Document:

VOLC 3.31.2014 10-Q Exhibit 10.3

VOLCANO CORPORATION
2014 SHORT TERM INCENTIVE PLAN

1.Purpose. As part of its executive compensation program, Volcano Corporation (“Volcano” or the “Company”) has designed an annual cash-based incentive plan for the 2014 calendar year for selected executive officers. This 2014 Short Term Incentive Plan (the “STIP”) is designed to drive revenue growth and operating profits, drive achievement of annual operational and financial objectives (Volcano’s “Key Factors for Success” or “KFS”) and reward executives upon the achievements of Volcano’s objectives. This STIP operates under, and is subject to the terms of, Volcano’s Amended and Restated 2005 Equity Compensation Plan (the “2005 Plan”), which Volcano’s Board of Directors (“Board”) and stockholders have approved.  For purposes of the STIP, “Committee” means a committee of one or more members of the Board appointed by the Board pursuant to the 2005 Plan; provided, however, that for purposes of administering the 2005 Plan with respect to individuals selected for participation who are or may be deemed “covered employees” (as defined for purposes of Section 162(m) of the Code), the “Committee” will be composed of two or more members of the Board, each of whom is an “outside director” for purposes of Section 162(m) of the Code.  Defined terms not defined in this STIP have the same definitions as in the 2005 Plan.  
2.    Eligibility. Participation in the STIP during the 2014 calendar year (the “Performance Period”) is at the sole discretion of the Committee.  Individuals selected for participation are called “Participants”.  All Actual Awards are calculated based on actual base salary earned by the Participant during the Performance Period.  Unless the Committee explicitly determines otherwise in a manner that complies with the requirements of Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”) (in which case the determination will govern), if the Participant’s base salary or annual bonus target percent, or both, changes during the Performance Period, the Participant’s Target Award will be pro-rated based on the number of days served at the old salary/bonus target and the number of days served at the new salary/bonus target.  To earn an Actual Award under the STIP, the Participant must remain employed through the end of the Performance Period and through the actual payment date.  If the Participant’s employment terminates before the date the Actual Award is paid, the Participant will not be eligible for a bonus payment under the STIP, or any portion of a bonus payment, except as provided in an applicable severance plan or in an individual employment or retention agreement with the Participant. If the Participant is on a leave of absence during the Performance Period, the Participant will be eligible for a bonus under the STIP based on actual salary earned by the Participant during the Performance Period, exclusive of any salary replacement benefits paid during the leave (whether through insurance or otherwise). 
3.    Employees Covered by Section 162(m). Notwithstanding any other provision of this STIP, if the Committee determines it to be necessary or desirable to achieve full deductibility of bonus compensation awarded under the STIP, the Committee, in its sole discretion, (a) may exclude from participation under the STIP and/or create a separate incentive plan for those individuals who are or who may likely be “covered employees” under Section 162(m) whose employment in an eligible position began after the Committee established the Threshold Goal, which generally will be a date not later than the 90th day of the Performance Period; and (b) may take other actions as necessary to ensure deductibility of the compensation paid under the STIP.
4.    How the STIP Works.
(a)    STIP Components. The STIP Components are: (i) Target Award; (ii) Maximum Award; (iii) Threshold Goal; (iv) Financial Corporate Result; (v) Individual Result; and (vi) Actual Award. 
(b)    Target Award. The Committee designates an annual bonus target percent for each executive officer participating in the STIP. Each Participant’s Actual Award is calculated, in part (as described below), by reference to his or her Target Award. The “Target Award” equals the product of the annual bonus target percentage and the actual salary earned by the Participant during the Performance Period. For example, a Participant whose annual bonus target percent is 50% and whose actual earned annual base salary is $320,000 would have his or her Actual Award calculated by reference to a Target Award of $160,000 ($320,000 * 50%). The Target Award is the amount that the Participant would earn under the STIP upon achievement at the 100% level of both the Financial Corporate Result and the Individual Result, provided that the Threshold Goal is met. 
(c)    Maximum Award. No Participant may earn a bonus for the Performance Period in excess of 200% of his or her Target Award (the “Maximum Award”).  In addition, no Participant may be granted in any calendar year a Maximum Award that may exceed $1 million.
(d)    Funding the Bonus Pool. If the Threshold Goal is met, the STIP will be funded at 200% of the Target Award for all Participants, and the Committee will initially credit each Participant with his or her Maximum Award.  Volcano is under no obligation to pay out the entire funding of the bonus pool or to pay the Maximum Award to any Participant. The “Threshold Goal” is defined as achievement during the Performance Period of at least 90% of Volcano’s budgeted non-GAAP revenue target, as set forth in Volcano’s annual operating plan approved by the Board of Directors at the beginning of the Performance Period, which is calculated as GAAP revenue, adjusted automatically:  (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects;  (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles; (6) to include the effects of any acquisitions, licensing transactions, divestitures, or joint ventures; (7) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common shareholders other than regular cash dividends; (8) to exclude the effects of stock based compensation, deferred compensation and the award of bonuses; and (9) to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item such as litigation expenses and material corporate transactions such as mergers, acquisitions and divestitures that were not incorporated into the Company’s annual operating plan. If Volcano does not achieve the Threshold Goal, the STIP will not be funded and Participants will earn no bonus under the STIP. If Volcano achieves the Threshold Goal, Participants will be initially credited with their Maximum Award, which will be adjusted downward to the Actual Award as described below. 
(e)    Determination of the Actual Award; Formula. Upon the funding of the STIP and initial crediting of the Maximum Award, Volcano will determine the actual award earned by each Participant (the “Actual Award”) by reducing the Maximum Award based on (i) achievement against specific Company financial goals, as reflected by the calculation of the Financial Corporate Result, (ii) achievement against individual performance goals reflected by the calculation of the Individual Result and (iii) any other additional factors deemed appropriate by the Committee in its sole discretion. 
Specifically, each Participant’s Actual Bonus under the STIP is reduced from the Maximum Award based on the product of (1) the Participant’s Target Award, multiplied by (2) the Financial Corporate Result, multiplied by (2) the Participant’s Individual Result.  The Financial Corporate Result is the sum of the Revenue Result and the Operating Margin Result, each of which are weighted equally at 50% of the Financial Corporate Result.  The Financial Corporate Result, Revenue Result and Operating Margin Result are each expressed as a percentage not to exceed 160%.  

(f)    Financial Corporate Result. If Volcano has achieved the Threshold Goal, the Actual Award is determined by under the STIP formula approved by the Committee (and excerpted below) based on Volcano’s achievement of both (1) non-GAAP revenue (that is, GAAP revenue, adjusted in the same way as the Threshold Goal) during the Performance Period (the “Revenue Result”); and (2) non-GAAP operating margin (that is, GAAP operating margin, adjusted automatically in the same way as non-GAAP revenue, that is, each of the factors in Section 4(d)(1) through (9) above) during the Performance Period (the “Operating Margin Result”).  Volcano’s level of achievement of non-GAAP revenue is determined by reference to the target for this performance measure as set forth in the annual operating plan approved by Volcano’s Board of Directors at the beginning of the 2014 fiscal year (the “Revenue Target”).  Volcano’s level of achievement of non-GAAP operating margin is determined by reference to the target for this performance measure as set forth in the annual operating plan approved by Volcano’s Board of Directors at the beginning of the 2014 fiscal year (the “Operating Margin Target”).  
(g)    Revenue Result.  If the Revenue Result is less than 90% of the Revenue Target, the Revenue Result will be deemed to be zero.  If the Revenue Result is at least 90% of the Revenue Target, 50% of the STIP will be initially funded at the rate specified under the STIP formula approved by the Committee.  Notwithstanding the foregoing, Volcano may exercise negative discretion to reduce the Revenue Result, in its sole discretion.
(h)    Operating Margin Result.  If the Operating Margin Result is less than 54% of the Operating Margin Target, the Operating Margin Result will be deemed to be zero.  If the operating margin result is at least 54% of the Operating Margin Target, 50% of the STIP will be initially funded at the rate specified under the STIP formula approved by the Committee.  Notwithstanding the foregoing, Volcano may exercise negative discretion to reduce the Operating Margin Result, in its sole discretion.
(i)    Individual Result. The Committee, in consultation with Volcano’s Chief Executive Officer (other than with respect to his own performance), determines each Participant’s “Individual Result” multiplier (expressed as a percentage not to exceed 200%), based on the Participant’s (i) achievement of individual KFS, which are tied to Volcano’s KFS approved by the Committee in writing; and (ii) the Participant’s contributions towards the achievement of the Financial Corporate Result, in each case ((i) and (ii)) weighted in the Committee’s sole discretion.   Notwithstanding the foregoing, in no event will Any Participant’s Actual Award exceed the Maximum Award.
(j)    Additional Adjustments to Actual Awards. The Committee may, in its sole discretion, reduce a Participant’s Actual Award, based on any other factors that it considers material.
5.    Administration.
(a)    Actual Awards earned are paid on an annual basis approximately 45 to 60 days after the end of the Performance Period, but in all cases in compliance with the short term deferral exemption from Section 409A of the Code. 
(b)    Volcano reserves the right to interpret and to make changes to or withdraw the STIP at any time, subject to applicable legal requirements. All terms and conditions of the STIP are subject to compliance with applicable law. 
6.    Recoupment. Any amounts paid under the STIP will be subject to recoupment in accordance with Volcano’s Incentive Compensation Recoupment Policy and any additional clawback policy that Volcano is required to adopt pursuant to the listing standards of any national securities exchange or association on which Volcano’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. No recovery of compensation under a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any plan of or agreement with Volcano.

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886930 v2/SDVOLC 3.31.2014 10-Q Exhibit 10.4

VOLCANO CORPORATION
OFFICER CHANGE IN CONTROL SEVERANCE BENEFIT PLAN
Section 1.INTRODUCTION.
The Volcano Corporation Officer Change in Control Severance Benefit Plan (the “Plan”) is hereby established effective February 12, 2014 (the “Effective Date”).  The purpose of the Plan is to provide for the payment of severance benefits to selected officer level employees of Volcano Corporation (the “Company”) in the event that such employees become subject to involuntary or constructive employment terminations in connection with an acquisition of the Company.  This Plan document also is the Summary Plan Description for the Plan.    
For purposes of the Plan, the following terms are defined as follows:
(a)    “Affiliate” means any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act of 1933, as amended.  The Plan Administrator shall have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(b)    “Annual Base Salary” means the annualized base pay amount (excluding incentive pay, premium pay, commissions, overtime, bonuses and other forms of variable compensation) as in effect immediately prior to a Covered Termination and prior to any reduction that would give rise to an employee’s right to resign for Good Reason.
(c)    “Board” means the Board of Directors of the Company; provided, however, that if the Board has delegated authority to administer the Plan to the Compensation Committee of the Board, then “Board” shall also mean the Compensation Committee.
(d)    “Cause” means cause or misconduct as defined in the Individual Severance Arrangement as in effect on the date of termination of employment, or in the absence of any such applicable definition, any of the following with respect to the employee: (i) conviction of the employee by a court of competent jurisdiction of any felony or a crime involving moral turpitude; (ii) the employee’s knowing failure or refusal to follow reasonable instructions of the Board or reasonable policies, standards and regulations of the Company or its Affiliate; (iii) the employee’s continued failure or refusal to faithfully and diligently perform the usual, customary duties of his employment with the Company or its Affiliate; (iv) the employee’s repeatedly conducting himself or herself in an unprofessional, unethical, immoral or fraudulent manner; or (v) the employee’s conduct discredits the Company or any Affiliate or is detrimental to the reputation, character and standing of the Company or any Affiliate.  The determination whether a termination is for Cause shall be made by the Plan Administrator in its sole and exclusive judgment and discretion.   
(e)    “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(1)    any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction.  Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the 

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acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(2)    there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(3)    the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation; 
(4)    there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(5)    individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company.  Once a Change in Control has occurred, no future events shall constitute a Change in Control for purposes of the Plan.
(f)    “Closing” means the initial closing of the Change in Control as defined in the definitive agreement executed in connection with the Change in Control.  In the case of a series of transactions 

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constituting a Change in Control, “Closing” means the first closing that satisfies the threshold of the definition for a Change in Control.
(g)    “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.
(h)    “Code” means the Internal Revenue Code of 1986, as amended.
(i)    “Company” means Volcano Corporation or, following a Change in Control, the surviving Entity resulting from such event.
(j)    “Covered Period” means the period commencing ninety (90) days prior to the Closing of a Change in Control and ending twelve (12) months following the Closing of a Change in Control.
(k)    “Covered Termination” means an Involuntary Termination that occurs within the Covered Period.  For such purposes, if the events giving rise to an employee’s right to resign for Good Reason arise within the Covered Period, and the employee’s resignation occurs not later than thirty (30) days after the expiration of the Cure Period (as defined below), such termination shall be a Covered Termination.
(l)    “Director” means a member of the Board.
(m)    “Eligible Officer” means an officer of the Company that meets the requirements to be eligible to receive Plan benefits as set forth in Section 2.
(n)    “Employment Agreement” means any individual employment offer letter, contract or agreement that an Eligible Officer has with the Company.
(o)    “Entity” means a corporation, partnership, limited liability company or other entity. 
(p)    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(q)    “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
(r)     “Good Reason” means the existence of one or more of the following conditions which occur without the employee’s express written consent, provided that (i) the employee has first provided written notice to the Plan Administrator of the existence of such condition within 30 days after its initial existence, (ii) the Company has not remedied such condition within the 30 day period after the employee’s written notice is received by the Plan Administrator (the “Cure Period”), and (iii) the employee’s resignation from all positions he or she then-holds with the Company is effective not later than 30 days after expiration of the Cure Period where the Company has failed to reasonably cure the conditions:  (A) a material diminution in the employee’s base compensation; (B) a material diminution in the employee’s authority, duties, or 

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responsibilities; (C) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the employee is required to report, including a requirement that the employee report to a corporate officer or employee instead of reporting directly to the Board; (D) a material diminution in the budget over which the employee retains authority; (E) a material change in the geographic location at which the employee must perform the services; and (F) any other action or inaction that constitutes a material breach by the Company of the agreement under which the employee provides services.  
(s)    “Individual Severance Arrangement” mean any Employment Agreement providing for severance benefits to an Eligible Officer or any other severance arrangement between the Eligible Officer and the Company other than the Plan, in each case that remains in effect through the date of a Covered Termination.
(t)    “Involuntary Termination” means an employee’s termination from all positions he or she then holds with the Company, which termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h) without regard to any alternative definition thereunder), and which is due to either (i) a termination by the Company without Cause and other than as a result of death or disability or (ii) a resignation by the Participant for Good Reason.
(u)    “Own,” “Owned,” “Owner,” “Ownership” means a person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(v)    “Participation Agreement” means an agreement between an employee and the Company in substantially the form of Appendix A attached hereto, and which may include such other terms as the Board deems necessary or advisable in the administration of the Plan.  
(w)    “Plan Administrator” means the Board prior to the Closing and the Representative upon and following the Closing.
(x)    “Representative” means one or more members of the Board or other persons or Entities designated by the Board prior to or in connection with a Change in Control that will have authority to administer and interpret the Plan upon and following the Closing as provided in Section 7(a).
(y)    “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
(z)    “Target Bonus” means with respect to an employee, if there is a cash bonus plan applicable to such employee for the year in which the Covered Termination of such employee occurs, the cash bonus that would be payable to such employee under such cash bonus plan.  If the amount of bonus payable under such cash bonus plan is dependent upon the attainment of previously established performance goals, the Target Bonus amount will be determined as if all the applicable performance goals for such year were attained at a level of 100%.  If no cash bonus plan is in effect for the year in which such Covered Termination occurs, the Target Bonus Amount will be the applicable percentage of the employee’s Annual 

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Base Salary that is the same percentage of annual base salary at the rate in effect for the employee the preceding calendar year that would have been payable to the employee under any cash bonus plan in effect for the employee for the preceding calendar year as if all the applicable performance goals were attained for such preceding calendar year at a level of 100%.  If no cash bonus plan is in effect for the employee for the year in which the Covered Termination occurs or the preceding calendar year, the Target Bonus for such employee will be $0.
Section 2.    ELIGIBILITY FOR BENEFITS.
(a)    Eligible Officer.  An employee of the Company is eligible to participate in the Plan if (i) the employee is a Senior Vice President or higher level officer and has been provided a Participation Agreement by the Company; (ii) such employee has signed and returned such Participation Agreement to the Company within the period specified therein; (iii) such employee’s employment with the Company terminates due to a Covered Termination; and (iv) such employee meets the other Plan eligibility requirements set forth in this Section 2.  The determination of whether an employee is an Eligible Officer shall be made by the Plan Administrator, in its sole discretion, and such determination shall be binding and conclusive on all persons
(b)    Release Requirement.  In order to be eligible to receive benefits under the Plan, the employee also must execute a general waiver and release in substantially the form attached hereto as Exhibit A, Exhibit B or Exhibit C, as appropriate (the “Release”), within the applicable time period set forth therein, but in no event more than fifty (50) days following the date of the applicable Covered Termination, and such Release must become effective in accordance with its terms.  The Company, in its sole discretion, may modify the form of the Release to comply with applicable law.  The Release may be incorporated into a termination agreement or other agreement with the employee.   
(c)    No Duplicative Benefits Provided Under Plan.  This Plan does not supersede the terms of any Individual Severance Arrangement.  Unless otherwise determined by the Plan Administrator in its discretion, if an employee is an Eligible Officer and otherwise eligible to receive severance benefits under this Plan that are of the same category and would otherwise duplicate the benefits available under the terms of any Individual Severance Arrangement (“Duplicative Benefits”) such Eligible Officer will receive severance benefits under the Individual Severance Arrangement in lieu of any Plan benefits to the extent such benefits are Duplicative Benefits, and severance benefits will be provided under the Plan only to the extent, if any, that Plan benefits are not Duplicative Benefits.  
(d)    Exceptions to Benefit Entitlement.  An employee who otherwise is an Eligible Officer will not receive benefits under the Plan in the following circumstances, as determined by the Plan Administrator in its sole discretion:
(1)    The employee voluntarily terminates employment with the Company without Good Reason, or terminates employment due to the employee’s death or disability.  Voluntary terminations include, but are not limited to, resignation, retirement or failure to return from a leave of absence on the scheduled date.
(2)    The employee voluntarily terminates employment with the Company in order to accept employment with another entity that is wholly or partly owned (directly or indirectly) by the Company or an Affiliate.
(3)    The employee is offered immediate reemployment by a successor to the Company or an Affiliate or by a purchaser of the Company’s assets, as the case may be, following a Change 

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in Control and the terms of such reemployment would not otherwise give rise to the employee’s right to resign for Good Reason (determined as if the entity offering such reemployment were the Company).  For purposes of the foregoing, “immediate reemployment” means that the employee’s employment with the successor to the Company or an Affiliate or the purchaser of its assets, as the case may be, results in uninterrupted employment such that the employee does not incur a lapse in pay or benefits as a result of the change in ownership of the Company or the sale of its assets.
(4)    The employee is rehired by the Company or an Affiliate and recommences employment prior to the date benefits under the Plan are scheduled to commence.
Section 3.    AMOUNT OF BENEFIT.
(a)    Severance Benefit.  Benefits under the Plan shall be provided to an Eligible Officer as set forth in the Participation Agreement.
(b)    Additional Benefits.  Notwithstanding the foregoing, the Company may, in its sole discretion, provide benefits to employees who are not Eligible Officers (“Non-Eligible Employees”) chosen by the Board, in its sole discretion, and the provision of any such benefits to a Non-Eligible Employee shall in no way obligate the Company to provide such benefits to any other Non-Eligible Employee, even if similarly situated.  If benefits under the Plan are provided to a Non-Eligible Employee, references in the Plan to “Eligible Officer” (and similar references) shall be deemed to refer to such Non-Eligible Employee.
(c)    Certain Reductions.  The Company, in its sole discretion, shall have the authority to reduce an Eligible Officer’s severance benefits, in whole or in part, by pay and benefits provided during a period following written notice of a plant closing or mass layoff, pay and benefits in lieu of such notice, or other similar benefits payable to the Eligible Officer by the Company or an Affiliate that become payable in connection with the Eligible Officer’s termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act or any other similar state law, (ii) any Company policy or practice providing for the Eligible Officer to remain on the payroll for a limited period of time after being given notice of the termination of the Eligible Officer’s employment, or (iii) any other severance benefit agreement or arrangement between the Company and the Eligible Officer, and the Plan Administrator shall so construe and implement the terms of the Plan.  Any such reductions that the Company determines to make pursuant to this Section 3(c) shall be made such that any benefit under the Plan shall be reduced solely by any similar type of benefit under such legal requirement, agreement, policy or practice (i.e., any cash severance benefits under the Plan shall be reduced solely by any cash payments or severance benefits under such legal requirement, agreement, policy or practice, and any continued insurance benefits under the Plan shall be reduced solely by any continued insurance benefits under such legal requirement, agreement, policy or practice).  The Company’s decision to apply such reductions to the severance benefits of one Eligible Officer and the amount of such reductions shall in no way obligate the Company to apply the same reductions in the same amounts to the severance benefits of any other Eligible Officer, even if similarly situated.  In the Company’s sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being re-characterized as payments pursuant to the Company’s statutory obligation.
(d)    Parachute Payments.  The following provisions shall not supersede any provisions to the contrary provided under any Individual Severance Arrangement, if applicable:
(1)    Any provision of the Plan to the contrary notwithstanding, if any payment or benefit an Eligible Officer would receive from the Company pursuant to the Plan or otherwise (“Payment”) 

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would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (defined below).  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Eligible Officer’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner that results in the greatest economic benefit for the Eligible Officer.  If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata. 
(2)    In the event it is subsequently determined by the Internal Revenue Service that some portion of the Reduced Amount as determined pursuant to clause (x) in the preceding paragraph is subject to the Excise Tax, the Eligible Officer agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the Reduced Amount is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount is determined pursuant to clause (y) in the preceding paragraph, the Eligible Officer will have no obligation to return any portion of the Payment pursuant to the preceding sentence.
(3)    Unless the Eligible Officer and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder.
Section 4.    RETURN OF COMPANY PROPERTY.
An Eligible Officer will not be entitled to any severance benefit under the Plan unless and until the Eligible Officer returns all Company Property.  For this purpose, “Company Property” means all Company documents (and all copies thereof) and other Company property which the Eligible Officer had in his or her possession at any time, including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, servers), credit cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part).
Section 5.    TIME OF PAYMENT AND FORM OF BENEFIT.
The Company reserves the right in the Participation Agreement to specify whether severance payments under the Plan will be paid in a single sum, in installments, or in any other form and to determine the timing of such payments.  All such payments under the Plan will be subject to applicable withholding for federal, state and local taxes.  If an Eligible Officer is indebted to the Company on his or her termination date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness.  All severance benefits provided under the Plan are intended to satisfy the requirements for 

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an exemption from application of Section 409A of the Code to the maximum extent that an exemption is available and any ambiguities herein shall be interpreted accordingly.
Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under the Plan that constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with an Eligible Officer’s termination of employment unless and until the Eligible Officer has also incurred a “separation from service,” as such term is defined in Treasury Regulations Section 1.409A-1(h) (“Separation from Service”), unless the Company reasonably determines that such amounts may be provided to the Eligible Officer without causing the Eligible Officer to incur the adverse personal tax consequences under Section 409A.
It is intended that (i) each installment of any benefits payable under the Plan to an Eligible Officer be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i), (ii) all payments of any such benefits under the Plan satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (iii) any such benefits consisting of COBRA premiums also satisfy, to the greatest extent possible, the exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v).  However, if the Company determines that any such benefits payable under the Plan constitute “deferred compensation” under Section 409A and the Eligible Officer is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the imposition of the adverse personal tax consequences under Section 409A, (A) the timing of such benefit payments shall be delayed until the earlier of (1) the date that is six (6) months and one (1) day after the Eligible Officer’s Separation from Service and (2) the date of the Eligible Officer’s death (such applicable date, the “Delayed Initial Payment Date”), and (B) the Company shall (1) pay the Eligible Officer a lump sum amount equal to the sum of the benefit payments that the Eligible Officer would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the benefits had not been delayed pursuant to this paragraph and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.
In no event shall payment of any benefits under the Plan be made prior to an Eligible Officer’s termination date or prior to the effective date of the Release.  If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, and the Eligible Officer’s Separation from Service occurs at a time during the calendar year when the Release could become effective in the calendar year following the calendar year in which the Eligible Officer’s Separation from Service occurs, then regardless of when the Release is returned to the Company and becomes effective, the Release will not be deemed effective any earlier than the latest permitted effective date (the “Release Deadline”).  If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, then except to the extent that payments may be delayed until the Delayed Initial Payment Date pursuant to the preceding paragraph, on the first regular payroll date following the effective date of an Eligible Officer’s Release, the Company shall (1) pay the Eligible Officer a lump sum amount equal to the sum of the benefit payments that the Eligible Officer would otherwise have received through such payroll date but for the delay in payment related to the effectiveness of the Release and (2) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.
Section 6.    REEMPLOYMENT.  

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In the event of an Eligible Officer’s reemployment by the Company during the period of time in respect of which severance benefits pursuant to the Plan have been paid, the Company, in its sole and absolute discretion, may require such Eligible Officer to repay to the Company all or a portion of such severance benefits as a condition of reemployment.  
Section 7.    RIGHT TO INTERPRET AND ADMINISTER PLAN; AMENDMENT AND TERMINATION.
(a)    Interpretation and Administration.  Prior to the Closing, the Board shall be the Plan Administrator and shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan.  The rules, interpretations, computations and other actions of the Board shall be binding and conclusive on all persons.  Upon and after the Closing, the Plan will be interpreted and administered in good faith by the Representative who shall be the Plan Administrator during such period.  All actions taken by the Representative in interpreting the terms of the Plan and administering the Plan upon and after the Closing will be final and binding on all Eligible Officers.  Any references in this Plan to the “Board” or “Plan Administrator” with respect to periods following the Closing shall mean the Representative.
(b)    Amendment.  The Plan Administrator reserves the right to amend this Plan at any time in its discretion; provided, however, that any amendment of the Plan that would adversely affect a particular employee will not be effective as to such employee without his or her written consent if at the time of such amendment: (i) such employee previously has been terminated in a Covered Termination, and (ii) the employee has an effective Participation Agreement.  
(c)    Termination.  The Plan will automatically terminate following satisfaction of all the Company’s obligations under the Plan.  The Plan may be earlier terminated at any time at the discretion of the Plan Administrator, provided, however, that no such discretionary termination by the Plan Administrator may be implemented with respect to any employee without his or her written consent if at such time:  (i) the employee previously has been terminated in a Covered Termination and (ii) the employee has an effective Participation Agreement. 
Section 8.    NO IMPLIED EMPLOYMENT CONTRACT.
The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause, which right is hereby reserved.
Section 9.    LEGAL CONSTRUCTION.
This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of California.
Section 10.    CLAIMS, INQUIRIES AND APPEALS. 
(a)    Applications for Benefits and Inquiries.  Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan 

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Administrator in writing by an applicant (or his or her authorized representative).  The Plan Administrator is:
Volcano Corporation
Board of Directors
3721 Valley Center Drive, Suite 500
San Diego, CA 92130

(b)    Denial of Claims.  In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial.  Any electronic notice will comply with the regulations of the U.S. Department of Labor.  The notice of denial will be set forth in a manner designed to be understood by the applicant and will include the following:
(1)    the specific reason or reasons for the denial;
(2)    references to the specific Plan provisions upon which the denial is based;
(3)    a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and
(4)    an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described in Section 10(d) below.
This notice of denial will be given to the applicant within ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional ninety (90) days for processing the application.  If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.
This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application.  
(c)    Request for a Review.  Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within sixty (60) days after the application is denied.  A request for a review shall be in writing and shall be addressed to:
Volcano Corporation
Board of Directors
3721 Valley Center Drive, Suite 500
San Diego, CA 92130
A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent.  The applicant (or his or her representative) shall have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records, and other information relating to his or her claim.  The applicant (or his or her representative) shall be provided, upon request and free of charge, reasonable 

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access to, and copies of, all documents, records and other information relevant to his or her claim.  The review shall take into account all comments, documents, records and other information submitted by the applicant (or his or her representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
(d)    Decision on Review.  The Plan Administrator will act on each request for review within sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review.  If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period.  This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the review.  The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor.  In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will set forth, in a manner calculated to be understood by the applicant, the following:
(1)    the specific reason or reasons for the denial;
(2)    references to the specific Plan provisions upon which the denial is based;
(3)    a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim; and
(4)    a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA. 
(e)    Rules and Procedures.  The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims.  The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.
(f)    Exhaustion of Remedies.  No legal action for benefits under the Plan may be brought until the applicant (i) has submitted a written application for benefits in accordance with the procedures described by Section 10(a) above, (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 10(c) above, and (iv) has been notified that the Plan Administrator has denied the appeal.  Notwithstanding the foregoing, if the Plan Administrator does not respond to an Eligible Officer’s claim or appeal within the relevant time limits specified in this Section 10, the Eligible Officer may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA.  
Section 11.    BASIS OF PAYMENTS TO AND FROM PLAN.
The Plan shall be unfunded, and all cash payments under the Plan shall be paid only from the general assets of the Company.
Section 12.    OTHER PLAN INFORMATION.
(a)    Employer and Plan Identification Numbers.  The Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal 

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Revenue Service is 33-0928885.  The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is 510.
(b)    Ending Date for Plan’s Fiscal Year.  The date of the end of the fiscal year for the purpose of maintaining the Plan’s records is December 31.
(c)    Agent for the Service of Legal Process.  The agent for the service of legal process with respect to the Plan is:
Volcano Corporation
3721 Valley Center Drive, Suite 500
San Diego, CA 92130

In addition, service of legal process may be made upon the Plan Administrator. 
(d)    Plan Sponsor.  The “Plan Sponsor” is:
Volcano Corporation
3721 Valley Center Drive, Suite 500
San Diego, CA 92130
(800) 228-4728 

(e)    Plan Administrator.  The Plan Administrator is the Board prior to the Closing and the Representative upon and following the Closing.  The Plan Administrator’s contact information is:
Volcano Corporation
Board of Directors or Representative
3721 Valley Center Drive, Suite 500
San Diego, CA 92130
(800) 228-4728

The Plan Administrator is the named fiduciary charged with the responsibility for administering the Plan.
Section 13.    STATEMENT OF ERISA RIGHTS.
Participants in this Plan (which is a welfare benefit plan sponsored by Volcano Corporation) are entitled to certain rights and protections under ERISA.  If you are an Eligible Officer, you are considered a participant in the Plan and, under ERISA, you are entitled to:
(a)    Receive Information About Your Plan and Benefits
(1)    Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series), if applicable, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration;
(2)    Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series), if applicable, and an updated (as necessary) Summary Plan Description.  The Plan Administrator may make a reasonable charge for the copies; and

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(3)    Receive a summary of the Plan’s annual financial report, if applicable.  The Plan Administrator is required by law to furnish each Eligible Officer with a copy of this summary annual report.
(b)    Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Eligible Officers, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Eligible Officers and beneficiaries.  No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under ERISA.
(c)    Enforce Your Rights.  If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request a copy of Plan documents or the latest annual report from the Plan, if applicable, and do not receive them within thirty (30) days, you may file suit in a Federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.
If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court.
If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court.  The court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
(d)    Assistance with Your Questions.  If you have any questions about the Plan, you should contact the Plan Administrator.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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APPENDIX A
VOLCANO CORPORATION 
OFFICER CHANGE IN CONTROL SEVERANCE BENEFIT PLAN 
PARTICIPATION AGREEMENT 
Name:      ___________________
Section 1.    ELIGIBILITY.  
You have been designated as eligible to participate in the Volcano Corporation Officer Change in Control Severance Benefit Plan (the “Plan”), a copy of which is attached as EXHIBIT A to this Participation Agreement (the “Agreement”).  Capitalized terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.
Section 2.    SEVERANCE BENEFITS   
Subject to the terms of the Plan, if you are terminated in a Covered Termination, and meet all the other eligibility requirements set forth in the Plan, including, without limitation, executing the required Release within the applicable time period set forth therein and provided that such Release becomes effective in accordance with its terms, you will receive the severance benefits set forth in this Section 2. Notwithstanding the schedule for provision of severance benefits as set forth below, the provision of any severance benefits under this Section 2 is subject to any delay in payment that may be required under Section 5 of the Plan.
(a)    Base Compensation Severance Benefit.  You will be entitled to receive a single lump sum cash payment equal to (1) one hundred percent (100%) of your Annual Base Salary plus (2) one hundred percent (100%) of your Target Bonus (the sum of (1) and (2), the “Base Compensation Severance Benefit”).  The Base Compensation Severance Benefit will be payable to you within ten (10) business days following the later of (i) the effective date of your Release, or (ii) the effective date of the Closing.  
(b)    Accelerated Vesting of Stock Awards.  
(1)    Effective as of the later of the effective date of your Release or the effective date of the Closing, to the extent not previously vested: (i) the vesting and exercisability of all outstanding stock options to purchase the Company’s common stock that are held by you on such date shall be accelerated in full, (ii) any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to any other stock award granted to you by the Company shall lapse in full, and (iii) the vesting of any other stock awards granted to you by the Company, and any issuance of shares triggered by the vesting of such stock awards, shall be accelerated in full.  Notwithstanding the foregoing, this Section 2(b) shall not apply to stock awards issued under or held in any Qualified Plan.  
(2)    In order to give effect to the intent of the foregoing provision, notwithstanding anything to the contrary set forth in your stock award agreements or the applicable equity incentive plan under which such stock award was granted that provides that any then unvested portion of your award will immediately expire upon your termination of service, no unvested portion of your stock award shall generally terminate any earlier than ninety (90) days following any Involuntary Termination of your employment that occurs prior to a Closing; provided, however that after giving effect to the vesting 

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acceleration provisions set forth above, your stock awards shall remain subject to earlier termination in connection with a “Corporate Transaction” in which your stock award is not assumed, substituted or continued by the acquiring of surviving entity as provided in the Equity Plan or substantially equivalent provisions applicable to your stock award.
(c)    Payment of Continued Group Health Plan Benefits.  
(1)    If you timely elect continued group health plan continuation coverage under COBRA the Company shall pay the full amount of your COBRA premiums, or shall provide coverage under any self-funded plan, on behalf of you for your continued coverage under the Company’s group health plans, including coverage for your eligible dependents, for twelve (12) months following your Covered Termination (the “COBRA Payment Period”).  Upon the conclusion of such period of insurance premium payments made by the Company, or the provision of coverage under a self-funded group health plan, you will be responsible for the entire payment of premiums (or payment for the cost of coverage) required under COBRA for the duration of your eligible COBRA coverage period.  For purposes of this Section, (i) references to COBRA shall be deemed to refer also to analogous provisions of state law and (ii) any applicable insurance premiums that are paid by the Company shall not include any amounts payable by you under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are your sole responsibility.
(2)    Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums on the your behalf, the Company will instead pay you on the last day of each remaining month of the COBRA Payment Period a fully taxable cash payment equal to the COBRA premium for that month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to your election of COBRA coverage or payment of COBRA premiums and without regard to your continued eligibility for COBRA coverage during the COBRA Payment Period.  Such Special Severance Payment shall end upon expiration of the COBRA Payment Period.
Section 3.    DEFINITIONS.
(a)    “Equity Plan” means the Company’s Amended and Restated 2005 Equity Compensation Plan or any successor or other equity incentive plan adopted by the Company which govern your stock awards, as applicable.
(b)    “Qualified Plan” means a plan sponsored by the Company or an Affiliate that is intended to be qualified under Section 401(a) of the Internal Revenue Code.
Section 4.    ACKNOWLEDGEMENTS.  
As a condition to participation in the Plan, you hereby acknowledge each of the following:

(a)    The severance benefits that may be provided to you under this Agreement are subject to certain reductions under Section 3 of the Plan.
(b)    This Agreement and the Plan supersedes any severance benefit plan, policy or practice previously maintained by the Company that may have been applicable to you.  Notwithstanding the foregoing, this Agreement and the Plan do not supersede your Individual Severance Arrangement, if applicable.

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(c)    The severance benefits that may be provided to you under this Agreement may be reduced by the severance benefits provided to you under your Individual Severance Arrangement, if applicable, as further specified in Section 2(c) of the Plan.

To accept the terms of this Agreement and participate in the Plan, please sign and date this Agreement in the space provided below and return it to _____________________ no later than _________, ________.  

Volcano Corporation

By:     

Title:                

                            
[Eligible Officer]    Date

EXHIBIT A
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the Volcano Corporation Officer Change in Control Severance Benefit Plan (the “Plan”).
I understand that this Release Agreement (the “Release”), together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company, affiliates of the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company or an affiliate of the Company that is not expressly stated therein.  Certain capitalized terms used in this Release are defined in the Plan.
I hereby confirm my obligations under my proprietary information and inventions agreement with the Company and/or an affiliate of the Company.
In consideration of the severance benefits and other consideration provided to me under the Plan that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and their current and former partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, successors, insurers, affiliates and assigns, from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date I sign this Release (collectively, the “Released Claims”).  The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to my employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership, equity, or profits interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended) (“ADEA”), and the federal Employee Retirement Income Security Act of 1974 (as amended).
Notwithstanding the foregoing, I understand that the following rights or claims are not included in the Released Claims: (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; or (b) any rights that cannot be waived as a matter of law.  In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or any other government agency, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding.  I hereby represent and warrant that, other than the claims identified in this paragraph, I am not aware of any claims I have or might have that are not included in the Released Claims.
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given under the Plan for the waiver and release in this paragraph is in addition to anything of value to which I was already entitled.  I further acknowledge that I have been advised by this writing, as required by the ADEA, that:  (a) my waiver and release do not apply to any rights or claims that may arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not do so); (c) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign this Release earlier); (d) I have seven (7) days following the date I sign this Release to revoke the Release by providing written notice to an officer of the Company; and (e) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after I sign this Release provided I have not revoked it.
I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.
I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than twenty-one (21) days following the date it is provided to me or such other date as specified by the Company.
ELIGIBLE OFFICER
Printed Name:    
Signature:     
Date:    

EXHIBIT B
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the Volcano Corporation Officer Change in Control Severance Benefit Plan (the “Plan”).
I understand that this Release Agreement (the “Release”), together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company, affiliates of the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company or an affiliate of the Company that is not expressly stated therein.  Certain capitalized terms used in this Release are defined in the Plan.
I hereby confirm my obligations under my proprietary information and inventions agreement with the Company and/or an affiliate of the Company.
In consideration of the severance benefits and other consideration provided to me under the Plan that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and its and their current and former partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, successors, insurers, affiliates and assigns, from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date I sign this Release (collectively, the “Released Claims”).  The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to my employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership, equity, or profits interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act (as amended) (“ADEA”), and the federal Employee Retirement Income Security Act of 1974 (as amended).  
Notwithstanding the foregoing, I understand that the following rights or claims are not included in the Released Claims: (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; or (b) any rights that cannot be waived as a matter of law.  In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or any other government agency, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding.  I hereby represent and warrant that, other than the claims identified in this paragraph, I am not aware of any claims I have or might have that are not included in the Released Claims.
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that the consideration given under the Plan for the waiver and release in this paragraph is in addition to anything of value to which I was already entitled.  I further acknowledge that I have been advised by this writing, as required by the ADEA, that:  (a) my waiver and release do not apply to any rights or claims that may arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do so); (c) I have forty-five (45) days to consider this Release (although I may choose voluntarily to sign this Release earlier); (d) I have seven (7) days following the date I sign this Release to revoke the Release by providing written notice to an office of the Company; (e) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after I sign this Release provided I have not revoked it; and (f) I have received with this Release all of the information required by the ADEA, including without limitation a detailed list of the job titles and ages of all employees who were terminated in this group termination and the ages of all employees of the Company in the same job classification or organizational unit who were not terminated.
I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.
I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than forty-five (45) days following the date it is provided to me or such other date as specified by the Company.
ELIGIBLE OFFICER
Printed Name:    
Signature:     
Date:    

EXHIBIT C
RELEASE AGREEMENT
I understand and agree completely to the terms set forth in the Volcano Corporation Officer Change in Control Severance Benefit Plan (the “Plan”).
I understand that this Release Agreement (the “Release”), together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company, affiliates of the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company or an affiliate of the Company that is not expressly stated therein.  Certain capitalized terms used in this Release are defined in the Plan.
I hereby confirm my obligations under my proprietary information and inventions agreement with the Company and/or an affiliate of the Company.
In consideration of the severance benefits and other consideration provided to me under the Plan that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its affiliates, and their parents, subsidiaries, successors, predecessors and affiliates, and its and their current and former partners, members, directors, officers, employees, stockholders, shareholders, agents, attorneys, predecessors, successors, insurers, affiliates and assigns, from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date I sign this Release (collectively, the “Released Claims”).  The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to my employment with the Company and its affiliates, or their affiliates, or the termination of that employment; (b) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership, equity, or profits interests in the Company and its affiliates, or their affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), and the federal Employee Retirement Income Security Act of 1974 (as amended).  
Notwithstanding the foregoing, I understand that the following rights or claims are not included in the Released Claims: (a) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company or its affiliate to which I am a party; the charter, bylaws, or operating agreements of the Company or its affiliate; or under applicable law; or (b) any rights that cannot be waived as a matter of law.  In addition, I understand that nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor or any other government agency, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding.  I hereby represent and warrant that, other than the claims identified in this paragraph, I am not aware of any claims I have or might have that are not included in the Released Claims.
I hereby represent that I have been paid all compensation owed and for all hours worked; I have received all the leave and leave benefits and protections for which I am eligible pursuant to the Family and Medical Leave Act or otherwise; and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.
I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than fourteen (14) days following the date it is provided to me or such other date as specified by the Company.
ELIGIBLE OFFICER
Printed Name:    
Signature:     
Date:    

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840151 v4/SD

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