FORM 10-K: United States Securities and Exchange Commission

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________________________________________________________
FORM 10-K
_______________________________________________________________________
ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015

OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-09165
______________________________________________________________________ _
STRYKER CORPORATION
(Exact name of registrant as specified in its charter)
_______________________________________________________________________
Michigan 38-1239739
(State of incorporation) (I.R.S. Employer Identification No.)
2825 Airview Boulevard, Kalamazoo, Michigan 49002
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (269) 385-2600
_______________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered

Common Stock, $.10 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ý
NO o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES o
NO ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES ý
NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). YES ý
NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý

Accelerated filer o
Smaller reporting company o

Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o
NO ý
Based on the closing sales price of June 30, 2015 the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately
$33,330,554,534 . The number of shares outstanding of the registrant’s common stock, $.10 par value, was 372,982,213 on January 31, 2016 .
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement to be filed with the U.S. Securities and Exchange Commission relating to the 2016 Annual Meeting of Shareholders (the 2016
proxy statement) are incorporated by reference into Part III.
STRYKER CORPORATION 2015 Form 10-K
TABLE OF CONTENTS
PART I
Item 1. Business 1
Item 1A. Risk Factors 3
Item 1B. Unresolved Staff Comments 6
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. Mine Safety Disclosures 6
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 7
Item 6. Selected Financial Data 8
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 16
Item 8. Financial Statements and Supplementary Data 17
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements 17
Consolidated Statements of Earnings 18
Consolidated Statements of Comprehensive Income 18
Consolidated Balance Sheets 19
Consolidated Statements of Shareholders’ Equity 20
Consolidated Statements of Cash Flows 21
Notes to Consolidated Financial Statements 22
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 34
Item 9A. Controls and Procedures 34
Item 9B. Other Information 35
PART III
Item 10. Directors, Executive Officers and Corporate Governance 35
Item 11. Executive Compensation 35
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 35
Item 13. Certain Relationships and Related Transactions, and Director Independence 35
Item 14. Principal Accounting Fees and Services 35
PART IV
Item 15. Exhibits, Financial Statement Schedules 36
In 2015 we received clearance by the Food and Drug Administration (FDA) for
PART I our Mako total knee application. This expands our Mako product offerings of
partial knee and total hip applications to provide a comprehensive solution in
the robotic arm-assisted reconstructive surgery line.
ITEM 1. BUSINESS.
In 2014 we acquired certain assets of Small Bone Innovations, Inc. (SBi). SBi
General products are designed and promoted for upper and lower extremity small bone
Stryker Corporation is a global leader in medical technology with 2015 indications, with a focus on small joint replacement.
revenues of $9,946 and net earnings of $1,439. Stryker's products include
implants used in joint replacement and trauma surgeries; surgical equipment In 2012 we voluntarily recalled our Rejuvenate and ABG II Modular-Neck hip
and surgical navigation systems; endoscopic and communications systems; stems and terminated global distribution of these hip products. In November
patient handling and emergency medical equipment; neurosurgical, 2014 we entered into a settlement agreement to compensate eligible United
neurovascular and spinal devices; as well as other medical device products States patients who had surgery to replace their Rejuvenate and ABG II
used in a variety of medical specialties. Modular-Neck hip stems, known as a "revision surgery", prior to November 3,
2014. To date we have recorded charges to earnings totaling $1,824 ($2,056
Stryker was incorporated in Michigan in 1946 as the successor company to a
before $232 of insurance recoveries) representing the actuarially determined
business founded in 1941 by Dr. Homer H. Stryker, a prominent orthopaedic
low end of the range of probable loss to resolve this entire matter globally. In
surgeon and the inventor of several orthopaedic products. In the United States
2015 we made recall-related payments of $1,202 to eligible United States
most of Stryker's products are marketed directly to doctors, hospitals and
patients who had revision surgery to replace their Rejuvenate and/or ABG II
other healthcare facilities. Stryker's products are sold in over 100 countries
Modular-Neck hip stem as part of the settlement agreement. See Note 8 to the
through company-owned sales subsidiaries and branches as well as third-
Consolidated Financial Statements in Item 8 of this report for further
party dealers and distributors.
information.
As used herein, and except where the context otherwise requires, "Stryker,"
MedSurg
"we," "us," and "our" refer to Stryker Corporation and its consolidated
subsidiaries. MedSurg products include surgical equipment and surgical navigation systems
(Instruments); endoscopic and communications systems (Endoscopy); patient
Business Segments and Geographic Information
handling and emergency medical equipment (Medical); and reprocessed and
We segregate our operations into three reportable business segments: remanufactured medical devices (Sustainability) as well as other medical
Orthopaedics, MedSurg, and Neurotechnology and Spine. Financial device products used in a variety of medical specialties.
information regarding our reportable business segments and certain
Stryker is one of five leading competitors globally in Instruments; the other four
geographic information is included under "Results of Operations" in Item 7 of
being Zimmer, Medtronic plc., Johnson & Johnson and ConMed Linvatec, Inc.
this report and Note 13 to the Consolidated Financial Statements in Item 8 of
(a subsidiary of CONMED Corporation). In Endoscopy we compete with Smith
this report.
& Nephew, ConMed Linvatec, Arthrex, Inc., Karl Storz GmbH & Co., Olympus
Net Sales by Reportable Segment Optical Co. Ltd and Steris. Our primary competitor in Medical is Hill-Rom
Holdings, Inc.
2015 2014 2013 Composition of Net Sales
Orthopaedics $ 4,223 43% $ 4,153 43% $ 3,949 44%
2015 2014 2013
MedSurg 3,895 39 3,781 39 3,414 38
Neurotechnology Instruments $ 1,466 38% $ 1,424 38% $ 1,269 37%
and Spine 1,828 18 1,741 18 1,658 18 Endoscopy 1,390 36 1,382 37 1,222 36
Total $ 9,946 100% $ 9,675 100% $ 9,021 100% Medical 823 21 766 20 710 21
Sustainability 216 5 209 5 213 6
Orthopaedics
Orthopaedics products consist primarily of implants used in hip and knee joint Total $ 3,895 100% $ 3,781 100% $ 3,414 100%
replacements and trauma and extremities surgeries. We bring patients and
In 2015 we acquired CHG Hospital Beds, Inc. ("CHG"). CHG designs,
physicians advanced implant designs and specialized instrumentation that
manufactures and markets low-height hospital beds and related accessories.
make orthopaedic surgery and recovery simpler, faster and more effective. We
support surgeons with the technology and services they need as they develop In 2015 Instruments launched the Signature Drill Portfolio, the next generation
new surgical techniques. neurosurgical high speed drill platform. The Signature Drill Portfolio allows
surgeons to customize their preferences from three new motors, four new
Stryker is one of four leading competitors globally for joint replacement and
attachment lines, I.D. Touch™ Software, tunable drive technology, new cutting
trauma products; the other three being Zimmer Biomet Holdings, Inc.
accessories, and a variety of user preferences to configure their Signature
(Zimmer), DePuy Synthes (companies of Johnson & Johnson) and Smith &
custom-fit drill. Endoscopy launched the 1588 AIM Platform which is the first
Nephew plc (Smith & Nephew).
visualization system to seamlessly integrate five unique imaging modalities
Composition of Net Sales into one platform designed to enhance visualization of patient anatomy across
multiple surgical specialties. Medical launched the TruRize clinical chair which
2015 2014 2013 is designed to promote early patient mobility and safe patient handling.
Knees $ 1,403 33% $ 1,396 34% $ 1,371 35%
Hips 1,263 30 1,291 31 1,272 32
Trauma and
Extremities 1,291 31 1,230 30 1,116 28
Other 266 6 236 5 190 5
Total $ 4,223 100% $ 4,153 100% $ 3,949 100%
1 Dollar amounts in millions except per share amounts or as otherwise specified.

In 2014 we acquired Berchtold Holding, AG (Berchtold). Berchtold sells Seasonality

surgical tables, equipment booms and surgical lighting systems. In 2014 we Our business is generally not seasonal in nature; however, the number of
acquired Patient Safety Technologies, Inc. (PST). PST’s proprietary Safety- orthopaedic implant surgeries is typically lower during the summer months,
Sponge ® System and SurgiCount 360™ compliance software helps to prevent and sales of capital equipment are generally higher in the fourth quarter.
Retained Foreign Objects in the operating room. Other acquisitions in 2014
include the acquisition of Pivot Medical, Inc. (Pivot). Pivot develops and sells Competition
innovative products for hip arthroscopy. In all of our product lines we compete with local and global companies.
Neurotechnology and Spine Competition exists in all product lines without regard to the number and size of
the competing companies involved. The development of new and innovative
Neurotechnology and Spine products include both neurosurgical and products is important to our success in all areas of our business and
neurovascular devices. Our neurotechnology offering includes products used competition in research, involving the development and the improvement of
for minimally invasive endovascular techniques; a comprehensive line of new and existing products and processes, is particularly significant. The
products for traditional brain and open skull base surgical procedures; competitive environment requires substantial investments in continuing
orthobiologic and biosurgery products, including synthetic bone grafts and research and in maintaining sales forces.
vertebral augmentation products; and minimally invasive products for the
treatment of acute ischemic and hemorrhagic stroke. Our spinal implant The principal factors that we believe differentiate us in the highly competitive
product categories in which we operate and enable us to compete effectively
offering includes cervical, thoracolumbar and interbody systems used in spinal
include our commitment to innovation and quality, service and reputation. We
injury, deformity and degenerative therapies.
believe that our competitive position in the future will depend to a large degree
Stryker is one of five leading competitors globally in Neurotechnology; the on our ability to develop new products and make improvements to existing
other four being Medtronic, Johnson & Johnson, Terumo Corporation, and products.
Penumbra, Inc. Stryker is one of five leading competitors globally in Spine; the
Product Development
other four being MedTronic Sofamor Danek, Inc. (a subsidiary of Medtronic),
DePuy Synthes, Nuvasive, Inc. and Globus Medical, Inc. Most of our products and product improvements have been developed
internally at research facilities in the United States, France, Germany, India,
Composition of Net Sales
Ireland, Puerto Rico and Switzerland. We also invest through acquisitions in
technologies developed by third parties that have the potential to expand the
2015 2014 2013
markets in which we operate. We maintain close working relationships with
Neurotechnology $ 1,088 60% $ 1,001 57% $ 915 55% physicians and medical personnel in hospitals and universities who assist us
Spine 740 40 740 43 743 45
in product development efforts. The total costs of research, development and
engineering activities were $625, $614, and $536 in 2015, 2014 and 2013.
Total $ 1,828 100% $ 1,741 100% $ 1,658 100%
Regulation
In 2015 the New England Journal of Medicine released results of a study Our businesses are subject to varying degrees of governmental regulation in
finding that intra-arterial treatment to remove stroke-causing blood clots the countries in which we operate, and the general trend is toward increasingly
provides better outcomes than using a clot dissolving drug. One of the devices stringent regulation.
used in this study was our Trevo™ Retriever. Medical professionals in the field In the United States the Medical Device Amendments of 1976 to the Federal
believe that the study's results will change the practice of acute stroke Food, Drug and Cosmetic Act and its subsequent amendments, and the
treatments. Stryker's Trevo™ Retriever is a leading device in the market that regulations issued and proposed thereunder, provide for regulation by the
allows physicians to visualize blood clot interaction during treatment. FDA of the design, manufacture and marketing of medical devices, including
Geographic Areas most of our products. Many of our new products fall into FDA classifications
that require notification submitted as a 510(k) and review by the FDA before
In 2015 approximately 71.5% of our revenues were generated from customers we begin marketing them. Certain of our products require extensive clinical
in the United States. Additional geographic information is included under testing, consisting of safety and efficacy studies, followed by pre-market
"Results of Operations" in Item 7 of this report and Note 13 to the approval (PMA) applications for specific surgical indications.
Consolidated Financial Statements in Item 8 of this report.
The FDA's Quality System regulations set forth standards for our product
Raw Materials and Inventory design and manufacturing processes, require the maintenance of certain
Raw materials essential to our business are generally readily available from records and provide for inspections of our facilities by the FDA. There are also
multiple sources. Substantially all products we manufacture are stocked in certain requirements of state, local and foreign governments that must be
inventory, while certain MedSurg products are assembled to order. The dollar complied with in the manufacture and marketing of our products.
amount of backlog orders at any given time is not considered material to an The member states of the European Union (EU) have adopted the European
understanding of our business taken as a whole. Medical Device Directives that form a single set of medical device regulations
Patents and Trademarks for all EU member countries. These regulations require companies that wish to
Patents and trademarks are significant to our business to the extent that a manufacture and distribute medical devices in EU member countries to meet
product or an attribute of a product represents a unique design or process. certain quality system requirements and obtain CE marking for their products.
Patent protection of such products restricts competitors from duplicating these We have authorization to apply the CE marking to substantially all of our
unique designs and features. We seek to obtain patent protection on our products. In addition, we comply with the
products whenever appropriate for protecting our competitive advantage. On
December 31, 2015 we owned approximately 1,884 United States patents and
approximately 3,014 international patents.

unique regulatory requirements of each of the countries in Europe and other

Centerpulse Orthopaedics. Prior to joining Stryker in October 2013, Ms. Fink
countries in which we market our products.
held a variety of senior level human resources roles for the previous six years
Initiatives sponsored by government agencies, legislative bodies and the at Johnson & Johnson, most recently as the Worldwide Vice President,
private sector to limit the growth of healthcare expenses generally and hospital Human Resources of Ethicon. While at Stryker, Ms. Fink held two different
costs in particular, including price regulation and competitive pricing, are senior level Human Resource roles. Prior to joining Stryker in April 2013, Mr.
ongoing in markets where we do business. It is not possible to predict at this Jellison was Senior Vice President and Chief Financial Officer at Dentsply
time the long-term impact of such cost containment measures on our future International, the world's largest manufacturer of professional dental products,
business. In addition, business practices in the healthcare industry are and before that held a variety of senior level leadership roles over a 15-year
scrutinized, particularly in the United States, by federal and state government period at Dentsply. Prior to joining Stryker in May 2014, Mr. Sagar served as
agencies, and resulting investigations and prosecutions carry the risk of the Chief Information officer for Merck Millipore, and before that as Global
significant civil and criminal penalties. Head of Information Systems and a member of the divisional board for the
Employees chemicals division of Merck KGaA. Prior to joining Stryker in November 2012,
On December 31, 2015 we had approximately 27,000 employees globally. On December 31, 2015 Ramesh Subrahmanian stepped down from his role
Certain international employees are covered by collective bargaining as International Group President. On January 26, 2016 we announced that Mr.
agreements. We believe that we maintain positive relationships with our Jellison has elected to retire from his role as Vice President, Chief Financial
employees globally. Officer effective April 1, 2016. Glenn S. Boehnlein, who has served as Group
Vice President, Chief Financial Officer for MedSurg & Neurotechnology since
Executive Officers on January 31, 2016 2011, has been promoted to Vice President, Chief Financial Officer effective
First Became
April 1, 2016. Before his role as Group Vice President, Chief Financial Officer
an Executive for MedSurg & Neurotechnology, Mr. Boehnlein held a variety of senior
Name Age Officer finance roles in the MedSurg & Neurotechnology group.
Chairman and Chief Executive Available Information
Kevin A. Lobo 50 Officer 2011
Our main corporate website address is www.stryker.com.
Copies of our
Vice President of Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current
Communication and Public
Reports on Form 8-K filed or furnished to the United States Securities and
Yin C. Becker 52 Affairs 2016
Exchange Commission (SEC) will be provided without charge to any
Vice President, Corporate
shareholder submitting a written request to our Corporate Secretary at our
Controller and Principal
William E. Berry Jr. 50 Accounting Officer 2014 principal executive offices. All of our SEC filings are also available free of
Group President, Global Quality
charge on our website within the "For Investors - SEC Filings & Ownership
Lonny J. Carpenter 54 and Business Operations 2008 Reports" link as soon as reasonably practicable after having been
electronically filed or furnished to the SEC. All SEC filings are also available at
Vice President, Global Human
M. Kathryn Fink 46 Resources 2016 the SEC's website at www.sec.gov
.
David K. Floyd 55 Group President, Orthopaedics 2012
Michael D. Hutchinson 45 General Counsel 2014
ITEM 1A. RISK FACTORS.
Vice President and Chief This report contains statements referring to us that are not historical facts and
William R. Jellison 58 Financial Officer 2013 are considered "forward-looking statements" within the meaning of the Private
Vice President, Strategy and Securities Litigation Reform Act of 1995. These statements, which are
Katherine A. Owen 45 Investor Relations 2007 intended to take advantage of the "safe harbor" provisions of the Reform Act,
Vice President, Chief are based on current projections about operations, industry conditions,
Bijoy S.N. Sagar 47 Information Officer 2014 financial condition and liquidity. Words that identify forward-looking statements
Group President, MedSurg and include words such as "may," "could," "will," "should," "possible," "plan,"
Timothy J. Scannell 51 Neurotechnology 2008 "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project,"
Each of our executive officers was elected by our Board of Directors to serve "intend," "believe," "may impact," "on track," and words and terms of similar
substance used in connection with any discussion of future operating or
in the office indicated until the first meeting of the Board of Directors following
financial performance, an acquisition or our businesses. In addition, any
the annual meeting of shareholders in 2016 or until a successor is chosen and
qualified or until his or her resignation or removal. Each of our executive statements that refer to expectations, projections or other characterizations of
future events or circumstances, including any underlying assumptions, are
officers has held the position above or has served Stryker in various executive
forward-looking statements. Those statements are not guarantees and are
or administrative capacities for at least five years, except for Mr. Lobo, Mr.
Berry, Mr. Floyd, Ms. Fink, Mr. Jellison and Mr. Sagar. Prior to joining Stryker subject to risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results could differ materially and adversely from these
in April 2011, Mr. Lobo held a variety of senior level leadership roles for the
forward-looking statements. Some important factors that could cause our
previous nine years at Johnson & Johnson, most recently as Worldwide
President of Ethicon Endo-Surgery. Prior to joining Stryker in August 2011, Mr. actual results to differ from our expectations in any forward-looking statements
include the risks discussed below.
Berry served for two years as Assistant Corporate Controller for Whirlpool
Corporation, the world's leading manufacturer and marketer of major home Our operations and financial results are subject to various risks and
appliances, and before that held a variety of senior finance roles at Delphi uncertainties that could adversely affect our business, cash flows, financial
Automotive and Federal Mogul Corporation, both global automotive parts condition and results of operations. Additional risks and
manufacturers. Mr. Floyd was the Chief Executive Officer for OrthoWorx and
held a variety of senior level leadership roles with DePuy Synthes, Abbott
Spine, AxioMed Spine, and

uncertainties not currently known to us or that we currently deem to be or future patent applications may not result in issued patents.
immaterial may also materially and adversely affect our business, cash flows, We are subject to extensive governmental regulation relating to the
financial condition or results of operations. manufacturing, labeling and marketing of our products: Substantially all of
LEGAL AND REGULATORY RISKS our products are subject to regulation by the FDA and other governmental
The impact of United States healthcare reform legislation on our authorities in the United States and internationally. The process of obtaining
business remains uncertain: In 2010 federal legislation to reform the United regulatory approvals to market a medical device can be costly and time
States healthcare system was enacted into law. The legislation is far-reaching consuming and approvals might not be granted timely for future products, if at
and is intended to expand access to health insurance coverage and improve all. We have ongoing responsibilities under FDA regulations with respect to
the quality and reduce the costs of healthcare over time. We expect the law our products and facilities and are subject to periodic inspections by the FDA
will have a significant impact upon various aspects of our business operations. and others to determine compliance with the quality system and medical
Among other things, the law imposed a 2.3 percent excise tax on medical device reporting regulations and other requirements. If we fail to fully comply
devices that applies only to United States sales, which are a majority of our with applicable regulatory requirements, we may be subject to a range of
medical device products sales; however, in 2015 Congress enacted legislation sanctions, including warning letters, product recalls, the suspension of product
that suspends the excise tax for 2016 and 2017. Other provisions of this manufacturing, monetary fines and criminal prosecution.
legislation, including Medicare provisions aimed at improving quality and We are subject to federal, state and foreign healthcare regulations,
decreasing costs, comparative effectiveness research, an independent including fraud and abuse laws, as well as anti-bribery laws, and could
payment advisory board, and pilot programs to evaluate alternative payment face substantial penalties if we fail to fully comply with such regulations
methodologies, could meaningfully change the way healthcare is developed and laws: Our relationships with healthcare professionals, such as
and delivered. Further, we cannot predict what other healthcare programs and physicians, hospitals and those that may market our products, are subject to
regulations will be ultimately implemented at the federal or state level or the scrutiny under various state and federal laws often referred to collectively as
effect of any future legislation or regulation in the United States on our healthcare fraud and abuse laws. In addition, the United States and foreign
business and results of operations. government regulators have increased the enforcement of the Foreign Corrupt
We may be adversely affected by product liability claims, unfavorable Practices Act and other anti-bribery laws. These laws are broad in scope and
court decisions or legal settlements: We are exposed to potential product are subject to evolving interpretation, which could require us to incur
liability risks that are inherent in the design, manufacture and marketing of substantial costs to monitor compliance or to alter our practices if we are
medical devices, many of which are intended to be implanted in the human found not to be in compliance. We also must comply with a variety of other
body for long periods of time or indefinitely. We are currently defendants in a laws that protect the privacy of individually identifiable healthcare information
number of product liability matters, including those relating to our Rejuvenate and impose extensive tracking and reporting related to all transfers of value
and ABGII Modular-Neck hip stems discussed in Note 8 to the Consolidated provided to certain healthcare professionals. Violations of these laws may be
Financial Statements in Item 8 of this report. These matters are subject to punishable by criminal or civil sanctions, including substantial fines,
many uncertainties and outcomes are not predictable. In addition, we may imprisonment and exclusion from participation in governmental healthcare
incur significant legal expenses regardless of whether we are found to be programs.
liable. We are self-insured for product liability-related claims and expenses.
The ultimate cost to us with respect to product liability claims could be MARKET RISKS
materially different than the amount of the current estimates and accruals and Macroeconomic developments could negatively affect our ability to
could have a material adverse effect on our financial position, results of conduct business in affected regions: Financial difficulties experienced by
operations and cash flows. our customers, distributors, and suppliers could result in product delays and
inventory issues; risks to accounts receivable could also include delays in
Intellectual property litigation and infringement claims could cause us to
incur significant expenses or prevent us from selling certain of our collection and greater bad debt expense.
products: The medical device industry is characterized by extensive Exposure to exchange rate fluctuations on cross border transactions
intellectual property litigation and, from time to time, we are the subject of and translation of local currency results into United States dollars: We
claims of potential infringement or misappropriation. Regardless of outcome, report our financial results in United States Dollars and approximately 30% of
such claims are expensive to defend and divert the time and effort of our revenues are denominated in foreign currencies, including the Euro, the
management and operating personnel from other business issues. A British Pound, and the Japanese Yen. Cross border transactions with external
successful claim or claims of patent or other intellectual property infringement parties and intercompany relationships result in increased exposure to foreign
against us could result in payment of significant monetary damages and/or currency exchange effects. Our results of operations and, in some cases, cash
royalty payments or negatively impact our ability to sell current or future flows, have been and may in the future be adversely affected by movements
products in the affected category. in foreign currency exchange rates. While we implement currency hedges to
partially reduce our exposure to changes in foreign currency exchange rates;
Dependence on patent and other proprietary rights and failing to protect
such rights or to be successful in litigation related to such rights may our hedging strategies may not be successful, and our unhedged exposures
continue to be subject to currency fluctuations. In addition, the weakening or
impact offerings in our product portfolios: Our long-term success largely
strengthening of the United States dollar results in favorable or unfavorable
depends on our ability to market technologically competitive products. If we fail
to obtain or maintain adequate intellectual property protection, it could allow translation effects when the results of our foreign locations are translated into
United States dollars for inclusion in our consolidated financial statements and
others to sell products that directly compete with proprietary features in our
product portfolio. Also, our issued patents are subject to claims concerning results.
priority, scope and other issues, and currently pending

Additional capital that we may require in the future may not be available and distribute our products globally. Our international operations are subject to
to us, or only available to us on unfavorable terms: Our future capital a number of additional risks and potential costs, including changes in foreign
requirements will depend on many factors, including operating requirements, medical reimbursement policies and programs, unexpected changes in foreign
current and future acquisitions and the need to refinance existing debt. Our regulatory requirements, differing local product preferences and product
ability to issue additional debt or enter into other financing arrangements on requirements, diminished protection of intellectual property in some countries,
acceptable terms could be adversely affected by our debt levels, unfavorable trade protection measures and import or export licensing requirements,
changes in economic conditions generally or uncertainties that affect the difficulty in staffing and managing foreign operations, political and economic
capital markets. Changes in credit ratings issued by nationally recognized instability. Our results of operations and/or financial condition could be
credit rating agencies could also adversely affect our access to and cost of adversely impacted if we are unable to successfully manage these and other
financing. Higher borrowing costs or the inability to access capital markets risks of international operations in an increasingly volatile environment.
could adversely affect our ability to support future growth and operating We may be unable to capitalize on previous or future acquisitions: In
requirements and, as a result, our business, financial condition and results of addition to internally developed products, we rely upon investment in new
operations could be adversely affected. technologies through acquisitions. Investments in medical technology are
inherently risky, and we cannot guarantee that any acquisition will be
BUSINESS AND OPERATIONAL RISKS
successful or will not have a material unfavorable impact on us. These risks
Cost containment measures in the United States and other countries include the activities required to integrate new businesses, which may result in
resulting in pricing pressures could have a negative impact on our future the need to allocate more resources to integration and product development
operating results: Initiatives sponsored by government agencies, legislative activities than originally anticipated, diversion of management time, which
bodies and the private sector to limit the growth of healthcare costs, including could adversely affect management's ability to focus on other projects, the
price regulation and competitive pricing, are ongoing in markets where we do inability to realize the expected benefits, savings or synergies from the
business. Pricing pressure has also increased due to continued consolidation acquisition, the loss of key personnel of the acquired company and exposure
among healthcare providers, trends toward managed care, the shift towards to unexpected liabilities of the acquired company. In addition, we cannot be
governments becoming the primary payers of healthcare expenses and certain that the businesses we acquire will become profitable or remain so,
government laws and regulations relating to sales and promotion, which may result in unexpected impairment charges.
reimbursement and pricing generally. Reductions in reimbursement levels or
We may record future goodwill impairment charges related to one or
coverage for our products or other cost containment measures, including any
more of our business units, which could materially adversely impact our
that reduce medical procedure volumes, could unfavorably affect our future results of operations: We perform our annual impairment test for goodwill in
operating results.
the fourth quarter of each year, or more frequently if indicators are present or
We may be unable to effectively develop and market products against changes in circumstances suggest that impairment may exist. In evaluating
the products of our competitors in a highly competitive industry: Our the potential for impairment we make assumptions regarding revenue
present or future products could be rendered obsolete or uneconomical by projections, growth rates, cash flows, tax rates and discount rates. These
technological advances by our competitors. Competitive factors include price, assumptions are uncertain and by nature may vary from actual results. A
customer service, technology, innovation, quality, reputation and reliability. significant reduction in the estimated fair values could result in impairment
Our competition may respond more quickly to new or emerging technologies, charges that could materially affect our results of operations.
undertake more extensive marketing campaigns, have greater financial, Our results of operations could be negatively impacted by future
marketing and other resources or be more successful in attracting potential
changes in the allocation of income to each of the income tax
customers, employees and strategic partners. Given these factors, we cannot jurisdictions in which we operate: We operate in multiple income tax
guarantee that we will be able to continue our level of success in the industry. jurisdictions both in the United States and internationally. Accordingly, our
Competition in the development and improvement of new and existing management must determine the appropriate allocation of income to each
products is particularly significant and results from time to time in jurisdiction based on current interpretations of complex income tax
product obsolescence: The markets in which we operate are highly regulations. Income tax authorities regularly perform audits of our income tax
competitive, and new products and surgical procedures are introduced on an filings. Income tax audits associated with the allocation of income and other
ongoing basis. Such marketplace changes may cause some of our products to complex issues, including inventory transfer pricing and cost sharing, product
become obsolete. If actual product life cycles, product demand or acceptance royalty and foreign branch arrangements, may require an extended period of
of new product introductions are less favorable than projected by time to resolve and may result in significant income tax adjustments. If
management, a higher level of inventory write downs may result. changes to the income allocation are required between jurisdictions with
We may be unable to maintain adequate working relationships with different income tax rates, the related adjustments could have a material
healthcare professionals: We seek to maintain close working relationships unfavorable impact on our results of operations.
with respected physicians and medical personnel in hospitals and universities Failure of a key information technology system, process or site and a
who assist in product research and development. We rely on these breach of information security, including a cybersecurity breach or
professionals to assist us in the development of proprietary products and failure of one or more key information technology systems, networks,
product improvements to complement and expand our existing product lines. If processes, associated sites or service providers could have a material
we are unable to maintain these relationships, our ability to develop, market adverse impact on our business or reputation: We rely extensively on
and sell new and improved products could decrease. information technology (IT) systems to conduct business. These systems
We are subject to additional risks associated with our extensive include, but are not limited to, ordering and managing materials
international operations: We develop, manufacture

from suppliers, converting materials to finished products, shipping products to

customers, processing transactions, summarizing and reporting results of ITEM 2. PROPERTIES.
operations, complying with regulatory, legal or tax requirements, providing
Principal Manufacturing Locations on December 31, 2015
data security and other processes necessary to manage our business. In
addition, our reliance on networks and services, including internet sites, data Approximate Owned/
hosting and processing facilities and tools and other hardware, software and Location Segment Square Feet Leased
technical applications and platforms, some of which are managed, hosted, Portage, Michigan M 1,144,000 Owned
provided and/or used by third-parties or their vendors, to assist in conducting
our business. Numerous and evolving cybersecurity threats, including Changzhou, China O, NS 889,000 Owned
advanced persistent threats, pose a potential risk to the security of our IT Mahwah, New Jersey O 531,000 Owned
systems, networks and services, as well as the confidentiality, availability and
integrity of our data and our responsibilities to governments. We have made Kayseri, Turkey M 259,000 Owned
investments seeking to address these threats, including monitoring of Tuttlingen, Germany M 230,000 Leased
networks and systems, hiring of experts, employee training and security
Arroyo, Puerto Rico M 220,000 Leased
policies for employees and third-party providers; however, because the
techniques used in these attacks change frequently and may be difficult to Kiel, Germany O 185,000 Owned
detect for periods of time, we may face difficulties in anticipating and San Jose, California M 185,000 Leased
implementing adequate preventative measures. If the IT systems are
damaged or cease to function properly due to any number of causes, Fremont, California M, NS 168,000 Leased
networks or service providers we rely upon fail to function properly, or if we or Suzhou, China O, NS 160,000 Owned
one of our third-party providers suffer a loss or disclosure of our business or
Carrigtwohill, Ireland M, O 154,000 Owned
stakeholder information, due to any number of causes, ranging from
catastrophic events or power outages to improper data handling or security Selzach, Switzerland O 138,000 Owned
breaches, and our business continuity plans do not effectively address these
Limerick, Ireland O 130,000 Owned
failures on a timely basis, we may be exposed to reputational, competitive and
business harm as well as litigation and regulatory action. The costs and Freiburg, Germany O 123,000 Owned
operational consequences of interruptions in our operations and responding to Lakeland, Florida M 119,000 Leased
breaches and implementing remediation measures could be significant.
Carrigtwohill, Ireland NS 110,000 Leased
We may be unable to attract and retain key employees: Our sales,
technical and other key personnel play an integral role in the development, Flower Mound, Texas M 108,000 Leased
marketing and selling of new and existing products. If we are unable to recruit, Malvern, Pennsylvania O 107,000 Leased
hire, develop and retain a talented, competitive work force, we may not be
able to meet our strategic business objectives. Phoenix, Arizona M 100,000 Leased
An inability to successfully manage the implementation of a new global Cestas, France NS 91,000 Owned
enterprise resource planning ("ERP") system could adversely affect our Neuchatel, Switzerland NS 88,000 Owned
operations and operating results: We are in the process of implementing a
new global ERP system. This system will replace many of our existing Ft. Lauderdale, Florida O, NS 84,000 Owned
operating and financial systems. Such an implementation is a major Limerick, Ireland O 78,000 Leased
undertaking both financially and from a management and personnel
Ontario, Canada M 74,000 Leased
perspective. Should the system not be implemented successfully, or if the
system does not perform in a satisfactory manner, it could be disruptive and Mountain View, California M, NS 62,000 Leased
adversely affect our operations and results of operations, including our ability
Cestas, France NS 51,000 Leased
to report accurate and timely financial results.
Charleston, South Carolina M 51,000 Leased
ITEM 1B. UNRESOLVED STAFF COMMENTS. Freiburg, Germany M, O 34,000 Leased
None. Stetten, Germany O 33,000 Owned
Rennes, France O 31,000 Leased
West Valley, Utah O, NS 29,000 Leased
O = Orthopaedics M = MedSurg NS = Neurotechnology and Spine
Our corporate headquarters is located in Kalamazoo, Michigan, in a 75,000

square foot owned facility. In addition, we maintain administrative and sales
offices and warehousing and distribution facilities in other locations
domestically and globally. We believe that our properties are suitable and
adequate for the manufacture and distribution of our products.
ITEM 3. LEGAL PROCEEDINGS.
We are involved in various proceedings, legal actions and claims arising in the
normal course of business, including proceedings related to product, labor and
intellectual property, and other matters that are more fully described in Note 8
to the Consolidated Financial Statements in Item 8 of this report; this
information is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.

PART II
The following graph compares our total returns (including reinvestments of
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, dividends) against the Standard & Poor’s (S&P) 500 Index and the S&P 500
RELATED STOCKHOLDER MATTERS AND ISSUER Health Care Index. The graph assumes $100 (not in millions) invested on
PURCHASES OF EQUITY SECURITIES. December 31, 2010 in our common stock and each of the indices.
Our common stock is traded on the New York Stock Exchange under the
symbol SYK.
Quarterly Stock Price and Dividend Information
2015 Quarter Mar 31 Jun 30 Sep 30 Dec 31

Dividends declared per share
of common stock $ 0.345 $ 0.345 $ 0.345 $ 0.380
Market price of common stock:
High $ 96.18 $ 97.94 $ 105.34 $ 100.51
Low $ 89.81 $ 90.19 $ 91.73 $ 90.30
2014 Quarter Mar 31 Jun 30 Sep 30 Dec 31

Dividends declared per share
of common stock $ 0.305 $ 0.305 $ 0.305 $ 0.345
High $ 83.86 $ 86.93 $ 85.91 $ 98.24
Low $ 74.02 $ 75.78 $ 78.91 $ 77.87
Our Board of Directors considers payment of cash dividends at each of its

Company / Index 2010 2011 2012 2013 2014 2015
quarterly meetings. On January 31, 2016 there were 3,116 shareholders of
record of our common stock. Stryker Corporation $100.00 $93.88 $105.24 $146.59 $186.76 $186.80
S&P 500 Index $100.00 $102.11 $118.45 $156.82 $178.29 $180.75
In 2015 we repurchased 7.4 million shares at a cost of $700 under our
repurchase programs. The manner, timing and amount of purchases is S&P 500 Health
Care Index $100.00 $112.73 $132.90 $188.00 $235.63 $251.87
determined by management based on an evaluation of market conditions,
stock price and other factors and is subject to regulatory considerations.
Purchases are made from time to time in the open market, in privately
negotiated transactions or otherwise. On December 31, 2015 the total dollar
value of shares that could be purchased under our authorized repurchase
programs was $ 1,883 .
Our repurchase program activity for the three months ended December 31,
2015 was:
Total
Number of Maximum Dollar
Total Shares Value
Number Average Price Purchased as of Shares that may
of Shares Paid Part of Publicly yet be Purchased
Period Purchased Per Share Announced Plan Under the Plan
10/1/2015-10/31/2015 0.9 $ 96.24 0.9 $ 2,052
11/1/2015-11/30/2015 0.8 96.49 0.8 1,974
12/1/2015-12/31/2015 1.0 93.78 1.0 $ 1,883
Total 2.7 $ 95.60 2.7

ITEM 6. SELECTED FINANCIAL DATA.
CONSOLIDATED OPERATIONS 2015 2014 2013 2012 2011

Net sales $ 9,946 $ 9,675 $ 9,021 $ 8,657 $ 8,307
Cost of sales 3,344 3,319 3,002 2,806 2,834
Gross profit $ 6,602 $ 6,356 $ 6,019 $ 5,851 $ 5,473
Research, development and engineering expenses 625 614 536 471 462
Selling, general and administrative expenses 3,610 3,547 3,467 3,342 3,203
Recall charges, net of insurance proceeds 296 761 622 174 —
Intangible asset amortization 210 188 138 123 122
Total operating expenses $ 4,741 $ 5,110 $ 4,763 $ 4,110 $ 3,787
Operating income 1,861 1,246 1,256 1,741 1,686
Other income (expense), net (126) (86) (44) (36) —
Earnings before income taxes $ 1,735 $ 1,160 $ 1,212 $ 1,705 $ 1,686
Income taxes 296 645 206 407 341
Net earnings $ 1,439 $ 515 $ 1,006 $ 1,298 $ 1,345
PER SHARE DATA

Net earnings per share of common stock:
Basic $ 3.82 $ 1.36 $ 2.66 $ 3.41 $ 3.48
Diluted $ 3.78 $ 1.34 $ 2.63 $ 3.39 $ 3.45
Dividends per share of common stock:
Declared $ 1.42 $ 1.26 $ 1.10 $ 0.90 $ 0.75
Paid $ 1.34 $ 1.22 $ 1.06 $ 0.85 $ 0.72
Average number of shares outstanding:
Basic 376.6 378.5 378.6 380.6 386.5
Diluted 380.9 382.8 382.1 383.0 389.5
CONSOLIDATED FINANCIAL POSITION

Cash, cash equivalents and current marketable securities $ 4,079 $ 5,000 $ 3,980 $ 4,285 $ 3,418
Accounts receivable, less allowance 1,662 1,572 1,518 1,430 1,417
Inventories 1,639 1,588 1,422 1,265 1,283
Property, plant and equipment, net 1,199 1,098 1,081 948 888
Capital expenditures 270 233 195 210 226
Depreciation and amortization 590 586 511 486 481
Total assets* 16,247 17,279 15,399 13,035 11,978
Accounts payable 410 329 314 288 345
Total debt 4,022 3,973 2,764 1,762 1,768
Shareholders’ equity 8,511 8,595 9,047 8,597 7,683
Net cash provided by operating activities $ 899 $ 1,782 $ 1,886 $ 1,657 $ 1,434
OTHER DATA
Number of shareholders of record 3,118 3,305 3,612 4,258 4,508
Approximate number of employees 27,000 26,000 25,000 22,000 21,000
* Certain prior year amounts have been reclassified to comply with Accounting Standards Update (ASU) 2015-17 Income Taxes (Topic 740): Balance Sheet
Classification of Deferred Taxes. ASU 2015-17 was adopted in 2015.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
ABOUT STRYKER Our goal is to achieve sales growth at the high-end of the medical technology
industry (MedTech) industry and maintain our capital allocation strategy that
Stryker Corporation is a global leader in medical technology with 2015 prioritizes:
revenues of $9,946 and net earnings of $ 1,439 . We offer a diverse array of
innovative medical technologies, including reconstructive, medical and 1. Acquisitions
surgical, and neurotechnology and spine products to help people lead more 2. Dividends
active and more satisfying lives. 3. Share repurchases
In the United States most of our products are marketed directly to doctors, Overview of 2015
hospitals and other healthcare facilities. We generally maintain separate In 2015 we achieved sales growth of 2.8% in line with our ongoing goal to
dedicated sales forces for each of our principal product lines to provide focus grow organic sales at the high-end of MedTech. Excluding the impact of
and a high level of expertise to each medical specialty served. Our products acquisitions, sales grew 6.1% in constant currency. We reported net earnings
are sold in approximately 100 countries through company-owned sales per diluted share of $3.78 in 2015 and achieved an 8.2% growth in adjusted
subsidiaries and branches as well as third-party dealers and distributors. Our net earnings per diluted share (See
page
12
for
a
reconciliation
of
reported
net
business is generally not seasonal in nature; however, the number of earnings
per
diluted
share
to
adjusted
net
earnings
per
diluted
share)
. We
orthopaedic implant surgeries is typically lower during the summer months and continued our capital allocation strategy by investing $153 in acquisitions,
sales of capital equipment are generally higher in the fourth quarter. paying $521 in dividends to our shareholders and using $700 for share
Making healthcare better is at the heart of what we do. We do this by repurchases.
collaborating with our customers to develop innovative products and services In 2015 we acquired CHG Hospital Beds, Inc. ("CHG"). CHG designs,
that ultimately improve patients' lives. We express this through our mission manufactures and markets low-height hospital beds and related accessories.
statement:
Recent Developments
"Together with our customers,
we are driven to make healthcare better." On January 26, 2016 we announced that William R. Jellison has elected to
retire from his role as Vice President, Chief Financial Officer effective April 1,
We believe our success in the highly competitive product categories in which 2016. Glenn S. Boehnlein, who currently serves as Group Vice President,
we operate depends on our ability to develop new products and make Chief Financial Officer for MedSurg & Neurotechnology, has been promoted to
improvements to existing products. We are committed to internal innovation to Vice President, Chief Financial Officer effective April 1, 2016.
develop products and services that improve outcomes and deliver greater cost
On February 1, 2016 we entered into a definitive agreement to acquire Sage
savings and efficiencies and to augment our efforts with focused acquisitions. Products, LLC (Sage) in an all cash transaction for $ 2,775 . Sage develops,
Our success further depends on the ability of our people to execute effectively, manufactures and distributes disposable products targeted at reducing "Never
every day.
Events," primarily in the intensive care unit and MedSurg hospital unit setting.
Sage’s products include solutions for oral care, skin preparation and
protection, patient cleaning and hygiene, turning and positioning devices and
heel care boots. This transaction is expected to close during the second
quarter of 2016.
RESULTS OF OPERATIONS
Percentage Change
% Net % Net % Net
2015 Sales 2014 Sales 2013 Sales 2015/2014 2014/2013
Net sales $ 9,946 100.0 % $ 9,675 100.0 % $ 9,021 100.0 % 2.8 % 7.3 %
Gross profit 6,602 66.4 6,356 65.7 6,019 66.7 3.9 5.6
Research, development and engineering expenses 625 6.3 614 6.3 536 5.9 1.8 14.6
Selling, general and administrative expenses 3,610 36.3 3,547 36.7 3,467 38.4 1.8 2.3
Recall charges, net of insurance proceeds 296 3.0 761 7.9 622 6.9 (61.1) 22.3
Intangibles amortization 210 2.1 188 1.9 138 1.5 11.7 36.2
Other income (expense), net (126) (1.3) (86) (0.9) (44) (0.5) 46.5 95.5
Income taxes 296 645 206 (54.1) 213.1
Net earnings $ 1,439 14.5 % $ 515 5.3 % $ 1,006 11.2 % 179.4 % (48.8)%
Net earnings per diluted share $ 3.78 $ 1.34 $ 2.63 182.1 % (49.0)%
Adjusted net earnings per diluted share $ 5.12 $ 4.73 $ 4.49 8.2 % 5.3 %
See "Non-GAAP Financial Measures" on page 12 for a discussion of non-GAAP financial measures used in this report.

Geographic and Segment Net Sales Percentage Change

2015/2014 2014/2013
Constant Constant
2015 2014 2013 Reported Currency Reported Currency
Geographic net sales:
United States $ 7,116 $ 6,558 $ 5,984 8.5 % 8.5% 9.6% 9.6%
International 2,830 3,117 3,037 (9.2) 3.7 2.6 5.7
Total net sales $ 9,946 $ 9,675 $ 9,021 2.8 % 7.0% 7.3% 8.3%
Segment net sales:
Orthopaedics $ 4,223 $ 4,153 $ 3,949 1.7 % 6.7% 5.2% 6.3%
MedSurg 3,895 3,781 3,414 3.0 6.2 10.8 11.7
Neurotechnology and Spine 1,828 1,741 1,658 5.0 9.5 5.0 6.2
Total net sales $ 9,946 $ 9,675 $ 9,021 2.8 % 7.0% 7.3% 8.3%
Consolidated Net Sales Consolidated net sales in 2014 increased 7.3% as reported and 8.3% in
Consolidated net sales in 2015 increased 2.8% as reported and 7.0% in constant currency, as foreign currency exchange rates negatively impacted
constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Excluding the 2.5% impact of acquisitions, net sales
net sales by 4.2%. Excluding the 0.9% impact of acquisitions, net sales increased 5.8% in constant currency, including 7.8% from increased unit
increased 6.1% in constant currency, including 7.6% from increased unit volume and product mix partially offset by 2.0% lower prices. The increase
volume and product mix partially offset by 1.6% lower prices. The increase was led primarily by higher product shipments of instruments, trauma and
was led primarily by higher product shipments of neurotechnology, trauma and extremities, endoscopy, neurotechnology and medical.
extremities, medical and instruments.
Supplemental Geographical Net Sales Growth Information
Percentage Change Percentage Change

United
States International United States International
Constant As Constant As Constant As Constant
2015 2014 As Reported Currency Reported As Reported Currency 2014 2013 Reported Currency As Reported Reported Currency
Orthopaedics
Knees $ 1,403 $ 1,396 0.5 % 4.6% 4.9% (9.6)% 3.9 % $ 1,396 $ 1,371 1.8 % 2.7 % 4.3 % (3.5)% (0.7)%
Hips 1,263 1,291 (2.1) 3.1 6.3 (13.6) (1.1) 1,291 1,272 1.5 2.7 6.1 (4.2) (1.4)
Trauma and
Extremities 1,291 1,230 4.9 10.8 16.1 (8.7) 4.4 1,230 1,116 10.2 11.4 14.8 5.1 7.7
Other 266 236 13.0 16.4 18.2 (5.0) 10.2 236 190 24.0 25.2 37.4 (7.6) (3.7)
Total $ 4,223 $ 4,153 1.7 % 6.7% 9.2% (10.5)% 2.5 % $ 4,153 $ 3,949 5.2 % 6.3 % 9.4 % (1.1)% 1.7 %
MedSurg
Instruments $ 1,466 $ 1,424 2.9 % 6.5% 7.2% (9.1)% 4.5 % $ 1,424 $ 1,269 12.2 % 13.1 % 14.8 % 5.7 % 8.8 %
Endoscopy 1,390 1,382 0.5 3.9 5.3 (11.5) 0.4 1,382 1,222 13.1 14.2 13.3 12.6 16.2
Medical 823 766 7.5 10.4 9.2 0.5 15.1 766 710 7.9 8.8 9.3 2.2 6.7
Sustainability 216 209 3.4 3.5 3.5 (10.7) 3.3 209 213 (1.9) (1.9) (1.8) nm nm
Total $ 3,895 $ 3,781 3.0 % 6.2% 6.7% (8.6)% 4.4 % $ 3,781 $ 3,414 10.8 % 11.7 % 11.7 % 7.9 % 11.5 %
Neurotechnology and
Spine
Neurotechnology $ 1,088 $ 1,001 8.6 % 14.2% 15.6% (2.3)% 11.9 % $ 1,001 $ 915 9.4 % 10.9 % 11.2 % 6.7 % 10.4 %
Spine 740 740 0.2 3.2 6.6 (14.7) (4.7) 740 743 (0.4) 0.3 (1.6) 2.5 5.2
Total $ 1,828 $ 1,741 5.0 % 9.5% 11.5% (6.8)% 5.9 % $ 1,741 $ 1,658 5.0 % 6.2 % 5.0 % 5.1 % 8.5 %
nm = not meaningful
Orthopaedics Net Sales MedSurg Net Sales
Orthopaedics net sales in 2015 increased 1.7% as reported and 6.7% in MedSurg net sales in 2015 increased 3.0% as reported and 6.2% in constant
constant currency, as foreign currency exchange rates negatively impacted currency, as foreign currency exchange rates negatively impacted net sales by
net sales by 5.0%. Excluding the 0.5% impact of acquisitions, net sales 3.2%. Excluding the 1.7% impact of acquisitions, net sales increased 4.5% in
increased 6.1% in constant currency, including 8.6% from increased unit constant currency, including 4.8% from increased unit volume and changes in
volume and changes in product mix, partially offset by 2.4% lower prices. The product mix, partially offset by 0.3% lower prices. The increase was led
increase was led primarily by higher shipments of trauma and extremities primarily by higher shipments of medical and instruments products. MedSurg
products. Orthopaedics net sales in 2014 increased 5.2% as reported and net sales in 2014 increased 10.8% as reported and 11.7% in constant
6.3% in constant currency, as net sales were negatively impacted by 1.1% currency, as net sales were negatively impacted by 0.9% due to the impact of
due to the impact of foreign currency exchange rates. Excluding the 3.0% foreign currency exchange rates. Excluding the 3.0% impact of acquisitions,
impact of acquisitions, net sales increased 3.2% in constant currency, net sales increased 8.7% in constant currency, including 9.5% from increased
including 6.2% from increased unit volume and changes in product mix, unit volume and changes in product mix, partially offset by 0.8% lower prices.
partially offset by 2.9% lower prices. The increase was led primarily by higher The increase was led primarily by higher shipments of our instrument
shipments of trauma and extremities products.
and medical products partially offset by lower shipments of sustainability Selling, General and Administrative Adjustments

products.
Neurotechnology and Spine Net Sales 2015 2014 2013
% Net % Net % Net
Neurotechnology and Spine net sales in 2015 increased 5.0% as reported and $ Sales $ Sales $ Sales
9.5% in constant currency, as foreign currency exchange rates negatively AS
impacted net sales by 4.5%. Excluding the 0.1% impact of acquisitions, net REPORTED $ 3,610 36.3 % $ 3,547 36.7 % $ 3,467 38.4 %
sales in constant currency increased 9.4%, including 11.6% from increased Acquisition
unit volume and changes in product mix, partially offset by 2.3% lower prices. and
integration-
The increase was led primarily by higher shipments of neurotechnology related (28) (0.3) (75) (0.8) (70) (0.7)
products. Neurotechnology and Spine net sales in 2014 increased 5.0% as Restructuring-
reported and 6.2% in constant currency as net sales were negatively impacted related
charges (125) (1.2) (116) (1.2) (52) (0.6)
by 1.2% due to the impact of foreign currency exchange rates. Excluding the
Regulatory
0.5% impact of acquisitions, net sales increased 5.7% in constant currency, and legal
including 8.1% from increased unit volume and changes in product mix, matters 53 0.5 — — (62) (0.7)
partially offset by 2.4% lower prices. The increase was led primarily by higher
Donations — — — — (25) (0.3)
shipments of neurotechnology products.
ADJUSTED $ 3,510 35.3 % $ 3,356 34.7 % $ 3,258 36.1 %
Gross Profit
Gross profit in 2015 increased to 66.4% from 65.7% in 2014, primarily due to Recall Charges, Net of Insurance Proceeds
product mix and the favorable impact of foreign currency exchange rates Recall charges, net of insurance proceeds, were due to the previously
offset by decreases in the selling price of our products. Gross Profit decreased disclosed Rejuvenate and ABG II voluntary recall and other recall matters and
to 65.7% in 2014 compared to 66.7% in 2013, primarily due to decreases in were $296, $761 and $622 in 2015, 2014 and 2013. We received $53 and
the selling prices of our products, unfavorable product mix and the unfavorable $179 of insurance proceeds in 2015 and 2014. Refer to Note 8 in the Notes to
impact of foreign currency exchange rates. the Consolidated Financial Statements for further information.
Gross Profit Adjustments Intangibles Amortization
Intangibles amortization was $210, $188 and $138 in 2015 , 2014 and 2013.
2015 2014 2013
The increases were due to acquisitions.
% Net % Net % Net
$ Sales $ Sales $ Sales Other Income (Expense), Net
AS Other income (expense), net was ($126), ($86) and ($44) in 2015 , 2014 and
REPORTED $ 6,602 66.4% $ 6,356 65.7% $ 6,019 66.7%
Inventory
2013. The increase in other expense was primarily driven by higher interest
stepped up to costs on income tax reserves and the unfavorable impact of foreign currency
fair value 7 0.1 27 0.3 28 0.3
exchange rate changes.
Restructuring-
related charges 7 — 1 — 11 0.1 Income Taxes
Regulatory and The effective income tax rate on earnings was 17.1%, 55.6% and 17.0% for
legal matters — — — — 7 0.1
the 2015, 2014 and 2013. The effective income tax rate for 2014 included the
ADJUSTED $ 6,616 66.5% $ 6,384 66.0% $ 6,065 67.2% tax impact of the establishment of our European regional headquarters and
Research, Development and Engineering Expenses the planned cash repatriation that was executed in 2015.
Research, development and engineering expenses represented 6.3% of net Net Earnings
sales in 2015 and 2014 compared to 5.9% in 2013. The increased spending Net earnings in 2015 increased to $1,439 or $3.78 per diluted share from $515
levels in 2015 and 2014 were driven by the timing of projects and investments or $1.34 per diluted share in 2014 and $1,006 or $2.63 per diluted share in
in new technologies. 2013. The impact of foreign currency exchange rates reduced net earnings
Selling, General and Administrative Expenses per diluted share by approximately $0.26 and $0.14 in 2015 and 2014.
Selling, general and administrative expenses as a percentage of net sales in Net Earnings Adjustments
2015 decreased to 36.3% from 36.7% in 2014 and 38.4% in 2013. Excluding
the adjustments in the table below, selling, general and administrative 2015 2014 2013
expenses increased in 2015 due to increased expenses related to our % Net % Net % Net
$ Sales $ Sales $ Sales
European regional headquarters, higher compensation costs, due in part to
AS
sales performance-related commissions, partially offset by disciplined expense REPORTED $ 1,439 14.5 % $ 515 5.3% $ 1,006 11.2 %
management. Inventory
stepped up to
fair value 4 — 15 0.2 21 0.2
Acquisition
and
integration-
related 20 0.2 50 0.5 51 0.6
Amortization
of intangible
assets 147 1.5 133 1.4 98 1.0
Restructuring-
related
charges 97 1.0 78 0.8 46 0.5
Rejuvenate
and other
recall matters 210 2.1 628 6.5 460 5.1
Regulatory
and legal
matters (46) (0.5) — — 63 0.7
Donations — — — — 15 0.2
Tax matters 78 0.8 391 4.0 (46) (0.5)
ADJUSTED $ 1,949 19.6 % $ 1,810 18.7% $ 1,714 19.0 %

examples of the types of adjustments that may be included in a period:

Non-GAAP Financial Measures
1. Acquisition
and
integration
related
costs
. Costs related to integrating
We supplement the reporting of our financial information determined under recently acquired businesses and specific costs related to the
accounting principles generally accepted in the United States (GAAP) with consummation of the acquisition process.
certain non-GAAP financial measures, including percentage sales growth in 2. Amortization
of
intangible
assets
. Periodic amortization expense related
constant currency; percentage organic sales growth; adjusted gross profit; to purchased intangible assets.
cost of sales excluding specified items; adjusted selling, general and 3. Restructuring-related
charges
. Costs associated with workforce
administrative expenses; adjusted amortization of intangible assets; adjusted reductions, facility rationalizations and other restructuring activities.
operating income; adjusted effective income tax rate; adjusted net earnings; 4. Recall
matters
. Our best estimate of the minimum of the range of
and adjusted net earnings per diluted share (Diluted EPS). We believe that probable loss to resolve certain product recalls.
these non-GAAP measures provide meaningful information to assist investors 5. Regulatory
and
legal
matters
. Our best estimate of the minimum of the
and shareholders in understanding our financial results and assessing our range of probable loss to resolve certain regulatory matters and other
prospects for future performance. Management believes percentage sales legal settlements.
growth in constant currency and the other adjusted measures described above 6. Tax
matters
. Certain significant and discrete tax items and adjustments
are important indicators of our operations because they exclude items that to interest expense related to the settlement of certain tax matters.
may not be indicative of or are unrelated to our core operating results and
provide a baseline for analyzing trends in our underlying businesses. Because non-GAAP financial measures are not standardized, it may not be
Management uses these non-GAAP financial measures for reviewing the possible to compare these financial measures with other companies' non-
operating results of reportable business segments and analyzing potential GAAP financial measures having the same or similar names. These adjusted
future business trends in connection with our budget process and bases financial measures should not be considered in isolation or as a substitute for
certain management incentive compensation on these non-GAAP financial reported sales growth, gross profit, cost of sales, selling, general and
measures. administrative expenses, amortization of intangible assets, operating income,
To measure percentage sales growth in constant currency, we remove the effective income tax rate, net earnings and net earnings per diluted share, the
impact of changes in foreign currency exchange rates that affect the most directly comparable GAAP financial measures. These non-GAAP
comparability and trend of sales. Percentage sales growth in constant financial measures are an additional way of viewing aspects of our operations
currency is calculated by translating current year results at prior year average that, when viewed with our GAAP results and the reconciliations to
foreign currency exchange rates. To measure percentage organic sales corresponding GAAP financial measures below provide a more complete
growth, we remove the impact of changes in foreign currency exchange rates understanding of our business. We strongly encourage investors and
and acquisitions that affect the comparability and trend of sales. Percentage shareholders to review our financial statements and publicly-filed reports in
organic sales growth is calculated by translating current year results at prior their entirety and not to rely on any single financial measure.
year average foreign currency exchange rates excluding the impact of The following reconciles the non-GAAP financial measures: adjusted gross
acquisitions. profit; adjusted selling, general and administrative expense; adjusted
To measure earnings performance on a consistent and comparable basis, we operating income; adjusted other income (expense), net; adjusted net
exclude certain items that affect the comparability of operating results and the earnings; adjusted effective tax rate; and adjusted diluted EPS; with the most
trend of earnings. These adjustments are irregular in timing, may not be directly comparable GAAP financial measures:
indicative of our past and future performance and are therefore excluded to
allow investors to better understand underlying operating trends. The following
are
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Selling, General &

Administrative Intangible
2015 Gross Profit Expenses Amortization Operating Income Net Earnings Effective Tax Rate Diluted EPS
AS REPORTED $ 6,602 $ 3,610 $ 210 $ 1,861 $ 1,439 17.1 % $ 3.78
Acquisition and integration-related charges

Inventory stepped up to fair value 7 — — 7 4 0.1 0.01
Other acquisition and integration-related — (28) — 28 20 0.2 0.05
Amortization of intangible assets — — (210) 210 147 1.5 0.39
Restructuring-related charges 7 (125) — 132 97 0.7 0.26
Rejuvenate and other recall matters — — — 296 210 2.0 0.55
Regulatory and legal matters — 53 — (53) (46) 0.1 (0.12)
Tax matters — — — — 78 (4.4) 0.20
ADJUSTED $ 6,616 $ 3,510 $ — $ 2,481 $ 1,949 17.3 % $ 5.12

Selling, General &

AS REPORTED $ 6,356 $ 3,547 $ 188 $ 1,246 $ 515 55.6 % $ 1.34
Acquisition and integration-related charges

Other acquisition and integration-related — (75) — 75 50 0.7 0.13
Rejuvenate and other recall matters — — — 761 628 (3.1) 1.65
Tax matters — — — — 391 (33.6) 1.02
ADJUSTED $ 6,384 $ 3,356 $ — $ 2,414 $ 1,810 22.3 % $ 4.73
Selling General and

AS REPORTED $ 6,019 $ 3,467 $ 138 $ 1,256 $ 1,006 17.0 % $ 2.63
Acquisition and integration related charges

Other acquisition and integration related — (70) — 70 51 0.3 0.13
Rejuvenate and other recall matters — — — 622 460 2.0 1.20
Regulatory and legal matters 7 (62) — 69 63 (0.6) 0.17
Donations — (25) — 25 15 0.3 0.04
Tax matters — — — — (46) 2.9 (0.12)
ADJUSTED $ 6,065 $ 3,258 $ — $ 2,271 $ 1,714 22.7 % $ 4.49
The weighted-average basic and diluted shares outstanding used in the calculation of non-GAAP Diluted EPS are the same as the weighted-average basic and
diluted shares outstanding used in the calculation of the reported Diluted EPS.
FINANCIAL CONDITION AND LIQUIDITY Investing Activities

Cash provided by investing activities was $1,956 in 2015 compared to cash
2015 2014 2013 used in investing of $1,878 in 2014 and $2,217 in 2013. This change is
Net cash provided by operations primarily due to the sale of a portion of our marketable securities in 2015 to
activities $ 899 $ 1,782 $ 1,886 make recall-related payments discussed above under Operating Activities.
Net cash provided by (used in) investing Acquisitions: Acquisitions resulted in cash consumption of $153, $916 and
activities 1,956 (1,878) (2,217)
$2,320 in 2015, 2014 and 2013. In 2015 the primary acquisition was CHG,
Net cash (used in) provided financing and in 2014 the primary acquisitions were Patient Safety Technologies, Inc.,
activities (1,141) 629 300
Pivot Medical Inc., Berchtold Holding, AG and Small Bone Innovations, Inc. In
Effect of exchange rate changes (130) (77) (25) 2013 we acquired Trauson Holdings Company Limited and Mako Surgical
Change in cash and cash equivalents $ 1,584 $ 456 $ (56) Corp.
Capital Expenditures: Capital expenditures were $270, $233 and $195 in
We believe our financial condition continues to be of high quality, as
2015, 2014 and 2013. Capital expenditures in 2015 were primarily related to
evidenced by our ability to generate substantial cash from operations and
acquisition integration support, information technology infrastructure upgrades,
ready access to capital markets at competitive rates.
capacity expansion, new product introductions, innovation and cost savings.
Operating cash flow provides the primary source of cash to fund operating
needs and capital expenditures. Excess operating cash is used first to fund Financing Activities
acquisitions to complement our portfolio of businesses. Other discretionary Dividends Paid: Dividends paid per common share increased 9.8% to $1.34
uses include dividends and share repurchases. As necessary, we may per share in 2015 compared to $1.22 per share in 2014, an increase of 15.1%
supplement operating cash flow with debt to fund these activities. Our overall from 2013. Dividends paid per common share and total dividends paid to
cash position shows our strong business results and a global cash common shareholders are included in the following table for 2015, 2014 and
management strategy that takes into account liquidity management, economic 2013.
factors and tax considerations.
Operating Activities 2015 2014 2013
Cash provided by operations was $899, $1,782, $1,886 in 2015, 2014 and Dividends paid per common share $ 1.34 $ 1.22 $ 1.06
2013. The decrease in 2015 was primarily due to recall-related payments Total dividends paid to common
associated with the Rejuvenate and ABGII recall settlement agreement and shareholders $ 521 $ 462 $ 401
the timing of income tax payments. Short-Term and Long-Term Debt: We maintain debt levels we consider
The net of accounts receivable, inventory and accounts payable resulted in appropriate after evaluating a number of factors, including cash flow
the consumption of $231, $249, and $165 of cash in 2015, 2014 and 2013. expectations, cash requirements for ongoing operations, investment and
Inventory days on hand for 2015 increased by 5 days from 2014 after financing plans (including acquisitions and share repurchase activities) and
increasing eight days in 2014. Accounts receivable days sales outstanding for overall cost of capital.
2015 increased by one day after decreasing one day in 2014.

Net proceeds from borrowings were $48, $1,159 and $1,005 in 2015, 2014 to be approximately $1,824 ($2,056 before $232 of third-party insurance
and 2013. In 2015 the proceeds were primarily from the public offerings of recoveries) to $2,416. The final outcome of this matter is dependent on many
notes offset by the payment of certain notes due and paid in January 2015. variables that are difficult to predict. The ultimate cost to entirely resolve this
Proceeds in 2014 were primarily from the public offerings of notes and matter may be materially different than the amount of the current estimate and
commercial paper. Refer to Note 9 in the Notes to the Consolidated Financial could have a material adverse effect on our financial position, results of
Statements for further information. Total debt was $4,022 and $3,973 in 2015 operations and cash flows. We are not able to reasonably estimate the future
and 2014 . periods in which payments will be made.
Share Repurchases: The total use of cash for share repurchases was $700, As further described in Note 12 to the Consolidated Financial Statements, on
$100 and $317 in 2015, 2014 and 2013. We have decided to suspend our December 31, 2015 we have recorded a liability for uncertain income tax
share repurchase program through 2016. positions of $313. Due to uncertainties regarding the ultimate resolution of
Liquidity income tax audits, we are not able to reasonably estimate the future periods in
which any income tax payments to settle these uncertain income tax positions
Cash, cash equivalents and marketable securities were $4,079 and $5,000 on will be made.
December 31, 2015 and 2014 and our current assets exceeded current
liabilities by $4,441 and $4,223 on December 31, 2015 and 2014 . We As further described in Note 11 to the Consolidated Financial Statements, on
anticipate being able to support our short-term liquidity and operating needs, December 31, 2015 our defined benefit pension plans were underfunded by
including recall-related payments related to the Rejuvenate and ABG II recalls, $240, of which approximately $231 related to plans outside the United States.
from a variety of sources, including cash from operations, commercial paper Due to the rules affecting tax-deductible contributions in the jurisdictions in
and existing credit lines. We have raised funds in the capital markets and may which the plans are offered and the impact of future plan asset performance,
continue to do so from time to time. We have strong short-term and long-term changes in interest rates and potential changes in legislation in the United
debt ratings that we believe should enable us to refinance our debt as it States and other foreign jurisdictions, we are not able to reasonably estimate
becomes due. We have existing credit facilities should additional funds be beyond 2016 the amounts that may be required to fund defined benefit
required. On December 31, 2015 we had approximately $1,236 of borrowing pension plans.
capacity available under our existing credit facilities. Long-term Contractual Obligations
On December 31, 2015 approximately 46% of our consolidated cash, cash
Payment Period
equivalents and marketable securities were held in locations outside the
United States. In 2014 we announced that we would begin a repatriation Less than After 5
Total 1 year 1-3 years 3-5 years years
program. We completed the program in 2015 and repatriated approximately
Short-term and long-term debt
$1.8 billion to the United States. Our remaining cash held outside the United $ 4,022 $ 769 $ 600 $ 500 $ 2,153
States is considered to be indefinitely reinvested. We intend to use this cash Unconditional purchase
obligations 1,020 792 172 55 1
to expand operations, either organically or through acquisitions outside the
Operating leases
United States. 263 69 90 48 56
We continually evaluate our receivables, particularly in Spain, Portugal, Italy Contributions to defined benefit
plans 18 18 — — —
and Greece (the Southern European Region). The total net receivables from Other
the Southern European Region were approximately $132 and $154 in 2015 93 10 15 2 66
and 2014, including approximately $51 and $78 of sovereign receivables in Total
$ 5,416 $ 1,658 $ 877 $ 605 $ 2,276
2015 and 2014 . We believe that our current reserves related to receivables
are adequate and any additional credit risk associated with the Southern CRITICAL ACCOUNTING POLICIES AND ESTIMATES
European Region is not expected to have a material adverse impact on our
In preparing our financial statements in accordance with accounting principles
financial position or liquidity. We currently do not have any investments in the generally accepted in the United States, there are certain accounting policies
sovereign debt instruments of the Southern European Region. Any non-
that may require a choice between acceptable accounting methods or may
sovereign exposure in these countries is considered immaterial.
require substantial judgment or estimation in their application. These include
In 2015 we made recall-related payments of $1,202 under our United States inventory reserves, income taxes, acquisitions, goodwill and intangible assets,
Rejuvenate and ABG II settlement agreement. Refer to Note 8 in the Notes to and legal and other contingencies. We believe these accounting policies and
the Consolidated Financial Statements for further information. the others set forth in Note 1 to the Consolidated Financial Statements should
Guarantees and Other Off-Balance Sheet Arrangements be reviewed as they are integral to understanding our results of operations
We do not have guarantees or other off-balance sheet financing and financial condition.
arrangements, including variable interest entities, of a magnitude that we Inventory Reserves
believe could have a material impact on our financial condition or liquidity. We maintain reserves for excess and obsolete inventory resulting from the
CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING CASH potential inability to sell certain products at prices in excess of current carrying
REQUIREMENTS costs. We make estimates regarding the future recoverability of the costs of
these products and record provisions based on historical experience,
As further described in Note 8 to the Consolidated Financial Statements, in
expiration of sterilization dates and expected future trends. If actual product
2015 we recorded additional charges to earnings totaling $295 related to the
Rejuvenate and ABG II recalls. Based on the information that has been life cycles, product demand or acceptance of new product introductions are
less favorable than projected by management, additional inventory write
received, the actuarially determined range of probable loss to resolve this
downs may be required, which could unfavorably affect future operating
matter is estimated
results.

Income Taxes valuation specialists for significant items. The fair value estimates are based
Our annual tax rate is determined based on our income, statutory tax rates on available historical information and on future expectations and assumptions
and the tax impacts of items treated differently for tax purposes than for deemed reasonable by management but are inherently uncertain. We typically
financial reporting purposes. Tax law requires certain items be included in the use an income method to estimate the fair value of intangible assets, which is
tax return at different times than the items are reflected in the financial based on forecasts of the expected future cash flows attributable to the
statements. Some of these differences are permanent, such as expenses that respective assets. Significant estimates and assumptions inherent in the
are not deductible in our tax return, and some differences are temporary and valuations reflect a consideration of other marketplace participants and include
reverse over time, such as depreciation expense. These temporary the amount and timing of future cash flows (including expected growth rates
differences create deferred tax assets and liabilities. and profitability), the underlying product or technology life cycles, the
economic barriers to entry and the discount rate applied to the cash flows.
Deferred tax assets generally represent the tax effect of items that can be
Unanticipated market or macroeconomic events and circumstances may occur
used as a tax deduction or credit in future years for which we have already that could affect the accuracy or validity of the estimates and assumptions.
recorded the tax benefit in our income statement. Deferred tax liabilities
generally represent tax expense recognized in our financial statements for Determining the useful life of an intangible asset also requires judgment. With
which payment has been deferred, the tax effect of expenditures for which a the exception of certain trade names, the majority of our acquired intangible
deduction has already been taken in our tax return but has not yet been assets (e.g., certain trademarks or brands, customer and distributor
recognized in our financial statements or assets recorded at fair value in relationships, patents and technologies) are expected to have determinable
business combinations for which there was no corresponding tax basis useful lives. Our assessment as to the useful lives of these intangible assets is
adjustment. based on a number of factors including competitive environment, market
share, trademark and/or brand history, underlying product life cycles,
Inherent in determining our annual tax rate are judgments regarding business
operating plans and the macroeconomic environment of the countries in which
plans, tax planning opportunities and expectations about future outcomes.
the trademarks or brands are sold. Our estimates of the useful lives of
Realization of certain deferred tax assets is dependent upon generating determinable-lived intangibles are primarily based on these same factors.
sufficient taxable income in the appropriate jurisdiction prior to the expiration
Determinable-lived intangible assets are amortized to expense over their
of the carryforward periods. Although realization is not assured, management
estimated useful life.
believes it is more likely than not that our deferred tax assets, net of valuation
allowances, will be realized. In certain of our acquisitions, we acquire in-process research and
development (IPRD) intangible assets. IPRD is considered to be an indefinite-
We operate in multiple jurisdictions with complex tax policy and regulatory lived intangible asset until such time as the research is completed (at which
environments. In certain of these jurisdictions, we may take tax positions that
time it becomes a determinable-lived intangible asset) or determined to have
management believes are supportable but are potentially subject to successful
no future use (at which time it is impaired).
challenge by the applicable taxing authority. These differences of
interpretation with the respective governmental taxing authorities can be The value of indefinite-lived intangible assets and goodwill is not amortized but
impacted by the local economic and fiscal environment. We evaluate our tax is tested at least annually for impairment. Our impairment testing for goodwill
positions and establish liabilities in accordance with the applicable accounting is performed separately from our impairment testing of indefinite-lived
guidance on uncertainty in income taxes. We review these tax uncertainties in intangibles. We perform our annual impairment test for goodwill in the fourth
light of changing facts and circumstances, such as the progress of tax audits, quarter of each year. We consider qualitative indicators of the fair value of a
and adjust them accordingly. We have a number of audits in process in reporting unit when it is unlikely that a reporting unit has impaired goodwill. In
various jurisdictions. Although the resolution of these tax positions is certain circumstances, we may also utilize a discounted cash flow analysis
uncertain, based on currently available information, we believe that it is more that requires certain assumptions and estimates be made regarding market
likely than not that the ultimate outcomes will not have a material adverse conditions and our future profitability. In those circumstances we test goodwill
effect on our financial position, results of operations or cash flows. for impairment by reviewing the book value compared to the fair value at the
reporting unit level. We test individual indefinite-lived intangibles by reviewing
Because there are a number of estimates and assumptions inherent in
the individual book values compared to the fair value. We determine the fair
calculating the various components of our tax provision, certain changes or
value of our reporting units and indefinite-lived intangible assets based on the
future events, such as changes in tax legislation, geographic mix of earnings, income approach. Under the income approach, we calculate the fair value of
completion of tax audits or earnings repatriation plans, could have an impact
our reporting units and indefinite-lived intangible assets based on the present
on those estimates and our effective tax rate.
value of estimated future cash flows. Considerable management judgment is
Acquisitions, Goodwill and Intangibles, and Long-Lived Assets necessary to evaluate the impact of operating and macroeconomic changes
We account for acquired businesses using the purchase method of and to estimate future cash flows to measure fair value. Assumptions used in
accounting. Under the purchase method, our financial statements include the our impairment evaluations, such as forecasted growth rates and cost of
operations of an acquired business starting from the completion of the capital, are consistent with internal projections and operating plans. We
acquisition. In addition, the assets acquired and liabilities assumed are believe such assumptions and estimates are also comparable to those that
recorded on the date of acquisition at their respective estimated fair values, would be used by other marketplace participants.
with any excess of the purchase price over the estimated fair values of the net We did not recognize any impairment charges for goodwill during the years
assets acquired recorded as goodwill. presented, as our annual impairment testing indicated that all reporting unit
Significant judgment is required in estimating the fair value of intangible assets goodwill fair values exceeded their respective recorded values. Future
and in assigning their respective useful lives. Accordingly, we typically obtain changes in the judgments, assumptions
the assistance of third-party

and estimates that are used in our impairment testing for goodwill and We enter into designated and non-designated forward currency exchange
indefinite-lived intangible assets, including discount and tax rates and future contracts to mitigate the impact of currency fluctuations on transactions
cash flow projections, could result in significantly different estimates of the fair denominated in nonfunctional currencies, thereby limiting risk that would
values. A significant reduction in the estimated fair values could result in otherwise result from changes in exchange rates. These nonfunctional
impairment charges that could materially affect our financial statements. currency exposures principally relate to intercompany receivables and
We review our other long-lived assets for indicators of impairment whenever payables arising from intercompany purchases of manufactured products. The
events or changes in circumstances indicate that the carrying amount may not periods of the forward currency exchange contracts correspond to the periods
be recoverable. The evaluation is performed at the lowest level of identifiable of the exposed transactions, with realized gains and losses included in the
cash flows, which is at the individual asset level or the asset group level. The measurement and recording of transactions denominated in the nonfunctional
undiscounted cash flows expected to be generated by the related assets are currencies. All forward currency exchange contracts are recorded at their fair
estimated over their useful life based on updated projections. If the evaluation value each period, with resulting gains (losses) for non-designated forward
indicates that the carrying amount of the assets may not be recoverable, any contracts and any ineffectiveness measured on designated forward currency
potential impairment is measured based upon the fair value of the related exchange contracts included in our Consolidated Statements of Earnings. For
assets or asset group as determined by an appropriate market appraisal or derivative instruments that are designated and qualify as a cash flow hedge,
other valuation technique. Assets classified as held for sale, if any, are the effective portion of the gain or loss on the derivative is reported as a
recorded at the lower of carrying amount or fair value less costs to sell. component of accumulated other comprehensive income, and reclassified into
earnings in the same period during which the hedged transaction affects
Legal and Other Contingencies earnings.
We are involved in various ongoing proceedings, legal actions and claims
arising in the normal course of business, including proceedings related to We have designated certain long-term intercompany loans payable and
product, labor and intellectual property, and other matters that are more fully forward exchange contracts as net investment hedges of our investments in
described in Note 8 to the Consolidated Financial Statements. The outcomes certain international subsidiaries that use the Euro as their functional currency.
of these matters will generally not be known for prolonged periods of time. In The effective portion of derivatives designated as net investment hedges are
certain of the legal proceedings, the claimants seek damages, as well as other recorded at fair value at each balance sheet date and the change in fair value
compensatory and equitable relief, that could result in the payment of is recorded as a component of other comprehensive income.
significant claims and settlements and/or the imposition of injunctions or other The estimated fair value of forward currency exchange contracts represents
equitable relief. For legal matters for which management has sufficient the measurement of the contracts at month-end spot rates as adjusted by
information to reasonably estimate our future obligations, a liability current forward points. A hypothetical 10% change in foreign currencies
representing management's best estimate of the probable loss, or the relative to the United States dollar would change the December 31, 2015 fair
minimum of the range of probable losses when a best estimate within the value by approximately $178. We are exposed to credit loss in the event of
range is not known, for the resolution of these legal matters is recorded. The nonperformance by counterparties on our outstanding forward currency
estimates are based on consultation with legal counsel, previous settlement exchange contracts, but we do not anticipate nonperformance by any of our
experience and settlement strategies. If actual outcomes are less favorable counterparties.
than those projected by management, additional expense may be incurred, We have certain investments in net assets in international locations that are
which could unfavorably affect future operating results. We are currently self- not hedged. These investments are subject to translation gains and losses
insured for product liability-related claims and expenses. The ultimate cost to due to changes in foreign currency exchange rates. For 2015 the weakening
us with respect to product liability claims could be materially different than the of foreign currencies relative to the United States dollar decreased the value of
amount of the current estimates and accruals and could have a material these investments in net assets and increased the related foreign currency
adverse effect on our financial position, results of operations and cash flows. translation adjustment loss in shareholders' equity by ($390). Refer to Note 3
in the Notes to the Consolidated Financial Statements for further information.
NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 in the Notes to the Consolidated Financial Statements for
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
further information.
ABOUT MARKET RISK
OTHER INFORMATION
Hedging and Derivative Financial Instruments We consider our material area of market risk exposure to be exchange rate
We sell our products globally, as a result, our financial results could be risk. Quantitative and qualitative disclosures about exchange rate risk are
significantly affected by factors such as weak economic conditions or changes included in the "Other Information" section of Management's Discussion and
in foreign currency exchange rates. Our operating results are primarily Analysis of Financial Condition in Item 7, under the caption "Other Information
exposed to changes in exchange rates among the United States dollar; - Hedging and Derivative Financial Instruments."
European currencies, in particular the euro, Swiss franc and the British pound;
the Japanese yen; the Australian dollar; and the Canadian dollar. We develop
and manufacture products in the United States, Canada, Turkey, China,
France, Germany, Ireland, Puerto Rico and Switzerland and incur costs in the
applicable local currencies. This global deployment of facilities serves to
partially mitigate the impact of currency exchange rate changes on our cost of
sales.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON CONSOLIDATED FINANCIAL STATEMENTS

The
Board
of
Directors
and
Shareholders
of
Stryker
Corporation
:
We have audited the accompanying consolidated balance sheets of Stryker Corporation and subsidiaries as of December 31, 2015 and 2014 , and the related
consolidated statements of earnings and comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended
December 31, 2015 . Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Stryker Corporation and
subsidiaries at December 31, 2015 and 2014 , and the consolidated results of their operations and their cash flows for each of the three years in the period
ended December 31, 2015 , in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Stryker Corporation's internal
control over financial reporting as of December 31, 2015 , based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 11, 2016 expressed an unqualified opinion thereon.
/s/ ERNST & YOUNG LLP
Grand Rapids, Michigan

February 11, 2016
17
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
2015 2014 2013

Net sales $ 9,946 $ 9,675 $ 9,021
Cost of sales 3,344 3,319 3,002
Gross profit $ 6,602 $ 6,356 $ 6,019
Research, development and engineering expenses 625 614 536
Selling, general and administrative expenses 3,610 3,547 3,467
Recall charges, net of insurance proceeds 296 761 622
Intangible asset amortization 210 188 138
Total operating expenses $ 4,741 $ 5,110 $ 4,763
Operating income 1,861 1,246 1,256
Other income (expense), net (126) (86) (44)
Earnings before income taxes $ 1,735 $ 1,160 $ 1,212
Income taxes 296 645 206
Net earnings $ 1,439 $ 515 $ 1,006
Net earnings per share of common stock:

Basic net earnings per share of common stock $ 3.82 $ 1.36 $ 2.66
Diluted net earnings per share of common stock $ 3.78 $ 1.34 $ 2.63
Weighted-average shares outstanding - in millions:

Basic 376.6 378.5 378.6
Net effect of dilutive employee stock options 4.3 4.3 3.5
Diluted 380.9 382.8 382.1
Anti-dilutive shares excluded from the calculation of net effect of dilutive employee stock options — — —
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
2015 2014 2013

Net earnings $ 1,439 $ 515 $ 1,006
Other comprehensive income, net of tax
Marketable securities (3) 3 (4)
Pension plans 17 (55) 20
Unrealized (losses) gains on designated hedges (9) 6 7
Financial statement translation (390) (440) 80
Total other comprehensive (loss) income, net of tax $ (385) $ (486) $ 103
Comprehensive income $ 1,054 $ 29 $ 1,109
See
accompanying
notes
to
Consolidated
Financial
Statements.

CONSOLIDATED BALANCE SHEETS
2015 2014
ASSETS
Current assets
Cash and cash equivalents $ 3,379 $ 1,795
Marketable securities 700 3,205
Accounts receivable, less allowance of $61 ($59 in 2014) 1,662 1,572
Inventories
Materials and supplies 304 248
Work in Process 103 88
Finished Goods 1,232 1,252
Total inventories $ 1,639 $ 1,588
Prepaid expenses and other current assets 564 524
Total current assets $ 7,944 $ 8,684
Property, plant and equipment
Land, buildings and improvements 687 678
Machinery and equipment 2,043 1,919
Total property, plant and equipment 2,730 2,597
Less allowance for depreciation 1,531 1,499
Net property, plant and equipment $ 1,199 $ 1,098
Other assets
Goodwill 4,136 4,186
Other intangibles, net 1,794 2,018
Other noncurrent assets 1,174 1,293
Total assets $ 16,247 $ 17,279
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable 410 329
Accrued compensation 637 597
Income taxes 141 333
Dividend payable 142 131
Accrued recall expenses 694 1,593
Accrued expenses and other liabilities 710 751
Current maturities of debt 769 727
Total current liabilities $ 3,503 $ 4,461
Long-term debt, excluding current maturities 3,253 3,246
Other noncurrent liabilities 980 977
Shareholders' equity
Common stock, $0.10 par value:
Authorized: 1 billion shares, outstanding: 373 million shares (378 million shares in 2014) 37 38
Additional paid-in capital 1,321 1,252
Retained earnings 7,792 7,559
Accumulated other comprehensive income (639) (254)
Total shareholders' equity $ 8,511 $ 8,595
Total liabilities & shareholders' equity $ 16,247 $ 17,279
See
accompanying
notes
to
Consolidated
Financial
Statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Accumulated
Additional Other
Common Paid-In Retained Comprehensive
Stock Capital Earnings Income (Loss) Total
2012 $ 38 $ 1,098 $ 7,332 $ 129 $ 8,597
Net earnings 1,006 1,006
Other comprehensive income 103 103
Issuance of 2.1 million shares of common stock under
stock option and benefit plans, including $6 excess
income tax benefit (1) (1)
Repurchase and retirement of 4.8 million shares of
common stock (13) (304) (317)
Share-based compensation 76 76
Cash dividends declared of $1.10 per share of
common stock (417) (417)
2013 $ 38 $ 1,160 $ 7,617 $ 232 $ 9,047
Net earnings 515 515
Other comprehensive loss (486) (486)
income tax benefit 19 19
common stock (4) (96) (100)
2014 $ 38 $ 1,252 $ 7,559 $ (254) $ 8,595
Net earnings 1,439 1,439
Other comprehensive loss (385) (385)
income tax benefit 8 8
common stock (1) (25) (674) (700)
2015 $ 37 $ 1,321 $ 7,792 $ (639) $ 8,511
See
accompanying
notes
to
Consolidated
Financial
Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS
2015 2014 2013

Operating activities
Net earnings $ 1,439 $ 515 $ 1,006
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation 187 190 169
Amortization of intangible assets 210 188 138
Share-based compensation 86 77 76
Gross recall charges 349 940 622
Sale of inventory stepped up to fair value at acquisition 7 27 28
Deferred income tax benefit 87 60 23
Changes in operating assets and liabilities:
Accounts receivable (151) (89) (89)
Inventories (115) (173) (77)
Accounts payable 35 13 1
Accrued expenses and other liabilities 73 92 41
Recall-related payments (1,206) (98) (6)
Income taxes (290) 133 (124)
Other 188 (93) 78
Net cash provided by operating activities $ 899 $ 1,782 $ 1,886
Investing activities
Acquisitions, net of cash acquired (153) (916) (2,320)
Purchases of marketable securities (1,715) (4,365) (4,558)
Proceeds from sales of marketable securities 4,094 3,636 4,856
Purchases of property, plant and equipment (270) (233) (195)
Net cash provided by (used in) investing activities $ 1,956 $ (1,878) $ (2,217)
Financing activities
Proceeds from borrowings 1,576 1,601 369
Payments on borrowings (2,272) (1,428) (355)
Proceeds from issuance of long-term debt, net 744 986 991
Dividends paid (521) (462) (401)
Repurchase of common stock (700) (100) (317)
Other financing 32 32 13
Net cash (used in) provided by financing activities $ (1,141) $ 629 $ 300
Effect of exchange rate changes on cash and cash equivalents (130) (77) (25)
Change in cash and cash equivalents $ 1,584 $ 456 $ (56)
Cash and cash equivalents at beginning of year 1,795 1,339 1,395
Cash and cash equivalents at end of year $ 3,379 $ 1,795 $ 1,339
Supplemental cash flow disclosure:

Cash paid for income taxes, net of refunds $ 497 $ 437 $ 321
Cash paid for interest on debt $ 101 $ 102 $ 88
See
accompanying
notes
to
Consolidated
Financial
Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS currency as the functional currency. Adjustments to translate those statements
into United States dollars are recorded in other comprehensive income (OCI).
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES Transactional exchange gains and losses are included in earnings.
Nature of Operations: Stryker Corporation (the "Company," "we," "us," or Cash Equivalents: Highly liquid investments with remaining stated maturities
"our") is a global leader in medical technology. Our products include implants of three months or less when purchased are considered cash equivalents and
used in joint replacement and trauma surgeries; surgical equipment and recorded at cost.
surgical navigation systems; endoscopic and communications systems; Marketable Securities: Marketable securities consist of marketable debt
patient handling and emergency medical equipment; neurosurgical, securities, certificates of deposit and mutual funds. Mutual funds are acquired
neurovascular and spinal devices; as well as other medical device products to offset changes in certain liabilities related to deferred compensation
used in a variety of medical specialties. arrangements and are expected to be used to settle these liabilities. Pursuant
Basis of Presentation and Consolidation: The Consolidated Financial to our investment policy, all individual marketable security investments must
Statements include the Company and its subsidiaries. All significant have a minimum credit quality of single A (Standard & Poor’s and Fitch) and
intercompany accounts and transactions are eliminated in consolidation. We A2 (Moody’s Corporation) at the time of acquisition, while the overall portfolio
have no material interests in variable interest entities and none that require of marketable securities must maintain a minimum average credit quality of
consolidation. Certain prior year amounts have been reclassified to conform double A (Standard & Poor’s and Fitch) or Aa (Moody’s Corporation). In the
with the presentation of our Consolidated Financial Statements and in Note 13 event of a rating downgrade below the minimum credit quality subsequent to
for 2015. purchase, the marketable security investment is evaluated to determine the
appropriate action to take to minimize the overall risk to our marketable
Use of Estimates: The preparation of financial statements in conformity with
security investment portfolio. Our marketable securities are classified as
accounting principles generally accepted in the United States (GAAP) requires
available-for-sale and trading securities.
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and Accounts Receivable: Accounts receivable consists of trade and other
liabilities on the date of the financial statements and the reported amounts of miscellaneous receivables. An allowance is maintained for doubtful accounts
revenues and expenses during the reporting period. Actual results could differ for estimated losses in the collection of accounts receivable. Estimates are
from those estimates. made regarding the ability of customers to make required payments based on
historical credit experience and expected future trends. Accounts receivable
Revenue Recognition: Sales are recognized when revenue is realized or
are written off when all reasonable collection efforts are exhausted.
realizable and has been earned. Our policy is to recognize revenue when title
to the product, ownership and risk of loss transfer to the customer, which can Inventories: Inventories are stated at the lower of cost or market, with cost
be on the date of shipment, the date of receipt by the customer or, for most generally determined using the first-in, first-out (FIFO) cost method. For
orthopaedics products, when we receive appropriate notification that the excess and obsolete inventory resulting from the potential inability to sell
product has been used or implanted. A provision for estimated sales returns, specific products at prices in excess of current carrying costs, reserves are
discounts, rebates and other sales incentives is recorded as a reduction of net maintained to reduce current carrying cost to market prices.
sales in the same period that the revenue is recognized. Shipping and Financial Instruments: Our financial instruments consist of cash, cash
handling costs charged to customers are included in net sales. equivalents, marketable securities, accounts receivable, other investments,
Cost of Sales: Cost of sales is primarily comprised of direct materials and accounts payable, debt and foreign currency exchange contracts. With the
supplies consumed in the manufacture of product, as well as manufacturing exception of our long-term debt, which is discussed in further detail in Note 9,
labor, depreciation expense and direct overhead expense necessary to our estimates of fair value for financial instruments approximate their carrying
acquire and convert the purchased materials and supplies into finished amounts on December 31, 2015 and 2014 .
product. Cost of sales also includes the cost to distribute products to All marketable securities are recognized at fair value. Adjustments to the fair
customers, inbound freight costs, warehousing costs and other shipping and value of marketable securities that are classified as available-for-sale are
handling activity. recorded as increases or decreases, net of income taxes, within accumulated
Research, Development and Engineering Expenses: Research and other comprehensive income (AOCI) in shareholders’ equity and adjustments
development costs are charged to expense as incurred. Costs include to the fair value of marketable securities that are classified as trading are
research, development and engineering activities relating to the development recorded in earnings. The amortized cost of marketable debt securities is
of new products, improvement of existing products, technical support of adjusted for amortization of premiums and discounts to maturity computed
products and compliance with governmental regulations for the protection of under the effective interest method. Such amortization and interest and
customers and patients. Costs primarily consist of salaries, wages, consulting realized gains and loses are included in other income (expense), net. The cost
and depreciation and maintenance of research facilities and equipment. of securities sold is determined by the specific identification method.
Selling, General and Administrative Expenses: Selling, general and We review declines in the fair value of our investments classified as available-
administrative expense is primarily comprised of selling expenses, marketing for-sale to determine whether the decline in fair value is an other-than-
expenses, administrative and other indirect overhead costs, amortization of temporary impairment. The resulting losses from other-than-temporary
loaner instrumentation, depreciation and amortization expense of non- impairments of available-for-sale marketable securities are included in
manufacturing assets and other miscellaneous operating items. earnings.
Currency Translation: Financial statements of subsidiaries outside the
United States generally are measured using the local

Derivatives: All derivatives are recognized at fair value and reported on a or distributor patronage) and trademarks and patents. Intangible assets with
gross basis. We enter into forward currency exchange contracts to mitigate determinable useful lives are amortized on a straight-line basis over their
the impact of currency fluctuations on transactions denominated in estimated useful lives of four to 40 years. Certain acquired trade names are
nonfunctional currencies, thereby limiting our risk that would otherwise result considered to have indefinite lives and are not amortized, but are assessed
from changes in exchange rates. These nonfunctional currency exposures annually for potential impairment as described below.
principally relate to intercompany receivables and payables arising from In certain of our acquisitions, we acquire in-process research and
intercompany purchases of manufactured products. The periods of the forward development (IPRD) which are indefinite-lived intangible assets. IPRD where
currency exchange contracts correspond to the periods of the exposed research has been completed becomes a determinable-lived intangible asset
transactions, with realized gains and losses included in the measurement and and IPRD determined to have no future use becomes impaired.
recording of transactions denominated in the nonfunctional currencies. All
Goodwill, Intangibles and Long-Lived Asset Impairment Tests: We
forward currency exchange contracts are recorded at their fair value each
period, with resulting gains (losses) included in earnings. perform our annual impairment test for goodwill in the fourth quarter of each
year. We consider qualitative indicators of the fair value of a reporting unit
Forward currency exchange contracts designated as cash flow hedges are when it is unlikely that a reporting unit has impaired goodwill. In certain
designed to hedge the variability of cash flows associated with forecasted circumstances, we may also utilize a discounted cash flow analysis that
transactions denominated in a foreign currency that will take place in the requires certain assumptions and estimates be made regarding market
future. Changes in value of derivatives designated as cash flow hedges are conditions and our future profitability. Indefinite-lived intangible assets are also
recorded in AOCI on the consolidated balance sheets until earnings are tested at least annually for impairment by comparing the individual carrying
affected by the variability of the underlying cash flows. At that time, the values to the fair value.
applicable amount of gain or loss from the derivative instrument that is
We review long-lived assets for indicators of impairment whenever events or
deferred in shareholders’ equity is reclassified into earnings and is included in
changes in circumstances indicate that the carrying amount may not be
other income (expense), net or cost of goods sold in the consolidated
statements of earnings, depending on the underlying transaction that is being recoverable. The evaluation is performed at the lowest level of identifiable
cash flows. Undiscounted cash flows expected to be generated by the related
hedged. We report our derivative instruments on a gross basis.
assets are estimated over the asset's useful life based on updated projections.
Interest rate derivative instruments designated as fair value hedges are being If the evaluation indicates that the carrying amount of the asset may not be
used to manage the exposure to interest rate movements and to reduce recoverable, any potential impairment is measured based upon the fair value
borrowing costs by converting fixed-rate debt into floating-rate debt. Under of the related asset or asset group as determined by an appropriate market
these agreements, we agree to exchange, at specified intervals, the difference appraisal or other valuation technique. Assets classified as held for sale are
between fixed and floating interest amounts calculated by reference to an recorded at the lower of carrying amount or fair value less costs to sell.
agreed-upon notional principal amount.
Share-Based Compensation: We use share based compensation in the form
For derivative instruments designated as net investment hedges of our foreign of stock options, restricted stock units (RSUs) and performance-based
operations, the gain or loss is recorded in the cumulative translation restricted stock units (PSUs). Compensation expense is recognized in the
adjustment within AOCI together with the offsetting loss or gain of the hedged Consolidated Statements of Earnings based on the estimated fair value of the
exposure of the underlying foreign operations. Any ineffective portion of the awards on the grant date. Compensation expense recognized reflects an
net investment hedges is reported in earnings during the period of change. estimate of the number of awards expected to vest after taking into
Hedge effectiveness for equity forward contracts and foreign exchange net consideration an estimate of award forfeitures based on actual experience and
investment hedge forward contracts is assessed by comparing changes in fair is recognized on a straight-line basis over the requisite service period, which is
value due to changes in spot rates for both the derivative and the hedged generally the period required to obtain full vesting. Management expectations
item. related to the achievement of performance goals associated with PSU grants
Property, Plant and Equipment: Property, plant and equipment is stated at is assessed regularly and that assessment is used to determine whether PSU
cost. Depreciation is generally computed by the straight-line method over the grants are expected to vest. If performance-based milestones related to PSU
estimated useful lives of three to 30 years for buildings and improvements and grants are not met or not expected to be met, any compensation expense
three to ten years for machinery and equipment. recognized to date associated with grants that are not expected to vest will be
Goodwill and Other Intangible Assets: Goodwill represents the excess of reversed.
purchase price over fair value of tangible net assets of acquired businesses at Income Taxes: Deferred income tax assets and liabilities are determined
the acquisition date, after amounts allocated to other identifiable intangible based on differences between financial reporting and income tax bases of
assets. Factors that contribute to the recognition of goodwill include synergies assets and liabilities and are measured using the enacted income tax rates in
that are specific to our business and not available to other market participants effect for the years in which the differences are expected to reverse. Deferred
and are expected to increase revenues and profits; acquisition of a talented income tax benefits generally represent the change in net deferred income tax
workforce; cost savings opportunities; the strategic benefit of expanding our assets and liabilities during the year. Other amounts result from adjustments
presence in core and adjacent markets; and diversifying our product portfolio. related to acquisitions and foreign currency as appropriate.
The fair values of other identifiable intangible assets are primarily determined We operate in multiple income tax jurisdictions both within the United States
using the income approach. Other intangible assets include, but are not limited and internationally. Accordingly, management must determine the appropriate
to, developed technology, customer and distributor relationships (which reflect allocation of income to each of these jurisdictions based on current
expected continued customer interpretations of complex income tax

regulations. Income tax authorities in these jurisdictions regularly perform

Financial
audits of our income tax filings. Income tax audits associated with the Marketable Pension Statement
allocation of this income and other complex issues, including inventory 2014 Securities Plans Hedges Translation Total
transfer pricing and cost sharing, product royalty and foreign branch Beginning $ — $ (81) $ 7 $ 306 $ 232
arrangements, may require an extended period of time to resolve and may
OCI before reclassifications 12 (72) 10 (440) (490)
result in significant income tax adjustments if changes to the income allocation
Tax (benefit) expense on
are required between jurisdictions with different income tax rates. OCI (2) 22 (4) — 16
New Accounting Pronouncements Not Yet Adopted Reclassifications out of
AOCI, net
In April 2015 the FASB issued ASU 2015-03, Interest - Imputation of Interest: Cost of Sales — (6) (1) — (7)
Simplifying the Presentation of Debt Issuance Costs. This update requires an Other (income) expense (9) — — — (9)
entity to present debt issuance costs related to a recognized debt liability as a Income tax expense
direct deduction from the carrying amount of that debt liability consistent with (benefit) 2 1 1 — 4
debt discounts and is effective for financial statements issued for fiscal years Net current period OCI $ 3 $ (55) $ 6 $ (440) $ (486)
beginning after December 15, 2015 and interim periods within those fiscal
Ending $ 3 $ (136) $ 13 $ (134) $ (254)
years. We adopted this standard on January 1, 2016 and do not expect it to
have a material impact on the Consolidated Financial Statements. NOTE 4 - FAIR VALUE MEASUREMENTS
In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Financial assets and liabilities carried at fair value are classified and disclosed
Customers. This guidance, which is effective for financial statements issued in one of the following three categories:
for fiscal years beginning after December 15, 2017, outlines a single, Level 1 Quoted market prices in active markets for identical assets or liabilities.
comprehensive model for accounting for revenue from contracts with
Level 2 Observable market-based inputs or unobservable inputs that are corroborated
customers. We plan to adopt this standard on January 1, 2018. We are still by market data.
evaluating what impact, if any, that the standard will have on our financial Level 3 Unobservable inputs reflecting our assumptions or external inputs from active
statements. markets.
NOTE 2 - SUBSEQUENT EVENT When applying fair value principles in the valuation of assets and liabilities, we
On February 1, 2016 we entered into a definitive agreement to acquire Sage are required to maximize the use of quoted market prices and minimize the
Products, LLC (Sage) in an all cash transaction for $ 2,775 . Sage develops, use of unobservable inputs. We calculate the fair value of our Level 1 and
manufactures and distributes disposable products targeted at reducing "Never Level 2 instruments based on the exchange traded price of similar or identical
Events," primarily in the intensive care unit and MedSurg hospital unit setting. instruments, where available, or based on other observable inputs taking into
Sage’s products include solutions for oral care, skin preparation and account our credit risk and that of our counterparties. Foreign currency
protection, patient cleaning and hygiene, turning and positioning devices and exchange contracts and interest rate hedges are included in Level 2 as we
heel care boots. This transaction is expected to close during the second use inputs other than quoted prices that are observable for the asset or
quarter of 2016. liability. The Level 2 derivative instruments are primarily valued using standard
calculations and models that use readily observable market data as their
NOTE 3 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE basis. Our Level 3 liabilities represent milestone payments for acquisitions.
INCOME The fair value of the liability was estimated using a discounted cash flow
Financial
technique. Significant unobservable inputs to this technique included our
Marketable Pension Statement probability assessments of occurrence of triggering events, appropriately
2015 Securities Plans Hedges Translation Total discounted considering the uncertainties associated with the obligation. We
Beginning $ 3 $ (136) $ 13 $ (134) $ (254) remeasure our assets and liabilities each reporting period and record the
OCI before changes in fair value within selling, general and administrative expense and
reclassifications 1 15 2 (362) (344) the changes in the time value of money within other income (expense), net.
Tax (benefit) expense on
OCI (1) (4) 2 (28) (31)
Reclassifications out of
AOCI, net
Cost of Sales — 8 (19) — (11)
Other (income) expense (4) — — — (4)
Income tax expense
(benefit) 1 (2) 6 — 5
Net current period OCI $ (3) $ 17 $ (9) $ (390) $ (385)
Ending $ — $ (119) $ 4 $ (524) $ (639)

impaired have been in a continuous unrealized loss position for less than
2015 2014 twelve months and the losses are not considered material.
Cash and cash equivalents $ 3,379 $ 1,795 The total of interest and marketable securities income was $ 14 , $ 28 , and $
24 in 2015 , 2014 , and 2013 . The amounts are included in other income
Trading marketable securities 82 80
(expense), net.
Level 1 - Assets $ 3,461 $ 1,875
Available-for-sale marketable securities NOTE 5 - DERIVATIVE INSTRUMENTS

Corporate and asset-backed debt securities $ 214 $ 1,525 We use operational and economic hedges, foreign currency exchange forward
Foreign government debt securities 96 726 contracts, net investment hedges and interest rate derivative instruments to
manage the impact of currency exchange and interest rate fluctuations on
United States agency debt securities 120 382
earnings and cash flow. At the inception, the derivative is designated as a
United States treasury debt securities 264 474
cash flow hedge, fair value hedge or is a free standing derivative. We do not
Certificates of deposit 8 110 enter into derivative instruments for speculative purposes.
Other — 12
Non-designated Foreign Exchange Forward Contract Derivatives
Total available-for-sale marketable securities $ 702 $ 3,229
Derivative forward contracts are used to offset our exposure to the change in
Foreign currency exchange forward contracts 69 32 value of specific foreign currency denominated assets and liabilities. These
Interest rate swap asset 15 10 derivatives are not designated as hedges and, therefore, changes in the value
Level 2 - Assets $ 786 $ 3,271 of these forward contracts are recognized in earnings, thereby offsetting the
Total assets measured at fair value $ 4,247 $ 5,146 current earnings effect of the related changes in value of foreign currency
denominated assets and liabilities. The estimated fair value of our forward
currency exchange contracts represents the measurement of the contracts at
Deferred compensation arrangements $ 82 $ 80 month-end spot rates as adjusted by current forward points.
Level 1 - Liabilities $ 82 $ 80 Designated Foreign Exchange Forward Contract Derivatives
Foreign currency exchange forward contracts $ 10 $ 12 We use a layered hedging program to hedge select anticipated foreign
Interest rate swap liability 4 — currency cash flows to reduce volatility in both cash flows and reported
Level 2 - Liabilities $ 14 $ 12 earnings. These foreign exchange contracts generally have maturities up to
eighteen months. For derivative instruments that are designated and qualify as
Contingent consideration
a cash flow hedge, the effective portion of the gain or loss on the derivative is
Beginning balance $ 48 $ 59 reported as a component of AOCI and reclassified into other income
Additions 11 — (expense), net or cost of sales within earnings in the same period during which
Losses included in earnings — 4 the hedged transaction affects earnings. Cash flows associated with these
Settlements (3) (15) hedges are included in cash from operations in the same category as the cash
Balance at the end of the period $ 56 $ 48 flows from the items being hedged.
Level 3 - Liabilities $ 56 $ 48 Designated Net Investment Hedges
Total liabilities measured at fair value $ 152 $ 140 We have designated certain long-term intercompany loans payable and
forward exchange contracts as net investment hedges of our investments in
Fair Value of Available for Sale Securities by Contractual Maturity certain international subsidiaries that use the Euro as their functional currency.
The effective portion of derivatives designated as net investment hedges are
2015 2014 recorded at fair value at each balance sheet date and the change in fair value
Due in one year or less $ 588 $ 430 is recorded as a component of AOCI. On December 31, 2015 the total after-
Due after one year through three years $ 114 $ 2,505 tax amount in AOCI related to our designated net investment hedges was $ 21
Due after three years $ — $ 294 . For derivative instruments that are designated and qualify as
a net investment hedge, the effective portion of the derivative's gain or loss is
On December 31, 2015 the aggregate difference between the cost and fair reported as a component of OCI and recorded in AOCI.
value of available-for-sale marketable securities is not material. Interest
We use the forward method to measure ineffectiveness. Under this method,
receivable of $ 2 related to our marketable securities portfolio was recorded in
prepaid expenses and other current assets. for each reporting period, the change in the carrying value of the Euro-
denominated amounts due to remeasurement of the effective portion is
While some investments have been downgraded by rating agencies since reported as a component of AOCI and the remaining change in the carrying
their initial purchase, less than 1% of our investments in available-for-sale value of the ineffective portion, if any, is recognized in other income
marketable securities had a credit quality rating of less than A2 (Moody's), A (expense), net. The gain or loss related to settled net investment hedges will
(Standard & Poors) and A (Fitch). We do not intend to sell the investments be subsequently reclassified into net earnings when the hedged net
and it is not more likely than not that we will be required to sell the investments investment is either sold or substantially liquidated. We evaluate the
before recovery of their amortized cost basis, which may be maturity, we do effectiveness of our net investment hedges quarterly and did not record any
not consider these investments to have other-than-temporarily impairment on ineffectiveness in 2015.
December 31, 2015 .
Securities in a Continuous Unrealized Loss Position
Number of
Investments Fair Value
Corporate and Asset-Backed 98 $ 117
Foreign Government 10 30
United States Agency 8 18
United States Debt 15 38
Certificate of Deposit 6 4
Total 137 $ 207
On December 31, 2015 substantially all our investments with unrealized

losses that are not deemed to be other-than-temporarily

specified intervals, the difference between fixed and floating interest amounts
Designated Non-Designated Total calculated by reference to an agreed-upon notional principal amount.
2015 On December 31, 2015 we had interest rate swaps in gross notional amounts
of $500 designated as fair value hedges of underlying fixed rate obligations
Gross notional amount $ 889 $ 4,061 $ 4,950 representing a portion of our $600 senior unsecured notes due in 2024. There
Maximum term in days 546 was no hedge ineffectiveness recorded as a result of these fair value hedges.
Fair Value Interest Rate Hedge Instruments
Fair value:
Other current assets $ 27 $ 41 $ 68 2015 2014

Other noncurrent assets 1 — 1 Gross notional amount $ 500 $ 500
Other current liabilities (6) (3) (9) Fair value:
Other noncurrent liabilities (1) — (1) Other noncurrent assets 15 10
Total fair value $ 21 $ 38 $ 59
Long-term debt (15) (10)
2014 Total fair value $ — $ —
Gross notional amount $ 357 $ 2,085 $ 2,442 We are exposed to credit loss in the event of nonperformance by
Maximum term in days 546
counterparties on our outstanding derivative instruments but do not anticipate
nonperformance by any of our counterparties. Should a counterparty default,
Fair value: our maximum exposure to loss is the asset balance of the instrument.
Other current assets $ 18 $ 12 $ 30 NOTE 6 - ACQUISITIONS
Other noncurrent assets 2 — 2 2015 Acquisitions
Other current liabilities — (12) (12) In January 2015 we acquired certain assets of CHG Hospital Beds, Inc.
Total fair value $ 20 $ — $ 20 (CHG). CHG designs, manufactures and markets low-height hospital beds and
related accessories. This acquisition enhances our product offerings within our
We are exposed to credit loss in the event of nonperformance by MedSurg segment and is included in the 2015 Other column in the table
counterparties on our outstanding forward currency exchange contracts but do below. Goodwill acquired associated with the CHG acquisition is deductible for
not anticipate nonperformance by any of our counterparties. Should a tax purposes.
counterparty default, our maximum exposure to loss is the asset balance of
2014 Acquisitions
the instrument.
In September 2014 we acquired certain assets of Small Bone Innovations, Inc.
Net Currency Exchange Rate Gains (Losses)
(SBi) for an aggregate purchase price of $365 . SBi products are designed
Recorded in: 2015 2014 2013 and promoted for upper and lower extremity small bone indications, with a
focus on small joint replacement. The acquisition of the assets of SBi
Cost of sales $ 19 $ 1 $ —
enhances our product offerings within our Orthopaedics segment. Goodwill
Other income (expense), net (22) (8) 3 acquired associated with the SBi acquisition is deductible for tax purposes.
Total $ (3) $ (7) $ 3
In April 2014 we acquired Berchtold Holding, AG (Berchtold) for an aggregate
On December 31, 2015 and 2014 pretax gains on derivatives designated as purchase price of $184 . Berchtold sells surgical tables, equipment booms and
hedges of $17 and $ 15 , which are recorded in AOCI, are expected to be surgical lighting systems. In March 2014 we acquired Patient Safety
reclassified to earnings during the next 12 months. This reclassification is Technologies, Inc. (PST), for an aggregate purchase price of $120 . PST’s
primarily due to the sale of inventory that includes previously hedged proprietary Safety-Sponge ® System and SurgiCount 360™ compliance
purchases. There have been no ineffective portions of derivatives that have software help prevent Retained Foreign Objects in the operating room. In
resulted in gains or losses in any of the periods presented. addition the acquisition of Pivot Medical Inc. which develops and sells
Interest Rate Risk on Future Debt Issuance innovative products for hip arthroscopy and other 2014 acquisitions are
included in the 2014 Other column in the table below. These acquisitions
Forward starting interest rate derivative instruments designated as cash flow enhance our product offerings within our MedSurg segment.
hedges are used to manage the exposure to interest rate volatility with regard The measurement periods for our acquisitions in 2014 have been completed.
to future issuance and refinancing of debt. The effective portion of the gains or Revisions to the original purchase price allocation were not material.
losses on forward starting interest rate derivative instruments that are
The purchase price allocations for the 2015 acquisitions were based upon
designated and qualify as cash flow hedges is reported as a component of
preliminary valuations, and our estimates and assumptions are subject to
AOCI. Beginning in the period in which the debt refinancing occurs and the
related derivative instruments is terminated, the effective portion of the gains change within the measurement period. On December 31, 2015 management
is in the process of verifying data and finalizing information related to the 2015
or losses is then reclassified into interest expense over the term of the related
acquisitions and the valuation and recording of identifiable intangible assets,
debt.
deferred income taxes and the corresponding effect on the value of goodwill.
On December 31, 2015 we had interest rate swaps with notional amounts of $
375 designated as forward starting interest rate swaps in anticipation of future
debt issuances. The market value of outstanding interest rate swap
agreements on December 31, 2015 was $ 4 , which is recorded in accrued
expenses and other liabilities with an offsetting amount recorded in AOCI.
Upon the probable issuance of the debt, these amounts will be released to
interest expense over the term of the debt. The cash flow effect of this hedge
is recorded in cash flow from operations.
Fair Value Hedges
Interest rate derivative instruments designated as fair value hedges are used
to manage the exposure to interest rate movements and to reduce borrowing
costs by converting fixed-rate debt into floating-rate debt. Under these
agreements we agree to exchange, at

Purchase Price Allocation of Acquired Net Assets Amortization expense related to intangible assets was $ 210 , $ 188 and $ 138
for 2015 , 2014 and 2013 .
2015 2014
Estimated Amortization Expense
Other SBi Berchtold PST Other
Purchase price paid $ 138 $ 365 $ 184 $ 120 $ 216 2016 2017 2018 2019 2020
Contingent consideration 9 — — — — $ 202 $ 183 $ 181 $ 165 $ 148

Total consideration $ 147 $ 365 $ 184 $ 120 $ 216 During 2015 we placed certain in process research and development assets
Tangible assets acquired: into service as a result of the Food and Drug Administration's (FDA) clearance
of our Mako total knee application.
Cash — — 12 — —
NOTE 8 - CONTINGENCIES AND COMMITMENTS
Inventory 10 23 22 7 5
We are involved in various ongoing proceedings, legal actions and claims
Other assets 17 6 44 19 25 arising in the normal course of business, including proceedings related to
Liabilities (5) (2) (45) (31) (29) product, labor, intellectual property and other matters that are more fully
described below. The outcomes of these matters will generally not be known
Intangible assets: for prolonged periods of time. In certain of the legal proceedings, the claimants
Customer relationship 12 20 11 33 5 seek damages as well as other compensatory and equitable relief that could
result in the payment of significant claims and settlements and/or the
Trade name 2 — 7 — —
imposition of injunctions or other equitable relief. For legal matters for which
Developed technology and management has sufficient information to reasonably estimate our future
patents 51 73 32 26 115
obligations, a liability representing management's best estimate of the
Other 2 1 — — — probable loss, or the minimum of the range of probable losses when a best
IPRD — 1 — — 2 estimate within the range is not known, is recorded. The estimates are based
on consultation with legal counsel, previous settlement experience and
Goodwill 58 243 101 66 93 settlement strategies. If actual outcomes are less favorable than those
$ 147 $ 365 $ 184 $ 120 $ 216 estimated by management, additional expense may be incurred, which could
Weighted average life of unfavorably affect future operating results. We are self-insured for product
intangible assets 10 12 8 14 12 liability-related claims and expenses. The ultimate cost to us with respect to
product liability claims could be materially different than the amount of the
NOTE 7 - GOODWILL AND OTHER INTANGIBLE ASSETS
current estimates and accruals and could have a material adverse effect on
We completed our annual impairment tests of goodwill in 2015 and 2014 and our financial position, results of operations and cash flows.
concluded in each year that no impairments exist. In June 2012 we voluntarily recalled our Rejuvenate and ABG II Modular-Neck
Summary of Other Intangible Assets hip stems and terminated global distribution of these hip products. Product
liability lawsuits relating to this voluntary recall have been filed against us. On
Weighted Average Gross Less Net
Amortization Period Carrying Accumulated Carrying November 3, 2014 we announced that we had entered into a settlement
(Years) Amount Amortization Amount agreement to compensate eligible United States patients who had revision
Developed technologies surgery to replace their Rejuvenate and/or ABG II Modular-Neck hip stem prior
to that date. We continue to offer support for recall-related care and reimburse
2015 13 $ 1,597 $ 563 $ 1,034
patients who are not eligible to enroll in the settlement program for testing and
2014 13 1,468 466 1,002 treatment services, including any necessary revision surgeries. In addition,
Customer relationships some lawsuits will remain and we will continue to defend against them. Based
2015 15 $ 788 $ 290 $ 498
on the information that has been received, the actuarially determined range of
probable loss to resolve this matter globally is estimated to be approximately $
2014 15 801 239 562 1,824 ($ 2,056 before $ 232 of third-party insurance recoveries) to $ 2,416 . In
Patents 2015 we recorded additional charges to earnings of $ 295 , net of insurance
2015 11 $ 309 $ 191 $ 118 recoveries, representing the excess of the minimum of the range over the
previously recorded reserves. In 2015 we made recall-related payments
2014 12 293 175 118 totaling $ 1,202 under the United States Rejuvenate and ABG II settlement
Trademarks agreement. The final outcome of this matter is dependent on many factors that
are difficult to predict including the number of enrollees in the settlement
2015 10 $ 109 $ 41 $ 68
program and the total awards to them, the number and costs of patients not
2014 14 112 37 75 eligible for the settlement program who seek testing and treatment services
In-process research and development and require revision surgery and the number and actual costs to resolve the
remaining lawsuits. Accordingly, the ultimate cost to resolve this entire matter
2015 $ 25 $ — $ 25
globally may be materially different than the amount of the current estimate
2014 201 — 201 and accruals and could have a material adverse effect on our financial
Other position, results of operations and cash flows.
2015 13 $ 108 $ 57 $ 51
2014 12 111 51 60
Total
2015 13 $ 2,936 $ 1,142 $ 1,794
2014 13 $ 2,986 $ 968 $ 2,018
Changes in the Net Carrying Value of Goodwill by Segment
Neurotechnology and
Orthopaedics MedSurg Spine Total
2013 $ 2,227 $ 506 $ 1,111 $ 3,844
Additions and
adjustments 186 231 23 440
Foreign exchange (27) (11) (60) (98)
2014 $ 2,386 $ 726 $ 1,074 $ 4,186
Additions and
adjustments 20 46 — 66
Foreign exchange (62) 10 (64) (116)
2015 $ 2,344 $ 782 $ 1,010 $ 4,136

In 2010 we filed a lawsuit in federal court against Zimmer Biomet Holdings, Summary of Total Debt
Inc. (Zimmer), alleging that a Zimmer product infringed three of our patents. In
2013 following a jury trial favorable to us, the trial judge entered a final 2015 2014
judgment that, among other things, awarded us damages of $ 76 and ordered
Senior unsecured notes:
Zimmer to pay us enhanced damages. Zimmer appealed this ruling. In
December 2014 the Federal Circuit affirmed the damages awarded to us, Rate Due
reversed the order for enhanced damages and remanded the issue of attorney 3.000% 1/15/2015 $ — $ 500
fees to the trial court. The Federal Circuit denied our petition for a rehearing
en
banc
on the issue of enhanced damages but on October 19, 2015 the 2.000% 9/30/2016 750 750
United States Supreme Court agreed to hear our appeal on this issue. In May 1.300% 4/1/2018 599 598
2015 the trial court entered a stipulated final judgment that, among other
things, required Zimmer to pay us the base amount of damages and interest, 4.375% 1/15/2020 498 498
while the issues of enhanced damages and attorney fees continue to be 3.375% 5/15/2024 610 605
pursued. In 2015 we received payment of $ 54 , net of legal costs, which has
3.375% 11/1/2025 750 —
been recorded within selling, general and administrative expenses.
In April 2011 Hill-Rom Company, Inc. and affiliated entities (Hill-Rom) brought 4.100% 4/1/2043 395 395
a lawsuit against us alleging infringement under United States patent laws with 4.375% 5/15/2044 398 398
respect to nine patents related to electrical network communications for
Commercial paper — 200
hospital beds. On March 31, 2015 the court granted the parties’ joint motion
to dismiss with prejudice the claims and counterclaims associated with three of Other 22 29
these patents. The case has been stayed with respect to the remaining six Total debt $ 4,022 $ 3,973
patents, which currently are under reexamination by the United States Patent
Office. The ultimate resolution of this matter cannot be predicted and it is not Less current maturities 769 727
possible at this time for us to estimate any probable loss or range of probable Total long-term debt $ 3,253 $ 3,246
losses; however, the ultimate result could have a material adverse effect on
our financial position, results of operations and cash flows. Certain of our credit facilities require us to comply with financial and other
Purchase Commitments and Operating Leases covenants. We were in compliance with all covenants on December 31, 2015 .
We have purchase commitments for materials, supplies, services and We have lines of credit, issued by various financial institutions, available to
property, plant and equipment as part of the normal course of business. In fund our day-to-day operating needs. On December 31, 2015 we had $ 1,236
addition, we lease various manufacturing, warehousing and distribution of borrowing capacity available under all of our existing credit facilities.
facilities, administrative and sales offices as well as equipment under On December 31, 2015 the total unamortized debt issuance costs incurred in
operating leases. Rent expense totaled $ 101 , $103 , and $100 in 2015 , connection with our outstanding notes were $ 24 . The fair value of long-term
2014 and 2013 . debt (including current maturities and excluding the interest rate hedge) on
Future Commitments under Purchase Obligations and Leases December 31, 2015 and 2014 was $ 4,009 and $3,811 . Substantially all of
our long-term debt is classified within Level 1 of the fair value hierarchy
2016 2017 2018 2019 2020 Thereafter because the fair value of the debt is estimated based on rates with identical
terms and maturities, using quoted active market prices and yields, taking into
Purchase obligations $ 802 $ 125 $ 62 $ 55 $ 2 $ 67
account the underlying terms of the debt instruments.
Minimum lease payments $ 69 $ 51 $ 39 $ 28 $ 20 $ 56
NOTE 9 - DEBT AND CREDIT FACILITIES Interest expense, including required fees incurred on outstanding debt and
credit facilities, which is included in other expense totaled $108 , $113 , and
In October 2015 we sold $ 750 of senior unsecured notes due 2025 (2025 $83 in 2015 , 2014 and 2013 .
Notes). The 2025 Notes bear interest at 3.375% per year and, unless
previously redeemed, will mature on November 1, 2025. In 2015 we repaid $ NOTE 10 - CAPITAL STOCK
500 of our senior unsecured notes that were due on January 15, 2015. Our
Dividends Declared per Share of Common Stock
commercial paper program allows us to have a maximum of $1,250 in
commercial paper outstanding, with maturities up to 397 days from the date of 2015 Quarter
issuance. On December 31, 2015 there were no amounts outstanding under
our commercial paper program. Mar 31 Jun 30 Sep 30 Dec 31
$ 0.345 $ 0.345 $ 0.345 $ 0.380
Share Repurchases
In 2015 we repurchased 7.4 million shares at a cost of $ 700 under our
repurchase programs. The manner, timing and amount of purchases is
determined by management based on an evaluation of market conditions,
stock price and other factors and is subject to regulatory considerations.
Purchases are made from time-to-time in the open market, in privately
negotiated transactions or otherwise. On December 31, 2015 the total dollar
value of shares that could be purchased under our authorized repurchase
programs was $ 1,883 .
Other Capital Stock Information
Shares reserved for future compensation grants of our common stock were 15
million and 19 million at December 31, 2015 and 2014 . We have 0.5 million
authorized shares of $1 par value preferred stock, none of which is
outstanding.
Stock Options
We have long-term incentive plans from which we grant stock options to
certain key employees and non-employee directors at an exercise price not
less than the fair market value of the underlying

common stock, which is the closing quoted price of our common stock on the relative to pre-established goals during that three-year performance cycle.
day prior to the date of grant. The options are granted for periods of up to 10 The fair value of PSUs is determined based on the closing quoted price of our
years and become exercisable in varying installments. common stock on the day prior to the date of grant.
We measure the cost of employee stock options based on the grant-date fair Summary of 2015 RSU and PSU Activity
value and recognize that cost using the straight-line method over the period
during which a recipient is required to provide services in exchange for the Weighted
options, typically the vesting period. The weighted-average fair value per Average
Shares Grant date
share of options is estimated on the date of grant using the Black-Scholes (in millions) Fair value
option pricing model.
RSUs PSUs RSUs PSUs
Option Value and Assumptions
Nonvested on January 1 1.3 0.3 $ 65.04 $ 66.18
2015 2014 2013
Granted 0.6 0.1 88.47 92.96
Weighted-average fair value per
share $ 22.55 $ 15.80 $ 15.24 Vested (0.7) — 60.54 54.31
Assumptions: Canceled (0.1) (0.1) 74.35 54.03
Risk-free interest rate 1.8% 2.1% 1.3% Nonvested on December 31 1.1 0.3 $ 79.71 $ 79.02
Expected dividend yield 1.6% 1.8% 1.9% On December 31, 2015 there was $53 of unrecognized compensation cost
Expected stock price volatility 25.5% 20.2% 27.9%
related to nonvested RSUs. That cost is expected to be recognized as
expense over the weighted-average period of approximately 1.0 year . The
Expected option life 7.3 years 7.1 years 7.1 years weighted-average grant date fair value per share of RSUs granted was $88.47
and $76.61 in 2015 and 2014. The fair value of RSUs vested in 2015 was $43
The risk-free interest rate for periods within the expected life of options
. On December 31, 2015 there was $18 of unrecognized compensation cost
granted is based on the United States Treasury yield curve in effect at the time
related to nonvested PSUs; that cost is expected to be recognized as expense
of grant. Expected stock price volatility is based on the historical volatility of
over the weighted-average period of approximately 1.3 years.
our stock. The expected option life, representing the period of time that
options granted are expected to be outstanding, is based on historical option Employee Stock Purchase Plans (ESPP)
exercise and employee termination data. Full- and part-time employees may participate in our ESPP provided they
Summary of 2015 Stock Option Activity meet certain eligibility requirements. The purchase price for our common stock
under the terms of the ESPP is defined as 95% of the closing stock price on
Weighted- the last trading day of a purchase period. We issued 157,931 and 150,167
Average shares under the ESPP during 2015 and 2014 .
Weighted Remaining Aggregate
Shares (in Average Term Intrinsic NOTE 11 - RETIREMENT PLANS
millions) Exercise Price (in years) Value
Defined Contribution Plans
Outstanding January 1 15.2 $ 59.97 We provide certain employees with defined contribution plans. A portion of our
Granted 2.4 93.06 retirement plan expense under the defined contribution plans is funded with
Stryker common stock. The use of Stryker common stock represents a non-
Exercised (2.4) 53.31
cash operating activity that is not reflected in the consolidated statements of
Cancelled (0.3) 73.56 cash flows.
Outstanding
December 31 14.9 $ 65.85 5.7 $ 402.9
2015 2014 2013
Exercisable
December 31 8.3 $ 56.67 3.9 $ 302.2 Plan expense $ 148 $ 132 $ 132
Options expected to
Expense funded with Stryker common stock 20 18 16
vest 6.0 $ 77.02 7.9 $ 95.9
The aggregate intrinsic value, which represents the cumulative difference Stryker common stock held by plan
between the fair market value of the underlying common stock and the option Dollar amount 203 198 150
exercise prices, of options exercised was $ 98 , $113 , and $97 during 2015,
Shares (in millions of shares) 2.2 2.1 2.0
2014 and 2013 . Exercise prices for options outstanding ranged from $38.71
to $102.27 on December 31, 2015 . On December 31, 2015 there was $79 of Value as a percentage of total plan assets 11% 11% 9%
unrecognized compensation cost related to nonvested stock options granted Defined Benefit Plans
under the long-term incentive plans; that cost is expected to be recognized
over the weighted-average period of approximately 1.6 years . Certain of our subsidiaries have both funded and unfunded defined benefit
pension plans covering some or all of their employees. Substantially all of the
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) defined benefit pension plans have projected benefit obligations in excess of
We grant RSUs to key employees and non-employee directors and PSUs to plan assets.
certain key employees under our long-term incentive plans. The fair value of Discount Rate
RSUs is determined based on the number of shares granted and the closing The discount rates were selected using a hypothetical portfolio of high quality
quoted price of our common stock on the day prior to the date of grant, bonds on December 31 that would provide the necessary cash flows to match
adjusted for the fact that RSUs do not include anticipated dividends. RSUs our projected benefit payments.
generally vest in one-third increments over a three-year period and are settled
in stock. PSUs are earned over a three-year performance cycle and vest in Expected Return on Plan Assets
March of the year following the end of that performance cycle. The number of The expected return on plan assets is determined by applying the target
PSUs that will ultimately be earned is based on our performance allocation in each asset category of plan investments to the anticipated return
for each asset category based on historical and projected returns.

Components of Net Periodic Pension Cost Change in Benefit Obligations
2015 2014 2013 2015 2014
Beginning Projected benefit obligations $ 570 $ 456

Net periodic benefit cost:
Service cost 36 26
Service cost $ (36) $ (26) $ (30)
Interest cost 10 13
Interest cost (10) (13) (13)
Foreign exchange impact (43) (43)
Expected return on plan assets 11 10 10
Amortization of prior service cost and transition Employee contributions 6 6
amount 1 1 1
Actuarial (gains) losses (21) 134
Recognized actuarial loss (13) (7) (8)
Plan amendments — (5)
Net periodic benefit cost $ (47) $ (35) $ (40)
Acquisitions — 5
Changes in assets and benefit obligations recognized in OCI:
Benefits paid (29) (22)
Net actuarial gain (loss) $ 26 $ (88) $ 28
Ending Projected benefit obligations $ 529 $ 570
Recognized net actuarial loss 13 7 8
Ending Accumulated benefit obligations $ 505 $ 533
Prior service cost and transition amount (1) 4 (1)
Total recognized in OCI $ 38 $ (77) $ 35 Change in Plan Assets

Total recognized in net periodic benefit cost
and OCI $ (9) $ (112) $ (5) 2015 2014
Beginning Fair value of plan assets $ 310 $ 281
Assumptions Actual return 2 46

Weighted-average rates used to determine net periodic benefit cost: Employer contributions 16 18
Discount rate 2.0% 3.2% 2.9% Employee contributions 6 6
Expected return on plan assets 4.0% 3.7% 3.7% Foreign exchange impact (18) (24)
Rate of compensation increase 2.9% 2.9% 3.0% Acquisition — 3
Weighted-average discount rate used to
determine projected benefit obligations 2.1% 2.0% 3.2% Benefits paid (27) (20)
Investment Strategy Ending Fair value of plan assets $ 289 $ 310
The investment strategy for our defined benefit pension plans is to meet the Weighted-Average Target and Actual Allocation of Plan Assets by Asset
liabilities of the plans as they fall due and to maximize the return on invested Category
assets within appropriate risk tolerances.
2015 2014
2015 2014
Target Actual Actual
Funded status
Equity securities 29% 31% 30%
Fair value of plan assets $ 289 $ 310
Debt securities 50 48 48
Benefit obligations (529) (570)
$ (240) $ (260) Other 21 21 22
Funded status
Total 100% 100% 100%
Reported as:
Current liabilities—accrued compensation $ (1) $ (1) Valuation of Our Pension Plan Assets by Pricing Categories

Noncurrent liabilities—other liabilities (239) (259)
Level
Pre-tax amounts recognized in AOCI
2015 1 2 3 Total
Unrecognized net actuarial loss (155) (195) Cash and cash equivalents $ 6 $ — $ — $ 6
Unrecognized prior service cost 13 15 Equity securities 67 22 — 89
Total $ (142) $ (180) Corporate debt securities 135 — — 135

Other 19 9 31 59
The estimated net actuarial loss for the defined benefit pension plans to be
Total $ 227 $ 31 $ 31 $ 289
reclassified from AOCI into net periodic benefit cost is $7 in 2016. We
estimate that an immaterial amount of amortization of prior service cost and 2014
transition amount for the defined benefit pension plans will be reclassified from Cash and cash equivalents $ 6 $ — $ — $ 6
AOCI into net periodic benefit cost in 2016. Equity securities 99 26 — 125
Corporate debt securities 121 — — 121
Other 17 8 33 58
Total $ 243 $ 34 $ 33 $ 310
Our Level 3 pension plan assets (See Note 4 for an explanation of our fair
value hierarchy) consist primarily of guaranteed investment contracts with
insurance companies. The insurance contracts guarantee us principal
repayment and a fixed rate of return. Our valuation of Level 3 assets is based
on third-party actuarial valuations that are an estimation of the surrender value
of the guaranteed investment contract between us and the insurance
company. The surrender value equals the actuarial value of the notional
investments underlying the guaranteed investment contract, using the
actuarial assumptions as stated in the guaranteed investment contract.
Rollforward of Level 3 Pension Plan Assets Deferred Income Tax Assets and Liabilities
2015 2014 2015 2014
Balance on January 1 $ 33 $ 22 Deferred income tax assets:
Actual return on plan assets held at the reporting date (2) 11 Inventories $ 513 $ 585
Balance on December 31 $ 31 $ 33 Product related liabilities 116 167
Estimated Future Benefit Payments Other accrued expenses 206 226
Depreciation and amortization 4 44

2016 2017 2018 2019 2020 2021-2025
State income taxes 43 68
$ 14 $ 14 $ 13 $ 14 $ 13 $ 77
We expect to contribute $18 to our defined benefit pension plans in 2016.
Net operating loss carryforwards 47 123
NOTE 12 - INCOME TAXES
Our effective tax rate was 17.1% , 55.6% and 17.0% for 2015, 2014 and 2013. Other 143 143
The effective income tax rate for 2014 includes the tax impacts of the Total deferred income tax assets $ 1,151 $ 1,446
establishment of a European regional headquarters and the cash repatriation
Less valuation allowances (47) (42)
which was executed in 2015. In 2015 we retroactively adopted ASU 2015-17
Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes Total deferred income tax assets, net $ 1,104 $ 1,404
that amends the balance sheet classification of deferred taxes. Deferred income tax liabilities:
Earnings Before Income Taxes
Depreciation and amortization $ (586) $ (666)
2015 2014 2013 Undistributed earnings (50) (132)
United States $ 475 $ 355 $ 193 Other (26) (54)
International 1,260 805 1,019 Total deferred income tax liabilities $ (662) $ (852)
Total $ 1,735 $ 1,160 $ 1,212 Net deferred income tax assets $ 442 $ 552
Components of Income Tax Expense Reported as:
Noncurrent assets—Other $ 477 $ 594

2015 2014 2013
Noncurrent liabilities—Other liabilities (35) (42)
Current income tax expense
Total $ 442 $ 552
United States federal $ 78 $ 213 $ 79
Accrued interest and penalties were $ 30 and $ 26 , which was reported in
United States state and local 23 26 29 accrued expenses and other liabilities, both current and noncurrent, on
International 108 346 75 December 31, 2015 and 2014.
Total current income tax expense $ 209 $ 585 $ 183 Net operating loss carryforwards totaling $152 on December 31, 2015 are
available to reduce future taxable earnings of certain domestic and foreign
Deferred income tax expense (benefit) subsidiaries. United States loss carryforwards of $81 expire through 2028.
United States federal $ 2 $ 9 $ (52) International loss carryforwards of $71 began to expire in 2015; however,
some have no expiration. Of these carryforwards, $43 are subject to a full
United States state and local 8 (16) (4)
valuation allowance. We also have a tax credit carryforward of $36 with a full
International 77 67 79 valuation allowance. These credits have no expiration; however, we do not
Total deferred income tax expense (benefit) $ 87 $ 60 $ 23
anticipate generating income tax in excess of the credits in the foreseeable
future.
Total income tax expense $ 296 $ 645 $ 206
No provision has been made for United States federal and state income taxes
Interest and penalties included in other income (expense), net were ($ 4 ), $ 8 or international income taxes that may result from future remittances of the
and $ 12 in 2015, 2014 and 2013. undistributed earnings of foreign subsidiaries that are determined to be
In 2013 we recorded income tax benefits related to favorable audit resolutions indefinitely reinvested ( $7,166 on December 31, 2015 ). Determination of the
in multiple jurisdictions. The United States federal deferred income tax amount of any unrecognized deferred income tax liability on these is not
expense (benefit) includes the utilization of net operating loss carryforwards of practicable.
$ 79 , $ 78 and $ 16 in 2015 , 2014 and 2013 . Changes in the Amounts Recorded for Uncertain Income Tax Positions
Reconciliation of the United States Federal Statutory Income Tax Rate to
our Effective Income Tax Rate 2015 2014
Balance at beginning of year $ 315 $ 204

2015 2014 2013
Increases related to current year income tax positions 21 133
United States federal statutory rate 35.0 % 35.0% 35.0 %
Increases related to prior year income tax positions 3 23
Add (deduct):
Decreases related to prior year income tax positions:
United States state and local income taxes,
less federal deduction 2.1 2.2 1.4 Settlements and resolutions of income tax audits (9) (33)
Foreign income tax at rates other than 35% (17.6) 4.9 (13.7) Statute of limitations expirations (6) (1)
Tax related to repatriation of foreign
earnings (3.9) 10.1 — Foreign currency translation (11) (6)
Other — (5)
Other 1.5 3.4 (5.7)
Balance at end of year $ 313 $ 315
17.1 % 55.6% 17.0 %
Reported as:
Current liabilities—Income taxes $ 9 $ 3
Noncurrent liabilities—Other liabilities 304 312
Total $ 313 $ 315
Our income tax expense could have been reduced by $304 and $307 on Results by Reportable Segments
December 31, 2015 and 2014, had these uncertain income tax positions been
favorably resolved. It is reasonably possible that the amount of unrecognized 2015 2014 2013
tax benefits will significantly change due to one or more of the following events Orthopaedics $ 4,223 $ 4,153 $ 3,949
in the next twelve months: expiring statutes, audit activity, tax payments, MedSurg 3,895 3,781 3,414
competent authority proceedings related to transfer pricing or final decisions in Neurotechnology & Spine 1,828 1,741 1,658
matters that are the subject of controversy in various taxing jurisdictions in
Net sales $ 9,946 $ 9,675 $ 9,021
which we operate, including inventory transfer pricing and cost sharing,
product royalty and foreign branch arrangements. We are not able to
reasonably estimate the amount or the future periods in which changes in Orthopaedics $ 290 $ 319 $ 273
unrecognized tax benefits may be resolved; however, we anticipate certain MedSurg 117 113 84
unrecognized tax benefits related to some examinations to be resolved within Neurotechnology & Spine 132 134 135
the next twelve months. As a result, it is reasonably possible that the gross
Segment depreciation and amortization $ 539 $ 566 $ 492
unrecognized tax benefits could decrease by amounts up to $ 55 because of
Corporate and Other 51 20 19
these potential resolved examinations. Interest and penalties incurred
associated with uncertain tax positions are included in other income Total depreciation and amortization $ 590 $ 586 $ 511
(expense), net.
In the normal course of business, income tax authorities in various income tax Orthopaedics $ 1,487 $ 1,410 $ 1,353
jurisdictions both within the United States and internationally conduct routine MedSurg 822 850 802
audits of our income tax returns filed in prior years. These audits are Neurotechnology & Spine 474 476 430
generally designed to determine if individual income tax authorities are in
Segment operating income $ 2,783 $ 2,736 $ 2,585
agreement with our interpretations of complex income tax regulations
regarding the allocation of income to the various income tax jurisdictions. Items not allocated to segments:
Income tax years are open from 2010 through the current year for the United Corporate and Other $ (302) $ (322) $ (314)
States federal jurisdiction; income tax years open for our other major Acquisition & integration-related charges (35) (102) (98)
jurisdictions range from 2005 through the current year. Amortization of intangible assets (210) (188) (138)
NOTE 13 - SEGMENT AND GEOGRAPHIC DATA Restructuring related charges (132) (117) (63)
We segregate our operations into three reportable business segments: Rejuvenate and related charges (296) (761) (622)
Orthopaedics, MedSurg, and Neurotechnology and Spine. The Orthopaedics Regulatory and legal matters 53 — (69)
segment includes reconstructive (hip and knee) and trauma implant systems Donation — — (25)
and other related products. The MedSurg segment includes surgical Consolidated operating income $ 1,861 $ 1,246 $ 1,256
equipment and surgical navigation systems; endoscopic and communications
systems; patient handling and emergency medical equipment; and Total Assets and Capital Spending by Reportable Segments
reprocessed and remanufactured medical devices and other related products.
The Neurotechnology and Spine segment includes neurovascular products, 2015 2014 2013
spinal implant systems and other related products. Orthopaedics $ 6,149 $ 8,357 $ 7,756
The Corporate and Other category shown in the table below includes MedSurg 5,341 5,557 4,533
corporate and global manufacturing operations and administration, central Neurotechnology & Spine 3,904 3,684 3,017
research and development initiatives, interest expense, interest and Total segment assets $ 15,394 $ 17,598 $ 15,306
marketable securities income and share-based compensation, which includes
Corporate and Other 853 (319) 93
compensation related to both employee and director stock option, restricted
stock unit and performance stock unit grants. Certain prior year amounts have Total assets $ 16,247 $ 17,279 $ 15,399
been reclassified to conform with the current year presentation of our Orthopaedics $ 95 $ 80 $ 89
segments. MedSurg 89 77 59
Neurotechnology & Spine 28 20 16
Total segment capital spending $ 212 $ 177 $ 164
Corporate and Other 58 56 31
Capital spending $ 270 $ 233 $ 195
Our reportable segments are business units that offer different products and
services and are managed separately because each business requires
different manufacturing, technology and marketing strategies. The accounting
policies of the segments are the same as those described in the summary of
significant accounting policies in Note 1 to the Consolidated Financial
Statements.
We measure the financial results of our reportable segments using an internal
performance measure that excludes acquisition and integration-related
charges, restructuring related charges, reserves for certain product recall
matters, reserves for certain legal and regulatory matters, a donation to an
educational institution, other income (expense), net and income taxes.
Identifiable assets are those assets used exclusively in the operations of each
business segment or allocated when used jointly. Corporate assets are
principally cash and cash equivalents, marketable securities and property,
plant and equipment.
The countries in which we have local revenue generating operations have
been combined into the following geographic areas: the United States
(including Puerto Rico); Europe, Middle East, Africa (EMEA); Asia Pacific; and
other foreign countries, which include Canada and countries in the Latin
American region. Net sales are attributable to a geographic area based upon
the customer’s country of domicile.

Net Property, Plant and Equipment Based on Geographic Physical

Location
Net Property, Plant &
Net Sales Equipment
2015 2014 2013 2015 2014
United States $ 7,116 $ 6,558 $ 5,984 $ 626 $ 539

Europe, Middle
East, Africa 1,267 1,371 1,316 432 417
Asia Pacific 1,251 1,368 1,319 116 119

Other foreign
countries 312 378 402 25 23
Total $ 9,946 $ 9,675 $ 9,021 $ 1,199 $ 1,098
NOTE 14 - SUMMARY OF QUARTERLY DATA (UNAUDITED)
2015 Quarter
Mar 31 Jun 30 Sep 30 Dec 31
Net sales $ 2,379 $ 2,432 $ 2,420 $ 2,715
Gross profit 1,553 1,605 1,624 1,820
Earnings before income taxes 377 401 345 612

Net earnings 224 392 301 522
Net earnings per share of common
stock:
Basic $ 0.59 $ 1.04 $ 0.80 $ 1.39
Diluted $ 0.58 $ 1.03 $ 0.79 $ 1.38
High $ 96.18 $ 97.94 $ 105.34 $ 100.51
Low $ 89.81 $ 90.19 $ 91.73 $ 90.30

Dividends declared per share of
common stock $ 0.345 $ 0.345 $ 0.345 $ 0.380
2014 Quarter
Mar 31 Jun 30 Sep 30 Dec 31
Net sales $ 2,305 $ 2,363 $ 2,389 $ 2,618
Gross profit 1,529 1,548 1,560 1,718
Earnings before income taxes 107 167 425 461
Net earnings 70 128 57 260

Net earnings per share of common
stock:
Basic $ 0.19 $ 0.34 $ 0.16 $ 0.68
Diluted $ 0.18 $ 0.33 $ 0.16 $ 0.67
High $ 83.86 $ 86.93 $ 85.91 $ 98.24
Low $ 74.02 $ 75.78 $ 78.91 $ 77.87

Dividends declared per share of
common stock $ 0.305 $ 0.305 $ 0.305 $ 0.345
The price quotations reported above were supplied by the New York Stock
Exchange.

maintaining effective internal control over financial reporting, and for its
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH assessment of the effectiveness of internal control over financial reporting
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL included in the accompanying Management's Report on Internal Control Over
DISCLOSURE. Financial Reporting. Our responsibility is to express an opinion on the
Company's internal control over financial reporting based on our audit.
Not applicable.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
ITEM 9A. CONTROLS AND PROCEDURES.
require that we plan and perform the audit to obtain reasonable assurance
Evaluation of Disclosure Controls and Procedures— An evaluation of the about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an
effectiveness of the Company’s disclosure controls and procedures on
understanding of internal control over financial reporting, assessing the risk
December 31, 2015 was carried out under the supervision and with the
participation of the Company’s management, including the Chairman and that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and
Chief Executive Officer and the Vice President and Chief Financial Officer (the
performing such other procedures as we considered necessary in the
Certifying Officers). Based on that evaluation, the Certifying Officers
concluded that the Company’s disclosure controls and procedures are circumstances. We believe that our audit provides a reasonable basis for our
opinion.
effective.
Changes in Internal Control Over Financial Reporting— There was no A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
change to our internal control over financial reporting during 2015 that
materially affected, or is reasonably likely to materially affect, our internal and the preparation of financial statements for external purposes in
control over financial reporting. accordance with generally accepted accounting principles. A company's
internal control over financial reporting includes those policies and procedures
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL that (1) pertain to the maintenance of records that, in reasonable detail,
REPORTING accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded
The management of Stryker Corporation and subsidiaries' is responsible for
as necessary to permit preparation of financial statements in accordance with
establishing and maintaining adequate internal control over financial reporting,
generally accepted accounting principles, and that receipts and expenditures
as such term is defined in Exchange Act Rule 13a-15(f). Stryker Corporation of the company are being made only in accordance with authorizations of
and subsidiaries' internal control system was designed to provide reasonable
management and directors of the company; and (3) provide reasonable
assurance to the Company's management and Board of Directors regarding
assurance regarding prevention or timely detection of unauthorized
the preparation and fair presentation of published financial statements. acquisition, use or disposition of the company's assets that could have a
Stryker Corporation’s management assessed the effectiveness of our internal material effect on the financial statements.
control over financial reporting on December 31, 2015 . In making this Because of its inherent limitations, internal control over financial reporting may
assessment, we used the criteria set forth by the Committee of Sponsoring
not prevent or detect misstatements. Also, projections of any evaluation of
Organizations of the Treadway Commission in Internal
Control-Integrated effectiveness to future periods are subject to the risk that controls may
Framework
(2013)
. Based on that assessment, management concluded that become inadequate because of changes in conditions, or that the degree of
our internal control over financial reporting is effective.
compliance with the policies or procedures may deteriorate.
The internal controls over financial reporting of an acquired business are
As indicated in the accompanying Management’s Report on Internal Control
eligible for a one year exclusion as permitted by Securities and Exchange
Over Financial Reporting, management’s assessment of and conclusion on
Commission Staff interpretive guidance. Accordingly, management's the effectiveness of internal control over financial reporting did not include the
assessment of and conclusion on the effectiveness of internal control over
internal controls of CHG and other acquisitions which are included in the
financial reporting did not include the internal controls of CHG and other 2015
December 31, 2015 consolidated financial statements of Stryker Corporation
acquisitions which are included in the December 31, 2015 consolidated and subsidiaries and constituted 0.2% and 0.3% of total assets and
financial statements of Stryker Corporation and subsidiaries. Assets and
shareholders' equity, respectively, as of December 31, 2015 and 0.3% and
shareholders' equity excluded from management's assessment constitute
(0.1%) of revenues and net earnings, respectively, for the year then ended.
0.2% and 0.3% of total assets and shareholders' equity, respectively, on Our audit of internal control over financial reporting of Stryker Corporation and
December 31, 2015 and 0.3% and (0.1%) of revenues and net earnings,
subsidiaries also did not include an evaluation of the internal control over
respectively.
financial reporting of CHG and other acquisitions.
Stryker Corporation’s independent registered public accounting firm, Ernst &
In our opinion, Stryker Corporation and subsidiaries maintained, in all material
Young LLP, has issued an attestation report on the effectiveness of our
respects, effective internal control over financial reporting as of December 31,
internal control over financial reporting. 2015 , based on the COSO criteria.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We also have audited, in accordance with the standards of the Public
ON INTERNAL CONTROL OVER FINANCIAL REPORTING Company Accounting Oversight Board (United States), the consolidated
The
Board
of
Directors
and
Shareholders
of
Stryker
Corporation
: balance sheets of Stryker Corporation and subsidiaries on December 31, 2015
and 2014 and the related consolidated statements of earnings and
We have audited Stryker Corporation and subsidiaries' internal control over
comprehensive income, shareholders' equity and cash flows for each of the
financial reporting as of December 31, 2015 , based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring three years in
Organizations of the Treadway Commission (2013 framework) (the COSO
criteria). Stryker Corporation and subsidiaries' management is responsible for
34
the period ended December 31, 2015 of Stryker Corporation and subsidiaries,
and our report dated February 11, 2016 expressed an unqualified opinion Consolidated Financial Statements in Item 8 of this report. On December 31,
thereon. 2015 we also had a stock performance incentive award program pursuant to
which shares of our common stock have been and may be issued to certain
employees with respect to performance. The status of these plans on
/s/ ERNST & YOUNG LLP December 31, 2015 is as follows:
Equity compensation
Grand Rapids, Michigan plans approved by
February 11, 2016 Plan Category shareholders
Number of shares of common stock to be issued upon
ITEM 9B. OTHER INFORMATION. exercise of outstanding options 16.3
Weighted-average exercise price of
Not applicable. outstanding options $ 60.26
Number of shares of common stock remaining
available for future issuance under equity
PART III compensation plans (excluding
shares reflected in the first row) 19.0
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
Information regarding regarding our executive officers appears under the TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
caption "Executive Officers of the Registrant on January 31, 2016" in Part I,
The information under the caption "Information About the Board of Directors
Item 1 of this report.
and Corporate Governance Matters—Independent Directors" and "Information
Information regarding our directors and certain corporate governance and About the Board of Directors and Corporate Governance Matters—Certain
other matters appearing under the captions "Information About the Board of Relationships and Related Party Transactions" in the 2016 proxy statement is
Directors and Corporate Governance Matters," "Proposal 1—Election of incorporated herein by reference.
Directors," and "Additional Information—Section 16(a) Beneficial Ownership
Reporting Compliance" in the 2016 proxy statement is incorporated herein by ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
reference.
The Corporate Governance Guidelines adopted by our Board of Directors, as The information under the caption "Proposal 2—Ratification of Appointment of
well as the charters of each of the Audit Committee, the Governance and Our Independent Registered Public Accounting Firm" in the 2016 proxy
Nominating Committee and the Compensation Committee and the Code of statement is incorporated herein by reference.
Ethics applicable to the principal executive officer, principal financial officer
and principal accounting officer or controller or persons performing similar
functions are available, free of charge, under the "Investors—Corporate
Governance" section of our website at www.stryker.com
. Print copies of such
documents are available, free of charge, upon written request sent to the
Corporate Secretary of Stryker Corporation at 2825 Airview Boulevard,
Kalamazoo, Michigan 49002.
ITEM 11. EXECUTIVE COMPENSATION.

Information regarding the compensation of our management appearing under
the captions "Compensation Discussion and Analysis," "Compensation
Committee Report," "Executive Compensation" and "Compensation of
Directors" in the 2016 proxy statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
The information under the caption "Stock Ownership" in the 2016 proxy
statement is incorporated herein by reference.
On December 31, 2015 we had an equity compensation plan under which

options are granted at a price not less than fair market value at the date of
grant and under which awards of restricted stock units (RSUs) and
performance stock units have been made. Options and RSUs had also been
awarded under a previous plan. These equity compensation plans were
previously submitted to and approved by our shareholders. Additional
information regarding our equity compensation plans appears in Note 1 and
Note 10 to the
35
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) 1. Financial Statements

The following Consolidated Financial Statements are set forth in Part II, Item 8 of this report.
Report of Independent Registered Public Accounting Firm on Financial Statements 17
Consolidated Statements of Earnings for 2015, 2014 and 2013 18
Consolidated Statements of Comprehensive Income for 2015, 2014 and 2013 18
Consolidated Balance Sheets on 2015 and 2014 19
Consolidated Statements of Shareholders’ Equity for 2015, 2014 and 2013 20
Consolidated Statements of Cash Flows for 2015, 2014 and 2013 21
Notes to Consolidated Financial Statements 22
(a) 2. Financial Statement Schedules
The consolidated financial statement schedule of Stryker Corporation and its subsidiaries is:
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Additions Deductions
Effect of
Uncollectible Changes in
Balance at Charged to Amounts Written Foreign Balance
Beginning Costs & Off, Net of Currency at End
Description of Period Expenses Recoveries Exchange Rates of Period
DEDUCTED FROM ASSET ACCOUNTS
Allowance for Doubtful Accounts:
Year ended December 31, 2015 $ 59 $ 21 $ 15 $ 4 $ 61
Year ended December 31, 2014 $ 72 $ (4) $ 8 $ 1 $ 59
Year ended December 31, 2013 $ 58 $ 21 $ 11 $ (4) $ 72
All other schedules for which provision is made in the applicable accounting regulation of the U.S. Securities and Exchange Commission are not
required under the related instructions or are inapplicable and, therefore, have been omitted.
(a) 3. Exhibits
A list of exhibits required to be filed as part of this report is set forth in the Exhibit Index, which immediately precedes such exhibits, and is
incorporated herein by reference. These exhibits are available upon request to the Vice President, Corporate Secretary at 2825 Airview Boulevard,
Kalamazoo, Michigan 49002.
(c) Financial Statement Schedules
The response to this portion of Item 15 is submitted as a separate section of this Report. See Item 15(a)(2) above.

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: February 11, 2016
STRYKER CORPORATION
/s/ WILLIAM R. JELLISON

William R. Jellison, Vice President, Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on the date indicated above on
behalf of the registrant and in the capacities indicated.
/s/ KEVIN A. LOBO /s/ WILLIAM R. JELLISON

Kevin A. Lobo, Chairman and Chief Executive Officer William R. Jellison, Vice President, Chief Financial Officer
(Principal Executive Officer) (Principal Financial Officer)
/s/ WILLIAM E. BERRY JR.

William E. Berry, Jr., Vice President, Corporate Controller
(Principal Accounting Officer)
/s/ HOWARD E. COX JR. /s/ ALLAN C. GOLSTON

Howard E. Cox, Jr.—Director Allan C. Golston—Director
/s/ SRIKANT M. DATAR /s/ WILLIAM U. PARFET

Srikant M. Datar, Ph.D.—Director William U. Parfet—Director
/s/ ROCH DOLIVEUX /s/ ANDREW K. SILVERNAIL

Roch Doliveux—Director Andrew K. Silvernail —Director
/s/ LOUISE L. FRANCESCONI /s/ RONDA E. STRYKER

Louise L. Francesconi—Director Ronda E. Stryker—Director
37
FORM 10-K—ITEM 15(a) 3. and ITEM 15(c)

STRYKER CORPORATION AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit 2— Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession

(i) Agreement and Plan of Merger, dated September 25, 2013, by and among Stryker Corporation, Lauderdale Merger Corporation and MAKO Surgical
Corp. — Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed with the SEC on September 27, 2013 (Commission File No.
000-09165).
(ii) † © Agreement, dated as of January 31, 2016, by and among Star Acquisition Sub Inc., Stryker Corporation, Sage Products Holdings II, LLC, Madison
Dearborn Capital Partners VI-C, L.P., MDCP VI-C Sage Holdings, Inc., TG SP Holdings Corp., Madison Dearborn Partners VI-B, L.P., and MDP Sage
Holdings, LLC.
Exhibit 3— Articles of Incorporation and By-Laws

(i) Restated Articles of Incorporation — Incorporated by reference to Exhibit 3.1 to our Form 10-K for the year ended December 31, 2012 (Commission File
No. 00-09165).
(ii) By-Laws — Incorporated by reference to Exhibit 3(ii) to our Form 8-K dated October 28, 2008 (Commission File No. 000-09165).
Exhibit 4— Instruments defining the rights of security holders, including indentures—We agree to furnish to the Commission upon request a copy of each instrument
pursuant to which long-term debt of Stryker Corporation and its subsidiaries not exceeding 10% of the total assets of Stryker Corporation and its
consolidated subsidiaries is authorized.
(i) Amended and Restated Credit Agreement, dated on August 29, 2014, among Stryker Corporation and certain subsidiaries, as designated borrowers; the
lenders party thereto; and JPMorgan Chase Bank, N.A., as administrative agent.—Incorporated by reference to Exhibit 4.1 to our Form 8-K dated
September 3, 2014 (Commission File no. 000-09165).
(ii) Indenture, dated January 15, 2010, between Stryker Corporation and U.S. Bank National Association.—Incorporated by reference to Exhibit 4.1 to our
Form 8-K dated January 15, 2010 (Commission File No. 000-09165).
(iii) Second Supplemental Indenture (including the form of 2020 note), dated January 15, 2010, between Stryker Corporation and U.S. Bank National
Association.—Incorporated by reference to Exhibit 4.3 to our Form 8-K dated January 15, 2010 (Commission File No. 000-09165).
(iv) Third Supplemental Indenture (including the form of 2016 note), dated September 16, 2011, between Stryker Corporation and U.S. Bank National
Association.—Incorporated by reference to Exhibit 4.2 to our Form 8-K dated September 16, 2011 (Commission File No. 000-09165).
(v) Fourth Supplemental Indenture (including the form of 2018 note) dated March 25, 2013, between Stryker Corporation and U.S. Bank National
Association.—Incorporated by reference to Exhibit 4.2 to our Form 8-K dated March 25, 2013 (Commission File No. 000-09165).
(vi) Fifth Supplemental Indenture (including the form of 2043 note) dated March 25, 2013, between Stryker Corporation and U.S. Bank National Association.
—Incorporated by reference to Exhibit 4.3 to our Form 8-K dated March 25, 2013 (Commission File No. 000-09165).
(vii) Sixth Supplemental Indenture (including the form of 2024 note), dated May 1, 2014, between Stryker Corporation and U.S. Bank National Association.—
Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K dated May 1, 2014 (Commission File No. 000-09165).
(viii) Seventh Supplemental Indenture (including the form of 2044 note), dated May 1, 2014, between Stryker Corporation and U.S. Bank National Association.
—Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K dated May 1, 2014 (Commission File No. 000-09165).
(ix) Eighth Supplemental Indenture (including the form of 2025 note), dated October 29, 2015, between Stryker Corporation and U.S. Bank National
association.—Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K dated October 26, 2015 (Commission File No. 000-09165).
Exhibit 10— Material contracts

(i)* 2011 Long-Term Incentive Plan (as amended effective July 26, 2011)—Incorporated by reference to Exhibit 4(i) to Amendment No. 1 to our Registration
Statement on Form S-8, File No. 333-179142 (Commission File No. 000-09165).
(ii)* 2006 Long-Term Incentive Plan (as amended effective February 8, 2011)—Incorporated by reference to Exhibit 10(i) to our Form 10-K for the year ended
December 31, 2010 (Commission File No. 000-09165).
(iii)* † Form of grant notice and terms and conditions for stock options granted in 2016 under the 2011 Long-Term Incentive Plan.
(iv)* † Form of grant notice and terms and conditions for restricted stock units granted in 2016 under the 2011 Long-Term Incentive Plan.
(v)* † Form of grant notice and terms and conditions for performance stock units granted in 2016 under the 2011 Long-
Term Incentive Plan.
(vi)* † Form of grant notice and terms and conditions for stock options and restricted stock units granted in 2016 under the 2011 Long-Term Incentive Plan to
non-employee directors.
(vii)* Form of grant notice and terms and conditions for stock options granted in 2015 under the 2011 Long-Term Incentive Plan—Incorporated by reference to
Exhibit 10(iii) to our Form 10-K for the year ended December 31, 2014 (Commission File No. 000-09165).
(viii)* Form of grant notice and terms and conditions for restricted stock units granted in 2015 under the 2011 Long-Term Incentive Plan—Incorporated by
reference to Exhibit 10(iv) to our Form 10-K for the year ended December 31, 2014 (Commission File No. 000-09165).
(ix)* Form of grant notice and terms and conditions for performance stock units granted in 2015 under the 2011 Long-
Term Incentive Plan—Incorporated by reference to Exhibit 10(v) to our Form 10-K for the year ended December 31, 2014 (Commission File No. 000-
09165).
(x)* Form of grant notice and terms and conditions for stock options and restricted stock units granted in 2015 under the 2011 Long-Term Incentive Plan to
non-employee directors—Incorporated by reference to Exhibit 10(vi) to our Form 10-K for the year ended December 31, 2014 (Commission File No. 000-
09165).
(xi)* Form of grant notice and terms and conditions for stock options granted in 2014 under the 2011 Long-Term Incentive Plan—Incorporated by reference to
(xii)* Form of grant notice and terms and conditions for restricted stock units granted in 2014 under the 2011 Long-Term Incentive Plan—Incorporated by
reference to Exhibit 10(iv) to our Form 10-K for the year ended December 31, 2013. (Commission File No. 000-09165).
38
(xiii)* Form of grant notice and terms and conditions for performance stock units granted in 2014 under the 2011 Long-
Term Incentive Plan—Incorporated by reference to Exhibit 10(v) to our Form 10-K for the year ended December 31, 2013 (Commission File No. 000-
09165).
(xiv)* Form of grant notice and terms and conditions for stock options and restricted stock units granted in 2014 under the 2011 Long-Term Incentive Plan to
non-employee directors.—Incorporated by reference to Exhibit 10.vi to our Form 10-K for the year ended December 31, 2013 (Commission File No. 000-
09165).
(xv)* Form of grant notice and terms and conditions for stock options granted in 2013 under the 2006 Long-Term Incentive Plan—Incorporated by reference to
(xvi)* Form of grant notice and terms and conditions for restricted stock units granted in 2013 under the 2006 Long-Term Incentive Plan—Incorporated by
reference to Exhibit 10(iv) to our Form 10-K for the year ended December 31, 2012 (Commission File No. 000-09165).
(xvii)* Form of grant notice and terms and conditions for performance stock units granted in 2013 under the 2011 Long-Term Incentive Plan—Incorporated by
reference to Exhibit 10(v) to our Form 10-K for the year ended December 31, 2012 (Commission File No. 000-09165).
(xviii)* Supplemental Savings and Retirement Plan (as amended effective January 1, 1995)—Incorporated by reference to Exhibit 10(iii) to our Form 10-K for the
year ended December 31, 1994 (Commission File No.000-09165).
(xix) Stryker Corporation Executive Bonus Plan—Incorporated by reference to Exhibit 10.1 to our Form 8-K dated February 21, 2007 (Commission File No.
000-09165).
(xx) Form of Indemnification Agreement for Directors—Incorporated by reference to Exhibit 10 (xiv) to our Form 10-K for the year ended December 31, 2008
(Commission File No. 000-09165).
(xxi) Form of Indemnification Agreement for Certain Officers—Incorporated by reference to Exhibit 10 (xv) to our Form 10-K for the year ended December 31,
2008 (Commission File No. 000-09165).
(xxii) Settlement Agreement between Howmedica Osteonics Corp. and the counsel listed on the signature pages thereto, dated as of November 3, 2014
(Rejuvenate and ABF II Hip Implant Products Liability Litigation)— Incorporated by reference to Exhibit 10xxiii to our Form 10-K for the year ended
(xxiii) Letter Agreement between Stryker Corporation and William Jellison — Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed
with the SEC on April 11, 2013 (Commission File No. 000-09165).
(xxiv) Separation Agreement and Release between Ramesh Subrahmanian and Stryker Corporation, dated as of September 16, 2015—Incorporated by
reference to Exhibit 10.1 to our Form 8-K dated September 16, 2015 (Commission File No. 000-09165).
Exhibit 11— Statement re: computation of per share earnings

(i) Consolidated Statement of Earnings in Item 8 of this report.
Exhibit 21— Subsidiaries of the registrant

(i) † List of Subsidiaries.
Exhibit 23— Consent of experts and counsel

(i) † Consent of Independent Registered Public Accounting Firm.
Exhibit 31— Rule 13a-14(a) Certifications
(i) † Certification by Principal Executive Officer of Stryker Corporation.
(ii) † Certification by Principal Financial Officer of Stryker Corporation.
Exhibit 32— 18 U.S.C. Section 1350 Certifications

(i) † Certification by Principal Executive Officer of Stryker Corporation.
(ii) † Certification by Principal Financial Officer of Stryker Corporation.
Exhibit 99— Additional exhibits

(i)* 2008 Employee Stock Purchase Plan as amended on February 10, 2009—Incorporated by reference to Exhibit 99 (i) to our Form 10-K for the year ended
Exhibit 101— XBRL (Extensible Business Reporting Language) Documents

101.INS XBRL Instance Document
101.SCH XBRL Schema Document
101.CAL XBRL Calculation Linkbase Document
101.DEF XBRL Definition Linkbase Document
101.LAB XBRL Label Linkbase Document
101.PRE XBRL Presentation Linkbase Document
* Compensation arrangement
† Furnished with this Form 10-K
© Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Stryker hereby undertakes to furnish supplementally copies of any of the omitted schedules
upon request by the U.S. Securities and Exchange Commission.
39
Exhibit 2ii
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
dated as of January 31, 2016
by and among
STAR ACQUISITION SUB INC.
SAGE PRODUCTS HOLDINGS II, LLC
MADISON DEARBORN CAPITAL PARTNERS VI-C, L.P.
MDCP VI-C SAGE HOLDINGS, INC.
THOMAS GLANZMANN
TG SP HOLDINGS CORP.
MADISON DEARBORN PARTNERS VI-B, L.P.
MDP SAGE HOLDINGS, LLC
SAGE PRODUCTS HOLDINGS, LLC
SAGE PRODUCTS HOLDINGS, LLC, solely in its capacity as the Seller Representative
and
STRYKER CORPORATION, solely for purposes of Section 12.19

Table of Contents
Page
Article I Purchase and Sale of Securities2

Section 1.1 Purchase and Sale of Securities 2
Section 1.2 Closing 3
Section 1.3 The Closing Transactions 3
Section 1.4 Closing Deliveries and Payments 3
Section 1.5 Withholding Rights 5
Section 1.6 Escrow Fund 5
Article II Purchase Price; Post-Closing Adjustment6

Section 2.1 Purchase Price 6
Section 2.2 Final Closing Balance Sheet Calculation 9
Section 2.3 Post-Closing Adjustment Payment 10
Article III Representations and Warranties of the Company11

Section 3.1 Organization, Standing and Organizational Power 11
Section 3.2 Authority; Noncontravention 12
Section 3.3 Governmental Approvals 12
Section 3.4 Subsidiaries 13
Section 3.5 Capitalization 13
Section 3.6 Financial Statements; Undisclosed Liabilities 15
Section 3.7 Absence of Certain Changes 16
Section 3.8 Legal Proceedings 18
Section 3.9 Compliance With Laws; Permits 18
Section 3.10 Tax Matters 20
Section 3.11 Employee Benefits Matters 23
Section 3.12 Environmental Matters 25
Section 3.13 Intellectual Property 26
Section 3.14 Property 31
Section 3.15 Material Contracts 32
Section 3.16 Brokers and Other Advisors 34
Section 3.17 Employees 34
Section 3.18 Insurance 36
Section 3.19 Regulatory Matters 36
Section 3.20 Affiliate Transactions 39
Section 3.21 Products Liability 40
Section 3.22 Customers and Suppliers 40
Section 3.23 No Other Representations or Warranties 40
Article IV Representations and Warranties of TG Blocker40

Section 4.3 Subsidiaries 41
Section 4.4 Capitalization 41
Table of Contents (cont'd)
Page
Section 4.5 Conduct of Business 42

Section 4.6 Tax Matters 42
Section 4.8 Litigation 44
Article V Representations and Warranties of the Sellers45

Section 5.3 Ownership of Purchased Securities 46
Section 5.6 Litigation 46
Section 5.7 Restructuring 47
Section 5.8 Call Option Agreement 47
Article VI Representations and Warranties of Purchaser47

Section 6.1 Organization, Standing and Organizational Power of Purchaser 47
Section 6.5 Sufficient Funds 49
Section 6.6 Legal Proceedings 49
Section 6.7 Investment Representation 49
Article VII Covenants49

Section 7.1 Conduct of Business 49
Section 7.2 Ordinary Conduct of TG Blocker 53
Section 7.3 Exclusivity 53
Section 7.4 Payoff Letters 53
Section 7.5 Reasonable Best Efforts 53
Section 7.6 Public Announcements 55
Section 7.7 Access to Information; Contact with Employees, Customers and
Suppliers; Confidentiality 56
Section 7.8 Access to Books and Records 58
Section 7.9 Indemnification and Insurance 58
Section 7.10 No Control of Other Party's Business 60
Section 7.11 Employee Matters 60
Section 7.12 Land Purchase Agreement 62
Section 7.13 Termination of Related Party Agreements 62
Section 7.14 Restructuring Transactions 62
Section 7.15 Call Option Agreement 63
Page
Article VIII Conditions Precedent 63
Section 8.1 Conditions to Each Party's Obligation 63

Section 8.2 Conditions to Obligations of Purchaser 63
Section 8.3 Conditions to Obligations of the Sellers 64
Article IX Termination65
Section 9.1 Termination 65
Section 9.2 Effect of Termination 66
Article X Certain Tax Matters66

Section 10.1 Responsibility for Filing Tax Returns 66
Section 10.2 Filing and Amendment of Tax Returns 67
Section 10.3 Transfer Taxes 68
Section 10.4 Tax Contests 68
Section 10.5 Tax Dispute Resolution 69
Section 10.6 Cooperation 69
Section 10.7 Purchase Price Allocation and Tax Treatment 70
Article XI Indemnification71
Section 11.1 Survival 71
Section 11.2 Indemnification by Sellers 71
Section 11.3 Indemnification by Purchaser 73
Section 11.4 Third Party Claim Indemnification Procedures 74
Section 11.5 Direct Claims 77
Section 11.6 Adjustment to Losses 77
Section 11.7 Payments 78
Section 11.8 Characterization of Indemnification Payments 78
Section 11.9 Mitigation 78
Section 11.10 Exclusive Remedy 79
Article XII Miscellaneous79

Section 12.1 Acknowledgement by Purchaser 79
Section 12.2 Seller Representative 81
Section 12.3 Fees and Expenses 83
Section 12.4 Amendment or Supplement 83
Section 12.5 Waiver 83
Section 12.6 Assignment 83
Section 12.7 Counterparts 83
Section 12.8 Entire Agreement; Third Party Beneficiaries 84
Section 12.9 Governing Law; Jurisdiction 84
Section 12.10 Specific Enforcement 84
Section 12.11 WAIVER OF JURY TRIAL 85
Section 12.12 Notices 85
Section 12.13 Severability 87
Section 12.14 Definitions 87
Section 12.15 Interpretation 103
Page
Section 12.16 No Recourse 104

Section 12.17 Provision Respecting Legal Representation 104
Section 12.18 Delivery by Electronic Transmission 105
Section 12.19 Guarantee 105
Exhibits
Exhibit A - Restructuring Transactions

Exhibit B - Form of Call Option Assignment
Exhibit C-1 - Form of Company FIRPTA Certificate
Exhibit C-2 - Form of TG Blocker FIRPTA Certificate
Exhibit C-3 - Form of MDP VI-C FIRPTA Certificate
Exhibit D - Definition of Net Working Capital Amount
Exhibit E - Rules of Engagement for Valuation Firm
Exhibit F - Allocation Schedule
Exhibit G - Illustrative Calculation of Net Working Capital Amount
Exhibit H - Form of Escrow Agreement
Exhibit I-1 - Form of Company Unit Transfer Power
Exhibit I-2 - Form of TG Blocker Stock Transfer Power
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated as of January 31, 2016 (this " Agreement "), is entered into by and
among Star Acquisition Sub Inc., a Delaware corporation (" Purchaser "), Stryker Corporation, a Michigan corporation (" Parent "),
solely for purposes of Section 12.19 , Sage Products Holdings II, LLC, a Delaware limited liability company (the " Company "),
Madison Dearborn Capital Partners VI-C, L.P., a Delaware limited partnership (" MDP VI-C "), MDCP VI-C Sage Holdings, Inc., a
Delaware corporation (" VI-C Holdco "), Thomas Glanzmann (" TG "), TG SP Holdings Corp., a Delaware corporation (" TG
Blocker "), Madison Dearborn Partners VI-B, L.P., a Delaware limited partnership (" GP "), MDP Sage Holdings, LLC, a Delaware
limited liability company (" MDP HoldCo "), Sage Products Holdings, LLC, a Delaware limited liability company (" Holdings " and,
collectively with MDP HoldCo and GP, the " Unit Sellers " and each individually a " Unit Seller "), and Sage Products Holdings,
LLC, solely in its capacity as the representative for the Sellers (the " Seller Representative "). The Unit Sellers together with TG and
MDP VI-C are referred to collectively as the " Sellers " and each individually as a " Seller ." Defined terms used herein have the
meanings set forth in Section 12.14 .
WITNESSETH
WHEREAS, immediately prior to the consummation of the transactions contemplated by this Agreement, the Sellers and the
Company will have consummated the transactions set forth on Exhibit A (collectively, the " Restructuring Transactions ");
WHEREAS, immediately following the consummation of the Restructuring Transactions (but prior to the Closing), TG
Blocker, VI-C Holdco and the Unit Sellers will constitute all of the members of the Company and will be the record and beneficial
owners of all of the issued and outstanding membership interests in the Company denominated as "Common Units" pursuant to the
Company LLC Agreement (collectively, the " Company Units ");
WHEREAS, MDP VI-C holds an option to purchase the Company Units owned by VI-C Holdco (the " Call Option ")
pursuant to the Option Agreement, effective as of December 13, 2012, by and between VI-C Holdco and MDP VI-C (as amended as
of February 28, 2013 and January 28, 2016, the " Call Option Agreement ");
WHEREAS, on the terms and subject to the conditions set forth in this Agreement and the Call Option Agreement, Purchaser
desires to purchase from MDP VI-C, and MDP VI-C desires to sell to Purchaser, the Call Option for the consideration described
herein;
WHEREAS, on the terms and subject to the conditions set forth in this Agreement and the Call Option Agreement, Purchaser
desires to exercise the Call Option following such purchase (for the avoidance of doubt, following the Restructuring Transactions);
WHEREAS, TG is the record and beneficial owner of all of the issued and outstanding shares of capital stock of TG Blocker
(the " Shares " and, together with the Company Units (other than those subject to the Call Option and those to be held by TG
Blocker) and the Call Option, the " Purchased Securities ");
WHEREAS, on the terms and subject to the conditions set forth in this Agreement, Purchaser desires to purchase from TG,
and TG desires to sell to Purchaser, all of the Shares for the consideration described herein;
WHEREAS, on the terms and subject to the conditions set forth in this Agreement, Purchaser desires to purchase from the
Unit Sellers, and the Unit Sellers desire to sell to Purchaser, all of the Company Units (other than those subject to the Call Option
and those to be held by TG Blocker), following the consummation of the Restructuring Transactions, for the consideration described
herein; and
WHEREAS, on the terms and subject to the conditions set forth in this Agreement, following the consummation of the
Restructuring Transactions, the sale by and purchase from the Unit Sellers of all the Company Units (other than those subject to the
Call Option and those to be held by TG Blocker), the sale by and purchase from TG of all the Shares and Purchaser's exercise of the
Call Option, Purchaser is to, directly or indirectly, own all of the Company Units.
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, Purchaser, the Company, VI-C Holdco, TG Blocker and Sellers (each, a " Party " and, collectively, the "
Parties ") hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
Section 1.1 Purchase and Sale of Securities. Upon and subject to the terms and conditions set forth in this Agreement, at
the Closing, Purchaser shall purchase and acquire, and each Seller shall sell, assign, transfer and convey to Purchaser, free and clear
of all Liens other than restrictions on transfer expressly set forth in the Company Charter Documents or restrictions on transfer
expressly set forth in the TG Blocker Charter Documents or general restrictions on transfer arising under the Securities Act and
applicable state securities Laws, the Purchased Securities held by such Seller as follows: (a) from each Unit Seller, the Company
Units then held by it, which (together with the Company Units to be sold by the other Unit Sellers) shall constitute all Company
Units (other than those subject to the Call Option, which shall be purchased and acquired by Purchaser pursuant to Section 1.3(b) ,
and those to be held by TG Blocker, which shall be indirectly purchased and acquired by Purchaser pursuant to Section 1.3(c) ); (b)
from MDP VI-C, the Call Option; and (c) from TG, the Shares. Each such purchase is a separate purchase hereunder. Each Seller
shall be entitled to receive in respect of and in consideration of the foregoing sale of such Seller's Purchased Securities (i) the portion
of the Closing Purchase Price under the heading "Closing Purchase Price and Call Option Exercise Price" set forth on the Allocation
Schedule (as determined pursuant to Section 2.1(a) ) opposite such Seller's name ( provided
that Purchaser's sole obligation with
respect thereto shall be to fulfill its obligations under Section 1.4(a)), (ii) any consideration paid or payable to the Sellers pursuant to,
and in accordance with, Section 2.3 (including from the Adjustment Escrow Account) ( provided
that Purchaser's sole obligation
with respect thereto shall be to fulfill its obligations under Section 2.3 ) and (iii) any distribution of any remaining portion of the
Representative Holdback Amount to the Sellers pursuant to Section 12.2(e) ( provided
that Purchaser's sole obligation with respect
thereto shall be to fulfill its obligations under Section 1.4(d) ) (collectively, " Consideration ").
Section1.2 Closing. The closing of the Transactions (the " Closing ") shall take place at the offices of Kirkland & Ellis
LLP, 300 North LaSalle, Chicago, Illinois 60654 at 10:00 a.m. (Chicago time) on the date that is two Business Days following the
satisfaction or waiver (to the extent permitted by applicable Law) by the Party entitled to the benefit of such conditions at the
Closing of the conditions set forth in Article VIII (other than those conditions that by their nature are to be satisfied at the Closing,
but subject to the satisfaction or waiver (by the Party entitled to the benefit of such conditions) at the Closing of those conditions at
such time), or on such other date, time or place as is agreed to in writing by Purchaser and the Seller Representative; provided
, the
Closing shall not occur before April 1, 2016 without the prior written consent of Purchaser (which consent is in the sole discretion of
Purchaser). The date on which the Closing occurs is referred to herein as the "Closing Date."
Section1.3 The Closing Transactions . At the Closing, Purchaser and each Seller shall, on the terms and subject to the
conditions set forth in this Agreement, engage in the following transactions applicable to such party in the following order:
(a) MDP VI-C shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase and acquire
from MDP VI-C, the Call Option.
(b) Purchaser shall exercise the Call Option in accordance with the terms of this Agreement and the Call
Option Agreement, including the payment of the exercise price thereunder as set forth on the Allocation Schedule (as determined
pursuant to Section 2.1(a) ) (the " Call Option Exercise Price ") to VI-C Holdco (or its designee) pursuant to Section 1.4(a) , and VI-
C Holdco shall deliver and/or assign the Company Units then subject to the Call Option to Purchaser.
(c) TG shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase and acquire from TG,
the Shares.
(d) Each Unit Seller shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase and
acquire from each Unit Seller, the Company Units then held by such Unit Seller.
Section1.4 Closing Deliveries and Payments . At the Closing, on the terms and subject to the conditions set forth in this
Agreement:
(a) Payment of Closing Purchase Price and Call Option Exercise Price . Purchaser shall pay, or cause to be paid, an
aggregate amount equal to the sum of the Closing Purchase Price and the Call Option Exercise Price to the Seller Representative
(for the benefit of the Sellers) and VI-C Holdco in the amounts set forth under the heading "Closing Purchase Price and Call Option
Exercise Price" opposite their name on the Allocation Schedule (as determined pursuant to Section 2.1(a) ) by wire transfer of
immediately available funds to an account or accounts designated in writing by the Seller Representative to Purchaser at least two
Business Days prior to the Closing Date.
(b) Transfer Documents . (a) Each Unit Seller, with respect to the Company Units then held by it, (b) TG, with respect to the
Shares, and (c) VI-C Holdco, with respect to the Company Units subject to the Call Option, shall deliver to Purchaser certificates (to
the extent such interests are certificated) representing all of such Seller's Purchased Securities, duly endorsed (or accompanied by
duly executed transfer powers substantially in the forms attached hereto as Exhibit I-1 and I-2 , as applicable) for transfer to
Purchaser.
(c) Assignment of Call Option . MDP VI-C and Purchaser shall execute an assignment agreement, substantially in
the form of Exhibit B attached hereto, assigning all of MDP VI-C's right to the Call Option to Purchaser.
(d) Seller Representative Holdback . An amount equal to $5,000,000 (such initial deposit, as it may be increased or
decreased as provided below in this Section 1.4(d) , the " Representative Holdback Amount ") shall be delivered by Purchaser to the
Seller Representative at the Closing, on behalf of the Sellers, by wire transfer of immediately available funds to an account
designated in writing by the Seller Representative to Purchaser at least two Business Days prior to the Closing Date. The portion of
the Representative Holdback Amount delivered to, and held by, the Seller Representative on behalf of each such Seller shall be
allocated in proportion to each Seller's Residual Percentage. The Seller Representative is entitled to pay on behalf of the Sellers and,
to the extent paid by the Seller Representative from its own funds, to obtain reimbursement for any fees, costs and expenses
incurred by the Seller Representative in the performance of its roles hereunder from the Representative Holdback Amount. The
Seller Representative may increase or decrease the amount of the Representative Holdback Amount by written notice to Purchaser
at least two Business Days prior to the Closing Date.
(e) Debt Payoff . At the Closing, Purchaser shall repay, or cause to be repaid, on behalf of the Company and its
Subsidiaries, all amounts necessary to discharge fully the then outstanding balance of the Estimated Indebtedness Amount owed to
the Payoff Persons, in accordance with any such payoff letters provided by the Company to Purchaser pursuant to Section 7.4 , by
wire transfer of immediately available funds to the account(s) designated in such payoff letters by the holders of such Estimated
Indebtedness Amount.
(f) Transaction Expenses Payment . At the Closing, Purchaser shall pay, or cause to be paid, on behalf of the
Company and its Subsidiaries, all Estimated Transaction Expenses in accordance with the Closing Statement by wire transfer of
immediately available funds to the account(s) as may be specified therein or such other reasonable method of payment as may be
specified therein.
(g) FIRPTA Certificate . At the Closing, (i) the Company shall deliver a certification, in form and substance as
described in Treasury Regulations Section 1.1445-11T(d)(2), and substantially in the form attached hereto as Exhibit C-1 , that
either (a) fifty percent or more of the value of the gross assets of the Company does not consist of United States real property
interests within the meaning of Section 897 of the Code and the Treasury Regulations thereunder (" USRPIs ") or (b) ninety percent
or more of the value of the gross assets of the Company does not consist of USRPIs plus cash or cash equivalents, (ii) TG Blocker
shall deliver a certification dated as of the Closing Date, in form and substance as described in Treasury Regulations issued under
Sections 1445 and 897 of the Code, and substantially in the
form attached hereto as Exhibit C-2 , that TG Blocker is not, and has not been in the five-year period preceding the Closing Date, a
"United States real property holding corporation" within the meaning of Code Section 897(c)(2), together with a completed notice
(in substantially the form attached to Exhibit C-2 ) to be mailed to the IRS by Purchaser following the Closing, and (iii) MDP VI-C
shall deliver a certification, dated as of the Closing Date, and in form and substance as described in Treasury Regulations under
Section 1445 of the Code, and substantially in the form attached hereto as Exhibit C-3 , that MDP VI-C is not a foreign person
within the meaning of Section 1445 and the Treasury Regulations thereunder; provided
that the sole recourse for failing to deliver
any such form is to withhold under Section 1.5 to the extent required.
(h) Resignations . Unless Purchaser requires otherwise by written notice to the Company at least 10 days prior to
the Closing Date, the Company shall deliver resignations from the directors of the Company and TG shall deliver resignations from
the directors of TG Blocker, in each case in customary form and substance and effective as of the Closing.
(i) Escrow . Purchaser shall deliver (i) an amount equal to the Escrow Deposit, in immediately available funds, to
an account or accounts specified by Wells Fargo Bank, National Association, a national banking association (the " Escrow Agent "),
pursuant to instructions given to Purchaser by the Escrow Agent no later than two Business Days prior to the Closing Date, which
Escrow Deposit shall be held, safeguarded and released pursuant to the terms of the Escrow Agreement, and (ii) a duly executed
counterpart of the Escrow Agreement, executed by Purchaser. The Seller Representative shall deliver a duly executed counterpart of
the Escrow Agreement, executed by the Seller Representative.
Section1.5 Withholding Rights . Purchaser shall be entitled to deduct and withhold from any payment to the Seller
Representative, any Seller or any other Person under this Agreement such amounts as any of them is required to deduct and withhold
with respect to the sale of the Company Units, the Shares or the Call Option, as applicable. Before making any such deduction or
withholding, Purchaser shall provide the Seller Representative, such Seller or such other Person on behalf of which such deduction
or withholding is proposed to be made 30 days' advance written notice of the intention to make such deduction or withholding, which
notice shall include the authority, basis and method of calculation for the proposed deduction or withholding, and Purchaser shall (at
the Seller Representative's, such Seller's or such other Person's cost, as the case may be) cooperate with any reasonable request from
the Seller Representative, such Seller or such other Person to obtain reduction of or relief from such deduction or withholding. To
the extent that amounts are so withheld or deducted and timely paid to the appropriate Tax authority, such amounts shall be treated
for all purposes of this Agreement as having been paid to the Seller Representative, such Seller or such other Person in respect of
which such deduction and withholding was made.
Section1.6 Escrow Fund .
(a) Adjustment Escrow Funds . Promptly following the determination of the Final Closing Purchase Price,
Purchaser and the Seller Representative shall jointly direct the Escrow Agent in writing to distribute to Purchaser and/or the Seller
Representative, as
applicable, in accordance with the terms of this Agreement and the Escrow Agreement, the amount, if any, payable thereto pursuant
to Section 2.3 .
(b) Indemnity Escrow Funds . Promptly following the Final Determination of any claim made by any Purchaser
Indemnified Party pursuant to Article XI , Purchaser and the Seller Representative shall direct the Escrow Agent to distribute from
the Indemnity Escrow Account an amount equal to the amount Finally Determined to be payable to such Purchaser Indemnified
Party in connection with such claim, if any, in each case in accordance with, and subject to the conditions set forth in, this
Agreement and the Escrow Agreement. Promptly following the date that is 12 months after the Closing Date, Purchaser and the
Seller Representative shall jointly direct the Escrow Agent in writing to distribute any remaining amounts in the Indemnity Escrow
Account to the Seller Representative (for the benefit of the Sellers); provided
that, to the extent there are any pending and
unresolved claims (or resolved but unpaid claims) for indemnification under Article XI for which notice has been timely provided,
the portion of the Indemnity Escrow Account in an amount equal to the amount claimed pursuant to such pending and unresolved
claims or resolved but unpaid claims (and if the amounts claimed, whether pending and unresolved or resolved and unpaid, equal or
exceed the amount then held in the Indemnity Escrow Account, all of such amount then held) shall be retained in the Indemnity
Escrow Account in accordance with the Escrow Agreement and shall be released in accordance with the procedures set forth in this
Agreement and the Escrow Agreement. Thereafter, promptly following the Final Determination of any pending and unresolved
claim for indemnification under Article XI , Purchaser and the Seller Representative shall jointly direct the Escrow Agent in writing
to distribute in accordance with such Final Determination any remaining portion of the Indemnity Escrow Funds in the Indemnity
Escrow Account held back with respect to such claim that is to be paid to any Purchaser Indemnified Party in accordance with such
Final Determination and to distribute to the Seller Representative (for the benefit of the Sellers) the balance of any remaining
portion of the Indemnity Escrow Funds in the Indemnity Escrow Account held back with respect to such claim in accordance with,
and subject to the conditions of, this Agreement and the Escrow Agreement.
ARTICLE II
PURCHASE PRICE; POST-CLOSING ADJUSTMENT
Section 2.1 Purchase Price .

(a) The Allocation Schedule shall be based on the beneficial ownership of the Company by the Sellers and shall set
forth the allocation among the Sellers and VI-C Holdco of the Consideration to be paid by Purchaser pursuant to this Agreement and
the Call Option Agreement. At least two Business Days prior to the Closing Date, the Seller Representative shall prepare and
deliver to Purchaser an updated and filled in version of the Allocation Schedule; provided
, however
, that if, after delivery of the
Allocation Schedule pursuant to the foregoing, the Closing Statement is revised pursuant to Section 2.1(d) , then the Seller
Representative may deliver a further updated Allocation Schedule to Purchaser prior to Closing. If Purchaser disagrees in good faith
with such updated or revised updated Allocation Schedule based on the direct and indirect beneficial ownership of the Company by
the Sellers as of the Closing, the Closing shall not be delayed and the Parties shall, following the Closing,
negotiate in good faith, and, if necessary, the Tax Accountant shall determine and prepare the Allocation Schedule based on the
direct and indirect beneficial ownership of the Company as of the Closing, in each case pursuant to Section 10.5 , except, for this
purpose, the fees and expenses of the Tax Accountant shall be borne by the Party which, in the conclusive judgment of the Tax
Accountant, is not the prevailing party.
(b) The Allocation Schedule as determined pursuant to Section 2.1(a) shall be the Allocation Schedule for all
purposes hereunder. It is expressly acknowledged and agreed that the preparation of the Allocation Schedule and the allocation set
forth therein are the sole responsibility of the Sellers except as set forth in Section 2.1(a) , and that Purchaser (and, on and after the
Closing, the Company) shall be entitled to rely thereon, without any obligation to investigate or verify the accuracy or correctness
thereof and to make payments in accordance therewith.
(c) At least three Business Days prior to the Closing Date, the Company shall prepare and deliver to Purchaser a
written statement, together with reasonable supporting detail (the " Closing Statement "), setting forth:
(i) the Company's good faith estimates of (A) the Cash Amount (the " Estimated Cash Amount "),
(B) the Indebtedness Amount (the " Estimated Indebtedness Amount "), (C) the Net Working Capital Amount (the "
Estimated Net Working Capital Amount "), (D) the Transaction Expenses (the " Estimated Transaction Expenses ") and
(E) the SmartMed Estimated 2016 Earnout Payment Amount;
(ii) a list of, and, as applicable, payment instructions for the payment of, the Estimated Transaction
Expenses (along with supporting invoices or other evidence to the extent received ( it
being
understood
that the Company
shall use its commercially reasonable efforts to obtain such supporting invoices or other evidence in advance of the
Company's delivery of the Closing Statement, and if they cannot be so obtained, shall continue to use commercially
reasonable efforts to obtain such supporting evidence or other evidence prior to the Closing)); and
(iii) the calculation of the Closing Purchase Price.
(d) After the delivery of the Closing Statement, Purchaser and its Representatives shall have a reasonable
opportunity to review and to discuss with the Company and its Representatives during normal business hours (i) the Company's and
its Subsidiaries' working papers and the working papers of the Company's independent accountants, if any, relating to the
preparation of the Closing Statement and the calculation of the Estimated Cash Amount, Estimated Net Working Capital Amount,
Estimated Indebtedness Amount and Estimated Transaction Expenses and (ii) the relevant books and records of the Company and
its Subsidiaries relating to the Cash Amount, the Net Working Capital Amount, the Indebtedness Amount or the Transaction
Expenses, and the Company and its Representatives shall reasonably assist Purchaser and its representatives in their review of the
Closing Statement and reasonably cooperate with respect thereto. In the event Purchaser notifies the Company in writing prior to the
Closing that it disputes any amount set forth in the Closing Statement together with an explanation of its position (subject to the
Company having materially complied with its
obligations under this Section 2.1(d) ), the Company shall (A) correct any manifest computational error in the Closing Statement
and (B) cooperate with Purchaser in good faith to resolve any such dispute as promptly as practicable prior to the Closing Date;
provided
that such processes are not intended to permit the introduction of different judgments, accounting methods, policies,
principles, practices, procedures, classifications or estimation methodologies for the purpose of determining the Estimated Cash
Amount, Estimated Indebtedness Amount, Estimated Transaction Expenses or Estimated Net Working Capital Amount than those
used in the preparation of the Latest Audited Balance Sheet, except as otherwise set forth in the definition of Net Working Capital
Amount, and shall not include any changes in assets or liabilities as a result of purchase accounting adjustments. If, prior to the
Closing, Purchaser and the Company agree in writing to the modification of any component on the Closing Statement, then such
components of the Closing Statement shall be modified as so agreed and an updated Allocation Schedule shall be prepared in
accordance with Section 2.1(a) . Otherwise (including if any such dispute is not resolved), the Closing Statement shall be as
delivered by the Company pursuant to Section 2.1(c) and the Closing shall not be delayed ( it
being
understood
and agreed by the
Parties that any Closing Purchase Price disputes not raised or resolved prior to the Closing shall not be deemed waived or thereafter
barred from being asserted by Purchaser pursuant to Section 2.2 ).
(e) From the open of business on the Closing Date and until the time immediately preceding the Closing, the
Company shall not, and shall not permit any of its Subsidiaries to, make any dividend or distributions of Cash or incur any
Indebtedness or Transaction Expenses (other than as already fully reflected in the Closing Statement) or use any Cash to pay any
Transaction Expenses or to repay any Indebtedness. If, as a result of a breach by the Company of any of its covenants contained in
this Section 2.1(e) , Cash, Transaction Expenses or Indebtedness shall have changed between the open of business on the Closing
Date and the time immediately preceding the Closing, then any such changes shall be included in the calculation of Cash Amount,
Transaction Expenses and/or Indebtedness Amount (as the case may be) for purposes of the Closing Statement.
(f) For purposes of this Agreement, the term " Closing Purchase Price " means (i) $2,775,000,000 (the " Base
Purchase Price "), minus (ii) the Estimated Indebtedness Amount, plus (iii) the amount, if any, by which the Estimated Net Working
Capital Amount exceeds the Target Net Working Capital Amount, minus (iv) the amount, if any, by which the Target Net Working
Capital Amount exceeds the Estimated Net Working Capital Amount, plus (v) the Estimated Cash Amount, minus (vi) the
Estimated Transaction Expenses, minus (vii) the Call Option Exercise Price, minus (viii) the Representative Holdback Amount,
minus (ix) the SmartMed Estimated 2016 Earnout Payment Amount, minus (x) the Escrow Deposit.
(g) For purposes of this Agreement, the term " Final Closing Purchase Price " means (i) the Base Purchase Price,
minus (ii) the Indebtedness Amount as finally determined pursuant to Section 2.2 , plus (iii) the amount, if any, by which the Net
Working Capital Amount as finally determined pursuant to Section 2.2 exceeds the Target Net Working Capital Amount, minus
(iv) the amount, if any, by which the Target Net Working Capital Amount exceeds the Net Working Capital Amount as finally
determined pursuant to Section 2.2 , plus (v) the Cash Amount as finally determined pursuant to Section 2.2 , minus (vi) the
Transaction Expenses as finally determined pursuant to Section 2.2 , minus (vii) the Call Option Exercise Price, minus
(viii) the Representative Holdback Amount, minus (ix) the SmartMed Estimated 2016 Earnout Payment Amount, minus (x) the
Escrow Deposit.
Section 2.2 Final Closing Balance Sheet Calculation . As promptly as possible, but in any event within 60 days after the
Closing Date, Purchaser shall deliver to the Seller Representative a statement, together with reasonable supporting detail, showing
the calculation of the Cash Amount, Indebtedness Amount, Transaction Expenses, Net Working Capital Amount and the SmartMed
Estimated 2016 Earnout Payment Amount (the " Preliminary Statement "). Notwithstanding anything to the contrary in this
Agreement, the Cash Amount, Indebtedness Amount, Transaction Expenses and Net Working Capital Amount shall be determined
on a consolidated basis in accordance with the same accounting methods, policies, principles, practices and procedures, with
consistent classifications, judgments and estimation methodology, as were used in the preparation of the Latest Audited Balance
Sheet, except as otherwise set forth in the definition of Net Working Capital Amount, and shall not include any changes in assets or
liabilities as a result of purchase accounting adjustments. The Parties agree that the purpose of determining the Cash Amount,
Indebtedness Amount, Transaction Expenses and Net Working Capital Amount and the related purchase price adjustment
contemplated by this Section 2.2 (including any estimates of the foregoing) is to (a) measure the Cash Amount, Indebtedness
Amount and Transaction Expenses and (b) measure changes in the Net Working Capital Amount against the Target Net Working
Capital Amount, and such processes are not intended to permit the introduction of different judgments, accounting methods, policies,
principles, practices, procedures, classifications or estimation methodologies for the purpose of determining the Cash Amount,
Indebtedness Amount, Transaction Expenses or Net Working Capital Amount that are different from those contemplated by the
foregoing provisions of this Section 2.2 . The Seller Representative and its Representatives shall be permitted full access (during
normal business hours) to review the Company's and its Subsidiaries' books and records and any work papers (including, if any,
those of the Company's independent accountants) related to the preparation of the Preliminary Statement and the adjustments
contemplated thereby. The Seller Representative and its Representatives may make reasonable inquiries of Purchaser, the Company
and their respective accountants regarding questions or disagreements, and Purchaser shall use its, and shall cause the Company and
its Subsidiaries to use their, reasonable best efforts to cause any such accountants to cooperate with and respond to such inquiries. At
the request of the Seller Representative, the Company shall make available during normal business hours its and its Subsidiaries'
personnel and Representatives to advise and assist the Seller Representative in its review of the Preliminary Statement and any
objections or disputes with respect thereto. If the Seller Representative has any objections to the Preliminary Statement, the Seller
Representative shall deliver to Purchaser a statement setting forth its objections thereto, showing in reasonable detail, to the extent
available to the Seller Representative, and subject to Purchaser and the Company having materially complied with their obligations
under this Section 2.2 , the Seller Representative's explanation for its position (an " Objections Statement "). Any items or amounts
not disputed in the Objections Statement will be final, binding and non-appealable by the Parties. If an Objections Statement is not
delivered to Purchaser within 45 days after delivery of the Preliminary Statement to the Seller Representative, the Preliminary
Statement shall be final, binding and non-appealable by the Parties, and the Seller Representative shall be deemed to have waived
any rights to object to the Preliminary Statement or deliver an Objections Statement. The Seller Representative and Purchaser shall
negotiate in good faith to resolve any such objections, but if and to the extent they do not reach a final resolution within 30 days after
the delivery of the
Objections Statement, the Seller Representative and Purchaser shall submit such dispute to KPMG LLP (the " Valuation Firm ").
Any further submissions to the Valuation Firm must be written and delivered to each party to the dispute. The Valuation Firm shall
make a final determination of the Cash Amount, Indebtedness Amount, Transaction Expenses, Net Working Capital Amount,
SmartMed Estimated 2016 Earnout Payment Amount, and the resulting Final Closing Purchase Price calculated with reference to
such amounts (solely to the extent such amounts are in dispute) in accordance with the guidelines and procedures set forth in this
Agreement and on Exhibit E . The Parties shall cooperate with the Valuation Firm during the term of its engagement. The
determination of the Cash Amount, Indebtedness Amount, Transaction Expenses, Net Working Capital Amount, SmartMed
Estimated 2016 Earnout Payment Amount, and the resulting Final Closing Purchase Price calculated with reference thereto, in each
case in the manner contemplated by this Section 2.2 , shall become final and binding on the Parties on the date the Valuation Firm
delivers its final resolution in writing to the parties. If any unresolved objections are submitted to the Valuation Firm, then, for
purposes of this Section 2.2 , Purchaser shall be the prevailing party in such proceeding if a majority of the dollar amount of the
unresolved objections are decided by the Valuation Firm in favor of Purchaser, and the Seller Representative shall be the prevailing
party if a majority of the dollar amount of the unresolved objections are decided by the Valuation Firm in favor of the Seller
Representative. The Party that is not the prevailing party shall pay all of the fees, costs and expenses of the Valuation Firm.
Section 2.3 Post-Closing Adjustment Payment .
(a) If the Final Closing Purchase Price is greater than the Closing Purchase Price, (i) Purchaser shall promptly (but
in any event within five Business Days) pay, or cause to be paid, to the Seller Representative (for the benefit of the Sellers in
accordance with Section 2.3(c) ) the amount of such excess, by wire transfer of immediately available funds to the account or
accounts designated in writing by the Seller Representative to Purchaser and (ii) Purchaser and the Seller Representative shall
jointly instruct the Escrow Agent in writing to deliver to the Seller Representative (for the benefit of the Sellers) by wire transfer of
immediately available funds the Adjustment Escrow Funds from the Adjustment Escrow Account. If the Final Closing Purchase
Price is less than the Closing Purchase Price, then the absolute value of such difference shall be the " Adjustment Amount ," and
Purchaser and the Seller Representative will jointly instruct the Escrow Agent in writing to pay (A) to Purchaser, by wire transfer of
immediately available funds from the Adjustment Escrow Account, an amount equal to the lesser of (1) the Adjustment Amount and
(2) the Adjustment Escrow Funds; provided
that in the event the Adjustment Amount is greater than the Adjustment Escrow Funds
(the Adjustment Amount, minus the Adjustment Escrow Funds, the " Adjustment Shortfall Amount "), the Seller Representative
shall, in addition to instructing the Escrow Agent to pay to Purchaser the Adjustment Escrow Funds, pay to Purchaser, within five
Business Days after the determination of the Final Closing Purchase Price, the Adjustment Shortfall Amount, by wire transfer of
immediately available funds to an account or accounts designated in writing to Seller Representative by Purchaser within at least
three Business Days after the determination of the Final Closing Purchase Price, and the Sellers shall take any and all actions,
including providing the Seller Representative the necessary funds, to ensure the Seller Representative's ability to comply with the
foregoing payment obligation, and (B) to the Seller Representative (for the benefit of the Sellers), by wire transfer of immediately
available funds, the remainder after
executing the transfers contemplated in clause (A), if any, of the Adjustment Escrow Funds to an account or accounts designated by
the Seller Representative to the Escrow Agent.
(b) The Adjustment Escrow Funds may be distributed to Purchaser solely and exclusively in accordance with
Section 2.3(a) and the terms of the Escrow Agreement and shall not be available for any other payment to Purchaser or any of its
Affiliates. All title and all rights to all remaining Adjustment Escrow Funds (if any) shall transfer to the Seller Representative (i)
immediately following the payments made to Purchaser of the Adjustment Amount under Section 2.3(a) if the Final Closing
Purchase Price is less than the Closing Purchase Price or (ii) immediately upon the final determination of the Final Closing Purchase
Price pursuant to Section 2.2 , if the Final Closing Purchase Price is greater than the Closing Purchase Price, in each case in
accordance with the terms of this Agreement and the Escrow Agreement.
(c) Subject to Section 12.2(e) , any consideration paid or payable to the Sellers pursuant to this Agreement (other
than the Closing Purchase Price and the Call Option Exercise Price) shall be allocated among the Sellers in accordance with such
Seller's Residual Percentage and shall be paid to the Seller Representative (for the benefit of the Sellers) in accordance with the
payment instructions provided to Purchaser in writing by the Seller Representative; provided
that Purchaser's only obligation with
respect to the payment of consideration paid or payable to the Sellers shall be to satisfy its obligations under Section 1.4 and
Section 2.3(a) .
(d) The Parties agree that any amount paid under this Section 2.3 shall be treated as an adjustment to the Final
Closing Purchase Price for Tax purposes (with any such adjustments allocated among the Purchased Securities consistent with the
Sellers' Residual Percentages) and, except to the extent required by applicable Law, agree not to take any position inconsistent with
such treatment on any Tax Return.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser, except as disclosed in the applicable section or subsection of the
disclosure schedule delivered to Purchaser simultaneously with the execution of this Agreement (the " Disclosure Schedule ") (which
schedule sets forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express
disclosure requirement contained in the corresponding provision hereof or as an exception to the corresponding representations or
warranties in this Article III , Article IV , Article V (as applicable) or to the corresponding covenants contained in Article VII ,
except that any information set forth in one section of the Disclosure Schedule shall be deemed to apply to all other sections or
subsections thereof to the extent the relevance of such information is reasonably apparent based on the face of such disclosure):
Section 3.1 Organization, Standing and Organizational Power . The Company (a) is a limited liability company duly
formed, validly existing and in good standing under the Laws of the State of Delaware, (b) has all requisite organizational power and
authority necessary
to own, lease and operate all of its properties and assets and to carry on its business as it is now being conducted and (c) is qualified
to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing
or operation of its assets or properties or conduct of its business requires such qualification, except, in the case of clause (c), where
the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect or prevent or materially delay the consummation of the Transactions. The Company has made
available to Purchaser copies of the Company Charter Documents, each as amended to the date hereof, that are true and correct, and
each as made available is in full force and effect.
Section 3.2 Authority; Noncontravention .
(a) The Company has all necessary organizational power and authority to execute and deliver this Agreement and
to perform its obligations hereunder and to consummate the Transactions. The execution and delivery of and performance by the
Company under this Agreement have been duly authorized by all requisite limited liability company action and no other
organizational action on the part of the Company is necessary to authorize the execution and delivery of and performance by the
Company under this Agreement. This Agreement has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery hereof by the other Parties, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at
law or in equity (the " Bankruptcy and Equity Exception ").
(b) Neither the execution and delivery of this Agreement by the Company, nor the consummation by the Company
of the Transactions, nor compliance by the Company with any of the terms or provisions hereof, shall (i) conflict with or violate any
provision of the Company Charter Documents or any Organizational Documents of any of its Subsidiaries, (ii) assuming that each
of the consents, authorizations and approvals referred to in Section 3.3 (and any condition precedent to any such consent,
authorization or approval has been satisfied) and each of the filings referred to in Section 3.3 are made and any applicable waiting
periods referred to therein have expired, violate any Law applicable to the Company or any of its Subsidiaries or (iii) result in any
breach of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to any right of termination,
amendment, acceleration or cancellation of, any Material Contract or any other Contract that is material to the business of the
Company and its Subsidiaries to which the Company or any Subsidiary is a party (excluding any Company Plan or agreement,
contract, arrangement or plan entered into by, or at the direction of, Purchaser or any of its Affiliates), or result in the creation of a
Lien, other than any Permitted Lien, upon any of the properties or assets of the Company or any of its Subsidiaries, other than, in
the case of clauses (ii) and (iii), as would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect.
Section 3.3 Governmental Approvals . Except for the filings required under, and compliance with other applicable
requirements of, the HSR Act, no consents, permits,
authorizations or approvals of, or notices, filings, declarations or registrations with, any Governmental Authority are necessary for
the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the
Transactions, other than as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
Section 3.4 Subsidiaries . Each of the Company's Subsidiaries (a) is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its organization, (b) has all requisite organizational power and authority necessary to own, lease
and operate all of its properties and assets and to carry on its business as it is now being conducted and (c) is qualified to do business
and in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing or operation of
its assets or properties or conduct of its business requires such qualification, except, in the case of clause (c), where the failure to be
so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect or prevent or materially delay the consummation of the Transactions. Section 3.4 of the Disclosure Schedule sets
forth each of the Subsidiaries and its jurisdiction of incorporation or organization. All the issued and outstanding shares of capital
stock of, or other equity interests in, each such Subsidiary have been duly authorized and validly issued and, if applicable, are fully
paid and non-assessable, are free and clear of any preemptive rights and are wholly owned beneficially and of record, directly or
indirectly, by the Company or one of the Company's Subsidiaries free and clear of all Liens and transfer restrictions (other than
transfer restrictions expressly set forth in the Organizational Documents of such Subsidiaries), except for such transfer restrictions of
general applicability as may be provided under the Securities Act of 1933 (the " Securities Act ") and other applicable foreign or
domestic securities Laws. None of the Company or any of the Company's Subsidiaries owns or controls or holds the right to acquire,
directly or indirectly, any stock, partnership interest, joint venture interest or other equity ownership interest in any other Person. The
Company has made available to Purchaser copies of its Subsidiaries' certificates of incorporation and bylaws or comparable
governing or organizational documents (as applicable), each as amended to the date hereof (together with the Company Charter
Documents, the " Organizational Documents "), that are true and correct, and each as made available is in full force and effect.
Section 3.5 Capitalization .
(a) As of the date hereof:
(i) 1,000 Company Units are issued and outstanding. Except for the Company Units outstanding, there are
no issued and outstanding voting or equity securities of the Company. No Company Units are held by the Company in its
treasury or are owned by any of its Subsidiaries. All outstanding Company Units have been duly authorized and validly
issued and, if applicable, are fully paid and non-assessable, are free and clear of any preemptive rights and are wholly owned
beneficially and of record, directly or indirectly, by the Sellers free and clear of all Liens and transfer restrictions (other than
transfer restrictions expressly set forth in the Company Charter Documents and the TG Blocker Charter Documents), except
for such transfer restrictions of general applicability as may be provided under the Securities Act and other applicable foreign
or
domestic securities Laws. As of the date hereof, except for the Transactions and except as set forth in the first sentence of this
Section 3.5(a)(i) , there are no outstanding options, warrants, convertible or exchangeable securities, "phantom" equity rights,
equity appreciation rights, equity-based performance units, other equity-based compensation awards, rights to subscribe to,
rights in respect of exchange or conversion for, redemption or purchase rights, calls or commitments made by the Company
or any of its Subsidiaries relating to the issuance, purchase, sale or repurchase of any shares of common stock, limited
liability company interests or other equity interests issued by the Company or any of its Subsidiaries containing any equity
features, or contracts, commitments, understandings or arrangements, by which the Company or any of its Subsidiaries is
bound to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares or other equity interests, or options,
warrants, rights to subscribe to, purchase rights, conversion or exchange rights, calls or commitments made by the Company
or any of its Subsidiaries relating to any shares or other equity interests of the Company or any of its Subsidiaries. There are
no material agreements or other obligations (contingent or otherwise) that require the Company to repurchase or otherwise
acquire any of the Company's equity securities that would survive the Closing. None of the Company or any of the
Company's Subsidiaries has outstanding any bonds, debentures, notes or other indebtedness, the holders of which have the
right to vote (or convertible into or exchangeable or exercisable for securities having the right to vote) with the holders of
Company Units or the holders of capital stock or other equity interests or voting securities of the Company or any of the
Company's Subsidiaries on any matters. There is no voting trust or other agreement or understanding to which the Company
or any of the Company's Subsidiaries is a party, or any other voting agreement or understanding, with respect to the voting of
the capital stock or other equity interests or voting securities of the Company or any of the Company's Subsidiaries.
(ii) Section 3.5(a)(ii) of the Disclosure Schedule sets forth, as of the date hereof, a true and correct list of all
holders of outstanding Company Units, including the number of Company Units held by such holders.
(b) As of immediately prior to the Closing and after the consummation of the Restructuring Transactions:
(i) 1,000 Company Units will be issued and outstanding. Except for the Company Units outstanding, there
will be no issued and outstanding voting or equity interests in the Company. No Company Units will be held by the Company
in its treasury or owned by any of its Subsidiaries. All outstanding Company Units will be duly authorized and validly issued
and, if applicable, will be fully paid and non-assessable, and will be free and clear of any preemptive rights and will be
wholly owned beneficially and of record, directly or indirectly, by the Unit Sellers, TG Blocker and VI-C Holdco free and
clear of all Liens and transfer restrictions (other than transfer restrictions expressly set forth in the Company Charter
Documents and the TG Blocker Charter Documents), except for such transfer restrictions of general applicability as may be
provided under the Securities Act and other applicable foreign or domestic securities Laws. Except as set forth in the first
sentence of this Section 3.5(b)(i) and except for the Transactions, there will be no outstanding options, warrants, convertible
or exchangeable
securities, "phantom" equity rights, equity appreciation rights, equity-based performance units, other equity-based
compensation awards, rights to subscribe to, rights in respect of exchange or conversion for, redemption or purchase rights,
calls or commitments made by the Company or any of its Subsidiaries relating to the issuance, purchase, sale or repurchase of
any shares of common stock, limited liability company interests or other equity interests issued by the Company or any of its
Subsidiaries containing any equity features, or contracts, commitments, understandings or arrangements, by which the
Company or any of its Subsidiaries will be bound to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares or other equity interests, or options, warrants, rights to subscribe to, purchase rights, conversion or exchange rights,
calls or commitments made by the Company or any of its Subsidiaries relating to any shares or other equity interests of the
Company or any of its Subsidiaries. There will be no material agreements or other obligations (contingent or otherwise) that
require the Company to repurchase or otherwise acquire any of the Company's equity securities that would survive the
Closing. None of the Company or any of the Company's Subsidiaries will have outstanding any bonds, debentures, notes or
other indebtedness, the holders of which will have the right to vote (or will be convertible into or exchangeable or exercisable
for securities having the right to vote) with the holders of Company Units or the holders of capital stock or other equity
interests or voting securities of the Company or any of the Company's Subsidiaries on any matters. There will be no voting
trust or other agreement or understanding to which the Company or any of the Company's Subsidiaries is a party, or any other
voting agreement or understanding, with respect to the voting of the capital stock or other equity interests or voting securities
of the Company or any of the Company's Subsidiaries.
(ii) The Allocation Schedule, as determined pursuant to Section 2.1(a) , will set forth, as of immediately
prior to the Closing and after the consummation of the Restructuring Transactions, a true and correct list of all holders of
outstanding Company Units, and, as updated pursuant to Section 2.1(a) , the number of Company Units held by such holders.
Section 3.6 Financial Statements; Undisclosed Liabilities .
(a) The Company has previously furnished to Purchaser the following financial statements (collectively, the "
Financial Statements "): (i) the unaudited consolidated balance sheet as of September 30, 2015 of Sage Products Holdings III, LLC
and its Subsidiaries (the " Latest Balance Sheet, " and September 30, 2015, the " Reference Date ") and the related statements of
income and cash flows for the 9-month period then ended and (ii) the audited consolidated balance sheet as of December 31, 2014
(the " Latest Audited Balance Sheet ") and the related statements of income and cash flows for the 12-month period then ended of
Sage Products Holdings III, LLC and its Subsidiaries. The Financial Statements (A) are derived from and prepared in accordance
with the books and records of Sage Products Holdings III, LLC and its Subsidiaries, (B) have been prepared in accordance with
GAAP, consistently applied, and present fairly in all material respects the financial condition and results of operations of Sage
Products Holdings III, LLC and its Subsidiaries (taken as whole) as of the times and for the periods referred to therein, subject in the
case of the unaudited Financial Statements to (x) the absence of footnote disclosures and other presentation items and (y) changes
resulting from
normal year-end adjustments that are not material in amount or effect and (C) fairly present in all material respects the consolidated
financial condition of Sage Products Holdings III, LLC as of the dates therein indicated and the consolidated results of operations
and cash flows of Sage Products Holdings III, LLC for the periods therein specified. There are no material assets of the Company
other than the equity interests in Sage Products Holdings III, LLC, cash received in respect of the same, those typical of a holding
company (including, but not limited to, prepaid taxes and deferred tax assets) and the assets of Sage Products Holdings III, LLC and
its Subsidiaries, and as of the date hereof there are no Liabilities of the Company that would be required to be reflected or reserved
against on an unconsolidated balance sheet of the Company prepared in accordance with GAAP. None of the Company or its
Subsidiaries, or their respective officers and independent auditors, have identified or been made aware of any complaint, allegation,
deficiency, assertion or claim, whether written or oral, regarding the Financial Statements, or any balance sheets or statements of
income and cash flows prepared after the Latest Balance Sheet.
(b) The Company and its Subsidiaries maintain a system of internal accounting controls over financial reporting
that are adequate in providing reasonable assurance regarding the reliability of financial reporting, including policies and procedures
that are reasonably designed to ensure (i) that transactions are recorded as necessary to permit preparation of financial statements in
accordance with GAAP, (ii) that transactions are recorded accurately, and that receipts and expenditures of the Company and its
Subsidiaries are being made in accordance with appropriate authorizations of management, and (iii) prevention or timely detection
of unauthorized acquisition, use or disposition of assets of the Company and its Subsidiaries.As of the date hereof, neither the
Company nor any of its Subsidiaries has any material Liabilities, except for Liabilities (i) reflected or reserved against on the Latest
Balance Sheet (including any notes thereto), (ii) incurred after the date of the Latest Balance Sheet in the ordinary course of
business, (iii) as contemplated by this Agreement or otherwise arising in connection with the Transactions to the extent such
Liabilities are included in the computation of Closing Transaction Expenses, Closing Indebtedness, Closing Net Working Capital or
SmartMed Estimated 2016 Earnout Payment Amount or (iv) disclosed on Section 3.6(c) of the Disclosure Schedule.
Section 3.7 Absence of Certain Changes .
(a) From the Reference Date to the date hereof, (i) except in connection with the Transactions, the business of the
Company and its Subsidiaries has been conducted in all material respects in the ordinary course of business and (ii) there has not
been any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material
Adverse Effect.
(b) Except as expressly contemplated by this Agreement, from the Reference Date to the date hereof, neither the
Company nor its Subsidiaries has:
(i) issued, sold or granted any membership interests or other equity interests, or any securities or rights
convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for any of its membership interests or other equity interests, or any rights, warrants or
options to purchase any of its membership interests or other equity interests, or any securities or rights convertible into,
exchangeable or exercisable for, or evidencing the right to subscribe for, any of its membership interests or other equity
interests, except for transactions between or among the Company and its wholly owned Subsidiaries;
(ii) redeemed, purchased or otherwise acquired any of its outstanding membership interests or other equity
interests, or any rights, warrants or options to acquire any of its membership interests or other equity interests;
(iii) (A) declared, authorized, set aside for payment or paid any dividend on, or made any other distribution
in respect of, any of its membership interests or other equity interests, other than dividends paid by any Subsidiary of the
Company to the Company or any wholly owned Subsidiary of the Company or (B) adjusted, split, combined, subdivided or
reclassified any of its membership interests or other equity interests;
(iv) sold, leased, licensed, assigned or transferred any of its properties or assets, including any
Company Owned IP, that are material to the Company and its Subsidiaries taken as a whole, except (A) sales, leases and
rentals in the ordinary course of business, (B) dispositions of inventory, equipment or other assets that are no longer used or
useful in the conduct of the business of the Company or any of its Subsidiaries, (C) non-exclusive licenses granted by the
Company or any of its Subsidiaries pursuant to vendor, customer and other similar commercial agreements that grant rights
to third parties to Company Owned IP, in each case, in the ordinary course of business consistent with past practice or
(D) transfers among the Company and its Subsidiaries;
(v) made capital expenditures in excess of $1,000,000 in the aggregate for the Company and its
Subsidiaries taken as a whole during any consecutive three-month period, except (A) as budgeted in the Company's current
budget that was made available to Purchaser or (B) in the ordinary course of business;
(vi) made any acquisition (including by merger) of the capital stock or a material portion of the assets
of any other Person for consideration in excess of $1,000,000;
(vii) made any material loan to, or entered into any other material transaction with, any officers or
members of its board of directors (or managers) outside the ordinary course of business;
(viii) entered into any employment Contract with any of its directors (or managers) or executive
officers for payments exceeding $275,000 per year or any collective bargaining agreement, or modified the terms of any such
existing Contract;
(ix) increased in any material respect the compensation of any of its directors (or managers) or
executive officers, except (A) as required pursuant to applicable Law or the terms of Company Plans or other employee
benefit plans or
arrangements or (B) increases in salaries, wages and benefits of employees made in the ordinary course of business (
provided
that payments of bonuses and other grants and awards made in the ordinary course shall not constitute an increase in
compensation);
(x) amended the Company Charter Documents or Organizational Documents of any Subsidiary;
(xi) adopted a plan or agreement of complete or partial liquidation or dissolution;

(xii) incurred any material damage, destruction or other casualty loss with respect to any material
assets or property owned, leased or otherwise used by the Company or any of its Subsidiaries, whether or not covered by
insurance; or
(xiii) agreed in writing to take any of the foregoing actions.
Section 3.8 Legal Proceedings . There are no Actions pending or, to the Company's Knowledge, threatened against the
Company or any of its Subsidiaries, or, to the Company's Knowledge, any present or former officer, director or employee of the
Company or any of its Subsidiaries or any other Person for which the Company or any of its Subsidiaries would be liable if
determined adversely, at law or in equity, or before or by any Governmental Authority, which seek to enjoin or would reasonably be
expected to have the effect of preventing or making illegal the consummation of the Transactions, or, if determined adversely to the
Company or any of its Subsidiaries, would, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect or prevent or materially delay the consummation of the Transactions, and none of the Company or any of its
Subsidiaries is subject to any outstanding Order which is material to the Company and its Subsidiaries, taken as a whole, or which
would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Transactions.
Section 3.9 Compliance With Laws; Permits .
(a) The Company and its Subsidiaries are, and since the Prior Acquisition Date have been, in compliance with all
federal, state, local or foreign laws, statutes, ordinances, common law, codes and any rules, regulations, decrees, writs, arbitration
awards, judgments, injunctions and orders of Governmental Authorities (collectively, " Laws ") applicable to the Company or any
of its Subsidiaries in all material respects. The Company and each of its Subsidiaries hold, and are in compliance in all material
respects with, all material licenses, franchises, permits, certificates, approvals and authorizations from Governmental Authorities
required by Law for the conduct of their respective businesses as they are now being conducted (collectively, " Company Permits ")
(other than those under Environmental Laws and Regulatory Laws, which are governed exclusively by Section 3.12 and
Section 3.19 , respectively).
(b) None of the Company or its Subsidiaries or, to the Company's Knowledge, any stockholder, member, partner,
director, officer, employee, agent or Affiliate of any of the Company or its Subsidiaries is a Person that is, or is owned or controlled
by one or more Persons that are: (i) the target of any sanctions adopted, administered or enforced by the U.S. Department of the
Treasury's Office of Foreign Assets Control (" OFAC "), the U.S.
Department of State, the United Nations Security Council, the European Union, Her Majesty's Treasury, or any other relevant
sanctions authority (collectively, " Sanctions "), or (ii) located, organized or resident in a country or territory that is, or whose
government is, the subject of applicable Sanctions, including the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and
Syria. The Sellers will not, to the extent any such actions would violate any Sanctions, directly or indirectly, use the consideration
contemplated by this Agreement and received through the Transactions, or lend, contribute or otherwise make available such
consideration to any Person (A) to fund any activities or business of or with any Person, or in any country or territory, that, at the
time of such funding, is, or whose government is, the subject of Sanctions (as identified in the previous sentence), or (B) in any
other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Transactions,
whether as buyer, advisor, investor, or otherwise). To the Company's Knowledge, none of the Company nor any of its Subsidiaries
has, or since the Prior Acquisition Date has had, a customer or supplier relationship with or is a party to any Contract with any
person or entity that is: (1) on any sanctions list maintained by OFAC or any other relevant sanctions authority, including OFAC's
List of Specially Designated Nationals and Blocked persons; (2) owned or controlled or acting on behalf of a Person on any such
sanctions list; (3) otherwise the target of Sanctions; or (4) owned or controlled by, or acting on behalf of, one or more Persons that is
otherwise the target of Sanctions, in each case to the extent prohibited by applicable Law. There is no pending or, to the Company's
Knowledge, threatened Action against, or investigation by a Governmental Authority of, the Company or its Subsidiaries, nor is
there any Order imposed (or, to the Company's Knowledge, threatened to be imposed) upon the Company or its Subsidiaries by or
before any Governmental Authority relating to a violation of applicable Sanctions.
(c) Neither the Company nor any of its Subsidiaries is, or since the Prior Acquisition Date has been, in violation of
any applicable provision of: (i) the U.S. Foreign Corrupt Practices Act of 1977; (ii) the U.K. Bribery Act 2010; or (iii) any other
anti-corruption law applicable in a jurisdiction in which the Company or its Subsidiaries conducts or has conducted business
(collectively, the " Applicable Anti-Corruption Laws "). The Company and its Subsidiaries have instituted and maintain policies and
procedures reasonably designed to ensure that they conduct their respective businesses in compliance with the Applicable Anti-
Corruption Laws. Neither the Company, its Subsidiaries nor any of their respective officers, directors or employees, nor, to the
Company's Knowledge, any of their distributors, agents, stockholders, members or partners has, since the Prior Acquisition Date
and to the extent in violation of applicable Law, made, directly or indirectly, any payment, loan or gift (or any offer, promise or
authorization of any such payment, loan or gift) of any money or anything of value to or for the use of any Person under
circumstances in which any of them knows or has pursuant to the standard of care of any Applicable Anti-Corruption Laws
applicable in the given case reason to know that all or any portion of such money or thing of value has been offered, given or
promised, directly or indirectly, to said Person for the purpose of inducing the Person to do any act or make any decision in his or
her or its official capacity (including a decision to fail to perform his or her or its official function) or use his or her or its influence
with a Governmental Authority (or commercial enterprise under such Applicable Anti-Corruption Laws prohibiting commercial
bribery) thereof in order to affect any act or decision of such Governmental Authority or commercial enterprise or to assist either
party in obtaining or retaining the business of the Company or its Subsidiaries. The books and records utilized and relied upon by
the
Company and each of its Subsidiaries in connection with the operation of its business have, since the Prior Acquisition Date, been
maintained in compliance in all material respects with Applicable Anti-Corruption Laws and its corporate governance policies.
There is no pending or, to the Company's Knowledge, Action threatened against, or investigation by a Governmental Authority of,
the Company or its Subsidiaries, nor is there any Order imposed and in effect (or, to the Company's Knowledge, threatened to be
imposed) upon the Company or its Subsidiaries by or before any Governmental Authority relating to any violation of Applicable
Anti-Corruption Laws by the Company, its Subsidiaries or any of their respective Affiliates, directors, officers, or employees, nor,
to the Company's Knowledge, any of their distributors, agents, stockholders, members or partners.
(d) Since the Prior Acquisition Date, none of the Company or its Subsidiaries has intentionally or, to the
Company's Knowledge, otherwise violated the Arms Export Control Act (22 U.S.C. § 2778), the International Traffic in Arms
Regulation (22 C.F.R. §§ 120 et seq .), the Export Administration Regulations (15 C.F.R. §§ 730 et seq .), the International
Emergency Economic Powers Act, any applicable Laws and Orders promulgated under the authority of such statutes and any
applicable laws governing the export of data, goods or services to any non-U.S. jurisdiction (collectively, the " Export Control Laws
"), including applicable regulations of the U.S. Department of Commerce, the U.S. Department of State and OFAC. There is no
pending or, to the Company's Knowledge, threatened Action against, or investigation by a Governmental Authority of, the
Company or its Subsidiaries, nor is there any Order imposed and in effect (or, to the Company's Knowledge, threatened to be
imposed) upon the Company or its Subsidiaries by or before any Governmental Authority relating to any violation of Export
Control Laws.
(e) The operations of the Company and its Subsidiaries are and have been since the Prior Acquisition Date
conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, the applicable money laundering statutes of all jurisdictions, the applicable rules and
regulations thereunder and any applicable related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the " Money Laundering Laws ") and no Action by or before any Governmental Authority or
any arbitrator involving the Company or its Subsidiaries, with respect to the Money Laundering Laws is pending or, to the
Company's Knowledge, threatened.
Section 3.10 Tax Matters .
(a) Since the Prior Acquisition Date:
(i) Each of the Company and its Subsidiaries has timely filed, or has caused to be timely filed on its
behalf (taking into account any extension of time within which to file), all U.S. federal income Tax Returns and all other
material Tax Returns required to be filed by it.
(ii) All U.S. federal income Taxes and other material Taxes of the Company and its Subsidiaries
reflected on such Tax Returns have been timely paid (taking into account any extension of time within which to file).
(iii) No deficiency with respect to any material amount of Taxes has been proposed, asserted or
assessed in writing against the Company or any of its Subsidiaries that has not been settled, finally resolved, fully paid or
adequately reserved for in accordance with GAAP in the Latest Balance Sheet.
(iv) All material Taxes required to be withheld by the Company or any of its Subsidiaries in
connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third
party have been timely withheld, and such withheld Taxes have been timely paid to the appropriate Governmental Authority.
(v) No written claim has ever been made by any Governmental Authority in a jurisdiction in which the
Company or any of its Subsidiaries does not file Tax Returns that the Company or any of its Subsidiaries is or may be subject
to taxation by that jurisdiction.
(vi) The Company is, and has been, treated as a partnership or "disregarded entity" for U.S. federal and
all applicable state income tax purposes, and no election has been made to treat the Company as other than a partnership or
"disregarded entity" for U.S. federal or any applicable state income tax purposes.
(vii) Other than SPI Worldwide, Ltd., which at all times since its formation has been properly treated
as an "Interest Charge DISC" within the meaning of Section 992 of the Code and the Treasury Regulations promulgated
thereunder, each of the Company's Subsidiaries is, and has been at all times since each Subsidiary's formation, treated as a
"disregarded entity" for U.S. federal and all applicable state income tax purposes, and no election has ever been made to treat
any of such Company's Subsidiaries as other than a disregarded entity for U.S. federal or any applicable state income tax
purposes.
(b) There are no Liens for Taxes (other than Permitted Liens) upon any of the assets of the Company or any of its
Subsidiaries.
(c) No audit or other administrative or court proceedings are pending with any Governmental Authority with
respect to U.S. federal income Taxes or other material Taxes of the Company or any of its Subsidiaries.
(d) Neither the Company nor any of its Subsidiaries has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency beyond the date hereof.
(e) The Company has previously made available to Purchaser (i) true and correct copies of all income Tax Returns
filed by or on behalf of the Company and any of its Subsidiaries for all completed Tax years that began on or after the Prior
Acquisition Date, and (ii) all ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements, settlement
agreements, and other similar arrangements or agreements sent or received after the Prior Acquisition Date by the Company or any
of its Subsidiaries relating to Taxes.
(f) Neither the Company nor any of its Subsidiaries has requested outside of the ordinary course of business any
extension of time within which to file any income or other material Tax Return beyond the date hereof.
(g) There are no requests for rulings or determinations in respect of any Tax matter pending between the Company
or any of its Subsidiaries and any Governmental Authority.
(h) Neither the Company nor any of its Subsidiaries is a party to any "listed transaction" within the meaning of
Treasury Regulations Section 1.6011-4.
(i) Neither the Company nor any of its Subsidiaries is a party to any Tax sharing, allocation, indemnity or similar
arrangement pursuant to which it will have any obligation to make payments after the Closing (other than any such arrangements
that are customary (i) leases, (ii) credit agreements or (iii) other arrangements with customers or vendors, in each case of (i), (ii) and
(iii), where (A) such arrangements were entered into in the ordinary course of business and (B) Tax is not the principal subject
matter).
(j) Neither the Company nor any of its Subsidiaries has any material liability for the Taxes of another Person as a
transferee or successor, or by contract (other than any such arrangements that are customary (i) leases, (ii) credit agreements or (iii)
other arrangements with customers or vendors, in each case of (i), (ii) and (iii), where (A) such arrangements were entered into in
the ordinary course of business and (B) Tax is not the principal subject matter).
(k) Neither the Company nor any of its Subsidiaries will be required to include any item of income or exclude any
item of deduction from any Tax period ending after the Closing Date:
(i) as a result of (1) a change in accounting method for a Pre-Closing Tax Period, to include any adjustment
under Section 481(c) of the Code, (2) a "closing agreement" as described in Section 7121 of the Code executed before the
Closing, (3) an installment sale or open transaction disposition made before the Closing, or (4) any prepaid amount received
or deferred revenue accrued before the Closing; or
(ii) under any provision of state, local or foreign law that is similar to Section 3.10(k)(i) .
(l) To the extent required by applicable Tax Laws, all transactions since the Prior Acquisition Date to which the
Company or any of its Subsidiaries is a party have been conducted on the basis of arm's length terms, as defined by, and in material
compliance with, such applicable Tax Laws.
(m) Neither the Company nor any of its Subsidiaries has any Tax Return filing obligation or permanent
establishment (within the meaning of any applicable Law) in any country other than the country under the laws of which the
Company or such Subsidiary was created or organized.
Section 3.11 Employee Benefits Matters .
(a) Section 3.11(a) of the Disclosure Schedule contains a true and correct list of each Company Plan, including, by
country, each Company Plan maintained or contributed to by the Company and its Subsidiaries under the Laws or applicable custom
or rule of the relevant jurisdiction outside of the United States, other than any government sponsored pension, insurance or welfare
program (each, a " Foreign Plan "). Except for the Foreign Plans listed in Section 3.11(a)(1) of the Disclosure Schedule, the
Company has delivered or made available to Purchaser true and correct copies of: (i) each Company Plan (including all amendments
thereto); (ii) the three most recent annual reports on Form 5500 and all schedules thereto filed with respect to each Company Plan,
to the extent applicable; (iii) the most recent summary plan description, summary of material modifications and plan prospectus for
each Company Plan, to the extent applicable; (iv) each current trust agreement, insurance contract or policy, group annuity contract
and any other funding arrangement relating to any Company Plan, to the extent applicable; (v) the most recent actuarial report,
financial statement or valuation report, to the extent applicable; (vi) a current IRS favorable opinion or determination letter, to the
extent applicable; (vii) all material correspondence to or from any Governmental Authority relating to any Company Plan during the
prior three years; and (viii) all discrimination tests for each Company Plan for the three most recent plan years, to the extent
applicable.
(b) Section 3.11(b) of the Disclosure Schedule contains a true and correct list, as of the date hereof, of each
material written employment, consulting, retention, change in control, severance or termination agreement, arrangement or
understanding between the Company or its Subsidiaries and any individual current or former (if the Company or any of its
Subsidiaries has any material Liability thereunder that will survive the Closing) employee, officer or director of the Company or its
Subsidiaries (excluding any agreement, arrangement or understanding entered into by, or at the direction of, Purchaser or its
Affiliates).
(c) Except as would not reasonably be expected to have a Company Material Adverse Effect, each Company Plan
complies with its terms and with applicable Laws, including ERISA and the Code.
(d) With respect to the Company Plans, except as would not reasonably be expected to have a Company Material
Adverse Effect, (i) all contributions required to have been made by the Company or any of its Subsidiaries under the terms of such
Company Plan, any related insurance contract or any applicable Law have been timely made, (ii) there are no actions, suits or
claims pending or, to the Company's Knowledge, threatened that are material to the Company and its Subsidiaries taken as a whole
other than routine claims for benefits, including any audit or investigation by any Governmental Authority, and (iii) there have been
no "prohibited transactions" (as that term is defined in Section 406 of ERISA or Section 4975 of the Code) that would result in
material liability to the Company and its Subsidiaries. None of the Company Plans obligates the Company or its Subsidiaries to
provide a current or former employee (or any dependent thereof) any material life insurance or material medical or health benefits
after his or her termination of employment with the Company or any of its Subsidiaries, other than as required under Part 6 of
Subtitle B of Title I of ERISA, Section 4980B of the Code or any similar state or local Laws.
(e) Each Company Plan intended to be "qualified" within the meaning of Section 401(a) of the Code has either
received a currently effective determination letter from the IRS or may rely on an opinion letter issued by the IRS, and, to the
Company's Knowledge, no condition exists that would reasonably be expected to cause the revocation of such determination or
opinion letter.
(f) None of the Company Plans, and neither the Company nor any of its Subsidiaries has ever maintained or
had an obligation to contribute to (i) a "single employer plan" (as such term is defined in Section 4001(a)(15) of ERISA) subject to
Section 412 of the Code or Title IV of ERISA, (ii) a "multiple employer plan" or "multiple employer welfare arrangement" (as such
terms are defined in ERISA), (iii) a multiemployer plan (as such term is defined in ERISA) or (iv) a voluntary employees'
beneficiary association under Section 501(c)(9) of the Code. The Company and its Subsidiaries have not incurred and are not
reasonably expected to incur any material Controlled Group Liability from any entity other than the Company and its Subsidiaries.
(g) With respect to any Company Plan, there is no Action pending or, to the Company's Knowledge,
threatened with or by the IRS, the U.S. Department of Labor or any other Governmental Authority (other than routine claims for
benefits).
(h) With respect to the Company Plans, neither the execution and delivery of this Agreement nor the
consummation of the Transactions will (excluding any agreement, contract, arrangement or plan entered into by, or at the direction
of Purchaser or its Affiliates) (i) entitle any current or former employee, director or consultant of the Company or its Subsidiaries to
any payment or benefit (or result in the funding of any such payment or benefit) or result in any forgiveness of indebtedness with
respect to any such persons, in each case, from the Company or its Subsidiaries, (ii) increase the amount of any compensation,
equity award or other benefits otherwise payable by the Company or its Subsidiaries or (iii) result in the acceleration of the time of
payment, funding or vesting of any compensation, equity award or other benefits from the Company or its Subsidiaries except as
required under Section 411(d)(3) of the Code.
(i) Each Company Plan that is a "nonqualified deferred compensation plan" subject to Section 409A of the
Code has been documented and operated in material compliance with Section 409A of the Code and any proposed and formal
guidance under Section 409A of the Code. No amounts paid or payable (individually or collectively and whether in cash, capital
stock of the Company or other property) under any of the Company Plans or any other contract, agreement or arrangement with
respect to which the Company or its Subsidiaries may have any liability could fail to be deductible for U.S. federal income tax
purposes by virtue of Sections 280G of the Code on account of the Transactions; provided
, however
, that this Section 3.11(i) shall
not apply to any arrangements entered into at the direction of Purchaser or between Purchaser and its affiliates, on the one hand, and
any Person, on the other hand (" Purchaser Arrangements "), so that, for the avoidance of doubt, compliance with this
Section 3.11(i) shall be determined as if such Purchaser Arrangements had not been entered into. No Company Plan provides for
indemnification or a "gross up" payment for any Taxes due because of the imposition of any excise Tax on such a payment to the
individual pursuant to Sections 280G or 409A of the Code.
(j) With respect to each Foreign Plan, except as would not reasonably be expected to have a Company
Material Adverse Effect: (i) such Foreign Plan is in compliance with the applicable provisions of the Laws of each jurisdiction in
which such Foreign Plan is established; (ii) all contributions to, and payments from, such Foreign Plan which may have been
required to be made in accordance with the terms of such Foreign Plan, and, when applicable, the Laws of the jurisdiction in which
such Foreign Plan is maintained, have been timely made, and all such contributions to such Foreign Plan, and all payments under
such Foreign Plan, for any period ending before the Closing Date that are not yet, but will be, required to be made, are reflected as
an accrued liability on the applicable financial records and statements; (iii) the Company and its Subsidiaries have complied with all
applicable reporting and notice requirements, and such Foreign Plan has obtained from the Governmental Authority having
jurisdiction with respect to such Foreign Plan any required determinations, if any, that such Foreign Plan is in compliance with the
Laws of the relevant jurisdiction if such determinations are required in order to give effect to such Foreign Plan; (iv) such Foreign
Plan has been administered at all times in accordance with its terms and applicable Laws; (v) there are no pending investigations by
any Governmental Authority involving such Foreign Plan, and there are no pending claims (except for claims for benefits payable in
the normal operation of such Foreign Plan), suits or proceedings against such Foreign Plan or asserting any rights or claims to
benefits under such Foreign Plan; (vi) except as required by applicable Laws, no condition exists that would prevent the Company
and its Subsidiaries from terminating or amending any Foreign Plan at any time for any reason in accordance with the terms of each
such Foreign Plan without the payment of any fees, costs or expenses (other than payment of the benefit accrued on the applicable
balance sheet and any normal and reasonable expenses typically incurred in a termination event); and (vii) the consummation of the
contemplated transactions will not by itself create or otherwise result in any liability with respect to such Foreign Plan. No Foreign
Plan has unfunded liabilities that will not be offset by insurance or that are not fully accrued on the applicable financial statements.
(k) The Company and its Subsidiaries have timely made in all material respects the contributions required to
be made by them with respect to employees located outside the United States to any plan that is sponsored by or to which
contributions are mandated by a Governmental Authority.
Section 3.12 Environmental Matters . (a) Each of the Company and its Subsidiaries has at all times during the prior three
years been in material compliance with all applicable Environmental Laws, (b) each of the Company and its Subsidiaries holds and
is in material compliance with all Company Permits required under Environmental Laws for the operation of their respective
businesses, (c) there is no material suit or proceeding arising under Environmental Laws (including relating to or arising from the
Release, threatened Release or exposure to any Hazardous Material) that is pending or, to the Company's Knowledge, threatened,
against the Company or any of its Subsidiaries, (d) neither the Company nor any of its Subsidiaries has received during the prior
three years any written notice of, or is subject to, any order, settlement, indemnity, agreement, judgment, injunction or decree
involving material uncompleted, outstanding or unresolved liabilities or corrective or remedial obligations relating to or arising
under Environmental Laws (including relating to or arising from the Release, threatened Release or exposure to any Hazardous
Material), (e) no property (including soils, groundwater, surface water, buildings or structures) currently or formerly owned or
operated by
the Company or any Subsidiary has been contaminated with any Hazardous Material by the Company or any Subsidiary that would
reasonably be expected to require remediation or reporting by the Company or any Subsidiary in connection with any Environmental
Law, and (f) the Company has made available to Purchasers copies of all material environmental reports, studies, assessments, and
sampling data in its possession relating to the Company or any Subsidiary or any of their current or former properties or operations.
This Section 3.12 constitutes the sole and exclusive representation and warranty of the Company regarding matters arising under
Environmental Laws.
Section 3.13 Intellectual Property .
(a) Section 3.13(a) of the Disclosure Schedule sets forth a true and correct list of all Company Registered IP. For
each item of Company Registered IP, Section 3.13(a) of the Disclosure Schedule lists (A) the record owner of such item, and, if
different, the legal and beneficial owner(s) of such item, (B) the jurisdiction in which such item is issued, registered or pending, (C)
the issuance, registration or application date and number of such item (if available) and (D) in the case of domain names, the
applicable registrar and expiration date. The Trade Secrets included in the Company Owned IP that are material to the operation of
the business as currently conducted by the Company or one or more of its Subsidiaries have been documented in a written form that
is held by the Company or one or more of its Subsidiaries.
(b) Since the Prior Acquisition Date, all fees and filings with respect to the Company Registered IP have been
timely submitted to the relevant Governmental Authorities and Internet domain name registrars as required to maintain such
Company Registered IP in full force and effect. There are no annuities, payments, fees, responses to office actions or other filings
required to be made and having a due date with respect to any Company Registered IP within ninety days after the date of this
Agreement.
(c) The Company or one or more of its Subsidiaries (i) owns or (ii) has a valid right or license to all Company
Intellectual Property. The Company Intellectual Property is sufficient as of the date hereof and the Closing for the conduct of the
Company's and its Subsidiaries' respective businesses as currently conducted by the Company and its Subsidiaries, as applicable.
The Company and its Subsidiaries will own or possess sufficient rights to all Intellectual Property immediately following the
Closing that are used in or necessary to the operation of the Company's and its Subsidiaries' respective businesses as of the Closing.
(d) As of the date of this Agreement, neither the Company nor any of its Subsidiaries is a party to any:
(i) license of any Intellectual Property (whether granted by or to the Company or any of its
Subsidiaries), which license involves payments (by or to the Company or any of its Subsidiaries) in excess of $1,000,000 per
annum; or
(ii) agreement pursuant to which the Company or any of its Subsidiaries has granted or is required to
grant any third party the right to bring infringement or otherwise enforce rights with respect to Company Owned IP.
(e) Since the Prior Acquisition Date, neither the Company nor any of its Subsidiaries has knowingly permitted any
Company Owned IP that is or was material to the operation of the business of the Company or any of its Subsidiaries (i) to enter the
public domain, or (ii) with respect to any Company Registered IP to lapse (other than through the expiration of the maximum
statutory term for such Company Registered IP or as a result of a grant refusal communication or a registration refusal
communication issued by a Governmental Authority).
(f) The Company or one or more of its Subsidiaries owns and has good and exclusive title to each item of Company
Owned IP, free and clear of all Liens other than non‑exclusive licenses granted in the ordinary course of business. Title in all the
Company Owned IP is in the name of the Company or one or more of its Subsidiaries, and title in all the Company Registered IP is
properly recorded in the name of the Company or one or more of its Subsidiaries, as applicable.
(g) Section 3.13(g) of the Disclosure Schedule sets forth a true and correct list of the Intellectual Property
Agreements that involve payments (by or to the Company or any of its Subsidiaries) in excess of $1,000,000 per annum, including
the date, title and parties for each agreement. Section 3.13(g) of the Disclosure Schedule identifies under separate headings those
Intellectual Property Agreements that (i) involve payments (by or to the Company or any of its Subsidiaries) in excess of
$1,000,000 per annum (A) under which rights in Company Licensed IP are licensed or otherwise made available to the Company or
one or more of its Subsidiaries, including identification of the Company Licensed IP that relates to such agreements, (B) under
which the Company or any of its Subsidiaries is the licensor, (C) that restrict the use, transfer, delivery or licensing of any
Company Owned IP, or (D) that relate to the Company's or any of its Subsidiaries' ownership of any Company Owned IP, or
(ii) constitute (A) a patent cross license or covenant not to assert or sue, (B) to the extent material to the Company or any of its
Subsidiaries, a trademark co-existence agreement, or (C) to the extent material to the Company or any of its Subsidiaries, any
similar agreement pursuant to which the Company or any of its Subsidiaries is obligated to forbear asserting any Company Owned
IP against any third party (which, for the avoidance of doubt, excludes any non-exclusive licenses granted in the ordinary course of
business). The right, license and interest of the Company or any of its Subsidiaries in and to all Company Licensed IP are free and
clear of all Liens other than non-exclusive sublicenses granted in the ordinary course of business (excluding restrictions contained in
the applicable license agreements with such third parties). All licenses granted to the Company or any of its Subsidiaries to use any
Company Licensed IP can be assigned or otherwise transferred to Purchaser at Closing.
(h) Since the Prior Acquisition Date, the Company, its Subsidiaries and their respective patent counsel have
complied with their duty of candor and disclosure and have made no material misrepresentations in the filings submitted to the
applicable Governmental Authorities with respect to all Patents included in the Company Registered IP. Since the Prior Acquisition
Date, neither the Company nor any of its Subsidiaries has been accused in writing of patent or copyright misuse or fraud or
inequitable conduct in connection with any Company Registered IP.
(i) Neither the execution and delivery or effectiveness of this Agreement nor the performance of the Company's
obligations under this Agreement will cause the forfeiture or termination of, or give rise to a right of forfeiture or termination of any
Company Intellectual Property, or impair the right of the Company or any of its Subsidiaries, or Purchaser or any of its Affiliates,
with respect to the conduct of the Company's and its Subsidiaries' respective businesses after the Closing, to use, possess, sell or
license any Company Owned IP or portion thereof or Company Licensed IP (in accordance with the applicable license agreements
with such third parties) except as would not reasonably be expected to be material to the Company or any of its Subsidiaries. After
the Closing, all Company Owned IP will be fully transferable, alienable or licensable by Purchaser without restriction and without
payment of any kind to any third party.
(j) None of the activities or businesses since the Prior Acquisition Date, including as currently conducted by the
Company or any of its Subsidiaries, infringes, misappropriates or otherwise violates any Intellectual Property of any third party.
Neither the Company nor any of its Subsidiaries is subject to any judgment from a court of law that materially restricts or impairs
the use of any Company Owned IP.
(k) There is not now and has not been during the prior three years a pending or, to the Company's Knowledge,
threatened written claim, suit or proceeding by any third party asserting the alleged infringement, misappropriation or violation of
any Intellectual Property of any Person by the Company or any of its Subsidiaries. During the prior three years, neither the
Company nor any of its Subsidiaries has received any written notice of any pending conflict with, or infringement, misappropriation
or violation of the rights of any Person with respect to any Intellectual Property or with respect to any license of any Company
Intellectual Property.
(l) There is not now and has not been during the prior three years a pending, or, to the Company's Knowledge,
threatened written claim, suit or proceeding by any third party contesting the validity, ownership, enforceability or right of the
Company or any of its Subsidiaries to exercise any Company Owned IP, including in the nature of being offered a license or
covenant not to sue, and, to the Company's Knowledge, there is no reasonable basis for any such claim, suit or proceeding. During
the prior three years, neither the Company nor any of its Subsidiaries has received any written notice from any Person challenging
the validity, ownership, enforceability or right of the Company or any of its Subsidiaries to use any of the Company Intellectual
Property.
(m) Neither the Company nor any of its Subsidiaries will be, as a result of the execution and delivery or
effectiveness of this Agreement or the performance of the Company's obligations under this Agreement, in breach of any
contractual obligation under any Intellectual Property Agreement and the consummation of this Agreement or any transactions
contemplated by this Agreement will not cause the modification, cancellation, termination, suspension of, or acceleration of any
payments under any Intellectual Property Agreement, or give any third party to any Intellectual Property Agreement the right to do
any of the foregoing, that would reasonably be expected to be material to the Company or any of its Subsidiaries. Immediately
following the Closing, Purchaser will be permitted to exercise all of the Company's and its Subsidiaries' rights under the Intellectual
Property Agreements to the same extent the Company and its Subsidiaries would have been able to, as applicable, had this
Agreement or any
Transactions not occurred and without payment of any additional amounts or consideration other than ongoing fees, royalties or
payments which the Company or its Subsidiaries would otherwise be required to pay, except as would not reasonably be expected to
be material to the Company or any of its Subsidiaries. None of the Intellectual Property Agreements grants any third party exclusive
rights to or under any Company Intellectual Property.
(n) To the Company's Knowledge, there is no unauthorized use, unauthorized disclosure, infringement,
misappropriation or violation of any Company Owned IP by any Person, including any employee or former employee of the
Company or any of its Subsidiaries. During the prior three years, neither the Company nor any of its Subsidiaries has brought any
action for infringement or misappropriation of any Company Intellectual Property or breach of any Intellectual Property Agreement.
During the prior three years, neither the Company nor its Subsidiaries has asserted rights in any of the Company Intellectual
Property against any Person in any cease and desist letter or other notice, including in the nature of offering a license or covenant
not to sue.
(o) The Company and each of its Subsidiaries have secured in writing from all of their employees, consultants
and independent contractors who independently or jointly contributed to the conception, reduction to practice, creation or
development of any material Company Owned IP, unencumbered and unrestricted exclusive ownership of all such employee's,
consultant's or independent contractor's, as applicable, Intellectual Property in such contribution that the Company or its
Subsidiaries does not already own by operation of Law and such employee, consultant or independent contractor, as applicable, has
not retained any rights or licenses with respect thereto. To the Company's Knowledge, no employee of the Company or any of its
Subsidiaries has entered into any Contract that conflicts in any material respect with the work for which the employee has been
engaged by the Company or any of its Subsidiaries, as applicable, or requires the employee to transfer, assign or disclose
information concerning his or her work for the Company or any of its Subsidiaries to anyone other than the Company or one of its
Subsidiaries, as applicable. With respect to inventions made by the Company or its Subsidiaries that have not yet been incorporated
into patent applications or provisional applications, and for which the Company intends to submit a patent application or provisional
application, neither the Company nor its Subsidiaries has taken any other action that jeopardizes the Company's or its Subsidiaries'
right to properly and timely file patent applications to cover such inventions, such that the Company or its Subsidiaries would be
prevented from obtaining valid Patents to cover such inventions.
(p) To the Company's Knowledge, no current or former employee, consultant or independent contractor of the
Company or any of its Subsidiaries is in material violation of (i) any obligation relating to invention disclosure, invention
assignment or confidentiality with the Company or any of its Subsidiaries or (ii) any applicable fiduciary duty under any applicable
Laws for the benefit of any former employer of such employee, consultant or contractor, by virtue of such employee's, consultant's
or independent contractor's being employed by, or performing services for, the Company or any of its Subsidiaries or using Trade
Secrets or proprietary information of others for the benefit of the Company or any of its Subsidiaries without permission.
(q) Since the Prior Acquisition Date, the Company and each of its Subsidiaries have taken commercially
reasonable measures to protect and preserve the confidentiality of all Trade Secrets and Confidential Information included in the
Company Owned IP and, to the extent contractually obligated to do so, the Licensed Intellectual Property. All use, disclosure, or
appropriation of Trade Secrets or Confidential Information that is Company Owned IP (and, to the extent contractually required, the
Licensed Intellectual Property) to a third party has been pursuant to the terms of a written and enforceable Contract between the
Company or one or more of its Subsidiaries, as applicable, and such third party. All current and former employees, consultants and
independent contractors of the Company and its Subsidiaries having access to Trade Secrets and Confidential Information that is
Company Owned IP (and, to the extent contractually required, the Licensed Intellectual Property) or proprietary information of any
of their customers or business partners have executed and delivered to the Company or one of its Subsidiaries a contract regarding
the protection of such Trade Secrets or Confidential Information or proprietary information to the extent required by such customers
and business partners.
(r) Since the Prior Acquisition Date, no item of Company Registered IP has been held to be invalid or
unenforceable in a court decision that is unappealed or unappealable by the Company. The Company Owned IP is subsisting (or in
the case of applications, applied for) and, to the Company's Knowledge, valid and enforceable.
(s) No issued Patents or pending patent applications that are Company Owned IP have been during the prior
three years, or are now involved in, any interference, reissue, reexamination, opposition, inter
partes
review, covered business
method review, post-grant review, or other post-grant proceeding. No Trademark that is Company Owned IP has been or is now
involved in any opposition, invalidation, cancellation or other administrative proceeding. Neither the Company nor any of its
Subsidiaries is undertaking, or contemplating the undertaking of, any interference, reissue, reexamination, opposition, inter
partes
review, covered business method review, post-grant review, invalidation, cancellation or other administrative proceeding with
respect to Intellectual Property of any third party.
(t) Neither the Company nor its Subsidiaries has (i) entered into any agreement granting any Person the right
to bring infringement actions or otherwise enforce rights with respect to any Company Owned IP or (ii) granted a covenant not to
sue under any Company Owned IP.
(u) No government funding, facilities or resources of a university, college, other educational institution or
research center was used in any material respect in the development of any aspect of Company Owned IP and no Governmental
Authority, university, college, other educational institution or research center has any claim or right in or to the Company Owned
IP. No rights have been granted to any Governmental Authority with respect to any services or products, or under any Company
Intellectual Property, other than the same standard commercial rights as are granted by the Company or one or more of its
Subsidiaries to commercial end users of the Company's and its Subsidiaries' services and products in the ordinary course of business
consistent with past practices.
(v) Neither the Company nor any of its Subsidiaries is now, or has ever been since the Prior Acquisition Date,
a member or promoter of, or contributor to, any industry standards body or any similar organization that would reasonably be
expected to require or obligate the Company or any of its Subsidiaries to grant or offer to any other Person any license or right to
any Company Owned IP.
(w) To the Company's Knowledge, no Product is subject to any "copyleft" or other obligation or condition
(such as under the GNU Public License, Lesser GNU Public License, or Mozilla Public License) that requires, or conditions the use
or distribution of such Product on, (i) the disclosure, licensing, or distribution of any source code for any portion of such Product or
any other Company Owned IP, or (ii) the granting to licensees of the right to make derivative works or other modifications to such
Product or portions thereof.
Section 3.14 Property .
(a) As of the date hereof, the real property described in Section 3.14(a) of the Disclosure Schedule constitutes all of
the real property owned in fee simple by the Company and its Subsidiaries (the " Owned Real Property "). Either the Company or
one of its Subsidiaries: (i) has good, marketable and valid indefeasible fee simple title to all of the Owned Real Property, free and
clear of all Liens other than Permitted Liens; (ii) is in possession of the Owned Real Property and there are no leases, licenses or
occupancy agreements pursuant to which any third party is granted the right to use of the Owned Real Property other than reciprocal
easement agreements and other encumbrances on title to real property that do not materially detract from the use or operations of the
property subject thereto as currently used or operated; (iii) has adequate right of ingress and egress to the Owned Real Property; and
(iv) there are no outstanding options or rights of first refusal to purchase the Owned Real Property, or any portion of the Owned
Real Property or interest therein.
(b) As of the date hereof, the real property demised by the leases set forth in Section 3.14(b) of the Disclosure
Schedule (the " Leased Real Property ") constitutes all of the real property leased by the Company and its Subsidiaries. The Leased
Real Property leases are valid, legally binding, enforceable and in full force and effect, and the Company or a Subsidiary of the
Company holds a valid and existing leasehold interest under each such lease, subject to the Bankruptcy and Equity Exception. The
Company has delivered or made available to Purchaser true and correct copies of each of the leases described in Section 3.14(b) of
the Disclosure Schedule, and none of such leases has been modified in any material respect, except to the extent that such
modifications are disclosed by the copies delivered or made available to Purchaser. Neither the Company nor any of its Subsidiaries
is in breach of or default in any material respect under, or has received since the Prior Acquisition Date any written claim of or
default in any material respect under, any of such leases, and, to the Company's Knowledge, no counterparty to any such lease is in
default in any material respect under any such leases which has not been cured.
(c) As of the date hereof, the Company or one of its Subsidiaries owns good title to, or holds pursuant to valid and
enforceable leases, all of the personal property that they purport to own (other than immaterial personal property disposed of in the
ordinary course of business), free and clear of all Liens, except for Permitted Liens.
(d) To the Company's Knowledge, all buildings, structures, improvements, fixtures, machinery, building systems
and equipment, and all components thereof, included in the Owned Real Property and the Leased Property (the " Improvements ")
are in adequate condition and repair, normal wear and tear excepted, for the operation of the business of the Company and its
Subsidiaries as presently conducted. To the Company's Knowledge, there are no structural deficiencies affecting any of the
Improvements, and there are no facts or conditions affecting any of the Improvements which would, individually or in the
aggregate, interfere in any material respect with the use or occupancy of the Improvements or any portion thereof in the operation of
the business of the Company and its Subsidiaries as presently conducted.
Section 3.15 Material Contracts .
(a) As of the date hereof, neither the Company nor its Subsidiaries is party to or bound by, or are any of the assets
or properties of the Company or any of its Subsidiaries bound by, any (each, a " Material Contract "):
(i) collective bargaining agreement or Contract with any labor union;
(ii) Contract for the employment of any officer, individual employee or other person on a full-time or
consulting basis providing for base salary compensation in excess of $275,000 per annum, except for offer letters for at-will
employees that do not provide for severance in excess of the amounts due under the Company's severance practices;
(iii) Contract relating to Indebtedness in excess of $1,000,000, including the borrowing of money or
the issuing of any note, indenture or other evidence of indebtedness or to mortgaging, pledging or otherwise placing a Lien,
except for Permitted Liens, on any material asset of the Company or its Subsidiaries;
(iv) guaranty of any obligation for borrowed money or other material guaranty;
(v) Contract under which it is lessee of or holds or operates any real or personal property owned by any
other party for which the annual rental exceeds $500,000;
(vi) Contract or group of related Contracts under which it is lessor of or permits any third party to hold
or operate any property, real or personal, for which the annual rental exceeds $500,000;
(vii) Contract or group of related Contracts with the same party for the sale of products or services by
the Company or its Subsidiaries providing for payment to the Company or its Subsidiaries in excess of $3,000,000 during the
trailing 12-month period ending on the date of the Latest Balance Sheet other than purchase orders entered into in the
ordinary course of business;
(viii) Contract or group of related Contracts with the same party for the purchase of products or
services which provides for payments by the Company or its Subsidiaries in excess of $3,000,000 during the trailing 12-
month period ending on the date of the Latest Balance Sheet other than purchase orders entered into in the ordinary course of
business that do not materially deviate from the Company's or its Subsidiaries' historical practices;
(ix) Contracts relating to any completed material business acquisition by the Company or its
Subsidiaries within the three-year period ended on the date of this Agreement;
(x) License or royalty Contract relating to the use by a third party of Intellectual Property owned by the
Company for which the royalty payments exceeded $200,000 during the trailing 12-month period ending on the date of the
Latest Balance Sheet, other than customer Contracts set forth in Section 3.15(a)(vii) and purchase orders entered into in the
ordinary course of business;
(xi) Partnership, strategic alliance, joint venture agreement, joint development agreement,
collaboration agreement or similar arrangement;
(xii) Contract (A) (I) providing for payments in excess of $2,000,000 during the trailing 12-month
period ending on the date of the Latest Balance Sheet or (II) providing for payments of less than $2,000,000 during the
trailing 12-month period ending on the date of the Latest Balance Sheet (other than, in the case of clause (II), Contracts
(i) that are terminable at will or for convenience by the Company and/or its Subsidiaries party thereto on 90 or less days'
notice and without prepayment, penalty or other financial obligation or (ii) that would not be required to be listed under any
clause below other than clause (u), and where the restrictions in clause (u) below apply solely to one or more stockeeping
units (i.e., SKUs)) of the Company or one of its Subsidiaries and that (B) contains (u) a provision that provides any
counterparty with pricing, discounts or benefits that change based on the pricing, discounts or benefits offered to other
counterparties of the Company or any of its Subsidiaries, including a "most favored nation" or similar provision, (v) a grant
of the exclusive right to purchase or distribute any products or services of the Company or any of its Subsidiaries or, after the
Closing, any of their Affiliates, (w) an obligation requiring the Company or any of its Subsidiaries or, after the Closing, any
of their Affiliates, to purchase products or services exclusively from another Person, (x) any restriction on the ability of the
Company or any of its Subsidiaries or, after the Closing, any of their Affiliates, to compete in any line of business or any
geographic area or to own, operate, sell, license or transfer any material assets, (y) an obligation of any counterparty to
purchase Products from the Company or any of its Subsidiaries on a "sole," "dual" or "multi" exclusivity basis or (z) any
standstill or similar agreement pursuant to which the Company or any of its Subsidiaries agreed not to acquire the assets or
securities of another Person;
(xiii) Contract pursuant to which the Company or any of its Subsidiaries has a right or obligation to
purchase the securities or assets (other than inventory
purchased in the ordinary course of business) of another Person that would require a payment in excess of $1,000,000;
(xiv) Contract to which the Company or any of its Subsidiaries is a party, or by which any of them are
bound, the ultimate contracting party of which is a Governmental Authority (including any subcontract with a prime
contractor or other subcontractor who is a party to any such contract) that contemplates annual payments to or by the
Company and its Subsidiaries in excess of $500,000 per annum; and
(xv) Contract or group of related Contracts that contain continuing indemnification, guarantee, "earn-
out" or other contingent payment obligations, including rebate obligations, in each case that are reasonably expected to result
in cash payments, individually or in the aggregate, in excess of $500,000 in the 12 months following the date hereof.
(b) A true and correct copy of each Material Contract has been made available to Purchaser, together with all
amendments, waivers or other changes relating to each Material Contract. Each Material Contract is valid and binding on the
Company or one of its Subsidiaries to the extent the Company or such Subsidiary is a party thereto, as applicable, and to the
Company's Knowledge, each other party thereto, and is in full force and effect and enforceable in accordance with its terms (subject
to the Bankruptcy and Equity Exception), except where the failure to be valid, binding, enforceable and in full force and effect
would not be material to the Company and its Subsidiaries, taken as a whole. The Company and each of its Subsidiaries and, to the
Company's Knowledge, any other party thereto, is not in breach of or in default in any material respect under any Material Contract
and has performed in all material respects the obligations required to be performed by it under each Material Contract, and no event
has occurred that, with or without the lapse of time or giving of notice or both, would constitute a default thereunder by the
Company or one of its Subsidiaries, or to the Company's Knowledge, by any other party thereto, and no written notice alleging such
a default that is still outstanding has been delivered.
Section 3.16 Brokers and Other Advisors . No broker, investment banker, financial advisor, intermediary, finder or other
Person is entitled to any broker's, finder's or financial advisor's fee or other similar fee or commission, or the reimbursement of
expenses, directly or indirectly, in connection with the Transactions based upon arrangements made by or on behalf of the Company
or any of its Subsidiaries for which Purchaser, the Company or any of their respective Subsidiaries will be liable following the
Closing. The Company has made available to Purchaser true and correct copies of all agreements pursuant to which Barclays Capital
Inc. is entitled to any fees and expenses from the Company or its Subsidiaries in connection with the Transactions.
Section 3.17 Employees .
(a) The Company has made available to Purchaser a true and correct list of all employees of the Company and its
Subsidiaries as of January 1, 2016, along with, as of such date, position, date of hire, seniority, work location (including country of
employment), compensation and benefits, classification for wage and hour purposes, accrued but unused sick,
vacation or other leave (collectively, " PTO "), notice and severance requirements in the event of termination, visa or work permit
status and service credited for purposes of vesting and eligibility to participate under any benefit plan (the " Employee Census ").
The employment of each officer and employee of the Company and its Subsidiaries is terminable at the will of the Company or a
Subsidiary, as applicable.
(b) The Company has made available to Purchaser a true and correct list of all consultants and independent
contractors currently performing services for the Company or its Subsidiaries as of January 1, 2016 involving payments in excess of
$150,000 during the trailing 12-month period ending on the date of the Latest Balance Sheet, including, as of such date, the initial
date of engagement, location, a description of the remuneration arrangements applicable to each, a description of the services
provided and any termination related obligations (the " Non-Employee Service Provider Census ").
(c) The Company and its Subsidiaries have, during the prior three years, complied, in all material respects, with all
applicable Laws and its own policies and practices relating to labor and employment matters, including fair employment practices,
equal employment opportunity, terms and conditions of employment, consultation with employees, immigration, wages, hours, the
classification and use of independent contractors, social contributions and Taxes, compensation and benefits, workers'
compensation, classification, employee leaves, data protection, privacy, occupational safety and health, collective or mass layoffs
and plant closings. Neither the Company nor its Subsidiaries has (i) taken any action during the prior three years requiring notice to
employees under the Worker Adjustment Retraining Notification Act of 1988, as amended (the " WARN Act "), or any similar
state, local or foreign Law without complying with such Laws or (ii) incurred any liability under the WARN Act or any similar
state, local or foreign Laws that remains unsatisfied.
(d) (i) There is no labor strike, labor dispute, slowdown, stoppage or lockout pending or, to the Company's
Knowledge, threatened against the Company or its Subsidiaries, nor has there been any such action or event during the three years
prior to the date of this Agreement, (ii) the Company and its Subsidiaries are not a party to, bound by or in the process of
negotiating any labor, collective bargaining, works council or similar agreement, (iii) there are no unfair labor practices, material
actions or material grievances relating to any current or former employee or the classification and use of independent contractors of
the Company or its Subsidiaries (relating to their services for or relationship with the Company or its Subsidiaries) and (iv) none of
the employees of the Company or its Subsidiaries is or has been since the Prior Acquisition Date represented by any labor union,
works council or similar organization with respect to their employment with the Company or its Subsidiaries and, to the Company's
Knowledge, there are not, as of the date hereof, any union organizing activities with respect to employees of the Company or its
Subsidiaries.
(e) As of the date hereof, to the Company's Knowledge, no executive officer or other key employee of the
Company or its Subsidiaries (i) is subject to any non-compete, non-solicitation, non-disclosure, confidentiality, employment,
consulting or similar agreement with any other person affecting or in conflict with the present and proposed business activities of
the Company and its Subsidiaries, (ii) is in violation of any common law nondisclosure obligation or fiduciary duty relating to the
ability of such individual to work for the Company or
its Subsidiaries or the use of trade secrets and proprietary information or (iii) intends to terminate his or her employment with the
Company or its Subsidiaries.
Section 3.18 Insurance . Section 3.18 of the Disclosure Schedule lists all material insurance policies, risk funding
programs or other arrangements (whether any such policy, program or arrangement is maintained in whole or in part with a third
party insurer or with the Company or any of its Affiliates, including any captive insurance policies and self-insured arrangements)
maintained by or on behalf of the Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries is in material
default (with or without notice or lapse of time, or both) with respect to its obligations under any Insurance Policies and, to the
Company's Knowledge, each Insurance Policy is in full force and effect, and the Company and its Subsidiaries have not received
notice of cancellation, termination or reduction of coverage with respect to any Insurance Policies, and, to the Company's
Knowledge, no event has occurred that, with notice or the lapse of time, or both, would permit such cancellation, termination or
reduction of coverage under any such policy. There are no material claims by the Company or any of its Subsidiaries pending under
any Insurance Policies as to which coverage has been denied by the underwriters of such policies. The Company has made available
to Purchaser each Contract in effect as of the date hereof between the Company and/or one of its Subsidiaries, on the one hand, and
Raffles Insurance Limited and/or one of Raffles Insurance Limited's Subsidiaries, on the other hand.
Section 3.19 Regulatory Matters .
(a) None of the Company, its Subsidiaries or any of their directors or officers, or, to the Company's Knowledge,
their employees or agents have, since the Prior Acquisition Date, (i) been convicted of any crime, to the Company's Knowledge that
has resulted, or would reasonably be expected to result, in debarment, disqualification, suspension or exclusion from participation in
a Medicare, Medicaid, or any other federal or state healthcare program or debarred, disqualified, suspended or excluded from any
FDA program, (ii) been assessed a civil monetary penalty under Section 1128A of the Social Security Act, or any regulations
promulgated thereunder, or the federal Food, Drug, and Cosmetic Act, as amended (" FDCA "), or any regulations promulgated
thereunder, (iii) been party to a corporate integrity agreement with the OIG or a similar agreement with any other Governmental
Authority, (iv) been convicted of any felony or criminal offense relating to the delivery of any healthcare item or service or (v) been
listed on the excluded individuals list published by the OIG, FDA or GSA, nor is any such debarment, disqualification, suspension,
penalty or exclusion set forth in (i) through (v) above pending or, to the Company's Knowledge, threatened.
(b) The Products are being and have since the Prior Acquisition Date been developed, tested, manufactured,
packaged, labeled, distributed, promoted, stored, sold, marketed, imported and exported in compliance in all material respects with
all applicable Laws, including those regarding non-clinical testing, clinical research, establishment registration, drug and device
listing, good manufacturing practices, record-keeping, adverse event reporting, and reporting of corrections and removals. The
Company and its Subsidiaries are and have since the Prior Acquisition Date been in material compliance with all Laws, including,
but not limited to, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. § 1395nn), the federal
TRICARE statute (10 U.S.C. §§ 1071 et seq .), the
Program Fraud Civil Remedies Act of 1986 (31 U.S.C. §§ 3801 et seq .), the Civil Monetary Penalties Law (42 U.S.C. § 1320a‑7a),
the civil False Claims Act (31 U.S.C. §§ 3729 et seq .), the federal False Claims Law (42 U.S.C. § 1320a-7b(a)), the Health
Insurance Portability and Accountability Act of 1996 (42 U.S.C. §§ 1320d et seq .), as amended by the Health Information
Technology for Economic and Clinical Health Act (42 U.S.C. §§ 17921 et seq .), and regulations promulgated pursuant thereto, the
exclusion laws (42 U.S.C. § 1320a-7), the FDCA (21 U.S.C. §§ 301 et seq .) and its implementing regulations, the Federal Trade
Commission Act, the Medicare and Medicaid statutes (Title XVIII and Title XIX of the Social Security Act), those Laws referenced
in Section 3.19(l) , government pricing and price reporting obligations, including obligations arising under or with respect to the
Medicaid drug rebate program (including supplemental rebate agreements with states), Medicare Part B average sales price,
Medicare Part D discount program, federal supply schedule, 340B program, and federal ceiling price, and any comparable foreign
or state Laws (" Regulatory Laws ").
(c) The Company and its Subsidiaries have obtained all authorizations, approvals, registrations, clearances,
consents, qualifications, certifications, licenses, permits and other rights from the FDA and similar foreign Governmental
Authorities that are necessary for the development, testing, manufacturing, packaging, labeling, distribution, promotion, storage,
sale, marketing, import or export of the Products (the " Regulatory Permits "), and each of such Regulatory Permits is valid and in
full force and effect. The Company and its Subsidiaries have since the Prior Acquisition Date fulfilled and performed their
obligations under each Regulatory Permit in all material respects. There is no proceeding pending or, to the Company's Knowledge,
threatened that would result in the termination, revocation, suspension or the imposition of a restriction on any such Regulatory
Permit or the imposition of any fine, penalty or other sanction for violation of any such Regulatory Permit.
(d) Since the Prior Acquisition Date, neither the Company nor any Subsidiary has received or been subject to any
action, notice, warning, administrative proceeding, review or investigation by a Governmental Authority that alleges or asserts that
the Company or any Subsidiary has violated any applicable Regulatory Laws or which requires or seeks any adjustment,
modification or alteration in the Products or the Company's manufacturing or distribution processes or procedures, including any
FDA Form 483, FDA warning letter or untitled letter or any similar notices.
(e) Since the Prior Acquisition Date, neither the Company nor any Subsidiary has received (i) any notification of
any pending or, to the Company's Knowledge, threatened, action, suit, claim, investigation, proceeding or Order alleging potential
or actual non-compliance with any Regulatory Laws or (ii) to the Company's Knowledge, any correspondence, notice, or
communication from any Governmental Authority, or current or former officer, director, health care professional or employee
alleging or asserting noncompliance with Regulatory Laws.
(f) Since the date that is five years prior to the date hereof, neither the Company nor any Subsidiary has been
subject to a deferred prosecution agreement, non-prosecution agreement, consent decree, monitoring agreement, settlement
agreement or other similar agreement or order mandating or prohibiting future or past activities. Since the Prior Acquisition Date, to
the Company's Knowledge, no Person has filed or has threatened in writing
to file against the Company or any Subsidiary, any action, suit, claim, investigation, proceeding or Order under any federal or state
whistleblower statute or equivalent law in the applicable jurisdiction, including under the False Claims Act, 31 U.S.C.
§§ 3729‑3733.
(g) Since the Prior Acquisition Date, no Product has been seized, withdrawn, recalled, detained or subject to a
suspension of manufacturing. To the Company's Knowledge, there are no proceedings in the United States or any other jurisdiction
seeking (i) the seizure, denial, withdrawal, recall, detention, field notification, field correction, safety alert or suspension of
manufacturing relating to any Product, (ii) a change in the labeling or classification of any Product or (iii) a termination, seizure, or
suspension of the marketing or distribution of any Product are pending or threatened in writing against the Company or any
Subsidiary of the Company.
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(h) The current manufacturing operations conducted by the Company and Subsidiaries or, to the Company's
Knowledge, on behalf of the Company or Subsidiaries are being and, since the Prior Acquisition Date, have been conducted in
material compliance with applicable Regulatory Laws, including the provisions of FDA's current good manufacturing practice
regulations at 21 C.F.R. Parts 210-211 and 820 and similar federal, state, local or foreign requirements for the manufacture of the
Products.
(i) Since the Prior Acquisition Date, the Company and the Subsidiaries have timely filed all material reports,
statements, documents, registrations, filings, amendments, supplements and submissions required to be filed by them under
applicable Regulatory Laws. To the Company's Knowledge, (i) each such filing was true and correct in all material respects as of
the date of submission, or was corrected in or supplemented by a subsequent filing, and (ii) any material and legally necessary or
required updates, changes, corrections, amendments, supplements or modifications to such filings have been submitted to the
applicable Governmental Authority.
(j) The Company and its Subsidiaries have an effective health care compliance program designed to ensure
compliance with Regulatory Laws including the PhRMA Code on Interactions with Healthcare Professionals and the AdvaMed
Code of Ethics on Interactions with Health Care Professionals and that is consistent with the current U.S. Federal Sentencing
Guidelines standards for effective compliance programs and the Office of Inspector General Compliance Program Guidance for
Pharmaceutical Manufacturers (68 Fed. Reg. 23731, May 5, 2003). Without limiting the foregoing, the compliance program
includes a code of ethics or other similar written policy that governs all employees, contractors, and agents, including sales
representatives, who interact with health care professionals and hospital customers, and such individuals' interactions with their
health care professionals and hospital customers.
(k) Since the Prior Acquisition Date, neither the Company nor its Subsidiaries has engaged in any activity that is in
material violation of, or is cause for material civil penalties or mandatory or permissive exclusion under any Regulatory Law,
including the following: (i) knowingly and willfully making or causing to be made a false statement or representation of a material
fact in any application for any benefit or payment; (ii) knowingly and willfully making or causing to be made a false statement or
representation of a material fact
for use in determining rights to any benefit or payment; (iii) knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or kind (x) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in
whole or in part under any federal health care program; or (y) in return for purchasing, leasing, or ordering, or arranging, or
arranging for or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made
in whole or in part under any federal health care program; or (iv) knowingly and willfully offering or paying any remuneration
(including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to any person to induce such
Person (x) to refer an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part under a federal health care program; or (y) to purchase, lease, order or arrange for or
recommend purchasing, leasing or ordering any good, facility, service or item for which payment may be made in whole or in part
under a federal health care program unless such offer or payment fully complies with applicable statutory or regulatory safe harbors;
or any other activity that violates any Law relating to prohibiting fraudulent, abusive or unlawful practices connected in any way
with the provision of health care items or services or the billing for such items or services provided to a beneficiary of any federal
health care program.
(l) Since the Prior Acquisition Date, the Company and its Subsidiaries are and have at all times been in material
compliance with: (i) state Laws regulating, or requiring the disclosure to a state agency of, interactions between medical device
manufacturers or related entities and healthcare providers or other individuals and entities associated with the healthcare industry;
and (ii) the so-called federal sunshine or open payments law (42 U.S.C. § 1320a-7h). Such compliance includes current registration
and filings with appropriate federal and state agencies, as applicable. No Person for whom reporting is required under 42 U.S.C.
§ 1320a-7h or applicable regulations thereunder or a healthcare professional or entity otherwise subject to disclosure requirements
under any comparable state Laws has been, since the Prior Acquisition Date, is, or will become as a result of the Transactions, an
owner of, or a Person who has received or will receive or be entitled to receive any payment or other transfer of value from, Sellers.
Section 3.20 Affiliate Transactions . Section 3.20 of the Disclosure Schedule sets forth a list of (a) all material Contracts
between an officer, director, shareholder, partner, member or Affiliate of the Company, any of the Company's Subsidiaries or any
Seller, or any individual in such Person's immediate family, on the one hand, and the Company or any of its Subsidiaries (other than
(i) arising under or in connection with employment-related Contracts, Company Plans and confidentiality Contracts or other
Contracts incident to such Person's employment with the Company or any of its Subsidiaries, (ii) Contracts between the Company,
on the one hand, and one or more Subsidiaries of the Company, on the other, or (iii) Contracts between two or more of the
Company's Subsidiaries) and (b) any interest of an officer, director, shareholder, partner, member or Affiliate of the Company, any
of the Company's Subsidiaries or any Seller, or any individual in such Person's immediate family, in any material property used by
the Company or any of its Subsidiaries. Except for the Contracts set forth on Section 3.20 of the Disclosure Schedule, Contracts of
the types referenced in clauses (i), (ii) or (iii) above, this Agreement, Contracts required to be entered into pursuant to this
Agreement (including, for the
avoidance of doubt, Contracts entered into in connection with the Restructuring Transactions), and any arm's length Contracts with
any portfolio company of any Seller, at the Closing, none of the Company or any of its Subsidiaries shall be bound by any Contract
or any other arrangement of any kind whatsoever with, or have any Liability (including for any Indebtedness) to any of the Sellers or
their Affiliates.
Section 3.21 Products Liability . Since the Prior Acquisition Date, neither the Company nor any of its Subsidiaries has
received in writing a material claim for or based upon breach of product warranty or product specifications or any other similar
allegation of Liability resulting from the sale of products or the provision of services of the Company or any of its Subsidiaries. The
Products (including the features and functionality offered thereby) or services rendered by the Company or any of its Subsidiaries
comply in all material respects with all contractual requirements, covenants or express or implied warranties applicable thereto.
Section 3.22 Customers and Suppliers . Section 3.22 of the Disclosure Schedule sets forth a true and correct list of the 25
largest suppliers to and customers of the Company for the fiscal year ended December 31, 2015 (determined on the basis of the total
dollar amount of purchases or sales, as the case may be) showing the total dollar number of purchases from, or sales to, as the case
may be, each such supplier or customer during such period. Since January 1, 2015 through the date of this Agreement, no such
customer or supplier has notified the Company in writing that it intends to terminate, cancel or materially curtail (in a manner that
would be on the whole adverse to the Company) its business relationship with the Company.
Section 3.23 No Other Representations or Warranties . Except for the representations and warranties expressly made by
the Company in this Article III , and any representations and warranties expressly included in any certificate delivered by the
Company to Purchaser pursuant to Section 8.2(e) , neither the Company nor any other Person makes any representation or warranty
with respect to the Company or its Subsidiaries or their respective businesses, operations, assets, liabilities, condition (financial or
otherwise) or prospects, notwithstanding the delivery or disclosure to Purchaser or any of its Affiliates or Representatives of any
documentation, forecasts or other information with respect to any one or more of the foregoing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TG BLOCKER

TG Blocker represents and warrants to Purchaser that, except as disclosed in the applicable section or subsection of the
Disclosure Schedule:
Section 4.1 Organization, Standing and Organizational Power . TG Blocker is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority necessary
to own or lease all of its properties and assets and to carry on its business as it is now being conducted. TG Blocker has made
available to Purchaser true and correct copies of TG Blocker's certificates of incorporation and by-laws, each as amended to the date
hereof, and each as so delivered is in full force and effect.
(a) TG Blocker has all necessary organizational power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the Transactions. The execution and delivery of and performance by TG
Blocker under this Agreement have been duly authorized by all requisite corporate action and no other organizational action on the
part of TG Blocker is necessary to authorize the execution and delivery of and performance by TG Blocker under this Agreement.
This Agreement has been duly executed and delivered by TG Blocker and, assuming due authorization, execution and delivery of
this Agreement by the other Parties, constitutes a legal, valid and binding obligation of TG Blocker, enforceable against TG Blocker
in accordance with its terms, except that such enforceability may be limited by the Bankruptcy and Equity Exception.
(b) Neither the execution and delivery of this Agreement by TG Blocker, nor the consummation by TG Blocker of
the Transactions, nor compliance by TG Blocker with any of the terms or provisions hereof, shall (i) conflict with or violate any
provision of the TG Blocker Charter Documents, (ii) assuming that each of the consents, authorizations and approvals referred to in
Section 3.3 is obtained (and any condition precedent to any such consent, authorization or approval has been satisfied) and each of
the filings referred to in Section 3.3 is made and any applicable waiting periods referred to therein have expired, violate any Law
applicable to TG Blocker, or (iii) result in any breach of, or constitute a default (with or without notice or lapse of time, or both)
under, or give rise to any right of termination, amendment, acceleration or cancellation of, any Contract to which TG Blocker is a
party, or result in the creation of a Lien, other than any Permitted Lien, upon any of the properties or assets of TG Blocker, other
than, in the case of clauses (ii) and (iii), as would not have a material adverse effect on TG Blocker's ability to consummate the
Transactions.
Section 4.3 Subsidiaries . Except for the ownership of Company Units obtained pursuant to the Restructuring
Transactions (and the beneficial interests in the Company's Subsidiaries represented by such Company Units), as of immediately
prior to the Closing and after the consummation of the Restructuring Transactions, TG Blocker will not, directly or indirectly,
(a) own, of record or beneficially, any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for
any equity or similar interest in, or have any commitment or obligation to invest in, purchase any securities or obligations of, fund,
guarantee, contribute or maintain the capital of or otherwise financially support any Person, or (b) control any other Person. As of
immediately prior to the Closing and after the consummation of the Restructuring Transactions, TG Blocker will own all of the
Company Units set forth opposite TG Blocker's name on the Allocation Schedule (as determined pursuant to Section 2.1(a) ) free
and clear of all Liens (other than Permitted Liens and restrictions that may, following the Closing, be applicable on any subsequent
transfer by Purchaser under applicable securities laws or under the Company Charter Documents).
Section 4.4 Capitalization . The authorized capital stock of TG Blocker consists of 1,000 shares of common stock, par
value $0.01 per share, of which 1,000 Shares are issued and outstanding, all of which are held by TG. The Shares constitute all the
capital stock of TG Blocker. Other than this Agreement, there are no outstanding options, warrants, convertible or exchangeable
securities, "phantom" equity rights, equity appreciation rights, equity-based
performance units, other equity-based compensation awards, rights to subscribe to, rights in respect of exchange or conversion for,
redemption or purchase rights, calls or commitments made by TG Blocker relating to the issuance, purchase, sale or repurchase of
any shares of common stock or other equity interests issued by TG Blocker containing equity features, or contracts, commitments,
understandings or arrangements, by which TG Blocker is bound to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares or other equity interests, or options, warrants, rights to subscribe to, purchase rights, conversion or exchange rights,
calls or commitments made by TG Blocker relating to any shares or other equity interests of TG Blocker. There are no material
agreements or other obligations (contingent or otherwise) that require TG Blocker to repurchase or otherwise acquire any of TG
Blocker's equity securities that would survive the Closing. At the Closing, all of the issued and outstanding capital stock of TG
Blocker will be delivered to Purchaser, free and clear of any Liens except for such transfer restrictions of general applicability as
may be provided under the Securities Act and other applicable foreign and domestic securities Laws.
Section 4.5 Conduct of Business . TG Blocker is a holding company and was formed for the purpose of investing, directly
or indirectly, in the Company and, as of the date hereof, has never owned any material assets except for the equity interests of
Holdings, cash received in respect of the same and those typical of a holding company. As of immediately prior to Closing and after
the consummation of the Restructuring Transactions, TG Blocker will hold no material assets except for Company Units and those
typical of a holding company (including, but not limited to, prepaid taxes and deferred tax assets). Since formation, TG Blocker has
not engaged in any material business activities (other than those typical of a holding company), including those conducted by the
Company or any of its Subsidiaries, and has not directly owned any assets (other than the equity interests of Holdings and the
Company, cash received in respect of the same and those typical of a holding company (including, but not limited to, prepaid taxes
and deferred tax assets)). Except for liabilities incurred in connection with its incorporation, organization, maintenance and
capitalization or as set forth and described in Section 4.5 of the Disclosure Schedule, TG Blocker has not incurred and is not
presently liable for, directly or indirectly, any material liabilities (other than (i) with respect to non-delinquent Taxes incurred in the
ordinary course of business and (ii) those typical of a holding company).
Section 4.6 Tax Matters .
(a) Since the Prior Acquisition Date:

(i) TG Blocker has timely filed, or has caused to be timely filed on its behalf (taking into account any
extension of time within which to file), all U.S. federal income Tax Returns and all other material Tax Returns required to be
filed by it.
(ii) All U.S. federal income Taxes and other material Taxes of TG Blocker reflected on such Tax
Returns have been timely paid (taking into account any extension of time within which to file).
(iii) No deficiency with respect to any material amount of Taxes has been proposed, asserted or
assessed in writing against TG Blocker that has not been settled, finally resolved, fully paid or adequately reserved for.
(iv) All material Taxes required to be withheld by TG Blocker in connection with any amounts paid
or owing to any employee, independent contractor, creditor, stockholder or other third party have been timely withheld, and
such withheld Taxes have been timely paid to the appropriate Governmental Authority.
(v) No written claim has ever been made by any Governmental Authority in a jurisdiction in which
TG Blocker does not file Tax Returns that TG Blocker is or may be subject to taxation by that jurisdiction.
(vi) TG Blocker is, and has been, treated as a corporation for U.S. federal and all applicable state
income tax purposes.
(vii) TG Blocker is not and has not been a member of an affiliated group of corporations filing a
consolidated federal income Tax Return.
(b) There are no Liens for Taxes (other than Permitted Liens) upon any of the assets of TG Blocker.
(c) No audit or other administrative or court proceedings are pending with any Governmental Authority with
respect to U.S. federal Taxes or other material Taxes of TG Blocker.
(d) TG Blocker has not waived any statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency beyond the date hereof.
(e) TG Blocker has previously made available to Purchaser (i) true and correct copies of all income Tax Returns
filed by or on behalf of TG Blocker for all completed Tax years that fall after the Taxable year ended December 31, 2012, and
(ii) all ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements, settlement agreements, and other
similar arrangements or agreements sent or received after the Prior Acquisition Date by TG Blocker relating to Taxes.
(f) TG Blocker has not requested outside of the ordinary course of business any extension of time within which to
file any income or other material Tax Return beyond the date hereof.
(g) There are no requests for rulings or determinations in respect of any Tax matter pending between TG Blocker
and any Governmental Authority.
(h) TG Blocker is not a party to any "listed transaction" within the meaning of Treasury Regulations
Section 1.6011-4.
(i) TG Blocker is not a party to any tax sharing, allocation, indemnity or similar arrangements pursuant to which it
will have any obligation to make payments after the Closing.
(j) TG Blocker does not have any material liability for the Taxes of another Person as a transferee or successor, or
by contract.
(k) TG Blocker has not distributed stock of another Person, or had its stock distributed by another Person, in a
transaction within the two-year period ending on the date of this Agreement that was purported or intended to be governed in whole
or in part by Section 355 or 361 of the Code.
(l) To the extent required by applicable Tax Laws, all transactions to which the TG Blocker is a party have been
conducted on the basis of arm's length terms, as defined by, and in material compliance with, such applicable Tax Laws.
(m) TG Blocker will not be required to include any item of income or exclude any item of deduction from any Tax
period ending after the Closing Date:
(i) as a result of (1) a change in accounting method for a Pre-Closing Tax period, to include any adjustment
under Section 481(c) of the Code, (2) a "closing agreement" as described in Section 7121 of the Code executed before the
Closing, (3) an installment sale or open transaction disposition made before the Closing, or (4) any prepaid amount received
or deferred revenue accrued before the Closing; or
(ii) under any provision of state, local or foreign law that is similar to Section 4.6(m)(i) .
(n) TG Blocker does not have any Tax Return filing obligations or permanent establishment (within the meaning of
any applicable Laws) in any country other than the country under the laws of which TG Blocker was created or organized.
expenses, directly or indirectly, in connection with the Transactions based upon arrangements made by or on behalf of TG Blocker
for which Purchaser, the Company or any of their respective Subsidiaries will be liable following the Closing.
Section 4.8 Litigation . As of the date hereof, there are no Actions pending or, to TG Blocker or Thomas Glanzmann's
knowledge (in each case after reasonable inquiry), threatened against TG Blocker at law or in equity, or before or by any
Governmental Authority. As of the date hereof, TG Blocker is not subject to any outstanding Order.
TG Blocker in this Article IV , neither TG Blocker nor any other Person makes any representation or warranty with respect to TG
Blocker or its Subsidiaries or their respective businesses, operations, assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to Purchaser or any of its Affiliates or Representatives of any documentation,
forecasts or other information with respect to any one or more of the foregoing.
ARTICLE V
REPRESENTATIONS OF WARRANTIES OF THE SELLER
Each Seller, severally and not jointly, as to himself, herself or itself, as applicable, represents and warrants to Purchaser that,
except as disclosed in the applicable section or subsection of the Disclosure Schedule:
Section 5.1 Organization, Standing and Organizational Power . Such Seller is an individual or an entity duly organized
or formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite organizational power
and authority necessary to own or lease all of its properties and assets and to carry on its business as it is now being conducted.
(a) Such Seller has all right, power and authority to enter into and perform its obligations under this Agreement
and, if it is an entity, has all necessary organizational power and authority to execute, deliver and perform this Agreement and to
perform its obligations hereunder and to consummate the Transactions. The execution and delivery of and performance by such
Seller under this Agreement have been duly authorized by all requisite organizational action and no other organizational or
corporate action on the part of such Seller is necessary to authorize the execution and delivery of and performance by such Seller
under this Agreement. This Agreement has been duly executed and delivered by such Seller and, assuming due authorization,
execution and delivery of this Agreement by the other Parties, constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, except that such enforceability may be limited by the Bankruptcy and
Equity Exception.
(b) Neither the execution and delivery of this Agreement by such Seller, nor the consummation by such Seller of
the Transactions, nor compliance by such Seller with any of the terms or provisions hereof, shall (i) conflict with or violate any
provision of its certificate of incorporation, formation or limited partnership, as applicable, or by-laws, LLC agreement or LP
agreement, as applicable, (ii) assuming that each of the consents, authorizations and approvals referred to in Section 3.3 is obtained
(and any condition precedent to any such consent, authorization or approval has been satisfied) and each of the filings referred to in
Section 3.3 is made and any applicable waiting periods referred to therein have expired, violate any Law applicable to such Seller,
(iii) result in any breach of, or constitute a default (with or without notice or lapse of time or both) under, or give rise to any right of
termination, amendment, acceleration or cancellation of, any Contract to which such Seller is a party, or result in the creation of a
Lien, other than any Permitted Lien, upon any of the properties or assets of such Seller or (iv) result in any breach of, or constitute a
default (with or without notice or lapse of time or both) under, or give rise to any right of termination, amendment, acceleration or
cancellation of, the Call Option Agreement, other than, in the case of clauses (ii) and (iii), as would not, individually or in the
aggregate, reasonably be expected to prevent or materially delay or impair such Seller from consummating the Transactions.
Section 5.3 Ownership of Purchased Securities . As of immediately prior to the Closing, after the consummation of the
Restructuring Transactions, such Seller shall be the sole record and beneficial owner of, and have good title to, the Purchased
Securities set forth opposite such Seller's name on the Allocation Schedule (as determined pursuant to Section 2.1(a)) , free and clear
of all Liens, agreements, voting trusts, proxies or other arrangements or restrictions (other than transfer restrictions under the
Securities Act and other applicable foreign or domestic securities Laws) and shall transfer and deliver to Purchaser at the Closing
valid title to the Purchased Securities, free and clear of all Liens, agreements, voting trusts, proxies or other arrangements or
restrictions (other than transfer restrictions under the Securities Act and other applicable foreign or domestic securities Laws).
Except in connection with the Transactions, there are no preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments of any character under
which such Seller is or may become obligated to sell, or giving any Person a right to acquire, or in any way dispose of any of such
Seller's Purchased Securities or any securities or obligations exercisable or exchangeable for, or convertible into, such Seller's
Purchased Securities, or any "tag-along," "drag-along" or similar rights with respect to such Purchased Securities. Such Seller is not
a party to (a) any option, warrant, purchase right, right of first refusal, call, put or other contract (other than this Agreement) that
could require such Seller to sell, transfer or otherwise dispose of any Purchased Securities or (b) any voting trust, proxy or other
contract relating to the voting of any Purchased Securities. Prior to the earlier of the Closing and the termination of this Agreement
pursuant to Section 9.1 , such Seller shall not, other than as contemplated by this Agreement, directly or indirectly, (i) sell, convey,
transfer, pledge or otherwise encumber or dispose of any of the Purchased Securities held by such Seller or any interests therein,
except pursuant to this Agreement, (ii) deposit any such Purchased Securities into a voting trust or enter into a voting agreement or
arrangement with respect to any such Purchased Securities or (iii) enter into any Contract providing for the direct or indirect
acquisition or sale, assignment, transfer or other disposition of the Purchased Securities.
Section 5.4 Governmental Approvals . Except for the filings required under, and compliance with other applicable
requirements of, the HSR Act, no consents, permits, authorizations, or approvals of, or notices, filings, declarations or registrations
with, any Governmental Authority are necessary for the execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the Transactions, other than as would not, individually or in the aggregate, reasonably be
expected to prevent such Seller from consummating the Transactions.
expenses, directly or indirectly, in connection with the Transactions based upon arrangements made by or on behalf of such Seller
for which Purchaser, the Company or any of their respective Subsidiaries will be liable following the Closing.
Section 5.6 Litigation . As of the date hereof, there are no Actions pending or, to such Seller's knowledge, threatened
against such Seller at law or in equity, or before or by any Governmental Authority, which would, individually or in the aggregate,
reasonably be expected
to have a material adverse effect on such Seller's ability to consummate the Transactions. As of the date hereof, such Seller is not
subject to any outstanding Order that would, individually or in the aggregate, be expected to have a material adverse effect on such
Seller's ability to consummate the Transactions.
Section 5.7 Restructuring . Upon and following the consummation of the Restructuring Transactions, the Sellers will
hold, directly (and in the case of TG, indirectly), all the Company Units (other than those subject to the Call Option).
Section 5.8 Call Option Agreement . A true and correct copy of the Call Option Agreement has been made available to
Purchaser, together with all amendments, waivers or other changes relating to the Call Option Agreement. As of the date hereof, the
Call Option Agreement is valid and binding on MDP VI-C and VI-C Holdco, respectively, and is in full force and effect and
enforceable in accordance with its terms, and as of immediately prior to the Closing and after the consummation of the Restructuring
Transactions, the Call Option Agreement will be valid and binding on MDP VI-C and VI-C Holdco, respectively, and will be in full
force and effect and enforceable in accordance with its terms. MDP VI-C and VI-C Holdco are not in breach of or in default under
the Call Option Agreement, each has performed the obligations required to be performed by it under the Call Option Agreement and
no event has occurred that, with or without the lapse of time or giving of notice or both, would constitute a default, and no notice
alleging such a default has been delivered. The payment of the Call Option Exercise Price in accordance with the Call Option
Agreement is the only consideration required for Purchaser to exercise the Call Option and purchase the Company Units subject
thereto. After the exercise of the Call Option, the payment of the Call Option Exercise Price and acquisition of the Company Units
subject thereto, Purchaser shall have no continuing obligations, debts or liabilities to any Person in relation to the Call Option
Agreement. The representations and warranties in this Section 5.8 are made solely by MDP VI-C.
each Seller, severally and not jointly, as to himself, herself or itself, as applicable in this Article V and in the assignment agreement
to be entered into pursuant to Section 1.4(c) , neither such Seller nor any other Person makes any representation or warranty with
respect to such Seller or its Subsidiaries (if any) or their respective businesses, operations, assets, liabilities, condition (financial or
otherwise) or prospects, notwithstanding the delivery or disclosure to Purchaser or any of its Affiliates or Representatives of any
documentation, forecasts or other information with respect to any one or more of the foregoing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Sellers that:
Section 6.1 Organization, Standing and Organizational Power of Purchaser . Purchaser is a corporation duly
organized, validly existing and in good standing under the Laws of Delaware and has all requisite corporate power and authority
necessary to own or lease all of
its properties and assets and to carry on its business as it is now being conducted. Purchaser is a wholly owned Subsidiary of Parent.
(a) Purchaser has all necessary corporate power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions. The execution and delivery of and performance by Purchaser under this
Agreement, and the consummation by Purchaser of the Transactions, have been duly authorized and approved by all requisite
corporate action by Purchaser and no other corporate action on the part of Purchaser is necessary to authorize the execution and
delivery of and performance by Purchaser under this Agreement and the consummation by it of the Transactions. This Agreement
has been duly executed and delivered by Purchaser and, assuming due authorization, execution and delivery of this Agreement by
the other Parties, constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to the Bankruptcy and Equity Exception. No vote or approval of the holders of any class or series of capital stock of
Parent, Purchaser or their respective Subsidiaries is necessary to adopt this Agreement and approve the Transactions.
(b) Neither the execution and delivery of this Agreement by Purchaser, nor the consummation by Purchaser of the
Transactions, nor compliance by Purchaser with any of the terms or provisions hereof, shall (i) conflict with or violate any provision
of the certificate of incorporation and by-laws of Purchaser, or other organizational or governing documents of Purchaser or any of
its Subsidiaries, in each case as amended to the date of this Agreement, (ii) assuming that each of the consents, authorizations and
approvals referred to in Section 6.3 is obtained (and any condition precedent to any such consent, authorization or approval has been
satisfied) and each of the filings referred to in Section 6.3 is made and any applicable waiting periods referred to therein have
expired, violate any Law applicable to Purchaser or any of its Subsidiaries or (iii) result in any breach of, or constitute a default
(with or without notice or lapse of time or both) under, or give rise to any right of termination, amendment, acceleration or
cancellation of, any Contract to which Purchaser or any of its Subsidiaries is a party, except, in the case of clauses (ii) and (iii), as
would not reasonably be expected to have a Purchaser Material Adverse Effect.
Section 6.3 Governmental Approvals . Except for filings required under, and compliance with other applicable
requirements of, the HSR Act and any other Antitrust Laws, no consents, permits, authorizations or approvals of, or notices, filings,
declarations or registrations with, any Governmental Authority are necessary for the execution, delivery and performance of this
Agreement by Purchaser and the consummation by Purchaser of the Transactions, other than as would not reasonably be expected to
have a Purchaser Material Adverse Effect.
expenses, directly or indirectly, in connection with the Transactions based upon arrangements made by or on behalf of Purchaser or
any of its Subsidiaries for which the Company, its Subsidiaries or the Sellers would be liable.
Section 6.5 Sufficient Funds . As of the Closing, Purchaser shall have available sufficient cash, marketable securities,
available lines of credit or other sources of immediately available funds to pay all amounts payable by Purchaser pursuant to
Article I and Article II , and any other amounts incurred or otherwise payable by Purchaser or, following the Closing, the Company,
in connection with the Transactions, and there is no restriction on the use of such cash for such purposes. Purchaser acknowledges
and agrees that its obligations hereunder are not subject to any conditions regarding Purchaser's, its Affiliates' or any other Person's
ability to obtain any financing for the consummation of the Transactions.
Section 6.6 Legal Proceedings . As of the date hereof, there are no Actions pending or, to Purchaser's knowledge,
threatened against Purchaser at law or in equity, or before or by any Governmental Authority, which, if determined adversely to
Purchaser, would reasonably be expected to prevent or materially impede, interfere with, hinder or delay Purchaser's timely
performance under this Agreement or the consummation of the Transactions. As of the date hereof, Purchaser is not subject to any
outstanding judgment, order or decree of any Governmental Authority which would reasonably be expected to prevent or materially
impede, interfere with, hinder or delay Purchaser's timely performance under this Agreement or the consummation of the
Transactions.
Section 6.7 Investment Representation . Purchaser is acquiring the Purchased Securities for its own account with the
present intention of holding such securities for investment purposes and not with a view to, or for sale in connection with, any
distribution of such securities in violation of any federal or state securities Laws. Purchaser is an "accredited investor" as defined in
Regulation D promulgated by the Securities and Exchange Commission under the Securities Act. Purchaser acknowledges that the
Purchased Securities have not been registered under the Securities Act or any state or foreign securities Laws and that the Purchased
Securities may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale,
assignment, pledge, hypothecation or other disposition is registered under any applicable state or foreign securities Laws or sold
pursuant to an exemption from registration under the Securities Act and any applicable state or foreign securities Laws.
Purchaser in this Article VI and any representations and warranties expressly included in any certificate delivered by Purchaser to
the Company pursuant to Section 8.3(c) , neither Purchaser nor any other Person makes any representation or warranty with respect
to Purchaser and its business, operations, assets, liabilities, condition (financial or otherwise) or prospects.
ARTICLE VII
COVENANTS
Section 7.1 Conduct of Business .
(a) Except as required or expressly permitted by this Agreement (including the consummation of the Restructuring
Transactions), as required by applicable Law or as contemplated by Section 7.1(a) of the Disclosure Schedule, during the period
from the date of
this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with its terms, unless Purchaser
otherwise consents in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (i) the Company shall use
commercially reasonable efforts to, and shall cause its Subsidiaries to use commercially reasonable efforts to, (A) conduct their
respective businesses in all material respects in the ordinary course of business, (B) preserve intact their business organizations and
maintain, in all material respects, goodwill and existing relationships with material commercial counterparties and Governmental
Authorities and (C) not intentionally encourage or otherwise intentionally induce any Company Employee to terminate his or her
employment or adversely change his or her role at the Company or its Subsidiaries without cause; provided
that, the foregoing
notwithstanding, the Company and its Subsidiaries may (1) use all available Cash to repay any Indebtedness or make Cash
dividends or distributions prior to the Closing Date so long as such payments, dividends and distributions are reflected in the
estimation and calculation of the Cash Amount and (2) enter into and/or pay any bonus arrangements with employees of the
Company and its Subsidiaries so long as such bonuses are included in the estimation and calculation of the Net Working Capital
Amount or Transaction Expenses or paid prior to the Closing and reflected in the calculation of the Cash Amount, and (ii) without
limiting the generality of the foregoing, the Company shall not, and shall cause its Subsidiaries to not:
(i) transfer, issue, sell or grant any membership interests or other equity interests, or any securities or rights
convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any of its membership interests or
other equity interests, or any rights, warrants or options to purchase any of its membership interests or other equity interests,
or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any of its
membership interests or other equity interests, except for transactions among the Company and its wholly owned
Subsidiaries;
(ii) redeem, purchase or otherwise acquire any of its outstanding membership interests or other equity
interests, or any rights, warrants or options to acquire any of its membership interests or other equity interests, or otherwise
merge, consolidate, restructure, reorganize or liquidate;
(iii) (A) declare, authorize, set aside for payment or pay any dividend on, or make any other distribution in
respect of, any of its membership interests or other equity interests, other than dividends or distributions in cash or dividends
or distributions by any Subsidiary of the Company to the Company or any wholly owned Subsidiary of the Company or
(B) adjust, split, combine, subdivide or reclassify any of its membership interests or other equity interests;
(iv) sell, lease, license, assign, transfer, abandon, dedicate to the public, allow to lapse, or otherwise dispose
of (whether by merger, stock or asset sale or otherwise) any of its properties or assets (including any Company Owned IP)
that are material to the Company and its Subsidiaries taken as a whole, except (A) sales, leases and rentals in the ordinary
course of business, (B) pursuant to Contracts in force on the date of this Agreement, (C) dispositions of inventory, equipment
or other assets that are no longer used or useful in the conduct of the business of the Company or any of its
Subsidiaries, (D) non-exclusive licenses granted by the Company or any of its Subsidiaries pursuant to vendor, customer and
other similar commercial agreements that grant rights to third parties to Company Owned IP in the ordinary course of
business or (E) transfers among the Company and its wholly owned Subsidiaries;
(v) make capital expenditures in excess of $1,000,000 in the aggregate for the Company and its Subsidiaries
taken as a whole during any consecutive three-month period, except that the Company and its Subsidiaries shall make capital
expenditures (A) as budgeted in the Company's current budget made available to Purchaser and (B) pursuant to Contracts in
force on the date of this Agreement and made available to Purchaser;
(vi) make any acquisition (including by merger) of the capital stock or a material portion of the assets of any
other Person for consideration in excess of $1,000,000, except pursuant to Contracts, of which true and correct copies have
been made available, in force on the date of this Agreement;
(vii) increase in any material respect the compensation of any of its directors (or managers) or executive
officers whose compensation exceeds $275,000, except (A) as required pursuant to applicable Law or the terms of Company
Plans or other employee benefit plans or arrangements in effect on the date of this Agreement or as consistent with past
practice and (B) increases in salaries, wages and benefits of employees made in the ordinary course of business ( provided
that payments of bonuses and other grants and awards made in the ordinary course shall not constitute an increase in
compensation);
(viii) amend the Company Charter Documents or Organizational Documents of any Subsidiary;
(ix) adopt a plan or agreement of complete or partial liquidation or dissolution;
(x) create or incur any material Lien, other than a Permitted Lien or a Lien incurred in the ordinary course of
business;
(xi) incur any indebtedness for borrowed money or guarantee for such indebtedness of another Person, or
issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its
Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business, not to exceed
$1,000,000 in the aggregate, (B) indebtedness in replacement of existing indebtedness for borrowed money and, in the case
of indebtedness other than indebtedness that will be discharged at the Closing, on terms materially consistent with or more
beneficial than the indebtedness being replaced, (C) guarantees of indebtedness of wholly owned Subsidiaries of the
Company incurred in compliance with this Section 7.1 , and not to exceed $1,000,000 of notional debt in the aggregate and
(D) indebtedness incurred under the Company Loan Agreements;
(xii) enter into any Contract that would have been a Material Contract had it been entered into prior to this
Agreement or enter into any Contract to which a Health Care Professional or distributor with operations or assets outside of
the United States will be a party (each, an " HCP or International Distributor Contract "), or amend, modify or terminate any
Material Contract or any HCP or International Distributor Contract, or cancel, modify or waive any material debts or claims
held by it or waive any material rights; provided
: that the Company and its Subsidiaries may, in the ordinary course of
business, enter into a Contract that (A) would have been a Material Contract solely due to the fact that it would be required to
be disclosed on Section 3.15(a)(vii) or (viii) of the Disclosure Schedule had it been entered into prior to this Agreement (and
that would not be an HCP or International Distributor Contract); and (B) any Contract that is terminable at will or for
convenience by the Company and/or its Subsidiaries party thereto on 90 or less days' notice and without prepayment, penalty
or other financial obligation, in each case so long as the Company provides reasonably prompt prior notice thereof to
Purchaser;
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in
Laws or GAAP;
(xiv) except as required by changes in Laws, make or change any Tax election, enter into any "closing
agreement" as described in Section 7121 of the Code with respect to Taxes, settle any Tax claim, audit or assessment, change
any Tax accounting period, adopt or change any method of Tax accounting, amend any Tax Returns or consent to any
extension or waiver of the limitations period applicable to any Tax claim or assessment, in each case to the extent such action
would be reasonably expected to materially increase the Taxes of the Specified Entities for a Relevant Tax Period;
(xv) settle, or offer or propose to settle, any Action involving or against the Company or any of its
Subsidiaries, except (a) where the sum of (x) any amount paid by the Company and its Subsidiaries in settlement or
compromise, plus (y) the readily ascertainable and readily apparent financial impact to the Company and its Subsidiaries of
any other terms of the settlement or compromise does not exceed $1,000,000 and (b) where the terms of such settlement,
offer or proposal would not result in the imposition of any material restriction, constraint or other limitation on the
Company's ongoing business (after giving effect to any reasonably expected indemnification proceeds);
(xvi) fail to use commercially reasonable efforts to maintain all existing Insurance Policies in full force
and effect;
(xvii) fail to use commercially reasonable efforts to make any filing, pay any fee, or take any other
action necessary to prosecute and maintain in full force and effect, or to maintain the ownership, validity and enforceability
of any Company Registered IP that is material to the Company and its Subsidiaries taken as a whole; or
(xviii) agree in writing to take any of the foregoing actions.

Section 7.2 Ordinary Conduct of TG Blocker . Except as contemplated or permitted by this Agreement, as required by
applicable Law or as contemplated by Section 7.2 of the Disclosure Schedule, during the period from the date of this Agreement to
the earlier of the Closing and the date that this Agreement is terminated in accordance with its terms, the restrictions set forth in
Section 7.1 shall apply to TG Blocker, as applicable, mutatis
mutandis
.
Section 7.3 Exclusivity . Each of the Company, TG Blocker and each Seller agree that after the date hereof until the
earlier of the Closing or the termination of this Agreement in accordance with its terms, it shall not, and each of them shall cause
their respective Affiliates not to, directly or indirectly: (a) solicit, initiate, facilitate or encourage the submission of any Acquisition
Proposal; (b) participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, or
take any other action knowingly to facilitate or encourage any inquiries or the making of any proposal that constitutes, or could
reasonably be expected to lead to, any Acquisition Proposal; or (c) enter into any agreement with respect to any Acquisition
Proposal. Each Seller agrees that it shall not transfer or agree to transfer any of the Purchased Securities (or any Company Units
underlying the Purchased Securities) other than in accordance with the terms of this Agreement.
Section 7.4 Payoff Letters . The Company shall use commercially reasonable efforts to deliver to Purchaser at least one
Business Day prior to the Closing Date (and three Business Days prior to the Closing Date, drafts of) customary payoff letters from
the holders of Indebtedness set forth in Section 7.4 of the Disclosure Schedule (such holders, the " Payoff Persons "), and to make
arrangements for such holders of such Indebtedness to deliver to Purchaser, subject to the receipt of the applicable payoff amounts,
all related and executed Lien releases and related guarantee terminations at, and subject to the occurrence of, the Closing.
Section 7.5 Reasonable Best Efforts .
(a) Subject to the terms and conditions of this Agreement, each of the Company, Holdings, TG, each Seller and
Purchaser shall use its respective reasonable best efforts to (i) cause the Transactions to be consummated as soon as practicable,
(ii) make promptly any required submissions and filings under applicable Antitrust Laws with respect to the Transactions,
(iii) promptly furnish information required in connection with such submissions and filings under such Antitrust Laws, (iv) keep the
other parties reasonably informed with respect to the status of any such submissions and filings under Antitrust Laws, including
with respect to: (A) the receipt of any non-action, action, clearance, consent, approval or waiver, (B) the expiration of any waiting
period, (C) the commencement or proposed or threatened commencement of any investigation, litigation or administrative or
judicial action or proceeding under Antitrust Laws, and (D) the nature and status of any objections raised or proposed or threatened
to be raised under Antitrust Laws by any Governmental Authority with respect to the Transactions and (v) obtain all actions or non-
actions, approvals, consents, waivers, registrations, permits, authorizations and other confirmations from any Governmental
Authority or third party necessary, proper or advisable to consummate the Transactions as soon as practicable. For purposes hereof,
" Antitrust Laws " means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act and all other
applicable Laws issued by a Governmental Authority that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.
(b) In furtherance and not in limitation of the foregoing, but subject to Section 7.5(d) : (i) Purchaser, each Seller
and the Company agree to (A) make, or cause to be made, appropriate filings of Notification and Report Forms pursuant to the HSR
Act and any other required filings under any other Antitrust Laws with respect to the Transactions as soon as practicable (and, with
respect to filings under the HSR Act, within 13 Business Days after the date hereof (unless Purchaser and the Seller Representative
otherwise agree to a different date)), (B) supply as soon as practicable any additional information and documentary material that
may be requested pursuant to the HSR Act or any other Antitrust Law and (C) use its reasonable best efforts to take, or cause to be
taken, all other actions consistent with this Section 7.5 necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act and any other Antitrust Law (including any extensions thereof) as soon as practicable (and no later than
three Business Days prior to the Outside Date); and (ii) each party agrees to (A) supply as soon as practicable any additional
information and documentary material that may be required or requested by any Governmental Authority and (B) use its reasonable
best efforts to take or cause to be taken all other actions consistent with this Section 7.5 as necessary to obtain any necessary
approvals, consents, waivers, permits, authorizations or other actions or non-actions from each Governmental Authority as soon as
practicable. Purchaser shall be responsible for all filing fees under the HSR Act and other Antitrust Laws and any other Laws
applicable to Purchaser. The parties shall cause the filings under the HSR Act to be considered for grant of "early termination," and
shall request the equivalent under any other Antitrust Laws.
(c) Each Party shall: (i) promptly notify the other Parties of, and if in writing, furnish the others with copies of (or,
in the case of oral communications, advise the others of the contents of), any communication to such Person from a Governmental
Authority and permit the others to review and discuss in advance (and to consider in good faith any comments made by the others in
relation to) any proposed written communication to a Governmental Authority; (ii) keep the others reasonably informed of any
developments, meetings or discussions with any Governmental Authority in respect of any filing, investigation, or inquiry
concerning the Transactions; and (iii) not independently participate in any meeting or discussions with a Governmental Authority in
respect of any filing, investigation or inquiry concerning the Transactions without giving the other Parties prior notice of such
meeting or discussions and, unless prohibited by such Governmental Authority, the opportunity to attend or participate. However,
each of Purchaser and the Company may designate any non-public information provided to any Governmental Authority as
restricted to "Outside Antitrust Counsel" only and any such information shall not be shared with employees, officers, managers or
directors or their equivalents of the other Party without approval of the Party providing the non-public information.
(d) Notwithstanding anything in this Agreement to the contrary, neither the Purchaser nor any of its Affiliates shall
be required to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals and waivers
under Antitrust Laws that may be required by any Governmental Authority so as to enable the Parties to close the Transactions as
soon as practicable (and no later than three Business Days prior to the Outside Date), including committing to and effecting, by
consent decree, hold separate orders, trust, or
otherwise, (i) the sale, license, holding separate or other disposition of assets or businesses of Purchaser, any Affiliate of Purchaser,
the Company or any of its Subsidiaries, (ii) terminating, relinquishing, modifying or waiving existing relationships, ventures,
contractual rights, obligations or other arrangements of Purchaser, any Affiliate of Purchaser, the Company or any of its
Subsidiaries, (iii) creating any relationships, ventures, contractual rights, obligations or other arrangements of Purchaser, any
Affiliate of Purchaser, the Company or any of its Subsidiaries and (iv) any other action, including agreeing to future behavioral
remedies, requested by a Governmental Authority in order to achieve clearance under any Antitrust Law (each a " Remedial Action
"); provided
that Purchaser agrees, to the extent necessary to achieve clearance under applicable Antitrust Laws required pursuant to
this Agreement to consummate the Transactions, to agree to take any Remedial Action solely with respect to the Company and its
Subsidiaries (but, it being understood and agreed, not with respect to the Purchaser or any of its Affiliates) that, individually or in
the aggregate, would not reasonably be expected to have a material adverse effect on the financial condition, properties, assets,
liabilities, business or results of operations of the Company and its Subsidiaries (taken as a whole); provided
, however
, that
Purchaser can compel Sellers, the Company and the Company's Subsidiaries to take any of the actions referred to in this
Section 7.5(d ) (or agree to take any of such actions) if such actions are only effective after the Closing; and provided
further that:
(A) none of Sellers, the Company or any of the Company's Subsidiaries shall take any of the actions referred to in this Section 7.5(d
) (or agree to take any of such actions) without Purchaser's prior written consent; and (B) no Party nor any of their respective
Affiliates shall be required to agree to any term or take any action in connection with achieving clearance under applicable Antitrust
Laws required pursuant to this Agreement to consummate the Transactions unless such term or action does not take effect until after
the consummation of the Transactions.
(e) Nothing in this Section 7.5 imposes any obligation on any Party to extend the Agreement beyond the Outside
Date, or affects the right of either Purchaser or Seller to terminate pursuant to Section 9.1(b)(i) .
(f) Upon the reasonable request of Purchaser, the Sellers and the Company shall, and shall cause the Company's
Subsidiaries to, use reasonable best efforts to cooperate with Purchaser in connection with obtaining consents, approvals and other
authorizations of third parties to consummate the Transactions; provided
that the Company and its Subsidiaries shall not be required
to make any payments or incur any Liabilities in connection with the foregoing that are not either (i) reimbursed by Purchaser prior
to the Closing or (ii) payable after, and contingent on, the Closing; provided
further that neither the Company nor any of its
Subsidiaries shall make any payments or incur any Liabilities in connection therewith without the prior written consent of
Purchaser.
Section 7.6 Public Announcements . Purchaser, the Company and the Seller Representative shall mutually agree on the
initial press release or releases with respect to the execution of this Agreement. Following such initial press release, Purchaser, the
Company and the Seller Representative shall consult with each other before issuing, and give each other the opportunity to review
and comment upon, any press release or other public statement with respect to the Transactions and shall not issue any such press
release or make any such public statement prior to such consultation, except as such Party may reasonably conclude may be required
by applicable Law, court process or by obligations pursuant to any listing agreement
with any national securities exchange or national securities quotation system (and then only after prompt advance notice and
consultation to the extent feasible); provided
, however
, that the foregoing shall not preclude communications or disclosures
reasonably necessary to implement the provisions of this Agreement; provided
furthe r
that MDP and its Affiliates may (i) disclose
the subject matter of this Agreement, and on a confidential basis, financial return and other financial performance or statistical
information (not already publicly available or derived from publicly available information, in each case other than as a result of a
breach of MDP's or any of its Affiliates' confidentiality obligations) in connection with fundraising, marketing, informational or
reporting activities to current and potential equityholders or investors and (ii) to the extent MDP or any Affiliate or Representative
thereof is contacted by the press or any publication, it or they shall be permitted to confirm or correct its invested capital and internal
rate of return on invested capital with respect to the Transactions (and for the avoidance of doubt, provide financial return and other
financial performance or statistical information publicly available or derived from publicly available information, in each case other
than information disclosed as a result of a breach of MDP's or any of its Affiliates' confidentiality obligations); and provided
further
that the foregoing shall not limit the ability of Purchaser and its Affiliates to conduct customary investor and analyst calls concerning
the Transactions, to make internal announcements to their employees, and to make disclosures to potential sources of financing for
the Transactions and credit rating agencies, so long as the statements contained therein are not inconsistent in any material respect
with the prior public disclosures regarding the transactions contemplated hereby provided
further that the foregoing shall not limit
the ability of the Company to make internal announcements to its employees, so long as the statements contained therein are not
inconsistent in any material respect with the prior public disclosures regarding the Transactions. The Parties acknowledge and agree
that Purchaser (or any Affiliate thereof) may file this Agreement, including a summary thereof, with the U.S. Securities and
Exchange Commission.
Section 7.7 Access to Information; Contact with Employees, Customers and Suppliers; Confidentiality .
(a) Subject to Section 7.7(b) and applicable Laws relating to the exchange of information, from the date hereof
until the earlier of the Closing or the date on which this Agreement is terminated in accordance with its terms, the Company shall
afford to Purchaser and its Representatives reasonable access during normal business hours to the Company's and its Subsidiaries'
senior executives and other managerial level employees, properties, books, Contracts and records and the Company shall furnish
promptly to Purchaser such information concerning the Company's and its Subsidiaries' respective business and properties as
Purchaser may reasonably request; provided
that Purchaser and its Representatives shall conduct any such activities in such a
manner as not to interfere unreasonably with the business or operations of the Company or its Subsidiaries; provided
further, that
the Company and its Subsidiaries shall not be obligated to provide such access or information if the Company determines, in its
reasonable judgment, that doing so would violate applicable Law or a Contract or obligation of confidentiality owing to a third party
or jeopardize the protection of the attorney-client privilege ( provided
that the Company shall use commercially reasonable efforts
to make alternative arrangements to disclose such information that does not have the foregoing effects). Notwithstanding anything
to the contrary herein, no investigation pursuant to this Section 7.7 shall affect or be deemed to modify any representation or
warranty made by the Company.
Until the Closing, the information provided shall be subject to the terms of the Confidentiality Agreement.
(b) Prior to the Closing, Purchaser and its Representatives may only contact and communicate with the employees,
customers, payors, service providers, regulators and suppliers of the Company and its Subsidiaries related to the Transactions after
prior consultation with and written approval of the Seller Representative (which shall not be unreasonably withheld, conditioned or
delayed); provided
that the foregoing shall not prohibit Purchaser and its Affiliates from contacting employees, customers, payors,
service providers, regulators and suppliers of the Company and its Subsidiaries in the ordinary course of Purchaser's business so
long as such contact does not reference, interfere with or relate to the Transactions. Promptly after the date of this Agreement, the
Company and Purchaser will confer and reasonably cooperate to form a joint strategy in order for Purchaser and its Affiliates to
contact and communicate with, following the Closing, the employees, customers, payors, service providers, regulators and suppliers
of the Company and its Subsidiaries in connection with the Transactions.
(c) Following the Closing until the third anniversary of the date hereof, each Seller shall, and shall cause its
Affiliates that have received Confidential Information, directly or indirectly, from Seller (or, solely with respect to Confidential
Information received prior to Closing or after the Closing pursuant to Section 7.8 , from the Company or its Subsidiaries) to, keep
confidential all confidential and proprietary information of the Company, the Subsidiaries of the Company and the business of the
Company and its Subsidiaries (collectively, " Confidential Information "); provided
, however
, that (i) the foregoing obligation shall
not apply to any Confidential Information that (A) is or becomes available to the public (other than as a result of a breach of this
Section 7.7(c) by a Seller or one of the Sellers' Affiliates), or (B) is or becomes available to any Seller or its Affiliates on a non-
confidential basis from a source other than a Seller or the Company or any of their respective Affiliates, so long as such source is
not known by such Person (after reasonable inquiry) to be subject to another confidentiality obligation to the Company or its
Affiliates, (ii) nothing herein shall restrict Sellers or any of their Affiliates from disclosing (A) the subject matter of this Agreement
or financial return or other financial performance or statistical information as expressly contemplated by Section 7.6 , (B)
confirming or correcting its invested capital and internal rate of return on invested capital with respect to the Transactions as
expressly contemplated by Section 7.6 and/or (C) Confidential Information in connection with any dispute with Purchaser, the
Company or any of their Affiliates related to this Agreement and (iii) Sellers and any of their Affiliates may disclose Confidential
Information to the extent required by applicable Law or legal or administrative process; provided
that such Seller shall promptly
notify Purchaser (to the extent legally permissible) in advance of such disclosure so that Purchaser may seek, at Purchaser's sole
expense (and Seller will use commercially reasonable efforts to cooperate with Purchaser in seeking) a protective order or other
appropriate remedy in lieu of or with respect to such disclosure and/or waive compliance with this Section 7.7(c) , and to the extent
legally permissible, Seller will attempt to obtain, at Purchaser's sole expense, reliable assurance that confidential treatment will be
accorded to the information ultimately furnished. Notwithstanding any of the foregoing, Purchaser acknowledges that certain of
Sellers' Affiliates are, and certain of their Representatives and Affiliates may be, registered investment advisors or regulated
financial institutions and thus subject to routine examinations, investigations,
regulatory sweeps or other regulatory inquiries, and agree that such Persons and their Representatives and Affiliates shall not be
required to comply with the process described in clause (iii) of the preceding sentence of this Section 7.7(c) in respect of disclosures
made to a regulatory agency, self-regulatory organization, governmental agency or examiner thereof in the course of any such
routine examinations, investigations, sweeps or inquiries not specifically relating to the Company or any of its Subsidiaries or the
Transactions, and any such disclosure shall be permitted.
Section 7.8 Access to Books and Records . From and after the Closing, for a period of seven years, Purchaser shall, and
shall cause the Company to, provide the Seller Representative and its authorized Representatives with access, during normal
business hours and upon reasonable notice, solely for the purpose of complying with applicable Tax Laws or for a proper purpose to
the extent related to the Transactions or to the ownership of equity interests of one or more Sellers, to (i) the books and records (for
the purpose of examining and copying) of the Company and its Subsidiaries with respect to periods or occurrences prior to or on the
Closing Date and (ii) employees of Purchaser, the Company and their Affiliates for purposes of better understanding such books and
records; provided
that Seller and its authorized Representatives shall conduct any such activities in such a manner as not to
unreasonably interfere with the business or operations of the Company; provided
further, that Purchaser and the Company shall not
be obligated to provide such access or information if the Company determines, in its reasonable judgment, that doing so would
violate applicable Law or a Contract or obligation of confidentiality owing to a third party, or jeopardize the protection of the
attorney-client privilege ( provided
that the Company shall use commercially reasonable efforts to provide such access or
information in an alternative manner that does not have the foregoing effects). Unless otherwise consented to in writing by the Seller
Representative, Purchaser shall not, and shall not permit the Company or its Subsidiaries to, for a period of seven years following the
Closing Date, destroy, alter or otherwise dispose of any of the books and records of the Company or its Subsidiaries relating to Tax
matters or the Transactions or to the ownership of equity interests of one or more Sellers for any period prior to the Closing Date
without first giving reasonable prior written notice to the Seller Representative and offering to surrender to the Seller Representative
such books and records or any portion thereof that Purchaser or the Company may intend to destroy, alter or dispose of.
Section 7.9 Indemnification and Insurance .
(a) From and after the Closing for any D&O Claim made prior to the six-year anniversary of the Closing, Purchaser
shall, and shall cause the Company and TG Blocker, as applicable, to (i) indemnify, defend and hold harmless each current and
former member, manager, director and officer of TG Blocker, the Company and any of its Subsidiaries, as applicable, in each case,
when acting in such capacity (each, a " D&O Indemnitee " and, collectively, the " D&O Indemnitees ") against all claims, liabilities,
losses, damages, judgments, fines, penalties, costs (including amounts paid in settlement or compromise) and expenses (including
fees and expenses of legal counsel) in connection with any actual or threatened claim, suit, action, proceeding or investigation
(whether civil, criminal, administrative or investigative) (each, a " D&O Claim "), whenever asserted, arising out of, relating to or in
connection with any action or omission relating to their position with TG Blocker, the Company or its Subsidiaries, as applicable,
occurring or alleged to have occurred before or at the Closing
(including any D&O Claim relating in whole or in part to this Agreement or the Transactions), to the fullest extent permitted under
applicable Law and (ii) assume all obligations of TG Blocker, the Company and its Subsidiaries, as applicable, to the D&O
Indemnitees in respect of limitation of liability, exculpation, indemnification and advancement of expenses as provided in (A) the
Company Charter Documents or TG Blocker Charter Documents, as applicable, and the respective organizational documents of
each of the Company's Subsidiaries as in effect on the date hereof and (B) any indemnification agreements with a D&O Indemnitee
that have been provided to Purchaser prior to the date hereof and that are listed on the Disclosure Schedule, which shall in each case
survive the Transactions and continue in full force and effect to the extent permitted by applicable Law in accordance with the terms
thereof. Without limiting the foregoing, from and after the Closing for any D&O Claim made prior to the six-year anniversary of the
Closing, Purchaser shall ensure that (x) the Company fulfills its obligations to the applicable D&O Indemnitees pursuant to the
terms of the Company Charter Documents as in effect on the date hereof, and (y) TG Blocker fulfills its obligations to the applicable
D&O Indemnitees, pursuant to the terms of the TG Blocker Charter Documents as in effect on the date hereof.
(b) From and after the Closing for any D&O Claim made prior to the six-year anniversary of the Closing,
Purchaser shall, and shall cause the Company to, pay and advance to each D&O Indemnitee any expenses (including reasonable fees
and expenses of legal counsel) in connection with any D&O Claim relating to any acts or omissions of such D&O Indemnitee
covered under this Section 7.9 or the enforcement of a D&O Indemnitee's rights under this Section 7.9 as and when incurred to the
fullest extent permitted under applicable Law; provided
that the Person to whom expenses are advanced provides an undertaking to
repay such expenses (but only to the extent required by applicable Law, the TG Blocker Charter Documents, the Company Charter
Documents, applicable organization documents of the Subsidiaries of the Company or applicable indemnification agreements as in
effect on the date hereof).
(c) Notwithstanding anything to the contrary contained in this Section 7.9 or elsewhere in this Agreement,
Purchaser shall not (and Purchaser shall cause the Company and TG Blocker not to) settle or compromise or consent to the entry of
any judgment or otherwise seek termination with respect to any D&O Claim, unless such settlement, compromise, consent or
termination includes an unconditional release of all of the D&O Indemnitees covered by the claim, action, suit, proceeding or
investigation from all liability arising out of such claim, action, suit, proceeding or investigation. Nothing in this Section 7.9(c) shall
relieve Purchaser, TG Blocker or the Company of its obligations set forth in this Section 7.9 .
(d) At or prior to the Closing, the Company shall use commercially reasonable efforts to purchase a prepaid
directors' and officers' liability insurance policy or policies (" Tail Coverage ") with an insurer with the same or better credit rating
as the current carrier of the Company as of the date hereof that provides coverage for any D&O Claim made prior to the sixth
anniversary of the Closing with respect to the policies of directors' (or managers') and officers' liability and fiduciary liability
insurance in effect as of the date hereof maintained by the Company and its Subsidiaries covering matters arising on or before the
Closing. All costs and expenses related to the Tail Coverage shall be prepaid by the Company at or prior to the Closing and all
associated costs and expenses related to the Tail Coverage shall
be included in the calculation of Transaction Expenses; provided
, however
, that the Company shall not be required to pay more
than an amount equal to 300% of the last annual premium paid by the Company prior to the date hereof in respect of the coverages
required to be obtained pursuant to this Section 7.9(d) ; provided
further that if the cost of such insurance coverage exceeds such
amount, the Company shall only be required to obtain a policy with the greatest coverage available for a cost not exceeding such
amount.
(e) The provisions of this Section 7.9 are intended to be for the benefit of, and shall be enforceable by, each D&O
Indemnitee. The rights under this Section 7.9 shall be in addition to any rights such D&O Indemnitee may have under the
Organizational Documents of the Company or any of its Subsidiaries, or under any applicable Contracts (as in effect on the date
hereof) or Law.
(f) In the event that Purchaser, TG Blocker, the Company or any of their respective successors or assigns
(i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each
such case, proper provision shall be made so that the successors and assigns of Purchaser, TG Blocker and the Company shall
assume all of the obligations thereof set forth in this Section 7.9 .
(g) Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to
members', managers', directors' and officers' insurance claims under any policy that is or has been in existence with respect to the
Company, any of its Subsidiaries or any of their respective managers, directors or officers.
(h) Each of the Sellers and Purchaser acknowledge and agree that none of the Sellers or Purchaser and their
Affiliates shall make any claim against, or seek any indemnification from, any present or former director or officer of the Company
or any of the Company's Subsidiaries solely to the extent related to the execution of their duties as such up to the earlier of the
termination of their appointment and the Closing Date, or under, in connection with, arising out of, resulting from or in any way
related to this Agreement, the Transactions or the sales process leading up to the execution and delivery of this Agreement and the
Transactions.
Section 7.10 No Control of Other Party's Business . Nothing contained in this Agreement is intended to give Purchaser,
directly or indirectly, the right to control or direct TG Blocker's, the Company's or its Subsidiaries' operations prior to the Closing,
including, for the avoidance of doubt, for purposes of the HSR Act or any other applicable Antitrust Law.
Section 7.11 Employee Matters .
(a) Purchaser shall, or shall cause Parent, the Company and its Subsidiaries, as applicable, to, for the period
immediately following the Closing Date through and including the first anniversary of the Closing Date, provide any employee of
the Company and its Subsidiaries employed as of the Closing (the " Company Employees ") with (i) the same base salary and
annual target cash bonus opportunity as provided to the Company Employees as of
immediately prior to the Closing, and (ii) employee benefits that are substantially comparable in the aggregate to those provided to
the Company Employees immediately prior to Closing (excluding any defined benefit pension plan and any plan providing for
equity or equity-based compensation).
(b) From and after the Closing, Purchaser shall provide, or shall cause Parent, the Company and its Subsidiaries, as
applicable, to provide, each Company Employee full credit for purposes of determining eligibility to participate and vesting (but not
for purposes of benefit accrual) under any employee benefit plans, arrangements, collective agreements and employment-related
entitlements (excluding, for the avoidance of doubt, any equity or equity-related plans or awards or other incentive awards granted
after the Closing Date) provided, sponsored, maintained or contributed to by Parent or its Subsidiaries (collectively, the " Purchaser
Benefit Plans ") for which Company Employees may be otherwise eligible for such Company Employee's service with the
Company and its Subsidiaries, and with any predecessor employer, to the same extent recognized by the Company and its
Subsidiaries prior to the Closing, except to the extent such credit would result in the duplication of benefits for the same period of
service. To the extent commercially reasonable, Purchaser shall (i) waive, or cause to be waived, for each Company Employee and
his or her dependents, any waiting period provision, payment requirement to avoid a waiting period, pre-existing condition
limitation, actively at work requirement or any other restriction that would prevent immediate or full participation under Purchaser
Benefit Plans applicable to such Company Employee to the extent such waiting period, pre-existing condition limitation, actively at
work requirement or other restriction would not have been applicable to such Company Employee under the terms of the Company
Plans, (ii) waive, or cause to be waived, any and all evidence of insurability requirements with respect to such Company Employees
to the extent such evidence of insurability requirements were not applicable immediately prior to the Closing, and (iii) give, or cause
to be given, full credit under Purchaser Benefit Plans applicable to each Company Employee and his or her dependents for all co-
payments and deductibles satisfied prior to the Closing in the same plan year as the Closing, and for any lifetime maximums, as if
there had been a single continuous employer.
(c) Purchaser shall cause Parent, the Company and their respective Subsidiaries to recognize all accrued but unused
PTO for each Company Employee as of the Closing Date. Further, for the calendar year in which the Closing occurs, Purchaser
shall cause Parent, the Company and its Subsidiaries to credit each Company Employee with additional PTO in accordance with the
PTO policy applicable to such Company Employee immediately prior to the Closing Date.
(d) The provisions of this Section 7.11 shall not, and shall not be deemed to, constitute the adoption, amendment or
modification of any employee benefit plan, including the Company Plans, nor shall any provision hereof limit Purchaser's and its
Affiliates' and the Company's and its Subsidiaries' authority to terminate any employee at any time and for any reason.
(e) The provisions of this Section 7.11 are solely for the benefit of the Parties, and no Company Employee
(including any beneficiary or dependent thereof) or former employee or any participant or any beneficiary thereof in any Company
Plan or under the
employee benefit plans, programs and policies of Purchaser or its Affiliates shall be regarded as a third party beneficiary of this
Section 7.11 and no provision of this Section 7.11 shall create such rights in any such persons. Nothing herein shall (i) guarantee
employment for any period of time or preclude the ability of Purchaser or its Affiliates to terminate the employment of any
Company Employee at any time and for any reason; (ii) require Purchaser or its Affiliates to continue any Company Plans or other
employee benefit plans or arrangements or prevent the amendment, modification or termination thereof after the Closing Date; or
(iii) amend any Company Plans or other employee benefit plans or arrangements.
(f) At least 10 Business Days prior to the Closing, the Company shall provide Purchaser with an updated Employee
Census and an updated Non-Employee Service Provider Census.
Section 7.12 Land Purchase Agreement . Upon the written request of Purchaser prior to the Closing and following
delivery by Purchaser to the Company of $10,000, each at least three Business Days prior to the date on which each of the
"contingency period" or "extended contingency period" (but only if Purchaser has exercised its rights under this Section 7.12 with
regard to the initial "contingency period") under the Land Purchase Agreement would otherwise expire, the Company shall cause
Sage Products, LLC to (i) exercise any right that it has to extend the contingency period or extended contingency period then in
effect as provided for in and subject to the Land Purchase Agreement and (ii) provide Purchaser any information Purchaser
reasonably requests and the Company receives with respect to due diligence regarding the Land Purchase Agreement, in each case to
the extent permitted thereunder, so long as Sage Products, LLC has taken, or has caused the Company and its Subsidiaries to take,
commercially reasonable efforts to obtain a waiver with respect to any prohibition on furnishing or making available such
information to Purchaser.
Section 7.13 Termination of Related Party Agreements . Except as otherwise consented to in writing by Purchaser, each
Seller, TG Blocker and the Company shall, and shall cause their respective Affiliates to, take all actions necessary so that, at or prior
to the Closing, each Contract listed on Section 7.13 of the Disclosure Schedule between the Company or any of its Subsidiaries, on
the one hand, and any Seller or TG Blocker and their respective Affiliates, on the other hand, shall be terminated without further
liability of the Company or any of its Subsidiaries. In furtherance and not in limitation of the foregoing, at or prior to the Closing, GP
and Sage Products, LLC shall terminate the Management Services Agreement, dated December 13, 2012, by and between Sage
Products, LLC and GP.
Section 7.14 Restructuring Transactions .
(a) Subject to Section 7.14(b), prior to the Closing, the Sellers shall consummate, or shall cause to be
consummated, the Restructuring Transactions in accordance with the structure and steps set forth in Exhibit A and in compliance
with applicable Laws.
(b) From and following the date of this Agreement, the Sellers and their respective Representatives shall
consult with Purchaser and its Representatives and keep them reasonably informed with respect to each step in the implementation
and overall progress of the Restructuring Transactions and shall give Purchaser and its Representatives an adequate
opportunity and reasonable amount of time to review and reasonably comment on all agreements, understandings, arrangements and
other documents related to or connected with the Restructuring Transaction to which the Company, its Subsidiaries or TG Blocker
are a party and the Sellers shall not enter into any agreement to which the Company, any of its Subsidiaries or TG Blocker is a party
as part of the Restructuring Transactions on terms reasonably objected to by Purchaser.
Section 7.15 Call Option Agreement . During the period from the date of this Agreement until the earlier of the Closing
or the termination of this Agreement in accordance with its terms, Sellers shall not amend, supplement, modify or terminate the Call
Option Agreement (except pursuant to the assignment agreement referenced in Section 1.4(c) ).
ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation . The respective obligations of each Party hereto to consummate the
Transactions shall be subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Closing Date of
the following conditions:
(a) Regulatory Approvals . All waiting periods (and any extensions thereof) applicable to the Transactions under
the HSR Act shall have been terminated or shall have expired.
(b) No Injunctions or Restraints . No Law, injunction, judgment or ruling enacted, promulgated, issued, entered,
amended or enforced by any Governmental Authority (collectively, " Restraints ") shall be in effect enjoining, restraining,
preventing or prohibiting consummation of the Closing or making the consummation of the Closing illegal.
Section 8.2 Conditions to Obligations of Purchaser . The obligations of Purchaser to consummate the Transactions are
further subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties . (i) The representations and warranties of Sellers, TG Blocker and the
Company set forth in this Agreement (excluding the representations and warranties set forth in Section 3.1 , Section 3.2(a) ,
Section 3.5(a)(i) , Section 3.5(b)(i) , Section 4.1 , Section 4.2(a) , Section 4.4 , Section 5.1 , Section 5.2(a), Section 5.2(b)(iv) and
Section 5.3 (collectively, the " Fundamental Representations ") and those set forth in Section 3.7(a)(ii) ), disregarding all
qualifications and exceptions contained therein relating to materiality or Company Material Adverse Effect, shall be true and correct
as of the date of this Agreement and as of the Closing with the same effect as though made on and as of the Closing (except to the
extent that such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty
shall be true and correct as of such earlier date), except where the failure to be true and correct would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect; (ii) the Fundamental Representations, disregarding
all qualifications and exceptions contained therein relating to materiality or Company Material Adverse Effect, shall be true and
correct in all
material respects as of the date of this Agreement and as of the Closing with the same effect as though made on and as of the
Closing (except to the extent that such representation and warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct in all material respects as of such earlier date); and (iii) the representations and
warranties of the Company set forth in Section 3.7(a)(ii) shall have been true and correct in all respects as of the date of this
Agreement.
(b) Performance of Obligations . The Company, the Sellers and TG Blocker shall have performed and complied in
all material respects with all covenants and obligations required to be performed by them under this Agreement at or prior to the
Closing.
(c) Absence of Company Material Adverse Effect . Since the date of this Agreement through the Closing, there
shall not have occurred and be continuing an Effect that has had or would, individually or in the aggregate, reasonably be expected
to result in a Company Material Adverse Effect.
(d) Consummation of Restructuring Transactions . The Restructuring Transactions shall have been consummated
pursuant to the structure and steps as more particularly set forth in Exhibit A , in compliance with applicable Laws, without any
amendment, supplement, variation or other modification thereto, and Purchaser shall have received evidence of the completion of
the Restructuring and no amendment, supplement, variation or other modification shall have been made to the Call Option
Agreement.
(e) Officer's Certificate . The Company shall have delivered to Purchaser a certificate of the Company, dated as of
the Closing Date, stating that the conditions specified in Section 8.2(a) , Section 8.2(b) and Section 8.2(d) have been satisfied.
Section 8.3 Conditions to Obligations of the Sellers . The obligation of the Sellers to consummate the Transactions is
further subject to the satisfaction (or waiver, if permissible under applicable Law) on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties . The representations and warranties of Purchaser set forth in this Agreement,
disregarding all qualifications and exceptions contained therein relating to materiality or Purchaser Material Adverse Effect, shall be
true and correct as of the date of this Agreement and as of the Closing with the same effect as though made on and as of the Closing
(except to the extent that such representation and warranty expressly speaks as of an earlier date, in which case such representation
and warranty shall be true and correct as of such earlier date), except where the failure to be true and correct would not, individually
or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect.
(b) Performance of Obligations of Purchaser . Purchaser shall have performed and complied in all material
respects with all covenants and obligations required to be performed by it under this Agreement at or prior to the Closing.
(c) Officer's Certificate . Purchaser shall have delivered to the Company a certificate of Purchaser, dated as of the
Closing Date, stating that the conditions specified in Section 8.3(a) and Section 8.3(b) have been satisfied.
ARTICLE IX
TERMINATION
Section 9.1 Termination . This Agreement may be terminated and the Transactions abandoned at any time prior to the
Closing:
(a) by the mutual written consent of the Seller Representative and Purchaser;
(b) by either of the Seller Representative or Purchaser:
(i) if the Closing shall not have been consummated on or before July 29, 2016 (such date or the date to
which it is extended pursuant to Section 12.10 being the " Outside Date "); provided
, however
, that the right to terminate
this Agreement pursuant to this Section 9.1(b)(i) shall not be available to a party if the failure of the Closing to have been
consummated on or before the Outside Date was primarily due to the failure of such party to perform any of its obligations
under this Agreement; or
(ii) if any Restraint having the effect set forth in Section 8.1(b) shall be in effect and shall have become final
and non-appealable; provided
, however
, that the right to terminate this Agreement under this Section 9.1(b)(ii) shall not be
available to a party if the issuance of such final, non-appealable Restraint was primarily due to the failure of such party to
perform any of its obligations under this Agreement or if such party shall have failed to comply with its obligations under
Section 7.5 .
(c) by Purchaser if the Company, TG Blocker or the Sellers shall have breached or failed to perform any of such
Party's representations, warranties, covenants or agreements set forth in this Agreement, which breach or failure to perform
(A) would give rise to the failure of a condition set forth in Section 8.2(a) or Section 8.2(b) , respectively, and (B) cannot be cured
by the Outside Date or, if capable of being cured, shall not have been cured within 30 days following receipt of written notice from
Purchaser stating Purchaser's intention to terminate this Agreement pursuant to this Section 9.1(c) and the basis for such
termination; provided
that Purchaser shall not have the right to terminate this Agreement pursuant to this Section 9.1(c) if it is then
in material breach of any representation, warranty, covenant or other agreement hereunder; or
(d) by the Seller Representative if Purchaser shall have breached or failed to perform any of its representations,
warranties, covenants or agreements set forth in this Agreement, which breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 8.3(a) or Section 8.3(b) , respectively, and (B) cannot be cured by Purchaser by the Outside
Date or, if capable of being cured, shall not have been cured within 30 days following receipt of written notice from the Seller
Representative stating the Seller Representative's intention to terminate this Agreement pursuant to this Section 9.1(d) and the basis
for such termination; provided
that the Seller Representative shall not have the right to terminate this Agreement pursuant to this
Section 9.1(d) if it is then in material breach of any representation, warranty, covenant or other agreement hereunder; provided
further, that neither a breach by Purchaser of Section 6.5 nor the failure to deliver the Closing Purchase Price and
the other Closing payments pursuant to Article I at the Closing as required hereunder shall be subject to cure hereunder unless
otherwise agreed to in writing by the Company.
Section 9.2 Effect of Termination . In the event of the termination of this Agreement as provided in Section 9.1 , written
notice thereof shall be given to the other party or parties, specifying the provision hereof pursuant to which such termination is made,
and this Agreement shall forthwith become null and void and of no effect (other than this Section 9.2 and Article XII (other than
Section 12.10 ), all of which shall survive termination of this Agreement), and there shall be no liability on the part of Purchaser, the
Sellers, the Company, TG Blocker or the Seller Representative or their respective managers, directors, employees, officers and
Affiliates hereunder; provided
, however
, that no party shall be relieved or released from any liabilities or damages arising out of
any willful and material breach of this Agreement. For purposes of this Section 9.2 , "willful and material breach" means an
intentional and willful material breach, or an intentional and willful material failure to perform, in each case that is the consequence
of an act or omission by a party with the actual knowledge that the taking of such act or failure to take such act would cause a breach
of this Agreement. The Confidentiality Agreement shall survive the termination of this Agreement in accordance with its terms.
ARTICLE X
CERTAIN TAX MATTERS
Section 10.1 Responsibility for Filing Tax Returns .
(a) Following the Closing, the Seller Representative shall prepare or cause to be prepared and file or cause to be
filed all income Tax Returns for TG Blocker, the Company and its Subsidiaries for all Pre-Closing Tax Periods (other than a Pre-
Closing Tax Period consisting of a portion of a Straddle Period). TG shall provide any information requested by the Seller
Representative in connection with such Tax Returns for TG Blocker to the Seller Representative and shall reimburse the Seller
Representative for its costs and expenses in connection with preparing and filing such Tax Returns for TG Blocker. At least 30 days
prior to the due date for filing such Tax Returns (taking into account any extension of time within which to file), the Seller
Representative shall deliver drafts of any such Tax Returns to Purchaser. The Seller Representative shall cause such Tax Returns to
reflect any reasonable comments of Purchaser that are consistent with the past practice of the Company and its Subsidiaries and are
consistent with applicable Law and shall not file such Tax Returns if the filing thereof would be reasonably expected to materially
and adversely affect the Tax liability or Tax attributes of the Specified Entities for any Relevant Tax Period, without the prior
written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed). All Transaction Tax
Deductions shall be, to the extent allowable under applicable Law, claimed on the federal and state income Tax Returns of the
Company (or, as applicable, its Subsidiaries or TG Blocker) for the Pre-Closing Tax Period ending on the Closing Date and for this
purpose, the Parties agree that the Seller Representative shall be permitted to cause the Company to make the election for success-
based fees set forth in IRS Revenue Procedure 2011-29 with respect to such Tax Returns. The Seller Representative shall cause the
Company to make an election under Code Section 754 (and any corresponding state Tax elections) in connection with the income
Tax Return of the Company for the Tax period ending on the Closing Date. The Seller
Representative may assign its obligations under this Section 10.1(a) with respect to TG Blocker to TG or a Representative thereof.
(b) Following the Closing Date, Purchaser shall prepare or cause to be prepared and timely file or cause to be
timely filed all other Tax Returns for TG Blocker, the Company and its Subsidiaries for all Pre-Closing Tax Periods and Straddle
Periods. All such Tax Returns for any Pre-Closing Tax Period or Straddle Period shall be prepared consistent with the past practice
of TG Blocker, the Company and its Subsidiaries. If any such Tax Return relating to a Pre-Closing Tax Period or a Straddle Period
is with respect to income Taxes or shows amounts for which Sellers could be liable, at least 30 days prior to the due date for filing
such Tax Return, Purchaser shall deliver drafts to the Seller Representative of any such Tax Return. Purchaser shall cause such Tax
Returns to reflect any reasonable comments of the Seller Representative that are consistent with the past practice of TG Blocker, the
Company and its Subsidiaries and are consistent with applicable Law and shall not file such Tax Returns if the filing thereof would
be reasonably expected to materially and adversely affect the Tax liability or Tax attributes of the Sellers or their direct or indirect
owners without the prior written consent of the Seller Representative (such consent not to be unreasonably withheld, conditioned or
delayed).
(c) Purchaser shall not, and shall cause the Company and its Subsidiaries to not, take any action, or permit any
action to be taken, that may prevent the taxable year of the Company or its Subsidiaries from ending for federal and (to the extent
permitted under applicable Law) state or foreign income Tax purposes at the end of the day on which the Closing occurs and shall,
to the extent permitted by applicable Law, elect with the relevant taxing authority to treat for all income Tax purposes the Closing
Date as the last day of a taxable period of the Company and its Subsidiaries. The Parties intend that the purchase of the Shares be
structured in a manner that causes the Tax year of TG Blocker to end on the Closing Date for federal income Tax purposes and state
income Tax purposes, if applicable (and Purchaser shall take any and all actions reasonably necessary and permitted by applicable
Law to effectuate this result, including by including TG Blocker in its affiliated group for federal income Tax purposes and state
and foreign income Tax purposes, if applicable). The Parties agree that Purchaser and its Affiliates and TG Blocker shall not make
an election under Treasury Regulation Section 1.1502-76(b)(2)(ii)(D) to ratably allocate items (or make any equivalent election to
ratably allocate items under any corresponding provision of state, local or foreign Tax law).
Section 10.2 Filing and Amendment of Tax Return .
(a) Without the prior written consent of the Seller Representative (such consent not to be unreasonably withheld,
conditioned or delayed), Purchaser shall not, and shall cause the Company and its Subsidiaries to not: (i) amend any Tax Return
relating to any Pre-Closing Tax Period, (ii) engage in any voluntary disclosure or similar process or initiate communications with
any Tax authority with respect to Taxes attributable to a Pre-Closing Tax Period or Straddle Period, (iii) extend or waive, or cause
to be extended or waived, or permit the Company or its Subsidiaries to extend or waive, any statute of limitations or other period for
the assessment of any Tax or deficiency related to a Pre-Closing Tax Period, or (iv) make or change any Tax election or accounting
method where such Tax election or accounting method would be
reasonably expected to have a material and adverse retroactive effect on the Tax Liability or Tax attributes of the Sellers or their
direct or indirect owners for any Pre-Closing Tax Period of the Company or any of its Subsidiaries (including any election under
Sections 338 or 336 of the Code or any corresponding provision of state, local or foreign Tax law).
(b) Purchaser, without the prior written consent of the Seller Representative, and Sellers and the Seller
Representative, without the prior written consent of Purchaser (such consents not to be unreasonably withheld, conditioned or
delayed), shall not cause the Company or any Subsidiary to electively apply for a Tax audit or examination of a Pre-Closing Tax
Period pursuant to the U.S. federal income tax partnership audit provisions enacted pursuant to the Bipartisan Budget Act of 2015.
(c) Without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or
delayed), Sellers and the Seller Representative shall not amend or cause to be amended any Tax Return of the Company for a Pre-
Closing Tax Period that would be reasonably expected to materially and adversely affect the Tax liability or Tax attributes of the
Specified Entities for any Relevant Tax Period.
Section 10.3 Transfer Taxes . All transfer, documentary, sales, use, registration and real property transfer or gains tax,
stamp tax, excise tax, stock transfer tax and other similar Taxes with respect to the Transactions (collectively, " Transfer Taxes "),
and any penalties, interest or other additions with respect to such Transfer Taxes shall be borne 50% by Purchaser and 50% by the
Seller Representative. Purchaser and the Seller Representative shall cooperate in timely making all filings, returns, reports and forms
as necessary or appropriate to comply with the provisions of all applicable Laws in connection with the payment of such Transfer
Taxes and shall cooperate in good faith to minimize the amount of any such Transfer Taxes payable in connection herewith.
Section 10.4 Tax Contests .
(a) Purchaser shall promptly notify the Seller Representative, and in any event within 20 days after receipt by
Purchaser, the Company or its Subsidiaries, of written notice of any pending federal, state, local or foreign Tax audit or examination
or notice of deficiency or other adjustment, assessment, or redetermination relating to Taxes or income of the Company or its
Subsidiaries for a Pre-Closing Tax Period (" Tax Contest "). The Seller Representative shall have the right, at its election, to control,
at the Seller Representative's expense, any Tax Contest, including any disposition of such Tax Contest; provided
, however
, that (i)
Purchaser shall have the right, directly or through its designated representatives, to participate fully in such Tax Contest, including
to review in advance and reasonably comment upon submissions made in the course of such Tax Contest and to attend any in-
person or telephonic meetings, and (ii) Purchaser's consent (not to be unreasonably withheld, conditioned or delayed) shall be
required for any settlement by the Seller Representative that would be reasonably expected to materially and adversely affect the
Tax liability or Tax attributes of the Specified Entities for any Relevant Tax Period. With respect to all Tax Contests that the Seller
Representative does not elect to control pursuant to the immediately preceding sentence, Purchaser shall have the sole responsibility
for, and shall control, such Tax Contest, including the disposition thereof; provided
, however
, that with respect to such Tax
Contests for a Pre-
Closing Tax Period, (A) the Seller Representative shall have the right to participate fully in such Tax Contest, including to review in
advance and reasonably comment upon submissions made in the course of such Tax Contest and to attend any in-person or
telephonic meetings, (B) Purchaser shall diligently pursue such Tax Contest in good faith as if it were the sole party in interest, and
(C) the Seller Representative's consent (not to be unreasonably withheld, conditioned or delayed) shall be required for any
settlement that would be reasonably expected to materially and adversely affect the Tax liability or Tax attributes of the Sellers or
their direct or indirect owners.
(b) MDP VI-C or VI-C Holdco shall promptly notify Purchaser, and in any event within 45 days after receipt by
MDP VI-C or VI-C Holdco, of written notice of any pending Tax audit, examination, notice of deficiency or other adjustment,
assessment or redetermination relating to Taxes in connection to the Call Option or any transaction engaged in pursuant to
Section 1.3(a) or Section 1.3(b) (" Call Option Tax Contest "). Purchaser shall have the right, directly or through its designated
representatives, to participate fully in such Call Option Tax Contest, at its own expense, including to review in advance and
reasonably comment upon submissions made in the course of such Call Option Tax Contest and to attend any in-person or
telephonic meetings, and Purchaser's consent (not to be unreasonably withheld, conditioned or delayed) shall be required for any
settlement of such Call Option Tax Contest that would be reasonably expected to materially and adversely affect the Tax liability or
Tax attributes of the Specified Entities for any Relevant Tax Period.
Section 10.5 Tax Dispute Resolution . In the event of any disagreement as to any Tax matter covered in this Agreement,
Purchaser and the Seller Representative shall negotiate in good faith for a period of 30 days to resolve such dispute. In the event any
such disagreement cannot be resolved between Purchaser and the Seller Representative, such disagreement shall be resolved by an
accounting firm of international reputation mutually agreeable to, and retained by, Purchaser and the Seller Representative (the " Tax
Accountant "), and any such determination by the Tax Accountant shall be final. The fees and expenses of the Tax Accountant shall
be borne by Purchaser and the Seller Representative in inverse proportion as they may prevail on the disputed items resolved by the
Tax Accountant, utilizing the values of such items as initially submitted by the Parties to the Tax Accountant. Such proportional
allocations shall be determined by the Tax Accountant at the time its determination is rendered on the disputed items. If the Tax
Accountant does not resolve any differences between Purchaser and the Seller Representative with respect to a Tax Return at least
five days prior to the due date therefor, such Tax Return shall be filed in a manner consistent with the position of the Party
responsible for filing such Tax Return pursuant to Section 10.1 and, to the extent necessary, amended to reflect the Tax Accountant's
resolution.
Section 10.6 Cooperation . Purchaser and the Company and its Subsidiaries each agree that it shall cooperate with and
make available to the other Parties, during normal business hours, all books and records, information and employees (without
substantial disruption of employment) retained and remaining in existence after the Closing that pertain to a Pre-Closing Tax Period
of the Company or any of its Subsidiaries or TG Blocker and are reasonably necessary or useful in connection with (i) the
preparation of any Tax Returns, (ii) any Tax inquiry, audit or investigation or (iii) the computation and verification of any amounts
paid or payable under this Article X (including any supporting workpapers, schedules and documents).
The Party requesting any such books, records, information or employees shall bear all out-of-pocket costs and expenses (including
accountants' and attorneys' fees, but excluding reimbursement for salaries and employee benefits) reasonably incurred in connection
with providing such books, records, information or employees. Purchaser shall cause the Company, TG Blocker and the Company's
Subsidiaries to retain all applicable Tax Returns, books and records, and workpapers for Pre-Closing Tax Periods for a period of at
least seven years following the Closing Date. For the avoidance of doubt, nothing in this Agreement shall require the disclosure of
any consolidated, combined, unitary or similar Tax Return of which Parent or Purchaser is the common parent or any other
information relating to Taxes or Tax Returns other than information relating to the Company and its Subsidiaries or TG Blocker.
Section 10.7 Purchase Price Allocation and Tax Treatment .
(a) The Final Closing Purchase Price (plus the Call Option Exercise Price and any assumed Liabilities required to
be taken into account for such purpose) shall be allocated among the assets of the Company (and, as applicable, any Subsidiaries
treated as flow-through entities for income Tax purposes) in accordance with the principles of Sections 743, 751, 755 and 1060 of
the Code and the Treasury Regulations thereunder pursuant to a written allocation (the " Asset Allocation "). The Seller
Representative shall deliver a written proposal for the Asset Allocation to Purchaser within 120 days of the Closing Date. If
Purchaser accepts such proposal, such proposal shall become the Asset Allocation. If Purchaser disagrees with such proposal, the
Parties shall negotiate in good faith, and, if necessary, the Tax Accountant shall determine and prepare the Asset Allocation
pursuant to Section 10.5 , except that for this purpose, the fees and expenses of the Tax Accountant shall be borne by the Party
which, in the conclusive judgment of the Tax Accountant, is not the prevailing Party, or if such judgment cannot be made, shall be
borne 50% by Purchaser and 50% by the Seller Representative. If the Final Closing Purchase Price is adjusted pursuant to this
Agreement, the Asset Allocation shall be adjusted as appropriate and Purchaser and the Seller Representative shall cooperate in
good faith in making any such adjustments. Except to the extent otherwise required by applicable Law, Purchaser and the Sellers
shall file or cause to be filed all Tax Returns in a manner consistent with the Applicable Allocations and shall not make any
inconsistent statement or adjustment on any Tax Return or during the course of any Tax-related matter, or otherwise take any Tax
position inconsistent with the Applicable Allocations unless otherwise required by Law.
(b) Other than as required by changes in Law after the date hereof or pursuant to a final determination within the
meaning of Section 1313 of the Code, none of the Parties shall take any position in any Tax audit or examination or notice of
deficiency or other adjustment, assessment, or redetermination or on any U.S. federal, state or local Tax Return, public document or
communication with any U.S. federal, state or local Governmental Authority inconsistent with Purchaser obtaining (by way of
Sections 754 and 743 of the Code) a basis with respect to the assets of the Company and its Subsidiaries, in respect of the assets of
the Company and its Subsidiaries as a result of the Transactions contemplated in Section 1.3(a) , Section 1.3(b) and Section 1.3(d)
equal to the amount paid by Purchaser for the Call Option plus the amount paid by Purchaser to exercise the Call Option plus the
amounts paid by Purchaser to each Unit Seller.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Survival . The covenants and agreements of the Parties contained in this Agreement that are required to be
performed (a) at or prior to the Closing shall survive the Closing and continue in full force and effect until the date that is one year
after the Closing Date (the " Survival End Date ") and (b) after the Closing shall continue in full force and effect in accordance with
their respective terms. The representations and warranties of the Company contained in Article III , TG Blocker contained in
Article IV , the Sellers contained in Article V and Purchaser contained in Article VI , and all claims with respect thereto, shall
survive the Closing and shall terminate on the Survival End Date; it
being
understood
that in the event that notice of any claim for
indemnification under this Article XI has been given pursuant to Section 11.4 or Section 11.5 , as the case may be, prior to the
Survival End Date, the representations and warranties that are the subject of such indemnification claim (and the right to pursue such
claim) shall survive with respect to such claim until such time as such claim is finally resolved pursuant to this Article XI . Any
claim pursuant to this Article XI must be delivered prior to the Survival End Date. It is the intention of the Parties that the survival
periods and termination date set forth in this Section 11.1 are contractual in nature and supersede any statute of limitation applicable
to such representations and warranties or claim with respect thereof. The right of a Person to any remedy pursuant to this Article XI
shall not be affected by any investigation or examination conducted, or any knowledge possessed or acquired (or capable of being
possessed or acquired), by such Person at any time concerning any circumstances, actions, omissions or events related to the
accuracy or performance of any representation, warranty, covenant or other obligation.
Section 11.2 Indemnification by Sellers .
(a) From and after the Closing and subject to the provisions of this Section 11.2 and the limitations set forth in this
Article XI , Purchaser, its Affiliates and their respective officers, directors, employees, agents, successors and permitted assigns,
each in their capacity as such (collectively, the " Purchaser Indemnified Parties ") shall be indemnified and held harmless solely
from the Indemnity Escrow Fund from, against and in respect of any and all damages, losses, charges, liabilities, payments,
judgments, settlements, assessments, deficiencies, Taxes, interest, penalties, fees (including reasonable fees of attorneys and other
reasonably necessary advisors), diminution of value and costs and expenses (collectively, " Losses ") imposed on, sustained,
incurred or suffered by any of the Purchaser Indemnified Parties, whether in respect of Third Party Claims or Direct Claims, arising
out of or resulting from:
(i) the breach or inaccuracy of any Company Representation (other than any certificate delivered by the
Company to Purchaser pursuant to Section 8.2(e)) , TG Blocker Representation or Seller Representation, in each case as of
the Closing Date, it
being
understood
that for purposes of this Section 11.2(a)(i) , the terms "material" and "Material Adverse
Effect" contained in such representation or warranty (other than the representations and warranties set forth in Section 3.2(b)
(iii) , Section 3.6(a) , Section 3.7(a)(ii) , the first sentence of Section 3.11(a) (including the definition of "Company Plan"),
the first sentence of Section 3.11(b) , Section 3.13(a) , Section 3.15(a) ,
the first sentence of Section 3.18 and the phrase "Material Contract") shall be disregarded for purposes of determining
whether such representation or warranty was breached or was inaccurate;
(ii) the breach of any covenant or agreement made by any Seller in this Agreement;
(iii) the breach of any covenant or agreement made by TG Blocker in this Agreement to the extent that such
covenant or agreement was required to be performed or complied with at or prior to the Closing;
(iv) the breach of any covenant or agreement made by the Company in this Agreement to the extent that
such covenant or agreement was required to be performed or complied with at or prior to the Closing; and
(v) any Action of any securityholder or purported securityholder of the Company relating to the allocation or
entitlement to a portion of the consideration paid in consummating the Transactions, including any such claims under any
purported contractual, employment or other rights that assert rights to any security of the Company or claims for damages
based on any such rights.
(b) Notwithstanding anything to the contrary contained in this Agreement, but subject to Section 11.10 :
(i) (A) the indemnification provided in this Section 11.2 shall be the sole and exclusive post-Closing remedy
available to Purchaser Indemnified Parties and (B) following the Closing, the maximum aggregate amount of indemnifiable
Losses that may be recovered from the Sellers shall not exceed the balance remaining in the Indemnity Escrow Account;
(ii) except with respect to the breach or inaccuracy of (A) any Fundamental Representation or (B) the
representation and warranty set forth in Section 3.6(c) (an " Undisclosed Liability Representation Breach "), no
indemnification payment with respect to any indemnifiable Losses otherwise payable under Section 11.2(a)(i) shall be
payable: (A) for any individual Losses or series of related Losses arising out of substantially similar facts and circumstances
unless and until the aggregate amount of all such Losses exceeds $50,000 (the " De Minimis Amount "), in which case the
Purchaser Indemnified Parties shall, subject to the other terms and provisions of this Section 11.2 , be entitled to
indemnification for the full amount of such Losses; or (B) unless and until such time as all such indemnifiable Losses under
Section 11.2(a)(i) shall aggregate to more than $20,000,000 (the " Deductible Amount "), after which time the Purchaser
Indemnified Parties may, subject to clause (i) above, recover from the remaining Indemnity Escrow Account all such
indemnifiable Losses above the Deductible Amount;
(iii) with respect to an Undisclosed Liability Representation Breach, no indemnification payment with
respect to any indemnifiable Losses otherwise payable under Section 11.2(a)(i) in respect of such breach (an " Undisclosed
Liability Loss ") shall
be payable: (A) for any individual Undisclosed Liability Loss or series of related Undisclosed Liability Losses arising out of
substantially similar facts and circumstances unless and until the aggregate amount of all such Undisclosed Liability Losses
exceeds the De Minimis Amount, in which case the Purchaser Indemnified Parties shall, subject to the other terms and
provisions of this Section 11.2 , be entitled to indemnification for the full amount of such Undisclosed Liability Losses; or
(B) unless and until such time as all Undisclosed Liability Losses shall aggregate to more than $50,000,000 (the "
Undisclosed Liability Deductible Amount "), after which time the Purchaser Indemnified Parties may, subject to clause (i)
above, recover from the remaining Indemnity Escrow Account all such Undisclosed Liability Losses above the Undisclosed
Liability Deductible Amount;
(iv) in the event a Final Determination establishes Losses that both (A) constitute Undisclosed Liability
Losses and (B) would constitute indemnifiable Losses pursuant to this Section 11.2 even if Section 3.6(c) of this Agreement
were disregarded, then Section 11.2(b)(iii) shall not apply to such Losses, such Losses shall not be treated as arising from an
Undisclosed Liability Representation Breach (notwithstanding the Final Determination) and such Losses shall not count
towards satisfying the Undisclosed Liability Deductible Amount ( it
being
understood
and agreed that Losses that count
towards satisfying the Deductible Amount under Section 11.2(b)(ii) shall not also count towards satisfying the Undisclosed
Liability Deductible Amount under Section 11.2(b)(iii) , and vice
versa
);
(v) no Losses may be claimed hereunder by any Purchaser Indemnified Party to the extent that such Losses
have been included in the calculation of the Indebtedness Amount, the Cash Amount, the Net Working Capital Amount, the
Transaction Expenses or the SmartMed Estimated 2016 Earnout Payment in the calculation of the Final Closing Purchase
Price if any, pursuant to Section 2.3 ; and
(vi) no indemnification payment by the Sellers with respect to any indemnifiable Losses otherwise payable
under this Section 11.2 shall be payable with respect to Taxes relating to (A) any Tax period (or portion thereof) beginning
on or after the Closing Date (other than with respect to breaches of the representations set forth in Section 3.10(a)(vi) ,
Section 3.10(a)(vii) , Section 3.10(h) , Section 3.10(i) , Section 3.10(k) , Section 4.6(a)(vi) , Section 4.6(h) , Section 4.6(i) , or
Section 4.6(m) or a breach of the covenants set forth in Section 7.1(a)(xiv) or Article X ) or (B) any financing or refinancing
arrangements entered into at any time by or at the direction of Purchaser.
Section 11.3 Indemnification by Purchaser . From and after the Closing and subject to the provisions of this
Section 11.3 and the limitations set forth in this Article XI , Purchaser shall indemnify and hold harmless each Seller and its
respective officers, directors, employees, agents, successors and permitted assigns, each in its capacity as such and who are not
officers, directors, employees, agents, successors and permitted assigns of the Company and its Subsidiaries as of immediately
following the Closing (collectively, the " Seller Indemnified Parties ") from, against and in respect of any and all Losses imposed on,
sustained, incurred or suffered by any of the Seller Indemnified Parties, whether in respect of Third Party Claims or Direct Claims,
or otherwise, arising out of or resulting from:
(a) the breach or inaccuracy of any representation or warranty made by Purchaser in Article VI , in each case, as of
the Closing Date, it
being
understood
that for purposes of this Section 11.3(a) , the terms "material" and "Material Adverse Effect"
contained in such representation or warranty shall be disregarded for purposes of determining whether such representation or
warranty was breached or was inaccurate;
(b) the breach of any covenant or agreement made by Purchaser in this Agreement;
(c) the breach of any covenant or agreement made by the Company or TG Blocker in this Agreement to the extent
that such covenant or agreement is required to be performed or complied with following the Closing; and
(d) notwithstanding anything to the contrary contained in this Agreement, but subject to Section 11.10 :
(i) (A) the indemnification provided in this Section 11.3 shall be the sole and exclusive post-Closing remedy
available to Seller Indemnified Parties and (B) following the Closing, the maximum aggregate amount of indemnifiable
Losses that may be recovered from Purchaser shall not exceed $138,750,000; and
(ii) Except with respect to the breach or inaccuracy of any representation and warranty set forth in
Section 6.1 or Section 6.2(b) , no indemnification payment with respect to any indemnifiable Losses otherwise payable under
Section 11.3(a) shall be payable: (A) for any individual Losses or series of related Losses arising out of substantially similar
facts and circumstances unless and until the aggregate amount of all such Losses exceeds the De Minimis Amount, in which
case the Seller Indemnified Parties shall, subject to the other terms and provisions of this Section 11.3 , be entitled to
indemnification for the full amount of such Losses; or (B) unless and until such time as all such indemnifiable Losses paid
under Section 11.3(a) shall aggregate to more than the Deductible Amount, after which time the Seller Indemnified Parties
may, subject to clause (i) above, recover all indemnifiable Losses above the Deductible Amount.
Section 11.4 Third Party Claim Indemnification Procedures .
(a) In the event that any written claim or demand for which an indemnifying party (an " Indemnifying Party ") may
have liability to any party hereunder (an " Indemnified Party ") is asserted against or sought to be collected from any Indemnified
Party by a third party (a " Third Party Claim "), such Indemnified Party shall promptly, but in no event more than 15 Business Days
following such Indemnified Party's receipt of a Third Party Claim (and no fewer than 10 days prior to a scheduled appearance date
in a litigated matter), notify the Indemnifying Party, and, if such claim is being made by a Purchaser Indemnified Party, the Escrow
Agent, in writing of such Third Party Claim, its good faith estimate of the potential Losses (the " Loss Estimate ") sought thereunder
if and to the extent reasonably ascertainable (which estimate shall not be conclusive of the final amount of such Third Party Claim),
and any other remedy sought thereunder, any relevant time constraints relating to the Indemnified Party's response and, to the
extent practicable, any other material details pertaining thereto (a " Claim Notice "); provided
, however
, that the failure to give a
Claim Notice shall affect the rights of an Indemnified Party hereunder only to the extent that such failure has a prejudicial effect on
the defenses or other rights available to the Indemnifying Party with respect to such Third Party Claim. The Indemnifying Party
shall have 30 days (or such lesser number of days set forth in the Claim Notice and as required by a court proceeding that cannot be
extended, in the event of a litigated matter) after receipt of the Claim Notice (the " Notice Period ") to notify the Indemnified Party
that it shall assume control of and defend the Indemnified Party against such Third Party Claim; provided
that the Indemnifying
Party shall not have the right to assume the control and defense of such claim and the Indemnified Party shall have the sole power to
direct and control such defense if (i) such claim is primarily a claim for injunctive or equitable relief against the Indemnified Party
and not monetary damages, (ii) such claim involves a criminal Action, or is otherwise brought by a Governmental Authority, against
the Indemnified Party or (iii) if the claim is made by a Purchaser Indemnified Party, the indemnifiable Losses related to such claim
would reasonably be expected to exceed 200% of the remainder of the Indemnity Escrow Funds (less a reasonable estimate of all
other indemnifiable Losses in respect of prior pending and unresolved claims made pursuant to this Article XI ). In the event that the
Seller Representative notifies a Purchaser Indemnified Person within the Notice Period that it desires to defend against a Third Party
Claim pursuant to this Section 11.4 , if and when the Seller Representative conclusively, irrevocably and unconditionally
acknowledges in writing that it has an indemnity obligation with respect to such Third Party Claim, as of and after the date of such
acknowledgment, all reasonable and documented out of pocket expenses of the Seller Representative in assuming and controlling
the defense of such Third Party Claim shall be reimbursed from the Indemnity Escrow Account as incurred (but not with respect to
any expenses incurred prior to such acknowledgment), by wire transfer of immediately available funds from the Indemnity Escrow
Account to the account or accounts designated by the Seller Representative to the Escrow Agent in writing, as promptly as
practicable, but in no event later than 10 days following the date that the Seller Representative submits a claim for reimbursement of
such expenses, setting forth in reasonable detail the amounts of such expenses and the nature thereof together with supporting
invoices; provided
, however
, that the Seller Representative shall not be entitled to reimbursement pursuant to this sentence for
more than one counsel (plus any appropriate local counsel) in connection with any Third Party Claim.
(b) Subject to Section 11.4(a) , in the event that the Indemnifying Party notifies the Indemnified Party within the
Notice Period that it desires to defend the Indemnified Party against a Third Party Claim, the Indemnifying Party shall have the right
to defend the Indemnified Party by appropriate proceedings and shall have the sole power to direct and control such defense, with
counsel reasonably satisfactory to the Indemnified Party. Once the Indemnifying Party has duly assumed the defense of a Third
Party Claim, the Indemnified Party shall have the right, but not the obligation, to participate in any such defense and to employ
separate counsel of its choosing, reasonably satisfactory to the Indemnifying Party. The Indemnified Party shall participate in any
such defense at its sole cost and expense unless (i) the Indemnifying Party and the Indemnified Party are both named parties to the
proceedings and nationally recognized outside counsel to such Purchaser Indemnified Party reasonably concludes a conflict (other
than by virtue of delivery of a Claim Notice) exists or would reasonably be expected to arise between the Seller Representative, the
Sellers and/or any Seller Indemnified Party, on the one hand, and such Purchaser Indemnified Party, on the other hand,
that would make such separate representation advisable, or (ii) the Indemnified Party assumes the defense of a Third Party Claim
after the Indemnifying Party has failed to diligently pursue a Third Party Claim that it has assumed, as provided in the first sentence
of Section 11.4(c) , in which case, the reasonable fees and expenses of one separate counsel (in addition to any necessary local
counsel), each reasonably satisfactory to the Indemnifying Party, to the extent such Third Party Claim is subject to indemnification
or reimbursement under Section 11.2 or Section 11.3 , shall be indemnifiable Losses ( it
being
understood
that subject to
Section 11.10 , in such event, the balance of the Indemnity Escrow Account shall be the sole and exclusive recourse for any such
reimbursement of such separate counsel of such Purchaser Indemnified Party for all Third Party Claims). The Indemnifying Party
shall not, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any Third
Party Claim on a basis that would result in or would reasonably be expected to result in (A) the imposition of a consent order,
injunction or decree that would materially restrict the future activity or conduct of the Indemnified Party or any of its Affiliates, (B)
a finding or admission of a material violation of Law or material violation of the rights of any Person by the Indemnified Party or
any of its Affiliates, (C) any material non-monetary condition or obligation being imposed on any Indemnified Party or any of its
Affiliates or (D) any material adverse effect on the business of the Indemnified Party or any of its Affiliates.
(c) Subject to Section 11.4(a) , if the Indemnifying Party (i) elects not to defend the Indemnified Party against a
Third Party Claim, whether by not giving the Indemnified Party timely notice of its desire to so defend or otherwise, or (ii) after
assuming the defense of a Third Party Claim, fails to defend diligently such Third Party Claim, the Indemnified Party shall have the
right but not the obligation to assume its own defense and shall consult with the Seller Representative regarding the strategy for
defense of such claim, with counsel reasonably satisfactory to the Indemnifying Party, it
being
understood
that the Indemnified
Party's right to indemnification for a Third Party Claim shall not be adversely affected by assuming the defense of such Third Party
Claim. The Indemnifying Party shall have no liability, and no portion of the Indemnity Escrow Account may be claimed, with
respect to a Third Party Claim settled without its consent, which consent shall not be unreasonably withheld, conditioned or
delayed.
(d) The Indemnified Party and the Indemnifying Party shall cooperate in order to ensure the proper and adequate
defense of a Third Party Claim, including by providing access to each other's relevant business records and other documents and
employees, it
being
understood
that the third-party, out-of-pocket costs and expenses of the Indemnified Party relating thereto shall
be considered Losses. The Indemnified Party and the Indemnifying Party shall keep each other reasonably informed with respect to
the status of such Third Party Claim as either may request from time to time.
(e) The Indemnified Party and the Indemnifying Party shall use commercially reasonable efforts to avoid production
of confidential information (consistent with applicable Law), and to cause all communications among employees, counsel and others
representing any party to a Third Party Claim to be made so as to preserve any applicable attorney-client or work-product privileges.
(f) The foregoing provisions of this Section 11.4 shall not apply with respect to any federal, state, local or foreign
Tax audit or examination or notice of deficiency or other adjustment, assessment, or redetermination relating to Taxes, which shall
be governed solely by Section 10.4 .
Section 11.5 Direct Claims . If an Indemnified Party determines to make a claim for indemnification hereunder for a Loss
that does not result from a Third Party Claim (a " Direct Claim "), the Indemnified Party shall promptly notify the Indemnifying
Party, and, if such claim is being made by a Purchaser Indemnified Party, the Escrow Agent, in writing of such Direct Claim, its
good faith Loss Estimate if and to the extent reasonably ascertainable (which Loss Estimate shall not be conclusive of the final
amount of such Direct Claim), any other remedy sought thereunder, any relevant time constraints relating thereto, that the
Indemnified Party has paid or properly accrued Losses or anticipates that it will incur liability for Losses for which such Indemnified
Party is entitled to indemnification pursuant to this Agreement, the date such item was paid (if applicable), the basis for any
anticipated Losses (to the extent known) and the nature of the misrepresentation, breach of warranty, breach of covenant or
agreement or claim to which each such claim is related and the computation of the amount to which such Indemnified Party claims to
be entitled hereunder (if known and reasonably quantifiable) and, to the extent practicable, any other material details pertaining
thereto. The Indemnifying Party shall have a period of 60 days within which to respond to such Direct Claim. If the Indemnifying
Party does not respond in writing to the Indemnified Party within such 60 day period, the Indemnifying Party will be deemed to have
rejected the Direct Claim. If the Indemnifying Party rejects all or any part of the Direct Claim, the Indemnified Party shall be free to
seek enforcement of its rights under this Agreement with respect to such rejected portion of such Direct Claim.
Section 11.6 Adjustment to Losses .
(a) Insurance . In calculating the amount of any Loss, any amounts actually received by the Indemnified Party or
any of its Affiliates under any insurance policy or pursuant to any indemnification right, reimbursement arrangement, Contract,
claim, recovery, settlement or payment with, by or against any other Person (collectively, " Alternative Arrangements "), in each
case relating to the Third Party Claim or the Direct Claim, net of any actual costs and expenses incurred in connection with securing
or obtaining such proceeds (including any increased premiums resulting therefrom), shall be deducted, except to the extent that the
adjustment itself would excuse, exclude or limit the coverage of all or part of such Loss. In the event that an Indemnified Party has
any rights against a third party with respect to any occurrence, claim or loss that results in a payment by an Indemnifying Party
under this Article XI , such Indemnifying Party shall be subrogated to such rights to the extent of such payment; provided
that until
the Indemnified Party recovers full payment of the Loss related to any such Direct Claim, any and all claims of the Indemnifying
Party against any such third party on account of said indemnity payment are hereby expressly made subordinate and subject in right
of payment to the Indemnified Party's rights against such third party. Without limiting the generality or effect of any other provision
hereof, each Indemnified Party and Indemnifying Party shall duly execute upon request all instruments reasonably necessary to
evidence and perfect the subrogation and subordination rights detailed herein, and otherwise cooperate in the
prosecution of such claims. Each Indemnified Party shall use its commercially reasonable efforts to seek full recovery under all
Alternative Arrangements covering any Losses.
(b) Reimbursement . If an Indemnified Party recovers an amount from a third party in respect of a Loss that is the
subject of indemnification hereunder after all or a portion of such Loss has been paid by an Indemnifying Party pursuant to this
Article XI , the Indemnified Party shall promptly remit to the Indemnifying Party the excess (if any) of (i) the amount paid by the
Indemnifying Party in respect of such Loss, plus the amount received from the third party in respect thereof, less
(ii) the full amount
of the Loss.
(c) No Contribution . The Sellers (including any officer or director of the Company) shall not have any right of
contribution, indemnification or right of advancement from the Company or Purchaser with respect to any Loss claimed by an
Indemnified Party hereunder.
(d) No Duplication . No Indemnified Party shall be entitled to recover damages or obtain payment, reimbursement,
restitution or indemnity to the extent such Indemnified Party has previously recovered damages or obtained payment,
reimbursement, restitution or indemnity under any other provision of this Agreement (including Article II ).
Section 11.7 Payments .
(a) General . Purchaser shall pay to the applicable Seller Indemnified Party the amount of any Loss for which it is
liable hereunder, in immediately available funds, to an account specified by the applicable Seller Indemnified Party in writing at
least two Business Days in advance thereof no later than five Business Days following any Final Determination of such Loss and
Purchaser's liability therefor. A " Final Determination " shall exist when (i) the parties to the dispute have reached an agreement in
writing, (ii) a court of competent jurisdiction shall have entered a final and non-appealable order or judgment or (iii) an arbitration
or like panel shall have rendered a final non-appealable determination with respect to disputes the parties have agreed to submit
thereto.
(b) Escrow . No later than five Business Days following the Final Determination of the amount of any Losses
payable to any Purchaser Indemnified Party, Purchaser and Seller Representative shall jointly direct the Escrow Agent to release to
Purchaser, from the funds remaining in the Indemnity Escrow Account, the lesser of (i) the amount of such Losses and (ii) the
remaining balance in the Indemnity Escrow Account.
Section 11.8 Characterization of Indemnification Payments . All payments made by an Indemnifying Party to an
Indemnified Party in respect of any claims pursuant to Section 11.2 or Section 11.3 shall be treated as adjustments to the
consideration paid pursuant to the Transactions for Tax purposes.
Section 11.9 Mitigation . The Indemnified Parties shall take all commercially reasonable steps to mitigate Losses
reasonably promptly after becoming aware of any event that has given rise to any Losses or would reasonably be expected to give
rise to any Losses that are indemnifiable or recoverable hereunder or in connection herewith. Purchaser shall cause each other
Purchaser Indemnified Party to comply with this Section 11.9 to mitigate all Losses.
Section 11.10 Exclusive Remedy . Notwithstanding anything in this Agreement to the contrary, but except in the case of
(a) fraud with respect to the representations and warranties contained in, as to Purchaser, Article III , Article IV or Article V , the
assignment agreement to be entered into pursuant to Section 1.4(c) or the certificate delivered pursuant to Section 8.2(e) , or, as to
the Sellers, Article VI or the certificate delivered pursuant to Section 8.3(c) , subject to Section 12.1 , (b) Section 12.19 , (c)
Section 12.10 (but solely for purposes of enforcing Section 7.6 and Section 7.7 ) or (d) Section 2.3(a), (i) the Parties acknowledge
and agree that from and after the Closing, the rights provided in this Article XI (but subject to the limitations set forth herein) shall
constitute the sole and exclusive remedy for the Purchaser Indemnified Parties and the Seller Indemnified Parties with respect to any
Losses suffered in connection with or arising from any breach or failure to be true and correct, or alleged breach or failure to be true
and correct, of any representation or warranty or any covenant or agreement of the Parties contained in this Agreement and (ii) the
balance remaining in the Indemnity Escrow Account shall be the sole and exclusive recourse for any and all payments that may
become owing to the Purchaser Indemnified Parties pursuant to this Article XI and no claim by the Purchaser Indemnified Parties
shall be asserted against, and the Purchaser Indemnified Parties shall not be entitled to indemnification from, the Seller
Representative, any Seller, TG Blocker or VI-C Holdco or any of their respective Affiliates other than by recourse to the Indemnity
Escrow Account. The disposition of funds in the Indemnity Escrow Account shall be governed by the terms set forth herein and in
the Escrow Agreement. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted by applicable Law,
any and all other rights, claims and causes of action (including rights of contributions, if any) known or unknown, foreseen or
unforeseen, which exist or may arise in the future, that it may have against the other Parties or any of their respective Affiliates
arising under or based upon any Law; provided
, however
, that notwithstanding anything to the contrary in this Agreement but
subject to Section 12.1 , nothing in this Agreement shall prejudice or limit any claim for fraud with respect to the representations and
warranties contained in, as to Purchaser, Article III , Article IV or Article V or the certificate delivered pursuant to Section 8.2(e) ,
or, as to the Sellers, Article VI or the certificate delivered pursuant to Section 8.3(c) . The Parties covenant not to sue, assert any
arbitration claim or otherwise threaten any claim other than those described in this Article XI as being available under the particular
circumstances described in this Article XI .
ARTICLE XII
MISCELLANEOUS
Section 12.1 Acknowledgement by Purchaser . Purchaser acknowledges and agrees that: (a) it has conducted an
investigation of the financial condition, results of operations, assets, liabilities, properties and projected operations of TG Blocker,
the Company and its Subsidiaries, (b) the Company Representations constitute the sole and exclusive representations and warranties
of the Company in connection with the Transactions, (c) the TG Blocker Representations constitute the sole and exclusive
representations and warranties of TG Blocker in connection with the Transactions, (d) the Seller Representations constitute the sole
and exclusive representations and warranties of Sellers in connection with the Transactions and the Seller Representations are made
by each Seller severally and not jointly, (e) except for the Company Representations by the Company, the Seller Representations by
the Sellers (made severally and not jointly) and the TG Blocker Representations by TG Blocker, none of the
Company, Sellers, TG Blocker or any other Person makes, or has made, any other express or implied representation or warranty with
respect to Sellers, TG Blocker, the Company or its Subsidiaries or the Transactions and all other representations and warranties of
any kind or nature expressed or implied (including any relating to the future or historical financial condition, results of operations,
assets or liabilities of TG Blocker, the Company and its Subsidiaries, or the quality, quantity or condition of TG Blocker, the
Company's or its Subsidiaries' assets) are specifically disclaimed by the Sellers, TG Blocker, the Company and its Subsidiaries and
all other Persons (including the Representatives of TG Blocker, the Company or its Subsidiaries and Sellers and their Affiliates and
their respective Representatives) and (f) such disavowal and disclaimer is agreed by Purchaser and Purchaser agrees that it and its
Affiliates are not relying on any representations and warranties in connection with the Transactions except the Company
Representations by the Company, the TG Blocker Representations by TG Blocker and the Seller Representations by the Sellers
(severally and not jointly). In connection with Purchaser's investigation of the Company and its Subsidiaries, Purchaser has received
certain projections, including projected statements of operating revenues and income from operations of the Company and its
Subsidiaries and certain business plan information. Purchaser acknowledges and agrees that there are uncertainties inherent in
attempting to make such estimates, projections and other forecasts and plans, that Purchaser is familiar with such uncertainties and
that Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections
and other forecasts and plans so furnished to it, including the reasonableness of the assumptions underlying such estimates,
projections and forecasts. Without limiting the foregoing provisions of this paragraph, Purchaser hereby acknowledges that none of
the Sellers, TG Blocker, the Company or its Subsidiaries or any of their respective current or former Affiliates or Representatives is
making any representation or warranty with respect to such estimates, projections and other forecasts and plans, including the
reasonableness of the assumptions underlying such estimates, projections and forecasts, and that Purchaser has not relied on any such
estimates, projections or other forecasts or plans. Without limiting the Company Representations by the Company, the TG Blocker
Representations by TG Blocker and the Seller Representations by the Sellers (severally and not jointly) and the rights of the
Purchaser Indemnified Parties pursuant to Article XI with respect to breaches of such representations and warranties, Purchaser
further agrees that from and after the Closing (i) none of Sellers or any other Person shall have or be subject to any liability to
Purchaser, TG Blocker, the Company or any other Person resulting from the distribution to Purchaser, or Purchaser's use of, any
such estimates, projections or forecasts or any other information, document or material provided to or made available to Purchaser or
its Affiliates or Representatives in certain "data rooms," management presentations or in any other form in expectation of the
Transactions and (ii) Purchaser has not relied on any such information, document or material. Effective upon Closing, Purchaser
waives, except for its rights under Article XI , Section 12.10 (but solely for purposes of enforcing Section 7.6 and Section 7.7 ) and
Section 2.3(a) , on its own behalf and on behalf of its respective Affiliates, to the fullest extent permitted under applicable Law, any
and all rights, claims and causes of action it may have against Sellers, TG Blocker, the Company, its Subsidiaries and any of their
respective current or former Affiliates or Representatives relating to the operation of TG Blocker, the Company and its Subsidiaries
or their respective businesses or relating to the subject matter of this Agreement, the Disclosure Schedule or the Transactions,
whether arising under or based upon any federal, state, local or foreign statute, Law, ordinance, rule or regulation or otherwise. The
Seller Representative shall have the right to enforce this
Section 12.1 on behalf of any Person that would be benefitted or protected by this Section 12.1 if they were a party thereto.
Section 12. Seller Representative .
(a) Designation . The Seller Representative is hereby designated by each of the Sellers to serve as the
representative of the Sellers with respect to the matters set forth in this Agreement to be performed by the Seller Representative.
(b) Authority . The Sellers hereby irrevocably constitute and appoint the Seller Representative as the
representative, agent, proxy, and attorney-in-fact for each of the Sellers for all purposes authorized under this Agreement, including
the full power and authority on the Sellers' behalf, and by signing this Agreement, each Seller shall be deemed to have authorized
and empowered the Seller Representative, on its behalf and in its name, (i) to consummate the Transactions; (ii) to pay such Seller's
expenses incurred in connection with the negotiation and performance of this Agreement (whether incurred on or after the date
hereof), including by using funds from the Representative Holdback Amount; (iii) to disburse any funds received hereunder to such
Seller and each other Seller; (iv) to endorse and deliver any certificates or instruments representing the Purchased Securities and
execute such further instruments of assignment as Purchaser may reasonably request; (v) to negotiate, execute and deliver on behalf
of such Seller any amendment or waiver hereto; (vi) (A) to dispute or refrain from disputing, on behalf of such Seller relative to any
amounts to be received by such Seller under this Agreement or any agreements contemplated hereby, any claim made by Purchaser
under this Agreement or other agreements contemplated hereby, (B) to negotiate and compromise, on behalf of such Seller, any
dispute that may arise under, and exercise or refrain from exercising any remedies available under, this Agreement or any other
agreement contemplated hereby, and (C) to execute, on behalf of such Seller, any settlement agreement, release or other document
with respect to such dispute or remedy; (vii) to engage attorneys, accountants, agents or consultants on behalf of the Sellers in
connection with this Agreement or any other agreement contemplated hereby and paying any fees related thereto; (viii) to take all
other actions to be taken by or on behalf of such Seller in connection herewith including any action to enforce the rights of such
Seller hereunder; (ix) to retain the Representative Holdback Amount and pay amounts therefrom in accordance with this
Agreement; (x) to give and receive all notices or documents given or to be given to or by Sellers pursuant hereto or in connection
herewith and to give and receive and accept service of legal process in connection with any suit or proceeding arising under this
Agreement or the Transactions; (xi) to make all determinations required or permitted under this Agreement; and (xii) to do each and
every act and exercise any and all rights that such Seller or the Sellers collectively are permitted or required to do or exercise under
this Agreement and in connection with the Transactions. Each of the Sellers agrees that such agency and proxy are coupled with an
interest, are therefore irrevocable without the consent of the Seller Representative and shall survive the death, incapacity,
bankruptcy, dissolution or liquidation of any Seller. All decisions and actions by the Seller Representative (to the extent authorized
by this Agreement) shall be binding upon all of the Sellers, and no Seller shall have the right to object, dissent, protest or otherwise
contest the same. The Seller Representative shall have the right to enforce this Agreement on behalf of any Seller to the same extent
as if such Seller was a party to this Agreement.
(c) Authority; Indemnification; Reliance . Each Seller agrees that Purchaser and the Company shall be entitled to
rely on any action taken by the Seller Representative, on behalf of such Seller, in connection with the Transactions (an " Authorized
Action "), and that each Authorized Action shall be binding on each Seller as fully as if such Seller had taken such Authorized
Action. Purchaser agrees that the Seller Representative (in its capacity as such) shall have no liability to Purchaser or the Company
for any Authorized Action, except to the extent that such Authorized Action is found by a final, non-appealable order of a court of
competent jurisdiction to have constituted fraud or willful misconduct by the Seller Representative. Following the Closing,
Purchaser shall be entitled to deal exclusively with the Seller Representative on all matters relating to this Agreement and the
Transactions and rely conclusively (without further evidence of any kind whatsoever) on any document executed or purported to be
executed on behalf of any Seller by the Seller Representative, as fully binding upon such Seller and each Seller acknowledges that
any such document executed or purported to be executed or action taken shall be binding on such Seller. Each Seller (pro rata based
on each Seller's share of the Consideration) hereby severally, for itself only and not jointly and severally, agrees to indemnify and
hold harmless the Seller Representative against all fees, costs, expenses (including reasonable attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the Seller Representative in connection with any action, suit or
proceeding to which the Seller Representative is made a party by reason of the fact it is or was acting as the Seller Representative
pursuant to the terms of this Agreement.
(d) Exculpation . The Seller Representative shall not have any obligation or liability under this Agreement except
for its obligations under Section 1.4(a) , Section 1.4(d) , Section 1.4(i) , Section 1.6 , Section 2.1(a) , Section 2.1(d) , Section 2.2 ,
Section 2.3 , Section 7.6 , Section 10.1 , Section 10.2 , Section 10.3 , Section 10.4 , Section 10.5 , Section 10.7 , Section 11.7(b) and
Section 12.2(e) or as otherwise as expressly agreed to by the Seller Representative in writing (excluding, for the avoidance of doubt,
this Agreement). The Seller Representative shall not have by reason of this Agreement a fiduciary relationship in respect of any
Seller, except in respect of amounts received on behalf of such Seller. The Seller Representative shall not be liable to any Seller for
any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection
herewith, except that the Seller Representative shall not be relieved of any liability imposed by applicable Law for willful
misconduct, fraud or any criminal acts. The Seller Representative shall not be liable to the Sellers for any apportionment or
distribution of payments made by the Seller Representative in good faith, and if any such apportionment or distribution is
subsequently determined to have been made in error, the sole recourse of any Seller to whom payment was due, but not made, shall
be to recover from other Sellers any payment in excess of the amount to which they are determined to have been entitled. The
Sellers agree that the Seller Representative shall not be required on their behalf to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this Agreement. Neither the Seller Representative nor
any agent employed by it shall incur any liability to any Seller by virtue of the failure or refusal of the Seller Representative for any
reason to consummate the Transactions or relating to the performance of its other duties hereunder, except for actions or omissions
constituting fraud, willful misconduct or criminal acts.
(e) Expenses . From time to time, the Seller Representative may obtain reimbursement for any outstanding
expenses or obligations of the Sellers or the Seller
Representative for which it is due reimbursement under this Agreement and for which it has not been reimbursed prior to such time
and may distribute any or all of the remaining portion of the Representative Holdback Amount to the Sellers in accordance with
Section 2.3(c) , it
being
understood
and agreed that such distribution(s) shall be the responsibility of the Seller Representative only
and Purchaser shall not have any obligation to ensure that such distribution is, or distributions are, made. If the Representative
Holdback Amount is insufficient to reimburse the Seller Representative in full for such expenses, the Seller Representative may
require Purchaser when making any payments to the Sellers otherwise required by this Agreement, to direct to the Seller
Representative sufficient funds from such payments to the Sellers to pay the amount of any such shortfall to the Seller
Representative. Such payment to the Seller Representative shall be deducted from the funds otherwise being directed to the Sellers
and allocated among the Sellers in accordance with Section 2.3(c) .
Section 12.3 Fees and Expenses . Except as otherwise expressly provided herein, whether or not the Transactions are
consummated, all fees and expenses incurred in connection with the preparation, negotiation, execution and performance of the
Transactions and this Agreement shall be paid by the party incurring or required to incur such fees or expenses.
Section 12.4 Amendment or Supplement . At any time prior to the Closing, this Agreement may be amended or
supplemented in any and all respects by written agreement of Purchaser and the Seller Representative by their duly authorized
officers; provided
that such amendment or supplement is promptly delivered to the other Parties.
Section 12.5 Waiver . At any time prior to the earlier of the Closing or the termination of this Agreement in accordance
with its terms, any party may, subject to applicable Law, (a) waive any inaccuracies in the representations and warranties of any
other party hereto, (b) extend the time for the performance of any of the obligations or acts of any other party hereto or (c) waive
compliance by the other party with any of the agreements contained herein or, except as otherwise provided herein, waive any of
such party's conditions. Notwithstanding the foregoing, no failure or delay by any party hereto in exercising any right hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
Section 12.6 Assignment . Neither this Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, in whole or in part, by operation of Law or otherwise, by any of the parties without the prior written consent of the other
parties, except that Purchaser may assign any and all of its rights under this Agreement to one or more of its wholly owned
Subsidiaries (but no such assignment shall relieve Purchaser of any of its obligations hereunder). Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and
permitted assigns. Any purported assignment not permitted under this Section 12.6 shall be null and void.
Section 12.7 Counterparts . This Agreement may be executed in counterparts (each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more
counterparts have been
signed by each of the parties and delivered (by electronic communication, facsimile or otherwise) to the other parties.
Section 12.8 Entire Agreement; Third Party Beneficiaries . This Agreement, including the Disclosure Schedule and the
exhibits hereto, together with the other instruments referred to herein, including the Confidentiality Agreement (a) constitute the
entire agreement, and supersede all other prior and contemporaneous agreements, negotiations and understandings, both written and
oral, among the Parties, or any of them, with respect to the subject matter hereof and thereof and (b) except for (i) the rights of the
D&O Indemnitees and the Sellers' respective Representatives under Section 7.9 , (ii) the rights of the Sellers' respective Affiliates
and Representatives under Section 12.1 , (iii) the rights of the Non-Recourse Parties under Section 12.16 , (iv) the rights of the
Retained Counsel under Section 12.17 and (v) as otherwise expressly provided herein, is not intended to and shall not confer upon
any Person other than the Parties any rights or remedies hereunder.
Section 12.9 Governing Law; Jurisdiction .
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware,
without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction other than the State of Delaware.
(b) Each of the Parties hereby agrees that, other than in connection with any post-Closing adjustments to the
Closing Purchase Price (which shall be addressed in accordance with the procedures set forth in Article II ) (i) all actions and
proceedings arising out of or relating to this Agreement shall be heard and determined in the Chancery Court of the State of
Delaware and any state appellate court therefrom sitting in New Castle County in the State of Delaware (or, if the Chancery Court
of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the State of
Delaware), (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from
any such court and (iii) a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by Law.
(c) Each party irrevocably consents to the service of process outside the territorial jurisdiction of the courts referred
to in this Section 12.9 in any such action or proceeding by mailing copies thereof by registered or certified United States mail,
postage prepaid, return receipt requested, to its address as specified in or pursuant to this Article XII . However, the foregoing shall
not limit the right of a party to effect service of process on the other party by any other legally available method.
Section 12.10 Specific Enforcement . The parties agree that immediate, extensive and irreparable damage would occur
for which monetary damages would not be an adequate remedy in the event that any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached. Accordingly, the parties agree that, if for any reason
Purchaser, any Seller, TG Blocker, VI-C Holdco or the Company shall have failed to perform its obligations under this Agreement or
otherwise breached this Agreement, then the
party seeking to enforce this Agreement against such nonperforming party under this Agreement shall be entitled to specific
performance and the issuance of immediate injunctive and other equitable relief without the necessity of proving the inadequacy of
money damages as a remedy, and the parties further agree to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable relief, this being in addition to and not in limitation of any
other remedy to which they are entitled at law or in equity; provided
, for the avoidance of doubt, that any enforcement of this
Agreement against Purchaser seeking specific enforcement by any Seller, TG Blocker, VI-C Holdco or the Company shall be
asserted by, (x) if such enforcement is sought prior to the Closing, the Company or the Seller Representative, or (y) if such
enforcement is sought after the Closing, by the Seller Representative.
Section 12.11 WAIVER OF JURY TRIAL . EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS.
Section 12.12 Notices . All notices, demands and other communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered, (b) when
transmitted via telecopy (or other facsimile device) to the number set out below if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges prepaid), (c) the day following the day (except if not a
Business Day then the next Business Day) on which the same has been delivered prepaid to a reputable national overnight air courier
service or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid.
Notices, demands and communications, in each case to the respective parties, shall be sent to the applicable address set forth below,
unless another address has been previously specified in writing by such party:
If to Purchaser or Parent, to:
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
Attention: General Counsel
Facsimile: (269) 389-2066
with a copy (which shall not constitute notice) to:
Sullivan & Cromwell LLP

125 Broad Street
New York, New York 10004
Attention: Keith A. Pagnani
Scott B. Crofton
Facsimile: (212) 558-3588
If to the Company (prior to the Closing), to:

Sage Products Holdings II, LLC
c/o Madison Dearborn Partners, LLC
Three First National Plaza
Suite 4600
70 West Madison Street
Chicago, IL 60602
Attention: Mark B. Tresnowski
Facsimile: (312) 895-1041
Kirkland & Ellis LLP

300 North LaSalle
Chicago, Illinois 60654
Attention: Sanford E. Perl, P.C.
Mark A. Fennell, P.C.
Facsimile: (312) 862-2200
If to the Company (after the Closing), to:
Sage Products Holdings II, LLC

c/o Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
Attention: General Counsel
Facsimile: (269) 389-2066
Sullivan & Cromwell LLP

125 Broad Street
New York, New York 10004
Attention: Keith A. Pagnani
Scott B. Crofton
Facsimile: (212) 558-3588
If to the Seller Representative, to:
Sage Products Holdings, LLC

c/o Madison Dearborn Partners, LLC
Three First National Plaza
Suite 4600
70 West Madison Street
Chicago, IL 60602
Attention: Mark B. Tresnowski
Facsimile: (312) 895-1041
Kirkland & Ellis LLP

300 North LaSalle
Chicago, Illinois 60654
Attention: Sanford E. Perl, P.C.
Mark A. Fennell, P.C.
Facsimile: (312) 862-2200
Section 12.13 Severability . If any term or other provision of this Agreement is determined by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, provisions and
conditions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable
manner to the end that the Transactions are fulfilled to the extent possible.
Section 12.14 Definitions . As used in this Agreement, the following terms shall have the meanings ascribed to them
below:
" Acquisition Proposal " means any offer or proposal for, or indication of interest in, a merger, consolidation, stock exchange,
business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or
any of its Subsidiaries, any purchase of more than 10% of the assets of the Company and its Subsidiaries, taken as a whole, or any of
the Company Units or capital stock of any Subsidiary of the Company, other than the Transactions and other than issuances of
Company Units to officers, managers, directors or employees that would only occur if this Agreement is terminated prior to the
Closing and excluding, for the avoidance of doubt, the Transactions.
" Action " means any civil, criminal or administrative actions, suits, complaints, litigations, claims, hearings, arbitrations,
investigations, audits or other similar proceeding.
" Adjustment Amount " shall have the meaning set forth in Section 2.3(a) .
" Adjustment Escrow Account " shall have the meaning set forth in the definition of "Adjustment Escrow Funds."
" Adjustment Escrow Funds " means $13,500,000, which amount is to be deposited by Purchaser with the Escrow Agent into
the "Adjustment Escrow Account" in accordance with the terms of this Agreement and held and released pursuant to the terms and
subject to the conditions set forth in this Agreement and the Escrow Agreement.
" Adjustment Shortfall Amount " shall have the meaning set forth in Section 2.3(a) .
" Affiliate " means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under
common control with, such Person as of the date on which, or at any time during the period for which, the determination of
affiliation is being made. For this
purpose, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether
through the ownership of securities or partnership or other ownership interests, by contract or otherwise; provided
, that for purposes
of Section 3.9 and Section 3.20 , in no event shall the Company or any of its Subsidiaries be considered an Affiliate of any other
portfolio company of any investment fund affiliated with MDP, nor shall any other portfolio company of any investment fund
affiliated with MDP be considered to be an Affiliate of the Company or any of its Subsidiaries.
" Agreement " shall have the meaning set forth in the preamble.
" Allocation Schedule " means the Allocation Schedule attached hereto as Exhibit F as the same is updated from time to time
in accordance with the terms of this Agreement.
" Alternative Arrangements " shall have the meaning set forth in Section 11.6(a) .
" Antitrust Laws " shall have the meaning set forth in Section 7.5(a) .
" Applicable Allocations " means the Allocation Schedule (as determined pursuant to Section 2.1(a) ) and the Asset
Allocation (as determined pursuant to Section 10.7(a) ).
" Applicable Anti-Corruption Laws " shall have the meaning set forth in Section 3.9(c) .
" Asset Allocation " shall have the meaning set forth in Section 10.7(a) .
" Authorized Action " shall have the meaning set forth in Section 12.2(c) .
" Bankruptcy and Equity Exception " shall have the meaning set forth in Section 3.2(a) .
" Base Purchase Price " shall have the meaning set forth in Section 2.1(f) .
" Business Day " means a day except a Saturday, a Sunday or other day on which the banks in Chicago, Illinois or New York,
New York are authorized or required by Law to be closed.
" Call Option " shall have the meaning set forth in the recitals.
" Call Option Agreement " shall have the meaning set forth in the recitals.
" Call Option Exercise Price " shall have the meaning set forth in Section 1.3(b) .
" Call Option Tax Contest " shall have the meaning set forth in Section 10.4(b) .
" Cash " means unrestricted cash and cash equivalents, as determined in accordance with GAAP, and calculated net of any
book overdrafts, issued but uncleared checks and drafts and uncleared ACH payments.
" Cash Amount " means, with respect to the Company and its Subsidiaries, as of the open of business on the Closing Date, all
Cash held by the Company or its Subsidiaries at such time.
" Certificate of Formation " means the certificate of formation of the Company.
" Claim Notice " shall have the meaning set forth in Section 11.4(a) .
" Clayton Act " means the Clayton Act of 1914, as amended.
" Closing " shall have the meaning set forth in Section 1.2 .
" Closing Date " shall have the meaning set forth in Section 1.2 .
" Closing Purchase Price " shall have the meaning set forth in Section 2.1(f) .
" Closing Statement " shall have the meaning set forth in Section 2.1(c) .
" Code " means the Internal Revenue Code of 1986, as amended.
" Company " shall have the meaning set forth in the preamble.
" Company Charter Documents " means the Certificate of Formation and the Company LLC Agreement, as in effect as of the
date of this Agreement.
" Company Employees " shall have the meaning set forth in Section 7.11(a) .
" Company Intellectual Property " means, collectively, (a) Company Owned IP and (b) Company Licensed IP.
" Company Licensed IP " means Intellectual Property that is owned by a third party and licensed to the Company or one or
more of its Subsidiaries.
" Company Loan Agreements " means, collectively, (a) the First Lien Credit Agreement, dated as of December 13, 2012 (as
amended, supplemented or otherwise modified) by and among Sage Products Holdings III, LLC, the Company, the other Guarantors
(as defined therein), Barclays Bank PLC, and each of the lenders party thereto, (b) the Second Lien Credit Agreement, dated as of
December 13, 2012 (as amended, supplemented or otherwise modified) by and among Sage Products Holdings III, LLC, the
Company, the Subsidiary Guarantors (as defined therein), Barclays Bank PLC, and each of the lenders party thereto, (c) the Loan
Agreement, dated as of December 11, 2013, by and between Cary Corners LLC and First Bank & Trust, (d) the Mortgage, Security
Agreement, Assignment of Rents and Leases and Fixture Filing, dated as of December 11, 2013, executed by Cary Corners LLC to
and for the benefit of First Bank & Trust and (e) the Promissory Note issued by Cary Corners LLC payable to First Bank & Trust,
dated December 11, 2013.
" Company LLC Agreement " means that certain Amended and Restated Limited Liability Company Agreement of the
Company, dated as of December 13, 2012, as amended.
" Company Material Adverse Effect " means any change, effect, event, occurrence, state of facts or development
(collectively, " Effects ") that, individually or in the aggregate, is, or would reasonably be expected to (a) prevent the consummation
of the Transactions or (b) be materially
adverse to the financial condition, properties, assets, liabilities, business or results of operations of the Company and its Subsidiaries
taken as a whole; provided
, however
, that none of the following shall be deemed, in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining whether there has been or shall be, a Company
Material Adverse Effect: any change, effect, event, occurrence, state of facts or development attributable (i) to the announcement or
pendency of the Transactions, including any employee attrition and any impact on revenues or relationships with suppliers,
customers or any other Persons having business dealings with the Company or any of its Subsidiaries to the extent Sellers can
reasonably establish the foregoing and provided
that this clause (i) shall not apply to that portion of any representation or warranty
(including in Section 3.2(b)(iii) ) to the extent that the purpose of such portion of such representation or warranty is to address the
consequences resulting from the execution, delivery and performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby, (ii) to conditions affecting the principal industry in which the Company and
its Subsidiaries participate, general political conditions, the economy as a whole or the financial and capital markets in general
(including currency fluctuations and interest rates) or the markets in which the Company and its Subsidiaries operate, (iii) to any
change in, or proposed or potential change in, applicable Laws or the interpretation thereof after the date hereof, (iv) the taking of
any action expressly required by this Agreement (except for any obligation to operate in the ordinary course or similar obligation),
(v) to any change in GAAP or other accounting requirements or principles or the interpretation thereof after the date hereof, (vi) to
the failure of the Company or its Subsidiaries to meet or achieve the results set forth in any projection or forecast ( provided
that this
clause (vi) shall not prevent a determination that any Effect underlying such failure to meet projections or forecasts has resulted in,
or contributed to, a Company Material Adverse Effect (to the extent such Effect is not otherwise excluded from this definition of
Company Material Adverse Effect)), (vii) to the commencement, continuation or escalation of a war, material armed hostilities or
other material international or national calamity or act of terrorism or (viii) to any actual or potential sequester, stoppage, shutdown,
default or similar event or occurrence by or involving any Governmental Authority; provided
further, that in the case of clauses (ii),
(iii), (v), (vii) and (viii) above, if such change, effect, event, occurrence, state of facts or development materially and
disproportionately affects the Company and its Subsidiaries as compared to other Persons or businesses that operate in the principal
industry in which the Company and its Subsidiaries operate, then the disproportionate aspect of such change, effect, event,
occurrence, state of facts or development may be taken into account in determining whether a Company Material Adverse Effect has
or shall occur.
" Company Owned IP " means Intellectual Property that is owned or purported to be owned by the Company or one or more
of its Subsidiaries.
" Company Permits " shall have the meaning set forth in Section 3.9(a) .
" Company Plans " means each material "employee benefit plan" (as such term is defined in Section 3(3) of ERISA) and each
other material employee benefit plan, program or arrangement, including any equity or equity-based plan, bonus or incentive
compensation arrangement, retirement or deferred compensation plan, profit sharing plan, severance compensation plan or
employment agreement, for any current or former employee of the Company or any of its Subsidiaries, that the Company or any of
its Subsidiaries sponsors,
maintains or contributes to, or with respect to which the Company or any of its Subsidiaries has any material liability.
" Company Registered IP " means all Company Owned IP that has been registered, filed, certified or otherwise perfected or
recorded with or by any Governmental Authority or quasi-public legal authority (including domain name registrars), or any
applications for any of the foregoing.
" Company Representations " means the representations and warranties of the Company expressly and specifically set forth in
Article III of this Agreement, as modified by the Disclosure Schedule, and in any certificate delivered by it pursuant to Section 8.2(e)
.
" Company Units " shall have the meaning set forth in the recitals.
" Confidential Information " shall have the meaning set forth in Section 7.7(c) .
" Confidentiality Agreement " means the confidentiality letter agreement, dated November 4, 2015, between Parent and the
Company.
" Consideration " shall have the meaning set forth in Section 1.1 .
" Contract " means any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, lease, license,
contract or other agreement.
" Controlled Group Liability " means any and all liabilities (a) under Title IV of ERISA, (b) under Section 302 of ERISA, (c)
under Sections 412 and 4971 of the Code or (d) as a result of a failure to comply with the continuation coverage requirements of
Section 601 et seq . of ERISA and Section 4980B of the Code.
" Copyright " means copyrightable works, copyrights, database rights and design rights, whether or not registered, including
the right to use, reproduce, display, perform, modify, enhance, distribute and prepare derivative works of any of the foregoing, and
registrations and applications for registration thereof (including all renewals, extensions and reversions thereof), and all rights therein
provided by international treaties or conventions.
" D&O Claim " shall have the meaning set forth in Section 7.9(a) .
" D&O Indemnitee(s) " shall have the meaning set forth in Section 7.9(a) .
" De Minimis Amount " shall have the meaning set forth in Section 11.2(b)(ii) .
" Deductible Amount " shall have the meaning set forth in Section 11.2(b)(ii) .
" Direct Claim " shall have the meaning set forth in Section 11.5 .
" Disclosure Schedule " shall have the meaning set forth in the preamble to Article III .
" Employee Census " shall have the meaning set forth in Section 3.7(a) .
" Environmental Laws " means all Laws relating to pollution, protection of occupational health and safety (with respect to the
management of or exposure to Hazardous Materials), or the protection of the environment, including Laws relating to exposure to, or
Releases or threatened Releases of, Hazardous Materials, as the foregoing are enacted and in effect on or prior to Closing.
" ERISA " means the Employee Retirement Income Security Act of 1974, as amended.
" ERISA Affiliate " means each trade or business, whether or not incorporated, that, together with the Company would be
deemed a "single employer" within the meaning of Section 4001(b) of ERISA or Section 414 of the Code.
" Escrow Agent " shall have the meaning set forth in Section 1.4(i) .
" Escrow Agreement " means the escrow agreement to be executed at Closing by Purchaser, Seller Representative and the
Escrow Agent in substantially the form attached hereto as Exhibit H (with such reasonable modifications thereto as the Escrow
Agent may require).
" Escrow Deposit " means the Indemnity Escrow Funds plus the Adjustment Escrow Funds.
" Estimated Cash Amount " shall have the meaning set forth in Section 2.1(c)(i) .
" Estimated Indebtedness Amount " shall have the meaning set forth in Section 2.1(c)(i) .
" Estimated Net Working Capital Amount " shall have the meaning set forth in Section 2.1(c)(i) .
" Estimated Transaction Expenses " shall have the meaning set forth in Section 2.1(c)(i) .
" Export Control Laws " shall have the meaning set forth in Section 3.9(d) .
" FDA " means the United States Food and Drug Administration.
" FDCA " shall have the meaning set forth in Section 3.19(a) .
" Federal Trade Commission Act " means the Federal Trade Commission Act of 1914.
" Final Closing Purchase Price " shall have the meaning set forth in Section 2.1(g) .
" Final Determination " or " Finally Determined " shall have the meaning set forth in Section 11.7(a) .
" Financial Statements " shall have the meaning set forth in Section 3.6(a) .
" Foreign Plan " shall have the meaning set forth in Section 3.11(a) .
" Fundamental Representations " shall have the meaning set forth in Section 8.2(a)(i) .
" GAAP " means generally accepted accounting principles in the United States.
" Governmental Authority " means any federal, state or local, domestic, foreign or multinational government, court,
regulatory or administrative agency, body, commission, authority or other governmental instrumentality.
" GP " shall have the meaning set forth in the preamble.
" GSA " means the United States General Services Administration.
" Guaranteed Obligations " shall have the meaning set forth in Section 12.19(a) .
" Hazardous Materials " means any material or substance regulated under any Environmental Law because of its hazardous,
dangerous, or deleterious properties or characteristics, including those defined or regulated as a hazardous substance, hazardous
waste, hazardous material, toxic substance, pollutant or contaminant, or with words of similar meaning and regulatory effect, in each
case under any Environmental Law, including asbestos and petroleum.
" HCP or International Distributor Contract " shall have the meaning set forth in Section 7.1(a)(xiv) .
" Holdings " shall have the meaning set forth in the preamble.
" HSR Act " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
" Improvements " shall have the meaning set forth in Section 3.14(d) .
" Indebtedness " means, with respect to any Person, without duplication, any and all liabilities, indebtedness and other
obligations of such Person (a) for borrowed money (including the issuance of any debt security), (b) evidenced by any note, bond,
debenture or other debt security, (c) under financial guarantees, letters of credit, banker's acceptances, surety bonds or similar credit
transactions, (d) in respect of the obligations of a Person other than, as to the Company or any of its Subsidiaries, the Company or
any of its Subsidiaries, that are secured by a Lien against any of such Person's or any of its Subsidiaries' assets or that are guaranteed,
directly or indirectly, by such Person or any of its Subsidiaries, (e) for the deferred purchase price of properties or services with
respect to which a Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current
liabilities incurred in the ordinary course of business), (f) the aggregate net obligation (after netting any assets or positive value of
any of the following) in respect of any derivative financial instruments or arrangements, including interest rate, currency, commodity
or other hedging agreements, swaps, caps, floors, future, forward contracts and option arrangements (valued in each case on the basis
of the amount that would be payable by such Person or its Subsidiaries upon termination using a mark-to-market or other customary
net valuation), (g) under any securitization transaction, (h) any capital lease obligations, which for the avoidance of doubt shall be as
determined in accordance with GAAP, (i) to current or former holders of such Person's capital stock or other equity interests in
respect of dividends or other distributions, issuances or exchanges, and (j) in respect
of principal, fees, accrued interest, guarantees and prepayment premiums or penalties related to any of the foregoing.
Notwithstanding the foregoing, with respect to the Company and its Subsidiaries, "Indebtedness" shall not include any obligations
with respect to (i) the SmartMed Earnout Payments under the SmartMed APA and (ii) any liabilities under any financial guarantees,
letters of credit, banker's acceptances, surety bonds or similar credit transactions to the extent undrawn.
" Indebtedness Amount " means, without duplication, the Indebtedness of the Company and its Subsidiaries on a consolidated
basis as of the open of business on the Closing Date; provided
that, without limiting other liabilities that are not to be included
therein, in no event shall (a) any liabilities related to intercompany debt between the Company and any of its Subsidiaries and/or any
Subsidiary of the Company and another Subsidiary of the Company or (b) any fees and expenses, to the extent incurred by or at the
direction of Purchaser (including obtaining any consent, agreement or waiver relating thereto) for the Transactions or any other
liabilities or obligations incurred or arranged by or on behalf of Purchaser or its Affiliates in connection with the Transactions or
otherwise (including any fees payable to any financing institution or the Company's Representatives on behalf of Purchaser or its
Affiliates), be considered Indebtedness of the Company or its Subsidiaries.
" Indemnifying Party " shall have the meaning set forth in Section 11.4(a) .
" Indemnified Party " shall have the meaning set forth in Section 11.4(a) .
" Indemnity Escrow Account " shall have the meaning set forth in the definition of "Indemnity Escrow Funds."
" Indemnity Escrow Funds " means $138,750,000, which amount is to be deposited by Purchaser into the "Indemnity Escrow
Account" with the Escrow Agent in accordance with the terms of this Agreement and held and released pursuant to the terms and
subject to the conditions set forth in this Agreement and the Escrow Agreement.
" Insurance Policies " means all material insurance policies, risk funding programs or other arrangements (whether any such
policy, program or arrangement is maintained in whole or in part with a third party insurer or with the Company or any of its
Subsidiaries, including any captive insurance policies and self-insured arrangements) maintained by or on behalf of the Company
and its Subsidiaries.
" Intellectual Property " means all Intellectual Property rights and intangible industrial property rights, and all related priority
rights protected, created or arising under the Laws of the United States or any other jurisdiction or under any international
convention, including: (a) all inventions and discoveries (whether patentable or unpatentable and whether or not reduced to practice
and all improvements thereto); (b) all Patents, Trademarks, Copyrights and Trade Secrets; (c) all rights in Internet websites and
Internet domain names and world wide web addresses owned, used or licensed by the Company or any of its Subsidiaries; (d) all
computer programs, operating systems, applications, firmware and other code, including all source code, object code, application
programming interfaces, data files, databases, protocols, specifications
and other documentation thereof; and (e) any rights equivalent to any of the foregoing anywhere in the world. " Intellectual Property
Agreements " means (a) all contracts that are license agreements, non-assertion agreements, coexistence agreements or settlement
agreements, (b) all contracts currently in effect granting to the Company or any of its Subsidiaries any right under or with respect to
any Intellectual Property, including any contracts relating to any royalty or other consideration the Company or any of its
Subsidiaries is obligated to pay to any Person in connection with any Intellectual Property, (c) all contracts under which the
Company or any of its Subsidiaries licenses or grants any rights under any Company Intellectual Property, and (d) all other contracts
with respect to any Intellectual Property (in each case other than expired or otherwise no longer in force or active non-disclosure,
confidentiality and similar agreements, purchase orders and similar agreements, shrink-wrap, click-wrap, and off-the-shelf licenses
for software that are generally commercially available and end-user licenses, in each case, in the ordinary course of business).
" IRS " means the U.S. Internal Revenue Service.
" Knowledge " means the actual knowledge after reasonable inquiry of the following individuals: D. Scott Brown, Richard
Naponelli, Jim Layer, Bill Howes, Terry Boersma, Tammi Buettner, Sean Haley and Vincent J. Foglia.
" Land Purchase Agreement " means the Purchase and Sale Agreement, dated as of December 21, 2015, by and between
Prairie Pointe Land Development Corporation and Sage Products, LLC.
" Latest Audited Balance Sheet " shall have the meaning set forth in Section 3.6(a) .
" Latest Balance Sheet " shall have the meaning set forth in Section 3.6(a) .
" Laws " shall have the meaning set forth in Section 3.9(a) .
" Leased Real Property " shall have the meaning set forth in Section 3.14(b) .
" Liabilities " means any and all debts, liabilities, and obligations of any nature whatsoever, whether accrued or fixed,
absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, those arising
under any Contract, commitment, instrument, permit, license, franchise or undertaking and those arising as a result of any act or
omission.
" Liens " means any pledge, hypothecation, lien, charge, encumbrance, deed of trust, mortgage, right of first refusal, rights of
way, easement, encroachment, security interest and other restrictions or limitations of any kind or nature whatsoever on the use or
ownership in or on any asset, property or property interest.
" Loss Estimate " shall have the meaning set forth in Section 11.4(a) .
" Losses " shall have the meaning set forth in Section 11.2(a) .
" Material Contract " shall have the meaning set forth in Section 3.15(a) .
" MDP " shall have the meaning set forth in Section 12.17 .
" MDP HoldCo " shall have the meaning set forth in the preamble.
" MDP VI-C " shall have the meaning set forth in the preamble.
" Money Laundering Laws " shall have the meaning set forth in Section 3.9(e) .
" Net Working Capital Amount " shall have the meaning set forth in Exhibit D .
" Non-Employee Service Provider Census " shall have the meaning set forth in Section 3.17(b) .
" Non-Recourse Party " means, with respect to a Party, any of such party's former, current and future direct or indirect equity
holders, controlling Persons, directors, officers, employees, legal counsel, financial advisors, agents, representatives, Affiliates,
members, managers, general or limited partners, successors or assignees (or any former, current or future equity holder, controlling
Person, director, officer, employee, legal counsel, financial advisors, agent, representative, Affiliate, member, manager, general or
limited partner, successor or assignee of any of the foregoing), but, in each case and at all times, excluding any Party.
" Notice Period " shall have the meaning set forth in Section 11.4(a) .
" Objections Statement " shall have the meaning set forth in Section 2.2 .
" OFAC " shall have the meaning set forth in Section 3.9(b) .
" OIG " means the United States Department of Health and Human Services Office of the Inspector General.
" Open Source Materials " means all software or other material that is distributed as "free software," "open source software"
or under similar licensing or distribution terms (including but not limited to any license meeting the Open Source Definition (as
promulgated by the Open Source Initiative (www.opensource.org) or the Free Software Definition (as promulgated by the Free
Software Foundation (www.fsf.org)).
" Order " means any decision, determination, judgement, writ, decree (including a consent order or settlement order),
injunction, order, ruling, verdict, award or subpoena of, settlement agreement or similar agreement (including any corporate integrity
agreement, monitoring agreement or deferred prosecution agreement) with, any Governmental Authority.
" Organizational Documents " shall have the meaning set forth in Section 3.4 .
" Outside Date " shall have the meaning set forth in Section 9.1(b)(i) .
" Owned Real Property " shall have the meaning set forth in Section 3.14(a) .
" Parent " shall have the meaning set forth in the preamble.
" Party " and " Parties " shall have the meaning set forth in the recitals.
" Patents " shall mean patents and patent applications (including all letters patent, design patents, provisional applications,
reissues, divisions, continuations, continuations-in-part, renewals, re-examinations, substitutes, patent disclosures and extensions of
any patent or patent application), statutory invention registrations, utility models, community designs and applications therefor,
industrial designs and applications for registration of industrial designs and any patent or application that contains a claim that is
enabled (as that term is used in 35 U.S.C. § 112) by any of the foregoing, any other governmental grant for the protection of
inventions or industrial designs, and all rights to any of the foregoing provided by international treaties or conventions.
" Payoff Persons " shall have the meaning set forth in Section 7.4 .
" Permitted Liens " means: (a) statutory Liens for Taxes, assessments or other charges by Governmental Authorities not yet
due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained on the Financial Statements in accordance with GAAP; (b) mechanics', materialmen's, carriers',
workmen's, repairmen's, warehousemen's, landlords' and other statutory Liens securing obligations that are not yet due and payable
or the validity of which are being contested in good faith by appropriate proceedings and incurred in the ordinary course of business
and for which appropriate reserves are maintained on the Financial Statements in accordance with GAAP; (c) zoning, entitlement,
building and other land use regulations imposed by Governmental Authorities; (d) covenants, conditions, restrictions, easements,
rights-of-way, encroachments and other similar matters of record affecting title to the Leased Real Property that do not materially
impair the occupancy or use of the Leased Real Property for the purposes for which it is currently used in connection with the
Company's and its Subsidiaries' businesses; (e) public roads and highways; (f) matters that would be disclosed by an inspection, title
policy, title report or survey with respect to each applicable real property; (g) Liens arising from deposits made in the ordinary
course of business in connection with obtaining worker's compensation or other unemployment insurance; (h) Liens on real property
that, individually or in the aggregate (i) are not substantial in character, amount or extent in relation to the applicable real property
and (ii) do not materially and adversely impact the Company's and its Subsidiaries' current or contemplated use, utility or value of
the applicable real property or otherwise materially and adversely impair the Company's and its Subsidiaries' present or contemplated
business operations at such location; (i) purchase money Liens and Liens securing rental payments under capital lease arrangements;
(j) leases and subleases or other occupancy agreements to third party tenants disclosed in Section 3.14(a) or Section 3.14(b) of the
Disclosure Schedule; (k) terms and conditions of the leases or other occupancy agreements pursuant to which the Company or any of
its Subsidiaries is a tenant or occupant disclosed in Section 3.14(b) of the Disclosure Schedule; (l) deposits to secure the performance
of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business; and (m) Liens set forth on Section 12.14 of the Disclosure Schedule.
" Person " means an individual, a natural person, a partnership, a company, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization, another entity, or a Governmental
Authority or any department, agency or political subdivision thereof.
" Post-Closing Tax Period " means a taxable period that begins after the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period that begins after the Closing Date.
" Pre-Closing Tax Period " means a taxable period ending on or prior to the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period ending on and including the Closing Date.
" Preliminary Statement " shall have the meaning set forth in Section 2.2 .
" Prior Acquisition Date " means December 13, 2012.
" Products " means all products being developed, tested in clinical trials, manufactured, sold or distributed by the Company
or any of its Subsidiaries.
" PTO " shall have the meaning set forth in Section 3.17(a) .
" Purchased Securities " shall have the meaning set forth in the recitals.
" Purchaser " shall have the meaning set forth in the preamble.
" Purchaser Arrangements " shall have the meaning set forth in Section 3.11(i) .
" Purchaser Benefit Plans " shall have the meaning set forth in Section 7.11(b) .
" Purchaser Indemnified Parties " shall have the meaning set forth in Section 11.2(a) .
" Purchaser Material Adverse Effect " means any change, event, occurrence or effect that would, individually or in the
aggregate, reasonably be expected to prevent the consummation by Purchaser of the Transactions.
" Reference Date " shall have the meaning set forth in Section 3.6(a) .
" Regulatory Laws " shall have the meaning set forth in Section 3.19(b) .
" Regulatory Permits " shall have the meaning set forth in Section 3.19(c) .
" Release " means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment.
" Relevant Tax Period " means (i) with respect to (a) Parent, Purchaser, the Company and any Subsidiary of Parent or
Purchaser other than TG Blocker, the Company and its Subsidiaries and (b) any Subsidiary of the Company that is treated as a
partnership (or disregarded as a separate entity from such a Subsidiary or Person described in clause (a)) for tax purposes, any
Post-Closing Tax Period and (ii) with respect to TG Blocker and any Subsidiary of the Company or TG Blocker that is treated as a
corporation (or disregarded as a separate entity from TG Blocker or such a Subsidiary) for tax purposes, any taxable period.
" Remedial Action " shall have the meaning in Section 7.5(d) .
" Representative Holdback Amount " shall have the meaning set forth in Section 1.4(d) .
" Representatives " means, with respect to any Person, the advisors, attorneys, accountants, consultants, investment bankers
or other representatives (in each case solely to the extent acting in such capacity on behalf of such Person) retained by such Person or
any of its controlled Affiliates, together with directors, managers, officers and employees of such Person and its Subsidiaries.
" Residual Percentage " means the "Residual Percentage" set forth opposite such Seller's name on the Allocation Schedule (as
determined pursuant to Section 2.1(a) ).
" Restraints " shall have the meaning set forth in Section 8.1(b) .
" Restructuring Transactions " shall have the meaning set forth in the recitals.
" Retained Counsel " shall have the meaning set forth in Section 12.17 .
" Sanctions " shall have the meaning set forth in Section 3.9(b) .
" Securities Act " shall have the meaning set forth in Section 3.4 .
" Seller " shall have the meaning set forth in the preamble.
" Seller Indemnified Parties " shall have the meaning set forth in Section 11.3 .
" Seller Representations " means the representations and warranties of the Sellers expressly and specifically set forth in
Article V of this Agreement, as modified by the Disclosure Schedule and in the assignment agreement to be entered into pursuant to
Section 1.4(c) . For the avoidance of doubt, the Seller Representations of each Seller are made solely and separately by such Seller.
" Seller Representative " shall have the meaning set forth in the preamble.
" Shares " shall have the meaning set forth in the recitals.
" Sherman Act " means the Sherman Antitrust Act of 1890, as amended.
" SmartMed APA " means that certain Asset Purchase Agreement, dated January 26, 2015, by and between Sage Products,
LLC and Smart Medical Technology, Inc.
" SmartMed Earnout Payments " shall have the meaning assigned to the term "Earnout Payments" in the SmartMed APA.
" SmartMed Estimated 2016 Earnout Payment Amount " means a good faith estimate, as of the Closing Date, of the amount
of the SmartMed Earnout Payment that will be payable by Sage Products, LLC in 2016 pursuant to the SmartMed APA following
the open of business on the Closing Date; provided
that, for the avoidance of doubt, if such SmartMed Earnout Payment has been
paid by Sage Products, LLC in 2016 pursuant to and in accordance with the SmartMed APA prior to the Closing, the "SmartMed
Estimated 2016 Earnout Payment Amount" shall be $0.00.
" Specified Entities " means any of Parent, Purchaser, TG Blocker, the Company and any Subsidiaries of Parent, Purchaser,
TG Blocker or the Company.
" Straddle Period " means any taxable period that includes, but does not end on, the Closing Date. In the case of any Taxes
that are imposed on or with respect to income, gains, receipts, sales or payments and are payable for a Straddle Period, the portion of
such Taxes related to the Pre-Closing Tax Period shall be deemed equal to the amount that would be payable if the relevant Tax
period ended on and included the Closing Date, and in the case of any other Taxes for a Straddle Period, the portion of such Taxes
related to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a
fraction, the numerator of which is the number of days in the taxable period prior to and including the Closing Date and the
denominator of which is the number of days in such Straddle Period.
" Subsidiary " when used with respect to any Person, means any corporation, limited liability company, partnership,
association, trust or other entity of which securities or other ownership interests representing 50% or more of the equity or 50% or
more of the ordinary voting power (or, in the case of a partnership, 50% or more of the general partnership interests) are, as of such
date, directly or indirectly, owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries of such Person.
" Survival End Date " shall have the meaning set forth in Section 11.1 .
" Tail Coverage " shall have the meaning set forth in Section 7.9(d) .
" Target Net Working Capital Amount " means $43,554,308.00.
" Tax " or " Taxes " means all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments,
including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property,
medical device, abandoned and unclaimed property, escheat and estimated taxes, customs duties and other charges of any kind
whatsoever in the nature of a tax, and all interest, penalties, fines, additions to tax or additional amounts imposed by any
Governmental Authority in connection with any of the foregoing.
" Tax Accountant " shall have the meaning set forth in Section 10.5 .
" Tax Contest " shall have the meaning set forth in Section 10.4(a) .
" Tax Returns " means any return, report, claim for refund, estimate, information return or statement or other similar
document relating to or required to be filed with any Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
" Third Party Claim " shall have the meaning set forth in Section 11.4(a) .
" TG " shall have the meaning set forth in the preamble.
" TG Blocker " shall have the meaning set forth in the preamble.
" TG Blocker Charter Documents " shall mean the Certificate of Incorporation and by-laws of TG Blocker.
" TG Blocker Representations " means the representations and warranties of TG Blocker expressly and specifically set forth
in Article IV of this Agreement, as modified by the Disclosure Schedule. For the avoidance of doubt, the TG Blocker
Representations are solely made by TG Blocker.
" Trade Secrets " means trade secrets, other proprietary know-how and confidential or other proprietary information
(including Confidential Information) relating to technical, financial or business matters, whether patentable or unpatentable,
including inventions, technologies in development, formulae and information, manufacturing, engineering and other drawings and
manuals, recipes, technology, manufacturing processes, test processes, specifications, algorithms, models, methodologies, designs,
lab journals, notebooks, schematics, data, plans, blue prints, research and development reports, agency agreements, technical
information, technical assistance, engineering data, design and engineering specifications and similar materials recording or
evidencing expertise or information, including those related to products under development.
" Trademarks " means trademarks, trade names, service marks, trade dress, logos, slogans, brand names, corporate names,
internet domain names and other indicia of source or origin, whether or not registered, and all goodwill associated with each of the
foregoing, together with all registrations and applications for registration of any of the foregoing (including all renewals thereof).
" Transaction Expenses " means an amount equal to, without duplication, all out-of-pocket (a) costs, (b) fees and expenses,
(c) sale-related bonuses owed to employees of the Company and its Subsidiaries (including Taxes, fees and expenses of the
Company's third-party Representatives) and (d) the cost of the Tail Coverage pursuant to Section 7.9 , which, in each such case, are
due at Closing or payable as of the Closing, and for which the Company or any of its Subsidiaries is primarily liable in connection
with the preparation, negotiation, execution and performance of this Agreement and the Transactions by the Company or its
Subsidiaries, the Seller Representative, or their Affiliates, and, in each case, that have been incurred (or are subject to
reimbursement) prior to and that remain unpaid as of the open of business on the Closing Date and only if triggered without the
requirement of any further action by the Company or its Affiliates on or following the Closing (including any termination of
employment). In no event shall "Transaction Expenses" or the "Net Working Capital Amount" be deemed to include
any fees, liabilities and expenses to the extent incurred by or at that direction of Purchaser (other than any actions or directions given
by Purchaser in connection with enforcing the provisions herein or defending any assertion made in connection therewith) or
otherwise relating to (i) Purchaser's breach of this Agreement, (ii) Purchaser's or its Affiliates' financing (including obtaining any
consent or waiver relating thereto) for the Transactions, (iii) any other liabilities or obligations incurred or arranged by or on behalf
of Purchaser or its Affiliates in connection with the Transactions (including any fees payable to any financing institution or the
Company's Representatives on behalf of Purchaser or its Affiliates) or (iv) any post-Closing agreements, plans or arrangements
between or among Purchaser or its Affiliates, on the one hand, and the Company or its Subsidiaries or Representatives, on the other
hand. Notwithstanding the foregoing, "Transaction Expenses" shall also exclude all costs, fees and expenses and payment obligations
to the extent included in the Indebtedness Amount or the Net Working Capital Amount.
" Transaction Tax Deductions " means any income Tax deductions allowable under applicable Law to TG Blocker, the
Company or any of its Subsidiaries that result from or are attributable to costs, expenses, fees or payments of or by the Sellers, TG
Blocker, the Company or any of its Subsidiaries in connection with the Transactions, including all such amounts that are (a) included
in Net Working Capital Amount, Indebtedness or Transaction Expenses, (b) bonuses, option consideration, the acceleration or
vesting of any equity and any other compensatory amounts payable pursuant to the Transactions and any payroll taxes imposed with
respect thereto, (c) deferred financing fees or (d) investment banking fees.
" Transactions " means, collectively, the purchase and sale of the Purchased Securities and the transactions contemplated by
this Agreement.
" Transfer Taxes " shall have the meaning set forth in Section 10.3 .
" Treasury Regulations " means the United States Department of Treasury regulations, including temporary regulations,
promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of
succeeding regulations).
" Undisclosed Liability Deductible Amount " shall have the meaning set forth in Section 11.2(b)(iii) .
" Undisclosed Liability Loss " shall have the meaning set forth in Section 11.2(b)(iii) .
" Undisclosed Liability Representation Breach " shall have the meaning set forth in Section 11.2(b)(ii) .
" Unit Seller " shall have the meaning set forth in the preamble.
" USRPIs " shall have the meaning set forth in Section 1.4(g) .
" Valuation Firm " shall have the meaning set forth in Section 2.2 .
" VI-C Holdco " shall have the meaning set forth in the preamble.
" WARN Act " shall have the meaning set forth in Section 3.17(c) .
Section 12.15 Interpretation .
(a) When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference shall be
to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The phrase "ordinary course of business" shall mean "ordinary course of business
consistent with past practice." The words "hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references to "$" and
dollars in this Agreement shall mean United States dollars unless otherwise specifically provided. The word "shall" denotes a
directive and obligation, and not an option. As used in this Agreement, "willful breach" shall mean a breach of any representation,
warranty, covenant or other agreement set forth in this Agreement that is a consequence of an act or failure to act by a party with the
actual knowledge that the taking of such act or failure to act would cause a breach. All terms defined in this Agreement shall have
such defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such term. Any statute defined or referred to herein or in any agreement or
instrument that is referred to herein means statute as from time to time amended, modified or supplemented, including by succession
of comparable successor statutes and references to all attachments thereto and instruments incorporated therein and the rules and
regulations promulgated thereunder. Any Agreement or instrument defined or referred to herein means such agreement or
instrument as from time to time amended, modified or supplemented in accordance with its terms, including by waiver or consent
and references to all attachments thereto and instruments incorporated therein, in each case as of the date hereof and only to the
extent such agreements, instruments, waivers, consents and attachments were made available prior to the date hereof. References to
a Person are also to its permitted assigns and successors. For purposes of this Agreement, if the Company or a Person acting on its
behalf posts a document to the online data room hosted on behalf of the Company at www.rrdvenue.com, such document shall be
deemed to have been "delivered," "furnished" or "made available" (or any phrase of similar import) to Purchaser by the Company,
but only if such document is made available to all of Purchaser's Representatives with access to such online date room (except as
otherwise requested by Purchaser or its Representatives before or after the date hereof) as of 11:59 p.m. (Chicago time) on January
29, 2016 and is not subsequently removed prior to the earlier of the Closing and the termination of this Agreement pursuant to
Section 9.1 . References to a "manager" or "managers" of the Company or its Subsidiaries in this Agreement means, with respect to
the Company, a "Manager" as defined in the Company LLC Agreement or, with respect to such a Subsidiary, a director or manager
of such Subsidiary, as applicable.
(b) The Parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this Agreement. The specification of any dollar amount or the
inclusion of any item in the representations and warranties contained in this Agreement or the Disclosure Schedule or Exhibits
attached hereto is not intended to imply that the amounts, or higher or lower amounts, or the items so included, or other items, are or
are not required to be disclosed (including whether such amounts or items are required to be disclosed as material or threatened), are
material or are within or outside of the ordinary course of business, and no party shall use the fact of the setting of the amounts or
the fact of the inclusion of any item in this Agreement or the Disclosure Schedule or Exhibits in any dispute or controversy between
the parties as to whether any obligation, item or matter not described or included in this Agreement or in the Disclosure Schedule or
any Exhibit is or is not required to be disclosed (including whether the amounts or items are required to be disclosed as material or
threatened), is material or is within or outside of the ordinary course of business for purposes of this Agreement. The information
contained in this Agreement and in the Disclosure Schedule and Exhibits hereto is disclosed solely for purposes of this Agreement,
and no information contained herein or therein shall be deemed to be an admission by any party hereto to any third party of any
matter whatsoever (including any violation of Law or breach of contract).
Section 12.16 No Recourse . Notwithstanding any provision of this Agreement or otherwise, but subject to Section 11.10 ,
the Parties agree on their own behalf and on behalf of their respective Subsidiaries and Affiliates that no Non-Recourse Party shall,
other than pursuant to Section 12.19 , have any liability relating to this Agreement or any of the Transactions except to the extent
agreed to in writing by such Non-Recourse Party.
Section 12.17 Provision Respecting Legal Representation . It is acknowledged by each of the Parties that the Company,
the Seller Representative and Madison Dearborn Partners, LLC, a Delaware limited liability company (" MDP "), have retained
Kirkland & Ellis LLP (and its affiliated entity Kirkland & Ellis International LLP), Madden, Jiganti, Moore & Sinars LLP and
Covington & Burling LLP (collectively, the " Retained Counsel ") to act as their counsel in connection with the Transactions and
that the Retained Counsel has not acted as counsel for any other party hereto in connection with the Transactions and that none of the
other Parties has the status of a client of the Retained Counsel for conflict of interest or any other purposes as a result thereof.
Purchaser, TG Blocker and the Company and their respective Subsidiaries hereby agree, on their own behalf and on behalf of their
respective managers, directors, equityholders, members, partners, officers, employees and Affiliates, that, in the event that a dispute
arises after the Closing between Purchaser, TG Blocker, the Company, and/or its Subsidiaries on the one hand, and the Seller
Representative or any Seller, on the other hand, the Retained Counsel may represent the Seller Representative and any Seller in such
dispute even though the interests of the Seller Representative or any Seller may be directly adverse to Purchaser, TG Blocker, the
Company or its Subsidiaries, and even though the Retained Counsel may have represented TG Blocker, the Company or its
Subsidiaries in a matter substantially related to such dispute, or may be handling ongoing matters for Purchaser, TG Blocker, the
Company or any of their Subsidiaries. Purchaser further agrees that, as to all communications among the Retained Counsel, MDP,
TG Blocker (prior to the Closing), the Company (prior to the Closing) and/or its Subsidiaries that relate in any way to the
Transactions, the attorney-client privilege and the expectation of client confidence belongs to the Sellers and shall not pass to or be
claimed by
Purchaser, TG Blocker, the Company or any of their Subsidiaries. Notwithstanding the foregoing, in the event that a dispute arises
between Purchaser, TG Blocker, the Company or any of their Subsidiaries and a third party (other than a party to this Agreement or
any of their respective Affiliates) after the Closing, TG Blocker, the Company and its Subsidiaries may assert the attorney-client
privilege to prevent disclosure of confidential communications by the Retained Counsel to such third party or the use thereof by the
Retained Counsel in connection with its representation of a party in such dispute; provided
, however
, that neither TG Blocker, the
Company nor its Subsidiaries may waive such privilege without the prior written consent of the Seller Representative.
Section 12.18 Delivery by Electronic Transmission . This Agreement and any signed agreement entered into in
connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of
a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail, shall be treated in all manner and respects as
an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof
delivered in person. At the request of any party hereto or to any such contract, each other party hereto or thereto shall re-execute
original forms thereof and deliver them to all other parties. No party hereto or to any such contract shall raise the use of a facsimile
machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail to deliver a signature or the fact that any signature or
contract was transmitted or communicated through the use of facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to
electronic mail as a defense to the formation of a contract and each such party forever waives any such defense.
Section 12.19 Guarantee .
(a) Parent is executing this Agreement solely to guaranty the payment and performance of Purchaser under this
Agreement as set forth below. Parent guarantees irrevocably, absolutely and unconditionally and as a primary obligation (and not as
surety only) that Purchaser shall fully, completely and timely pay and perform all of its obligations and assume all of Purchaser's
liabilities described in this Agreement, in each case, strictly in accordance with the terms hereof (the " Guaranteed Obligations "). If
Purchaser fails or refuses to pay or perform any such obligations and liabilities, Parent shall, without any notice or demand
whatsoever, immediately pay or perform such obligations, as applicable. Parent agrees that this guarantee constitutes a guaranty of
payment when due and not of collection. Parent hereby expressly waives (to the fullest extent permitted by Law) diligence,
presentment, demand of payment, protest and, to the extent permitted by Law, all notices whatsoever, any requirement that any
Party exhaust any right, power or remedy or proceed against Purchaser under this Agreement or any other agreement referred to
herein and any other circumstance (including any statute of limitations) or any existence of or reliance on any representation by the
Company or the Seller Representative that might otherwise constitute a defense available to, or discharge of, Parent or any other
guarantor or surety (other than a discharge of Parent as guarantor with respect to the payment obligations set forth in Section 2.1 as
a result of payment of any such payment obligations in accordance with their terms or as a result of defenses to the payment of any
such payment obligations that would be available under this Agreement to Purchaser and such legal or equitable defenses that are
available to Purchaser under the terms of this Agreement or applicable Law with respect to the Guaranteed Obligations (other than,
in any event, legal or equitable defenses relating to the insolvency, bankruptcy, dissolution, liquidation
or reorganization of Purchaser)). The obligations under this Section 12.19 shall survive the Closing and/or a termination of this
Agreement and continue in full force and effect thereafter.
(b) There are no conditions precedent to the enforcement of this Section 12.19 . Except as otherwise expressly set
forth herein, the obligations of Parent hereunder shall be continuing, absolute and unconditional and such obligations shall be
binding upon Parent, its successors and assigns and inure to the benefit of, and be enforceable by, the Company and the Seller
Representative and its successors and permitted assigns.
(c) Subject to the other provisions herein, this Section 12.19 shall continue to be effective, or be automatically
reinstated, as the case may be, if at any time payment or performance, or any part thereof, of any of the Guaranteed Obligations is
rescinded or must otherwise be restored, returned or rejected by a Party for any reason, including upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Purchaser, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, Purchaser or any substantial part of its property, or otherwise, all as though such
payments had not been made. Except for those set forth in clause (a) to this Section 12.19 , Parent hereby waives all claims of
waiver, release, surrender, abstraction or compromise and all set-offs, counterclaims, cross-claims, recoupments or other defenses
that it may have against the Sellers with respect to the Guaranteed Obligations, as the case may be, except for those available to
Purchaser under this Agreement. Notwithstanding anything to the contrary herein, the obligations of Parent hereunder are
unconditional and irrevocable and will not be discharged by: (i) any modification of, or amendment or supplement to, this
Agreement, (ii) any furnishing or acceptance of security or exchange or release of any security or (iii) any waiver, consent or other
action or inaction or any exercise or non-exercise of any right, remedy or power with respect to Purchaser or any change in the
structure of Purchaser.
(d) Representations and Warranties of Parent . Parent represents and warrants to the Company and the Sellers:
(i) Parent is a corporation duly organized, validly existing and in good standing under the laws of the State
of Michigan. Parent has all requisite corporate power, authority and capacity necessary to execute and deliver this Agreement
and to perform its obligations hereunder. The execution and delivery of and performance by Parent under this Agreement
have been duly authorized and approved by all necessary corporate action by Parent, and no other corporate action on the part
of Parent is necessary to authorize the execution and delivery of and performance by Parent under this Agreement. This
Agreement has been duly and validly executed and delivered by Parent and, assuming due authorization, execution and
delivery hereof by the other Parties (other than Purchaser), constitutes a legal, valid and binding obligation of Parent,
enforceable against Parent, subject to the Bankruptcy and Equity Exception. No vote or approval of the holders of any class
or series of shares of Parent is necessary for Parent's execution of, and performance of its obligations under, this Agreement.
(ii) Neither the execution, delivery and performance of this Agreement by Parent, nor compliance by Parent
with any of the terms or provisions hereof, will (x) conflict with or violate any provision of the certificate of incorporation
and bylaws of
Parent, or (y) assuming that each of the required approvals referred to in Section 3.3 , Section 5.4 and Section 6.3 is obtained,
violate any Law applicable to Parent or any of its Subsidiaries or any of their respective assets or properties, (z) require any
consent or other action by any Person under, result in any breach of, or constitute a default or an event that with or without
notice or lapse of time or both, would constitute a default under, or give rise to any right of termination, amendment,
acceleration or cancellation of any right or obligation of Parent or any of its Subsidiaries or to a loss of benefit to which
Parent or any of its Subsidiaries is entitled under any provision of any Contract binding upon Parent or any of its Subsidiaries
or any of their respective assets or properties, except, in the case of clauses (y) and (z), as would not reasonably be expected,
individually or in the aggregate, to have a material adverse effect on Parent's ability to perform its obligations under this
Agreement.
(iii) Except for filings required under, and compliance with other applicable requirements of, the HSR Act,
no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority are necessary for the
execution and delivery of this Agreement by Parent, other than as would not reasonably be expected, individually or in the
aggregate, to have a material adverse effect on Parent's ability to perform its obligations hereunder.
(iv) Parent has or shall have the financial capability to perform its obligations under this Section 12.19 when
due, and Parent understands that, under the terms of this Agreement, Parent's obligations hereunder are not in any way
contingent or otherwise subject to (x) the consummation by Parent or any of its Affiliates of any financing arrangements, (y)
Parent or any of its Affiliates obtaining any financing or (z) the availability of any financing to Parent or any of its Affiliates.
(v) There is no pending or, to the Knowledge of Parent, threatened Action against Parent, nor is there any
Order imposed upon Parent, in each case, by or before any Governmental Authority, that would reasonably be expected,
individually or in the aggregate, to have a material adverse effect on Parent's ability to perform its obligations hereunder.
[signature pages follow]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and delivered as of the date first
above written.
Company: SAGE PRODUCTS HOLDINGS II, LLC

By: /s/ D. Scott Brown
Name: D. Scott Brown
Its: Chief Executive Officer and Vice Chairman
MDP VI-C: MADISON DEARBORN CAPITAL PARTNERS VI-C, L.P.
By: Madison Dearborn Partners VI-A&C, L.P.

Its: General Partner
By: Madison Dearborn Partners, LLC

By: /s/ Timothy P. Sullivan

Name: Timothy P. Sullivan
Its: Managing Director
VI-C Holdco:
MDCP VI-C SAGE HOLDINGS, INC.

TG: /s/ Thomas Glanzmann
Thomas Glanzmann
TG Blocker: TG SP HOLDINGS CORP.
By: /s/ Thomas Glanzmann
Name: Thomas Glanzmann
Its: President and Secretary
GP: MADISON DEARBORN PARTNERS VI-B, L.P.
By: Madison Dearborn Partners, LLC


MDP HoldCo: MDP SAGE HOLDINGS, LLC

Holdings:
SAGE PRODUCTS HOLDINGS, LLC, in its capacity as a
Seller and as the Seller Representative
By: /s/ D. Scott Brown

Name: D. Scott Brown
Its: Chief Executive Officer and Vice Chairman
Purchaser: STAR ACQUISITION SUB INC.
By: /s/ Jeanne M. Blondia

Name: Jeanne M. Blondia Its: Vice President and Treasurer
Parent: STRYKER CORPORATION (solely for purposes of
Section 12.19 )
By: /s/ Kevin Lobo

Name: Kevin Lobo Its: Chairman and Chief Executive Officer
EXHIBIT A
Restructuring Transactions
EXHIBIT B
Form of Call Option Assignment

EXHIBIT C-1
Form of Company FIRPTA Certificate

EXHIBIT C-2
Form of TG Blocker FIRPTA Certificate

EXHIBIT C-3
Form of MDP VI-C FIRPTA Certificate

EXHIBIT D
Definition of Net Working Capital Amount

EXHIBIT E
Rules of Engagement for Valuation Firm

EXHIBIT F
Allocation Schedule
EXHIBIT G
Illustrative Calculation of Net Working Capital Amount

EXHIBIT H
Form of Escrow Agreement

EXHIBIT I-1
Form of Company Unit Transfer Power

EXHIBIT I-2
Form of TG Blocker Stock Transfer Power

Exhibit 10iii
Personal and confidential
February 10, 2016
First Name Last Name
Dear First Name:
I am pleased to inform you that you are one of a select group of individuals receiving a stock option award in 2016. We use these awards to reward performers who
we believe will be key contributors to our growth well into the future. The total Award Date Value (ADV) of your award is approximately $xx,xxx.
We are awarding you a nonstatutory stock option for xxx shares of Stryker Corporation Common Stock at a price of $xx.xx per share. Except as otherwise
provided in the Terms and Conditions, you may exercise this option at 20% per year beginning on February 10, 2017, and it will expire on February 9, 2026.
You must “Accept” the award online via the UBS One Source web site located at www.ubs.com/onesource/SYK between March 1 and March 31, 2016 .
The detailed terms of the option are in the Terms and Conditions, any applicable country addendum and the provisions of the Company's 2011 Long-Term
Incentive Plan. Those documents, together with the related Prospectus, are available on the UBS One Source web site, and you should read them before accepting
the awards.
You can find additional educational materials on the UBS One Source web site in the Library section, including Stock Option, Stock Option and Stock Option Tax
Questions & Answers.
Stryker’s success makes it possible for us to invest in people like you. Thank you for your efforts in helping us deliver great results. With your help, I look forward
to another successful year.
Sincerely,
Kevin A. Lobo
Chairman and CEO
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STRYKER CORPORATION
TERMS AND CONDITIONS

RELATING TO NONSTATUTORY STOCK OPTIONS GRANTED
PURSUANT TO THE 2011 LONG-TERM INCENTIVE PLAN
1. The Options to purchase Shares of Stryker Corporation (the “Company”) granted to you during 2016 are subject to
these Terms and Conditions Relating to Nonstatutory Stock Options Granted Pursuant to the 2011 Long-Term Incentive Plan, as
amended (the “Terms and Conditions”) and all of the terms and conditions of the Stryker Corporation 2011 Long-Term Incentive
Plan (the “2011 Plan”), which is incorporated herein by reference. In the case of a conflict between these Terms and Conditions and
the terms of the 2011 Plan, the provisions of the 2011 Plan will govern. Capitalized terms used but not defined herein have the
meaning provided therefor in the 2011 Plan. For purposes of these Terms and Conditions, “Employer” means the Company or any
Subsidiary that employs you on the applicable date.
2. Upon the termination of your employment with your Employer, your right to exercise the Options shall be only as
follows:
(a) If your employment is terminated by Retirement (as such term is defined in the 2011 Plan or determined under
local law), you or your estate (in the event of your death after your termination by Retirement) shall have the right, at any time on or
prior to the 10 th anniversary of the grant date, to exercise the Options with respect to all or any part of the Shares subject thereto,
regardless of whether the right to purchase Shares had vested on or before the date of your termination by Retirement.
(b) If your employment is terminated by reason of Disability (as such term is defined in the 2011 Plan or determined under
local law) or death, you, your legal representative or your estate shall have the right, for a period of one year following such
termination, to exercise the Options with respect to all or any part of the Shares subject thereto, regardless of whether the right to
purchase such Shares had vested on or before the date of your termination by Disability or death.
(c) If you cease to be an Employee for any reason other than those provided in (a) or (b) above, you or your estate
(in the event of your death after such termination) may, within the thirty (30)-day period following such termination, exercise the
Options with respect to only such number of Shares as to which the right of exercise had vested on or before the Termination Date. If
you are a resident of or employed in the United States, “Termination Date” shall mean the effective date of termination of your
employment with your Employer. If you are resident or employed outside of the United States, “Termination Date” shall mean the
earliest of (i) the date on which notice of termination is provided to you, (ii) the last day of your active service with your Employer
or (iii) the last day on which you are an Employee of your Employer, as determined in each case without including any required
advance notice period and irrespective of the status of the termination under local labor or employment laws.
(d) Notwithstanding the foregoing, the Options shall not be exercisable in whole or in part (i) after the 10 th
anniversary of the grant date or (ii) except as provided in Section 3(c) hereof or in the event of termination of employment because
of Disability, Retirement or death, unless you shall have continued in the employ of the Company or one of its Subsidiaries for one
(1) year following the date of grant of the Options.
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(e) Notwithstanding the foregoing, if you are eligible for Retirement but cease to be an Employee for any other
reason before you retire, the right to exercise the Options shall be determined as if your employment ceased by reason of Retirement.
(f) If you are both an Employee and a Director, the provisions of this Section 2 shall not apply until such time as
you are neither an Employee nor a Director.
3. The number of Shares subject to the Options and the price to be paid therefor shall be subject to adjustment and the term
and exercise dates hereof may be accelerated as follows:
(a) In the event that the Shares, as presently constituted, shall be changed into or exchanged for a different number
or kind of shares of stock or other securities of the Company or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or otherwise) or if the number of such Shares shall be increased
through the payment of a stock dividend or a dividend on the Shares of rights or warrants to purchase securities of the Company
shall be made, then there shall be substituted for or added to each Share theretofore subject to the Options the number and kind of
shares of stock or other securities into which each outstanding Share shall be so changed, or for which each such Share shall be
exchanged, or to which each such Share shall be entitled. The Options shall also be appropriately amended as to price and other
terms as may be necessary to reflect the foregoing events. In the event there shall be any other change in the number or kind of the
outstanding Shares, or of any stock or other securities into which such Common Stock shall have been exchanged, then if the
Committee shall, in its sole discretion, determine that such change equitably requires an adjustment in the Options, such adjustment
shall be made in accordance with such determination.
(b) Fractional Shares resulting from any adjustment in the Options may be settled in cash or otherwise as the
Committee shall determine, in its sole discretion. Notice of any adjustment will be given to you and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes hereof.
(c) The Committee shall have the power to amend the Options to permit the exercise of the Options (and to
terminate any unexercised Options) prior to the effectiveness of (i) any disposition of substantially all of the assets of the Company
or your Employer, (ii) the shutdown, discontinuance of operations or dissolution of the Company or your Employer, or (iii) the
merger or consolidation of the Company or your Employer with or into any other unrelated corporation.
4. To exercise the Options, you must complete the on-line exercise procedures as established through UBS, the outsourced
stock plan administration vendor, at www.ubs.com/onesource/SYK or by telephone at +1 860 727 1515 (or such other direct dial-in
number that may be established from time to time). As part of such procedures, you shall be required to specify the number of Shares
that you elect to purchase and the date on which such purchase is to be made, and you shall be required to make full payment of the
Exercise Price. An Option shall not be deemed to have been exercised (i.e., the exercise date shall not bedeemed to have occurred)
until the notice of such exercise and payment in full of the Exercise Price are provided. The exercise date will be defined by the New
York Stock Exchange (NYSE) trading hours. If an exercise is completed after the market close or on a weekend, the exercise will be
dated the next following trading day.
The Exercise Price may be paid in such manner as the Committee may specify from time to time in its sole discretion and as
established through UBS, including (but not limited to) the two following methods:
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(i) by a net exercise arrangement pursuant to which the Company will reduce the number of Shares issued upon exercise by the
largest whole number of Shares with an aggregate Fair Market Value on the date of purchase sufficient to cover the aggregate
Exercise Price or (ii) cash payment. In cases where you utilize the net exercise arrangement and the Fair Market Value of the number
of whole Shares withheld is greater than the aggregate Exercise Price, the Company shall make a cash payment to you equal to the
difference as soon as administratively practicable.
5. Regardless of any action the Company and/or your Employer take with respect to any or all income tax (including U.S.
federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related
withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and
remains your responsibility and that the Company and your Employer (i) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the Options, including the grant of the Options, the vesting of
the Options, the exercise of the Options, the subsequent sale of any Shares acquired pursuant to the Options and the receipt of any
dividends and (ii) do not commit to structure the terms of the grant or any aspect of the Options to reduce or eliminate your liability
for Tax-Related Items. Further, if you become subject to taxation in more than one country between the grant date and the date of
any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company and/or the Employer (or former
employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one country.
Prior to the delivery of Shares upon exercise of your Options, if your country of residence (and/or your country of
employment, if different) requires withholding of Tax-Related Items, the Company shall withhold a sufficient number of whole
Shares otherwise issuable upon exercise of the Options that have an aggregate Fair Market Value sufficient to pay the minimum Tax-
Related Items required to be withheld with respect to the Shares. In cases where the Fair Market Value of the number of whole
Shares withheld is greater than the minimum Tax-Related Items required to be withheld, the Company shall make a cash payment to
you equal to the difference as soon as administratively practicable. The cash equivalent of the Shares withheld will be used to settle
the obligation to withhold the Tax-Related Items. Alternatively, your Employer may withhold the minimum Tax-Related Items
required to be withheld with respect to the Shares in cash from your regular salary and/or wages, or other amounts payable to you. In
the event the withholding requirements are not satisfied through the withholding of Shares or through your regular salary and/or
wages or any other amounts payable to you by your Employer, no Shares will be issued to you (or your estate) upon exercise of the
Options unless and until satisfactory arrangements (as determined by the Board of Directors) have been made by you with respect to
the payment of any Tax-Related Items that the Company or your Employer determines, in its sole discretion, must be withheld or
collected with respect to such Options. By accepting these Options, you expressly consent to the withholding of Shares and/or
withholding from your regular salary and/or wages or other amounts payable to you as provided for hereunder. All other Tax-Related
Items related to the Options and any Shares delivered in payment thereof are your sole responsibility.
6. The Options are intended to be exempt from the requirements of Code Section 409A. The 2011 Plan and these Terms
and Conditions shall be administered and interpreted in a manner consistent with this intent. If the Company determines that these
Terms and Conditions are subject to Code Section 409A and that it has failed to comply with the requirements of that Section, the
Company may, at the Company’s sole discretion and without your consent, amend these Terms and Conditions to cause them to
comply with Code Section 409A or be exempt from Code Section 409A.
7. If you were required to sign the “Stryker Confidentiality, Intellectual Property, Non-Competition and Non-Solicitation
Agreement” or a similar agreement in order to receive the Options or have
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previously signed such an agreement and you breach any non-competition, non-solicitation or non-disclosure provision or provision
as to ownership of inventions contained therein at any time while employed by the Company or a subsidiary or during the one-year
period following termination of employment, any unexercised portion of the Options shall be rescinded and you shall return to the
Company all Shares that were acquired upon exercise of the Options that you have not disposed of and the Company shall repay you
an amount for each such Share equal to the lesser of the Exercise Price or the Fair Market Value of a Share at such time. Further, you
shall pay to the Company an amount equal to the profit realized by you (if any) on all Shares that were acquired upon exercise of the
Options that you have disposed of. For purposes of the preceding sentence, the profit shall be the positive difference between the
Fair Market Value of the Shares at the time of disposition and the Exercise Price.
8. The Options shall be transferable only by will or the laws of descent and distribution and shall be exercisable during
your lifetime only by you. If you purport to make any transfer of the Options, except as aforesaid, the Options and all rights
thereunder shall terminate immediately.
9. If you are resident or employed outside of the United States, you agree, as a condition of the grant of the Options, to
repatriate all payments attributable to the Shares and/or cash acquired under the 2011 Plan (including, but not limited to, dividends
and any proceeds derived from the sale of the Shares acquired pursuant to the Options) if required by and in accordance with local
foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you also
agree to take any and all actions, and consent to any and all actions taken by the Company and its Subsidiaries, as may be required to
allow the Company and its Subsidiaries to comply with local laws, rules and regulations in your country of residence (and country of
employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal legal and
tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).
10. If you are resident or employed in a country that is a member of the European Union, the grant of the Options and
these Terms and Conditions are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework
Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent
jurisdiction determines that any provision of these Terms and Conditions is invalid or unenforceable, in whole or in part, under the
Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision
to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
11. The Options shall not be exercisable in whole or in part, and the Company shall not be obligated to issue any Shares
subject to the Options, if such exercise and sale would, in the opinion of counsel for the Company, violate the Securities Act of 1933
or any other U.S. federal, state or non-U.S. statute having similar requirements as it may be in effect at the time. The Options are
subject to the further requirement that, if at any time the Board of Directors shall determine in its discretion that the listing or
qualification of the Shares subject to the Options under any securities exchange requirements or under any applicable law, or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition of or in connection with the
issuance of Shares pursuant to the Options, the Options may not be exercised in whole or in part unless such listing, qualification,
consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors.
12. The grant of the Options shall not confer upon you any right to continue in the employ of your Employer nor limit in
any way the right of your Employer to terminate your employment at any time.
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You shall have no rights as a shareholder of the Company with respect to any Shares issuable upon the exercise of the Options until
the date of issuance of such Shares.
13. You acknowledge and agree that the 2011 Plan is discretionary in nature and may be amended, cancelled or terminated
by the Company, in its sole discretion, at any time. The grant of the Options under the 2011 Plan is a one-time benefit and does not
create any contractual or other right to receive a grant of stock options or benefits in lieu of stock options in the future. Future grants,
if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of
Shares subject to the grant, the vesting provisions and the exercise price. Any amendment, modification or termination of the 2011
Plan shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.
14. Your participation in the 2011 Plan is voluntary. The value of the Options and any other awards granted under the
2011 Plan is an extraordinary item of compensation outside the scope of your employment (and your employment contract, if any).
Any grant under the 2011 Plan, including the grant of the Options, is not part of normal or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension, or retirement
benefits or similar payments.
15. These Terms and Conditions shall bind and inure to the benefit of the Company, its successors and assigns and you
and your estate in the event of your death.
16. The Options are Nonstatutory Stock Options and shall not be treated as Incentive Stock Options.
17. The Company and your Employer hereby notify you of the following in relation to your personal data and the
collection, processing and transfer of such data in relation to the grant of the Options and your participation in the 2011 Plan
pursuant to applicable personal data protection laws. The collection, processing and transfer of your personal data is necessary for
the Company’s administration of the 2011 Plan and your participation in the 2011 Plan, and your denial and/or objection to the
collection, processing and transfer of personal data may affect your ability to participate in the 2011 Plan. As such, you voluntarily
acknowledge, consent and agree (where required under applicable law) to the collection, use, processing and transfer of personal
data as described herein.
The Company and your Employer hold certain personal information about you, including (but not limited to) your name,
home address and telephone number, date of birth, social security number or other employee identification number, salary,
nationality, job title, any Shares or directorships held in the Company, details of all Options or any other entitlement to Shares
awarded, canceled, purchased, vested, unvested or outstanding in your favor for the purpose of managing and administering the 2011
Plan (“Data”). The Data may be provided by you or collected, where lawful, from third parties, and the Company and your Employer
will process the Data for the exclusive purpose of implementing, administering and managing your participation in the 2011 Plan.
The data processing will take place through electronic and non-electronic means according to logics and procedures strictly
correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable
laws and regulations in your country of residence. Data processing operations will be performed minimizing the use of personal and
identification data when such information is unnecessary for the processing purposes sought. The Data will be accessible within the
Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of
the 2011 Plan and for your participation in the 2011 Plan.
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The Company and your Employer will transfer Data as necessary for the purpose of implementation, administration and
management of your participation in the 2011 Plan, and the Company and your Employer may each further transfer Data to any third
parties assisting the Company in the implementation, administration and management of the 2011 Plan. These recipients may be
located in the European Economic Area, the United States or elsewhere throughout the world. You hereby authorize (where required
under applicable law) the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of
implementing, administering and managing your participation in the 2011 Plan, including any requisite transfer of such Data as may
be required for the administration of the 2011 Plan and/or the subsequent holding of Shares on your behalf to a broker or other third
party with whom you may elect to deposit any Shares acquired pursuant to the 2011 Plan.
You may, at any time, exercise your rights provided under applicable personal data protection laws, which may include the
right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c) request the
integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data, and (d) oppose, for legal reasons,
the collection, processing or transfer of the Data that is not necessary or required for the implementation, administration and/or
operation of the 2011 Plan and your participation in the 2011 Plan. You may seek to exercise these rights by contacting your local
HR manager.
18. The grant of the Options is not intended to be a public offering of securities in your country of residence (and country
of employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local
securities authorities (unless otherwise required under local law). No employee of the Company is permitted to advise you on
whether you should purchase Shares under the 2011 Plan or provide you with any legal, tax or financial advice with respect
to the grant of your Options. Investment in Shares involves a degree of risk. Before deciding to purchase Shares pursuant to
the Options, you should carefully consider all risk factors and tax considerations
relevant to the acquisition of Shares under the 2011 Plan or the disposition of them. Further, you should carefully review all
of the materials related to the Options and the 2011 Plan, and you should consult with your personal legal, tax and financial
advisors for professional advice in relation to your personal circumstances.
19. All questions concerning the construction, validity and interpretation of the Options and the 2011 Plan shall be
governed and construed according to the laws of the state of Michigan, without regard to the application of the conflicts of laws
provisions thereof. Any disputes regarding the Options or the 2011 Plan shall be brought only in the state or federal courts of the
state of Michigan.
20. The Company may, in its sole discretion, decide to deliver any documents related to the Options or other awards
granted to you under the 2011 Plan by electronic means. You hereby consent to receive such documents by electronic delivery and
agree to participate in the 2011 Plan through an on-line or electronic system established and maintained by the Company or a third
party designated by the Company.
21. The invalidity or unenforceability of any provision of the 2011 Plan or these Terms and Conditions shall not affect the
validity or enforceability of any other provision of the 2011 Plan or these Terms and Conditions.
22. If you are resident outside of the United States, you acknowledge and agree that it is your express intent that these
Terms and Conditions, the 2011 Plan and all other documents, notices and legal
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proceedings entered into, given or instituted pursuant to the Options be drawn up in English. If you have received these Terms and
Conditions, the 2011 Plan or any other documents related to the Options translated into a language other than English and the
meaning of the translated version is different than the English version, the English version will control.
23. Notwithstanding any provisions of these Terms and Conditions to the contrary, the Options shall be subject to any
special terms and conditions for your country of residence (and country of employment, if different) set forth in an addendum to
these Terms and Conditions (an “Addendum”). Further, if you transfer your residence and/or employment to another country
reflected in an Addendum to these Terms and Conditions at the time of transfer, the special terms and conditions for such country
will apply to you to the extent the Company determines, in its sole discretion, that the application of such special terms and
conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and
administration of the award and the 2011 Plan (or the Company may establish alternative terms and conditions as may be necessary
or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of these Terms and
Conditions.
24. The Company reserves the right to impose other requirements on the Options, any Shares acquired pursuant to the
Options and your participation in the 2011 Plan to the extent the Company determines, in its sole discretion, that such other
requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and
administration of the award and the 2011 Plan. Such requirements may include (but are not limited to) requiring you to sign any
agreements or undertakings that may be necessary to accomplish the foregoing.
25. Notwithstanding any other provision of this Agreement to the contrary, you acknowledge and agree that your Options,
any Shares acquired pursuant thereto and/or any amount received with respect to any sale of such Shares are subject to potential
cancellation, recoupment, rescission, payback or other action in accordance with the terms of the Company’s Recoupment Policy as
in effect on the date of grant (a copy of which has been furnished to you) and as the Recoupment Policy may be amended from time
to time in order to comply with changes in laws, rules or regulations that are applicable to such Options and Shares. You agree and
consent to the Company’s application, implementation and enforcement of (a) the Recoupment Policy and (b) any provision of
applicable law relating to cancellation, recoupment, rescission or payback of compensation and expressly agree that the Company
may take such actions as are necessary to effectuate the Recoupment Policy (as applicable to you) or applicable law without further
consent or action being required by you. For purposes of the foregoing, you expressly and explicitly authorize the Company to issue
instructions, on your behalf, to any brokerage firm and/or third party administrator engaged by the Company to hold your Shares and
other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company.
To the extent that the terms of this Agreement and the Recoupment Policy conflict, the terms of the Recoupment Policy shall prevail.
1
26. By accepting the grant of Options, you acknowledge that you have read these Terms and Conditions, the
Addendum to these Terms and Conditions (as applicable) and the 2011 Plan, and specifically accept and agree to the
provisions therein.
1 Applicable only to corporate officers elected by the Board of Directors other than Assistant Secretaries, Assistant Treasurers, and Assistant Controllers.
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STRYKER CORPORATION
ADDENDUM TO
PURSUANT TO THE 2011 PLAN
In addition to the terms of the 2011 Plan and the Terms and Conditions, the Options are subject to the following additional terms and
conditions (the “Addendum”). All capitalized terms as contained in this Addendum shall have the same meaning as set forth in the
2011 Plan and the Terms and Conditions. Pursuant to Section 23 of the Terms and Conditions, if you transfer your residence and/or
employment to another country reflected in an Addendum at the time of transfer, the special terms and conditions for such country
will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is
necessary or advisable in order to comply with local law, rules and regulations, or to facilitate the operation and administration of the
award and the 2011 Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to
accommodate your transfer).
ARGENTINA
1. Net Exercise Only . Notwithstanding anything in Section 4 or Section 5 of the Terms and Conditions to the contrary, if
you are a local national of Argentina, you may exercise the Options only by means of a net exercise arrangement pursuant to which
the Company will reduce the number of Shares issued upon exercise by the largest whole number of Shares with an aggregate Fair
Market Value on the date of purchase sufficient to cover the aggregate Exercise Price and any Tax-Related Items.
AUSTRALIA
1. Options Conditioned on Satisfaction of Regulatory Obligations . If you are (a)
a director of a Subsidiary incorporated in Australia, or (b) a person who is a management-level
executive of a Subsidiary incorporated in Australia and who also is a director of a Subsidiary
incorporated outside of the Australia, the grant of the Options is conditioned upon satisfaction
of the shareholder approval provisions of section 200B of the Corporations Act 2001 (Cth) in
Australia.
The Australian Offer Document can be accessed at [UBS INSERT LINK HERE]
BELGIUM
Name: ___________________________ Number of Shares: _____________________
Date of Grant: ___________________________ Exercise Price: _____________________
1. Acceptance of Options . For the Options to be subject to taxation at the time of grant, you must affirmatively accept the
Options in writing within 60 days of the date of grant specified above by signing below and returning this original executed
Addendum to:
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Stock Plan Administration Department
2825 Airview Blvd.
Kalamazoo, Michigan 49002 (U.S.A)
I hereby accept the ________ (number) Options granted to me by the Company on the date of grant. I also acknowledge that I have
been encouraged to discuss the acceptance of the Options and the applicable tax treatment with a financial and/or tax advisor, and
that my decision to accept the Options is made with full knowledge of the applicable consequences.
Employee Signature: _______________________________
Employee Printed Name: _______________________________
Date of Acceptance: _______________________________
If you fail to affirmatively accept the Options in writing within 60 days of the date of grant, the Options will not be subject to
taxation at the time of grant but instead will be subject to taxation on the date you exercise the Options (or such other treatment as
may apply under Belgian tax law at the time of exercise).
2. Payment of Exercise Price Limited to Cash Payment . Notwithstanding anything to the contrary in Section 4 of the
Terms and Conditions, you shall be permitted to pay the Exercise Price only by means of a cash payment (and the net exercise
method shall not be permitted).
3. Undertaking for Qualifying Options . If you are accepting the Options in writing within 60 days of the date of grant and
wish to have the Options subject to a lower valuation for Belgium tax purposes pursuant to the article 43, §6 of the Belgian law of 26
March 1999, you may agree and undertake to (a) not exercise the Options before the end of the third calendar year following the
calendar year in which the date of grant falls, and (b) not transfer the Options under any circumstances (except on rights your heir
might have in the Options upon your death). If you wish to make this undertaking, you must sign below and return this executed
Addendum to the address listed above.
Employee Signature: _______________________________
Employee Printed Name: _______________________________
BRAZIL
1. Labor Law Acknowledgment . By accepting the Options, you acknowledge and agree, for all legal purposes, that (a) the
benefits provided under the Terms and Conditions and the 2011 Plan are the result of commercial transactions unrelated to your
employment; (b) the Terms and Conditions and the 2011 Plan are not a part of the terms and conditions of your employment; and (c)
the income from the Options, if any, is not part of your remuneration from employment.
2. Compliance with Law . By accepting the Options, you acknowledge and agree your agreement to comply with
applicable Brazilian laws and to pay any and all applicable taxes associated with the exercise of the Options, the issuance and/or sale
of Shares acquired under the Plan and the receipt of any dividends.
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CANADA
1. No Exercise by Using Previously Owned Shares . Notwithstanding anything in Section 4 of the Terms and Conditions
to the contrary, if you are resident in Canada, you shall not be permitted to use previously-owned Shares for exercising the Options.
2. Use of English Language . If you are a resident of Quebec, by accepting the Options, you acknowledge and agree that it
is your express wish that the Terms and Conditions, this Addendum, as well as all other documents, notices and legal proceedings
entered into, given or instituted pursuant to your Option, either directly or indirectly, be drawn up in English.
Langue anglaise . En acceptant l'allocation de votre Options, vous reconnaissez et acceptez avoir souhaité que le Termes et
Conditions, le présent avenant, ainsi que tous autres documents exécutés, avis donnés et procédures judiciaires intentées,
relatifs, directement ou indirectement, à l'allocation de votre Option, soient rédigés en anglais.
BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE 2011
PLAN, THE TERMS AND CONDITIONS AND THIS ADDENDUM. PLEASE SIGN AND RETURN THIS ADDENDUM
VIA EMAIL NO LATER THAN APRIL 30, 2016 TO STOCKPLANADMINISTRATION@STRYKER.COM .
___________________________________ ______________________________
Employee Signature Employee Name (Printed)
_____________________
Date
CHILE
1. Private Placement . The following provision shall replace the first two sentences of Section 18 of the Terms and
Conditions:
The grant of the Option hereunder is not intended to be a public offering of securities in Chile but instead is intended to be a
private placement.
a) The starting date of the offer will be the grant date, and this offer conforms to General Ruling no. 336 of the Chilean
Superintendence of Securities and Insurance;
b) The offer deals with securities not registered in the registry of securities or in the registry of foreign securities of the Chilean
Superintendence of Securities and Insurance, and therefore such securities are not subject to its oversight;
c) The Company, as the issuer, is not obligated to provide public information in Chile regarding the foreign securities, as such
securities are not registered with the Chilean Superintendence of Securities and Insurance; and
d) The Shares, as foreign securities, shall not be subject to public offering as long as they are not registered with the
corresponding registry of securities in Chile.
a) La fecha de inicio de la oferta será el de la fecha de otorgamiento y esta oferta se acoge a la norma de Carácter General n°
336 de la Superintendencia de Valores y Seguros Chilena;
b) La oferta versa sobre valores no inscritos en el registro de valores o en el registro de valores extranjeros que lleva la
Superintendencia de Valores y Seguros Chilena, por lo que tales valores no están sujetos
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a la fiscalización de ésta;
c) Por tratar de valores no inscritos no existe la obligación por parte del emisor de entregar en Chile información pública
respecto de esos valores; y
d) Esos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el registro de valores correspondiente.
DENMARK
1. Treatment of Options upon Termination of Employment . Notwithstanding any provision in the Terms and Conditions
or the Plan to the contrary, unless you are a member of registered management who is not considered a salaried employee, the
treatment of the Option upon a termination of service which is not a result of death shall be governed by Sections 4 and 5 of the
Danish Act on Stock Option in Employment Relations. However, if the provisions in the Terms and Conditions or the Plan
governing the treatment of the Option upon a termination of service are more favorable, then the provisions of the Award Certificate
or the Plan will govern.
FINLAND
1. Withholding of Tax-Related Items . Notwithstanding anything in Section 5 of the Terms and Conditions to the contrary,
if you are a local national of Finland, any Tax-Related Items shall be withheld only in cash from your regular salary/wages or other
amounts payable to you in cash or such other withholding methods as may be permitted under the 2011 Plan and allowed under local
law.
FRANCE
1. Use of English Language . By accepting the Options, you acknowledge and agree that it is your express wish that the
Terms and Conditions, this Addendum, as well as all other documents, notices and legal proceedings entered into, given or instituted
pursuant to your Option, either directly or indirectly, be drawn up in English.
Langue anglaise . En acceptant l'allocation de votre Option, vous reconnaissez et acceptez avoir souhaité que le Termes et
relatifs, directement ou indirectement, à l'allocation de votre Option, soient rédigés en anglais .
BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE 2011 PLAN,
THE TERMS AND CONDITIONS AND THIS ADDENDUM.
PLEASE SIGN AND RETURN THIS ADDENDUM VIA EMAIL NO LATER THAN APRIL 30, 2016 TO
STOCKPLANADMINISTRATION@STRYKER.COM .
___________________________________ ______________________________
_____________________
Date
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HONG KONG
1. Lapse of Restrictions . If, for any reason, Shares are issued to you within six (6) months of the grant date, you agree that
you will not sell or otherwise dispose of any such Shares prior to the six-month anniversary of the grant date.
MEXICO
1. Commercial Relationship . You expressly recognize that your participation in the 2011 Plan and the Company’s grant of
the Options do not constitute an employment relationship between you and the Company. You have been granted the Options as a
consequence of the commercial relationship between the Company and the Subsidiary in Mexico that employs you, and the
Company’s Subsidiary in Mexico is your sole employer. Based on the foregoing, (a) you expressly recognize the 2011 Plan and the
benefits you may derive from your participation in the 2011 Plan do not establish any rights between you and the Company’s
Subsidiary in Mexico that employs you, (b) the 2011 Plan and the benefits you may derive from your participation in the 2011 Plan
are not part of the employment conditions and/or benefits provided by the Company’s Subsidiary in Mexico that employs you, and
(c) any modification or amendment of the 2011 Plan by the Company, or a termination of the 2011 Plan by the Company, shall not
constitute a change or impairment of the terms and conditions of your employment with the Company’s Subsidiary in Mexico that
employs you.
2. Extraordinary Item of Compensation . You expressly recognize and acknowledge that your participation in the 2011
Plan is a result of the discretionary and unilateral decision of the Company, as well as your free and voluntary decision to participate
in the 2011 Plan in accord with the terms and conditions of the 2011 Plan, the Terms and Conditions, and this Addendum. As such,
you acknowledge and agree that the Company may, in its sole discretion, amend and/or discontinue your participation in the 2011
Plan at any time and without any liability. The value of the Options is an extraordinary item of compensation outside the scope of
your employment contract, if any. The Options are not part of your regular or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any
similar payments, which are the exclusive obligations of the Company’s Subsidiary in Mexico that employs you.
PLAN, THE TERMS AND CONDITIONS AND THIS ADDENDUM.
___________________________________ ______________________________
_____________________
Date
NETHERLANDS
1. Waiver of Termination Rights . As a condition to the grant of the Options, you hereby waive any and all rights to
compensation or damages as a result of the termination of your employment with the Company and the Employer for any reason
whatsoever, insofar as those rights result or may result from (a)
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the loss or diminution in value of such rights or entitlements under the 2011 Plan, or (b) you ceasing to have rights under or ceasing
to be entitled to any awards under the 2011 Plan as a result of such termination.
SINGAPORE
1. Qualifying Person Exemption . The following provision shall replace Section 18 of the Terms and Conditions:
The grant of the Options under the 2011 Plan is being made pursuant to the “Qualifying Person” exemption” under section 273(1)(f)
of the Securities and Futures Act (Chapter 289, 2011 Ed.) (“SFA”). The 2011 Plan has not been lodged or registered as a prospectus
with the Monetary Authority of Singapore. You should note that, as a result, the Options are subject to section 257 of the SFA
and you will not be able to make (a) any subsequent sale of the Shares in Singapore or (ii) any offer of such subsequent sale of the
Shares subject to the Options in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1)
Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2011 Ed.).
SOUTH AFRICA
1. Withholding Taxes . The following provision supplements Section 5 of the Terms and Conditions: By accepting the
Options, you agree to notify your Employer in South Africa of the amount of any gain realized upon exercise of the Options. If you
fail to advise the Company of the gain realized upon exercise, you may be liable for a fine. You will be responsible for paying any
difference between the actual tax liability and the amount withheld.
2. Exchange Control Obligations . You are solely responsible for complying with applicable exchange control regulations
and rulings (the “Exchange Control Regulations”) in South Africa. As the Exchange Control Regulations change frequently and
without notice, you should consult your legal advisor prior to the acquisition or sale of Shares under the 2011 Plan to ensure
compliance with current Exchange Control Regulations. Neither the Company nor any of its Subsidiaries will be liable for any fines
or penalties resulting from your failure to comply with applicable laws.
3. Securities Law Information and Deemed Acceptance of Options . Neither the Options nor the underlying Shares shall
be publicly offered or listed on any stock exchange in South Africa. The offer is intended to be private pursuant to Section 96 of the
Companies Act and is not subject to the supervision of any South African governmental authority. Pursuant to Section 96 of the
Companies Act, the Options offer must be finalized on or before the 60th day following the grant date. If you do not want to accept
the Options, you are required to decline the Options no later than the 60th day following the grant date. If you do not reject the
Options on or before the 60th day following the grant date, you will be deemed to accept the Options.
SPAIN
1. Acknowledgement of Discretionary Nature of the 2011 Plan; No Vested Rights . In accepting the Options, you
acknowledge that you consent to participation in the 2011 Plan and have received a copy of the 2011 Plan. You understand that the
Company has unilaterally, gratuitously and in its sole discretion granted Options under the 2011 Plan to individuals who may be
employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the
express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Subsidiaries on
an ongoing basis. Consequently, you understand that the Options are granted on the assumption and condition that the Options and
the Shares acquired upon exercise of the Options shall not become a part of
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any employment contract (either with the Company or any of its Subsidiaries) and shall not be considered a mandatory benefit,
salary for any purposes (including severance compensation) or any other right whatsoever. In addition, you understand that this grant
would not be made to you but for the assumptions and conditions referenced above. Thus, you acknowledge and freely accept that
should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, the Options shall be null
and void.
You understand and agree that, as a condition of the grant of the Options, any unvested Options as of the date you cease active
employment and any vested portion of the Options not exercised within the post-termination exercise period set out in the Terms and
Conditions will be forfeited without entitlement to the underlying Shares or to any amount of indemnification in the event of the
termination of employment by reason of, but not limited to, (i) material modification of the terms of employment under Article 41 of
the Workers’ Statute or (ii) relocation under Article 40 of the Workers’ Statute. You acknowledge that you have read and
specifically accept the conditions referred to in the Terms and Conditions regarding the impact of a termination of employment on
your Options.
___________________________________ ______________________________
_____________________
Date
SWEDEN
1. Exercise by Cash Payment Only . Notwithstanding anything in Section 4 of the Terms and Conditions to the contrary, if
you are a local national of Sweden, you may exercise the Options only by means of a cash payment or such other methods as may be
permitted under the 2011 Plan and allowed under local law.
if you are a local national of Sweden, any Tax-Related Items shall be withheld only in cash from your regular salary/wages or other
amounts payable to you in cash, or such other withholding methods as may be permitted under the 2011 Plan and allowed under
local law.
UNITED KINGDOM
1. No Exercise by Using Existing Shares . Notwithstanding anything in Section 4 of the Terms and Conditions to the
contrary, if you are resident in the United Kingdom, you shall not be permitted to use existing Shares for exercising the Options and
paying the Exercise Price.
2. Income Tax and Social Insurance Contribution Withholding . The following provision shall replace Section 5 of the
Terms and Conditions:
(a) Regardless of any action the Company or the Employer takes with respect to any or all income tax, primary and
secondary Class 1 National Insurance contributions, payroll tax, payment on account or
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other tax-related withholding attributable to or payable in connection with or pursuant to the grant or exercise of the Options and the
acquisition of Shares, or the release or assignment of the Options for consideration, or the receipt of any other benefit in connection
with the Options (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is
and remains your responsibility. Furthermore, the Company and/or the Employer (a) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect of the Options, including the grant or exercise of the
Options and the acquisition of Shares, the subsequent sale of any Shares acquired upon exercise and the receipt of any dividends; and
(b) do not commit to structure the terms of the grant or any aspect of the Options to reduce or eliminate your liability for Tax-Related
Items.
(b) As a condition of the issuance of Shares (or cash payment) upon exercise of the Options, the Company and/or
the Employer shall be entitled to withhold and you agree to pay, or make adequate arrangements satisfactory to the Company and/or
the Employer to satisfy, all obligations of the Company and/or the Employer to account to HM Revenue & Customs (“HMRC”) for
any Tax-Related Items. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items
legally payable by you from any salary/wages or other cash compensation payable to you. Alternatively, or in addition, if permissible
under local law, you authorize the Company and/or the Employer, at its discretion and pursuant to such procedures as it may specify
from time to time, to satisfy the obligations with regard to all Tax-Related Items legally payable by you by one of the following: (a)
by electing to have the Company withhold from the Shares to be issued upon exercise of the Options a sufficient number of whole
Shares having an aggregate Fair Market Value that would satisfy the withholding amount, provided, however, that in no event may
the whole number of Shares withheld in the case of this clause (a) exceed the applicable statutory minimum withholding rates (if
any); or (b) in cash. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares as described herein, you
shall be deemed to have been issued the full number of Shares subject to the Options, notwithstanding that a number of the Shares
are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Options.
(c) If, by the date on which the event giving rise to the Tax-Related Items occurs (the "Chargeable Event"), you
have relocated to a jurisdiction other than the United Kingdom, you acknowledge that the Company and/or the Employer may be
required to withhold or account for Tax-Related Items in more than one jurisdiction, including the United Kingdom. You also agree
that the Company and the Employer may determine the amount of Tax-Related Items to be withheld and accounted for by reference
to the maximum applicable rates, without prejudice to any right which you may have to recover any overpayment from the relevant
tax authorities.
(d) You shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the
Employer may be required to account to HMRC with respect to the Chargeable Event that cannot be satisfied by the means
previously described. If payment or withholding is not made within 90 days of the Chargeable Event or within 90 days after the end
of the UK tax year in which the Chargeable Event occurs or such other period specified in section 222(1)(c) of the U.K. Income Tax
(Earnings and Pensions) Act 2003 (the "Due Date"), you agree that the amount of any uncollected Tax-Related Items shall (assuming
you are not a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange
Act of 1934, as amended), constitute a loan owed by you to the Employer, effective on the Due Date. You agree that the loan will
bear interest at the then-current HMRC Official Rate and it will be immediately due and repayable, and the Company and/or the
Employer may recover it at any time thereafter by any of the means referred to above. If any of the foregoing methods of collection
are not allowed under applicable laws or if you fail to comply with your obligations in connection with the Tax-Related Items as
described in this section, the Company may refuse to deliver the Shares acquired under the 2011 Plan.
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3. Exclusion of Claim . You acknowledge and agree that you will have no entitlement to compensation or damages in
consequence of the termination of your employment with the Company and the Subsidiary that employs you for any reason
whatsoever and whether or not in breach of contract, insofar as any purported claim to such entitlement arises or may arise from your
ceasing to have rights under or to be entitled to exercise the Options as a result of such termination of employment (whether the
termination is in breach of contract or otherwise), or from the loss or diminution in value of the Options. Upon the grant of the
Options, you shall be deemed irrevocably to have waived any such entitlement.
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Exhibit 10iv
February 10, 2016
Dear First Name:
I am pleased to inform you that you are one of a select group of individuals receiving a restricted stock units (RSUs) award in 2016. We use these awards to reward
performers who we believe will be key contributors to our growth well into the future. The total Award Date Value (ADV) of your award is approximately
$xx,xxx.
You are receiving xxx RSUs with respect to Common Stock of Stryker Corporation. Except as otherwise provided in the Terms and Conditions, one-third of these
RSUs will vest on March 21 of each of the three years beginning March 21, 2017.
The detailed terms of the RSUs are in the Terms and Conditions, any applicable country addendum and the provisions of the Company's 2011 Long-Term Incentive
Plan. Those documents, together with the related Prospectus, are available on the UBS One Source web site, and you should read them before accepting the
awards.
You can find additional educational materials on the UBS One Source web site in the Library section, including RSUs brochures, RSUs Frequently Asked
Questions and RSUs Tax Questions & Answers.
Stryker’s success makes it possible for us to invest in people like you. Thank you for your efforts in helping us deliver great results. With your help, I look forward
to another successful year.
Sincerely,
Kevin A. Lobo
Chairman and CEO
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STRYKER CORPORATION

RELATING TO RESTRICTED STOCK UNITS GRANTED
1. The Restricted Stock Units (“RSUs”) with respect to Common Stock of Stryker Corporation (the “Company”) granted
to you during 2016 are subject to these Terms and Conditions Relating to Restricted Stock Units Granted Pursuant to the 2011 Long-
Term Incentive Plan, as amended (the “Terms and Conditions”) and all of the terms and conditions of the Stryker Corporation 2011
Long-Term Incentive Plan (the “2011 Plan”), which is incorporated herein by reference. In the case of a conflict between these
Terms and Conditions and the terms of the 2011 Plan, the provisions of the 2011 Plan will govern. Capitalized terms used but not
defined herein have the meaning provided therefor in the 2011 Plan. For purposes of these Terms and Conditions, “Employer”
means the Company or any Subsidiary that employs you on the applicable date.
2. Your right to receive the Shares issuable pursuant to the RSUs shall be only as follows:
(a) If you continue to be an Employee, you will receive the Shares underlying the RSUs that have become vested as soon as
administratively possible following the vesting date as set forth in the award document.
(b) If you cease to be an Employee by reason of Disability (as such term is defined in the 2011 Plan or determined under
local law) or death prior to the date that your RSUs become fully vested, you or your estate will become fully vested in your RSUs,
and you, your legal representative or your estate will receive all of the underlying Shares as soon as administratively practicable
following your termination by Disability or death.
(c) If you cease to be an Employee prior to the date that your RSUs become fully vested for any reason other than
those provided in (b) above, you shall cease vesting in your RSUs effective as of your Termination Date. If you are a resident of or
employed in the United States, “Termination Date” shall mean the effective date of termination of your employment with your
Employer. If you are resident or employed outside of the United States, “Termination Date” shall mean the earliest of (i) the date on
which notice of termination is provided to you, (ii) the last day of your active service with your Employer or (iii) the last day on
which you are an Employee of your Employer, as determined in each case without including any required advance notice period and
irrespective of the status of the termination under local labor or employment laws.
(d) Notwithstanding the foregoing, the Company may, in its sole discretion, settle your RSUs in the form of: (i) a
cash payment to the extent settlement in Shares (1) is prohibited under local law, (2) would require you or the Company to obtain the
approval of any governmental and/or regulatory body in your country of residence (and country of employment, if different) or (3) is
administratively burdensome or (ii) Shares, but require you to immediately sell such Shares (in which case, the Company shall have
the authority to issue sales instructions in relation to such Shares on your behalf).
3. The number of Shares subject to the RSUs shall be subject to adjustment and the vesting dates hereof may be
accelerated as follows:
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shall be made, then there shall be substituted for or added to each Share theretofore subject to the RSUs the number and kind of
exchanged, or to which each such Share shall be entitled. The other terms of the RSUs shall also be appropriately amended as may
be necessary to reflect the foregoing events. In the event there shall be any other change in the number or kind of the outstanding
Shares, or of any stock or other securities into which such Shares shall have been exchanged, then if the Committee shall, in its sole
discretion, determine that such change equitably requires an adjustment in the RSUs, such adjustment shall be made in accordance
with such determination.
(b) Fractional Shares resulting from any adjustment in the RSUs may be settled in cash or otherwise as the
(c) The Committee shall have the power to amend the RSUs to permit the immediate vesting of the RSUs (and to
terminate any unvested RSUs) and the distribution of the underlying Shares prior to the effectiveness of (i) any disposition of
substantially all of the assets of the Company or your Employer, (ii) the shutdown, discontinuance of operations or dissolution of the
Company or your Employer, or (iii) the merger or consolidation of the Company or your Employer with or into any other unrelated
corporation.
4. If you are resident or employed outside of the United States, you agree, as a condition of the grant of the RSUs, to
repatriate all payments attributable to the Shares and/or cash acquired under the 2011 Plan (including, but not limited to, dividends,
dividend equivalents and any proceeds derived from the sale of the Shares acquired pursuant to the RSUs) if required by and in
accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different).
In addition, you also agree to take any and all actions, and consent to any and all actions taken by the Company and its Subsidiaries,
as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in your country of
residence (and country of employment, if different). Finally, you agree to take any and all actions as may be required to comply with
your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of
employment, if different).
5. If you are resident and/or employed in a country that is a member of the European Union, the grant of the RSUs and
these Terms and Conditions are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework
Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent
jurisdiction determines that any provision of the Terms and Conditions are invalid or unenforceable, in whole or in part, under the
Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision
to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
6. Regardless of any action the Company and/or your Employer take with respect to any or all income tax (including U.S.
federal, state and local taxes or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding
(“Tax-Related Items”), you acknowledge that the
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ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and your
Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any
aspect of the RSUs, including the grant of the RSUs, the vesting of the RSUs, the subsequent sale of any Shares acquired pursuant to
the RSUs and the receipt of any dividends or dividend equivalents and (ii) do not commit to structure the terms of the grant or any
aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items. Further, if you become subject to taxation in more
than one country between the grant date and the date of any relevant taxable or tax withholding event, as applicable, you
acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one country.
Prior to the delivery of Shares upon the vesting of your RSUs, if your country of residence (and/or the country of
Shares otherwise issuable upon the vesting of the RSUs that have an aggregate Fair Market Value sufficient to pay the minimum
Tax-Related Items required to be withheld with respect to the Shares. In cases where the Fair Market Value of the number of whole
required to be withheld with respect to the Shares in cash from your regular salary and/or wages or any other amounts payable to
you. In the event the withholding requirements are not satisfied through the withholding of Shares by the Company or through your
regular salary and/or wages or other amounts payable to you by your Employer, no Shares will be issued to you (or your estate) upon
vesting of the RSUs unless and until satisfactory arrangements (as determined by the Board of Directors) have been made by you
with respect to the payment of any Tax-Related Items that the Company or your Employer determines, in its sole discretion, must be
withheld or collected with respect to such RSUs. By accepting this grant of RSUs, you expressly consent to the withholding of
Shares and/or withholding from your regular salary and/or wages or other amounts payable to you as provided for hereunder. All
other Tax-Related Items related to the RSUs and any Shares delivered in payment thereof are your sole responsibility.
7. The RSUs are intended to be exempt from the requirements of Code Section 409A. The 2011 Plan and these Terms and
Conditions shall be administered and interpreted in a manner consistent with this intent. If the Company determines that these Terms
and Conditions are subject to Code Section 409A and that it has failed to comply with the requirements of that Section, the Company
may, at the Company’s sole discretion and without your consent, amend these Terms and Conditions to cause them to comply with
Code Section 409A or be exempt from Code Section 409A.
Agreement” or a similar agreement in order to receive the RSUs or have previously signed such an agreement and you breach any
non-competition, non-solicitation or non-disclosure provision or provision as to ownership of inventions contained therein at any
time while employed by the Company or a Subsidiary, or during the one-year period following termination of employment, any
unvested RSUs shall be rescinded and you shall return to the Company all Shares that were acquired upon vesting of the RSUs that
you have not disposed of. Further, you shall pay to the Company an amount equal to the profit realized by you (if any) on all Shares
that were acquired upon vesting of the RSUs that you have disposed of. For purposes of the preceding sentence, the profit shall be
the Fair Market Value of the Shares at the time of disposition.
9. The RSUs shall be transferable only by will or the laws of descent and distribution. If you
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purport to make any transfer of the RSUs, except as aforesaid, the RSUs and all rights thereunder shall terminate immediately.
10. The RSUs shall not be vested in whole or in part, and the Company shall not be obligated to issue any Shares subject
to the RSUs, if such issuance would, in the opinion of counsel for the Company, violate the Securities Act of 1933 or any other U.S.
federal, state or non-U.S. statute having similar requirements as it may be in effect at the time. The RSUs are subject to the further
requirement that, if at any time the Board of Directors shall determine in its discretion that the listing or qualification of the Shares
subject to the RSUs under any securities exchange requirements or under any applicable law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of or in connection with the issuance of shares pursuant to the
RSUs, the RSUs may not be vested in whole or in part unless such listing, qualification, consent or approval shall have been effected
or obtained free of any conditions not acceptable to the Board of Directors.
11. The grant of the RSUs shall not confer upon you any right to continue in the employ of your Employer nor limit in any
way the right of your Employer to terminate your employment at any time. You shall have no rights as a shareholder of the Company
with respect to any Shares issuable upon the vesting of the RSUs until the date of issuance of such Shares.
12. You acknowledge and agree that the 2011 Plan is discretionary in nature and may be amended, cancelled, or
terminated by the Company, in its sole discretion, at any time. The grant of the RSUs under the 2011 Plan is a one-time benefit and
does not create any contractual or other right to receive a grant of RSUs or any other award under the 2011 Plan or other benefits in
lieu thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form
and timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or
termination of the 2011 Plan shall not constitute a change or impairment of the terms and conditions of your employment with your
Employer.
13. Your participation in the 2011 Plan is voluntary. The value of the RSUs and any other awards granted under the 2011
Plan is an extraordinary item of compensation outside the scope of your employment (and your employment contract, if any). Any
grant under the 2011 Plan, including the grant of the RSUs, is not part of normal or expected compensation for purposes of
collection, processing and transfer of such data in relation to the grant of the RSUs and your participation in the 2011 Plan pursuant
to applicable personal data protection laws. The collection, processing and transfer of your personal data is necessary for the
Company’s administration of the 2011 Plan and your participation in the 2011 Plan, and your denial and/or objection to the
The Company and your Employer hold certain personal information about you, including (but not
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limited to) your name, home address and telephone number, date of birth, social security number or other employee identification
number, salary, nationality, job title, any Shares or directorships held in the Company, details of all RSUs or any other entitlement to
Shares awarded, canceled, purchased, vested, unvested or outstanding in your favor for the purpose of managing and administering
the 2011 Plan (“Data”). The Data may be provided by you or collected, where lawful, from third parties, and the Company and your
Employer will process the Data for the exclusive purpose of implementing, administering and managing your participation in the
2011 Plan. The data processing will take place through electronic and non-electronic means according to logics and procedures
strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by
applicable laws and regulations in your country of residence. Data processing operations will be performed minimizing the use of
personal and identification data when such information is unnecessary for the processing purposes sought. The Data will be
accessible within the Company’s organization only by those persons requiring access for purposes of the implementation,
administration and operation of the 2011 Plan and for your participation in the 2011 Plan.
integration, update, amendment, deletion or blockage (for breach of applicable laws) of the Data and (d) oppose, for legal reasons,
HR manager.
16. The grant of the RSUs is not intended to be a public offering of securities in your country of residence (and country of
employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local
whether you should acquire Shares under the 2011 Plan or provide you with any legal, tax or financial advice with respect to the
grant of the RSUs. The acquisition of Shares involves certain risks, and you should carefully consider all risk factors and tax
considerations relevant to the acquisition of Shares under the 2011 Plan and the disposition of them. Further, you should carefully
review all of the materials related to the RSUs and the 2011 Plan, and you should consult with your personal legal, tax and financial
advisors for professional advice in relation to your personal circumstances.
17. All questions concerning the construction, validity and interpretation of the RSUs and the 2011 Plan shall be governed
and construed according to the laws of the state of Michigan, without regard to the application of the conflicts of laws provisions
thereof. Any disputes regarding the RSUs or the 2011 Plan shall be brought only in the state or federal courts of the state of
Michigan.
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18. The Company may, in its sole discretion, decide to deliver any documents related to the RSUs or other awards granted
to you under the 2011 Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to
participate in the 2011 Plan through an on-line or electronic system established and maintained by the Company or a third party
designated by the Company.
Terms and Conditions, the 2011 Plan and all other documents, notices and legal proceedings entered into, given or instituted
pursuant to the RSUs be drawn up in English. If you have received these Terms and Conditions, the 2011 Plan or any other
documents related to the RSUs translated into a language other than English and the meaning of the translated version is different
than the English version, the English version will control.
21. Notwithstanding any provisions of these Terms and Conditions to the contrary, the RSUs shall be subject to any
special terms and conditions for your country of residence (and country of employment, if different) set forth in an addendum to
these Terms and Conditions (an “Addendum”). Further, if you transfer your residence and/or employment to another country
reflected in an Addendum to these Terms and Conditions at the time of transfer, the special terms and conditions for such country
will apply to you to the extent the Company determines, in its sole discretion, that the application of such special terms and
conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and
administration of the award and the 2011 Plan (or the Company may establish alternative terms and conditions as may be necessary
or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of these Terms and
Conditions.
22. The Company reserves the right to impose other requirements on the RSUs, any Shares acquired pursuant to the RSUs
and your participation in the 2011 Plan to the extent the Company determines, in its sole discretion, that such other requirements are
necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the
award and the 2011 Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or
undertakings that may be necessary to accomplish the foregoing.
23. Notwithstanding any other provision of this Agreement to the contrary, you acknowledge and agree that your RSUs,
to time in order to comply with changes in laws, rules or regulations that are applicable to such RSUs and Shares. You agree and
instructions, on your behalf, to any brokerage firm and/or third party administrator engaged by the
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Company to hold your Shares and other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares
and/or other amounts to the Company. To the extent that the terms of this Agreement and the Recoupment Policy conflict, the terms
1
of the Recoupment Policy shall prevail.
24. By accepting the grant of the RSUs, you acknowledge that you have read these Terms and Conditions, the Addendum
to these Terms and Conditions (as applicable) and the 2011 Plan, and specifically accept and agree to the provisions therein.
STRYKER CORPORATION
ADDENDUM TO
PURSUANT TO THE 2011 PLAN
In addition to the terms of the 2011 Plan and the Terms and Conditions, the RSUs are subject to the following additional terms and
AUSTRALIA
1. RSUs Conditioned on Satisfaction of Regulatory Obligations. If you are (a) a
director of a Subsidiary incorporated in Australia, or (b) a person who is a management-level
executive of a Subsidiary incorporated in Australia and who also is a director of a Subsidiary
incorporated outside of the Australia, the grant of the RSUs is conditioned upon satisfaction of
the shareholder approval provisions of section 200B of the Corporations Act 2001 (Cth) in
Australia.
The Australian Offer document can be accessed here [UBS INSERT LINK HERE]
BRAZIL
1. Labor Law Acknowledgment . By accepting the RSUs, you acknowledge and agree, for all legal purposes, that (a) the
benefits provided under the Terms and Conditions and the 2011 Plan are the result of commercial transactions unrelated to your
employment; (b) the Terms and Conditions and the 2011 Plan are not a part of the terms and conditions of your employment; and (c)
the income from the RSUs, if any, is not part of your remuneration from employment.
1 Applicable only to corporate officers elected by the Board of Directors other than Assistant Secretaries, Assistant Treasurers, and Assistant Controllers.
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2. Compliance with Law . By accepting the RSUs, you acknowledge and agree your agreement to comply with applicable
Brazilian laws and to pay any and all applicable taxes associated with the vesting of the RSUs, the issuance and/or sale of Shares
acquired under the Plan and the receipt of any dividends.
CANADA
1. Settlement in Shares . Notwithstanding anything to the contrary in the Terms and Conditions or the 2011 Plan, the RSUs
shall be settled only in Shares (and may not be settled in cash).
2. Use of English Language . If you are a resident of Quebec, by accepting your RSUs, you acknowledge and agree that it
is your wish that the Terms and Conditions, this Addendum, as well as all other documents, notices and legal proceedings entered
into, given or instituted pursuant to your RSUs, either directly or indirectly, be drawn up in English.
Langue anglaise . En acceptant l'allocation de vos RSUs, vous reconnaissez et acceptez avoir souhaité que le Termes et
relatifs, directement ou indirectement, à l'allocation de vos RSUs, soient rédigés en anglais .
___________________________________ ______________________________
_____________________
Date
CHILE
1. Private Placement . The following provision shall replace Section 16 of the Terms and Conditions:
The grant of the RSUs hereunder is not intended to be a public offering of securities in Chile but instead is intended to be a private
placement.
a) The starting date of the offer will be the grant date, and this offer conforms to General Ruling no. 336 of the Chilean
Superintendence of Securities and Insurance;
b) The offer deals with securities not registered in the registry of securities or in the registry of foreign securities of the Chilean
Superintendence of Securities and Insurance, and therefore such securities are not subject to its oversight;
c) The Company, as the issuer, is not obligated to provide public information in Chile regarding the foreign securities, as such
securities are not registered with the Chilean Superintendence of Securities and Insurance; and
d) The Shares, as foreign securities, shall not be subject to public offering as long as they are not registered with the
corresponding registry of securities in Chile.
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a) La fecha de inicio de la oferta será el de la fecha de otorgamiento y esta oferta se acoge a la norma de Carácter General n°
336 de la Superintendencia de Valores y Seguros Chilena;
b) La oferta versa sobre valores no inscritos en el registro de valores o en el registro de valores extranjeros que lleva la
Superintendencia de Valores y Seguros Chilena, por lo que tales valores no están sujetos a la fiscalización de ésta;
c) Por tratar de valores no inscritos no existe la obligación por parte del emisor de entregar en chile información pública
respecto de esos valores; y
d) Esos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el registro de valores correspondiente.
CHINA
1. RSUs Conditioned on Satisfaction of Regulatory Obligations . If you are a People's Republic of China ("PRC") national,
the grant of the RSUs is conditioned upon the Company securing all necessary approvals from the PRC State Administration of
Foreign Exchange to permit the operation of the 2011 Plan and the participation of PRC nationals employed by the Employer, as
determined by the Company in its sole discretion.
2. Sale of Shares . Notwithstanding anything to the contrary in the 2011 Plan, upon any termination of employment with
the Employer, you shall be required to sell all Shares acquired under the 2011 Plan within such time period as may be established by
the PRC State Administration of Foreign Exchange.
3. Exchange Control Restrictions . You acknowledge and agree that you will be required immediately to repatriate to the
PRC the proceeds from the sale of any Shares acquired under the 2011 Plan, as well as any other cash amounts attributable to the
Shares acquired under the 2011 Plan (collectively, "Cash Proceeds"). Further, you acknowledge and agree that the repatriation of the
Cash Proceeds must be effected through a special bank account established by your Employer, the Company or one of its
Subsidiaries, and you hereby consent and agree that the Cash Proceeds may be transferred to such account by the Company on your
behalf prior to being delivered to you. The Cash Proceeds may be paid to you in U.S. dollars or local currency at the Company’s
discretion. If the Cash Proceeds are paid to you in U.S. dollars, you understand that a U.S. dollar bank account must be established
and maintained in China so that the proceeds may be deposited into such account. If the Cash Proceeds are paid to you in local
currency, you acknowledge and agree that the Company is under no obligation to secure any particular exchange conversion rate and
that the Company may face delays in converting the Cash Proceeds to local currency due to exchange control restrictions. You agree
to bear any currency fluctuation risk between the time the Shares are sold and the Cash Proceeds are converted into local currency
and distributed to you. You further agree to comply with any other requirements that may be imposed by your Employer, the
Company and its Subsidiaries in the future in order to facilitate compliance with exchange control requirements in the PRC.
FINLAND
if you are a local national of Finland, any Tax-Related Items shall be withheld only in cash from your regular salary/wages or other
amounts payable to you in cash or such other withholding methods as may be permitted under the 2011 Plan and allowed under local
law.
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FRANCE
1. Use of English Language . By accepting your RSUs, you acknowledge and agree that it is your wish that the Terms and
Conditions, this Addendum, as well as all other documents, notices and legal proceedings entered into, given or instituted pursuant to
your RSUs, either directly or indirectly, be drawn up in English.
Langue anglaise . En acceptant l'allocation de vos RSUs, vous reconnaissez et acceptez avoir souhaité que le Termes et
relatifs, directement ou indirectement, à l'allocation de vos RSUs, soient rédigés en anglais .
___________________________________ ______________________________
_____________________
Date
HONG KONG
1. IMPORTANT NOTICE . WARNING: The contents of the Terms and Conditions, the Addendum, the 2011 Plan, and
all other materials pertaining to the RSUs and/or the 2011 Plan have not been reviewed by any regulatory authority in Hong Kong.
You are hereby advised to exercise caution in relation to the offer thereunder. If you have any doubts about any of the contents of the
aforesaid materials, you should obtain independent professional advice.
2. Nature of the Plan . The Company specifically intends that the 2011 Plan will not be treated as an occupational
retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). To the extent any court, tribunal or
legal/regulatory body in Hong Kong determines that the 2011 Plan constitutes an occupational retirement scheme for the purposes of
ORSO, the grant of the RSUs shall be null and void.
MEXICO
1. Commercial Relationship . You expressly recognize that your participation in the 2011 Plan and the Company’s grant of
the RSUs do not constitute an employment relationship between you and the Company. You have been granted the RSUs as a
consequence of the commercial relationship between the Company and the Subsidiary in Mexico that employs you, and the
Company’s Subsidiary in Mexico is your sole employer. Based on the foregoing, (a) you expressly recognize the 2011 Plan and the
benefits you may derive from your participation in the 2011 Plan do not establish any rights between you and the Company’s
Subsidiary in Mexico that employs you, (b) the 2011 Plan and the benefits you may derive from your participation in the 2011 Plan
are not part of the employment conditions and/or benefits provided by the
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Company’s Subsidiary in Mexico that employs you, and (c) any modification or amendment of the 2011 Plan by the Company, or a
termination of the 2011 Plan by the Company, shall not constitute a change or impairment of the terms and conditions of your
employment with the Company’s Subsidiary in Mexico that employs you.
2. Extraordinary Item of Compensation . You expressly recognize and acknowledge that your participation in the 2011
Plan is a result of the discretionary and unilateral decision of the Company, as well as your free and voluntary decision to participate
in the 2011 Plan in accord with the terms and conditions of the 2011 Plan, the Terms and Conditions, and this Addendum. As such,
you acknowledge and agree that the Company may, in its sole discretion, amend and/or discontinue your participation in the 2011
Plan at any time and without any liability. The value of the RSUs is an extraordinary item of compensation outside the scope of your
employment contract, if any. The RSUs are not part of your regular or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any
similar payments, which are the exclusive obligations of the Company’s Subsidiary in Mexico that employs you.
___________________________________ ______________________________
_____________________
Date
NETHERLANDS
1. Waiver of Termination Rights . As a condition to the grant of the RSUs, you hereby waive any and all rights to
compensation or damages as a result of the termination of your employment with the Company and the Employer for any reason
whatsoever, insofar as those rights result or may result from (a) the loss or diminution in value of such rights or entitlements under
the 2011 Plan, or (b) you ceasing to have rights under or ceasing to be entitled to any awards under the 2011 Plan as a result of such
termination.
RUSSIA
1. IMPORTANT EMPLOYEE NOTIFICATION . If you are a citizen of the Russian Federation, any cash proceeds
derived from the 2011 Plan (including any dividend equivalents payable in cash but excluding cash dividends) must be remitted
directly to a personal bank account opened with an authorized bank in the Russian Federation (an "Authorized Russian Account").
Thereafter, you may, in your sole discretion, personally transfer such amounts from your Authorized Russian Account to a bank
account legally established outside of the Russian Federation with a non-Russian bank located in the Organization for Economic Co-
operation and Development or the Financial Action Task Force countries (an "Authorized Foreign Account"). Cash dividends (but
not dividend equivalents payable in cash) can be remitted directly to an Authorized Foreign Account. However, you are required to
notify the Russian tax authorities within
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one month of opening or closing an Authorized Foreign Account or changing the account details. You also are required to file
quarterly reports of any transactions involving any Authorized Foreign Account you hold with the Russian tax authorities.
2. SECURITIES LAW NOTIFICATION . The grant of RSUs and the issuance of Shares upon vesting are not intended to
be an offering of securities with the Russian Federation, and the Terms and Conditions, the 2011 Plan, this Addendum and all other
materials that you receive in connection with the grant of RSUs and your participation in the 2011 Plan (collectively, "Grant
Materials") do not constitute advertising or a solicitation within the Russian Federation. In connection with your grant of RSUs, the
Company has not submitted any registration statement, prospectus or other filing with the Russian Federal Bank or any other
governmental or regulatory body within the Russian Federation, and the Grant Materials expressly may not be used, directly or
indirectly, for the purpose of making a securities offering or public circulation of Shares within the Russian Federation.
SINGAPORE
1. Qualifying Person Exemption . The following provision shall replace Section 16 of the Terms and Conditions:
The grant of the RSUs under the 2011 Plan is being made pursuant to the “Qualifying Person” exemption” under section 273(1)(f) of
the Securities and Futures Act (Chapter 289, 2011 Ed.) (“SFA”). The 2011 Plan has not been lodged or registered as a prospectus
with the Monetary Authority of Singapore. You should note that, as a result, the RSUs are subject to section 257 of the SFA and you
will not be able to make (a) any subsequent sale of the Shares in Singapore or (ii) any offer of such subsequent sale of the Shares
subject to the RSUs in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1)
Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2011 Ed.).
SOUTH AFRICA
1. Withholding Taxes . The following provision supplements Section 6 of the Terms and Conditions: By accepting the
RSUs, you agree to notify your Employer in South Africa of the amount of any gain realized upon vesting of the RSUs. If you fail to
advise your Employer of the gain realized upon vesting of the RSUs, you may be liable for a fine. You will be responsible for paying
any difference between the actual tax liability and the amount withheld.
2. Exchange Control Obligations . You are solely responsible for complying with applicable exchange control regulations
and rulings (the “Exchange Control Regulations”) in South Africa. As the Exchange Control Regulations change frequently and
without notice, you should consult your legal advisor prior to the acquisition or sale of Shares under the 2011 Plan to ensure
compliance with current Exchange Control Regulations. Neither the Company nor any of its Subsidiaries will be liable for any fines
or penalties resulting from your failure to comply with applicable laws.
3. Securities Law Information and Deemed Acceptance of RSUs . Neither the RSUs nor the underlying Shares shall be
publicly offered or listed on any stock exchange in South Africa. The offer is intended to be private pursuant to Section 96 of the
Companies Act and is not subject to the supervision of any South African governmental authority. Pursuant to Section 96 of the
Companies Act, the RSU offer must be finalized on or before the 60th day following the grant date. If you do not want to accept the
RSUs, you are required to decline the RSUs no later than the 60th day following the grant date. If you do not reject the RSUs on or
before the 60th day following the grant date, you will be deemed to accept the RSUs.
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SPAIN
1. Acknowledgement of Discretionary Nature of the 2011 Plan; No Vested Rights . In accepting the RSUs, you
acknowledge that you consent to participation in the 2011 Plan and have received a copy of the 2011 Plan. You understand that the
Company has unilaterally, gratuitously and in its sole discretion granted RSUs under the 2011 Plan to individuals who may be
employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the
express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Subsidiaries on
an ongoing basis. Consequently, you understand that the RSUs are granted on the assumption and condition that the RSUs and the
Shares acquired upon vesting of the RSUs shall not become a part of any employment contract (either with the Company or any of
its Subsidiaries) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any
other right whatsoever. In addition, you understand that this grant would not be made to you but for the assumptions and conditions
referenced above. Thus, you acknowledge and freely accept that should any or all of the assumptions be mistaken or should any of
the conditions not be met for any reason, the RSUs shall be null and void.
You understand and agree that, as a condition of the grant of the RSUs, any unvested RSUs as of the date you cease active
employment will be forfeited without entitlement to the underlying Shares or to any amount of indemnification in the event of the
termination of employment by reason of, but not limited to, (i) material modification of the terms of employment under Article 41 of
the Workers’ Statute or (ii) relocation under Article 40 of the Workers’ Statute. You acknowledge that you have read and
specifically accept the conditions referred to in the Terms and Conditions regarding the impact of a termination of employment on
your RSUs.
PLEASE SIGN AND RETURN THIS ADDENDUM VIA EMAIL NO LATER THANAPRIL 30, 2016 TO
___________________________________ ______________________________
_____________________
Date
UNITED KINGDOM
1. Income Tax and Social Insurance Contribution Withholding . The following provision shall replace Section 6 of the
Terms and Conditions:
(a) Regardless of any action the Company or the Employer takes with respect to any or all income tax, primary and
secondary Class 1 National Insurance contributions, payroll tax, payment on account or other tax-related withholding attributable to
or payable in connection with or pursuant to the grant or vesting of the RSUs and the acquisition of Shares, or the release or
assignment of the RSUs for consideration, or the receipt of any other benefit in connection with the RSUs (“Tax-Related Items”),
you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility.
Furthermore, the Company and/or the Employer (a) make no representations or undertakings regarding the treatment of any Tax-
Related Items in connection with any aspect of the RSUs, including the grant or vesting of the RSUs and the acquisition of Shares,
the subsequent sale of any Shares acquired upon vesting and the receipt of any dividends or dividend-equivalents; and (b) do not
commit to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items.
Further, if you become subject to
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taxation in more than one country between the date of grant and the date of any relevant taxable or tax withholding event, as
applicable, you acknowledge that the Company and/or the Employer may be required to withhold or account for Tax-Related Items
in more than one country.
(b) As a condition of the issuance of Shares (or cash payment) upon vesting of the RSUs, the Company and/or the
Employer shall be entitled to withhold and you agree to pay, or make adequate arrangements satisfactory to the Company and/or the
Employer to satisfy, all obligations of the Company and/or the Employer to account to HM Revenue & Customs (“HMRC”) for any
Tax-Related Items. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items
legally payable by you from any salary/wages or other cash compensation payable to you. Alternatively, or in addition, if permissible
under local law, you authorize the Company and/or the Employer, at its discretion and pursuant to such procedures as it may specify
from time to time, to satisfy the obligations with regard to all Tax-Related Items legally payable by you by the Company withholding
from the Shares to be issued upon vesting of the RSUs a sufficient number of whole Shares having an aggregate Fair Market Value
that would satisfy the withholding amount, provided, however, that in no event may the whole number of Shares withheld in the case
of this clause exceed the applicable statutory minimum withholding rates (if any). You shall be deemed to have been issued the full
number of Shares subject to the RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying
the Tax-Related Items due as a result of any aspect of the RSUs.
(c) If, by the date on which the event giving rise to the Tax-Related Items occurs (the "Chargeable Event"), you have
relocated to a jurisdiction other than the United Kingdom, you acknowledge that the Company and/or the Employer may be required
to withhold or account for Tax-Related Items in more than one jurisdiction, including the United Kingdom. You also agree that the
Company and the Employer may determine the amount of Tax-Related Items to be withheld and accounted for by reference to the
maximum applicable rates, without prejudice to any right which you may have to recover any overpayment from the relevant tax
authorities.
(d) You shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer
may be required to account to HMRC with respect to the Chargeable Event that cannot be satisfied by the means previously
described. If payment or withholding is not made within 90 days of the Chargeable Event or within 90 days after the end of the UK
tax year in which the Chargeable Event occurs or such other period specified in section 222(1)(c) of the U.K. Income Tax (Earnings
and Pensions) Act 2003 (the "Due Date"), you agree that the amount of any uncollected Tax-Related Items shall (assuming you are
not a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of
1934, as amended), constitute a loan owed by you to your Employer, effective on the Due Date. You agree that the loan will bear
interest at the then-current HMRC Official Rate and it will be immediately due and repayable, and the Company and/or the
Employer may recover it at any time thereafter by any of the means referred to above. If any of the foregoing methods of collection
are not allowed under applicable laws or if you fail to comply with your obligations in connection with the Tax-Related Items as
described in this section, the Company may refuse to deliver the Shares acquired under the 2011 Plan.
2. Exclusion of Claim . You acknowledge and agree that you will have no entitlement to compensation or damages in
consequence of the termination of your employment with the Company and the Subsidiary that employs you for any reason
whatsoever and whether or not in breach of contract, insofar as any purported claim to such entitlement arises or may arise from your
ceasing to have rights under or to be entitled to vest in the RSUs as a result of such termination of employment (whether the
termination is in breach of contract or otherwise), or from the loss or diminution in value of the RSUs. Upon the grant of the RSUs,
you shall be deemed irrevocably to have waived any such entitlement.
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Exhibit 10v
February 10, 2016
Dear First Name:
I am pleased to inform you that as an SLT member, you are receiving performance stock units (PSUs) award in 2016. We use these awards to reward performers
who we believe will be key contributors to our growth well into the future. The total Award Date Value (ADV) of your awards is approximately $xx,xxx.
You are receiving x,xxx PSUs. The number of PSUs actually earned will be dependent upon Stryker’s financial performance during the three-year period ending
December 31, 2018. Refer to the Terms and Conditions accompanying the 2016 PSUs award for specific criteria associated with vesting in such award. In order to
earn any of the PSUs, you must be continuously employed with Stryker through the vesting date of March 21, 2019 except as otherwise provided in the Terms and
Conditions.
The detailed terms of the PSUs are in the Terms and Conditions, any applicable country addendum and the provisions of the Company's 2011 Long-Term Incentive
Plan. Those documents, together with the related Prospectus, are available on the UBS One Source web site, and you should read them before accepting the
awards.
Thank you for your strong performance and I look forward to your future contributions toward positioning Stryker for long-term success.
Sincerely,
Kevin A. Lobo
Chairman and CEO
STRYKER CORPORATION

RELATING TO PERFORMANCE STOCK UNITS GRANTED
1. The Performance Stock Units with respect to Common Stock of Stryker Corporation (the “Company”) granted to you
during 2016 (the “PSUs”) are subject to the terms and conditions set forth herein (the “Terms and Conditions”) and all of the terms
and conditions of the Stryker Corporation 2011 Long-Term Incentive Plan, as amended (the “2011 Plan”), which is incorporated
herein by reference. In the case of a conflict between these Terms and Conditions and the terms of the 2011 Plan, the provisions of
the 2011 Plan will govern. Capitalized terms used but not defined herein have the meaning provided therefor in the 2011 Plan. For
purposes of these Terms and Conditions, “Stryker” or “Employer” means the Company or any Subsidiary that employs you on the
applicable date.
2. Vesting . Except as provided in Section 8(a), the vesting of your PSUs is dependent upon your remaining continuously
employed with Stryker through March 21, 2019 (the “Vesting Date”) as well as upon the Company’s financial performance during
the three-year period ending December 31, 2018 (the “Performance Period”). Specifically, the vesting of any of the PSUs is
dependent upon attainment of the Threshold Performance Target as set forth in Section 3. If the Threshold Performance Target is
attained, then the vesting of 50% of the PSUs (the “EPS PSUs”) is dependent on Adjusted EPS Growth as set forth in Section 4, and
vesting of the remaining 50% of the PSUs (the “Sales Growth PSUs”) is dependent on the Sales Growth Percentile Ranking as set
forth in Section 5. The actual number of your PSUs that become vested, if any, shall be determined based on exercise of negative
discretion by the Committee in accordance with Sections 4, 5 and 6 below.
3. Threshold Performance Target . If the Company’s Adjusted EPS Growth as of the last day of the Performance Period is
less than 3.0%, none of your PSUs shall become vested and all of your PSUs shall be forfeited as of the last day of the Performance
Period. If the Company’s Adjusted EPS Growth as of the last day of the Performance Period is 3.0% or greater (the “Threshold
Performance Target”) and, except as provided in Section 8(a), you remain in the continuous employment of Stryker through the
Vesting Date, you shall become eligible to vest in up to 200% of your PSUs, although the actual number of your PSUs that become
vested shall be determined based on exercise of negative discretion by the Committee in accordance with Sections 4, 5 and 6 below.
4. Adjusted EPS Growth .
(a) 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%.
< Minimum Minimum Target Maximum
Adjusted EPS Growth Less than 6.0% 6.0% 9.0% 12% or more
Vested Percent of EPS PSUs 0% 50% 100% 200%
Any EPS PSUs that do not become vested in accordance with the foregoing shall be forfeited.
(b) As soon as administratively practicable following the Vesting Date (but in no event later than December 31,
2019), the Company shall issue you the Shares underlying the vested EPS PSUs.
(c) For purposes of this Agreement:

(i) “Adjusted EPS” for a calendar year shall mean the Company’s diluted net earnings per share for such
year as determined under U.S. generally accepted accounting principles (“GAAP”) but subject to such adjustments, if
any, for non-GAAP financial measures that are reflected in a reconciliation to the GAAP financial statements
included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission.
(ii) “Adjusted EPS Growth” shall mean the sum of the Annual Percentage Change in Adjusted EPS for the
three (3) calendar years in the Performance Period divided by three (3).
(iii) “Annual Percentage Change in Adjusted EPS” for a calendar year shall mean the amount by which the
Adjusted EPS for such calendar year has increased or decreased relative to the immediately preceding calendar year,
expressed as a positive or negative percentage (depending on whether Adjusted EPS increased or decreased) of the
Adjusted EPS for such preceding calendar year.
(d) Notwithstanding anything to the contrary herein, the Committee shall have discretion to make such adjustments
to the foregoing metrics as it deems appropriate to reflect the impact of corporate transactions, accounting or tax law changes or
extraordinary, unusual, nonrecurring or infrequent items; provided, however, that for purposes of calculating the Threshold
Performance Target in Section 3, in no case shall such adjustments have the net aggregate effect of increasing Adjusted EPS Growth.
5. Sales Growth Percentile Ranking .
(a) 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 Sales Growth PSUs based upon the Company’s Sales Growth Percentile Ranking, as determined using the table below,
applying straight line interpolation rounded down to the nearest whole number of Sales Growth PSUs for Sales Growth Percentile
Ranking resulting in vested Sales Growth PSUs between 50% and 100% or between 100% and 200%.
Sales Growth Percentile
75 th and Above 50 th 33 rd Below 33 rd
Ranking
Vested Percent of Sales
200% 100% 50% 0%
Growth PSUs
Any Sales Growth PSUs that do not become vested in accordance with the foregoing shall be forfeited, and if the Company’s
Average Sales Growth in the Performance Period is equal to or less than zero, all of the Sales Growth PSUs shall be forfeited
(irrespective of the Sales Growth Percentile Ranking).
(b) As soon as administratively practicable following the Vesting Date (but in no event later than December 31,
2019), the Company shall issue you the Shares underlying the vested Sales Growth PSUs.
(c) For purposes of this Agreement and subject to Section 5(d) below:
(i) “Average Sales Growth” shall mean, for the Company and each company in the Comparison Group, the
sum of the Sales Growth for each Reporting Period ending within the Performance Period divided by three;
(ii) “Comparison Group” shall mean:
▪ Abbott Laboratories
▪ Baxter International Inc.
▪ Becton, Dickinson and Co.
▪ Boston Scientific Corporation
▪ CR Bard Inc.
▪ Fresenius Medical Care AG & Co. KGaA
▪ General Electric (Healthcare)
▪ Johnson & Johnson (Medical Devices & Diagnostics)
▪ Laboratory Corporation of America Holdings
▪ Medtronic plc
▪ Quest Diagnostics Inc.
▪ Royal Philips (Healthcare)
▪ Siemens Aktiengesellschaft (Healthcare)
▪ Smith & Nephew plc
▪ St. Jude Medical Inc.
▪ Thermo Fisher Scientific, Inc.
▪ 3M Company (Healthcare)
▪ Zimmer Biomet Holdings, Inc.
For purposes of the foregoing, any company for which Sales Growth cannot be calculated for three full annual
Reporting Periods ending within the Performance Period shall be excluded.
(iii) “Net Sales” shall mean, for the Company and each company in the Comparison Group, net sales as
publicly reported for the applicable Reporting Period.
(iv) “Reporting Period” shall mean a calendar year in the case of the Company and each company in the
Comparison Group that reports on a calendar year basis, and in the case of any other company in the Comparison
Group, the four fiscal quarters that include the last fiscal quarter ending prior to December 31 for which such
company has publicly reported prior to the following February 28.
(v) “Sales Growth” for a Reporting Period shall mean the amount by which Net Sales has increased or
decreased relative to the immediately preceding Reporting Period, expressed as a positive or negative percentage
(depending on whether Net Sales increased or decreased) of the Net Sales for such preceding Reporting Period.
(vi) “Sales Growth Percentile Ranking” shall mean the percentile ranking of the Company’s Average Sales
Growth relative to the Average Sales Growth for each company in the Comparison Group, rounded to the whole
nearest percentile. For this purpose, the percentile ranking shall be calculated as 1 - (Rank-1)/(Total of the
Comparison Group plus the Company-1). For example, if the Company ranked 5 th out of 19 companies including
itself, the percentile rank would be calculated as 1 - (5-1)/(19-1) or 1 - (4/18) or 1-.2222 or the 78 th percentile.
(d) The Committee may make such revisions and adjustments to each of the items set forth in Sections 5(c)(i)-(vi)
as it may determine necessary and appropriate in its discretion.
6. Section 162(m) . All payments under this Agreement are intended to constitute "qualified performance-based
compensation" within the meaning of Section 162(m) of the Code. In furtherance thereof, and notwithstanding anything in this
Agreement or the 2011 Plan to the contrary, provided that the Threshold Performance Target has been attained, the Committee shall
have the power and authority, in its sole and absolute exercise of negative discretion, to reduce or increase the vested PSUs such that
the actual earned PSUs will be greater than or less than the vested PSUs, which increase or reduction may be made by taking into
account any criteria the Committee deems appropriate; provided further that notwithstanding anything in this Agreement to the
contrary you shall not become vested in more than 200% of your PSUs.
7. Dividend Equivalents . In connection with your Award, you shall be entitled to receive all of the cash dividends for
which the record date occurs during the period between the commencement of the Performance Period and the Vesting Date with
respect to each Share underlying your vested PSUs (“Dividend Equivalents”). Dividend Equivalents shall be converted into their
equivalent number of additional PSUs rounded down to the nearest whole number of PSUs based on the Fair Market Value of a
Share on the Vesting Date, provided, that the maximum number of additional PSUs you may receive upon such conversion shall be
equal to 200% of your originally granted PSUs. Such additional PSUs shall be subject to the terms and conditions applicable to the
PSUs to which the Dividend Equivalents relate, including, without limitation, the vesting, forfeiture, and payment form and timing
provisions contained herein.
8. In the event you cease to remain in the continuous employment of the Company or a Subsidiary for the entire period
commencing on the Date of Grant and ending on the applicable Vesting Date, your right to receive the Shares issuable pursuant to
the PSUs shall be only as follows:
(a) If you cease to be an Employee prior to the Vesting Date by reason of Disability (as such term is defined in the 2011 Plan
or required under a foreign law that is applicable to you because you are a foreign national or are employed outside the United
States, or both, at that time) or death, you or your estate will become vested on the Vesting Date in a pro-rata portion (determined by
dividing (a) the number of days during the Performance Period in which you were an Employee by (b) the total number of days
during the Performance Period) of your PSUs based upon the Company’s Adjusted EPS Growth and Sales Growth Percentile
Ranking for the Performance Period as determined pursuant to Sections 3, 4 and 5 of these Terms and Conditions. You, your legal
representative or your estate will receive all of the underlying Shares attributable to the vested PSUs as soon as administratively
practicable following (and in no event more than ninety (90) days after) the Vesting Date.
(b) If you cease to be an Employee for any reason other than those provided in (a) above and your Termination
Date is prior to the Vesting Date, you shall immediately forfeit all PSUs granted hereunder effective as of your Termination Date. If
you are a resident of or employed in the United States, “Termination Date” shall mean the effective date of termination of your
employment with your Employer. If you are resident or employed outside of the United States, “Termination Date” shall mean the
earliest of (i) the date on which notice of termination is provided to you, (ii) the last day of your active service with your Employer,
or (iii) the last day on which you are an Employee of your Employer, as determined in each case without including any required
advance notice period and irrespective of the status of the termination under local labor or employment laws.
(c) If you are resident and/or employed in a country that is a member of the European Union, the grant of the PSUs
and these Terms and Conditions are intended to comply with the age discrimination provisions of the EU Equal Treatment
Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of
competent jurisdiction determines that any provision of the Terms and Conditions are invalid or unenforceable, in whole or in part,
under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such
provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
9. Notwithstanding the foregoing, the Company may, in its sole discretion, settle the PSUs (and any Dividend Equivalents)
in the form of: (i) a cash payment to the extent settlement in Shares (1) is prohibited under local law, (2) would require you or the
Company and/or your Employer to obtain the approval of any governmental and/or regulatory body in your country of residence
(and country of employment, if different), or (3) is administratively burdensome; or (ii) Shares, but require you to immediately sell
such Shares (in which case, the Company shall have the authority to issue sales instructions in relation to such Shares on your
behalf).
10. The number of Shares subject to the PSUs shall be subject to adjustment and the vesting dates hereof may be
shall be made, then there shall be substituted for or added to each Share theretofore subject to the PSUs the number and kind of
exchanged, or to which each such Share shall be entitled. The other terms of the PSUs shall also be appropriately amended as may be
necessary to reflect the foregoing events. In the event there shall be any other change in the number or kind of the outstanding
Shares, or of any stock or other securities into which such Shares shall have been exchanged, then if the Committee shall, in its sole
discretion, determine that such change equitably requires an adjustment in the PSUs, such adjustment shall be made in accordance
with such determination.
(b) Fractional Shares resulting from any adjustment in the PSUs may be settled in cash or otherwise as the
(c) The Committee shall have the power to amend the PSUs to permit the immediate vesting of the PSUs (and to
terminate any unvested PSUs) and the distribution of the underlying Shares prior to the effectiveness of (i) any disposition of
substantially all of the assets of the Company or your Employer, (ii) the shutdown, discontinuance of operations or dissolution of the
Company or your Employer, or (iii) the merger or consolidation of the Company or your Employer with or into any other unrelated
corporation.
11. If you are resident or employed outside of the United States, you agree, as a condition of the grant of the PSUs, to
repatriate all payments attributable to the Shares and/or cash acquired under the 2011 Plan (including, but not limited to, dividends,
dividend equivalents and any proceeds derived from the sale of the Shares acquired pursuant to the PSUs) in accordance with local
foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you also
agree to take any and all actions, and consent to any and all actions taken by the Company and its Subsidiaries, as may be required to
allow the Company and its Subsidiaries to comply with local laws, rules and regulations in your country of residence (and country of
employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal legal and
tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).
12. Regardless of any action the Company and/or your Employer take with respect to any income tax (including U.S.
federal, state and local taxes or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding
(“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your
responsibility and that the Company and your Employer (i) make no representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the PSUs, including the grant of the PSUs, the vesting of the PSUs, the
subsequent sale of any Shares acquired pursuant to the PSUs and the receipt of any dividends or dividend equivalents and (ii) do not
commit to structure the terms of the grant or any aspect of the PSUs to reduce or eliminate your liability for Tax-Related Items.
Further, if you become subject to taxation in more than one country between the grant date and the date of any relevant taxable or
withholding event, as applicable, you acknowledge that the Company and/or your Employer (or former employer, as applicable) may
be required to withhold or account for Tax-Related Items in more than one country.
Prior to the delivery of Shares upon the vesting of your PSUs, if your country of residence (and/or the country of
Shares otherwise issuable upon the vesting of the PSUs that have an aggregate Fair Market Value sufficient to pay the minimum
Tax-Related Items required to be withheld with respect to the Shares. In cases where the Fair Market Value of the number of whole
required to be withheld with respect to the Shares in cash from your regular salary and/or wages, or any other amounts payable to
you. In the event the withholding requirements are not satisfied through the withholding of Shares by the Company or through your
regular salary and/or wages or other amounts payable to you by your Employer, no Shares will be issued to you (or your estate) upon
vesting of the PSUs unless and until satisfactory arrangements (as determined by the Board of Directors) have been made by you
with respect to the payment of any Tax-Related Items that the Company or your Employer determines, in its sole discretion, must be
withheld or collected with respect to such PSUs. By accepting this grant of PSUs, you expressly consent to the withholding of Shares
and/or withholding from your regular salary and/or wages or other amounts payable to you as provided for hereunder. All other Tax-
Related Items related to the PSUs and any Shares delivered in payment thereof are your sole responsibility.
13. The PSUs are intended to be exempt from the requirements of Code Section 409A. The 2011 Plan and these Terms and
may, at the Company’s sole discretion and without your consent, amend these Terms and Conditions to cause them to comply with
Agreement” or a similar agreement in order to receive the PSUs or have previously signed such an agreement and you breach any
non-competition, non-solicitation or non-disclosure provision or provision as to ownership of inventions contained therein at any
time while employed by the Company or a Subsidiary, or during the one-year period following termination of employment, any
unvested PSUs shall be rescinded and you shall return to the Company all Shares that were acquired upon vesting of the PSUs that
you have not disposed of. Further, you shall pay to the Company an amount equal to the profit realized by you (if any) on all Shares
that were acquired upon vesting of the PSUs that you have disposed of. For purposes of the preceding sentence, the profit shall be
the Fair Market Value of the Shares at the time of disposition.
15. The PSUs shall be transferable only by will or the laws of descent and distribution. If you shall purport to make any
transfer of the PSUs, except as aforesaid, the PSUs and all rights thereunder shall terminate immediately.
16. The PSUs shall not be vested in whole or in part, and the Company shall not be obligated to issue any Shares subject to
the PSUs, if such issuance would, in the opinion of counsel for the Company, violate the Securities Act of 1933 or any other U.S.
federal, state or non-U.S. statute having similar requirements as it may be in effect at the time. The PSUs are subject to the further
subject to the PSUs under any securities exchange requirements or under any applicable law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of or in connection with the issuance of Shares pursuant to the
PSUs, the PSUs may not be vested in whole or in part unless such listing, qualification, consent or approval shall have been effected
17. The grant of the PSUs shall not confer upon you any right to continue in the employ of your Employer nor limit in any
way the right of your Employer to terminate your employment at any time. You shall have no rights as a shareholder of the Company
with respect to any Shares issuable upon the vesting of the PSUs until the date of issuance of such Shares.
by the Company, in its sole discretion, at any time. The grant of the PSUs under the 2011 Plan is a one-time benefit and does not
create any contractual or other right to receive a grant of PSUs or any other award under the 2011 Plan or other benefits in lieu
thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and
timing of any grant, the number of Shares subject to the grant and the vesting provisions. Any amendment, modification or
termination of the 2011 Plan shall not constitute a change or impairment of the terms and conditions of your employment with your
Employer.
19. Your participation in the 2011 Plan is voluntary. The value of the PSUs and any other awards granted under the 2011
Plan is an extraordinary item of compensation outside the scope of your employment (and your employment contract, if any). Any
grant under the 2011 Plan, including the grant of the PSUs, is not part of normal or expected compensation for purposes of
collection, processing and transfer of such data in relation to the grant of the PSUs and your participation in the 2011 Plan pursuant
to applicable personal data protection laws. The collection, processing and transfer of your personal data is necessary for the
Company’s administration of the 2011 Plan and your participation in the 2011 Plan, and your denial and/or objection to the
The Company and your Employer hold certain personal information about you, including (but not limited to) your name,
home address and telephone number, date of birth, social security number or other employee identification number, salary,
nationality, job title, any Shares or directorships held in the Company, details of all PSUs or any other entitlement to Shares
awarded, canceled, purchased, vested, unvested or outstanding in your favor for the purpose of managing and administering the 2011
Plan (“Data”). The Data may be provided by you or collected, where lawful, from third parties, and the Company and your Employer
will process the Data for the exclusive purpose of implementing, administering and managing your participation in the 2011 Plan.
The data processing will take place through electronic and non-electronic means according to logics and procedures strictly
correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable
laws and regulations in your country of residence. Data processing operations will be performed minimizing the use of personal and
identification data when such operations are unnecessary for the processing purposes sought. The Data will be accessible within the
Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of
the 2011 Plan and for your participation in the 2011 Plan.
HR manager.
22. The grant of the PSUs is not intended to be a public offering of securities in your country of residence (and country of
employment, if different). The Company has not submitted any registration statement, prospectus or other filing(s) with the local
whether you should acquire Shares under the 2011 Plan or provide you with any legal, tax or financial advice with respect to
the grant of the PSUs. The acquisition of Shares involves certain risks, and you should carefully consider all risk factors and
tax considerations relevant to the acquisition of Shares under the 2011 Plan or the disposition of them. Further, you should
carefully review all of the materials related to the PSUs and the 2011 Plan, and you should consult with your personal legal,
tax and financial advisors for professional advice in relation to your personal circumstances.
23. All questions concerning the construction, validity and interpretation of the PSUs and the 2011 Plan shall be governed
thereof. Any disputes regarding the PSUs or the 2011 Plan shall be brought only in the state or federal courts of the state of
Michigan.
24. The Company may, in its sole discretion, decide to deliver any documents related to the PSUs or other awards granted
pursuant to the PSUs be drawn up in English. If you have received these Terms and Conditions, the 2011 Plan or any other
documents related to the PSUs translated into a language other than English and the meaning of the translated version is different
27. Notwithstanding any provisions of these Terms and Conditions to the contrary, the PSUs shall be subject to any special
terms and conditions for your country of residence (and country of employment, if different) set forth in an addendum to these Terms
and Conditions (an “Addendum”). Further, if you transfer your residence and/or employment to another country reflected in an
Addendum to these Terms and Conditions at the time of transfer, the special terms and conditions for such country will apply to you
to the extent the Company determines, in its sole discretion, that the application of such special terms and conditions is necessary or
advisable in order to comply with local law, rules and regulations, or to facilitate the operation and administration of the award and
the 2011 Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate
your transfer). In all circumstances, any applicable Addendum shall constitute part of these Terms and Conditions.
28. The Company reserves the right to impose other requirements on the PSUs, any Shares acquired pursuant to the PSUs
29. Notwithstanding any other provision of this Agreement to the contrary, you acknowledge and agree that your PSUs,
to time in order to comply with changes in laws, rules or regulations that are applicable to such PSUs and Shares. You agree and
instructions, on your behalf, to any brokerage firm and/or third party administrator engaged by the Company to hold your Shares and
other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company.
To the extent that the terms of this Agreement and the Recoupment Policy conflict, the terms of the Recoupment Policy shall prevail.
30. By accepting the grant of the PSUs, you acknowledge that you have read these Terms and Conditions, the
Addendum to these Terms and Conditions (as applicable) and the 2011 Plan, and specifically accept and agree to the
provisions therein.
*****
Exhibit 10vi
February 10, 2016
Dear First Name:
This confirms that we are awarding you a nonstatutory stock option for xxx shares of Stryker Corporation Common Stock at a price of $xx.xx per share. Except as
otherwise provided in the Terms and Conditions, you may exercise this option at 20% per year beginning on February 10, 2017, and it will expire on February 9,
2026.
In addition to the nonstatutory option grant, you are receiving xxx RSUs with respect to Common Stock of Stryker Corporation. Except as otherwise provided in
the enclosed Terms and Conditions, these RSUs will vest on March 21, 2017.
You can view these awards online at http://www.ubs.com/onesource/syk starting on March 1 , 2016 . The detailed terms of the option and RSUs by which
you will be bound are in the Terms and Conditions, any applicable country addendum and the provisions of the Company's 2011 Long-Term Incentive Plan. Those
documents, together with the related Prospectus, are available on the UBS One Source web site.
You can find additional educational materials on the UBS One Source web site in the Library section, including Stock Option and RSUs brochures, Stock Option
and RSUs Frequently Asked Questions and Stock Option and RSUs Tax Questions & Answers.
Thank you for your partnership and your contributions toward positioning Stryker for long-term success.
Sincerely,
Kevin A. Lobo
Chairman and CEO
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STRYKER CORPORATION

NON-EMPLOYEE DIRECTORS
1. The Options to purchase Shares of Stryker Corporation (the “Company”) granted to you during 2016 are subject to these
Terms and Conditions Relating to Nonstatutory Stock Options Granted Pursuant to the 2011 Long-Term Incentive Plan (the “Terms
and Conditions”) and all of the terms and conditions of the Stryker Corporation 2011 Long-Term Incentive Plan, as amended (the
“2011 Plan”), which is incorporated herein by reference. In the case of a conflict between these Terms and Conditions and the terms
of the 2011 Plan, the provisions of the 2011 Plan will govern. Capitalized terms used but not defined herein have the meaning
provided therefor in the 2011 Plan.
2. Upon the termination of your service as a Director your right to exercise the Options shall be only as follows:
(a) If your service as a Director is terminated by Retirement (as such term is defined in the 2011 Plan or determined
under local law), you or your estate (in the event of your death after termination by Retirement) shall have the right, at any time on
or prior to the 10 th anniversary of the grant date, to exercise the Options with respect to all or any part of the Shares subject thereto,
regardless of whether the right to purchase Shares had vested on or before the date of your Retirement.
(b) If your service as a Director is terminated by reason of Disability (as such term is defined in the 2011 Plan or determined
under local law) or death, you, your legal representative or your estate shall have the right, for a period of one year following such
termination, to exercise the Options with respect to all or any part of the Shares subject thereto, regardless of whether the right to
purchase such Shares had vested on or before the date of your termination by Disability or death.
(c) If you cease to be a Director for any reason other than those provided in (a) or (b) above, you or your estate (in
the event of your death after such termination) may, within the thirty (30)-day period following such termination, exercise the
Options with respect to only such number of Shares as to which the right of exercise had vested on or before the Termination Date,
which shall be the last day of your active service as a Director.
(d) Notwithstanding the foregoing, the Options shall not be exercisable in whole or in part (i) after the 10 th
anniversary of the grant date or (ii) except as provided in Section 3(c) hereof or in the event of termination of service as a Director
because of Disability, Retirement or death, unless you shall have continued to serve as a Director for one (1) year following the date
of grant of the Options.
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(e) Notwithstanding the foregoing, if you are eligible for Retirement but cease to be a Director for any other reason
before you retire, the right to exercise the Options shall be determined as if your service as a Director ceased by reason of
Retirement.
3. The number of Shares subject to the Options and the price to be paid therefor shall be subject to adjustment and the term
and exercise dates hereof may be accelerated as follows:
shall be made, then there shall be substituted for or added to each Share theretofore subject to the Options the number and kind of
exchanged, or to which each such Share shall be entitled. The Options shall also be appropriately amended as to price and other
terms as may be necessary to reflect the foregoing events. In the event there shall be any other change in the number or kind of the
outstanding Shares, or of any stock or other securities into which such Common Stock shall have been exchanged, then if the Board
of Directors shall, in its sole discretion, determine that such change equitably requires an adjustment in the Options, such adjustment
shall be made in accordance with such determination.
(b) Fractional Shares resulting from any adjustment in the Options may be settled in cash or otherwise as the Board
of Directors shall determine, in its sole discretion. Notice of any adjustment will be given to you and such adjustment (whether or not
(c) The Board of Directors shall have the power to amend the Options to permit the exercise of the Options (and to
terminate any unexercised Options) prior to the effectiveness of (i) any disposition of substantially all of the assets of the Company,
(ii) the shutdown, discontinuance of operations or dissolution of the Company, or (iii) the merger or consolidation of the Company
with or into any other unrelated corporation.
4. To exercise the Options, you must complete the exercise procedures as established through UBS, the outsourced stock
plan administration vendor, at www.ubs.com/onesource/SYK or by telephone at +1 860 727 1515 (or such other direct dial-in
number that may be established from time to time). As part of such procedures, you shall be required to specify the number of Shares
that you elect to purchase and the date on which such purchase is to be made, and you shall be required to make full payment of the
Exercise Price. An Option shall not be deemed to have been exercised (i.e., the exercise date shall not be deemed to have occurred)
until the notice of such exercise and payment in full of the Exercise Price are provided. The exercise date will be defined by the New
York Stock Exchange (NYSE) trading hours. If an exercise is completed after the market close or on a weekend, the exercise will be
dated the next following trading day.
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The Exercise Price may be paid in such manner as the Board of Directors may specify from time to time in its sole discretion
and as established through UBS, including (but not limited to) the two following methods: (i) by a net exercise arrangement pursuant
to which the Company will reduce the number of Shares issued upon exercise by the largest whole number of Shares with an
aggregate Fair Market Value on the date of purchase sufficient to cover the aggregate Exercise Price, or (ii) cash payment. In cases
where you utilize the net exercise arrangement and the Fair Market Value of the number of whole Shares withheld is greater than the
aggregate Exercise Price, the Company shall make a cash payment to you equal to the difference as soon as administratively
practicable.
5. Regardless of any action the Company takes with respect to any or all income tax (including U.S. federal, state and local
taxes and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related
Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility
and that the Company (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection
with any aspect of the Options, including the grant of the Options, the vesting of the Options, the exercise of the Options, the
subsequent sale of any Shares acquired pursuant to the Options and the receipt of any dividends and (ii) does not commit to structure
the terms of the grant or any aspect of the Options to reduce or eliminate your liability for Tax-Related Items. Further, if you become
subject to taxation in more than one country between the grant date and the date of any relevant taxable or withholding event, as
applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one
country.
Prior to the delivery of Shares upon exercise of your Options, if your country of residence requires withholding of Tax-
Related Items, the Company shall withhold a sufficient number of whole Shares otherwise issuable upon exercise of the Options that
have an aggregate Fair Market Value sufficient to pay the minimum Tax-Related Items required to be withheld with respect to the
Shares. In cases where the Fair Market Value of the number of whole Shares withheld is greater than the minimum Tax-Related
Items required to be withheld, the Company shall make a cash payment to you equal to the difference as soon as administratively
practicable. The cash equivalent of the Shares withheld will be used to settle the obligation to withhold the Tax-Related Items.
Alternatively, the Company may withhold the minimum Tax-Related Items required to be withheld with respect to the Shares in cash
from your director fees or other amounts payable to you. In the event the withholding requirements are not satisfied through the
withholding of Shares or through your director fees or any other amounts payable to you, no Shares will be issued to you (or your
estate) upon exercise of the Options unless and until satisfactory arrangements have been made by you with respect to the payment
of any Tax-Related Items that the Company determines, in its sole discretion, must be withheld or collected with respect to such
Options. By accepting these Options, you expressly consent to the withholding of Shares and/or the withholding from your director
fees or other amounts payable to you as provided for hereunder. All other Tax-Related Items related to the Options and any Shares
delivered in payment thereof are your sole responsibility.
6. The Options are intended to be exempt from the requirements of Code Section 409A. The 2011 Plan and these Terms
and Conditions shall be administered and interpreted in a manner consistent with this intent. If the Company determines that these
Terms and Conditions are subject to Code Section 409A and that it has failed to comply with the requirements of that Section, the
Company may, at the Company’s sole discretion, and without your consent, amend these Terms and Conditions to cause them to
comply with Code Section 409A or be exempt from Code Section 409A.
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7. The Options shall be transferable only by will or the laws of descent and distribution and shall be exercisable during your
lifetime only by you. If you purport to make any transfer of the Options, except as aforesaid, the Options and all rights thereunder
shall terminate immediately.
8. If you are resident outside of the United States, you agree, as a condition of the grant of the Options, to repatriate all
payments attributable to the Shares and/or cash acquired under the 2011 Plan (including, but not limited to, dividends and any
proceeds derived from the sale of the Shares acquired pursuant to the Options) if required by and in accordance with local foreign
exchange rules and regulations in your country of residence. In addition, you also agree to take any and all actions, and consent to
any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to
comply with local laws, rules and regulations in your country of residence. Finally, you agree to take any and all actions as may be
required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence.
9. If you are resident in a country that is a member of the European Union, the grant of the Options and these Terms and
Conditions are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as
implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction
determines that any provision of these Terms and Conditions is invalid or unenforceable, in whole or in part, under the Age
Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the
minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
10. The Options shall not be exercisable in whole or in part, and the Company shall not be obligated to issue any Shares
subject to the Options, if such exercise and sale would, in the opinion of counsel for the Company, violate the Securities Act of 1933
or any other U.S. federal, state or non-U.S. statute having similar requirements as it may be in effect at the time. The Options are
subject to the further requirement that, if at any time the Board of Directors shall determine in its discretion that the listing or
qualification of the Shares subject to the Options under any securities exchange requirements or under any applicable law, or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition of or in connection with the
issuance of Shares pursuant to the Options, the Options may not be exercised in whole or in part unless such listing, qualification,
consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors.
11. The grant of the Options shall not confer upon you any right to serve as a Director nor limit in any way the right of the
Company to terminate your service as a Director at any time. You shall have no rights as a shareholder of the Company with respect
to any Shares issuable upon the exercise of the Options until the date of issuance of such Shares.
by the Company, in its sole discretion, at any time. The grant of the Options under the 2011 Plan is a one-time benefit and does not
create any contractual or other right to receive a grant of stock options or benefits in lieu of stock options in the future. Future grants,
if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of
Shares subject to the grant, the vesting provisions and the exercise price. Any amendment, modification or termination of the 2011
Plan shall not constitute a change or impairment of the terms and conditions of your service as a Director of the Company.
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13. Your participation in the 2011 Plan is voluntary.
14. These Terms and Conditions shall bind and inure to the benefit of the Company, its successors and assigns and you and
your estate in the event of your death.
15. The Company hereby notifies you of the following in relation to your personal data and the collection, processing and
transfer of such data in relation to the grant of the Options and your participation in the 2011 Plan pursuant to applicable personal
data protection laws. The collection, processing and transfer of your personal data is necessary for the Company’s administration of
the 2011 Plan and your participation in the 2011 Plan, and your denial and/or objection to the collection, processing and transfer of
personal data may affect your ability to participate in the 2011 Plan. As such, you voluntarily acknowledge, consent and agree
(where required under applicable law) to the collection, use, processing and transfer of personal data as described herein.
The Company holds certain personal information about you, including (but not limited to) your name, home address and
telephone number, date of birth, social security number or other identification number, nationality, any Shares or directorships held
in the Company, details of all Options or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or
outstanding in your favor for the purpose of managing and administering the 2011 Plan (“Data”). The Data may be provided by you
or collected, where lawful, from third parties, and the Company will process the Data for the exclusive purpose of implementing,
administering and managing your participation in the 2011 Plan. The data processing will take place through electronic and non-
electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with
confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence. Data processing
operations will be performed minimizing the use of personal and identification data when such information is unnecessary for the
processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access
for purposes of the implementation, administration and operation of the 2011 Plan and for your participation in the 2011 Plan.
The Company will transfer Data as necessary for the purpose of implementation, administration and management of your
participation in the 2011 Plan, and the Company may further transfer Data to any third parties assisting the Company in the
implementation, administration and management of the 2011 Plan. These recipients may be located in the European Economic Area,
the United States or elsewhere throughout the world. You hereby authorize (where required under applicable law) the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and
managing your participation in the 2011 Plan, including any requisite transfer of such Data as may be required for the administration
of the 2011 Plan and/or the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to
deposit any Shares acquired pursuant to the 2011 Plan.
integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data and (d) oppose, for legal reasons,
operation of the 2011 Plan and your participation in the 2011 Plan. You may seek to exercise these rights by contacting the
Company's HR department.
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16. The grant of the Options is not intended to be a public offering of securities in your country of residence. The
Company has not submitted any registration statement, prospectus or other filing with the local securities authorities (unless
otherwise required under local law). No employee of the Company is permitted to advise you on whether you should purchase
Shares under the 2011 Plan or provide you with any legal, tax or financial advice with respect to the grant of your Options.
Investment in Shares involves a degree of risk. Before deciding to purchase Shares pursuant to the Options, you should carefully
consider all risk factors and tax considerations relevant to the acquisition of Shares under the 2011 Plan and the disposition of them.
Further, you should carefully review all of the materials related to the Options and the 2011 Plan, and you should consult with your
personal legal, tax and financial advisors for professional advice in relation to your personal circumstances.
17. All questions concerning the construction, validity and interpretation of the Options and the 2011 Plan shall be
governed and construed according to the laws of the state of Michigan, without regard to the application of the conflicts of laws
provisions thereof. Any disputes regarding the Options or the 2011 Plan shall be brought only in the state or federal courts of the
state of Michigan.
18. The Company may, in its sole discretion, decide to deliver any documents related to the Options or other awards
granted to you under the 2011 Plan by electronic means. You hereby consent to receive such documents by electronic delivery and
agree to participate in the 2011 Plan through an on-line or electronic system established and maintained by the Company or a third
party designated by the Company.
pursuant to the Options be drawn up in English. If you have received these Terms and Conditions, the 2011 Plan or any other
documents related to the Options translated into a language other than English and, if the meaning of the translated version is
different than the English version, the English version will control.
21. Notwithstanding any provisions of these Terms and Conditions to the contrary, if your country of residence is Belgium,
the Options shall be subject to the special terms and conditions in the addendum to these Terms and Conditions (an “Addendum”).
Further, if you transfer your residence to a country that at the time of transfer has special terms and conditions for option grants,
those special terms and conditions will apply to you to the extent the Company determines, in its sole discretion, that the application
of such special terms and conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate
the operation and administration of the award and the 2011 Plan (or the Company may establish alternative terms and conditions as
may be necessary or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of
these Terms and Conditions.
22. The Company reserves the right to impose other requirements on the Options, any Shares acquired pursuant to the
Options and your participation in the 2011 Plan to the extent the Company determines, in its sole discretion, that such other
requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and
administration of the award and the 2011 Plan. Such requirements may include (but are not limited to) requiring you to sign any
agreements or undertakings that may be necessary to accomplish the foregoing.
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STRYKER CORPORATION
ADDENDUM TO
BELGIUM
In addition to the terms of the 2011 Plan and the Terms and Conditions, the Options are subject to the following additional terms and
Director Name: ___________________________ Number of Shares: _____________
Date of Grant: ___________________________ Exercise Price: _____________________
1. Acceptance of Options . In order for the Options to be subject to taxation at the time of grant, you must affirmatively
accept the Options in writing within 60 days of the Date of Grant specified above by signing below and returning this original
executed Addendum to:
Stock Plan Administration Department

2825 Airview Blvd.
Kalamazoo, Michigan 49002 (U.S.A)
I hereby accept the ________ (number) Options granted to me by the Company on the Date of Grant. I also acknowledge that I have
been encouraged to discuss the acceptance of the Options and the applicable tax treatment with a financial and/or tax advisor, and
that my decision to accept the Options is made in full knowledge.
Director Signature: _______________________________
Director Printed Name: _______________________________
Date of Acceptance: _______________________________
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If you fail to affirmatively accept the Options in writing within 60 days of the Date of Grant, the Options will not be subject to
taxation at the time of grant but instead will be subject to taxation on the date you exercise the Options (or such other treatment as
may apply under Belgian tax law at the time of exercise).
2. Payment of Exercise Price Limited to Cash Payment . Notwithstanding anything to the contrary in Section 4 of the
Terms and Conditions, you shall be permitted to pay the Exercise Price only by means of a cash payment (and the net exercise
method shall not be permitted).
3. Undertaking for Qualifying Options . If you are accepting the Options in writing within 60 days of the Date of Grant and
wish to have the Options subject to a lower valuation for Belgium tax purposes pursuant to the article 43, §6 of the Belgian law of 26
March 1999, you may agree and undertake to (a) not exercise the Options before the end of the third calendar year following the
calendar year in which the Date of Grant falls, and (b) not transfer the Options under any circumstances (except upon on rights your
heir might have in the Options upon your death). If you wish to make this undertaking, you must sign below and return this executed
Addendum to the address listed above.
Director Signature: _______________________________
Director Printed Name: _______________________________
*****
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STRYKER CORPORATION

1. The Restricted Stock Units (“RSUs”) with respect to Common Stock of Stryker Corporation (the “Company”) granted
to you during 2016 are subject to these Terms and Conditions Relating to Restricted Stock Units Granted Pursuant to the 2011 Long-
Term Incentive Plan (the “Terms and Conditions”) and all of the terms and conditions of the Stryker Corporation 2011 Long-Term
Incentive Plan, as amended (the “2011 Plan”), which is incorporated herein by reference. In the case of a conflict between these
Terms and Conditions and the terms of the 2011 Plan, the provisions of the 2011 Plan will govern. Capitalized terms used but not
defined herein have the meaning provided therefor in the 2011 Plan.
2. Your right to receive the Shares issuable pursuant to the RSUs shall be only as follows:
(a) If you continue to be a Director, you will receive the Shares underlying the RSUs that have become vested as soon as
administratively possible following the vesting date as set forth in the award document.
(b) If you cease to be a Director by reason of Disability (as such term is defined in the 2011 Plan or determined under local
law) or death prior to the date that your RSUs become fully vested, you or your estate will become fully vested in your RSUs, and
you, your legal representative or your estate will receive all of the underlying Shares as soon as administratively practicable
following your termination by Disability or death.
(c) If you cease to be a Director prior to the date that your RSUs become fully vested for any reason other than
those provided in (b) above, you shall cease vesting in your RSUs effective as of your Termination Date, which shall be the last day
of your active service as a Director.
(d) Notwithstanding the foregoing, the Company may, in its sole discretion, settle your RSUs in the form of: (i) a
cash payment to the extent settlement in Shares (1) is prohibited under local law,(2) would require you or the Company to obtain the
approval of any governmental and/or regulatory body in your country of residence or (3) is administratively burdensome or (ii)
Shares, but require you to immediately sell such Shares (in which case, the Company shall have the authority to issue sales
instructions in relation to such Shares on your behalf).
3. The number of Shares subject to the RSUs shall be subject to adjustment and the vesting dates hereof may be
or kind of shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise) or if the
number of such Shares shall be increased through the payment of a stock dividend or a dividend on the Shares of rights or warrants
to purchase securities of the Company shall be made, then there shall be substituted for or added to each Share theretofore subject to
the RSUs the number and kind of shares of stock or other securities into which each outstanding Share shall be so changed, or for
which each such Share shall be exchanged, or to which each such Share shall be entitled. The other terms of the RSUs shall also be
appropriately amended as may be necessary to reflect the foregoing events. In the
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event there shall be any other change in the number or kind of the outstanding Shares, or of any stock or other securities into which
such Shares shall have been exchanged, then if the Board of Directors shall, in its sole discretion, determine that such change
equitably requires an adjustment in the RSUs, such adjustment shall be made in accordance with such determination.
(b) Fractional Shares resulting from any adjustment in the RSUs may be settled in cash or otherwise as the Board
of Directors shall determine, in its sole discretion. Notice of any adjustment will be given to you and such adjustment (whether or not
(c) The Board of Directors shall have the power to amend the RSUs to permit the immediate vesting of the RSUs
(and to terminate any unvested RSUs) and the distribution of the underlying Shares prior to the effectiveness of (i) any disposition of
substantially all of the assets of the Company, (ii) the shutdown, discontinuance of operations or dissolution of the Company, or (iii)
the merger or consolidation of the Company with or into any other unrelated corporation.
4. If you are resident outside of the United States, you agree, as a condition of the grant of the RSUs, to repatriate all
payments attributable to the Shares and/or cash acquired under the 2011 Plan (including, but not limited to, dividends, dividend
equivalents and any proceeds derived from the sale of the Shares acquired pursuant to the RSUs) required by and in accordance with
local foreign exchange rules and regulations in your country of residence. In addition, you also agree to take any and all actions, and
consent to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its
Subsidiaries to comply with local laws, rules and regulations in your country of residence. Finally, you agree to take any and all
actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your
country of residence.
5. If you are resident in a country that is a member of the European Union, the grant of the RSUs and these Terms and Conditions
are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into
local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction determines that any
provision of the Terms and Conditions are invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the
Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent
necessary to make it valid and enforceable to the full extent permitted under local law.
6. Regardless of any action the Company takes with respect to any or all income tax (including U.S. federal, state and local
taxes or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”),
you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that
the Company (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any
aspect of the RSUs, including the grant of the RSUs, the vesting of the RSUs, the subsequent sale of any Shares acquired pursuant to
the RSUs and the receipt of any dividends or dividend equivalents and (ii) do not commit to structure the terms of the grant or any
aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items. Further, if you become subject to taxation in more
than one country between the grant date and the date of any relevant taxable or withholding event, as applicable, you acknowledge
that the Company may be required to withhold or account for Tax-Related Items in more than one country.
Prior to the delivery of Shares upon the vesting of your RSUs, if your country of residence requires withholding of Tax-
Related Items, the Company shall withhold a sufficient number of whole Shares otherwise issuable upon the vesting of the RSUs
that have an aggregate Fair Market Value sufficient to pay the minimum Tax-Related Items required to be withheld with respect to
the Shares. In cases where the Fair Market Value
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of the number of whole Shares withheld is greater than the minimum Tax-Related Items required to be withheld, the Company shall
make a cash payment to you equal to the difference as soon as administratively practicable. The cash equivalent of the Shares
withheld will be used to settle the obligation to withhold the Tax-Related Items. Alternatively, the Company may withhold the
minimum Tax-Related Items required to be withheld with respect to the Shares in cash from your director fees or any other amounts
payable to you. In the event the withholding requirements are not satisfied through the withholding of Shares by the Company or
through your director fees or other amounts payable to you, no Shares will be issued to you (or your estate) upon vesting of the
RSUs unless and until satisfactory arrangements have been made by you with respect to the payment of any Tax-Related Items that
the Company determines, in its sole discretion, must be withheld or collected with respect to such RSUs. By accepting this grant of
RSUs, you expressly consent to the withholding of Shares and/or withholding from your director fees or other amounts payable to
you as provided for hereunder. All other Tax-Related Items related to the RSUs and any Shares delivered in payment thereof are
your sole responsibility.
7. The RSUs are intended to be exempt from the requirements of Code Section 409A. The 2011 Plan and these Terms and
may, at the Company’s sole discretion, and without your consent, amend these Terms and Conditions to cause them to comply with
8. The RSUs shall be transferable only by will or the laws of descent and distribution. If you purport to make any transfer
of the RSUs, except as aforesaid, the RSUs and all rights thereunder shall terminate immediately.
9. The RSUs shall not be vested in whole or in part, and the Company shall not be obligated to issue any Shares subject to
the RSUs, if such issuance would, in the opinion of counsel for the Company, violate the Securities Act of 1933 or any other U.S.
federal, state or non-U.S. statute having similar requirements as it may be in effect at the time. The RSUs are subject to the further
subject to the RSUs under any securities exchange requirements or under any applicable law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of or in connection with the issuance of shares pursuant to the
RSUs, the RSUs may not be vested in whole or in part unless such listing, qualification, consent or approval shall have been effected
10. The grant of the RSUs shall not confer upon you any right to serve as a Director of the Company nor limit in any way
the right of the Company to terminate your service as a Director at any time. You shall have no rights as a shareholder of the
Company with respect to any Shares issuable upon the vesting of the RSUs until the date of issuance of such Shares.
11. You acknowledge and agree that the 2011 Plan is discretionary in nature and may be amended, cancelled, or terminated
by the Company, in its sole discretion, at any time. The grant of the RSUs under the 2011 Plan is a one-time benefit and does not
create any contractual or other right to receive a grant of RSUs or any other award under the 2011 Plan or other benefits in lieu
thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and
timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or
termination of the 2011 Plan shall not constitute a change or impairment of the terms and conditions of your service as a Director of
the Company.
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3
12. Your participation in the 2011 Plan is voluntary.
13. These Terms and Conditions shall bind and inure to the benefit of the Company, its successors and assigns and you and
your estate in the event of your death.
14. The Company hereby notifies you of the following in relation to your personal data and the collection, processing and
transfer of such data in relation to the grant of the RSUs and your participation in the 2011 Plan pursuant to applicable personal data
protection laws. The collection, processing and transfer of your personal data is necessary for the Company’s administration of the
2011 Plan and your participation in the 2011 Plan, and your denial and/or objection to the collection, processing and transfer of
personal data may affect your ability to participate in the 2011 Plan. As such, you voluntarily acknowledge, consent and agree
(where required under applicable law) to the collection, use, processing and transfer of personal data as described herein.
The Company holds certain personal information about you, including (but not limited to) your name, home address and
telephone number, date of birth, social security number or other identification number, nationality, any Shares or directorships held
in the Company, details of all RSUs or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or
outstanding in your favor for the purpose of managing and administering the 2011 Plan (“Data”). The Data may be provided by you
or collected, where lawful, from third parties, and the Company will process the Data for the exclusive purpose of implementing,
administering and managing your participation in the 2011 Plan. The data processing will take place through electronic and non-
electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with
confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence. Data processing
operations will be performed minimizing the use of personal and identification data when such information is unnecessary for the
processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access
for purposes of the implementation, administration and operation of the 2011 Plan and for your participation in the 2011 Plan.
The Company will transfer Data as necessary for the purpose of implementation, administration and management of your
participation in the 2011 Plan, and the Company may further transfer Data to any third parties assisting the Company in the
implementation, administration and management of the 2011 Plan. These recipients may be located in the European Economic Area,
the United States or elsewhere throughout the world. You hereby authorize (where required under applicable law) the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and
managing your participation in the 2011 Plan, including any requisite transfer of such Data as may be required for the administration
of the 2011 Plan and/or the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to
deposit any Shares acquired pursuant to the 2011 Plan.
operation of the 2011 Plan and your participation in the 2011 Plan. You may seek to exercise these rights by contacting the
Company's HR department.
15. The grant of the RSUs is not intended to be a public offering of securities in your country of residence. The Company
has not submitted any registration statement, prospectus or other filing with the local securities authorities (unless otherwise required
under local law). No employee of the Company is
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4
permitted to advise you on whether you should acquire Shares under the 2011 Plan or provide you with any legal, tax or
financial advice with respect to the grant of the RSUs. The acquisition of Shares involves certain risks, and you should
carefully consider all risk factors and tax considerations relevant to the acquisition of Shares under the 2011 Plan and the
disposition of them. Further, you should carefully review all of the materials related to the RSUs and the 2011 Plan, and you
should consult with your personal legal, tax and financial advisors for professional advice in relation to your personal
circumstances.
16. All questions concerning the construction, validity and interpretation of the RSUs and the 2011 Plan shall be governed
thereof. Any disputes regarding the RSUs or the 2011 Plan shall be brought only in the state or federal courts of the state of
Michigan.
17. The Company may, in its sole discretion, decide to deliver any documents related to the RSUs or other awards granted
pursuant to the RSUs be drawn up in English. If you have received these Terms and Conditions, the 2011 Plan or any other
documents related to the RSUs translated into a language other than English and the meaning of the translated version is different
20. Notwithstanding any provisions of these Terms and Conditions to the contrary, the RSUs shall be subject to any special
terms and conditions for your country of residence set forth in an addendum to these Terms and Conditions (an “Addendum”).
Further, if you transfer your residence to another country reflected in an Addendum to these Terms and Conditions at the time of
transfer, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole
discretion, that the application of such special terms and conditions is necessary or advisable in order to comply with local law, rules
and regulations or to facilitate the operation and administration of the award and the 2011 Plan (or the Company may establish
alternative terms and conditions as may be necessary or advisable to accommodate your transfer). In all circumstances, any
applicable Addendum shall constitute part of these Terms and Conditions.
21. The Company reserves the right to impose other requirements on the RSUs, any Shares acquired pursuant to the RSUs,
necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the
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5
EXHIBIT 21(i)
STRYKER CORPORATION LIST OF SUBSIDIARIES

As of January 31, 2016
Name of Subsidiary State or Country of Incorporation
Alcott Indemnity Company USA - Vermont

Ascential LLC USA - Delaware
Benoist Girard SAS France
Berchtold + Fritz GmbH Germany
Berchtold Asia SDN BHD Malaysia
Berchtold China Ltd China
Berchtold Consulting GmbH Switzerland
Berchtold Corporation USA - Delaware
Berchtold do Brasil Importacao e Exportacao Ltda. EPP Brazil
Berchtold Espana S.L. Spain
Berchtold GmbH & Co KG Germany
Berchtold Holding GmbH Germany
Berchtold Holding Switzerland GmbH (f/k/a Berchtold Holding AG) Switzerland
Berchtold Pacific Pty Australia
Berchtold UK Limited United Kingdom
Cersys, Inc. USA - Delaware
Changzhou Orthomed Medical Instruments Company Limited China
Colorado Biomedical, Inc. USA - Colorado
Concentric Medical Europe SARL Belgium
Concentric Medical, Inc. USA - Delaware
Everest Biomedical Instruments Company USA - Delaware
Gaymar Industries, Inc. USA - New York
Gongpin (Shanghai) Medical Devices Trading Company Limited China
Howmedica International S. de R.L. Panama
Howmedica Osteonics Corp. USA - New Jersey
Image Guided Technologies, Inc. USA - Colorado
Instrumedics, LLC USA - Michigan
Jiangsu Chuangyi Medical Instrument Company Limited China
Mako Surgical, Inc. USA - Delaware
Medicycle, Inc. USA - Arizona
MediSearch PR, Inc. Puerto Rico
Memometal Technologies SAS France
Memometal, Inc. USA - Delaware
MicroDexterity Systems, Inc. USA - Delaware
Muka Metal Ticaret ve Sanayi Anonim Sirketi Turkey
N.V. Stryker SA Belgium
Nettrick Limited Ireland
OOO Stryker Russia
Orthomed (Hong Kong) Medical Instrument Company Limited Hong Kong
Orthovita, Inc. USA - Pennsylvania
OtisMed Corporation USA - California
ParaMed Corporation USA - Utah
Pficonprod Pty. Ltd. Australia
Pivot Medical, Inc. USA - Delaware
S.I.R.E., LLC USA - Michigan
SpineCore, Inc. USA - Delaware
SSI Divesture, Inc. USA - Massachusetts
Star Acquisition Sub. Inc. USA - Delaware
Stryker (Barbados) Foreign Sales Corporation Barbados
Stryker (Beijing) Healthcare Products Co. Ltd. China
Stryker (India) Private Limited India
Stryker (Shanghai) Healthcare Products Co., Ltd. China
Stryker (Suzhou) Medical Technology Co Ltd. China
Stryker (Thailand) Limited Thailand
Stryker AB Sweden
Stryker Acquisitions BV The Netherlands
Stryker Asia Holdings CV The Netherlands
Stryker Australia LLC USA - Delaware
Stryker Australia Pty. Ltd. Australia
Stryker Berchtold BV (f/k/a Stryker Real Estate BV) The Netherlands
Stryker Beteiligungs GmbH Germany
Stryker Canada Holding Company Canada
Stryker Canada LP Canada
Stryker Canadian Management ULC Canada
Stryker Capital BV The Netherlands
Stryker China Limited Hong Kong
Stryker Colombia SAS Colombia
Stryker Combo LLC USA - Michigan
Stryker Communications, Inc. USA - Delaware
Stryker Corporation (Chile) y Compania Limitada Chile
Stryker Corporation (Malaysia) Sdn. Bhd. Malaysia
Stryker Czech Republic s.r.o. Czech Republic
Stryker do Brasil Ltda. Brazil
Stryker EMEA Supply Chain Services BV The Netherlands
Stryker European Coordination Center BV The Netherlands
Stryker European Holdings Coöperatief U.A. The Netherlands
Stryker European Holdings I, LLC USA - Delaware
Stryker European Holdings II, LLC USA - Delaware
Stryker European Holdings III, LLC USA - Delaware
Stryker European Holdings IV, LLC USA - Delaware
Stryker European Holdings V, LLC USA - Delaware
Stryker European Holdings VI, LLC USA - Delaware
Stryker European Operations BV The Netherlands
Stryker European Technologies CV The Netherlands
Stryker Far East, Inc. USA - Delaware
Stryker Foreign Acquisitions, Inc. USA - Delaware
Stryker France Holding SNC France
Stryker France MM Holdings SAS France
Stryker France SAS France
Stryker Funding BV The Netherlands
Stryker GI Ltd. Israel
Stryker GI Services CV The Netherlands
Stryker Global Technology Center Private Limited India
Stryker GmbH & Co. KG Germany
Stryker GmbH (Austria) Austria
Stryker GmbH (f/k/a Stryker Trauma SA) Switzerland
Stryker Grundstucks GmbH & Co KG Germany
Stryker Grundstucks Verwaltungs GmbH Germany
Stryker Holdings BV The Netherlands
Stryker Hong Kong Holding Ltd Hong Kong
Stryker Iberia, SL Spain
Stryker IFSC Limited Ireland
Stryker International Acquisitions BV The Netherlands
Stryker International Holdings BV The Netherlands
Stryker Investment Holdings BV The Netherlands
Stryker Ireland Holdings Ireland
Stryker Ireland Limited Ireland
Stryker Italia SRL Italy
Stryker Japan Holdings BV The Netherlands
Stryker Japan KK Japan
Stryker Korea Ltd. South Korea
Stryker Lebanon (Offshore) SAL Lebanon
Stryker Leibinger GmbH & Co. KG Germany
Stryker Luxembourg Holdings SARL Luxembourg
Stryker Luxembourg SARL Luxembourg
Stryker Mauritius Holding Ltd. Mauritius
Stryker Medical London LP (f/k/a Stryker Medical Quebec LP) Canada
Stryker Medtech KK Japan
Stryker Medtech Limited Ireland
Stryker Mexico, S.A. de C.V. Mexico
Stryker Nederland BV The Netherlands
Stryker New Zealand Limited New Zealand
Stryker Newplant GmbH Switzerland
Stryker NV Operations Limited Ireland
Stryker Osteonics SA Switzerland
Stryker Pacific Limited Hong Kong
Stryker Performance Solutions LLC USA - New Jersey
Stryker Polska Sp.z.o.o. Poland
Stryker Portugal - Produtos Medicos Unipessoal, Lda. Portugal
Stryker Puerto Rico Limited Ireland
Stryker Romania SRL Romania
Stryker Sales Corporation USA - Michigan
Stryker Services SA Switzerland
Stryker Servicios Administrativos S. de R.L. de C.V. Mexico
Stryker Singapore Private Limited Singapore
Stryker South Africa (Proprietary) Limited South Africa
Stryker Spain Holding, SL Spain
Stryker Spine Sarl Switzerland
Stryker Spine SAS France
Stryker Sustainability Solutions, Inc. USA - Delaware
Stryker Tibbi Cihazlan Sanayi Ve Ticaret Limited Turkey
Stryker Trauma GmbH Germany
Stryker U.S. Holding LLC USA - Delaware
Stryker UK Limited United Kingdom
Stryker Verwaltungs GmbH Germany
Surpass Medical, Ltd. Israel
Trauson (China) Medical Instrument Company Limited China
Trauson (Hong Kong) Company Limited Hong Kong
Trauson Holdings (BV) Limited British Virgin Islands
Trauson Holdings (Hong Kong) Company Limited Hong Kong
Trauson Holdings Company Limited Cayman Islands
Waterloo Bedding Co. Canada
Stryker Corporation directly or indirectly owns 100% of the outstanding voting securities of each of the above-named subsidiaries.
EXHIBIT 23(i)
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-3 No. 333-186953) of Stryker Corporation, and
(2) Registration Statement (Form S-8 Nos. 333-78201, 333-140961, 333-150396 and 333-179142) of Stryker Corporation;
of our reports dated February 11, 2016, with respect to the consolidated financial statements and schedule of Stryker Corporation and subsidiaries and the
effectiveness of internal control over financial reporting of Stryker Corporation and subsidiaries included in this Annual Report (Form 10-K) for the year ended
December 31, 2015.
/s/ ERNST & YOUNG LLP
Grand Rapids, Michigan

February 11, 2016
EXHIBIT 31(i)
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Kevin A. Lobo, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2015 of Stryker Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.
/s/ KEVIN A. LOBO

Kevin A. Lobo
Chairman and Chief Executive Officer
EXHIBIT 31(ii)
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, William R. Jellison, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2015 of Stryker Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.

William R. Jellison
Vice President, Chief Financial Officer
Exhibit 32(i)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Stryker Corporation (the “Company”) for the year ended December 31, 2015 (the “Report”), I,
Kevin A. Lobo, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
/s/ KEVIN A. LOBO

Kevin A. Lobo
Chairman and Chief Executive Officer
February 11, 2016
Exhibit 32(ii)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Stryker Corporation (the “Company”) for the year ended December 31, 2015 (the “Report”), I,
William R. Jellison, Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.

William R. Jellison
Vice President, Chief Financial Officer
February 11, 2016

FORM 10-K: United States Securities and Exchange Commission

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FORM 10-K: United States Securities and Exchange Commission

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

For the fiscal year ended December 31, 2015

Title of each class Name of each exchange on which registered

Large accelerated filer ý

Smaller reporting company o

1 Dollar amounts in millions except per share amounts or as otherwise specified.

In 2014 we acquired Berchtold Holding, AG (Berchtold). Berchtold sells Seasonality

2 Dollar amounts in millions except per share amounts or as otherwise specified.

unique regulatory requirements of each of the countries in Europe and other

3 Dollar amounts in millions except per share amounts or as otherwise specified.

4 Dollar amounts in millions except per share amounts or as otherwise specified.

5 Dollar amounts in millions except per share amounts or as otherwise specified.

from suppliers, converting materials to finished products, shipping products to

None. Stetten, Germany O 33,000 Owned

Rennes, France O 31,000 Leased

West Valley, Utah O, NS 29,000 Leased

O = Orthopaedics M = MedSurg NS = Neurotechnology and Spine

Our corporate headquarters is located in Kalamazoo, Michigan, in a 75,000

ITEM 3. LEGAL PROCEEDINGS.

ITEM 4. MINE SAFETY DISCLOSURES.

6 Dollar amounts in millions except per share amounts or as otherwise specified.

2015 Quarter Mar 31 Jun 30 Sep 30 Dec 31

2014 Quarter Mar 31 Jun 30 Sep 30 Dec 31

Our Board of Directors considers payment of cash dividends at each of its

Total 2.7 $ 95.60 2.7

7 Dollar amounts in millions except per share amounts or as otherwise specified.

ITEM 6. SELECTED FINANCIAL DATA.

CONSOLIDATED OPERATIONS 2015 2014 2013 2012 2011

PER SHARE DATA

CONSOLIDATED FINANCIAL POSITION

8 Dollar amounts in millions except per share amounts or as otherwise specified.

9 Dollar amounts in millions except per share amounts or as otherwise specified.

Geographic and Segment Net Sales Percentage Change

Percentage Change Percentage Change

and medical products partially offset by lower shipments of sustainability Selling, General and Administrative Adjustments

Tax matters 78 0.8 391 4.0 (46) (0.5)

ADJUSTED $ 1,949 19.6 % $ 1,810 18.7% $ 1,714 19.0 %

11 Dollar amounts in millions except per share amounts or as otherwise specified.

examples of the types of adjustments that may be included in a period:

Selling, General &

Acquisition and integration-related charges

ADJUSTED $ 6,616 $ 3,510 $ — $ 2,481 $ 1,949 17.3 % $ 5.12

12 Dollar amounts in millions except per share amounts or as otherwise specified.

Selling, General &

Acquisition and integration-related charges

ADJUSTED $ 6,384 $ 3,356 $ — $ 2,414 $ 1,810 22.3 % $ 4.73

Selling General and

Acquisition and integration related charges

ADJUSTED $ 6,065 $ 3,258 $ — $ 2,271 $ 1,714 22.7 % $ 4.49

FINANCIAL CONDITION AND LIQUIDITY Investing Activities

13 Dollar amounts in millions except per share amounts or as otherwise specified.

14 Dollar amounts in millions except per share amounts or as otherwise specified.

15 Dollar amounts in millions except per share amounts or as otherwise specified.

16 Dollar amounts in millions except per share amounts or as otherwise specified.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON CONSOLIDATED FINANCIAL STATEMENTS

/s/ ERNST & YOUNG LLP

Grand Rapids, Michigan

Stryker Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

2015 2014 2013

Net earnings per share of common stock: