Exhibit 10.3
BENEFIT EQUALIZATION PLAN
OF
ZIMMER HOLDINGS, INC. AND ITS SUBSIDIARY OR
AFFILIATED CORPORATIONS PARTICIPATING IN THE
ZIMMER HOLDINGS, INC. RETIREMENT INCOME PLAN OR THE
ZIMMER PUERTO RICO RETIREMENT INCOME PLAN
(effective as of August 6, 2001)
I.   Purpose of the Plan
     The purpose of this Plan is to provide benefits for certain participants in
the Zimmer Holdings, Inc. Retirement Income Plan (the “Retirement Income Plan”)
or the Zimmer Puerto Rico Retirement Income Plan (the “Puerto Rico Plan”)
(referred to herein collectively as the “Retirement Plans”) whose funded
benefits under the Retirement Plans are or will be limited by application of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the
Internal Revenue Code of 1986, as amended (the “Code”). The Plan is intended to
be an “excess benefit plan” as that term is defined in Section 3(36) of ERISA
with respect to those participants whose benefits under the Retirement Plans
have been limited by Section 415 of the Code, and a “top hat” plan meeting the
requirements of Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA
with respect to those participants whose benefits under the Retirement Plans
have been limited by Section 401(a)(17) of the Code.
     This Plan is a successor plan to the Benefit Equalization Plan of
Bristol-Myers Company and Its Subsidiary or Affiliated Corporations
Participating in the Bristol-Myers Company Retirement Income Plan or the
Bristol-Myers Company Puerto Rico, Inc. Retirement Income Plan, as in effect on
January 1, 1996 and as amended thereafter (the “Prior Plan”). Participants in
the Prior Plan who as of the Effective Date are employed by a corporation
participating in either Retirement Plan (a “Participating Employer”) shall as of
the Effective Date become participants in this Plan. This Plan shall recognize
all service covered under the Retirement Income Plan or the Puerto Rico Plan.
Benefits payable under the Prior Plan shall continue to be payable under the
Prior Plan by Bristol-Myers Squibb Company, the sponsor of the Prior Plan
(“Bristol-Myers Squibb”) and shall not be assumed by or become obligations of
Zimmer Holdings, Inc., the sponsor of this Plan (the “Company”) or any other
Participating Employer. As of the Effective Date, each participant under this
Plan shall be entitled to a benefit that will be reduced by the amount of the
benefit that the participant is entitled to under the Prior Plan.
II.  Administration of the Plan
     The Benefits Committee (the “Committee”) appointed by the Board of
Directors of the Company to administer the Retirement Plans shall also
administer this Plan. The Committee shall have full authority to determine all
questions arising in connection with the Plan, including its interpretation, may
adopt procedural rules, and may employ and rely on such legal counsel, such
actuaries, such accountants and such agents as it may deem advisable to assist
in the administration of the Plan. Decisions of the Committee shall be
conclusive and binding on all persons.

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III. Participation in the Plan
     Each member of the Retirement Income Plan or the Puerto Rico Plan who is
employed by a Participating Employer (which term also includes the Company)
shall be eligible to participate in this Plan whenever (a) his benefit under the
applicable Retirement Plan, as from time to time in effect, would exceed the
limitations on benefits and contributions imposed by Section 415 of the Code
calculated from and after September 2, 1974, (b) amounts of his compensation
would be excluded from his “Final Average Compensation” determined under the
Retirement Plan by reason of the application of Section 401(a)(17) of the Code
or (c) he participates in the Zimmer Holdings, Inc. Executive Performance
Incentive Plan (the “Performance Incentive Plan”).
IV. Equalization Benefits Related to the Retirement Plan
     A. Each participant in this Plan or his beneficiaries shall be entitled to
receive under this Plan a supplemental pension benefit equal to the excess of
(1) the benefit that would have been payable to such participant or his
beneficiaries under the applicable Retirement Plan determined (a) without regard
for any provision therein incorporating limitations imposed by Section 415 of
the Code, and (b) by deeming as “compensation” for purposes of determining Final
Average Compensation under such Retirement Plan amounts elected to be deferred
under the Zimmer Holdings, Inc. Savings and Investment Program (“Savings and
Investment Program”) but which due to Section 415 limitations were, in
accordance with the participant’s election, credited to the Benefit Equalization
Plan of Zimmer Holdings, Inc. and Its Subsidiary or Affiliated Corporations
Participating in the Zimmer Holdings, Inc. Savings and Investment Program (the
“Savings and Investment BEP”), over (2) the actual benefit payable to such
participant or his beneficiaries under the applicable Retirement Plan.
     B. Each participant whose compensation under the applicable Retirement Plan
is limited by Section 401(a)(17) of the Code or who participates in the
Performance Incentive Plan shall be entitled to receive an additional
supplemental pension benefit under this Plan equal to the amount, if any, by
which the supplemental pension benefit determined under paragraph A of this
Article IV would be greater if the hypothetical benefit calculated under clause
(1) of such paragraph were determined (a) by disregarding, in addition to
Section 415 limitations, any limitations on such participant’s Final Average
Compensation imposed by reason of Section 401(a)(17) of the Code, (b) by
including in his “annual rate of compensation” for purposes of determining Final
Average Compensation under such Retirement Plan amounts elected to be deferred
under the Savings and Investment Program but, due to Section 401(a)(17)
limitations, were, in accordance with such participant’s election, credited to
the Savings and Investment BEP and (c) by recalculating his “annual rate of
compensation” for each year used in determining Final Average Compensation under
such Retirement Plan, by substituting for the cash award paid under the
Performance Incentive Plan during such calendar year the cash award earned by
such participant under the Performance Incentive Plan for such calendar year.
For purposes of clause (c) of the preceding sentence, any performance incentive
award for the calendar year in which the participant retires or otherwise
terminates employment shall be assumed to be fully earned as though all
performance goals and other conditions to full payment had been attained as of
such retirement or termination date.
     C. Each participant in this Plan in grade levels E07 and above or his
beneficiaries

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shall be entitled to receive a supplemental pension benefit equal to the excess
of the benefit that would have been payable to such participant or his
beneficiaries under the applicable Retirement Plan determined without limiting
his total years of service to 40 years.
     D. The supplemental pension benefits payable to a participant under
paragraphs A, B and C of this Article IV shall be calculated utilizing the same
actuarial assumptions used to compute the participant’s Retirement Plan benefit
payments or such other assumptions as may be determined by the Committee from
time to time, shall be reduced by the amount of the benefit that the participant
is entitled to under the Prior Plan, and shall be payable to the participant (or
his beneficiary) upon his election in either:
          (i) a lifetime benefit, 50% joint and survivor, 100% joint and
survivor, or the Variable Retirement Income annuity forms of payment as provided
under the applicable Retirement Plan, commencing within 60 days after the
earlier of (1) his retirement entitling him to receive payments under the
applicable Retirement Plan, (2) his death, (3) his total disability as defined
in the applicable Retirement Plan, or (4) if the participant’s employment
terminates prior to the date he is entitled to receive payments under the
applicable Retirement Plan, the date he attains his Early Retirement Date under
such Retirement Plan. Such election shall be made, in writing, concurrent with
the participant’s benefit election under the applicable Retirement Plan and
shall become irrevocable as of the retirement date; or
          (ii) a lump sum provided that one year prior to retirement, the
participant irrevocably elects, in writing, to receive supplemental pension
benefits in such form, which payment shall be made within 60 days after his
retirement entitling him to receive payments under the applicable Retirement
Plan, except that, in the case of a participant who is eligible to retire under
the applicable Retirement Plan who has an involuntary termination or unplanned
retirement and who irrevocably elects, in writing, 90 days prior to retirement
to receive supplemental pension benefits in such form, such payment shall be
made on the first anniversary of his retirement.
     Any other provision of this Article IV to the contrary notwithstanding, if
upon a participant’s termination of employment or retirement the present value
of the amount of the supplemental pension benefits determined under paragraphs
A, B and C of this Article IV is not more than $5,000 (or if payments would be
less than $50 per month), such benefit shall be paid in cash to the participant
in a single sum at the time of such termination or retirement.
     Each participant’s supplemental pension benefits under this Plan shall be
paid by his Participating Employer. If the participant was employed by more than
one such Participating Employer, the proportion to be paid by each such
Participating Employer shall be in the ratio which the “Credited Service” (as
defined in the applicable Retirement Plan) of the participant with a
Participating Employer bears to the total Credited Service of such participant
with all Participating Employers.
V. Designation of Beneficiaries in the Event of Death
     Upon the death of a participant prior to receipt of all or part of the
amount on his account, the balance remaining on his account shall be paid as
follows: If the participant has designated a

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joint annuitant or beneficiary under the applicable Retirement Plan, such person
shall be deemed the joint annuitant or beneficiary for purposes of this Plan. If
the participant has not designated a joint annuitant or beneficiary under such
Retirement Plan, or if no such joint annuitant or beneficiary is living at the
time of the participant’s death, the amount in the participant’s account that is
distributable upon his death shall be distributed to the same person or persons
who would otherwise be entitled to receive a distribution of the participant’s
Retirement Plan benefits. Payment to one or more of such persons shall
completely discharge the Plan with respect to the amount so paid.
VI. Miscellaneous
     This Plan may be terminated at any time by the Board of Directors of the
Company, in which event the rights of participants to their accrued supplemental
pension benefits under this Plan shall become non-forfeitable. The Company or
any Participating Employer may terminate this Plan with respect to its employees
participating in the Retirement Plans, in which event the rights of participants
to their accrued supplemental pension benefits under this Plan and payable by
such terminating corporation shall become non-forfeitable.
     If the Plan is terminated, no distribution shall be made to a participant
or beneficiary which is attributable to the termination during the 90 day period
following such termination. Thereafter, providing the Company is not subject to
an insolvency or bankruptcy proceeding, all amounts then accrued on behalf of a
participant shall be distributed to him (or his beneficiary) within 60 days
after the end of such 90-day period. If the Company is subject to an insolvency
or bankruptcy proceeding, distribution of such amounts shall be suspended
subject to the pendency of such proceeding.
     No right to payment or any other interest under this Plan may be alienated,
sold, transferred, pledged, assigned, or made subject to attachment, execution,
or levy of any kind.
     Nothing in this Plan shall be construed as giving any employee the right to
be retained in the employ of any Participating Employer. Each Participating
Employer in the Plan expressly reserves the right to dismiss any employee at any
time without regard to the effect which such dismissal might have upon him under
the Plan.
     This Plan may be amended at any time by the Board of Directors of the
Company or the Committee, except that no such amendment shall deprive any
participant of his supplemental pension benefit accrued at the time of such
amendment.
     Benefits payable under this Plan shall not be funded and shall be made out
of the general funds of the Participating Employers or any grantor trust
established by the Company for this purpose. The Participating Employers shall
not be required to segregate any contributions made by participants under this
Plan. They shall become a part of the general funds of the Participating
Employers. To the extent that a grantor trust is established by the Company, the
Committee may from time to time reserve unto itself the right to vote any shares
of equity securities held in a Pension Trust Fund or may permit such other
committee, or Investment Manager or Managers as it may designate to exercise
such responsibility.
     This Plan shall be construed, administered and enforced according to the
substantive

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internal laws (and not the conflict of laws provisions) of the State of Indiana.
VII. Effective Date
     This Plan shall be effective as of August 6, 2001 (the “Effective Date”)
for retirements or other terminations of employment on and after such date.

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