Document:

Exhibit
10.1

 

IN THE
UNITED STATES DISTRICT COURT

FOR THE
DISTRICT OF COLORADO

 

Civil Action No. 08-cv-02048-REB-KLM

 

(Consolidated with Civil Action No. 08-cv-02055-CMA-CBS,
08-cv-02078-MSK-BNB, 08-cv-02267-MSK-CBS, 08-cv-02420-PAB, 08-cv-02603-MSK-BNB)

 

In re SPECTRANETICS CORPORATION
SECURITIES LITIGATION

 

STIPULATION
OF SETTLEMENT

 

This
Stipulation of Settlement (the “Stipulation”), dated as of September 7,
2010, is made and entered into by and among the following parties to the above
entitled action, by and through their respective counsel of record:  (1) the Settling Class Action
Plaintiff (as defined below), on behalf of itself and each of the Settlement Class Members
(as defined below); and (2) the Settling Class Action Defendants (as
defined below), by and through their respective counsel of record in the Class Action
(as defined below).  The Settlement set
forth in this Stipulation (the “Settlement”) is intended by the Settling Class Action
Parties (as defined below) to fully, finally and forever resolve, discharge and
settle the Released Claims by Settling Class Action Parties (as defined
below) against the Released Parties (as defined below), upon and subject to the
terms and conditions hereof and subject to the approval of the United States
District Court for the District of Colorado pursuant to Rule 23 of the
Federal Rules of Civil Procedure.

 

 

I.                                       THE
LITIGATION.

 

A.                                    Background.

 

The
Spectranetics Corporation (“Spectranetics” or the “Company”) develops,
manufactures, markets, and distributes single-use fiber-optic laser catheters
for use in minimally invasive surgical procedures to clear blocked arteries
within the body.  It has a range of laser
catheters that are used to treat peripheral arterial disease (“PAD”) by
removing stenoses and occlusions in the legs both above and below the
knee.  Spectranetics also has a range of
laser catheters used to clear blockages in and around the heart.

 

On
September 4, 2008, the FDA and the U.S. Immigration and Customs
Enforcement (“ICE”) executed a search warrant on Spectranetics.  The search warrant requested information in
four areas related to potential violations of FDA and immigration rules and
regulations including (i) the promotion, use, testing, marketing and sales
regarding certain of the company’s products for the treatment of in-stent
restenosis, payments made to medical personnel and an identified institution
for this application, (ii) the promotion, use, testing, experimentation,
delivery, marketing and sales of catheter guidewires and balloon catheters
manufactured by certain third parties outside of the United States, (iii) two
post-market studies completed during the period from 2002 to 2005 and payments
to medical personnel in connection with those studies and (iv) compensation
packages for certain of the company’s personnel.

 

On
December 29, 2009, the Company announced that it had reached a resolution
with the United States Department of Justice (DOJ) and the Office of 

 

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Inspector General (OIG) of
the United States Department of Health and Human Services regarding the federal
investigation which had commenced on September 4, 2008.  As part of the resolution, in December 2009
the Company entered into a Non-Prosecution Agreement with the DOJ, a civil
Settlement Agreement with the DOJ and the OIG, and a five-year Corporate
Integrity Agreement with the OIG.  There
were no criminal charges against the Company. 
As part of the Settlement Agreement, the Company also expressly denied
the contentions of the United States, except those specifically included in the
Non-Prosecution Agreement, and there was no admission of wrongdoing by the
Company.

 

B.                                    The
Class Actions.

 

On
or after September 23, 2008, six federal securities class action
complaints were filed against Spectranetics and various other defendants,
including John G. Schulte, Guy A. Childs, Emile J. Geisenheimer, Jonathan W.
McGuire, Donald Fletcher, and Craig M. Walker, M.D., in the United States
District Court for the District of Colorado (the “Court”), entitled Hancook
v. Spectranetics Corp., et al., Civil Case No. 08-cv-02048-REB-KLM, Donoghue
v. Spectranetics Corp., et al.,  Civil Case No. 08-cv-02055-REB-KLM, Dickson
v. Spectranetics Corp., et al., Civil Case No. 08-cv-02078, Jacobusse,
et al. v. Spectranetics Corp., et al., Civil Case No. 08-cv-02267, Posner,
et al. v. Spectranetics Corp., et al., Civil Case No. 08-cv-02420, Genesee
County Employee’s Retirement System v. Spectranetics Corp, et al., Civil
Case No. 08-cv-02602.   These cases
alleged class periods either between April 19, 2007 and September 4,
2008 or April 26, 2005 and September 4, 2008.  Pursuant to a Court 

 

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Order dated January 16,
2009, these complaints were consolidated in this Court and captioned In re
Spectranetics Corporation Securities Litigation, Civil Case No. 08-cv-02048-REB-KLM  (the “Class Action”).

 

By
Court Order dated June 15, 2009, the Court appointed the Spectranetics
Investor Group — comprised of Genesee County Employees’ Retirement System, the
Wayne County Employees’ Retirement System, and Peter J. Tortora — as Lead
Plaintiff for the Class Action (hereinafter, “Settling Class Action
Plaintiff”), appointed Labaton Sucharow LLP and Brower Piven, a Professional Corporation
(“Brower Piven”) as Co-Lead Counsel (hereinafter, “Settling Class Action
Plaintiff’s Counsel”).

 

The
Settling Class Action Plaintiff filed a Consolidated Class Action
Complaint (the “Class Action Complaint”) on August 4, 2009.  The Class Action Complaint asserted
claims against Spectranetics and various individual defendants (collectively,
the “Settling Class Action Defendants”) for alleged violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934.  The Class Action Complaint sought
recovery for purchasers of Spectranetics common stock during the period between
March 16, 2007 and September 4, 2008, inclusive.  On September 18, 2009, Spectranetics and
the other defendants filed a Motion to Dismiss the Class Action Complaint,
which the Settling Class Action Plaintiff opposed.

 

The
Settling Class Action Plaintiff filed a Supplemental Class Action
Complaint, on February 10, 2010.  On
March 12, 2010, Spectranetics and the other defendants filed a
Supplemental Motion to Dismiss the Supplemental Class Action Complaint,
which the Settling Class Action Plaintiff opposed.

 

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The
settlement of the Class Action (as described below) has obviated the need
for any hearing or ruling on any Motion to Dismiss.

 

C.                                    The
Derivative Actions.

 

On
or after September 29, 2008, two derivative actions were filed in the
Court entitled Douglas A. Kopp v. Emile J. Geisenheimer, et al., Civil
Case No. 08-cv-02102-REB-MJW, and Peter Y. Kiama v. John Schulte, et
al., Civil Case No. 08-cv-02467-REB-CBS (the “District Court
Derivative Actions”).  On January 13,
2009, a derivative action was filed in the District Court, El Paso County,
Colorado, entitled Martin and Violet Clarke v. John Schulte, et al.,
Case No. 2009-CV-567.  On January 27,
2009, this derivative action was removed to the District Court and entitled Martin
and Violet Clarke v. John Schulte, et al., Civil Case No. 09-cv-00161-PAB-MJW
(the “Clarke Derivative Action”).  On February 6,
2009, the District Court issued an order consolidating the Clarke Derivative
Action and the District Court Derivative Actions (collectively, the “Derivative
Actions”) under the caption Douglas A. Kopp v. Emile J. Geisenheimer, et al.,
Civil Case No. 08-cv-02102-REB-MJW (the “Derivative Action”).

 

D.                                    Settlement
Negotiations And Mediation.

 

On
March 24 and 25, 2010, the Settling Class Action Parties (as defined
below), through their respective counsel, participated in a two-day mediation
session with the Honorable Nicholas H. Politan (Ret.).  The mediation involved extensive up-front
briefing of Judge Politan regarding the merits of the Class Action, as
well as in-depth discussions with Judge Politan of, among other things, the
Settling Class Action Parties’ respective claims and defenses, the motions
to dismiss filed in the Class Action, and

 

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other important factual and
legal issues and matters relating to the merits of the Class Action.  The Settling Class Action Parties did
not reach a settlement at the mediation, but through subsequent negotiations
and conferences, including additional discussions with Judge Politan, the
Settling Class Action Parties were able to reach an agreement in principle
providing for the settlement of the Class Action.

 

E.                                      Discovery, Investigation,
And Research Conducted By Plaintiff.

 

Settling
Class Action Plaintiffs’ Counsel 
have conducted a thorough investigation of the facts and legal issues
associated with the prosecution and Settlement of the Class Action.  This discovery and investigation has
included, inter alia, (1) a comprehensive review of the Company’s public
filings, annual reports, and other public statements; (2) research into
the applicable law with respect to the claims asserted in the Class Action
and the potential defenses thereto; (3) inspection of documents produced
by the Settling Class Action Defendants; (4) interviews with various
current and former Spectranetics employees; and (5) consultations with
experts.

 

II.                                   CLAIMS
OF THE SETTLING CLASS ACTION PLAINTIFF AND BENEFITS OF SETTLEMENT.

 

The
Settling Class Action Plaintiff believes that the claims asserted in the Class Action
have merit and that the evidence developed to date in the Class Action
supports the claims asserted.  The Settling
Class Action Plaintiff asserts and believes it would present supporting
evidence at trial that defendants caused the price of Spectranetics’ common
stock to be artificially inflated during the Settlement Class Period by
the issuance of materially false statements and by omitting to state material
information 

 

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concerning Spectranetics and
that, as a result, Settling Class Action Plaintiff and Settlement Class Members
were injured.

 

However,
Settling Class Action Plaintiff’s Counsel recognizes and acknowledges the
expense and length of continued proceedings, trial, and appeals.  Settling Class Action Plaintiff’s
Counsel also has taken into account the uncertain outcome and the risk of any
litigation, especially in complex actions such as the Class Action.  Settling Class Action Plaintiff’s
Counsel is also mindful of the inherent problems of proof under and defenses to
the federal securities law violations asserted in the Class Action,
including the defenses asserted by defendants during the litigation, in the
pending motion to dismiss the pleadings, in the settlement negotiations, and in
the mediation proceedings.

 

In
light of the foregoing, Settling Class Action Plaintiff’s Counsel believes
that the Settlement confers substantial benefits upon the Settlement Class (as
defined below) and Settlement Class Members.  Based on its evaluation, Settling Class Action
Plaintiff’s Counsel has determined that the Settlement is in the best interests
of the Settling Class Action Plaintiff and the Settlement Class Members.

 

III.                               SETTLING
CLASS ACTION DEFENDANTS’ STATEMENT AND DENIALS OF WRONGDOING AND
LIABILITY.

 

The
Settling Class Action Defendants have denied and continue to deny each and
all of the claims and contentions alleged by the Settling Class Action
Plaintiff on behalf of the Settlement Class Members.  The Settling Class Action Defendants
also have denied and continue to deny, inter alia, the allegations that the
prices of 

 

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Spectranetics stock were
artificially inflated by reasons of alleged misrepresentations, non-disclosures
or otherwise, or that the Settling Class Action Plaintiff or the
Settlement Class were harmed by the conduct alleged in the Class Action.  Settling Class Action Defendants believe
that throughout the Settlement Class Period (as defined below) they fully
and adequately disclosed all material facts regarding Spectranetics and made no
misrepresentations of material facts regarding Spectranetics.

 

Nonetheless,
the Settling Class Action Defendants have concluded that further conduct
of the Class Action would be protracted and expensive, and that it is
desirable that the Class Action be fully and finally settled in the manner
and upon the terms and conditions set forth in this Stipulation in order to
limit further expense, inconvenience and distraction, to dispose of the burden
of protracted litigation, and to permit the operation of the Company’s business
without further distraction and diversion of the Company’s executive personnel
with respect to matters at issue in the Class Action.  The Settling Class Action Defendants
also have taken into account the uncertainty and risks inherent in any
litigation, especially in complex cases like this litigation.

 

The
Settling Class Action Defendants have, therefore, determined that it is
desirable and beneficial to them that the Class Action be settled in the
manner and upon the terms and conditions set forth in this Stipulation.  The Settling Class Action Defendants
enter into this Stipulation and the Settlement without in any way admitting to
or acknowledging any fault, liability, or wrongdoing of any kind.  There has been no adverse determination by
any court against any of the Settling Class Action Defendants on the
merits of the claims asserted by the Settling Class Action Plaintiff.  Neither this 

 

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Stipulation, nor any of its
terms or provisions, nor any of the negotiations or proceedings connected with it,
shall be construed as an admission or concession by any of the Settling Class Action
Defendants of the merit or truth of any of the allegations or wrongdoing of any
kind on the part of any of the Settling Class Action Defendants.  The Settling Class Action Defendants
enter into this Stipulation and Settlement based upon, among other things, the
Settling Class Action Plaintiffs’ agreement herein that, to the fullest
extent permitted by law, neither this Stipulation nor any of the terms or
provisions, nor any of the negotiations or proceedings connected therewith,
shall be offered as evidence in the Class Action or in any pending or
future civil, criminal, or administrative action or other proceeding to
establish any liability or admission by any of the Settling Class Action
Defendants or any other matter adverse to any of the Settling Class Action
Defendants or any of their respective related entities, except as expressly set
forth herein.

 

IV.                              TERMS
OF STIPULATION AND AGREEMENT OF SETTLEMENT.

 

NOW,
THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Settling Class Action
Plaintiff (for itself and the Settlement Class Members), and the Settling Class Action
Defendants, by and through their respective counsel of record, that, subject to
the approval of the Court, the Class Action and the Released Claims by
Settling Class Action Parties (as defined below) shall be finally and
fully compromised, settled, and released, and the Class Action shall be
dismissed with prejudice, upon and subject to the terms and conditions of the
Stipulation, as follows:

 

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A.                                    Definitions.

 

As
used in the Stipulation, the following terms have the meanings specified below:

 

1.1.                              “Authorized
Claimant” shall mean any Settlement Class Member whose claim for recovery
has been allowed pursuant to the terms of the Stipulation.

 

1.2.                              “Claimant”
shall mean any Settlement Class Member who filed a Proof of Claim in such
form and manner, and within such time, as the Court shall prescribe.

 

1.3.                              “Claims
Administrator” shall mean Rust Consulting, Inc.

 

1.4.                              “Class Action”
shall mean the class actions that were consolidated in the case before the
United States District Court for the District of Colorado entitled In re
Spectranetics Corporation Securities Litigation, Civil Case No. 08-cv-02048-REB-KLM.

 

1.5.                              “Company” or “Spectranetics”
shall mean The Spectranetics Corporation, a Delaware corporation, and all of
its predecessors, successors, present and former parents, subsidiaries,
divisions, and related or affiliated entities.

 

1.6.                              “Derivative
Action” shall mean the derivative actions that were consolidated in the case
before the United States District Court for the District of Colorado entitled Douglas
A. Kopp v. Emile J. Geisenheimer, et al., Civil Case No. 08-cv-02102-REB-MJW.

 

1.7.                              “Effective Date”
shall mean the first date by which all of the events and conditions specified
in ¶ 10.2 of the Stipulation have been met and have occurred.

 

1.8.                              “Escrow Account”
shall mean the interest-bearing escrow account to which the Settlement
Consideration will be transferred pursuant to the terms of the Stipulation.

 

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1.9.                              “Escrow Agents”
shall mean Settling Class Action Plaintiff’s Counsel.

 

1.10.                                    “Final” shall
mean, with respect to the Judgment, that one of the following events has
occurred: (1) the time for appealing the Judgment has expired; (2) following
a final affirmance on appeal of the Judgment, the time to seek further
discretionary review (including, without limitation, from the United States
Supreme Court) has expired, or if discretionary review is allowed, such
discretionary review proceedings are subsequently dismissed with prejudice or
the Judgment is finally affirmed on discretionary review; or (3) following
a final dismissal of an appeal from the Judgment, the time to seek further
discretionary review (including, without limitation, from the United States
Supreme Court) has expired, or if discretionary review is allowed, such
discretionary review proceedings are subsequently dismissed with prejudice or
the dismissal being challenged is itself finally affirmed on discretionary
review.  Any proceeding or order, or any
appeal or petition for a writ of certiorari pertaining solely to any plan of
allocation and/or application for attorneys’ fees, costs or expenses, shall not
in any way delay or preclude the Judgment from becoming Final.

 

1.11.                                    “Individual
Defendants” shall mean Defendants Guy A. Childs, Emile J. Geisenheimer,
Jonathan W. McGuire, John G. Schulte, and Craig M. Walker, M.D., and any other
individual named as a defendant in the six lawsuits consolidated in the Class Action.

 

1.12.                                    “Judgment”
shall mean the judgment to be rendered by the Court dismissing the Class Action
with prejudice, substantially in the form and content attached hereto as Exhibit B.

 

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1.13.                                    “Notice” shall
mean the notice of pendency of class action and proposed settlement
substantially in the form and content attached hereto as Exhibit A-1.

 

1.14.                                    “Parties” shall
mean, collectively, each of the Settling Class Action Defendants and the Settling
Class Action Plaintiff on behalf of itself and the Settlement Class Members.

 

1.15.                                    “Person” shall
mean an individual, corporation (including all divisions and subsidiaries),
partnership, limited partnership, association, joint stock company, estate,
legal representative, trust, unincorporated association, government or any
political subdivision or agency thereof, and any business or legal entity and
their spouses, heirs, predecessors, successors, representatives, or assigns.

 

1.16.                                    “Plan of Allocation”
shall mean a plan or formula of allocation of the Settlement Consideration
which shall be described in the Notice to be sent to Settlement Class Members
in connection with the Settlement whereby the Settlement Consideration shall be
distributed to Authorized Claimants after payment of expenses of notice and
administration of the Settlement, any taxes, penalties or interest or tax
preparation fees owed by the Escrow Account 
and such attorneys’ fees, costs, expenses and interest as may be awarded
by the Court.  Any Plan of Allocation is
not part of the Stipulation.

 

1.17.                                    “Proof of Claim
and Release” shall mean the proof of claim and release substantially in the
form and content attached hereto as Exhibit A-2.

 

1.18.                                    “Released
Claims by Settling Class Action Defendants” means any and all claims,
causes of action, proceedings, obligations, suits, debts, damages (including 

 

12

 

interest,
attorneys’ fees, expert or consulting fees, and any other costs), demands,
agreements, promises, controversies or liabilities whatsoever whether based on
federal, state, local, statutory or common law or any other law, rule or
regulation, whether fixed or contingent, accrued or un-accrued, liquidated or
un-liquidated, at law or in equity, matured or un-matured, whether class or
individual in nature, direct or indirect, past, present or future which they
ever had, now have, claim to have or may in the future have or claim to have,
including both known claims and Unknown Claims, that have been or could have
been asserted in the Class Action by the Settling Class Action
Defendants against the Settling Class Action Plaintiff, the Settlement Class Members,
or the Settling Class Action Plaintiff’s Counsel, which arise out of or relate
in any way to the institution, prosecution, or settlement of the Class Action
(except for claims to enforce the Settlement).

 

1.19.                                    “Released
Claims by Settling Class Action Parties” shall mean the Released Claims By
Settling Class Action Plaintiff and the Released Claims by Settling Class Action
Defendants.

 

1.20.                                    “Released
Claims by Settling Class Action Plaintiff” means any and all claims,
causes of action, proceedings, obligations, suits, debts, damages (including
interest, attorneys’ fees, expert or consulting fees, and any other costs),
demands, agreements, promises, controversies or liabilities whatsoever whether
based on federal, state, local, statutory or common law or any other law, rule or
regulation, whether fixed or contingent, accrued or un-accrued, liquidated or
un-liquidated, at law or in equity, matured or un-matured, whether class or
individual in nature, direct or indirect, past, 

 

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present
or future which they ever had, now have, claim to have or may in the future
have or claim to have, including both known claims and Unknown Claims, (i) that
have been asserted in the Class Action by the Settling Class Action
Plaintiff against any of the Released  Class Action
Defendants, or (ii) that could have been asserted in any forum by the
Settling Class Action Plaintiff or any Settlement Class Member
against any of the Released  Class Action
Defendants which arise out of, are related to, or are based upon in any way,
either directly or indirectly, in part or in whole, any of the allegations,
transactions, facts, matters or occurrences, representations or omissions
involved, set forth, or referred to in the Class Action, the Consolidated Class Action
Complaint, the Supplemental Consolidated Class Action Complaint, and the
six federal securities class action complaints. 
The Released Claims by Settling Class Action Plaintiff does not
include the claims asserted in the Derivative Action.

 

1.21.                                    “Released Class Action
Defendants” shall mean each and every one of the following:  the Settling Class Action Defendants
and, whether or not identified in any complaint filed in the Class Action,
each and all of every Settling Class Action Defendant’s past and present
directors, officers and employees, controlling stockholders, partners, members,
affiliates, principals, agents, representatives, stockholders, predecessors,
successors, parents, subsidiaries, divisions, joint ventures, attorneys,
investment bankers, commercial bankers, underwriters, financial or investment
advisors, advisors, consultants, accountants, insurers, co-insurers and
reinsurers, assigns, spouses, heirs, assigns, executors, personal
representatives, marital communities, associates, related or affiliated
entities, general or limited partners 

 

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or
partnerships, limited liability companies, member firms, estates,
administrators, or any members of their immediate families, or any trusts for
which any of them are trustees, settlers or beneficiaries, or any persons or
other entities in which any Released Class Action Defendant has a
controlling interest or which is related to or affiliated with any Released Class Action
Defendant, and any other representatives of any of these Persons or other entities,
whether or not any such Released Class Action Defendants were named,
served with process or appeared in the Class Action.

 

1.22.                                    “Settling Class Action
Defendants” shall mean Defendants Spectranetics and the Individual Defendants.

 

1.23.                                    “Settling Class Action
Defendants’ Counsel” shall mean Katten Muchin Rosenman LLP and Winston &
Strawn LLP.

 

1.24.                                    “Settling Class Action
Plaintiff” means Lead Plaintiff, the Spectranetics Investor Group, comprised of
Genesee County Employee’s Retirement System, the Wayne County Employee’s
Retirement System, and Peter J. Tortora.

 

1.25.                                    “Settling Class Action
Plaintiff’s Counsel” shall mean Co-Lead Counsel for the Lead Plaintiff, Labaton
Sucharow LLP and Brower Piven.

 

1.26.                                    “Settlement
Class” shall mean all persons or entities that purchased or otherwise acquired
the publicly traded common stock of Spectranetics during the Settlement Class Period.  Excluded from the Settlement Class shall
be the Settling Class Action Defendants and their corporate affiliates;
any officers or directors of Spectranetics; or members of their immediate
families, and their heirs, successors and assigns.  Also excluded from the Settlement Class upon
the Effective Date shall be 

 

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those
Persons who validly and timely request exclusion from the Settlement Class in
accordance with the provisions of the Notice Order and the Notice given
pursuant thereto.

 

1.27.                                    “Settlement Class Members”
or “Member of the Settlement Class” shall mean a person who falls within the
definition of Settlement Class as set forth in ¶ 1.26 above.

 

1.28.                                    “Settlement Class Period”
shall mean the period from March 16, 2007 to September 4, 2008,
inclusive.

 

1.29.                                    “Settlement
Consideration” shall mean the principal amount of $8.5 million in cash, for and
on behalf of the Settlement Class, less the costs, fees, and assessments
provided for in the Stipulation, plus interest earned or accrued thereon.

 

1.30.                                    “Settling Class Action
Parties” shall mean Settling Class Action Plaintiff, on behalf of itself
and each of the Settlement Class Members, and Settling Class Action
Defendants.

 

1.31.                                    “Spectranetics’
Insurance Carriers” shall mean U.S. Specialty Insurance Company, Hudson
Insurance Company, and Carolina Casualty Insurance Company.

 

1.32.                                    “Unknown Claims”
shall mean any Released Claims by Settling Class Action Plaintiff which
the Settling Class Action Plaintiff or any Settlement Class Member
does not know or suspect to exist in his, her or its favor at the time of the
release of the Released Class Action Defendants which, if known by him,
her or it, might have affected his, her or its settlement with and release of
the Released Class Action Defendants, or might have affected his, her or
its decision not to object to, or opt out of, this Settlement.  

 

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With
respect to any and all Released Claims by Settling Class Action Plaintiff,
the Settling Class Action Parties stipulate and agree that, upon the
Effective Date, the Settling Class Action Plaintiff expressly waives and
relinquishes, and the Settlement Class Members shall be deemed to have,
and by operation of the Judgment shall have expressly waived and relinquished,
to the fullest extent permitted by law, the provisions, rights, and benefits of
§ 1542 of the California Civil Code, which provides:

 

A general release does not
extend to claims which the creditor does not know or suspect to 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.

 

The Settling Class Action
Plaintiff expressly waives and the Settlement Class Members shall be
deemed to have waived, and upon the Effective Date and by operation of the
Judgment shall have waived any and all provisions, rights and benefits
conferred by any law of the United States or of any state or territory of the
United States, or principle of common law, which is similar, comparable or
equivalent to § 1542 of the California Civil Code.  The Settling Class Action Plaintiff and
the Settlement Class Members may hereafter discover facts in addition to
or different from those which he, she or it now knows or believes to be true
with respect to the subject matter of the Released Claims By Settling Class Action
Plaintiff, but each of them hereby stipulate and agree that the Settling Class Action
Plaintiff does settle and release, and each Settlement Class Member shall
be deemed to have, and upon the Effective Date and by operation of the Judgment
shall have, fully, finally, and forever settled and released any and all
Released Claims by Settling Class Action Plaintiff, known or unknown,
suspected or 

 

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unsuspected, contingent or
non-contingent, whether or not concealed or hidden, which now exist, or
heretofore have existed upon any theory of law or equity now existing or coming
into existence in the future, including, but not limited to, all Released
Claims by Settling Class Action Plaintiff without regard to the subsequent
discovery or existence of such different or additional facts.  The Settling Class Action Parties
acknowledge that the foregoing waiver was bargained for and a key element of
the Settlement of which this release is a part.

 

B.                                    The
Settlement Consideration.

 

In
full and final settlement of all claims asserted or referred to in the Class Action,
and all claims that have been and could be asserted by Settling Class Action
Plaintiff and the Settlement Class Members against the Settling Class Action
Defendants in the Class Action, the Settling Class Action Defendants
agree to the following:

 

2.1.                              Spectranetics
shall cause $8.5 million in cash to be wire transferred and/or mailed overnight
into an interest-bearing escrow account (the “Escrow Account”) for the benefit
of the Settling Class Members and with all interest to accrue for the
benefit of the Settlement Class Members within twenty (20) business days
from the later of (1) preliminary approval of the Settlement of the Class Action
as reflected by this Stipulation; (2) Settling Class Action
Defendants’ Counsel’s receipt of a W-9 from the payee to whom the Settlement
Consideration shall be paid; and (3) Settling Class Action Defendants’
Counsel’s receipt of wire transfer information from the payee to whom the
Settlement Consideration shall be paid.

 

2.2.                              The reasonable
and necessary costs of administration, notice to Settlement 

 

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Class Members,
and taxes shall be paid out of the Settlement Consideration without further
order of the Court.  Settling Class Action
Defendants’ Counsel and Settling Class Action Plaintiff’s Counsel shall
cooperate to ensure prompt payment of expenditures from escrowed funds to
provide notice to the Members of the Settlement Class and/or to otherwise
process the administration of the Settlement.

 

2.3.                              In the event
the Stipulation does not become effective, or the Judgment does not become
Final, as that term is defined in ¶ 1.10 above, all monies held in the Escrow
Account (less amounts necessary to pay costs, as documented in ¶ 2.2
above) shall be returned to Spectranetics’ Insurance Carriers within fourteen
(14) business days in a manner and in the amounts designated by Spectranetics
at such time.  Settling Class Action
Plaintiff, the Settlement Class Members, and Settling Class Action
Plaintiff’s Counsel shall have no responsibility for the costs described in
¶ 2.2 above.

 

2.4.                              Upon the
Judgment becoming Final, the Settlement Consideration shall be released for the
benefit of the Settlement Class Members pursuant to the terms of this
Stipulation.  This Settlement is not a “claims
made” settlement, and, if all conditions under this Stipulation are satisfied
and the Judgment becomes Final, no portion of the Settlement Consideration will
be returned to the Settling Class Action Defendants or Spectranetics’
Insurance Carriers.

 

C.                                    Administration
Of The Settlement Consideration.

 

i.                                         The
Escrow Agents.

 

3.1.                              The Escrow
Agents shall invest the Settlement Consideration in instruments backed by the
full faith and credit of the United States Government or fully insured by 

 

19

 

the
United States Government or an agency thereof and shall reinvest the proceeds
of these instruments as they mature in similar instruments at the current
market rates.

 

3.2.                              The Escrow
Agents shall not disburse the Settlement Consideration except as provided in
the Stipulation, or by an order of the Court, (provided said order is
consistent with the terms of the Stipulation) or with the written agreement of
Settling Class Action Plaintiff’s Counsel and Settling Class Action
Defendants’ Counsel.

 

3.3.                              Subject to such
further order and direction by the Court as may be necessary, the Escrow Agents
are authorized to execute such transactions on behalf of the Settlement Class Members
as are consistent with the terms of the Stipulation.

 

3.4.                              All funds held
by the Escrow Agents shall be deemed and considered to be in custodia legis of
the Court, and shall remain subject to the jurisdiction of the Court, until
such time as such funds shall be distributed pursuant to the Stipulation and/or
further order(s) of the Court consistent with the terms of the
Stipulation.

 

3.5.                              All costs and
expenses associated with the Settlement, including but not limited to any
taxes, administrative costs, and costs of providing notice of the proposed
Settlement to the Settlement Class Members, shall be paid from the
Settlement Consideration in the Escrow Account, and in no event shall any of
the Settling Class Action Defendants, Settling Class Action
Plaintiff, Settlement Class Members, or their counsel bear any
responsibility for any such costs or expenses.

 

ii.                                     Taxes.

 

3.6.                              The Settling Class Action
Parties and the Escrow Agents agree to treat the Settlement Consideration as
being at all times a “qualified settlement fund” within the 

 

20

 

meaning
of Treas. Reg. Section 1.468B-1.  In
addition, the Escrow Agents and, as required, Spectranetics and Spectranetics’
Insurance Carriers shall jointly and timely make the “relation-back election”
(as defined in Treas. Reg. Section 1.468B-1) back to the earliest
permitted date.  Such election shall be
made in compliance with the procedures and requirements contained in such
regulations.  It shall be the
responsibility of the Escrow Agents to timely and properly prepare, and deliver
the necessary documentation for signature by all necessary parties, and
thereafter to cause the appropriate filing to occur.

 

3.7.                              For the purposes
of Section 468B of the Internal Revenue Code of 1986, and Treas. Reg. Section 1.468B,
the “administrator” shall be the Escrow Agents. 
The Escrow Agents shall timely and properly file all informational and
other tax returns necessary or advisable with respect to the Settlement
Consideration (including, without limitation, the returns described in Treas.
Reg. Section 1.468B-2(1)).  Such
returns (as well as the election described in ¶ 3.6 shall be consistent
with this ¶ 3.7 and in all events shall reflect that all taxes (including
any estimated taxes, interest or penalties) on the income earned by the
Settlement Consideration shall be paid out of the Settlement Consideration as
provided in ¶ 3.8 hereof.

 

3.8.                              All (i) taxes
(including any estimated taxes, interest or penalties) arising with respect to
the income earned by the Settlement Consideration (“Taxes”), and (ii) expenses
and costs incurred in connection with the operation and implementation of ¶ 3.6-3.8
(including, without limitation, expenses of tax attorneys and/or accountants
and mailing and distribution costs and expenses relating to filing (or failing
to file) the 

 

21

 

 

returns
described in  ¶ 3.7) (“Tax Expenses”),
shall be paid out of the Settlement Consideration; in all events the Released Class
Action Defendants shall not have any liability or responsibility for the Taxes,
the Tax Expenses, or the filing of any tax returns or other documents with the
Internal Revenue Service or any other state or local taxing authority.  The Escrow Agents shall indemnify and hold
the Released Class Action Parties harmless for Taxes and Tax Expenses
(including, without limitation, Taxes payable by reason of any such
indemnification).  Further, Taxes and Tax
Expenses shall be treated as, and considered to be, a cost of administration of
the Settlement and shall be timely paid by the Escrow Agents out of the
Settlement Consideration without prior order from the Court, and the Escrow
Agents shall be obligated (notwithstanding anything herein to the contrary) to
withhold from distribution to Authorized Claimants any funds necessary to pay
such amounts (as well as any amounts that may be required to be withheld under
Treas. Reg. Section 1.468B-2(1)(2)); the Released Class Action
Defendants are not responsible and shall have no liability therefor, or for any
reporting requirements that may relate thereto. 
The Settling Class Action Parties hereto agree to cooperate with
the Escrow Agents, each other, and their tax attorneys and accountants to the
extent reasonably necessary to carry out the provisions of ¶ 3.6-3.8.

 

D.                                    Certification
of the Settlement Class.

 

4.1.                              For the sole
purpose of implementation, approval and consummation of the Settlement, the
Settling Class Action Parties stipulate and agree that the Court may enter
an order certifying the Settlement Class, and appointing the Settling Class Action
Plaintiff as the representative of the Settlement Class and Settling Class Action

 

22

 

Plaintiff’s
Counsel as counsel for the Settlement Class.

 

4.2.                              Certification
of the Settlement Class and appointment of Settling Class Action
Plaintiff as representative of the Settlement Class and Settling  Class Action Plaintiff’s Counsel as
counsel for the Settlement Class, as set forth herein, shall be binding only
with respect to the Settlement set forth in the Stipulation.  In the event that this Stipulation is
terminated or cancelled or that the Effective Date does not occur for any
reason, the stipulated certification of the Settlement Class shall be
vacated and the Class Action shall proceed as though the Settlement Class had
never been certified.  Except to
effectuate the Settlement, neither the Settling Class Action Parties nor their
respective counsel shall cite, present as evidence or legal precedent, rely
upon, make reference to or otherwise make any use whatsoever of this stipulated
certification of the Settlement Class, in this Class Action or in any
other proceeding.

 

E.                                      Notice
Order And Settlement Hearing.

 

5.1.                              Promptly after
execution of the Stipulation, but in no event later than ten (10) days
after the Stipulation is signed (unless such time is extended by the written
agreement of Settling Class Action Plaintiff’s Counsel and Settling Class Action
Defendants’ Counsel), the Settling Class Action Parties shall submit the
Stipulation together with its Exhibits to the Court and shall jointly apply for
entry of an order (the “Notice Order”), substantially in the form and content
of Exhibit A hereto, requesting certification of the Settlement Class,
preliminary approval of the Settlement, and approval for the mailing and
publication of a Notice of Pendency and Proposed Settlement of Class Action
(substantially in the form and content of Exhibit A-1 hereto), 

 

23

 

which
shall include the general terms of the Settlement set forth in this
Stipulation, the proposed Plan of Allocation, the general relief intended to be
sought through the Fee and Expense Application (as defined in ¶ 9.1), and
the date of the Settlement Hearing (as defined below in ¶ 5.2).

 

5.2.                              The Settling Class Action
Parties shall request that, after notice is given, the Court hold a Hearing
(the “Settlement Hearing”) and finally approve this Settlement as set forth
herein.  At or after the Settlement
Hearing, Settling Class Action Plaintiff’s Counsel also will request that
the Court approve the proposed Plan of Allocation and the Fee and Expense
Application.

 

F.                                      Entry
of Judgment and Discharge of All Contribution Claims.

 

6.1.                              The Settling Class Action
Parties agree to the entry of Judgment substantially in the form and content of
Exhibit B.

 

6.2.                              The Judgment
proposed to the Court shall include a bar order stating the following:  In accordance with 15 U.S.C. §
78u-4(f)(7)(A), any and all claims for contribution, equitable indemnification,
or subrogation arising out of any the Released Claims by the Settling Class Action
Plaintiff are hereby permanently barred, extinguished, discharged, satisfied,
and unenforceable.  Accordingly, without
limitation to any of the above, any Person is hereby permanently enjoined from
commencing, prosecuting, or asserting against any of the Settling Class Action
Defendants any such claim, and each and every Settling Class Action
Defendant is hereby permanently enjoined from commencing, prosecuting, or
asserting any such claim against any Person. 
For the avoidance of doubt, other than those claims arising out of the 

 

24

 

prosecution
of the Class Action which are released herein, nothing contained herein
shall affect the direct claims for contribution, equitable indemnification or
subrogation between or among Spectranetics and the Individual Defendants in
connection with the investigation by the United States Attorney’s Office for
the District of Colorado, the United States Food & Drug
Administration, and the United States Immigration & Customs
Enforcement, or any direct claims between or among Spectranetics and the
Individual Defendants including, by way of example, claims under any applicable
indemnity agreement or undertaking agreement, or claims for  breach of fiduciary duty, wrongful
termination, breach of contract, tortious interference with contract, or
infliction of emotional distress. 
Nothing in the Stipulation nor the fact that the Stipulation has been
executed shall be construed as an admission or concession by any party
regarding the proper interpretation of any applicable indemnity agreement.

 

G.                                    Releases.

 

7.1.                              Upon the
Effective Date, the Settling Class Action Plaintiff shall release,
relinquish and discharge, and each of the Settlement Class Members shall
be deemed to have, and by operation of the Judgment shall have, fully, finally,
and forever released, relinquished and discharged each and all of the Released Class Action
Defendants from the Released Claims by Settling Class Action
Plaintiff.  For the avoidance of doubt,
potential Settlement Class Members who validly and timely request
exclusion from the Settlement Class in accordance with the provisions of
the Notice Order and the Notice shall not be deemed to have released all of the
Released Class Action Defendants from the Released Claims by Settling Class Action
Plaintiff.

 

25

 

7.2.                              Upon the
Effective Date, each of the Settling Class Action Defendants shall be
deemed to have, and by operation of the Judgment shall have, fully, finally,
and forever released, relinquished and discharged the Settling Class Action
Plaintiff, the Settlement Class Members (other than those Settlement Class Members
who validly and timely request exclusion from this Settlement Class in
accordance with the provisions of the Notice Order and the Notice given
pursuant thereto), and the Settling Class Action Plaintiff’s Counsel from
the Released Claims by Settling Class Action Defendants.

 

7.3.                              Claims for
violation of this Stipulation (including any exhibits) are preserved and are
neither intended to be nor are barred by operation of any aspect of the MOU,
this Stipulation or the Settlement.

 

7.4.                              Except as
otherwise expressly provided for in this Stipulation, by Delaware law, or in any
applicable indemnity agreement, undertaking agreement, bylaw provision or
certificate of incorporation provision, the Settling Class Action Parties
shall each bear their own respective attorneys’ fees, expenses and costs
incurred in connection with the conduct and settlement of the Class Action,
and the preparation, implementation and performance of the terms of this
Stipulation.

 

7.5.                              Only those
Settlement Class Members filing a valid and timely Proof of Claim and
Release shall be entitled to participate in the Settlement and receive any
distributions from the Settlement Consideration.  The Proof of Claim and Release to be executed
by the Settlement Class Members shall release all Released Claims by
Settling Class Action Plaintiff against the Released Class Action
Defendants, and shall 

 

26

 

be
substantially in the form and content of Exhibit A-2 hereto.  All Settlement Class Members shall be
bound by the releases set forth herein and therein whether or not they submit a
valid and timely Proof of Claim and Release.

 

H.                                    Administration
And Calculation Of Claims, Final Awards And Supervision And Distribution Of
Settlement Consideration.

 

8.1.                              Settling Class Action
Plaintiff’s Counsel, or its authorized agents, acting on behalf of the
Settlement Class shall formulate a Plan of Allocation of the Settlement
Consideration to the Settlement Class Members, subject to the approval of
the Court.  The Claims Administrator,
subject to the supervision, direction and approval of the Court, shall
administer and calculate the claims submitted by Settlement Class Members,
and shall oversee distribution of that portion of the Settlement Consideration
that is finally awarded by the Court to Authorized Claimants.  The Settling Class Action Parties
expressly agree that any change, modification, or alteration to the Plan of
Allocation by the Court shall not be grounds for termination of the Settlement.

 

8.2.                              The Settlement
Consideration shall be applied as follows:

 

(a)                                  To pay all unpaid
costs and expenses reasonably and actually incurred in providing notice to the
Settlement Class Members including, locating Settlement Class Members,
soliciting Settlement Class Members claims, assisting with the filing of
such claims, administering and distributing the Settlement Consideration to the
Settlement Class Members, processing each Proof of Claim and Release, and
paying escrow fees and costs, if any;

 

(b)                                 To pay Taxes
and Tax Expenses;

 

27

 

(c)                                  To pay Settling
Class Action Plaintiff’s Counsel’s attorneys’ fees, expenses and costs,
with interest thereon, if and to the extent allowed by the Court;

 

(d)                                 To distribute,
following the Effective Date, the balance of the Settlement Consideration to
Authorized Claimants as allowed by the Court.

 

8.3.                              After the
Effective Date and subject to such further approval and further order(s) of
the Court as may be required, the Settlement Consideration shall be distributed
to Authorized Claimants, subject to and in accordance with the following:

 

(a)                                  Within ninety
(90) days after the mailing of the Notice or such other time as may be set by
the Court, each Person claiming to be an Authorized Claimant shall be required
to submit to the Claims Administrator a separate completed Proof of Claim and
Release included with the Notice and substantially in the form and content of Exhibit A-2
hereto, signed under penalty of perjury and supported by such documents as
specified in the Proof of Claim and Release and as are reasonably available to
the Authorized Claimant.

 

(b)                                 Except as
otherwise ordered by the Court, all Settlement Class Members who fail to
timely submit a valid Proof of Claim and Release within such period, or such
other period as may be ordered by the Court, or who have not already done so,
shall be forever barred from receiving any payments of money pursuant to the
Stipulation and the Settlement set forth herein, but will in all other respects
be subject to and bound by the provisions of the Stipulation, the Settlement
and releases contained herein, and the Judgment.

 

28

 

(c)                                  The Settlement
Consideration shall be distributed to the Authorized Claimants in accordance
with and subject to the Plan of Allocation to be described in the Notice mailed
to Settlement Class Members.  The
proposed Plan of Allocation shall not be a part of the Stipulation.

 

8.4.                              The Settling Class Action
Defendants and Settling Class Action Defendants’ Counsel shall have no
responsibility for, interest in, or liability whatsoever with respect to: (a) the
investment or distribution of the Settlement Consideration; (b) the Plan
of Allocation or any other act described in this ¶ 8 or any of its
subparagraphs; (c) the determination or administration of taxes; or (d) any
losses incurred in connection with (a), (b) or (c).  No Person shall have any claim of any kind
against the Released Class Action Defendants with respect to the matters
set forth in this ¶ 8 or any of its subparagraphs.

 

8.5.                              No Person shall
have any claim against the Settling Class Action Plaintiff or Settling Class Action
Plaintiff’s Counsel, or any Claims Administrator, or other agent designated by
Settling Class Action Plaintiff’s Counsel based on the distributions made
substantially in accordance with the Stipulation and the Settlement contained
herein, the Plan of Allocation or further orders of the Court.

 

8.6.                              It is
understood and agreed by the Settling Class Action Parties that any
proposed Plan of Allocation of the Settlement Consideration, including, without
limitation, any adjustments to an Authorized Claimant’s claim set forth
therein, is not a material part of the Stipulation and the Settling Class Action
Parties request that it be considered by the Court separately from the Court’s
consideration of the fairness, 

 

29

 

reasonableness
and adequacy of the Settlement set forth in the Stipulation, and request that
any order or proceedings relating to the Plan of Allocation shall not operate
to terminate or cancel the Stipulation or affect the finality of the Court’s
Judgment approving the Stipulation and the Settlement set forth herein,
including, but not limited to, the release, discharge, and relinquishment of
the Released Claims by Settling Class Action Plaintiff against the
Released Class Action Defendants, or any other orders entered pursuant to
the Stipulation.

 

I.                                         Settling
Class Action Plaintiff’s Counsel’s Attorneys’ Fees And Reimbursement Of
Expenses.

 

9.1.                              The Settling Class Action
Plaintiff or its counsel may submit an application or applications for an order
(the “Fee and Expense Application”) for distributions to them from the
Settlement Consideration for: (i) an award of attorneys’ fees plus (ii) reimbursement
of all expenses and costs, including the fees of any experts or consultants,
incurred in connection with prosecuting the Class Action, and (iii) interest
on such attorneys’ fees, costs and expenses at the same rate and for the same
periods as earned by the Settlement Consideration (until paid), as may be
awarded by the Court.

 

9.2.                              Within five (5) business
days after the Court executes an order awarding attorneys’ fees, expenses and
costs, including the fees of experts and consultants, (the “Fee and Expense
Award”), the Fee and Expense Award shall be transferred to Settling Class Action
Plaintiff’s Counsel from the Settlement Consideration.  In the event that the Stipulation and the
Settlement set forth herein does not become Final for any reason, or 

 

30

 

the
Judgment or the Order making the Fee and Expense Award is reversed or modified
on appeal, and in the event that the Fee and Expense Award has been paid to any
extent, then Settling Class Action Plaintiff’s Counsel shall within five (5) business
days from the event which precludes the Effective Date from occurring or such
reversal or modification, refund the fees, expenses, costs and interest
previously paid to it from the Settlement Consideration, including accrued interest
on any such amount at the average rate earned on the Settlement Consideration
from the time of withdrawal until the date of refund.  The Settling Class Action Plaintiff’s
Counsel, as a condition of receiving such fees and expenses, on behalf of
itself and each partner and/or shareholder of it, agrees that the law firm and
its partners and/or shareholders are subject to the jurisdiction of the Court
for the purpose of enforcing this ¶ 9.2 of the Stipulation.  Without limitation, Settling Class Action
Plaintiff’s Counsel’s law firms and their respective partners and/or
shareholders agree that the Court may, upon application of Settling Class Action
Defendants, on notice to Settling Class Action Plaintiff’s Counsel,
summarily issue orders, including, but not limited to, judgments and attachment
orders, and may make appropriate findings of or sanctions for contempt, against
Settling Class Action Plaintiff’s Counsel should Settling Class Action
Plaintiff’s Counsel fail to timely repay fees and expenses pursuant to this
¶ 9.2 of the Stipulation.

 

9.3.                              The Released Class Action
Defendants shall have no responsibility for, and no liability whatsoever with
respect to, any fee and expense award to Settling Class Action Plaintiff’s
Counsel, or to any other Person who may assert some claim thereto.

 

9.4.                              The procedure
for and the allowance or disallowance by the Court of the Fee 

 

31

 

 

and
Expense Application are not part of the Settlement set forth in the
Stipulation, and the Settling Class Action Parties request that they are
to be considered by the Court separately from the Court’s consideration of the
fairness, reasonableness and adequacy of the Settlement set forth in the
Stipulation.  The Settling Class Action
Parties request that any order or proceedings relating to the Fee and Expense
Application, or any appeal from any order relating thereto, shall not operate
to terminate or cancel the Stipulation, or affect or delay the finality of the
Judgment approving the Stipulation and the Settlement of the Class Action
set forth herein.

 

9.5.                              At their sole
discretion, Settling Class Action Plaintiff’s Counsel shall be authorized
by the Court to allocate the attorney’s fees among all counsel representing
Settling Class Action Plaintiff and the Settlement Class Members for
any work performed by such counsel that was authorized by Settling Class Action
Plaintiff’s Counsel and contributed to the effective litigation of the Class Action.

 

J.                                      Conditions
Of Settlement, Effect Of Disapproval, Cancellation Or Termination.

 

10.1.                                    This Settlement
shall be terminated in the event that any of the following occurs: (1) any
of the conditions set forth in ¶ 10.2 below are not satisfied; (2) the
Settling Class Action Defendants exercise their right to terminate the
Settlement pursuant to ¶ 10.3; (3) the Settlement does not become Final
for any reason; or (4) failure on the part of any of the Settling Class Action
Parties to abide, in any material respect, with the terms of the Stipulation.

 

10.2.                                    Unless
otherwise agreed by Settling Class Action Plaintiff’s Counsel and 

 

32

 

Settling
Class Action Defendants’ Counsel in writing, this Stipulation shall be
terminated in the event that any of the following conditions is not met:

 

(a)                                  The transfer
into the Escrow Account of the Settlement Consideration within twenty (20)
business days from the later of (1) preliminary approval of the Settlement
of the Class Action consistent with the terms of this Stipulation; (2) Settling
Class Action Defendants’ Counsel’s receipt of a W-9 from the payee to whom
the Settlement Cash shall be paid; and (3) Settling Class Action Defendants’
Counsel’s receipt of wire transfer information from the payee to whom the
Settlement Cash shall be paid.

 

(b)                                 The Court has
entered the Notice Order and certified the Settlement Class Members, as
required by ¶ 4 and ¶ 5, above;

 

(c)                                  Preliminary and
final approval of the Settlement consistent with the terms of this Stipulation,
independent of the Court’s determination of any award of attorneys’ fees and
expenses to the Settling Class Action Plaintiff’s Counsel;

 

(d)                                 Entry of
Judgment, substantially in the form and content of Exhibit B, by the U.S.
District Court for the District of Colorado;

 

(e)                                  Judgment has
become Final;

 

(f)                                    That the
Settlement is not otherwise terminated pursuant to the terms set forth in this
Stipulation.

 

10.3.                                    If prior to the
Settlement Hearing, Persons who otherwise would be Settlement Class Members
have filed with the Court valid and timely requests for exclusion (“Requests
for Exclusion”) from the Settlement Class in accordance with the 

 

33

 

provisions
of the Notice Order and the Notice given pursuant thereto, and such Persons
have purchased or otherwise acquired Spectranetics common stock in an amount
that equals or exceed the sum specified in a separate Supplemental Agreement between
Spectranetics and Settling Class Action Plaintiff (the “Supplemental
Agreement”), Spectranetics shall have the option to terminate this Stipulation
in accordance with the procedures set forth in the Supplemental Agreement.  The Supplemental Agreement will not be filed
with the Court unless and until a dispute among the Settling Class Action
Parties concerning its interpretation or application arises, but the Settling Class Action
Parties will file a statement identifying the existence of the Supplemental
Agreement pursuant to Federal Rule of Civil Procedure 23(e)(1)(c)(2), and
reference the Supplemental Agreement in the Notice.  Copies of all Requests for Exclusion
received, together with copies of all written revocations of Requests for
Exclusion, shall be delivered to Settling Class Action Defendants’ Counsel
within two (2) days of receipt thereof.

 

10.4.                                    Unless
otherwise ordered by the Court, in the event the Stipulation shall terminate,
or be canceled, or shall not become effective for any reason, within ten (10) business
days after written notification of such event is sent by Settling Class Action
Defendants’ Counsel or Settling Class Action Plaintiff’s Counsel to the
Escrow Agents: (1) the Settlement Consideration (including accrued
interest), less expenses and any costs which have been disbursed from or are
chargeable to the Settlement, and less any Taxes and Tax Expenses paid or
incurred pursuant to ¶ 3.8, shall be refunded by the Escrow Agents to
Spectranetics’ Insurance Carriers in a manner and in the amounts 

 

34

 

designated
by Spectranetics at such time.  In such
event, any tax refund owing to the Settlement Consideration shall also be
refunded and paid to Spectranetics’ Insurance Carriers.  At the request of Spectranetics or
Spectranetics’ Insurance Carriers, the Escrow Agents or their designee shall
apply for any such refund and pay the proceeds, less the cost of obtaining the
tax refund, to Spectranetics’ Insurance Carriers.

 

10.5.                                    In the event
that the Stipulation is not approved by the Court or the Settlement set forth
in the Stipulation is terminated or fails to become effective in accordance
with its terms, this Stipulation and all negotiations and proceedings relating
hereto shall be without prejudice to any or all Settling Class Action
Parties who shall be restored to their respective positions in the Class Action
as of September 7, 2010.  In such
event, the terms and provisions of the Stipulation, with the exception of
¶¶ [1.1-1.32, 3.1, 3.2, 3.4, 3.5, 3.6, 3.8, 4.1, 4.2, 8.4, 8.5, 9.2, 9.3,
10.1-10.8, 11.3, 11.4, and 11.8] herein, shall have no further force and effect
with respect to the Settling Class Action Parties and shall not be used in
the Class Action or in any other proceeding for any purpose and any
Judgment or Order entered by the Court in accordance with the terms of the
Stipulation shall be treated as vacated, nunc pro tunc.

 

10.6.                                    In the event
this Stipulation shall be terminated as set forth in ¶ 10.1 above, the
Settling Class Action Parties shall, within two weeks of such
cancellation, jointly request a status conference with the Court to be held on
the Court’s first available date.  At
such status conference, the Settling Class Action Parties shall ask the
Court’s assistance in scheduling continued proceedings in the Class Action
as between the Settling Class Action Parties.  Pending such status conference or the
expiration of sixty 

 

35

 

(60)
days from the Settling Class Action Parties’ joint request for a status
conference, whichever occurs first, none of the Settling Class Action
Parties shall file or serve any further motions or discovery requests on any of
the other Settling Class Action Parties in connection with this Class Action
nor shall any response be due by any Settling Class Action Party to any
outstanding discovery or pleading by any other Settling Class Action
Party.

 

10.7.                                    If a case is
commenced in respect to Spectranetics or any of Spectranetics’ Insurance Carriers
under Title 11 of the United States Code (Bankruptcy), or a trustee, receiver
or conservator is appointed under any similar law, and in the event of the
entry of a final order of a court of competent jurisdiction determining the
transfer of the Settlement Consideration, or any portion thereof, by or on
behalf of Spectranetics or any of Spectranetics’ Insurance Carriers to be a
preference, voidable transfer, fraudulent conveyance or similar transaction,
then at Settling Class Action Plaintiff’s option, this Settlement, and the
releases given and Judgment entered in favor of all Settling Class Action
Defendants pursuant to this Stipulation, shall be null and void.

 

10.8.                                    No order of the
Court or modification or reversal on appeal of any order of the Court concerning  (a) any Plan of Allocation or (b) any
amount of attorneys’ fees, costs, expenses and interest to Settling Class Action
Plaintiff’s Counsel shall constitute a condition to the Effective Date or
grounds for cancellation and termination of the Stipulation.

 

K.                                    Miscellaneous
Provisions.

 

11.1.                                    The Settling Class Action
Parties (a) acknowledge that it is their intent to 

 

36

 

consummate
the Settlement consistent with the terms of this Stipulation; and (b) agree
to cooperate to the extent necessary to effectuate and implement all terms and
conditions of the Settlement consistent with the terms of this Stipulation and
to exercise their best efforts to accomplish the foregoing terms and conditions
of the Settlement.

 

11.2.                                    The Settling Class Action
Defendants have denied, and continue to deny, any and all allegations contained
in the Class Action, and they are entering into the Settlement in order to
eliminate the burden, expense, and uncertainties of further litigation.  The Settlement and the provisions contained
in this Stipulation and the Memorandum of Understanding entered into between
Settling Class Action Plaintiff’s Counsel and counsel for Spectranetics,
Guy A. Childs, Emile J. Geisenheimer, Jonathan W. McGuire, and Craig M. Walker,
M.D. on June 17, 2010 shall not be deemed, or offered or received in
evidence as a presumption, a concession, or an admission of any fault,
liability, or wrongdoing by any party, and except as required to enforce the
Settlement, they shall not be offered or received in evidence or otherwise used
by any Person in these or any other actions or proceedings, whether civil,
criminal, or administrative.

 

11.3.                                    It is agreed
that the Settling  Class Action
Parties were in compliance with their respective obligations pursuant to Rule 11
of the Federal Rules of Civil Procedure and that the Class Action was
filed, and all actions taken in respect thereof were taken in good faith.

 

11.4.                                    No press
announcement, press release, or other public statement concerning the
Settlement may be made by any of the Settling Class Action Parties 

 

37

 

without
approval from the other Settling Class Action Parties, except as required
by law.

 

11.5.                                    All of the
exhibits to the Stipulation are material and integral parts hereof and are
fully incorporated herein by this reference.

 

11.6.                                    The Stipulation
may be amended or modified, as is necessary to effect the terms of the
Settlement, only by a written instrument signed by or on behalf of all Settling
Class Action Parties or their successors-in-interest.

 

11.7.                                    The
Stipulation, the exhibits attached hereto and the Supplemental Agreement
constitute the entire agreement among the Settling Class Action Parties
hereto; in particular, it is understood and agreed that there are no collateral
or oral agreements between the Settling Class Action Parties that are not
expressed in this Stipulation, the exhibits or the Supplemental Agreement.  The Settling Class Action Plaintiff, on
behalf of itself and the Settlement Class Members, and the Settling Class Action
Defendants expressly warrant that, in entering into this Stipulation, they
relied solely upon their own knowledge and investigation, and not upon any
promise, representation, warranty, or other statement by any party or any
person representing any party to this Stipulation, not expressly contained in
this Stipulation, its exhibits, or the Supplemental Agreement.  Except as otherwise provided herein, each
party shall bear its own costs.

 

11.8.                                    Settling Class Action
Plaintiff’s Counsel, on behalf of the Settlement Class Members, is
expressly authorized by the Settling Class Action Plaintiff to take all
appropriate action required or permitted to be taken by the Settlement Class Members
pursuant to the Stipulation to effectuate its terms and also are expressly
authorized to 

 

38

 

enter
into any modifications or amendments to the Stipulation on behalf of the
Settlement Class Members which they deem appropriate.

 

11.9.                                    Each counsel or
other Person executing the Stipulation or any of its Exhibits on behalf of any
party hereto hereby warrants that such person has the full authority to do
so.  All orders and agreements entered
during the course of the Class Action relative to the confidentiality of
information shall survive this Stipulation.

 

11.10.                              The Stipulation
may be executed by facsimile and in one or more counterparts.  All executed counterparts and each of them
shall be deemed to be one and the same instrument.  Counsel for the Settling Class Action
Parties shall exchange among themselves original signed counterparts and a
complete set of original executed counterparts shall be filed with the Court.

 

11.11.                              The Stipulation
shall be binding upon, and inure to the benefit of, the successors and assigns
of the Settling Class Action Parties.

 

11.12.                              The Court shall
retain jurisdiction with respect to implementation and enforcement of the terms
of the Stipulation, and all Settling Class Action Parties hereto and their
counsel submit to the jurisdiction of the Court for purposes of implementing
and enforcing the Settlement embodied in the Stipulation.

 

11.13.                              The Stipulation
and the exhibits hereto shall be considered to have been negotiated, executed
and delivered, and to be wholly performed, in the State of Colorado, and the
rights and of the parties to the Stipulation shall be construed and enforced in
accordance with, and governed by, the laws of the State of Colorado without
giving effect to that state’s choice of law principles.

 

39

 

IN
WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed,
by their duly authorized attorneys, as of September 7, 2010.

 

	
  /s/ Mark S. Goldman

  	
   

  	
  /s/ Richard H. Zelichov  

  
	
  Mark S. Goldman 

  	
   

  	
  Bruce G. Vanyo 

  
	
  LABATON SUCHAROW LLP 

  	
   

  	
  Richard H. Zelichov 

  
	
  140 Broadway 

  	
   

  	
  KATTEN MUCHIN ROSENMAN LLP
  

  
	
  New York, NY 10005 

  	
   

  	
  2029 Century Park East,
  Suite 2600 

  
	
  Telephone: (212) 907-0700 

  	
   

  	
  Los Angeles, CA 90067-3012
  

  
	
  Facsimile: (212) 818-0477 

  	
   

  	
  Telephone: (310) 788-4400 

  
	
  Email:
  mgoldman@labaton.com 

  	
   

  	
  Facsimile: (310) 788-4471 

  
	
   

  	
   

  	
  Email:
  richard.zelichov@kattenlaw.com 

  
	
  Lead Plaintiffs’ Co-Lead
  Counsel

  	
   

  	
   

  
	
   

  	
   

  	
  Counsel for Defendants The
  Spectranetics Corporation, Guy A. Childs, Emile Geisenheimer, Jonathan W.
  McGuire and Craig M. Walker, M.D.

  
	
   

  	
   

  	
   

  
	
  /s/ Charles J. Piven  

  	
   

  	
  /s/ Stephen C. Schulte  

  
	
  Charles J. Piven 

  	
   

  	
  Stephen C. Schulte 

  
	
  BROWER PIVEN, 

  	
   

  	
  W. Gordon Dobie 

  
	
  A Professional Corporation
  

  	
   

  	
  WINSTON AND STRAWN LLP 

  
	
  1925 Old Valley Road 

  	
   

  	
  35 W. Wacker Drive 

  
	
  Stevenson, MD 21153 

  	
   

  	
  Chicago, IL 60601 

  
	
  Telephone: (410) 332-0030 

  	
   

  	
  Telephone: 312-558-5890 

  
	
  Facsimile: (410) 685-1300 

  	
   

  	
  Facsimile: 312-558-5700 

  
	
  Email:
  piven@browerpiven.com 

  	
   

  	
  Email: sschulte@winston.com
  

  
	
   

  	
   

  	
   

  
	
  Lead Plaintiffs’ Co-Lead
  Counsel

  	
   

  	
  Counsel for Defendant John
  G. Schulte

  

 

40Exhibit 10.1

 

SEAGATE
TECHNOLOGY PUBLIC LIMITED COMPANY

2004
SHARE COMPENSATION PLAN

EXECUTIVE
PERFORMANCE UNIT AGREEMENT

 

Seagate Technology plc, a public company incorporated under the
laws of the Republic of Ireland with limited liability (the “Company”) has
awarded you Performance Units, pursuant to the provisions of the Company’s 2004
Share Compensation Plan (the “Plan”) and this Performance Unit Agreement
(including any attachments hereto, the “Agreement”) (collectively, the “Award”).  Defined terms not explicitly defined in this
Agreement but defined in the Plan shall have the same definitions as in the
Plan.

 

The details of your Award
are as follows:

 

1.   Award Terms.  Subject to further detail included in the
Agreement, below are the key terms related to the Award:

 

(a)  Participant.

 

(b)  Global
ID Number.

 

(c)  Date
of Grant.

 

(d)  Grant
Number.

 

(e)  Fiscal
Years in Performance Period.

 

(f)   Number
of Performance Units.

 

(g)  Vesting
Schedule.  As set forth in Schedule
A attached hereto.

 

2.   Grant of Performance Units.  You are entitled to the aggregate number of
Performance Units specified in Section 1, above, pursuant to the terms and
conditions of this Agreement.  Each
Performance Unit represents the right to receive one Share, subject to the
terms and conditions set forth in this Agreement and the Plan, each as amended
from time to time.

 

If you
relocate to another country, any special terms and conditions applicable to
Performance Unit Awards granted in such country will apply to you, to the
extent the Company determines that the application of such terms and conditions
is necessary or advisable in order to comply with local law or facilitate the
administration of the Plan.

 

In
addition, the Company reserves the right to impose other requirements on the
Award and any Shares acquired under the Plan, to the extent the Company
determines it is necessary or advisable in order to comply with local law or
facilitate the administration of the Plan, and to require you to sign any
additional agreements or undertakings that may be necessary to accomplish the
foregoing.

 

3.   Vesting and Settlement.  Subject to the limitations contained herein,
the Performance Units will vest as provided in Schedule A attached
hereto.  Upon the vesting of any
Performance Units, as promptly as is reasonably practicable, Shares (which
shall be considered to be fully paid up) shall be issued to you, and the
Company shall deliver to you appropriate documentation

 

 

evidencing the
number of Shares issued in settlement of such vested Performance Units.  Notwithstanding anything to the contrary
herein, the settlement of the Performance Units shall be conditioned upon your
making adequate provision for Tax-Related Items, as discussed in Section 10,
below.  In addition, if on any date on
which the Performance Units would otherwise vest, the Company determines that
you would be in violation of Rule 10b-5 promulgated under the Exchange Act if
you were to sell any of the Shares underlying the Performance Units on that
date, the vesting of those Performance Units shall be delayed until the first
date on which you would no longer be in violation of Rule 10b-5, unless, prior
to the commencement of any trading blackout or closed window period in effect
on the scheduled vesting date, you established an effective Rule 10b5-1 trading
plan that provides for the sale of a sufficient number of the Shares underlying
the Performance Units scheduled to vest on such vesting date to fund the
payment of any tax withholding obligations imposed in connection with the vesting
of the Performance Units, which trading plan remains in effect on the
applicable vesting date.

 

4.   Rights as Holder of
Performance Units.  You shall have no
rights as a shareholder of the Company with respect to your Performance Units
until the date of issuance to you of evidence of ownership representing the
Shares.

 

5.   Number of Shares.  The number of Shares subject to your Award
may be adjusted from time to time for changes in capitalization, as provided in
Article XIV of the Plan.

 

6.   Seagate Technology Public
Limited Company Compensation Recovery for Fraud or Misconduct Policy.  You hereby acknowledge and agree that you and
the Award evidenced by this Agreement are subject to the Seagate Technology
Public Limited Company Compensation Recovery for Fraud and Misconduct Policy as
in effect on the Date of Grant, a current copy of which is attached hereto as Exhibit
A.  To the extent you are subject to
the policy, the terms and conditions of the policy are hereby incorporated by
reference into this Agreement.

 

7.   Securities Law Compliance.  You will not be issued any Shares under your
Award unless the Shares are either (a) then registered under the Securities Act
or (b) the Company has determined that such issuance would be exempt from the
registration requirements of the Securities Act. Your Award must also comply
with other applicable laws and regulations governing the Award and/or the
Shares, and you will not receive such Shares if the Company determines that
such receipt would not be in material compliance with such laws and
regulations.

 

8.   Transferability. 
The Performance Units may not be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by you without the prior written consent of the Company and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a beneficiary shall not constitute
an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

 

9.   Award Not a Service Contract.  Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or on the part of the Company or an Affiliate to continue your
employment. In addition, nothing in your Award shall obligate the Company or an
Affiliate, their respective shareholders, boards of directors, Officers or
Employees to continue any relationship that you might have as an Employee,
Director or Consultant for the Company or an Affiliate.

 

2

 

10. Responsibility for Taxes.

 

(a)  Regardless
of any action the Company or your employer (the “Employer”) takes with respect
to any or all income tax, social insurance, payroll tax, payment on account or
other tax-related items related to your participation in the Plan and legally
applicable to you (“Tax-Related Items”), you acknowledge that the ultimate
liability for all Tax-Related Items is and remains your responsibility and may
exceed the amount actually withheld by the Company or the Employer.  You further acknowledge that the Company
and/or the Employer (1) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the Award,
including, but not limited to, the grant, vesting or settlement of the
Performance Units, the issuance of Shares, the subsequent sale of Shares acquired
pursuant to such issuance and the receipt of any dividends; and (2) do not
commit to and are under no obligation to structure the terms of the grant or
any aspect of the Award to reduce or eliminate your liability for Tax-Related
Items or achieve any particular tax result. 
Further, if you have become subject to Tax-Related Items in more than
one jurisdiction between the Date of Grant and the date of any relevant taxable
event or tax withholding event, as applicable, you acknowledge that the Company  and/or the Employer (or former employer,
as applicable) may be required to withhold or account for Tax-Related Items in
more than one jurisdiction.

 

(b)  Unless
the Company, in its sole discretion, chooses to satisfy any withholding
obligation on the part of the Company and/or the Employer with respect to the
Tax-Related Items by some other means in accordance with clause (c) below, your
acceptance of this Agreement constitutes your instruction and authorization to
the Company and any brokerage firm determined acceptable to the Company for
such purpose to sell on your behalf a whole number of Shares from those Shares
issuable to you upon settlement of the Performance Units as the Company
determines to be appropriate to generate cash proceeds sufficient to satisfy
any such applicable withholding obligation. 
Such Shares will be sold on the day the Tax-Related Items are to be
determined or as soon thereafter as practicable.  You will be responsible for all brokers’ fees
and other costs of sale, which fees and costs may be deducted from the proceeds
of the foregoing sale of Shares, and you agree to indemnify and hold the
Company and any brokerage firm selling such Shares harmless from any losses,
costs, damages, or expenses relating to any such sale.  To the extent the proceeds of such sale
exceed your Tax-Related Items, such excess cash will be deposited into the
securities account established with the brokerage service provider for the
settlement of your Performance Units. 
You acknowledge that the Company or its designee is under no obligation
to arrange for such sale at any particular price, and that the proceeds of any
such sale may not be sufficient to satisfy your Tax-Related Items.  Accordingly, you agree to pay to the Company
as soon as practicable, including through additional payroll withholding, any
amount of the Tax-Related Items that is not satisfied by the sale of Shares
described above.

 

(c)  At any
time before any taxable event or tax withholding event, the Company may, in its
sole discretion, including in the event that the Company determines that you would be in violation of Rule 10b-5
promulgated under the Exchange Act if any of the Shares underlying the
Performance Units were to be sold at that time, elect to satisfy any
withholding obligation with respect to the Tax-Related Items through Share withholding pursuant to this
clause (c).  As such, to the extent the
Company makes such an election, you hereby authorize the Company to withhold
Shares otherwise deliverable upon settlement of the Performance Units having a
Fair Market Value on the date of settlement equal to the amount sufficient to
satisfy the Tax-Related Items. 
Alternatively, or in addition, the Company may, in its sole discretion,
elect to satisfy any

 

3

 

withholding obligation with respect to the Tax-Related Items by
withholding from your wages or other cash compensation to be paid to you by the
Employer, the Company or any Affiliate.

 

(d)  To
avoid negative accounting treatment, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding
amounts or other applicable withholding rates. 
If the obligation for Tax-Related Items is satisfied by withholding in
Shares, for tax purposes, you will be deemed to have been issued the full
number of Shares subject to the vested Performance Units, notwithstanding that
a number of the Shares are held back solely for the purpose of paying the
Tax-Related Items due as a result of any aspect of your participation in the
Plan.

 

(e)  Finally,
you shall pay to the Company or the Employer any amount of Tax-Related Items
that the Company or the Employer may be required to withhold or account for as
a result of your participation in the Plan that cannot be satisfied by the
means previously described.  The Company
may refuse to issue or deliver the Shares or the proceeds of the sale of
Shares, if you fail to comply with your obligations in connection with the
Tax-Related Items.

 

11. Nature of the Award.  In accepting the Award, you acknowledge,
understand and agree that:

 

(a)  the
Plan is established voluntarily by the Company, it is discretionary in nature
and it may be modified, amended, suspended or terminated by the Company at any
time;

 

(b)  the
Award is voluntary and occasional and does not create any contractual or other
right to receive future awards of Performance Units, or benefits in lieu of
Performance Units, even if Performance Units have been awarded repeatedly in
the past;

 

(c)  all
decisions with respect to future Performance Unit awards, if any, will be at
the sole discretion of the Company;

 

(d)  You
are voluntarily participating in the Plan;

 

(e)  the
Award and any Shares subject to the Award are an extraordinary item that does
not constitute compensation of any kind for services of any kind rendered to
the Company or the Employer, and which is outside the scope of your employment
or service contract, if any;

 

(f)   the
Award and any Shares subject to the Award are not intended to replace any
pension rights or other compensation that you may receive from the Employer,
the Company or any Affiliate;

 

(g)  the
Award and any Shares subject to the Award are not part of normal or expected
compensation or salary for any purposes, including, but not limited to, calculating
any severance, resignation, termination, redundancy, dismissal, end of service
payments, bonuses, long-service awards, pension or retirement or welfare
benefits or similar payments and in no event should be considered as
compensation for, or relating in any way to, past services for the Company, the
Employer or any Affiliate;

 

(h)  the
Award and your participation in the Plan will not be interpreted to form an
employment or service contract or relationship with the Company or any
Affiliate;

 

4

 

(i)   the
future value of the underlying Shares is unknown and cannot be predicted with
certainty;

 

(j)   no
claim or entitlement to compensation or damages shall arise from forfeiture of
the Award resulting from termination of your employment by or with the Company
or the Employer (for any reason whatsoever and whether or not in breach of
local labor laws), and in consideration of the Award to which you are otherwise
not entitled, you irrevocably agree never to institute any claim against the
Company or the Employer, waive your ability, if any, to bring any such claim,
and release the Company and the Employer from any such claim; if,
notwithstanding the foregoing, any such claim is allowed by a court of
competent jurisdiction, then, by participating in the Plan, you shall be deemed
irrevocably to have agreed not to pursue such claim and agree to execute any
and all documents necessary to request dismissal or withdrawal of such claims;

 

(k)  in
the event of the termination of your Continuous Service (whether or not in
breach of local labor laws), your right to vest in the Performance Units under
the Plan, if any, will terminate effective as of the date that you are no
longer actively employed and will not be extended by any notice period mandated
under local law (e.g., active
employment would not include a period of “garden leave” or similar period
pursuant to local law); the Committee shall have the exclusive discretion to
determine when you are no longer actively employed for purposes of the Award;
and

 

(l)   the
Award and the benefits under the Plan, if any, will not necessarily transfer to
another company in the case of a merger, take-over or transfer of liability.

 

12. No Advice Regarding Grant. 
The Company neither is providing any tax, legal or financial advice, nor
is the Company making any recommendations regarding your participation in the
Plan, or your acquisition or sale of the underlying Shares.  You are hereby advised to consult with your
own personal tax, legal and financial advisors regarding your participation in
the Plan before taking any action related to the Plan.

 

13. Data Privacy.  You
hereby explicitly and unambiguously consent to the collection, use, processing
and transfer, in electronic or other form, of your personal data as described
in this Agreement and any other Award materials by and among, as applicable,
the Employer, the Company and its Affiliates (whether inside or outside the
European Economic Area) for the exclusive purpose of implementing, administering
and managing your participation in the Plan.

 

You understand that the Company and the Employer may hold
certain personal information about you, including, but not limited to, your
name, home address and telephone number, date of birth, social insurance number
or other identification number, salary, compensation from the Company and its
Affiliates, nationality, job title, any shares or directorships held in the
Company, details of all Performance Units or any other entitlement to Shares
awarded, canceled, exercised, vested, unvested or outstanding in your favor,
for the exclusive purpose of implementing, administering and managing the Plan
(“Data”).

 

You
understand that Data will be transferred to a brokerage firm or share plan
service provider designated by the Company which is assisting the Company with
the implementation, administration and management of the Plan.  You understand that the recipients of Data
may

 

5

 

be
located in the United States or elsewhere, and that the recipients’ country
(e.g., the United States) may have different data privacy laws and protections
than your country.  You understand that
you may request a list with the names and addresses of any potential recipients
of Data by contacting your local human resources representative.  You authorize the Company, any
Company-designated brokerage firm or share plan service provider and any other
possible recipients which may assist the Company (presently or in the future)
with implementing, administering and managing the Plan to receive, possess,
use, retain, process and transfer Data, in electronic or other form, for the
sole purpose of implementing, administering and managing your participation in
the Plan.  You understand that Data will
be held only as long as is necessary to implement, administer and manage your
participation in the Plan.  You
understand that you may, at any time, view Data, request additional information
about the storage and processing of Data, require any necessary amendments to
Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing your local human resources representative.  You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the
Plan.  For more information on the
consequences of your refusal to consent or withdrawal of consent, you
understand that you may contact your local human resources representative.

 

14. Notices.  Any notices provided for in your Award or the
Plan shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by the Company to you, five (5) days
after deposit in the United States mail, postage prepaid, addressed to you at
the last address you provided to the Company.  
Any such notices from the Company to you may also be delivered to you
through the Company’s electronic mail system (during your Continuous Service)
or at the last email address you provided to the Company (after termination of
your Continuous Service).

 

15. Miscellaneous.

 

(a)  The
rights and obligations of the Company under your Award shall be transferable by
the Company to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company’s successors and assignees.

 

(b)  You
agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or
intent of your Award.

 

(c)  You
acknowledge and agree that you have reviewed your Award in its entirety, have
had an opportunity to obtain the advice of counsel prior to executing and
acknowledging your Award and fully understand all provisions of your Award.

 

16. Governing Plan Document.  Your Award is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your Award, and
is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated and adopted pursuant to the Plan. In
the event of any conflict between the provisions of your Award and those of the
Plan, the provisions of the Plan shall control.

 

17. Choice of Law and Venue.  The Award is governed by, and subject to, the
laws of the State of California, without regard to such state’s conflict of
laws rules, as provided in the Plan.

 

6

 

For purposes of
litigating any dispute that arises directly or indirectly from the relationship
of the parties evidenced by this Award, the parties hereby submit to and
consent to the exclusive jurisdiction of the State of California  and agree
that such litigation shall be conducted only in the courts of Santa Clara County, California, or the federal courts for the
United States for the Northern District of California, and no other courts, where this Award is
made and/or to be performed.

 

18. Language.  If you have received this Agreement or any
other document related to the Plan translated into a language other than
English and if the meaning of the translated version is different than the
English version, the English version will control.

 

19. Severability.  The provisions of this Agreement are
severable and if any one or more provisions are determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.

 

20. Additional
Terms/Acknowledgements.  You
acknowledge receipt of, and understand and agree to the terms of, this
Agreement and the Plan (including any exhibits to each document).  You further acknowledge that this Agreement
and the Plan (including any exhibits to each document) set forth the entire
understanding between you and the Company regarding the acquisition of the
Shares subject to this Award and supersede all prior oral and written
agreements with respect thereto, including, but not limited to, any other
agreement or understanding between you and the Company or an Affiliate relating
to your Continuous Service and any termination thereof, compensation, or
rights, claims or interests in or to the Shares.

 

You also acknowledge
that, unless you specifically request (or have in the past specifically
requested) to receive communications regarding the Plan and this Award in paper
form, you agree to receive all communications regarding the Plan and this Award
(including but not limited to the Plan Prospectus) by electronic delivery
through an online or electronic system established and maintained by the
Company or a third party designated by the Company (currently through the
Morgan Stanley Smith Barney Corporate Benefits website at www.benefitaccess.com,
which you may easily access and understand how to access, review and print the
communications posted thereon).  Further,
if requested, you agree to participate in the Plan through such an online or
electronic system.  In addition, you
understand that it is your responsibility to notify the Company of any changes
to your mailing address so that you may receive any shareholder information to
be delivered by regular mail.

 

7

 

 

SCHEDULE
A

VESTING SCHEDULE

 

1.   Standard Vesting Provisions.

 

(a)  Subject
to the Participant’s Continuous Service through the date that is three (3) years
following the Date of Grant and subject to Section 2, below, Performance
Units shall vest, based on the achievement of Company performance goals
measured over the 3-fiscal year performance period beginning on the first day
of the first fiscal year of the Fiscal Years in Performance Period (such three (3) year
period shall be defined as the “Performance Period”), as follows:

 

	
   

  	
   

  	
   

  	
   

  	
  Relative TSR Percentile(3)

  
	
   

  	
   

  	
   

  	
   

  	
  Below Median

  	
   

  	
  Median Up to 75th

  Percentile

  	
   

  	
  Equal to or Above 75th

  Percentile

  
	
   

  	
   

  	
   

  	
   

  	
  75% of ROIC Payout

  	
   

  	
  100% of ROIC Payout

  	
   

  	
  125% of ROIC Payout

  
	
  3-Year Average Annual Return on Invested Capital (ROIC)(1)(2)

  	
   

  	
  [·]

  	
   

  	
  0%

  	
   

  	
  0%

  	
   

  	
  0%

  
	
   

  	
  [·]

  	
   

  	
  30%

  	
   

  	
  40%

  	
   

  	
  50%

  
	
   

  	
  [·]

  	
   

  	
  41%

  	
   

  	
  55%

  	
   

  	
  69%

  
	
   

  	
  [·]

  	
   

  	
  53%

  	
   

  	
  70%

  	
   

  	
  88%

  
	
   

  	
  [·]

  	
   

  	
  64%

  	
   

  	
  85%

  	
   

  	
  106%

  
	
   

  	
  [·]

  	
   

  	
  75%

  	
   

  	
  100%

  	
   

  	
  125%

  
	
   

  	
  [·]

  	
   

  	
  86%

  	
   

  	
  115%

  	
   

  	
  144%

  
	
   

  	
  [·]

  	
   

  	
  98%

  	
   

  	
  130%

  	
   

  	
  163%

  
	
   

  	
  [·]

  	
   

  	
  109%

  	
   

  	
  145%

  	
   

  	
  181%

  
	
   

  	
  [·]

  	
   

  	
  120%

  	
   

  	
  160%

  	
   

  	
  200%

  

 

(1) [The ROIC goals and related footnote have
not been included to protect confidential Company information].

 

(2) ROIC shall be calculated on a single fiscal
year basis and shall mean (i) Adjusted Operating Income multiplied by 1
minus the Average Tax Rate, divided by (ii) (x) Net Plant, Property &
Equipment plus Total Current Assets minus Cash, minus (y) Total Current
Liabilities.  Final ROIC for vesting is
the average annual ROIC over the prior 3 fiscal years.

 

“Adjusted Operating Income” is defined as Generally
Accepted Accounting Principles in the United States (GAAP) Operating Income
adjusted to exclude the impact of non-operating activities and material,
unusual or nonrecurring gains and losses, accounting charges or other
extraordinary events which were not budgeted and were not foreseen at the time
the applicable target was established. 
Each year, in evaluating the performance against the applicable
performance target, the Committee shall, fairly and appropriately, and to the
extent consistent with Section 162(m) of the Code, interpret the
calculation of the applicable target to reflect non-operating activities such
as unforeseen, unbudgeted gains, losses, charges or events, including:

 

(A) Non-operating adjustments.  These adjustments would generally be the same
as those items the Company would adjust in its non-GAAP financial results in
its quarterly press releases and would include such items as merger or
acquisition related charges, legal claims, legal judgments or settlements. In
addition, these nonoperating adjustments would also include the effects of
charges for restructuring & reorganization plans, discontinued
operations, asset write downs, extraordinary items (as defined under GAAP) and
all items of gain, loss or expense determined to be extraordinary or unusual in
nature or related to divestitures or disposal of a segment or significant part
of a business;

 

(B) Changes in accounting principles or
standards.  These adjustments would
include those related to a change in accounting principle (including the
cumulative effect of accounting changes) as determined in accordance with
Accounting Standards Codification 250, Accounting Changes and
Error Corrections, or other applicable or successor accounting
provisions. These adjustments would also include those that the Committee in
good faith determines require adjustment because of changes in accounting
standards promulgated by accounting standard setters, such as future potential
voluntary or mandatory adoption of International Financial Reporting Standards
(IFRS). In each case these adjustments will be determined in accordance with
GAAP or as identified in the Company’s financial statements or notes to the
financial statements; and

 

(C) Tax related adjustments.  These adjustments would include those related
to the effect of changes in tax law or other such law as well as tax
adjustments directly attributable to mergers & acquisitions or other
non-operating adjustments listed in (A) or (B) above.

 

 

The above list of adjustments is not meant to be
comprehensive, but rather to provide examples of those adjustments appropriate
to make in order to carry out the Committee’s intent of mitigating the
unbudgeted impact of material, unusual or nonrecurring gains and losses,
accounting charges or other extraordinary events not foreseen at the time the
Committee established the original target.

 

“Average Tax Rate” is defined as the provision for
income taxes as a percent of Income Before Income Taxes.

 

All
other values used in the calculation of ROIC are quantified in the Company’s
GAAP Balance Sheet, and have the same meaning as used for purposes of preparing
the Company’s Consolidated Balance Sheet for the relevant fiscal year in
accordance with GAAP.

 

(3) Total Shareholder Return (TSR) is equal to:
(i) Ending Price minus Beginning Price, divided by (ii) Beginning
Price.  Beginning Price is the average
closing price over the 30-day trading period from July 26, 2010 to September 3,
2010, including reinvestment of dividends during the 30-day trading
period.  Ending Price is the average
closing price over the 30-day trading period beginning 3 trading days after the
date of the release of the Company’s fiscal year 2013 earnings, including
reinvestment of dividends during the 30-day trading period and accounting for
reinvestment of dividends over the 3-year period; provided, however, that if
the date of the release of the Company’s fiscal year 2013 earnings is more than
10 trading days after July 20, 2013, then the Ending Price will be equal
to the average price over the 30-trading day period beginning on July 22,
2013.  Relative TSR Percentile is
measured relative to the TSR of each of the peer companies listed on Schedule
B, attached hereto that have a class of equity securities which are both
actively traded on a public securities market and are registered under the
Exchange Act during each of the periods used to calculate the Beginning Price
and the Ending Price.  The group of peer
companies is a closed group; a peer company that is in bankruptcy is included
as the lowest TSR (i.e. the 1st percentile) and a peer company that is
involved in a transaction, the result of which is that the company is no longer
publicly traded, is excluded.

 

(b)  The
achievement of the performance goals set forth above (or lack thereof) shall be
evidenced by the Committee’s written certification.

 

2.   Other Vesting Provisions.

 

(a)  Termination
due to death or Disability.  The
Award shall vest pro-rata, based on the number of days from the beginning of
the Performance Period until the termination of Continuous Service (“Termination”),
and based on actual Company performance, to be settled after the end of the
Performance Period.

 

(b)  Termination
for any reason, other than death or Disability, not during a Change in Control
Period (as defined in the Company’s Third Amended and Restated Executive
Severance and Change in Control Plan (the “Severance Plan”)).  All of the Performance Units that have not
vested as of the date of Termination will be forfeited.

 

(c)  Occurrence
of a Termination Event (as defined in the Severance Plan) during a Change in
Control Period (as defined in the Severance Plan).  The Award shall vest in full on the later of (i) the
closing date of the Change in Control (as defined in the Severance Plan) and (ii) the
date of the Termination Event (as defined in the Severance Plan), based on
Company performance through the closing date of the Change in Control (as
defined in the Severance Plan).  The TSR
performance of the Company and its peers in connection with a Termination Event
during a Change in Control Period shall be determined using the average closing
price over the 30-day trading period prior to the closing date of the Change in
Control for the Company and its peers.

 

 

SCHEDULE
B

PEER GROUP

 

ADV SEMICONDUCTOR ENGR -ADR

ADVANCED MICRO DEVICES

ALCATEL-LUCENT -ADR

AMPHENOL CORP

ANALOG DEVICES

APPLE INC

AU OPTRONICS CORP -ADR

BROADCOM CORP -CL A

CANON INC -ADR

CELESTICA INC

CISCO SYSTEMS INC

CORNING INC

DELL INC

EMC CORP/MA

ERICSSON (L M) TEL –ADR

FIRST SOLAR INC

FLEXTRONICS INTERNATIONAL

HARRIS CORP

HEWLETT-PACKARD CO

HITACHI LTD -ADR

INTEL CORP

JABIL CIRCUIT INC

JUNIPER NETWORKS INC

KYOCERA CORP -ADR

LEXMARK INTL INC -CL A

LG DISPLAY CO LTD –ADR

LSI CORP

MARVELL TECHNOLOGY GROUP LTD

MICRON TECHNOLOGY INC

MOLEX INC

MOTOROLA INC

NCR CORP

NETAPP INC

NOKIA CORP –ADR

NVIDIA CORP

QUALCOMM INC

RESEARCH IN MOTION LTD

SANDISK CORP

STMICROELECTRONICS NV -ADR

TAIWAN SEMICONDUCTOR –ADR

TEXAS INSTRUMENTS INC

TYCO ELECTRONICS LTD

UTD MICROELECTRONICS –ADR

WESTERN DIGITAL CORP

XEROX CORP

 

 

EXHIBIT A

 

SEAGATE
TECHNOLOGY PUBLIC LIMITED COMPANY COMPENSATION RECOVERY FOR FRAUD OR MISCONDUCT
POLICY

Effective
January 29, 2009

 

The Seagate Technology Public Limited Company
Compensation Recovery for Fraud or Misconduct Policy is intended to support
accurate disclosure by recovering compensation paid to an executive covered by
this policy where such compensation was based on incorrectly reported financial
results due to the fraud or willful misconduct of the executive who received
such compensation.

 

Employees Covered:

 

“Executive” is defined as U.S. employees of Seagate
Technology plc, a public company incorporated under the laws of the Republic of
Ireland with limited liability, or one of its subsidiaries (the “Company”) at
the Senior Vice President level or above and any other officers subject to Section 16
of the Securities Exchange Act of 1934, as amended.

 

Compensation Covered:

 

The repayment and other obligations of an Executive
described in this policy apply to any bonus paid, share grant issued (whether
or not vested) and/or vested during the covered period, or share option
exercised during the covered period, defined as the period commencing with the
later of the effective date of this policy or the date that is four years prior
to beginning of the fiscal year in which a restatement is announced and ending
on the date recovery is sought pursuant to this policy; provided, however, that
in no event shall this policy apply to any share or option award granted before
the effective date of this policy.

 

Fraud or Misconduct:

 

For the purposes of this policy, “Fraud” or “Misconduct”
shall mean any of the following events that are significant contributing
factors to a restatement of the Company’s financial results, as determined
pursuant to “Determination of Fraud or Misconduct”, below: (A) embezzlement
or theft by the Executive, (B) the commission of any act or acts on the
Executive’s part resulting in the conviction (or plea of guilty or nolo
contendere) of such Executive of a felony under the laws of the United States
or any state (or equivalent law of any jurisdiction outside of the United
States), (C) Executive’s willful malfeasance or willful misconduct in
connection with Executive’s financial reporting obligations for the Company, or
(D) Executive’s other misrepresentation, act, or omission which is
materially injurious to the Company’s financial reporting obligations.

 

Recovery Event:

 

A recovery event occurs when:

 

·                The
Company issues a restatement of financial results, and

 

·                The
independent members of the Board of Directors determine in good faith that the
Fraud or Misconduct of an Executive covered by this policy was a significant
contributing factor to such restatement, and

 

 

·                During the covered
period, (i) some or all of a bonus previously paid or performance-based share
grant that vested prior to such restatement, in either case, having a value of
at least $100,000, would not have been paid or become vested, as applicable,
based upon the restated financial results, (ii) the Executive exercised
one or more share options, sold the Company’s shares acquired upon such
exercises and in the aggregate realized proceeds of at least $100,000 or (iii) the
Executive sold the Company’s shares attributable to one or more
non-performance-based share grants and in the aggregate realized proceeds of at
least $100,000.

 

Determination of Fraud or Misconduct:

 

The determination of whether an Executive’s Fraud or
Misconduct was a significant contributing factor to the Company’s restatement
of financial results shall only be made by the affirmative vote of a majority
of all of the independent members of the Board at an in-person meeting of the
independent members of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive, with or without
legal counsel, is given an opportunity to be heard at such meeting).  Any determination by the Board pursuant to
this policy shall be subject to the Executive’s right to review by an
arbitrator pursuant to procedures set forth in the Seagate Executive Severance
and Change of Control Plan, a copy of which is attached hereto.

 

Repayment Obligation:

 

Upon receiving from the Company the revised
calculations and determination of the independent members of the Board of
Directors setting forth the amount of a previously paid bonus or bonuses that
would not have been paid and/or a performance-based share grant or grants that
would not have vested, in all cases based upon the restated financial results,
and/or the proceeds of sales of shares acquired upon the exercise of share
options or following the vesting of any non-performance-based share grants, the
affected Executive will be required to deliver, within 30 days of such written
notification of the amount due, to the Company an amount in equal to: (i) the
bonus payments that would not have been made during the covered period had the
restated financial results been used to determine such bonus awards; (ii) with
respect to a performance-based share grant that was issued and/or vested during
the covered period, an amount in cash or equivalent value in the Company’s
shares (or a combination of the two) equal to the net proceeds realized by the
Executive upon the issuance and, if applicable, subsequent sale of any shares
that would not have been issued or vested based upon the restated financial
results; (iii) with respect to any share option that was exercised during
the covered period, an amount in cash equal to the net proceeds realized by the
Executive upon the sale during the covered period of some or all of the shares
acquired upon the exercise of such share option; and (iv) with respect to
the sale of shares following the vesting of any non-performance-based share
grant, an amount in cash determined by the independent members of the Board of
Directors to be attributable to the Executive’s Fraud or Misconduct.  The Executive shall also immediately comply
with any instructions delivered by the Company with respect to any of the
Company’s shares that have not yet been sold or otherwise disposed of and would
not have been issued or vested based upon the restated financial results.  For this purpose, “net proceeds” shall be net
of any brokerage commissions and amounts paid to the Company to satisfy the
aggregate exercise price and/or tax withholding obligations paid in respect of
the award.  With respect to amounts to be
paid in cash, the form of payment may be a certified cashier check, money
transfer, or other method as approved by the Board of Directors.

 

Other Terms:

 

The Company shall be able to enforce the repayment
obligation described in this policy by all legal means available, including,
without limitation, by withholding such amount from other sums owed to the
affected Executive.

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