Exhibit
10.2


 





 


NON-QUALIFIED STOCK OPTION AGREEMENT


2003 LONG-TERM INCENTIVE PLAN


 


Optionee’s Name


Optionee’s Address


Grant Date


Number of Options Granted


Option Price


Aggregate Option Price


 


1.                                       The
Option.  Medtronic, Inc., a Minnesota
corporation (the “Company”), hereby grants to the individual named above (the “Optionee”),
as of the above Grant Date, an option (the “Option”) to purchase the above
number of shares of common stock of the Company (the “Common Stock”), for the
above Option Price Per Share, on the terms and conditions set forth in this
Non-Qualified Stock Option Agreement (this “Agreement”) and in the Medtronic,
Inc. 2003 Long-Term Incentive Plan (the “Plan”).  In the event of any inconsistency between the
terms of the Agreement and the Plan, the terms of the Plan shall govern.  Capitalized terms not defined in this
Agreement shall have the meanings ascribed to them in the Plan.


 


2.                                       Exercise
of Option.  The exercise of the
Option is subject to the following conditions and restrictions:


 


(a)                                  Expiration.  The Option may be exercised in whole or in
part, from time to time, during the period commencing on the Grant Date and
ending on the earlier of (i) the above Expiration Date, or (ii) the expiration
of the applicable period following your termination of employment with the
Company or one of its subsidiaries, as provided in Section 2(f) below.


 


(b)                                 Schedule of Exercisability.  The Option shall be 100% vested and
exercisable commencing on the Grant Date.


 


(c)                                  Death.  If your employment with the Company
terminates due to your death, the unexercised portion of the Option will
continue to be exercisable until the Expiration Date, and may be exercised by
your Successor (as defined below) at any time, or from time to time, until such
Expiration Date.  For purposes of this
Agreement, the term “Successor” shall mean the legal representative of your
estate or the person or persons who may, by bequest or inheritance, or valid
beneficiary designation (as provided in Section 15 of the Plan), acquire the right to exercise the Option.


 


(d)                                 Disability or Retirement.  If your employment with the Company
terminates due to your Disability or Retirement (as each such term is defined
below), you may exercise your Option at any time, or from time to time, until
the Expiration Date.  For purposes of
this Agreement, the terms “Disability” and 
“Retirement” shall have the meanings ascribed to those terms under any
retirement plan of the Company which is qualified under Section 401 of the
Code  (which currently provides for retirement
on or after age 55, provided you have been employed by the Company and/or one
or more Affiliates for at least ten years, or retirement on or after age 62),
or under any disability or retirement plan of the Company or any Affiliate
applicable to you due to employment by a non-U.S. Affiliate or employment in a
non-U.S. location, or as otherwise determined by the Committee.


 


(e)                                  Job Elimination.  If your employment terminates by reason of
Job Elimination, the unexercised portion of the Option will continue to be
exercisable until the Expiration Date. 
For purposes of this Section 2(e), “Job Elimination” shall mean
termination of your employment due to facility closure, layoff or other
broad-based termination of employment effected for business purposes.


 


(f)                                    Termination for Any Other Reason.  In the event your employment with
the Company terminates for any reason other than those specified in Sections
2(c),  2(d), and
2(e), you may exercise the unexercised portion of the Option for thirty (30)
days following the date of termination of your employment.  At 11:00 p.m.CT (midnight ET) on the date 30
days after the date of termination of your employment, the Option will expire.


 


(g)                                 Expiration
of Term.  Notwithstanding the
foregoing paragraphs (a)-(f), in no event shall the Option be exercisable after
the Expiration Date.


 


3.                                       Manner of Exercise.  To
exercise your Option, you must deliver notice of exercise (the “Notice”) to UBS
Financial Services.  The Notice must
specify the number of shares of Common Stock (the “Shares”) as to which the
Option is being exercised and must be accompanied by payment of the purchase
price for the Shares in cash, check, or by the 


 





















 


delivery of Common Stock already
owned by the Optionee, or by a combination thereof, pursuant to such forms and
subject to such conditions as may be prescribed from time to time by the
Committee.


 


Exercise shall be deemed to occur on the earlier of
the date the Notice and option cost payment are received by UBS Financial
Services or the date you simultaneously exercise the Option and sell the
shares, using the proceeds from such sale to pay the purchase price.


 


4.                                       Withholding Taxes.  You
are responsible for payment of any federal, state, local or other taxes which
must be withheld upon the exercise of the Option, and you must promptly pay to
the Company any such taxes.  The Company
and its subsidiaries are authorized to deduct from any payment owed to you any
taxes required to be withheld with respect to the Shares, including social
security and Medicare (FICA) taxes and federal, state and local income tax with
respect to income arising from the exercise of the Option.  The Company shall have the right to require
the payment of any such taxes before issuing any Shares pursuant to an exercise
of the Option.  In lieu of all or any
part of a cash payment, you may elect to have a portion of the Shares otherwise
issuable upon exercise of the Option withheld by the Company to satisfy all or
part of the withholding tax requirements relating to the Option exercise with
such Shares valued in the same manner as used in computing such withholding
taxes.  Any fractional share amount due
relating to such tax withholding will be rounded up to the nearest whole share
and the additional amount will be added to your federal withholding.


 


5.                                       Transferability.  Upon
prior written approval of the Corporate Secretary of the Company, in his or her
discretion, this Option may be transferred to a member of your “immediate
family” (as such term is defined in Rule 16a-1(e) promulgated under the
Exchange Act, or any successor rule or regulation) or to one or more trusts
whose beneficiaries are members of your “immediate family” or  partnerships in which such family members are
the only partners; provided, however, that (1) you receive no consideration for
the transfer and (2) the transferred Option shall continue to be subject to the
same terms and conditions as were applicable to such Option immediately prior
to its transfer.


 


6.                                       Conversion to Stock-Settled Stock Appreciation Rights.  At any time following the Grant
Date, the Company may convert this Option to a stock-settled Stock Appreciation
Right.  Upon exercise of a Stock
Appreciation Right, you shall receive Common Stock with a value equal to the
excess of the Fair Market Value of the Shares on the date of exercise over the
aggregate of (a) the Option Price Per Share multiplied by the number of Shares
and (b) the amount of any taxes required to be withheld as a result of such
exercise.


 


7.                                       Agreement.  Your
receipt of the Option and this Agreement constitutes your agreement to be bound
by the terms and conditions of this Agreement and the Plan.


 


Shareholder Services, MS LC 310


Medtronic, Inc.


710 Medtronic Parkway


Minneapolis, MN 55432


(763.505.3030)