exv10w36



 





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.



 









 





	 	 	 	 	 
	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.