As filed with the Securities and Exchange Commission on December 13, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GUIDANT CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 111 Monument Circle, 29th Floor 35-1931722
Indianapolis, IN 46204-5129
(State or other (Address of Principal (I.R.S. Employer
jurisdiction of Executive Offices) Identification No.)
incorporation or (Zip Code)
organization.)
Guidant Corporation 1996 Nonemployee Directors Stock Plan
(Full Title of the Plan)
J.B. King
Vice President, General Counsel and Secretary
Guidant Corporation
111 Monument Circle, 29th Floor
Indianapolis, Indiana 46204-5129
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (317) 971-2000
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
securities registered maximum maximum registration
to be offering aggregate fee
registered price per offering
share (1) price (1)
Common Stock 250,000 shares $50.56 $12,640,000 $4358.62
(1) Pursuant to Rule 457(h), these prices are estimated solely for the
purpose of calculating the registration fee and are based upon the average of
the high and low sales prices of Registrant's common stock on the New York
Stock Exchange on December 11, 1996.
There are also registered hereunder such additional indeterminate number
of shares as may be issued as a result of the antidilution provisions of the
Guidant Corporation 1996 Nonemployee Directors Stock Plan.
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PART I
Item 1. PLAN INFORMATION.
Not included pursuant to Form S-8 instructions.
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not included pursuant to Form S-8 instructions.
PART II
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Annual Report of the Company on Form 10-K for the fiscal year
ended December 31, 1995 and the Quarterly Reports of the Company on Form 10-Q
for the fiscal quarters ended March 31, 1996, June 30, 1996, and September 30,
1996, and the description of the Company's common stock ("Guidant Stock") and
the associated Preferred Stock Purchase Rights contained in the Company's
registration statement on Form 8-A, as amended, under the Securities Exchange
Act of 1934, as amended, (the "Exchange Act") with respect to that stock
filed with the Securities and Exchange Commission on October 6, 1994,
including any amendments or reports filed for the purpose of updating that
description, are incorporated in this Registration Statement by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14(c) or
15(d) of the Exchange Act after the date of thisRegistration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part of this Registration Statement from
the date of filing of those documents with the Commission.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
As of September 30, 1996, Mr. J.B. King beneficially owned 24,201
shares of Guidant Stock, 1,000 shares of which were owned by his wife and 762
of which were held in his account in The Guidant Employee Savings and Stock
Ownership Plan. Mr. King disclaims beneficial ownership of the 1,000 shares
of Guidant Stock owned by his wife. Mr. King also has the right to purchase
an additional 129,736 shares of Guidant Stock upon the exercise of stock
options held by him.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Indiana Business Corporation Law provides that a corporation,
unless limited by its Articles of Incorporation, is required to indemnify its
directors and officers against reasonable expenses incurred in the successful
defense of any proceeding arising out of their serving as a director or
officer of the corporation.
As permitted by the Indiana Business Corporation Law, the
Company's Articles of Incorporation provide for indemnification of directors,
officers, employees and agents of the Company against any and all liability
and reasonable expense that may be incurred by them, arising out of any claim
or action, civil or criminal, in which they may become involved by reason of
being or having been a director, officer, employee or agent. The Company's
Articles of Incorporation require indemnification to the the fullest extent
permitted by the Indiana Business Corporation Law.
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Officers and directors of the Company are insured, subject to
certain exclusions and deductible and maximum amounts, against loss from
claims arising in connection with them acting in their respective capacities,
which include claims under the Securities Act of 1933.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
Item 8. EXHIBITS.
Exhibit
Number Description
4.1 Amended and Restated Articles of Incorporation as
amended through November 18, 1994.
4.2 By-Laws as amended through October 17, 1994.
4.3 Guidant Corporation 1996 Nonemployee Directors Stock Plan.
5.1 Opinion of J.B. King, Vice President, General Counsel and
Secretary of the Company, as to legality of the securities
being registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of J.B. King, Vice President, General Counsel and
Secretary of the Company (contained in Exhibit 5.1).
Item 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
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provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Indianapolis, State of Indiana, on
December 12, 1996.
GUIDANT CORPORATION
By: s/James M. Cornelius
---------------------------
James M. Cornelius
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
s/James M. Cornelius
- --------------------- Chairman of the Board October 16, 1996
(James M. Cornelius) (principal executive officer)
s/Ronald W. Dollens
- ------------------- President, October 16, 1996
(Ronald W. Dollens) Chief Executive Officer
and a Director
(principal executive officer)
s/ Keith E. Brauer
- ------------------- Chief Financial Officer, October 16, 1996
(Keith E. Brauer) (principal financial officer)
s/Roger Marchetti
- ------------------- Chief Accounting Officer December 12, 1996
(Roger Marchetti) (principal accounting officer)
s/Maurice A. Cox, Jr.
- ------------------- Director December 12, 1996
(Maurice A. Cox, Jr.)
s/Enrique C. Falla
- ------------------- Director October 16, 1996
(Enrique C. Falla)
s/J. B. King
- ------------------- Director December 12, 1996
(J.B. King)
s/Susan B. King
- ------------------- Director December 12, 1996
(Susan B. King)
s/J. Kevin Moore
- ------------------- Director December 12, 1996
(J. Kevin Moore)
s/Mark Novitch
- ------------------- Director December 12, 1996
(Mark Novitch, M.D.)
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s/Eugene L. Step
- ------------------- Director December 12, 1996
(Eugene L. Step)
s/Ruedi E. Wager
- ---------------------- Director December 12, 1996
(Ruedi E. Wager, Ph.D.)
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INDEX TO EXHIBITS
The following documents are filed as part of this Registration Statement:
Exhibit Location
4.1 Amended and Restated Articles Incorporated by reference from
of Incorporation as amended Exhibit 3.1 to the Company's
through November 18, 1994. Registration Statement on Form S-1
Registration Statement No. 33-83934.
4.2 By-Laws as amended through Incorporated by reference from
October 17, 1994. Exhibit 3.2 to the Company's
Registration Statement on Form S-1
Registration Statement No. 33-83934.
4.3 Guidant Corporation 1996 Non- Attached.
employee Directors Stock Plan.
5.1 Opinion of J.B. King, Vice Attached.
President, General Counsel
and Secretary of the Company,
as to legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP, Attached.
Independent Auditors.
23.2 Consent of J.B. King, Vice Attached.
President, General Counsel
and Secretary of the Company
(contained in Exhibit 5.1).
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GUIDANT CORPORATION
1996 Nonemployee Directors
Stock Plan
ARTICLE I
PURPOSE
1.1 This Guidant Corporation 1996 Nonemployee
Directors Stock Plan is intended to advance the interests of
Guidant Corporation and its shareholders by attracting,
retaining and motivating the performance of nonemployee
directors of Guidant Corporation and to encourage and enable
such directors to acquire and retain a proprietary interest
in Guidant Corporation by ownership of its stock.
ARTICLE II
DEFINITIONS
2.1 "Board" means the Board of Directors of the
Company.
2.2 "Code" means the Internal Revenue Code of
1986, as amended.
2.3 "Common Stock" means the Company's common
stock.
2.4 "Company" means Guidant Corporation.
2.5 "Date of Grant" means the date on which an
Option is granted in accordance with Section 5.1 hereof
or a Restricted Stock Award is granted in accordance with
Section 6.1 hereof.
2.6 "Disability" means a permanent and total
disability within the meaning of Section 22(e)(3) of the Code.
2.7 "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
2.8 "Fair Market Value" means the average of the
highest and lowest sale prices of a share of Common Stock on
the New York Stock Exchange (NYSE) on the date as of which
fair market value is to be determined or, in the absence of
any reported sales of Common Stock on such date, on the
first preceding date on which any such sale shall have been
reported. If Common Stock is not listed on the NYSE on the
date as of which fair market value is to be determined, the
Board shall determine in good faith the fair market value in
whatever manner it considers appropriate.
2.9 "Grant" means the Options and Restricted Stock
Awards granted to a Grantee under the Plan.
2.10 "Grantee" means a person to whom an Option or
a Restricted Stock Award has been granted under the Plan.
2.11 "Nonemployee Director" means any member of the
Board who is not an employee of the Company.
2.12 "Option" means a stock option granted under
the Plan.
2.13 "Option Price" means the price at which each
share of Common Stock subject to an Option may be purchased,
determined in accordance with Section 5.2 hereof.
2.14 "Plan" means this Guidant Corporation 1996
Nonemployee Directors Stock Plan.
2.15 "Restricted Stock Award" means an award of
Common Stock granted under the Plan and subject to the
restrictions set forth herein.
2.16 "Restricted Stock Notice" means a notification
by the Company to a Grantee pursuant to which Common Stock will
be issued or transferred to a Grantee under the Plan.
2.17 "Rule 16b-3" means Rule 16b-3 under the
Securities Exchange Act of 1934, as amended.
2.18 "Stock Option Notice" means a notification by
the Company to a Grantee pursuant to which a Grantee may
purchase Common Stock under the Plan.
ARTICLE III
ADMINISTRATION
Subject to the express provisions of the Plan, the
Board shall have discretionary authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the details and provisions of
each Stock Option Notice and Restricted Stock Notice, and to
make all the determinations necessary or advisable in the
administration of the Plan. All such actions and
determinations by the Board shall be conclusively binding
for all purposes and upon all persons. Notwithstanding the
foregoing, and solely to the extent necessary to comply with
the "disinterested administration" requirement of Rule 16b-3,
the Board shall have no discretionary authority with
respect to the determination of the amount, price or timing
of any Grant under the Plan. The Board shall not be liable
for any action or determination made in good faith with
respect to the Plan, any Option or Restricted Stock Award or
any Stock Option Notice or Restricted Stock Notice entered
into hereunder.
ARTICLE IV
SHARES OF STOCK SUBJECT TO PLAN
4.1 Number of Shares. Subject to adjustment
pursuant to the provisions of this Article IV, the maximum
number of shares of Common Stock which may be issued and
sold hereunder shall be 250,000 shares. Shares of Common
Stock issued and sold under the Plan may be either
authorized but unissued shares or shares held in the
Company's treasury. Shares of Common Stock covered by an
Option that shall have been exercised shall not again be
available for grant. If an Option shall terminate for any
reason without being wholly exercised, the number of shares
to which such Option termination relates shall again be
available for grant hereunder. Shares of Common Stock
covered by a Restricted Stock Award for which
the restrictions have lapsed shall not
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again be available for grant. If a Restricted Stock Award
shall terminate for any reason prior to the time its
restrictions shall have lapsed, the number of shares to
which such Restricted Stock Award relates shall again be
available for grant hereunder.
4.2 Antidilution. If any subdivision or
combination of shares of Common Stock or any stock dividend,
reorganization, recapitalization, or consolidation or merger
with the Company as the surviving corporation occurs, or if
additional shares or new or different shares or other
securities of the Company or any other issuer are
distributed with respect to the shares of Common Stock
through a spin-off, exchange offer, or other extraordinary
distribution, the Board shall make such adjustments as it
determines appropriate in the number of shares of Common
Stock that may be issued or transferred in the future under
Articles V and VI. The Board shall also adjust as it
determines appropriate the number of shares and Option Price
in outstanding Grants made before the event.
ARTICLE V
OPTIONS
5.1 Grant of Option. Commencing with the 1996
annual meeting of the Company's shareholders and on the date
of each annual meeting thereafter, each Nonemployee Director
whois a member of the Board immediately following each such
annual meeting shall receive a grant of an Option to
purchase 2,000 shares of Common Stock. The Company shall
deliver to the Grantee a Stock Option Notice which shall set
forth such terms and conditions of the Option as may be
determined by the Board to be consistent with the Plan, and
which may include additional provisions and restrictions
that are not inconsistent with the Plan.
5.2 Option Price. The Option Price of each share
of Common Stock subject to an Option shall be 100 percent of
the Fair Market Value of a share of Common Stock on the Date
of Grant.
5.3 Vesting; Term of Option. An Option shall vest
and become fully exercisable on the first date following the
Date of Grant on which is held the annual meeting of the
shareholders of the Company, provided that the Grantee is a
member of the Board immediately preceding such annual
meeting. In the event of the Grantee's death or Disability,
an Option shall become fully vested and immediately
exercisable. The period during which a vested Option may be
exercised shall be ten years from the Date of Grant, subject
to Section 5.4 hereof.
5.4 Termination of Service. If a Grantee's
service as a member of the Board shall be discontinued for
any reason upon the completion of such Grantee's then-
elected term of office, the Grantee shall have the right to
exercise such Option for ten years from the Date of Grant.
If, prior to the completion of a Grantee's then-elected term
of office, such Grantee's service as a member of the Board
shall be terminated for any reason, including, without
limitation, by reason of death or Disability, the Grantee
(or, as the case may be, the executor or administrator of
the estate of the Grantee or the Grantee's guardian or legal
representative) shall have the right, during the period
ending one year after such termination (subject to Section
5.3 hereof concerning the maximum term of an Option), to
exercise such Option to the extent that it was exercisable
at the date of such termination of service and shall not
have been previously exercised.
5.5 Option Exercise. A Grantee may exercise an
Option by delivering notice of exercise to the Company or
its representative as designated by the Board, either with
or without accompanying payment of the Option Price. The
notice of exercise, once delivered, shall be irrevocable.
The Grantee shall pay or cause to be paid the Option Price
in cash, or with the Board's permission, by delivering
shares of Common Stock already owned by the Grantee and
having a fair
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market value on the date of exercise equal to the Option
Price, or a combination of cash and shares. In addition,
the Board may permit the exercise of an Option by delivery
of written notice, subject to the Company's receipt of a
third-party payment in full in cash for the Option Price
prior to the issuance of Common Stock, in the manner and
subject to the procedures as may be established by the
Board. Unless the Board establishes a shorter period which
is set forth in the Stock Option Notice, the Grantee shall
pay the Option Price not later than 30 days after the date
of a statement from the Company following exercise setting
forth the Option Price, fair market value of Common Stock on
the exercise date, the number of shares of Common Stock that
may be delivered in payment of the Option Price, and the
amount of withholding tax due, if any. If the Grantee fails
to pay the Option Price within the specified period, the
Board shall have the right to take whatever action it deems
appropriate, including voiding the option exercise. The
Company shall not issue or transfer shares of Common Stock
upon exercise of a Stock Option until the Option Price is
fully paid.
ARTICLE VI
RESTRICTED STOCK AWARDS
6.1 Restricted Stock Award. Commencing with the
1996 annual meeting of the Company's shareholders and on the
date of each annual meeting thereafter, each Nonemployee
Director who is a member of the Board immediately following
each such annual meeting shall receive a grant of a
Restricted Stock Award for a number of shares of Common
Stock determined by dividing $30,000 by the Fair Market
Value of a share of Common Stock on the date of such annual
meeting, with such resulting number to be rounded upwards to
the nearest increment of ten shares. The Company shall
deliver to the Grantee a Restricted Stock Notice which shall
set forth such terms and conditions of the Restricted Stock
Award as may be determined by the Board to be consistent
with the Plan, and which may include additional provisions
and restrictions that are not inconsistent with the Plan.
Upon the issuance or transfer of a Restricted Stock Award,
the Grantee shall be entitled to vote the shares and to
receive any dividends paid thereon.
6.2 Restriction Period. The rights of a Grantee
in respect of a Restricted Stock Award shall be subject to a
"Restriction Period" (after which restrictions shall lapse),
which shall mean a period commencing on the Date of Grant
and ending on the first date following the Date of Grant on
which is held the annual meeting of the shareholders of the
Company, provided that the Grantee is a member of the Board
immediately preceding such annual meeting.
6.3 Requirement of Service. If the Grantee's
service as a member of the Board is terminated for any
reason during the Restriction Period, the Restricted Stock
Award shall terminate and the shares of Common Stock must be
returned immediately to the Company; provided, however, the
Restriction Period for any Restricted Stock Award shall
expire and all restrictions shall lapse upon the Grantee's
death or Disability.
6.4 Restrictions on Transfer and Legend on Stock
Certificate. During the Restriction Period, a Grantee may
not sell, assign, transfer, pledge, or otherwise dispose of
the shares of Common Stock except in accordance with Section
9.1 hereof. Each certificate for shares issued or
transferred under a Restricted Stock Award shall be held in
escrow by the Company until the expiration of the
Restriction Period.
6.5 Lapse of Restrictions. All restrictions
imposed under the Restricted Stock Award shall lapse
(i) Upon the expiration of the Restriction Period if all
conditions stated in Sections 6.3 and 6.4 have been met or
(ii) As provided under Section 7.1(b). The Grantee shall
then be entitled to delivery of the certificate.
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ARTICLE VII
CHANGE OF CONTROL
7.1 Effect of Grants. Unless the Board shall
otherwise expressly provide in the agreement relating to a
Grant, upon the occurrence of a Change of Control (as
defined below):
(a) Each outstanding Option that is not then
fully exercisable shall automatically become
immediately and fully exercisable and shall remain
exercisable until the termination of the option
exercise period applicable to the Option under
Article V hereof; and
(b) The Restriction Period on an outstanding
Restricted Stock Award shall automatically expire
and all restrictions imposed under such Restricted
Stock Award shall immediately lapse.
7.2 Change of Control. For purposes of the Plan,
a Change of Control shall mean the happening of any of the
following events:
(a) The acquisition by any "person," as that
term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than (i) The Company, (ii) Any
subsidiary of the Company, (iii) Any employee or
directors'benefit plan or stock plan of the
Company or a subsidiary of the Company, or any
trustee or fiduciary with respect to any such plan
when acting in that capacity, or (iv) any person
who acquires such shares pursuant to a transaction
or series of transactions approved prior to such
transaction(s) by the Board) of "beneficial
ownership," as defined in Rule 13d-3 under the
Exchange Act, directly or indirectly, of 20% or
more of the shares of the Company's capital stock,
the holders of which have general voting power
under ordinary circumstances to elect at least a
majority of the Board (or which would have such
voting power but for the application of the Indiana
Control Share Statute) ("Voting Stock");
(b) the first day on which less than two-
thirds of the total membership of the Board shall
be Continuing Directors (as that term is defined in
Article 6(f) of the Company's Amended and Restated
Articles of Incorporation);
(c) approval by the shareholders of the
Company of a merger, share exchange, or
consolidation of the Company (a "Transaction"),
other than a Transaction which would result in the
Voting Stock of the Company outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity) more
than 50% of the Voting Stock of the Company or such
surviving entity immediately after such
Transaction; or
(d) approval by the shareholders of the
Company of a complete liquidation of the Company or
a sale or disposition of all or substantially all
the assets of the Company.
For purposes hereof, the term "subsidiary" means a
corporation of which the Company owns directly or indirectly
50% or more of the voting power.
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ARTICLE VIII
EFFECTIVE DATE, TERMINATION AND AMENDMENT
8.1 Effective Date. The Plan shall become
effective after its adoption by the Board and on the date of
its approval by the affirmative votes of the shareholders of
the Company present, or represented, and entitled to vote at
a meeting duly held in accordance with applicable state law
and the Articles of Incorporation and By-laws of the
Company.
8.2 Termination. The Plan shall terminate
on the fifth anniversary of the date the Plan is approved by
the shareholders of the Company. The Board may, in its sole
discretion and at any earlier date, terminate the Plan.
Notwithstanding the foregoing, no termination of the Plan
shall in any manner affect any Grant theretofore granted
without the consent of the Grantee or the permitted
transferee of the Grant.
8.3 Amendment. The Board may at any time
and from time to time and in any respect, amend or modify
the Plan; provided, however, that, solely to the extent
necessary to comply with Rule 16b-3 (i) the Board may not
act more than once every six months to amend the provisions
of the Plan relating to the determination of the amount,
price or timing of any Grant under the Plan; and (ii) the
approval of the Company's shareholders will be required for
any amendment that (a) changes the class of persons eligible
for the Grants, (b) increases (other than as described in
Section 4.2 hereof) the maximum number of shares of Common
Stock subject to grant under the Plan, as specified in
Section 4.1 hereof, or (c) materially increases the benefits
accruing to Grantees under the Plan, within the meaning of
Rule 16b-3. Any such approval shall be by the affirmative
votes of the shareholders of the Company present, or
represented, and entitled to vote at a meeting duly held in
accordance with applicable state law and the Articles of
Incorporation and By-laws of the Company. Notwithstanding
the foregoing, no amendment or modification of the Plan
shall in any manner affect any Grant theretofore granted
without the consent of the Grantee or the permitted
transferee of the Grant.
ARTICLE IX
MISCELLANEOUS
9.1 Nontransferability of Grant. No Grant shall
be transferred by a Grantee other than by will or the laws
of descent and distribution. No transfer of a Grant by the
Grantee by will or by laws of descent and distribution shall
be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as
the Board may deem necessary to establish the validity of
the transfer. During the lifetime of the Grantee, the Grant
shall be exercisable only by such Grantee, except that, in
the case of a Grantee who is legally incapacitated, the
Grant shall be exercisable by the Grantee's guardian or
legal representative.
9.2 Rights as Shareholder. A Grantee or the
permitted transferee of a Grant shall have no rights as a
shareholder with respect to any shares subject to such Grant
prior to the purchase of such shares by exercise of an
Option, or with respect to a Restricted Stock Award prior to
the lapse of the restrictions, except as provided herein or
in the applicable Stock Option Notice or Restricted Stock
Notice. Nothing contained herein, or in the Stock Option
Notice or Restricted Stock Notice relating to any Grant
shall create an obligation on the part of the Company to
repurchase any shares of Common Stock purchased hereunder.
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9.3 Service on Board. Nothing in the Plan, in the
grant of any Option or Restricted Stock Award or in any
Stock Option Notice or Restricted Stock Notice shall confer
upon any Nonemployee Director the right to continue service
as a member of the Board.
9.4 Compliance with Law. The Plan, the exercise
of Grants, and the obligations of the Company to issue or
transfer shares of Common Stock under Grants shall be
subject to all applicable laws and regulations and to
approvals by any governmental or regulatory agency as may be
required. The Board may revoke any Grant if it is contrary
to law or modify a Grant to bring it into compliance with
any valid and mandatory law or government regulation.
9.5 Section 83(b) Election. If a Grantee shall
make an election pursuant to Section 83(b) of the Code with
respect to a Restricted Stock Award, the Grantee shall,
within 30 days following the Date of Grant, furnish to the
Company a copy of such election.
9.6 Plan Binding on Successors. The Plan shall
be binding upon the Company, its successors and assigns,
and the Grantee, the Grantee's executor, administrator and
permitted transferee.
9.7 Construction and Interpretation. Whenever
used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender.
Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the
Plan.
9.8 Severability. If any provision of the Plan or
any Stock Option Notice or Restricted Stock Notice shall be
determined to be illegal or unenforceable by any court of
law in any jurisdiction, the remaining provisions hereof and
thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
9.9 Governing Law. The validity and construction
of this Plan and of any Stock Option Notice or Restricted
Stock Notice shall be governed by the laws of the State of
Indiana.
-7-
<PAGE>
December 12, 1996
Guidant Corporation
111 Monument Circle, 29th Floor
Indianapolis, IN 46204-5129
Ladies and Gentlemen:
On or about November 13, 1996, Guidant Corporation, an Indiana
corporation (the "Company"), will file with the Securities and Exchange
Commission on Form S-8 its Registration Statement ("Registration Statement")
relating to 250,000 shares of the Company's common stock, without par value
(the "Common Stock"), that may be issued or transferred by the Company upon
the exercise of stock options or pursuant to restricted stock grants, that
may be granted to non-employee directors of the Company under the Guidant
Corporation 1996 Nonemployee Directors Stock Plan (the "Plan"). Pursuant to
the Plan, 3,570 shares have been issued to non-employee directors of the
Company pursuant to restricted stock grants.
With respect to the Company and shares of its Common Stock, it is my
opinion that:
A. The Company is a corporation duly organized and validly
existing under the laws of the State of Indiana;
B. The 250,000 shares of Common Stock referred to above are
duly authorized;
C. The 3,570 shares which have already been issued pursuant to
restricted stock grants in accordance with all of the
conditions of the Plan, have been validly issued and are fully
paid and nonassessable subject, however, to termination of the
grant and the requirement for re-transfer of the shares to the
Company if the grantee does not comply with the restrictions
of the restricted stock grant; and
<PAGE>
Page 2
D. The remaining 246,430 shares available for issuance pursuant
to the Plan will be validly issued and outstanding, fully paid
and nonassessable upon issuance or transfer:
(i) pursuant to the exercise of stock options in
accordance with the terms and subject to the
conditions of the Plan and the payment of the option
price stated in such options; and
(ii) pursuant to restricted stock grants awarded in
accordance with all of the conditions of the Plan
subject, however, to termination of the grant and
the requirement for re-transfer of the shares to the
Company if the grantee does not comply with the
restrictions of the restricted stock grant.
In arriving at the foregoing opinions, I or members of my staff have
examined corporate records, plans, agreements and other documents of the
Company. I am a member of the bar of the State of Indiana and express no
opinion as to the laws of any other jurisdiction.
I consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving such consent, I do not admit that I come
within the category of persons whose consent is required under Section 7 of
the Securities Exchange Act of 1933, as amended, or the Rules and Regulations
of the Securities and Exchange Commission thereunder.
Sincerely,
GUIDANT CORPORATION
By: s/J. B. King
-------------------------------
J. B. King
Vice President, General Counsel
and Secretary
JBK:cl
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Guidant Corporation 1996 Nonemployee
Directors Stock Plan of our reports dated February 13, 1996 with respect to
the consolidated financial statements of Guidant Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31,
1995 and the related financial statement schedule included therein, filed
with the Securities and Exchange Commission.
s/Ernst & Young LLP
December 12, 1996
