Edgar Filing: WRIGHT MEDICAL GROUP INC

WRIGHT MEDICAL GROUP, INC. - FORM PRE 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant x

Filed by a Party other than the Registrant o

Check the appropriate box:


x	Preliminary Proxy Statement

o	Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o	Definitive Proxy Statement

o	Definitive Additional Materials

o	Soliciting Material Pursuant to Rule 14a-12

WRIGHT MEDICAL GROUP, INC.

(Name of Registrant as Specified in Its Charter)

Not Applicable

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):


x	No fee required.

o 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:


o	Fee paid previously with preliminary materials:


o	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:

PRELIMINARY COPY


Wright Medical Group, Inc.	5677 Airline Road, Arlington, Tennessee 38002	901-867-9971	www.wmt.com

NOTICE OF

2004 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 13, 2004

To our Stockholders:


	1.	Elect eight directors to serve on the Board of Directors of the Company for a term of one year;

	2.	Approve the amendment of the Company’s certificate of incorporation to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights), without any increase in the overall number of authorized shares of common stock; and

	3.	Ratify the selection of KPMG LLP as the Company’s independent auditor for 2004.

Stockholders also will transact any other business that properly comes before the meeting.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL THE PROPOSALS.

Only stockholders of record at the close of business on March 22, 2004, are entitled to receive notice of, and to vote at, the meeting and any postponement or adjournment thereof. A list of such stockholders will be available for inspection by any stockholder at the office of the Company’s legal counsel, Baker Donelson Bearman Caldwell & Berkowitz, 165 Madison Avenue, 21st Floor, Memphis, Tennessee, during ordinary business hours beginning May 3, 2004, as well as at the Doubletree Hotel Memphis during the meeting on May 13, 2004.

YOUR VOTE IS IMPORTANT. REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY VOTE BY TELEPHONE OR COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. NO ADDITIONAL POSTAGE IS NECESSARY IF THE PROXY IS MAILED IN THE UNITED STATES OR CANADA. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.


	By Order of the Board of Directors,



	Jason P. Hood
	Secretary

April , 2004

TABLE OF CONTENTS


		Page

INFORMATION ABOUT THE MEETING			2
	What is the purpose of the meeting?		2
	Who is entitled to vote?		2
	Am I entitled to vote if my shares are held in “street name”?		2
	How many shares must be present to conduct business at the meeting?		2
	What happens if a quorum is not present at the meeting?		2
	How do I vote my shares?		2
	Can I change my vote after I submit my proxy?		3
	Who will count the votes?		3
	How does the Board of Directors recommend that I vote on the proposals?		3
	What happens if I do not specify how my shares are to be voted?		4
	Will any other business be conducted at the meeting?		4
	How many votes are required for action to be taken on each proposal?		4
	How will abstentions be treated?		4
	How will broker non-votes be treated?		4

STOCK OWNERSHIP			5
	Directors, Executive Officers, and Other Stockholders		5
	Section 16(a) Beneficial Ownership Reporting Compliance		6

BOARD OF DIRECTORS			8
	General		8
	Director Independence		8
	Meetings Attended by Directors		8
	Board of Directors Committees		8
	Director Nominations		9
	Director Compensation		10
	Stockholder Communications		11
	Audit Committee Report		11
	Compensation Committee Report		12
	Compensation Committee Interlocks and Insider Participation		13

PROPOSAL 1 — ELECTION OF DIRECTORS			14
	Director Nominees		14
	Board of Directors’ Recommendation		15

PROPOSAL 2 — APPROVAL OF AMENDMENT OF CERTIFICATE OF INCORPORATION TO CHANGE AUTHORIZED SHARES OF COMMON STOCK			16
	Introduction		16
	Background of Non-Voting Common Stock		16
	Outstanding, Committed, Reserved, and Available Shares of Common Stock		16
	Text of Amendment		17
	Effects of Amendment		17
	Effective Date of Amendment		18
	Board of Directors’ Recommendation		18


		Page

PROPOSAL 3 — RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR			19
	General		19
	Board of Directors’ Recommendation		19
	Audit and Non-Audit Services		19
	Other Independence Measures		20
	Prior Independent Auditor		20

EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION			22
	Executive Officers and Other Senior Management		22
	Code of Business Conduct		24
	Summary Compensation Table		24
	Stock Option Grants in 2003		25
	Stock Option Exercises and Values for 2003		26
	Equity Compensation Plan Information		26
	Employment Agreements		27
	Comparison of Total Stockholder Returns		30

OTHER MATTERS			31

ADDITIONAL INFORMATION			31
	Solicitation of Proxies		31
	Mailing Address of Principal Executive Office		31
	Stockholder Proposals for Inclusion in Proxy Statement for 2005 Annual Meeting of Stockholders		31
	Other Stockholder Proposals for Presentation at 2005 Annual Meeting of Stockholders		31

APPENDIX A. AUDIT COMMITTEE CHARTER			A-1

APPENDIX B. NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER			B-1

PRELIMINARY COPY


Wright Medical Group, Inc.	5677 Airline Road, Arlington, Tennessee 38002	901-867-9971	www.wmt.com

PROXY STATEMENT

FOR

2004 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 13, 2004

This Proxy Statement is being furnished in connection with the solicitation of proxies by Wright Medical Group, Inc. (the “Company”), on behalf of its Board of Directors, for use at the 2004 Annual Meeting of Stockholders and any postponement or adjournment thereof. The meeting will be held at the Doubletree Hotel Memphis located at 5069 Sanderlin Avenue, Memphis, Tennessee, on May 13, 2004, beginning at 3:30 p.m. (central time).

At the meeting, the Company’s stockholders will be asked to vote on proposals to (1) elect eight directors to serve on the Board of Directors of the Company for a term of one year; (2) approve the amendment of the Company’s certificate of incorporation to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights), without any increase in the overall number of authorized shares of common stock; and (3) ratify the selection of KPMG LLP as the Company’s independent auditor for 2004. The proposals are set forth in the accompanying Notice of 2004 Annual Meeting of Stockholders and are described in more detail in this Proxy Statement. Stockholders also will transact any other business, not known or determined at the time of this proxy solicitation, that properly comes before the meeting, although the Board of Directors knows of no such other business to be presented.

When you submit your proxy, by either voting by telephone or executing and returning the enclosed proxy card, you will authorize the proxy holders — F. Barry Bays, the President and Chief Executive Officer and a director of the Company; John K. Bakewell, the Executive Vice President and Chief Financial Officer of the Company; and Jason P. Hood, the Vice President, General Counsel, and Secretary of the Company — to represent you and vote your shares of the Company’s common stock on these proposals at the meeting in accordance with your instructions. These persons also will have discretionary authority to vote your shares on any other business that properly comes before the meeting. They also may vote your shares to adjourn the meeting from time to time and will be authorized to vote your shares at any postponement or adjournment of the meeting.

The Company’s 2003 Annual Report, which includes the Company’s financial statements, accompanies this Proxy Statement. Although the 2003 Annual Report is being distributed with this Proxy Statement, it does not constitute a part of the proxy solicitation materials and is not incorporated herein by reference.

The Company will provide, without charge, a copy of its annual report on Form 10-K for the year ended December 31, 2003, to any stockholder of the Company who so requests. All stockholder requests should be sent to the Corporate Secretary, Wright Medical Group, Inc., 5677 Airline Road, Arlington, Tennessee 38002.

This Proxy Statement and the accompanying materials are first being sent or given to the Company’s stockholders on or about April , 2004.

INFORMATION ABOUT THE MEETING

What is the purpose of the meeting?

At the meeting, the Company’s stockholders will vote on the following proposals to:


	1.	Elect eight directors to serve on the Board of Directors of the Company for a term of one year;

	2.	Approve the amendment of the Company’s certificate of incorporation to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights), without any increase in the overall number of authorized shares of common stock; and

3. Ratify the selection of KPMG LLP as the Company’s independent auditor for 2004.

In addition, the Company’s management will report on the performance of the Company during 2003 and will respond to appropriate questions from stockholders.

Who is entitled to vote?

The record date for the meeting is March 22, 2004. Only stockholders of record at the close of business on March 22, 2004, are entitled to receive notice of the meeting and to vote at the meeting the shares of the Company’s common stock that they held on that date. Each outstanding share of common stock entitles its holder to one vote on each matter voted on at the meeting. At the close of business on March 22, 2004, there were 33,102,225 outstanding shares of common stock.

Am I entitled to vote if my shares are held in “street name”?

If you are the beneficial owner of shares held in “street name” by a brokerage firm, bank, or other nominee, such entity, as the record holder of the shares, is required to vote the shares in accordance with your instructions. If you do not give instructions to your nominee, it will nevertheless be entitled to vote your shares on “discretionary” items but will not be permitted to do so on “non-discretionary” items. In the case of non-discretionary items, any shares not voted by your nominee will be considered as “broker non-votes.” However, there will not be any broker non-votes in connection with the meeting, because the Company has been informed that all the matters to be acted upon by the stockholders at the meeting are discretionary items on which your nominee will be entitled to vote your shares even in the absence of instructions from you.

How many shares must be present to conduct business at the meeting?

A quorum must be present at the meeting in order for any business to be conducted. The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of the Company’s common stock outstanding on the record date of March 22, 2004, will constitute a quorum. Abstentions will be included in the number of shares considered present at the meeting for the purpose of determining whether there is a quorum.

What happens if a quorum is not present at the meeting?

If a quorum is not present at the scheduled time of the meeting, the holders of a majority of the shares present in person or represented by proxy at the meeting may adjourn the meeting to another place, date, or time until a quorum is present. The place, date, and time of the adjourned meeting will be announced when the adjournment is taken, and no other notice will be given.

How do I vote my shares?

If you are a registered stockholder, you may vote by telephone. If you are a registered stockholder (i.e., your shares are held in your own name), you may vote by telephone by following the instructions included on the proxy card. You do not need to return your proxy card if you vote by telephone.

If your shares are held in “street name,” you may be eligible to provide voting instructions to your nominee by telephone or on the Internet. If you are a beneficial owner of shares held in “street name” (i.e., your shares are held in the name of a brokerage firm, bank, or other nominee), you may be eligible to provide voting instructions to your nominee by telephone or on the Internet. A large number of brokerage firms, banks, and other nominees participate in a program provided through ADP Investor Communications Services (“ADP”) that offers telephone and Internet voting options. If your shares are held in “street name” by a brokerage firm, bank, or other nominee that participates in the ADP program, you may provide voting instructions to your nominee by telephone or on the Internet by following the instructions set forth on the voting instruction form provided to you. You do not need to return your proxy card if you provide voting instructions to your nominee by telephone or on the Internet.

You may vote by mail. If you are a registered stockholder, you may vote by properly completing, signing, dating, and returning the accompanying proxy card. The enclosed postage-paid envelope requires no additional postage if it is mailed in the United States or Canada. If you are a beneficial owner of shares held in “street name,” you may provide voting instructions to the brokerage firm, bank, or other nominee that holds your shares by properly completing, signing, dating, and returning the voting instruction form provided to you by your nominee.

You may vote in person at the meeting. If you are a registered stockholder and attend the meeting, you may deliver your completed proxy card in person. In addition, the Company will pass out written ballots to registered stockholders who wish to vote in person at the meeting. If you are a beneficial owner of shares held in “street name” and wish to vote at the meeting, you will need to obtain a proxy form from the brokerage firm, bank, or other nominee that holds your shares.

Can I change my vote after I submit my proxy?

Yes, you may revoke your proxy and change your vote at any time before the polls close at the meeting in any of the following ways: (1) by voting again by telephone, because only your latest telephone vote will be counted; (2) by properly completing, signing, dating, and returning another proxy card with a later date; (3) if you are a registered stockholder, by voting in person at the meeting; (4) if you are a registered stockholder, by giving written notice of such revocation to the Secretary of the Company prior to or at the meeting; or (5) if you are a beneficial owner of shares held in “street name,” by following the instructions given by the brokerage firm, bank, or other nominee that holds your shares. Your attendance at the meeting itself will not revoke your proxy unless you give written notice of revocation to the Secretary of the Company before the polls are closed.

Who will count the votes?

American Stock Transfer & Trust Company (“AST”), the registrar and transfer agent for the Company’s common stock, will tabulate and certify the stockholder votes submitted by proxy. A representative of AST will serve as the inspector of election at the meeting.

How does the Board of Directors recommend that I vote on the proposals?

Your Board of Directors recommends that you vote:


	1.	FOR the election of the eight director nominees to serve on the Board of Directors of the Company for a term of one year;

	2.	FOR the approval of the amendment of the Company’s certificate of incorporation to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights), without any increase in the overall number of authorized shares of common stock; and

3. FOR the ratification of the selection of KPMG LLP as the Company’s independent auditor for 2004.

What happens if I do not specify how my shares are to be voted?

If you submit a proxy but do not indicate any voting instructions, your shares will be voted FOR each of the proposals.

Will any other business be conducted at the meeting?

As of the date hereof, the Board of Directors knows of no business that will be presented at the meeting other than the proposals described in this Proxy Statement. However, if any other proposal properly comes before the stockholders for a vote at the meeting, the proxy holders will vote your shares in accordance with their best judgment.

How many votes are required for action to be taken on each proposal?

Election of Directors. The eight director nominees will be elected to serve on the Board of Directors for a term of one year if they receive a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter. This means that the eight director nominees will be elected if they receive more votes than any other person at the meeting. If you vote to “Withhold Authority” with respect to the election of one or more director nominees, your shares will not be voted with respect to the person or persons indicated, although they will be counted for the purpose of determining whether there is a quorum at the meeting.

Approval of Amendment of Certificate of Incorporation. The proposed amendment of the Company’s certificate of incorporation to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights), without any increase in the overall number of authorized shares of common stock, will be approved if a majority of the outstanding shares of common stock entitled to vote on the subject matter are voted in favor of the proposal.

Ratification of Selection of Independent Auditor. The selection of KPMG LLP as the Company’s independent auditor for 2004 will be ratified if a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter are voted in favor of the proposal.

How will abstentions be treated?

You do not have the option of abstaining from voting on Proposal 1 (election of directors), but you may abstain from voting on Proposal 2 (approval of the amendment of the Company’s certificate of incorporation) and Proposal 3 (ratification of the selection of the independent auditor). With respect to Proposal 1, because the directors are elected by a plurality vote, an abstention will have no effect on the outcome of the vote and, therefore, is not offered as a voting option on the proposal. In the case of an abstention on Proposal 2 or 3, your shares would be included in the number of shares considered present at the meeting for the purpose of determining whether there is a quorum. Because your shares would be voted but not in favor of Proposal 2 or 3, your abstention would have the same effect as a negative vote in determining the outcome of the vote on the proposal.

How will broker non-votes be treated?

A “broker non-vote” occurs when a brokerage firm, bank, or other nominee does not vote shares that it holds in “street name” on behalf of a beneficial owner, because the beneficial owner has not provided voting instructions to the nominee with respect to a non-discretionary item. The Company has been informed that none of the proposals described in this Proxy Statement is a non-discretionary item on which a nominee will not have discretion to vote in the absence of voting instructions from the beneficial owner. To the contrary, all such proposals are discretionary items on which a nominee will have discretion to vote even without voting instructions from the beneficial owner. Therefore, there will not be any broker non-votes in connection with the meeting.

STOCK OWNERSHIP

Directors, Executive Officers, and Other Stockholders

The following table provides information about the beneficial ownership of the Company’s common stock as of March 31, 2004, by each director of the Company, each executive officer of the Company named in the Summary Compensation Table in this Proxy Statement, all directors and executive officers of the Company as a group, and each person known to management of the Company to be the beneficial owner of more than 5% of the outstanding shares of common stock.


					Percentage of
			Number of Shares		Shares
Name of Beneficial Owner			Beneficially Owned^(1,2)		Outstanding⁽³⁾

Directors and Executive Officers:
	James T. Treace⁽⁴⁾			397,951		[1.2	]%
	F. Barry Bays			770,000		[2.3	]
	John K. Bakewell			136,976		*
	Brian T. Ennis			67,500		*
	Jack E. Parr, Ph.D.			51,962		*
	Robert W. Churinetz			56,045		*
	Richard B. Emmitt⁽⁵⁾			271,723		*
	Laurence Y. Fairey			—		—
	David D. Stevens			—		—
	James E. Thomas			142,252		*
	Thomas E. Timbie			39,537		*
	Elizabeth H. Weatherman⁽⁶⁾			4,842,629		[14.5	]
	All directors and executive officers as a group (15 persons)^(4-6)			6,994,552		[20.1	]

Other Stockholders:
	Warburg, Pincus Equity Partners, L.P.⁽⁷⁾			4,842,629		[14.5	]
		466 Lexington Avenue
		New York, New York 10017
	FMR Corp.⁽⁸⁾			2,206,688		[6.7	]
		82 Devonshire Street
		Boston, Massachusetts 02109
	Capital Group International, Inc.⁽⁹⁾			1,704,310		[5.1	]
		11100 Santa Monica Boulevard
		Los Angeles, California 90025


	*	Less than 1% of the outstanding shares of common stock.


(1)	A person’s beneficial ownership of common stock is determined in accordance with the rules and regulations of the Securities and Exchange Commission. Except as indicated elsewhere in the footnotes to this table and subject to applicable community property laws, the persons named in the table have sole voting power and sole investment power with respect to the shares of common stock that they beneficially own.

(2)	The shares of common stock shown in the table include the following numbers of shares that the indicated persons have the right to acquire as of March 31, 2004, or within 60 days thereafter (i.e., May 30, 2004), upon the exercise of options and warrants granted by the Company: Mr. Treace — 214,544 shares; Mr. Bays — 750,000 shares; Mr. Bakewell — 91,818 shares; Mr. Ennis — 47,500 shares; Dr. Parr — 31,584 shares; Mr. Churinetz — 56,045 shares; Mr. Thomas — 21,818 shares; Mr. Timbie — 32,726 shares; Ms. Weatherman — 345,455 shares; all directors and executive officers as a group — 1,761,167 shares; and Warburg Pincus — 345,455 shares.


(3)	The percentage of outstanding shares of common stock beneficially owned by each person is calculated based on the [33,105,748] outstanding shares of common stock as of March 31, 2004, plus the shares of common stock that such person has the right to acquire as of such date or within 60 days thereafter (i.e., May 30, 2004) upon the exercise of options and warrants granted by the Company.

(4)	The shares of common stock beneficially owned by Mr. Treace include 103,622 shares owned by the J&A Group, LLC, a private investment and consulting company controlled by Mr. Treace and his wife, and 90 shares owned by his wife. Mr. Treace disclaims beneficial ownership of the shares owned by his wife.

(5)	The shares of common stock beneficially owned by Mr. Emmitt are owned by Vertical Fund I, L.P., and Vertical Fund II, L.P. (the “Vertical Funds”). Mr. Emmitt is a general partner of The Vertical Group, L.P., which is the general partner of the Vertical Funds. Mr. Emmitt does not own any shares individually and disclaims beneficial ownership of the shares owned by the Vertical Funds.

(6)	The shares of common stock beneficially owned by Ms. Weatherman are owned by Warburg Pincus. Ms. Weatherman is a general partner of WP, which is the general partner of Warburg Pincus, and a Managing Director and member of WPLLC, which manages Warburg Pincus. See footnote (7) for more information concerning Warburg Pincus, WP and WPLLC. Ms. Weatherman does not own any shares individually and disclaims beneficial ownership of the shares owned by Warburg Pincus.

(7)	The shares of common stock beneficially owned by Warburg, Pincus Equity Partners, L.P., are owned by it and three affiliated funds (“Warburg Pincus”). Warburg Pincus & Co. (“WP”) is the general partner of Warburg Pincus, and Warburg Pincus LLC (“WPLLC”) manages Warburg Pincus. As a result of these relationships, WP and WPLLC are deemed to beneficially own the shares owned by Warburg Pincus. Each of Warburg Pincus, WP and WPLLC has shared voting power and shared investment power with respect to the shares owned by Warburg Pincus.

(8)	The shares of common stock beneficially owned by FMR Corp. (“FMR”) consist of the following: 1,796,600 shares owned by various investment accounts for which Fidelity Management & Research Company (“Fidelity”), a wholly owned subsidiary of FMR, acts as an investment adviser; 308,300 shares owned by various institutional accounts for which Fidelity Management Trust Company (“Fidelity Trust”), a wholly owned subsidiary of FMR, serves as the investment manager; and 101,788 shares owned by various investment companies and institutional investors for which Fidelity International Limited (“Fidelity International”), an affiliate of FMR, provides investment advisory and management services. FMR, through its control of Fidelity, has sole investment power, but no voting power, with regard to the shares owned by the investment accounts served by Fidelity. FMR, through its control of Fidelity Trust, has sole voting power and sole investment power with respect to the shares owned by the institutional accounts served by Fidelity Trust. Fidelity International, which is independent of but under common control with FMR, has sole voting power and sole investment power with regard to the shares owned by the investment companies and institutional investors served by Fidelity International.

(9)	The shares of common stock beneficially owned by Capital Group International, Inc. (“Capital Group”) are owned by various institutional accounts for which Capital Guardian Trust Company (“Capital Trust”), a subsidiary of Capital Group, serves as the investment manager. Capital Group, through its control of Capital Trust, has sole voting power with respect to 1,123,100 shares and sole investment power with regard to 1,704,310 shares owned by the institutional accounts served by Capital Trust.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that the Company’s directors and executive officers and the beneficial owners of more than 10% of the Company’s registered equity securities (the “reporting persons”) file with the SEC initial reports of, and subsequent reports of changes in, their beneficial ownership of the Company’s equity securities. The reporting persons are required to furnish the Company with copies of all such Section 16(a) reports. Based solely on the Company’s review of the copies of such Section 16(a) reports and written representations from certain reporting persons furnished to the Company, the Company believes that the reporting persons complied with all applicable Section 16(a) filing requirements during 2003 and prior years, except as described below.

James T. Treace understated three holdings and did not report one holding as of July 12, 2001, and he did not timely report two transactions on September 24, 2003. F. Barry Bays understated two holdings and did not report one holding as of July 12, 2001. John K. Bakewell understated one holding and did not report one holding as of July 12, 2001. Brian T. Ennis did not report one holding as of October 4, 2001. Jack E. Parr, Ph.D., understated two holdings and did not report one holding as of July 12, 2001. Robert W.

Churinetz did not report one holding as of July 12, 2001. James E. Thomas understated two holdings as of July 12, 2001. Thomas E. Timbie understated two holdings and did not report one holding as of July 12, 2001. R. Glen Coleman understated one holding and did not report two holdings as of July 12, 2001, and he did not timely report one transaction on November 17, 2003. Jeffrey G. Roberts did not file a Form 3 and, as a consequence, did not report four holdings as of July 12, 2001. John R. Treace, who no longer is an executive officer, understated two holdings and did not report one holding as of July 12, 2001.

The deficiencies in the foregoing Section 16(a) reports relate primarily to the shares of common stock and stock options that the reporting persons beneficially owned as of the dates that they became reporting persons. In most instances, the deficient reports were attributable to inadvertent miscommunications between the Company and its previous legal counsel who prepared the reports on behalf of the reporting persons. All of the reporting persons’ initial holdings and subsequent transactions have now been accurately reported.

BOARD OF DIRECTORS

General

The Board of Directors of the Company consists of eight directors. The Company’s directors are James T. Treace, F. Barry Bays, Richard B. Emmitt, Laurence Y. Fairey, David D. Stevens, James E. Thomas, Thomas E. Timbie, and Elizabeth H. Weatherman. The directors are elected at each annual meeting of stockholders and serve for a term of one year until the next annual meeting of stockholders and until their respective successors are elected and qualified, subject to their prior death, resignation, retirement, disqualification, or removal from office.

Director Independence

It is the policy of the Board of Directors that a majority of the directors be independent as defined in the listing standards of the National Association of Securities Dealers (the “NASD”). The Board of Directors has determined that six directors — Richard B. Emmitt, Laurence Y. Fairey, David D. Stevens, James E. Thomas, Thomas E. Timbie, and Elizabeth H. Weatherman — are independent under the NASD’s listing standards.

Meetings Attended by Directors

The Board of Directors holds meetings on a quarterly basis and on other occasions as necessary or appropriate. The Board of Directors met six times in 2003. The Board of Directors has four standing committees — the Executive Committee, the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. The Audit Committee and the Compensation Committee met seven and four times, respectively, in 2003. The Executive Committee and the Nominating and Corporate Governance Committee did not meet in 2003. Average attendance at Board of Directors and committee meetings in 2003 was in excess of 98%. Each director attended at least 90% of the total number of meetings of the Board of Directors and its committees on which he or she served in 2003.

Beginning in 2004, the independent directors of the Company will have regularly scheduled meetings at which only they are present. The meetings of the independent directors typically will take place in connection with the regularly scheduled meetings of the full Board of Directors. The independent directors may meet at such other times as they deem necessary or appropriate.

Effective as of 2004, the directors of the Company are encouraged to attend the Company’s annual meeting of stockholders absent exceptional cause. In 2003, two of the Company’s then six directors attended the annual meeting of stockholders.

Board of Directors Committees

The Board of Directors delegates certain of its functions to its standing Executive Committee, Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Information regarding the responsibilities of these committees and their members is provided below.

Executive Committee. The Executive Committee exercises all the powers of the Board of Directors in the management of the business and affairs of the Company during the intervals between meetings of the Board of Directors, subject to such restrictions or limitations as the Board of Directors may specify from time to time or as otherwise limited by Delaware law. The Executive Committee is composed of four directors who are appointed by the Board of Directors. The members of the Executive Committee are James T. Treace (chairman), F. Barry Bays, Richard B. Emmitt, and Elizabeth H. Weatherman.

Audit Committee. The Audit Committee oversees the Company’s accounting and financial reporting processes and the audits of its financial statements. In this role, the Audit Committee monitors and oversees the integrity of the Company’s financial statements and related disclosures, the qualifications, independence, and performance of the Company’s independent auditor, the performance of the Company’s internal auditing function, and the Company’s compliance with applicable legal requirements and its business conduct policies.

The Audit Committee has a written charter which was last amended and restated by the Board of Directors on February 11, 2004. A copy of the charter is attached as Appendix A to this Proxy Statement. The Audit Committee is composed of three directors who are appointed by the Board of Directors. The members of the Audit Committee are Thomas E. Timbie (chairman), Richard B. Emmitt, and James E. Thomas, all of whom are independent as defined in the NASD’s listing standards and meet the independence criteria set forth in the rules of the Securities and Exchange Commission (the “SEC”). The Board of Directors has determined that one member of the Audit Committee, Thomas E. Timbie, is an audit committee financial expert as defined in the SEC’s regulations. The report of the Audit Committee appears beginning on page 11 of this Proxy Statement.

Compensation Committee. The Compensation Committee oversees the Company’s general programs of compensation and benefits for all employees and determines the compensation of the Company’s executive officers and directors. The Compensation Committee is composed of three directors who are appointed by the Board of Directors. The members of the Compensation Committee are David D. Stevens (chairman), James E. Thomas, and Elizabeth H. Weatherman, all of whom are independent as defined in the NASD’s listing standards. James T. Treace was a member of the Compensation Committee and served as its chairman during 2003 and the beginning of 2004, but due to his lack of independence he resigned and was replaced by Mr. Stevens on February 11, 2004. The report of the Compensation Committee appears beginning on page 12 of this Proxy Statement.

Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee, which was established by the Board of Directors on February 11, 2004, oversees the corporate governance processes of the Company. In this role, the Nominating and Corporate Governance Committee identifies and recommends individuals qualified to become members of the Board of Directors, makes recommendations regarding the establishment and membership of the Board of Directors’ committees, develops and reviews corporate governance principles applicable to the Company, and leads the annual review of the performance of the Board of Directors and its committees. The Nominating and Corporate Governance Committee has a written charter which was adopted by the Board of Directors on February 11, 2004. A copy of the charter is attached as Appendix B to this Proxy Statement. The Nominating and Corporate Governance Committee is composed of three directors who are appointed by the Board of Directors. The members of the Nominating and Corporate Governance Committee are Elizabeth H. Weatherman (chairwoman), Laurence Y. Fairey, and Thomas E. Timbie, all of whom are independent as defined in the NASD’s listing standards.

Director Nominations

The Board of Directors will consider all potential candidates for nomination by the Board of Directors for election as directors who are recommended by the Company’s stockholders, directors, officers, and employees. All director recommendations must be made in accordance with the provisions of Article II, Section 5 of the Company’s bylaws, which sets forth requirements concerning the information about the candidate to be provided and the timing for the submission of the recommendations. All director recommendations should be sent to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Wright Medical Group, Inc., 5677 Airline Road, Arlington, Tennessee 38002. The Nominating and Corporate Governance Committee will screen all potential director candidates in the same manner, regardless of the source of their recommendation. The Nominating and Corporate Governance Committee’s review will typically be based on the written materials provided with respect to a potential director candidate. The Nominating and Corporate Governance Committee will evaluate and determine whether a potential candidate meets the Company’s minimum qualifications and specific qualities and skills for directors and whether requesting additional information or an interview is appropriate.

The Board of Directors has adopted the following series of minimum qualifications and specific qualities and skills for the Company’s directors, which will serve as the basis upon which potential director candidates are evaluated by the Nominating and Corporate Governance Committee:


	•	Directors should possess the highest personal and professional ethics, integrity, and values.

	•	Directors should have an inquisitive and objective perspective, practical wisdom, and mature judgment.

	•	Directors should have expertise and experience at policy-making levels in areas that are relevant to the Company’s business.

	•	Directors should have, or demonstrate an ability and willingness to acquire in short order, a clear understanding of the fundamental aspects of the Company’s business.

	•	Directors should be committed to representing the long-term interests of the Company’s stockholders.

	•	Directors should be willing to devote sufficient time to carry out their duties and responsibilities effectively and should be committed to serving on the Board of Directors for an extended period of time.

	•	Directors, in the event of any significant change in their personal circumstances (including a change in their principal job responsibilities), should consider whether the change materially diminishes their ability to fulfill their obligations as a director and, if so, should offer their resignation as a director to the Board of Directors.

	•	Directors who also serve as the chief executive officer, chief operating officer, or chief financial officer of another enterprise should not serve on more than two boards of public companies in addition to the Company’s Board of Directors, and other directors should not serve on more than four boards of public companies in addition to the Company’s Board of Directors.

In making its determinations regarding director nominees, the Board of Directors will consider whether a potential candidate has previously served as a director of the Company. The Board of Directors does not believe, however, that directors should expect to be automatically renominated on an annual basis. Instead, the annual self-assessment of the performance of the Board of Directors and its committees will be an important determinant of director tenure. The Board of Directors will initiate its self-assessment in 2005.

Apart from the normal director nomination process, the Company is a party to a stockholders agreement that gives Warburg, Pincus Equity Partners, L.P. (“WPEP”) the right to designate one or two individuals to serve as directors of the Company. If WPEP beneficially owns at least 10% of the outstanding shares of the Company’s capital stock, WPEP is allowed to designate one individual for election to the Board of Directors. If WPEP beneficially owns at least 20% of the outstanding shares of the Company’s capital stock, WPEP is allowed to designate two individuals for election to the Board of Directors. The Company is obligated to nominate and use its best efforts to have the individual(s) designated by WPEP elected to the Board of Directors. As of March 31, 2004, WPEP beneficially owned 4,842,629 shares of common stock representing [14.5]% of the outstanding shares, thus giving it the right under the stockholders agreement to designate one individual to serve as a director of the Company. Elizabeth H. Weatherman currently serves as a director of the Company and has been nominated for re-election at the meeting pursuant to WPEP’s designation.

Director Compensation

The Company compensates its directors for their services with a combination of annual retainers, committee meeting fees, and discretionary equity-based awards. Except for the directors of the Company who are employees of the Company (F. Barry Bays) or who represent one of the Company’s stockholders (Richard B. Emmitt and Elizabeth H. Weatherman), all directors are eligible for such compensation. The Chairman of the Board is paid an annual retainer of $50,000, and the other eligible directors receive an annual retainer of $15,000. Eligible directors who are members of the Audit Committee are paid supplemental annual retainers of $20,000 for the chairman and $8,000 for the other members. Eligible directors who are members of the Compensation Committee or the Nominating and Corporate Governance Committee receive a meeting fee of $500 for their attendance at each committee meeting that is not associated with a regularly scheduled meeting of the Board of Directors. Eligible directors who serve on the Executive Committee are not paid any separate

compensation in such capacity. Directors are reimbursed for their out-of-pocket expenses incurred in connection with attending meetings of the Board of Directors and its committees. Directors may receive discretionary grants of equity-based awards under the Company’s Second Amended and Restated 1999 Equity Incentive Plan. No such awards were granted to the directors in 2003, although Mr. Bays, in his capacity as the Company’s President and Chief Executive Officer, received a stock option for the purchase of 50,000 shares of common stock as more fully described in “Executive Officers and Executive Compensation — Stock Option Grants in 2003.” Laurence Y. Fairey and David D. Stevens each received a stock option for the purchase of 20,000 shares of common stock upon their election as directors of the Company on January 26, 2004.

Stockholder Communications

Stockholders may communicate with the Board of Directors or any individual director regarding any matter relating to the Company that is within the responsibilities of the Board of Directors. Stockholders, when acting solely in such capacity, should send their communications to the Board of Directors or an individual director c/o Corporate Secretary, Wright Medical Group, Inc., 5677 Airline Road, Arlington, Tennessee 38002. The Corporate Secretary will discuss with the Chairman of the Board or the individual director whether the subject matter of a stockholder communication is within the responsibilities of the Board of Directors. The Corporate Secretary will forward a stockholder communication to the Chairman of the Board or the individual director if such person determines that the communication meets this standard.

Audit Committee Report

Management is responsible for the Company’s accounting and financial reporting processes and for preparing the Company’s consolidated financial statements. KPMG LLP (“KPMG”), the Company’s independent auditor, is responsible for performing an audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and for expressing an opinion on the conformity of the Company’s audited consolidated financial statements to accounting principles generally accepted in the United States of America. In this context, the responsibility of the Audit Committee of the Board of Directors is to oversee the Company’s accounting and financial reporting processes and the audits of its consolidated financial statements.

In the performance of its oversight function, the Audit Committee reviewed and discussed the Company’s audited consolidated financial statements as of and for the year ended December 31, 2003, with management and KPMG. Management and KPMG represented to the Audit Committee that the Company’s audited consolidated financial statements as of and for the year ended December 31, 2003, were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee also discussed with KPMG the matters required to be discussed by Statement on Auditing Standards (“SAS”) Nos. 61, 89 and 90 issued by the Auditing Standards Board of the American Institute of Certified Public Accountants. SAS Nos. 61, 89 and 90 set forth requirements pertaining to the independent auditor’s communications with the Audit Committee regarding the conduct of the audit.

The Audit Committee received the written disclosures and the letter from KPMG required by Independence Standards Board (“ISB”) Standard No. 1, Independence Discussions with Audit Committees, as amended. ISB Standard No. 1 requires the independent auditor to disclose in writing to the Audit Committee all relationships between the auditor and the Company that, in the auditor’s judgment, reasonably may be thought to bear on independence and to discuss the auditor’s independence with the Audit Committee. The Audit Committee discussed with KPMG its independence and considered in advance whether the provision of any non-audit services by KPMG is compatible with maintaining their independence.

The members of the Audit Committee are not professionally engaged in the practice of accounting or auditing and, as such, rely without independent verification on the information provided to them and on the representations made by management and KPMG. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting processes or appropriate internal controls and procedures designed to assure compliance

with the accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s reviews and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, that the Company’s audited consolidated financial statements are presented in accordance with generally accepted accounting principles, or that KPMG is in fact independent.

Based on the reviews and discussions of the Audit Committee described above, in reliance on the unqualified opinion of KPMG dated February 11, 2004, regarding the Company’s audited consolidated financial statements as of and for the year ended December 31, 2003, and subject to the limitations on the responsibilities of the Audit Committee discussed above and in the Audit Committee’s charter (a copy of which is attached as Appendix A), the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that such financial statements be included in the Company’s annual report on Form 10-K for the year ended December 31, 2003, to be filed with the Securities and Exchange Commission.

The foregoing report is provided by the undersigned members of the Audit Committee of the Board of Directors.


	Thomas E. Timbie (Chairman)
	Richard B. Emmitt
	James E. Thomas

Compensation Committee Report

Overview. The Compensation Committee of the Board of Directors oversees the Company’s general programs of compensation and benefits for all employees and determines the compensation of the Company’s executive officers and directors. In making its determinations regarding executive compensation, the Compensation Committee has attempted to implement a policy that serves the financial interests of the Company’s stockholders while providing appropriate incentives to its executive officers.

Compensation Philosophy. The Company’s executive compensation program is designed to attract and retain high caliber executives and motivate them to achieve superior performance for the benefit of the Company’s stockholders. The Compensation Committee believes that a significant portion of executive officers’ compensation potential on an annual basis should be at risk based on the Company’s performance. If the Company’s performance does not meet the criteria established by the Compensation Committee, incentive compensation will be adjusted accordingly.

Compensation Program. The compensation for executive officers of the Company consists primarily of a base salary, an incentive bonus opportunity, and long-term incentive awards tied directly to the performance of the Company’s common stock. The total cash compensation (i.e., base salary plus incentive bonus) paid to the Company’s executive officers is intended to be competitive with the total cash compensation paid to executive officers in similar positions at companies primarily in the medical device industry with revenues similar to those of the Company. These components of executive compensation are discussed more fully below.

Base Salary. The Compensation Committee determines the base salaries of the Chief Executive Officer and all other executive officers of the Company. The Compensation Committee considers the input of the Chief Executive Officer with respect to the base salaries of the other executive officers of the Company. In establishing the base salaries, the Compensation Committee seeks relevant compensation information but does not rely on a specific list of companies to compare salaries. Salaries are reviewed annually, and increases are based primarily on merit according to each executive officer’s achievement of performance objectives.

Incentive Bonus. The Company implemented a management incentive plan for its executive officers and other management-level employees in 2003. The incentive plan provided for the discretionary payment by the Company of an incentive bonus in the event, and to the extent, that the Company achieved certain quarterly and annual performance objectives, including those relating to the Company’s financial results, inventory position, and manufacturing efficiency. Under the plan, the incentive bonuses were calculated as a

percentage of the executive officer’s base salary, with the maximum percentage being 68-75% of base salary depending on the executive’s job classification. As a result of the Company’s performance in 2003 relative to the incentive plan’s objectives, the executive officers received incentive bonuses in the approximate range of 63-75% of their base salaries.

Long-Term Incentive Awards. The Company may grant long-term, equity-based incentive awards to its executive officers under the Company’s Second Amended and Restated 1999 Equity Incentive Plan (the “Equity Incentive Plan”). Under the Equity Incentive Plan, which is administered by the Compensation Committee, the Company may grant long-term, equity-based awards in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, phantom stock units, performance share units, and stock bonuses. Based on an assessment of competitive factors, the Compensation Committee determines an award that is suitable for providing an adequate incentive for the performance and retention of each executive officer. It is not intended that such awards be granted on the basis of past corporate performance or the size or amount of awards previously granted.

The Compensation Committee’s practice has been to award stock options in order to closely align the interests of the executive officers with those of the Company’s stockholders. In 2003, the Company granted stock options to purchase a total of 227,500 shares of common stock to nine executive officers. To encourage retention, the stock options generally are granted with a vesting period over several years. The stock options granted to the executive officers in 2003 vest ratably over four years. The Compensation Committee has taken the position that stock options should be granted with an exercise price that is equal to the fair market value of the common stock on the date of grant, which is calculated as the average of the high and low reported sale prices on the trading day immediately prior to the grant date. The actual value of stock option compensation, therefore, depends on the market value of the common stock increasing after the date of grant.

Compensation of Chief Executive Officer. F. Barry Bays was the President and Chief Executive Officer of the Company in 2003. Mr. Bays has an employment agreement with the Company, which is discussed in more detail elsewhere in this Proxy Statement. Pursuant to the agreement, the Company paid Mr. Bays a base salary of $270,000 in 2003. Mr. Bays also was eligible under the Company’s management incentive plan for 2003 to receive an incentive bonus calculated as a percentage of his base salary in the event that the Company achieved certain quarterly and annual performance objectives in 2003. While his targeted bonus percentage was 50% of his base salary, Mr. Bays actually received an incentive bonus for 2003 of $202,500, or 75% of his base salary, due to the overachievement with respect to certain of the performance criteria. On March 25, 2003, the Company granted an option to purchase 50,000 shares of common stock to Mr. Bays under the Equity Incentive Plan. The exercise price of the option is $16.59 per share, which is equal to the market value of the common stock on the date of grant. The option vests ratably over four years and has a ten-year term. The Compensation Committee considers the total compensation received by Mr. Bays for 2003 to be reasonable and appropriate under the circumstances.

* * *

The foregoing report is provided by the undersigned members of the Compensation Committee of the Board of Directors.


	David D. Stevens (Chairman)
	James E. Thomas
	Elizabeth H. Weatherman

Compensation Committee Interlocks and Insider Participation

James T. Treace, James E. Thomas, and Elizabeth H. Weatherman served as members of the Compensation Committee of the Board of Directors in 2003. No member of the Compensation Committee is or was an officer or employee of the Company or any of its subsidiaries. In addition, no executive officer of the Company served during 2003 as a director or a member of the compensation committee of any entity that had an executive officer serving as a director of the Company or a member of the Compensation Committee of the Board of Directors.

PROPOSAL 1 — ELECTION OF DIRECTORS

Director Nominees

The Board of Directors proposes that the eight nominees listed below be elected to serve as directors of the Company. Each nominee is an incumbent director of the Company and has consented to serve on the Board of Directors. The Board of Directors does not know of any reason why any nominee would not be able to serve as a director. However, if any nominee were to become unable to serve as a director, the Board of Directors may designate a substitute nominee, in which case the persons named as proxies will vote for such substitute nominee.

James T. Treace. Mr. Treace, age 58, has been the Chairman of the Board of the Company since 1999. He has been the President of the J&A Group, LLC, a private investment and consulting company that he founded, since 2000. Mr. Treace was the President of Medtronic Xomed, Inc. from 1999 to 2000, and was the Chairman of the Board, Chief Executive Officer, and President of Xomed Surgical Products, Inc. from 1996 to 1999. Medtronic, Inc. acquired Xomed Surgical Products, Inc., the leader in the market for surgical products used by ear, nose, and throat (“ENT”) surgeons, in 1999 and thereafter changed its name to Medtronic Xomed, Inc. He was the Chairman of the Board, Chief Executive Officer, and President of TreBay Medical Corp., a developer and manufacturer of ENT sinus endoscopy products, from 1993 to 1996. Mr. Treace was the President of Linvatec Corporation from 1990 to 1993, and was the President and Chief Executive Officer of Concept, Inc. from 1981 to 1990. Bristol-Myers Squibb Company acquired Concept, Inc., a leading orthopaedic arthroscopy business, in 1990 and thereafter changed its name to Linvatec Corporation. Mr. Treace is the Chairman of the Board of Kyphon Inc., a public company, and is the uncle of John T. Treace, the Company’s Vice President — Biologics and Extremity Marketing.

F. Barry Bays. Mr. Bays, age 57, has been a director and the President and Chief Executive Officer of the Company since 2000. He has 39 years of experience in the medical device industry. Mr. Bays was the Senior Vice President and Chief Operating Officer of Medtronic Xomed, Inc. and its predecessor, Xomed Surgical Products, Inc., from 1996 to 2000. He was a director and the Vice President and Chief Operating Officer of TreBay Medical Corp. from 1993 to 1996. Mr. Bays was the Executive Vice President and Chief Operating Officer of Linvatec Corporation from 1990 to 1993, and was the Senior Vice President and Chief Operating Officer of its predecessor, Concept, Inc., from 1981 to 1990.

Richard B. Emmitt. Mr. Emmitt, age 59, has been a director of the Company since 1999. He has been a Managing Director of The Vertical Group Inc., an investment management and venture capital firm focused on the medical device industry, since 1989. Mr. Emmitt is a director of American Medical Systems Holdings, Inc. and Micro Therapeutics, Inc., both public companies. He is a director of BioSET, Inc., ev3 Inc., Incumed, Inc., OsteoBiologics, Inc., Solarant Medical, Inc., Velocimed LLC, and Tepha, Inc., all privately held companies.

Laurence Y. Fairey. Mr. Fairey, age 53, has been a director of the Company since January 2004. He is an accomplished medical device executive with 27 years of service to the orthopaedic industry. Mr. Fairey served in several executive capacities at Medtronic Sofamor Danek, Inc., and its predecessor company, Danek Group, Inc., from 1991 to his retirement in 2000, including serving as the Executive Vice President and Chief Financial Officer, the President of International, and, most recently, the President of Neurologics. He held both financial and operational executive positions with Smith & Nephew Richards, Inc., and its predecessor, Richards Medical Company, Inc., from 1973 to 1991.

David D. Stevens. Mr. Stevens, age 50, has been a director of the Company since January 2004. He is the Chairman of the Board and Chief Executive Officer of Accredo Health, Incorporated, a publicly held provider of specialized pharmacy and related services to the biopharmaceutical industry. At Accredo, Mr. Stevens has been its Chief Executive Officer since 1996, a director since 1997, and the Chairman of the Board since 1999. He also has held senior executive positions with Nova Factor, Inc. and Southern Health Systems, Inc., both subsidiaries of Accredo, since 1996 and 1983, respectively. Mr. Stevens is a director of Thomas & Betts Corporation, a public company.

James E. Thomas. Mr. Thomas, age 43, has been a director of the Company since August 2000 and previously was a director from December 1999 to March 2000. Mr. Thomas has been a Managing Partner of Thomas, McNerney & Partners, LLC, a private equity investment partnership focused on the health care industry, since 2001. He was a member of Warburg Pincus LLC, a private investment firm, from 1989 to 2000, where he served as a Managing Director. Mr. Thomas is a director of The Medicines Company, Inc., a public company, as well as several privately held companies.

Thomas E. Timbie. Mr. Timbie, age 46, has been a director of the Company since 2000. He has been the President of Timbie & Company, LLC, a financial consulting firm that he founded, since 2000. Mr. Timbie was the Interim Vice President and Chief Financial Officer of e-dr. Network, Inc., a business-to-business exchange in the optical device market, during 2000. He was the Vice President and Chief Financial Officer of Xomed Surgical Products, Inc. from 1996 to 1999. Mr. Timbie is a director of American Medical Systems Holdings, Inc., Indus International, Inc., and Medical Staffing Network Holdings, Inc., all public companies, as well as one privately held medical device company. Warburg Pincus, one of the Company’s principal stockholders, is a significant stockholder in all these companies.

Elizabeth H. Weatherman. Ms. Weatherman, age 44, has been a director of the Company since 1999. She is a Managing Director and member of Warburg Pincus LLC where she has been a member of the health care group since 1988. Ms. Weatherman is responsible for Warburg Pincus LLC’s medical device investment activities. She is a director of American Medical Systems Holdings, Inc., Kyphon Inc., and Micro Therapeutics, Inc., all public companies, as well as several privately held medical device companies.

Board of Directors’ Recommendation

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE EIGHT NOMINEES FOR DIRECTOR LISTED ABOVE. Each proxy solicited on behalf of the Board of Directors will be voted FOR the election of the eight director nominees unless the stockholder instructs otherwise in the proxy.

PROPOSAL 2 — APPROVAL OF AMENDMENT OF CERTIFICATE OF

INCORPORATION TO CHANGE AUTHORIZED SHARES OF COMMON STOCK

Introduction

The Board of Directors has adopted a resolution proposing an amendment of the Company’s Fourth Amended and Restated Certificate of Incorporation (the “certificate of incorporation”) to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights). The amendment does not increase the total number of authorized shares of common stock, rather it simply confers voting rights on all the authorized shares of common stock. The Company also has 5,000,000 authorized shares of preferred stock, which will not be affected by the amendment.

Background of Non-Voting Common Stock

In December 1999, Warburg, Pincus Equity Partners, L.P. (“WPEP”) led a group of private investors in effecting a recapitalization of the Company. In connection with the recapitalization, the Company issued common stock, preferred stock, and warrants, which together represented 83% of the Company’s equity ownership, as well as subordinated notes to WPEP and three affiliated funds (“Warburg Pincus”).

In July 2001, the Company issued 7,500,000 shares of voting common stock to investors in its initial public offering (the “IPO”). In connection with the IPO, the Company issued 9,926,006 shares of voting common stock and 7,123,344 shares of non-voting common stock to Warburg Pincus upon the conversion of the shares of preferred stock, accrued dividends thereon, and subordinated notes held by Warburg Pincus. The Company issued the shares of non-voting common stock to Warburg Pincus in accordance with a provision in the certificate of incorporation that prohibited WPEP and its affiliates from beneficially owning more than 49% of the outstanding shares of voting common stock. By virtue of its stockholdings, Warburg Pincus beneficially owned 61% of all the outstanding shares of common stock (voting and non-voting) upon the conclusion of the IPO.

In March 2002, the Company, along with certain selling stockholders, completed a secondary offering of 6,900,000 shares of voting common stock, which included 3,450,000 shares issued by the Company. Upon the completion of the secondary offering, Warburg Pincus’ beneficial ownership decreased to 46% of all the outstanding shares of common stock (voting and non-voting). Warburg Pincus thereafter converted all its shares of non-voting common stock into shares of voting common stock and, as a consequence, there no longer were any outstanding shares of non-voting common stock.

Outstanding, Committed, Reserved, and Available Shares of Common Stock

At March 31, 2004, the Company had [33,105,748] outstanding shares of voting common stock, [4,597,724] shares of voting common stock committed to be issued upon the exercise of outstanding options and warrants, and [1,719,575] shares of voting common stock reserved for future issuance under the Company’s equity compensation plans. At such date, there remained [30,576,953] authorized shares of voting common stock available for future issuance by the Company.

At March 31, 2004, the Company had no outstanding shares of non-voting common stock, and all 30,000,000 authorized shares of non-voting common stock were available for future issuance. The Company does not have any present plan or intention of issuing any shares of non-voting common stock in the future.

Text of Amendment

If the proposed amendment is approved by the stockholders, Article IV of the certificate of incorporation will be amended to read as follows:

ARTICLE IV


	The total authorized capital stock of the Corporation shall be 105,000,000 shares consisting of 100,000,000 shares of Common Stock, $.01 par value per share (“Common Stock”), and 5,000,000 shares of Preferred Stock, $.01 par value per share (“Preferred Stock”).

	The Preferred Stock may be issued from time to time in one or more series, each of which series shall have such distinctive designation or title and such number of shares as shall be fixed by the Board of Directors prior to the issuance of any shares thereof. Each such series of Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue of such series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof pursuant to the authority hereby expressly vested in it. The Board of Directors is further authorized to increase or decrease (but not below the number of shares outstanding) the number of shares of any series of Preferred Stock subsequent to the issuance of shares of that series. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status of which they had prior to the adoption of the resolution originally fixing the number of shares of such series. Except as provided in the resolution or resolutions of the Board of Directors creating any series of Preferred Stock or as otherwise provided herein, the shares of Common Stock shall have the exclusive right to vote for the election and removal of directors and for all other purposes.

Effects of Amendment

If the proposed amendment is approved by the stockholders, the Company will continue to have the same number of authorized shares of common stock. The only difference in the Company’s equity capital structure will be that all 100,000,000, rather than only 70,000,000, of the authorized shares of common stock will have voting rights.

The additional authorized shares of common stock with voting rights will be available to the Company for issuance from time to time for various corporate purposes, including private or public sales, acquisitions, stock splits and dividends, and equity compensation plans. The Company does not have any present understanding, arrangement or agreement to issue any additional shares of common stock for any purpose other than pursuant to its outstanding options and warrants and its existing equity compensation plans. Nonetheless, the Company from time to time will continue to consider transactions that would result in the issuance of additional shares of common stock.

The additional authorized shares of common stock with voting rights could have the effect of making it more difficult, and therefore less likely, for a party to gain control of the Company on an unfriendly basis, because the Company could issue such additional shares to a third party that is supportive of the incumbent Board of Directors and management. The Company does not know of any party that is intent on gaining control of the Company and, as a consequence, the Company has no present plan or intention to issue any additional shares of common stock in connection with such a situation.

The proposed amendment does not alter the rights and privileges of the Company’s outstanding shares of common stock or the manner in which the Board of Directors may authorize the issuance of additional shares of common stock or preferred stock. The Company’s stockholders do not have preemptive rights or any other preferential right to purchase any additional shares of common stock.

The Board of Directors believes that the proposed amendment is in the best interests of the Company and its stockholders, insofar as it will provide the Board of Directors with flexibility and will enhance its ability to

respond to corporate opportunities that may arise in the future without the delay of seeking stockholder approval at such time. The Board of Directors will continue to seek stockholder approval for transactions that require such approval under Delaware corporate law, the Company’s certificate of incorporation and bylaws, and the NASD’s listing standards.

Effective Date of Amendment

If the proposed amendment is approved by the stockholders, the Company intends shortly thereafter to file a certificate of amendment to the certificate of incorporation with the office of the Secretary of State of the State of Delaware. The certificate of amendment will become effective upon its filing. The only changes to the certificate of incorporation will be those made to Article IV as shown above.

Board of Directors’ Recommendation

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE AMENDMENT OF THE COMPANY’S CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY’S AUTHORIZED SHARES OF COMMON STOCK FROM 70,000,000 SHARES OF VOTING COMMON STOCK AND 30,000,000 SHARES OF NON-VOTING COMMON STOCK TO 100,000,000 SHARES OF COMMON STOCK (ALL OF WHICH HAVE VOTING RIGHTS), WITHOUT ANY INCREASE IN THE OVERALL NUMBER OF AUTHORIZED SHARES OF COMMON STOCK. Each proxy solicited on behalf of the Board of Directors will be voted FOR the approval of the amendment of the certificate of incorporation unless the stockholder instructs otherwise in the proxy.

PROPOSAL 3 — RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR

General

The Audit Committee of the Board of Directors has selected KPMG LLP (“KPMG”) as the independent auditor to perform the audit of the Company’s consolidated financial statements for 2004. KPMG audited the Company’s consolidated financial statements for 2003 and 2002. KPMG is a registered public accounting firm.

The Board of Directors is asking the stockholders to ratify the selection of KPMG as the Company’s independent auditor for 2004. Although not required by law, the NASD’s listing standards, or the Company’s bylaws, the Board of Directors is submitting the selection of KPMG to the stockholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

Representatives of KPMG are expected to be present at the meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from the Company’s stockholders.

Board of Directors’ Recommendation

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG AS THE COMPANY’S INDEPENDENT AUDITOR FOR 2004. Each proxy solicited on behalf of the Board of Directors will be voted FOR the ratification of the selection of KPMG as the Company’s independent auditor for 2004 unless the stockholder instructs otherwise in the proxy. If the stockholders do not ratify the selection, the matter will be reconsidered by the Audit Committee and the Board of Directors.

Audit and Non-Audit Services

The Audit Committee is directly responsible for the appointment, compensation, and oversight of the Company’s independent auditor. In addition to retaining KPMG to audit the Company’s consolidated financial statements for 2003, the Audit Committee retained KPMG to provide other auditing and advisory services in 2003. The Audit Committee understands the need for KPMG to maintain objectivity and independence in its audits of the Company’s financial statements. The Audit Committee has reviewed all non-audit services provided by KPMG in 2003 and has concluded that the provision of such services was compatible with maintaining KPMG’s independence in the conduct of its auditing functions.

To help ensure the independence of the independent auditor, the Audit Committee has adopted a policy for the pre-approval of all audit and non-audit services to be performed for the Company by its independent auditor. Pursuant to this policy, all audit and non-audit services to be performed by the independent auditor must be approved in advance by the Audit Committee. The Audit Committee may delegate to one or more of its members the authority to grant the required approvals, provided that any exercise of such authority is presented to the full Audit Committee at its next regularly scheduled meeting.

The aggregate fees billed by KPMG for audit and non-audit services provided to the Company in 2003 and 2002 were as follows:


Fees		2003		2002

Audit Fees		$	582,000	$	499,732
Audit-Related Fees			103,000		8,000
Tax Fees:
	Tax Compliance Fees		31,050		35,000
	All Other Tax Fees		177,732		37,769

	Total Tax Fees		208,782		72,769
All Other Fees			—		—

	Total	$	893,782	$	580,501

In the above table, in accordance with the SEC’s definitions and rules, “audit fees” are fees for professional services for the audit of a company’s financial statements included in the annual report on Form 10-K, for the review of a company’s financial statements included in the quarterly reports on Form 10-Q, and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements; “audit-related fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of a company’s financial statements; “tax fees” are fees for tax compliance, tax advice and tax planning; and “all other fees” are fees for any services not included in the first three categories. The Company has adjusted the audit fees billed by KPMG in 2002, compared to the figures reported in last year’s proxy statement, to increase the audit fees by $5,700 and to shift $8,000 related to the audit of an employee benefit plan to the audit-related fees category.

Other Independence Measures

The Company has taken additional steps to ensure the independence of its independent auditor. The Audit Committee requires that the lead and concurring partners assigned to the audit of the Company’s consolidated financial statements are rotated off the independent auditor’s audit engagement at least every five years. The Board of Directors, upon the recommendation of the Audit Committee, also has adopted a policy restricting the hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company’s consolidated financial statements.

Prior Independent Auditor

As previously disclosed, on May 10, 2002, the Board of Directors, upon the recommendation of the Audit Committee, decided to no longer engage Arthur Andersen LLP (“Andersen”) as the Company’s independent auditor, and engaged KPMG to serve as the Company’s independent auditor for 2002.

Andersen’s reports on the Company’s consolidated financial statements for each of the years ended December 31, 2001 and 2000, did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. Andersen’s unqualified report on the Company’s audited consolidated financial statements as of and for the year ended December 31, 2001, was issued in conjunction with the publication of the Company’s 2001 Annual Report and the filing with the SEC of the Company’s annual report on Form 10-K for the year ended December 31, 2001.

During the years ended December 31, 2001 and 2000, and the subsequent interim period through May 10, 2002, there were no disagreements with Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Andersen’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its reports on the Company’s consolidated financial statements for such years.

None of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred within the years ended December 31, 2001 and 2000, or the subsequent interim period through May 10, 2002.

The Company provided Andersen with a copy of the foregoing disclosures and attached a copy of Andersen’s letter to the SEC dated May 10, 2002, stating Andersen’s agreement with such statements as Exhibit 16.1 to the current report on Form 8-K that the Company filed with the SEC on May 13, 2002.

During the years ended December 31, 2001 and 2000, and the subsequent interim period through May 10, 2002, the Company did not consult KPMG regarding (a) either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or (b) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION

Executive Officers and Other Senior Management

Set forth below is certain information concerning the executive officers and other senior management of the Company.


Name	Age		Position(s)

F. Barry Bays		57	President and Chief Executive Officer
John K. Bakewell		42	Executive Vice President and Chief Financial Officer
Brian T. Ennis		49	President — International
Jack E. Parr, Ph.D.		64	Executive Vice President and Chief Scientific Officer
Robert W. Churinetz		52	Senior Vice President — Global Operations
R. Glen Coleman		49	Senior Vice President — U.S. Sales and Marketing
Jason P. Hood		39	Vice President, General Counsel, and Secretary
Jeffrey G. Roberts		45	Vice President — Research and Development
William F. Scott		58	Vice President — U.S. Sales
Warren O. Haggard, Ph.D.		47	Vice President — Advanced Technology
Karen L. Harris		42	Vice President — International Sales and Distribution
Joyce B. Jones		50	Vice President and Treasurer
John T. Treace		32	Vice President — Biologics and Extremity Marketing

F. Barry Bays has been the President and Chief Executive Officer and a director of the Company since 2000. He has 39 years of experience in the medical device industry. Mr. Bays was the Senior Vice President and Chief Operating Officer of Medtronic Xomed, Inc. and Xomed Surgical Products, Inc. from 1996 to 2000. Medtronic, Inc. acquired Xomed Surgical Products, Inc., the leader in the market for surgical products used by ear, nose, and throat (“ENT”) surgeons, in 1999 and thereafter changed its name to Medtronic Xomed, Inc. He was a director and the Vice President and Chief Operating Officer of TreBay Medical Corp., a developer and manufacturer of ENT sinus endoscopy products, from 1993 to 1996. Mr. Bays was the Executive Vice President and Chief Operating Officer of Linvatec Corporation from 1990 to 1993, and was the Senior Vice President and Chief Operating Officer of Concept, Inc. from 1981 to 1990. Bristol-Myers Squibb Company acquired Concept, Inc., a leading orthopaedic arthroscopy business, in 1990 and thereafter changed its name to Linvatec Corporation.

John K. Bakewell has been the Executive Vice President and Chief Financial Officer of the Company since 2000. He was the Chief Financial Officer and Vice President of Finance and Administration of Altra Energy Technologies, Inc., a software and e-commerce solutions provider to the energy industry, from 1998 to 2000. Mr. Bakewell was the Vice President of Finance and Administration and Chief Financial Officer of Cyberonics, Inc., a publicly held medical device manufacturer, from 1993 to 1998. He was the Chief Financial Officer of ZEOS International Ltd., a publicly held manufacturer and direct marketer of personal computers and related products, from 1990 to 1993.

Brian T. Ennis has been the President — International of the Company since 2001. He has 20 years of experience in the medical device industry. Mr. Ennis held several management positions with Stryker Corporation from 1989 to 2000, including service as the Director of Marketing of Stryker Medical, the Vice President and General Manager of Stryker Medical Europe, the Vice President and General Manager of Stryker United Kingdom, and the Vice President of MedSurg Marketing for Stryker Europe, Africa, and Middle East. He was employed by C.R. Bard Corporation from 1982 to 1988, serving in progressively higher sales and marketing positions culminating as the Group Product Manager for the Bard Urological division.

Jack E. Parr, Ph.D., has been the Executive Vice President and Chief Scientific Officer of the Company since 1998. He previously served the Company as the Vice President of Research and Development from 1993 to 1998. Dr. Parr has 24 years of experience in the orthopaedic medical device industry and holds

17 U.S. patents. He is a member of the American Academy of Orthopaedic Surgeons and several other professional associations, a former director and president of the Society of Biomaterials, and a former director of the American Society for Testing and Materials.

Robert W. Churinetz has been the Senior Vice President — Global Operations of the Company since 2001. He previously served the Company as the Vice President of Global Operations from 2000 to 2001, the Vice President of Operations from 1998 to 2000, and the Vice President of Quality and Regulatory Affairs from 1993 to 1998. Mr. Churinetz has 27 years of experience in the medical device industry. Mr. Churinetz was employed by United States Surgical Corporation from 1976 to 1993 in various positions of increasing responsibility, ultimately serving as the Senior Director of Corporate Quality Functions.

R. Glen Coleman has been the Senior Vice President — U.S. Sales and Marketing of the Company since November 2003. He previously served the Company as the Senior Vice President of Marketing from 2001 to November 2003. Mr. Coleman was the Vice President of Marketing for Medtronic Xomed, Inc. and its predecessor, Xomed Surgical Products, Inc., from 1996 to 2000. Mr. Coleman held several management positions at Linvatec Corporation and its predecessor, Concept, Inc., from 1983 to 1996, including serving as the Vice President of Global Marketing in 1996, the Vice President of Sales from 1993 to 1996, the Vice President and General Manager of the Concept Division from 1991 to 1993, and the Vice President of Research and Development from 1989 to 1991.

Jason P. Hood has been a Vice President of the Company since 2002 and its General Counsel and Secretary since 1998. He previously served the Company as Corporate Counsel during 1998. Mr. Hood was an attorney with Sedgwick Noble Lowndes, an international employee benefits consulting firm, from 1997 to 1998. He was associated with the law firm of Glankler Brown, PLLC from 1994 to 1997, where he concentrated his practice in employment law and general civil litigation. Mr. Hood is licensed to practice law in the State of Tennessee.

Jeffrey G. Roberts has been the Vice President — Research and Development of the Company since 2000. He previously served the Company as the Vice President of Product Development in 2000. Mr. Roberts has 20 years of experience in the medical device industry and has been involved in the design, development, and manufacture of many orthopaedic devices, implants, and instruments for both total joint and arthroscopic applications. From 1996 until 2000, he was employed by Aquarius Medical Corporation, a medical device start-up company that was acquired by Kobayashi Pharmaceutical Ltd. of Japan, where he served in various positions of responsibility, including as the Vice President of Research and Development. Mr. Roberts was the President of Arthrotek, Inc., a subsidiary of Biomet Inc., from 1994 to 1996. He held various technical positions, including as the Vice President of Research and Development, with Linvatec Corporation and its predecessor, Concept, Inc., from 1988 to 1994.

William F. Scott has been the Vice President — U.S. Sales of the Company since November 2003. He previously served the Company as the Senior Director of Sales Administration from 2001 to November 2003 and the Senior Director of Regional Sales in 2001. Mr. Scott was the Vice President of Domestic Sales of Medtronic Xomed, Inc. from 1999 to 2001 and the Director of Sales Administration of its predecessor, Xomed Surgical Products, Inc., from 1997 to 1999. He was the Director of Sales of Interpore from 1996 to 1997. Mr. Scott worked in numerous capacities for Smith & Nephew Richards, Inc., and its predecessor, Richards Medical Company, Inc., from 1996 to 1997, most recently as the Vice President of International Sales of ENT.

Warren O. Haggard, Ph.D., has been the Vice President — Advanced Technology of the Company since October 2003. He joined the Company in 1993 and has held various positions of increasing responsibility, most recently serving as the Vice President of Applied Research from April to October 2003 and the Vice President of Research from 1998 to April 2003. Dr. Haggard was employed by Dow Corning Wright, a predecessor company, from 1985 to 1991, where he served initially as a Product Development Engineer and later as a Project Engineer. He worked at Union Carbide Corporation as a Battery Engineer from 1982 to 1985.

Karen L. Harris has been the Vice President — International Sales and Distribution of the Company since 1998. She joined the Company in 1997 as the Vice President of European Business Development.

Ms. Harris was employed by MicroAire Surgical Instruments, Inc. from 1990 to 1997, where she held various positions of increasing responsibility and ultimately was the Director of International Sales and Marketing.

Joyce B. Jones has been the Vice President and Treasurer of the Company since 2002. She joined the Company in 1989 as the Manager of General Accounting and since then has been promoted to various positions of increasing responsibility in accounting and finance, most recently serving as the Vice President of Finance and Controller from 1998 to 2002. Ms. Jones has 20 years of experience in the medical device industry. She was the Corporate Controller of Insituform Technologies, Inc., a publicly held provider of specialized pipeline rehabilitation technologies and services, from 1986 to 1989.

John T. Treace has been the Vice President — Biologics and Extremity Marketing of the Company since January 2003. He previously served the Company as the Senior Director of Biologics Marketing from 2001 to January 2003. Mr. Treace was the Director of Marketing for Medtronic Xomed, Inc., and its predecessor, Xomed Surgical Products, Inc., from 1996 to 2000. He was the Director of Marketing of TreBay Medical Corp. from 1994 to 1996. Mr. Treace is the nephew of James T. Treace, the Company’s Chairman of the Board.

Code of Business Conduct

The Company has adopted a Code of Business Conduct which applies to all directors, officers, employees and agents of the Company and its subsidiaries. The Code of Business Conduct satisfies the SEC’s requirements for a “code of ethics” and the NASD’s requirements for a “code of conduct.” The Code of Business Conduct is posted on the corporate section of the Company’s website at www.wmt.com. The Code of Business Conduct may be waived for any director or officer only by the Board of Directors upon the recommendation of both its Nominating and Corporate Governance Committee and the Company’s Ethics Officer. The Board of Directors has no present intention to permit any waiver of the Code of Business Conduct for any director or officer.

Summary Compensation Table

The table below sets forth summary compensation information for the Company’s Chief Executive Officer in 2003 and each of the four other most highly compensated executive officers of the Company who were serving in such capacities on December 31, 2003.


								Long-Term
								Compensation

				Annual Compensation				Shares of
								Common Stock		All Other
Name and Principal Positions		Year		Salary		Bonus		Underlying Options		Compensation

F. Barry Bays			2003	$	270,000	$	202,500		50,000	$	15,300	⁽¹⁾
	President, Chief Executive		2002		270,000		156,708		75,000		15,300	⁽²⁾
	Officer, and Director		2001		270,000		109,158		109,091		240,300	⁽³⁾

John K. Bakewell			2003		204,275		153,206		20,000		16,500	⁽⁴⁾
	Executive Vice President		2002		195,700		113,570		10,000		18,000	⁽⁵⁾
	and Chief Financial Officer		2001		190,000		59,089		—		97,794	⁽⁶⁾

Brian T. Ennis⁽⁷⁾			2003		212,925		143,724		20,000		112,857	⁽⁸⁾
	President — International		2002		205,025		102,385		10,000		20,400	⁽⁹⁾
			2001		94,697		—		75,000		9,801	⁽¹⁰⁾

Jack E. Parr, Ph.D.			2003		198,275		148,706		12,500		5,972	⁽¹¹⁾
	Executive Vice President		2002		190,650		110,640		7,500		7,035	⁽¹²⁾
	and Chief Scientific Officer		2001		183,450		74,069		23,636		8,805	⁽¹³⁾

Robert W. Churinetz			2003		204,275		137,886		20,000		17,100	⁽¹⁴⁾
	Senior Vice President —		2002		195,700		86,984		10,000		12,600	⁽¹⁵⁾
	Global Operations		2001		189,000		80,585		18,182		5,100	⁽¹⁶⁾


	(1)	Mr. Bays’ other compensation for 2003 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $10,200 in perquisites.

	(2)	Mr. Bays’ other compensation for 2002 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $10,200 in perquisites.

	(3)	Mr. Bays’ other compensation for 2001 consisted of $225,000 to cover the loss of an excise tax and gross-up reimbursement from his previous employer, $5,100 in matching contributions under the Company’s 401(k) plan, and $10,200 in perquisites.

	(4)	Mr. Bakewell’s other compensation for 2003 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $11,400 in perquisites.

	(5)	Mr. Bakewell’s other compensation for 2002 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $12,900 in perquisites.

	(6)	Mr. Bakewell’s other compensation for 2001 consisted of $52,500 to cover the loss of incentive compensation from his previous employer, $5,100 in matching contributions under the Company’s 401(k) plan, and $40,194 in perquisites.

	(7)	Mr. Ennis’ first day of employment with the Company was July 11, 2001.

	(8)	Mr. Ennis’ other compensation for 2003 consisted of $89,457 in reimbursement of his relocation expenses and associated tax gross-up, $5,100 in matching contributions under the Company’s 401(k) plan and $18,300 in perquisites.

	(9)	Mr. Ennis’ other compensation for 2002 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $15,300 in perquisites.


(10)	Mr. Ennis’ other compensation for 2001 consisted of $9,801 in perquisites.

(11)	Dr. Parr’s other compensation for 2003 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $872 in perquisites.

(12)	Dr. Parr’s other compensation for 2002 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $1,935 in perquisites.

(13)	Dr. Parr’s other compensation for 2001 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $3,705 in perquisites.

(14)	Mr. Churinetz’s other compensation for 2003 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $12,000 in perquisites.

(15)	Mr. Churinetz’s other compensation for 2002 consisted of $5,100 in matching contributions under the Company’s 401(k) plan and $7,500 in perquisites.

(16)	Mr. Churinetz’s other compensation for 2001 consisted of $5,100 in matching contributions under the Company’s 401(k) plan.

Stock Option Grants in 2003

The table below sets forth information concerning the stock options grants in 2003 to the executive officers named in the Summary Compensation Table and the potential realizable value of such stock options at assumed annual rates of stock price appreciation for the ten-year terms thereof.



										Potential Realizable
										Value at Assumed
										Annual Rates of Stock
			Percentage of All							Price Appreciation
	Number of Stock		Stock Options			Exercise				for Option Term⁽²⁾
	Options Granted		Granted to			Price Per		Expiration
Name	in 2003		Employees in 2003			Share⁽¹⁾		Date		5%		10%

F. Barry Bays		50,000		3.80	%	$	16.59		3/25/2013	$	521,668	$	1,322,009
John K. Bakewell		20,000		1.52			16.59		3/25/2013		208,667		528,804
Brian T. Ennis		20,000		1.52			16.59		3/25/2013		208,667		528,804
Jack E. Parr, Ph.D.		12,500		0.95			16.59		3/25/2013		130,417		330,502
Robert W. Churinetz		20,000		1.52			16.59		3/25/2013		208,667		528,804


(1)	The exercise price per share of each stock option granted to the named executive officers is equal to the market value of the common stock on the date of grant.

(2)	In accordance with the SEC’s regulations, these dollar figures represent hypothetical gains that could be achieved for the respective stock options if they were exercised at the end of the option term. The gains are based on assumed annual rates of stock price appreciation of 5% and 10% compounded annually from the date that the respective stock options were granted to their expiration date. They do not reflect the Company’s estimates or projections of future prices of the common stock. The gains are net of the stock option exercise price, but do not include deductions for taxes or other expenses associated with the exercise. The actual gains, if any, realized upon stock option exercises will depend upon the future performance of the common stock, the executive’s continued employment with the Company or its subsidiaries, and the dates on which the stock options are exercised. The hypothetical gains shown in the table might not be achieved.

All the stock options granted to the named executive officers were granted under the Company’s Second Amended and Restated 1999 Equity Incentive Plan (the “Equity Incentive Plan”). The Compensation Committee, which administers the Equity Incentive Plan and the Company’s other incentive plans, has general authority to accelerate, extend, or otherwise modify the benefits under the stock options in certain circumstances within overall plan and other limitations. The Compensation Committee has no present intention to exercise that authority with respect to these stock options.

Stock Option Exercises and Values for 2003

The table below sets forth information concerning the number of stock options exercised in 2003 and the value realized upon their exercise by the executive officers named in the Summary Compensation Table and the number and value of their unexercised stock options at December 31, 2003.



									Value of Unexercised
					Number of Unexercised				In-the-Money
					Stock Options at				Stock Options at
	Shares				December 31, 2003				December 31, 2003*
	Acquired		Value
Name	on Exercise		Realized		Exercisable		Unexercisable		Exercisable		Unexercisable

F. Barry Bays		—	$	—		589,476		262,797	$	14,867,600	$	5,200,057
John K. Bakewell		—		—		84,318		54,773		2,159,698		1,072,508
Brian T. Ennis		—		—		40,000		65,000		859,275		1,192,775
Jack E. Parr, Ph.D.		36,054		834,691		13,693		37,525		283,256		696,338
Robert W. Churinetz		15,319		407,882		34,545		47,410		827,880		845,309

In accordance with the SEC’s regulations, an option is “in-the-money” if the fair market value of the underlying security exceeds the exercise price of the option. In the table, the values of the unexercised in-the-money stock options are calculated by multiplying the number of underlying shares of the Company’s common stock by the difference between the fair market value of the shares and the exercise prices of the stock options. For the purposes of the table, the fair market value of the Company’s common stock on December 31, 2003, is deemed to have been $30.40 per share, which is the closing sale price of the common stock reported for transactions effected on the Nasdaq National Market on such date.

Equity Compensation Plan Information

The table on the next page sets forth information regarding the shares of common stock to be issued upon the exercise of the outstanding options and warrants granted under the Company’s equity compensation plans and the shares of common stock remaining available for future issuance under the Company’s equity compensation plans as of December 31, 2003.

Shares of Common

Shares of Common Stock

Weighted-Average

Stock Remaining

to be Issued upon

Exercise Price of

Available for Future

Exercise of Outstanding

Outstanding

Issuance under Equity

Plan Category

Options and Warrants

Compensation Plans

Equity compensation plans approved by security holders

4,587,288

11.67

1,795,019

Equity compensation plans not approved by security holders

—

Total

4,587,288

11.67

1,795,019

The Company’s stockholders have approved the following equity compensation plans: the Equity Incentive Plan; the common stock purchase warrants issued in connection with the Company’s recapitalization in December 1999 (the “Warrants”); and the Company’s 2002 Employee Stock Purchase Plan (the “Stock Purchase Plan”).

As described above, the Company is authorized under the Equity Incentive Plan to grant equity-based awards in the form of stock options, stock appreciation rights, restricted stock, phantom stock units, performance share units, and stock bonuses to the employees (including executive officers), directors, and consultants of the Company and its subsidiaries. The Company is authorized to grant awards under the Equity Incentive Plan for up to 6,767,051 shares of common stock. The Company thus far has granted only stock options and stock bonuses under the Equity Incentive Plan. At December 31, 2003, an aggregate of 797,455 shares of common stock had been issued pursuant to option exercises, options to purchase a total of 4,234,079 shares of common stock were outstanding, the Company had issued 69,688 shares of common stock as stock bonuses, and the Company had paid cash in an amount equivalent to 52,351 shares of common stock to the recipients of the stock bonuses to offset the tax consequences thereof. As a result, at December 31, 2003, there were 1,613,478 remaining shares of common stock available for future awards under the Equity Incentive Plan.

In December 1999, in connection with the recapitalization of the Company, the Company issued to its stockholders Warrants to purchase a total of 727,276 shares of common stock at an exercise price of $4.35 per share. The Warrants are exercisable at any time after issuance and expire five years from the date of issuance. At December 31, 2003, Warrants to purchase an aggregate of 374,067 shares of common stock had been exercised, and there were outstanding Warrants to purchase a total of 353,209 shares of common stock.

The Stock Purchase Plan authorizes the Company to issue shares of common stock to its eligible employees. The Stock Purchase Plan divides the calendar year into two six-month plan periods, one beginning on January 1 and ending on June 30 and the other beginning on July 1 and ending on December 31. Under the Stock Purchase Plan, a participant can choose each plan period to have up to 5% of his or her annual base earnings up to $5,000 withheld to purchase shares of common stock. The purchase price of the common stock is equal to 85% of the lower of its beginning-of-period or end-of-period market price. The Company is authorized to issue up to 200,000 shares of common stock under the Stock Purchase Plan. At December 31, 2003, the Company had issued 18,459 shares of common stock to employees, leaving 181,541 shares of common stock available for future issuance under the Stock Purchase Plan.

Employment Agreements

The Company entered into an employment agreement with F. Barry Bays on January 31, 2004. Mr. Bays is the President and Chief Executive Officer of the Company. The term of his employment under the agreement ends on April 1, 2005. Mr. Bays’ current base salary is $270,000 per year. Mr. Bays is eligible to receive an annual incentive bonus, with a target of 50% of his base salary, based on the attainment of certain performance objectives established by the Compensation Committee. The Compensation Committee will review Mr. Bays’ compensation at least once per year and will make such increases in his base salary and award him such bonuses as it determines are merited based on his performance and as are consistent with the Company’s compensation policies. Mr. Bays is eligible to receive awards such as stock options under the

Equity Incentive Plan and any other plan administered by the Compensation Committee. Mr. Bays is eligible to participate in the Company’s fringe benefit programs, including medical insurance and retirement programs, that are generally provided to executives of the Company from time to time. The agreement imposes customary confidentiality, intellectual property assignment, and non-competition obligations on Mr. Bays.

The Company entered into an employment agreement with John K. Bakewell on December 11, 2003. Mr. Bakewell is the Executive Vice President and Chief Financial Officer of the Company. The term of his employment under the agreement ends on April 1, 2005. Mr. Bakewell’s current base salary is $217,000 per year. Mr. Bakewell is eligible to receive an annual incentive bonus, with a target of 50% of his base salary, based on the attainment of certain performance objectives established by the Compensation Committee. The Compensation Committee will review Mr. Bakewell’s compensation at least once per year and will make such increases in his base salary and award him such bonuses as it determines are merited based on his performance and as are consistent with the Company’s compensation policies. Mr. Bakewell is eligible to receive awards such as stock options under the Equity Incentive Plan and any other plan administered by the Compensation Committee. Mr. Bakewell is eligible to participate in the Company’s fringe benefit programs, including medical insurance and retirement programs, that are generally provided to executives of the Company from time to time. The agreement imposes customary confidentiality, intellectual property assignment, and non-competition obligations on Mr. Bakewell.

The Company entered into an employment agreement with Brian T. Ennis on July 10, 2001. Mr. Ennis is the President — International of the Company. The term of his employment under the agreement ends on July 10, 2004. Mr. Ennis’ current base salary is $223,700 per year. Mr. Ennis is eligible to receive an annual incentive bonus, with a target of 45% of his base salary, based on the attainment of certain performance objectives established by the Compensation Committee. The Compensation Committee will review Mr. Ennis’ compensation at least once per year and will make such increases in his base salary and award him such bonuses as it determines are merited based on his performance and as are consistent with the Company’s compensation policies. Mr. Ennis is eligible to receive awards such as stock options under the Equity Incentive Plan and any other plan administered by the Compensation Committee. Mr. Ennis is eligible to participate in the Company’s fringe benefit programs, including medical insurance and retirement programs, that are generally provided to executives of the Company from time to time. The agreement imposes customary confidentiality, intellectual property assignment, and non-competition obligations on Mr. Ennis.

The employment agreements of Messrs. Bays, Bakewell and Ennis contain the following provisions relating to the termination of their employment with the Company in certain situations:


•	If the employee becomes disabled for a period in excess of six months, he will be entitled to receive from the Company salary continuation pay equal to his base salary from the date of termination until the end of the agreement’s stated term, reduced by any amount that he receives under any Company-maintained disability insurance policy or plan or under Social Security or similar laws.

•	If the Company terminates the employee for “cause” as defined in the agreement, he will not be entitled to receive any salary continuation pay or severance pay from the Company. For purposes of the agreement, the Company would have “cause” to terminate the employee upon (1) the determination by the Board of Directors that the employee has intentionally neglected his duties for an extended period of time; (2) the employee’s death; (3) the determination by the Board of Directors that the employee has engaged or is about to engage in conduct that is materially injurious to the Company; (4) the employee’s having been convicted of a felony; (5) the employee’s participation in activities proscribed by the confidentiality or intellectual property assignment provisions of the agreement; or (6) the employee’s material breach of any other covenant contained in the agreement.

•	If the Company terminates the employee without “cause” as defined in the agreement, (1) he will be entitled to receive from the Company salary continuation pay equal to his base salary and continued coverage under all the Company’s current health benefit and life insurance programs for a period of twelve months following the termination date; (2) in the case of Mr. Ennis only, on the termination date, all the employee’s unvested stock options will automatically vest and be fully exercisable; and (3) in the


	case of Mr. Ennis only, the employee will have one year from the termination date to exercise all his unexercised stock options.

•	In the case of Mr. Ennis only, upon the occurrence of a “change of control” as defined in the agreement, (1) all the employee’s unvested stock options will automatically vest and be fully exercisable, and (2) all the employee’s unexercised stock options will remain exercisable in accordance with their respective terms. For purposes of the agreement, a “change of control” is defined as the first occurrence of, among others, any of the following events:


	•	the acquisition by any individual, entity, or group of beneficial ownership of 50% or more (on a fully diluted basis) of either (1) the then outstanding shares of the Company’s common stock, taking into account certain share equivalents, or (2) the combined voting power of the Company’s then outstanding voting securities that are entitled to vote generally in the election of directors, unless the acquisition (a) is pursuant to an initial public offering by the Company or (b) is effected by the Company, any affiliate of the Company, or any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its affiliates;

	•	the consummation of a reorganization, merger, consolidation, or sale or other disposition of all or substantially all the assets of the Company, unless, following the transaction, (1) all or substantially all the individuals and entities who were the beneficial owners, respectively, of the then outstanding shares of the Company’s common stock, taking into account certain share equivalents, and the Company’s then outstanding voting securities that are entitled to vote generally in the election of directors immediately prior to the transaction continue to beneficially own more than 60%, respectively, of the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities that are entitled to vote generally in the election of directors of the corporation resulting from the transaction (the “new entity”) in substantially the same ownership proportions as prior to the transaction; (2) no unrelated party beneficially owns, directly or indirectly, (a) 50% or more (on a fully diluted basis) of the then outstanding shares of common stock of the new entity, taking into account certain share equivalents, or (b) 50% or more of the combined voting power of the outstanding voting securities of the new entity, except in each case to the extent that such ownership existed prior to the transaction; (3) at least a majority of the members of the board of directors of the new entity were incumbent members of the Board of Directors of the Company at the time of the execution of the initial agreement providing for the transaction; and (4) the employee maintains his position with the new entity;

	•	the sale of at least 80% of the Company’s assets to an unrelated party or the completion of a transaction having a similar effect;

	•	the approval by the Company’s stockholders of a complete liquidation or dissolution of the Company; or

	•	the individuals who constitute the Board of Directors of the Company on the date of the employment agreement, and any other individual who becomes a member of the Board of Directors after the date of the agreement and whose election or nomination was approved by a vote of at least two-thirds of the Company’s then current directors, thereafter cease to constitute at least a majority of the Board of Directors.

Comparison of Total Stockholder Returns

The graph below compares the cumulative total stockholder returns for the period from July 13, 2001 (when trading in the Company’s common stock commenced on the Nasdaq National Market following the Company’s initial public offering) to December 31, 2003, for the Company’s common stock, an index composed of United States companies whose stock is listed on the Nasdaq Stock Market (the “Nasdaq U.S. Companies Index”), and an index consisting of Nasdaq-listed companies in the surgical, medical, and dental instruments and supplies industry (the “Nasdaq Medical Equipment Companies Index”). The graph assumes that $100.00 was invested on July 13, 2001, in the Company’s common stock, the Nasdaq U.S. Companies Index, and the Nasdaq Medical Equipment Companies Index, and that all dividends were reinvested. Total returns for the two Nasdaq indices are weighted based on the market capitalization of the companies included therein. Historic stock price performance is not indicative of future stock price performance. The Company does not make or endorse any prediction as to future stock price performance.

Cumulative Total Stockholder Returns

Based on Reinvestment of $100.00 Beginning on July 13, 2001

(PERFORMANCE GRAPH)


	7/13/2001		12/31/2001		12/31/2002		12/31/2003

Wright Medical Group, Inc.	$	100.00	$	114.70	$	111.80	$	194.70
Nasdaq U.S. Companies Index		100.00		93.50		64.60		96.60
Nasdaq Medical Equipment Companies Index		100.00		104.10		85.20		124.40

Source: Center for Research in Security Prices, University of Chicago Graduate School of Business

OTHER MATTERS

As of the date hereof, the Board of Directors knows of no business that will be presented at the meeting other than the proposals described in this Proxy Statement. If any other proposal properly comes before the stockholders for a vote at the meeting, the proxy holders will vote the shares of common stock represented by proxies that are submitted to the Company in accordance with their best judgment.

ADDITIONAL INFORMATION

Solicitation of Proxies

The Company will solicit proxies on behalf of the Board of Directors by mail, telephone, facsimile or other electronic means or in person. The Company will pay the proxy solicitation costs. The Company will supply copies of the proxy solicitation materials to brokerage firms, banks, and other nominees for the purpose of soliciting proxies from the beneficial owners of the shares of common stock held of record by such nominees. The Company requests that such brokerage firms, banks, and other nominees forward the proxy solicitation materials to the beneficial owners and will reimburse them for their reasonable expenses.

Mailing Address of Principal Executive Office

The mailing address of the Company’s principal executive office is Wright Medical Group, Inc., 5677 Airline Road, Arlington, Tennessee 38002.

Stockholder Proposals for Inclusion in Proxy Statement for 2005 Annual Meeting of Stockholders

To be considered for inclusion in the Company’s proxy statement for the 2005 annual meeting of stockholders, a stockholder proposal must be received by the Company no later than the close of business on December 12, 2004. Stockholder proposals must be sent to Corporate Secretary, Wright Medical Group, Inc., 5677 Airline Road, Arlington, Tennessee 38002. The Company will not be required to include in its proxy statement any stockholder proposal that does not meet all the requirements for such inclusion established by the SEC’s proxy rules and Delaware corporate law.

Other Stockholder Proposals for Presentation at 2005 Annual Meeting of Stockholders

For any proposal that is not submitted for inclusion in the Company’s proxy statement for the 2005 annual meeting of stockholder, but is instead sought to be presented directly at the meeting, the SEC’s rules permit management to vote proxies in its discretion if: (1) the Company receives notice of the proposal before the close of business on February 25, 2005, and advises stockholders in the proxy statement about the nature of the matter and how management intends to vote on such matter; or (2) the Company does not receive notice of the proposal prior to the close of business on February 25, 2005. Notices of intention to present proposals at the 2005 annual meeting of stockholders should be sent to Corporate Secretary, Wright Medical Group, Inc., 5677 Airline Road, Arlington, Tennessee 38002.


	By Order of the Board of Directors,


	Jason P. Hood
	Secretary

Arlington, Tennessee

April , 2004

APPENDIX A

WRIGHT MEDICAL GROUP, INC.

AUDIT COMMITTEE CHARTER

Amended and Restated on February 11, 2004

Purpose

The purpose of the Audit Committee is to oversee the accounting and financial reporting processes of Wright Medical Group, Inc. (the “Company”) and the audits of the Company’s financial statements. In furtherance of this purpose, the Audit Committee shall assist the Board of Directors (the “Board”) of the Company in monitoring and overseeing (1) the integrity of the Company’s financial statements and related disclosures, (2) the qualifications, independence, and performance of the Company’s independent auditor, (3) the performance of the Company’s internal auditing function, and (4) the Company’s compliance with applicable legal requirements and its business conduct policies.

Composition and Qualifications

The Audit Committee shall consist of at least three members. The members of the Audit Committee shall be appointed by the Board, upon the recommendation of the Nominating and Corporate Governance Committee, and may be replaced by the Board.

The members of the Audit Committee shall meet the independence, experience, and other requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), the rules and regulations of the Securities and Exchange Commission (the “Commission”), and the rules of the Nasdaq Stock Market. At least one member of the Audit Committee shall be an “audit committee financial expert” as defined by the Commission.

Meetings

The Audit Committee shall meet as often as it determines, but not less frequently than quarterly. The Audit Committee shall meet periodically with management, the independent auditor, and the head of the internal auditing department in separate executive sessions. The Audit Committee may request any officer or employee of the Company or the Company’s independent auditor or outside counsel to attend any meeting of the Audit Committee or to meet with any of its members or advisors. The Audit Committee shall make regular reports of its meetings to the Board.

Authority and Responsibilities

The Audit Committee shall have the sole authority to appoint or replace the independent auditor. The independent auditor shall report directly to the Audit Committee. The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including the resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.

The Audit Committee shall preapprove all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the exception for de minimis non-audit services described in Section 10A(i)(1)(B) of the Exchange Act and Rule 2-01(c)(7)(i)(C) of Regulation S-X which are approved by the Audit Committee prior to the completion of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services, provided that the decisions of such subcommittee to grant preapprovals shall be presented to the full Audit Committee at its next scheduled meeting.

The Audit Committee shall have the authority, to the extent that it deems necessary or appropriate to carry out its duties, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for the payment of compensation to any

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accounting firm engaged for the purpose of rendering or issuing an audit report or related work or performing other audit, review or attest services for the Company, compensation to any advisors employed by the Audit Committee, and ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its responsibilities.

In addition, the Audit Committee, to the extent that it deems necessary or appropriate, shall:

Oversight of Financial Statements and Related Disclosures


1.	Prior to the filing of the Company’s quarterly report on Form 10-Q, review and discuss with management and the independent auditor the Company’s quarterly financial statements (including the results of the independent auditor’s review of the financial statements) and the Company’s disclosures in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the quarterly report.

2.	Prior to the commencement of the audit of the Company’s annual financial statements, review and discuss with management and the independent auditor the scope, schedule, and staffing of the audit.

3.	Prior to the filing of the Company’s annual report on Form 10-K, review and discuss with management and the independent auditor the Company’s audited annual financial statements (including the results of the independent auditor’s audit of the financial statements) and the Company’s disclosures in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the annual report, and recommend to the Board whether the audited annual financial statements should be included in the annual report.

4.	Discuss with the independent auditor all matters required to be communicated to the Audit Committee under generally accepted auditing standards, including the judgments of the independent auditor with respect to the quality, not just the acceptability, of the Company’s accounting principles and underlying estimates in the financial statements.

5.	Discuss with management and the independent auditor the significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls, and any special steps adopted in light of material internal control deficiencies or weaknesses.

6.	Review and discuss with management and the independent auditor the reports from the independent auditor covering:


	(a)	all critical accounting policies and practices to be used;

	(b)	all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) for policies and practices related to material items that have been discussed with management, including the ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the independent auditor; and

	(c)	other material written communications between the independent auditor and management, including any engagement letter, independence letter, management representation letter, schedule of unadjusted audit differences, listing of adjustments and reclassifications not recorded, management letter, and report on observations and recommendations on internal controls.

Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties with management encountered in performing the audit (such as restrictions on the scope of the independent auditor’s activities or on its access to requested information) and any significant disagreements with management over the application of accounting principles, the basis for management’s accounting estimates, and the disclosures in the financial statements.

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8.	Discuss with the independent auditor any material communications between the audit engagement team and the independent auditor’s national office regarding auditing or accounting issues presented by the engagement.

9.	Discuss with management the Company’s disclosure controls and procedures and its internal control over financial reporting, including management’s most recent evaluation, with the participation of the Company’s chief executive officer and chief financial officer, of (a) the effectiveness of the disclosure controls and procedures as of the end of each fiscal quarter, (b) the effectiveness of the internal control over financial reporting as of the end of each fiscal year, and (c) any change in the internal control over financial reporting that occurred during each fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.


10.	Discuss with management (a) any significant deficiencies and material weaknesses in the design or operation of the Company’s internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting, in each case based on management’s most recent evaluation of the Company’s internal control over financial reporting.

11.	Discuss with management in advance the Company’s earnings press releases and earnings guidance. Discuss with management other financial information that the Company provides to securities analysts, credit rating agencies, and others. The Audit Committee need not discuss in advance each instance in which the Company provides such other financial information; instead, the discussion may take the form of a general discussion of the types of information to be disclosed and the types of presentations to be made.

12.	Discuss with management the Company’s disclosure or release of non-GAAP financial measures commonly referred to as “pro forma” or “adjusted” financial information. The Audit Committee need not discuss in advance each instance in which the Company discloses or releases non-GAAP financial measures; rather, the discussion may take the form of a general discussion of the Company’s use of non-GAAP financial measures in its disclosures and releases.

13.	Discuss with management and the independent auditor the effect of material off-balance sheet arrangements on the Company’s financial statements.

14.	Discuss with management and the independent auditor the Company’s major financial risk exposures and the steps that management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies and guidelines.

15.	Discuss with management and the independent auditor any accounting or other regulatory initiatives, correspondence with governmental or other regulatory agencies, and published reports that raise issues that may have a material effect on the Company’s financial statements.

Oversight of Relationship with Independent Auditor


16.	Obtain and review a report from the independent auditor regarding (a) the independent auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review or peer review of the independent auditor, (c) any material issues raised by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the independent auditor, (d) any steps taken to deal with any issues described in the two preceding clauses, and (e) all relationships between the independent auditor and the Company.

17.	Inquire as to the independence of the independent auditor; obtain from the independent auditor a formal written statement delineating all relationships between the independent auditor and the Company, consistent with Independence Standards Board Standard 1; actively engage in a dialogue with the independent auditor with respect to any disclosed relationships or non-audit services that may impact the

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	objectivity and independence of the independent auditor; and otherwise take such actions as are appropriate to oversee the independence of the independent auditor.


18.	Evaluate the qualifications, performance, and independence of the independent auditor, including considering whether the provision of permitted non-audit services is compatible with maintaining the auditor’s independence. In making this evaluation, the Audit Committee shall taken into account the opinions of management and the internal auditing staff. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.

19.	Review and evaluate the lead partner on the independent auditor’s audit engagement team.

20.	Ensure that the lead, concurring, and other audit partners are rotated off the independent auditor’s audit engagement team as necessary to assure the independence of the independent auditor.

21.	Recommend to the Board a policy for the Company’s hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company to assure the independence of the independent auditor.

22.	Consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditor on a regular basis.

Oversight of Internal Auditing Function


23.	Review and discuss with management, the independent auditor, and the head of the internal auditing department the scope of the internal audits and the personnel on the internal auditing staff.

24.	Review the appointment and replacement of the head of the internal auditing department.

25.	Review the reports to management prepared by the internal auditing staff and management’s responses to such reports.

Oversight of Compliance with Legal Requirements and Business Conduct Policies


26.	Discuss with the Company’s General Counsel (a) any legal matter that may have a material effect on the Company’s financial statements, (b) any instance of material non-compliance with applicable legal requirements, and (c) any instance of material non-compliance with the Company’s business conduct policies.

27.	Obtain from the independent auditor its assurance that Section 10A(b) of the Exchange Act has not been implicated.

28.	Establish procedures for (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and (b) the confidential, anonymous submission by employees of the Company of their concerns regarding questionable accounting or auditing matters.

29.	Review and approve all related party transactions, regardless of the dollar amount thereof, as contemplated in Item 404(a) of Regulation S-K.

Miscellaneous Responsibilities


30.	Prepare the report required by the rules of the Commission to be included in the Company’s annual proxy statement.

31.	Investigate, with the assistance of any advisors that its deems appropriate, any matter brought to its attention that is within the scope of the Audit Committee’s authority and responsibilities.

32.	Review and reassess the adequacy of this Charter on an annual basis and recommend any proposed changes to the Board for approval.

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Limitation of Audit Committee’s Role

While the Audit Committee has the authority, powers, and responsibilities set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with GAAP and applicable legal, accounting, and other requirements. These are the responsibilities of the Company’s management and the independent auditor.

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APPENDIX B

WRIGHT MEDICAL GROUP, INC.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER

Adopted on February 11, 2004

Purpose

The purpose of the Nominating and Corporate Governance Committee (the “Committee”) is to assist the Board of Directors (the “Board”) in overseeing the corporate governance processes of Wright Medical Group, Inc. (the “Company”). In furtherance of this purpose, the Committee shall (1) identify individuals qualified to become Board members, consistent with criteria approved by the Board, and recommend the director nominees to the Board; (2) recommend to the Board the establishment of, and the nominees for membership on, committees of the Board; (3) develop and recommend to the Board the Corporate Governance Principles applicable to the Company; and (4) lead the Board in its annual review of the Board’s performance.

Committee Membership

The Committee shall consist of at least two members. The members of the Committee shall be appointed and may be replaced by the Board. The members of the Committee shall meet the independence requirements of the rules of the Nasdaq Stock Market.

Meetings

The Committee shall meet as often as it determines, but not less frequently than annually. The Committee shall make regular reports to the Board.

Authority and Responsibilities

The Committee shall actively seek individuals qualified to become Board members for recommendation to the Board, consistent with criteria approved by the Board. The Committee shall recommend the director nominees to the Board. The Committee shall have the sole authority to retain and terminate any search firm to be used to identify director candidates and to approve the search firm’s fees and other retention terms. Notwithstanding the foregoing, the Committee’s oversight of director nominations shall not apply in cases where the right to nominate a director legally belongs to a third party.

The Committee shall recommend to the Board the establishment of, and responsibilities of, various committees of the Board and make recommendations concerning membership on Board committees and the rotation of committee chairs.

The Committee shall develop and recommend to the Board the Corporate Governance Principles applicable to the Company, review and reassess the adequacy of the Corporate Governance Principles on at least an annual basis, and recommend any proposed changes to the Board for approval.

The Committee shall assist the Board in conducting an annual self-evaluation to determine whether it and its committees are functioning effectively. To this end, the Committee shall receive comments from all directors and report annually to the Board with an assessment of the Board’s performance.

The Committee shall review and reassess the adequacy of this Charter on an annual basis and recommend any proposed changes to the Board for approval.

Schedule for Initial Discharge of Authority and Responsibilities

The Committee shall begin discharging its authority and responsibilities in accordance with the following schedule: (1) the development of Corporate Governance Principles — upon the adoption of this Charter; (2) the oversight of director nominations and the making of recommendations for Board committee assignments — as of the Company’s 2004 annual meeting of stockholders; and (3) leading the Board’s annual self-evaluation and reassessing this Charter — in 2005.

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(WMG LOGO)


Wright Medical Group, Inc.	5677 Airline Road, Arlington, Tennessee 38002	901-867-9971	www.wmt.com

April , 2004

Dear Stockholder:

It is a great pleasure to have this opportunity to provide you with our 2003 Annual Report and the Proxy Statement for our 2004 Annual Meeting of Stockholders. The Annual Report discusses our performance in 2003 as well as our business strategy for the future. The Proxy Statement provides you with information relating to the business to be conducted at our annual meeting on May 13, 2004.

YOUR VOTE IS IMPORTANT!

You can submit your proxy in one of two ways:


1.	Call toll-free 1-800-PROXIES (1-800-776-9437) on a touch-tone telephone at any time and follow the instructions on the reverse side; or

2.	Complete, sign, date, and return your proxy card in the accompanying envelope.

Thank you for your continued interest in, and ownership of, Wright Medical Group, Inc.


	Sincerely,


	F. Barry Bays
	President and Chief Executive Officer

---------------------------------------------------------------------------

PRELIMINARY COPY

PROXY WRIGHT MEDICAL GROUP, INC. PROXY

2004 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 13, 2004

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The 2004 Annual Meeting of Stockholders of Wright Medical Group, Inc. (the “Company”) will be held at the Doubletree Hotel Memphis located at 5069 Sanderlin Avenue, Memphis, Tennessee, on May 13, 2004, beginning at 3:30 p.m. (central time). The undersigned hereby acknowledges receipt of the combined Notice of 2004 Annual Meeting of Stockholders and Proxy Statement dated April , 2004, accompanying this proxy, to which reference is hereby made for further information regarding the meeting and the matters to be considered and voted on by the stockholders at the meeting.

The undersigned hereby appoints F. Barry Bays, John K. Bakewell, and Jason P. Hood, and each of them, attorneys and agents, with full power of substitution, to vote, as the undersigned’s proxy, all the shares of common stock of the Company owned of record by the undersigned as of the record date and otherwise to act on behalf of the undersigned at the meeting and any postponement or adjournment thereof, in accordance with the instructions set forth herein and with discretionary authority with respect to any other business, not known or determined at the time of the solicitation of this proxy, that properly comes before such meeting or any postponement or adjournment thereof.

The undersigned hereby revokes any proxy heretofore given and directs said attorneys and agents to vote or act as indicated on the reverse side hereof.

(Continued and to be signed on the reverse side)

2004 ANNUAL MEETING OF STOCKHOLDERS

WRIGHT MEDICAL GROUP, INC.

May 13, 2004

PROXY VOTING INSTRUCTIONS


MAIL —	Sign, date and mail your proxy card in the envelope provided as soon as possible.

-OR -

TELEPHONE — Please call toll-free 1-800-PROXIES (1-800-776-9437) from any touch-tone telephone and follow the instructions. Have your control number and proxy card available when you call.


COMPANY NUMBER
ACCOUNT NUMBER

l Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone. l

---------------------------------------------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSALS.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE. x


1.	To elect eight directors to serve on the Board of Directors of the Company for a term of one year.

o FOR ALL NOMINEES

o WITHHOLD AUTHORITY FOR ALL NOMINEES

o FOR ALL NOMINEES EXCEPT (See instructions below)


Nominees:	O James T. Treace	O Laurence Y. Fairey	O Thomas E. Timbie
	O F. Barry Bays	O David D. Stevens	O Elizabeth H. Weatherman
	O Richard B. Emmitt	O James E. Thomas


	INSTRUCTION:	To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee from whom you wish to withhold your vote as shown here: l


2.	To approve the amendment of the Company’s certificate of incorporation to change the Company’s authorized shares of common stock from 70,000,000 shares of voting common stock and 30,000,000 shares of non-voting common stock to 100,000,000 shares of common stock (all of which have voting rights), without any increase in the overall number of authorized shares of common stock.

o FOR o AGAINST o ABSTAIN


3.	To ratify the selection of KPMG LLP as the Company’s independent auditor for 2004.

o FOR o AGAINST o ABSTAIN

With respect to any other item of business that properly comes before the meeting, the proxy holders are authorized to vote the undersigned’s shares in accordance with their best judgment.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY AND WILL BE VOTED IN ACCORDANCE WITH THE UNDERSIGNED’S INSTRUCTIONS SET FORTH HEREIN. IF NO
INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED “FOR” EACH OF THE PROPOSALS DESCRIBED ABOVE.

To change the address on your account, please check the box at right and indicate your new address in the address space provided above. Please note that changes to the registered name(s) on the account may not be submitted via this method. o



	Signature of Stockholder

	Date:


	Signature of Stockholder

	Date:

	Note: Please sign exactly as your name or names appear on this proxy. If the shares are held jointly, each holder should sign. If signing as executor, administrator, attorney, trustee or guardian, please indicate your full title as such. If the shares are held by a corporation, partnership or limited liability company, please sign the full name of the entity by the duly authorized officer, partner or member, respectively.