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Employment Agreement - St. Jude Medical Inc. and Daniel J. Starks


made effective as of the 25TH day of March, 2001, by and between St. Jude
Medical, Inc., a Minnesota corporation with its principal place of business at
One Lillihei Plaza, Little Canada, Minnesota (the "Company"), and Daniel J.
Starks, an individual residing at 7880 County Road #26, Maple Plain, MN 55359
(the "Executive") and amends and restates the EMPLOYMENT AGREEMENT dated
February 1, 2001 between the Company and Executive.


         Prior to the original EMPLOYMENT AGREEMENT Executive was employed by
the Company in the capacity of President and CEO, CRM Division. The Company
desires to continue to employ the Executive, due to his certain unique skills,
talents, contacts, judgment and knowledge of the Company's business, strategies,
ethics and objectives and the Executive desires to be employed by the Company.

The parties, intending to be legally bound, agree as follows:

         1. Term of Employment. The Term of this Agreement shall commence on the
effective date and, subject to the further provisions of this Agreement, shall
end on the 31st day of January, 2006.

         2. Title; Capacity. The Executive shall serve as President and Chief
Operating Officer of the Company or in such other position as the Company's
Board of Directors (the "Board") and CEO may determine from time to time. The
Executive shall be subject to the supervision of, shall report directly to, and
shall have such authority as is delegated to him by, the CEO.

            Executive's initial responsibilities, which shall be subject to
changes as determined from time to time by the CEO and the Board shall include
the operations of the Company. The following functions and units shall initially
report to Executive:

            CRMD, Cardiac Surgery Division, Daig Division, International,
            HealthCare Services, Legal, Human Resources and Information Systems.

            The Executive accepts such employment and agrees to undertake the
duties and responsibilities inherent in such position and such other duties and
responsibilities as the Board or its designee shall from time to time reasonably
assign to him. The Executive shall devote his entire business time, attention
and energies to the business and interests of the Company (and its affiliates as
required by the Company's investments and the Executive's positions therein)
during the Employment Period. The Executive shall abide by the rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein which may be adopted


from time to time. The Executive acknowledges receipt of copies of all such
rules and policies committed to writing as of the date of this Agreement.

         3. Compensation and Benefits.

            a. Salary. The Company shall pay the Executive an annual base salary
of $500,000.00 for the one-year period commencing on the Commencement Date in
the same intervals as other exempt employers. Such salary shall be subject to
annual increases thereafter as determined by the Board, in its sole discretion.

            b. Bonus. The Executive's target bonus under the MICP shall be 100%
of base salary (and shall be prorated for 2001).

            c. Perk Package. The Executive shall be eligible for the Company's
executive perk package at the level of $26,000.

            d. Fringe Benefits. The Executive shall be entitled to participate
in all bonus and benefit programs that the Company establishes and makes
available to its Executives, if any, to the extent that Executive's position,
tenure, salary, age, health and other qualifications make him eligible to

            e. Reimbursement of Expenses. The Company shall reimburse the
Executive for all reasonable travel, entertainment and other expenses incurred
or paid by the Executive in connection with, or related to, the performance of
his duties, responsibilities or services under this Agreement, upon presentation
by the Executive of documentation, expense statements, vouchers and/or such
other supporting information in accordance with standard company policies.

            In addition, the Company shall provide Executive with relocation
expenses under the Company's relocation policy for employees of Executive's

            f. Stock Options. Under separate agreement, the Executive is being
granted a non-qualified stock option to purchase 200,000 shares of stock,
vesting at the rate of 20% per year for five years and another non-qualified
stock option to purchase 200,000 shares which will vest based upon performance

         4. Employment Termination. The employment of the Executive by the
Company pursuant to this Agreement shall terminate upon the occurrence of any of
the following:

            a. Expiration of the Employment Period in accordance with Section 1;

            b. At the election of the Company, for "Cause", immediately upon
written notice by the Company to the Executive. "Cause" for such termination
shall include, but not limited to, the following:

               i. Dishonesty of the Executive with respect to the Company;


               ii. Willful misfeasance or nonfeasance of duty intended to injure
or having the effect of injuring the reputation, business or business
relationships of the Company or its respective officers, directors or

               iii. Upon a charge by a governmental entity against the Executive
of any crime involving moral turpitude which is demonstrably and materially
injurious to the Company or upon the filing of any civil action involving a
charge of embezzlement, theft, fraud or other similar act which is demonstrably
and materially injurious to the Company;

               iv. Willful or prolonged absence from work by the Executive
(other than by reason of disability due to physical or mental illness) or
failure, neglect or refusal by the Executive to perform his duties and
responsibilities without the same being corrected upon ten (10) days prior
written notice; or

               v. Breach by the Executive of any of the covenants contained in
this Agreement.

         c. Immediately upon the death or disability of the Executive. As used
in this Agreement, the term "disability" shall mean the inability of the
Executive, due to a physical or mental disability, for a period of 90 days,
whether or not consecutive, during any 360 day period to perform the services
contemplated under this Agreement. A determination of disability shall be made
by a physician to the Company.

         d. At the election of the Company or the Executive, with or without
cause upon 90 days written notice by one party to the other.

      5. Effect of Termination.

         a. Termination Under Section 4.d. In the event the Executive's
employment is terminated at the election of the Company pursuant to Section
4(d), the Company shall immediately pay to the Executive an amount equal to two
times the Executive's then current salary and two times the Executive's then
current target bonus.

         b. Termination for Death or Disability. If the Executive's employment
is terminated by death or because of disability pursuant to Section 4(c), the
Company shall pay to the estate of the Executive or to the Executive, as the
case may be, the compensation which would otherwise be payable to the Executive
up to the end of the month in which the termination of his employment because of
death or disability occurs.

         c. Termination for Cause or Voluntary Resignation. In the event a
termination for cause pursuant to Section 4(b) or by the voluntary resignation
of Executive pursuant to Section 4(d), then no further compensation other than
that already accrued shall be due to Executive under this Agreement.


         d. In the event Executive is entitled to, and actually receives the
full compensation he is entitled to, under the separate SEVERANCE AGREEMENT
dated the same date as this Agreement, then, notwithstanding the previous
subsections of Section 5, the Company shall have no additional obligation to
make a payment to Executive under Section 5 of this Agreement.

      6. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 9.

      7. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice

      8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.

      9. Other Agreements. This Agreement is intended to supplement and not
replace the following other agreements between the Executive and the Company:
Non-Disclosure and Non-Competition Agreement, Indemnification Agreement,
Severance Agreement (Change of Control), all previous stock option grants, 2001
MICP, and other employment benefits arising from Executive's prior employment
with the Company.

     10. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.

     11. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Minnesota, without giving
effect to that State's conflict of laws provisions.

     12. Choice of Venue. All actions or proceedings with respect to this
Agreement shall be instituted only in any state or federal court sitting in
Ramsey County, Minnesota, and by execution and delivery of this Agreement, the
parties irrevocably and unconditionally subject to the jurisdiction (both
subject matter and personal) of each such court and irrevocably and
unconditionally waive: (a) any objection that the parties might now or hereafter
have to the venue of any of such court; and (b) any claim that any action or
proceeding brought in any such court has been brought in an inconvenient forum.

     13. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of the Executive are personal and shall not be assigned by him.


     14. Waiver. No delay or omission by the Company is exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any once occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.

     15. Captions and Headings. The captions of the sections of this Agreement
are for convenience of reference only and in no way define, limit or affect the
scope of substance of any section of this Agreement.

     16. Severability. In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

     17. Counterparts. This Agreement may be executed in a number of couterparts
and all of such counterparts executed by the Company or the Executive, shall
constitute one and the same agreement, and it shall not be necessary for all
parties to execute the same counterpart hereof.

     18. Facsimile Signatures. The parties hereby agree that, for purposes of
the execution of this Agreement, facsimile signatures shall constitute original

     19. Incorporation by Reference. The preamble and recitals to this Agreement
are hereby incorporated by reference and made a part hereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.

                                           ST. JUDE MEDICAL, INC.,
                                           A Minnesota Corporation

                                           /s/ FRIEDA J. VALK
                                           Name:  Frieda J. Valk
                                           Title: Vice President, Administration


                                           /s/ DANIEL J. STARKS
                                           Name:  Daniel J. Starks
                                           Title: President/COO


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