UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant  o

PRELIMINARY PROXY STATEMENT, SUBJECT TO COMPLETION, DATED SEPTEMBER [•], 2018.

[•], 2018

Dear Fellow Stockholder:

On August 29, 2018, K2M Group Holdings, Inc. (“K2M”) entered into a definitive merger agreement to be acquired by Stryker Corporation (“Stryker”). Pursuant to and subject to the terms and conditions of the merger agreement, a direct or indirect wholly owned subsidiary of Stryker will be merged with and into K2M and K2M will survive the merger as a direct or indirect wholly owned subsidiary of Stryker.

If the merger is completed, our stockholders will have the right to receive $27.50 in cash, without interest, subject to any applicable withholding taxes, for each share of common stock, par value $0.001 per share, of K2M (“K2M common stock”) that they own immediately prior to the effective time of the merger (other than stockholders that have properly exercised and perfected and not lost or withdrawn their appraisal rights under Delaware law with respect to such shares).

You are cordially invited to attend a special meeting of our stockholders to be held in connection with the proposed merger on [•], 2018 at [•], Eastern Time, at our offices at 600 Hope Parkway SE, Leesburg, Virginia 20175. At the special meeting, stockholders will be asked to consider and vote on a proposal to adopt the merger agreement and approve the transactions contemplated thereby, including the merger (the “merger proposal”). Approval of the merger proposal requires the affirmative vote of the holders of a majority of the issued and outstanding shares of K2M common stock entitled to vote thereon.

The K2M board of directors has determined that it is in the best interest of K2M and the K2M stockholders that K2M enter into the merger agreement and has approved and declared advisable the merger agreement and the merger. The K2M board of directors made its determination after consideration of a number of factors more fully described in this proxy statement. The K2M board of directors unanimously recommends that you vote “FOR” the merger proposal.

The merger consideration of $27.50 per share represents a 26% premium over the closing price of $21.82 per share of K2M common stock on August 29, 2018, the last trading day prior to the public announcement of the proposed merger and a 30% premium over the 30-day volume-weighted average price of $21.15 per share of K2M common stock on August 28, 2018.

At the special meeting, K2M stockholders will also be asked to vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid to K2M’s named executive officers by K2M based on or otherwise relating to the merger, as required by the rules adopted by the Securities and Exchange Commission, and a proposal to approve an adjournment of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional votes for the approval of the merger proposal if there are insufficient votes to approve the merger proposal at the time of the special meeting. The K2M board of directors unanimously recommends that you vote “FOR” each of these proposals.

The merger cannot be completed unless K2M stockholders holding a majority of the outstanding shares of K2M common stock entitled to vote thereon approve the merger proposal. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting. If you intend to attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. The failure to vote on the merger proposal will have the same effect as a vote “AGAINST” this proposal.

The obligations of K2M and Stryker to complete the merger are subject to the satisfaction or waiver of certain conditions. The accompanying proxy statement contains detailed information about Stryker, the special meeting, the merger agreement and the merger.

Thank you for your confidence in K2M.

Yours truly,
   

Eric D. Major
Chairman of the Board of Directors, Chief Executive Officer and President

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the merger, passed upon the merits of the merger agreement or the merger or determined if the accompanying proxy statement is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated [•], 2018 and, together with the enclosed form of proxy, is first being mailed to K2M stockholders on or about [•], 2018.

K2M Group Holdings, Inc.
600 Hope Parkway SE
Leesburg, Virginia 20175

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE SUBMIT A PROXY OVER THE INTERNET OR BY TELEPHONE PURSUANT TO THE INSTRUCTIONS CONTAINED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SUBMITTED. IF YOU DO NOT SUBMIT YOUR PROXY, INSTRUCT YOUR BROKER HOW TO VOTE YOUR SHARES OR VOTE IN PERSON AT THE SPECIAL MEETING ON THE MERGER PROPOSAL, IT WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THIS PROPOSAL.

Approval of the merger proposal requires the affirmative vote of the holders of a majority of shares of K2M common stock outstanding at the close of business on the record date and entitled to vote thereon.

Approval of each of the named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of a majority of the voting power of shares of K2M common stock present or represented by proxy at the special meeting and entitled to vote on the matter.

Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

If your shares are held by a broker, bank or other nominee and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting. Please also bring to the special meeting your account statement evidencing your beneficial ownership of K2M common stock as of the record date. All stockholders and proxy holders who attend the special meeting must also bring photo identification.

The proxy statement, of which this notice forms a part, provides a detailed description of the merger agreement and the merger. We urge you to read the proxy statement, including any documents incorporated by reference, and its annexes carefully and in their entirety. If you have any questions concerning the merger or the proxy statement, would like additional copies of the proxy statement or need help voting your shares of K2M common stock, please contact K2M’s proxy solicitor, Broadridge Financial Solutions, Inc. (“Broadridge”).

TABLE OF CONTENTS

SUMMARY

This summary highlights information contained elsewhere in this proxy statement and may not contain all the information that is important to you with respect to the merger and the other matters being considered at the special meeting of K2M stockholders. We urge you to carefully read the remainder of this proxy statement, including the attached annexes, and the other documents to which we have referred you. For additional information on K2M included in documents incorporated by reference into this proxy statement, see the section entitled “Where You Can Find More Information” beginning on page 104. We have included page references in this summary to direct you to a more complete description of the topics presented below.

All references to “K2M,” “the Company,” “we,” “us,” or “our” in this proxy statement refer to K2M Group Holdings, Inc., a Delaware corporation; all references to “Stryker” refer to Stryker Corporation, a Michigan corporation; all references to “Merger Sub” refer to Austin Merger Sub Corp., a Delaware corporation and a direct or indirect wholly owned subsidiary of Stryker; all references to “K2M common stock” refer to the common stock, par value $0.001 per share, of K2M; all references to the “Board” refer to the board of directors of K2M; all references to the “merger” refer to the merger of Merger Sub with and into K2M with K2M surviving as a direct or indirect wholly owned subsidiary of Stryker; unless otherwise indicated or as the context otherwise requires, all references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of August 29, 2018, and as may be amended from time to time, by and among Stryker, Merger Sub and K2M, a copy of which is included as Annex A to this proxy statement. K2M, following the completion of the merger, is sometimes referred to in this proxy statement as the “surviving corporation.”

The Parties

K2M (see page 23)

K2M was formed in 2004 and began working with leading spine surgeons for the purpose of designing, developing and commercializing innovative and proprietary complex spine technologies and techniques. We are a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. Our complex spine products are used by spine surgeons to treat some of the most difficult and challenging spinal pathologies, such as deformity (primarily scoliosis), trauma and tumor.

Our common stock is traded on the Nasdaq Global Select Market (“NASDAQ”) under the ticker symbol KTWO. Our headquarters are located at 600 Hope Parkway SE, Leesburg, Virginia 20175 and our telephone number is (703) 777-3155. Our corporate web address is www.k2m.com.

Stryker (see page 23)

Stryker is one of the world’s leading medical technology companies and, together with its customers, is driven to make healthcare better. Stryker offers innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes.

The common stock of Stryker is listed on the New York Stock Exchange under the ticker symbol SYK. Stryker is a Michigan corporation with principal executive offices located at 2825 Airview Boulevard, Kalamazoo, Michigan 49002, telephone number (269) 385-2600.

For additional information, visit www.stryker.com. The information provided on the Stryker website is not part of this proxy statement and is not incorporated in this proxy statement by reference hereby or by any other reference to Stryker’s website provided in this proxy statement.

Merger Sub (see page 24)

Merger Sub is a Delaware corporation and a direct or indirect wholly owned subsidiary of Stryker, with principal executive offices located at 2825 Airview Boulevard, Kalamazoo, Michigan 49002, telephone number (269) 385-2600. It was formed for the purpose of engaging in the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will merge with and into K2M, with Merger Sub ceasing to exist and K2M surviving as a direct or indirect wholly owned subsidiary of Stryker.

The Special Meeting

Date, Time and Place (see page 25)

The special meeting of K2M stockholders (the “special meeting”) is scheduled to be held at K2M’s offices at 600 Hope Parkway SE, Leesburg, Virginia 20175 on [•], 2018 at [•], Eastern Time.

Purpose of the Special Meeting (see page 25)

At the special meeting, K2M stockholders will be asked to consider and vote on the following proposals:

The Board has determined that it is in the best interest of the K2M stockholders to enter into the merger agreement and has approved and declared advisable the merger agreement and the merger. The Board unanimously recommends that the K2M stockholders vote “FOR” the merger proposal, “FOR” the named executive officer merger-related compensation proposal and “FOR” the adjournment proposal.

K2M stockholders must vote to approve the merger proposal as a condition for the merger to occur. If the K2M stockholders fail to approve the merger proposal by the requisite vote, the merger will not occur.

Record Date; Stockholders Entitled to Vote (see page 25)

Only holders of K2M common stock at the close of business on [•], 2018, the record date for the special meeting (the “record date”), will be entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of the special meeting. A list of such stockholders will be available during normal business hours at our principal executive offices at 600 Hope Parkway SE, Leesburg, Virginia 20175 at least 10 days prior to the special meeting and on the day of the special meeting for examination by any K2M stockholder registered on our stock ledger as of the record date for any purpose germane to the special meeting. At the close of business on the record date, [•] shares of K2M common stock were issued and outstanding.

Holders of K2M common stock are entitled to one vote for each share of K2M common stock they own at the close of business on the record date.

Quorum (see page 26)

The presence at the special meeting, in person or by proxy, of the holders of a majority of the voting power of shares of K2M common stock issued and outstanding at the close of business on the record date and entitled to vote at the special meeting will constitute a quorum. There must be a quorum for business to be conducted at the special meeting. Failure of a quorum to be represented at the special meeting will necessitate an adjournment or postponement of the special meeting and may subject K2M to additional expense. If no quorum is present at the special meeting, the chairperson of the meeting or the stockholders holding a majority in voting power of shares of K2M common stock, present in person or by proxy and entitled to vote at the special meeting, may adjourn the special meeting.

Required Vote (see page 26)

The approval of the merger proposal requires the affirmative vote of the holders of a majority of shares of K2M common stock outstanding at the close of business on the record date and entitled to vote thereon. If you do not vote, it will have the same effect as a vote “AGAINST” the merger proposal.

Approval of each of the named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of a majority of the voting power of shares of K2M common stock present or represented by proxy at the special meeting and entitled to vote on the matter.

Attendance and Voting at the Special Meeting (see page 27)

If your shares are registered directly in your name with our transfer agent, you are considered a “stockholder of record” and you may vote your shares in person at the special meeting or by submitting a proxy by mail, over the internet or by telephone. If you plan to attend the special meeting and wish to vote in person, you will be given a ballot at the special meeting. Although K2M offers four different methods for shares to be voted at the special meeting, K2M encourages you to submit a proxy over the internet or by telephone, as K2M believes they are the most convenient, cost-effective and reliable methods of causing your shares to be voted. If you choose to submit a proxy over the internet or by telephone, there is no need for you to mail back your proxy card.

If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a vote instruction form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. If you are a beneficial owner and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting. Beneficial owners should also bring a copy of an account statement reflecting their ownership of K2M common stock as of the record date. All K2M stockholders and proxyholders who attend the special meeting must also bring photo identification.

If you are a current or former K2M employee with shares of K2M common stock received through the Employee Stock-Purchase Plan (“ESPP”) and held in street name by Morgan Stanley, you may receive one proxy card that covers the shares held for you by Morgan Stanley, as well as any other shares of K2M common stock registered directly in your name. You may submit one proxy for all of these shares via the internet, by telephone or by mail in the same manner as described above for registered stockholders. If you submit voting instructions for your ESPP shares by 11:59 p.m., Eastern Time, on [•], 2018, Morgan Stanley will vote the shares as you have directed. If voting instructions are not received in time, Morgan Stanley will not vote your shares for any proposal.

K2M recommends that you submit a proxy or submit your voting instructions as soon as possible, even if you are planning to attend the special meeting, to ensure that your shares will be represented and voted at the special meeting. If you return an executed proxy and do not indicate how you wish to vote with regard to a particular proposal, your shares of K2M common stock will be voted “FOR” such proposal.

Solicitation of Proxies (see page 28)

The Board is soliciting your proxy, and K2M will bear the cost of soliciting proxies. Broadridge has been retained to assist with the solicitation of proxies. Broadridge will be paid approximately $6,500 and will be reimbursed for its reasonable out-of-pocket expenses for these and related services in connection with the special meeting. Solicitation initially will be made by mail. Forms of proxies and proxy materials may also be distributed through brokers, banks and other nominees to the beneficial owners of shares of K2M common stock, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or other electronic medium by Broadridge or, without additional compensation, by certain of K2M’s directors, officers and employees.

Adjournments and Postponements (see page 28)

In addition to the merger proposal and the named executive officer merger-related compensation proposal, K2M stockholders are also being asked to approve the adjournment proposal, which will enable the adjournment of the special meeting for the purpose of soliciting additional votes in favor of the merger proposal if there are not sufficient votes at the time of the special meeting to approve the merger proposal. If no quorum is present at the special meeting, the chairperson of the meeting or the stockholders holding a majority in voting power of shares of K2M common stock, present in person or by proxy and entitled to vote at the special meeting, may adjourn the special meeting to another place, date or time. Assuming a quorum is present, the affirmative vote of holders of a majority of the voting power of shares of K2M common stock present and entitled to vote on the adjournment proposal will be required to approve the adjournment proposal. The chairman of the meeting also has the power to adjourn the special meeting at any time, whether or not there is a quorum present. In addition, the special meeting could be postponed before it commences. If the special meeting is adjourned or postponed for the purpose of soliciting additional votes on the merger proposal, stockholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you submit a proxy and do not indicate how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal.

K2M may not change the record date for the special meeting without Stryker’s prior written consent and may not adjourn or otherwise postpone or delay the special meeting without Stryker’s prior written consent; however, K2M may adjourn or postpone the special meeting without Stryker’s consent (i) if as of the time for which the special meeting is originally scheduled (as set forth in this proxy statement) there are insufficient shares of K2M common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the special meeting, (ii) after consultation with Stryker, to the extent necessary to ensure the distribution of any supplement or amendment to the proxy statement required by law within a reasonable amount of time in advance of the special meeting, (iii) if there are not sufficient votes at the time for which the special meeting is originally scheduled to constitute a quorum or to obtain approval of the merger proposal, or (iv) after consultation with Stryker, to the extent otherwise required to comply with applicable law; provided that K2M may only effect up to two such adjournments or postponements under the foregoing clauses (i) and (iii) (in the aggregate) for a period up to ten business days each and so long as no change in the record date for the special meeting would be required in case of such postponement.

The Merger

Structure of the Merger (see page 30)

Upon the terms and subject to the satisfaction or waiver of the conditions set forth in the merger agreement and in accordance with the DGCL, at the effective time of the merger (the “effective time”), Merger Sub will merge with and into K2M, the separate corporate existence of Merger Sub will cease and K2M will survive the merger as a direct or indirect wholly owned subsidiary of Stryker. As a result of the merger, each share of K2M common stock issued and outstanding immediately prior to the effective time (other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal) will be automatically cancelled and converted into the right to receive the merger consideration.

Merger Consideration — What Stockholders Will Receive in the Merger (see page 30)

Upon the terms and subject to the conditions of the merger agreement, at the effective time, K2M stockholders will have the right to receive $27.50 in cash, without interest and less any applicable withholding taxes, for each share of K2M common stock that they own immediately prior to the effective time (other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal).

Effects on K2M if the Merger Is Not Completed (see page 31)

If the merger proposal is not approved by K2M stockholders or if the merger is not consummated for any other reason, K2M stockholders will not receive any payment for their shares of K2M common stock in connection with the merger. Instead, K2M will remain a public company, our common stock will continue to be listed and traded on the NASDAQ and registered under the Exchange Act, and we will continue to file periodic reports with the SEC. Under specified circumstances, upon termination of the merger agreement, K2M may be required to pay Stryker a termination fee of $47.6 million, as described under “The Merger Agreement—Termination Fee” beginning on page 84.

Furthermore, if the merger is not consummated, and depending on the circumstances that would have caused the merger not to be consummated, it is likely that the price of our common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Treatment of K2M Equity Awards (see page 30)

The merger agreement provides that outstanding equity-based awards issued under K2M’s equity incentive plans will be treated as set forth below:

Stock Options. Each option to purchase shares of K2M common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the excess, if any, of the merger consideration over the per share exercise price of such option, and (B) the number of shares of K2M common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the merger consideration will be cancelled without payment.

Restricted Stock Awards and Restricted Stock Unit Awards. Each K2M restricted stock award and K2M restricted stock unit award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the merger consideration and (B) the number of shares of K2M common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law.

Effect Upon Employee Stock Purchase Plan (see page 30)

The current offering period under the ESPP will end as scheduled on December 31, 2018, or, if earlier, four trading days prior to the effective time. K2M will, prior to the effective time, take all actions necessary to terminate the ESPP effective as of the closing and to provide that (a) K2M will not commence a new offering period, (b) no new participants will be permitted into the ESPP and (c) existing participants may not increase their elections with respect to the current offering period. Participants who purchased shares of K2M common stock under the ESPP will receive the same merger consideration in the same manner as other K2M stockholders for each such share of K2M common stock that such participant holds as of the effective time.

Recommendation of the Board and Reasons for the Merger (see page 39)

After consideration of various factors, the Board determined that it is in the best interest of K2M and the K2M stockholders that K2M enter into the merger agreement, approved and declared advisable the merger and the merger agreement, resolved that the merger agreement be submitted for consideration by the K2M stockholders at the special meeting of the K2M stockholders and recommended that the K2M stockholders adopt the merger agreement and approve the transactions contemplated thereby. A description of factors considered by the Board in reaching its decision to adopt the merger agreement can be found in “The Merger—Recommendation of the Board and Reasons for the Merger” beginning on page 42.

The Board unanimously recommends that K2M stockholders vote:

Opinion of Piper Jaffray & Co. (see page 44)

On August 29, 2018, Piper Jaffray & Co. (“Piper Jaffray”) delivered its oral opinion to the Board (which was subsequently confirmed in writing by delivery of Piper Jaffray’s written opinion dated the same date) that, as of August 29, 2018 and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be received by the holders of K2M common stock issued and outstanding immediately prior to the effective time (other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal) pursuant to the merger agreement, was fair, from a financial point of view, to such holders.

The full text of the written opinion of Piper Jaffray, dated August 29, 2018, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken

by Piper Jaffray in rendering its opinion, is attached as Annex B. Piper Jaffray provided its opinion for the information and assistance of the Board in connection with its consideration of the merger. The Piper Jaffray opinion is not a recommendation as to how any holder of K2M common stock should vote with respect to the merger or any other matter. Pursuant to an engagement letter between K2M and Piper Jaffray, K2M has agreed to pay Piper Jaffray a transaction fee, currently estimated to be approximately $21.4 million, which is contingent upon the consummation of the merger, except for $1 million of such fee which has been earned by Piper Jaffray for rendering its fairness opinion and is creditable against the total fee. The opinion fee was not contingent upon the consummation of the merger or the conclusions reached in Piper Jaffray’s opinion.

Interests of K2M’s Executive Officers and Directors in the Merger (see page 54)

When considering the recommendation of the Board that you vote “FOR” the merger proposal, you should be aware that, aside from their interests as K2M stockholders, K2M’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of other K2M stockholders generally. The Board was aware of such interests during its deliberations on the merits of the merger and in deciding to recommend that K2M stockholders vote “FOR” the merger proposal.

With regard to our directors serving on the Board (other than Mr. Eric D. Major and Dr. John P. Kostuik, whose interests are as executive officers), these interests relate to the impact of the transaction on the directors’ outstanding equity awards (which consist of restricted stock and stock options) and the provision of indemnification and insurance arrangements pursuant to the merger agreement and K2M’s certificate of incorporation and bylaws, which reflect that such directors may be subject to claims arising from their service on the Board.

With regard to our executive officers, these interests include the possible receipt of the following types of payments and benefits that may be triggered by or otherwise relate to the merger, assuming the merger occurred on September 11, 2018 and, where applicable, the executives’ employment was terminated by us without “cause” or, in some cases, by the executive for “good reason” (each as defined below) on September 11, 2018:

Other Interests (see page 59)

On August 29, 2018, in contemplation of the merger, Stryker entered into an offer letter with Eric Major, K2M’s Chief Executive Officer and President, to serve as President of Stryker’s Spine division, beginning on, and subject to the occurrence of, the closing date of the merger, as further described in “The Merger—Other Interests” beginning on page 59. As of the date of this proxy statement, other than the arrangements discussed in this proxy statement, none of our executive officers has entered into any agreement with Stryker regarding employment with, or compensation from, the surviving corporation or Stryker on a going-forward basis following the completion of the merger although it is possible that additional agreements regarding going-forward employment could be reached prior to closing.

Effect of the Merger on K2M’s Convertible Notes (see page 31)

Under the terms of K2M’s 4.125% convertible senior notes due 2036 (the “2036 Convertible Notes”) and K2M’s 3.00% convertible senior notes due 2025 (the “2025 Convertible Notes” and, together with the 2036 Convertible Notes, the “Convertible Notes”), from and after the effective time of the merger, the Convertible Notes will no longer be convertible on the basis of K2M common stock and will instead be convertible into the cash consideration paid pursuant to the merger.

Under the terms of the Convertible Notes, the merger will constitute both a Fundamental Change and Make-Whole Fundamental Change. As a result, holders of the Convertible Notes will be permitted to choose (i) to convert their Convertible Notes at a temporarily increased conversion rate, (ii) to require K2M to buy back their Convertible Notes for a price equal to their principal amount plus accrued but unpaid interest to, but not including, the repurchase date or (iii) to continue holding their Convertible Notes; provided, however, that holders of the 2025 Convertible Notes will not have the right to require K2M to buy back their 2025 Convertible Notes if the cash consideration such holder would receive upon conversion of their 2025 Convertible Notes would exceed what they would receive upon a repurchase of their 2025 Convertible Notes in connection with such Fundamental Change.

If holders elect to convert their Convertible Notes in connection with the merger, the conversion rate will be temporarily increased (as set forth in the respective indentures governing the Convertible Notes) based upon (x) the date on which the merger is consummated and (y) the per share merger consideration provided for in the merger agreement.

Financing of the Merger (see page 60)

The consummation of the merger is not subject to any financing conditions. We anticipate that the total amount of funds necessary to consummate the merger and the related transactions, not including fees and expenses, will be approximately $1.40 billion, including the estimated funds needed to (i) pay our stockholders the merger consideration due to them under the merger agreement; (ii) make payments in respect of outstanding K2M stock options, K2M restricted stock awards and K2M restricted stock unit awards pursuant to the merger agreement; and (iii) pay the outstanding net indebtedness of K2M, including the consideration payable to holders of the outstanding Convertible Notes. We understand that Stryker expects to use cash and other available funds to fund the merger.

Regulatory Clearances and Approvals Required for the Merger (see page 60)

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), we cannot complete the merger until we have given notification and furnished information to the Federal Trade Commission (the “FTC”) and the Antitrust Division of the Department of Justice (the “DOJ”), and until the applicable waiting period has expired or has been terminated. On September 13, 2018, K2M and Stryker each filed a premerger notification and report form under the HSR Act, as a result of which the applicable waiting period would expire on October 15, 2018, at 11:59 p.m., Eastern Time, unless otherwise earlier terminated or extended by the antitrust authorities.

In addition, pursuant to conditions to the consummation of the merger set forth in the merger agreement, the parties are seeking governmental antitrust or merger control approvals in specified countries.

Generally under the merger agreement, each of K2M, Stryker and Merger Sub is required to use reasonable best efforts to satisfy the closing conditions relating to required antitrust and regulatory consents, subject to certain limitations, as further described in “The Merger—Regulatory Clearances and Approvals Required for the Merger” beginning on page 60.

While we have no reason to believe it will not be possible to obtain regulatory approvals in a timely manner, there is no certainty that these approvals will be obtained.

Material U.S. Federal Income Tax Consequences of the Merger (see page 61)

The exchange of K2M common stock for cash in the merger will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state and local and other tax laws. You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 61 and consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Appraisal Rights (see page 61)

If the merger is consummated, stockholders are entitled to appraisal rights under the DGCL, in connection with the merger, provided that such stockholders meet all of the conditions and follow all of the requirements set forth in Section 262 of the DGCL. This means that stockholders who do not wish to accept the $27.50 per share merger consideration and meet all of the conditions set forth in Section 262 of the DGCL are entitled to seek appraisal of fair value of their shares of K2M common stock as of the effective time determined by the Delaware Court of Chancery and to receive payment based on that valuation in lieu of the merger consideration. The ultimate amount determined by the Delaware Court of Chancery in an appraisal proceeding to be the fair value per share of K2M common stock as of the effective time may be less than, equal to or more than the $27.50 per share merger consideration that a stockholder would otherwise receive under the merger agreement if the merger is consummated.

To exercise appraisal rights, a stockholder of record must deliver a written demand for appraisal to K2M before the vote is taken on the merger proposal, such stockholder must not vote, in person or by proxy, in favor of the merger proposal, such stockholder must continue to hold the shares of K2M common stock of record from the date of making the demand for appraisal through the effective time, and such stockholder must otherwise follow the procedures prescribed by Section 262 of the DGCL. A stockholder’s failure to follow exactly the procedures specified under the

DGCL may result in the loss of such stockholder’s appraisal rights. See “The Merger—Appraisal Rights” beginning on page 61 and the text of Section 262 of the DGCL reproduced in its entirety as Annex C to this proxy statement. If you hold your shares of K2M common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, because the demand for appraisal rights must be made by the record holder, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for such bank broker or other nominee to make a demand for appraisal on your behalf. Stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly. Stockholders also should be aware that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the DGCL.

Expected Timing of the Merger

Assuming timely receipt of regulatory approvals and satisfaction of other closing conditions, we anticipate completing the merger in the fourth quarter of 2018. However, the merger is subject to various regulatory clearances and approvals and other conditions, and it is possible that factors outside of the control of K2M or Stryker could result in the merger being completed at a later time, or not at all. There may be a substantial amount of time between the special meeting and the completion of the merger. We expect to complete the merger promptly following the receipt of all required clearances and approvals and the satisfaction or, to the extent permitted, waiver of the other conditions to the consummation of the merger.

No Solicitation; Company Acquisition Proposals (see page 74)

From and after the date of the merger agreement until the earlier of the effective time or the date, if any, on which the merger agreement is terminated by its terms, except as expressly permitted in connection with a Company Acquisition Proposal or Company Superior Proposal (each as defined in the merger agreement), K2M is generally not permitted to (and will not permit its subsidiaries and its and their respective affiliates and representatives to):

However, if K2M receives, at any time following the date of the merger agreement and prior to approval of the merger proposal by K2M stockholders at the special meeting, a bona fide written Company Acquisition Proposal that did not result from a breach of the non-solicitation and related provisions of the merger agreement and the Board

determines in good faith, after consultation with K2M’s financial advisors and outside legal counsel, that (i) such proposal constitutes or could reasonably be expected to lead to or result in a Company Superior Proposal and (ii) the failure to take the action described in the immediately following clause (x) or (y) would be inconsistent with the Board’s fiduciary duties under applicable law, then K2M may (x) furnish information concerning its business, properties or assets to the third party making such Company Acquisition Proposal pursuant to an acceptable confidentiality agreement and (y) negotiate and participate in discussions and negotiations with such third party concerning the Company Acquisition Proposal.

Before obtaining the required stockholder approval, the Board, in response to a Company Superior Proposal received by K2M or the Board that did not result from a breach of the non-solicitation and related provisions of the merger agreement, may authorize and cause K2M to effect a Company Adverse Recommendation Change and terminate the merger agreement, and concurrently with such termination enter into a definitive agreement providing for such Company Superior Proposal (subject to satisfaction of K2M’s termination fee obligations described below).

Conditions to the Merger (see page 82)

Each party’s obligation to effect the merger is subject to the satisfaction or, to the extent permitted by law, waiver of various conditions, including the following:

The respective obligations of Stryker and Merger Sub to effect the merger is subject to the satisfaction or, to the extent permitted, waiver of the following additional conditions:

The obligation of K2M to effect the merger is subject to the satisfaction or, to the extent permitted by law, waiver of the following additional conditions:

Termination (see page 83)

The merger agreement can be terminated under the following circumstances:

Termination Fee and Expenses Generally (see page 84)

If the merger agreement is terminated under specified circumstances, K2M may be required to pay a termination fee to Stryker of $47.6 million, including if Stryker terminates due to a Company Adverse Recommendation Change or if K2M terminates due to entering into a definitive agreement with respect to a Company Superior Proposal.

If we fail to pay Stryker the termination fee within the specified time period, we will be required to reimburse Stryker’s reasonable out-of-pocket costs and expenses incurred in connection with any action taken to collect payment of such amounts.

Except for the termination fee, out-of-pocket expenses and monetary damages payable by Stryker under the circumstances described above, whether or not the merger is completed, we and Stryker are each responsible for all of such party’s respective costs and expenses incurred in connection with the merger and the other transactions contemplated by the merger agreement. We are not required to pay the applicable termination fee on more than one occasion.

Specific Performance (see page 85)

The parties to the merger agreement are entitled (in addition to any other remedy to which they may be entitled in law or equity) to an injunction, specific performance or other equitable relief to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement.

Indemnification of Directors and Officers; Insurance (see page 81)

Prior to the effective time, K2M is required to or, if K2M is unable to, Stryker will cause the surviving corporation as of or after the effective time to, purchase a 6-year prepaid “tail” policy, with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under K2M’s existing policies of directors’ and officers’ liability insurance and fiduciary liability insurance, with respect to matters arising on or before the effective time (including in connection with the merger agreement and the transactions or actions contemplated by the merger agreement), subject to certain limitations. If K2M or the surviving corporation for any reason fail to obtain such “tail” insurance policies prior to, as of or after the effective time, Stryker is required to, for a period of 6 years from the effective time, cause the surviving corporation to maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by K2M with respect to matters arising on or before the effective time, subject to certain limitations.

Delisting and Deregistration of K2M Common Stock (see page 61)

As promptly as practicable following the completion of the merger, K2M common stock will be delisted from the NASDAQ and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Market Prices of K2M Common Stock (see page 90)

K2M common stock is listed on the NASDAQ under the symbol “KTWO”. On August 29, 2018, the last trading day prior to the public announcement of the proposed merger, the closing price per share of K2M common stock on the NASDAQ was $21.82. The closing price of the K2M common stock on the NASDAQ on [•], 2018, the most recent practicable date prior to the filing of this proxy statement, was $[•] per share. You are encouraged to obtain current market prices of K2M common stock in connection with voting your shares of K2M common stock.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following are brief answers to certain questions that you may have regarding the merger, the special meeting and the proposals being considered at the special meeting. We urge you to carefully read the remainder of this proxy statement because the information in this section does not provide all the information that might be important to you with respect to the merger and the special meeting. Additional important information is also contained in the annexes attached to this proxy statement and the documents referred to or incorporated by reference into this proxy statement.

Whether or not you plan to attend the meeting, we urge you to submit a proxy to vote to ensure your vote is counted. You may still attend the meeting and vote in person if you have already submitted a proxy. Please choose only one method to cast your vote by proxy. We encourage you to vote by submitting a proxy over the internet or by telephone, both of which are convenient, cost-effective and reliable alternatives to returning a proxy card by mail. If you return your signed proxy card to us or vote by submitting your proxy by telephone or over the internet before the special meeting, and you do not subsequently revoke your proxy, we will vote your shares as you direct in such proxy.

If you return an executed proxy and do not indicate how you wish to vote with regard to a particular proposal, your shares of K2M common stock will be voted in favor of such proposal.

If you are the beneficial owner of shares held in “street name,” you will have to follow the instructions provided by your broker, bank or other nominee to change or revoke your voting instructions provided to such broker, bank or other nominee.

For the named executive officer merger-related compensation proposal and the adjournment proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Each of the named executive officer merger-related compensation proposal and the adjournment proposal requires for its approval the affirmative vote of the holders of a majority of the voting power of shares of K2M common stock present or represented by proxy at the special meeting and entitled to vote on the matter. As a result, abstentions will be counted for purposes of determining whether a quorum is present and, assuming a quorum is present, will have the same effect as a vote against the named executive officer merger-related compensation proposal and the adjournment proposal. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee on how to vote your shares of K2M common stock will result in such shares not being counted for purposes of determining the presence of a quorum and will have no effect on the outcome of the named executive officer merger-related compensation proposal or the adjournment proposal.

Each K2M restricted stock award and K2M restricted stock unit award outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the merger consideration and (B) the number of shares of K2M common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law.

Participants who purchased shares of K2M common stock under the ESPP will receive the same merger consideration in the same manner as other K2M stockholders for each such share of K2M common stock that such participant holds as of the effective time.

Broadridge Financial Solutions, Inc.
51 Mercedes Way
Edgewood, NY 11717

or

K2M Group Holdings, Inc.
Attention: Investor Relations
ir@k2m.com

If your broker, bank or other nominee holds your shares, you should also call your broker, bank or other nominee for additional information.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The proxy statement and the attached annexes contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We intend for these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws relating to forward-looking statements. These forward-looking statements include statements relating to the expected timing, completion and effects of the proposed merger, as well as other statements representing management’s beliefs about, future events, transactions, strategies, operations and financial results, including, without limitation, our expectations with respect to the costs and other anticipated financial impacts of the merger; future financial and operating results of K2M; K2M’s plans, objectives, expectations and intentions with respect to future operations and services; required approvals to complete the merger by our stockholders and by governmental regulatory authorities, and the timing and conditions for such approvals; the stock price of K2M prior to the consummation of the merger; and the satisfaction of the closing conditions to the proposed merger. Such forward-looking statements often contain words such as “assume,” “will,” “anticipate,” “believe,” “predict,” “project,” “potential,” “contemplate,” “plan,” “forecast,” “estimate,” “expect,” “intend,” “is targeting,” “may,” “should,” “would,” “could,” “goal,” “seek,” “hope,” “aim,” “continue” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are made based upon management’s current expectations and beliefs and are not guarantees of future performance. Such forward-looking statements involve numerous assumptions, risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. Our actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others, those risks and uncertainties described in any of our filings with the SEC. Certain other factors which may impact our business, financial condition or results of operations or which may cause actual results to differ from such forward-looking statements are discussed or included in our periodic reports filed with the SEC and are available on our website at www.k2m.com under “Investor Relations.” You are urged to carefully consider all such factors. Although it is believed that the expectations reflected in such forward-looking statements are reasonable and are expressed in good faith, such expectations may not prove to be correct and persons reading this proxy statement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only to expectations as of the date of this proxy statement. We do not undertake or plan to update or revise forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this proxy statement, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. If we make any future public statements or disclosures which modify or impact any of the forward-looking statements contained in or accompanying this proxy statement, such statements or disclosures will be deemed to modify or supersede such statements in this proxy statement.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those suggested by our forward-looking statements. These risks and uncertainties include (1) with respect to the merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, including in circumstances in which we would be required to pay a termination fee of $47.6 million; the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions contemplated by the merger agreement; risks related to disruption of management’s attention from K2M’s ongoing business operations due to the transactions contemplated by the merger agreement; the effect of the announcement of the proposed merger on K2M’s relationships with its customers, employees, operating results and business generally; the risk that the proposed merger will not be consummated in a timely manner; risks that the proposed merger disrupts our current plans and operations or affects our ability to retain or recruit key employees; the risk that our stock price may decline significantly if the merger is not consummated; the fact that under the terms of the merger agreement, we are unable to solicit other Company Acquisition Proposals during the pendency of the merger; the nature, cost and outcome of any litigation and other legal proceedings, including any such proceedings related to the merger and instituted against us and others; the fact that receipt of the all-cash merger consideration would be taxable to our stockholders that are treated as U.S. holders for United States federal income tax purposes; the fact that our stockholders would forgo the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent public company; and (2) with respect to our business, economic conditions adversely affecting our business or results or the viability of our supply base; risks associated with non-U.S. operations, including economic and political uncertainty in some regions, adversely affecting our business, results or financial condition; the unsuccessful implementation of our current expansion efforts adversely impacting our

business or results; any developments related to antitrust investigations adversely affecting our financial condition, results, cash flows or reputation; pricing pressures from our customers adversely affecting our profitability; global competition adversely affecting our sales, profitability or financial condition; any disruption in our information technology systems adversely impacting our business and operations; any shortage of supplies causing a production disruption for any customers or us; the loss of any of our largest customers or a significant amount of their business, or a significant decline in their production levels, adversely affecting us; strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations impacting our results; our contingent liabilities and tax matters causing us to incur losses or costs; any inability to protect our intellectual property rights adversely affecting our business or our competitive position; commodity inflationary pressures adversely affecting our profitability or supply base; costs or adverse effects on our business, reputation or results from governmental regulations; work stoppages or other labor issues at our facilities or those of our customers or others in our supply chain adversely affecting our business, results or financial condition; any increase in the expense of our pension and other postretirement benefits or the funding requirements of our pension plans reducing our profitability and other risks and uncertainties set forth in K2M’s Annual Report on Form 10-K for fiscal year ended December 31, 2017 and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K under Item 1A “Risk Factors”.

THE PARTIES TO THE MERGER

K2M Group Holdings, Inc.

K2M Group Holdings, Inc.
600 Hope Parkway SE
Leesburg, Virginia 20175
(703) 777-3155

K2M was formed in 2004 and began working with leading spine surgeons for the purpose of designing, developing and commercializing innovative and proprietary complex spine technologies and techniques.

We are a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. Our complex spine products are used by spine surgeons to treat some of the most difficult and challenging spinal pathologies, such as deformity (primarily scoliosis), trauma and tumor.

Our products primarily consist of implants, disposables and instruments which are typically marketed and sold to hospitals for use by spine surgeons. As of December 31, 2017, our product portfolio contained 99 product lines that are used in complex spine, MIS and degenerative surgeries, enabling us to effectively compete in the $10.8 billion global spinal surgery market. We believe many of our products offer simplified surgical techniques and promote improved clinical outcomes for patients, although their quality, safety and efficacy are not yet supported by long-term clinical data.

Our common stock is traded on the NASDAQ the ticker symbol KTWO. Our headquarters are located at 600 Hope Parkway SE, Leesburg, Virginia 20175 and our telephone number is (703) 777-3155. Our corporate web address is www.k2m.com.

For additional information about K2M included in documents incorporated by reference into this proxy statement, see the section entitled “Where You Can Find More Information” on page 96.

Stryker Corporation

Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
(269) 385-2600

Stryker is one of the world’s leading medical technology companies and, together with its customers, is driven to make healthcare better. Stryker offers innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes.

Stryker’s products are sold in over 85 countries through company-owned subsidiaries and branches, as well as third-party dealers and distributors, and include implants used in joint replacement and trauma surgeries; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment and intensive care disposable products; neurosurgical, neurovascular and spinal devices; as well as other products used in a variety of medical specialties. In the United States most of Stryker’s products are marketed directly to doctors, hospitals and other healthcare facilities.

The common stock of Stryker is listed on the New York Stock Exchange under the ticker symbol SYK. Stryker is a Michigan corporation with principal executive offices located at 2825 Airview Boulevard, Kalamazoo, Michigan 49002, telephone number (269) 385-2600.

For additional information, visit www.stryker.com. The information provided on the Stryker website is not part of this proxy statement and is not incorporated in this proxy statement by reference hereby or by any other reference to Stryker’s website provided in this proxy statement.

Merger Sub

Austin Merger Sub Corp.
c/o Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
(269) 385-2600

Merger Sub is a Delaware corporation and a direct or indirect wholly owned subsidiary of Stryker, with principal executive offices located at 2825 Airview Boulevard, Kalamazoo, Michigan 49002, telephone number (269) 385-2600. It was formed for the purpose of engaging in the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will merge with and into K2M, with Merger Sub ceasing to exist and K2M surviving as a direct or indirect wholly owned subsidiary of Stryker. All of the outstanding shares of capital stock of Merger Sub is, and as of the effective time of the merger will be, owned directly or indirectly by Stryker.

THE SPECIAL MEETING

This proxy statement is being provided to the K2M stockholders as part of a solicitation by the Board of proxies for use at the special meeting to be held at the time and place specified below, and at any properly convened meeting following an adjournment or postponement of the special meeting.

Date, Time and Place

The special meeting is scheduled to be held at K2M’s offices at 600 Hope Parkway SE, Leesburg, Virginia 20175 on [•], 2018 at [•], Eastern Time.

Purpose of the Special Meeting

At the special meeting, K2M stockholders will be asked to consider and vote on the following proposals:

K2M stockholders must approve the merger proposal as a condition to the completion of the merger. If the K2M stockholders fail to approve the merger proposal, the merger will not occur. The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote to approve the merger proposal. Accordingly, a stockholder may vote to approve the merger proposal and vote not to approve the named executive officer merger-related compensation proposal, and vice versa. Because the vote on the named executive officer merger-related compensation proposal is only advisory in nature, it will not be binding on K2M, Stryker, Merger Sub or the surviving corporation. Accordingly, because K2M is contractually obligated to pay such merger-related compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the merger proposal is approved and the closing occurs, regardless of the outcome of the advisory vote.

Recommendation of the K2M Board of Directors

The Board has determined that it is in the best interest of K2M and the K2M stockholders that K2M enter into the merger agreement and has approved and declared advisable the merger agreement and the merger. A description of factors considered by the Board in reaching its decision to approve and declare advisable the merger agreement can be found in “The Merger—Recommendation of the Board and Reasons for the Merger” beginning on page 39.

The Board unanimously recommends that the K2M stockholders vote “FOR” the merger proposal, “FOR” the named executive officer merger-related compensation proposal and “FOR” the adjournment proposal.

The merger proposal must be approved as a condition for the merger to occur. If the K2M stockholders fail to approve the merger proposal by the requisite vote, the merger will not occur.

Record Date; Stockholders Entitled to Vote

Only holders of K2M common stock at the close of business on [•], 2018, the record date for the special meeting, will be entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of the special meeting. At the close of business on the record date, [•] shares of K2M common stock were issued and outstanding and entitled to vote at the special meeting. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 600 Hope Parkway SE, Leesburg, Virginia 20175, during regular business hours for a period of at least 10 days before the special meeting and at the place of the special meeting during the meeting.

Holders of K2M common stock are entitled to one vote for each share of K2M common stock they own at the close of business on the record date.

Quorum

The presence at the special meeting, in person or by proxy, of the holders of a majority of the voting power of shares of K2M common stock issued and outstanding at the close of business on the record date and entitled to vote at the meeting will constitute a quorum. There must be a quorum for business to be conducted at the special meeting. If no quorum is present at the special meeting, the chairperson of the meeting or the stockholders holding a majority in voting power of shares of K2M common stock, present in person or by proxy and entitled to vote at the special meeting, may adjourn the special meeting to another place, date or time. Failure of a quorum to be represented at the special meeting will necessitate an adjournment or postponement of the special meeting and may subject K2M to additional expense.

If you submit a properly executed proxy card or submit your proxy over the internet or by telephone, even if you abstain from voting, your shares will be counted as present for purposes of determining whether a quorum exists at the special meeting. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee on how to vote your shares of K2M common stock will result in such shares not being counted for purposes of determining the presence of a quorum.

Required Vote

The approval of the merger proposal requires the affirmative vote of the holders of a majority of the voting power of shares of K2M common stock issued and outstanding at the close of business on the record date and entitled to vote thereon.

Approval of each of the named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of the holders of a majority of shares of K2M common stock present or represented by proxy at the special meeting and entitled to vote on the matter.

Abstentions

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting by marking “ABSTAIN” on such holder’s ballot or proxy.

Abstentions will not count as votes cast for or against the merger proposal, but will still count for the purpose of determining whether a quorum is present. However, the vote to approve the merger proposal is based on the total number of shares of K2M common stock outstanding on the record date. As a result, if you abstain, it will have the same effect as if you vote “AGAINST” the approval of the merger agreement.

Each of the named executive officer merger-related compensation proposal and the adjournment proposal requires for its approval the affirmative vote of the holders of a majority of the voting power of shares of K2M common stock present or represented by proxy at the special meeting and entitled to vote on the matter. As a result, abstentions will be counted for purposes of determining whether a quorum is present and, assuming a quorum is present, will have the same effect as a vote “AGAINST” the named executive officer merger-related compensation proposal and the adjournment proposal.

If no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will be voted “FOR” (i) approval of the merger proposal, (ii) approval of the named executive officer merger-related compensation proposal and (iii) approval of the adjournment proposal.

Failure to Vote and Broker Non-Votes

If you are a stockholder of record and you do not sign and return your proxy card by mail or submit a proxy over the internet or by telephone or if you do not vote in person at the special meeting, your shares will not be voted at the special meeting, will not be counted as present in person or by proxy at the special meeting and will not be counted as present for purposes of determining whether a quorum exists.

Broker non-votes are shares held in “street name” by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or nominee does not have discretionary voting power on such proposal. Under NASDAQ rules, brokers, banks and other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. Accordingly, if a beneficial owner of shares of K2M common stock held

in “street name” does not give voting instructions to the broker, bank or other nominee with respect to at least one of the three proposals, then those shares will not be counted as present in person or by proxy at the special meeting. Because all three proposals are non-discretionary matters, it is not expected that there will be any broker non-votes at the special meeting; however, it is possible that a broker non-vote could occur with respect to one or more of the proposals to the extent that voting instructions are given to a broker, bank or other nominee with respect to at least one but less than all of the proposals. Because the vote to approve the merger proposal is based on the total number of shares of K2M common stock outstanding on the record date, if you fail to issue voting instructions to your broker, bank or other nominee or if a broker non-vote occurs with respect to the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal.

To the extent that you fail to issue voting instructions to your broker, bank or other nominee or a broker non-vote occurs with respect to the named executive officer merger-related compensation proposal or the adjournment proposal, it will have no effect on the outcome of such proposals because such shares are not deemed present and entitled to vote on the matters under Delaware law.

Voting by K2M’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of K2M and their affiliates were entitled to vote [•] shares of K2M common stock, or approximately [•]% of the shares of K2M common stock issued and outstanding on that date. K2M’s directors and executive officers have informed us that they intend to vote their shares in favor of the merger proposal and the other proposals to be considered at the special meeting, although none of K2M’s directors and executive officers is obligated to do so.

Attendance and Voting at the Special Meeting

Stockholders who are entitled to vote at the special meeting may attend the special meeting. Beneficial owners who have not obtained a proxy from the holder of record but who wish to attend the special meeting should bring a copy of an account statement reflecting their ownership of K2M common stock as of the record date. All stockholders and proxyholders should bring photo identification.

If your shares are registered directly in your name with our transfer agent (Equiniti Trust Company), you are considered a “stockholder of record” and there are four methods by which you may vote your shares or have your shares voted at the special meeting. You may attend the special meeting and vote your shares in person, or you may cause your shares to be voted by authorizing the persons named as proxies on the proxy card to vote your shares at the special meeting by returning the executed proxy card by mail or by voting through the internet or by telephone. If you choose to submit a proxy to vote your shares over the internet or by telephone, there is no need for you to mail back your proxy card. Although K2M offers four different voting methods, K2M encourages you to submit a proxy to vote either over the internet or by telephone to ensure that your shares are represented and voted at the special meeting.

to be voted with regard to a particular proposal, your shares of K2M common stock will be voted in favor of such proposal. If you return your proxy card without a signature, your shares will not be counted as present at the special meeting and cannot be voted. If you submit a proxy by mail, you must return the proxy with sufficient time to be received by the time of the special meeting.

If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a vote instruction form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. If you are a beneficial owner and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting.

If you are a current or former K2M employee with shares of K2M common stock received through the ESPP and held in street name by Morgan Stanley, you may receive one proxy card that covers the shares held for you by Morgan Stanley, as well as any other shares of K2M common stock registered directly in your name. You may submit one proxy for all of these shares via the internet, by telephone or by mail in the same manner as described above for registered stockholders. If you submit voting instructions for your ESPP shares by 11:59 p.m., Eastern Time, on [•], 2018, Morgan Stanley will vote the shares as you have directed. If voting instructions are not received in time, Morgan Stanley will not vote your shares for any proposal.

Revocation of Proxies

You can change or revoke your proxy at any time before the final vote at the special meeting. If you are the record holder of your shares, you may revoke your proxy by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to K2M or by sending a written notice of revocation to K2M, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by K2M before the special meeting. Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by our Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m. Eastern Time on [•], 2018.

If you are the beneficial owner of shares held in “street name,” you should contact your broker, bank or other nominee with questions about how to change or revoke your voting instructions.

Solicitation of Proxies

The Board is soliciting your proxy, and K2M will bear the cost of soliciting proxies. Broadridge has been retained to assist with the solicitation of proxies. Broadridge will be paid approximately $6,500 and will be reimbursed for its reasonable out-of-pocket expenses for these and related services in connection with the special meeting. Solicitation initially will be made by mail. Forms of proxies and proxy materials may also be distributed through brokers, banks and other nominees to the beneficial owners of shares of K2M common stock, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or other electronic medium by Broadridge or, without additional compensation, by certain of K2M’s directors, officers and employees.

Adjournments and Postponements

In addition to the merger proposal and the named executive officer merger-related compensation proposal, K2M stockholders are also being asked to approve the adjournment proposal, which will enable the adjournment of the special meeting for the purpose of soliciting additional votes in favor of the merger proposal if there are not sufficient votes at the time of the special meeting to approve the merger proposal. If no quorum is present at the special meeting,

the chairperson of the meeting or the stockholders holding a majority in voting power of the shares of K2M common stock, present in person or by proxy and entitled to vote at the special meeting, may adjourn the special meeting to another place, date or time. If a quorum is present, then the holders of a majority of the voting power of shares of K2M common stock present and entitled to vote on the adjournment proposal will be required to approve the adjournment proposal. The chairman of the meeting also has the power to adjourn the special meeting at any time, whether or not there is a quorum present. In addition, the special meeting could be postponed before it commences. If the special meeting is adjourned or postponed for the purpose of soliciting additional votes, stockholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you return a signed proxy and do not indicate how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal. If the Board fixes a new record date for the adjourned meeting, or if the adjournment is for more than 30 days, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the adjourned meeting as of such new record date. In addition, the Board could postpone the special meeting before it commences. If the special meeting is adjourned or postponed to solicit additional proxies, stockholders who have already submitted their proxies will be able to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

The Board unanimously recommends a vote “FOR” the adjournment proposal, if necessary or appropriate, to solicit additional proxies.

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting to be Held on [•], 2018

The proxy statement is available at http://www.proxyvote.com.

Questions

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact Broadridge, our proxy solicitor, or K2M:

Broadridge Financial Solutions, Inc.
51 Mercedes Way
Edgewood, NY 11717

or

K2M Group Holdings, Inc.
Attention: Investor Relations
ir@k2m.com

THE MERGER

The discussion of the merger in this proxy statement is qualified in its entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex A and hereby incorporated by reference into this proxy statement.

Structure of the Merger

Subject to the terms and conditions of the merger agreement and in accordance with the DGCL, at the effective time, Merger Sub will merge with and into K2M, the separate corporate existence of Merger Sub will cease and K2M will survive the merger as a direct or indirect wholly owned subsidiary of Stryker.

Merger Consideration — What Stockholders Will Receive in the Merger

Upon the terms and subject to the conditions of the merger agreement, at the effective time, each outstanding share of K2M common stock (other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal) will be automatically converted into the right to receive $27.50 in cash, without interest and less any applicable withholding taxes. After the merger is completed, holders of K2M common stock will have only the right to receive a cash payment in respect of their shares of K2M common stock, and will no longer have any rights as holders of K2M common stock, including voting or other rights. Shares of K2M common stock held by us or by Stryker, Merger Sub or any of K2M’s or Stryker’s other direct or indirect wholly owned subsidiaries will be cancelled at the effective time.

Treatment of K2M Equity Awards

The merger agreement provides that outstanding equity-based awards issued under K2M’s equity incentive plans will be treated as set forth below:

Options. Under the merger agreement, each option to purchase shares of K2M common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the excess, if any, of the merger consideration over the per share exercise price of such option, and (B) the number of shares of K2M common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the merger consideration will be cancelled without payment. Any consideration with respect to K2M options will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Restricted Stock Awards and Restricted Stock Unit Awards. The merger agreement also provides that each K2M restricted stock award and K2M restricted stock unit award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the merger consideration and (B) the number of shares of K2M common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Any consideration with respect to K2M restricted stock awards and restricted stock unit awards will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Effect Upon Employee Stock-Purchase Plan

The current offering period under the ESPP will end as scheduled on December 31, 2018, or, if earlier, four trading days prior to the effective time. K2M will, prior to the effective time of the merger, take all actions necessary to terminate the ESPP effective as of the effective time of the merger and to provide that (a) K2M will not commence a new offering period, (b) no new participants will be permitted into the ESPP and (c) existing participants may not increase their elections with respect to the current offering period. Participants who purchased shares of K2M common stock under the ESPP will receive the same merger consideration in the same manner as other K2M stockholders for each such share of K2M common stock that such participant holds as of the effective time.

Effect of the Merger on K2M’s Convertible Notes

As of [•], 2018, approximately $50 million aggregate principal amount of 2036 Convertible Notes and $75 million aggregate principal amount of the 2025 Convertible Notes were outstanding. Under the terms of the Convertible Notes, from and after the effective time of the merger, the Convertible Notes will no longer be convertible on the basis of K2M common stock and will instead be convertible into the cash consideration paid pursuant to the merger. Pursuant to the terms of the respective indentures governing the Convertible Notes, K2M and the trustee for each series of Convertible Notes will enter into supplemental indentures providing for such changes to the conversion right. The Convertible Notes will remain obligations of K2M following the merger (until their conversion, repurchase, maturity or other cancellation).

Under the terms of the Convertible Notes, the merger will constitute both a Fundamental Change and Make-Whole Fundamental Change. As a result, holders of the Convertible Notes will be permitted to choose (i) to convert their Convertible Notes at a temporarily increased conversion rate, (ii) to require K2M to buy back their Convertible Notes for a price equal to their principal amount plus accrued but unpaid interest to, but not including, the repurchase date or (iii) to continue holding their Convertible Notes; provided, however, that holders of the 2025 Convertible Notes will not have the right to require K2M to buy back their 2025 Convertible Notes if the cash consideration such holder would receive upon conversion of their 2025 Convertible Notes would exceed what they would receive upon a repurchase of their 2025 Convertible Notes in connection with such Fundamental Change.

If holders elect to convert their Convertible Notes in connection with the merger, the conversion rate will be temporarily increased (as set forth in the respective indentures governing the Convertible Notes) based upon (x) the date on which the merger is consummated and (y) the per share merger consideration provided for in the merger agreement. Conversions of the 2036 Convertible Notes will be settled on the third business day after the relevant conversion date and conversions of the 2025 Convertible Notes will be settled on the second business day after the relevant conversion date.

Effects on K2M if the Merger Is Not Completed

If the merger proposal is not approved by K2M stockholders or if the merger is not completed for any other reason, K2M stockholders will not receive any payment for their shares in connection with the merger. Instead, K2M will remain an independent public company and shares of K2M common stock will continue to be listed and traded on the NASDAQ and registered under the Exchange Act, and we will continue to file periodic reports with the SEC. In addition, if the merger is not completed, K2M expects that management will operate K2M’s business in a manner similar to that in which it is being operated today and that K2M stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, without limitation, risks related to the highly competitive industry in which K2M operates and adverse economic conditions. Furthermore, if the merger is not completed, and depending on the circumstances that would have caused the merger not to be completed, it is likely that the price of K2M’s common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of K2M’s common stock would return to the price at which it trades as of the date of this proxy statement. Accordingly, if the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of K2M’s common stock.

Further, if the merger agreement is terminated under certain specified circumstances, K2M may be required to pay Stryker a termination fee of $47.6 million. See “The Merger Agreement—Termination Fee” beginning on page 84 for a discussion of the circumstances under which such fee may be payable.

Background of the Merger

The Board and K2M’s senior management regularly review and assess K2M’s operations and financial performance, industry conditions and related regulatory developments as they may impact K2M’s long-term strategic plans and objectives. As part of this ongoing evaluation, the Board, together with K2M’s senior management team, has considered various potential strategic opportunities to enhance stockholder value over the past several years, which have from time to time included evaluations of potential acquisition targets, potential business combination transactions and other potential financial and strategic alternatives.

In furtherance of its consideration of these types of potential strategic alternatives, the Board and K2M senior management have discussed a number of such alternatives with representatives of Piper Jaffray from time to time. K2M has periodically consulted with Piper Jaffray over the years, including during the periods between any formal

engagements, for a number of reasons that include Piper Jaffray’s experience and expertise as a financial advisor in a wide variety of transactions and its familiarity with K2M’s business, including based on its work as an underwriter in K2M’s initial public offering and certain subsequent securities offerings. In connection with the strategic alternative exploration that led to the proposed merger, K2M discussed such matters with representatives of Piper Jaffray throughout the course of the events of 2017 and 2018 described below, and K2M formally entered into an engagement letter with Piper Jaffray as its financial advisor in connection with the proposed transaction on August 17, 2018. K2M has also worked with Simpson Thacher & Bartlett LLP (“Simpson Thacher”) over the years, including engaging Simpson Thacher as K2M’s outside counsel on K2M’s initial public offering and certain subsequent securities offerings as well as on public reporting and corporate governance matters. K2M discussed the strategic alternative exploration process that led to the proposed merger with representatives of Simpson Thacher throughout the course of the events of 2017 and 2018 described below.

From time to time over the past several years, including both before and after K2M’s initial public offering in 2014 through the middle of 2017, members of K2M senior management have had discussions regarding K2M’s business with representatives of other industry participants, including Stryker, regarding potential transactions with K2M. None of these discussions developed beyond a preliminary stage.

In August 2017, representatives of a company we refer to in this proxy statement as Company A reached out to representatives of Piper Jaffray to propose a meeting with K2M to discuss K2M’s business and the possibility of exploring the merits of a transaction in which Company A would seek to acquire K2M. K2M and Company A executed a confidentiality agreement in late August 2017 (which did not include a standstill provision), following which members of K2M management and Company A management met to discuss K2M’s business and prospects and their respective views on the industry outlook. These discussions did not address valuation and ultimately did not develop beyond a preliminary stage in light of, among other things, the parties’ view of the business and product redundancies between K2M and Company A.

In September 2017, members of Stryker’s management team contacted members of K2M management regarding a potential meeting with K2M management in order to discuss whether there could be a basis for a possible business combination with K2M. On September 29, 2017, K2M and Stryker executed a confidentiality agreement, following which representatives of K2M and Stryker worked to coordinate an in-person meeting.

Eric Major, Chairman, CEO & President of K2M, periodically updated the Board regarding the developments during August and September 2017, and the Board determined that these potential opportunities to enhance stockholder value merited further exploration.

On October 3, 2017, several representatives of Stryker’s management team traveled to Washington, D.C. for an in-person meeting with members of K2M senior management. During the course of this meeting, the parties discussed their respective views on the current direction and potential future of the spine industry. In addition, the K2M senior management team discussed in a general manner K2M’s recent financial results and their view of the future prospects and objectives of K2M’s business operations. The parties did not discuss any potential transaction terms, including price, at this time. On October 20, 2017, representatives of K2M management and Stryker management had a call to discuss follow-up questions and coordinate requests for information from Stryker.

On October 17, 2017, the Board held a meeting, which was also attended by members of K2M senior management and representatives of Piper Jaffray. The K2M senior management team updated the Board on the recent meetings and conversations with Stryker and reported that Stryker had expressed interest in conducting further exploratory discussions. Representatives of Piper Jaffray provided their views on a potential transaction with Stryker from a financial perspective, including on the potential synergy opportunity to Stryker and the possible impact that such an opportunity could have on Stryker’s valuation of K2M in a possible acquisition transaction. Following discussion, the Board determined that the K2M senior management team should continue to provide information to Stryker as requested and to be receptive to further exploratory discussions with Stryker about a potential transaction.

Following this meeting of the Board, K2M periodically provided information to Stryker, but no substantive discussions about a potential transaction took place. On November 30, 2017, Stryker notified K2M that it was no longer interested in pursuing a potential transaction with K2M at such time.

On December 7, 2017, Mr. Eric Major met with Mr. Kevin Lobo, Chairman and Chief Executive Officer of Stryker, in Washington, D.C. in connection with an industry conference attended by K2M and Stryker. During this meeting, Messrs. Major and Lobo discussed that K2M and Stryker might engage in further exploratory discussions about a potential transaction in the future.

In January 2018, representatives of Piper Jaffray, on behalf of and at the instruction of K2M, met with representatives of Stryker at an industry conference to provide further information about the business and prospects of K2M. During this meeting, representatives of Stryker and Piper Jaffray discussed that representatives of K2M and Stryker should meet again in the near term in furtherance of the preliminary discussions they had held in 2017.

On February 14, 2018, members of K2M senior management and Stryker management held an in-person meeting in New York City. During the course of this meeting, the parties discussed current industry dynamics and K2M’s recent financial results and business operations. The parties also discussed the potential benefits of a business combination transaction, including potential synergies or cost savings, but there was no discussion regarding the potential terms of such a transaction.

On March 20, 2018, the Board held a meeting at which representatives of the K2M senior management team updated the Board on the discussions to date with Stryker.

During the two months following the February 14, 2018 meeting, K2M and Stryker continued to periodically explore the possibility of a transaction, although no specific transaction terms were discussed. Also during this timeframe, K2M continued to provide information to Stryker from time to time pursuant to the previously executed confidentiality agreement.

On April 6, 2018, the Board held a meeting, which was also attended by members of K2M senior management and representatives of Piper Jaffray. A member of the K2M senior management team and representatives of Piper Jaffray updated the Board on the recent meetings and conversations with Stryker. Representatives of Piper Jaffray then discussed with the Board, as part of the Board’s regular review of K2M’s potential strategic alternatives and in light of the ongoing dialogue with Stryker, the possibility of contacting a select group of third parties to determine such parties’ interest in pursuing discussions with K2M regarding a potential transaction. In this regard, representatives of Piper Jaffray presented its views regarding the parties that Piper Jaffray considered to be most likely to have an interest in a potential transaction with K2M. In addition to Stryker and Company A, Piper Jaffray identified four other potential parties, which we refer to as Company B, Company C, Company D and Company E. Representatives of Piper Jaffray reviewed for the Board the profiles of all six parties, including Piper Jaffray’s perspective on each party’s likely willingness and ability to engage in discussions with K2M regarding a potential transaction. During the course of this discussion, representatives of Piper Jaffray noted, among other things, that all of these parties were strategic companies with existing medical device businesses and that Piper Jaffray did not believe that any potential private equity buyers would have a meaningful interest or ability to make a proposal that would be competitive with proposals from industry participants who could potentially achieve synergies in connection with an acquisition of K2M, and that potential private equity buyers would typically prefer to acquire companies with significant cash flow. The Board discussed various advantages (which included further assessing the possibility of a transaction that could result in significant stockholder value) and disadvantages (which included the possibility of a market leak that could have negative effects on K2M’s business and operations) of contacting third parties beyond Stryker to explore strategic alternatives, both in the context of the general environment for mergers and acquisition activity in the medical device industry, as well as in the context of K2M’s specific circumstances. Following this discussion, the Board concluded that although it believed that K2M remained on track to grow and deliver stockholder value as an independent company, it would be prudent to continue exploratory conversations with Stryker (which continued to conduct its review of K2M) and to contact Company A, Company B and Company C, which were the three parties beyond Stryker considered by the Board and Piper Jaffray to be the most likely to have an interest in pursuing a potential transaction with K2M, to determine their potential interest in K2M. Company A, Company B and Company C were parties with whom K2M had in prior years explored potential transactions, but such discussions had not developed beyond preliminary stages. The Board determined, upon consultation with Piper Jaffray and the senior management team, to refrain from contacting Company D or Company E at that time, as the Board did not believe the advantages of contacting these two additional parties outweighed the disadvantages such contact would present in terms of competitive and confidentiality risks.

Following this meeting, upon instruction by the Board, representatives of Piper Jaffray contacted representatives of each of Company A, Company B and Company C regarding each party’s interest in exploring a potential

acquisition of K2M. During the succeeding two weeks, in April 2018, each of Company A, Company B, and Company C contacted Piper Jaffray to note that, although it had a positive view of K2M’s business and operations, it was not interested in pursuing a potential transaction with K2M at that time. Each party gave different reasons for declining the opportunity to pursue discussions at such time, including product overlap, expected near-term earnings dilution, and inconsistent strategic priorities. The K2M senior management team updated the Board regarding these conversations.

In May 2018, a strategic company in the medical field, which we refer to as Company F, contacted Piper Jaffray to inquire about the possibility of entering into discussions with K2M regarding a potential business combination transaction. Representatives of Piper Jaffray responded to Company F that they would report such interest to the Board, which Piper Jaffray did following such contact.

Also during the course of April and May 2018, Stryker continued its review and evaluation of K2M. In this regard, in mid-May 2018, Mr. Bradley Paddock, President, Stryker’s Spine division, communicated to Mr. Eric Major that Mr. Paddock remained impressed with the K2M business and expected to discuss with Stryker senior management the possibility of submitting a preliminary indication of interest for K2M for consideration by the Board. Mr. Paddock indicated it was possible that no indication of interest would be forthcoming and did not commit to any specific timing.

On June 5, 2018, at a regularly scheduled meeting, the Board continued its strategic review discussion from the April 2018 Board meeting and also discussed the ongoing conversations with Stryker. Members of K2M senior management and representatives of Piper Jaffray were present at such meeting. Representatives of Piper Jaffray discussed with the Board the results of the outreach to Company A, Company B, and Company C. Representatives of Piper Jaffray also provided the Board with an update on the status of the ongoing dialogue with Stryker, noting that Stryker continued to evaluate whether to pursue a transaction with K2M. In this regard, representatives of Piper Jaffray discussed with the Board that Stryker and K2M had not yet had any discussions around potential transaction terms, including price, and it was noted that Stryker did not commit to delivering any indication of interest on any specific timing or at all. Following discussion, the Board concluded that it would not initiate any further contact with Company A, Company B or Company C at this time, and that it should continue to refrain from contacting Company D or Company E at such time for the reasons discussed at the April 2018 Board meeting, although it would remain open to a dialogue should any of these parties make such a request or inquiry to K2M or its representatives. The Board further agreed that K2M should continue to execute on its existing business plan and explore a potential financing transaction, but should also continue to provide information as requested to Stryker for the time being and remain receptive to ongoing dialogue about Stryker’s potential interest in K2M.

Also at the June 5, 2018 meeting, representatives of Piper Jaffray reported to the Board that Company F had contacted Piper Jaffray to express an interest in exploring a potential transaction with K2M. Representatives of Piper Jaffray reviewed for the Board the profile of Company F as well as preliminary financial analyses regarding a potential transaction with Company F. The Board discussed the advantages and disadvantages of pursuing discussions with Company F, which the Board concluded would likely involve a transaction with all-stock or majority-stock consideration, and concluded that such discussions were not likely to lead to a transaction that would be in the best interest of K2M stockholders at this time in light of the significant relative valuation disparity and potential operational dis-synergies between K2M and Company F. Accordingly, the Board instructed Piper Jaffray to communicate that K2M was not at that time interested in pursuing discussions with Company F, which Piper Jaffray did following the meeting on June 5, 2018.

During the remainder of June 2018 and through the first two weeks of July 2018, Stryker continued its ongoing due diligence review of K2M.

On July 17, 2018, at Stryker’s request, Mr. Timothy Scannell, Group President, Medsurg and Neurotechnology of Stryker, together with Mr. Spencer Stiles, President, Instruments of Stryker, had an in-person meeting with Mr. Eric Major. Messrs. Scannell and Stiles informed Mr. Eric Major that Stryker continued to view K2M’s business as an attractive potential addition to Stryker’s spine business and that Stryker was prepared to move forward with evaluating in more detail a potential acquisition of K2M and to seek authorization from its board of directors in early August 2018 to submit a preliminary non-binding indication of interest relating to an acquisition of K2M, although Messrs. Scannell and Stiles indicated it was possible that no indication of interest would be forthcoming. At such meeting, Messrs. Scannell and Stiles also noted to Mr. Eric Major that Stryker may have a desire for certain members of K2M’s existing management team to join the combined K2M/Stryker spinal device and spinal product business

should there be an agreed-upon transaction, and that they intended to discuss this possibility with the Stryker board of directors as the potential to retain certain members of the management team had become a meaningful factor in Stryker’s continued interest in pursuing a transaction with K2M. Mr. Eric Major informed Messrs. Scannell and Stiles that he would apprise the Board of these discussions.

On July 19, 2018, Mr. Lobo called Mr. Eric Major to express interest in discussing a potential acquisition of K2M with Stryker’s board of directors and to reiterate the messages conveyed during the July 17, 2018 meeting. Mr. Eric Major reiterated that he would relay these messages to the Board. At no time during these meetings, or otherwise in advance of August 25, 2018 as discussed below, did representatives of Stryker discuss with Mr. Eric Major or other representatives of K2M potential compensation or other employment-related details with respect to the potential employment of Mr. Major or other members of the K2M senior management team following the consummation of a potential transaction.

During the week following the July 19, 2018 call, K2M continued to provide representatives of Stryker with information regarding K2M.

On July 24, 2018, Mr. Paddock called Mr. Eric Major to further discuss the possibility of a transaction between Stryker and K2M and to inform Mr. Eric Major that the Stryker management team continued to plan to discuss such a potential transaction with the Stryker board of directors at its meeting on August 2, 2018.

On July 25, 2018, representatives of Citigroup Global Markets Inc. (“Citi”), Stryker’s financial advisor, called representatives of Piper Jaffray. The representatives of Citi noted that although Stryker continued to be interested in pursuing a transaction, it intended to remain disciplined regarding any potential purchase price. In that regard, Citi inquired as to whether K2M would be amenable to indicating what it would expect in terms of a potential bid valuation. Representatives of Citi also noted to Piper Jaffray that Citi expected that any indication of interest from Stryker would likely include a request for an exclusive negotiation period in light of the significant time and expense Stryker would expect to expend.

On July 26, 2018, the Board held a meeting to discuss the status of the discussions with Stryker, including the price guidance request received from Citi. Members of K2M management and representatives of Piper Jaffray and Simpson Thacher were also present at such meeting. Mr. Eric Major reported on his meeting with representatives of Stryker, during which representatives of Stryker had expressed an interest to again pursue an acquisition of K2M and during which Stryker had also indicated that it intended to seek authorization from its board of directors to deliver a preliminary non-binding indication of interest to K2M in early August. Representatives of Simpson Thacher then reviewed with the members of the Board their fiduciary duties under applicable law in connection with evaluation of a potential sale transaction. Representatives of Piper Jaffray presented to the Board an overview of K2M’s prior discussions with Stryker and other prospective buyers over the past several years. Representatives of Piper Jaffray also discussed with the Board the call they had with representatives of Citi on the previous day. The K2M senior management team presented to the Board the management financial projections for the five-year period from 2018 to 2022, which are described under “—Financial Projections.” In connection with this discussion, the senior management team reviewed with the Board its analysis of various business opportunities and challenges that K2M might anticipate over the course of the next several years if it were to remain an independent company. Representatives of Piper Jaffray then presented to the Board its preliminary financial analyses of K2M based on, among other things, K2M management’s projections as well as financial profiles of comparable companies.

At this July 26, 2018 meeting, the Board, together with the advisors and senior management, discussed potential next steps and the advantages and disadvantages of various potential courses of action. During the course of this discussion, representatives of Piper Jaffray again summarized for the Board the results of the outreach efforts made during the month of April 2018 to certain potential strategic buyers, as well as the prior discussions with the Board regarding various potential counterparties to a transaction with K2M, and the Board again evaluated the possibility of reaching out to additional potential buyers and discussed industry and market conditions. The Board also discussed with representatives of Piper Jaffray and Simpson Thacher potential responses to Citi’s request for valuation guidance in advance of Stryker’s board of directors meeting and the suggestion that any indication of interest from Stryker likely would be coupled with a request for an exclusivity period. Following further discussion, the Board determined that any further outreach to other potential buyers at this time was not likely to lead to a transaction that would be in the best interest of K2M stockholders in light of the Board’s view that such outreach was unlikely to result in actionable discussions but would create additional leak risk, which might cause Stryker to terminate discussions of a potential transaction or have other negative impacts on K2M’s business. The Board further concluded that under

the circumstances, including the extended period of conversations with Stryker to date, it believed that providing some general valuation guidance to Stryker was the best next step in terms of eliciting a price indication from Stryker that could lead to actionable discussions regarding a potential transaction that could be in the best interest of K2M’s stockholders. In this regard, the Board, taking into account advice from the K2M senior management team and Piper Jaffray, instructed Piper Jaffray to inform Citi that the Board would expect a price indication from Stryker in the “high $20s” per share in order to continue discussions regarding a potential transaction.

Following the meeting on July 26, 2018, representatives of Piper Jaffray called representatives of Citi and informed Citi that the Board would consider a proposal by Stryker to acquire K2M at a price per share in the “high 20s.” The closing price per share of K2M common stock on July 27, 2018 was $19.68. Following this discussion, on July 27, 2018, representatives of Piper Jaffray made available to Citi the management financial projections described under “—Financial Projections” which the K2M senior management team had previously presented to the Board, and on July 30, 2018, representatives of Piper Jaffray and K2M senior management discussed these projections with representatives of Stryker and Citi.

On August 3, 2018, Stryker submitted to the Board a written confidential non-binding indication of interest to acquire 100% of the shares of K2M common stock at a price of $27.00 per share in cash, subject to the negotiation of definitive transaction documents and customary confirmatory due diligence. In connection with its non-binding indication of interest, Stryker also requested a four-week exclusivity agreement with K2M with respect to the negotiation of a definitive transaction. In connection with the submission of the indication of interest, also on August 3, 2018, representatives of Stryker called Mr. Eric Major to express Stryker’s interest in a potential transaction with K2M and to emphasize Stryker’s desire to understand promptly whether the Board would be willing to engage on the terms proposed in Stryker’s indication of interest. The closing price per share of K2M common stock on August 3, 2018 was $21.77.

On August 4, 2018, the Board held a telephonic meeting to discuss the non-binding indication of interest from Stryker and the exclusivity request. Members of K2M management and representatives of Piper Jaffray and Simpson Thacher were present at the meeting. The Board discussed with members of K2M management and representatives of Piper Jaffray and Simpson Thacher the terms of the indication of interest, the process leading up to the submission of the indication of interest by Stryker, and potential next steps. Mr. Eric Major informed the Board that Stryker had expressed a desire to understand promptly whether the Board would be willing to engage on the terms proposed in the indication of interest. Representatives of Piper Jaffray reviewed with the Board their preliminary financial analyses previously shared with the Board. Representatives of Simpson Thacher again reviewed with the members of the Board their fiduciary duties under applicable law. The Board proceeded to discuss with members of K2M management and representatives of Piper Jaffray and Simpson Thacher certain possible responses to Stryker’s indication of interest, Stryker’s offer price, certain risks and benefits of agreeing to Stryker’s request for an exclusivity period or seeking alternative proposals. The Board also discussed with representatives of Piper Jaffray and Simpson Thacher the possibility of seeking to negotiate one or more favorable contractual terms, particularly around the Board’s ability to exercise a fiduciary termination right, in connection with a response to the indication of interest and the likely impact that the terms of a definitive agreement would have on the ability of other potentially interested parties to come forward in the event of an announcement of a transaction with Stryker. After such discussion, the Board determined to respond to Stryker with a counterproposal of $28.50 per share in cash and a proposed exclusivity period of three weeks. In addition, although the Board believed, based on, among other factors, the outreach efforts and discussions with other parties over the previous two years, that a transaction with Stryker presented the best available option should the Board determine to proceed with a potential sale of K2M at this time, the Board also decided to include in the response to Stryker a request for a “go shop” provision that would permit K2M to solicit competing proposals for a limited period of time following an announcement of a transaction with Stryker. The Board instructed representatives of Piper Jaffray to proceed accordingly.

Later on August 4, 2018, at the instruction of the Board, representatives of Piper Jaffray called representatives of Citi to request that Stryker improve its proposal to $28.50 in cash per share, and to propose an exclusivity period of three weeks and a go shop provision.

During the evening of August 4, 2018, representatives of Citi delivered Stryker’s response to this proposal. They informed Piper Jaffray that Stryker was not receptive to the proposed offer price of $28.50 per share, but that Stryker

had authorized Citi to increase its proposal to $27.35 in cash per share. Representatives of Citi also expressed Stryker’s willingness to agree to a three-week exclusivity period, but noted that Stryker viewed a “go shop” provision as unacceptable but acknowledged that any definitive agreement would provide the Board with a customary fiduciary termination right.

In the morning of August 5, 2018, the Board held a telephonic meeting, at which members of K2M management and representatives of Piper Jaffray and Simpson Thacher were present. Mr. Eric Major provided the Board with an update regarding the most recent discussions with representatives of Citi in response to the Board’s counterproposal on August 4, 2018. The Board discussed the proposed transaction in light of recent industry developments and general market conditions. The Board discussed K2M’s current direction and operations, risks and benefits of K2M continuing as a stand-alone public company, and the expectations of the Board and K2M management with respect to potential challenges facing K2M as a stand-alone company in the near and long term. Representatives of Piper Jaffray updated the Board on the conversations that Piper Jaffray had with Citi on August 4, 2018, and expressed their views on the likelihood of whether Stryker would be willing to entertain a higher offer price or terminate discussions if no tentative agreement on price could be reached imminently. Representatives of Piper Jaffray also again reviewed with the Board their preliminary financial analyses previously shared with the Board. The Board then discussed with representatives of Piper Jaffray and Simpson Thacher potential responses to Stryker in light of the foregoing, and the Board determined that it would be in the best interest of K2M for the parties to move quickly if agreement regarding price could be reached with Stryker, in an effort to contain the risk of a potential leak. In connection with such discussions, the Board concluded that it would be reasonable to accept Stryker's position to not provide for a “go shop” provision in light of the fact that any definitive agreement would provide the Board with a customary fiduciary termination right. Following further discussion, the Board determined that it would be willing to proceed with a potential transaction with Stryker on the basis of an increased transaction consideration of at least $27.50 per share in cash and otherwise as proposed by Stryker in its revised non-binding offer.

Later in the morning on August 5, 2018, at the instruction of the Board, representatives of Piper Jaffray informed representatives of Citi of the Board’s proposal to enter into an exclusivity agreement with Stryker and to proceed with confirmatory due diligence and to seek to negotiate a definitive agreement with Stryker on the condition that the offer price be increased to $27.50 in cash per share of K2M common stock.

In the afternoon on August 5, 2018, representatives of Citi informed representatives of Piper Jaffray that Stryker was amenable to the Board’s proposal to enter into an exclusivity agreement with K2M and was prepared to move forward to seek to finalize due diligence and definitive agreements at an increased offer price of $27.50 in cash per share of K2M common stock.

In the evening on August 5, 2018, representatives of Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), outside counsel to Stryker, submitted a draft exclusivity agreement to Simpson Thacher providing for a three-week exclusive negotiating period between Stryker and K2M.

On August 6, 2018, K2M and Stryker and their respective counsel negotiated and entered into the exclusivity agreement providing Stryker with an exclusive negotiating period through August 27, 2018.

On August 7, 2018, K2M provided representatives of Stryker and its outside legal counsel and advisors with access to an online data room. From August 7, 2018 through August 29, 2018, K2M continued to populate this online data room with materials in response to due diligence requests from Stryker. In addition, during the weeks of August 13, 2018 and August 20, 2018, members of K2M management participated in a number of due diligence calls with representatives of Stryker, its financial advisors and outside legal counsel.

On August 13, 2018, Skadden delivered an initial draft of the merger agreement to Simpson Thacher. The draft merger agreement provided, among other things, for a termination fee of 3.75% of the equity value of the transaction, and an obligation of K2M to reimburse Stryker for its expenses upon a termination of the merger agreement if the K2M stockholders did not approve the proposed transaction in the absence of any competing proposal.

On August 17, 2018, the Board held a telephonic meeting, at which members of K2M management and representatives of Piper Jaffray and Simpson Thacher were present. Mr. Eric Major informed the Board of the status of the discussions and negotiations with Stryker and Stryker’s diligence review of K2M. Representatives of Piper Jaffray again reviewed with the Board certain preliminary financial analyses of the merger consideration based on the increased $27.50 per share offer price, which remained consistent with the presentations by Piper Jaffray to the Board on August 4, 2018 and August 5, 2018. Representatives of Simpson Thacher again reviewed with the members

of the Board their fiduciary duties under applicable law in connection with the proposed transaction, and discussed with the Board the terms of the draft merger agreement proposed by Stryker, including the amount of the termination fee payable by K2M in certain circumstances, the scope of Stryker’s obligations to obtain required antitrust approvals, and Stryker’s request that K2M reimburse Stryker for expenses if the K2M stockholders failed to vote in favor of the proposed transaction in the absence of any competing proposal. The Board discussed with representatives of Simpson Thacher, among other things, potential responses to these terms of the draft merger agreement. The Board then met in executive session, during which representatives of Simpson Thacher reviewed with the Board the disclosure statement provided to the Board by Piper Jaffray, which provided, consistent with prior discussions with the Board, that there were no recent prior engagements or relationships between Piper Jaffray and Stryker, as well as the proposed terms of the formal engagement of Piper Jaffray as financial advisor in connection with the proposed transaction.

Later on August 17, 2018, at the direction of the Board, Simpson Thacher sent a revised draft of the merger agreement to Skadden, which provided, among other things, for a termination fee of 3.0% of the equity value of the transaction, expanded obligations by Stryker with respect to obtaining required regulatory approvals, and rejected the proposed provision requiring K2M to reimburse Stryker for its expenses if the K2M stockholders did not approve the transaction in the absence of any competing proposal.

On August 21, 2018, Mr. Stiles of Stryker contacted Mr. Eric Major to inform Mr. Major of the progress of Stryker’s diligence review of K2M and to discuss the status of the negotiation process, and expressed optimism that a mutually acceptable agreement on key remaining open issues could be reached shortly.

In the evening on August 21, 2018, Skadden sent a revised draft of the merger agreement to Simpson Thacher.

From August 21, 2018 through August 29, 2018, representatives of Simpson Thacher and Skadden continued to exchange drafts and negotiate the terms of the merger agreement. Throughout this period, representatives of Simpson Thacher continued to update members of K2M management and representatives of Piper Jaffray as to the progress of the negotiations.

On August 22, 2018, Skadden informed Simpson Thacher that Stryker expected to need a few days beyond the expiration of the current exclusivity agreement to conclude its review of K2M and therefore was requesting to extend the exclusivity period between K2M and Stryker. Skadden delivered to Simpson Thacher a draft extension agreement that would extend the exclusive negotiating period by 72 hours, until August 30, 2018.

On August 24, 2018, the Board considered Stryker’s request to extend the exclusive negotiating period in light of the status, expected timing and substantial progress of the negotiations with Stryker in connection with the proposed transaction and approved an extension by 48 hours, until August 29, 2018. On August 27, 2018, K2M and Stryker executed the extension agreement providing Stryker with an exclusive negotiating period through August 29, 2018.

During the period between August 25, 2018 and August 29, 2018, representatives of Simpson Thacher and Skadden continued to negotiate the terms of the merger agreement. In connection with such discussions, by August 25, 2018, the parties had agreed on the material terms of the merger agreement to be proposed to their respective board of directors, including that the amount of the termination fee would be approximately 3.4% of the equity value of the transaction and that K2M would not be obligated to reimburse Stryker for its expenses in the event that K2M stockholder approval was not obtained in the absence of any competing proposal.

In light of the material terms of the merger agreement as well as the merger consideration having been agreed upon between the parties subject to approval by their boards of directors, on August 25, 2018, at Stryker’s request, Mr. Stiles and Mr. Eric Major met to discuss the potential for Mr. Major to lead Stryker’s Spine division following the consummation of the proposed merger, and on August 27, 2018, Stryker sent to Mr. Eric Major a draft of an offer letter for Mr. Major to serve as President of Stryker’s Spine division following the consummation of the proposed merger.

During the period from August 27, 2018 through August 29, 2018, Mr. Eric Major, through separate outside legal counsel engaged by Mr. Eric Major for this purpose and as approved by the Board, negotiated the terms of an offer by Stryker for Mr. Major to serve as President of Stryker’s Spine division following the consummation of the proposed merger.

On August 29, 2018, the Board held a telephonic meeting to discuss the proposed transaction with Stryker. All members of the Board were in attendance, other than Mr. Raymond Ranelli who was unable to participate for personal reasons, but who had participated in previous Board meetings discussing the proposed transaction with Stryker, was fully informed of the status of the discussions and negotiations with Stryker, had reviewed all materials relating to the potential transaction with Stryker, and had conveyed to Mr. Luke Miller, Secretary, Senior Vice President and General Counsel of K2M on August 29, 2018 that he was in favor of the merger and the merger agreement. Members of K2M management and representatives of Piper Jaffray and Simpson Thacher were also present at the meeting. Representatives of Simpson Thacher again reviewed with the members of the Board their fiduciary duties under applicable law. Representatives of Piper Jaffray then reviewed with the Board Piper Jaffray’s financial analyses of the proposed transaction, and delivered to the Board its oral opinion, which was subsequently confirmed by delivery of a written opinion of Piper Jaffray dated August 29, 2018, to the effect that, as of that date and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be paid in cash to the holders of K2M common stock issued and outstanding immediately prior to the effective time (other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal) pursuant to the merger agreement was fair, from a financial point of view, to such holders. For a detailed discussion regarding the opinion provided by Piper Jaffray, please see “The Merger—Opinion of Piper Jaffray & Co.” beginning on page 44 of this proxy statement. Representatives of Simpson Thacher then proceeded to review the proposed final terms of the merger agreement, including changes that had been negotiated since the August 17, 2018 Board meeting. Mr. Miller of K2M then discussed with the Board the terms of Mr. Eric Major’s offer letter for his employment with Stryker following the consummation of the proposed merger. The terms of such offer letter are more fully described in the section entitled “The Merger—Interests of K2M’s Executive Officers and Directors in the Merger” beginning on page 54 of this proxy statement. Following discussion, the Board determined that it was in the best interest of K2M and the K2M stockholders that K2M enter into the merger agreement, approved and declared advisable the merger and the merger agreement, resolved that the merger agreement be submitted for consideration by the K2M stockholders at the special meeting of the K2M stockholders and recommended that the K2M stockholders adopt the merger agreement and approve the transactions contemplated thereby.

In the evening of August 29, 2018, K2M and Stryker finalized and executed the merger agreement. Also in the evening of August 29, 2018, Mr. Eric Major executed Stryker’s offer letter to serve as President of Stryker’s Spine division following the consummation of the proposed merger.

In the morning of August 30, 2018, K2M and Stryker issued press releases announcing the execution of the merger agreement.

Recommendation of the Board and Reasons for the Merger

The Board unanimously recommends that the K2M stockholders vote “FOR” the merger proposal.

At a meeting of the Board held on August 29, 2018, the Board (i) determined that it was advisable and in the best interest of K2M and the K2M stockholders that K2M enter into the merger agreement, (ii) approved and declared advisable the merger and the merger agreement, (iii) resolved that the adoption of the merger agreement be submitted for consideration by the K2M stockholders at a special meeting of the K2M stockholders and (iv) recommended that the K2M stockholders adopt the merger agreement and approve the transactions contemplated thereby.

When you consider the Board’s recommendation, you should be aware that K2M’s executive officers and directors may have interests in the merger that may be different from, or in addition to, the interests of K2M stockholders generally. These interests are described in “The Merger—Interests of K2M Executive Officers and Directors in the Merger.”

Factors Considered Supporting Approval of the Merger.

In the course of reaching its decision, the Board consulted with members of K2M senior management, our financial and legal advisors, considered a significant amount of information and considered a number of factors that it believed supported its decision, including the following (not necessarily in order of relative importance):

The merger consideration represents a significant premium across a number of measuring periods. The Board considered that the merger consideration of $27.50 per share in cash was attractive value for the shares of K2M common stock and represented:

Strategic alternatives to a sale of the Company. The Board considered the potential values, benefits, risks and uncertainties facing K2M’s stockholders associated with possible strategic alternatives to the merger (including the potential stockholder value based on our business plan that could be expected to be generated from remaining an independent public company, the possibility of being acquired by other companies, the possibility of acquisitions or mergers with other companies and other transactions, as well as the potential benefits, risks and uncertainties associated with such alternatives), and the timing and likelihood of accomplishing such alternatives. The Board considered these alternatives as compared to the risks and benefits of the proposed merger.

Risks relating to remaining a stand-alone company. The Board evaluated K2M’s long-term strategic plan were it to remain an independent public company, as well as the significant risks associated with executing such plan. This evaluation included the Board’s review of our business, operations, assets, operating results, financial condition, prospects, business strategy, competitive position, and industry, including the potential impact (which cannot be quantified numerically) of those factors on the trading price of our common stock, to assess the prospects and risks associated with remaining an independent public company. The Board believed that the certainty provided by the acquisition of K2M by Stryker for $27.50 per share in cash was more favorable to our stockholders than the potential risk-weighted value of remaining an independent public company, after accounting for the risks and uncertainties associated with achieving and executing upon our business and financial plans in the short- and long-term. Such risks include:

Process to explore a sale of the Company. The Board considered the strategic process that K2M undertook, with the assistance of its financial advisors at the Board’s direction, to evaluate its strategic alternatives, including a potential sale of K2M, which included the outreach conducted in April 2018 by our financial advisors during which K2M engaged with three other parties, before K2M entered into an exclusivity agreement with Stryker, and the fact that none of those companies demonstrated a substantial interest in acquiring K2M.

As a result of factors such as the processes conducted by K2M with the assistance of its financial advisors at the Board’s direction and the periodic conversations K2M has had with others parties over the past two years, the Board believed that it had an informed understanding of the parties most likely to be willing and able to acquire or engage in other strategic transactions with K2M. The Board noted that such parties had been afforded the opportunity to participate in discussions with K2M with respect to a potential transaction, but that such discussions did not progress beyond a preliminary stage.

Cash consideration. The Board considered the fact that the merger consideration would be paid solely in cash, which, compared to non-cash consideration, provides certainty of value and immediate liquidity to our stockholders upon the consummation of the merger, in comparison to the risks and uncertainty that would be inherent in remaining an independent public company or engaging in a transaction in which all or a portion of the consideration is payable in stock. The Board weighed the certainty of realizing a compelling value for shares of K2M common stock by virtue of the merger against the uncertain prospect that the trading value for the K2M common stock would approach the merger consideration in the foreseeable future, as well as the risks and uncertainties associated with our business.

Negotiations with Stryker. The Board considered the extensive negotiations K2M and its legal counsel had with Stryker, including that throughout the period of time from August 3, 2018, which was the day Stryker first submitted a written indication of interest, to the date on which the merger agreement was executed on August 29, 2018. In this regard the Board considered that Stryker increased its proposed price per share from $27.00 per share to $27.50 per share, and its belief that the $27.50 per share price represented the highest price per share that Stryker was willing to pay for the K2M common stock, considering the extensive due diligence conducted by Stryker over the course of several months and the negotiations between the parties, and that the negotiations with Stryker had resulted in the highest price reasonably available to K2M under the circumstances. The Board further considered that no other potential buyer submitted and maintained an offer to acquire K2M at a purchase price per share that was greater than the $27.50 per share price to be paid in the proposed merger.

Anti-trust regulatory approvals. The Board considered that it believed that there would be limited antitrust impediments to the consummation of the merger, and the Board considered Stryker’s obligation under the merger agreement to use its reasonable best efforts to eliminate each impediment to the completion of the transactions contemplated by the merger agreement and obtain all approvals required under applicable antitrust laws, subject to certain limitations specified in the merger agreement.

No Financing Condition. The Board considered that the merger is not subject to a financing condition, that Stryker represented to K2M in the merger agreement that it will have sufficient financial resources at the closing to pay the aggregate merger consideration and to consummate the merger.

Fairness opinion. The Board considered the financial analyses presented by representatives of Piper Jaffray at the Board’s meeting on August 29, 2018, as well as the oral opinion of Piper Jaffray (which was subsequently confirmed in writing by delivery of Piper Jaffray’s written opinion, dated August 29, 2018) to the Board to the effect that, as of such date and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be paid in cash to the holders of K2M common stock issued and outstanding immediately prior to the effective time (other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal) pursuant to the merger agreement, was fair, from a financial point of view, to such holders. The Piper Jaffray opinion is more fully described in “The Merger—Opinion of Piper Jaffray & Co.” and the full text of the Piper Jaffray opinion is attached to this proxy statement as Annex B.

Merger agreement. The Board considered the terms and conditions of the merger agreement, including the structure of the transaction, the all-cash form of the merger consideration, the limited conditions to closing, the customary nature of the representations, warranties, and the covenants and agreements of the parties. The Board further considered the course and nature of negotiations with Stryker, which were conducted at arm’s length and during which the Board was advised by independent legal and financial advisors on a regular basis. The Board took into account the terms of the merger agreement, including:

Stryker’s capabilities. The Board considered that Stryker is a creditworthy entity with substantial assets, and considered Stryker’s reputation in the medical device industry, its financial capacity to complete an acquisition of this size and its prior track record of completing acquisitions, which the Board believed supported the conclusion that a transaction with Stryker could be completed relatively quickly and in an orderly manner.

Board’s independence and comprehensive review process. The Board considered the fact that the Board consisted of a majority of independent directors who approved the transaction following extensive discussions with K2M’s management team, representatives of financial advisers and outside legal counsel, and also took into consideration the financial expertise and prior industry experience held by a number of directors.

Stockholders’ ability to reject the merger. The Board considered the fact that the merger is subject to approval by the holders of a majority of K2M common stock, and that stockholders would be able to reject the merger.

Appraisal rights. The Board considered the fact that stockholders who do not vote for the adoption of the merger agreement and who follow certain prescribed procedures will have the right to dissent from the merger and demand appraisal of the fair value of their shares under the DGCL.

Other Factors Considered by the Board.

In the course of reaching its decision, the Board also considered and balanced against the potential benefits of the merger a number of potentially adverse factors concerning the merger, including the following:

No further stockholder participation in future gains. The Board considered the fact that K2M would no longer exist as an independent public company following the merger and that K2M stockholders would forgo any future increase in K2M’s value following the merger that might result from our earnings or possible growth as an independent company. Although the Board was optimistic about K2M’s prospects on a stand-alone basis and our strategic plan, the Board concluded that there were a number of significant risks associated with remaining an independent company (including as described in more detail above) that in many cases were difficult to quantify and that the premium reflected in the merger consideration constituted fair compensation for the loss of the potential stockholder benefits that could reasonably be expected to be realized by our strategic plan, particularly on a risk-adjusted basis.

Regulatory risk. The Board considered the risk that necessary regulatory approvals may be delayed, conditioned or denied, and the risk that the applicable governmental agencies may seek to impose unfavorable terms or conditions, or otherwise fail to grant, such approvals.

Risks associated with announcement and pendency of the merger. The Board considered the risk that the announcement and pendency of the merger may cause substantial harm to relationships with our employees, vendors, distributors, sales representatives, customers or strategic partners or may divert management and employee attention away from the day-to-day operation of our business. The Board also considered our ability to attract and retain key personnel while the proposed transaction is pending and the potential adverse effects on our financial results as a result of that disruption, as well as the possibility of any suit, action or proceeding in respect of the merger agreement or the transactions contemplated thereby.

Risks associated with a failure to consummate the merger. The Board considered the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the merger will be satisfied, and as a result

there can be no assurance that the merger will be completed, even if the merger is approved by our stockholders. The Board noted the fact that, if the merger is not completed, (i) K2M will have incurred significant risk, transaction expenses and opportunity costs, including the possibility of disruption to our operations, diversion of management and employee attention, employee attrition and a potentially negative effect on our business and customer relationships, (ii) depending on the circumstances that caused the merger not to be completed, the price of the K2M common stock could decline, potentially significantly, and (iii) the market’s perception of K2M’s prospects could be adversely affected.

Restrictions on the operation of our business. The Board considered the restrictions on the conduct of our business prior to the completion of the merger, which could delay or prevent K2M from realizing certain business opportunities or taking certain actions with respect to our operations that we might otherwise take absent the pending merger.

Ability to respond to unsolicited acquisition proposals. The Board considered the fact that the merger agreement precludes us from actively soliciting alternative proposals. The Board also considered, but did not consider preclusive, the fact that the right afforded to Stryker under the merger agreement to re-negotiate the terms of the merger agreement in response to a superior proposal may discourage other parties that might otherwise have an interest in a business combination with, or an acquisition of, K2M. The Board further considered the possibility that the termination fee payable to Stryker if the merger agreement is terminated under certain circumstances might have the effect of discouraging alternative acquisition proposals or reducing the price of such proposals. However, the Board also considered that the structure of the transaction as a merger would result in detailed public disclosure and substantial time prior to consummation of the merger during which an unsolicited superior proposal could be submitted. In addition, the Board considered the “fiduciary out” provisions of the merger agreement, which, subject to the terms and conditions thereof, permit K2M to furnish information to and conduct negotiations with third parties that make unsolicited acquisition proposals, and permit the Board to change its recommendation to K2M stockholders regarding the merger agreement and to terminate the merger agreement in order to enter into a definitive agreement with respect to a superior proposal, subject to payment of a termination fee to Stryker. The Board further considered its belief that the $47.6 million termination fee (which is equivalent to approximately 3.4% of equity value of K2M) payable by K2M (i) is reasonable in light of the overall terms of the merger agreement and the benefits of the merger, (ii) was comparable to termination fees in transactions of a similar size, and (iii) would not preclude another party from making a competing proposal.

Tax treatment. The Board considered the fact that an all cash transaction would be taxable to K2M’s stockholders that are U.S. holders for U.S. federal income tax purposes.

Limited damages. The Board considered the fact that if it believed Stryker breached the merger agreement and K2M was unable to obtain specific performance to compel Stryker to perform its obligations under the merger agreement, then K2M’s only remedy is the right, in certain circumstances, to terminate the merger agreement and seek monetary damages.

Transaction costs. The Board considered the fact that K2M has incurred and will continue to incur significant transaction costs and expenses in connection with the merger, regardless of whether the merger is consummated.

Potential differing interests of directors and officers. The Board considered that, aside from their interests as K2M stockholders, K2M’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of other K2M stockholders generally. See “The Merger—Interests of K2M’s Executive Officers and Directors in the Merger” beginning on page 54 of this proxy statement.

While the Board considered potentially positive and potentially negative factors, the Board concluded that, overall, the potentially positive factors outweighed the potentially negative factors. Accordingly, the Board determined that the merger agreement and the merger are advisable and fair to, and in the best interest of, K2M and its stockholders.

The foregoing discussion is not intended to be an exhaustive list of the information and factors considered by the Board in its consideration of the merger, but includes the material positive factors and material negative factors considered by the Board in that regard. In view of the number and variety of factors and the amount of information considered, the Board did not find it practicable to, and did not make specific assessments of, quantify, or otherwise assign relative weights to, the specific factors considered in reaching its determination. In addition, individual

members of the Board may have given different weights to different factors. Based on the totality of the information presented, the Board collectively reached the decision to approve and declare advisable the merger agreement and the merger in light of the factors described above and other factors that the members of the Board felt were appropriate.

Portions of this explanation of K2M’s reasons for the merger and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Opinion of Piper Jaffray & Co.

K2M retained Piper Jaffray & Co. to act as financial advisor to the Board, and, if requested, to render to the Board an opinion as to the fairness, from a financial point of view, of the merger consideration to be received by the holders of K2M common stock issued and outstanding immediately prior to the effective time, other than any shares that may be held by K2M as treasury stock or held directly by Stryker or any subsidiary of Stryker (including Merger Sub), and other than any shares owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal (referred to as “Excluded Shares”).

The full text of the Piper Jaffray written opinion dated August 29, 2018, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Piper Jaffray in rendering its opinion, is attached as Annex B. You are urged to, and should, carefully read the Piper Jaffray opinion in its entirety and this summary is qualified in its entirety by reference to the written opinion. The Piper Jaffray opinion addresses only the fairness, from a financial point of view, and as of the date of the opinion, of the merger consideration to be received by the holders of K2M common stock (other than the Excluded Shares) in the merger. Piper Jaffray’s opinion was directed to the Board in connection with its consideration of the merger and was not intended to be, and does not constitute, a recommendation to any holders of K2M common stock as to how such stockholders should vote or act with respect to the merger or any other matter. Piper Jaffray’s opinion was approved for issuance by the Piper Jaffray opinion committee and Piper Jaffray has consented to the disclosure of its opinion in this proxy statement.

In connection with rendering the opinion described above and performing its related financial analyses, Piper Jaffray, among other things:

In addition, Piper Jaffray conducted such other analyses, examinations and inquiries, including a selected publicly traded companies analysis, a selected merger and acquisition (referred to as “M&A”) transaction analysis, a premiums paid analysis and a discounted cash flow analysis, and considered such other financial, economic and market criteria as Piper Jaffray deemed necessary in arriving at its opinion.

The following is a summary of the material financial analyses performed by Piper Jaffray in connection with the preparation of its fairness opinion and reviewed with the Board at a meeting held on August 29, 2018.

This summary includes information presented in tabular format, which tables must be read together with the text of each analysis summary and considered as a whole in order to fully understand the financial analyses presented by Piper Jaffray. The tables alone do not constitute a complete summary of the financial analyses. The order in which these analyses are presented below, and the results of those analyses, should not be taken as any indication of the relative importance or weight given to these analyses by Piper Jaffray or the Board. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 28, 2018, and is not necessarily indicative of current market conditions.

For purposes of its analyses, and unless the context indicates otherwise, Piper Jaffray (i) calculated K2M’s implied per share equity value based on diluted shares of K2M common stock (including options, K2M restricted stock awards and K2M restricted stock unit awards, and the Convertible Notes on an if-converted basis) as of August 27, 2018 calculated using the treasury stock method, and in respect of the Convertible Notes, assuming a make-whole date of September 30, 2018 and conversion of the Convertible Notes when economically advantageous for the holders thereof, (ii) calculated enterprise values (referred to as “EV”) to be implied equity value, plus debt (including capital lease obligations), which in the case of K2M was approximately $34 million (assuming conversion of the Convertible Notes), less cash, which in the case of K2M was approximately $66 million, in each case as of June 30, 2018, and (iii) used the Projections provided by K2M management, which were provided to Piper Jaffray by K2M and are described under “—Financial Projections” for its analyses of forward-looking information for K2M.

Historical Trading Analysis

Piper Jaffray reviewed the historical closing prices and trading volumes for K2M common stock over the 52-week period ended August 28, 2018 in order to provide background information on the prices at which K2M common stock has historically traded. The following table summarizes some of these historical closing prices, the average closing prices (based on volume-weighted average prices (referred to as “VWAP”)), relative to the merger consideration, and the premium that the merger consideration reflects relative to the referenced closing prices:

Piper Jaffray also noted that the VWAP for the one-year period ended August 28, 2018 was $20.18, the 52-week intraday high was $24.43 on June 13, 2018, the 52-week intraday low was $16.44 on December 8, 2017 and that the all-time intraday high was $26.29 on June 1, 2015.

Selected Public Companies Analysis

Medical Technology—Financial Profile

Piper Jaffray reviewed the financial data prepared by K2M management for the last 12-month period (referred to as “LTM”) as of June 30, 2018 and projected for the years ended December 31, 2018 and December 31, 2019, and compared such data to corresponding historical balance sheet and income statement data and Wall Street research estimates for public companies in the medical technology industry that Piper Jaffray believed were comparable to K2M’s financial profile, using the criteria below, based on Piper Jaffray’s professional judgment. Piper Jaffray selected U.S. public companies that it considered to be medical technology companies for which financial information was publicly available with LTM revenue between $50 million and $1 billion, projected 2018 revenue growth between 10% and 20% and LTM earnings before interest, taxes, depreciation and amortization (referred to as “EBITDA”) margins of less than 20%.

Based on these criteria, Piper Jaffray selected the following companies:

For the selected “financial profile” public companies analysis, Piper Jaffray compared, among other things, LTM and projected 2018 and 2019 implied EV/revenue and EV/gross profit multiples for K2M, based on the merger consideration, to the corresponding implied EV multiples for the selected medical technology public companies derived from their closing prices per share on August 28, 2018. LTM and projected 2018 and 2019 revenue and gross profit for K2M were provided by K2M management. LTM, 2018 and 2019 revenue and gross profit projections for the selected medical technology public companies were based on Wall Street research estimates and public filings of such companies.

The analysis indicated the following multiples:

Based on this analysis, Piper Jaffray noted that, with respect to K2M, each of the EV/revenue and EV/gross profit multiples (other than projected EV to 2019 gross profit) fell between the 75th percentile and the mean range of implied EV/revenue or EV/gross profit multiples, as applicable, for the selected public companies, and the EV/gross profit multiple for 2019 fell between the 25th percentile and the mean range of implied EV/gross profit multiples for 2019 for the selected public companies. In addition, Piper Jaffray observed that the range of implied per share values for K2M common stock based on the mean and median for each analysis yielded the following, as compared to the merger consideration:

Spine—Business Profile

Piper Jaffray also reviewed financial data prepared by K2M management for LTM as of June 30, 2018 and projected for the years ended December 31, 2018 and December 31, 2019, and compared such data to corresponding historical balance sheet and income statement data and Wall Street research estimates for spine-focused public companies that Piper Jaffray believed were comparable to K2M’s business profile based on Piper Jaffray’s

professional judgment. Piper Jaffray selected U.S. public companies that it considered to be comparable medical technology companies specifically focused in the spine business.

Based on these criteria, Piper Jaffray selected the following companies:

For the selected “business profile” public companies analysis, Piper Jaffray compared, among other things, LTM, and projected 2018 and 2019 implied EV/revenue and EV/gross profit multiples for K2M, based on the merger consideration, to the corresponding implied EV multiples for the selected business profile public companies derived from their closing prices per share on August 28, 2018. LTM, and projected 2018 and 2019 revenue and gross profit for K2M were provided by K2M management. LTM, 2018 and 2019 revenue and gross profit for the selected business profile public companies were based on Wall Street research estimates and public filings of such companies.

The analysis indicated the following multiples:

Based on this analysis, Piper Jaffray noted that, with respect to K2M, each of the EV/revenue and EV/gross profit multiples (other than projected EV to 2019 revenue) fell between the 75th percentile and the 25th percentile range of implied EV/revenue or EV/gross profit multiples, as applicable, for the selected public companies, and the EV/revenue multiple for 2019 fell between the 25th percentile and the low range of implied EV/revenue multiples for 2019 for the selected public companies. In addition, Piper Jaffray observed that the implied per share values for K2M common stock based on such analysis yielded the following, as compared to the merger consideration:

Selected M&A Transaction Analysis

Medical Technology—Financial Profile

Piper Jaffray reviewed M&A transactions involving target companies in the medical technology industry that Piper Jaffray believed were comparable to K2M’s financial profile, using the criteria below, based on Piper Jaffray’s professional judgment. Piper Jaffray selected transactions that were announced after January 1, 2010 involving U.S. public or private medical technology companies as targets with LTM revenue between $50 million and $1 billion, revenue growth between 10% and 20% for the 12-month period immediately following the LTM period (referred to as “FTM”) and LTM EBITDA margins of less than 20%.

Based on these criteria, the following 16 transactions were selected:

For the selected “financial profile” M&A transactions analysis, Piper Jaffray compared, among other things, implied EV/LTM revenue and EV/LTM gross profit multiples for K2M, based on the merger consideration, to the corresponding multiples for each selected transaction, as well as K2M’s implied multiples of EV/projected FTM revenue and EV/projected FTM gross profit, based on the merger consideration, to the corresponding multiples for each selected transaction. LTM revenues and LTM gross profit for K2M were based on historical financial data for the 12 months ended June 30, 2018 provided by K2M management. Projected FTM revenues and FTM gross profit for K2M were for the 12 months beginning June 30, 2018 and were based on estimates of K2M management. FTM revenues and FTM gross profit for the selected transactions were based on selected Wall Street research estimates.

The analysis indicated the following multiples:

Based on this analysis, Piper Jaffray noted that, with respect to K2M, each of the EV/revenue and EV/gross profit multiples fell between the 75th percentile and the mean range of implied EV/revenue or EV/gross profit multiples, as applicable, for the selected financial profile M&A transactions. In addition, Piper Jaffray observed that the range of implied per share values for K2M common stock based on the mean and median for each analysis, yielded the following, as compared to the merger consideration:

Spine—Business Profile

Piper Jaffray also reviewed M&A transactions involving spine-focused target companies in the medical technology industry that Piper Jaffray believed were comparable to K2M’s business profile, using the criteria below, based on Piper Jaffray’s professional judgment. Piper Jaffray selected transactions that were announced after January 1, 2010 involving public or private target companies (excluding Chinese companies) that it considered to be comparable medical technology companies specifically focused in the spine business.

Based on these criteria, the following six transactions were selected:

For the selected “business profile” M&A transactions analysis, Piper Jaffray compared, among other things, implied EV/LTM revenue and EV/LTM gross profit multiples for K2M, based on the merger consideration, to the corresponding multiples for each selected transaction, as well as K2M’s implied multiples of EV/projected FTM revenue and EV/projected FTM gross profit, based on the merger consideration, to the corresponding multiples for each selected transaction. LTM revenues and LTM gross profit for K2M were based on historical financial data for the 12 months ended June 30, 2018 provided by K2M management. Projected FTM revenues and FTM gross profit for K2M were for the 12 months beginning June 30, 2018 and were based on estimates of K2M management. FTM revenues and FTM gross profit for the selected transactions were based on selected Wall Street research estimates.

The analysis indicated the following multiples:

Based on this analysis, Piper Jaffray noted that, with respect to K2M, each of the EV/revenue and EV/gross profit multiples fell between the 75th percentile and the mean range of implied EV/revenue or EV/gross profit multiples, as applicable, for the selected business profile M&A transactions. In addition, Piper Jaffray observed that the range of implied per share values for K2M common stock based on the mean and median for each analysis, yielded the following, as compared to the merger consideration:

Premiums Paid Analysis

Piper Jaffray reviewed publicly available information for selected completed or pending M&A transactions to determine the premiums paid in such transactions over recent trading prices of the target companies prior to

announcement of the transaction. Piper Jaffray selected transactions for which Piper Jaffray considered the target to be a North American public medical technology company, and applied, among other things, the following criteria:

Based on these criteria, Piper Jaffray reviewed the resulting 46 transactions, and the table below shows a comparison of premiums paid in the selected transactions over certain time periods to the premium that would be paid to the holders of K2M common stock based on the merger consideration.

The analysis indicated the following premiums:

The premiums paid analysis showed that the premiums over the market prices for K2M common stock implied by the merger consideration (other than one day prior) fell between the mean and the median range of premiums paid in the selected M&A transactions, and the premiums paid for one day prior fell between the median and the 25th percentile range of premiums paid in the selected M&A transactions. In addition, Piper Jaffray observed that the range of implied per share values for K2M common stock, based on the mean and median for each analysis for premiums paid for one day prior, applied to both K2M’s one day prior and 30-day VWAP, and 4 weeks prior, yielded the following, as compared to the merger consideration.

Discounted Cash Flows Analysis

Using a discounted cash flows analysis, Piper Jaffray calculated an estimated range of theoretical EVs for K2M based on the net present value of (i) projected unlevered free cash flows from June 30, 2018 to December 31, 2022, discounted back to June 30, 2018 and (ii) a projected terminal value at December 31, 2022 based upon revenue exit multiples ranging from 4.0x to 5.0x, which range was selected based on Piper Jaffray’s professional judgment, discounted back to June 30, 2018. The estimates of free cash flows for each year and terminal year value were calculated from certain non-public, unaudited and prospective financial information provided by K2M management, which was provided to Piper Jaffray by K2M and is described under “—Financial Projections.” Piper Jaffray calculated the range of net present values for unlevered free cash flows for such periods and for the terminal value based on a range of discount rates ranging from 10.3% to 12.3%, based on its estimation of K2M’s weighted average cost of capital using the capital asset pricing model.

This analysis resulted in implied per share values for K2M common stock ranging from $23.90 to $31.69. Piper Jaffray observed that the merger consideration was within the range of implied per share values derived from this analysis.

Other Information—Company Analyst Price Targets

Piper Jaffray also noted for the Board the following additional information that was not relied upon in rendering its opinion, but was provided for informational purposes.

Piper Jaffray reviewed selected Wall Street research equity analyst per share target prices for shares of K2M’s common stock as of August 28, 2018. The range of these target prices was $20.00 to $29.00, with an average target price of $25.88.

Miscellaneous

The summary set forth above does not purport to contain a complete description of the analyses performed by Piper Jaffray and reviewed with the Board. The preparation of a fairness opinion is not necessarily susceptible to partial analysis or summary description. Piper Jaffray believes that its analyses and the summary set forth above must be considered as a whole and that selecting portions of its analyses or of the summary, without considering the analyses as a whole or all of the factors included in its analyses, would create an incomplete view of the processes underlying the analyses set forth in the Piper Jaffray opinion. In arriving at its opinion, Piper Jaffray considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis. Instead, Piper Jaffray made its determination as to fairness on the basis of its experience and financial judgment after considering the results of all of its analyses. In addition, the ranges of valuations resulting from any particular analysis described above should not be taken to be Piper Jaffray’s view of the actual value of K2M common stock.

None of the selected companies or transactions used in the analyses above is directly comparable to K2M or the merger. Accordingly, an analysis of the results of the comparisons is not purely mathematical; rather, it involves considerations and judgments concerning differences in historical and projected financial and operating characteristics of the selected companies and target companies in the selected transactions and other factors that could affect the public trading value or transaction value of the companies involved.

Piper Jaffray performed its analyses for purposes of providing its opinion to the Board. In performing its analyses, Piper Jaffray made numerous assumptions with respect to industry performance, general business and economic conditions and other matters. Certain of the analyses performed by Piper Jaffray are based upon financial projections of future results furnished to Piper Jaffray by K2M management, which are not necessarily indicative of actual future results and may be significantly more or less favorable than actual future results. These financial projections are inherently subject to uncertainty because, among other things, they are based upon numerous factors or events beyond the control of the parties or their respective advisors. Piper Jaffray does not assume responsibility if future results are materially different from projected financial results.

Piper Jaffray’s opinion was one of many factors taken into consideration by the Board in making the determination to approve the merger agreement. While Piper Jaffray provided advice to the Board during K2M’s negotiations with Stryker, the Board determined the amount of merger consideration, and Piper Jaffray did not recommend any specific amount or type of merger consideration.

Piper Jaffray relied upon and assumed, without assuming liability or responsibility for independent verification, the accuracy and completeness of all information that was publicly available or was furnished, or otherwise made available, to Piper Jaffray or discussed with or reviewed by Piper Jaffray. Piper Jaffray further relied upon the assurances of K2M management that the financial information provided to Piper Jaffray by K2M management was prepared on a reasonable basis in accordance with industry practice, and that K2M management was not aware of any information or facts that would make any information provided to Piper Jaffray incomplete or misleading. Without limiting the generality of the foregoing, for the purpose of its opinion, Piper Jaffray assumed that with respect to financial forecasts, estimates and other forward-looking information reviewed by Piper Jaffray, that such information was reasonably prepared based on assumptions reflecting the best currently available estimates and judgments of K2M management as to the expected future results of operations and financial condition of K2M. Piper Jaffray expressed no opinion as to any such financial forecasts, estimates or forward-looking information or the assumptions on which they were based. Piper Jaffray relied, with consent of the Board, on advice of the outside counsel and the independent accountants to K2M, and on the assumptions of K2M management, as to all accounting, legal, tax and financial reporting matters with respect to K2M and the merger agreement.

In arriving at its opinion, Piper Jaffray assumed that the executed merger agreement would be in all material respects identical to the last draft reviewed by Piper Jaffray. Piper Jaffray relied upon and assumed, without independent verification, that (i) the representations and warranties of all parties to the merger agreement and all other related documents and instruments that are referred to therein are true and correct in all respects material to its analysis, (ii) each party to such agreements will fully and timely perform all of the covenants and agreements required to be performed by such party in all respects material to Piper Jaffray’s analysis, (iii) the merger will be consummated pursuant to the terms of the merger agreement without amendments thereto and (iv) all conditions to the

consummation of the merger will be satisfied without waiver by any party of any conditions or obligations thereunder. Additionally, Piper Jaffray assumed that all the necessary regulatory approvals and consents required for the merger will be obtained in a manner that would not adversely affect K2M or the contemplated benefits of the merger.

In arriving at its opinion, Piper Jaffray did not perform any appraisals or valuations of any specific assets or liabilities (fixed, contingent or other) of K2M, and Piper Jaffray was not furnished or provided with any such appraisals or valuations, nor did Piper Jaffray evaluate the solvency of K2M under any state or federal law relating to bankruptcy, insolvency or similar matters. The analyses performed by Piper Jaffray in connection with its opinion were going concern analyses. Piper Jaffray expressed no opinion regarding the liquidation value of K2M or any other entity. Without limiting the generality of the foregoing, Piper Jaffray undertook no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which K2M or any of its affiliates is a party or may be subject, and at K2M’s direction and with its consent, Piper Jaffray’s opinion made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters. Piper Jaffray also assumed that neither K2M nor Stryker is party to any material pending transaction, including without limitation, any financing, recapitalization, acquisition or merger, divestiture or spin-off, other than the merger.

Piper Jaffray’s opinion was necessarily based upon the information available to it and facts and circumstances as they existed and were subject to evaluation on the date of its opinion. Events occurring after the date of its opinion could materially affect the assumptions used in preparing its opinion. Piper Jaffray did not express any opinion as to the price at which shares of K2M common stock may trade following announcement of the merger or at any future time. Piper Jaffray did not undertake to reaffirm or revise its opinion or otherwise comment upon any events occurring after the date of its opinion and does not have any obligation to update, revise or reaffirm its opinion.

Piper Jaffray’s opinion addressed solely the fairness, from a financial point of view, to holders of K2M common stock (other than the Excluded Shares) of the proposed merger consideration set forth in the merger agreement and did not address any other terms or agreement relating to the merger or any other terms of the merger agreement. Piper Jaffray was not requested to opine as to, and its opinion does not address, the basic business decision to proceed with or effect the merger, the merits of the merger relative to any alternative transaction or business strategy that may be available to K2M, Stryker’s ability to fund the merger consideration, or any other terms contemplated by the merger agreement or the fairness of the merger to any other class of securities, creditor or other constituency of K2M. Furthermore, Piper Jaffray expressed no opinion with respect to the amount or nature of compensation to any officer, director or employee of any party to the merger, or any class of such persons, relative to the compensation to be received by holders of K2M common stock in the merger or with respect to the fairness of any such compensation.

Information about Piper Jaffray

As a part of its investment banking business, Piper Jaffray is regularly engaged in the valuation of businesses in the medical technology and other industries and their securities in connection with mergers and acquisitions, underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. The Board selected Piper Jaffray to be its financial advisor and render its fairness opinion in connection with the merger on the basis of such experience and its familiarity with K2M.

Piper Jaffray acted as a financial advisor to K2M in connection with the merger and will receive a fee, currently estimated to be approximately $21.4 million from K2M, which is contingent upon the consummation of the merger, except for $1 million of such fee which has been earned by Piper Jaffray for rendering its fairness opinion and is creditable against the total fee. The opinion fee was not contingent upon the consummation of the merger or the conclusions reached in Piper Jaffray’s opinion. K2M has also agreed to indemnify Piper Jaffray against certain liabilities and reimburse Piper Jaffray for certain expenses in connection with its services. Piper Jaffray has in the past provided financial advisory and financing services to K2M and may continue to do so and has received, and may receive, fees for the rendering of such services. In particular, in the past three years, Piper Jaffray has acted as co-manager on K2M’s 2018 private offering for $75 million aggregate principal amount of the 2025 Convertible Notes, sole book-running manager of K2M’s 2017 sale of 4 million shares of K2M common stock by selling stockholders, and sole bookrunning manager on K2M’s 2016 private offering for $50 million aggregate principal amount of the 2036 Convertible Notes, for which Piper Jaffray received aggregate consideration of approximately $2.9 million. In addition, in the ordinary course of its business, Piper Jaffray and its affiliates may actively trade securities of K2M and Stryker for its own account or the account of its customers and, accordingly, may at any time hold a long or short position in such securities. In the ordinary course of its business, Piper Jaffray may also publish

research on K2M common stock. Piper Jaffray may also, in the future, provide investment banking and financial advisory services to K2M, Stryker or entities that are affiliated with K2M or Stryker, for which Piper Jaffray would expect to receive compensation. Piper Jaffray has not received fees or other compensation from Stryker for any services rendered to Stryker in the two years prior to the issuance of its fairness opinion.

Consistent with applicable legal and regulatory requirements, Piper Jaffray has adopted policies and procedures to establish and maintain the independence of Piper Jaffray’s research department and personnel. As a result, Piper Jaffray’s research analysts may hold opinions, make statements or recommendations and/or publish research reports with respect to K2M and the merger and other participants in the merger that differ from the opinions of Piper Jaffray’s investment banking personnel.

Financial Projections

K2M has historically prepared and provided public guidance as to its projected financial and operational results for the upcoming fiscal year in its press releases announcing its financial results for the immediately preceding quarter or year, as applicable. K2M management has also maintained longer range financial projections for internal budgeting and planning purposes, which K2M management reviews with the Board from time to time. However, other than the financial guidance discussed above, K2M does not in the ordinary course make public projections as to future performance, earnings or other results and is especially cautious of making financial forecasts for extended periods because of the unpredictability of the underlying assumptions and estimates. However, in connection with the Board’s evaluation of the proposed merger, our management prepared certain, unaudited, stand-alone, financial forecasts regarding our anticipated future operations, which we refer to as “Projections,” described below. Our management provided the Projections to the Board for review in connection with the Board’s evaluation of the proposed merger, and to Piper Jaffray, our financial advisor in connection with the proposed merger. Our management also provided the Projections to Stryker.

The Projections were developed for internal use and for use by our financial advisor, and were not prepared with a view toward public disclosure and do not necessarily comply with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts or U.S. Generally Accepted Accounting Principles (“GAAP”). Our independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the Projections, and does not express an opinion or any form of assurance related thereto. Such non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and such non-GAAP financial measures as used by K2M may not be comparable to similarly titled amounts used by other companies. The Projections and summaries of the Projections are not being included in this proxy statement to influence any K2M stockholder’s decision whether to vote for the merger, but are being included because they were made available to the Board and our financial advisor for their respective evaluation of the proposed merger. The Projections are not intended to be considered as public guidance of our financial performance.

The Projections, while presented with numerical specificity, necessarily were based on numerous estimates, variables and assumptions that are inherently uncertain and many of which are beyond our control. Because the Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year. The assumptions upon which the Projections were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. The Projections also reflect assumptions as to certain business decisions that are subject to change. Furthermore, the Projections do not take into account any circumstances or events occurring after the date they were prepared, including the announcement of the potential acquisition of K2M by Stryker pursuant to the merger agreement or our compliance with our covenants under the merger agreement. Important factors that may affect actual results and result in the Projections not being achieved include, but are not limited to, the risk factors described in our annual report on Form 10-K for the fiscal year ended December 31, 2017, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, the Projections may be affected by our ability to achieve strategic goals, objectives and targets over the applicable period.

The Projections are forward-looking statements. For information on factors that may cause our future financial results to materially vary, see the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 21 of this proxy statement.

Accordingly, there can be no assurance that the Projections will be realized, and actual results may vary materially from those shown. The inclusion of the Projections in this proxy statement should not be regarded as an indication that we or any of our affiliates, advisors, including Piper Jaffray, or representatives considered or consider the Projections to be predictive of actual future events, and they should not be relied upon as such. Neither we nor any of our affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the Projections and none of them undertakes any obligation to update or otherwise revise or reconcile the Projections to reflect circumstances existing after the respective dates on which they were prepared or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Projections are shown to be in error. We do not intend to make publicly available any update or other revision to the Projections, except as otherwise required by law. Neither we nor any of our affiliates, advisors, officers, directors or representatives has made or makes any representation to any K2M stockholder or other person regarding our ultimate performance compared to the information contained in the Projections or that the Projections will be achieved. We have made no representation to Stryker in the merger agreement or otherwise concerning the accuracy or reliability of the Projections.

The following table sets forth the Projections and certain historical financial information for comparison purposes:

Interests of K2M’s Executive Officers and Directors in the Merger

When considering the recommendation of the Board that you vote to approve the merger proposal, you should be aware that, aside from their interests as K2M stockholders, K2M’s directors and executive officers have interests in the merger that are different from, or in addition to, the interests of K2M stockholders generally. This includes, for instance, payments that our executive officers are entitled to receive under K2M’s incentive plans, as described more fully below.

With regard to our directors serving on the Board (other than Mr. Eric D. Major and Dr. John P. Kostuik, whose interests are as executive officers), these interests relate to the impact of the transaction on the directors’ outstanding equity awards (which consist of restricted stock and stock options) and the provision of indemnification and insurance arrangements pursuant to the merger agreement and K2M’s certificate of incorporation and bylaws, which reflect that such directors may be subject to claims arising from their service on the Board.

With regard to our executive officers, these interests include coverage under insurance arrangements, and the possible receipt of the following types of payments and benefits that may be triggered by or otherwise relate to the merger, assuming the merger occurred on September 11, 2018 and, where applicable, the executive officers’ employment was terminated by us without “cause” or by the executive officer for “good reason” (each as defined below) on September 11, 2018 (or before the merger if the executive officer’s termination is determined to be in connection with the merger):

Treatment of Director and Executive Officer Common Stock

K2M’s directors and executive officers will receive the same merger consideration as other stockholders of $27.50 in cash, without interest, subject to any applicable withholding taxes, for each share of K2M common stock that they own at the effective time. For information regarding beneficial ownership of K2M common stock by each of K2M’s current directors, K2M’s named executive officers and all directors and executive officers as a group, see the section entitled “Security Ownership of Certain Beneficial Owners and Management” beginning on page 91.

Treatment of Director and Executive Officer Equity Awards

As described under “The Merger Agreement—Treatment of K2M Equity Awards” beginning on page 30, the merger agreement provides that each option to purchase shares of K2M common stock and each share of K2M restricted stock will be treated as set forth below. None of our executive officers hold restricted stock units.

Treatment of Stock Options

Each option to purchase shares of K2M common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the excess, if any, of the merger consideration over the per share exercise price of such option, and (B) the number of shares of K2M common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the merger consideration will be cancelled without payment.

Treatment of Restricted Stock Awards

Each K2M restricted stock award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the merger consideration and (B) the number of shares of K2M common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law.

The table below shows the outstanding options and shares of restricted stock held by our executive officers as of September 11, 2018 and, for illustrative purposes, the value our executive officers would receive in respect of these outstanding options and shares of restricted stock in connection with the merger.

The table below shows the outstanding options and restricted stock held by our directors as of September 11, 2018 and, for illustrative purposes, the value our directors would receive in respect of these outstanding options and restricted stock in connection with the merger.

Retention Bonuses

K2M will establish a retention program to encourage K2M employees, which includes certain executive officers, to remain employed with K2M and the surviving corporation prior to and following the effective time (the “Retention Program”). The Retention Program allows for payments of retention bonus awards. Each individual’s retention bonus will vest as to 25% on the closing date, which portion will be paid at or promptly following the closing, and 75% of such bonus will vest on June 30, 2019 and will be paid at or promptly following such date, in each case, subject to the individual’s continued employment through each vesting date. However, if the individual’s employment is terminated without “cause” (as defined in K2M’s 2016 Omnibus Incentive Plan) prior to any vesting date, the individual will receive any unpaid portion of such bonus promptly following the individual’s termination date. Individual awards to be made under the Retention Program are determined by K2M’s chief executive officer in consultation with Stryker.

Set forth below is an estimate of the amounts payable to certain of the Company’s named executive officers under the Retention Program and the estimated amount payable to the Company’s other executive officer under the Retention Program.

Change in Control Severance Payments and Other Benefits

Each executive officer will receive certain severance payments and other benefits if terminated in connection with a change in control. The below payment estimates quantify such benefits, assuming that a merger occurs on September 11, 2018 and taking into account each executive’s equity ownership as of September 11, 2018. The amounts quantified below are generally due only upon a qualifying termination of employment in connection with a change in control, except that (i) unvested stock options, restricted stock awards and restricted stock unit awards will fully vest upon a change in control (ii) 25% of each retention bonus will vest on the closing date generally subject to the individual’s continued employment through closing and (iii) 75% of each retention bonus will vest on June 30, 2019, generally subject to the individual’s continued employment through such date. The latest practicable date as of which we could estimate these payments was September 11, 2018, and the amounts depict a payment scenario in

2018. Please note that if the merger were consummated in the first quarter of 2019, and payments were to be made in respect of qualifying terminations of employment occurring in the first quarter of 2019 based on awards related to the 2019 plan year, it is currently anticipated that such payments in the aggregate would be smaller than what is disclosed below.

Employment Agreements

K2M has employment agreements with each of its named executive officers that provide for, among other things, severance payments and other benefits in cases of certain employment termination scenarios. Under the employment agreements, if (i) the executive’s employment is terminated by us without “cause,” as described below or (ii) the executive resigns for “good reason,” as described below, in each case, during the 12-month period following a change-in-control, then K2M will pay or provide the executive officers:

In addition, upon a change in control, all unvested options, restricted stock and restricted stock units held by these executives will vest and become exercisable.

Under the employment agreements, the executive officers are subject to a perpetual confidentiality covenant and covenants of non-competition and non-solicitation of K2M’s employees and customers for the period of their employment and for two years thereafter.

Definitions

With respect to the foregoing change-in-control agreements, “cause”, “change in control” and “good reason” are defined as follows.

“Cause” means:

“Change in Control” means the first occurrence of:

“Good Reason” means the occurrence without the executive’s written consent and which is not remedied by K2M within thirty (30) days after notice is provided to K2M:

Retention Agreement

K2M has a retention agreement with Mr. Lane Major that governs the terms of his employment following a “change of control” (as such term is defined in our 2016 Omnibus Incentive Plan). Under the retention agreement, upon a change of control, all unvested options, restricted stock and restricted stock units (to the extent held by Mr. Lane Major) will become fully vested and, in the case of options, exercisable. In addition, if within 12 months following a change of control, (i) Mr. Lane Major is not employed in the “same capacity” (as defined in the retention agreement), (ii) Mr. Lane Major is assigned duties inconsistent or inappropriate to his status and office with the entity which employs Mr. Lane Major following the change of control, (iii) the nature or status of Mr. Lane Major’s responsibilities are diminished in any way from those in effect immediately prior to the change of control, (iv) Mr. Lane Major’s direct or indirect reporting relationship adversely changes from those in effect immediately prior to the change of control, (v) Mr. Lane Major’s level of compensation is decreased or (vi) the principal business offices are relocated to a location that is more than 30 miles from Leesburg, Virginia, then commencing on Mr. Lane Major’s termination, Mr. Lane Major will be entitled to receive a payment equal to 12 months of base salary and six months of continuing coverage under our group health plans at the same level in effect immediately prior to the change of control.

Directors’ and Officers’ Indemnification and Insurance

Stryker and Merger Sub have agreed that all rights to indemnification and exculpation from liabilities, including advancement of expenses, for acts or omissions occurring at or prior to the effective time existing as of August 29, 2018 in favor of the directors or officers of K2M at or prior to the effective time as provided in our certificate of

incorporation, amended and restated bylaws or any indemnification contract between such directors or officers and K2M (in each case, as in effect on August 29, 2018) will survive the merger and continue in full force and effect. For a period of six years from the effective time, the surviving corporation is required to, and Stryker will cause the surviving corporation to, maintain in effect the exculpation, indemnification and advancement of expenses equivalent to the provisions of our certificate of incorporation and amended and restated bylaws as in effect immediately prior to the effective time solely with respect to acts or omissions occurring prior to the effective time and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any of the directors or officers of K2M at or prior to the effective time; however, all rights to indemnification in respect of any action pending or asserted or any claim made for indemnification within such period shall continue until the disposition of such action or resolution of such claim. From and after the effective time, Stryker is required to guarantee and stand surety for, and is required to cause the surviving corporation to honor, in accordance with their respective terms, each of the covenants contained in the merger agreement related to the directors’ and officers’ indemnification and insurance.

Prior to the effective time, K2M is required to or, if K2M is unable to, Stryker will cause the surviving corporation as of or after the effective time to, purchase a 6-year prepaid “tail” policy, with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under K2M’s existing policies of directors’ and officers’ liability insurance and fiduciary liability insurance, with respect to matters arising on or before the effective time (including in connection with the merger agreement and the transactions or actions contemplated by the merger agreement), and Stryker is required to cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to be honored by the surviving corporation, and no other party will have any further obligation to purchase or pay for insurance hereunder; however, K2M will not pay, and the surviving corporation will not be required to pay, in excess of 300% of the last annual premium paid by K2M prior to the date of the merger agreement in respect of such “tail” policy. If K2M or the surviving corporation for any reason fail to obtain such “tail” insurance policies prior to, as of or after the effective time, Stryker is required to, for a period of 6 years from the effective time, cause the surviving corporation to maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by K2M with respect to matters arising on or before the Effective Time; however, after the effective time, Stryker will not be required to pay annual premiums in excess of 300% of the last annual premium paid by K2M prior to the date of the merger agreement in respect of the coverage required to be obtained pursuant hereto, but in such case shall purchase as much coverage as reasonably practicable for such amount.

Other Interests

On August 29, 2018, in contemplation of the merger, Stryker entered into an offer letter with Eric Major, the Company’s Chief Executive Officer and President, to serve as President of Stryker’s Spine division, beginning on, and subject to the occurrence of, the closing date of the merger. Under the terms of the offer letter, Mr. Eric Major will receive an annual base salary of $500,000 and will be eligible to receive an annual performance bonus targeted at 50% of his annual base salary. In addition, during Stryker’s February 2019 grant cycle, Mr. Eric Major will receive an award of restricted stock units with a grant date value equal to approximately $750,000. In exchange for his agreement to terminate his current employment agreement with K2M (including his ability to terminate his employment for good reason under the terms of his K2M employment agreement), Mr. Eric Major also will receive two additional one-time restricted stock unit grants during the February 2019 grant cycle, the first of which will have a grant date value of approximately $4,000,000 and will vest on the third anniversary of the grant date, subject to his continued employment through such date, and the second of which will have a grant date value of approximately $1,000,000 and will vest on the third anniversary of the grant date, subject to achievement of specified performance goals. Under the offer letter, Mr. Eric Major is also entitled to a severance benefit payment equal to 12 months of his base salary and a lump sum payment to offset 12 months of COBRA premium costs in the event his employment is terminated by Stryker without “cause” (which is defined in the same way as under his employment agreement with K2M), subject to his execution and non-revocation of a separation agreement and general release. Mr. Eric Major also is required to execute Stryker’s form of Confidentiality, Intellectual Property, Non-Competition and Non-Solicitation Agreement.

As of the date of this proxy statement, other than the arrangements discussed in this proxy statement, none of our executive officers has entered into any agreement with Stryker regarding employment with, or compensation from, the surviving corporation or Stryker on a going-forward basis following the completion of the merger. However, Stryker (or its representatives) and some or all of our executive officers may have discussions from time to time with respect to such arrangements.

Quantification of Potential Merger-Related Payments to Named Executive Officers

The following table, “Golden Parachute Compensation,” along with its footnotes, shows the disclosure required by Item 402(t) of Regulation S-K regarding the amounts of payments and benefits payable to K2M’s named executive officers that are based on or otherwise relate to the merger. The amounts detailed below assume that the merger occurred on September 11, 2018 and, where applicable, the named executive officer’s employment was terminated by K2M without “cause” or by the named executive officer for “good reason” on September 11, 2018 (or before, if his termination is determined to be in connection with the merger). The table below takes into account each named executive officer’s equity ownership as of September 11, 2018. The actual amounts payable will depend on the effective time of the merger and the date of such termination, as applicable. More detail on the payments and benefits are set forth above in this section of this proxy statement.

The information contained in the following table and accompanying footnotes are subject to a non-binding, advisory vote of K2M’s stockholders, as described under the section titled “Advisory Vote on Named Executive Officer Merger-Related Compensation Proposal (Proposal 2)” beginning on page 88.

Golden Parachute Compensation

The cash severance arrangements described above are double-trigger (i.e., they become payable only upon a termination following or otherwise in connection with a change in control, rather than solely as a result of a change in control (i.e., single-trigger). The annual incentive award for the 2018 fiscal year described above is single-trigger. 25% of Mr. Cole’s retention bonus is single-trigger, and 75% of his rentention bonus is double-trigger.

Financing of the Merger

The consummation of the merger is not subject to any financing conditions. We anticipate that the total amount of funds necessary to consummate the merger and the related transactions, not including fees and expenses, will be approximately $1.40 billion, including the estimated funds needed to (i) pay our stockholders the merger consideration due to them under the merger agreement; (ii) make payments in respect of outstanding K2M stock options, K2M restricted stock awards and K2M restricted stock unit awards pursuant to the merger agreement; and (iii) pay the outstanding net indebtedness of K2M, including the consideration payable to holders of the outstanding Convertible Notes. We understand that Stryker expects to use cash and other available funds to fund the merger.

Regulatory Clearances and Approvals Required for the Merger

U.S. Antitrust

Under the HSR Act, we cannot complete the merger until we have given notification and furnished information to the FTC and the DOJ, and until the applicable waiting period has expired or has been terminated. On September 13,

2018, K2M and Stryker each filed a premerger notification and report form under the HSR Act, as a result of which the applicable waiting period would be expected to expire on October 15, 2018, at 11:59 p.m., Eastern Time, unless otherwise earlier terminated or extended by the antitrust authorities.

Foreign Antitrust

In addition, pursuant to conditions to the consummation of the merger set forth in the merger agreement, the parties are seeking governmental antitrust or merger control approvals in specified countries,

General

Under the merger agreement, K2M, Stryker and Merger Sub have agreed to use reasonable best efforts to consummate and make effective the transactions contemplated by the merger agreement and to cause the conditions to the merger to be satisfied, including to obtain all necessary actions or non-actions, consents and approvals from governmental authorities or other third parties. Subject to certain limitations, Stryker will take, or cause to be taken (including by its subsidiaries), any and all steps and to make, or cause to be made, any and all undertakings necessary to resolve such objections, if any, that a governmental authority may assert under any antitrust law with respect to the transactions contemplated by the merger agreement, and to avoid or eliminate any impediment under any antitrust law that may be asserted by any governmental authority with respect to the transactions contemplated by the merger agreement.

While we have no reason to believe it will not be possible to obtain regulatory approvals in a timely manner, there is no certainty that these approvals will be obtained within the period of time contemplated by the merger agreement, if at all.

The approval of any regulatory application or completion of regulatory review merely implies the satisfaction of certain regulatory criteria, which do not include review of the merger from the standpoint of the adequacy of the consideration to be received by K2M stockholders. Further, regulatory approvals or reviews do not constitute an endorsement or recommendation of the merger.

Material U.S. Federal Income Tax Consequences of the Merger

The exchange of K2M common stock for cash in the merger will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state and local and other tax laws. In general, a U.S. holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 93) whose shares of K2M common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.

You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 93 and consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Delisting and Deregistration of K2M Common Stock

As promptly as practicable following the completion of the merger, the K2M common stock currently listed on the NASDAQ will cease to be listed on the NASDAQ and will be deregistered under the Exchange Act.

Appraisal Rights

If the merger is completed, K2M stockholders will be entitled to appraisal rights under Section 262 of the DGCL, provided that they comply with the conditions and requirements established therein.

Under Section 262 of the DGCL, K2M stockholders of record who do not wish to accept the $27.50 per share merger consideration provided for in the merger agreement have the right to demand appraisal of their shares of K2M common stock and to receive payment in cash of the fair value of their shares of K2M common stock as of the effective time of the merger, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be such fair value (or, in certain circumstances described below, on the difference between the

amount determined to be the fair value and the amount paid to each stockholder entitled to appraisal prior to the entry of judgment in the appraisal proceeding), provided that they comply with the conditions and requirements established in Section 262 of the DGCL. The “fair value” per share of your shares of K2M common stock as determined by the Delaware Court of Chancery in an appraisal proceeding may be more or less than, or the same as, the merger consideration that you are otherwise entitled to receive under the terms of the merger agreement. K2M stockholders who do not vote in favor of the merger proposal who properly demand appraisal for their shares in compliance with the provisions of Section 262 of the DGCL, who do not withdraw such demand or otherwise waive or lose their right to appraisal and who comply with the other requirements to exercise appraisal rights under the DGCL will be entitled to appraisal rights under the DGCL. Strict compliance with the statutory procedures in Section 262 of the DGCL is required. Failure to follow precisely any of the statutory requirements may result in the loss of your appraisal rights.

This section is intended only as a brief summary of certain provisions of the Delaware statutory procedures that a stockholder must follow in order to seek and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and the law pertaining to appraisal rights under the DGCL, and is qualified in its entirety by reference to Section 262 of the DGCL, the full text of which is attached to this proxy statement as Annex C, in its entirety. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262 of the DGCL.

Under Section 262 of the DGCL where a merger agreement is to be submitted for adoption at a meeting of stockholders, K2M must notify the stockholders who were stockholders of record on the record date for notice of such meeting with respect to shares for which appraisal rights are available, not less than 20 days before the meeting to vote on the merger, that appraisal rights will be available. A copy of Section 262 of the DGCL must be included with such notice. This proxy statement constitutes K2M’s notice to our stockholders that appraisal rights are available in connection with the merger and the full text of Section 262 of the DGCL is attached to this proxy statement as Annex C, in compliance with the requirements of Section 262 of the DGCL. If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 of the DGCL contained in Annex C. Failure to comply timely and properly with the requirements of Section 262 of the DGCL may result in the loss of your appraisal rights under the DGCL. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of K2M common stock, K2M believes that if a stockholder is considering exercising such rights, such stockholder should seek the advice of legal counsel.

If you wish to demand appraisal of your shares of K2M common stock, you must satisfy each of the following conditions:

If you fail to comply with any of the requirements under Section 262 of the DGCL to perfect your appraisal rights and the merger is completed, your shares of K2M common stock will be converted into the right to receive payment of merger consideration for your shares of K2M common stock as provided for in the merger agreement and you will lose your appraisal rights with respect to your shares of K2M common stock.

A holder of shares of K2M common stock wishing to exercise appraisal rights must hold of record the shares of K2M common stock on the date the written demand for appraisal is made and must continue to hold the shares of K2M common stock of record through the effective time of the merger. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted “FOR” the merger proposal, and it will result in the loss

of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote “AGAINST” the merger proposal or abstain from voting on the merger proposal. Voting against or failing to vote for the merger proposal by itself does not constitute a demand for appraisal within the meaning of Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote on the merger proposal.

All demands for appraisal should be addressed to K2M Group Holdings, Inc., Attention: General Counsel, 600 Hope Parkway SE, Leesburg, Virginia 20175, and must be delivered to K2M before the vote is taken to approve merger proposal at the special meeting, and must be executed by, or on behalf of, the record holder of the shares of K2M common stock for which appraisal is demanded. The demand must reasonably inform K2M of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares of K2M common stock in connection with the merger. A stockholder’s failure to deliver to K2M the written demand for appraisal prior to the taking of the vote on the merger proposal at the special meeting of stockholders will result in the loss of appraisal rights.

Only a holder of record of shares of K2M common stock is entitled to demand an appraisal of the shares registered in that holder’s name. Accordingly, to be effective, a demand for appraisal by a stockholder of K2M common stock must be made by, or on behalf of, the record stockholder. The demand should set forth, fully and correctly, the record stockholder’s name as it appears on the stockholder’s stock certificate(s) or in the transfer agent’s records, in the case of uncertificated shares, should specify the stockholder’s mailing address and the number of shares registered in the stockholder’s name. The demand must state that the person intends thereby to demand appraisal of the stockholder’s shares in connection with the merger. The demand cannot be made by the beneficial owner if he or she does not also hold the shares of K2M common stock of record. The beneficial holder must, in such cases, have the registered owner, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of K2M common stock. If you hold your shares of K2M common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee and obtaining notice of the effective date of the merger.

If shares of K2M common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal must be made in that capacity. If the shares of K2M common stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner or owners. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of K2M common stock as a nominee for others, may exercise his or her right of appraisal with respect to the shares of K2M common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of K2M common stock as to which appraisal is sought. Where no number of shares of K2M common stock is expressly mentioned, the demand will be presumed to cover all shares of K2M common stock held in the name of the record owner. If a stockholder holds shares of K2M common stock through a broker who in turn holds the shares through a central securities depository nominee such as Cede & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as record owner.

Within 10 days after the effective time of the merger, the surviving corporation in the merger must give notice of the date that the merger became effective to each of K2M’s record stockholders who has demanded appraisal in accordance with Section 262 of the DGCL and who did not vote in favor of the merger proposal. At any time within 60 days after the effective time of the merger, any stockholder who has not commenced an appraisal proceeding or joined a proceeding as a named party may withdraw the stockholder’s demand and accept the consideration specified by the merger agreement for that stockholder’s shares of K2M common stock by delivering to the surviving corporation a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective time of the merger will require written approval of the surviving corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, with such approval conditioned upon such terms as the Delaware Court of Chancery deems just; provided, however that any stockholder who has not commenced an

appraisal proceeding or joined that proceeding as a named party may withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger within 60 days after the effective date of the merger. If the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or, if the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only the appraised value of his, her or its shares of K2M common stock determined in any such appraisal proceeding, plus interest, if any, which value could be less than, equal to or more than the consideration offered pursuant to the merger agreement.

Within 120 days after the effective time of the merger, but not thereafter, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 of the DGCL and is entitled to appraisal rights under Section 262 of the DGCL may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of K2M common stock held by all such stockholders. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon the surviving corporation. The surviving corporation has no obligation to file such a petition, has no present intention to file a petition and holders should not assume that the surviving corporation will file a petition. Accordingly, it is the obligation of the holders of K2M common stock to initiate all necessary petitions to perfect their appraisal rights in respect of shares of K2M common stock within the time prescribed in Section 262 of the DGCL and the failure of a stockholder to file such a petition within the period specified in Section 262 of the DGCL could nullify the stockholder’s previous written demand for appraisal. In addition, within 120 days after the effective time of the merger, any stockholder who has properly complied with the requirements of Section 262 of the DGCL and who did not vote in favor of the merger proposal, will be entitled to receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares of K2M common stock not voted in favor of the merger proposal and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within 10 days after such written request has been received by the surviving corporation or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A person who is the beneficial owner of shares of K2M common stock held either in a voting trust or by a nominee on behalf of such person for which appraisal has been properly demanded may, in such person’s own name, file a petition for appraisal or request from the surviving corporation such statement.

If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, then the surviving corporation will be obligated, within 20 days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares of K2M common stock and with whom agreements as to the value of their shares of K2M common stock have not been reached. After notice to stockholders who have demanded appraisal from the Register in Chancery, if such notice is ordered by the Delaware Court of Chancery, the Delaware Court of Chancery will conduct a hearing upon the petition and determine those stockholders who have become entitled to the appraisal rights provided by Section 262 of the DGCL. The Delaware Court of Chancery may require stockholders who have demanded appraisal of their shares of K2M common stock to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder. In addition, the Delaware Court of Chancery will dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares of K2M common stock entitled to appraisal exceeds 1% of the outstanding shares of K2M common stock, or (2) the value of the consideration provided in the merger for such total number of shares of K2M common stock exceeds $1 million.

After determination of the stockholders entitled to appraisal of their shares of K2M common stock, the Delaware Court of Chancery will appraise the shares of K2M common stock, determining their fair value as of the effective time of the merger after taking into account all relevant factors exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value (or, in certain circumstances described below, on the difference between the amount determined to be the fair value and the amount paid to each stockholder entitled to appraisal prior to the entry of judgment in the appraisal proceeding). When the fair value has been determined, the Delaware Court of Chancery will direct the payment of such value (with interest, if any), in the case of holders of uncertificated stock forthwith, and in the case of holders of shares represented by certificates upon surrender by those stockholders of the certificates representing their shares of K2M common stock. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any

surcharge) as established from time to time during the period between the effective time of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving company may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as described herein only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Delaware Court of Chancery, and (2) interest theretofore accrued, unless paid at that time.

You should be aware that an investment banking opinion as to the fairness from a financial point of view of the consideration to be received in a sale transaction, such as the merger, is not an opinion as to fair value under Section 262 of the DGCL. Although we believe that the per share merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the per share merger consideration. Moreover, we do not anticipate offering more than the per share merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262 of the DGCL, the “fair value” of a share of K2M common stock is less than the per share merger consideration. In determining “fair value,” the Delaware Court of Chancery is required to take into account all relevant factors. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.”

In determining the “fair value” of the shares, a Delaware Court is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other factors that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 of the DGCL to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery, as it deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of K2M common stock entitled to appraisal. Any stockholder who demanded appraisal rights will not, after the effective time of the merger, be entitled to vote shares of K2M common stock subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of K2M common stock, other than with respect to payment as of a record date prior to the effective time of the merger. If no petition for appraisal is filed within 120 days after the effective time of the merger, or if the stockholder otherwise fails to perfect, successfully withdraws or loses such holder’s right to appraisal, then the right of that stockholder to appraisal will cease and that stockholder’s shares of K2M common stock will be deemed to have been converted at the effective time of the merger into the right to receive the merger consideration (without interest) for his, her or its shares of K2M common stock pursuant to the merger agreement.

Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL may result in the loss of a stockholder’s appraisal rights.

In view of the complexity of Section 262 of the DGCL, K2M stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

THE MERGER AGREEMENT

The following discussion sets forth the principal terms of the merger agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this discussion, which is summary by nature. This discussion is not complete and is qualified in its entirety by reference to the complete text of the merger agreement. You are encouraged to read the merger agreement carefully in its entirety, as well as this proxy statement and any documents incorporated by reference herein, before making any decisions regarding the merger.

Explanatory Note Regarding the Merger Agreement

The merger agreement and this summary of its terms have been included to provide you with information regarding the terms of the merger agreement. Factual disclosures about K2M contained in this proxy statement or in K2M’s public reports filed with the SEC may supplement, update or modify the factual disclosures about K2M contained in the merger agreement and described in this summary. The representations, warranties and covenants made in the merger agreement by K2M, Stryker and Merger Sub were qualified and subject to important limitations agreed to by K2M, Stryker and Merger Sub in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to close the merger if the representations and warranties of the other party prove to be untrue, due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, and were not intended by the parties to the merger agreement to be a characterization of the actual state of facts or condition of K2M, Stryker or Merger Sub, except as expressly stated in the merger agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC, and in some cases were qualified by disclosures that were made by each party to the other, which disclosures are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement or in the respective public filings made by each of K2M or Stryker with the SEC.

Additional information about K2M may be found elsewhere in this proxy statement and K2M’s other public filings. See “Where You Can Find More Information” beginning on page 96 of this proxy statement.

When the Merger Becomes Effective

The closing of the merger will take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 155 North Wacker Drive, Chicago, Illinois 60606, at 10:00 a.m. (local time) on a date to be specified by the parties, but no later than the 2nd business day after the satisfaction or (to the extent permitted by law) waiver of the conditions set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or (to the extent permitted by law) waiver of such conditions), unless another time, date or place is agreed to in writing by K2M, Merger Sub and Stryker.

Concurrently with the closing, K2M will cause to be filed an appropriate, executed certificate of merger with respect to the merger with the Delaware Secretary of State as provided under the DGCL. The merger will become effective upon the filing of such certificate of merger, or at such later date and time as is agreed by Stryker and K2M and specified in such certificate of merger.

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

Upon the terms and conditions of the merger agreement, at the effective time, Merger Sub will merge with and into K2M and the separate corporate existence of Merger Sub will cease, with K2M continuing as the surviving corporation and a direct or indirect wholly owned subsidiary of Stryker. At the effective time, the certificate of incorporation of K2M will, by virtue of the merger, be amended and restated in its entirety as set forth in Exhibit A to the merger agreement and such amended and restated certificate of incorporation will be the certificate of incorporation of the surviving corporation until thereafter amended. At the effective time, Stryker will take such action necessary to change the bylaws of Merger Sub, as in effect immediately before the effective time, to be the

bylaws of the surviving corporation until thereafter amended. From and after the effective time, the directors of Merger Sub immediately before the effective time will be the initial directors of, and the officers of K2M immediately before the effective time will be the initial officers of, the surviving corporation and, in each case, will hold office until their respective successors are duly elected, designated or qualified, or until their earlier death, resignation or removal, in accordance with the surviving corporation’s certificate of incorporation and bylaws.

Effect of the Merger on K2M Common Stock

At the effective time, each share of K2M common stock issued and outstanding immediately prior to the effective time (other than canceled shares and dissenting shares) will be converted into the right to receive the merger consideration. From and after the effective time, such K2M common stock will no longer be outstanding and will automatically be cancelled, and will cease to exist, and each holder of certificates or book-entry shares, which immediately prior to the effective time represented such K2M common stock, will cease to have any rights with respect thereto, except the right to receive, upon surrender of such certificates or book-entry shares, the merger consideration.

At the effective time, any shares of K2M common stock that are canceled shares will automatically be cancelled and retired and will cease to exist, and no consideration or payment will be delivered in exchange for such shares.

The merger consideration will be adjusted appropriately to reflect the effect of any reclassification, recapitalization, exchange, stock split (including reverse stock split) or combination or readjustment of shares or any similar event or any stock dividend or stock distribution with a record date occurring on or after the date of the merger agreement and prior to the effective time.

Treatment of K2M Equity Awards

Options. Under the merger agreement, each option to purchase shares of K2M common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the excess, if any, of the merger consideration over the per share exercise price of such option, and (B) the number of shares of K2M common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the merger consideration will be cancelled without payment. Any consideration with respect to K2M options will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Restricted Stock Awards and Restricted Stock Unit Awards. The merger agreement also provides that each K2M restricted stock award and restricted stock unit award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the merger consideration and (B) the number of shares of K2M common stock subject to such K2M merger consideration in respect of each share of K2M common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Any consideration with respect to K2M restricted stock awards and restricted stock unit awards will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Effect Upon Employee Stock-Purchase Plan

The current offering period under the ESPP will end as scheduled on December 31, 2018, or, if earlier, four trading days prior to closing. K2M will, prior to the effective time, take all actions necessary to terminate the ESPP effective as of the closing and to provide that (a) K2M will not commence a new offering period, (b) no new participants will be permitted into the ESPP and (c) existing participants may not increase their elections with respect to the current offering period. Participants who purchased shares of K2M common stock under the ESPP will receive the same merger consideration in the same manner as other K2M stockholders for each such share of K2M common stock that such participant holds as of the effective time.

Payment for K2M Common Stock

Prior to or at the effective time, Stryker will deposit, or cause to be deposited, with a paying agent designated by Stryker that is reasonably acceptable to K2M, cash in an amount sufficient to pay the aggregate merger consideration.

As promptly as reasonably practicable after the effective time (and in any event within five business days after the effective time), Stryker will cause the paying agent to mail to each holder of record of certificates that immediately prior to the effective time represented outstanding shares of K2M common stock (i) a letter of transmittal, which will specify that delivery of certificates will be effected, and risk of loss and title to the certificates will pass only upon proper delivery of the certificates (or affidavits of loss in lieu thereof) to the paying agent and will be in a form and have such other customary provisions as reasonably specified by Stryker, and (ii) instructions for effecting the surrender of the certificates in exchange for cash in an amount equal to the merger consideration multiplied by the number of shares of K2M common stock previously represented by such certificates.

Upon surrender of a certificate (or an affidavit of loss in lieu thereof) for cancellation to the paying agent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be reasonably required by the paying agent, the holder of such certificate will be entitled to receive in exchange therefor as promptly as reasonably practicable cash in an amount equal to the merger consideration multiplied by the number of shares of K2M common stock previously represented by such certificate and the certificate (or affidavit of loss in lieu thereof) so surrendered will be cancelled. Each book-entry share representing shares of K2M common stock will automatically upon the effective time be entitled to receive, and Stryker will cause the paying agent to pay and deliver in exchange therefor as promptly as reasonably practicable after the effective time, cash in an amount equal to the merger consideration multiplied by the number of shares of K2M common stock previously represented by such book-entry share. The paying agent will accept such certificates (or affidavits of loss in lieu thereof) and make such payments and deliveries with respect to book-entry shares upon compliance with such reasonable terms and conditions as the paying agent may impose to effect an orderly exchange thereof in accordance with customary exchange practices. No interest will be paid or accrued for the benefit of holders of the certificates or book-entry shares on the cash payable upon the surrender or delivery thereof.

Representations and Warranties

The merger agreement contains representations and warranties of each of K2M, Stryker and Merger Sub, subject to certain qualifications or exceptions in the merger agreement and the disclosure schedules delivered in connection with the merger agreement, as to, among other things:

The merger agreement also contains representations and warranties of K2M, subject to certain qualifications or exceptions in the merger agreement and the disclosure schedules delivered in connection with the merger agreement, as to, among other things: