EX-10.1






Exhibit 10.1




EMPLOYMENT AGREEMENT




THIS AGREEMENT is executed as of this 10th day of June, 2009, by and between TomoTherapy
Incorporated, a Wisconsin corporation (the “Company”), and Thomas E. Powell, an individual
(“Employee”).



RECITALS




The Company desires to employ Employee, and Employee desires to be employed by or continued to
be employed by the Company, on the terms and conditions set forth herein.



The parties believe it is in their best interests to make provision for certain aspects of
their relationship during and after the period in which Employee is employed by the Company.



NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the Company and Employee,



IT IS HEREBY AGREED AS FOLLOWS:



ARTICLE I

EMPLOYMENT




1.1 Term of Employment. The Company employs Employee, and Employee accepts employment by
the Company, for the period commencing on June 22, 2009 (the “Initial Employment Date”) and
ending on March 31, 2010, subject to earlier termination as hereinafter set forth in Article III
(the “Employment Term”). Following the expiration of the Employment Term, the Employment
Term shall be automatically renewed for successive one-year periods (collectively, the “Renewal
Terms”; individually, a “Renewal Term”) unless, at least 60 days prior to the
expiration of the Employment Term or the then current Renewal Term, either party provides the other
with a written notice of intention not to renew, in which case Employee’s employment with the
Company, and the Company’s obligations hereunder shall terminate as of the end of the Employment
Term or said Renewal Term, as applicable, except to the extent specifically provided herein. If
the Employment Term is renewed, the terms of this Agreement during such Renewal Term shall be the
same as the terms in effect immediately prior to such renewal, subject to any such changes or
modifications as mutually may be agreed between the parties as evidenced in a written instrument
signed by both the Company and Employee.



1.2 Position and Duties. Employee shall be employed in the position of Chief Financial
Officer and Treasurer, and shall be subject to the authority of, and shall report to, the Company’s
Chief Executive Officer. Employee’s duties and responsibilities shall include all those
customarily attendant to the position of Chief Financial Officer and Treasurer, and such other
duties and responsibilities as may be assigned by the Company’s Chief Executive Officer or the
Board of Directors. Employee shall devote Employee’s entire business time, loyalty, attention and
energies exclusively to the business interests of the Company while employed by the Company, and
shall perform his duties and responsibilities diligently and to the best of his ability.



ARTICLE II

COMPENSATION AND OTHER BENEFITS




2.1 Base Salary. The Company shall pay Employee a salary at the annual rate of $335,000
(“Base Salary”), payable in accordance with the normal payroll practices of the Company.



2.2 Performance Bonus. Employee will be eligible to earn an annual performance based bonus
for that portion of each full calendar year during which Employee is employed by the Company (a
“Bonus Year”), the terms and conditions of which as well as Employee’s entitlement thereto
shall be determined annually in the sole discretion of the Company’s Board of Directors or an
authorized committee thereof (the “Performance Bonus”). Notwithstanding the foregoing, for
fiscal year 2009, the Company agrees that Employee’s target Performance Bonus will be 50% of his
annual base salary. The Company further guarantees that Employee shall receive the prorate amount
of the 2009 Performance Bonus at the 50% target, regardless of the Company’s performance.
Employee must commence employment with the Company before October 1 of the Bonus Year in order to
be eligible for a Performance Bonus for that Bonus Year. Any Performance Bonus payable hereunder
shall be paid following the Bonus Year not later than the earlier of (i) 30 days following the
Company’s receipt of its annual audited financial report or (ii) March 15 of the year following the
Bonus Year.



2.3 Benefit Plans. Employee will be eligible to participate in the Company’s retirement
plans that are qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended
(“Code”), and in the Company’s welfare benefit plans that are generally applicable to all executive
employees of the Company (the “Plans”), in accordance with the terms and conditions
thereof. The Company intends to provide Employee for so long as he is employed by the Company
with: (a) portable term life insurance with a death benefit equal to twice the sum of Employee’s
current Base Salary and target Performance Bonus; provided, however, that the minimum benefit shall
equal at least $500,000; and (b) long-term disability insurance with an annual benefit equal to at
least 75% of the sum of Employee’s Base Salary and target Performance Bonus. Both the term life
insurance and long-term disability insurance are, however, subject to the underwriting process. To
the extent that the costs of such coverages materially exceed the average of such costs for other
executives at the Company, the Company reserves the right to modify the scope of coverage for
Employee, or not offer it at all.



2.4 Expenses. The Company shall reimburse Employee for all reasonable expenses incurred in
the course of the performance of Employee’s duties and responsibilities pursuant to this Agreement
and consistent with the Company’s policies with respect to travel, entertainment and miscellaneous
expenses, and the requirements with respect to the reporting of such expenses.



2.5 Vacation. Employee shall be entitled to a maximum of four weeks of vacation in any
calendar year in accordance with the Company’s general vacation policies for similarly situated
executive employees.



2.6 Relocation Assistance Benefits. Employee will receive the relocation assistance
benefits specified below. To the extent Employee incurs taxable income related to any relocation
benefits paid or provided by the Company, the Company shall pay to Employee an additional amount
(the “Gross-Up Payment”) such that the net amount retained by Employee, after reduction for any
federal, state and local income or employment tax on the Gross-up Payment, shall equal the amount
Employee incurred in federal, state, and local income taxes on such relocation benefits. In
calculating tax on the relocation benefits and the Gross-Up payment, the highest applicable
marginal rate of federal, state, or local income taxation shall be assumed for the calendar year in
which the benefits or Gross-up Payment, as applicable, is provided.



All relocation benefits set forth in this section 2.6 are subject to repayment by the Employee
in the event of termination of the Agreement under Sections 3.1(c) or 3.1(e) within two years of
the Initial Employment Date on the following schedule: 100% repayment if termination occurs within
the first six months of employment, 50% repayment if termination occurs after six months and within
twelve months of employment, and 25% repayment if termination occurs in the second year of
employment.



(a) The Company will pay for reasonable and customary costs of the packing, shipping, and
unpacking services of Employee’s household belongings from the current residence to a residence in
Wisconsin. To the extent necessary, the Company will also pay reasonable and customary costs of
household goods storage for a period of up to six months.



(b) The Company will provide a lump sum payment of $34,500 (less applicable tax deductions)
intended to cover expenses incurred by Employee for the first six months of commuting to and from
his current residence and temporary living in Madison, Wisconsin. This sum shall be payable within
thirty days after the Initial Employment Date. If Employee has not relocated within that time
period, the Company will provide an additional lump sum payment of $34,500 (less applicable tax
deductions) to cover up to an additional six months of commuting and/or temporary living expenses.
This second payment will be a prorate amount of the $34,500 based on Employee’s move date if it
occurs within the January-March 2010 period. The full $34,500 payment amount, if due, to be
payable within thirty days after March 31, 2010.



(c) The Company will reimburse Employee for reasonable and customary closing costs associated
with the sale of his current residence and the purchase of a new residence in Wisconsin, including
items such as real estate brokerage, attorneys’ and mortgage fees, and title search and title
insurance costs.



In order to comply with the requirements of Section 409A of the Code, any reimbursement
payable to Employee pursuant to this Section 2.6 shall be paid not later than the last day of the
calendar year following the calendar year in which Employee incurred the reimbursable expense. Any
amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year
shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be
provided, during any other calendar year. The right to any reimbursement or in-kind benefit
pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.



2.7 Equity Grants.



(a) The Chief Executive Officer will, prior to the Initial Employment Date, recommend to the
Company’s Board of Directors and its Compensation Committee that Employee be granted a
one-time stock option award of 100,000 shares to be effective on the Initial Employment Date.




(b) The Chief Executive Officer will, prior to the Initial Employment Date, recommend to
the Company’s Board of Directors and its Compensation Committee that Employee be granted a one-time
restricted stock award of 100,000 shares of restricted stock to be effective on the Initial
Employment Date.



All grants of equity awards will be subject to vesting schedules, pricing dates and other terms and
conditions as set by the Board of Directors and as set forth in the Company’s equity plans and
standard award agreements.



ARTICLE III

TERMINATION




3.1 Right to Terminate; Automatic Termination.



(a) Termination by Company Without Cause. Since Employee is an at-will employee, subject
to Section 3.2, the Company may terminate Employee’s employment and all of the obligations under
this Agreement at any time and for any reason.



(b) Termination by Employee for Good Reason. Subject to Section 3.2, Employee may
terminate his employment obligation hereunder for “Good Reason” (as hereinafter defined) if
Employee gives written notice thereof to the Company (which notice shall specify the grounds upon
which such notice is given) within 90 days of the initial occurrence of a “Good Reason” event and
the Company fails, within 90 days of receipt of such notice, to cure or rectify the grounds for
such Good Reason termination set forth in such notice. If the Company fails to so cure or rectify,
the Employee’s termination of employment shall not be deemed for “Good Reason” unless the Employee
terminates employment within one year of the initial occurrence of Good Reason. “Good Reason”
shall mean any of the following: (i) a material reduction of the Employee’s duties and
responsibilities hereunder; (ii) a material adverse change in the working conditions of the
Employee including, without limitation, relocation of Employee’s principal workplace over 50 miles
from the Company’s existing workplace, without the consent of Employee; or (iii) the Company’s
material breach of the Agreement.



(c) Termination by Company For Cause. Subject to Section 3.2, the Company may terminate
Employee’s employment and all of the Company’s obligations under this Agreement at any time for
“Cause” (as defined below) by giving notice to Employee stating the basis for such termination,
effective immediately upon giving such notice or at such other time thereafter as the Company may
designate. “Cause” shall mean any of the following: (i) Employee has materially breached this
Agreement or any other agreement to which Employee and the Company are parties or has materially
breached any other obligation or duty owed to the Company, which material breach remains uncured
for 30 days after Employee receives notice thereof from the Chief Executive Officer; (ii) Employee
has committed gross negligence, willful misconduct or any material violation of law or the
Company’s Comprehensive Corporate Compliance Program in the performance of Employee’s duties to the
Company; (iii) Employee has engaged in any willful misconduct likely to result in material
discredit to or material loss of business, reputation or goodwill of the Company; (iv) Employee has
failed to follow in any material respect lawful instructions from the officer or body to whom
Employee reports concerning the operations or business of the Company, which material failure to
follow lawful instructions remains uncured for 30 days after Employee receives notice thereof from
the Chief Executive Officer; (v) Employee has been convicted of, or pled nolo contendere to a
felony; (vi) Employee has misappropriated funds or property of the Company; or (vii) Employee has
attempted to obtain a personal profit from any transaction in which the Employee knows the Company
has an interest, and which constitutes a corporate opportunity of the Company or is adverse to the
interests of the Company, unless the transaction was approved in writing by the Company’s Chief
Executive Officer after full disclosure of all details relating to such transaction.



(d) Termination Upon Death or Disability. Subject to Section 3.2, Employee’s employment
and the Company’s obligations under this Agreement shall terminate: (i) automatically, effective
immediately and without any notice being necessary, upon Employee’s death; or (ii) in the event of
the disability of Employee, by the Company giving notice of termination to Employee. For purposes
of this Agreement, “disability” means the inability of Employee, due to a physical or mental
impairment, for 180 days (whether or not consecutive) during any period of 360 days to perform,
with reasonable accommodation, the essential functions of the work contemplated by this Agreement.
In the event of any dispute as to whether Employee is disabled, the matter shall be determined by
the Company’s Chief Executive Officer in consultation with a physician satisfactory to the Company,
and Employee shall cooperate with the efforts to make such determination. Any such determination
shall be conclusive and binding on the parties. Any determination of disability under this Section
3.1(d) is not intended to alter any benefits any party may be entitled to receive under any
long-term disability insurance policy carried by either the Company or Employee with respect to
Employee, which benefits shall be governed solely by the terms of any such insurance policy.
Nothing in this subsection shall be construed as limiting or altering any of Employee’s rights
under state workers compensation laws or state or Federal family and medical leave laws.



(e) Termination Upon Resignation or Retirement. Since Employee is an at-will
employee, subject to Section 3.2, Employee may terminate employment and all of the obligations
under this Agreement at any time and for any reason. If Employee terminates employment as a
result of retirement from the Company, Employee shall provide the Company with at least 90 days’
notice.



3.2 Rights Upon Termination; Non-Renewal by Company.



(a) Section 3.1(a) and 3.1(b) Termination. If Employee’s employment is terminated pursuant
to Section 3.1(a) or 3.1(b) hereof or upon expiration of this Agreement following the Company’s
notice of its intention not to renew pursuant to Section 1.1, Employee shall have no further rights
against the Company hereunder, except that the Company, subject to Section 3.2(g), will:




(i) within 10 days following the termination of employment, pay Employee (a) any unpaid
Base Salary with respect to the period prior to the effective date of termination, (b)
reimbursement of expenses to which Employee is entitled under Section 2.4 hereof, and
payment of any accrued but unused vacation to which Employee is entitled to under Section
2.5 hereof (collectively, the “Accrued Obligations.”).




(ii) subject to Section 3.2(f), pay Employee a lump-sum severance payment (the
“Severance Payment”) 53 days following the Employee’s termination of employment, in an
amount equal to the sum of: (a) 12 months’ of Employee’s annual base salary as in effect on
the date of termination; and (b) the average of the two annual bonuses paid to Employee for
the two years immediately preceding the year in which such termination occurs; provided that
if the Employee was not employed for the period required to be eligible for two prior full
year annual bonuses, then the amount in this subparagraph (ii) shall be the amount of the
annual bonus, if any, received for the year prior to the year in which termination of
employment occurred.




(iii) subject to Section 3.2(f), pay the COBRA premium for group health care coverage
for Employee and Employee’s eligible dependents, as applicable and to the extent eligible,
provided that Employee properly elects COBRA continuation coverage, for up to twelve (12)
months immediately following the date of such termination of Employee’s employment, except
that payment of such premiums shall cease if and when the Employee (and Employee’s eligible
dependents) become eligible for medical, hospital and health coverage under a plan of a
subsequent employer; and




(iv) subject to Section 3.2(f), pay up to $10,000 for outplacement services, such
services to be used within two years of termination of employment.



(b) Section 3.1(c) and 3.1(e) Termination. If Employee’s employment is terminated pursuant
to Sections 3.1(c) or 3.1(e) hereof, Employee shall have no further rights against the Company
hereunder, except for the right to receive the Accrued Obligations.



(c) Section 3.1(d) Termination. If Employee’s employment is terminated pursuant to Section
3.1(d) hereof, Employee or Employee’s estate shall have no further rights against the Company
hereunder, except for the right to receive (i) the Accrued Obligations, (ii) payment of the COBRA
premium for group health care coverage for Employee and Employee’s eligible dependents, as
applicable and to the extent eligible, provided that Employee or Employee’s estate properly elects
COBRA continuation coverage, for up to twelve (12) months immediately following the date of such
termination of Employee’s employment, and (iii) the continuing rights under the life insurance
benefit under Section 2.3.



(d) Termination Pursuant to a Change of Control. If, within three (3) months before or
twenty four (24) months following a Change of Control, the Company terminates Employee’s employment
without Cause pursuant to Section 3.1(a), Employee terminates his employment for Good Reason
pursuant to Section 3.1(b) or upon expiration of this Agreement following the Company’s notice of
its intention not to renew pursuant to Section 1.1, Employee shall have no further rights against
the Company hereunder, except the Company will, subject to Section 3.2(g):




(i) pay the Employee the Accrued Obligations:




(ii) subject to Section 3.2(f), pay Employee a lump-sum severance payment (the
“Severance Payment”) 53 days following the termination of employment, in an amount equal to
the sum of: (a) 2.0 times Employee’s annual base salary as in effect on the date of
termination; and (b) 2.0 times the greater of (x) the average of the two annual bonuses paid
to Employee for the two years preceding the year in which such termination occurs, provided
that if the Employee was not employed for the period required to be eligible for two prior
annual bonuses, then the amount in this subparagraph (b)(x) shall be the amount of the
annual bonus, if any, received for the year prior to the year in which termination of
employment occurred, or (y) the target bonus for the year in which such termination occurs;
provided such lump sum shall be reduced by the amount of any lump sum payable under Section
3.2(a)(ii).




(iii) subject to Section 3.2(f), pay the full premium for group health care coverage
for Employee and Employee’s eligible dependents, as applicable and to the extent eligible,
provided that Employee properly elects COBRA continuation coverage, for the 24 month period
immediately following the date of such termination of Employee’s employment, except that
payment of such premiums shall cease if and when the Employee (and Employee’s eligible
dependents) become eligible for medical, hospital and health coverage under a plan of a
subsequent employer; and




(iv) subject to Section 3.2(f), pay up to $10,000 for outplacement services, provided
such payment shall be reduced by the amount of any payment under Section 3.2(a)(iv), and
provided further that such services are used within two years of termination of employment.



(e) Definition of Change of Control. As used herein, “Change of Control” shall mean
the occurrence of a “change in the ownership,” a “change in the effective control” or a “change in
the ownership of a substantial portion of the assets” of the Company, as determined in accordance
with this definition.  In determining whether an event shall be considered a “change in the
ownership,” a “change in the effective control” or a “change in the ownership of a substantial
portion of the assets” of the Company, the following provisions shall apply:




(i)     A “change in the ownership” of the Company shall occur on the date on which any
one person, or more than one person acting as a group, acquires ownership of stock of the
Company that, together with stock held by such person or group, constitutes more than 50% of
the total fair market value or total voting power of the stock of the Company, as determined
in accordance with Treasury Regulation § 1.409A-3(i)(5)(v).  If a person or group is
considered either to own more than 50% of the total fair market value or total voting power
of the stock of the Company, or to have effective control of the Company within the meaning
of part (b) of this definition, and such person or group acquires additional stock of the
Company, the acquisition of additional stock by such person or group shall not be considered
to cause a “change in the ownership” of the Company.




(ii)     A “change in the effective control” of the Company shall occur on either of
the following dates:




(A)     The date on which any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date of
the most recent acquisition by such person or persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the stock of the
Company, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vi). 
If a person or group is considered to possess 30% or more of the total voting power
of the stock of the Company, and such person or group acquires additional stock of
the Company, the acquisition of additional stock by such person or group shall not
be considered to cause a “change in the effective control” of the Company; or




(B)    The date on which a majority of the members of the Company’s Board of
Directors is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Company’s Board of
Directors before the date of the appointment or election, as determined in
accordance with Treasury Regulation § 1.409A-3(i)(5)(vi).




(iii)     A “change in the ownership of a substantial portion of the assets” of the
Company shall occur on the date on which any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 40% of the total gross fair market value of
all of the assets of the Company immediately before such acquisition or acquisitions, as
determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vii).  A transfer of
assets shall not be treated as a “change in the ownership of a substantial portion of the
assets” when such transfer is made to an entity that is controlled by the shareholders of
the Company, as determined in accordance with Treasury Regulation § 1.409A-3(i)(5)(vii)(B).



(f) Exclusive Remedy; Waiver and Release. To the extent permitted by applicable law, the
payments contemplated by this Section 3.2 shall constitute the exclusive and sole remedy for any
termination of Employee’s employment by the Company (whether pursuant to, or in violation of, the
terms of this Agreement). Employee covenants not to assert or pursue any remedies, other than an
action to enforce the payments due to Employee under this Agreement, at law or in equity, with
respect to any termination of employment, and shall execute a release and waiver on such terms and
conditions as the Company may require as a condition of entitlement to such payments. If any
applicable revocation period for such release and waiver has not expired before the date payment is
due to be made hereunder, such payment shall be forfeited.



(g) Limitation of Benefits. If any payments or benefits payable to the employee under this
Agreement or otherwise would be subject to the excise tax under Section 4999 of the Code, such
payments and/or benefits will be reduced to the extent necessary so that no amount will be subject
to such excise tax; provided that such reduction will only occur if the employee will be in a more
favorable, after-tax position than if no such reduction was made.



(h) Six Month Delay. If payment of any amount of “deferred compensation” (as defined
under Section 409A of the Code, after giving effect to the exemptions thereunder) is triggered by a
Separation from Service (as defined in Section 4.7) that occurs while the Employee is a “specified
employee” with respect to the Company (as defined under Section 409A of the Code and determined in
good faith), and if such amount is scheduled to be paid within six (6) months after such Separation
from Service, the amount shall accrue without interest and shall be paid the first business day
after the end of such six-month period, or, if earlier, within 15 days after the appointment of the
personal representative or executor of the Employee’s estate following the Employee’s death.



ARTICLE IV

GENERAL PROVISIONS




4.1 Notices. Any and all notices provided for in this Agreement shall be given in writing
and shall be deemed given to a party at the earlier of (i) when actually delivered to such party,
or (ii) when mailed to such party by registered or certified mail (return receipt requested) or
sent to such party by courier, confirmed by receipt, and addressed to such party at the address
designated below for such party as follows (or to such other address for such party as such party
may have substituted by notice pursuant to this Section 4.1):




	 	(a)	 	If to the Company:






TomoTherapy Incorporated


1240 Deming Way


Madison, WI 53717


Attn: General Counsel




	 	(b)	 	If to Employee:






ADDRESS ON FILE


Attn: Thomas E. Powell



4.2 Entire Agreement. This Agreement contains the entire understanding and the full and
complete agreement of the parties and supersedes and replaces any prior understandings and
agreements among the parties, with respect to the subject matter hereof, provided that the
Indemnity Agreement, the Confidentiality and Non-Competition (“Confidentiality Agreement”) and the
Assignment of Inventions Agreement (“Assignment Agreement”) between the Company and the Employee
entered into simultaneously with this Agreement are and shall remain in effect. 



4.3 Amendment. This Agreement may be altered, amended or modified only in writing, signed
by both of the parties hereto. Headings included in this Agreement are for convenience only and
are not intended to limit or expand the rights of the parties hereto. References to Sections
herein shall mean sections of the text of this Agreement, unless otherwise indicated.



4.4 Assignability. This Agreement and the rights and duties set forth herein may not be
assigned by Employee, but may be assigned by the Company, in whole or in part. This Agreement
shall be binding on and inure to the benefit of each party and such party’s respective heirs, legal
representatives, successors and assigns.



4.5 Severability. If any court of competent jurisdiction determines that any provision of
this Agreement is invalid or unenforceable, then such invalidity or unenforceability shall have no
effect on the other provisions hereof, which shall remain valid, binding and enforceable and in
full force and effect, and such invalid or unenforceable provision shall be construed in a manner
so as to give the maximum valid and enforceable effect to the intent of the parties expressed
therein.



4.6 Arbitration. Any controversy, dispute or claim arising out of or relating to this
Agreement (including, but not limited to, any claim regarding the scope or effect of this Section
and any claim that this Section is invalid or unenforceable), or the breach hereof, shall be
settled by a single arbitrator in binding arbitration conducted in Milwaukee, Wisconsin in
accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”)(or
such other arbitration service as the parties may agree upon), and judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator’s
decision shall be in writing. In addition to the Commercial Arbitration Rules of the AAA and
unless otherwise agreed to by the parties, the following rules shall apply:



(a) Each party shall be entitled to discovery exclusively by the following means: (i) requests
for admission, (ii) requests for production of documents, (iii) up to 15 written interrogatories
(with any subpart to be counted as a separate interrogatory), and (iv) depositions of no more than
six individuals.



(b) Unless the arbitrator finds that delay is reasonably justified or as otherwise agreed to
by the parties, all discovery shall be completed, and the arbitration hearing shall commence within
five months after the appointment of the arbitrator.



(c) Unless the arbitrator finds that delay is reasonably justified, the hearing will be
completed, and an award rendered within 30 days of commencement of the hearing.



The arbitrator’s authority shall include the ability to render equitable types of relief and, in
such event, any aforesaid court may enter an order enjoining and/or compelling such actions or
relief ordered or as found by the arbitrator. The arbitrator also shall make a determination
regarding which party’s legal position in any such controversy or claim is the more substantially
correct (the “Prevailing Party”) and the arbitrator shall require the other party to pay the legal
and other professional fees and costs incurred by the Prevailing Party in connection with such
arbitration proceeding and any necessary court action. In addition, the parties expressly agree
that a court of competent jurisdiction may enter a temporary restraining order or an order
enjoining a breach of the Assignment Agreement, the Confidentiality Agreement or any similarly
subsequently executed agreement between the parties, pending a final award or further order by the
arbitrator. Such remedy, however, shall be cumulative and nonexclusive, and shall be in addition
to any other remedy to which the parties may be entitled.



4.7 Separation from Service. “Separation from Service,” “termination of employment,” or
words of similar import shall mean, with respect to any payments of deferred compensation subject
to Section 409A of the Code, the Employee’s “separation from service” as defined in Section 409A of
the Code. For this purpose, a “separation from service” is deemed to occur on the date that the
Company and the Employee reasonably anticipate that the level of bona fide services the Employee
would perform after the date (whether as an employee or independent contractor) would permanently
decrease to a level that, based on the facts and circumstances would constitute a separation from
service; provided that a decrease to a level that is 50% or more of the average level of bona fide
services provided over the prior 36 months shall not be a Separation from Service, and a decrease
to a level that is 20% or less of the average level of such bona fide services shall be a
Separation from Service. The bona fide services taken into account for purposes of determining
whether there has been a Separation from Service shall be services performed for the Company and
any person or entity that would be considered a single employer with the Company under Section
414(b) or 414(c) of the Code; provided that, in applying Section 1563(a)(1),(2), and (3) of the
Code, the language “at least 50 percent” shall be used instead of “at least 80 percent;” and
further provided that “at least 20 percent” shall be used instead of “at least 50 percent” where
based on legitimate business criteria.



4.8 Waiver of Breach. The waiver by either party of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach by either party.



4.9 Governing Law; Construction. This Agreement shall be governed by the internal laws of
the State of Wisconsin, without regard to any rules of construction concerning the party
responsible for the drafting hereof.



IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written
above.



EMPLOYEE:



/s/ Thomas E. Powell


Thomas E. Powell



COMPANY:



TomoTherapy Incorporated



By: /s/ A. Sparks-Johnson

Alison Sparks-Johnson

Vice President, Human Resources