Document:

Exhibit 10.38 to Medtronic, Inc. Form 10-K for fiscal year ended April 25, 2008

Exhibit 10.38

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

CHANGE OF CONTROL EMPLOYMENT AGREEMENT by and between Medtronic, Inc., a Minnesota
corporation (the “Company”), and                (the
“Executive”), dated as of the      day of           .

The Board of Directors of the Company (the “Board”) has determined that
it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication
of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Section 2) of
the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive’s full attention
and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control which are competitive with those of other corporations
and which ensure that the compensation and benefits expectations of the Executive will be satisfied. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

        1.  Certain Definitions.

        (a)  The “Effective Date” shall
mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control) occurs.
Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive’s employment
with the Company is terminated or the Executive ceases to be an officer of the Company within the 18-months prior to the date
on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment
or cessation of status as an officer (i) was at the request of a third party who has taken steps reasonably calculated to effect
the Change of Control or (ii) otherwise arose in connection with or anticipation of the Change of Control (such a termination
of employment, an “Anticipatory Termination”), then for all purposes of this Agreement the “Effective Date”
shall mean the date immediately prior to the date of such termination of employment or cessation of status as an officer.

        (b)  The “Change of Control Period”
shall mean the period commencing on the date hereof and ending on the third anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each
annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated,
the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless
at least 60 days prior to the Renewal Date the Company shall give written notice to the Executive that the Change of Control
Period shall not be so extended.

        2.  Change of Control.   For
the purpose of this Agreement, a “Change of Control” shall mean:

        (a)  Any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 30% or more of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) 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, for purposes of this Section 2(a), the following acquisitions shall not constitute a Change of 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 (i), (ii) and (iii) of Section 2(c); or

 

        (b)  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 

        (c)  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, (i) 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 (A) the entity resulting from such Business Combination (the “Surviving Corporation”) or (B)
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, (ii) 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 (iii) 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

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

        3.  Employment Period.   The
Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the
Company, for the period commencing on the Effective Date and ending on the third anniversary of such date (the “Employment
Period”), provided, that nothing stated in this Agreement shall restrict the right of the Company or the
Executive at any time to terminate the Executive’s employment with the Company, subject to the obligations of the Company
provided for in this Agreement in the event of such terminations. The Employment Period shall terminate upon the Executive’s
termination of employment for any reason.

        4.  Terms of Employment.

        (a)  Position and Duties.   

        (i)  During the Employment Period, (A) the
Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at
any time during the 90-day period immediately preceding the Effective Date; and (B) the Executive’s services shall be
performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location
less than 50 miles from such location.

 

        (ii)  Except as otherwise expressly provided
in this Agreement, during the Employment Period, and excluding any periods of vacation and sick leave to which the Executive
is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct
of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

        (b)  Compensation.   

        (i)  Base Salary.   During
the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”) at an annual rate
at least equal to 12 times the highest monthly base salary paid or payable, including any base salary that has been earned
but deferred, to the Executive by the Company and the affiliated companies in respect of the 12-month period immediately preceding
the month in which the Effective Date occurs. The Annual Base Salary shall be paid at such intervals as the Company pays executive
salaries generally. During the Employment Period, the Annual Base Salary shall be reviewed at least annually and shall be increased
at any time and from time to time as shall be substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall
not be reduced after any such increase and the term “Annual Base Salary” as utilized in this Agreement shall refer
to Annual Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall include any
company controlled by, controlling or under common control with the Company. 

        (ii)  Annual Incentive Payments. 
 In addition to Annual Base Salary, the Executive shall be paid, for each fiscal year ending during the Employment Period,
an annual bonus (“Annual Bonus”) in cash at least equal to the Executive’s average annual or annualized (for
any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company
for less than 12 full months) award earned by the Executive, including any award earned but deferred, under the Company’s
Executive Incentive Plan, as amended from time to time prior to the Effective Date (or under any successor or replacement annual
incentive plan of the Company or any of the affiliated companies), for the last three fiscal years immediately preceding the
fiscal year in which the Effective Date occurs (the “Three-Year Average Bonus”). If the Executive has not been eligible
to earn, or has not been employed, for each of the last three fiscal years immediately preceding the fiscal year during which
the Effective Date occurs but has earned a bonus for at least one fiscal year during the last three fiscal years immediately
preceding the fiscal year during which the Effective Date occurs, the “Three-Year Average Bonus” shall mean the average
of any annual or annualized bonus actually earned over any such years. If the Executive has not been eligible to earn, or has
not received, such a bonus for any fiscal year prior to the Effective Date, the “Three-Year Average Bonus” shall
mean the Executive’s Target Annual Bonus for the year during which the Effective Date occurs. Each such Annual Bonus shall
be paid no later than two and a half months after the end of the fiscal year for which the Annual Bonus is awarded, unless
the Executive shall elect to defer the receipt of such Annual Bonus pursuant to an arrangement that meets the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

        (iii)  Long-Term Cash and Equity Incentives,
Savings Plans and Retirement Plans.    During the Employment Period, the Executive shall be entitled to participate
in all long-term cash incentive, equity incentive, savings and retirement plans, practices, policies and programs (any such
arrangement a “Plan”

 

for purposes of this Agreement) applicable generally to other peer executives of the Company and the
affiliated companies, but in no event shall such Plans provide the Executive with incentive opportunities (measured with respect
to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided
by the Company and the affiliated companies for the Executive under such Plans as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and the affiliated companies.

        (iv)  Welfare Benefit Plans. 
 During the Employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit Plans provided by the Company and the affiliated
companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance Plans) to the extent applicable generally to other peer executives of
the Company and the affiliated companies, but in no event shall such Plans provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such Plans in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time
after the Effective Date to other peer executives of the Company and the affiliated companies.

        (v)  Expenses.   During
the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices and procedures of the Company and the affiliated
companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the
Company and the affiliated companies.

        (vi)  Business Allowance.   During
the Employment Period, the Executive shall be entitled to a business allowance in accordance with the most favorable Plans
of the Company and the affiliated companies in effect for the Executive at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the affiliated companies.

        (vii)  Office and Support Staff. 
 During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings
and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of
the foregoing provided to the Executive by the Company and the affiliated companies at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect
to other peer executives of the Company and the affiliated companies.

        (viii)  Vacation.   During
the Employment Period, the Executive shall be entitled to paid vacations in accordance with the most favorable Plans of the
Company and the affiliated companies as in effect for the Executive at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the affiliated companies.

        5.  Termination of Employment. 
 

        (a)  Death or Disability.   The
Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If
the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b)
of this Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment
with the Company shall terminate on the 30th day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided, that, within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean the
absence of the Executive from the Executive’s duties with

 

the Company on a full-time basis for 180 consecutive days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be unreasonably
withheld).

        (b)  Cause.   (i) The Company
may terminate the Executive’s employment during the Employment Period with or without Cause. For purposes of this Agreement,
“Cause” shall mean (A) repeated violations by the Executive of the Executive’s obligations under Section 4(a)
of this Agreement (other than as a result of incapacity due to physical or mental illness) which are demonstrably willful and
deliberate on the Executive’s part, which are not remedied in a reasonable period of time after receipt of written notice
from the Company specifying such violations or (B) the conviction of the Executive of a felony involving moral turpitude.

        (ii)  For purposes of Section 5(b)(i)(A)
of this Agreement, no act, or failure to act, on the part of the Executive shall be considered “willful” unless it
is done, or omitted to be done, by the Executive in bad faith and without reasonable belief that the Executive’s action
or omission was in the best interests of the Company. Any act, or failure to act, based upon (A) authority given pursuant to
a resolution duly adopted by the Board, or if the Company is not the ultimate parent corporation of the affiliated companies
and is not publicly traded, the board of directors of the Parent Corporation (the “Applicable Board”), (B) the instructions
of the Chief Executive Officer of the Company or the Parent Corporation or a senior officer of the Company or the Parent Corporation
or (C) the advice of counsel for the Company or the Parent Corporation shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Applicable Board (excluding
the Executive, if the Executive is a member of the Applicable Board) at a meeting of the Applicable Board called and held for
such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Applicable Board), finding that, in the good faith opinion of the Applicable
Board, the Executive is guilty of the conduct described in Section 5(b)(i)(A) of this Agreement, and specifying the particulars
thereof in detail.

        (c)  Good Reason.   The
Executive’s employment may be terminated by the Executive for Good Reason or by the Executive voluntarily without Good
Reason. For purposes of this Agreement, “Good Reason” shall mean:

        (i)  the assignment to
the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any
diminution in such position, authority, duties or responsibilities (whether or not occurring solely as a result of the Company
ceasing to be a publicly traded entity or becoming a subsidiary), excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given
by the Executive;

        (ii)  any failure by the
Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the
Executive;

        (iii)  the Company’s
requiring the Executive to be based at any office or location other than that described in Section 4(a)(i)(B) of this Agreement
or the Company’s requiring the Executive to be based at a location other than the principal executive offices of the Company
(if the Executive were employed at such location immediately preceding the Effective Date) or the Company’s requiring
the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective
Date;

        (iv)  any purported termination
by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or

 

        (v)  any failure by the
Company to comply with and satisfy Section 11(c) of this Agreement.

For purposes of this Section 5(c) of this Agreement, any good faith determination of “Good Reason”
made by the Executive shall be conclusive. The Executive’s mental or physical incapacity following the occurrence of an
event described above in clauses (i) through (v) shall not affect the Executive’s ability to terminate employment for
Good Reason.

        (d)  Notice of Termination. 
 Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice
of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as
defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination
shall be not more than 30 days after the giving of such notice). The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause, respectively, shall
not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the Executive’s or the Company’s respective rights hereunder.

        (e)  Date of Termination.   “Date
of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive
for Good Reason, the date of receipt of the Notice of Termination or any later date specified in the Notice of Termination,
as the case may be, (ii) if the Executive’s employment is terminated by the Company other than for Cause or Disability
or death, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, (iii)
if the Executive resigns without Good Reason, the date on which the Executive notifies the Company of such termination and
(iv) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the
date of death of the Executive or the Disability Effective Date, as the case may be. The Company and the Executive shall take
all steps necessary (including with regard to any post-termination services by the Executive) to ensure that any termination
described in this Section 5 constitutes a “separation from service” within the meaning of Section 409A of the
Code, and, notwithstanding the foregoing, the date on which such separation from service takes place shall be the “Date
of Termination.”

        6.  Obligations of the Company upon Termination.  

        (a)  Good Reason; Other Than for Cause,
Death or Disability.   If, during the Employment Period, the Company terminates the Executive’s employment
other than for Cause or Disability or the Executive terminates employment for Good Reason, in lieu of further payments pursuant
to Section 4(b) of this Agreement with respect to periods following the Date of Termination:

        (i)  the Company shall
pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

        (A)  the sum of (1) the
Executive’s Annual Base Salary through the Date of Termination, and (2) any accrued vacation pay, in each case, to the
extent not theretofore paid (the sum of the amounts described in subclauses (1) and (2), the “Accrued Obligations”);

        (B)  an amount equal to
the product of (1) the higher of (I) the Three-Year Average Bonus and (II) the Annual Bonus paid or payable, including any
portion thereof that has been earned but deferred (and annualized for any fiscal year consisting of less than 12 full months
or during which the Executive has been employed for less than 12 full months), for the most recently completed fiscal year
during the Employment Period, if any (such higher amount, the “Highest Annual Bonus”), and (2) a fraction, the numerator
of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is
365, in lieu of any amounts otherwise payable pursuant to the Executive Incentive Plan solely with respect to the year in which
the Date of Termination occurs (the “Pro-Rata Incentive Payment”); and

 

        (C)  the amount equal
to the product of (1) three, and (2) the sum of (x) the Executive’s Annual Base Salary, and (y) the Highest Annual Bonus;
and

        (ii)  the Executive’s benefits under
the Company’s tax qualified retirement plan (the “Retirement Plan”) and any excess or supplemental retirement
plan in which the Executive participates as of the Effective Date (or if more favorable to the Executive, as of the Date of
Termination) (collectively, the “SERP”) shall be calculated assuming that the Executive’s employment continued
for the remainder of the Employment Period and that during such period the Executive received service credit for all purposes
under such plans and the Executive’s age increased by the number of years that the Executive is deemed to be so employed;
provided, however; that in no event shall the Executive be entitled to age or service credit, as a result of
the application of this Section 6(a)(ii), beyond the maximum age or maximum number of years of service credit, as applicable,
permitted under the Retirement Plan or the SERP; and

        (iii)  for the remainder of the Employment
Period, or such longer period as any plan, program, practice or policy may provide (the “Benefit Continuation Period”),
the Company shall provide health care and life insurance benefits to the Executive and/or the Executive’s family at least
equal to, and at the same after-tax cost to the Executive and/or the Executive’s family (taking into account any applicable
required employee contributions), as those which would have been provided to them in accordance with the Plans providing health
care and life insurance benefits and at the benefit level described in Section 4(b)(iv) of this Agreement if the Executive’s
employment had not been terminated; provided, however, that the health care benefits provided during the Benefit
Continuation Period shall be provided in such a manner that such benefits (and the costs and premiums thereof) are excluded
from the Executive’s income for federal income tax purposes and, if the Company reasonably determines that providing continued
coverage under one or more of its health care benefit plans contemplated herein could be taxable to the Executive, the Company
shall provide such benefits at the level required hereby through the purchase of individual insurance coverage; provided,
further, that if the Executive becomes re-employed with another employer and is eligible to receive health care and
life insurance benefits under another employer-provided plan, the health care and life benefits provided hereunder shall be
secondary to those provided under such other plan during such applicable period of eligibility. Following the end of the Benefit
Continuation Period, the Executive shall be eligible for continued health coverage as required by Section 4980B of the Code
or other applicable law (“COBRA Coverage”), as if the Executive’s employment with the Company had terminated
as of the end of such period, and the Company shall take such actions as are necessary to cause such COBRA Coverage not to
be offset by the provision of benefits under this Section 6(a)(iii) and to cause the period of COBRA Coverage to commence at
the end of the Benefit Continuation Period. For purposes of determining eligibility (but not the time of commencement of benefits)
of the Executive for retiree welfare benefits pursuant to the retiree welfare benefit Plans, the Executive shall be considered
to have remained employed until the end of the Employment Period and to have retired on the last day of such period, and the
Company shall cause the Executive to be eligible to commence in the applicable retiree welfare benefit Plans as of the applicable
benefit commencement date; and

        (iv)  except as otherwise set forth in the
last sentence of Section 7, to the extent not theretofore paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits that the Executive is otherwise entitled to receive under any other plan, program,
practice, policy, contract, arrangement or agreement of the Company or the affiliated companies (such other amounts and benefits,
the “Other Benefits”).

Notwithstanding the foregoing provisions of Section 6(a)(i) and except as otherwise provided in Section
12(g) with respect to an Anticipatory Termination, in the event that the Executive is a “specified employee” within
the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in
effect on the Date of Termination) (a “Specified Employee”), amounts that would otherwise be payable under Section
6(a)(i) during the six-month period immediately following the Date of Termination (other than the Accrued Obligations) shall
instead be paid, with interest on any delayed payment at the applicable federal rate provided for in

 

Section 7872(f)(2)(A) of the Code (“Interest”), on the first business day after the date
that is six months following the Executive’s “separation from service” within the meaning of Section 409A of
the Code (the “409A Payment Date”).

        (b)  Death.   If the Executive’s
employment is terminated by reason of the Executive’s death during the Employment Period, the Company shall provide the
Executive’s estate or beneficiaries with the Accrued Obligations, the Pro-Rata Incentive Payment and the timely payment
or delivery of the Other Benefits, and shall have no other severance obligations under this Agreement. The Accrued Obligations
shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of the Other Benefits, the term “Other Benefits” as used in this Section
6(b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company and the affiliated companies to the estates
and beneficiaries of peer executives of the Company and the affiliated companies under such Plans relating to death benefits,
if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries,
as in effect on the date of the Executive’s death with respect to other peer executives of the Company and the affiliated
companies and their beneficiaries.

        (c)  Disability.   If the
Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, the Company
shall provide the Executive with the Accrued Obligations and the Pro-Rata Incentive Payment the timely payment or delivery
of the Other Benefits in accordance with the terms of the underlying plans or agreements, and shall have no other severance
obligations under this Agreement. The Accrued Obligations and the Pro-Rata Incentive Payment shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination, provided, that in the event that the Executive is a
Specified Employee, the Pro-Rata Incentive Payment shall be paid, with Interest, to the Executive on the 409A Payment Date.
With respect to the provision of the Other Benefits, the term “Other Benefits” as used in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits
at least equal to the most favorable of those generally provided by the Company and the affiliated companies to disabled executives
and/or their families in accordance with such Plans relating to disability, if any, as in effect generally with respect to
other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with respect
to other disabled peer executives of the Company and the affiliated companies and their families.

        (d)  Cause; Other Than for Good Reason.  If
the Executive’s employment is terminated for Cause during the Employment Period, the Company shall provide to the Executive (i) the Accrued Obligations and
(ii) the Other Benefits, in each case to the extent theretofore unpaid, and shall have no other severance obligations under this Agreement. If the Executive
voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, the Company shall provide to the Executive the Accrued
Obligations and the Pro-Rata Incentive Payment and the timely payment or delivery of the Other Benefits, and shall have no other severance obligations under
this Agreement. In such case, the Accrued Obligations and the Pro-Rata Incentive Payment shall be paid to the Executive in a lump sum in cash within 30 days of
the Date of Termination, provided, that in the event that the Executive is a Specified Employee, the Pro-Rata Incentive Payment shall be paid, with
Interest, to the Executive on the 409A Payment Date.

        7.  Non-Exclusivity of Rights.  Nothing
in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the
Company or any of the affiliated companies (other than participation in any severance plan upon the Executive’s termination of employment during the
Employment Period) and for which the Executive may qualify, nor, subject to Section 12(f) of this Agreement, shall anything herein limit or otherwise affect
such rights as the Executive may have under any contract or agreement with the Company or any of the affiliated companies. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any

 

of the affiliated companies at or subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. Without
limiting the generality of the foregoing, the Executive’s resignation under this Agreement with or without Good Reason,
shall in no way affect the Executive’s ability to terminate employment by reason of the Executive’s “retirement”
under any compensation and benefits plans, programs or arrangements of the affiliated companies, including without limitation
any retirement or pension plans or arrangements or to be eligible to receive benefits under any compensation or benefit plans,
programs or arrangements of the affiliated companies, including without limitation any retirement or pension plan or arrangement
of the affiliated companies or substitute plans adopted by the Company or its successors, and any termination which otherwise
qualifies as Good Reason shall be treated as such even if it is also a “retirement” for purposes of any such plan.
Notwithstanding the foregoing, if the Executive receives payments and benefits pursuant to Section 6(a) of this Agreement,
the Executive shall not be entitled to any other severance pay or benefits under any severance plan, program or policy of the
Company or the affiliated companies, unless expressly provided therein in a specific reference to this Agreement.

        8.  Full Settlement; Legal Fees. 
 The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred
(within 10 days following the Company’s receipt of an invoice from the Executive) at any time from the Effective Date
of this Agreement through the Executive’s remaining lifetime (or, if longer, through the 20th anniversary of the Effective
Date), to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this Agreement), plus, in each case, Interest, provided,
that the Executive shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar
year next following the calendar year in which such fees and expenses were incurred. The amount of such legal fees and expenses
that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company
is obligated to pay in any other calendar year.

        9.  Certain Additional Payments by the
Company.   

        (a)  Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes
and penalties imposed pursuant to Section 409A of the Code, the Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined
that the Executive is entitled to the Gross-Up Payment, but that the Parachute Value (as defined below) of all Payments does
not exceed 110% of the Safe Harbor Amount (as defined below), then no Gross-Up Payment shall be made to the Executive and the
amounts payable under this Agreement shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals
the Safe Harbor Amount. The reduction of

 

Payments to the Safe Harbor Amount, if applicable, shall be made by reducing the Payments under the
following sections of this Agreement in the following order: (i) Section 6(a)(1)(C), (ii) Section 6(a)(1)(B), (iii) Section
6(a)(iii) and (iv) Section 6(a)(ii). For purposes of reducing the Payments to the Safe Harbor Amount, only amounts payable
under this Agreement (and no other Payments) shall be reduced. If the reduction of the amount payable under this Agreement
would not result in a reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under
the Agreement shall be reduced pursuant to this Section 9(a). The Company’s obligation to make Gross-Up Payments under
this Section 9 shall not be conditioned upon the Executive’s termination of employment.
For the purposes of this
Section 9, (i) the “Parachute Value” of a Payment shall mean the present value as of the date of the change of control
for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under
Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent
the Excise Tax will apply to such Payment; and (ii) the “Safe Harbor Amount” means 2.99 times the Executive’s
“base amount,” within the meaning of Section 280G(b)(3) of the Code.

        (b)  Subject to the provisions of Section
9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made
by PricewaterhouseCoopers or such other nationally recognized certified public accounting firm as may be designated by the
Executive (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier
time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm
to make the determinations required hereunder (which accounting firm shall then be referred to as the “Accounting Firm”
hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

        (c)  The Executive shall notify the Company
in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and the Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration
of such period that the Company desires to contest such claim, the Executive shall:

        (i)  give the Company
any information reasonably requested by the Company relating to such claim;

        (ii)  take such action
in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

        (iii)  cooperate with
the Company in good faith in order to effectively contest such claim; and 

        (iv)  permit the Company
to participate in any proceedings relating to such claim;

 

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the
Company shall control all proceedings taken in connection with such contest and, at its sole discretion, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of
such claim and may, at its sole option, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive
and direct the Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company pays such claim and directs the
Executive to sue for a refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such payment or with
respect to any imputed income in connection with such payment; and provided, further, that any extension of the
statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest
shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

        (d)  If, after the receipt by the Executive
of a Gross-Up Payment or payment by the Company of an amount on the Executive’s behalf pursuant to Section 9(c), the Executive
becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect
to such claim, the Executive shall (subject to the Company’s complying with the requirements of Section 9(c) if applicable)
promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto). If, after payment by the Company of an amount on the Executive’s behalf pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination,
then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

        (e)  Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid by the Company within five days of the receipt of the Accounting Firm’s determination;
provided that, the Gross-Up Payment shall in all events be paid no later than the end of the Executive’s taxable
year next following the Executive’s taxable year in which the Excise Tax (and any income or other related taxes or interest
or penalties thereon) on a Payment are remitted to the Internal Revenue Service or any other applicable taxing authority or,
in the case of amounts relating to a claim described in Section 9(c) that does not result in the remittance of any federal,
state, local and foreign income, excise, social security and other taxes, the calendar year in which the claim is finally settled
or otherwise resolved. The Gross-Up Payment shall be paid to the Executive; provided that the Company, in its sole discretion,
may withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding.

        10.  Confidential Information. 
 The Executive shall comply with any and all confidentiality agreements with the Company to which the Executive is, or
shall be, a party.

        11.  Successors.   

        (a)  This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by the Executive other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.

 

        (b)  This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns. Except as provided in Section 11(c) of this Agreement, this
Agreement shall not be assignable by the Company.

        (c)  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.

        12.  Miscellaneous.   

        (a)  This Agreement shall be governed by
and construed in accordance with the laws of the State of Minnesota, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors
and legal representatives.

        (b)  All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

If to the Executive:

At the most recent address on file at the Company.

If to the Company:

Medtronic, Inc.
Legal Dept. LC400
710 Medtronic Parkway
Minneapolis, MN
55432-5604
Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notices and communications shall be effective when actually received by the addressee.

        (c)  The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

        (d)  The Company may withhold from any amounts
payable under this Agreement such United States federal, state, or local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

        (e)  The Executive’s or the Company’s
failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive
or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Sections 5(c)(i) through 5(c)(v) of this Agreement, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement.

        (f)  The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment
of the Executive by the Company may be terminated by either the Executive or the Company at any time prior to the Effective
Date or, subject to the obligations of the Company provided for in this Agreement in the event of a termination after the Effective
Date, at any time on or after the Effective Date. Moreover, if prior to the Effective Date, (i) the Executive’s employment
with the Company terminates or (ii) the Executive ceases to be an officer of the Company, then the Executive shall have no
further rights under this Agreement. From and after the Effective Date, except with respect to the agreements described in
Section 10 hereof, this Agreement shall supersede any other agreement between the parties with respect to the subject
matter hereof in effect immediately prior to the execution of this Agreement.

 

        (g)  Notwithstanding any provision in this
Agreement to the contrary, in the event of an Anticipatory Termination, any payments that are deferred compensation within
the meaning of Section 409A of the Code that the Company shall be required to pay pursuant to Section 6(a)(1) of this Agreement
shall be paid as follows: (i) if such Change of Control is a “change in control event” within the meaning of Section
409A of the Code, (A) except as provided in clause (i)(B), on the date of such Change of Control, or (B) if the Executive is
a Specified Employee and the 409A Payment Date is later than the Change of Control, on the 409A Payment Date, and (ii) if such
Change of Control is not a “change in control event” within the meaning of Section 409A of the Code, (A) except as
provided in clause (ii)(B), on the first business day following the 18-month anniversary of the date of such Anticipatory Termination
(the “Payment Date”), or (B) if the Executive is a Specified Employee and the 409A Payment Date is later than the
date of such Change of Control, on the 409A Payment Date. In the event of an Anticipatory Termination, any payments or benefits
that are not deferred compensation within the meaning of Section 409A of the Code that the Company shall be required to pay
or provide pursuant to Section 6(a) of this Agreement shall be paid or shall commence being provided on the date of the Change
of Control. Interest with respect to the period, if any, from the date of the Change of Control until the actual date of payment
shall be paid on any delayed cash amounts. 

        (h)  Within the time period permitted by
the applicable Treasury Regulations, the Company may, in consultation with the Executive, modify the Agreement, in the least
restrictive manner necessary and without any diminution in the value of the payments to the Executive, in order to cause the
provisions of the Agreement to comply with the requirements of Section 409A of the Code, so as to avoid the imposition of taxes
and penalties on the Executive pursuant to Section 409A of the Code.Exhibit 10.39 to Medtronic, Inc. Form 10-K for year ended April 25, 2008

Exhibit 10.39

NON-QUALIFIED STOCK OPTION AGREEMENT
2003 LONG-TERM INCENTIVE PLAN

	1.	The Option. Medtronic, Inc., a Minnesota corporation (the “Company”), hereby grants to you,
the individual named above, 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. Upon vesting of the underlying shares, the Option may be exercised in whole or in part until
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 Sections 2(c), (d) or (e) below.
	 	(b)	Schedule of Exercisability. The Option shall become vested and exercisable to the extent of ___% of the above number
of shares of Common Stock on _____________________. Once a portion of the Option has become exercisable, that portion may be
exercised at any time thereafter, subject to the provisions of Paragraph 2(a) above.
	 	(c)	Death. Notwithstanding the schedule of exercisability set forth in Section 2(b) above, the Option shall become immediately
exercisable in full upon your death, and may be exercised by your Successor (as defined below) at any time, or from time to
time, within five years after the date of your death. 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. Notwithstanding the schedule of exercisability set forth in Section 2(b) above, the Option
shall become immediately exercisable in full upon your Disability or Retirement (as each such term is defined below), and you
may exercise your Option at any time, or from time to time, within five years after the date of Retirement or determination
of Disability. 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)	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) and 2(d), the unvested portion of the Option will terminate as of 11:00 p.m. CT (midnight
ET) on the date of termination of your employment. You may exercise that portion of the Option that was vested but unexercised
as of the date of termination of your employment 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.
	 	(f)	Change in Control. Notwithstanding the schedule of exercisability set forth in Section 2(b) above, the Option shall
become immediately exercisable in full upon the occurrence of a Change in Control.
	 	(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 the administrator (the “Administrator”) designated by the Company to provide services relating to the administration
of the Plan at the time of your exercise. The Notice must be given in the manner specified by the Administrator and 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 you, 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 the Administrator 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.	Forfeitures. If you have received or been entitled to receive payment in cash, delivery of Common Stock or a combination
thereof pursuant to this Option within the period beginning six months prior to termination of your employment with the Company
or any Affiliate and ending when the Option expires in accordance with Section 2(a), the Company, in its sole discretion, may
require you to return or forfeit the cash and/or Common Stock received or receivable with respect to this Option (or its economic
value as of the date of the exercise of the Option), in the event that you engage in any of the following activities:

	 	 	a.	performing services for or on behalf of any competitor of, or competing with, the Company or any Affiliate,
within six months of the date of your termination of employment with the Company or any Affiliate;
	 	 	b.	unauthorized disclosure of material proprietary information of the Company or any Affiliate;
	 	 	c.	a violation of applicable business ethics policies or business policies of the Company or any Affiliate; or
	 	 	d.	any other occurrence determined by the Committee.

The Company’s right to require forfeiture must be exercised not later than 90
days after the Company acquires actual knowledge of such an activity, but in no event later than 12 months after your termination
of employment with the Company or any Affiliate. Such right shall be deemed to

 

be exercised upon the Company’s mailing written notice of such exercise to your
most recent home address as shown on the personnel records of the Company. In addition to requiring forfeiture as described
herein, the Company may exercise its rights under this Section 5 by preventing or terminating the exercise of any rights
under this Option or the acquisition of Shares or cash thereunder.

If you fail or refuse to forfeit the cash and/or Shares demanded by the Company (adjusted
for any events described in Section 11(a) of the Plan), you shall be liable to the Company for damages equal to the number
of Shares demanded times the highest closing price per share of the Common Stock during the period between the date of termination
of your employment with the Company or any Affiliate and the date of any judgment or award to the Company, together with all
costs and attorneys’ fees incurred by the Company to enforce this provision.

	6.	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.
	7.	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.
	8.	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.

Accompanying this Agreement are instructions for accessing the Plan and the Plan Summary (prospectus)
from the Administrator’s Internet website or HROC – Stock Administration’s intranet website. You may also request written copies by contacting
HROC - Stock Administration at 763.514.1500.

HROC - Stock Administration, MS V235
Medtronic, Inc.
3850 Victoria
Street North
Shoreview, MN 55126-2978

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