Document:

exv10w29

 

Exhibit 10.29

CONFIDENTIALITY AGREEMENT

     THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is executed and made effective as of the ___
day of ___, 2006 by and between by and between TomoTherapy Incorporated, a Wisconsin
corporation (the “Company”), and the undersigned employee (“Employee”).

RECITALS

     The Company is engaged in the highly-competitive business of developing and selling products
and services that deliver and/or support the imaging, planning, delivery, or verification of
radiation therapy and/or radiation surgery to patients with cancer and other diseases treated with
radiation therapy and/or radiation surgery. Employee desires to be employed by or continued to be
employed by the Company, and acknowledges he or she will have access to certain knowledge and
information developed by and for the Company at great expense and that is kept and protected as
confidential and that is essential for carrying out the Company’s business in a highly
competitive market.

     Employment with the Company is contingent upon Employee’s execution of this Agreement. In
consideration for being offered employment or continued employment with the Company, and/or for
other consideration, such as stock options, salary increases or the like, Employee accepts this
Agreement.

     In consideration of the recitals and agreements set forth herein, Employee and Company agree
that:

     1. Nondisclosure of Confidential Information. Except as required in the conduct of
the Company’s business or as expressly authorized in advance and in writing on behalf of the
Company, Employee shall not use or disclose, directly or indirectly, any Confidential Information
during such time that Employee is employed by the Company (the “Period of Employment”). In
addition, for a period of two (2) years following the Period of Employment, Employee shall not use
or disclose, directly or indirectly, any Confidential Information within the geographical area in
which such use or disclosure could harm the Company’s existing or potential business interests.
This prohibition does not apply to Confidential Information after it has become generally known in
the industry in which the Company conducts its business.

     2. Nondisclosure of Trade Secrets. During the Period of Employment, Employee shall do
what is reasonably necessary to prevent unauthorized misappropriation or disclosure and threatened
misappropriation or disclosure of the Company’s Trade Secrets and, after the Period of Employment,
Employee shall not use or disclose the Company’s Trade Secrets as long as they remain, without
misappropriation, Trade Secrets.

     3. General Know-How. Nothing in this Agreement shall be deemed to prevent Employee’s
post-employment use of Employee’s general knowledge and skills acquired or enhanced during the
Period of Employment or to prohibit Employee from seeking other employment after the
Period of Employment, so long as such use or employment does not violate the provisions of this
Agreement.

     4. Delivery of Materials to Company. Immediately upon termination of Employee’s
employment, Employee shall deliver to the Company all written, recorded, and graphical material,
documents, hardware, software and items relating to the business of the Company (and copies
thereof) (other than owned by Employee) in Employee’s possession or under Employee’s control
regardless of whether such materials, documents and items contained Confidential Information.

     5. Representations and Warranties. Employee represents and warrants (i) that Employee
has no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with
Employee’s undertaking of a relationship with the Company, and (ii) that Employee has not entered
into and will not enter into any agreement (whether oral or written) in conflict with this
Agreement. Employee’s representations, warranties, and obligations contained in this Agreement
shall survive after the Period of Employment.

     6. Change in Employment Status. The covenants of this Agreement shall remain in force
in the event that Employee’s employment status changes within the Company or changes from
being employed by the Company to being employed by an existing or future subsidiary or
affiliate of the Company. In the event of a change to such subsidiary and affiliate then the
subsidiary or affiliate shall have the same rights and the same protections, without further
documentation or agreement, as enjoyed by the company under this Agreement.

 

 

     7. Injunctive Relief; Breach. Employee acknowledges that failure to carry out any
obligation under this Agreement, or a breach of any provision herein, will constitute immediate and
irreparable damage to the Company, which cannot be fully and adequately compensated in money
damages and which will warrant preliminary and other injunctive relief, an order for specific
performance, and other equitable relief. Such remedy, however, shall be cumulative and
nonexclusive and shall be in addition to any other remedy to which the parties may be entitled.

     8. Assignment. Neither this Agreement nor any rights or duties of Employee hereunder
shall be assignable by Employee, and any such purported assignment shall be void. The Company may
assign all or any of its rights hereunder by providing notice to Employee.

     9. Entire Agreement; Amendment. This Agreement constitutes the complete understanding
between Employee and the Company on this subject and may not be modified or amended,
except by writing and executed by a duly authorized representative of the Company and by Employee.
This Agreement is intended to be the final, complete, and exclusive statement of the terms of the
parties’ agreements regarding these subjects and supersedes all other prior and contemporaneous
agreements and statements on these subjects.

     10. 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. Any waiver by either party must be in writing and signed by a representative who has the
authority to bind such party.

     11. Invalidity of any Provision. The provisions of this Agreement are severable, it
being the intention of the parties hereto that should any provision hereof be invalid or
unenforceable, such invalidity or unenforceability of any provisions shall not effect the remaining
provisions hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provision or provisions were omitted.

     12. Governing Law; Construction. This Agreement shall be governed by the internal
laws of the State of Wisconsin and construed without regard to any rules of construction concerning
the draftsman hereof. The parties irrevocably consent to the sole and exclusive jurisdiction and
venue in the appropriate state or federal court in Wisconsin.

     13. Notices. Any notice, request, consent or approval required or permitted to be
given under this Agreement or pursuant to law shall be sufficient if it is in writing, and if and
when it is hand delivered, faxed, or sent by regular mail, with postage prepaid, to Employee’s
residence (as noted in the Company’s records), or to the Company’s principal office, as the case
may be.

     14. Employee Acknowledgment. Employee acknowledges that Employee has read and
understands this Agreement, and that Employee has entered into it freely and voluntarily based on
Employee’s own judgment and not on any representations or promises other than those contained in
this Agreement.

     Therefore, the parties hereto have executed this Agreement as of the date first written above.

TomoTherapy Incorporated

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Employee Signature
	Title:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Employee (print name)

2

 

APPENDIX A

Definitions

“Confidential Information” means information, to the extent it is not a Trade Secret, which is
possessed by or developed for the Company and which relates to the Company’s existing or potential
business or technology, which information is generally not known to the public and which
information the Company seeks to protect from disclosure to its existing or potential competitors
or others, including, without limitation, business plans, strategies, existing or proposed bids,
costs, technical developments, existing or proposed research projects, financial or business
projections, investments, marketing plans, negotiation strategies, training information and
materials, information generated for client engagements and information stored or developed for use
in or with computers. Confidential Information also includes information received by the Company
from others which the Company has an obligation to treat as confidential, including all information
obtained in connection with client engagements and partnering arrangements.

“Trade Secret” means all information possessed by or developed for the Company, including, without
limitation, a compilation, program, device, method, system, technique or process, to which all of
the following apply: (i) the information derives independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use and (ii) the information is the
subject of efforts to maintain secrecy that are reasonable under the circumstances.

3exv10w30

 

Exhibit 10.30

Variable Pay Plan

TomoTherapy Inc.

 

 

 

 

 

 

 

 

Certain
performance-related confidential data omitted.
Omissions are designated as [  *  ].

 

 

About This Material

This document is intended to be used to describe the terms and goals of TomoTherapy’s variable
pay plan. The draft of this document must be approved by the Compensation Committee of the Board of
Directors before being implemented as a formal compensation program.

 

 

Contents

	 	 	 	 	 
	Variable Pay Guidelines

	 	 	1	 
	 
	 	 	 	 
	Variable Pay Program

	 	 	2	 
	 
	 	 	 	 
	Plan Administration

	 	 	8	 

 

 

Variable Pay Guidelines

 

 

Variable Pay Guidelines

Variable pay is that portion of compensation that is contingent upon the organizational
results of TomoTherapy. TomoTherapy will share a portion of its business success above a threshold
performance level with all employees.

Variable pay must be re-earned each performance period (in this case annually). Variable pay does
not increase base pay. It is an incentive to motivate all employees to focus on the corporate goals
and superior customer service.

The plan performance measures and weightings and target incentive opportunities will evolve over
time as TomoTherapy grows and changes in the future. At this time, goals will be measured at the
organizational level to determine if the plan will pay out and the amount of the plan payout.

 

 

Variable Pay Program

 

 

Variable Pay Program

Eligibility

Every active, full-time TomoTherapy employee will be eligible to participate in the variable pay
program except those TomoTherapy non-executive employees who participate in a sales commission
plan. Employees must be hired by September 30th (end of the third quarter) to be
eligible to participate. Part-time employees who are eligible for benefits will also be eligible to
participate in the plan provided that they are hired by September 30th. Temporary
employees are not eligible to participate in the plan.

Participation

If TomoTherapy achieves its organizational goals, all eligible employees will receive an incentive
payout if they are:

	•	 	Employed by TomoTherapy on the incentive payout date; and

	•	 	Not on a written corrective plan or higher during the performance period.

Part-time employees and mid-year hires employed prior to September 30th will receive a prorated
incentive payment based on their earnings during the plan year.

In addition, eligible employees on documented and approved leave, as well as eligible employees
retiring during the fiscal year, will receive an incentive payout based on their earnings during
the plan year and contingent upon organizational performance.

Performance Measures

The performance measures for this plan are intended to balance the need to:

	•	 	Focus on business results,

	•	 	Provide goals that all employees understand, and

	•	 	Ensure that the plan is easy to administer.

The performance measures chosen for the plan are:

	•	 	Operating income will be the trigger measure. This means that if the organization does
not achieve its operating income goal, no plan payout will be made. This approach is
taken because operating income is a measure of how much of a payout TomoTherapy can
afford to pay.

 

 

This measure can be impacted by any employee. Some avenues for reducing operating expenses or
cost savings include:

	 	3⁄4	 	Reducing waste,
	 
	 	3⁄4	 	Doing more with less, or
	 
	 	3⁄4	 	Improving processes to accomplish tasks in less time with fewer process steps or with
fewer resources.

	•	 	Reliability, as defined and measured as up-time. This measure is intended to demonstrate
production improvements, appropriate levels of maintenance, and timely repairs. Reliability
will be used as a multiplier to provide an opportunity for lesser or greater plan payout
potential.
	 
	 	 	We want to focus on reliability as one of the measures as reliability is fundamental to our
positive market image. It will significantly impact our future ability to grow both revenues and
operating income.

Funding Mechanism

The performance measure of operating margin is vitally important to the organization as it grows,
and funding for the plan will be based on threshold operating income. In 2007, these goals will be:

	 	 	 	 	 	 	 	 	 
	Organizational	 	Operating	 	Plan Funding
	Performance	 	Income Goal	 	Level
	 
	[*]%
	 	$	[*]M	 	 	 	[*]	%
	[*]%
	 	$	[*]M	 	 	 	[*]	%
	[*]%
	 	$	[*]M	 	 	 	[*]	%
	 
	 	 	 	 	 	 	 	 
	 

[*]

 

 

Incentive Modifier

Because reliability is a measure that our customers and the marketplace focus on closely, we are
adding a modifier related to our achievement of reliability goals. The modifier can increase or
decrease the amount of payout employees receive if operating margin and revenue goals are achieved.

Incentive targets will be modified to reflect the achievement of the reliability measure “up-time”
as currently calculated. Up-time targets are described in the following table. Other measures may
be used as a modifier in future plan designs as market demands dictate.

	 	 	 	 	 	 	 
	Target Achievement	 	Target	 	Modifier
	 
	Below Minimum

	 	Less than [*]%
	 	[*] (in other words, there
will be a lower payment to
reflect below 2006
reliability results
performance)
	 
	 	 	 	 	 	 
	Minimum

	 	 	[*]%	 	 	[*] (in other words, there
will be no adjustment if
achievement is maintained at
prior year’s level)
	 
	 	 	 	 	 	 
	Target

	 	[*]% up-time
	 	[*] (in other words, the
payout will increase by [*]% to
reflect higher than expected
reliability)
	 
	 	 	 	 	 	 
	Maximum

	 	[*]% up-time
	 	[*] (in other words, the
payout will increase by [*]%
to reflect higher than
expected reliability)
	 

Employee Levels and Target Opportunity

The target incentive is the incentive paid to all employees when organizational performance targets
are met. Incentive targets may change over time as market conditions change. Participating
employees will receive a payout under the plan if organization performance warrants. The targeted
payout will be based on an employee’s role in the organization as defined in the following table.

	 	 	 	 	 	 	 
	 	 	 	 	Target
	Level	 	Definition	 	Opportunity
	 
	1

	 	Contributes to task-related activities in support of tactical implementation
of short-term team goals.

	 	 	[*]	%
	 

	 	Has limited knowledge of concepts, practices, and procedures of particular
field of specialization. Develops solutions to problems of limited scope and
complexity following established policies and procedures. Works under general
supervision. Role is narrow, specific in impact; and task-oriented.	 	 	 	 
	 
	 	 	 	 	 	 
	2

	 	Contributes to the tactical implementation of short term business goals. May
have some influence on the overall goals of the team.

	 	 	[*]	%
	 

	 	Responsible for applying the fundamental concepts, practices, and procedures
of particular field of specialization to the completion of varied and
moderately difficult assignments. Develops solutions based on general
technical knowledge and	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Target
	Level	 	Definition	 	Opportunity
	 
	 

	 	experience. Understands related departments or
functions. Participates in determining objectives of assignments. Little or
moderate supervision required. May or may not have direct reports of limited
number. Has direct impact on short-term departmental goals.	 	 	 	 
	 
	 	 	 	 	 	 
	3

	 	Develops and implements tactical solutions to achieve short term business
goals. Manages, directs or monitors daily operations for workers or teams
engaged in a single task or multiple, but closely related tasks. Directly
impacts the short-term performance
of the unit(s) to which s/he is assigned.

	 	 	[*]	%
	 

	 	Responsible for monitoring day-to-day operations for assigned work
teams/project areas. Provides direction, leadership, coaching, and technical
expertise to group of employees. Has impact/influence on budgeting,
controlling costs, planning, scheduling, and procedural/policy changes.	 	 	 	 
	 
	 	 	 	 	 	 
	4

	 	Translates long- and short-term business goals into tactical, functional
initiatives. Manages managers or is an individual contributor viewed as the
highest level expert within field. Directly impacts the short-term success of
a function or operation. Influences the development of overall objectives of
the function or operation.

	 	 	[*]	%
	 

	 	Within a department or line of business, has direct accountability for
specific function or discipline of significant scope or technical
requirements. Trains and mentors staff; estimates staffing needs, assigns
work, and ensures projects are completed on schedule following established
procedures and schedules. Consults with manager for extraordinary and
exceptional issues. Expected to bring long-term view/perspective to individual
projects.	 	 	 	 
	 
	 	 	 	 	 	 
	5

	 	Translates long-term strategy into long- and short-term goals for a line of
business or organization-wide department.

	 	 	[*]	%
	 

	 	Has oversight and accountability for implementation of long-term departmental
business strategies. Responsible for developing function’s or department’s
objectives to achieve long- and short-term plans. Ensures overall budgets,
schedules, and performance standards are realistically set and attained. Has
wide sphere of responsibility and knowledge and a direct impact on total
department’s ability to deliver against performance goals. Generally
accomplishes results through others/lower management levels. Expected to drive
teams toward optimum balance of long-term and short-term performance and
initiatives.	 	 	 	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Target
	Level	 	Definition	 	Opportunity
	 
	6

	 	Works cross-functionally to direct the total company towards achieving its
mission and goals. Also develops and directs the long term vision for a
specific function(s) in support of overall company mission.

	 	[*]%

	 

	 	Has shared accountability for total (global) company performance. Develops
long-term strategies in support of corporate business goals and has direct
accountability for overall operations in the department(s) s/he oversees.	 	 	 	 
	 
	 	 	 	 	 	 
	7

	 	Directs the overall vision, mission, strategic direction, and financial
results for the organization.

	 	 	[*]	%
	 

	 	Has ultimate accountability for company’s worldwide performance and reputation.	 	 	 	 

Performance Period

Performance for the 12 month period beginning January 1 will be considered for purpose of this
variable pay program. This time frame is considered the performance period. The performance period
coincides with TomoTherapy’s fiscal year.

Payout Frequency

Payouts for this plan will occur once a year if organizational performance warrants a payout.
Payouts will occur after the end of the fiscal year, once organizational results can be finally
determined for the fiscal year and determined payouts can be processed through payroll.

Board and Leadership Discretion

In all cases, the Board of Directors and management have the right, at their discretion, to adjust
incentive payouts for individual employees based on factors outside the stated goals of this plan.
Such adjustments may include recognition of above-and-beyond efforts of employees throughout the
fiscal year.

Communication of Variable Pay Plan

The variable pay plan goals and measures will be communicated as quickly as practical after the
Board of Directors has approved the variable pay plan. The organization’s leadership will provide
ongoing communication of progress toward the plan goals as possible on a quarterly basis. We will
also communicate year-end financial business results within the first quarter of the next fiscal
year.

 

 

Plan Administration

 

 

Plan Administration

Powers of the Board

Nothing in this plan constitutes a promise of employment or promise to deliver a given level of
compensation. The Board of Directors and Management have the right to cancel or discontinue this
plan at any time at their discretion. The Board of Directors, with input from Management, has broad
powers which include:

	•	 	Determining annually whether or not to recommend continuing the plan;

	•	 	Determining eligibility;

	•	 	Approving performance measures, threshold values, etc. for the applicable fiscal year;

	•	 	Approving plan funding and individual incentive awards;

	•	 	Resolving disputes or questions regarding the plan;

	•	 	Recommending amendment or termination of the plan as necessary during the fiscal year;

	•	 	Establishing the rules necessary to administer the plan;

	•	 	The Board will have discretion to construe and interpret the plan;

	•	 	All decisions of the Board will be final and binding on all persons; and

	•	 	The Board may at any time elect to amend, suspend, or terminate the plan.

Annual Program Review

TomoTherapy will review this variable pay plan on an annual basis to evaluate its impact on the
measures chosen and business success. This review process will begin in conjunction with the
business planning process in the fall with the goal of establishing any new measures or plan design
features during the first quarter of the new fiscal year.

As a result of this review process, the variable pay plan may change over time. Aspects of the
variable pay program that may be adjusted are, but not limited to:

	•	 	Employee participation and incentive opportunity;

	•	 	Performance measures—types of measures, level of organizational
performance measured, and weighting of measures; and

	•	 	Performance period and payout frequency.

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