Exhibit 10.38
SUMMARY SHEET
OF
2008 COMPENSATION
Director Compensation
     The compensation program for our non-employee directors currently consists
of a combination of cash and equity-based awards. The cash component includes an
annual retainer of $50,000 (one-half of which is subject to mandatory deferral
in the form of deferred share units as described below) and an additional fee of
$1,500 for each Board and committee meeting attended. In addition, our
non-executive Chairman of the Board receives an annual cash retainer of $30,000
and committee chairs receive an annual cash fee of $7,500. At the end of each
calendar quarter, non-employee directors are paid one-fourth of their annual
retainers and committee chair annual fees and fees for attending Board and
committee meetings held during the quarter.
     Each non-employee director also receives 500 deferred share units (“DSUs”)
as of the date of each annual meeting of stockholders. The value of each DSU is
equal to the value of a share of our common stock. The DSUs are immediately
vested and subject to mandatory deferral until the director’s retirement or
other termination of service from the Board. Continuing non-employee directors
(including directors who are elected or re-elected) also receive restricted
stock units (“RSUs”) as of the date of each annual meeting of stockholders with
an initial value, based on the price of our common stock on the date of grant,
equal to $100,000. The RSUs are immediately vested and subject to mandatory
deferral until the later of (1) the director’s retirement or other termination
of service from the Board or (2) the date that is three years after the grant
date. Both the DSUs and the RSUs are settled in shares of our common stock.
     The terms and conditions of the RSU grants, as well as other equity-based
awards that non-employee directors are eligible to receive, are set forth in the
Stock Plan for Non-Employee Directors. Copies of this plan, amendments to this
plan and the form of RSU award agreement are filed as exhibits to our periodic
reports.
     The terms and conditions of the DSU grants are set forth in our Restated
Deferred Compensation Plan for Non-Employee Directors. Pursuant to this plan, we
require that 50% of a director’s annual retainer for Board service be deferred
and credited to a deferred compensation account in the form of DSUs, the value
of which account is determined by the value of our common stock, until the
director owns a total of 5,000 DSUs. A copy of this plan is filed as an exhibit
to our periodic reports.
     We also provide non-employee directors with travel accident insurance when
on Zimmer business and reimburse or pay the reasonable travel, lodging and meal
expenses incurred by non-employee directors when traveling on Zimmer business.
     Changes to our non-employee director compensation program may be disclosed
in future proxy statements or other periodic reports.
Named Executive Officer Compensation
     Our executive officers serve at the discretion of the Board of Directors.
From time to time, the Compensation and Management Development Committee of the
Board of Directors reviews and determines the salaries that are paid to our
executive officers. We do not have written employment agreements with our
executive officers. The following are the current base salaries for our Chief
Executive Officer, our Chief Financial Officer and three other executive
officers who we expect will be identified as named executive officers in the
definitive proxy statement for our 2008 annual meeting of stockholders to be
filed with the Securities and Exchange Commission. J. Raymond Elliott, former
Chairman, President and Chief Executive Officer, and Sam R. Leno, former
Executive Vice President, Finance and Corporate

 

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Services and Chief Financial Officer, who were two of the named executive
officers listed in the 2007 proxy statement, are no longer employed by us.

          Name and Position   2008 Base Salary
 
       
David C. Dvorak
  $ 750,000  
President and Chief Executive Officer
       
James T. Crines
  $ 456,500  
Executive Vice President, Finance and Chief Financial Officer
       
Bruno A. Melzi
  € 398,300  
Chairman, Europe, Middle East and Africa
       
Sheryl L. Conley
  $ 394,100  
Group President, Americas and Global Marketing and Chief Marketing Officer
       
Stephen H.L. Ooi
  SGD547,600
President, Asia Pacific
       

     During 2008, each of the executive officers identified above is also
eligible to receive an annual cash incentive award, based upon a specified
percentage of his or her base salary, under our Executive Performance Incentive
Plan (the “Incentive Plan”) and to receive awards under our 2006 Stock Incentive
Plan, as amended (the “Stock Plan”). Copies of the Incentive Plan, the Stock
Plan and any future revisions of these plans are filed as exhibits to our
periodic reports. The target amount under the Incentive Plan for each of these
officers is 110% of base salary for Mr. Dvorak, 70% of base salary for
Mr. Crines, and 60% of base salary for each of Mr. Melzi, Ms. Conley and Mr.
Ooi.
     The executive officers identified above are also eligible to participate in
other employee benefit plans and arrangements as described in our proxy
statements. For Mr. Dvorak, Mr. Crines and Ms. Conley, who are based in the
United States, these include a defined benefit pension plan, a supplemental
pension plan, a savings and investment (401(k)) plan and a supplemental savings
and investment plan. For Mr. Melzi, who is based in Italy, these include a
defined benefit pension plan. For Mr. Ooi, who is based in Singapore, these
include our voluntary contributions to the Central Provident Fund, a countrywide
defined contribution retirement plan.
     Each of these executive officers has also entered into a change in control
severance agreement that provides certain severance benefits following a change
in control of Zimmer and termination of the executive’s employment. Copies of
those agreements or the form of those agreements are filed as exhibits to our
periodic reports.