Medtronic 2016 Annual Report Download - page 18

Table of Contents
15
Insurance
We have elected to self-insure most of our insurable risks across the Company, and we made this decision based on costs and
availability factors in the insurance marketplace. We continue to maintain a directors' and officers' liability insurance policy
providing coverage for the directors and officers of the Company. We continue to monitor the insurance marketplace to evaluate
the value to us of obtaining insurance coverage for other categories of losses in the future. Based on historical loss trends, we
believe that our self-insurance program accruals and our existing insurance coverage will be adequate to cover future losses.
Historical trends, however, may not be indicative of future losses. The absence of third-party insurance coverage for other categories
of losses increases our exposure to unanticipated claims and these losses could have a material adverse impact on our consolidated
earnings, financial condition and/or cash flows.
Section 13(r) of the Exchange Act
Under Section 13(r) of the Exchange Act, the Company is required to include certain disclosures in its periodic reports if the
Company or any of its affiliates knowingly engaged in certain specified activities during the period covered by the report. As a
global medical device company, Medtronic conducts business throughout the world, including supplying life enhancing medical
products for patient use in Iran in accordance with authorizations issued by the U.S. Department of the Treasury’s Office of Foreign
Assets Control (OFAC) and other U.S. and non-U.S. governmental entities, and consistent with the Company’s corporate policies.
As part of its ongoing global trade compliance program, the Company identified that certain authorized shipments during the
period covered by this report, which were arranged and effectuated by third-party logistics providers, were sent to Iran on aircraft
owned or operated by Iran Air. This air carrier was designated under Executive Order 13382 during the relevant time period. Iran
Air’s designation under Executive Order 13382 was terminated on January 16, 2016. While Medtronic paid associated freight
expenses to the third-party logistics company, there were no gross revenues or net profits accrued by Medtronic as a result of Iran
Air being used by the third-party logistics providers. Medtronic is taking corrective actions with regard to its third party logistics
providers to confirm that air carriers designated under the Executive Orders are not used to ship Medtronic medical products in
the future, and will implement additional controls as necessary. The Company has also notified OFAC regarding this matter.
Executive Officers of Medtronic
Set forth below are the names and ages of current Section 16(b) executive officers of Medtronic, as well as information regarding
their positions with Medtronic, their periods of service in these capacities, and their business experiences. There are no family
relationships among any of the officers named, nor is there any arrangement or understanding pursuant to which any person was
selected as an officer.
Omar Ishrak, age 60, has been Chairman and Chief Executive Officer of the Company since January 2015 and of Medtronic, Inc.
since June 2011. Prior to that, Mr. Ishrak served as President and Chief Executive Officer of GE Healthcare Systems, a division
of GE Healthcare, from 2009 to 2011. Prior to that, Mr. Ishrak was President and Chief Executive Officer of GE Healthcare Clinical
Systems from 2005 to 2008 and President and Chief Executive Officer of GE Healthcare Ultrasound and BMD from 1995 to 2004.
Michael J. Coyle, age 54, has been Executive Vice President and Group President, Cardiac and Vascular Group of the Company
since January 2015 and of Medtronic, Inc. since December 2009. Prior to that, he served as President of the Cardiac Rhythm
Management division at St. Jude from 2001 to 2007, and prior positions included serving St. Jude as President of the company’s
Daig Catheter division and numerous leadership positions at Eli Lilly & Company.
Gary L. Ellis, age 59, has served as Executive Vice President of Global Operations and Information Technology since June 2016.
Mr. Ellis previously served as Executive Vice President and Chief Financial Officer of the Company beginning in January 2015
and of Medtronic, Inc. beginning in April 2014. Prior to that, he was Senior Vice President and Chief Financial Officer from May
2005 to April 2014; Vice President, Corporate Controller and Treasurer from October 1999 to May 2005, and Vice President and
Corporate Controller from August 1994 to October 1999. Mr. Ellis joined Medtronic in 1989 as Assistant Corporate Controller
and was promoted to Vice President of Finance for Medtronic Europe in 1992, until being named as Corporate Controller in 1994.
Mr. Ellis is a member of the board of directors of The Toro Company and past chairman of the American Heart Association.
Hooman C. Hakami, age 46, has been Executive Vice President and Group President, Diabetes Group of the Company since
January 2015 and of Medtronic, Inc. since June 2014. Prior to that, he was President and Chief Executive Officer of Detection
and Guidance Solutions at GE Healthcare from April 2012 to May 2014. Prior to that, he served as President and Chief Executive
Officer of Interventional Systems from July 2009 to April 2012; Global Business Transformation leader for GE Healthcare from
December 2008 to July 2009; and Vice President and General Manager, Global Ultrasound Services from June 2004 to December
2008. Mr. Hakami started his career with GE and has held the following financial roles: Chief Financial Officer for the Global
Ultrasound division from 2001 to 2004; Chief Financial Officer for Clinical and Multi-vendor Services from 1999 to 2001; as
well as various finance roles at GE Capital from 1994 to 1999; GE's Aerospace Division from 1992 to 1994 and GE Power Systems
from 1991 to 1992.