Document:

MEDTRONIC, INC.

1998 OUTSIDE DIRECTOR STOCK COMPENSATION PLAN

(as amended and restated effective January 1, 2008)

	
 

	
 

	
1.

	
Purpose. The purpose of this Plan is to
 facilitate recruiting and retaining non-employee directors of outstanding
 ability. The Plan has been amended and restated effective January 1, 2008 to
 comply with the requirements of Section 409A of the Internal Revenue Code.

	
 

	
 

	
2.

	
Definitions. The capitalized terms used in
 this Plan have the meanings set forth below.

	
 

	
 

	
 

	
 

	
(a)

	
“Account”
 means a bookkeeping account maintained for a Participant to which Deferred
 Stock Units are credited pursuant to Section 8 of this Plan.

	
 

	
 

	
 

	
 

	
(b)

	
“Affiliate”
 means any corporation that is a “parent corporation” or “subsidiary
 corporation” of the Company, as those terms are defined in
 Sections 424(e) and (f) of the Code, or any successor provision,
 and any joint venture in which the Company or any such “parent corporation”
 or “subsidiary corporation” owns an equity interest.

	
 

	
 

	
 

	
 

	
(c)

	
“Agreement”
 means a written contract entered into between the Company or an Affiliate and
 a Participant containing the terms and conditions of an Award granted
 hereunder (not inconsistent with this Plan).

	
 

	
 

	
 

	
 

	
(d)

	
“Annual
 Award” means an Option or Stock Appreciation Right granted pursuant to
 Section 7(c) of this Plan.

	
 

	
 

	
 

	
 

	
(e)

	
“Annual
 Retainer” of a Participant means the fixed annual fee for such Participant in
 effect on the first day of the Plan Year for which such Annual Retainer is
 payable for services to be rendered as a Non-Employee Director of the
 Company. For purposes of determining
 Awards, other than an Initial Award, for the short Plan Year beginning
 September 1, 2007 and ending on April 25, 2008, the Annual Retainer in effect
 on September 1, 2007 shall be 8/12 of the annual fee in effect as of
 September 1, 2007. 

	
 

	
 

	
 

	
 

	
(f)

	
“Award”
 means an Option granted pursuant to Section 5 of this Plan, a Stock
 Appreciation Right granted pursuant to Section 6 of this Plan, an Annual
 or Initial Award granted pursuant to Section 7 of this Plan or a credit
 of Deferred Stock Units pursuant to Section 8 of this Plan.

	
 

	
 

	
 

	
 

	
(g)

	
“Board”
 means the Board of Directors of the Company.

	
 

	
 

	
 

	
 

	
(h)

	
“Change in
 Control” shall mean: 

	
 

	
 

	
 

	
 

	
(i)

	
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 (the “Outstanding Company Common Stock”) or (ii)

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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 clause (h)(i), the following acquisitions shall not constitute a Change
 in 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 (A), (B) and (C) of clause (iii)
 below; or

	
 

	
 

	
 

	
 

	
(ii)

	
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

	
 

	
 

	
 

	
 

	
(iii)

	
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, (A)
 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 (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 (1) the entity resulting
 from such Business Combination (the “Surviving Corporation”) or (2) 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, (B) 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 

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outstanding
 Shares 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 (C) 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

	
 

	
 

	
 

	
 

	
(iv)

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

	
 

	
 

	
 

	
 

	
(i)

	
“Code” shall
 mean the Internal Revenue Code of 1986, as amended and in effect from time to
 time, or any successor statute.

	
 

	
 

	
 

	
 

	
(j)

	
“Committee”
 means any committee of the Board designated by the Board to administer this
 Plan under Section 3 hereof which shall be composed of not less than two
 members, each of whom shall be a “non-employee director” as defined in
 Exchange Act Rule 16b-3.

	
 

	
 

	
 

	
 

	
(k)

	
“Company”
 means Medtronic, Inc., a Minnesota corporation, or any successor to all or
 substantially all of its businesses by merger, consolidation, purchase of
 assets or otherwise.

	
 

	
 

	
 

	
 

	
(l)

	
“Deferred
 Stock Unit” means the right to receive one Share pursuant to Section 8
 of this Plan.

	
 

	
 

	
 

	
 

	
(m)

	
“Disability”
 means the disability of a Participant such that the Participant is unable due
 to a physical or mental illness or condition that is expected to be of
 duration of twelve (12) months or more to perform the essential duties
 of a member of the Board.

	
 

	
 

	
 

	
 

	
(n)

	
“Exchange
 Act” means the Securities Exchange Act of 1934, as amended; “Exchange Act
 Rule 16b-3” means Rule 16b-3 promulgated by the Securities and
 Exchange Commission under the Exchange Act as in effect with respect to the
 Company or any successor regulation.

	
 

	
 

	
 

	
 

	
(o)

	
“Fair Market
 Value” means, on a given date, (i) if there should be a public market
 for the Shares on such date, the closing sale price of the Shares on The New
 York Stock Exchange, or, if the Shares are not listed or admitted on any
 national securities exchange, the arithmetic mean of the per Share closing
 bid price and per Share closing asked price on such date as quoted on the
 National Association of Securities Dealers Automated Quotation System (or
 such market in which such prices are regularly quoted) (the “NASDAQ”), or, if
 no sale of Shares shall have been reported on The New York Stock Exchange or
 quoted on the NASDAQ on such date, then the immediately preceding date on
 which sales of the Shares have been so reported or quoted shall be used, and
 (ii) if there should not be a public market for the Shares on 

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such date,
 the Fair Market Value shall be the value established by the Committee in good
 faith.

	
 

	
 

	
 

	
 

	
(p)

	
“Fundamental
 Change” means a dissolution or liquidation of the Company, a sale of substantially
 all of the assets of the Company, a merger or consolidation of the Company
 with or into any other corporation, regardless of whether the Company is the
 surviving corporation, or a statutory share exchange involving capital stock
 of the Company.

	
 

	
 

	
 

	
 

	
(q)

	
“Initial
 Award” means an Option or Stock Appreciation Right granted pursuant to
 Section 7(b) of this Plan.

	
 

	
 

	
 

	
 

	
(r)

	
“Meeting”
 means a regular or special meeting of the Board or of a committee of the
 Board on which a particular Participant serves.

	
 

	
 

	
 

	
 

	
(s)

	
“Non-Employee
 Director” means a member of the Board who is not an employee of the Company
 or any Affiliate.

	
 

	
 

	
 

	
 

	
(t)

	
“Option”
 means a right to purchase Stock granted pursuant to Sections 5 and 7 of
 this Plan.

	
 

	
 

	
 

	
 

	
(u)

	
“Participant”
 means any Non-employee Director to whom an Award is made.

	
 

	
 

	
 

	
 

	
(v)

	
“Plan” means
 this 1998 Outside Director Stock Compensation Plan, as amended and in effect
 from time to time.

	
 

	
 

	
 

	
 

	
(w)

	
“Plan Year”
 means the period from September 1 of any year through the following
 August 31. Effective September
 1, 2007 the Plan Year shall be a short year ending on April 25, 2008 and
 thereafter the Plan Year shall correspond to the Company’s fiscal year. 

	
 

	
 

	
 

	
 

	
(x)

	
“Pro-Ration
 Factor” means: (A) in the case of a Participant who is a Non-Employee
 Director for the entire Plan Year in question and attends at least
 75 percent of the Meetings that occur during such Plan Year (such
 Meetings, the “Plan Year Meetings”), 100 percent; (B) in the case
 of a Participant who is a Non-Employee Director for only a portion of a Plan
 Year and attends at least 75 percent of the Meetings that occur during
 that portion of a Plan Year (such meetings, the “Applicable Meetings”), a
 percentage determined by dividing the number of Applicable Meetings by the total
 number of Plan Year Meetings for that Plan Year; and (C) in the case of
 a Non- Employee Director who fails to satisfy the Meeting attendance
 requirement of clause (A) or (B), as applicable, 75 percent of
 the percentage specified in clause (A) or (B), as applicable.

	
 

	
 

	
 

	
 

	
(y)

	
“Share”
 means a share of common stock of the Company, $.10 par value per share.

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(z)

	
“Stock
 Appreciation Right” means a stock appreciation right granted pursuant to
 Sections 6 and 7 of this Plan.

	
 

	
 

	
 

	
 

	
(aa)

	
“Subsidiary”
 means a “subsidiary corporation,” as that term is defined in
 Section 424(f) of the Code, or any successor provision.

	
 

	
 

	
 

	
 

	
(bb)

	
“Successor”
 with respect to a Participant means a court appointed conservator or guardian
 of a Participant; if the Participant is deceased, the legal representative of
 the estate of the Participant; or the person or persons who may, by bequest
 or inheritance, or pursuant to a transfer permitted under Section 9(d)
 of this Plan, acquire the right to exercise an Option or Stock Appreciation
 Right or receive Shares issuable in satisfaction of Deferred Stock Units in
 the event of the Participant’s death.

	
 

	
 

	
 

	
 

	
(cc)

	
“Term” means
 the period during which an Award may be exercised.Except when otherwise
 indicated by the context, reference to the masculine gender shall include,
 when used, the feminine gender and any term used in the singular shall also
 include the plural.

	
 

	
 

	
3.

	
Administration.

	
 

	
 

	
 

	
 

	
(a)

	
Authority of Committee. The Committee or its
 delagee shall administer this Plan. The Committee shall have the authority to
 interpret this Plan and any Award or Agreement made under this Plan, to
 establish, amend, waive and rescind any rules and regulations relating to the
 administration of this Plan (including without limitation the manner in which
 Participants shall make elections provided for herein), to determine the
 terms and provisions of any Agreements entered into hereunder (not
 inconsistent with this Plan), and to make all other determinations necessary
 or advisable for the administration of this Plan. The Committee may correct
 any defect, supply any omission or reconcile any inconsistency in this Plan
 or in any Award in the manner and to the extent it shall deem desirable. The
 determinations of the Committee in the administration of this Plan, as
 described herein, shall be final, binding and conclusive.

	
 

	
 

	
 

	
 

	
(b)

	
Indemnification. To the full extent
 permitted by law, each member and former member of the Committee and each
 person to whom the Committee delegates or has delegated authority under this
 Plan shall be entitled to indemnification by the Company against and from any
 loss, liability, judgment, damage, cost and reasonable expense incurred by
 such member, former member or other person by reason of any action taken,
 failure to act or determination made in good faith under or with respect to
 this Plan.

	
 

	
 

	
4.

	
In General.

	
 

	
 

	
 

	
 

	
(a)

	
Shares Available. The number of Shares
 available for distribution under this Plan is 3,000,000 (subject to
 adjustment under Section 9(f) hereof). Any Shares subject to the terms
 and conditions of an Award under this Plan which are not used because the 

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terms and
 conditions of the Award are not met may again be used for an Award under this
 Plan. Any undistributed portion of any terminated, expired, exchanged,
 exercised or forfeited Award or any portion of an Award settled in cash in
 lieu of Shares shall be available for further Awards.

	
 

	
 

	
 

	
 

	
(b)

	
No Fractional Shares. No fractional Shares
 may be issued under this Plan; fractional Shares will be rounded to the
 nearest whole Share.

	
 

	
 

	
 

	
 

	
(c)

	
Rights as Shareholder. A participant shall
 have no rights as a shareholder with respect to any securities covered by an
 Award until the date the Participant becomes the holder of record.

	
 

	
 

	
 

	
5.

	
Options.

	
 

	
 

	
 

	
 

	
(a)

	
Agreements. Each Option granted under this
 Plan shall be evidenced by an Option Agreement setting forth the terms and
 conditions thereof.

	
 

	
 

	
 

	
 

	
(b)

	
Discretionary Options. The Board or the
 Committee may, in its discretion, at any time or from time to time grant to
 any Non-Employee Director an Option to purchase such number of Shares, on
 such terms and conditions, as it shall determine.

	
 

	
 

	
 

	
 

	
(c)

	
Purchase Price; Term and Exercisability of Options.
 The purchase price of each share subject to an Option shall be the Fair
 Market Value of a Share as of the date the Option is granted. Options granted
 to a Non-Employee Director under this Section 5 shall vest and be
 exercisable in full on the date of grant, except to the extent the Board or
 Committee provides otherwise in the Option Agreement; provided,
 however, that in no event shall a Non-Employee Director initially appointed
 by the Board be entitled to exercise an Option unless, and until such time
 as, such director shall have been elected to the Board by the shareholders of
 the Company. Notwithstanding the foregoing, except as otherwise provided in
 the Option Agreement, vesting of an Option granted to a Non-Employee Director
 who shall have been elected by the shareholders of the Company shall
 accelerate and shall become immediately exercisable in full upon the
 occurrence of a Change in Control or in the event that the Non-Employee
 Director ceases to serve as a director of the Company due to death,
 Disability, resignation or retirement under the policies of the Company then
 in effect. Options shall expire no later than the ten-year anniversary date
 of the Option’s grant; provided, that an Option granted to a
 Non-Employee Director initially appointed by the Board shall expire on the
 date such director ceases to be a director of the Company unless such
 director shall have been elected by the shareholders subsequent to the grant
 of the Initial Award to such director.

	
 

	
 

	
 

	
 

	
(d)

	
Payment of Option Price. The purchase price
 of the Shares with respect to which an Option is exercised shall be payable
 in full at the time of exercise; provided, that to the extent
 permitted by law, Participants may simultaneously exercise Options and sell
 the Shares thereby acquired pursuant to a brokerage or similar relationship
 and use the proceeds from such sale to pay the purchase price of such Shares.
 The 

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purchase
 price may also be paid in cash, or by delivery to the Company of Shares held
 by such Participant for at least six months before such exercise (in each
 case, such Shares having a Fair Market Value as of the date the Option is
 exercised equal to the purchase price of the Shares being purchased pursuant
 to the Option), or a combination thereof, in the discretion of the
 Participant. In no event shall any Option be exercisable at any time after
 its Term. When an Option is no longer exercisable, it shall be deemed to have
 lapsed or terminated.

	
 

	
 

	
 

	
6.

	
Stock Appreciation Rights.

	
 

	
 

	
 

	
 

	
(a)

	
Agreements. Each Stock Appreciation Right
 granted under this Plan shall be evidenced by an Agreement setting forth the
 terms and conditions thereof.

	
 

	
 

	
 

	
 

	
(b)

	
Discretionary Grant of Stock Appreciation Right.
 The Board or the Committee may, in its discretion, at any time or from time
 to time grant to any Non-Employee Director a Stock Appreciation Right (“Stock
 Appreciation Right”), on such terms and conditions, as it shall determine.

	
 

	
 

	
 

	
 

	
(c)

	
Term and Exercisability of Stock Appreciation Rights.
 Stock Appreciation Rights granted to a Non-Employee Director under this
 Section 6 shall vest and be exercisable in full on the date of grant,
 except to the extent the Board or Committee provides otherwise in the Stock
 Appreciation Right agreement; provided, however, that in no event
 shall a Non-Employee Director initially appointed by the Board be entitled to
 exercise a Stock Appreciation Right unless, and until such time as, such
 director shall have been elected to the Board by the shareholders of the
 Company. Notwithstanding the foregoing, except as otherwise provided in the
 Stock Appreciation Right agreement, vesting of a Stock Appreciation Right
 granted to a Non-Employee Director who shall have been elected by the
 shareholders of the Company shall accelerate and shall become immediately
 exercisable in full upon the occurrence of a Change in Control or in the event
 that the Non-Employee Director ceases to serve as a director of the Company
 due to death, Disability, resignation or retirement under the policies of the
 Company then in effect. Stock Appreciation Rights shall expire no later than
 the ten-year anniversary date of the Stock Appreciation Rights’ grant; provided,
 that a Stock Appreciation Right granted to a Non-Employee Director initially
 appointed by the Board shall expire on the date such director ceases to be a
 director of the Company unless such director shall have been elected by the
 shareholders subsequent to the grant of the Initial Award to such director.

	
 

	
 

	
 

	
 

	
(d)

	
Settlement
of Appreciation Right. Upon exercise of an Appreciation Right, the
Participant shall receive Shares with an aggregate value determined by
multiplying the number of Appreciation Rights units being exercised, by the
excess of (i) the Fair Market Value of a Share as of the date of
exercise over (ii) the Fair Market Value of a Share as of the date of
the Award.

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7. 

	
Initial and Annual Awards. 

	
 

	
 

	
 

	
(a) 

	
General. Each Non-Employee Director shall
  automatically be granted an Initial Award and
  Annual Award. Such Awards may take the form of an Option or Stock
  Appreciation Right as determined by the Committee from time to time. The
  provisions of Section 5 or 6 respectively shall govern the Option or Stock
  Appreciation Rights Agreement except as otherwise provided in this Section 7.

	
 

	
 

	
 

	
 

	
(b)  

	
Initial Award. Each Non-Employee Director
  shall automatically be granted on the date such director first becomes a
  director an “Initial Award” for a number of units determined by dividing (i)
  two times the amount of the Annual Retainer as in effect immediately
  following such election or appointment by (ii) the Fair Market Value of a
  Share on the date of grant. No increase in the Annual Retainer of the
  Non-Employee Directors after a person becomes a Non-Employee Director shall
  increase the number of units subject to the Initial Award granted to such
  Non-Employee Director. An employee of the Company or an Affiliate who
  terminates such employment and thereafter becomes a Non-Employee Director is
  not entitled to receive an Initial Award but will be entitled to receive
  Annual Awards. A Non-Employee Director is not entitled to receive more than
  one Initial Award during his or her lifetime. For purposes of Section 7(b)
  and 7(c) a unit shall represent an Option or Stock Appreciation Right with
  respect to one share of Stock. 

	
 

	
 

	
 

	
 

	
(c) 

	
Annual Awards. On the first day of each Plan
  Year, each Non-Employee Director shall automatically be granted an Annual
  Award for a number of units equal to (i) the amount of the Annual Retainer in
  effect as of such day, divided by (ii) the Fair Market Value of a Share on
  the first day of the Plan Year. If there is an increase in the Annual
  Retainer after the Annual Award is granted in a given year, each Non-Employee
  Director shall automatically be granted, as of the date such increase is
  approved, a supplemental Annual Award for the number of units equal to (i)
  the amount of the increase in such Annual Retainer divided by (ii) the Fair
  Market Value of a Share on the date of the grant. In the event that a
  Non-Employee Director joins the Board in the middle of the Plan Year, then
  such Non-Employee Director shall automatically be granted an Annual Award for
  a number of units equal to (i) the product obtained by multiplying the amount
  of the Annual Retainer in effect as of such day by a fraction the numerator
  of which is the number of days remaining in the Plan Year as of the day such
  Non-Employee Director commenced her or his term as a Non-Employee Director
  and the denominator of which is 365, divided by (ii) the Fair Market Value of
  a Share on the day that such Non-Employee Director commenced her or his term
  as a Non-Employee Director. 

	
 

	
 

	
 

	
 

	
(d) 

	
Term and Exercisability of Awards. Initial
Awards and Annual Awards shall expire on the fifth anniversary of the date
the Non-Employee Director ceases to be a director of the Company for any
reason, if earlier than the tenth anniversary of the date of the grant of the
Award; and provided, further, that the Initial Award granted to a
Non-Employee Director initially appointed by the Board shall expire on the
date such director ceases to be a director of the Company unless such
director shall have  

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been elected
  by the shareholders subsequent to the grant of the Initial Award to such
  director. 

	
 

	
 

	
 

	
 

	
8. 

	
Deferred Stock Units.

	
 

	
 

	
 

	
 

	
 

	
(a) 

	
Annual Credit. As of the last day of each
  Plan Year, there shall be credited to the Account of each Participant who is
  a Non-Employee Director on such day a number of Deferred Stock Units equal to
  (i) the Annual Retainer in effect as of such day, times the Pro-Ration
  Factor, divided by (ii) the average of the Fair Market Value of a Share on
  each of the last 20 trading days during such Plan Year determined in
  accordance with clause (i) of Section 2(o) or, if clause (i) of Section 2(o)
  is inapplicable, the Fair Market Value of a Share as of the last day of such
  Plan Year determined in accordance with clause (ii) of Section 2(o). There
  shall be credited to the Account of any Non-Employee Director who retires
  from the Board prior to the last day of the Plan Year, as of the retirement
  date, a number of Deferred Stock Units equal to (i) the Annual Retainer in
  effect as of such date, times the Pro-Ration Factor, divided by (ii) the
  average of the Fair Market Value of a Share on each of the last 20 trading
  days prior to such date as determined in accordance with Section 2(o).

	
 

	
 

	
 

	
 

	
 

	
(b) 

	
Discretionary Credits. The Board or the
  Committee may, in its discretion, at any time and from time to time, cause
  additional Deferred Stock Units to be credited to the account of any
  Non-Employee Director.

	
 

	
 

	
 

	
 

	
 

	
(c) 

	
Credits of Dividend Equivalents; Maintenance of Accounts. The
  Company shall maintain an Account for each Participant to which the credits
  provided for in Sections 8(a) and (b) above shall be made. Each Participant’s
  Account shall be credited from time to time with additional Deferred Stock
  Units to reflect deemed reinvestment of any amounts that would have been paid
  as cash dividends with respect to the Deferred Stock Units held in such
  Account if they were Shares. Subject to the provisions of Section 8(d)
  regarding delivery of Shares, Accounts may be credited with fractional
  Deferred Stock Units pursuant to this Section 8(c) and Sections 8(a) and (b).

	
 

	
 

	
 

	
 

	
 

	
(d) 

	
Delivery of Shares from Accounts.

	
 

	
 

	
 

	
 

	
 

	
 

	
(i) 

	
Each
  Participant shall be provided the opportunity to elect, in accordance with
  procedures established by the Committee in compliance with the requirements
  of Section 409A of the Code, whether to receive the amounts credited to the
  Participant’s Account in a single lump sum or in five annual installments.
  Such election shall be made no later than the December 31 prior to the Plan
  Year in which the Deferred Stock Units are earned (or such later date
  permitted under Section 409A of the Code); provided, however, that in the
  case of a newly appointed director such election may be made within 30 days
  of the date of such appointment. Any such election made by a newly appointed
  director shall apply only to that portion of the Deferred Stock Units that
  are earned after the election is made. Alternatively, an individual may 

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make an
  election immediately before being appointed to the Board that is conditioned
  on the individual’s actual appointment. Once made, an election may be changed
  on or before December 31 of any year, but such changed election shall take
  effect only with respect to Awards for the Plan Year beginning after such
  change. If no election is made for a Plan Year, the amounts credited to a
  Participant’s account with respects to Awards for such year shall be
  delivered in a lump sum. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii) 

	
If a
Participant has elected a lump sum delivery, or if a Participant dies while a
member of the Board, the Participant or the Participant’s Successor, as
applicable, shall receive a number of Shares equal to the total number of
Deferred Stock Units in the Participant’s Account as of the date on which the
Participant ceases for any reason to be a member of the Board (the
“Termination Date”) in full satisfaction of all of the Participant’s interest
in the Account; provided, that any fractional Deferred Stock Units shall be
rounded to the nearest higher whole number of Shares. Payment shall be
delivered to the Participant or the Participant’s Successor in the form of
Shares as soon as practicable, but not later than 90 days, after the
Participant’s Termination Date. If a Participant has elected installment
delivery and ceases to be a member of the Board for any reason other than the
death of the Participant, then the Participant shall receive the balance in
such Participant’s Account in the form of five annual deliveries of Shares
(and if a Participant dies after ceasing to be a Board member, any remaining
annual deliveries shall be made to the Participant’s Successor). The first
installment shall be made as soon as practicable, but not later than 90 days
after the Participant’s Termination Date. The remaining four installments
shall be made on the subsequent anniversary dates of the initial installment
payment. The precise number of shares delivered in each installment shall be
determined in such a manner as to cause each such delivery to represent approximately
one-fifth of the Deferred Stock Units held in such Account as of the
Termination Date together with any dividend equivalents credited thereon.
Notwithstanding the foregoing, no such installment shall be delivered unless
and until the Board or the Committee shall have approved the delivery (unless
such approval is not necessary under Exchange Act Rule 16b-3).  

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Notwithstanding
  anything in Section 8(d)(iii) to the contrary, if a Change in Control
  constituting a “change in control” within the meaning of Section 409A of the
  Code occurs, the balance in each Participant’s Account shall be delivered to
  the Participant in a single lump sum delivery of Shares no later than 90 days
  following the Change in Control.

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9. 

	
General Provisions. 

	
 

	
 

	
 

	
(a) 

	
Effective Date of this Plan. This Plan originally became effective as of March 5, 1998. 

	
 

	
 

	
 

	
 

	
(b)

	
Duration of this Plan. This Plan shall remain in effect until it is terminated pursuant to Section 9(e) hereof.

	
 

	
 

	
 

	
 

	
(c) 

	
No Right to Board Membership. Nothing in
  this Plan or in any Agreement shall confer upon any Participant the right to
  continue as a member of the Board. 

	
 

	
 

	
 

	
 

	
(d) 

	
Transferability. A non-Employee Director may
transfer an Award granted pursuant to Section 5, 6, or 7 to any member of
such Non-Employee Director’s “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 such
Non-Employee Director’s “immediate family” or partnerships in which such
family members are the only partners; provided, that (i) the transferor
receives no consideration for the transfer and (ii) such transferred Award
shall continue to be subject to the same terms and conditions as were
applicable to such Award immediately prior to its transfer. Unless an Award
granted pursuant to Section 5, 6, or 7 shall have expired, in the event of a
Non-Employee Director’s death, an Award granted to such Non-Employee Director
pursuant to Section 5, 6, or 7 shall be transferable to the beneficiary, if
any, designated by the Non-Employee Director in writing to the Company prior
to the Non-Employee Director’s death and such beneficiary shall succeed to
the rights of the Non-Employee Director to the extent permitted by law. If no
such designation of a beneficiary has been made, the Non-Employee Director’s
legal representative shall succeed to such Award, which shall be transferable
by will or pursuant to the laws of descent and distribution.  

	
 

	
 

	
 

	
 

	
(e) 

	
Amendment, Modification and Termination of this Plan.
  Except as provided in this Section 9(e), the Board may at any time amend,
  modify, terminate or suspend this Plan or any or all Agreements under this
  Plan to the extent permitted by law. No termination, suspension or
  modification of this Plan may materially and adversely affect any right
  acquired by any Participant (or a Participant’s legal representative) or any
  Successor under an Award granted before the date of termination, suspension
  or modification, unless otherwise agreed by the Participant in the Agreement
  or otherwise or required as a matter of law. It is conclusively presumed that
  any adjustment for changes in capitalization provided for in Section 9(f)
  hereof does not adversely affect any right of a Participant under an Award. 

	
 

	
 

	
 

	
 

	
(f) 

	
Adjustment for Changes in Capitalization.
  Appropriate adjustments in the aggregate number and type of Shares available
  for Awards under this Plan, in the number and type of Shares subject to
  Awards then outstanding, in the Award exercise or conversion price as to any
  outstanding Awards, and in the number of Deferred Stock Units in the
  Accounts, may be made by the Committee in its sole discretion to give effect
  to adjustments made in the number or type of Shares through a 

11

	
 

	
 

	
 

	
 

	
 

	
 

	
Fundamental
  Change, recapitalization, reclassification, stock dividend, stock split,
  stock combination, or other relevant change, provided that fractional Shares
  shall be rounded to the nearest whole Share.

	
 

	
 

	
 

	
(g) 

	
Fundamental Change. In the event of a
  proposed Fundamental Change:

	
 

	
 

	
(a) involving a merger, consolidation or statutory share exchange, unless
  appropriate provision shall be made (which the Board may, but shall not be
  obligated to, make) for the protection of the outstanding Awards by the
  substitution of appropriate voting common stock of the corporation surviving
  any such merger or consolidation or, if appropriate, the parent corporation
  of the Company or such surviving corporation, to be issuable upon the
  exercise of Awards, or (b) involving the dissolution or liquidation of the
  Company, the Board may, but shall not be obligated to, declare, at least
  twenty days prior to the occurrence of the Fundamental Change, and provide
  written notice to each holder of an Award granted pursuant to Section 5, 6 or
  7 of the declaration, that each such outstanding Award, whether or not then
  exercisable, shall be canceled at the time of, or immediately prior to the
  occurrence of, the Fundamental Change in exchange for payment in cash to each
  holder of such Award, within 20 days after the Fundamental Change. At the
  time of the declaration provided for in the immediately preceding sentence,
  each such Award shall immediately become fully vested and each person holding
  such an Award shall have the right, during the period preceding the time of
  cancellation of the Award, to exercise the Award in full or any portion
  thereof. Payment to holders of Options for each Share covered by the canceled
  Option shall be equal to the amount, if any, by which the Fair Market Value
  (as defined in this Section 9(g)) per Share exceeds the exercise price per
  Share covered by such Option. Payment to holders of each cancelled Stock
  Appreciation Right shall be equal to the aggregate amount of appreciation, if
  any. In the event of a declaration pursuant to this Section 9(g), each
  outstanding Option or Stock Appreciation Right that shall not have been
  exercised prior to the Fundamental Change shall be canceled at the time of,
  or immediately prior to, the Fundamental Change, as provided in the
  declaration. Notwithstanding the foregoing, no person holding such an Award
  shall be entitled to the payment provided for in this Section 9(g) if such
  Award shall have previously expired. For purposes of this Section 9(g) only,
  “Fair Market Value” per Share means the cash plus the fair market value, as
  determined in good faith by the Board, of the non-cash consideration to be
  received per Share by the shareholders of the Company upon the occurrence of
  the Fundamental Change, notwithstanding anything to the contrary provided in
  this Plan. 

	
 

	
 

	
 

	
 

	
(h) 

	
Limits of Liability. 

	
 

	
 

	
 

	
 

	
 

	
(i) 

	
Any
  liability of the Company to any Participant with respect to an Award shall be
  based solely upon contractual obligations created by this Plan and the Agreement.
  

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii) 

	
Except as
  may be required by law, neither the Company nor any member or former member
  of the Board or of the Committee, nor any other person participating
  (including participation pursuant to a delegation of authority 

12

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
under
  Section 3(a) hereof) in any determination of any question under this Plan, or
  in the interpretation, administration or application of this Plan, shall have
  any liability to any party for any action taken, or not taken, in good faith
  under this Plan.

	
 

	
 

	
 

	
 

	
 

	
(i) 

	
Compliance with Applicable Legal
  Requirements. No certificate for Shares distributable pursuant to this Plan
  shall be issued and delivered unless the issuance of such certificate
  complies with all applicable legal requirements including, without limitation,
  compliance with the provisions of applicable state securities laws, the
  Securities Act of 1933, as amended and in effect from time to time or any
  successor statute, the Exchange Act and the requirements of the exchanges on
  which the Company’s Shares may, at the time, be listed.

	
 

	
 

	
 

	
 

	
(j) 

	
Removal for Cause. Notwithstanding any other
  provision of this Plan, this Section 9(j) shall apply in the event a
  Participant is removed from the Board for cause before a Change of Control.
  In such event: (i) all of the Participant’s Awards granted pursuant to
  Sections 5, 6 and 7 shall immediately expire and be forfeited, and (ii)
  unless the Board or Committee determines in connection with or after such
  removal to forfeit all or a portion of a Participant’s Account, the balance
  in such Participant’s Account shall be delivered to the Participant at the
  time and in the manner described in Section 8. In addition, if the
  Participant has received or been entitled to delivery of Shares within six
  months before such removal, the Board or the Committee, in its sole
  discretion, may require the Participant to return or forfeit all or a portion
  of such Shares and receive back the exercise price (if any) paid therefor, or
  may require the Participant to pay to the Company the economic value of such
  Shares less such exercise price, determined as of the date of the exercise of
  Awards in the event of any of the following occurrences (whether before or
  after such removal): competition with the Company or any Affiliate,
  unauthorized disclosure of material proprietary information of the Company or
  any Affiliate, a violation of applicable business ethics policies or business
  policies of the Company or any Affiliate, or any other action or event that
  the Board may determine warrants such a requirement. The Board’s or
  Committee’s right to require such return or forfeiture must be exercised
  within 90 days after the later of the date of such removal or the discovery
  of such an occurrence, but in no event later than 15 months after such removal.

	
 

	
 

	
 

	
10. 

	
Governing Law. To the extent that federal
  laws do not otherwise control, this Plan and all determinations made and
  actions taken pursuant to this Plan shall be governed by the laws of
  Minnesota and construed accordingly.

	
 

	
 

	
11. 

	
Severability. In the event any provision of
  this Plan shall be held illegal or invalid for any reason, the illegality or
  invalidity shall not affect the remaining parts of this Plan, and this Plan
  shall be construed and enforced as if the illegal or invalid provision had
  not been included.

	
 

	
 

	
12. 

	
Effect of Prior Plan. From and after the
  effective date of this Plan, no further awards shall be made to Non-Employee
  Directors under the Company’s 1994 Stock Award Plan (the

13

“Prior Plan”).
All grants and awards made under the Prior Plan prior to the effective date of
this Plan shall continue in accordance with the terms of the Prior Plan. 

14MEDTRONIC, INC.

2003 LONG-TERM INCENTIVE PLAN

(As amended and restated effective January 1, 2008)

	
 

	
 

	
1. 

	
Purpose
  of the Plan

          The
purpose of the Plan is to aid the Company and its Affiliates in recruiting and
retaining employees and to motivate such employees and other plan participants
to exert their best efforts on behalf of the Company and its Affiliates by
providing incentives through the granting of Awards. The Company expects that
it will benefit from the stock ownership opportunities provided to such
participants to encourage alignment of their interest in the Company’s success
with that of other stakeholders. The Company hereby restates the Plan in its
entirety effective January 1, 2008 to comply with the provisions of Section
409A of the Internal Revenue Code.

	
 

	
 

	
2.

	
Definitions

          The
following capitalized terms used in the Plan have the respective meanings set
forth in this Section:

	
 

	
 

	
 

	
 

	
(a)

	
“Act” means the
  Securities Exchange Act of 1934, as amended, or any successor thereto.

	
 

	
 

	
 

	
 

	
(b)

	
“Affiliate” means
  any entity that is consolidated with the Company for financial reporting
  purposes or any other entity designated by the Board in which the Company or
  an Affiliate has a direct or indirect interest of at least forty percent (40%).

	
 

	
 

	
 

	
 

	
(c)

	
“Award” means an
  Option, Stock Appreciation Right, Share of Restricted Stock, Other
  Stock-Based Award or Other Cash-Based Award granted pursuant to the Plan.

	
 

	
 

	
 

	
 

	
(d)

	
“Board” means the
  Board of Directors of the Company.

	
 

	
 

	
 

	
 

	
(e)

	
“Code” means the
  Internal Revenue Code of 1986, as amended, or any successor thereto.

	
 

	
 

	
 

	
 

	
(f)

	
“Committee” means
  the Compensation Committee of the Board.

	
 

	
 

	
 

	
 

	
(g)

	
“Company” means
  Medtronic, Inc., a Minnesota corporation.

	
 

	
 

	
 

	
 

	
(h)

	
“Effective Date”
  means the date the adoption of the Plan by the Board of Directors is approved
  by the Company’s shareholders.

	
 

	
 

	
 

	
 

	
(i)

	
“Exercise Price”
  means the purchase price per Share under the terms of an option as determined
  pursuant to Section 6(a).

	
 

	
 

	
 

	
 

	
(j)

	
“Fair Market Value”
  means, on a given date, (i) if there should be a public market for the Shares
  on such date, the closing sale price of the Shares on The New York Stock
  Exchange, or, if the Shares are not listed or admitted on any national
  securities exchange, the arithmetic mean of the per Share closing bid price
  and per Share closing asked price on such date as quoted on the National
  Association of Securities Dealers Automated Quotation System (or such market
  in which such prices are regularly quoted) (the “NASDAQ”), or, if no sale of
  Shares shall have been reported on The New York Stock Exchange or quoted on
  the NASDAQ on such date, then the immediately preceding date on which sales
  of the Shares have been so reported or quoted shall be used, and (ii) if there
  should not be a public market for the Shares on such date, the Fair Market
  Value shall be the value established by the Committee in good faith.

	
 

	
 

	
 

	
 

	
(k)

	
“ISO” means an
  Option that is an incentive stock option granted pursuant to Section 6(d).

	
 

	
 

	
 

	
 

	
(l)

	
“Option” means a
  stock option granted pursuant to Section 6.

	
 

	
 

	
 

	
 

	
(m)

	
“Other Stock-Based Awards”
  means Awards granted pursuant to Section 9(a) or 10.

	
 

	
 

	
 

	
 

	
(n)

	
“Other Cash-Based Awards”
  means Awards granted pursuant to Section 9(b) or 10.

	
 

	
 

	
 

	
 

	
(o)

	
“Participant” means
  an employee of the Company or an Affiliate who is selected by the Committee
  to participate in the Plan. An Award may also be granted to any consultant,
  agent, advisor or independent contractor who renders bona fide services to
  the Company or an Affiliate that (i) are not in connection with the offer and
  sale of the Company’s securities in a capital-raising transaction and (ii) do
  not directly or indirectly promote or maintain a market for the Company’s
  securities. Except where the context otherwise requires, references in this
  Plan to “employment” and related terms shall apply to services in any such
  capacity.

	
 

	
 

	
 

	
 

	
(p)

	
“Performance-Based Awards”
   means certain Restricted Stock, Other Stock-Based Awards and Other
  Cash-Based Awards granted pursuant to Section 10.

	
 

	
 

	
 

	
 

	
(q)

	
“Plan” means the
  2003 Long-Term Incentive Plan, as amended from time to time.

	
 

	
 

	
 

	
 

	
(r)

	
“Restricted Stock”
  means any Share granted under Section 8.

	
 

	
 

	
 

	
 

	
(s)

	
“Shares” means
  shares of common stock of the Company, $.10 par value per share.

	
 

	
 

	
 

	
 

	
(t)

	
“Stock Appreciation Right”
  means a stock appreciation right granted pursuant to Section 7.

	
 

	
 

	
 

	
 

	
(u)

	
“Subsidiary” means
  a subsidiary corporation, as defined in Section 424(f) of the Code (or any
  successor section thereto), of the Company.

	
 

	
 

	
3.

	
Shares
  Subject to the Plan

          The
total number of Shares which may be issued under the Plan is 60,000,000, of
which no more than 50% may be issued in the form of Restricted Stock or Other
Stock-Based Awards payable in Shares, provided, however, that no more than 5%
of the Shares reserved under the Plan shall be granted pursuant to Restricted
Stock Awards if such Award (a) shall vest in full prior to three years from the
Award date or (b) if a condition to such vesting is based, in whole or in part,
upon performance of the Shares or any aspect of the Company’s operations and
such vesting could occur over a period of less than one year from the Award
date. The Shares may consist, in whole or in part, of unissued Shares. The
issuance of Shares upon the exercise or satisfaction of an Award shall reduce
the total number of Shares available under the Plan. Shares which are subject
to Awards that terminate, lapse or are cancelled may be granted again under the
Plan. Any Shares tendered by a Participant or retained by the Company as full
or partial payment to the Company for the purchase price of an Award or to
satisfy tax withholding obligations in connection with an Award shall be
available for Awards under the Plan. No fractional Shares will be issued in
payment for any Award, but instead the number of Shares will be rounded upward
to the next whole Share.

	
 

	
 

	
4.

	
Administration

	
 

	
 

	
 

	
 

	
(a)

	
Delegation of Authority. The Plan shall be administered by the
  Committee, which may delegate its duties and powers in whole or in part to
  (i) any subcommittee thereof consisting solely of at least two individuals
  who are intended to qualify as “non-employee directors” within the meaning of
  Rule 16b-3 under the Act (or any successor rule thereto) and, to the extent
  required by Section 162(m) of the Code (or any successor section thereto),
  “outside directors” within the meaning thereof and (ii) persons who are not
  non-employee directors for purposes of determining and administering Awards
  to those Participants who are not then subject to the reporting requirements
  of Section 16 of the Act.

	
 

	
 

	
 

	
 

	
(b)

	
Authority of Committee. The Committee shall have exclusive power
  to make Awards and to determine when and to whom Awards shall be granted, and
  the form, amount and other terms and conditions of each Award, subject to the
  provisions of this Plan. The Committee may determine whether, to what extent
  and under what circumstances Awards may be settled, paid or exercised in
  cash, Shares or other Awards or other property, or cancelled, forfeited or
  suspended. The Committee shall have the authority to interpret this Plan and
  any Award or agreement made under this Plan, to establish, amend, waive and
  rescind any rules and regulations relating to the administration of this
  Plan, to determine the terms and provisions of any agreements entered into
  hereunder (not inconsistent with this Plan), and to make all other
  determinations necessary or advisable for the administration of this Plan.
  The Committee may correct any defect, supply any omission or reconcile any
  inconsistency in this Plan or in any Award or agreement in the manner and to
  the extent it shall deem desirable. The determinations of the Committee in
  the administration of this Plan, as described herein, shall be final, binding
  and conclusive.

	
 

	
 

	
 

	
 

	
(c)

	
Rule 16b-3. It is the intent that this Plan and all Awards granted pursuant to
  it shall be administered by the Committee (or a subcommittee thereof) so as
  to permit this Plan and Awards to comply with Rule 16b-3 under the Act. If
  any provision of this Plan or any Award would otherwise frustrate or conflict
  with the intent expressed in this Section 4(c), that provision to the extent
  possible shall be interpreted and deemed amended in the manner determined by
  the Committee so as to avoid such conflict.

	
 

	
 

	
 

	
 

	
(d)

	
Indemnification. To the full extent permitted by law, each
  member and former member of the Committee and each person to whom the
  Committee delegates or has delegated authority under this Plan shall be entitled
  to indemnification by the Company against and from any loss, liability,
  judgment, damages, cost and reasonable expense incurred by such member,
  former member or other person by reason of any action taken, failure to act
  or determination made in good faith under or with respect to this Plan.

	
 

	
 

	
 

	
 

	
(e)

	
Tax Withholding. The Committee shall require payment of
  any amount it may determine to be necessary to withhold for federal, state,
  local, non-U.S. income, payroll or other taxes as a result of the exercise,
  grant or vesting of an Award. Notwithstanding anything in any Award agreement
  to the contrary, the employee may not elect to charge any tax amounts against
  his or her Award.

	
 

	
 

	
 

	
 

	
(f)

	
Dividends or Dividend Equivalents. If the Committee so determines, any Award
  granted under the Plan may be credited with dividends or dividend equivalents
  paid with respect to the underlying shares. The 

	
 

	
 

	
 

	
 

	
 

	
Committee may apply any
  restrictions to the dividends or dividend equivalents that the Committee
  deems appropriate and may determine the form of payment, including cash,
  Shares, Restricted Stock or otherwise.

	
 

	
 

	
 

	

	
(g)

	
Code Section 409A. Any Award
  agreement that is subject to Code Section 409A and provides for payment upon
  termination of employment or separation from service shall not be payable to
  a Participant that is a “specified employee” until six months following the
  date of such Participant’s “separation from service.” A “specified employee”
  and a “separation from service” shall be determined by the Company in
  accordance with the Company’s Capital Accumulation Plan and similar Code
  Section 409A arrangements.

	
 

	
 

	
5.

	
Limitations

	
 

	
 

	
 

	
 

	
(a)

	
Term of Plan. No Award may be granted under the Plan after the tenth anniversary
  of the Effective Date, but Awards granted prior to such tenth anniversary may
  extend beyond that date.

	
 

	
 

	
 

	
 

	
(b)

	
No Repricing. No Option or Stock Appreciation Right, once granted hereunder, may
  be repriced.

	
 

	
 

	
 

	
 

	
(c)

	
Maximum. No Participant may be granted Options, Stock Appreciation Rights,
  Restricted Stock, Performance-Based Awards, Other Stock-Based Awards or any
  combination thereof relating to more than 2,000,000 Shares under the Plan
  during any fiscal year.

	
 

	
 

	
6.

	
Terms and
  Conditions of Options

          Options
granted under the Plan shall be, as determined by the Committee, non-qualified
or incentive stock options for federal income tax purposes, as evidenced by the
related Award agreements, and shall be subject to the foregoing and the
following terms and conditions and to such other terms and conditions, not
inconsistent therewith, as the Committee shall determine:

	
 

	
 

	
 

	
 

	
(a)

	
Exercise Price. The Exercise Price per Share shall be
  determined by the Committee, but shall not be less than 100% of the Fair
  Market Value of the Shares on the date an Option is granted.

	
 

	
 

	
 

	
 

	
(b)

	
Exercisability. Options granted under the Plan shall be
  exercisable at such time and upon such terms and conditions as may be
  determined by the Committee, but in no event shall an Option be exercisable
  more than ten years after the date it is granted, except as provided in
  Section 16 of the Plan.

	
 

	
 

	
 

	
 

	
(c)

	
Exercise of Options. Except as otherwise provided in the Plan
  or in an Award agreement, an Option may be exercised for all, or from time to
  time any part, of the Shares for which it is then exercisable. For purposes
  of this Section 6, the exercise date of an Option shall be the date a notice
  of written or electronic exercise and full payment of the purchase price are
  received by the Company in accordance with this Section 6(c). The purchase
  price for the Shares as to which an Option is exercised shall be paid to the
  Company pursuant to one or more of the following methods, except as otherwise
  provided in an Award agreement: (i) in cash or its equivalent (e.g., by
  check); (ii) in Shares having a Fair Market Value equal to the aggregate
  Exercise Price for the Shares being purchased and satisfying such other
  requirements as may be imposed by the Committee; (iii) partly in cash and
  partly in such Shares; (iv) if there is a public market for the Shares at
  such time, through the delivery of irrevocable instructions to a broker to
  sell Shares obtained upon the exercise of the Option and to deliver promptly
  to the Company an amount out of the proceeds of such sale equal to the
  aggregate Exercise Price for the Shares being purchased; or (v) through the
  withholding of Shares having a Fair Market Value equal to the aggregate
  Exercise Price for the Shares being purchased from the number of Shares
  otherwise issuable upon the exercise of the Option (e.g., a net share
  settlement). No Participant shall have any rights of a shareholder with
  respect to Shares subject to an Option until the Participant has given
  written or electronic notice of exercise of the Option, paid in full for such
  Shares and, if applicable, has satisfied any other conditions imposed by the
  Committee pursuant to the Plan.

	
 

	
 

	
 

	
 

	
(d)

	
ISOs. The Committee may grant Options under the
  Plan that are intended to be ISOs. Such ISOs shall comply with the
  requirements of Section 422 of the Code (or any successor section
  thereto). No ISO may be granted to any Participant who, at the time of such
  grant, owns more than ten percent of the total combined voting power of all
  classes of stock of the Company or of any Subsidiary, unless (i) the Exercise
  Price for such ISO is at least 110% of the Fair Market Value of a Share on
  the date the ISO is granted and (ii) the date on which such ISO terminates is
  a date not later than the day preceding the fifth anniversary of the date on
  which the ISO is granted Any Participant who disposes of Shares acquired upon
  the exercise of an ISO either (I) within two years after the date of grant of
  such ISO or (II) within one year after the transfer of such Shares to the
  Participant, shall notify the Company of such disposition and of the amount
  realized upon such disposition. All Options granted under the Plan are 

	
 

	
 

	
 

	
 

	
 

	
intended to be
  non-qualified stock options unless the applicable Award agreement expressly
  states that the Option is an ISO. If an Option is intended to be an ISO, and
  if for any reason such Option (or portion thereof) shall not qualify as an
  ISO, then, to the extent of such nonqualification, such Option (or portion
  thereof) shall be regarded as a non-qualified stock option granted under the
  Plan; provided that such Option (or portion thereof) otherwise complies with
  the Plan’s requirements relating to non-qualified stock options. In no event
  shall any member of the Committee, the Company or any of its Affiliates (or
  their respective employees, officers or directors) have any liability to any
  Participant (or any other person or entity) due to the failure of an Option
  to qualify for any reason as an ISO.

	
 

	
 

	
 

	

	
(e)

	
Attestation. Wherever in this Plan or any agreement evidencing an Award a
  Participant is permitted to pay the Exercise Price of an Option or taxes
  relating to the exercise of an Option by delivering Shares, the Participant
  may, subject to procedures satisfactory to the Committee, satisfy such
  delivery requirement by presenting proof of beneficial ownership of such
  Shares rather than physical delivery, in which case the Company shall treat
  the Option as exercised without further payment and shall withhold such
  number of Shares from the Shares issued upon the exercise of the Option.

	
 

	
 

	
7.

	
Terms and
  Conditions of Stock Appreciation Rights

	
 

	
 

	
 

	
 

	
(a)

	
Grants. The Committee may grant (i) a Stock Appreciation Right
  independent of an Option or (ii) a Stock Appreciation Right in
  connection with an Option, or a portion thereof. The Committee may impose
  such terms and conditions upon any Stock Appreciation Right as it deems fit.
  A Stock Appreciation Right granted pursuant to clause (ii) of the
  preceding sentence (A) may be granted at the time the related Option is
  granted or at any time prior to the exercise or cancellation of the related
  Option, (B) shall cover the same number of Shares covered by an Option
  (or such lesser number of Shares as the Committee may determine) and
  (C) shall be subject to the same terms and conditions as such Option
  except for such additional limitations as are contemplated by this
  Section 7 (or such additional limitations as may be included in an Award
  agreement).

	
 

	
 

	
 

	
 

	
(b)

	
Terms. The exercise price per Share of a Stock Appreciation Right shall be
  an amount determined by the Committee but in no event shall such amount be
  less than the Fair Market Value of a Share on the date the Stock Appreciation
  Right is granted; provided, however, that, notwithstanding the foregoing, in
  the case of a Stock Appreciation Right granted in conjunction with an Option,
  or a portion thereof, the exercise price may not be less than the Exercise
  Price of the related Option. Each Stock Appreciation Right granted
  independent of an Option shall entitle a Participant upon exercise to an
  amount equal to (i) the excess of (A) the Fair Market Value on the
  exercise date of one Share over (B) the Exercise Price per Share, times
  (ii) the number of Shares covered by the Stock Appreciation Right. Each
  Stock Appreciation Right granted in conjunction with an Option, or a portion
  thereof, shall entitle a Participant to surrender to the Company the
  unexercised Option, or any portion thereof, and to receive from the Company
  in exchange therefor an amount equal to (I) the excess of (x) the
  Fair Market Value on the exercise date of one Share over (y) the
  Exercise Price per Share, times (II) the number of Shares covered by the
  Option, or portion thereof, which is surrendered. Payment shall be made in
  Shares or in cash, or partly in Shares and partly in cash (any such Shares
  valued at such Fair Market Value), all as set forth in the Award agreement.
  Stock Appreciation Rights may be exercised from time to time upon actual
  receipt by the Company of written or electronic notice of exercise stating
  the number of Shares with respect to which the Stock Appreciation Right is
  being exercised. The date a notice of exercise is received by the Company
  shall be the exercise date.

	
 

	
 

	
8.

	
Restricted
  Stock

	
 

	
 

	
 

	
 

	
(a)

	
Grant. Subject to the provisions of the Plan, the Committee shall determine
  the number of Shares of Restricted Stock to be granted to each Participant,
  the duration of the period during which, and the conditions, if any, under
  which, the Restricted Stock may be forfeited to the Company, and the other
  terms and conditions of such Awards.

	
 

	
 

	
 

	
 

	
(b)

	
Transfer Restrictions. Shares of Restricted Stock may not be
  sold, assigned, transferred, pledged or otherwise encumbered, except as
  provided in the Plan or the applicable Award agreement. Shares of Restricted
  Stock shall be registered in the name of the Participant and held by the
  Company. After the lapse of the restrictions applicable to such Shares of
  Restricted Stock, the Company shall deliver such Shares to the Participant or
  the Participant’s legal representative.

	
 

	
 

	
 

	
 

	
(c)

	
Dividends. Dividends or dividend equivalents paid on any Shares of Restricted
  Stock may be paid directly to the Participant, withheld by the Company
  subject to vesting of the Restricted Stock pursuant to the terms of the
  applicable Award agreement, or may be reinvested in additional Shares of
  Restricted 

	
 

	
 

	
 

	
 

	
 

	
Stock, as determined by
  the Committee in its sole discretion.

	
 

	
 

	
 

	
9.

	
Other
  Awards

	
 

	
 

	
 

	
 

	
(a)

	
Other Stock-Based Awards. The Committee, in its sole discretion,
  may grant Awards of Shares and Awards that are valued in whole or in part by
  reference to, or are otherwise based on, Shares or on the Fair Market Value
  thereof (“Other Stock-Based Awards”). Such Other Stock-Based Awards shall be
  in such form, and dependent on such conditions, as the Committee shall determine,
  including, without limitation, the right to receive, or vest with respect to,
  one or more Shares (or the equivalent cash value of such Shares) upon the
  completion of a specified period of service, the occurrence of an event
  and/or the attainment of performance objectives. Other Stock-Based Awards may
  be granted alone or in addition to any other Awards granted under the Plan.
  Subject to the provisions of the Plan, the Committee shall determine the
  number of Shares to be awarded to a Participant under (or otherwise related
  to) such Other Stock-Based Awards; whether such Other Stock-Based Awards
  shall be settled in cash, Shares or a combination of cash and Shares; and all
  other terms and conditions of such Awards (including, without limitation, the
  vesting provisions thereof and provisions ensuring that all Shares so awarded
  and issued shall be fully paid and non-assessable).

	
 

	
 

	
 

	
 

	
(b)

	
Other Cash-Based Awards. In addition to the Awards described
  above, and subject to the terms of the Plan, the Committee may grant such
  other incentives denominated in cash and payable in cash under the Plan as
  the Committee determines to be in the best interests of the Company and
  subject to such other terms and conditions as it deems appropriate. The
  maximum amount of Other Cash-Based Awards (including those that are
  performance-based) that may be granted during any fiscal year shall be
  $3,000,000; provided, however, that for such Awards with performance periods
  longer than one year the maximum shall be $3,000,000 for each fiscal year in
  the performance period.

	
 

	
 

	
10.

	
Performance-Based
  Awards.

          Notwithstanding
anything to the contrary herein, the Committee may grant performance-based
Awards of Restricted Stock, Other Stock-Based Awards and Other Cash-Based Awards
to Participants (“Performance-Based Awards”). Any such Awards granted to
Participants who may be “covered employees” under Section 162(m) of the Code or
any successor section thereto shall be consistent with the provisions thereof.
In such cases, a Participant’s Performance-Based Award shall be determined
based on the attainment of written performance goals approved by the Committee
for a performance period established by the Committee (I) while the outcome for
that performance period is substantially uncertain and (II) by the earlier of
(A) 90 days after the commencement of the performance period to which the
performance goal relates or (B) the number of days which is equal to 25 percent
of the relevant performance period. The performance goals, which must be
objective, shall be based upon one or more of the following criteria: (i)
consolidated earnings before or after taxes (including earnings before
interest, taxes, depreciation and amortization); (ii) net income; (iii)
operating income; (iv) earnings per share; (v) book value per share; (vi)
return on shareholders’ equity; (vii) expense management; (viii) return on
investment; (ix) improvements in capital structure; (x) profitability of an
identifiable business unit or product; (xi) maintenance or improvements of
profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or
sales; (xv) costs; (xvi) cash flow; (xvii) working capital; (xviii) return on
assets; (xix) asset turnover; (xx) inventory turnover; (xxi) economic value
added (economic profit); and (xxii) total shareholder return. The foregoing
criteria may relate to the Company, one or more of its Subsidiaries or one or
more of its divisions or units, or any combination of the foregoing, and may be
applied on an absolute basis and/or be relative to one or more peer group
companies or indices, or any combination thereof, all as the Committee shall
determine. In addition, to the degree consistent with Section 162(m) of the
Code (or any successor section thereto), the performance goals may be
calculated without regard to the negative effect of unusual or nonrecurring
items, extraordinary items, discontinued operations or cumulative effects of
accounting changes. The Committee shall determine whether, with respect to a
performance period, the applicable performance goals have been met with respect
to a given Participant who may be a covered employee and, if they have, shall
so certify and ascertain the amount of the applicable Performance-Based Award. No Performance-Based Awards
will be paid for such performance period until such certification is made by
the Committee. The amount of the Performance-Based Award actually paid to a
given Participant may be less than the amount determined by the applicable
performance goal formula, at the discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee for a performance period
shall be paid to the Participant within two and one-half months following the
end of the performance period.

	
 

	
 

	
11.

	
Adjustments
  Upon Certain Events

          Notwithstanding
any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:

	
 

	
 

	
 

	
 

	
(a)

	
Generally. In the event of any change in the outstanding Shares after the
  Effective Date by reason of any Share dividend or split, reorganization,
  recapitalization, merger, consolidation, spin-off, combination or transaction
  or exchange of Shares or other corporate exchange, or any distribution to
  shareholders of Shares other than regular cash dividends or any transaction
  similar to the foregoing, the Committee in its sole discretion and without
  liability to any person may make such substitution or adjustment, if any, as
  it deems to be equitable, as to (i) the number or kind of Shares or other
  securities issued or reserved for issuance pursuant to the Plan or pursuant
  to outstanding Awards, (ii) the maximum number of Shares for which Awards
  (including limits established for Restricted Stock, Other Stock-Based Awards
  or Other Cash-Based Awards) may be granted during a fiscal year to any
  Participant, (iii) the Exercise Price or exercise price of any Stock
  Appreciation Right and/or (iv) any other affected term of such Awards.

	
 

	
 

	
 

	
 

	
(b)

	
Change in Control. Notwithstanding anything contained in this
  Plan to the contrary, unless otherwise provided in the applicable Award
  agreement at the time of grant, in the event of a Change in Control, the
  following shall occur as of the effective date of such Change in Control with
  respect to any and all Awards outstanding as of the effective date of such
  Change in Control: (i) any and all Stock Options and Stock Appreciation
  Rights granted hereunder shall vest in full and become immediately
  exercisable, and shall remain exercisable throughout their entire term; (ii)
  any restrictions imposed on Restricted Stock (including Performance-Based
  Awards in Restricted Stock) shall lapse; (iii) a pro rata payment shall be
  made of all other Performance-Based Awards equal in each case to the number
  of Shares covered by the Award multiplied by the performance-based accrual
  percentage applicable to such Award, and multiplied by a fraction the
  numerator of which is the number of months elapsed from the date of grant
  through the effective date of the Change in Control and the denominator of
  which is the number of months from the date of grant through the originally
  scheduled maturity date; and (iv) the maximum payout opportunities attainable
  under all Other Stock-Based Awards and Other Cash-Based Awards that are not
  Performance-Based Awards shall be deemed to have been fully earned for the
  entire performance period(s). Such Awards shall be paid in cash, or in the
  sole discretion of the Committee in Shares to Participants within thirty (30)
  days following the effective date of the Change in Control, with any such
  Shares valued at the Fair Market Value as of the effective date of the Change
  in Control.

	
 

	
 

	
 

	
 

	
(c)

	
Notwithstanding anything
  in Section 11(b) to the contrary, if an amount becomes payable with respect
  to an Award upon a Change in Control pursuant to Section 11(b), the amount is
  subject to Section 409A of the Code, and the Change in Control does not
  constitute a “change in the ownership or effective control” or a “change in
  the ownership of a substantial portion of the assets” of the Company within
  the meaning of Section 409A(a)(2)(A)(v) of the Code, then the amount shall
  not be paid upon the Change in Control, but shall instead be paid at the
  earliest to occur of: (i) the Participant’s “separation from service” with
  the Company (determined in accordance with Section 409A of the Code),
  provided, that if the Participant is a “specified employee” (within the
  meaning of Section 409A of the Code), the payment date shall be the date that
  is six months after the date of the Participant’s separation from service
  with the Company; (ii) the date payment otherwise would have been made in the
  absence of any provisions in this Plan to the contrary (provided such date is
  permissible under Section 409A of the Code); or (iii) the Participant’s death.

	
 

	
 

	
 

	
 

	
(d)

	
Definition of Change in Control. For purposes of this Section 11, “Change
  in Control” means: 

	
 

	
 

	
 

	
 

	

	

	
(i)

	
Any individual, entity or
  group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Act or any
  successor thereto (a “Person”) becomes the beneficial owner (within the
  meaning of Rule 13d-3 promulgated under the Act) of 30% or more of either (A)
  the then-outstanding
  Shares (the “Outstanding Company Common Stock”) or (B) 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 clause (c)(i), the following acquisitions shall
  not constitute a Change in 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 (iii) (A), (B) and (C)
  below; or

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
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 Boardshall
  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

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
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, (A)
  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 (1)
  the entity resulting from such Business Combination (the
  “Surviving Corporation”) or (2) 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, (B) 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 (C) 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

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

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

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Further Adjustment of Awards. Subject to the above provisions, the
  Committee shall have the discretion, exercisable at any time before a sale,
  merger, consolidation, reorganization, liquidation, dissolution or Change in
  Control transaction to take such further action as it determines to be
  necessary or advisable with respect to Awards. Such authorized action may
  include (but shall not be limited to) establishing, amending or waiving the
  type, terms, conditions or duration of, or restrictions on, Awards so as to
  provide for earlier, later, extended or additional time for exercise, lifting
  of restrictions and other modifications, and the Committee may take such
  actions with respect to all Participants, to certain categories of
  Participants or only to individual Participants. The Committee may take such
  action before or after granting Awards to which the action relates and before
  or after any public announcement with respect to such sale, merger,
  consolidation, reorganization, liquidation, dissolution or change in control
  that is the reason for such action. Notwithstanding the foregoing, the
  Committee shall not take any action to change the terms of an Award in any
  manner that would cause the Award to violate Section 409A of the Code.

	
 

	
 

	
12.

	
No Right
  to Employment or Awards

          The
granting of an Award under the Plan shall impose no obligation on the Company
or any Affiliate to continue the employment of a Participant and shall not
lessen or affect the Company’s or Affiliate’s right to terminate the employment
of such Participant. No Participant or other person shall have any claim to be
granted any Award, and there is no obligation for uniformity of treatment of
Participants, or holders or beneficiaries of Awards. 

The terms and conditions of
Awards and the Committee’s determinations and interpretations with respect
thereto need not be the same with respect to each Participant.

	
 

	
 

	
13.

	
Other
  Benefit and Compensation Programs

          Payments
and other benefits received by a Participant under an Award shall not be deemed
a part of a Participant’s regular, recurring compensation for purposes of any
termination, indemnity or severance pay laws and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company or an
Affiliate, unless expressly so provided by such other plan, contract or
arrangement or the Committee determines that an Award or portion of an Award
should be included to reflect competitive compensation practices or to
recognize that an Award has been made in lieu of a portion of competitive cash
compensation.

	
 

	
 

	
14.

	
Successors
  and Assigns

          The
Plan shall be binding on all successors and assigns of the Company and a
Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

	
 

	
 

	
15.

	
Nontransferability
  of Awards/Beneficiaries

          No
Award or interest in an Award may be sold, assigned, pledged (as collateral for
a loan or as security for the performance of an obligation or for any other
purpose) or transferred by the Participant or made subject to attachment or
similar proceedings otherwise than by will or by the applicable laws of descent
and distribution, except to the extent a Participant designates one or more
beneficiaries on a Company-approved form who may exercise the Award or receive
payment under the Award after the Participant’s death. During a Participant’s
lifetime, an Award may be exercised only by the Participant. Notwithstanding
the foregoing and to the extent permitted by Section 422 of the Code or
any successor thereto, the Committee, in its sole discretion, may permit a
Participant to assign or transfer an Award; provided, however, that any Award
so assigned or transferred shall be subject to all the terms and conditions of
the Plan and the agreement evidencing the Award.

          A
Participant may designate a beneficiary to succeed to the Participant’s Awards
under the Plan in the event of the Participant’s death by filing a beneficiary
form with the Company and, upon the death of the Participant, such beneficiary
shall succeed to the rights of the Participant to the extent permitted by law
and the terms of this Plan and the applicable agreement. In the absence of a
validly designated beneficiary who is living at the time of the Participant’s
death, the Participant’s executor or administrator of the Participant’s estate
shall succeed to the Awards, which shall be transferable by will or pursuant to
laws of descent and distribution.

	
 

	
 

	
16.

	
Amendments
  or Termination

          The
Board may amend, alter or discontinue the Plan, but no amendment, alteration or
discontinuation shall be made, (a) without the approval of the shareholders of
the Company, if such action would (except as is provided in Section 11 of the Plan), increase the
total number of Shares reserved for the purposes of the Plan or increase the
maximum number of Shares of Restricted Stock or Other Stock-Based Awards that
may be awarded hereunder, or the maximum number of Shares for which Awards may
be granted to any Participant, (b) without the consent of a Participant, if
such action would diminish any of the rights of the Participant under any Award
theretofore granted to such Participant under the Plan or (c) to Section 5(b),
relating to repricing of Options or Stock Appreciation Rights; provided, however, that the Committee may
amend the Plan in such manner as it deems necessary to permit the granting of
Awards meeting the requirements of the Code or other applicable laws.

	
 

	
 

	
17.

	
International
  Participants

          With
respect to Participants who reside or work outside the United States of
America, the Committee may, in its sole discretion, amend the terms of the Plan
or adopt such modifications, procedures or subplans with respect to such
Participants as are necessary or desirable to ensure the viability of the
benefits of the Plan, comply with applicable foreign laws or obtain more favorable
tax or other treatment for a Participant, the Company or an Affiliate;
provided, however, that no such changes shall apply to the Awards to
Participants who may be “covered employees” under Section 162(m) of the Code or
any successor thereto unless consistent with the provisions thereof.

	
 

	
 

	
18.

	
General

	
 

	
 

	
 

	

	
(a)

	
Issuance of Shares. Notwithstanding any other provision of
  the Plan, the Company shall have no obligation to issue or deliver any Shares
  under the Plan or make any other distribution of benefits under the Plan
  unless, in the opinion of the Company’s counsel, such issuance, delivery or
  distribution would comply with all applicable laws (including, without
  limitation, the requirements of the Securities Act of 1933, as amended, or
  any successor thereto (the “Securities Act”) or the laws of any state or
  foreign jurisdiction) and the applicable requirements of any securities
  exchange or similar entity.

	
 

	
 

	
 

	
 

	
 

	
The Company shall be under
  no obligation to any Participant to register for offering or resale or to
  qualify for exemption under the Securities Act, or to register or qualify
  under the laws of any state or foreign jurisdiction, any Shares, security or
  interest in a security paid or issued under, or created by, the Plan, or to
  continue in effect any such registrations or qualifications if made.

	
 

	
 

	
 

	
 

	
 

	
The Company may issue
  Shares with such legends and subject to such restrictions on transfer and
  stop-transfer instructions as counsel for the Company deems necessary or
  desirable for compliance by the Company with federal, state and foreign
  securities laws. The Company may also require such other action or agreement
  by the Participants as may from time to time be necessary to comply with
  applicable securities laws.

	
 

	
 

	
 

	
 

	
 

	
To the extent the Plan or
  any Award agreement provides for issuance of stock certificates to reflect
  the issuance of Shares, the issuance may be effected on a noncertificated
  basis, to the extent not prohibited by applicable law or the applicable rules
  of any stock exchange.

	
 

	
 

	
 

	

	
(b)

	
No Rights as a Shareholder. Unless otherwise provided by the
  Committee or in the agreement evidencing the Award or in any other written
  agreement between a Participant and the Company or an Affiliate, no Award
  shall entitle the Participant to any cash dividend, voting or other right of
  a shareholder unless and until the date of issuance under the Plan of the
  Shares that are the subject of such Award.

	
 

	
 

	
 

	

	
(c)

	
No Trust or Fund. The Plan is intended to constitute an
  “unfunded” plan. Nothing contained herein shall require the Company to
  segregate any monies, other property, or Shares, or to create any trusts, or
  to make any special deposits for any immediate or deferred amounts payable to
  any Participant, and no Participant shall have any rights that are greater
  than those of a general unsecured creditor of the Company.

	
 

	
 

	
 

	

	
(d)

	
Severability. In the event any provision of the Plan shall be held illegal or
  invalid for any reason, the illegality or invalidity shall not affect the
  remaining parts of the Plan, and the Plan shall be construed and enforced as
  if the illegal or invalid provision had not been included.

	
 

	
 

	
 

	
 

	
(e)

	
Choice of Law. The validity, construction, interpretation, administration and
  effect of the Plan, and rights relating to the Plan and to Awards granted
  under the Plan, shall be governed by the substantive laws, but not the choice
  of law rules, of the State of Minnesota.

	
 

	
 

	
19.

	
Effectiveness
  of the Plan

          The
Plan shall be effective as of the Effective Date.

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