Sulzer Implant Settlement

CLASS ACTION SETTLEMENT AGREEMENT

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Annex IV

COMPENSATION BENEFITS PAYABLE FROM
THE EXTRAORDINARY INJURY FUND

For purposes of providing Extraordinary Injury Fund Benefits to those Class Members eligible to receive such payments, the following two Matrices are established, one relating to Hip Beneficiaries (the “Hip Matrix”) and the other relating to Knee Beneficiaries (the “Knee Matrix”).

Each Matrix is divided into levels (the “Matrix Levels”) that describe the amount that an eligible Class Member is entitled to recover based on (1) the complication that he/she has experienced; in most instances, (2) the severity of that complication; and, in some instances, and (3) the Class Member’s age at the time that the complication was recognized.

For purposes of determining the amount of EIF Benefits with respect to a given Matrix Level, the terms listed below shall have the following meanings:

1. “adjusted current annual income” means 78.5% (which percentage is calculated to reflect fringe benefits as well as personal maintenance expenditures) of the Affected Product Recipient’s average actual income from wages, salaries, personal services, personal business activities or other form of income from self-employment, as reported on his/her federal income tax return over the period of 3 years prior to the year of death.

2. “moderate” means the Class Member experienced pain, sensory loss or gait alteration that required narcotics and/or use of a cane or walker.

3. “severe” means the Class Member required the use of a wheelchair or underwent an amputation.

If a Class Member is eligible for EIF Benefits, such Class Member shall receive the applicable amount set forth in the applicable Matrix less the applicable Plaintiffs’ Counsel fees or allocable in accordance with Article 5.

HIP MATRIX

The Hip Matrix is separated into levels that are based upon the varying complications which entitle Class Members to EIF Benefits. These levels are as follows:

I. MATRIX LEVEL I (Revision Surgery Indicated But for A Medical Condition)

Eligibility. Class Members for whom Affected Product Revision Surgery would be indicated but for a medical condition(s). Class Members who are eligible to receive benefits pursuant to Matrix Level I, but who do not suffer a diminished life expectancy as a result of the medical condition(s) that are preventing those Class Members from undergoing a revision surgery, may be eligible to receive additional benefits pursuant to Matrix Level IX.

Benefits. Under Matrix Level I, a Class Member will receive up to $120,000.

II. MATRIX LEVEL II (Non-Removal Surgery)

Eligibility. Class Members who have not undergone an APRS, but who have undergone a surgery wherein their treating surgeons have attempted to secure an Affected Product using screws, cement, or some other means, as a result of non-traumatic loosening.

Benefits. Under Matrix Level II, a Class Member receives up to $36,000 for each such procedure that he/she undergoes, not to exceed $90,000.

III. MATRIX LEVEL III (Non-Affected Product Revision Surgery and Additional Non-Affected Product Revision Surgeries)

Eligibility. Class Members who have undergone a Non-Affected Product Revision Surgery on or before the date that is one-hundred and eighty (180) days [1] after the date of an APRS; this Matrix Level III additionally relates to those Class Members who have required one or more Additional Non-Affected Product Revision Surgeries (after the First NAPRS) on or before the date that is three hundred and sixty-five (365) days [2] after the date of their APRS.

Benefits. Under Matrix Level III, a Class Member receives up to $80,000 for a NAPRS and receives up to $40,000 for each Additional Non-Affected Product Revision Surgeries performed on or before the date that is three hundred and sixty-five (365) days after the date of his/her APRS, not to exceed $200,000 in the aggregate.

IV. MATRIX LEVEL IV (Major Complications)

Eligibility. Class Members who have suffered any of the following as a major surgical complication of a CRS:

(1) direct injury to the genito-urinary system during revision;

(2) wound infection occurring within one-hundred and eighty (180) days from the date of a CRS and requiring surgical debridement with prosthesis retention, resection arthroplasty, hip arthrodesis or reimplantation;

(3) one or more dislocation(s)/subluxation(s) of the prosthetic femoral head occurring within ninety (90) days from the date of the CRS and requiring closed reduction under intravenous sedation or general anesthesia;

(4) pulmonary embolism requiring hospitalization and/or placement of an inferior vena cava filter;

(5) grade IV heterotopic ossification (as demonstrated on x-ray) and/or heterotopic ossification requiring surgical repair, each occurring within one-hundred eighty (180) days from the date of a CRS;

(6) non-union of a trochanteric osteotomy occurring within one-hundred and eighty (180) days from the date of a CRS and requiring surgical repair;

(7) periprosthetic fracture experienced within thirty (30) days from the date of a CRS and requiring either open or closed reduction; or

(8) abductor mechanism disruption occurring within one hundred eighty (180) days from the date of a CRS and requiring surgical repair.

The Claims Administrator, at his/her discretion, may qualify a Class Member who has suffered a major surgical complication not listed above for benefits under this Matrix Level IV.

Benefits. Under Matrix Level IV, a Class Member receives up to $36,000 for each major complication that he/she experiences not to exceed $90,000.

V. MATRIX LEVEL V (Permanent Injury)

Eligibility. Class Members who have suffered any of the following permanent injuries as a surgical complication of a CRS:

(1) permanent nerve injury, either moderate or severe, as demonstrated by objective physical examination and quantitative measures (e.g. EMG and/or nerve conduction studies) on or after the date that is three hundred and sixty-five (365) days after a CRS;

(2) permanent vascular injury, either moderate or severe, as demonstrated by objective physical examination and quantitative measures (e.g. angiogram) on or after the date that is three hundred and sixty-five (365) days after a CRS; or

(3) permanent injury due to an infection (qualifying as a major complication under Matrix Level IV), either moderate or severe, as demonstrated by objective physical examination and quantitative measures on or after the date that is three hundred and sixty-five (365) days after a CRS.

The Claims Administrator, at his/her discretion, may qualify a Class Member who has suffered a permanent injury as a surgical complication not listed above for benefits under this Matrix Level V.

Benefits. A Class Member’s compensation under this Matrix Level V will be based upon (1) the severity of the permanent injury and (2) the Class Member’s age on the date the permanent injury was recognized, as follows:

[1] The Claims Administrator may, at his/her discretion, extend this compensable time period by 180 days where a Class Member’s treating orthopedic surgeon causally relates (to a medical probability) the NAPRS to the APRS and/or to the original implantation of the Affected Product.

[2] The Claims Administrator may, at his/her discretion, extend this compensable time period by 180 days where a Class Member’s treating orthopedic surgeon causally relates (to a medical probability) the Additional Non-Affected Product Revision to a NAPRS or to his/her APRS.

Age on Date Permanent Injury was Recognized

VI. MATRIX LEVEL VI (Myocardial Infarction)

Eligibility. Class Members who have suffered a myocardial infarction during a CRS or during the hospitalization associated with a CRS. In addition, the Claims Administrator, at his/her discretion, may qualify a Class Member whose treating cardiothoracic surgeon or treating cardiologist causally relates a myocardial infarction (neither occurring during a CRS nor CRS hospitalization) to the Covered Revision Surgery.

Benefits. A Class Member’s compensation under Matrix Level VI will be based upon (1) the pre and post myocardial infarction change in Functional Classification (as defined by the New York Heart Association [1]) and (2) the Class Member’ age on the date of the myocardial infarction as follows:

Age on Date of Myocardial Infarction

VII. MATRIX LEVEL VII (Stroke)

Eligibility. Class Members who have suffered a stroke (or other event resulting in central nervous system sequelae) during a CRS or during the hospitalization associated with a CRS. In addition, the Claims Administrator, at his/her discretion, may also qualify a Class Member whose treating neurosurgeon or treating neurologist causally relates a stroke (neither occurring during a CRS nor CRS hospitalization) to a Covered Revision Surgery.

Benefits. A Class Member’s compensation under Matrix Level VII will be based upon (1) the Class Member’s Functional Stroke Outcome Classification (as defined by the American Heart Association [2])and (2) his/her age on the date of the stroke (or other event resulting in central nervous system sequelae) as follows:

Age on Date of Stroke

VIII. MATRIX LEVEL VIII (Death)

Eligibility. Class Members whose claims are brought on behalf of Affected Product Recipients who have died during a CRS or during the hospitalization associated with a CRS. In addition, the Claims Administrator, at his/her discretion, may also qualify a Class Member whose treating surgeon or treating physician causally relates a death (neither occurring during a CRS nor CRS hospitalization) to a Covered Revision Surgery.

Benefits. A Representative Claimant’s compensation under Matrix Level VIII will be as follows:

(1) he/she will receive a minimum payment of up to $40,000;

(2) he/she will receive up to $160,000 if the Affected Product Recipient was married on the date of death;

(3) he/she will receive up to $80,000 multiplied by the number of minor children (under the age of 18), if any, on the date of the Affected Product Recipient’s death;

(4) he/she will receive up to $20,000 multiplied by the number of adult children (age 18 or older), if any, on the date of the Affected Product Recipient’s death;

(5) he/she will receive up to $40,000 multiplied by the number of parents, if any, on the date of the Affected Product Recipient’s death and whose claims are recognized pursuant to applicable state law; and

(6) where applicable, he/she will receive the Affected Product Recipient’s lost income, calculated as the sum of the following: (x) the percentage of the “adjusted current annual income” equal to the number of days from the date of death to the end of the year divided by 365; and (y) the present value of the future “adjusted current annual income,” beginning the year following the death, ending the year of the Affected Product Recipient’s 62nd birthday, and discounted to the date of Final Judicial Approval at a net interest rate of 1.5% (which percentage is calculated as the difference between 5.5% growth and a 7.0% discount rate). If the Affected Product Recipient has no such income or is age 62 at the time of death, then there is no payment under this section.

Limitation. Under no circumstances should the total benefits recoverable under this Matrix Level VIII exceed $800,000.

IX. MATRIX LEVEL IX (Discretionary)

Eligibility. Class Members who feel that they are entitled to EIF Benefits as a result of a complication that was neither anticipated, nor provided for under Matrix Levels I-VIII

Benefits. The Claims Administrator, at his/her discretion, may award EIF Benefits to a Class Member under this Matrix Level IX. A Class Member’s eligibility to receive benefits pursuant to Matrix Levels I-VIII in no way precludes such Class Member from receiving benefits pursuant to this Matrix Level IX. In doing so, the Claims Administrator shall consider evidence of any catastrophic loss of income and/or extraordinary medical expenses related to the Affected Product.

KNEE MATRIX

The Knee Matrix is separated into levels that are based upon the varying complications which entitle Class Members to EIF Benefits. These levels are as follows:

I. MATRIX LEVEL I (Revision Surgery Indicated But for A Medical Condition)

Eligibility. Class Members for whom Affected Product Revision Surgery would be indicated but for a medical condition(s). Class Members who are eligible to receive benefits pursuant to Matrix Level I, but who do not suffer a diminished life expectancy as a result of the medical condition(s) that are preventing those Class Members from undergoing a revision surgery, may be eligible to receive additional benefits pursuant to Matrix Level IX.

Benefits. Under Matrix Level I, a Class Member receives up to $120,000.

II. MATRIX LEVEL II (Non-Removal Surgery)

Eligibility. Class Members who have not undergone an APRS, but who have undergone a surgery wherein their treating surgeons have attempted to secure an Affected Product using screws, cement, or some other means, as a result of non-traumatic loosening.

Benefits. Under Matrix Level II, a Class Member receives up to $36,000 for each such procedure that he/she undergoes not to exceed $90,000.

III. MATRIX LEVEL III (Non-Affected Product Revision Surgery and Additional Non-Affected Product Revisions).

Eligibility. Class Members who have undergone a Non-Affected Product Revision Surgery on or before the date that is one-hundred and eighty (180) days [3] after the date of an APRS; this Matrix Level III additionally relates to those Class Members who have required one or more Additional Non-Affected Product Revision Surgeries (after the First NAPRS) on or before the date that is three hundred and sixty-five (365) days [4] after the date of their APRS.

Benefits. Under Matrix Level III, a Class Member receives up to $80,000 for a NAPRS and receives up to $40,000 for one or more Additional Non-Affected Product Revision Surgeries performed on or before the date that is three hundred and sixty-five (365) days from the date of his/her APRS, not to exceed $200,000 in the aggregate.

IV. MATRIX LEVEL IV (Major Complications)

Eligibility. Class Members who have suffered any of the following as a major surgical complication of a CRS:

(1) wound infection occurring within 180 days from the date of CRS and requiring surgical debridement, resection arthroplasty, knee arthrodesis, or reimplantation;

(2) pulmonary embolism requiring hospitalization and/or placement of an inferior vena cava filter;

(3) grade IV heterotopic ossification (as demonstrated on x-ray) and/or heterotopic ossification requiring surgical repair, each occurring within one-hundred and eighty (180) days from the date of a CRS;

(4) non-union of a tibial tubercle osteotomy occurring within one-hundred and eighty (180) days of the date of a CRS and requiring surgical repair;

(5) periprosthetic fracture experienced within thirty (30) days of the date of a CRS and requiring either open or closed reduction; or

(6) extensor mechanism disruption occurring within one-hundred and eighty (180) days of the date of a CRS and requiring surgical repair.

The Claims Administrator, at his/her discretion, may qualify a Class Member who has suffered a Major Surgical Complication not listed above for benefits under this Matrix Level IV.

Benefits. Under Matrix Level IV, a Class Member receives up to $36,000 for each major complication that he/she experiences – not to exceed $90,000.

V. MATRIX LEVEL V (Permanent Injury)

Eligibility. Class Members who have suffered any of the following permanent injuries as a surgical complication of a CRS:

(1) permanent nerve injury, either moderate or severe, as demonstrated by objective physical examination and quantitative measures (e.g. EMG and/or nerve conduction studies) on or after the date that is three hundred and sixty-five (365) days after a CRS;

(2) permanent vascular injury, either moderate or severe, as demonstrated by objective physical examination and quantitative measures (e.g. angiogram) on or after the date that is three hundred and sixty-five (365) days after a CRS; or

(3) permanent injury due to an infection(qualifying as a major complication under Matrix Level IV), either moderate or severe, on of after the date that is three hundred and sixty-five (365) days after a CRS.

The Claims Administrator, at his/her discretion, may qualify a Class Member who has suffered a permanent injury as a surgical complication not listed above for benefits under this Matrix Level V.

Benefits. A Class Member’s compensation under this Matrix Level V will be based upon (1) the severity of the permanent injury and (2) the Class Member’s age on the date the permanent injury was recognized, as follows:

Age on Date Permanent Injury was Recognized

VII. MATRIX LEVEL VI (Myocardial Infarction)

Eligibility. Class Members who have suffered a myocardial infarction during a CRS or during the hospitalization associated with a CRS. In addition, the Claims Administrator, at his/her discretion, may qualify a Class Member whose treating cardiothoracic surgeon or treating cardiologist causally relates a myocardial infarction (neither occurring during a CRS nor CRS hospitalization) to the Covered Revision Surgery.

Benefits. A Class Member’s compensation under Matrix Level VI will be based upon (1) the pre and post myocardial infarction change in Functional Classification (as defined by the New York Heart Association [5]) and (2) his/her age on the date of the myocardial infarction as follows:

Age on Date of Myocardial Infarction

VII. MATRIX LEVEL VII (Stroke)

Eligibility. Class Members who have suffered a stroke (or other event resulting in central nervous system sequelae) during a CRS or during the hospitalization associated with a CRS. In addition, the Claims Administrator, at his/her discretion, may also qualify a Class Member whose treating neurosurgeon or treating neurologist causally relates a stroke (neither occurring during a CRS nor CRS hospitalization) to a Covered Revision Surgery.

Benefits. A Class Member’s compensation under Matrix Level VII will be based upon (1) the Class Member’s Functional Stroke Outcome Classification (as defined by the American Heart Association [6]) and (2) his/her age on the date of the stroke (or other event resulting in central nervous system sequelae) as follows:

Age on Date of Stroke

VIII. MATRIX LEVEL VIII (Death)

Eligibility. Class Members whose claims are brought on behalf of Affected Product Recipients who have died during a CRS or during the hospitalization associated with a CRS. In addition, the Claims Administrator, at his/her discretion, may also qualify a Class Member whose treating surgeon or treating physician causally relates a death (neither occurring during a CRS nor CRS hospitalization) to a Covered Revision Surgery.

Benefits. A Representative Claimant’s compensation under Matrix Level VIII will be as follows:

(1) he/she will receive a minimum payment of up to $40,000;

(2) he/she will receive up to $160,000 if the Affected Product Recipient was married on the date of death;

(3) he/she will receive up to $80,000 multiplied by the number of minor children (under the age of 18), if any, on the date of the Affected Product Recipient’s death;

(4) he/she will receive up to $20,000 multiplied by the number of adult children (age 18 or older), if any, on the date of the Affected Product Recipient’s death;

(5) he/she will receive up to $40,000 multiplied by the number of parents, if any, on the date of the Affected Product Recipient’s death and whose claims are recognized pursuant to applicable state law; and

(6) where applicable, he/she will receive the Affected Product Recipient’s lost income, calculated as the sum of the following: (x) the percentage of the “adjusted current annual income” equal to the number of days from the date of death to the end of the year divided by 365; and (y) the present value of the future “adjusted current annual income,” beginning the year following the death, ending the year of the Affected Product Recipient’s 62nd birthday, and discounted to the date of Final Judicial Approval at a net interest rate of 1.5% (which percentage is calculated as the difference between 5.5% growth and a 7.0% discount rate). If the Affected Product Recipient has no such income or is age 62 at the time of death, then there is no payment under this section.

Limitation. Under no circumstances should the total benefits recoverable under this Matrix Level VIII exceed $800,000.

IX. MATRIX LEVEL IX (Discretionary)

Eligibility. Class Members who feel that they are entitled to EIF Benefits as a result of a complication that was neither anticipated, nor provided for under Matrix Levels I-VIII.

Benefits. The Claims Administrator, at his/her discretion, may award benefits to a Class Member under this Matrix Level IX. A Class Member’s eligibility to receive benefits pursuant to Matrix Levels I-VIII in no way precludes such Class Member from receiving benefits pursuant to this Matrix Level IX. In doing so, the Claims Administrator shall consider evidence of any catastrophic loss of income and/or extraordinary medical expenses related to the Affected Product.

[1] See T. Andreoli, J. Bennett, C. Carpenter, F. Plum, L. Smith, Jr., Cecil Essentials of Medicine, at 12 (3d ed. 1993).

[2]See The American Heart Association Stroke Outcome Classification 29 Stroke at 1274-75 (1998).

[3] The Claims Administrator may, at his/her discretion, extend this compensable time period by 180 days where a Class Member’s treating orthopedic surgeon causally relates (to a medical probability) the NAPRS to the APRS and/or to the original implantation of the Affected Product.

[4] The Claims Administrator may, at his/her discretion, extend this compensable time period by 180 days where a Class Member’s treating orthopedic surgeon causally relates (to a medical probability) the Additional Non-Affected Product Revision to a NAPRS or to his/her APRS.

[5] See T. Andreoli, J. Bennett, C. Carpenter, F. Plum, L. Smith, Jr., Cecil Essentials of Medicine, at 12 (3d ed. 1993).

[6] See The American Heart Association Stroke Outcome Classification 29 Stroke at 1274-75 (1998).

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