Edgar Filing: MEDTRONIC INC

<![CDATA[Definitive Notice & Proxy Statement]]>

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant þ Filed by a Party other than the Registrant ¨

Check the appropriate box:

¨	Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

Medtronic, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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þ	No fee required.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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LOGO

Proxy Statement

AND NOTICE OF 2014 ANNUAL

MEETING OF SHAREHOLDERS

Thursday, August 21, 2014 at 10:30 a.m. CDT

Medtronic’s Mounds View Campus

8200 Coral Sea Street N.E.

Mounds View, Minnesota 55112

LOGO

710 Medtronic Parkway

Minneapolis, Minnesota 55432

Telephone: 763-514-4000

July 11, 2014

Dear Shareholder:

Please join us for our Annual Meeting of Shareholders on Thursday, August 21, 2014, at 10:30 a.m. (Central Daylight Time) at Medtronic’s Mounds View campus, located at 8200 Coral Sea Street N.E., Mounds View, Minnesota 55112.

The accompanying Notice of Annual Meeting of Shareholders and Proxy Statement describe the business to be conducted at the Annual Meeting and details regarding admission to the Annual Meeting. We also will report on matters of current interest to our shareholders.

Your vote is important. Whether you own a few shares or many, it is important that your shares are represented. If you cannot attend the Annual Meeting in person, you may vote your shares by internet or by telephone, or, if this proxy statement was mailed to you, by completing and signing the accompanying proxy card and promptly returning it in the envelope provided.

If you wish to attend the meeting in person, you will need to request an admission ticket in advance. You can request a ticket by following the instructions set forth on page 5 of the proxy statement. If you cannot attend the meeting, you can still listen to the meeting, which will be webcast and available on our Investor Relations website.

Thank you for your continued support of Medtronic, Inc.

Sincerely,

LOGO

Omar Ishrak

Chairman and Chief Executive Officer

Alleviating Pain, Restoring Health, Extending Life

MEDTRONIC, INC.

NOTICE OF ANNUAL MEETING

OF SHAREHOLDERS

TIME

10:30 a.m. (Central Daylight Time) on Thursday, August 21, 2014.

PLACE

Medtronic’s Mounds View Campus

8200 Coral Sea Street N.E.

Mounds View, Minnesota 55112

ITEMS OF BUSINESS

To elect ten directors for a one year term.

To ratify the appointment of PricewaterhouseCoopers LLP as Medtronic’s independent registered public accounting firm for fiscal year 2015.

To approve, in a non-binding advisory vote, named executive officer compensation (a “Say-on-Pay” vote).

To approve the Medtronic, Inc. 2014 Employees Stock Purchase Plan.

To amend and restate the Company’s Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections.

To amend and restate the Company’s Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares.

To amend and restate the Company’s Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares.

To amend and restate the Company’s Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares.

To consider such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

RECORD DATE

You may vote at the Annual Meeting if you were a shareholder of record at the close of business on June 23, 2014.

VOTING BY PROXY

It is important that your shares be represented and voted at the Annual Meeting. Please vote in one of these three ways:

VOTE BY INTERNET, by going to the web address http://www.proxyvote.com and following the instructions (have your proxy card or internet notice in hand when you access the website);

VOTE BY TELEPHONE, by dialing 1-800-690-6903 and following the instructions (have your proxy card or internet notice in hand when you call); or

VOTE BY PROXY CARD, if you received a paper copy of the proxy statement, by completing, signing, dating and mailing the accompanying proxy card in the envelope provided. If you vote by internet or telephone, please do not mail your proxy card.

ANNUAL REPORT

Medtronic’s 2014 Annual Report is available at http://www.proxyvote.com and at http://www.medtronic.com/annualmeeting.

ADMISSION POLICY

If you wish to attend the Annual Meeting and you are a record holder, you must request an admission ticket in advance by following the instructions set forth on page 5 of the proxy statement. Shareholders may obtain directions to the Annual Meeting at http://www.medtronic.com/annualmeeting.

By Order of the Board of Directors,

LOGO

Bradley E. Lerman

Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to

Be Held on August 21, 2014. The Proxy Statement, Notice of Annual Meeting and 2014 Annual

Report to Shareholders are available at http://www.medtronic.com/annualmeeting.

TABLE OF CONTENTS


	Page
Proxy Summary General Information About the Meeting and Voting		1
Cautionary Note Regarding Forward-Looking Statements Proposal 1 — Election of Directors		6 7
Directors and Nominees		7
Director Independence		12
Related Transactions and Other Matters		14
Governance of Medtronic		15
Our Corporate Governance Principles		15
Lead Director and Chairman; Executive Sessions		15
Board Role in Risk Oversight		16
Committees of the Board and Meetings		16
Director Compensation		23
Complaint Procedure; Communications with Directors		24
Our Codes of Conduct		25
Share Ownership Information		26
Compensation Discussion and Analysis (CD&A)		28
Overview		28
CD&A Executive Summary		28
CD&A Detailed Information		35
Compensation Committee Report		48
Executive Compensation		49
2014 Summary Compensation Table		49
2014 Grants of Plan-Based Awards		52
2014 Outstanding Equity Awards at Fiscal Year End		54
2014 Option Exercises and Stock Vested		56
2014 Pension Benefits		57
2014 Nonqualified Deferred Compensation		59
Potential Payments Upon Termination or Change of Control		62
Equity Compensation Plan Information		65
Report of the Audit Committee		66
Audit and Non-Audit Fees		67
Proposal 2 — Ratification of Selection of Independent Registered Public Accounting Firm		67
Proposal 3 — Advisory Resolution to Approve Named Executive Officer Compensation (“Say-on-Pay”)		68
Proposal 4 — To approve the Medtronic, Inc. 2014 Employees Stock Purchase Plan		69
Proposal 5 — To amend and restate the Company’s Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections		73
Proposal 6 — To amend and restate the Company’s Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares		75
Proposal 7 — To amend and restate the Company’s Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares		76
Proposal 8 — To amend and restate the Company’s Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares		77
Other Information		79
Expenses of Solicitation		79
Shareholder Proposals and Director Nominations		79
Delivery of Documents to Shareholders Sharing an Address		79
Other		80
Appendix A — Medtronic, Inc. 2014 Employees Stock Purchase Plan		A-1
Appendix B — Amended and Restated Articles of Incorporation of Medtronic, Inc.		B-1

PROXY SUMMARY

This summary highlights information described in more detail elsewhere in this proxy statement. It does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

2014 Annual Meeting of Shareholders


Date and Time:		Thursday, August 21, 2014, at 10:30 a.m. (Central Daylight Time)

Place:		Medtronic’s Mounds View Campus

		8200 Coral Sea Street N.E.

		Mounds View, Minnesota 55112

Commence Mail Date:		July 11, 2014

Record Date:		June 23, 2014

Advance Voting Methods and Deadlines


Method	Instruction	Deadline
Internet	• Go to http://www.proxyvote.com and follow the instructions (have your proxy card or internet notice in hand when you access the website)	Internet and telephone voting are available 24 hours a day, seven days a week up to these deadlines: • Shares Held Through the Medtronic Puerto Rico Employees’ Savings and Investment Plan – 11:59 p.m., Eastern Daylight Time, on August 18, 2014 • Registered Shareholders or Beneficial Owners – 11:59 p.m., Eastern Daylight Time, on August 20, 2014
Telephone	• Dial 1-800-690-6903 and following the instructions (have your proxy card or internet notice in hand when you call)
Mail	• Mark your selections on the enclosed proxy card • Date and sign your name exactly as it appears on proxy card • Promptly mail the proxy card in the enclosed postage-paid envelope	Return promptly to ensure it is received before the date of the Annual Meeting

Questions and Answers About Attending our Annual Meeting and Voting

We encourage you to review the questions and answers about our annual meeting and voting beginning on page 1 for answers to common questions on the rules and procedures surrounding the proxy and annual meeting process, as well as the business to be conducted at our Annual Meeting. If you plan to attend the Annual Meeting in person, we direct your attention specifically to the information following the question “How do I gain admission to the meeting?” beginning on page 5. If you wish to attend the Annual Meeting, you must request an admission ticket in advance. Please note that seating is limited and requests for tickets will be issued on a first-come, first-served basis.

Your vote is important! Please cast your vote and play a part in the future of Medtronic.

Voting Matters and Board Recommendations


Proposal		Board Recommendation	For More Information
Proposal 1 —	To elect ten directors for a one year term	“FOR” all nominees	Page 7
Proposal 2 —	To ratify the appointment of PricewaterhouseCoopers LLP as Medtronic’s independent registered public accounting firm for fiscal year 2015	“FOR”	Page 67
Proposal 3 —	To approve, in a non-binding advisory vote, named executive officer compensation (a “Say-on-Pay” vote)	“FOR”	Page 68
Proposal 4 —	To approve the Medtronic, Inc. 2014 Employees Stock Purchase Plan	“FOR”	Page 69
Proposal 5 —	To amend and restate the Company’s Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections	“FOR”	Page 73
Proposal 6 —	To amend and restate the Company’s Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares	“FOR”	Page 75
Proposal 7 —	To amend and restate the Company’s Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares	“FOR”	Page 76
Proposal 8 —	To amend and restate the Company’s Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares	“FOR”	Page 77

Director Nominees

You are being asked to vote on the election of the following 10 Directors. Detailed information about each Director’s background, skill sets and areas of expertise can be found beginning on page 8.

Name

Age*

Director

Since

Principal Position

Independent

Committee Memberships

Other Current

Public Boards

NCGC

QTC

Richard H. Anderson

2002

Chief Executive Officer of Delta Air Lines, Inc.

Yes

Scott C. Donnelly

2013

Chairman, President and Chief Executive Officer of Textron, Inc.

Yes

Omar Ishrak

2011

Chairman and Chief Executive Officer of Medtronic, Inc.

Shirley Ann Jackson, Ph.D.

2002

President of Rensselaer Polytechnic Institute

Yes

Michael O. Leavitt

2011

Founder and Chairman of Leavitt Partners

Yes

James T. Lenehan

2007

Financial consultant and retired Vice Chairman and President of Johnson & Johnson

Yes

Denise M. O’Leary

2000

Private venture capital investor

Yes

Kendall J. Powell

2007

Chairman and Chief Executive Officer of General Mills, Inc.

Yes

Robert C. Pozen

2004

Former Chairman of MFS Investment Management

Yes

Preetha Reddy

2012

Managing Director of Apollo Hospitals Enterprise Limited

Yes

*Age is at date of the 2014 Annual Meeting.


AC:	Audit Committee	NCGC:	Nominating and Corporate Governance Committee	C:	Chair
CC:	Compensation Committee	QTC:	Quality and Technology Committee	M:	Member
FC:	Finance Committee

Performance Highlights

Medtronic is the world’s largest medical technology company, offering an unprecedented breadth and depth of innovative therapies to fulfill our mission of alleviating pain, restoring health, and extending life. Last year, more than 9 million people benefited from our medical therapies, which treat cardiac and vascular diseases, diabetes, and neurological and musculoskeletal conditions. We leverage our experience, extensive partnerships, and the passion of more than 49,000 employees to help transform healthcare worldwide. During the 2014 fiscal year, we delivered consistent and dependable growth across all of our businesses through our three growth vectors: new therapies, emerging markets, and integrated health solutions. A few of our most notable performance highlights include the following:

•

We achieved revenue of $17.0 billion and cash flows from operations of $5.0 billion.

•

We returned over 50% of our free cash flow to shareholders through dividends and share repurchases.

•

We continued to make strategic investments to position our company for sustainable long-term growth.

•

Our CoreValve System obtained early FDA approval based on exceptional clinical performance.

•

We received FDA approval to launch the MiniMed^® 530G with Enlite^®, a breakthrough, first-generation artificial pancreas system with Threshold Suspend automation for people with diabetes.

•

We launched globally the Reveal LINQ Insertable Cardiac Monitor (ICM) System, the smallest implantable cardiac monitoring device available for patients.

Executive Compensation Philosophy, Goals and Principles

Medtronic’s executive compensation programs aim to attract and retain talented executives through competitive pay and benefits as well as aligning compensation with Company performance through a strong pay for performance approach. To achieve these objectives, Medtronic engages in the following executive compensation practices:

•

We emphasize pay for performance by basing at least 75% of TTDC on short-term and long-term financial incentives with a heavy emphasis on long-term performance.

•

The goals used for both short-term and long-term incentives align executive and shareholder objectives by using annual and three-year performance measures that drive shareholder value.

•

We emphasize a culture of quality through executives’ annual incentive plan. Payouts are reduced if a quality compliance performance threshold is not achieved. For fiscal year 2014, the quality modifier was based on reductions in U.S. Food and Drug Administration inspection observations and preventing warning letters; and is designed not to impede proactive quality actions such as product recalls and complaint handling procedures.

•

We hold an annual advisory vote regarding named executive officer compensation. Last year, 97.43% of votes cast were in favor of our say-on-pay resolution.

For additional information, see the CD&A and Executive Compensation sections of this Proxy Statement.

Corporate Governance Highlights


*Strong Lead Independent* *Director* SEE PAGE 15	*Annual Board and Committee* *Evaluation Processes* SEE PAGE 16	*Robust Risk Management* *Program* SEE PAGE 16

*Maintain High Ethical Standards Through Written Policies and Actions (Includes Codes of* *Conduct, U.S. Patient Privacy Principles, Political Contribution Policy, and Policies Regarding* *Environmental, Health and Safety and the Use of Animals)* SEE PAGE 25 AND OUR INVESTOR RELATIONS WEBSITE

*Stock Ownership Guidelines* *for Named Executive Officers* *and Directors* SEE PAGE 46	*Annual Board of Director* *Elections* SEE PAGE 7	*Regular Executive Sessions of* *Independent Directors* SEE PAGE 15

LOGO

710 Medtronic Parkway

Minneapolis, Minnesota 55432

Telephone: 763-514-4000

PROXY STATEMENT

Annual Meeting of Shareholders

August 21, 2014

We are providing these proxy materials in connection with the solicitation by the Board of Directors of Medtronic, Inc. (“Medtronic”) of proxies to be voted at Medtronic’s Annual Meeting of Shareholders to be held on August 21, 2014, and at any adjournment or postponement of the meeting. The proxy materials were either made available to you over the internet or mailed to you beginning on or about July 11, 2014.

GENERAL INFORMATION ABOUT THE MEETING AND VOTING

What am I voting on?

There are eight proposals scheduled to be voted on at the meeting:

•

Election of ten directors, each for a one year term;

•

Ratification of the appointment of PricewaterhouseCoopers LLP as Medtronic’s independent registered public accounting firm for fiscal year 2015;

•

A non-binding advisory resolution to approve named executive officer compensation (a “Say-on-Pay” vote);

•

To approve the Medtronic, Inc. 2014 Employees Stock Purchase Plan;

•

To amend and restate the Company’s Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections;

•

To amend and restate the Company’s Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares;

•

To amend and restate the Company’s Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares; and

•

To amend and restate the Company’s Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares.

How can I receive proxy materials?

Under rules adopted by the U.S. Securities and Exchange Commission (“SEC”), we are furnishing proxy materials to our shareholders primarily via the internet, instead of mailing printed copies of proxy materials to each shareholder. On or about July 11, 2014, we began mailing to our shareholders (other than those who previously requested electronic or paper delivery) a “Notice of Internet Availability of Proxy Materials” (the “Notice”) containing instructions on how to access this proxy statement, the accompanying notice of annual meeting and our annual report for the fiscal year ended April 25, 2014 online. If you received the Notice by mail, you will not automatically receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review all of the important information contained in the proxy materials. The Notice also instructs you on how you may submit your proxy via the internet. If you previously requested electronic delivery, you will still receive an e-mail providing you the Notice, and if you previously requested paper delivery, you will still receive a paper copy of the proxy materials by mail.

Finally, you can receive a copy of our proxy materials by following the instructions (contained in the Notice) regarding how you may request to receive your materials electronically or in printed form on a one-time or ongoing basis. Requests for printed copies of the proxy materials can be made by internet at http://www.proxyvote.com, by telephone at 1-800-579-1639 or by email at sendmaterial@proxyvote.com by sending a blank email with your control number in the subject line. Please also see “Can I receive future proxy materials electronically?” below.

Who is entitled to vote?

Shareholders as of the close of business on June 23, 2014 (the “Record Date”), may vote at the Annual Meeting. You have one vote for each share of common stock you held on the Record Date, including shares:

•

Held directly in your name as “shareholder of record” (also referred to as registered shareholder);

•

Held for you in an account with a broker, bank or other nominee (shares held in “street name”). Street name holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank or nominee how to vote their shares; and

•

Credited to your account in the Medtronic, Inc. Savings and Investment Plan.

What constitutes a quorum?

A majority of the outstanding shares entitled to vote, present or represented by proxy, constitutes a quorum for the Annual Meeting. Proxies received but marked as abstentions and “broker non-votes” (described below) are counted as present and entitled to vote for purposes of determining a quorum. On the Record Date, 996,192,332 shares of Medtronic common stock were outstanding and entitled to vote.

How many votes are required to approve each proposal?

Election of Directors. The ten candidates for election who receive a plurality vote of the shares present and entitled to vote in the affirmative will be elected. There is no cumulative voting.

Ratification of the Appointment of the Auditors. The ratification of the appointment of PricewaterhouseCoopers LLP as Medtronic’s independent registered public accounting firm for fiscal year 2015 requires the affirmative vote of a majority of the shares present and entitled to vote.

Say-on-Pay. The Say-on-Pay vote is a non-binding advisory vote. The Board of Directors will consider our executive compensation to have been approved by shareholders if the Say-on-Pay proposal receives the affirmative vote of a majority of the shares present and entitled to vote. The effect of the vote on this non-binding advisory vote is discussed on page 69.

Approval of the Medtronic, Inc. 2014 Employees Stock Purchase Plan. Approval of the Medtronic, Inc. 2014 Employees Stock Purchase Plan requires the affirmative vote of a majority of the shares present and entitled to vote.

Amendment and Restatement of Medtronic’s Articles of Incorporation to Provide that Directors will be Elected by a Majority Vote in Uncontested Elections. Amending and restating our Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections requires the affirmative vote of not less than 75 percent of the votes entitled to be cast by all holders of shares of our common stock.

Amendment and Restatement of Medtronic’s Articles of Incorporation to Allow Changes to the Size of the Board of Directors upon the Affirmative Vote of a Simple Majority of Shares. Amending and restating our Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares requires the affirmative vote of not less than 75 percent of the votes entitled to be cast by all holders of shares of our common stock.

Amendment and Restatement of Medtronic’s Articles of Incorporation to Allow Removal of a Director upon the Affirmative Vote of a Simple Majority of Shares. Amending and restating our Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares requires the affirmative vote of not less than 75 percent of the votes entitled to be cast by all holders of shares of our common stock.

Amendment and Restatement of Medtronic’s Articles of Incorporation to Allow Amendments to Section 5.3 of Article 5 upon the Affirmative Vote of a Simple Majority of Shares. Amending and restating our Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares requires the affirmative vote of not less than 75 percent of the votes entitled to be cast by all holders of shares of our common stock.

How are votes counted?

In the election of directors, your vote may be cast “FOR” all of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees.

In the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm, your vote may be cast “FOR” or “AGAINST” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

In the advisory Say-on-Pay vote, your vote may be cast “FOR” or “AGAINST” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

In the vote on the Medtronic, Inc. 2014 Employees Stock Purchase Plan, your vote may be cast “FOR” or “AGAINST” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

In the vote on the amendment and restatement of Medtronic’s Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections, your vote may be cast “FOR,” “AGAINST,” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

In the vote on the amendment and restatement of Medtronic’s Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares, your vote may be cast “FOR,” “AGAINST,” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

In the vote on the amendment and restatement of Medtronic’s Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares, your vote may be cast “FOR,” “AGAINST,” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

In the vote on the amendment and restatement of Medtronic’s Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares, your vote may be cast “FOR,” “AGAINST,” or you may “ABSTAIN.” If you “ABSTAIN,” it has the same effect as a vote against the proposal.

For all of the votes, if you grant a proxy by telephone or internet without voting instructions, or sign and submit your proxy card without voting instructions, your shares will be voted in accordance with the recommendation of the Board.

What is a broker non-vote?

If you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on any proposal for which your broker does not have or does not exercise discretionary authority to vote (a “broker non-vote”). Shares constituting broker non-votes are not counted or deemed to be present in person or by proxy for the purpose of voting on a non-routine matter at the Annual Meeting and, therefore, are not counted for the purpose of determining whether shareholders have approved the election of directors in proposal 1, the Say-on-Pay in proposal 3, the Medtronic, Inc. 2014 Employees Stock Purchase Plan in proposal 4, or the amendment and restatement of our Articles of Incorporation in proposals 5, 6, 7, and 8 because such proposals are considered non-routine matters. If you do not provide voting instructions to your broker, your broker will have discretion to vote your shares on proposal 2, because the ratification of auditor appointment is considered a routine matter. Broker non-votes are counted as present for the purpose of determining a quorum at the Annual Meeting.

How does the Board recommend that I vote?

Medtronic’s Board recommends that you vote your shares:

•

“FOR” each of the ten nominees to the Board for a one year term;

•

“FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as Medtronic’s independent registered public accounting firm for fiscal year 2015;

•

“FOR” approval of the resolution in the non-binding Say-on-Pay advisory vote;

•

“FOR” approval of the Medtronic, Inc. 2014 Employees Stock Purchase Plan;

•

“FOR” amending and restating our Articles of Incorporation to provide that directors will be elected by a majority vote in uncontested elections;

•

“FOR” amending and restating our Articles of Incorporation to allow changes to the size of the Board of Directors upon the affirmative vote of a simple majority of shares;

•

“FOR” amending and restating our Articles of Incorporation to allow removal of a director upon the affirmative vote of a simple majority of shares; and

•

“FOR” amending and restating our Articles of Incorporation to allow amendments to Section 5.3 of Article 5 upon the affirmative vote of a simple majority of shares.

How do I vote my shares without attending the meeting?

If you are a shareholder of record or hold shares through a Medtronic stock plan, you may vote by granting a proxy. For shares held in street name, you may vote by submitting voting instructions to your broker or nominee. In most circumstances, you may vote:

•

By Internet or Telephone — If you have internet or telephone access, you may submit your proxy by following the voting instructions in the Notice of Annual Meeting no later than 11:59 p.m., Eastern Daylight Time, on August 20, 2014 (or, for shares held through the

Medtronic, Inc. Savings and Investment Plan and the Medtronic Puerto Rico Employees’ Savings and Investment Plan, no later than 11:59 p.m., Eastern Daylight Time, on August 18, 2014). If you vote by internet or telephone, you need not return your proxy card.

•

By Mail — If you received a paper copy of the proxy statement, you may vote by mail by signing, dating and mailing your proxy card in the envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity.

How do I vote my shares in person at the meeting?

If you are a shareholder of record and prefer to vote your shares at the meeting, bring the accompanying proxy card (if you received a paper copy of the proxy statement) and proof of identification. You may vote shares held in street name only if you obtain a “legal” proxy from the record holder (broker or other nominee) giving you the right to vote the shares.

Even if you plan to attend the meeting, we encourage you to vote in advance by internet, telephone or mail so that your vote will be counted in the event you are unable to attend.

How do I gain admission to the meeting?

If you wish to attend the Annual Meeting, you must be a shareholder on the record date and request an admission ticket in advance by visiting www.proxyvote.com and following the instructions provided (you will need the 12 digit number included on your proxy card, voter instruction form or notice). Tickets will be issued to registered and beneficial owners and to one guest accompanying each registered or beneficial owner.

Requests for admission tickets will be processed in the order in which they are received and must be requested no later than August 20, 2014. Please note that seating is limited and requests for tickets will be accepted on a first-come, first-served basis. On the day of the meeting, each shareholder will be required to present valid picture identification such as a driver’s license or passport with their admission ticket. Seating will begin at 9:30 a.m. and the meeting will begin at 10:30 a.m. Cameras (including cell phones with photographic capabilities), recording devices and other electronic devices will not be permitted at the meeting. You will be required to enter through a security check point before being granted access to the meeting.

What does it mean if I receive more than one proxy card or Notice?

It generally means you hold shares registered in more than one account. If you received a paper copy of the proxy statement and you vote by mail, sign and return each proxy card. Or, if you vote by internet or telephone, vote once for each proxy card and/or Notice you receive. If you have received more than one Notice, vote once for each Notice that you receive.

May I change my vote?

Yes. Whether you have voted by mail, internet or telephone, you may change your vote and revoke your proxy, prior to the Annual Meeting, by:

•

Sending a written statement to that effect to the Corporate Secretary of Medtronic;

•

Voting by internet or telephone at a later time;

•

Submitting a properly signed proxy card with a later date; or

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Voting in person at the Annual Meeting and by filing a written notice of termination of the prior appointment of a proxy with Medtronic, or by filing a new written appointment of a proxy with Medtronic.

Can I receive future proxy materials electronically?

Yes. If you are a shareholder of record or hold shares through a Medtronic stock plan and you have received a paper copy of the proxy materials, you may elect to receive future proxy statements and annual reports online as described in the next paragraph. If you elect this feature, you will receive an email message notifying you when the materials are available, along with a web address for viewing the materials. If you received this proxy statement electronically, you do not need to do anything to continue receiving proxy materials electronically in the future.

Whether you hold shares registered directly in your name, through a Medtronic stock plan, or through a broker or bank, you can enroll for future electronic delivery of proxy statements and annual reports by following these easy steps:

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Go to our website at www.medtronic.com;

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Click on Investors;

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In the Shareholder Services section, click on Electronic Delivery of Proxy Materials; and

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Follow the prompts to submit your electronic consent.

Generally, brokers and banks offering this choice require that shareholders vote through the internet in order to enroll. Street name shareholders whose broker or bank is not included on this website are encouraged to contact their broker or bank and ask about the availability of electronic delivery. As is customary with internet usage, the user must pay all access fees and telephone charges. You may view this year’s proxy materials at www.medtronic.com/annualmeeting.

What are the costs and benefits of electronic delivery of Annual Meeting materials?

There is no cost to you for electronic delivery. You may incur the usual expenses associated with internet access as charged by your internet service provider. Electronic delivery ensures quicker delivery, allows you to print the materials at your computer and makes it convenient to vote your shares online. Electronic delivery also conserves natural resources and saves Medtronic significant printing, postage and processing costs.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,” “estimate,” “intend” and other similar words. Forward-looking statements in this proxy statement include, but are not limited to, statements regarding individual and Company performance objectives and targets, and statements relating to the benefits of Medtronic’s collaboration with Apollo Hospitals. These and other forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. Factors that may cause actual results to differ materially from those contemplated by the statements in this proxy statement can be found in Medtronic’s periodic reports on file with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this proxy statement and undue reliance should not be placed on these statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.

PROPOSAL 1 — ELECTION OF DIRECTORS

Directors and Nominees

Under Medtronic’s amended Articles of Incorporation, directors whose term of office is expiring are elected annually for terms of one year and until their respective successors are elected and qualified, subject to prior death, resignation, retirement, disqualification or removal from office. Each of Richard H. Anderson, Scott C. Donnelly, Omar Ishrak, Shirley Ann Jackson, Ph.D., Michael O. Leavitt, James T. Lenehan, Denise M. O’Leary, Kendall J. Powell, Robert C. Pozen and Preetha Reddy has been nominated for re-election to the Board to serve until the 2015 Annual Meeting and until their successors are elected and qualified, subject to prior death, resignation, retirement, disqualification or removal from office. All of the nominees are currently directors, and all were previously elected to the Board of Directors by shareholders. Victor J. Dzau, M.D., chose not to stand for re-election to the Board of Directors due to his other executive commitments.

All of the nominees have consented to being named as a nominee in this proxy statement and have indicated a willingness to serve if elected. However, if any nominee becomes unable to serve before the election, the shares represented by proxies may be voted for a substitute designated by the Board, unless a contrary instruction is indicated on the proxy.

A plurality of votes cast is required for the election of directors. However, under the Medtronic Principles of Corporate Governance, any nominee for director in an uncontested election (i.e., an election where the only nominees are those recommended by the Board of Directors) who receives a greater number of votes “withheld” from his or her election than votes “for” such election (a “Majority Withheld Vote”) will, within five business days of the certification of the shareholder vote by the inspector of elections, tender a written offer to resign from the Board of Directors. The Nominating and Corporate Governance Committee will promptly consider the resignation offer and recommend to the Board of Directors whether or not to accept it. The Nominating and Corporate Governance Committee will consider all factors its members deem relevant in considering whether to recommend acceptance or rejection of the resignation offer, including, without limitation:

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the perceived reasons why shareholders withheld votes;

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the length of service and qualifications of the director;

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the director’s contributions to Medtronic;

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Medtronic’s compliance with securities exchange listing standards;

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possible contractual ramifications in the event the director in question is a management director;

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the purpose and provisions of the Medtronic Principles of Corporate Governance; and

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the best interests of Medtronic and its shareholders.

If a director’s resignation is accepted, the Nominating and Corporate Governance Committee will recommend to the Board of Directors whether to fill the vacancy on the Board created by the resignation or reduce the size of the Board. Any director who tenders his or her offer to resign pursuant to this policy cannot participate in the Nominating and Corporate Governance Committee or Board deliberations regarding whether to accept the resignation offer. The Board will act on the Nominating and Corporate Governance Committee’s recommendation within 90 days following the certification of the shareholder vote, which may include, without limitation:

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acceptance of the resignation offer;

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adoption of measures intended to address the perceived issues underlying the Majority Withheld Vote; or

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rejection of the resignation offer.

Thereafter, the Board of Directors will disclose its decision to accept the resignation offer or the reasons for rejecting the offer, if applicable, on a Current Report on Form 8-K to be filed with the SEC within four business days of the date of the Board’s final determination.

NOMINEES FOR DIRECTORS FOR ONE-YEAR TERMS ENDING IN 2015:


		RICHARD H. ANDERSON Chief Executive Officer Delta Air Lines, Inc.		Director since 2002 age 59
		Mr. Anderson has been Chief Executive Officer of Delta Air Lines, Inc., a commercial airline, since 2007. He was Executive Vice President of UnitedHealth Group Incorporated, a diversified health care company, and President, Commercial Services Group, of UnitedHealth Group Incorporated from 2006 to 2007, Executive Vice President of UnitedHealth Group and Chief Executive Officer of its Ingenix subsidiary from 2004 until 2006. Mr. Anderson was Chief Executive Officer of Northwest Airlines Corporation from 2001 to 2004. Northwest Airlines Corporation and Delta Air Lines, Inc. filed for bankruptcy in 2005, which is within two years of Mr. Anderson serving as an executive officer of each company. Mr. Anderson serves on the board of directors of Delta Air Lines, Inc. Qualifications: Mr. Anderson’s qualifications to serve on our Board include his more than 24 years of business, operational, financial and executive management experience. He also serves on the board of directors of another public company. Mr. Anderson’s extensive experience, including within the health care industry and for Fortune 500 companies, allows him to contribute valuable strategic management and risk assessment insight to Medtronic.

		SCOTT C. DONNELLY Chairman, President and Chief Executive Officer Textron, Inc.		Director since 2013 age 53
		Mr. Donnelly is Chairman, President and Chief Executive Officer of Textron, Inc., a producer of aircraft, defense and industrial products. Mr. Donnelly joined Textron in June 2008 as Executive Vice President and Chief Operating Officer and was promoted to President and Chief Operating Officer in January 2009. He was appointed to the Board of Directors in October 2009, became Chief Executive Officer of Textron in December 2009 and Chairman of the Board in September 2010. Previously, Mr. Donnelly was the President and CEO of General Electric Company’s aviation business unit, GE Aviation, a leading maker of commercial and military jet engines and components as well as integrated digital, electric power and mechanical systems for aircraft. Prior to July 2005, Mr. Donnelly held various other management positions since joining General Electric in 1989. Qualifications: Mr. Donnelly’s qualifications to serve on our Board include more than two decades of business experience in innovation, manufacturing, sales and marketing, and business processes. Mr. Donnelly also serves on the board of directors of another public company. His extensive executive decision-making experience and corporate governance work make Mr. Donnelly a valuable director. Mr. Donnelly serves on the board of directors of Textron, Inc. Additionally, Mr. Donnelly qualifies as an “audit committee financial expert” as defined by SEC rules.


		OMAR ISHRAK Chairman and Chief Executive Officer Medtronic, Inc.		Director since 2011 age 58
		Mr. Ishrak has been Chairman and Chief Executive Officer of Medtronic since 2011. Prior to joining Medtronic, Mr. Ishrak served as President and Chief Executive Officer of GE Healthcare Systems, a comprehensive provider of medical imaging and diagnostic technology and a division of GE Healthcare, from 2009 to 2011. Before that, Mr. Ishrak was President and Chief Executive Officer of GE Healthcare Clinical Systems from 2005 to 2008 and President and Chief Executive Officer of GE Healthcare Ultrasound and BMD from 1995 to 2004. Qualifications: Mr. Ishrak’s qualifications to serve on our Board include his more than 19 years in the health care industry and more than 30 years of technology development and business management experience. Mr. Ishrak’s strong technical expertise and deep understanding of our customers, as well as his long history of success as a global executive in the medical technology industry, make him a valuable and qualified director with critical technical, leadership and strategic skills.

		SHIRLEY ANN JACKSON, Ph.D. President Rensselaer Polytechnic Institute		Director since 2002 age 67
		Dr. Jackson has been President of Rensselaer Polytechnic Institute, a technological research university, since 1999. She was Chair of the U.S. Nuclear Regulatory Commission under President Clinton from 1995 to 1999, and Professor of Physics at Rutgers University and consultant to AT&T Bell Laboratories from 1991 to 1995. Dr. Jackson currently serves as a member of the President’s Council of Advisors on Science and Technology, appointed by President Obama in 2009. She is a member of the National Academy of Engineering and the American Philosophical Society and a Fellow of the American Academy of Arts and Sciences, the American Association for the Advancement of Science, and the American Physical Society. She is a trustee of the Brookings Institution, a Life Trustee of M.I.T. and a member of the Council on Foreign Relations. She is also a director of FedEx Corporation, a global courier delivery company, Marathon Oil Corporation, a company with international operations in exploration and production, oil sands mining and integrated gas, Public Service Enterprise Group, a publicly owned gas and electric utility company in the state of New Jersey, and International Business Machines Corporation, a multinational technology and consulting corporation. Within the past five years, Dr. Jackson also served as a director of NYSE Euronext, a multinational financial services corporation. Qualifications: Dr. Jackson’s qualifications to serve on our Board include her leadership experience in government, industry and within a number of educational organizations (President, Rensselaer Polytechnic Institute; Trustee, M.I.T.), including those that bring technological innovation to the marketplace. In addition, Dr. Jackson serves on the boards of directors of a number of public companies and has accumulated over 32 years of audit, compensation, and governance and nominating committee experience, including as chair. Her leadership and strategic and innovative insight make her a valuable contributor to our Board. Additionally, Dr. Jackson qualifies as an “audit committee financial expert” as defined by SEC rules.


		MICHAEL O. LEAVITT Founder and Chairman Leavitt Partners		Director since 2011 age 63
		Governor Leavitt has been founder and Chairman of Leavitt Partners, a healthcare and food safety consulting firm, since 2009. Prior to that he was the United States Secretary of Health and Human Services from 2005 to 2009; Administrator of the Environmental Protection Agency from 2003 to 2005; and Governor of Utah from 1993 to 2003. Qualifications: Governor Leavitt’s qualifications to serve on our Board include his extensive management and leadership experience, including serving as the Governor of Utah, a large state with a diverse body of constituents, appointments to positions with the U.S. government, where he oversaw and advised on issues of national concern, and overseeing Leavitt Partners, LLC’s work advising clients in the health care and food safety sectors. Mr. Leavitt’s decades of leadership experience with valuable knowledge of the governmental regulatory environment and corporate governance makes him a valuable member of our Board.

		JAMES T. LENEHAN Financial Consultant and Retired Vice Chairman and President of Johnson & Johnson		Director since 2007 age 65
		Mr. Lenehan served as President of Johnson & Johnson, an international pharmaceutical company, from 2002 until 2004 when he retired after 28 years of service to Johnson & Johnson. During those 28 years, Mr. Lenehan also served as Vice Chairman of Johnson & Johnson from 2000 until 2004; Worldwide Chairman of Johnson & Johnson’s Medical Devices and Diagnostics Group from 1999 until he became Vice Chairman of the Board; and Worldwide Chairman, Consumer Pharmaceuticals & Professional Group. Mr. Lenehan has been a financial consultant since 2004. Within the past five years, Mr. Lenehan served as a director of Talecris Biotherapeutics Holding Corp, a global biopharmaceutical company. Qualifications: Mr. Lenehan’s qualifications to serve on our Board include more than 30 years of business, operational and management experience in medical device, pharmaceutical, biotherapeutics and related industries. He also serves on the board of directors of private companies. His leadership and financial experience make his input valuable to Medtronic.

		DENISE M. O’LEARY Private Venture Capital Investor		Director since 2000 age 57
		Ms. O’Leary has been a private venture capital investor in a variety of early stage companies since 1996. Ms. O’Leary is also a director of American Airlines Group, Inc., a commercial airline, and Calpine Corporation, a national power generation company based in the United States. She was a member of the Stanford University Board of Trustees from 1996 through 2006, where she chaired the Committee of the Medical Center. Within the past five years, Ms. O’Leary served as a director of US Airways Group, Inc., a commercial airline. Qualifications: Ms. O’Leary’s qualifications to serve on our Board include her extensive experience with companies at a variety of stages and her success as an investor. She also serves on the boards of directors of other public companies. Her financial expertise, experience in the oversight of risk management, and thorough knowledge and understanding of capital markets provide valuable insight with regard to corporate governance and financial matters.


		KENDALL J. POWELL Chairman and Chief Executive Officer General Mills, Inc.		Director since 2007 age 60
		Mr. Powell has been Chairman of General Mills, Inc., an international producer, marketer and distributor of cereals, snacks and processed foods, since 2008 and Chief Executive Officer of General Mills, Inc. since 2007. He was President and Chief Operating Officer of General Mills, Inc. from 2006 to 2007, and became a director of General Mills, Inc. in 2006; Executive Vice President and Chief Operating Officer, U.S. Retail from 2005 to 2006; and Executive Vice President of General Mills, Inc. from 2004 to 2005. From 1999 to 2004, Mr. Powell was Chief Executive Officer of Cereal Partners Worldwide, a joint venture of General Mills, Inc. and the Nestle Corporation. Mr. Powell joined General Mills, Inc. in 1979. Qualifications: Mr. Powell’s qualifications to serve on our Board include more than three decades of business, operational and management experience. Mr. Powell also serves on the board of directors of another public company. His extensive marketing and executive decision-making experience and corporate governance work make Mr. Powell a valuable director. Additionally, Mr. Powell qualifies as an “audit committee financial expert’ as defined by SEC rules.

		ROBERT C. POZEN Former Chairman MFS Investment Management		Director since 2004 age 67
		Mr. Pozen was Chairman of MFS Investment Management and a director of MFS Mutual Funds from 2004 until 2011. He previously was Secretary of Economic Affairs for the Commonwealth of Massachusetts in 2003, and John Olin Visiting Professor, Harvard Law School, from 2002 to 2003. He also was Vice Chairman of Fidelity Investments from 2000 to 2001 and President of Fidelity Management & Research from 1997 to 2001. From 2007 to 2008, he was the chairman of the SEC Advisory Committee on Improvements to Financial Reporting and since 2008 he has been a senior lecturer at Harvard Business School. Mr. Pozen currently serves on the board of Nielsen N.V., a global information and measurement company. Within the past five years, Mr. Pozen also served as a director of MFS Investment Management, a global asset manager, MFS Mutual Funds, a global provider of mutual fund services, and BCE Inc., a telecommunications conglomerate and the parent company of Bell Canada. Qualifications: Mr. Pozen’s qualifications to serve on our Board include his many successful investing experiences. He also served on President George W. Bush’s Commission to Strengthen Social Security and as Secretary of Economic Affairs for Massachusetts Governor Mitt Romney. His extensive financial knowledge, previous performance as a board member, and years of work in corporate governance make Mr. Pozen a qualified and valuable director. Additionally, Mr. Pozen qualifies as an “audit committee financial expert” as defined by SEC rules.

LOGO

PREETHA REDDY

Managing Director

Apollo Hospitals Enterprise Limited

Director since 2012

Age 56

Ms. Reddy has been Managing Director of Apollo Hospitals Enterprise Limited, a specialized hospital system in India and a division of The Apollo Group, since 1993. Prior to that she was Joint Managing Director from 1991-1993 and Director of Apollo Hospitals since February 1989. Ms. Reddy serves on several boards under the Apollo Group, an owner of for-profit educational institutions. She is a member of the Wipro Business Leadership Council, and Senior Vice President of the All India Management Association (AIMA).

Qualifications: Ms. Reddy’s qualifications to serve on our Board include her extensive experience in the field of health and managing the operations of one of the largest hospital chains in India and its network of highly skilled professionals. She also serves on the Boards of Directors of a number of organizations. Ms. Reddy has worked with industry bodies and government in India to advance health care in India. Her extensive experience in health care in developing countries and in managing complex organizations make her a valuable director.

THE BOARD RECOMMENDS A VOTE FOR THE DIRECTOR NOMINEES.

Director Independence

Under the New York Stock Exchange Corporate Governance Standards, to be considered independent, a director must be determined to have no material relationship with Medtronic, other than as a director. The Board of Directors has determined that the following directors, comprising all of our non-management directors, are independent under the New York Stock Exchange Corporate Governance Standards: Messrs. Anderson, Donnelly, Lenehan, Powell, Pozen, Dr. Jackson, Governor Leavitt and Ms. O’Leary and Ms. Reddy. In making this determination, the Board considered any current or proposed relationships that could interfere with a director’s ability to exercise independent judgment, including those identified by Medtronic’s Standards for Director Independence, which correspond to the New York Stock Exchange standards on independence. These standards identify certain types of relationships that are categorically immaterial and do not, by themselves, preclude the directors from being independent. The types of relationships and the directors who have had such relationships include:

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being a current employee of an entity that has made or is expected to make immaterial payments to, or that has received or is expected to receive immaterial payments from, Medtronic for property or services (Messrs. Anderson, Donnelly, Powell and Pozen, Dr. Jackson and Governor Leavitt);

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Mr. Anderson’s relationship with Medtronic, through the relevant entity, is transactional in nature and is not a material transactional relationship.

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Mr. Donnelly’s relationship with Medtronic, through the relevant entity, is transactional in nature and is not a material transactional relationship

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Mr. Powell’s relationship with Medtronic, through the relevant entity, is transactional in nature and is not a material transactional relationship.

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Mr. Pozen’s relationship with Medtronic, through the relevant entity, is transactional in nature and is not a material transactional relationship.

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Dr. Jackson’s relationship with Medtronic, through the relevant entity, is transactional in nature and is not a material transactional relationship.

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Governor Leavitt’s anticipated relationship with Medtronic, through the relevant entity, will relate to limited consulting services and will not be a material relationship.

and

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being an employee or executive officer of a non-profit organization to which Medtronic or The Medtronic Foundation has made immaterial contributions (Mr. Pozen and Dr. Jackson).

All of the relationships of the types listed above were entered into, and payments were made or received, by Medtronic in the ordinary course of business and on competitive terms, and no director participated in negotiations regarding, nor approved, any such purchases or sales. Aggregate payments to, transactions with or discretionary charitable contributions to each of the relevant organizations did not exceed the greater of $1,000,000 or 2% of that organization’s consolidated gross revenues for any of that organization’s last three fiscal years. The Board reviewed the transactions with each of these organizations and determined that they were made in the ordinary course of business, the directors had no role with respect to the Company’s decision to make any of the purchases or sales, the nature and amount of payments involved in the transactions would not influence the directors’ objectivity in the boardroom or have a meaningful impact on any such director’s ability to satisfy his or her fiduciary standards on behalf of Medtronic’s shareholders.

In the course of fulfilling its duties, the Board of Directors also considered relationships in which the director had a further removed relationship with the relevant third party, such as being a director (rather than an employee or executive officer) of an organization that engages in a business relationship with Medtronic or receives discretionary charitable contributions from Medtronic or its affiliates.The Board determined that no such further removed relationships impact the independence of its directors.

The Board of Directors also considered a director’s spouse who provided non-professional services to, but was not an employee of, The Medtronic Foundation where payments to the spouse did not exceed $120,000, and the anticipated employment of a director’s daughter by Medtronic. The Board of Directors determined that none of the relationships were material and that their existence would not influence the director’s objectivity in the boardroom or have a meaningful impact on the director’s ability to satisfy fiduciary standards on behalf of Medtronic’s shareholders.

The review by the Board of Directors of further-removed relationships also includes consideration of directors who are current employees of entities that are expected to have an ownership interest in Medtronic joint ventures. Ms. Reddy is Managing Director of Apollo Hospitals Enterprise Limited (“Apollo”), a specialized hospital system in India and a division of The Apollo Group. Medtronic intends to collaborate with Apollo to bring a dialysis system to the developing world and currently expects to contribute approximately $24 million to this joint venture through 2016. When evaluating Ms. Reddy’s independence, the Board considered that the terms of the joint venture will prohibit Medtronic from making or receiving, directly or indirectly, any contributions that exceed 2% of Apollo’s annual gross revenue during any of its fiscal years and that Medtronic’s business relationships with the joint venture and Apollo will be maintained on an arm’s-length basis. Neither Ms. Reddy nor Apollo will be given special treatment in these relationships, Ms. Reddy will not participate in negotiations or approvals regarding these relationships, Medtronic makes no payments to Ms. Reddy other than in connection with her service as a director and Ms. Reddy is not directly or indirectly compensated based on the existence or performance of the joint venture. In addition, pursuant to the New York Stock Exchange Corporate Governance Standards for evaluating director independence, the Board determined that the collaboration will not cause Apollo or Ms. Reddy to have a material relationship with Medtronic, that none of the amounts to be paid in connection therewith are at a level that would compromise Ms. Reddy’s independence or affect her objectivity in the boardroom, and that the anticipated collaboration does not otherwise affect Ms. Reddy’s ability to exercise independent judgment or her ability to satisfy fiduciary standards on behalf of Medtronic’s shareholders.

The Board of Directors also considered that in November 2013, Medtronic entered into a short-term consulting services agreement with Leavitt Partners, a healthcare and food safety consulting firm. Under the terms of the agreement, Medtronic agreed to pay $76,000 to Leavitt Partners in exchange for the delivery of certain analyses. Governor Leavitt is the Founder and Chairman of Leavitt

Partners. Medtronic learned in January 2014, that when it entered into the consulting services agreement with Leavitt Partners the impact on Governor Leavitt’s board role was not considered. At the time of this discovery, Medtronic had paid $38,000 to Leavitt Partners but had not yet received the analyses provided for in the agreement. Because Governor Leavitt was then a member of the Audit Committee, he was precluded from accepting, directly or indirectly, any consulting fees from Medtronic. Governor Leavitt and Medtronic acted promptly to remedy this situation and to regain Governor Leavitt’s compliance with NYSE rules on director independence for Audit Committee members. In January 2014, Medtronic and Leavitt Partners rescinded the consulting services agreement, Leavitt Partners returned the $38,000 it received from Medtronic and the analyses were not provided to Medtronic by Leavitt Partners. After review and consideration of the matter, including the report of the Nominating and Corporate Governance Committee, the Board determined that Governor Leavitt regained his independence as a member of the Audit Committee. Mr. Leavitt served on the Audit Committee until committee reassignments were effected in April 2014.

Related Transactions and Other Matters

In January 2007, the Board of Directors of Medtronic adopted written related party transaction policies and procedures and amended such policies and procedures in March 2011. The policies require that all “interested transactions” (as defined below) between Medtronic and a “related party” (as defined below) are subject to approval or ratification by the Nominating and Corporate Governance Committee. In determining whether to approve or ratify such transactions, the Nominating and Corporate Governance Committee will take into account, among other factors it deems appropriate, whether the interested transaction is on the same terms as are generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. In addition, the Nominating and Corporate Governance Committee has reviewed a list of interested transactions and deemed them to be pre-approved or ratified. Also, the Board of Directors has delegated to the chair of the Nominating and Corporate Governance Committee the authority to pre-approve or ratify any interested transaction in which the aggregate amount is expected to be less than $1 million. Finally, the policies provide that no director shall participate in any discussion or approval of an interested transaction for which he or she is a related party, except that the director shall provide all material information concerning the interested transaction to the Nominating and Corporate Governance Committee.

Under the policies, an “interested transaction” is defined as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or any guarantee of indebtedness) in which:

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the aggregate amount involved will or may be expected to exceed $120,000 in any twelve-month period;

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Medtronic is a participant; and

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any related party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than ten percent beneficial owner of another entity).

A “related party” is defined as any:

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person who is or was (since the beginning of the last fiscal year for which Medtronic has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director;

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greater than five percent beneficial owner of Medtronic’s common stock; or

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immediate family member of any of the foregoing.

During fiscal year 2014, Tino Schuler, a son of former director Jack W. Schuler, was employed by Medtronic as one of a number of senior marketing directors focused on Medtronic’s core ear, nose, and throat product lines reporting to a Vice President, Marketing of Medtronic’s core ear, nose, and throat product lines. Mr. Tino Schuler worked for Xomed Surgical Products, Inc. (“Xomed”) beginning in

August 1993, and Xomed, the predecessor to our core ear, nose, and throat business, was acquired by Medtronic in 1999. In fiscal year 2014, Medtronic’s Surgical Technologies business, which includes the core ear, nose, and throat product lines, represented approximately 9% of Medtronic world-wide revenue. Mr. Tino Schuler was paid an aggregate salary and bonus of $266,011 and the standard benefits provided to other non-executive Medtronic employees for his services during fiscal year 2014. Mr. Tino Schuler is not an executive officer of, and does not have a key strategic role within, Medtronic.

During fiscal year 2015, Sarah Powell, a daughter of director Kendall J. Powell, is expected to be employed by Medtronic as a Senior Leadership Development Rotation Program Associate. The Leadership Development Rotation Program is a three year program designed to place high-potential, high-performing graduates of an MBA program in two 18 month placements in different business units of Medtronic. The aggregate value of the compensation to be paid to Ms. Sarah Powell during fiscal year 2015 is expected to be approximately $145,000, which includes salary, bonus and incentive payments and stock options. In addition, Ms. Powell will receive the standard benefits provided to other non-executive Medtronic employees for her services during fiscal year 2015. Ms. Sarah Powell will not be an executive officer of, and will not have a key strategic role within, Medtronic.

GOVERNANCE OF MEDTRONIC

Our Corporate Governance Principles

The Board of Directors first adopted Principles of Corporate Governance (the “Governance Principles”) in fiscal 1996 and revises these Governance Principles from time to time, most recently in July 2012. The Governance Principles describe Medtronic’s corporate governance practices and policies, and provide a framework for the governance of Medtronic. Among other things, the Governance Principles include the provisions below.

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A majority of the members of the Board must be independent directors and no more than two directors may be Medtronic employees. Currently one director, Medtronic’s Chairman and Chief Executive Officer, is not independent.

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Medtronic maintains Audit, Compensation, Finance, Nominating and Corporate Governance and Quality and Technology Committees, which consist entirely of independent directors.

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The Nominating and Corporate Governance Committee consists of all independent directors and oversees an annual evaluation of the Board.

Our Governance Principles, the charters of our Audit, Compensation, Finance, Nominating and Corporate Governance and Quality and Technology Committees and our codes of conduct are published on our website at www.medtronic.com/corporate-governance/index.htm. These materials are available in print to any shareholder upon request. From time to time the Board reviews and updates these documents as it deems necessary and appropriate.

Lead Director and Chairman; Executive Sessions

Mr. Ishrak, our Chief Executive Officer, also serves as Chairman of the Board. The Board believes that it is appropriate for Mr. Ishrak to serve as Chairman of the Board due to his extensive knowledge of and experience in the global health care industry generally and in the medical device industry specifically. This knowledge and experience will be critical in identifying strategic priorities and providing unified leadership in the execution of strategy.

Our designated “Lead Director” is Richard H. Anderson, and he presides as chair at regularly scheduled meetings of the independent directors. Mr. Anderson suggests agenda items for Board meetings and reviews and approves the agendas for each meeting of the Board of Directors and its Committees. He presides over the directors’ annual evaluation of the Board and advises Mr. Ishrak on

the conduct of Board meetings, facilitating teamwork and communications between the non-management directors and management, serving as a liaison between the two. As Lead Director, Mr. Anderson also receives all committee materials in addition to those committees upon which he serves. In addition, Mr. Anderson acts as the focal point on the Board concerning issues such as corporate governance and suggestions from non-management directors, especially on sensitive issues.

Six regular meetings of our Board are held each year, and at each Board meeting our independent directors may meet in executive session with no Company management present.

Board Role in Risk Oversight

Our Board of Directors, in exercising its overall responsibility to oversee the management of our business, considers risks when reviewing the Company’s strategic plan, financial results, merger and acquisition related activities, legal and regulatory matters and its public filings with the Securities and Exchange Commission. The Board is also deeply engaged in the Company’s Enterprise Risk Management (“ERM”) program and has received briefings on the outcomes of the ERM program and the steps the Company is taking to mitigate risks identified through the ERM program. The Board’s oversight of risk management includes full and open communications with management to review the adequacy and functionality of the risk management processes used by management. In addition, the Board of Directors uses its committees to assist in its risk oversight responsibility as follows:

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The Audit Committee assists the Board of Directors in its oversight of the integrity of the financial reporting of the Company and its compliance with applicable legal and regulatory requirements. It also oversees our internal controls and compliance activities. The Audit Committee periodically discusses policies with respect to risk assessment and risk management, including appropriate guidelines and policies to govern the process, as well as the Company’s major financial and business risk exposures and certain contingent liabilities and the steps management has undertaken to monitor and control such exposures. It also meets privately with representatives from the Company’s independent registered public accounting firm.

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The Finance Committee assists the Board of Directors in its oversight of risk relating to the Company’s assessment of its significant financial risks and certain contingent liabilities.

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The Compensation Committee assists the Board of Directors in its oversight of risk relating to the Company’s assessment of its compensation policies and practices.

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The Quality and Technology Committee assists the Board of Directors in its oversight of risk relating to product quality and safety and the areas of human and animal studies.

Committees of the Board and Meetings

Our five standing Board committees — Audit, Compensation, Finance, Nominating and Corporate Governance and Quality and Technology — consist solely of independent directors, as defined in the New York Stock Exchange Corporate Governance Standards. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Other than Ms. Reddy, each director attended 75% or more of the total Board and Board committee meetings on which the director served in fiscal year 2014. In addition, it has been the longstanding practice of Medtronic for all directors to attend the Annual Meeting of Shareholders. All directors, except Preetha Reddy, attended the last Annual Meeting.

The following table summarizes the current membership of the Board and each of its standing committees and the number of times each standing committee met during fiscal year 2014.

Board

Audit

Compensation

Finance

Nominating and
Corporate
Governance

Quality and
Technology

Mr. Anderson

Chair

Mr. Donnelly

Dr. Dzau

Mr. Ishrak

Chair

Dr. Jackson

Chair

Gov. Leavitt

Mr. Lenehan

Chair

Ms. O’Leary

Mr. Powell

Chair

Mr. Pozen

Chair

Ms. Reddy

Number of fiscal year 2014 meetings

The principal functions of our five standing committees — the Audit Committee, the Compensation Committee, the Finance Committee, the Nominating and Corporate Governance Committee, and the Quality and Technology Committee — are described below.

Audit Committee

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Oversees the integrity of Medtronic’s financial reporting

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Oversees the independence, qualifications and performance of Medtronic’s external independent registered public accounting firm and the performance of Medtronic’s internal auditors

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Oversees Medtronic’s compliance with applicable legal and regulatory requirements, including overseeing Medtronic’s engagements with, and payments to physicians and other health care providers

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Reviews with the General Counsel and independent registered public accounting firm: legal matters that may have a material impact on the financial statements; any fraud involving management or other employees who have a significant role in Medtronic’s internal controls; compliance policies; and any material reports or inquiries received that raise material issues regarding Medtronic’s financial statements and accounting or compliance policies

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Reviews annual audited financial statements with management and Medtronic’s independent registered public accounting firm and recommends to the Board whether the financial statements should be included in Medtronic’s Annual Report on Form 10-K

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Reviews the results of independent third party reviews of payments made to health care providers and oversees payments made to health care providers

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Reviews and discusses with management and Medtronic’s independent registered public accounting firm quarterly financial statements and earnings releases

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Reviews major issues and changes to Medtronic’s accounting and auditing principles and practices, including analyses of the effects of alternative GAAP methods on the financial statements, and the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of Medtronic

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Discusses policies with respect to risk assessment and risk management as well as the major financial and business risk exposures and the steps management has undertaken to monitor and control such exposures

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Undertakes the appointment, compensation, retention and oversight of the independent registered public accounting firm, which reports directly to the Audit Committee

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Pre-approves all audit and permitted non-audit services to be provided by the independent registered public accounting firm

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Reviews, at least annually, a report by the independent registered public accounting firm describing its internal quality-control procedures and any material issues raised by the most recent internal quality-control review, and any steps taken to deal with any such issues, and all relationships between the independent registered public accounting firm and Medtronic

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Reviews the experience and qualifications of the lead partner of the independent registered public accounting firm each year and considers whether there should be rotation of the lead partner or the independent auditor itself

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Establishes clear policies for hiring employees and former employees of the independent registered public accounting firm

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Prepares the Report of the Audit Committee

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Meets with the independent registered public accounting firm prior to the audit to review the scope and planning of the audit

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Reviews the results of the annual audit examination

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Considers, at least annually, the independence of the independent registered public accounting firm

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Reviews the adequacy and effectiveness of Medtronic’s internal controls over financial reporting and disclosure controls and procedures

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Reviews candidates for the positions of chief financial officer and controller of Medtronic

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Establishes procedures concerning the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters

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Meets privately in separate executive sessions periodically with management, internal auditors and the independent registered public accounting firm

Audit Committee Independence and Financial Experts:

In accordance with New York Stock Exchange Corporate Governance Standards and SEC Rule 10A-3, all members of the Audit Committee meet the additional independence standards applicable to Audit Committee members. In addition, the Board has determined that all of our current Audit Committee members are audit committee financial experts, as that term is defined in SEC rules.

Audit Committee Pre-Approval Policies:

Rules adopted by the SEC require public company audit committees to pre-approve audit and non-audit services provided by a company’s independent registered public accounting firm. Our Audit Committee has adopted detailed pre-approval policies and procedures pursuant to which audit,

audit-related, tax and other permissible non-audit services are pre-approved by category of service. The fees are budgeted, and actual fees versus the budget are monitored throughout the year. During the year, circumstances may arise when it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, we obtain the approval of the Audit Committee before engaging the independent registered public accounting firm. The policies require the Audit Committee to be informed of each service, and the policies do not include any delegation of the Audit Committee’s responsibilities to management. The Audit Committee may also delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated will report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

Compensation Committee

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Reviews compensation philosophy and major compensation programs

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Annually reviews executive compensation programs; annually reviews and approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer and, based on its own evaluation of performance in light of those goals and objectives as well as input from the entire Board, determines and approves the total compensation of the Chief Executive Officer and annually approves the total compensation of all other executive officers, including base salaries

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Administers and determines incentive compensation plans and equity-based compensation plans and approves stock and other long-term incentive awards

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Monitors compliance by the Chief Executive Officer and senior management with the Company’s stock ownership guidelines

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Reviews new compensation arrangements and reviews and recommends to the Board employment agreements and severance arrangements for senior executive officers

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Reviews and discusses with management the Compensation Discussion and Analysis required by the rules of the SEC and recommends to the Board the inclusion of the Compensation Discussion and Analysis in the Company’s annual proxy statement

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Assists the Board in reviewing results of any shareholder advisory votes, responding to other shareholder communications as such relate to the compensation of senior executive officers, and reviews and recommends to the Board for approval the frequency with which Medtronic will conduct shareholder advisory votes

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Prepares the Committee’s report to be included in Medtronic’s annual proxy statement

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Assesses the Company’s risk relating to its compensation policies and practices

The Compensation Committee may form and delegate authority to subcommittees as it deems appropriate. The Compensation Committee may also delegate certain of its responsibilities to one or more designated senior executives or committees in accordance with applicable laws, regulations, and plan requirements. Please refer to the Compensation Discussion and Analysis beginning on page 28 for additional discussion of the Compensation Committee’s processes and procedures relating to compensation.

Compensation Committee Independence:

In accordance with New York Stock Exchange Corporate Governance Standards and SEC Rule 10C-1, all members of the Compensation Committee meet the additional independence standards applicable to Compensation Committee members.

Compensation Committee Interlocks and Insider Participation:

The members of our Compensation Committee are Kendall J. Powell (Chair), Richard H. Anderson, Scott C. Donnelly, and Denise M. O’Leary. No member of the Compensation Committee during fiscal year 2014 was ever an officer or employee of Medtronic, and no executive officer of Medtronic during fiscal year 2014 served on the Compensation Committee or board of any company that employed any member of Medtronic’s Compensation Committee or Board. During fiscal year 2015, Sarah Powell, a daughter of director Kendall J. Powell, is expected to be employed by Medtronic as a Senior Leadership Development Rotation Program Associate as further described in this proxy statement under “Proposal 1 — Election of Directors — Related Transactions and Other Matters” beginning on page 14.

Compensation Risk Assessment:

We conducted a risk assessment of our compensation policies and practices and concluded that such policies and practices do not create risks that are reasonably likely to have a material adverse effect on our Company. The framework for the assessment was developed using materials from the Compensation Committee’s independent consultant, Frederic W. Cook & Co., Inc., and included an update to a comprehensive internal survey used in fiscal year 2010 that was designed to identify material policies and practices to be assessed, a review of the identified compensation plans and practices against the evaluation framework and an identification of mitigating factors with respect to any such risks.

In particular, as a result of the assessment we noted that:

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Base salaries at Medtronic are generally competitive in the median range of the executive compensation peer companies, not subject to any performance risk and act as a material component of total compensation for most Medtronic employees

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Incentive plans for senior management and executive officers are appropriately weighted between short-term and long-term performance; between cash and equity compensation; and with long-term incentive performance targets being established at the beginning of each of our overlapping three year performance periods to reduce the incentive to maximize performance during any one year

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Short-term incentive performance goals are recalibrated annually, based upon Medtronic’s annual operating plan approved by the Board, and are different than the long-term performance measures

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Executives and directors are subject to stock ownership and retention guidelines which require directors to maintain ownership of Medtronic stock equal to five (5) times their annual retainer, Medtronic’s CEO to maintain ownership of Medtronic stock equal to six (6) times his annual salary, and the other NEOs to maintain Medtronic stock equal to three (3) times their annual salary. Until the ownership guideline is met, the CEO and directors must retain 75% of after-tax Medtronic shares received through settlement of equity compensation awards and other NEOs must retain 50% of such shares. Once the guideline is met, the CEO and directors must retain 75% of after tax shares for one year following settlement of equity compensation awards and other NEOs must retain 50% of such shares for one year following settlement of equity compensation awards. As of July 11, 2014, all directors and NEOs are in compliance with the stock ownership and retention guidelines; however, due to their more recent appointments, Mr. Donnelly and Ms. Reddy are continuing to make progress towards the required ownership guidelines.

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Medtronic has in place policies designed to recoup improper payments or gains from incentive and equity compensation paid or granted to executives

Finance Committee

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Reviews and approves management’s recommendations to the Board for significant capital expenditures

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Reviews, approves and monitors significant strategic transactions

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Reviews and oversees management’s plans and objectives for the capitalization of the Company

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Reviews and approves management’s recommendations to the Board with respect to new offerings of debt and equity securities, stock splits, credit agreements, and Medtronic’s investment policies

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Reviews and approves management’s recommendations to the Board regarding dividends

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Reviews and approves management’s recommendations to the Board regarding authorization for repurchases of Medtronic’s stock

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Reviews and approves management’s recommendations for the Corporate Cash Investment Policy

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Reviews management’s decisions regarding certain financial aspects of the Company’s employee benefit plans

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Reviews and oversees the Company’s tax strategies

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Reviews with management the Company’s strategies for management of significant financial risks and contingent liabilities

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Reviews and recommends to the Board for approval authorization limits for the Committee and the Chief Executive Officer to approve expenditures

Nominating and Corporate Governance Committee

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Identifies, evaluates and recommends to the Board individuals for the Board to nominate for election as directors

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Formulates and administers policies and procedures for identifying, evaluating and recommending director candidates, including nominees recommended by shareholders

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Reviews and makes recommendations to the Board whether members of the Board should stand for re-election

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Considers any resignation offered by a director

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Develops an annual evaluation process for the Board and its committees

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Recommends to the Board directors to serve as members of each committee and recommends any changes to the Board or standing committees that the Committee believes desirable

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Monitors emerging corporate governance trends and oversees and evaluates the Company’s corporate governance policies and programs

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Recommends to the Board corporate governance guidelines

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Reviews shareholder proposals and recommends to the Board proposed Company responses to such proposals

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Reviews the Company’s Standards for Director Independence, recommends any desirable modifications to the standards, and provides at least annually to the Board the Committee’s assessment of which directors should be deemed independent directors

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Reviews at least annually the requirements of a “financial expert” under the applicable rules of the SEC and NYSE and determines which directors are “financial experts”

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Oversees and reviews on a periodic basis the continuing education program for directors and the orientation program for new directors

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Determines director compensation and benefits

The Nominating and Corporate Governance Committee considers candidates for Board membership, including those suggested by shareholders, applying the same criteria to all candidates. Any shareholder who wishes to recommend a prospective nominee for the Board for consideration by the Nominating and Corporate Governance Committee must notify the Corporate Secretary in writing at Medtronic’s offices at 710 Medtronic Parkway, Minneapolis, MN 55432. Any such recommendations should provide whatever supporting material the shareholder considers appropriate, but should at a minimum include such background and biographical material as will enable the Nominating and Corporate Governance Committee to make an initial determination as to whether the nominee satisfies the criteria for directors set out in the Governance Principles.

If the Nominating and Corporate Governance Committee identifies a need to replace a current member of the Board, to fill a vacancy in the Board or to expand the size of the Board, it considers candidates from a variety of sources, including using third-party search firms, to assist it to identify, evaluate and conduct due diligence on potential director candidates. The process followed to identify and evaluate candidates includes meetings to evaluate biographical information and background material relating to candidates, and interviews of selected candidates by members of the Board. Recommendations of candidates for inclusion in the Board slate of director nominees are based upon the criteria set forth in the Principles of Corporate Governance. These criteria include business experience and skills, judgment, honesty and integrity, the ability to commit sufficient time and attention to Board activities and the absence of potential conflicts with Medtronic’s interests. While the Nominating and Corporate Governance Committee does not have a formal diversity policy for Board membership, the Nominating and Corporate Governance Committee seeks directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. The Nominating and Corporate Governance Committee considers, among other factors, diversity with respect to viewpoint, skills, experience and community involvement in its evaluation of candidates for Board membership.

After completing the evaluation process, the Nominating and Corporate Governance Committee makes a recommendation to the full Board as to persons who should be nominated by the Board. The Board determines the nominees after considering the recommendations and report of the Nominating and Corporate Governance Committee and such other evaluations as it deems appropriate.

Alternatively, shareholders intending to appear at the Annual Meeting to nominate a candidate for election by the shareholders at the meeting (in cases where the Board does not intend to nominate the candidate or where the Nominating and Corporate Governance Committee was not requested to consider his or her candidacy) must comply with the procedures in Medtronic’s amended articles of incorporation, which are described under “Other Information — Shareholder Proposals and Director Nominations” on page 79 of this proxy statement.

Quality and Technology Committee

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Provides assistance to the Board in its oversight of product quality and safety, scientific and technical direction, and human and animal studies

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Oversees risk management in the area of product quality and safety, including review of Medtronic’s overall quality strategy and processes in place to monitor and control product quality and safety; periodic review of results of product quality and quality system assessments by Medtronic and external regulators (including the U. S. Food and Drug Administration (“FDA”) and various notified bodies); and review of important product quality issues and field actions

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Oversees the innovation strategy of the Company, including an assessment of portfolio competitive superiority and disruptive technology impacts; approach to new mark creation; monitoring overall effectiveness of research and development; a periodic targeted review of the IP strategy and portfolio; a technology evaluation of potential acquisitions for alignment with corporate strategy; and an assessment and evaluation of the economic value proposition of new and existing products

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Oversees risk management in the area of human and animal studies, including the periodic review of policies and procedures related to the conduct of human and animal studies

Director Compensation

The Director Compensation table reflects all compensation awarded to, earned by or paid to the Company’s non-employee directors during fiscal year 2014. No additional compensation was provided to Mr. Ishrak for his service as a director on the Board.


Non-Employee Director	Fees Earned or Paid in Cash⁽¹⁾		Stock Awards		Total
Richard H. Anderson	$	103,516	$	140,012	$	243,528
Scott C. Donnelly⁽²⁾	$	65,714	$	115,052	$	180,766
Victor J. Dzau	$	80,000	$	140,012	$	220,012
Shirley Ann Jackson	$	99,000	$	140,012	$	239,012
Michael O. Leavitt	$	83,379	$	140,012	$	223,391
James T. Lenehan	$	90,000	$	140,012	$	230,012
Denise M. O’Leary	$	80,000	$	140,012	$	220,012
Kendall J. Powell	$	101,484	$	140,012	$	241,496
Robert C. Pozen	$	95,000	$	140,012	$	235,012
Preetha Reddy⁽³⁾	$	60,000	$	105,009	$	165,009
Jack Schuler⁽⁴⁾	$	27,555	$	45,409	$	72,964

⁽¹⁾	These numbers reflect pro-rata payments as a result of changes in committee assignments during the fiscal year.

⁽²⁾	Mr. Donnelly’s compensation was pro-rated as a result of his appointment to the Board effective July 2013.

⁽³⁾	Ms. Reddy’s compensation was reduced by 25% due to her attendance of less than 75% of applicable meetings during the fiscal year.

⁽⁴⁾	Mr. Schuler retired from the Board effective August 22, 2013.

Fees Earned or Paid in Cash. The fees earned or paid in cash column represents the amount of annual retainer and annual cash stipend for Board and committee service (prorated for partial year’s service). For fiscal year 2014, the Board’s annual cash retainer was $80,000.

In addition, the Chairs of each of the Nominating and Corporate Governance, Compensation, Finance and Quality and Technology Committees received an annual cash stipend of $10,000. The Chair of the Audit Committee received a cash stipend of $19,000, while all non-chair members of the Audit Committee received an annual cash stipend of $5,000. Finally, the Lead Director received an annual cash stipend of $20,000.

The annual cash retainer, annual cash stipend and special committee fees are paid in two installments — in the middle and at the end of a fiscal year. The annual cash retainer and annual cash stipend are reduced by 25% if a non-employee director does not attend at least 75% of the total meetings of the Board and Board committees on which such director served during the relevant plan year. The table on page 17 of this proxy statement under the section entitled “Committees of the Board and Meetings” shows on which committees the individual directors serve.

Stock Awards. Directors are granted deferred stock units on the first business day of the fiscal year in an amount equal to $140,000 (on a pro-rata basis for participants who are directors for less than the entire preceding plan year and reduced by 25% for those directors who failed to attend at least 75% of the applicable meetings during such fiscal year) divided by the fair market value of a share of Medtronic common stock on the date of grant. Dividends paid on Medtronic common stock are credited to a director’s stock unit account in the form of additional stock units. The balance in a

director’s stock unit account will be distributed to the director in the form of shares of Medtronic common stock upon resignation or retirement from the Board in a single distribution or, at the director’s option, in five equal annual distributions. The stock awards column represents aggregate grant date fair value of the deferred stock units granted in the respective fiscal year as computed in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation — Stock Compensation. Stock Holdings. Non-employee directors held the following shares of restricted stock, stock options, and deferred stock units as of April 25, 2014:


Non-Employee Director	Restricted Stock		Stock Options		Deferred Stock Units
Richard H. Anderson		—		20,043		23,711
Scott C. Donnelly		—		0		0
Victor J. Dzau		—		9,636		15,827
Shirley Ann Jackson		—		8,336		24,528
Michael O. Leavitt		—		0		4,553
James T. Lenehan		—		10,471		17,791
Denise M. O’Leary		—		20,043		25,761
Kendall J. Powell		—		10,061		16,954
Robert C. Pozen⁽¹⁾		—		4,484		21,271
Preetha Reddy		—		0		1,826

⁽¹⁾	Does not include 6,714 stock options transferred to adult children.

To align directors’ interests more closely with those of shareholders, the Nominating and Corporate Governance Committee approved the Medtronic, Inc. Stock Ownership and Retention Guidelines pursuant to which non-employee directors are expected to own stock of Medtronic in an amount equal to five times the annual Board retainer fees. Until the ownership guideline is met, the directors must retain 75% of after-tax Medtronic shares received through settlement of equity compensation awards. Once the guideline is met, the directors must retain 75% of after tax shares for one year following settlement of equity compensation awards. For stock options, net after-tax profit shares are those shares remaining after payment of the option’s exercise price and income taxes. For share issuances, net gain shares are those remaining after payment of income taxes. Shares retained may be sold on the later of one year after receipt of the shares or until the ownership guidelines are met. In the case of retirement or termination, the shares may be sold after the shorter of the remaining retention period or one year following retirement or termination, as applicable. As of April 25, 2014, all directors were in compliance with the stock ownership and retention policy; however, due to their more recent appointments, Mr. Donnelly and Ms. Reddy are continuing to make progress towards the required ownership guidelines.

Deferrals. Directors may defer all or a portion of their cash compensation through participation in the Medtronic Capital Accumulation Plan Deferral Program, a nonqualified deferred compensation plan designed to allow participants to make contributions of their compensation before taxes are withheld, and to earn returns or incur losses on those contributions based upon allocations of their balances to one or more investment alternatives, which are also investment alternatives that Medtronic offers its employees through its 401(k) Plan.

Complaint Procedure; Communications with Directors

The Sarbanes-Oxley Act of 2002 requires companies to maintain procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. We currently have such procedures in place. Our 24-hour, toll-free confidential compliance line is available for the submission of concerns regarding accounting, internal controls or auditing matters. Shareholders may also communicate with our independent

directors via e-mail at independentdirectors@medtronic.com. Our Lead Director may be contacted via e-mail at leaddirector@medtronic.com. Communications received from shareholders may be forwarded directly to Board members as part of the materials sent before the next regularly scheduled Board meeting, although the Board has authorized management, in its discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening or otherwise inappropriate. Advertisements, solicitations for periodical or other subscriptions and other similar communications generally will not be forwarded to the directors.

Our Codes of Conduct

All Medtronic employees, including our Chief Executive Officer and other senior executives, are required to comply with our long-standing Code of Conduct to help ensure that our business is conducted in accordance with the highest standards of ethical behavior. Our Code of Conduct covers all areas of professional conduct, including customer relationships, conflicts of interest, insider trading, intellectual property and confidential information, as well as requiring strict adherence to all laws and regulations applicable to our business. Employees are required to bring any violations and suspected violations of the Code of Conduct to the attention of Medtronic, through management or our legal counsel or by using Medtronic’s confidential compliance line. Our Code of Ethics for Senior Financial Officers, which is a part of the Code of Conduct, includes certain specific policies applicable to our Chief Executive Officer, Chief Financial Officer, Treasurer and Controller and to other senior financial officers designated from time to time by our Chief Executive Officer. These policies relate to internal controls, the public disclosures of Medtronic, violations of the securities or other laws, rules or regulations and conflicts of interest. The members of the Board of Directors are subject to a Code of Business Conduct and Ethics relating to director responsibilities, conflicts of interest, strict adherence to applicable laws and regulations and promotion of ethical behavior.

Our codes of conduct are published on our website, at www.medtronic.com under the Corporate Governance caption in the Investors section, and are available in print to any shareholder who requests them. We intend to disclose future amendments to, or waivers for directors and executive officers of, our codes of conduct on our website promptly following the date of such amendment or waiver.

SHARE OWNERSHIP INFORMATION

Significant Shareholders The following table shows information as of June 23, 2014, concerning each person who is known by us to beneficially own more than 5% of our common stock.


Name of Beneficial Owner	Amount and Nature of Beneficial Ownership of Common Stock		Of Shares Beneficially Owned, Amount that May Be Acquired Within 60 Days		Percent of Class
BlackRock, Inc., 40 East 52nd Street, New York, NY 10022⁽¹⁾		63,862,566		N/A		6.4	%
The Vanguard Group, 100 Vanguard Blvd, Malvern, PA 19355⁽²⁾		54,957,854		N/A		5.5	%

⁽¹⁾	The information for security ownership of this beneficial owner is based on a Schedule 13G/A filed by BlackRock, Inc. on January 30, 2014. Based upon 996,192,332 shares outstanding as of June 23, 2014, the shareholder beneficially owns approximately 6.41% of our shares outstanding.

⁽²⁾	The information for security ownership of this beneficial owner is based on a Schedule 13G file by The Vanguard Group on February 11, 2014. Based upon 996,192,332 shares outstanding as of June 23, 2014, the shareholder beneficially owns approximately 5.52% of our shares outstanding.

Beneficial Ownership of Management The following table shows information as of June 23, 2014 concerning beneficial ownership of Medtronic’s common stock by Medtronic’s directors, named executive officers identified in the Summary Compensation Table under “Executive Compensation,” and all directors and executive officers as a group.


Name of Beneficial Owner	Amount and Nature of Beneficial Ownership of Common Stock⁽⁷⁾		Of Shares Beneficially Owned, Amount that May Be Acquired Within 60 Days
Richard H. Anderson⁽¹⁾		66,490		46,168
Michael J. Coyle⁽²⁾		259,549		232,321
Scott C. Donnelly⁽³⁾		2,204		1,959
Victor J. Dzau, M.D.		27,847		27,847
Gary L. Ellis		681,861		589,337
Omar Ishrak		595,533		528,941
Shirley Ann Jackson, Ph.D.		36,138		35,248
Michael O. Leavitt		6,937		6,937
James T. Lenehan		43,646		30,646
Christopher J. O’Connell		460,729		394,798
Denise M. O’Leary		54,240		48,189
Kendall J. Powell⁽⁴⁾		32,399		29,399
Robert C. Pozen⁽⁵⁾		52,839		28,139
Preetha Reddy		3,614		3,614
Carol A. Surface		6		0
Directors and executive officers as a group (20 persons)⁽⁶⁾		2,720,254		2,336,932

⁽¹⁾	Mr. Anderson disclaims beneficial ownership of 25 shares that are owned by his adult son. Includes 4,800 shares held by Mr. Anderson’s spouse’s trust.

⁽²⁾	Includes 3,739 shares held by Mr. Coyle’s spouse and 250 shares held by family trust.

⁽³⁾	Includes 245 shares held by Mr. Donnelly’s spouse’s trust.

⁽⁴⁾	Includes 3,000 shares held by Mr. Powell’s spouse’s trust.

⁽⁵⁾	Includes 24,700 shares owned jointly with Mr. Pozen’s spouse.

⁽⁶⁾	As of June 23, 2014, no director or executive officer beneficially owns more than 1% of the shares outstanding. Medtronic’s directors and executive officers as a group beneficially own approximately .27% of the shares outstanding.

⁽⁷⁾

Amounts include the shares shown in the last column, which are not currently outstanding but are deemed beneficially owned because of the right to acquire shares pursuant to options exercisable or RSUs vesting within 60 days (on or before August 22, 2014) and the right to receive shares for deferred stock units within 60 days (on or before August 22, 2014) upon a director’s resignation.

Section 16(a) Beneficial Ownership Reporting Compliance Based upon a review of reports and written representations furnished to it, Medtronic believes that during fiscal year 2014 all filings with the SEC by its executive officers and directors complied with requirements for reporting ownership and changes in ownership of Medtronic’s common stock pursuant to Section 16(a) of the Exchange Act.

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

Overview

Medtronic’s Compensation Discussion and Analysis (“CD&A”) provides information about the Company’s business environment, executive compensation philosophy, and the components of its compensation programs for the Named Executive Officers (“NEOs”) noted below. This information helps readers better understand the Summary Compensation Table disclosure that follows after the CD&A.

Fiscal Year 2014 Named Executive Officers


Omar Ishrak		Chairman and Chief Executive Officer

Christopher J. O’Connell		Executive Vice President and President, Restorative Therapies Group

Michael J. Coyle		Executive Vice President and President, Cardiac and Vascular Group

Gary L. Ellis		Executive Vice President and Chief Financial Officer

Carol A. Surface		Senior Vice President and Chief Human Resources Officer

CD&A Executive Summary

Medtronic Business Overview

Medtronic is the world’s largest medical technology company, offering an unprecedented breadth and depth of innovative therapies to fulfill our Mission of alleviating pain, restoring health, and extending life. Last year, more than 10 million people benefited from our medical therapies, which treat cardiac and vascular diseases, diabetes, and neurological and musculoskeletal conditions.

With a global reach that extends to more than 140 countries, Medtronic’s Leadership must have a deep understanding of many universal healthcare challenges. Leaders leverage our experience, extensive partnerships, and the passion of more than 49,000 employees (including full-time equivalent employees) to help transform healthcare worldwide by improving outcomes, expanding access, and enhancing value.

Executive Compensation Philosophy

Our executive compensation programs aim to attract and retain talented executives through competitive pay and benefits as well as aligning compensation with Company performance through a strong pay for performance approach.

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We attract and retain talented executives by providing market competitive compensation consisting of base salary, target annual cash incentives, and target long-term cash and equity incentives, which we refer to as target total direct compensation (TTDC). We couple TTDC with comprehensive benefits to support retirement, health and wellness, and other life events. Medtronic’s Compensation Committee benchmarks compensation with a special focus on a select group of companies that best represent our competitive talent market.

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We emphasize pay for performance by basing least 75% of TTDC on short-term and long-term financial incentives with a heavy emphasis on long-term performance.

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The goals used for both short-term and long-term incentives align executives with shareholder goals by using annual and three-year performance measures that drive shareholder value. Short-term and long-term incentive goals are derived from Medtronic’s Board-approved annual operating plan and Board-approved long-term strategic plan, respectively.

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We also emphasize a culture of quality through executives’ annual incentive plan. Payouts are reduced if a quality compliance performance threshold is not achieved. The modifier cannot

increase payouts under the annual incentive plan. For fiscal year 2014, the quality modifier was based on reductions in U.S. Food and Drug Administration inspection observations and preventing warning letters; and is designed not to impede proactive quality actions such as product recalls and complaint handling procedures.

The members of the Compensation Committee are all independent directors, and they work closely with an independent outside compensation consulting firm, Frederic W. Cook & Co., Inc. (“Independent Consultant”), to ensure that they approach executive compensation planning with rigor and independence. The Independent Consultant confirms that Medtronic has a competitive, pay for performance compensation program with no problematic pay practices.

Overview of Executive Compensation Components

The following table summarizes the components and approximate weighting of TTDC for the Company’s NEOs:


Component	Purpose	Basic Design
Base Salary Weight: Up to 23%	• Market competitive cash compensation	• Targeted at the median of executive compensation comparison group

Annual Incentive Plan (Cash) Weight: Up to 19%	• Pay for performance against annual operating plan goals	• Targeted at the median of comparison group with actual pay between 0% – 200% of target • No minimum guaranteed payout • Actual payout based on performance against three equally weighted annual performance goals approved by the Board of Directors: - Revenue Growth - Earnings per Share (EPS) Growth - Cash Flow

Long-Term Incentive Plan

Restricted Stock Units Weight: 19% or Greater	• Stock Ownership and retention component	• Targeted at the median of executive compensation comparison group • Granted annually, vest 100% on 3^rdanniversary of grant date • Vesting is dependent on achieving a 3-year EPS cumulative compound annual growth threshold • Subject to clawback and forfeiture policy • Subject to stock ownership policy

Stock Options Weight: 19% or Greater	• Component to align pay for performance with shareholder value creation	• Targeted at the median of executive compensation comparison group • Granted annually, vest 25% per year starting on 1^st anniversary of grant date • Subject to clawback and forfeiture policy • Subject to stock ownership policy


Component	Purpose	Basic Design

Long-Term Performance Plan (Cash) Weight: 19% or Greater	• Component to align a portion of cash compensation to longer-term strategic financial goals	• Targeted at the median of comparison group with actual paid between 0% - 200% of target • Granted annually • Overlapping three fiscal year performance periods • Goals set at the start of each performance period • No minimum guaranteed payout • Actual payout based on performance against two equally weighted, Board- approved long-term goals: - Cumulative Revenue Growth - Return on Invested Capital

Benefits	• Provide executives with market competitive benefits to support health, retirement, and other life events	• Retirement Plan • Supplemental Retirement and Deferred Compensation Plans • Health/Wellness Plan • Life and Disability Plan • Same programs offered to broad based employee population with the exception of an Executive Physical Exam

Perquisites (Cash)	• $40,000 for CEO • $24,000 for other NEOs	• Paid annually • Modest perquisite to cover expenses such as financial and tax planning, memberships, etc. • No tax gross-up

Important Notes about Executive Compensation Components

We maintain the following compensation practices, which demonstrate our commitment to strong corporate governance:

•

Change-in-Control Policy: Compensation and benefits under Medtronic’s Change-in-Control (CIC) policy, which also includes equity awards that are replaced in connection with a change in control, are not triggered solely by a CIC event (“single trigger”). The compensation and benefits only apply in the event of a CIC when a participant is involuntarily terminated, without cause, or where a participant terminates employment for good reason, within a limited time period following the CIC (“double trigger”). Medtronic’s CIC policy also does not provide for any “golden parachute” excise tax gross-up;

•

Stock Ownership Policy: Our policy requires the CEO to maintain ownership of Medtronic stock equal to six (6) times annual salary and other NEOs to maintain Medtronic stock equal to three (3) times annual salary. Until the ownership guideline is met, the CEO must retain 75% of

after-tax Medtronic shares received through settlement of equity compensation awards and other NEOs must retain 50% of such shares. Once the guideline is met, executives must retain the same percentages of after-tax shares for one year following settlement of equity compensation awards. As of July 11, 2014, all NEOs are in compliance with the stock ownership and retention guidelines.

•

Forfeiture Policy: Medtronic’s Stock Award and Incentive Plan provides that stock awards are forfeited when an NEO terminates employment with Medtronic for any reason other than retirement, disability, death, or termination under specific circumstances related to a Change in Control;

•

Clawback Policy: Compensation policies include significant penalties for misconduct including a broad clawback policy that allows the Company to recapture equity compensation and other incentive awards paid to an executive who engages in misconduct. Misconduct includes, among other things, a violation of the Medtronic Code of Conduct, other fraudulent or illegal activity, violation of post-termination non-competition covenants, unauthorized disclosure of confidential information, and violation of business ethics or other business policies of Medtronic; and

•

Securities Trading Policy: NEOs (along with others) are prohibited from engaging in short sales of Medtronic securities (including share sales against the box) or engaging in purchases or sales of puts, calls or other derivative securities based on Medtronic securities. The policy also prohibits our NEOs from purchasing Medtronic securities on margin, borrowing against Medtronic securities held in a margin account or pledging Medtronic securities as collateral for a loan (unless the officers can clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities).

Consideration of “Say-on-Pay” and “Say-on-Frequency” Voting Results

The Compensation Committee reviewed shareholder and other stakeholder feedback along with the results of the 2013 shareholder “say-on-pay vote” in making compensation decisions during Fiscal Year 2014. Efforts to gather stakeholder feedback included periodic outreach to our largest shareholders. Through these discussions we have heard positive feedback about Medtronic’s executive compensation philosophy and the Proxy disclosure, and there were no concerns about pay practices. Based on this feedback and the 97% say-on-pay approval by shareholders in 2013, the Compensation Committee believes that shareholders support our compensation policies and practices. Therefore, the Compensation Committee continued to apply the same principles in determining Fiscal Year 2014 compensation actions.

The Compensation Committee and the Board continues to follow the results of the shareholder “say-on-frequency” vote at our 2011 annual meeting of shareholders. Because voters holding a substantial majority of shares expressed a preference for having a say-on-pay vote every year, the Board decided to hold annual say-on-pay votes. Therefore, our next say-on-pay vote will be held at our 2014 annual meeting of shareholders. We welcome the input of our shareholders on our compensation policies and compensation program at any time.

FY2014 Business Results

The company reported fiscal year 2014 revenue of $17.005 billion, an increase of 4 percent on a constant currency basis after adjusting for a $175 million negative foreign currency impact or 3 percent as reported. As reported, fiscal year 2014 net earnings were $3.065 billion or $3.02 per diluted share, a decrease of 12 percent and 10 percent, respectively. Fiscal year 2014 non-GAAP net earnings and diluted earnings per share were $3.868 billion and $3.82, flat and an increase of 2 percent, respectively. The GAAP to Non-GAAP reconciliation can be found on page 42 of this proxy statement.

Additionally, Medtronic’s annual incentive plan includes a quality compliance threshold that is intended to align management at all levels of the company with the highest standards of quality. The

threshold is set to drive continuous improvement to the company’s already high standards for quality and for FY14, the company missed threshold by a small amount.

In light of these business results, the Company’s annual incentive plan paid NEO’s at 103.53% of their target award and the long-term performance plan paid at 91.12% of their target award. The Annual Incentive Plan percent of target payout includes a five (5) percentage point reduction for not achieving the minimum Quality Compliance Threshold. The chart below shows the relationship between actual performance as a percent of plan performance and actual award payout as a percent of target award payout.

LOGO

Detailed calculations for the Annual Incentive Plan and the Long-Term performance Plan can be found on pages 40 and 41 of this proxy statement. In addition to ensuring that the annual and long-term cash incentive plan payouts align with performance, the Compensation Committee evaluates how the amount of annual cash compensation aligns with Medtronic’s performance when ranked against the executive compensation comparator companies. For purposes of this analysis, annual cash compensation represents the actual base salaries and annual bonuses paid for the last completed fiscal year. As shown in the table below for Fiscal Year 2014, Medtronic’s composite ranking of size, profitability, growth, and shareholder return (each component equally weighted) is at the 60th percentile. Medtronic’s ranking of total annual compensation for the CEO, CFO, and the average for other NEOs is lower than its performance ranking.


One-Year Average Size and Performance Composite Rank				Total Annual Compensation (TAC) Rank ($000)
Size	Profitability	Growth	Shareholder Return	CEO					CFO					Other Named Executive Officers
Johnson & Johnson (JNJ)	GILD	BCR	BSX	BMY	$	5,486	150	%	PFE	$	2,894	144	%	AMGN	$	2,481	203	%
Pfizer (PFE)	PFE	GILD	STJ	PFE	$	5,176	129	%	AMGN	$	2,420	187	%	PFE	$	2,125	115	%
Merck (MRK)	JNJ	JNJ	GILD	GILD	$	5,113	150	%	LLY	$	2,266	137	%	GILD	$	2,091	150	%
3M (MMM)	BCR	AMGN	AGN	AMGN	$	5,089	187	%	JNJ	$	2,117	120	%	JNJ	$	1,785	122	%
Abbott Laboratories (ABT)	MMM	MMM	BCR	ABT	$	5,050	104	%	BMY	$	2,029	125	%	LLY	$	1,724	137	%
Eli Lilly (LLY)	LLY	BMY	MMM	LLY	$	4,377	137	%	ABT	$	1,882	85	%	MRK	$	1,710	94	%
Amgen (AMGN)	AMGN	AGN	BMY	JNJ	$	4,334	120	%	MRK	$	1,600	65	%	BAX	$	1,650	118	%
Medtronic (MDT)	MDT	BAX	MRK	BAX	$	4,219	113	%	BAX	$	1,578	134	%	BMY	$	1,570	122	%
Bristol-Myers Squibb (BMY)	BMY	PFE	MDT	MMM	$	3,781	117	%	MMM	$	1,577	117	%	STJ	$	1,481	110	%
Gilead Sciences (GILD)	BAX	MDT	ZMH	MDT	$	3,575	*104*	%	GILD	$	1,534	150	%	MMM	$	1,394	135	%
Baxter International (BAX)	AGN	CFN	COV	AGN	$	3,188	99	%	MDT	$	1,498	*104*	%	ABT	$	1,322	105	%
Covidien (COV)	ZMH	ZMH	JNJ	MRK	$	3,120	72	%	COV	$	1,458	101	%	MDT	$	1,317	*104*	%
Stryker (SYK)	COV	LLY	BDX	COV	$	2,817	101	%	BSX	$	1,169	115	%	BCR	$	1,282	172	%
Becton Dickinson (BDX)	BDX	SYK	SYK	BCR	$	2,543	98	%	AGN	$	1,123	100	%	BDX	$	1,225	107	%
Allergan (AGN)	STJ	STJ	CFN	STJ	$	2,476	114	%	BCR	$	957	97	%	AGN	$	1,068	103	%
Boston Scientific (BSX)	ABT	COV	PFE	SYK	$	2,365	97	%	ZMH	$	875	83	%	COV	$	1,059	109	%
St. Jude Medical (STJ)	MRK	MRK	LLY	BDX	$	2,155	109	%	CFN	$	832	66	%	BSX	$	1,001	113	%
Zimmer Holdings (ZMH)	SYK	BDX	AMGN	BSX	$	2,142	115	%	BDX	$	806	107	%	ZMH	$	944	93	%
CareFusion (CFN)	CFN	BSX	BAX	CFN	$	2,099	66	%	SYK	$	773	66	%	SYK	$	901	96	%
C.R. Bard (BCR)	BSX	ABT	ABT	ZMH	$	1,834	82	%	STJ	$	749	114	%	CFN	$	735	69	%
MDT Rank = 67%	MDT Rank = 61%	MDT Rank = 54%	MDT Rank = 59%	MDT Rank = 54%					MDT Rank = 47%					MDT Rank = 44%
Medtronic Composite Rank = 60%				Medtronic Composite Rank = 48%

—	Medtronic Average Other Named Executive Officers represent Messrs. Coyle and O’Connell; Ms. Surface excluded because not a Named Executive Officer for the entire fiscal year 2014

—	Total Annual Compensation (TAC) consists of actual base salary paid and annual bonus earned for the last completed fiscal year as reported in the Summary Compensation Table

Summary of Fiscal Year 2014 Compensation Actions

Medtronic uses the same philosophy and process for all employees to align pay with performance. Base salary is positioned within a market median range to ensure competitive compensation based on individual employee factors such as performance, potential, expertise, and experience. The majority of employees receive base salary increases that are aligned with the rate of increase in their market median range. Higher performing employees are eligible to receive larger increases to position salary higher in the market range.

Incentive plan target payouts are positioned at the median of the market with the expectation that actual incentive payouts will appropriately reflect performance against the incentive plan goals.

The following summarizes the NEO compensation actions for Fiscal Year 2014, based on the competitive market median compensation data, company performance, and individual performance for Fiscal year 2013:

FY2014 Target Direct Compensation Changes:


NEO	FY14 Salary Increase			FY13 MIP Target			FY14 MIP Target			FY13 LTIP Target		FY14 LTIP Target
Omar Ishrak		4	%		140	%		140	%	$	8.5M	$	9.2M
Gary L. Ellis		8	%		90	%		90	%	$	2.4M	$	2.5M
Christopher J. O’Connell		7	%		85	%		85	%	$	2.2M	$	2.5M
Michael J. Coyle		8	%		85	%		85	%	$	2.2M	$	2.3M
Carol A. Surface		N/A			N/A			85	%		N/A	$	1.4M

Appointment of Chief Human Resources Officer:

Carol Surface, PhD, joined Medtronic in October in the role of Chief Human Resources Officer. Ms. Surface joined from Best Buy where she held the Chief Human Resources Officer position. The Compensation Committee, advised by the Independent Consultant, reviewed competitive market data to establish Ms. Surface’s compensation package. In addition, one-time new hire components were provided to offset outstanding, unpaid incentive awards at Ms. Surface’s previous employer. The following table summarizes the material components of Ms. Surface’s FY14 compensation:


Component	Amount		Comment
Base Salary	$	550,000		Market Median
Annual Incentive Target		85% of Base Salary		Market Median
Long-Term Incentive Target	$	1,425,000		Market Median
One-Time Restricted Stock Unit Grant	$	3,325,000		Offset lost equity
One-Time Cash Sign-on Bonus	$	475,000		Offset lost annual incentive

CEO Compensation Pay for Performance Analysis for Fiscal Year 2014

The chart below shows the relationship between Total Shareholder Return and CEO total compensation as reported in this Proxy’s Summary Compensation Table. The information shows that past and present CEO compensation for the last completed five fiscal years was aligned to the Company’s total shareholder return (TSR) over that same time period as well as compared to the total compensation median from Medtronic’s Executive Compensation Comparator Group.

Excluding the effect of one-time, sign-on cash and equity awards for Mr. Ishrak in FY2012, the chart shows that CEO total compensation remained relatively flat from FY2010 through FY2011, in line with a flat TSR over the same time period, decreased in FY2012 in line with a decrease in TSR, and increased from FY2013 through FY2014, in line with the increase in TSR over the same time period. From FY2010 through FY2013, CEO total compensation was conservatively positioned relative to the median total compensation for Medtronic’s executive compensation comparator group, and in FY2014 CEO total compensation was positioned at the median of this group. The one-time, sign-on cash and equity awards for Mr. Ishrak in FY2012 represent a common approach to offset the value of forfeited compensation and benefit value at Mr. Ishrak’s former employer and do not represent components of ongoing total compensation.

LOGO

The following section provides more detailed information about our executive compensation for Fiscal Year 2014.

CD&A DETAILED INFORMATION

This section of the CD&A provides details about Medtronic’s executive compensation program design, which was summarized in the preceding Executive Summary section. The section begins with two charts showing the mix of TTDC components, one for the CEO and one for the average of the other NEOs, followed by detailed descriptions of each component with relevant Fiscal Year 2014 information:

Component Mix of Target Total Direct Compensation

LOGO

Fiscal Year 2014 Compensation and Incentive Plan Design

Fiscal Year 2014 Annual Base Salaries: Our philosophy is to maintain base salary within a competitive median range. The range allows for pay decisions to take into account individual factors such as performance, potential, expertise, and experience. This is the same approach that is used for all employees.

To establish the median range, the Independent Consultant reporting to the Compensation Committee analyzes proxy information from the executive compensation comparator companies approved by the Committee as the best companies to benchmark competitive pay for Medtronic executives. The analysis identifies the median range using a regression formula to adjust for compensation differences attributed to company size. The Consultant presents to the Committee the analysis that identifies the median base salary range for the CEO and each NEO. Using this market data, the Committee approves base pay increases to maintain base salary within the median range, again, taking into account individual factors such as performance, potential, expertise, and experience.

The table below shows the Fiscal Year 2014 base salary increases for the CEO and each NEO.


Name	FY2013 Salary (000’s)		FY2014 Salary (000’s)		% Increase
Omar Ishrak	$	1,404	$	1,460		4	%
Gary L. Ellis	$	717	$	776		8	%
Christopher J. O’Connell	$	631	$	676		7	%
Michael J. Coyle	$	671	$	726		8	%
Carol A. Surface	$	N/A	$	550		N/A

Fiscal Year 2014 Annual Incentive Target Pay: Using the same analytical approach described for the annual base salary, the Independent Consultant to the Compensation Committee identifies the median range for annual incentive target pay for the CEO and each NEO, which is set as a percentage of annual base salary. For Fiscal Year 2014, Medtronic did not make changes to CEO or NEO target annual incentive pay that was established in Fiscal Year 2013. The table below shows CEO and NEO target annual incentive pay as a percentage of base salary.


Name	FY2013 MIP Target			FY2014 MIP Target			% Increase
Omar Ishrak		140	%		140	%		0	%
Gary L. Ellis		90	%		90	%		0	%
Christopher J. O’Connell		85	%		85	%		0	%
Michael J. Coyle		85	%		85	%		0	%
Carol A. Surface		N/A			85	%		N/A

Fiscal Year 2014 Annual Incentive Plan Design: Our incentive plan design was established following an extensive review completed by the Compensation Committee, Independent Consultant, and Medtronic management. The review considered shareholder feedback, competitive benchmarking, and Medtronic’s short-term and long-term strategic imperatives. The following details the key design elements:

•

Payout range aligned with market practice. Payout for each incentive plan component starts at 50% of target incentive and is paid up to a maximum of 200% of target incentive.

•

Results below the minimum performance level for a component pay 0% of target incentive for that component. There is no minimum guaranteed payout.

•

Diluted Earnings Per Share performance is a total plan payout qualifier. Results below the minimum performance level for the diluted EPS component result is no plan payout regardless of results for the other components.

•

Target incentive is paid at 100% achievement of three financial targets. As detailed in the next section, these three targets come directly from the Board-approved Annual Operating Plan and represent the best financial measures of annual executive performance expectations.

Fiscal Year 2014 Annual Incentive Plan Performance Measures: At the Compensation Committee’s June 2013 meeting, the Committee approved the targets for each of the three equally weighted performance measures, which come directly from Medtronic’s Board-approved Annual Operating Plan.

The following provides details about the performance measures, including a comparison to Medtronic’s executive compensation comparator company median (if available):


Measure	Rationale	Performance Target	Weight
Revenue Growth (Constant Currency)	Top line growth continues to be a key Company strategy, reflecting market development, market penetration, and market share performance	3.5% growth over Prior Year	1/3 of Payout

Diluted Earnings Per Share Growth (Non-GAAP)	Earnings both from operating efficiency and financial management is a key driver of returns to shareholders	$3.84 Per Share; 3.8% over Prior Year	1/3 of Payout

Cash-Flow Indicator	Cash flow generated from operations plus management of short-term receivables, inventory, and payables is a key driver of Medtronic’s ability to re-invest and provide returns to shareholders	$3.802 Billion	1/3 of Payout

Quality Compliance Modifier	Maintain high quality system compliance measured through FDA inspection results	Maximum Score of 25 Points	Reduces payout by five (5) percentage points

For purposes of the annual incentive calculation, “diluted earnings per share” refers to non-GAAP diluted earnings per share, a measure which includes adjustments for certain charges. A reconciliation of the GAAP to non-GAAP diluted earnings per share is included in the “Adjustments of EPS Results applicable to Short and Long-Term Incentives” section on page 42.

Revenue Growth is defined as the annual growth rate in revenue excluding the effects of foreign exchange rates. The result is expressed as a percentage growth rate.

Cash Flow Indicator is defined as profit after tax exclusive of special charges, plus or minus changes in accounts receivable, inventories, and accounts payable. The cash flow indicator only includes changes in assets and liabilities that best reflect annual operations. This calculation excludes the effects of foreign exchange rates.

Quality Compliance Modifier Performance Threshold uses a score measured as follows:

FDA Inspections = Average Number of Findings per Inspection X 10 points

Non-Material FDA Warning Letter = 1 point per finding

Material FDA Warning Letter = 25 points

Fiscal Year 2014 Long-Term Incentive Plan (LTIP) Target Pay: Using the same analytical approach described for annual base salary and short-term incentives, the Independent Consultant identifies the median range for long-term incentive target pay for the CEO and each NEO. Target LTIP is expressed as a fixed dollar value from which the underlying shares are determined based on the market price at the close of business on the grant date.

The target is split equally between three LTIP components; stock options, restricted stock units, and a three-year cash incentive planned called the Long-Term Performance Plan (LTPP). For example, the hypothetical target LTIP of $2,400,000 would be granted as $800,000 stock options (full-value equivalent), $800,000 restricted stock units, and $800,000 under the LTPP. Note that stock options are stated in a full-value equivalent, using a four-to-one conversion ratio for the purposes of setting the LTIP target. This value conversion ratio will differ from Medtronic’s Black-Scholes grant date valuation used for accounting expense purposes under FASB ASC Topic 718.

At the June 2013 Compensation Committee meeting, LTIP targets were approved for Fiscal Year 2014. The following table shows the target pay for LTIP awards granted in Fiscal Year 2014 compared to Fiscal Year 2013.


Name	FY2013 LTIP Target (000’s)		FY2014 LTIP Target (000’s)		% Increase
Omar Ishrak	$	8,450	$	9,200		8.9	%
Gary L. Ellis	$	2,400	$	2,500		4.2	%
Christopher J. O’Connell	$	2,200	$	2,500		13.6	%
Michael J. Coyle	$	2,200	$	2,300		4.5	%
Carol A. Surface	$	N/A	$	1,425		N/A

Fiscal Year 2014 Long-Term Incentive Plan Components:

Stock Options: Stock options are a performance-based compensation component that ties one-third of the target LTIP value to stock price appreciation and shareholder value creation. Stock options only have value when the market price exceeds the exercise price. All stock option grants have an exercise price that is equal to the Medtronic market close stock price on the date of grant. Stock options have a ten year term and vest in equal increments of 25% each year beginning one year after the date of grant.

Restricted Stock Units (RSU): Restricted stock units represent the second one-third of the target LTIP value that is primarily intended to deliver a market competitive level of Medtronic stock ownership. The RSU grants cliff vest (100%) on the third anniversary of the grant date. Unlike the more commonly used time-based RSUs, Medtronic’s RSUs include a three-year minimum performance threshold that must be met before the RSUs vest. For Fiscal Year 2014 RSU grants, the performance threshold was set at an Earnings Per Share cumulative compound annual growth rate (cumulative CAGR) of 3%. The threshold is intentionally less than Medtronic’s target performance, consistent with the primary stock ownership intention of RSU grants; however, the cumulative CAGR is still a challenging performance threshold.

Long-Term Performance Plan (LTPP): LTPP is a three-year cash incentive plan that is based on long-term measures of Company performance. Our LTPP design was established following an extensive review completed by the Compensation Committee, Independent Consultant, and Medtronic management. The review considered shareholder feedback, competitive benchmarking, and Medtronic’s short-term and long-term strategic imperatives.

The primary intent is to tie the final one-third of target long-term incentive pay to longer term financial performance measures that are not influenced by variability in the stock market. LTPP pays a cash award after the end of the three fiscal year performance period, provided a minimum level of diluted EPS is attained. A new LTPP award grant and performance period is established at the beginning of each Fiscal Year, as part of the LTIP award grant. Because three-year performance periods overlap, performance goals are established at the start of each performance period and, once established, do not change.

The following details the key design elements:

•

Use two measures: three-year revenue growth and three-year return on invested capital (“ROIC”);

•

Align payout range with market practice. Payout for each component starts at 50% of target incentive and is paid up to a maximum of 200% of target incentive;

•

Performance below the minimum threshold for each component pays 0% of target;

•

Revenue growth aligns with expectations communicated to shareholders. Revenue growth is measured using GAAP reported results to reflect organic and acquired growth, but excludes the effects of foreign currency exchange rates;

•

ROIC uses non-GAAP reported results, typically excluding one-time charges but including operating results from acquisitions and divestitures to reinforce accountability for investment decisions; and

•

ROIC and Revenue Growth are equally weighted (50% each) so that the two measures balance each other.

Fiscal Year 2014 — 2016 LTPP Performance Measures and Targets: The Compensation Committee approved the LTPP performance measures and targets for Fiscal Year 2014 — 2016 at the June 2013 meeting. The following table provides detailed information about each performance measure:


Measure	Rationale	Targets	Weight
Three-year Revenue Growth	Uses a cumulative compound annual growth rate (Cumulative CAGR) over three fiscal years, which is a more rigorous measure of sustained revenue growth.	5% Cumulative CAGR	50%
ROIC	ROIC measures all components of management’s responsibility to generate sustained, long-term returns on invested capital.	14% average ROIC	50%

Revenue growth is measured as a three-year cumulative compound annual growth at constant currency but otherwise including all other GAAP components. ROIC is measured as the GAAP, rolling 12 month profit after tax, excluding one-time items plus interest expense net of tax, divided by the difference of the three-year average asset base less average non-interest bearing liabilities.

Fiscal Year 2014 Annual and Long-Term Incentive Plan Payouts

Fiscal Year 2014 Annual Incentive Plan Results and Payouts: The Committee reviewed performance against the incentive plan targets at its May, 2014 meeting and approved the resulting CEO and NEO annual incentive plan payout percentage and payments as follows:

Incentive Plan Payout Percentage:


Measure	Target			Result			Weight			% Payout
Revenue Growth		3.5	%		3.5	%		33.3	%		33.50	%
Earnings Per Share	$	3.84		$	3.82			33.3	%		32.47	%
Cash Flow Indicator	$	3.802B		$	3,908B			33.3	%		42.57	%
Total								100.0	%		108.53	%
Quality Compliant Modifier (Inspection Performance Score)		25 Points	⁽¹⁾		28 Points			N/A			-5.00	%

Final MIP Payout Percentage											103.53	%

⁽¹⁾	Results must be at or lower than the Target.

Incentive Plan Payments:


Name	FY14 Payout Percent			FY14 Target Incentive⁽¹⁾			FY14 Actual Award⁽²⁾
Omar Ishrak		103.53	%		140	%	$	2,116,385
Gary L. Ellis		103.53	%		90	%	$	723,054
Christopher J. O’Connell		103.53	%		85	%	$	594,883
Michael J. Coyle		103.53	%		85	%	$	638,884
Carol A. Surface⁽³⁾		103.53	%		85	%	$	484,003

⁽¹⁾	Percent of annual base salary

⁽²⁾	Annual base salary multiplied by target incentive multiplied by payout percent

⁽³⁾	Per hire agreement, results based on eligible earnings equal to Ms. Surface’s full-year base salary for FY14.

Fiscal Year 2012 — 2014 Long-Term Performance Plan (LTPP) Payout Results: At its May 2014 meeting, the Compensation Committee certified the results for the LTPP performance period that began in Fiscal Year 2012 and was completed at the end of Fiscal Year 2014. Payments of awards for this LTPP performance period were made during the first fiscal quarter of 2015 and can be found in the “Non-Equity Incentive Plan Compensation” column of the 2014 Summary Compensation Table on page 49.

The table below shows the Fiscal Year 2012 — Fiscal Year 2014 LTPP performance goals, results, and calculated payout.


Year	Relative Revenue Growth⁽¹⁾			ROIC⁽²⁾
FY2012		4.4	%		14.2	%
FY2013		2.5	%		14.1	%
FY2014		2.5	%		13.3	%
Total/Average		3.1	%		13.8	%

Relative Revenue Percentile Rank		44^th Percentile			13.8	%

FY2012 — FY2014 Target		50^th Percentile			14.0	%
Payout Level		88.89	%		95.62	%
Objective Weight		67	%		33	%
Weighted Payout Percent		59.56	%		31.56	%
Total Payout as a Percent of Target					91.12	%

⁽¹⁾

Three-year relative revenue growth is ranked against a select peer group of 19 companies. These 19 companies include the same companies as the Executive Compensation Peer Companies except that pharmaceutical companies and companies not in the health care industry are excluded. The target performance for the three-year relative revenue growth measure is set at the 50th percentile of the comparator companies. Results are interpolated to pay the maximum award at the 75th percentile and the minimum award at the 25th percentile. Performance below the 25th percentile results in no payout for this component. Results are calculated as a cumulative compound annual growth rate and reported in accordance with GAAP excluding the Physio-Control divestiture.

⁽²⁾	Three-year average ROIC is measured against an absolute target, which is established based on Medtronic’s AOP and analysis of Medtronic comparator companies.

Adjustments of EPS Results applicable to Short and Long-Term Incentives


	Fiscal Year Ended April 25, 2014			Explanation of Non-Recurring Adjustments
Diluted EPS, as reported	$	3.02
*Significant Non-Recurring Adjustments*
Special charges		0.03		After-tax charitable cash donation made to the Medtronic Foundation.
Restructuring charges, net		0.06		After-tax charges related to the fiscal year 2014 restructuring initiative, charges related to the continuation of our fiscal year 2013 restructuring initiative partially offset by the reversal of previous restructuring charges related to our fourth quarter fiscal year 2013 restructuring initiative.
Certain litigation charges, net		0.69		After-tax certain litigation charges, net primarily related to the global patent settlement agreement with Edwards Lifesciences Corporation, accounting charges for probable and reasonably estimable INFUSE product liability litigation, patent and Other Matters litigation, and other litigation.
Acquisition-related items		0.08		Includes impairment of long-lived assets related to the Ardian acquisition, net income related to the change in fair value of contingent consideration payments associated with acquisitions subsequent to April 29, 2009 and IPR&D impairment related to a recent acquisition in the Endovascular business.
Certain tax adjustments		(0.06	)	Represents a tax benefit associated with the resolution of certain issues in the fourth quarter of fiscal year 2014 with the U.S. Internal Revenue Services (IRS). The years under review by the IRS were with respect to fiscal years 2009 through 2011.
Non-GAAP diluted EPS	$	3.82

Other Benefits and Perquisites

Medtronic provides broad-based benefit plans to all of its employees, including the NEOs. All employees participate in the same health care plans, and Medtronic does not provide NEOs with any different or additional benefit plans, with the exception of a required executive physical exam and a business allowance. Medtronic NEOs are required to complete a physical exam annually and, in the event that requirement exceeds regular plan coverage, the executives can receive reimbursement for up to $2,000 of the cost that exceeds the regular plan coverage. Medtronic’s business allowance policy is described in detail below. The broad-based benefit plans include:

Qualified Retirement Plans:. Medtronic sponsors a number of tax-qualified retirement plans for its employees. In the United States, Medtronic changed its retirement plans effective May 1, 2005 in order to provide then-current employees and employees hired after that date a choice of retirement plans. Employees hired prior to May 1, 2005 had the option of continuing in the final average pay pension plan referred to as the Medtronic Retirement Plan (MRP) or electing to participate in one of the new plans. Employees hired after that date choose to participate in one of the new retirement plans: the Personal Pension Account or the Personal Investment Account. The Personal Pension Account is a cash balance plan and, along with the MRP, is part of the Medtronic, Inc. Retirement Plan. The Personal Investment Account is part of the Company’s tax-qualified 401(k) Plan. Additional details regarding these plans are provided on page 57 of this proxy statement.

Supplemental Retirement Plans:. The Company offers a Nonqualified Retirement Plan Supplement (“NRPS”) designed to provide all eligible employees, including but not limited to the NEOs, with benefits which supplement those provided under certain of the tax-qualified plans maintained by Medtronic. The NRPS is designed to restore benefits lost under the Personal Pension Account, Personal Investment Account or the Medtronic Retirement Plan due to covered compensation limits established by the Internal Revenue Code. The NRPS also restores benefits for otherwise eligible compensation deferred into the Medtronic, Inc. Capital Accumulation Plan Deferral Program (the “Capital Accumulation Plan”). The NRPS provides employees with no greater benefit than they would have received under the qualified plan in which they participate were it not for the covered compensation limits and deferrals into the Capital Accumulation Plan.

Nonqualified Deferred Compensation Plan:. The Company provides all vice presidents, including our NEOs, and highly-compensated sales employees, with a market competitive nonqualified deferred compensation plan through the Capital Accumulation Plan. Our plan allows these employees to make voluntary deferrals from their base pay and incentive payments, which are then credited with gains or losses based on the performance of selected investment alternatives. These alternatives are the same as those offered in our tax qualified 401(k) Plan for all employees. There are no Company contributions to the plan or Company subsidized returns.

Business Allowance:. Medtronic does not provide any perquisites such as Company-provided automobiles, aircraft, club memberships, financial and tax advisors, etc. Medtronic provides NEOs with a market competitive business allowance. The NEOs may spend their business allowance at their discretion for expenses such as financial and tax planning, automobiles or club memberships. The business allowance is paid as taxable income, and Medtronic does not track an executive’s use of his or her business allowance. The annual business allowances provided to our NEOs in Fiscal Year 2014 ranged from $24,000 to $40,000. These amounts are sometimes a significant part of an expatriate’s total compensation. Additionally, it is occasionally appropriate for NEOs to be accompanied during business travel by their spouses. The expenses associated with such travel, while rare, are considered taxable income. The referenced amounts are included in the “All Other Compensation” column of the Summary Compensation Table.

Change of Control:. Compensation in a change-of-control situation is designed: (1) to protect the compensation already earned by executives and to ensure that they will be treated fairly in the event of a change of control; and (2) to help ensure the retention and dedicated attention of key executives critical to the ongoing operation of the Company. Our change-of-control policy supports these

principles. We believe shareholders will be best served if the interests of our executive officers are aligned with shareholders’ interests, and we believe providing change-of-control benefits should incent senior management to objectively evaluate potential mergers or transactions that may be in the best interests of shareholders. Our change-of-control agreements are discussed in more detail in the “Potential Payments Upon Termination or Change of Control” section of “Executive Compensation.” Other than Messrs. Coyle and Ishrak’s agreements, we do not have individual employment contracts with our NEOs relating to compensation other than those associated with a change of control.

Compensation Decision-Making Process

Role of Compensation Committee:

The Compensation Committee establishes Medtronic’s compensation philosophy, program design and administration rules, and is the decision-making body on all compensation matters related to our NEOs. The Committee solicits input from an independent outside compensation consultant and relies on the consultant’s advice. For more information on the Compensation Committee, its members and its duties as identified in its charter, please refer to the section entitled “Governance of Medtronic — Compensation Committee” beginning on page 19 of this proxy statement.

Independent Compensation Consultant:

The Compensation Committee has engaged Frederic W. Cook & Co., Inc., an independent outside compensation consulting firm (the “Independent Consultant”), to advise the Compensation Committee on all matters related to executive officer compensation. Specifically, the Independent Consultant conducts an annual competitive market analysis of total compensation for NEOs, provides relevant market data, updates on compensation trends and regulatory developments, and counsels on program designs and specific compensation decisions related to our CEO and other executives.

In June 2013, the Compensation Committee adopted enhanced independence standards for outside consultants that mirror the New York Stock Exchange (“NYSE”) listing standards. This policy established an assessment framework to confirm and report on a consultant’s independence. It also requires a consultant to confirm its independent status according to the Compensation Committee’s standards. The Compensation Committee reviews and confirms the independence of its outside consultants on an annual basis.

In light of the new NYSE listing standards, the Compensation Committee has considered the independence of the Independent Consultant. In connection with this process, the Compensation Committee has reviewed, among other items, a letter from the Independent Consultant addressing its independence and the members of the consulting team serving the Committee, including the following factors: (i) other services provided to us by the Independent Consultant, (ii) fees paid by us as a percentage of the Independent Consultant’s total revenue, (iii) policies or procedures of the Independent Consultant that are designed to prevent conflicts of interest, (iv) any business or personal relationships between the senior advisor of the consulting team with a member of the Compensation Committee, (v) any Company stock owned by the senior advisor or any member of his immediate family, and (vi) any business or personal relationships between our executive officers and the senior advisor. The Compensation Committee discussed these considerations and concluded that the work performed by the Independent Consultant and its senior advisor involved in the engagement did not raise any conflict of interest.

Role of Chief Executive Officer in Compensation Decisions:

In making compensation decisions for executive officers reporting to the CEO, the Compensation Committee solicits the views of our CEO and the Independent Consultant. The CEO is not present during Compensation Committee executive sessions, and does not make recommendations to the Compensation Committee, about his own compensation.

Executive Compensation Peer Companies and Competitive Market:

The Compensation Committee considers relevant market pay practices when establishing executive compensation levels and evaluating compensation programs including base salary, short-term and long-term incentives. In order to ensure the competitiveness of compensation programs, the Committee has established a peer group of companies for benchmarking purposes. The identification of these companies is based on discussions with, and recommendations from, Frederic W. Cook & Co., Inc. The selection criteria were based on companies in the health care equipment, pharmaceutical, and biotechnology industries that position Medtronic in the median range of the group, on average, in various measures of Company size. The following table lists Medtronic’s executive compensation peer group for Fiscal Year 2014, including Medtronic’s ranking relative to these companies based on financial data available at the time of consideration:


Company Name	Latest 4 Quarters ($Mil.)						Latest Quarter ($Mil.)						FYE Total Employees			12/31/2013 Market Capital.			Composite Percentile Rank
Company Name	Net Revenue			Operating Inc. (EBIT)			Total Assets			Total Equity			FYE Total Employees			12/31/2013 Market Capital.			Composite Percentile Rank
Pfizer	$	53,027		$	18,966		$	175,521		$	77,969			91,500		$	198,515			97	%
Johnson & Johnson	$	70,515		$	18,589		$	126,933		$	69,804			127,600		$	253,416			97	%
Merck	$	44,450		$	8,900		$	106,419		$	47,419			83,000		$	146,477			87	%
3M	$	30,689		$	6,530		$	33,604		$	17,796			87,677		$	94,426			77	%
Abbott Laboratories	$	27,030		$	4,767		$	44,132		$	23,696			91,000		$	59,265			76	%
Amgen	$	18,086		$	6,193		$	57,073		$	21,728			18,000		$	86,031			68	%
Medtronic	$	16,764		$	4,936		$	36,468		$	18,744			46,659		$	57,390			67	%
Eli Lilly	$	23,262		$	5,823		$	33,966		$	16,887			38,350		$	57,459			66	%
Bristol-Myers Squibb	$	16,135		$	2,933		$	36,804		$	14,726			28,000		$	87,538			61	%
Baxter International	$	14,644		$	3,345		$	25,250		$	7,749			51,000		$	37,769			55	%
Gilead Sciences	$	10,670		$	4,497		$	22,468		$	10,884			5,000		$	115,205			50	%
Covidien	$	10,235		$	2,259		$	19,918		$	9,242			38,500		$	30,834			48	%
Stryker	$	8,891		$	2,099		$	14,883		$	8,737			22,010		$	28,434			38	%
Becton Dickinson	$	8,054		$	1,621		$	12,149		$	5,043			29,979		$	21,435			31	%
Boston Scientific	$	7,126		$	929		$	16,917		$	6,563			24,000		$	16,093			29	%
Allergan	$	6,088		$	1,874		$	10,145		$	6,086			10,800		$	33,009			26	%
St. Jude Medical	$	5,451		$	1,441		$	9,965		$	4,261			15,000		$	18,078			18	%
Zimmer Holdings	$	4,563		$	1,349		$	9,357		$	6,136			9,300		$	15,934			14	%
CareFusion	$	3,543		$	660		$	8,492		$	5,402			15,000		$	8,462			8	%
C.R. Bard	$	3,021		$	735		$	4,165		$	1,504			12,200		$	10,433			5	%
75th Percentile	$	25,146		$	6,008		$	40,468		$	19,762			67,000		$	90,982
Mean	$	19,236		$	4,922		$	40,430		$	19,033			41,996		$	69,674
Median	$	10,670		$	2,933		$	22,468		$	9,242			28,000		$	37,769
25th Percentile	$	6,607		$	1,531		$	11,147		$	6,111			15,000		$	19,756
Medtronic Rank		63	%		68	%		72	%		74	%		70	%		56	%

--	Companies are ranked in descending order based on overall average percentile rank

--	All financial and market data are taken from Standard & Poor’s Compustat Service

--	Revenue excludes nonoperating income, gain on sale of securities or fixed assets, discontinued operations, excise taxes and royalty income

--	Operating income (EBIT) excludes special items such as restructuring charges

Our objective is to establish market competitive compensation within a range on either side of the market median benchmark established for each position compared to our executive compensation peer group. The market median ranges are +/- 15% for base salary and target annual incentives and +/- 20% for Long-Term Incentives and Target Total Direct Compensation. Consistent with our pay-for-performance philosophy, we establish an award range for short-term and long-term incentives that generates above-market pay for above-market performance and below-market pay for below-market performance.

In addition to the competitive market information, the Compensation Committee also reviews information about performance, potential, expertise, and experience for each NEO. Base salary decisions are based on these factors to ensure that salaries are market competitive as specified in Medtronic’s compensation philosophy.

Risk Assessment

Compensation policies and practices are also designed to discourage inappropriate risk taking. While you should refer to the section entitled “Governance of Medtronic — Board Role in Risk Oversight” beginning on page 16 of this proxy statement for a discussion of the Company’s general risk assessment of compensation policies and practices, mitigating factors with respect to our NEOs include the following:

•

The NEOs are subject to stock ownership guidelines which require Medtronic’s CEO to maintain ownership of Medtronic stock equal to six (6) times annual salary and the other NEOs to maintain Medtronic stock equal to three (3) times annual salary. As of July 11, 2014, all directors and NEOs are in compliance with the stock ownership and retention guidelines; however, due to their more recent appointments, Mr. Donnelly and Ms. Reddy are continuing to make progress towards the required ownership guidelines;

•

Incentive plans are more heavily weighted towards long-term performance to reduce the incentive to impact adversely long-term performance in favor of maximizing performance in one year;

•

Improper payments or gains from incentives and equity compensation are subject to clawback;

•

Short-term and long-term cash incentive payments are capped at 200% of target payout;

•

Short-term and long-term cash incentive performance targets are established at the beginning of each performance period and are not subject to change. Short and long-term incentive programs use different measures of performance. Short-term cash incentives focus on annual operating plan financial measures such as revenue growth, earnings per share, and cash flow. Long-term cash incentives measure shareholder three-year ROIC and three-year revenue growth relative our long-term strategic expectations communicated to shareholders; and

•

The Compensation Committee retains discretionary authority to override any incentive plan’s formulaic outcome in the event of unforeseen circumstances.

Share Ownership, Share Retention, and Clawback Policies

Equity Holding: In Fiscal Year 2012, Medtronic implemented executive stock ownership and retention guidelines that require the CEO to maintain ownership of Medtronic stock equal to six (6) times annual salary and other NEOs to maintain Medtronic stock equal to three (3) times annual salary. Until the ownership guideline is met, the CEO must retain 75% of after-tax Medtronic shares received through settlement of equity compensation awards and other NEOs must retain 50% of such shares. Once the guideline is met, the CEO must retain 75% of after tax shares for one year following settlement of equity compensation awards and other NEO’s must retain 50% of such shares for one year following settlement of equity compensation awards. For purposes of complying with the guidelines, stock is not considered owned if pledged as collateral for a loan. Shares owned outright, legally or beneficially, by an officer or his or her immediate family members, after-tax “in the money” vested but unexercised stock options, after-tax unvested restricted stock units, and shares held in the tax-qualified and nonqualified retirement and deferred compensation plans count towards the guideline. Compliance with these guidelines is measured at the beginning of the first fiscal month of a new fiscal year by the internal team at the Company responsible for handling executive compensation matters and the results of such measurement are reported to the Nominating and Corporate Governance Committee or Compensation Committee, as applicable, after the measurement. On each

measurement date, compliance is measured using each executive officer’s base salary then in effect and the average closing price per share of the Company’s common stock on the New York Stock Exchange for the six calendar months preceding the measurement date. As of July 11, 2014, all NEOs are in compliance with the stock ownership and retention policy. For stock options, net after-tax profit shares are those shares remaining after payment of the option’s exercise price and income taxes. For share issuances (restricted stock unit vesting), net gain shares are those shares remaining after payment of income taxes.

Hedging and Pledging Policy: Our insider trading policy prohibits our NEOs and directors (along with others) from engaging in shorts sales of Medtronic securities (including share sales against the box) or engaging in purchases or sales of puts, calls or other derivative securities based on Medtronic securities. The policy also prohibits our NEOs from purchasing Medtronic securities on margin, borrowing against Medtronic securities held in a margin account or pledging Medtronic securities as collateral for a loan (unless the officers can clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities).

Sale and Transfer of Awards: All stock option, restricted stock, restricted stock unit and performance-based restricted stock/restricted stock unit awards are granted under plans which specifically prohibit the sale, assignment and transfer of awards granted under the plan with limited exceptions such as the death of the award recipient. In addition, the Compensation Committee may allow an award holder to assign or transfer an award.

Incentive Compensation Forfeiture: Medtronic has a comprehensive Incentive Compensation Forfeiture Policy, which is designed to recoup improper payments or gains paid to executive officers. If the Board determines that any executive officer has received an improper payment or gain, which is an incentive payment or grant paid or awarded to the executive officer due to misconduct, the executive officer must return the improper payment or gain to the extent it would not have been paid or awarded had the misconduct not occurred, including interest on any cash payments. “Misconduct” means any material violation of the Medtronic, Inc. Code of Conduct or other fraudulent or illegal activity for which an executive officer is personally responsible as determined by the Board. All executive officers are required to agree to this policy in writing.

Equity Compensation Forfeiture: The Company may require the return or forfeiture of cash and/or shares received or receivable in certain circumstances in which an employee has a termination of employment from the Company or any affiliate. The Company may exercise its ability to require forfeiture of awards if the employee receives or is entitled to receive delivery of shares or proceeds under an equity award program within six months prior to or twelve months following the date of termination of employment if the current or former employee engages in any of the following activities: (a) performing services for or on behalf of any competitor of, or competing with, the Company or any affiliate; (b) unauthorized disclosure of material proprietary information of the Company or any affiliate; (c) a violation of applicable business ethics policies or business policies of the Company or any affiliate; or (d) any other occurrence determined by the Compensation Committee of the Board of Directors.

Tax and Accounting Implications

The Compensation Committee structures the annual and long-term incentive plans in a manner that is intended to preserve the Company’s tax deductions under Section 162(m) of the Internal Revenue Code. However, the Compensation Committee may authorize compensation arrangements that are not fully tax-deductible but which promote other important objectives that are in the long-term interests of Medtronic and its shareholders. For example, in certain circumstances, the payment of base salary or business allowance or the vesting of restricted stock units may not be fully deductible.

In addition, the Compensation Committee structures all deferred compensation within the meaning of Section 409A of the Internal Revenue Code in a manner that is intended to prevent NEOs from being subject to the excise tax under Section 409A. The Compensation Committee also considers accounting treatment in the design of the long-term incentive plan.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Company has reviewed and discussed with management the section of this proxy statement entitled “Compensation Discussion and Analysis” required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this proxy statement.

COMPENSATION COMMITTEE:

Kendall J. Powell, Chair

Scott C. Donnelly

Richard H. Anderson

Denise M. O’Leary

EXECUTIVE COMPENSATION

2014 SUMMARY COMPENSATION TABLE

The following table summarizes all compensation for each of the last three fiscal years awarded to, earned by or paid to the Company’s Chief Executive Officer, Chief Financial Officer, and three other most highly compensated executive officers during fiscal year 2014 (collectively, the named executive officers or “NEOs”). Please refer to the section entitled “Compensation Discussion and Analysis” beginning on page 28 of this proxy statement for a description of the compensation components for Medtronic’s NEOs. A narrative description of the material factors necessary to understand the information in the table is provided below, following the table.


Name and Principal Position	Fiscal Year		Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
Omar Ishrak		2014	$	1,459,080	$	0	$	3,067,051	$	2,658,962	$	4,682,931	$	198,207	$	52,614	$	12,118,846
Chairman and Chief Executive Officer		2013	$	1,402,962	$	0	$	2,817,024	$	2,099,144	$	2,417,098	$	165,917	$	73,741	$	8,975,886
Chairman and Chief Executive Officer		2012	$	1,168,269	$	1,553,042	$	19,069,565	$	2,150,585	$	986,958	$	0	$	97,221	$	25,025,639

Gary L. Ellis		2014	$	774,866	$	0	$	833,009	$	744,075	$	1,452,014	$	537,582	$	34,940	$	4,376,485
Senior Vice President and Chief Financial Officer		2013	$	716,461	$	0	$	800,029	$	615,487	$	1,302,580	$	401,356	$	37,186	$	3,873,099
		2012	$	688,731	$	0	$	800,008	$	632,116	$	654,806	$	424,302	$	150,449	$	3,350,412


Christopher J. O’Connell		2014	$	675,135	$	0	$	833,009	$	744,075	$	1,262,793	$	235,502	$	35,340	$	3,785,854
Executive Vice President & President, Restorative Therapies Group		2013	$	630,212	$	0	$	734,014	$	565,564	$	1,168,604	$	252,198	$	37,776	$	3,388,368
		2012	$	589,769	$	0	$	734,015	$	579,173	$	382,243	$	239,509	$	124,710	$	2,649,420



Michael J. Coyle		2014	$	724,942	$	0	$	767,012	$	686,416	$	1,306,793	$	—	$	106,257	$	3,591,420
Executive Vice President & President, Cardiac and Vascular Group		2013	$	670,154	$	0	$	734,014	$	565,564	$	1,210,414	$	—	$	84,549	$	3,264,695
		2012	$	626,769	$	0	$	734,015	$	579,173	$	544,938	$	—	$	115,317	$	2,600,212



Carol A. Surface		2014	$	306,731	$	475,000	$	3,800,057	$	412,634	$	484,003	$	—	$	39,661	$	5,518,086
Senior Vice President, Chief Human Resources Officer

Salary: The salary column represents the base salary earned by the NEO during the applicable fiscal year. This column includes any amounts that the officer may have deferred under the Capital Accumulation Plan, which deferred amounts also are included in the 2014 Nonqualified Deferred Compensation Table on page 59 of this proxy statement. Each of the NEOs also contributed a portion of his/her salary to the Medtronic, Inc. Savings and Investment Plan, also referred to as the 401(k) Plan.

Bonus: The bonus column represents the bonus payments made to certain NEOs. Ms. Surface’s 2014 amount represents a one-time $475,000 bonus intended to mitigate the loss of earned, but unpaid compensation, at her previous employer.

Stock Awards: The stock awards column represents aggregate grant date fair value of restricted stock unit awards and performance-based restricted stock units assuming full (maximum) achievement of applicable performance criteria over the performance period (collectively, the “restricted stock awards”) granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. Accordingly, the grant date fair value was determined by multiplying the numbers of restricted stock awards by the closing stock price on the date of grant. For a description of the vesting terms of the stock awards, see the narrative disclosure following the 2014 Grants of Plan-Based Awards table on page 52 and the footnotes to the 2014 Outstanding Equity Awards at Fiscal Year End table on page 54 of this proxy statement. Additional information regarding the assumptions used to calculate these amounts are incorporated by reference to Note 12 to the Company’s Form 10-K.

Option Awards: The option awards column represents the aggregate grant date fair value of stock option awards granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. The following table provides the assumptions underlying this estimation:


	Stock Option Grant Date
	August 1, 2011			August 24, 2011			July 30, 2012			October 29, 2012			July 29, 2013			October 28, 2013
Fair value of options granted	$	6.89		$	6.53		$	7.23		$	8.05		$	11.99		$	12.52
Assumption used:
Risk-free rate⁽¹⁾		1.83	%		1.83	%		0.91	%		1.06	%		1.88	%		1.86	%
Expected volatility⁽²⁾		25.95	%		25.95	%		26.31	%		26.18	%		25.20	%		24.96	%
Expected life⁽³⁾		6.4 yrs			6.4 yrs			6.5 yrs			6.5 yrs			6.4 yrs			6.4 yrs
Dividend yield⁽⁴⁾		2.78	%		2.78	%		2.68	%		2.50	%		2.02	%		1.94	%

⁽¹⁾	The risk-free rate is based on the grant date yield of a zero-coupon U.S. Treasury bond whose maturity period equals or approximates the expected term of the option.

⁽²⁾	The expected volatility is based on a blend of historical volatility and an implied volatility of the Company’s common stock. Implied volatility is based on market traded options of the Company’s common stock.

⁽³⁾

The Company analyzes historical employee stock option exercise and termination data to estimate the expected life assumption. The Company calculates the expected life assumption using the midpoint scenario, which combines historical exercise data with hypothetical exercise data, as the Company believes this data currently represents the best estimate of the expected life of a new employee option.

⁽⁴⁾	The dividend yield rate is calculated by dividing the Company’s annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date.

For a description of the vesting terms of the option awards, see the narrative disclosure following the 2014 Grants of Plan-Based Awards table on page 52 and the footnotes to the 2014 Outstanding Equity Awards at Fiscal Year End table on page 54 of this proxy statement. Additional information regarding the assumptions used to calculate these amounts are incorporated by reference to Note 12 to the Company’s Form 10-K.

Non-Equity Incentive Plan Compensation: This column reflects the MIP and LTPP payments earned by the NEOs during the applicable fiscal year(s) and payable subsequent to fiscal year end, including any amounts deferred under the Capital Accumulation Plan (which are included in the 2014 Nonqualified Deferred Compensation table on page 59 of this proxy statement). The table below reflects the compensation received by the NEO under each plan for the performance period ending through fiscal year 2014.


Name	MIP		2012-2014 LTPP		Total Non-Equity Incentive Plan Compensation
Omar Ishrak	$	2,116,385	$	2,566,546	$	4,682,931
Gary L. Ellis	$	723,054	$	728,960	$	1,452,014
Christopher J. O’Connell	$	594,883	$	667,910	$	1,262,793
Michael J. Coyle	$	638,884	$	667,910	$	1,306,793
Carol A. Surface	$	484,003	$	—	$	484,003

For a more detailed description of the terms of the non-equity incentive plan awards, see page 36 of the Compensation Discussion and Analysis and the narrative disclosure following the 2014 Grants of Plan-Based Awards on page 52 of this proxy statement.

Change in Pension Value and Nonqualified Deferred Compensation Earnings: This column includes the estimated aggregate increase in the accrued pension benefit under Medtronic’s defined benefit pension plans. The change in the present value of the accrued pension benefit is impacted by variables such as additional years of service, age, pay and the discount rate (4.75% for fiscal 2014; up from 4.55% in fiscal year 2013) used to calculate the present value of the change. The pension values are calculated based on the accrued pension benefits (qualified plan and the non-qualified NRPS) as of April 25, 2014, and the fiscal year-end 2014 ASC 715 disclosure assumptions. Assumptions are described in Note 14 to our consolidated financial statements in our annual report for fiscal year 2014 accompanying this proxy statement. Mr. Ishrak’s value is currently an unvested benefit and subject to additional service requirements, please see the Pension Benefits table for more information.

All Other Compensation: The all other compensation column includes the following:


Name	Fiscal Year		Perquisites and Other Personal Benefits⁽¹⁾		Tax Gross-ups⁽²⁾		Registrant Contributions to Defined Contribution Plans⁽³⁾		Total
Omar Ishrak		2014	$	41,674	$	1	$	10,940	$	52,614
Gary L. Ellis		2014	$	24,000	$	0	$	10,940	$	34,940
Christopher J. O’Connell		2014	$	24,400	$	1	$	10,940	$	35,340
Michael J. Coyle		2014	$	24,000	$	2	$	82,255	$	106,257
Carol A. Surface		2014	$	13,385	$	0	$	26,276	$	39,661

⁽¹⁾

This column represents the aggregate incremental cost of the executives’ business allowances, physical exams, and relocation expenses. The value of perquisites and other personal benefits for Mr. Ishrak includes a $40,000 business allowance, and relocation expenses. The value of perquisites and other personal benefits for Messrs. Ellis, O’Connell, Coyle includes a business allowance of $24,000 and for Mr. O’Connell the value also includes a reimbursement for expenses related to a physical exam. Ms. Surface’s amount reflects the prorated portion of her business allowance. All relocation expenses are subject to a clawback requirement if the employee leaves the Company before the second anniversary of the employee’s start of employment, the employee would have to repay all relocation expenses to Medtronic. The Company occasionally allows its executives to use tickets for sporting and special events previously acquired by the Company when no other business use has been arranged. There is no incremental cost to the Company for the use.

⁽²⁾	Tax gross-ups for Messrs. Ishrak, O’Connell and Coyle are related to Medtronic’s company-wide Healthy Incentive Rewards Program available to all employees.

⁽³⁾

This amount reflects the contribution by Medtronic to match contributions to the Medtronic, Inc. Savings and Investment Plan or 401(k) Plan. Medtronic matches employee contributions of up to 6% of eligible compensation. The plan makes a minimum contribution of $0.50 and a maximum contribution of $1.50, with any contribution over the minimum determined based on diluted EPS performance target levels. The fiscal year 2014 match of $0.715 was based on achievement of an adjusted diluted EPS of $3.82. Amounts for and Mr. Coyle and Ms. Surface also include $71,315 and $15,337, respectively, in Company contributions to the qualified defined contribution ($12,750 for each of Mr. Coyle and Ms. Surface) and nonqualified defined contribution plans ($58,565 for Mr. Coyle and $2,587 for Ms. Surface). For additional information on the nonqualified defined contribution plan, see the 2014 Nonqualified Deferred Compensation table on page 59.

2014 GRANTS OF PLAN-BASED AWARDS

The following table summarizes all plan-based award grants to each of the NEOs during fiscal year 2014. Threshold amounts assume attainment of plan performance thresholds. You should refer to the Compensation Discussion and Analysis sections entitled “Fiscal Year 2014 Annual Incentive Plan Design” on page 37 and “Fiscal Year 2014 Long-Term Incentive Plan (LTIP) Target Pay” beginning on page 38 to understand how plan-based awards are determined. A narrative description of the material factors necessary to understand the information in the table is provided below.


Name	Award Type	Grant Date		Approval Date		Estimated Future Payouts under Non-Equity Incentive Plan Awards ($)						Estimated Future Payouts Under Equity Incentive Plan Awards Target (# of shares)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Options Awards ($/Sh)		Grant Date Fair Value of Stock and Options Awards
Name	Award Type	Grant Date		Approval Date		Threshold		Target		Maximum						Exercise or Base Price of Options Awards ($/Sh)		Grant Date Fair Value of Stock and Options Awards
Omar Ishrak	MIP					$	340,772	$	2,044,224	$	4,088,448
	LTPP					$	766,500	$	3,066,000	$	6,132,000
	OPT		07/29/2013		06/20/2013										221,765		55.32	$	2,658,962
	PBRSU		07/29/2013		06/20/2013								55,442					$	3,067,051
Gary L. Ellis	MIP					$	116,423	$	698,400	$	1,396,800
	LTPP					$	208,250	$	833,000	$	1,666,000
	OPT		07/29/2013		06/20/2013										60,250		55.32	$	722,398
	OPT		07/29/2013		06/20/2013										1,808		55.32	$	21,678
	PBRSU		07/29/2013		06/20/2013								15,058					$	833,009
Christopher J. O’Connell	MIP					$	95,786	$	574,600	$	1,149,200
	LTPP					$	208,250	$	833,000	$	1,666,000
	OPT		07/29/2013		06/20/2013										60,250		55.32	$	722,398
	OPT		07/29/2013		06/20/2013										1,808		55.32	$	21,678
	PBRSU		07/29/2013		06/20/2013								15,058					$	833,009
Michael J. Coyle	MIP					$	102,871	$	617,100	$	1,234,200
	LTPP					$	191,750	$	767,000	$	1,534,000
	OPT		07/29/2013		06/20/2013										55,441		55.32	$	664,738
	OPT		07/29/2013		06/20/2013										1,808		55.32	$	21,678
	PBRSU		07/29/2013		06/20/2013								13,865					$	767,012
Carol A. Surface	MIP					$	77,932	$	467,500	$	935,000
	LTPP					$	118,750	$	475,000	$	950,000
	OPT		10/28/2013		08/22/2013										32,958		57.65	$	412,634
	PBRSU		10/28/2013		08/22/2013								8,240					$	475,036
	RSU		10/28/2013		08/22/2013								57,676					$	3,325,021

MIP = Annual performance-based plan award granted under the Medtronic, Inc. Executive Incentive Plan

LTPP = Long-term performance plan award granted under the Medtronic, Inc. 2013 Stock Award and Incentive Plan or the predecessor 2008 Stock Award and Incentive Plan

OPT = Nonqualified stock options granted under the Medtronic, Inc. 2013 Stock Award and Incentive Plan or the predecessor 2008 Stock Award and Incentive Plan

PBRSU = Performance-based restricted stock units granted under the Medtronic, Inc. 2013 Stock Award and Incentive Plan or the predecessor 2008 Stock Award and Incentive Plan

RSU = Restricted stock units granted under the Medtronic, Inc. 2013 Stock Award and Incentive Plan

Estimated Future Payouts Under Non-Equity Incentive Plan Awards: Amounts in these columns represent future potential cash payments under the 2014-2016 LTPP and 2014 MIP at threshold, target and maximum performance. The LTPP provides for annual grants that are earned over a three-year period. Earned payouts under the LTPP can range from 25% to 200% of the target grant based on the Company’s 3-year performance relative to the following metrics: three-year cumulative compounded annual revenue growth rate and ROIC (rolling 12-month profit after tax excluding one-time items plus interest expense net of tax all divided by the difference of Average Asset Base and Average Non-Interest Bearing Liabilities for each year averaged over the three-year period). Earned payouts under the MIP can range from 17% to 200% of the target grant based on Company performance relative to annual revenue growth, diluted EPS, a cash flow measure, and a quality performance modifier as described on page 38 of this proxy statement. The threshold payout levels described above reflect threshold performance achievement for one performance metric in the respective LTPP and MIP. The maximum dollar value that may be paid to any participant in qualified performance-based awards denominated in cash in any fiscal year is $10 million. Both the MIP and LTPP have separate diluted EPS goals to support the Company’s compliance with Section 162(m).

Estimated Future Payouts Under Equity Incentive Plan Awards: Amounts in this column represent grants of performance-based restricted stock units (PBRSUs). PBRSUs vest 100% on the third anniversary of the date of grant provided Medtronic achieves a minimum three-year cumulative diluted EPS threshold growth rate. Unvested PBRSUs receive dividend equivalent units (“DEUs”) which are credited and added to the share balance. DEUs are only paid to the extent the underlying PBRSUs are earned. This column also includes a grant of restricted stock units (RSUs) to Ms. Surface in connection with her joining the Company. The RSUs will vest over four years and are subject to Ms. Surface’s continued employment with the Company.

All Other Option Awards/Exercise or Base Price of Option Awards: The exercise or base price of the stock option grant represents the closing market price of Medtronic common stock on the date of grant. Option awards vest 25% on each anniversary of the date of grant over a four year period.

Grant Date Fair Value of Stock and Option Awards: This column represents the grant date fair value of each equity award granted in fiscal year 2014 computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. For a discussion of the assumptions used in calculating the amount recognized for stock options granted on July 29, 2013 and October 28, 2013, see page 50 of this proxy statement. Additional information regarding the assumptions used to calculate these amounts are incorporated by reference to Note 12 to the Company’s Form 10-K.

2014 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The table below reflects all outstanding equity awards made to each of the NEOs that were outstanding at the end of fiscal year 2014. The market or payout value of unearned shares, units or other rights that have not vested equals $58.21, which was the closing price of Medtronic’s common stock on the New York Stock Exchange on April 25, 2014, and for performance-based restricted stock units and for performance share plan awards presumes that the target performance goals are met.


	OPTION AWARDS										STOCK AWARDS
Name	Option Grant Date		Number of Securities Underlying Unexercised Options (#)				Option Exercise Price ($)		Option Expiration Date		Grant Date		Shares or Units of Stock That Have Not Vested				Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Vested
Name	Option Grant Date		Exer- cisable		Unexer- cisable		Option Exercise Price ($)		Option Expiration Date		Grant Date		Number (#)⁽¹⁾		Market Value ($)		Number (#)⁽¹⁾		Market or Payout Value ($)
Omar Ishrak		08/24/2011		161,506		161,507		34.88		08/24/2021		06/13/2011		266,733		15,526,528
		07/30/2012		72,584		217,754		38.81		07/30/2022		06/13/2011						82,561		4,805,876
		07/29/2013		0		221,765		55.32		07/29/2023		08/24/2011						86,072		5,010,251
												07/30/2012						75,378		4,387,753
												07/20/2013						56,255		3,274,604
Gary L. Ellis		10/21/2004		30,000		0		50.00		10/21/2014		08/01/2011						24,447		1,423,060
		10/19/2005		37,011		0		56.74		10/19/2015		07/30/2012						21,407		1,246,101
		10/30/2006		41,068		0		48.70		10/30/2016		07/29/2013						15,279		889,391
		10/29/2007		41,868		0		47.77		10/29/2017
		10/27/2008		55,188		0		36.24		10/27/2018
		08/03/2009		50,112		0		35.92		08/03/2019
		08/02/2010		53,238		17,746		37.53		08/02/2020
		08/01/2011		45,872		45,872		34.88		08/01/2021
		07/30/2012		20,613		61,840		38.81		07/30/2022
		10/29/2012		601		1,803		41.60		10/29/2022
		07/29/2013		0		60,250		55.32		07/29/2023
		07/29/2013		0		1,808		55.32		07/29/2023
Christopher J. O’Connell		10/21/2004		28,000		0		50.00		10/21/2014		08/01/2011						22,430		1,305,650
		04/29/2005		11,423		0		52.70		04/29/2015		07/30/2012						19,641		1,143,303
		10/19/2005		17,625		0		56.74		10/19/2015		07/29/2013						15,279		889,391
		10/30/2006		15,401		0		48.70		10/30/2016
		10/29/2007		17,794		0		47.77		10/29/2017
		10/27/2008		33,113		0		36.24		10/27/2018
		08/03/2009		33,408		0		35.92		08/03/2019
		11/02/2009		27,686		0		36.12		11/02/2019
		08/02/2010		53,238		17,746		37.53		08/02/2020
		08/01/2011		42,030		42,030		34.88		08/01/2021
		07/30/2012		18,887		56,661		38.81		07/30/2022
		10/29/2012		601		1,803		41.60		10/29/2022
		07/29/2013		0		60,250		55.32		07/29/2023
		07/29/2013		0		1,808		55.32		07/29/2023
Michael J. Coyle		02/01/2010		23,175		0		43.15		02/01/2020
		08/02/2010		53,238		17,746		37.53		08/02/2020		08/01/2011						22,430		1,305,650
		08/01/2011		42,030		42,030		34.88		08/01/2021		07/30/2012						19,641		1,143,303
		07/30/2012		18,887		56,661		38.81		07/30/2022		07/29/2013						14,068		818,898
		10/29/2012		601		1,803		41.60		10/29/2022
		07/29/2013		0		55,441		55.32		07/29/2023
		07/29/2013		0		1,808		55.32		07/29/2023
Carol Surface		10/28/2013		0		32,958		57.65		10/28/2023		10/28/2013		58,237		3,389,976
												10/28/2013						8,320		484,307

¹⁾	Amounts in these columns may include dividend equivalents that will be distributed upon distribution of the underlying awards.

The amounts shown in the column entitled “Shares or Units of Stock That Have Not Vested” of the 2014 Outstanding Equity Awards at Fiscal Year End table that correspond to a June 13, 2011 grant date reflects a time-based restricted stock unit award that vests 100% on the fourth anniversary of the date of grant and an

October 28, 2013 time-based restricted stock unit award that vests 14.29% on the first anniversary of the date of grant and 28.57% on the second, third and fourth anniversaries of the grant date. The June 13, 2011 grant to Mr. Ishrak reflects a performance based restricted stock unit award that vests 35% on the first anniversary and 21 2/3% on the second, third, and fourth anniversary of the date of the grant provided that the established minimum diluted EPS threshold is achieved. The amounts shown in the column entitled “Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Vested” of the 2014 Outstanding Equity Awards at Fiscal Year End table that correspond to an August 1, 2011, August 24, 2011, July 30, 2012, July 29, 2013, and October 28, 2013 grant date reflect performance-based restricted stock or restricted stock unit awards that vest on the third anniversary of the date of grant provided that the established performance threshold for each award is achieved, except that the August 24, 2011 grant vests on August 1, 2014.

The table below shows the vesting schedule for all unexercisable options. All options vest on the anniversary of the grant date in the year indicated except Mr. Ishrak’s August 24, 2011 option grant which vests on the anniversary of August 1, 2011.


			VESTING SCHEDULE FOR UNEXERCISABLE OPTIONS
Name	Grant Date		2014		2015		2016		2017
Omar Ishrak		08/24/2011		80,753		80,754
		07/30/2012		72,585		72,584		72,585
		07/29/2013		55,441		55,441		55,441		55,442
Gary L. Ellis		08/02/2010		17,746
		08/01/2011		22,936		22,936
		07/30/2012		20,613		20,613		20,614
		10/29/2012		601		601		601
		07/29/2013		15,062		15,063		15,062		15,063
		07/29/2013		452		452		452		452
Christopher J. O’Connell		08/02/2010		17,746
		08/01/2011		21,015		21,015
		07/30/2012		18,887		18,887		18,887
		10/29/2012		601		601		601
		07/29/2013		15,062		15,063		15,062		15,063
		07/29/2013		452		452		452		452
Michael J. Coyle		08/02/2010		17,746
		08/01/2011		21,015		21,015
		07/30/2012		18,887		18,887		18,887
		10/29/2012		601		601		601
		07/29/2013		13,860		13,860		13,860		13,861
		07/29/2013		452		452		452		452
Carol A. Surface		10/28/2013		8,239		8,240		8,239		8,240

VESTING SCHEDULE FOR UNVESTED
RESTRICTED STOCK AND RSUS

Name

Grant Date

2014

2015

2016

2017

Omar Ishrak

06/13/2011

41,280

41,281

06/13/2011

08/24/2011

86,072

266,733

07/30/2012

75,378

07/29/2013

56,255

Gary L. Ellis

08/01/2011

24,447

07/30/2012

21,407

07/29/2013

15,279

Christopher J. O’Connell

08/01/2011

22,430

07/30/2012

19,641

07/29/2013

15,279

Michael J. Coyle

08/01/2011

22,430

07/30/2012

19,641

07/29/2013