Document:

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                                                                  Exhibit 4a(ii)

                                    AGREEMENT

                               dated 20 March 2003

                                     between

Smith & Nephew plc
15 Adam Street, London WC2N 6LA                               ("Smith & Nephew")

                                       and

Meadowclean Limited
(in the process of re-registering as a UK registered public
 company changing its name to Smith & Nephew Group plc)          (the "Offeror")

                                       and

Centerpulse Ltd
Andreasstrasse 15, 8050 Zurich                                   (the "Company")

                                   relating to

                the Combination of Smith & Nephew and the Company

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
I    PUBLIC OFFER ..........................................................  5
     1   Structure .........................................................  5
     2   Offer Restrictions ................................................  5
     3   Offer Price .......................................................  6
     4   Conditions ........................................................  7
     5   Offeror's and Smith & Nephew's Obligations ........................  8
     6   Company's Obligations .............................................  9
     7   Board Approvals ................................................... 10
     8   Corrections to Offer Documents .................................... 10
     9   Rights Under Stock Option Plans ................................... 10

II   COVENANTS ............................................................. 11
     1   Board Representation .............................................. 11
     2   Company's Manufacturing Facilities ................................ 11
     3   Management ........................................................ 11
     4   Listing ........................................................... 11
     5   No Solicitation ................................................... 11
     6   Co-operation; Confidentiality ..................................... 12
     7   Cost Reimbursement ................................................ 12
     8   Conduct of Business ............................................... 13
     9   Reasonable Efforts; Filings ....................................... 14
     10  Notification of Certain Matters ................................... 14

III  TERMINATION AND AMENDMENT ............................................. 14
     1   Termination ....................................................... 14
     2   Effect of Termination ............................................. 15
     3   Amendment ......................................................... 15

IV   MISCELLANEOUS ......................................................... 16
     1   Waiver of Standstill Provisions ................................... 16
     2   Entire Agreement; Assignment ...................................... 16
     3   Validity .......................................................... 16
     4   Notices ........................................................... 16
     5   Fees and Expenses ................................................. 17
     6   Public Disclosure ................................................. 17
     7   Governing Law ..................................................... 18
     8   Arbitration ....................................................... 18
</TABLE>

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                                TABLE OF ANNEXES

Annex I.4 a):    Form of Pre-Announcement

Annex 1.7 a):    Fairness Opinion of each of UBS Warburg and Lehman Brothers to
                 the Board of Directors of the Company

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RECITALS

WHEREAS, the board of directors of each of Smith & Nephew and the Company has
determined that in light of the potential benefits from a strategic combination
of their respective businesses it is in the best interests of their respective
shareholders for the Offeror, the proposed new holding company of Smith &
Nephew, which will be a UK registered public company, resident in Switzerland
and listed on the London Stock Exchange and on the SWX Swiss Exchange, to
acquire control of the Company upon the terms and subject to the conditions set
forth in this agreement (this "Agreement");

WHEREAS, the boards of directors of Smith & Nephew and the Offeror have adopted
resolutions (a) approving the acquisition of the Company by the Offeror, this
Agreement and the transactions contemplated hereby, and (b) (in the case of
Smith & Nephew only) recommending that the shareholders of Smith & Nephew
approve this Agreement and the transactions contemplated hereby;

WHEREAS, the board of directors of the Company has obtained fairness opinions
and adopted resolutions (a) approving the acquisition of the Company by the
Offeror, this Agreement and the transactions contemplated hereby, and (b)
recommending to the Company's shareholders to tender their shares in the Offer
(as defined herein);

WHEREAS, Incentive Capital AG, an investment company organized under the laws of
Switzerland and listed on the SWX Swiss Exchange (the "Shareholder"), holds
indirectly through its wholly-owned subsidiary Incentive Jersey Ltd, 13.14% of
the Company Shares (as defined herein) and rights to acquire further 5.77% of
the Company Shares, Smith & Nephew and the Shareholder have agreed, by way of a
separate transaction agreement dated the date hereof, that the Offeror shall
acquire all the outstanding shares of the Shareholder by way of a public offer
(the "Parallel Public Offer"), which is to be launched and conducted in parallel
to the Offer with respect to the Company;

WHEREAS, the Offeror, Smith & Nephew and the Company desire to make certain
arrangements and covenants in relation to the Offer contemplated in this
Agreement;

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, the parties agree as follows:

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I    PUBLIC OFFER

1    Structure

     a)   The Offeror agrees to extend a public offer to purchase all
          outstanding registered shares of the Company, each with a nominal
          value of CHF 30.00 (the "Company Shares"; including the Company Shares
          represented by the American Depositary Shares of the Company (the
          "Company ADSs"), which are currently issued and which will have been
          issued by the end of the additional acceptance period (the
          "Transaction"), against payment of a consideration consisting of
          shares of the Offeror (the "Offeror Shares") to be issued credited as
          fully paid and ranking pari passu in all respects with the Offeror
          Shares in issue at the date hereof, and/or cash as further described
          in Section I.3.

     b)   The Company agrees that no Company Shares held by the Company or any
          of its subsidiaries, if any, will be tendered pursuant to the Offer;
          provided, however, that prior to the date of settlement of the Offer
          (the "Completion Date"; Vollzugsdatum in German) Company Shares held
          by the Company may be allocated, issued, delivered or transferred
          pursuant to the Company's stock incentive plan for management and
          employees in accordance with the terms thereof or Section I.9.

2    Offer Restrictions

     a)   The offer contemplated by the Transaction will be made available to
          all shareholders on substantially the same terms and conditions and
          will take the form of a public exchange offer applicable to all
          shareholders (the "Offer") but for regulatory reasons will be
          conducted utilising two separate sets of offer documents: (i) one set
          to be made available to all holders of Company Shares not located in
          the United States and prepared in accordance with the Swiss Stock
          Exchanges and Securities Trading Act ("SESTA") and its implementing
          rules and regulations and (ii) the other set to be made available to
          all shareholders located in the United States and prepared in
          accordance with the Securities Exchange Act of 1934, as amended (the
          "US Exchange Act"), and the Securities Act of 1933, as amended (the
          "US Securities Act"), in each case, and the rules and regulations
          thereunder.

     b)   The Offer contemplated by this Agreement is not being made directly or
          indirectly, nor is it intended to extend to, a country or jurisdiction
          where such public offer would be considered unlawful or in which it
          would otherwise breach any applicable law or regulation or which would
          require the Offeror to amend any term or conditions of the Offer in
          any way or which would require the Offeror to make

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          any additional filings with, or take any additional action with
          regards to, any governmental, regulatory or legal authority. Offering
          documents relating to the Offer may not be distributed in nor sent to
          such country or jurisdiction and may not be used for the purposes of
          soliciting the exchange of any securities of the Company from anyone
          in such country or jurisdiction.

3    Offer Price

     a)   The consideration will be paid in Offeror Shares and cash on the basis
          of (i) an exchange ratio (the "Exchange Ratio") of 25.15 Offeror
          Shares and CHF 73.42 in cash for each Company Share. The Exchange
          Ratio will be adjusted to compensate for any dilutive effects in
          respect of the Company Shares or ordinary shares in Smith & Nephew
          (the "Smith & Nephew Shares") (save for shares issued for management
          options issued under the Company or Smith & Nephew employee share
          schemes and disclosed in the Company's or Smith & Nephew's financial
          statements for the financial year 2002) including dividend payments
          (save for dividends already declared by Smith & Nephew or an interim
          dividend thereafter declared by Smith & Nephew in the normal course
          consistent with past practice), capital increases below market value,
          or the issuance of options (save for management options issued under
          Smith & Nephew employee share schemes in the normal course consistent
          with past practice), warrants, convertible securities and other rights
          of any kind to acquire Company Shares or Smith & Nephew Shares, or any
          other transaction (including in connection with a scheme of
          arrangement) having a dilutive effect on the value of the Offers
          unless provided otherwise herein. If between the date of this
          Agreement and the Completion Date, the outstanding Smith & Nephew
          Shares shall have been changed into a different number of shares or a
          different class, by reason of the occurrence or record date of any
          stock dividend, subdivision, reclassification, recapitalisation,
          split, combination, exchange of shares or similar transaction, the
          Exchange Ratio shall be appropriately adjusted to reflect such stock
          dividend, subdivision, reclassification, recapitalisation, split,
          combination, exchange of shares or similar transaction made until the
          Completion Date.

          Fractions of Offeror Shares will not be issued and entitlements to
          Offeror Shares will be rounded down to the nearest whole Offeror Share
          and the cash element of the consideration will be adjusted.

     b)   In respect of the cash consideration, a `mix and match' facility will
          be made available. Accepting Company Shareholders under the Offer and
          accepting shareholders of the Shareholder under the Parallel Public
          Offer (together the "Accepting Shareholders") may elect to take fewer
          Offeror Shares or more Offeror Shares than their basic entitlement
          under the relevant Offer, but elections under both Offers (taken
          together) to take more Offeror Shares (together the "Excess Shares")
          will only be satisfied to the extent that elections have been made
          under the Offer

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          and the Parallel Public Offer (taken together) by Accepting
          Shareholders to take fewer Offeror Shares (together referred to as
          "Available Shares"). The Available Shares will be allocated to the
          applicants for Excess Shares in proportion to the number of Excess
          Shares applied for. If the total number of Available Shares exceeds
          the total number of Excess Shares applied for, the Available Shares
          shall be limited to an amount equal to the Excess Shares. Once the
          share allocations have been determined, the cash element of the
          consideration will be reduced or increased (as the case may be) for
          each Accepting Shareholder who has been allocated an increased or
          reduced number of Offeror Shares. All calculations shall be made by
          reference to the number of acceptances and elections as of the last
          day of the additional acceptance period.

4    Conditions

     a)   The obligation of the Offeror to complete the Offer and to accept for
          payment and to pay for the Company Shares tendered pursuant thereto
          shall be subject only to those conditions (the "Conditions") set forth
          in the pre-announcement in the form as attached hereto in Annex I.4 a)
          (the "Pre-Announcement"). Each of the Offeror, Smith & Nephew and the
          Company shall use its reasonable efforts (alle zumutbaren Massnahmen)
          to satisfy the respective Conditions as soon as practicable and to
          recommend the steps to be taken by its shareholders in relation
          thereto.

     b)   The Conditions shall be suspensive conditions within the meaning of
          art. 13 para. 1 of the Ordinance of the Takeover Board on Public
          Takeover Offers ("TOO"). The Offeror reserves the right to waive or
          relax any of the Conditions (save for Conditions 1, 2, 3 as to the
          requirement to obtain merger clearance as such, and 4) in whole or in
          part. If and to the extent the regulatory Conditions are not met or
          waived by the end of the initial offer period and provided that the
          non-regulatory Conditions are satisfied or capable of being satisfied,
          the Offeror will be obliged to have the offer period extended on one
          or several occasions for such a period as will permit determination of
          the issue in question. Subject to the preceding sentence, if and to
          the extent the Conditions are not met or waived by the end of the
          (possibly extended) offer period, the Offeror reserves the right to
          terminate the Offer or to obtain the approval by the Swiss Takeover
          Board ("STOB") for an extension of the offer period. The Company
          agrees to consent to such extension requests.

          The Offer will expire if the Conditions have not been fulfilled or
          waived upon expiry of the (possibly extended) offer period and no
          further extension of the offer period has been granted by the STOB.

          For the avoidance of doubt, due to US legal considerations, holders of
          Company Shares that have tendered any of their Company Shares pursuant
          to the Offer

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          shall have the right to withdraw such Company Shares until the end of
          the (possibly extended) offer period.

     c)   The parties acknowledge that the "Court Scheme" referred to in the
          Pre-Announcement refers to a scheme of arrangement under section 425
          of the Companies Act 1985 of the United Kingdom pursuant to which:

          (i)  the existing ordinary shares in Smith & Nephew shall be
               cancelled; and

          (ii) the Offeror shall issue Offeror Shares to existing shareholders
               of Smith & Nephew in consideration of the issue to the Offeror of
               ordinary shares in Smith & Nephew (on the basis of one Offeror
               Share for each existing ordinary share in Smith & Nephew),

          as described in draft (2) of the memorandum produced by Ashurst Morris
          Crisp dated 15 March 2003 entitled "Project Mango Transaction
          Structure" (the "AMC Paper") but subject to further amendment to
          comply with legal, commercial and tax issues, provided that any such
          amendment is not, or would not reasonably likely be, prejudicial to
          the Company or its shareholders, or will not, or would not be
          reasonably likely to, substantially delay the date on which the Offer
          is expected to become unconditional or substantially prejudice the
          likelihood of the Offer becoming unconditional.

          The Offeror and Smith & Nephew agree that the Court Scheme shall not
          be conditional upon any matter save for any condition expressly set
          out in the Pre-Announcement and any shareholder approval of Smith &
          Nephew required by law to approve the Court Scheme. In particular, but
          without limitation, the Court Scheme shall not be conditional upon, or
          include as part of its terms, the proposed repayment by way of
          cancellation of the preference shares referred to in the AMC Paper.

5    Offeror's and Smith & Nephew's Obligations

     The Offeror and/or Smith & Nephew (as applicable) shall procure that any of
     the following be done and/or shall:

     a)   make the Pre-Announcement not later than 20 March 2003 and prepare any
          offer documents and instruments pursuant to which the Offer will be
          made (collectively with any supplements or amendments thereto,
          including the U.S. Offer Documents as defined below the "Offer
          Documents"), it being understood that the Company and its counsel
          shall be given a reasonable opportunity to review and comment on the
          Offer Documents and any other documents pertinent to the Transaction
          prior to filing or distribution thereof and that each party (acting
          reasonably) must be satisfied with the description of any matters
          relating to itself (including its business) in any of these documents;

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     b)   prepare and make all anti-trust or other filings necessary to carry
          out the transactions contemplated by this Agreement;

     c)   prepare and publish listing particulars in relation to the Offeror
          Shares in accordance with the Listing Rules of the United Kingdom
          Listing Authority (the "UK Listing Rules") and post such listing
          particulars to the Company's shareholders together with the Offer
          Documents;

     d)   prepare and post to Smith & Nephew's shareholders a circular complying
          with the UK Listing Rules and containing (i) a recommendation of the
          directors of the Offeror to vote in favour of the resolutions of Smith
          & Nephew referred to in the Conditions and (ii) an explanatory
          statement pursuant to section 426 of the Companies Act 1985 of the
          United Kingdom;

     e)   use commercially reasonable endeavours promptly to prepare, publicize,
          distribute, file and submit any documents, listing particulars,
          announcements, submissions and any other form of communication to be
          made; and

     f)   file with the SEC on or prior to the date of commencement of the Offer
          (i) a Tender Offer Statement on Schedule TO (together with any
          amendments or supplements thereto, the "Schedule TO"), (ii) the
          Exchange Offer Registration Statement with respect to the Offer and
          (iii) a Registration Statement on Form F-6 (the "ADS Registration
          Statement") registering the American Depositary Shares of the Offeror
          (the "Offeror ADSs") to be issued in connection with the Transaction
          (the Schedule TO, the Exchange Offer Registration Statement, the ADS
          Registration Statement and such other documents included therein
          pursuant to which the US Offer will be made, the "U.S. Offer
          Documents").

6    Company's Obligations

     The Company shall:

     a)   provide to the Offeror such information as reasonably requested in
          connection with the preparation of the listing particulars and the
          Offer Documents;

     b)   ensure that the Offer Documents will contain a report of the board as
          per Section 29(1) SESTA recommending acceptance of the Offer, it being
          understood, however, that the board of the Company will be under no
          obligation to recommend the Offer if Smith & Nephew or the Offeror
          should become subject to the events referred to in Condition 7 mutatis
          mutandis in relation to Smith & Nephew's products, or its facilities
          in Hull or Memphis;

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     c)   file with the SEC contemporaneously with the commencement of the Offer
          and disseminate to holders of the Company Shares, in each case as and
          to the extent required by the US Exchange Act, a
          Solicitation/Recommendation Statement on Schedule 14D-9 (together with
          any amendments or supplements thereto) that shall reflect the
          recommendation of the board of directors of the Company.

7    Board Approvals

     a)   The Company confirms that its board of directors has (a) obtained
          fairness opinions issued by its financial advisors UBS Warburg and
          Lehman Brothers enclosed as Annex I.7.a), and (b) by way of a board
          resolution (i) determined that this Agreement and the transactions
          contemplated hereby are fair to, and in the best interests of, the
          Company's shareholders, (ii) approved this Agreement, and (iii)
          resolved to recommend to the shareholders acceptance of the Offer. The
          Company has been advised by its board members and executive officers
          (members of executive committee) that they intend to tender all
          Company Shares owned by them to the Offeror pursuant to the Offer.

     b)   Each of Smith & Nephew and the Offeror confirms that its board of
          directors (i) determined that this Agreement and the transactions
          contemplated hereby are in the best interests of itself and its
          shareholders as a whole, (ii) approved this Agreement, and (iii) (in
          the case of Smith & Nephew only) resolved unanimously to recommend to
          its shareholders the approval of the transactions contemplated by this
          Agreement.

8    Corrections to Offer Documents

     Each party hereto shall notify the other parties if any of the information
     supplied by that party to either of the other parties for inclusion in any
     of the Offer Documents becomes false or misleading in any material respect
     and supply the information needed to correct the misstatement.

9    Rights Under Stock Option Plans

     a)   The holders of the Company's outstanding stock options relating to
          Company Shares will receive stock options relating to Offeror Shares
          (the "New Options") at an exchange ratio of 34 : 1 (no cash
          component). The New Options will vest 30 days after completion of the
          Offer, and the exercise period will be 18 months. The strike price of
          the New Options will be calculated by dividing the existing strike
          price of the option by 34 and converting this into GBP at the
          prevailing exchange rate at the Completion Date.

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     b)   Smith & Nephew and the Offeror shall take all steps necessary and
          procure the required approvals to roll over Smith & Nephew's share
          options into the Offeror to the extent such options are capable of
          rollover.

II   COVENANTS

1    Board Representation

     The Offeror will take all action necessary to ensure independent
     non-executive representation of the Company by two persons on the Offeror's
     board, it being understood that Dr. Max Link is invited to join the board
     of the Offeror as a Vice Chairman and Rene Braginsky is invited to join the
     board of the Offeror as a director.

2    Company's Manufacturing Facilities

     The Offeror and Smith & Nephew each intends the Winterthur facility
     continuing to be an important centre of the combined group for a number of
     years.

3    Management

     The Offeror and Smith & Nephew will each use its reasonable endeavours to
     offer senior operating management of the Company suitable posts in the
     combined group.

4    Listing

     The Offeror and Smith & Nephew will each use its reasonable best efforts to
     obtain a secondary listing of the Offeror Shares on the SWX Swiss Exchange
     as of the Completion Date.

5    No Solicitation

     a)   The Company agrees that it shall immediately cease and cause to be
          terminated all existing discussions, negotiations and communications
          with any persons with respect to any Acquisition Transaction (as
          defined below). The Company agrees that it shall not solicit or
          initiate any discussions or negotiations with any corporation,
          partnership, person or other entity or group (other than Smith &
          Nephew or any affiliate or associate of Smith & Nephew) concerning any
          merger, consolidation, business combination, liquidation,
          reorganization, sale of substantial assets, sale of shares of capital
          stock or similar transactions involving the Company or any material
          subsidiary of the Company (each an "Acquisition Transaction"); pro-

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          vided, however, that nothing contained in this Section II.5 shall
          prohibit the Company or its board of directors from taking and
          disclosing to the Company's shareholders, or any third parties or
          governmental or regulating bodies, a position with respect to an
          Acquisition Transaction initiated by a third party or from making such
          other disclosure to the Company's shareholders, or any third parties
          or governmental or regulating bodies, which, as advised by outside
          counsel, is advisable under applicable law.

     b)   The Company shall promptly advise Smith & Nephew of the Company's
          receipt of any proposal relating to an Acquisition Transaction and any
          request for information that may reasonably be expected to lead to or
          is otherwise related to any Acquisition Transaction, the identity of
          the person making such proposal relating to an Acquisition Transaction
          or request for information and, subject to applicable law and the
          requirements of any regulatory authorities, the terms and conditions
          of such proposal relating to an Acquisition Transaction.

6    Co-operation; Confidentiality

     a)   From the date hereof until the Completion Date, the Company agrees to
          cooperate with the Offeror and Smith & Nephew in their efforts to
          develop high-level integration plans to facilitate a rapid combination
          of the operations upon completion of the Transaction.

     b)   All information obtained by the Offeror, Smith & Nephew or their
          representatives pursuant to this Section 6 shall be kept confidential
          in accordance with the confidentiality agreement, dated 19 December
          2002 (the "Confidentiality Agreement"), between Smith & Nephew and the
          Company.

7    Cost Reimbursement

     a)   The parties agree on a fixed compensation sum of CHF 20 million (the
          "Cost Reimbursement") as further set out in Sub-Sections II.7 b) and
          c) in the event that the Transaction is pre-announced but not
          completed. Such fixed compensation sum shall represent a lump sum
          payment for the purpose of compensating the recipient for damages for
          internal expenditures and external costs and lost revenues incurred in
          connection with the preparation for and in consideration of the
          realization of the combination of the businesses of Smith & Nephew and
          the Company, and is not intended in any way whatsoever to coerce a
          party into completing the Transaction.

     b)   Smith & Nephew will pay the Cost Reimbursement to the Company if the
          non-completion of the Transaction is attributable to (i) the failure
          of Smith & Nephew

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          or its board of directors to recommend this Agreement and the
          transactions contemplated by this Agreement to its shareholders or the
          withdrawal or the modification of such recommendation, (ii) the
          failure of Smith & Nephew or the Offeror (as appropriate) to publish
          the Pre-Announcement as agreed herein (save for modifications required
          by the STOB) or any other material breach of this Agreement by Smith &
          Nephew or the Offeror, (iii) the material contravention of Smith &
          Nephew or the Offeror of any material laws and regulations that apply
          to the Offer, or (iv) the non-satisfaction of any of the Conditions
          (1), (2) or (4).

     c)   The Company will pay the Cost Reimbursement to Smith & Nephew if the
          non-completion of the Transaction is attributable to (i) the failure
          of the Company or its board of directors to recommend the Offer to its
          shareholders or the withdrawal or the modification of the
          Recommendation, (ii) the material contravention of the Company of any
          material laws and regulations that apply to the Offer, (iii) a
          material breach of this Agreement by the Company, or (iv) the
          non-satisfaction of any of the Conditions (6) or (7) or the successful
          completion of a competing public offer by a third party, it being
          understood, however, that if the Offeror or Smith & Nephew becomes
          subject to an event referred to in Condition 7 mutatis mutandis in
          relation to Smith & Nephew's products, or its facilities in Hull or
          Memphis, the Company will not have to pay any Cost Reimbursement.

8    Conduct of Business

     Except as contemplated by this Agreement, during the period from the date
     of this Agreement to the Completion Date, each of the Company, Smith &
     Nephew and their respective subsidiaries will conduct its operations
     according to its ordinary and usual course of business and consistent with
     past practice and will use all reasonable efforts consistent with prudent
     business practice to preserve intact the business organization, to keep
     available the services of its current officers and key employees and to
     maintain existing relationships with those having significant business
     relationships with the respective party and its subsidiaries, in each case
     in all material respects. By way of amplification and not limitation,
     neither the Company nor any of its subsidiaries shall between the date
     hereof and the Completion Date without the prior written consent of Smith &
     Nephew, which is not to be unreasonably withheld, do or propose to do any
     of the following, except to the extent contemplated by this Agreement:

     a)   change the articles of association, with the exception of the changes
          proposed to the shareholders of the Company in the invitation to the
          Company's AGM of 30 April 2003;

     b)   make improvements to the employment contracts or other arrangements
          with their directors or officers;

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     c)   amend or terminate or enter into any material contracts;

     d)   initiate or agree on acquisitions or divestitures or financing,
          financial, capital market transactions of more than CHF 70 million in
          aggregate or dispose of, in whole or in part , its orthopedics,
          spine-tech or dental divisions;

     e)   issue any shares (save for shares issued for management options issued
          under the Option Plans and disclosed in the Company's financial
          statements for the financial year 2002), options, warrants,
          convertible securities or other rights of any kind to acquire Company
          Shares; and

     f)   purchase any Company Shares for the period from the publication of the
          public announcement until the Completion Date; and

     g)   distribute, either directly or indirectly (e.g. by share buy backs),
          any dividend or other distribution to its shareholders.

9    Reasonable Efforts; Filings

     Subject to the terms and conditions herein provided for and to the
     fiduciary duties of the board of directors of the Company under applicable
     law as advised by legal counsel, each of the parties hereto agrees to use
     all reasonable efforts to take, or cause to be taken, all appropriate
     action, and to do, or cause to be done, all things necessary, proper or
     advisable under applicable laws and regulations, including without
     limitation to make all national filings under applicable competition laws,
     to complete and make effective, as soon as practicable, the transactions
     contemplated by this Agreement.

10   Notification of Certain Matters

     The Company shall give prompt notice to Smith & Nephew, and Smith & Nephew
     shall give prompt notice to the Company, of any failure of such party (or,
     in the case of Smith & Nephew, the Offeror) to comply with or satisfy any
     covenant, condition or agreement to be complied with or satisfied by it
     hereunder.

III  TERMINATION AND AMENDMENT

1    Termination

     This Agreement may be terminated:

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     a)   At any time by mutual written consent of the boards of directors of
          the Company and Smith & Nephew;

     b)   by Smith & Nephew (i) in the event of a material breach of the
          Agreement (which, for the avoidance of doubt, shall include any breach
          of Sections II.8 d), f) and g)) or a material contravention of the
          applicable laws and regulations by the Company, (ii) if the Company's
          board of directors withdraws or otherwise modifies the Recommendation,
          or (iii) if the Offer is not completed due to the non-satisfaction of
          a Condition;

     c)   by the Company (i) in the event of a material breach of this Agreement
          or a material contravention of the applicable laws and regulations by
          the Offeror or Smith & Nephew, (ii) if the Offer is not completed due
          to the non-satisfaction of a Condition, or (iii) if the Company
          receives an offer with respect to an Acquisition Transaction with a
          party other than the Offeror or its affiliates or such other party has
          commenced a tender offer which, in either case, the board of directors
          of the Company, after having granted the Offeror the reasonable
          opportunity to increase the value of the Offer, believes in good faith
          is more favourable to the Company's shareholders than the transactions
          contemplated by this Agreement.

2    Effect of Termination

     a)   If this Agreement is terminated pursuant to Section III.1 above, this
          Agreement, except for the provisions of this Section and Sections
          II.6(b), II.7 and IV hereof, shall forthwith become void and have no
          effect, without any liability on the part of any party or its
          directors, officers or shareholders. However, nothing in this Section
          III.2 shall relieve any party to this Agreement of liability for
          breach of this Agreement or for a contravention of the applicable laws
          and regulations.

     b)   The Confidentiality Agreement shall remain in full force and effect
          following any termination of this Agreement, and all confidential
          material shall be either destroyed or returned promptly.

3    Amendment

     This Agreement may not be amended except by an instrument in writing signed
     on behalf of all of the parties.

<PAGE>

Combination Agreement                                                       -16-
--------------------------------------------------------------------------------

IV   MISCELLANEOUS

1    Waiver of Standstill Provisions

     Whereas the Offeror and Smith & Nephew are entering into separate
     acquisition agreements in relation to the Company Shares under the Parallel
     Public Offer, and whereas under the terms of subparagraph 7 of the
     Confidentiality Agreement, the accompanying side letter agreement dated
     December 19, 2002 and section 4(b) of the process letter from the Company's
     financial advisors to Smith & Nephew's financial advisor dated January 29,
     2003 (together the "Standstill Provisions"), Smith & Nephew has agreed not
     to acquire, directly or indirectly, any Company Shares without the prior
     approval of the Company, the Standstill Provisions are hereby waived (1)
     with respect to Company Shares indirectly acquired in connection with the
     exchange offer by the Offeror with respect to the Shareholder, and (2) with
     respect to purchases made pursuant to the Offer.

2    Entire Agreement; Assignment

     Except for the Confidentiality Agreement, this Agreement (a) constitutes
     the entire agreement between the parties with respect to the subject matter
     hereof and supersedes all other prior agreements and understandings, both
     written and oral, between the parties with respect to the subject matter
     hereof, (b) shall not be assigned by operation of law or otherwise and (c)
     shall not be for the benefit of a third party.

3    Validity

     The invalidity or unenforceability of any provision of this Agreement shall
     not affect the validity or enforceability of any other provisions of this
     Agreement, which shall remain in full force and effect.

4    Notices

     All notices, requests, claims, demands and other communications hereunder
     shall be in writing and shall be deemed to have been duly given when
     delivered in person, by facsimile transmission with confirmation of
     receipt, or by registered or certified mail (postage prepaid, return
     receipt requested) to the respective parties as follows:

<PAGE>

Combination Agreement                                                       -17-
--------------------------------------------------------------------------------

     if to the Offeror or Smith & Nephew:

          Heron House
          15 Adam Street
          London WC2N 6LA
          For the attention of: Company Secretary

     if to the Company:

          Centerpulse Ltd
          Andreasstrasse 15
          CH-8050 Zurich
          For the attention of: Company Secretary

     or to such other address as the person to whom notice is given may have
     previously furnished to the others in writing in the manner set forth above
     (provided that notice of any change of address shall be effective only upon
     receipt thereof).

5    Fees and Expenses

     Whether or not the Offer is consummated, all costs and expenses incurred in
     connection with the transactions contemplated by this Agreement shall be
     paid by the party incurring such expenses, except as provided expressly to
     the contrary herein.

6    Public Disclosure

     The Offeror and Smith & Nephew (and their affiliates) and the Company (and
     its affiliates) will consult with each other and agree on the desirability,
     timing and substance of any press release, public announcement, publicity
     statement or other disclosure relating to the Transaction or the business
     of a party hereto (including in particular any product recall liability)
     and, subject to applicable laws, stock exchange rules and the requirements
     of any regulatory authorities, neither Smith & Nephew or the Offeror (nor
     their affiliates) nor the Company (or its affiliates) will make any public
     disclosures without the prior consent of the other party (which consent
     shall not be unreasonably withheld) as to the timing of such disclosure,
     extent of distribution and form and substance thereof.

<PAGE>

Combination Agreement                                                       -18-
--------------------------------------------------------------------------------

7    Governing Law

     This Agreement shall be governed by and construed in accordance with the
     laws of Switzerland regardless of the laws that might otherwise govern
     under principles of conflicts of laws applicable thereto.

8    Arbitration

     The parties hereto consent and agree that all disputes out of or in
     connection with the Agreement, including disputes on its execution, binding
     effect, performance, amendment and termination, shall be resolved to the
     exclusion of the ordinary courts by a three-person arbitral tribunal in
     accordance with the International Arbitration Rules of the Zurich Chamber
     of Commerce. If there are not more than two parties involved each party
     nominates an arbitrator. The decision of the arbitral tribunal shall be
     final, and the parties waive all challenge of the award in accordance with
     article 192 of the Swiss Act on Private International Law.

                                    * * * * *

In witness whereof, each of the parties has caused this Agreement to be executed
on its behalf by its officers thereunto duly authorized, all at or on the day
and year first above written.

<PAGE>

Combination Agreement                                                       -19-
--------------------------------------------------------------------------------

Meadowclean Limited

     By:     /s/ Pierre-Andre Chapatte
          ----------------------------------
     Name:   Pierre-Andre Chapatte
     Title:  Director

     By:     /s/ Antoine Vidts
          ----------------------------------
     Name:   Antoine Vidts
     Title:  Director

Smith & Nephew plc

     By:     /s/ Christopher J. O'Donnell
          ----------------------------------
     Name:   Christopher J. O'Donnell
     Title:  Chief Executive

     By:     /s/ Peter Hooley
          ----------------------------------
     Name:   Peter Hooley
     Title:  Finance Director

Centerpulse Ltd

     By:     /s/ Dr. Max Link
          -----------------------------------
     Name:   Dr. Max Link
     Title:  Chairman & CEO

     By:     /s/ Urs Kamber
          -----------------------------------
     Name:   Urs Kamber
     Title:  CFO<PAGE>

                                                                 Exhibit 4a(iii)

                                                                  Execution Copy

                              TRANSACTION AGREEMENT

                               dated 20 March 2003

                                     between

InCentive Capital AG
c/o Bar & Karrer, Baarerstrasse 8,
CH-6301 Zug, Switzerland                                           ("InCentive")

                                       and

Smith & Nephew plc.
Heron House, 15 Adam Street,                              ("Smith & Nephew plc")
London WC2N 6LA, United Kingdom

                                       and

Meadowclean Limited
(to be renamed Smith & Nephew Group plc)            ("Smith & Nephew Group plc")
122 Moulin de la Ratte,
CH-1236 Cartigny, Geneva, Switzerland

                                    Regarding

             A Public Tender Offer to all Shareholders of InCentive

<PAGE>

WHEREAS:

(A)  Smith & Nephew plc is an English company limited by shares with principal
     place of business in England whose ordinary share capital amounts to GBP
     113,560,138.10, divided into 929,128,403 ordinary shares of 12 2/9 pence
     nominal value each, listed on the London Stock Exchange and, in the form of
     American Depositary Receipts, on the New York Stock Exchange.

(B)  Centerpulse AG ("Centerpulse") is a Swiss company limited by shares with
     registered seat in Zurich whose share capital amounts to CHF 354,919,350,
     divided into 11,830,645 registered shares with a par value of CHF 30 each
     (the "Centerpulse Shares"), listed on the SWX Swiss Exchange and, in the
     form of American Depository Receipts, on the New York Stock Exchange.

(C)  Desirous to combine their respective businesses, Centerpulse and Smith &
     Nephew plc and Smith & Nephew Group plc have agreed that Smith & Nephew
     plc, or Smith & Nephew Group plc, the proposed new holding company of Smith
     & Nephew, which will be a UK registered public company, resident in
     Switzerland, and listed on the London Stock Exchange and on the SWX Swiss
     Exchange, shall submit a public tender offer for all publicly held
     Centerpulse Shares on the terms and subject to the conditions of a
     transaction agreement of even date (the "Centerpulse Tender Offer"). Except
     where specifically otherwise provided, all references to "Smith & Nephew"
     in this Agreement therefore include Smith & Nephew plc and Smith & Nephew
     Group plc, and all references to "Smith & Nephew Shares" shall include the
     shares of Smith & Nephew plc listed on the London Stock Exchange or as
     appropriate the shares of Smith & Nephew Group plc to be listed on the
     London Stock Exchange and the SWX Swiss Exchange.

(D)  InCentive, a Swiss company limited by shares with registered seat in Zug
     whose share capital amounts to CHF 42,944,040, divided into 2,147,202 fully
     paid-up bearer shares with a par value of CHF 20 each which are listed on
     the SWX Swiss Exchange (the "InCentive Shares"), holds, at the Signing
     Date, indirectly through its wholly-owned subsidiary InCentive Jersey Ltd.,
     13.14% of the Centerpulse Shares and rights to acquire further 5.77% of the
     Centerpulse Shares, all as set forth in Schedule (D).

(E)  Concurrently with the Centerpulse Tender Offer, Smith & Nephew wishes to
     submit a public tender offer to all shareholders of InCentive, conditional
     upon com-

                                      -2-

<PAGE>

       pletion (Zustandekommen) of the Centerpulse Tender Offer, and InCentive
       wishes to agree on certain covenants in respect of such public tender
       offer.

(F)    "Zurich" Versicherungs-Gesellschaft, III Institutional Investors
       International Corp., Mr. Rene Braginsky and Mr. Hans Kaiser, the main
       shareholders of InCentive holding in the aggregate 1,650,190 InCentive
       Shares representing approximately 76.85% of the voting rights and capital
       stock of InCentive (collectively the "Shareholders"), have agreed to
       tender their InCentive Shares under the Public Tender Offer according to
       the terms and conditions of a tender agreement of even date (the "Tender
       Agreement").

NOW, THEREFORE, the Parties agree as follows:

1.     DEFINED TERMS

       As used in this Agreement, the capitalised terms shall have the meaning
       set forth in Schedule 1.

2.     PUBLIC TENDER OFFER

2.1.   The Offer

2.1.1. On the terms and subject to the conditions set forth in this Agreement,
       Smith & Nephew shall submit a public tender offer for all InCentive
       Shares which are presently issued and which may be issued from the
       Signing Date until the last day of the Statutory Extension Period other
       than any InCentive Shares held by InCentive itself or by any of its
       subsidiaries (the "Public Tender Offer").

2.1.2. Smith & Nephew shall publish the pre-announcement (Voranmeldung) relating
       to the Public Tender Offer, as contained in Schedule 2.1.2, (the
       "Pre-Announcement") in the electronic media on the Signing Date.

                                      -3-

<PAGE>

2.2. The Offer Price

     (a)  The offer price per InCentive Share to be offered by Smith & Nephew in
          the Public Tender Offer (the "Offer Price") shall be:

                                  -------------
                                      a + b
                                      -----
                                        c
                                  -------------

          where:

          a    is   the total amount of Smith & Nephew Shares and amount of cash
                    that would be payable to InCentive under the Centerpulse
                    Tender Offer for the Centerpulse Shares held by InCentive
                    (the "Centerpulse Holding");

          b    is   the adjusted net asset value (positive or negative) of
                    InCentive as determined in accordance with Schedule 2.2(a)
                    (the "Adjusted NAV") calculated as at the last day of the
                    Offer Period, but excluding the Centerpulse Holding, and
                    attributing no value to any InCentive Shares held by
                    InCentive or its subsidiaries (the "Treasury Shares"), as
                    confirmed by InCentive's auditors;

          c    is   the total number of InCentive Shares in issue on the last
                    day of the Offer Period less the number of Treasury Shares
                    on that date.

                    The consideration for each InCentive Share will consist of
                    (i) an element of Smith & Nephew shares and cash which will
                    mirror the Centerpulse Holding; plus or minus (ii) the cash
                    equivalent to the Adjusted NAV excluding the Centerpulse
                    Holding. If the Adjusted NAV excluding the Centerpulse
                    Holding is negative, then the cash element attributable to
                    the Centerpulse Holding shall be reduced, pro tanto, and if
                    after such reduction there is still a negative balance, the
                    number of Smith & Nephew shares to be issued shall be
                    reduced by a corresponding amount calculated by reference to
                    the average closing prices of Smith & Nephew Shares of the
                    fifth to the third Business Day prior to the Settlement
                    Date.

                                      -4-

<PAGE>

     (b)  The Offer Price shall be adjusted for any dilutive effects in respect
          of the InCentive Shares (to the extent they have not been reflected in
          the Adjusted NAV) or the Smith & Nephew Shares (save for shares issued
          for management options issued under the Smith & Nephew employee share
          schemes and disclosed in the Smith & Nephew financial statements for
          the financial year 2002), including dividend payments (save for
          dividends already declared by Smith & Nephew or an interim dividend
          thereafter declared by Smith & Nephew in the normal course), capital
          increases below market value, or the issuance of options (save for
          management options issued under the Smith & Nephew employee share
          schemes in the normal course consistent with past practice), warrants,
          convertible securities and other rights of any kind to acquire
          InCentive shares or Smith & Nephew shares as the case may be.

     (c)  Accepting InCentive shareholders under the Public Tender Offer and
          accepting Centerpulse shareholders under the Centerpulse Tender Offer
          (together the "Accepting Shareholders") may elect to take fewer Smith
          & Nephew Shares or more Smith & Nephew Shares than their basic
          entitlement under the relevant offer, but elections under both offers
          (taken together) to take more Smith & Nephew Shares (together the
          "Excess Shares") will only be satisfied to the extent that elections
          have been made under both offers (taken together) by Accepting
          Shareholders to take fewer Smith & Nephew Shares (together referred to
          as the "Available Shares"). The Available Shares will be allocated to
          the applicants for Excess Shares in proportion to the number of Excess
          Shares applied for. If the total number of Available Shares exceeds
          the total number of Excess Shares applied for, the Available Shares
          shall be limited to an amount equal to the Excess Shares. Once the
          share allocations have been determined, the cash element of the
          consideration will be reduced or increased (as the case may be) for
          each Accepting Shareholder who has been allocated an increased or
          reduced number of Smith & Nephew Shares. All calculations shall be
          made by reference to the number of acceptances and elections as of the
          last day of the additional acceptance period.

     (d)  Fractions of Smith & Nephew Shares shall not be allotted or issued to
          accepting InCentive shareholders but will be aggregated and sold in
          the market, and the net proceeds of sale shall be distributed on a pro
          rata basis to the

                                      -5-

<PAGE>

          InCentive shareholders who accept the Public Tender Offer and are
          entitled to them.

     (e)  The consideration payable for the Centerpulse Shares under the
          Centerpulse Tender Offer shall comprise for each Centerpulse Share:

          (i)  25.15 new Smith & Nephew Shares; and

          (ii) CHF 73.42 in cash.

2.3. Conditions of the Public Tender Offer

     The Public Tender Offer shall be subject to the fulfilment or waiver by
     Smith & Nephew of the conditions as set forth in the Pre-Announcement.

2.4. Implementation by Smith & Nephew of the Public Tender Offer

     Following the date of this Agreement, Smith & Nephew shall:

     (a)  use commercially reasonable efforts to prepare and, each time within
          the statutory period of time, publish the prospectus (the "Offer
          Prospectus") and such other documents relating to the Public Tender
          Offer as are required by law (the "Offer Documents"), each time after
          having consulted with InCentive and its advisers and after having
          given InCentive and its advisers reasonable opportunity to review and
          comment on the Offer Documents; and

     (b)  use commercially reasonable efforts that the conditions of the Public
          Tender Offer set forth in par. g) of the Pre-Announcement and the
          conditions of the Centerpulse Tender Offer set forth in the
          Centerpulse Pre-Announcement contained in Schedule 2.4(b) which are
          under control of Smith & Nephew are satisfied.

2.5. Secondary Listing of Smith & Nephew Shares

     Smith & Nephew shall use all reasonable efforts to procure that the Smith &
     Nephew Shares obtain a secondary listing on SWX Swiss Exchange as of the
     Settlement Date or as soon as possible thereafter.

                                      -6-

<PAGE>

3.     OBLIGATIONS OF INCENTIVE IN RELATION TO THE PUBLIC TENDER OFFER

3.1.   Non-solicitation

3.1.1. InCentive agrees that it shall immediately cease and cause to be
       terminated all existing discussions, negotiations and communications with
       any persons with respect to any Acquisition Transaction (as defined
       below). Except as otherwise contemplated by this Agreement, none of
       InCentive or its subsidiaries shall solicit or initiate any discussions
       or negotiations with any corporation, partnership, person or other entity
       or group (other than Smith & Nephew or any affiliate or associate of
       Smith & Nephew) concerning any merger, consolidation, business
       combination, liquidation, reorganisation, sale of substantial assets,
       sale of shares of capital stock or similar transaction involving
       InCentive or any subsidiary of InCentive or the Centerpulse Holding (each
       an "Acquisition Transaction"), provided that nothing contained in this
       Section 3.1 shall restrict InCentive's board of directors in taking and
       disclosing to InCentive's shareholders or any third parties or
       governmental or regulatory bodies a position with respect to an
       Acquisition Transaction initiated by a third party, or in making such
       other disclosure to InCentive's shareholders or any third parties or
       governmental or regulatory bodies which, as advised by outside counsel,
       is advisable under applicable law.

3.1.2. InCentive shall promptly advise Smith & Nephew of InCentive's receipt of
       any substantive proposal relating to an Acquisition Transaction and any
       substantive request for information that may reasonably be expected to
       lead to or is otherwise related to any Acquisition Transaction, the
       identity of the person making such Acquisition Transaction or request for
       information and the terms and, subject to applicable law and the
       requirements of any regulatory authorities, conditions of such
       Acquisition Transaction.

3.2.   No Acquisition and Disposal of Shares

       Unless Smith & Nephew shall have given its prior written consent or
       declared that the Public Tender Offer has failed, none of InCentive or
       its subsidiaries shall, after the Signing Date:

       (a)  acquire any Centerpulse Shares or rights to acquire Centerpulse
            Shares other than through the exercise or termination of the
            Centerpulse options in accor-

                                      -7-

<PAGE>

            dance with Section 3.7 or, subject to Section 3.3, sell or otherwise
            dispose of any Centerpulse Shares or rights to acquire Centerpulse
            Shares, provided that InCentive shall have the right to procure that
            its subsidiaries transfer to it all Centerpulse Shares held by them;

       (b)  acquire or sell any InCentive Shares or rights to acquire or sell
            InCentive Shares, provided that sales of treasury shares to
            non-related third parties shall be permitted; or

       (c)  acquire any Smith & Nephew Shares or rights to acquire Smith &
            Nephew Shares except through the settlement of the Public Tender
            Offer.

3.3.   Tender of Centerpulse Shares

       In the event that, without the prior consent of Smith & Nephew, and to
       the extent that any of the following items cannot be or is not deducted
       in full in calculating the Adjusted NAV:

       (a)  InCentive or any of its subsidiaries disposes of any of its
            Centerpulse Shares or enters into any derivative arrangement for the
            disposal of Centerpulse Shares, provided that InCentive shall have
            the right to procure that its subsidiaries transfer to it all
            Centerpulse Shares held by them; or

       (b)  InCentive does not dispose of any of its material assets according
            to Section 3.9 and the Shareholders have not agreed with Smith &
            Nephew provisions as to an addition to the escrow referred to in the
            Tender Agreement and such other comfort, indemnity and hold harmless
            arrangements as Smith & Nephew shall reasonably request; or

       (c)  InCentive has failed to enter into any termination agreements in
            respect of its asset management agreements; or

       (d)  during the Offer Period not all of the bank guarantees (indemnity
            letters) and keep-well obligations issued by InCentive are
            terminated or InCentive has not otherwise been released of its
            obligations thereunder according to Section 3.10; or

                                      -8-

<PAGE>

       (e)  the current members of the board of directors of InCentive have not
            resigned according to Section 3.7.1; or

       (f)  the general meeting of InCentive has not passed the resolutions set
            forth in Section 3.7.2; or

       (g)  during the Offer Period any of InCentive or the Shareholders or any
            person related with any of them pursuant to article 15 SESTO-FBC
            directly or indirectly purchases any Centerpulse Shares above the
            value of the offer price under the Centerpulse Offer at the time;

       then, and only then, InCentive shall, if required by Smith & Nephew,
       tender or procure that the banks tender pursuant to Section 3.4(c) and
       (d) the Centerpulse Shares held by it or them to Smith & Nephew pursuant
       to the Centerpulse Tender Offer.

3.4.   Share Deposit Confirmations

3.4.1. InCentive shall use best efforts to procure that each bank where the
       Centerpulse Shares held by InCentive are deposited delivers to Smith &
       Nephew, as soon as possible but not later than ten Business Days after
       the Signing Date, a confirmation in writing confirming that the
       Centerpulse Shares are deposited with such bank and shall remain
       deposited with such bank until the earlier of

       (a)  the Settlement Date; or

       (b)  Smith & Nephew having declared that the Public Tender Offer has
            failed or lapsed; or

       (c)  such bank having received joint written instructions from InCentive
            and Smith & Nephew to release such Centerpulse Shares; or

       (d)  an instruction of an Expert (as defined in Section 3.4.2) having
            been delivered to such bank, accompanied by a copy of a letter by
            which such Expert is appointed either jointly by Smith & Nephew and
            InCentive or by the President of the Zurich Chamber of Commerce.

                                      -9-

<PAGE>

3.4.2.   For the purpose of Section 3.4.1(d), the Parties shall within ten
         Business Days from the Signing Date agree on a fast track process and
         an expert who shall be a professional person (the "Expert") who is
         willing and able to render a decision within a time frame not exceeding
         five Business Days commencing no later than the 30th Business Day of
         the Offer Period which shall be, for the purposes of this Section 3.4,
         binding on the Parties. In default of agreement on the fast track
         process and the identity of the Expert within such ten Business Days
         period, the President of the Zurich Chamber of Commerce may be
         requested by either Party to appoint the Expert who shall determine the
         process and render a decision which shall be, for the purpose of this
         Section 3.4, binding upon the Parties.

3.5.     No Tender of InCentive Treasury Shares

         InCentive shall not tender any treasury InCentive Shares held by it or
         any of its subsidiaries under the Public Tender Offer and shall not
         dispose of any such shares.

3.6.     Report of InCentive's Board of Directors

         InCentive hereby confirms that its board of directors has, subject to
         the receipt of a fairness opinion, (i) determined that this Agreement
         and the transactions contemplated thereby are fair to, and in the best
         interests of, InCentive's shareholders, (ii) approved this Agreement
         and (iii) resolved unanimously to recommend acceptance of the Public
         Tender Offer in accordance with Article 29 (1) SESTA in a timely manner
         so that such report can be attached to the Offer Prospectus.

3.7.     Resignation of Board Members; Shareholders' Meeting

3.7.1.   Subject to completion (Zustandekommen) of the Public Tender Offer and
         effective from the Settlement Date, InCentive shall procure that all
         members of InCentive's board of directors resign from InCentive's board
         of directors.

3.7.2.   InCentive shall procure that a shareholders' meeting of InCentive is
         held during the Offer Period for the passing of the resolutions
         necessary for the satisfaction of the conditions precedent set forth in
         the conditions section of the Pre-Announcement and a resolution
         approving this Agreement and the transactions contemplated

                                      -10-

<PAGE>

       thereby, in particular the conditional tender of Centerpulse Shares in
       accordance with Section 3.3 and the sale of subsidiaries.

3.8.   Exercise or Termination of Centerpulse Share Options

       InCentive shall exercise or terminate, as soon as reasonably possible
       after the Signing Date but in any event prior to the expiry of the Offer
       Period, the options on Centerpulse Shares set forth in Schedule (D),
       provided that such options may not be exercised or terminated if (i) the
       exercise or termination of such options would infringe, to the extent
       applicable, US laws and regulations, or (ii) Smith & Nephew would become
       required by law to increase the offer price under the Centerpulse Tender
       Offer or the Public Tender Offer as a result of the exercise or
       termination of such options.

3.9.   Divestiture of Certain Assets

       InCentive shall sell and transfer, effective prior to the expiry of the
       Offer Period, all its assets (including the shares of all its
       subsidiaries) other than (i) all Centerpulse Shares held by it on the
       Signing Date and acquired by it through the exercise or termination of
       the options according to Section 3.7 and (ii) cash. InCentive shall
       procure that:

       (a)  any Centerpulse Shares or options on Centerpulse Shares held by any
            of its direct or indirect subsidiaries are transferred to InCentive
            prior to the disposal of such subsidiaries;

       (b)  the consideration for such divestitures consists in cash and is
            paid, without any contingency or condition, by the respective buyer
            in full prior to the expiry of the Offer Period without there being
            any deferred component to be paid or collected after the expiry of
            the Offer Period; and

       (c)  a fair and transparent sales process is conducted in respect of the
            private equity investments;

       (d)  the sale and purchase agreements in relation to InCentive's direct
            or indirect subsidiaries and the sale and purchase agreements in
            relation to InCentive's

                                      -11-

<PAGE>

       direct or indirect private equity interests, do not contain any
       representations or warranties or indemnities or other residual
       liabilities of InCentive.

3.10.  Termination of Certain Agreements

       InCentive shall terminate, or procure its release after the Signing Date
       from all material agreements to which it is a party, including bank
       guarantees (indemnities) and keep-well obligations and material
       agreements with, banks and asset managers. To the extent that payments
       have to be made under such agreements by InCentive after the expiry of
       the Offer Period, such future payments shall be taken into account in
       full in calculating the Adjusted NAV.

3.11.  Determination of the Adjusted NAV and Establishment of Interim Financials

       InCentive shall procure that the Adjusted NAV is determined according to
       Section 2.2 and that interim financial statements of InCentive as at the
       last day of the Offer Period are established, consisting of a balance
       sheet, profit and loss statements and notes (the "Interim Financials"),
       and that the determination of the Adjusted NAV by InCentive and its
       auditors PricewaterhouseCoopers and the Interim Financials are delivered
       to Smith & Nephew in a timely manner, i.e. on the second Business Day,
       after the expiry of the Offer Period in order to allow Smith & Nephew to
       publish the definite Purchase Price in the notification of the interim
       results of the Public Tender Offer by the fourth Business Day after the
       expiry of the Offer Period. InCentive shall procure that Ernst & Young,
       acting on behalf of Smith & Nephew, are given reasonable opportunity to
       participate in the preparation of the Interim Financials and the
       determination of the Adjusted NAV by InCentive and its auditors
       PricewaterhouseCoopers.

3.12.  Collection of Receivables

       InCentive shall use reasonable best efforts to collect any receivables
       prior to the expiry of the Offer Period.

3.13.  Further Undertakings by InCentive

       Prior to the expiry of the Offer Period, InCentive shall:

                                      -12-

<PAGE>

       (a)  not issue any new shares or equity related financial instruments;
            and

       (b)  comply with all disclosure and reporting obligations under the SESTA
            and the related ordinances;

       (c)  provide in a timely manner the information required by Smith &
            Nephew in relation to the preparation of the Offer Documents.

3.14.  Tier I Test

       InCentive does not know, or have reason to know, that more than 10% of
       the outstanding InCentive Shares, after deducting from the outstanding
       amount any InCentive Shares held by InCentive or shareholders holding in
       excess of 10% of the outstanding InCentive Shares, are held by U.S.
       holders.

4.     CONDUCT OF BUSINESS BETWEEN THE SIGNING DATE AND THE SETTLEMENT DATE

       Except as otherwise contemplated by this Agreement, during the period
       from the Signing Date until the Settlement Date, each of InCentive and
       its subsidiaries and Smith & Nephew and its subsidiaries shall conduct
       their respective operations according to their ordinary and usual course
       of business and consistent with past practice and use all reasonable
       efforts consistent with prudent business practice to preserve intact the
       business organisation, to keep available the services of its and their
       current officers and key employees and to maintain existing relationships
       with those having significant business relationships with the respective
       party and its subsidiaries, in each case in all material respects.

5.     COVENANTS

5.1.   Merger and Other Filings

       Subject to the terms and conditions of this Agreement and to the
       fiduciary duties of the board of directors under applicable law as
       advised by legal counsel, InCen-

                                      -13-

<PAGE>

       tive and Smith & Nephew shall use all reasonable efforts to take, or
       cause to be taken, all appropriate action, and to do, or cause to be
       done, all things necessary, proper or advisable under applicable laws and
       regulations, including without limitation to make all national filings
       under applicable competition laws, to complete and make effective, as
       soon as practicable, the transactions contemplated by this Agreement.

5.2.   Notification of Certain Matters

       InCentive shall give prompt notice to Smith & Nephew, and Smith & Nephew
       shall give prompt notice to the InCentive, of any failure of such party
       to comply with or satisfy any covenant, condition or agreement to be
       complied with or satisfied by it hereunder.

5.3.   Corporate Name, Trademarks and Domain Name "InCentive"

5.3.1. As from the Settlement Date, any rights to use the word or logo
       "InCentive" or any combination including the word or logo "InCentive" in
       connection with corporate names, trade names, trade and service marks,
       domain names, logos or otherwise shall be the sole and unrestricted
       property of InCentive Asset Management AG or any other company controlled
       by or under common control of Rene Braginsky. Any transfer by InCentive
       shall be effected without residual liabilities to InCentive.

5.3.2. Smith & Nephew shall procure that InCentive and its subsidiaries as soon
       as possible and in no event later than three months after the Settlement
       Date change their the corporate names, trade names, trade and service
       marks, domain names and logos so that they no longer include the word or
       logo "InCentive" or any combination containing the word or logo
       "InCentive" or any other word or words or logo or logos resembling the
       word or logo "InCentive". Subject to the first sentence of this Section
       5.3.2, as from the Settlement Date, Smith & Nephew shall not use, and
       shall procure that InCentive and its subsidiaries cease and desist from
       using, the word or logo "InCentive" or any combination including the word
       or logo "InCentive" in any manner whatsoever in connection with corporate
       names, trade names, trade and service marks, domain names, logos or
       otherwise.

                                      -14-

<PAGE>

6.     INDEMNITY

       In the event that InCentive or any of its subsidiaries acquires or agrees
       to acquire any Centerpulse Shares or any InCentive Shares or any rights
       to acquire Centerpulse Shares or InCentive Shares after the Signing Date
       and Smith & Nephew is, as a result of any such acquisition, required by
       law to increase the offer price under the Centerpulse Tender Offer or the
       Public Tender Offer, then InCentive shall indemnify Smith & Nephew for,
       and hold Smith & Nephew harmless from, any damages, loss, claims, cost
       and expenses (including reasonable attorney's fees and expenses) incurred
       or payable by Smith & Nephew as a result of such required offer price
       increase, provided that InCentive shall have the right to defend against
       such asserted obligation of Smith & Nephew to increase the offer price.
       Any such asserted obligation of Smith & Nephew shall be included as a
       liability in the calculation of the Adjusted NAV per InCentive Share
       pursuant to Section 2.2.

7.     TERMINATION

7.1.   By InCentive

       InCentive shall have the right to terminate this Agreement by notice to
       Smith & Nephew with immediate effect in any of the following events:

       (a)  The Pre-Announcement is not made according to Section 2.1.2.

       (b)  In the circumstances envisaged by Section 3.2.3(c) of the Tender
            Agreement, after release of the InCentive Shares as set forth
            therein.

       (c)  Any of the conditions of the Public Tender Offer is not satisfied or
            waived by Smith & Nephew according to the Pre-Announcement and the
            Offer Prospectus, as the case may be, or the Public Tender Offer is
            not successful for any other reason.

7.2.   By Smith & Nephew

       Smith & Nephew shall have the right to terminate this Agreement by notice
       to InCentive with immediate effect if (a) any of the conditions of the
       Public Tender Of-

                                      -15-

<PAGE>

       fer is not satisfied or waived by Smith & Nephew according to the
       Pre-Announcement and the Offer Prospectus, (b) the Public Tender Offer
       fails for any other reason; or (c) there is a breach by InCentive of
       Section 3.2 hereof. Smith & Nephew shall have the right to terminate this
       Agreement partially if an event such as is set forth in Section 3.2 has
       occurred and Smith & Nephew is, as a result thereof, required by law to
       increase the offer price under the Centerpulse Tender Offer or the Public
       Tender Offer, to the extent necessary to avoid an obligation to increase
       the Offer Price pursuant to article 10 (6) TOO.

7.3.   Effect of Termination

       In the event of a termination by Smith & Nephew or InCentive, the
       provisions of this Agreement shall cease to have any effect except for
       the provisions of Section 8 and Section 9 which shall continue to be in
       effect for an indefinite period of time. Any such termination shall be
       without prejudice to the liabilities of any Party for breach of this
       Agreement prior to termination.

8.     MISCELLANEOUS

8.1.   Entire Agreement; Modifications

       Except for the confidentiality agreement executed in connection with and
       prior to this Agreement, this Agreement constitutes the entire agreement
       of the Parties concerning the object of this Agreement and supersedes all
       previous agreements or arrangements, negotiations, correspondence,
       undertakings and communications, oral or in writing. This Agreement
       including this Section shall be modified only by an agreement in writing
       executed by the Parties which shall explicitly refer to this Section.

8.2.   No Waiver

       The failure of either of the Parties to enforce any of the provisions of
       this Agreement or any rights with respect hereto shall in no way be
       considered as a waiver of such provisions or rights or in any way affect
       the validity of this Agreement. The

                                      -16-

<PAGE>

       waiver of any breach of this Agreement by either Party shall not operate
       to be construed as a waiver of any other prior or subsequent breach.

8.3.   Severability

       If any provision of this Agreement is held to be invalid or unenforceable
       for any reason, such provision shall, if possible, be adjusted rather
       than voided, in order to achieve a result which corresponds to the
       fullest possible extent to the intention of the Parties. The nullity or
       adjustment of any provision of this Agreement shall not affect the
       validity and enforceability of any other provision of this Agreement,
       unless this appears to be unreasonable for any of the Parties.

8.4.   Notices

       Any notice, request or instruction to be made under or in connection with
       this Agreement to InCentive shall be made to InCentive Asset Management
       AG who shall act as notification agent for InCentive under this
       Agreement. Any notice, request or instruction to be made under this
       Agreement shall be made in writing and be delivered by registered mail or
       courier or by facsimile (to be confirmed in writing delivered by
       registered mail or courier) to the following addresses (or such other
       addresses as may from time to time have been notified according to this
       Section 8.4):

       (a)  If to Smith & Nephew:    Smith & Nephew plc.
                                     Attn. of Company Secretary
                                     Heron House
                                     15 Adam Street
                                     London WC2N 6LA
                                     United Kingdom
                                     Facsimile: +44 207 930 3353

       (b)  If to Smith & Nephew
            Group plc:               Smith & Nephew Group plc.
                                     Attn. of Company Secretary
                                     122 Moulin de la Ratte
                                     CH-1236 Cartigny, Geneva

                                      -17-

<PAGE>

                                    Switzerland

                                    with copies to:

                                    Smith & Nephew plc.
                                    Attn. of Company Secretary
                                    Heron House
                                    15 Adam Street
                                    London WC2N 6LA
                                    United Kingdom
                                    Facsimile: +44 207 930 3353

       (b)  If to InCentive:        InCentive Asset Management AG
                                    Todistrasse 36
                                    8002 Zurich
                                    Switzerland
                                    Facsimile: + 41 1 205 93 05

                                    with copies to:

                                    Lombard Odier Darier Hentsch & Cie
                                    Zurich Branch
                                    Attn. of Mr. Romeo Cerutti
                                    Sihlstrasse 20
                                    CH-8021 Zurich
                                    Switzerland
                                    Facsimile: +41 1 214 13 39

                                    Lenz & Staehelin
                                    Attn. of Mr. Rudolf Tschani
                                    Bleicherweg 58
                                    CH-8027 Zurich
                                    Switzerland
                                    Facsimile: +41 1 204 12 00

       Any notice, request or instruction made under or in connection with this
       Agreement shall be deemed to have been delivered on the Business Day on
       which it has

                                      -18-

<PAGE>

         been dispatched or the fax confirmation been received by the Party
         making such notice, request or instruction.

8.5.     Confidentiality and Press Releases

         Without the prior written consent of the other Party, either Party
         shall not disclose to any third party and keep in strict confidence
         this Agreement and its contents and shall not publish any press release
         or make any public announcement in respect of the transactions
         contemplated by this Agreement, unless any such disclosure, press
         release or public announcement is required under applicable laws or
         stock exchange regulations or ordered by any competent judicial or
         regulatory authority or by any competent stock exchange (in which case
         the Parties shall, to the extent permissible, consult with each other
         prior to any such disclosure).

8.6.     Assignment

         None of the Parties shall assign this Agreement or any rights or
         obligations under this Agreement to any third party without the prior
         written consent of all of the other Parties.

8.7.     Cost and Expenses; Taxes

         Subject to Section 8.7, each Party shall bear all cost, expenses and
         taxes incurred by it in connection with the transactions contemplated
         by this Agreement, provided that (a) Smith & Nephew shall bear and pay
         the Swiss securities transfer tax (Umsatzabgabe) and any transfer cost
         and expenses resulting from the transfer of InCentive Shares and
         Centerpulse Shares to Smith & Nephew or Smith & Nephew Shares to the
         Shareholders, and (b) the transaction cost and expenses incurred by
         InCentive shall be subtracted in calculating the Adjusted NAV.

8.8.     Break-up Fee

8.8.1.   Smith & Nephew, and not, for the avoidance of doubt, in any
         circumstances, Smith & Nephew Group plc, shall pay to InCentive a lump
         sum cost reimbursement of CHF 4 million in the event that the Public
         Tender Offer is not successful for a reason attributable to (i) the
         failure of Smith & Nephew to publish the Pre-

                                      -19-

<PAGE>

         Announcement or any other material breach of this Agreement by Smith &
         Nephew, (ii) the contravention by Smith & Nephew of any applicable laws
         and regulations applying to the Public Tender Offer, or (iii) the
         non-satisfaction of the conditions listed in par. g) of the conditions
         section of the Pre-Announcement. The cost reimbursement is agreed for
         the sole purpose of compensating InCentive for frustrated actions and
         negotiation expenses and is not intended in any way whatsoever to
         coerce Smith & Nephew into completing the Public Tender Offer. Nothing
         contained in this Section 8.8.1 shall be deemed or construed to
         restrict the right of InCentive or the Shareholders to request specific
         performance or claim damages in excess of CHF 4 million.

8.8.2.   InCentive shall pay to Smith & Nephew a lump sum cost reimbursement of
         CHF 4 million in the event that the Public Tender Offer is not
         successful for a reason attributable to (i) a material breach by
         InCentive of this Agreement, (ii) the contravention by InCentive of any
         applicable laws and regulations applying to the Public Tender Offer, or
         (iii) the non-satisfaction of the conditions listed in par. c) of the
         conditions section of the Pre-Announcement, or (iv) the successful
         completion of a competing public tender offer for InCentive Shares by a
         third party. The cost reimbursement is agreed for the sole purpose of
         compensating Smith & Nephew for frustrated actions and negotiation
         expenses. Nothing contained in this Section 8.8.2 shall be deemed or
         construed to restrict the right of Smith & Nephew to request specific
         performance or claim damages in excess of CHF 4 million.

9.       APPLICABLE LAW AND DISPUTE RESOLUTION

9.1.     This Agreement is subject to and governed by Swiss substantive law.

9.2.     Any disputes arising out of or in connection with this Agreement,
         including disputes regarding its conclusion, binding effect, amendment
         and termination, shall be finally resolved to the exclusion of the
         ordinary courts by a three-person arbitral tribunal in accordance with
         the International Arbitration Rules of the Zurich Chamber of Commerce.
         The arbitration shall be conducted in English and the place of
         arbitration shall be Zurich.

                                      -20-

<PAGE>

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
above written.

Smith & Nephew plc

/s/ Christopher J. O'Donnell        /s/ Peter Hooley
------------------------------      ---------------------------------------

Name: Christopher J. O'Donnell      Name: Peter Hooley
     -------------------------           ----------------------------------

Title: Chief Executive              Title: Finance Director
      ------------------------            ---------------------------------

Meadowclean Limited

/s/ Antoine Vidts                   /s/ Pierre-Andre Chapatte
------------------------------      ---------------------------------------

Name: Antoine Vidts                 Name: Pierre-Andre Chapatte
     -------------------------           ----------------------------------

Title: Director                     Title: Director
      ------------------------            ---------------------------------

InCentive Capital AG

/s/ Eric Stupp                      /s/ Thomas Wyler
------------------------------      ---------------------------------------

Name: Eric Stupp                    Name: Thomas Wyler
     -------------------------           ----------------------------------

Title: Director                     Title: Member of the Management Board
      ------------------------            ---------------------------------

                                      -21-

<PAGE>

                                  Schedule (D)

                       CENTERPULSE SHARES AND CALL OPTIONS
             ON CENTERPULSE SHARES OF INCENTIVE AT THE SIGNING DATE

As of the Signing Date, InCentive holds Centerpulse Shares and Centerpulse Share
Options as follows:

Mango Shares:

-------------------------------------
  No. of Shares           %
-------------------------------------
      1,554,577            13.140
-------------------------------------

Call Options on Mango Shares:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
  Counter-party     No. of Options     Strike Price (CHF)      Expiry      No. of Mango Shares       %
------------------------------------------------------------------------------------------------------------
<S>                 <C>                <C>                     <C>         <C>                       <C>
UBS                          200,000                  200.00   04/10/2003                 200,000      1.69
------------------------------------------------------------------------------------------------------------
ABN                           80,000                  195.00   04/10/2003                  80,000      0.68
------------------------------------------------------------------------------------------------------------
ABN                          160,000                  215.00   04/10/2003                 160,000      1.35
------------------------------------------------------------------------------------------------------------
Credit Suisse                100,000                  220.00   04/10/2003                 100,000      0.85
------------------------------------------------------------------------------------------------------------
LBF                           38,000                  240.00   05/15/2003                  38,000      0.32
------------------------------------------------------------------------------------------------------------
ABN                          105,000                  230.00   05/21/2003                 105,000      0.89
------------------------------------------------------------------------------------------------------------
Total                        683,000                                                      683,000      5.77
------------------------------------------------------------------------------------------------------------
</TABLE>

Aggregate:

                  -------------------------------------------
                         No.                   %
-------------------------------------------------------------
Shares:                    1,554,577                  13.140
-------------------------------------------------------------
Options:                     683,000                   5.773
-------------------------------------------------------------
Total:                     2,237,577                  18.913
-------------------------------------------------------------

<PAGE>

                                   Schedule 1

                                  DEFINED TERMS

The capitalised terms used in the Agreement shall have the meaning ascribed to
them in this Schedule 1.

       "Accepting Shareholders" shall have the meaning set forth in Section 2.2.

       "Acquisition Transaction" shall have the meaning set forth in Section
       3.1.

       "Adjusted NAV" shall have the meaning set forth in Section 2.2.

       "Available Shares" shall have the meaning set forth in Section 2.2.

       "Agreement" shall mean this agreement including all Schedules.

       "Business Day" shall mean a day on which SWX Swiss Exchange is open for
       normal trading.

       "Centerpulse" shall have the meaning set forth in Recital (B).

       "Centerpulse Holding" shall have the meaning set forth in Section 2.2.

       "Centerpulse Pre-Announcement" shall mean the pre-announcement in respect
       of the Centerpulse Tender Offer contained in Schedule 2.4(b).

       "Centerpulse Shares" shall have the meaning set forth in Recital (B).

       "Centerpulse Tender Offer" shall have the meaning set forth in Recital
       (C).

       "CHF" shall mean Swiss Francs, being the lawful currency of Switzerland.

       "CO" shall mean the Swiss Code of Obligations (Obligationenrecht) of 30
       March 1911, as amended.

       "Excess Shares" shall have the meaning set forth in Section 2.2.

<PAGE>

       "Expert" shall have the meaning set forth in Section 3.4.2.

       "GBP" shall mean British Pound Sterling, being the lawful currency of the
       United Kingdom.

       "HK" shall mean Hans Kaiser.

       "III" shall mean III Institutional Investors International Corp.

       "InCentive" means InCentive Capital AG, as set out on the cover page of
       the Agreement and in Recital (D).

       "InCentive Shares" shall have the meaning set forth in Recital (D).

       "Interim Financials" shall have the meaning set forth in Section 3.11.

       "Offer Documents" shall have the meaning set forth in Section 2.4(a).

       "Offer Period" shall mean the period during which the Public Tender Offer
       is open for acceptance by the InCentive shareholders according to article
       14 (3) and (4) TOO (Angebotsfrist), excluding, for the avoidance of
       doubts, the Statutory Extension Period (Nachfrist).

       "Offer Price" shall have the meaning set forth in Section 2.2.

       "Offer Prospectus" shall have the meaning set forth in Section 2.4(a).

       "Party" shall mean any of, and "Parties" shall mean all of, the parties
       listed on the cover sheet of this Agreement.

       "Pre-Announcement" shall have the meaning set forth in Section 2.1.2.

       "Public Tender Offer" shall have the meaning set forth in Section 2.1.1.

       "RB" shall mean Rene Braginsky.

       "Representatives" shall mean RB and HK in their capacity as members of
       the board of directors of InCentive.

                                      -2-

<PAGE>

     "Schedule" shall mean each schedule attached to this Agreement.

     "Section" shall mean a section of this Agreement.

     "SESTA" shall mean the Stock Exchange and Securities Trading Act
     (Bundesgesetz uber die Borsen und den Effektenhandel) of 24 March 1995, as
     amended.

     "SESTO-FBC" shall mean the Stock Exchange and Securities Trading Ordinance
     of the Federal Banking Commission (Borsenverordnung-EBK) of 25 June 1997,
     as amended.

     "Settlement Date" shall mean the day on which the Public Tender Offer is
     settled (vollzogen) for the first time.

     "Shareholder" shall mean any of, and "Shareholders" shall mean all of, RB,
     HK, Z and III.

     "Signing Date" shall mean the date of this Agreement.

     "Smith & Nephew" shall mean Smith & Nephew plc. or Smith & Nephew Group
     plc., as set out on the cover page of this Agreement and in Recitals (A)
     and (C).

     "Smith & Nephew Shares" shall have the meaning set forth in Recital (C).

     "Statutory Extension Period" shall mean the additional acceptance period of
     10 Business Days following completion (Zustandekommen) of the Public Tender
     Offer according to article 14 (5) TOO (Nachfrist).

     "Tender Agreement" shall have the meaning set forth in Recital (F).

     "TOO" shall mean the Takeover Ordinance of the Takeover Commission
     (Verordnung der Ubernahmekommission uber offentliche Kaufangebote) of 21
     July 1997, as amended.

     "Treasury Shares" shall have the meaning set forth in Section 2.2.

     "Z" shall mean "Zurich" Versicherungs-Gesellschaft.

                                      -3-

<PAGE>

                                 Schedule 2.1.2

                                PRE-ANNOUNCEMENT

                                  See attached.

<PAGE>

                                                                  Schedule 2.1.2

Pre-annoucement of 20 March 2003
Translated from German

[SMITH & NEPHEW LOGO]

Pre-announcement of the Public Tender Offer

by

Smith & Nephew plc, London, UK

(Smith & Nephew plc will launch the public tender offer through a new parent
company of Smith & Nephew plc to be listed on the London Stock Exchange and the
SWX Swiss Exchange. Smith & Nephew plc will guarantee and be fully liable for
the obligations of the offeror)

for all the publicly held

Bearer Shares of InCentive Capital AG, Zug, with a nominal value of CHF 20

Introduction

Smith & Nephew plc ("Smith & Nephew") intends to launch a public tender offer
(the "InCentive Offer") on or about 16 April 2003 in accordance with art. 22 et
seq. of the Federal Act on Stock Exchanges and Securities Trading for all of the
publicly held bearer shares in InCentive Capital AG ("InCentive") with a nominal
value of CHF 20 each ("InCentive Shares").

<PAGE>

Current Situation

On 20 March 2003, Smith & Nephew and Centerpulse AG, Zurich, ("Centerpulse")
entered into a transaction agreement (the "Centerpulse Transaction Agreement")
in which they agreed to combine their businesses to create a leading global
orthopaedics company. Under the Centerpulse Transaction Agreement, Smith &
Nephew has undertaken to achieve this combination by way of a share and cash
offer (the "Centerpulse Offer") for all publicly held registered shares in
Centerpulse with a nominal value of CHF 30 each (the "Centerpulse Shares") by
Smith & Nephew.

Smith & Nephew has today released a separate pre-announcement relating to the
Centerpulse Offer.

InCentive is the largest shareholder of Centerpulse and holds, or has the right
to hold (after the exercise of its call options and lapse of related put
options), approximately 18.9% of the share capital of Centerpulse. On 20 March
2003, Smith & Nephew and InCentive entered into a transaction agreement (the
"InCentive Transaction Agreement"). Under the InCentive Transaction Agreement,
Smith & Nephew has undertaken to aquire, inter alia, InCentive's 18.9% interest
in Centerpulse by way of a share and cash offer for InCentive through Smith &
Nephew Group plc, the proposed new holding company of Smith & Nephew, which will
be a UK registered public company, resident in Switzerland, and listed on the
London Stock Exchange, with a secondary listing on the SWX Swiss Exchange. All
references to Smith & Nephew in this pre-announcement therefore include Smith &
Nephew Group plc or mean Smith & Nephew Group plc if the context so requires.

On the same date, Smith & Nephew entered into a tender agreement (the "Tender
Agreement") with the principal shareholders of InCentive, namely Zurich
Insurance Company, III Institutional Investors Corp., Mr. Rene Braginsky and Mr.
Hans Kaiser (the "Principal Shareholders"), who together hold approximately 77%
of InCentive's share capital. Under this Tender Agreement, the Principal
Shareholders have irrevocably undertaken, inter alia, to tender their InCentive
Shares under the InCentive Offer.

Offer Price

<PAGE>

The offer price for each InCentive Share shall be a + b where:
                                                  -----
                                                    c

a
=
the total amount of Smith & Nephew shares (the "Smith & Nephew Shares") and
amount of cash that would be payable under the Centerpulse Offer for the
Centerpulse Shares held by InCentive (the "Centerpulse Holding");

b
=
the adjusted net asset value (positive or negative) of InCentive (the "Adjusted
NAV") calculated as at the last day of the InCentive Offer period but excluding
the Centerpulse Holding and attributing no value to any InCentive Shares held by
InCentive or its subsidiaries (the "Treasury Shares"), as confirmed by
InCentive's auditors;

c
=
the total number of InCentive Shares in issue on the last day of the InCentive
Offer period less the number of Treasury Shares on that date.

The consideration for each InCentive Share will consist of (i) an element of
Smith & Nephew Shares and cash which will mirror InCentive's Centerpulse
Holding; plus or minus (ii) the cash attributable to Adjusted NAV of InCentive
excluding the Centerpulse Holding. If the Adjusted NAV is negative, then the
cash element attributable to the Centerpulse Holding shall be reduced, pro
tanto, and if after such reduction there is still a negative balance, the number
of Smith & Nephew Shares to be issued shall be reduced by a corresponding
amount.

The offer price will be adjusted for any dilutive effects in respect of the
InCentive Shares (to the extent they have not been reflected in the Adjusted
NAV) or the Smith & Nephew Shares (save for shares issued for management options
issued under the Smith & Nephew employee share schemes and disclosed in the
Smith & Nephew financial statements for the financial year 2002), including
dividend payments (save for dividends already declared by Smith & Nephew or an
interim dividend hereafter declared by Smith & Nephew in the normal course
consistent with past practice), capital increases below market value, or the
issuance of options (save for management options issued under the Smith & Nephew
employee share schemes in the normal course consistent with past practice),
warrants, convertible securities and other rights of any kind to acquire
InCentive Shares or Smith & Nephew Shares as the case may be.

The consideration payable for the Centerpulse Shares under the Centerpulse Offer
pre-announced today by Smith & Nephew comprises for each Centerpulse registered
share with a nominal value of CHF 30:

..    25.15 Smith & Nephew Shares; and
..    CHF 73.42 in cash

Mix and Match

Accepting InCentive shareholders under the InCentive Offer and accepting
Centerpulse shareholders under the Centerpulse Offer (together the "Accepting
Shareholders") may elect to take fewer Smith & Nephew Shares or more Smith &
Nephew Shares than their basic entitlement under the relevant Offer, but
elections under both Offers (taken together) to take more Smith & Nephew Shares
(together the "Excess Shares") will only be satisfied to the extent that
elections have been made under both Offers (taken together) by Accepting
Shareholders to take fewer Smith & Nephew Shares (together referred to as the
"Available Shares"). The Available Shares will be allocated to the applicants
for Excess Shares in proportion to the number of Excess Shares applied for. If
the total number of Available Shares exceeds the total number of Excess Shares
applied for, the Available Shares shall be limited to an amount equal to the
Excess Shares. Once the share allocations have been determined, the cash element
of the consideration will be reduced or increased (as the case may be) for each
Accepting Shareholder who has been allocated an increased or reduced number of
Smith & Nephew Shares. All calculations shall be made by reference to the number
of acceptances and elections as of the last day of the additional acceptance
period.

<PAGE>

Offer Period

The offer prospectus for the InCentive Offer is likely to be published on or
about 16 April 2003.

It is intended that the InCentive Offer will remain open for 40 trading days,
i.e. probably from 16 April 2003 until 4pm CET on 17 June 2003. Smith & Nephew
reserves the right to extend the offer period beyond 40 trading days with the
prior approval of the Swiss Takeover Board.

Conditions

The InCentive Offer is expected to be subject to the following conditions:

a)   All conditions of the Centerpulse Offer having been satisfied or waived by
     Smith & Nephew.

b)   The General Meeting of InCentive shareholders having:

     i)   received the resignation of all current members of InCentive's board
          of directors or required these to resign and elected the persons
          proposed by Smith & Nephew as new members of the board of directors,
          subject to all other conditions to this offer being accepted or waived
          by Smith & Nephew; and

     ii)  to the extent required approved the InCentive Transaction Agreement
          and the actions contemplated thereunder.

c)   Smith & Nephew having received valid acceptances for at least 80% of the
     InCentive Shares outstanding at the expiry of the (possibly extended) offer
     period.

d)   No court or regulatory authority having issued a decision or an order which
     prohibits the InCentive Offer or its completion or renders this offer or
     its completion unlawful.

e)   InCentive or any of its subsidiaries not having disposed, or agreed to
     dispose (including acceptance of any offer), of any Centerpulse Shares held
     by it or its subsidiaries and not having become obliged to do so, save for
     any such transfer within the InCentive group.

f)   Until the end of the (possibly extended) offer period no litigation
     proceedings having been initiated against InCentive and its subsidiaries
     which have not been made public prior to the date hereof and which are
     neither insured nor provisioned for in the consolidated balance sheet of
     InCentive and whose amount in dispute is in excess of CHF 35 million in the
     aggregate.

g)   The General Meetings of Smith & Nephew shareholders having passed the
     necessary resolutions to effect a Court Scheme under which Smith & Nephew
     will become a wholly owned subsidiary of Smith & Nephew Group plc, and the
     Court Scheme having become effective.

Smith & Nephew reserves the right to waive one or more of the conditions set out
above other than condition g), either in whole or in part, and to withdraw the
InCentive Offer if one or more of the above conditions is not met.

Restrictions

General

This offer will not be made in any country where such offer would be considered
illegal or would otherwise violate any applicable law or regulation or where
Smith & Nephew may be obliged to change the terms of the offer, to file an
additional application with any authorities or other institutions or to
undertake additional measures in relation to this offer. It is not foreseen to
extend the offer to such jurisdictions. Documents in relation to this
transaction must not be distributed in such jurisdictions or sent to such
jurisdictions. Persons in such jurisdictions must not use these documents for
marketing purposes for sales of shares of InCentive.

<PAGE>

US Sales Restrictions

This offer will not be made in or into the United States of America and may only
be accepted outside the United States of America. Accordingly, copies of this
pre-announcement are not being made and should not be mailed or otherwise
distributed or sent in or into or from the United States of America and persons
receiving this pre-announcement (including custodians, nominees and trustees)
must not distribute or send them into or from the United States of America.

Information

Detailed information on the InCentive Offer is expected to be published on or
about 16 April 2003 in the same media.

Identification

                                        Securities No.  ISIN           Bloomberg

Bearer shares InCentive Capital AG      286089          CH0002860895   INC SW
Registered shares Smith & Nephew plc    922320          GB0009223206   SN LN
Registered shares Centerpulse AG        654485          CH0006544859   CEPN SW

For the bank entrusted with the technical execution of the offer:
Lombard Odier Darier Hentsch & Cie.

[LOGOS LAZARD AND LODH]

<PAGE>

                                  Schedule 2.2.(a)

                        DETERMINATION OF THE ADJUSTED NAV

The Adjusted NAV shall be determined according to this Schedule:

1.   Except as otherwise set forth in this Schedule, the Adjusted NAV shall be
     determined and calculated by applying the methods and principles that were
     applied by InCentive in determining its net asset value prior to the
     Signing Date on a consistent basis.

2.   The Adjusted NAV shall be net of the impact of any distributions
     (Ausschuttungen), if any, per InCentive Share made by InCentive from the
     Signing Date until the Settlement Date.

3.   All and any transaction costs payable by InCentive in connection with the
     Agreement or the transactions contemplated by the Agreement shall be
     deducted from the Adjusted NAV.

4.   Treasury Shares shall not be taken into account in calculating the Adjusted
     NAV.

5.   For the avoidance of doubt, the value of Centerpulse Shares is excluded
     from the definition of the Adjusted NAV and is accordingly not included in
     the calculation of the Adjusted NAV.

6.   A liability of InCentive under section 6 of the Transaction Agreement shall
     be included as a liability in the determination of the Adjusted NAV.

<PAGE>

                                  Schedule 2.4.(b)

                          CENTERPULSE PRE-ANNOUNCEMENT

                                  See attached.

<PAGE>

                                                                 Schedule 2.4(b)

   [SMITH & NEPHEW LOGO]

   -----------------------------------------------------------------------------
   20 March 2003

   Pre-announcement of the Public Tender Offer (Translation from German)

   By

   Smith & Nephew plc, London, UK

   (Smith & Nephew plc will launch the public tender offer through a new parent
   company of Smith & Nephew plc to be listed on the London Stock Exchange and
   the SWX Swiss Exchange. Smith & Nephew plc will guarantee and be fully liable
   for the obligations of the offeror)

   for all the publicly held

   Registered Shares of Centerpulse AG, Zurich, with a nominal value of CHF 30
   each

   INTRODUCTION

   Smith & Nephew plc ("Smith & Nephew") intends to launch a public tender offer
   (the "Centerpulse Offer") on or about 16 April 2003 in accordance with art.
   22 et seq. of the Federal Act on Stock Exchanges and Securities Trading for
   all of the publicly held registered shares in Centerpulse AG ("Centerpulse")
   with a nominal value of CHF 30 each.

   The Centerpulse Offer will be made available to all shareholders on
   substantially the same terms and conditions but for regulatory reasons will
   take the form of (a) a public public tender offer in Switzerland applicable
   to all holders of Centerpulse shares not located in the United States in
   accordance with the Swiss Stock Exchanges and Securities Trading Act
   ("SESTA") and its implementing rules and regulations; and (b) a public tender
   offer in the United States (the "US Offer") applicable only to holders of
   Centerpulse shares (including the Centerpulse shares represented by American
   Depositary Shares, "ADSs") located in the United States in accordance with
   the Securities Exchange Act of 1934, as amended, and the Securities Act of
   1933, as amended.

   CURRENT SITUATION

   On 20 March 2003, Smith & Nephew and Centerpulse entered into a transaction
   agreement (the "Transaction Agreement") in which they agreed to combine their
   businesses to create a leading global orthopaedics company. Under this
   Transaction Agreement, Smith & Nephew has undertaken to achieve this
   combination by way of a share and cash offer for Centerpulse by Smith &
   Nephew through Smith & Nephew Group plc, the proposed new holding company of
   Smith & Nephew, which will be a UK registered public company, resident in
   Switzerland, and listed on the London Stock Exchange, with a secondary
   listing on the SWX Swiss Exchange. All references to Smith & Nephew in this
   pre-announcement therefore include Smith & Nephew Group plc or mean Smith &
   Nephew Group plc if the context so requires.

   At the same time, Smith & Nephew entered into a separate transaction
   agreement with InCentive Capital AG ("InCentive"). Under this transaction
   agreement, Smith & Nephew has undertaken to procure that Smith & Nephew Group
   plc launches a public tender offer (the "InCentive Offer") on or about 16
   April 2003 for all outstanding bearer shares in InCentive.

   InCentive, an investment company listed on the SWX Swiss Exchange, holds, or
   has the right to hold (after the exercise of its call options and lapse of
   related put options), approximately 18.9% of the share capital of
   Centerpulse. Shareholders representing 77% of InCentive's issued share
   capital have given irrevocable undertakings to accept the InCentive Offer.
   InCentive's portfolio is currently being rationalised so as to comprise
   Centerpulse shares and cash, and the terms of the InCentive Offer will be
   such that in respect of its holding in Centerpulse they will reflect the
   terms of Smith & Nephew's offer for Centerpulse itself. InCentive
   shareholders will, therefore, not receive a premium for the Centerpulse
   shares held by InCentive in relation to the other Centerpulse shareholders.

   Smith & Nephew has today released a separate pre-announcement relating to the
   InCentive Offer.

   OFFER PRICE

   The price offered for each Centerpulse registered share with a nominal value
   of CHF 30 comprises:

   .  25.15 Smith & Nephew shares; and

<PAGE>

   .  CHF 73.42 in cash

   The offer price will be adjusted for any dilutive effects in respect of the
   Centerpulse shares or the Smith & Nephew shares (save for shares issued for
   management options issued under the Centerpulse or Smith & Nephew employee
   share schemes and disclosed in the Centerpulse or Smith & Nephew financial
   statements for the financial year 2002), including dividend payments (save
   for dividends already declared by Smith & Nephew or an interim dividend
   hereafter declared by Smith & Nephew in the normal course consistent with
   past practice), capital increases below market value, or the issuance of
   options (save for management options issued under the Smith & Nephew employee
   share schemes in the normal course consistent with past practice), warrants,
   convertible securities and other rights of any kind to acquire Centerpulse
   shares or Smith & Nephew shares as the case may be.

   Mix and Match

   Accepting Centerpulse shareholders under the Centerpulse Offer and accepting
   InCentive shareholders under the InCentive Offer (together the "Accepting
   Shareholders") may elect to take fewer Smith & Nephew shares or more Smith &
   Nephew shares than their basic entitlement under the relevant Offer, but
   elections under both Offers (taken together) to take more Smith & Nephew
   shares (together the "Excess Shares") will only be satisfied to the extent
   that elections have been made under both Offers (taken together) by Accepting
   Shareholders to take fewer Smith & Nephew shares (together referred to as the
   "Available Shares"). The Available Shares will be allocated to the applicants
   for Excess Shares in proportion to the number of Excess Shares applied for.
   If the total number of Available Shares exceeds the total number of Excess
   Shares applied for, the Available Shares shall be limited to an amount equal
   to the Excess Shares. Once the share allocations have been determined, the
   cash element of the consideration will be reduced or increased (as the case
   may be) for each Accepting Shareholder who has been allocated an increased or
   reduced number of Smith & Nephew shares. All calculations shall be made by
   reference to the number of acceptances and elections as of the last day of
   the additional acceptance period

   OFFER PERIOD

   The offer prospectus for the Centerpulse Offer is likely to be published on
   or about 16 April 2003.

   It is intended that the Centerpulse Offer will remain open for 40 trading
   days, i.e. probably from 16 April 2003 until 4pm CET on 17 June 2003. Smith &
   Nephew reserves the right to extend the offer period - with the prior
   approval of the Swiss Takeover Board - beyond 40 trading days.

   CONDITIONS

   The Offer is expected to be subject to the following conditions:

   1. The General Meetings of Smith & Nephew shareholders having:

      a.  approved the transactions contemplated by the Centerpulse Transaction
          Agreement; and

      b.  passed the necessary resolutions to effect a Court Scheme under which
          Smith & Nephew will become a wholly owned subsidiary of Smith & Nephew
          Group plc

      and the Court Scheme having become effective.

   2. The Smith & Nephew shares to be issued in connection with the Centerpulse
      Offer having been admitted to the Official List of the United Kingdom
      Listing Authority and to trading on the London Stock Exchange plc and the
      listing of the additional ADSs of Smith & Nephew on the New York Stock
      Exchange to be issued in connection with the US Offer having been
      approved.

   3. All competent EU, US and other foreign authorities having approved and/or
      granted clearance of the acquisition of Centerpulse without a party being
      required to meet any condition or requirement giving rise to (a) costs
      and/or loss of earnings before interest, tax and amortisation ("EBITA") in
      excess of CHF 23 million in the aggregate; or (b) a decrease in
      consolidated turnover of CHF 75 million in the aggregate of the combined
      group. In addition, no other orders or directions by any court or other
      authority prohibiting the completion of the Centerpulse Offer having been
      issued.

   4. The Registration Statement on Form F-4 to be filed by Smith & Nephew with
      the Securities and Exchange Commission ("SEC") in connection with the US
      Offer (the "Registration Statement") having become effective in accordance
      with the provisions of the US Securities Act; no stop order suspending the
      effectiveness of the Registration Statement having been issued by the SEC
      and no proceedings for that purpose having been initiated by the SEC and
      not concluded or withdrawn.

   5. Smith & Nephew having received valid acceptances for at least 75% of the
      total number of the Centerpulse shares outstanding (including Centerpulse
      shares represented by ADSs and, provided the InCentive Offer has become
      unconditional, Centerpulse Shares held by InCentive) on a fully diluted
      basis at the expiry of the (possibly extended) offer period.

   6. Three of Centerpulse's current board members having resigned from
      Centerpulse's board of directors subject to completion of the Centerpulse
      Offer, and the other board members having entered into a fiduciary
      arrangement with Smith & Nephew covering the period until a Centerpulse

<PAGE>

      General Meeting will have resolved to elect the persons proposed by Smith
      & Nephew to the board of directors of Centerpulse, subject to completion
      of the Centerpulse Offer.

   7. Centerpulse until the end of the (possibly extended) offer period
      (save for extensions beyond the statutory 40 day trading period solely as
      a result of the Court Scheme not having become effective) not having:

      a.  become subject to a mandated recall for a product, the consolidated
          turnover of which product family exceeded CHF 75 million in
          Centerpulse's consolidated prior year results and such recall having
          resulted, or, according to the opinion of an investment bank or
          accounting firm of international repute to be appointed by Smith &
          Nephew with the consent of Centerpulse (the "Expert"), likely to
          result, in costs and/or loss of EBITA (after insurance payable to
          Centerpulse) in excess of CHF 23 million; or

      b.  suffered a disablement of its manufacturing facilities in Winterthur
          or Austin having resulted, or, according to the opinion of the Expert,
          likely to result, in costs and/or loss of EBITA (after insurance
          payable to Centerpulse) in excess of CHF 23 million.

   Smith & Nephew reserves the right to waive one or more of the conditions set
   out above (other than condition 1, 2, 3 as to the requirement to obtain
   merger approval as such and 4) either in whole or in part, or to withdraw the
   Centerpulse Offer if one or more of the above conditions is not met.

   SALES RESTRICTIONS

   This pre-announcement is not being made, directly or indirectly, in or into,
   or by use of the mails or by any means or instrumentality (including, without
   limitation, telephonically or electronically) of interstate or foreign
   commerce of, or of any facility of a national securities exchange of, Canada,
   Australia or Japan. Accordingly, copies of this document and any related
   documents are not being, and must not be, directly or indirectly, mailed or
   otherwise forwarded, distributed or sent in or into or from, Canada,
   Australia or Japan and persons receiving this document and any related
   documents (including custodians, nominees and trustees) must not mail or
   otherwise forward, distribute or send it in or into or from, Canada,
   Australia or Japan.

   Relevant clearances have not been, nor will they be, obtained from the
   securities commission of any province or territory of Canada; no prospectus
   will be lodged with, or registered by, the Australian Securities and
   Investments Commission or the Japanese Ministry of Finance; and the new Smith
   & Nephew shares will not be registered under or offered in compliance with
   applicable securities laws of any state, province, territory or jurisdiction
   of Canada, Australia or Japan. Accordingly, the new Smith & Nephew shares may
   not (unless an exemption under relevant securities laws is applicable) be
   offered, sold, resold or delivered, directly or indirectly in or into Canada,
   Australia or Japan or any other jurisdiction as to do so may constitute a
   violation of the relevant laws of, or require registration thereof in such
   jurisdiction or to, or for the account or benefit of, a person in or resident
   in Canada, Australia or Japan.

   Any offer in the United States will only be made through a prospectus which
   is part of a registration statement on Form F-4 to be filed with the SEC.
   Centerpulse shareholders who are US persons or are located in the United
   States are urged to carefully review the registration statement on Form F-4
   and the prospectus included therein, the Schedule TO and other documents
   relating to the Centerpulse Offer that will be filed by Smith & Nephew with
   the SEC because these documents will contain important information relating
   to the Centerpulse Offer. You are also urged to read the related
   solicitation/recommendation statement on Schedule 14D-9 that will be filed
   with the SEC by Centerpulse relating to the Centerpulse Offer. You may obtain
   a free copy of these documents after they have been filed with the SEC, and
   other documents filed by Smith & Nephew and Centerpulse with the SEC, at the
   SEC's Web site at www.sec.gov. Once the registration statement on Form F-4,
   as well as any documents incorporated by reference therein, the Schedule TO
   and the Schedule 14D-9 are filed with the SEC, you will also be able to
   inspect and copy these documents at the public reference room maintained by
   the SEC at 450 Fifth Street, NW, Washington, D.C. 20549. Please call the SEC
   at 1-800-SEC-0330 for further information about the public reference room.
   YOU SHOULD READ THE PROSPECTUS AND THE SCHEDULE 14D-9 CAREFULLY BEFORE MAKING
   A DECISION CONCERNING THE OFFER.

<PAGE>

   INFORMATION

   Detailed information on the Centerpulse Offer is expected to be published on
   or about 16 April 2003 in the same media.

   IDENTIFICATION

                                      SECURITIES NO.
                                           ISIN
                                         BLOOMBERG

   .  Registered share of Centerpulse AG

                                          654485
                                       CH0006544859
                                          CEPN SW

   .  Registered share of Smith & Nephew plc

                                          922320
                                       GB0009223206
                                           SN LN

   .  Bearer share of InCentive Capital AG

                                          286089
                                       CH0002860895
                                          INC SW

   [LOGO LAZARD]

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