Exhibit 10.36
SUMMARY SHEET
OF
2007 COMPENSATION
Director Compensation
     Our non-employee directors receive an annual retainer of $50,000 and an
additional fee of $1,500 for each Board and committee meeting they attend. In
addition, committee chairs receive an annual 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 $40,000. 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, filed as Exhibit 10.6 to our Current
Report on Form 8-K dated August 6, 2001. The First Amendment to the Stock Plan
for Non-Employee Directors is filed as Exhibit 10.3 to our Current Report on
Form 8-K dated December 15, 2005. The form of RSU award agreement is filed as
Exhibit 10.1 to our Current Report on Form 8-K filed February 21, 2006.
     The terms and conditions of the DSU grants are set forth in our Restated
Deferred Compensation Plan for Non-Employee Directors, filed as Exhibit 10.2 to
our Current Report on Form 8-K dated December 15, 2005. 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.
     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.
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. The following are the current base salaries for our Chief
Executive Officer, Chief Financial Officer and three of the four most highly
compensated executive officers (the “Named Executive Officers”) identified in
the definitive proxy statement dated March 22, 2006. Richard Fritschi, former
President, Zimmer Europe and Australasia, who was one of the Named Executive
Officers listed in the 2006 proxy statement, is no longer employed by us.

 

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          Name and Position   2007 Base Salary  
J. Raymond Elliott
Chairman, President and Chief Executive Officer
  $ 750,000  
Sam R. Leno
Executive Vice President, Finance and Corporate Services and Chief Financial
Officer
  $ 525,000  
Bruno A. Melzi
Chairman, Europe, Middle East and Africa
  € 383,000  
David C. Dvorak
Group President, Global Businesses and Chief Legal Officer
  $ 415,000  
Sheryl L. Conley
Group President, Americas and Global Marketing and Chief Marketing Officer
  $ 380,000  

     During 2007, each of Messrs. Leno, Melzi and Dvorak and Ms. Conley 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”). A copy of the Incentive Plan is filed as
Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 31,
2003. A copy of the Stock Plan is filed as Exhibit 10.1 to our Current Report on
Form 8-K filed December 13, 2006. For 2007, the performance goals under the
Incentive Plan for these officers include goals based upon earnings per share
(representing 50% of each award), revenue (representing 25% of each award) and
cash flow (representing 25% of each award). The target amount under the
Incentive Plan for each of these officers is 60% of base salary for Mr. Leno,
50% of base salary for Mr. Melzi, 60% of base salary for Mr. Dvorak and 60% of
base salary for Ms. Conley.
     In November 2006, Mr. Elliott notified us that he intends to resign from
his positions as our President and Chief Executive Officer in the first half of
2007, assuming a successor CEO has been named. We entered into an employment
agreement with Mr. Elliott that will become effective on the date that he
resigns from his positions as President and Chief Executive Officer (the
“effective date”) and will end on November 30, 2007, unless both parties agree
to extend the term. Under the employment agreement, Mr. Elliott will continue to
serve as Chairman of the Board and will receive a base salary equal to his base
salary in effect immediately prior to the effective date. During the term of the
employment agreement, Mr. Elliott will not be entitled to receive any new grants
or awards under the Incentive Plan or the Stock Plan.
     The Named Executive Officers are also eligible to participate in other
employee benefit plans and arrangements as described in our proxy statements,
including a defined benefit pension plan, a supplemental pension plan, a savings
and investment (401(k)) plan and a supplemental savings and investment plan.
Each of the Named 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.