EXHIBIT 10.49
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                               GUIDANT CORPORATION

                            NONQUALIFIED STOCK OPTION

      This Nonqualified Stock Option ("Stock Option") has been granted on ___
(the "Grant Date") by Guidant Corporation, an Indiana corporation (the
"Company"), with its principal offices in Indianapolis, Indiana, to

_______________________________________________________________________________
                                  ("Grantee").

                                    RECITALS

      Under the Guidant Corporation 1998 Stock Plan ("1998 Plan"), the
Management Development and Compensation Committee of the Company's Board of
Directors (the "Committee") has determined the form of this Stock Option and
selected the Grantee, an Eligible Person, to receive this Stock Option under the
1998 Plan. The applicable terms of the 1998 Plan are incorporated in this Stock
Option by reference, including the definition of terms contained in the 1998
Plan. In this Stock Option, the term "Company" means Guidant Corporation and its
subsidiaries, unless the context requires otherwise.

                                     OPTION

      Pursuant to the terms of the 1998 Plan, the Company grants to the Grantee
the right to purchase shares of Guidant Stock from the Company by one or more
exercises of this Stock Option under the following terms and conditions:

      SECTION 1. Number of Shares. Subject to adjustment as provided in Section
3, the Grantee may purchase a total of ______ shares of Guidant Stock. This
Stock Option is a nonqualified stock option and is not intended to satisfy the
requirements of Section 422 of the Internal Revenue Code.

      SECTION 2. Option Price. Subject to adjustment as provided in Section 3,
the Option Price shall be $_____ per share of Guidant Stock, which has been
determined by the Committee to be the Fair Market Value of Guidant Stock on the
Grant Date.

      SECTION 3. Adjustments to Number of Shares and Option Price. If any
subdivision or combination of shares of Guidant Stock, or any stock dividend,
capital reorganization, recapitalization, or consolidation or merger with the
Company as the surviving corporation occurs, or if additional shares or new or
different shares or other securities of the Company or

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                                                                   EXHIBIT 10.49

any other issuer are distributed with respect to shares of Guidant Stock through
a spin-off, exchange offer, or other extraordinary distribution, the Committee
shall make those adjustments it determines appropriate in its discretion, in the
number of shares still subject to purchase under this Stock Option or to the
Option Price or both. If an adjustment would result in a fractional share, then
upon exercise of this Stock Option and payment of the Option Price the Committee
may in its discretion either pay cash for the fractional right or round the
fraction.

      SECTION 4. Option Exercise Period. This Stock Option may be exercised from
the Commencement Date to and including the Termination Date ("Option Exercise
Period").

The Commencement Date shall be the Grant Date.

      The Termination Date shall be the earliest to occur of a., b., c. or d
below:

            a.    ___________,

            b.    the day of Termination of Employment (as defined below),
                  except by reason of (i) death, (ii) retirement from the
                  Company as a Retired Employee, or (iii) Disability,

            c.    the corresponding calendar day in the sixtieth month following
                  the day on which the Grantee becomes a Retired Employee, or on
                  which the Grantee's employment is terminated by reason of
                  Disability, or on the last day of that sixtieth month if there
                  is no corresponding day in that month, or

            d.    the corresponding calendar day in the sixtieth month following
                  the date of death of the Grantee while in the active service
                  of the Company, or on the last day of that sixtieth month if
                  there is no corresponding day in that month.

"Termination of Employment" means the cessation, for any reason, of the relation
of employer and employee between the Grantee and the Company. The Committee's
determination whether the Grantee's employment has been terminated by reason of
Disability or whether a leave of absence constitutes a Termination of Employment
shall be final and binding on the Grantee. This Stock Option shall not confer
upon the Grantee the right to continue in the employment of the Company or
affect in any way the right of the Company to terminate the employment of the
Grantee at any time, with or without notice or cause.

A Retired Employee shall be a person whose employment with the Company has
terminated upon or after the earliest of (i) the day upon which the person's age
plus years of service with the Company, including any predecessor company of the
Company, equals 80, and the person is eligible to receive transition benefits
under The Guidant Retirement Plan, (ii) the day the person has attained at least
55 years of age and has at least 10 years of service with the Company, including
any predecessor company of the Company, (iii) the day the person attains 65
years of age, or (iv) as the Committee otherwise determines.

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                                                                   EXHIBIT 10.49

      SECTION 5. Limitations on Right to Exercise Stock Option. The right to
exercise this Stock Option during the Option Exercise Period shall be subject to
the following limitations:

      a.    During the lifetime of the Grantee, only the Grantee or a guardian
            or legal representative acting for the Grantee under judicial
            authority may exercise this Stock Option.

      b.    After the death of the Grantee, this Stock Option may be exercised
            only by a successor grantee who has become entitled to exercise by
            will or the laws of descent and distribution and who has furnished
            proof satisfactory to the Company of his or her right to exercise.
            The term "Grantee" includes a successor grantee where applicable.

      c.    The Grantee may not exercise this Stock Option with respect to a
            fractional share or with respect to less than twenty-five (25)
            shares of Guidant Stock unless the exercise covers the entire
            balance of the shares of Guidant Stock subject to purchase. This
            number is not subject to an adjustment under Section 3.

      d.    The Grantee's right to exercise this Stock Option and the Company's
            obligation to issue or transfer shares are subject to all stock
            exchange requirements, to all applicable laws, and to approvals by
            any governmental or regulatory agency as may be required.

      SECTION 6. Non-Transfer of Stock Option. Neither this Stock Option nor any
right under it is transferable except by will or applicable laws of descent and
distribution.

      SECTION 7. Exercise of Stock Option. The Grantee may exercise this Stock
Option by delivering a notice of exercise to the Company's stock option
processor, as designated from time to time. The notice of exercise, once
delivered, shall be irrevocable. The Option Price shall be paid on or about the
time of the notice of exercise, as shall be directed by the Company's stock
option processor. The notice of exercise must specify the number of shares of
Guidant Stock covered by the exercise and state the number of shares of Guidant
stock, if any, being tendered in exchange. Upon receipt of the notice of
exercise, the stock option processor shall send to the Grantee a statement of
the Option Price, the fair market value of Guidant Stock on the exercise date,
the number of shares of Guidant Stock that may be delivered in payment of the
Option Price, and the amount of withholding tax due, if any. Shares will be
issued or transferred only to the Grantee or the Grantee and another as joint
tenants with right of survivorship.

      SECTION 8. Ownership of Guidant Stock and Delivery of Certificate. The
Committee may, from time to time, establish alternative procedures for paying
the Option Price. The Company will not issue or transfer shares of Guidant Stock
upon exercise of this Stock Option until the Option Price is fully paid and the
Grantee shall have no rights as a shareholder as to shares covered by an
exercise until the shares are issued or transferred on the Company's books. At
the time the Grantee becomes the owner of the shares covered by the exercise, he
or she shall cease to be the owner of any shares tendered in payment of the
Option Price.

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                                                                   EXHIBIT 10.49

      SECTION 9. Withholding Tax. Before delivering a certificate for shares of
Guidant Stock issued or transferred under this Stock Option, the Company may, by
notice to the Grantee, require that the Grantee pay to the Company the amount of
federal, state, or local taxes, if any, required by law to be withheld.

      SECTION 10. Notices and Payments. Any notices to be given by the Grantee
under this Stock Option shall be in writing, and any notice or payment shall be
deemed to have been given or made only upon receipt by the Company or the
Company's stock option processor at such address as may be communicated in
writing to the Grantee from time to time. Any notice or communication by the
Company under this Stock Option shall be in writing and shall be deemed to have
been given if mailed or delivered to the Grantee at the address listed in the
records of the Company or at such address as specified in writing to the Company
by the Grantee.

      SECTION 11. Waiver. The waiver by the Company of any provision of this
Stock Option shall not operate as, or be construed to be, a waiver of the same
or any other provision of this Stock Option at any subsequent time for any other
purpose.

      SECTION 12. Revocation or Modification of Stock Option. This Stock Option
shall be irrevocable except that the Company shall have the right under Section
11(e) of the 1998 Plan to revoke this Stock Option at any time if it is contrary
to law or to modify this Stock Option to bring it into compliance with any valid
and mandatory law or government regulation.

      SECTION 13. Section Headings. The section headings in this Stock Option
are for convenience of reference only and shall not be deemed a part of, or
germane to, the interpretation or construction of this Stock Option.

      SECTION 14. Determinations by Committee. Determinations by the Committee
shall be final and conclusive with respect to the interpretation of the 1998
Plan and this Stock Option.

      SECTION 15. Change of Control. The provisions of Section 9(a)(i) of the
1998 Plan apply to this Stock Option.

      SECTION 16. Rights as a Shareholder. The Grantee or the permitted
transferee of this Stock Option shall have no rights as a shareholder with
respect to any shares subject to this Stock Option prior to the purchase of such
shares by exercise of this Stock Option, except as provided in the 1998 Plan.
Nothing in the 1998 Plan or this Stock Option shall create an obligation on the
part of the Company to repurchase any shares of Guidant stock purchased
hereunder.

      SECTION 17. Effective Date. The effective date of this Stock Option shall
be the Grant Date.

      SECTION 18. Governing Law. The validity and construction of this Stock
Option shall be governed by the laws of the State of Indiana.

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                                                                   EXHIBIT 10.49


              IN WITNESS WHEREOF, the Company has caused this Stock Option to be
executed and granted in Indianapolis, Indiana.

                                    GUIDANT CORPORATION

                                    By:
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