess, if any, of the Offer Consideration over the per Share exercise price of the respective Wright Stock Option multiplied by (ii) the total number of Shares subject to the unexercised Wright Stock Option they hold immediately prior to the Offer Closing.

 

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The approximate value of the cash payments that each director and executive officer of Wright will be entitled to receive in exchange for the cancellation of his or her Wright Stock Options (assuming that each such director and executive officer does not otherwise exercise any outstanding and vested Wright Stock Options prior to the Offer Closing) is set forth in the table below. This information is based on the number of Wright Stock Options held by Wright’s directors and executive officers as of March 17, 2020.

 

Name of Executive Officer or
Director
   Number of
Shares Subject
to Vested
Stock Options
     Cash
Consideration for
Vested Stock
Options
     Number of
Shares Subject
to Unvested
Stock Options
     Cash
Consideration
for Unvested
Stock Options
     Total Cash
Consideration for
Vested and
Unvested Stock
Options
 

Robert J. Palmisano

     2,153,579      $ 21,575,942.63        348,748      $ 1,503,805.03      $ 23,079,747.66  

Gary D. Blackford

     76,669      $ 596,471.62        16,645      $ 65,032.85      $ 661,504.47  

J. Patrick Mackin

     4,953      $ 31,005.78        16,645      $ 65,032.85      $ 96,038.63  

John L. Miclot

     79,247      $ 636,972.00        16,645      $ 65,032.85      $ 702,004.85  

Kevin C. O’Boyle

     65,831      $ 549,470.56        16,645      $ 65,032.85      $ 614,503.41  

Amy S. Paul

     79,247      $ 636,972.00        16,645      $ 65,032.85      $ 702,004.85  

David D. Stevens

     58,629      $ 371,927.61        16,645      $ 65,032.85      $ 436,960.46  

Richard F. Wallman

     34,793      $ 215,875.68        16,645      $ 65,032.85      $ 280,908.53  

Elizabeth H. Weatherman

     26,993      $ 172,585.68        16,645      $ 65,032.85      $ 237,618.53  

Julie B. Andrews

     87,698      $ 710,519.27        24,013      $ 102,286.15      $ 812,805.42  

Jason D. Asper

     27,721      $ 81,058.84        41,375      $ 136,817.04      $ 217,875.88  

Lance A. Berry

     27,765      $ 93,640.35        93,439      $ 387,548.70      $ 481,189.05  

Peter S. Cooke

     61,972      $ 375,063.05        31,587      $ 140,508.21      $ 515,571.26  

Kevin D. Cordell

     43,148      $ 80,142.79        78,035      $ 326,267.73      $ 406,410.52  

Julie D. Dewey

     15,216      $ 45,989.03        28,729      $ 125,855.86      $ 171,844.89  

Patrick Fisher

     77,939      $ 647,194.94        28,707      $ 124,902.38      $ 772,097.32  

Timothy L. Lanier

     4,695      $ 35,085.90        30,439      $ 142,927.36      $ 178,013.26  

James A. Lightman

     6,412      $ 44,716.64        55,397      $ 233,058.46      $ 277,775.10  

Andrew C. Morton

     31,151      $ 346,087.61        53,596      $ 434,034.56      $ 780,122.17  

J. Wesley Porter

     100,022      $ 781,625.07        26,563      $ 116,414.36      $ 898,039.43  

Barry J. Regan

     22,609      $ 141,532.34        56,785      $ 280,966.75      $ 422,499.09  

Kevin C. Smith

     77,396      $ 717,726.27        25,728      $ 109,033.50      $ 826,759.77  

Jennifer S. Walker

     90,790      $ 729,638.50        25,214      $ 110,314.78      $ 839,953.28  

Steven P. Wallace

     2,287      $ 10,219.39        25,544      $ 102,283.78      $ 112,503.17  

Treatment of Restricted Stock Units

The Purchase Agreement provides that each RSU that is outstanding and unvested immediately prior to the Acceptance Time (whether held by directors, executive officers or other employees) will vest in full at the Acceptance Time (except, if the Offer Closing does not occur prior to July 1, 2020, for RSUs granted after July 1, 2020 (“2020 RSUs”), which will be subject to pro rata vesting based on the number of days elapsed between the date of grant and the Acceptance Time and any portion of any 2020 RSU that does not become so vested will terminate and be cancelled at the Acceptance Time, without consideration paid therefor). At the Offer Closing, all outstanding RSUs that are vested will be cancelled and, in exchange for such cancelled RSUs, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number of Shares deliverable under the RSUs they hold immediately prior to the Offer Closing multiplied by the Offer Consideration.

 

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The approximate value of the cash payments that each director and executive officer of Wright will receive in exchange for cancellation of his or her RSUs is set forth in the table below. This information is based on the number of RSUs held by Wright’s directors and executive officers as of March 17, 2020.

 

Name of Executive Officer or Director    Number
of RSUs
    

Cash
Consideration

for RSUs

 

Robert J. Palmisano

     147,494      $ 4,535,440.50  

Gary D. Blackford

     3,916      $ 120,417.00  

J. Patrick Mackin

     3,916      $ 120,417.00  

John L. Miclot

     3,916      $ 120,417.00  

Kevin C. O’Boyle

     3,916      $ 120,417.00  

Amy S. Paul

     3,916      $ 120,417.00  

David D. Stevens

     3,916      $ 120,417.00  

Richard F. Wallman

     5,315      $ 163,436.25  

Elizabeth H. Weatherman

     5,595      $ 172,046.25  

Julie B. Andrews

     10,096      $ 310,452.00  

Jason D. Asper

     16,579      $ 509,804.25  

Lance A. Berry

     38,353      $ 1,179,354.75  

Peter S. Cooke

     13,744      $ 422,628.00  

Kevin D. Cordell

     32,465      $ 998,298.75  

Julie D. Dewey

     12,348      $ 379,701.00  

Patrick Fisher

     12,282      $ 377,671.50  

Timothy L. Lanier

     13,936      $ 428,532.00  

James A. Lightman

     22,807      $ 701,315.25  

Andrew C. Morton

     23,432      $ 720,534.00  

J. Wesley Porter

     11,428      $ 351,411.00  

Barry J. Regan

     23,692      $ 728,529.00  

Kevin C. Smith

     10,890      $ 334,867.50  

Jennifer S. Walker

     10,826      $ 332,899.50  

Steven P. Wallace

     10,461      $ 321,675.75  

Treatment of Performance Share Units

The Purchase Agreement provides that each PSU that is outstanding and unvested immediately prior to the Acceptance Time will vest in full at the Acceptance Time, with any applicable performance conditions associated with such PSUs deemed to have been achieved at maximum performance. At the Offer Closing, PSUs will be cancelled and, in exchange for such cancelled PSUs, the holders thereof will be entitled to receive an amount in cash (without interest and less applicable withholding taxes) equal to the total number of Shares deliverable under the PSUs they hold immediately prior to the Offer Closing multiplied by the Offer Consideration.

 

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The approximate value of the cash payments that each director and executive officer of Wright will receive in exchange for cancellation of his or her PSUs is set forth in the table below. This information is based on the number of PSUs held by Wright’s directors and executive officers as of March 17, 2020.

 

Name of Executive Officer or Director    Number
of PSUs
    

Cash
Consideration

for PSUs

 

Robert J. Palmisano

     322,120      $ 9,905,190.00  

Gary D. Blackford

     0      $ 0.00  

J. Patrick Mackin

     0      $ 0.00  

John L. Miclot

     0      $ 0.00  

Kevin C. O’Boyle

     0      $ 0.00  

Amy S. Paul

     0      $ 0.00  

David D. Stevens

     0      $ 0.00  

Richard F. Wallman

     0      $ 0.00  

Elizabeth H. Weatherman

     0      $ 0.00  

Julie B. Andrews

     23,038      $ 708,418.50  

Jason D. Asper

     23,164      $ 712,293.00  

Lance A. Berry

     83,826      $ 2,577,649.50  

Peter S. Cooke

     29,872      $ 918,564.00  

Kevin D. Cordell

     70,152      $ 2,157,174.00  

Julie D. Dewey

     26,938      $ 828,343.50  

Patrick Fisher

     26,882      $ 826,621.50  

Timothy L. Lanier

     26,102      $ 802,636.50  

James A. Lightman

     49,874      $ 1,533,625.50  

Andrew C. Morton

     12,802      $ 393,661.50  

J. Wesley Porter

     24,922      $ 766,351.50  

Barry J. Regan

     14,462      $ 444,706.50  

Kevin C. Smith

     16,768      $ 515,616.00  

Jennifer S. Walker

     23,634      $ 726,745.50  

Steven P. Wallace

     7,878      $ 242,248.50  

 

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The following table sets forth the approximate amount of payments that each director and executive officer of Wright is entitled to receive in connection with the consummation of the Offer as a result of Wright equity interests held by each director and executive officer as of March 17, 2020. The table does not include any payments the executive officers may be entitled to if the executive officers’ employment is terminated in connection with the Offer. Such payments are detailed below in the section entitled “Employment and Severance Agreements.

 

Name of Executive Officer or Director    Cash Consideration
for Shares
     Cash Consideration
for Vested and
Unvested Stock
Options
     Cash Consideration
for RSUs and PSUs
     Total Cash
Consideration in
connection with
Offer and
Purchase
 

Robert J. Palmisano

   $ 21,739,358.25      $ 23,079,747.66      $ 14,440,630.50      $ 59,259,736.41  

Gary D. Blackford

   $ 2,209,879.50      $ 661,504.47      $ 120,417.00      $ 2,991,800.97  

J. Patrick Mackin

   $ 239,973.00      $ 96,038.63      $ 120,417.00      $ 456,428.63  

John L. Miclot

   $ 1,267,361.25      $ 702,004.85      $ 120,417.00      $ 2,089,783.10  

Kevin C. O’Boyle

   $ 380,992.50      $ 614,503.41      $ 120,417.00      $ 1,115,912.91  

Amy S. Paul

   $ 1,721,169.75      $ 702,004.85      $ 120,417.00      $ 2,543,591.60  

David D. Stevens

   $ 2,944,312.50      $ 436,960.46      $ 120,417.00      $ 3,501,689.96  

Richard F. Wallman

   $ 226,996.50      $ 280,908.53      $ 163,436.25      $ 671,341.28  

Elizabeth H. Weatherman

   $ 999,036.75      $ 237,618.53      $ 172,046.25      $ 1,408,701.53  

Julie B. Andrews

   $ 757,003.50      $ 812,805.42      $ 1,018,870.50      $ 2,588,679.42  

Jason D. Asper

   $ 162,913.50      $ 217,875.88      $ 1,222,097.25      $ 1,602,886.63  

Lance A. Berry

   $ 2,926,016.25      $ 481,189.05      $ 3,757,004.25      $ 7,164,209.55  

Peter S. Cooke

   $ 327,549.00      $ 515,571.26      $ 1,341,192.00      $ 2,184,312.26  

Kevin D. Cordell

   $ 1,271,451.00      $ 406,410.52      $ 3,155,472.75      $ 4,833,334.27  

Julie D. Dewey

   $ 436,957.50      $ 171,844.89      $ 1,208,044.50      $ 1,816,846.89  

Patrick Fisher

   $ 720,933.75      $ 772,097.32      $ 1,204,293.00      $ 2,697,324.07  

Timothy L. Lanier

   $ 351,534.00      $ 178,013.26      $ 1,231,168.50      $ 1,760,715.76  

James A. Lightman

   $ 1,192,116.00      $ 277,775.10      $ 2,234,940.75      $ 3,704,831.85  

Andrew C. Morton

   $ 107,717.25      $ 780,122.17      $ 1,114,195.50      $ 2,002,034.92  

J. Wesley Porter

   $ 555,775.50      $ 898,039.43      $ 1,117,762.50      $ 2,571,577.43  

Barry J. Regan

   $ 27,859.50      $ 422,499.09      $ 1,173,235.50      $ 1,623,594.09  

Kevin C. Smith

   $ 214,635.00      $ 826,759.77      $ 850,483.50      $ 1,891,878.27  

Jennifer S. Walker

   $ 692,643.75      $ 839,953.28      $ 1,059,645.00      $ 2,592,242.03  

Steven P. Wallace

   $ 109,285.50      $ 112,503.17      $ 563,924.25      $ 785,712.92  

In the event the Offer Closing has not occurred prior to July 1, 2020, Wright may issue equity awards in the ordinary course of business consistent with past practices to employees who have historically received equity grants, with any such awards that are so granted having the same terms and being granted at the same time as equity awards were granted by Wright in July 2019. No such award to an individual shall have a grant date value greater than the grant made to such individual by Wright in July 2019 and no such awards may be PSUs or otherwise subject to performance-based vesting conditions. A portion of such awards will vest at Closing on a pro rata basis based on the number of days of the vesting period that occur between the grant date and Acceptance Time and the holder thereof will be entitled to payment for such vested awards in a manner consistent with that described for other awards above, provided that any portion of an award that does not become so vested will terminate and be cancelled without consideration.

Treatment of Wright’s ESPP

The Wright ESPP operated in accordance with its terms and past practice through December 31, 2019, which was the last day of the offering period that was in effect as of the date of the Purchase Agreement. Wright has suspended the commencement of any future offering periods under the Wright ESPP and, unless and until the

 

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Purchase Agreement is terminated, no subsequent offering period will commence, and Wright will terminate the Wright ESPP as of the Offer Closing.

Employment and Severance Agreements

Employment Agreement with Mr. Palmisano

Effective October 1, 2015, a subsidiary of Wright entered into an employment agreement with Robert J. Palmisano, Wright’s President and Chief Executive Officer, which provides that in the event of a termination of his employment, the post-employment pay and benefits, if any, to be received by him will vary according to the basis for his termination.

In the event of a termination of Mr. Palmisano’s employment by Wright other than for cause, death or disability or upon Mr. Palmisano’s resignation for good reason (an “Involuntary Termination”), other than as described in the next paragraph, Wright will be required to provide him, in addition to any accrued obligations, and subject to his execution of a release of claims: (i) a lump sum payment equal to two and one-half times the sum of: (a) his then current annual base salary, plus (b) his then current annual target incentive bonus; (ii) payment or reimbursement for the cost of COBRA continuation coverage for up to 12 months; (iii) outplacement assistance for a period of 12 months, subject to earlier termination if Mr. Palmisano accepts employment with another employer; (iv) financial planning services for a period of 12 months; and (v) an annual physical examination within 12 months of termination.

In the event of an Involuntary Termination of his employment in anticipation of or within the 24-month period following a “change in control,” Wright will be required to provide him, in addition to any accrued obligations, and subject to his execution of a release of claims: (i) a lump sum payment equal to three times the sum of: (a) his then current annual base salary, plus (b) his then current annual target incentive bonus; (ii) his annual target incentive bonus for the fiscal year in which his termination occurs; (iii) payment or reimbursement for the cost of COBRA continuation coverage for up to 12 months; (iv) outplacement assistance for a period of 12 months, subject to earlier termination if Mr. Palmisano accepts employment with another employer; (v) financial planning services for a period of 12 months; and (vi) an annual physical examination within 12 months of termination.

Upon termination for any reason other than for cause, disability, or death, Mr. Palmisano must enter into a release of claims within 30 days after the date of termination before any post-employment payments or benefits of any kind will be made to him under the employment agreement, other than accrued obligations. If he breaches the terms of his confidentiality, non-competition, non-solicitation or intellectual property rights agreement, then Wright’s obligations to make payments or provide benefits will cease immediately and permanently, and he will be required to repay an amount equal to 30% of the post-employment payments and benefits previously provided to him under the employment agreement, with interest. The agreement also provides that if any severance payments or other payments or benefits deemed made in connection with a change in control are subject to the “golden parachute” excise tax under Section 4999 of the Code, the payments will be reduced to one dollar less than the amount that would subject him to the excise tax if the reduction results in him receiving a greater amount on a net-after tax basis than would be received if he received the payments and benefits and paid the excise tax.

Severance Agreements with Other Executive Officers

A subsidiary of Wright has entered into separation pay agreements with each of the following executive officers (in addition to Mr. Palmisano): Julie Andrews, Jason Asper, Lance Berry, Peter Cooke, Kevin Cordell, Julie Dewey, Patrick Fisher, Tim Lanier, James Lightman, Andrew Morton, J. Wesley Porter, Barry Regan, Kevin Smith, Jennifer Walker and Steven Wallace. Under the terms of the separation pay agreements, except with respect to Mr. Cooke, in the event of a termination of the executive’s employment by Wright other than for

 

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cause, death or disability or upon the executive’s resignation for good reason, other than described in the next paragraph, in addition to any accrued obligations, and subject to the executive’s execution of a release of claims, Wright will be obligated to pay to the executive an amount equal to the sum of (i) the executive’s then current annual base salary, plus (ii) the executive’s then current target annual bonus. Half of the of the total severance amount will be payable at or within a reasonable time after the date of termination of the executive’s employment and half paid in six equal monthly installments starting six months after the date of termination of the executive’s employment, with the final installment of all remaining amounts to be paid on or before March 15th of the calendar year following the year in which the date of termination occurs.

In the event of a termination of the executive’s employment by Wright other than for cause, death or disability or upon the executive’s resignation for good reason within 12 months following a change in control or at the request of the acquirer prior to a change in control, in lieu of the severance above, except with respect to Mr. Cooke, in addition to any accrued obligations, and subject to the executive’s execution of a release of claims, Wright will be obligated to pay an executive an amount equal to two times the sum of (i) the executive’s then current annual base salary, plus (ii) the executive’s then current annual target bonus. Half of the total severance amount will be payable at or within a reasonable time after the date of termination and the remaining half will be payable in installments beginning six months after the date of termination of the executive’s employment, with the final installment of all remaining amounts to be paid on or before March 15th of the calendar year following the year in which the date of termination occurs.

In addition to a severance payment, if applicable, each executive also will be entitled to receive the following benefits in the event of the termination of the executive’s employment by Wright other than for cause, death or disability or upon the executive’s resignation for good reason, (i) a pro rata portion of the executive’s target annual cash incentive compensation award for the fiscal year that includes the termination date, less any payments thereof already made during such fiscal year; (ii) payment or reimbursement for the cost of COBRA continuation coverage for up to 18 months; (iii) outplacement assistance for a period of two years, subject to earlier termination if the executive accepts employment with another employer; (iv) financial planning services for a period of up to two years; (v) payment to continue insurance coverage equal to up to twice the executive’s annual supplemental insurance premium benefit provided to him or her prior to the date of termination; (vi) an annual physical examination within 12 months of termination; and (vii) reasonable attorneys’ fees and expenses if any such fees or expenses are incurred to recover benefits rightfully owed under the separation pay agreement.

Upon termination for any reason other than cause, disability, or death, the executive must enter into a release of claims within 30 days after the date of termination before any payments will be made to the executive under the separation pay agreement, other than accrued obligations. If the executive breaches the terms of a confidentiality, non-competition, non-solicitation, and intellectual property rights agreement with Wright or the release, then Wright’s obligations to make payments or provide benefits will cease immediately and permanently, and the executive will be required to repay to Wright an amount equal to 90% of the payments and benefits previously provided to the executive under the separation pay agreement, with interest. The separation pay agreement provides that if any severance payments or other payments or benefits deemed made in connection with a future change in control are subject to the “golden parachute” excise tax under Code Section 4999, the payments will be reduced to one dollar less than the amount that would subject the executive to the excise tax if the reduction results in the executive receiving a greater amount on a net-after tax basis than would be received if the executive received the payments and benefits and paid the excise tax.

In addition, under the Purchase Agreement, Wright has established a retention bonus pool in an aggregate amount of up to $8.5 million, from which awards may be allocated among the employees of Wright. Employees at a level of vice president or above shall not be eligible to receive such awards without Stryker’s consent (which shall not be unreasonably withheld, conditioned or delayed). Employees at a level below vice president shall be eligible for awards in consultation with Stryker, and Wright and Stryker shall agree on the terms of such awards, including the timing of payments, a cap on individual award amounts, and employee positions that may be allocated a retention bonus from such retention bonus pool.

 

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Rule 14d-10(d) Matters

The Compensation Committee of the Wright Board will adopt resolutions to approve each agreement, arrangement or understanding that has been or will be entered into after January 1, 2019 and prior to the Acceptance Time by Wright or any of its subsidiaries with any of its officers or directors pursuant to which compensation, severance or other benefits is or becomes payable to such officer or director as an employment compensation, severance or other employee benefit arrangement in accordance with Rule 14d-10(d)(1) under the Exchange Act.

Employment Agreements Following the Offer

As of the date of this proxy statement, Stryker and Purchaser have informed Wright that none of Wright’s current executive officers have entered into any agreement, arrangement or understanding with Stryker, Purchaser or their affiliates regarding employment with Wright following the Offer Closing. Although it is possible that Stryker may enter into employment or consultancy, compensation, severance or other employee or consultant benefits arrangements with Wright’s executive officers and certain other key employees, as of the date of this proxy statement, no discussions have occurred between Wright’s executive officers and representatives of Stryker, Purchaser or their affiliates regarding any such arrangements, and there can be no assurance that any parties will reach any such agreement.

Director Arrangements Following the Offer

Stryker shall, and shall cause Wright to, continue providing the directors of Wright as of the Offer Closing with services related to the administrative process of filing taxes in the Netherlands, provided that no payment must be made on behalf of the directors, other than necessary withholding payments.

Effect of the Purchase Agreement on Employee Benefits

The Purchase Agreement provides that for the period from the Offer Closing through the earlier of (a) the one year anniversary of the Offer Closing and (b) the date on which the employment of a Current Employee terminates, Stryker will cause Wright and its subsidiaries to provide each Current Employee with (i) base compensation and a target annual cash incentive compensation or bonus opportunity (subject to applicable adjustments to performance goals following the Offer Closing) at least as favorable as that provided to the Current Employee immediately prior to Offer Closing, (ii) benefits that are at least as favorable in the aggregate to the benefits (excluding equity or equity-related awards and defined benefit pension benefits) maintained for and provided to the Current Employee immediately prior to the Offer Closing and (iii) severance benefits that are at least as favorable as the severance benefits (excluding any equity or equity-related severance benefit terms) provided to the Current Employee by Wright immediately prior to the Offer Closing; and in no event will the compensation to be paid or benefits to be provided pursuant to clauses (i)—(iii) be less than the amount required to be paid or benefits provided to such Current Employee under any severance, employment or similar agreement.

Prior to the Acceptance Time and provided that such Current Employee is employed at the time of such payments, Wright may pay to each Current Employee the following cash bonuses: (i) 2019 cash bonuses assuming the achievement of applicable performance metrics at the higher of target or actual performance, (ii) if the Acceptance Time occurs in 2020, Wright may pay each Current Employee a 2020 cash bonus assuming the achievement of applicable performance metrics at target, with such amount pro rated for the period of the 2020 calendar year that occurs prior to the Acceptance Time, and (iii) if the Acceptance Time occurs in 2021, Wright may pay each Current Employee a cash bonus assuming (a) the achievement of applicable performance metrics at the higher of target or actual performance in 2020 and (b) the achievement of applicable performance metrics at target in 2021, with such amount pro rated for the period of the 2021 calendar year that occurs prior to the Acceptance Time.

 

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Stryker will, and will cause Wright and each of its other subsidiaries to, cause service rendered by Current Employees to Wright and its subsidiaries prior to the Offer Closing to be taken into account for purposes of eligibility, vesting, and levels of benefits (including vacation and severance, but excluding, for the avoidance of doubt, benefit accrual under any defined benefit pension plan) and as required by law under all employee benefit plans of Stryker, Wright and its other subsidiaries to the same extent as such service was taken into account under the corresponding Wright employee benefit plans immediately prior to the Offer Closing for those purposes, except to the extent that such application would result in a duplication of benefits with respect to the same period of service. Current Employees will not be subject to any eligibility requirements, waiting periods, actively-at-work requirements or pre-existing condition limitations under any employee benefit plan of Stryker, Wright or its other subsidiaries for any condition for which they would have been entitled to coverage under the corresponding Wright employee benefit plan in which they participated prior to the Offer Closing. Stryker has agreed, and has agreed to cause Wright and its other subsidiaries, to use commercially reasonable efforts to provide such Current Employees credit under such employee benefit plans for any eligible expenses incurred by them and their covered dependents under a Wright employee benefit plan during the portion of the year prior to the Offer Closing for purposes of satisfying all co-payment, co-insurance, deductibles, maximum out-of-pocket requirements, and other out-of-pocket expenses applicable to them and their covered dependents in respect of the plan year in which the Offer Closing occurs, subject to Stryker’s receipt of, using reasonable best efforts to obtain, all necessary information from either Wright or the Current Employee.

If directed in writing by Stryker at least 15 business days prior to the Acceptance Time, Wright will terminate any Wright 401(k) plan. Wright must provide evidence of such termination pursuant to resolutions of the Wright Board effective no later than one day prior to the Offer Closing.

Nothing in the Purchase Agreement prevents Stryker or Wright from amending or terminating any employee benefit plan in accordance with its terms, requires the Stryker or Wright to retain any employee for any period of time, or constitutes the establishment or adoption of, or amendment to, any benefit plan. No employee or other service provider has any third party beneficiary rights under the Purchase Agreement.

Transaction-Related Compensation

The following table sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for Wright’s named executive officers (“NEOs”) that is based on or otherwise relates to the Offer, assuming that the Offer was consummated on December 29, 2019 and that the NEO’s employment was terminated by Wright without cause or the NEO resigned for good reason (as such terms are defined in the NEO’s employment or separation pay agreement, as applicable) on the same day. The calculations in the table below include amounts the NEOs would receive as payment for cancellation of unvested RSUs, PSUs and Wright Stock Options. The calculation in this table below does not include amounts under contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation in favor of executive officers and that are available generally to all of Wright’s salaried employees.

 

Name

   Cash ($)(1)      Equity($)(2)      Perquisites/benefits
($)(3)
     Total ($)  

Robert J. Palmisano

     7,476,409        16,106,992.38        60,191        23,643,592.38  

Lance A. Berry

     2,188,750        4,181,950.61        111,100        6,481,800.61  

Kevin D. Cordell

     2,111,500        3,516,002.07        112,414        5,739,916.07  

James A. Lightman

     1,645,000        2,490,357.53        110,719        4,246,076.53  

Barry J. Regan

     1,645,000        1,469,082.27        109,436        3,223,518.27  

 

(1)

The amounts listed in this column represent the amounts payable to the executive officer pursuant to his employment or severance agreement, as applicable, as described below in the section captioned “Executive

 

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  Compensation” beginning on page 156. The cash payments payable pursuant to these agreements are double-trigger benefits in that they will be paid only if the executive officer experiences a termination of employment without cause or resigns for good reason in connection with or within 12 months following the Closing and only if the executive executes a release of claims, provided that, for Mr. Palmisano, the relevant time period is within 24 months following the Closing. These amounts include, for Mr. Palmisano, three times the sum of his current annual base salary plus annual target incentive bonus for the fiscal year in which his termination occurs, and his annual target incentive bonus for the year of termination, and in the case of the other executives, two times the sum of the executive’s annual base salary plus annual target incentive bonus, and pro rata target bonus for the fiscal year of termination, less any payments thereof already made during such fiscal year. Such amounts are also subject to a clawback of 90% (30% in the case of Mr. Palmisano) of the payments and benefits previously paid (together with interest at the lesser of 10% or the maximum non-usurious rate permitted by law) if the executive breaches the terms of their confidentiality, non-competition, non-solicitation, and intellectual property rights agreement with Wright or the release. Mr. Palmisano’s payments are payable as a lump sum on the 60th day following his termination date, and with respect to the other executives, half of the of the total severance amount will be payable at or within a reasonable time after the date of termination of the executive’s employment and half paid in six equal monthly installments starting six months after the date of termination of the executive’s employment, with the final installment of all remaining amounts to be paid on or before March 15th of the calendar year following the year in which the date of termination occurs. The listed amounts are calculated based on an assumed employment termination date of December 29, 2019.
(2)

The amounts listed in this column include the aggregate dollar value of the unvested Wright Stock Options, PSUs and RSUs held by the executives as of December 29, 2019, all of which will vest in full immediately prior to the Acceptance Time and be cancelled at the Acceptance Time, as described above in the section captioned “The Offer and the Other Transactions Contemplated by the Purchase Agreement—Interests of the Directors and Executive Officers of Wright in the Offer and the Transactions Contemplated by the Purchase Agreement” beginning on page 100. These payments are single-trigger benefits in that they are not conditioned upon the executive’s termination or resignation. The value of the unvested Stock Options is the difference between the Offer Price Consideration ($30.75 per Share) and the applicable exercise price of the Wright Stock Option, multiplied by the number of unvested Wright Stock Options. The value of unvested RSUs is the Offer Consideration ($30.75 per Share) multiplied by the number of unvested RSUs. The value of unvested PSUs is the Offer Consideration ($30.75 per Share) multiplied by the number of unvested PSUs (assuming achievement at maximum performance levels). For more information, see the table below.

 

Name    Value of
Unvested Stock Options ($)
     Value of
Unvested RSUs
($)
     Value of Unvested
PSUs at Maximum
Performance ($)
 

Robert J. Palmisano

     1,666,361.88        4,535,440.50        9,905,190.00  

Lance A. Berry

     424,946.36        1,179,354.75        2,577,649.50  

Kevin D. Cordell

     360,529.32        998,298.75        2,157,174.00  

James A. Lightman

     255,416.78        701,315.25        1,533,625.50  

Barry J. Regan

     295,846.77        728,529.00        444,706.50  

 

(3)

The amounts listed in this column represent the amounts payable to the executive pursuant to his employment or severance pay agreement, as applicable, as described below in the section captioned “Executive Compensation” beginning on page 156. The cash payments payable pursuant to these agreements are double-trigger benefits in that they will be paid only if the executive experiences a termination of employment without “Cause” or “Good Reason” (as such terms are defined in the NEO’s employment or separation pay agreement, as applicable) in connection with or within 12 months following the Closing. These amounts represent, for Mr. Palmisano, up to 12 months of continued Company-paid COBRA continuation coverage, 12 months of outplacement assistance and financial planning services, and an annual physical examination, and for all other executives, up to 18 months of continued Company-paid COBRA continuation coverage, two years of outplacement assistance and financial planning services, continued insurance coverage equal to twice the executive’s annual supplemental insurance premium benefit

 

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  provided to him or her prior to termination and an annual physical examination. The amounts were determined based on assumptions used for financial reporting purposes under generally accepted accounting principles as applied in the United States (“GAAP”).

Acceptance Time of the Offer and the Transactions

The Purchase Agreement provides, among other things, that, subject to the terms and conditions set forth therein, Purchaser will (and Stryker will cause Purchaser to), (a) at or as promptly as practicable following the Expiration Time (but in any event within two business days thereafter) accept for payment and (b) at or as promptly as practicable following the Acceptance Time (but in any event within two business days (calculated as set forth in Rule 14d-1(g)(3) promulgated under the Exchange Act) thereafter), pay for all Shares validly tendered and not properly withdrawn pursuant to the Offer as of the Acceptance Time. It is expected that following the Offer Closing, the listing of the Shares on Nasdaq will be terminated, Wright will no longer be a publicly traded company, and the Shares will be deregistered under the Exchange Act, resulting in the cessation of Wright’s reporting obligations with respect to the Shares with the SEC.

Litigation Related to the Transactions

On January 15, 2020, John Thompson, a purported shareholder of Wright, filed a putative class action lawsuit against Wright, members of the Wright Board, Purchaser and Stryker in the United States District Court for the District of Delaware, captioned Thompson v. Wright Medical Group N.V., et al., Case No. 1:20-cv-00061 (the “Thompson Complaint”). The Thompson Complaint alleges that Wright and the members of the Wright Board violated federal securities laws and regulations by failing to disclose material information in the Schedule 14D-9 in connection with the transactions contemplated by the Purchase Agreement, which they allege rendered the Schedule 14D-9 false and misleading. In addition, the Thompson Complaint alleges that members of the Wright Board and Stryker acted as controlling persons of Wright within the meaning and in violation of Section 20(a) of the Exchange Act to influence and control the dissemination of the allegedly defective Schedule 14D-9. The Thompson Complaint seeks, among other things, an order enjoining consummation of the transactions contemplated by the Purchase Agreement; rescission of such transactions if they have already been consummated and rescissory damages; an order directing the Wright Board to file a Schedule 14D-9 that does not contain any untrue statements of material fact and that states all material facts required in it or necessary to make the statements contained therein not misleading; a declaration that the defendants violated certain federal securities laws and regulations; and an award of plaintiff’s costs, including reasonable allowance for attorneys’ fees and experts’ fees.

On January 31, 2020, William Grubb, a purported shareholder of Wright, filed a putative class action lawsuit against Wright and members of the Wright Board in the United States District Court for the Eastern District of New York, captioned Grubb v. Wright Medical Group N.V., et al., Case No. 1:20-cv-00553 (the “Grubb Complaint”). The Grubb Complaint makes substantially similar complaints against Wright and the members of the Wright Board as the Thompson Complaint. The Grubb Complaint seeks, among other things, an order enjoining consummation of the transactions contemplated by the Purchase Agreement; rescission of such transactions if they have already been consummated and rescissory damages; a declaration that the defendants violated certain federal securities laws and regulations; and an award of plaintiff’s costs, including counsel fees and expenses and expert fees.

Certain Material Tax Consequences

Certain U.S. Federal Income Tax Consequences

The following is a summary of certain U.S. federal income tax consequences of the Offer and the Post-Offer Reorganization to U.S. Holders (as defined below) of Wright whose Shares are tendered and accepted for

 

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payment pursuant to the Offer or whose Shares are not tendered but who receive cash in the Post-Offer Reorganization. The summary is based on current provisions of the Code, existing, proposed and temporary regulations thereunder and administrative and judicial interpretations thereof, all of which are subject to change, possibly with retroactive effect. Any such changes could affect the accuracy of the statements and conclusions set forth in this discussion. Purchaser has not sought, and does not currently intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

The summary applies only to U.S. Holders (as defined below) who hold their Shares as capital assets within the meaning of Section 1221 of the Code. The summary is not a complete description of all of the tax consequences of the Offer or the Post-Offer Reorganization and in particular, does not address many of the tax considerations that may be relevant to a holder of Shares in light of such holder’s particular circumstances or that may be applicable to holders of Shares that may be subject to special tax rules, including, without limitation: small business investment companies; banks, certain financial institutions or insurance companies; real estate investment trusts, regulated investment companies or grantor trusts; dealers or traders in securities, commodities or currencies; persons that mark their securities to market; cooperatives; tax-exempt entities; retirement plans; certain former citizens or long-term residents of the United States; persons that received Shares as compensation for the performance of services; persons that hold Shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes; partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass-through entities, or holders that hold Shares through such an entity; S-corporations; persons whose functional currency is not the U.S. dollar; persons that own directly, indirectly, or through attribution 10% or more of the voting power or value of the outstanding Shares; persons holding Shares in connection with a trade or business conducted outside the United States; controlled foreign corporations within the meaning of Section 957 of the Code; or passive foreign investment companies within the meaning of Section 1297 of the Code (each, a “PFIC”). Moreover, this summary does not address the U.S. federal estate, gift, unearned income Medicare contribution, alternative minimum tax and any other applicable non-income tax laws, or any applicable state, local or non-U.S. tax laws.

For purposes of this summary, the term “U.S. Holder” means a beneficial owner of Shares that, for U.S. federal income tax purposes, is (a) an individual who is a citizen or resident of the United States; (b) a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, or of any state or the District of Columbia; (c) an estate, the income of which is subject to U.S. federal income tax regardless of its source; or (d) a trust, if (i) a court within the United States is able to exercise primary supervision over the trust’s administration and one or more U.S. persons, within the meaning of Section 7701(a)(30) of the Code, have authority to control all of the trust’s substantial decisions or (ii) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. This discussion does not address the tax consequences to persons who are not U.S. Holders.

If a partnership, or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes, holds Shares, the tax treatment of a person treated as a partner in such partnership generally will depend upon the status of the partner and the partnership’s activities. Accordingly, partnerships or other entities treated as partnerships for U.S. federal income tax purposes that hold Shares, and persons treated as partners in such entities, are urged to consult their tax advisors regarding the specific U.S. federal income tax consequences to them of the Offer and the Post-Offer Reorganization.

WE URGE YOU TO CONSULT YOUR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE OFFER AND THE POST-OFFER REORGANIZATION, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN INCOME, AND OTHER TAX LAWS IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.

 

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The Receipt of Cash in Exchange for Shares Pursuant to the Offer

The exchange of Shares by U.S. Holders for cash pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. Holder who exchanges Shares for cash pursuant to the Offer will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before the deduction, if any, of any withholding tax) in exchange for Shares pursuant to the Offer and the U.S. Holder’s adjusted tax basis in such Shares. Any such gain or loss will be long-term capital gain or loss if a U.S. Holder’s holding period for such Shares is more than one year. Long-term capital gain recognized by certain non-corporate U.S. Holders, including individuals, is generally subject to U.S. federal income tax at preferential rates. The deductibility of a capital loss recognized pursuant to the Offer is subject to certain limitations. If a U.S. Holder acquired different blocks of Shares at different times or different prices, such U.S. Holder must determine its adjusted tax basis and holding period separately with respect to each block of Shares.

The foregoing assumes that Wright is not currently, and has not been a PFIC, for U.S. federal income tax purposes. In general, the test for determining whether Wright is or has been a PFIC is applied annually and is based upon the composition of Wright’s and certain of its affiliates’ income and assets for such taxable year. If Wright were a PFIC in the current taxable year or in any prior taxable year in which the tendering U.S. Holder has held the Shares, then such U.S. Holder generally would be subject to adverse U.S. federal income tax consequences with respect to gain recognized on any sale or exchange of such Shares, including an exchange of such Shares pursuant to the Offer, unless such U.S. Holder has in effect certain elections, such as the mark-to-market election. U.S. Holders should consult their own tax advisors concerning whether Wright is or has been a PFIC for any given taxable year during which such U.S. Holder has owned Shares and the tax consequences of tendering Shares pursuant to the Offer.

Receipt of Cash in Exchange for Shares Pursuant to the Post-Offer Reorganization

The U.S. federal income tax consequences of the Post-Offer Reorganization will depend on the exact manner in which it is carried out. However, if a U.S. Holder receives cash for Shares in the Compulsory Acquisition, the Second Step Distribution or the Mergers, the U.S. federal income tax consequences to such U.S. Holder would generally be the same as described above.

Foreign Tax Credit

A U.S. Holder may be subject to Dutch dividend withholding tax (dividendbelasting), as further described in the section of this proxy statement captioned “Certain Material Tax ConsequencesOther Taxes and DutiesCertain Other Dutch Tax Aspects Specific to the Post-Offer Reorganization.” Gain or loss, if any, recognized by a U.S. Holder as a result of the cash received for Shares pursuant to the Offer or the Post-Offer Reorganization will generally be treated as U.S. source gain or loss, as the case may be. Consequently, you may not be able to use the foreign tax credit arising from the Dutch dividend withholding tax (dividendbelasting) on the exchange of the Shares unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived from foreign sources. Alternatively, you may take a deduction for any Dutch dividend withholding tax (dividendbelasting) imposed if you do not elect to claim a foreign tax credit for any foreign taxes paid during the taxable year. The calculation of deductions and U.S. foreign tax credits involves the application of complex rules and limitations may apply. Each U.S. Holder should consult its own tax advisor concerning the tax consequences of exchanging Shares pursuant to the Post-Offer Reorganization.

Information Reporting and Backup Withholding

A U.S. Holder who exchanges Shares pursuant to the Offer or the Post-Offer Reorganization is subject to information reporting and may be subject to backup withholding unless certain information is provided to the Depositary or an exemption applies.

 

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Certain Dutch Tax Consequences

The following is a summary of certain material Dutch tax consequences of the Offer and the Post-Offer Reorganization for the shareholders of Wright whose Shares are tendered and accepted for payment pursuant to the Offer or whose Shares are not tendered but who receive cash in the Post-Offer Reorganization. It does not address tax consequences applicable to holders of Options, RSUs or PSUs. The summary is for general information only and does not consider all possible tax considerations or consequences that may be relevant to all categories of investors, some of which may be subject to special treatment under applicable law (such as trusts or other similar arrangements). Shareholders are expressly urged to consult with their tax advisors with regard to the tax consequences of tendering their Shares pursuant to the Offer and the Post-Offer Reorganization.

Please note that this summary does not describe the tax considerations for:

 

  (a)

Wright shareholders, if such shareholders, or in the case of individuals, his/her partner, certain other relatives or certain persons sharing his/her household, alone or together, directly or indirectly have a substantial interest (aanmerkelijk belang) or deemed substantial interest (fictief aanmerkelijk belang) in Wright under the Dutch Personal Income Tax Act 2001 (Wet inkomstenbelasting 2001) or the Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969). In general, a substantial interest in Wright is considered present if the shareholder, or in the case of individuals, his/her partner, certain other relatives or certain persons sharing his/her household, alone or together, directly or indirectly holds shares representing 5% or more of the total issued and outstanding capital (or the issued and outstanding capital of any class of shares) of Wright and/or is entitled to 5% of Wright’s annual profit, and/or 5% of the proceeds upon liquidation of Wright. A deemed substantial interest arises if a substantial interest (or part thereof) has been disposed of, or is deemed to have been disposed of, on a non-recognition basis.

 

  (b)

Wright shareholders that are corporate legal entities that derive benefits from the Shares that are exempt under the participation exemption regime (deelnemingsvrijstelling) or that qualify for participation credit (deelnemingsverrekening) as laid down in the Dutch Corporate Income Tax Act 1969 or would have been exempt under the participation exemption regime if such shareholder were a taxpayer in the Netherlands. In general, an interest of 5% or more in the nominal paid-up share capital of Wright should either qualify for the participation exemption regime or the participation credit regime. A shareholder may also have a qualifying participation if such Wright shareholder does not have a 5% interest but a related entity (a statutorily defined term) does, or if Wright is a related entity (a statutorily defined term) of the Wright shareholder.

 

  (c)

Wright shareholders who are individuals and for whom the Shares or any benefit derived from the Shares are attributable to a membership of a management board or a supervisory board, an employment relationship or a deemed employment relationship, the income from which is taxable in the Netherlands.

 

  (d)

Pension funds, investment institutions (fiscale beleggingsinstellingen), exempt investment institutions (vrijgestelde beleggingsinstellingen) and other entities that are not subject to or are exempt (in full or in part) from corporate income tax in the Netherlands or any other state.

 

  (e)

Wright shareholders who or that are not considered the beneficial owner (uiteindelijk gerechtigde) of these Shares or the benefits derived from or realized in respect of these Shares.

This summary only addresses the Dutch national tax legislation and published regulations, as in effect on the date of this Offer to Purchase and as interpreted in published case law until this date, without prejudice to any amendment introduced at a later date and implemented with or without retroactive effect.

Where this summary refers to the Netherlands, such reference is restricted to the part of the Kingdom of the Netherlands that is situated in Europe and the legislation applicable in that part of the Kingdom of the Netherlands.

 

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Certain Dutch Tax Consequences of the Offer and the Post-Offer Reorganization

Dutch dividend withholding tax

No Dutch dividend withholding tax (dividendbelasting) is due upon a disposal of the Shares pursuant to the Offer.

Dutch Resident Individual Shareholders

An individual shareholder who is resident or deemed to be resident in the Netherlands for Dutch tax purposes will be subject to Dutch personal income tax (inkomstenbelasting) on any gains realized (i.e., the difference, if any, between the amount of cash received and the tax book value) in respect of the Shares tendered pursuant to the Offer, or as a result of the Compulsory Acquisition, the Asset Sale and Liquidation or the Mergers at progressive rates up to a maximum of 49.5% if:

 

  (a)

the Shares are attributable to an enterprise from which the individual derives a share of the profit, whether as an entrepreneur (ondernemer) or as a person who has a co-entitlement to the net worth (medegerechtigd tot het vermogen) of such enterprise, without being an entrepreneur or a shareholder as defined in the Dutch Personal Income Tax Act 2001; or

 

  (b)

such income or capital gains qualify as income from miscellaneous activities (resultaat uit overige werkzaamheden), which includes activities with respect to the Shares that exceed regular, active portfolio management (normaal, actief vermogensbeheer).

If the above mentioned conditions (a) and (b) do not apply to an individual shareholder, the Shares held by such individual shareholder will be taxed under the regime for savings and investments (inkomen uit sparen en beleggen). Irrespective of the actual income or capital gains realized in respect of the Shares tendered pursuant to the Offer (including during the Subsequent Offer Period) or pursuant to the Post-Offer Reorganization, the annual taxable benefit of the assets and liabilities of a Dutch Individual that are taxed under this regime, including the Shares, is set at a percentage of the positive balance of the fair market value of these assets, including the Shares, and the fair market value of these liabilities. For 2020, the percentage increases:

 

  (a)

from 1.8% of this positive balance up to €72,797;

 

  (b)

to 4.22% of this positive balance of €72,798 up to €1,005,572; and

 

  (c)

to a maximum of 5.33% of this positive balance of €1,005.573 or higher.

These percentages will be reassessed every year. No taxation occurs if this positive balance does not exceed a certain threshold (heffingvrij vermogen). The fair market value of assets, including the Shares, and liabilities that are taxed under this regime is measured, in general, exclusively on January 1st of every calendar year. The tax rate under the regime for savings and investments is a flat rate of 30%. The actual benefits derived (including profit distributions and capital gains) are not as such subject to Dutch personal income tax.

Dutch Resident Corporate Shareholders

A shareholder that is an entity (including an association, partnership and mutual fund, in each case

to the extent taxable as a corporate entity) and who is resident or deemed to be resident in the Netherlands for Dutch corporate income tax purposes will generally be subject to Dutch corporate income tax on any gains realized in respect of the Shares tendered pursuant to the Offer or as a result of the Compulsory Acquisition, the Asset Sale and Liquidation or the Mergers, up to a maximum rate of 25%.

Non-Dutch Resident Shareholders

A shareholder that is not a resident or deemed to be a resident of the Netherlands will not be subject to Dutch corporate income tax or personal income tax on any gains realized as a result of the tendering of Shares

 

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pursuant to the Offer, as a result of the Compulsory Acquisition, the Asset Sale and Liquidation or the Mergers, provided that:

 

  (a)

in the case of a non-Dutch resident shareholder that is not an individual, such shareholder (i) does not derive profits from an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands to which permanent establishment or permanent representative the Shares are attributable or (ii) is not, other than by way of securities, entitled to a share in the profits of an enterprise or a co-entitlement to the net worth of an enterprise, which is effectively managed in the Netherlands and to which enterprise the Shares are attributable; or

 

  (b)

in the case of a non-Dutch resident shareholder that is an individual, such shareholder (i) does not derive profits from an enterprise or an interest in an enterprise that is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Netherlands to which permanent establishment or permanent representative the Shares are attributable, (ii) does not realize income or gains with respect to the Shares that qualify as income from miscellaneous activities in the Netherlands, which include activities with respect to the Shares that exceed regular, active portfolio management or (iii) is not, other than by way of securities, entitled to a share in the profits of an enterprise that is effectively managed in the Netherlands and to which enterprise the Shares are attributable.

In the case of a non-Dutch resident shareholder that is taxable in the Netherlands, such shareholder will generally be taxed in the same way as comparable Dutch resident taxpayers, as described above.

Other Taxes and Duties

No Dutch value added tax and no Dutch registration tax, customs duty, stamp duty or any other similar documentary tax or duty will be payable by a shareholder on any payment pursuant to the Offer, the Compulsory Acquisition, the Asset Sale and Liquidation or the Mergers.

Certain Other Dutch Tax Aspects Specific to the Post-Offer Reorganization

Mergers

Stryker and Purchaser have no current intention to require the deduction and withholding of any Dutch dividend withholding tax (dividendbelasting) in respect of any amounts payable upon completion of the Mergers to any Wright shareholders who did not tender their Shares pursuant to the Offer and who do not exercise any Merger Withdrawal Right (as defined below), but such tax deduction and withholding will take place to the extent required under Dutch tax law.

In the event that a Wright shareholder exercises a Merger Withdrawal Right, then any cash compensation paid to such withdrawing Wright shareholder will be subject to Dutch dividend withholding tax (dividendbelasting) at the statutory rate of 15% to the extent that the amount of the cash compensation exceeds the average paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes (which amount may be subject to an advance tax clearance by the Dutch tax authorities on the amount of paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes) subject to any exemption, reduction or refund that may be available to such withdrawing Wright shareholder. As a result, the net amount received by such withdrawing Wright shareholder may be lower than the amount that they would have received had they tendered their Shares pursuant to the Offer (including during any Subsequent Offering Period).

Shareholders who are a resident or are deemed to be resident in the Netherlands for Dutch tax purposes can generally credit the Dutch dividend withholding tax against their Dutch income tax or Dutch corporate income tax liability and are generally entitled to a refund of the Dutch dividend withholding tax to the extent the Dutch dividend withholding tax exceeds the amount of the Dutch income tax or Dutch corporate income tax otherwise payable, provided that certain conditions are met.

 

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Asset Sale and Liquidation

If the Asset Sale and Liquidation are implemented, Dutch dividend withholding tax (dividendbelasting) will be due at the statutory rate of 15% to the extent that the amount of the Second Step Distribution exceeds the average paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes (which amount may be subject to an advance tax clearance by the Dutch tax authorities on the amount of paid-in capital on the Shares as recognized for Dutch dividend withholding tax purposes), subject to any exemption, reduction or refund that may be available to a Wright shareholder under Dutch domestic tax law, tax treaties entered into by the Netherlands or European Union law.

Shareholders who are a resident or deemed to be resident in the Netherlands for Dutch tax purposes, can generally credit the Dutch dividend withholding tax against their Dutch income tax or Dutch corporate income tax liability and are entitled to a refund of the Dutch dividend withholding tax to the extent the Dutch dividend withholding tax exceeds the amount of the Dutch personal income tax or corporate income tax otherwise payable, provided that certain conditions are met.

Compulsory Acquisition

If the Compulsory Acquisition is implemented, no Dutch dividend withholding tax (dividendbelasting) will be due upon a disposal of the Shares pursuant to the Compulsory Acquisition.

Appraisal Rights

Wright shareholders are not entitled under Dutch law or otherwise to appraisal rights with respect to the Offer. In the event that the Compulsory Acquisition is permissible under applicable law and implemented, the Dutch Court will determine in its sole discretion the price to be paid for the non-tendered Shares, which price may be greater than, equal to or less than the Offer Consideration. Such price will be increased by Dutch Statutory Interest accrued at the rate applicable in the Netherlands (currently 2% per annum). The non-tendering Wright shareholders do not have the right to commence a Compulsory Acquisition proceeding to oblige Stryker or Purchaser to buy their Shares.

In the event the Merger Resolutions are adopted at the Extraordinary General Meeting or any subsequent extraordinary general meeting, any Wright shareholder that votes against the Merger Resolutions may exercise its withdrawal right under Dutch law in connection with the First-Step Merger (the “Merger Withdrawal Right”) by filing a request for compensation in accordance with Section 2:333h of the Dutch Civil Code and the common draft terms of the cross-border merger within one month after the date of the Extraordinary General Meeting or subsequent extraordinary general meeting at which the Merger Resolutions were adopted. If the Mergers are then implemented, such compensation would be paid in cash in connection with the consummation of the First-Step Merger. The Merger Resolutions include certain amendments to Wright’s articles of association that fix the cash compensation payable to any such Wright shareholders exercising the Merger Withdrawal Right at an amount per Share equal to the Offer Consideration without interest and less applicable withholding taxes.

Financing of the Offer and the Other Transactions Contemplated by the Purchase Agreement

The Offer is not conditioned upon Purchaser obtaining financing to fund the purchase of Shares pursuant to the Offer and to fund the Post-Offer Reorganization.

Purchaser estimates that the total amount of funds required for Purchaser to purchase all outstanding Shares in the Offer and to consummate the other transactions contemplated by the Purchase Agreement, pay related transaction fees and expenses and pay or refinance certain outstanding debt of Wright, including its outstanding convertible notes, in connection with the consummation of the Offer and the other transactions contemplated by the Purchase Agreement, will be approximately $5.4 billion. Purchaser anticipates funding such cash requirements from a combination of sources, including (a) available cash and cash equivalents of Stryker and its subsidiaries, (b) proceeds from the sale of debt securities, and/or (c) bank or other debt financings.

 

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A portion of Stryker’s available cash was received on December 3, 2019 from the public offering by Stryker of (a) €850,000,000 aggregate principal amount of 0.250% Notes due 2024 (the “2024 Notes”), (b) €800,000,000 aggregate principal amount of 0.750% Notes due 2029 (the “2029 Notes”) and (c) €750,000,000 aggregate principal amount of 1.000% Notes due 2031 (the “2031 Notes” and, collectively with the 2024 Notes and 2029 Notes, the “Notes”). Stryker is required to redeem the 2024 Notes and the 2031 Notes in whole and not in part at a special mandatory redemption price equal to 101% of the aggregate principal amount of such series, plus accrued and unpaid interest, if any, to, but excluding, the special mandatory redemption date, if Stryker does not consummate the Offer on or prior to February 4, 2021, or if, at any time prior to such date, Purchase Agreement is terminated.

Stryker may redeem any series of the Notes at its option, in whole, but not in part, for cash, at any time prior to their respective maturities at a price equal to 100% of the outstanding principal amount of such Notes, plus accrued and unpaid interest to, but not including, the redemption date, if certain tax events occur that would obligate Stryker to pay additional amounts as described in the indenture governing the Notes. In addition, Stryker may redeem each of the 2024 Notes, 2029 Notes and 2031 Notes prior to their respective maturities at its option for cash, any time in whole or from time to time in part, at redemption prices that include accrued and unpaid interest and the applicable make-whole premium, as specified in the indenture governing the Notes.

The indenture governing the Notes contains covenants that limit Stryker’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of Stryker’s assets. Subject to certain limitations, in the event of the occurrence of both (a) a change of control of Stryker and (b) a downgrade of the Notes below investment grade rating by both Moody’s Investors’ Services, Inc. and Standard & Poor’s Ratings Services within a specified time period, Stryker will be required to make an offer to purchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the date of repurchase.

 

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DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth, as of March 17, 2020, certain information concerning our current directors and executive officers. No family relationships exist among any of our directors or executive officers.

 

Name

   Age     

Position

Robert J. Palmisano

     75      President and Chief Executive Officer and Executive Director

Lance A. Berry

     47      Executive Vice President, Chief Financial and Operations Officer

Kevin D. Cordell

     54      Executive Vice President, Chief Global Commercial Officer

Julie B. Andrews

     48      Senior Vice President, Global Finance

Jason D. Asper

     45      Senior Vice President, Chief Digital Officer

Julie D. Dewey

     58      Senior Vice President, Chief Communications Officer

James A. Lightman

     62      Senior Vice President, General Counsel and Secretary

Andrew C. Morton

     54      Senior Vice President and Chief Human Resources Officer

J. Wesley Porter

     50      Senior Vice President, Chief Compliance Officer

Barry J. Regan

     47      Senior Vice President, Operations

Kevin C. Smith

     59      Senior Vice President, Quality and Regulatory

Jennifer S. Walker

     52      Senior Vice President, Process Improvement

Peter S. Cooke

     54      President, Emerging Markets, Australia and Japan

Patrick Fisher

     46      President, Lower Extremities

Timothy L. Lanier

     58      President, Upper Extremities

Steven P. Wallace

     40      President, International

David D. Stevens

     66      Chairman and Non-Executive Director

Gary D. Blackford

     62      Non-Executive Director

J. Patrick Mackin

     53      Non-Executive Director

John L. Miclot

     61      Non-Executive Director

Kevin C. O’Boyle

     64      Non-Executive Director

Amy S. Paul

     68      Non-Executive Director

Richard F. Wallman

     68      Non-Executive Director

Elizabeth H. Weatherman

     60      Non-Executive Director

The following is a biographical summary of the experience of our directors and executive officers:

Robert J. Palmisano was appointed our President and Chief Executive Officer and executive director and member of the Wright Board in October 2015 in connection with the Wright/Tornier merger. Mr. Palmisano has served as President and Chief Executive Officer of Wright Medical Group, Inc. since September 2011. Prior to joining legacy Wright, Mr. Palmisano served as President and Chief Executive Officer of ev3 Inc., a global endovascular device company, from April 2008 to July 2010, when it was acquired by Covidien plc. From 2003 to 2007, Mr. Palmisano was President and Chief Executive Officer of IntraLase Corp. Before joining IntraLase, Mr. Palmisano was President and Chief Executive Officer of MacroChem Corporation from 2001 to 2003. Mr. Palmisano previously served on the board of directors of Avedro, Inc., ev3 Inc., Osteotech, Inc. and Abbott Medical Optics, Inc., all publicly held companies, and Bausch & Lomb, a privately held company. Under the terms of his employment agreement, we have agreed that Mr. Palmisano will be nominated by the Wright Board for election as executive director and a member of the Wright Board at each annual general meeting of shareholders during the term of his employment as President and Chief Executive Officer of Wright. Mr. Palmisano’s qualifications to serve on the Wright Board include his day-to-day knowledge of Wright and its business due to his position as President and Chief Executive Officer, his experience serving on other public companies’ boards of directors, and his extensive business knowledge working with other public companies in the medical device industry.

Lance A. Berry was appointed our Executive Vice President, Chief Financial and Operations Officer in January 2019. Prior to such position, he served as our Senior Vice President and Chief Financial Officer from October

 

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2015 to December 2018. He was appointed to that position in connection with the Wright/Tornier merger. Mr. Berry also serves as Senior Vice President and Chief Financial Officer of Wright Medical Group, Inc., a position he has held since 2009. He joined legacy Wright in 2002, and, until his appointment as Chief Financial Officer, served as Vice President and Corporate Controller. Prior to joining Wright, Mr. Berry served as audit manager with the Memphis, Tennessee office of Arthur Andersen LLP from 1995 to 2002.

Kevin D. Cordell was appointed our Executive Vice President, Chief Global Commercial Officer in January 2019. Prior to such position, he served as President, U.S. June 2016 to December 2018. From October 2015 to June 2016, he served as our President, Lower Extremities and Biologics. Mr. Cordell served as President, U.S. Extremities of Wright Medical Group, Inc. from September 2014 to October 2015. Prior to joining legacy Wright, Mr. Cordell served as Vice President of Sales for the GI Solutions business at Covidien plc, a global healthcare products company, from May 2012 to September 2014. While at Covidien, he served as Vice President of Sales and Global Marketing for its Peripheral Vascular business from July 2010 to May 2012. He joined Covidien in July 2010 through the acquisition of ev3 Inc., a global endovascular device company, where he served as Vice President of U.S. Sales from January 2009 to July 2010. Prior to ev3, Mr. Cordell served as Vice President, Global Sales of FoxHollow Technologies, Inc. from March 2007 until it was acquired by ev3 in October 2007. Earlier in his career, Mr. Cordell held various positions of increasing responsibility for Johnson & Johnson’s Cordis Cardiology and Centocor companies. Mr. Cordell currently serves on the University of Oklahoma Healthcare Board. Mr. Cordell previously served on the board of directors of TissueGen, Inc., a privately-held developer of biodegradable polymer technology for implantable drug delivery.

Julie B. Andrews was appointed our Senior Vice President, Global Finance in August 2019. From August 2019 to October 2015, Ms. Andrews served as Vice President of Finance, Chief Accounting Officer. Ms. Andrews served as Vice President and Chief Accounting Officer of Wright Medical Group, Inc. from May 2012 to October 2015. From February 1998 to May 2012, Ms. Andrews held numerous key financial positions with Medtronic, Inc., a global medical device company. Most recently, Ms. Andrews served as Medtronic’s Vice President, Finance for its spinal and biologics business units. Ms. Andrews has significant accounting, finance, and business skills as well as global experience, having held positions in worldwide planning and analysis in Medtronic Sofamor Danek and in Medtronic’s spinal and biologics business. Prior to joining Medtronic, Ms. Andrews worked with Thomas & Betts Corporation in Memphis, Tennessee and Thomas Havey, LLP in Chicago, Illinois.

Jason D. Asper was appointed our Senior Vice President, Chief Digital Officer in April 2019. Prior to this position, he served as Senior Vice President, Strategy, Corporate Development and Technology from February 2019 to April 2019 and Senior Vice President, Strategy and Corporate Development from August 2017 to February 2019. Prior to joining Wright, Mr. Asper served as a principal for Deloitte Consulting, LLP, a global consulting company, from September 2012 to July 2017.

Julie D. Dewey was appointed our Senior Vice President, Chief Communications Officer in October 2015 in connection with the Wright/Tornier merger. Ms. Dewey served as Senior Vice President, Chief Communications Officer of Wright Medical Group, Inc. from October 2011 to October 2015. Prior to joining legacy Wright, Ms. Dewey served as Chief Communications Officer of Epocrates, Inc., a publicly held company that sold physician platforms for clinical content, practice tools and health industry engagement, from March 2011 to October 2011. From January 2008 to July 2010, Ms. Dewey was Senior Vice President and Chief Communications Officer of ev3 Inc. Prior to ev3, Ms. Dewey held marketing and investor relations positions at Kyphon Inc. from January 2003 to November 2007 and Thoratec Corporation from January 1998 to January 2003. Ms. Dewey currently serves as a member of the board of directors for the National Investor Relations Institute, the professional association of corporate officers and investor relations consultants responsible for communication among corporate management, shareholders, securities analysts and other financial community constituents.

James A. Lightman was appointed our Senior Vice President, General Counsel and Secretary in October 2015 in connection with the Wright/Tornier merger. Mr. Lightman joined Wright Medical Group, Inc. in December 2011

 

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as Senior Vice President, General Counsel and Secretary. Prior to joining legacy Wright, Mr. Lightman served in various legal and executive positions with Bausch & Lomb Incorporated, a privately held supplier of eye health products. From February 2008 to November 2009, Mr. Lightman served as Vice President and Assistant General Counsel of Bausch & Lomb, and held the position of Vice President, Global Sales Operations until August 2011. From June 2007 to February 2008, he served as Vice President and General Counsel of Eyeonics, Inc. Prior to joining Eyeonics, Mr. Lightman served as Senior Vice President and General Counsel of IntraLase Corp. from February 2005 to April 2007.

Andrew C. Morton was appointed our Senior Vice President and Chief Human Resources Officer in March 2018. From November 2015 to March 2018, Mr. Morton served as Senior Vice President and Chief Human Resources Officer for Hanger, Inc., a provider of orthotic and prosthetic patient care services and solutions, and served as Vice President and Chief Human Resources Officer of Hanger from June 2010 to November 2015. Prior to joining Hanger, Mr. Morton served in two capacities; first as Vice President Talent and Corporate Services, and then Vice President Human Resources Supply Chain for Freescale Semiconductor, Inc., a designer and manufacturer of embedded processors, from May 2006 to June 2010. From June 1992 to April 2006, Mr. Morton worked at International Business Machines Corporation and held various global field and corporate human resource executive roles of increasing responsibility across its software, hardware and sales businesses.

J. Wesley Porter was appointed our Senior Vice President and Chief Compliance Officer in October 2015 in connection with the Wright/Tornier merger. Mr. Porter joined Wright Medical Group, Inc. in July 2014 as Vice President, Compliance and became Senior Vice President and Chief Compliance Officer in October 2014. Prior to joining legacy Wright, Mr. Porter served as Vice President, Deputy Compliance Officer of Allergan, Inc. from September 2012 to February 2014, Vice President, Ethics and Compliance of CareFusion Corp. from June 2009 to September 2012, and Senior Corporate Counsel, Compliance, HIPAA and Reimbursement of Smith & Nephew, Inc. from April 2006 to May 2009.

Barry J. Regan was appointed our Senior Vice President, Operations in July 2018. From January 2018 to June 2018, Mr. Regan served as Senior Vice President, Global Supply Chain and Direct Procurement of Smith & Nephew, Inc., a global medical technology company, and served as Senior Vice President, Global Supply Chain of Smith & Nephew, Inc. from March 2015 to December 2017. Prior to joining Smith & Nephew, Inc., Mr. Regan served in two capacities at AbbVie Inc., a biopharmaceutical company; first as Director, Operations Strategy & Network Optimization from September 2011 to September 2012, and then Vice President & General Manager, US & Puerto Rico Manufacturing from September 2012 to February 2015. Prior to joining AbbVie Inc., Mr. Regan served in various positions at Abbott Laboratories, a health care product company, with increasing responsibilities from 1994 to 2011, including most recently Director of Manufacturing Operations. Mr. Regan previously served on the board of directors of the Pharmaceutical Industry Association of Puerto Rico.

Kevin C. Smith was appointed our Senior Vice President, Quality and Regulatory in March 2018. From May 2012 to February 2018, Mr. Smith served as our Vice President, Global Quality and Regulatory Affairs. Prior to joining Wright, Mr. Smith served as Corporate Director, Quality Systems for Boston Scientific Corporation, a global medical technology company, from December 2001 to May 2012.

Jennifer S. Walker was appointed our Senior Vice President, Process Improvement in October 2015 in connection with the Wright/Tornier merger. Ms. Walker served as Senior Vice President, Process Improvement of Wright Medical Group, Inc. from December 2011 to October 2015 and Vice President and Corporate Controller from December 2009 to December 2011. Since joining legacy Wright’s financial organization in 1993, she served as Assistant Controller, Director, Financial Reporting & Risk Management, Director, Corporate Tax & Risk Management, and Tax Manager of legacy Wright. Prior to joining legacy Wright, Ms. Walker was a senior tax accountant with Arthur Andersen LLP. Ms. Walker is a certified public accountant.

Peter S. Cooke was appointed our President, Emerging Markets, Australia and Japan in January 2019. Prior to such position, he served as President, International from October 2015 to December 2018. He was appointed to

 

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that position in connection with the Wright/Tornier merger. Mr. Cooke served as President, International of Wright Medical Group, Inc. from January 2014 to October 2015 and served as Senior Vice President, International from January 2013 to January 2014. Prior to joining legacy Wright, Mr. Cooke served as Vice President and General Manager, Vascular Therapies Emerging Markets of Covidien plc, a global healthcare products company, from July 2010 to January 2013. Prior to Covidien, Mr. Cooke served in various general management roles for ev3 Inc., a global endovascular device company acquired by Covidien in July 2010, including Vice President and General Manager, International from July 2008 to July 2010; Vice President, General Manager, International from November 2006 to June 2008; Vice President, Sales International from January 2005 until November 2006; and Regional Director Asia Pacific and China from February 2003 until January 2005. Prior to ev3, Mr. Cooke spent eleven years at Guidant Corporation, three years at Baxter Healthcare Corporation and two years at St. Jude Medical, Inc.

Patrick Fisher was appointed our President, Lower Extremities in June 2016. From October 2015 to June 2016, Mr. Fisher served as our Vice President, U.S. Sales. From October 2012 to October 2015, Mr. Fisher served as Vice President, U.S. Sales of Wright Medical Group, Inc., and from October 2010 to October 2012, Mr. Fisher served as Regional Vice President of Sales—West Region. From July 2002 to October 2010, Mr. Fisher served in various commercial and marketing roles within Wright. Prior to joining Wright in July 2002, Mr. Fisher held various positions within Smith & Nephew, Inc., a global medical technology company. Mr. Fisher serves on the advisory board for the University of Tennessee Health Sciences Center Research Foundation.

Timothy L. Lanier was appointed our President, Upper Extremities in June 2016. Mr. Lanier has over 25 years of experience in medical device and commercial operations in both small and large companies that include various medical specialties such as orthopedics, vascular, oncology and ophthalmology. Prior to joining Wright, from September 2013 to June 2016, Mr. Lanier served as Vice President of Sales of DFINE Inc., a company committed to the treatment of metastatic tumors and other diseases of the spine. From July 2010 to September 2013, Mr. Lanier served as Vice President of US Sales for the Endovascular Division of Covidien plc, a global healthcare products company, where he built a world-class sales organization dedicated to treating both arterial and venous disease. He joined Covidien in July 2010 through the acquisition of ev3 Inc., where he served as Area Vice President from January 2008 to July 2010. Prior to ev3, Mr. Lanier served as Vice President of Commercial Operations at Anulex Technologies, Inc. from January 2007 to January 2008. He also had increasing executive responsibility at Zimmer Orthopedics, Spine Division and Spine-Tech, Inc. from 1997 to 2007, including Vice President of Commercial Operations.

Steven P. Wallace was appointed our President, International in January 2019. From November 2016 to December 2018, Mr. Wallace served as Vice President, Extremities Marketing of Wright. Prior to joining Wright, Mr. Wallace served as Vice President of Global Marketing and Medical Education of the CMF & Thoracic Division of Zimmer Biomet, Inc., an orthopedic company, from June 2015 to November 2016. Prior to that position, Mr. Wallace served as Senior Director of Global Marketing and Business Development from June 2012 to May 2015 and various other positions for the Microfixation Division of Biomet, Inc., an orthopedic company acquired by Zimmer. Prior to joining Biomet, Mr. Wallace served in a number of positions for Cardinal Health, Inc., a global, integrated healthcare services and products company.

David D. Stevens joined the Wright Board as a non-executive director in October 2015 in connection with the Wright/Tornier merger. Mr. Stevens serves as our Chairman. Mr. Stevens was a member of the board of directors of Wright Medical Group, Inc. from 2004 to 2015 and served as Chairman of the Board from 2009 to October 2015 and interim Chief Executive Officer of Wright from April 2011 to September 2011. He has been a private investor since 2006. Mr. Stevens served as Chief Executive Officer of Accredo Health Group, Inc., a subsidiary of Medco Health Solutions, Inc., from 2005 to 2006. He was Chief Executive Officer of Accredo Health, Inc. from 1996 to 2005, served as Chairman of the Board from 1999 to 2005, and was President and Chief Operating Officer of the predecessor companies of Accredo Health from their inception in 1983 until 1996. He serves on the board of directors of Allscripts Healthcare Solutions, Inc., a publicly held company. He previously served on the board of directors of Viasystems Group, Inc., a publicly held company, from 2012 until May 2015 when it

 

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was acquired by TTM Technologies, Inc., Medco Health Solutions, Inc., a publicly held company, from 2006 until 2012 when it was acquired by Express Scripts Holding Company, and Thomas & Betts Corporation, a publicly held company, from 2004 to 2012 when it was acquired by ABB Ltd. Mr. Stevens’ qualifications to serve on the Wright Board include his extensive experience serving as a chief executive officer, including as interim chief executive officer of legacy Wright, his close familiarity with our business, and his prior experience as a director of legacy Wright.

Gary D. Blackford joined the Wright Board as a non-executive director in October 2015 in connection with the Wright/Tornier merger. Mr. Blackford was a member of the board of directors of Wright Medical Group, Inc. from 2008 to 2015. From 2002 to February 2015, Mr. Blackford served as President and Chief Executive Officer and a member of the board of directors of Universal Hospital Services, Inc., a provider of medical technology outsourcing and services to the healthcare industry, and from 2007 to February 2015, served as Chairman of the board of directors. From 2001 to 2002, Mr. Blackford served as Chief Executive Officer of Curative Health Services Inc. From 1999 to 2001, Mr. Blackford served as Chief Executive Officer of ShopforSchool, Inc. He served as Chief Operating Officer for Value Rx from 1995 to 1998 and Chief Operating Officer and Chief Financial Officer of MedIntel Systems Corporation from 1993 to 1994. Mr. Blackford currently serves on the board of directors of Avanos Medical, Inc. (formerly Halyard Health, Inc.) and ReShape Lifesciences Inc. (formerly EnteroMedics Inc.), both publicly held companies. He also ser