RESTATED
BENEFIT EQUALIZATION PLAN
OF
ZIMMER HOLDINGS, INC. AND ITS SUBSIDIARY OR
AFFILIATED CORPORATIONS PARTICIPATING IN THE
ZIMMER HOLDINGS, INC. SAVINGS AND INVESTMENT PROGRAM
(Restated as of January 1,
2005)
This
Restated Benefit Equalization Plan of Zimmer Holdings, Inc. and its
Subsidiary or Affiliated Corporations Participating in the Zimmer
Holdings, Inc. Savings and Investment Program, originally effective
as of August 6, 2001 and restated, effective January 1,
2005, was established to allow eligible executives of the Company
to defer receipt of portions of their base salary. The Plan is
unfunded and is maintained by Zimmer primarily for the purpose of
providing deferred compensation for a select group of management or
highly-compensated employees.
The
terms of this restated Plan shall govern and only apply to amounts
deferred or vested on or after January 1, 2005. Any amounts
deferred and vested prior to January 1, 2005, as adjusted for
earnings and losses, shall be deemed “grandfathered,”
and subject to the terms of the Plan in effect on October 3,
2004.
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1.1.
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“ Account ” shall
mean the bookkeeping account maintained for each Participant to
record his Salary Deferrals under this Plan, and the amount of any
Employer Contributions, as adjusted pursuant to
Article 5.
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1.2.
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“ Administrator ”
shall mean the Committee.
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1.3.
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“ Affiliated Company
” shall mean any company or corporation directly or
indirectly controlled by Zimmer.
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1.4.
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“ Board ” shall
mean the board of directors of Zimmer Holdings, Inc.
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1.5.
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“ Code ” shall
mean the Internal Revenue Code of 1986, as amended from time to
time.
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1.6.
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“ Committee ”
shall mean the Benefits Committee of Zimmer Holdings,
Inc.
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1.7.
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“ Company ” shall
mean Zimmer and its Affiliated Companies.
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1.8.
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“ Compensation ”
shall mean the base compensation payable to an Eligible Executive,
including any amount deferred under this Plan, the Program or any
cafeteria plan subject to Section 125 of the Code.
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1.9.
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“ Effective Date
” shall mean, for this restatement, January 1, 2005, or,
with respect to the Eligible Executives of a company or corporation
that adopts the Plan, the date such company or corporation becomes
a Participating Company.
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1.10.
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“ Eligible Executive
” shall mean an employee of a Participating Company whose
Compensation will exceed the limit imposed by Code
Section 401(a)(17) in a Plan Year.
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1.11.
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“ Employment
Termination ” shall mean, with respect to a Participant,
the termination of the Participant’s employment for any
reason by the Company, provided, however, that no event shall
constitute an “Employment Termination” under this Plan
if it does not constitute a “separation from service”
within the meaning of Code
Section 409A(a)(2)(A)(i).
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1.12.
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“ Employer Contribution
” means the amount credited to a Participant’s Account
under Article 4.
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1.13.
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“ Participant ”
shall mean, except as otherwise provided in Article 2, each
Eligible Executive who has executed a Salary Deferral Agreement as
described in Section 2.1, or is eligible for an Employer
Contribution under Article 4. An Eligible Executive may not
become a Participant in the Plan before January 1st of the
year immediately following the year he becomes an Eligible
Executive.
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1.14.
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“ Participating Company
” shall mean Zimmer and any company or corporation directly
or indirectly controlled by Zimmer that the Board designates for
participation in the Plan in accordance with
Section 8.5(b).
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1.15.
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“ Plan ” shall
mean the Restated Benefit Equalization Plan of Zimmer Holdings,
Inc. and its Subsidiary or Affiliated Corporations Participating in
the Zimmer Holdings, Inc. Savings and Investment Program, as
amended from time to time.
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1.16.
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“ Plan Year ”
shall mean the calendar year.
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1.17.
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“ Program ” shall
mean the Zimmer Holdings, Inc. Savings and Investment Program or
the Zimmer Puerto Rico Savings and Investment Program, as
applicable.
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1.18.
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“ Salary Deferral
” shall mean the amounts credited to a Participant’s
Account under Section 3.3.
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1.19.
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“ Salary Deferral
Agreement ” shall mean a completed agreement between an
Eligible Executive and a Participating Company of which he is an
employee under which the Eligible Executive agrees to make Salary
Deferrals under the
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Plan in
accordance with the salary deferral program described in
Article 3. The Salary Deferral Agreement shall be on a form
prescribed by the Administrator.
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1.20.
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“ Section 409A
Standards ” shall have the meaning ascribed to that term
in Section 8.7.
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1.21.
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“ Unforeseeable
Emergency ” shall mean a severe financial hardship as
defined in Section 6.3.
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1.22.
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“ Valuation Date
” shall mean each business day on which the securities
markets in the United States are open for trading.
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1.23.
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“ Zimmer ” means
Zimmer Holdings, Inc.
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PARTICIPATION AND SALARY
DEFERRAL AGREEMENTS
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(a)
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An
Eligible Executive shall become a Participant as of the date he
files his initial Salary Deferral Agreement with the Administrator,
or becomes eligible for an Employer Contribution under
Section 4.2. However, such Salary Deferral Agreement shall be
effective for purposes of making Salary Deferrals only as provided
in Article 3.
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(b)
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A
Salary Deferral Agreement shall be in writing and properly
completed on a form approved by the Administrator, which shall be
the sole judge of the proper completion thereof. Except as provided
in Section 3, such Agreement shall provide for the deferral of
Salary Deferrals, and may include such other provisions as the
Administrator deems appropriate. A Salary Deferral Agreement
“election” shall not be revoked or modified except
pursuant to Section 2.2 or Section 6.3.
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(c)
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As
a condition of participation the Administrator may require such
other information as it deems appropriate.
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2.2.
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Modification of Salary Deferral
Agreement .
A Participant may suspend his Salary Deferrals for a Plan Year
prior to the beginning of that Plan Year or during a Plan Year on
account of an Unforeseeable Emergency.
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2.3.
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Employment Termination:
Re-employment .
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(a)
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A
Participant’s Salary Deferrals shall cease upon a
Participant’s Employment Termination.
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(b)
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Upon re-employment as an Eligible
Executive, a former Participant may become a Participant again by
executing a Salary Deferral Agreement under Section 2.1 for
the next Plan Year.
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3.1.
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Filing Requirements
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(a)
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An
individual who becomes an Eligible Executive on or after the
Effective Date may file a Salary Deferral Agreement with the
Administrator, to be effective as of the first day of the next Plan
Year, in such manner as the Administrator may prescribe.
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(b)
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An
Eligible Executive who does not file a Salary Deferral Agreement
with the Administrator as provided in Section 3.1(a) may file
a Salary Deferral Agreement during the last month of any Plan Year,
to be effective as of the first day of the next Plan
Year.
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3.2.
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Salary Deferral Agreement
. An Eligible
Executive’s Salary Deferral Agreement shall authorize a
reduction in his Compensation with respect to his Salary Deferrals
under the Plan. The Salary Deferral Agreement shall be effective
for and apply to pay periods on or after both (a) the later of
(i) the Effective Date; or (ii) the first day of the next
Plan Year, and (b) the date the Eligible Executive’s
Compensation for the applicable Plan Year exceeds the limit set
forth in Code Section 401(a)(17), as adjusted.
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3.3.
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Amount of Salary
Deferrals .
Effective as soon as practicable after each pay date following the
effective date of an Eligible Executive’s Salary Deferral
Agreement, his Accounts shall be credited with an amount of Salary
Deferral, if any, for each pay period, as set forth in his Salary
Deferral Agreement. Participants may elect to defer a whole
percentage of their base salary ranging from 1% to 30%.
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3.4.
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Changing Salary Deferrals
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(a)
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An
Eligible Executive’s election on his Salary Deferral
Agreement of the rate at which he authorizes Salary Deferrals under
the Plan shall remain in effect in subsequent Plan Years unless he
files with the Administrator an amendment to his Salary Deferral
Agreement modifying or revoking such election. The amendment shall
be filed by the last day of the Plan Year and shall be effective
for pay periods on or after the first day of the next Plan
Year.
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(b)
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Notwithstanding Section 3.4(a),
an Eligible Executive may, in the event of an Unforeseeable
Emergency, request a suspension of his Salary Deferrals under the
Plan. The request shall be made in a time and manner determined by
the Administrator, and shall be effective as of such date
as
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the
Administrator prescribes and throughout the remainder of that Plan
Year. The Eligible Executive may apply to the Administrator to
resume his Salary Deferrals for subsequent Plan Years.
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4.1.
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Matching Contribution
. A Participant’s
Account shall be credited an Employer Contribution in an amount
equal to the sum that would have been contributed on such
Participant’s behalf as a matching contribution for such Plan
Year to the Program had the amount of the Participant’s
S
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