Exhibit 10.54

August 30, 2007

Theresa L. Dadone

RE:               EMPLOYMENT TERMS AND OFFER OF EMPLOYMENT

Dear Theresa,

1.                         Accuray Incorporated (the “Company”) is pleased to
extend this offer of employment as Senior Vice President, Human Resources of the
Company on the terms and conditions set forth in this letter, effective as of
July 2, 2007 (the “Effective Date”).  This letter agreement amends and restates
your original Employment Terms and Offer of Employment letter dated June 18,
2007 (the “Original Offer Letter”).

2.                         TERM.  The employment relationship between you and
the Company will be at-will.  You and the Company will have the right to
terminate the employment relationship at any time and for any reason whatsoever,
with or without cause, and without any liability or obligation except as may be
expressly provided herein.

3.                         POSITION, DUTIES AND RESPONSIBILITIES.  During the
period of the employment relationship between you and the Company (the “Term”),
the Company will employ you, and you agree to be employed by the Company, as
Senior Vice President, Human Resources of the Company.  In the capacity of
Senior Vice President, Human Resources, you will have such duties and
responsibilities as are normally associated with such position and will devote
your full business time and attention serving the Company in such position. 
Your duties may be changed from time to time by the Company, consistent with
your position.  You will dual line report to the Chief Executive Officer (the
“CEO”) and the Chief Financial Officer (the “CFO”) of the Company, and will work
full-time at our principal offices located at 1310 Chesapeake Terrace,
Sunnyvale, California 94089 (or such other location in the greater San Jose area
as the Company may utilize as its principal offices), except for travel to other
locations as may be necessary to fulfill your responsibilities.

4.                         BASE COMPENSATION.  During the Term, the Company will
pay you a base salary of $235,000 per year, less payroll deductions and all
required withholdings, payable in accordance with the Company’s normal payroll
practices and prorated for any partial month of employment.  Your base salary
may be subject to increase pursuant to the Company’s policies as in effect from
time to time.

5.                         ANNUAL BONUS.  In addition to the base salary set
forth above, during the Term, you will be eligible to participate in the
Company’s executive bonus plan applicable to similarly situated executives of
the Company.  The amount of your annual bonus will be based on the attainment of
performance criteria established and evaluated by the Company in accordance

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with the terms of such bonus plan as in effect from time to time, provided that,
subject to the terms of such bonus plan, your target (but not necessarily
maximum) annual bonus shall be 40% of your base salary actually paid for such
year.

6.                         STOCK OPTIONS.  As an added incentive, we will
recommend to the Compensation Committee of the Board of Directors that you be
granted an option (the “Option”) to purchase 65,000 shares of Accuray common
stock at a per share exercise price equal to the fair market value of a share of
our common stock on the date of the grant, as determined in accordance with the
Accuray Incorporated 2007 Incentive Award Plan (the “Incentive Plan”).   The
grant of the Option is subject to and conditioned on approval of the grant and
its terms by the Compensation Committee.  Subject to your continued employment,
the Option would vest with respect to 25% of the shares subject thereto on the
first anniversary of the Effective Date, and with respect to an additional
1/48th of the shares subject thereto on each monthly anniversary thereafter,
such that the entire Option would be vested on the fourth anniversary of the
Effective Date.  The Option will be subject to the terms and conditions of the
Incentive Plan and a stock option agreement in a form prescribed by Accuray,
which you will be required to sign as a condition to receiving the Option (the
“Option Agreement”).

7.                         RESTRICTED STOCK UNITS.  We will recommend to the
Compensation Committee of the Board of Directors that you be granted 8,000
restricted stock units (“RSUs”) under the Accuray 2007 Incentive Award Plan. The
grant of the RSUs is subject to and conditioned on approval of the grant and its
terms by the Compensation Committee.  Subject to the your continued service as
an Employee through the applicable vesting date, twenty-five percent (25%) of
the RSUs shall vest on the first anniversary of the Effective Date and an
additional twenty-five percent (25%) of the RSUs shall vest on each of the
second, third and fourth anniversaries of the Effective Date.

Payment in respect of any RSUs that vest in accordance with the grant agreement
will be made to you in whole shares of our common stock as soon as practicable
after the applicable vesting date, but in no event later than 60 days after such
vesting date.  The RSUs will be subject to the terms and conditions of the
Incentive Plan and a restricted stock unit grant agreement in a form prescribed
by Accuray, which you will be required to sign as a condition to receiving the
RSUs (the “RSU Agreement”).

8.                         BENEFITS AND PAID TIME OFF.  During the Term, you
will be eligible to participate in all incentive, savings and retirement plans,
practices, policies and programs maintained or sponsored by the Company from
time to time which are applicable to other similarly situated executives of the
Company, subject to the terms and conditions thereof.  During the Term, you will
also be eligible for standard benefits, such as medical, vision and dental
insurance, paid time off, and holidays to the extent applicable generally to
other similarly situated executives of the Company, subject to the terms and
conditions of the applicable Company plans or policies.  The benefits described
in this Section 8 will be subject to change from time to time as deemed
appropriate and necessary by the Company.

9.                        TERMINATION OF EMPLOYMENT.

(a)              In the event of a termination of your employment by the Company
without Cause or by you for Good Reason (each as defined below) then, in
addition to any other accrued

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amounts payable to you through the date of termination of your employment
(including any earned but unpaid bonus),

i)            the Company will no later than the date that is six (6) months and
one (1) day after the date of your termination of employment, or the last day of
such shorter period upon such termination of employment that is sufficient to
avoid the imposition of additional tax under Section 409A(a)(l)(B) of the
Internal Revenue Code of 1986, as amended (the “Code”), or any other taxes or
penalties imposed under Section 409A of the Code, pay you a lump-sum severance
payment (the “Severance Payment”) in an amount equal to the sum of (x) six (6)
months of your annual base salary as in effect on the date of termination plus
(y) a pro rata portion of your target annual bonus for the fiscal year of the
Company in which such termination occurs, calculated based on the number of days
elapsed in such fiscal year through the date of termination plus (z) 50% of your
target annual bonus for the fiscal year of the Company in which such termination
occurs, and

ii)         provided that you properly elect COBRA continuation coverage, the
Company will pay the COBRA premium for health care coverage for you and your
spouse and children, as applicable and to the extent eligible (the “Severance
Benefits”), for the six (6) month period immediately following the date of such
termination of your employment. Such payments for the Severance Benefits will
begin no later than the date that is six (6) months and one (1) day after the
date of your termination of employment, or the last day of such shorter period
upon such termination of employment that is sufficient to avoid the imposition
of additional tax under Section 409A(a)(l)(B) of the Code or any other taxes or
penalties imposed under Section 409A of the Code (the “Deferred COBRA Payment
Date”), and on the Deferred COBRA Payment Date, the Company will pay you an
amount equal to the Severance Benefits for the period beginning on the date of
your termination of employment and ending on the Deferred COBRA Payment Date.

(b)             If a Change in Control (as defined in Exhibit A hereto) occurs
within the first thirty-six (36) months of employment (from Effective Date
through July 2, 2010) and your employment with the Company is terminated by the
Company without Cause or by you for Good Reason, in each case within the twelve
(12) month period immediately following the effective date of the Change in
Control, then, in addition to the amounts payable to you pursuant to paragraph
(a) of this Section 9, each of your then outstanding stock options and RSUs to
purchase shares and units of the Company’s common stock and RSUs shall become
fully vested and exercisable immediately prior to the effective time of the
termination of your employment.

(c)              Notwithstanding the foregoing, your right to receive the
payments and benefits set forth in this Section 9 is conditioned on and subject
to your execution and non-revocation of a general release of claims against the
Company and its affiliates, in a form prescribed by the Company.  In no event
shall you or your estate or beneficiaries be entitled to any of the payments or
benefits set forth in this Section 9 upon any termination of your employment by
reason of your total and permanent disability or your death.

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(d)             For purposes of this letter:

i)             “Cause” shall mean (i) your commission of a felony, (ii) your
commission of a crime involving moral turpitude or your commission of any other
act or omission involving dishonesty, disloyalty, breach of fiduciary duty or
fraud with respect to the Company or any of its subsidiaries or any of their
customers or suppliers, or (iii) your failure to perform the normal and
customary duties of your position with the Company as reasonably directed by the
CEO, provided, that any of the acts or omissions described in the foregoing
clauses (i), (ii) or (iii) are not cured to the Company’s reasonable
satisfaction within thirty (30) days after written notice thereof is given to
you; and

ii)          “Good Reason” shall mean the occurrence of any one or more of the
following events without your prior written consent, unless the Company fully
corrects the circumstances constituting Good Reason within 30 days after notice
from you that Good Reason exists:  (i) a material reduction of your duties and
responsibilities hereunder; (ii) a relocation of your principal workplace more
than 35 miles outside the Company’s Sunnyvale corporate headquarters; or
(iii) the Company’s reduction of your annual base salary or bonus opportunity,
each as in effect on the date hereof or as the same may be increased from time
to time; provided that written notice of your resignation for Good Reason must
be delivered to the Company within 30 days after the date you first know or
should reasonably know of the occurrence of any such event in order for your
resignation with Good Reason to be effective hereunder.

10.                   CODE SECTION 280G.

(a)              In the event it shall be determined that any payment or
distribution to you or for your benefit which is in the nature of compensation
and is contingent on a change in the ownership or effective control of the
Company or the ownership of a substantial portion of the assets of the Company
(within the meaning of Section 280G(b)(2) of the Code), whether paid or payable
pursuant to this letter or otherwise (a “Payment”), would constitute a
“parachute payment” under Section 280G(b)(2) of the Code and would be subject to
the excise tax imposed by Section 4999 of the Code (together with any interest
or penalties imposed with respect to such excise tax, the “Excise Tax”), then
the Payments shall be reduced to the extent necessary so that no portion thereof
shall be subject to the excise tax imposed by Section 4999 of the Code but only
if, by reason of such reduction, the net after-tax benefit received by you shall
exceed the net after-tax benefit received by you if no such reduction was made. 
For purposes of this Section 10(a), “net after-tax benefit” shall mean (i) the
Payments which you receive or are then entitled to receive from the Company that
would constitute “parachute payments” within the meaning of Section 280G of the
Code, less (ii) the amount of all federal, state and local income taxes payable
with respect to the Payments calculated at the maximum marginal income tax rate
for each year in which the Payments shall be paid to you (based on the rate in
effect for such year as set forth in the Code as in effect at the time of the
first payment of the foregoing), less (iii) the amount of Excise Taxes imposed
with respect to the Payments.

(b)             All determinations required to be made under this Section 10
shall be made by such nationally recognized accounting firm as may be selected
by the Audit Committee of the Board of Directors of the Company as constituted
immediately prior to the change

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in control transaction (the “Accounting Firm”), provided, that the Accounting
Firm’s determination shall be made based upon “substantial authority” within the
meaning of Section 6662 of the Code.  The Accounting Firm shall provide its
determination, together with detailed supporting calculations and documentation,
to you and the Company within 15 business days following the date of termination
of your employment, if applicable, or such other time as requested by you
(provided that you reasonably believe that any of the Payments may be subject to
the Excise Tax) or the Company.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company.

11.                   RESTRICTIVE COVENANTS.

(a)              As a condition of your employment with the Company, you agree
that during the Term and thereafter, you will not directly or indirectly
disclose or appropriate to your own use, or the use of any third party, any
trade secret or confidential information concerning the Company or its
subsidiaries or affiliates (collectively, the “Company Group”) or their
businesses, whether or not developed by you, except as it is required in
connection with your services rendered for the Company.  You further agree that,
upon termination of your employment, you will not receive or remove from the
files or offices of the Company Group any originals or copies of documents or
other materials maintained in the ordinary course of business of the Company
Group, and that you will return any such documents or materials otherwise in
your possession.  You further agree that, upon termination of your employment,
you will maintain in strict confidence the projects in which any member of the
Company Group is involved or contemplating.

(b)             You further agree that during the Term and continuing through
the first anniversary of the date of termination of your employment, you will
not directly or indirectly solicit, induce, or encourage any employee,
consultant, agent, customer, vendor, or other parties doing business with any
member of the Company Group to terminate their employment, agency, or other
relationship with the Company Group or such member or to render services for or
transfer their business from the Company Group or such member and you will not
initiate discussion with any such person for any such purpose or authorize or
knowingly cooperate with the taking of any such actions by any other individual
or entity.

(c)              While employed by the Company, you agree that you will not
engage in any business activity in competition with any member of the Company
Group nor make preparations to do so.

(d)             Upon the termination of your relationship with the Company, you
agree that you will promptly return to the Company, and will not take with you
or use, all items of any nature that belong to the Company, and all materials
(in any form, format, or medium) containing or relating to the Company’s
business.

(e)              In recognition of the facts that irreparable injury will result
to the Company in the event of a breach by you of your obligations under
Sections 11(a), (b), (c) or (d) above, that monetary damages for such breach
would not be readily calculable, and that the Company would not have an adequate
remedy at law therefore, you acknowledge, consent and agree that in the event of
such breach, or the threat thereof, the Company shall be entitled, in addition
to any other legal remedies and damages available, to

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specific performance thereof and to temporary and permanent injunctive relief
(without the necessity of posting a bond) to restrain the violation or
threatened violation of such obligations by you.

12.                  COMPANY RULES AND REGULATIONS.  As an employee of the
Company, you agree to abide by Company policies, procedures, rules and
regulations as set forth in the Company’s Employee Handbook or as otherwise
promulgated.  In addition, as a condition of your employment, you will be
required to complete, sign, return, and abide by the Employee Confidentiality
and Inventions Agreement.

13.                  WITHHOLDING.  The Company may withhold from any amounts
payable under this letter such federal, state, local or foreign taxes as shall
be required to be withheld pursuant to any applicable law or regulation.

14.                  ARBITRATION.  Except as set forth in Section 11(e) above,
any disagreement, dispute, controversy or claim arising out of or relating to
this letter or the interpretation of this letter or any arrangements relating to
this letter or contemplated in this letter or the breach, termination or
invalidity thereof shall be settled by final and binding arbitration
administered by JAMS/Endispute in Santa Clara County, California in accordance
with the then existing JAMS/Endispute Arbitration Rules and Procedures for
Employment Disputes.  Except as provided herein, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings.  The
arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the state of California, or federal law, or both, as applicable,
and the arbitrator is without jurisdiction to apply any different substantive
law.  The arbitrator shall have the authority to entertain a motion to dismiss
and/or a motion for summary judgment by any party and shall apply the standards
governing such motions under the Federal Rules of Civil Procedure.  Judgment
upon the award may be entered in any court having jurisdiction thereof.  Each
party shall pay his or its own attorneys’ fees and expenses associated with such
arbitration to the extent permitted by applicable law.

15.                  ENTIRE AGREEMENT.  As of the Effective Date, this letter
constitutes the final, complete and exclusive agreement between you and the
Company with respect to the subject matter hereof and replaces and supersedes
any and all other agreements, offers or promises, whether oral or written, made
to you by any member of the Company Group (including, without limitation, your
Original Offer Letter dated June 15, 2007).

16.                  SEVERABILITY.  Whenever possible, each provision of this
letter will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this letter is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision of this letter, but such invalid, illegal or unenforceable
provision will be reformed, construed and enforced so as to render it valid,
legal, and enforceable consistent with the intent of the parties insofar as
possible.

17.                  ACKNOWLEDGEMENT.  You hereby acknowledge (a) that you have
consulted with or have had the opportunity to consult with independent counsel
of your own choice concerning this letter, and have been advised to do so by the
Company, and (b) that you have read and understand this letter, are fully aware
of its legal effect, and have entered into it freely based on your own judgment.

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18.                   SECTION 409A OF THE CODE.  To the extent that any payments
or benefits under this letter are deemed to be subject to Section 409A of the
Code, this letter will be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued there under in order to (a) preserve the intended tax treatment of the
benefits provided with respect to such payments and (b) comply with the
requirements of Section 409A of the Code.

[SIGNATURE PAGE FOLLOWS]

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Please confirm your agreement to the foregoing by signing and dating the
enclosed duplicate original of this letter in the space provided below for your
signature and returning it to us in the enclosed, self-addressed stamped
envelope.  Please retain one fully-executed original for your files.

Sincerely,

ACCURAY INCORPORATED, a Delaware corporation

 

/s/ Euan Thomson

 

Euan Thomson, Ph.D.,

 

President and CEO

 

 

 

Accepted and Agreed,

 

 

 

 

 

/s/ Theresa L. Dadone

 

Signature

 

 

 

8/30/07

 

Signature Date

 

 

 

07/02/07

 

Effective Date

 

 

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EXHIBIT A

DEFINITION OF CHANGE IN CONTROL

FOR PURPOSES OF THIS LETTER, “CHANGE IN CONTROL” MEANS AND INCLUDES EACH OF THE
FOLLOWING:

(A)              A TRANSACTION OR SERIES OF TRANSACTIONS (OTHER THAN AN OFFERING
OF THE COMPANY’S COMMON STOCK TO THE GENERAL PUBLIC THROUGH A REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) WHEREBY ANY
“PERSON” OR RELATED “GROUP” OF “PERSONS” (AS SUCH TERMS ARE USED IN SECTIONS
13(D) AND 14(D)(2) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
“EXCHANGE ACT”)) (OTHER THAN THE COMPANY, ANY OF ITS SUBSIDIARIES, AN EMPLOYEE
BENEFIT PLAN MAINTAINED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OR A “PERSON”
THAT, PRIOR TO SUCH TRANSACTION, DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED
BY, OR IS UNDER COMMON CONTROL WITH, THE COMPANY) DIRECTLY OR INDIRECTLY
ACQUIRES BENEFICIAL OWNERSHIP (WITHIN THE MEANING OF RULE 13D-3 UNDER THE
EXCHANGE ACT) OF SECURITIES OF THE COMPANY POSSESSING MORE THAN 50% OF THE TOTAL
COMBINED VOTING POWER OF THE COMPANY’S SECURITIES OUTSTANDING IMMEDIATELY AFTER
SUCH ACQUISITION; OR

(B)             DURING ANY PERIOD OF TWO CONSECUTIVE YEARS, INDIVIDUALS WHO, AT
THE BEGINNING OF SUCH PERIOD, CONSTITUTE THE BOARD OF DIRECTORS OF THE COMPANY
TOGETHER WITH ANY NEW DIRECTOR(S) (OTHER THAN A DIRECTOR DESIGNATED BY A PERSON
WHO SHALL HAVE ENTERED INTO AN AGREEMENT WITH THE COMPANY TO EFFECT A
TRANSACTION DESCRIBED IN CLAUSE (A) OR CLAUSE (C) HEREOF) WHOSE ELECTION BY THE
BOARD OF DIRECTORS OF THE COMPANY OR NOMINATION FOR ELECTION BY THE COMPANY’S
STOCKHOLDERS WAS APPROVED BY A VOTE OF AT LEAST TWO-THIRDS OF THE DIRECTORS THEN
STILL IN OFFICE WHO EITHER WERE DIRECTORS AT THE BEGINNING OF THE TWO-YEAR
PERIOD OR WHOSE ELECTION OR NOMINATION FOR ELECTION WAS PREVIOUSLY SO APPROVED,
CEASE FOR ANY REASON TO CONSTITUTE A MAJORITY THEREOF; OR

(C)              THE CONSUMMATION BY THE COMPANY (WHETHER DIRECTLY INVOLVING THE
COMPANY OR INDIRECTLY INVOLVING THE COMPANY THROUGH ONE OR MORE INTERMEDIARIES)
OF (X) A MERGER, CONSOLIDATION, REORGANIZATION, OR BUSINESS COMBINATION OR (Y) A
SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS IN
ANY SINGLE TRANSACTION OR SERIES OF RELATED TRANSACTIONS OR (Z) THE ACQUISITION
OF ASSETS OR STOCK OF ANOTHER ENTITY, IN EACH CASE OTHER THAN A TRANSACTION:

I)    WHICH RESULTS IN THE COMPANY’S VOTING SECURITIES OUTSTANDING IMMEDIATELY
BEFORE THE TRANSACTION CONTINUING TO REPRESENT (EITHER BY REMAINING OUTSTANDING
OR BY BEING CONVERTED INTO VOTING SECURITIES OF THE COMPANY OR THE PERSON THAT,
AS A RESULT OF THE TRANSACTION, CONTROLS, DIRECTLY OR INDIRECTLY, THE COMPANY OR
OWNS, DIRECTLY OR INDIRECTLY, ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS
OR OTHERWISE SUCCEEDS TO THE BUSINESS OF THE COMPANY (THE COMPANY OR SUCH
PERSON, THE “SUCCESSOR ENTITY”)) DIRECTLY OR INDIRECTLY, AT LEAST A MAJORITY OF
THE COMBINED VOTING POWER OF THE SUCCESSOR ENTITY’S OUTSTANDING VOTING
SECURITIES IMMEDIATELY AFTER THE TRANSACTION, AND

II)   AFTER WHICH NO PERSON OR GROUP BENEFICIALLY OWNS VOTING SECURITIES
REPRESENTING 50% OR MORE OF THE COMBINED VOTING POWER OF THE SUCCESSOR ENTITY;
PROVIDED,

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HOWEVER, THAT NO PERSON OR GROUP SHALL BE TREATED FOR PURPOSES OF THIS CLAUSE
(C) (II) AS BENEFICIALLY OWNING 50% OR MORE OF COMBINED VOTING POWER OF THE
SUCCESSOR ENTITY SOLELY AS A RESULT OF THE VOTING POWER HELD IN THE COMPANY
PRIOR TO THE CONSUMMATION OF THE TRANSACTION; OR

(d)             The Company’s stockholders approve a liquidation or dissolution
of the Company.

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