Plan of Compensation for Outside Directors (Adopted on October 31, 2006)

EX-10.10 2 dex1010.htm PLAN OF COMPENSATION FOR OUTSIDE DIRECTORS Plan of Compensation for Outside Directors

Exhibit 10.10

Plan of Compensation for Outside Directors

(Adopted on October 31, 2006)

Annual Compensation


Annual compensation		$100,000

		This amount will be reviewed and updated annually based on informal surveys of outside director compensation.

Conversion to option		Subject to the election by an eligible director to receive up to 50% of his annual compensation in cash (see “Minimum Ownership Requirements—Eligibility for cash payment,” below), the normal form of payment of a director’s annual compensation will be a stock option reflecting a conversion of the cash compensation. This option will be granted at the annual meeting of stockholders each year.

Number of shares		The option will be for a number of shares equal to the quotient obtained by dividing (i) 2 times the amount of cash compensation to be converted into an option by (ii) the average closing price of Ventana stock during the period from the prior year’s annual meeting through the last trading day before the current annual meeting.

Exercise price		The exercise price of the option will be the closing price on the day of the annual meeting.

Vesting		The option will vest in 12 equal monthly installments starting the first day of the month after the annual meeting when the award was made.

Cash payment		Any portion of a director’s annual compensation that he elects to receive in cash will be paid in 12 equal monthly installments on the same days that the option vests.

Minimum Ownership Requirements

Minimum ownership		All directors will be required to hold a minimum position in Ventana stock as follows –

		• $50,000 after 1 year of tenure



		• $150,000 after 2 years of tenure • $300,000 after 3 years of tenure • $400,000 after 4 years of tenure • $500,000 after 5 years of tenure

Measurement		A director’s ownership position will be measured by the value of the Ventana stock that he directly or indirectly owns and the in-the-money value of the Ventana stock options that he holds.

Eligibility for cash payment		A director who satisfies the minimum ownership requirement may elect to receive up to 50% of his annual compensation in cash. A director who does not satisfy the minimum ownership requirement must receive his annual compensation in the normal form of payment as a stock option.

Restriction on sale of stock		A director who does not satisfy the applicable minimum ownership requirement may not sell any Ventana stock, with one exception: the director may engage in a “cashless” exercise of an option and sell a number of shares sufficient to pay the exercise price of the option shares and the related taxes.

Meeting and Other Fees

Meeting fees		Directors will not be paid separate fees for attending meetings of the Board of Directors or its committees.

Chairman and Vice Chairman		Additional fees may be paid to the Chairman of the Board and/or the Vice Chairman of the Board on an annual basis at the discretion of the Compensation Committee of the Board.

		Any such fees paid will be paid by adding them to and treating them as a part of the Chairman’s or Vice Chairman’s annual compensation as a director, with the effect of making 50% of the fee eligible to be received in cash (if the Chairman and/or Vice Chairman satisfy the applicable minimum ownership requirement) and converting the balance of the fee (or the entire fee, if the Chairman and/or Vice Chairman does not satisfy the minimum ownership requirement) into an option.



Audit Committee		The chairman of the Audit Committee will be paid a fee of $10,000 per year for his service as chairman.

		This fee will be paid by adding it to and treating it as a part of the chairman’s annual compensation as a director, with the effect of making 50% of the fee eligible to be received in cash (if the chairman satisfies the applicable minimum ownership requirement) and converting the balance of the fee (or the entire fee, if the chairman does not satisfy the minimum ownership requirement) into an option.

		This fee will be reviewed and updated annually based on informal surveys of outside director compensation.

Compensation Committee		The chairman of the Compensation Committee will be paid a fee of $5,000 per year for his service as chairman.

		This fee will be paid by adding it to and treating it as a part of the chairman’s annual compensation as a director, with the effect of making 50% of the fee eligible to be received in cash (if the chairman satisfies the applicable minimum ownership requirement) and converting the balance of the fee (or the entire fee, if the chairman does not satisfy the minimum ownership requirement) into an option.

		This fee will be reviewed and updated annually based on informal surveys of outside director compensation.

Option Grants to New Director

Joining grant		A new director will receive two stock options upon joining the Board.

		The first option, for joining the Board, will be for a number of shares equal to the quotient obtained by dividing (i) 4 times the amount of the directors’ current cash compensation ($100,000) by (ii) the average closing price of Ventana stock during the 12-month period ending on the last trading day before the director’s election to the Board. The exercise price of



		the option will be the closing price on the day of the director’s election.

		Forty percent (40%) of the option shares will cliff vest 2 years after the new director’s election to the Board and the balance will vest at the rate of 1.67% per month thereafter until fully vested.

Annual grant		The new director will also receive an option reflecting his annual compensation as a director.

		The option will be for a number of shares equal to a pro rata portion of the quotient obtained by dividing (i) 2 times the amount of the directors’ current cash compensation ($100,000) by (ii) the average closing price of Ventana stock during the 12-month period ending on the last trading day immediately before the director’s election to the Board. The exercise price of the option will be the closing price on the day of the director’s election, and the option will vest on the day of the next annual meeting of stockholders.

		The pro rata portion means a fraction, the numerator of which is the number of months until the next annual meeting of stockholders and the denominator of which is 12.

Implementation

Procedures		Subject to the approval of the Compensation Committee, Ventana will establish appropriate procedures to implement these compensation terms.

Effective dates		This plan shall take effect immediately. The first annual grant under this plan will be made at the 2007 annual meeting of stockholders.