2000 Employee Stock Purchase Savings Plan - St. Jude Medical Inc.


                             St. Jude Medical, Inc.
                    2000 Employee Stock Purchase Savings Plan

                                        I

                                     Purpose

         The purpose of the 2000 Employee Stock Purchase Savings Plan is to
provide a greater community of interest between St. Jude Medical, Inc.
shareholders and its employees, and to facilitate purchase by employees of
additional shares of common stock in the Company. It is believed the Plan will
encourage employees to remain in the employ of the Company and will also permit
the Company to compete with other corporations offering similar plans in
obtaining and retaining the services of competent employees. It is intended that
options issued pursuant to this Plan shall constitute options issued pursuant to
an 'Employee Stock Purchase Plan' within the meaning of Section 423 of the
Internal Revenue Code of 1986, as amended.

                                       II

                                   Definitions

         A. 'Plan' means the 2000 St. Jude Medical, Inc. Employee Stock Purchase
Savings Plan.

         B. 'Code' means the Internal Revenue Code of 1986, as amended.

         C. 'Company' means St. Jude Medical, Inc., and any of its subsidiaries
(as that term is defined by Section 425(f) of the Code) to which St. Jude
Medical, Inc. and such respective subsidiaries, by action of their Boards of
Directors, shall make this Plan applicable.

         D. 'Employee' means any person, including an officer, who is
customarily employed twenty (20) hours or more per week and more than five (5)
months in a calendar year by the Company.

         E. 'Eligible Employee' means an Employee of the Company who is eligible
for participation in the Plan in accordance with Article IV.

         F. 'Participant' means an Eligible Employee who has elected to
participate in the Plan in accordance with Article V.

         G. 'Committee' means the committee provided for in Article XI.

         H. The 'Commencement Date' of the Plan means August l, 2000 or a date
established by the Committee not to exceed fourteen days following registration
of the options and shares reserved pursuant to the Plan with the United States
Securities and Exchange Commission.




         I. 'Base Pay' means regular straight time earnings annualized as of the
date of commencement of a phase excluding payments, if any, for overtime,
incentive compensation, commissions, incentive payments, premiums, bonuses and
any other special remuneration.

         J. 'Termination Date' shall mean the earlier of (i) the date of the one
year anniversary following the commencement of a particular phase of the Plan,
or (ii) such time as any merger or consolidation in which St. Jude Medical, Inc.
is not the surviving corporation becomes effective.

         K. 'Shares' shall mean common shares of St. Jude Medical, Inc. of the
par value of $.10, subject to adjustments which may be made in accordance with
Articles XVI and XVII.

                                       III

                           Term and Phases of the Plan

         A. The Plan will commence on the Commencement Date and will terminate
ten (10) years and six (6) months thereafter, except that any phase commenced
prior to such termination shall, if necessary, be allowed to continue beyond
such termination until completion. Notwithstanding the foregoing, this Plan
shall be considered of no force or effect and any options granted shall be null
and void unless the holders of a majority of shares of the common stock of the
Company, represented at a meeting in person or by proxy, approve the Plan within
twelve (12) months before or after the date of its adoption by the Board of
Directors.

         B. The Plan shall be carried out in ten (10) phases, each phase being
for a period of one year. No phase shall run concurrently. A phase may commence
immediately after the termination of the preceding phase. The commencement of
each phase shall be determined by the Committee, provided that the commencement
of the first phase shall be within twelve (12) months before or after the date
of approval of the Plan by the shareholders of the Company. In the event all of
the stock reserved for grant of options hereunder is issued pursuant to the
terms hereof prior to the commencement of one or more phases scheduled by the
Committee or the number of shares remaining is so small, in the opinion of the
Committee, as to render administration of any succeeding phase impracticable,
such phase or phases shall be canceled. Phases shall be numbered successively as
Phase 1, Phase 2, Phase 3, etc.

                                       IV

                                   Eligibility

         A. Any Employee of the Company who has completed at least one month of
continuous service on or prior to the commencement of a phase of the Plan shall
be eligible to participate in the Plan, subject to the limitations imposed by
Section 423 of the Code.

         B. Any Employee who is a member of the Board of Directors of the
Company shall be eligible to participate in the Plan.


2000 Stock Purchase Plan               2



         C. Notwithstanding any provision of the Plan to the contrary, no
Employee shall be granted an option:

                  1. if such Employee, immediately after the option is granted,
         owns shares possessing five percent (5%) or more of the total combined
         voting power or value of all classes of shares of the Company or a
         parent or a subsidiary of the Company. For purposes of determining
         share ownership, the rules of Section 424(d) of the Code shall apply,
         and shares which the Employee may purchase under outstanding options
         shall be treated as shares owned by the Employee; or

                  2. which permits the Employee to purchase shares under such
         plans of the Company or a subsidiary of the Company to accrue at a rate
         which exceeds $25,000 of the fair market value of such shares
         (determined at the time such option is granted) for each calendar year
         in which such option is outstanding at any time. The term 'accrue'
         shall be interpreted as in Section 423(b)(8) of the Code.

                                        V

                                  Participation

         A. An Eligible Employee may elect to enroll as, and become a
Participant in, any phase of the Plan by completing a payroll deduction
authorization on the form provided by the Company and filing it the personnel
office prior to or on the date the phase commences.

         B. Payroll deductions for a Participant shall commence on the date when
his or her payroll deduction authorization becomes effective and shall end on
the last payday immediately prior to or coinciding with the Termination Date of
the particular phase, unless sooner terminated by the Participant as provided in
Article IX or as otherwise provided herein.

         C. A Participant who ceases to be an Eligible Employee, although still
employed by the Company, thereupon shall be deemed to discontinue his or her
participation in the Plan, and he or she shall have the rights provided in
Article IX.

         D. Participation in the Plan shall be voluntary.

                                       VI

                               Payroll Deductions

         A. Upon enrollment, a Participant shall elect to make contributions to
the Plan by payroll deductions (in full dollar amounts calculated to be as
uniform as practicable throughout the period of the phase), in the aggregate
amount not in excess of the sum of 10% of such Participant's Base Pay for the
term of the phase, as determined on the basis of his or her annual or annualized
Base Pay at the commencement of the phase. The minimum authorized payroll
deduction must aggregate to not less than $10 per month.


2000 Stock Purchase Plan               3



         B. All payroll deductions made for Participants shall be credited to
their accounts under the Plan. The Participant may not make any separate cash
payments into such account.

         C. A Participant may discontinue his or her participation in the phase
and terminate his or her payroll deduction authorized at any time as provided in
Article IX.

         D. A Participant may reduce the amount of his or her payroll deduction
by completing an amended payroll deduction authorization on the form provided
and filing it with his or her personnel office, but no change can be made during
a phase of the Plan which would either change the time or increase the rate of
his or her payroll deductions.

                                       VII

                         Terms and Conditions of Options

         A. Stock options granted pursuant to the Plan may be evidenced by
agreements in such form as the Committee shall approve, provided that all
Employees shall have the same rights and privileges and provided further that
such options shall comply with and be subject to the following terms and
conditions. The Committee may conclude that agreements are not necessary.

         B. As of the commencement of a phase when a Participant's payroll
deduction authorization becomes effective, the Participant shall be granted an
option for as many full shares as he or she will be able to purchase with the
payroll deduction credited to his or her account during his or her participation
in the phase, subject to the limitations of Article X. The maximum number of
shares subject to purchase by a Participant shall equal the total amount
credited to the Participant's account under Section VI hereof divided by the
option price set forth in Section VII, Paragraph C.1 hereof.

         C. The option price of shares purchased with payroll deductions for an
Employee who becomes a Participant as of the commencement of a phase shall be
the lower of:

                  1. 85% of the fair market value of the shares on the date the
         phase commences; or,

                  2. 85% of the fair market value of the shares on the
         Termination Date of the phase.

         D. The fair market value of the shares shall be determined by the
Committee for each valuation date in a manner consistent with Section 423 of the
Code.


2000 Stock Purchase Plan               4



                                      VIII

                               Exercise of Option

         A. Unless a Participant gives written notice to the Company as provided
in Article IX, his or her option for the purchase of shares will be exercised
automatically for him or her as of the Termination Date of the phase for the
purchase of the number of full shares which the accumulated payroll deductions
in his or her account at that time will purchase at the applicable option price;
but in no event shall the number of full shares be greater than the number of
full shares to which the Participant would have been eligible to receive when he
or she first became a Participant under the phase if he or she had elected a
payroll deduction rate of 10% of his or her then annual or annualized Base Pay
and as if the option price were solely based under Paragraph C.1 of Article VII.

         B. By written notice to the Company within the period commencing three
(3) months prior to and extending five (5) business days following the
Termination Date of the phase and after delivery to the Participant of a
prospectus covering the shares to be issued under the Plan, a Participant may
elect, effective as of the Termination Date, to:

                  1. withdraw all the accumulated payroll deductions in his or
         her account at the time, with interest; or, after receipt of a
         prospectus as set forth above,

                  2. exercise his or her option for a specified number of full
         shares less than the number of full shares which the accumulated
         payroll deductions in his or her account will purchase at the
         applicable option price and withdraw the balance in his or her account
         without interest; but in no event shall the number of full shares be
         greater than the number of full shares to which a Participant would
         have been eligible to receive when he or she first became a Participant
         under the phase if he or she had elected a payroll deduction rate of
         10% of his or her then annual or annualized Base Pay and as if the
         option price were solely based under Paragraph C.1 of Article VII.

         C. Notwithstanding the provisions of Paragraphs A and B above, if a
Participant files reports pursuant to Section 16 of the Securities Exchange Act
of 1934 (at the commencement of a phase or becomes obligated to file such
reports during a phase) then such a Participant shall not have the right to
withdraw all or a portion of the accumulated payroll deductions except in
accordance with Article IX, Paragraphs A and B.

                                       IX

                        Death, Withdrawal or Termination

         A. In the event of death of a Participant, the person or persons
specified in Article XVIII may give notice to the Company within sixty (60) days
of the death of the Participant electing to purchase the number of full shares
which the accumulated payroll deductions in the account of such deceased
Participant will purchase under the option at the applicable option price
specified in Paragraph C of Article VII and have the balance in the account
distributed in cash


2000 Stock Purchase Plan               5



without interest. If no such notice is received by the Company within said sixty
(60) days, the accumulated payroll deductions will be distributed in cash plus
interest.

         B. Except as provided in the next sentence, upon termination of the
Participant's employment for any reason other than the death of the Participant,
the payroll deductions credited to his or her account, plus interest, shall be
returned to him or her. In the event the Participant's employment is terminated
by the Company due to the elimination of the Participant's position or in
connection with a corporate transaction, or such other similar circumstances as
approved by the Committee, with respect to such Participants designated by the
Committee, the Termination Date of the Phase shall be a date prior to or
coincident with their last day of employment; provided, however, that if the
termination of employment occurs within 90 days of the Termination Date of a
Phase, the original Termination Date shall apply.

         C. Except for a Participant governed by Paragraph C of Article VIII, a
Participant may withdraw payroll deductions credited to his or her account under
the Plan at any time by giving written notice to the Company. All of the
Participant's payroll deductions credited to his or her account, plus interest,
shall be paid to him or her promptly after receipt of his or her notice of
withdrawal and no further payroll deductions shall be made from his or her
compensation.

                                        X

                               Shares Under Option

         A. The shares to be sold to a Participant under the Plan may, at the
election of the Company, be either treasury shares or shares originally issued
for such purpose. The maximum number of shares which shall be made available for
purchase under the Plan shall be 1,000,000 shares, subject to adjustment upon
changes in capitalization of the Company as provided in Articles XVI and XVII.
If the total number of shares for which options are to be granted on any date in
accordance with Article VII exceeds the number of shares then available under
the Plan (after deduction of all shares for which options have been exercised or
are then outstanding), the Committee shall make a pro rata allocation of the
shares remaining available in as nearly a uniform manner as shall be practicable
and as it shall determine to be equitable. In such event, payroll deductions to
be made shall be reduced accordingly and the Committee shall give written notice
of such reduction to each Participant affected thereby.

         B. As promptly as practicable after the Termination Date of a phase,
the Company shall deliver to each Participant the full shares purchased under
exercise of his or her option, together with a cash payment equal to the balance
(without interest) of any payroll deductions credited to his or her account
which were not used for the purchase of shares.

         C. The Participant will have no interest in shares covered by his or
her option until such option has been exercised.


2000 Stock Purchase Plan               6



                                       XI

                                 Administration

         The Plan shall be administered by a Committee consisting of not less
than two (2) members who shall be appointed by the Board of Directors of the
Company. Each member of such Committee shall be either a director, an officer or
an employee of the Company. Such Committee shall be vested with full authority
to make, administer, and interpret such rules and regulations as it deems
necessary to administer the Plan, and any such determination, decision or action
of such Committee with respect to any action in connection with the
construction, interpretation, administration or application of the Plan shall be
final, conclusive and binding on all Participants and any and all other persons
claiming under or through any Participant. It is provided, however, that the
provisions of the Plan shall be construed so as to extend and limit
participation in the Plan only in a manner consistent with the requirements of
Section 423 of the Code.

                                       XII

                              Amendment of the Plan

         The Board of Directors of the Company may at any time amend the Plan,
except that no amendment may make any change in any option theretofore granted
which would adversely affect the rights of any Participant, and no amendment
shall be made without prior approval of the shareholders of the Company if such
amendment would require sale of more shares than are authorized under Article X
of the Plan.

                                      XIII

                               Non-transferability

         Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
by the Participant and any such attempted assignment, transfer, pledge or other
disposition shall be null and void and without effect, but the Company may treat
such act as an election to withdraw funds in accordance with Article IX.

                                       XIV

                                  Use of Funds

         All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purposes and the Company shall not
be obligated to segregate such payroll deductions.


2000 Stock Purchase Plan               7



                                       XV

                                    Interest

         In any situation where the Plan provides for the payment of interest on
a Participant's payroll deductions, such interest shall be determined by
averaging the balance in the Participant's account for the period of his or her
participation and computing interest thereon at the rate of 4% per annum (simple
interest). The Committee may change the rate of interest for a particular phase,
provided such change is made prior to the commencement of the phase.

                                       XVI

                     Changes in Capitalization, Merger, etc.

         A. Subject to any required action by the shareholders, the number of
shares covered by each outstanding option, the price per share thereof in each
such option, and the maximum number of shares available for purchase pursuant to
options issued under the Plan shall be deemed proportionately adjusted for any
increase or decrease in the number of issued shares of the Company resulting
from a subdivision or consolidation of shares or the payment of a share dividend
(but only on the shares) or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company.

         B. If the Company shall be involved in any merger or consolidation,
whether or not it is the surviving corporation, each outstanding option shall
pertain to and apply to the securities to which a holder of the number of shares
subject to the option would have been entitled. A dissolution or liquidation of
the Company shall cause each outstanding option to terminate, provided in such
event that, immediately prior to such dissolution or liquidation, each
Participant shall be repaid the payroll deductions credited to his or her
account, plus interest.

         C. In the event of a change in the shares of the Company as presently
constituted, which is limited to a change of all its authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the
shares within the meaning of this Plan.

                                      XVII

                              Adjustments to Shares

         A. To the extent that the foregoing adjustments relate to shares or
securities of the Company, such adjustments shall be made by the Committee, and
its determination in that respect shall be final, binding and conclusive,
provided that each option granted pursuant to this Plan shall not be adjusted in
a manner that causes the option to fail to continue to qualify as an option
issued pursuant to an 'employee stock purchase plan' within the meaning of
Section 423 of the Code.


2000 Stock Purchase Plan               8



         B. Except as hereinbefore expressly provided in Articles XVI and XVII,
the optionee shall have no right by reason of any subdivision or consolidation
of shares of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of any class or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation, and any issue by the Company of shares of any
class, or securities convertible into shares of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to the option.

         C. The grant of an option pursuant to this Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

                                      XVIII

                             Beneficiary Designation

         A Participant may file a written designation of a beneficiary who may
elect to purchase shares or receive cash to the Participant's credit under the
Plan in the event of such Participant's death prior to delivery to him or her of
such shares and cash. Such designation of beneficiary may be changed by the
Participant at any time by written notice. Upon the death of a Participant and
upon receipt by the Company of proof deemed adequate by it of the identity and
existence at the Participant's death of a beneficiary validly designated by him
or her under the Plan, the Company shall deliver such shares and cash to such
beneficiary in accordance with Section A of Article IX. If, upon the death of a
Participant, there is no surviving beneficiary duly designated as above
provided, the Company shall deliver accumulated payroll deductions to the
executor or administrator of the estate of the Participant or, if no such
executor or administrator has been appointed (to the knowledge of the Company)
within sixty (60) days following the Participant's death, the Company shall
deliver such accumulated payroll deductions to the surviving spouse, if any, as
though named as the designated beneficiary hereunder or, if there is no such
surviving spouse or child, then to such relatives of the Participant as would be
entitled to such cash under the laws of intestacy in the deceased Participant's
domicile as though named as the designated beneficiary hereunder. The Company
shall not be liable for any distribution made of shares or cash pursuant to any
will or other testamentary disposition made by such Participant, or because of
the provisions of law concerning intestacy, or otherwise. No designated
beneficiary shall, prior to the death of the Participant by whom he or she has
been designated, acquire any interest in the shares or cash credited to the
Participant under the Plan.

                                       XIX

                    Registration and Qualification of Shares

         The offering of the shares hereunder shall be subject to the effecting
by the Company of any registration or qualification of the shares under any
federal or state law or the obtaining of the consent or approval of any
governmental regulatory body which the Company shall determine, in its sole
discretion, is necessary or desirable as a condition to or in connection with


2000 Stock Purchase Plan               9



the offering or the issue or purchase of the shares covered thereby. The Company
shall make every reasonable effort to effect such registration or qualification
or to obtain such consent or approval.

                                       XX

                               Plan Preconditions

         The Plan is expressly made subject to approval of shareholders of the
Company. If the Plan is not so approved by the shareholders on or before one
year after adoption by the Board of Directors, this Plan shall not come into
effect. In such case, the accumulated payroll deductions credited to the account
of each Participant shall forthwith be repaid to him or her with interest.


ADOPTED BY BOARD OF DIRECTORS:  March 8, 2000

APPROVED BY SHAREHOLDERS: May 10, 2000


2000 Stock Purchase Plan               10




 TYPE:  EX-10.16
 SEQUENCE:  3
 DESCRIPTION:  2000 STOCK PLAN



                                                                   EXHIBIT 10.16


                             ST. JUDE MEDICAL, INC.
                                 2000 STOCK PLAN





SECTION      CONTENTS                                                     PAGE
-------      --------                                                     ----

   1.        General Purpose of Plan; Definitions ..................        1

   2.        Administration ........................................        3

   3.        Stock Subject to Plan .................................        4

   4.        Eligibility ...........................................        4

   5.        Stock Options .........................................        5

   6.        Transfer, Leave of Absence, etc. ......................        9

   7.        Restricted Stock ......................................        9

   8.        Amendments and Termination ............................       11

   9.        Unfunded Status of Plan ...............................       11

   10.       General Provisions ....................................       12

   11.       Effective Date of Plan ................................       13




                             ST. JUDE MEDICAL, INC.
                                 2000 STOCK PLAN


         SECTION 1. General Purpose of Plan; Definitions.

         The name of this plan is the St. Jude Medical, Inc. 2000 Stock Plan
(the 'Plan'). The purpose of the Plan is to enable St. Jude Medical, Inc. and
its Subsidiaries (hereinafter, the 'Company') to retain and attract executives
and other key employees, non-employee directors and consultants who contribute
to the Company's success by their ability, ingenuity and industry, and to enable
such individuals to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company.

         For purposes of the Plan, the following terms shall be defined as set
forth below:

         a. 'Board' means the Board of Directors of the Company as it may be
comprised from time to time.

         b. 'Cause' means a felony conviction of a participant or the failure of
a participant to contest prosecution for a felony, willful misconduct,
dishonesty or intentional violation of a statute, rule or regulation, any of
which, in the judgment of the Company, is harmful to the business or reputation
of the Company.

         c. 'Code' means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.

         d. 'Committee' means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be in office, then the functions of the
Committee specified in the Plan shall be exercised by the Board, unless the Plan
specifically states otherwise.

         e. 'Consultant' means any person, including an advisor, engaged by the
Company, the Parent Corporation or a Subsidiary of the Company to render
services and who is compensated for such services and who is not an employee of
the Company, the Parent Corporation or any Subsidiary of the Company. A
Non-Employee Director may serve as a Consultant.

         f. 'Continuous Status as an Employee or Consultant' shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Administrator, provided that such leave of
absence is for a period of 90 days or less, unless reemployment after such leave
of absence is guaranteed by contract or statute.

         g. 'Company' means St. Jude Medical, Inc., a corporation organized
under the laws of the State of Minnesota (or any successor corporation).


                                       1



         h. 'Disability' means permanent and total disability as determined by
the Committee.

         i. 'Early Retirement' means retirement, with consent of the Committee
at the time of retirement, from active employment with the Company and any
Subsidiary or Parent Corporation of the Company.

         j. 'Fair Market Value' of Stock on any given date shall be determined
by the Committee as follows: (a) if the Stock is listed for trading, on the New
York Stock Exchange or one of more national securities exchanges, the last
reported sales price on the New York Stock Exchange or such principal exchange
on the date in question, or if such Stock shall not have been traded on such
principal exchange on such date, the last reported sales price on the New York
Stock Exchange or such principal exchange on the first day prior thereto on
which such Stock was so traded; or (b) if (a) is not applicable, by any means
fair and reasonable by the Committee, which determination shall be final and
binding on all parties.

         k. 'Incentive Stock Option' means any Stock Option intended to be and
designated as an 'Incentive Stock Option' within the meaning of Section 422 of
the Code.

         l. 'Non-Employee Director' means a 'Non-Employee Director' within the
meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.

         m. 'Non-Qualified Stock Option' means any Stock Option that is not an
Incentive Stock Option, and is intended to be and is designated as a
'Non-Qualified Stock Option' or an Incentive Stock Option that ceases to so
qualify due to an amendment to such Stock Option.

         n. 'Normal Retirement' means retirement from active employment with the
Company and any Subsidiary or Parent Corporation of the Company on or after age
65.

         o. 'Outside Director' means a Director who: (a) is not a current
employee of the Company or any member of an affiliated group which includes the
Company; (b) is not a former employee of the Company who receives compensation
for prior services (other than benefits under a tax-qualified retirement plan)
during the taxable year; (c) has not been an officer of the Company; (d) does
not receive remuneration from the Company, either directly or indirectly, in any
capacity other than as a director, except as otherwise permitted under Code
Section 162(m) and regulations thereunder. For this purpose, remuneration
includes any payment in exchange for good or services. This definition shall be
further governed by the provisions of Code Section 162(m) and regulations
promulgated thereunder.

         p. 'Parent Corporation' means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if each of the
corporations (other than the Company) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.


                                       2



         q. 'Restricted Stock' means an award of shares of Stock that are
subject to restrictions under Section 7 below.

         r. 'Retirement' means Normal Retirement or Early Retirement.

         s. 'Stock' means the Common Stock of the Company.

         t. 'Stock Option' means any option to purchase shares of Stock granted
pursuant to Section 5 below.

         u. 'Subsidiary' means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

         SECTION 2. Administration.

         The Plan shall be administered by the Board of Directors or by a
Committee appointed by the Board of Directors of the Company consisting of at
least two Directors, all of whom shall be Outside Directors and Non-Employee
Directors, who shall serve at the pleasure of the Board.

         The Committee shall have the power and authority to grant to eligible
employees or Consultants, pursuant to the terms of the Plan: (i) Incentive Stock
Options, (ii) Non-Qualified Stock Options, and (iii) Restricted Stock.

         In particular, the Committee shall have the authority:

                  (i) to select the officers and other key employees of the
         Company and its Subsidiaries and other eligible persons to whom Stock
         Options or Restricted Stock may from time to time be granted hereunder;

                  (ii) to determine whether and to what extent Incentive Stock
         Options, Non-Qualified Stock Options or Restricted Stock or a
         combination of each, are to be granted hereunder;

                  (iii) to determine the number of shares to be covered by each
         such award granted hereunder;

                  (iv) to determine the terms and conditions, not inconsistent
         with the terms of the Plan, of any award granted hereunder (including,
         but not limited to, any restriction on any Stock Option or other award
         and/or the shares of Stock relating thereto), which authority shall be
         exclusively vested in the Committee (and not the Board); provided,
         however, that in the event of a merger or asset sale, the applicable


                                       3



         provisions of Sections 5(c) of the Plan shall govern the acceleration
         of the vesting of any Stock Option;

                  (v) to determine whether, to what extent and under what
         circumstances Stock and other amounts payable with respect to an award
         under this Plan shall be deferred either automatically or at the
         election of the participant.

         The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate to the President and/or Chief Executive Officer of the Company the
authority to exercise the powers specified in (i), (ii), (iii), (iv) and (v)
above with respect to persons who are not either the chief executive officer of
the Company or the four highest paid officers of the Company other than the
chief executive officer.

         All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and Plan
participants.

         SECTION 3. Stock Subject to Plan.

         The total number of shares of Stock reserved and available for
distribution under the Plan shall be 5,000,000. Such shares may consist, in
whole or in part, of authorized and unissued shares. If any shares that have
been optioned cease to be subject to Stock Options, or if any shares that have
been optioned are forfeited, such shares shall again be available for
distribution in connection with future awards under the Plan.

         In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, and in the number and option price of
shares subject to outstanding options granted under the Plan as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.

         SECTION 4. Eligibility.

         Officers, other key employees of the Company or any Parent Corporation
or Subsidiary, members of the Board of Directors, and Consultants who are
responsible for or contribute to the management, growth and profitability of the
business of the Company and its Subsidiaries are eligible to be granted Stock
Options under the Plan. The optionees and participants under the Plan shall be
selected from time to time by the Committee, in its sole discretion, from among
those eligible, and the Committee shall determine, in its sole discretion, the
number of shares covered by each award.


                                       4



         Notwithstanding the foregoing, no person shall receive grants of Stock
Options under this Plan which exceed 500,000 shares during any fiscal year of
the Company.

         SECTION 5. Stock Options.

         Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

         The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock
Options shall be granted under the Plan after March 7, 2010.

         The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options. To the
extent that any option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option.

         Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code. The preceding sentence shall not preclude any
modification or amendment to an outstanding Incentive Stock Option, whether or
not such modification or amendment results in disqualification of such Stock
Option as an Incentive Stock Option, provided the optionee consents in writing
to the modification or amendment.

        Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

        (a) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be no less than 100% of Fair Market Value on the date the
option is granted. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted to such
employee, the option price shall be no less than 110% of Fair Market Value of
the Stock on the date the option is granted. The Committee may not reprice
options without shareholder approval.

        (b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than eight years after
the date the option is granted. If an employee owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted to such
employee, the term of such option shall be no more than five years from the date
of grant.


                                       5



        (c) Exercisability. Stock Options shall be exercisable at such time or
times as determined by the Committee at or after grant, subject to the
restrictions stated in Section 5(b) above. If the Committee provides, in its
discretion, that any option is exercisable only in installments, the Committee
may waive such installment exercise provisions at any time. Notwithstanding
anything contained in the Plan to the contrary, the Committee may, in its
discretion, extend or vary the term of any Stock Option or any installment
thereof, whether or not the optionee is then employed by the Company, if such
action is deemed to be in the best interests of the Company; provided, however,
that in the event of a merger or sale of assets, the provisions of this Section
5(c) shall govern vesting acceleration. Notwithstanding the foregoing, unless
the Stock Option provides otherwise, any Stock Option granted under this Plan
shall be exercisable in full, without regard to any installment exercise
provisions, for a period specified by the Committee, but not to exceed sixty
(60) days, prior to the occurrence of any of the following events: (i)
dissolution or liquidation of the Company other than in conjunction with a
bankruptcy of the Company or any similar occurrence, (ii) any merger,
consolidation, acquisition, separation, reorganization, or similar occurrence,
where the Company will not be the surviving entity or (iii) the transfer of
substantially all of the assets of the Company or 50% or more of the outstanding
Stock of the Company.

        The grant of an option pursuant to the Plan shall not limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
exchange or consolidate or to dissolve, liquidate, sell or transfer all or any
part of its business or assets.

        (d) Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price, either by check,
or by any other form of legal consideration deemed sufficient by the Committee
and consistent with the Plan's purpose and applicable law, including promissory
notes or a properly executed exercise notice together with irrevocable
instructions to a broker acceptable to the Company to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price. As
determined by the Committee at the time of grant or exercise, in its sole
discretion, payment in full or in part may also be made in the form of Stock
already owned by the optionee (which in the case of Stock acquired upon exercise
of an option have been owned for more than six months on the date of surrender)
or, in the case of the exercise of a Non-Qualified Stock Option (based, in each
case, on Fair Market Value of the Stock on the date the option is exercised, as
determined by the Committee), provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares may be authorized only at the time the option is granted, and provided
further that in the event payment is made in the form of shares of restricted
stock under another plan of the Company, the optionee will receive a portion of
the option shares in the form of, and in an amount equal to, the restricted
stock tendered as payment by the optionee. If the terms of an option so permit,
an optionee may elect to pay all or part of the option exercise price by having
the Company withhold from the shares of Stock that would otherwise be issued
upon exercise that number of shares of Stock having a Fair Market Value


                                       6



equal to the aggregate option exercise price for the shares with respect to
which such election is made. No shares of Stock shall be issued until full
payment therefor has been made. An optionee shall generally have the rights to
dividends and other rights of a shareholder with respect to shares subject to
the option when the optionee has given written notice of exercise, has paid in
full for such shares, and, if requested, has given the representation described
in paragraph (a) of Section 9.

        (e) Non-transferability of Options. No Incentive Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all such Incentive Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee. Non-Qualified Stock
Options may be transferred by gift, without consideration, by the optionee under
a written instrument acceptable to the Committee, to a member of the optionee's
family, as defined in Section 267 of the Code, or to a trust or similar entity
whose sole beneficiaries are the optionee and/or members of the optionee's
family; provided, however, that such transfer and the exercise thereof shall not
violate any federal or state securities laws. Upon the transfer, the donee shall
have all rights of the optionee and shall be subject to all the terms and
conditions imposed on such Options.

        (f) Termination by Death. If an optionee's employment by the Company and
any Subsidiary or Parent Corporation terminates by reason of death, any Stock
Option may thereafter be exercised, to the extent then exercisable, by the legal
representative of the estate or by the legatee of the optionee under the will of
the optionee, but may not be exercised after twelve months from the date of such
death or the expiration of the stated term of the option, whichever period is
shorter. In the event of termination of employment by reason of death, if,
pursuant to its terms, any Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, the option will thereafter be treated as a Non-Qualified Stock Option.

        (g) Termination by Reason of Disability. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Disability,
but may not be exercised after twelve months from the date of such termination
of employment or the expiration of the stated term of the option, whichever
period is the shorter. In the event of termination of employment by reason of
Disability, if, pursuant to its terms, any Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, the option will thereafter be treated as a Non-Qualified Stock
Option.

        (h) Termination by Reason of Retirement. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Retirement,
but may not be exercised after thirty-six months from the date of such
termination of employment or the expiration of the stated term of the option,
whichever period is the shorter. In the event of termination of employment by
reason of Retirement, if, pursuant to its terms, any Incentive Stock Option is
exercised after the


                                       7



expiration of the exercise periods that apply for purposes of Section 422 of the
Code, the option will thereafter be treated as a Non-Qualified Stock Option.

        (i) Other Termination. If an optionee's Continuous Status as an Employee
or Consultant terminates (other than upon the optionee's death, Disability or
Retirement), any Stock Option held by such optionee may thereafter be exercised
to the extent it was exercisable at the time of such termination, but may not be
exercised after 90 days after such termination, or the expiration of the stated
term of the option, whichever period is the shorter. In the event of termination
of employment by reason other than death, Disability or Retirement and if
pursuant to its terms any Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, the option will thereafter be treated as a Non-Qualified Stock Option. In
the event an Optionee's employment with the Company is terminated for Cause, all
unexercised Options granted to such Optionee shall immediately terminate.

         (j) Annual Limit on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Stock Option is granted) of the Common
Stock with respect to which an Incentive Stock Option under this Plan or any
other plan of the Company and any Subsidiary or Parent Corporation is
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000.

         (k) Grants of Stock Options to Non-Employee Directors. Each
Non-Employee Director who, after March 8, 2000 is (i) elected, re-elected or
serving an unexpired term as a Director of the Company at any annual meeting of
holders of the common Stock of the Company; or (ii) elected as a Director of the
Company at any special meeting of holders of common Stock of the Company, shall,
as of the date of such election, re-election or annual or special meeting,
automatically be granted a Stock Option to purchase 3,000 shares of Stock at an
option price per share equal to 100% of Fair Market Value of the Company's Stock
on such date. In the case of a special meeting, the action of the holders of
shares in electing a Non-Employee Director shall constitute the granting of the
Stock Option to such Director and, in the case of an annual meeting, the action
of the holders of shares in electing or re-electing a Non-Employee Director
shall constitute the granting of the Stock Option to such Director and to any
other Non-Employee Director who shall be designated as serving an unexpired term
as a Director of the Company in the notice or proxy materials for the meeting;
and the date when the holders of shares shall take such action shall be the date
of grant of the Stock Option. All such Options shall be designated as
Non-Qualified Stock Options and shall be subject to the same terms and
provisions as are then in effect with respect to the grant of Non-Qualified
Stock Options to officers and key employees of the Company, except that (1) the
term of each such Option shall be equal to eight years, which term,
notwithstanding the provisions in Section 5(i), shall not expire upon the
termination of service as a Director; and (2) the Option shall become
exercisable beginning six months after the date the Option is granted. Upon
termination of such Director's service as a Director of the Company, the
unvested portion of an Option held by such Director shall not thereafter be
exercisable. Subject to the foregoing, all provisions of this Plan not
inconsistent with the foregoing shall apply to Options granted pursuant to this
Section 5(k), except that any Options granted to a Non-Employee Director shall
be administered in


                                       8



accordance with the terms of this Plan solely by the Board of Directors and not
by the Committee. Options issued under this Section 5(k) shall be in lieu of and
in substitution for any new awards of Options in accordance with the St. Jude
Medical, Inc. 1997 Stock Option Plan from and after March 8, 2000. Nothing
herein shall limit the right of the Board of Directors to issue Stock Options to
any Non-Employee Director under the terms of this Plan in addition to those
provided for under this Section 5(k), provided that no Non-Employee Director
shall be granted Stock Options under this Plan, including the Options awarded
under this Section 5(k), in excess of 5,000 shares in any calendar year.

         SECTION 6. Transfer, Leave of Absence, etc.

         For purposes of the Plan, the following events shall not be deemed a
termination of employment:

         (a) a transfer of an employee from the Company to a Parent Corporation
or Subsidiary, or from a Parent Corporation or Subsidiary to the Company, or
from one Subsidiary to another;

         (b) a leave of absence, approved in writing by the Committee, for
military service or sickness, or for any other purpose approved by the Company
if the period of such leave does not exceed ninety (90) days (or such longer
period as the Committee may approve, in its sole discretion); and

         (c) a leave of absence in excess of ninety (90) days, approved in
writing by the Committee, but only if the employee's right to reemployment is
guaranteed either by a statute or by contract, and provided that, in the case of
any leave of absence, the employee returns to work within 30 days after the end
of such leave.

         SECTION 7. Restricted Stock.

         (a) Administration. Up to 50,000 shares of Restricted Stock may be
issued either alone or in addition to other awards granted under the Plan. The
Committee shall determine the officers and key employees of the Company and
Subsidiaries to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the time or times within which
such awards may be subject to forfeiture, and all other conditions of the
awards. The Committee may also condition the grant of Restricted Stock upon the
attainment of specified performance goals. The provisions of Restricted Stock
awards need not be the same with respect to each recipient.

         (b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.


                                       9



                  (i) Each participant shall be issued a stock certificate in
         respect of shares of Restricted Stock awarded under the Plan. Such
         certificate shall be registered in the name of the participant, and
         shall bear an appropriate legend referring to the terms, conditions,
         and restrictions applicable to such award, substantially in the
         following form:

                  'The transferability of the certificate and the
                  shares of stock represented hereby are subject to
                  the terms and conditions (including forfeiture) of
                  the St. Jude Medical, Inc. 2000 Stock Plan and an
                  Agreement entered into between the registered owner
                  and the Company.'

                  (ii) The Committee shall require that the stock certificates
         evidencing such shares be held in custody by the Company until the
         restrictions thereon shall have lapsed, and that, as a condition of any
         Restricted Stock award, the participant shall have delivered a stock
         power endorsed in blank, relating to the Stock covered by such award.

         (c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:

                  (i) Subject to the provisions of this Plan and the award
         agreement, during a period set by the Committee commencing with the
         date of such award (the 'Restriction Period'), the participant shall
         not be permitted to sell, transfer, pledge or assign shares of
         Restricted Stock awarded under the Plan. Within these limits, the
         Committee may provide for the lapse of such restrictions in
         installments where deemed appropriate.

                  (ii) Except as provided in paragraph (c) (i) of this Section
         7, the participant shall have, with respect to the shares of Restricted
         Stock, all of the rights of a shareholder of the Company, including the
         right to vote the shares and the right to receive any cash dividends.
         The Committee, in its sole discretion, may permit or require the
         payment of cash dividends to be deferred and, if the Committee so
         determines, reinvested in additional shares of Restricted Stock to the
         extent shares are available under Section 3. Certificates for shares of
         unrestricted Stock shall be delivered to the grantee promptly after,
         and only after, the period of forfeiture shall have expired without
         forfeiture in respect of such shares of Restricted Stock.

                  (iii) Subject to the provisions of the award agreement and
         paragraph (c) (iv) of this Section 7, upon termination of employment
         for any reason during the Restriction Period, all shares still subject
         to restriction shall be forfeited by the participant.

                  (iv) In the event of special hardship circumstances of a
         participant whose employment is terminated (other that for Cause),
         including death, Disability or Retirement, or in the event of an
         unforeseeable emergency of a participant still in


                                       10



         service, the Committee may, in its sole discretion, when it finds that
         a waiver would be in the best interest of the Company, waive in whole
         or in part any or all remaining restrictions with respect to such
         participant's shares of Restricted Stock.

                  (v) Notwithstanding the foregoing, all restrictions with
         respect to any participant's shares of Restricted Stock shall lapse, on
         the date determined by the Committee, prior to, but in no event more
         that sixty (60) days prior to, the occurrence of any of the following
         events: (i) dissolution or liquidation of the Company, other than in
         conjunction with a bankruptcy of the Company or any similar occurrence,
         (ii) any merger, consolidation, acquisition, separation,
         reorganization, or similar occurrence, where the Company will not be
         the surviving entity or (iii) the transfer of substantially all of the
         assets of the Company or 50% or more of the outstanding Stock of the
         Company.

         SECTION 8. Amendments and Termination.

         The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option theretofore granted, without
the optionee's or participant's consent, or (ii) which without the approval of
the shareholders of the Company would cause the Plan to no longer comply with
Rule 16b-3 under the Securities Exchange Act of 1934, Section 422 of the Code or
any other regulatory requirements.

         The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively to the extent such amendment is
consistent with the terms of this Plan, but no such amendment shall impair the
rights of any holder without his or her consent except to the extent authorized
under the Plan. However, the Committee may not reprice options, either by
lowering the exercise price of outstanding options or canceling outstanding
options and granting replacement options with lower exercise prices, without
shareholder approval.

         SECTION 9. Unfunded Status Of Plan.

         The Plan is intended to constitute an 'unfunded' plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.


                                       11



         SECTION 10. General Provisions.

         (a) The Committee may require each person purchasing shares pursuant to
a Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.

         All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

         (b) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any Subsidiary
any right to continued employment with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company, Parent
Corporation or a Subsidiary to terminate the employment of any of its employees
at any time.

         (c) Each participant shall, no later than the date as of which any part
of the value of an award first becomes includible as compensation in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company, Parent Corporation
and a Subsidiary shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the participant.
With respect to any award under the Plan, if the terms of such award so permit,
a participant may elect by written notice to the Company to satisfy part or all
of the withholding tax requirements associated with the award by (i) authorizing
the Company to retain from the number of shares of Stock that would otherwise be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock already owned by the participant, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
participant under this Section 9(c). Any such election shall be in accordance
with, and subject to, applicable tax and securities laws, regulations and
rulings.


                                       12



         SECTION 11. Effective Date of Plan

         The Plan shall be effective on March 8, 2000 (the date of approval by
the Board of Directors), subject to the approval by shareholders of the Company.
If the Plan is not so approved by the shareholders on or before one year after
this Plan's adoption by the Board of Directors, this Plan shall not come into
effect. The offering of the shares hereunder shall be also subject to the
effecting by the Company of any registration or qualification of the shares
under any federal or state law or the obtaining of the consent or approval of
any governmental regulatory body which the Company shall determine, in its sole
discretion, is necessary or desirable as a condition to or in connection with,
the offering or the issue or purchase of the shares covered thereby. The Company
shall make every reasonable effort to effect such registration or qualification
or to obtain such consent or approval.


                                       13