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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

ZIMMER HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

      Payment of Filing Fee (Check the appropriate box):

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ZIMMER HOLDINGS, INC.

March 24, 2003

Dear Fellow Stockholder:

     You are cordially invited to attend the Annual Meeting of Stockholders of Zimmer Holdings, Inc. at the Chicago Marriott Downtown, 540 North Michigan Avenue, Chicago, Illinois on Tuesday, May 13, 2003, at 9:00 a.m.

     This booklet includes the Notice of Annual Meeting and the Proxy Statement. The Proxy Statement describes the business to be transacted at the meeting and provides other information about the company that you should know when you vote your shares.

     The principal business of the Annual Meeting will be the election of one director, approval of the Zimmer Holdings, Inc. 2001 Stock Incentive Plan, approval of the Zimmer Holdings, Inc. Executive Performance Incentive Plan, approval of a proposed amendment to the Zimmer Holdings, Inc. TeamShare Stock Option Plan and consideration of two stockholder proposals. We will also review the status of the company’s business.

     It is important that your shares be represented whether or not you attend the meeting. Registered stockholders can vote their shares via the Internet or by using a toll-free telephone number. Instructions for using these convenient services appear on the proxy card. You can also vote your shares by marking your votes on the proxy card, signing and dating it and mailing it promptly using the envelope provided.

     We have provided space on the proxy card for comments. We urge you to use it to let us know your feelings about the company or to bring a particular matter to our attention. If you hold your shares through an intermediary, please feel free to write directly to us.

	J. Raymond Elliott
	Chairman, President and Chief Executive Officer

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     Notice is hereby given that the Annual Meeting of Stockholders will be held at the Chicago Marriott Downtown, 540 North Michigan Avenue, Chicago, Illinois on Tuesday, May 13, 2003, at 9:00 a.m. for the following purposes as set forth in the accompanying Proxy Statement:

     Holders of record of the company’s common stock at the close of business on March 17, 2003, will be entitled to vote at the meeting.

	By Order of the Board of Directors
	David C. Dvorak
	Secretary

Dated: March 24, 2003

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REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT.

IF YOU DO NOT ATTEND THE ANNUAL MEETING TO VOTE IN PERSON, YOUR VOTE WILL NOT BE COUNTED UNLESS A PROXY REPRESENTING YOUR SHARES IS PRESENTED AT THE MEETING.

TO ENSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, PLEASE VOTE IN ONE OF THESE WAYS:

OR

OR

IF YOU DO ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE BY BALLOT.

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ZIMMER HOLDINGS, INC.

     This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors for use at the Annual Meeting of Stockholders on May 13, 2003.

Stockholders Entitled to Vote

     Holders of record of the company’s $0.01 par value common stock at the close of business on March 17, 2003 will be entitled to vote at the 2003 Annual Meeting. Each share is entitled to one vote on each matter properly brought before the meeting. Proxies are solicited to give all stockholders who are entitled to vote on the matters that come before the meeting the opportunity to do so whether or not they attend the meeting in person.

Proxies and Voting

     If you are a registered stockholder, you can simplify your voting and save the company expense by voting via the Internet or calling the toll-free number listed on the proxy card. Internet and telephone voting information is provided on the proxy card. A control number, located on the lower right of the proxy card, is designated to verify a stockholder’s identity and allow the stockholder to vote the shares and confirm that the voting instructions have been recorded properly. If you vote via the Internet or by telephone, please do not return a signed proxy card.

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adoption of all other proposals, which are decided by a majority of the shares of stock of the company present in person or by proxy and entitled to vote, only proxies and ballots indicating votes “FOR,” “AGAINST” or “ABSTAIN” on the proposals or providing the designated proxies with the right to vote in their judgment and discretion on the proposals are counted to determine the number of shares present and entitled to vote; broker non-votes are not counted.

Costs of Proxy Solicitation

     Employees of the company may solicit proxies on behalf of the Board of Directors through the mail, in person, and by telecommunications. The cost thereof will be borne by the company. In addition, management has retained Georgeson Shareholder Communications, Inc. to assist in soliciting proxies for a fee of $7,500, plus out-of-pocket expenses. The company will, upon request, reimburse brokerage firms and others for their reasonable expenses incurred for forwarding solicitation material to beneficial owners of stock.

List of Stockholders

     In accordance with Delaware law, a list of stockholders entitled to vote at the meeting will be available at the meeting and for ten days prior to the meeting, between the hours of 8:00 a.m. and 5:00 p.m., at our offices at 345 East Main Street, Warsaw, Indiana by contacting the Secretary of the company.

     At the close of business on March 17, 2003, there were 196,256,041 shares of $0.01 par value common stock outstanding and entitled to vote.

     The following table sets forth certain information concerning each person (including any group) known to us to beneficially own more than five percent (5%) of the common stock of the company as of February 14, 2003. Unless otherwise noted, shares are owned directly or indirectly with sole voting and investment power.

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     The following table sets forth, as of January 15, 2003, beneficial ownership of shares of common stock of the company by each director, each of the executives named in the Summary Compensation Table and all directors and executive officers as a group. Neither all directors and executive officers as a group nor any of the individuals named below beneficially owns greater than 1% of the outstanding shares of common stock.

     Under Section 16(a) of the Securities Exchange Act of 1934, the company’s directors, executive officers and the beneficial holders of more than 10% of the company’s common stock are required to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Based on our records and other information, the company believes that during 2002 all applicable Section 16(a) filing requirements were met, except that, due to administrative oversight, two late filings
of Forms 4 were made for each of Mr. Glasscock, Dr. Herzlinger and Dr. White and one late filing of Form 4 was made for Mr. McGoldrick. Each of the late filings reported an accrual of deferred share units under our Deferred Compensation Plan
for Non-Employee Directors.

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     The business of the company is managed under the direction of the Board of Directors. It has responsibility for establishing broad corporate policies and for the overall performance of the company. The Board meets on a regularly scheduled basis during the year to review significant developments affecting the company and to act on matters requiring Board approval. It also holds special meetings when an important matter requires Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. In 2002, there were nine meetings of the Board. During 2002, no director attended fewer than 75% of the total meetings of the Board of Directors and each of the committee(s) on which he or she served.

Committees of the Board

     The company’s Restated By-Laws specifically provide that the Board may delegate responsibility to committees. During 2002, the Board had four standing committees: an Audit Committee, a Compensation and Management Development Committee, a Governance Committee and a Science and Technology Committee. The membership of the Audit Committee, the Compensation and Management Development Committee and the Governance Committee is composed entirely of non-employee directors. In addition, the members of the Audit Committee are “independent” as that term is defined in the listing standards of the New York Stock Exchange. The membership of the Science and Technology Committee is composed of one non-employee director and two employee representatives, including the company’s chief scientific officer.

Audit Committee

     The principal functions of the Audit Committee include:

Compensation and Management Development Committee

     The duties of the Compensation and Management Development Committee include:

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Governance Committee

     The duties of the Governance Committee include:

Science and Technology Committee

     The duties of the Science and Technology Committee include:

Audit Committee Report

     The Audit Committee is responsible for overseeing and monitoring the quality of the company’s accounting and auditing practices. Management is responsible for planning and conducting audits and ensuring that the company’s financial statements are prepared in accordance with generally accepted accounting principles.

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Compensation of Directors

     Non-employee directors of the company receive an annual retainer of $50,000 and an additional fee of $1,500 for attending each Board meeting, each Board committee meeting not held on the same day as a Board meeting and the Annual Meeting of Stockholders. Each non-employee director also receives 500 deferred share units at each Annual Meeting of Stockholders and committee chairs receive an annual fee of $5,000. At the end of each calendar quarter, non-employee directors are paid one-fourth of their annual retainers and committee chair annual fees and fees for attending Board and committee meetings held during the quarter. The company also provides non-employee directors with travel accident insurance when on company business.

Directors and Nominee

     The Board of Directors is divided into three classes whose terms expire at successive annual meetings. One director will be elected at the Annual Meeting to serve for a term expiring in 2006. The nominee for director named below is currently a director of the company. After the election of one director at the meeting, the company will have five directors, including the four directors whose present terms extend beyond the meeting. In the interim between Annual Meetings, the Board has the authority to increase or decrease the size of the Board and fill vacancies. Listed first below is the nominee for election, followed by the directors whose terms expire in 2004 and 2005, with information including their principal occupation and other business affiliations, the year each was first elected as a director, the Board committee memberships of each and each director’s age.

Nominee for Director: 2003 – 2006 Term

		Augustus A. White, III, M.D., Ph.D. Director Since 2001 Master of the Oliver Wendell Holmes Society, Harvard Medical School; Professor of Orthopaedic Surgery at the Harvard Medical School and the Harvard-MIT Division of Health Sciences and Technology; and Orthopaedic Surgeon-in-Chief, Emeritus, at the Beth Israel Deaconess Medical Center in Boston. He previously served as the Chief of Spine Surgery at Beth Israel and is Director of the Daniel E. Hogan Spine Fellowship Program. He is a graduate of the Stanford University Medical School, holds a Ph.D. from the Karolinska Institute in Stockholm and an A.B. from Brown University, and graduated from the Advanced Management Program at the Harvard Business School. Dr. White is a recipient of the Bronze Star, which he earned while stationed as a Captain in the U.S. Army Medical Corps in Vietnam. He is an internationally known and widely published authority on biomechanics of the spine, fracture healing and surgical and non-surgical care of the spine. He is nationally recognized for his work in medical education, diversity, and issues of health care disparities. Dr. White is a director of Orthologic Corp. Board Committees: Audit Committee, Compensation and Management Development Committee and Science and Technology Committee (Chair). Age 66.

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Continuing Directors Whose Present Terms Expire in 2004
		Larry C. Glasscock, Director Since 2001 President and Chief Executive Officer of Anthem Insurance Companies, Inc. (“Anthem Insurance”), the Blue Cross and Blue Shield licensee for Indiana, Kentucky, Ohio, Connecticut, New Hampshire, Maine, Colorado, Nevada and Virginia, since October 1999 and President and Chief Executive Officer of Anthem, Inc., the publicly-held parent of Anthem Insurance, since July 2001. Mr. Glasscock joined Anthem Insurance in April 1998 as Senior Executive Vice President and Chief Operating Officer. He was named President and Chief Operating Officer in April 1999. Prior to joining Anthem Insurance, Mr. Glasscock served as Chief Operating Officer of CareFirst, Inc. from January through April 1998 and he served as President and Chief Executive Officer of Group Hospitalization & Medical Services, Inc., which did business as Blue Cross and Blue Shield of the National Capital Area, from September 1993 to January 1998. From 1991 to 1993, he served as President, Chief Operating Officer and Director of First American Bank, N.A. Mr. Glasscock is a director of Anthem, Inc. Board Committees: Audit Committee (Chair) and Compensation and Management Development Committee. Age 54.
		John L. McGoldrick, Director Since 2001 Executive Vice President and General Counsel of Bristol-Myers Squibb Company (“Bristol-Myers Squibb”) since January 2000; Senior Vice President, General Counsel and President, Medical Devices Group from December 1998 to January 2000 and Senior Vice President and General Counsel from 1995 to December 1998. Senior director of the Board of the New Jersey Transit Corporation and member of the board of the Advanced Medical Technology Association (AdvaMed), the medical device industry’s trade association (1998-2002). He has served on several governmental reform commissions in New Jersey. He is an invited participant of The Aspen Institute on the World Economy and the World Economic Forum (Davos). Before joining Bristol-Myers Squibb, Mr. McGoldrick was a senior partner and executive committee member of the law firm of McCarter & English. He is a graduate of Harvard College and the Harvard Law School. Board Committees: Compensation and Management Development Committee (Chair). Age 62.
Continuing Directors Whose Present Terms Expire in 2005
		J. Raymond Elliott, Director Since 2001 Chairman, President and Chief Executive Officer of the company since August 6, 2001. President, Chief Executive Officer and Director since March 20, 2001. Mr. Elliott was appointed President of Zimmer, Inc., the company’s predecessor, in November 1997. Mr. Elliott has approximately 30 years of experience in orthopaedics, medical devices and consumer products. Prior to joining Zimmer, Inc., he served as President and Chief Executive Officer of Cybex, Inc., a publicly traded medical rehabilitation and cardiovascular products company, from September 1995 to June 1997, and previously as President and Chief Executive Officer of J.R. Elliott & Associates, a privately held M&A firm. During this time, Mr. Elliott successfully completed several M&A and turnaround projects for the federal government and numerous healthcare firms, including the role of Chairman and Chief Executive Officer for Cablecom Inc. Mr. Elliott has also served as Chairman and President of various divisions of Southam, Inc., a communications group, and as Group President of food and beverage leader John Labatt, Inc. (now Interbrew Corp.). He began his career in the healthcare industry with American Hospital Supply Corporation (later Baxter International), where he gained 15 years experience in sales, marketing, operations, business development and general management, leading to his appointment as President of all Far East divisions, based in Tokyo, Japan. Mr. Elliott has served as a director on more than 15 business-related boards in the U.S., Canada, Japan and Europe and has served on three occasions as Chairman. He is currently a director of the State of Indiana Workplace Development Board and a trustee of the Orthopaedic Research and Education Foundation (“OREF”). He is a member of the board of directors and chair of the orthopaedic sector of AdvaMed. He holds a bachelor’s degree from the University of Western Ontario, Canada. Age 53.

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Continuing Directors Whose Present Terms Expire in 2005 (continued)
		Regina E. Herzlinger, D.B.A., Director Since 2001 The Nancy R. McPherson Professor of Business Administration Chair at the Harvard Business School. She was the first woman to be tenured and chaired at Harvard Business School and the first to serve on a number of corporate boards. She has written many articles and books in the fields of management control and healthcare. Her research has been profiled in industry journals and business publications such as The Wall Street Journal, The Economist, and Fortune and has been recognized for excellence by the American College of Healthcare Executives three times. Managed Healthcare has named her as one of healthcare’s top ten thinkers. Dr. Herzlinger received her Bachelor’s Degree from Massachusetts Institute of Technology and her Doctorate from the Harvard Business School. Dr. Herzlinger is a director of C.R. Bard, Inc. and Noven Pharmaceuticals, Inc. Board Committees: Audit Committee, Compensation and Management Development Committee and Governance Committee (Chair). Age 59.

Compensation and Management Development Committee Report

Compensation Philosophy

     The company’s compensation philosophy is to make a financial investment in people who will deliver the innovative solutions necessary for the company to become the global leader in products that enhance the quality of life for orthopaedic patients. The company’s compensation program is intended to deliver cash, annual incentive and long-term compensation at levels competitive with other companies in the medical device and biotech industry as well as other competitors for talent generally. The company encourages and recognizes superior performance. Annual incentive and long-term incentive programs provide a significant additional compensation opportunity based upon the achievement of performance objectives. To complete the total compensation package and to reward employees who demonstrate their commitment to achieving our business objectives, the company also provides a comprehensive package of health, welfare and retirement benefit programs.

Compensation Components

     The major components of compensation are the same for executives and other employees. All executives and employees receive a salary, annual incentive opportunities, stock option grants and health, welfare and retirement benefits. The Committee periodically reviews the elements of compensation with the help of a major international compensation and benefits consulting firm. A review of executive salaries, bonus and long-term compensation was completed in December 2002. Based on this review, the Committee concluded that executive salaries, annual incentive targets and long-term incentive programs were competitive for a company of its current sales size. As a result, there were no significant changes to the compensation program for 2003. The executive officers received a stock option grant in January 2003 based on the guidelines that were in place for the 2002 grant. All management employees were reviewed for a stock option grant in January 2003. A broad-based stock option grant for employees is considered for August 7 of each year to commemorate the company’s birth date as an independent company. The broad-based grant is intended to allow employees to continue to be rewarded based on value delivered to stockholders.

CEO Compensation

     The compensation for Mr. Elliott was adjusted for a merit increase on April 1, 2002 based on the average increase granted to salaried employees on that date. The merit increase adjustment was 3%. In addition, Mr. Elliott’s salary was adjusted to include the value that had been delivered through the executive car program and a club membership. These executive perquisites were eliminated for all executives, including Mr. Elliott, during 2002 based on a decision by the Compensation Committee of the Board of Directors. The Committee specifically reaffirmed that no loans would be provided to members

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of management. Based on the Committee’s review of current data on CEO compensation, Mr. Elliott’s compensation was found to be competitive at his current salary level of $650,000 with an annual bonus target of 100% of salary.

Deductibility of Compensation Over $1 Million

     U.S. federal income tax law disallows a deduction for certain compensation paid in excess of $1 million to the five executive officers listed in the Summary Compensation Table in this proxy statement. However, performance-based compensation is fully deductible if the programs are approved by stockholders and meet certain other requirements. The company has taken steps to ensure the deductibility of payments under the Executive Performance Incentive Plan and the 2001 Stock Incentive Plan. In order to maintain the deductibility of payments under both plans, the plans must be approved by the stockholders at the Annual Meeting.

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Executive Officer Compensation Tables and Notes

     The following tables set forth information regarding compensation paid to our Chief Executive Officer and each of our four other most highly compensated executive officers based on salary and bonus earned during 2002.

SUMMARY COMPENSATION TABLE

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OPTION/ SAR GRANTS IN LAST FISCAL YEAR

AGGREGATED OPTIONS/ SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/ SAR VALUES⁽¹⁾

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Pension Benefits

     Most of our U.S. non-union employees, including executive officers, are participants in the Zimmer Holdings, Inc. Retirement Income Plan, a non-contributory pension plan. We have also adopted a non-contributory supplemental pension plan. Our retirement income plan and supplemental pension plan provide all Zimmer participants with credit for their service years with Bristol-Myers Squibb. Benefits payable under our plans will be offset by the value of benefits payable to participants under the Bristol-Myers Squibb plans.

PENSION PLAN TABLES

Table I

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Table II

Retention Agreement

     Pursuant to a retention agreement entered into with Mr. Elliott in February 2001 in anticipation of the separation from Bristol-Myers Squibb, Mr. Elliott was awarded 17,544 phantom deferred share units. At the time of Mr. Elliott’s retirement or termination of employment, his units will be distributed to him in the form of a lump sum cash payment equal to the number of units awarded multiplied by the fair market value of company common stock at the time of his retirement or termination, plus the sum of any dividends credited on shares of company common stock from the date of the award to his retirement or termination date.

Change in Control Arrangements

     The company has entered into change in control agreements with thirteen executives including each of the executive officers named in the Summary Compensation Table in this proxy statement. The agreements are intended to provide for continuity of management in the event of a change in control of the company. By their terms, the agreements are in effect through December 31, 2003, and will be automatically extended, beginning on January 1, 2004, in one-year increments, unless either the company or the executive gives prior notice of termination or a change in control shall have occurred prior to January 1 of such year. If a change in control occurs during the term of the agreement, the agreement shall continue in effect for a period of not less than 36 (in the case of Mr. Elliott) or 24 (in the case of the other executives) months beyond the month in which such change in control occurred.

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Executive Performance Plan. In addition, the executive would receive a payout of any unpaid incentive compensation which has been allocated or awarded to the executive for the completed calendar year preceding the date of termination and a pro rata portion to the date of termination of the aggregate value of all contingent incentive compensation awards to the executive for the current calendar year.

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Performance Graph

     The following graph compares the performance of the company common stock for the periods indicated with the performance of the S&P 500 Stock Index and the S&P 500 Health Care Equipment Index.

Comparison of Cumulative Total Return

     Assumes $100 was invested on August 7, 2001 (the first date the company common stock was traded on the New York Stock Exchange) in company common stock and each index. Values are as of December 31 assuming dividends are reinvested. No cash dividends have been declared or paid on company common stock. Returns over the indicated period should not be considered indicative of future returns.

Compensation Committee Interlocks and Insider Participation

     No member of the Compensation and Management Development Committee during 2002 was an officer, employee or former officer of the company or had any relationship requiring disclosure herein pursuant to SEC regulations. No executive officer of the company served as a member of a compensation committee or a director of another entity under circumstances requiring disclosure under SEC regulations.

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Equity Compensation Plan Information

     The following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2002, including the 2001 Stock Incentive Plan, the TeamShare Stock Option Plan, the Stock Plan for Non-Employee Directors, the Deferred Compensation Plan for Non-Employee Directors, and the Independent Sales Representatives Deferred Annual Final Compensation and Equity Incentive Plan. The following table does not take into account the proposed increase in the number of shares subject to the TeamShare Stock Option Plan set forth in proposal 4. It also does not take into account our Employee Stock Purchase Plan, which was approved by stockholders in 2002 but which was not yet in effect as of December 31, 2002. As of January 1, 2003, an aggregate of 3,000,000 shares of Zimmer common stock were available for issuance under the Employee Stock Purchase Plan.

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Proposal 1. Election of Director

     One director is to be elected at the meeting for a three-year term ending at the 2006 Annual Meeting. Augustus A. White, III, M.D., Ph.D., who is presently a director of the company, has been nominated by the Board of Directors for election at this Annual Meeting. The accompanying proxy will be voted for the Board of Directors’ nominee, except where authority to so vote is withheld. Should the nominee be unable to serve, the proxy will be voted for such person as shall be designated by the Board of Directors.

Proposal 2. Approval of the Zimmer Holdings, Inc. 2001 Stock Incentive Plan

     The Zimmer Holdings, Inc. 2001 Stock Incentive Plan (the “Stock Incentive Plan”) provides for the grant of the following types of equity-based awards to our officers and key employees during the five-year period following its adoption: incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalents, restricted stock, deferred stock units, performance units and performance shares. The number of persons currently eligible to participate in this plan is approximately 400.

Summary of the Stock Incentive Plan

Purpose

     The purpose of the Stock Incentive Plan is to secure for the company and its stockholders the benefits of the incentive inherent in common stock ownership by officers and key employees who will be largely responsible for the company’s future growth and continued financial success. The plan provides long-term incentives in addition to current compensation to certain officers and key employees of the company and its subsidiaries who contribute significantly to the long-term performance and growth of the company.

Administration

     The Stock Incentive Plan is administered by the Board of Directors through the Compensation and Management Development Committee (the “Committee”), which is composed entirely of non-employee directors who are intended to meet the criteria of “outside director” under Section 162(m) of the Internal Revenue Code and “non-employee director” under Section 16 of the Securities Exchange Act of 1934, as amended. The Committee selects the officers and key employees who receive options or awards, the form of those awards, the number of shares or dollar targets of the options or awards and all terms and conditions of the options or awards. The Committee also certifies the level of attainment of performance targets.

Eligibility; Forms of Awards

     Options and awards may be granted only to present or future officers and key employees of the company, including its subsidiaries and affiliates. The Committee may grant incentive stock options, nonqualified stock options, stock appreciation rights in conjunction with stock options, either at the time the option is granted or by amendment of the option after its date of grant, restricted stock, performance units, performance shares and deferred stock unit awards.

Maximum Stock Award Levels

     The maximum number of shares available for awards under the Stock Incentive Plan with respect to each calendar year is 1.9% of the outstanding shares of common stock on January 1 of such year, plus shares from the prior year that were available but not awarded; subject to options or awards which terminated, expired or were canceled, forfeited, exchanged or surrendered without being exercised; tendered to pay the purchase price of options that were exercised; or retained or surrendered in the prior year to satisfy tax withholding requirements under the Stock Incentive Plan.

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     Of these total available shares, no individual may receive options or awards as a maximum amount, which in the aggregate exceed 2,000,000 shares of common stock over the 5-year term of the plan. Aggregate shares issued under performance units, performance share awards, restricted stock awards and deferred stock units may not exceed 25% of the available shares. In addition, a maximum of 5,000,000 shares may be granted as incentive stock options. Shares issued in connection with options and awards converted to Zimmer stock upon our separation from our former parent or upon an acquisition do not count against these limits.

Stock Option and SAR Awards

     Stock options awarded may be either incentive stock options or nonqualified stock options. Options will expire no later than 10 years after the date of grant and may not be exercised prior to one year following the date of grant unless otherwise determined by the Committee. Generally, the exercise price of stock options may not be less than the fair market value of common stock on the date of grant. The Committee may establish other vesting or performance requirements which must be met prior to the exercise of the stock options. Stock options may be granted in tandem with stock appreciation rights.

Prohibition on Repricing

     As amended by the Board of Directors, the Stock Incentive Plan prohibits the repricing of outstanding options other than with prior stockholder approval or pursuant to the antidilution provisions of the plan for adjustments resulting from stock splits, stock dividends, recapitalizations and similar transactions. The foregoing prohibition also applies to any other transaction that would be treated as a repricing of outstanding options under generally accepted accounting principles.

Restricted Stock Awards

     The Committee may also grant shares of restricted stock that are subject to the continued employment of the participant and may also be subject to performance criteria at the discretion of the Committee. Generally, if the participant’s employment terminates prior to the completion of the specified employment or the attainment of the specified performance goals, the awards will lapse. The Committee may provide for a pro-rated attainment of the performance criteria or a pro-rated attainment of time-based restrictions. Generally, restricted stock will not vest during a period less than one year following the date of an award unless the Committee determines otherwise. During the restriction period, the participant is entitled to vote the shares and to receive dividends, if any are declared.

Long-Term Performance Awards

     The Committee may grant performance units or performance shares. Performance units entitle the participant to receive a specified dollar value, variable under conditions specified in the award, if the performance objectives specified in the award are achieved and the other terms and conditions thereof are satisfied. Performance shares entitle the participant to receive a specified number of shares of common stock, or the equivalent cash value, if the objectives specified in the award are achieved and other terms are satisfied.

Deferred Stock Unit Awards

     Deferred stock units consist of the right to receive a payment based upon the value of Zimmer common stock. Deferred stock unit awards may be subject to time-based or other restrictions.

Adjustments

     The number, class and price of stock options and other awards are subject to appropriate adjustment in the event of certain changes in Zimmer common stock including stock dividends, recapitalization, mergers, consolidations, split-ups, combinations or exchanges of shares and similar transactions.

Change in Control

     In the event a participant’s employment with the company terminates pursuant to a qualifying termination (as defined in the plan) during the three year period following a change in control of the company (as defined in the plan), all of the participant’s outstanding options will become immediately fully vested and exercisable. In addition, in the event of a change in control of the company, the Committee may (1) determine that outstanding options will be assumed by, or replaced with comparable options by, the surviving corporation and that outstanding awards will be converted to similar awards of the surviving corporation, or (2) take such other actions with respect to outstanding options and awards as the Committee deems appropriate.

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Amendment of the Plan

     The Board of Directors may amend or suspend the Stock Incentive Plan at any time and from time to time; provided, however, that the Board of Directors shall not amend the plan without stockholder approval if such approval is required in order to comply with Section 162(m) or 422 of the Internal Revenue Code or other applicable law, or to comply with applicable stock exchange requirements. A termination or amendment of the Stock Incentive Plan that occurs after an option or award is granted will not impair the rights of an optionee or participant unless the optionee or participant consents otherwise in writing.

Federal Income Tax Consequences

     The following is a brief summary of the principal federal income tax consequences of awards under the plan. The summary is based on current federal income tax laws and interpretations thereof, all of which are subject to change at any time, possibly with retroactive effect. The summary is not intended to be exhaustive.

Incorporation by Reference

     The above description is only a summary of the Stock Incentive Plan and is qualified in its entirety by reference to the full text, a copy of which is included in this Proxy Statement as Appendix B.

Proposal 3. Approval of the Zimmer Holdings, Inc. Executive Performance Incentive Plan

Summary of the Performance Incentive Plan

Purpose

     The purpose of the Performance Incentive Plan is to promote the company’s interests and the interests of its stockholders by providing additional compensation as incentive to certain key executives who contribute materially to the company’s success.

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Administration

     The Performance Incentive Plan is administered under the supervision of the Board of Directors through the Committee.

Performance Incentive Awards

     For each fiscal year of the company, the Committee determines the following:

Form of Payment

     The Performance Incentive Plan permits the Committee to determine whether payment will be made in cash, common stock of the company, or a combination. Effective January 1, 2003, the Committee adopted regulations requiring that payment be made in cash.

Maximum Payments

     The total amount of awards paid under the Performance Incentive Plan relating to any fiscal year may not exceed two and one-half percent of pretax earnings. The maximum amount which any individual participant may receive relating to any fiscal year may not exceed 0.625 percent of pretax earnings.

Amendment or Discontinuance

     The Board may alter, amend, suspend or discontinue the Performance Incentive Plan, but may not, without approval of the holders of a majority of the company’s common stock, make any alteration or amendment which would permit the total payments under the Performance Incentive Plan for any year to exceed the plan limitations.

Incorporation by Reference

     The above description is only a summary of the Performance Incentive Plan and is qualified in its entirety by reference to its full text, a copy of which is included in this Proxy Statement as Appendix C.

Proposal 4. Approval of Amendment to the Zimmer Holdings, Inc. TeamShare Stock Option Plan

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Summary of the TeamShare Plan

Purpose

     The purpose of the TeamShare Plan is to advance the company’s interests and the interests of its subsidiaries and affiliates by giving substantially all employees a stake in the company’s future growth, in the form of stock options, thereby improving such employees’ long-term incentives and aligning their interests with those of the company’s stockholders.

Administration

     The TeamShare Plan is administered by the Board of Directors through the Committee. The Committee selects the employees to whom options may be granted or offered, determines the number of option shares to be granted to any employee, the dates of such grants and the terms and conditions of such options, prescribes the form of the documents to be used in the administration of the options granted and interprets and construes the provisions of the TeamShare Plan.

Amount of Stock Available for Grants

     If the amendment of the TeamShare Plan is approved by the stockholders, the number of shares of common stock which may be issued under the TeamShare Plan would be increased from 1,000,000 to 3,000,000. This limitation is subject to adjustment as a result of changes in the outstanding stock of the company by reason of stock dividends, recapitalization, mergers, consolidations, split-ups, combinations, exchanges or distributions of shares. Generally, if options granted under the TeamShare Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised, the shares subject to such options shall again be available for awards under the TeamShare Plan.

Eligibility

     An option may be granted to an employee who is actively employed with the company or a subsidiary or affiliate on the grant date if the employee (a) regularly works or is expected to work 1,000 hours in a twelve consecutive month period, (b) is not a leased employee, and (c) is not a key executive of the company or any of its subsidiaries or affiliates.

Terms and Conditions of Options

     The Committee establishes and approves the option agreement form by which options under the TeamShare Plan are granted subject to the following terms and conditions.

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     Disability of Optionee. If an optionee becomes disabled, the optionee will be treated as though the optionee’s employment continued until the earlier of (a) the cessation of disability benefits or payments, (b) the optionee’s death or (c) the optionee’s 65th birthday.

Prohibition on Repricing

     As amended by the Board of Directors, the TeamShare Plan prohibits the repricing of outstanding options other than with prior stockholder approval or pursuant to the antidilution provisions of the plan for adjustments resulting from stock splits, stock dividends, recapitalizations and similar transactions. The foregoing prohibition also applies to any other transaction that would be treated as a repricing of outstanding options under generally accepted accounting principles.

Federal Income Tax Consequences

     See “Federal Income Tax Consequences – Nonqualified Stock Options” on page 19 for a brief summary of the principal federal income tax consequences of awards under the plan.

Amendment, Modification or Suspension

     The TeamShare Plan may be amended, modified or suspended, in whole or in part, by the Board at any time, provided that no amendment, modification or suspension may alter or impair any option or award previously granted under the TeamShare Plan, without the written consent of the optionee.

Incorporation by Reference

     The above description is only a summary of the TeamShare Plan and is qualified in its entirety by reference to its full text as proposed to be amended, a copy of which is included in this Proxy Statement as Appendix D.

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     The grant of awards under each of the Stock Incentive Plan, the Performance Incentive Plan and the TeamShare Plan is entirely within the discretion of the Compensation and Management Development Committee of the Board of Directors. We cannot determine, and therefore we have not disclosed, the benefits or amounts that will be awarded in the future under each of the plans.

Proposal 5. Stockholder Proposal Relating to Poison Pills

Statement of Support

Harvard Report

     A 2001 Harvard Business School study found that good corporate governance (which took into account whether a company had a poison pill) was positively and significantly related to company value. This study, conducted with the University of Pennsylvania’s Wharton School, reviewed the relationship between the corporate governance index for 1,500 companies and company performance from 1990 to 1999.

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Council of Institutional Investors Recommendation

     The Council of Institutional investors www.cii.org, an organization of 120 pension funds which invests $1.5 trillion, called for shareholder approval of poison pills. In recent years, various companies have been willing to redeem existing poison pills or seek shareholder approval for their poison pill. This includes Columbia/HCA, McDermott International and Bausch & Lomb. I believe that our company should follow suit and allow shareholder input.

Statement in Opposition

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL FOR THE FOLLOWING REASONS.

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Proposal 6. Stockholder Proposal Relating to Expensing Stock Options

Statement of Support

     Current accounting rule gives companies the choice of reporting stock option expenses annually in the company income statement or as a footnote in the annual report (See: Financial Accounting Standards Board Statement 123). Most companies, including ours, report the cost of stock options as a footnote in the annual report, rather than include the option costs in determining operating income. We believe that expensing stock options would more accurately reflect a company’s operational earnings.

Statement in Opposition

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THIS PROPOSAL FOR THE FOLLOWING REASONS.

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     Current accounting rules give companies the choice of accounting for stock options using the intrinsic value method, which generally results in recording no expense for stock option awards, or the fair value method, which generally results in expense recognition. Accounting rules further require that the impact of the fair value method be disclosed in the footnotes to the financial statements if the intrinsic value method is used.

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     PricewaterhouseCoopers LLP (“PwC”) served as the company’s independent accountants for 2002. At the time of mailing of the Proxy Statement, the Audit Committee has not made any determination on the selection of independent accountants for 2003.

     To be considered for inclusion in next year’s proxy statement, the company must receive stockholder proposals relating to the 2004 Annual Meeting of Stockholders at its principal executive offices, 345 East Main Street, Warsaw, Indiana 46580, attention: Secretary, no later than November 25, 2003.

     The sections of this Proxy Statement entitled “Audit Committee Report,” “Compensation and Management Development Committee Report” and “Performance Graph” do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the company specifically incorporates them by reference therein.

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Purpose

     The primary purpose of the Audit Committee is to assist the Board of Directors (the “Board”) in fulfilling its responsibility to oversee management’s conduct of the Company’s financial reporting process including the development and maintenance of systems of internal accounting and financial controls and the outside auditor’s annual audit of the Company’s financial statements.

Composition

     The Committee shall consist of at least three Directors, and the Committee’s composition will meet the requirements for audit committees of the New York Stock Exchange:

Responsibilities

     The Committee’s job is one of oversight, recognizing that the Company’s management is responsible for preparing the Company’s financial statements and for developing and maintaining systems of internal accounting and financial controls and that outside auditors are ultimately accountable to the Committee and the Board for their audit of the financial statements and obtaining the necessary understanding of the internal controls to conduct the audit, along with reporting identified areas of improvement in internal controls identified during the course of the audit. The Committee also recognizes that the financial management and the internal and outside auditors have more knowledge and information about the Company than do Committee members. Consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Company’s financial statements or internal controls or any professional certification as to the outside auditor’s work.

     1. The Committee shall review and reassess the adequacy of this Charter on an annual basis and shall make recommendations to the Board, as conditions dictate, to update this Charter.

     2. The Committee shall have the sole authority and responsibility to select, evaluate and, where appropriate, replace the outside auditor. The Committee shall be directly responsible for the compensation and oversight of the work of the outside auditor. The outside auditor shall report directly to the Committee.

     3. The Committee shall preapprove all auditing services and permissible non-audit services provided to the Company by the outside auditor, either before the outside auditor is engaged for the particular service or pursuant to preappoval policies and procedures established by the Committee, subject to the de minimis exception for non-audit services described in Section 10A(i) of the Securities Exchange Act of 1934 and the rules and regulations thereunder.

     4. The Committee shall review and approve the appointment or termination of the director/vice president of internal audit.

     5. The Committee shall meet regularly with the internal auditors and outside auditors independent of management.

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     6. The Committee shall review with the outside auditors and with management the proposed scope of the annual audit, past audit experience, the Company’s program for the internal examination and verification of the Company’s accounting documents and supporting data, recently completed internal examinations of the Company’s accounting documents and supporting data and other matters bearing upon the scope of the audit.

     7. The Committee shall review and discuss with management the audited financial statements to be included in the Company’s Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of Form 10-K) and shall discuss with the outside auditor the matters required to be discussed by Statement of Auditing Standards (“SAS”) No. 61, as amended or supplemented.

     8. In connection with the review by the outside auditor of the financial information included in the Company’s Quarterly Reports on Form 10-Q, the Committee shall review quarterly financial statements prior to their public release and discuss with the outside auditors the matters required to be discussed by SAS No. 61, as amended or supplemented.

     9. The Committee shall review any significant disagreement between management and the outside auditors in connection with the preparation of the financial statements.

     10. The Committee shall:

     11. Based on the review and discussions referred to in paragraphs 6 through 10, the Committee shall determine whether to recommend to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K.

     12. The Committee shall be responsible for ensuring the rotation of the outside auditor’s lead or coordinating audit partner having primary responsibility for the Company’s audit, the concurring or reviewing partner and other audit engagement team partners as required by law.

     13. The Committee shall recommend to the Board policies for the Company’s hiring of employees and former employees of the outside auditor who participated in the audit of the Company.

     14. The Committee shall prepare its report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement.

     15. The Committee shall discuss the quality and adequacy of the Company’s internal controls with management and the internal auditors, and observations regarding internal controls with the outside auditor.

     16. The Committee shall receive reports on material legal affairs, including litigation and monitor the Company’s annual Code of Conduct documentation and corrective actions, and review the significant reports to management prepared by the internal auditors as well as management’s responses thereto.

     17. The Committee shall be responsible for ensuring that the Company has an effective information technology disaster recovery plan.

     18. The Committee shall review and make recommendations to the Board concerning the Company’s policies with regard to affiliate transactions and also with regard to review of CEO and selected officers’ expense accounts and verification of perquisites policies. Affiliates in this context are defined as employees, directors, and other parties closely related to the Company.

     19. The Committee shall review and make recommendations to the Board concerning the Company’s financing plans and policies.

     20. The Committee shall maintain minutes or other records of its meetings and make reports on its meetings to the Board.

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     1. Purpose: The purpose of the 2001 Stock Incentive Plan is to secure for the Company and its stockholders the benefits of the incentive inherent in common stock ownership by the officers and key employees of the Company who will be largely responsible for the Company’s future growth and continued financial success and by providing long-term incentives in addition to current compensation to certain key executives of the Company who contribute significantly to the long-term performance and growth of the Company. It is intended that the former purpose will be effected through the granting of stock options, stock appreciation rights, dividend equivalents, restricted stock and deferred stock unit awards under the Plan and that the latter purpose will be effected through an award conditionally granting performance units or performance shares under the Plan, either independently or in conjunction with and related to a nonqualified stock option grant under the Plan.

     2. Definitions: For purposes of this Plan:

     3. Amount of Stock: (a) Annual Limitation. With respect to each calendar year, the amount of stock which may be made subject to grants of options and awards under the Plan shall not exceed an amount equal to 1.9% of the outstanding shares of the Common Stock on January 1 of such year (or, in the case of the 2001 year, on the effective date of the Plan) plus (i) in any year the number of shares equal to the amount of shares that were available for options and awards under the Plan in the prior year but were not made subject to an option or award in such prior year, (ii) the number of shares that were subject to options or awards granted hereunder that terminated, expired or were cancelled, forfeited, exchanged or surrendered in the prior year without being exercised, (iii) the number of shares participants tendered in the prior year to pay the purchase price of options in accordance with Section 7(b)(5), and (iv) the number of shares the Company retained or caused participants to surrender in the prior year to satisfy Withholding Tax requirements in accordance with Section 13. Options and awards granted under Sections 6 and 20 shall not be considered in applying this limitation, to the extent provided in Sections 6 and 20.

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     (d) Maximum Number of Incentive Stock Options. The maximum number of shares with respect to which incentive stock options may be granted under the Plan shall not exceed 5,000,000 shares. Any shares subject to incentive stock options granted under this Plan that terminate, expire or are cancelled, forfeited, exchanged or surrendered without being exercised may again be subjected to an option or award under the Plan.

     4. Administration: The Plan shall be administered under the supervision of the Board of Directors of the Issuer, which may exercise its powers, to the extent herein provided, through the agency of a Compensation and Management Development Committee (the “Committee”), which shall be appointed by the Board of Directors of the Issuer. The Compensation and Management Development Committee shall consist of not less than two (2) members of the Board who are intended to meet the definition of “outside director” under the provisions of Section 162(m) of the Code and the definition of “non-employee directors” under the provisions of the Exchange Act or rules or regulations promulgated thereunder. In addition, the Board of Directors or the Committee may delegate in writing any or all of its authority hereunder to one or more other committees or subcommittees, and the initial grants to be made at the time of the spin-off of the Issuer’s stock from Bristol-Myers Squibb Company may be made by the Compensation and Management Development Committee of the Board of Directors of Bristol-Myers Squibb Company. To the extent that the Board of Directors or a committee administers the Plan, references to the Committee shall mean the Board of Directors or such committee.

     5. Eligibility: Options and awards may be granted only to present or future officers and key employees of the Company, including Subsidiaries and Affiliates which become such after the adoption of the Plan. Any officer or key employee of the Company shall be eligible to receive one or more options or awards under the Plan. Any director who is not an officer or employee of the Company shall be ineligible to receive an option or award under the Plan. The adoption of this Plan shall not be deemed to give any officer or employee any right to an award or to be granted an option to purchase Common Stock, except to the extent and upon such terms and conditions as may be determined by the Committee.

     6. Grants as of Effective Date:

     7. Stock Options: Stock options under the Plan shall consist of incentive stock options under Section 422 of the Code or nonqualified stock options (options not intended to qualify as incentive stock options), as the Committee shall determine. In addition, the Committee may grant stock appreciation rights in conjunction with an option, as set forth in Section 7(b)(11), or may grant awards in conjunction with an option, as set forth in Section 7(b)(10) (an “Associated Option”).

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(not inconsistent with the Plan) of any option granted hereunder (including but not limited to restrictions upon the options, conditions of their exercise, or restrictions on the shares of Common Stock issuable upon exercise thereof), (5) determine whether nonqualified stock options or incentive stock options granted under the Plan shall include stock appreciation rights and, if so, the Committee shall determine the terms and conditions thereof in accordance with Section 7(b)(11) hereof, (6) determine whether any nonqualified stock options granted under the Plan shall be Associated Options, and (7) prescribe the form of the instruments necessary or advisable in the administration of options.