Document:

Exhibit
10.12

July    ,
2007

PERSONAL & CONFIDENTIAL

First Name MI. Last Name

Address

City, State, Zip Code

Dear                         :

As part of the
compensation package for members of the Board of Directors of Covidien Ltd.
(the “Company”), you have been awarded 2,090 restricted stock units (the “Units”)
pursuant to Section 4.7 of the Covidien Ltd. 2007 Stock and Incentive Plan (the
“Plan”), a copy of which is enclosed herewith. 
This RSU Letter Agreement describes the material terms of the grant.

The effective date
of the grant is July 2, 2007, and the
number of Units granted represents the value of ninety-thousand dollars (US)
($90,000.00) divided by the volume weighted average price of Covidien common
stock as reported on the New York Stock Exchange on July 2, 2007, which was
$43.0878 (US).  All Units will vest as of the date of the Company’s 2008 Annual Meeting,
subject to forfeiture due to a Termination of Directorship for Cause (as
described below).

If on any date the Company shall pay any cash dividend on common
shares of the Company, par value US $0.20 per common share, (the “Shares”), the
number of Units credited to you shall, as of such date, be increased by an
amount determined by the following formula:

W = (X multiplied by Y) divided by Z, where:

W = the number of additional Units to be credited to you on such
dividend payment date;

X = the aggregate number of Units credited to you as of the record date
of the dividend;

Y = the cash dividend amount; and

Z = the Fair Market Value per Share on the dividend payment date.  Fair Market Value is the average of the high
and low sale price.

In the case of a dividend
payable in property other than Shares or cash, the per Share value of such
dividend shall be the same as applied to all other shareholders of the Company
as is determined in good faith by the Board.

In the case of a
dividend paid on Shares in the form of Shares, the number of Units credited to
you shall be increased by a number equal to the product of (i) the aggregate
number of Units that have been credited to you through the related dividend
record date, and (ii) the number of Shares (including any fraction thereof)
payable as a dividend on a Share.  The
number and terms of the Units shall be adjusted in accordance with the
provisions of the Plan.

Upon the first to
occur of (i) 30 days following Termination of Directorship (except in the event
of Cause), or (ii) a Change in Control, the Company shall issue to you a number
of Shares equal to the aggregate number of vested Units credited to you on such
date in full satisfaction of such Units; provided, however, that in the event
that the Company is involved in a transaction in which the Shares will be
exchanged for cash, the Company shall issue to you immediately prior to the
consummation of such transaction a number of Shares equal to the aggregate
number of vested Units credited to you on such date.  Immediately after such issuance of Shares,
all Units standing to your credit shall terminate
immediately and be of no further force or effect.  Any fractional Unit shall be rounded up to
the next whole Share as no fractional Shares shall be issued.

As set forth in the Plan, Termination of Directorship for “Cause” occurs
when an individual ceases to be a Director by reason of his or her
removal by the Board for misconduct that is willfully or wantonly harmful to
the Company.  In such event, all Units
will be immediately forfeited.

The terms and
conditions of the Plan are incorporated herein by reference and any conflict
between the terms and conditions
of this Letter Agreement and the Plan shall be governed by the terms and
conditions of such Plan.

Since this is a
restricted stock unit award, generally, under U.S. tax rules, federal income
tax (including self-employment tax for non-employee directors) will be due when
the Shares vest.  If you are subject to
taxes in a jurisdiction other than the U.S., please contact your tax advisor on
the tax reporting requirements.

You cannot sell,
assign, exchange, pledge or otherwise transfer the Units.  If you remain an affiliate of the Company
after the Shares are issued, or were an affiliate of the Company within the
three month period prior to sale of the Shares, there may be various
restrictions on the disposition of the Shares. 
If this is the case, the Company should be notified if you desire to
dispose of the Shares in order to determine whether the disposition may be made
without violating applicable law.

If you have any
questions about the Plan, please call me at.

Please sign and
return a copy of this RSU Letter Agreement and the enclosed acceptance letter
to:

	
   

  	
  Covidien Ltd.

  	
   

  
	
   

  	
  c/o John W.
  Kapples

  	
   

  
	
   

  	
  Second Floor, 90
  Pitts Bay Road

  	
   

  
	
   

  	
  Pembroke HM 08
  Bermuda

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sincerely,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  John W. Kapples

  	
   

  	
   

  
	
  Vice President
  and Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  cc:  Richard
  J. Meelia

  	
   

  	
   

  

 

 2Exhibit 10.13

Covidien Ltd.

2007 Stock and Incentive Plan

TERMS
AND CONDITIONS

OF

DIRECTOR’S OPTION AWARD

OPTION AWARD granted on
July 2, 2007 (the “Grant Date”) to                                   .

1.                                       Grant of Option.  Covidien
Ltd. (the “Company”) has granted to you an Option to purchase 9,600 Shares of
Common Stock, subject to the provisions of these Terms and Conditions and the
Plan.  This Option is a Nonqualified Stock
Option.

2.                                       Exercise Price. 
The Exercise Price required to purchase the Shares covered by this
Option is $43.0878 (US) per Share.

3.                                       Vesting and Exercise Period.  Except
as provided below, Shares subject to this Option will vest 1/3rd on the 1st Anniversary of the Grant Date, 1/3rd on the 2nd Anniversary of the Grant Date and the remainder
on the 3rd Anniversary of the Grant Date.  If you terminate directorship before full (100%)
vesting, you will forfeit the unvested portion of this Option.  Upon your Termination of Directorship (other
than for Cause) you may exercise the vested portion of your Option until
the earlier of (i) the date described in Section 4 below or (ii) 90 days after
your Termination of Directorship.  Notwithstanding the foregoing, if your
directorship terminates as a result of your death, Disability, or a Change in
Control, you will become fully vested in this Option on the date of your
death, Termination of Directorship due to Disability, or the Change in Control
and be entitled to exercise this Option until the earlier of (A) the date
described in Section 4 below or (B) the third anniversary of the date of your
death, Termination of Directorship due to Disability or the Change in Control,
as applicable.

4.                                       Term of Option.  Unless
this Option has been terminated or cancelled, it must be exercised before the
close of the New York Stock Exchange (“NYSE”) on the day prior to the 10th anniversary of the Grant Date.  If the NYSE is not open for business on such date,
this Option will expire at the close of the NYSE’s first business day that
immediately precedes the day prior to the 10th anniversary of the Grant Date.

5.                                       Payment of Exercise Price.  To
exercise all or a portion of this Option, you must pay the Exercise Price for
each Share as set forth above.  You may
pay the Exercise Price in cash or by certified check, bank draft, wire transfer
or postal or express money order.  You
may also pay the Exercise Price by using one or more of the following methods:
(i) delivering to the Company a properly executed exercise notice, together
with irrevocable instructions to a broker to deliver promptly (within the
typical settlement cycle for the sale of equity securities on the relevant
trading market, or otherwise in accordance with Regulation T issued by the
Federal Reserve Board) to the Company sale or loan proceeds adequate to satisfy
the portion of the Exercise Price being so paid; (ii) if expressly approved by
the Committee, tendering to the Company (by physical delivery or attestation)
certificates of Common Stock that you have held for 6 months or longer (unless
the Committee, in its discretion, waives this 6-month period) and that have an
aggregate Fair Market Value as of the day prior to the date of exercise equal
to the portion of the Exercise Price being so paid; or (iii) if such form of
payment is expressly 

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authorized by the Board
or the Committee, instructing the Company to withhold Shares that would
otherwise be issued were the Exercise Price to be paid in cash and that have an
aggregate Fair Market Value as of the date of exercise equal to the portion of
the Exercise Price being so paid. 
Notwithstanding the foregoing, you may not tender any form of payment
that the Company determines, in its sole discretion, could violate any law or
regulation.  You are not required to
purchase all Shares subject to this Option at one time, but you must pay the
full Exercise Price for all Shares that you elect to purchase before they will
be delivered.  The date of exercise of an
Option shall be the date on which the Company receives the Exercise Price for
such Option.

6.                                       Exercise of Option.  If
you are entitled to exercise this Option, you may exercise it by contacting UBS
Financial Services through its web site at www.ubs.com/onesource/cov or by
calling its toll free number, which is 1-877-461-7805.  If someone
other than you attempts to exercise this Option (for example, because the
Option is being exercised after your death), the Company will deliver the Shares
only after determining that the person attempting to exercise this Option is
the duly appointed executor or administrator of your estate or an individual to
whom this Option has been transferred in accordance with these Terms and
Conditions and the terms of the Plan.

7.                                       Withholdings. 
The Company has the right, prior to the issuance or delivery of any
Shares in connection with the exercise of this Option, to withhold or require
from you the amount necessary to satisfy applicable tax requirements, as
determined by the Committee.  The methods
described in Section 5 may also be used to pay your withholding tax obligation.

8.                                       Transfer of Option. 
You generally may not transfer this Option or any interest in this
Option except by will or the laws of descent and distribution.  However, you may transfer this Option to
members of your immediate family or to one or more trusts for the benefit of
family members or to one or more partnerships in which the family members are
the only partners, provided that (i) you do not receive any consideration for
the transfer, (ii) you furnish the Committee or its designee with detailed
written notice of the transfer at least 3 business days in advance, and (iii)
the Committee or its designee consents in writing to the transfer.  For this purpose, “family member” means any
spouse, children, grandchildren, parents, grandparents, siblings, nieces,
nephews, grandnieces and grandnephews, including adopted, in-laws and step
family members.  If this Option is transferred
pursuant to this provision, it will continue to be subject to the same terms
and conditions that applied immediately prior to the transfer.  This Option may be exercised by the
transferee only to the same extent that you could have exercised this Option
had no transfer occurred.

9.                                       Forfeiture of Option. 
You will forfeit all or a portion of this Option if your Termination of
Directorship is due to the circumstances described below:

(i)                                     If the Company terminates your directorship
for Cause, including without limitation a termination as a result of your
violation of the Company’s Code of Ethical Conduct, then the Company will
immediately rescind the unvested portion of this Option and any vested but
unexercised portion of this Option and you will immediately forfeit any and all
rights you have remaining at such time with respect to this Option.  Also, you hereby agree and promise to deliver
to the Company immediately upon your Termination of Directorship for Cause,
Shares (or, in the discretion of the Committee, cash) equal in value to the
amount of any profit you realized upon the exercise of any portion of this 

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Option during the 12-month period that occurs immediately prior to your
Termination of Directorship for Cause.

(ii)                                  If, after your Termination of Directorship,
the Committee determines in its sole discretion that while you were a Director you
engaged in activity that would have constituted grounds for the Company or
Subsidiary to terminate your directorship for Cause, then the Company will
immediately rescind the unvested portion of this Option and any vested but
unexercised portion of this Option and you will immediately forfeit any and all
rights you have remaining on the date that the Committee makes such determination
with respect to this Option.  Also, you
hereby agree and promise to deliver to the Company immediately upon the date
the Committee determines that your directorship could have been terminated for
Cause, Shares (or, in the discretion of the Committee, cash) equal in value to
the amount of any profit you realized upon the exercise of any portion of this
Option during the period that begins 12 months immediately prior to your Termination
of Directorship and ends on the date the Committee determines that you could
have been terminated for Cause.

(iii)                             If the Committee determines in its sole
discretion that at anytime after your Termination of Directorship and prior to
the second anniversary of your Termination of Directorship you (A) disclosed
confidential or proprietary information related to any business of the Company
or Subsidiary or (B) entered into an employment or consultation arrangement
(including any arrangement for employment or service as an agent, partner,
stockholder, consultant, officer or director) with any entity or person engaged
in a business and (1) such employment or consultation arrangement would likely
(in the Committee’s sole discretion) result in the disclosure of confidential
or proprietary information related to any business of the Company or a
Subsidiary to a business that is competitive with any Company or Subsidiary
business as to which you had access to strategic or confidential information
and (2) the Committee has not approved the arrangement in writing, then any portion
of this Option that you have not exercised (whether vested or unvested) will
immediately be rescinded and you will forfeit any rights you have with respect
to this Option as of the date of the Committee’s determination.  Also, you hereby agree and promise to deliver
to the Company, immediately upon the Committee’s determination date, Shares
(or, in the discretion of the Committee, cash) equal in value to the amount of
any profit you realized upon the exercise of any portion of this Option during the
period that begins 12 months immediately prior to your Termination of Directorship
and ends on the date of the Committee’s determination.

10.                                 Adjustments. 
In the event of any stock split, reverse stock split, dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), extraordinary cash dividend, recapitalization, merger,
consolidation, split-up, spin-off, reorganization, combination, repurchase or
exchange of Shares or other securities, the issuance of warrants or other
rights to purchase Shares or other securities, or other similar corporate
transaction or event, the Committee may in its sole discretion adjust the
number and kind of Shares covered by this Option, the Exercise Price and other
relevant provisions to the extent necessary to prevent dilution or enlargement
of the benefits or potential benefits intended to be provided by this
Option.  Any such determinations and
adjustments made by the Committee will be binding on all persons.

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11.                                 Restrictions on Exercise. 
Exercise of this Option is subject to the conditions that, to the extent
required at the time of exercise:

(i)                                     The Shares covered by this Option will
be duly listed, upon official notice of issuance, on the NYSE; and

(ii)                                  A Registration Statement under the
Securities Act of 1933 with respect to the Shares will be effective or an
exemption from registration will apply.

The Company will not be
required to deliver any Shares until all applicable federal and state laws and
regulations have been complied with and all legal matters in connection with
the issuance and delivery of the Shares have been approved by the Company’s
legal counsel.  Notwithstanding the
foregoing, you may only exercise this Option in cash or by certified check,
bank draft, wire transfer or postal or express money order if local law permits
such exercise method at the time of exercise.

12.                                 Disposition of Securities. 
By accepting this Option, you acknowledge that you have read and
understand the Company’s Insider Trading Policy and are aware of and understand
your obligations under federal securities laws with respect to trading in the
Company’s securities.  You also hereby agree
not to use the Company’s “cashless exercise” program (or any successor program)
when using the program would result in a violation of applicable securities
law.  The Company has the right to
recover, or receive reimbursement for, any compensation or profit realized on
the exercise of this Option or by the disposition of Shares received upon
exercise of this Option to the extent that the Company has a right of recovery
or reimbursement under applicable securities laws.

13.                                 Plan Terms Govern. 
The vesting and exercise of this Option, the disposition of any Shares
received upon exercise of this Option, and the treatment of any gain on the
disposition of such Shares are subject to the terms of the Plan and any rules
that the Committee prescribes.  The Plan
document, as amended from time to time, is incorporated into this Terms and
Conditions document.  Capitalized terms
used herein are defined in the Plan.  If
there is any conflict between the terms of the Plan and these Terms and
Conditions, the Plan’s terms govern.  By
accepting this Option Award, you hereby acknowledge receipt of the Plan, as in
effect on the Grant Date.

14.                                 Personal Data. 
To comply with applicable law and to administer this Option appropriately,
the Company and its agents may hold and process your personal data and/or
sensitive personal data.  Such data
includes, but is not limited to, the information provided to you as part of the
grant package and any changes thereto, other appropriate personal and financial
data about you, and information about your participation in the Plan and Shares
obtained under the Plan from time to time. 
By accepting this Option, you hereby give your explicit consent to the
Company’s processing personal data and/or sensitive personal data as is
necessary or appropriate for Plan administration.  The legal persons for whom your personal data
are intended include the Company, its Subsidiaries (or former Subsidiaries as
are deemed necessary), the outside Plan administrator, and any other person
that the Company retains or utilizes for Plan administration purposes.  You have the right to review and correct your
personal data by contacting the Senior Vice President, Human Resources.  You hereby acknowledge your understanding that
the transfer of the information outlined here is important to Plan administration
and that failure to consent to the transmission of such information may limit
or prohibit your participation in the Plan.

 4
 

15.                                 No Promise of Future Grants. 
By accepting this Option, you agree that you are bound by the terms of
the Plan and these Terms and Conditions and acknowledge that this Option is
granted in the Company’s sole discretion. 
If the Company or Subsidiary terminates your directorship for any
reason, you agree that you will not be entitled to damages for breach of
contract, dismissal or compensation for loss of office or otherwise to any sum,
Shares, Options or other benefits to compensate you for the loss or diminution
in value of any actual or prospective rights, benefits or expectation under or
in relation to the Plan.

16.                                 Limitations. 
Nothing in these Terms and Conditions or the Plan grants to you any
right to continued service as a Director or to interfere in any way with the
Company or Subsidiary’s right to terminate your directorship at any time and
for any reason.  Payment of Shares is not
secured by a trust, insurance contract or other funding medium, and you do not
have any interest in any fund or specific Company asset by reason of this
Option.  You have no rights as a
stockholder of the Company pursuant to this Option until Shares are actually
delivered to you.

17.                                 Entire Agreement and Amendment. 
These Terms and Conditions and the Plan constitute the entire
understanding between you and the Company regarding this Option.  These Terms and Conditions supersede any
prior agreements, commitments or negotiations concerning this Option.  These Terms and Conditions may not be
modified, altered or changed except by the Committee (or its delegate) in
writing and pursuant to the terms of the Plan.

18.                                 Severability. 
The invalidity or unenforceability of any provision of these Terms and
Conditions will not affect the validity or enforceability of the other
provisions of these Terms and Conditions, which will remain in full force and
effect.  Moreover, if any provision is
found to be excessively broad in duration, scope or covered activity, the
provision will be construed so as to be enforceable to the maximum extent
compatible with applicable law.

19.                                 Acceptance.  By
accepting this Option, you agree to the following:

(i)                                     You have carefully read, fully
understand and agree to all of the terms and conditions contained in the Plan
and these Terms and Conditions; and

(ii)                                  You understand and agree that the Plan
and these Terms and Conditions constitute the entire understanding between you
and the Company regarding this Option, and that any prior agreements,
commitments or negotiations concerning this Option are replaced and superseded.

You will be deemed to consent to the application of the terms and
conditions set forth in the Plan and these Terms and Conditions unless you
contact Covidien Ltd., c/o Equity Plan Administration, 15 Hampshire Street,
Mansfield, MA 02048 in writing within 30 days of receiving the grant package.  Receipt by the Company of your non-consent
will nullify this Option unless otherwise agreed to in writing by you and the
Company.

 5

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