Supplemental Executive Retirement Plan

Exhibit 10.1


MEDTRONIC, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(as restated generally effective January 1, 2008)


TABLE OF CONTENTS


Page


ARTICLE 1

DEFERRED COMPENSATION ACCOUNT

1


Section 1.1

Establishment of Account

1

Section 1.2

Property of Company

2


ARTICLE 2

DEFINITIONS, GENDER, AND NUMBER

2


Section 2.1

Definitions

2

Section 2.2

Gender and Number

6


ARTICLE 3

PARTICIPATION

6


Section 3.1

Who May Participate

6

Section 3.2

Time and Conditions of Participation

7

Section 3.3

Termination and Suspension of Participation

7

Section 3.4

Missing Persons

7

Section 3.5

Relationship to Other Plans

7


ARTICLE 4

RETIREMENT PLAN SUPPLEMENTAL BENEFIT

7


Section 4.1

Calculation of Retirement Plan Supplemental Benefit

7

Section 4.2

Establishment of Nonqualified Retirement Plan Account

8

Section 4.3

Interest Credited to Nonqualified Retirement Plan Account

8

Section 4.4

Payment of Nonqualified Retirement Plan Account

9


ARTICLE 5

DEFINED CONTRIBUTION SUPPLEMENTAL BENEFIT

9


Section 5.1

Nonqualified Defined Contribution Account

9

Section 5.2

Gains Credited to Nonqualified Defined Contribution Account

9

Section 5.3

Payment of Nonqualified Defined Contribution Account

9


ARTICLE 6

PERSONAL INVESTMENT ACCOUNT SUPPLEMENTAL BENEFIT

9


Section 6.1

Calculation of Personal Investment Account Supplemental Benefit

9

Section 6.2

Establishment of Nonqualified Personal Investment Account

10

Section 6.3

Crediting Gains and Losses to Nonqualified Personal Investment Account

10

Section 6.4

Vested Interest in Nonqualified Personal Investment Account

11

Section 6.5

Payment of Nonqualified Personal Investment Account

11


ARTICLE 7

DEATH BENEFITS

11


Section 7.1

Form and time of Payment

11

Section 7.2

Beneficiary

11


ARTICLE 8

CHANGE IN CONTROL PROVISIONS

12


Section 8.1

Application of Article 8

12


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Section 8.2

Payments to and by the Trust

12

Section 8.3

Legal Fees and Expenses

12

Section 8.4

Late Payment and Additional Payment Provisions

12


ARTICLE 9

FUNDING

13


Section 9.1

Source of Benefits

13

Section 9.2

No Claim on Specific Assets

13


ARTICLE 10

ADMINISTRATION

13


Section 10.1

Administration

13

Section 10.2

Powers of Committee

13

Section 10.3

Actions of the Committee

14

Section 10.4

Delegation

14

Section 10.5

Reports and Records

14

Section 10.6

Claims Procedure

14


ARTICLE 11

AMENDMENTS AND TERMINATION

15


Section 11.1

Amendments

15

Section 11.2

Termination

15


ARTICLE 12

MISCELLANEOUS

16


Section 12.1

No Guarantee of Employment

16

Section 12.2

Release

16

Section 12.3

Notices

16

Section 12.4

Nonalienation

16

Section 12.5

Withholding

16

Section 12.6

Captions

16

Section 12.7

Applicable Law

16

Section 12.8

Invalidity of Certain Provisions

16

Section 12.9

No Other Agreements

16

Section 12.10

Incapacity

17

Section 12.11

Electronic Media

17

Section 12.12

Delay of Distributions Upon Certain Events

17

Section 12.13

Acceleration of Distributions Upon Certain Events

18


SCHEDULE A CREDITING RATE

20


ii


MEDTRONIC, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(as restated generally effective January 1, 2008)


Medtronic, Inc. (the " Company" ) previously established the Medtronic, Inc. Executive Nonqualified Supplemental Benefit Plan (the " Plan" ) for the benefit of the Eligible Employees of the Company and certain of its Affiliates, effective May 1, 1986. The Plan was most recently amended and restated, effective May 1, 2005. The Company hereby again restates the Plan, effective January 1, 2008, to comply with the requirements of the final regulations issued under Section 409A of the Code (" Section 409A" ) on April 10, 2007.


This restatement applies to amounts deferred under the Plan on or after January 1, 2008 (the " Restatement Date" ), and to the payment of all amounts deferred under the Plan (whether such amounts were deferred before, on, or after the Restatement Date) that have not yet been distributed as of the Restatement Date. No amount deferred under the Plan is intended to be " grandfathered" under Section 409A.


The purpose of the Plan is to provide Eligible Employees with benefits that supplement those provided under certain of the tax-qualified plans maintained by the Company. More specifically, the Plan is intended to provide certain benefits on a nonqualified basis that are not otherwise provided under the Company' s tax-qualified plans as a result of the application of certain legal limitations on contributions, benefits and includible compensation and as a result of elections made by eligible employees under other plans maintained by the Company.


The Plan is intended to be (and shall be construed and administered as) an employee benefit pension plan under the provisions of ERISA, which is unfunded and maintained primarily for the purpose of providing deferred compensation for Eligible Employees who constitute a select group of management or highly-compensated employees, as described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

The Plan is not intended to be qualified under Section 401(a) of the Code. The Plan, as restated herein, is subject to, and intended to comply with, Section 409A of the Code.


The obligation of the Company to make payments under the Plan constitutes an unsecured (but legally enforceable) promise of the Company to make such payments and no person, including any Participant or Beneficiary, shall have any lien, prior claim or other security interest in any property of the Company as a result of the Plan.


ARTICLE 1.

DEFERRED COMPENSATION ACCOUNT


Section 1.1. Establishment of Account . The Company shall establish one or more Accounts for each Participant which shall be utilized solely as a device to measure and determine the amount of deferred compensation to be paid under the Plan.


Section 1.2. Property of Company . Any amounts set aside for benefits payable under the Plan are the property of the Company, except, and to the extent, provided in the Trust.


ARTICLE 2.

DEFINITIONS, GENDER, AND NUMBER


Section 2.1. Definitions . Whenever used in the Plan, the following words and phrases shall have the meanings set forth below unless the context plainly requires a different meaning, and when a defined meaning is intended, the term is capitalized.


2.1.1. " Account" means a bookkeeping account established by the Company on its books and records to record and determine the benefits payable to a Participant or Beneficiary under the Plan. The Company shall establish a separate Account on behalf of each Participant for:


(a) The benefit the Participant is entitled to receive pursuant to Section 4.2, if any, referred to as the " Nonqualified Retirement Plan Account;"


(b) The benefit the Participant is entitled to receive pursuant to Article 5, if any, referred to as the " Nonqualified Defined Contribution Account;" and


(c) The benefit the Participant is entitled to receive pursuant to Section 6.2, if any, entitled the " Supplemental Personal Investment Account."


The Committee may establish any number of sub-accounts on behalf of a Participant or Beneficiary as the Committee considers necessary or advisable for purposes of maintaining a proper accounting of amounts to be credited under the Plan on behalf of a Participant or Beneficiary.


2.1.2. " Affiliate" or " Affiliates" means the Company and any entity with which the Company would be considered a single employer under Section 414(b) of the Code (employees of controlled group of corporations) and Section 414(c) of the Code (employees of partnerships, proprietorships, etc., under common control).


2.1.3. " Beneficiary" or " Beneficiaries" means the persons or trusts designated by a Participant in writing pursuant to Section 7.2.1 of the Plan as being entitled to receive any benefit payable under the Plan by reason of the death of a Participant, or, in the absence of such designation, the persons specified in Section 7.2.2 of the Plan.


2.1.4. " Board" means the Board of Directors of the Company as constituted at the relevant time.


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2.1.5. " Capital Accumulation Plan" means the Medtronic, Inc. Capital Accumulation Plan Deferral Program, as amended or restated from time to time or any successor thereto.


2.1.6. " Code" means the Internal Revenue Code of 1986, as amended from time to time and any successor statute. References to a Code section shall be deemed to be to that section or to any successor to that section.


2.1.7. " Committee" means the Committee or individual appointed by the Compensation Committee of the Board (or any person or entity designated by the Committee) to administer the Plan pursuant to Section 10.4.


2.1.8. " Company" means Medtronic, Inc. and its successors and assigns, by merger, purchase or otherwise.


2.1.9. " Defined Contribution Supplemental Benefit" means the benefit under the Predecessor Plan that was commonly referred to as the " ESOP restoration benefit." This benefit equals the difference between: (a) the allocation due to Company contributions the Participant would have received under the ESOP prior to May, 1, 2005, but for the Section 401(a)(17) Limitation and Section 415 Limitation; and (b) the actual allocation actually received by the Participant under the ESOP.


2.1.10. " Domestic Relations Order" has the meaning set forth in Section 414(p)(1)(B) of the Code.


2.1.11. " Eligible Employee" means an elected or appointed officer of the Company, or any other key employee of the Company or an Affiliate designated by the Committee, excluding any individual who is neither a United States citizen nor a United States resident. In order to be an Eligible Employee an employee must be a member of a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and rules established by the Committee. The Company may make such projections or estimates as it deems desirable in applying the eligibility requirements, and its determination shall be conclusive.


2.1.12. " ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statute. References to an ERISA section shall be deemed to be to that section or to any successor to that section.


2.1.13. " ESOP" means the Medtronic, Inc. Employee Stock Ownership Plan, as in effect prior to April 30, 2001. (As of April 30, 2001, the ESOP was amended to permit elective deferrals under Section 401(k) of the Code and renamed the Medtronic, Inc. Employee Stock Ownership and Supplemental Retirement Plan. As of May 1, 2005, the Medtronic, Inc. Employee Stock Ownership and Supplemental Retirement Plan was amended and renamed the Medtronic, Inc. Savings and Investment Plan.)


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2.1.14. " Event" means an event of change in control of the Company, as defined in the Trust.


2.1.15. " Option Replacement Plan" means the Medtronic, Inc. Option Replacement Plan, as amended or restated from time to time or any successor thereto.


2.1.16. " Participant" means an Eligible Employee who has commenced participation in the Plan.


2.1.17. " Personal Investment Account" has the same meaning as in the Savings and Investment Plan.


2.1.18. " Personal Investment Account Supplemental Benefit" has the meaning set forth in Article 6.


2.1.19. " Plan" means the " Medtronic, Inc. Supplemental Executive Retirement Plan" as set forth herein and as amended or restated from time to time.


2.1.20. " Plan Year" means the 12-month period commencing May 1 and ending the following April 30.


2.1.21. " Predecessor Plan" means the Plan, as in effect prior to May 1, 2005.


2.1.22. " Restatement Date" means January 1, 2008, the effective date of this restatement.


2.1.23. " Retirement Plan" means the Medtronic, Inc. Retirement Plan, as amended from time to time, and any successor thereto. In general, the Retirement Plan includes a final average pay benefit for individuals employed by the Company or an Affiliate prior to May 1, 2005. Effective May 1, 2005, the Retirement Plan provides a personal pension account benefit for individuals who become employed on or after May 1, 2005. Individuals participating in the Retirement Plan prior to May 1, 2005, may elect a personal pension account benefit in lieu of the final average pay benefit for Plan Years commencing May 1, 2005. Alternatively, an individual otherwise eligible to participate in the Retirement Plan may elect not to participate in the Retirement Plan and receive a contribution to a Personal Investment Account.


2.1.24. " Retirement Plan Supplemental Benefit" has the meaning set forth in Article 4.


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2.1.25. " Savings and Investment Plan" means the Medtronic, Inc. Savings and Investment Plan, as amended from time to time, and any successor thereto. The Savings and Investment Plan includes a salary reduction benefit under Section 401(k) of the Code and a matching contribution benefit under Section 401(m) of the Code. Effective May 1, 2005, the Savings and Investment Plan also includes a Personal Investment Account for those Participants who have elected this retirement benefit option.


2.1.26. " Section 401(a)(17) Limitation" means the limitation on the dollar amount of compensation that may be taken into account under qualified retirement plans under Section 401(a)(17) of the Code, or any successor provision thereto.


2.1.27. " Section 415 Limitation" means the limitation on benefits for qualified defined benefit pension plans and the limitation on allocations for qualified defined contribution plans, which are imposed by Section 415(b) and (c), respectively, of the Code, or any successor provision thereto.


2.1.28. " Separation from Service" or " Separate from Service ," with respect to a Participant, means the Participant' s separation from service with all Affiliates, within the meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations thereunder. Solely for this purpose, a Participant will be considered to have a Separation from Service when the Participant dies, retires, or otherwise has a termination of employment with all Affiliates. The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with the an Affiliate under an applicable statute or by contract. For purposes hereof, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for an Affiliate. If the period of leave exceeds six months and the individual does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than six months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, the Company may substitute a 29-month period of absence for such six-month period.


Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Affiliate and the Participant reasonably anticipated that no further services will be performed after a certain date or that the level of bona fide services the Participant will perform after such date (whether as an employee or independent contractor) will permanently decrease to no more than 40 percent of the average level of bona fide services performed (whether as an employee or independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for less than 36 months).


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Notwithstanding anything in Section 2.1.2 to the contrary, in determining whether a Participant has had a Separation from Service with an Affiliate, an entity' s status as an " Affiliate" shall be determined substituting " 50 percent" for " 80 percent" each place it appears in Section 1563(a)(1),(2), and (3) and in Treasury Regulation Section 1.414(c)-2.


The Company shall have discretion to determine whether a Participant has experienced a Separation from Service in connection with an asset sale transaction entered into by the Company or an Affiliate, provided that such determination conforms to the requirements of Section 409A and the regulations and other guidance issued thereunder, in which case the Company' s determination shall be binding on the Participant.


2.1.29. " Section 409A" means section 409A of the Internal Revenue Code, as amended from time to time and any successor statute.


2.1.30. " Specified Employee" means an employee of an Affiliate who is subject to the six-month delay rule described in Section 409A(2)(B)(i) of the Code. The Company shall establish a written policy for identifying Specified Employees in a manner consistent with Section 409A, which policy may be amended by the Company from time to time as permitted by Section 409A.


2.1.31. " Stock" means the Company' s common stock $.10 par value per share (as such par value may be adjusted from time to time).


2.1.32. " Trust" means the Medtronic, Inc. Compensation Trust Agreement Number One, as amended from time to time.


Section 2.2. Gender and Number . Except as otherwise indicated by context, masculine terminology used herein also includes the feminine ...