Issue link: http://catalog.e-digitaleditions.com/i/801297
47 Name and Principal Position Target Bonus ($) Kevin A. Lobo 1,636,600 Chairman, President and Chief Executive Officer Glenn S. Boehnlein 456,000 Vice President, Chief Financial Officer Timothy J. Scannell 539,750 Group President, MedSurg and Neurotechnology David K. Floyd 527,000 Group President, Orthopaedics Lonny J. Carpenter 442,000 Group President, Global Quality and Business Operations Executive Officers as a Group (1) 5,265,568 ______________ (1) Represents the aggregate of the target bonuses for the 12 current executive officers as a group, including the NEOs and is converted to U.S. dollars for any executive officers who have their target bonuses denominated in a currency other than U.S. dollars. For Mr. Lobo, Mr. Boehnlein and Mr. Carpenter, the primary focus of the criteria that will be used to determine the actual 2017 bonus amounts is total Stryker performance with respect to constant currency sales and adjusted operating income and for Mr. Scannell and Mr. Floyd, the main focus is on performance of the groups for which they are responsible with respect to constant currency sales and adjusted operating income, with consolidated adjusted operating income and specified qualitative measures being additional factors in each case. Participants will have the opportunity (subject to the Executive Bonus Plan limitations) to earn an additional bonus up to 100% of the target bonus in 2017 if goals for constant currency sales, adjusted operating income and adjusted diluted net earnings per share are exceeded. In addition, as has been the case in the past, the final determination of the actual bonuses may include a subjective evaluation of each individual's performance during the year taking into account other criteria determined by the Compensation Committee to be relevant to a determination of the participant's overall contribution to the Company during the year. The Board and Compensation Committee may make adjustments to final bonus determinations within the framework of the maximum bonuses that can be awarded under the Executive Bonus Plan. Bonus awards under the Executive Bonus Plan may be paid in cash, unrestricted or restricted Common Stock issued under the 2011 Plan or any subsequent shareholder-approved plan or a combination of cash and shares. The Compensation Committee may also provide for deferral of a bonus payment under any nonqualified deferred compensation program. See "Compensation Discussion and Analysis — Recoupment Policy" on page 22 for a discussion of our recoupment policy that applies to all cash and equity incentive payments made to our elected corporate officers during and after 2015 in the event of a material restatement of our financial statements as a result of misconduct or material violations of laws, regulations or Company policies. Plan Administration The Executive Bonus Plan is administered by the Compensation Committee, which has full authority to interpret the Executive Bonus Plan, to establish rules and regulations relating to the operation of the Executive Bonus Plan, to select participants, to determine the amount of an award (subject to the Executive Bonus Plan limitations) and to make all determinations and take all other actions necessary or appropriate for the proper administration of the Executive Bonus Plan. The Compensation Committee's interpretation of the Executive Bonus Plan and all actions taken within the scope of its authority are final and binding. No member of the Compensation Committee is eligible to participate in the Executive Bonus Plan. Amendment and Termination The Board may at any time suspend or terminate the Executive Bonus Plan and may amend the Executive Bonus Plan from time to time as it deems advisable, subject to any requirement for shareholder approval under applicable law, including Section 162(m). No amendment that adversely affects a participant's rights to, or interest in, an award granted prior to the date of the amendment will be effective without the participant's consent. United States Federal Income Tax Consequences The following discussion of certain of the U.S. federal income tax consequences of awards under the Executive Bonus Plan is based on current U.S. federal tax laws and regulations and does not purport to be a complete discussion. This description may differ from the actual tax consequences incurred by any individual recipient of an award. Moreover, existing law is subject to change by new legislation, by new regulations, by administrative pronouncements and by court decisions or by new or clarified interpretations or applications of existing laws, regulations, administrative pronouncements and court decisions. Any such change may affect the U.S. federal income tax consequences described below. The following summary of the U.S. federal income tax consequences in respect of the Executive Bonus Plan is for general information only. Interested parties should consult their own tax advisors as to specific tax consequences, including the application and effect of foreign, state and local laws. A participant who receives an award under the Executive Bonus Plan will generally realize compensation taxable as ordinary income in the amount of cash paid (or, if paid in shares, an amount equal to the fair market value of the shares at the time of such payment). Income tax withholding requirements apply to amounts that are recognized as ordinary income by covered employees. To the extent that a participant recognizes ordinary income, the Company will be entitled to a corresponding deduction, provided that, among other things, (i) the income meets the test or reasonableness, is an ordinary and necessary business expense and is not an "excess parachute payment" within the meaning of Section 280G of the Internal Revenue Code and is not disallowed by the $1 million limitation under Section 162(m) of the Internal Revenue Code and (ii) any applicable reporting obligations are satisfied.