Document:

EXHIBIT
10.4

ST.
JUDE MEDICAL, INC. 2007 STOCK INCENTIVE PLAN

NOTICE
OF NON-QUALIFIED

STOCK OPTION GRANT

          This
certifies that ________________ has an option to purchase ________________
shares of common stock, $.10 par value, of St. Jude Medical, Inc., a Minnesota
corporation.

	
  

 	
  

 
	
  

 	
 Social Security Number: ___________________

 
	
  

 	
  

 
	
  

 	
 Address: ________________________________

 
	
  

 	
  

 
	
  

 	
 Grant Date: _______________________, 20____

 
	
  

 	
  

 
	
  

 	
 Purchase Price Per Share: $__________________

 
	
  

 	
  

 
	
  

 	
 Expiration Date: __________________________

 
	
  

 	
  

 
	
  

 	
 Exercisable Date: [vesting schedule]

 

          This
stock option is governed by, and subject in all respects to, the terms and
conditions of the Non-Qualified Stock Option Agreement, a copy of which is
attached to and made a part of this document, and the St. Jude Medical, Inc.
2007 Stock Incentive Plan, a copy of which is available upon request. This
Notice of Non-Qualified Stock Option Grant has been duly executed, by manual or
facsimile signature, on behalf of St. Jude Medical, Inc.

	
  

 	
  

 	
  

 
	
  

 	
 ST. JUDE MEDICAL, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
 Title:

 	
  

 

ST.
JUDE MEDICAL, INC.

2007 STOCK INCENTIVE PLAN

NON-QUALIFIED
STOCK OPTION AGREEMENT

          This
Non-Qualified Stock Option Agreement is between St. Jude Medical, Inc., a
Minnesota corporation (the “Company”), and you, the person named in the
attached Notice of Non-Qualified Stock Option Grant (the “Notice”). This
Agreement is effective as of the date of grant set forth in the attached Notice
(the “Grant Date”).

          The
Company desires to provide you with an opportunity to purchase shares of the
Company’s Common Stock, $.10 par value (the “Common Stock”), as provided in
this Agreement in order to carry out the purpose of the St. Jude Medical, Inc.
2007 Stock Incentive Plan, as amended from time to time (the “Plan”).

          Accordingly,
for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and you hereby agree as follows:

          1.          Grant
of Option.

          The
Company hereby grants to you, effective as of the Grant Date, the right and
option (the “Option”) to purchase all or any part of the aggregate number of
shares of Common Stock set forth in the attached Notice, on the terms and
conditions contained in this Agreement and in accordance with the terms of the
Plan. The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

          2.          Exercise
Price.

          The
per share purchase price of the shares subject to the Option shall be the
purchase price per share set forth in the attached Notice.

          3.          Term
of Option and Exercisability.

          The
term of the Option shall be for a period of eight years from the Grant Date,
terminating at the close of business on the expiration date set forth in the
attached Notice (the “Expiration Date”) or such shorter period as is prescribed
in Section 5 of this Agreement. The Option shall become exercisable, or
vest, on the date or dates and in the amount or amounts set forth in the
attached Notice, subject to the provisions of Section 4 and Section 5
of this Agreement. To the extent the Option is exercisable, you may exercise it
in whole or in part, at any time, or from time to time, prior to the
termination of the Option. 

          4.          Change
of Control.

          Notwithstanding
the vesting provisions contained in Section 3 above, but subject to the
other terms and conditions contained in this Agreement, from and after a Change
of Control (as defined below) the Option shall become immediately exercisable
in full. As used herein, “Change of Control” shall mean any of the following
events:

2

          (a)          the
acquisition by any person, entity or “group,” within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than the Company or any of its Affiliates, or any
employee benefit plan of the Company and/or one or more of it Affiliates, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of either the then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding voting
securities in a transaction or series of transactions not approved in advance
by a vote of at least three-quarters of the Continuing Directors (as defined
below); or

          (b)          individuals
who, as of the Grant Date, constitute the Board of Directors of the Company
(generally the “Directors” and as of the Grant Date the “Continuing Directors”)
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a Director subsequent to the Grant Date whose nomination
for election was approved in advance by a vote of at least three-quarters of
the Continuing Directors (other than a nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
solicitation with respect to the election or removal of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall be deemed to be a Continuing Director; or

          (c)          the
consummation of a reorganization, merger, consolidation, liquidation or
dissolution of the Company or of the sale (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
other than a reorganization, merger, consolidation, liquidation, dissolution or
sale approved in advance by a vote of at least three-quarters of the Continuing
Directors; or

          (d)          the
first purchase under any tender offer or exchange offer (other than an offer by
the Company or any of its Affiliates) pursuant to which shares of Common Stock
are purchased; or

          (e)          at
least a majority of the Continuing Directors determines in their sole
discretion that there has been a change in control of the Company.

          5.           Effect
of Termination of Board Service.

          (a)          If
your employment terminates by reason of your death, the Option may be exercised
at any time within 12 months after the date of your death, to the extent that
the Option was exercisable by you on the date of death, by your personal
representatives or administrators or by any person or persons to whom the
Option has been transferred by will or the applicable laws of descent and
distribution, subject to the condition that the Option shall not be exercisable
after the Expiration Date of the Option.

          (b)          If
your employment terminates by reason of Disability, you may exercise the Option
at any time within 12 months after such termination, to the extent that the
Option was exercisable by you on the date of such termination, subject to the
condition that the Option shall not be exercisable after the Expiration Date of
the Option. For purposes of this Section 5, “Disability” means total and
permanent disability as approved by the Committee administering the Plan.

3

          (c)          If
your employment terminates by reason of Early Retirement or Normal Retirement,
you may exercise the Option at any time within 36 months after such
termination, to the extent that the Option was exercisable by you on the date
of such termination, subject to the condition that the Option shall not be
exercisable after the Expiration Date of the Option. For purposes of this
Section 5, “Normal Retirement” means retirement on or after age 65 and “Early
Retirement” means retirement with the consent of the Committee.

          (d)          If
your employment terminates for Cause, the Option shall terminate immediately
upon such termination and shall not be exercisable thereafter. For purposes of
this Section 5, “Cause” refers to (i) the felony conviction of the employee,
(ii) the failure of the employee to contest the prosecution of a felony, or
(iii) the willful misconduct, dishonesty or intentional violation of a statute,
rule or regulation by the employee, any of which in the judgment of the
Company, is harmful to the business or reputation of the Company.

          (e)          If
your employment is terminated for any reason other than your death, Disability,
Normal Retirement or Early Retirement, or for Cause, you may exercise the
Option at any time within 90 days after the date of such termination of
employment, to the extent that the Option was exercisable by you on the date of
such termination, subject to the condition that the Option shall not be
exercisable after the Expiration Date of the Option. However, if concurrently
with the termination of your employment you become a consultant to the Company
pursuant to a written consulting agreement, then you may continue to exercise
the option at any time until 90 days after the date of termination of such
consulting agreement, to the extent the Option was exercisable by you on the
date of your termination of employment, subject to the condition that the
Option will not be exercisable after the Expiration Date of the Option.

          6.           Method
of Exercising Option.

          (a)          Subject
to the terms and conditions of this Agreement, you may exercise your Option by
following the procedures established by the Company from time to time. In
addition, you may exercise your Option by written notice to the Company as
provided in Section 9(h) of this Agreement that states (i) your election
to exercise the Option, (ii) the Grant Date of the Option, (iii) the
purchase price of the shares, (iv) the number of shares as to which the
Option is being exercised, (v) the manner of payment and (vi) the manner
of payment for any income tax withholding amount. The notice shall be signed by
you or the Person or Persons exercising the Option. The notice shall be
accompanied by payment in full of the exercise price for all shares designated
in the notice. To the extent that the Option is exercised after your death, the
notice of exercise shall also be accompanied by appropriate proof of the right
of such Person or Persons to exercise the Option.

          (b)          Payment
of the exercise price shall be made to the Company through one or a combination
of the following methods:

	
  

 	
  

 
	
  

 	
               (i)          cash,
 in United States currency (including check, draft, money order or wire
 transfer made payable to the Company); or

 
	
  

 	
  

 
	
  

 	
               (ii)         delivery
 (either actual delivery or by attestation) of shares of Common Stock acquired
 by you more than six months prior to the date of exercise having a Fair
 Market Value on the date of exercise equal to the Option exercise price. You
 shall represent and warrant in writing that you are the owner
 of the shares so delivered, free and clear of all liens, encumbrances,
 security interests and restrictions, and you shall duly endorse in blank all
 certificates delivered to the Company.

 

4

          7.           Taxes.

          (a)          You
acknowledge that you will consult with your personal tax advisor regarding the
income tax consequences of exercising the Option or any other matters related
to this Agreement. In order to comply with all applicable federal, state, local
or foreign income tax laws or regulations, the Company may take such action as
it deems appropriate to ensure that all applicable federal, state, local or
foreign payroll, withholding, income or other taxes, which are your sole and
absolute responsibility, are withheld or collected from you, if and to the
extent required by applicable law.

          (b)          In
accordance with the terms of the Plan, and such rules as may be adopted by the
Committee administering the Plan, you may elect to satisfy any applicable tax
withholding obligations arising from the exercise of the Option by (i)
delivering cash (including check, draft, money order or wire transfer made
payable to the order of the Company ), (ii) having the Company withhold a
portion of the shares of Common Stock otherwise to be delivered upon exercise
of the Option having a Fair Market Value equal to the amount of such taxes or
(iii) delivering to the Company shares of Common Stock having a Fair Market
Value equal to the amount of such taxes. The Company will not deliver any
fractional share of Common Stock but will pay, in lieu thereof, the Fair Market
Value of such fractional share. Your election must be made on or before the
date that the amount of tax to be withheld is determined.

          8.           Adjustments.

          In
the event that any dividend or other distribution (whether in the form of cash,
shares of Common Stock, other securities or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares or other
securities of the Company, issuance of warrants or other rights to purchase
shares or other securities of the Company or other similar corporate
transaction or event affects the shares covered by the Option such that an
adjustment is necessary in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the attached
Notice of Non-Qualified Stock Option Grant and this Agreement, then the Committee
administering the Plan shall, in such manner as it may deem equitable, adjust
any or all of the number and type of the shares covered by the Option and the
exercise price of the Option.

          9.           General
Provisions.

          (a)          Interpretations.
This Agreement is subject in all respects to the terms of the Plan. A copy of
the Plan is available upon your request. Terms used herein which are defined in
the Plan shall have the respective meanings given to such terms in the Plan, unless
otherwise defined herein. In the event that any provision of this Agreement is
inconsistent with the terms of the Plan, the terms of the Plan shall govern.
Any question of administration or interpretation arising under this Agreement
shall be determined by the Committee administering the Plan, and such
determination shall be final, conclusive and binding upon all parties in
interest.

5

          (b)          No
Rights as a Shareholder. Neither you nor your legal representatives shall
have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to the Option unless and until
such shares are issued upon exercise of the Option.

          (c)          No
Right to Employment. Nothing in this Agreement or the Plan shall be
construed as giving you the right to be retained as an employee of the Company.
In addition, the Company may at any time dismiss you from employment, free from
any liability or any claim under this Agreement, unless otherwise expressly
provided in this Agreement.

          (d)          Option
Not Transferable. Except as otherwise provided by the Plan or by the
Committee administering the Plan, the Option shall not be transferable other
than by will or by the laws of descent and distribution or to a family member
in accordance with Section 6(h)(v) of the Plan and the Option shall be
exercisable during your lifetime only by you or, if permissible under
applicable law, by your guardian or legal representative. The Option may not be
pledged, alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance of the Option shall be void and
unenforceable against the Company.

          (e)          Securities
Matters. The Company shall not be required to deliver any shares of Common
Stock until the requirements of any federal or state securities or other laws,
rules or regulations (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied.

          (f)          Headings.
Headings are given to the sections and subsections of this Agreement solely as
a convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of this
Agreement or any provision hereof.

          (g)          Governing
Law. The internal law, and not the law of conflicts, of the State of
Minnesota will govern all questions concerning the validity, construction and
effect of this Agreement.

          (h)          Notices.
You should send all written notices regarding this Agreement or the Plan to the
Company at the following address:

	
  

 	
  

 
	
  

 	
 St. Jude Medical, Inc.

 One St. Jude Medical Drive

 St. Paul, MN 55117

 Attn.: Stock Plan Administrator

 

          (i)          Notice
of Non-Qualified Stock Option Grant. This Non-Qualified Stock Option
Agreement is attached to and made part of a Notice of Non-Qualified Stock
Option Grant and shall have no force or effect unless such Notice is duly
executed and delivered by the Company to you.

* * * * * * * *

6EXHIBIT 10.5

NOTICE
OF NON-QUALIFIED STOCK OPTION GRANT 

(2007 STOCK INCENTIVE PLAN)

          This
certifies that ___________________________ has an option to purchase
___________________ shares of common stock, par value $.10 per share, of St.
Jude Medical, Inc., a Minnesota corporation.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Social Security Number: ____________________

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Address: ______________________

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Grant Date: _____________________

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Purchase Price Per Share: $_______

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Expiration Date: ____________________

 
	
  

 	
  

 	
  

 
	
  

 	
           Exercisable
 Date: [insert vesting schedule, e.g., 25% exercisable on each of first four
 anniversaries of grant date]

 

          This
stock option is governed by, and subject in all respects to, the terms and
conditions of the St. Jude Medical, Inc. 2007 Stock Incentive Plan
Non-Qualified Stock Option Agreement, a copy of which is attached to and made a
part of this document, and the St. Jude Medical, Inc. 2007 Stock Incentive
Plan, a copy of which is available upon request. This Notice of Non-Qualified
Stock Option Grant has been duly executed, by manual or facsimile signature, on
behalf of St. Jude Medical, Inc.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ST.
 JUDE MEDICAL, INC.

 
	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
 Title:

 	
  

 

ST.
JUDE MEDICAL, INC.

2007 STOCK INCENTIVE PLAN

NON-QUALIFIED
STOCK OPTION AGREEMENT FOR

NON-EMPLOYEE DIRECTORS

          This
Non-Qualified Stock Option Agreement is between St. Jude Medical, Inc., a
Minnesota corporation (the “Company”), and you, the person named in the
attached Notice of Non-Qualified Stock Option Grant (the “Notice”). This
Agreement is effective as of the date of grant set forth in the attached Notice
(the “Grant Date”).

          The
Company desires to provide you with an opportunity to purchase shares of the Company’s
Common Stock, $.10 par value (the “Common Stock”), as provided in this
Agreement in order to carry out the purpose of the St. Jude Medical, Inc. 2007
Stock Incentive Plan, as amended from time to time (the “Plan”).

          Accordingly,
for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and you hereby agree as follows:

          1.          Grant
of Option.

          The
Company hereby grants to you, effective as of the Grant Date, the right and
option (the “Option”) to purchase all or any part of the aggregate number of
shares of Common Stock set forth in the attached Notice, on the terms and
conditions contained in this Agreement and in accordance with the terms of the
Plan. The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

          2.          Exercise
Price.

          The
per share purchase price of the shares subject to the Option shall be the
purchase price per share set forth in the attached Notice.

          3.          Term
of Option and Exercisability.

          The
term of the Option shall be for a period of eight years from the Grant Date,
terminating at the close of business on the expiration date set forth in the
attached Notice (the “Expiration Date”) or such shorter period as is prescribed
in Section 5 of this Agreement. The Option shall become exercisable, or
vest, on the date or dates and in the amount or amounts set forth in the
attached Notice, subject to the provisions of Section 4 and Section 5
of this Agreement. To the extent the Option is exercisable, you may exercise it
in whole or in part, at any time, or from time to time, prior to the
termination of the Option. 

          4.          Change
of Control.

          Notwithstanding
the vesting provisions contained in Section 3 above, but subject to the
other terms and conditions contained in this Agreement, from and after a Change
of Control (as defined below) the Option shall become immediately
exercisable in full. As used herein, “Change of Control” shall mean any of the
following events:

2

          (a)          the
acquisition by any person, entity or “group,” within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than the Company or any of its Affiliates, or any
employee benefit plan of the Company and/or one or more of it Affiliates, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of either the then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding voting
securities in a transaction or series of transactions not approved in advance by
a vote of at least three-quarters of the Continuing Directors (as defined
below); or

          (b)          individuals
who, as of the Grant Date, constitute the Board of Directors of the Company
(generally the “Directors” and as of the Grant Date the “Continuing Directors”)
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a Director subsequent to the Grant Date whose nomination
for election was approved in advance by a vote of at least three-quarters of the
Continuing Directors (other than a nomination of an individual whose initial
assumption of office is in connection with an actual or threatened solicitation
with respect to the election or removal of the Directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act)
shall be deemed to be a Continuing Director; or

          (c)          the
consummation of a reorganization, merger, consolidation, liquidation or
dissolution of the Company or of the sale (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
other than a reorganization, merger, consolidation, liquidation, dissolution or
sale approved in advance by a vote of at least three-quarters of the Continuing
Directors; or

          (d)          the
first purchase under any tender offer or exchange offer (other than an offer by
the Company or any of its Affiliates) pursuant to which shares of Common Stock
are purchased; or

          (e)          at
least a majority of the Continuing Directors determines in their sole
discretion that there has been a change in control of the Company.

          5.           Effect
of Termination of Board Service.

          (a)          If
your board service terminates by reason of your death, the Option may be
exercised at any time within 12 months after the date of your death, to the
extent that the Option was exercisable by you on the date of death, by your
personal representatives or administrators or by any person or persons to whom
the Option has been transferred by will or the applicable laws of descent and
distribution, subject to the condition that the Option shall not be exercisable
after the Expiration Date of the Option.

          (b)          If
your board service terminates by reason of Disability, you may exercise the
Option at any time within 12 months after such termination, to the extent that
the Option was exercisable by you on the date of such termination, subject to
the condition that the Option shall not be exercisable after the Expiration
Date of the Option. For purposes of this Section 5, “Disability” means total and permanent disability as
approved by the Committee administering the Plan.

3

          (c)          If
your board service terminates for Cause, the Option shall terminate immediately
upon such termination and shall not be exercisable thereafter. For purposes of
this Section 5, “Cause” refers to (i) the felony conviction of the director,
(ii) the failure of the director to contest the prosecution of a felony, or
(iii) the willful misconduct, dishonesty or intentional violation of a statute,
rule or regulation by the director, any of which in the judgment of the
Company, is harmful to the business or reputation of the Company.

          (d)          If
your board service terminates for any reason other than your death, Disability
or for Cause, you may exercise the Option after the date of such termination of
service in accordance with its terms to the extent that the Option was
exercisable by you on the date of such termination, subject to the condition
that the Option shall not be exercisable after the Expiration Date of the
Option.

           6.          Method
of Exercising Option.

          (a)          Subject
to the terms and conditions of this Agreement, you may exercise your Option by
following the procedures established by the Company from time to time. In
addition, you may exercise your Option by written notice to the Company as
provided in Section 9(h) of this Agreement that states (i) your election
to exercise the Option, (ii) the Grant Date of the Option, (iii) the
purchase price of the shares, (iv) the number of shares as to which the
Option is being exercised and (v) the manner of payment. The notice shall
be signed by you or the Person or Persons exercising the Option. The notice
shall be accompanied by payment in full of the exercise price for all shares
designated in the notice. To the extent that the Option is exercised after your
death, the notice of exercise shall also be accompanied by appropriate proof of
the right of such Person or Persons to exercise the Option.

          (b)          Payment
of the exercise price shall be made to the Company through one or a combination
of the following methods:

	
  

 	
  

 
	
  

 	
              (i)          cash,
 in United States currency (including check, draft, money order or wire
 transfer made payable to the Company); or

 
	
  

 	
  

 
	
  

 	
              (ii)         delivery
 (either actual delivery or by attestation) of shares of Common Stock acquired
 by you more than six months prior to the date of exercise having a Fair
 Market Value on the date of exercise equal to the Option exercise price. You
 shall represent and warrant in writing that you are the owner of the shares
 so delivered, free and clear of all liens, encumbrances, security interests
 and restrictions, and you shall duly endorse in blank all certificates
 delivered to the Company.

 

          7.          Taxes.

          You
acknowledge that you will consult with your personal tax advisor regarding the
income tax consequences of exercising the Option or any other matters related
to this Agreement. In order to comply with all applicable federal, state, local
or foreign income tax laws or regulations, the Company may take such action as
it deems appropriate to ensure that all applicable federal, state, local or foreign payroll,
withholding, income or other taxes, which are your sole and absolute
responsibility, are withheld or collected from you, if and to the extent
required by applicable law.

4

          8.           Adjustments.

          In
the event that any dividend or other distribution (whether in the form of cash,
shares of Common Stock, other securities or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares or other
securities of the Company, issuance of warrants or other rights to purchase
shares or other securities of the Company or other similar corporate
transaction or event affects the shares covered by the Option such that an
adjustment is necessary in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the attached
Notice of Non-Qualified Stock Option Grant and this Agreement, then the
Committee administering the Plan shall, in such manner as it may deem
equitable, adjust any or all of the number and type of the shares covered by
the Option and the exercise price of the Option.

          9.           General
Provisions.

          (a)          Interpretations.
This Agreement is subject in all respects to the terms of the Plan. A copy of
the Plan is available upon your request. Terms used herein which are defined in
the Plan shall have the respective meanings given to such terms in the Plan,
unless otherwise defined herein. In the event that any provision of this
Agreement is inconsistent with the terms of the Plan, the terms of the Plan
shall govern. Any question of administration or interpretation arising under
this Agreement shall be determined by the Committee administering the Plan, and
such determination shall be final, conclusive and binding upon all parties in
interest.

          (b)          No
Rights as a Shareholder. Neither you nor your legal representatives shall
have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to the Option unless and until
such shares are issued upon exercise of the Option.

          (c)          No
Right to Board Service. Nothing in this Agreement or the Plan shall be
construed as giving you the right to continue to serve on the Company’s Board
of Directors.

          (d)          Option
Not Transferable. Except as otherwise provided by the Plan or by the
Committee administering the Plan, the Option shall not be transferable other
than by will or by the laws of descent and distribution or to a family member
in accordance with Section 6(h)(v) of the Plan and the Option shall be
exercisable during your lifetime only by you or, if permissible under
applicable law, by your guardian or legal representative. The Option may not be
pledged, alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance of the Option shall be void and unenforceable
against the Company.

          (e)          Securities
Matters. The Company shall not be required to deliver any shares of Common
Stock until the requirements of any federal or state securities or other laws,
rules or regulations (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied.

5

          (f)          Headings.
Headings are given to the sections and subsections of this Agreement solely as
a convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of this
Agreement or any provision hereof.

          (g)          Governing
Law. The internal law, and not the law of conflicts, of the State of
Minnesota will govern all questions concerning the validity, construction and
effect of this Agreement.

          (h)          Notices.
You should send all written notices regarding this Agreement or the Plan to the
Company at the following address:

	
  

 	
  

 
	
  

 	
 St. Jude Medical, Inc.

 
	
  

 	
 One St. Jude Medical Drive

 
	
  

 	
 St. Paul, MN 55117

 
	
  

 	
 Attn.: Stock Plan Administrator

 

          (i)          Notice
of Non-Qualified Stock Option Grant. This Non-Qualified Stock Option
Agreement is attached to and made part of a Notice of Non-Qualified Stock
Option Grant and shall have no force or effect unless such Notice is duly
executed and delivered by the Company to you.

* * * * * * * *

6

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