January 26, 1999
 
 
Dear John:
 
On behalf of ArthroCare Corporation (the "Company"), I am pleased to
offer you a promotion to Vice President, Sales and Marketing.  In this
position, you will be expected to devote your full business time,
attention, and energies to the performance of your duties with the
Company.  The effective date of your employment will be February 3,
1999, and you will be reporting directly to me.
 
The terms of this offer of employment are as follows:
 
1. Compensation:  Your annual salary will be $140,000.00.  The
Company will pay you $5,384.62 bi-weekly in accordance with the
Company's standard payroll policies.  Your salary will begin as of
the effective date of employment.  The first and last payment by
the Company to you will be adjusted, if necessary, to reflect a
commencement or termination date other than the first or last
working day of a pay period.  You will also be eligible for
participation in an incentive/bonus plan which will be based on
meeting agreed upon individual goals and objectives as well as the
overall Company's performance to plan.  (Last year, the vice
president level bonus was approximately 30% of annual salary.)
 
2.      Benefits:  You will be entitled, during the term of your
employment, to the Company's standard vacation and benefits
covering employees, as such may be in effect from time to time.
 
3.  Stock Options:  Subject to action at the Company's next Board of
Directors Compensation Committee meeting and compliance with
applicable state and federal securities laws, the Company will
grant you an option to purchase an additional 30,000 shares of the
Company's Common Stock pursuant to the Company's 1993 Stock Plan
(the "Plan"), a copy of which will be provided to you.  The
exercise price of the option will be the fair market value of the
Company's Common Stock on the date of acceptance of this offer.
The option will vest over four years with 1/48 of the shares
vesting at the end of each full month after the effective date of
your employment until all shares are vested, subject to all
provisions of the Plan and your continued employment with the
Company.
 
 
 
 
 
 
 
 John R. Tighe
 January 26, 1999
 Page 2 of 3
 
4.  Restricted Stock Award:  Subject to action at the Company's next
Board of Directors Compensation Committee meeting and in
compliance with applicable state and federal securities laws, the
Company will grant you restricted stock in the amount of 4,000
shares of the Company's Common Stock.  These Shares are restricted
pursuant to SEC regulations as well as a vesting schedule by the
Company.  Such vesting schedule is 25% per year beginning February
3, 2000.  Therefore, said Shares become available to you as
follows:  1,000 on February 3, 2000; 1,000 on February 3, 2001;
1,000 on February 3, 2002; and 1,000 on February 3, 2003.  This
vesting is subject to continued employment with the Company and
not subject to proration should termination occur between vesting
periods.  The grant date and pricing date is effective January 29,
1999.
 
5.      Relocation Expenses:  At ArthroCare's election, we will either
engage a relocation company or we'll pay you a lump sum payment to
cover the reasonable and customary expenses associated with (i)
you and your family's move from Maryland to the Bay Area; (ii)
house hunting trip(s); (iii) relocation of family, car, and
household goods, including travel; (iv) temporary living expenses
in the Bay Area; and (v) federal and state taxes related to the
relocation.
 
6. Housing Assistance Loan:  In the event you purchase a home in the
Bay Area, the Company will agree to lend you $300,000.00 (the
"Relocation Loan")  provided that you obtain a first mortgage
that permits a second mortgage to be placed against the residence
at the close of escrow.  The $300,000.00 loan will be secured by a
second mortgage interest in the purchased home and will bear
interest at the minimum applicable federal rate; provided,
however, in the event that if the Relocation Loan can be
structured as an "employee relocation loan" (as that term is
defined under Treasury Regulations), the loan will be interest
free. *
 
7.      Relocation Loan Repayment: The Relocation Loan (including any
accrued interest) will be due and payable upon the first to occur
of:
 
a)  following a sale of transfer of the property or any interest
therein;
 
b)  if you leave the employment of Company, the loan becomes
immediately payable;
 
8.      Change of Control Agreement:  As a term of this offer, we will
recommend to the Board of Directors that you be named as a vice
president of the organization as defined in the Company's Change
of Control Agreement.  The terms of this Agreement provide for a
24 month severance package and vesting of options should your
employment terminate involuntarily, subject to a change of
control.
 
 
 
John R. Tighe
January 26, 1999
Page 3 of 3
 
 
9.      At-Will Employment:  You should be aware that your employment with
the Company is for no specified period and constitutes "at-will"
employment.  As a result, you are free to terminate your
employment at any time, for any reason or for no reason.
Similarly, the Company is free to terminate your employment at any
time,  for any reason or for no reason.  In the event of
termination of your employment, you will not be entitled to any
payments, benefits, damages, awards, or compensation other than as
may otherwise be available in accordance with the Company's
established employee plans and policies at the time of
termination.
 
John, we look forward to you joining the Company.  If the foregoing
terms are agreeable, please indicate your acceptance by signing the
enclosed copy of this letter in the space provided below and returning
it to me.  This offer will terminate if not accepted on or before
January 29, 1998.
 
Sincerely yours,
 
ArthroCare Corporation
 
 
 
Michael A. Baker
President & CEO
 
ACCEPTED:
 
 
 
 
_______________________________         _______________________
John R. Tighe                                   Date
 
*  The loan amount reflected in the above paragraph entitled the
"Housing Assistance Loan" has been increased to $350,000.00 and is
subject to the same terms as outlined previously.