Convertible Bond Hedge Transaction

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

Exhibit 10.27

April 12, 2006

To:

Medtronic, Inc.

710 Medtronic Parkway

Minneapolis, Minnesota 55432

Attn: Treasurer

Telephone: (763) 505-2697

Facsimile: (763) 505-2700

With a copy to:

Attn: General Counsel

Facsimile: (763) 505-2980

From:

[_________________]

[_________________]

[_________________]

Attn: [_________________]

Telephone: [_________________]

Facsimile: [_________________]

Re:

Convertible Bond Hedge Transaction

(__________ Reference Number:________________)

General Terms:

Trade Date:

April 12, 2006

Effective Date:

April 18, 2006

Option Style:

Modified American, as described under “Procedures for Exercise” below.

Option Type:

Call

Seller:

Dealer

Buyer:

Counterparty

Shares:

The Common Stock of Counterparty, par value USD 0.10 per share (Ticker Symbol: “MDT”).

Number of Options:

The number of Convertible Debentures in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible Debentures; provided that the Number of Options shall be automatically increased as of the date of exercise by Banc of America Securities LLC and Morgan Stanley & Co. Incorporated, as representatives of the Initial Purchasers (as defined in the Purchase Agreement), of their option pursuant to Section 4 of the Purchase Agreement dated as of April 12, 2006 between Counterparty and Banc of America Securities LLC and Morgan Stanley & Co. Incorporated as representatives of the Initial Purchasers thereto (the “ Purchase Agreement ”) by the number of Convertible Debentures in denominations of USD1,000 principal amount issued pursuant to such exercise (such Convertible Debentures, the “ Additional Convertible Debentures ”). For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder.

Option Entitlement:

As of any date, a number of Shares per Option equal to the Conversion Rate (as defined in the Indenture, but without regard to any adjustments to the Conversion Rate pursuant to Section 10.13 of the Indenture).

Strike Price:

As of any date, an amount in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards), equal to USD1,000 divided by the Option Entitlement.

Applicable Percentage:

[____]%

Number of Shares:

The product of the Number of Options, the Option

Entitlement and the Applicable Percentage.

Premium:

USD [__________] (Premium per Option USD [___________]); provided that if the Number of Options is increased pursuant to the proviso to the definition of “Number of Options” above, an additional Premium equal to the product of the number of Options by which the Number of Options is so increased and the Premium per Option shall be paid on the Additional Premium Payment Date.

Premium Payment Date:

The Effective Date

Additional Premium Payment Date:

The closing date for the purchase and sale of the Additional Convertible Debentures.

Exchange:

New York Stock Exchange

Related Exchange:

All Exchanges

Procedures for Exercise:

Potential Exercise Dates:

Each Conversion Date.

Conversion Date:

Each “Conversion Date”, as defined in the Indenture, of Convertible Debentures with respect to which Counterparty does not make the direction described in Section 10.25 of the Indenture (such Convertible Debentures, the “ Relevant Convertible Debentures ” for such Conversion Date).

Required Exercise on

Conversion Dates:

On each Conversion Date for Relevant Convertible Debentures, a number of Options equal to the number of Relevant Convertible Debentures in denominations of USD1,000 principal amount submitted for conversion on such Conversion Date in accordance with the terms of the Indenture shall be automatically exercised, subject to “Notice of Exercise” below.

Expiration Date:

April 15, 2013

Multiple Exercise:

Applicable, as provided above under “Required Exercise on Conversion Dates”.

Minimum Number of Options:

Zero

Maximum Number of Options:

Number of Options

Integral Multiple:

Not Applicable

Automatic Exercise:

As provided above under “Required Exercise on Conversion Dates”.

Notice of Exercise:

Notwithstanding anything to the contrary in the Equity Definitions, in order to exercise any Options, Counterparty must notify Dealer in writing prior to 5:00 PM, New York City time, on the Exchange Business Day prior to the first Exchange Business Day of the “Conversion Reference Period”, as defined in the Indenture, relating to the Relevant Convertible Debentures converted on the Conversion Date relating to the relevant Exercise Date (the “ Notice Deadline ”) of (i) the number of Options

being exercised on such Exercise Date, (ii) the scheduled settlement date under the Indenture for the Relevant Convertible Debentures converted on the Conversion Date corresponding to such Exercise Date and (iii) the applicable Cash Percentage (as defined in the Indenture); provided that, notwithstanding the foregoing, such notice (and the related exercise of Options) shall be effective if given after the Notice Deadline but prior to 5:00 PM New York City time, on the fifth Exchange Business Day of such “Conversion Reference Period”, in which event the Calculation Agent shall have the right to adjust the Delivery Obligation as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of Dealer not having received such notice prior to the Notice Deadline.

Dealer’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of
Giving Notice:

To:

[__________________]

[__________________]

[__________________]

Attn:

[__________________]

[__________________]

Telephone:

[__________________]

Facsimile:

[__________________]

With a copy to:

Attn:

[__________________]

[__________________]

Telephone:

[__________________]

Facsimile:

[__________________]

Settlement Terms:

Settlement Date:

In respect of an Exercise Date occurring on a Conversion Date, the settlement date for the Shares or cash to be delivered under the Relevant Convertible Debentures under the terms of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the date one Settlement Cycle following the final day of the “Conversion Reference Period”, as defined in the Indenture, or (ii) the Exchange Business Day immediately following the date on which Counterparty gives notice to Dealer of such Settlement Date prior to 5:00 PM, New York City time.

Delivery Obligation:

In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above, in respect of an Exercise Date

occurring on a Conversion Date, Dealer will deliver to Counterparty, on the related Settlement Date, the product of the Applicable Percentage and a number of Shares and/or amount of cash in USD equal to the aggregate number of Shares or amount of cash, as the case may be, that Counterparty is obligated to deliver to the holder(s) of the Relevant Convertible Debentures converted on such Conversion Date pursuant to Section 10.01(b) of the Indenture (the “ Convertible Obligation ”); provided that such obligation shall be determined excluding any Shares or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Debentures as a result of any adjustments to the Conversion Rate pursuant to Section 10.13 of the Indenture. For the avoidance of doubt, if the “Conversion Value”, as defined in the Indenture, is less than or equal to USD1,000, Dealer will have no delivery obligation hereunder.

Notice of Delivery Obligation:

No later than the Exchange Business Day immediately following the last day of the “Conversion Reference Period”, as defined in the Indenture, Counterparty shall give Dealer notice of the final number of shares and/or the amount of cash comprising the Convertible Obligation (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise, as set forth above, in any way).

Other Applicable Provisions:

To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Net Share Settled”; and provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the issuer of the Shares. “Net Share Settled” in relation to any Option means that Dealer is obligated to deliver Shares hereunder.

Restricted Certificated Shares:

Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares in certificated form representing the Number of Shares to be Delivered to Counterparty in lieu of delivery through the Clearance System.

Adjustments:

Method of Adjustment:

Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence of any event or

condition set forth in Section 10.06, 10.07, 10.08 or 10.09 of the Indenture, the Calculation Agent shall make the corresponding adjustment in respect of any one or more of the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment of the Transaction, to the extent an analogous adjustment is made under the Indenture.

Extraordinary Events:

Merger Events:

Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 10.12 of the Indenture.

Tender Offer:

Applicable. Notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 10.10 of the Indenture.

Consequences of Merger Events and

Tender Offers:

Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or Tender Offer, the Calculation Agent shall make the corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares, the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction, to the extent an analogous adjustment is made under the Indenture; provided that such adjustment shall be made without regard to any adjustment to the Conversion Rate for the issuance of additional shares as set forth in Section 10.13 of the Indenture; and provided further that the Calculation Agent may limit or alter any such adjustment referenced in this paragraph so that the fair value of the Transaction to the Dealer is not reduced as a result of such adjustment.

Nationalization, Insolvency

or Delisting:

Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market System (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:

(a)

Change in Law:

Not Applicable

(b)

Failure to Deliver:

Applicable

(c)

Insolvency Filing:

Applicable

(d)

Hedging Disruption:

Not Applicable

(e)

Increased Cost of Hedging:

Not Applicable

Hedging Party:

For all applicable Additional Disruption Events, Dealer

Determining Party:

For all applicable Additional Disruption Events, Dealer

Non-Reliance:

Applicable

Agreements and Acknowledgments

Regarding Hedging Activities:

Applicable

Additional Acknowledgments:

Applicable

3. Calculation Agent :

Dealer. The Calculation Agent shall deliver, within five Exchange Business Days of a written request by either party, a written explanation of any calculation or adjustment made by it, and including, where applicable, the methodology and data applied.

4. Account Details :

Dealer Payment Instructions:

[______________]

Bank Routing:

[______________]

Account Name:

[______________]

Account No. :

[______________]

Counterparty Payment Instructions:

To be provided by Counterparty.

5. Offices :

The Office of Dealer for the Transaction is:

[__________________]

The Office of Counterparty for the Transaction is:

Medtronic, Inc.

710 Medtronic Parkway

Minneapolis, Minnesota 55432

6. Notices : For purposes of this Confirmation:

(a)

Address for notices or communications to Counterparty:

To:

Medtronic, Inc.

710 Medtronic Parkway

Minneapolis, Minnesota 55432

Attn:

Treasurer

Telephone:

(763) 505-2697

Facsimile:

(763) 505-2700

With a copy to:

Attn:

General Counsel

Facsimile:

(763) 505-2980

(b)

Address for notices or communications to Dealer:

To:

[__________________]

[__________________]

[__________________]

Attn:

[__________________]

Telephone:

[__________________]

Facsimile:

[__________________]

With a copy to:

Attn:

[__________________]

[__________________]

Telephone:

[__________________]

Facsimile:

[__________________]

7. Representations, Warranties and Agreements :

                     (i) On the Trade Date, (A) none of Counterparty and its officers and directors is aware of any material nonpublic information regarding Counterparty or the Shares and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

                     (ii) (A) On the Trade Date, the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act (“ Regulation M ”) and (B) Counterparty shall not engage in any “distribution,” as such term is defined in Regulation M, other than a distribution meeting the requirements of the exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day immediately following the Trade Date.

                     (iii) On the Trade Date, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 of the Exchange Act (“ Rule 10b-18 ”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares, except through Dealer.

                     (iv) Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Dealer is not making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 149 or 150, EITF Issue No. 00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

                     (v) Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

          (vi) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.

          (vii) Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act.

          (viii) Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

          (ix) On the Trade Date (A) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities, (B) the capital of Counterparty is adequate to conduct the business of Counterparty and (C) Counterparty has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

          (x) The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.

          (xi) Counterparty understands that no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency.