Document:

2005 Executive Officer Bonus Plan

 Exhibit 10.47 
  
 2005 Executive Officer Bonus Plan 
  
 Objective: 
  

	 	•	 	Align the interests of employees and shareholders in the future growth and success of ArthroCare Corporation (the “Company”) by rewarding employee performance.

  
 Bonus Pool: 
  

	 	•	 	Up to 100% of the Total Bonus Potential of all Eligible Participants during the period of January 1, 2005 through December 31, 2005 (the “Bonus Period”). The Total Bonus
Potential for an Eligible Participant will be the Eligible Participant’s Bonus Potential, whereby 25% of the Eligible Participant’s Bonus Potential will be paid at midyear. For example, the Total Bonus Potential for an Eligible Participant
(other than the Company’s CEO) with a base salary of $100,000 shall be $50,000. The Total Bonus Potential of an Eligible Participant, other than the Chief Executive Officer, may be increased or decreased at the sole discretion of the Chief
Executive Officer of the Company. The Total Bonus Potential of the Chief Executive Officer may be increased or decreased at the sole discretion of the Board of Directors of the Company. 

  
 Eligible Participants: 
  

	 	•	 	All executive officers of the Company from the period of January 1, 2005 through the payment date of a bonus (the “Bonus Payment Date”) who began employment with the
Company on or before December 31, 2005 and are not ineligible due to performance issues, as approved by the Compensation Committee of the Company’s Board of Directors. Pro rata eligibility for executive officers who start after January
1, 2005 and remain employed by the Company through the Bonus Payment Date. 

  
 Bonus Potential: 
  

	 	•	 	50% of base salary for fiscal year end December 31, 2005 for Section 16 Vice Presidents 

  

	 	•	 	60% of base salary for fiscal year end December 31, 2005 for Chief Executive Officer 

  
 Bonus Factors: 
  

	 	•	 	In the event the Company achieves at least 85% (the “Minimum Achievement Level”) of the Sales Goal, and Earnings before Income Tax Depreciation Amortization and non-cash
equity Compensation (EBIT-DAC) Goal, a bonus will be due to each Eligible Participant. The Sales Goal, and EBIT-DAC Goal shall be as set forth in the Company’s operating budget for the period of January 1, 2005 through December 31, 2005, as
approved by the Company’s Board of Directors. 

	 	•	 	Each of the Sales Goal, and EBIT-DAC Goal shall be ascribed a percentage weight totaling 100% in the aggregate, as follows: 

  
 Sales Goal – 70% 
  
 EBITDAC Goal – 30% 
  

	 	•	 	The Minimum Achievement Level is determined by adding the weighted average of the Sales Goal (i.e., Sales Goal Achieved (as defined below) multiplied by 70%), plus the weighted
average of the EBIT-DAC Goal (same formula). If the sum of these percentages is equal to or greater than 85%, a bonus is payable. 

  

	 	•	 	If the Bonus Achievement Level is between 85% and 100%, then Eligible Participants are eligible for the percentage of their Total Bonus Potential actually achieved. For example, if
the Bonus Achievement Level is 90%, then Eligible Participants are eligible for 90% of their Total Bonus Potential. 

  
 Bonus Multiplier: 
  

	 	•	 	If the Bonus Achievement Level is in excess of 100%, then Eligible Participants are eligible for 100% of their Total Bonus Potential, plus a percentage of their Total Bonus
Potential equal to three times the portion in excess of 100%. For example, if the Bonus Achievement Level is 110%, then Eligible Participants are eligible for 100% of their Total Bonus Potential, plus 30% of the Total Bonus Potential.

  
 Defined Terms: 
  
 Sales shall mean the amount of ArthroCare products sold from the
period of January 1, 2004 through March 31, 2005. 
  
 EBITDAC
shall mean Earnings before Income Tax, Depreciation, Amortization and non-cash equity Compensation. 
  
 Sales Goal Achieved shall mean the percentage determined by dividing Sales by the Sales Goal. 
  
 EBITDAC Goal Achieved shall mean the percentage determined by
dividing the EBITDAC by the EBITDAC Goal. 
  
 Bonus
Achievement Level shall mean the actual level of bonus achieved. 
  
 Any
bonuses payable under this 2005 Bonus Plan are subject to the approval of the Company’s Board of Directors. The Company has the right to make changes in plan participation, the bonus pool or any other aspect of this plan at any time and without
prior notice.Form of Option Agreement under the Amended and Restated 2003 Incentive Plan

 Exhibit 10.48 
  
 ARTHROCARE CORPORATION 
  
 AMENDED AND RESTATED 2003 INCENTIVE STOCK PLAN 
  
 STOCK OPTION AGREEMENT 
  
 ArthroCare Corporation (the “Company”), pursuant to its Amended and Restated 2003 Incentive Stock Plan (the “Plan”), hereby
grants to the Optionee listed below (“Optionee”), an option to purchase the number of shares of the Company’s Common Stock set forth below, subject to the terms and conditions of the Plan and this Stock Option Agreement. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Option Agreement. 
  

	I.	NOTICE OF STOCK OPTION GRANT 

  

			
	Optionee:	 	 
		
	Date of Grant:	 	 
		
	Vesting Commencement Date:	 	 
		
	Exercise Price per Share:	 	$
		
	Total Number of Shares Granted:	 	 
		
	Total Exercise Price:	 	$
		
	Term/Expiration Date:	 	7 years from Date of Grant

  

					
	Type of Option:	 	 ̈  Incentive Stock Option	  	 ̈  Nonstatutory Stock Option
		
	Vesting Schedule:	 	The Shares subject to this Option shall vest according to the following schedule:
		
	 	 	[Twenty-five percent (25%) of the Shares subject to the Option (rounded down to the next whole number of shares) shall vest one year after the Vesting Commencement Date, and one
forty-eighth (1/48th) of the Shares subject to the Option (rounded down to the next whole number of shares) shall
vest on the first day of each full month thereafter, so that all of the Shares shall be vested on the first day of the forty-eighth (48th) month after the Vesting Commencement Date.]
		
	 	 	or
		
	 	 	[One forty-eighth (1/48th) of the Shares
subject to the Option (rounded down to the next whole number of shares) shall vest one month after the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject to the Option (rounded down to the next whole number of shares) shall vest on the first day of each full month thereafter, so that all of the Shares shall be vested on the first
day of the forty-eighth (48th) month after the Vesting Commencement Date.]

					
	Termination Period:	 	This Option may be exercised, to the extent vested, for thirty (30) days after the termination of the Optionee’s Continuous Status as an Employee or Consultant, or such
longer period as may be applicable upon the death or Disability of Optionee as provided herein (or, if not provided herein, then as provided in the Plan), but in no event later than the Term/Expiration Date as provided above.

  

	II.	AGREEMENT 

  
 1. Grant of Option. The Company hereby grants to the Optionee an Option to purchase the Common Stock (the “Shares”) set forth in the
Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”). Notwithstanding anything to the contrary anywhere else in this Option Agreement, this grant of an Option is subject to the terms,
definitions and provisions of the Plan adopted by the Company, which is incorporated herein by reference. 
  
 If designated in the Notice of Grant as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section
422 of the Code; provided, however, that to the extent that the aggregate Fair Market Value of stock with respect to which Incentive Stock Options (within the meaning of Code Section 422, but without regard to Code Section 422(d)), including the
Option, are exercisable for the first time by the Optionee during any calendar year (under the Plan and all other incentive stock option plans of the Company or any Subsidiary) exceeds $100,000, such options shall be treated as not qualifying under
Code Section 422, but rather shall be treated as Nonstatutory Stock Options to the extent required by Code Section 422. The rule set forth in the preceding sentence shall be applied by taking options into account in the order in which they were
granted. For purposes of these rules, the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted. 
  
 2. Exercise of Option. This Option is exercisable as follows: 
  
 (a) Right to Exercise. 
  
 (i) This Option shall be exercisable cumulatively according to the vesting schedule set out in the Notice of Grant. For purposes of this Stock Option
Agreement, Shares subject to this Option shall vest based on Optionee’s Continued Status as an Employee or Consultant. 
  
 (ii) This Option may not be exercised for a fraction of a Share. 
  

(iii) In the event of Optionee’s death, Disability or other termination of the Optionee’s Status as an Employee or Consultant, the
exercisability of the Option is governed by Sections 5, 6 and 7 below. 
  
 (iv) In no event may this Option be exercised after the date of expiration of the term of this Option as set forth in the Notice of Grant. 
  
 (b) Method of Exercise. This Option shall be exercisable by written Notice in a form designated by the Company. The Notice must state the number of
Shares for which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Notice must be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The Notice must be accompanied by payment of the Exercise Price, including payment of any applicable withholding tax. This Option shall be deemed to be
exercised upon receipt by the Company of such written Notice accompanied by the Exercise Price and payment of any applicable withholding tax. 
  

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 No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise
comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date
on which the Option is exercised with respect to such Shares. 
  
 3. Lock-Up Period. Optionee hereby agrees that if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of
the Company under the Securities Act, Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed
to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act. The Company may impose stop-transfer instructions with respect to
securities subject to the foregoing restrictions until the end of such Market Standoff Period. 
  
 4. Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination thereof, subject to the consent of the Administrator: 
  
 (a) cash; 
  
 (b) check; 
  
 (c) delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the option and delivery to the Company of the sale or loan proceeds required to pay the exercise price; 
  
 (d) a reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s participation in any
Company-sponsored deferred compensation program or arrangement; 
  
 (e) any combination of the foregoing methods of payment; or 
  
 (f) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
  
 5. Termination of Relationship. Upon termination of Optionee’s Continuous Status as an Employee or Consultant, other than upon the
Optionee’s death or Disability, the Optionee may exercise his or her Option, but only within such period of time as is specified in the Notice of Grant, and only to the extent that the Optionee was entitled to exercise it at the date of
termination (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant). If, after the termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the
Option shall terminate. 
  
 6. Disability of Optionee. In
the event that an Optionee’s Continuous Status as an Employee or Consultant terminates as a result of the Optionee’s Disability, the Optionee may exercise this Option at any time within twelve (12) months from the date of such termination,
but only to the extent that the Optionee was entitled to exercise it at the date of such termination (but in no event later than the expiration of the of the term of his or her Option as set forth in the Notice of Grant). If, after termination, the
Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate. 
  
 7. Death of Optionee. In the event of the death of an Optionee, the Optionee may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such Option as set forth in the notice of Grant), by the Optionee’s estate or by a 
  

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 person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent that the Optionee
was entitled to exercise the Option at the date of death. If, after death, the Optionee’s estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein,
the Option shall terminate. 
  
 8. Non-Transferability of
Option. This Option may not be transferred in any manner except by will or by the laws of descent or distribution . It may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee. 
  
 9. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant. 
  
 10. Governing Law. This Option shall be governed by and construed in accordance with the laws of the State of Delaware. 
  
 [Signature page follows] 
  

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 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and
all of which shall constitute one document. 
  

			
	ARTHROCARE CORPORATION
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

  
 OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE. 
  
 Optionee acknowledges receipt of a copy of the Plan and represents that he is
familiar with the terms and provisions thereof. Optionee hereby accepts this Option subject to all of the terms and provisions hereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the
Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

			
	Dated:                     	 	  

	 	 	[OPTIONEE] (Signature)
		
	 	 	Residence Address:
	 	 	  

	 	 	  

  

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