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15 2016 Bonus Plans The 2016 annual bonus goals and weightings for each NEO are shown in the tables on pages 16 through 18. The following information is relevant to an understanding of those tables: • Threshold is the performance required before any bonus accrues. Performance below the threshold level results in no bonus payment for that performance measure. Beginning in 2016, the threshold payout related to the core bonus measures of sales and operating income was increased to 50% of the target weighting for each measure, which aligns with typical practice among our comparison companies. Results for all quantitative measures are prorated between threshold and target. Meeting the target goal results in the payment of 100% of bonus opportunity for the particular measure. • The tables express the goals for quantitative performance measures as a percentage change from 2015 actual results to show the degree of improvement required relative to the prior year to achieve bonus plan payment levels. • Bonus plan goals are based on the Company's financial results as reported in conformance with GAAP but may be adjusted at the Committee's discretion to reflect the impact of specified corporate transactions, changes in foreign currency exchange rates, accounting or tax changes and other extraordinary or nonrecurring events so that the operating results of the Company or the applicable business unit are calculated on a comparable basis from year to year. Information with respect to adjustments made to GAAP consolidated operating income in 2016 that resulted in the adjusted consolidated operating income used in the calculation of the NEOs' bonus awards is set forth below (dollar values in millions): Item Year Ended December 31, 2016 Operating income, as reported $2,166 Acquired inventory stepped up to fair value 36 Other acquisition and integration related charges 95 Amortization of purchased intangible assets 319 Restructuring-related charges 125 Rejuvenate and other recall matters 158 Legal matters -12 Net currency adjustments 1 Operating income attributable to acquisitions that occurred during 2016 -174 Other adjustments 22 Adjusted operating income for bonus calculation $2,736 • Information with respect to adjustments made to GAAP diluted net earnings per share in 2016 that resulted in the earnings per share used in the calculation of the NEOs' bonus awards is set forth below: Item Year Ended December 31, 2016 Diluted net earnings per share, as reported $4.35 Acquired inventory stepped up to fair value 0.06 Other acquisition and integration related charges 0.20 Amortization of purchased intangible assets 0.59 Restructuring-related charges 0.26 Rejuvenate and other recall matters 0.34 Legal matters -0.02 Tax matters 0.02 Diluted net earnings per share for bonus calculation $5.80 • For performance measures that are qualitative in nature, the determination of performance requires subjective evaluations rather than quantifiable calculations of achievement to the goal. These subjective performance evaluations for 2016 were made by the Compensation Committee after considering recommendations from Mr. Lobo in the case of each of the other NEOs, other than Mr. Jellison, and by the independent directors in the case of Mr. Lobo, in each case after consideration was given to the individual's performance with respect to the goal. The threshold payment for qualitative measures is zero percent. • Payout for each overachievement metric generally begins when performance exceeds the budgeted value for the respective metric.