exv10w19



 










Exhibit 10.19




VOLCANO CORPORATION




DIRECTOR COMPENSATION POLICY




ADOPTED: June 6, 2007

REVISED: August 27, 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 $30,000, 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)	 	In addition to the cash compensation set forth in Section A(1) immediately above,
the non-executive Chairman of the Board shall receive an annual payment in an amount
equal to $20,000, payable on a quarterly basis at the end of each calendar quarter of
service, as a retainer for his or her service as the Chairman of the Board; provided,
however, such annual payment for service as the Chairman of the Board shall be reduced
by any amounts received during such year pursuant to Sections B(2), C(2) and D(2) below,
for service as Chairman of the Audit Committee, Compensation Committee and Corporate
Governance Committee, respectively.
	 
	 	3)	 	Reasonable out-of-pocket travel expenses, to cover in-person attendance at and
participation in Board meetings.
	 
	 	4)	 	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.
	 
	 	5)	 	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.




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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 $5,000, 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
$10,000, 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 $3,000, 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 $6,000, 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:




	 	1)	 	Cash compensation 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 Corporate
Governance Committee service.
	 
	 	2)	 	In lieu of the cash compensation set forth in Section D(1) immediately above, the
Chairman of the Corporate Governance 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 Corporate Governance Committee service.





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. All stock options awarded pursuant to this Policy (other than
options granted pursuant to Section A(4)) 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(4) 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.



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.



					
	
	 	 	 	 
	Sections A(4), A(5) and G
	 	2005 Equity Compensation Plan
	 	 






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