exv10w31







EXHIBIT 10.31



Zimmer Holdings, Inc.




2009 STOCK INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD

GRANTED TO



AWARD RECIPIENT: o



TARGET NUMBER OF RESTRICTED STOCK UNITS: o



MAXIMUM NUMBER OF RESTRICTED STOCK UNITS: o



AWARD DATE: o



ZIMMER HOLDINGS, INC.

2009 STOCK INCENTIVE PLAN

PERFORMANCE-BASED

RESTRICTED STOCK UNIT AWARD FOR NON-U.S. EMPLOYEES




     1. RSU AWARD



     Under the terms of the Zimmer Holdings, Inc. 2009 Stock Incentive Plan (the “Plan”), the
Compensation and Management Development Committee of the Board of Directors of Zimmer Holdings,
Inc. (the “Committee”) has granted to the Award Recipient on the Award Date an award of
performance-based restricted stock units (“RSUs”) over Zimmer Holdings, Inc. Common Stock, par
value $0.01 per share (“Common Stock”), as designated herein subject to the terms, conditions, and
restrictions set forth in this agreement (this “RSU Award”). The purposes of this RSU Award are to
motivate and retain the Award Recipient as an employee of Zimmer Holdings, Inc. (the “Company”) or
a subsidiary of the Company, to encourage the Award Recipient to continue to give best efforts for
the Company’s future success, and to further the opportunity for stock ownership by the Award
Recipient in order to increase the Award Recipient’s proprietary interest in the Company. Each RSU
represents an unfunded, unsecured promise by the Company to deliver one share of Common Stock,
subject to certain performance-based and time-based vesting requirements and the other
restrictions, terms and conditions contained in this agreement. Except as may be required by law,
the Award Recipient is not required to make any payment (other than payments for Tax-Related Items
pursuant to Section 7 hereof) or provide any consideration other than the rendering of future
services to the Company or a subsidiary of the Company.



     2. GENERAL



     (a) No RSUs shall be earned unless and until the Committee shall have determined the extent to
which the performance criteria set forth in Annex A hereto have been met with respect to the
Performance Period.



     (b) The grant of RSUs does not entitle the Award Recipient to any rights of a holder of Common
Stock, including dividends or voting rights. The rights of the Award Recipient with respect to an
RSU shall remain forfeitable at all times prior to the lapse of the Restriction Period for that
RSU.



     (c) Neither the RSUs nor any interest therein may be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, and
any such purported sale, assignment, transfer, pledge, hypothecation or other disposition shall be
void and unenforceable against the Company.



Performance/3-year Vesting




 









 





     3. PERFORMANCE AND TIME-BASED VESTING



     Except as otherwise provided in this Section 3 and Section 4 below, an RSU granted in this RSU
Award shall be subject to the restrictions and conditions set forth herein during the period from
the Award Date until such RSU becomes vested and nonforfeitable (the “Restriction
Period”).



     (a) As soon as practicable following the availability of audited results of the Company for
fiscal year 20___(the “Performance Period”), the Committee shall determine
whether and the extent to which the performance criteria in Annex A have been satisfied and the
number of RSUs earned (the “Earned RSUs”). The date on which the Committee makes its determination
is hereinafter referred to as the “Determination Date”.



     (b) Except as otherwise set forth in Section 4 below, one third of the Earned RSUs granted in
this RSU Award shall become vested and nonforfeitable on the second anniversary of the Award Date
provided the Award Recipient has been continuously employed by the Company or a subsidiary of the
Company since the Award Date; an additional third of the Earned RSUs granted in this RSU Award
shall become vested and nonforfeitable on the third anniversary of the Award Date provided the
Award Recipient has been continuously employed by the Company or a subsidiary of the Company since
the Award Date; and the final third of the Earned RSUs granted in this RSU Award shall become
vested and nonforfeitable on the fourth anniversary of the Award Date provided the Award Recipient
has been continuously employed by the Company or a subsidiary of the Company since the Award Date.



     4. RESTRICTIONS AND FORFEITURES



     (a) Except as set forth below, if the Award Recipient terminates employment with the Company
or a subsidiary for any reason other than retirement or death before all of the Earned RSUs have
become vested, the Earned RSUs that are not already vested as of the termination date shall be
forfeited. If after the Award Recipient has been continuously employed for one year or more from
the Award Date, the Award Recipient terminates employment with the Company or a subsidiary on
account of retirement or death, the restrictions with respect to all unvested Earned RSUs granted
in this RSU Award shall be waived and the Earned RSUs will be deemed fully vested. In the event of
the termination of an Award Recipient’s employment by the Company, other than for cause, retirement
or death, after the Award Recipient has been continuously employed for one year or more from the
Award Date, a pro rata portion of the Earned RSUs granted in this RSU Award shall be deemed vested
as shown in Annex B to this agreement. Such pro rata portion shall include the portion, if any, of
this RSU Award already vested under the terms of this agreement. “Retirement” shall mean the Award
Recipient’s termination of employment with the Company or a subsidiary on or after (i) the Award
Recipient’s 65th birthday, (ii) the Award Recipient’s 55th birthday after having completed ten
years of service with the Company or any of its subsidiaries, or (iii) the date the sum of the
Award Recipient’s attained age (expressed as a whole number) plus completed years of service
(expressed as a whole number) plus one (1) equals at least 70 and the Award Recipient has completed
ten years of service with the Company or any of its subsidiaries and the Award Recipient’s
employment terminates for any reason other than death, resignation, willful misconduct, or activity
deemed detrimental to the interest of the Company and, where applicable, the Award Recipient has
executed a general release and/or a covenant not to compete and/or not to solicit as required by
the Company. “Cause” shall mean termination by the Company of the Award Recipient’s employment
upon the willful and continued failure by the Award Recipient to substantially perform the Award
Recipient’s duties with the Company (other than any such a failure resulting from the Award
Recipient’s incapacity due to physical or mental illness) for a period of at least 30 days after a
written demand for substantial performance is delivered to the Award Recipient, which demand
specifically identifies the manner in which the Award Recipient has not substantially performed the
Award Recipient’s duties, or the willful engaging by the Award Recipient in conduct which is
demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise.
No act, or failure to act, on the Award Recipient’s part shall be deemed willful unless done, or
omitted to be done, by the Award Recipient not in good faith and without reasonable belief that the
Award Recipient’s act, or failure to act, was in the best interest of the Company. Except as
provided in Section 17, in the event of special circumstances as determined by the Committee, the
Committee may, in its sole discretion where it finds that a waiver would be in the best interests
of the Company, waive any time-based restrictions then remaining with respect to all or part of the
Earned RSUs and accelerate the vesting with regard to the Earned RSUs. For the purposes of this
RSU Award, service with Bristol-Myers Squibb Company and its subsidiaries and affiliates
(collectively, “Bristol-Myers Squibb”) before the effective date of the Plan shall be included as
service with the Company; provided that the Award Recipient was employed by Bristol-Myers Squibb on
August 5, 2001 and has been continuously employed by the Company or a subsidiary of the Company
since August 6, 2001.



     (b) In the event that the Award Recipient fails promptly to pay or make satisfactory
arrangements as to the Tax-Related Items as provided in Section 7, all unvested Earned RSUs shall
be forfeited by the Award Recipient.



     (c) (i) A transfer of an Award Recipient’s employment from the Company to a
subsidiary, or vice versa, or from one subsidiary to another, (ii) a leave of absence, duly
authorized in writing by the Company, for military service or sickness or for any other purpose
approved by the Company if the period of such leave does not exceed ninety (90) days, and (iii) a
leave of



Performance/3-year Vesting




2









 




absence in excess of ninety (90) days, duly authorized in writing, by the Company, provided
the Award Recipient’s right to reemployment is guaranteed either by a statute or by
contract, shall not be deemed a termination of employment. However, failure of the Award Recipient
to return to the employ of the Company at the end of an approved leave of absence shall be deemed a
termination. During a leave of absence as defined in (ii) or (iii), the Award Recipient will be
considered to have been continuously employed by the Company.




     (d) The Award Recipient may, at any time prior to the expiration of the Performance Period or
the Restriction Period, waive all rights with respect to earning all or some of the RSUs covered by
this RSU Award by delivering to the Company a written notice of such waiver.



     5. ISSUANCE OF SHARES



     The stock certificate(s), if any, evidencing the shares issued upon vesting of Earned RSUs
shall be registered on the Company’s books in the name of the Award Recipient within 60
days after the lapse of the Restriction Period for those Earned RSUs.



     The Company shall not be required to issue or deliver any certificate or certificates for
shares of its Common Stock upon the end of the Restriction Period prior to (i) the admission of
such shares to listing on any stock exchange on which the stock may then be listed, (ii) the
completion of any registration or other qualification of such shares under any state or federal law
or rulings or regulations of any governmental regulatory body, or (iii) the obtaining of any
consent or approval or other clearance from any governmental agency, which the Company shall, in
its sole discretion, determine to be necessary or advisable.



     6. DEATH OF AWARD RECIPIENT



     In the event of the Award Recipient’s death prior to the delivery of shares issuable
pursuant to vested Earned RSUs, such shares shall be delivered to the Award Recipient’s
estate, upon presentation to the Committee of letters testamentary or other documentation
satisfactory to the Committee.



     7. RESPONSIBILITY FOR TAXES



     Regardless of any action the Company or the Award Recipient’s actual employer (the “Employer”)
takes with respect to any or all income tax (including federal, state and local taxes), social
insurance, payroll tax, payment on account or other tax-related items related to the Award
Recipient’s participation in the Plan and legally applicable to the Award Recipient or deemed by
the Company or the Employer to be appropriate charge to the Award Recipient even if technically due
by the Company or the Employer (“Tax-Related Items”), the Award Recipient acknowledges that the
ultimate liability for all Tax-Related Items is and remains the Award Recipient’s responsibility
and may exceed the amount actually withheld by the Company or the Employer. The Award Recipient
further acknowledges that the Company and/or the Employer (i) make no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the
RSUs, including the grant of the RSU Award, the vesting or settlement of the RSUs, the conversion
of the RSUs into shares of Common Stock, the subsequent sale of any shares acquired at vesting and
the receipt of any dividends or dividend equivalents; and (ii) do not commit to, and are under no
obligation to, structure the terms of the grant or any aspect of the RSU Award to reduce or
eliminate the Award Recipient’s liability for Tax-Related Items or achieve any particular
result. Further, if the Award Recipient has become subject to tax in more than one jurisdiction
between the date of grant and the date of any relevant taxable event, the Award Recipient
acknowledges that the Company or the Employer (or former Employer, as applicable) may be required
to withhold or account for Tax-Related Items in more than one jurisdiction.



     Prior to any relevant taxable or tax withholding event, as applicable, the Award Recipient
shall pay, or make adequate arrangements satisfactory to the Company or to the Employer (in their
sole discretion) to satisfy all Tax-Related Items. In this regard and, if permissible under local
law, the Award Recipient authorizes the Company and/or the Employer, at their discretion, to
satisfy the obligations with respect to all Tax-Related Items in one or a combination of the
following:



     (a) requiring the Award Recipient to pay an amount necessary to pay the Tax-Related Items
directly to the Company (or the Employer) in the form of cash, check or other cash equivalent;



     (b) withholding such amount from wages or other cash compensation payable to the Award
Recipient by the Company and/or the Employer;



     (c) withholding from proceeds of the sale of shares to be issued upon vesting/settlement of
the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on
the Award Recipient’s behalf pursuant to this



Performance/3-year Vesting




3









 




authorization or such other authorization as the Award Recipient may be required to provide to
the Company or the Bank of New York (or any other designated broker)); or




     (d) withholding in shares to be issued upon vesting/settlement of the RSUs.



     To avoid negative accounting treatment, the Company may withhold or account for Tax-Related
Items by considering applicable minimum statutory withholding amounts or other applicable
withholding rates and the Award Recipient agrees that the amount withheld may exceed the Award
Recipient’s actual liability. If the obligation for Tax-Related Items is satisfied by withholding
in shares, for tax purposes, the Award Recipient is deemed to have been issued the full number of
shares subject to the vested RSUs, notwithstanding that a number of the shares are held back solely
for the purpose of paying the Tax-Related Items due as a result of any aspect of the Award
Recipient’s participation in the Plan.



     Finally, the Award Recipient shall pay to the Company or the Employer any amount of
Tax-Related Items that the Company or the Employer may be required to withhold or account for as a
result of the Award Recipient’s participation in the Plan that cannot be satisfied by the means
previously described. The Company may refuse to issue or deliver the shares or the proceeds of the
sale of shares, if the Award Recipient fails to comply with the Award Recipient’s obligations in
connection with the Tax-Related Items.



     8. NATURE OF GRANT



     In accepting the RSUs, the Award Recipient acknowledges, understands and agrees that:



          (a) the Plan is established voluntarily by the Company, it is discretionary in nature and may
be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;




          (b) the RSU Award is voluntary and occasional and does not create any contractual or other
right to receive future awards of RSUs, or benefits in lieu of RSUs even if RSUs have been awarded
repeatedly in the past;




          (c) all decisions with respect to future RSU Awards, if any, will be at the sole discretion of
the Company;




          (d) the Award Recipient’s participation in the Plan is voluntary;




          (e) the RSU Award and the shares subject to the RSUs are an extraordinary item that does not
constitute compensation of any kind for services of any kind rendered to the Company or to the
Employer, and which are outside the scope of the Award Recipient’s employment contract, if any;




          (f) the RSU Award and the shares subject to the RSUs are not intended to replace any pension
rights or compensation;




          (g) the RSU Award and the shares subject to the RSU Award are not part of normal or expected
compensation or salary for any purposes, including, but not limited to, calculation of any
severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments;




          (h) the RSU Award and the Award Recipient’s participation in the Plan will not be interpreted
to form an employment contract or relationship with the Company or any subsidiary;




          (i) the future value of the shares underlying the RSUs is unknown and cannot be predicted with
certainty;




          (j) no claim or entitlement to compensation or damages arises from forfeiture of the RSUs
resulting from termination of the Award Recipient’s employment with the Company or the Employer
(for any reason whatsoever and whether or not in breach of local labor laws) and in consideration
of the grant of the RSUs to which the Award Recipient is not otherwise entitled, the Award
Recipient irrevocably agrees never to institute any claim against the Company or the Employer,
waives his or her ability, if any, to bring such claim, and releases the Company and the Employer
from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of
competent jurisdiction, then, by participating in the Plan, the Award Recipient shall be deemed
irrevocably to have agreed not to pursue such claim and agreed to execute any and all documents
necessary to request dismissal or withdrawal of such claims;




          (k) in the event of termination of the Award Recipient’s employment as described in Section
4(a) above, the Award Recipient’s right to vest in RSUs under the Plan, if any, will terminate
effective as of the date that the Award Recipient is no longer actively employed and will not be
extended by any notice period mandated under local law (e.g., active employment




Performance/3-year Vesting




4









 




would not include a period of “garden leave” or similar period pursuant to local law); the
Committee shall have the exclusive jurisdiction to determine when the Award Recipient is no longer
actively employed for purposes of the RSU Award; and




          (l) the RSU Award and the benefits under the Plan, if any, will not automatically transfer to
another company in the case of a merger, take-over or transfer of liability.




     9. NO ADVICE REGARDING GRANT



     The Company is not providing any tax, legal or financial advice, nor is the Company making any
recommendations regarding the Award Recipient’s participation in the Plan, or the Award Recipient’s
acquisition or sale of the underlying shares. The Award Recipient is hereby advised to consult
with his/her own personal tax, legal and financial advisors regarding the Award Recipient’s
participation in the Plan before taking any action related to the Plan.



     10. DATA PRIVACY



     The Award Recipient hereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of the Award Recipient’s personal data as described in this
agreement and any other RSU Award materials by and among, as applicable, the Employer, the Company
and its subsidiaries for the exclusive purpose of implementing, administering and managing the
Award Recipient’s participation in the Plan.



     The Award Recipient understands that the Company and the Employer may hold certain personal
information about the Award Recipient, including, but not limited to, the Award Recipient’s name,
home address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any shares of stock or directorships held in the Company,
details of all RSUs or any other entitlement to shares of stock awarded, canceled, exercised,
vested, unvested or outstanding in the Award Recipient’s favor, for the exclusive purpose of
implementing, administering and managing the Plan (“Data”).



     The Award Recipient understands that Data will be transferred to The Bank of New York or such
other stock plan service provider as may be selected by the Company in the future, which is
assisting the Company with the implementation, administration and management of the Plan. The
Award Recipient understands that the recipients of the Data may be located in the United States or
elsewhere, and that the recipients’ country (e.g., the United States) may have different data
privacy laws and protections than the Award Recipient’s country. The Award Recipient understands
that the Award Recipient may request a list with the names and addresses of any potential
recipients of the Data by contacting the Award Recipient’s local human resources representative.
The Award Recipient authorizes the Company, The Bank of New York and any other possible recipients
which may assist the Company (presently or in the future) with implementing, administering and
managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other
form, for the sole purpose of implementing, administering and managing the Award Recipient’s
participation in the Plan. The Award Recipient understands that Data will be held only as long as
is necessary to implement, administer and manage the Award Recipient’s participation in the Plan.
The Award Recipient understands that he/she may, at any time, view Data, request additional
information about the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting in writing the
Award Recipient’s local human resources representative. The Award Recipient understands, however,
that refusing or withdrawing his/her consent may affect the Award Recipient’s ability to
participate in the Plan. For more information on the consequences of the Award Recipient’s refusal
to consent or withdrawal of consent, the Award Recipient understands that he/she may contact
his/her local human resources representative.



     11. CHANGE IN CONTROL



     Under certain circumstances, if the Award Recipient’s employment with the Company or one of
its subsidiaries terminates during the three year period following a change in control of the
Company, this RSU Award may be deemed vested. Please refer to the Plan for more information.



     12. CHANGES IN CAPITALIZATION



     If prior to the expiration of the Restriction Period changes occur in the outstanding Common
Stock by reason of stock dividends, recapitalization, mergers, consolidations, stock splits,
combinations or exchanges of shares and the like, the number and class of shares subject to this
RSU Award shall be appropriately adjusted by the Committee, whose determination shall be
conclusive. If as a result of any adjustment under this paragraph any Award Recipient should
become entitled to a fractional share of stock, the Award Recipient shall have the right only to
the adjusted number of full shares and no payment or other adjustment will be made with respect to
the fractional share so disregarded.



Performance/3-year Vesting




5









 





     13. NOTICE



     Until the Award Recipient is advised otherwise by the Committee, all notices and other
correspondence with respect to this RSU Award will be effective upon receipt at the following
address:


Compensation and Management Development Committee of the Board of Directors of Zimmer Holdings, Inc.

Zimmer Holdings, Inc.

345 East Main Street

Post Office Box 708

Warsaw, Indiana 46581-0708

U.S.A.




     14. NO ADDITIONAL RIGHTS



     Except as explicitly provided in this agreement, this agreement will not confer any rights
upon the Award Recipient, including any right with respect to continuation of employment by the
Company or any of its subsidiaries or any right to future awards under the Plan. In no event shall
the value, at any time, of this agreement, the Common Stock covered by this agreement or any other
benefit provided under this agreement be included as compensation or earnings for purposes of any
other compensation, retirement, or benefit plan offered to employees of the Company or its
subsidiaries unless otherwise specifically provided for in such plan.



     15. BREACH OF RESTRICTIVE COVENANTS



     As a condition of receiving this RSU Award, the Award Recipient has entered into or reaffirmed
a non-solicitation and/or non-competition agreement with the Company. The Award Recipient
understands and agrees that if he or she violates any provision of such agreement, the Committee
may require the Award Recipient to forfeit his or her right to any unvested portion of the RSU
Award and, to the extent that any portion of the RSU Award has previously vested, the Committee may
require the Award Recipient to return to the Company the shares covered by the RSU Award or any
cash proceeds received by the Award Recipient upon the sale of such shares.



     16. CONSENT TO ELECTRONIC DELIVERY



     The Company may, in its sole discretion, decide to deliver any documents related to current or
future participation in the Plan by electronic means. The Award Recipient hereby consents to
receive such documents by electronic delivery and agrees to participate in the Plan through an
on-line or electronic system established and maintained by the Company or a third party designated
by the Company.



     17. CODE SECTION 409A COMPLIANCE



     To the extent applicable, it is intended that the Plan and this agreement comply with the
requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
and any related regulations or other guidance promulgated with respect to such Section by the U.S.
Department of the Treasury or the Internal Revenue Service. The RSUs granted in this RSU Award are
intended to be short-term deferrals exempt from Code Section 409A, but in the event that any
portion of this RSU Award constitutes deferred compensation within the meaning of Code Section
409A, then the issuance of Common Stock covered by an RSU award shall conform to the Code Section
409A standards, including, without limitation, the requirement that no payment on account of
separation from service will be made to any specified employee (within the meaning of Code Section
409A) until six months after the separation from service occurs, and the prohibition against
acceleration of vesting, which means that the Committee does not have the authority under Section
4(a) to waive the restrictions and accelerate vesting of this RSU Award in the event that any
portion of it constitutes deferred compensation within the meaning of Code Section 409A. Any
provision of the Plan or this agreement that would cause this RSU Award to fail to satisfy any
applicable requirement of Code Section 409A shall have no force or effect until amended to comply
with Code Section 409A, which amendment may be retroactive to the extent permitted by Code Section
409A.



     18. CONSTRUCTION AND INTERPRETATION



     The Board of Directors of the Company (the “Board”) and the Committee shall
have full authority and discretion, subject only to the express terms of the Plan, to decide all
matters relating to the administration and interpretation of the Plan and this agreement and all
such Board and Committee determinations shall be final, conclusive, and binding upon the Award
Recipient and all interested parties. The terms and conditions set forth in this agreement are
subject in all respects to the terms and conditions of the Plan, as amended from time to time,
which shall be controlling. This agreement contains the entire



Performance/3-year Vesting




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understanding of the parties and may not be modified or amended except in writing duly signed
by the parties. The waiver of, or failure to enforce, any provision of this agreement or the Plan
by the Company will not constitute a waiver by the Company of the same provision or right at any
other time or a waiver of any other provision or right. The various provisions of this agreement
are severable and any determination of invalidity or unenforceability of any provision shall have
no effect on the remaining provisions. This agreement will be binding upon and inure to the
benefit of the successors, assigns, and heirs of the respective parties. The validity and
construction of this agreement shall be governed by the laws of the State of Indiana, excluding any
conflicts or choice of law rule or principle that might otherwise refer construction or
interpretation of this agreement to the substantive law of another jurisdiction. If the Award
Recipient has received this agreement or any other document related to the Plan translated into a
language other than English and if meaning of the translated version is different from the English
version, the English version will control.




     19. SEVERABILITY



     In the event any provision of this agreement shall be held illegal or invalid for any reason,
the illegality or invalidity shall not affect the remaining provisions of this agreement, and this
agreement shall be construed and enforced as if such illegal or invalid provision had not been
included.



     20. ADDENDUM



     The Award Recipient’s RSU Award shall be subject to any special provisions set forth in the
Addendum to this agreement for the Award Recipient’s country, if any. If the Award Recipient
relocates to one of the countries included in the Addendum during the life of the RSU Award, the
special provisions for such country shall apply to the Award Recipient, to the extent the Company
determines that the application of such provisions is necessary or advisable in order to comply
with local law or facilitate the administration of the Plan. The Addendum, if any, constitutes
part of the RSU Award.




	21.	 	IMPOSITION OF OTHER REQUIREMENTS





     The Company reserves the right to impose other requirements on the Award Recipient’s
participation in the Plan, on the RSU Award and on any shares acquired under the Plan, to the
extent the Company determines it is necessary or advisable in order to comply with local law or
facilitate the administration of the Plan, and to require the Award Recipient to sign any
additional agreements or undertakings that may be necessary to accomplish the foregoing.



	 	 	 	 	 
	 	ZIMMER HOLDINGS, INC.

 	 
	 	By:  	
 	 
	 	 	Chad F. Phipps

Senior Vice President,


General Counsel and Secretary 	 
	 



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ANNEX A




PERFORMANCE CRITERIA





     The number of RSUs that may be earned with respect to the RSU Award shall be determined based
upon the Company’s adjusted earnings per share for the Performance Period. The number of Earned
RSUs expressed as a percentage of the maximum number of RSUs shall be determined by reference to
the following payout matrix:



	 	 	 	 	 	 	 
	Actual Performance as a Percentage of	 	Adjusted Earnings Per Share**	 	 
	Targeted Performance *	 	for the Performance Period	 	Percentage of Maximum Award Earned*
	Less than 85%

	 	Less than $[ ]       
	 	None

	 
	 	 	 	 	 	 
	Minimum 85%

	 	$[ ]       
	 	 	33.3	%
	 
	 	 	 	 	 	 
	Target 100%

	 	$[ ]       
	 	 	66.7	%
	 
	 	 	 	 	 	 
	Maximum 115%

	 	$[ ]       
	 	 	100.0	%








 




			
	*	 	Linear interpolations between specified percentages.
	 
	**	 	Adjusted earnings per share means earnings per diluted share adjusted to exclude the effects
of certain items or events that impact reported results during the Performance Period, as
approved by the Committee in accordance with Section 6 of the Plan.





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ANNEX B




	 	 	 	 	 
	Months Completed After Award Date	 	Percent of Earned RSUs Vested
	12

	 	 	0.000	%
	13

	 	 	2.778	%
	14

	 	 	5.556	%
	15

	 	 	8.333	%
	16

	 	 	11.111	%
	17

	 	 	13.889	%
	18

	 	 	16.667	%
	19

	 	 	19.444	%
	20

	 	 	22.222	%
	21

	 	 	25.000	%
	22

	 	 	27.778	%
	23

	 	 	30.556	%
	24

	 	 	33.333	%
	25

	 	 	36.111	%
	26

	 	 	38.889	%
	27

	 	 	41.667	%
	28

	 	 	44.444	%
	29

	 	 	47.222	%
	30

	 	 	50.000	%
	31

	 	 	52.778	%
	32

	 	 	55.556	%
	33

	 	 	58.333	%
	34

	 	 	61.111	%
	35

	 	 	63.889	%
	36

	 	 	66.667	%
	37

	 	 	69.444	%
	38

	 	 	72.222	%
	39

	 	 	75.000	%
	40

	 	 	77.778	%
	41

	 	 	80.556	%
	42

	 	 	83.333	%
	43

	 	 	86.111	%
	44

	 	 	88.889	%
	45

	 	 	91.667	%
	46

	 	 	94.444	%
	47

	 	 	97.222	%
	48

	 	 	100.000	%






Performance/3-year Vesting





9