Management Savings Plan - St. Jude Medical Inc.


                                ST. JUDE MEDICAL
                            MANAGEMENT SAVINGS PLAN

                               TABLE OF CONTENTS

                                                                          Page

                                   ARTICLE I
                             TITLE AND DEFINITIONS

      1.1 -   Title. . . . . . . . . . . . . . . . . . . . . . . . . . .   1
      1.2 -   Definitions. . . . . . . . . . . . . . . . . . . . . . . .   1

                                   ARTICLE II
                                 PARTICIPATION

      2.1 -   Participation. . . . . . . . . . . . . . . . . . . . . . .   6

                                  ARTICLE III
                               DEFERRAL ELECTIONS

      3.1 -   Elections to Defer Compensation. . . . . . . . . . . . . .   7
      3.2 -   Investment Elections . . . . . . . . . . . . . . . . . . .   9

                                   ARTICLE IV
                                    ACCOUNTS

      4.1 -   Deferral Account . . . . . . . . . . . . . . . . . . . . .  10
      4.2 -   Company Contribution Account . . . . . . . . . . . . . . .  11

                                   ARTICLE V
                                    VESTING

      5.1 -   Deferral Account . . . . . . . . . . . . . . . . . . . . .  12
      5.2 -   Company Contribution Account . . . . . . . . . . . . . . .  12

                                   ARTICLE VI
                                 DISTRIBUTIONS

      6.1 -   Distribution of Deferred Compensation. . . . . . . . . . .  13
      6.2 -   Forfeitures. . . . . . . . . . . . . . . . . . . . . . . .  15
      6.3 -   Early Distributions. . . . . . . . . . . . . . . . . . . .  15
      6.4 -   Inability to Locate Participant. . . . . . . . . . . . . .  16
      6.5 -   Trust. . . . . . . . . . . . . . . . . . . . . . . . . . .  16

                                     Page i


                                  ARTICLE VII
                                 ADMINISTRATION

      7.1 -   Committee. . . . . . . . . . . . . . . . . . . . . . . . .  18
      7.2 -   Committee Action . . . . . . . . . . . . . . . . . . . . .  18
      7.3 -   Powers and Duties of the Committee . . . . . . . . . . . .  18
      7.4 -   Construction and Interpretation. . . . . . . . . . . . . .  19
      7.5 -   Information. . . . . . . . . . . . . . . . . . . . . . . .  19
      7.6 -   Compensation, Expenses and Indemnity . . . . . . . . . . .  20
      7.7 -   Quarterly Statements . . . . . . . . . . . . . . . . . . .  20
      7.8 -   Disputes . . . . . . . . . . . . . . . . . . . . . . . . .  20

                                  ARTICLE VIII
                                 MISCELLANEOUS

      8.1 -   Unsecured General Creditor . . . . . . . . . . . . . . . .  22
      8.2 -   Restriction Against Assignment . . . . . . . . . . . . . .  22
      8.3 -   Withholding. . . . . . . . . . . . . . . . . . . . . . . .  23
      8.4 -   Amendment, Modification, Suspension or Termination . . . .  23
      8.5 -   Governing Law. . . . . . . . . . . . . . . . . . . . . . .  23
      8.6 -   Receipt or Release . . . . . . . . . . . . . . . . . . . .  23
      8.7 -   Payments on Behalf of Persons Under Incapacity . . . . . .  24
      8.8 -   Headings, etc. Not Part of Agreement . . . . . . . . . . .  24

                                    Page ii


                                ST. JUDE MEDICAL
                            MANAGEMENT SAVINGS PLAN

     WHEREAS,  St. Jude  Medical,  Inc. (the  'Company')  desires to establish a
deferred  compensation plan to provide  supplemental  retirement income benefits
for a select  group of  management  and  highly  compensated  employees  through
deferrals of salary and bonuses, effective as of February 1, 1995; and

     WHEREAS,  it is  believed  that the  adoption  of this plan  providing  for
deferred  compensation  at the  election of each  executive  will be in the best
interests of the Company;

     NOW, THEREFORE, it is hereby declared as follows:


                                   ARTICLE I
                             TITLE AND DEFINITIONS

1.1 - TITLE.

     This Plan shall be known as the St. Jude Medical Management Savings Plan.

1.2 - DEFINITIONS.

     Whenever the  following  words and phrases are used in this Plan,  with the
first letter capitalized, they shall have the meanings specified below.

     'Account' or 'Accounts' shall mean a Participant's  Deferral Account and/or
Company Contribution Account.

     'Beneficiary'  or  'Beneficiaries'   shall  mean  the  person  or  persons,
including a trustee, personal representative or other fiduciary, last designated
in writing by a Participant  in accordance  with  procedures  established by the
Committee  to  receive  the  benefits  specified  hereunder  in the event of the
Participant's  death  (other  than  the  death  benefits  described  in  Section
6.1(c)(1)  unless such person is designated  as a  beneficiary  under the Policy
described therein).  No beneficiary  designation shall become effective until it
is filed with the Committee.  If there is no Beneficiary  designation in effect,
then the person  designated  to receive the death  benefit  specified in Section
6(c)(1) shall be the Beneficiary. If there is no such designation or if there is
no surviving designated Beneficiary,  then  the  Participant's  surviving spouse

                                     Page 1


shall be the  Beneficiary.  If there  is no  surviving  spouse  to  receive  any
benefits payable in accordance with the preceding  sentence,  the duly appointed
and currently acting personal  representative of the participant's estate (which
shall include either the Participant's  probate estate or living trust) shall be
the Beneficiary.  In any case where there is no such personal  representative of
the  Participant's  estate duly appointed and acting in that capacity  within 90
days after the  Participant's  death (or such  extended  period as the Committee
determines is reasonably  necessary to allow such personal  representative to be
appointed,  but not to exceed  180 days  after the  Participant's  death),  then
Beneficiary  shall  mean the person or persons  who can verify by  affidavit  or
court order to the  satisfaction of the Committee that they are legally entitled
to receive the benefits specified hereunder.  In the event any amount is payable
under the Plan to a minor,  payment shall not be made to the minor,  but instead
be paid (a) to that person's living  parent(s) to act as custodian,  (b) if that
person's parents are then divorced, and one parent is the sole custodial parent,
to such custodial  parent, or (c) if no parent of that person is then living, to
a custodian  selected by the Committee to hold the funds for the minor under the
Uniform  Transfers or Gifts to Minors Act in effect in the jurisdiction in which
the minor  resides.  If no parent is living  and the  Committee  decides  not to
select another  custodian to hold the funds for the minor, then payment shall be
made to the duly appointed and currently  acting  guardian of the estate for the
minor or, if no  guardian  of the  estate  for the minor is duly  appointed  and
currently  acting  within 60 days  after the date the  amount  becomes  payable,
payment shall be deposited with the court having jurisdiction over the estate of
the minor.

     'Board of  Directors'  or 'Board'  shall mean the Board of Directors of St.
Jude Medical, Inc.

     'Bonus' shall mean any cash incentive compensation payable to a Participant
in  addition  to the  Participant's  Salary  prior to  reduction  for any salary
deferral  contributions  to a plan qualified under Section 125 or Section 401(k)
of the Code.

     'Code' shall mean the Internal Revenue Code of 1986, as amended.

     'Committee'  shall mean the Committee  appointed by the Board to administer
the Plan in accordance with Article VII.

     'Company' shall mean St. Jude Medical,  Inc., and, effective April 1, 1995,
Pacesetter,  Inc. and any  successor  corporations.  Company  shall include each
corporation which is a member of a controlled group of corporations  (within the
meaning of Section  414(b) of the Code) of which St. Jude Medical is a component
member,  if the Board provides that such  corporation  shall  participate in the
Plan.

                                     Page 2


     'Company   Contribution   Account'  shall  mean  the  bookkeeping   account
maintained by the Committee for each Participant that is credited with an amount
equal to the  Company  Contribution  Amount,  if any,  and  earnings  or  losses
pursuant to Section 4.2.

     'Company  Contribution  Amount' shall mean, for each Participant for a Plan
Year the sum of the following amounts:

          (1) An amount equal to the Participant's  Compensation  deferred under
     this Plan for a Plan Year,  provided  that the  maximum  amount  under this
     clause  (1)  shall  not  exceed  the  excess  of  3% of  the  Participant's
     Compensation paid that Plan Year over the Company's  matching  contribution
     that would have been made under the Profit Sharing Plan for the Participant
     if the Participant  made the maximum  Section 401(k) deferral  permitted to
     highly compensated employees under the Profit Sharing Plan. For purposes of
     this 3% limitation,  Compensation  shall mean the Salary paid during a Plan
     Year plus the Bonus paid in that Plan Year,  even though such Bonus is paid
     with respect to services performed in a prior Plan Year.

          (2) An amount equal to A multiplied by B where:

              A equals the excess of the Participant's Compensation for the Plan
              Year over the Code Section 401(a)(17) limit for the Plan Year, and

              B equals the rate of  contributions  made by the Company,  if any,
              with respect to compensation in excess of the social security wage
              base under the Profit Sharing Plan.

                                     Page 3


              By way of  example,  assume  a  Participant  has  Compensation  of
              $180,000  in 1995  and the  Employer  contribution  to the  Profit
              Sharing Plan equals 5% of compensation  (below the social security
              wage  base)  and  10% of  compensation  in  excess  of the  social
              security wage base.  The Company  Contribution  Amount shall equal
              10% of ($180,000 minus $150,000), or $3,000.

          (3) An additional discretionary amount allocated to Participants under
     this Plan,  as  determined  by the  Board.  Such  amount  may  differ  from
     Participant  to  Participant  (both in dollar amount and as a percentage of
     compensation).

Notwithstanding  the above,  in the case of a Participant who is not eligible to
participate  in the Profit Sharing Plan, the amounts set forth in clause (1) and
(2) above shall be zero.

     'Compensation'  shall mean the Salary  and Bonus  that the  Participant  is
entitled to for services rendered to the Company.

     'Deferral  Account' shall mean the  bookkeeping  account  maintained by the
Committee  for each  Participant  that is credited with amounts equal to (1) the
portion of the  Participant's  Salary  that he or she  elects to defer,  (2) the
portion  of the  Participant's  Bonus  that he or she  elects to defer,  and (3)
interest pursuant to Section 4.1.

     'Distributable  Amount' shall mean the amount  credited to a  Participant's
Deferral  Account  and the vested  portion of the amount  credited to his or her
Company Contribution Account.

     'Effective Date' shall mean February 1, 1995.

     'Eligible  Employee' shall mean each executive officer of the Company whose
Compensation  (as described in the next  sentence)  exceeds  $150,000.  For this
purpose,  Compensation  shall mean the Salary  payable for the current Plan Year
plus the Bonus paid in the prior Plan Year (with  respect to services  performed
in the  second  preceding  Plan  Year).  Once an  executive  officer  becomes an
Eligible Employee,  such individual shall remain an Eligible Employee as long as
he or she remains an executive officer unless the individual's  Compensation for
a subsequent Plan Year does not exceed $100,000.

                                     Page 4


     'Fund' or 'Funds'  shall mean one or more of the mutual  funds or contracts
selected by the Committee pursuant to Section 3.2(b).

     'Initial  Election  Period' for an Eligible  Employee shall mean the 30-day
period  following the later of January 1, 1995 (April 1, 1995,  for employees of
Pacesetter, Inc.) or the Eligible Employee's date of hire.

     'Interest  Rate' shall mean, for each Fund, an amount equal to the net rate
of gain or loss on the assets of such Fund during each month.

     'Participant' shall mean any Eligible Employee who becomes a Participant in
accordance with Section 2.1.

     'Payment  Eligibility Date' shall mean the first day of the month following
the end of the calendar quarter in which a Participant  terminates employment or
dies.

     'Plan'  shall mean the St. Jude Medical  Management  Savings Plan set forth
herein, now in effect, or as amended from time to time.

     'Plan Year' shall mean the 12 consecutive month period beginning on January
1, provided,  however,  that the first Plan Year shall be a short year beginning
on February 1, 1995 and ending on December 31, 1995.

     'Profit  Sharing  Plan'  shall mean the St.  Jude  Medical  Profit  Sharing
Employee Savings Plan.

     'Salary'  shall mean the  Participant's  base salary prior to reduction for
any salary  deferral  contributions  to a plan  qualified  under  Section 125 or
Section 401(k) of the Code.

                                     Page 5



                                   ARTICLE II
                                 PARTICIPATION

2.1 - PARTICIPATION.

     An Eligible Employee shall become a Participant in the Plan by (1) electing
to defer a portion of his or her  Compensation  in accordance  with Section 3.1,
and (2) filing a life insurance  application form along with his or her deferral
election form.

                                     Page 6



                                  ARTICLE III
                               DEFERRAL ELECTIONS

3.1 - ELECTIONS TO DEFER COMPENSATION.

     (a) Initial Election Period. Subject to Section 2.1, each Eligible Employee
may elect to defer  Compensation  by filing with the  Committee an election that
conforms to the  requirements  of this  Section  3.1, on a form  provided by the
Committee, no later than the last day of his or her Initial Election Period.

     (b) General Rule. The amount of Compensation which an Eligible Employee may
elect to defer is as follows:

         (1)  Any percentage of Salary up to 50%; and/or

         (2)  Any percentage or dollar amount of Bonus up to 100%;

provided,   however,   that  no  election  shall  be  effective  to  reduce  the
Compensation paid to an Eligible Employee for a calendar year to an amount which
is less than the Social Security Wage Base for such calendar year.

     (c) Minimum Deferrals. For each year during which an Eligible Employee is a
Participant,  the minimum  amount that may be elected under Section 3.1(b) is 5%
of the Participant's  Salary.  Such minimum may be satisfied by deferring Salary
and/or the Bonus  payable for services  rendered for such Plan Year (even though
it is not paid until the next Plan Year);  provided  that if Salary is deferred,
the minimum  deferral is 5%.  Accordingly,  if no Salary is deferred  for a Plan
Year and the total  amount of the Bonus  elected to be deferred  with respect to
that  Plan Year is in fact less  than 5% of the  Participant's  Salary,  then no
portion of the Bonus shall be deferred.

     (d) Effect of Initial Election. An election to defer Compensation during an
Initial  Election Period shall be effective with respect to Salary earned during
the first pay period  beginning  after the end of the Initial  Election  Period.
Notwithstanding  anything in paragraphs (a), (d), (g) or (f) of this Section 3.1
to the contrary,  for the first Plan Year only, an Eligible  Employee may elect,
no later than January 31, 1995 (March 31, for Pacesetter,  Inc.  employees),  to
defer any Bonus which is subsequently  declared and paid for services  performed
during the Company's fiscal year ending on December 31, 1995.

                                     Page 7


     (e) Duration of Salary Deferral Election. Any Salary deferral election made
under paragraph (a) or paragraph (g) of this Section 3.1 shall remain in effect,
notwithstanding  any  change  in the  Participant's  Salary,  until  changed  or
terminated  in  accordance  with the  terms  of this  paragraph  (e);  provided,
however,  that such  election  shall  terminate  for any Plan Year for which the
Participant  is not an  Eligible  Employee.  Subject  to  the  minimum  deferral
requirement  of  Section  3.1(c)  and  the  limitations  of  Section  3.1(b),  a
Participant  may  increase,  decrease or  terminate  his or her Salary  deferral
election,  effective for Salary earned  during pay periods  beginning  after any
January  1, by  filing a new  election,  in  accordance  with the  terms of this
Section 3.1, with the Committee on or before the preceding December 1.

     (f) Duration of Bonus Deferral  Election.  Any Bonus deferral election made
under  paragraph (a) or paragraph  (g) of this Section 3.1 shall be  irrevocable
and,  except as provided in paragraph (a), shall apply only to the Bonus payable
with respect to services  performed  during the Plan Year for which the election
is made.  For each  subsequent  Plan Year,  an Eligible  Employee may make a new
election,  subject to the  limitations set forth in this Section 3.1, to defer a
percentage of his or her Bonus.  Such election shall be on forms provided by the
Committee  and shall be made on or before the December 1 preceding the Plan Year
for which the election is to apply.

     (g) Elections  other than  Elections  during the Initial  Election  Period.
Subject to the minimum deferral requirement of paragraph (c) above, any Eligible
Employee  who fails to elect to defer  compensation  during  his or her  Initial
Election Period may subsequently become a Participant, and any Eligible Employee
who has  terminated  a prior Salary  deferral  election may elect to again defer
Salary,  by filing an election,  on a form provided by the  Committee,  to defer
Compensation  as described in paragraph  (b) above.  An election to defer Salary
and/or  Bonus must be filed on or before  December 1 and will be  effective  for
Salary earned during pay periods beginning after the following January 1 and the
Bonus paid with respect to services  performed in the Plan Year beginning on the
following January 1.

3.2 - INVESTMENT ELECTIONS.

     (a) At the time of making the deferral elections  described in Section 3.1,
the Participant shall designate,  on a form provided by the Committee,  which of
the following types of mutual funds or contracts the Participant's  Account will
be deemed to be invested in for purposes of  determining  the amount of earnings
to be credited to that Account:

         1)   Money Market Fund

                                     Page 8


         2)   Common Stock Fund
         3)   International Equity Fund
         4)   Balanced Fund

In making the  designation  pursuant to this Section 3.2,  the  Participant  may
specify that all or any  multiple of his Deferral  Account (in excess of 10%) be
deemed to be invested in one or more of the types of mutual  funds or  contracts
listed above. Effective as of the end of any calendar quarter, a Participant may
change the designation  made under this Section 3.2 by filing an election,  on a
form  provided  by the  Committee,  at  least  30 days  prior to the end of such
quarter.  If a Participant fails to elect a type of fund under this Section 3.2,
he or she shall be deemed to have elected the Money Market Fund.

     (b)  Although the  Participant  may  designate  the type of mutual funds or
contracts in paragraph (a) above,  the Committee shall select from time to time,
in its sole discretion, a commercially available fund or contract of each of the
types  described in paragraph  (a) above to be the Funds.  The Interest  Rate of
each such commercially available fund or contract shall be used to determine the
amount of  earnings or losses to be credited  to  Participants'  Accounts  under
Article IV.

                                     Page 9



                                   ARTICLE IV
                                    ACCOUNTS

4.1 - DEFERRAL ACCOUNT.

     The  Committee  shall  establish  and maintain a Deferral  Account for each
Participant under the Plan. Each Participant's Deferral Account shall be further
divided into separate  subaccounts  ('mutual fund  subaccounts'),  each of which
corresponds to a mutual fund or contract elected by the Participant  pursuant to
Section 3.2(a). A Participant's Deferral Account shall be credited as follows:

     (a) As of the last day of each month, the Committee shall credit the mutual
fund subaccounts of the  Participant's  Deferral Account with an amount equal to
Salary deferred by the  Participant  during each pay period ending in that month
in accordance with the Participant's election under Section 3.2(a); that is, the
portion of the Participant's deferred Salary that the Participant has elected to
be deemed to be invested  in a certain  type of mutual fund shall be credited to
the mutual fund subaccount corresponding to that mutual fund;

     (b) As of the last day of the  month in which the  Bonus or  partial  Bonus
would have been paid, the Committee shall credit the mutual fund  subaccounts of
the  Participant's  Deferral  Account with an amount equal to the portion of the
Bonus deferred by the Participant's  election under Section 3.2(a); that is, the
portion of the Participant's  deferred Bonus that the Participant has elected to
be deemed to be invested in a  particular  type of mutual fund shall be credited
to the mutual fund subaccount corresponding to that mutual fund; and

     (c) As of the last day of each  month,  each mutual  fund  subaccount  of a
Participant's  Deferral  Account shall be credited with earnings or losses in an
amount equal to that  determined  by  multiplying  the balance  credited to such
mutual fund subaccount as of the last day of the preceding month by the Interest
Rate for the  corresponding  Fund  selected by the  Company  pursuant to Section
3.2(b).

4.2 - COMPANY CONTRIBUTION ACCOUNT.

     The Committee shall establish and maintain a Company  Contribution  Account
for each Participant  under the Plan. Each  Participant's  Company  Contribution
Account  shall  be  further  divided  into  separate  mutual  fund   subaccounts
corresponding to the mutual fund or contract elected by the Participant pursuant

                                    Page 10


to  Section  3.2(a).  A  Participant's  Company  Contribution  Account  shall be
credited as follows:

     (a) As of the last day of each Plan Year,  the  Committee  shall credit the
mutual fund subaccounts of the Participant's  Company  Contribution Account with
an amount equal to the Company  Contribution  Amount, if any, applicable to that
Participant;  that is, the portion of the Company  Contribution  Amount, if any,
which the  Participant  elected to be deemed to be invested in a certain type of
mutual fund shall be credited to the corresponding mutual fund subaccount; and

     (b) As of the last day of each  month,  each mutual  fund  subaccount  of a
Participant's  Company  Contribution  Account shall be credited with earnings or
losses in an amount equal to that determined by multiplying the balance credited
to such mutual fund  subaccount as of the last day of the preceding month by the
Interest Rate for the  corresponding  Fund  selected by the Company  pursuant to
Section 3.2(b).

                                    Page 11



                                   ARTICLE V
                                    VESTING

5.1 - DEFERRAL ACCOUNT.

     A Participant's Deferral Account shall be 100% vested at all times.

5.2 - COMPANY CONTRIBUTION ACCOUNT.

     (a) A  Participant's  Company  Contribution  Account  shall vest and become
nonforfeitable as follows:

         Years of Vesting Service Earned
       by the Participant Under the Profit
         Sharing Plan (Including Vesting
          Service Earned Prior to 1995)            Percentage Vested

                  Less than 2                               0%
                      2                                    25%
                      3                                    50%
                      4                                    75%
                      5 or more                           100%

                                    Page 12



                                   ARTICLE VI
                                 DISTRIBUTIONS

6.1 - DISTRIBUTION OF DEFERRED COMPENSATION.

     (a) In the case of a Participant who terminates employment with the Company
and who either (i) terminates as a result of a long-term  disability (as defined
in the Company's long-term disability plan for executives),  or (ii) who is 100%
vested  in his  or  her  Company  Contribution  Account  under  this  Plan,  the
Distributable  Amount shall be paid to the  Participant  (and after his death to
his  or  her  Beneficiary)  in  the  form  of a  substantially  equal  quarterly
installments  over 15 years  beginning on his or her Payment  Eligibility  Date.
Notwithstanding the foregoing, a Participant described in the preceding sentence
may elect one of the following optional forms of distribution  provided that his
or her  election is filed with the  Committee  at least one year prior to his or
her  termination  of  employment  or, if later,  January  31, 1995 (March 31 for
Pacesetter, Inc. employees):

         (1) a cash lump sum payable on the  Participant's  Payment  Eligibility
     Date, and

         (2) substantially  equal quarterly  installments over five or ten years
     beginning on the Participant's Payment Eligibility Date.

Notwithstanding this subsection, if the Distributable Amount is $25,000 or less,
the  Distributable  Amount shall  automatically  be distributed in the form of a
cash lump sum on the Participant's  Payment  Eligibility Date. The Participant's
Accounts shall continue to be credited monthly with earnings pursuant to Section
4.1 of the Plan until all amounts credited to his or her Accounts under the Plan
have been distributed. For all purposes under this Plan, a Participant shall not
be considered  terminated from employment if the Participant remains employed by
a member of the Company's  controlled group of corporations  (within the meaning
of Section 414(b) of the Code),  even if such member is not a Company.  However,
if the Employee is employed by a Company or a member of its controlled group and
such entity ceases to be a member of such controlled group as a result of a sale
or other corporate  reorganization,  such sale or other corporate reorganization
shall be treated as termination of employment unless immediately  following such
event and without any break in employment the  Participant  remains  employed by
Company  or another  corporation  which is a member of its  controlled  group of
corporations or the former member of the controlled group assumes  liability for
the benefit of the Participant.

                                    Page 13


     (b) In the case of a Participant  who terminates  employment  prior to 100%
vesting in his or her Company  Contribution Account and for reasons other than a
long-term  disability or death,  the  Distributable  Amount shall be paid to the
Participant  in the  form  of a cash  lump  sum  on  the  Participant's  Payment
Eligibility Date.

     (c) In the case of a  Participant  who dies while  employed by the Company,
the following benefits shall be provided:

         (1) That  portion  of the death  benefit of any life  insurance  policy
     purchased  by the trustee of the Trust  described  in Section 6.5 to insure
     the life of the Participant (the 'Policy') which is equal to:

              (x) in the case of Participants  not employed by Pacesetter,  Inc.
              two  times  the sum of the  Participant's  Salary in effect at the
              time the  Participant  dies plus the  Participant's  Bonus paid or
              payable for services  performed in the Plan Year prior to the Plan
              Year in which  Participant dies or (y) in the case of Participants
              employed by Pacesetter,  Inc., three times the Salary in effect at
              the time the Participant dies,

     shall  be  paid  to  Participant's  beneficiary  under  the  Policy  by the
     insurance company which issued the Policy. Any such Policy shall be subject
     to  certain   conditions  set  forth  in  a  'Split-Dollar  Life  Insurance
     Agreement'  between the Participant and the Company,  pursuant to which the
     Participant may designate a beneficiary  with respect to the portion of the
     

                                    Page 14


     Policy  proceeds  described  in the  preceding  sentence  in the  event the
     Participant  dies prior to  terminating  employment  with the Company.  The
     Participant  shall have the right to designate and change such  beneficiary
     (which need not be his  Beneficiary)  at any time on a form provided by and
     filed  with the  insurance  company.  If no such  form is on file  with the
     insurance company,  the insurance proceeds designated in this paragraph (1)
     shall be paid to the  Beneficiary.  The  benefit  payable  pursuant to this
     paragraph (1) shall only be paid if the insurance  company  agrees that the
     Participant  is  insurable  and  shall be  subject  to all  conditions  and
     exceptions set forth in the applicable  insurance  policy.  Notwithstanding
     the foregoing,  no benefit shall be payable  pursuant to this paragraph (1)
     if the Participant  dies within sixty days of the first day of the month in
     which  Compensation  is first  credited  to the  Participant's  Account.  A
     Participant  who is entitled to a death benefit  pursuant to this paragraph
     (1) shall not be entitled to any other group term life  insurance  benefits
     from the  Company  under  this Plan or any  other  policy  provided  by the
     Company.  Notwithstanding  any provision of this Plan or any other document
     to the contrary, neither the Trust nor Company shall have any obligation to
     pay the  Participant  or his  beneficiary  any  amounts  described  in this
     Section 6.1(c)(1); all such amounts due pursuant to Section 6.1(c)(1) shall
     be payable  solely from the  proceeds of the Policy,  if any.  Furthermore,
     neither the Trust nor the Company is obligated to maintain the Policies; no
     death benefit shall be payable  hereunder if the Trust has been notified by
     the Committee to discontinue the Policy for the  Participant.  In addition,
     no Policy shall be allocated to any Account.

         (2)  The  Distributable  Amount  shall  be  paid  to the  Participant's
     Beneficiary in a lump sum.

6.2 - FORFEITURES.

     When a Participant (or, in the case of his or her death, the  Participant's
Beneficiary) receives a distribution of benefits under this Plan, the portion of
his or her Company  Contribution Account which is not vested shall be forfeited,
and the Company  shall have no obligation to the  Participant  (or  Beneficiary)
with respect to such forfeited amount.

6.3 - EARLY DISTRIBUTIONS.

     Participant  shall be  permitted  to elect to withdraw  amounts  from their
Accounts  prior  to  termination   of  employment   with  the  Company   ('Early
Distributions'), subject to the following restrictions:

                                    Page 15


     (a) The  election to take an Early  Distribution  shall be made by filing a
form provided by and filed with the  Committee  prior to the end of any calendar
month.

     (b) The amount of the Early  Distribution  shall in all cases  equal 90% of
the  Distributable  Amount as of the end of the  calendar  month as of which the
distribution is to be made.

     (c) The amount  described in subsection (b) above shall be paid in a single
cash  lump sum as soon as  practicable  after the end of the  calendar  month in
which the Early Distribution election is made.

     (d) If a Participant receives an Early Distribution,  the remaining balance
of his or her Accounts  (including both the portion, if any, which is not vested
and 10% of the  Distributable  Amount)  shall be  permanently  forfeited and the
Company shall have no  obligation to the  Participant  or his  Beneficiary  with
respect to such forfeited amount.

     (e) If a Participant  receives an Early  Distribution,  the following rules
will apply for the balance of the Plan Year and for the following Plan Year: (i)
the  Participant  will be  ineligible  to  participate  in the  Plan,  (ii)  the
Participant will not receive any allocations of Company Contribution Amounts and
(iii) neither the Participant  (nor his Beneficiary or  beneficiaries)  shall be
entitled to death benefits under Section 6.1(c)(1) or (2).

6.4 - INABILITY TO LOCATE PARTICIPANT.

     In the event  that the  Committee  is unable  to  locate a  Participant  or
Beneficiary  within two years following the  Participant's  Payment  Eligibility
Date, the amount  allocated to the  Participant's  Deferral  Account and Company
Contribution  Amounts  shall  be  forfeited.  If,  after  such  forfeiture,  the
Participant  or  Beneficiary  later claims such  benefit,  such benefit shall be
reinstated  without interest or earnings,  provided that Section 6.2 shall still
apply.

                                    Page 16


6.5 - TRUST.

     (a) The  Company  shall  cause the  payment  of  benefits  under  this Plan
(excluding  amounts  described in Section  6.1(c)(1))  to be made in whole or in
part by the Trustee of the St. Jude Medical  Management Savings Plan Rabbi Trust
(the 'Trust') in accordance  with the provisions of this Section 6.5. As soon as
practicable  after the end of each Plan Year (but no later  than the tax  return
due date of the Company for such year),  the  Company  shall  contribute  to the
Trust  for each  Participant  an  amount  equal to the  amount  deferred  by the
Participant  for the  Plan  Year and the  Company  Contribution  Amount  for the
Participant for the Plan Year. The Company shall also contribute cash in amounts
approximately  equal to the 'cost of  insurance'  (as  defined  in each  Policy)
needed to fund the death benefits described in Section 6.1(c)(1);  provided that
such  obligation  shall not apply with respect to a Policy if (1) the  Committee
has directed to the Trust to discontinue  the Policy,  (2) the Participant is no
longer  employed by the Employer,  or (3) the  Participant  is not entitled to a
death benefit under the Policy  because he has taken an early  distribution  (as
described in Section 6.4 of the Plan).  Notwithstanding the foregoing,  prior to
the date the Policies are contributed to the Trust, the amounts described in the
preceding two sentences shall be used to pay premiums on the Policy, rather than
contributed to the Trust.

     (b) The Committee  shall direct the Trustee to pay the  Participant  or his
Beneficiary  at the time and in the amount  described  in Article VI  (excluding
amounts described in Section 6.1(c)(1)). In the event the amounts held under the
Trust are not sufficient to provide the full amount (excluding amounts described
in Section 6.1(c)(1)) payable to the Participant,  the Company shall pay for the
remainder of such amount at the time set forth in Article VI (excluding  amounts
described in Section 6.1(c)(1)).

                                    Page 17



                                  ARTICLE VII
                                 ADMINISTRATION


7.1 - COMMITTEE.

     A committee  shall be appointed by, and serve at the pleasure of, the Board
of Directors. The number of members comprising the Committee shall be determined
by the Board which may from time to time vary the number of members. A member of
the Committee may resign by delivering a written  notice of  resignation  to the
Board.  The Board may remove any member by  delivering  a certified  copy of its
resolution  of  removal  to such  member.  Vacancies  in the  membership  of the
Committee shall be filled promptly by the Board.

7.2 - COMMITTEE ACTION.

     The Committee  shall act at meetings by  affirmative  vote of a majority of
the members of the Committee.  Any action permitted to be taken at a meeting may
be taken  without a meeting if, prior to such action,  a written  consent to the
action is signed by all members of the  Committee  and such  written  consent is
filed with the  minutes of the  proceedings  of the  Committee.  A member of the
Committee  shall not vote or act upon any matter which relates solely to himself
or herself as a Participant.  The Chairman or any other member or members of the
Committee  designated  by the  Chairman  may  execute any  certificate  or other
written direction on behalf of the Committee.

7.3 - POWERS AND DUTIES OF THE COMMITTEE.

     (a) The Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be charged with the
general administration of the Plan, and shall have all powers necessary to
accomplish its purposes, including, but not by way of limitation, the following:

         (1)  To select  the funds or  contracts  to be the Funds in  accordance
              with Section 3.2(b) hereof;

         (2)  To construe and interpret the terms and provisions of this Plan;

                                    Page 18


         (3)  To compute and certify to the amount and kind of benefits  payable
              to Participants and their Beneficiaries;

         (4)  To  maintain   all  records   that  may  be   necessary   for  the
              administration of the Plan;

         (5)  To provide for the disclosure of all information and the filing or
              provision  of  all  reports  and   statements   to   Participants,
              Beneficiaries  or  governmental  agencies  as shall be required by
              law;

         (6)  To make and publish such rules for the  regulation of the Plan and
              procedures  for  the   administration  of  the  Plan  as  are  not
              inconsistent with the terms hereof;

         (7)  To  appoint  a plan  administrator  or  any  other  agent,  and to
              delegate  to them such  powers and duties in  connection  with the
              administration  of the Plan as the Committee may from time to time
              prescribe; and

         (8)  To take all  actions set forth in the Trust  agreement,  including
              determining whether to hold or discontinue the Policies.

7.4 - CONSTRUCTION AND INTERPRETATION.

     The  Committee  shall have full  discretion  to construe and  interpret the
terms and provisions of this Plan, which interpretation or construction shall be
final and binding on all parties,  including  but not limited to the Company and
any  Participant or Beneficiary.  The Committee shall  administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.

7.5 - INFORMATION.

     To enable the Committee to perform its functions,  the Company shall supply
full and timely  information  to the  Committee  on all matters  relating to the
Compensation of all Participants, their death or other cause of termination, and
such other pertinent facts as the Committee may require.

                                    Page 19


7.6 - COMPENSATION, EXPENSES AND INDEMNITY.

     (a) The members of the Committee shall serve without compensation for their
services hereunder.

     (b) The  Committee  is  authorized  at the expense of the Company to employ
such legal counsel as it may deem advisable to assist in the  performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company.

     (c) To the extent  permitted by  applicable  state law,  the Company  shall
indemnify and save harmless the Committee and each member thereof,  the Board of
Directors  and any delegate of the  Committee  who is an employee of the Company
against any and all expenses,  liabilities  and claims,  including legal fees to
defend against such  liabilities  and claims  arising out of their  discharge in
good  faith of  responsibilities  under or  incident  to the  Plan,  other  than
expenses and liabilities arising out of willful misconduct. This indemnity shall
not  preclude  such further  indemnities  as may be  available  under  insurance
purchased by the Company or provided by the Company  under any bylaw,  agreement
or otherwise, as such indemnities are permitted under state law.

7.7 - QUARTERLY STATEMENTS.

     Under procedures  established by the Committee, a Participant shall receive
a statement with respect to such Participant's  Accounts on a quarterly basis as
of each March 31, June 30, September 30 and December 31.

7.8 - DISPUTES.

     (a) Claim.

     A person who believes  that he or she is being denied a benefit to which he
or she is entitled under this Agreement  (hereinafter referred to as 'Claimant')
may file a written request for such benefit with the Employer, setting forth his
or her claim.  The request must be addressed to the President of the Employer at
its then principal place of business.

     (b) Claim Decision.

                                    Page 20


     Upon  receipt of a claim,  the Employer  shall  advise the Claimant  that a
reply will be forthcoming  within ninety (90) days and shall,  in fact,  deliver
such reply  within such  period.  The Employer  may,  however,  extend the reply
period for an additional ninety (90) days for special circumstances.

     If the claim is denied in whole or in part,  the Employer  shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting  forth:  (A) the  specified  reason or reasons for such denial;  (B) the
specific  reference  to  pertinent  provisions  of this  Agreement on which such
denial is based;  (C) a description  of any  additional  material or information
necessary  for the Claimant to perfect his or her claim and an  explanation  why
such material or such information is necessary;  (D) appropriate  information as
to the steps to be taken if the Claimant  wishes to submit the claim for review;
and (E) the time limits for requesting a review under subsection (c).

     (c) Request for Review.

     Within  sixty (60) days after the  receipt by the  Claimant  of the written
opinion  described above, the Claimant may request in writing that the Committee
review the determination of the Employer.  Such request must be addressed to the
Secretary of the employer, at its then principal place of business. The Claimant
or his or her duly  authorized  representative  may,  but need not,  review  the
pertinent  documents and submit issues and comments in writing for consideration
by the  Committee.  If the Claimant  does not request a review within such sixty
(60) day period,  he or she shall be barred and estopped  from  challenging  the
Employer's determination.

     (d) Review of Decision.

     Within  sixty (60) days  after the  Committee's  receipt  of a request  for
review, after considering all materials presented by the Claimant, the Committee
will inform the Participant in writing,  in a manner calculated to be understood
by the  Claimant,  of its decision  setting  forth the specific  reasons for the
decision and containing specific references to the pertinent  provisions of this
Agreement on which the decision is based. If special  circumstances require that
the sixty (60) day time period be  extended,  the  Committee  will so notify the
Claimant and will render the decision as soon as possible, but no later than one
hundred twenty (120) days after receipt of the request for review.

                                    Page 21



                                  ARTICLE VIII
                                 MISCELLANEOUS

8.1 - UNSECURED GENERAL CREDITOR.

     Participants and their Beneficiaries,  heirs, successors, and assigns shall
have no legal or equitable rights,  claims, or interest in any specific property
or assets of the  Company.  No assets  of the  Company  shall be held  under any
trust,  or held in any way as  collateral  security  for the  fulfilling  of the
obligations of the Company under this Plan. Any and all of the Company's  assets
shall be, and remain, the general unpledged, unrestricted assets of the Company.
The Company's  obligation under the Plan shall be merely that of an unfunded and
unsecured  promise of the Company to pay money in the future,  and the rights of
the Participants and  Beneficiaries  shall be no greater than those of unsecured
general  creditors.  It is the  intention of the Company that this Plan (and the
Trust  described  in Section  6.5) be unfunded  for purposes of the Code and for
purposes of Title I of ERISA.

8.2 - RESTRICTION AGAINST ASSIGNMENT.

     The Company shall pay all amounts  payable  hereunder only to the person or
persons  designated by the Plan and not to any other person or  corporation.  No
part of a Participant's  Accounts shall be liable for the debts,  contracts,  or
engagements  of any  Participant,  his  or her  Beneficiary,  or  successors  in
interest,  nor shall a  Participant's  Accounts be subject to execution by levy,
attachment,  or garnishment or by any other legal or equitable  proceeding,  nor
shall any such person have any right to alienate,  anticipate,  sell,  transfer,
commute,  pledge,  encumber, or assign any benefits or payments hereunder in any
manner whatsoever.  If any Participant,  Beneficiary or successor in interest is
adjudicated  bankrupt or  purports  to  anticipate,  alienate,  sell,  transfer,
commute, assign, pledge, encumber or charge any distribution or payment from the
Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such
Participant,  Beneficiary  or  successor  in  interest  in  such  manner  as the
Committee shall direct.

8.3 - WITHHOLDING.

     There shall be deducted  from each payment made under the Plan or any other
compensation  payable to the  Participant (or  Beneficiary)  all taxes which are
required to be withheld by the Company in respect to such  payment or this Plan.
The Company shall have the right to reduce any payment (or  compensation) by the
amount of cash sufficient to provide the amount of said taxes.

                                    Page 22


8.4 - AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION.

     The Chief Executive  Officer of St. Jude Medical,  Inc. may amend,  modify,
suspend or  terminate  the Plan in whole or in part,  except that no  amendment,
modification,  suspension or termination  shall have any  retroactive  effect to
reduce any amounts  allocated to a Participant's  Accounts (neither the Policies
themselves,  nor the death  benefit  described  in  Section  6.1(c)(1)  shall be
treated as allocated to Accounts).  In addition, the Chief Executive Officer has
the right to amend or terminate Section  6.1(c)(1).  In the event that this Plan
is terminated,  the amounts allocated to a Participant's Accounts (regardless of
whether such amounts had become vested) shall be distributed to the  Participant
or,  in the  event of his or her  death,  his or her  Beneficiary  in a lump sum
within thirty (30) days following the date of termination.

8.5 - GOVERNING LAW.

     This Plan shall be construed,  governed and administered in accordance with
the laws of the State of Minnesota.

8.6 - RECEIPT OR RELEASE.

     Any payment to a Participant or the Participant's Beneficiary in accordance
with the  provisions  of the  Plan  shall,  to the  extent  thereof,  be in full
satisfaction of all claims against the Committee and the Company.  The Committee
may require such  Participant or Beneficiary,  as a condition  precedent to such
payment, to execute a receipt and release to such effect.

8.7 - PAYMENTS ON BEHALF OF PERSONS UNDER INCAPACITY.

     In the event that any  amount  becomes  payable  under the Plan to a person
who, in the sole judgement of the Committee, is considered by reason of physical
or  mental  condition  to be  unable  to give a  valid  receipt  therefore,  the
Committee  may  direct  that such  payment  be made to any  person  found by the
Committee,  in its sole judgement,  to have assumed the care of such person. Any
payment made pursuant to such determination  shall constitute a full release and
discharge of the Committee and the Company.

                                    Page 23


8.8 - HEADINGS, ETC. NOT PART OF AGREEMENT.

     Headings  and  subheadings  in this Plan are inserted  for  convenience  of
reference  only  and  are  not  to be  considered  in  the  construction  of the
provisions hereof.


     IN WITNESS WHEREOF,  the Company has caused this document to be executed by
its duly authorized officer on this ________ day of __________, 1995.


                                      ST. JUDE MEDICAL, INC.


                                      By _______________________________________



                                      By _______________________________________