<PAGE>   1
 
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                  FORM 10-K/A
(MARK ONE)
 
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934.
     FOR THE FISCAL YEAR ENDED JUNE 30, 1996.
 
                                       OR
 
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934.
     FOR THE TRANSITION PERIOD FROM           TO           .
 
                        COMMISSION FILE NUMBER: 0-19713
 
                                VENTRITEX, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
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           DELAWARE                      77-0056340                        94086
(STATE OR OTHER JURISDICTION OF        (I.R.S. EMPLOYER                 (ZIP CODE)
INCORPORATION OR ORGANIZATION)       IDENTIFICATION NO.)
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                  701 East Evelyn Avenue, Sunnyvale, CA 94086
                    (Address of principal executive offices)
 
       Registrant's telephone number, including area code: (408) 738-4883
 
        Securities registered pursuant to Section 12(b) of the Act: None
 
          Securities registered pursuant to Section 12(g) of the Act:
 
                         Common Stock, $0.01 par value
                                (Title of class)
 
     Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X      No____
 
     Indicate by check mark if disclosures of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. [X]
 
     The aggregate value of voting stock held by non-affiliates of the
Registrant was approximately $295,631,108 as of August 9, 1996, based upon the
closing sale price of the Registrant's Common Stock reported for such date on
the Nasdaq National Market. Shares of Common Stock held by each executive
officer and director and by each person who owns 10% or more of the outstanding
Common Stock have been excluded in that such persons may be deemed to be
affiliates. The determination of affiliate status is not necessarily a
conclusive determination for other purposes. As of June 30, 1996, the Registrant
had outstanding 20,878,095 shares of Common Stock.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Certain information is incorporated into Part III of this report by
reference to the Proxy Statement for the Registrant's 1996 annual meeting of
stockholders to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A not later than 120 days after the end of the fiscal year covered
by this Form 10-K. Certain information is incorporated into Parts II and IV of
this report by reference to the Registrant's annual report to stockholders for
the year ended June 30, 1996.
 
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<PAGE>   2
 
                                EXPLANATORY NOTE
 
     On August 15, 1996, Ventritex, Inc. (the "Company") filed its Annual Report
on Form 10-K for the fiscal year ended June 30, 1996, with the Securities and
Exchange Commission (the "Commission").
 
     On September 11, 1996, the Company filed with the Commission its first
amended Annual Report on Form 10-K/A, together with Exhibit 13.1 thereto, as
amended. The sole purpose for filing the first amended Annual Report was to
amend certain portions of Exhibit 13.1 thereto (Portions of Annual Report to
Stockholders Incorporated by Reference) in order to reflect the August 21, 1996
completion of the Company's offering of $57,500,000 aggregate principal amount
of 5 3/4% Convertible Subordinated Notes due August 15, 2001 (the "Offering").
Accordingly, the first amended Annual Report on Form 10-K/A consisted only of
the cover page, the signature page and Exhibit 13.1, as amended.
 
     On January 15, 1997, the Company filed with the Commission its second
amended Annual Report on Form 10-K/A, together with Financial Statement Schedule
II and Exhibit 13.1 thereto, each as amended. The two purposes for filing the
second amended Annual Report were: (1) to amend Financial Statement Schedule II
(Valuation and Qualifying Accounts) to include data relating to inventory
reserves for the years ended June 30, 1994, 1995 and 1996; and (2) to amend
Exhibit 13.1 thereto (Portions of Annual Report to Stockholders Incorporated by
Reference) to include the Report of Ernst & Young LLP, Independent Auditors as
of July 25, 1996, except as to Note 10, for which the date is August 21, 1996.
The second amended Annual Report also includes a Consent of Ernst & Young LLP,
Independent Auditors, dated January 10, 1997.
 
     The Company is now filing with the Commission its third amended Annual
Report on Form 10K/A, together with Exhibit 13.1 thereto, each as amended. The
purpose for filing the third amended Annual Report is to respond to the
Commission's comments by discussing in greater detail the facts and
circumstances (including methodology and timing considerations) surrounding
certain inventory write-downs in fiscal 1996. The third amended Annual Report
also includes a Consent of Ernst & Young LLP, Independent Auditors, dated
February 19, 1997.
 
   
     For ease of reference, this third amended Annual Report contains all of the
information required to be set forth in an Annual Report on Form 10-K.
    
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                                VENTRITEX, INC.
 
                                     INDEX
 
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                                                                                          PAGE
                                                                                         NUMBER
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PART I.................................................................................     1
          Item 1.    BUSINESS..........................................................     1
                     The Company.......................................................     1
                     Background........................................................     1
                     Market............................................................     2
                     Implantable Defibrillators........................................     2
                     Transvenous Lead Systems..........................................     3
                     Products..........................................................     3
                     Research and Development..........................................     6
                     Clinical Engineering, Marketing and Sales.........................     6
                     Manufacturing.....................................................     7
                     Product Warranty..................................................     7
                     Competition.......................................................     8
                     Third Party Reimbursement.........................................     9
                     Patents and Proprietary Rights....................................     9
                     Government Regulation.............................................    11
                     Employees.........................................................    12
                     Additional Risk Factors...........................................    13
          Item 2.    PROPERTIES........................................................    15
          Item 3.    LEGAL PROCEEDINGS.................................................    15
          Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............    16
 
PART II................................................................................    16
          Item 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                     MATTERS...........................................................    16
          Item 6.    SELECTED FINANCIAL DATA...........................................    17
          Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                     RESULTS OF OPERATIONS.............................................    17
          Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................    17
          Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                     FINANCIAL DISCLOSURE..............................................    17
 
PART III...............................................................................    17
          Item 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................    17
          Item 11.   EXECUTIVE COMPENSATION............................................    19
          Item 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....    20
          Item 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................    20
 
PART IV................................................................................    21
          Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
                     8-K...............................................................    21
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                                     PART I
 
ITEM 1.  BUSINESS
 
THE COMPANY
 
     Since its inception, Ventritex, Inc. ("Ventritex" or the "Company") has
engaged in the design, development, manufacture and sale of implantable
defibrillators and related products for the treatment of ventricular tachycardia
and ventricular fibrillation. Ventricular tachycardia and ventricular
fibrillation are the most serious and life-threatening forms of abnormal heart
rhythms ("arrhythmias"). The Company's principal product, the Cadet V-115
implantable defibrillator, is an electronic device that is implanted in the
patient's pectoral (chest) or abdominal region and is connected to the patient's
heart with defibrillation leads, which are typically implanted transvenously.
The Cadet V-115 is the successor to the Company's Cadence V-100 and V-110
implantable defibrillators, which are considerably larger than the Cadet V-115
and are implanted in the patient's abdominal region. The Cadet has the same
functional and performance characteristics as larger Ventritex defibrillators
and offers features, including high defibrillation energy output and extended
electrogram ("EGM") storage, superior to competing defibrillators that can be
implanted pectorally. As of June 30, 1996, approximately 1,000 Cadet and 17,250
Cadence implants had been performed at over 550 sites. The Company's
defibrillators monitor the heartbeat and deliver electrical pulses or shocks to
the heart to terminate ventricular tachycardia and ventricular fibrillation in
patients. In ventricular tachycardia, the heart's ventricles contract at an
abnormally rapid rate and typically deliver less blood to the body's tissues and
organs. Episodes of ventricular tachycardia occur unpredictably and can progress
to ventricular fibrillation. In ventricular fibrillation, the heart's normal
electrical impulses become disorganized and erratic and the heart ceases to pump
blood. If ventricular fibrillation is not terminated quickly, the individual
will experience a sudden cardiac death ("SCD") episode during which the
individual will become unconscious and, without prompt medical intervention,
typically will die.
 
     Cadence(R), Cadet(R), HVS(R), TVL(R) and Ventritex(R) are registered
trademarks of the Company and ContourTM and SPLTM are trademarks of the Company.
This Prospectus also includes trademarks of companies other than the Company.
 
BACKGROUND
 
     The heart is divided into four chambers, two upper chambers called atria
and two lower chambers called ventricles. The heart's function is to pump blood
through the body's circulatory system. Each normal heartbeat is the result of
electrical signals generated at a precise area in the right atrium, called the
sino-atrial node, the heart's natural pacemaker. These electrical signals cause
a physical contraction of the atria, which pump blood into the ventricles. The
electrical impulses then continue to the ventricles, causing them to contract
and distribute blood throughout the body.
 
     Arrhythmias, abnormal rhythms of the heart muscle, arise from numerous
causes, including tissue damage due to previous heart attacks, congenital
defects and certain diseases. Arrhythmias originate in either the atria, where
they are generally not life-threatening, or the ventricles, where they can
significantly interfere with the pumping of oxygenated blood and can therefore
be life-threatening. During an arrhythmia, the heart beats either too slowly or
too rapidly. An abnormally slow heart rate, generally defined as a heart rate
below 50 beats per minute, is known as bradycardia. Ventricular tachycardia, a
more serious arrhythmia, occurs when abnormal electrical signals occur in the
ventricles, causing the ventricles to beat at an abnormally rapid rate. When the
ventricles beat at an abnormally rapid rate, they do not have sufficient time to
fill with blood prior to each contraction and therefore less blood is pumped out
of the heart. As a result, less oxygen is carried to the tissues and organs of
the body. This lack of oxygen can cause dizziness, unconsciousness, cardiac
arrest and, ultimately, death.
 
     Patients experiencing heart problems are usually treated initially by
cardiologists. Cardiologists may refer patients with ventricular
tachyarrhythmias to specialists in electrophysiology, a cardiology subspecialty
requiring extensive, advanced training in the diagnosis and treatment of
arrhythmias. Typically, an electrophysiologist will conduct extensive testing to
determine the appropriate therapy, including testing various
 
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drugs to determine their potential for preventing future spontaneous
tachyarrhythmias. Electrophysiology testing is a costly procedure and often
requires hospitalization. If an antiarrhythmic drug is successful in these
tests, the drug will usually be prescribed for the patient. If an appropriate
drug cannot be identified, or if the patient's ventricular tachyarrhythmia is
judged to be too critical to be treated by drugs alone, the electrophysiologist
will typically elect to implant a defibrillator.
 
MARKET
 
  United States
 
     Since the first defibrillator implant in 1981, the Company estimates that
through 1995 over 90,000 defibrillators have been implanted in the United
States, including approximately 22,000 in 1995. Implantable defibrillators are
generally purchased by hospitals upon the recommendation of
electrophysiologists. Currently, approximately 1,200 electrophysiologists
practice at medical centers in the United States where defibrillator implants
are performed. Approximately 400,000 people experience SCD in the United States
every year, accounting for about half of all cardiac mortality. The Company
believes that referrals of individuals who are at risk of SCD to
electrophysiologists have been increasing annually as physicians have become
more aware of the benefits of electrophysiology testing. Recent studies suggest
that individuals at high risk of SCD who do not receive an implantable
defibrillator but receive drug therapy alone have a significantly higher
mortality rate from SCD.
 
     Recently, a clinical study sponsored by a competing manufacturer of
implantable defibrillators demonstrated the clinical utility of implanting
defibrillators in additional classes of patients that are at high risk of an SCD
episode. In particular, this study demonstrated the utility of implanting
defibrillators in patients who have suffered a heart attack and are at high risk
of an SCD episode but who do not exhibit other symptoms, such as sustained
ventricular tachycardia. As a result of this study, the sponsoring manufacturer
has been permitted by the United States Food and Drug Administration ("FDA") to
expand the labeling of its device to include this class of patients. The Company
is seeking FDA approval of a pre-market approval ("PMA") supplement to similarly
expand the labeling of its implantable defibrillators. Although there can be no
assurance as to the action the FDA will take in this regard, a broadening of the
classes of patients that can receive defibrillator implants could result in an
increased market for defibrillators.
 
  International
 
     To date, the United States market has represented approximately 80% of the
world market for implantable defibrillators. The international market for
implantable defibrillators has been constrained by the lack of effective
emergency medical services in many developed countries. However, certain
international markets, including particularly Germany and Italy, represent
attractive markets for implantable defibrillators, and, to the extent that
emergency medical services in other countries improve, the market for
implantable defibrillators in these countries could correspondingly grow.
 
IMPLANTABLE DEFIBRILLATORS
 
     An implantable defibrillator is an electronic device that is implanted in
the patient and is designed to monitor the patient's heartbeat and deliver
electric pulses or shocks to the heart to terminate ventricular
tachyarrhythmias. The limitations of first and second generation implantable
defibrillators led to the development of third-generation defibrillators capable
of providing tiered therapy. Tiered therapy defibrillators are designed to
provide three types of therapy: (i) low voltage electrical pacing pulses to
terminate ventricular tachycardia, (ii) one or more cardioversion shocks to
convert, to a normal rhythm, ventricular tachycardia that cannot be controlled
through antitachycardia pacing, and (iii) high-energy defibrillation shocks to
terminate ventricular fibrillation. Third-generation implantable defibrillators
also provide greater programmability to increase the physician's ability to
customize therapy to a patient's condition during and after implant. The
Company's Cadence V-100 defibrillator and a competitor's third-generation,
tiered therapy implantable defibrillator received PMA approval in 1993. The
Cadence V-100 was the first third-generation, tiered therapy implantable
defibrillator incorporating both electrogram ("EGM") storage and a biphasic
defibrillation
 
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waveform to receive regulatory approval. The Company's Cadence V-110 implantable
defibrillator, a smaller version of the V-100 with similar performance
characteristics, and a competitor's third-generation defibrillator received
regulatory approval in 1994.
 
     Competition in the market for tiered therapy implantable defibrillators
increased significantly in March 1995 with FDA approval of a PMA application for
implantable defibrillators manufactured by two of the Company's competitors, the
Cardiac Pacemakers, Inc. subsidiary of Guidant Corporation ("CPI") and
Medtronic, which allowed implantation in the pectoral area, rather than the
abdominal area, in suitable patients. The ability to implant the defibrillator
pectorally enables the implant procedure to be performed by an
electrophysiologist alone, rather than in conjunction with a surgeon. In May
1996, the Company received FDA approval for pectoral implantation labeling of
the Cadet V-115 implantable defibrillator. The Cadet V-115 is comparable in size
to the new defibrillators introduced by CPI and Medtronic.
 
TRANSVENOUS LEAD SYSTEMS
 
     Since the United States commercial introduction of transvenous
defibrillation leads in 1994, transvenous lead systems, in which the
defibrillation leads are implanted through a vein to connect the defibrillator
with the heart, have become the preferred type of lead system.
 
     Defibrillation lead systems require two electrodes to deliver electrical
energy to the heart. Defibrillation lead systems can be configured with two
leads, in which case a single electrode will be placed on each lead. In
addition, two single lead configurations are possible. In one such
configuration, two electrodes are placed on a single lead. Alternatively, in a
configuration known as a "high voltage can," one or two electrodes are placed on
the lead and the housing of the defibrillator unit serves as the second or third
electrode. Certain physicians may have a preference for single lead systems
because of their belief that a single lead system is easier to implant. However,
the Company estimates that, as compared to a single lead system, a dual lead
system requires approximately five additional minutes to implant and offers
additional flexibility in electrode configuration.
 
     In May 1996, the Company received FDA approval of a PMA application for its
TVL transvenous defibrillation lead system. The TVL is configured as a dual lead
system. The Company is currently engaged in clinical trials of two single lead
systems, one in which both electrodes are on a single lead and a second with a
single electrode on the lead and another on a high voltage can version of the
Cadet V-115 defibrillator. There can be no assurance as to when or whether the
Company will receive PMA approval for such single lead systems.
 
     To date, a large percentage of the Company's sales of defibrillators have
been at the direction of physicians who used the Company's defibrillators in
combination with commercially available transvenous lead systems supplied by the
Company's competitors. Therefore, there can be no assurance that physicians will
purchase transvenous lead systems for which the Company obtains regulatory
approval. In particular, physicians preferring single lead systems may choose to
continue to combine competitors' transvenous leads with the Company's
defibrillators, at least until such time as the Company obtains PMA approval for
its single lead systems. Furthermore, there can be no assurance that
manufacturers of competing transvenous lead systems will not attempt to
discourage or prevent use of their leads with the Company's defibrillators
through product labeling, availability, pricing or other means. In general,
unless the FDA-approved labeling includes use with any transvenous lead system
sold by its competitors, the FDA or other government agencies may take further
actions, including restrictions on reimbursement, to restrict the combination of
the Company's defibrillators with such transvenous lead systems. Such actions
could make the Company's defibrillators, including both the Cadet and the
Contour, less attractive to physicians and could therefore have a material
adverse effect on the Company's business, financial condition and results of
operations.
 
PRODUCTS
 
     The Cadet implantable defibrillator system consists of a Cadet
microprocessor-based implantable defibrillator; sensing/pacing and
defibrillation leads that connect the Cadet defibrillator to the patient's
heart; the Programmer, a customized personal computer that the
electrophysiologist uses to program the defibril-
 
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lator's operating parameters during and after the implant and to retrieve
information from the device after implant; and the High Voltage Stimulator
("HVS-02") that the electrophysiologist may use during the implant procedure to
ensure proper placement of the leads, to determine the level of energy needed to
defibrillate the patient, and to perform testing before implanting the Cadet
defibrillator.
 
  Cadet V-115 Defibrillator
 
     The Company's principal product, the Cadet V-115 implantable defibrillator,
is a third-generation, tiered therapy implantable defibrillator that uses a
sophisticated sensing system to continuously monitor the patient's heart rate
and employs a complex set of algorithms to distinguish various types of
ventricular arrhythmias. The tiered therapy Cadet system may be programmed to
initially deliver low voltage antitachycardia pacing designed to control
ventricular tachycardias that can be terminated by such pacing. The Cadet can
also be programmed to deliver cardioversion shocks in an attempt to convert
ventricular tachycardia to a normal rhythm, or deliver one or more high energy
electric shocks to the heart to terminate ventricular fibrillation. Cadet
defibrillators are programmed by the physician upon implant and periodically
thereafter to respond to a patient's changing needs.
 
     A Cadet defibrillator, configured for use with a Ventritex lead system, is
73 cubic centimeters in size and has been designed to be small enough to be
implanted in the pectoral region while delivering the same functional and
performance characteristics as larger tiered therapy implantable defibrillators
that must be implanted in the abdomen. Key features of the Cadet include the
following:
 
          High Defibrillation Energy Output.  The Cadet delivers energy output
     up to approximately 38 joules, which is more than other pectorally
     implantable defibrillators that are commercially available or, to the
     Company's knowledge, in clinical trials in the United States. Since certain
     patients require a high level of energy output to terminate ventricular
     fibrillation, the Cadet's high power output can expand the range of
     patients who can be effectively treated as well as providing an additional
     safety margin.
 
          Programmability.  Cadet defibrillators are configured to provide the
     electrophysiologist with the ability to vary the operating parameters of
     implanted units using the Programmer. This programmability allows the
     physician to customize therapy to the patient's condition during and after
     implant. The Programmer is menu-driven and features a touch screen
     interface to simplify device programming and information retrieval.
 
          Biphasic Defibrillation Waveform.  Cadet defibrillators can deliver
     electrical shocks to the patient in a monophasic or biphasic waveform.
     Clinical studies suggest that biphasic waveforms achieve improved
     defibrillation efficacy compared to monophasic waveforms.
 
          Electrogram Storage.  Cadet defibrillators continuously collect data
     to record information on the patient's arrhythmic events in EGM form. This
     feature provides valuable information that enables the electrophysiologist
     to analyze spontaneous arrhythmic events that the patient has experienced,
     to evaluate the effectiveness of therapies that were delivered in response
     to arrhythmic events and, if appropriate, to adjust operating parameters of
     the device. The Cadet provides up to 8 minutes of EGM storage. The
     continuous EGM storage provided by the Cadet, as compared to the segmented
     EGM data provided by certain competing defibrillators, improves the quality
     of EGM data available to the electrophysiologist for arrhythmia diagnosis.
 
          Continuous Sensing and Non-Committed Therapy.  Cadet defibrillators
     continuously sense the heart's activity while the defibrillator is charging
     its high voltage capacitors to the level required for the indicated
     therapy, and can abort the charging process if the patient's heart function
     spontaneously returns to normal. This feature is significant because the
     Cadet defibrillator does not subject the patient to unnecessary and painful
     electric shocks if the patient's heart function spontaneously returns to
     normal.
 
          Backup Bradycardia Pacing.  Cadet defibrillators can provide pacing to
     correct an abnormally slow heartbeat. This pacing is sometimes necessary to
     restart a patient's heart following a defibrillation shock. This feature
     reduces the need to implant a second device for those patients who would
     otherwise require a bradycardia pacemaker.
 
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     Cadet defibrillators are constructed as one-piece, hermetically sealed
units which contain hybrid circuits, high voltage capacitors and batteries.
Hybrid circuits include custom VLSI circuits, a semi-custom microprocessor and
memory chips. The hybrid circuits process and store data and control the
operation of the Cadet units. The capacitors accumulate an electric charge and
deliver high voltage shocks. The Cadet implantable defibrillator is
battery-powered and is designed to have a life of three to five years, although
battery life varies depending on the frequency and duration of pacing and the
number of times the capacitors are charged to high voltage. The list price for
the Cadet V-115, without leads, is approximately $20,000.
 
  Contour V-145 Defibrillator
 
     To date, a limited number of Contour V-145 implantable defibrillators have
been implanted in patients in the United States and Europe. At 57 cubic
centimeters, the Contour is one of the smallest third-generation implantable
defibrillators. The Contour offers the same high, approximately 38 joule energy
output provided by the Cadet and provides 16 minutes of stored EGM data. In June
1996, the Company submitted a PMA supplement for the Contour to the FDA;
however, there can be no assurance that the FDA will accept this submission as a
PMA supplement. The FDA could instead require additional testing of the Contour
and could also require clinical data in order to approve the supplement. The
Company would then be required to conduct additional clinical trials under an
IDE and submit data from such trials. This could result in significant delays in
approval for the Contour. Delays in receiving or failure to receive PMA approval
for the Contour would have a material adverse effect on the Company's business,
financial condition and results of operations.
 
  TVL Transvenous Lead System
 
     The Company's principal lead system which is labeled for use with Cadet
defibrillators is the TVL transvenous lead system. The Company received
regulatory approval for the TVL system in May 1996. The TVL system employs a
dual lead configuration. The TVL leads are designed to offer the flexibility and
maneuverability of pacemaker leads, which have been implanted transvenously for
many years, making them easy to handle and place in the patient. TVL leads
provide sensing and pacing and are used to monitor heart function and to deliver
antitachycardia or bradycardia pacing, as needed. The current list price of the
TVL system is approximately $5,500.
 
  New Single Lead Systems
 
     The Company has developed and is conducting clinical trials of two single
lead systems to provide additional flexibility for electrophysiologists in
selecting a lead system and to accommodate the preferences of many
electrophysiologists for a single lead system. The Company's SPL system is a
single lead with two defibrillation electrodes. The Company is also conducting
clinical trials of a "high voltage can" version of the Cadet V-115. In this
system, one electrode is on the lead and the housing of the Cadet, which is made
of titanium, serves as the other electrode. The Company submitted a PMA
supplement for the high voltage can versions of the Cadet and the Contour to the
FDA in July 1996 and intends to submit a PMA supplement for the SPL system to
the FDA. There can, however, be no assurance that the FDA will accept these
submissions as PMA supplements. The FDA could instead require additional testing
of or modification to the SPL or the Company's high voltage can defibrillator
and could also require clinical trials under an IDE and completion of the entire
PMA approval process, as opposed to the typically shorter PMA supplement
process. Delays in receiving or failure to receive PMA approval for the SPL or
the high voltage can defibrillator could have a material adverse effect on the
Company's business, financial condition and results of operations.
 
  Programmer
 
     Ventritex Programmers are customized personal computers that provide
communication with the Company's defibrillators using a specialized
communication wand. This feature allows the physician to alter the operating
parameters of Cadet defibrillators, to receive and display diagnostic data and
to non-invasively induce ventricular tachycardia or fibrillation in the patient
to periodically evaluate the patient's defibrillation threshold and
defibrillator performance. The Programmer is menu driven and uses a color touch
screen to highlight programming steps and changes, which simplifies the setup
and monitoring of defibrillator operating
 
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parameters. The Company typically provides Programmers without charge for each
domestic site implanting the Company's defibrillators. As a result, the Company
anticipates expensing approximately $6 million during fiscal 1997 for
Programmers and HVS-02 high voltage stimulators provided to hospitals and other
sites where the Company's defibrillators are implanted.
 
  High Voltage Stimulator
 
     The HVS-02 high voltage stimulator is an external device that may be used
by the electrophysiologist during the implant procedure to facilitate proper
placement of the leads and to induce and terminate ventricular tachycardia or
fibrillation to determine the energy required to defibrillate the patient. It
provides an external defibrillator to determine defibrillation thresholds, a
pacing system analyzer to properly position the sensing/pacing leads, and a
programmable stimulator to induce either ventricular tachycardia or
fibrillation. Typically, one HVS-02 is used at each institution implanting the
Company's defibrillators and HVS-02 devices are typically provided by the
Company without charge. However, it is also possible to have the defibrillator
itself perform the functions of the HVS-02 during the implant procedure, and an
increasing number of implants are currently being performed without use of the
HVS-02.
 
RESEARCH AND DEVELOPMENT
 
     The Company's research and development efforts include various research,
product and process development, clinical trial and quality assurance
activities. These activities are performed by the Company's staff and are
supplemented by work conducted on the Company's behalf by outside sources. The
Company is engaged in research and development projects for future defibrillator
systems, transvenous defibrillation lead systems and external equipment. Delays
in development of new products by Ventritex or developments involving
competitors, including commencement of clinical trials or commercialization of
new implantable devices, pharmaceuticals, cardiac ablation or surgical
alternatives for the treatment of ventricular tachycardia or ventricular
fibrillation, could have a material adverse effect on the Company's business,
financial condition and results of operations.
 
     Research and development expense was $30.8 million, $27.7 million and $23.3
million for fiscal years 1996, 1995 and 1994, respectively. The Company expects
research and development expense to continue to increase in dollar amount in the
future.
 
     Market acceptance and sales of the Company's products could be adversely
affected by technological changes. Many companies with substantially greater
resources than the Company are engaged in the development of products and
approaches for the treatment of ventricular tachycardia and ventricular
fibrillation. These include implantable devices as well as pharmaceuticals and
cardiac ablation therapies. Future innovations in the treatment of ventricular
tachycardia and ventricular fibrillation could render existing technologies,
including the Company's systems, less competitive or obsolete.
 
CLINICAL ENGINEERING, MARKETING AND SALES
 
     The Company's skilled sales, marketing, clinical engineering and support
staff consult with electrophysiologists on the features and applications of the
Company's products. In addition, sales and field clinical engineering personnel
conduct ongoing training sessions and provide clinical support by attending
defibrillator implants and patient follow-up sessions.
 
     The Company's field sales and field clinical engineering organizations
currently include approximately 60 individuals. The field organization enables
the Company to focus its marketing program on electrophysiology centers in the
United States. In addition, the Company is addressing international markets,
typically through specialty cardiovascular product distributors. During fiscal
1996, the Company established a direct sales and field clinical engineering
organization in Germany.
 
     The Company sells primarily to hospitals. In the fiscal year ended June 30,
1996, one customer accounted for 10% of net sales. In the fiscal years ended
June 30, 1995 and 1994, no customer accounted for more than 10% of sales.
 
                                        6
<PAGE>   10
 
MANUFACTURING
 
     The Company's manufacturing facility based in Sunnyvale, California
contains assembly areas where its products are assembled and tested. The
manufacturing area includes controlled environment rooms in which certain lead
systems are manufactured, and the completed defibrillators and lead systems are
packaged before being sent to an outside sterilization facility. The Company's
quality assurance group performs tests at various steps in the manufacturing
cycle to ensure compliance with the Company's specifications.
 
     The Company relies on outside suppliers to manufacture certain major
components of its defibrillator systems. The Company currently has sole source
supply arrangements with its suppliers of hybrid circuits, high voltage
capacitors, integrated circuits, defibrillation lead components, batteries and
certain other components used in its products. For certain components, there are
relatively few potential sources of supply and establishment of additional or
replacement suppliers for these components cannot be accomplished quickly. The
Company believes that alternative sources of supply are available for most
components and subcontracted manufacturing services, and plans to qualify
additional suppliers as production volumes increase. Because of the long lead
times for some components that are currently available from only a single
source, a vendor's inability to supply acceptable components in the quantity
required could impair the Company's ability to manufacture new or existing
products on a timely and cost effective basis, could result in substantial
unanticipated expenses and delays in the commercial availability of such
products and could have a material adverse effect on the Company's business,
financial condition and results of operations.
 
     During the first half of fiscal 1996, in anticipation of regulatory
approval, the Company began production of its Cadet V-115 defibrillator system
and TVL transvenous lead system, and initially experienced shortages of certain
critical components due to manufacturing yield problems at its suppliers. There
can be no assurance that future production problems will not be encountered in
producing the Cadet, expanding production of the Contour and the TVL or
establishing production of other new products. Failure to manufacture new or
existing products on a timely and cost effective basis could result in
substantial unanticipated expenses, delays in the commercial availability of
such products, and could have a material adverse affect on the Company's
business, financial condition and results of operations.
 
PRODUCT WARRANTY
 
     The Company's implantable defibrillator systems include a complex
electronic device and leads designed to be implanted in the human body for long
periods of time. Component failures, manufacturing errors or design defects
could result in an unsafe condition, injury or death to the patient. The
occurrence of such a problem could result in a recall of the Company's products,
explanting implanted defibrillators or leads and the implanting of new
defibrillators or leads.
 
     The Company's defibrillators are warranted for the earlier of three years
or 100 high voltage capacitor charges, assuming nominal pacing during the time
the unit is implanted. Previously, the Company experienced certain component
failures with the Cadence defibrillator and with lead systems. For example,
during clinical trials, a number of Cadence V-100 defibrillators experienced
premature battery depletion due to defective capacitors supplied by an outside
vendor. In all these instances, the devices were explanted and replaced with new
defibrillators. The Company has experienced what it believes, in light of
industry experience, to be a typical level of returns of defibrillator units
from the field for various reasons, none of which the Company believes are
systemic or would otherwise give rise to a product recall. There can, however,
be no assurance that the Company's products will not experience additional
performance difficulties. Future product problems resulting in a recall could
have a material adverse effect on the Company's business, financial condition
and results of operations.
 
     The manufacture and sale of the Company's products entails the risk of
product liability claims. Although the Company maintains product liability
insurance with coverage limits of $25.0 million per occurrence and $25.0 million
in the aggregate per year, there can be no assurance that the coverage limits of
the Company's insurance policies will be adequate. Product liability insurance
is expensive and may not be available in the future on acceptable terms or at
all. In addition, the Company has indemnified certain of its component suppliers
for certain potential product liability. To date, the Company has not
experienced any material
 
                                        7
<PAGE>   11
 
product liability claims. A successful claim brought against the Company in
excess of its insurance coverage could have a material adverse effect on the
Company's business, financial condition and results of operations and could
adversely affect the Company's ability to continue as a viable entity. Also, as
a result of the June 1996 United States Supreme Court decision in Medtronic,
Inc. v. Lohr, which rejected federal pre-emption of certain state law causes of
action in relation to medical devices, the Company expects that product
liability claims relating to medical devices may be pursued more aggressively in
the future.
 
COMPETITION
 
     Competition in the market for implantable defibrillator systems is intense.
Although patients susceptible to ventricular tachycardia and ventricular
fibrillation may be treated with antiarrhythmic drugs or cardiac ablation
therapies, the Company believes that manufacturers of implantable defibrillators
are its primary competitors. The Company's principal competitors are Cardiac
Pacemakers, Inc. ("CPI"), a subsidiary of Guidant Corporation, and Medtronic,
Inc. ("Medtronic"). Both CPI and Medtronic are large, diversified cardiology and
medical device companies and each has invested substantial amounts in
implantable defibrillator research and development. Other competitors in the
implantable defibrillator market include Telectronics Pacing Systems, Inc., a
subsidiary of Pacific Dunlop Limited ("Telectronics"), Intermedics, Inc., a
subsidiary of Sulzer Brothers Ltd. ("Intermedics") and Angeion Corporation.
 
     In March 1995, the FDA approved the commercial release of new
defibrillators manufactured by CPI and Medtronic which are small enough to allow
pectoral implantation, rather than abdominal implantation, in suitable patients.
Until receipt of regulatory approval relating to the Cadet in May 1996, the
Company could not offer an implantable defibrillator labeled for pectoral
implantation in patients in the United States. Commercial release of pectorally
implantable defibrillators significantly increased competition in the
implantable defibrillator market and resulted in a significant decline in the
Company's market share and sales of the Company's products. The Company now has
products which it believes are competitive; however, there can be no assurance
that the Company's products will compete successfully with products currently
manufactured by others or future products under development by competitors which
have new features, such as dual chamber and rate-responsive pacing capabilities.
 
     Medtronic and CPI have regulatory approval of and are commercially
marketing single lead transvenous lead systems. The Company currently is
marketing the TVL transvenous lead system, a dual lead system. Some physicians
prefer a single lead system due to the perceived ease of implanting such a
system as compared to a dual lead system. The Company is engaged in clinical
trials of single lead transvenous defibrillation lead systems and must receive
PMA approval prior to commercialization. There can be no assurance as to when or
whether the Company will receive PMA approval for these systems.
 
     Many of the Company's competitors, including both CPI and Medtronic, have
substantially greater financial, manufacturing, marketing and technical
resources than those of the Company. The financial resources of certain of the
Company's competitors may enable them to use pricing pressures as a means of
competition. In addition, competitors have in the past and may in the future
employ litigation to gain a competitive advantage. There can be no assurance
that the Company's competitors will not develop or obtain regulatory approval
for implantable defibrillation systems, or for pharmaceuticals or surgical
alternatives, that may be more effective in treating ventricular tachycardia and
ventricular fibrillation than the Company's current or future products, or that
the Company's technologies and products would not be rendered less competitive
or obsolete by such developments. Failure of the Company's products to gain
market acceptance or limited growth in the market for implantable defibrillators
would have a material adverse effect on the Company's business, financial
condition and results of operations.
 
     Any product developed by the Company that gains regulatory approval will
have to compete for market acceptance and market share. An important factor in
such competition may be the timing of market introduction of competitive
products. Accordingly, the relative speed with which the Company can develop
products, complete clinical testing and regulatory approval processes and supply
commercial quantities of the product to the market is expected to be a critical
competitive factor. The Company expects that competition will also be based,
among other things, on the ability to safely and effectively treat ventricular
tachycardia and
 
                                        8
<PAGE>   12
 
ventricular fibrillation, the availability of defibrillation systems that can be
implanted through less invasive surgical procedures, ease of programmability,
ability to provide improved diagnostic capability, size and weight of the
device, product reliability, physician familiarity with the device, patent
position, sales and marketing capability, third-party reimbursement policies,
reputation and price.
 
     In addition, the Company is aware that competitors are developing and, in
some instances, are conducting clinical trials of implantable defibrillators
that have features not included in the Company's defibrillators. Moreover, these
competitors may obtain expedited regulatory approval from the FDA for these new
devices. Commercial release of competitors' products with features not available
in the Company's products could have a material adverse effect on the Company's
business, financial condition and results of operations.
 
THIRD PARTY REIMBURSEMENT
 
     Implantable defibrillators are generally purchased by hospitals upon
recommendations of electrophysiologists. Typically, these hospitals then bill
various third party payors for the health care services provided to their
patients. These payors include Medicare, Medicaid and private insurers.
Government agencies reimburse hospitals for medical procedures at rates based
upon Diagnostic-Related Groups ("DRGs").
 
     Third party payors are increasingly challenging the prices charged for
medical products and services, and current levels of reimbursement may be a
disincentive to some hospitals to perform defibrillator implants. Currently, the
sales prices of implantable defibrillators range from approximately $12,000 to
$20,000, excluding leads. According to an industry study published in January
1995, a defibrillator implant procedure, excluding electrophysiology testing,
typically costs between $30,000 and $60,000, depending on the length of hospital
stay and other variables. The same source indicated that the average Medicare
reimbursement for an initial defibrillator implant procedure is approximately
$35,000 to $40,000 and that the average Medicare reimbursement for defibrillator
replacement procedures is approximately $20,000. Consequently, despite the
Company's receipt of regulatory approvals for its systems, third party payors
may deny full reimbursement. There can be no assurance that the Company's
implantable defibrillator systems will be considered cost effective by third
party payors, that reimbursement will be available, or if reimbursement is
available, that third party payors' reimbursement policies will not adversely
affect the Company's ability to sell its products on a profitable basis. The
failure by hospitals and other users of the Company's products to obtain
reimbursement from third party payors could have a material adverse effect on
the Company's business, financial condition and results of operations.
 
     In addition, legislative initiatives relating to health care reform have
been introduced in Congress and certain state legislatures. These initiatives
have been focused, in large part, on health care cost containment. Such
initiatives, if enacted, could adversely affect the availability of third party
reimbursement for the Company's products and the price levels at which the
Company is able to sell its products. The Company's business, financial
condition and results of operations could be adversely affected by changes in
government and private payors' reimbursement policies relating to procedures
using the Company's products.
 
     Medicare and Medicaid policies currently permit reimbursement for
investigational medical devices if such devices represent evolutionary
modifications to commercially available products. Under this policy, for
example, next generation implantable defibrillators in clinical trials would be
eligible for reimbursement because these devices are derived from an existing,
approved class of products. Because the Company anticipates that it will be
required to conduct clinical trials in connection with future products, changes
in this reimbursement policy could have a material adverse effect on the
Company's business, financial condition and results of operations.
 
PATENTS AND PROPRIETARY RIGHTS
 
     The Company files patent applications to protect technology and inventions
that are significant to the development of its business. As of June 30, 1996,
the Company held 71 issued United States patents and 11 issued foreign patents
and had pending 51 United States and 28 corresponding foreign patent
applications that cover various aspects of its technology. The Company's issued
United States patents expire on dates ranging from 2006 through 2014. There can
be no assurance that any of the claims in the pending patent applications
 
                                        9
<PAGE>   13
 
will be allowed, or that any issued patents will be upheld, or not circumvented
by competitors, or that any patents or licenses will provide competitive
advantages for the Company's products. The Company also relies on trade secrets
and proprietary know-how which it seeks to protect, in part, through
confidentiality agreements with employees, consultants and other parties. There
can be no assurance that these agreements will not be breached, that the Company
will have adequate remedies for any breach, or that the Company's trade secrets
will not otherwise become known to or independently developed by competitors.
 
     The segment of the medical device market that includes implantable
defibrillators has been characterized by extensive litigation regarding patents
and other intellectual property rights. The Company has resolved intellectual
property disputes to date through licensing arrangements, when appropriate and
on terms it believes to be commercially reasonable. Under certain agreements,
the Company pays royalties based on commercial sales of implantable
defibrillator systems. The Company anticipates that such royalties will continue
for future implantable defibrillator systems developed by the Company.
Additionally, the agreements do not include all patents that may be issued to
the licensors, thus future patent disputes with these companies are possible.
Intermedics has filed claims against the Company for patent infringement which
are still pending, and there can be no assurance that other parties will not
institute additional litigation against the Company.
 
     In 1990, two of the Company's competitors, Telectronics and Intermedics,
instituted patent infringement litigation against the Company. Medtronic and CPI
also notified the Company that they believed the Company infringed patents held
by them. In May 1992, the Company and Medtronic agreed to cross-license their
respective patent portfolios relating to devices for the treatment of
tachyarrhythmias. Under the license agreement, Ventritex pays Medtronic
royalties based on a percentage of net sales of Ventritex's products covered by
Medtronic's patents. In July 1993, Ventritex entered into license agreements
with Telectronics and CPI. Under the agreement with CPI, Ventritex and CPI
cross-licensed their respective patent portfolios relating to devices for the
treatment of tachyarrhythmias. Ventritex made a one-time payment to CPI in
settlement of claims relating to past activities and pays CPI royalties based on
a percentage of net sales of Ventritex's products covered by CPI's patents.
Under the agreement with Telectronics, Ventritex and Telectronics cross-licensed
their respective patent portfolios relating to devices for the treatment of
tachyarrhythmias. Ventritex also made a one-time payment to Telectronics in
settlement of ongoing patent infringement litigation between Telectronics and
Ventritex. The Company does not have ongoing royalty obligations to
Telectronics. In connection with the license agreements with CPI and
Telectronics, Ventritex recognized a charge of $18.6 million in fiscal 1993.
This charge included the one-time payments and certain other related settlement
expenses.
 
     The Company's licenses with Medtronic, CPI and Telectronics contain
significant restrictions that may have the effect of preventing or substantially
impeding an acquisition of, change in control of, or certain minority
investments in, the Company. Such restrictions include the possible termination
of various licenses to the Company and the requirement that the Company make a
substantial payment to one of the licensors upon such event.
 
     As a result of the above license agreements, the Company's only pending
legal dispute in the intellectual property area consists of various claims
asserted by and against Intermedics. For more information about the Intermedics
litigation, see "-- Legal Proceedings."
 
     Although the Company believes that it has entered into license agreements
with all of the major participants in the implantable defibrillator market other
than Intermedics, there can be no assurance that other parties will not
institute litigation against the Company. In addition, the license agreements
with Medtronic, Telectronics and CPI do not include patents that are issued
under applications filed after certain specified dates and thus future patent
disputes with Medtronic, Telectronics and CPI are possible. Any future
litigation, as well as any future interference proceedings that may be declared
by the United States Patent and Trademark Office to determine the priority of
inventions, could result in substantial expense to the Company and significant
diversion of effort by the Company's technical and management personnel.
Additional litigation may be necessary to enforce patents issued to or held by
the Company, to protect trade secrets or know-how owned by the Company or to
determine the enforceability, scope and validity of the proprietary rights of
others. An adverse determination in litigation or interference proceedings to
which the Company is or
 
                                       10
<PAGE>   14
 
may become a party could subject the Company to significant liabilities to third
parties or require the Company to seek licenses from third parties. There can,
however, be no assurance that necessary licenses would be available to the
Company on satisfactory terms or at all. Accordingly, an adverse determination
in a judicial or administrative proceeding or failure to obtain necessary
licenses could prevent the Company from manufacturing and selling its products,
which would have a material adverse effect on the Company's business, financial
condition and results of operations and could adversely affect the Company's
ability to continue as a viable entity.
 
GOVERNMENT REGULATION
 
     Clinical testing, manufacture and sale of the Company's products are
regulated by the FDA as medical devices. Under the Federal Food, Drug, and
Cosmetic Act, as amended, all medical devices are classified into three classes,
class I, II or III. Class III devices, such as implantable defibrillators, are
subject to the most stringent FDA review and require submission and approval of
a PMA application or a PMA supplement from the FDA before commencement of
marketing, sales and distribution in the United States.
 
     In order to receive approval of a PMA application, a device must undergo
clinical evaluation under an Investigational Device Exemption ("IDE") that is
granted by the FDA to permit testing of the device in controlled human trials.
In addition to obtaining an IDE from the FDA, the sponsor of the investigational
research must also obtain approval for the research from a hospital
institutional review board or committee established for this purpose. Once an
IDE has been granted, the FDA may allow expansion of the IDE's scope to
additional patient implants or additional clinical sites, or both. The FDA or
the sponsor may suspend clinical trials at any point if either concludes that
clinical subjects are being exposed to an unacceptable health risk or for other
reasons.
 
     Results of clinical trials are presented to the FDA in a PMA application.
In addition to the results of clinical investigation(s), the PMA applicant must
submit other information relevant to the safety and effectiveness of the device
including: the results of non-clinical tests; a full description of the device
and its components; a full description of the methods, facilities and controls
used for manufacturing; and proposed labeling. The FDA staff then reviews the
submitted application and determines whether or not to accept the application
for filing. If accepted for filing, the application is further reviewed by the
FDA and may be subsequently reviewed by an FDA scientific advisory panel
comprised of physicians and others with expertise in the relevant field. The
advisory panel holds a public meeting during which the PMA application is
reviewed and discussed. The scientific advisory panel then issues an approvable
or not approvable recommendation to the FDA or recommends approval with
conditions. Although the FDA is not bound by the opinion of the advisory panel,
the FDA tends to give considerable weight to panel recommendations. The FDA also
typically conducts an inspection to determine whether the Company conforms with
the current Good Manufacturing Practice ("GMP") regulations. If the FDA's
evaluation is favorable, the FDA will subsequently publish an order approving
the PMA for the device. Interested parties can file comments on the order and
seek further FDA review. Although the PMA review process is to be completed
within 180 days from the date the PMA is accepted for filing, this time frame is
frequently exceeded.
 
     The process of obtaining FDA and other required regulatory approvals is
lengthy, expensive and uncertain. Moreover, regulatory approvals, if granted,
may include significant limitations on the indicated uses for which a product
may be marketed. In addition, the FDA may require testing and surveillance
programs to monitor the effect of approved products which have been
commercialized and it has the power to prevent or limit further marketing of a
product based on the results of these post-marketing programs. The FDA actively
enforces regulations prohibiting marketing of products for non-indicated uses.
In addition to FDA inspections conducted prior to the approval of a PMA
application, the FDA also conducts periodic inspections to determine compliance
with GMP and Medical Device Reporting ("MDR") regulations. Failure to comply
with applicable regulatory requirements can result in, among, other things,
fines, suspensions or delays of approvals, seizures or recalls of products,
operating restrictions and criminal prosecutions. Furthermore, changes in
existing regulations or adoption of new regulations could prevent the Company
from obtaining, or affect the timing of, future regulatory approvals. There can
be no assurance that the Company will be able to obtain necessary regulatory
approvals on a timely basis or at all. Delays in receipt of or failure to
receive such
 
                                       11
<PAGE>   15
 
approvals or loss of previously received approvals could have a material adverse
effect on the Company's business, financial condition and results of operations.
Furthermore, if a PMA is granted, significant modifications to the device,
manufacturing process or labeling will require a supplement to the PMA or
require the submission of a new PMA application, which could require substantial
additional efficacy and safety data and FDA review.
 
     The Company has recently filed a PMA supplement for the Contour
defibrillator and anticipates filing PMA supplements for its single lead
transvenous defibrillation lead systems. The Company is likely to be required to
file additional PMA applications or PMA supplements for new products it
develops. Supplements to a PMA require submission of the same type of
information as a PMA except that the supplement is limited to that information
needed to support the change. There can be no assurance that the FDA will accept
a PMA supplement. The FDA could instead require additional testing of the device
that is the subject of the supplement or could require clinical trials under an
IDE and completion of the entire PMA approval process. Failure to obtain FDA
approval for commercial release through a PMA supplement on a timely basis, or
at all, could have a material adverse effect on the Company's business,
financial condition and results of operations. Further, the MDR regulations
require that the Company provide information to the FDA on deaths or serious
injuries alleged to have been associated with the use of its devices, as well as
product malfunctions that would likely cause or contribute to death or serious
injury if the malfunction were to recur.
 
     The Company is required to register as a medical device manufacturer with
the FDA and state agencies, such as the Food and Drug Branch of the California
Department of Health Services. The Company is subject to inspection on a routine
basis by the State of California and by the FDA for compliance with the FDA's
current GMP and MDR regulations. Those regulations impose certain procedural and
documentation requirements upon the Company with respect to manufacturing and
quality assurance activities and product reporting activities.
 
     Additionally, the Company must comply with various FDA requirements for
design, safety, advertising, labeling and record keeping. Under FDA regulations,
the Company is required to establish a method of device tracking so that the
Company will be able to trace its implantable products from the place of
manufacture to the patient in whom such products are implanted in the United
States. The purpose of this tracking requirement is to facilitate notification
to the patient or recall of the device if such actions become necessary. The
cost of establishing and maintaining a tracking system that complies with the
FDA's regulations may be significant. Failure to establish and maintain the
required tracking system would subject the Company to FDA regulatory sanctions
and the possibility of losing current product approval.
 
     International sales of medical devices are subject to foreign government
regulation, the requirements of which vary substantially from country to
country. The Company has obtained certain foreign governmental approvals and has
applied for additional approvals. The European Community has promulgated rules
that require that medical products receive by mid-1998 the CE mark, an
international symbol of quality and compliance with applicable European medical
device directives. Failure to receive CE mark certification will prohibit the
Company from selling its products in the European Union. International Standards
Organization ("ISO") 9001 certification is one of the CE mark certification
requirements. The Company has established the process and relationships required
to obtain the necessary approvals for the CE mark and has been granted
authorization to affix that mark to all products currently requiring the mark.
 
     The FDA is studying the long-term effects of materials implanted in the
human body and may require manufacturers of implantable devices to conduct
biological testing of such materials. If required, such testing would be
expensive and time consuming and could disrupt the manufacture and sale or
result in recalls of the Company's products or denials of FDA approval for
future products. Any adverse regulatory actions could have a material adverse
effect on the Company's business, financial condition and results of operations.
 
EMPLOYEES
 
     As of June 30, 1996, the Company had 548 full-time employees, including 164
in product development and process engineering, 240 in manufacturing and quality
assurance, 107 in sales, marketing and clinical engineering, and 37 in
administration. None of the Company's employees is subject to a collective
bargaining
 
                                       12
<PAGE>   16
 
agreement. The Company believes that its relationship with its employees is
good. The Company is dependent upon a limited number of key management and
technical personnel. In addition, the Company's future success will depend in
part upon its ability to attract and retain highly qualified personnel. The
Company competes for such personnel with other companies, academic institutions
and government entities. There can be no assurance that the Company will be
successful in hiring or retaining such qualified personnel. Loss of key
personnel or inability to hire or retain qualified personnel could have a
material adverse effect on the Company's business, financial condition and
results of operations.
 
ADDITIONAL RISK FACTORS
 
  Fluctuations in Operating Results; Profitability Uncertain
 
     The Company incurred net losses from its inception in January 1985 through
the year ended June 30, 1993, incurred net losses from the fourth quarter of
fiscal 1995 through fiscal 1996, currently expects to incur a net loss for the
first quarter of fiscal 1997 and may incur a net loss for the first half of
fiscal 1997. If regulatory approval to market the Contour in the United States
is not obtained on a timely basis or at all, the Company's results of operations
will be adversely affected. Results of operations have varied and may continue
to fluctuate significantly from quarter to quarter and will depend upon numerous
factors including timing of regulatory approvals, market acceptance of the
Company's products, introductions of new products with advanced features by the
Company or its competitors, technological advances in the treatment of
arrhythmias, the outcome of intellectual property litigation and competition.
Sales have fluctuated significantly in the past, especially in fiscal 1995 and
fiscal 1996, as competitors introduced products with advanced features. In
particular, the Company's net sales declined from $126.9 million in fiscal 1995,
to $54.9 million in fiscal 1996, primarily as a result of competitors'
introductions of smaller defibrillators with advanced features. The Company's
gross margins will be dependent on production volumes, manufacturing
efficiencies, royalties under patent license agreements, warranty expense,
component price fluctuations, competitive pricing, varying product sales mix and
other factors. There can be no assurance that gross margins will improve in the
future. In addition, a significant portion of the Company's operating expenses
are relatively fixed in nature and planned expenditures are based, in part, on
anticipated orders. Any inability to adjust spending quickly enough to
compensate for revenue shortfalls may magnify the adverse impact of such revenue
shortfall on the Company's results of operations. Furthermore, there can be no
assurance that the Company will achieve profitability in the future or that
profitability, if achieved, will be sustained.
 
  Uncertainty Relating to New Product Development
 
     The Company's strategy involves the design and development of new products
for the treatment of ventricular tachycardia and ventricular fibrillation. The
product development process is time-consuming and there can be no assurance that
product development will be successfully completed, that necessary regulatory
clearances or approvals will be granted by the FDA on a timely basis, or at all,
or that the potential products will achieve market acceptance. The Company
expects defibrillators with advanced new features, such as dual chamber and
rate-responsive pacing capabilities, will be developed by its competitors.
Failure by the Company to develop, obtain necessary regulatory clearances or
approvals for, or successfully market potential new products with these and
other features could have a material adverse effect on the Company's business,
financial condition and results of operations.
 
  Technological Change Resulting in Product Obsolescence
 
     Market acceptance and sales of the Company's products have historically
been and could in the future be adversely affected by technological changes.
Many companies with substantially greater resources than the Company are engaged
in the development of products and approaches for the treatment of ventricular
tachycardia and ventricular fibrillation. These include implantable devices as
well as pharmaceuticals and cardiac ablation therapies. Future innovations in
the treatment of ventricular tachycardia and ventricular fibrillation could
render existing technologies, and the Company's products, less competitive or
obsolete.
 
                                       13
<PAGE>   17
 
  Uncertainty of Market Acceptance
 
     Market acceptance of the Company's implantable defibrillator systems will
depend in part on the therapeutic capabilities and operating features of such
systems as compared to other implantable defibrillators, physicians' willingness
to use the Company's defibrillators with competitors' transvenous defibrillation
leads, and the Company's ability to convince the medical community of the
clinical efficacy of its systems. If regulatory approval to market the Contour
in the United States is not obtained on a timely basis or at all, the Company's
results of operations will be adversely affected. Failure of the Company's
products, including the Contour, to gain market acceptance or limited growth in
the market for implantable defibrillators would have a material adverse effect
on the Company's business, financial condition and results of operations.
 
  Dependence on Key Personnel
 
     The Company is dependent upon a limited number of key management and
technical personnel. In addition, the Company's future success will depend in
part upon its ability to attract and retain highly qualified personnel. The
Company competes for such personnel with other companies, academic institutions,
government entities and other organizations. There can be no assurance that the
Company will be successful in hiring or retaining qualified personnel. Loss of
key personnel or the inability to hire or retain qualified personnel could have
a material adverse effect on the Company's business, financial condition and
results of operations.
 
  Risks Associated with Possible Business Combination Transactions
 
     Although the Company has no pending agreements or commitments in this
regard, the Company has from time to time in the past evaluated and considered
and expects to continue to evaluate and consider the acquisition of
complementary businesses, products and technologies as well as other possible
business combination transactions. Accordingly, the Company may undertake
acquisitions of complementary businesses, products or technologies or become
involved in other business combination transactions in the future. Acquisitions
and other business combinations entail numerous risks, including the potential
inability to successfully integrate the respective companies' businesses or to
realize anticipated synergies, economies of scale or other value, diversion of
management's attention, and loss of key employees. Should there be any such
transaction, there can be no assurance that the Company or its stockholders
would realize value from any such acquisition or business combination which
equals or exceeds the consideration paid to other parties, or will not suffer
other adverse results from any such transaction. In addition, future
acquisitions by the company may result in issuances of additional equity
securities, the incurrence of additional debt, large one-time write-offs and the
creation of goodwill or other intangible assets that could result in ongoing
amortization expense. These factors could have a material adverse effect on the
Company's business, financial condition and results of operations.
 
  Significant Restrictions on Change of Control and Certain Minority Investments
 
     The Company has adopted a number of anti-takeover measures. The Company has
adopted a Preferred Shares Rights Agreement, sometimes referred to as a poison
pill, designed to prevent hostile takeovers not approved by the Board of
Directors. In addition, the Company is authorized to issue 5,000,000 shares of
undesignated Preferred Stock. Such shares of Preferred Stock may be issued by
the Company without stockholder approval upon such terms as the Company's board
of directors may determine. The issuance of Preferred Stock may have the effect
of delaying, deferring or preventing a change in control of the Company, may
discourage bids for the Company's Common Stock at a premium over the market
price of the Common Stock and may adversely affect the market price of and the
voting and other rights of, the holders of Common Stock. At present, the Company
has no plans to issue any of the Preferred Stock.
 
     In addition, the Company's cross-licenses with Medtronic, Telectronics and
CPI, entered into in connection with the settlement of several intellectual
property litigation matters and disputes, contain significant restrictions that
may have the effect of preventing or substantially impeding an acquisition of,
change in control of, or certain minority investments in, the Company. Such
restrictions include the
 
                                       14
<PAGE>   18
 
termination of various licenses and the requirement that the Company make a
substantial payment to one of the licensors upon such event.
 
  Volatility of Stock Price
 
     The market price of the Company's Common Stock has been and is likely to
continue to be highly volatile. In addition, the stock market and the medical
technology sector in particular have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. Factors such as fluctuations in the Company's operating
results, shortfalls in revenue or earnings from levels expected by securities
analysts, new product introductions by the Company or its competitors,
announcements of technological innovations or new products by the Company or its
competitors, governmental regulation, developments with respect to patents or
proprietary rights and litigation relating thereto, public concern as to the
safety of products developed by the Company or others and general market
conditions may have a significant adverse effect on the market price of the
Common Stock. Substantially all of the shares of Common Stock held by current
stockholders of the Company are eligible for immediate sale in the public
market, subject in some cases to the public information, manner of sale, volume
limitation and notice of sale provisions of federal securities laws. Future
sales of such shares could lead to a decline in the market price of the Common
Stock.
 
ITEM 2.  PROPERTIES
 
     Ventritex leases an approximately 150,000 square foot facility in
Sunnyvale, California. This facility contains approximately 60,000 square feet
of manufacturing space and approximately 90,000 square feet devoted to research
and administrative offices. The facility is leased through December 2000.
Although the Company believes that this facility is adequate to meet its
requirements at least through fiscal 1997, the Company anticipates the need to
lease additional space. The Company believes that additional space in the
Sunnyvale, California area will be available on commercially reasonable terms.
The Company also leases space in South Carolina for manufacturing activities and
in Europe for sales, clinical engineering and other activities.
 
ITEM 3.  LEGAL PROCEEDINGS
 
     The Company is currently in litigation with one of its competitors,
Intermedics. In response to threats from Intermedics, the Company filed a
declaratory judgment action in the United States District Court in the Northern
District of California in January 1993, asking the court to declare that certain
patents which Intermedics had asserted were being infringed by the Company were,
in fact, invalid, unenforceable or not infringed. Intermedics then filed several
actions in the United States District Court in the Southern District of Texas
alleging infringement by the Company of nine Intermedics patents. Initially,
this litigation was focused on procedural issues relating to whether the dispute
would be tried in California or Texas. On October 12, 1994, the United States
District Court for the Northern District of California denied Intermedics motion
to transfer Ventritex's pending suits to Texas and granted Ventritex's motion to
enjoin Intermedics from further prosecution of its aforementioned suits in
Texas. The United States District Court for the Southern District of Texas
thereafter issued an order transferring to California all of the Texas cases
which Intermedics had served upon Ventritex. The Court has indicated that the
trial in connection with the above described actions will begin May 5, 1997.
 
     The Company filed a further action in the Northern District of California
in July 1993 seeking a declaratory judgment that the patents that Intermedics
has asserted against the Company are not infringed by Ventritex, are invalid and
are unenforceable. This action, which was filed against Intermedics, its parent
and affiliate companies, SulzerMedica and Sulzer, Inc., seeks damages based upon
claims for antitrust law violations, malicious prosecution, conspiracy and
breach of contract. Intermedics, SulzerMedica and Sulzer, Inc. have moved to
stay or dismiss the Company's damage claims, and the Court ordered that certain
of these claims be dismissed without prejudice and that others be stayed pending
determination of other issues in the parties' various lawsuits.
 
                                       15
<PAGE>   19
 
     In the above actions, Intermedics seeks judgments against Ventritex for
damages, attorneys fees and injunctive relief. It is expected that Intermedics
will, during the course of the litigation, seek to obtain various types of
pretrial relief which include, but are not limited to, summary judgments,
dismissals of Ventritex's claims and preliminary injunctions. In January 1995,
Intermedics filed a motion for partial summary judgment and for issuance of a
preliminary injunction based on alleged infringement of one of its patents.
Ventritex vigorously contested these motions and requested the United States
Patent and Trademark Office to conduct a reexamination of claim 28 of
Intermedics U.S. Patent No. 4,880,005 upon which these motions are based. The
Court denied Intermedics' partial summary judgment motion, and, as a result,
Intermedics' preliminary injunction request was withdrawn. The Patent Office, on
May 28, 1996, issued a second final rejection of claim 28 of the 4,880,005
patent. Intermedics subsequently requested reconsideration of the final
rejection. As a result of this reconsideration, on August 5, 1996 the United
States Patent and Trademark Office reissued the 4,880,005 patent with claim 28
intact. The Company believes that Intermedics will make renewed efforts to
obtain partial summary judgment and a preliminary injunction. On June 6, 1996,
Intermedics filed with the United States Patent and Trademark Office a request
for reexamination of U.S. Patent No. 4,830,006 and on June 7, 1996, Intermedics
filed a request for reexamination of U.S. Patent No. 4,913,145. Both patents are
being asserted by Intermedics against the Company. The requests are based on
references identified by Ventritex as being pertinent to the patents in response
to discovery requests by Intermedics.
 
     Since the Company brought a declaratory relief action against Intermedics
in January 1993, Intermedics has filed suits against the Company's two principal
competitors, Medtronic and CPI, alleging infringement of several of the same
patents which it has asserted against the Company. None of these actions has yet
been set for trial.
 
     In addition to its patent infringement claims, Intermedics had previously
alleged trade secret misappropriation and related acts by the Company and two of
its officers, who were formerly employees of Intermedics. In this lawsuit, the
Company filed counterclaims against Intermedics for infringement of two of
Ventritex's patents. These counterclaims are still pending. Certain of the trade
secret misappropriation and related claims were tried in 1992 before a United
States District Court jury in San Francisco. The jury returned a unanimous
verdict in favor of the Company and its officers and found that Intermedics had
acted in bad faith in continuing to pursue the trade secret misappropriation
claims. The Court set aside the bad faith portion of the verdict based on
Intermedics claim of an erroneous jury instruction. A new trial on the bad faith
issue has been ordered, but no trial date has been set. The judgment dismissed
all of Intermedics trade secret claims against the Company and its officers and
was affirmed on appeal.
 
     In addition to the above-mentioned litigation, the Company is also involved
in other litigation in the normal course of business. Although an adverse
determination in the Intermedics proceedings or in other litigation or
administrative proceedings could have a material adverse effect on the Company,
based upon the nature of the claims made and the investigation completed to
date, the Company believes the outcome of the described actions will not have a
material adverse effect on the financial position or results of operations of
the Company.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     Not applicable.
 
                                    PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's Common Stock is traded on the Nasdaq National Market (ticker
symbol VNTX). The number of record holders of the Company's Common Stock at June
30, 1996 was approximately 460. The Company has not paid any dividends since its
inception and does not intend to pay any dividends in the foreseeable future.
 
                                       16
<PAGE>   20
 
     The following table shows for the periods indicated the high and low sales
prices for the Common Stock as reported by the Nasdaq National Market.
 
<TABLE>
<CAPTION>
                                                                               HIGH     LOW
                                                                               ----     ----
<S>                                                                            <C>      <C>
FISCAL YEAR ENDED JUNE 30, 1995
  First quarter..............................................................  $26 1/2  $16 1/2
  Second quarter.............................................................  29 3/4   18 1/4
  Third quarter..............................................................  31 3/4   17 1/4
  Fourth quarter.............................................................  19 3/4     13
FISCAL YEAR ENDED JUNE 30, 1996
  First quarter..............................................................  $24 1/4  $15 1/2
  Second quarter.............................................................  24 3/8   16 7/8
  Third quarter..............................................................  20 1/8   12 7/8
  Fourth quarter.............................................................  20 3/4   14 7/8
FISCAL YEAR ENDING JUNE 30, 1997
  First quarter (through August 5, 1996).....................................  $19 1/8  $12 1/2
</TABLE>
 
ITEM 6.  SELECTED FINANCIAL DATA
 
     The information required by this item is incorporated by reference to the
portion of the Registrant's 1996 annual report to stockholders entitled
"Selected Financial Data" and included in Exhibit 13.1 to this report.
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
     The information required by this item is incorporated by reference to the
portion of the Registrant's 1996 annual report to stockholders entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and included in Exhibit 13.1 to this report.
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The information required by this item is incorporated by reference to the
portion of the Registrant's 1996 annual report to stockholders entitled
"Financial Statements" and included in Exhibit 13.1 to this report.
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
     Not applicable.
 
                                    PART III
 
     Certain information required by Part III is omitted from this Report on
Form 10-K in that the Registrant will file a definitive proxy statement within
120 days after the end of its fiscal year pursuant to Regulation 14A with
respect to the 1996 Annual Meeting of Stockholders (the "Proxy Statement") to be
held November 14, 1996 and certain information included therein is incorporated
herein by reference.
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information required by this item relating to directors is incorporated
by reference to the information under the caption "Proposal No. 1 -- Election of
Directors" in the Proxy Statement.
 
                                       17
<PAGE>   21
 
     The executive officers of the Registrant, who are elected by the board of
directors, and their ages as of June 30, 1996 and principal positions are as
follows:
 
<TABLE>
<CAPTION>
                   NAME                      AGE                    POSITION
-------------------------------------------  ---   -------------------------------------------
<S>                                          <C>   <C>
Frank M. Fischer...........................  54    President, Chief Executive Officer, Acting
                                                   Chief Financial Officer
Eric S. Fain, M.D..........................  35    Vice President, Systems Development
Robert D. Gaffney..........................  36    Vice President of Manufacturing
Kevin T. Larkin............................  47    Vice President of Marketing and Sales
Stephen C. Masson..........................  37    Vice President of Defibrillator Development
Mark J. Meltzer............................  46    Vice President, Patent Counsel
Sandra L. Miller...........................  54    Vice President of Leads Operations
Benjamin D. Pless..........................  37    Vice President of Research and Technology
                                                   Development
Michael B. Sweeney.........................  45    Vice President of Clinical Engineering and
                                                   Regulatory Affairs
</TABLE>
 
     Frank M. Fischer became President, Chief Executive Officer and a director
of the Company in July 1987. From May 1977 until joining the Company, Mr.
Fischer held various positions with Cordis Corporation ("Cordis"), a
manufacturer of medical products, including cardiac pacemakers, serving most
recently as President of the Implantable Products Division. Mr. Fischer is a
director of Heartstream, Inc. and Heartport, Inc. Mr. Fischer holds an M.S.
degree from Rensselaer Polytechnic Institute.
 
     John B. Allison joined the Company in April 1996 as Vice President of
Quality Assurance and Regulatory Compliance. From 1992 until joining the
Company, he was Corporate Senior Director of Quality Assurance of Nellcor
Puritan Bennett Incorporated. From 1989 to 1992, he was managing consultant at
Coopers & Lybrand. Mr. Allison holds a B.S. degree from Purdue University.
 
     Eric S. Fain, M.D. joined the Company in June 1987 as Manager of Clinical
Research and was appointed Vice President, Systems Development in July 1996. Dr.
Fain holds an M.D. degree from Stanford University School of Medicine.
 
     Robert D. Gaffney joined the Company in October 1987 as Manager of
Manufacturing and was appointed Vice President of Manufacturing in October 1991.
From June 1983 until joining the Company, he was employed by Cordis, serving
most recently as Associate Manager of Mechanical Design and Engineering. Mr.
Gaffney holds a B.S. degree from the Georgia Institute of Technology.
 
     Kevin T. Larkin joined the Company in February 1992 as Vice President of
Marketing and Sales. Prior to joining the Company, he was Marketing Director of
SciMed Life Systems, Inc., a manufacturer of balloon and guiding catheters for
the treatment of cardiovascular disease. From October 1986 until December 1991,
Mr. Larkin was with Medtronic, Inc. in both the pacing and interventional
catheter sales and marketing groups, most recently as Director, Global Marketing
for Medtronic Interventional. Before that, he was Director of Marketing and
Sales of Cordis.
 
     Stephen C. Masson joined the Company in March 1987 as Project Engineer.
From 1989 until April 1995, when he was appointed Vice President of
Defibrillator Development, he held various engineering management positions.
From January 1979 until joining the Company, Mr. Masson was an engineer in the
Cardiac Pacemakers Instrument Design Division of Cordis. Mr. Masson holds a B.S.
degree from the University of Miami.
 
     Mark J. Meltzer joined the Company in May 1992 as Vice President, Patent
Counsel. From 1989 until joining the Company, he was Vice President, Patent
Counsel of O'Neill, Inc., a manufacturer of products for aquatic sports. From
1983 to 1989 he was employed by Hughes Aircraft Company, a manufacturer of
aerospace electronics products, where he served as Patent Counsel. Mr. Meltzer
holds a J.D. degree from Hastings College of Law and a B.S.E.E. degree from the
University of California at Berkeley.
 
                                       18
<PAGE>   22
 
     Sandra L. Miller joined the Company in April 1994 as Vice President of
Leads Operations. From December 1992 until joining the Company, she was Product
Development Manager for angioplasty products at Boston Scientific Corp. From
1987 through 1992, she was Manager of Manufacturing for Telectronics Pacing
Systems, a manufacturer of medical products including cardiac pacemakers and
defibrillators. Ms. Miller holds an M.S. degree from Purdue University.
 
     Benjamin D. Pless joined the Company in July 1985 as Director of
Engineering and was appointed Vice President of Engineering in February 1986,
and Vice President of Research and Technology Development in April 1995. From
1980 to 1984 he was employed by Intermedics, where he served as a Design
Engineer and as Project Engineer for implantable antiarrhythmic devices. Mr.
Pless holds a B.S.E.E. degree from the Massachusetts Institute of Technology.
 
     Michael B. Sweeney joined the Company in July 1985 as Vice President of
Clinical Engineering. From 1979 to 1985, he was Director of Electrophysiologic
Studies at Intermedics. From 1975 to 1979 he was employed by Rush Presbyterian
St. Luke's Medical Center in Chicago, where he served as assistant director of
the Pacemaker Surveillance Program. Mr. Sweeney holds a B.A. degree from Drake
University.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
     Summary Compensation Table. The following table sets forth certain
compensation paid by the Company to the Chief Executive Officer and the four
other most highly compensated executive officers of the Company for services
rendered during each of the three fiscal years ended June 30, 1994, 1995 and
1996:
 
<TABLE>
<CAPTION>
                                                                              LONG TERM
                                                                            COMPENSATION
                                                                               AWARDS
                                                                            -------------
                                                                             SECURITIES
                                                    ANNUAL COMPENSATION      UNDERLYING
                                         FISCAL   -----------------------      OPTIONS         ALL OTHER
      NAME AND PRINCIPAL POSITION         YEAR    SALARY($)   BONUS($)(1)   (# OF SHARES)   COMPENSATION($)
---------------------------------------  ------   ---------   -----------   -------------   ---------------
<S>                                      <C>      <C>         <C>           <C>             <C>
Frank M. Fischer.......................   1996    $ 315,000    $ 153,000        65,000          $ 4,655(2)
  President, Chief Executive              1995    $ 301,154    $ 108,000        65,000          $ 1,500(2)
  Officer and Director, Acting            1994    $ 276,058    $ 150,000            --               --
  CFO
Michael B. Sweeney.....................   1996    $ 212,000    $ 110,000        30,000          $ 4,655(2)
  Vice President of Clinical              1995    $ 200,769    $  50,000        30,000          $ 1,500(2)
  Engineering and Regulatory              1994    $ 180,692    $  75,000            --               --
  Affairs
Mark J. Meltzer........................   1996    $ 193,113    $  58,125        20,000          $ 6,293(2)
  Vice President, Patent                  1995    $ 181,390    $  30,000        15,000          $ 1,500(2)
  Counsel                                 1994    $ 166,862    $  45,000            --               --
Kevin T. Larkin........................   1996    $ 176,600    $  95,400        20,000          $ 4,749(2)
  Vice President of Marketing             1995    $ 168,646    $  45,000        20,000          $ 1,500(2)
  and Sales                               1994    $ 164,194    $  75,000            --          $69,542(3)
Stephen C. Masson(4)...................   1996    $ 164,999    $  48,000        25,000          $ 4,420(2)
  Vice President of                       1995    $  42,404    $  70,000        62,500          $ 1,500(2)
  Defibrillator Development............   1994           --           --            --               --
</TABLE>
 
---------------
(1) Represents discretionary bonus payments determined by the Board of Directors
    or the compensation committee thereof.
 
(2) Represents matching grants to salary deferral plan.
 
(3) Represents relocation expenses paid to Mr. Larkin.
 
(4) Mr. Masson was promoted to Vice President of Defibrillator Development on
    April 3, 1995.
 
                                       19
<PAGE>   23
 
     Option Grants in Last Fiscal Year.  The following table sets forth
information with respect to options granted during fiscal 1996 to each executive
officer named in the Summary Compensation Table above:
 
<TABLE>
<CAPTION>
                                                       OPTION GRANTS IN LAST FISCAL YEAR
                            ----------------------------------------------------------------------------------------
                                                                                              POTENTIAL REALIZABLE
                                               % OF TOTAL                                    VALUE AT ASSUMED ANNUAL
                              NUMBER OF         OPTIONS                                       RATES OF STOCK PRICE
                              SECURITIES       GRANTED TO                                    APPRECIATION FOR OPTION
                              UNDERLYING       EMPLOYEES      EXERCISE OR                            TERM(2)
                               OPTIONS         IN FISCAL      BASE PRICE      EXPIRATION     -----------------------
           NAME             GRANTED (#)(1)        YEAR          ($/SH)           DATE         5%($)         10%($)
--------------------------- --------------     ----------     -----------     ----------     --------     ----------
<S>                         <C>                <C>            <C>             <C>            <C>          <C>
Frank M. Fischer...........     65,000            6.4%          $ 15.63         7/01/06      $638,925     $1,619,163
Michael B. Sweeney.........     30,000            3.0%          $ 15.63         7/01/06      $294,889     $  747,306
Mark J. Meltzer............     20,000            2.0%          $ 15.63         7/01/06      $196,592     $  498,204
Kevin T. Larkin............     20,000            2.0%          $ 15.63         7/01/06      $196,592     $  498,204
Stephen C. Masson..........     25,000            2.5%          $ 15.63         7/01/06      $245,741     $  622,755
</TABLE>
 
---------------
(1) All listed options were granted the Company's 1995 Stock Option Plan at an
    exercise price equal to the fair market value on the date of grant. These
    stock options vest as to 25% of the shares from the date of grant at the end
    of the first year and 1/48th of the shares per month thereafter, with full
    vesting occurring four years after the date of grant.
 
(2) The dollar amounts under these columns are the result of calculations at the
    5% and 10% rates mandated by the Securities and Exchange Commission's rules
    and do not represent an estimate or projection by the Company as to the
    future price of the Common Stock. The Company did not use an alternative
    formula for a grant date valuation, as the Company does not believe that any
    formula will determine with reasonable accuracy a present value based on
    future factors, which include factors that are unknown and may be volatile
    and/or outside the control of the Company.
 
     Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values. The following table sets forth, for each of the executive officers named
in the Summary Compensation Table above, information with respect to option
exercises during fiscal 1996 and the value of unexercised options at June 30,
1996:
 
<TABLE>
<CAPTION>
                                                               NUMBER OF UNEXERCISED          VALUE OF UNEXERCISED IN-
                                                                      OPTIONS                   THE-MONEY OPTIONS AT
                                SHARES                          AT FISCAL YEAR-END:                YEAR-END $(2):
                              ACQUIRED ON       VALUE       ----------------------------    ----------------------------
            NAME               EXERCISE      REALIZED(1)    EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
----------------------------- -----------    -----------    -----------    -------------    -----------    -------------
<S>                           <C>            <C>            <C>            <C>              <C>            <C>
Frank M. Fischer.............       --               --        31,250         113,750        $ 171,044       $ 139,831
Michael B. Sweeney...........       --               --        22,500          52,500        $ 163,388       $  64,538
Mark J. Meltzer..............       --               --        63,021          36,979        $   3,281       $  39,744
Kevin T. Larkin..............       --               --        89,375          50,625        $   4,375       $  43,025
Stephen C. Masson............    9,750        $ 207,393        23,656          69,844        $  34,569       $ 123,206
</TABLE>
 
---------------
(1) Based on the closing price of the Company's Common Stock on the date of the
    exercise.
 
(2) Based on a fair market value of $17.13, which was the closing price of the
    Company's Common Stock on June 30, 1996.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information required by this item is incorporated by reference to the
information under the caption "Record Date and Stock Ownership" in the Proxy
Statement.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information required by this item is incorporated by reference to the
information under the caption "Certain Transactions" in the Proxy Statement.
 
                                       20
<PAGE>   24
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
  (A) 1. Financial Statements
 
     The following Financial Statements of Ventritex, Inc. and Report of Ernst &
Young LLP, Independent Auditors are incorporated by reference in the respective
portions of the Registrant's 1996 annual report to stockholders and included in
Exhibit 13.1 to this report:
 
          Report of Ernst & Young LLP, Independent Auditors
 
          Balance Sheets, June 30, 1996 and 1995
 
          Statements of Operations, Years Ended June 30, 1996, 1995 and 1994
 
          Statements of Stockholders' Equity, Years Ended June 30, 1996, 1995
     and 1994
 
          Statements of Cash Flows, Years Ended June 30, 1996, 1995 and 1994
 
          Notes to Financial Statements
 
       2. Financial Statement Schedules
 
     The financial statement schedule entitled "Valuation and Qualifying
Accounts" is included at page S-1 of this Form 10-K.
 
     All other schedules are omitted because they are not applicable or the
required information is shown in the Financial Statements or the notes thereto.
 
       3. Exhibits
 
     Refer to (c) below.
 
  (B) Reports on Form 8-K
 
     The Company was not required to and did not file any reports on Form 8-K
during the three months ended June 30, 1996.
 
  (C) Exhibits
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                                           DESCRIPTION
-------      ---------------------------------------------------------------------------------
<S>          <C>
 3.1  (4)    Certificate of Incorporation filed October 24, 1994
 3.2  (4)    Bylaws, as amended
 3.3  (4)    Certificate of Designations of Rights, Preferences and Privileges of Series A
             Participating Preferred Stock
 3.4  (4)    Preferred Shares Rights Agreement, dated as of August 16, 1994, as amended
 4.2  (6)    Form of Convertible Subordinated Note (included in Exhibit 4.3)
 4.3  (6)    Form of Indenture
10.1  (7)    Form of Indemnification Agreement for directors and officers
10.2A (3)    Amended 1985 Incentive Stock Option Plan and forms of agreements thereunder
10.3  (1)    1991 Employee Stock Purchase Plan
10.4  (1)    Representative Preferred Stock Purchase Agreement
10.5  (1)    Registration Rights Agreement dated November 22, 1991
10.6  (1)    Industrial Building Lease dated April 11, 1988 between the Registrant and J.J.
             and W., a general partnership (Building Lease) with First Amendment dated October
             21, 1988 and second Amendment dated March 8, 1991
</TABLE>
 
                                       21
<PAGE>   25
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                                           DESCRIPTION
-------      ---------------------------------------------------------------------------------
<S>          <C>
10.6A (2)    Third Amendment dated May 1, 1992 and Fourth Amendment dated August 2, 1992, to
             Building Lease
10.6B (5)    Fifth Amendment dated October 21, 1993, to Building Lease
10.6C        Sixth Amendment dated October 11, 1995, to Building Lease
10.9  (1)    Agreement dated May 8, 1991 between the Registrant and Messrs. Grundfest,
             Gershman and Reznek
10.10 (1)    Agreement dated November 24, 1991 between the Registrant and Thomas J. Fogarty,
             M.D.
10.11 (2)*   License and Covenant Not to Sue dated May 7, 1992, effective February 11, 1992
             between the Registrant and Medtronic, Inc.
10.12 (3)*   License Agreement dated July 27, 1993 among the Registrant, Eli Lilly and Company
             and affiliates of Lilly
10.13 (3)*   Settlement and License Agreement dated July 27, 1993 among the Registrant,
             Telectronics Pacing Systems, Inc. and affiliates of Telectronics
10.14 (7)    1995 Stock Option Plan and forms of agreements thereunder
10.15 (7)    1995 Director Option Plan and forms of agreements thereunder
11.1         Statement of Computation of Earnings Per Share
13.1         Portions of Annual Report to Stockholders Incorporated by Reference
23.1         Consent of Ernst & Young LLP, Independent Auditors
24.1     +   Power of Attorney
27.1         Financial Data Schedule
</TABLE>
 
---------------
 *  Confidential treatment granted.
 
 +  Previously filed.
 
(1) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Registration Statement on Form S-1 (No. 33-44360), as amended.
 
(2) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1992.
 
(3) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1993.
 
(4) Incorporated by reference to Registrant's Registration Statement on Form 8-A
    (No. 0-19713) filed with the Securities and Exchange Commission on December
    29, 1994.
 
(5) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
    December 31, 1993.
 
(6) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Registration Statement on Form S-3 (No. 333-07651), as amended.
 
(7) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1995.
 
  (D) Financial Statement Schedules
 
     See Item 14(a)(2) above.
 
                                       22
<PAGE>   26
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned, thereunto duly authorized on this 18th day of February, 1997.
 
                                          VENTRITEX, INC.
 
                                          By:                  *
 
                                            ------------------------------------
                                            Frank M. Fischer
                                            President, Chief Executive Officer,
                                            Director and Acting Chief Financial
                                            Officer
 
     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 dates indicated.
 
<TABLE>
<CAPTION>
                    NAME                                   TITLE                    DATE
---------------------------------------------  -------------------------------------------------
<C>                                            <S>                           <C>
       PRINCIPAL EXECUTIVE OFFICER AND
        PRINCIPAL FINANCIAL OFFICER:
 
                          *                    President, Chief Executive     February 18, 1997
---------------------------------------------  Officer, Director and Acting
              Frank M. Fischer                 Chief Financial Officer
 
        PRINCIPAL ACCOUNTING OFFICER:
 
                     /s/                       Controller                     February 18, 1997
               DAVID R. BUNKER
---------------------------------------------
               David R. Bunker
 
                          *                    Director                       February 18, 1997
---------------------------------------------
           Richard L. Karrenbrock
 
                          *                    Director                       February 18, 1997
---------------------------------------------
           C. Raymond Larkin, Jr.
 
                          *                    Director                       February 18, 1997
---------------------------------------------
              Robert R. Momsen
 
                   By: /s/
               DAVID R. BUNKER
---------------------------------------------
               David R. Bunker
              Attorney-in-Fact
</TABLE>
 
                                       23
<PAGE>   27
 
                                VENTRITEX, INC.
 
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                    YEARS ENDED JUNE 30, 1994, 1995 AND 1996
 
<TABLE>
<CAPTION>
                                                BALANCE AT      CHARGES TO                      BALANCE AT
                                               BEGINNING OF     COSTS AND      DEDUCTIONS/        END OF
                                                  PERIOD         EXPENSES       WRITE-OFFS        PERIOD
                                               ------------     ----------     ------------     ----------
<S>                                            <C>              <C>            <C>              <C>
Allowance for doubtful accounts:
  Year Ended June 30, 1994...................    $     65        $    141              --        $    206
  Year Ended June 30, 1995...................    $    206        $    278              --        $    484
  Year Ended June 30, 1996...................    $    484              --              --        $    484
Accrued warranty:
  Year Ended June 30, 1994...................    $    347        $    788        $    (79)       $  1,056
  Year Ended June 30, 1995...................    $  1,056        $    640        $    (49)       $  1,647
  Year Ended June 30, 1996...................    $  1,647        $    136        $    (62)       $  1,721
Inventory Reserves:
  Year Ended June 30, 1994...................    $  2,286        $  6,467        $   (164)       $  8,589
  Year Ended June 30, 1995...................    $  8,589        $  6,569        $ (2,677)       $ 12,481
  Year Ended June 30, 1996...................    $ 12,481        $ 15,092        $ (9,485)       $ 18,088
</TABLE>
 
                                       S-1
<PAGE>   28
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
                                                                                    SEQUENTIALLY
EXHIBIT                                                                               NUMBERED
  NO.                                      DESCRIPTION                                  PAGE
-------      -----------------------------------------------------------------------
<S>          <C>                                                                    <C>
 3.1  (4)    Certificate of Incorporation filed October 24, 1994
 3.2  (4)    Bylaws, as amended
 3.3  (4)    Certificate of Designations of Rights, Preferences and Privileges of
             Series A Participating Preferred Stock
 3.4  (4)    Preferred Shares Rights Agreement, dated as of August 16, 1994, as
             amended
 4.2  (6)    Form of Convertible Subordinated Note (included in Exhibit 4.3)
 4.3  (6)    Form of Indenture
10.1  (7)    Form of Indemnification Agreement for directors and officers
10.2A (3)    Amended 1985 Incentive Stock Option Plan and forms of agreements
             thereunder
10.3  (1)    1991 Employee Stock Purchase Plan
10.4  (1)    Representative Preferred Stock Purchase Agreement
10.5  (1)    Registration Rights Agreement dated November 22, 1991
10.6  (1)    Industrial Building Lease dated April 11, 1988 between the Registrant
             and J.J. and W., a general partnership (Building Lease) with First
             Amendment dated October 21, 1988 and second Amendment dated March 8,
             1991
10.6A (2)    Third Amendment dated May 1, 1992 and Fourth Amendment dated August 2,
             1992, to Building Lease
10.6B (5)    Fifth Amendment dated October 21, 1993, to Building Lease
10.6C        Sixth Amendment dated October 11, 1995, to Building Lease
10.9  (1)    Agreement dated May 8, 1991 between the Registrant and Messrs.
             Grundfest, Gershman and Reznek
10.10 (1)    Agreement dated November 24, 1991 between the Registrant and Thomas J.
             Fogarty, M.D.
10.11 (2)*   License and Covenant Not to Sue dated May 7, 1992, effective February
             11, 1992 between the Registrant and Medtronic, Inc.
10.12 (3)*   License Agreement dated July 27, 1993 among the Registrant, Eli Lilly
             and Company and affiliates of Lilly
10.13 (3)*   Settlement and License Agreement dated July 27, 1993 among the
             Registrant, Telectronics Pacing Systems, Inc. and affiliates of
             Telectronics
10.14 (7)    1995 Stock Option Plan and forms of agreements thereunder
10.15 (7)    1995 Director Option Plan and forms of agreements thereunder
11.1         Statement of Computation of Earnings Per Share
13.1         Portions of Annual Report to Stockholders Incorporated by Reference
23.1         Consent of Ernst & Young LLP, Independent Auditors
24.1     +   Power of Attorney
27.1         Financial Data Schedule
</TABLE>
 
---------------
 *  Confidential treatment granted.
 
 +  Previously filed.
 
(1) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Registration Statement on Form S-1 (No. 33-44360), as amended.
 
(2) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1992.
 
(3) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1993.
<PAGE>   29
 
(4) Incorporated by reference to Registrant's Registration Statement on Form 8-A
    (No. 0-19713) filed with the Securities and Exchange Commission on December
    29, 1994.
 
(5) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
    December 31, 1993.
 
(6) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Registration Statement on Form S-3 (No. 333-07651), as amended.
 
(7) Incorporated by reference to the same-numbered exhibit filed with the
    Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
    1995.