Exhibit 10.32


 


ACCURAY
INCORPORATED


 


PERFORMANCE
BONUS PLAN


 


1.             Purposes of the Plan.  The Plan is intended to increase stockholder
value and the success of the Company by motivating key executives to: (1) perform
to the best of their abilities, and (2) achieve the Company’s
objectives.  The Plan’s goals are to be
achieved by providing such executives with incentive awards based on the
achievement of goals relating to the performance of the Company or upon the
achievement of objectively determinable individual performance goals.  The Plan is intended to permit the payment of
bonuses that may qualify as performance-based compensation under Code section
162(m).


 


2.             Definitions.


 


(a)           “Award” means, with respect to each
Participant, the award determined pursuant to Section 8(a) below for
a Performance Period.  Each Award is
determined by a Payout Formula for a Performance Period, subject to the
Committee’s authority under Section 8(a) to eliminate or reduce the
Award otherwise payable.


 


(b)           “Base Salary” means as to any Performance
Period, the Participant’s annualized salary rate on the last day of the
Performance Period.  Such Base Salary
shall be before both (a) deductions for taxes or benefits, and
(b) deferrals of compensation pursuant to Company-sponsored plans.


 


(c)           “Board” means the Board of Directors of the
Company.


 


(d)           “Code” means the Internal Revenue Code of
1986, as amended.


 


(e)           “Committee” means the Compensation Committee
of the Board.


 


(f)            “Company” means Accuray Incorporated or any
of its subsidiaries (as such term is defined in Code Section 424(f)).


 


(g)           “Determination Date” means the latest
possible date that will not jeopardize a Target Award or Award’s qualification
as Performance-Based Compensation.


 


(h)           “Fiscal Quarter” means a fiscal quarter of
the Company.


 


(i)            “Fiscal Year” means a fiscal year of the
Company.


 


(j)            “Maximum Award” means
as to any Participant for any Performance Period, three million dollars.


 


(k)           “Participant” means
an executive officer of the Company participating in the Plan for a Performance
Period.


 


(l)            “Payout Formula”
means as to any Performance Period, the formula or payout matrix established by
the Committee pursuant to Section 7 in order to determine the Awards (if
any) to be paid to Participants.  The
formula or matrix may differ from Participant to Participant.


 


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(m)          “Performance-Based
Compensation” means compensation that is intended to qualify as “performance-based
compensation” within the meaning of Section 162(m).


 


(n)           “Performance Goals”
means the goal(s) (or combined goal(s)) determined by the Committee (in
its discretion) to be applicable to a Participant with respect to an
Award.  As determined by the Committee,
the performance measures for any performance period will be any one or more of
the following objective performance criteria, applied to either the Company as
a whole or, except with respect to stockholder return metrics, to a region,
business unit, affiliate or business segment, and measured either on an
absolute basis or relative to a pre-established target, to a previous period’s
results or to a designated comparison group, and, with respect to financial
metrics, which may be determined in accordance with United States Generally
Accepted Accounting Principles (“GAAP”), in accordance with accounting
principles established by the International Accounting Standards Board (“IASB
Principles”) or which may be adjusted when established to exclude any items
otherwise includable under GAAP or under IASB Principles: (i) cash flow
(including operating cash flow or free cash flow), (ii) revenue (on an
absolute basis or adjusted for currency effects), (iii) gross margin,
(iv) operating expenses or operating expenses as a percentage of revenue,
(v) earnings (which may include earnings before interest and taxes,
earnings before taxes and net earnings), (vi) earnings per share,
(vii) stock price, (viii) return on equity, (ix) total
stockholder return, (x) growth in stockholder value relative to the moving
average of the S&P 500 Index or another index, (xi) return on capital,
(xii) return on assets or net assets, (xiii) return on investment,
(xiv) economic value added, (xv) operating profit or net operating
profit, (xvi) operating income, (xvii) operating margin,
(xviii) market share, (xix) contract awards or backlog,
(xx) overhead or other expense reduction, (xxi) credit rating, (xxii) objective
customer indicators, (xxiii) new product invention or innovation,
(xxiv) attainment of research and development milestones, (xxv) improvements
in productivity, (xxvi) attainment of objective operating goals, (xxvii) contingent
or non-contingent orders; and (xxviii) growth rates in any of the
performance criteria listed in sections (i) through (xxvii) herein.


 


(o)           “Performance Period”
means any Fiscal Quarter or Fiscal Year, or such other longer period, as
determined by the Committee in its sole discretion.


 


(p)           “Plan” means this
Performance Bonus Plan.


 


(q)           “Plan Year” means the
Company’s fiscal year.


 


(r)            “Section 162(m)”
means Section 162(m) of the Code, or any successor to Section 162(m),
as that Section may be interpreted from time to time by the Internal
Revenue Service, whether by regulation, notice or otherwise.


 


(s)           “Target Award” means
the target award payable under the Plan to a Participant for the Performance
Period, expressed as a percentage of his or her Base Salary or a specific
dollar amount, as determined by the Committee in accordance with
Section 6.


 


3.             Plan Administration.


 


(a)           The Committee shall be
responsible for the general administration and interpretation of the Plan and
for carrying out its provisions.  Subject
to the requirements for qualifying compensation as Performance-Based
Compensation, the Committee may delegate specific administrative tasks to
Company employees or others as appropriate for proper administration of the
Plan.  Subject to the limitations on
Committee discretion imposed under Section 162(m) of the Code, the
Committee shall 


 


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have such powers as may be
necessary to discharge its duties hereunder, including, but not by way of
limitation, the following powers and duties, but subject to the terms of the
Plan:


 


(i)           discretionary authority to
construe and interpret the terms of the Plan, and to determine eligibility,
Awards and the amount, manner and time of payment of any Awards hereunder;


 


(ii)           to prescribe forms and
procedures for purposes of Plan participation and distribution of Awards; and


 


(iii)          to adopt rules, regulations
and bylaws and to take such actions as it deems necessary or desirable for the
proper administration of the Plan.


 


(b)           Any rule or decision by
the Committee that is not inconsistent with the provisions of the Plan shall be
conclusive and binding on all persons, and shall be given the maximum deference
permitted by law.


 


4.             Eligibility.  The employees eligible to participate in the
Plan for a given Performance Period shall be executive officers of the Company
who are designated by the Committee in its sole discretion.  No person shall be automatically entitled to
participate in the Plan.


 


5.             Performance Goal
Determination.  The
Committee, in its sole discretion, shall establish the Performance Goals for
each Participant for the Performance Period. 
Such Performance Goals shall be set forth in writing prior to the
Determination Date.


 


6.             Target Award Determination.  The Committee, in its sole discretion, shall
establish a Target Award for each Participant. 
Each Participant’s Target Award shall be determined by the Committee in
its sole discretion, and each Target Award shall be set forth in writing prior
to the Determination Date.


 


7.             Determination of Payout
Formula or Formulae.  On or prior
to the Determination Date, the Committee, in its sole discretion, shall
establish a Payout Formula or Formulae for purposes of determining the Award
(if any) payable to each Participant. 
Each Payout Formula shall (a) be set forth in writing prior to the
Determination Date, (b) be based on a comparison of actual performance to
the Performance Goals, (c) provide for the payment of a Participant’s
Target Award if the Performance Goals for the Performance Period are achieved,
and (d) provide for an Award greater than or less than the Participant’s
Target Award, depending upon the extent to which actual performance exceeds or
falls below the Performance Goals. 
Notwithstanding the preceding, in no event shall a Participant’s Award
for any Performance Period exceed the Maximum Award.


 


8.             Determination of Awards;
Award Payment.


 


Determination and Certification.  After the end of each Performance Period, the
Committee shall certify in writing (which may be by approval of the minutes in
which the certification was made) the extent to which the Performance Goals
applicable to each Participant for the Performance Period were achieved or
exceeded.  The Award for each Participant
shall be determined by applying the Payout Formula to the level of actual
performance that has been certified by the Committee.  Notwithstanding any contrary provision of the
Plan, the Committee, in its sole discretion, may eliminate or reduce the Award
payable to any Participant below that which otherwise would be payable under
the Payout Formula but shall not have the right to increase the Award above
that which would otherwise be payable under the Payout Formula.


 


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Right to Receive Payment.  Each Award under the Plan shall be paid
solely from the general assets of the Company. 
Nothing in this Plan shall be construed to create a trust or to
establish or evidence any Participant’s claim of any right to payment of an
Award other than as an unsecured general creditor with respect to any payment
to which he or she may be entitled.  A
Participant needs to be employed by the Company through the payment date in
order to be eligible to receive an Award payout hereunder.


 


Form of Distributions.  The Company shall distribute all Awards to
the Participant in cash.


 


Timing of Distributions.  Subject to Section 8(e) below, the
Company shall distribute amounts payable to Participants as soon as is
practicable following the determination and written certification of the Award
for a Performance Period.


 


Deferral.  The
Committee may defer payment of Awards, or any portion thereof, to Covered
Employees as the Committee, in its discretion, determines to be necessary or
desirable to preserve the deductibility of such amounts under
Section 162(m), but only in compliance with Section 409A of the
Code.  In addition, the Committee, in its
sole discretion, may permit a Participant to defer receipt of the payment of
cash that would otherwise be delivered to a Participant under the Plan.  Any such deferral elections shall be subject
to such rules and procedures as shall be determined by the Committee in
its sole discretion and in compliance with Section 409A of the Code.


 


(a)           Recoupment.
Notwithstanding anything to the contrary set forth in the Plan or any Award, in
the event of a restatement of incorrect financial results, the Board will
review the conduct of executive officers in relation to the restatement.  If the Board determines that an executive
officer has engaged in misconduct, or otherwise violated the Company’s Code of
Conduct and Ethics for Employees, Agents and Contractors, and that such
misconduct or violation contributed to such restatement, then the Board may, in
its discretion, take appropriate action to remedy the misconduct or violation,
including, without limitation, seeking reimbursement of any portion of any
performance-based or incentive compensation paid or awarded to the employee
that is greater than would have been paid or awarded if calculated based on the
restated financial results, to the extent not prohibited by governing law. For
this purpose, the term “executive officer” means executive offers as defined by
the Securities Exchange Act of 1934, as amended. Any such action by the Board
would be in addition to any other actions the Board of the Company may take
under the Company’s policies, as modified from time to time, or any actions
imposed by law enforcement, regulators or other authorities.  If the Board takes any such action,
Participants shall be required to reimburse the Company such amounts as
directed by the Board, in its sole discretion.


 


9.             Term of Plan.  Subject to its approval at the 2009 annual
meeting of the Company’s stockholders, the Plan shall first apply to the 2011
Plan Year.  Once approved by the Company’s
stockholders, the Plan shall continue until terminated under Section 10 of
the Plan.


 


10.             Amendment and Termination of
the Plan.  The
Committee may amend, modify, suspend or terminate the Plan, in whole or in
part, at any time, including the adoption of amendments deemed necessary or
desirable to correct any defect or to supply omitted data or to reconcile any
inconsistency in the Plan or in any Award granted hereunder; provided, however,
that no amendment, alteration, suspension or discontinuation shall be made
which would (i) impair any payments to Participants made prior to such
amendment, modification, suspension or termination, unless the Committee has
made a determination that such amendment or modification is in the best
interests of all persons to whom Awards have theretofore been granted; provided
further, however, that in no event may such an amendment or modification result
in an increase in the amount of compensation payable pursuant to such 


 


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Award
or (ii) cause compensation that is, or may become, payable hereunder to
fail to qualify as Performance-Based Compensation.  To the extent necessary or advisable under
applicable law, including Section 162(m) of the Code, Plan amendments
shall be subject to stockholder approval. 
At no time before the actual distribution of funds to Participants under
the Plan shall any Participant accrue any vested interest or right whatsoever
under the Plan except as otherwise stated in this Plan.


 


11.             Withholding.  Distributions pursuant to this Plan shall be
subject to all applicable federal and state tax and withholding requirements.


 


12.             At-Will Employment.  No statement in this Plan should be construed
to grant any employee an employment contract of fixed duration or any other
contractual rights, nor should this Plan be interpreted as creating an implied
or an expressed contract of employment or any other contractual rights between
the Company and its employees.  The
employment relationship between the Company and its employees is terminable
at-will.  This means that an employee of
the Company may terminate the employment relationship at any time and for any
reason or no reason.


 


13.             Successors.  All obligations of the Company under the
Plan, with respect to awards granted hereunder, shall be binding on any
successor to the Company,  whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business or assets of the Company.


 


14.             Indemnification.  Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from
(a) any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan or any award, and (b) from any and all amounts paid by him
or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, by
contract, as a matter of law, or otherwise, or under any power that the Company
may have to indemnify them or hold them harmless.


 


15.             Nonassignment.  The rights of a Participant under this Plan
shall not be assignable or transferable by the Participant except by will or the
laws of intestacy.


 


16.
            Governing Law.  The Plan shall be governed by the laws of the
State of California, without regard to conflicts of law provisions thereunder.


 


*  *  * 
*  *


 


I
hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of Accuray Incorporated on September 24, 2009.


 


*  *  * 
*  *


 


I
hereby certify that the foregoing Plan was approved by the stockholders of
Accuray Incorporated on November 20, 2009.


 


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*  *  * 
*  *


 


I
hereby certify that Board of Directors of Accuray Incorporated amended the
foregoing Plan to include Section 8(f) and such amendment was
approved on August 24, 2010.


 


 


	
   

  	
  /s/ Darren J. Milliken

  
	
   

  	
  Corporate Secretary —
  Darren J. Milliken

  



 


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