Adjustments to EPS. The calculations of Ending Year EPS and Base Year EPS will reflect the following adjustments.

Adjustments Based on EPS Goals. The Target Amount of units will initially be adjusted based upon performance against the average of the yearly EPS goals, as certified by the Committee (the “Adjusted EPS Units”). Fiscal year ​ and fiscal year ​ EPS goals will result in the following adjustment: 0% if performance is below the threshold level, 50% if performance is at the threshold level, 100% if performance is at target level, 200% if performance is above target, and 300% if performance is at or above the maximum level. Fiscal year ​ EPS goals will result in the following adjustment: 0% if performance is below the threshold level, 25% if performance is at the threshold level, 50% if performance is at the below target level, 100% if performance is at the target level, 200% if performance is at the above target level, and 300% if performance is at or above the maximum level. For performance that falls among any of the attainment levels between the threshold level and the maximum level, a proportionate percentage will be applied based on straight-line interpolation between the attainment levels. At the end of the Performance Period each individual year’s EPS performance will be added together and then divided by three to determine the average EPS performance for the Performance Period, which will then be applied to the Target Amount of units to determine the EPS payout.

EPS Performance Payout. The EPS Performance Payout shall be determined in accordance with the following performance schedule:

Base Year EPS. The term “Base Year EPS” means the Company’s actual adjusted diluted earnings per share and is calculated as the Adjusted Net Income (modified for any applicable adjustments set forth in the Appendix) divided by the Adjusted Diluted WAS, each as determined for the most recent Company fiscal year ended prior to the beginning of the Measurement Period.

If the Threshold Performance Target is attained and, except as provided in [Section 8(a)], you have remained in the continuous employment of Stryker through the Vesting Date, then subject to [Section 6] you shall become vested in the percentage of the EPS PSUs determined based on the Company’s Adjusted EPS Growth using the table below, applying straight line interpolation rounded down to the nearest whole number of EPS PSUs for Adjusted EPS Growth resulting in vested EPS PSUs between 50% and 100% or between 100% and 200%.

If the Company’s fully diluted net income per share for fiscal ​, as adjusted by the Committee for any Material Adjustments (“Actual EPS”), equals or exceeds the maximum net income per share set forth above, the maximum number of Units will be earned. If the Company’s Actual EPS is less than the threshold net income per share set forth above, all of the Units will be forfeited on the Determination Date. If the Company’s Actual EPS falls between the threshold, target and maximum levels specified in the table above, the number of Units that will be earned, and the number of Units that will be forfeited on the Determination Date, will be interpolated.

Adjustments Based on TSR Goals. After the end of the 3-year Performance Period, the final payout of PARSUs will be determined based on the Adjusted EPS Units, as further adjusted based upon performance against the TSR goal for the Performance Period, as certified by the Committee as follows: if relative TSR performance is in the bottom quartile (lower than 25th percentile), the Adjusted EPS Units will be reduced by 50% (but not below 0% of target) (using the example above, 150%-50% = 100%); if relative TSR is in the top quartile (higher than 75th percentile), the Adjusted EPS Units will be increased by 50% (capped at 300% of target) (using the example above, 150%+50% = 200%); if relative TSR performance is in the second or third quartile (from 25th percentile to 75th percentile), no additional adjustment will be made to the Adjusted EPS Units (using the example above, Adjusted EPS units will be at 150%). In no case may the total number of units exceed 300% of the Target Amount, excluding the effect of dividend equivalents.

CAGR = (Ending Year EPS /Base Year EPS)^(1/3)-1

In determining the Final Program Payout Percentage, the actual Adjusted EPS and FCF results may be subject to adjustment only for the following categories of adjustments to the extent such adjustments are significant to the payout and are made with the objective of maintaining the same degree of difficulty in meeting the Operating Performance Targets (collectively, the “Acceptable Adjustments”): # acquisitions and divestitures, # restructuring charges, # tax adjustments (tax reform), # goodwill and/or asset impairment, # foreign currency fluctuations (hyperinflation), # debt extinguishments/restructuring, # legal reserves and/or litigation settlements # accounting principle changes, # impact of pension (settlements/curtailment) and/or (10) other significant, non-recurring items.

Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law: