exv10w19



 










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




 









 






	 	 	 	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