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Class Action Settlement Agreement
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Article 5 & 6 | Article 7 & 8 | Article 9-16
Article 3. CLASS MEMBER RIGHTS AND BENEFITS
Section 3.1 MEDICAL RESEARCH AND MONITORING
(a) The Medical Research and Monitoring Fund shall be used to finance medical research relating to reconstructive orthopedic implants, specifically hip and knee implants, for the benefit of Class Members as set forth on the proposal attached hereto as Annex III. The proposal shall provide that the Sulzer Settlement Trust establish and maintain a "registry" of Class Members for the purpose of collection of information and data in order to monitor the medical condition of such Class Members.
Section 3.2 [RESERVED]
Section 3.3 BENEFITS PAYABLE TO CLASS MEMBERS OUT OF THE UNREVISED AFFECTED PRODUCT RECIPIENT FUND
(a) Class Members (other than Subclass V) who have not undergone Affected Product Revision Surgery on or before the Final Judicial Approval Date shall be entitled to receive an aggregate cash payment of $1,000, payable in cash by the date that is the later of the 45th day following the Funding Date and the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted). Class Members (other than Subclass V) who have not undergone Affected Product Revision Surgery on or before the Final Judicial Approval Date shall be entitled to receive an aggregate cash payment of $1,000, payable in cash by the date that
is the later of the 45th day following the Funding Date and the 45th day following the date the Claims Administrator makes Final Determination with respect to such Class Member
(or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted).
(b) Cash amounts paid to Class Members pursuant to Section 3.3(a) above shall be paid out of the Unrevised Affected Product Recipient Fund.
Section 3.4 BENEFIT PAYMENTS TO CLASS MEMBERS OUT OF THE AFFECTED PRODUCT REVISION SURGERY FUND
(a) Class Members who have undergone or who undergo Affected Product Revision Surgery
within the time periods set forth in Sections 3.4(b) and (c) below shall be entitled to receive an aggregate payment value of $160,000 for each such Affected Product for which
such Class Member undergoes Affected Product Revision Surgery payable in accordance with Section 3.4(b) and (c) below. As an additional benefit to Class Members, the Sulzer
Settlement Trust will pay a portion of a Class Member’s attorney fee out of the Plaintiffs’ Counsel Sub-Fund. This payment will be 23% of the product reached by
multiplying the stated benefit by 1.25. In the event that the contingent fee contract provides for a rate that is less than 23%, the applicable attorney fee payment under this Section 3.4(a) will be calculated using the lower rate.
(b) Payments made pursuant to Section 3.4(a) with respect to Affected Product Revision Surgeries (i) undergone by Class Members in respect of Inter-Op Shells (other than Reprocessed Inter-Op Shells) prior to the Final Judicial Approval Date and prior to June 5, 2003, (ii) undergone by Class Members in respect of Tibial Baseplates prior to Final Judicial Approval Date and prior to November 17, 2003, and (iii) undergone by Class Members in respect of Reprocessed Inter-Op Shells prior to the Final Judicial Approval Date and prior to September 8, 2004, shall be made as follows:
(x) at least 55% shall be payable in cash (less any amounts paid to such Class Member pursuant to Article 8, if applicable) by the date that is the later of the 45th day following the Funding Date and the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted) and
at least 55% shall be payable in cash (less any amounts paid to such Class Member pursuant to Article 8, if applicable) by the date that is the later of the 45th day following the Funding Date and the 45th day following the date the Claims Administrator makes Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted) and
81.25% ($130,000.00) shall be payable in cash (less any amounts paid to such Class member pursuant to Article 8, if applicable) by the date that is the later of the 45th day following the Funding Date and the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted) and
(y) at least 45% shall be payable in either cash or ADRs or Shares (valued as set forth in Article 6), or a combination of both, no later than the date that is the later of 20 months from the CCI Issue Date and the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted).
at least 45% shall be payable in either cash or ADRs or Shares (valued as set forth in Article 6), or a combination of both, no later than the date that is the later of 20 months from the CCI Issue Date and the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted).
the remainder of the APRS benefit shall be payable in cash no later than the date that is the later of the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted), and the 45th day following the date on which the Claims Administrator can make a reasonable estimate of the total number of APRS claims to be submitted.
It is the intent of the Parties that Class Members shall receive the cash equivalent of such ADRs or Shares.
(c) Subject to Section 3.6(a), payments made pursuant to Section 3.4(a) with respect to Affected Product Revisions Surgeries (i) undergone by Class Members in
respect of Inter-Op Shells (other than Reprocessed Inter-Op Shells) on or after the Final Judicial Approval Date (if such date is prior to June 5, 2003) and prior to June 5, 2003,
(ii) undergone by Class Members in respect of Tibial Baseplates on or after the Final Judicial Approval Date (if such date is prior to November 17, 2003) and prior to November
17, 2003 and (iii) undergone by Class Members in respect of Reprocessed Inter-Op Shells on or after the Final Judicial Approval Date (if such date is prior to September 8, 2004) and
prior to September 8, 2004, shall be made as follows:
(x) approximately 55% shall be payable in cash by the date that is the later of the 45th day following the date of such Affected Product Revision Surgery and the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted) and
approximately 55% shall be payable in cash by the date that is the later of the 45th day following the date of such Affected Product Revision Surgery and the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted) and
81.25% ($130,000.00) shall be payable in cash (less any amounts paid to such Class member pursuant to Article 8, if applicable) by the date that is the later of the 45th day following the Funding Date and the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted) and
(y) approximately 45% shall be payable in either cash or ADRs or Shares (valued as set forth in Article 6), or a combination of both, no later than the date that is the later of 20 months from the CCI Issue Date and the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted)
approximately 45% shall be payable in either cash or ADRs or Shares (valued as set forth in Article 6), or a combination of both, no later than the date that is the later of 20 months from the CCI Issue Date and the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted).
the remainder of the APRS benefit shall be payable in cash no later than the date that is the later of the 45th day following the date the Claims Administrator makes a Final Determination with respect to such Class Member (or if such Final Determination is appealed in accordance with Section 4.6, the date on which all such appeals are exhausted), and the 45th day following the date on which the Claims Administrator can make a reasonable estimate ot the total number of APRS claims to be submitted. It is the intent of the Parties that
Class Members shall receive the cash equivalent of such ADRs or Shares. (d) Cash amounts paid to Class Members pursuant to Section 3.4(b) or Section 3.4(c) above shall be paid out of the Affected Product Revision Surgery Fund. ADRs or Shares
distributed to Class Members pursuant to Section 3.4(b) or Section 3.4(c), if applicable, shall be satisfied out of the Settlement Trust Brokerage Account. It is the intent of the
Parties that Class Members shall receive the cash equivalent of such ADRs or Shares.
Section 3.5 DERIVATIVE CLAIMANT PAYMENTS
(a) The Derivative Claimants of a Class Member that is entitled to payment pursuant to
Section 3.3(a) shall be entitled to receive a cash payment of $250 to be paid no
later than the date the payment is made to such Class Member pursuant to Section 3.3(a).
Such payments shall be payable out of the Unrevised Affected Product Recipient Fund.
(b) Subject to Section 3.6(b), the Derivative Claimants of a Class Member that is entitled to payment pursuant to Section 3.4(a) shall be entitled to receive a cash payment of $1,600 to be paid no later than the date the payment is made to such Class Member pursuant to Section 3.4(b) or Section 3.4(c), as applicable.
Subject to Section 3.6(b), Derivative Claimants of Class Members
who are entitled to payment under Section 3.4(a) are entitled to receive a cash payment of
$1,600 (less any amounts paid to such Derivative Claimants pursuant to Article 8, if
applicable), to be paid no later than the date on which payments are made to Class Members
pursuant to Section 3.4(b) or 3.4(c) as applicable. Such payments shall be payable out
of the Affected Product Revision Surgery Fund. As an additional benefit to Class Members,
the Sulzer Settlement Trust will pay a portion of a Class Member’s attorney fee out
of the Plaintiffs’ Counsel Sub-Fund. This payment will be 23% of the product reached
by multiplying the stated benefit by 1.25. In the event that the contingent fee contract
provides for a rate that is less than 23%, the applicable attorney fee payment under this
Section 3.5(b) will be calculated using the lower rate.
(c) Derivative Claimants may also be eligible to receive additional benefits pursuant to Section 3.7, as provided for in Annex IV hereof, in an amount equal to 1% of the benefit payable to the associated Affected Product Recipient. As an additional benefit to Class Members, the Sulzer Settlement Trust will pay a portion of a Class Member's attorney fee out of the Plaintiffs' Counsel Sub-Fund. This payment will be 23% of the product reached by multiplying the stated benefit by 1.25. In the event that the contingent fee contract provides for a rate that is less than 23%, the applicable attorney fee payment under this Section 3.5(c) will be calculated using the lower rate.
Derivative Claimants may also be eligible to receive additional
benefits pursuant to Section 3.7, as provided for in Annex IV hereof, in an amount equal
to 1% of the benefit payable to the associated Affected Product Recipient. In the event
that the contingent fee contract provides for a rate that is less than 23%, the applicable
attorney fee payment under this Section 3.5(c) will be calculated using the lower rate.
Section 3.6 OFFSETS
(a) If a Class Member has not had an Affected Product Revision Surgery as of the date of Final Judicial Approval and receives benefits under Section 3.3(a) above and
subsequently has an Affected Product Revision Surgery within the time period set forth in Section 3.4(c), such Class Member shall be entitled to the benefits payable pursuant to Section 3.4(a), less all amounts previously paid to the Class Member pursuant to Sections 3.3(a).
(b) If a Derivative Claimant receives benefits under Section 3.5(a) and then is entitled to receive additional benefits under Section 3.5(b), such Derivative Claimant
shall be entitled to the benefits payable pursuant to Section 3.5(b), less all amounts previously paid to the Derivative Claimant pursuant to Section 3.5(a).
(c) If a Class Member receives benefits pursuant to Section 3.3(a) and also qualifies for benefits pursuant to 3.7, any such EIF Benefits paid to such Class Member shall be
less all amounts previously paid to the Class Member pursuant to Section 3.3(a); provided, however, that this Section 3.6(c) shall not apply to Class Members who qualify for
benefits pursuant to Section 3.4(c). As an additional benefit to Class Members, the Sulzer Settlement Trust will pay a portion of a Class Member’s attorney fee out of the
Plaintiffs’ Counsel Sub-Fund. This payment will be up to 23% of the product reached by multiplying the stated benefit by 1.25.
(d) To the extent that Sulzer has made any advance or other payments to
any Class Member prior to the Insurance Proceeds Delivery Date, any amounts owed to such
Class member pursuant to Section 3.3, 3.4(a), 3.5, 3.7 and 3.9(a), as applicable, shall be
reduced by the amount of such advance or other payment; provided, however, that
with respect to an Affected Product Recipient who is eligible for benefits pursuant to
Section 3.4(a), any such amounts owed to such Class Member shall not be reduced to an
amount less than $100,000 pursuant to this Section 3.6(d). Notwithstanding the
foregoing, (i) any benefits payable to a Class Member pursuant to Section 3.3 will not be
offset from the amount of any payment received by such Class Member prior to the Insurance
Proceeds Delivery Date; and (ii) to the extent a Class Member receives any payment of
benefits prior to the Insurance Proceeds Delivery Date, such amounts shall be deducted
from amount of benefits that such Class Member is entitled to pursuant to Sections 3.4(b),
3.4(c) and 3.7; provided, that, any such amounts, if possible, shall be deducted from the
final payment made to such Class Member hereunder.
Section 3.7 COMPENSATION BENEFITS PAYABLE FROM EXTRAORDINARY INJURY FUND
(a) In addition to the benefits set forth in Sections 3.3, 3.4(a), 3.9(a) and Article 8
pursuant to this Settlement Agreement, Class Members may be eligible to receive additional
compensation under this Settlement Agreement ("Extraordinary Injury Fund
Benefits" or "EIF Benefits") pursuant to the terms of
the payment matrices (the "Matrices" or "Matrix")
attached hereto as Annex IV. As an additional benefit to Class Members, the Sulzer
Settlement Trust will pay a portion of a Class Member’s attorney fee out of the
Plaintiffs’ Counsel Sub-Fund. This payment will be 23% of the product reached by
multiplying the stated benefit by 1.25. In the event that the contingent fee contract
provides for a rate that is less than 23%, the applicable attorney fee payment under this
Section 3.7(a) will be calculated using the lower rate.
(b) EIF Benefits payable to Class Members pursuant to Annex IV may
be paid in installments, with the first payment not to be less than 50% of the total value
of the EIF Benefits due to the Class Member, at the discretion of the Claims
Administrator. The Extraordinary Injury Fund Benefits paid to Class Members pursuant to Annex
IV hereto shall be paid out of the Extraordinary Injury Fund.
To the extent a Class Member qualifies for payment under a certain Matrix Level and then subsequently qualifies for payments under a higher Matrix Level, any payments made pursuant to the higher Matrix Level shall be less the amount allocated under any Matrix Level for which such Class Member previously qualified.
To the extent a Class Member qualifies for payment under Matrix Level IV and then subsequently qualifies for
payment under Matrix Level V because the Major Surgical Complication has resulted in a
permanent impairment, any payment made pursuant to Matrix Level V shall be less the amount
allocated under Matrix Level IV. By way of example, where a Class Member qualifies for
benefits under Matrix Level IV due to an infection and subsequently suffers from a
permanent impairment as a result of that infection, the Class Member shall receive
benefits under Matrix Level V for the permanent impairment, less any benefits previously
received by the Class Member under Matrix Level IV as result of infection.
(c) In the event of funding shortfall in the EIF, the Claims
Administrator, with approval of the Court and after conferring with Class Counsel and the
Special State Counsel Committee, shall reduce the benefits payable pursuant to Matrix
Levels III through VIII to meet the shortfall before making any reduction in benefits
payable to Class Members who qualify for payment pursuant to Matrix Levels I and II.
Section 3.8 OPT-OUT RIGHTS
(a) All Class Members (except as provided in Section 3.8(b) below) are eligible to opt
out of the Settlement represented by this Settlement Agreement (the “Opt-Out
Right”). Each Class Member wishing to exercise an Opt-Out Right must submit a
written letter, signed by the Class Member, that includes the following information: (i)
his or her name, address and telephone number; (ii) with respect to each Affected Product,
the date of implantation; (iii) with respect to each Affected Product, the implanting
surgeon; (iv) with respect to each Affected Product, the lot number and product number, if
available; and (v) whether such Class Member is represented by counsel and if so, the
name, address and telephone number of his or her lawyer. A copy of the letter must be sent
to a post-office box in Cleveland, Ohio established by the Claims Administrator and set
forth in the Notice and received no later than 5:00 p.m., Cleveland, Ohio time, on the
last day of the Opt-Out Period (which such period ends on the date that is the later of
May 14, 2002 and five (5) Business Days after Trial Court Approval). The Claims
Administrator and/or its agent shall promptly forward copies of any such letter to liaison
Class Counsel and Sulzer and shall file a list of all such Class Members who exercise an
Opt-Out Right with the Court.
(b) In the event that there is both an Affected Product Recipient or a Representative
Claimant and one or more Derivative Claimants, the Affected Product Recipient’s or
the Representative Claimant’s exercise or failure to exercise an Opt-Out Right shall
be binding on the associated Derivative Claimant(s).
(c) If a Class Member exercises his/her Opt-Out Right pursuant to this Section 3.8,
such opt-out shall only be effective upon the termination of the Opt-Out Period.
Section 3.9 PAYMENTS TO THIRD-PARTY PAYORS AND UNINSURED CLASS MEMBERS
(a) The Sulzer Settlement Trust shall pay to the United States on behalf of the Centers for Medicare and Medicaid Services (formerly known as the Health Care Finance Administration) and other Third-Party Payors in respect of subrogation or other claims for medical expenses paid on behalf of Class Members and shall pay reasonable and necessary expenses incurred by Uninsured Affected Product Recipients in respect of each Affected Product Revision Surgery; provided, however, that any such amount paid by the Sulzer Settlement Trust shall not exceed (i) $15,000 in the aggregate for any and all claims made in respect of a single Affected Product Revision Surgery (unless approved by Sulzer as set forth below) and (ii) $60.0 million, in the aggregate.
The Sulzer Settlement Trust or, if prior to the Insurance Proceeds Delivery
Date, Sulzer shall pay to the United States on behalf of the Centers for Medicare and
Medicaid Services (formerly known as Health Care Finance Administration) and other
Third-Party Payors in respect of subrogation or other claims for medical expenses paid on
behalf of Class Members and shall pay reasonable and necessary expenses incurred by
Uninsured Affected Product Recipients in respect of each Affected Product Revision
Surgery; provided, however, that any such amount paid by the Sulzer or the Sulzer
Settlement Trust shall not exceed (i) $15,000 in aggregate for any and all claims made in
respect of a single Affected Product Revisons Surgery (unless approved by Sulzer as set
forth below) and (ii) $60.0 million, in the aggregate.In the event that all such
payments reach $60.0 million in the aggregate, Sulzer agrees to fund to the Sulzer
Settlement Trust amounts necessary to pay Third-Party Payors in respect of subrogation or
other claims for medical expenses paid by such Third-Party Payors on behalf of Class
Members in excess of $15,000 in the aggregate per Affected Product Revision Surgery if
such settlement with the Third-Party Payor was approved by Sulzer. In addition, Sulzer
agrees to fund to the Sulzer Settlement Trust amounts necessary to pay the reasonable and
necessary expenses incurred by Uninsured Affected Product Recipients in respect of an
Affected Product Revision Surgery that exceed $15,000 as set forth in clause (i) above, up
to a maximum of $2.0 million in the aggregate. The Parties agree that they will negotiate
and settle all claims with respect to unpaid medical expenses paid by Third-Party Payors
on behalf of Class Members from and after the Insurance Proceeds Delivery Date, and Sulzer
shall not be obligated to fund any additional amounts to the Sulzer Settlement Trust as
provided in this Section 3.9(a) in the event the amount owed is in connection with a
settlement not authorized and directed by Sulzer. The Trustee on behalf of the Sulzer
Settlement Trust agrees to honor all agreements that have been entered into or will be
entered into after the date of this Agreement by Sulzer with the United States on behalf
of the Centers for Medicare and Medicaid Services and/or other Third-Party Payors and to
make payments in accordance with any such agreements from and following the Insurance
Proceeds Delivery Date. Sulzer and the Sulzer Settlement Trust shall obtain a full and
complete release of Settled Claims of the Released Parties, as well as the affected
individual Class Member in the case of Third-Party Payor payments, prior to making any
payments pursuant to this Section 3.9(a).
(b) Payments made pursuant to Section 3.9(a) shall be made out of the
Subrogation and Uninsured Expenses Fund Subrogation
and Uninsured Expenses Sub-Fund and shall be payable in accordance with the terms of
the applicable agreement entered into with respect to such Third-Party Payor, Medicare or
Uninsured Affected Product Recipient, as applicable.
(c) The Sulzer Settlement Trust shall defend and hold Class Members and
Plaintiffs’ Counsel harmless against any claims by a subrogee directly against such
Class Member or Plaintiffs’ Counsel for reimbursement of medical expenses of an
Affected Product Recipient necessitated by an Affected Product. Notwithstanding the
foregoing, in no event shall this provision be construed to require payment to the Class
Member with respect to the same claim for which Sulzer shall have already paid the
subrogee.
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