Exhibit 10.1

COVIDIEN LTD. EMPLOYEE STOCK PURCHASE PLAN

 

ARTICLE 1

PURPOSE

The Covidien Ltd. Employee Stock Purchase Plan (the “Plan”) is created for the
purpose of encouraging stock ownership by officers and employees of Covidien
Ltd. (the “Company”) and its subsidiaries so that they may share in growth of
the Company by acquiring or increasing their proprietary interest in the
Company.

ARTICLE 2

ADMINISTRATION OF THE PLAN

The Plan is administered by the Compensation and Human Resources Committee, a
committee of the Board of Directors of the Company (the “Committee”). The
Committee may delegate its authority and responsibility for plan administration
to a committee or an officer or group of officers, as it deems advisable. The
interpretation and construction by the Committee, or its delegate, of any
provision of the Plan shall be final and binding on all parties. The Committee,
or its delegate, may adopt, from time to time, such rules and regulations, as it
deems appropriate for carrying out the Plan. No member of the Board of Directors
or the Committee, or its delegate, shall be liable for any action or
determination made in good faith with respect to the Plan.

ARTICLE 3

ELIGIBLE EMPLOYEES

The Company will, from time to time, determine which of its employees (including
employees of its subsidiaries and divisions) will be eligible to participate in
the Plan. All officers who are employees of the Company will be eligible to
participate in the Plan. Eligible employees who elect to participate in the Plan
shall hereinafter be referred to as “Participants.”

 

ARTICLE 4

SHARES TO BE PURCHASED

The stock subject to purchase under the Plan is 5,000,000 shares (subject to
adjustment in the event of stock splits, stock dividends, recapitalization, or
similar adjustment in the Company’s common stock) of the common stock of the
Company (the “Shares”) which will be purchased on the open market.

ARTICLE 5

PAYROLL DEDUCTIONS

Participants, upon entering the Plan, shall authorize payroll deductions to be
made for the purchase of Shares. The maximum deduction shall not, on a per pay
period basis, exceed a Participant’s base salary or commission (in the case of
an employee who receives commission and no base salary) and deductions shall be
exclusive of overtime and net withholding and other deductions. The Participant
may authorize increases or decreases in the amount of payroll deductions at any
time. In order to effect such a change in the amount of the payroll deductions,
the Company must receive notice of such change in the manner specified by the
Company and changes will take effect as soon as administratively practicable.
The Company will accumulate and hold for the Participant’s account the amounts
deducted from his/her pay. No interest shall be paid on such amounts.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
authorize a special bonus payment be made to a Participant and such bonus be
designated as an employee contribution. The Company will match such employee
contribution, subject to the limit described in the next Article. The bonus may
exceed the contribution limits otherwise imposed on the Participant.

ARTICLE 6

EMPLOYER CONTRIBUTION

The Company will match a part of the employee contribution by contributing to
the Plan an additional

 

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percentage of the employee’s payroll deduction. The Committee, from time to
time, may increase or decrease the percentage of the Company’s contribution to
the Participant’s payroll deduction if the interests of the Company so require.
The Company shall not match any part of an employee’s contribution that exceeds
twenty-five thousand dollars (US) ($25,000.00) during a single calendar year.
The matching contributions hereunder are not intended to be entitlement or part
of the regular compensation of any Participant. The Company will pay all
commissions relating to the purchase of the Shares under the Plan, and the
Company will pay all administrative costs associated with the implementation and
operation of the Plan.

ARTICLE 7

AUTHORIZATION FOR ENTERING THE PLAN

An eligible employee may enter the Plan by enrolling in the Plan and specifying
his/her contribution amount in the manner authorized by the Company. Such
authorization will take effect as of the next practicable payroll period. Unless
a Participant authorizes changes to his/her payroll deductions in accordance
with Article 5 or withdraws from the Plan, his/her deductions under the latest
authorization on file with the Company shall continue from one payment period to
the succeeding payment period as long as the Plan remains in effect.

ARTICLE 8

PURCHASE OF SHARES

All Shares purchased under the Plan shall be purchased on the open market by a
broker designated, from time to time, by the Committee. On a monthly basis, as
soon as practicable following the month end, the Company shall remit the total
of contributions to the broker for the purchase of the Shares. The broker will
then execute the purchase order and the Plan Administrator shall allocate Shares
(or fraction thereof) to each participant’s individual recordkeeping account. In
the event the purchase of Shares takes place over a number of days and at
different prices, then each participant’s allocation shall be adjusted on the
basis of the average price per Share over such period.

 

ARTICLE 9

ISSUANCE OF SHARES

The Shares purchased under the Plan shall be held by the Plan Administrator or
its nominee. Participants shall receive periodic statements that will evidence
all activity in the accounts that have been established on their behalf. Such
statements will be issued by the Plan Administrator or its nominee. In the event
a Participant wishes to hold certificates in his/her own name, the Participant
must instruct the Plan Administrator or its nominee independently and bear the
costs associated with the issuance of such certificates and pay, if required, a
small fee for each certificate so issued. Certificates for fractional Shares
will not be issued. Fractional Shares shall be liquidated on a cash basis only
in lieu of the issuance of certificates for such fractional Shares upon the
employee’s withdrawal.

ARTICLE 10

DIVIDEND REINVESTMENT

Any dividends paid to a Participant for Shares purchased under the Plan shall be
paid in cash except where the Participant voluntarily elects to reinvest such
dividends in Shares of the Company in accordance with such rules or procedures
as may be established by the Company from time to time.

ARTICLE 11

SALE OF SHARES PURCHASED

UNDER THE PLAN

Each Participant may sell at any time all or any portion of the Shares acquired
under the Plan and held by the Plan Administrator for at least three months by
notifying the Plan Administrator, who will direct the broker to execute the sale
on behalf of the Participant. The Participant shall pay the broker’s commission
and any other expenses incurred with regard to the sale of the Shares. All such
sales of the Shares will be subject to compliance with any

 

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applicable federal or state securities, tax, or other laws. Each participant
assumes the risk of any fluctuations in the market price of the Shares.

ARTICLE 12

WITHDRAWAL FROM THE PLAN

A Participant may cease making contributions to the Plan at any time by changing
his/her payroll deduction to zero as described in Article 5. In order to execute
a sale of all or part of the Shares purchased under the Plan and held by the
Plan Administrator for at least three months, the Participant must contact the
Plan Administrator directly. If the Participant desires to withdraw from the
Plan by liquidating all or part of his/her shareholder interest, he/she shall
receive the proceeds from the sale thereof, minus the commission and other
expenses on such sale.

ARTICLE 13

NO TRANSFER OR ASSIGNMENT

A Participant’s right to purchase Shares under the Plan through payroll
deduction is his/hers alone and may not be transferred or assigned to, or
availed of, by any other person.

ARTICLE 14

TERMINATION OF EMPLOYEE RIGHTS

All of the employee’s rights under the Plan will terminate when he/she ceases to
be an eligible employee due to retirement, resignation, death,

termination, or any other reason. A notice of withdrawal will be deemed to have
been received from a Participant on the day of his/her final payroll deduction.
If a Participant’s payroll deductions are interrupted by any legal process, a
withdrawal notice will be deemed as having been received on the day the
interruption occurs.

ARTICLE 15

TERMINATION AND AMENDMENT TO

THE PLAN

The Plan may be terminated at any time by the Company’s Board of Directors. Upon
such termination, or any other termination of the Plan, all payroll deductions
not used to purchase Shares will be refunded. The Board of Directors also
reserves the right to amend the Plan, from time to time, in any respect and
authorizes the Committee to approve amendments to the Plan on its behalf.

ARTICLE 16

LOCAL TAX LAWS

If the provisions of the Plan contradict local tax laws, the local tax laws
shall prevail.

 

March 2008