Forms of distribution of benefits

If your vested account balance (other than your rollover account) exceeds $5,000, you may elect whichever of the following forms of payment you prefer:

A lump sum payment. This payment will be made in cash, unless you elect to receive shares of stock for your vested 2% subaccount invested in the Stryker Stock Fund, provided that such vested portion is at least $1,000 in value (see "Election to receive distribution of Stryker stock" ).

Cash payments in roughly equal annual, quarterly, or monthly installments for a specific number of years. The specific number of years for which the payments will last cannot exceed either your life expectancy or the joint life expectancy of you and your beneficiary.

A combination of a single sum cash payment and cash payments in roughly equal annual, quarterly or monthly installments.

A partial distribution (of at least $500) from your vested account. (Limited to one per calendar quarter.)

Automatic forms of distribution for participants with Pre-1988 benefits

The Plan provides automatic forms of distribution for certain participants with "Pre-1988 Benefits" as described below. A "Pre-1988 Benefit" means the amount of your account balance attributable to the value of your account on December 31, 1987, as determined under the terms of the Plan in effect on December 31, 1987.

If you have a Pre-1988 Benefit, the plan provides for the following "automatic" forms of distribution of your vested account balance unless you elect an alternative form of payment:

Married participants. If you are married when your benefits begin, your vested benefits will be used to purchase a "joint and survivor annuity" that pays a monthly benefit to you for your life, and after your death, a 50% monthly benefit to your surviving spouse for his or her life (for example, monthly payments of $1,500 during your lifetime, and, if your spouse survives you, monthly payments of $750 for the rest of your surviving spouse's life). Please note that under a joint and survivor annuity:

If your spouse dies before you, your monthly payments will continue at their previous level ($1,500 in the above example).

If your spouse survives you, your spouse does not have the option of converting the survivor benefit ($750 per month in the above example) to any other form of payment such as a lump sum.

Unmarried participants. If you are unmarried when benefits begin, the vested amount in your accounts will be used to purchase a "single life annuity," that is, an annuity that pays a monthly benefit to you for your life. No benefits are paid after your death.

The Plan will purchase your single life annuity or joint and survivor annuity from an insurance company using the vested Pre-1988 Benefit amount in your accounts. The amount of the monthly benefit paid under the annuity will depend on market conditions for annuity contracts at the time payments under the annuity begin. The monthly benefit will also depend on your age and (in the case of a joint and survivor annuity) your spouse's age.

Waiving the automatic form

If you have a Pre-1988 Benefit, you may waive the "automatic" form of distribution and elect one of the alternative forms of benefit payment described below in "Alternative Forms of Distribution." This waiver cannot be made more than 90 days before your benefits begin, and, if you are married, your election of an alternative form is effective only if your spouse consents in writing to the waiver of the joint and survivor annuity within that 90-day period. Your spouse's consent must be witnessed by a Plan representative or by a notary public.

Alternative forms of distribution

If you (and your spouse, if you are married) waive the automatic form of payment, you may elect the alternative form of payment you prefer. The alternative forms of payment are as follows:

A combination of a single sum cash payment and cash payments in roughly equal annual, quarterly or monthly installments.

A partial distribution (of at least $500) from your vested account. (Limited to one per calendar quarter.)

If you are married, a single life annuity immediately payable over your life.

If you elect installments, you may at any time elect to shorten the period over which the installments are being paid or receive a lump-sum distribution of your remaining balance.