SCHEDULE 14A
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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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NOTICE OF 1996
ANNUAL MEETING AND
PROXY STATEMENT
Medtronic, Inc.
7000 Central Avenue N.E.
Minneapolis, MN 55432
[LOGO] MEDTRONIC
[LOGO] MEDTRONIC 7000 Central Avenue N.E.
Minneapolis, Minnesota 55432
Telephone: 612/574-4000
July 24, 1996
Dear Shareholder:
You are cordially invited to join us for our Annual Meeting of Shareholders to
be held this year on Wednesday, August 28, 1996, at 10:30 a.m. (CDT) at
Medtronic's Corporate Center at its Rice Creek facility, 7000 Central Avenue
N.E., Minneapolis (Fridley), Minnesota.
The Notice of Annual Meeting of Shareholders and the Proxy Statement that follow
describe the business to be conducted at the meeting. We will also report on
matters of current interest to our shareholders.
Whether you own a few or many shares of stock, it is important that your shares
be represented. If you cannot personally attend, we encourage you to make
certain that you are represented at the Meeting by signing the accompanying
proxy card and promptly returning it in the enclosed envelope.
Sincerely,
/s/ Winston R. Wallin /s/ William W. George
Winston R. Wallin William W. George
Chairman of the Board President and Chief Executive Officer
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
WEDNESDAY, AUGUST 28, 1996
To Our Shareholders:
The 1996 Annual Meeting of Shareholders of Medtronic, Inc. will be held
Wednesday, August 28, 1996, at the Medtronic, Inc. Corporate Center at its Rice
Creek facility, 7000 Central Avenue N.E., Minneapolis (Fridley), Minnesota, at
10:30 a.m. (CDT) for the following purposes:
1. To set the size of the Board at 12 directors and to elect four
Class I directors for three-year terms.
2. To approve appointment of Price Waterhouse LLP as the Company's
independent auditors.
3. To take action on any other business that may properly be
considered at the Meeting or any adjournment thereof.
These items are more fully described in the following pages of the Proxy
Statement.
Shareholders of record at the close of business on July 5, 1996 will be entitled
to vote at the Meeting and any adjournments of the Meeting.
By Order of the Board of Directors,
/s/ Ronald E. Lund
Ronald E. Lund
Secretary
Approximate Date of Mailing
Proxy Material: July 24, 1996
YOUR VOTE IS IMPORTANT.
PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
[LOGO] MEDTRONIC MEDTRONIC, INC.
7000 CENTRAL AVENUE N.E.
MINNEAPOLIS, MINNESOTA 55432
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 28, 1996
The Board of Directors of Medtronic, Inc. ("Medtronic" or the "Company") is
soliciting the accompanying proxy for the Annual Meeting of Shareholders of
Medtronic to be held on August 28, 1996.
A proxy card is enclosed. In order to register your vote, complete, date and
sign the proxy card and return it in the envelope provided.
When stock is registered in the name of more than one person, each such person
should sign the proxy. If the shareholder is a corporation, the proxy should be
signed in its corporate name by an executive or other authorized officer. If
signed as attorney, executor, administrator, trustee, guardian, custodian or in
any other representative capacity, the signer's full title should be given.
Shareholders are entitled to one vote for each share of Medtronic Common Stock,
$.10 par value, they hold of record as of the close of business on July 5, 1996.
On that date, 239,509,382 shares of Medtronic Common Stock were outstanding. A
quorum (a majority of the outstanding shares) must be represented at the Meeting
in person or by proxy to transact business.
Shares represented by a properly executed proxy received by Medtronic prior to
the Meeting and not revoked will be voted in accordance with the instructions of
the shareholder or, if no instructions are indicated, in accordance with the
recommendations of the Board of Directors. A proxy may be revoked at any time
before it is exercised by written revocation to the Corporate Secretary of
Medtronic or by filing a new written proxy with the Corporate Secretary.
ELECTION OF DIRECTORS
DIRECTORS AND NOMINEES
The Board of Directors is divided into three classes. The members of each class
are elected to serve three-year terms with the terms of office of each class
ending in successive years. Glen D. Nelson, M.D., Jack W. Schuler, Gerald W.
Simonson and Richard A. Swalin, Ph.D. are the nominees for election to the Board
as Class I directors to serve until the 1999 annual meeting or until their
successors are elected and qualified. All of the nominees are currently
directors and were elected to the Board of Directors by the shareholders. After
13 years of dedicated Board service, Vernon H. Heath has elected not to stand
for re-election. During that time, in addition to active service as a Board
member, Mr. Heath chaired the Compensation Committee, the Corporate Governance
Committee, the Audit Committee and the Technology and Quality Committee.
Mr. Wallin, the current Chairman of the Board of the Company, will retire from
the Board as Chairman and a director on August 28, 1996 in accordance with the
Board's policy of mandatory retirement. The Board of Directors has elected Mr.
George as Chairman of the Board and Chief Executive Officer effective upon Mr.
Wallin's retirement in August. The Board also elected Mr. Collins as President
and Chief Operating Officer effective on the same date. In keeping with the
Company's Principles of Corporate Governance, the Board has also appointed Mr.
Schall, an outside director, as Chair of the Corporate Governance Committee, and
in that capacity he will serve as the focal point for issues of concern to
non-employee directors. That appointment is also effective August 28. The
Corporate Governance Committee and its Nominating Subcommittee are in the
process of creating a long-range plan for Board succession and the selection and
recruitment of candidates for Board membership. It is the Board's intention to
add up to three additional directors through this process in order to return to
its former size of 15 members.
All of the nominees standing for re-election have indicated a willingness to
serve if elected. However, if any nominee becomes unable to serve before the
election, the shares represented by the proxy cards may be voted for a
substitute designated by the Board, unless an instruction to the contrary is
indicated on the proxy card.
THE BOARD RECOMMENDS A VOTE FOR ELECTING THE NOMINEES.
DIRECTOR NOMINEES -- CLASS I
(TERM ENDING 1999)
[PHOTO] Vice Chairman of Medtronic since July 1988
GLEN D. NELSON, M.D., age 59 and Executive Vice President from August
DIRECTOR SINCE 1980 1986 to July 1988; Chairman and Chief
Class I Director Executive Officer of American MedCenters,
Term expires 1996 Inc. (HMO management) from July 1984 to
August 1986; President and Chairman of the
Board of Trustees of Park Nicollet Medical
Center (medical services) from 1975 to 1986;
Surgeon at Park Nicollet Medical Center from
1969 to 1986. Also a director of ReliaStar
Financial Corp., The St. Paul Companies,
Inc., Carlson Holdings, Inc., and
Communications Holdings, Inc.
[PHOTO] Chairman of the Board of Stericycle, Inc.
JACK W. SCHULER, age 55 (medical waste treatment and recycling
DIRECTOR SINCE 1990 business) since 1990; President and Chief
Class I Director Operating Officer of Abbott Laboratories
Term expires 1996 (health care products) from January 1987 to
August 1989; a director of that company from
April 1985 to August 1989 and Executive Vice
President from January 1985 to January 1987.
Also a director of Somatogen, Inc., Chiron
Corporation and non-employee Chairman of
Ventana Medical Systems, Inc.
[PHOTO] Private venture capital investor since
GERALD W. SIMONSON, age 66 June 1978; President and Chief Executive
DIRECTOR SINCE 1962 Officer of Omnetics Connector Corporation
Class I Director (microminiature connectors) since March
Term expires 1996 1991. Also a director of Northwest
Teleproductions, Inc., The Chromaline
Corporation, Winthrop Resources
Corporation and Fairview Hospital and
Healthcare Services.
[PHOTO] Professor Emeritus since January 1995, and
RICHARD A. SWALIN, PH.D., age 67 Professor from August 1984 to January 1995,
DIRECTOR SINCE 1980 Materials Science and Technology Management,
(and 1973-1977) The University of Arizona; consultant in
Class I Director technology management since November 1987;
Term expires 1996 President and Chief Executive Officer of
Arizona Technology Development Corp. from
February 1987 to November 1987; Dean of the
College of Engineering and Mines at The
University of Arizona from September 1984 to
July 1987; Vice President of Research and
Development at Allied-Signal Corp. from 1977
to 1984. Also a director of BMC Corp.
BOARD MEMBERS CONTINUING IN OFFICE -- CLASS II
(TERM ENDING 1997)
[PHOTO] Medtronic's President and Chief Executive
WILLIAM W. GEORGE, age 53 Officer since May 1991; President and
DIRECTOR SINCE 1989 Chief Operating Officer from March 1989 to
Class II Director April 1991. Mr. George has been elected
Term expires 1997 Chairman of the Board of the Company
effective August 28, 1996. President,
Honeywell Space and Aviation Systems
(products for commercial and military
aviation markets and space and satellite
applications), from December 1987 to March
1989; President, Honeywell Industrial
Automation and Control, from May 1987 to
December 1987 and Executive Vice President
of that business from January 1983 to May
1987. Also a director of Dayton Hudson
Corporation, Valspar Corporation, Allina
Health System and Imation Corp.;
Chairman-Elect of the Health Industry
Manufacturers Association and Chairman of
the Board of Trustees of the Food and Drug
Law Institute.
[PHOTO] Dean, College of Medicine, Ohio State
BERNADINE P. HEALY, M.D., age 51 University, since October 1995. Director,
DIRECTOR SINCE 1993 Section of Health and Science Policy, The
(and 1987-1991) Page Center, The Cleveland Clinic Foundation
Class II Director (nonprofit medical research organization),
Term expires 1997 from May 1995 to October 1995; Physician
with The Cleveland Clinic Foundation from
July 1993 to May 1995; Director of the
National Institutes of Health from April
1991 to June 1993; Chairman of the Research
Institute of The Cleveland Clinic Foundation
from November 1985 to April 1991; President,
the American Heart Association, National
Center, from 1988 to 1989; Deputy Director
of Office of Science and Technology Policy,
Executive Office of the United States
President, from 1984 to 1985; Professor of
Medicine, The Johns Hopkins University
School of Medicine, from 1977 to 1984; a
trustee of Battelle Memorial Institute, the
Hudson Institute and the Brookings
Institution, and a director of National City
Corporation, Somatogen, Inc., Invacare, Inc.
and Karrington Health, Inc.
[PHOTO] Consultant. Retired Vice Chairman and Chief
RICHARD L. SCHALL, age 66 Administrative Officer and director of
DIRECTOR SINCE 1971 Dayton Hudson Corporation as of February
Class II Director 1985. Director of Ecolab Inc., First Bank
Term expires 1997 System, Inc., CTL Credit, Inc., and Meritex
Inc.; a trustee of Santa Barbara City
College Foundation, and a director of the
Santa Barbara Foundation Finance Committee,
SEE International and Las Positas Park
Foundation.
[PHOTO] Executive Officer of Allina Health System
GORDON M. SPRENGER, age 59 (health care delivery) since July 1994;
DIRECTOR SINCE 1991 Chief Executive Officer and director of
Class II Director HealthSpan Health Systems Corporation
Term expires 1997 (health care delivery) from September 1992
to July 1994; President and Chief Executive
Officer of LifeSpan, Inc. (health care
delivery) from 1982 to September 1992; Chief
Executive Officer of Abbott-Northwestern
Hospital from 1982 to September 1992;
President of Abbott-Northwestern Hospital
from 1982 to 1988. Member of Board of
Regents, St. Olaf College. Also a director
of The St. Paul Companies, Inc. and Chair of
the Board of the American Hospital
Association.
BOARD MEMBERS CONTINUING IN OFFICE -- CLASS III
(TERM ENDING 1998)
[PHOTO] Consultant since May 1992. Vice Chairman of
F. CALEB BLODGETT, age 69 General Mills, Inc. (consumer foods and
DIRECTOR SINCE 1976 restaurants) from January 1981 to May 1992
Class III Director and Chief Financial and Administrative
Term expires 1998 Officer of such company from November 1985
to May 1992, when he retired. Also a
director of ReliaStar Financial Corp. and
Waldorf Corporation; a member of Allina
Health System Investment Committee and a
trustee of Beloit College.
[PHOTO] Medtronic's Chief Operating Officer since
ARTHUR D. COLLINS, JR., age 48 January 1994; Executive Vice President of
DIRECTOR SINCE 1994 the Company and President of Medtronic
Class III Director International from June 1992 to January
Term expires 1998 1994. Mr. Collins has been elected
President of the Company effective August
28, 1996. Corporate Vice President of Abbott
Laboratories (health care products) from
October 1989 to May 1992 and Divisional Vice
President of that company from May 1984 to
October 1989. Held various management
positions both in the U.S. and Europe during
his 14 years with Abbott. Also a director of
First Bank System, Inc., Tennant Company,
GalaGen Inc., the National Association of
Manufacturers and Fairview Physicians
Associates.
[PHOTO] Chairman and Professor of the Department
ANTONIO M. GOTTO, JR., M.D., age 60 of Medicine since 1977 and J. S.
DIRECTOR SINCE 1992 Abercrombie Chair, Atherosclerosis and
Class III Director Lipoprotein Research, since 1976 at Baylor
Term expires 1998 College of Medicine and Methodist
Hospital. Director and principal
investigator, Specialized Center of
Research in Arteriosclerosis, National
Heart, Lung and Blood Institute; and
president, International Atherosclerosis
Society.
[PHOTO] Professor, Graduate School of Business,
THOMAS E. HOLLORAN, age 66 University of St. Thomas, St. Paul,
DIRECTOR SINCE 1960 Minnesota since June 1985; Chairman,
Class III Director Minneapolis-St. Paul Metropolitan Airports
Term expires 1998 Commission, from February 1989 to January
1991; Chairman of the Board of Directors and
Chief Executive Officer of Inter-Regional
Financial Group, Inc. (holding company for
various financial enterprises) from 1976 to
June 1985. Also a director of Flexsteel
Industries, Inc., MTS Systems Corp., ADC
Telecommunications Inc., National City Bank
of Minneapolis, National City Bancorporation
and Meritex, Inc.; chairman and a director
of Malt-O-Meal Company; and a director of
the Minnesota Center for Corporate
Responsibility and the Bush Foundation.
The affirmative vote of a majority of the shares of Common Stock present in
person or by proxy and entitled to vote at the Meeting is necessary to elect
each director nominee. For this purpose, a shareholder voting through a proxy
who abstains with respect to the election of directors is considered to be
present and entitled to vote on the election of directors at the Meeting, and is
in effect a negative vote; but a shareholder (including a broker) who does not
give authority to a proxy to vote, or withholds authority to vote, on the
election of directors shall not be considered present and entitled to vote on
the election of directors.
BOARD AND BOARD COMMITTEE MEETINGS
During fiscal 1996, Medtronic's Board of Directors held a total of seven Board
meetings. Each director attended 75% or more of the total meetings of the Board
of Directors and Board committees on which the director served (held during the
period he or she served as a director). The standing committees of the Board of
Directors include the Audit Committee, the Compensation Committee, the Finance
Committee, the Corporate Governance Committee and the Technology and Quality
Committee.
AUDIT COMMITTEE. The Audit Committee held three meetings in fiscal 1996.
Committee members are Gotto, Schall, Schuler, Sprenger, Swalin (Chair) and
Wallin. The committee reviews Medtronic's annual financial statements; makes
recommendations regarding Medtronic's independent auditors and scope of auditor
services; reviews the adequacy of accounting and audit policies, compliance
assurance procedures and internal controls; reviews nonaudit services performed
by auditors to maintain auditors' independence; and reports to the Board of
Directors on disclosure adequacy and adherence to accounting principles.
COMPENSATION COMMITTEE. The Compensation Committee held three meetings in fiscal
1996. Committee members are Blodgett, Healy, Heath (Chair), Holloran and
Simonson. The committee reviews compensation philosophy and major compensation
and benefits programs for employees; administers certain stock and benefit
plans; and reviews executive officers' compensation.
FINANCE COMMITTEE. The Finance Committee held seven meetings in fiscal 1996.
Committee members are Blodgett, Heath, Holloran, Schall, Simonson and Sprenger
(Chair). The committee reviews and makes recommendations regarding financial
policies and performance objectives as developed by management, including review
of Medtronic's annual and long-range operating plans; assists management in
evaluation of major acquisitions and divestitures from a financial perspective;
reviews changes in capital structure; and reviews banking relationships,
insurance coverage on assets, tax strategies and financial performance and
related matters pertaining to Medtronic's employee pension and supplemental
retirement plans.
CORPORATE GOVERNANCE COMMITTEE. The Corporate Governance Committee held four
meetings in fiscal 1996. Committee members are Blodgett, Gotto, Healy, Heath,
Holloran, Schall, Schuler, Simonson, Sprenger, Swalin and Wallin (Chair). The
committee addresses all matters of corporate governance; evaluates
qualifications and candidates for positions on the Board; evaluates the
performance of the chief executive officer; reviews major organization changes
and senior management performance; and reviews director compensation philosophy.
The Corporate Governance Committee maintains a Nominating Subcommittee which
considers and recommends to the full Committee criteria for selecting new
directors, nominees for Board membership and the positions of CEO, Chairman and
Chair of the Corporate Governance Committee, and whether a director should be
invited to stand for re-election. The Subcommittee is comprised of the Chair of
the Corporate Governance Committee plus one director selected from each class of
directors. The current Subcommittee held three meetings in fiscal 1996 and
includes Mr. Wallin (Chair), Mr. Blodgett, Dr. Healy and Mr. Heath.
The Corporate Governance Committee will consider nominees for Board membership
submitted by shareholders. Nominations by shareholders must be made pursuant to
timely notice in writing to the Corporate Secretary at 7000 Central Avenue N.E.,
Minneapolis, Minnesota 55432. Candidates for director should be persons with
broad training and experience in their chosen fields and who have earned
distinction in their activities. Notice by the shareholder to be timely must be
received not less than 50 nor more than 90 days prior to the meeting or, if less
than 60 days' disclosure of the meeting date is given, not later than the close
of business on the 10th day following the day on which notice of the meeting
date is mailed or public disclosure of such date is made. The notice shall set
forth certain information concerning such shareholder and the nominees,
including their names and addresses, their principal occupation or employment,
the capital stock of the Company which they beneficially own, such other
information as would be required in a proxy statement soliciting proxies for the
election of the nominees and the consent of each nominee to serve as a director
if so elected. The chairman of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure.
TECHNOLOGY AND QUALITY COMMITTEE. The Technology and Quality Committee held four
meetings in fiscal 1996. Committee members are Gotto (Chair), Healy, Schuler,
Swalin and Wallin. The committee reviews policies, practices, processes and
quality programs concerning technological and product research; reviews efforts
and investments in developing new products and businesses; evaluates Medtronic's
technological education and recognition programs; and reviews quality process
matters with Medtronic's chief quality officer.
CORPORATE GOVERNANCE
The Board of Directors of the Company has focused on corporate governance for a
number of years. Over the past 18 months, the Corporate Governance Committee has
made a systematic review of the Board's processes and policies and, as a result
of this process, adopted certain Principles of Corporate Governance (the
"Principles") as a definitive statement of the elements of governance by which
the Board will manage its affairs. The Principles charge the Corporate
Governance Committee with establishing processes and procedures to ensure
effective and responsive governance of the Company and include a description of
the skills/characteristics and the principal duties of the Chair of the
Corporate Governance Committee, criteria for evaluation of individual director
performance, a description of the duties of the Chairman of the Board, and a
Charter of the Board of Directors intended as a tool to assist directors in
fulfilling their responsibilities as Board members. The Principles also set
forth procedures for evaluating and recommending to the Board any changes in the
Principles. The Principles, which are included as Appendix A to this Proxy
Statement, will be reviewed periodically and modified as needed on
recommendation of the Corporate Governance Committee.
DIRECTOR COMPENSATION
Directors who are not employees of Medtronic receive an annual retainer of
$21,000, $1,100 per Board meeting, $750 per Board committee or subcommittee
meeting, and reimbursement for reasonable expenses of attending meetings. In
addition to these fees, each committee chair receives an annual retainer of
$3,000 and the non-executive Chairman of the Board receives an annual retainer
of $36,000. If the Chief Executive Officer is the Chairman, no retainer will be
paid and instead the Chair of the Corporate Governance Committee will receive an
annual retainer of $15,000 in addition to the above director fees.
The 1994 Stock Award Plan contains provisions permitting directors to elect to
receive all or part of their annual retainer and chairmanship fees in restricted
stock. Restrictions on the stock lapse upon termination as a director due to
death, disability, retirement, or a material change in full-time position or
responsibilities, or upon termination of service as a director with the consent
of the other directors or upon the occurrence of a "change in control" of the
Company as described under "Executive Compensation -- Employment and Change in
Control Arrangements" below.
Under the Company's 1994 Stock Award Plan, each non-employee director
automatically receives an initial stock option grant for Common Stock on the
date he or she becomes a director and an additional automatic annual stock
option grant on the date of the Annual Meeting of Shareholders. The number of
shares subject to the initial stock option is determined by dividing an amount,
currently equal to $168,059 and increased each year proportionately with any
increase in annual retainer, by the per share closing price of the Company's
Common Stock on the New York Stock Exchange on the date of grant. The number of
shares subject to the annual stock option grant is determined by a formula based
on directors' fees. Each grant includes a related grant of limited stock
appreciation rights ("Limited Rights") which are exercisable upon a "change in
control" of the Company, as described under "Executive Compensation --
Employment and Change in Control Arrangements" below. The stock options become
fully exercisable one year after the date of grant, except that the option
granted to a director upon being elected or appointed by the Board will not
become exercisable until the director has also been elected to the Board by the
shareholders. In addition, the plan provides that non-employee directors who
were formerly employees of the Company will receive annual, but not initial,
option grants.
In fiscal 1996, each non-employee director received an annual grant for 822
shares with an exercise price of $46.50; therefore, non-employee directors as a
group received options for a total of 9,042 shares of the Company's Common
Stock, and related limited rights.
Under the Company's retirement plan for directors, each director will receive an
annual benefit, equal to the director's annual retainer in effect when leaving
the Board, following retirement or other cessation of service as a director of
the Company. The annual benefit is payable for a period equal to the years of
service as a director up to a maximum of twenty years. No credit is given for
years of service as a director while an employee of the Company. Each
non-employee director also has group term life insurance in the amount of
$100,000 while a member of the Board.
As part of its overall program to promote charitable giving, the Company's
Foundation matches gifts by directors to qualified educational institutions up
to $4,000 per fiscal year. The Company also has a charitable contribution plan
for all directors of the Company. Upon the death of a director with five or more
years of service, the Company will contribute a total of $1 million to one or
more qualifying charitable institutions recommended by the director and approved
by the Compensation Committee. Directors derive no direct financial benefit from
this program since all charitable deductions accrue to the Company.
Winston R. Wallin, Chairman of the Board of Directors of the Company and its
former chief executive officer, was paid an annual retainer of $36,000 as
Chairman of the Board in fiscal 1996. Mr. Wallin's duties include overseeing
Board governance activities, strengthening relationships between the Board and
management, and consulting with management on business and policy matters. In
addition to the payments indicated, certain other non-cash compensation and
benefits were made available to Mr. Wallin. Mr. Wallin will retire from the
Board on August 28, 1996 in accordance with the Board's mandatory retirement
policy and, in recognition of his years of service to the Company, he will be
provided with an office and a $20,000 per year stipend for secretarial support
for five years after retirement. In addition, the exercise period of Mr.
Wallin's existing stock options has been extended through the end of their
10-year terms.
Earl E. Bakken, Founder and Director Emeritus of the Company, retired from the
Board in August 1994 but continues to act as a consultant to the Company. He was
paid $100,000 for consulting services rendered to the Company during fiscal
1996. Mr. Bakken's duties include representing the Company at major medical
conferences, maintaining relationships with key opinion leaders in the
cardiovascular field, and conducting speaking engagements including employee
meetings and new employee orientation. Mr. Bakken may also attend Board meetings
but does not have the right to vote. He also receives support services,
reimbursement for expenses and certain non-cash benefits. This arrangement is
renewable annually by the Company. Edith W. Martin, Ph.D., who resigned from the
Board effective March 1996, received a $10,000 payment representing the balance
of her retainer for the 1995/1996 year in addition to the standard compensation
arrangements discussed above. From time to time, directors are invited to speak
to employees, for which they are reimbursed their out-of-pocket expenses and
paid an honorarium which is typically about $5,000.
CERTAIN TRANSACTIONS
Mr. Vernon Heath, a director of the Company, is the sole owner of Rosemount
Office Systems, Inc., a manufacturer of open office furniture systems, which
sold approximately $313,000 of such systems to the Company's Micro-Rel division
in fiscal 1996. Also in fiscal 1996, through a competitive bidding process the
Company selected Carlson Wagonlit Travel as its travel agency for Company
business. Dr. Glen Nelson, who is Vice Chairman and a director of the Company,
is a director of Carlson Holdings, Inc., a family-owned business, which includes
Carlson Wagonlit Travel. Members of Dr. Nelson's family are owners and officers
of Carlson Holdings, Inc. The Company paid fees totaling approximately $590,000
to Carlson Wagonlit Travel for services in fiscal 1996. Management believes that
these transactions were on terms no less favorable to the Company than if made
with unaffiliated third parties.
SHAREHOLDINGS OF CERTAIN OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS. To the best of Medtronic's knowledge, no shareholder
beneficially owned more than 5% of Medtronic's Common Stock as of July 5, 1996.
MANAGEMENT SHAREHOLDINGS. The following table shows the number of shares of
Medtronic Common Stock beneficially owned by Medtronic's directors, executive
officers identified in the Summary Compensation Table below, and all directors
and executive officers as a group as of July 5, 1996.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2)
<S> <C>
F. Caleb Blodgett 92,902
Arthur D. Collins, Jr. 236,266
William W. George 861,141(3)
Antonio M. Gotto, Jr., M.D. 15,204
Bobby I. Griffin 222,146
Bernadine P. Healy, M.D. 9,210
Vernon H. Heath 46,102(4)
Thomas E. Holloran 73,718
Glen D. Nelson, M.D. 599,237
Robert L. Ryan 88,877
Richard L. Schall 113,946
Jack W. Schuler 32,988
Gerald W. Simonson 32,652
Gordon M. Sprenger 17,750
Richard A. Swalin, Ph.D. 29,642
Winston R. Wallin 728,667(5)
Directors and executive officers
as a group (22 persons)(2) 3,803,998
</TABLE>
(1) 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 1.6% of the shares outstanding.
(2) Includes the following shares not currently outstanding but deemed
beneficially owned because of the right to acquire them pursuant to
options exercisable within 60 days (on or before September 5, 1996) as
follows: F.C. Blodgett, 8,422 shares; A.D. Collins, Jr., 154,220 shares;
W.W. George, 608,402 shares; A.M. Gotto, Jr., 12,878 shares; B.I.
Griffin, 83,895 shares; B.P. Healy, 4,710 shares; V.H. Heath, 28,902
shares; T.E. Holloran, 18,662 shares; G.D. Nelson, 214,055 shares; R.L.
Ryan, 80,204 shares; R.L. Schall, 28,902 shares; J.W. Schuler, 8,422
shares; G.W. Simonson; 8,422 shares; G.M. Sprenger, 13,942 shares; R.A.
Swalin, 24,702 shares; W.R. Wallin, 178,388 shares; and all directors and
executive officers as a group, 1,697,513 shares.
(3) W.W. George disclaims beneficial ownership of 24,172 shares included in
the above table, which are held by the George Family Foundation, a
charitable trust of which he is one of the trustees.
(4) V.H. Heath disclaims beneficial ownership of 2,000 shares included in the
above table, which are held by The Heath Foundation, a charitable trust
of which he is the trustee.
(5) W.R. Wallin disclaims beneficial ownership of 6,000 shares included in
the above table, which are held by The Wallin Foundation, a charitable
trust of which he is one of the trustees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of the
Securities Exchange Act of 1934 requires the Company's directors and executive
officers to file reports of ownership and changes in ownership of the Company's
Common Stock with the Securities and Exchange Commission and the New York Stock
Exchange, and the Company is required to identify any of those individuals who
failed to file such reports on a timely basis. To the best of the Company's
knowledge, based upon a review of such reports furnished to the Company and
written representations that no other reports were required, there were no late
filings by the Company's directors or executive officers in fiscal 1996, other
than by Dr. Nelson, who inadvertently did not file a timely report of gifts made
in January 1995, and Mr. Sprenger, who inadvertently did not file a timely
report of a stock purchase in April 1993. All such reports were subsequently
filed.
REPORT OF THE COMPENSATION COMMITTEE ON
FISCAL 1996 EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors is
responsible for establishing compensation policy and administering the
compensation programs of the Company's executive officers. The Committee is
comprised of five independent outside directors. The Committee generally meets
three times a year to review executive compensation policies, design of
compensation programs and individual salaries and awards for the executive
officers. The purpose of this report is to inform shareholders of the Company's
compensation policies for executive officers and the rationale for the
compensation paid to executive officers in fiscal 1996.
COMPENSATION PHILOSOPHY
The Company's compensation program is designed to motivate and reward executives
responsible for attaining the financial and strategic goals essential for the
Company's long-term success and continued growth in shareholder value. The
compensation program has been designed to provide a competitive level of total
compensation and offers incentive and equity ownership opportunities directly
linked to the Company's performance and shareholder return. The Committee
believes it is in the best interests of the shareholders to reward executives
when the Company's performance goals are achieved and to provide significantly
less compensation when these goals are not met. Therefore, a significant portion
of executive compensation is comprised of "at risk" performance- and stock-based
incentives.
Key objectives of the compensation program are to:
* Provide a strong, direct link between the Company's short- and
long-term financial and strategic goals and executive
compensation.
* Motivate executives to achieve corporate, business unit and
geographic operating goals through an emphasis on
performance-based compensation.
* Align the interests of executives with those of the Company's
shareholders by providing a significant portion of compensation in
Company Common Stock.
* Provide competitive total compensation in order to attract and
retain high caliber key executives critical to the long-term
success of the Company.
To maintain a competitive level of total executive compensation, the Committee
annually evaluates the compensation packages of certain competitor companies.
This group consists of competitors of the Company that derive at least 25% of
their revenues from medical devices or equipment. This analysis provides the
Committee with competitive data on the mix of compensation elements, the balance
of short- and long-term incentives, and overall compensation levels. Differences
in company size are adjusted through statistical analysis. Most of the surveyed
companies are included in the industry group presented in the performance graph
on page 14 of this Proxy Statement. The Committee also uses annual
cross-industry compensation data from a survey of more than 300 U.S.
manufacturing companies, including many Fortune 1,000 companies and industry
competitors. The Committee's goal is to position the target total compensation
for executive officers at the median of the marketplace and the actual total
compensation in excess of the median when the Company outperforms the target
performance goals. In fiscal 1996, due to strong corporate operating performance
and stock appreciation, the actual total compensation of executive officers and
of the chief executive officer was generally above the median of the
above-described peer and cross-industry groups.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The key components of the Company's executive officer compensation program are
base salary, annual incentives and long-term incentives. These elements are
described below. In determining compensation, the Committee considers all
elements of an executive's compensation package.
BASE SALARY. The Committee annually reviews the base salaries of executive
officers. In determining appropriate salary levels, the Committee considers
individual performance, level of responsibility, scope and complexity of the
position, and salary levels for comparable positions at the peer and
cross-industry companies referenced above. In addition, in determining the base
salary for the chief executive officer, the Committee also considers annual
operating performance, strategic planning and succession planning for senior
management. Factors considered in determining base salary are not assigned
pre-determined relative weights.
Effective fiscal 1996, the compensation committee approved a merit increase of
13.2% For Mr. George. In determining the size of the merit increase, the
committee took into consideration the strong operating performance of the
company, which significantly exceeded annual financial targets, Mr. George's
leadership role in the continuing development and implementation of the
company's strategic goals and the compensation levels of the ceo positions in
the surveyed companies referenced above.
ANNUAL INCENTIVE AWARDS. The purpose of the Company's annual incentive plan is
to provide a direct annual financial incentive to executive officers and key
managers who achieve corporate operating, business unit and geographic
performance goals established under the Company's annual operating plan.
Executive officers are eligible for target awards under the annual incentive
plan ranging from 50% to 65% of base salary, with 65% in the case of the chief
executive officer. The size of the target award is determined by the executive
officer's position and competitive data for similar positions at the peer and
cross-industry companies referenced above. The Company sets aggressive
performance goals and, in keeping with the strong performance-based philosophy,
the resulting awards decrease or increase substantially if actual Company
performance fails to meet or exceeds targeted levels. The awards can range from
0% to 150% of the target amounts, and a threshold level of performance is
required before any payout occurs. For fiscal 1996, corporate operating
performance was assessed against a target measure of corporate profit after
taxes and after-tax return on net assets, with these measures given respective
weights of 60% and 40%. Business unit and geographic financial performance were
assessed against target measures of earnings before interest and taxes, revenue,
after-tax return on net assets and/or net asset turnover, with these measures
assigned respective weights that vary for each participant. In addition, award
payouts to participants could be increased by up to 5% depending on either
corporate or geographic performance against the Company's long-term strategic
revenue growth goal. In fiscal 1996, all executive officers earned annual
incentive compensation because their respective performance levels were
exceeded.
Mr. George's annual incentive compensation is based solely on the corporate
operating performance of the Company. For fiscal 1996, Mr. George earned an
award of 150% of the target level because actual corporate profit after taxes
and after-tax return on net assets (weighted at 60% and 40%, respectively)
exceeded the maximum performance targets. Mr. George's award was increased by an
additional 5% because the Company significantly outperformed its long-term
strategic goal for revenue growth.
In keeping with the Company's philosophy of encouraging stock ownership by
executives, the Company offers a program which allows executives to elect to
receive stock options in lieu of some or all of the cash compensation earned
under the annual incentive plan. By foregoing cash compensation for stock
options, the variable "at risk" component of the executive's compensation
package is extended and executives are further motivated to perform to increase
shareholder value over the long term. Under the program, the amount of the stock
option grant is determined by the Committee based on consideration of a number
of factors, including a present value estimate of stock option value, the degree
of risk incurred by the executive and the positive economic impact to the
Company.
For fiscal 1996, all of the executives named in the Summary Compensation Table
below elected to participate in the program. Mr. George elected to forego
$200,000 of annual incentive compensation and was granted an option to purchase
up to 15,059 shares at an exercise price of $53.125, which was the fair market
value of the Company's stock on April 30, 1996.
LONG-TERM INCENTIVE PLANS. Long-term incentives are provided to executive
officers primarily through the Company's performance share and stock option
programs.
The primary purpose of the performance share program is to motivate executive
officers to achieve the long-term performance goals of the Company. These
targets are based on the Company's long-term financial goals, with consideration
given to an historic analysis of the Company and peer group companies'
performance. The target award for each executive officer is also approved by the
Committee based on the scope and complexity of the position and competitive
compensation data.
The program provides the possibility of earning a payout in Company Common Stock
and cash at the end of a three-year performance cycle. As with short-term
incentive compensation, a threshold level of performance is required before
payout occurs. At the end of each three-year cycle, the award earned can range
from 0% to 180% of the initial performance share units awarded. Performance
targets are consistent with the Company's long-term financial goals and were
measured in fiscal 1996 based on three-year cumulative earnings per share and
three-year average after-tax return on net assets, with these two measures given
equal weight in determining performance level. The value of the award is
determined by the average price of the Company's Common Stock for the last 20
trading days of the performance cycle, up to a maximum of three times the grant
price of the performance shares. At least half of the award must be paid in the
Company's stock, with the other half paid in cash or Company Common Stock at the
discretion of the Committee. The plan is thus aligned with both financial
results and shareholder value, as the percentage payout varies with financial
performance, and the value of the performance share units varies with the stock
price.
For the three-year cycle ended in fiscal 1996, the Company achieved cumulative
earnings per share and average after-tax return on net assets significantly in
excess of performance targets. Consequently, the payout for this cycle for all
executive officers, including Mr. George, was 180% of the target award. Because
of the significant appreciation in the Company's stock price during the
performance cycle, the value of the award was limited to the maximum share price
allowed by the program.
The Company's stock option program provides compensation opportunities that
directly link the interests of management and shareholders, and aid in retaining
key executive officers. Executive officers are eligible for annual grants of
stock options. Guideline levels of options are prepared based on competitive
data from the peer and cross-industry companies referenced above. Individual
awards are based on the individual's responsibilities and performance, ability
to impact financial performance and future potential. These factors are not
assigned pre-determined relative weights. All individual stock option grants for
executive officers are reviewed and approved by the Committee. Executive
officers receive gains from exercised stock options only to the extent that the
fair market value of the stock has increased since the date of option grant.
In fiscal 1996, Mr. George was granted an annual stock option to purchase up to
15,704 shares of the Company's Common Stock at an average exercise price of
$54.125 per share.
TOTAL COMPENSATION OF CHIEF EXECUTIVE OFFICER. Mr. George's total compensation
for fiscal 1996 was designed so that a significant portion of pay was linked to
Company performance. Of his total compensation, 80% was derived from variable
annual and long-term incentive elements. This "at risk" portion of compensation
was heavily weighted with long-term incentives (approximately 59% of Mr.
George's total compensation was derived from stock option and performance share
programs). The emphasis on "at risk" and long-term incentives is intended to
align Mr. George's compensation with the achievement of long-term growth and
performance by the Company.
DEDUCTIBILITY CAP ON EXECUTIVE COMPENSATION
The Internal Revenue Code generally denies the deduction for compensation in
excess of $1,000,000 paid to executive officers named in the Proxy Statement,
subject to an exception for "performance-based" compensation. Performance-based
compensation, as defined in the tax law, is not subject to this limitation on
deductibility provided that certain shareholder approval and other requirements
are met. The Committee has determined that it will make every effort, consistent
with sound executive compensation principles, to ensure that all amounts paid to
the executive officers named in the Proxy Statement are deductible by the
Company. The Committee expects that all performance-based compensation paid
under its 1994 Stock Award Plan and Management Incentive Plan will qualify for
deductibility.
CONCLUSION
The executive officer compensation program administered by the Committee
provides incentive to attain strong financial performance and an alignment with
shareholder interests. The Committee believes that the Company's compensation
program focuses the efforts of the Company's executive officers on the continued
achievement of growth and profitability for the benefit of the Company's
shareholders.
COMPENSATION COMMITTEE:
Vernon H. Heath, Chair Thomas E. Holloran
F. Caleb Blodgett Gerald W. Simonson
Bernadine P. Healy, M.D.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The graph and table below compare the cumulative total shareholder return on the
Company's Common Stock for the last five fiscal years with the cumulative total
return on the S&P 500 Index and the S&P Medical Products and Supplies Index over
the same period. The graph and table assume the investment of $100 in each of
the Company's Common Stock, the S&P 500 Index and the S&P Medical Products and
Supplies Index on May 1, 1991 and that all dividends were reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG MEDTRONIC,
S&P 500, AND S&P MEDICAL PRODUCTS & SUPPLIES INDUSTRY INDEX
[GRAPH]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
MEDTRONIC $100.00 $118.56 $119.16 $138.42 $275.68 $395.83
S&P 500 100.00 114.05 124.56 131.20 154.05 200.47
S&P MP&S 100.00 110.50 88.15 82.67 128.83 174.08
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation for each of
the last three fiscal years ended April 30, 1996 awarded to or earned by the
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- ------------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($)(2) (#)(3)(4) ($)(6) ($)(7)
- - --------------------- ---- -------- -------- ------- ------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William W. George 1996 $600,000 $415,000(3) -- -- 30,763 $1,295,977 $50,712
President and Chief 1995 530,007 303,368(4) -- -- 67,228 894,841 41,911
Executive Officer 1994 479,991 324,282 -- -- 128,596(5) 490,677 55,085
Glen D. Nelson, M.D. 1996 440,000 0(3) $ 5,266 -- 43,020 899,231 39,210
Vice Chairman 1995 409,956 0(4) 24,708 -- 65,686 620,896 39,047
1994 369,996 208,308 21,111 -- 27,952 334,990 31,366
Arthur D. Collins, Jr. 1996 440,000 343,000(3) 787 -- 17,195 702,011 38,061
Chief Operating Officer 1995 384,313 228,454(4) 2,212 -- 47,616 484,790 29,700
1994 335,833 164,699 1,461 -- 15,972 -- 131,889(8)
Robert L. Ryan 1996 335,500 0(3) -- -- 26,214 648,177 27,234
Senior Vice President and 1995 316,499 0(4) 391 -- 45,040 -- 23,146
Chief Financial Officer 1994 300,000 135,120 -- -- 26,556 -- 94,599(9)
Bobby I. Griffin 1996 325,000 0(3) 1,462 -- 26,967 586,484 30,412
Executive Vice President 1995 298,732 40,307(4) 3,974 -- 36,324 405,136 24,112
and President, Pacing 1994 271,575 110,585 2,973 $12,480 15,972 230,014 26,305
</TABLE>
(1) Amounts payable by the Company in above-market interest under deferred
compensation plan.
(2) On June 23, 1993, Mr. Griffin received a restricted stock award for 780
shares in connection with his induction into the Company's honorary
technology society. The shares vested 100% on June 22, 1994. Dividend
equivalents were paid on the restricted stock held by Mr. Griffin. As of
April 30, 1996, Messrs. George, Nelson, Collins, Ryan and Griffin held no
restricted stock.
(3) "Bonus" column does not include fiscal 1996 cash bonus payments of
$200,000, $418,000, $75,000, $268,400 and $260,000 which Messrs. George,
Nelson, Collins, Ryan and Griffin, respectively, elected to forgo in
order to receive stock options granted in lieu of part or all of their
cash bonus compensation under the annual incentive plan. These stock
options are included in the "Securities Underlying Option/SARs" column.
See "Report of the Compensation Committee on Fiscal 1996 Executive
Compensation -- Annual Incentive Awards" and "Option/SAR Grants in Last
Fiscal Year," below.
(4) "Bonus" column does not include fiscal 1995 cash bonus payments of
$150,000, $323,701, $75,000, $208,256 and $170,000 which Messrs. George,
Nelson, Collins, Ryan and Griffin, respectively, elected to forgo in
order to receive stock options granted in lieu of part or all of their
cash bonus compensation under the annual incentive plan. These stock
options are included in the "Securities Underlying Option/SARs" column.
See "Report of the Compensation Committee on Fiscal 1996 Executive
Compensation -- Annual Incentive Awards" and "Option/SAR Grants in Last
Fiscal Year," below. That column also includes stock options granted in
fiscal 1995 to replace certain discontinued non-qualified supplementary
retirement benefits.
(5) Includes stock option to purchase up to 89,728 shares of Common Stock in
exchange for terminating existing non-qualified retirement benefit of
$100,000 per year for life.
(6) Includes the value of both cash and stock earned in fiscal 1996 under the
Company's long-term incentive plan described in "Other Long-Term
Incentive Awards" below. The stock for the fiscal 1996 payment was valued
at $54.1375 per share, the average fair market value for the last 20
trading days in April 1996.
(7) Amounts in this column for fiscal 1996 include the following: the Company
contributed $6,000 under the employee stock ownership plan for each of
the named executive officers for fiscal 1996; the Company contributed
$9,500 to Messrs. George and Griffin, $9,000 to Messrs. Nelson and
Collins, and $6,000 to Mr. Ryan to match employee contributions under the
401(k) supplemental retirement plan; and the Company contributed $35,212,
$24,210, $23,061, $15,234 and $14,912 to Messrs. George, Nelson, Collins,
Ryan and Griffin, respectively, under the non-qualified supplemental
benefit plan.
(8) Includes $100,000 employment award for 1994 in connection with his
initial hiring.
(9) Includes $89,550 in relocation expenses.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth for each of the named executives the stock
options granted by the Company in fiscal 1996 and the potential value of these
stock options determined pursuant to Securities and Exchange Commission
requirements. No stock appreciation rights were granted to the named executives
in fiscal 1996.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------- ---------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION 0% 5% 10%
NAME (#) FISCAL YEAR ($/SH) DATE ($) ($)(3) ($)(3)
- - ---- ----------- ----------- ------ ---- --- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
W. W. George 15,704(1) 2.1% $54.125 11/30/05 $0 $ 535,487 $1,351,467
15,059(2) 2.1 53.125 05/01/06 0 504,006 1,272,015
G. D. Nelson, M.D. 11,547(1) 1.6 54.125 11/30/05 0 393,738 993,720
31,473(2) 4.3 53.125 05/01/06 0 1,053,362 2,658,485
A. D. Collins, Jr. 11,547(1) 1.6 54.125 11/30/05 0 393,738 993,720
5,648(2) 0.8 53.125 05/01/06 0 189,032 477,080
R. L. Ryan 6,005(1) 0.8 54.125 11/30/05 0 204,763 516,783
20,209(2) 2.8 53.125 05/01/06 0 676,370 1,707,029
B. I. Griffin 7,390(1) 1.0 54.125 11/30/05 0 251,990 635,974
19,577(2) 2.7 53.125 05/01/06 0 655,218 1,653,645
</TABLE>
(1) These stock options granted to the named executive officers have an
exercise price equal to the fair market value on the date of grant and
vest annually in 25% increments.
(2) These stock options were granted in lieu of all or part of the cash
compensation earned for fiscal 1996 under the Company's annual incentive
plan. Because the executives elected to forego cash compensation to
receive the options, which were granted on 5/1/96, the options are 100%
vested at grant. See "Report of the Compensation Committee on Fiscal 1996
Executive Compensation -- Annual Incentive Awards."
(3) The hypothetical potential appreciation shown in these columns reflects
the required calculations at annual rates of 5% and 10% set by the
Securities and Exchange Commission, and therefore is not intended to
represent either historical appreciation or anticipated future
appreciation of the Company's Common Stock price.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth for each of the named executive officers the
value realized from stock options exercised during fiscal 1996 and the number
and value of exercisable and unexercisable stock options and stock appreciation
rights held at April 30, 1996.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS/SARS IN-THE-MONEY
AT FISCAL OPTIONS/SARS AT
YEAR-END (#) FISCAL YEAR-END ($)(1)
------------ ----------------------
SHARES VALUE
ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE ($) UNEXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
W. W. George 0 0 606,124/174,011 $26,140,196/5,212,532
G. D. Nelson, M.D. 0 0 212,745/55,293 6,276,061/1,283,227
A. D. Collins, Jr. 0 0 152,190/54,893 4,905,284/1,221,036
R. L. Ryan 6,600 $271,656 75,761/45,477 1,385,522/1,195,252
B. I. Griffin 0 0 83,103/32,504 1,914,991/735,915
</TABLE>
(1) Value of unexercised in-the-money options is determined by multiplying
the difference between the exercise price per share and $53.125, the
closing price per share on April 30, 1996, by the number of shares
subject to such options. Amounts include stock options granted on 5/1/96
in lieu of cash compensation earned for fiscal 1996 under the Company's
annual incentive plan. See "Report of the Compensation Committee on
Fiscal 1996 Executive Compensation -- Annual Incentive Awards."
OTHER LONG-TERM INCENTIVE AWARDS
The following table sets forth the number of performance share units granted to
each of the named executives in fiscal 1996 under the Company's 1994 Stock Award
Plan and the performance-based award formula under such plan.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE
BASED-PLANS
NUMBER OF PERFORMANCE OR ----------------------------------
SHARES, UNITS OTHER PERIOD
OR OTHER UNTIL
RIGHTS MATURATION THRESHOLD TARGET MAXIMUM
NAME (#) OR PAYOUT ($) ($) ($)
- - ---- --- --------- --- --- ---
<S> <C> <C> <C> <C> <C>
W. W. George 8,300 5/1/95- 4/30/98 $88,810 $444,050 $799,290
G. D. Nelson, M.D. 5,478 5/1/95- 4/30/98 58,615 293,073 527,531
A. D. Collins, Jr. 5,478 5/1/95- 4/30/98 58,615 293,073 527,531
R. L. Ryan 3,714 5/1/95- 4/30/98 39,740 198,699 357,658
B. I. Griffin 3,598 5/1/95- 4/30/98 38,499 192,493 346,487
</TABLE>
(1) Payout of awards is based on achieving specified levels of designated
performance objectives during a three-year performance cycle. Payout can
range from 0% to 180% of units granted, with 20% and 180% as the
threshold and maximum payouts, respectively. Payout of 100% of the units
granted represents the target payout. Awards are payable at least 50% in
Common Stock, with the remainder paid in cash or Common Stock at the
discretion of the Compensation Committee. The value in dollars is
determined when the award is earned based on the average fair market
value per share for the last 20 trading days of the performance cycle.
For illustrative purposes, the value of estimated future payouts was
determined using the closing price of the Common Stock on July 5, 1996
($53.50 per share). See "Report of the Compensation Committee on Fiscal
1996 Executive Compensation -- Long-Term Incentive Plans" above.
PENSION PLAN
The Company's pension plan is a defined benefit, tax qualified retirement plan
covering most U.S. employees and generally provides 40% of the average of the
highest five consecutive years of compensation (including certain incentive
compensation) in the final ten years of service, offset by a Social Security
allowance as published each year by the Internal Revenue Service. The table
below illustrates the annual benefits payable to participants who retire at age
65 with the indicated years of service with Medtronic and with the indicated
five-year highest average annual compensation. The benefits have been calculated
on a 50% joint and survivor annuity basis, before reduction for any amounts that
may be available from Medtronic's former Retirement Account Plan. The
compensation considered in determining the pensions payable to the below-named
executive officers is the compensation shown in the "Salary" and "Bonus" columns
of the Summary Compensation Table on page 15.
<TABLE>
<CAPTION>
FIVE-YEAR
AVERAGE YEARS OF SERVICE WITH THE COMPANY
ANNUAL ---------------------------------------------------------
COMPENSATION(1) 15 20 25 30 35
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 35,028 $ 46,704 $ 58,380 $ 70,055 $ 74,434
400,000 70,948 94,597 118,246 141,895 150,764
600,000 106,868 142,490 178,113 213,735 227,094
800,000 142,788 190,384 237,980 285,575 303,424
1,000,000 178,708 238,277 297,846 357,415 379,754
1,200,000 214,628 286,170 357,713 429,255 456,084
1,400,000 250,548 334,064 417,580 501,095 532,414
</TABLE>
(1) Calculated by considering a participant's compensation levels during the
ten-year period immediately preceding retirement. The credited years of
service (rounded to the nearest whole year) for the executive officers
named in the Summary Compensation Table were as follows at April 30,
1996: W.W. George, 7 years; G.D. Nelson, 10 years; A.D. Collins, Jr., 4
years; R.L. Ryan, 3 years; and B.I. Griffin, 23 years.
Certain limitations on the amount of benefits under the Company's tax qualified
retirement plan were imposed by the Employee Retirement Income Security Act of
1974 ("ERISA") and Tax Reform Act of 1986 ("TRA"). The Company's non-qualified
supplemental benefit plan provides for the restoration of benefits to officers
who may be affected by those limitations so that, in general, total benefits
will be equal to the level of benefits which would have been payable under the
Company's retirement plan and employee stock ownership plan but for the ERISA
and TRA limitations. The amounts shown in the pension plan table above include
the additional retirement benefits provided under the non-qualified supplemental
benefit plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 1996, the members of the Compensation Committee were Heath (Chair),
Blodgett, Healy, Holloran, and Simonson. Mr. Holloran served in various
capacities as an officer of the Company from 1961 to 1975, including serving as
president of the Company from January 1974 to December 1975. Under Section
162(m) of the Internal Revenue Code, Mr. Holloran is considered an outside
director until the date of the 1996 Annual Meeting of Shareholders, at which
time he will rotate off the Committee.
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
CHANGE IN CONTROL ARRANGEMENTS. The executive officers of the Company, including
those named in the Summary Compensation Table, have change in control agreements
(the "Agreements") with the Company. The Agreements operate only upon the
occurrence of a "change in control" as described below. Absent a "change in
control" the Agreements do not require the Company to retain the executives or
to pay them any specified level of compensation or benefits.
Each Agreement provides that for three years after a "change in control" there
will be no adverse change in the executive's salary, bonus, opportunity,
benefits or location of employment. If during this three-year period the
executive's employment is terminated by the Company other than for cause, or if
the executive terminates his employment for good reason (as defined in the
Agreements, and including compensation reductions, demotions, relocation and
excess travel), or voluntarily during the 30-day period following the first
anniversary of the "change in control," the executive is entitled to receive an
accrued salary and annual incentive payment through the date of termination and,
except in the event of death or disability, a lump sum severance payment ("Lump
Sum Payment") equal to three times (two times in the event of termination by the
executive in the aforementioned 30-day period) the sum of his base salary and
annual bonus (and certain insurance and other welfare plan benefits). Further,
an additional payment ("gross-up") is required in an amount such that after the
payment of all taxes, income and excise, the executive will be in the same
after-tax position as if no excise tax under the Internal Revenue Code had been
imposed.
Generally, and subject to certain exceptions, a "change in control" is deemed to
have occurred if: (a) a majority of Medtronic's Board of Directors becomes
comprised of persons other than persons for whose election proxies have been
solicited by the Board, or who are then serving as directors appointed by the
Board to fill vacancies caused by death or resignation (but not removal) of a
director or to fill newly created directorships; (b) another party becomes the
beneficial owner of at least 30% of Medtronic's outstanding voting stock; or (c)
Medtronic's shareholders approve a definitive agreement or plan to merge or
consolidate Medtronic with another party (other than certain limited types of
mergers), exchange shares of voting stock of Medtronic for shares of another
corporation pursuant to a statutory exchange, sell or otherwise dispose of all
or substantially all of Medtronic's assets, or liquidate or dissolve Medtronic.
If a "change in control" of the Company occurred mid-fiscal 1997 (November 1,
1996) and resulted in the involuntary termination of the named executives at
such time or the termination by such executives for good reason, the Lump Sum
Payment to be made under such Agreements to those executive officers named in
the Summary Compensation Table above would be approximately as follows: W.W.
George, $3,177,900; G.D. Nelson, $2,260,800; A.D. Collins, Jr., $2,260,800; R.L.
Ryan, $1,586,250; and B.I. Griffin, $1,575,000. Such amounts are exclusive of
the additional gross-up payment required under each of the Agreements as a
result of excise taxes.
In addition, events substantially identical to those described above also
constitute a "change in control" under certain of the Company's compensation
plans. The effects of a change in control under these plans with respect to the
compensation of each of the executive officers named in the Summary Compensation
Table are described below.
If a "change in control" of the Company occurs, awards under the Company's
Management Incentive Plan will accelerate and, subject to certain limitations
set forth in the plan, each participant will be entitled to a final award based
on certain assumptions as to target performance and salary. If a "change in
control" of the Company occurred mid-fiscal 1997 (November 1, 1996), the awards
under this plan to be paid to those executive officers named in the Summary
Compensation Table above would be approximately as follows: W.W. George,
$417,300; G.D. Nelson, $282,600; A.D. Collins, Jr., $282,600; R.L. Ryan,
$176,250; and B.I. Griffin, $175,000.
The Company's stock award plans and agreements thereunder provide that in the
event of a "change in control" of the Company, all restrictions under
outstanding restricted stock awards shall immediately lapse and the restricted
stock period with respect to all such shares shall be deemed to have expired,
and performance share awards shall vest immediately in a pro rata amount based
on the portion of the performance period elapsed prior to the "change in
control" and certain assumptions as to the anticipated performance which would
have been achieved during the applicable performance period. If a "change in
control" of the Company occurred mid-fiscal 1997 (November 1, 1996) and further
assuming for this purpose a market price for the Company's Common Stock at such
time of $53.50 (the July 5, 1996 New York Stock Exchange closing price), the
awards to be paid to those executive officers named in the Summary Compensation
Table above would be approximately as follows for the performance share awards:
W.W. George, $1,626,552; G.D. Nelson, $1,115,027; A.D. Collins, Jr., $1,064,951;
R.L. Ryan, $761,884 and B.I. Griffin, $725,247. None of the named executive
officers has outstanding restricted stock awards.
The Company's stock award plans and agreements thereunder also provide for or
permit acceleration of the exercisability of outstanding stock options upon the
occurrence of certain events (such as certain tender offers or exchange offers
for the Company's stock, certain changes in control of the Company, a merger or
consolidation of the Company with another entity, or a sale of substantially all
of the Company's assets or certain plans therefor) or at the discretion of the
Board of Directors.
Limited stock appreciation rights ("Limited Rights") granted under the stock
option plans are exercisable, with certain limitations, at any time within the
thirty-day period following a "change in control" of Medtronic. Upon exercise of
Limited Rights, the holder is entitled to receive an amount in cash for each
share with respect to which the Limited Rights are exercised equal to the
difference between the option exercise price per share of stock covered by the
underlying option and the fair market value per share as of the date of
exercise. If Limited Rights are exercised, the underlying option will no longer
be exercisable to the extent of the number of shares with respect to which the
Limited Rights were exercised.
If a "change in control" occurs, subject to certain limitations, Medtronic's
contributions to the employee stock ownership plan for that year will equal the
greater of Medtronic's target percentage contribution (currently 2.5% of
aggregate covered employee compensation in fiscal 1996) or, if a "change in
control" occurs after the first quarter of a plan year, the percentage
contribution Medtronic would have made upon completion of the plan year based on
performance as most recently projected by Medtronic prior to the "change in
control" and disregarding the effects of the "change in control."
If a "change in control" occurs during a plan year, subject to certain
limitations, Medtronic's matching contribution to the 401(k) supplemental
retirement plan shall equal the greater of Medtronic's target percentage
matching contribution (currently 62.5% of the first 6% of a participant's
contribution in fiscal 1996), or if the "change in control" occurs after the
first quarter of a plan year, the percentage contribution Medtronic would have
made upon completion of the plan year based on performance as most recently
projected by Medtronic prior to the "change in control" and disregarding the
effects of the "change in control."
OTHER EMPLOYMENT ARRANGEMENTS. Under the Company's postretirement survivor
benefit plan, designated beneficiaries or the estate of each executive officer
who retires with the Company (as defined in the Company's tax-qualified employee
retirement plans) shall be entitled to receive following the officer's death a
lump sum payment equal to the annual salary of such officer in effect at the
date of retirement.
APPROVAL OF SELECTION OF AUDITORS
Upon recommendation of its Audit Committee, Medtronic's Board has selected Price
Waterhouse LLP, certified public accountants, as independent auditors for
Medtronic for the fiscal year ending April 30, 1997. That firm has acted as
independent auditors for Medtronic for more than 20 years, and the Board
considers it highly qualified. Although it is not required to do so, the Board
of Directors wishes to submit the selection of Price Waterhouse LLP for
shareholders' approval at the Meeting. If the shareholders do not give approval,
the Board will reconsider its selection.
Representatives of Price Waterhouse LLP will be present at the Meeting, will
have the opportunity to make a statement if they desire and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS
APPOINTMENT.
GENERAL
The costs of soliciting proxies will be borne by Medtronic, including the
reimbursement to record holders of their expenses in forwarding proxy materials
to beneficial owners. Directors, officers and regular employees of Medtronic,
without extra compensation, may solicit proxies personally or by mail,
telephone, fax, telex, telegraph or special letter.
Medtronic has retained Chase Mellon Shareholder Services, a firm that provides
professional proxy soliciting services, to aid in the solicitation of proxies
for a fee of $9,500 plus reimbursement for certain out-of-pocket expenses.
Any shareholder proposals for the Company's 1997 Annual Meeting of Shareholders
(anticipated date August 27, 1997) must be received by the Company by March 28,
1997 in order to be included in the Company's Proxy Statement. The proposals
also must comply with all applicable statutes and regulations.
Medtronic's 1996 Annual Shareholders Report, including financial statements, is
being sent to shareholders of record as of July 5, 1996, together with this
Proxy Statement.
MEDTRONIC WILL FURNISH TO SHAREHOLDERS WITHOUT CHARGE A COPY OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 30, 1996, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, UPON RECEIPT OF WRITTEN REQUEST ADDRESSED
TO: INVESTOR RELATIONS DEPARTMENT, MEDTRONIC, INC., 7000 CENTRAL AVENUE N.E.,
MINNEAPOLIS, MINNESOTA 55432.
The Board of Directors knows of no other matters to be presented at the Annual
Meeting. If any other business properly comes before the Annual Meeting or any
adjournment thereof, the proxies will vote on that business in accordance with
their best judgment.
By Order of the Board of Directors,
/s/ Ronald E. Lund, Secretary
Ronald E. Lund, Secretary
MEDTRONIC, INC.
APPENDIX A
MEDTRONIC, INC.
PRINCIPLES OF CORPORATE GOVERNANCE
I. PURPOSE AND NATURE OF PRINCIPLES
These principles have been adopted by Board resolution as a definitive
statement of the elements of governance by which the Board will manage
its affairs.
These principles replace all previous Board policies on this subject and
will be reviewed and modified by the Board as needed on recommendation of
the Corporate Governance Committee.
II. CORPORATE GOVERNANCE COMMITTEE
This Committee consists of all of the outside directors and is chaired by
the Chairman of the Board except at times when the Chairman and CEO are
the same. In such case, it will be chaired by the Chair of the Corporate
Governance Committee. The Skills/Characteristics and the Principal Duties
of the Chair of the Corporate Governance Committee are attached hereto as
Exhibits 1 and 2, respectively. The Committee is intended to provide a
forum for outside directors to address all issues of Corporate
Governance.
The principal elements of the charter of the Governance Committee shall
be to:
* Adopt, regularly monitor and recommend to the Board any
modifications of these principles of Corporate Governance which
may be necessary.
* Recommend to the Board the selection and replacement, if
necessary, of the CEO and periodically evaluate the performance of
the CEO and of the Board as a whole.
* Conclude each Committee meeting with an executive session.
* Form from its ranks a Nominating Subcommittee consisting of the
Chair of the Corporate Governance Committee, plus one member from
each class of directors, selected by the Chair of the Corporate
Governance Committee, to recommend to the full committee:
* Criteria for selection of new directors and nominees for
vacancies on the Board.
* Candidates for Board membership and for the positions of
CEO, Chairman and Chair of the Corporate Governance
Committee.
* A decision on the tendered resignation of a director for
reason of change of employment.
* To evaluate the performance of any director whose term is
expiring and whether such director should be invited to
stand for reelection. Attached hereto as Exhibit 3 are the
Criteria for Evaluation of Individual Director Performance.
* Act on recommendations made by the Nominating Subcommittee.
* Establish any Special Committee which may be necessary to properly
govern ethical, legal or other matters which might arise.
* Review and approve for all meetings of the Board and all
committees an annual calendar recommended by the Chairman and CEO.
* Review and determine the philosophy underlying directors'
compensation and be informed regarding the Compensation
Committee's actions in approving executive compensation and the
underlying philosophy for it.
* In carrying out its duties, the Committee and Nominating
Subcommittee will consult with and solicit the views of the CEO.
III. OFFICES OF THE CHAIRMAN AND THE CEO
The Board does not have a firm policy as to whether the position of the
Chairman and the position of the CEO should be separate and intends to
preserve the freedom to decide what is in the best interest of the
company at any point of time.
However, the Board does strongly endorse the concept of one of the
outside directors being in a position of leadership for the rest of the
outside directors. If at any time the CEO and Chairman are the same, the
Corporate Governance Committee will elect a Chair of the Corporate
Governance Committee from the membership of the Committee.
The principal duties of the Chairman of the Board are attached as Exhibit
4.
IV. COMMITTEES -- STRUCTURE AND PROCEDURES
The standing committees of the Board shall be:
* Corporate Governance Committee and its Nominating
Subcommittee
* Audit Committee
* Compensation Committee
* Finance Committee
* Technology and Quality Committee
Each committee shall have a charter approved by that committee and by the
Committee on Corporate Governance. The Board will adopt a charter,
attached as Exhibit 5, to assist directors to understand their
responsibilities and the role of the Board.
Each committee shall be chaired by an outside director who shall serve as
chair no longer than three successive years.
As a general rule, directors shall serve on two committees in addition to
the Corporate Governance Committee. Membership on committees shall be
rotated to provide all directors experience on all committees; however,
this principle of rotation should not deprive the Board of expertise that
directors possess.
V. BOARD COMPOSITION, SELECTION AND TENURE OF DIRECTORS
Directors who are currently employed by the company shall be deemed
"inside" directors; and all others shall be deemed "outside" directors,
including former employees of the company.
Outside directors shall always constitute at least a majority of the
Board, and there shall be no more than three inside directors on the
Board at any time.
To more closely align their interests with those of shareholders
generally, directors are encouraged to own stock of the company in an
amount equal to five times the annual Board retainer fees. Such holdings
should be considered long-term investments and be achieved within five
years of joining the Board. Trading in the company's stock is
discouraged.
An inside director shall submit his or her resignation from the Board
upon termination of his or her active service as an employee.
A director shall retire from the Board at the annual meeting of
shareholders next following his or her attaining the age of 70.
An outside director shall tender a written offer to resign from the Board
after a material change in that director's full-time position or
responsibilities.
VI. BOARD MEETINGS
At this time six regular meetings are held each year. One meeting is
usually an extended meeting focusing on long-range strategies of the
company and will normally be held away from Minneapolis, preferably at or
near one of the company's facilities. The Corporate Governance Committee
shall determine from time to time the appropriate number of meetings.
Appropriate officers of the company may be invited by the Chief Executive
Officer and Chairman of the Board to attend the general session of all
Board meetings.
Prior to a regular Board meeting, with direction from the Chairman of the
Board or Chair of the Corporate Governance Committee and the Chief
Executive Officer, an agenda for the meeting and any information or
material for review will be sent to the directors. Development of the
agenda is the responsibility of the Chairman of the Board, in
collaboration with the Chair of the Corporate Governance Committee.
Directors may request that additional subjects be placed on the agenda.
MEDTRONIC, INC.
PROXY
ANNUAL MEETING -- AUGUST 28, 1996
The undersigned appoints WINSTON R. WALLIN and RONALD E. LUND, and each of them,
as Proxies, each with the power to appoint his substitute, to represent and
vote, as designated below, all shares of the undersigned at the 1996 Annual
Meeting of Shareholders of Medtronic, Inc. at the Medtronic, Inc. Corporate
Center at its Rice Creek facility, 7000 Central Avenue N.E., Minneapolis
(Fridley), Minnesota, at 10:30 a.m., Central Daylight Time, on Wednesday, August
28, 1996, and at any adjournment thereof.
The Board of Directors recommends votes FOR:
1. Set board size at twelve members and elect Class I directors for three
year terms:
Nominees: GLEN D. NELSON, M.D., JACK W. SCHULER, GERALD W. SIMONSON and
RICHARD A. SWALIN, PH.D
[ ] FOR all nominees listed above (except those whose names have been written
on the line below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE THAT
NOMINEE'S NAME ON THE LINE BELOW.)
- - --------------------------------------------------------------------------------
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)
2. Approve appointment of Price Waterhouse LLP as independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.
Date: __________________________, 1996
______________________________________
______________________________________
______________________________________
PLEASE DATE AND SIGN ABOVE exactly as
name appears, indicating, if
appropriate, official position or
representative capacity. If stock is
held in joint tenancy, each joint
owner should sign.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL. THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS, MEDTRONIC, INC.
MEDTRONIC, INC.
PROXY
ANNUAL MEETING -- AUGUST 28, 1996
The undersigned appoints WINSTON R. WALLIN and RONALD E. LUND, and each of them,
as Proxies, each with the power to appoint his substitute, to represent and
vote, as designated below, all shares of the undersigned at the 1996 Annual
Meeting of Shareholders of Medtronic, Inc. at the Medtronic, Inc. Corporate
Center at its Rice Creek facility, 7000 Central Avenue N.E., Minneapolis
(Fridley), Minnesota, at 10:30 a.m., Central Daylight Time, on Wednesday, August
28, 1996, and at any adjournment thereof.
The Board of Directors recommends votes FOR:
1. Set board size at twelve members and elect Class I Directors for three
year terms:
Nominees: GLEN D. NELSON, M.D., JACK W. SCHULER, GERALD W. SIMONSON AND
RICHARD A. SWALIN, PH.D.
[ ] FOR all nominees listed above (except those whose names have been written
on the line below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE BELOW.)
- - --------------------------------------------------------------------------------
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)
2. Approve appointment of Price Waterhouse LLP as independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the Meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL. THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS.
Benefit Plan Shares
ESOP Shares
Restricted Shares
Registered Shares
Date: __________________________, 1996
______________________________________
______________________________________
______________________________________
PLEASE DATE AND SIGN ABOVE exactly as name appears, indicating, if appropriate,
official position or representative capacity. If stock is held in joint tenancy,
each joint owner should sign.
