Equity-Based Compensation Awards Granting Policy

Background

The Compensation Committee of the Board of Directors (the “Committee”) of Stryker Corporation ("Stryker") believes that equity-based compensation is an important component of Stryker’s overall compensation programs. It has been the Committee’s practice to approve annual equity-based compensation awards to Stryker employees and non-employee directors. In accordance with the Committee’s charter, any equity award granted to the Chief Executive Officer of Stryker is subject to approval by the independent directors. Non-employee director awards are granted by the Board. In addition to the annual grants, the Committee has delegated to the Chief Executive Officer (provided that the Chief Executive Officer is a director) the authority (subject to certain limitations) to make other grants (referred to herein as “off-cycle grants”) in situations where Stryker is seeking to attract a senior level hire or recognize employees for certain achievements or in other special circumstances.

General Statement of Policy

It is the policy of this Committee that neither the Committee nor any member of Stryker management shall backdate any equity grant or manipulate an equity award exercise price. In furtherance of this policy, the Committee has adopted the specific practices described below. All grants shall be made in accordance with applicable laws, rules and regulations, the Committee charter and the applicable equity plan documents.

Annual and Off-Cycle Grants

The Committee believes that establishing fixed grant dates in advance, to the extent possible, is an important measure to ensure the integrity of the award granting process. Accordingly, each annual grant and off-cycle grant of equity-based compensation shall be awarded on a pre-determined date, as follows:

Annual Grant - The annual grant of equity-based compensation awards to employees shall be made by the Committee (subject, with respect to any grant to the Chief Executive Officer, to approval by the independent directors), and to non-employee directors shall be made by the Board, in each case on the date of the February meeting of the Board of Directors, and such date shall serve as the grant date of such awards. The date of the February Board meeting is established by the Board at its regular July meeting of the prior year. Any change in the annual grant date must be made with prior approval by the Board.

Off-Cycle Grants - The Committee has delegated its authority to make off-cycle grant awards to employees (with the exception of grants to officers subject to the provisions of Section 16 of the Securities Exchange Act of 1934 or intended to be qualified under Section 162(m) of the Internal Revenue Code), to the Chief Executive Officer, subject to an annual limit per employee of 10,000 option shares or 5,000 restricted shares, and an annual aggregate award limit of 300,000 option shares or 150,000 restricted shares. The Committee may modify the individual and annual aggregate award limits. Off-cycle grants shall be approved in writing by the Chief Executive Officer and shall be deemed to be granted on the first business day of May, August or November in any year, whichever next follows the date the grant is approved by the Chief Executive Officer. Off-cycle grants approved by the Chief Executive Officer shall be reported to the Committee and the Board of Directors at their next regular meeting.

Other Awards - With respect to awards other than the annual grant or off-cycle grants, the date the Committee acts to approve an award, or such later specified date as the Committee shall designate in the approval, shall be used as the grant date of the award for purposes of Stryker’s equity compensation plans.

Establishing Fair Market Value

The fair market value of Stryker Stock shall mean the closing sales price as reported on the New York Stock Exchange-Composite Transactions for the last market trading day prior to the grant date.

Timing of Public Announcements

Stryker shall not purposely accelerate or delay the public release of material information in consideration of a pending equity grant in order to allow the grantee to benefit from a more favorable stock price. The Committee notes, however, that a release of information by Stryker in close proximity to an equity grant could create the appearance of an effort to time the announcement to a grantee’s benefit, even if no such benefit was intended. Accordingly, Stryker’s Secretary shall be responsible to advise the Committee whenever material non-public information is planned to be released to the public in close proximity to the grant of an equity- based compensation award.

Award Terms and Provisions

The Committee (or Board in the case of non-employee director grants) shall establish the term, vesting, award type, restrictions and other provisions of equity awards within the terms of the equity plan documents.

Grant Communication to Recipients

As soon as administratively possible following the Committee’s approval of any equity award, a grant packet documenting material terms and information related to the award will be communicated to the recipient.

Publication

This Policy shall be posted on the “Corporate Governance” page of the "For Investors" section of Stryker’s website.

Approved by the Board of Directors February 14, 2007