2006
STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION GRANTED TO
EXERCISE PRICE PER SHARE:
$
Compensation
and Management Development Committee:
I understand that
this option has been granted to provide a means for me to acquire
and/or expand an ownership position in Zimmer Holdings, Inc., and
it is expected that I will retain the stock I receive upon the
exercise of this option consistent with the Company’s share
retention guidelines in effect at the time of exercise.
I hereby agree to
the foregoing and following terms and conditions and accept the
grant of this option subject thereto.
ZIMMER HOLDINGS, INC.
2006 STOCK INCENTIVE PLAN
NONQUALIFlED STOCK OPTION
Zimmer Holdings,
Inc (the “Company”) hereby grants pursuant to the terms
of the heretofore designated stock option plan (the
“Plan”) to the heretofore named employee (the
“Optionee”), as a matter of separate inducement and
agreement in connection with her/his employment, and not as or in
lieu of any salary or other compensation for her/his services, and
upon the terms and conditions set forth below, the option to
purchase the number of fully paid and non-assessable shares of the
common stock of Zimmer Holdings, Inc., par value $.01 per share
(“Common Stock”), heretofore set forth (this
“Option”) on or before the expiration of ten years from
the date hereof (the “Expiration Date”) at the
aforementioned exercise price per share. The Board of Directors of
the Company (the “Board”) has authorized the
Compensation and Management Development Committee of the Board (the
“Committee”) to administer the Plan.
This Option is
granted upon and subject to the following terms and
conditions:
1. No Option
may be exercised hereunder for the purchase of shares unless the
Optionee shall have remained in the continuous employ of the
Company or of one of its subsidiaries for one year following the
date hereof. Thereafter, provided that the Optionee shall at the
time of such exercise, except as specifically set forth herein to
the contrary, been in the employ of the Company or of one of its
subsidiaries, this Option may from time to time prior to the
Expiration Date be exercised in the manner hereinafter set forth,
and this Option may be exercised (i) only to the extent of
25 percent of the number of shares to which this Option
applies on or after the first anniversary and prior to the second
anniversary of the date of grant hereof, (ii) only to the
extent of 50 percent of the number of shares to which this
Option applies on or after the second anniversary and prior to the
third anniversary of the date of grant hereof, (iii) only to
the extent of 75 percent of the number of shares to which this
Option applies on or after the third anniversary and prior to the
fourth anniversary of the date of grant hereof; and (iv) in
its entirety on or after the fourth anniversary of the date of
grant hereof.
2. This
Option hereby granted may be exercised, in whole or in part in
accordance with the vesting schedule set forth in Section 1
above, by the delivery of an exercise notice to the Company or the
Company’s designated agent. The exercise notice will be
effective upon receipt by the appropriate person at the Company or
the Company’s agent and upon payment of the exercise price,
any fees and any other amounts due to cover the withholding taxes,
payroll taxes and similar-type payments as described herein. Such
exercise notice (which, in the Company’s discretion, may be,
or may be required to be, given by electronic, telefax or other
specified means) shall specify the number of shares with respect to
which this Option is being exercised and such other representations
and agreements as may be required by the Company. In the event the
specified Expiration Date falls on a day which is not a regular
business day at the Company’s executive office in Warsaw,
Indiana, then such written notification must be received on or
before the last regular business day prior to such Expiration Date.
Payment is to be made by certified personal check, or bank draft,
by payment through a broker in accordance with procedures permitted
by Regulation T of the Federal Reserve Board, or by delivery
of a certificate or certificates for shares of Common Stock owned
by the Optionee for at least six months having a fair market value
at the date of exercise equal to the purchase price for such
shares, or in any combination of the foregoing; provided, however,
that payment in shares of Common Stock will not be permitted unless
at least 100 shares of Common Stock are required and delivered for
such purpose. Any stock certificate or certificates so delivered
must be endorsed, or accompanied by an appropriate stock power, to
the order of Zimmer Holdings, Inc., with the signature guaranteed
by a bank or trust company or by a member firm of the New York
Stock Exchange. No shares shall be sold or delivered hereunder
until full payment for such shares has been made. At its
discretion, the Committee may modify or suspend any method for the
exercise of this Option. The Optionee shall have the rights of a
shareholder only with respect to shares of stock for which
certificates have been issued to her/him.
3. The
Company shall not be required to issue or deliver any certificate
or certificates for shares of its Common Stock purchased upon the
exercise of any part of this Option prior to (i) the admission
of such shares to listing on any stock exchange on which the stock
may then be listed, (ii) the completion of any registration or
other qualification of such shares under any state or federal law
or rulings or regulations of any governmental regulatory body,
(iii) the obtaining of any consent or approval or other
clearance from any governmental agency, which the Company shall, in
its sole discretion, determine to be necessary or advisable, and
(iv) the payment to the Company, upon its demand, of any
amount requested by the Company for the purpose of satisfying its
withholding obligation, if any, with respect to federal, state or
local income or FICA or earnings tax or any other applicable tax
assessment (plus interest or penalties thereon, if any, caused by a
delay in making such payment) incurred by reason of the exercise of
this Option or the transfer of shares thereupon (the
“Withholding Tax Obligation”). The Optionee may satisfy
the Withholding Tax Obligation by authorizing the Company or its
agent to withhold an appropriate number of shares being issued on
exercise; provided, however, that the value of the shares withheld
shall not exceed the Company’s minimum required Withholding
Tax Obligation with respect to the exercise of this
Option.
4. This
Option is not transferable by the Optionee otherwise than by
will
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