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Exhibit 10.1




Addendum: Medtronic, Inc. — Kyphon Inc. 2002 Stock Plan



Dated December 13, 2007




          Effective from and after the date hereof (the “Effective Date”), this addendum
(“Addendum”) to the Medtronic, Inc. — Kyphon Inc. 2002 Stock Plan, as such may be amended
from time to time (the “Plan”), hereby amends the Plan and shall govern any award made
pursuant to any Option Agreement, Restricted Stock Purchase Agreement or Restricted Stock Unit
Agreement, or otherwise, issued thereunder on or after the Effective Date hereof. Capitalized
terms contained but not defined in this Addendum shall have the meaning provided in the Plan.



     1. The definition of “Change in Control” set forth in Section 2(d) is hereby replaced in its
entirety with the following provision:



     “Change in Control” means, except as otherwise provided in the applicable Option Agreement,
Restricted Stock Purchase Agreement or Restricted Stock Unit Agreement, the occurrence of any of
the following events:


(i) Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Act
or any successor thereto (a “Person”) becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the Act) of 30% or more of either (A) the then outstanding Shares (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that, the following acquisitions
shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any
acquisition by the Company or any of its Subsidiaries, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any of its Subsidiaries, (4) any
acquisition by an underwriter temporarily holding securities pursuant to an offering of such
securities or (5) any acquisition pursuant to a transaction that complies with clauses (iii) (A),
(B) and (C) below; or



(ii) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least a majority of the
Incumbent Directors then on the Board shall be considered as though such individual was an
Incumbent Director, but excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election contest or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or



(iii) Consummation of a reorganization, merger, statutory share exchange or consolidation (or
similar corporate transaction) involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business




 









 







Combination”), in each case, unless, immediately following such Business Combination, (A)
substantially all of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock (or, for a non-corporate entity,
equivalent securities) and the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing body), as the case may
be, of (1) the entity resulting from such Business Combination (the “Surviving Corporation”) or (2)
if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of
80% or more of the voting securities eligible to elect directors of the Surviving Corporation (the
“Parent Corporation”), in substantially the same proportion as their ownership, immediately prior
to the Business Combination, of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (B) no person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is
or becomes the beneficial owner, directly or indirectly, of 30% or more of the outstanding shares
of common stock and the total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (C) at least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the
consummation of the Business Combination were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business Combination; or



(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the
Company.




     2. Section 3 is hereby amended by deleting clause (c) in the first paragraph thereof in its
entirety.



     3. Section 14(d) of the Plan is hereby replaced in its entirety with the following provision:



     Notwithstanding anything contained in this Plan to the contrary, unless otherwise provided in
the applicable Option Agreement, Restricted Stock Purchase Agreement or Restricted Stock Unit
Agreement, in the event of a Change in Control the following shall occur as of the effective date
of such Change in Control with respect to any and all awards outstanding as of the effective date
of such Change in Control: (i) any and all Options and Stock Purchase Rights granted hereunder
shall vest in full and become immediately exercisable, and shall remain exercisable throughout
their entire term; (ii) any restrictions imposed on Restricted Stock Units shall lapse. The awards
shall be paid in cash, or in the sole discretion of the Committee, in Shares to Participants within
thirty (30) days following the effective date of the Change in Control, with any such Shares valued
at the Fair Market Value as of the effective date of the Change in Control. Notwithstanding
anything to the contrary herein or in the Plan, with respect to any award subject to, and not
exempt from, the provisions of Section 409A of the Code, the applicable award agreement shall
provide for the acceleration of payment of such award only in the event of a



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Change in Control that qualifies as a change in ownership or change in effective control of
the Company under Section 409A of the Code.




     4. The Plan and each Option Agreement, Restricted Stock Purchase Agreement or Restricted Stock
Unit Agreement are intended to comply with the requirements of Section 409A of the Code and any
regulations promulgated thereunder, and shall be construed accordingly.




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