EXHIBIT 99.9
[ZIMMER LOGO]
PUBLIC EXCHANGE AND CASH OFFER
OF
ZIMMER HOLDINGS, INC., WILMINGTON, DELAWARE, U.S.A.
FOR ALL OUTSTANDING REGISTERED SHARES
(INCLUDING REGISTERED SHARES REPRESENTED BY AMERICAN DEPOSITARY SHARES)
OF
CENTERPULSE AG, ZURICH, SWITZERLAND
HAVING A NOMINAL VALUE OF CHF 30.00 PER SHARE
(THE "OFFER")
------------------
Offer Period: July 3, 2003 to August 25, 2003, 4 p.m. (Swiss time)
(subject to extension) ("OFFER PERIOD")
Exchange Ratio and
Offered Cash: One (1) registered share of Centerpulse AG
("CENTERPULSE") having a nominal value of CHF 30.00 per
share ("CENTERPULSE SHARE") will be exchanged for 3.68
shares of common stock of Zimmer Holdings, Inc.
("ZIMMER") having a par value of USD 0.01 per share
("ZIMMER COMMON STOCK"), plus CHF 120.00 net in cash,
without interest.
One (1) Centerpulse American depositary share
("CENTERPULSE ADS") will be exchanged for 0.368 of a
share of Zimmer Common Stock, plus the USD equivalent of
CHF 12.00 net in cash, without interest.
CREDIT SUISSE FIRST BOSTON
------------------
<Table>
<Caption>
SWISS SECURITY TELEKURS TICKER
NUMBER ISIN BLOOMBERG SYMBOL
-------------- ---------------- --------- ---------------
Centerpulse Share
not tendered for exchange
(1st line).................. 654 485 CH 000 654485 9 CEPN SW CEPN
tendered for exchange to Smith
& Nephew Group plc (2nd
line)....................... 1 588 547 CH 001 588547 5 CEPNE SW CEPNE
tendered for exchange to Zimmer
(3rd line).................. 1 619 052 CH 001 619 052 9 CEPNEE SW CEPNEE
Centerpulse ADS.................. 1 429 052 US 152 005104 6 CEP US CEP
Zimmer Common Stock.............. 1 262 932 US 989 56P102 1 ZMH US ZMH
</Table>
Swiss offer prospectus of June 19, 2003
STATEMENTS REGARDING THIS OFFER
This Offer is being made by Zimmer for all of the outstanding Centerpulse
Shares and Centerpulse ADSs held by persons within and outside of the United
States of America. This Offer is made in compliance with the applicable laws of
Switzerland, including the Federal Act on Stock Exchanges and Securities Trading
of Switzerland ("SESTA"), and the United States, including the tender offer
rules applicable to equity securities registered under Section 12 of the U.S.
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT").
In connection with this Offer, Zimmer has filed with the U.S. Securities
and Exchange Commission (the "SEC") pursuant to Section 5 of the U.S. Securities
Act of 1933, as amended (the "SECURITIES ACT"), a Registration Statement on Form
S-4 (as amended and/or supplemented, the "REGISTRATION STATEMENT") containing
the U.S. prospectus which is attached to this offer prospectus as Exhibit I.
Holders of Centerpulse Shares and holders of Centerpulse ADSs located outside of
the United States must follow the procedures set forth in this offer prospectus,
and holders of Centerpulse Shares and holders of Centerpulse ADSs located in the
United States must follow the procedures set forth in the U.S. prospectus, to
tender Centerpulse Shares and Centerpulse ADSs. This offer prospectus and the
U.S. prospectus contain information regarding this Offer, Zimmer and
Centerpulse, and holders of Centerpulse Shares and Centerpulse ADSs should read
these documents carefully.
Zimmer files annual, quarterly and current reports, proxy statements and
other information with the SEC. Centerpulse also files annual and other reports
with the SEC. Zimmer's and Centerpulse's public filings are available to the
public from commercial document retrieval services and at the Internet website
maintained by the SEC at http://www.sec.gov.
THIS OFFER PROSPECTUS DOES NOT CONSTITUTE A SECURITIES ISSUANCE PROSPECTUS
AS DEFINED IN ARTICLE 652A OR ARTICLE 1156 OF THE SWISS CODE OF OBLIGATIONS.
UNITED KINGDOM RESTRICTION ON DISTRIBUTION OF THIS DOCUMENT
The shares of Zimmer Common Stock described herein may not be offered or
sold in the United Kingdom, by means of this offer prospectus or any other
document, other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you
are in any doubt about the action you should take, you are recommended
immediately to seek your own personal financial advice from your stockbroker,
bank manager, solicitor, accountant or other independent financial adviser duly
authorized under the Financial Services & Markets Act 2000 if you are resident
in the United Kingdom or, if not, another appropriately authorized independent
financial adviser.
SALES RESTRICTIONS IN CERTAIN COUNTRIES AND JURISDICTIONS
The distribution of this offer prospectus and the making of this Offer may,
in certain jurisdictions, be restricted by law. This Offer is not being made,
directly or indirectly, in or into, and will not be capable of acceptance from
or within, any jurisdiction in which the making of this Offer or the acceptance
thereof would not be in compliance with the laws of that jurisdiction. Persons
who come into possession of this offer prospectus should inform themselves of
and observe any of these restrictions. Any failure to comply with these
restrictions may constitute a violation of the securities laws of any of these
jurisdictions. Zimmer does not assume any responsibility for any violation by
any person of any of these restrictions. ZIMMER IS NOT MAKING THIS OFFER IN OR
INTO -- AND THIS OFFER MAY NOT BE ACCEPTED IN OR FROM -- AUSTRALIA, CANADA OR
JAPAN.
No person has been authorized to give any information or make any
representation on behalf of Zimmer not contained in this offer prospectus, the
U.S. prospectus or in the form of declaration of acceptance and assignment, the
ADS letter of transmittal or the ADS notice of guaranteed delivery and, if given
or made, such information or representation must not be relied upon as having
been authorized.
2
FORWARD-LOOKING STATEMENTS
This offer prospectus contains forward-looking statements based on current
expectations, estimates, forecasts and projections about the orthopaedics
industry, management's beliefs and assumptions made by management.
Forward-looking statements may be identified by the use of forward-looking terms
such as "may", "will", "expects", "believes", "anticipates", "plans",
"estimates", "projects", "targets", "forecasts", and "seeks" or the negative of
such terms or other variations on such terms or comparable terminology. These
statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that could cause actual outcomes and results to
differ materially.
In case of any inconsistencies between the German, French and English text of
this offer prospectus,
the English text shall prevail.
3
1. INTRODUCTION
1.1 PARALLEL OFFER OF ZIMMER FOR INCENTIVE CAPITAL AG
Zimmer is also commencing a separate offer to acquire all of the
outstanding bearer shares of InCentive Capital AG, Zug, Switzerland ("INCENTIVE"
and such offer, the "INCENTIVE OFFER" and, together with this Offer, the "ZIMMER
OFFERS"), which currently is a beneficial owner of approximately 18.9% of the
outstanding Centerpulse Shares according to publicly available information as of
June 16, 2003. The terms of the InCentive Offer (which are more fully described
in the Swiss offer prospectus for the InCentive Offer) are substantially similar
to this Offer. The Zimmer Offers each provide for the same consideration for
Centerpulse Shares.
1.2 REASONS FOR OUR OFFER
1.2.1 Maximising Shareholder Value
Zimmer believes that a combination of Zimmer and Centerpulse represents a
compelling opportunity to maximize value for shareholders of both companies by
combining Zimmer with a long-term strategic partner that will allow Zimmer to
realize myriad strategic advantages resulting in growth opportunities within the
medical devices industry. Zimmer believes that the combination will create a
global leader in the design, development, manufacture and marketing of
orthopaedic reconstructive implants, spine, trauma and dental products.
Zimmer believes that a combination of Zimmer and Centerpulse has
significant beneficial long-term growth prospects, which will maximize
shareholder value. During the period from July 25, 2001 (the day if and when
issued trading of Zimmer Common Stock began) to June 16, 2003, the price of the
Zimmer Common Stock has increased by 58.6%. During the same period, the S&P 500
has decreased by 15.1% (source: Bloomberg).
1.2.2 Complementary Businesses and Assets
Zimmer and Centerpulse have complementary businesses and assets.
Consolidation of efforts in the spinal segment and Europe should allow Zimmer
and Centerpulse to capitalize on high growth opportunities. Zimmer believes that
the combination of the diverse technological resources of Zimmer and Centerpulse
will advance Zimmer's development of new materials, products and procedures
through scale with increased functionality. The combination of Zimmer's and
Centerpulse's research and development, sales/distribution, marketing and
financial resources and compatible cultures is expected by Zimmer to create a
business platform upon which new orthopaedic devices can be brought to the
market on a more expedited basis and at lower cost. In addition, Zimmer believes
that the business combination provides Zimmer with a unique opportunity to
leverage Centerpulse's product lines and diversify into spinal and dental
products.
1.2.3 Global Scale and Increased Geographic Market of Zimmer's Products
The combination of Zimmer and Centerpulse is also expected by Zimmer to
significantly expand Zimmer's global reach and enhance its market-leading
position in reconstructive implants, spine, trauma and dental products. Zimmer
believes that, to the extent the existing customer relationships of the two
companies can be leveraged for the benefit of the combined company, the
combination will create the opportunity for deeper market and customer
penetration in Europe where Zimmer had less than 15% of 2002 sales. Zimmer
believes that the companies have insignificant overlap in virtually all key
geographic segments on a by-country basis and have corresponding strengths in
each geographic segment.
1.3 THE ZIMMER OFFERS AND THE OFFERS OF SMITH & NEPHEW GROUP PLC
Both Centerpulse and InCentive are currently the subject of competing
offers from Smith & Nephew Group plc, London ("SMITH & NEPHEW").
On April 25, 2003, Smith & Nephew commenced its offer for Centerpulse
Shares (the "SMITH & NEPHEW OFFER") and currently offers 25.15 new ordinary
shares of Smith & Nephew, nominal value GBP 0.125 per share,
4
and CHF 73.42 in cash for each Centerpulse Share. Zimmer believes that its Offer
is financially superior to the Smith & Nephew Offer:
Based on the closing prices for Zimmer Common Stock and ordinary shares of
Smith & Nephew plc and the exchange rates of USD 1.00 = CHF 1.3009 and GBP 1.00
= CHF 2.1875 as of June 16, 2003 (the latest practicable date before the
printing of this offer prospectus), this Offer implies a per share value for
Centerpulse Shares of CHF 345.91, which value represents a 23.6% premium over
the per share value for Centerpulse Shares implied by the Smith & Nephew Offer
on such date of CHF 279.86 (source: Bloomberg). This Offer has a 63.4% greater
cash component than the Smith & Nephew Offer. The value and premium of this
Offer are affected by changes in the prices of the Zimmer Common Stock, and the
ordinary shares of Smith & Nephew plc and the exchange rate for USD/CHF and
GBP/CHF and, thus, will vary until the settlement of this Offer.
1.4 WITHDRAWAL FROM THE SMITH & NEPHEW OFFER
HOLDERS OF CENTERPULSE SHARES AND CENTERPULSE ADSS ARE PERMITTED TO
WITHDRAW THEIR CENTERPULSE SHARES AND CENTERPULSE ADSS FROM THE SMITH & NEPHEW
OFFER AND TENDER THEM INTO THIS OFFER; SUCH WITHDRAWAL IS PERMITTED BOTH BY THE
APPLICABLE SWISS LAW AND THE TERMS OF THE SMITH & NEPHEW OFFER. FOR INFORMATION
ABOUT THE NECESSARY STEPS TO BE TAKEN IN ORDER TO WITHDRAW FROM THE SMITH &
NEPHEW OFFER PLEASE CONTACT YOUR CUSTODIAN BANK.
2. ZIMMER'S OFFER FOR CENTERPULSE SHARES AND CENTERPULSE ADSS
2.1 OFFER
This Offer extends to all of the currently outstanding Centerpulse Shares
and Centerpulse ADSs, other than Centerpulse Shares and Centerpulse ADSs held by
Centerpulse or its subsidiaries, as well as to all of the Centerpulse Shares
and/or Centerpulse ADSs issued, if any, after the date of this offer prospectus
and before the expiration of the Additional Acceptance Period (as described
below in Section 2.8).
A pre-announcement of this Offer was published in the electronic media on
May 20, 2003 and advertised in the print media on May 22, 2003 in accordance
with Article 7 et seq of the Ordinance of the Takeover Board on Public Takeover
Offers ("TOO").
2.2 OFFER PERIOD
This Offer may be accepted from July 3, 2003 to August 25, 2003, 4 p.m.
(Swiss time). This Offer may not be accepted during a period of ten Swiss
trading days (cooling off period) starting on the day of the publication of this
Offer, i.e. from June 19, 2003 to July 2, 2003.
Zimmer reserves the right to extend the Offer Period, from time to time, as
approved by the Swiss Takeover Board.
2.3 OFFER CONSIDERATION
2.3.1 Centerpulse Share Standard Entitlement
Each outstanding Centerpulse Share will be exchanged for 3.68 shares of
Zimmer Common Stock, plus CHF 120.00 net in cash, without interest, subject to
the mix and match election (as described below in Section 2.4).
2.3.2 Centerpulse ADS Standard Entitlement
Each outstanding Centerpulse ADS will be exchanged for 0.368 of a share of
Zimmer Common Stock, plus the USD equivalent of CHF 12.00 net in cash, without
interest, subject to the mix and match election.
2.3.3 Fractional Shares and Adjustments
Fractional entitlements to shares of Zimmer Common Stock will not be
delivered to holders of Centerpulse Shares or Centerpulse ADSs tendered in this
Offer. Instead, fractional entitlements to shares of Zimmer Common
5
Stock will subsequently be combined and sold on the New York Stock Exchange (the
"NYSE") after the Additional Acceptance Period (as defined below) and, in the
case of the Centerpulse Shares, the net proceeds of the sales will be converted
from USD to CHF based on the then applicable exchange rate. The proceeds will be
distributed pro rata to the Centerpulse securityholders entitled to fractional
entitlements. Such distribution is expected to take place on September 25, 2003
at the latest (the "SETTLEMENT DATE") (see Section 2.9).
The consideration paid in this Offer will be adjusted for any dilutive
effects in respect of the Centerpulse Shares, Centerpulse ADSs or Zimmer Common
Stock (except for shares issued for management options under Centerpulse's or
Zimmer's benefit plans and disclosed in Centerpulse's or Zimmer's financial
statements for the fiscal year ended December 31, 2002), including dividend
payments, capital increases below market value, or the issuance of options
(except for management options issued under Centerpulse's or Zimmer's benefit
plans in the normal course consistent with past practice), warrants, convertible
securities and other rights of any kind to acquire Centerpulse Shares,
Centerpulse ADSs or shares of Zimmer Common Stock, as the case may be, or any
other transaction having a dilutive effect on the value of this Offer. Except
for the foregoing, as of June 16, 2003, Zimmer is not aware of any transaction
having a dilutive effect on the value of the Zimmer Common Stock.
2.4 MIX AND MATCH ELECTION
This Offer contains a mix and match election feature, whereby holders of
Centerpulse Shares and Centerpulse ADSs may elect to receive either more shares
of Zimmer Common Stock or more cash than the standard entitlement, as described
below.
However, this mix and match election will be available to Centerpulse
securityholders only to the extent that off-setting elections have been made by
other tendering securityholders in the Zimmer Offers. Elections made in this
Offer will be taken together with elections made under a similar mix and match
election feature included in the InCentive Offer in determining whether mix and
match elections under this Offer will be fulfilled. In other words, in order for
securityholders to receive a higher proportion of cash, other securityholders
will have to elect to receive a higher proportion of shares of Zimmer Common
Stock, and vice versa.
To the extent that elections cannot be satisfied as a result of the lack of
such off-setting elections, entitlements to shares of Zimmer Common Stock and
cash in excess of the standard entitlement will be reduced on a pro rata basis.
Once the share allocations have been determined, the cash element of the
consideration will be reduced or increased (as the case may be) for each holder
of Centerpulse Shares or Centerpulse ADSs who has been allocated an increased or
reduced number of shares of Zimmer Common Stock.
All calculations will be made by reference to the number of acceptances and
elections as of the last day of the Additional Acceptance Period and, for the
purposes of these calculations, the assumed value of Zimmer Common Stock shall
be USD 48.28 per share, the per share closing price of Zimmer Common Stock on
May 19, 2003, the last trading day prior to the pre-announcement of the Zimmer
Offers.
Holders who validly tender their Centerpulse Shares or Centerpulse ADSs in
this Offer may elect to receive for each Centerpulse Share or Centerpulse ADS:
- the applicable standard entitlement, described above in Section 2.3;
- as many shares of Zimmer Common Stock as possible; or
- as much cash as possible.
Tendering holders of Centerpulse Shares or Centerpulse ADSs may submit
their mix and match election to their custodian bank until the end of the
Additional Acceptance Period. Tendering holders of Centerpulse Shares or
Centerpulse ADSs who have not submitted a mix and match election prior to that
time will be deemed to have elected the standard entitlement. Holders of
Centerpulse Shares or Centerpulse ADSs who make mix and match elections will not
know the exact number of shares of Zimmer Common Stock or the amount of cash
they will receive until the Settlement Date.
6
2.5 CONDITIONS
This Offer is subject to the fulfilment of the following conditions:
(a) Zimmer having received the requisite vote of its stockholders to
approve the issuance of the shares of Zimmer Common Stock pursuant to the
Zimmer Offers.
(b) The shares of Zimmer Common Stock issuable upon the consummation
of the Zimmer Offers having been approved for listing on the NYSE.
(c) All competent EU, U.S. and other foreign authorities having
approved and/or granted clearance of the acquisition of Centerpulse without
a party being required to meet any condition or requirement giving rise to:
(i) costs and/or loss of earnings before interest, tax and
amortization ("EBITA") in excess of CHF 23 million in the aggregate; or
(ii) a decrease in consolidated turnover of CHF 75 million in the
aggregate of Zimmer, after giving effect to the Zimmer Offers. In
addition, no other orders or directions by any court or other authority
prohibiting the consummation of the Zimmer Offers shall have been
issued.
(d) The Registration Statement filed by Zimmer with the SEC in
connection with this Offer having become effective in accordance with the
provisions of the Securities Act; no stop order suspending the
effectiveness of the Registration Statement having been issued by the SEC
and no proceedings for that purpose having been initiated by the SEC and
not concluded or withdrawn.
(e) Zimmer having received valid acceptances for at least 66 2/3% of
the total number of the Centerpulse Shares outstanding (including
Centerpulse Shares represented by Centerpulse ADSs and, provided the
InCentive Offer has become unconditional, Centerpulse Shares held by
InCentive) on a fully diluted basis at the expiry of the Offer Period. If,
at or prior to the expiration of the Offer Period, Zimmer shall have waived
this condition (e), Zimmer shall also waive condition (f) of this Offer.
(f) Each person who is a member of the board of directors of
Centerpulse having delivered at or prior to the expiration of the Offer
Period a validly executed undertaking to Zimmer
(A) agreeing, contingent upon Zimmer having received valid
acceptances for at least 66 2/3% of the total number of the Centerpulse
Shares outstanding (including Centerpulse Shares represented by
Centerpulse ADSs and, provided the InCentive Offer has become
unconditional, Centerpulse Shares held by InCentive) on a fully diluted
basis at the expiry of the Offer Period, to take, or cause to be taken,
as soon as possible after this Offer has been declared unconditional,
all actions necessary to convene a shareholders meeting of Centerpulse
(the "SHAREHOLDERS MEETING") to be held as soon as possible following
the consummation of this Offer with the sole agenda item being "removal
of existing board members and election of new board members" and to
propose that all of the persons who are members of the board of direc
tors of Centerpulse on the date of the Shareholders Meeting be removed
and immediately replaced by the individuals designated by Zimmer, and
(B) agreeing, contingent upon Zimmer having received valid
acceptances for at least 66 2/3% of the total number of the Centerpulse
Shares outstanding (including Centerpulse Shares represented by
Centerpulse ADSs and, provided the InCentive Offer has become
unconditional, Centerpulse Shares held by InCentive) on a fully diluted
basis at the expiry of the Offer Period, to take, or cause to be taken,
all actions necessary to ensure, for the period from the time this Offer
has been declared unconditional until such time as all of the Zimmer
designees to the board of directors of Centerpulse take office, that
neither Centerpulse nor any of its directors, officers or employees take
any of the following actions (except (x) with the prior written consent
of Zimmer, which consent shall not be unreasonably withheld, or (y) if
required by applicable law):
(i) sell, lease, transfer, encumber or pledge any of the assets
of Centerpulse or its affiliates with a value of CHF 100,000 or
greater;
7
(ii) enter into, materially amend or terminate any agreement
with respect to Centerpulse or its affiliates involving a commitment
of CHF 100,000 or greater or having a term that extends beyond
December 31, 2003;
(iii) amend or propose to amend, or otherwise change the
articles of association of Centerpulse or equivalent organizational
documents of affiliates of Centerpulse, or take any action with
respect to such amendment or any recapitalization, reorganization,
liquidation or dissolution of any such entity;
(iv) authorize, issue, sell, pledge, dispose of, grant or
encumber capital stock or other ownership interest in Centerpulse or
any of its affiliates, or any options, warrants, convertible or
exchangeable securities or other rights of any kind to acquire
capital stock or other ownership interests in Centerpulse or any of
its affiliates;
(v) acquire, sell or make any capital contribution to or
investment in any other corporation, partnership or other business
organization or any division thereof or enter into any agreement with
any affiliate or third party involving a merger, purchase, sale,
recapitalization or other business combination with an aggregate
value of CHF 100,000 or greater;
(vi) enter into any employment, consulting, change in control or
severance agreement with any director, officer, employee or
consultant of Centerpulse or its affiliates, or otherwise bind
Centerpulse or any of its affiliates to establish, adopt or enter
into any collective bargaining, compensation, bonus, stock option,
pension, termination, severance or other employee or fringe benefit
plan or agreement or any other arrangement for the benefit of any
director, officer, employee or consultant of Centerpulse or any of
its affiliates;
(vii) declare, or propose to declare or pay any dividends on, or
make any other distributions (whether in cash, securities or other
property) in respect of, any of the outstanding capital securities of
Centerpulse or any of its affiliates;
(viii) waive any claims or rights of Centerpulse or any of its
affiliates or otherwise relating to the properties, assets,
liabilities or businesses with a value of CHF 100,000 or greater;
(ix) amend, renew, fail to maintain or cancel any liability or
insurance policies related to Centerpulse or any of its affiliates or
any of their respective properties or assets;
(x) effectuate a facility closing or layoff of 10 or more
employees of Centerpulse or its affiliates; or
(xi) settle or compromise any pending or threatened suit, action
or claim for CHF 100,000 or greater in any way involving or otherwise
relating, directly or indirectly, to Centerpulse or its affiliates or
their respective assets, liabilities, business or employees.
This condition (f) will be deemed to have been satisfied, if all members
of the board of directors of Centerpulse have delivered the undertakings
described above other than those directors who have not received a
confirmation of Zimmer that it will hold harmless such directors in
respect of any liability incurred as a consequence of complying with the
above described undertaking.
(g) Centerpulse, until the end of the Offer Period, not having:
(i) become subject to a mandated recall for a product, the
consolidated turnover of which product family exceeded CHF 75 million in
Centerpulse's consolidated prior year results and such recall having
resulted, or, according to the opinion of an investment bank or
accounting firm of international repute to be appointed by Zimmer (the
"Expert"), likely to result, in costs and/or loss of EBITA (after
insurance payable to Centerpulse) in excess of CHF 23 million; or
(ii) suffered a disablement of its manufacturing facilities in
Winterthur, Switzerland or Austin, Texas, U.S.A., having resulted, or,
according to the opinion of the Expert, being likely to result, in costs
and/or loss of EBITA (after insurance payable to Centerpulse) in excess
of CHF 23 million.
8
All conditions set forth above constitute conditions precedent in
accordance with Article 13 paragraph 1 of the TOO. Zimmer reserves the right to
waive one or more of the conditions set forth above (except for conditions (a)
and (b)), either in whole or in part, and to withdraw this Offer if one or more
of the above conditions is not met.
On May 29, 2003, Zimmer eliminated condition (g)(iii) and condition (h)
contained in Zimmer's pre-announcement as of May 20, 2003.
2.6 LISTING; REGISTRATION
The shares of Zimmer Common Stock are listed on the NYSE. Shares of Zimmer
Common Stock to be issued pursuant to this Offer will be registered under the
Securities Act. Application for additional listing will be made to the NYSE.
Furthermore, Zimmer intends to make application for admission of a secondary
listing to the SWX Swiss Exchange, as from the Settlement Date. In such case,
all shares of Zimmer Common Stock when issued pursuant to this Offer would be
listed for trading on both stock exchanges.
2.7 SHARE PRICES
2.7.1 Historical Price Trend of Centerpulse Shares
The price trend of Centerpulse Shares on the SWX Swiss Exchange is as
follows (closing prices in CHF, adjusted in line with capital increases):
<Table>
<Caption>
CENTERPULSE SHARES 2000 2001 2002 2003(1)
------------------ ---- ---- ---- -------
High...................................................... 509 442 259 365
Low....................................................... 283 35 68 212
</Table>
- ---------------
(1) Based on the period from January 1 to June 16, 2003.
Closing price prior to the pre-announcement of the Zimmer Offers (May 19,
2003): CHF 292.
Closing price on June 16, 2003, the latest practicable date before the
printing of this offer prospectus: CHF 365.
- ---------------
Source: Bloomberg
2.7.2 Historical Price Trend of Centerpulse ADSs
The price trend of Centerpulse ADSs on the NYSE is as follows (closing
prices in USD, adjusted in line with capital increases):
<Table>
<Caption>
CENTERPULSE ADSS 2000 2001 2002 2003(1)
---------------- ---- ---- ---- -------
High...................................................... 30 28 18 31
Low....................................................... 19 3 4 16
</Table>
- ---------------
(1) Based on the period from January 1 to June 16, 2003.
Closing price prior to the pre-announcement of the Zimmer Offers (May 19,
2003): USD 22.
Closing price on June 16, 2003, the latest practicable date before the
printing of this offer prospectus: USD 27.91.
- ---------------
Source: Bloomberg
9
2.7.3 Historical Price Trend of Shares of Zimmer Common Stock
The price trend of shares of Zimmer Common Stock on the NYSE is as follows
(closing prices in USD, adjusted in line with capital increases):
<Table>
<Caption>
ZIMMER COMMON STOCK 2001(1) 2002 2003(2)
------------------- ------- ---- -------
High........................................................ 33 43 50
Low......................................................... 25 29 38
</Table>
- ---------------
(1) Based on the period from August 6, 2001 (the day all shares of Zimmer Common
Stock were distributed as dividend in kind to the stockholders of Zimmer's
former parent) to December 31, 2001.
(2) Based on the period from January 1 to June 16, 2003.
Closing price prior to the pre-announcement of the Zimmer Offers (May 19,
2003): USD 48.28.
Closing price on June 16, 2003, the latest practicable date before the
printing of this offer prospectus: USD 47.19.
- ---------------
Source: Bloomberg
2.8 ADDITIONAL ACCEPTANCE PERIOD
If each of the conditions set forth in Section 2.5 is satisfied or waived
by Zimmer and this Offer is therefore successful, the period to accept this
Offer will be extended by ten Swiss trading days, in order for holders of
Centerpulse Shares or Centerpulse ADSs who have not yet tendered their
Centerpulse Shares or Centerpulse ADSs to be able to tender their Centerpulse
Shares or Centerpulse ADSs to this Offer during any of these additional ten
Swiss trading days. The Additional Acceptance Period is expected to be from
August 29, 2003 to September 11, 2003.
2.9 SETTLEMENT DATE
If each of the conditions set forth in Section 2.5 is satisfied or waived
by Zimmer and this Offer is therefore successful, the exchange of Centerpulse
Shares and Centerpulse ADSs for shares of Zimmer Common Stock will be completed
no later than ten Swiss trading days after the end of the Additional Acceptance
Period and is expected to be on September 25, 2003 at the latest. The offered
cash (including any cash to be paid instead of issuing fractional shares of
Zimmer Common Stock) will be paid simultaneously.
3. INFORMATION ON THE OFFEROR
3.1 NAME, REGISTERED OFFICE, AND BUSINESS ACTIVITIES
Zimmer, a corporation organized under the Delaware General Corporation Law
("DGCL"), having its registered office in Wilmington, Delaware, U.S.A., and its
headquarters in Warsaw, Indiana, U.S.A., is one of the global leaders in the
design, development, manufacture and marketing of reconstructive orthopaedic
implants and trauma products. Orthopaedic reconstruction implants restore joint
function lost due to disease or trauma in joints such as knees, hips, shoulders
and elbows. Trauma products are devices used primarily to reattach or stabilize
damaged bone and tissue to support the body's natural healing process.
Zimmer also manufactures and markets other products related to orthopaedic
surgery.
Zimmer, Inc., Zimmer's predecessor founded in 1927, was acquired by
Zimmer's former parent in 1972. Zimmer's former parent incorporated Zimmer on
January 12, 2001 as a wholly owned subsidiary as part of a previously announced
plan by Zimmer's former parent to create a separate company relating to the
design, development, manufacture and marketing of orthopaedic reconstructive
implants, trauma products and other products used for orthopaedic surgery. On
August 6, 2001, Zimmer's former parent distributed as dividend in kind all
shares of Zimmer Common Stock to its stockholders in proportion to their
respective holdings in Zimmer's former parent.
10
Zimmer has more than 3,600 employees in manufacturing, distribution and
warehousing and/or office facilities in more than 50 locations worldwide. Zimmer
has operations in 20 countries and markets its products in more than 70
countries.
Zimmer's operations are divided into three major geographic areas -- the
Americas, which is comprised principally of the United States and includes other
North, Central and South American markets; Asia-Pacific, which is comprised
primarily of Japan and includes other Asian and Pacific markets; and Europe,
which is comprised principally of Europe and includes the Middle East and
Africa. The Americas is the largest region, accounting for approximately 68% of
2002 sales, with the United States accounting for the vast majority of sales in
this region. The Asia-Pacific region accounted for approximately 20% of 2002
sales, with Japan being the largest foreign market and accounting for the
majority of sales in that region. The European region accounted for
approximately 12% of 2002 sales, with France, Germany, Italy, Spain and the
United Kingdom accounting for approximately 75% of sales in that region. In
addition, Zimmer also operates in other key markets such as the Benelux, Nordic,
Switzerland and emerging regions such as Russia, Central Europe, and the
Mediterranean.
The primary customers of Zimmer include orthopaedic surgeons, hospitals and
healthcare purchasing organizations or buying groups. These customers range from
large multinational enterprises to independent surgeons. No individual end user
accounted for more than 1.0% of net sales.
For the year 2002, Zimmer recorded worldwide revenues of approximately USD
1.4 billion (2001: USD 1.2 billion; 2000: USD 1.0 billion).
3.2 CAPITAL STRUCTURE
Zimmer's restated certificate of incorporation authorizes the issuance of
up to 1 billion shares of Zimmer Common Stock and of up to 250 million shares of
Zimmer preferred stock.
3.2.1 Common Stock
As of June 16, 2003, there were 196,716,694 shares of Zimmer Common Stock
outstanding. All outstanding shares of Zimmer Common Stock are fully paid and
non-assessable.
The holders of Zimmer Common Stock possess all voting power afforded to
holders of common stock pursuant to the DGCL. The holders of Zimmer Common Stock
are entitled to one vote per share on all matters presented to the stockholders,
including elections of directors.
Subject to any preferential rights of any outstanding series of Zimmer
preferred stock created by the Zimmer board of directors from time to time, each
share of Zimmer Common Stock received in this Offer will be entitled to equal
treatment to the existing shares of Zimmer Common Stock and to receive ratably
dividends, if any, declared by the Zimmer board of directors from funds legally
available therefor. Zimmer has not declared or paid dividends on shares of
Zimmer Common Stock since becoming a public company on August 6, 2001. Zimmer
currently does not anticipate paying any cash dividends on shares of Zimmer
Common Stock in the foreseeable future. Zimmer's new credit facility entered
into in connection with the Zimmer Offers contains certain restrictions on
Zimmer's ability to make dividend payments under certain circumstances.
If Zimmer liquidates its business, holders of Zimmer Common Stock are
entitled to share ratably in all assets available for distribution to such
holders after Zimmer pays its liabilities and the liquidation preference of any
outstanding preferred stock. The Zimmer Common Stock has no pre-emptive or
conversion rights or other subscription rights. The rights, preferences and
privileges of holders of Zimmer Common Stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of
preferred stock that Zimmer may designate and issue in the future.
The authorized shares of Zimmer Common Stock, as well as shares of Zimmer
preferred stock, will be available for issuance without further action by
Zimmer's stockholders, unless such action is required by applicable law or the
rules of any stock exchange or automated quotation system on which Zimmer
securities may be listed or traded. The NYSE currently requires stockholder
approval as a prerequisite to listing shares in several instances, including the
issuance of common stock or securities convertible into or exercisable for
11
common stock if the common stock has or will have voting power equal to, or the
number of shares to be issued is or will be, at least 20% of the voting power or
number of shares of common stock outstanding prior to issuance. If the approval
of Zimmer's stockholders is not required for the issuance of shares of Zimmer
preferred stock or Zimmer Common Stock, the Zimmer board of directors may
determine not to seek stockholder approval.
The shares of Zimmer Common Stock issued pursuant to this Offer will be
freely transferable, except that shares received by holders who may have, or may
be deemed to have, a special relationship or affiliation with Zimmer or, under
certain circumstances, with Centerpulse may be subject to sales restrictions
under the Securities Act and may only be sold pursuant to an effective
registration statement under the Securities Act or an exemption from the
registration requirements of the Securities Act. You should consult your counsel
regarding the sales restrictions, if any, that may apply to the shares of Zimmer
Common Stock you receive in this Offer.
3.2.2 Preferred Stock
Zimmer's restated certificate of incorporation authorizes the board of
directors to establish one or more series of preferred stock and to determine,
with respect to any series of Zimmer preferred stock, the terms and rights of
such series, including, among other things, (i) the designation of the series,
(ii) dividend rights, (iii) redemption rights, (iv) amounts payable with respect
to the series upon liquidation, dissolution or winding up of corporate affairs,
(v) conversion rights, (vi) limitations on issuance of shares of the series and
(vii) voting rights.
Zimmer believes that the ability of its board of directors to issue one or
more series of preferred stock will provide Zimmer with flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs which might arise. As of June 16, 2003, there were no shares of
Zimmer preferred stock outstanding.
3.2.3 Series A Participating Cumulative Preferred Stock
As of June 16, 2003, 2,000,000 shares of Zimmer's Series A Participating
Cumulative Preferred Stock have been reserved for issuance upon exercise of
rights (the "RIGHTS") under Zimmer's Rights Agreement entered into with Mellon
Investor Services LLC on July 30, 2001 and subsequently amended on June 15,
2002.
The Rights are intended to have anti-takeover effects. If the Rights become
exercisable, the Rights will cause substantial dilution to a person or group
that attempts to acquire or merge with Zimmer in most cases. Accordingly, the
existence of the Rights may deter a potential acquiror from making a takeover
proposal or tender offer. The Rights should not interfere with any merger or
other business combination approved by the Zimmer board of directors because
Zimmer may redeem the Rights and because the Zimmer board of directors can amend
the Rights Agreement to exempt a transaction approved by the Zimmer board of
directors so as to cause the Rights to not become exercisable.
3.3 SIGNIFICANT STOCKHOLDERS
Based on beneficial ownership reports on Schedule 13G filed with the SEC by
FMR Corp. and Putnam, LLC, in each case, on February 14, 2003, (i) FMR Corp.,
together with its affiliates, beneficially owns 20,835,647 shares of Zimmer
Common Stock, representing approximately 11% of the outstanding shares of Zimmer
Common Stock and (ii) Putnam, LLC, together with its affiliates, beneficially
owns 6,968,130 shares of Zimmer Common Stock, representing approximately 3.5% of
the outstanding shares of Zimmer Common Stock. As of June 16, 2003, Zimmer is
neither aware that FMR Corp., Putnam, LLC, or any of their respective affiliates
have increased or decreased their holdings in Zimmer Common Stock since the date
of their respective reports, nor that any other shareholder is representing more
than 5% of Zimmer's outstanding share capital.
12
3.4 PERSONS ACTING IN CONCERT
As of June 16, 2003, Zimmer and its affiliates are acting in concert for
the purpose of this Offer.
3.5 PARTICIPATIONS OF ZIMMER IN CENTERPULSE
As of June 16, 2003, Zimmer beneficially owns ten Centerpulse ADSs, which
were purchased on May 12, 2003 on the NYSE at a purchase price of USD 21.87 per
ADS, which was the highest purchase price paid by Zimmer. Except as set forth
herein, Zimmer and the parties acting in concert with Zimmer do not, directly or
indirectly, own any Centerpulse Shares or Centerpulse ADSs or any option or
conversion rights in Centerpulse Shares or Centerpulse ADSs and have not made
any transactions with Centerpulse Shares or Centerpulse ADSs or any option or
conversion rights in Centerpulse Shares or Centerpulse ADSs in the twelve months
before the pre-announcement of this Offer (i.e. from May 20, 2002 to May 19,
2003) and until June 16, 2003.
3.6 FINANCIALS AND OTHER INFORMATION
The annual reports and financial statements of Zimmer for the year 2001 and
2002, and the latest interim financials as of March 31, 2003, may be obtained
free of charge at Credit Suisse First Boston, Department FBSC, P.O. Box 900,
CH-8070 Zurich, Switzerland (telephone: +41 1 333 43 85, fax: +41 1 333 23 88,
e-mail: equity.prospectus@csfb.com).
Further information concerning Zimmer and its directors and executive
officers, including Zimmer's activities, historical information, corporate
structure and governance matters for the fiscal years 2001 and 2002 are included
in Zimmer's annual reports and other periodic reports and proxy statement filed
with the SEC. These reports and statements can also be obtained free of charge
at the Internet websites maintained by the SEC at http://www.sec.gov or at
Zimmer's website at http://www.zimmer.com.
3.7 MATERIAL CHANGES
No material changes in Zimmer's assets and liabilities, financial position,
earnings and prospects taken as a whole have taken place since March 31, 2003
and up to June 16, 2003.
4. FINANCING
The shares of Zimmer Common Stock offered in the Zimmer Offers will be
issued from the authorized share capital of Zimmer, the consideration for which
will be satisfied by contribution in kind of the Centerpulse Shares, Centerpulse
ADSs, and the bearer shares in InCentive tendered into the Zimmer Offers. Zimmer
has taken all necessary steps to have this issuance put to a vote of its
stockholders at a special meeting of stockholders scheduled to take place prior
to the expiration of the Offer Period, and to have the newly issued shares at
disposition on the Settlement Date.
The funds necessary for the CHF 120.00 net cash for each tendered
Centerpulse Share, and the USD equivalent of CHF 12.00 net cash for each
tendered Centerpulse ADS, respectively, offered pursuant to this Offer, as well
as for the cash consideration offered pursuant to the InCentive Offer, is
secured through a financing provided by financial institutions. The amount of
funds necessary for such cash payments is estimated to be approximately CHF 1.6
billion (calculated as of June 16, 2003).
5. INFORMATION ON THE TARGET COMPANY
5.1 NAME, REGISTERED OFFICE
Centerpulse is a Swiss stock company, with its registered office and
headquarters at Andreasstrasse 15, CH-8050 Zurich, Switzerland.
Centerpulse, formerly Sulzer Medica AG, is a leading medical technology
group, employing over 2,800 employees, which serves the reconstructive joint,
spinal and dental implant markets. Following divestiture of its cardiovascular
division, which was concluded in January 2003, Centerpulse is organized into
three divisions: orthopaedics, spine-tech and dental. Centerpulse has a history
of technological leadership in its principal areas of
13
activity, has five production facilities in Switzerland, the US, and France. For
the year 2002, Centerpulse recorded worldwide revenues of approximately CHF 1.2
billion from continuing operations.
5.2 CAPITAL STRUCTURE
Based on the Solicitation/Recommendation Statement on Schedule 14D-9 filed
by Centerpulse with the SEC on April 25, 2003, the ordinary share capital of
Centerpulse amounts to CHF 357,279,390 and is divided into 11,909,313 registered
shares with a nominal value of CHF 30 each. In addition, the articles of
association provide for a conditional capital as follows:
- Conditional Capital: Centerpulse's share capital may be increased through
the issue of no more than 2,000,000 Centerpulse Shares with a nominal
value of CHF 30 each, to be fully paid up, by an amount of no more than
CHF 60,000,000.00, by virtue of the exercise of option or conversion
rights to be issued by Centerpulse or any of its group companies in order
to discharge the obligations under the Credit-Agreement entered into in
the context of the Settlement-Financing.
- Conditional Capital: Centerpulse's share capital may be increased through
the issue of no more than 506,268 Centerpulse Shares with a nominal value
of CHF 30 each, to be fully paid up, by an amount of no more than CHF
15,188,040.00, by virtue of the exercise of option rights granted to the
management of Centerpulse or its affiliates.
Based on publicly available information, 422,425 options on Centerpulse
Shares have been granted as of December 31, 2002, which can be exercised on the
account of the conditional capital. In the period between January 1 and March
31, 2003, 50,783 options have been exercised, cancelled or forfeited. As per
March 31, 2003, 155,132 options were exercisable, of which 16,648 forfeited on
April 15, 2003. 50,940 options have or will have vested as per the actual
incentive and management options plan by June 24, 2003.
5.3 GENERAL INTENTIONS OF ZIMMER CONCERNING CENTERPULSE
Zimmer is making this Offer in order to acquire control of, and ultimately
the entire common equity interest in, Centerpulse. It is Zimmer's current intent
that, following this Offer, the Centerpulse Shares and/or the assets and
operations of Centerpulse will continue to be held by Zimmer and its affiliates.
Zimmer's current intention is to continue the growth strategy for the
Centerpulse products in Europe, U.S.A., and Japan and, specifically with respect
to Winterthur, to maintain production, medical education, and research and
development activities. Zimmer intends to combine the Zimmer and Centerpulse
activities worldwide, so that synergies will be achieved and further expansion
will be enhanced to create significant value for the shareholders, employees and
surgeons. It is further anticipated that, as a result of the combination of
Zimmer and Centerpulse, Centerpulse employees will benefit significantly and be
an integral part of the premier, innovative global orthopaedics company with
significant financial and operational strength, and a history of outstanding
performance. Zimmer presently expects to combine the performance based cultures
of Centerpulse and Zimmer. With respect to management of the newly acquired
operations, Zimmer expects to rely mainly on management by local nationals.
Promptly following this Offer, if Zimmer acquires, directly or indirectly,
that number of Centerpulse Shares (including Centerpulse Shares represented by
Centerpulse ADSs) representing more than 98% of the voting power of Centerpulse,
Zimmer intends to request the cancellation of the remaining Centerpulse Shares
in accordance with Article 33 SESTA.
If Zimmer gains control of Centerpulse but is not entitled to acquire
compulsorily all of the outstanding Centerpulse Shares (including Centerpulse
Shares represented by Centerpulse ADSs), then Zimmer currently intends to,
subject to applicable Swiss law and the articles of association of Centerpulse,
reconstitute the board of directors of Centerpulse and replace the current board
members with Zimmer designees. Replacement board members have not yet been
identified and their number and identity will depend on the circumstances at the
relevant time.
14
Zimmer also currently intends, subject to the SWX Swiss Exchange listing
rules and the NYSE listing rules, to request that the board of directors of
Centerpulse review whether the Centerpulse Shares should continue to be listed
on the SWX Swiss Exchange and whether the Centerpulse ADSs should continue to be
listed on the NYSE and, to the extent possible, implement the intentions
outlined in Section 9 of this offer prospectus.
5.4 AGREEMENTS BETWEEN ZIMMER AND CENTERPULSE
On May 26, 2003 and June 9, 2003, Zimmer and Centerpulse executed
confidentiality agreements relating to information to be provided to each party
and its representatives in connection with each party's due diligence review of
the other party. There are no other agreements between Zimmer and/or parties
acting in concert with it, and Centerpulse, its governing bodies and/or its
stockholders.
5.5 CONFIDENTIAL INFORMATION RECEIVED BY ZIMMER IN RESPECT OF CENTERPULSE
Zimmer confirms that neither it nor any person acting in concert with it
have directly or indirectly received information on Centerpulse from Centerpulse
itself or from the companies under the control of Centerpulse, which has not
been made available to the public and which could have a decisive influence on
the decision of the recipients of this Offer.
6. PUBLICATION
A summary of this offer prospectus and all other publications as required
by the TOO will be published in German in the Neue Zurcher Zeitung and Finanz
und Wirtschaft and in French in Le Temps. The summary of this offer prospectus
will also be provided to Telekurs/AWP News, Bloomberg, Dow Jones News Service,
and Reuters.
7. REPORT OF THE REVIEW BODY PURSUANT TO ARTICLE 25 SESTA
As auditors recognised by the supervisory authority to review public
takeover offers in accordance with the SESTA, we have reviewed the Swiss offer
prospectus and its summary. The Registration Statement on Form S-4 (which
includes the U.S. prospectus) filed by Zimmer with the SEC in connection with
this Offer did not form part of our review.
The offer prospectus and its summary are the responsibility of Zimmer. Our
responsibility is to express an opinion on these two documents based on our
review.
Our review was conducted in accordance with the standards promulgated by
the profession in Switzerland, which require that a review be planned and
performed to verify the formal completeness in conformity with the SESTA and its
ordinances and to obtain reasonable assurance about whether the offer prospectus
and its summary are free from material misstatement. We have examined, on a test
basis, evidence supporting the information in the offer prospectus and its
summary. Furthermore, we have verified the offer prospectus and its summary for
compliance with the SESTA and its implementing ordinances.
With respect to the compliance with the minimum price rule, we calculated
the average opening price of Zimmer Common Stock for the 30 NYSE trading days
prior to the pre-announcement of this Offer on May 20, 2003, which was USD
47.14, and converted this price, based on an average USD/CHF opening exchange
rate in Zurich during this period of 1.36, into CHF 64.11. Based on the above,
the exchange ratio (3.68 Zimmer Common Stock for 1 Centerpulse Share) and the
cash element (CHF 120.00), we calculated an offer price of CHF 355.93 per
Centerpulse Share as of May 19, 2003. We compared this offer price to the
average opening prices of Centerpulse Shares for the 30 Swiss trading days prior
to the pre-announcement of this Offer of CHF 293.42. We assessed the market for
the trade of Zimmer Common Stock and Centerpulse Shares as liquid. The
underlying share prices and exchange rates were derived from Bloomberg.
We believe that our review provides a reasonable basis for our opinion.
15
In our opinion:
- the offer prospectus and its summary comply with the SESTA and its
ordinances;
- the offer prospectus and its summary are complete and accurate;
- the requirement for equal treatment of the offer recipients has been
complied with;
- the regulations regarding the minimum price have been adhered to;
- the financing of the cash portion of this Offer is secured and the
necessary funds will be available on the Settlement Date; Zimmer has
taken all necessary steps to have the shares of the Zimmer Common Stock
offered for exchange available on the Settlement Date.
Zurich, June 17, 2003
PricewaterhouseCoopers Ltd
A. Forrest Ph. Amrein
8. EXECUTION OF THIS OFFER
8.1 INFORMATION, SUBMISSION OF APPLICATIONS
8.1.1 Holders whose Centerpulse Shares or Centerpulse ADSs are Held in a
Safekeeping Account
Holders whose Centerpulse Shares or Centerpulse ADSs are held in a
safekeeping account will be informed of this Offer by their custodian bank and
are asked to proceed according to the bank's instructions.
8.1.2 HOLDERS WHO KEEP THEIR CENTERPULSE SHARES OR CENTERPULSE ADSS AT HOME
RESPECTIVELY IN CERTIFICATED FORM
Holders who keep their Centerpulse Shares or Centerpulse ADSs at home in
certificated form will be informed of this Offer by the share register of
Centerpulse or the Centerpulse ADS depositary, respectively, and are asked to
proceed according to the share register's instructions in the case of
Centerpulse Shares and are asked to proceed according to the ADS letter of
transmittal in the case of Centerpulse ADSs.
8.2 SWISS OFFER MANAGER
Zimmer has commissioned Credit Suisse First Boston, Zurich, to handle the
execution of this Offer.
8.3 ACCEPTANCE, EXCHANGE AND PAYING AGENTS
Credit Suisse First Boston, Zurich. All Swiss Branches of Credit Suisse.
8.4 U.S. EXCHANGE AGENT
Zimmer has commissioned Mellon Investor Services LLC as the U.S. exchange
agent to handle the execution of this Offer with respect to the Centerpulse
ADSs. The ADS letter of transmittal (together with all other required documents)
should be delivered to the U.S. exchange agent for purposes of tendering
Centerpulse ADSs in this Offer.
16
8.5 CENTERPULSE SHARES TENDERED IN THIS OFFER
Centerpulse Shares which have been tendered for exchange to Zimmer will be
assigned the following Swiss security number by the custodian banks:
Centerpulse Shares tendered for exchange to Zimmer
Swiss security number: 1 619 052
This security only exists in book-entry form; a physical delivery is not
possible.
8.6 TRADING OF CENTERPULSE SHARES/BLOCKING OF CENTERPULSE ADSS
Trading in Centerpulse Shares on the SWX Swiss Exchange with respect to
this Offer will be organised from July 3, 2003 until the last Swiss trading day
prior to the start of the Additional Acceptance Period as follows:
<Table>
First line Centerpulse Shares not tendered for exchange (Swiss security
number: 654 485)
Third line Centerpulse Shares tendered for exchange to Zimmer (Swiss
security number: 1 619 052)
</Table>
With the start of the Additional Acceptance Period, the Centerpulse Shares
on the third line cannot be traded anymore and will be blocked by the custodian
banks.
Centerpulse ADSs which have been tendered will be blocked by the custodian
banks and will no longer be eligible for trading.
8.7 WITHDRAWAL RIGHTS
Centerpulse Shares and Centerpulse ADSs tendered for exchange may be
withdrawn at any time prior to the expiration of the Offer Period.
Centerpulse shareholders selling tendered Centerpulse Shares on the third
trading line (Swiss security number 1 619 052) shall be deemed to have withdrawn
such shares prior to such sale and the acquiror shall be deemed to have tendered
such shares upon such purchase. Alternatively, Centerpulse shareholders may also
withdraw previously tendered Centerpulse Shares from the third trading line and
sell such shares on the principal trading line (Swiss security number 654 485).
After the expiration of the Offer Period, holders who tendered their
Centerpulse Shares or Centerpulse ADSs will have no withdrawal rights. There
will be no withdrawal rights during the Additional Acceptance Period and until
the Settlement Date.
8.8 EXCHANGE FOR SHARES OF ZIMMER COMMON STOCK AND PAYMENT OF OFFERED CASH
Provided that the issuance of shares of Zimmer Common Stock pursuant to the
Zimmer Offers is authorized by the Zimmer stockholders at a special meeting of
Zimmer stockholders to take place prior to the expiration of the Offer Period,
Zimmer will have new shares available for issuance on or prior to the Settlement
Date (see Section 4 above).
At its meeting on May 19, 2003, the Zimmer board of directors authorized,
subject to the approval of Zimmer stockholders, the issuance of such number of
shares of Zimmer Common Stock required to consummate the Zimmer Offers in
accordance with the terms and conditions thereof. It is currently estimated that
Zimmer could issue up to 45.4 million new shares of Zimmer Common Stock with a
par value of USD 0.01 per share in connection with the Zimmer Offers. The newly
issued Zimmer Common Stock in connection with this Offer will be fully paid-up
by a contribution in kind of Centerpulse Shares and Centerpulse ADSs notified as
having been tendered to this Offer and the newly issued Zimmer Common Stock will
be delivered by Credit Suisse First Boston, Zurich, acting as Zimmer's
fiduciary.
Subject to the conditions set forth in Section 2.5 of this offer prospectus
and provided that the Offer Period will not be extended pursuant to the
provisions of the SESTA and its implementing ordinances, the exchange will
17
take place on the Settlement Date. At that time, Centerpulse Shares and
Centerpulse ADSs tendered for exchange to Zimmer will be exchanged for Zimmer
Common Stock. At the same date, the payment of the offered cash amount per
tendered Centerpulse Share or Centerpulse ADSs (including any cash to be paid
instead of issuing fractional shares of Zimmer Common Stock) will be paid.
8.9 CHARGES AND TAXES
During the Offer Period and Additional Acceptance Period, no bank
commissions will be charged on the sale under this Offer of Centerpulse Shares
or Centerpulse ADSs held in safekeeping at banks in Switzerland.
Taxation on the exchange of Centerpulse Shares or Centerpulse ADSs pursuant
to this Offer generally will be governed by the following principles:
(a) the exchange of Centerpulse Shares or Centerpulse ADSs pursuant to
this Offer generally will not be subject to Swiss income tax for individual
shareholders domiciled in Switzerland holding their shares as part of their
private property;
(b) in the case of Centerpulse Shares or Centerpulse ADSs held as
business assets by individual or corporate shareholders domiciled in
Switzerland, the practice adopted by the Swiss Federal Tax Administration
indicates that completion of this cross-border Offer will trigger full
realisation of hidden reserves, if any, built-up on Centerpulse Shares or
Centerpulse ADSs tendered. Such hidden reserves will be subject to Swiss
federal income tax. There exists a possibility that the Swiss Federal Tax
Administration in anticipation of the new Swiss merger law might accept a
deferral of the Swiss federal income tax. The cantons may take a similar
position with respect to cantonal income taxes;
(c) Zimmer will pay any Swiss federal securities transfer tax due on
the exchange of Centerpulse Shares or Centerpulse ADSs for Zimmer Common
Stock and offered cash amount (including any cash to be paid instead of
issuing fractional shares of Zimmer Common Stock). Subsequent sales of
Zimmer Common Stock may be subject to the 0.3 percent Swiss federal
securities transfer tax if they occur by, through or with a Swiss bank or
other Swiss securities dealer, as defined under the Swiss stamp tax act;
and
(d) the taxation of shareholders domiciled or otherwise subject to tax
in jurisdictions other than Switzerland will be subject to the relevant
foreign tax legislation.
ALL BENEFICIAL OWNERS OF CENTERPULSE SHARES OR CENTERPULSE ADSS ARE URGED
TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE SPECIFIC SWISS AND NON-SWISS TAX
CONSEQUENCES TO THEM OF THIS OFFER.
9. DELISTING OF CENTERPULSE SHARES AND CENTERPULSE ADSS AND CANCELLATION OF
CENTERPULSE SHARES
Subject to the SWX Swiss Exchange listing rules and the NYSE listing rules,
Zimmer reserves the right to take any actions that would immediately or
ultimately result in the delisting of the Centerpulse Shares or Centerpulse ADSs
once this Offer has been consummated.
If Zimmer acquires, directly or indirectly, that number of Centerpulse
Shares (including Centerpulse Shares represented by Centerpulse ADSs)
representing more than 98% of the voting power of Centerpulse, Zimmer intends to
request the cancellation of the remaining Centerpulse Shares in accordance with
Article 33 SESTA.
10. APPLICABLE LAW AND PLACE OF JURISDICTION
This Offer and all reciprocal rights and obligations resulting therefrom
shall be subject to applicable Swiss law. The exclusive place of jurisdiction
shall be the Commercial Court (Handelsgericht) of the Canton of Zurich with the
right of appeal.
18
11. EXPECTED TIMETABLE
June 19, 2003 Publication of Zimmer Offers
Start of the cooling-off period
July 3, 2003 Start of the Offer Period
First trading day for Centerpulse Shares tendered for
exchange to Zimmer (third line)
August 25, 2003 End of the Offer Period*
August 26, 2003 Publication of preliminary interim results (press
release)*
August 28, 2003 Last trading day for Centerpulse Shares tendered for
exchange to Zimmer (third line)
August 29, 2003 Publication of definitive interim results (newspaper
publication)* Start of the Additional Acceptance Period*
September 11, 2003 End of the Additional Acceptance Period*
Last day for submitting mix and match elections
September 12, 2003 Publication of preliminary final results (press release)*
September 17, 2003 Publication of definitive final results (newspaper
publication)*
September 25, 2003 Settlement Date*
Zimmer Common Stock is delivered and offered cash amount
is paid (including any cash to be paid instead of issuing
fractional shares of Zimmer Common Stock)*
Trading in the Zimmer Common Stock will commence on the
SWX Swiss Exchange, if the Zimmer Common Stock will be
listed at SWX Swiss Exchange, as it is the intention of
Zimmer*
* Zimmer reserves the right to extend the Offer Period one or more times in
accordance with applicable provisions of the TOO. Subsequent dates may be
changed accordingly.
Bank responsible for handling this Offer:
CREDIT SUISSE FIRST BOSTON
EXHIBIT I: Final U.S. Prospectus as filed by Zimmer with the SEC
19