Exhibit 10.1

 

GENERAL RELEASE AND SEPARATION AGREEMENT

 

This General Release and Separation Agreement (hereafter “Agreement”) is entered
into between Robert E. McNamara (the “Executive”), and Accuray Incorporated (the
“Company”), effective on the eighth calendar day following the Executive’s
signature (the “Effective Date”), unless he revokes his acceptance in accordance
with the terms of Section 5(b), below.

 

WHEREAS, the Executive was the Chief Financial Officer of the Company, pursuant
to the terms of an employment offer letter dated November 10, 2006 (the
“Employment  Agreement”);

 

WHEREAS, the Executive resigned effective September 11, 2008; and

 

WHEREAS, the Company and the Executive now wish to document the termination of
their employment relationship and fully and finally to resolve all matters
between them;

 

THEREFORE, in exchange for the good and valuable consideration set forth herein,
the adequacy of which is specifically acknowledged, the Executive and the
Company hereby agree as follows:

 

1.                                       Resignation of Employment. The
Executive confirms his resignations of his employment, and his position as an
officer of the Company, and his position as a director of any Company subsidiary
effective September 11, 2008 (the “Resignation Date”). The parties hereby
acknowledge and agree that the Executive’s resignation of employment constitutes
a “separation from service” from the Company within the meaning of
Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the
“Code”), and Treasury Regulation Section 1.409A-1(h) (a “Separation from
Service”). As of the Resignation Date, the Employment Agreement shall
automatically terminate and be of no further force and effect, and neither the
Company nor the Executive shall have any further obligations thereunder, except
as expressly provided herein.

 

2.                                       Payment of Accrued Wages and Expenses.
The Executive acknowledges receipt, on the Resignation Date, of an amount equal
to all accrued wages through the Resignation Date, including accrued, unused
vacation and/or paid time off, less applicable taxes and other authorized
withholding. The Executive shall be promptly reimbursed for all expenses
incurred by him on behalf of the Company on or before the Resignation Date, in
accordance with the Company’s expense reimbursement policies. The Executive
shall submit any request for reimbursement of such expenses to the Company no
later than October 31, 2008.

 

3.                                       Cash Severance Benefits and COBRA
Premiums. The Executive agrees that, except as set forth in this Agreement, he
is entitled to no additional pay or benefits in conjunction with the termination
of his employment. On the first business day following the expiration of the six
(6) month period measured from the date of the Executive’s Separation from
Service, the Company shall pay to the Executive, in a lump-sum, cash severance
in the gross amount of $564,140.66 (five hundred sixty-four thousand, one
hundred forty dollars and sixty-six cents) (the “Severance Payment”), which the
parties acknowledge and agree represents the amount of the “Severance Payment”
calculated under, and as defined in, Section 6(a) of the Employment Agreement,
consisting of twelve months’ base salary ($316,300), target bonus at 65% of the

 

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Executive’s annual base salary ($205,595), and pro-rated bonus for the current
fiscal year at target ($42,245.66). The Severance Payment shall be paid net of
applicable taxes and other authorized withholding. In addition, in the event
that the Executive elects to continue healthcare coverage pursuant to the
Consolidated Omnibus Budget and Reconciliation Act and/or any similar state law
(collectively, “COBRA”) for himself, his spouse and his children, as applicable
and to the extent eligible, the Company shall pay the Executive’s COBRA premiums
for the period commencing on the date on which the Executive’s Company-sponsored
healthcare coverage would otherwise terminate (absent COBRA) and ending on the
earlier to occur of the twelve (12) month anniversary of such date or the
expiration of the period during which the Executive would be entitled to
continuation coverage under COBRA absent this provision. The parties acknowledge
and agree that the payment of the Severance Payment is being delayed in
compliance with Section 409A(a)(2)(B)(i) of the Code.

 

4.                                       Stock Options and Restricted Stock
Units. The Executive acknowledges that as of the Resignation Date, the Executive
was vested in Stock Options and Restricted Stock Units (“RSUs”) as reflected in
the report attached as Exhibit A hereto. The Executive further acknowledges
that, pursuant to the terms of the Employment Agreement, vesting in the
Executive’s outstanding Stock Options was accelerated as of the Resignation Date
with respect to 127,916 (one hundred twenty-seven thousand, nine hundred
sixteen) Stock Options, and an additional 2,500 (two thousand five hundred) RSUs
were released. The amount of additional Stock Option acceleration and RSU
release is equivalent to that which would have occurred during the twelve month
period immediately following the Resignation Date, had the Executive remained
employed through that additional period. The Executive hereby agrees that except
as so expressly provided, and as reflected in Exhibit A, vesting in the Stock
Options and RSUs ceased on the Resignation Date, and all Stock Options and RSUs
not then vested were cancelled and forfeited as of that date. Except as
specifically set forth herein, the Executive’s rights with respect to Stock
Options and RSUs issued to him are governed by the Stock Option and Restricted
Stock Unit Agreements entered into between the Executive and the Company, and
the applicable Company equity incentive plan(s) and Notice(s) of Grant. Promptly
following the Effective Date of this Agreement, the released RSUs shall be
released in book to E*Trade.

 

5.                                       General Release of Claims by the
Executive.

 

(a)                                  The Executive, on behalf of himself and his
executors, heirs, administrators, representatives and assigns, hereby agrees to
release and forever discharge the Company and all predecessors, successors and
their respective parent corporations, affiliates, related, and/or subsidiary
entities, and all of their past and present investors, directors, shareholders,
officers, general or limited partners, executives, attorneys, agents and
representatives, and executive benefit plans in which the Executive is or has
been a participant by virtue of his employment with the Company, from any and
all claims, debts, demands, accounts, judgments, rights, causes of action,
equitable relief, damages, costs, charges, complaints, obligations, promises,
agreements, controversies, suits, expenses, compensation, responsibility and
liability of every kind and character whatsoever (including attorneys’ fees and
costs), whether in law or equity, known or unknown, asserted or unasserted,
suspected or unsuspected (collectively, “Claims”), which the Executive has or
may have had against such entities based on any events or circumstances arising
or occurring on or prior to the date hereof or on or prior to the

 

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Resignation Date, arising directly or indirectly out of, relating to, or in any
other way involving in any manner whatsoever the Executive’s employment by the
Company or the separation thereof, and any and all claims arising under federal,
state, or local laws relating to employment, including without limitation claims
of wrongful discharge, breach of express or implied contract, fraud,
misrepresentation, defamation, or liability in tort, claims of any kind that may
be brought in any court or administrative agency, any claims arising under Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Fair Labor Standards Act, the Executive
Retirement Income Security Act (“ERISA”), the Family and Medical Leave Act, and
similar state or local statutes, ordinances, and regulations, including, without
limitation, the California Family Rights Act, the California Fair Employment and
Housing Act and the California Labor Code.

 

Notwithstanding the generality of the foregoing, the Executive does not release
the following claims and rights:

 

(i)                                          Claims under this Agreement;

 

(ii)                                       Claims for unemployment compensation
or any state disability insurance benefits pursuant to the terms of applicable
state law;

 

(iii)                                    Claims to continued participation in
certain of the Company’s group benefit plans pursuant to the terms and
conditions of the federal law known as COBRA and/or any similar state law;

 

(iv)                                   Claims to vested rights or benefits, if
any, under the Company’s 401(k) plan;

 

(v)                                      The Executive’s rights as a shareholder
of the Company;

 

(vi)                                   The Executive’s right to bring to the
attention of the Equal Employment Opportunity Commission claims of
discrimination; provided, however, that the Executive does release his right to
secure damages for any alleged discriminatory treatment; and

 

(vii)                                The Executive’s right under applicable law
(including California Labor Code Section 2802), the Indemnity Agreement between
the Company and the Executive dated as of March 17, 2006 and the Company’s D&O
policy to seek indemnity for acts committed, or omissions, within the course and
scope of the Executive’s employment duties. The Company represents that it has
in place D&O insurance that, to the extent of the policy terms, covers acts of
and omissions by the Executive in his prior role as Chief Financial Officer of
the Company.

 

3

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(b)                                 In accordance with the Older Workers Benefit
Protection Act of 1990, the Executive acknowledges that he is aware of the
following:

 

(i)                                               This Section and this
Agreement are written in a manner calculated to be understood by the Executive.

 

(ii)                                            The waiver and release of claims
under the ADEA contained in this Agreement does not cover rights or claims that
may arise after the date on which the Executive signs this Agreement.

 

(iii)                                         This Agreement provides for
consideration in addition to anything of value to which the Executive is already
entitled.

 

(iv)                                        The Executive has been advised to
consult an attorney before signing this Agreement.

 

(v)                                           The Executive has been granted
forty-five (45) days after he is presented with this Agreement to decide whether
or not to sign this Agreement. If the Executive executes this Agreement prior to
the expiration of such period, he does so voluntarily and after having had the
opportunity to consult with an attorney, and hereby waives the remainder of the
forty-five (45) day period.

 

(vi)                                        The Executive has the right to
revoke this general release within seven (7) days of signing this Agreement. In
the event this general release is revoked, this Agreement will be null and void
in its entirety, and the Executive will not receive the benefits of this
Agreement.

 

If the Executive wishes to revoke this agreement, he must deliver written notice
stating that intent to revoke, in accordance with the notice provisions of
Section 16 of this Agreement, on or before 5:00 p.m. on the seventh (7th) day
after the date on which the Executive signs this Agreement.

 

6.                                       The Company’s Release of Claims. The
Company voluntarily releases and discharges the Executive and his heirs,
successors, administrators, representatives and assigns from all Claims which it
has or may have against the Executive arising from or related in any way to his
employment with the Company or service as a director or officer of the Company
or any of its subsidiaries or affiliates or the discontinuance of his employment
with the Company or services as a director or officer of the Company or any of
its subsidiaries or affiliates and that are based upon facts known, or which in
the exercise of reasonable diligence could or should have been known, to the
Company’s Board of Directors. Notwithstanding the foregoing, nothing herein
shall release or discharge any Claim by the Company against the Executive, or
the right of the Company to bring any action, legal or otherwise, against the
Executive as a result of any failure by him to perform his obligations under
this Agreement, or as a result of any acts of intentional misconduct or gross
recklessness (including, but not limited to, fraud, embezzlement,
misappropriation, or other malfeasance).

 

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7.                                  Waiver of Rights Under California Civil Code
Section 1542. The Company and the Executive acknowledge that they have been
advised of and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

 

Being aware of said code section, the Company and the Executive hereby expressly
waive any rights they may have thereunder, as well as under any other statutes
or common law principles of similar effect; provided, however, that such waiver
is not intended to affect claims expressly preserved under the terms of the
parties’ respective releases.

 

8.                                  Nondisparagement. The Executive agrees that
neither he nor anyone acting by, through, under or in concert with him shall
disparage or otherwise communicate negative statements or opinions about the
Company, its Board members, officers, executives or business. The Company agrees
that its Board members, officers, and investment relations management personnel
shall not disparage or otherwise communicate negative statements or opinions
about the Executive. Notwithstanding this Section 8, nothing in this Agreement
is intended to prevent the Executive or any person affiliated with the Company
from giving truthful testimony in any legal, administrative or regulatory
proceeding or investigation or as otherwise required by law, subpoena, or other
legal process.

 

9.                             Restrictive Covenants. The Executive acknowledges
his continuing obligations, pursuant to Section 8(a), (b) and (d) of the
Employment Agreement.

 

10.                       Cooperation. The Executive agrees to give reasonable
cooperation, at the Company’s request, in any pending or future litigation or
arbitration brought against the Company and in any investigation that the
Company or any government entity may conduct. The Company shall reimburse the
Executive for all out of pocket expenses reasonably incurred, and shall
compensate the Executive at the rate of $152 per hour for time spent complying
with this Section 10. The Executive shall submit an invoice for any time spent,
and expenses incurred, at the Company’s request pursuant to this Section 10.
Such invoices shall be submitted within 10 days after the end of the month in
which services were provided and/or expenses incurred, and shall be paid by the
Company within 30 days of receipt.

 

11.                       Executive’s Representations and Warranties. The
Executive represents and warrants that:

 

(a)                                       He has been paid all wages owed to him
by the Company, including all accrued, unused vacation and/or paid time off, as
of the date of execution of this Agreement;

 

(b)                                      As of the date of execution of this
Agreement, he has not sustained any injuries for which he might be entitled to
compensation pursuant to California’s Workers Compensation law;

 

(c)                                       The Executive has not initiated any
adversarial proceedings of any kind against the Company or against any other
person or entity released herein, nor will he do so in the future, except as
specifically allowed by this Agreement.

 

5

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12.                       Confidential Information; Return of Company Property.

 

(a)                                       The Executive hereby expressly
confirms his continuing obligations to the Company pursuant to Section 8(a) of
the Employment Agreement, and pursuant to the Employee Confidentiality and
Inventions Agreement executed by the Executive, a copy of which is attached as
Exhibit B and incorporated herein by reference.

 

(b)                                      The Executive shall deliver to the
Company within five days of the Effective Date, all originals and copies of
correspondence, drawings, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, or any other documents concerning the
Company and its customers’, business plans, marketing strategies, products,
processes or business of any kind, and all originals and copies of documents
that contain proprietary information or trade secrets of the Company that are in
the possession or control of the Executive or his agents or representatives.
Notwithstanding the generality of the foregoing, the Executive may retain his
own personnel documents, agreements between the Executive and the Company, and
his own compensation and stock documents.

 

(c)                                       The Executive shall return to the
Company within five days of the Effective Date all equipment of the Company in
his possession or control. Notwithstanding the foregoing, the Executive shall
have the opportunity to purchase the Company laptop computer issued to him for
the amount of $1,200 (one thousand two hundred dollars, which is its depreciated
value; provided, however, that the Executive shall return the laptop computer to
the Company within the five-day time period stipulated by this Section 12(c) so
that the Company has the opportunity to remove from it all Company information
and software. The Company shall return the laptop computer to the Executive
within five days of his surrender of it.

 

(d)                                      Notwithstanding the provisions of
Section 12(a) through (c), the Executive shall be entitled to retain and use
electronic and hard copies of his Company Outlook Contact files.

 

13.                       Taxes. To the extent any taxes may be payable by the
Executive for the benefits provided to him by this Agreement beyond those
withheld by the Company, the Executive agrees to pay them himself and to
indemnify and hold the Company and the other entities released herein harmless
for any tax claims or penalties, and associated attorneys’ fees and costs,
resulting from any failure by him to make required payments.

 

14.                       In the Event of a Claimed Breach. All controversies,
claims and disputes arising out of or relating to this Agreement, including
without limitation any alleged violation of its terms, shall be resolved by
final and binding arbitration before a single neutral arbitrator in San Jose,
California, in accordance with the applicable dispute resolution rules of the
Judicial Arbitration and Mediation Service (“JAMS”). The arbitration shall be
commenced by filing a demand for arbitration with JAMS within one (1) year of
the event(s) giving rise to the controversy, claim or dispute, and no less than
ninety (90) days after the filing party has given notice of such breach to the
other party; provided, however, that the one-year period referenced

 

6

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in this Section 14 shall not to applicable in the event that commencing the
arbitration is prevented for reasons beyond the control of the party demanding
arbitration; and provided further that the 90-day period referenced in this
Section 14 shall be extended during any period in which the parties are
attempting to informally resolve any dispute. The arbitrator shall have
authority to award the prevailing party attorneys’ fees and expert fees, as
provided by law, in addition to any other relief awarded. The Parties have the
right to seek review in any California court for any errors of law by the
arbitrator. Notwithstanding the foregoing, it is acknowledged that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations imposed on them under Sections
12(a) and (b) hereof, and that in the event of any such failure, an aggrieved
person will be irreparably damaged and will not have an adequate remedy at law.
Any such person shall, therefore, be entitled to injunctive relief, including
specific performance, to enforce such obligations, and if any action shall be
brought in equity to enforce any of the provisions of Sections 12(a) and (b) of
this Agreement, neither of the parties hereto shall raise the defense that there
is an adequate remedy at law.

 

15.                                 Choice of Law. This Agreement shall in all
respects be governed and construed in accordance with the laws of the State of
California, including all matters of construction, validity and performance,
without regard to conflicts of law principles.

 

16.                                 Notices. All notices, demands or other
communications regarding this Agreement shall be in writing and shall be
sufficiently given if either personally delivered or sent by facsimile or
overnight courier, addressed as follows:

 

(a)

If to the Company:

 

 

 

Accuray Incorporated

 

Attn: Euan Thomson, CEO

 

cc to: General Counsel

 

1310 Chesapeake Terrace

 

Sunnyvale, CA 94089

 

Phone: 408-716-4600

 

Fax: 408-716-4747

 

 

(b)

If to the Executive:

 

 

 

Robert E. McNamara

 

56 Politzer Drive

 

Menlo Park, CA 94025

 

Phone: 650-326-4511

 

Fax: 650-326-1863

 

17.                                 Severability. Except as otherwise specified
below, should any portion of this Agreement be found void or unenforceable for
any reason by a court of competent jurisdiction, the parties intend that such
provision be limited or modified so as to make it enforceable, and if such
provision cannot be modified to be enforceable, the unenforceable portion shall
be deemed severed from the remaining portions of this Agreement, which shall
otherwise remain in full

 

7

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force and effect. If any portion of this Agreement is so found to be void or
unenforceable for any reason in regard to any one or more persons, entities, or
subject matters, such portion shall remain in full force and effect with respect
to all other persons, entities, and subject matters. This Section shall not
operate, however, to sever (a) the Executive’s obligation to provide the binding
release to all entities intended to be released hereunder; or (b) the Company’s
obligations under Sections 3, 4 and 6 of this Agreement.

 

18.                                 Understanding and Authority. The parties
understand and agree that all terms of this Agreement are contractual and are
not a mere recital, and represent and warrant that they are competent to
covenant and agree as herein provided.

 

19.                                 Integration Clause. This Agreement, the
Employment Agreement, and the Employee Confidentiality and Inventions Agreement,
contain the entire agreement of the parties with regard to the matters
referenced herein and supersede any prior agreements as to such matters. This
Agreement may not be changed or modified, in whole or in part, except by an
instrument in writing signed by the Executive and the Chief Executive Officer of
the Company.

 

20.                                 Execution in Counterparts. This Agreement
may be executed in counterparts with the same force and effectiveness as though
executed in a single document.

 

21.                                 Binding on Successors. This Agreement shall
be binding on the Parties’ respective successors and assigns.

 

22.                                 Section 409A of the Code.

 

(a)                                  The payments and benefits under this
Agreement are intended to comply with or be exempt from the application of
Section 409A of the Code. To the extent applicable, this Agreement shall be
interpreted in accordance with Section 409A of the Code and Department of
Treasury Regulations and other interpretive guidance issued thereunder.
Notwithstanding any provision of this Agreement to the contrary, if the Company
determines that any such compensation or benefits payable under this Agreement
may be subject to Section 409A of the Code and related Department of Treasury
guidance, the Company may, with the Executive’s prior written consent, adopt
such amendments to this Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that the Company determines are necessary or appropriate to
(i) exempt the compensation and benefits payable under this Agreement from
Section 409A of the Code and/or preserve the intended tax treatment of such
compensation and benefits, or (ii) comply with the requirements of Section 409A
of the Code and related Department of Treasury guidance.

 

(b)                                 To the extent permitted under Section 409A
of the Code, any separate payment or benefit under this Agreement or otherwise
shall not be deemed “nonqualified deferred compensation” subject to Section 409A
and the six (6) month delay requirement under 409A(a)(2)(B)(i) of the Code to
the extent provided in the exceptions in Treasury Regulation
Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception
or provision of Section 409A of the Code.

 

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(c)                                  To the extent that any reimbursements or
corresponding in-kind benefits provided to the Executive under this Agreement,
including, without limitation under Section 2 or Section 10 hereof, are deemed
to constitute compensation to the Executive, such amounts shall be paid or
reimbursed reasonably promptly, but not later than December 31 of the year
following the year in which the expense was incurred. The amount of any such
payments or expense reimbursements in one year shall not affect the expenses or
in-kind benefits eligible for payment or reimbursement in any other taxable
year, and the Executive’s right to such payments or reimbursement of any such
expenses shall not be subject to liquidation or exchange for any other benefit.

 

The parties have carefully read this Agreement in its entirety; fully understand
and agree to its terms and provisions; and intend and agree that it is final and
binding on all parties.

 

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed
the foregoing on the dates shown below.

 

ROBERT E. McNAMARA

 

ACCURAY INCORPORATED

 

 

 

 

 

 

/s/ Robert E. McNamara

 

/s/ Euan Thomson

Robert E. McNamara

 

Euan Thomson

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

Date

10/17/08

 

Date

10/22/08

 

 

 

/s/ Darren J. Milliken

 

Darren J. Milliken

 

Associate General Counsel

 

Accuray Incorporated

 

10-21-08

 

9

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Exhibit A

 

“ Closing Statement

 

 

 

 

Accuray Incorporated

 

 

ID: 20-8370041

 

 

1310 Chesapeake Terrace

 

 

Sunnyvale, CA 94089

 

Termination Date:    09/11/2008

 

ID:     410

 

Robert McNamara

56 Politzer Dr.

Menlo Park., CA United States 94025

 

Exercisable Options

 

Number

 

Grant
Date

 

Plan/
Type

 

Price (S)

 

Shares
Granted

 

Shares
Exercised

 

Shares
Exercisable

 

Vesting
Stop Date

 

Total
Price

 

Last Date
To Exercise

 

00000790

 

11/07/05

 

1998/ISO

 

4.38000

 

21,875.00

 

0.00

 

21,875.00

 

9/11/2008

 

$

95,812.50

 

12/11/08

 

00000791

 

11/07/05

 

1998/NQ

 

4.38000

 

128,125.00

 

100,000.00

 

28,125.00

 

9/11/2008

 

$

123,187.50

 

12/11/08

 

00000997

 

08/23/06

 

1998/ISO

 

9.50000

 

10,966.00

 

0.00

 

293.00

 

9/11/2008

 

$

2,783.50

 

12/11/08

 

00000997

 

08/23/06

 

1998/NQ

 

9.50000

 

89,034.00

 

0.00

 

74,706.00

 

9/11/2008

 

$

709,707.00

 

12/11/08

 

00000715

 

01/25/05

 

1998/ISO

 

3.50000

 

114,284.00

 

0.00

 

114,284.00

 

9/11/2008

 

$

399,994.00

 

12/11/08

 

00000716

 

01/25/05

 

1998/NQ

 

3.50000

 

385,716.00

 

70,000.00

 

315,716.00

 

9/11/2008

 

$

1,105,006.00

 

12/11/08

 

00001562

 

08/31/07

 

2007/NQ

 

13.83000

 

60,000.00

 

0.00

 

32,500.00

 

9/11/2008

 

$

449,475.00

 

12/11/08

 

00002180

 

08/29/08

 

2007/NQ

 

8.25000

 

60,000.00

 

0.00

 

17,500.00

 

9/11/2008

 

$

144,375.00

 

12/11/08

 

 

 

 

 

TOTALS

 

 

 

870,000.00

 

170,000.00

 

604,999.00

 

 

 

$

3,030,340.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Releasable Restricted Stock Awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

Grant
Date

 

Plan/
Type

 

Price (S)

 

Shares
Granted

 

Shares
Released

 

Shares
Releasable

 

Shares
Cancelled

 

 

 

 

 

00001564

 

08/31/07

 

2007/RSU

 

0.00000

 

10,000.00

 

2,500.00

 

2,500.00

 

5,000.00

 

 

 

 

 

 

 

 

 

TOTALS

 

 

 

10,000.00

 

2,500.00

 

2,500.00

 

5,000.00

 

 

 

 

 

 

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Exhibit B

 

EMPLOYEE CONFIDENTIALITY AND INVENTIONS AGREEMENT

 

This confidentiality and inventions agreement (the “Agreement”) is made as of
Dec 13, 2004 by and between Accuray Incorporated, a California corporation
having a principal place of business at 1310 Chesapeake Terrace, Sunnyvale,
California (“Company”) and Robert McNamara (“Employee”).

 

RECITALS:

 

A.                                   Company and Employee are engaged in
discussions in contemplation of Company’s employment of Employee.

 

B.                                     In the course of dealings between the
Company and Employee, either prior to or during Employee’s employment by
Company, each party may have access to or have disclosed to it information which
is of a confidential nature as that term is later defined in this Agreement.

 

C.                                     In addition, Employee may possess
confidential information which Employee does not have the right to share with
Company, or may be bound by agreements with or policies of third parties which
purport to limit what Employee may do with or for the Company.

 

D.                                    Company and Employee each desire to
establish and set forth their individual obligations with respect to the other’s
Confidential Information and obligations.

 

AGREEMENT:

 

In consideration of the foregoing and of the following promises, agreements,
warranties and representations, Company and Employee agree as follows:

 

Confidentiality/Non-disclosure

 

1.                                  “Confidential Information” as used in this
Agreement shall mean any and all technical and non-technical information
including patent, copyright, trade secret, and proprietary information,
techniques, sketches, drawings, models, inventions, know-how, processes,
apparatus, equipment, algorithms, software programs, software source documents,
and formulae, and includes, without limitation, information concerning research,
experimental work, development, design details and specifications, engineering,
financial information, procurement requirements, purchasing, manufacturing,
customer information and lists, business forecasts, sales and merchandising, and
marketing plans and information.

 

2.                                  Each of the parties agrees that it will not
make any use of any Confidential Information of the other party which is
supplied to or obtained by it in writing, orally or by observation, except to
the extent necessary for negotiations, discussions, and consultations with
personnel or authorized representatives of the other party; and any purpose the
other party to whom such information is confidential may hereafter authorize in
writing.

 

3.                                  Each of the parties agrees that it shall
treat all Confidential Information of the other party with the same degree of
care as it accords to its own Confidential Information, and each of the parties
represents that it exercises reasonable care to protect its own Confidential
Information.

 

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4.                                       Each of the parties further agrees that
it shall not publish, copy or disclose any Confidential Information of the other
party to any third party and that it shall use best efforts to prevent
inadvertent disclosure of such Confidential Information to any third party.

 

5.                                       Each party’s obligations under
Paragraphs 2, 3, and 4 with respect to any portion of the other party’s
Confidential Information shall terminate when the party receiving that
Confidential Information (the “receiving party”) can document that:

 

(a)                             the Confidential Information was in the public
domain at the time it was communicated to the receiving party by the other
party;

 

(b)                            it entered the public domain subsequent to the
time it was communicated to the receiving party by the other party through no
fault of the receiving party;

 

(c)                             it was in the receiving party’s possession free
of any obligation of confidence at the time it was communicated to the receiving
party by the other party;

 

(d)                            it was rightfully communicated to the receiving
party free of any obligation of confidence subsequent to the time it was
communicated to the receiving party by the other party;

 

(e)                             it was developed by employees or agents of the
receiving party independently of and without reference to any information
communicated to the receiving party by the other party;

 

(f)                               it was communicated by the other party to an
unaffiliated third party free of any obligation of confidence; or

 

(g)                            the communication was in response to a valid
order by a court or other governmental body, was otherwise required by law, or
was necessary to establish the rights of either party under this Agreement.

 

6.                                       All materials (including, without
limitation, documents, drawings, models, apparatus, sketches, designs and lists)
furnished to one party by the other, and which are designated in writing in an
Attachment to this Agreement to be the property of such party, shall remain the
property of such party and shall be returned to it promptly at its request,
together with any copies thereof.

 

7.                                       Neither party shall communicate any
information to the other in violation of the proprietary rights of any third
party.

 

8.                                       Neither party shall export, directly or
indirectly, any technical data acquired from the other pursuant to this
Agreement or any product utilizing any such data to any country for which the
U.S. Government or any agency thereof at the time of export requires an export
license or other government approval without first obtaining such license or
approval.

 

9.                                       This Agreement shall govern all
communications between the parties that are made during the period from the
effective date of this Agreement to the date on which either party receives from
the other written notice that subsequent communications shall not be so
governed, provided, however, that each party’s obligations under Paragraphs 2,
3, and 4 with respect to Confidential Information of the other party which it
has previously received shall continue in perpetuity unless terminated pursuant
to paragraph 5.

 

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10.                                 Employee warrants and represents to the
Company that Employee can carry out Employee’s obligations in this Agreement,
can be employed by the Company in the capacity described in the employment
agreement between them or in the Company’s letter offering employment to the
Employee, and can carry out all of the duties of such employment without
breaching or violating any contractual or other duty which Employee owes to any
former employer or other third party.

 

11.                                 Employee further warrants and represents to
the Company that, in performing the Employee’s duties to the Company under this
and any other agreements between them, Employee shall neither make use of nor
disclose to the Company any Confidential Information of any third party unless
Employee has the legal right to so use or disclose.

 

12.                                 Employee agrees to hold harmless, defend,
and indemnify the Company from and against any claim or suit against the Company
by a third party which is based upon Employee’s failure to act in full accord
with Employee’s warranties and representations contained in 10 and 11 above.

 

Inventions/Assignment

 

13.                                 Inventions shall mean all of the Employee’s
right (including rights in copyrights), title and interest in and to ideas,
inventions, developments, improvements, enhancements, creations, and other
manifestations of intellectual property, whether or not protected or protectable
by patent, copyright, trade name or trade secret laws, which are conceived or
developed or reduced to practice (a) by Employee or with Employee’s
participation during the course and within the scope of his employment by the
Company, (b) at any time utilizing any human or other resources of the Company,
or (c) during the period of employment and which relate to the business of the
Company as being conducted or contemplated by the Company.

 

14.                                 Employee acknowledges and agrees that part
of what Employee is being paid for is Employee’s work in connection with
Inventions and, accordingly, Employee agrees that all Inventions are the
property of the Company. Employee agrees to execute such patent and other
applications, in the United States and other countries for the purpose of
protecting Inventions, and such instruments of assignment of Inventions to the
Company, as the Company requests, either during or after the period of
Employee’s employment by the Company.

 

Miscellaneous

 

15.                                 Since unauthorized disclosure of
Confidential Information and failure to participate in an application or
assignment will diminish the value to the parties of the proprietary interests
that are the subject of this Agreement, if either party breaches any of its
obligations hereunder, the other shall be entitled to equitable relief to
protect its interests therein, including but not limited to injunctive relief,
as well as money damages.

 

16.                                 This Agreement shall be construed in
accordance with the laws of the State of California, the state in which the
Company is located and in which Employee is to be employed, without giving
effect to principles of choice of law or conflict of laws.

 

17.                                 This Agreement is the complete and exclusive
statement of the agreement between the parties, and supersedes all prior written
and oral communications and agreements relating to the subject matter hereof.

 

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18.                                 Any notice required to be given under this
Agreement shall be deemed received upon personal delivery or acknowledgment of
receipt of facsimile, the day following delivery to a reputable overnight
courier, or three (3) days after mailing if sent by registered or certified
mail, return receipt requested, to the addresses of the parties set forth below,
or to such other address as either of the parties shall have furnished to the
other in writing.

 

19.                                  In the event of invalidity of any provision
of this Agreement, the parties agree that such invalidity shall not affect the
validity of the remaining portions of this Agreement, and further agree to
substitute for the invalid provision a valid provision which most closely
approximates the intent and economic effect of the invalid provision.

 

IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate as of
the date first written above.

 

 

Accuray Incorporated

 

“Employee”

 

 

 

 

 

 

By:

/s/ Robert E. McNamara

 

/s/ Loretta Hillberry

Signature

 

Signature

 

 

 

 

 

 

Robert E. McNamara

 

 

Printed Name

 

Address

 

 

 

 

 

 

Title:

 

 

 

1310 Chesapeake Terrace

 

Address

Sunnyvale, CA 94089

 

Accuray, Inc.

 

 

1310 Chesapeake Terrace

56 Politzer Drive

 

Sunnyvale, CA 94089

Menlo Park, CA 94025

 

 

 

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III.  ACKNOWLEDGEMENT OF ACCURAY’S CODE OF CONDUCT AND ETHICS

 

I have received and read Accuray’s Code of Conduct and Ethics. I understand the
standards and policies contained in Accuray’s Code of Conduct and Ethics,
Accuray’s Code of Ethics on Interactions with Health Care Professionals and
understand that there may be additional policies or laws specific to my job. I
further agree to comply with Accuray’s Code of Conduct and Ethics, Accuray’s
Code of Ethics on Interactions with Health Care Professionals.

 

If I have questions concerning the meaning or application of Accuray’s Code of
Conduct and Ethics, Accuray’s Code of Ethics on Interactions with Health Care
Professionals, any company policies or the legal and regulatory requirements
applicable to my job, I know I can consult my supervisor, the Human Resources
Department, the in-house General Counsel, the CFO or the Compliance Officer,
knowing that my questions or reports to these sources will be maintained in
confidence.

 

 

 

/s/ Robert McNamara

 

Employee Name

 

 

 

/s/ Robert McNamara

 

Signature

 

 

 

12/13/04

 

Date

 

Please sign and return this form to the Human Resources Department at Accuray
Headquarters:

 

 

 

Att’n: Human Resources Manager

 

 

1310 Chesapeake Terrace

 

 

Sunnyvale, CA 94089

 

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