2006
STOCK INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD
GRANTED TO
TARGET
NUMBER OF RESTRICTED STOCK UNITS :
[ ]
MAXIMUM
NUMBER OF RESTRICTED STOCK UNITS :
[ ]
Compensation
and Management Development Committee:
You
have advised me that I have been granted the above
performance-based restricted stock unit (“RSU”) award
subject to the terms, restrictions and conditions set forth in this
agreement, including the provision that receipt of the shares of
the stock award is contingent upon my remaining in the continuous
employ of Zimmer Holdings, Inc. or a subsidiary for a period of
four years from the Award Date. I understand that some or all of
such RSUs may be forfeited if I leave the Company prior to that
time, and it is expected that I will retain the stock I receive
upon the lapse of the restrictions consistent with the
Company’s retention guidelines in effect at the time the
restrictions lapse.
My
signature below indicates my agreement to all the terms,
restrictions and conditions herein set forth.
ZIMMER
HOLDINGS, INC.
2006 STOCK INCENTIVE PLAN
PERFORMANCE-BASED
RESTRICTED STOCK UNIT AWARD
Under
the terms of the Zimmer Holdings, Inc. 2006 Stock Incentive Plan
(the “Plan”), the Compensation and Management
Development Committee of the Board of Directors of Zimmer Holdings,
Inc. (the “Committee”) has granted to the Award
Recipient on the Award Date an award of RSUs over Zimmer Holdings,
Inc. Common Stock, par value $0.01 per share (“Common
Stock”), as designated herein subject to the terms,
conditions, and restrictions set forth in this agreement (this
“RSU Award”). The purposes of such RSU Award are to
motivate and retain the Award Recipient as an employee of Zimmer
Holdings, Inc. (the “Company”) or a subsidiary of the
Company, to encourage the Award Recipient to continue to give best
efforts for the Company’s future success, and to further the
opportunity for stock ownership by the Award Recipient in order to
increase the Award Recipient’s proprietary interest in the
Company. Each RSU represents an unfunded, unsecured promise by the
Company to deliver one share of Common Stock, subject to certain
performance-based and time-based vesting requirements and the other
restrictions, terms and conditions contained in this agreement.
Except as may be required by law, the Award Recipient is not
required to make any payment (other than payments for taxes
pursuant to Section 7 hereof) or provide any consideration
other than the rendering of future services to the Company or a
subsidiary of the Company.
(a) No
RSUs shall be earned unless and until the Committee shall have
determined the extent to which the performance criteria set forth
in Annex A hereto have been met with respect to fiscal year
2009.
(b) Notwithstanding
anything to the contrary herein, the number of shares of Common
Stock that may be issued in settlement of this RSU Award shall be
limited to the maximum number of shares of Common Stock that would
not exceed the individual participant limitation contained in
Section 3(b) of the Plan.
(c) The
grant of RSUs does not entitle the Award Recipient to any rights of
a shareholder of Common Stock, including dividends or voting
rights. The rights of the Award Recipient with respect to an RSU
shall remain forfeitable at all times prior to the lapse of the
Restriction Period for that RSU, as defined in Section 4
below.
(d) Neither
the RSUs nor any interest therein may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except
by will or the laws of descent and distribution, and any such
purported sale, assignment, transfer, pledge, hypothecation or
other disposition shall be void and unenforceable against the
Company.
3.
PERFORMANCE AND TIME-BASED VESTING
Except
as otherwise provided in this Section 3 and Section 4
below, an RSU granted in this RSU Award shall be subject to the
restrictions and conditions set forth herein during the period from
the Award Date until such RSU becomes vested and nonforfeitable
(the “Restriction Period”).
(a) As
soon as practicable following the availability of audited results
of the Company for fiscal year 2009 (the “Performance
Period”), the Committee shall determine whether and the
extent to which the performance criteria in Annex A have been
satisfied and the number of RSUs earned (the “Earned
RSUs”). The date on which the Committee makes its
determination is hereinafter referred to as the
“Determination Date”.
(b) Except
as otherwise set forth in Section 4 below, one third of the
Earned RSUs granted in this RSU Award shall become vested and
nonforfeitable on the second anniversary of the Award Date provided
the Award Recipient has been continuously employed by the Company
or a subsidiary of the Company since the Award Date; an additional
third of the Earned RSUs granted in this RSU Award shall become
vested and nonforfeitable on the third anniversary of the Award
Date provided the Award Recipient has been continuously employed by
the Company or a subsidiary of the Company since the Award Date;
and the final third of the Earned RSUs granted in this RSU Award
shall become vested and nonforfeitable on the fourth anniversary of
the Award Date provided the Award Recipient has been continuously
employed by the Company or a subsidiary of the Company since the
Award Date.
4.
RESTRICTIONS AND FORFEITURES
(a) Except
as set forth below, if the Award Recipient terminates employment
with the Company or a subsidiary for any reason other than
retirement, death or disability before all of the Earned RSUs have
become vested, the Earned RSUs that are not already vested as of
the termination date shall be forfeited. If after the Award
Recipient has been continuously employed through the Determination
Date, the Award Recipient terminates employment with the Company or
a subsidiary on account of retirement, death or disability, the
restrictions with respect to all unvested Earned RSUs granted in
this RSU Award shall be waived and the Earned RSUs will be deemed
fully vested. In the event of the termination of an Award
Recipient’s employment by the Company, other than for cause,
retirement, death or disability, after the Award Recipient has been
continuously employed through the Determination Date, a pro rata
portion of the Earned RSUs granted in this RSU Award shall be
deemed vested as shown in Annex B to this agreement. Such pro rata
portion shall include the portion, if any, of this RSU Award
already vested under the terms of this agreement.
“Retirement” shall mean the Award Recipient’s
termination of employment with the Company or a subsidiary on or
after (i) the Award Recipient’s 65th birthday,
(ii) the Award Recipient’s 55th birthday after having
completed 10 years of service with the Company or any of its
subsidiaries, or (iii) the date the sum of the Award
Recipient’s age plus years of service, when rounded up to the
next highest number, equals at least 70 and the Award Recipient has
completed ten years of service with the Company or any of its
subsidiaries and the Award Recipient’s employment terminates
for any reason other than death, disability, resignation, willful
misconduct, or activity deemed detrimental to the interest of the
Company and, where applicable, the Award Recipient has executed a
general release and/or a covenant not to solicit as required by the
Company. “Disability” shall mean qualifying and
receiving payments under a disability pay plan of the Company.
“Cause” shall mean termination by the Company of the
Award Recipient’s employment upon the willful and continued
failure by the Award Recipient to substantially perform the Award
Recipient’s duties with the Company (other than any such a
failure resulting from the Award Recipient’s incapacity due
to physical or mental illness) for a period of at least
30 days after a written demand for substantial performance is
delivered to the Award Recipient, which demand specifically
identifies
2
the
manner in which the Award Recipient has not substantially performed
the Award Recipient’s duties, or the willful engaging by the
Award Recipient in conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or
otherwise. No act, or failure to act, on the Award
Recipient’s part shall be deemed willful unless done, or
omitted to be done, by the Award Recipient not in good faith and
without reasonable belief that the Award Recipient’s act, or
failure to act, was in the best interest of the Company. In the
event of special circumstances as determined by the Committee, the
Committee may, in its sole discretion where it finds that a waiver
would be in the best interests of the Company, waive any
restrictions then remaining with respect to all or part of this RSU
Award and accelerate the vesting with regard to such RSU Award or
part thereof. For the purposes of this RSU Award, service with
Bristol-Myers Squi
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