Exhibit 10.4

 

September 27, 2011

 

Euan Thomson, Ph.D.

 

Re: Amended and Restated Employment Agreement

 

Dear Euan,

 

Accuray Incorporated (the “Company”) is pleased to offer you continued
employment as the President and Chief Executive Officer of the Company on the
terms and conditions set forth in this employment agreement (the “Agreement”),
effective as of October 1, 2011 (the “Effective Date”). This letter amends and
restates in its entirety your previous employment agreement, dated as of
January 1, 2011 (the “Previous Employment Agreement”). You and the Company
mutually agree to have the following terms govern your continued employment:

 

1.                         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.

 

The term of this agreement (the “Term”) shall be two (2) years, measured from
January 1, 2011. Upon the expiration of this Agreement the provisions contained
herein, with the exception of Change of Control provisions, shall have no
further force or effect and your employment, if extended at the sole discretion
of the Company, will continue to be at-will and any terms associated with such
employment shall be embodied in a written employment agreement signed by both
parties. For purposes of this Agreement the definition of “Term” shall include
any extensions of the Term.

 

The term of the Change of Control provisions provided for in this Agreement (the
“Change of Control Term”) shall be three (3) years, measured from January 1,
2011; however should the Company and employee enter into a new agreement after
the Term expires the Change of Control provisions shall also automatically
terminate and be superseded by the terms in such new agreement.  Any extension
of the Term of this Agreement shall also extend the term of the Change in
Control provisions by an equal amount.

 

2.                         POSITION, DUTIES AND RESPONSIBILITIES.  During the
Term of this Agreement, the Company will employ you, and you agree to be
employed by the Company, as the President and Chief Executive Officer.  In this
capacity 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 report to
the Board of Directors of the Company (the “Board”), and will work full-time at
our principal offices located at 1310 Chesapeake Terrace, Sunnyvale, California
94089 (or any other location the Company may utilize as its principal offices),
except for travel to other locations as may be necessary to fulfill your
responsibilities.

 

3.                         BASE COMPENSATION.  As of the Effective Date of this
Agreement, your annual base salary will be $530,500 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.

 

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4.                         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 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 100% of your base salary actually paid for such
year.

 

In accordance with the terms of such bonus plan, payment of each bonus shall be
made in a single lump-sum cash payment not later than the last day of the
applicable two and one-half (2 ½) month short-term deferral period with respect
to such bonus payment, within the meaning of Treasury Regulation
Section 1.409A-1(b)(4).

 

5.                         EQUITY COMPENSATION

 

(a)              STOCK OPTIONS.  As a part of your overall compensation, you may
be granted the option to purchase shares of Accuray common stock (“Options”) 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 (the “Grant Date”), as determined in
accordance with the Accuray Incorporated 2007 Incentive Award Plan (the
“Incentive Plan”). All Options are subject to and conditioned on approval of the
grant and its terms by the Compensation Committee.  Subject to your continued
employment, Options will vest with respect 1/48th of the shares subject thereto
on each monthly anniversary, such that the entire Option would be entirely
vested on the fourth anniversary of the Grant Date.  All Options are subject to
the terms and conditions of the Incentive Plan and a stock option agreement in a
form prescribed by Accuray (the “Option Agreement”), which you will be required
to sign as a condition to receiving the Option.

 

(b)             RESTRICTED STOCK UNITS.  Additionally, the Compensation
Committee of the Board of Directors may grant you restricted stock units
(“RSUs”) in accordance with the Company’s Incentive Plan.  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
Grant Date and an additional twenty-five percent (25%) of the RSUs shall vest on
each of the second, third and fourth anniversaries of the Grant Date.  Payment
in respect of any vested RSUs 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.  Consistent with the foregoing, the
terms and conditions of each RSU shall be set forth in a RSU grant agreement
(“RSU Agreement”) to be entered into by the Company and you which shall evidence
the terms of each RSU.

 

(c)              Your current Options and RSUs as of the date of this letter are
listed on Exhibit A.

 

6.                         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 6 will be subject to change from time to time as deemed
appropriate and necessary by the Company.

 

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7.                        TERMINATION OF EMPLOYMENT.

 

(a)              If during the Term of this agreement, you incur a “separation
from service” (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)) (“Separation from Service”) by reason of (i) a termination
of your employment by the Company other than for Cause (as defined below), death
or disability, (ii) the failure of the Company to either (A) extend the term of
this Agreement, or (B) prior to the lapse of the term of this Agreement, offer
you an employment agreement to continue as the CEO of the Company with a term of
at least two years containing severance provisions that are comparable to the
median severance benefits (including good reason protection for a reduction in
your title or a material reduction in your base salary or bonus opportunity) for
CEOs in the peer group then used by the Compensation Committee of the Board for
the purpose of benchmarking executive compensation, as determined by the
Compensation Committee in its sole reasonable discretion, or (iii) a termination
of your employment by you for Good Reason (as defined below), and provided that
you execute a general release of claims in a form prescribed by the Company in a
form substantially similar to Exhibit B hereto (the “Release”) within twenty-one
(21) days (or, if required by applicable law, forty-five (45) days) after the
date of such Separation from Service (the “Separation Date”) and you do not
revoke such Release, and further subject to Section 16(b) below, then, in
addition to any other accrued amounts payable to you through the Separation Date
(earned but unpaid bonus and paid time off), the Company will on the sixtieth
(60th) day after the Separation Date, pay you a lump-sum severance payment (the
“Severance Payment”) in an amount equal to twelve (12) months of your annual
base salary as in effect immediately prior to the Separation Date, plus one
hundred percent (100%) of your target annual bonus for the fiscal year of the
Company in which such Separation from Service occurs, plus a twelve (12) month
health benefit equivalent, which shall be twice the amount that you would be
required to pay to continue your group health coverage for the twelve (12) month
period following the Separation from Service, payable whether or not you elect
COBRA. In addition to the Severance Payment described above, the amount of your
then outstanding Options and RSUs that would have become vested during the
twelve (12) month period following your termination of employment shall become
fully vested and exercisable immediately prior to the Separation Date.  The
Company will also provide you with outplacement assistance in accordance with
its then current policies and practices with respect to outplacement assistance
for other similarly situated executives of the Company, but in no event later
than through the end of the year following the year in which your Separation
from Service occurs.

 

(b)             If a Change of Control (as defined in Exhibit C hereto) occurs
during the Term of this agreement and if within the three (3) months before and
the twelve (12) months after the effective date of the Change of Control, you
incur a Separation from Service by reason of (i) a termination of your
employment by the Company other than for Cause, death or disability, (ii) a
termination of your employment by you for Good Reason or (iii) the failure of
the Company to either (A) extend the term of this Agreement, or (B) prior to the
lapse of the term of this Agreement, offer you an employment agreement to
continue as the CEO of the Company with a term of at least two years containing
severance provisions that are comparable to the median severance benefits
(including good reason protection for a reduction in your title or a material
reduction in your base salary or bonus opportunity) for CEOs in the peer group
then used by the Compensation Committee of the Board for the purpose of
benchmarking executive compensation, as determined by the Compensation Committee
in its sole reasonable discretion,, then, subject to Section 16(b) below, and
provided that you execute a general release of claims in a form prescribed by
the Company within twenty-one (21) days (or, if required by applicable law,
forty-five (45) days) after the Separation from Service and you do not revoke
such Release, and further subject to Section 16(b) below, then, in addition to
any other accrued amounts payable to you through the Separation Date (earned but
unpaid bonus and paid time off), the Company will on the sixtieth (60th) day
after the Separation Date, pay you a lump-sum severance payment (the “CoC Cash
Severance

 

3

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Payment”) in an amount equal to the sum of (x) twenty-four (24) months of your
annual base salary as in effect immediately prior to the Separation Date; plus
(y) two hundred percent (200%) of your target annual bonus for the fiscal year
of the Company in which such Separation from Service occurs; plus (z) a
twenty-four (24) month health benefit equivalent, which shall be twice the
amount that you would be required to pay to continue your group health coverage
for the twenty-four (24) month period following the Separation from Service,
payable whether or not you elect COBRA.  In addition to the CoC Cash Severance
Benefits described above, each of your then outstanding Options and RSUs shall
become fully vested and exercisable immediately prior to the Separation Date.
The Company will also provide you with outplacement assistance in accordance
with its then current policies and practices with respect to outplacement
assistance for other similarly situated executives of the Company, but in no
event later than through the end of the year following the year in which your
Separation from Service occurs. For clarity, under Change of Control this
paragraph (b) shall be in lieu of any similar payments or benefits described
above in paragraph (a) of this Section 7.

 

(c)              Notwithstanding the foregoing, your right to receive the
payments and benefits set forth in this Section 7 is conditioned on and subject
to your execution and non-revocation of the Release.  In no event shall you or
your estate or beneficiaries be entitled to any of the payments or benefits set
forth in this Section 7 upon any termination of your employment by reason of
your total and permanent disability or your death.

 

(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
material act or material 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, (iii) the material violation of
Accuray’s written Code of Conduct and Ethics that was provided to you, as
determined in the Company’s reasonable sole discretion, (iv) the violation of
the Foreign Corrupt Practices Act (the “FCPA”), (v) your material failure to
perform the normal and customary duties of your position with the Company as
reasonably directed by the Company, provided, that any of the acts or omissions
described in the foregoing clauses 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:  (i) a material diminution
by the Company of your duties and responsibilities hereunder, (ii) following a
Change in Control, you are no longer the most senior executive of the Company or
any combined or successor entity, (iii) a material change in the geographic
location at which you must perform services under this letter, provided that in
no event will a change to a location within a 35 mile radius of the Company’s
Sunnyvale corporate headquarters be deemed material for purposes of this clause;
or (iv) a material diminution by the Company of your annual base salary, each as
in effect on the date hereof or as the same may be increased from time to time;
provided, however, that a termination of your employment by you shall only
constitute a termination for “Good Reason” hereunder if (a) you provide the
Company with written notice setting forth the specific facts or circumstances
constituting Good Reason within thirty (30) days after the date you become aware
of the existence of such facts or circumstances, (b) the Company has failed to
cure such facts or circumstances within thirty (30) days after receipt of such
written notice, and (c) the Separation Date occurs no later than seventy-five
(75) days after the initial occurrence of the event constituting Good Reason.

 

4

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8.                         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. 
If a reduction in Payments is necessary, reduction shall occur in the following
order: (A) cash payments shall be reduced first and in reverse chronological
order such that the cash payment owed on the latest date following the
occurrence of the event triggering such excise tax will be the first cash
payment to be reduced; (B) accelerated vesting of stock awards shall be
cancelled/reduced next and in the reverse order of the date of grant for such
stock awards (i.e., the vesting of the most recently granted stock awards will
be reduced first), with full-value awards reversed before any stock option or
stock appreciation rights are reduced; and (C) employee benefits shall be
reduced last and in reverse chronological order such that the benefit owed on
the latest date following the occurrence of the event triggering such excise tax
will be the first benefit to be reduced.

 

(b)             All determinations required to be made under this Section 8
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 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.

 

9.                         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

 

5

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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 9(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 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.

 

10.                   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, Code of Conduct and
Ethics, 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.

 

11.                   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.

 

12.                   ARBITRATION.  Except as set forth in 9(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, except that the Company shall pay all JAMS
arbitration fees, including, but not limited to, the arbitrator’s fees and all
other administrative fees and costs in excess of the amount of court filing fees
that would be required if the dispute were decided in a court of law.

 

13.                   ENTIRE AGREEMENT.  As of the Effective Date, this letter
along with any applicable Option Agreement and RSU Agreement, 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.

 

6

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14.                   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.

 

15.                   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.

 

16.                   SECTION 409A OF THE CODE.

 

(a)              The payments and benefits under this letter are intended to
comply with or be exempt from the application of Section 409A of the Code so
that none of the payments and benefits to be provided under this Agreement will
be subject to the additional tax imposed under Section 409A, and any ambiguities
in this Agreement will be interpreted to so comply.   Notwithstanding any
provision of this letter to the contrary, in the event that the Company
determines that any payments or benefits payable hereunder may be subject to
Section 409A of the Code, the Company may (without any obligation to do so or to
indemnify you for failure to do so) adopt such amendments to this letter or take
any other actions that the Company determines are necessary or appropriate to
(a) exempt such payments and benefits from Section 409A of the Code in order to
preserve the intended tax treatment of such payments or benefits, or (b) comply
with the requirements of Section 409A of the Code and thereby avoid the
application of penalty taxes thereunder.  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
thereunder. Each payment and benefit payable under this Agreement is intended to
constitute separate payments for purposes of Section 1.409A-2(b)(2) of the
Department of Treasury Regulations.

 

(b)             Notwithstanding anything to the contrary in this letter, no
compensation or benefits, including without limitation any severance payments or
benefits payable under Section 7 above, shall be paid to you during the six
(6)-month period following your Separation from Service to the extent that
paying such amounts at the time or times indicated in this letter would result
in a prohibited distribution under Section 409A(a)(2)(b)(i) of the Code.  If the
payment of any such amounts is delayed as a result of the previous sentence,
then on the first business day following the end of such six (6)-month period 
(or such earlier date upon which such amount can be paid under Section 409A of
the Code without resulting in a prohibited distribution, including as a result
of your death), the Company shall pay you a lump-sum amount equal to the
cumulative amount that would have otherwise been payable to you during such
six-month period.

 

(c)              To the extent that any reimbursements or corresponding in-kind
benefits provided to you under this letter are deemed to constitute compensation
to you, such amounts will be paid or reimbursed reasonably promptly, but not
later than March 15 of the year following the year in which the expense was
incurred.  The amount of any such payments or expense reimbursements in one year
will not affect the expenses or in-kind benefits eligible for payment or
reimbursement in any other taxable year, and your right to such payments or
reimbursement of any such expenses will not be subject to liquidation or
exchange for any other benefit.

 

[SIGNATURE PAGE FOLLOWS]

 

7

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Please confirm your agreement to the foregoing by signing the enclosed duplicate
original of this letter in the space provided below for your signature and
returning it to Darren Milliken, Senior Vice President, General Counsel.  Please
retain one fully-executed original for your files.

 

 

 

Sincerely,

 

 

 

ACCURAY INCORPORATED,

 

a Delaware Corporation

 

 

 

 

 

By:

/s/ Louis J. Lavigne, Jr.

 

Name:

Louis J. Lavigne, Jr.

 

Title:

Chairperson of the Board

 

 

 

 

 

 

 

By:

/s/ Darren J. Milliken

 

Name:

Darren J. Milliken

 

Title:

Senior Vice President, General Counsel

 

 

Accepted and Agreed,

 

 

 

 

 

 

 

 

By:

/s/ Euan S. Thomson     9/29/11

 

 

 

Euan Thomson

 

 

 

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EXHIBIT A – Personnel Grant Status

 

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Accuray Incorporated - Stock

File: Optstmt

Personnel Grant Status

ID: 20-8370041

Date: 9/23/2011

 

1310 Chesapeake Terrace

Time: 3:20:49PM

 

Sunnyvale, CA 94089

 

 

AS OF 9/23/2011

 

Euan Thomson

 

AWARDS

 

 

 

Grant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Next Deferral

 

Number

 

Date

 

Plan

 

Type

 

Granted

 

Price

 

Released

 

Vested

 

Cancelled

 

Unvested

 

Deferred

 

Release Date

 

00003036

 

8/31/2010

 

2007

 

RSU

 

38,300.00

 

$

0.00000

 

0.00

 

0.00

 

0.00

 

38,300.00

 

0.00

 

 

 

 

 

 

 

 

 

 

 

38,300.00

 

 

 

0.00

 

0.00

 

0.00

 

38,300.00

 

0.00

 

 

 

 

STOCK OPTIONS

 

 

 

Grant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

Date

 

Plan

 

Type

 

Granted

 

Price

 

Exercised

 

Vested

 

Cancelled

 

Unvested

 

Outstanding 

 

Exercisable

 

00000446

 

3/28/2002

 

1998

 

ISO

 

437,499.00

 

$

0.75000

 

437,499.00

 

437,499.00

 

0.00

 

0.00

 

0.00

 

0.00

 

00000447

 

3/28/2002

 

1998

 

NQ

 

162,501.00

 

$

0.75000

 

162,501.00

 

162,501.00

 

0.00

 

0.00

 

0.00

 

0.00

 

00000540

 

7/9/2003

 

1998

 

ISO

 

15,833.00

 

$

0.75000

 

15,833.00

 

15,833.00

 

0.00

 

0.00

 

0.00

 

0.00

 

00000603

 

8/27/2003

 

1998

 

NQ

 

560,000.00

 

$

0.75000

 

117,499.00

 

560,000.00

 

0.00

 

0.00

 

442,501.00

 

442,501.00

 

00000632

 

3/16/2004

 

1998

 

ISO

 

22,500.00

 

$

1.40000

 

22,500.00

 

22,500.00

 

0.00

 

0.00

 

0.00

 

0.00

 

00000702

 

8/10/2004

 

1998

 

ISO

 

91,399.00

 

$

2.50000

 

39,500.00

 

91,399.00

 

0.00

 

0.00

 

51,899.00

 

51,899.00

 

00000703

 

8/10/2004

 

1998

 

NQ

 

208,601.00

 

$

2.50000

 

0.00

 

208,601.00

 

0.00

 

0.00

 

208,601.00

 

208,601.00

 

00000783

 

5/12/2005

 

1998

 

ISO

 

2,500.00

 

$

3.50000

 

0.00

 

2,500.00

 

0.00

 

0.00

 

2,500.00

 

2,500.00

 

00000788

 

11/7/2005

 

1998

 

ISO

 

20,833.00

 

$

4.38000

 

0.00

 

20,833.00

 

0.00

 

0.00

 

20,833.00

 

20,833.00

 

00000789

 

11/7/2005

 

1998

 

NQ

 

137,167.00

 

$

4.38000

 

0.00

 

137,167.00

 

0.00

 

0.00

 

137,167.00

 

137,167.00

 

00000919

 

4/5/2006

 

1998

 

ISO

 

2,500.00

 

$

6.73000

 

0.00

 

2,500.00

 

0.00

 

0.00

 

2,500.00

 

2,500.00

 

00000996

 

8/23/2006

 

1998

 

ISO

 

8,755.00

 

$

9.50000

 

0.00

 

8,755.00

 

0.00

 

0.00

 

8,755.00

 

8,755.00

 

00001559

 

8/31/2007

 

2007

 

NQ

 

40,000.00

 

$

28.47000

 

0.00

 

40,000.00

 

0.00

 

0.00

 

40,000.00

 

40,000.00

 

00001560

 

8/31/2007

 

2007

 

NQ

 

135,000.00

 

$

13.83000

 

0.00

 

135,000.00

 

0.00

 

0.00

 

135,000.00

 

135,000.00

 

00002062

 

2/29/2008

 

2007

 

NQ

 

40,000.00

 

$

10.36000

 

0.00

 

36,667.00

 

0.00

 

3,333.00

 

40,000.00

 

36,667.00

 

00002178

 

8/29/2008

 

2007

 

NQ

 

140,000.00

 

$

8.25000

 

0.00

 

110,833.00

 

0.00

 

29,167.00

 

140,000.00

 

110,833.00

 

00002546

 

2/27/2009

 

2007

 

NQ

 

40,000.00

 

$

4.67000

 

0.00

 

26,667.00

 

0.00

 

13,333.00

 

40,000.00

 

26,667.00

 

00002629

 

8/31/2009

 

2007

 

NQ

 

160,000.00

 

$

6.41000

 

0.00

 

76,667.00

 

0.00

 

83,333.00

 

160,000.00

 

76,667.00

 

00002945

 

1/29/2010

 

2007

 

NQ

 

40,000.00

 

$

5.94000

 

0.00

 

16,667.00

 

0.00

 

23,333.00

 

40,000.00

 

16,667.00

 

00003035

 

8/31/2010

 

2007

 

NQ

 

75,000.00

 

$

6.58000

 

0.00

 

17,188.00

 

0.00

 

57,812.00

 

75,000.00

 

17,188.00

 

00003404

 

1/31/2011

 

2007

 

NQ

 

40,000.00

 

$

8.56000

 

0.00

 

6,667.00

 

0.00

 

33,333.00

 

40,000.00

 

6,667.00

 

C0000540

 

7/9/2003

 

1998

 

NQ

 

24,167.00

 

$

0.75000

 

0.00

 

24,167.00

 

0.00

 

0.00

 

24,167.00

 

24,167.00

 

C0000632

 

3/16/2004

 

1998

 

NQ

 

17,500.00

 

$

1.40000

 

0.00

 

17,500.00

 

0.00

 

0.00

 

17,500.00

 

17,500.00

 

C0000783

 

5/12/2005

 

1998

 

NQ

 

37,500.00

 

$

3.50000

 

0.00

 

37,500.00

 

0.00

 

0.00

 

37,500.00

 

37,500.00

 

 

1

--------------------------------------------------------------------------------

 

 

Accuray Incorporated - Stock

 

Personnel Grant Status

ID: 20-8370041

 

 

1310 Chesapeake Terrace

 

 

Sunnyvale, CA 94089

 

 

AS OF 9/23/2011

 

Euan Thomson

 

STOCK OPTIONS

 

 

 

Grant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

 

Date

 

Plan

 

Type

 

Granted

 

Price

 

Exercised

 

Vested

 

Cancelled

 

Unvested

 

Outstanding

 

Exercisable

 

C0000919

 

4/5/2006

 

1998

 

NQ

 

37,500.00

 

$

6.73000

 

0.00

 

37,500.00

 

0.00

 

0.00

 

37,500.00

 

37,500.00

 

C0000996

 

8/23/2006

 

1998

 

NQ

 

291,245.00

 

$

9.50000

 

0.00

 

291,245.00

 

0.00

 

0.00

 

291,245.00

 

291,245.00

 

 

 

 

 

 

 

 

 

2,788,000.00

 

 

 

795,332.00

 

2,544,356.00

 

0.00

 

243,644.00

 

1,992,668.00

 

1,749,024.00

 

 

2

--------------------------------------------------------------------------------

 

EXHIBIT B – General Release Template

 

--------------------------------------------------------------------------------

 

GENERAL RELEASE AND SEPARATION AGREEMENT

 

This General Release and Separation Agreement (hereafter “Agreement”) is entered
into between                                (the “Executive”), and Accuray
Incorporated (the “Company”), effective on the eighth calendar day following the
Executive’s signature (the “Effective Date”), unless he/she revokes his/her
acceptance in accordance with the terms of Section 6(b), below.

 

WHEREAS, the Executive was
                                                                 of the Company,
pursuant to the terms of the original employment offer letter dated
                               (the “Employment Agreement”);

 

WHEREAS, the Executive resigned effective
                                      ; 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/her resignation of his/her employment and of his/her
position as an officer of the Company effective                                 
(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. 
Notwithstanding the foregoing, the Company shall be obligated to Executive for
severance payments and continuation of benefits as contemplated by Section 7 of
the Employment Agreement and as set forth in Section 3 below.

 

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 (apart from the Executive’s bonus for the current fiscal year, which
will be paid in accordance with the regular terms of the Company Bonus Plan).
The Executive shall also be promptly reimbursed for all expenses incurred by him
on behalf of the Company, so long as they are submitted on or before
                                         for reimbursement and they are in
accordance with the Company’s expense reimbursement policies.

 

3.                                       Cash Severance Benefits and COBRA
Premiums.                              The Executive agrees that, except as set
forth in this Agreement, he/she is entitled to no additional pay or benefits in
conjunction with the termination of his/her employment.  Subject to
Section 22(b) of this Agreement, the Company shall pay to the Executive, in a
lump-sum, cash severance in the gross amount of                            (the
“Severance Payment”), which the parties acknowledge and agree represents the
amount of the “Severance Payment” calculated under, and as defined in, Section 7
of the Employment Agreement, consisting of:

 

1.

Salary:

$

2.

Bonus (if applicable)

$

3.

Health Benefit (if applicable)

$

 

EXECUTIVE GENERAL RELEASE STD 12.28.2010

ACCURAY CONFIDENTIAL

 

1

--------------------------------------------------------------------------------

 

The Severance Payment shall be paid net of applicable taxes and other authorized
withholding.

 

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. Except as specifically set
forth herein, the Executive’s rights with respect to Stock Options and RSUs
issued to him/her 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.

 

5.                                       Outplacement Assistance.  The Company
will pay for outplacement assistance for the Executive in an amount not to
exceed $                                              , provided that the
Executive begins such outplacement assistance with Accuray’s outplacement
provider on or before                           . Accuray’s outplacement service
provider will bill Accuray directly and there is no cash value to this benefit.

 

6.                                       General Release of Claims by the
Executive.

 

(a)                                  The Executive, on behalf of himself/herself
and his/her 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/her 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 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, 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 for unemployment compensation or any state disability
insurance benefits pursuant to the terms of applicable state law;

 

(ii)           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;

 

2

--------------------------------------------------------------------------------

 

(iii)          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/her right to secure damages for any alleged
discriminatory treatment;

 

(iv)          The Executive’s rights under the Indemnification Agreement between
Company and Executive and under applicable law (including California Labor Code
Section 2802), the General Corporation Law of Delaware 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; and

 

(v)           Claims for breach of this Separation Agreement.

 

(b)                                 In accordance with the Older Workers Benefit
Protection Act of 1990, the Executive acknowledges that he/she 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) [twenty one (21)]
days after he/she is presented with this Agreement to decide whether or not to
sign this Agreement.  If the Executive executes this Agreement prior to
                                     he/she does so voluntarily and after having
had the opportunity to consult with an attorney, and hereby waives the remainder
of the 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/she must deliver written
notice stating that intent to revoke, in accordance with the notice provisions
of Section 17 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.

 

7.                                       The Company’s Release of Claims.
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/her
obligations under this Agreement, or as a result of any acts of intentional
misconduct or recklessness (including, but not limited to, fraud, embezzlement,
misappropriation, or other malfeasance).

 

8.                                       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

 

3

--------------------------------------------------------------------------------

 

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/her or her favor at the time of executing the release,
which if known by him or her must have materially affected his/her 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.

 

9.                                       Nondisparagement.  The Executive agrees
that neither he/she 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 neither its Board members nor executive officers shall disparage or
otherwise communicate negative statements or opinions about the Executive.

 

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

 

11.                                 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 by
him in compliance with this Section 11. For his/her part, Executive agrees to
submit a reimbursement for such out of pocket expenses within thirty (30) days
after they have been incurred.

 

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

 

(a)                                  He/she 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/she has not sustained any injuries for which he/she 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/she do so in the future, except as
specifically allowed by this Agreement.

 

13.                                 Confidential Information; Return of Company
Property.

 

(a)                                  The Executive hereby expressly confirms
his/her continuing obligations to the Company pursuant to Section 9(a) of the
Employment Agreement, and pursuant to the Employee Invention Assignment and
Confidentiality 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 Resignation 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

 

4

--------------------------------------------------------------------------------

 

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/her agents or representatives.

 

(c)                                  The Executive shall return to the Company
within five days of the Resignation Date all equipment of the Company in his/her
possession or control. The Executive may however keep his/her Company issued
laptop computer and cellular phone. Accuray will remove all Company licensed
software and Confidential information before delivering possession.

 

14.                                 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/herself 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.

 

15.                                 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 60 (sixty) days after the filing party has given notice of such breach to
the other party.  The arbitrator shall have authority to award the prevailing
party attorneys’ fees and expert fees, if any.  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 13(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 13(a) and (b) of this Agreement, neither of the parties
hereto shall raise the defense that there is an adequate remedy at law.

 

16.                                 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.

 

17.                                 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:  General Counsel

1310 Chesapeake Terrace

Sunnyvale, CA 94089

Phone:  408-716-4600

Fax:  408-716-4747

 

(b)                                 If to the Executive:

 

 

 

5

--------------------------------------------------------------------------------

 

18.                                 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 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 paragraph shall not operate, however, to sever the Executive’s obligation
to provide the binding release to all entities intended to be released
hereunder.

 

19.                                 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.

 

20.                                 Integration Clause.  This Agreement, the
Employment Agreement, and the Employee Invention Assignment and Confidentiality
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. The Indemnification Agreement between the Company and the Executive
shall not be affected by the existence of this Agreement, including this
Section 20 hereof, and shall remain in full force and effect.

 

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

 

22.                                 Section 409A of the Code.

 

(a)                                  The payments and benefits under this
Agreement are intended to 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)                                 Notwithstanding anything to the contrary in
this Agreement, no payment or benefits, including without limitation the amount
payable under Section 3 hereof, shall be paid to the Executive during the six
(6) month period following the Executive’s Separation from Service if the
Company determines that paying such amount at the time or times indicated in
this Agreement would be a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amount is
delayed as a result of the previous sentence, then on the first business day
following the end of such six (6) month period (or such earlier date upon which
such amount can be paid under Section 409A of the Code without resulting in a
prohibited distribution, including as a result of the Executive’s death), the

 

6

--------------------------------------------------------------------------------

 

Company shall pay the Executive a lump-sum amount equal to the cumulative amount
that would have otherwise been payable to the Executive during such period.

 

(c)                                  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.

 

(d)                                 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 11 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.

 

7

--------------------------------------------------------------------------------

 

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.

 

EXECUTIVE NAME

 

ACCURAY INCORPORATED

 

 

 

 

 

 

 

 

 

Executive Name

 

Company Officer

 

 

 

 

 

 

Date

 

 

Date

 

 

8

--------------------------------------------------------------------------------

 

EXHIBIT C

 

For purposes of this letter, “Change of 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 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 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, 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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