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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 3/23/05  Johnson & Johnson                 S-4/A                  5:168                                    950123

Document/Exhibit                   Description                      Pages   Size 

 1: S-4/A       Amendment No. 1 to Form S-4                         HTML  1,336K 
 2: EX-5.1      Ex-5.1: Opinion of Philip P. Crowley                HTML      9K 
 3: EX-23.1     Ex-23.1: Consent of Pricewaterhousecoopers Llp      HTML      7K 
 4: EX-23.2     Ex-23.2: Consent of Ernst & Young Llp               HTML      6K 
 5: EX-99.1     Ex-99.1: Form of Request for Admittance/Proxy Card  HTML     28K 

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SECURITIES AND EXCHANGE COMMISSION

Amendment No. 1

Johnson & Johnson

One Johnson & Johnson Plaza

James R. Hilton, Esq.

Copies to:

     Approximate date of commencement of proposed sale of the securities to the public: Upon consummation of the merger.

     If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

CALCULATION OF REGISTRATION FEE

(4)	Calculated by multiplying the proposed maximum aggregate offering price for all securities by 0.00011770.
(5)	Previously paid.

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March 23, 2005

Dear Shareholder:

     We cordially invite you to attend a special meeting of Guidant shareholders to be held on April 27, 2005 at 10:00 a.m., local time, at Guidant’s corporate headquarters, 111 Monument Circle, Indianapolis, Indiana 46204-5129. At the special meeting, we will ask you to consider and vote on a proposal to approve the Agreement and Plan of Merger we entered into as of December 15, 2004 with Johnson & Johnson and its wholly owned subsidiary, Shelby Merger Sub, Inc., pursuant to which Shelby Merger Sub will merge with and into Guidant. As a result of the merger, Guidant will become a wholly owned subsidiary of Johnson & Johnson.

     Upon completion of the merger, each share of Guidant common stock you hold will be converted into the right to receive a combination of (i) $30.40 in cash and (ii) shares of Johnson & Johnson common stock. The number of shares of Johnson & Johnson common stock you receive will depend on the volume weighted average trading price of Johnson & Johnson common stock during the 15 trading days ending three trading days prior to the completion of the merger. If the volume weighted average trading price of Johnson & Johnson’s common stock during this period is between $55.45 and $67.09, then you will receive a number of shares of Johnson & Johnson common stock having a value of $45.60 in exchange for each of your shares of Guidant common stock. If the volume weighted average trading price of Johnson & Johnson’s common stock during this period is $55.45 or less, then you will receive 0.8224 shares of Johnson & Johnson stock in exchange for each of your shares of Guidant common stock. If the volume weighted average trading price of Johnson & Johnson’s common stock during this period is $67.09 or more, then you will receive 0.6797 shares of Johnson & Johnson common stock in exchange for each of your shares of Guidant common stock.

     Johnson & Johnson common stock is listed on the New York Stock Exchange under the trading symbol “JNJ” and on March 21, 2005, the latest practicable date before the date of the accompanying proxy statement/ prospectus, its closing price was $66.85 per share.

     The Guidant board of directors has carefully reviewed and considered the terms and conditions of the merger agreement. Based on its review, the Guidant board of directors, with one director absent because of a pre-existing commitment, unanimously determined that the merger is in the best interests of Guidant and its shareholders, adopted the merger agreement and recommends that you vote “FOR” approval of the merger agreement.

     Your vote is very important. We cannot complete the merger unless the merger agreement is approved by the affirmative vote of the holders of a majority of the outstanding shares of Guidant common stock entitled to vote at the special meeting. Only shareholders who owned shares of Guidant common stock at the close of business on March 21, 2005, the record date for the special meeting, will be entitled to vote at the special meeting. Please complete and return the enclosed request for admittance card as soon as possible if you plan to attend the special meeting. If you return the request card, Guidant will send you an admittance card. Whether or not you plan to be present at the special meeting, please complete, sign, date and return the enclosed proxy card or submit your proxy by telephone or on the Internet as soon as possible. If you hold your shares in “street name”, you should instruct your broker how to vote in accordance with your voting instruction form. If you do not submit your proxy, instruct your broker how to vote your shares, or vote in person at the special meeting, it will have the same effect as a vote against approval of the merger agreement. If you hold your shares under Guidant’s employee stock ownership plan you may instruct the plan trustee as to how to vote your shares. If you do not instruct the plan trustee as to how to vote your shares, the plan trustee may vote those shares at its discretion.

     The accompanying proxy statement/prospectus explains the merger and merger agreement and provides specific information concerning the special meeting. Please review this document carefully. You should consider the matters discussed under “Risk Factors Relating to the Merger” on page 12 of the accompanying proxy statement/prospectus before voting.

     On behalf of the Guidant board of directors, I thank you for your support and appreciate your consideration of this matter.

	Sincerely,
	Ronald W. Dollens
	President and Chief Executive Officer

This proxy statement/prospectus is dated March 23, 2005,

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REFERENCES TO ADDITIONAL INFORMATION

      This proxy statement/prospectus incorporates by reference important business and financial information about Johnson & Johnson and Guidant from documents that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this proxy statement/prospectus by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

      If you would like to request documents, please do so by April 12, 2005 in order to receive them before the special meeting.

See “Where You Can Find More Information” on page 89.

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GUIDANT CORPORATION

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To the Shareholders of Guidant Corporation:

      A special meeting of shareholders of Guidant Corporation will be held on April 27, 2005 at 10:00 a.m., local time, at Guidant’s corporate headquarters, 111 Monument Circle, Indianapolis, Indiana 46204-5129, for the following purpose:

To consider and vote upon a proposal to approve the Agreement and Plan of Merger dated as of December 15, 2004, among Johnson & Johnson, Shelby Merger Sub, Inc., a wholly owned subsidiary of Johnson & Johnson, and Guidant, pursuant to which Shelby Merger Sub will merge with and into Guidant with Guidant becoming a wholly owned subsidiary of Johnson & Johnson, and each outstanding share of Guidant common stock will be converted into the right to receive a combination of (i) $30.40 in cash and (ii) a number of shares of Johnson & Johnson common stock based on an exchange ratio that will be calculated based upon the volume weighted average trading price of Johnson & Johnson common stock during a period prior to the completion of the merger.

      We will transact no other business at the special meeting except such business as may properly be brought before the special meeting or any adjournment or postponement of it by the Guidant board of directors.

      Only shareholders who owned shares of Guidant common stock at the close of business on March 21, 2005, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting and any adjournment or postponement of it. If you plan to attend the special meeting, please complete and return the enclosed request for admittance card. Guidant then will mail you an admittance card, directions to the meeting and parking information. A shareholders’ list will be available for inspection by any shareholder entitled to vote at the special meeting beginning no later than five business days before the date of the special meeting and continuing through the special meeting.

      We cannot complete the merger unless the merger agreement is approved by the affirmative vote of the holders of a majority of the outstanding shares of Guidant common stock entitled to vote at the special meeting. Guidant shareholders have no dissenters’ rights under Indiana law in connection with the merger. The proxy statement/prospectus accompanying this notice explains the merger and merger agreement and provides specific information concerning the special meeting. Please review this document carefully.

      The Guidant board of directors believes that the merger and the other transactions contemplated by the merger agreement are in the best interests of Guidant and its shareholders and unanimously, with one director absent because of a pre-existing commitment, adopted the merger agreement and recommends that shareholders vote “FOR” approval of the merger agreement.

      Whether or not you plan to attend the special meeting, please complete, sign and date the enclosed proxy card and return it promptly in the enclosed postage-paid return envelope or submit your proxy by telephone or on the Internet as soon as possible. You may revoke the proxy at any time prior to its exercise in the manner described in the proxy statement/prospectus. Any shareholder of record present at the special meeting, including any adjournment or postponement of it, may revoke his or her proxy and vote personally on the merger agreement. Executed proxies with no instructions indicated thereon will be voted “FOR” approval of the merger agreement.

      Please do not send any stock certificates at this time.

	By order of the board of directors,

	Bernard E. Kury
	Vice President, General Counsel and Secretary

Indianapolis, Indiana

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RISK FACTORS RELATING TO THE MERGER

      In addition to the other information included and incorporated by reference in this proxy statement/prospectus, Guidant shareholders should consider carefully the matters described below in determining whether to approve the merger agreement.

      Holders of Guidant common stock may receive Johnson & Johnson common stock with an initial value of less than $45.60 as the stock portion of the merger consideration. Each share of Guidant common stock will be converted into the right to receive a combination of (i) $30.40 in cash and (ii) a number of shares of Johnson & Johnson common stock with a value, based upon the volume weighted average trading price of Johnson & Johnson common stock for the 15 trading days ending three trading days prior to the closing, of $45.60, so long as the volume weighted average trading price per share of Johnson & Johnson’s common stock during this period is within the range of $55.45 to $67.09. If the volume weighted average trading price of Johnson & Johnson common stock used to calculate the exchange ratio is less than $55.45, the exchange ratio will be fixed at 0.8224. If this occurs, and the price of Johnson & Johnson common stock at the completion of the merger is less than $55.45, the initial value of the Johnson & Johnson common stock to be received by holders of Guidant common stock will be less than $45.60.

      In addition, the price of Johnson & Johnson common stock at the completion of the merger could be lower than the volume weighted average trading price used to determine the exchange ratio. Therefore, even if the volume weighted average trading price used to determine the exchange ratio is greater than $55.45, holders of Guidant common stock could also receive Johnson & Johnson common stock with an initial value of less than $45.60.

      The prices of Johnson & Johnson common stock and Guidant common stock at the closing of the merger may vary from their respective prices on the date of this proxy statement/prospectus and on the date of the special meeting. These prices may vary as a result of changes in the business, operations or prospects of Johnson & Johnson or Guidant, market assessments of the likelihood that the merger will be completed, the timing of the completion of the merger, the prospects of post-merger operations, regulatory considerations, general market and economic conditions and other factors.

      The exchange ratio could be significantly different from what it would be if determined before the special meeting. Because the exchange ratio will not be determined until the third trading day before completion of the merger, you must decide whether or not to approve the merger agreement before knowing the actual exchange ratio. Changes in the price of Johnson & Johnson common stock prior to the completion of the merger may cause the actual exchange ratio to differ significantly from the exchange ratio that would have existed if it had been calculated as of the date of the special meeting.

      The integration of Johnson & Johnson and Guidant following the merger may present significant challenges. Johnson & Johnson and Guidant may face significant challenges in combining their operations and product lines in a timely and efficient manner and retaining key Guidant personnel. The integration will be complex and time-consuming. The failure to integrate successfully Johnson & Johnson and Guidant and to manage successfully the challenges presented by the integration process may result in Johnson & Johnson not achieving the anticipated potential benefits of the merger.

      The price of Johnson & Johnson common stock may be affected by factors different from those affecting the price of Guidant common stock. Upon completion of the merger, holders of Guidant common stock will become holders of Johnson & Johnson common stock. Johnson & Johnson’s business is different from that of Guidant, and Johnson & Johnson’s results of operations, as well as the price of Johnson & Johnson common stock, may be affected by factors different than those affecting Guidant’s results of operations and price of Guidant common stock. For a discussion of Johnson & Johnson’s and Guidant’s businesses and certain factors to consider in connection with such businesses, see Johnson & Johnson’s Annual Report on Form 10-K for the fiscal year ended January 2, 2005, and Guidant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, each of which is incorporated by reference in this proxy statement/prospectus.

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      We will incur transaction, integration and restructuring costs in connection with the merger. Johnson & Johnson and Guidant expect to incur costs associated with transaction fees and other costs related to the merger. Specifically, we expect to incur approximately $135 million for transaction costs related to the merger, which costs are expected to be recorded as a component of the purchase price. In addition, we will incur integration and restructuring costs following the completion of the merger as we integrate the businesses of Guidant with those of Johnson & Johnson. Although Johnson & Johnson and Guidant expect that the realization of efficiencies related to the integration of the businesses may offset incremental transaction, merger-related and restructuring costs over time, we cannot give any assurance that this net benefit will be achieved in the near term, or at all.

      Obtaining required approvals and satisfying closing conditions may delay or prevent completion of the merger. Completion of the merger is conditioned upon the receipt of all material governmental authorizations, consents, orders and approvals, including the expiration or termination of the applicable waiting periods, and any extension of the waiting periods, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval by the European Commission under EC merger regulations. Johnson & Johnson and Guidant intend to pursue all required approvals in accordance with the merger agreement. These consents, orders and approvals may impose conditions on or require divestitures relating to the divisions, operations or assets of Johnson & Johnson or Guidant. Such conditions or divestitures may jeopardize or delay completion of the merger or may reduce the anticipated benefits of the merger. Further, no assurance can be given that the required consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all such consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of the approvals or that they will satisfy the terms of the merger agreement. See “The Merger Agreement — Conditions for the Completion of the Merger” for a discussion of the conditions to the completion of the merger and “The Merger — Regulatory Matters” for a description of the regulatory approvals necessary in connection with the merger.

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THE SPECIAL MEETING

      We are furnishing this proxy statement/prospectus to Guidant shareholders as of the record date as part of the solicitation of proxies by the Guidant board of directors for use at the special meeting.

Date, Time and Place

      The Guidant special meeting will be held on April 27, 2005 at 10:00 a.m., local time, at Guidant’s corporate headquarters, 111 Monument Circle, Indianapolis, Indiana 46204-5129. Please complete and return the enclosed request for admittance card as soon as possible if you plan to attend the special meeting. If you return the request card, Guidant will send you an admittance card.

Purpose of the Special Meeting

      At the special meeting, Guidant shareholders will be asked to consider and vote upon a proposal to approve the merger agreement, pursuant to which Shelby Merger Sub will merge with and into Guidant, with Guidant becoming a wholly owned subsidiary of Johnson & Johnson, and each outstanding share of Guidant common stock will be converted into the right to receive a combination of (i) $30.40 in cash and (ii) a number of shares of Johnson & Johnson common stock based on an exchange ratio that will be calculated based upon the volume weighted average trading price of Johnson & Johnson common stock during a period prior to the completion of the merger. It is currently contemplated that no other matters will be considered at the special meeting.

      The Guidant board of directors, with one director absent because of a pre-existing commitment, unanimously determined that the merger is in the best interests of Guidant and its shareholders, adopted the merger agreement and recommends that you vote “FOR” approval of the merger agreement.

Record Date; Shares Entitled to Vote; Quorum

      Only holders of record of Guidant common stock at the close of business on March 21, 2005, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting and any adjournment or postponement of it. On the record date, 323,924,594 shares of Guidant common stock were issued and outstanding and held by approximately 4,980 holders of record.

      A quorum is present at the special meeting if a majority of all the shares of Guidant common stock issued and outstanding on the record date and entitled to vote at the special meeting are represented at the special meeting in person or by a properly executed proxy. Abstentions and broker non-votes (described below) will be treated as present at the special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. In the event that a quorum is not present at the special meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies. Holders of record of Guidant common stock on the record date are entitled to one vote per share on each matter submitted to a vote at the special meeting.

Vote Required

      The approval of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Guidant common stock entitled to vote on the record date. Because the required vote of Guidant shareholders is based upon the number of outstanding shares of Guidant common stock entitled to vote, rather than upon the shares actually voted, the failure by the holder of any such shares to submit a proxy or to vote in person at the special meeting, including abstentions and broker non-votes, will have the same effect as a vote against approval of the merger agreement.

Shares Owned by Guidant Directors and Executive Officers

      At the close of business on the record date, directors and executive officers of Guidant beneficially owned and were entitled to vote 2,042,844 shares of Guidant common stock, which represented approximately 0.6% of the shares of Guidant common stock outstanding on that date.

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Voting of Proxies

      Shareholders of record may vote their shares by attending the special meeting and voting their shares in person at the meeting, or by completing the enclosed proxy card, signing and dating it and mailing it in the enclosed postage pre-paid envelope. Shareholders also may submit their proxy by telephone or on the Internet by following the instructions provided in the enclosed proxy card. If a proxy card is signed by a shareholder of record and returned without specific voting instructions, the shares represented by the proxy will be voted “FOR” the proposal presented at the special meeting.

      Shareholders whose shares are held in “street name” must either instruct the record holder of their shares how to vote their shares or obtain a proxy from the record holder to vote at the special meeting. Please check the voting form used by your bank, broker, nominee, fiduciary or other custodian for information on how to submit your instructions to them.

      Shareholders whose shares are held under Guidant’s employee stock ownership plan may instruct the plan trustee as to how to vote their shares. If a shareholder does not instruct the plan trustee as to how to vote his or her shares, the plan trustee may vote those shares at its discretion. Please consult the voting form used by the plan trustee for information on how to submit your instructions to the plan trustee.

      The persons named as proxies by a shareholder may propose and vote for one or more adjournments of the special meeting, including adjournments to permit further solicitations of proxies. Any adjournment may be made at any time by shareholders representing a majority of the votes present in person or by proxy at the special meeting, whether or not a quorum exists, without further notice other than by an announcement made at the meeting. Guidant does not currently intend to seek an adjournment of its special meeting. No proxy voted against the proposal to approve the merger agreement will be voted in favor of any such adjournment or postponement.

      Guidant does not expect that any matter other than the proposal to approve the merger agreement will be brought before the special meeting. If, however, other matters are properly brought before the special meeting, or any adjourned meeting, the persons named as proxies will vote in accordance with their judgment.

Revocability of Proxies

      Shareholders of record may revoke their proxy at any time prior to the time it is voted at the meeting. Shareholders of record may revoke their proxy by:

	•	executing a later-dated proxy card relating to the same shares and delivering it to Guidant’s Secretary by Internet, telephone or mail before the taking of the vote at the special meeting
	•	filing with Guidant’s Secretary before the taking of the vote at the special meeting a written notice of revocation bearing a later date than the proxy card or
	•	attending the special meeting and voting in person (although attendance at the special meeting will not, in and of itself, revoke a proxy).

      Any written revocation or subsequent proxy card should be delivered to Guidant Corporation, 111 Monument Circle, 29th Floor, Indianapolis, Indiana 46204-5129, Attention: Secretary, or hand delivered to Guidant’s Secretary or his representative before the taking of the vote at the special meeting.

Solicitation of Proxies

      Guidant is soliciting proxies for the special meeting and will bear all expenses in connection with solicitation of proxies, except those expenses incurred in connection with the printing and mailing of this proxy statement/prospectus will be shared equally by Guidant and Johnson & Johnson. Upon request, Guidant will pay banks, brokers, nominees, fiduciaries or other custodians their reasonable expenses for sending proxy material to, and obtaining instructions from, persons for whom they hold shares.

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      Guidant has retained Georgeson Shareholder Communications, Inc. to assist with the solicitation of proxies. Georgeson will receive customary fees as compensation for its services plus reimbursement for its related out-of-pocket expenses.

      Guidant expects to solicit proxies primarily by mail, but directors, officers and other employees of Guidant or Georgeson may also solicit in person or by Internet, telephone or mail.

      Guidant shareholders who receive more than one proxy card or voting instruction form have shares registered in different forms or in more than one account. Please complete, sign, date and return all proxy cards and provide instructions for all voting instruction forms received to ensure that all shares are voted.

      Shareholders should not send stock certificates with their proxies. A transmittal form with instructions for the surrender of Guidant common stock certificates will be mailed to Guidant shareholders shortly after completion of the merger.

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THE COMPANIES

Johnson & Johnson

      Johnson & Johnson, with approximately 109,900 employees, is engaged in the manufacture and sale of a broad range of products in the health care field. Johnson & Johnson has more than 200 operating companies in 57 countries, selling products throughout the world.

      Johnson & Johnson’s worldwide business is divided into three segments: consumer, pharmaceutical and medical devices and diagnostics. The consumer segment’s principal products are personal care and hygienic products, including oral and baby care products, first aid products, nonprescription drugs, sanitary protection products and adult skin and hair care products. These products are marketed principally to the general public and distributed both to wholesalers and directly to independent and chain retail outlets.

      The pharmaceutical segment’s principal worldwide franchises are in the anti-infective, anti-fungal, anti-anemia, central nervous system, contraceptive, dermatology, gastrointestinal and pain management fields. These products are distributed both directly and through wholesalers for use by health care professionals and the general public.

      The medical devices and diagnostics segment includes suture and mechanical wound closure products, minimally invasive surgical instruments, diagnostic products, cardiology products, disposable contact lenses, surgical instruments, orthopedic joint replacements and products for wound management and infection prevention and other medical equipment and devices. These products are used principally in the professional fields by physicians, nurses, therapists, hospitals, diagnostic laboratories and clinics. Distribution to these markets is done both directly and through surgical supply and other dealers.

      Johnson & Johnson was organized in the State of New Jersey in 1887. The address of its principal executive offices is One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, and the telephone number at that address is (732) 524-0400.

Guidant

      Guidant is a multinational company that designs, develops, manufactures and markets innovative, high quality, therapeutic medical devices for use in treating cardiac and vascular disease. Approximately 12,000 employees develop, manufacture and market Guidant’s medical devices in nearly 100 countries, with key operations in the United States, Europe and Asia.

      Guidant products that focus on the treatment of coronary arrhythmias, heart failure and coronary and peripheral disease include:

	•	implantable defibrillator systems used to detect and treat abnormally fast heart rhythms (tachycardia) that could result in sudden cardiac death, including implantable cardiac resynchronization therapy defibrillator systems used to treat heart failure
	•	implantable pacemaker systems used to manage slow or irregular heart rhythms (bradycardia), including implantable cardiac resynchronization therapy pacemaker systems used to treat heart failure
	•	coronary stent systems for the treatment of coronary artery disease
	•	angioplasty systems including dilatation catheters and related accessories for the treatment of coronary artery disease
	•	cardiac surgery systems and
	•	peripheral systems, including those to treat biliary, peripheral vascular and carotid disease.

      Guidant was incorporated in Indiana in September 1994 to be the parent of several of the medical device and diagnostics businesses of Eli Lilly and Company. In December 1994, Guidant consummated an initial public offering of a portion of its outstanding common shares. In September 1995, Eli Lilly and

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Significant Contracts Between Guidant and Johnson & Johnson

      Cordis Corporation, a Johnson & Johnson subsidiary, and Guidant entered into several commercial arrangements in April 2000, several of which have been subsequently amended, pursuant to which (1) Cordis agreed to distribute Guidant’s Rapid-Exchange catheters and stent delivery systems and (2) the parties settled outstanding litigation under certain patents by agreeing, among other things, to cross-license certain patents related to stents, stent delivery systems and other cardiovascular applications and to arbitrate certain remaining patent disputes. In February 2004, Cordis and Guidant also entered into a strategic agreement to co-promote Cordis’ CYPHER^TM Sirolimus-eluting Coronary Stent. Guidant also received an option to pursue a similar arrangement in Japan in the future. In addition, Guidant agreed to assist Cordis in the development of a CYPHER stent that utilizes Guidant’s MULTI-LINK VISION® Stent Delivery System.

      In addition, in August 2003 an arbitration panel found that Guidant’s Multi-Link Duet Coronary Stent System infringed a patent of Cordis. As a result of this finding, Guidant made a one-time payment, pursuant to the April 2000 commercial arrangements, of $425 million to Cordis in the third quarter of 2003.

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THE MERGER

Background to the Merger

      Cordis, a Johnson & Johnson subsidiary, and Guidant are currently involved in a number of commercial arrangements, which are described under the caption “The Companies — Significant Contracts Between Guidant and Johnson & Johnson”. In the course of this relationship, Johnson & Johnson and Guidant have had discussions regarding other possible business collaborations. During the spring of 2004, Michael J. Dormer, Worldwide Chairman, Medical Devices of Johnson & Johnson, and Ronald W. Dollens, Chief Executive Officer of Guidant, had discussions about potentially expanding the relationship between the two companies.

      On July 19, 2004, at a meeting of the board of directors of Johnson & Johnson, Mr. Dormer, Dr. Guy J. LeBeau, Company Group Chairman, and Dominic J. Caruso, Vice-President of Group Finance — Medical Devices and Diagnostics, made a presentation regarding a potential acquisition of Guidant and the perceived benefits of such a transaction to the shareholders of Johnson & Johnson. At that meeting, the board of directors of Johnson & Johnson authorized the initiation of discussions with Guidant regarding a potential acquisition by Johnson & Johnson.

      On July 21, 2004, at a meeting of the board of directors of Guidant, the board discussed Guidant’s long-term strategic alternatives, including a potential acquisition transaction with Johnson & Johnson. Following this discussion, the board of directors of Guidant authorized Mr. Dollens to have exploratory discussions with Johnson & Johnson regarding a possible business combination.

      On July 22, 2004, Messrs. Dormer and Caruso and Robert J. Darretta, Johnson & Johnson’s Vice Chairman and Chief Financial Officer, met with Mr. Dollens, Keith E. Brauer, Guidant’s Chief Financial Officer, and Bernard E. Kury, Guidant’s General Counsel, to explore the possible acquisition of Guidant by Johnson & Johnson. The meeting included a general discussion of the perceived benefits of such a transaction to both companies and their respective employees, as well as to patients and healthcare providers.

      On August 4, 2004, Johnson & Johnson and Guidant executed a confidentiality agreement.

      On August 6, 2004, Messrs. Dormer, Caruso and Darretta and James R. Hilton, Associate General Counsel of Johnson & Johnson, met with representatives of Guidant, including Messrs. Dollens, Brauer and Kury and A. Jay Graf, former Guidant Group Chairman, to discuss and review information regarding Guidant’s business.

      On August 17, 2004, at a meeting of the board of directors of Guidant, Mr. Dollens reported on his meetings with Johnson & Johnson’s representatives. At this meeting, representatives of JPMorgan, Guidant’s financial advisor, made a presentation regarding Johnson & Johnson’s business and the potential financial implications of a combination between the two companies. At this meeting, the board of directors authorized continued discussions with Johnson & Johnson.

      On August 19, 2004, Messrs. Darretta, Dormer, Caruso and Hilton of Johnson & Johnson met with Messrs. Dollens, Brauer, Kury and Graf of Guidant, along with representatives of JPMorgan, to discuss various issues relating to the potential acquisition. During the latter part of August 2004 and the early part of September 2004, discussions between representatives of Johnson & Johnson and Guidant continued regarding issues relating to the proposed transaction.

      On September 8, 2004, Mr. Dormer of Johnson & Johnson telephoned Mr. Dollens of Guidant to discuss a number of issues, including the consideration to be paid to Guidant shareholders in the proposed transaction.

      On September 13, 2004, at a meeting of the board of directors of Johnson & Johnson, Mr. Dormer provided an update on the status of the discussions between the two companies. After this update, the board of directors authorized management to continue discussions with respect to the proposed transaction.

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      On September 17, 2004, Messrs. Darretta, Dormer and Caruso and Nicholas J. Valeriani, Johnson & Johnson’s Vice President of Human Resources and Worldwide Chairman, Diagnostics, and other representatives of Johnson & Johnson, met with executive officers and other representatives of Guidant to conduct further due diligence on various aspects of Guidant’s operations and to discuss various business and organizational issues relating to the proposed transaction.

      Following this meeting, on September 24, 2004, Messrs. Dormer, Caruso and Valeriani of Johnson & Johnson met with Mr. Dollens and Roger Marchetti, Guidant’s Vice President of Human Resources, to discuss the Guidant organizational structure and employee matters in relation to the proposed transaction.

      On September 30, 2004, Messrs. Dormer, Caruso and Hilton and other representatives of Johnson & Johnson met with Messrs. Dollens and Kury and other representatives of Guidant to further discuss some of the terms and conditions of a potential merger agreement.

      On October 4, 2004, a draft merger agreement was circulated to senior management and advisors of each company. On October 8, October 9 and October 10, 2004, Mr. Kury, other representatives of Guidant and Guidant’s outside legal advisors met with Mr. Hilton, other representatives of Johnson & Johnson and Johnson & Johnson’s outside legal advisors to negotiate certain terms of the proposed transaction. These negotiations continued through October 27, 2004.

      On October 6, 2004, in connection with Johnson & Johnson’s due diligence review of Guidant, representatives of Guidant made a presentation to representatives of Johnson & Johnson and Goldman Sachs & Co., financial advisor to Johnson & Johnson, regarding the business and financial condition of Guidant.

      On October 11, 2004, Guidant formally engaged Morgan Stanley to serve as financial advisor to the company in addition to the previously engaged JPMorgan.

      On October 18, 2004, at a meeting of the Guidant board of directors, Mr. Dollens updated the board on the status of the discussions with Johnson & Johnson. Representatives of JPMorgan and Guidant’s outside legal advisors provided the board with analyses of the financial and legal matters that continued to be under negotiation with Johnson & Johnson. Representatives of Morgan Stanley were also in attendance. After discussion, the board of directors of Guidant authorized Guidant’s management and advisors to continue negotiations.

      On October 22, 2004, at a meeting of the board of directors of Johnson & Johnson, Mr. Dormer reported on the discussions that had occurred with representatives of Guidant. This review included an update on the diligence effort with respect to Guidant’s business as well as financial aspects of the proposed transaction. At this meeting, Russell C. Deyo, Johnson & Johnson’s General Counsel, along with senior members of the Johnson & Johnson Law Department, discussed general legal matters concerning the potential transaction. In addition, representatives of Goldman Sachs provided a perspective on the proposed transaction.

      On October 26, 2004, Messrs. Darretta and Dormer met with Mr. Dollens to continue negotiations, including with respect to the consideration to be paid to Guidant shareholders in the proposed transaction and the exchange ratio for the stock portion of the merger consideration.

      On October 27, 2004, the board of directors of Guidant met to review the status of the discussions with Johnson & Johnson and the merits of Johnson & Johnson’s then-current proposal as compared to remaining a stand-alone entity. At this meeting, JPMorgan and Morgan Stanley each separately discussed financial aspects of Johnson & Johnson’s proposal, valuation issues regarding Guidant and other alternatives available to Guidant as a stand-alone entity. Guidant’s outside legal advisors reviewed in detail the regulatory approvals that would be required to complete the proposed transaction. Following extensive discussion, the board of directors determined to pursue other alternatives as a stand-alone entity rather than Johnson & Johnson’s then-current proposal. On October 28, 2004, James M. Cornelius, Chairman of the Board of Guidant, telephoned William C. Weldon, Chairman of the Board and Chief Executive Officer of Johnson & Johnson, to inform him of the board’s decision.

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      During the week of November 8, 2004, Messrs. Dollens and Dormer had a series of telephone conversions regarding the value of resuming discussions and arranged a meeting between Messrs. Weldon, Dormer and Darretta of Johnson & Johnson and Messrs. Cornelius and Dollens to be held on November 16, 2004 to discuss whether further conversations between the two companies would be productive.

      On November 17, 2004, at a special meeting of the board of directors of Guidant, Messrs. Dollens and Cornelius reported on the November 16 meeting with Messrs. Weldon, Dormer and Darretta. Following discussion and a review of various strategic alternatives, the board decided to resume discussions with Johnson & Johnson.

      Following the Guidant board meeting, Mr. Cornelius telephoned Mr. Weldon to continue to explore the prospect of further discussions between the two companies. On November 19, 2004 and November 24, 2004, Messrs. Weldon, Darretta, Dormer, Deyo and Hilton of Johnson & Johnson, as well as Johnson & Johnson’s outside legal advisors, met with Messrs. Cornelius, Dollens and Kury of Guidant, as well as Guidant’s outside legal advisors, to continue negotiations with respect to the proposed transaction.

      Over the course of the next several weeks, the parties and their respective advisors conducted further negotiations over the terms and conditions of a merger agreement for the proposed transaction. These negotiations focused on the representations, warranties, covenants and closing conditions to be included in the merger agreement, as well as the obligations of the parties to obtain regulatory approvals for the acquisition and the limitations to be included in the agreement on Guidant’s ability to contact or engage in discussions with potential acquirors. The negotiations also addressed the circumstances under which the parties could terminate the merger agreement and the circumstances under which termination fees would be payable under the merger agreement, and the amount of these fees.

      On November 30, 2004, Messrs. Dormer and Valeriani of Johnson & Johnson met with certain executive officers of Guidant to discuss various organizational issues regarding the proposed transaction, including a proposal whereby such executives would agree to modify the terms of their change in control agreements in connection with the proposed transaction. These conversations continued on December 8, 2004.

      On December 2, 2004, at a meeting of the board of directors of Johnson & Johnson, Messrs. Dormer and Darretta provided an update on the status of the negotiations regarding the proposed transaction and the due diligence investigation with respect to Guidant. Johnson & Johnson’s legal advisors described the principal terms that had been negotiated in the draft merger agreement as well as the board’s fiduciary duties, both generally and in the specific context of the proposed transaction. Johnson & Johnson’s financial advisor provided an update on its perspective on the proposed transaction. After discussion, the board of directors directed its management and advisors to continue negotiations with Guidant.

      During late November and early December 2004, representatives of Johnson & Johnson continued their due diligence investigation of Guidant. Representatives and advisors of Guidant also continued their due diligence review of Johnson & Johnson and, on December 7, 2004, Messrs. Brauer and Kury and other representatives of Guidant, together with representatives from Guidant’s financial advisors met with representatives of Johnson & Johnson, including Messrs. Darretta and Deyo, to discuss and review various business and financial information of Johnson & Johnson.

      On December 9, 2004, Mr. Weldon of Johnson & Johnson telephoned Mr. Cornelius of Guidant to discuss the consideration to be paid to Guidant shareholders in the merger, including the exchange ratio for the stock portion of the merger consideration. No agreement was reached on these matters during this discussion.

      On December 12, 2004, the board of directors of Johnson & Johnson met to discuss the proposed transaction. At this meeting, which was also attended by Johnson & Johnson’s legal and financial advisors, Messrs. Dormer and Darretta gave a presentation regarding the expected terms of the proposed transaction. At this meeting, Goldman Sachs reviewed various financial analyses with respect to the proposed transaction using various methodologies and assumptions. After discussion, the board of directors

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      On December 12, 2004, after the meeting of the Johnson & Johnson board of directors, the parties scheduled a meeting among Messrs. Cornelius, Dollens, Weldon, Darretta and Dormer to attempt to agree upon the principal terms of the proposed transaction.

      On December 13, 2004, Messrs. Weldon, Darretta and Dormer met with Messrs. Cornelius and Dollens to continue negotiations. Negotiations between the management and advisors of Johnson & Johnson and Guidant continued through December 15, 2004.

      On December 15, 2004, the finance committee of the Johnson & Johnson board of directors discussed the final terms of the merger agreement and authorized the execution and delivery of the merger agreement.

      On December 15, 2004, the board of directors of Guidant met to consider the proposed merger agreement. Guidant’s outside legal advisors reviewed in detail the principal terms of the agreement as well as the board’s fiduciary duties, both generally and in the specific context of the proposed transaction. Each of JPMorgan and Morgan Stanley separately presented its financial analyses of the merger consideration and each delivered its oral opinion, subsequently confirmed in writing, to the effect that, as of December 15, 2004 and based upon and subject to the matters described in its respective opinion, the merger consideration was fair from a financial point of view to the Guidant shareholders. Following extended discussion, the Guidant board approved the proposed merger agreement as being in the best interests of Guidant and its shareholders and authorized the execution and delivery of the merger agreement.

      Following the meeting of the Guidant board of directors, representatives of Guidant and Johnson & Johnson and their advisors finalized the documentation for the transaction. After the closing of trading on the New York Stock Exchange on December 15, 2004, the merger agreement was executed and the parties issued a joint press release announcing their agreement.

Reasons for the Merger and Recommendation of the Guidant Board of Directors

      At a special meeting held on December 15, 2004, with one director absent because of a pre-existing commitment, the Guidant board of directors unanimously determined that the merger is in the best interests of Guidant and its shareholders, adopted the merger agreement and recommended that Guidant shareholders vote “FOR” approval of the merger agreement.

      In reaching its decision to adopt the merger agreement and recommend that Guidant shareholders vote to approve the merger agreement, the Guidant board of directors considered a number of factors, including the following:

	•	Market Price. The Guidant board of directors considered the value of the merger consideration to be received by Guidant shareholders in the merger, including the fact that, if the volume weighted average trading price of Johnson & Johnson’s common stock during the 15 trading days ending three trading days prior to the completion of the merger is between $55.45 and $67.09, Guidant shareholders will receive, for each share of Guidant common stock that they own, merger consideration with a value of $76.00. This merger consideration would consist of $30.40 in cash and $45.60 in Johnson & Johnson common stock, which would provide a premium of approximately 24.7% to Guidant shareholders based on the average trading price of Guidant common stock during the six months prior to the trading day immediately before the day on which the merger was announced. The Guidant board of directors also considered the fact that, because the exchange ratio for the stock portion of the merger consideration becomes fixed outside this range, the value of the merger consideration to be received by Guidant shareholders will be less than $76.00 to the extent that the volume weighted average trading price of Johnson & Johnson’s common stock during the 15 trading days ending three trading days prior to the completion of the merger falls

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		below $55.45 and will be more than $76.00 to the extent that the volume weighted average trading price of Johnson & Johnson’s common stock during such period rises above $67.09.
	•	Form of Merger Consideration. The Guidant board of directors considered that the stock portion of the merger consideration will permit Guidant shareholders to exchange their shares of Guidant common stock for shares of Johnson & Johnson common stock and retain an equity interest in the combined enterprise and the related opportunity to share in its future growth. The Guidant board of directors also reviewed the current and historical results of operations and the trading prices and daily volumes for Johnson & Johnson common stock and considered the liquidity that holding shares of Johnson & Johnson common stock would provide to Guidant shareholders who do not wish to continue to hold shares of Johnson & Johnson common stock following the merger.
	•	Business, Condition and Prospects. The Guidant board of directors considered information with respect to Guidant’s financial condition, results of operations, business, competitive position and business strategy, on both a historical and prospective basis, as well as current industry, economic, government regulatory and market conditions and trends. The Guidant board of directors also reviewed Guidant’s future prospects if it were to remain independent, including the risks inherent in remaining independent. Further, the Guidant board of directors explored possible alternatives to the merger (including the possibility of continuing to operate as an independent entity), the range of possible benefits to Guidant shareholders from these alternatives and the possible timing and likelihood of accomplishing these alternatives.
	•	Strategic Advantages. The Guidant board of directors considered reports from Guidant management and advisors as to the results of their review of Johnson & Johnson’s business. The Guidant board of directors also considered the existing relationships between Guidant and Johnson & Johnson, its assessment of the complementary strengths of each of the companies, the compatibility of the corporate structures and the historical success of Johnson & Johnson in incorporating acquired companies into a decentralized corporate organization. The Guidant board of directors also reviewed information with respect to the prospects of the combined enterprise, including the potential for the combined enterprise to have a stronger competitive position and greater opportunities for growth than Guidant would have operating independently due to:

	•	the ability to combine Johnson & Johnson’s expertise in drug coating technology and the manufacturing of drug-eluting stents with Guidant’s expertise in stent design and stent delivery systems
	•	Guidant gaining access to Johnson & Johnson’s strengths in developing long-term product pipelines, improving clinical outcomes, integrating technologies, securing regulatory approvals and supporting the adoption of new therapies
	•	Johnson & Johnson gaining access to Guidant’s strengths in improving devices brought to market, supplying products to customers and sales and marketing and
	•	the potential to apply Guidant’s technology platforms (such as implantable micro-electronic devices and site-specific therapies) to current and future Johnson & Johnson products.

	•	Ability to Accept Superior Proposal Upon Payment of Termination Fee. The Guidant board of directors considered Guidant’s ability to terminate the merger agreement prior to shareholder approval of the merger agreement in order to enter into an alternative transaction in response to a superior proposal, although Guidant’s ability to enter into an alternative transaction is restricted in that it may not solicit competing offers and would be required to pay a $750 million termination fee in connection with accepting a superior proposal.
	•	Regulatory Matters. The Guidant board of directors considered the required regulatory approvals for the merger, the prospects and anticipated timing of obtaining such approvals and the amount of regulatory risk relating to the merger that Johnson & Johnson has agreed to assume, including its agreement that, if the merger is not completed solely for antitrust reasons, Johnson & Johnson will:

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		(1) pay a termination fee to Guidant of $700 million and (2) provide Guidant with an option to (i) take a license under certain patents owned by Johnson & Johnson relating to drugs and polymers for use in stents and (ii) arbitrate any issues of validity and infringement relating to such patents under claims Johnson & Johnson may bring against Guidant, in which case Johnson & Johnson’s sole remedy against Guidant for any finding of infringement would be a predetermined royalty.
	•	Tax Treatment. The Guidant board of directors considered the expected tax treatment of the merger to Guidant shareholders, including the fact that the merger is not structured as a reorganization for United States federal income tax purposes that generally would allow Guidant shareholders to not recognize any gain from the receipt of the stock portion of the merger consideration.
	•	Potential Risks. The Guidant board of directors considered a number of potential risks, as well as related mitigating factors, in connection with its evaluation of the merger. These risks include the potential diversion of management resources from operational matters and the opportunity costs associated with the merger prior to the completion or abandonment of the merger. Other risks considered by the Guidant board of directors included:

	•	the possibility that the merger might not be completed as a result of the failure to receive regulatory approvals or satisfy other closing conditions, which could result in significant distractions of Guidant’s employees and increased expenses from an unsuccessful attempt to complete the merger
	•	under the terms of the merger agreement, prior to the completion or abandonment of the merger Guidant will be required to conduct its business only in the ordinary course consistent with past practice and subject to operational restrictions and
	•	Guidant would be required to pay a $750 million termination fee if the merger agreement is terminated under specified circumstances and Guidant later agrees to or consummates a takeover proposal.

	In the judgment of Guidant’s board of directors, however, these potential risks were more than offset by the potential benefits of the merger discussed above.

	•	Opinions of Financial Advisors. The Guidant board of directors considered the presentations delivered by JPMorgan and Morgan Stanley and the written opinions of JPMorgan and Morgan Stanley to the Guidant board of directors to the effect that, as of the date of the opinions and based on and subject to the matters set forth in the respective opinions, the merger consideration was fair, from a financial point of view, to Guidant shareholders. A copy of JPMorgan’s written opinion is attached as Annex 2 to this proxy statement/prospectus and a copy of Morgan Stanley’s written opinion is attached as Annex 3 to this proxy statement/prospectus.
	•	Additional Considerations. In the course of its deliberations on the merger, the Guidant board of directors consulted with members of Guidant’s management and Guidant’s legal, financial, accounting and tax advisors on various legal, business and financial matters. Additional factors considered by the Guidant board of directors in determining whether to adopt the merger agreement and recommend that Guidant shareholders vote to approve the merger agreement included:

	•	the terms and conditions of the merger agreement
	•	the fact that stock options and restricted stock granted to Guidant employees are subject to accelerated vesting or lapsing of restrictions upon a change in control of Guidant (as defined in the plans and agreements under which such grants were made) and would therefore become immediately exercisable or unrestricted, as applicable, upon approval of the merger by Guidant shareholders regardless of whether the merger is consummated

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	•	the existence of severance benefits under Guidant severance plans for those employees whose employment may terminate under certain circumstances following the execution of the merger agreement
	•	the fact that Guidant shareholders will have an opportunity to vote on the merger and
	•	the uncertainty that any alternative transaction would yield a superior value to Guidant’s shareholders.

      The above discussion is not intended to be exhaustive, but Guidant believes it addresses the material information and factors considered by the Guidant board of directors in its consideration of the merger, including factors that may support the merger as well as factors that may weigh against it. In view of the variety of factors and the amount of information considered, the Guidant board of directors did not find it practicable to, and did not make specific assessments of, quantify or otherwise assign relative weights to, the specific factors considered in reaching its determination. In addition, the Guidant board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination, and individual members of Guidant’s board of directors may have given different weights to different factors.

      In considering the recommendation of the Guidant board of directors to approve the merger agreement, Guidant shareholders should be aware that certain executive officers and directors of Guidant have certain interests in the merger that may be different from, or in addition to, the interests of Guidant shareholders generally. The Guidant board of directors was aware of these interests and considered them when adopting the merger agreement and recommending that Guidant shareholders vote to approve the merger agreement. See “— Interests of Guidant Directors and Executive Officers in the Merger”.

Opinions of J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated

      Pursuant to an engagement letter dated August 18, 2004, Guidant retained JPMorgan as a financial advisor in connection with the merger. At the meeting of Guidant’s board of directors on December 15, 2004, JPMorgan rendered its oral opinion, subsequently confirmed in writing, to the board of directors that, based upon and subject to the matters set forth in JPMorgan’s opinion, as of that date, the consideration to be received by the holders of Guidant common stock in the merger was fair, from a financial point of view, to those holders. No limitations were imposed by the Guidant board of directors upon JPMorgan with respect to the investigations made or procedures followed by it in rendering its opinions, except that JPMorgan was not authorized to, and did not, solicit any expressions of interest from any other parties with respect to the sale of all or any part of Guidant or any other alternative transaction.

      The full text of the written opinion of JPMorgan, dated December 15, 2004, which sets forth the assumptions made, matters considered and limits on the review undertaken by JPMorgan in rendering its opinion, is attached as Annex 2 to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus. Guidant shareholders are urged to read the opinion carefully in its entirety. JPMorgan’s written opinion is addressed to the Guidant board of directors, is directed only to the fairness, from a financial point of view, of the consideration to be received by the holders of Guidant common stock in the merger and does not constitute a recommendation to any Guidant shareholder as to how the shareholder should vote at the Guidant special meeting. The summary of the opinion of JPMorgan set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion.

      In arriving at its opinion, JPMorgan, among other things:

	•	reviewed the merger agreement
	•	reviewed certain publicly available business and financial information concerning Guidant and Johnson & Johnson and the industries in which they operate, including publicly available financial

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		forecasts relating to Johnson & Johnson that were reviewed and discussed with JPMorgan by the management of Johnson & Johnson
	•	compared the proposed financial terms of the merger with the publicly available financial terms of certain transactions involving companies JPMorgan deemed relevant and the consideration received for those companies
	•	compared the financial and operating performance of Guidant and Johnson & Johnson with publicly available information concerning certain other companies JPMorgan deemed relevant and reviewed the current and historical market prices of Guidant common stock and Johnson & Johnson common stock and certain publicly traded securities of those other companies
	•	reviewed certain internal financial analyses and forecasts prepared by the management of Guidant relating to its business and
	•	performed other financial studies and considered other information as JPMorgan deemed appropriate for the purposes of its opinion.

      JPMorgan also held discussions with members of the managements of Guidant and Johnson & Johnson with respect to certain aspects of the merger, the past and current business operations of Guidant and Johnson & Johnson, the financial condition and future prospects and operations of Guidant and Johnson & Johnson, the effects of the merger on the financial condition and future prospects of Guidant and Johnson & Johnson, and certain other matters that JPMorgan believed necessary or appropriate to its inquiry.

      In giving its opinion, JPMorgan relied upon and assumed, without independent verification, the accuracy and completeness of all information that was publicly available or otherwise reviewed by JPMorgan, and JPMorgan has not assumed any responsibility or liability for such information. JPMorgan did not conduct any valuation or appraisal of any assets or liabilities, nor were any valuations or appraisals provided to JPMorgan. In relying on financial analyses and forecasts provided to it by Guidant, JPMorgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by the management of Guidant as to the expected future results of operations and financial condition of Guidant. With respect to the publicly available financial forecasts and estimates relating to Johnson & Johnson, JPMorgan assumed, with Guidant’s consent and without independent verification or investigation, that the forecasts represent reasonable estimates and judgments as to the future financial performance of Johnson & Johnson. JPMorgan also assumed that the merger will have the tax consequences described in discussions with, and materials furnished to JPMorgan by, representatives of Guidant, and that the other transactions contemplated by the merger agreement will be consummated as described in the merger agreement. JPMorgan relied as to all legal matters relevant to the rendering of its opinion upon the advice of counsel. JPMorgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any material adverse effect on Guidant, Johnson & Johnson or on the contemplated benefits of the merger.

      JPMorgan’s opinion is based on economic, market and other conditions as in effect on, and the information made available to JPMorgan as of, the date of its opinion. Subsequent developments may affect the opinion, and JPMorgan does not have any obligation to update, revise or reaffirm such opinion. JPMorgan’s opinion is limited to the fairness, from a financial point of view, of the consideration to be received by the holders of Guidant common stock in the merger, and JPMorgan has expressed no opinion as to the underlying decision by Guidant to engage in the merger. JPMorgan expressed no opinion as to the price at which Johnson & Johnson common stock will trade at any future time.

      JPMorgan was not authorized to and did not solicit any expressions of interest from any other parties with respect to the sale of all or any part of Guidant or any other alternative transaction. Consequently, JPMorgan assumed that the terms of the merger were the most beneficial terms from Guidant’s perspective that could under the circumstances be negotiated among the parties to the merger, and JPMorgan expressed no opinion whether any alternative transaction might produce consideration for Guidant shareholders in an amount in excess of the consideration in the merger.

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      In accordance with customary investment banking practice, JPMorgan employed generally accepted valuation methods in reaching its opinion. The following is a summary of the material financial analyses utilized by JPMorgan in connection with providing its opinion. Some of the summaries of financial analyses are presented in tabular format. In order to understand the financial analyses used by JPMorgan more fully, you should read the tables together with the text of each summary. The tables do not constitute a complete description of JPMorgan’s financial analyses.

      Selected Companies Analysis. Using publicly available information, JPMorgan compared selected financial data of Guidant with similar data for the following selected publicly traded large-cap cardiovascular companies that JPMorgan judged to be similar to Guidant:

	•	Medtronic, Inc.
	•	Boston Scientific Corporation
	•	St. Jude Medical, Inc.

      For each comparable company, JPMorgan used estimates of calendar year 2005 results published in publicly available equity analyst research reports. For Guidant, JPMorgan used estimates of calendar year 2005 results provided by Guidant management. JPMorgan reviewed per share equity values as a multiple of estimated calendar year 2005 earnings per share, commonly referred to as EPS. JPMorgan then applied a range of selected multiples of estimated 2005 EPS derived from the comparable companies to corresponding financial data of Guidant in order to derive an implied per share equity reference range for Guidant. This analysis indicated an approximate implied per share equity reference range for Guidant of $52.00 to $65.00.

      It should be noted that no company utilized in the analysis above is identical to Guidant.

     Selected Transactions Analysis. Using publicly available information, JPMorgan reviewed the following merger and acquisition transactions involving companies in the medical device industry:

      JPMorgan calculated a range of multiples of firm value to the latest 12 month earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA, implied in these transactions. JPMorgan then applied a range of selected multiples for the selected transactions to corresponding data of Guidant in order to derive an implied per share equity reference range for Guidant. This analysis indicated an approximate implied per share equity reference range for Guidant of $55.00 to $72.00.

      It should be noted that no company utilized in the analysis above is identical to Guidant and no transaction is identical to the merger.

     Discounted Cash Flow Analysis. JPMorgan conducted a discounted cash flow analysis for the purpose of determining the implied fully diluted equity value per share for Guidant’s common stock. JPMorgan reviewed two scenarios, one which was based upon management’s long-range plan, which reflected

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