Document:

EX-10.16

Exhibit 10.16

RESTATED

BENEFIT EQUALIZATION PLAN

OF

ZIMMER HOLDINGS, INC. AND ITS SUBSIDIARY OR

AFFILIATED CORPORATIONS PARTICIPATING IN THE

ZIMMER HOLDINGS, INC. SAVINGS AND INVESTMENT PROGRAM

(Restated as of January 1, 2005)

INTRODUCTION

          This Restated Benefit Equalization Plan of Zimmer Holdings, Inc. and its Subsidiary or
Affiliated Corporations Participating in the Zimmer Holdings, Inc. Savings and Investment Program,
originally effective as of August 6, 2001 and restated, effective January 1, 2005, was established
to allow eligible executives of the Company to defer receipt of portions of their base salary. The
Plan is unfunded and is maintained by Zimmer primarily for the purpose of providing deferred
compensation for a select group of management or highly-compensated employees.

          The terms of this restated Plan shall govern and only apply to amounts deferred or vested on
or after January 1, 2005. Any amounts deferred and vested prior to January 1, 2005, as adjusted
for earnings and losses, shall be deemed “grandfathered,” and subject to the terms of the Plan in
effect on October 3, 2004.

ARTICLE 1.

DEFINITIONS

	 	1.1.	 	“Account” shall mean the bookkeeping account maintained for each
Participant to record his Salary Deferrals under this Plan, and the amount of any
Employer Contributions, as adjusted pursuant to Article 5.
	 
	 	1.2.	 	“Administrator” shall mean the Committee.
	 
	 	1.3.	 	“Affiliated Company” shall mean any company or corporation directly or
indirectly controlled by Zimmer.
	 
	 	1.4.	 	“Board” shall mean the board of directors of Zimmer Holdings, Inc.
	 
	 	1.5.	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
	 
	 	1.6.	 	“Committee” shall mean the Benefits Committee of Zimmer Holdings, Inc.
	 
	 	1.7.	 	“Company” shall mean Zimmer and its Affiliated Companies.

 

 

	 	1.8.	 	“Compensation” shall mean the base compensation payable to an Eligible
Executive, including any amount deferred under this Plan, the Program or any cafeteria
plan subject to Section 125 of the Code.
	 
	 	1.9.	 	“Effective Date” shall mean, for this restatement, January 1, 2005, or,
with respect to the Eligible Executives of a company or corporation that adopts the
Plan, the date such company or corporation becomes a Participating Company.
	 
	 	1.10.	 	“Eligible Executive” shall mean an employee of a Participating Company
whose Compensation will exceed the limit imposed by Code Section 401(a)(17) in a Plan
Year.
	 
	 	1.11.	 	“Employment Termination” shall mean, with respect to a Participant,
the termination of the Participant’s employment for any reason by the Company,
provided, however, that no event shall constitute an “Employment Termination” under
this Plan if it does not constitute a “separation from service” within the meaning of
Code Section 409A(a)(2)(A)(i).
	 
	 	1.12.	 	“Employer Contribution” means the amount credited to a Participant’s
Account under Article 4.
	 
	 	1.13.	 	“Participant” shall mean, except as otherwise provided in Article 2,
each Eligible Executive who has executed a Salary Deferral Agreement as described in
Section 2.1, or is eligible for an Employer Contribution under Article 4. An Eligible
Executive may not become a Participant in the Plan before January 1st of the year
immediately following the year he becomes an Eligible Executive.
	 
	 	1.14.	 	“Participating Company” shall mean Zimmer and any company or
corporation directly or indirectly controlled by Zimmer that the Board designates for
participation in the Plan in accordance with Section 8.5(b).
	 
	 	1.15.	 	“Plan” shall mean the Restated Benefit Equalization Plan of Zimmer
Holdings, Inc. and its Subsidiary or Affiliated Corporations Participating in the
Zimmer Holdings, Inc. Savings and Investment Program, as amended from time to time.
	 
	 	1.16.	 	“Plan Year” shall mean the calendar year.
	 
	 	1.17.	 	“Program” shall mean the Zimmer Holdings, Inc. Savings and Investment
Program or the Zimmer Puerto Rico Savings and Investment Program, as applicable.
	 
	 	1.18.	 	“Salary Deferral” shall mean the amounts credited to a Participant’s
Account under Section 3.3.
	 
	 	1.19.	 	“Salary Deferral Agreement” shall mean a completed agreement between
an Eligible Executive and a Participating Company of which he is an employee under
which the Eligible Executive agrees to make Salary Deferrals under the

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	 	 	 	Plan in accordance with the salary deferral program described in Article 3. The
Salary Deferral Agreement shall be on a form prescribed by the Administrator.
	 
	 	1.20.	 	“Section 409A Standards” shall have the meaning ascribed to that term
in Section 8.7.
	 
	 	1.21.	 	“Unforeseeable Emergency” shall mean a severe financial hardship as
defined in Section 6.3.
	 
	 	1.22.	 	“Valuation Date” shall mean each business day on which the securities
markets in the United States are open for trading.
	 
	 	1.23.	 	“Zimmer” means Zimmer Holdings, Inc.

ARTICLE 2.

PARTICIPATION AND SALARY DEFERRAL AGREEMENTS

	 	2.1.	 	In General.

	 	(a)	 	An Eligible Executive shall become a Participant as of the date
he files his initial Salary Deferral Agreement with the Administrator, or
becomes eligible for an Employer Contribution under Section 4.2. However, such
Salary Deferral Agreement shall be effective for purposes of making Salary
Deferrals only as provided in Article 3.
	 
	 	(b)	 	A Salary Deferral Agreement shall be in writing and properly
completed on a form approved by the Administrator, which shall be the sole
judge of the proper completion thereof. Except as provided in Section 3, such
Agreement shall provide for the deferral of Salary Deferrals, and may include
such other provisions as the Administrator deems appropriate. A Salary
Deferral Agreement “election” shall not be revoked or modified except pursuant
to Section 2.2 or Section 6.3.
	 
	 	(c)	 	As a condition of participation the Administrator may require
such other information as it deems appropriate.

	 	2.2.	 	Modification of Salary Deferral Agreement. A Participant may suspend
his Salary Deferrals for a Plan Year prior to the beginning of that Plan Year or during
a Plan Year on account of an Unforeseeable Emergency.
	 
	 	2.3.	 	Employment Termination: Re-employment.

	 	(a)	 	A Participant’s Salary Deferrals shall cease upon a
Participant’s Employment Termination.

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	 	(b)	 	Upon re-employment as an Eligible Executive, a former
Participant may become a Participant again by executing a Salary Deferral
Agreement under Section 2.1 for the next Plan Year.

ARTICLE 3.

SALARY DEFERRAL PROGRAM

	 	3.1.	 	Filing Requirements.

	 	(a)	 	An individual who becomes an Eligible Executive on or after the
Effective Date may file a Salary Deferral Agreement with the Administrator, to
be effective as of the first day of the next Plan Year, in such manner as the
Administrator may prescribe.
	 
	 	(b)	 	An Eligible Executive who does not file a Salary Deferral
Agreement with the Administrator as provided in Section 3.1(a) may file a
Salary Deferral Agreement during the last month of any Plan Year, to be
effective as of the first day of the next Plan Year.

	 	3.2.	 	Salary Deferral Agreement. An Eligible Executive’s Salary Deferral
Agreement shall authorize a reduction in his Compensation with respect to his Salary
Deferrals under the Plan. The Salary Deferral Agreement shall be effective for and
apply to pay periods on or after both (a) the later of (i) the Effective Date; or
(ii) the first day of the next Plan Year, and (b) the date the Eligible Executive’s
Compensation for the applicable Plan Year exceeds the limit set forth in Code Section
401(a)(17), as adjusted.
	 
	 	3.3.	 	Amount of Salary Deferrals. Effective as soon as practicable after
each pay date following the effective date of an Eligible Executive’s Salary Deferral
Agreement, his Accounts shall be credited with an amount of Salary Deferral, if any,
for each pay period, as set forth in his Salary Deferral Agreement. Participants may
elect to defer a whole percentage of their base salary ranging from 1% to 30%.
	 
	 	3.4.	 	Changing Salary Deferrals.

	 	(a)	 	An Eligible Executive’s election on his Salary Deferral
Agreement of the rate at which he authorizes Salary Deferrals under the Plan
shall remain in effect in subsequent Plan Years unless he files with the
Administrator an amendment to his Salary Deferral Agreement modifying or
revoking such election. The amendment shall be filed by the last day of the
Plan Year and shall be effective for pay periods on or after the first day of
the next Plan Year.
	 
	 	(b)	 	Notwithstanding Section 3.4(a), an Eligible Executive may, in
the event of an Unforeseeable Emergency, request a suspension of his Salary
Deferrals under the Plan. The request shall be made in a time and manner
determined by the Administrator, and shall be effective as of such date as

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	 	 	 	the Administrator prescribes and throughout the remainder of that Plan Year.
The Eligible Executive may apply to the Administrator to resume his Salary
Deferrals for subsequent Plan Years.

ARTICLE 4.

EMPLOYER CONTRIBUTIONS

	 	4.1.	 	Matching Contribution. A Participant’s Account shall be credited an
Employer Contribution in an amount equal to the sum that would have been contributed on
such Participant’s behalf as a matching contribution for such Plan Year to the Program
had the amount of the Participant’s Salary Deferrals under this Plan instead been
credited to the Program, and based upon his Compensation defined by this Plan.
	 
	 	4.2.	 	Fixed Contributions. A Participant’s Account shall also be credited
with the amount of fixed contribution the Company would have made under the Program on
behalf of the Participant, if any, for the Plan Year had the Participant’s Compensation
for the Plan Year not been limited by Section 401(a)(17) of the Code.
	 
	 	4.3.	 	Vesting. Employer Contributions shall be vested in the same percentage
as the Participant is vested under the Program.

ARTICLE 5.

MAINTENANCE OF ACCOUNTS

	 	5.1.	 	Accounts Generally.

	 	The Administrator shall credit Salary Deferrals and Employer Contributions to an
Account, which shall be a bookkeeping entry, adjusted for earnings or losses,
pursuant to Section 5.2.

	 	5.2.	 	Adjustment of Account for Earnings/Losses.

	 	(a)	 	As of each Valuation Date, a Participant’s Account shall be
credited or debited with the amount of earnings or losses with which such
Account would have been credited or debited, assuming it had been invested in
one or more investment funds, or earned the rate of return of one or more
indices of investment performance based on those funds offered under the
Program, excluding the Zimmer stock fund, as amended from time to time, and
elected by the Participant or former Participant, for purposes of measuring the
investment performance of his Account.
	 
	 	(b)	 	The designation of any such investment funds or indices shall
not require the Company to invest or earmark its general assets in any specific
manner.

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	 	5.3.	 	Investment Performance Elections. Each Participant and, if applicable,
former Participant, shall file an initial investment election with the Administrator
with respect to the investment of his Account within such time period and on such
written form or identity-secured internet or telephonic means as the Administrator may
prescribe. The election shall designate the investment fund or funds or index or
indices of investment performance which shall be used to measure the investment
performance of the Participant’s Account.
	 
	 	5.4.	 	Changing Investment Elections. As of any Valuation Date, a Participant
may change his election in Section 5.3 with respect to his future Salary Deferrals or
may reallocate the current balance of his Account, thereby changing the investment fund
or funds or index or indices of investment performance used to measure the future
investment performance of his existing Account balance, by filing an appropriate
written form or through identity-secured internet or telephonic means as approved by
the Administrator from time to time.
	 
	 	5.5.	 	Individual Account Records. The Administrator shall maintain, or cause
to be maintained, records showing the individual balances of each Participant’s
Account. At least once a year, each Participant and, if applicable, former Participant
shall be furnished with a statement setting forth the value of his Account.
	 
	 	5.6.	 	Default Investment. The Committee shall designate a default investment
option for Participants who do not file investment elections under this Article 5.

ARTICLE 6.

PAYMENT OF BENEFITS

	 	6.1.	 	Commencement of Payment.

	 	(a)	 	The vested portion of a Participant’s Account shall be
distributed on (or, in the case of installments, commencing on) the first
business day of the first calendar month that begins six (6) months after the
Participant’s Employment Termination.
	 
	 	(b)	 	With respect to any amounts credited to a Participant’s Account
on or after January 1, 2009, the vested portion of the Account shall be
distributed in a single lump sum payment.
	 
	 	(c)	 	With respect to any deferral that is subject to the
Section 409A Standards and was credited to the Participant’s Account before
January 1, 2009, the vested amount shall be distributed, in cash, either in a
lump sum or in annual installments over a specified period, not to exceed
fifteen (15) years, as elected by the Participant under the Salary Deferral
Agreement. To be valid and effective, a Participant’s distribution election
must either be a transition election made in accordance with the following
sentence, or it must have been made prior to 2009 (in accordance with the

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	 	 	 	Section 409A Standards then in effect), and the Participant must retire from
the Company on or after age fifty-five (55) with at least ten (10) years of
service. Service shall include all service with the Company affiliates is
included in definition of “Company” and acquired companies. If such an
election has not been made or is not effective, the Participant’s Account
shall be distributed in a lump sum.

	 	6.2.	 	Reserved.

	 	6.3.	 	Unforeseeable Emergency Withdrawal.

	 	(a)	 	While employed by the Participating Companies, a Participant or
former Participant may, in the event of an Unforeseeable Emergency, as defined
below, request a withdrawal from his Account. The request shall be made in a
time and manner determined by the Administrator, shall not be for a greater
amount than the amount reasonably needed to satisfy the emergency need, plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, and shall be subject to approval by the Administrator.
	 
	 	(b)	 	Unforeseeable Emergency shall be determined by the
Administrator in its sole discretion, and shall mean severe financial hardship
to the Participant resulting from a sudden and unexpected illness or accident
of the Participant, the Participant’s spouse, or of a dependent (as defined in
Section 152(a) of the Code), loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant. The
circumstances that will constitute an Unforeseeable Emergency will depend upon
the facts of each case, but, in any case, payment may not be made to the extent
that such hardship is or may he relieved:

	 	(i)	 	Through reimbursement or compensation by
insurance or otherwise; or
	 
	 	(ii)	 	By liquidation of the Participant’s assets, to
the extent the liquidation of such assets would not itself cause severe
financial hardship.

	 	Examples of circumstances not considered to be Unforeseeable Emergencies include
the need to pay college tuition or purchase a home. Any decision shall be made in
accordance with Section 409A Standards.

	 	6.4.	 	Designation of Beneficiary. A Participant or former Participant may,
in a time and manner determined by the Administrator, designate a beneficiary and one
or more contingent beneficiaries (which may include the Participant’s or former
Participant’s estate) to receive any benefits which may be payable under this Plan upon
his death. If the Participant or former Participant fails to designate a beneficiary
or contingent beneficiary, or if the beneficiary and the contingent

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	 	 	 	beneficiaries fail to survive the Participant or former Participant, such benefits
shall be paid to the Participant’s or former Participant’s estate. A Participant or
former Participant may revoke or change any designation made under this Section 6.4
in a time and manner determined by the Administrator.
	 
	 	6.5.	 	Status of Account Pending Distribution. Pending distribution, a former
Participant’s Account shall continue to be credited with earnings and losses as
provided in Section 5.2 The former Participant shall be entitled to change his
investment elections under Section 5.3 or apply for hardship withdrawals under Section
6.3 to the same extent as if he were a Participant of the Plan.
	 
	 	6.6.	 	Installments and Withdrawals Pro-Rata. In the event of an
Unforeseeable Emergency withdrawal, such payment or withdrawal shall be made on a
pro-rata basis from the portions of the Participant’s or former Participant’s existing
Account balance that are subject to different measures of investment performance.

ARTICLE 7.

AMENDMENT OR TERMINATION

	 	7.1.	 	Right to Terminate. The Board may, in its sole discretion, terminate
this Plan and the related Salary Deferral Agreements at any time. To the extent
consistent with Section 8.7, each Participant, former Participant and beneficiary
shall, in that event, receive a single lump sum payment equal to the balance of his
Account. In that event, the single lump sum payment shall be made as soon as
practicable following the date the Plan is terminated and shall be in lieu of any other
benefit which may be payable to the Participant, former Participant or beneficiary
under this Plan. To the extent such single lump sum payments would violate Section
8.7, those benefits shall be paid at the time and in the manner that they would have
been paid had the Plan not terminated.
	 
	 	7.2.	 	Right to Amend. The Board may, in its sole discretion, amend this Plan
and the related Salary Deferral Agreements on thirty (30) days’ prior notice to the
Participants and, where applicable, former Participants. If any amendment to this Plan
or to the Salary Deferral Agreements shall adversely affect the rights of a Participant
or former Participant, such individual must consent in writing to such amendment prior
to its effective date. Notwithstanding the foregoing, the change in any investment
funds or investment index under Section 5.3 or Section 5.4 or the restriction of future
Salary Deferrals under the salary deferral program shall not be deemed to adversely
affect any Participant’s or former Participant’s rights.
	 
	 	7.3.	 	Uniform Action. Notwithstanding anything in the Plan to the contrary,
any action to amend or terminate the Plan or the Salary Deferral Agreements must be
taken in a uniform and nondiscriminatory manner.

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ARTICLE 8.

GENERAL PROVISIONS

	 	8.1.	 	No Funding. Nothing contained in this Plan or in a Salary Deferral
Agreement shall cause this Plan to be a funded retirement plan. Neither a Participant,
former Participant, his beneficiary, contingent beneficiaries, heirs or personal
representatives shall have any right, title or interest in or to any funds of the Trust
or the Company on account of this Plan or on account of having completed a Salary
Deferral Agreement. The assets held in any Trust shall be subject to the claims of
creditors of Zimmer. Each Participant or former Participant shall have the status of a
general unsecured creditor of the Company, and this Plan constitutes a mere promise by
the Company to make benefit payments in the future.
	 
	 	8.2.	 	No Contract of Employment. The existence of this Plan or of a Salary
Deferral Agreement does not constitute a contract for continued employment between an
Eligible Executive or a Participant and the Company. The Company reserves the right to
modify an Eligible Executive’s or Participant’s remuneration and to terminate an
Eligible Executive or a Participant for any reason and at any time, notwithstanding the
existence of this Plan or of a Salary Deferral Agreement.
	 
	 	8.3.	 	Withholding Taxes. All payments under this Plan and all amounts
credited to Accounts hereunder shall be net (unless withholdings are, with the
Administrator’s consent, netted from other income) of an amount sufficient to satisfy
any federal, state or local income and employment tax withholding requirements.
	 
	 	8.4.	 	Non-alienation. The right to receive any benefit under this Plan may
not be transferred, assigned, pledged or encumbered by a Participant, former
Participant, beneficiary or contingent beneficiary in any manner and any attempt to do
so shall be void. No such benefit shall be subject to garnishment, attachment or other
legal or equitable process without the prior written consent of the Company.
	 
	 	8.5.	 	Administration.

	 	(a)	 	This Plan shall be administered by the Committee. Certain
administrative functions, as set forth in the Plan, shall be the responsibility
of the Administrator. The Committee shall interpret the Plan with
discretionary authority, establish regulations to further the purposes of the
Plan and take any other action necessary to the proper operation of the Plan in
accordance with guidelines established by the Committee or, if there are no
such guidelines, consistent with furthering the purpose of the Plan.
	 
	 	(b)	 	The Board, in its sole discretion and upon such terms as it may
prescribe, may permit any company or corporation directly or indirectly
controlled by Zimmer to participate in the Plan.

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	 	(c)	 	Prior to paying any benefit under this Plan, the Administrator
or the Committee may require the Participant, former Participant, beneficiary
or contingent beneficiary to provide such information or material as they, in
their sole discretion, shall deem necessary for it to make any determination it
may be required to make under this Plan. The Committee or Administrator may
withhold payment of any benefit under this Plan until it receives all such
information and material and is reasonably satisfied of its correctness and
genuineness.
	 
	 	(d)	 	Subject to applicable law, any interpretation of the provisions
of the Plan and any decision on any matter within the discretion of the
Committee made by the Committee in good faith shall be binding on all persons.
A misstatement or other mistake of fact shall be corrected when it becomes
known, and the Committee shall make such adjustment on account thereof as the
Committee considers equitable and practicable.
	 
	 	(e)	 	If a claim for benefits made by a Participant or his
beneficiary is denied, the Administrator shall within ninety (90) days (or one
hundred eighty (180) days if special circumstances require an extension of
time) after the claim is made furnish the person making the claim with a
written notice specifying the reasons for the denial. Such notice shall also
refer to the pertinent Plan provisions on which the denial is based, describe
any additional material or information necessary for properly completing the
claim and explain why such material or information is necessary, and explain
the Plan’s claim review procedures. If requested in writing, the Committee
shall afford each claimant whose claim has been denied a full and fair review
of the Administrator’s decision and, within sixty (60) days (one hundred twenty
(120) days if special circumstances require additional time) of the request for
reconsideration of the denied claim, the Committee shall notify the claimant in
writing of the Committee’s final decision.

	 	8.6.	 	Construction.

	 	(a)	 	The Plan is intended to constitute an unfunded deferred
compensation arrangement for a select group of management or highly compensated
employees and all rights hereunder shall, to the extent not preempted by
federal law, be governed by and construed in accordance with the laws of the
State of Indiana without giving effect to applicable principles of conflicts of
law to the extent that the application of the law of another jurisdiction would
be required thereby.
	 
	 	(b)	 	The masculine pronoun shall mean the feminine wherever
appropriate.
	 
	 	(c)	 	The captions in this Plan document are inserted as a matter of
convenience and shall not affect the construction of the Plan.

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	 	8.7.	 	Code Section 409A Standards. This Plan, and all Salary Deferral
Agreements pursuant to this Plan, shall be effected, interpreted, and applied in a
manner consistent with the standards for nonqualified deferred compensation plans
established by Code Section 409A and its interpretive regulations (the “Section 409A
Standards”). To the extent that any terms of the Plan or a Salary Deferral Agreement
would subject any Participant to gross income inclusion, interest, or additional tax
pursuant to Code Section 409A, those terms are to that extent superseded by the
applicable Section 409A Standards. Although the Company intends to administer this
Plan in accordance with Section 409A, the Company makes no guarantee of the tax
consequences of participating in this Plan and shall not be liable for income tax,
interest or penalties assessed against a Participant for any reason.

              Zimmer Holdings, Inc. has caused this Restated Benefit Equalization Plan of Zimmer Holdings,
Inc. and its Subsidiary or Affiliated Corporations participating in the Zimmer Holdings, Inc.
Savings and Investment Program to be signed by its duly authorized officers this
13th day of December, 2008.

	 	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Renee P. Rogers
 

	 	 
	 

	 	 	 	     Renee P. Rogers	 	 
	 

	 	 	 	     Vice President, Global Human Resources	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ James T. Crines
 

	 	 
	 

	 	 	 	     James T. Crines	 	 
	 

	 	 	 	     Executive Vice President, Finance and	 	 
	 

	 	 	 	     Chief Financial Officer	 	 

11EX-10.17

Exhibit 10.17

RESTATED

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

(Restated as of January 1, 2009)

     This Restated 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 (the “Plan”) is hereby adopted by Zimmer Holdings, Inc.
(the “Company”), effective as of January 1, 2009.

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 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 the Employee Retirement Income Security
Act of 1974, as amended (“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. Capitalized terms not expressly defined in this document shall have the meanings given
to them in the applicable Retirement Plan.

     This Plan is a successor plan to the Benefit Equalization Plan of Bristol-Myers Squibb Company
and Its Subsidiary or Affiliated Corporations Participating in the Bristol-Myers Squibb Company
Retirement Income Plan or the Bristol-Myers Squibb Company Puerto Rico, Inc. Retirement Income
Plan, as in effect on January 1, 1996 and as amended thereafter (the “Prior 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 the Company, the sponsor of this Plan or any other
Participating Employer. Each participant under this Plan shall be entitled to a benefit that will
be reduced by the value of the benefit to which the participant is entitled under the Prior Plan.

 

 

II. Administration of the Plan

     The Zimmer Holdings, Inc. 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 discretionary authority to determine all questions arising in connection
with the Plan, including its interpretation, may adopt procedural rules, and may employ and rely on
legal counsel, actuaries, accountants and 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.

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”).

     Notwithstanding the foregoing, any member of the Retirement Plans hired or rehired after
September 2, 2002, shall not be eligible to participate or be entitled to benefits under this 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 (l) 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 that were elected to be deferred under the Zimmer
Holdings, Inc. Savings and Investment Program (“Savings and Investment Program”) but that, due to
Section 415 limitations, were credited, in accordance with the participant’s election, 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

2

 

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 that were elected to be
deferred under the Savings and Investment Program but that, due to Section 401(a)(17) limitations,
were credited, in accordance with the participant’s election, 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 the same as the prior year’s earned performance
incentive award.

     C. Each participant in this Plan in grade levels Z07 and above or his beneficiaries 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 to which the
participant is entitled under the Prior Plan, and shall be payable to the participant (or his
beneficiary) as set forth below.

     E.

          (1) Subject to the terms of this Plan, as amended from time to time, for purposes of
calculating the pension benefits of Jon E. Kramer (“Kramer”) under Paragraphs IV.A through
C, Kramer will be entitled to receive a supplemental pension benefit under this Plan
determined as if (a) Kramer was entitled to the Retirement Income Plan’s early retirement
subsidies when he commenced his Retirement Income Plan benefits on or after age 55, and (b)
Kramer was credited with an additional 7.82 years of credited service with the Company as
of the December 31, 2008 (the “Trigger Date”). Kramer shall be eligible for benefits under
Paragraph E(1) as of December 31 2008.

          (2) Notwithstanding any of the foregoing, Kramer shall not be eligible for any
additional benefit under this Paragraph E if:

3

 

     (i) he is terminated for gross misconduct, insubordination or willful
failure to perform the duties assigned by the Company’s management, as
modified from time to time;

     (ii) he violates of any covenant not to compete or solicit with the
Company; or

     (iii) he fails to execute a general release in a form satisfactory to
the Company upon his termination.

          (3) If, after termination of Kramer’s employment, facts are disclosed or discovered
that constitute cause under Paragraph E(2)(i) or (ii), then any additional benefits
attributable to the provisions of this Paragraph E shall cease immediately. Further, if any
benefits attributable to the provision of this Paragraph E that were paid to Kramer before
such facts were discovered or disclosed, then Kramer shall repay the Company the gross sum
of benefits attributable to this Paragraph E and paid to him within 15 days of written
demand by the Company.

          (4) In the event Kramer does not become entitled to benefits under this Paragraph E,
benefits shall be determined in accordance with the terms of the Plan as if this Paragraph E
had not been effectuated.

V. Distribution

     A. For any distribution that had not commenced as of December 31, 2008, the present value of
the participant’s accrued benefit, determined as of his date of Separation of Service and adjusted
for interest to the payment date, shall be distributed in a single lump sum amount. The
distribution shall be made on the first business day of the month following the date that is six
months after the participant’s Separation of Service.

     B. 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 that
the participant’s Credited Service with a Participating Employer bears to the participant’s total
Credited Service with all Participating Employers.

     C. Upon a participant’s death prior to receipt of all or part of the amount of his benefit,
the present value of his supplemental pension benefits shall be payable to his designated
beneficiary or, if none, to his estate, within 15 business days his death. Payment to one or more
of such persons shall completely discharge the obligations of the Plan and the Company with respect
to the amount so paid.

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VI. Miscellaneous

     A. 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 payable by such
terminating corporation shall become non-forfeitable. If the Plan is terminated, the Board of
Directors of the Company shall determine the manner of distribution at that time in compliance with
Section 409A Standards, as defined below.

     B. 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.

     C. 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 that such
dismissal might have upon him under the Plan.

     D. 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.

     E. 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.

     F. This Plan shall be construed, administered and enforced according to the substantive
internal laws (and not the conflict of laws provisions) of the State of Indiana.

     G. It is also intended that this Plan comply with the applicable Section 409A Standards, and
the Plan will be construed accordingly. In construing or interpreting any vague or ambiguous Plan
provision, the interpretation that will prevail is the interpretation that will cause the Plan to
comply with the applicable Section 409A Standards. To the extent that any terms of the Plan or an
award would subject any Participant to gross income inclusion, interest, or additional tax pursuant
to Code Section 409A, those terms are to that extent superseded by the applicable Section 409A
Standards. For purposes herein, Section 409 Standards means the applicable requirements and
standards for non-qualified deferred compensation plans

5

 

established by Code Section 409A, and regulations and guidance promulgated thereunder by the
Internal Revenue Service.

VII. Effective Date

     This Plan shall be restated effective as of January 1, 2009.

     Zimmer Holdings, Inc. has caused this Restated 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 to be signed by its duly
authorized officers this 13th day of December, 2008.

	 	 	 	 	 
	 	ZIMMER HOLDINGS, INC.

 	 
	 	By:  	/s/ Renee P. Rogers
 	 
	 	 	Renee P. Rogers 	 
	 	 	Vice President, Global Human Resources 	 
	 
	 	 	 
	 	By:  	                /s/ James T. Crines
 	 
	 	 	James T. Crines 	 
	 	 	Executive Vice President, Finance and

Chief Financial Officer 	 
	 

6

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