Exhibit 10.19
VOLCANO CORPORATION
DIRECTOR COMPENSATION POLICY
ADOPTED: February 17, 2006
LAST AMENDED: June 6, 2007
A. Directors. All non-employee members of the board of directors (the “Board”)
of Volcano Corporation (the “Company”) shall receive the following compensation
pursuant to this Director Compensation Policy (this “Policy”):

  1)   Annual cash compensation in an amount equal to $24,000, accruing monthly
and payable on a quarterly basis at the end of each calendar quarter of service,
as an annual retainer for Board service.     2)   Cash compensation of $500 for
each day during which a Board member attends in person a meeting of the Board
provided that the Company is then a public company, plus reasonable
out-of-pocket travel expenses, to cover in person attendance at and
participation in Board meetings.     3)   Subject to the terms and conditions of
the Company’s 2005 Equity Compensation Plan, a stock option to purchase 20,000
shares of the Company’s Common Stock (the “Common Stock”) will be granted to
each eligible director upon his or her initial election or appointment to the
Board for the first time, which will vest as follows: 1/48th of the shares
subject to the option per month commencing one month after the date of election
or appointment (an “Initial Grant”). In addition, in the event such director is
elected or appointed to the Board for the first time on a date other than the
date of an annual meeting of stockholders, such director will be granted an
additional option to purchase a pro rata portion of 8,000 shares of Common Stock
(a “Prorated Annual Option”). Such pro rata portion shall be equal to the
product obtained by multiplying 8,000 by a fraction, the numerator of which is
the difference obtained by subtracting (i) the number of whole months that have
elapsed from the date of the last annual meeting of stockholders until the date
of such election or appointment from (ii) twelve (such difference, the “Vesting
Period”), and the denominator of which is twelve, with the resulting product
rounded down to the nearest whole share. The shares subject to a Prorated Annual
Option shall vest on an equal monthly basis commencing one month after the date
of election or appointment as to such number of shares as shall equal the
product obtained by multiplying the number of shares subject to the Prorated
Annual Option by a fraction, the numerator of which is one and the denominator
of which equals the Vesting Period. For example, if the last annual meeting of
stockholders was held on June 1, 2007 and a director is elected or appointed to
the Board for the first time on August 15, 2007, such director would be granted
a Prorated Annual Option to purchase 6,666 shares (10/12 x 8,000), which would
vest as to 1/10th of the shares subject to the Prorated Annual Option per month
commencing one month after the date of election or appointment. For the
avoidance of doubt, in the event that the number of whole months that have
elapsed from the date of the last annual meeting of stockholders until the date
an eligible director is elected or appointed to the Board for the first time
shall exceed eleven, no Prorated Annual Option shall be granted to such
director. Vesting of any Initial Option or Prorated Annual Option will cease if
the director resigns from the Board or otherwise ceases to serve as director,
unless the Board determines that the circumstances warrant continuation of
vesting.     4)   Subject to the terms and conditions of the Company’s 2005
Equity Compensation Plan, at each annual meeting of stockholders, a stock option
to purchase 8,000 shares of Common Stock will be granted to each director who is
then serving as a director of the Company or who is appointed or elected to the
Board on the date of such annual meeting of stockholders, which will vest as
follows: 1/12th of the shares subject to the option per month commencing one
month after the date of grant; provided, however, that all vesting will cease if
the director resigns from the Board or otherwise

 

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      ceases to serve as director, unless the Board determines that the
circumstances warrant continuation of vesting.

B. Audit Committee. In addition to the compensation provided under any other
provision of this Policy, all non-employee directors who serve on the Audit
Committee will receive the following compensation:

  1)   Cash compensation of in an annual amount equal to $3,000, payable on a
quarterly basis at the end of each calendar quarter of service, as a retainer
for Audit Committee service.     2)   In lieu of the cash compensation set forth
in Section B(1) immediately above, the Chairman of the Audit Committee shall
receive an annual payment in an amount equal to $6,000, payable on a quarterly
basis at the end of each calendar quarter of service, as a retainer for his or
her Audit Committee service.

C. Compensation Committee. In addition to the compensation provided under any
other provision of this Policy, all non-employee directors who serve on the
Compensation Committee will receive the following compensation:

  1)   Cash compensation in an annual amount equal to $1,000, payable on a
quarterly basis at the end of each calendar quarter of service, as a retainer
for Compensation Committee service.     2)   In lieu of the cash compensation
set forth in Section C(1) immediately above, the Chairman of the Compensation
Committee shall receive an annual payment in an amount equal to $3,000, payable
on a quarterly basis at the end of each calendar quarter of service, as a
retainer for his or her Compensation Committee service.

D. Corporate Governance Committee. In addition to the compensation provided
under any other provision of this Policy, all non-employee directors who serve
on the Corporate Governance Committee will receive the following compensation:
All stock options awarded pursuant to this Policy (other than options granted
pursuant to Section A(3)) shall be granted on the date of the annual meeting of
the Board, and the exercise price for each share available under such option
will be equal to the fair market value of the Common Stock, on the date of such
grant. All stock options awarded pursuant to Section A(3) of this Policy shall
be granted as of the date of the applicable election or appointment, and the
exercise price for each share available under such option will be equal to the
fair market value of the Common Stock, on the date of such grant.
E. Payment/Grant Procedure. All cash compensation payments made pursuant to this
Policy shall be paid quarterly in arrears as soon as practicable, but not later
than 10 business days, after the last day of such quarter.
F. Effective Date. This Policy shall be effective as of June 6, 2007, and
without any further action needed on the part of the Board or Compensation
Committee.
G. Change in Control Provisions. Notwithstanding the foregoing, all options
granted under this Policy shall vest immediately if (i) there is a Change in
Control (as defined in the Company’s 2005 Equity Compensation Plan); and
(ii) the optionee will cease to serve as a director of the Company (or as a
director of the successor corporation) as a result of such Change in Control.
H. Referenced Documents.
Section A(3)  2005 Equity Compensation Plan