# **Exhibit 10.26**

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**Executive Performance Incentive Plan**

**Effective January 1, 2007**

**Performance Period: January 1 – December 31, 2007**

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# **I.****                                         Purposeof the Plan**

**ev3** Inc.’scompensation philosophy is to pay for performance.  The purpose of the **ev3** Inc. Executive Performance Incentive Plan (the “Plan”) isto align the interests of **ev3** Inc.and its subsidiaries (the “Company”), executive-level employees, andstockholders by providing annual incentives for the achievement of key businessand individual performance measures that are critical to the success of theCompany and linking a significant portion of each executive employee’s annualcompensation to the achievement of such measures.

# **II.****                                     EligibleParticipants**

The Company will determine eligibility criteria forthe Plan on an annual basis and in its sole discretion.  For 2007, the Plan covers the following:  (i) all regular, salaried, exempt UnitedStates employees in Levels 6 and above, and (ii) international and expatriate/inpatriateemployees in Levels 6 and above who are determined by the Company to beeligible for participation (“Executives” or “Participants”).  Notwithstanding the foregoing, Participantsin positions covered by sales compensation plans are not eligible Participantsin the Plan.

The Plan year runs from January 1 - December 31 ofeach year (the “Plan Year”).  Payoutswill be made on a quarterly basis (the “Plan Quarter”).  Participants with less than a full PlanQuarter of service or whose incentive target percent has changed during a PlanQuarter may be eligible to participate in the plan on a prorated basis,determined by the percentage of time they were eligible to participate duringthat Plan Quarter under applicable criteria. Participants with less than one full month of eligible service in a PlanQuarter will not be eligible to receive an award under the Plan for that PlanQuarter.

# **III.****                                 Administrationof the Plan**

The Compensation Committee of the Board of Directorsof the Company will administer the Plan. The Compensation Committee, in its sole discretion, may delegate to theCompany’s Chief Executive Officer activities relating to Plan administrationthat are not required to be exercised by the Compensation Committee underapplicable laws, rules, regulations and the Compensation Committee Charter.  Non-delegable activities include, but are notlimited to, final approval of any payouts under the Plan to Executive Officerlevel employees.  Delegable activitiesinclude, but are not limited to, final approval of recommendations regarding payoutsunder the Plan to Executive Officer level employees and to Participants thatare not Executive Officer level employees. All decisions of the Compensation Committee and Chief Executive Officerwill be final and binding upon all parties, including the Company and PlanParticipants.

# **IV.****                                IncentiveTargets**

Incentive targets have been approved by theCompensation Committee, in the case of Participants that are Executive Officerlevel employees, and by the Chief Executive Officer, for all other eligiblePlan Participants, in each case based upon their level of responsibility withinthe Company and impact on the business. These incentive targets represent the incentive (as a percent of a PlanParticipant’s base salary) that a Participant is eligible to receive under thePlan.  It is the Company’s intention toprovide significant incentive and reward opportunities to its Executives forworld-class performance achievement.

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# **V.****                                    IndividualPerformance Measures**

Individual performance measures for a Plan Year areestablished during the annual goal setting process.  Additionally, performance measures areestablished for each of the four quarters of the Plan Year.  For each Plan Quarter, all Participants willbe assigned the Company’s quarterly goals as their individual objectives forthe Plan Quarter.  Individual objectivesfor Executive Officer level employees other than the Company’s quarterly goalsmust be agreed to and approved by the Compensation Committee.  Individual objectives for all otherParticipants other than the Company’s quarterly goals must be agreed to andapproved by the Chief Executive Officer.

# **VI.****                                CompanyPerformance Measures**

For each Plan Quarter, the Compensation Committee,together with input from the Company’s Chief Executive Officer, will identifycritical Company performance measures and determine the incentive pool fundingfor the Plan based on achievement of such Company performance measures.  The 2007 Company performance measures are:

·                  Worldwide Revenue

·                  Worldwide Operating Expense(Controllable) as a % of Revenue

·                  Worldwide Gross Margin

·                  WorkingCapital

·                  Earnings BeforeInterest, Taxes, Depreciation and Amortization, adjusted for Non-Cash, Stock-BasedCompensation (“EBITDA”)

The Compensation Committee, with input from theCompany’s Chief Executive Officer, will take into consideration the relativeperformance by each division of the Company with regard to Divisional Revenue,Operating Expenses, Gross Margin, and Working Capital.

# **VII.****                            IncentivePool Funding**

The incentive pool funding is the amount of money thatis available for distribution to Plan Participants under the Plan based onachievement of the Company performance measures.  Appendix A describes in more detailhow the five Company performance measures will impact the incentive pool funding.The incentive pool is funded quarterly on the following basis:  20% of the annual pool in Q1, 20% of theannual pool in Q2, 20% of the annual pool in Q3 and 40% of the annual pool inQ4.

# **VIII.****                        IndividualIncentive Payment Criteria, Calculation, and Payout**

A Plan Participant must be actively employed by theCompany on the last day of the month of the Plan Quarter to be eligible for anincentive payment under the Plan for that Plan Quarter.

The incentive payment under the Plan for any eligiblePlan Participant for a particular Plan Quarter will vary depending upon theapproved incentive pool funding level for that Plan Quarter, the Participant’sbase salary as of the first day of the last month of the Plan Quarter, theParticipant’s incentive target for that Plan Quarter, and the Participant’soverall individual performance during that Plan Quarter, relative performanceto other Executives and achievement of objectives relative to other eligibleExecutives.  The total of incentivepayments to all eligible Plan Participants may not exceed the funding pool(s)established by the Compensation Committee for each Plan Quarter.

As soon as practicable after the appropriate financialand other data has been compiled after the end of each Plan Quarter, individualincentive payments under the Plan will be determined as follows:  With respect to Participants that are ExecutiveOfficer level employees, the Chief Executive Officer will recommend to theCompensation Committee the amount of each incentive payment to be made

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to each such Plan Participant under the Plan and theCompensation Committee will then approve the final amount of each incentivepayment to be made to each such Plan Participant, taking into account therecommendation of the Chief Executive Officer and such other factors as theCompensation Committee determines appropriate. With respect to all other Participants that are not Executive Officerlevel employees, the Chief Executive Officer will approve the final amount ofeach incentive payment to be made to each such Plan Participant.  All final individual incentive payouts underthe Plan to Participants that are Executive Officer level employees will becertified in writing by the Compensation Committee and all final individualincentive payouts under the Plan to other Participants that are not ExecutiveOfficer level employees will be certified in writing by the Chief ExecutiveOfficer.  Individual incentive paymentsunder the Plan will be made in a lump sum, less applicable withholding taxes,as soon as reasonably practicable after the determination of such payments.

In approving final individual incentive payments underthe Plan, the Compensation Committee, in the case of payments to ExecutiveOfficer level employees, and the Chief Executive Officer, in the case of allother payments under the Plan, reserves the right to recognize individualperformance and to provide appropriate differential incentive compensation.

# **IX.****                                PlanDiscretion**

All benefits payable under thePlan are discretionary and no Plan Participant shall have any right to paymentunder the Plan until actually paid.

To the extent necessary with respect to any PlanQuarter, in order to avoid any undue windfall or hardship due to externalcauses, the Compensation Committee may, without the consent of any affectedPlan Participants, revise one or more of the Company performance measures orotherwise make adjustments to payouts under the Plan to take into account anyacquisition or disposition by the Company not planned for at the time theCompany performance measures were established, any change in accountingprinciples or standards, or any extraordinary or non-recurring event or item,so as equitably to reflect such event or events, such that the criteria forevaluat­ing whether a Company performance measure has been achieved will besubstantially the same (as determined by the Compensation Committee) followingsuch event as prior to such event.

# **X.****                                    Termination,Suspension, or Modification**

The Company may terminate, suspend, modify and ifsuspended, may reinstate or modify, all or part of the Plan at any time, withor without notice to the Plan Participants. Exceptions to the eligibility of, or the extent to which the Planapplies to, any particular Plan Participant must be approved, on a case-by-casebasis, by the Compensation Committee.

# **XI.****                                Limitationof Liability**

No member of the Company’s Boardof Directors, the Compensation Committee, any officer, employee, or agent ofthe Company, or any other person participating in any determination of any questionunder the Plan, or in the interpretation, administration, or application of thePlan, shall have any liability to any party for any action taken, or not taken,in good faith under the Plan.

# **XII.****                            NoRight to Employment**

This document sets forth the terms of the Plan and itis not intended to be a contract or employment agreement between any PlanParticipant and the Company.  Nothing contained in the Plan (or in any otherdocuments related to the Plan) shall confer upon any employee or PlanParticipant any right to continue in the employ or other service of the Companyor constitute any contract or limit in any way

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the right of the Company tochange such person’s compensation or other benefits or to terminate theemployment or other service of such person with or without cause or notice.

# **XIII.****                        Non-Assignability**

Except for the designation of abeneficiary(ies) to receive payments of benefits for a particular Plan Quarterfollowing a Plan Participant’s death after the completion of such Plan Quarter,no amount payable at any time under the Plan shall be subject to sale,transfer, assignment, pledge, attachment, or other encumbrance of anykind.  Any attempt to sell, transfer,assign, pledge, attach, or otherwise encumber any such benefits, whethercurrently or thereafter payable, shall be void.

# **XIV.****                       WithholdingTaxes**

The Company is entitled to withhold and deduct fromany payments made pursuant to the Plan or from future wages of a PlanParticipant (or from other amounts that may be due and owing to the Plan Participantfrom the Company), or make other arrangements for the collection of, alllegally required amounts necessary to satisfy any and all federal, state, andlocal withholding and employment-related tax requirements attributable to anypayment made pursuant to the Plan.

# **XV.****                           UnfundedStatus of Plan**

The Plan shall be unfunded.  No provisions of the Plan shall require theCompany, for the purpose of satisfying any obligations under the Plan, topurchase assets or place any assets in a trust or other entity to whichcontributions are made or otherwise to segregate any assets.  Plan Participants shall have no rights underthe Plan other than as unsecured general creditors of the Company.

# **XVI.****                       Other**

Except to the extent in connection with other mattersof corporate governance and authority (all of which shall be governed by thelaws of the Company’s jurisdiction of incorporation), the validity,construction, interpretation, administration and effect of the Plan and anyrules, regulations, and actions relating to the Plan will be governed by andconstrued exclusively in accordance with the internal, substantive laws of theState of Minnesota, without regard to the conflict of law rules of the State ofMinnesota or any other jurisdiction.

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