Document:

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                                                                    Exhibit 10.5

                                                  February 21, 2001

J. Raymond Elliott
54595 Country Road 8
Middlebury, Indiana  46540

                            PERSONAL AND CONFIDENTIAL

Dear Ray:

     Previously you and Bristol-Myers Squibb Company ("Bristol-Myers Squibb")
executed a letter agreement dated October 15, 2000 (the "2000 Agreement"), and a
letter amendment dated January 4, 2001 (the "2001 Amendment"), that described
the bonus payments and other incentives that you would receive in the event that
Zimmer, Inc. ("Zimmer") was sold to a third-party entity on or before September
30, 2001. It now appears possible that Bristol-Myers Squibb may divest its
interest in Zimmer through a "spin-off" transaction involving the distribution
of Zimmer stock to Bristol-Myers Squibb shareholders (the "Spin-Off"). The
Spin-Off may be preceded by a public offering of Zimmer shares (the "IPO").
During the divestiture process, we believe that operating the Zimmer business as
usual is in the best interests of Bristol-Myers Squibb, Zimmer and its
employees. To provide assurance to you and to help ensure that the Zimmer
business is managed and operated efficiently and effectively both before and
after the divestiture, Bristol-Myers Squibb and Zimmer wish to offer you the
incentives described in this letter. If these incentives are satisfactory and
you wish to participate, please sign and return this letter in the manner
described on the last page of this letter.

     The terms and conditions of this letter agreement will apply in the event
of an IPO or Spin-Off of Zimmer that occurs on or before September 30, 2001 and,
with respect to payments and benefits contingent upon a Spin-Off, the
consummation of the Spin-Off on or before March 31, 2002. In the event of a
disposition of Zimmer which is not an IPO or Spin-Off occurring on or before
September 30, 2001 and, with respect to payments and benefits contingent upon a
Spin-Off, if the Spin-Off is not completed on or before March 31, 2002, the
terms and conditions of this letter agreement will terminate and will not apply.
Please note that if Zimmer is sold to a third party entity on or before
September 30, 2001, you will receive the bonus payments and other incentives
subject to the conditions described in the 2000 Agreement and the 2001
Amendment.

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J. Raymond Elliott
February 21, 2001
Page 2

     As a member of the Zimmer management team, you are expected to carry out
the duties and responsibilities of your job during the coming months. In
addition, your assistance will be necessary to complete the divestiture process.
For your extra efforts and cooperation in helping Bristol-Myers Squibb and
Zimmer during this period, you will be provided with the following incentives,
subject to all of the terms and conditions of this letter agreement:

1. SPECIAL STOCK OPTION AWARD. Effective on the date of the Spin-Off or, if it
occurs first, the IPO, (the "Effective Date"), you will receive an option to
purchase shares of Zimmer stock with an economic value at the time of grant of
$875,000 using a generally accepted valuation methodology. This option will be
issued under a new option and equity compensation plan (the "Zimmer Stock
Incentive Plan") that will be adopted by Zimmer's Board of Directors. Your
option will vest in equal installments over a period of four years provided that
you remain employed with Zimmer during that time, or as provided otherwise under
the Zimmer Stock Incentive Plan. The exercise price will equal the fair market
value of Zimmer stock at the time the option is granted.

2. SPECIAL RESTRICTED STOCK AWARD. As of the Effective Date, you will receive a
grant of Zimmer restricted stock with a value (determined as if no restrictions
applied) of $300,000. The restricted stock will vest in three equal installments
on the third, fourth and fifth anniversaries of the grant of the award provided
that you remain employed with Zimmer during that time. Any dividends that are
payable on Zimmer stock will be paid to you on this restricted stock on a
current basis. This restricted stock will also be issued under the Zimmer Stock
Incentive Plan.

3. CONVERSION OF EXECUTIVE STOCK OPTIONS. Any Bristol-Myers Squibb stock options
granted to you prior to the Effective Date (including, but not limited to, the
options awarded to you on January 3, 2000 pursuant to a 50% reduction in target
cash bonus under the Bristol-Myers Squibb Company Performance Incentive Plan
("PIP")) that are outstanding on the date of the Spin-Off, will be converted
into new Zimmer stock options. The number of shares and the exercise price of
your new Zimmer options will be determined by the Bristol-Myers Squibb Board of
Directors based upon a conversion ratio that will be used for all Zimmer
employees and that preserves any gains earned through the date of conversion.
Your new Zimmer options will be vested in the same proportion that your
Bristol-Myers Squibb options were vested and the nonvested portion of your new
Zimmer options will vest from the original grant date of your Bristol-Myers
Squibb options according to the vesting schedule in such Bristol-Myers Squibb
options. Certain of your Bristol-Myers Squibb options were subject to a price
appreciation threshold of 30% for a period of eight years following grant. Your
new Zimmer options will also be subject to a 30% price appreciation threshold
that will be based upon the adjusted exercise price of your Zimmer options and
future share price appreciation of Zimmer shares, subject to the requirement
that the price appreciation threshold be met for 15 consecutive trading days.
Any Bristol-Myers Squibb stock options granted to you after the date of this
letter agreement that

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J. Raymond Elliott
February 21, 2001
Page 3

are converted into new Zimmer stock options will reflect any applicable
conditions to exercisability such as vesting requirements or price appreciation
thresholds.

4. CONVERSION OF RESTRICTED STOCK AWARDS. Your Bristol-Myers Squibb restricted
shares that are unvested as of the Effective Date, including those that you have
held less than one year from their date of grant, will be exchanged for Zimmer
restricted shares of equal value (in each case determined as if no restrictions
applied) determined on the Effective Date. Your restricted Zimmer shares shall
be subject to vesting based upon the vesting schedule of the original
Bristol-Myers Squibb restricted share grant.

5.  LONG-TERM PERFORMANCE AWARDS.

     A.   1999-2001 BRISTOL-MYERS SQUIBB LONG-TERM PERFORMANCE AWARD. Your
          participation in the 1999-2001 Bristol-Myers Squibb Long-Term
          Performance Award ("1999-2001 LTP") cycle will terminate as of the
          Effective Date. In lieu of such participation or any payment under the
          1999-2001 LTP, you will receive a cash payment equal to a full term
          award (i.e., based on 36 months of deemed participation) that you
          would have received pursuant to the terms of the 1999-2001 LTP award
          cycle had you worked for Bristol-Myers Squibb for the entire award
          period. Payment to you will be based upon Bristol-Myers Squibb's
          actual performance during the 36-month award cycle (which will be the
          same for other participants who continue to be employed by
          Bristol-Myers Squibb during the entire cycle) and will be determined
          by Bristol-Myers Squibb under the terms of the 1999-2001 LTP. Payment
          to you of this cash amount will occur on the normal payment date for
          participants in the 1999-2001 LTP (which is anticipated to be in
          February, 2002).

     B.   2001-2003 BRISTOL-MYERS SQUIBB LONG-TERM PERFORMANCE AWARD. Your
          participation in the 2001-2003 Bristol-Myers Squibb Long-Term
          Performance Award ("2001-2003 LTP") cycle will terminate as of the
          Effective Date. In lieu of such participation or any payment under the
          2001-2003 LTP, effective on the Effective Date, you will be awarded a
          Zimmer stock option with a value equal to the full LTP award. The
          number of shares and the exercise price of this Zimmer stock option
          will be determined by the Bristol-Myers Squibb Board of Directors
          using a generally accepted valuation methodology. Your option will
          vest in equal installments over a period of four years provided that
          you remain employed with Zimmer during that time or as provided
          otherwise under the Zimmer Stock Incentive Plan.

6. 2001 PERFORMANCE INCENTIVE PLAN. Your 2001 PIP payment under the 2001 PIP
will be calculated in accordance with the following terms and conditions: (i)
your full target bonus will be in effect in 2001; (ii) your payment will be
based upon actual results versus targeted

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J. Raymond Elliott
February 21, 2001
Page 4

performance criteria through the Effective Date, subject to the established PIP
payout schedule; (iii) if the Effective Date is on or before June 30, 2001, a
six-month bonus payment will be made; (iv) if the Effective Date occurs after
June 30, 2001, you will accrue additional months of bonus credit beyond six
months subject to any applicable conditions of the PIP; and (v) your 2001 PIP
payment will be made on December 15, 2001 and February 15, 2002 consistent with
the current plan provisions, provided that you remain employed with Zimmer
through the aforementioned payment dates.

7. SPECIAL SEVERANCE UPON TERMINATION OF EMPLOYMENT. In addition to the other
payments specified in this letter agreement, you may be eligible for special
severance payments pursuant to either (A) or (B) below (note that should you
become reemployed by Bristol-Myers Squibb or any of its affiliates following
your receipt of severance payments, you may be obligated to repay a portion of
any severance payments as required by the Bristol-Myers Squibb Company Severance
Plan ("BMS Severance Plan")). The special severance payments described in this
letter agreement will be in lieu of, and not in addition to, the severance (if
any) that might ordinarily have been payable to you under the terms of the BMS
Severance Plan.

     A.   EMPLOYMENT CONTINUED BY ZIMMER BUT TERMINATED WITHIN 12 MONTHS. In the
          event that your employment with Zimmer is initially continued after
          the Effective Date, but is subsequently terminated prior to the first
          anniversary of the date of the Spin-Off, and you do not at such time
          become reemployed by Bristol-Myers Squibb or any of its affiliates,
          you will receive severance "make-up" benefits (in lieu of any amount
          payable pursuant to the BMS Severance Plan). The severance benefits
          hereunder, when combined with any severance payments from Zimmer for
          which you may be eligible, will increase your total severance benefits
          under this paragraph to an amount equal to two years of your base
          salary at the rate in effect on the date immediately prior to the
          Effective Date (regardless of the amount that you would otherwise be
          entitled to receive under the terms of the BMS Severance Plan). The
          severance make-up benefits described in this paragraph will be paid to
          you in accordance with the payment schedule and subject to all of the
          terms and conditions of the BMS Severance Plan in effect as of the
          Effective Date (including but not limited to the terms providing for
          the eligibility for severance pay, and the determination of which
          circumstances constitute a termination pursuant to which severance pay
          would be payable).

     B.   EMPLOYMENT NOT CONTINUED BY ZIMMER. In the event that your employment
          is not continued by Zimmer as of the Effective Date, and you have
          neither been retained nor reemployed by Bristol-Myers Squibb at such
          time, you will be eligible to receive a severance benefit in an amount
          equal to two years of your base salary at the rate in effect on the
          date immediately prior to the Effective Date, (regardless of the
          amount that you would otherwise be entitled to receive

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J. Raymond Elliott
February 21, 2001
Page 5

          under the terms of the BMS Severance Plan). The severance benefits
          described herein will be paid to you in accordance with the payment
          schedule and subject to all of the terms and conditions of the BMS
          Severance Plan in effect as of the Effective Date, (including but not
          limited to the terms providing for the eligibility for severance pay,
          and the determination of which circumstances constitute a termination
          pursuant to which severance pay would be payable). You acknowledge and
          agree that, in the event that Zimmer provides severance payments to
          you, whether through contractual obligation or otherwise, the amount
          of severance payments that you actually receive from Zimmer will set
          off and reduce Bristol-Myers Squibb's obligations under this
          subparagraph (B) on a dollar-for-dollar basis.

8.  TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.

     A.   SPECIAL SEVERANCE. In the event that Zimmer terminates your employment
          following a Change in Control (as defined below), and provided that
          your termination occurs after the Effective Date and prior to the
          first anniversary of the date of the Spin-Off, and provided further
          that you do not at such time immediately become reemployed by
          Bristol-Myers Squibb or any of its affiliates, at the time of your
          termination, Zimmer will provide you with a special severance payment
          equal to three times the sum of (i) the higher of your annual base
          salary in effect immediately prior to the occurrence of the event or
          circumstance upon which your termination is based or in effect
          immediately prior to the Change in Control, and (ii) the aggregate
          amount of your target annual bonus payment under the Zimmer
          Performance Incentive Plan (or any similar bonus plan of Zimmer then
          in effect) in effect immediately prior to the occurrence of the
          circumstances giving rise to your termination (provided that if it is
          not practicable to determine the amount that your aggregate target
          bonus would have been for the year of your termination, then your
          target annual bonus payment will be deemed to be the amount of the
          largest aggregate annual bonus paid to you during the five years
          immediately prior to the year in which you are terminated).

     B.   VESTING OF OPTIONS AND RESTRICTED STOCK. If you receive the special
          severance described in this paragraph 8, as of the date of your
          termination,any stock options awarded to you under the Zimmer Stock
          Incentive Plan will become fully exercisable (without regard to any
          vesting and price appreciation threshold requirements that would
          otherwise apply) for a period of three months commencing on the date
          of your termination. In addition, vesting and performance restrictions
          on any grants of restricted Zimmer stock awarded to you under the
          Zimmer Stock Incentive Plan which, as of the date of your termination,

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J. Raymond Elliott
February 21, 2001
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          have not then lapsed shall lapse automatically on the date of your
          termination and you will own such stock free and clear of all such
          restrictions.

     C.   DEFINITION OF CHANGE IN CONTROL. For the purpose of this paragraph 8,
          a "Change in Control" shall be deemed to have occurred if:

          (i)   any Person (as defined below) is or becomes the beneficial owner
                (as defined in Rule 13d-3 under the Securities Exchange Act of
                1934, as amended), directly or indirectly, of Zimmer's
                securities (not including in the securities beneficially owned
                by such Person any securities acquired directly from Zimmer or
                its affiliates) representing 20% or more of the combined voting
                power of Zimmer's then outstanding securities;

          (ii)  the individuals who constitute the Zimmer Board of Directors
                immediately after the Effective Date cease for any reason to
                constitute a majority thereof (other than any director
                designated by a Person or entity who has entered into an
                agreement with Zimmer to effect a transaction described in
                clause (i), (iii) or (iv) of this sub-paragraph 8.C. and whose
                election by the Zimmer Board of Directors or nomination for
                election by Zimmer's stockholders was approved by a vote of at
                least two-thirds of the directors then still in office who
                either were directors immediately after the Effective Date or
                whose election or nomination for election was previously so
                approved;

          (iii) Zimmer's shareholders approve a merger or consolidation of
                Zimmer with any other corporation, other than (A) a merger or
                consolidation which would result in Zimmer's voting securities
                outstanding immediately prior thereto continuing to represent
                (either by remaining outstanding or by being converted into
                voting securities of the surviving entity), in combination with
                the ownership of any trustee or other fiduciary holding
                securities under a Zimmer employee benefit plan, at least 75% of
                the combined voting power of the voting securities of Zimmer or
                such surviving entity outstanding immediately after such merger
                or consolidation, or (B) a merger or consolidation effected to
                implement a recapitalization of Zimmer (or similar transaction)
                in which no Person acquires more than 50% of the combined voting
                power of Zimmer's then outstanding securities; or

          (iv) Zimmer's shareholders approve a plan of complete liquidation of
               Zimmer or an agreement for the sale or disposition by Zimmer of
               all or substantially all of Zimmer's assets.

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J. Raymond Elliott
February 21, 2001
Page 7

               The foregoing notwithstanding, the Spin-Off and any event
               occurring in conjunction with the Spin-Off shall not constitute a
               Change in Control and a Change in Control shall not include any
               event, circumstance or transaction occurring during the six-month
               period following a Potential Change in Control which results from
               the action of any entity or group which you control wholly or
               partly or with which you are affiliated. For the purpose of this
               paragraph 8, "Potential Change in Control" means Zimmer entering
               into an agreement the consummation of which would result in a
               Change in Control, a public announcement by Zimmer or any other
               Person of its intent to take or consider taking actions which, if
               consummated, would constitute a Change in Control, any Person who
               is or becomes the beneficial owner, directly or indirectly of
               Zimmer securities representing 10% or more of the combined voting
               power of Zimmer's outstanding securities as of the date of the
               Spin-Off, increases such Person's beneficial ownership by 5% or
               more, or Zimmer's Board of Directors adopts a resolution to the
               effect that, for the purpose of this agreement, a Potential
               Change in Control has occurred. For the purpose of this paragraph
               8, "Person " has the meaning given under Section 3(a)(9) of the
               Securities Exchange Act of 1934, as amended, as modified and used
               in Sections 13(d) and 14(d) thereof; however, a Person shall not
               include Bristol-Myers Squibb, Zimmer or any of their respective
               subsidiaries, a trustee or other fiduciary holding securities
               under an employee benefit plan of Bristol-Myers Squibb, Zimmer or
               any of their respective subsidiaries, an underwriter temporarily
               holding securities pursuant to an offering of such securities, or
               a corporation owned, directly or indirectly, by the stockholders
               of Zimmer in substantially the same proportions as their
               ownership of stock of Zimmer.

     D.   EXCISE PAYMENT. In the event that any special severance payment or
          other payment to you exceeds 110% of the maximum amount of such
          payments that could be paid to you under this paragraph 8 without
          being subject to excise taxes under sections 280G and 4999 of the
          Internal Revenue Code, Zimmer will pay you an additional amount such
          that the amount you retain after deduction of any excise tax and any
          other Federal, state and local employment and income taxes is equal to
          the present value of such special severance payments and other
          payments. In the event that any special severance payment or other
          payment to you exceeds the maximum amount of such payments that could
          be paid to you without being subject to excise taxes under sections
          280G and 4999 of the Internal Revenue Code but is less than 110%, of
          such amount, Zimmer shall reduce such payments to you to an amount
          equal to maximum amount that may be paid to you without being subject
          to excise taxes under sections 280G and 4999 of the Internal Revenue
          Code.

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J. Raymond Elliott
February 21, 2001
Page 8

     E.   OTHER SEVERANCE PLANS. The severance benefits described in this
          paragraph 8 are in lieu of, and not in addition to, the severance (if
          any) that might otherwise have been payable to you under the terms of
          either the BMS Severance Plan or the Zimmer Severance Plan.

9. VESTING IN PENSION PLAN AND SAVINGS PLAN. In addition to the incentives
specified in this letter agreement, your unvested benefits under the
Bristol-Myers Squibb Company Retirement Income Plan and the Bristol-Myers Squibb
Company Savings and Investment Program will become fully vested as of the
consummation of the Spin-Off.

10. SHORT SERVICE ADJUSTMENT. In view of your short service with Bristol-Myers
Squibb, and the impact that this may have on your ability to accrue a pension
benefit under the Bristol-Myers Squibb Retirement Income Plan, on the Effective
Date , you will be awarded deferred stock units with respect to Zimmer stock in
an amount equivalent to $500,000. At the time of your retirement or termination
of employment, your deferred stock units will be distributed to you in the form
of a lump sum cash payment. Your payment will be equal to the number of deferred
stock units awarded to you multiplied by (i) the market value of Zimmer stock at
the time of your termination or retirement, plus (ii) the sum of all dividends
credited on a share of Zimmer stock during the period commencing upon the date
of your deferred stock award and the date of your termination or retirement. The
number of your deferred share units will be adjusted to preserve the value of
your deferred stock units in the event of a Zimmer stock dividend, stock split,
recapitalization or other financial restructuring that affects the value of
Zimmer shares.

11. CONDITIONS OF THIS LETTER AGREEMENT. The incentive payments and benefits
described in this letter agreement are contingent upon: (a) the Effective Date
occurring on or before September 30, 2001 and, with respect to payments and
benefits contingent upon a Spin-Off, the consummation of the Spin-Off on or
before March 31, 2002; (b) your continuous employment with Zimmer through and
including the date of the relevant award, and your cessation of employment
within the Bristol-Myers Squibb controlled group (as defined under section
1563(a) of the Internal Revenue Code) as a result of the Spin-Off; (c) your
execution on the date of the consummation of the Spin-Off, and the
effectiveness, of a general release in favor of Bristol-Myers Squibb, its
affiliates, and others related to such entities (including but not limited to
their directors, officers, employees) and a limited release of Zimmer, its
affiliates, and others related to such entities (including but not limited to
their directors, officers, employees) with respect to Zimmer's obligations in
connection with the Spin-Off, in form and substance satisfactory to
Bristol-Myers Squibb and Zimmer, (d) your honoring the need for strict
confidentiality regarding the IPO and the Spin-Off and the terms of this letter
agreement, neither of which should be discussed with anyone (other than your
personal financial or legal advisors) without the express and specific
permission of George P. Kooluris, Senior Vice President, Corporate Development,
it being acknowledged that matters relating to the IPO and the Spin-Off (except
the terms of this letter agreement) may be discussed only with employees of
Bristol-Myers Squibb and its

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J. Raymond Elliott
February 21, 2001
Page 9

affiliates and their legal and financial advisors who are participating in the
IPO and the Spin-Off process and no others (and then only with those individuals
on a "need to know" basis); (e) your providing full support and cooperation in
the best interests of Bristol-Myers Squibb and Zimmer up to and including the
date of the Spin-Off; and (f) following the Spin-Off, your taking no action,
excluding normal competitive activity not contrary to law and not inconsistent
with your other contractual obligations to Bristol-Myers Squibb, Zimmer or their
affiliates, but including any actions prohibited by this letter agreement, which
would be considered contrary to the best interests of Bristol-Myers Squibb,
Zimmer or their affiliates.

12. NON-COMPETE AND NON-SOLICITATION. As a condition to your receipt of any
payments or benefits under this letter agreement, you agree that, for a period
commencing on the date of your execution of this letter agreement and ending on
the date which is one year after the consummation of the Spin-Off you will not,
directly or indirectly, (i) own, manage, control or participate in the
ownership, management or control of, be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or otherwise
with, any other corporation, partnership, proprietorship, firm, association, or
other business entity, or otherwise engage in any business, which is engaged in
any manner in, or otherwise competes with, the business of Zimmer or any of its
affiliates in the United States of America or any of the countries in which
Zimmer or any of its affiliates is doing business, (ii) solicit on behalf of any
other corporation, partnership, proprietorship, firm, association, or other
business entity, any person or business that is a customer or supplier of Zimmer
or any of its affiliates, or (iii) solicit for employment, hire, employ, or
retain in any capacity (including but not limited to as an employee, director,
independent contractor, consultant or otherwise), other than for employment
within Zimmer or its affiliates in conjunction with the IPO and Spin-Off or
within Bristol-Myers Squibb or its affiliates, any person who is employed or
otherwise engaged on a full or part-time basis by Bristol-Myers Squibb or its
affiliates (including but not limited to Zimmer). You understand and agree that
a breach by you of this paragraph would be a material breach of your obligations
under this letter agreement, and that, if any amounts have been provided to you
under the terms of this letter agreement prior to any such breach, in addition
to any other remedy that may be available to Bristol-Myers Squibb in law or at
equity, upon demand, you will promptly return all such amounts to Bristol-Myers
Squibb or Zimmer as appropriate.

13. NOT AN EMPLOYMENT AGREEMENT. The terms of this letter agreement neither bind
you to continued employment with Bristol-Myers Squibb, Zimmer, their affiliates
or any successor thereto, nor confer any rights upon you with respect to the
continuation of employment by Bristol-Myers Squibb, Zimmer, their affiliates or
any successor thereto.

14. WITHHOLDING. It is understood and agreed that all amounts, payments or
benefits payable to you as described in this letter agreement (except as
otherwise provided in Section 8D of this letter agreement) represent gross
amounts (as opposed to net after-tax amounts), and that Bristol-

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J. Raymond Elliott
February 21, 2001
Page 10

Myers Squibb, Zimmer or its affiliates or agents are hereby authorized to
withhold any and all applicable withholdings and taxes from any such amounts,
payments or benefits.

15. EXCLUSIVE RETENTION AND SEVERANCE BENEFIT. In the event that any or all
other employees of Zimmer receive or are offered either a retention or similar
bonus payable upon or in connection with the IPO or the Spin-Off (a "Retention
Bonus"), or an enhanced severance benefit payable upon or in connection with the
IPO or the Spin-Off, you understand and agree that you will not be eligible to
receive such Retention Bonus or enhanced severance benefit, except as explicitly
set forth in this letter agreement.

16. RETURN OF COMPANY PROPERTY AND USE OF COMPANY PERQUISITES. In the event of
your separation from Bristol-Myers Squibb, Zimmer or their affiliates (whether
prior to or in connection with the IPO or Spin-Off), you agree to return all
property belonging to Bristol-Myers Squibb, Zimmer or their affiliates
(including but not limited to any company laptop or computers, and other
equipment, documents and property belonging to Bristol-Myers Squibb, Zimmer or
their affiliates) upon such separation (in accordance with the normal practice
relating thereto); provided, however, at Zimmer's discretion you may continue to
retain use of your employer-provided automobile, and, if applicable, may
continue to use the employer-provided financial counseling, tax preparation
assistance, and club membership.

17. GOVERNING LAW; JURISDICTION. This letter agreement will be governed by and
construed under the laws of the State of New York, without regard to its
principles of conflict of laws. You and Bristol-Myers Squibb agree to submit to
the jurisdiction of the courts of the state of New York in the event of any
dispute regarding this letter agreement.

Please acknowledge your understanding of and agreement to the provisions of this
letter agreement by signing and returning a copy of this letter to me by March
9, 2001.

Very truly yours,

George P. Kooluris
Senior Vice President
Corporate Development
Bristol-Myers Squibb Company

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J. Raymond Elliott
February 21, 2001
Page 11

J. Raymond Elliott
President, Zimmer
Zimmer, Inc.

AGREED TO AND ACCEPTED:

-----------------------------------

DATE:
      -----------------------------<Page>

                                                                    Exhibit 10.6

                                                  February 21, 2001

Roy D. Crowninshield, Ph.D.
11115 Burnhill Court
Fort Wayne, IN 46814

                            PERSONAL AND CONFIDENTIAL

Dear Roy:

                  Last October you and Bristol-Myers Squibb Company
("Bristol-Myers Squibb") executed a letter agreement dated October 11, 2000 (the
"2000 Agreement") that described the bonus payments and other incentives that
you would receive in the event that Zimmer, Inc. ("Zimmer") was sold to a
third-party entity on or before September 30, 2001. It now appears possible that
Bristol-Myers Squibb may divest its interest in Zimmer through a "spin-off"
transaction involving the distribution of Zimmer stock to Bristol-Myers Squibb
shareholders (the "Spin-Off"). The Spin-Off may be preceded by a public offering
of Zimmer shares (the "IPO"). During the divestiture process, we believe that
operating the Zimmer business as usual is in the best interests of Bristol-Myers
Squibb, Zimmer and its employees. To provide assurance to you and to help ensure
that the Zimmer business is managed and operated efficiently and effectively
both before and after the divestiture, Bristol-Myers Squibb and Zimmer wish to
offer you the incentives described in this letter. If these incentives are
satisfactory and you wish to participate, please sign and return this letter in
the manner described on the last page of this letter.

                  The terms and conditions of this letter agreement will apply
in the event of an IPO or Spin-Off of Zimmer that occurs on or before September
30, 2001 and, with respect to payments and benefits contingent upon a Spin-Off,
the consummation of the Spin-Off on or before March 31, 2002. In the event of a
disposition of Zimmer which is not an IPO or Spin-Off occurring on or before
September 30, 2001 and, with respect to payments and benefits contingent upon a
Spin-Off, if the Spin-Off is not completed on or before March 31, 2002, the
terms and conditions of this letter agreement will terminate and will not apply.
Please note that if Zimmer is sold to a third party entity on or before
September 30, 2001, you will receive the bonus payments and other incentives
subject to the conditions described in the 2000 Agreement.

                  As a member of the Zimmer management team, you are expected to
carry out the duties and responsibilities of your job during the coming months.
In addition, your assistance

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Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 2

will be necessary to complete the divestiture process. For your extra efforts
and cooperation in helping Bristol-Myers Squibb and Zimmer during this period,
you will be provided with the following incentives, subject to all of the terms
and conditions of this letter agreement:

1. SPECIAL STOCK OPTION AWARD. Effective on the date of the Spin-Off or, if it
occurs first, the IPO (the "Effective Date"), you will receive an option to
purchase shares of Zimmer stock with an economic value at the time of grant of
$175,000 using a generally accepted valuation methodology. This option will be
issued under a new option and equity compensation plan (the "Zimmer Stock
Incentive Plan") that will be adopted by Zimmer's Board of Directors. Your
option will vest in equal installments over a period of four years provided that
you remain employed with Zimmer during that time, or as provided otherwise under
the Zimmer Stock Incentive Plan. The exercise price will equal the fair market
value of Zimmer stock at the time the option is granted.

2. SPECIAL RESTRICTED STOCK AWARD. As of the Effective Date, you will receive a
grant of Zimmer restricted stock with a value (determined as if no restrictions
applied) of $60,000. The restricted stock will vest in three equal installments
on the third, fourth and fifth anniversaries of the grant of the award provided
that you remain employed with Zimmer during that time. Any dividends that are
payable on Zimmer stock will be paid to you on this restricted stock on a
current basis. This restricted stock will also be issued under the Zimmer Stock
Incentive Plan.

3. CONVERSION OF OUTSTANDING STOCK OPTIONS. Any Bristol-Myers Squibb stock
options granted to you prior to the Effective Date (including, but not limited
to, the options awarded to you on January 3, 2000 pursuant to a 50% reduction in
target cash bonus under the Bristol-Myers Squibb Company Performance Incentive
Plan ("PIP")) that are outstanding on the date of the Spin-Off, will be
converted into new Zimmer stock options. The number of shares and the exercise
price of your new Zimmer options will be determined by the Bristol-Myers Squibb
Board of Directors based upon a conversion ratio that will be used for all
Zimmer employees and that preserves any gains earned through the date of
conversion. Your new Zimmer options will be vested in the same proportion that
your Bristol-Myers Squibb options were vested and the nonvested portion of your
new Zimmer options will vest from the original grant date of your Bristol-Myers
Squibb options according to the vesting schedule in such Bristol-Myers Squibb
options. Certain of your Bristol-Myers Squibb options were subject to a price
appreciation threshold of 30% for a period of eight years following grant. Your
new Zimmer options will also be subject to a 30% price appreciation threshold
that will be based upon the adjusted exercise price of your Zimmer options and
future share price appreciation of Zimmer shares subject to the requirement that
the price appreciation threshold be met for 15 consecutive trading days. Any
Bristol-Myers Squibb stock options granted to you after the date of this letter
agreement that are converted into new Zimmer stock options will reflect any
applicable conditions to exercisability such as vesting requirements or price
appreciation thresholds.

<Page>

Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 3

4. LONG-TERM PERFORMANCE AWARDS.

     A.   1999-2001 BRISTOL-MYERS SQUIBB LONG-TERM PERFORMANCE AWARD. Your
          participation in the 1999-2001 Bristol-Myers Squibb Long-Term
          Performance Award ("1999-2001 LTP") cycle will terminate as of the
          Effective Date. In lieu of such participation or any payment under the
          1999-2001 LTP, you will receive a cash payment equal to a full term
          award (i.e., based on 36 months of deemed participation) that you
          would have received pursuant to the terms of the 1999-2001 LTP award
          cycle had you worked for Bristol-Myers Squibb for the entire award
          period. Payment to you will be based upon Bristol-Myers Squibb's
          actual performance during the 36-month award cycle (which will be the
          same for other participants who continue to be employed by
          Bristol-Myers Squibb during the entire cycle) and will be determined
          by Bristol-Myers Squibb under the terms of the 1999-2001 LTP. Payment
          to you of this cash amount will occur on the normal payment date for
          participants in the 1999-2001 LTP (which is anticipated to be in
          February, 2002).

     B.   2001-2003 BRISTOL-MYERS SQUIBB LONG-TERM PERFORMANCE AWARD. Your
          participation in the 2001-2003 Bristol-Myers Squibb Long-Term
          Performance Award ("2001-2003 LTP") cycle will terminate as of the
          Effective Date. In lieu of such participation or any payment under the
          2001-2003 LTP, effective on the Effective Date, you will be awarded a
          Zimmer stock option with a value equal to the full LTP award. The
          number of shares and the exercise price of this Zimmer stock option
          will be determined by the Bristol-Myers Squibb Board of Directors
          using a generally accepted valuation methodology. Your option will
          vest in equal installments over a period of four years provided that
          you remain employed with Zimmer during that time or as provided
          otherwise under the Zimmer Stock Incentive Plan.

5. 2001 PERFORMANCE INCENTIVE PLAN. Your 2001 payment under the PIP will be
calculated in accordance with the following terms and conditions: (i) your full
target bonus will be in effect in 2001; (ii) your payment will be based upon
actual results versus targeted performance criteria through the Effective Date,
subject to the established PIP payout schedule; (iii) if the Effective Date is
on or before June 30, 2001, a six-month bonus payment will be made; (iv) if the
Effective Date occurs after June 30, 2001, you will accrue additional months of
bonus credit beyond six months subject to any applicable conditions of the PIP;
and (v) your 2001 PIP payment will be made on December 15, 2001 and February 15,
2002 consistent with the current plan provisions, provided that you remain
employed with Zimmer through the aforementioned payment dates.

6. SPECIAL SEVERANCE UPON TERMINATION OF EMPLOYMENT. In addition to the other
payments specified in this letter agreement, you may be eligible for special
severance payments pursuant to either (A) or (B) below (note that should you
become reemployed by Bristol-Myers Squibb or

<Page>

Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 4

any of its affiliates following your receipt of severance payments, you may be
obligated to repay a portion of any severance payments as required by the
Bristol-Myers Squibb Company Severance Plan ("BMS Severance Plan")). The special
severance payments described in this letter agreement will be in lieu of, and
not in addition to, the severance (if any) that might ordinarily have been
payable to you under the terms of the BMS Severance Plan.

     A.   EMPLOYMENT CONTINUED BY ZIMMER BUT TERMINATED WITHIN 12 MONTHS. In the
          event that your employment with Zimmer is initially continued after
          the Effective Date, but is subsequently terminated prior to the first
          anniversary of the date of the Spin-Off, and you do not at such time
          become reemployed by Bristol-Myers Squibb or any of its affiliates,
          you will receive severance "make-up" benefits (in lieu of any amount
          payable pursuant to the BMS Severance Plan). The severance benefits
          hereunder, when combined with any severance payments from Zimmer for
          which you may be eligible, will increase your total severance benefits
          under this paragraph to an amount equal to one year of your base
          salary at the rate in effect on the date immediately prior to the
          Effective Date (regardless of the amount that you would otherwise be
          entitled to receive under the terms of the BMS Severance Plan, unless
          such amount would be greater than one year of your base salary, in
          which case your total severance amount will be increased to such
          greater amount), plus, in the event that you are eligible for Rule of
          70 benefits as of the Effective Date, the additional Rule of 70
          supplemental severance payments that would be provided under the terms
          of the BMS Severance Plan (without offset against the amount payable
          under the first part of this sentence, and notwithstanding any
          limitation under Section VII of the BMS Severance Plan), and retiree
          medical benefits referenced under Section VII of the BMS Severance
          Plan, provided that you are not eligible to receive retiree medical
          benefits under any successor employer benefit plan. The severance
          make-up benefits described in this paragraph will be paid to you in
          accordance with the payment schedule and subject to all of the terms
          and conditions of the BMS Severance Plan in effect as of the Effective
          Date (including but not limited to the terms providing for the
          eligibility for severance pay, and the determination of which
          circumstances constitute a termination pursuant to which severance pay
          would be payable).

     B.   EMPLOYMENT NOT CONTINUED BY ZIMMER. In the event that your employment
          is not continued by Zimmer as of the Effective Date, and you have
          neither been retained nor reemployed by Bristol-Myers Squibb at such
          time, you will be eligible to receive a severance benefit in an amount
          equal to one year of your base salary at the rate in effect on the
          date immediately prior to the Effective Date, (regardless of the
          amount that you would otherwise be entitled to receive under the terms
          of the BMS Severance Plan, unless such amount would be greater than
          one year of your base salary, in which case your total severance
          amount will be

<Page>

Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 5

          increased to such greater amount), plus, in the event that you are
          eligible for Rule of 70 benefits as of the Effective Date, the
          additional Rule of 70 supplemental severance payments that would be
          provided under the terms of the BMS Severance Plan (without offset
          against the amount payable under the first part of this sentence, and
          notwithstanding any limitation under Section VII of the BMS Severance
          Plan), and retiree medical benefits referenced under Section VII of
          the BMS Severance Plan. The severance benefits described herein will
          be paid to you in accordance with the payment schedule and subject to
          all of the terms and conditions of the BMS Severance Plan in effect as
          of the Effective Date, (including but not limited to the terms
          providing for the eligibility for severance pay, and the determination
          of which circumstances constitute a termination pursuant to which
          severance pay would be payable). You acknowledge and agree that, in
          the event that Zimmer provides severance payments to you, whether
          through contractual obligation or otherwise, the amount of severance
          payments that you actually receive from Zimmer will set off and reduce
          Bristol-Myers Squibb's obligations under this subparagraph (B) on a
          dollar-for-dollar basis.

7. VESTING IN PENSION PLAN AND SAVINGS PLAN. In addition to the incentives
specified in this letter agreement, your unvested benefits under the
Bristol-Myers Squibb Company Retirement Income Plan and the Bristol-Myers Squibb
Company Savings and Investment Program will become fully vested as of the
consummation of the Spin-Off.

8. SPECIAL PAYMENT EQUAL TO THE RULE OF 70 AMOUNT. In the event that (a) you are
not eligible to receive, and, in fact do not receive, the severance benefits
provided under the "Special Severance Upon Termination of Employment" provision
of this letter agreement, and either (b) Zimmer does not offer you participation
in an employer-sponsored defined benefit pension plan, or (c) you are offered
such participation but you do not ultimately become fully vested in such defined
benefit pension plan (for whatever reason), you will receive an amount equal to
the additional Rule of 70 payment that you would have received under the terms
of the BMS Severance Plan, calculated in the manner set forth in the second
paragraph of Section VII of the BMS Severance Plan (without regard to the
limitation set forth therein). You should notify Bristol-Myers Squibb promptly
after the occurrence of any event upon which you believe payment is required
under this paragraph.

9. CONDITIONS OF THIS LETTER AGREEMENT. The incentive payments and benefits
described in this letter agreement are contingent upon: (a) the Effective Date
occurring on or before September 30, 2001 and, with respect to payments and
benefits contingent upon a Spin-Off, the consummation of the Spin-Off on or
before March 31, 2002; (b) your continuous employment with Zimmer through and
including the date of the relevant award, and your cessation of employment
within the Bristol-Myers Squibb controlled group (as defined under section
1563(a) of the Internal Revenue Code) as a result of the Spin-Off; (c) your
execution on the date of the

<Page>

Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 6

consummation of the Spin-Off, and the effectiveness, of a general release in
favor of Bristol-Myers Squibb, its affiliates, and others related to such
entities (including but not limited to their directors, officers, employees) and
a limited release of Zimmer, its affiliates, and others related to such entities
(including but not limited to their directors, officers, employees) with respect
to Zimmer's obligations in connection with the Spin-Off, in form and substance
satisfactory to Bristol-Myers Squibb and Zimmer, (d) your honoring the need for
strict confidentiality regarding the IPO and the Spin-Off and the terms of this
letter agreement, neither of which should be discussed with anyone (other than
your personal financial or legal advisors) without the express and specific
permission of George P. Kooluris, Senior Vice President, Corporate Development,
it being acknowledged that matters relating to the IPO and the Spin-Off (except
the terms of this letter agreement) may be discussed only with employees of
Bristol-Myers Squibb and its affiliates and their legal and financial advisors
who are participating in the IPO and the Spin-Off process and no others (and
then only with those individuals on a "need to know" basis); (e) your providing
full support and cooperation in the best interests of Bristol-Myers Squibb and
Zimmer up to and including the date of the Spin-Off; and (f) following the
Spin-Off, your taking no action, excluding normal competitive activity not
contrary to law and not inconsistent with your other contractual obligations to
Bristol-Myers Squibb, Zimmer or their affiliates, but including any actions
prohibited by this letter agreement, which would be considered contrary to the
best interests of Bristol-Myers Squibb, Zimmer or their affiliates.

10. NON-COMPETE AND NON-SOLICITATION. As a condition to your receipt of any
payments or benefits under this letter agreement, you agree that, for a period
commencing on the date of your execution of this letter agreement and ending on
the date which is one year after the consummation of the Spin-Off you will not,
directly or indirectly, (i) own, manage, control or participate in the
ownership, management or control of, be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or otherwise
with, any other corporation, partnership, proprietorship, firm, association, or
other business entity, or otherwise engage in any business, which is engaged in
any manner in, or otherwise competes with, the business of Zimmer or any of its
affiliates in the United States of America or any of the countries in which
Zimmer or any of its affiliates is doing business, (ii) solicit on behalf of any
other corporation, partnership, proprietorship, firm, association, or other
business entity, any person or business that is a customer or supplier of Zimmer
or any of its affiliates, or (iii) solicit for employment, hire, employ, or
retain in any capacity (including but not limited to as an employee, director,
independent contractor, consultant or otherwise), other than for employment
within Zimmer or its affiliates in conjunction with the IPO and Spin-Off or
within Bristol-Myers Squibb or its affiliates, any person who is employed or
otherwise engaged on a full or part-time basis by Bristol-Myers Squibb or its
affiliates (including but not limited to Zimmer). You understand and agree that
a breach by you of this paragraph would be a material breach of your obligations
under this letter agreement, and that, if any amounts have been provided to you
under the terms of this letter agreement prior to any such breach, in addition
to any other remedy that may be

<Page>

Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 7

available to Bristol-Myers Squibb in law or at equity, upon demand, you will
promptly return all such amounts to Bristol-Myers Squibb or Zimmer as
appropriate.

11. NOT AN EMPLOYMENT AGREEMENT. The terms of this letter agreement neither bind
you to continued employment with Bristol-Myers Squibb, Zimmer, their affiliates
or any successor thereto, nor confer any rights upon you with respect to the
continuation of employment by Bristol-Myers Squibb, Zimmer, their affiliates or
any successor thereto.

12. WITHHOLDING. It is understood and agreed that all amounts, payments or
benefits payable to you as described in this letter agreement represent gross
amounts (as opposed to net after-tax amounts), and that Bristol-Myers Squibb,
Zimmer or its affiliates or agents are hereby authorized to withhold any and all
applicable withholdings and taxes from any such amounts, payments or benefits.

13. EXCLUSIVE RETENTION AND SEVERANCE BENEFIT. In the event that any or all
other employees of Zimmer receive or are offered either a retention or similar
bonus payable upon or in connection with the IPO or the Spin-Off (a "Retention
Bonus"), or an enhanced severance benefit payable upon or in connection with the
IPO or the Spin-Off, you understand and agree that you will not be eligible to
receive such Retention Bonus or enhanced severance benefit, except as explicitly
set forth in this letter agreement.

14. RETURN OF COMPANY PROPERTY AND USE OF COMPANY PERQUISITES. In the event of
your separation from Bristol-Myers Squibb, Zimmer or their affiliates (whether
prior to or in connection with the IPO or Spin-Off), you agree to return all
property belonging to Bristol-Myers Squibb, Zimmer or their affiliates
(including but not limited to any company laptop or computers, and other
equipment, documents and property belonging to Bristol-Myers Squibb, Zimmer or
their affiliates) upon such separation (in accordance with the normal practice
relating thereto); provided, however, at Zimmer's discretion, you may continue
to retain use of your employer-provided automobile and may continue to use the
employer-provided financial counseling and tax preparation assistance.

15. GOVERNING LAW; JURISDICTION. This letter agreement will be governed by and
construed under the laws of the State of New York, without regard to its
principles of conflict of laws. You and Bristol-Myers Squibb agree to submit to
the jurisdiction of the courts of the state of New York in the event of any
dispute regarding this letter agreement.

<Page>

Roy D. Crowninshield, Ph.D.
February 21, 2001
Page 8

Please acknowledge your understanding of and agreement to the provisions of this
letter agreement by signing and returning a copy of this letter to me by March
9, 2001.

Very truly yours,

George P. Kooluris
Senior Vice President
Corporate Development
Bristol-Myers Squibb Company

Roy D. Crowninshield, Ph.D.
Zimmer, Inc.

AGREED TO AND ACCEPTED:

-----------------------------------

DATE:
      -----------------------------

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