UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

February 6, 2008 (January 31, 2008)

VNUS Medical Technologies, Inc.

Delaware		000-50988		94-3216535
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01 Entry into a Material Definitive Agreement

Item 5.02(e) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

     Cash Bonus for Performance in 2007

     On January 31, 2008, the Compensation Committee approved the following cash bonus payments to executive officers for achieving performance during 2007 of goals that were established by the Compensation Committee in January 2007, or, in the case of Messrs. Franklin and Kamdar, after they joined the Company, and in the case of Mr. Saxton after he was promoted to Vice President of U.S. Sales. The cash bonus plan for 2007 consisted of payment of a percentage of earned base salary, based on achievement of target revenue goals, key corporate activity goals, operating profit objectives and officer-specific goals.

Executive Officer		Title		Bonus
Brian E. Farley		President and Chief Executive Officer		$	212,196
Lian X. Cunningham		Medical Director and Vice President, Clinical Research		$	60,821
Bill Franklin		Vice President, Regulatory Affairs and Quality Assurance		$	49,302
Kirti Kamdar		Senior Vice President, Research & Development		$	5,494
Mohan Sancheti		Vice President, Manufacturing		$	61,455
Mark Saxton (1)		Vice President, U.S. Sales		$	154,464

     Vesting of Restricted Stock Unit Awards

     On February 13, 2007, the Compensation Committee approved awards of 10,000 restricted stock units under the Company’s Amended and Restated 2000 Equity Incentive Plan to Mohan Sancheti, Vice President of Manufacturing, and an award of 30,000 restricted stock units to the President and CEO, Brian Farley. On May 18, 2007, the Compensation Committee approved the award of 7,500 restricted stock units under the Company’s Amended and Restated 2000 Equity Incentive Plan to Mark Saxton, Vice President of U.S. Sales.

     The vesting of each award was contingent upon the attainment during 2007 of the Company’s 2007 revenue and profit goals, as well as certain individual performance goals for each executive officer. If the Compensation Committee determined that these goals were met during 2007, the restricted stock unit award would vest 25% on January 1, 2008, with an additional 25% vesting each January 1^st, for the next three years subject to continued employment by the Company. On January 31, 2008, the Compensation Committee determined that Messrs. Farley, Sancheti, and Saxton had met the goals set forth in their restricted stock unit awards, so that the awards of Messrs. Farley, Sancheti, and Saxton will vest as set forth above.

     Annual Base Salary

     On January 31, 2008, the Compensation Committee completed its annual performance and compensation review of the Company’s executive officers. The Compensation Committee approved changes in the base salaries of the Chief Executive Officer and the four next most highly compensated executive officers of the Company (the “Named Executive Officers”), effective as of January 1, 2008, as follows:

				New Base
Executive Officer		Title		Compensation
Brian E. Farley		President and Chief Executive Officer		$	421,200
Peter Osborne (2)		Chief Financial Officer and Vice President, Finance and Administration		$	280,000
Kirti Kamdar		Senior Vice President, Research & Development		$	255,000
Mohan Sancheti		Vice President, Manufacturing		$	225,234
Mark Saxton (1)		Vice President, U.S. Sales		$	187,250

     Performance-Based Cash Bonus Plan for 2008

     On January 31, 2008, the Compensation Committee also approved performance-based cash bonus plans for the Named Executive Officers. The bonus plans are summarized below:

Officer Employees (Except Chief Executive Officer and Vice President of U.S. Sales):

		Percent of Base
Quarterly Target Revenue		Salary Paid in Year
85%			0%
100%			16%

Annual Target Revenue
85%			0%
100%			4%
120% and above		additional 3%

     If the actual results for any one or more of the performance measures falls between the performance levels shown above, the bonus will be prorated accordingly. For example, for every 1% of annual target revenue achieved over 100% of annual target revenue, the officer’s total bonus will be increased by 0.15% of their earned base salary, capped at 3%.

		Percent of Base
Other Performance Criteria		Salary Paid in Year
Achieve Key Corporate Activity Goals (1)			2	%
Achieving Profitability Goals			12	%
Achieve Officer-Specific Goals			6	%

     An additional 2.0% bonus can be achieved for operating profitability at two times the annual plan target level.

     The target cash bonus opportunity for officer employees (except the Chief Executive Officer and the Vice President of U.S. Sales) is 40% of earned base salary, with an overachievement opportunity of 5%.

Vice President of U.S. Sales:

Quarterly Target Revenue		Bonus Dollars
100%		$28,000/Quarter

     For quarterly target revenue measures, the bonus will increase by 2.5% for every 1% over plan. For every 1% under plan, the bonus will be decreased by 2.5%. The overachievement plan is not capped for the Vice President of U.S. Sales.

Annual Target Revenue		Bonus Dollars
100%		$	10,000

Other Performance Criteria		Bonus Dollars
Achieving Quarterly and Annual Profitability Goals		$7,000/Period

     An additional 2.0% bonus can be achieved for operating profitability at two times the annual plan target level.

     The target cash bonus opportunity for the Vice President of U.S. Sales is $150,000, with an opportunity for an overachievement based on U.S. revenues and up to an additional of 2% of base salary based on operating profitability.

President and Chief Executive Officer:

		Percent of Base
Quarterly Target Revenue		Salary Paid in Year
85% 100%		0% 28%

Annual Target Revenue
85%			0%
100%			7%
120% and above		additional 3%

     If the actual results for any one or more of the performance measures falls between the performance levels shown above, the bonus will be prorated accordingly. For example, for every 1% of annual target revenue achieved over 100% of annual target revenue, the officer’s total bonus will be increased by 0.15% of their earned base salary, capped at 3%.

		Percent of Base
Other Performance Criteria		Salary Paid in Year
Achieve Key Corporate Activity Goals (1)			4	%
Achieving Profitability Goals			20	%
Achieve Officer-Specific Goals			6	%

An additional 2.0% bonus can be achieved for operating profitability at two times the annual plan target level.

     The target cash bonus opportunity for the President and Chief Executive Officer is 65% of earned base salary, with an overachievement opportunity of 5%.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 6, 2008

		VNUS MEDICAL TECHNOLOGIES, INC.
		By:		/s/ Cindee Van Vleck
		Name:		Cindee Van Vleck
		Title:		Director of Human Resources
				& Acting Corporate Secretary