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Exhibit 10.7
Terms of Non-Employee Director Compensation
Under the Medtronic, Inc. 2008 Stock Award and Incentive Plan
Each director serving on the Board who is not an employee of the
Company or an Affiliate (each, a "Non-Employee Director") shall be
compensated as provided below and as determined by the Board from
time to time (the terms set forth below shall remain in effect
until modified by the Board or the Compensation Committee of the
Board. Equity compensation awards granted pursuant to this Exhibit
A shall be granted under the Medtronic, Inc. 2008 Stock Award and
Incentive Plan (the "Incentive Plan"). Unless otherwise defined
below, capitalized terms set forth in this Exhibit A shall have the
meaning given to them in the Incentive Plan.
Annual Retainers and Annual Stipends
Each Non-Employee Director shall be paid an annual retainer
equal to $80,000 (the "Annual Retainer"). Any Non-Employee Director
serving as Chair of each of the Compensation, Technology and
Quality and Corporate Governance Committees of the Board shall
receive, in addition to the Annual Retainer, an annual stipend of
$10,000 (the "Annual Stipends").
Any Non-Employee Director serving as Chair of the Audit
Committee of the Board shall receive, in addition to the Annual
Retainer, an annual stipend of $15,000, and any other Non-Employee
Director serving as a member of the Audit Committee shall receive
an Annual Stipend of $5,000 (the "Audit Committee Annual
Stipends").
The Annual Retainer, Annual Stipends and Audit Committee Annual
Stipends shall be paid in cash in two equal installments payable,
respectively, within 10 days following the end of the
Company’s second fiscal quarter and within 10 days following
the end of the Company’s fiscal year. Notwithstanding the
foregoing, the amount payable in respect of the Annual Retainer,
Annual Stipends and Audit Committee Annual Stipends shall be
reduced by 25% for each Non-Employee Director who fails to attend
at least 75% of the total meetings of the Board and Committees of
the Board on which such director served during the fiscal year,
such reduction to be applied to payments to be made within 10 days
following the end of the Company’s fiscal year.
Special Committee Fees
In addition to the foregoing amounts, each Non-Employee Director
serving on a Special Committee of the Board shall be paid an annual
fee of $10,000 (the "Special Committee Fees"). The Special
Committee Fees shall be paid in cash in two equal installments
payable, respectively, within 10 days following the end of the
Company’s second fiscal quarter and within 10 days following
the end of the Company’s fiscal year.
Annual Option Awards
On the first day of the fiscal year of the Company, each
Non-Employee Director shall be granted a number of Options equal to
the Annual Retainer divided by the Fair Market Value of a Share of
Common Stock (the "Annual Option Award"). If there is an increase
in the Annual Retainer after the Annual Option Award is granted,
each Non-Employee Director shall automatically be granted, as of
the date such increase is approved, a supplemental Annual Option
Award equal to (1) the amount of such increase divided by (2) the
Fair Market Value of a Share of Common Stock.
Initial Option Awards
On the first day of the fiscal quarter immediately following the
fiscal quarter during which a Non-Employee Director first becomes a
director, such Non-Employee Director shall be granted (1) that
number of Options equal to twice the Annual Retainer divided by the
Fair Market Value of a Share of Common Stock and (2) that number of
Options equal to (x) the Annual Retainer divided by the Fair Market
Value of a Share of Common Stock multiplied by (y) a fraction, the
numerator of which is the number of days remaining in the fiscal
year from the date of the Non-Employee Director’s
commencement of service on the Board through the end of such fiscal
year and the denominator of which is 365 (these grants are together
referred to as the "Initial Option Award"). No Non-Employee
Director shall receive more than one Initial Option Award during
his or her lifetime.
The Annual Option Award and Initial Option Award shall be
satisfied with Options granted under the Incentive Plan, and such
Options shall be immediately vested on the date of grant;
provided, however , that in no event shall a Non-Employee
Director initially appointed by the Board be entitled to exercise
a
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