Exhibit 10.55

ARTHROCARE CORPORATION

2006 DIRECTOR COMPENSATION

Effective 04/01/06

Cash Compensation and Fees

 

Annual Retainer: Member of Board of Directors

   $ 15,000

Annual Retainer

  

Lead Director

   $ 30,000

Audit Chair

   $ 30,000

Compensation Chair

   $ 25,000

Nom/Governance Chair

   $ 20,000

Audit Committee Member

   $ 2,500

Board Meeting Fees

  

Board meetings in person

   $ 2,000

Board telephonic (< 2 hours)

   $ 500

Board telephonic (> 2 hours)

   $ 1,000

Committee Meeting Fees*

 

In conjunction with an in person board meeting

     no fee

Telephonic**

   $  500 per hour

Stock Ownership and Equity Compensation

 

  1. Guideline: All Directors will be encouraged to own ArthroCare stock valued
at five times the base annual cash retainer ($15,000 effective 4/1/06) within
four years of their election to the board.

 

  2. Initial Equity Grant: Upon election to the Board, a new director will
receive 25,000 stock appreciation rights and $75,000 worth of restricted stock
units, the exact number of which is determinable based on the closing price of
the Company’s common stock on the date prior to grant.

 

  3. Annual Equity Grant: Upon annual reelection to the Board, each director
will receive 10,000 stock appreciation rights and 1,500 restricted stock units.

* Committee Chair is responsible for annual committee meeting budget and
advising CFO when meetings that warrant fees have been held.

** Telephonic meetings that are short (less than a half hour), should be added
together with another similar length meeting to constitute one meeting of an
hour in length. Meetings, such as Audit, which often run two hours or more, will
be billed at $500 per hour, with only extra half hours accrued towards the next
meeting.