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 20, 2007 (February 13, 2007)

Date of Report (Date of earliest event reported)

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

     On February 13, 2007, the Compensation Committee of VNUS Medical Technologies, Inc. (the “Company”) completed its annual performance and compensation review of the Company’s executive officers. The following is a description of the compensation arrangements that were approved.

     Annual Base Salary

     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, 2007, as follows:

				New Base
Executive Officer		Title		Compensation
Brian E. Farley		President and Chief Executive Officer		$360,000
Timothy A. Marcotte		Chief Financial Officer and Vice President, Finance and Administration		$232,141
Scott H. Cramer (1)		Senior Vice President, U.S. Sales and Account Services		$215,270
Charlene A. Friedman		Vice President, General Counsel and Secretary		$237,179
Dennis Rosenberg		Vice President, Marketing and International Sales		$217,300

Cash Bonus Plan for 2007

     On February 13, 2007, the Compensation Committee also approved bonus plans for the Named Executive Officers, and the other officers of the Company. The bonus plans are summarized below:

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

		Percent of Year End
Quarterly Target Revenue		Base Salary
85%			0	%
100%			14	%

Annual Target Revenue
85%			0	%
100%			6	%
120% and above			additional 5	%

     If 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 .25% of his of her year end base salary.

		Percent of Year End Base
Other Performance Criteria		Salary
Achieve Key Corporate Activity Goals(1)			2	%
Achieve Operating Profit Goal			7	%
Achieve Officer-Specific Goals			6	%

     The total bonus opportunity for officer employees (except the Chief Executive Officer and the Senior Vice President of U.S. Sales) is 40% of year end base salary.

Senior Vice President of U.S. Sales:

Quarterly Target Revenue		Bonus
85%		$ 0
100%		$20,000/quarter

For quarterly target revenue measures, the bonus will increase by 2% for every 1% over the target revenue, and bonus will decrease by 6.7% for every 1% below target revenue. The overachievement bonus opportunity for the Senior Vice President of U.S. Sales is not capped.

Other Performance Criteria		Bonus
Achieve Quarterly Operating Profit Goal			$3,000/quarter
Achieve Officer-Specific Goals			6% of base salary
Achieve Annual Revenue Goal			$13,000

Chief Executive Officer:

Annual Target Revenue		Percent of Year End Base Salary
85%			0	%
100%			32	%
120% and above			additional 5	%

     If 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 between 85% and 100% of annual target revenue, the Chief Executive Officer’s total bonus will be increased by 2.13% of his year end base salary.

Other Performance Criteria		Percent of Year End Base Salary
Achieve Key Corporate Activity Goals			6	%
Achieve Operating Profit Goal			14	%
Achieve Departmental and Officer Specific Goals			8	%

The Compensation Committee also provided for an additional 5% of base salary bonus opportunity for successful completion of a materially beneficial business development agreement.

The total bonus opportunity for the Chief Executive Officer is 70% of his year end base salary.

Equity Incentive Grants

     On February 13, 2007, the Compensation Committee approved the award of the following incentive stock options and restricted stock units to the Named Executive Officers:

		Number of Shares of Common
		Stock Underlying Incentive Stock		Number of Restricted		Number of Performance Based
Executive Officer		Option(1)		Stock Units(2)		Restricted Stock Units (3)
Brian E. Farley		11,667		7,700		30,000
Timothy A. Marcotte		4,667		3,080		10,000
Scott H. Cramer		3,500		2,310		10,000
Charlene A. Friedman		4,667		3,080		10,000
Dennis Rosenberg		3,500		3,210		10,000

     All of the foregoing incentive stock options and restricted stock units were awarded pursuant to the VNUS Medical Technologies, Inc. Amended and Restated 2000 Equity Incentive Plan.

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 20, 2007

		VNUS MEDICAL TECHNOLOGIES, INC.
		By:		/s/ CHARLENE A. FRIEDMAN
		Name:		Charlene A. Friedman
		Title:		Vice President, General Counsel and Secretary