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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
FOR THE FISCAL YEAR ENDED APRIL 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM ____________ TO ___________
COMMISSION FILE NO. 1-7707
MEDTRONIC [LOGO]
MEDTRONIC, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MINNESOTA 41-0793183
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
7000 CENTRAL AVENUE N.E.
MINNEAPOLIS, MINNESOTA 55432
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER: (612) 514-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
COMMON STOCK, PAR VALUE $.10 PER SHARE NEW YORK STOCK EXCHANGE, INC.
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE, INC.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES __X__ NO ____
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. ( )
AGGREGATE MARKET VALUE OF VOTING STOCK OF MEDTRONIC, INC. HELD BY NONAFFILIATES
OF THE REGISTRANT AS OF JULY 2, 1998, BASED ON THE CLOSING PRICE OF $66.875 AS
REPORTED ON THE NEW YORK STOCK EXCHANGE: $30.94 BILLION.
SHARES OF COMMON STOCK OUTSTANDING ON JULY 2, 1998: 469,350,541
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF REGISTRANT'S 1998 ANNUAL REPORT ARE INCORPORATED BY REFERENCE INTO
PARTS I, II AND IV; PORTIONS OF REGISTRANT'S PROXY STATEMENT FOR ITS 1998 ANNUAL
MEETING ARE INCORPORATED BY REFERENCE INTO PART III.
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS. Medtronic, Inc. (together with its
subsidiaries, "Medtronic" or the "company") was incorporated as a Minnesota
corporation in 1957. Medtronic is the world's leading medical technology company
specializing in implantable and interventional therapies. Primary products
include those for bradycardia pacing, tachyarrhythmia management, atrial
fibrillation management, heart failure management, coronary and peripheral
vascular disease, heart valve replacement, extracorporeal cardiac support,
minimally invasive cardiac surgery, malignant and non-malignant pain, movement
disorders, neurosurgery and neurodegenerative disorders.
Medtronic operates in a single industry segment, that of providing medical
products and services. Its revenues, operating profits and assets for the past
three fiscal years (1996-1998) have been attributable to this single industry
segment. The company does business in more than 120 countries and reports on
three primary product line platforms -- Cardiac Rhythm Management, Other
Cardiovascular and Neurological and Other -- and three geographic areas -- the
Americas, Europe/Middle East/Africa (Europe), and Asia/Pacific.
On June 29, 1998, Medtronic, Inc. and Physio-Control International
Corporation announced the signing of a definitive merger agreement. The
agreement calls for each Physio-Control shareholder to receive $27.50 in the
form of Medtronic common stock for each share of Physio-Control they now hold.
Physio-Control designs, manufactures, markets and services an integrated line of
noninvasive emergency cardiac defibrillator and vital sign assessment devices,
disposable electrodes and data management software. Further information on the
merger is provided in Note 15 to the consolidated financial statements, which is
incorporated herein by reference to Medtronic's 1998 Annual Report -- Financial
Review on page 17.
On July 13, 1998, Medtronic, Inc. and AVECOR Cardiovascular Inc. announced
the signing of an agreement under which Medtronic will acquire AVECOR in a
transaction valued at approximately $91 million. The transaction calls for
AVECOR shareholders to receive $11.125 in Medtronic common stock for each share
of AVECOR they now hold. AVECOR develops, manufactures and markets specialty
medical devices for heart/lung bypass surgery and long-term respiratory support.
The company's current products include membrane oxygenators, blood reservoirs,
blood filters, blood pumps, cardioplegia systems and custom tubing packs.
BUSINESS DESCRIPTION. Cardiac Rhythm Management products consist primarily
of Bradycardia Pacing, which produces products for treating patients with slow
or irregular heartbeats and Tachyarrhythmia Management, which develops products
to treat abnormally fast heart rhythms. The bradycardia pacing systems include
pacemakers, leads and accessories. The pacemakers can be noninvasively
programmed by the physician to adjust sensing, electrical pulse intensity, rate,
duration and other characteristics, and can produce impulses to cause
contractions in either the upper or lower heart chamber, or both, in appropriate
relation to heart activity. The company's Model 9790 programmer can be used
interchangeably with all of the company's bradycardia pacemakers as well as with
its Jewel(R), Micro Jewel(R) and Gem(TM) lines of tachyarrhythmia management
devices. Advances in bradycardia pacing in fiscal 1998 include the commercial
release of the new Medtronic.Kappa(TM) 700 series of pacemakers in Europe and
Canada, which features a highly automated adaptive pacing system that provides
customized therapy while streamlining clinical care, and the Medtronic.Kappa(TM)
400 series in the U.S., which offers dual sensor automated rate responsive
pacing and data collection for enhanced diagnostic capabilities. In general, the
Kappa(R) pacemakers are designed to adjust heart rate to match patient activity
without requiring a hospital or clinic visit. Medtronic also markets the
CapSure(R) Z and CapSureFix(R) steroid-eluting leads, which deliver more
concentrated levels of electrical energy that extend device life. Nearly half of
Medtronic's revenues are generated from the sale of implantable cardiac
pacemaker systems for treatment of bradycardia.
Tachyarrhythmia Management produces implantable devices and transvenous
lead systems for treating ventricular tachyarrhythmias, which are abnormally
fast, and sometimes fatal, heart rhythms. The systems offer a tiered therapy of
pacing, cardioversion and defibrillation, and may be implanted
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pectorally, which reduces patient trauma and hospitalization time and costs. In
June 1998, the Gem(TM) DR defibrillator system was commercially released in
Europe and certain markets outside the U.S. The Gem(TM) DR is the company's
first commercially available device from its new generation of Gem(TM) products
intended to meet the needs of patients with multiple heart rhythm problems. The
Gem(TM) DR features an advanced dual chamber rate responsive pacing capability
as well as advanced diagnostic tools. The Gem(TM) DR is currently in clinical
trials in the U.S. The Gem(TM) single chamber defibrillator, currently in
clinical trials in the U.S. and Europe, is designed to provide rate responsive
pacing in the lower chamber of the heart. The company also markets the Jewel(R)
line of devices, including the Micro Jewel(R) II implantable defibrillator,
which offers expanded diagnostic capabilities in a small size device. The
Jewel(R) AF for treatment of atrial arrhythmias is currently in clinical trials
in the U.S. and Europe. The company also markets a full line of active and
passive steroid-eluting defibrillator leads. The entire line of tachyarrhythmia
devices, like the bradycardia pacemakers, are programmed with the Model 9790
programmer.
The company's Cardiac Rhythm Management products accounted for 64.2% of
Medtronic's net sales during the fiscal year ended April 30, 1998 ("fiscal
1998"), 65.6% of net sales in fiscal 1997 and 67.9% of net sales in fiscal 1996.
Other Cardiovascular products consist of heart valves, perfusion and blood
management systems, cannulae, surgical accessories, balloon and guiding
catheters and stents. Heart Valves produces tissue and mechanical valves and
repair products for damaged or diseased heart valves. In November 1997, the
Freestyle(R) stentless aortic tissue heart valve was commercially released in
the U.S., featuring advanced tissue technology for improved blood flow and
increased durability. Through a series of strategic acquisitions over the past
decade, Medtronic now markets through Cardiopulmonary, Blood Management and DLP
Cannulae a complete line of blood-handling products that form the extracorporeal
life-support circuit by maintaining and monitoring blood circulation and
coagulation status, oxygen supply and body temperature while the patient is
undergoing emergency treatment or open-heart surgery. The company is also
pursuing enabling technologies in minimally invasive cardiac surgery, such as
the commercially available Octopus(R) tissue stabilizing system, which is used
to stabilize sites on the beating heart to enable the surgeon to complete bypass
grafts.
The Vascular product line supports the treatment of disease and damage to
coronary and peripheral blood vessels. Medtronic's primary involvement in the
vascular area has been in coronary angioplasty. The company offers coronary
angioplasty balloon and guide catheters worldwide. In late April 1998, the
company commercially released in Europe and certain markets outside the U.S. the
Presario(TM) single-operator exchange catheter, the first in a new series of
angioplasty catheters which are also intended for use as stent delivery systems.
The company's family of Wiktor(R) stents is designed for coronary applications
and includes the Wiktor(R) Prime(TM) coronary stent system, commercially
released in the U.S. in fiscal 1998, and the Wiktor(R) Rival(TM) coronary stent
system, commercially released in the U.S. in June 1998. The AneuRx stent graft
for minimally invasive abdominal aortic aneurysm repair therapy is commercially
available in Europe and certain markets outside the U.S. and is in clinical
trials in the U.S. The company is also developing a line of self-expanding and
balloon expandable peripheral vascular stents, currently in clinical trials, to
be used in several of the body's fluid passageways. The market for balloon
catheters and stents has become increasingly competitive, and disappointing
sales of these products necessitated management initiatives during the third
quarter of fiscal 1998 to restructure the vascular organization to reduce costs
and focus on new products. See Note 3 to the consolidated financial statements
on page 11 of the company's 1998 Annual Report -- Financial Review, which is
incorporated herein by reference.
The company's Other Cardiovascular products accounted for 21.0% of net
sales in fiscal 1998, 22.0% of net sales in fiscal 1997 and 23.6% of net sales
in fiscal 1996.
Neurological and Other products consists primarily of implantable
neurostimulation devices, drug administration systems, neurosurgery products and
diagnostic systems. The company produces implantable systems for spinal cord and
brain stimulation to treat pain and tremor. Neurostimulation products include
the Itrel(R) 3 spinal cord stimulation system, which features a patient-operated
control unit, and the Mattrix(R) stimulator, which offers a dual stimulation
mode for more effective pain management. The
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new Activa(TM) therapy for essential tremor and tremor associated with
Parkinson's disease was commercially released in the U.S. in fiscal 1998.
Activa(TM) Parkinson's Control Therapy for other major symptoms of Parkinson's
disease was commercially released in Europe in fiscal 1998 and is in clinical
trials in the U.S. The Activa(TM) system allows stimulation levels to be
adjusted according to the needs of each patient.
The Drug Delivery product line consists of implantable programmable drug
delivery systems that are used in treating chronic intractable pain, tremor and
spasticity, including the SynchroMed(R) drug delivery system. The company is
collaborating with several biotechnology companies to develop therapies for
neurodegenerative disorders such as Alzheimer's disease, Parkinson's disease,
Huntington's disease and amyotrophic lateral sclerosis or Lou Gehrig's disease.
Compounds for treating these diseases, called neurotrophic factors, are still in
development by these companies. Once they are proven to be safe and effective,
Medtronic believes its drug delivery technology could be effective in
administering these agents directly to their site of action in precise doses.
The company also manufactures and distributes cerebrospinal fluid shunts and
neurosurgical implants, and is a world leader in computer-supported systems to
diagnose urological and digestive disorders and sleep apnea.
The Neurological and Other products accounted for 14.8% of net sales for
fiscal 1998, 12.4% of net sales for fiscal 1997 and 8.5% of net sales for fiscal
1996.
GOVERNMENT REGULATION AND OTHER MATTERS. Government and private sector
initiatives to limit the growth of health care costs, including price regulation
and competitive pricing, are continuing in many countries where the company does
business, including the United States. These changes are causing the marketplace
to put increased emphasis on the delivery of more cost-effective medical
therapies. Although the company believes it is well positioned to respond to
changes resulting from this worldwide trend toward cost containment, the
uncertainty as to the outcome of any proposed legislation or changes in the
marketplace precludes the company from predicting the impact these changes may
have on future operating results.
In keeping with the increased emphasis on cost effectiveness in health care
delivery, the current trend among hospitals and other customers of medical
device manufacturers is to consolidate into larger purchasing groups to enhance
purchasing power. The medical device industry has also been consolidating
rapidly, partly in order to offer a broader range of products to large
purchasers. As a result, transactions with customers are more significant, more
complex and tend to involve more long-term contracts than in the past. This
enhanced purchasing power may also increase the pressure on product pricing,
although management is unable to estimate the potential impact at this time.
In the United States, the Food and Drug Administration (the "FDA"), among
other governmental agencies, is responsible for regulating the introduction of
new medical devices, including laboratory and manufacturing practices, labeling
and recordkeeping for medical devices, and review of manufacturers' required
reports of adverse experience to identify potential problems with marketed
medical devices. The FDA can ban certain medical devices, detain or seize
adulterated or misbranded medical devices, order repair, replacement, or refund
of such devices, and require notification of health professionals and others
with regard to medical devices that present unreasonable risks of substantial
harm to the public health. The FDA may also enjoin and restrain certain
violations of the Food, Drug and Cosmetic Act and the Safe Medical Devices Act
pertaining to medical devices, or initiate action for criminal prosecution of
such violations. Moreover, the FDA administers certain controls over the export
of such devices from the United States. Many of the devices that Medtronic
develops and markets are in a category for which the FDA has implemented
stringent clinical investigation and pre-market clearance requirements. Any
delay or acceleration experienced by the company in obtaining regulatory
approvals to conduct clinical trials or in obtaining required market clearances
(especially with respect to significant products in the regulatory process that
have been discussed in the company's announcements) may affect the company's
operations or the market's expectations for the timing of such events and,
consequently, the market price for the company's common stock.
Medical device laws are also in effect in many of the countries in which
Medtronic does business outside the United States. These range from
comprehensive device approval requirements for some or all of Medtronic's
medical device products to requests for product data or certifications. The
number and scope of these requirements are increasing.
3
In the early 1990's the review time by the FDA to clear medical devices for
commercial release lengthened and the number of clearances, both of 510(k)
submissions and pre-market approval applications ("PMA's"), decreased. In
response to public and congressional concern, the FDA Modernization Act of 1997
was adopted with the intent of bringing better definition to the clearance
process. Although it is expected that the 1997 Act will result in improved cycle
times for product clearance, there can be no assurance that the FDA review
process will not involve delays or that clearances will be granted on a timely
basis.
Medtronic is also subject to various environmental laws and regulations
both within and outside the United States. The operations of the company, like
those of other medical device companies, involve the use of substances regulated
under environmental laws, primarily in manufacturing and sterilization
processes. While it is difficult to quantify the potential impact of compliance
with environmental protection laws, management believes that such compliance
will not have a material impact on the company's financial position, results of
operations or liquidity.
The company operates in an industry susceptible to significant product
liability claims. In recent years, there has been an increased public interest
in product liability claims for implanted medical devices, including pacemakers
and leads. These claims may be brought by individuals seeking relief for
themselves or, increasingly, by groups seeking to represent a class, and the
company has experienced an increase in such claims. During the past year, United
States District Courts in California, Florida, Kentucky and Ohio have refused to
certify class actions in cases brought against the company. This is consistent
with the trend in class action law as it applies to the medical device industry
generally. In addition, product liability claims may be asserted against the
company in the future relative to events not known to management at the present
time. Management believes that the company's risk management practices,
including insurance coverage, are reasonably adequate to protect against
potential product liability losses.
In 1994, governmental authorities in Germany began an investigation into
certain business and accounting practices by heart valve manufacturers. As part
of this investigation, documents were seized from the company and certain other
manufacturers. Subsequently, the United States Securities and Exchange
Commission (the "SEC") also began an inquiry into this matter. In August 1996,
the SEC issued a formal non-public order of investigation to the company, as it
had to at least one other manufacturer. Based upon currently available
information, the company does not expect these investigations to have a
materially adverse impact on the company's financial position, results of
operations or liquidity.
The company has completed a review of its computer systems with regard to
year 2000 compliance and will either replace or correct through programming
modifications those computer systems that have been found to have date-related
deficiencies. In addition, the company is assessing the readiness of third
parties (e.g., vendors and customers) that interact with the company's systems.
Also being assessed are facility and telecommunication systems, as well as
systems used to support manufacturing processes, to ensure that these will be
year 2000 ready. The company's products have been assessed and found to be year
2000 compliant with the exception of a few requiring minor corrective actions.
External and internal costs specifically associated with modifying internal
use software for year 2000 compliance are expensed as incurred. To date, those
costs have not been material. Based upon currently available information, the
company does not expect the costs of addressing potential year 2000 problems to
have a material adverse impact on the company's financial position, results of
operations or liquidity in future periods. The company plans to devote the
necessary resources to resolve all significant year 2000 issues in a timely
manner.
SALES, MARKETS AND DISTRIBUTION METHODS. The primary markets for
Medtronic's products are hospitals, other medical institutions and physicians in
the United States and other countries around the world.
Medtronic sells most of its products and services directly through its
staff of trained, full-time sales representatives. Sales by these
representatives accounted for approximately 93% of Medtronic's U.S. sales and
approximately 63% of its sales from other countries in fiscal 1998. The
remaining sales were made through independent distributors.
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RAW MATERIALS AND PRODUCTION. Medtronic generally has vertically integrated
manufacturing operations, and makes its own microprocessors, lithium batteries,
feedthroughs, integrated and hybrid circuits, and certain other components.
Medtronic purchases many of the parts and materials used in manufacturing its
components and products from external suppliers. Medtronic's single-and
sole-sourced materials include materials such as adhesives, polymers, elastomers
and resins; certain integrated circuits and other
electrical/electronic/mechanical components; power sources, battery anodes,
pyrolytic carbon discs, pharmaceutical preparations such as Lioresal(R)
(baclofen, USP) Intrathecal (registered trademark of Novartis Pharmaceutical
Corporation), and computer and other peripheral equipment.
Certain of the raw materials and components used in Medtronic products are
available only from a sole supplier. Materials are purchased from single sources
for reasons of quality assurance, sole source availability or cost
effectiveness. Medtronic works closely with its suppliers to assure continuity
of supply while maintaining high quality and reliability. However, in an effort
to reduce potential product liability exposure, certain suppliers have
terminated or are planning to terminate sales of certain materials and parts to
companies that manufacture implantable medical devices.
PATENTS AND LICENSES. Medtronic owns patents on certain of its inventions,
and obtains licenses from others as it deems necessary to its business.
Medtronic's policy is to obtain patents on its inventions whenever practical.
Technological advancement characteristically has been rapid in the medical
device industry, and Medtronic does not consider its business to be materially
dependent upon any individual patent.
COMPETITION AND INDUSTRY. Medtronic sells therapeutic and diagnostic
medical devices in the United States and around the world. In the product lines
in which Medtronic competes, the company faces a mixture of competitors ranging
from large multi-national industrial manufacturers to national or regional
manufacturers that offer a limited selection of products. In addition, the
company faces competition from providers of alternative medical therapies such
as pharmaceutical companies. Important factors to Medtronic's customers include
product reliability and performance, product technology that provides for
improved patient benefits, product price, and breadth of product lines and
related product services provided by the manufacturer. Major shifts in industry
market share have occurred in connection with product problems, physician
advisories and safety alerts, reflecting the importance and risks of product
quality in the medical device industry.
Medtronic is the leading manufacturer and supplier of cardiac rhythm
management devices in both the U.S. and non-U.S. markets. Worldwide,
approximately nine manufacturers compete in the pacemaker industry. In the U.S.,
Medtronic and three other manufacturers account for a significant portion of
pacemaker sales. Medtronic and five other manufacturers account for most of the
non-U.S. pacemaker sales. Medtronic and two other manufacturers based in the
U.S. account for most sales of implantable defibrillators within and outside the
U.S. At least four other companies have devices in various stages of development
and clinical evaluation.
In the vascular market, which includes balloon and guiding catheters,
guidewires, implantable stents and grafts, and integrated stent delivery
systems, there are numerous competitors worldwide. Medtronic and four other
manufacturers account for most coronary balloon and guiding catheter sales. In
coronary stents, Medtronic and several competitors account for most sales
worldwide, with several new competitors emerging.
Medtronic is the third largest manufacturer and supplier of both tissue and
mechanical heart valves within and outside the U.S. A large manufacturer and
distributor of hospital products and services is the major competitor in tissue
heart valves and two other companies are major competitors in mechanical heart
valves. These two companies and Medtronic are the primary manufacturers and
suppliers of heart valves within the U.S. These three companies plus a few other
competitors account for most of the worldwide heart valve sales.
In the extracorporeal circulation market, there are approximately seven
companies that account for a significant portion of the U.S. and non-U.S.
markets. Medtronic is the market leader in cannulae products. Medtronic and
three competitors account for a significant portion of cannulae sales in the
U.S. Medtronic and three competitors account for a significant portion of
autotransfusion sales in both U.S. and non-U.S. markets.
5
In neurological devices, Medtronic is the leading manufacturer and supplier
of implantable neurostimulation and drug delivery systems, and of shunts for the
treatment of hydrocephalus. Medtronic and two competitors account for most sales
worldwide. Medtronic and several other manufacturers account for a significant
portion of the diagnostic testing market for urology, gastroenterology and
neuromuscular disorders.
Market complexity continues to intensify in the medical device industry.
Factors such as buyer groups, government reimbursement systems for health care
costs, relative patent portfolios, government regulation (including the
regulatory approval process for medical devices), a more rigorous enforcement
climate at the FDA, health care reform, product liability litigation and the
rapid rate of technological change are increasingly important considerations for
existing medical device manufacturers and any potential entrants to the
industry.
RESEARCH AND DEVELOPMENT. Medtronic spent $297.2 million on research and
development (11.4% of sales) in fiscal 1998, $280.2 million (11.5% of sales) in
fiscal 1997 and $243.8 million (11.2% of net sales) in fiscal 1996. These
amounts have been applied toward improving existing products, expanding their
applications, and developing new products. Medtronic's research and development
projects span such areas as sensing and treatment of cardiovascular disorders
(including bradycardia and tachyarrhythmia, fibrillation and sinus node
abnormalities); improved heart valves, membrane oxygenators and centrifugal
blood pump systems; implantable drug delivery systems for pain, spasticity and
other neurological applications; muscle and neurological stimulators;
therapeutic angioplasty catheters; coronary and peripheral stents and stented
grafts, and treatments for restenosis; implantable physiologic sensors;
treatments for heart failure; and materials and coatings to enhance the
blood/device interface.
Medtronic has not engaged in significant customer or government sponsored
research.
EMPLOYEES. On April 30, 1998, Medtronic and its subsidiaries employed
12,466 people on a regular, full-time basis and, including temporary and
part-time employees, a total of 13,954 employees on a full-time equivalent
basis.
U.S. AND NON-U.S. OPERATIONS AND EXPORT SALES. Medtronic sells products in
more than 120 countries in three geographic areas: the Americas, Europe/Middle
East/Africa (Europe), and Asia/Pacific. For financial reporting purposes,
revenues, profitability and identifiable assets attributable to significant
geographic areas are presented in Note 14 to the consolidated financial
statements, incorporated herein by reference to Medtronic's 1998 Annual Report
- -- Financial Review on page 17. U.S. export sales to unaffiliated customers
comprised less than two percent of Medtronic's consolidated sales in each of
fiscal 1998, 1997 and 1996.
Operation in countries outside the U.S. is accompanied by certain financial
and other risks. Relationships with customers and effective terms of sale
frequently vary by country, often with longer-term receivables than are typical
in the U.S. Inventory management is an important business concern due to the
potential for rapidly changing business conditions and currency exposure.
Currency exchange rate fluctuations can affect income from, and profitability
of, non-U.S. operations. Medtronic attempts to hedge these exposures to reduce
the effects of foreign currency fluctuations on net earnings. See the "Market
Risk" section of Management's Discussion and Analysis, incorporated herein by
reference to Medtronic's 1998 Annual Report -- Financial Review on page 3.
Certain countries also limit or regulate the repatriation of earnings to the
United States. Non-U.S. operations in general present complex tax and money
management issues requiring sophisticated analysis to meet the company's
financial objectives.
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS. Certain statements
contained in this Annual Report on Form 10-K and other written and oral
statements made from time to time by the company do not relate strictly to
historical or current facts. As such, they are considered "forward-looking
statements" which provide current expectations or forecasts of future events.
Such statements can be identified by the use of terminology such as
"anticipate," "believe," "estimate," "expect," "intend," "may," "could,"
"possible," "plan," "project," "will," "forecast" and similar words or
expressions. The company's forward-looking statements generally relate to its
growth strategies, financial results, product development and regulatory
approval programs, and sales efforts. One must carefully consider forward-
6
looking statements and understand that such statements involve a variety of
risks and uncertainties, known and unknown, and may be affected by inaccurate
assumptions. Consequently, no forward-looking statement can be guaranteed and
actual results may vary materially. It is not possible to foresee or identify
all factors affecting the company's forward-looking statements and investors
therefore should not consider any list of such factors to be an exhaustive
statement of all risks, uncertainties or potentially inaccurate assumptions. The
company undertakes no obligation to update any forward-looking statement.
Although it is not possible to create a comprehensive list of all factors
that may cause actual results to differ from the company's forward-looking
statements, such factors include, among others, (i) trends toward managed care,
healthcare cost containment and other changes in government and private sector
initiatives, in the U.S. and other countries in which the company does business,
that are placing increased emphasis on the delivery of more cost-effective
medical therapies; (ii) the trend of consolidation in the medical device
industry as well as among customers of medical device manufacturers, resulting
in more significant, complex and long-term contracts than in the past and
potentially greater pricing pressures; (iii) the difficulties and uncertainties
associated with the lengthy and costly new product development and foreign and
domestic regulatory approval processes, such as delays, difficulties or failures
in achieving acceptable clinical results or obtaining foreign or FDA marketing
clearances, which may result in lost market opportunities or postpone or
preclude product commercialization; (iv) efficacy or safety concerns with
respect to marketed products, whether scientifically justified or not, that may
lead to product recalls, withdrawals or declining sales; (v) changes in
governmental laws, regulations and accounting standards and the enforcement
thereof that may be adverse to the company; (vi) increased public interest in
recent years in product liability claims for implanted medical devices,
including pacemakers and leads; (vii) other legal factors including
environmental concerns and patent disputes with competitors; (viii) agency or
government actions or investigations affecting the industry in general or the
company in particular; (ix) the development of new products or technologies by
competitors, technological obsolescence and other changes in competitive
factors; (x) risks associated with maintaining and expanding international
operations; (xi) business acquisitions, dispositions, discontinuations or
restructurings by the company; (xii) the integration of businesses acquired by
the company; and (xiii) economic factors over which the company has no control,
including changes in inflation, foreign currency rates and interest rates. More
detailed discussions of many of these factors are including in the preceding
sections. The company notes these factors as permitted by the Private Securities
Litigation Reform Act of 1995.
EXECUTIVE OFFICERS OF MEDTRONIC
Set forth below are the names and ages of current executive officers of
Medtronic, Inc., as well as information regarding their positions with
Medtronic, Inc., their periods of service in these capacities, and their
business experience for the past five or more years. Executive officers
generally serve terms of office of approximately one year. There are no family
relationships among any of the officers named, nor is there any arrangement or
understanding pursuant to which any person was selected as an officer.
WILLIAM W. GEORGE, age 55, has been Chairman and Chief Executive Officer
since August 1996, was President and Chief Executive Officer from May 1991 to
August 1996, and was President and Chief Operating Officer from March 1989 to
April 1991. He has been a director since March 1989. Prior to joining the
company, Mr. George was President, Space and Aviation Systems Business, at
Honeywell Inc. from December 1987 to March 1989. During his 11 years with
Honeywell, Mr. George served in several other executive positions including
President, Industrial Automation and Control, from May 1987 to December 1987,
and Executive Vice President of that business from January 1983 to May 1987.
GLEN D. NELSON, M.D., age 61, has been Vice Chairman since July 1988, and
has been a director since 1980. From August 1986 to July 1988, he was Executive
Vice President of the company. Dr. Nelson was Chairman and Chief Executive
Officer of American MedCenters, Inc., an HMO management corporation, from July
1984 to August 1986.
ARTHUR D. COLLINS, JR., age 50, has been President and Chief Operating
Officer since August 1996, was Chief Operating Officer from January 1994 to
August 1996 and from June 1992 to January 1994 was Executive Vice President and
President of Medtronic International. He has been a director since August
7
1994. Prior to joining the company, Mr. Collins was Corporate Vice President,
Diagnostic Products, at Abbott Laboratories from October 1989 to May 1992 and
Divisional Vice President, Diagnostic Products, from May 1984 to October 1989.
During his 14 years with Abbott, Mr. Collins served in various general
management positions both in the United States and Europe.
BOBBY I. GRIFFIN, age 61, has been Executive Vice President since July
1988, and was President, Cardiac Rhythm Management (formerly Pacing), from
March 1991 to December 1997. From September 1985 to July 1988, Mr. Griffin was
Vice President, Cardiac Rhythm Management. Mr. Griffin will retire in August
1998.
BILL K. ERICKSON, age 54, has been Senior Vice President and President,
Americas, since January 1994. From May 1992 to January 1994, Mr. Erickson was
Senior Vice President and President, U.S. Cardiovascular Sales and Marketing
Division. Mr. Erickson was Senior Vice President, U.S. Cardiovascular Division,
from January 1990 to May 1992 and was Vice President, U.S. Cardiovascular
Distribution, from January 1982 to December 1989.
JANET S. FIOLA, age 56, has been Senior Vice President, Human Resources
since March 1994. She was Vice President, Human Resources, from February 1993 to
March 1994, and was Vice President, Corporate Human Resources, from February
1988 to February 1993.
B. KRISTINE JOHNSON, age 46, has been Senior Vice President and Chief
Administrative Officer since October 1997. She was Senior Vice President and
President, Vascular from May 1996 to September 1997. Prior to that she was Vice
President and President, Tachyarrhythmia Management from May 1995 to April 1996,
and Vice President and General Manager, Tachyarrhythmia Management from January
1990 to April 1995. She served in various general management positions at the
company from April 1982 to December 1989. Prior to joining the company, Ms.
Johnson served in several management positions at Cargill, Inc. from 1973 to
1982.
PHILIP M. LAUGHLIN, age 51, joined the company as Senior Vice President and
President, Cardiac Surgery, in July 1995. Prior to that he served with Clintec
Nutrition company (worldwide joint venture of Baxter International and Nestle
S.A. in the field of clinical nutrition) as President, North America, from 1994
through July 1995 and as President, United States, from 1989 to 1993. From 1976
to 1989, he held numerous general management positions at Baxter International
in Europe and the Far East, and was most recently Vice President, Operations,
Global Business Group.
RONALD E. LUND, age 63, has been Senior Vice President and General Counsel
since November 1990, and Secretary since July 1992, and was Vice President and
General Counsel from February 1989 to November 1990. Prior to joining the
company, Mr. Lund served as Vice President and Associate General Counsel of The
Pillsbury Company from 1984 to February 1989.
STEPHEN H. MAHLE, age 52, has been Senior Vice President and President of
Cardiac Rhythm Management (formerly Pacing) since January 1998. Prior to that,
he was President, Brady Pacing, from May 1995 to December 1997 and Vice
President and General Manager, Brady Pacing, from January 1990 to May 1995. Mr.
Mahle has been with the company for 26 years and served in various general
management positions prior to 1990.
JOHN A. MESLOW, age 59, has been Senior Vice President and President,
Neurological Business, since March 1994. He was Vice President and President,
Neurological Business, from March 1991 to March 1994, and was Vice President,
Neurological Division, from March 1985 to March 1991.
ROBERT L. RYAN, age 55, has been Senior Vice President and Chief Financial
Officer since April 1993. Prior to joining the company, Mr. Ryan was Vice
President, Finance, and Chief Financial Officer of Union Texas Petroleum Corp.
from May 1984 to April 1993, Controller from May 1983 to May 1984, and Treasurer
from March 1982 to May 1983.
BARRY W. WILSON, age 54, has been Senior Vice President since September
1997 and President, Europe, Middle East and Africa since joining the company in
April 1995. Prior to that, Mr. Wilson was President of the Lederle Division of
American Cyanamid/American Home Products from 1991 to March 1995 and President,
Europe of Bristol-Myers Squibb from 1991 to 1993, where he also served
internationally in various general management positions from 1980 to 1991.
8
ITEM 2. PROPERTIES
Medtronic's principal offices are owned by the company and located in the
Minneapolis, Minnesota metropolitan area. Manufacturing or research facilities
are located in Arizona, California, Colorado, Massachusetts, Michigan,
Minnesota, Utah, Puerto Rico, Canada, China, France, Denmark, Germany, India,
Israel, Italy, the Netherlands, Sweden, Switzerland and Japan. The company's
total manufacturing and research space is approximately 1.9 million square feet,
of which approximately 76% is owned by the company and the balance is leased.
Medtronic also maintains sales and administrative offices in the United
States at 92 locations in 28 states or jurisdictions and outside the United
States at 98 locations in 30 countries. Most of these locations are leased.
Medtronic is utilizing substantially all of its currently available productive
space to develop, manufacture and market its products. The company's facilities
are in good operating condition, suitable for their respective uses and adequate
for current needs.
ITEM 3. LEGAL PROCEEDINGS
Note 12 to the consolidated financial statements appearing on page 16 of
Medtronic's 1998 Annual Report -- Financial Review is incorporated herein by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR MEDTRONIC'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The information in the sections entitled "Price Range of Medtronic Stock"
and "Investor Information" on page 23 of Medtronic's 1998 Annual Report --
Company Overview is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information for the fiscal years 1988 through 1998 on page 18 of
Medtronic's 1998 Annual Report -- Financial Review is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information on pages 1 through 4 of Medtronic's 1998 Annual Report --
Financial Review is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information on page 3 of Medtronic's 1998 Annual Report -- Financial
Review is incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report thereon of
independent accountants dated May 26, 1998 appearing on pages 5 through 17 of
Medtronic's 1998 Annual Report -- Financial Review, are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
9
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF MEDTRONIC
The information on pages 1 through 7 of Medtronic's Proxy Statement for its
1998 Annual Shareholders' Meeting and on page 9 of such Proxy Statement entitled
"Section 16(a) Beneficial Ownership Reporting Compliance" is incorporated herein
by reference. See also "Executive Officers of Medtronic" on pages 7 and 8
hereof.
ITEM 11. EXECUTIVE COMPENSATION
The sections entitled "Election of Directors -- Director Compensation" and
"Executive Compensation" on pages 7 and 8, and 14 through 19, respectively, of
Medtronic's Proxy Statement for its 1998 Annual Shareholders' Meeting are
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
"Shareholdings of Certain Owners and Management" on page 9 of Medtronic's
Proxy Statement for its 1998 Annual Shareholders' Meeting is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information on page 8 of Medtronic's Proxy Statement for its 1998
Annual Shareholders' Meeting concerning services provided to the company by
directors and executive officers in fiscal 1998 is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
Report of Independent Accountants (incorporated herein by reference to page
5 of Medtronic's 1998 Annual Report -- Financial Review)
Statement of Consolidated Earnings -- years ended April 30, 1998, 1997, and
1996 (incorporated herein by reference to page 6 of Medtronic's 1998 Annual
Report -- Financial Review)
Consolidated Balance Sheet -- April 30, 1998 and 1997 (incorporated herein
by reference to page 7 of Medtronic's 1998 Annual Report -- Financial
Review)
Statement of Consolidated Shareholders' Equity -- years ended April 30,
1998, 1997, and 1996 (incorporated herein by reference to page 8 of
Medtronic's 1998 Annual Report -- Financial Review)
Statement of Consolidated Cash Flows -- years ended April 30, 1998, 1997,
and 1996 (incorporated herein by reference to page 9 of Medtronic's 1998
Annual Report -- Financial Review)
Notes to Consolidated Financial Statements (incorporated herein by
reference to pages 10 through 17 of Medtronic's 1998 Annual Report --
Financial Review)
2. FINANCIAL STATEMENT SCHEDULES
Schedule II. Valuation and Qualifying Accounts -- years ended April 30,
1998, 1997, and 1996
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
10
3. EXHIBITS
3.1 Medtronic Restated Articles of Incorporation, as amended to date
(Exhibit 3.1).(a)
3.2 Medtronic Bylaws, as amended to date (Exhibit 3.2).(b)
4 Form of Rights Agreement dated as of June 27, 1991 between
Medtronic and Norwest Bank Minnesota, National Association,
including as Exhibit A thereto the form of Preferred Stock Purchase
Right Certificate. (Exhibit 4).(c)
*10.1 1994 Stock Award Plan, as amended.
*10.2 Management Incentive Plan (Appendix B).(d)
*10.3 1979 Restricted Stock and Performance Share Award Plan, as amended
to date.
*10.4 1979 Nonqualified Stock Option Plan, as amended (Exhibit 10.4).(b)
*10.5 Form of Employment Agreement for Medtronic executive officers
(Exhibit 10.5).(e)
*10.6 1991 Restricted Stock Plan for Non-Employee Directors (Exhibit
10.6).(b)
*10.7 Capital Accumulation Plan Deferral Program (Exhibit 10.7).(b)
*10.8 Postretirement Survivor Benefit Plan.
*10.9 Amendment effective October 1, 1993 to the Directors' Retirement
Plan (Exhibit 10.9).(f)
*10.10 Executive Nonqualified Supplemental Benefit Plan (Restated May 1,
1997). (Exhibit 10.10).(c)
*10.11 Stock Option Replacement Program.
*10.12 1998 Outside Director Stock Compensation Plan.
*10.13 Agreement with Officer (Exhibit 10).(g)
*10.14 Amendment effective March 5, 1998 to the 1979 Nonqualified Stock
Option Plan.
13 Those portions of Medtronic's 1998 Annual Shareholders Report
expressly incorporated by reference herein, which shall be deemed
filed with the Commission.
21 List of Subsidiaries.
23 Consent and Report of PricewaterhouseCoopers LLP (set forth on page
13 of this report).
24 Powers of Attorney.
27 Financial Data Schedule.
99.1 Agreement and Plan of Merger dated June 27, 1998 by and among
Medtronic, Inc., PC Merger Corp. and Physio-Control Corporation,
incorporated by reference to Exhibit C to Schedule 13D filed by the
Registrant relating to ownership of shares of Physio-Control
Corporation (SEC File No. 0-27242).
99.2 Agreement and Plan of Merger dated July 12, 1998 by and among
Medtronic, Inc., AC Merger Corp. and AVECOR Cardiovascular, Inc.,
incorporated by reference to Exhibit D to Schedule 13D filed by the
Registrant relating to ownership of shares of AVECOR
Cardiovascular, Inc. (SEC File No. 0-21330).
- ------------------
(a) Incorporated herein by reference to the cited exhibit in Medtronic's
Quarterly Report on Form 10-Q for the quarter ended July 28, 1995, filed
with the Commission on September 8, 1995.
(b) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1996, filed with the
Commission on July 24, 1996.
(c) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1997, filed with the
Commission on July 23, 1997.
(d) Incorporated herein by reference to the cited appendix in Medtronic's Proxy
Statement for its 1994 Annual Meeting of Shareholders, filed with the
Commission on July 27, 1994.
(e) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1995, filed with the
Commission on July 25, 1995.
(f) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1994, filed with the
Commission on July 27, 1994.
(g) Incorporated herein by reference to the cited exhibit in Medtronic's
Quarterly Report on Form 10-Q for the quarter ended January 30, 1998, filed
with the Commission on March 13, 1998.
*Items that are management contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by Medtronic during the quarter ended
April 30, 1998.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MEDTRONIC, INC.
Dated: July 21, 1998
BY: /S/ William W. George
----------------------------------------
WILLIAM W. GEORGE
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: July 21, 1998 BY: /S/ William W. George
----------------------------------------
WILLIAM W. GEORGE
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Dated: July 21, 1998 BY: /s/ Robert L. Ryan
----------------------------------------
ROBERT L. RYAN
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
WILLIAM R. BRODY, M.D., PH.D.
PAUL W. CHELLGREN
ARTHUR D. COLLINS, JR.
WILLIAM W. GEORGE
ANTONIO M. GOTTO, JR., M.D.
BERNADINE P. HEALY, M.D.
THOMAS E. HOLLORAN DIRECTORS
GLEN D. NELSON, M.D.
RICHARD L. SCHALL
JACK W. SCHULER
GERALD W. SIMONSON
GORDON M. SPRENGER
RICHARD A. SWALIN, PH.D.
Ronald E. Lund, by signing his name hereto, does hereby sign this document
on behalf of each of the above named directors of the registrant pursuant to
powers of attorney duly executed by such persons.
Dated: July 21, 1998 BY: /s/ Ronald E. Lund
----------------------------------------
RONALD E. LUND
ATTORNEY-IN-FACT
12
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Medtronic, Inc.
Our audits of the consolidated financial statements referred to in our
report dated May 26, 1998 appearing on page 5 of the Medtronic, Inc. 1998 Annual
Report -- Financial Review (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also included
an audit of the Financial Statement Schedule listed in Item 14(a)2 of this Form
10-K. In our opinion, this Financial Statement Schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
Price Waterhouse LLP
Minneapolis, Minnesota
May 26, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in each Registration
Statement on Form S-8 (Registration Nos. 2-65157, 2-68408, 33-169, 33-36552,
2-65156, 33-24212, 33-37529, 33-44230, 33-55329, 33-63805, 33-64585, 333-04099
and 333-07385) of Medtronic, Inc. of our report dated May 26, 1998 appearing on
page 5 of the 1998 Annual Report -- Financial Review which is incorporated by
reference in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule as
shown above.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
July 21, 1998
13
MEDTRONIC, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS OF DOLLARS)
OTHER
BALANCE AT CHARGES/ CHANGES BALANCE
BEGINNING (CREDITS) TO (DEBIT) AT END OF
OF PERIOD EARNINGS CREDIT PERIOD
- --------------------------------------------------------------------------------------------
Allowance for doubtful accounts:
Year ended 4/30/98 ............ $13,673 $ 2,490 $(1,426)(a) $14,469
(268)(b)
Year ended 4/30/97 ............ 18,094 (1,952) (1,448)(a) 13,673
(1,021)(b)
Year ended 4/30/96 ............ 22,416 (189) (1,371)(a) 18,094
(857)(b)
(1,905)(c)
- ------------------
(a) Uncollectible accounts written off, less recoveries.
(b) Reflects primarily the effects of foreign currency fluctuations.
(c) Uncollectible accounts written off related to 1993 divestiture.
14
Commission File Number 1-7707
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
EXHIBITS
TO
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OF
THE SECURITIES EXCHANGE ACT 0F 1934
FOR THE FISCAL YEAR ENDED APRIL 30, 1998
METHOD
OF
EXHIBITS INDEX FILING
3.1 Medtronic Restated Articles of Incorporation, as amended to date --
(Exhibit 3.1).(a)
3.2 Medtronic Bylaws, as amended to date (Exhibit 3.2).(b) --
4 Form of Rights Agreement dated as of June 27, 1991 between --
Medtronic and Norwest Bank Minnesota, National Association,
including as Exhibit A thereto the form of Preferred Stock Purchase
Right Certificate. (Exhibit 4).(c)
*10.1 1994 Stock Award Plan, as amended. E
*10.2 Management Incentive Plan (Appendix B).(d) --
*10.3 1979 Restricted Stock and Performance Share Award Plan, as amended E
to date.
*10.4 1979 Nonqualified Stock Option Plan, as amended (Exhibit 10.4).(b) --
*10.5 Form of Employment Agreement for Medtronic executive officers --
(Exhibit 10.5).(e)
*10.6 1991 Restricted Stock Plan for Non-Employee Directors (Exhibit --
10.6).(b)
*10.7 Capital Accumulation Plan Deferral Program (Exhibit 10.7).(b) --
*10.8 Postretirement Survivor Benefit Plan. E
*10.9 Amendment effective October 1, 1993 to the Directors' Retirement --
Plan (Exhibit 10.9).(f)
*10.10 Executive Nonqualified Supplemental Benefit Plan (Restated May 1, --
1997). (Exhibit 10.10).(c)
*10.11 Stock Option Replacement Program. E
*10.12 1998 Outside Director Stock Compensation Plan. E
*10.13 Agreement with Officer (Exhibit 10).(g) --
*10.14 Amendment effective March 5, 1998 to the 1979 Nonqualified Stock E
Option Plan.
13 Those portions of Medtronic's 1998 Annual Shareholders Report E
expressly incorporated by reference herein, which shall be deemed
filed with the Commission.
21 List of Subsidiaries. E
23 Consent and Report of PricewaterhouseCoopers LLP (set forth on page --
13 of this report).
24 Powers of Attorney. E
27 Financial Data Schedule. E
99.1 Agreement and Plan of Merger dated June 27, 1998 by and among --
Medtronic, Inc., PC Merger Corp. and Physio-Control Corporation,
incorporated by reference to Exhibit C to Schedule 13D filed by the
Registrant relating to ownership of shares of Physio-Control
Corporation (SEC File No. 0-27242).
99.2 Agreement and Plan of Merger dated July 12, 1998 by and among --
Medtronic, Inc., AC Merger Corp. and AVECOR Cardiovascular, Inc.,
incorporated by reference to Exhibit D to Schedule 13D filed by the
Registrant relating to ownership of shares of AVECOR
Cardiovascular, Inc. (SEC File No. 0-21330).
- ------------------
(a) Incorporated herein by reference to the cited exhibit in Medtronic's
Quarterly Report on Form 10-Q for the quarter ended July 28, 1995, filed
with the Commission on September 8, 1995.
(b) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1996, filed with the
Commission on July 24, 1996.
(c) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1997, filed with the
Commission on July 23, 1997.
(d) Incorporated herein by reference to the cited appendix in Medtronic's Proxy
Statement for its 1994 Annual Meeting of Shareholders, filed with the
Commission on July 27, 1994.
(e) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1995, filed with the
Commission on July 25, 1995.
(f) Incorporated herein by reference to the cited exhibit in Medtronic's Annual
Report on Form 10-K for the year ended April 30, 1994, filed with the
Commission on July 27, 1994.
(g) Incorporated herein by reference to the cited exhibit in Medtronic's
Quarterly Report on Form 10-Q for the quarter ended January 30, 1998, filed
with the Commission on March 13, 1998.