EXHIBIT 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

AGREEMENT, dated April 22, 2003, between STRYKER CORPORATION, a Michigan
corporation (the "Company"), as the employer, and Stephen P. MacMillan (the
"Executive"), as the employee.

W I T N E S S E T H:

WHEREAS, the Company desires to employ the Executive as its President and Chief
Operating Officer; and

WHEREAS, the Executive and the Company have reached agreement concerning the
terms and conditions of Executive's employment and wish to formalize that
agreement;

NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions
stated herein, the Company and the Executive agree as follows:

1.  Period of Employment.

     The Company shall employ the Executive pursuant to this Agreement for a
period (the "Term") commencing on June 1, 2003 and continuing until May 31,
2008.  Notwithstanding the foregoing, the employment of the Executive by the
Company pursuant to this Agreement is contingent upon the closing of the
business combination transaction contemplated by the Agreement and Plan of
Merger, dated as of July 13, 2002, among Pfizer, Inc., Pilsner Acquisition Sub
Corp. and Pharmacia Corporation and the termination of the Executive's
employment with Pharmacia Corporation following such closing.  In the event that
the Executive's employment with the Company commences after June 1, 2003, the
parties shall enter into an amendment of this Agreement adjusting various dates
and the bonus potential for the period ending December 31, 2003 to reflect the
later commencement date.
 

2.  Inducement Payment; Restricted Stock Award. 

     In order to induce the Executive to accept employment with the Company, the
Company shall pay the Executive $300,000 within 30 days after the Executive's
employment with the Company commences.  Effective as of the date that the
Executive's employment with the Company commences , the Company shall grant the
Executive a restricted stock award of 50,000 shares of common stock of the
Company ("Award Shares").  The restricted stock award shall vest with respect to
20% of the Award Shares on May 31 of each year during the Term, unless earlier
vested in accordance with the provisions of Section 9(b).
 

3.  Compensation. 

     The Executive shall be paid a base salary at the rate of not less than
$550,000 per year during the Term, payable in equal monthly installments. 
Notwithstanding the foregoing, said base salary may be increased (but not
decreased) as determined by the Company in accordance with the policies of the
Company and said increased salary shall thereafter be the base salary of the
Executive.  In addition, the Executive shall be entitled to participate, on a
basis consistent with his position with the Company, in any retirement, pension,
profit sharing, bonus and stock option plans, and death and life insurance
benefits and medical insurance programs, of the Company, now in existence or
hereafter adopted, in which other executive employees participate, in accordance
with the terms of any such plan, benefit or program.  Without limiting the
generality of the foregoing, the Executive shall be entitled to participate in
an annual cash bonus program based on a comparison of the Company's performance
against established goals and objectives.  The bonus potential for period from
June 1, 2003 through December 31, 2003 shall be $291,667.  The primary elements
in such calculation for such period shall be earnings growth, cash flow and
asset management.  The specific bonus program for the Executive for each
subsequent fiscal year, including 2008, shall be established by the Compensation
Committee of the Board of Directors.  The Executive's bonus potential for any
such fiscal year shall be no less than $500,000.
 

4.  Duties and Title of Executive. 

     During the Term, the Executive shall have the title of President and Chief
Operating Officer, shall report directly to the Chairman of the Board and Chief
Executive Officer of the Company and shall have the powers, status and duties
that are normally exercised in and ordinarily pertain to these positions.

     The Executive's office shall be located at the Company's executive office
located at 2725 Fairfield Road, Kalamazoo, MI 49002.
 

5.  Acceptance by Executive.

     The Executive accepts the aforementioned employment at the compensation
specified above.  During the Term, the Executive shall devote his full time and
efforts to the business of the Company and to the performance of the duties
specified above.
 

6.  Covenant Not to Compete; Nonsolicitation.

 a. Except with the prior written consent of the Company authorized by a
    resolution adopted by the Board of Directors of the Company, during the Term
    and for a period of two years after the termination of the Executive's
    employment for any reason, the Executive will not, and will not permit any
    corporation, partnership or other business entity in which the Executive has
    a financial interest, to engage directly or indirectly as a partner,
    director, principal, officer, employee or agent of, or act as a consultant
    to or perform any services for, any business which is competitive with the
    business of the Company; provided that the ownership by the Executive of not
    more than one percent of the capital stock of any other corporation or a one
    percent interest in any partnership or other business entity shall not be
    deemed to be a violation of this Section 6.
     

 b. During the Term and for a period of two years after the termination of the
    Executive's employment for any reason, the Executive shall not personally
    (and shall not personally cause others to) (i) take any action to solicit or
    divert any material business or customers away from the Company, (ii) induce
    customers, potential customers, suppliers, agents or other persons under
    contract or otherwise associated or doing business with the Company to
    terminate, reduce or alter any such association or business, or (iii) induce
    any person employed by the Company to (A) terminate such employment
    arrangement, (B) accept employment with another person, or (C) interfere
    with the customers or suppliers or otherwise with the Company in any manner.
     

 c. The restrictions set forth in this Section 6 are considered by the parties
    to be reasonable.  However, if any such restriction is found to be
    unenforceable by a court of competent jurisdiction because it extends for
    too long a period of time or over too great a range of activities or is too
    broad a geographic area, it shall be interpreted to extend only over the
    maximum period of time, range of activities or geographic area as to which
    it may be enforceable, and the parties expressly request and authorize such
    court to amend the terms of this Section 6 in whatever manner necessary to
    render it valid and enforceable to the maximum extent permitted by law.

7.  Secrecy; Nondisparagement. 

 a. The Executive recognizes and acknowledges that the information (such as, but
    not limited to, financial information), trade secrets, formulae,
    manufacturing methods, technical data, know‑how and secret processes of the
    Company as acquired and used by the Company are special, valuable and unique
    assets of the Company.  The Executive will not, during the Term or at any
    time thereafter, disclose any such information, trade secrets, formulae,
    manufacturing methods, technical data, know‑how and secret processes to any
    person, firm, corporation, association or any other entity for any reason or
    purpose whatsoever without the prior written consent of the Company, unless
    such information shall have previously become public knowledge.
     

 b. The Executive agrees that he will not make any disparaging statements about
    the Company or the directors, officers or employees of the Company; provided
    that this Section 7(b) shall not apply to truthful testimony as a witness,
    compliance with other legal obligations, or truthful assertion of or defense
    against any claim or breach of this Agreement, or to the Executive's
    truthful statements or disclosures to officers or directors of the Company,
    and shall not require the Executive to make false statements or
    disclosures.  The Company agrees that neither the directors nor the officers
    of the Company nor any spokesperson for the Company shall make any
    disparaging statements about the Executive; provided that this Section 7(b)
    shall not apply to truthful testimony as a witness, compliance with other
    legal obligations, truthful assertion of or defense against any claim of
    breach of this Agreement, or truthful statements or disclosures to the
    Executive, and shall not require false statements or disclosures to be made.
     

8.  Termination.

 a. Cause.  The Board of Directors, by a vote of a majority of the entire Board
    of Directors, may terminate the employment of the Executive if the conduct
    of the Executive shall, in the opinion of the Board of Directors, constitute
    cause for immediate dismissal.   As used in this Agreement, the term "cause"
    shall mean (i) the Executive's willful and material breach of Sections 6 or
    7 of this Agreement; (ii) the Executive's conviction of a felony; or (iii)
    the Executive's engagement in conduct that constitutes willful gross neglect
    or willful gross misconduct in carrying out his duties under this Agreement,
    resulting, in either case, in material harm to the financial condition or
    reputation of the Company.  For purposes of this Agreement, an act or
    failure to act on the Executive's part shall be considered "willful" if it
    was done or omitted to be done by him not in good faith, and shall not
    include any act or failure to act resulting from any incapacity of the
    Executive.  Notwithstanding the foregoing, a termination for "cause" shall
    not take effect unless the Executive has been given written notice by the
    Company of its intention to terminate him for "cause", such notice (A) to
    state in detail the particular act or acts or failure or failures to act
    that constitute the grounds on which the proposed termination for "cause" is
    based and (B) to be given within 90 days of the Company's learning of such
    act or acts or failure or failures to act.  The Executive shall have 20 days
    after the date that such written notice has been given to him in which to
    cure such conduct, to the extent such cure is possible.  If he fails to cure
    such conduct, the Executive shall then be entitled to a hearing before the
    Board of Directors at which the Executive and his counsel are entitled to
    appear.  Such hearing shall be held within 25 days of such notice to the
    Executive, provided he requests such hearing within ten days of the written
    notice from the Company of the intention to terminate him for "cause".  If,
    within five days following such hearing, the Executive is furnished written
    notice by the Board of Directors confirming that, in its judgment, grounds
    for "cause" on the basis of the original notice exist, he shall thereupon be
    terminated for "cause."
     

 b. Without Cause.  The Board of Directors, by a majority vote of the entire
    Board of Directors, may terminate the employment of the Executive without
    cause.
     

 c. Disability.  The Board of Directors of the Company, by a vote of a majority
    of the entire Board of Directors, may terminate the employment of the
    Executive under this Agreement if the Executive has become incapacitated or
    disabled to such an extent that he is incapable of performing the duties and
    services required to be performed hereunder for a period or periods
    aggregating in excess of six months in any 12-month period.
     

 d. Death.  The employment of the Executive shall terminate if the Executive
    shall die.
     

 e. Voluntary Termination.  The employment of the Executive shall terminate if
    the Executive shall voluntarily leave the employment of the Company for
    other than good reason.  As used herein, "good reason" shall mean (i) the
    assignment to the Executive of any duties inconsistent in any respect with
    the Executive's position (including status, offices, titles and reporting
    relationships), authority, duties or responsibilities as contemplated by
    Section 4 of this Agreement or any other action by the Company that results
    in a diminution in such position, authority, duties or responsibilities,
    excluding for this purpose an isolated, insubstantial and inadvertent action
    not taken in bad faith that is remedied by the Company promptly after
    receipt of notice thereof given by the Executive; or (ii) any failure of the
    Company to comply with and satisfy Section 12(c) of this Agreement or any
    other material breach of this Agreement by the Company.
     

 f. Good Reason.  The employment of the Executive may be terminated by the
    Executive for good reason.
     

9.  Obligations of the Company Upon Termination.

 a. Cause; Voluntary Termination.  If the Executive's employment is terminated
    under subsections (a) or (e) of Section 8, the Company shall have no further
    obligations to the Executive hereunder, except that the Company shall pay to
    the Executive the Accrued Amounts.  For purposes of this Agreement, the
    "Accrued Amounts" means the full amount due to the Executive and not
    theretofore paid for base salary up to the date of such termination and the
    amount of any accrued but unpaid bonus on account of the last full fiscal
    year preceding the date of such termination.
     

 b. Without Cause; Good Reason.  If the Executive's employment is terminated
    pursuant to subsections (b) or (f) of Section 8, the Company shall pay to
    the Executive in a lump sum in cash within 30 days after the date of
    termination the aggregate of the following amounts:

(i)  The Accrued Amounts plus a Pro-Rated Bonus for the Termination Year.  A
"Pro-Rated Bonus" means a pro-rated bonus reflecting the number of months
(treating any partial month as a full month for this purpose) in the Termination
Year during which the Executive was employed, such bonus to be calculated and
paid as soon as practicable following the end of the Termination Year.  As used
herein, "Termination Year" means the calendar years in which the Executive's
employment is terminated;

(ii)  If such termination occurs: (A) on or prior to May 31, 2006, the sum of
$3,150,000; (B) on or after June 1, 2006 but on or prior to May 31, 2007, the
sum of $2,100,000; or (C) on or after June 1, 2007 but on or prior to May 31,
2008, the sum of $1,050,000.

    In addition, for a period of 36 months following termination of the
Executive's employment if such termination occurs on or prior to May 31, 2006,
24 months if such termination occurs on or after June 1, 2006 but on or prior to
May 31, 2007 and 12 months if such termination occurs on or after June 1, 2007
but on or prior to May 31, 2008, or such longer period as any plan, program,
practice or policy may provide, the Company shall continue benefits to the
Executive and/or his family at least equal to those which would have been
provided in accordance with the welfare benefit plans, programs, practices and
policies of the Company if the Executive's employment had not been terminated,
including medical, dental, disability and group life insurance plans and
programs, in accordance with the most favorable plans, practices, programs or
policies of the Company during the 90-day period immediately preceding the date
the Executive's employment is terminated or, if more favorable, as in effect
from time to time thereafter with respect to other senior executives of the
Company and their families.  Moreover, all of the Executive's then outstanding
Award Shares shall become immediately vested.

 c. Disability.  If the Executive's employment is terminated pursuant to
    subsection (c) of Section 8, the Company shall (i) pay to the Executive the
    Accrued Amounts and a Pro-Rated Bonus and (ii) make, or cause to be made,
    payments to the Executive, including any payments made to the Executive
    under the Company's disability income plan, equal to sixty percent of the
    Executive's annual base salary rate in effect immediately prior to the
    termination of employment of the Executive, payable in equal monthly
    payments, from the date of such termination until the date on which payments
    would cease to be payable under the terms of such Plan as in effect on the
    date hereof.
     

 d. Death.  If the Executive's employment is terminated pursuant to subsection
    (d) of Section 8, the Company shall pay to the Executive's estate the
    Accrued Amounts and a Pro-Rated Bonus.
     

 e. Nothing in this Section 9 shall be interpreted as reducing or eliminating
    any benefits to which the Executive or his beneficiaries are entitled,
    without regard to this Agreement, under any plan or program of the Company
    following a termination of employment for any reason.
     

 f. In the event of any termination of employment under Section 8, the Executive
    shall be under no obligation to seek other employment, and there shall be no
    offset against any amounts due the Executive under this Agreement on account
    of the remuneration attributable to any subsequent employment that the
    Executive may obtain.  Any amounts due under this Section 9 are in the
    nature of severance payments, or liquidated damages, or both, and are not in
    the nature of a penalty.
     

 g. The Executive agrees, as a condition to receipt of the termination payments
    and benefits provided for in this Section 9, that he will execute a release
    agreement, in a form reasonably satisfactory to the Company and the
    Executive, releasing any and all claims arising out of the Executive's
    employment (other than enforcement of this Agreement, the Executive's rights
    under any of the Company's incentive compensation and employee benefit plans
    and programs to which he is entitled under this Agreement or otherwise, and
    any claim for any tort for personal injury not arising out of or related to
    his termination of employment).

10.  Remedies. 

     In the event of a breach or threatened breach by the Executive of the
provisions of Section 6 or Section 7 of this Agreement, the Company shall be
entitled to seek an injunction restraining the Executive from violating either
of said provisions, or any other remedy, including the recovery of damages from
the Executive.  If the Executive shall breach any of the provisions of Section 6
or Section 7 of this Agreement, nothing herein shall be construed as preventing
the Company from withholding any payment or payments required to be made
hereunder to the Executive.
 

11.  Assistance in Litigation. 

     The Executive shall, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is or may become a party.
 

12.  Successors.

 a. This Agreement is personal to the Executive and, without the prior written
    consent of the Company, shall not be assignable by the Executive otherwise
    than by will or the laws of descent and distribution.  This Agreement shall
    inure to the benefit of and be enforceable by the Executive's legal
    representatives.
     

 b. This Agreement shall inure to the benefit of and be binding upon the Company
    and its successors and assigns.
     

 c. The Company shall require any successor (whether direct or indirect, by
    purchase, merger, consolidation or otherwise) to all or substantially all of
    the business and/or assets of the Company to assume expressly and agree to
    perform this Agreement in the same manner and to the same extent that the
    Company would be required to perform it if no such succession had taken
    place.  As used in this Agreement, "Company" shall mean the Company as
    hereinbefore defined and any successor to its business and/or assets as
    aforesaid which assumes and agrees to perform this Agreement by operation of
    law or otherwise.
     

13.  Notices. 

     All communications hereunder shall be in writing and delivered or mailed by
registered mail to the Company at 2725 Fairfield Road, Kalamazoo, MI 49002,
Attention: Chairman of the Board, and to the Executive at 502 Wheatfield Lane,
Newtown, PA 18940, unless another address has been given to the other party
hereto in writing.
 

14.  Interpretation. 

     No provision of this Agreement may be altered or waived except in writing
and executed by the other party hereto.  This Agreement constitutes the entire
contract between the parties hereto and cancels and supersedes all prior
agreements, written or oral, relating to the employment of the Executive.  No
party shall be bound in any manner by any warranties, representations or
guarantees, except as specifically set forth in this Agreement.  This Agreement
shall be interpreted under the laws of the State of Michigan.
 

15.  Arbitration. 

     The parties agree that any dispute or controversy arising under or in
connection with this Agreement shall be submitted to and determined by
arbitration in Kalamazoo, Michigan in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and agree to be bound by the
decision in any such arbitration provision.
 

16.  Renewals and Amendments. 

     This Agreement may be renewed, extended, altered or amended at any time by
mutual written agreement signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

 

STRYKER CORPORATION

 

 

 

 

April 22, 2003

/s/  JOHN W. BROWN                   

Date

Chairman of the Board, President

 

and Chief Executive Officer

 

 

 

 

 

 

April 22, 2003

/s/  STEPHEN P. MACMILLAN           

Date