CORRECTING and REPLACING Medtronic Resolves Qui Tam Suits; Company Agrees to Civil Settlement; Government to Seek Dismissals of All Related Claims

The corrected release reads:

MEDTRONIC RESOLVES QUI TAM SUITS; COMPANY AGREES TO CIVILSETTLEMENT; GOVERNMENT TO SEEK DISMISSALS OF ALL RELATED CLAIMS

Medtronic, Inc. (NYSE:MDT) announced today it has reached asettlement agreement with the U.S. Department of Justice whichrequires the government to seek dismissal of two qui tam civil suitspending against Medtronic for several years in the Western District ofTennessee. The two suits are based upon allegations about certainsales and marketing practices in the Spinal business. The settlementagreement reflects Medtronic's assertion that the company and itscurrent employees had not engaged in any wrongdoing or illegalactivity.

To resolve the matter, Medtronic has entered into a five-yearagreement that further strengthens its employee training andcompliance systems surrounding sales and marketing practices and willpay a $40 million civil settlement into escrow pending dismissal ofthe lawsuits. Medtronic will record a one-time charge in its currentfirst quarter ending July 28, 2006 to account for the payment. Thelawsuits are not related to product quality, safety or efficacy and donot affect the company's ability to produce or sell any product orservice.

"Medtronic has cooperated fully with the Government during itsinvestigation of the allegations, and we believe that our company-wideefforts regarding business conduct and ethical practices assisted usin achieving a practical resolution of these cases," said Art Collins,chairman and CEO of Medtronic. "We believe the settlement, which putsthis litigation behind us, will allow us to continue to direct ourefforts at delivering life-saving and enhancing therapies to patientsaround the world."

Collins added, "We realize that any organization may be judged bythe actions of a few. We expect every Medtronic employee to adhere tohigh ethical standards at all times, and our compliance systems aredesigned to ensure compliance as our industry evolves."

Specifics Regarding the Civil Settlement

As part of the settlement, Medtronic will pay into escrow a $40million civil settlement for the first-filed suit, which was filed in2002 by a private citizen qui tam relator. The Department of Justicewill file a motion in Federal Court in Memphis for final dismissal ofthat suit.

Also under the agreement, the Department of Justice will seekfinal dismissal of the second suit (filed in 2004), on legal andprocedural grounds that prohibit such a second suit from goingforward. Once the two cases are finally dismissed, the settlementfunds will be paid to the Justice Department. The settlement agreementspecifically states that Medtronic and Medtronic Sofamor Danek denyany wrongdoing.

Specifics Regarding the Corporate Integrity Agreement

Medtronic and the Office of the Inspector General / Health andHuman Services (OIG/HHS) have entered into a corporate integrityagreement as part of the settlement.

The agreement with the OIG-HHS will go into effect upon finaldismissal by the Court of the two qui tam lawsuits and will remain ineffect for a period of five years. As a routine term of civil qui tamsettlements, corporate integrity agreements are meant to ensuretop-level attention to corporate compliance measures.

The agreement requires Medtronic's Spinal business unit toestablish an electronic database to capture and manage all non-salesrelated transactions between the business unit and its customers.Those transactions will be subject to an established set of internalcontrols and review processes, and will be monitored by Medtronicsenior management, its chief compliance officer, and an outside revieworganization.

The agreement also requires both Medtronic and its Spinal businessunit to establish and maintain corporate structures to ensurecompliance oversight, such as training and employee screeningpractices. Medtronic will continue to maintain the systems it hadinstituted prior to the settlement and will further enhance theprofile and importance of compliance for its employees on a day-to-daybasis.

About Medtronic

Medtronic, Inc. (www.medtronic.com) is the global leader inmedical technology - alleviating pain, restoring health and extendinglife for millions of people around the world.

Any forward-looking statements are subject to risks anduncertainties such as those described in Medtronic's Annual Report onForm 10-K for the year ended April 28, 2006. Actual results may differmaterially from anticipated results.