Exhibit 10.7


 


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.
and its subsidiaries (the “Company”) 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”.


 


Notwithstanding
the foregoing, any employee who sells Shares purchased under the Plan within
three (3) months of the date of purchase shall be precluded from participating
in the Plan for the next twelve (12) months.


 


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 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


 


AUTOMATIC
DIVIDEND REINVESTMENT


 


Any
dividends paid to Participants for Shares purchased under the Plan and held by
the Plan Administrator shall be automatically reinvested in the Shares of the
Company.


 


ARTICLE 11


 


SALE
OF SHARES PURCHASED 

UNDER THE PLAN


 


Each
Participant may sell at any time all of any portion of the Shares acquired
under the Plan and held by the Plan Administrator 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 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, 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.


 


IN
WITNESS WHEREOF, this restated and amended Plan as been duly signed for and on
behalf of the Company on June    , 2007.


 


	
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  Title: