Exhibit 10.4

Covidien plc

2007 Stock and Incentive Plan

TERMS AND CONDITIONS

OF

PERFORMANCE UNIT AWARD

FY    -FY    PERFORMANCE CYCLE

PERFORMANCE UNIT AWARD granted on                     (the “Grant Date”).

1. Grant of Performance Units. Covidien plc (the “Company”) has granted to you
Performance Units, the target amount of which is set forth in the Grant Letter
that issued this Award to you, subject to the provisions of these Terms and
Conditions and the Plan. The Company will hold the Performance Units in a
bookkeeping account on your behalf until such units become payable or are
forfeited or cancelled.

2. Amount and Form of Payment. Each Performance Unit represents one (1) Ordinary
Share and any Performance Units that vest pursuant to Section 4 will be redeemed
solely for Shares, subject to Section 10.

3. Dividends. Each unvested Performance Unit will be credited with a Dividend
Equivalent Unit (“DEU”) for any cash or stock dividends distributed by the
Company on an Ordinary Share. DEUs will be calculated at the same dividend rate
paid to other holders of Ordinary Shares and will be adjusted and vest in
accordance with the adjustment and vesting provisions applicable to the
underlying Performance Units.

4. Vesting.

(i) Except as provided below, Performance Units subject to this Award will fully
vest on the Committee Certification Date (as defined in Appendix A), provided
that you are an Employee on the Committee Certification Date. The target number
of Performance Units specified in the Grant Letter shall be adjusted at the end
of the performance cycle based on the attained level of achievement for the
FY    -FY    performance cycle (as described in Appendix A).

(ii) If your employment terminates before full (100%) vesting, you will forfeit
the unvested portion of Performance Units. However, if your employment
terminates due to Normal Retirement (your employment terminates on or after the
date you attain age 60 and the sum of your age and years of service equals at
least 70), Retirement (your employment terminates on or after the date you
attain age 55 and the sum of your age and years of service equals at least 60),
death, Disability, a Change in Control or Divestiture or Outsourcing Agreement,
Performance Units subject to this Award may become vested in accordance with the
provisions of Section 5, 6 or 7, as applicable.

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5. Retirement, Normal Retirement, Disability or Death. Notwithstanding the
vesting provisions described in Section 4, Performance Units subject to this
Award may become vested if your Termination of Employment is a result of your
Retirement, Normal Retirement, Disability or death as follows:

(i) Retirement. If your employment terminates as a result of your Retirement (as
defined in Section 4) and your Retirement occurs less than 12 months after the
Grant Date, you will forfeit all Performance Units subject to this Award. If,
however, your Retirement occurs at least 12 months after the Grant Date and, had
you continued in employment through the Committee Certification Date you would
have become fully vested in Performance Units subject to this Award, then you
will be entitled to pro rata vesting of Performance Units subject to this Award
that would have become fully vested based on (A) the number of whole months
completed from Grant Date through your Termination of Employment date divided by
36 times (B) the total number of Performance Units subject to this Award that
would have become fully vested after adjustment for the attained level of
achievement. If you are entitled to pro rata vesting of any Performance Units
pursuant to this Section 5(i), such vesting shall occur at the same time and in
the same manner as the vesting of active employees in performance units
attributable to the FY    -FY    performance cycle (i.e., upon the Committee
Certification Date) and shall, in no event, become vested or delivered prior to
such time.

(ii) Normal Retirement, Disability or Death. If your employment terminates as a
result of your Normal Retirement (as defined in Section 4), your death or a
Disability, and had you continued in employment through the Committee
Certification Date you would have become fully vested in Performance Units
subject to this Award, then you will become fully vested in the total number of
Performance Units subject to this Award that would have become fully vested
after adjustment for the attained level of achievement. If you are entitled to
full vesting of any Performance Units pursuant to this Section 5(ii), such
vesting shall occur at the same time and in the same manner as the vesting of
active employees in performance units attributable to the
FY    -FY    performance cycle (i.e., upon the Committee Certification Date) and
shall, in no event, become vested or delivered prior to such time.

6. Termination of Employment Following a Change in Control. Notwithstanding the
vesting provisions described in Section 4, these Performance Units may become
vested in the manner described in Section 6(iii) below if you experience a
Termination of Employment after a Change in Control and you satisfy either
Section 6(i) or Section 6(ii).

(i) Within 12 months after a Change in Control, the Company or any Subsidiary
terminates your employment for any reason other than Cause, Disability or death;
or

(ii) Within 12 months after a Change in Control and within 60 days after one of
the events listed in this Section 6(ii), you terminate your employment because
(A) the Company or any Subsidiary (1) assigns or causes to be assigned to you
duties inconsistent in any material respect with your position as in effect
immediately prior to the Change in Control; (2) makes or causes to be made any
material adverse change in

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your position (including titles and reporting relationships and level),
authority, duties or responsibilities; or (3) takes or causes to be taken any
other action which, in your reasonable judgment, would cause you to violate your
ethical or professional obligations (after written notice of such judgment has
been provided by you to the Company and the Company has been given a 15-day
period within which to cure such action), or which results in a significant
diminution in your position, authority, duties or responsibilities; or (B) the
Company or any Subsidiary, without your consent, (1) requires you to relocate to
a principal place of employment more than 50 miles from your existing place of
employment; or (2) reduces your base salary, annual bonus, or retirement,
welfare, share incentive, perquisite (if any) and other benefits when taken as a
whole.

(iii) If your employment terminates after a Change in Control in a manner that
satisfies either Section 6(i) or Section 6(ii) above and, had you continued in
employment through the Committee Certification Date you would have become fully
vested in Performance Units subject to this Award, then you will become fully
vested in the total number of Performance Units that would have become fully
vested after adjustment for the attained level of achievement. If you are
entitled to full vesting of any Performance Units pursuant to this
Section 6(iii), such vesting shall occur at the same time and in the same manner
as the vesting of active employees in performance units attributable to the
FY    -FY    performance cycle (i.e., upon the Committee Certification Date) and
shall, in no event, become vested or delivered prior to such time.

7. Termination of Employment Resulting From Divestiture or Outsourcing
Agreement. Notwithstanding the vesting provisions described in Section 4, and
subject to the provisions of subsection (i) below, if your employment terminates
as a result of a Divestiture or Outsourcing Agreement and, had you continued in
employment through the Committee Certification Date you would have become fully
vested in Performance Units subject to this Award, then you shall be entitled to
pro rata vesting in Performance Units subject to this Award that would have
become fully vested based on (A) the number of whole months completed from Grant
Date through your Termination of Employment date divided by 36 times (B) the
total number of Performance Units subject to this Award that would have become
vested after adjustment for the attained level of achievement. If you are
entitled to pro rata vesting of any Performance Units pursuant to this
Section 7, such vesting shall occur at the same time and in the same manner as
the vesting of active employees in performance units attributable to the
FY    -FY    performance cycle (i.e., upon the Committee Certification Date and
shall, in no event, become vested or delivered prior to such time.

(i) Notwithstanding the foregoing provisions of this Section 7, you shall not be
eligible for pro-rata vesting if (A) your Termination of Employment occurs on or
prior to the closing date of a Divestiture or such later date as is provided
specifically in the applicable transaction agreement or related agreements, or
on the effective date of an Outsourcing Agreement (the “Applicable Employment
Date”), and (B) you are offered Comparable Employment with the buyer, successor
company or Outsourcing Agent, as applicable, but do not commence such employment
on the Applicable Employment Date.

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(ii) For purposes of this Section 7 and these Terms and Conditions,
(A) “Comparable Employment” means employment at a location that is no more than
50 miles from your job location at the time of your Termination of Employment
that has a base salary and target bonus opportunity that is at least equal to
your base salary and target bonus opportunity in effect immediately prior to
your Termination of Employment; (B) “Disposition of Assets” means the
disposition by the Company or a Subsidiary of all or a portion of the assets
used by the Company or Subsidiary in a trade or business to an unrelated
individual or entity; (C) “Disposition of a Subsidiary” means the disposition by
the Company or Subsidiary of its interest in a subsidiary or controlled entity
to an unrelated individual or entity, provided that such subsidiary or
controlled entity ceases to be a member of the Company’s controlled group as a
result of such disposition; (D) “Divestiture” means a Disposition of Assets or a
Disposition of a Subsidiary; and (E) “Outsourcing Agreement” means a written
agreement between the Company or Subsidiary and an unrelated third party
(“Outsourcing Agent”) pursuant to which (1) the Company or Subsidiary transfers
the performance of services previously performed by Company or Subsidiary
employees to the Outsourcing Agent, and (2) the Outsourcing Agreement includes
an obligation of the Outsourcing Agent to offer employment to any employee whose
employment is being terminated as a result of or in connection with said
Outsourcing Agreement.

8. Withholdings. The Company has the right, prior to the issuance or delivery of
any Shares subject to this Award, to withhold or require from you the amount
necessary to satisfy applicable tax requirements (e.g., income tax, social
insurance, payroll tax and payment on account), as determined by the Company.
If, at any time after the Grant Date, you become subject to tax in more than one
jurisdiction, the Company may be required to withhold or account for applicable
tax requirements in the various jurisdictions. By accepting this Award, you
authorize the Company or any Subsidiary to satisfy applicable tax or tax
withholding requirements by (i) withholding from your wages or other cash
compensation payable to you or (ii) withholding from any proceeds resulting from
the sale of Shares underlying this Award either through a voluntary sale or
through a mandatory sale arranged by the Company on your behalf and pursuant to
this authorization. Furthermore, if the Shares subject to this Award vest under
circumstances where they have not otherwise been fully paid-up in accordance
with the requirements of Irish law, the Company or any Subsidiary may require
you to pay the par value of each Share which vests hereunder at the time of such
vesting. The Company or any Subsidiary may take the payment from you by
application of any of the methods of withholding set forth herein. If the
Company or any Subsidiary cannot withhold or account for all taxes associated
with this Award, or obtain payment of the par value of each Share that vests
hereunder, by application of the means described herein, then, by accepting this
Award, you agree that you will pay to the Company or any Subsidiary all amounts
necessary to satisfy applicable tax requirements or the requirement that Shares
be issued on a fully paid-up basis and acknowledge that the Company may refuse
to issue or deliver Shares subject to this Award, or the proceeds from the sale
of such Shares, if you do not comply with such obligations.

9. Transfer of Award. You may not transfer this Award or any interest in
Performance Units except by will or the laws of descent and distribution. Any
other attempt to transfer this Award or any interest in Performance Units is
null and void.

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10. Forfeiture of Award. You will forfeit all or a portion of the Performance
Units subject to this Award if your employment terminates under the
circumstances described below:

(i) If the Company or Subsidiary terminates your employment for Cause, including
without limitation a termination as a result of your violation of the Company’s
Guide to Business Conduct, then the Company will immediately rescind all
unvested Performance Units subject to this Award and you will forfeit all rights
you have with respect to this Award. Also, by accepting this Award, you agree
and promise to deliver to the Company immediately upon your Termination of
Employment for Cause, Shares (or, in the discretion of the Company, cash) equal
in value to the amount of all Performance Units subject to this Award that
vested during the 12-month period that occurs immediately before your
Termination of Employment for Cause.

(ii) If, after your Termination of Employment, the Committee determines in its
sole discretion that while you were a Company or Subsidiary employee you engaged
in activity that would have constituted grounds for the Company or Subsidiary to
terminate your employment for Cause, then the Company will immediately rescind
all unvested Performance Units subject to this Award and you will forfeit all
rights you have with respect to this Award. Also, by accepting this Award, you
agree and promise to deliver to the Company immediately upon the date the
Committee determines that you could have been terminated for Cause, Shares (or,
in the discretion of the Company, cash) equal in value to the amount of all
Performance Units subject to this Award that vested during the period that
begins 12 months immediately before your Termination of Employment and ends on
the date that the Committee determines that you could have been terminated for
Cause.

(iii) If the Committee determines in its sole discretion that at any time after
your Termination of Employment and prior to the second anniversary of your
Termination of Employment you (A) disclosed confidential or proprietary
information related to any business of the Company or any Subsidiary or
(B) entered into an employment or consultation arrangement (including any
arrangement for employment or service as an agent, partner, stockholder,
consultant, officer or director) with any entity or person engaged in a business
and (1) such employment or consultation arrangement would likely (in the
Committee’s sole discretion) result in the disclosure of confidential or
proprietary information related to any business of the Company or any Subsidiary
to a business that is competitive with any Company or Subsidiary business as to
which you had access to strategic or confidential information and (2) the
Committee has not approved the arrangement in writing, then the Company will
immediately rescind all unvested Performance Units subject to this Award and you
will forfeit all rights you have with respect to this Award. Also, by accepting
this Award, you agree and promise to deliver to the Company immediately upon the
Committee’s determination date Shares (or, in the discretion of the Company,
cash) equal in value to the amount of all Performance Units subject to this
Award that vested during the period that begins 12 months immediately before
your Termination of Employment and ends on the date of the Committee’s
determination.

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11. Adjustments. In the event of any stock split, reverse stock split, dividend
or other distribution (whether in the form of cash, Shares, other securities or
other property), extraordinary cash dividend, recapitalization, merger,
consolidation, split-up, spin-off, reorganization, combination, repurchase or
exchange of Shares or other securities, the issuance of warrants or other rights
to purchase Shares or other securities, or other similar corporate transaction
or event, the Committee shall adjust the number and kind of Shares covered by
this Award and other relevant provisions to the extent necessary to prevent
dilution or enlargement of the benefits or potential benefits intended to be
provided by this Award. Any such determinations and adjustments made by the
Committee will be binding on all persons.

12. Restrictions on Payment of Shares. Payment of Shares for Performance Units
is subject to the conditions that, to the extent required at the time of
delivery of such Shares:

(i) The Shares covered by this Award will be duly listed, upon official notice
of issuance, on the NYSE; and

(ii) A Registration Statement under the United States Securities Act of 1933
with respect to the Shares will be effective or an exemption from registration
will apply.

The Company will not be required to deliver any Shares until all applicable
federal and state laws and regulations have been complied with and all legal
matters in connection with the issuance and delivery of the Shares have been
approved by the Company’s legal counsel.

13. Disposition of Securities. By accepting this Award, you acknowledge that you
have read and understand the Company’s Insider Trading Policy and are aware of
and understand your obligations under United States federal securities laws with
respect to trading in the Company’s securities. The Company has the right to
recover, or receive reimbursement for, any compensation or profit realized on
the disposition of Shares received for Performance Units to the extent that the
Company has a right of recovery or reimbursement under applicable securities
laws.

14. Plan Terms Govern. The vesting of Performance Units, the disposition of any
Shares received on or after such vesting, and the treatment of any gains
received upon such disposition are subject to the terms of the Plan and any
rules that the Committee prescribes. The Plan document, as amended from time to
time, is incorporated into these Terms and Conditions. Unless defined herein,
capitalized terms used in these Terms and Conditions are defined in the Plan. If
there is any conflict between the terms of the Plan and these Terms and
Conditions, the Plan’s terms govern. By accepting this Award, you acknowledge
receipt of the Plan and the prospectus, as in effect on the Grant Date.

15. Personal Data. To comply with applicable law and to administer this Award
appropriately, the Company and its agents may accumulate, hold and process your
personal data and/or “sensitive personal data” within the meaning of applicable
law. Such data includes, but is not limited to, the information provided to you
as part of the grant package and any changes thereto (e.g., details of
Performance Units, including amounts awarded, unvested or vested), other
appropriate personal and financial data about you (e.g., name, home address,
telephone number, date of birth, nationality, job title and social security,
social insurance or other

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identification number), and information about your participation in the Plan and
Shares obtained under the Plan from time to time. By accepting this Award, you
give your explicit consent to the Company’s accumulating and processing personal
data and/or sensitive personal data as necessary or appropriate for Plan
administration. Your personal data will be retained only as long as is necessary
to administer your participation in the Plan. If applicable, by accepting this
Award, you also give your explicit consent to the Company’s transfer of personal
data and/or sensitive personal data outside the country in which you work or
reside and to the United States of America. The legal persons for whom your
personal data are intended include the Company, its Subsidiaries (or former
Subsidiaries as are deemed necessary), the outside Plan administrator, and any
other person that the Company retains or utilizes for compensation planning or
Plan administration purposes. You have the right to request a list of the names
and addresses of any potential recipients of your personal data and to review
and correct your personal data by contacting your local Human Resources
Representative. By accepting this Award, you acknowledge your understanding that
the transfer of the information outlined here is important to Plan
administration and that failure to consent to the transmission of such
information may limit or prohibit your participation in the Plan.

16. No Contract of Employment or Promise of Future Grants. By accepting this
Award, you agree that you are bound by the terms of the Plan and these Terms and
Conditions and acknowledge that this Award is granted in the Company’s sole
discretion and is not considered part of any employment contract or your
ordinary or expected salary or other compensation for services of any kind
rendered to the Company or any Subsidiary. You further agree that this Award,
and your Plan participation, do not form, and will not be interpreted as
forming, an employment contract or guarantee of employment with the Company or
any Subsidiary. The Company, in its sole discretion, voluntarily established the
Plan and may amend or terminate it at any time pursuant to the terms of the
Plan. You understand that the grant of performance units under the Plan is
voluntary and occasional and does not create any contractual or other right to
receive future grants of any performance units, or benefits in lieu of
performance units, even if performance units have been granted repeatedly in the
past and that all decisions with respect to future grants will be in the
Company’s sole discretion. By accepting this Award, you also acknowledge that
this Award and any gains received hereunder are extraordinary items and are not
considered part of your salary or compensation for purposes of any pension or
retirement benefits or for purposes of calculating any termination, severance,
redundancy, resignation, end of service payments, bonuses, long-service awards,
life or accident insurance benefits or similar payments. Neither this Award, nor
any gains received hereunder, is intended to replace any pension rights or
compensation. If the Company or Subsidiary terminates your employment for any
reason, you agree that you will not be entitled to damages for breach of
contract, dismissal or compensation for loss of office or otherwise to any sum,
Shares, Performance Units or other benefits to compensate you for the loss or
diminution in value of any actual or prospective rights, benefits or expectation
under or in relation to the Plan.

17. Limitations. Nothing in these Terms and Conditions or the Plan grants to you
any right to continued employment with the Company or any Subsidiary or to
interfere in any way with the Company or Subsidiary’s right to terminate your
employment at any time and for any reason. Payment of Shares is not secured by a
trust, insurance contract or other funding medium, and you do not have any
interest in any fund or specific Company or Subsidiary asset by reason of this
Award. You have no rights as a stockholder of the Company pursuant to this Award
until Shares are actually delivered to you.

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18. Entire Agreement and Amendment. These Terms and Conditions and the Plan
constitute the entire understanding between you and the Company regarding this
Award. These Terms and Conditions supersede any prior agreements, commitments or
negotiations concerning this Award. These Terms and Conditions may not be
modified, altered or changed except by the Committee (or its delegate) in
writing and pursuant to the terms of the Plan.

19. Severability. The invalidity or unenforceability of any provision of these
Terms and Conditions will not affect the validity or enforceability of the other
provisions of these Terms and Conditions, which will remain in full force and
effect. Moreover, if any provision is found to be excessively broad in duration,
scope or covered activity, the provision will be construed so as to be
enforceable to the maximum extent compatible with applicable law.

20. Language. If you have received a translation of these Terms and Conditions
or any other document related to the Plan in a language other than English, then
the English version of such document shall govern.

21. Electronic Delivery. By accepting this Award, you agree to receive documents
relating to your participation in the Plan by electronic means, including
through the online system maintained by any outside Plan administrator.

22. Appendices. The Appendices are an integral part of these Terms and
Conditions and any reference herein to these Terms and Conditions includes the
Appendices in such reference. If, on the Grant Date, you reside in a country
listed in Appendix B, then the provisions of Appendix B with respect to such
country shall govern with respect to the matters described therein. If, after
the Grant Date, you relocate to another country and any or all of your countries
of residence are listed in Appendix B, then the Company may determine that some
or all of the provisions of Appendix B with respect to such countries govern if
necessary to comply with applicable law or to facilitate Plan administration.

23. Governing Law. This Award and these Terms and Conditions are governed by the
law of Ireland and construed accordingly.

24. Acceptance. By accepting this Award, you agree to the following:

(i) You have carefully read, fully understand and agree to all of the terms and
conditions contained in the Plan and these Terms and Conditions; and

(ii) You understand and agree that the Plan and these Terms and Conditions
constitute the entire understanding between you and the Company regarding this
Award, and that any prior agreements, commitments or negotiations concerning
this Award are replaced and superseded.

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You will be deemed to consent to the application of all of the terms and
conditions set forth in the Plan and these Terms and Conditions unless you
contact Covidien, c/o Equity Plan Administration, 15 Hampshire Street,
Mansfield, MA 02048 USA in writing within thirty (30) days of receiving the
grant package. Receipt by the Company of your non-consent will nullify this
Award unless otherwise agreed to in writing by you and the Company.

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APPENDIX A

TO

TERMS AND CONDITIONS

OF

PERFORMANCE UNIT AWARD

Performance Unit Award Vesting Requirements

FY    -FY    Performance Cycle

Performance Goals

This Appendix A describes the vesting requirements for performance units
(“PSUs”) awarded under these “Terms and Conditions of Performance Unit Award”
for the FY    -FY    performance cycle (September             through September
            ). The number of PSUs subject to these Terms and Conditions that
vest is based upon the Company’s Total Shareholder Return as compared to the
Total Shareholder Return of the Healthcare Industry Index during the
FY    -FY    performance cycle, as described further below. Upon the expiration
of the performance cycle, the Committee shall calculate the level of achievement
attained for the FY    -FY    performance cycle (in the manner described below)
and certify the extent to which the performance goals have been achieved. You
shall become vested in the number of PSUs that corresponds to the attained level
of achievement certified by the Committee on the date that the Committee
formally certifies such attained level of achievement (the “Committee
Certification Date”). The Committee Certification Date shall occur no later than
sixty (60) days after the conclusion of the FY    -FY    performance cycle.
Except as otherwise provided in these Terms and Conditions, if your employment
terminates for any reason before the Committee Certification Date, you will
automatically forfeit all Performance Units and they will be cancelled as of
your Termination of Employment date.

Healthcare Industry Index

The Healthcare Industry Index includes the following companies: Baxter
International Inc., Becton Dickinson and Company, Boston Scientific Corp.,
Bristol-Myers Squibb Co., CR Bard Inc., Cardinal Health, Inc., CareFusion
Corporation, Hospira Inc., Johnson & Johnson, Medtronic, Inc., Millipore Corp.,
PerkinElmer Inc., Schering-Plough Corp., St. Jude Medical Inc., Stryker Corp.,
Thermo Fisher Scientific, Inc., Waters Corp., and Zimmer Holdings Inc.

If two companies in the Healthcare Industry Index merge, the surviving company
shall remain in the Healthcare Industry Index. If a company in the Healthcare
Industry Index merges with, or is acquired by, a company that is not in the
Healthcare Industry Index, and the company in the Healthcare Industry Index is
the surviving company, then the surviving company shall be included in the
Healthcare Industry Index. If a company in the Healthcare Industry Index merges
with, or is acquired by, a company that is not in the Healthcare Industry Index,
and the company in the Healthcare Industry Index is not the surviving company or
the surviving company is no longer publicly traded, then the surviving company
shall not be included in the Healthcare Industry Index.

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Notwithstanding the foregoing, if a company in the Healthcare Industry Index
ceases to be listed in the Healthcare Sector under the Standard & Poor’s Global
Industry Classification Standard (GICS) at any time during the performance
period (including after a merger, acquisition or other business transaction
described above), then it shall not be included in the Healthcare Industry
Index.

Total Shareholder Return

Total Shareholder Return for the Company and each company in the Healthcare
Industry Index shall include dividends paid and shall be determined as follows:

Total Shareholder Return = (Change in Stock Price + Dividends Paid) / Beginning
Stock Price

“Beginning Stock Price” means the average closing price as reported on the New
York Stock Exchange of one (1) share of common stock for the first sixty
(60) trading days of the Performance Cycle.

“Change in Stock Price” means the difference between the Beginning Stock Price
and the Ending Stock Price.

“Dividends Paid” means the total of all dividends paid on one (1) share of stock
during the Performance Cycle.

“Ending Stock Price” means the average closing price as reported in the New York
Stock Exchange of one (1) share of common stock for the last sixty (60) trading
days of the Performance Cycle.

“Performance Cycle” means the three-year period commencing September
            and ending on September             .

Example: If the Beginning Stock Price for a company was $50.00 per share, the
company paid $5.00 in dividends over the Performance Cycle and the Ending Stock
Price was $55.00 per share (thereby making the Change in Stock Price $5.00
($55.00 minus $50.00)), then the Total Shareholder Return for that company would
be twenty percent (20%). The calculation is as follows: .2 = ($5 + $5) / $50

Calculation of Percentile Performance

Following the Total Shareholder Return determination for the Company and each of
the companies in the Healthcare Industry Index, the Company and the companies in
the Healthcare Industry Index will be ranked, in order of maximum to minimum,
according to their respective Total Shareholder Return.

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After this ranking, the percentile performance of the Company as compared to the
other companies in the Healthcare Industry Index shall be determined by the
following formula:

 

P = 1 –

 

R - 1

          N - 1        

“P” represents the percentile performance which will be rounded, if necessary,
to the nearest whole percentile by application of regular rounding.

“N” represents the number of companies in the Healthcare Industry Index,
including the Company.

“R” represents the Company’s ranking versus the other companies in the
Healthcare Industry Index.

Example: If the Company ranked 7th out of 19 companies, the performance will be
in the 67th percentile.

 

The calculation is as follows:   .67 = 1 -  

7 – 1

            19 – 1        

Calculation of Grant Multiplier

Following the percentile performance determination for the Company, the
following multipliers will be utilized to determine the percentage of
Performance Units that shall become vested, if any.

 

Percentile Performance

  

Grant Multiplier

75th and higher    2x At least 50th but less than 75th    See below* At least
25th but less than 50th    See below** Less than 25th    Zero (all PSUs are
forfeited)

*If percentile performance equals or exceeds the 50th percentile, but is less
than the 75th percentile, then the Grant Multiplier is determined by the
following formula: GM = (4 x PF) – 1.

**If percentile performance equals or exceeds the 25th percentile, but is less
than the 50th percentile, then the Grant Multiplier is determined by the
following formula: GM = 2 x PF.

“GM” represents the Grant Multiplier.

“PF” represents the Company’s percentile performance expressed as a fraction.

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Example: If an employee was issued 100 PSUs and the Company achieved a
percentile performance in the 80th percentile for the applicable performance
cycle, then the employee would vest in 200 PSUs at the end of such cycle (2 x
100). If, instead, the Company achieved a percentile performance in the 60th
percentile, then the grant multiplier would be 1.4 ((4 x .60) -1) and the
employee would vest in 140 PSUs (1.4 x 100) at the end of the performance cycle.

Example: If an employee was issued 150 PSUs and the Company achieved a
percentile performance in the 40th percentile for the applicable performance
cycle, then the grant multiplier would be .80 (2 * .40) and the employee would
vest in 120 PSUs (.80 x 150) at the end of such cycle. If, instead, the Company
achieved a percentile performance in the 20th percentile, then all PSUs would be
forfeited.

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APPENDIX B

TO

TERMS AND CONDITIONS

OF

PERFORMANCE UNIT AWARD

Additional Terms and Conditions for Specified Countries

This Appendix includes additional terms and conditions that apply if you reside
in one of the countries specified below. Note that the specific application of
relevant laws in your country may differ depending upon the specific facts of
your situation. We advise you to seek appropriate professional advice to
determine how these laws may impact your particular situation. If you are a
citizen or resident of a country other than the one in which you are currently
working or have worked in since this Award was granted to you, the information
contained herein may not apply to you. If a country is not listed below, then
there are no additional terms and conditions which apply to such country.

[The provisions of this Appendix that relate to countries other than the

United States of America have been intentionally omitted.]

UNITED STATES OF AMERICA

Notwithstanding any other provision of these Terms and Conditions to the
contrary, in the event that all or a portion of this Award becomes subject to
Code Section 409A, the provisions contained in Section 7.12 of the Plan shall
govern and shall supersede any applicable provision of these Terms and
Conditions.