Document:

Exhibit 10.2

Exhibit 10.2

REVOLVING CREDIT AGREEMENT

R. G. BARRY CORPORATION

AND

THE HUNTINGTON NATIONAL BANK

March 29, 2007

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION 1. COMMITMENTS
	 	 	1	 
	1.1 Basic Commitment Terms
	 	 	1	 
	1.2 Commitment Limitations
	 	 	1	 
	SECTION 2. REPRESENTATIONS AND WARRANTIES
	 	 	1	 
	2.1 Organization, Corporate Power, etc
	 	 	1	 
	2.2 Litigation
	 	 	2	 
	2.3 Financial Condition
	 	 	2	 
	2.4 Title to Properties
	 	 	2	 
	2.5 Liabilities
	 	 	2	 
	2.6 Investments
	 	 	2	 
	2.7 Taxes
	 	 	2	 
	2.8 ERISA
	 	 	3	 
	2.9 Use of Proceeds
	 	 	3	 
	2.10 Compliance with Law
	 	 	3	 
	2.11 Government Consent
	 	 	3	 
	2.12 Legal and Binding Obligation
	 	 	3	 
	2.13 Investment Company Act
	 	 	4	 
	SECTION 3. BORROWING PROVISION
	 	 	4	 
	3.1 Amount of Revolving Credit
	 	 	4	 
	3.2 Evidence of Loans Made Under Revolving Credit
	 	 	4	 
	3.3 Commitment Fees
	 	 	5	 
	3.4 Conversion of Loans
	 	 	5	 
	3.5 Prepayment
	 	 	5	 
	3.6 Termination or Reduction Options
	 	 	6	 
	3.7 Interest Payment Dates
	 	 	6	 
	3.8 Payment Method
	 	 	6	 
	3.9 No Setoff or Deduction
	 	 	6	 
	3.10 Payment on Non-Business Day; Payment Computations
	 	 	6	 
	3.11 Extension of Commitments
	 	 	7	 
	SECTION 4. CONDITIONS OF LENDING
	 	 	7	 
	4.1 Opinion of Counsel for Borrower
	 	 	7	 
	4.2 Supporting Documents
	 	 	7	 
	4.3 No Default
	 	 	8	 
	4.4 Delivery of Note
	 	 	8	 
	SECTION 5. PROVISIONS RELATING TO LOANS
	 	 	8	 
	5.1 Limitations of Requests and Elections
	 	 	8	 
	5.2 Indemnification
	 	 	9	 
	5.3 Survival of Obligations
	 	 	9	 
	SECTION 6. AFFIRMATIVE COVENANTS
	 	 	9	 
	6.1 Financial Statements
	 	 	9	 

 

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	6.2 Out of Pocket Expenses
	 	 	10	 
	6.3 Compliance with Statutes; Payment of Taxes
	 	 	10	 
	6.4 Insurance
	 	 	10	 
	6.5 Corporate Existence
	 	 	10	 
	6.6 ERISA
	 	 	10	 
	6.7 Books and Records
	 	 	11	 
	6.8 Inspection of Books and Records
	 	 	11	 
	6.9 Notification by Borrower
	 	 	11	 
	6.10 Notice of Claims
	 	 	11	 
	6.11 Clean out Period
	 	 	11	 
	6.12 Restriction on Consolidated Assets
	 	 	12	 
	SECTION 7. NEGATIVE COVENANTS
	 	 	12	 
	7.1 Additional Limitations on Debt
	 	 	12	 
	7.2 Maintenance of Consolidated Tangible Net Worth
	 	 	12	 
	7.3 Minimum Fixed Charge Coverage Ratio
	 	 	12	 
	7.4 Permitted Liens
	 	 	12	 
	7.5 Restrictions on Subsidiaries
	 	 	12	 
	7.5.1
	 	 	12	 
	7.5.2
	 	 	13	 
	7.5.3
	 	 	13	 
	7.6 Disposition of Assets
	 	 	13	 
	7.6.1
	 	 	13	 
	7.6.2
	 	 	13	 
	7.6.3
	 	 	13	 
	7.6.4
	 	 	13	 
	7.7 Sale-Leaseback
	 	 	13	 
	7.8 Limitations on draws
	 	 	14	 
	SECTION 8. FURTHER ASSURANCE
	 	 	14	 
	SECTION 9. TAXES AND STAMPS
	 	 	14	 
	SECTION 10. DEFAULT
	 	 	14	 
	10.1 Events of Default
	 	 	14	 
	10.1.1
	 	 	14	 
	10.1.2
	 	 	14	 
	10.1.3
	 	 	14	 
	10.1.4
	 	 	14	 
	10.1.5
	 	 	15	 
	10.1.6
	 	 	15	 
	10.1.7
	 	 	15	 
	10.1.8
	 	 	16	 
	10.1.9
	 	 	16	 
	10.1.10
	 	 	16	 
	10.2 Remedies
	 	 	16	 
	10.2.1
	 	 	16	 
	10.2.2
	 	 	17	 
	10.2.3
	 	 	17	 

 

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	SECTION 11. MISCELLANEOUS
	 	 	17	 
	11.1 Amendments, Etc
	 	 	17	 
	11.2 Notices
	 	 	18	 
	11.3 Conduct No Waiver; Remedies Cumulative
	 	 	18	 
	11.4 Reliance on and Survival of Various Provisions
	 	 	18	 
	11.5 Expenses
	 	 	18	 
	11.5.1
	 	 	18	 
	11.5.2
	 	 	18	 
	11.6 Successors and Assigns
	 	 	19	 
	11.7 Assignment to Federal Reserve Banks
	 	 	19	 
	11.8 Counterparts
	 	 	19	 
	11.9 Governing Law, Consent to Jurisdiction and Waiver of Immunity
	 	 	19	 
	11.10 Waiver of Jury Trial
	 	 	20	 
	11.11 Headings
	 	 	20	 
	11.12 Construction of Certain Provisions
	 	 	20	 
	11.13 Integration and Severability
	 	 	20	 
	11.14 Usury
	 	 	20	 
	SECTION 12. CERTAIN DEFINITIONS
	 	 	21	 
	12.1
	 	 	21	 
	12.2
	 	 	21	 
	12.3
	 	 	21	 
	12.4
	 	 	21	 
	12.5
	 	 	21	 
	12.6
	 	 	21	 
	12.7
	 	 	21	 
	12.8
	 	 	21	 
	12.9
	 	 	21	 
	12.10
	 	 	22	 
	12.11
	 	 	22	 
	12.12
	 	 	22	 
	12.13
	 	 	22	 
	12.14
	 	 	.22	 
	12.15
	 	 	22	 
	12.16
	 	 	23	 
	12.17
	 	 	23	 
	12.18
	 	 	23	 
	12.19
	 	 	24	 
	12.20
	 	 	24	 
	12.21
	 	 	24	 
	12.22
	 	 	24	 
	12.23
	 	 	24	 
	12.24
	 	 	25	 
	12.25
	 	 	25	 
	12.26
	 	 	25	 
	12.27
	 	 	25	 
	12.28
	 	 	25	 
	12.29
	 	 	25	 
	12.30
	 	 	25	 
	12.31
	 	 	26	 
	12.32
	 	 	26	 

 

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REVOLVING CREDIT AGREEMENT

THIS AGREEMENT, is made and entered into to be effective on March 29, 2007, by and among R. G.
BARRY CORPORATION, an Ohio corporation (hereinafter called the “Borrower”), and THE HUNTINGTON
NATIONAL BANK, a national banking association of Columbus, Ohio (hereinafter called the “Bank”);

The Borrower and the Bank hereby agree as follows:

SECTION 1. COMMITMENTS.

1.1 Basic Commitment Terms. The Borrower has applied to the Bank for revolving credit loans up to an aggregate
principal amount of $20,000,000.00, the proceeds of which are to be used by the Borrower for
general corporate purposes, including, without limitation, seasonal financing of inventory and
accounts receivable. The Bank is willing to make such loans to the Borrower upon the terms and
subject to the conditions hereinafter set forth up to a maximum aggregate principal amount not in
excess of $20,000,000.00 and otherwise in accordance with the terms hereof (said amount being
hereinafter called the “Commitment”).

1.2 Commitment Limitations. Notwithstanding the foregoing, during the following periods in each year occurring during
the term of this Agreement the aggregate Commitment of the Bank shall be in an amount equal to the
lesser of the following amounts or the amount to which the Commitment has been reduced pursuant to
Section 3.6 hereof:

	 	 	 	 	 
	PERIOD	 	COMMITMENT	 
	 
	 	 	 	 
	From 07/01/07 through 12/31/07
	 	$	20,000,000	 
	From 01/01/08 through 06/30/08
	 	$	5,000,000	 
	From 07/01/08 through 12/31/08
	 	$	16,000,000	 
	From 01/01/09 through 06/30/09
	 	$	5,000,000	 
	From 07/01/09 through 12/31/09
	 	$	12,000,000	 
	From 01/01/10 through 03/31/10
	 	$	5,000,000	 

SECTION 2. REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Bank:

2.1 Organization, Corporate Power, etc. The Borrower and each Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it was incorporated, and each has the corporate power and authority to own
its property and to carry on its business as now being conducted and each is duly qualified (or is
in the process of becoming qualified) and where qualified, is in
good standing, to do business in
every jurisdiction where such qualification is necessary, except where failure to qualify would not
have a material adverse effect upon the financial condition, business or operations of the Borrower
and its Subsidiaries, taken as a whole. The Borrower has the corporate power to execute, deliver
and perform this Agreement, to borrow hereunder and to execute and deliver the Note herein referred
to and to do so will not violate any laws, rules, regulations, orders or decrees, its Articles of
Incorporation or Code of Regulations or any other agreement or instrument to which it is a party.

 

1

 

2.2 Litigation. Except as set forth in Exhibit “B”, there is no litigation or
proceeding pending against the Borrower, or any Subsidiary of the Borrower, nor to the knowledge of
the officers of the Borrower or its Subsidiaries threatened, which, if decided adversely to the
Borrower or any such Subsidiary, would have a material adverse effect upon the financial condition,
business or operations of the Borrower and its Subsidiaries, taken as a whole.

2.3 Financial Condition. The audited financial statements of the Borrower for the
fiscal period ended July 1, 2006 certified by KPMG Peat Marwick, independent certified public
accountants, and the interim unaudited financial statements for the period ended December 31, 2006,
fairly reflect the financial condition of the Borrower and each Subsidiary and the results of their
operations as of the dates and for the periods stated, and no material adverse change in the
financial condition, business or operations of the Borrower and its Subsidiaries, taken as a whole,
has occurred since the dates of such financial statements and interim statements. Such financial
statements are consolidated statements and have been prepared in accordance with GAAP.

2.4 Title to Properties. The Borrower and each Subsidiary has good and marketable
title to its property and assets. Such property and assets of the Borrower and its Subsidiaries
are not subject to a mortgage or lien except for current property taxes not yet due.

2.5 Liabilities. The Borrower and its Subsidiaries have no liabilities, direct or
contingent, except (i) those disclosed in the audited financial statements and interim statements
referred to in Section 2.3 above, and (ii) those incurred in the ordinary course of business since
the dates of such reports and interim statements
referred to in Section 2.3 above, having in the aggregate no materially adverse effect on the
financial condition, business or operations of the Borrower and its Subsidiaries, taken as a whole.

2.6 Investments. The Borrower and its Subsidiaries have made no material investments
in, advances to or Guaranties of the obligations of any corporation, individual or other entity
except those disclosed in either or both of the statements referred to in Section 2.3 above.

2.7 Taxes. The Borrower and its Subsidiaries have filed all required federal, state
and local tax returns and paid all required federal, state and local taxes as they have become due.
Federal income taxes have been audited through December 28, 2002, and no material claims have been
assessed and are unpaid with respect to such taxes except as shown in the audited financial
statements or interim financial statements referred to in Section 2.3 above.

 

2

 

2.8 ERISA. The Borrower and its Subsidiaries (i) have made prompt payment of all
contributions required to meet the minimum funding standards set forth in Sections 302 and 305 of
the Employee Retirement Income Security Act of 1974 as amended from time to time (“ERISA”) with
respect to any employee benefit plan (“plan”), and (ii) have not:

	 	(a)	 	engaged in any “Prohibited Transaction”, as
that term is defined in Section 406 of ERISA for which there is no
exemption under Section 408 of ERISA, or

	 
	 	(b)	 	terminated any such plan in a manner which
would result in the imposition of a lien on the property of the
Borrower pursuant to Section 4068 of ERISA.

2.9 Use of Proceeds. The proceeds of all borrowings hereunder will be used for
general corporate purposes, but not directly or indirectly to purchase or to carry any margin stock
as defined by Regulation U of the Board of Governors of the Federal Reserve System, and the
Borrower is not in the business of extending credit to purchase or carry margin stock.

2.10 Compliance with Law. The Borrower and its Subsidiaries are not in violation of,
whether foreign or domestic, any laws, ordinances, governmental rules, regulations, judgments or
agreements to which they are subject and have not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of their properties or
to the conduct of their businesses, which
violation or failure to obtain might materially and adversely affect the business, prospects,
properties or condition (financial or otherwise) of the Borrower.

2.11 Government Consent. Neither the nature of the Borrower or its Subsidiaries, or
of their businesses or properties, nor any relationship between the Borrower or its Subsidiaries
and any other entity or person, nor any circumstance in connection with the execution of this
Agreement, is such as to require a consent, approval or authorization of, or filing, registration
or qualification with, any governmental authority on the part of the Borrower or its Subsidiaries
as a condition to the execution, delivery, performance, validity or enforceability of this
Agreement (including as to each borrowing hereunder), the Note and documents contemplated herein.

2.12 Legal and Binding Obligation. (i) The Board of Directors of the Borrower has
duly authorized the execution, delivery and performance of this Agreement and the Note and this
Agreement and the Note will constitute the valid and binding obligations of the Borrower
enforceable in accordance with their terms; and (ii) the execution of this Agreement, the Note and
related documents and compliance by the Borrower with all the provisions of this Agreement are
within the corporate powers of the Borrower, are legal and will not conflict with, result in any
breach of any of the provisions of, constitute a default under, or result in the creation of any
lien or encumbrance upon any property of the Borrower under the provisions of, any agreement,
charter instrument, bylaw or other instrument to which the Borrower is a party or by which it is
bound.

 

3

 

2.13 Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an “investment company”, within the meaning of
the Investment Company Act of 1940, as amended.

SECTION 3. BORROWING PROVISION.

3.1 Amount of Revolving Credit. Relying on the foregoing representations and
warranties and subject to the agreements and covenants hereinafter contained, the Bank agrees to
make Loans to the Borrower, from time to time from the date hereof to the Termination Date, at such
times and in such amounts as the Borrower shall request, in the aggregate not in excess of the
Bank’s Commitment. The Borrower shall give the Bank written or telephonic notice by 11:00 a.m.,
the Bank’s local time, three Business Days prior to the date of intended borrowing with respect to
any Loan hereunder, which notice shall specify the proposed date of borrowing, the amount thereof,
and the Interest Period selected. The Bank shall notify the Borrower of the relevant LIBO Rate at
approximately 11:00 a.m., New York time, two Business Days
prior to the date of intended borrowing. The Loans shall be evidenced by a Revolving Credit
Note (as defined in Section 3.2 hereof).

3.2 Evidence of Loans Made Under Revolving Credit. All Loans made by the Bank
pursuant to the Bank’s Commitment shall be evidenced by a promissory note, substantially in the
form attached hereto as Exhibit “A” (hereinafter collectively called the “Revolving Credit Note”),
payable to the order of the Bank, duly executed on behalf of the Borrower, dated the date of this
Agreement. The Bank is hereby authorized by the Borrower to note on the schedule attached to any
Revolving Credit Note held by the Bank the date, amount and type of each Loan made to the Borrower,
the duration of the related Interest Period if applicable, the amount of each payment or prepayment
of principal thereon, and the other information provided for on such schedule, which schedule shall
constitute prima facie evidence of the information so noted; provided, that failure of the Bank to
make any such notation shall not relieve the Borrower of its obligation to repay the outstanding
principal amount of any Loan or Loans made to it, all accrued interest thereon and all other
amounts payable in accordance with the terms of the Revolving Credit Note or this Agreement.
Interest on the Loans evidenced by the Revolving Credit Note shall be payable, until an Event of
Default, at the Variable Rate and on each Interest Payment Date, as hereinafter defined. After an
Event of Default, interest on the Loans evidenced by the Revolving Credit Note shall be payable at
three (3) percent in excess of the Prime Commercial Rate and on the first day of each month, in
arrears. The terms and conditions of this Agreement are incorporated in the Revolving Credit Note
by reference as though the same were written therein.

 

4

 

3.3 Commitment Fees. The Borrower agrees to pay to the Bank on or prior to the
execution of this Agreement a commitment fee in the amount of $5,000.00. The Borrower further
agrees to pay an annual facility fee of $2,500.00 on the last day of each March commencing March
31, 2008. The Borrower further agrees to pay the Bank an annual unused fee (hereinafter called the
“Unused Line Fee”) of one quarter of one percent (1/4 of 1%) per annum (computed on the basis of a
360-day year for the actual number of days elapsed in each computation period) of the average daily
unused amount of the Commitment of the Bank available to Borrower pursuant to Section 1.1 above
taking into consideration the seasonal adjustment. The Unused Line Fee shall commence to accrue on
the date hereof through and including the Termination Date, and shall be paid quarterly in arrears
on the last day of March, June, September and December in each year commencing June 30, 2007 and on
the termination of the Commitment.

3.4 Conversion of Loans. The Borrower may elect to continue a Loan at the same
Interest Period or convert a Loan of one Interest Period to another Interest
Period by giving telephonic notice thereof to the Bank not later than 11:00 a.m., the Bank’s
local time, three Business Days prior to the day on which the continuation of the Loan or
conversion to the Loan is to be effective, and not later than 11:00 a.m., the Bank’s local time,
three Business Days prior to the proposed day of conversion of a Loan of one Interest Period to a
Loan of another Interest Period, provided, that an outstanding Loan may only be converted on the
last day of the then current Interest Period with respect to such Loan, and provided, further, that
upon the continuation or conversion of a Loan such notice shall also specify the Interest Period
(if applicable) to be applicable thereto upon such continuation or conversion. If the Borrower
shall fail to timely provide notice with respect to any outstanding Loan, the Borrower shall be
deemed to have elected to convert such Loan to a daily Interest Period on the last day of the
Interest Period with respect to such Loan. Telephonic notice shall in each instance be followed
within a reasonable period of time by written notice substantially in the form of Exhibit “C”
hereto. In the event of any conflict between telephonic and written notice, the telephonic notice
shall control to the extent that such notice has been relied upon by the Bank in making the
applicable Loan.

3.5 Prepayment. The Borrower may at any time, upon three (3) Business Days prior
written notice to the Bank, repay any or all of the Loans without penalty (other than LIBO Rate
breakage costs and expenses, except that Loans may only be paid at the end of the applicable
Interest Period and the Borrower may not prepay any portion of any Loan as to which an election for
a continuation of or a conversion is pending. All partial prepayments under this Section 3.5 shall
be accompanied by the payment of all accrued interest. The Borrower shall make such prepayments as
are necessary to keep the amounts outstanding to the Banks hereunder within the Commitment
limitations identified in Section 1.2 hereof.

 

5

 

3.6 Termination or Reduction Options. The Borrower shall have the right each year
during the month of June, upon three (3) Business Days prior written notice to the Bank, (i) to
terminate or reduce permanently the aggregate principal amount of the Commitment of the Bank to
make Loans hereunder by written notice to the Bank; provided that any permanent reduction of the
Commitment of the Bank to make Loans must be accompanied by the repayment of any outstanding
principal amount in excess of the amount of the Bank’s Commitment, as thereby reduced together with
interest accrued thereon; and provided further that no such termination or reduction which would
require prepayment of any Loan shall be permitted except at the end of the applicable Interest
Period.

3.7 Interest Payment Dates. “Interest Payment Date” shall mean the first day of each
calendar month.

3.8 Payment Method. All payments to be made by the Borrower hereunder will be made in
Dollars and in immediately available funds to the Bank at its address set forth in Section 11.2
hereof not later than 3:00 p.m. the Bank’s local time on the date on which such payment shall
become due. Payments received after 3:00 p.m. the Bank’s local time shall be deemed to be payments
made prior to 3:00 p.m. such Bank’s local time on the next succeeding Business Day. At the time of
making each such payment, the Borrower shall specify to the Bank that obligation of the Borrower to
which such payment is to be applied, or, in the event that the Borrower fails to so specify or if
an Event of Default shall have occurred and be continuing, such Bank may apply such payments to
indebtedness due hereunder as it may determine in its sole discretion.

3.9 No Setoff or Deduction. All payments of principal and interest on the Loans and
other amounts payable by the Borrower hereunder shall be made by the Borrower without setoff or
counterclaim, and free and clear of, and without deduction or withholding for, or on account of,
any present or future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority.

3.10 Payment on Non-Business Day; Payment Computations. Except as otherwise provided in this Agreement to the contrary, whenever any installment of
principal of, or interest on, any Loan outstanding hereunder or any other amount due hereunder,
becomes due and payable on a day which is not a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day and, in the case of any installment of principal,
interest shall be payable thereon at the rate per annum determined in accordance with this
Agreement during such extension. Computations of interest and other amounts due under this
Agreement shall be made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period.

 

6

 

3.11 Extension of Commitments. The Borrower may request, once each year during the
month of September, an extension of the Termination Date and the Commitment for periods of one year
each by making such request following delivery of the Borrower’s annual financial statement and
current year’s operating plan. Upon receipt of any request for extension, the Bank shall have 60
days to approve or reject such request. Any Loans outstanding hereunder not extended shall be paid
when due. The decision as to whether to grant such an extension shall be in the absolute
discretion of the Bank. The Borrower shall request any extension not later than 60 days prior to
the Termination Date of any existing Commitment.

SECTION 4. CONDITIONS OF LENDING.

The obligations of the Bank hereunder are subject to the following conditions precedent:

4.1 Opinion of Counsel for Borrower. On or before the date of first borrowing
hereunder, the Bank shall have received the favorable written opinion of counsel for the Borrower
acceptable to the Bank, addressed to the Bank, and satisfactory to counsel for the Bank (i)
confirming the accuracy of the representations and warranties set forth in Section 2.1 hereof
(except such confirmation may exclude any opinion as to the Borrower’s qualification to do business
in states other than Ohio), and to the best knowledge of such counsel, confirming the accuracy of
the representations and warranties with respect to the Borrower set forth in Sections 2.2, 2.11 and
2.13 hereof and those portions of Section 2.12 hereof not described in Section 4.1 (ii) hereof; and
(ii) stating that (1) this Agreement has been duly executed and delivered by the Borrower and
constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with
its terms and (2) the Note when duly executed and delivered by the Borrower to the Bank in
accordance with the provisions hereof, will constitute the legal, valid, and binding obligations of
the Borrower enforceable in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency and similar laws and to moratorium laws from time
to time in effect and to such other exceptions as the Bank may deem acceptable).

4.2 Supporting Documents. The Bank shall have received on or before the date of the
first borrowing hereunder (i) a copy of the resolution of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of this Agreement, the borrowings contemplated
hereunder and the execution and delivery of the Note provided for herein, (ii) a copy certified by
the Secretary of State of Ohio of the Articles of Incorporation of the Borrower; (iii) a copy of
the Bylaws or Code of Regulations of the Borrower, certified as true and correct by its secretary
or assistant secretary, (iv) a certificate of the secretary or assistant secretary of the Borrower
identifying the officers authorized to sign this Agreement and the Note provided for herein and to
borrow hereunder, together with samples of each of their signatures, (v) a certificate of good
standing as to the Borrower from the Secretary of State of Ohio, and (vi) such additional documents
as counsel for the Bank may reasonably request.

 

7

 

4.3 No Default. Each borrowing hereunder shall constitute a certification by the
Borrower that (i) the Borrower and each Subsidiary are in compliance with all of the terms and
provisions set forth herein on their part to be observed and performed, (ii) no Default or Event of
Default has occurred or is continuing at the time of such borrowing and (iii) each of the
representations and
warranties made in Section 2 hereof are true and correct with the same effect as though such
representations and warranties had been made at the time of such borrowing, except that the
representations and warranties made in Sections 2.3 and 2.5 hereof shall be deemed to refer to the
last audited financial statements or interim financial statement delivered to the Banks pursuant to
Section 6.1 hereof and further excepting that the occurrence of any material adverse change or
effect shall be determined by reference to the Borrower’s financial condition, business and
operations on the date of this Agreement.

4.4 Delivery of Note. The Borrower shall have executed and delivered the Note to the
Bank.

SECTION 5. PROVISIONS RELATING TO LOANS.

5.1 Limitations of Requests and Elections. In the event that on any date on which the
Borrower requests an advance hereunder the Bank reasonably determines that by reason of (1) any
change arising after the date of the Note affecting the interbank eurocurrency market or affecting
the position of the Bank with respect to such market, adequate and fair means do not exist for
ascertaining the applicable interest rates by reference to which the LIBO Rate then being
determined is to be determined, (2) any change arising after the date of the Note in any applicable
law or governmental rule, regulation or order (or any interpretation thereof, including the
introduction of any new law or governmental rule, regulation or order), or (3) any other
circumstance affecting the Bank or the interbank market (such as, but not limited to, official
reserve requirements required by Regulation D of the Board of Governors of the Federal Reserve
System), the LIBO Rate plus the applicable spread shall not represent the effective pricing to the
Bank of making advances based upon such rate, then, and in any such event, the ability of the
Borrower to request advances based upon the LIBO Rate shall be suspended until the Bank shall
notify the Borrower that the circumstances causing such suspension no longer exist and interest
shall accrue on the unpaid balance of the Principal Sum at a variable rate of interest per annum,
which shall change in the manner set forth below, equal to 1.5 percentage points (which shall be
0.00 percentage points, unless completed) below the Prime Commercial Rate (as hereinafter defined).

In the event that on any date the Bank shall have reasonably determined that the making or
continuation of advances based upon the LIBO Rate has become unlawful by compliance by the Bank in
good faith with any law, governmental rule, regulation or order, then, and in any such event, the
Bank shall promptly give notice thereof to the Borrower. In such case, the ability of the Borrower
to request an advance hereunder based upon the LIBO Rate shall be terminated and thereafter
interest shall accrue on the unpaid balance of the Principal Sum at a variable rate of interest per
annum, which
shall change in the manner set forth below, equal to 1.5 percentage points (which shall be
0.00 percentage points, unless completed) below the Prime Commercial Rate.

 

8

 

5.2 Indemnification. If, due to (1) the introduction of or any change in or in the
interpretation of any law or regulation, (2) the compliance with any guideline or request from any
central bank or other public authority (whether or not having the force of law), or (3) the failure
of the Borrower to repay any advance when required by the terms of the Note, there shall be any
loss or increase in the cost to the Bank of agreeing to make or making, funding or maintaining any
advance hereunder based upon the LIBO Rate, then the Borrower agrees that the Borrower shall, from
time to time, upon demand by the Bank, pay to the Bank additional amounts determined in good faith
by the Bank to be sufficient to compensate the Bank for such loss or increased cost. A certificate
as to the amount of such loss or increase cost setting forth in reasonable detail the basis for
such determination and submitted to the Borrower by the Bank, shall be conclusive evidence, absent
manifest error, of the correctness of such amount. Such amount shall be due and payable by the
Borrower to the Bank within ten (10) days after such certificate is received by the Borrower.

5.3 Survival of Obligations. The provisions of this Section 5 shall survive the
termination of the Commitment and the payment in full of the Note outstanding pursuant to this
Agreement.

SECTION 6. AFFIRMATIVE COVENANTS.

For as long as the Bank is obligated to lend hereunder and until payment in full of the Note
and interest thereon, the Borrower covenants that it will and will cause each Subsidiary, except in
the case of Sections 6.1, 6.2, and 6.9 hereof and unless the Bank shall otherwise consent in
writing, to:

6.1 Financial Statements. Furnish the Bank, within ninety (90) days of each fiscal
year end, a copy of the report of the certified audit of the Borrower and its Subsidiaries for each
fiscal year prepared by a certified public accountant of recognized standing and a balance sheet
and related statements of income and retained earnings and cash flow of the Borrower and of the
Subsidiaries as of the end of and for each quarter, within forty-five (45) days of each fiscal
quarter end, certified as to fairness of presentation by an officer of the Borrower and/or the
respective Subsidiaries. All financial statements will be consolidated financial statements, will
be prepared in accordance with GAAP, and will be in a form satisfactory to the Bank. The annual
audits and quarterly statements shall be in the format required for filing with the Securities and
Exchange Commission. The engagement of the certified public accountant will require the reporting
of any and all Defaults and Events of Default as of the last day of the fiscal year of the Borrower
which have come to the attention of such
accountant or that no Defaults or Events of Default have come to its attention as of such
date. Quarterly financial statements will be accompanied by an officer’s certificate, in the form
attached hereto as Exhibit D, indicating whether a Default or Event of Default has occurred and, if
so, stating the facts with respect thereto and whether the same

 

9

 

has been cured prior to the date of
such certificate. In the event that any  certificate furnished under this paragraph shall state
that a Default or Event of Default has occurred and is continuing, such certificate shall be
accompanied by a statement executed by the chief financial officer of the Borrower as to the action
taken and proposed to be taken by the Borrower to cure such Default or Event of Default.

The Borrower will make available online to the Bank promptly after sending or filing thereof,
copies of all financial statements and reports which it sends to its stockholders and copies of all
regular and periodic reports and registration statements which it files with the Securities and
Exchange Commission. The Borrower will furnish the Bank within a reasonable period of time such
additional information and financial statements as the Bank may from time to time request.

6.2 Out of Pocket Expenses. Pay all out-of-pocket expenses of the Bank arising in
connection with the transactions contemplated by this Agreement, whether or not consummated,
including the reasonable fees and expenses of the Bank’s counsel for services rendered in
connection with the transaction contemplated hereby including the preparation of this Agreement and
related documents, and any amendments or modifications thereto.

6.3 Compliance with Statutes; Payment of Taxes. Comply with all valid and applicable
statutes and governmental regulations and pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations, which, if unpaid
might become a lien against the property of the Borrower or any Subsidiary, except liabilities
being contested in good faith by appropriate proceedings and against which the Borrower or
applicable Subsidiary has set up adequate reserves in conformity with GAAP.

6.4 Insurance. Maintain insurance in such amounts as is customarily maintained by
companies of the same relative size in the same or similar businesses.

6.5 Corporate Existence. Maintain its corporate existence in good standing and comply
with all valid and applicable statutes, rules and regulations, and maintain its properties in good
operating condition, except a Subsidiary may be merged into the Borrower or consolidated with
another Subsidiary.

6.6 ERISA. The Borrower and its Subsidiaries shall with respect to any employee
benefit plan under ERISA in effect now or in the future:

	 	(a)	 	at all times make prompt payment of
contributions required to meet the minimum funding standards set forth
in Sections 302 through 305 of ERISA with respect to such plan,

	 
	 	(b)	 	if requested by the Bank, promptly, after the
filing thereof, furnish to the Bank copies of each annual report
required to be filed pursuant to Section 103 of ERISA in connection
with such plan for the plan year most recently ended, including any
certified financial statements or actuarial statements required
pursuant to said Section 103,

 

10

 

	 	(c)	 	notify the Bank immediately of any fact,
including, but not limited to, any “Reportable Event,” as that term is
defined in Section 4043 of ERISA, arising in connection with such plan
which might constitute grounds for termination thereof by the Pension
Benefit Guaranty Corporation, or any successor thereto, or for the
appointment by the appropriate United States District Court of a
trustee to administer such plan, and

	 
	 	(d)	 	notify the Bank of any “Prohibited Transaction”
as that term is defined in Section 406 of ERISA for which there is no
exemption under Section 408 of ERISA.

6.7 Books and Records. Maintain books and records in which full and correct entries
will be made of all its business transactions.

6.8 Inspection of Books and Records. Permit the Bank upon its reasonable request to
inspect the books and records of the Borrower, to make copies and abstracts thereof and to discuss
the affairs of the Borrower with the Borrower’s officers.

6.9 Notification by Borrower. Give the Bank prompt written notice of:

	 	(a)	 	the occurrence of any Default or Event of
Default or any event or condition which, with notice or lapse of time,
or both, would constitute an Event of Default, and

	 	(b)	 	any development in the business or affairs of
the Borrower or any of its Subsidiaries which has resulted in or which
is likely in the reasonable judgment of the Borrower to result in a
material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Borrower or
any of its Subsidiaries.

6.10 Notice of Claims. Give the Bank prompt written notice of any claim in excess of
$1,000,000, or in which no monetary amount is specified, that is asserted against the Borrower or
any of its Subsidiaries in any litigation to which the Borrower or such Subsidiary is a party.

6.11 Clean out Period. Reduce the amount outstanding under the Note to zero, for a
period of thirty (30) consecutive days, commencing February 1 of each calendar year.

 

11

 

6.12 Restriction on Consolidated Assets. Except upon the prior written consent of the
Bank, maintain its consolidated tangible assets, excluding inter-company assets which are
eliminated when consolidated in accordance with GAAP, under the ownership of and in the name of the
Borrower.

SECTION 7. NEGATIVE COVENANTS.

For as long as the Bank is obligated to lend hereunder and until payment in full of the Note
and interest thereon, the Borrower covenants that it will not, without the prior written consent of
the Bank:

7.1 Additional Limitations on Debt. Incur any Current Debt other than (a) Current
Debt in existence on the date hereof, and (b) Current Debt to the Bank in connection with any
Acquisition Loan.

7.2 Maintenance of Consolidated Tangible Net Worth. Permit Consolidated Tangible Net
Worth to be less than the sum of $29,000,000 plus 50% of Consolidated Net Income computed on a
cumulative basis for the period from and after June 30, 2007 to and including the end of the fiscal
year for which the determination is being made, provided that if Consolidated Net Income for any
fiscal year in said period is a deficit figure, the amount added to determine the required amount
of Consolidated Tangible Net Worth for said fiscal year shall be zero.

7.3 Minimum Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of
not less than 1.25:1.0. “Fixed Charge Coverage Ratio” shall mean EBITDA divided by the sum of
Principal Payments plus cash Interest Expense plus non-financed Capital Expenditures plus cash
Taxes paid plus Dividends and Distributions. To be calculated quarterly on a trailing twelve (12)
months basis. Capitalized terms in this Section 7.3 shall have the meaning given to such terms
under GAAP.

7.4 Permitted Liens. Except for (a) Liens set forth on Exhibit E, (b) Liens to The
CIT Group/Commercial Services, Inc. in connection with Borrower’s previous financing that are in
the process of being released, and (c) Capitalized Lease Obligations, purchase money Liens and
other Liens securing seller financing, permit, and will not permit any of its Subsidiaries to,
incur, create, assume or permit to exist any Lien on any property, whether owned on March 1, 2007
or thereafter acquired.

7.5 Restrictions on Subsidiaries. Permit any Subsidiary to:

7.5.1. issue or dispose of any shares of its capital stock to any Person other
than the Borrower or a Subsidiary, except to the extent, if any, required to qualify
directors under any applicable law or required to be issued to other stockholders of
such Subsidiary by virtue of their exercise of preemptive rights or as their pro
rata share of any stock dividend; or

 

12

 

7.5.2. except for the sale of all or substantially all of the capital stock of
Fargeot et Compagnie, S. A. (“Fargeot”), sell, assign, transfer, dispose of or in any way part with
control of any share of capital stock of any other Subsidiary owned by it, or any
Debt owing to it from another Subsidiary, except in either case to the Borrower or a
Subsidiary; or

7.5.3. except for Current Debt or Funded Debt of Subsidiaries (a) owing to
Borrower or another Subsidiary, or (b) owing at the time a business entity becomes a
Subsidiary of Borrower, incur any Current Debt or Funded Debt.

7.6 Disposition of Assets. Permit, and will not permit any Subsidiary to agree to the
sale, lease, transfer or other dispostion of all or any substantial part of its properties and
assets, or consolidate with or merge into any other Person, or permit another Person to merge into
it, except that:

7.6.1. any Subsidiary may permit any corporation to merge into such Subsidiary,
or may consolidate with or merge into, or sell, lease or otherwise dispose of its
assets as an entirety or substantially as an entirety to the Borrower, a Subsidiary
or any corporation which thereupon becomes a Subsidiary, provided that immediately
after the consummation of any such transaction and after giving effect thereto no
Default or Event of Default shall exist; and

7.6.2. the Borrower may permit any corporation to merge into it or may
consolidate with any solvent corporation organized in the
United States of America, provided that immediately after the consummation of
any such transaction and after giving effect thereto, (A) the Borrower is the
surviving corporation, (B) the Borrower is in compliance with the provisions of
Section 7.2 hereof, and (C) no Default or Event of Default shall exist;

7.6.3. the Borrower or any Subsidiary may sell or otherwise dispose of any of
its assets in the ordinary course of its business; and

7.6.4. Borrower may cause the sale or other disposition of all or substantially
all of the assets of Fargeot.

7.7 Sale-Leaseback. Permit, and will not permit any Subsidiary to agree to, the sale
or transfer any property to any Person and thereupon lease, as lessee, the same or similar property
unless (A) such lease is a Capitalized Lease and the Borrower is the lessee thereunder, or (B) such
lease is an operating lease and the Borrower is the lessee thereunder.

 

13

 

7.8 Limitations on draws. Permit Loans under the Commitment to exceed eighty percent
(80%) of the Borrower Eligible Accounts Receivable, plus fifty percent (50) of Eligible Inventory
at any time.

SECTION 8. FURTHER ASSURANCE.

The Borrower shall furnish at the reasonable request of the Bank opinions of legal counsel and
certificates of its officers satisfactory to the Bank regarding matters incident to this Agreement.
The Borrower agrees to provide such other documents and information and to take such further
action as the Bank may reasonably require in connection with the execution and delivery of this
Agreement and the Borrower’s performance hereunder.

SECTION 9. TAXES AND STAMPS.

If in connection with any borrowing hereunder any documentary tax should be assessed or the
affixing of any stamps be required by state or federal governments, the Borrower will pay the tax
and the cost of the stamps.

SECTION 10. DEFAULT.

10.1 Events of Default. The occurrence of any one or more of the following events
will constitute an Event of Default, unless waived by the Bank pursuant to Section 10.2 hereof:

10.1.1. Default shall be made in the due and punctual payment of any principal
of the Note when and as the same shall become due and payable, whether at maturity
or by acceleration or otherwise;

10.1.2. Default shall be made in the due and punctual payment of any
installment of interest on the Note or Commitment Fees or other amounts hereunder,
when and as such payments shall become due and payable, and such default shall have
continued for a period of 10 days;

10.1.3. Default shall be made in the performance or observance of any
covenants, agreements or conditions contained in this Agreement or the Note, other
than as set forth in Sections 10.1.1 and 10.1.2 hereof, and such default shall have continued for a period of
30 days after any officer of the Borrower becomes aware thereof;

10.1.4. Default shall occur with respect to any indebtedness of the Borrower or
any Subsidiary (other than the Note) for borrowed money, including, but not limited
to, failure to pay when due any payments required pursuant to such indebtedness, or
any other default shall occur with respect to such indebtedness, and such other
default shall continue for more than any applicable grace period and the effect of
such other default is to cause such indebtedness to remain unpaid or to cause or
permit the obligee to cause such indebtedness to become immediately due;

 

14

 

10.1.5. The Borrower or any of its Subsidiaries shall (A) admit in writing its
inability to pay its debts or be unable to pay its debts generally as they become
due, (B) file a petition in bankruptcy or a petition to take advantage of any
insolvency act, (C) make an assignment for the benefit of its creditors, (D) consent
to the appointment of a receiver of itself or the whole or any substantial part of
its property, (E) file a petition or answer seeking reorganization, arrangement or
winding-up under the Federal bankruptcy laws or any other applicable law or statute
of the United States of America or any State thereof or any other country or
jurisdiction, (F) have a petition in bankruptcy filed against it and such petition
shall remain undismissed for a period of 60 days, or (G) file any answer admitting
or not contesting the material allegations of a petition filed against the Borrower
or any of its Subsidiaries in any such case or proceeding, or the Borrower or any of
its Subsidiaries seeks, approves, consents to or acquiesces in any such case or
proceeding or in the appointment of any custodian, trustee, receiver, liquidator or
fiscal agent
of the Borrower or any of its Subsidiaries for all or a substantial part of the
properties or assets of the Borrower or any of its Subsidiaries;

10.1.6. A court of competent jurisdiction shall enter an order, judgment or
decree appointing, without the consent of the Borrower or the Subsidiary involved, a
receiver or custodian of the Borrower or any of its Subsidiaries or of the whole or
any substantial part of their properties, or approving a petition filed against the
Borrower and/or any Subsidiary seeking reorganization, arrangement or winding-up of
the Borrower and/or such Subsidiary under the Federal bankruptcy laws or any other
applicable law or statute of the United States of America or any State thereof or
any other country or jurisdiction, and such order, judgment or decree shall not be
vacated or set aside or stayed within 15 days from the date of assumption of such
custody or control;

10.1.7. Under the provisions of any other law for the relief or aid of debtors,
any court of competent jurisdiction shall assume custody or control of the Borrower
or any of its Subsidiaries or of the whole or any substantial part of their
respective properties and such custody or control shall not be terminated or stayed
within 60 days from the date of assumption of such custody or control;

 

15

 

10.1.8. Final judgment or judgments for the payment of money in the aggregate
in excess of $1,000,000 shall be rendered by a court of record against the Borrower
and/or any of its Subsidiaries, either individually or some combination thereof, and
the Borrower or such Subsidiary or Subsidiaries shall not discharge the same or
provide for its discharge in accordance with its terms, or procure a stay of
execution thereof within 30 days from the date of entry thereof and within said
period of 30 days, or such longer period during which execution of such judgment
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal;

10.1.9. A representation or warranty by the Borrower in this Agreement or in
any financial statement, certificate, report or opinion delivered pursuant to this
Agreement proves to have been incorrect in any material respect when made or deemed
made or delivered; or

10.1.10. neither the Borrower or any of its Subsidiaries shall engage in any
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time) involving any pension
or profit-sharing plan (“Plan”);
(B) any “accumulated funding deficiency” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan; (C) a Reportable Event
(as defined in ERISA) shall occur with respect to, or proceedings shall commence to
have a trustee appointed (or a trustee shall be appointed) to administer, or to
terminate, any Single Employer Plan (as defined ERISA), which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of any of the Banks, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (D) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA; (E) the Borrower or any Subsidiary shall, or is, in
the reasonable opinion of any of the Bank, likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of, a
Multiemployer Plan (as defined in ERISA); or (F) any other event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (A) through (F)
above, such event or conditions, if any, could reasonably be expected to subject the
Borrower or any of its Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or financial
condition of the Borrower.

10.2 Remedies.

10.2.1. Upon the occurrence and during the continuance of any Event of Default,
the Bank may by notice to the Borrower terminate the Commitment of the Bank or
declare to be immediately due and payable the outstanding principal of, and accrued
interest on, the Note and all other amounts due and payable hereunder, or both,
whereupon the Commitment

 

16

 

of
the Bank shall terminate forthwith or all such amounts
shall become immediately due and payable, or both, as the case may be, without
further notice or demand, provided that in the case of any event or condition
described in Section 10

..1.5 or 10.1.6 hereof with respect to the Borrower, the Commitment shall
automatically terminate forthwith and all such amounts shall automatically become
immediately due and payable without notice or demand. The Borrower hereby expressly
waives presentment, notice of dishonor, protest, notice of protest, diligence in
bringing suit against any party and all other similar formalities.

10.2.2. Upon the occurrence and during the continuance of any Event of Default,
the Bank may, in addition to the remedies provided in Section 10.2.1 hereof, enforce its rights either by suit in equity, or by action
at law, or by other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenants or agreements
contained in this Agreement or the Note or in aid of the exercise of any power
granted in this Agreement or the Note and may enforce the payment of the Notes and
any of its rights available at law or in equity.

10.2.3. Upon the occurrence and during the continuance of any Event of Default,
the Bank, is hereby authorized at any time and from time to time, without notice to
the Borrower (any requirement for such notice being expressly waived by the
Borrower) to set off and apply against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Bank to or for the credit or the account
of the Borrower and any property of the Borrower from time to time in possession of
the Bank, irrespective of whether or not the Bank shall have made any demand
hereunder and although such obligations may be contingent and unmatured. The rights of the Bank under this Section 10.2.3 are in addition to other
rights and remedies (including, without limitation, other rights of setoff) which
the Bank may have.

SECTION 11. MISCELLANEOUS.

11.1 Amendments, Etc. This Agreement may be amended from time to time and any
provision hereof may be waived by the parties hereto. No such amendment or waiver of any provision
of this Agreement nor consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be in writing and signed by the Bank, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given.

 

17

 

11.2 Notices. Except as otherwise provided in this Agreement, all notices, requests,
consents and other communications hereunder shall be in writing and shall be delivered or sent to
the Borrower at 13405 Yarmouth Rd., N.W., Pickerington, Ohio 43147, Attention: Daniel D. Viren,
Senior Vice President; to The Huntington National Bank at 41 South High Street, Columbus, Ohio
43287, Attention: Bud Ward, Senior Vice President, or to such other address as may be designated
by the Borrower or the Bank by notice to the other parties. All notices shall be deemed to have
been given at the time of actual delivery thereof to such address, or if sent by certified or
registered mail, postage prepaid, to such address, on the third day after the date of mailing.

11.3 Conduct No Waiver; Remedies Cumulative. No course of dealing on the part of the
Bank, nor any delay or failure on the part of the Bank in exercising any rights, powers or
privileges hereunder, shall operate as a waiver of such rights, powers or privileges or otherwise
prejudice the Bank’s rights and remedies hereunder; nor shall any single or partial exercise
thereof preclude any further exercise thereof or the exercise of any other right, power or
privilege by the Bank. No right or remedy conferred upon or reserved to the Bank under this
Agreement is intended to be exclusive of any other right or remedy, and every right and remedy
shall be cumulative and in addition to every other right or remedy given hereunder or now or
hereafter existing under any applicable law. Every right and remedy given by this Agreement or by
applicable law to the Bank may be exercised from time to time as often as may be deemed expedient
by the Bank.

11.4 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Borrower made herein or in any certificate or
other document delivered pursuant hereto shall be deemed to be material and to have been relied
upon by the Bank, notwithstanding any investigation heretofore or hereafter made by the Bank or on
the Bank’s behalf, and those covenants and agreements of the Borrower set forth in Section 6 and
Section 11.5 hereof shall survive the repayment in full of the Loans and the termination of the
Commitment.

11.5 Expenses.

11.5.1. The Borrower agrees to pay and save the Bank harmless from liability
for the payment of the reasonable fees and expenses of counsel to the Bank in
connection with the preparation, execution and delivery of this Agreement and the
Note and the consummation of the transactions contemplated hereby, and in connection
with any amendments, waivers or consents in connection therewith, and all reasonable
costs and expenses of the Bank (including reasonable fees and expenses of counsel)
in connection with any Event of Default or the enforcement of this Agreement or the
Note.

11.5.2. The Borrower agrees to pay, and indemnify and hold harmless the Bank
from and against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the use of proceeds of the Loans.

 

18

 

11.6 Successors and Assigns. This Agreement shall be binding upon the parties hereto
and shall inure to the benefit of the Bank and its successors and assigns. The Bank may assign its
entire interest in this Agreement, the Commitment and the
Loans to another financial institution, including, but not limited to, one of the Banks’
affiliates. With the prior written consent of the Borrower, which consent shall not be
unreasonably withheld, the Bank may sell participations in the Commitment and Loans to any
financial institution or institutions, provided that, prior to a Default or an Event of Default,
the Bank retains full power to make all decisions with respect to any waiver relating to this
Agreement, and makes any interest rate quotations based on circumstances relating to it and not to
any participant. The Borrower shall not, without the prior consent of the Bank, assign its rights
or obligations hereunder or, as the case may be, under the Note and the Bank shall not be obligated
to make any Loans hereunder to any entity other than the Borrower.

11.7 Assignment to Federal Reserve Banks. The Bank may at any time assign all or any
portion of its rights under this Agreement and the Note to a Federal Reserve Bank. No such
assignment shall release the Bank from its obligations hereunder.

11.8 Counterparts. This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument and any of the parties hereto
may execute this Agreement by signing any such counterpart.

11.9 Governing Law, Consent to Jurisdiction and Waiver of Immunity. This Agreement is
a contract made under, and the rights and obligations of the parties hereunder shall be governed by
and construed in accordance with, the laws of the State of Ohio applicable to contracts made and to
be performed entirely within such State. The Borrower further agrees that any legal action or
proceeding with respect to this Agreement or the Note or the transactions contemplated hereby, may
be brought in any court of the State of Ohio, or in the United States courts for the Southern
District of Ohio, and the Borrower hereby irrevocably submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person, property and revenues
and irrevocably consents to service of process in any such action or proceeding by the mailing
thereof by U.S. mail to the Borrower at the Borrower’s address set forth in Section 11.2 hereof.
To the extent permitted by applicable law, the Borrower hereby waives and agrees not to assert in
any such action or proceeding, by way of motion, as a defense or otherwise, any claim that (i) it
is not personally subject to the jurisdiction of the aforesaid courts, (ii) except as required by
applicable law, its property is exempt or immune from attachment or execution, (iii) any such
action or proceeding brought in any one of the aforesaid courts is brought in an inconvenient
forum, (iv) the venue of any such action or proceeding brought in any one of the aforesaid courts
is improper, or (v) this Agreement or any document contemplated
herein or the subject matter hereof or thereof may not be enforced in or by any such Court.

 

19

 

Nothing in this paragraph shall affect the right of the Bank to serve process in any other
manner permitted by law or limit the right of the Bank to bring any such action or proceeding
against the Borrower or to obtain execution on any judgment, in any other jurisdiction or in any
other manner permitted by law.

11.10 Waiver of Jury Trial. THE BORROWER WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER THIS AGREEMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR (ii) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.

11.11 Headings. The headings of the various subdivisions hereof are for the
convenience of reference only and shall in no way modify any of the terms and provisions hereof.

11.12 Construction of Certain Provisions. All computations required hereunder and all
financial terms used herein shall be made or construed in accordance with generally accepted
accounting principles. If any provision of this Agreement refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person, whether or not expressly specified in
such provision.

11.13 Integration and Severability. This Agreement embodies the entire agreement and
understanding between the Borrower and the Bank, and supersedes all prior agreements and
understandings, relating to the subject matter hereof. In case any one or more of the provisions
of this Agreement or the Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the provisions of this
Agreement or the Note in any other jurisdiction.

11.14 Usury. Notwithstanding any provisions of this Agreement or the Note, in no
event shall the amount of interest paid or agreed to be paid by the Borrower exceed an amount
computed at the highest rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this
Agreement or the Note at the time performance of such provision shall be due shall involve
exceeding the interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall be
reduced to an amount computed at the highest rate of interest permissible under applicable law, and
if for any reason whatsoever the Bank shall ever receive as interest an amount which would be
deemed unlawful under such applicable law such interest shall be automatically applied by the Bank
to the payment of principal of the Bank’s Loans outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Borrower if such principal
has been paid in full.

 

20

 

SECTION 12. CERTAIN DEFINITIONS.

As used herein the following words and terms shall have the following meanings, respectively:

12.1 “Acquisition” means the acquisition by Borrower or an affiliate of all or substantially
all of the assets or stock of an entity.

12.2 “Acquisition Loan” means a loan by Bank to Borrower to fund an Acquisition. Bank will consider lending Borrower up to an aggregate principal amount of $20,000,000.00
in Acquisition Loans, subject to underwriting and approval by Bank.

12.3 “Business Day” means any day other than a Saturday, Sunday or other day on which banks
are not open for business in Columbus, Ohio, and on which banks in London, England, settle
payments.

12.4 “Capitalized Lease” means and includes at any time any lease of property, real or
personal, which in accordance with GAAP would at such time be required to be capitalized on a
balance sheet of the lessee.

12.5 “Capitalized Lease Obligation” means at any time the capitalized amount of the rental
commitment under a Capitalized Lease which in accordance with GAAP would at such time be required
to be shown on a balance sheet of the lessee.

12.6 “Consolidated Current Assets” means the assets of the Borrower and its Subsidiaries that
would (determined on a consolidated basis in accordance with GAAP consistently applied) be
classified as “current assets” on its consolidated balance sheet.

12.7 “Consolidated Current Liabilities” means (i) the liabilities of the Borrower and its
Subsidiaries that would (determined on a consolidated basis in
accordance with GAAP consistently applied) be classified as “current liabilities” on its
consolidated balance sheet, (ii) Guaranties by the Borrower of Current Debt of other Persons, and
(iii) debt owed to banks.

12.8 “Consolidated Net Income” means the aggregate of the Net Income of the Borrower and its
Subsidiaries, after eliminating all inter-company items and portions of earnings properly
attributable to minority interests, if any, in the capital stock of such Subsidiaries, all computed
and consolidated in accordance with GAAP.

12.9 “Consolidated Tangible Net Worth” means as of the date of any determination thereof the
sum of all amounts which, in accordance with GAAP, would be included under shareholders’ equity
plus (to the extent not included in shareholders’ equity) preferred stock, as determined on a
consolidated basis, on the balance sheet of the Borrower and its Subsidiaries, minus assets
properly classified as intangible assets in accordance with GAAP.

 

21

 

12.10 “Consolidated Total Assets” means, as of the date of any determination thereof, the
total amount of all assets of the Borrower and its Subsidiaries as determined on a consolidated
basis in accordance with GAAP.

12.11 “Current Debt” of any Person shall mean as of the date of any determination thereof (i)
all indebtedness of such Person for borrowed money other than Funded Debt of such Person,
including, without limitation, debt owed to banks, and (ii) Guaranties by such Person of Current
Debt of others.

12.12 “Debt” of any Person shall mean all Current Debt of such Person and all Funded Debt of
such Person.

12.13 “Default” means any event which, with the lapse of time or the giving of notice pursuant
to the terms of this Agreement, or both, becomes an Event of Default.

12.14 “Dollars” and “$” mean the lawful money of the United States of America.

12.15 “Eligible Accounts Receivable” means or “Eligible Account” means the amount of an
account existing as of the date hereof or arising in the ordinary course of the Borrower’s business
owing to the Borrower (excluding sales or other taxes) from a party (the “Account Debtor”) which
conforms with all warranties of the Borrower contained herein and which meets all the following
requirements until it is collected in full: (a) the account is not more than 90 days from the date
of the original invoice therefor; (b) the account arose from the Borrower’s completed performance
of a sale of
goods and/or related services, is not a “rebilling” of such account, all such goods having
been lawfully shipped and invoiced to the Account Debtor, and upon the Bank’s request, copies of
all invoices, together with all shipping documents and delivery receipts evidencing such shipment
having been delivered to the Bank; (c) the account does not arise from a contract with the United
States Government or from a consumer transaction; (d) except in the normal course of business, the
account is not subject to any prior assignment, claim, lien, security interest, setoff, credit,
contra account, allowance, adjustment, levy, return of goods, or discount; (e) the account did not
arise from a transaction with a person, corporation or entity affiliated with the Borrower; (f) the
account does not, when added to all other accounts of the Account Debtor with the Borrower, produce
an aggregate indebtedness from the Account Debtor of more than 20% of the total of all the
Borrower’s Eligible Accounts Receivable; (g) the Borrower has not received notice of bankruptcy or
insolvency of the Account Debtor; (h) the account is not evidenced by any chattel paper, promissory
note, payment instrument or written agreement; (j) the account does not arise from an Account
Debtor whose mailing address or executive office is located outside the United States; (k) the
account does not arise from an Account Debtor who has more than 50% of its accounts receivable with
the Borrower due and owing for more than ninety (90) days from their due dates; (l) the Bank has
not notified the Borrower that the account or the Account Debtor is unsatisfactory or unacceptable
(although the Bank reserves the right to do so in its sole discretion at any time); and (m) the
account is not part of a bonded transaction.

 

22

 

12.16 “Eligible Inventory” means the Borrower’s Inventory of raw materials and finished goods
valued at the lesser of cost (on a FIFO basis) or fair market value, owned by the Borrower at the
time of determination which constitute or are to constitute products to be sold by the Borrower in
the ordinary course of business
.. Such Inventory shall also meet all of the following qualifications: (a) it is in good
condition, meets all standards imposed by any governmental agency, or department or division
thereof, having regulatory authority over such goods, their use and/or sale and is either currently
usable or currently saleable in the normal course of the Borrower’s business and is not otherwise
unacceptable to the Bank, in the Bank’s sole discretion, due to age, type, category, quantity,
quality, or one or more of the foregoing; (b) the Borrower has good title to such Inventory; (c) it
is in the Borrower’s physical possession (stored only at the Borrower’s principal place of business
identified in paragraph 11.2 of this Agreement) and is not on consignment to or from another party;
(d) if the Inventory is in transit, such Inventory, shall be eligible only up to the face amount of
the original invoice less any and all applicable freight, transportation or custom fees, charges or
duties; (e) the Inventory is insured in an amount and manner acceptable to the Borrower and the
Bank (including marine insurance), and the Bank is a named insured or loss payee with respect to
the Inventory; and (f) the Bank has not notified the Borrower that the Inventory is unsatisfactory
or unacceptable in its sole credit and
collateral judgment (although the Bank reserves the right to do so in its sole discretion at
any time).

12.17 “Event of Default” has the meaning specified in Section 11 hereof.

12.18 “Funded Debt” of any Person means (i) indebtedness of such Person for borrowed money or
which has been incurred in connection with the acquisition of assets or services, in each case
having a final maturity of more than one year from the date of creation thereof (or which is
renewable or extendible at the option of the obligor for a period or periods more than one year
from the date of creation), including all payments in respect thereof that are required to be made
within one year from the date of any determination of Funded Debt, whether or not the obligation to
make such payments shall constitute a current liability of the obligor under GAAP, (ii) Capitalized
Lease Obligations of such Person, (iii) obligations secured by any Lien upon property or assets
owned by such Person, even though such Person has not assumed or become liable for the payment of
such obligations, (iv) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, notwithstanding the fact that
the rights and remedies of the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of property, and (v) all Guaranties by such Person of
Funded Debt of others. Funded Debt excludes debt owed to banks.

 

23

 

12.19 “GAAP” means generally accepted accounting principles as in effect at the time of
application to the provisions hereof.

12.20 “Guaranties” by any Person means all obligations of such Person guaranteeing, or in
effect guaranteeing, any Current Debt or Funded Debt of any other Person (the “primary obligor”) in
any manner, whether directly or indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person (i) to purchase such Debt or any
property or assets constituting security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of such Debt, (y) to maintain working capital or other balance sheet condition
or otherwise to advance or make available funds for the purchase or payment of such Debt, (iii) to
lease property or to purchase securities or other property or services primarily for the purpose of
assuring the owner of such Debt of the ability of the primary obligor to make payment of such Debt,
or (iv) otherwise to assure the owner of such Debt against loss in respect thereof. Guaranties do not included endorsement of instruments for deposit or collection in the
ordinary course of business.

12.21 “Interest Period” means, an initial period commencing, as the case may be, on the day
such a Loan shall be made by a Bank and ending on that date or the date, one, two, or three months
thereafter, as the Borrower may elect, provided that (A)
any Interest Period with respect to a Loan, which shall commence on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month; and (B) each Interest Period with respect to a Loan which would
otherwise end on a day which is not a Business Day shall end on the next succeeding Business Day
or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day. Notwithstanding anything herein to the contrary, no Interest Period may extend beyond the
Termination Date.

12.22 “Investment” means any loan, advance, extension of credit or contribution of capital or
any investment in, or purchase or other acquisition of, stock, notes, debentures or other
securities.

12.23 “LIBO Rate” means, the rate obtained by dividing (1) the actual or estimated per annum
rate, or the arithmetic mean of the per annum rates, of interest for deposits in U.S. dollars for the related Interest Period, as determined by the Bank in its discretion based
upon information which appears on page LIBOR01, captioned British Bankers Assoc. Interest
Settlement Rates, of the Reuters America Network, a service of Reuters America Inc. (or such other
page that may replace that page on that service for the purpose of displaying London interbank
offered rates; or, if such service ceases to be available or ceases to be use by the Bank, such
other reasonably comparable money rate service as the Bank may select) or upon information obtained
from any other reasonable

 

24

 

procedure, on each date the LIBO Rate is determined; by (2) an amount
equal to one minus  the stated maximum rate (expressed as a decimal), if any, of all reserve
requirements (including, without limitation, any marginal, emergency, supplemental, special or
other reserves) that is specified on each date the LIBO Rate is determined by the Board of
Governors of the Federal Reserve System (or any successor agency thereto) for determining the
maximum reserve requirement with respect to eurocurrency funding (currently referred to as
“Eurocurrency liabilities” in Regulation D of such Board) maintained by a member bank of such
System, or any other regulations of any governmental authority having jurisdiction with respect
thereto, all as conclusively determined by the Bank. Subject to any maximum or minimum interest
rate limitation specified herein or by applicable law, the LIBO Rate shall change automatically
without notice to the Borrower immediately at the end of each Interest Period, with any change
thereto effective as of the opening of business on the day of the change.

12.24 “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or other encumbrance of any kind in respect of such asset. For the purposes hereof, a Person shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capitalized Lease or other title retention agreement relating to such
asset.

12.25 “Loan” or “Loans” means any borrowings by the Borrower from the Bank under the
Commitment.

12.26 “Net Income” means for any period the net income (or the net deficit, if expenses and
charges exceed revenues and other proper income credits) of a corporation or other Person for such
period determined in accordance with GAAP.

12.27 “Note” means the Revolving Credit Note as defined in Section 4.2.

12.28 “Person” means and includes an individual, a corporation, a partnership, a firm, a joint
venture, a limited liability company, a trust, an unincorporated organization or a government or an
agency or political subdivision thereof.

12.29 “Prime Commercial Rate” means the prime commercial lending rate of The Huntington
National Bank, as such rate is established and made available from time to time based on its
consideration of economic, money market, business and competitive factors, and it is not
necessarily such Bank’s most favored rate, such rate to be adjusted automatically, without notice,
on the effective date of any change in such rate.

12.30 “Subsidiary” means any corporation 50% or more of the outstanding voting stock of which
at the time is owned directly or indirectly by the Borrower.

 

25

 

12.31 “Termination Date” means March 31, 2010 or such later date(s) to which the Commitment
may be extended from time to time pursuant to the provisions of this Agreement.

12.32 “Variable Interest Rate” means LIBO Rate plus one and two tenths percent (1.2%).

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed in
triplicate originals as of the year and day first above written.

	 	 	 	 	 
	 	BARRY CORPORATION

 	 
	 	By:  	/s/ Daniel D. Viren
 	 
	 	 	Name:  	Daniel D. Viren 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	THE HUNTINGTON NATIONAL BANK

 	 
	 	By:  	/s/ Bud Ward
 	 
	 	 	Name:  	Bud Ward 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

26

 

EXHIBIT A

REVOLVING CREDIT NOTE

			
	 	 	 
	March 29, 2007
	 	$20,000,000

FOR VALUE RECEIVED, the undersigned, R.G. BARRY CORPORATION, an Ohio corporation, promises to
pay to THE HUNTINGTON NATIONAL BANK (hereinafter called the “Bank”) or order, at its office at 41
South High Street, Columbus, Ohio 43215, in lawful money of the United States of America and in
immediately available funds, the principal sum of Twenty Million Dollars ($20,000,000.00), or such
lesser amount as is then outstanding under this Note as indicated on the records of the Bank, for
money loaned with interest upon the unpaid principal balance hereof from time to time outstanding,
payable, in like money and funds, in arrears on each interest due date after the date hereof.

This Note evidences Loans made by the Bank to the undersigned and shall bear interest at the
rates, respectively, as specified in the Credit Agreement described below, which is incorporated
herein by reference. Interest shall be payable on each Interest Payment Date. Interest will be
computed on the basis of a 360-day year for the actual number of days in each Interest Period.
After an Event of Default or after maturity, whether by acceleration or otherwise, this Note shall
bear interest at three percent (3%) in excess of the Prime Commercial Rate.

This Note represents Loans made pursuant to the Bank’s Commitment under the Revolving Credit
Agreement dated as of March 29, 2007 as it may be from time to time amended (the “Credit
Agreement”), among the undersigned, the Bank and certain other banks and the terms and conditions
set forth in the Credit Agreement shall be considered a part hereof to the same extent as if
written herein, and upon the occurrence of an Event of Default as defined in the Credit Agreement
then the entire principal sum and any accrued interest on this Note shall, at the option of the
holder of this Note except as to any event or condition described in Section 10.1.5 or 10.1.6 of
the Credit Agreement, at once and without notice become due and payable. Capitalized terms used
but not defined in this Note shall have the respective meanings assigned to them in the Credit
Agreement. The entire unpaid principal and interest on this Note shall be due and payable on the
Termination Date.

This Note is a revolving credit subject to the terms, conditions and limitations hereof, of
the Credit Agreement and until maturity (whether on the Termination Date or accelerated maturity),
the undersigned may borrow and re-borrow from the Bank and the Bank may lend and re-lend to the
undersigned under this Note
and otherwise in accordance with the Credit Agreement such amounts not to exceed
$20,000,000.00.

 

1

 

The Bank is hereby authorized by the undersigned to note on the schedule attached to this Note
the date, amount and type of each Loan, the interest rate and duration of the related Interest
Period (if applicable), the amount of each payment or prepayment of principal thereon and the other
information provided for on such schedule, which schedule shall constitute prima facie evidence of
the information so noted, provided, that any failure by the Bank to make any such notation shall
not relieve the undersigned of its obligation to repay the outstanding principal amount of this
Note, all accrued interest hereon and any amount payable in accordance with the terms of this Note
and the Credit Agreement.

The undersigned may at any time, upon three (3) days prior written notice to the Bank, without
penalty or premium, but subject to reimbursement of any LIBO Rate breakage costs and expenses,
prepay this Note in whole or in part, with all prepayments being first applied to accrued but
unpaid interest, then to any fees due under the Credit Agreement, and then to installments of
principal in the inverse order of maturity.

All parties to this Note, including endorsers, sureties and guarantors, if any, hereby waive
presentment for payment, demand, protest, notice of non-payment or dishonor, and of protest, and
any and all other notices and demands whatsoever, and agree to remain bound until the interest and
principal are paid in full notwithstanding any extension or extensions of time for payment which
may be granted, even though the period of extension may be indefinite, and notwithstanding any
inaction by, or failure to assert any legal right available to, the holder of this Note.

This Note shall be construed in accordance with and governed by the laws of the State of Ohio.

	 	 	 	 	 
	 	R.G. BARRY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Daniel D. Viren 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

 

2

 

EXHIBIT B

(Litigation Exhibit)

Investigation by Internal Revenue Service of specific matters. It is anticipated that the Borrower
and the Internal Revenue Service will enter into a Closing Agreement on Final Determination
Covering Specific Matters (the “Closing Agreement”). If the Internal Revenue Service approves the
Closing Agreement on the terms anticipated by Borrower, the Final Determination by the Internal
Revenue Service will not have a material adverse effect on the financial condition, business or
operations of the Borrower and its Subsidiaries, taken as a whole

 

1

 

EXHIBIT C

(Request for Loan Disbursement, Continuation or Conversion)

THE HUNTINGTON NATIONAL BANK

41 SOUTH HIGH STREET

COLUMBUS, OHIO 43215

ATTENTION: Bud Ward

Re:     Loans under Revolving Credit Agreement dated March 29, 2007

Ladies and Gentlemen:

The undersigned, a duly authorized officer of R. G. Barry Corporation, the borrower under the
above-referenced Revolving Credit Agreement, hereby requests the (disbursement) (continuation)
(conversion) of a LIBO Rate Advance based upon (daily) (1) month) (2 month) or (3 month) LIBOR in
the amount of $                     to LIBO Rate Advance based upon (daily) (1 month) (2 month) or (3
month) LIBOR in the amount of $                     with respect to the Commitment as described in the
Revolving Credit Agreement. The date of (disbursement) (continuation) (conversion) will be
                    ,
      .

	 	 	 	 	 
	 	R. G. BARRY CORPORATION

 	 
	 	By:  	
 	 
	 	Name:  	
 	 
	 	Title:  	
 
	 

 

1

 

EXHIBIT D

(compliance certificate)

THE HUNTINGTON NATIONAL BANK

41 SOUTH HIGH STREET

COLUMBUS, OHIO 43215

ATTENTION: Bud Ward

Re:     Loans under Revolving Credit Agreement dated March 29, 2007

Ladies and Gentlemen:

The undersigned, a duly authorized officer of R. G. Barry Corporation, the borrower under the
above-referenced Revolving Credit Agreement, hereby acknowledges as of the date of this
Certificate:

The consolidated Tangible Net Worth of R. G. Barry Corporation, as of the period ending
                    ,
200__

is $                    .

The
Minimum Fixed Charge Coverage Ratio, for the period ending
                    , 20__

, is
                    .

	 	 	 	 	 
	 	R. G. BARRY CORPORATION

 	 
	 	By:  	
 	 
	 	Name:  	
 	 
	 	Title:  	
 
	 	Date:  	
 	 
	 

 

1

 

EXHIBIT E

(Permitted Liens)

Financing Statements

	 	 	 	 	 	 	 
	Date Filed	 	File Number	 	Secured Party	 	Collateral/Comments
	11/21/2002

	 	OH00057021495
	 	Bank One, NA
	 	Leased equipment (Nortel
phone system in Columbus)

Assignment filed 12/16/2002
assigning interest to Bank
One, NA from NCP Leasing,
Inc.
	 
	 	 	 	 	 	 
	5/16/2003

	 	OH00063864186
	 	Bank One, N.A.
	 	Leased equipment (AS400
system printer in San Angelo,
TX)

Assignment filed 7/29/2003
assigning interest to Bank
One, N.A. from NCP Leasing,
Inc.
	 
	 	 	 	 	 	 
	3/26/2004

	 	OH00075367207
	 	The CIT
Group/Commercial
Services, Inc.
	 	All accounts, inventory,
documents of title and
equipment as more fully set
forth on attached Schedule to
the financing statement*
	 
	 	 	 	 	 	 
	12/20/2004

	 	OH00084699958
	 	NCP Leasing, Inc.
	 	Leased equipment (New AS400
and components)
	 
	 	 	 	 	 	 
	12/20/2004

	 	OH00084700983
	 	NCP Leasing, Inc.
	 	Leased equipment (New AS400
and components)
	 
	 	 	 	 	 	 
	12/27/2004

	 	OH00084922832
	 	NCP Leasing, Inc.
	 	Leased equipment (New AS400
and components)
	 
	 	 	 	 	 	 
	5/25/2005

	 	OH00089826035
	 	IBM Credit LLC
	 	Leased equipment (IBM
Desktops and LCD monitors)
	 
	 	 	 	 	 	 
	7/05/2005

	 	OH00091047451
	 	IBM Credit LLC
	 	Leased equipment (IBM
Desktops and LCD monitors)
	 
	 	 	 	 	 	 
	8/08/2005

	 	OH00092100466
	 	IBM Credit LLC
	 	Leased equipment (IBM
Desktops and LCD monitors)
	 
	 	 	 	 	 	 
	8/18/2005

	 	OH00092415120
	 	Xerox Corporation
	 	Leased equipment (Xerox

printer in CAD area)
	 
	 	 	 	 	 	 
	11/15/2005

	 	OH00095632052
	 	IBM Credit LLC
	 	Leased equipment (IBM
Desktops and LCD monitors)
	 
	 	 	 	 	 	 
	12/21/2005

	 	OH00096916782
	 	NCP Leasing, Inc.
	 	Leased equipment (New color
copier/printer on
2nd floor —
Columbus)
	 
	 	 	 	 	 	 
	1/12/2006

	 	OH00097682918
	 	IBM Credit LLC
	 	Leased equipment (IBM Laptops)
	 
	 	 	 	 	 	 
	3/15/2007

	 	OH00112872789
	 	IBM Credit LLC
	 	Leased equipment (New VMW are
File Servers)

 

1

 

Mortgage

	 	 	 	 	 	 	 
	Date Filed	 	File Number	 	Secured Party	 	Collateral/Comments
	6/28/04

	 	Fairfield County,

Ohio, Book 1348,

Page 858
	 	The CIT
Group/Commercial
Services, Inc.
	 	All of mortgagor’s
interest in the
real estate
described therein.*

Cash Collateral Deposit for Letter of Credit

The CIT Group/Commercial Services, Inc. (“CIT”) supported Borrower’s application for a letter
of credit in the original face amount of $605,000 issued by JPMorgan Chase Bank, N.A. for
Borrower’s customs related payments (the “Letter of Credit”). The Letter of Credit expires on June
30, 2007. CIT requires Borrower to keep on deposit with CIT cash collateral in the amount of
$665,500 as security for the Letter of Credit until the Letter of Credit is replaced, expires or is
otherwise of no force and effect.

	 	 	 
	*	 	To be released.

 

2

 

EXHIBIT F

(no default certificate)

THE HUNTINGTON NATIONAL BANK

41 SOUTH HIGH STREET

COLUMBUS, OHIO 43215

ATTENTION: Bud Ward

Re:     Loans under Revolving Credit Agreement dated March 29, 2007

Ladies and Gentlemen:

The undersigned, a duly authorized officer of R. G. Barry Corporation, the borrower under the
above-referenced Revolving Credit Agreement, hereby acknowledges as of the date of this Certificate
that there is no Event of Default under the Revolving Credit Agreement nor has there been an event
that upon the giving of notice or the passage of time will result in an Event of Default under the
Revolving Credit Agreement.

	 	 	 	 	 
	 	R. G. BARRY CORPORATION

 	 
	 	By:  	
 	 
	 	Name:  	
 	 
	 	Title:  	
 
	 	Date:  	
 	 
	 

 

1exv10w1

Exhibit 10.1

[Medtronic Letterhead]

May 11, 2011

Mr. Omar Ishrak

     Re: Employment Terms

Dear Omar:

     On behalf of the Board of Directors (the “Board”) of Medtronic, Inc. (the “Company”), I am
pleased to offer you employment with the Company on the following terms:

     1. COMMENCEMENT DATE: Your employment with the Company will commence on or about June
13, 2011 (your “Commencement Date”).

     2. POSITION; PRINCIPAL PLACE OF EMPLOYMENT: You will be employed as the Chief
Executive Officer (“CEO”). Your principal place of employment will be at the Company’s
headquarters in Minneapolis, Minnesota, subject to reasonable business travel consistent with your
duties and responsibilities. During the period of your employment hereunder (the “Employment
Period”), you shall serve on a full-time basis and perform services in a capacity and in a manner
consistent with your position for the Company, including for any entity that is directly, or
indirectly through one or more intermediaries, controlled by the Company (a “Subsidiary”). You
shall report solely to the Company’s board of directors (the “Board”). In the position of Chief
Executive Officer, you shall have the responsibilities, duties and authority of a person in a
similar position at a similarly-sized public company, and such other duties, authorities and
responsibilities that are not inconsistent with your position as assigned from time to time by the
Board. During the Employment Period, you agree to devote substantially all of your business time
and attention and your good faith efforts (excepting vacation time, holidays, sick days and periods
of disability) to your employment and service with the Company and its Subsidiaries; provided,
however, that this Section 2 shall not be interpreted as prohibiting you from managing your
personal investments, engaging in charitable or civic activities, serving on corporate (if approved
by the Board in its sole discretion), civic or charitable boards or committees, delivering lectures
or speaking engagements, so long as such activities in the aggregate do not (i) materially
interfere with the performance of your duties and responsibilities hereunder or (ii) create a
fiduciary conflict.

     3. BOARD MEMBERSHIP: The Board shall take such action as may be necessary to appoint
or elect you as a member of the Board and as Chairman of the Board as of your Commencement Date.
Thereafter, during your employment with the Company, the Board shall annually nominate you for
re-election as a member of the Board and as Chairman of the Board. You agree to serve without
additional compensation as an officer and director of any of the Company’s Subsidiaries.

     4. BASE SALARY: You will be paid a base salary at an annual rate of not less than
$1,350,000 (as increased from time to time, the “Base Salary”), payable in accordance with the

 

 

Mr. Omar Ishrak

May 11, 2011

Page 2

regular payroll practices of the Company. Your Base Salary shall be reviewed annually by the
Board (or a committee thereof) for increase, and once increased Executive’s base salary may not be
decreased (except for a proportionate reduction applicable to all senior executives of the
Company).

     5. ANNUAL INCENTIVE: For each fiscal year during your employment with the Company
hereunder, you will participate in the Medtronic Incentive Plan (the “MIP”) and all other cash and
equity incentive compensation plans and programs generally applicable to the Company’s senior
executives at a level commensurate with your position relative to incentive compensation awarded to
other senior executives of the Company. You will have the opportunity to earn a target MIP
incentive measured against criteria to be determined by the Board (or a committee thereof) of 140%
of Base Salary (the “Target MIP Incentive”). Your FY 2012 maximum MIP incentive will be 225% of
the Target MIP Incentive. Your FY 2012 annual MIP incentive shall be no less than your full Target
MIP Incentive.

     6. SIGN-ON BONUS. To replace forfeited annual incentive compensation at your current
employer, within thirty (30) days after your Commencement Date, you shall receive a cash sign-on
bonus of $650,000 (the “Sign-On Bonus”). In the event that your employment is terminated for Cause
(as defined in Attachment 1) or you terminate your employment other than for Good Reason (as
defined in Attachment 1), in either case on or before December 31, 2011, you will repay the gross
amount of the Sign-On Bonus to the Company within thirty (30) days after your date of termination.
For the avoidance of doubt, if your employment ends due to your death, the repayment obligation
described in the preceding sentence will not apply.

     7. INITIAL EQUITY AWARDS: The Board or the Committee (as defined in the Company’s
2008 Stock Award and Incentive Plan, or any successor thereto (the “Stock Incentive Plan”), shall
award you, as of your Commencement Date (the “Grant Date”), restricted stock units representing the
right to receive shares of common stock of the Company (“RSUs”). The terms and conditions
applicable to each initial equity award are unique to each award, and are as follows:

          (a) Performance Vested RSUs. 177,557 RSUs (the “Performance Vested RSUs”) are intended
to replace forfeited long-term incentive awards at your prior employer, and subject to earlier
vesting as provided in Section 12 below, 62,144 RSUs (35%) will vest on the first anniversary of
the Commencement Date and 38,471 RSUs (21 2/3%) will vest on each of the second, third and fourth
anniversaries of the Commencement Date, subject for each tranche to the attainment by the Company
of $1.00 diluted EPS (the “Earnings Goal”) for the fiscal year ending immediately prior to the
relevant anniversary date. Notwithstanding the foregoing, 2,072 of the RSUs scheduled to vest on
the first anniversary of the Commencement Date and 1,282 of the RSUs scheduled to vest on each of
the second, third and fourth anniversaries of the Commencement Date shall vest only, if in addition
to the other vesting requirements, the options of your prior employer scheduled to vest on June 10,
2011 have not vested on such date or prior thereto or have vested on such date or prior thereto but
have been forfeited by you prior to such time as such options are next thereafter exercisable by
you with simultaneous sale of the underlying stock granted upon exercise under applicable
securities laws and your prior

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employer’s trading restrictions. RSUs that vest on a particular anniversary date will be
converted into shares of Company common stock and delivered to you as soon as administratively
practicable after the date on which they vest, and such shares will not be subject to the Company’s
75% net after-tax holding requirement. In the event that the Company does not attain the Earnings
Goal for such fiscal year, the RSUs that would otherwise vest on the anniversary date will be
forfeited. In the event of a Change of Control (as defined in the Company’s 2008 Stock Award and
Incentive Plan), the Earnings Goal will be deemed satisfied with respect to future tranches. The
award agreement relating to the Performance Vested RSUs is attached hereto as Exhibit A.

          (b) Time Vested RSUs. 248,580 RSUs (the “Time Vested RSUs”) are intended to replace
forfeited non-vested supplemental pension benefits at your prior employer, and, subject to earlier
vesting as provided in Section 12 below, will become 100% vested on the fourth anniversary of the
Commencement Date. Vested RSUs will be automatically deferred and converted into shares of Company
common stock and delivered to you on the first anniversary of your “separation from service” (as
defined under Code Section 409A). The award agreement relating to the Time Vested RSUs is attached
hereto as Exhibit B.

     8. ANNUAL LONG-TERM INCENTIVE COMPENSATION: Beginning with the long-term incentive
awards granted during FY 2012 (expected to be granted in June 2011), you will participate in the
Company’s Medtronic Long Term Performance Plan (the “LTPP”) and any other long-term incentive plans
and programs for the Company’s senior executives at a level commensurate with your position. For
the LTPP award granted during FY 2012, you will receive an award with a grant date value (as
determined for compliance with ASC Topic 718 and other accounting standards applied by the Company
for such year) of at least $8,450,000, with the award in the same form and subject to the same
terms as conditions as the regular FY 2012 award granted to other senior executives of the Company.

     9. EMPLOYEE BENEFITS; VACATION: You will be entitled to participate in all employee
benefit plans that the Company has adopted or may adopt, maintain or contribute to for the benefit
of its senior executives at a level commensurate with your position, including medical (which, for
the avoidance of doubt, does not contain any waiting period or pre-existing condition exclusions or
limitations that would be applicable to you or your family members), disability and life
insurance. You will be entitled to annual paid vacation in accordance with the Company’s
policy applicable to senior executives, but in no event less than 4 weeks per year (as prorated for
partial years). The Company shall provide to you with an annual Business Allowance of $40,000 in
accordance with Company policy as set by the Board from time to time. This Business Allowance is
intended to defray the cost of an automobile, financial planning, clubs and other similar expenses.
In addition, you will be provided with an annual physical examination under the Company’s
Executive Physical Examination Program.

     10. RELOCATION: You will relocate to the vicinity of the Company’s headquarters
within a time frame mutually agreed upon between you and the Board. You will be entitled to
relocation benefits in accordance with the Company’s executive relocation policy, with such changes
and adjustments appropriate for a Chief Executive Officer as determined by

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the Board in its discretion. The relocation benefits described above will remain available to
you for an indefinite duration.

     11. EMPLOYEE AGREEMENT: As of your Commencement Date, you and the Company shall enter
into the Employee Agreement attached hereto as Exhibit C (the “Employee Agreement”) which contains
provisions relating to confidentiality, post-employment restrictions and inventions.
Notwithstanding anything in the Employee Agreement or otherwise to the contrary, the parties agree
that the provisions of Section 2 (Employment), subsection 7.3 (Venue and Personal Jurisdiction),
subsection 7.4 (Covenant Not to Sue) and subsection 8.4 (Prior Agreements) of the Employee
Agreement shall not apply to Employee and shall be superseded in their entirety by this Agreement.

     12. TERMINATION: Your employment may be terminated by either party at any time, and
shall terminate on the first of the following to occur of your death, Disability, termination by
the Company for Cause, termination by the Company without Cause, termination by you for Good Reason
or termination by you without Good Reason (Disability, Cause and Good Reason are each defined on
Attachment 1). Except as otherwise provided in this Agreement, any termination payments made and
benefits provided under this Agreement to you shall be in lieu of any termination or severance
payments or benefits for which you may be eligible under any of the plans, practices, policies or
programs of the Company or its affiliates. Except to the extent otherwise provided in this
Agreement, all benefits, including, without limitation, restricted stock units and other awards
under the Company’s long-term incentive programs, shall be subject to the terms and conditions of
the plan or arrangement under which such benefits accrue, are granted or are awarded.

          (a) DISABILITY. In the event that you incur a separation from service on account of your
Disability, the Company shall pay or provide you:

          (i) (A) any unpaid Base Salary through the date of termination and any accrued vacation
in accordance with Company policy within thirty (30) days following such termination; (B)
any unpaid MIP incentive earned with respect to any fiscal year ending on or preceding the
date of termination, payable at the same time in the year of termination as such payment
would be made if Executive continued to be employed by the Company; (C) reimbursement for
any unreimbursed expenses incurred through the date of termination within thirty (30) days
following such termination; (D) reimbursement for any unpaid relocation expenses in
accordance with Section 10 within thirty (30) days following such termination; and (E) all
other payments or benefits to which you may be entitled under the terms of any applicable
compensation arrangement or benefit or equity plan or program or grant or this Agreement,
payable at such times and otherwise in accordance with the terms and conditions such
arrangements (collectively, “Accrued Amounts”).

          (ii) a pro-rata portion of your MIP incentive for the fiscal year in which your
termination occurs, payable at the time that MIP incentives are paid to other senior
executives (determined by multiplying the amount you would have received based

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upon actual performance had employment continued through the end of the performance
year by a fraction, the numerator of which is the number of days during the performance year
of termination that you are employed by the Company and the denominator of which is 365)
(the “Termination Year MIP Incentive”).

          (iii) Upon such separation from service, your Performance Vested RSUs will fully vest
(the “Full Performance RSU Vesting”)

          (iv) Upon such separation from service, your Time Vested RSUs will fully vest (the
“Full Time RSU Vesting”).

          (v) Any long-term incentive awards granted to you under the LTPP or any other long-term
incentive plans and programs (other than the Time Vested RSUs and the Performance RSUs)
shall vest and be settled in accordance with their terms as provided in the applicable
long-term incentive plan and award agreement (the “Other Equity Vesting”).

          (b) DEATH. In the event that your employment ends on account of your death, your estate (or
to the extent a beneficiary has been designated in accordance with a program, the beneficiary under
such program) shall be entitled to the Accrued Amounts, the Termination Year MIP Incentive, the
Full Performance RSU Vesting, and the Full Time RSU Vesting.

          (c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If your employment should be terminated (i)
by the Company for Cause, or (ii) by you without Good Reason, the Company will pay you only the
Accrued Amounts.

          (d) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. If your employment is terminated by the
Company without Cause (other than a termination due to Disability or death) or by you for Good
Reason, the Company shall pay or provide you with:

          (i) the Accrued Amounts;

          (ii) the Termination Year MIP Incentive;

          (iii) an amount equal to the product of (A) two times (B) the sum of (1) your then Base
Salary and (2) your annual Target MIP Incentive, which amount shall be payable in a lump sum
payment on the date sixty (60) days after the date of termination;

          (iv) an amount equal to the product of (A) twenty four (24) and (B) the monthly premium
for COBRA continuation coverage under the Company’s medical, dental and vision plans,
payable in a lump sum on the date sixty (60) days after the date of termination.

          (v) subject to your continued payment of the full COBRA premiums, continued
participation for two (2) years in all medical, dental and vision plans which

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cover you (and eligible dependents) upon the same terms and conditions (except for the
requirements of your continued employment) in effect for active employees of the Company;

          (vi) the service requirement applicable to your unvested Performance Vested RSUs shall
be deemed to be satisfied and the Performance Vested RSUs shall remain outstanding subject
to vesting based only on achievement of the applicable Earnings Goal;

          (vii) Full Time RSU Vesting; and

          (viii) The Other Equity Vesting.

In the event you obtain other employment that offers substantially similar or improved
benefits, as to any particular medical, dental or vision plan, the continuation of coverage
by the Company for the corresponding benefit under such plan under subsection (iv) shall
cease upon your being eligible for such plan. The continuation of health benefits under
subsection (iv) shall reduce and count against your rights under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”). In the event that you die before
all payments pursuant to this Section 12(d) have been paid, all remaining payments shall be
made to the beneficiary specifically designated by you in writing prior to your death, or,
if no such beneficiary was designated (or the Company is unable in good faith to determine
the beneficiary designated), to your personal representative or estate.

     13. CONDITIONS: Any payments or benefits made or provided pursuant to Section 12(d)
(other than Accrued Amounts) are subject to your:

          (a) material compliance with subsections 4.1 and 4.2 of the Employee Agreement;

          (b) delivery to the Company of an executed Agreement and General Release (the “General
Release”), which shall be in the form attached hereto as Exhibit D (with such changes therein or
additions thereto as needed under then applicable law to give effect to its intent and purpose, but
no other changes without your consent), provided that such General Release shall be executed and
delivered (and no longer subject to revocation) within sixty (60) days following termination;
provided, however, that with respect to any payment subject to the General Release that is (a) paid
in installments that would otherwise commence prior to the sixtieth (60th) day after the date of
termination, the first payment of any such payment shall be made on the sixtieth (60th) day after
the date of termination, and will include payment of any amounts that were otherwise due prior
thereto, or (b) paid in a lump sum that would otherwise be paid prior to the sixtieth (60th) day
after the date of termination, such payment shall be made on the sixtieth (60th) day after the date
of termination; and

          (c) delivery to the Company of a resignation from all offices, directorships and fiduciary
positions with the Company, its affiliates and employee benefit plans.

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     14. CHANGE OF CONTROL: As of your Commencement Date, you and the Company shall enter
into the Change of Control Employment Agreement attached hereto as Exhibit E (the “Change of
Control Agreement”). Following the Effective Date (as defined in the Change of Control Agreement)
and while the Change of Control Agreement remains in effect, the definitions of Cause and Good
Reason set forth in the Change of Control Agreement shall govern where applicable under this
Agreement.

     15. ARBITRATION:

          (a) To the fullest extent permitted by law, all claims that you may have against Company or
any other Released Party, or which Company may have against you, in any way related to the subject
matter, interpretation, application, or alleged breach of this Agreement (“Arbitrable Claims”)
shall be resolved by binding arbitration in the state of Minnesota. The Arbitration will be held
pursuant to the rules of Arbitration of the Center for Public Resources. The decision of the
arbitrator shall be in writing and shall include a statement of the essential conclusions and
findings upon which the decision is based. Each party shall bear its own fees and expenses in
connection with any such arbitration, provided that in the event you prevail on any material issue
in such dispute, and the arbitrator determines that the Company should pay your costs of
arbitration, such award may include your reasonable attorneys fees and expenses, as well as the
arbitrator’s fees and expenses, to you.

          (b) Arbitration shall be final and binding upon the parties and shall be the exclusive remedy
for all Arbitrable Claims. Either party may bring an action in a Minnesota court to compel
arbitration under this Agreement and to enforce an arbitration award. Otherwise, neither party
shall initiate or prosecute any lawsuit or administrative action in any way related to any
Arbitrable Claim. Notwithstanding the foregoing, either party may, in the event of an actual or
threatened breach of this Agreement (including but not limited to the provisions of Section 14
hereof), seek a temporary restraining order or injunction in a Minnesota court restraining breach
pending a determination on the merits by the arbitrator.

          (c) THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE
CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE,
VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.

     16. INDEMNIFICATION; LIABILITY INSURANCE: The Company agrees to indemnify you
(including advance of expenses) and hold you harmless to the fullest extent permitted by applicable
law and under the by-laws of the Company against and in respect to any and all actions, suits,
proceedings, claims, demands, judgments, costs, expenses (including reasonable attorneys’ fees),
losses, and damages resulting from your good faith performance of your duties and obligations with
the Company. The Company shall cover you under the Medtronic Indemnification Trust Agreement dated
April 29, 2004 and as amended September 5, 2006 and April 27, 2009 and as further amended from time
to time pursuant to its terms, and any other directors and officers liability programs, including
without limitation, insurance, that may

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be in force both during and, while potential liability exists, after the term of this
Agreement in the same amount and to the same extent as the Company covers its other officers and
directors.

     17. YOUR REPRESENTATIONS: You represent and warrant that your entering into this
Agreement and your employment with the Company will not be in breach of any agreement with any
current or former employer and that you are not subject to any other restrictions on solicitation
of clients or customers or competing against another entity except general confidentiality
requirements. You understand that the Company has relied on this representation in entering into
this Agreement.

     18. ATTORNEYS FEES: The Company will reimburse you for the reasonable attorneys fees
you incur in connection with the negotiation and documentation of this agreement in an amount not
to exceed $50,000. Any reimbursement or payment that is treated as taxable income to you shall be
paid subject to and in accordance with Section 20(b).

     19. CLAWBACK: In addition to any compensation recovery (clawback) which may be
required by law and regulation, you acknowledge and agree that any performance-based or other
incentive-based compensation paid or awarded to you in connection with your employment with the
Company (but excluding the Performance Vested RSUs and the Time Vested RSUs) shall be subject to
any clawback requirements as set forth in the Company’s corporate governance guidelines or policies
and to any similar or successor provisions as may be in effect from time to time if the Company is
required to restate its financial results for fiscal year 2012 or thereafter while you are Chief
Executive Officer of the Company due to material noncompliance with financial reporting
requirements under United States federal securities laws as a result of misconduct or error (as
determined in good faith by the Audit Committee or by the full Board).

     20. CODE SECTION 409A: Anything in this Agreement to the contrary notwithstanding:

          (a) It is intended that any amounts payable under this Agreement shall either be exempt from
or comply with Code Section 409A of the Code and all regulations, guidance and other interpretive
authority issued thereunder so as not to subject you to payment of any additional tax, penalty or
interest imposed under Code Section 409A, and this Agreement shall be interpreted on a basis
consistent with such intent.

          (b) To the extent that the reimbursement of any expenses or the provision of any in-kind
benefits under this Agreement is subject to Code Section 409A, (i) the amount of such expenses
eligible for reimbursement, or in-kind benefits to be provided, during any one calendar year shall
not affect the amount of such expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year (provided, that, this clause (i) shall not be violated with
regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because
such expenses are subject to a limit related to the period the arrangement is in effect); (ii)
reimbursement of any such expense shall be made by no later than December 31 of the year following
the calendar year in which such expense is incurred; and (iii) your right to receive such
reimbursements or in-kind benefits shall not be subject to liquidation or exchange for another
benefit. Anything in this Agreement to the contrary notwithstanding, any tax gross-

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up payment (within the meaning of Treas. Reg. Section 1.409A-3(i)(1)(v)) provided for in this
Agreement shall be made to you no later than the end of your taxable year next following your
taxable year in which you remit the related taxes.

          (c) If you are a “specified employee” within the meaning of Treasury Regulation Section 1.409A
-1(i) as of the date of your separation from service (within the meaning of Treas. Reg. Section
1.409A-1(h)), then any payment or benefit pursuant to this Agreement on account of your separation
from service, to the extent such payment constitutes non-qualified deferred compensation subject to
Code Section 409A and required to be delayed pursuant to Section 409A(a)(2)(B)(i) of the Code
(after taking into account any exclusions applicable to such payment under Code Section 409A),
shall not be made until the first business day after (i) the expiration of six (6) months from the
date of your separation from service, or (ii) if earlier, the date of your death (the “Delay
Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to
this Section 20(c) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum and any
remaining payments and benefits due under this Agreement shall be paid or provided in accordance
with the normal payment dates specified for them herein. Notwithstanding any provision of this
Agreement to the contrary, for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits upon or following a termination of employment that are
considered deferred compensation under Section 409A, references to your “termination of employment”
(and corollary terms) with the Company shall be construed to refer to your “separation from
service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company.

          (d) Whenever payments under this Agreement are to be made in installments, each such
installment shall be deemed to be a separate payment for purposes of Section 409A. Whenever a
payment under this Agreement specifies a payment period with reference to a number of days (e.g.,
“payment shall be made within thirty (30) days following the date of termination”), the actual date
of payment within the specified period shall be within the sole discretion of the Company.

     21. MISCELLANEOUS

          (a) Survival. Upon the expiration or other termination of this Agreement or your, the
respective rights and obligations of the parties hereto shall survive to the extent necessary to
carry out the intentions of the parties under this Agreement.

          (b) Counterparts. This Agreement may be signed in counterparts and delivered by facsimile or
pdf transmission confirmed promptly thereafter by actual delivery of executed counterparts.

          (c) No Duty to Mitigate; No Set-Off. You shall have no duty to attempt to mitigate the level
of benefits payable by the Company to you hereunder and the Company shall not be entitled to set
off against the amounts payable hereunder any amounts received by you from any other source,
including any subsequent employer. The Company shall not be permitted

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to offset any amount that you owe the Company against any amounts due to you by the Company.

          (d) Withholding Taxes. From any payments due hereunder to you from the Company, there will be
withheld amounts required to satisfy liabilities for federal, state, and local taxes and
withholdings. In addition, the Company agrees that except as would violate applicable securities
law, (i) you shall be permitted to sell Company common stock in order to satisfy any such taxes and
withholding obligations and (ii) any minimum required tax withholding obligations on your equity
compensation awards in respect of Company common stock may be satisfied by reducing the number of
shares of Company common stock otherwise payable under such award by an amount of such shares
having a fair market value equal to the amount of such tax withholding obligations and (iii) the
required minimum tax withholding obligations in connection with delivery of the Performance Vested
RSUs and the Time Vested RSUs shall be satisfied automatically by reducing the number of shares of
Company common stock otherwise payable in connection with such awards by an amount of shares of
Company common stock otherwise subject to such RSUs having a fair market value equal to the amount
of such tax withholding obligations.

          (e) Entire Agreement. This Agreement supersedes all previous employment agreements, whether
written or oral between you and the Company and constitutes the entire agreement and understanding
between the Company and you concerning the subject matter hereof. No modification, amendment,
termination, or waiver of this Agreement will be binding unless in writing and signed by you and a
duly authorized officer of the Company. Failure of the any party to insist upon strict compliance
with any of the terms, covenants, or conditions hereof will not be deemed a waiver of such terms,
covenants, and conditions. If, and to the extent that, any other written or oral agreement between
you and the Company is inconsistent with or contradictory to the terms of this Agreement, the terms
of this Agreement will apply.

          (f) Successors and Assigns. This Agreement is binding upon and will inure to the benefit of
you and your heirs, executors, assigns and administrators or your estate and property and the
Company and its successors and permitted assigns. You may not assign or transfer to others the
obligation to perform your duties hereunder. The Company may not assign this Agreement other than
to a successor to all or substantially all of its business and then only upon such assignee’s
delivery to you of a written assumption of this Agreement.

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     On behalf of the Board, I am excited to offer you employment with the Company and look forward
to a mutually rewarding relationship.

Very truly yours,

/s/ Richard H. Anderson                                                     

Richard H. Anderson

Chairman of the Search Committee

Of the Board of Directors of

Medtronic, Inc.

	 	 	 

	Agreed and Accepted
	 	 
	 
	 	 
	/s/ Omar Ishrak 

Omar Ishrak

	 	 
	 
	 	 
	Dated: May 11, 2011
	 	 

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ATTACHMENT 1

Definitions

     “Cause” shall mean (A) repeated violations by the you of your obligations under Section 2 of
this Agreement (other than as a result of incapacity due to physical or mental illness) which are
demonstrably willful and deliberate on your part, which are not remedied in a reasonable period of
time after receipt of written notice from the Company specifying such violations, (B) willful
misconduct or gross neglect resulting in a demonstrable adverse financial or reputational impact on
the Company, (C) willful breach of subsections 4.1 or 4.2 of the Employee Agreement, or (D) your
conviction of, or plea of guilty or nolo contendre to, (1) a felony or (2) another crime of moral
turpitude resulting in a demonstrable adverse financial or reputational impact on the Company.

     For purposes of this Agreement, no act, or failure to act, on your part shall be considered
“willful” unless it is done, or omitted to be done, by you in bad faith and without reasonable
belief that your 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 (B)
the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be
done, by you in good faith and in the best interests of the Company. The cessation of employment
of you shall not be deemed to be for Cause unless and until there shall have been delivered to you
a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the
entire membership of the Board (excluding you, if you are a member of the Board) at a meeting of
the Board called and held for such purpose (after reasonable notice is provided to you and you are
given an opportunity, together with counsel for you, to be heard before the Board), finding that,
in the good faith opinion of the Board, you are guilty of the conduct described in this definition
of “Cause”, and specifying the particulars thereof in detail.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Disability” shall mean your absence from your material duties and responsibilities with the
Company for 180 days in any consecutive 12 month period as a result of incapacity due to mental or
physical illness or injury.

     “Good Reason” means the occurrence of any of the following without your written consent:

     (a) any material reduction in your Base Salary or your Target MIP Incentive;

     (b) any material adverse change by the Company in your title, position, authority or reporting
relationships with the Company;

     (b) the Company’s requirement that you relocate to a location in excess of fifty (50) miles
from the Company’s current headquarters location; or

     (c) any material breach by the Company of this Agreement (including, without limitation, any
failure to grant the Initial Equity Awards described in Section 7 or the long-term incentives
awards described in Section 8).

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Good Reason shall not exist unless and until you provide the Company with written notice of the
acts alleged to constitute Good Reason within ninety (90) days of the initial occurrence of such
event, and the Company fails to cure such acts within thirty (30) days of receipt of such notice.
You must terminate your employment within six (6) months following the initial occurrence of such
event for the termination to be on account of Good Reason.

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EXHIBIT A

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

2008 STOCK AWARD AND INCENTIVE PLAN

     1. Performance Restricted Stock Units Award. As of June 13, 2011, Medtronic, Inc., a
Minnesota corporation (the “Company”), hereby awards to you 177,557 Restricted Stock Units. The
Restricted Stock Units represent the right to receive shares of common stock of the Company (the
“Shares”), subject to the restrictions, limitations, and conditions contained in this Restricted
Stock Unit Award Agreement (the “Agreement”) and in the Medtronic, Inc. 2008 Stock Award and
Incentive Plan (the “Plan”). Unless otherwise defined in the Agreement, a capitalized term in the
Agreement will have the same meaning as in the Plan or in your Employment Letter dated May 11, 2011
(the “Employment Letter”). In the event of any inconsistency between the terms of the Agreement
and the Plan, the terms of this Agreement will govern.

     2. Vesting and Distribution.

          (a) The Restricted Stock Units governed by this Agreement will vest as to (i) 62,144 RSUs
(35%) on the first anniversary of the Commencement Date (as defined in your Letter Agreement) and
(ii) 38,471 RSUs (212/3%) on each of the second, third and fourth anniversaries of the
Commencement Date (with any previously unvested portion vesting on the fourth anniversary of the
Commencement Date) (each a “Vesting Date”), subject for each tranche to the attainment by the
Company of $1.00 diluted EPS for the fiscal year ending immediately prior to the relevant Vesting
Date (the “Earnings Goal”) and provided that you have not incurred a Termination of Employment
during the period beginning on the Commencement Date and ending on the applicable Vesting Date (the
“Restricted Period”). In the event that the Company does not attain the Earnings Goal for the
applicable fiscal year, the Restricted Stock Units subject to such Earnings Goal that would
otherwise vest on the next Vesting Date will be forfeited. Upon your Termination of Employment
during the Restricted Period for any reason other than death, Disability, termination by the
Company without Cause or by you for Good Reason, the Restricted Stock Units will automatically be
forfeited in full and canceled by the Company as of 11:00 p.m. CT (midnight ET) on the date of such
Termination of Employment.

          (b) Notwithstanding subsection (a) above, if you incur a Termination of Employment during the
Restricted Period as a result of your death or Disability (as defined in your Letter Agreement),
the Performance Vested RSUs will vest in full as of such Termination of Employment.

          (c) Notwithstanding subsection (a) above, if you incur a Termination of Employment during the
Restricted Period as a result of termination by the Company without Cause (as defined in your
Letter Agreement) or termination by you for Good Reason (as defined in your Letter Agreement), the
service requirement applicable to your unvested Performance Vested RSUs shall be deemed to be
satisfied and the Performance Vested RSUs shall remain outstanding subject to vesting based only
on the satisfaction of the applicable Earnings Goal.

          (d) Notwithstanding subsections (a), (b) and (c) above, 2,072 of the RSUs scheduled to vest on
the first anniversary of the Commencement Date and 1,282 of the RSUs scheduled to vest on each of
the second, third and fourth anniversaries of the Commencement

 

 

Date shall vest only, if in addition to the other vesting requirements, the options of your
prior employer scheduled to vest on June 10, 2011 have not vested on such date or prior thereto or
have vested on such date or prior thereto but have been forfeited by you prior to such time as such
options are next thereafter exercisable by you with simultaneous sale of the underlying stock
granted upon exercise under applicable securities laws and your prior employer’s trading
restrictions.

          (e) Restricted Stock Units will be converted into shares of Company common stock and delivered
to you as soon as administratively practicable after the applicable Vesting Date (each a
“Distribution Date”), but in no event later than two and one-half months following the year in
which the Restricted Stock Units vest. On each Distribution Date, the Company will issue to you a
number of Shares equal to the number of your vested Restricted Stock Units (including any dividend
equivalents described in Section 5, below).

     3. Change of Control. In the event of a Change of Control, subject to adjustments under
Section 3.4 of the Plan, your unvested Restricted Stock Units shall vest on the Vesting Dates set
forth in Section 2(a) subject to your continued employment through the applicable Vesting Date but
without regard to the achievement of the applicable Earnings Goal (the Earnings Goal to be deemed
satisfied with respect to future tranches), subject to earlier vesting in full upon a termination
of your employment in contemplation of (but at the time of the Change of Control) or following a
Change of Control by the Company without Cause or by you for Good Reason, in each case, without
regard to the achievement of the applicable Earnings Goal. Notwithstanding the foregoing, for the
avoidance of doubt, if a Change of Control constitutes a change in the ownership of the Company
within the meaning of Reg. Section 409A-3(i)(5)(v) or a change in ownership of a substantial
portion of the Company’s assets within the meaning of Regs. Section 409A-3(i)(5)(vii), then
payments in respect of the Restricted Stock Units related to such Change of Control may be paid
prior to the Distribution Date to the extent permitted in accordance with Regs. Section
409A-3(i)(5)(iv).

     4. Dividend Equivalents. You shall receive dividend equivalents on the Restricted Stock Units
generally in the same manner and at the same time as if each Restricted Stock Unit were a Share.
These dividend equivalents will be credited to you in the form of additional Restricted Stock Units
in respect of a number of Shares having a Fair Market Value equal to the fair market value of the
corresponding dividend. The additional Restricted Stock Units will be subject to the terms of this
Agreement (it being understood that, for the avoidance of doubt, dividend equivalents on vested but
unpaid Restricted Stock Units shall be vested upon grant and settled at the same time and in the
same form as the Restricted Stock Units to which they relate).

     5. Withholding Taxes. You are responsible to promptly pay any Social Security and Medicare
taxes (together, “FICA”) due upon vesting of the Restricted Stock Units, and any Federal, State,
and local taxes due upon distribution of the Shares. The Company and its Subsidiaries are
authorized to deduct from any payment to you any such taxes required to be withheld. As described
in Section 15.4 of the Plan, you may elect to have the Company withhold a portion of the Shares
issued upon settlement of the Restricted Stock Units to satisfy all or part of the minimum
withholding tax requirements. You may also elect, at the time you vest in the Restricted Stock
Units, to pay your FICA liability due with respect to those Restricted Stock Units out of those
units. If you choose to do so, the Company will reduce the number of your

2

 

vested Restricted Stock Units accordingly. The amount that is applied to pay FICA will be
subject to Federal, State, and local taxes.

     6. Limitation of Rights. Except as set forth in the Agreement or the Plan, until the Shares
are issued to you in settlement of your Restricted Stock Units, you do not have any right in, or
with respect to, any Shares (including any voting rights) by reason of this Agreement. Further,
you may not transfer or assign your rights under the Agreement and you do not have any rights in
the Company’s assets that are superior to a general, unsecured creditor of the Company by reason of
this Agreement. Notwithstanding anything in the Plan or otherwise to the contrary, any Shares
issued in respect of the Restricted Stock Units shall not be subject to the Company’s Stock
Ownership Requirements or “clawback” provisions, in each case, except as otherwise required by
applicable law.

     7. No Employment Contract. Nothing contained in the Plan or Agreement creates any right to
your continued employment or otherwise affects your status as an employee at will. You hereby
acknowledge that the Company and you each have the right to terminate your employment at any time
for any reason or for no reason at all, subject to the terms hereof and to the Letter Agreement.

     8. Section 409A of the Code. It is intended that the Restricted Stock Units comply with, be
exempt from or not be subject to Section 409A of the Code. The Company may, in consultation with
you, amend this Agreement as it deems necessary to comply with the requirements of Section 409A of
the Code, so as to avoid the imposition of taxes and penalties on you pursuant to Section 409A of
the Code; provided, however, that the Company shall accomplish such amendments in a manner that
preserves your intended benefits under the Agreement to the greatest extent possible and without
any diminution in the value of the payments to you.

     9. Agreement. You agree to be bound by the terms and conditions of this Agreement and the
Plan. Your signature is not required in order to make this Agreement effective.

     Accompanying this Agreement are instructions for accessing the Plan and the Plan Summary
(prospectus) from the Plan 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

3

 

EXHIBIT B

RESTRICTED STOCK UNIT AWARD AGREEMENT

2008 STOCK AWARD AND INCENTIVE PLAN

     1. Restricted Stock Units Award. As of June 13, 2011, Medtronic, Inc., a Minnesota
corporation (the “Company”), hereby awards to you 248,580 Restricted Stock Units. The Restricted
Stock Units represent the right to receive shares of common stock of the Company (the “Shares”),
subject to the restrictions, limitations, and conditions contained in this Restricted Stock Unit
Award Agreement (the “Agreement”) and in the Medtronic, Inc. 2008 Stock Award and Incentive Plan
(the “Plan”). Unless otherwise defined in the Agreement, a capitalized term in the Agreement will
have the same meaning as in the Plan or in your Employment Letter dated May 11, 2011 (the
“Employment Letter”). In the event of any inconsistency between the terms of the Agreement and the
Plan, the terms of this Agreement will govern.

     2. Vesting and Distribution.

          (a) The Restricted Stock Units will cliff vest on the fourth anniversary of the Commencement
Date (as defined in your Letter Agreement), provided that you have not incurred a Termination of
Employment during the period beginning on the Commencement Date and ending on the fourth
anniversary of the Commencement Date (the “Restricted Period”). Notwithstanding the preceding
sentence, if you incur a Termination of Employment during the Restricted Period as a result of your
death, Disability (as defined in your Letter Agreement), termination by the Company without Cause
(as defined in your Letter Agreement) or termination by you for Good Reason (as defined in your
Letter Agreement), the Restricted Stock Units will vest in full as of such Termination of
Employment. Upon your Termination of Employment during the Restricted Period for any reason other
than death, Disability, termination by the Company without Cause or by you for Good Reason, the
Restricted Stock Units will automatically be forfeited in full and canceled by the Company as of
11:00 p.m. CT (midnight ET) on the date of such Termination of Employment.

          (b) Vested Restricted Stock Units will be delivered to you on the first business day following
the one-year anniversary of your Termination of Employment (the “Distribution Date”). On the
Distribution Date, the Company will issue to you a number of Shares equal to the number of your
vested Restricted Stock Units (including any dividend equivalents described in Section 5, below).

     3. Change of Control. In the event of a Change of Control, subject to adjustments under
Section 3.4 of the Plan, the Restricted Stock Units shall remain subject to Section 2 hereof.
Notwithstanding the foregoing, for the avoidance of doubt, if a Change of Control constitutes a
change in the ownership of the Company within the meaning of Reg. Section 409A-3(i)(5)(v) or a
change in ownership of a substantial portion of the Company’s assets within the meaning of Regs.
Section 409A-3(i)(5)(vii), then payments in respect of the Restricted Stock Units related to such
Change of Control may be paid prior to the Distribution Date to the extent permitted in accordance
with Regs. Section 409A-3(i)(5)(iv).

     4. Dividend Equivalents. You shall receive dividend equivalents on the Restricted Stock Units
generally in the same manner and at the same time as if each Restricted Stock Unit

 

were a Share. These dividend equivalents will be credited to you in the form of additional
Restricted Stock Units in respect of a number of Shares having a Fair Market Value equal to the
fair market value of the corresponding dividend. The additional Restricted Stock Units will be
subject to the terms of this Agreement (it being understood that, for the avoidance of doubt,
dividend equivalents on vested but unpaid Restricted Stock Units shall be vested upon grant and
settled at the same time and in the same form as the Restricted Stock Units to which they relate).

     5. Withholding Taxes. You are responsible to promptly pay any Social Security and Medicare
taxes (together, “FICA”) due upon vesting of the Restricted Stock Units, and any Federal, State,
and local taxes due upon distribution of the Shares. The Company and its Subsidiaries are
authorized to deduct from any payment to you any such taxes required to be withheld. As described
in Section 15.4 of the Plan, you may elect to have the Company withhold a portion of the Shares
issued upon settlement of the Restricted Stock Units to satisfy all or part of the minimum
withholding tax requirements. You may also elect, at the time you vest in the Restricted Stock
Units, to pay your FICA liability due with respect to those Restricted Stock Units out of those
units. If you choose to do so, the Company will reduce the number of your vested Restricted Stock
Units accordingly. The amount that is applied to pay FICA will be subject to Federal, State, and
local taxes.

     6. Limitation of Rights. Except as set forth in the Agreement or the Plan, until the Shares
are issued to you in settlement of your Restricted Stock Units, you do not have any right in, or
with respect to, any Shares (including any voting rights) by reason of this Agreement. Further,
you may not transfer or assign your rights under the Agreement and you do not have any rights in
the Company’s assets that are superior to a general, unsecured creditor of the Company by reason of
this Agreement. Notwithstanding anything in the Plan or otherwise to the contrary, any Shares
issued in respect of the Restricted Stock Units shall not be subject to the Company’s Stock
Ownership Requirements or “clawback” provisions, in each case, except as otherwise required by
applicable law.

     7. No Employment Contract. Nothing contained in the Plan or Agreement creates any right to
your continued employment or otherwise affects your status as an employee at will. You hereby
acknowledge that the Company and you each have the right to terminate your employment at any time
for any reason or for no reason at all, subject to the terms hereof and to the Letter Agreement.

     8. Section 409A of the Code. It is intended that the Restricted Stock Units comply with, be
exempt from or not be subject to Section 409A of the Code. The Company may, in consultation with
you, amend this Agreement as it deems necessary to comply with the requirements of Section 409A of
the Code, so as to avoid the imposition of taxes and penalties on you pursuant to Section 409A of
the Code; provided, however, that the Company shall accomplish such amendments in a manner that
preserves your intended benefits under the Agreement to the greatest extent possible and without
any diminution in the value of the payments to you.

     9. Agreement. You agree to be bound by the terms and conditions of this Agreement and the
Plan. Your signature is not required in order to make this Agreement effective.

2

 

     Accompanying this Agreement are instructions for accessing the Plan and the Plan Summary
(prospectus) from the Plan 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

3

 

Exhibit D

GENERAL RELEASE

          I, Omar Ishrak, on behalf of myself and my heirs, executors, administrators and assigns, in
consideration of the compensation and benefits provided to me by Medtronic, Inc. pursuant to
Section 12(d) of my Employment Letter dated May 11, 2011 fully and completely release and forever
discharge Medtronic, Inc., its officers, directors, shareholders, board members, representatives,
divisions, parents, subsidiaries, successors and assigns, employees and agents (collectively,
“Medtronic”), of and from any all claims, complaints, causes of action, demands, sums of money,
covenants, contracts, agreements, promises, liabilities, damages or judgments, whatsoever in law or
in equity, which I, ever had, now have against Medtronic or which I, hereafter, can, shall, or may
have for or by reason of or in connection with any actions, conduct, decisions, behavior, events,
transactions, omissions or accounts, occurring to the date of this General Release.

          I acknowledge that this General Release specifically covers, but is not limited to, any and
all claims, complaints, causes of action or demands (including related attorneys’ fees and costs)
which I have or may have against Medtronic relating in any way to the terms, conditions and
circumstances of my employment and the termination thereof, or of my service as an officer or
director of Medtronic; whether based on statutory or common law claims for wrongful discharge,
breach of contract, breach of any express or implied promise, misrepresentation, fraud,
retaliation, breach of public policy, infliction of emotional distress, defamation, promissory
estoppels, invasion of privacy, or employment discrimination, including but not limited to claims
under the Federal Age Discrimination in Employment Act (29 U.S.C. Sec. 621, et seq.), the Older
Workers Benefit Protection Act (“OWBPA”), the Family Medical Leave Act, Fair Labor Standards Act,
Employee Retirement Income Security Act, the Sarbanes-Oxley Act of 2002 and state statutes, if any,
addressing the same subject matters or any other theory or basis, whether legal or equitable.

          Notwithstanding any provision of this General Release to the contrary, nothing in this General
Release shall be interpreted to affect or impair any right that I have to salary or benefits or
other rights under my Employment Letter (once this General Release becomes effective), any right to
any vested benefit under any Medtronic employee benefit plan or program, or any right to
indemnification pursuant to Medtronic’s bylaws and certificate of incorporation or applicable law,
any claims that cannot be waived by law, my rights to enforce this Release, my right of
indemnification, advancement of legal fees, and/or directors and officers coverage pursuant my
Employment Agreement, the Medtronic Indemnification Trust Agreement (as amended from time to time)
and/or as provided by, and in accordance with the terms of, the Company’s by-laws, plans or any
Company insurance policy providing such coverage, as any of such may be amended from time to time,
or otherwise.

          I acknowledge receipt of this General Release as notice in writing from Medtronic advising me
to consult with an attorney prior to executing this General Release and further acknowledge that I
have been provided the right to consider this General Release for a period of at least twenty-one
(21) days prior to executing same. I acknowledge that I have fifteen (15) days from the date of
execution of this General Release to revoke same, and that this entire General Release shall not be
effective or enforceable in whole or in part until the revocation period has expired. If I choose
to revoke this General Release within fifteen (15) days of execution, such

 

revocation shall apply to the entire General Release, and it is understood and agreed that
such revocation shall render this entire General Release null and void. To be effective, the
revocation must be in writing and delivered by hand or mailed to _____________________, General
Counsel, Medtronic, Inc., 710 Medtronic Parkway, MS: LC400, Minneapolis, MN 55432. If mailed, the
revocation must be (a) postmarked within the fifteen-day revocation period; (b) properly addressed
to _____________________; and (c) sent by certified mail, return receipt requested. If I accept
this General Release, the signed General Release should be postmarked or returned by the fifteenth
(15th) day following my execution hereof to _____________________ at the address stated herein.

          This General Release will be governed by and construed in accordance with the laws of the
State of Minnesota. If any provision in this General Release is held invalid or unenforceable for
any reason, the remaining provisions shall be construed as if the invalid or unenforceable
provision had not been included.

          IN WITNESS WHEREOF, I have executed this General Release on this ___ day of ____________,
20_____.

____________________________

Omar Ishrak

2

 

EXHIBIT E

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

     CHANGE OF CONTROL EMPLOYMENT AGREEMENT by and between Medtronic, Inc., a Minnesota corporation (the
“Company”), and Omar Ishrak (the “Executive”), dated as of the 13th day of June, 2011.

     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 (i) the Executive’s employment with the Company is terminated by the
Company or the Executive terminates employment because the Executive ceases to be an officer of the
Company, (ii) the Date of Termination occurs prior to the date on which a Change of Control occurs,
and (iii) it is reasonably demonstrated by the Executive that such termination of employment or
cessation of status as an officer (A) was at the request of a third party who has taken steps
reasonably calculated to effect the Change of Control or (B) otherwise arose in connection with or
anticipation of the Change of Control, then for all purposes of this Agreement the “Effective Date”
shall mean the date immediately prior to such Date of Termination.

          (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

2

 

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.

3

 

          (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

4

 

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.

5

 

               (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.

               (i) 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

6

 

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

7

 

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.
Notwithstanding the foregoing, in no event shall the Date of Termination occur until the Executive
experiences a “separation from service” within the meaning of Section 409A of the Code, and 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, (2) the Executive’s business expenses business expenses that are
reimbursable pursuant to Section 4(b)(vi) but have not been reimbursed by the
Company as of the Date of Termination, (3) the Executive’s Annual Bonus for the
fiscal year immediately preceding the fiscal year in which the Date of Termination
occurs, if such bonus has been determined but not paid as of the Date of
Termination, and (4) any accrued vacation pay, in each case, to the extent not
theretofore paid (the sum of the amounts described in subclauses (1) through (4),
the “Accrued Obligations”);

8

 

               (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 provided, further, that any amount otherwise calculated under this
Section 6(a)(ii) and payable under the Retirement Plan will instead be paid under 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 access to health care at full COBRA rates and life insurance benefits to the
Executive and/or the Executive’s family at least equal (and in the case of life insurance
benefits at the same after-tax cost), to the Executive and/or the Executive’s family, 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 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

9

 

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;

               (iv) an amount equal to the product of (A) thirty six (36) and (B) the monthly premium
in effect from time to time for coverage provided to former employees of the Company under
Section 4980B of the Code and the regulations thereunder with respect to the level of
coverage in effect for the Executive and his eligible dependents at the Date of Termination;
and

               (v) 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), 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.

10

 

          (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

11

 

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. Reduction of Payments in Certain Circumstances.

          (a) Anything in this Agreement to the contrary notwithstanding, in the event
PricewaterhouseCoopers or such other nationally recognized certified public accounting firm as may
be designated by the Company (the “Accounting Firm”) shall determine that receipt of all payments
or distributions by the Company or the affiliated companies in the nature of compensation to or for
the Executive’s benefit, whether paid or payable pursuant to this Agreement or otherwise (a
“Payment”) would subject the Executive to the excise tax under Section 4999 of the Code, the
Accounting Firm shall determine whether to reduce any of the Payments paid or payable pursuant to
this Agreement (the “Agreement Payments”) to the Reduced Amount (as defined below). The Agreement
Payments shall be reduced to the Reduced Amount only if the Accounting Firm determines that the
Executive would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if
the Executive’s Agreement Payments were reduced to the Reduced Amount. If the Accounting Firm
determines that the Executive would not have a greater Net After-Tax Receipt of aggregate Payments
if the Executive’s Agreement Payments were so reduced, the Executive shall receive all Agreement

12

 

Payments to which the Executive is entitled under this Agreement. For purposes of this
Section 9, (i) “Reduced Amount” shall mean the greatest amount of Agreement Payments that can be
paid that would not result in the imposition of the excise tax under Section 4999 of the Code if
the Accounting Firm determines to reduce Agreement Payments pursuant to Section 9(a); and (ii) “Net
After-Tax Receipt” shall mean the present value (as determined in accordance with Sections
280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on the
Executive with respect thereto under Sections 1 and 4999 of the Code and under applicable state and
local laws, determined by applying the highest marginal rate under Section 1 of the Code and under
state and local laws which applied to the Executive’s taxable income for the immediately preceding
taxable year, or such other rate(s) as the Accounting Firm determined to be likely to apply to the
Executive in the relevant tax year(s).

          (b) If the Accounting Firm determines that aggregate Agreement Payments should be reduced to
the Reduced Amount, the Company shall promptly give the Executive notice to that effect and a copy
of the detailed calculation thereof. All determinations made by the Accounting Firm under this
Section 9 shall be binding upon the Company and the Executive and shall be made as soon as
reasonably practicable and in no event later than fifteen (15) days following the Date of
Termination. For purposes of reducing the Agreement Payments to the Reduced Amount, only amounts
payable under this Agreement (and no other Payments) shall be reduced. The reduction of the
amounts payable hereunder, if applicable, shall be made by reducing the payments and benefits under
the following sections in the following order: (i) Section 6(a)(1)(C), (ii) Section 6(a)(1)(B),
(iii) Section 6(a)(iv) and (iv) Section 6(a)(ii). All fees and expenses of the Accounting Firm
shall be borne solely by the Company.

          (c) 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 amounts will
have been paid or distributed by the Company to or for the benefit of the Executive pursuant to
this Agreement which should not have been so paid or distributed (“Overpayment”) or that additional
amounts which will have not been paid or distributed by the Company to or for the benefit of the
Executive pursuant to this Agreement could have been so paid or distributed (“Underpayment”), in
each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the
Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against
either the Company or the Executive which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, the Executive shall, except to the extent
that it would cause a violation of the Sarbanes—Oxley Act of 2002, pay any such Overpayment to the
Company together with interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code; provided, however, that no amount shall be payable by the Executive to the Company if and
to the extent such payment would not either reduce the amount on which the Executive is subject to
tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event
that the Accounting Firm, based upon controlling precedent or substantial authority, determines
that an Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event
later than 60 days following the date on which the Underpayment is determined) by the Company to or
for the benefit of the Executive together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code.

13

 

     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

14

 

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) The Agreement is intended to comply with the requirements of Section 409A of the Code or
an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A
of the Code, shall in all respects be administered in accordance with Section 409A of the Code.
Each payment under this Agreement shall be treated as a separate payment for purposes of Section
409A of the Code. In no event may the Executive, directly or indirectly, designate the calendar
year of any payment to be made under this Agreement. If the Executive dies following the Date of
Termination and prior to the payment of any amounts delayed on account of Section 409A of the Code,
such amounts shall be paid to the personal representative of the Executive’s estate within 30 days
after the date of the Executive’s death. All reimbursements and in-kind benefits provided under
this Agreement that constitute deferred compensation within the meaning of Section 409A of the Code
shall be made or provided in accordance with the requirements of Section 409A of the Code,
including, without limitation, that (i) in no event shall reimbursements by the Company under this
Agreement be made later than the end of the calendar year next following the calendar year in which
the applicable fees and expenses were incurred, 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; (ii) the amount of
in-

15

 

kind benefits that the Company is obligated to pay or provide in any given calendar year shall not affect
the in-kind benefits that the Company is obligated to pay or provide in any other calendar year;
(iii) the Executive’s right to have the Company pay or provide such reimbursements and in-kind
benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the
Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later
than the Executive’s remaining lifetime (or if longer, through the 20th anniversary of the
Effective Date). Prior to the Effective Date but within the time period permitted by the
applicable Treasury Regulations (or such later time as may be permitted under Section 409A or any
IRS or Department of Treasury rules or other guidance issued thereunder), 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.

16

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	MEDTRONIC, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]