GDT


EXHIBIT 3.1

ARTICLES OF INCORPORATION
(As Amended May 18, 1998)

GUIDANT CORPORATION
(an Indiana corporation)

1. The name of the Corporation is Guidant Corporation.

2. The street address of the principal office of the Corporation is 307
East McCarty Street
, Indianapolis, Indiana, 46285
, and the name and post-office
address of its Resident Agent in charge of such office is Mr. J. B. King, 307
East McCarty Street
, Indianapolis, Indiana, 46225
.

3. The total number of authorized shares is 550,000,000.

4. The designation of the different classes of shares of the Corporation,
and the number of shares of each class, are as follows:

(a) Common Stock consisting of 500,000,000 shares. Except as
otherwise required by law and subject to the rights of holders of Preferred
Stock, the Common Stock shall have unlimited voting rights and each
outstanding share of Common Stock shall, when validly issued by the
Corporation, entitle the record holder thereof to one vote at all
shareholders' meetings on all matters submitted to a vote of the
shareholders of the Corporation. In the event of any liquidation,
dissolution or winding-up of the Corporation, either voluntary or
involuntary, after payment shall have been made to the holders of the
Preferred Stock of the full amount to which they shall be entitled, the
holders of the Common Stock shall be entitled, to share ratably according
to the number of shares of Common Stock held by them, in all remaining
assets of the Corporation available for distribution to its shareholders.

(b) Preferred Stock, consisting of 50,000,000 shares, which may be
issued in such series and which shall possess such relative rights,
preferences, qualifications, limitations or restrictions as established by
amendment to these Articles of Incorporation adopted by the Board of
Directors without need for shareholder approval, which is vested to the
fullest extent permitted by law with authority to fix the relative rights,
preferences,
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qualifications, limitations or restrictions for each series of such class
of shares established by it, including, without limitation of the
generality of the foregoing, the following:

(1) The series, if any, of preferred to be issued and manner of
its differentiation from other series of Preferred Stock;

(2) The number of shares which shall initially constitute each
series;

(3) The rate or rates and the time or times at which dividends
and other distributions on the shares of each series shall be paid,
the relationship or priority of such dividends to those payable on
Common Stock or to other series of Preferred Stock, and whether or not
any such dividends shall be cumulative;

(4) The amount payable on the shares of each series in the event
of the voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation, and the relative priorities, if
any, to be accorded such payments in liquidation;

(5) The terms and conditions upon which either the Corporation
may exercise a right to redeem shares of each series or upon which the
holder of such shares may exercise a right to require redemption of
such shareholder's Preferred Stock, including any premiums or
penalties applicable to exercise of such rights;

(6) Whether or not a sinking fund shall be created for the
redemption of the shares of a series, and the terms and conditions of
any such fund;

(7) Whether any shares shall have no voting rights or full or
limited voting rights;

(8) Rights, if any, to convert any shares of Preferred Stock
either into shares of Common Stock or into other series of Preferred
Stock and the prices, premiums or penalties, ratios and other terms
applicable to any such conversion;

(9) Restrictions on acquisition, rights of first refusal or
other limitations on transfer as may be

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applicable to any series, including any series intended to be offered
to a special class or group, such as corporate employees; and

(10) Any other relative rights, preferences, limitations,
qualifications or restrictions on the Preferred Stock or any series of
such shares.

(c) A total of 1,500,000 shares of the 50,000,000 shares of
authorized Preferred Stock are designated as "Series A Participating Preferred
Stock" (the "Series A Preferred Stock"), which shall possess the rights,
preferences, qualifications, limitations, and restrictions set forth below:

(1) The holders of shares of Series A Preferred Stock shall have
the following rights to dividends and distributions:

(i) The holders of shares of Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash
on the first day of April, July, October and January in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (i) $.05 or (ii)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend or distribution payable in shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, without
par value of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of share of Series A Preferred Stock. If on any Quarterly Dividend
Payment Date the Corporation's Articles of Incorporation shall limit the amount
of dividends which may be paid on the Series A Preferred Stock to an amount less
than that provided above, such dividends will accrue and be paid in the maximum
permissible amount and the short-fall from the amount provided above shall be a
cumulative dividend requirement and be carried forward to subsequent Quarterly
Dividend Payment Dates.

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(ii) In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the second preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

(iii) When, as and if the Corporation shall declare a dividend or
distribution on the Common Stock (other than a dividend payable in shares of
Common Stock), the Corporation shall at the same time declare a dividend or
distribution on the Series A Preferred Stock as provided in this Subsection
4(c)(1) and no such dividend or distribution on the Common Stock shall be paid
or set aside for payment on the Common Stock unless such dividend or
distribution on the Series A Preferred Stock shall be simultaneously paid or set
aside for payment; provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend, of $.05 per share on the Series A Preferred Stock shall nevertheless
be payable, when, as and if declared by the Board of Directors, on such
subsequent Quarterly Dividend Payment Date.

(iv) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the date of issue of such shares of
Series A Preferred Stock, unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in which event such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the

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determination
of holders of shares of Series A Preferred Stock entitled to
receive payment of dividend or distribution declared thereon, which record date
shall be no more than 60 days prior to the relevant Quarterly Dividend Payment
Date.

(2) The holders of shares of Series A Preferred Stock shall have
the following voting rights:

(i) The holders of outstanding Series A Preferred Stock shall
be entitled to vote as a class for the election of two (2) directors if the
Corporation shall fail for six quarters to pay the dividend payable with respect
to such shares pursuant to paragraph (a) hereof. Such limited voting rights may
be exercised at the next annual meeting of shareholders following the failure to
pay a dividend for the sixth quarter and at each succeeding annual meeting of
shareholders until payment of all such preferred dividends which are in arrears
has been made or provided for (the "Dividend Date"), at which time the right to
vote for election of two directors conferred upon the holders of the outstanding
Series A Preferred Stock shall cease. Each of such two directors shall be
elected to one of the three classes of directors so that the three classes shall
be as equal in number as may be feasible and shall be elected to hold office for
a term expiring at the earlier of (i) the expiration of the term of the class to
which he or she is elected or (ii) the Dividend Date. In addition to the
conditional right to vote for election of two directors, any proposal to amend
the relative rights and privileges of shares of Series A Preferred Stock
(including those conferred by this Paragraph 4(c)(2)(i) upon which the holders
of such Series A Preferred Stock are entitled by the provisions of the Indiana
Business Corporation Law to vote upon as a class shall require, instead of a
vote of the holders of a majority of such shares, the affirmative vote of the
holders of two-thirds (2/3) of such shares.

(ii) except as specified in Paragraph 4(c)(2)(i) above, the
holders of Series A Preferred Stock shall not be entitled to any vote on any
matter, including questions of merger, consolidation, and the sale of all or
substantially all of the assets of the Corporation.

(3) The Corporation shall be subject to the following
restrictions:

(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section
4(c)(1) are in arrears, thereafter

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and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not

a. declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;

b. declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;

c. except as permitted by Subparagraph 4(c)(3)(i)(d), redeem or
purchase or otherwise acquire for consideration shares of any stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or

d. purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes, provided that the Corporation may at any
time purchase or otherwise acquire share of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior

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(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Preferred Stock.

(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph
4(c)(3)(i), purchase or otherwise acquire shares at such time and in such
manner.

(iii) The Corporation shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of October 17, 1994 between the Corporation and Bank
One, Indianapolis, NA, a copy of which is on file with the Secretary of the
Corporation at its principal executive office and shall be made available to
shareholders of record without charge upon written request therefor addressed to
said Secretary. Notwithstanding the foregoing sentence, nothing contained herein
shall prohibit or restrict the Corporation from issuing for any purpose any
series of preferred stock with rights and privileges similar to or different
from those of the Series A Preferred Stock.

(4) Any shares of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation without designation as to series, become authorized but
unissued shares of preferred stock and may be reissued as part of a new series
of preferred stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.

(5) Upon any voluntary liquidation, dissolution or winding upon of the
Corporation, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received, subject to adjustment
as hereinafter provided, an aggregate amount equal to (a) $100 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment or (b) if greater, an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed per share
to holders of Common Stock plus an amount equal to accrued and unpaid

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dividends and distributions thereon, whether or not declared, to the date of
such payment, or (ii) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up, disregarding for this purpose the amounts referred to
in clause (i)(b) of this Subsection 4(c)(5). In the event the Corporation shall
at any time declare or pay any dividend or make any distribution on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the provision in clause (i) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

(6) In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case proper provision shall be made so that the
shares of Series A Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
The Corporation shall not consummate any such consolidation, merger, combination
or other transaction unless prior thereto the Corporation and the other party or
parties to such transaction shall have so provided in any agreement relating
thereto. In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set

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forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

(7) The shares of Series A Preferred Stock shall not be redeemable.
Notwithstanding the foregoing sentence, the Corporation may acquire shares of
Series A Preferred Stock in any other manner permitted by law, hereby and the
Articles of Incorporation of the Corporation, as from time to time amended.

(8) The Articles of Incorporation of the Corporation shall not be
amended in any manner which would increase or decrease the aggregate number of
authorized shares of Series A Preferred Stock or alter or change the powers,
preferences or special rights of the shares of Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of two-thirds
or more of the outstanding shares of Series A Preferred Stock, voting together
as a single class.

5. The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and it is
expressly provided that the same are intended to be in furtherance, and not in
limitation or exclusion of, the powers conferred by statute:

(a) The initial number of directors of the Corporation shall be
eight. The number of directors may be specified by or fixed in accordance
with the By-laws of the Corporation at any number; provided, however, such
number shall not be less than 7 nor
more than 19. In the absence of a By-
law provision specifying or fixing the number of directors, the number
shall be eight.

(b) The Board of Directors shall be divided into three classes,
with the term of office of one class expiring each year. Three directors of
the first class shall be elected to hold office for a term expiring at the
1995 annual meeting, three directors of the second class shall be elected
to hold office for a term expiring at the 1996 annual meeting, and two
directors of the third class shall be elected to hold office for a term
expiring at the 1997 annual meeting. Commencing with the annual meeting of
shareholders in 1995, each class of directors whose term

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shall then expire shall be elected to hold office for a three-year term. In
the case of any vacancy on the Board of Directors, including a vacancy
created by an increase in the number of directors, the vacancy shall be
filled by election of the Board of Directors with the director so elected
to serve for the remainder of the term of the director being replaced or,
in the case of an additional director, for the remainder of the term of the
class to which the director has been assigned. All directors shall continue
in office until the election and qualification of their respective
successors in office. When the number of directors is changed, any newly
created directorships or any decrease in directorships shall be so assigned
among the classes by a majority of the directors then in office, though
less than a quorum, as to make all classes as nearly equal in number as
possible. No decrease in the number of directors shall have the effect of
shortening the term of any incumbent director. Election of directors need
not be by written ballot unless the By-Laws so provide.

(c) Any director or directors may be removed from office at any time,
with or without cause, by the affirmative vote of at least 80% of the votes
entitled to be cast by holders of all the outstanding shares of Voting
Stock (as defined in Article 6 hereof), voting together as a single class.

(d) Notwithstanding any other provision of these Articles of
Incorporation or of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any
particular class of Voting Stock required by law or these Articles of
Incorporation, the affirmative vote of at least 80% of the votes entitled
to be cast by holders of all the outstanding shares of Voting Stock, voting
together as a single class, shall be required to alter, amend or repeal
this Article.

(e) The Board of Directors, by a majority vote of the actual number of
directors elected and qualified from time to time shall have the exclusive
power to make, alter, amend or repeal the By-laws of the Corporation. The
shareholders of the Corporation shall have no power to make, alter, or
repeal the By-laws of the Corporation.

(f)(1) A conflict of interest transaction is a transaction with the
Corporation in which a director of the Corporation has a direct or indirect
interest. A conflict

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of interest transaction is not voidable by the Corporation solely because
of the Director's interest in the transaction if any one (1) of the
following is true:

(i) The material facts of the transaction and the
Director's interest were disclosed or known to the Board of
Directors or a committee of the Board of Directors and the Board
of Directors or committee authorized, approved, or ratified the
transaction.

(ii) The material facts of the transaction and the
Director's interest were disclosed or known to the shareholders
entitled to vote and they authorized, approved, or ratified the
transaction.

(iii) The transaction was fair to the Corporation.

(2) For purposes of Subsection 5(f)(1), a Director of the
Corporation has an indirect interest in a transaction if:

(i) Another entity in which the Director has a material
financial interest or in which the Director is a general partner
is a party to the transaction; or

(ii) Another entity, of which the Director is a director,
officer, or trustee, is a party to the transaction and the
transaction is, or is required to be, considered by the Board of
Directors of the Corporation.

(3) For purposes of Paragraph 5(f)(1)(i), a conflict of interest
transaction is authorized, approved, or ratified if it receives the
affirmative vote of a majority of the Directors on the Board of
Directors (or on the committee) who have no direct or indirect
interest in the transaction, but a transaction may not be authorized,
approved, or ratified under this Section by a single Director. If a
majority of the Directors who have no direct or indirect interest in
the transaction vote to authorize, approve, or ratify the transaction,
a quorum shall be deemed present for the purpose of taking action
under this

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Section.
The presence of, or a vote cast by, a Director with a direct
or indirect interest in the transaction does not affect the validity
of any action taken under Paragraph 5(f)(1), if the transaction is
otherwise authorized, approved, or ratified as provided in such
Subsection.

(4) For purposes of Paragraph 5(f)(1)(ii), a conflict of
interest transaction is authorized, approved, or ratified if it
receives the affirmative vote of the holders of shares representing a
majority of the votes entitled to be cast. Shares owned by or voted
under the control of a Director who has a direct or indirect interest
in the transaction, and shares owned by or voted under the control of
an entity described in Subsection 5(f)(2), may be counted in such a
vote of shareholders.

(g) Any contract, transaction or act of the Corporation or of the
Board of Directors which shall be authorized, approved or ratified by a
majority of a quorum of the shareholders entitled to vote at any annual
meeting or at any special meeting called for that purpose, or by such vote
as may be required by any provision of these Articles of Incorporation, or
by any applicable statute, shall be as valid and binding as if such
contract, transaction or act had been authorized, approved or ratified by
every shareholder of the Corporation.

(h)(1) Every Eligible Person shall be indemnified by the Corporation
to the fullest extent permitted by the Indiana Business Corporation
Law, as the same exists or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than the law
permitted prior to such amendment) ("IBCL"), against all Liability and
reasonable Expense that may be incurred by him or her in connection
with or resulting from any Claim.

(2) Expenses incurred by any Eligible Person with respect to any
Claim shall be advanced by the Corporation prior to final disposition;
provided, however, that, if the IBCL requires, the payment of such
expenses in advance of the final disposition of the proceeding shall
be made only upon delivery to the Corporation of an undertaking to
repay all amounts so

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advanced if it shall ultimately be determined that he or she is not
entitled to be indemnified under Subsection 5(h)(1), or otherwise.

(3) The term "Claim" as used in this Section 5(h) shall include
every pending, threatened, or completed claim, action, suit, or
proceeding and all appeals thereof (whether brought by or in the right
of this Corporation or any other corporation or otherwise), civil,
criminal, administrative, or investigative, formal or informal, in
which an Eligible Person may become involved, as a party or otherwise:

(i) by reason of his or her being or having been an
Eligible Person, or

(ii) by reason of any action taken or not taken by him or
her in his or her capacity as an Eligible Person, whether or not
he or she continued in such capacity at the time such Liability
or Expense shall have been incurred.

(4) The term "Eligible Person" as used in this Section 5(h)
shall mean every person (and the estate, heirs, and personal
representatives of such person) who is or was a Director, officer,
employee, or agent of the Corporation or is or was serving at the
request of the Corporation as a Director, officer, employee, agent, or
fiduciary of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other organization or
entity, whether for profit or not. An Eligible Person shall also be
considered to have been serving an employee benefit plan at the
request of the Corporation if his or her duties to the Corporation
also imposed duties on, or otherwise involved services by, him or her
to the plan or to participants in or beneficiaries of the plan.

(5) The terms "Liability" and "Expense" as used in this Section
5(h) shall include, but shall not be limited to, counsel fees and
disbursements and amounts of judgments, fines, or penalties against
(including excise taxes assessed with respect to an employee benefit
plan), and amounts paid in settlement by or on behalf of an Eligible
Person.

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(6) The rights of indemnification provided in this Section 5(h)
shall be in addition to any rights to which any Eligible Person may
otherwise be entitled. Irrespective of the provisions of this Section
5(h), the Board of Directors may, at any time from time to time, (1)
approve indemnification of any Eligible Person to the full extent
permitted by the provisions of applicable law at the time in effect,
whether on account of past or future transactions, and (2) authorize
the Corporation to purchase and maintain insurance on behalf of any
Eligible Person against any Liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the
power to indemnify him or her against such liability.

(7) The provisions of this Section 5(h) shall be deemed to be a
contract between the Corporation and each Eligible Person, and an
Eligible Person's rights hereunder shall not be diminished or
otherwise adversely affected by any repeal, amendment, or modification
of this Section 5(h) that occurs subsequent to such person becoming an
Eligible Person.

(8) The provisions of this Section 5(h) shall be applicable to
Claims made or commenced after the adoption hereof, whether arising
from acts or omissions to act occurring before or after the adoption
hereof.

6. In addition to all other requirements imposed by law and these
Articles of Incorporation, and except as otherwise expressly provided in Section
6(c), none of the actions or transactions listed below shall be effected by the
Corporation, or approved by the Corporation as a shareholder of any majority-
owned subsidiary of the Corporation if, as of the record date for the
determination of the shareholders entitled to vote thereon, any Related Person
(as hereinafter defined) exists, unless the applicable requirements of Sections
(b), (c), (d), (e), and (f) of this Article 6 are satisfied.

(a) The actions or transactions within the scope of this Article 6
are as follows:

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(1) any merger or consolidation of the Corporation or any of its
subsidiaries into or with such Related Person;

(2) any sale, lease, exchange, or other disposition of all or
any substantial part of the assets of the Corporation or any of its
majority-owned subsidiaries to or with such Related Person;

(3) the issuance or delivery of any Voting Stock (as hereinafter
defined) or of voting securities of any of the Corporation's majority-
owned subsidiaries to such Related Person in exchange for cash, other
assets or securities, or a combination thereof;

(4) any voluntary dissolution or liquidation of the Corporation;

(5) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its subsidiaries, or any
other transaction (whether or not with or otherwise involving a
Related Person) that has the effect, directly or indirectly, of
increasing the proportionate share of any class or series of capital
stock of the Corporation, or any securities convertible into capital
stock of the Corporation or into equity securities of any subsidiary,
that is beneficially owned by any Related Person; or

(6) any agreement, contract, or other arrangement providing for
any one or more of the actions specified in the foregoing Subsections
(1) through (5) of this Section 6(a).

(b) The actions and transactions described in Section 6(a) shall have
been authorized by the affirmative vote of at least 80% of all of the votes
entitled to be cast by holders of the outstanding shares of Voting Stock,
voting together as a single class.

(c) Notwithstanding Section 6(b), the 80% voting requirement shall
not be applicable if any action or transaction specified in Section 6(a) is
approved by the Corporation's Board of Directors and by a majority of the
Continuing Directors.

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(d) Unless approved by a majority of the Continuing Directors, after
becoming a Related Person and prior to consummation of such action or
transaction:

(1) the Related Person shall not have acquired from the
Corporation or any of its subsidiaries any newly issued or treasury
shares of capital stock or any newly issued securities convertible
into capital stock of the Corporation or any of its majority-owned
subsidiaries, directly or indirectly (except upon conversion of
convertible securities acquired by it prior to becoming a Related
Person or as a result of a pro rata stock dividend or stock split or
other distribution of stock to all shareholders pro rata);

(2) the Related Person shall not have received the benefit
directly or indirectly (except proportionately as a shareholder) of
any loans, advances, guarantees, pledges, or other financial
assistance or tax credits provided by the Corporation or any of its
majority owned subsidiaries, or made any major changes in the
Corporation's or any of its majority owned subsidiaries' businesses or
capital structures or reduced the current rate of dividends payable on
the Corporation's capital stock below the rate in effect immediately
prior to the time such Related Person became a Related Person; and

(3) the Related Person shall have taken all required actions
within its power to ensure that the Corporation's Board of Directors
included representation by Continuing Directors at least proportionate
to the voting power of the shareholdings of Voting Stock of the
Corporation's Remaining Public Shareholders (as hereinafter defined),
with a Continuing Director to occupy an additional Board position if a
fractional right to a director results and, in any event, with at
least one Continuing Director to serve on the Board so long as there
are any Remaining Public Shareholders.

(e) A proxy statement responsive to the requirements of the
Securities Exchange Act of 1934, as amended, whether or not the Corporation
is then subject to such requirements, shall be mailed to the shareholders
of the Corporation for the purpose of soliciting shareholder

16
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approval of such action or transaction and shall contain at the front
thereof, in a prominent place, any recommendations as to the advisability
or inadvisability of the action or transaction which the Continuing
Directors may choose to state and, if deemed advisable by a majority of the
Continuing Directors, the opinion of an investment banking firm selected by
a majority of the Continuing Directors as to the fairness (or not) of the
terms of the action or transaction from a financial point of view to the
Remaining Public Shareholders, such investment banking firm to be paid a
reasonable fee for its services by the Corporation. The requirements of
this Section 6(e) shall not apply to any such action or transaction which
is approved by a majority of the Continuing Directors.

(f) For the purpose of this Article 6:

(1) the term "Related Person" shall mean any other corporation,
person, or entity which beneficially owns or controls, directly or
indirectly, 5% or more of the outstanding shares of Voting Stock, and
any Affiliate or Associate (as those terms are defined in the General
Rules and Regulations under the Securities Exchange Act of 1934) of a
Related Person; provided, however, that the term Related Person shall
--------- -------
not include (a) the Corporation or any of its subsidiaries, (b) any
profit-sharing, employee stock ownership or other employee benefit
plan of the Corporation or of any subsidiary of the Corporation or any
trustee of or fiduciary with respect to any such plan when acting in
such capacity, (c) Eli Lilly and Company or (d) Lilly Endowment, Inc.;
and further provided, that no corporation, person, or entity shall be
------- --------
deemed to be a Related Person solely by reason of being an Affiliate
or Associate of Eli Lilly and Company or Lilly Endowment, Inc.;

(2) a Related Person shall be deemed to own or control, directly
or indirectly, any outstanding shares of Voting Stock owned by it or
any Affiliate or Associate of record or beneficially, including
without limitation shares:

(i) which it has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants, or
options, or otherwise; or

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<PAGE>

(ii) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of Paragraph
6(f)(2)(i)), by any other corporation, person, or other entity
with which it or its Affiliate or Associate has any agreement,
arrangement, or understanding for the purpose of acquiring,
holding, voting, or disposing of Voting Stock, or which is its
Affiliate (other than the Corporation) or Associate (other than
the Corporation);

(3) the term "Voting Stock" shall mean all shares of any
class of capital stock of the Corporation which are entitled to vote
generally in the election of directors;

(4) the term "Continuing Director" shall mean a director who
is not an Affiliate or Associate or representative of a Related Person
and who was a member of the Board of Directors of the Corporation
immediately prior to the time that any Related Person involved in the
proposed action or transaction became a Related Person or a director
who is not an Affiliate or Associate or representative of a Related
Person and who was nominated by a majority of the remaining Continuing
Directors; and

(5) the term "Remaining Public Shareholders" shall mean the
holders of the Corporation's capital stock other than the Related
Person.

(g) A majority of the Continuing Directors of the Corporation shall
have the power and duty to determine for the purposes of this Article 6, on
the basis of information then known to the Continuing Directors, whether
(i) any Related Person exists or is an Affiliate or an Associate of another
and (ii) any proposed sale, lease, exchange, or other disposition of part
of the assets of the Corporation or any majority-owned subsidiary involves
a substantial part of the assets of the Corporation or any of its
subsidiaries. Any such determination by the Continuing Directors shall be
conclusive and binding for all purposes.

(h) Nothing contained in this Article 6 shall be construed to relieve
any Related Person or any Affiliate or Associate of any Related Person from
any fiduciary obligation imposed by law.

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(i) The fact that any action or transaction complies with the
provisions of this Article 6 shall not be construed to waive or satisfy any
other requirement of law or these Articles of Incorporation or to impose
any fiduciary duty, obligation, or responsibility on the Board of Directors
or any member thereof, to approve such action or transaction or recommend
its adoption or approval to the shareholders of the Corporation, nor shall
such compliance limit, prohibit, or otherwise restrict in any manner the
Board of Directors, or any member thereof, with respect to evaluations of
or actions and responses taken with respect to such action or transaction.
The Board of Directors of the Corporation, when evaluating any actions or
transactions described in Section 6(a), shall, in connection with the
exercise of its judgment in determining what is in the best interests of
the Corporation and its shareholders, give due consideration to all
relevant factors, including without limitation the effects on shareholders,
employees, suppliers, and customers of the Corporation, and communities in
which offices or other facilities of the Corporation are located, and any
other factors a Director considers pertinent.

(j) Notwithstanding any other provision of these Articles of
Incorporation or of law which might otherwise permit a lesser vote or no
vote, but in addition to any affirmative vote of the holders of any
particular class of Voting Stock required by law or these Articles of
Incorporation, the affirmative vote of the holders of at least 80% of the
votes entitled to be cast by holders of all the outstanding shares of
Voting Stock, voting together as a single class, shall be required to
alter, amend, or repeal this Article 6.

19

 

Item 5.03    Amendments to Articles of Incorporation or Bylaws; Change in
             Fiscal Year
 
         On December 15, 2004, in connection with the Rights Agreement,
Guidant's board of directors approved an amendment to Paragraph 4(c) of
Guidant's Articles of Incorporation setting forth the rights, powers and
preferences of the Series A Participating Preferred Stock. Guidant filed the
Articles of Amendment to the Articles of Incorporation of Guidant (the
"Articles of Amendment") with the Secretary of State of the State of Indiana on
December 17, 2004.
 
 
                                       4
 
<PAGE>
 
         The summary of the rights and preferences of the Series A
Participating Preferred Stock set forth in Exhibit C to the Rights Agreement is
incorporated into this Item 5.03 by reference and is qualified in its entirety
by reference to the full text of the Articles of Amendment. A copy of the
Articles of Amendment is attached hereto as Exhibit 3.1 and is incorporated
herein by reference.