Sulzer Implant Settlement

Final Notice

Page 2

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WHAT ARE MY RIGHTS UNDER THE SETTLMENT AGREEMENT?

You have the following rights under the Settlement Agreement:

1. Depending upon your circumstances, you have the right to apply for Settlement Benefits pursuant to the Settlement from one or more of the following Funds: (See How Do I Apply For Benefits, below).
• Unrevised Affected Product Recipient Fund;
• Affected Product Revision Surgery Fund;
• Extraordinary Injury Fund;
• Medical Research and Monitoring Fund;
• Professional Services Fund.

If you are eligible:

• You can choose the GPO quick payment option;
2. You have the right to object to the Settlement. (See What Are Objection Rights And How Do I Exercise Them section to determine how to object).
3. You have the right to Opt-Out of the Settlement. (See What Are Opt-Out Rights And How Do I Exercise Them section).

How Do I Apply For Benefits?

In order to apply for benefits from the Settlement, you need to read carefully and complete all of the proper Claim Form(s) that apply to your circumstances. Listed below is an explanation of the various Claim Forms that must be completed and returned to the Claims Administrator to receive your payments:

What Are Objection Rights And How Do I Exercise Them?

The Fairness Hearing will take place on May 6, 2002, at 10:00 a.m. in Courtroom 124, at the United States Courthouse, located at 201 Superior Avenue, Cleveland, Ohio 44114. The purpose of the hearing is to determine whether to approve the Settlement and whether to bind Class Members who have not opted out and/or who have not accepted the GPO.

Objections can be raised by Class Members and by parties seeking to intervene under Federal Rule of Civil Procedure 24. The same objection might not be heard more than once. However, the Court may assess how many of those in attendance agree or disagree with an objection.

You can appear at the hearing in person or through an attorney representing you, and present any objection that you have to the Settlement, provided that you: (1) have not already accepted the GPO; (2) have not already opted-out; (3) have not registered for Settlement benefits; and (4) have filed a written objection with the Court. Objections must be received by the Court on or before April 29, 2002, or the objection will not be considered.

What Are Opt-Out Rights And How Do I Exercise Them?

If you do not wish to receive the benefits being offered in the Settlement, you must Opt-Out of the Settlement. In order to exercise your Opt-Out Right, you must notify the Claims Administrator, Sulzer Settlement Trust, c/o P.O. Box 94558, Cleveland, Ohio 44101-4558 in writing. Your Opt-Out notification must contain the following information to be effective: (1) name, address, and telephone number of the individual exercising the Opt-Out Right; (2) with respect to each Affected Product, the approximate date of implantation; and (3) the surgeon who implanted the Affected Product. If your notification does not include this information, your Opt-Out will not be effective. If available, the Claims Administrator would disclose the following information: (1) with respect to each Affected Product, the hospital where implantation took place; (2) with respect to each Affected Product, the lot number and product number; (3) for Class Members represented by an attorney, the name, address and telephone number of counsel; and (5) the Class Member’s Social Security number. Further, the Class Member must personally sign the Opt-Out notification. The signature of a lawyer representing the party exercising the Opt-Out Right is not valid. The Opt-Out notification must be received by the Claims Administrator on or before five (5) business days after Trial Court Approval.

If you choose to Opt-Out, you will permanently relinquish, waive and give up all rights which you would have had otherwise as a Class Member. You will not be eligible for the benefits offered under the Settlement.

If you do not Opt-Out (exclude yourself from the Settlement), you will be bound by the Settlement. You will not be able to pursue any Settled Claims (See WHAT CLAIMS AM I RELEASING) against Sulzer and any other Released Parties (See What Parties Am I Releasing).

HOW WILL THE ATTORNEY PROVIDING BENEFITS TO THE CLASS BE PAID?

Attorneys from across the country have been involved in the prosecution of the case and the negotiation of the Settlement on behalf of the Class. A number of difficult issues were involved in the litigation and negotiation of the Settlement. The most difficult issues involved the responsibility of Sulzer Ltd. for the alleged manufacturing defects of the Affected Products and the existence of insurance coverage. Under the prior Settlement, Sulzer Ltd. was not contributing any cash or stock to the Settlement, and Winterthur Insurance Company had not committed to making payments into the Settlement. However, through the efforts of Counsel, Sulzer Ltd. and Winterthur have agreed to contribute substantial payments to the Settlement.

The Settlement also provides for a separate Common Benefits Fund from which these attorneys will be compensated for their efforts. Specifically, the Settlement provides for a Common Benefit fee not to exceed Fifty Million Dollars ($50,000,000.00) and expenses not to exceed Seven Million Five Hundred Thousand Dollars ($7,500,000.00). Class Counsel and individual plaintiff’s counsel that did work for the benefit of the Class may apply to the Court for an award of attorney fees and expenses from this fund. These attorney fees will not reduce any benefits provided to Class Members under the Settlement.

UNDER WHAT CONDITIONS COULD THIS SETTLEMENT AGREEMENT BE NULLIFIED OR TERMINATED?

The Settlement will be nullified if it fails to receive Final Judicial Approval. Additionally, Sulzer has the option to terminate the Settlement anytime prior to the fifth Business Day after the termination of the Opt-Out Period. Finally, Class Counsel has the option to terminate the Settlement anytime prior to the Fairness Hearing, if it is unable to obtain an opinion of counsel that the Sulzer Medica Ltd. Shares, issued upon conversion of the CCI, are freely tradable.

WHAT CLAIMS AM I RELEASING?

Under the Settlement, Class Members are releasing any and all claims, including assigned claims, whether known or unknown, asserted or not asserted, regardless of the legal theory, existing now or arising in the future, relating to the Affected Products or their implantation. The claims being released include, without limitation and by way of example, all claims for damages or remedies of whatever kind or character, known or unknown, that are now recognized by law or that may be created or recognized in the future by statute, regulation, judicial decision, or in any other manner, for:

• personal injury and/or bodily injury, damage, death, fear of disease or injury, mental or physical pain or suffering, emotional or mental harm, or loss of enjoyment of life;
• loss of wages, income, earnings, and earning capacity, medical expenses, doctor, hospital, nursing, and drug bills;
• loss of support, services, consortium, companionship, society or affection, or damage to familial relations, by spouses, parents, children, other relatives or "significant others" of Class Members;
• wrongful death and survival actions;
• medical screening and monitoring, and injunctive and declaratory relief;
• consumer fraud, refunds, unfair business practices, deceptive trade practices, Unfair and Deceptive Acts and Practices ("UDAP"), unjust enrichment, disgorgement and other similar claims whether arising under statute, regulation, or judicial decision;
• compensatory damages, punitive, exemplary, statutory and other multiple damages or penalties of any kind including, without limitation, economic or business losses or disgorgement of profits arising out of personal injury; and
• pre-judgment or post-judgment interest.

What Parties Am I Releasing?

Under the Settlement, Class Members are releasing all of the above claims against:

• Sulzer Orthopedics Inc. and each of its affiliates, including Sulzer Medica Ltd. and each of Sulzer Medica Ltd.’s other past, present and future parent companies and direct or indirect subsidiaries, together with each of their respective past, present and future directors, officers, employees, affiliates, insurers, joint venturers and agents, including without limitation, sales agents;
• Sulzer Ltd. and all of its past, present and future parent companies and direct or indirect subsidiaries, and its and their respective past, present and future directors, officers, employees, affiliates, insurers and agents;
• Winterthur and all of its past, present and future parent companies and direct or indirect subsidiaries, and its and their respective past, present and future directors, officers, employees, affiliates, insurers and agents;
• all surgeons who implanted an Affected Product and affiliated physicians or physician groups; provided, that such surgeons, physicians or physician groups shall only be Released Parties hereunder (x) to the extent that their alleged liability arises from or relates to the recommendation, selection or use of an Affected Product or (y) to the extent that, but for the recommendation, selection or use of an Affected Product by the surgeon, physician or physician group, as opposed to another product, no such liability would exist in either case, notwithstanding the legal theory on which such alleged liability is premised (including, but not limited to, negligence, negligence per se, res ipsa loquitor, intentional or negligent misrepresentation, intentional tort, fraud, deceit, civil conspiracy, violation of state or federal statutes or codes, consumer fraud and deceptive trade practices, failure to disclose or warn, any product liability theories, any breach of warranty theories, agency, alter ego, joint venture, partnership, joint enterprise, medical malpractice, or any combination thereof) and notwithstanding the conduct alleged to give rise to such liability (including, but not limited to, failure to disclose information about a financial relationship with a company or business organization, failure to acquire a patient’s informed consent due to the failure to disclose information about the condition of or defect in an Affected Product or a financial relationship with a company or business organization, participation in the design, testing, promotion, marketing or post-market investigation of an Inter-Op™ Shell or a Tibial Baseplate, or any other conduct that, in the absence of the recommendation, selection or use of an Affected Product by the surgeon, physician or physician group in the particular instance in question, would not give rise to liability); provided, further, that the foregoing shall not preclude claims based on such surgeons’, physicians’ or physician groups’ independent negligence in the performance of the surgery which is the subject of the claim and such claim is not based on the recommendation, selection or use of an Affected Product. (Examples of such claims for "independent negligence" for which a surgeon is not released may include, but not be limited to, the following: (1) leaving a foreign object in the patient during surgery; (2) failure to adequately suture the surgical wound; or (3) inadequate monitoring or treatment in the post-operative period. Further, as it relates to an Affected Product Recipient’s ability to pursue such claims against a surgeon, physician or physician group for independent acts of negligence not based on the recommendation, selection or use of an Affected Product, this provision is not meant to preclude such a claimant from pursuing exemplary or punitive damages for such independent acts of negligence to the extent allowed by applicable state law, but simply recognizes the possibility, however remote, under state law that negligent conduct may rise to the level of recklessness, willfulness or other indicia or intent or state of mind to support the imposition of exemplary or punitive damages); and
• organized medical specialty organizations, raw material or other suppliers of Sulzer of materials, machines or equipment used in the manufacture of the Affected Products, distributors of the Affected Products, and any other person or entity involved in the design, manufacture, distribution, implant or explant of an Affected Product and all insurers of the foregoing.

Each claim being released above shall be conclusively compromised, settled and released as to each party released above. Such releases shall remain effective regardless of changes in the circumstances or condition of any of the released parties or Class Member, discovery of new or additional facts, or changes in applicable law. In making such releases the Class Member expressly acknowledges and waives the provisions of Section 1542 of the Civil Code of the State of California, which provides that "[a] general release does not extend to claims which the creditor does not know or suspect exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor," as well as any similar provisions of other states. The releases shall extinguish any claims for contribution and/or indemnification against all released parties.

WHAT ARE THE CLASS COUNSEL?

Stanley M. Chesley, Esq.
Waite, Schneider, Bayless & Chesley Co., L.P.A.
1513 Central Trust Tower
Fourth & Vine Street
Cincinnati, OH 45202

John R. Climaco, Esq.
Climaco, Lefkowitz, Peca, Wilcox & Garofoli Co., L.P.A.
Ninth Floor, The Halle Building
1228 Euclid Avenue
Cleveland, OH 44115

Don Barrett, Esq.
Barrett Law Office, P.A.
404 Court Square North
Post Office Box 987
Lexington, Mississippi 39095

James Dugan, II, Esq.
Gauthier, Downing, LaBarre, Beiser & Dean
3500 N. Hullen Street
Metairie, LA 70002

Keith M. Fleischman, Esq.
Milberg Weiss Bershad Hynes & Lerach LLP
One Pennsylvania Plaza
New York, NY 10119-0165

Daniel E. Becnel, Jr., Esq.
The Law Offices of Daniel E. Becnel, Jr.
106 West Seventh Street
P.O. Drawer H
Reserve, LA 70084

FOR SUBCLASS I¹⁵
R. Eric Kennedy, Esq.
Weisman, Goldberg & Weisman Co., L.P.A.
1600 Midland Building
Landmark Office Towers
Cleveland, Ohio 44115

FOR SUBCLASS II¹⁶
Richard S. Wayne, Esq.
Strauss & Troy
The Federal Reserve Building
150 East 4th Street
Cincinnati, OH 45202-4018

FOR SUBCLASS III¹⁷
Peter J. Brodhead, Esq.
Spangenberg, Shibley & Liber LLP
1900 East Ninth Street
2400 National City Center
Cleveland, OH 44114-3400

FOR SUBCLASS IV¹⁸
Phillip A. Ciano, Esq.
Ciano & Goldwasser L.L.P.
The Huntington Building
925 Euclid Avenue, Suite 1995
Cleveland, OH 44115

FOR SUBCLASS V¹⁹
Richard M. Heimann, Esq.
Lieff, Cabraser, Heimann & Bernstein, LLP
Embarcadero Center West
275 Battery Street, Suite 3000
San Francisco, CA 94111-3339

WHO DO I CONTACT WITH QUESTIONS?

If you have a question regarding this Notice or about any of the terms used within this Notice, and you have hired personal counsel, you are encouraged to contact him/her. If you have not hired counsel, you are encouraged to contact Liaison Class Counsel at 1-800-683-1861. To obtain a copy of the entire Settlement you may:

1. Download and/or view a copy at www.sulzerimplantsettlement.com; or
2. Contact Liaison Counsel in writing at 101 Prospect Avenue, 1600 Midland Building, Cleveland, Ohio 44115; or
3. Contact the Claims Administrator, Sulzer Settlement Trust, in writing, at P.O. Box 94558, Cleveland, Ohio 44101-4558; or
4. Telephone 1-800-683-1861; or
5. Download and/or view a copy at the Northern District of Ohio’s website at www.ohnd.uscourts.gov.

If you are unsure about what to do or what your rights are under your state’s or territory’s law, you are urged to consult with both a qualified doctor and a lawyer familiar with the Sulzer Hip and Knee litigation claims. You may also contact the Claims Administrator in writing with any questions. You should NOT contact the Court with any questions or inquiries.

¹If there are discrepancies between the Settlement Agreement and the Final Notice, the Settlement Agreement shall control.

² All definitions used in this Final Notice, and not otherwise defined herein, are taken from Section 1.1 of the Settlement Agreement dated March 13, 2002. "Affected Products" shall mean "(i) Inter-Op™ Acetabular Shells ("Inter-Op™ Shells") identified in SOUS’s [Sulzer Orthopedics Inc.] Safety Alert dated December 5, 2000 as identified by lot numbers on [Exhibit I] attached hereto, (ii) Natural Knee II® Tibial Baseplates ("Tibial Baseplates") identified in SOUS’s Special Notification dated May 17, 2001 as identified by lot numbers on [Exhibit I] attached hereto, (iii) Inter-Op™ Shells and Tibial Baseplates that are otherwise identified by lot numbers on [Exhibit I] attached hereto and (iv) Reprocessed Inter-Op™ Shells ("Reprocessed Inter-Op™ Shells") identified by lot numbers on [Exhibit II] attached hereto."

³ "Derivative Claimant" shall mean any person asserting the right to sue Sulzer and/or Sulzer AG independently or derivatively by reason of their personal relationship with an Affected Product Recipient, as a spouse or ‘significant other’."

⁴ "Affected Product Recipients" shall mean persons who are citizens or residents of the United States, in whose bodies one or more Affected Products have been or are now implanted in an operation or other surgical procedure, whether or not any such Affected Product has been or may in the future be removed."

⁵ "Representative Claimants" shall mean "an estate, administrator or other legal representative, trust or ‘special needs trust’ of an Affected Product Recipient or Derivative Claimant. For the purpose of clarity, the parties acknowledge that Representative Claimants are entitled to any and all rights and benefits under this Settlement Agreement that the represented Affected Product Recipient and/or Derivative Claimant would have received hereunder regardless of any state law to the contrary."

⁶ "Class Member" shall mean members of the Settlement Class. "Settlement Class" shall mean "all Affected Product Recipients who are citizens or residents of the United States, including their associated Derivative Claimants and Representative Claimants. The Settlement Class specifically includes persons who have or may have claims with respect to injuries not yet manifested. The Settlement Class shall expressly exclude any person or entity that entered into a settlement with Sulzer (which included a release) related to claims arising out of the implantation of an Affected Product.”

⁷"Trial Court Approval" shall mean "the granting, by order entered on the docket thereof, of the approval of the Settlement Agreement by Federal District Court." This date is estimated to be no later than June 1, 2002.

⁸ "Affected Product Revision Surgery" or "APRS" shall mean surgical removal and/or replacement of an Affected Product for reason other than trauma."

⁹ "Covered Revision Surgery" or "CRS" shall mean "an Affected Product Revision Surgery, Non-Affected Product Revision Surgery and Additional Non-Affected Product Revision Surgery." "Non-Affected Product Revision Surgery" or "NAPRS" shall mean "a surgery (not indicated as a result of trauma) that was performed to remove and/or replace a product that is not an Affected Product within one-hundred and eighty (180) days of an Affected Product Revision Surgery in respect of a hip or knee that previously underwent an Affected Product Revision Surgery." "Additional Non-Affected Product Revision Surgery" shall mean "a surgery, not the result of trauma, performed to remove and/or replace a product that is not an Affected Product after a Non-Affected Product Revision Surgery and prior to the date that is three hundred sixty-five (365) days after the initial Affected Product Revision Surgery with respect to the same hip or knee."

¹⁰ "Third-Party Payor" shall mean any insurer or other party that makes payments on behalf of Class Members for medical expenses and would have a subrogated claim with respect to payment of such expenses or provides goods and services to Class Members who have a subrogation right or lien with respect to the cost of such goods and services."

¹¹ "Funding Date" is the later of One Hundred Eighty (180) days after the Trial Court Approval Date and Sixty (60) days after the Final Judicial Approval Date. "Trial Court Approval Date" shall mean the date upon which Trial Court Approval occurs. (Trial Court Approval Date is estimated to be June 1, 2002.) "Final Judicial Approval Date" shall mean the date on which Final Judicial Approval occurs. "Final Judicial Approval" refers to the approval of the Settlement Agreement by the Federal District Court and such approval becoming final by the exhaustion of all appeals including petition for a writ of certiorari to the United States Supreme Court. Final Judicial Approval shall be deemed not to have been obtained in the event that Trial Court Approval is denied and the period for appealing such denial has expired without any such appeal having been taken.

¹² The Settlement Agreement permits Class Members to appeal the Final Determination of the Claims Administrator. If a Class Member exercises that right, the Class Member will receive payment at the conclusion of his/her appeal. This right of appeal and its implication for time of payment apply to all sections in this Final Notice that describe payment of Settlement Benefits.

¹³ "CCI Issue Date" is the "later of (i) the 180th day following the Trial Court Approval Date and (ii) the 60th day following the Final Judicial Approval Date." See Annex V of Settlement Agreement.

¹⁴You may object to the Settlement but subsequently choose to participate in the Settlement and select the GPO. By participating in the GPO, however, you are waiving your right to object in the future or appeal any aspect of the litigation, except the determination of your benefit award as described in Section 4.6(f) of the Settlement Agreement

¹⁵ "Subclass I" shall mean "all Class Members who have an unsatisfied claim with respect to an Inter-Op™ Shell arising out of (i) Hip APRS performed prior to the date that is the earlier of the Final Judicial Approval Date and (x) June 5, 2003 with respect to an Inter-Op™ Shell (other than a Reprocessed Inter-Op™ Shell) or (y) September 8, 2004 with respect to a Reprocessed Inter-Op™ Shell and/or (ii) facts that exist prior to the date that is the earlier of the Final Judicial Approval Date and (x) June 5, 2003 with respect to an Inter-Op™ Shell (other than a Reprocessed Inter-Op™ Shell) or (y) September 8, 2004 with respect to a Reprocessed Inter-Op™ Shell, that may be a basis for such Class Member to receive benefits under the Extraordinary Injury Fund."

¹⁶"Subclass II" shall mean "all Class Members who have an unsatisfied claim with respect to an Inter-Op™ Shell (other than a Reprocessed Inter-Op™ Shell) arising out of (i) implantation of an Inter-Op™ Shell (other than a Reprocessed Inter-Op™ Shell), (ii) Hip APRS performed on or after the Final Judicial Approval Date but prior to June 5, 2003 and/or (iii) facts that exist on or after the Final Judicial Approval Date but prior to June 5, 2003 that may be a basis for such Class Member to receive benefits under the Extraordinary Injury Fund."

¹⁷"Subclass III shall mean "all Class Members who have an unsatisfied claim with respect to a Tibial Baseplate arising out of (i) Knee APRS performed prior to the date that is the earlier of the Final Judicial Approval Date and November 17, 2003 and/or (ii) facts that exist prior to the date that is the earlier of the Final Judicial Approval Date and November 17, 2003 that may be a basis for such Class Member to receive benefits under the Extraordinary Injury Fund."

¹⁸"Subclass IV" shall mean "all Class Members who have an unsatisfied claim with respect to a Tibial Baseplate arising out of (i) implantation of a Tibial Baseplate, (ii) Knee APRS performed on or after the Final Judicial Approval Date but prior to November 17, 2003 and/or (iii) facts that exist on or after the Final Judicial Approval Date but prior to November 17, 2003 that may be a basis for such Class Member to receive benefits under the Extraordinary Injury Fund."

¹⁹"Subclass V" shall mean "all Class Members who have an unsatisfied claim with respect to a Reprocessed Inter-Op™ Shell arising out of (i) implantation of a Reprocessed Inter-Op™ Shell, (ii) Hip APRS performed on or after the Final Judicial Approval Date but prior to September 8, 2004 and/or (iii) facts that exist on or after the Final Judicial Approval Date but prior to September 8, 2004 that may be the basis for such Class Member to receive benefits under the Extraordinary Injury Fund.

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