Document:

exv10w1

 

Exhibit 10.1

INDEMNIFICATION
AGREEMENT

     This
Indemnification Agreement (this “Agreement”)
is entered into as of the 30th day
of January, 2004, by and between Volcano Therapeutics, Inc., a Delaware corporation (the
“Company”)
and                   
                    (“Indemnitee”).

Recitals

     A. The Company and Indemnitee recognize the continued difficulty in obtaining
liability insurance for its directors, officers, employees, stockholders (as defined in
Section
10(g)), controlling persons, agents and fiduciaries, the significant increases in the cost of
such
insurance and the general reductions in the coverage of such insurance.

     B. The Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting directors, officers, employees, controlling
persons,
stockholders (as defined in Section 10(g)), agents and fiduciaries to expensive litigation
risks at
the same time as the availability and coverage of liability insurance has been severely
limited.

     C. Indemnitee does not regard the current protection available as adequate under the
present circumstances, and Indemnitee and other directors, officers, employees, stockholders
(as
defined in Section 10(g)), controlling persons, agents and fiduciaries of the Company may not
be
willing to serve in such capacities without additional protection.

     D. The Company (i) desires to attract and retain the involvement of highly qualified
groups, such as Indemnitee, to serve the Company and, in part, in order to induce each
Indemnitee to be involved with the Company and (ii) wishes to provide for the indemnification
and advancing of expenses to each Indemnitee to the maximum extent permitted by law.

     E. In view of the considerations set forth above, the Company desires that each
Indemnitee be indemnified by the Company as set forth herein.

     Now Therefore, the Company and each Indemnitee hereby agrees as follows:

     1. Indemnification.

          (a) Indemnification of Expenses. The Company shall indemnify and hold harmless
each Indemnitee (including its respective directors, officers, general partners, limited partners,
members, managing members, employees, agents and spouses) and each person who controls any of them
or who may be liable within the meaning of Section 15 of the Securities Act of 1933, as amended
(the “Securities Act”), or Section 20 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), to the fullest extent permitted by law if such Indemnitee was or is or becomes a
party to or witness or other participant in, or is threatened to be made a party to or witness or
other participant in, any threatened, pending or completed action, suit, proceeding or alternative
dispute resolution mechanism, or any hearing, inquiry or investigation that such Indemnitee
believes might lead to the institution of any such action, suit, proceeding or alternative dispute
resolution mechanism, whether civil, criminal, administrative, investigative or other (hereinafter
a “Claim”) by reason of (or arising in part out of) any event or

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occurrence related to the fact that Indemnitee is or was or may be deemed a director, officer,
stockholder (as defined in Section 10(g)), employee, controlling person, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was or may be deemed to be serving at the
request of the Company as a director, officer, stockholder (as defined in Section 10(g)), employee,
controlling person, agent or fiduciary of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action or inaction on the part of such Indemnitee while
serving in such capacity including, without limitation, any and all losses, claims, damages,
expenses and liabilities, joint or several (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action, suit, proceeding or
any claim asserted) under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, which relate directly or indirectly to the
registration, purchase, sale or ownership of any securities of the Company or to any fiduciary
obligation owed with respect thereto or as a result of any claim (a) made by any stockholder (as
defined in Section 10(g)) of the Company against an Indemnitee and arising out of or related to any
round of financing of the Company (including, but not limited to, claims regarding
non-participation, or non-prorata participation, in such round by such stockholder (as defined in
Section 10(g)), (b) made by a third party against an Indemnitee based on any misstatement or
omission of a material fact by the Company in violation of any duty of disclosure imposed on the
Company by Federal or state securities or common laws, (c) made by a third party against an
Indemnitee based (in whole or in part) on, or arising in any way out of, or relating to conduct
attributed to the Company or anyone alleged to be acting on the Company’s behalf, or (d) made by a
third party against an Indemnitee based (in whole or in part) on, or arising in any way out of, or
relating to (i) the Indemnitee being an investor in the Company, (ii) the Indemnitee’s alleged
participation in the management or direction of the Company, (iii) the Indemnitee’s alleged
participation in providing any assistance or advice to the Company, or (iv) Indemnitee being a
person described in Section 15 of Securities Act or Section 20 of the Exchange Act (hereinafter an
individually an “Indemnification Event” and
collectively the “Indemnification Events”) against
any and all expenses (including attorneys’ fees and all other costs, expenses and obligations
incurred in connection with investigating, defending, being a witness in or participating in
(including an appeal), or preparing to defend, be a witness in or participate in, any such action,
suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation),
judgments, fines, penalties and amounts paid in settlement (if, and only if, such settlement is
approved in advance by the Company, which approval shall not be unreasonably withheld) of such
Claim and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement (collectively, hereinafter
“Expenses”), including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses. Such payment of Expenses shall be made by the Company as soon
as practicable but in any event no later than ten (10) days after written demand by the Indemnitee
therefor is presented to the Company.

          (b) Reviewing Party. Notwithstanding the foregoing, (i) the obligations of the
Company under Section 1(a) shall be subject to the condition that it shall not have been finally
determined that Indemnitee would not be permitted to be indemnified under applicable law (initial
determination shall be made by the Reviewing Party as described in Section 10(e) hereof in a
written opinion, in any case in which the Independent Legal Counsel
referred to in Section 1(e)
hereof is involved), and (ii) and each Indemnitee acknowledges and agrees that the obligation of
the Company to make an advance payment of Expenses to Indemnitee pursuant to

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Section 2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and to the
extent that it is so determined that Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee
has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified under applicable law, any initial
determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified
under applicable law shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitee’s obligation
to reimburse the Company for any Expense Advance shall be unsecured and no interest shall be
charged thereon. If there has not been a Change in Control (as
defined in Section 10(c) hereof),
the Reviewing Party shall be selected by the Board of Directors, and if there has been such a
Change in Control (other than a Change in Control which has been approved by a majority of the
Company’s Board of Directors who were directors immediately prior to such Change in Control), the
Reviewing Party shall be the Independent Legal Counsel referred to in
Section 1(e) hereof. If there
has been no determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation seeking an initial
determination by the court or challenging any such determination by the Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.

          (c) Contribution. If the indemnification provided for in Section l(a) above for
any reason is held by a court of competent jurisdiction to be unavailable to an Indemnitee in
respect of any losses, claims, damages, expenses or liabilities referred to therein, then the
Company, in lieu of indemnifying such Indemnitee thereunder, shall contribute to the amount paid or
payable by such Indemnitee as a result of such losses, claims, damages, expenses or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received by the Company and
the Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and the Indemnitee in
connection with the action or inaction which resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable considerations. In connection with the
registration of the Company’s securities, the relative benefits received by the Company and the
Indemnitee shall be deemed to be in the same respective proportions that the net proceeds from the
offering (before deducting expenses) received by the Company and the Indemnitee, in each case as
set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public
offering price of the securities so offered. The relative fault of the Company and the Indemnitee
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Indemnitee and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.

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The Company and the Indemnitee agree that it would not be just and equitable if contribution
pursuant to this Section 1 (c) were determined by pro rata or per capita allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. In connection with the registration of the Company’s
securities, in no event shall Indemnitee be required to contribute any amount under this Section
l(c) in excess of the lesser of (i) that proportion of the total of such losses, claims, damages or
liabilities indemnified against equal to the proportion of the total securities sold under such
registration statement which is being sold by such Indemnitee or (ii) the proceeds received by such
Indemnitee from its sale of securities under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act) shall be
entitled to contribution from any person who was not found guilty of such fraudulent
misrepresentation.

          (d) Survival Regardless of Investigation. The indemnification and
contribution provided for in this Section 1 will remain in full force and effect
regardless of any
investigation made by or on behalf of the Indemnitee or any officer, director, general
partner,
limited partner, member, managing member, employee, agent or controlling person of the
Indemnitee.

          (e) Change in Control. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved by a
majority
of the Company’s Board of Directors who were directors immediately prior to such Change
in
Control) then, with respect to all matters thereafter arising concerning the rights of
Indemnitee to
payments of Expenses under this Agreement or any other agreement or under the Company’s
Restated Certificate of Incorporation (the “Restated Certificate”) or Bylaws as now or
hereafter
in effect, Independent Legal Counsel (as defined in Section 10(d) hereof) shall be
selected by the
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld).
Such counsel, among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent Indemnitee would be permitted to be
indemnified
under applicable law. The Company agrees to abide by such opinion and to pay the
reasonable
fees of the Independent Legal Counsel referred to above and to fully indemnify such
counsel
against any and all expenses (including attorneys’ fees), claims, liabilities and damages
arising
out of or relating to this Agreement or its engagement pursuant hereto.

          (f) Mandatory Payment of Expenses. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise,
including, without limitation, the dismissal of an action without prejudice, in the
defense of any
action, suit, proceeding, inquiry or investigation referred to in Section l(a) hereof or
in the
defense of any claim, issue or matter therein, each Indemnitee shall be indemnified
against all
Expenses incurred by such Indemnitee in connection herewith.

     2. Expenses; Indemnification Procedure.

          (a) Advancement of Expenses. The Company shall advance all Expenses
incurred by Indemnitee. The advances to be made hereunder shall be paid by the Company to
Indemnitee as soon as practicable but in any event no later than fifteen (15) days after
written demand by such Indemnitee therefor to the Company.

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          (b) Notice/Cooperation by Indemnitee. Indemnitee shall give the Company
notice as soon as practicable of any Claim made against Indemnitee for which
indemnification
will or could be sought under this Agreement. Notice to the Company shall be directed to the
Chief Executive Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to Indemnitee).

          (c) No Presumptions; Burden of Proof. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a
presumption that Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not permitted by
applicable
law. In addition, neither the failure of the Reviewing Party to have made a determination
as to
whether Indemnitee has met any particular standard of conduct or had any particular
belief, nor
an actual determination by the Reviewing Party that Indemnitee has not met such standard
of
conduct or did not have such belief, prior to the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee’s claim or create a presumption that
Indemnitee
has not met any particular standard of conduct or did not have any particular belief. In
connection with any determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the
Company
to establish that Indemnitee is not so entitled.

          (d) Notice to Insurers. If, at the time of the receipt by the Company of a
notice of a Claim pursuant to Section 2(b) hereof, the Company has liability insurance in
effect
which may cover such Claim, the Company shall give prompt written notice of the
commencement of such Claim to the insurers in accordance with the procedures set forth in
each
of the policies. The Company shall thereafter take all necessary or desirable action to
cause such
insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action,
suit,
proceeding, inquiry or investigation in accordance with the terms of such policies.

          (e) Selection of Counsel. In the event the Company shall be obligated
hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the
defense of such Claim, with counsel reasonably approved by the applicable Indemnitee,
upon the
delivery to such Indemnitee of written notice of its election to do so. After delivery of
such
notice, approval of such counsel by the Indemnitee and the retention of such counsel by
the
Company, the Company will not be liable to such Indemnitee under this Agreement for any
fees
of counsel subsequently incurred by such Indemnitee with respect to the same Claim;
provided
that, (i) the Indemnitee shall have the right to employ such Indemnitee’s counsel in any
such
Claim at the Indemnitee’s expense; (ii) the Indemnitee shall have the right to employ his
own
counsel in connection with any such proceeding, at the expense of the Company, if such
counsel
serves in a review, observer, advice and counseling capacity and does not otherwise
materially
control or participate in the defense of such proceeding; and (iii) if (A) the employment
of
counsel by the Indemnitee has been previously authorized by the Company, (B) such
Indemnitee
shall have reasonably concluded that there is a conflict of interest between the Company
and
such Indemnitee in the conduct of any such defense, or (C) the Company shall not continue
to
retain such counsel to defend such Claim, then the fees and expenses of the Indemnitee’s
counsel
shall be at the expense of the Company.

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     3. Additional Indemnification Rights; Nonexclusivity.

          (a) Scope. The Company hereby agrees to indemnify Indemnitee to the
fullest extent permitted by law, even if such indemnification is not specifically authorized
by the
other provisions of this Agreement or any other agreement, the Company’s Restated Certificate,
the Company’s Bylaws or by statute. In the event of any change after the date of this
Agreement
in any applicable law, statute or rule which expands the right of a Delaware corporation to
indemnify a member of its Board of Directors or an officer, stockholder (as defined in Section
10(g)), employee, controlling person, agent or fiduciary, it is the intent of the parties
hereto that
Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the
event of any change in any applicable law, statute or rule which narrows the right of a
Delaware
corporation to indemnify a member of its Board of Directors or an officer, stockholder (as
defined in Section 10(g)), employee, agent or fiduciary, such change, to the extent not
otherwise
required by such law, statute or rule to be applied to this Agreement, shall have no effect on
this
Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a)
hereof.

          (b) Nonexclusivity. The indemnification provided by this Agreement shall be
in addition to any rights to which Indemnitee may be entitled under the Company’s Restated
Certificate, its Bylaws, any agreement, any vote of stockholders or disinterested directors,
the
laws of the State of California or the State of Delaware, or otherwise. The indemnification
provided under this Agreement shall continue as to each Indemnitee for any action such
Indemnitee took or did not take while serving in an indemnified capacity even though the
Indemnitee may have ceased to serve in such capacity and such indemnification shall inure to
the
benefit of each Indemnitee from and after Indemnitee’s first day of service as a director with
the
Company or affiliation with a director from and after the date such director commences
services
as a director with the Company.

     4. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against any Indemnitee to
the extent such Indemnitee has otherwise actually received payment (under any insurance
policy,
Restated Certificate, Bylaws or otherwise) of the amounts otherwise indemnifiable hereunder.

     5. Partial Indemnification. If any Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for any portion of Expenses incurred in
connection with any Claim, but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such Expenses to which such
Indemnitee is entitled.

     6. Mutual Acknowledgement. The Company and each Indemnitee acknowledge that
in certain instances, Federal law or applicable public policy may prohibit the Company from
indemnifying its directors, officers, stockholders (as defined in Section 10(g)), employees,
controlling persons, agents or fiduciaries under this Agreement or otherwise.

     7. Liability Insurance. To the extent the Company maintains liability insurance
applicable to directors, officers, stockholders (as defined in Section 10(g)), employees,
control
persons, agents or fiduciaries, each Indemnitee shall be covered by such policies in such a

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manner as to provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company’s directors, if such Indemnitee is a director, or of the
Company’s officers, if such Indemnitee is not a director of the Company but is an officer, or
of the Company’s key employees, controlling persons, agents or fiduciaries, if such
Indemnitee is not an officer or director but is a key employee, agent, control person, or
fiduciary.

     8. Exceptions. Any other provision herein to the contrary notwithstanding,
the
Company shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to any
Indemnitee with respect to Claims initiated or brought voluntarily by such Indemnitee and
not by
way of defense, except (i) with respect to actions or proceedings to establish or enforce
a right to
indemnification under this Agreement or any other agreement or insurance policy or under
the
Company’s Restated Certificate or Bylaws now or hereafter in effect relating to Claims
for
Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the
initiation
or bringing of such Claim, or (iii) as otherwise required under Delaware statute or law,
regardless of whether such Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may be; or

          (b)
Claim Under Section 16(b). To indemnify any Indemnitee for expenses
and the payment of profits arising from the purchase and sale by such Indemnitee of
securities in
violation of Section 16(b) of the Exchange Act or any similar successor statute; or

          (c) Unlawful Indemnification. To indemnify an Indemnitee if a final decision
by a court having jurisdiction in the matter shall determine that such indemnification is
not
lawful.

     9. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against any Indemnitee, any
Indemnitee’s
estate, spouse, heirs, executors or personal or legal representatives after the
expiration of five (5)
years from the date of accrual of such cause of action, and any claim or cause of action
of the
Company shall be extinguished and deemed released unless asserted by the timely filing of
a
legal action within such five (5) year period; provided, however, that if any shorter
period of
limitations is otherwise applicable to any such cause of action, such shorter period
shall govern.

     10. Construction of Certain Phrases.

          (a) For purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, stockholders (as defined
in Section 10(g)), employees, agents or fiduciaries, so that if Indemnitee is or was or may be
deemed a director, officer, stockholder (as defined in Section 10(g)), employee, agent, control
person, or fiduciary of such constituent corporation, or is or was or may be deemed to be serving
at the request of such constituent corporation as a director, officer, stockholder (as defined in
Section 10(g)), employee, control person, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, each

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Indemnitee shall stand in the same position under the provisions of this Agreement with respect to
the resulting or surviving corporation as each Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

          (b) For purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines”
shall include any excise taxes assessed
on
any Indemnitee with respect to an employee benefit plan; and references to “serving at the
request of the Company” shall include any service as a director, officer, stockholder (as
defined
in Section 10(g)), employee, agent or fiduciary of the Company which imposes duties on, or
involves services by, such director, officer, stockholder (as defined
in Section 10(g)),
employee,
agent or fiduciary with respect to an employee benefit plan, its participants or its
beneficiaries;
and if any Indemnitee acted in good faith and in a manner such Indemnitee reasonably believed
to be in the interest of the participants and beneficiaries of an employee benefit plan, such
Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of
the
Company” as referred to in this Agreement.

          (c) For
purposes of this Agreement a “Change in Control” shall be deemed
to have occurred if (i) any “person” (as such term is used in Section 13(d)(3) and 14(d)(2) of
the
Exchange Act), other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or indirectly by the stockholders
(as
defined in Section 10(g)) of the Company in substantially the same proportions as their
ownership of stock of the Company, (A) who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing twenty percent (20%) or more of the
combined voting power of the Company’s then outstanding Voting Securities, increases his
beneficial ownership of such securities by five percent (5%) or more over the percentage so
owned by such person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under
said Exchange Act), directly or indirectly, of securities of the Company representing more
than
thirty percent (30%) of the total voting power represented by the Company’s then outstanding
Voting Securities, (ii) during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and any new director
whose election by the Board of Directors or combination for election by the Company’s
stockholders (as defined in Section 10(g)) was approved by a vote of at least two-thirds (2/3)
of
the directors then still in office who either were directors at the beginning of the period or
whose
election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders (as defined in Section 10(g)) of the
Company approve a merger or consolidation of the Company with any other corporation other
than a merger or consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into Voting Securities of the surviving entity) at least two-thirds
(2/3) of
the total voting power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the stockholders (as
defined in Section 10(g)) of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one transaction or a
series of transactions) all or substantially all of the Company’s assets.

          (d) For
purposes of this Agreement, “Independent Legal
Counsel” shall mean an attorney or
firm of attorneys, selected in accordance with the provisions of Section 1(e)

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hereof, who shall not have otherwise performed services for the Company or any Indemnitee within
the last three (3) years (other than with respect to matters concerning the right of any
Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).

          (e) For purposes of this Agreement, a “Reviewing Party” shall mean any
appropriate person or body consisting of a member or members of the Company’s Board of
Directors or any other person or body appointed by the Board of Directors who is not a party
to
the particular Claim for which Indemnitee is seeking indemnification or Independent Legal
Counsel.

          (f) For purposes of this Agreement, “Voting Securities” shall mean any
securities of the Company that vote generally in the election of directors.

          (g) For purposes of this Agreement, “stockholder” shall include any holder of
any capital stock of the Company and an affiliate thereof. For purposes of this Agreement,
“affiliate” shall constitute any limited partner, general partner, or any member or managing
member of such general partner.

     11. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall constitute an original.

     12. Binding
Effect; Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase, merger,
consolidation
or otherwise to all or substantially all of the business and/or assets of the Company,
partnership,
spouses, heirs, and personal and legal representatives. The Company shall require and cause
any
successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the Company, by
written
agreement in form and substance satisfactory to each Indemnitee, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement shall continue in
effect with respect to Claims relating to Indemnifiable Events regardless of whether any
Indemnitee continues to serve as a director, officer, employee, agent, controlling person, or
fiduciary of the Company or of any other enterprise, including subsidiaries of the Company, at
the Company’s request.

     13. Attorneys’
Fees. In the event that any action is instituted by an Indemnitee under
this Agreement or under any liability insurance policies maintained by the Company to enforce
or interpret any of the terms hereof or thereof, such Indemnitee shall be entitled to be paid
all
Expenses incurred by such Indemnitee with respect to such action, regardless of whether such
Indemnitee is ultimately successful in such action, and shall be entitled to the advancement
of
Expenses with respect to such action, unless, as a part of such action, a court of competent
jurisdiction over such action determines that each of the material assertions made by such
Indemnitee as a basis for such action was not made in good faith or was frivolous. In the
event
of an action instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, the Indemnitee shall be entitled to be paid all
Expenses incurred by such Indemnitee in defense of such action (including costs and expenses

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incurred with respect to Indemnitee counterclaims and cross-claims made in such action),
and shall be entitled to the advancement of Expenses with respect to such action.

     14. Notice.
All notices and other communications required or permitted hereunder shall
be in writing, shall be effective when given, and shall in any event
be deemed to be given (a) five
(5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered
by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar
overnight courier, freight
prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if deliverable
by facsimile transmission, with copy by first class mail, postage
prepaid, and shall be addressed,
if to Indemnitee, at each Indemnitee’s address as set forth
beneath the Indemnitee’s signature to
this Agreement, and, if to the Company, at the address of its
principal corporate offices
(attention: Secretary), or at such other address as such party may
designate by ten (10) days’
advance written notice to the other parties hereto.

     15. Consent
to Jurisdiction. The Company and each Indemnitee each hereby irrevocably
consent to the jurisdiction and venue of the courts of the State of
California for all purposes in
connection with any action or proceeding which arises out of or
relates to this Agreement and agree
that any action instituted under this Agreement shall be commenced, prosecuted and continued only in
the courts of the State of California.

     16. Severability.
The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section, paragraph
or sentence) are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitations, each portion of this Agreement containing any provision
held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the extent manifested by the provision
held invalid, illegal or unenforceable.

     17. Choice
of Law. This Agreement shall be governed by and its provisions construed and
enforced in accordance with the laws of the State of Delaware, as
applied to contracts between
Delaware residents, entered into and to be performed entirely within
the State of Delaware, without
regard to the conflict of laws principles thereof.

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

     19. Amendment
and Termination. No amendment, modification, termination or cancellation
of this Agreement shall be effective unless it is in writing signed
by the parties to be bound
thereby. Notice of same shall be provided to all parties hereto. No
waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

- 10 -

 

     20. No
Construction as Employment Agreement. Nothing contained in this Agreement shall
be construed as giving any Indemnitee any right to be retained in the
employ of the Company or any
of its subsidiaries.

     21. Corporate Authority. The Board of Directors of the Company in accordance
with Delaware law have approved the terms of this Agreement.

     In Witness Whereof, the parties hereto have executed this Agreement on and as of the
day and year first above written.

	 	 	 	 	 
	 	VOLCANO THERAPEUTICS, INC., 

a Delaware corporation

 	 
	 	By:  	/s/ Scott Huennekens
 	 
	 	 	Scott Huennekens,     	 
	 	 	President and Chief Executive Officer 	 
	 

	 	 	 	 	 	 
	 

	 	Address:
	 	2870 Kilgore Road	 
	 

	 	 	 	Rancho Cordova, CA 95670	 
	 
	 	 	 	 	 
	 	 	Indemnitee:	 
	 	 	 	 
	 	 	 	 

- 11 -exv10w2

 

Exhibit 10.2

VOLCANO CORPORATION

AMENDED AND RESTATED 2000 LONG TERM INCENTIVE PLAN

     1. Objectives.
This Volcano Corporation 2000 Long Term Incentive Plan, as amended
and restated effective July 13, 2005 (the “Plan”) is
intended as an incentive to retain and attract
persons of training, experience and ability to serve as employees,
consultants, independent
contractors and directors of Volcano Corporation, a Delaware
corporation (the “Company”), to
encourage the sense of proprietorship of such persons and to
stimulate the active interest of such
persons in the development and financial success of the Company and
its Subsidiaries.

     2. Definitions. As used herein, the terms set forth below shall have the
following respective meanings:

          “Administrator” means the Board or any person or persons appointed by the Board to administer
the Plan.

          “Award” means any Option, Restricted Stock, Phantom Stock, Cash Award, Stock Award or Stock
Appreciation Right, whether granted singly, in combination or in tandem, granted to a Participant
pursuant to any applicable terms, conditions and limitations as the Administrator may establish in
order to fulfill the objectives of the Plan.

          “Award Agreement” means a written agreement between the Company and a Participant that sets
forth the terms, conditions and limitations applicable to an Award.

          “Board” means the Board of Directors of the Company.

          “Cash
Award” means an award payable in cash.

          “Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

          “Common Stock” means the common stock, par value $.001 per share, of the Company.

          “Company” means Volcano Corporation, a Delaware corporation.

          “Director” means a non-employee member of the Board.

          “Disability” means the inability to perform the duties of an Employee’s position for a
continuous period of more than three months by reason of any medically determinable physical or
mental impairment.

          “Effective Date” means October 23, 2000.

 

 

          “Employee” means an individual employed by the Company or a Subsidiary. For purposes of this
Plan, an Employee also includes a consultant or independent contractor providing services to the
Company or a Subsidiary or a director of the Company or a Subsidiary.

          “Exercise Price” means the price at which the Option Shares may be purchased under the terms
of the Award Agreement.

          “Fair Market Value” means, as of a particular date, such amount as may be determined by the
Board, in good faith, to be the fair market value per share of Common Stock.

          “Grant Date” means the date on which an Award is granted by the Administrator.

          “ISO” means an incentive stock option within the meaning of Code Section 422.

          “Option” means a right to purchase a particular number of shares of Common Stock at a
particular Exercise Price, subject to certain terms and conditions as provided in the Plan and
Award Agreement. An Option may be in the form of an ISO or a nonqualified stock option within the
meaning of Code Section 83.

          “Option Shares” means the shares of Common Stock covered by a particular Option.

          “Participant” means an Employee or a Director to whom an Award has been granted under this
Plan.

          “Phantom Stock” means a right to receive the value of a specified number of shares of Common
Stock.

          “Plan” means the Volcano Corporation 2000 Long Term Incentive Plan, as amended from time to
time.

          “Restricted Stock” means shares of Common Stock that are restricted or subject to forfeiture
provisions.

          “Stock Appreciation Rights” or “SARs” means the right to receive an amount in cash or Common
Stock equal to the appreciation in value of a specified number of shares of Common Stock over a
particular period of time.

          “Stock Award” means an award payable in shares of Common Stock, which may be Restricted
Stock.

          “Subsidiary” means any corporation, limited liability company or similar entity of which the
Company directly or indirectly owns shares representing more than 50% of the voting power of all
classes or capital stock of such corporation which have the right to vote generally on matters
submitted to a vote of the shareholders of such entity;
provided, however, that with
respect to Options intended to qualify as incentive stock options within the meaning of

-2-

 

Section 422 of the Code, “Subsidiary” shall have the meaning set forth in Section 424(f) of the
Code or any successor provision.

     3. Plan
Administration and Designation of Participants. All Employees of the Company
and its Subsidiaries and all Directors are eligible for Awards under
this Plan. The Administrator
shall select the Participants from time to time by the grant of
Awards under the Plan and, subject
to the terms and conditions of the Plan, shall determine all terms
and conditions of the Award. The
Plan shall be administered by the Administrator, which shall have
full and exclusive power to
interpret this Plan and to adopt such rules, regulations and
guidelines for carrying out this Plan
as it may deem necessary or appropriate. The Administrator may
delegate its duties hereunder to the
President or other senior officers of the Company subject to such
rules and regulations as the
Administrator establishes. The Administrator may, in its discretion, provide for the extension of
the exercisability of an Award, accelerate the vesting or exercisability of an Award, eliminate or
make less restrictive any restrictions contained in an Award Agreement, waive any restriction or
other provision of this Plan or an Award Agreement or otherwise amend or modify an Award in any
manner that is allowed by applicable law and either (i) not adverse to the Participant holding the
Award or (ii) consented to by such Participant. Notwithstanding the foregoing, in no event may the
Administrator (i) amend or modify an Option in a manner that would reduce the exercise price of such
Option; (ii) substitute an Option for another Option with a lower exercise price; (iii) cancel an
Option and issue a new Option with a lower exercise price to the holder of the cancelled Option
within six (6) months following the date of the cancellation of the cancelled Option; or (iv) cancel
an outstanding Option that is under water (i.e., for which the Fair Market Value, as defined below,
of the underlying Shares is less than the Option’s Exercise Price) for the purpose of granting
a replacement Award of a different type.

     4. Award
Agreement. Each Award granted hereunder shall be described in an Award
Agreement, which shall be subject to the terms and conditions of the
Plan and shall be signed by the
Participant and by the appropriate officer for and on behalf of the Company.

     5. Shares
of Common Stock Reserved for the Plan. Subject to adjustment as provided in
Section 11 hereof, a total of 6,478,814 shares of Common Stock
shall be reserved for issuance upon
the exercise or payment of Awards granted pursuant to this Plan. The Administrator and the
appropriate officers of the Company shall from time to time take whatever actions are necessary to
execute, acknowledge, file and deliver any documents required to be filed with or delivered to any
governmental authority or any stock exchange or transaction reporting system on which shares of
Common Stock are listed or quoted in order to make shares of Common Stock available for issuance
pursuant to this Plan. Awards that are forfeited or terminated or expire unexercised in such a
manner that all or some of the shares of Common Stock subject thereto are not issued to a
Participant shall immediately become available for the granting of Awards. Notwithstanding the
foregoing, at any such time as the offer and sale of securities pursuant to the Plan is subject to
compliance with Section 260.140.45 of Title 10 of the California Code of Regulations (“Section
260.140.45”), the total number of shares of Common Stock issuable upon the exercise of all
outstanding Options (together with options outstanding under any other stock option plan of the
Company) and the total number of shares provided for under any stock bonus or similar plan of the
Company shall not exceed thirty percent (30%) (or such other higher percentage limitation as may be
approved by the stockholders of the Company

-3-

 

pursuant to Section 260.140.45) of the then outstanding shares of the Company as calculated in
accordance with the conditions and exclusions of Section 260.140.45.

     6. Types of Awards.

          (a)
Incentive Stock Options. Options granted to Employees (other than consultants and
independent contractors) hereunder may be incentive stock options
within the meaning of Section 422
of the Code (an “ISO”). An ISO shall consist of a right to
purchase a specified number of shares of
Common Stock at a price specified by the Administrator in the Award Agreement or otherwise, which
shall not be less than the Fair Market Value of the Common Stock on the grant date. Any ISO granted
shall expire not later than ten years after the grant date, with the expiration date to be specified
by the Administrator in the Award Agreement. Any ISO granted must, in addition to being subject to
applicable terms, conditions and limitations established by the Administrator, comply with Section
422 of the Code. Pursuant to the ISO requirements of Code Section 422, notwithstanding anything
herein to the contrary, (a) no ISO can be granted under the Plan on or after the tenth anniversary
of the Effective Date of the Plan (or the fifth anniversary of the Effective Date of the Plan if the
ISO is awarded to any person who, at the time of grant, owns stock representing more than 10% of the
combined voting power of all classes of stock of the Company or any Subsidiary), (b) no Optionee may
be granted an ISO to the extent that, upon the grant of the ISO, the aggregate Fair
Market Value (determined as of the date the Option is granted) of the Common Stock with respect to
which ISOs (including Options hereunder) are exercisable for the first time by the Optionee during
any calendar year (under all plans of the Company and any Subsidiary)
would exceed $100,000, (c) the
exercise price of the ISO may not be less than 100% of the Fair
Market Value of the Common Stock at
the time of grant (or not less than 110% of such of the Fair Market
Value if the ISO is awarded to
any person who, at the time of grant, owns stock representing more
than 10% of the combined voting
power of all classes of stock of the Company or any Subsidiary), and (d) no person may be granted an
ISO to the extent that, upon the grant of the ISO, the aggregate Fair Market Value (determined as of
the date the ISO is granted) of the Common Stock with respect to which ISOs (including ISOs granted
under this Plan) are exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company or any Subsidiary) would exceed $100,000. All other terms, conditions and
limitations applicable to ISOs shall be determined by the Administrator.

          (b)
Nonqualified Options. Options granted to
Employees (including consultants
and independent contractors) may be nonqualified options within the
meaning of Section 83 of the
Code. A nonqualified option shall consist of a right to purchase a
specified number of shares of
Common Stock at a price specified by the Administrator in the Award Agreement or otherwise;
provided, however, that in the case of a nonqualified option granted prior to the date, if any, on
which the Common Stock covered by this Plan have been registered under the Securities Act of 1933,
as amended, the per share exercise price shall be no less than 100% of the Fair Market Value per
share on the date of grant. Any nonqualified option granted shall expire not later than ten years
after the grant date, with the expiration date to be specified by the Administrator in the Award
Agreement. All other terms, conditions and limitations applicable to nonqualified options shall be
determined by the Administrator.

-4-

 

          (c)
Stock Award (including Restricted Stock). An Award may consist of Common Stock or
may be denominated in units of Common Stock. All or part of any Stock Award may be subject to
conditions established by the Administrator and set forth in the
Award Agreement, which conditions
may include, but are not limited to, continuous service with the Company and its Subsidiaries,
achievement of specific business objectives, increases in specified indices, attaining specified
growth rates and other comparable measurements of performance. In the case of Awards issued prior to
the date, if any, on which the Common Stock covered by this Plan have been registered under the
Securities Act of 1933, as amended, the per share valuation or purchase price shall be no less than
100% of the Fair Market Value per share on the date of grant. The certificates evidencing shares of
Common Stock issued in connection with a Stock Award shall contain appropriate legends and
restrictions describing the terms and conditions of the restrictions applicable thereto. The terms,
conditions, and limitations applicable to any Stock Award pursuant to this Plan shall be determined
by the Administrator.

          (d)
Phantom Stock. An Award may be in the form
of Phantom Stock, or other bookkeeping
account tied to the value of shares of Common Stock. The terms,
conditions, and limitations
applicable to any Awards of Phantom Stock shall be determined by the Administrator.

          (e)
Stock Appreciation Rights. An Award may be in the form of SARs. The terms,
conditions, and limitations applicable to any Awards of SARs shall be
determined by the
Administrator. SARs to be settled in shares of stock shall be counted
in full against the number
of shares of stock available for award under the Plan, regardless of
the number of exercise gain
shares issued upon the settlement of the SAR.

          (f)
Cash Awards. An Award may be in the form of a Cash Award. The terms, conditions,
and limitations applicable to any Cash Awards shall be determined by
the Administrator.

          (g)
Director Options. Options granted to Directors shall be nonqualified options
within the meaning of Section 83 of the Code and shall have such
terms, conditions and limitations
as shall be determined by the Administrator.

     7. Payment of Awards.

          (a)
General. Payment of Awards may be made in the form of cash or Common Stock
or combinations thereof and may include such restrictions as the
Administrator shall determine
including, in the case of Common Stock, restrictions on transfer and
forfeiture provisions.

          (b)
Deferral. The Administrator may, in its discretion, (i) permit
selected Participants to elect to defer payments of some or all types of Awards in accordance
with procedures established by the Administrator or (ii) provide for the deferral of an Award in
an Award Agreement or otherwise. Any such deferral may be in the form
of installment payments or a
future lump sum payment. Any deferred payment, whether elected by the
Participant or specified by
the Award Agreement or by the Administrator, may be forfeited if and to the extent

-5-

 

that the Award Agreement so provides. Procedures governing any such deferral shall comply in all
respects with Section 409A of the Code.

          (c)
Dividends and Interest. Dividends or dividend equivalent rights may be extended
to and made part of any Award denominated in Common Stock or units of Common Stock, subject to
such terms, conditions and restrictions as the Administrator may establish. The Administrator may
also establish rules and procedures for the crediting of interest on deferred cash payments and
dividend equivalents for deferred payment denominated in Common Stock or units of Common Stock.

     8. Stock
Option Exercise. The price at which shares of Common Stock may be purchased
under an Option shall be paid in full at the time of exercise in cash
or, if permitted by the
Administrator, by means of tendering Common Stock or surrendering all
or part of that or any other
Award, including Restricted Stock, valued at Fair Market Value on the
date of exercise, or any
combination thereof. The Administrator shall determine acceptable
methods for tendering Common Stock
or Awards to exercise an Option as it deems appropriate. The Administrator may provide for
procedures to permit the exercise or purchase of Awards by use of the proceeds to be received from
the sale of Common Stock issuable pursuant to an Award. Unless otherwise provided in the applicable
Award Agreement, in the event shares of Restricted Stock are tendered as consideration for the
exercise of an Option, a number of the shares issued upon the exercise of the Option, equal to the
number of shares of Restricted Stock used as consideration therefor, shall be subject to the same
restrictions as the Restricted Stock so submitted as well as any additional restrictions that may be
imposed by the Administrator.

     9. Termination
of Employment. Upon the termination of employment by a Participant,
any unexercised, deferred or unpaid Awards shall be treated as
provided in the specific Award
Agreement evidencing the Award. Unless otherwise specifically
provided in the Award Agreement and to
the extent permissible under applicable law, each Award granted pursuant to this Plan which is an
Option shall immediately terminate to the extent the Option is not vested (or does not become
vested as a result of such termination of employment) on the date the Participant terminates
employment with the Company or its Subsidiaries, or terminates service as a Director or independent
contractor or consultant.

     10. Assignability. Except as otherwise provided herein, no Award granted under
this Plan shall be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by
a Participant other than by will or the laws of descent and distribution, and during the lifetime of
a Participant, any Award shall be exercisable only by him, or, in the case of a Participant who
is mentally incapacitated, the Award shall be exercisable by his guardian or legal
representative. The Administrator may prescribe and include in applicable Award Agreements other
restrictions on transfer. Any attempted assignment or transfer in violation of this Section shall be
null and void. Upon the Participant’s death, the personal representative or other person entitled
to succeed to the rights of the Participant (the ‘Successor Participant’) may exercise such rights.
A Successor Participant must furnish proof satisfactory to the Company of his or her right
to exercise the Award under the Participant’s will or under the applicable laws of descent
and distribution.

-6-

 

          Subject to approval by the Administrator in its sole discretion, all or a portion of the
Awards granted to a Participant under the Plan may be transferable by the Participant, to the
extent and only to the extent specified in such approval, to (i) the children or grandchildren of
the Participant (‘Immediate Family Members’), (ii) a trust or trusts for the exclusive benefit of
such Immediate Family Members (‘Immediate Family Member Trusts’), or (iii) a partnership or
partnerships in which such Immediate Family Members have at least ninety-nine percent (99%) of the
equity, profit and loss interests (‘Immediate Family Member Partnerships’); provided that the
Award Agreement pursuant to which such Awards are granted (or an amendment thereto) must expressly
provide for transferability in a manner consistent with this Section. Subsequent transfers of
transferred Awards shall be prohibited except by will or the laws of descent and distribution,
unless such transfers are made to the original Participant or a person to whom the original
Participant could have made a transfer in the manner described herein. No transfer shall be
effective unless and until written notice of such transfer is provided to the Administrator, in
the form and manner prescribed by the Administrator. Following transfer, any such Awards shall
continue to be subject to the same terms and conditions as were applicable immediately prior to
transfer, and, except as otherwise provided herein, the term ‘Participant’ shall be deemed to
refer to the transferee. The consequences of termination of employment shall continue to be
applied with respect to the original Participant, following which the Awards shall be exercisable
by the transferee only to the extent and for the periods specified in this Plan and the Award
Agreement.

     11. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.

          (a)
Changes in Capitalization. Subject to any action required under applicable
laws by the stockholders of the Company, the number of shares of
Common Stock covered by each
outstanding Award and the number of shares of Common Stock that have
been authorized for issuance
under the Plan but as to which no awards have yet been granted or
that have been returned to the
Plan upon cancellation or expiration of an award, as well as the
price per share of Common Stock
covered by each such outstanding Award, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of consideration.” Such
adjustment shall be made by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or price of shares of
Common Stock subject to an award.

          (b)
Dissolution or Liquidation. In the event of the dissolution or liquidation of the
Company, each Option, Phantom Stock and Stock Appreciation Right will
terminate immediately prior to
the consummation of such action, unless otherwise determined by the Administrator.

-7-

 

          (c) Corporate Transaction. In the event of a Corporate Transaction (as defined
below), each outstanding Option, Phantom Stock or Stock Appreciation Right shall he assumed or an
equivalent option or right shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor
Corporation does not agree to assume the award or to substitute an equivalent option or right, in
which case such Option, Phantom Stock or Stock Appreciation Right shall terminate upon the
consummation of the transaction.

               For purposes of this Section 11(c), an Option, Phantom Stock or a Stock Appreciation Right
shall be considered assumed, without limitation, if, at the time of issuance of the stock or other
consideration upon a Corporate Transaction, each holder of an Option, Phantom Stock or Stock
Appreciation Right would be entitled to receive upon exercise of the award the same number and
kind of shares of stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the holder had been,
immediately prior to such transaction, the holder of the number of shares of Common Stock covered
by the award at such time (after giving effect to any adjustments in the number of shares covered
by the Option, Phantom Stock or Stock Appreciation Right as provided for in this Section 11);
provided that if such consideration received in the transaction is not solely common stock of the
Successor Corporation, the Administrator may, with the consent of the Successor Corporation,
provide for the consideration to be received upon exercise of the award to be solely common stock
of the Successor Corporation equal to the Fair Market Value of the per share consideration
received by holders of Common Stock in the transaction.

               For purposes of this Section 11(c), a “Corporate Transaction” shall mean (1) a sale of all or
substantially all of the Company’s assets, or (2) any merger, consolidation or other business
combination transaction of the Company with or into another corporation, entity or person, other
than a transaction in which the holders of at least a majority of the shares of voting capital
stock of the Company outstanding immediately prior to such transaction continue to hold (either by
such shares remaining outstanding or by their being converted into shares of voting capital stock
of the surviving entity) a majority of the total voting power represented by the shares of voting
capital stock of the Company (or the surviving entity) outstanding immediately after such
transaction, or (3) the direct or indirect acquisition (including by way of a tender or exchange
offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire
beneficial ownership of shares representing a majority of the voting power of the then outstanding
shares of capital stock of the Company.

     12. Purchase
for Investment. Unless the Awards and shares of Common Stock covered by
this Plan have been registered under the Securities Act of 1933, as
amended, each person receiving
shares of Common Stock pursuant to an Award under this Plan may be
required by the Company to give a
representation in writing in form and substance satisfactory to the Company to the effect that he is
acquiring such shares for his own account for investment and not with a view to, or for sale in
connection with, the distribution of such shares or any part thereof.

     13. Tax
Withholding. The Company shall have the right to deduct applicable taxes from
any Award payment and withhold, at the time of delivery or vesting of cash or shares of

-8-

 

Common Stock under this Plan, an appropriate amount of cash or number of shares of Common
Stock or a combination thereof for payment of taxes required by law or to take such other action
as may be necessary in the opinion of the Company to satisfy all obligations for withholding of
such taxes. The Administrator may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award with respect to
which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such
shares shall be valued based on the Fair Market Value when the tax withholding is required to be
made. Except as otherwise required by law, the Participant shall be solely responsible for payment
of any such taxes payable to governmental entities outside of the United States.

     14. Amendments
or Termination. The Company may amend, alter or discontinue this Plan,
except that no amendment or alteration that would impair the rights
of any Participant under any
Award that he has been granted shall be made without his consent, and
no amendment or alteration
shall be effective prior to approval by the Company’s
shareholders to the extent such approval is
determined by the Board to be required by applicable laws,
regulations or exchange requirements.

     15. Restrictions.
No shares of Common Stock or other form of payment shall be issued
with respect to any Award unless the Company shall be satisfied based
on the advice of its counsel
that such issuance will be in compliance with applicable federal and
state securities laws. The
Award Agreement may include provisions for the repurchase by the
Company of Common Stock acquired
pursuant to an Award and repurchase of the Participant’s Option rights.

     16. Unfunded
Plan. Insofar as it provides for Awards of cash, Common Stock or rights
thereto, this Plan shall be unfunded. Although bookkeeping accounts
may be established with respect
to Participants who are entitled to cash, Common Stock or rights
thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The
Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock or rights thereto,
nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board
or the Administrator be deemed to be a trustee of any cash, Common Stock or rights thereto to be
granted under this Plan. Any liability or obligation of the Company to any Participant with
respect to a grant of cash, Common Stock or rights thereto under this Plan shall be based solely
upon any contractual obligations that may be created by this Plan and any Award Agreement, and no
such liability or obligation of the Company shall be deemed to be secured by any pledge or other
encumbrance on any property of the Company. None of the Company, the Board or the Administrator
shall be required to give any security or bond for the performance of any obligation that may be
created by this Plan.

     17. Miscellaneous.
The granting of any Award shall not impose upon the Company any
obligation to maintain any Participant as an Employee or Director and
shall not diminish the power
of the Company to discharge any Participant at any time.

     18. Governing
Law. This Plan and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by mandatory provisions
of the Code or the securities
laws of the United States, shall be governed by and construed in
accordance with the laws of the
State of California.

-9-

 

     19. Effective Date of Plan. This Plan shall be effective as of the Effective Date.
It shall continue in effect for a term of ten (10) years from the date it was adopted unless
sooner terminated as hereinafter provided.

     20. Stockholder
Approval. If required by applicable law, continuance of the Plan shall
be subject to approval by the stockholders of the Company within
twelve (12) months before or after
the date the Plan is adopted. Such stockholder approval shall be
obtained in the manner and to the
degree required under the applicable law.

     21. Information
and Documents to Participants. Prior to the date, if any, upon which
the Common Stock covered by this Plan becomes registered under the
Securities Act of 1933, as
amended, and if required by the applicable laws, the Company shall
provide financial statements at
least annually to each Participant and to each individual who
acquired Awards pursuant to the Plan,
during the period such Participant has one or more Options or Stock Appreciation Rights (or SARs)
outstanding, and in the case of an individual who acquired shares of Common Stock pursuant to the
Plan, during the period such individual owns such shares. The Company shall not be required to
provide such information if the issuance of Awards under the Plan is limited to key employees whose
duties in connection with the Company assure their access to equivalent information.

	 	 	 
	 

	 	Executed by Scott Huennekens, President of
	 

	 	Volcano Corporation, as effective on the
	 

	 	13th day of July, 2005.

 

-10-

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