8-K

                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549



                                      FORM 8-K


                                   CURRENT REPORT
                       Pursuant to Section 13 or 15(d) of the
                          Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported):  September 16, 1998


                                  Medtronic, Inc.
               (Exact name of Registrant as Specified in its Charter)


                                     Minnesota
                   (State or Other Jurisdiction of Incorporation)



     1-7707                                                 41-0793183
(Commission File Number)                                  (IRS Employer
                                                       Identification No.)


                              7000 Central Avenue N.E.
                         Minneapolis, Minnesota  55432-3576
               (Address of Principal Executive Offices and Zip Code)


                                   (612) 574-4000
                (Registrant's telephone number, including area code)



                                   Not Applicable
           (Former Name or Former Address, if Changed Since Last Report)




Item 7.        Financial Statements and Exhibits

     (c)  The exhibits listed below relate to the Registration Statements on 
Form S-3 (Reg. Nos. 333-59625 and 333-62347) of the Registrant and are filed 
herewith for incorporation by reference in such Registration Statements.

     Exhibit 1.1    Underwriting Agreement
     Exhibit 1.2    Pricing Agreement (U.S. Version)


                                     SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                        MEDTRONIC, INC.



                                        By /s/ Gary L. Ellis
                                          --------------------------------------
Date:  September 16, 1998               Its Vice President, Corporate Controller
                                           -------------------------------------







                                   EXHIBIT INDEX

                                  Medtronic, Inc.
                              Form 8-K Current Report
                              Dated September 16, 1998





Exhibit Number      Description
                 
     1.1            Underwriting Agreement
     1.2            Pricing Agreement (U.S. Version)

EX-1.1

                                  Medtronic, Inc.

                      Common Stock, par value $0.10 per share

                                  ----------------

                               UNDERWRITING AGREEMENT

                                             , 1998
                               ------------

GOLDMAN, SACHS & CO.,
  85 BROAD STREET,
  NEW YORK, NEW YORK 10004.


Ladies and Gentlemen:

     From time to time Medtronic, Inc., a Minnesota corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain shares of its Common Stock, par value $0.10 per share (the "Shares")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Firm Shares").  If specified in such Pricing Agreement, the
Company may grant to the Underwriters the right to purchase at their election an
additional number of shares, specified in such Pricing Agreement as provided in
Section 3 hereof (the "Optional Shares"). The Firm Shares and the Optional
Shares, if any, which the Underwriters elect to purchase pursuant to Section 3
hereof are herein collectively called the "Designated Shares".

     The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto.

     1.   Particular sales of Designated Shares may be made from time to time to
the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives").  The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative.  This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares.  The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein.  Each Pricing
Agreement shall specify the aggregate number of the Firm Shares, the maximum
number of Optional Shares, if any, the initial public offering price of such
Firm and Optional Shares or the manner of determining such price, the purchase
price to the Underwriters of such Designated Shares,




the names  of the Underwriters of such Designated Shares, the names of the
Representatives of such Underwriters, the number of such Designated Shares to be
purchased by each Underwriter and the commission, if any, payable to the
Underwriters with respect thereto and shall set forth the date, time and manner
of delivery of such Firm and Optional Shares, if any, and payment therefor.  The
Pricing Agreement shall also specify (to the extent not set forth in the
registration statement and prospectus with respect thereto) the terms of such
Designated Shares.  A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted.  The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.

     2.   The Company represents and warrants to, and agrees with, each of the
Underwriters that:

        (a)    A registration statement on Form S-3 (File No. 333-59625) (the
     "Initial Registration Statement") in respect of the Shares has been filed
     with the Securities and Exchange Commission (the "Commission"); the Initial
     Registration Statement and any post-effective amendment thereto, each in
     the form heretofore delivered or to be delivered to the Representatives
     and, excluding exhibits to the Initial Registration Statement, but
     including all documents incorporated by reference in the prospectus
     included therein, to the Representatives for each of the other Underwriters
     have been declared effective by the Commission in such form; other than a
     registration statement, if any, increasing the size of the offering (a
     "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
     the Securities Act of 1933 (the "Act"), which became effective upon filing,
     no other document with respect to the Initial Registration Statement or
     document incorporated by reference therein has heretofore been filed, or
     transmitted for filing, with the Commission (other than prospectuses filed
     pursuant to Rule 424(b) of the rules and regulations of the Commission
     under the Act, each in the form heretofore delivered to the
     Representatives); and no stop order suspending the effectiveness of the
     Initial Registration Statement, any post-effective amendment thereto or the
     Rule 462(b) Registration Statement, if any, has been issued and no
     proceeding for that purpose has been initiated or threatened by the
     Commission (any preliminary prospectus included in the Initial Registration
     Statement or filed with the Commission pursuant to Rule 424(a) under the
     Act, is hereinafter called a "Preliminary Prospectus"; the various parts of
     the Initial Registration Statement and the Rule 462(b) Registration
     Statement, if any, including all exhibits thereto and the documents
     incorporated by reference in the prospectus contained in the Initial
     Registration Statement at the time such part of the Initial Registration
     Statement became effective, each as amended at the time such part of the
     Initial Registration Statement became effective, are hereinafter
     collectively called the "Registration Statement"; the prospectus relating
     to the Shares, in the form in which it has most recently been filed, or
     transmitted for filing, with the Commission on or prior to the date of this
     Agreement, is hereinafter called the "Prospectus"; any reference herein to
     any Preliminary Prospectus or the Prospectus shall be deemed to refer to
     and include the documents incorporated by reference therein pursuant to the
     applicable form under the Act, as of the date of such Preliminary
     Prospectus or Prospectus, as the case may be; any reference to any
     amendment or supplement to any Preliminary Prospectus or the Prospectus
     shall be deemed to refer to and include any documents filed after the date
     of such Preliminary Prospectus or Prospectus, as the case may be, under the
     Securities Exchange Act of 1934 (the "Exchange Act"),

                                          2


     and incorporated by reference in such Preliminary Prospectus or Prospectus,
     as the case may be; any reference to any amendment to the Initial
     Registration Statement shall be deemed to refer to and include any annual
     report of the Company filed pursuant to Section 13(a) or 15(d) of the
     Exchange Act after the effective date of the Registration Statement that is
     incorporated by reference in the Registration Statement; and any reference
     to the Prospectus as amended or supplemented shall be deemed to refer to
     the Prospectus as amended or supplemented in relation to the applicable
     Designated Shares in the form in which it is filed with the Commission
     pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
     hereof, including any documents incorporated by reference therein as of the
     date of such filing);

        (b)    The documents incorporated by reference in the Prospectus, when
     they became effective or were filed with the Commission, as the case may
     be, conformed in all material respects to the requirements of the Act or
     the Exchange Act, as applicable, and the rules and regulations of the
     Commission thereunder, and none of such documents contained an untrue
     statement of a material fact or omitted to state a material fact required
     to be stated therein or necessary to make the statements therein not
     misleading; and any further documents so filed and incorporated by
     reference in the Prospectus or any further amendment or supplement thereto,
     when such documents become effective or are filed with the Commission, as
     the case may be, will conform in all material respects to the requirements
     of the Act or the Exchange Act, as applicable, and the rules and
     regulations of the Commission thereunder and will not contain an untrue
     statement of a material fact or omit to state a material fact required to
     be stated therein or necessary to make the statements therein not
     misleading; PROVIDED, HOWEVER, that this representation and warranty shall
     not apply to any statements or omissions made in reliance upon and in
     conformity with information furnished in writing to the Company by an
     Underwriter of Designated Shares through the Representatives expressly for
     use in the Prospectus as amended or supplemented relating to such Shares;

        (c)    The Registration Statement and the Prospectus conform, and any
     further amendments or supplements to the Registration Statement or the
     Prospectus will conform, in all material respects to the requirements of
     the Act and the rules and regulations of the Commission thereunder and do
     not and will not, as of the applicable effective date as to the
     Registration Statement and any amendment thereto and as of the applicable
     filing date as to the Prospectus and any amendment or supplement thereto,
     contain an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading; PROVIDED, HOWEVER, that this representation and
     warranty shall not apply to any statements or omissions made in reliance
     upon and in conformity with information furnished in writing to the Company
     by an Underwriter of Designated Shares through the Representatives
     expressly for use in the Prospectus as amended or supplemented relating to
     such Shares;

        (d)    Neither the Company nor any of its subsidiaries has sustained
     since the date of the latest audited financial statements included or
     incorporated by reference in the Prospectus any material loss or
     interference with its business from fire, explosion, flood or other
     calamity, whether or not covered by insurance, or from any labor dispute or
     court or governmental action, order or decree, otherwise than as set forth
     or contemplated in the Prospectus; and, since the respective dates as of
     which information is given in the Registration Statement and the

                                          3


     Prospectus, there has not been any change in the capital stock or long-term
     debt of the Company or any of its subsidiaries or any material adverse
     change, or any development involving a prospective material adverse change,
     in or affecting the general affairs, management, financial position,
     shareholders' equity or results of operations of the Company and its
     subsidiaries, otherwise than as set forth or contemplated in the
     Prospectus;

        (e)    The Company and its subsidiaries have good and marketable title
     in fee simple to all real property and good and marketable title to all
     personal property owned by them, in each case free and clear of all liens,
     encumbrances and defects except such as are described in the Prospectus or
     such as do not materially affect the value of such property and do not
     materially interfere with the use made of such property by the Company and
     its subsidiaries; and any real property and buildings held under lease by
     the Company and its subsidiaries are held by them under valid, subsisting
     and enforceable leases with such exceptions as are not material and do not
     materially interfere with the use made and proposed to be made of such
     property and buildings by the Company and its subsidiaries;

        (f)    The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the State of Minnesota,
     with power and authority (corporate and other) to own its properties and
     conduct its business as described in the Prospectus, and has been duly
     qualified as a foreign corporation for the transaction of business and is
     in good standing under the laws of each other jurisdiction in which it owns
     or leases properties or conducts any business so as to require such
     qualification, or is subject to no material liability or disability by
     reason of the failure to be so qualified in any such jurisdiction; and each
     subsidiary of the Company has been duly incorporated and is validly
     existing as a corporation in good standing under the laws of its
     jurisdiction of incorporation except where the failure to be in good
     standing would not materially adversely affect the operations of the
     Company;

        (g)    The Company has an authorized capitalization as set forth in the
     Prospectus, and all of the issued shares of capital stock of the Company
     have been duly and validly authorized and issued and are fully paid and
     non-assessable; and all of the issued shares of capital stock of each
     subsidiary of the Company owned directly or indirectly by the Company have
     been duly and validly authorized and issued, are fully paid and
     non-assessable and such shares (except for directors' qualifying shares)
     are owned directly or indirectly by the Company, free and clear of all
     liens, encumbrances, equities or claims;

        (h)    The Shares have been duly and validly authorized, and, when the
     Firm Shares are issued and delivered pursuant to this Agreement and the
     Pricing Agreement with respect to such Designated Shares and, in the case
     of any Optional Shares, pursuant to Over-allotment Options (as defined in
     Section 3 hereof) with respect to such Shares, such Designated Shares will
     be duly and validly issued and fully paid and non-assessable; the Shares
     conform to the description thereof contained in the Registration Statement
     and the Designated Shares will conform to the description thereof contained
     in the Prospectus as amended or supplemented with respect to such
     Designated Shares;

        (i)    The issue and sale of the Shares and the compliance by the
     Company with all of the provisions of this Agreement, any Pricing Agreement
     and each Over-allotment Option, if any, and the consummation of the
     transactions contemplated herein and therein will not conflict with or
     result in a breach or violation of any of the terms or provisions of, or
     constitute a default under, any

                                          4


     indenture, mortgage, deed of trust, loan agreement or other agreement or
     instrument to which the Company or any of its subsidiaries is a party or by
     which the Company or any of its subsidiaries is bound or to which any of
     the property or assets of the Company or any of its subsidiaries is subject
     except as would not have a material adverse effect on the Company, nor will
     such action result in any violation of the provisions of the Articles of
     Incorporation or By-laws of the Company or any material statute or any
     order, rule or regulation of any court or governmental agency or body
     having jurisdiction over the Company or any of its subsidiaries or any of
     its or their properties; and no consent, approval, authorization, order,
     registration or qualification of or with any such court or governmental
     agency or body is required for the issue and sale of the Shares or the
     consummation by the Company of the transactions contemplated by this
     Agreement or any Pricing Agreement or any Over-allotment Option, except
     such as have been, or will have been prior to each Time of Delivery (as
     defined in Section 4 hereof), obtained under the Act and such consents,
     approvals, authorizations, registrations or qualifications as may be
     required under state securities or Blue Sky laws in connection with the
     purchase and distribution of the Shares by the Underwriters;

        (j)    If, with respect to any offering of Designated Shares, the
     Representatives request delivery of such Designated Shares to be made to
     the Depository Trust Company ("DTC") or its agent and registered in the
     name of Cede & Co. or another nominee designated by DTC, upon payment for
     such Designated Shares by the Underwriters and the delivery to DTC or its
     agent of such Designated Shares registered in the name of Cede & Co. or
     such other nominee designated by DTC, both as provided for herein, and the
     crediting of such Designated Shares to the Underwriters' accounts with DTC,
     Cede & Co. or such other nominee designated by DTC will be a "protected
     purchaser" of such Designated Shares (as defined in Section 8-303 of the
     Uniform Commercial Code as adopted in the State of New York (the "Code")),
     the Underwriters will acquire a valid "security entitlement" (within the
     meaning of Section 8-501 of the Code) to such designated Shares, and no
     action based on an "adverse claim" (as defined in Section 8-102 of the
     Code) may be asserted against the Underwriters with respect to such
     security entitlement (assuming that the Underwriters are without notice of
     any such adverse claim);

        (k)    Other than as set forth in the Prospectus, there are no legal or
     governmental proceedings pending to which the Company or any of its
     subsidiaries is a party or of which any property of the Company or any of
     its subsidiaries is the subject, which would reasonably be expected
     individually or in the aggregate to have a material adverse effect on the
     current or future consolidated financial position, shareholders' equity or
     results of operations of the Company and its subsidiaries; and, to the best
     of the Company's knowledge, no such proceedings are threatened or
     contemplated by governmental authorities or threatened by others;

        (l)    Neither the Company nor any of its subsidiaries is in violation
     of its Articles of Incorporation or By-laws or in default in the
     performance or observance of any obligation, agreement, covenant or
     condition contained in any indenture, mortgage, deed of trust, loan
     agreement, lease or other agreement or instrument to which it is a party or
     by which it or any of its properties may be bound except where such default
     would not have a material adverse effect on the Company;

        (m)    The statements incorporated by reference into the Prospectus from
     the

                                          5


     Company's Registration Statement on Form 8-A under the caption "Common
     Stock", insofar as they purport to constitute a summary of the terms of the
     stock, and the statements set forth in the Prospectus under the caption
     "Certain United States Federal Tax Consequences To Non-U.S. Holders", and
     under the caption "Underwriting", insofar as they purport to summarize
     provisions of the laws and documents referred to therein, are accurate and
     fair;

        (n)    The Company is not and, after giving effect to the offering and
     sale of the Shares, will not be an "investment company", as such term is
     defined in the Investment Company Act of 1940 (the "Investment Company
     Act");

        (o)    Neither the Company nor any of its affiliates does business with
     the government of Cuba or with any person or affiliate located in Cuba
     within the meaning of Section 517.075, Florida Statutes;

        (p)    PricewaterhouseCoopers LLP, who have certified certain financial
     statements of the Company and its subsidiaries, are independent public
     accountants as required by the Act and the rules and regulations of the
     Commission thereunder;

        (q)    Except as disclosed in the Prospectus, as amended, and except 
     as would not reasonably be expected to be materially adverse to the 
     Company, the Company and its subsidiaries own, or have valid, binding 
     and enforceable licenses or other rights to use, free and clear of all 
     liens, charges, claims, encumbrances, pledges, security interests, 
     defects and other like restrictions, all Intellectual Property (as 
     defined below) necessary to conduct the business of the Company and its 
     subsidiaries in the manner presently conducted, without any conflict 
     with the rights of others; "Intellectual Property" means all patents, 
     patent applications, trademarks, trademark applications, trade names, 
     service marks, service names, copyrights, trade secrets, know how 
     (including all unpatented or unpatentable proprietary or confidential 
     information, systems or procedures), technology, inventions, designs, 
     processes, methods, technical data and information or other intangible 
     asset, other proprietary intellectual property right or any license or 
     other right to use any of the foregoing;

        (r)    Except as disclosed in the Prospectus, and except as would not
     reasonably be expected to be materially adverse to the Company, the Company
     and its subsidiaries have all licenses, certificates, permits, consents,
     orders, approvals and authorizations from domestic and foreign governmental
     authorities, including the United States Food and Drug Administration (the
     "FDA") and any agency of any U.S. state or foreign government exercising
     comparable authority (including any non-governmental entity whose approval
     or authorization is required under foreign law comparable to that
     administered by the FDA) in a jurisdiction where the Company's or any of
     its subsidiaries' products are, or are proposed to be, sold (collectively,
     "Permits"), which are necessary to own their properties and/or to conduct
     their business in the manner and to the extent now conducted, with no
     material restrictions or qualifications, and such Permits are in full force
     and effect and no proceeding has been instituted or is pending or, to the
     best knowledge of

                                          6


     the Company and its subsidiaries, is contemplated or threatened which in
     any manner affects or draws into question the validity or effectiveness
     thereof; the Company and its subsidiaries are not in violation of any
     statutes, orders, standards, rules or regulations relating to or affecting
     the properties or Permits of the Company or its subsidiaries or the
     operation of the Company's or any of its subsidiaries' business in the
     manner and to the extent now conducted and are not in violation of any
     Permit; and neither the Company nor any of its subsidiaries has received,
     or has knowledge of any facts that furnish any reasonable basis for, any
     Notice of Adverse Findings, Regulatory Letters, Section 305 notices, or
     other similar communications, alerts or seizures requested or threatened
     relating to the Company's or its subsidiaries' products;

        (s)    The Company self-insures against losses up to $25 million per
     occurrence and maintains such other insurance in such amounts beyond this
     self-insurance level that are reasonably adequate for its business, and all
     such other insurance is in full force and effect; and

        (t)    Neither the Company nor any of its affiliated purchasers has
     taken any action which has or would result in a violation of Regulation M
     under the Exchange Act with respect to the offering of the Designated
     Shares.

        (u)    The Company has no debt securities or preferred stock that have
     been rated by any "nationally recognized statistical rating organization",
     as that term is defined by the Commission for purposes of Rule 436(g)(2)
     under the Act.

     3.   Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.

     The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares.  Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.

     The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; PROVIDED THAT, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares).  The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters

                                          7


elect to purchase.

     4.   Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives or, upon the request of
the Representatives, to DTC or its agents for the account of such Underwriter,
against payment by such Underwriter or on its behalf of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified
by the Company to Goldman, Sachs & Co. at least forty-eight hours in advance as
specified in such Pricing Agreement, (i) with respect to the Firm Shares, all in
the manner and at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "First Time of Delivery" and (ii) with respect to the Optional Shares, if
any, in the manner and at the time and date specified by the Representatives in
the written notice given by the Representatives of the Underwriters' election to
purchase such Optional Shares, or at such other time and date as the
Representatives and the Company may agree upon in writing, such time and date,
if not the First Time of Delivery, herein called the "Second Time of Delivery".
Each such time and date for delivery is herein called a "Time of Delivery".

     5.   The Company agrees with each of the Underwriters of any Designated
Shares:

        (a)    To prepare the Prospectus as amended and supplemented in relation
     to the applicable Designated Shares in a form approved by the
     Representatives and to file such Prospectus pursuant to Rule 424(b) under
     the Act not later than the Commission's close of business on the second
     business day following the execution and delivery of the Pricing Agreement
     relating to the applicable Designated Shares or, if applicable, such
     earlier time as may be required by Rule 424(b); to make no further
     amendment or any supplement to the Registration Statement or Prospectus as
     amended or supplemented after the date of the Pricing Agreement relating to
     such Shares and prior to any Time of Delivery for such Shares which shall
     be disapproved by the Representatives for such Shares promptly after
     reasonable notice thereof; to advise the Representatives promptly of any
     such amendment or supplement after any Time of Delivery for such Shares and
     furnish the Representatives with copies thereof; to file promptly all
     reports and any definitive proxy or information statements required to be
     filed by the Company with the Commission pursuant to Sections 13(a), 13(c),
     14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus
     is required in connection with the offering or sale of such Shares, and
     during such same period to advise the Representatives, promptly after it
     receives notice thereof, of the time when any amendment to the Registration
     Statement has been filed or becomes effective or any supplement to the
     Prospectus or any amended Prospectus has been filed with the Commission, of
     the issuance by the Commission of any stop order or of any order preventing
     or suspending the use of any prospectus relating to the Shares, of the
     suspension of the qualification of such Shares for offering or sale in any
     jurisdiction, of the initiation or threatening of any proceeding for any
     such purpose, or of any request by the Commission for the amending or
     supplementing of the Registration Statement or Prospectus or for additional
     information; and, in the event of the issuance of any such stop order or of
     any such order preventing or suspending the use of any prospectus relating
     to the Shares or suspending any such qualification, promptly to use its
     best efforts to obtain the withdrawal of such order;

                                          8


        (b)    Promptly from time to time to take such action as the
     Representatives may reasonably request to qualify such Shares for offering
     and sale under the securities laws of such jurisdictions as the
     Representatives may request and to comply with such laws so as to permit
     the continuance of sales and dealings therein in such jurisdictions for as
     long as may be necessary to complete the distribution of such Shares,
     provided that in connection therewith the Company shall not be required to
     qualify as a foreign corporation or to file a general consent to service of
     process in any jurisdiction;

        (c)    Prior to 10:00 A.M., New York City time, on the New York Business
     Day next succeeding the date of any Pricing Agreement and from time to
     time, to furnish the Underwriters with copies of the Prospectus as amended
     or supplemented in New York City in such quantities as the Representatives
     may reasonably request, and, if the delivery of a prospectus is required at
     any time in connection with the offering or sale of the Shares and if at
     such time any event shall have occurred as a result of which the Prospectus
     as then amended or supplemented would include an untrue statement of a
     material fact or omit to state any material fact necessary in order to make
     the statements therein, in the light of the circumstances under which they
     were made when such Prospectus is delivered, not misleading, or, if for any
     other reason it shall be necessary during such same period to amend or
     supplement the Prospectus or to file under the Exchange Act any document
     incorporated by reference in the Prospectus in order to comply with the Act
     or the Exchange Act, to notify the Representatives and upon their request
     to file such document and to prepare and furnish without charge to each
     Underwriter and to any dealer in securities as many copies as the
     Representatives may from time to time reasonably request of an amended
     Prospectus or a supplement to the Prospectus which will correct such
     statement or omission or effect such compliance;

        (d)    To make generally available to its security holders as soon as
     practicable, but in any event not later than eighteen months after the
     effective date of the Registration Statement (as defined in Rule 158(c)
     under the Act), an earnings statement of the Company and its subsidiaries
     (which need not be audited) complying with Section 11(a) of the Act and the
     rules and regulations of the Commission thereunder (including, at the
     option of the Company, Rule 158);

        (e)    During the period beginning from the date of the Pricing
     Agreement for such Designated Shares and continuing to and including the
     later of (i) the termination of trading restrictions for such Designated
     Shares, as notified to the Company by the Representatives, (ii) the last
     Time of Delivery for such Designated Shares and (iii) the expiration of the
     period (if any) specified in the Pricing Agreement for such Designated
     Shares as the Blackout Period, not to offer, sell, contract to sell or
     otherwise dispose of, except as provided hereunder, any stock or other
     securities of the Company that are substantially similar to the Designated
     Shares, including but not limited to any securities that are convertible
     into or exchangeable for, or that represent the right to receive, stock or
     any such substantially similar securities (except pursuant to employee
     stock plans, pursuant to convertible or exchangeable securities outstanding
     as of the date of the Pricing Agreement for such Designated Shares, or in
     connection with mergers, consolidations, acquisitions or other business
     combinations in which the Company may be involved) without the prior
     written consent of the Representatives;

        (f)    To use the net proceeds received by it from the sales of such
     Designated Shares pursuant to the Pricing Agreement in the manner specified
     in

                                          9


     the Prospectus as amended or supplemented under the caption "Use of
     Proceeds";

        (g)    To use its best efforts to list such Designated Shares, subject
     to notice of issuance and prior to the Time of Delivery thereof of, on the
     New York Stock Exchange; and

        (h)    If the Company elects to rely upon Rule 462(b), the Company shall
     file a Rule 462(b) Registration Statement with the Commission in compliance
     with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
     Agreement, and the Company shall at the time of filing either pay the
     Commission the filing fee for the Rule 462(b) Registration Statement or
     give irrevocable instructions for the payment of such fee pursuant to Rule
     111(b) under the Act.

     6.   The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey(s); (iv) any filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
reviews by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; (v) the cost of preparing certificates for the Shares;
(vi) the cost and charges of any transfer agent or registrar or dividend
disbursing agent; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder and under any Over-allotment Options
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make.

     7.   The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company in or incorporated by reference
in the Pricing Agreement relating to such Designated Shares are, at and as of
each Time of Delivery for such Designated Shares, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:

               (a)  The Prospectus as amended or supplemented in relation to
     such Designated Shares shall have been filed with the Commission pursuant
     to Rule 424(b) within the applicable time period prescribed for such filing
     by the rules and regulations under the Act and in accordance with Section
     5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
     462(b) Registration Statement shall have become effective by 10:00 P.M.,
     Washington, D.C. time, on the date of this Agreement; no stop order
     suspending the effectiveness of the Registration Statement or any part
     thereof shall have been issued and no

                                          10


     proceeding for that purpose shall have been initiated or threatened by the
     Commission; and all requests for additional information on the part of the
     Commission shall have been complied with to the Representatives' reasonable
     satisfaction;

               (b)  Counsel for the Underwriters shall have furnished to the
     Representatives such written opinion or opinions (a draft of each such
     opinion is attached as Annex II(a) hereto), dated each Time of Delivery for
     such Designated Shares, with respect to the matters covered in paragraphs
     (i), (ii), (iii), (vi), and (ix) of subsection (c) below as well as such
     other related matters as the Representatives may reasonably request, and
     such counsel shall have received such papers and information as they may
     reasonably request to enable them to pass upon such matters;

               (c)  Fredrikson & Byron, P.A., counsel for the Company shall have
     furnished to the Representatives their written opinions (a draft of each
     such opinion is attached as Annex II(b) hereto), dated each Time of
     Delivery for such Designated Shares, respectively, in form and substance
     satisfactory to the Representatives, substantially to the effect that:

        (i)    The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the jurisdiction of its
     incorporation, with power and authority (corporate and other) to own its
     properties and conduct its business as described in the Prospectus as
     amended or supplemented;

        (ii)   The Company has an authorized capitalization as set forth in the
     Prospectus as amended or supplemented, and the Designated Shares being
     delivered at such Time of Delivery have been duly and validly authorized
     and issued and are fully paid and non-assessable; and the Designated Shares
     conform to the description thereof in the Prospectus as amended or
     supplemented;

        (iii)  This Agreement and the Pricing Agreement with respect to the
     Designated Shares have been duly authorized, executed and delivered by the
     Company;

        (iv)   The issue and sale of the Designated Shares being delivered at
     such Time of Delivery and the compliance by the Company with all of the
     provisions of this Agreement and the Pricing Agreement with respect to the
     Designated Shares and the consummation of the transactions herein and
     therein contemplated will not conflict with or result in a breach or
     violation of any of the terms or provisions of, or constitute a default
     under, any indenture, mortgage, deed of trust, loan agreement or other
     agreement or instrument known to such counsel to which the Company is a
     party or by which the Company is bound or to which any of the property or
     assets of the Company is subject except as would not have a material
     adverse effect on the Company, nor will such action result in any violation
     of the provisions of the Articles of Incorporation or By-laws of the
     Company or any statute or any order, rule or regulation known to such
     counsel of any court or governmental agency or body having jurisdiction
     over the Company or any of its properties;

        (v)    No consent, approval, authorization, order, registration or
     qualification of or with any such court or governmental agency or body is
     required for the issue and sale of the Designated Shares being delivered at
     such Time of Delivery or the consummation by the Company of the
     transactions contemplated by this Agreement or such Pricing Agreement,
     except such as have been obtained under the Act and such consents,
     approvals, authorizations, registrations or qualifications as may be
     required under state securities or Blue Sky laws or securities laws of
     applicable foreign jurisdictions in connection with the purchase and
     distribution of

                                          11


     the Designated Shares by the Underwriters (in giving the opinion in this
     clause, such counsel may qualify such opinion as to their knowledge for
     matters relating to the laws of foreign jurisdictions and all states other
     than Minnesota);

        (vi)   The statements incorporated by reference into the Prospectus from
     the Company's Registration Statement on Form 8-A under the caption "Common
     Stock", insofar as they purport to constitute a summary of the terms of the
     stock, and the statements set forth in the Prospectus under the caption
     "Certain United States Federal Tax Consequences To Non-U.S. Holders", and
     under the caption "Underwriting", insofar as they purport to summarize
     provisions of the laws and documents referred to therein, are accurate and
     fair;

        (vii)  The Company is not an "Investment Company", as such term is
     defined in the Investment Company Act;

        (viii) The documents incorporated by reference in the Prospectus as
     amended or supplemented (other than the financial statements and related
     schedules therein, as to which such counsel need express no opinion), when
     they became effective or were filed with the Commission, as the case may
     be, complied as to form in all material respects with the requirements of
     the Act or the Exchange Act, as applicable, and the rules and regulations
     of the Commission thereunder; and they have no reason to believe that any
     of such documents, when they became effective or were so filed, as the case
     may be, contained, in the case of a registration statement which became
     effective under the Act, an untrue statement of a material fact or omitted
     to state a material fact required to be stated therein or necessary to make
     the statements therein not misleading, or, in the case of other documents
     which were filed under the Act or the Exchange Act with the Commission, an
     untrue statement of a material fact or omitted to state a material fact
     necessary in order to make the statements therein, in the light of the
     circumstances under which they were made when such documents were so filed,
     not misleading; and

        (ix)   The Registration Statement and the Prospectus as amended or
     supplemented, and any further amendments and supplements thereto made by
     the Company prior to such Time of Delivery (other than the financial
     statements and related schedules therein, as to which such counsel need
     express no opinion), comply as to form in all material respects with the
     requirements of the Act and the rules and regulations thereunder; although
     they do not assume any responsibility for the accuracy, completeness or
     fairness of the statements contained in the Registration Statement or the
     Prospectus, except for those referred to in the opinion in subsection (vi)
     of this Section 7(c), they have no reason to believe that, as of its
     effective date, the Registration Statement or any further amendment thereto
     made by the Company prior to such Time of Delivery (other than the
     financial statements and related schedules therein, as to which such
     counsel need express no opinion) contained an untrue statement of a
     material fact or omitted to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading or that,
     as of its date, the Prospectus as amended or supplemented or any further 
     amendment or supplement thereto made by the Company prior to such Time of 
     Delivery (other than the financial statements and related schedules 
     therein, as to which such counsel need express no opinion) contained an
     untrue statement of a material fact or omitted to state a material fact
     necessary to make the statements therein, in the light of the circumstances
     under which they were made, not misleading or that, as of such Time of
     Delivery, either the Registration Statement or the Prospectus as amended or
     supplemented or any

                                          12


     further amendment or supplement thereto made by the Company prior to such 
     Time of Delivery (other than the financial statements and related schedules
     therein, as to which such counsel need express no opinion) contains an 
     untrue statement of a material fact or omits to state a material fact 
     necessary to make the statements therein, in the light of the circumstances
     under which they were made, not misleading; and they do not know of any 
     amendment to the Registration Statement required to be filed or any 
     contracts or other documents of a character required to be filed as an 
     exhibit to the Registration Statement or required to be incorporated by 
     reference into the Prospectus as amended or supplemented or required to be
     described in the Registration Statement or the Prospectus as amended or 
     supplemented which are not filed or incorporated by reference or described
     as required;

               (d)  Senior Legal Counsel of the Company, shall have furnished
     you his or her written opinion, dated such Time of Delivery, in form and
     substance satisfactory to you, to the effect that:

        (i)    The Company has an authorized capitalization as set forth in the
     Prospectus as amended or supplemented, and all of the issued shares of
     capital stock of the Company (including the Designated Shares being
     delivered at such Time of Delivery) have been duly and validly authorized
     and issued and are fully paid and non-assessable; and the Designated Shares
     conform to the description thereof in the Prospectus as amended or
     supplemented;

        (ii)   The Company has been duly qualified as a foreign corporation for
     the transaction of business and is in good standing under the laws of each
     other jurisdiction in which it owns or leases properties or conducts any
     business so as to require such qualification or is subject to no material
     liability or disability by reason of failure to be so qualified in any such
     jurisdiction (such counsel shall be entitled to rely in respect of the
     opinion in this clause upon opinions of local counsel and in respect of
     matters of fact upon certificates of officers of the Company, provided that
     he or she shall state that he or she believes that both the Representative
     and he or she are justified in relying upon such opinions and
     certificates);

        (iii)  Each subsidiary of the Company has been duly incorporated and is
     validly existing as a corporation in good standing under the laws of its
     jurisdiction of incorporation except where the failure to be in good
     standing would not materially adversely affect the operations of the
     Company; and all of the issued shares of capital stock of each such
     subsidiary owned directly or indirectly by the Company have been duly and
     validly authorized and issued, are fully paid and non-assessable, and such
     shares (except for directors' qualifying shares) are owned directly or
     indirectly by the Company, free and clear of all liens, encumbrances,
     equities or claims (such counsel shall be entitled to rely in respect of
     the opinion in this clause upon opinions of local counsel and in respect to
     matters of fact upon certificates of officers of the Company or its
     subsidiaries, provided that he or she shall state that he or she believes
     that both the Representative and he or she are justified in relying upon
     such opinions and certificates);

        (iv)   The Company and its subsidiaries have good and marketable title
     in fee simple to all real property owned by them, in each case free and
     clear of all liens, encumbrances and defects except such as are described
     in the Prospectus or such as do not materially affect the value of such
     property and do not interfere with the use made and proposed to be made of
     such property by the Company and its subsidiaries; and any real property
     and buildings held under lease by the Company

                                          13


     and its subsidiaries are held by them under valid, subsisting and
     enforceable leases with such exceptions as are not material and do not
     interfere with the use made and proposed to be made of such property and
     buildings by the Company and its subsidiaries (in giving the opinion in
     this clause, such counsel may state that no examination of record titles
     for the purpose of such opinion has been made, and that he or she is
     relying upon a general review of the titles of the Company and its
     subsidiaries, upon opinions of local counsel and abstracts, reports and
     policies of title companies rendered or issued at or subsequent to the time
     of acquisition of such property by the Company or its subsidiaries, upon
     opinions of counsel to the lessors of such property and, in respect to
     matters of fact, upon certificates of officers of the Company or its
     subsidiaries, provided that such counsel shall state that he or she
     believes that both the Representative and he or she are justified in
     relying upon such opinions, abstracts, reports, policies and certificates);

        (v)    To the best of such counsel's knowledge and other than as set
     forth in the Prospectus, there are no legal or governmental proceedings
     pending to which the Company or any of its subsidiaries is a party or of
     which any property of the Company or any of its subsidiaries is the subject
     which would reasonably be expected individually or in the aggregate to have
     a material adverse effect on the current or future consolidated financial
     position, shareholders' equity or results of operations of the Company and
     its subsidiaries; and to the best of such counsel's knowledge, no such
     proceedings are threatened or contemplated by governmental authorities or
     threatened by others;

        (vi)   Neither the Company nor any of its subsidiaries is in violation
     of its Articles of Incorporation or By-laws or in default in the
     performance or observance of any  obligation, agreement, covenant or
     condition contained in any indenture, mortgage, deed of trust, loan
     agreement, lease or other agreement or instrument to which it is a party or
     by which it or any of its properties may be bound and which is known to
     such counsel except where such default would not have a material adverse
     effect on the Company;

        (vii)  The statements contained in the Registration Statement and
     Prospectus, insofar as they purport to relate to or constitute a summary of
     provisions of statutes, regulations, legal or governmental proceedings,
     Intellectual Property of the Company and its subsidiaries or contracts or
     other agreements to which the Company or any of its subsidiaries is a party
     or is bound, are accurate in all material respects and fairly present the
     information set forth therein; and there are no statutes, regulations,
     legal or governmental proceedings, Intellectual Property of the Company and
     its subsidiaries or contracts or other agreements  required to be described
     in the Registration Statement or Prospectus that are not described as
     required; and

        (viii) Except as disclosed in the Prospectus, as amended, and except as
     would not reasonably be expected to be materially adverse to the Company,
     the Company and its subsidiaries own, or have valid, binding and
     enforceable licenses or other rights to use, free and clear of all liens,
     charges, claims, encumbrances, pledges, security interests, defects and
     other like restrictions, all Intellectual Property necessary to conduct the
     business of the Company and its subsidiaries in the manner presently
     conducted, without any conflict with the rights of others;

                                          14


          (e)  On the date of the Pricing Agreement for such Designated Shares
     and at each Time of Delivery for such Designated Shares, the independent
     accountants of the Company who have certified the financial statements of
     the Company and its subsidiaries included or incorporated by reference in
     the Registration Statement shall have furnished to the Representatives a
     letter, dated the effective date of the Registration Statement or the date
     of the most recent report filed with the Commission containing financial
     statements and incorporated by reference in the Registration Statement, if
     the date of such report is later than such effective date, and a letter
     dated such Time of Delivery, respectively, to the effect set forth in Annex
     II hereto (a draft of the form of letter to be delivered on the date of the
     Pricing Agreement for such Designated Shares is attached as Annex I(a)
     hereto and a draft of the form of letter to be delivered at the Time of
     Delivery for such Designated Shares is attached as Annex I(b) hereto), and
     with respect to such letter dated such Time of Delivery, as to such other
     matters as the Representatives may reasonably request and in form and
     substance satisfactory to the Representatives;

        (f)    (i)  Neither the Company nor any of its subsidiaries shall have
     sustained since the date of the latest audited financial statements
     included or incorporated by reference in the Prospectus as amended prior to
     the date of the Pricing Agreement relating to the Designated Shares any
     loss or interference with its business from fire, explosion, flood or other
     calamity, whether or not covered by insurance, or from any labor dispute or
     court or governmental action, order or decree, otherwise than as set forth
     or contemplated in the Prospectus as amended prior to the date of the
     Pricing Agreement relating to the Designated Shares, and (ii) since the
     respective dates as of which information is given in the Prospectus as
     amended prior to the date of the Pricing Agreement relating to the
     Designated Shares there shall not have been any change in the capital stock
     or long-term debt of the Company or any of its subsidiaries or any change,
     or any development involving a prospective change, in or affecting the
     general affairs, management, financial position, shareholders' equity or
     results of operations of the Company and its subsidiaries, otherwise than
     as set forth or contemplated in the Prospectus as amended prior to the date
     of the Pricing Agreement relating to the Designated Shares, the effect of
     which, in any such case described in Clause (i) or (ii), is in the judgment
     of the Representatives so material and adverse as to make it impracticable
     or inadvisable to proceed with the public offering or the delivery of the
     Designated Shares on the terms and in the manner contemplated in the
     Prospectus as amended relating to the Designated Shares;

        (g)    On or after the date of the Pricing Agreement relating to the
     Designated Shares there shall not have occurred any of the following: (i) a
     suspension or material limitation in trading in securities generally on the
     New York Stock Exchange; (ii) a suspension or material limitation in
     trading in the Company's securities on the New York Stock Exchange; (iii) a
     general moratorium on commercial banking activities declared by either
     Federal or New York State authorities; or (iv) the outbreak or escalation
     of hostilities involving the United States or the declaration by the United
     States of a national emergency or war, if the effect of any such event
     specified in this Clause (iv) in the judgment of the Representatives makes
     it impracticable or inadvisable to proceed with the public offering or the
     delivery of the Firm Shares or Optional Shares or both on the terms

                                          15


     and in the manner contemplated in the Prospectus as first amended or
     supplemented relating to the Designated Shares;

        (h)    The Shares at each Time of Delivery shall have been duly listed,
     subject to notice of issuance, on the New York Stock Exchange;

        (i)     The Company shall have complied with the provisions of Section
     5(c) hereof with respect to the furnishing of prospectuses on the New York
     Business Day next succeeding the date of the Pricing Agreement relating to
     such Designated Shares; and

        (j)    The Company shall have furnished or caused to be furnished to the
     Representatives at each Time of Delivery for the Designated Shares
     certificates of officers of the Company satisfactory to the Representatives
     as to the accuracy of the representations and warranties of the Company
     herein at and as of such Time of Delivery, as to the performance by the
     Company of all of its obligations hereunder to be performed at or prior to
     such Time of Delivery, as to the matters set forth in subsections (a) and
     (f) of this Section and as to such other matters as the Representatives may
     reasonably request.

     8.  (a)   The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; PROVIDED, HOWEVER, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares; and provided,
further, that the Company shall not be liable to any Underwriter under the
indemnity agreement in this subsection (a) with respect to any Preliminary
Prospectus or Prospectus as amended or supplemented prior to the Time of
Delivery to the extent that any such loss, claim, damage or liability of such
Underwriter results from the fact that such Underwriter sold Shares to a person
as to whom it shall be established that there was not sent or given, at or prior
to the written confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) or of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference) in any case where
such delivery is required by the Act if the Company had previously furnished
copies thereof in sufficient quantity to such Underwriter and the loss, claim,
damage or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in the Preliminary Prospectus or
Prospectus as amended or supplemented prior to the Time of Delivery which was
identified in writing at such time to such Underwriter and corrected in the
Prospectus (excluding documents incorporated by


                                          16


reference) or in the Prospectus as then amended or supplemented (excluding
documents incorporated by reference).

     (b)  Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.

     (c)  Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection.  In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.  No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.

     (d)  If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Shares

                                          17


on the other from the offering of the Designated Shares to which such loss,
claim, damage or liability (or action in respect thereof) relates.  If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Shares on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.  The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters
in such offering.  The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.  The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by PRO RATA allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d).  The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.  Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.  No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  The obligations of the
Underwriters of Designated Shares in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Shares and not joint.

     (e)  The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.

     9.   (a)  If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein.  If within thirty-six hours after
such default by any Underwriter the Representatives do not arrange for the
purchase of such Firm Shares or Optional Shares, as the case may be, then the
Company shall be entitled to a further period of thirty-six hours within which
to

                                          18


procure another party or other parties satisfactory to the Representatives to
purchase such Shares on such terms.  In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for such Shares for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary.  The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.

     (b)  If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.

     (c)  If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.

     10.  The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.

                                          19


     11.  If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Firm Shares or Optional Shares with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Shares, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.

     12.  In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.

   All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request.  Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.

     13.  This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement.  No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.

     14.  Time shall be of the essence of each Pricing Agreement.  As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.

     15.  THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     16.  This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.

                                          20


     If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof.

                                             Very truly yours,

                                             Medtronic, Inc.


                                             By:
                                                ------------------------------
                                                Name:
                                                Title:

Accepted as of the date hereof:

Goldman, Sachs & Co.


By:
   ---------------------------------
        (Goldman, Sachs & Co.)





                                                                         ANNEX I

                                 PRICING AGREEMENT

Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.

                                                             _____________, ____

Ladies and Gentlemen:

     Medtronic, Inc., a Minnesota corporation (the "Company"), proposes, subject
to the terms and conditions stated herein and in the Underwriting Agreement,
dated .......... , 1998  (the "Underwriting Agreement"), between the Company on
the one hand and Goldman, Sachs & Co. on the other hand, to issue and sell to
the Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares" consisting of Firm
Shares and any Optional Shares the Underwriters may elect to purchase.  Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement.  Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you.  Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined.  The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule II hereto.

     An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.

     Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Optional Shares as to which
such election shall have been exercised.

     The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the





sole purpose of covering over-allotments in the sale of the Firm Shares.  Any
such election to purchase Optional Shares may be exercised by written notice
from the Representatives to the Company given within a period of 30 calendar
days after the date of this Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives, but in no
event earlier than the First Time of Delivery or, unless the Representatives and
the Company otherwise agree in writing, no earlier than two or later than ten
business days after the date of such notice.


                                          2




     If the foregoing is in accordance with your understanding, please sign and
return to us  ______ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company.  It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.

                                   Very truly yours,

                                   Medtronic, Inc.



                                   By:
                                      -------------------------------------
                                      Name:
                                      Title:

Accepted as of the date hereof:

Goldman, Sachs & Co.
[Insert name of Co-Representatives, if any]



By:
   ---------------------------------
        (Goldman, Sachs & Co.)

[On behalf of each of the Underwriters]


                                          3




                                        SCHEDULE I
                                                                 MAXIMUM NUMBER
                                                                   OF OPTIONAL
                                                   NUMBER OF       SHARES WHICH
                                                  FIRM SHARES         MAY BE
                         UNDERWRITER            TO BE PURCHASED      PURCHASED
                                                           
Goldman, Sachs & Co.

[Insert name of Co-Representatives, if any]

[Insert names of other Underwriters, if any]

               Total. . . . . . . . . . . . .




                                         4




                                    SCHEDULE II

          TITLE OF DESIGNATED SHARES:

          NUMBER OF DESIGNATED SHARES:

               Number of Firm Shares:

               Maximum Number of Optional Shares:

          INITIAL OFFERING PRICE TO PUBLIC:

               [$........ per Share] [Formula]

          PURCHASE PRICE BY UNDERWRITERS:

               [$........ per Share] [Formula]

          COMMISSION PAYABLE TO UNDERWRITERS:

          $........ per Share in Federal (same-day) funds

          FORM OF DESIGNATED SHARES:

          Definitive form, to be made available for checking at least
          twenty-four hours prior to the Time of Delivery at the office of The
          Depository Trust Company or its designated custodian

          SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

          Federal (same-day) funds

          BLACKOUT PERIOD:

          [NONE] [The period beginning on and including the date of the Pricing
          Agreement and ending on and including the __th day after such date.]

          TIME OF DELIVERY:

          ...... a.m. (New York City time), .........., 19..

          CLOSING LOCATION:

          NAMES AND ADDRESSES OF REPRESENTATIVES:

               Designated Representatives:

               Address for Notices, etc.:

          [OTHER TERMS](*):


          ----------------
(*)  A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Shares should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Shares to be purchased and
sold.  Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.


                                          5



                                                                        ANNEX II

     Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:

       (i)     They are independent certified public accountants with respect to
     the Company and its subsidiaries within the meaning of the Act and the
     applicable published rules and regulations thereunder;

       (ii)    In their opinion, the financial statements and any supplementary
     financial information and schedules (and, if applicable, financial
     forecasts and/or pro forma financial information) examined by them and
     included or incorporated by reference in the Registration Statement or the
     Prospectus comply as to form in all material respects with the applicable
     accounting requirements of the Act or the Exchange Act, as applicable, and
     the related published rules and regulations thereunder; and, if applicable,
     they have made a review in accordance with standards established by the
     American Institute of Certified Public Accountants of the consolidated
     interim financial statements, selected financial data, pro forma financial
     information, financial forecasts and/or condensed financial statements
     derived from audited financial statements of the Company for the periods
     specified in such letter, as indicated in their reports thereon, copies of
     which have been [separately] furnished to the representatives of the
     Underwriters (the "Representatives") [and are attached hereto];

       (iii)   They have made a review in accordance with standards established
     by the American Institute of Certified Public Accountants of the unaudited
     condensed consolidated statements of income, consolidated balance sheets
     and consolidated statements of cash flows included in the Prospectus and/or
     included in the Company's quarterly reports on Form 10-Q incorporated by
     reference into the Prospectus as indicated in their reports thereon copies
     of which [have been separately furnished to the Representatives] [are
     attached hereto]; and on the basis of specified procedures including
     inquiries of officials of the Company who have responsibility for financial
     and accounting matters regarding whether the unaudited condensed
     consolidated financial statements referred to in paragraph (vi)(A)(i) below
     comply as to form in all material respects with the applicable accounting
     requirements of the Act and the Exchange Act and the related published
     rules and regulations, nothing came to their attention that caused them to
     believe that the unaudited condensed consolidated financial statements do
     not comply as to form in all material respects with the applicable
     accounting requirements of the Act and the Exchange Act and the related
     published rules and regulations;

       (iv)    The unaudited selected financial information with respect to the
     consolidated results of operations and financial position of the Company
     for the five most recent fiscal years included in the Prospectus and
     included or incorporated by reference in Item 6 of the Company's Annual
     Report on Form 10-K for the most recent fiscal year agrees with the
     corresponding amounts (after restatement where applicable) in the audited
     consolidated financial statements for such five fiscal years which were
     included or incorporated by reference in the Company's Annual Reports on
     Form 10-K for such fiscal years;

       (v)     They have compared the information in the Prospectus under
     selected captions (if any) with the disclosure requirements of Regulation
     S-K and on the basis of limited procedures specified in such letter nothing
     came to their attention as a result of the foregoing procedures that caused
     them to believe that this




     information does not conform in all material respects with the disclosure
     requirements of items 301, 302, 402 and 503(d), respectively, of Regulation
     S-K;

       (vi)    On the basis of limited procedures, not constituting an
     examination in accordance with generally accepted auditing standards,
     consisting of a reading of the unaudited financial statements and other
     information referred to below, a reading of the latest available interim
     financial statements of the Company and its subsidiaries, inspection of the
     minute books of the Company and its subsidiaries since the date of the
     latest audited financial statements included or incorporated by reference
     in the Prospectus, inquiries of officials of the Company and its
     subsidiaries responsible for financial and accounting matters and such
     other inquiries and procedures as may be specified in such letter, nothing
     came to their attention that caused them to believe that:

            (A)     (i) the unaudited condensed consolidated statements of
          income, consolidated balance sheets and consolidated statements of
          cash flows included in the Prospectus and/or included or incorporated
          by reference in the Company's Quarterly Reports on Form 10-Q
          incorporated by reference in the Prospectus do not comply as to form
          in all material respects with the applicable accounting requirements
          of the Exchange Act and the related published rules and regulations,
          or (ii) any material modifications should be made to the unaudited
          condensed consolidated statements of income, consolidated balance
          sheets and consolidated statements of cash flows included in the
          Prospectus or included in the Company's Quarterly Reports on Form 10-Q
          incorporated by reference in the Prospectus, for them to be in
          conformity with generally accepted accounting principles;

            (B)     any other unaudited income statement data and balance sheet
          items included in the Prospectus do not agree with the corresponding
          items in the unaudited consolidated financial statements from which
          such data and items were derived, and any such unaudited data and
          items were not determined on a basis substantially consistent with the
          basis for the corresponding amounts in the audited consolidated
          financial statements included or incorporated by reference in the
          Company's Annual Report on Form 10-K for the most recent fiscal year;

            (C)     the unaudited financial statements which were not included
          in the Prospectus but from which were derived the unaudited condensed
          financial statements referred to in clause (A) and any unaudited
          income statement data and balance sheet items included in the
          Prospectus and referred to in Clause (B) were not determined on a
          basis substantially consistent with the basis for the audited
          financial statements included or incorporated by reference in the
          Company's Annual Report on Form 10-K for the most recent fiscal year;

            (D)     any unaudited pro forma consolidated condensed financial
          statements included or incorporated by reference in the Prospectus do
          not comply as to form in all material respects with the applicable
          accounting requirements of the Act and the published rules and
          regulations thereunder or the pro forma adjustments have not been
          properly applied to the historical amounts in the compilation of those
          statements;

            (E)     as of a specified date not more than five days prior to the
          date of such letter, there have been any changes in the consolidated
          capital stock (other than issuances of capital stock upon exercise of
          options and stock appreciation rights, upon earn-outs of performance
          shares and upon


                                          2



          conversions of convertible securities, in each case which were
          outstanding on the date of the latest balance sheet included or
          incorporated by reference in the Prospectus) or any increase in the
          consolidated long-term debt of the Company and its subsidiaries, or
          any decreases in consolidated net current assets or stockholders'
          equity or other items specified by the Representatives, or any
          increases in any items specified by the Representatives, in each case
          as compared with amounts shown in the latest balance sheet included or
          incorporated by reference in the Prospectus, except in each case for
          changes, increases or decreases which the Prospectus discloses have
          occurred or may occur or which are described in such letter; and

            (F)     for the period from the date of the latest financial
          statements included or incorporated by reference in the Prospectus to
          the specified date referred to in Clause (E) there were any decreases
          in consolidated net revenues or operating profit or the total or per
          share amounts of consolidated net income or other items specified by
          the Representatives, or any increases in any items specified by the
          Representatives, in each case as compared with the comparable period
          of the preceding year and with any other period of corresponding
          length specified by the Representatives, except in each case for
          increases or decreases which the Prospectus discloses have occurred or
          may occur or which are described in such letter; and

       (vii)   In addition to the examination referred to in their report(s)
     included or incorporated by reference in the Prospectus and the limited
     procedures, inspection of minute books, inquiries and other procedures
     referred to in paragraphs (iii) and (vi) above, they have carried out
     certain specified procedures, not constituting an examination in accordance
     with generally accepted auditing standards, with respect to certain
     amounts, percentages and financial information specified by the
     Representatives which are derived from the general accounting records of
     the Company and its subsidiaries, which appear in the Prospectus (excluding
     documents incorporated by reference), or in Part II of, or in exhibits and
     schedules to, the Registration Statement specified by the Representatives
     or in documents incorporated by reference in the Prospectus specified by
     the Representatives, and have compared certain of such amounts, percentages
     and financial information with the accounting records of the Company and
     its subsidiaries and have found them to be in agreement.

     All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.


                                         3

EX-1.2

                               U.S. PRICING AGREEMENT


Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated,
BT Alex. Brown Incorporated,
J.P. Morgan Securities Inc.,
PaineWebber Incorporated,
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated,
Piper Jaffray Inc.,
  As representatives of the several U.S. Underwriters
  named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.

                                                             _____________, 1998

Ladies and Gentlemen:

      Medtronic, Inc., a Minnesota corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated .......... , 1998  (the "Shelf Underwriting Agreement"),
between the Company on the one hand and Goldman, Sachs & Co. on the other hand,
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Shares specified in Schedule II hereto (the "Designated
Shares") consisting of Firm Shares and any Optional Shares the Underwriters may
elect to purchase.  Each of the provisions of the Shelf Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this U.S. Pricing Agreement to the same extent as if such provisions had
been set forth in full herein; and each of the representations and warranties
set forth therein shall be deemed to have been made at and as of the date of
this U.S. Pricing Agreement, except that each representation and warranty which
refers to the Prospectus in Section 2 of the Shelf Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Shelf
Underwriting Agreement in relation to the Prospectus (as therein defined), and
also a representation and warranty as of the date of this U.S. Pricing Agreement
in relation to the Prospectus as amended or supplemented relating to the
Designated Shares which are the subject of this U.S. Pricing Agreement.  Each
reference to the Representatives herein and in the provisions of the Shelf
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you.  Unless otherwise defined herein, terms defined in the Shelf Underwriting
Agreement are used herein as therein defined.  The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Shelf Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.





      It is understood and agreed to by all parties that the Company is
concurrently entering into an agreement (the "International Pricing Agreement")
providing for the sale by the Company of up to a total of 2,875,000 Shares (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Goldman Sachs International and Morgan
Stanley & Co. International Limited are acting as lead managers.  Anything
herein or therein to the contrary notwithstanding, the respective closings under
this U.S. Pricing Agreement and the International Pricing Agreement are hereby
expressly made conditional on one another.  The Underwriters hereunder and the
International Underwriters are simultaneously entering into an Agreement between
U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of Shares
between the two syndicates.  Two forms of prospectus are to be used in
connection with the offering and sale of the Shares contemplated by the
foregoing, one relating to the Designated Shares hereunder and the other
relating to the International Shares.

      The Company has entered into an Agreement and Plan of Merger dated as of
June 29, 1998 (the "Merger Agreement") by and among the Company, PC Merger
Corp., a Washington corporation and a  wholly-owned subsidiary of the Company
("Merger Sub"), and Physio-Control International Corporation, a Washington
corporation ("Physio"), which provides for the merger of Merger Sub with and
into Physio (the "Merger") with Physio surviving as a wholly-owned subsidiary of
the Company.  The Company has advised the Underwriters that the primary purpose
of the sale of the Designated Shares and the International Shares is to
facilitate the treatment of the Merger as a pooling of interests.

      In addition to the representations and warranties of the Company set forth
in Section 2 of the Shelf Underwriting Agreement, the Company hereby represents
and warrants to, and agrees with, each of the Underwriters that:

      (a)  The Merger Agreement has been duly authorized, executed and delivered
      by the Company, and constitutes a valid and binding agreement of the
      Company; and

      (b)  The Merger has been duly authorized by all necessary corporate action
      of the Company and, when all of the conditions to the Merger contained in
      the Merger Agreement have been fulfilled or waived (where permissible) and
      the articles of merger relating to the Merger have been filed and accepted
      for record by the State of Washington in accordance with the Merger
      Agreement, the Merger will be effective in accordance with the laws of the
      States of Minnesota and Washington.

      In addition to the agreements of the Company set forth in Section 5 of the
Shelf Underwriting Agreement, the Company agrees with the Underwriters that (i)
neither it nor any of its controlled affiliates will (A) knowingly, after
consultation with PricewaterhouseCoopers LLP, take any action which would
prevent the Merger from qualifying or (B) knowingly, after consultation with
PricewaterhouseCoopers LLP, omit to take any action necessary to qualify the
Merger as a pooling of interests transaction or that would otherwise prevent
PricewaterhouseCoopers LLP from issuing the letter described in Section
5.15(B)(ii) of the Merger Agreement and (ii) if the Merger is consummated and
qualifies as a pooling of interests, the Company will account for the Merger as
a pooling of interests.




      In addition to the conditions set forth in Section 7 of the Shelf
Underwriting Agreement, the obligations of the Underwriters hereunder shall be
subject, in the discretion of the Representatives, to the condition that in
addition to the opinions of Fredrikson & Byron, P.A. set forth in Section 7(c)
of the Shelf Underwriting Agreement, Fredrikson & Byron, P.A. shall have
furnished to the Representatives their written opinions, dated the Time of
Delivery in form and substance satisfactory to the Representatives, to the
effect that:

      (a)  The Merger Agreement has been duly authorized, executed and delivered
      by the Company, and constitutes a valid and binding agreement of the
      Company; and

      (b)  The Merger has been duly authorized by all necessary corporate action
      of the Company.

      An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.

      Subject to the terms and conditions set forth herein and in the Shelf
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto and, (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the Underwriters set forth in
Schedule II hereto that portion of the number of Optional Shares as to which
such election shall have been exercised.

      The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Shares.  Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this U.S. Pricing
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
the Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.




      If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Shelf Underwriting Agreement incorporated herein
by reference, shall constitute a binding agreement between each of the
Underwriters and the Company.  It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.

                                        Very truly yours,

                                        Medtronic, Inc.



                                        By:
                                           ---------------------------------
                                           Name:
                                           Title:

Accepted as of the date hereof:

Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
BT Alex. Brown Incorporated
J.P. Morgan Securities Inc.
PaineWebber Incorporated
Dain Rauscher Wessels,
 a division of Dain Rauscher Incorporated
Piper Jaffray Inc.



By:
    ---------------------------------------
          (Goldman, Sachs & Co.)

On behalf of each of the Underwriters







                                      SCHEDULE I

                                                                 MAXIMUM NUMBER
                                                                   OF OPTIONAL
                                                   NUMBER OF      SHARES WHICH
                                                  FIRM SHARES        MAY BE
                   UNDERWRITER                  TO BE PURCHASED    PURCHASED
                   -----------                  ---------------    ---------
                                                          
 Goldman, Sachs & Co.
 Morgan Stanley & Co. Incorporated
 BT Alex. Brown Incorporated
 J.P. Morgan Securities Inc.
 PaineWebber Incorporated
 Dain Rauscher Wessels,
   a division of Dain Rauscher Incorporated
 Piper Jaffray Inc.
 Bear Stearns & Co. Inc.
 SG Cowen Securities Corporation
 Credit Suisse First Boston Corporation
 ING Baring Furman Selz LLC
 Lehman Brothers Inc.
 Merrill Lynch, Pierce, Fenner & Smith
 Incorporated
 NationsBanc Montgomery Securities LLC
 Prudential Securities Incorporated
 Salomon Smith Barney Inc.
 Sanford C. Bernstein & Co., Inc.


          Total...................................10,000,000       1,500,000






                                    SCHEDULE II

TITLE OF DESIGNATED SHARES:   Common Stock, par value $0.10 per share

NUMBER OF DESIGNATED SHARES:  11,500,000

     Number of Firm Shares:   10,000,000

     Maximum Number of Optional Shares: 1,500,000

INITIAL OFFERING PRICE TO PUBLIC:

     $..... per Share

PURCHASE PRICE BY UNDERWRITERS:

     $..... per Share

COMMISSION PAYABLE TO UNDERWRITERS:

$.....per Share in Federal (same-day) funds

FORM OF DESIGNATED SHARES:

Definitive form, to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company or
its designated custodian

SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

Federal (same-day) funds

BLACKOUT PERIOD:

The period beginning on and including the date of this U.S. Pricing Agreement
and ending on and including the 90th day after such date.

TIME OF DELIVERY:

 ..... a.m. (New York City time), ..........., 1998

CLOSING LOCATION:   [To be discussed]

NAMES AND ADDRESSES OF REPRESENTATIVES:

     Designated Representatives:   [GS to provide]

     Address for Notices, etc.:    [GS to provide]