Employment Agreement - St. Jude Medical Inc. and Ronald A. Matricaria


November 8, 1996


Mr. Ronald A. Matricaria
[ADDRESS OMITTED]


         Re:      RONALD A. MATRICARIA - SUCCESSION PLANNING

Dear Ron:

I am pleased to outline for you the recommendations made by the Compensation
Committee, and subsequently approved by the Board, in connection with a revised
compensation program offered to you in exchange for extending your existing
employment agreement with the Company for a period of five years.

The Board approved the following changes in your compensation:

1) BASE SALARY. Effective January 1, 1997, you shall receive a base salary at
the rate of Seven Hundred Fifty Thousand Dollars ($750,000) per annum, payable
in bi-weekly installments.

2) BONUS. Bonus compensation payable to you will remain the same, that is, the
opportunity to earn 100% of base salary each fiscal year upon achievement of
established targets to be mutually agreed upon by yourself and the Board of
Directors.

3)       STOCK OPTIONS.

         (a)      You will be granted a non-qualified option to purchase 236,000
                  shares of the Company's common stock under the 1991 Stock
                  Plan. These shares will be exercisable at the rate of 25% per
                  year on the next four anniversary dates from July 16, 1996.
                  The purchase price of the shares of common stock covered by
                  this option shall be the fair market value on July 16, 1996.
                  [Note: The July 16, 1996, fair market value was $31.375 as
                  determined by the average of the high and low trades on July
                  16, 1996].

         (b)      You will be granted a non-qualified option to purchase 260,000
                  shares of the Company's common stock under the 1994 Stock
                  Option Plan. These shares will be exercisable at the rate of
                  25% per year on the next four anniversary dates from July 16,
                  1996. The purchase price of the shares of common stock covered
                  by this option shall be the fair market value on July 16,
                  1996. [Note: The July 16, 1996, fair market value was $31.375
                  as determined by the average of the high and low trades on
                  July 16, 1996].




MR. RONALD A. MATRICARIA
PAGE 2
NOVEMBER 8, 1996


         (c)      You will be granted a non-qualified option to purchase 500,000
                  shares of the Company's common stock subject to shareholder
                  approval. These shares will be exercisable at the rate of 25%
                  per year on the next four anniversary dates from July 16,
                  1996. The purchase price of the shares of common stock covered
                  by this option shall be $31.375, the fair market value on July
                  16, 1996. [Note: The July 16, 1996, fair market value was
                  $31.375 as determined by the average of the high and low
                  trades on July 16, 1996].


         (d)      You will be granted a non-qualified option to purchase 500,000
                  shares of the Company's common stock subject to shareholder
                  approval. The purchase price of the shares of common stock
                  covered by this option shall be the fair market value on July
                  16, 1996. [Note: The July 16, 1996, fair market value was
                  $31.375 as determined by the average of the high and low
                  trades on July 16, 1996].

                  The right to exercise the option shall occur in accordance
                  with the following schedule:

                                   PERFORMANCE STOCK OPTIONS
                                ACCELERATED VESTING SCHEDULING
                     (BASE WILL BE THE FAIR MARKET VALUE ON JULY 16, 1996)
                  -------------------- -------------- ----------------------

                      FINAL TRADING      STOCK PRICE      OPTIONS VESTING
                     DAYS FOR YEARS*        TARGET          PERCENTAGE
                  -------------------- -------------- ----------------------

                          1997                $37.65            20%
                  -------------------- -------------- ----------------------

                          1998                $45.18            20%
                  -------------------- -------------- ----------------------

                          1999                $54.22            20%
                  -------------------- -------------- ----------------------

                          2000                $62.35            20%
                  -------------------- -------------- ----------------------

                          2001                $71.70            20%
                  -------------------- -------------- ----------------------

Note: The 'stock price target' section of the grid was completed by using the
fair market value on July 16, 1996 and applying the formula for share increases
set by the Committee (20% increases during the first three periods and 15% in
years 4 and 5).




MR. RONALD A. MATRICARIA
PAGE 3
NOVEMBER 8, 1996


*Exercise of Option. This Option shall become exercisable if the arithmetic mean
closing prices of the Common Stock as reported on NASDAQ-NMS for all the trading
days of December of the calendar year noted above meets or exceeds the Stock
Price Target set forth above.

If the Stock Price Target for a calendar year is not met or exceeded in that
year, the Shares which would have been exercisable will carry forward to the
next subsequent calendar year and will become exercisable if subsequent year
Stock Price Targets are achieved..

The number of Shares which may be exercisable will be accelerated if the
arithmetic mean of the stock price in December of a year meets or exceeds the
Stock Price Target for a subsequent year(s).

In the event the above performance levels are not achieved, this Option will
become fully exercisable on the 16th day of July, 2006, if you remain as an
employee or as a board member of the Company.

4) RESTRICTED STOCK. You will be granted a total of 50,000 shares of the
Company's $0.10 par value common stock (shares) under the St. Jude Medical 1989
Restricted Stock Plan. The shares will be subject to certain restrictions during
the restriction period enumerated in the Restricted Stock Agreement.
Restrictions will lapse on twenty-five percent of the shares on each annual
anniversary date from July 16, 1996.

5) SPLIT DOLLAR LIFE INSURANCE. The Committee hereby approves the adoption of a
$3,000,000 split dollar life or similar life insurance policy for you.

6) CHANGE OF CONTROL AGREEMENT. Your original change of control agreement will
be renewed. In addition, a new change of control agreement will be entered
providing you with a payment of $10,000,000 upon a change of control as defined
in your existing change of control agreement and regardless of whether he
remains employed by the Company or is terminated subsequent to a change in
control.

7) USE OF COMPANY PLANE. The Company finds that it is in the best interest of
the Company, for both security reasons and time management reasons, that you and
your immediate family from time-to-time use the Company plane for personal, as
well as business use. The Company will be responsible for payment of any tax due
for such personal use.

8) ST. JUDE MEDICAL, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND TRUST
(SERP). In 1993, the Company established a nonqualified supplemental retirement
plan which is subject to a substantial risk of forfeiture in the event you leave
the Company prior to October 1, 1996. As further consideration for the amended
terms of your employment agreement and to tie the value and security of your
retirement income to your continued commitment to the financial success of the
Company, St. Jude shall before October 1, 1996, terminate and liquidate the SERP
and in lieu thereof make a discretionary contribution under the St. Jude
Medical, Inc. Management Savings Plan (MSP), in the amount of $3,460,000 to be
held and distributed in accordance with the terms of the MSP.




MR. RONALD A. MATRICARIA
PAGE 4
NOVEMBER 8, 1996


9) STOCK OPTION AMENDMENTS. If you cease to be an employee, but remain as a
director, your outstanding stock options will be amended to permit the exercise
of any vested shares for the original option term.

If you retire from the Company or from the Board (with consent by the Committee)
any stock options held may thereafter be exercised to the extent they were
exercisable at the time of retirement, up to one year from the date of such
retirement, or the expiration of the stated terms of the options, whichever
period is shorter.

Congratulations Ron on the success you have achieved through your outstanding
leadership for the Company during your short tenure. You have significantly
reduced the risk profile through diversification and improved the growth profile
of St. Jude Medical thereby significantly enhancing shareholder value.

Onward and upward!

Best Regards,


/s/ WILLIAM R. MILLER
William R. Miller
Chairman, Compensation Committee

WRM:kj