INDEMNITY AGREEMENT


     THIS AGREEMENT is made and entered into as of           , 1996 by and 
between ARTERIAL VASCULAR ENGINEERING, INC., a Delaware corporation (the 
"Corporation"), and _________________ ("Agent").

                                       RECITALS

     WHEREAS, Agent performs a valuable service to the Corporation in the 
capacity as ____________________________ of the Corporation; 

     WHEREAS, the stockholders of the Corporation have adopted bylaws (the 
"Bylaws") providing for the indemnification of the directors, officers, 
employees and other agents of the Corporation, including persons serving at 
the request of the Corporation in such capacities with other corporations or 
enterprises, as authorized by the Delaware General Corporation Law, as 
amended (the "Code"); 

     WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit 
contracts between the Corporation and its agents, officers, employees and 
other agents with respect to indemnification of such persons; and 

     WHEREAS, in order to induce Agent to continue to serve as 
________________ of the Corporation, the Corporation has determined and 
agreed to enter into this Agreement with Agent;

     NOW, THEREFORE, in consideration of Agent's continued service as 
___________________________ of the Corporation after the date hereof, the 
parties hereto agree as follows:  

                                      AGREEMENT

     1.   SERVICES TO THE CORPORATION.  Agent will serve, at the will of the 
Corporation or under separate contract, if any such contract exists, as 
_______________________ of the Corporation or as a director, officer or other 
fiduciary of an affiliate of the Corporation faithfully and to the best of 
Agent's ability so long as Agent is duly elected and qualified in accordance 
with the provisions of the Bylaws or other applicable charter documents of 
the Corporation or such affiliate; provided, however, that Agent may at any 
time and for any reason resign from such position (subject to any contractual 
obligation that Agent may have assumed apart from this Agreement) and that 
the Corporation or any affiliate shall have no obligation under this 
Agreement to continue Agent in any such position.


                                      1.


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     2.   INDEMNITY OF AGENT.  The Corporation hereby agrees to hold harmless 
and indemnify Agent to the fullest extent authorized or permitted by the 
provisions of the Bylaws and the Code, as the same may be amended from time 
to time (but, only to the extent that such amendment permits the Corporation 
to provide broader indemnification rights than the Bylaws or the Code 
permitted prior to adoption of such amendment).

     3.   ADDITIONAL INDEMNITY.  In addition to and not in limitation of the 
indemnification otherwise provided for herein, and subject only to the 
exclusions set forth in Section 4 hereof, the Corporation hereby further 
agrees to hold harmless and indemnify Agent:

          (a)  against any and all expenses (including attorneys' fees), 
witness fees, damages, judgments, fines and amounts paid in settlement and 
any other amounts that Agent becomes legally obligated to pay because of any 
claim or claims made against or by Agent in connection with any threatened, 
pending or completed action, suit or proceeding, whether civil, criminal, 
arbitrational, administrative or investigative (including an action by or in 
the right of the Corporation) to which Agent is, was or at any time becomes a 
party, or is threatened to be made a party, by reason of the fact that Agent 
is, was or at any time becomes a director, officer, employee or other agent 
of Corporation, or is or was serving or at any time serves at the request of 
the Corporation as a director, officer, employee or other agent of another 
corporation, partnership, joint venture, trust, employee benefit plan or 
other enterprise; and

          (b)  otherwise to the fullest extent as may be provided to Agent by 
the Corporation under the non-exclusivity provisions of the Code and Section 
43 of the Bylaws.

     4.   LIMITATIONS ON ADDITIONAL INDEMNITY.  No indemnity pursuant to 
Section 3 hereof shall be paid by the Corporation:

          (a)  on account of any claim against Agent for an accounting of 
profits made from the purchase or sale by Agent of securities of the 
Corporation pursuant to the provisions of Section 16(b) of the Securities 
Exchange Act of 1934 and amendments thereto or similar provisions of any 
federal, state or local statutory law;

          (b)  on account of Agent's conduct that was knowingly fraudulent or 
deliberately dishonest or that constituted willful misconduct; 

          (c)  on account of Agent's conduct that constituted a breach of 
Agent's duty of loyalty to the Corporation or resulted in any personal profit 
or advantage to which Agent was not legally entitled;

          (d)  for which payment is actually made to Agent under a valid and 
collectible insurance policy or under a valid and enforceable indemnity 
clause, bylaw or agreement, except in respect of any excess beyond payment 
under such insurance, clause, bylaw or agreement;
  
          (e)  if indemnification is not lawful (and, in this respect, both 
the Corporation and Agent have been advised that the Securities and Exchange 
Commission believes that 


                                      2.

<PAGE>

indemnification for liabilities arising under the federal securities laws is 
against public policy and is, therefore, unenforceable and that claims for 
indemnification should be submitted to appropriate courts for adjudication); 
or 

          (f)  in connection with any proceeding (or part thereof) initiated 
by Agent, or any proceeding by Agent against the Corporation or its 
directors, officers, employees or other agents, unless (i) such 
indemnification is expressly required to be made by law, (ii) the proceeding 
was authorized by the Board of Directors of the Corporation, (iii) such 
indemnification is provided by the Corporation, in its sole discretion, 
pursuant to the powers vested in the Corporation under the Code, or (iv) the 
proceeding is initiated pursuant to Section 9 hereof.

     5.   CONTINUATION OF INDEMNITY.  All agreements and obligations of the 
Corporation contained herein shall continue during the period Agent is a 
director, officer, employee or other agent of the Corporation (or is or was 
serving at the request of the Corporation as a director, officer, employee or 
other agent of another corporation, partnership, joint venture, trust, 
employee benefit plan or other enterprise) and shall continue thereafter so 
long as Agent shall be subject to any possible claim or threatened, pending 
or completed action, suit or proceeding, whether civil, criminal, 
arbitrational, administrative or investigative, by reason of the fact that 
Agent was serving in the capacity referred to herein.

     6.   PARTIAL INDEMNIFICATION.  Agent shall be entitled under this 
Agreement to indemnification by the Corporation for a portion of the expenses 
(including attorneys' fees), witness fees, damages, judgments, fines and 
amounts paid in settlement and any other amounts that Agent becomes legally 
obligated to pay in connection with any action, suit or proceeding referred 
to in Section 3 hereof even if not entitled hereunder to indemnification for 
the total amount thereof, and the Corporation shall indemnify Agent for the 
portion thereof to which Agent is entitled.

     7.   NOTIFICATION AND DEFENSE OF CLAIM.  Not later than thirty (30) days 
after receipt by Agent of notice of the commencement of any action, suit or 
proceeding, Agent will, if a claim in respect thereof is to be made against 
the Corporation under this Agreement, notify the Corporation of the 
commencement thereof; but the omission so to notify the Corporation will not 
relieve it from any liability which it may have to Agent otherwise than under 
this Agreement.  With respect to any such action, suit or proceeding as to 
which Agent notifies the Corporation of the commencement thereof:

          (a)  the Corporation will be entitled to participate therein at its 
own expense;

          (b)  except as otherwise provided below, the Corporation may, at 
its option and jointly with any other indemnifying party similarly notified 
and electing to assume such defense, assume the defense thereof, with counsel 
reasonably satisfactory to Agent.  After notice from the Corporation to Agent 
of its election to assume the defense thereof, the Corporation will not be 
liable to Agent under this Agreement for any legal or other expenses 
subsequently incurred by Agent in connection with the defense thereof except 
for reasonable costs of investigation or


                                      3.

<PAGE>

otherwise as provided below.  Agent shall have the right to employ separate 
counsel in such action, suit or proceeding but the fees and expenses of such 
counsel incurred after notice from the Corporation of its assumption of the 
defense thereof shall be at the expense of Agent unless (i) the employment of 
counsel by Agent has been authorized by the Corporation, (ii) Agent shall 
have reasonably concluded that there may be a conflict of interest between 
the Corporation and Agent in the conduct of the defense of such action or 
(iii) the Corporation shall not in fact have employed counsel to assume the 
defense of such action, in each of which cases the fees and expenses of 
Agent's separate counsel shall be at the expense of the Corporation.  The 
Corporation shall not be entitled to assume the defense of any action, suit 
or proceeding brought by or on behalf of the Corporation or as to which Agent 
shall have made the conclusion provided for in clause (ii) above; and

          (c)  the Corporation shall not be liable to indemnify Agent under 
this Agreement for any amounts paid in settlement of any action or claim 
effected without the Corporation's written consent, which shall not be 
unreasonably withheld.  The Corporation shall be permitted to settle any 
action except that it shall not settle any action or claim in any manner 
which would impose any penalty or limitation on Agent without Agent's written 
consent, which may be given or withheld in Agent's sole discretion.

     8.   EXPENSES.  The Corporation shall advance, prior to the final 
disposition of any proceeding, promptly following request therefor, all 
expenses incurred by Agent in connection with such proceeding upon receipt of 
an undertaking by or on behalf of Agent to repay said amounts if it shall be 
determined ultimately that Agent is not entitled to be indemnified under the 
provisions of this Agreement, the Bylaws, the Code or otherwise.

     9.   ENFORCEMENT.  Any right to indemnification or advances granted by 
this Agreement to Agent shall be enforceable by or on behalf of Agent in any 
court of competent jurisdiction if (i) the claim for indemnification or 
advances is denied, in whole or in part, or (ii) no disposition of such claim 
is made within ninety (90) days of request therefor.  Agent, in such 
enforcement action, if successful in whole or in part, shall be entitled to 
be paid also the expense of prosecuting Agent's claim.  It shall be a defense 
to any action for which a claim for indemnification is made under Section 3 
hereof (other than an action brought to enforce a claim for expenses pursuant 
to Section 8 hereof, provided that the required undertaking has been tendered 
to the Corporation) that Agent is not entitled to indemnification because of 
the limitations set forth in Section 4 hereof.  Neither the failure of the 
Corporation (including its Board of Directors or its stockholders) to have 
made a determination prior to the commencement of such enforcement action 
that indemnification of Agent is proper in the circumstances, nor an actual 
determination by the Corporation (including its Board of Directors or its 
stockholders) that such indemnification is improper shall be a defense to the 
action or create a presumption that Agent is not entitled to indemnification 
under this Agreement or otherwise.

     10.  SUBROGATION.  In the event of payment under this Agreement, the 
Corporation shall be subrogated to the extent of such payment to all of the 
rights of recovery of Agent, who shall execute all documents required and 
shall do all acts that may be necessary to secure such rights and to enable 
the Corporation effectively to bring suit to enforce such rights. 


                                      4.

<PAGE>

     11.  NON-EXCLUSIVITY OF RIGHTS.  The rights conferred on Agent by this 
Agreement shall not be exclusive of any other right which Agent may have or 
hereafter acquire under any statute, provision of the Corporation's 
Certificate of Incorporation or Bylaws, agreement, vote of stockholders or 
directors, or otherwise, both as to action in Agent's official capacity and 
as to action in another capacity while holding office.

     12.  SURVIVAL OF RIGHTS. 

          (a)  The rights conferred on Agent by this Agreement shall continue 
after Agent has ceased to be a director, officer, employee or other agent of 
the Corporation or to serve at the request of the Corporation as a director, 
officer, employee or other agent of another corporation, partnership, joint 
venture, trust, employee benefit plan or other enterprise and shall inure to 
the benefit of Agent's heirs, executors and administrators.  

          (b)  The Corporation shall require any successor (whether direct or 
indirect, by purchase, merger, consolidation or otherwise) to all or 
substantially all of the business or assets of the Corporation, expressly to 
assume and agree to perform this Agreement in the same manner and to the same 
extent that the Corporation would be required to perform if no such 
succession had taken place.

     13.  SEPARABILITY.  Each of the provisions of this Agreement is a 
separate and distinct agreement and independent of the others, so that if any 
provision hereof shall be held to be invalid for any reason, such invalidity 
or unenforceability shall not affect the validity or enforceability of the 
other provisions hereof. Furthermore, if this Agreement shall be invalidated 
in its entirety on any ground, then the Corporation shall nevertheless 
indemnify Agent to the fullest extent provided by the Bylaws, the Code or any 
other applicable law.

     14.  GOVERNING LAW.  This Agreement shall be interpreted and enforced in 
accordance with the laws of the State of Delaware.

     15.  AMENDMENT AND TERMINATION.  No amendment, modification, termination 
or cancellation of this Agreement shall be effective unless in writing signed 
by both parties hereto.

     16.  IDENTICAL COUNTERPARTS.  This Agreement may be executed in one or 
more counterparts, each of which shall for all purposes be deemed to be an 
original but all of which together shall constitute but one and the same 
Agreement.  Only one such counterpart need be produced to evidence the 
existence of this Agreement.

     17.  HEADINGS.  The headings of the sections of this Agreement are 
inserted for convenience only and shall not be deemed to constitute part of 
this Agreement or to affect the construction hereof.

     18.  NOTICES.  All notices, requests, demands and other communications 
hereunder shall be in writing and shall be deemed to have been duly given (i) 
upon delivery if delivered by hand to the party to whom such communication 
was directed or (ii) upon the third business


                                      5.

<PAGE>

day after the date on which such communication was mailed if mailed by 
certified or registered mail with postage prepaid:  

          (a)  If to Agent, at the address indicated on the signature page 
hereof.

          (b)  If to the Corporation, to

               Arterial Vascular Engineering, Inc.
               5355 Skylane Boulevard
               Santa Rosa, CA  95403

or to such other address as may have been furnished to Agent by the 
Corporation.

     IN WITNESS WHEREOF, the parties hereto have executed this Indemnity 
Agreement on and as of the day and year first above written.

                                   ARTERIAL VASCULAR ENGINEERING, INC.


                                   By:_______________________________________

                                   Title:____________________________________


                                   AGENT


                                   __________________________________________
                                        (Signature)


                                   Print Name and Address of Agent:

                                   [Name]
                                   [Address]


                                      6.