Exhibit 10.32

January 5, 2010

Joe McCullough
1792 Hartford Avenue
St. Paul, MN 55116

Dear Joe,

This letter will memorialize the discussions with respect to your retirement
from St. Jude Medical, Inc. It has been agreed that:

 

 

 

 

1.

Compensation. You will retire from the Company effective December 24, 2010.
Beginning with the pay period that started on November 2, 2009, your current
annual base pay of $575,000 has been adjusted to $500,000 per year, payable in
accordance with the Company’s standard payroll practices. You will remain a
full-time employee through December 24, 2010. During the period from November 2,
2009 to December 24, 2010, your duties have been and will be limited to specific
matters on which Dan Starks may ask your assistance. You may terminate your
relationship with the Company at any time by written notice. Should you
terminate your employment before December 24, 2010, you will be entitled to
receive a lump sum payment equal to $500,000 less any amounts already paid to
you as salary for 2010 and less applicable taxes, to be paid in accordance with
the Company’s standard practices for such payments. You are no longer eligible
for the executive perquisite allowance.

 

 

 

 

2.

Non-Competition Agreement. Subject to the earlier termination of your employment
with the Company, the effective date of your retirement will be December 24,
2010 for purposes of the Non-Competition Agreement with the Company dated
October 2, 2007, unless your employment is terminated earlier, in which case the
non-competition agreement period commences on the date of actual termination of
employment.

 

 

 

 

3.

Resignation as Officer. You have resigned as an officer of the Company and all
subsidiaries and affiliates effective November 1, 2009.

 

 

 

 

4.

MICP. You will continue to participate in MICP for 2009 with a target percentage
at 100% of your eligible base earnings for 2009, reflecting the adjustment
described in #1 above. The MICP payment will be paid during February 2010 based
on performance results in accordance with the Company’s normal business
practices, assuming: (a) your continued employment by the Company until the
payment date; (b) that you sign and do not rescind the Release provided for in
#11 below; and (c) that you cooperate with the Company in the transition of your
position and otherwise comply with the terms hereof. You will not be eligible
for MICP for 2010.

 

 

 

 

5.

PTO. You will arrange for the use of vacation time and other PTO days such that
any available PTO balance as of November 1, 2009 will be completely consumed
during 2009 and 2010 and no unused PTO will exist at December 24, 2010.

 

 

 

 

6.

Options and Restricted Stock. You will not participate in the Company’s normal
December 2009 stock option grant. Any unvested stock option grants will continue
to vest through December 24, 2010 or any earlier date on which you may terminate
your relationship with the Company. As provided under the Company’s stock option
plans, as an Early Retiree, you will have 3 years after your last day as an
employee to exercise stock options that have vested as of the termination of
your employment subject to the condition that no option shall be exercisable
after the Expiration Date of such option. In the event your employment is
terminated for the reasons of death or disability, you or your representatives
will have 12 months from your termination to exercise any options that have
vested as of the termination of your employment subject to the condition that no
option shall be exercisable after the expiration date of the option. Upon your
termination of employment, all unvested options will be forfeited. Restricted
stock will be treated in accordance with its terms.

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7.

Insider Trading. We understand that after November 1, 2009 you no longer had
access to Company “insider information.” Consequently, as of that date you were
removed from the Insider List and free to trade in shares of STJ (including the
same-day sale and cashless exercise of vested stock options). Please keep in
mind that, regardless of whether your name is on the Insider List, it is illegal
to trade in Company securities if you are aware of material non-public
information about the Company.

 

 

 

 

8.

Management Savings Plan. Pursuant to the terms of the MSP, you will begin to
receive lump sum distributions from your MSP account beginning six months
following the end of the quarter in which your employment terminates in
accordance with the valid elections on file. You will not be eligible to
contribute to the MSP in 2010.

 

 

 

 

9.

Profit Sharing. You will participate in any profit sharing made available in
2009 and paid in 2010. You will not receive this benefit for 2010.

 

 

 

 

10.

Benefits. You and your dependents may continue as participants in the Company’s
benefit programs (medical, dental, vision, and life insurance) program so long
as you continue your employment with the Company. The human resources department
and/or our COBRA administrator (Benesyst) will provide additional information
regarding your options to continue all of these plans under COBRA shortly after
your retirement date.

 

 

 

 

11.

Termination of Severance Agreement and Release. You have been notified that your
Severance Agreement with the Company dated December 31, 2008, was terminated,
pursuant to Section 1 of that agreement, effective December 29, 2009.
Contemporaneous with countersigning this letter, you will enter into a Release
in a form substantially similar to the Release attached hereto as Exhibit A. As
a further condition of the Company’s agreements herein, on or about December 24,
2010, you will enter into a Release in a form substantially similar to the
Release attached hereto as Exhibit B.

 

 

 

 

12.

Indemnification Agreement. Your Indemnification Agreement with the Company dated
September 30, 2008 will remain in full force and effect regardless of your
change in position, this agreement and the Releases referenced in the paragraph
above.

 

 

 

 

13.

Expense. Travel expenses that you incur that are authorized in advance, in
writing, will be reimbursed in accordance with the Company’s travel expense
policy for officer level employees. No expenses not specifically authorized will
be reimbursed.

 

 

 

 

Thank you for your willingness to assist us through this transition and for your
substantial contribution to the success of St. Jude Medical.

 

 

 

Sincerely,

 

 

 

ST. JUDE MEDICAL, INC.

 

 

 

/s/ Pamela S. Krop

 

 

Pamela S. Krop

 

Vice President and General Counsel

 

 

 

 

Acknowledged and Agreed:

 

 

 

/s/ Joseph H. McCullough

 

 

Joseph H. McCullough

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EXHIBIT A

FULL AND FINAL RELEASE

I.            Definitions. I intend all words used in this Full and Final
Release to have their plain meanings in ordinary English. Technical legal words
are not needed to describe what I mean. Specific terms I use in this Full and
Final Release have the following meanings:

A.          “I,” “me,” “my” and “Employee” include both me, Joseph McCullough,
and anyone who has or obtains any legal rights or claims through me.

B.          “Employer,” as used in this Full and Final Release, shall at all
times mean St. Jude Medical, Inc., and its parent and any subsidiary
corporations, successors, predecessors and assigns, present or former officers,
directors, shareholders, agents, assigns, employees, and attorneys, whether in
their individual or official capacities.

C.          “Claims” mean any and all of the actual or potential claims of any
kind whatsoever I may have had, or currently may have against Employer, arising
up to the date I sign this Full and Final Release, regardless of whether I now
know about those claims, that are in any way related to my employment with
Employer or the termination of that employment. Such claims include, but are not
limited to any claims for: invasion of privacy; breach of written or oral,
express or implied, contract (including, without limitation, that certain
Severance Agreement between Employer and me dated December 31, 2008); fraud or
misrepresentation; violation of the Age Discrimination in Employment Act of 1967
(“ADEA”), 29 U.S.C. § 626, as amended, the Older Workers Benefit Protection Act
of 1990 (“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil Rights Act of 1964
(“Title VII”), 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act
(“ADA”), 29 U.S.C. § 2101, et seq., the Family and Medical Leave Act (“FMLA”),
29 U.S.C. § 2601 et seq., the Employee Retirement Income Security Act of 1978
(“ERISA”), as amended, 29 U.S.C. §§ 1001, et seq., Equal Pay Act (“EPA”), 29
U.S.C. § 206(d), the Worker Adjustment and Retraining Notification Act (“WARN”),
29 U.S.C. § 2101 et seq., the Minnesota Human Rights Act, Minn. Stat. § 363A.01,
et seq., Minnesota Statutes § 181 et seq. or any other state human rights or
fair employment practices act, and any other federal, state, local or foreign
statute, law, rule, regulation, ordinance or order. Such claims also include,
but are not limited to: claims under the Management Incentive Compensation Plan;
claims for violation of any civil rights laws based on protected class status;
claims for assault, battery, defamation, intentional or negligent infliction of
emotional distress, breach of the covenant of good faith and fair dealing,
promissory estoppel, negligence, negligent hiring, retention or supervision,
retaliation, constructive discharge, violation of whistleblower protection laws,
unjust enrichment, violation of public policy, and all other claims for unlawful
employment practices, and all other common law or statutory claims.

II.          Agreement to Release My Claims. Except as stated in Section IV of
this Full and Final Release, I agree to release all my Claims. I may, but am not
required to, withdraw or dismiss, or attempt to withdraw or dismiss, any charges
that I may have pending against the Employer with the Equal Employment
Opportunity Commission (“EEOC”) or other civil rights enforcement agency. In
exchange for my agreement to release my Claims, I am receiving satisfactory
consideration from Employer to which I am not otherwise entitled by law or
contract. The consideration I am receiving is a full and fair payment for the
release of all my Claims. Employer does not owe me anything in addition to what
I will be receiving.

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III.         Older Workers Benefit Protection Act. I understand and have been
advised that the above release of My Claims is subject to the terms of the Older
Workers Benefit Protection Act (“OWBPA”). The OWBPA provides that an individual
cannot waive a right or claim under the Age Discrimination in Employment Act
(“ADEA”) unless the waiver is knowing and voluntary. I have been advised of this
law, and I agree that I am signing this Full and Final Release voluntarily, and
with full knowledge of its consequences. I understand that the Employer is
giving me twenty-one (21) days from the date I received a copy of this Full and
Final Release to decide whether I want to sign it. I acknowledge that I have
been advised to use this time to consult with an attorney about the effect of
this Full and Final Release. If I sign this Full and Final Release before the
end of the twenty-one (21) day period it will be my personal, voluntary decision
to do so, and will be done with full knowledge of my legal rights. I agree that
material and/or immaterial changes to this Agreement or Full and Final Release
will not restart the running of this consideration period.

IV.         Exclusions from Release.

A.          The term “Claims” does not include my rights, if any, to claim the
following: unemployment insurance benefits; workers compensation benefits;
claims for my vested post-termination benefits under any 401(k), SERP or similar
retirement benefit plan; my rights to group medical or group dental insurance
coverage pursuant to section 4980B of the Internal Revenue Code of 1986, as
amended (“COBRA”); my rights to indemnification, with respect to events
occurring prior to the date of this Full and Final Release, under Employer’s
charter documents, Minnesota corporate law, any Directors and Officers insurance
maintained by the Employer and my indemnification agreement with Employer dated
September 30, 2008; my rights to enforce the terms of this Full and Final
Release; or my rights to assert claims that are based on events occurring after
this Full and Final Release becomes effective.

B.          Nothing in this Full and Final Release interferes with my right to
file or maintain a charge with the EEOC or other local civil rights enforcement
agency, or participate in any manner in an EEOC or other such agency
investigation or proceeding. I, however, understand that I am waiving my right
to recover individual relief including, but not limited to, back pay, front pay,
reinstatement, attorneys’ fees, and/or punitive damages, in any administrative
or legal action whether brought by the EEOC or other civil rights enforcement
agency, me, or any other party, arising from my voluntary resignation.

C.          Nothing in this Full and Final Release interferes with my right to
challenge the knowing and voluntary nature of this Full and Final Release under
the ADEA and/or OWBPA.

D.          I agree that the Employer reserves any and all defenses which it has
or might have against any claims brought by me. This includes, but is not
limited to, the Employer’s right to seek available costs and attorneys’ fees as
allowed by law, and to have any monetary award granted to me, if any, reduced by
the amount of money that I received in consideration for this Full and Final
Release.

V.          Right to Revoke Release. I understand that insofar as this Full and
Final Release relates to my rights under the Age Discrimination in Employment
Act (“ADEA”), it shall not become effective or enforceable until seven (7) days
after I sign it. I also have the right to revoke this Full and Final Release
insofar as it extends to potential claims under the ADEA by written notice to
Employer within seven (7) calendar days following my signing this Full and Final
Release, and within fifteen (15) calendar days as to waiver of claims under the
Minnesota Human Rights Act. Any such revocation must be in writing and
hand-delivered to Employer or, if sent by mail, it must be:

A.          post-marked within the applicable seven (7) or fifteen (15) day
revocation period;

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B.           properly addressed to:

 

 

 

Pamela Krop

 

General Counsel

 

St. Jude Medical Inc.

 

One St. Jude Medical Drive

 

St. Paul, MN 55117-1799, and

C.          sent by certified mail, return receipt requested.

 

 

 

I understand that the payment I am receiving for settling and releasing My
Claims, described in paragraphs 2-7 of the attached January 5, 2010 letter (the
“Separation Letter”), is contingent upon my agreement to be bound by the terms
of this Full and Final Release. Accordingly, if I decide to revoke this Full and
Final Release, I understand that I am not entitled to the consideration
described in paragraphs 2-7 of the Separation Letter.

VI.         Employee Representation. I represent that, as of the date I sign
this Full and Final Release, I am not aware of any violations of federal or
state law or regulation or Employer policy, and that I am not aware of any facts
which would constitute a violation of any federal or state law or regulation or
Employer policy. I further represent and warrant that I have not violated any
federal or state law, statute, regulation, or ordinance.

VII.        Controlling Law. This Full and Final Release shall be governed by
and interpreted in accordance with the laws of the State of Minnesota. To the
extent any clause or provision of this Exhibit A shall be determined to be
invalid and/or unenforceable, such a clause or provision shall be deleted and
the validity and enforceability of the remainder of this Exhibit A shall be
unaffected.

VIII.       I Understand the Terms of this Release. I have had the opportunity
to read this Full and Final Release carefully and understand all its terms. I
have had the opportunity to review this Full and Final Release with my own
attorney. In agreeing to sign this Full and Final Release, I have not relied on
any statements or explanations made by Employer or their attorneys. I understand
and agree that this Full and Final Release, the Separation Letter and exhibits
thereto, including my Non-Disclosure and Non-Competition Agreement, and my
Indemnification Agreement, contain all the agreements between Employer and me.
We have no other written or oral agreements.

 

 

 

 

               JOSEPH H. McCULLOUGH

 

 

Dated: January 13, 2010

/s/ Joseph H. McCullough

 

 

               Signature

 

 

 

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EXHIBIT B

FULL AND FINAL RELEASE

I.          Definitions. I intend all words used in this Full and Final Release
to have their plain meanings in ordinary English. Technical legal words are not
needed to describe what I mean. Specific terms I use in this Full and Final
Release have the following meanings:

A.         “I,” “me,” “my” and “Employee” include both me, Joseph McCullough,
and anyone who has or obtains any legal rights or claims through me.

B.         “Employer,” as used in this Full and Final Release, shall at all
times mean St. Jude Medical, Inc., and its parent and any subsidiary
corporations, successors, predecessors and assigns, present or former officers,
directors, shareholders, agents, assigns, employees, and attorneys, whether in
their individual or official capacities.

C.         “Claims” mean any and all of the actual or potential claims of any
kind whatsoever I may have had, or currently may have against Employer, arising
up to the date I sign this Full and Final Release, regardless of whether I now
know about those claims, that are in any way related to my employment with
Employer or the termination of that employment. Such claims include, but are not
limited to any claims for: invasion of privacy; breach of written or oral,
express or implied, contract (including, without limitation, that certain
Severance Agreement between Employer and me dated December 31, 2008); fraud or
misrepresentation; violation of the Age Discrimination in Employment Act of 1967
(“ADEA”), 29 U.S.C. § 626, as amended, the Older Workers Benefit Protection Act
of 1990 (“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil Rights Act of 1964
(“Title VII”), 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act
(“ADA”), 29 U.S.C. § 2101, et seq., the Family and Medical Leave Act (“FMLA”),
29 U.S.C. § 2601 et seq., the Employee Retirement Income Security Act of 1978
(“ERISA”), as amended, 29 U.S.C. §§ 1001, et seq., Equal Pay Act (“EPA”), 29
U.S.C. § 206(d), the Worker Adjustment and Retraining Notification Act (“WARN”),
29 U.S.C. § 2101 et seq., the Minnesota Human Rights Act, Minn. Stat. § 363A.01,
et seq., Minnesota Statutes § 181 et seq. or any other state human rights or
fair employment practices act, and any other federal, state, local or foreign
statute, law, rule, regulation, ordinance or order. Such claims also include,
but are not limited to: claims under the Management Incentive Compensation Plan;
claims for violation of any civil rights laws based on protected class status;
claims for assault, battery, defamation, intentional or negligent infliction of
emotional distress, breach of the covenant of good faith and fair dealing,
promissory estoppel, negligence, negligent hiring, retention or supervision,
retaliation, constructive discharge, violation of whistleblower protection laws,
unjust enrichment, violation of public policy, and all other claims for unlawful
employment practices, and all other common law or statutory claims.

II.          Agreement to Release My Claims. Except as stated in Section IV of
this Full and Final Release, I agree to release all my Claims. I may, but am not
required to, withdraw or dismiss, or attempt to withdraw or dismiss, any charges
that I may have pending against the Employer with the Equal Employment
Opportunity Commission (“EEOC”) or other civil rights enforcement agency. In
exchange for my agreement to release my Claims, I am receiving satisfactory
consideration from Employer to which I am not otherwise entitled by law or
contract. The consideration I am receiving is a full and fair payment for the
release of all my Claims. Employer does not owe me anything in addition to what
I will be receiving.

III.        Older Workers Benefit Protection Act. I understand and have been
advised that the above release of My Claims is subject to the terms of the Older
Workers Benefit Protection Act (“OWBPA”). The OWBPA provides that an individual
cannot waive a right or claim under the Age Discrimination in Employment Act
(“ADEA”) unless the waiver is knowing and voluntary. I have been advised of this
law, and I agree that I am signing this Full and Final Release voluntarily, and
with full knowledge of its consequences. I understand that the Employer is
giving me twenty-one (21) days from the date I received a copy of this Full and
Final Release to decide whether I want to sign it. I acknowledge that I have
been advised to use this time to consult with an attorney about the effect of
this Full and Final Release. If I sign this Full and Final Release before the
end of the twenty-one (21) day period it will be my personal, voluntary decision
to do so, and will be done with full knowledge of my legal rights. I agree that
material and/or immaterial changes to this Agreement or Full and Final Release
will not restart the running of this consideration period.

--------------------------------------------------------------------------------

IV.         Exclusions from Release.

A.          The term “Claims” does not include my rights, if any, to claim the
following: unemployment insurance benefits; workers compensation benefits;
claims for my vested post-termination benefits under any 401(k), SERP or similar
retirement benefit plan; my rights to group medical or group dental insurance
coverage pursuant to section 4980B of the Internal Revenue Code of 1986, as
amended (“COBRA”); my rights to indemnification, with respect to events
occurring prior to the date of this Full and Final Release, under Employer’s
charter documents, Minnesota corporate law, any Directors and Officers insurance
maintained by the Employer and my indemnification agreement with Employer dated
September 30, 2008; my rights to enforce the terms of this Full and Final
Release; or my rights to assert claims that are based on events occurring after
this Full and Final Release becomes effective.

B.          Nothing in this Full and Final Release interferes with my right to
file or maintain a charge with the EEOC or other local civil rights enforcement
agency, or participate in any manner in an EEOC or other such agency
investigation or proceeding. I, however, understand that I am waiving my right
to recover individual relief including, but not limited to, back pay, front pay,
reinstatement, attorneys’ fees, and/or punitive damages, in any administrative
or legal action whether brought by the EEOC or other civil rights enforcement
agency, me, or any other party, arising from my voluntary resignation.

C.          Nothing in this Full and Final Release interferes with my right to
challenge the knowing and voluntary nature of this Full and Final Release under
the ADEA and/or OWBPA.

D.          I agree that the Employer reserves any and all defenses which it has
or might have against any claims brought by me. This includes, but is not
limited to, the Employer’s right to seek available costs and attorneys’ fees as
allowed by law, and to have any monetary award granted to me, if any, reduced by
the amount of money that I received in consideration for this Full and Final
Release.

V.          Right to Revoke Release. I understand that insofar as this Full and
Final Release relates to my rights under the Age Discrimination in Employment
Act (“ADEA”), it shall not become effective or enforceable until seven (7) days
after I sign it. I also have the right to revoke this Full and Final Release
insofar as it extends to potential claims under the ADEA by written notice to
Employer within seven (7) calendar days following my signing this Full and Final
Release, and within fifteen (15) calendar days as to waiver of claims under the
Minnesota Human Rights Act. Any such revocation must be in writing and
hand-delivered to Employer or, if sent by mail, it must be:

A.          post-marked within the applicable seven (7) or fifteen (15) day
revocation period;

B.          properly addressed to:

 

 

 

Pamela Krop

 

General Counsel

 

St. Jude Medical Inc.

 

One St. Jude Medical Drive

 

St. Paul, MN 55117-1799, and

C.          sent by certified mail, return receipt requested.

 

 

 

I understand that the payment I am receiving for settling and releasing My
Claims, described in paragraphs 2-7 of the attached January 5, 2010 letter (the
“Separation Letter”), is contingent upon my agreement to be bound by the terms
of this Full and Final Release. Accordingly, if I decide to revoke this Full and
Final Release, I understand that I am not entitled to the consideration
described in paragraphs 2-7 of the Separation Letter.

VI.         Employee Representation. I represent that, as of the date I sign
this Full and Final Release, I am not aware of any violations of federal or
state law or regulation or Employer policy, and that I am not aware of any facts
which would constitute a violation of any federal or state law or regulation or
Employer policy. I further represent and warrant that I have not violated any
federal or state law, statute, regulation, or ordinance.

--------------------------------------------------------------------------------

VII.        Controlling Law. This Full and Final Release shall be governed by
and interpreted in accordance with the laws of the State of Minnesota. To the
extent any clause or provision of this Exhibit B shall be determined to be
invalid and/or unenforceable, such a clause or provision shall be deleted and
the validity and enforceability of the remainder of this Exhibit B shall be
unaffected.

VIII.       I Understand the Terms of this Release. I have had the opportunity
to read this Full and Final Release carefully and understand all its terms. I
have had the opportunity to review this Full and Final Release with my own
attorney. In agreeing to sign this Full and Final Release, I have not relied on
any statements or explanations made by Employer or their attorneys. I understand
and agree that this Full and Final Release, the Separation Letter and exhibits
thereto, including my Non-Disclosure and Non-Competition Agreement, and my
Indemnification Agreement, contain all the agreements between Employer and me.
We have no other written or oral agreements.

 

 

 

 

               JOSEPH H. McCULLOUGH

 

 

Dated: January 13, 2010

/s/ Joseph H. McCullough

 

 

               Signature

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