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                                                                   Exhibit 10.18

                              ZIMMER HOLDINGS, INC.
                      EXECUTIVE PERFORMANCE INCENTIVE PLAN

      1. PURPOSE: The purpose of the Executive Performance Incentive Plan (the
"Plan") is to promote the interests of Zimmer Holdings, Inc. (the "Company") and
its stockholders by providing additional compensation as incentive to certain
key executives of the Company and its Subsidiaries and Affiliates who contribute
materially to the success of the Company and such Subsidiaries and Affiliates.

      2. DEFINITIONS: The following terms when used in the Plan shall, for the
purposes of the Plan, have the following meanings:

            (a) "Affiliate" shall mean any entity in which the Company has an
      ownership interest of at least 20%.

            (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

            (c) "Company" shall mean Zimmer Holdings, Inc., its Subsidiaries and
      Affiliates.

            (d) "Exchange Act" shall mean the Securities Exchange Act of 1934,
      as amended.

            (e) "Retirement" shall mean termination of the employment of an
      employee with the Company or a Subsidiary or Affiliate on or after

                  (i) the employee's 65th birthday or

                  (ii) the employee's 55th birthday having completed 10 years of
            service with the Company.

            (f) "Subsidiary" shall mean any corporation which at the time
      qualifies as a subsidiary of the Company under the definition of
      "subsidiary corporation" in Section 424 of the Code.

      3. ADMINISTRATION: The Plan shall be administered under the supervision of
the Board of Directors of the Company (the "Board") which shall exercise its
powers, to the extent herein provided, through the agency of a Compensation and
Management Development Committee (the "Committee") which shall be appointed by
the Board. The Committee shall consist of not less than three (3) members of the
Board who meet the definition of "outside directors" under the provisions of
Section 162(m) of the Code and the definition of "non-employee directors" under
the provisions of the Exchange Act or the regulations or rules promulgated
thereunder.

      The Committee, from time to time, may adopt rules and regulations
("Regulations") for carrying out the provisions and purposes of the Plan and
make such determinations, not inconsistent with the terms of the Plan, as the
Committee shall deem
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appropriate. The Committee may alter, amend or revoke any Regulation adopted.
The interpretation and construction of any provision of the Plan by the
Committee shall, unless otherwise determined by the Board, be final and
conclusive.

      The Committee may delegate its responsibilities for administering the Plan
to a committee of key executives as the Committee deems necessary. Any awards
under the Plan to members of this committee and to such other of the
Participants as may be determined from time to time by the Board or the
Committee shall be referred to the Committee or Board for approval. However, the
Committee may not delegate its responsibilities under the Plan relating to any
executive who is subject to the provisions of Section 162(m) of the Code or in
regard to the issuance of any stock under Section 6(c).

      4. PARTICIPATION: "Participants" in the Plan shall be such key executives
of the Company as may be designated by the Committee to participate in the Plan
with respect to each fiscal year.

      5. PERFORMANCE INCENTIVE AWARDS:

            (a) For each fiscal year of the Company, the Committee shall
      determine:

                  (i) The Company, Subsidiaries and/or Affiliates to participate
            in the Plan for such fiscal year.

                  (ii) The names of those key executives whom it considers
            should participate in the Plan for such fiscal year.

                  (iii) The basis(es) for determining the amount of the Awards
            to such Participants, including the extent, if any, to which payment
            of all or part of an Award will be dependent upon the attainment by
            the Company or any Subsidiary or Affiliate or subdivision thereof of
            any specified performance goal or objective. Performance criteria
            for Awards under the Plan may include one or more of the following
            operating performance measures:

                   a.  Earnings                 d.  Financial return ratios
                   b.  Revenue                  e.  Total Shareholder Return
                   c.  Operating or net cash    f.  Market share
                       flows

            g. For any Participant not subject to Section 162(m) of the Code,
      other performance measures or objectives, whether quantitative or
      qualitative, may be established.

The Committee shall establish the specific targets for the selected measures.
These targets may be set at a specific level or may be expressed as relative to
the comparable measure at comparison companies or a defined index.


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                  (iv) If a percentage of an Award shall be deferred or if a
            Participant may request the Committee to approve deferred payment of
            a percentage (not less than 25%) of an Award (the "Deferred
            Portion"). Any Award or portion of Award which the Committee does
            not require deferral of or the Participant does not request deferral
            of shall be paid subject to the provisions of Section 6 (the
            "Current Portion"). Any Award which includes a Deferred Portion
            shall be subject to the terms and conditions stated in Section 10
            and in any Regulations established by the Committee.

            (b) At any time after the commencement of a fiscal year for which
      Awards have been determined, but prior to the close thereof, the Committee
      may, in its discretion, eliminate or add Participants, or increase or
      decrease the Award of any Participant; but the Committee may not alter any
      election made relative to establishing a Deferred Portion of an Award. Any
      changes or additions with respect to Awards of members of any committee
      established to oversee the Plan shall be referred to the Board or
      Committee, as appropriate, for approval.

      6. PAYMENT OF CURRENT PORTION OF PERFORMANCE INCENTIVE AWARDS:

            (a) Subject to such forfeitures of Awards and other conditions as
      are provided in the Plan, the Awards made to Participants shall be paid to
      them or their beneficiaries as follows:

                  (i) As soon as practicable after the end of the fiscal year,
            the Committee shall determine the extent to which Awards have been
            earned on the basis of the actual performance in relation to the
            established performance objectives as established for that fiscal
            year. Such Awards are only payable to the extent that the
            Participant has performed their duties to the satisfaction of the
            Committee.

                  (ii) While no Participant has an enforceable right to receive
            a Current Portion until the end of the fiscal year as outlined in
            (i) above, payments on account of the Current Portion may be
            provisionally made in accordance with the Regulations, based on
            tentative estimates of the amount of the Award. A Participant shall
            be required to refund any portion or all of such payments in order
            that the total payments may not exceed the Current Portion as
            finally determined, or if the Participant shall forfeit their Award
            for any reason during the fiscal year.

            (b) There shall be deducted from all payments of Awards any taxes
      required to be withheld by any government entity and paid over to any such
      government in respect of any such payment. Unless otherwise elected by the
      Participant, such deductions shall be at the established withholding tax
      rate. Participants may elect to have the deduction of taxes cover the
      amount of any applicable tax (the amount of withholding tax plus the
      incremental amount


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      determined on the basis of the highest marginal tax rate applicable to
      such Participant).

            (c) Form of Payment. The Committee shall determine whether payment
      with respect to the Current Portion of an Award, or to the payment of a
      Deferred Portion made under the provisions of Section 10, shall be made
      entirely in cash, entirely in Common Stock of the Company, or partially in
      cash and partially in Common Stock. Further, if the Committee determines
      that payment should be made in the form of Restricted Shares of Common
      Stock of the Company, the Committee shall designate the restrictions which
      will be placed upon the Common Stock and the duration of those
      restrictions. For any fiscal year, the Committee may not cause Awards to
      be made under this provision which would result in the issuance, either on
      a current or restricted basis, of more than three-tenths of one percent of
      the number of shares of Common Stock of the Company issued and outstanding
      as of January 1 of the fiscal year relating to the payment.

      7. MAXIMUM PAYMENTS UNDER THE PLAN: Payments under the Plan shall be
subject to the following maximum levels.

            (a) Total Payments. The total amount of Awards paid under the Plan
      relating to fiscal year may not exceed two and one-half percent of the
      pretax earnings for the Company in that fiscal year.

            (b) Maximum Individual Award. The maximum amount which any
      individual Participant may receive relating to any fiscal year may not
      exceed 0.625 percent of the pretax earnings for the Company in that fiscal
      year.

      8. CONDITIONS IMPOSED ON PAYMENT OF AWARDS: Payment of each Award to a
Participant or to the Participant's beneficiary shall be subject to the
following provisions and conditions:

            (a) Rights to Awards. No Participant or any person claiming under or
      through the Participant shall have any right or interest, whether vested
      or otherwise, in the Plan or in any Award thereunder, contingent or
      otherwise, unless and until all of the terms, conditions and provisions of
      the Plan and the Regulations that effect such Participant or such other
      person shall have been complied with. Nothing contained in the Plan or in
      the Regulations shall require the Company to segregate or earmark any
      cash, shares or stock or other property. Neither the adoption of the Plan
      nor its operation shall in any way affect the rights and power of the
      Company or of any Subsidiary or Affiliate to dismiss and/or discharge any
      employee at any time.

            (b) Assignment or Pledge of Rights of Participant. No rights under
      the Plan, contingent or otherwise, shall be assignable or subject to any
      encumbrance, pledge or charge of any nature except that a Participant may
      designate a beneficiary pursuant to the provisions of Section 9 hereof.


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            (c) Rights to Payments. No absolute right to any Award shall be
      considered as having accrued to any Participant prior to the close of the
      fiscal year with respect to which an Award is made and then such right
      shall be absolute only with respect to any Current Portion thereof; the
      Deferred Portion will continue to be forfeitable and subject to all of the
      conditions of the Plan. No Participant shall have any enforceable right to
      receive any Award made with respect to a fiscal year or to retain any
      payment made with respect thereto if for any reason (death included) the
      Participant, during such entire fiscal year, has not performed their
      duties to the satisfaction of the Company.

      9. DESIGNATION OF BENEFICIARY: A Participant may name a beneficiary to
receive any payment to which the Participant may be entitled under the Plan in
the event of their death, on a form to be provided by the Committee. A
Participant may change their beneficiary from time to time in the same manner.

      If no designated beneficiary is living on the date on which any payment
becomes payable to a Participant's beneficiary, such payment will be payable to
the person or persons in the first of the following classes of successive
preference:

            (a)   Widow or Widower, if then living
            (b)   Surviving children, equally
            (c)   Surviving parents, equally
            (d)   Surviving brothers and sisters, equally
            (e)   Executors or administrators

and the term "beneficiary" as used in the Plan shall include such person or
persons.

      10. DEFERRAL OF PAYMENTS: Any portion of an Award deemed the Deferred
Portion under Section 5(a)(iv) shall be subject to the following:

            (a) The Committee will, in its sole discretion, determine whether or
      not a Deferred Portion may be elected by the Participant under an Award or
      if a Deferred Portion shall be required. If a Deferred Portion election is
      permitted for an Award, the Committee will establish guidelines regarding
      the date by which such deferral election by the Participant must be made
      in order to be effective.

            (b) Concurrent with the establishment of a Deferred Portion for any
      Award, the Participant shall determine, subject to the approval of the
      Committee, thc portion of any Participant's Deferred Portion that is to be
      valued by reference to the Performance Incentive Fixed Income Fund
      (hereinafter referred to as the "Fixed Income Fund"), the portion that is
      to be valued by reference to the Performance Incentive Equity Fund
      (hereinafter referred to as the "Equity Fund"), the portion that is to be
      valued by reference to the Performance Incentive Company Stock Fund
      (hereinafter referred to as the "Stock Fund") and the portion that shall
      be valued by reference to any other fund(s) which may be established by
      the Committee for this purpose.


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            (c) Prior to the beginning of each fiscal year, the Committee shall
      determine if the Fund(s) used to value the account of any Participant may
      be changed from the Fund currently used to any other Fund established for
      use under this Plan. Any such determination relating to an individual who
      is making determinations under this subsection (c), shall be referred to
      the Board (or such Committee of the Board as may be designated by the
      Board) for approval.

            (d) Payment of the total amount of a Participant's Deferred Portions
      shall be made to the Participant, or, in case of the death of the
      Participant prior to the commencement of payments on account of such total
      amount, to the Participant's beneficiary, in installments commencing as
      soon as practical after the Participant shall cease, by reason of death or
      otherwise, to be an employee of the Company, in case of the death of any
      Participant after the commencement payments on account of the total of the
      Deferred Portions, the then remaining unpaid balance thereof shall
      continue to be paid in installments, at such times and in such manner as
      if such Participant were living, to the beneficiary(ies) of the
      Participant. However, the Committee shall possess absolute discretion to
      accelerate the time of payment of any remaining unpaid balance of the
      Deferred Portions to any extent that it shall deem equitable and desirable
      under circumstances where the Participant at the time of payment shall no
      longer be an employee of the Company or shall have died.

            (e) CONDUCT OF PARTICIPANT FOLLOWING TERMINATION OF EMPLOYMENT. If,
      following date on which a Participant shall cease to be an employee of the
      Company, the Participant shall at any time either discloses to
      unauthorized persons confidential information relative to thc business of
      any of the Company or otherwise act or conduct themselves in a manner
      which the Committee shall determine is inimical or contrary to the best
      interest of the Company, the Company's obligation to make any further
      payment on account of the Deferred Portions of such Participant shall
      forthwith terminate.

            (f) ASSIGNMENT OF RIGHTS BY PARTICIPANT OR BENEFICIARY. If any
      Participant or beneficiary of a Participant shall attempt to assign their
      rights under the Plan in violation of the provisions thereof, the
      Company's obligation to make any further payments to such Participant or
      beneficiary shall forthwith terminate.

            (g) DETERMINATION OF BREACH OF CONDITIONS. The determination of the
      Committee as to whether an event has occurred resulting in a forfeiture or
      a termination or reduction of the Company's obligation in accordance with
      the foregoing provisions of this paragraph 10 shall be conclusive.

            (h) FUND COMPOSITION AND VALUATION. Deferred Portions of Awards
      under the Plan shall be valued and maintained as follows:

                  (i) In accordance with the provisions, and subject to the
            conditions, of the Plan and the Regulations, the Deferred Portion as
            established by the Committee shall be valued in reference to the


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            Participant's account(s) in the Equity Fund, in the Fixed Income
            Fund, in the Company Stock Fund, and in any other Fund established
            under this Plan. Account balances shall be maintained as dollar
            values, units or share equivalents as appropriate based upon the
            nature of the fund. For unit or share-based funds, the number of
            units or shares credited shall be based upon the established unit or
            share value as of the last day of the quarter preceding the
            crediting of the Deferred Portion.

                  (ii) Investment income credited to Participant's accounts
            under the Fixed Income Fund shall be determined by the Committee
            based upon the prevailing rates of return experienced by the
            Company. The investment income credited to participants under the
            Equity Fund shall be established based upon an established market
            index reflecting the rate of return on equity investments. The
            Company shall advise Participants of the specific measures used and
            the current valuations of these Funds as appropriate to facilitate
            deferral decisions, investment choices and to communicate payout
            levels. The Company Stock Fund shall consist of units valued as one
            share of Common Stock of the Company (par value $.01).

                  (iii) Nothing contained in the Fund definitions in
            subparagraphs 10(h)(i) and 10(h)(ii) above shall require the Company
            to segregate or earmark any cash, shares, stock or other property to
            determine Fund values or maintain Participant account levels.

                  (iv) ALTERNATIVE FUNDS. The establishment of the "Fixed Income
            Fund", the "Equity Fund" and the "Stock Fund" as detailed in
            subparagraphs (i) and (ii) of this paragraph shall not preclude the
            right of the Committee to direct the establishment of additional
            investment funds ("Funds").

In establishing such funds, the Committee shall determine the criteria to be
used for determining the value of such Funds.

                  (i) ACCELERATED DISTRIBUTIONS. The Committee may, at its sole
            discretion, allow for the early payment of a Participant's Deferred
            Portion(s) in the event of an "unforeseeable emergency". An
            "unforeseeable emergency" is defined as an unanticipated emergency
            caused by an event beyond the control of the Participant that would
            result in severe financial hardship if the distribution were not
            permitted. Such distributions shall be limited to the amount
            necessary to sufficiently address the financial hardship. Any
            distributions under this provision shall be consistent with all
            rules and regulations established under the Code.

      11. MISCELLANEOUS:

            (a) By accepting any benefits under the Plan, each Participant and
      each person claiming under or through him shall be conclusively deemed to
      have


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      indicated acceptance and ratification of, and consent to, any action taken
      or made to be taken or made under the Plan by the Company, the Board, the
      Committee or any other committee appointed by the Board.

            (b) Any action taken or decision made by the Company, the Board, the
      Committee, or any other committee appointed by the Board arising out of or
      in connection with the construction, administration, interpretation or
      effect of the Plan or of the Regulations shall lie within its absolute
      discretion, as the case may be, and shall be conclusive and binding upon
      all Participants and all persons claiming under or through any
      Participation.

            (c) No member of the Board, the Committee, or any other committee
      appointed by the Board shall be liable for any act or failure to act of
      any other member, or of any officer, agent or employee of such Board or
      Committee, as the case may be, or for any act or failure to act, except on
      account of their own acts done in bad faith. The fact that a member of the
      Board shall then be, shall theretofore have been or thereafter may be a
      Participant in the Plan shall not disqualify them from voting at any time
      as a director with regard to any matter concerning the Awards, or in favor
      of or against any amendment or alteration of the Plan, provided that such
      amendment or alteration shall provide no benefit for directors as such and
      provided that such amendment or alteration shall be of general
      application.

            (d) The Board, the Committee, or any other committee appointed by
      the Board may rely upon any information supplied to them by any officer of
      the Company or any Subsidiary and may rely upon the advice of counsel in
      connection with the administration of the Plan and shall be fully
      protected in relying upon information or advice.

            (e) Notwithstanding anything to the contrary in the Plan, neither
      the Board nor the Committee shall have any authority to take any action
      under the Plan where such action would affect the Company's ability to
      account for any business combination as a "pooling of interests."

      12. AMENDMENT OR DISCONTINUANCE: The Board may alter, amend, suspend or
discontinue the Plan, but may not, without approval of the holders of a majority
of the Company's Common Stock ($0.01 par value) make any alteration or amendment
thereof which would permit the total payments under the Plan for any year to
exceed the limitations provided in paragraph 7 hereof or to allow for the
issuance of Company Common Stock in excess of the limitation provided in
paragraph 6(c).

      13. EFFECTIVE DATE: The Plan will be effective on _____________________ .


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