Document:

exv10w15

 

EXHIBIT 10.15

TIME SHARING AGREEMENT

     This Time Sharing Agreement is effective as of April 21, 2005 by and between Cozzens and
Cudahy Air Inc., with an address of 9100 N Swan Rd., Milwaukee Wisconsin 53224 (“Lessor”) and
Tomotherapy Inc. with an address of 1240 Deming Way, Madison, Wisconsin 53717 (“Lessee”).

     WHEREAS, Lessor is the owner of that certain Raytheon Hawker Aircraft HS125-800-XP bearing the
United States Registration Number N317CC and Manufacturer’s Serial Number 258532 (“Aircraft”);

     WHEREAS, Lessor employs a fully qualified flight crew to operate the Aircraft; and

     WHEREAS, Lessor and Lessee desire to lease said Aircraft with flight crew on a non-exclusive
time sharing basis as defined in Section 91.501 (c) (1) of the Federal Aviation Regulations
(“FAR”).

     The parties agree as follows:

     1. Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR
91.501 (c) (1) and to provide a fully qualified flight crew for all operations. This Agreement
shall commence on the date that it is signed and continue for one year after said date.
Thereafter, this Agreement shall be automatically renewed on a month to month basis, unless sooner
terminated by either party as hereinafter provided. Either party may at any time terminate this
Agreement upon thirty (30) days written notice to the other party.

     2. Lessee shall pay Lessor for each flight conducted under this Agreement an amount up to the
actual expenses of each specific flight as authorized by FAR Part 91.501 (d). These expenses
include:

     (a) Fuel, oil, lubricants, and other additives;

 

 

     (b) Travel expenses of the crew, including food, lodging and ground transportation;

     (c) Hangar and tie down costs away from the Aircraft’s base of operation;

     (d) Insurance obtained for the specific flight;

     (e) Landing fees, airport taxes and similar assessments;

     (f) Customs, foreign permit, and similar fees directly related to the flight;

     (g) In-flight food and beverages;

     (h) Passenger ground transportation;

     (i) Flight planning and weather contract services; and

     (j) An additional charge equal to 100% of the expenses listed in subparagraph (a) of this
paragraph.

     3. Lessor will pay all expenses related to the operation of the Aircraft when incurred, and
will provide an invoice to Lessee for the expenses listed in paragraph 2. Lessee shall pay Lessor
within fifteen (15) days after receipt of each invoice.

     4. Lessee will provide Lessor with requests for flight time and proposed flight
schedules as far in advance of any given flight as possible, and in any case, at least twenty-four
(24) hours in advance of Lessee’s planned departure. Requests for flight time shall be in a form,
whether written or oral, mutually convenient to, and agreed upon by the parties.

     5. Lessor shall have final authority over the scheduling of the Aircraft, provided however,
that Lessor will use its best efforts to accommodate Lessee’s needs and to avoid conflicts in
scheduling.

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     6. Lessor shall be solely responsible for securing maintenance, preventive maintenance and
required or otherwise necessary inspections on the Aircraft, and shall take such requirements into
account in scheduling the Aircraft. No period of maintenance, preventative maintenance or
inspection shall be delayed or postponed for the purpose of scheduling the Aircraft, unless said
maintenance or inspection can be safely conducted at a later time in compliance with all applicable
laws and regulations, and within the sound discretion of the pilot in command. The pilot in
command shall have final and complete authority to cancel any flight for any reason or condition
which in his judgment would compromise the safety of the flight.

     7. Lessor shall employ, pay for and provide to Lessee a qualified flight crew for each flight
undertaken under this Agreement.

     8. In accordance with applicable FARs, the qualified flight crew provided by Lessor will
exercise all of its duties and responsibilities in regard to the safety of each flight conducted
hereunder. Lessee specifically agrees that the flight crew, in its sole discretion, may terminate
any flight, refuse to commence any flight, or take other action which in the considered judgment of
the pilot in command in necessitated by considerations of safety. No such action of the pilot in
command shall create or support any liability for loss, injury, damage or delay to Lessee or any
other person. The parties further agree that Lessor shall not be liable for delay or failure to
furnish the Aircraft and crew pursuant to this Agreement when such failure is caused by government
regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor disputes,
weather conditions, or acts of God.

     9. At all times during the term of this Agreement, Lessor shall cause to be carried and
maintained, at Lessor’s cost and expense, physical damage insurance with respect to the

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Aircraft and third party aircraft liability insurance, and passenger legal liability
insurance. Lessor shall also bear the cost of paying any deductible amount on any policy of
insurance in the event of a claim or loss. Lessor shall submit this Agreement for approval to the
insurance carrier for each policy of insurance on the Aircraft.

     10. Lessee warrants that:

     (a) It will use the Aircraft for and on account of its own business and will not use the
Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for
compensation or hire; and

     (b) It will refrain from incurring any mechanics or other lien and shall not attempt to
convey, mortgage, assign or lease the Aircraft or create any kind of lien or security interest
involving the Aircraft or do anything or take any action that might mature into such a lien.

     11. For purposes of this Agreement, the permanent base of operation of the Aircraft
shall be Signature Flight Support at KMKE, Milwaukee, Wisconsin.

     12. Neither this Agreement nor any party’s interest herein shall be assignable. This
Agreement shall inure to the benefit of and be binding upon the parties hereto, their
representatives and successors. This Agreement constitutes the entire understanding between the
parties, and any change or modification must be in writing and signed by both parties.

     13. All communications and notices provided for herein shall be in writing and shall become
effective when delivered by Federal Express or other overnight courier or four (4) days following
deposit in the United States mail, with correct postage for first-class mail prepaid, addressed to
Lessor or Lessee at their respective addresses set forth above, or else as otherwise

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directed by the other party from time to time in writing.

     14. This Lease is entered into under, and is to be construed in accordance with, the laws of
the State of Wisconsin.

BALANCE OF THIS PAGE INTENTIONALLY BLANK

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     15. TRUTH IN LEASING STATEMENT

     THE AIRCRAFT, A RAYTHEON HAWKER, HS125-800-XP MANUFACTURER’S SERIAL NO. 258532, CURRENTLY
REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N317CC, HAS BEEN MAINTAINED AND INSPECTED
UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.

     THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED
UNDER THIS LEASE. DURING THE DURATION OF THIS LEASE, COZZENS AND CUDAHY AIR INC. WITH AN ADDRESS
OF 9100 N SWAN RD., MILWAUKEE, WISCONSIN 53224 IS CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF
THE AIRCRAFT UNDER THIS LEASE.

     AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION
REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

     THE “INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS” ATTACHED HERETO ARE
INCORPORATED HEREIN BY REFERENCE.

     I,
THE UNDERSIGNED Michael J. Cudahy, AS PRESIDENT OF COZZENS AND CUDAHY AIR INC. WITH
AN ADDRESS OF 9100 N SWAN RD., MILWAUKEE, WISCONSIN 53224 CERTIFY THAT IT IS RESPONSIBLE FOR
OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE
WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

     IN WITNESS WHEREOF, the parties have executed this Agreement to be effective the day and year
first above written.

	 	 	 	 	 
	COZZENS AND CUDAHY AIR INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael J. Cudahy	 	 
	 

	 	 	 	 
	Name:
	 	Michael J. Cudahy	 	 
	 

	 	 	 	 
	Title:
	 	President	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	TOMOTHERAPY INC.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Steven C. Hathaway	 	 
	 

	 	 	 	 
	Name:
	 	Steven C. Hathaway	 	 
	 

	 	 	 	 
	Title:
	 	CFO	 	 
	 

	 	 	 	 

 

 

INSTRUCTIONS FOR COMPLIANCE WITH “TRUTH IN LEASING”

REQUIREMENTS

	1.	 	Mail a copy of the lease to the following address via certified mail,
return receipt requested, immediately upon execution of the lease (14 C.F.R.
91.23 requires that the copy be sent within twenty-four hours after it is
signed):

Federal Aviation Administration

Aircraft Registration Branch

ATTN: Technical Section

P.O. Box 25724

Oklahoma City, Oklahoma 73125

	2.	 	Telephone the nearest Flight Standards District Office at least
forty-eight hours prior to the first flight under this lease.

	3.	 	Carry a copy of the lease in the aircraft at all times.exv10w16

 

EXHIBIT
10.16

TOMOTHERAPY INCORPORATED

INCENTIVE STOCK OPTION PLAN

     1. Purpose. The purpose of the TomoTherapy Incorporated Incentive Stock Option
Plan (the “Plan”) is to encourage certain employees of TomoTherapy Incorporated (the “Corporation”)
to acquire or increase their stock ownership in the Corporation, to provide an incentive to such
employees to promote the financial success of the Corporation, and to enable the Corporation to
attract and retain personnel necessary for continued growth and profitability.

     2. Effective Date and Term of Plan. The Plan shall be effective as of the date
adopted by the Board of Directors and shall continue for a period of ten years thereafter unless
sooner terminated as provided in Paragraph 18.

     3. Approval of Shareholders. The Plan is subject to the approval of holders of a
majority of all of the outstanding voting shares of the Corporation. If it is not so approved on
or before one year after the date of adoption of the Plan by the Board of Directors, the Plan shall
not come into effect and any options granted pursuant to the Plan shall be deemed cancelled. No
option may be exercised prior to approval of the Plan by the shareholders.

     4. Stock Subject to Plan. Only Common Stock, with $.01 par value per share, of the
Corporation (“Common Stock”) may be issued pursuant to options granted under this Plan. The
maximum number of shares of Common Stock that may be issued pursuant to the exercise of options
granted under the Plan (“Options”) is Eleven Thousand Nine Hundred Sixty-seven (11,967) shares,
subject to any adjustments provided in Paragraph 17. If any Options expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject thereto shall again be
available for further grants under the Plan.

     5. Administration. The Plan shall be administered by the committee described
in Paragraph 6 (the “Committee”). Subject to the express provisions of the Plan, the Committee
shall have complete authority in its discretion, to determine those employees (“Participants”) to
whom Options shall be granted, the option price, the option periods and the number of shares to be
subject to each Option. Subject to the express provisions of the Plan, the Committee shall also
have the authority in its discretion to prescribe the time or times at which Options may be
exercised, the limitations upon the exercise of Options (including limitations effective upon the
death, disability or termination of employment of any Participant) and the restrictions, if any, to
be imposed upon the transferability of shares acquired upon exercise of Options. In making such
determinations, the Committee may take into account the nature of the services rendered by the
respective Participants, their present and potential contributions to the success of the
Corporation and such other factors as the Committee in its discretion shall deem relevant. Subject
to the express provisions of the Plan,

 

 

the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to the Plan, to determine the terms and provisions of the
respective option agreements (which need not be identical), to determine whether the shares
delivered upon exercise of Options will be treasury shares or will be authorized but previously
unissued shares and to make all other determinations necessary or advisable for the administration
of the Plan. The Committee’s determinations on the matters referred to in this paragraph shall be
conclusive.

     6. Committee. The Committee shall consist of not less than three members of the Board
of Directors who are not eligible, and have not at any time within one year prior to appointment to
the Committee been eligible, to receive options under the Plan or any other plan of the Corporation
entitling participants therein to acquire stock or stock options of the Corporation. The Committee
shall be appointed from time to time by the Board of Directors, which may from time to time appoint
members of the Committee in substitution for members previously appointed and may fill vacancies,
however caused, in the Committee. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all of the members shall be fully as effective as if
it had been made by a majority vote at a meeting duly called and held. The Committee may hold
meetings by use of conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other.

     7. Eligibility. An Option may be granted under the Plan to any employee of the
Corporation, and of its present and future subsidiaries, as defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended (“Subsidiaries”). The foregoing notwithstanding, members
of the Committee shall not, while serving as members of the Committee, be eligible to receive
Options.

     8. Option Price. The option price per share will be determined by the Committee at
the time each Option is granted, but shall not be less than 100% of the fair market value, as
determined by the Committee, of a share of Common Stock on the date of grant. If such Option is
granted to a person who owns, directly or indirectly, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation on the date of the grant, the
option price per share shall not be less than 110% of its fair market value.

     9. Option Periods. The term of each Option will be for such period not exceeding ten
years from the date of grant, as the Committee shall determine; provided, however, that if such
Option is granted to a person who owns, directly or indirectly, stock possessing more than 10% of
the total combined voting power of all classes of stock of the Corporation on the date of the
grant, the term of such Option shall not exceed five years from the date of grant. An Option shall
be considered granted on the date the Committee acts to grant the Option or such later date as the
Committee shall specify. Each Option shall be subject to earlier termination as described under
Paragraphs 14 and 18.

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     10. Exercise of Options. Each Option may be exercised at any time during the option
period for such Option (subject to the restrictions in this paragraph, in Paragraph 14 and in the
agreements referred to in Paragraph 15) by written notice delivered to an officer of the
Corporation, stating the number of shares with respect to which the Option is being exercised. No
partial exercise of such Option may be for less than one full share. In no event shall the Company
be required to transfer fractional Shares to the Participant.

     11. Payment for Shares. Within five (5) business days following the date of exercise,
the Participant shall make full payment of the option price (i) in cash; (ii) with the consent of
the Committee, by tendering previously acquired shares of Common Stock (valued at their fair market
value, as determined by the Committee, as of the date of exercise); or (iii) any combination of (i)
and (ii). Shares of Common Stock tendered shall be duly endorsed in blank or accompanied by stock
powers duly endorsed in blank. Upon receipt of the payment of the entire option price for the
shares so purchased, certificates for such shares shall be delivered to the Participant. Such
certificates shall bear a legend on the reverse side reflecting the transfer restrictions described
in Paragraph 12.

     12. Transfer Restrictions. Shares of common stock purchased under the Plan are
governed by, and may not be sold or otherwise disposed of except in compliance with (i) the
Corporation’s Bylaws and (ii) the registration requirements of the Securities Act of 1933 and any
applicable state securities laws (unless such transaction is, in the opinion of counsel for the
Corporation, exempt from registration under such Act and laws). The transferability of such shares
shall also be subject to the restrictions contained in a shareholder agreement that, among other
restrictions, will grant the Company the right to repurchase the shares under certain
circumstances, including termination of employment. The Participant shall execute such a document
in the form required by the Company on the dates shares are issued to Participant and the
Participant agrees to execute such shareholder agreement and be bound by its terms.

     13. Maximum Per Participant. The aggregate fair market value, as determined by the
Committee, of the stock for which options held by a Participant are exercisable for the first time
under the Plan or other options granted to the Participant under any plan of the Corporation or any
Subsidiary during any calendar year shall not exceed $100,000. For purposes of this paragraph, the
fair market value of stock subject to an Option or other Incentive Stock Option shall be determined
as of the date the Option or other Incentive Stock Option, as the case may be, is granted.

     14. Termination of Employment. If termination of employment results from the
deliberate, willful or gross misconduct of a Participant or the Participant’s unreasonable neglect
of or refusal to perform Participant’s duties or responsibilities, then the Option may not be
exercised and all of the Participant’s rights in the Option shall be forfeited upon termination.
If termination of employment results from the disability of a Participant within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, any Option may be

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exercised at any time within six months after such termination of employment, but in no event
beyond the option period. If termination of employment results from the death of a Participant,
the personal representative of the Participant’s estate, or a person who by bequest, inheritance,
or otherwise by reason of the Participant’s death, acquired the right to exercise the Option, may
exercise any Option at any time within six (6) months after the death of such Participant, but in
no event beyond the option period. The Committee may impose additional restrictions upon the
exercise of Options after termination of employment, including prohibition of such exercise.

     15. Agreements. Options granted pursuant to the Plan shall be evidenced by stock
option agreements in such form as the Committee shall from time to time adopt.

     16. Nontransferability of Options. Options under the Plan are not transferable by a
Participant other than by will or the laws of descent or distribution, and may be exercised during
the lifetime of a Participant only by such Participant.

     17. Adjustment of Number of Shares. In the event of any change in the outstanding
Common Stock of the Corporation by reason of stock dividends, recapitalizations, reorganizations,
mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the Committee
shall, consistent with such change, appropriately adjust the number and kind of shares which
thereafter may be optioned and sold under the Plan, the number and kind of shares under option in
outstanding stock option agreements and the purchase price per share thereof. The determination of
the Committee as to any such adjustment shall be final and conclusive. No adjustment or
substitution provided for in this paragraph shall require the Corporation to sell a fractional
share and the total substitution or adjustment with respect to each stock option agreement shall be
limited accordingly.

     18. Amendment, Suspension or Termination. The Board of Directors, without further
approval of the shareholders, may from time to time amend, suspend or terminate the Plan in such
respects as the Board may deem advisable, provided, however, that no amendment shall become
effective without prior approval of the shareholders which would (i) increase the aggregate number
of shares which may be issued pursuant to Options granted under the Plan, except as permitted under
Paragraph 17; (ii) permit the granting of options to anyone other than an employee of the
Corporation or a Subsidiary or to a member of the Committee; (iii) decrease the minimum option
prices; (iv) increase the maximum option periods; (v) increase the maximum per Participant set in
Paragraph 13; or (vi) extend the term of the Plan. No amendment shall, without a Participant’s
consent, alter or impair any of the rights or obligations under any Option theretofore granted to
the Participant.

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     Dated as of the 8 February, 1999.

	 	 	 	 	 
	 	TOMOTHERAPY INCORPORATED 

 	 
	 	By:  	
s/  Paul J. Reckwerdt             	 
	 	 	Paul J. Reckwerdt, President
 	 
	 	  	
 	 
	 	Attest:	 	 
	 

#43697v1

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TOMOTHERAPY INCORPORATED

STOCK OPTION AGREEMENT

(Incentive Stock Option)

     This Stock Option Agreement (this “Agreement”) is made as of_____199___, by and between
TomoTherapy Incorporated (the “Company”) and
_______(the “Participant”).

Background

     The Company has adopted the TomoTherapy Incorporated Incentive Stock Option Plan (the “Plan”)
to encourage certain employees of the Company to acquire or increase their stock ownership in the
Company, to provide an incentive to such individuals to promote the financial success of the
Company, and to enable the Company to attract and retain personnel necessary for continued growth
and profitability. Terms not otherwise defined in this Agreement have the meanings ascribed to
them in the Plan.

     The Participant is an employee of the Company, and the Company considers it desirable and in
its best interests to grant the Participant an option to purchase shares of the common stock, par
value $0.01, of the Company (“Common Stock”).

     The option granted under this Agreement is intended by the parties to be, and shall be treated
as, an “Incentive Stock Option” as such term is defined in Section 422(b) of the Internal
Revenue Code of 1986, as amended (the “Code”).

Agreement

     In consideration of the mutual covenants set forth below, it is agreed as follows:

     1. Grant of Option. The Company hereby grants the Participant the option (the
“Option”) to purchase up to        shares of the Common Stock of the Company (the “Option
Shares”), subject to the terms and conditions of this Agreement.

     2. Option Price. The purchase price for the Option Shares shall be $       per share, which is the
fair market value of the shares on the date of this Agreement (the “Option Price”).

     3. Term of the Option & Vesting.

      (a) In all events, if the Option is not terminated earlier pursuant to the provisions of
Sections 8 or 10(b), below, the Option shall expire and all of the Participant’s rights under the
Option shall terminate as of 5 p.m. Central Time on the tenth (10th) anniversary of the
date of this Agreement (the “Option Termination Date”).

 

 

			
	Tomo Therapy Incorporated
	 	Stock Option Agreement

      (b) Subject to the accelerated vesting provided in Sections 3(c) and 10(b), below, and subject
to the limitations and termination provisions of Sections 7 and 8, below, the Option shall vest,
and the Participant shall have the right to exercise the Option with respect to such vested Option
Shares, according to the following schedule:

     (i) Twenty-five percent (25%) of the Option Shares shall vest as of the date of this
Agreement [or such other date after the grant date as the Committee may approve]; and,

     (ii) An additional twenty-five (25%) of the Option Shares shall vest thereafter on
[insert 2nd vesting date, whether 1 year after date of agreement or some other
date] and on each of the subsequent two (2) annual anniversaries of such date, provided that
as of each such date the Participant continues to be an employee of the Company.

      (c) Notwithstanding the foregoing vesting schedule in Section 3(b), above, all of the Option
Shares shall vest and the Participant shall have the right to exercise the Option to purchase all
of the Option Shares, including those Option Shares that would otherwise be unvested, upon the
occurrence of any of the following:

     (i) the Participant’s Involuntary Termination within the period commencing three (3)
months prior to and ending twelve (12) months after a Change in Control, as those terms are
defined in Sections 3(d) and 3(e), respectively, below;

     (ii) the Participant’s death; or

     (iii) the Participant’s Disability, as defined in Section 3(f), below.

      (d) For purposes of this Agreement, the term “Change in Control” shall mean the
occurrence of any of the following after the date of this Agreement:

     (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3
under such Act), directly or indirectly, of securities of the Company representing 50% or
more of the total voting power represented by the Company’s then outstanding voting
securities, other than in a private financing transaction approved by the Board of
Directors;

     (ii) the direct or indirect sale or exchange by the shareholders of the Company of all
or substantially all of the outstanding capital stock, other than to an affiliate of the
Company as determined by the Board of Directors of the Company;

     (iii) a merger or consolidation in which the Company is a party and in which the
shareholders of the Company before such merger or consolidation do not retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock of the
Company after such transaction; or

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	Tomo Therapy Incorporated
	 	Stock Option Agreement

     (iv) the sale or disposition by the Company of all or substantially all the Company’s
assets.

      (e) For purposes of this Section 3 of this Agreement, the term “Involuntary
Termination” shall mean the occurrence of any of the following:

     (i) any termination by the Company of the Participant’s employment that is effected for
any reason other than death, Disability, as defined below, or one or more of the reasons set
forth in Section 8(b), below;

     (ii) without the Participant’s express written consent, a material reduction by the
Company in the base compensation or overall employee benefits package of the Participant as
in effect immediately prior to such reduction; or

     (iii) without the Participant’s express written consent, the relocation of the
Participant to a facility or a location more than 50 miles from the Participant’s then
present location.

      (f) For purposes of this Agreement, the term “Disability” shall mean that the
Participant is deemed by the Company to be permanently and totally disabled within the meaning of
Section 22(e)(3) of the Code, as such Section may be amended or otherwise modified from time to
time and which currently provides that an individual is permanently and totally disabled if he or
she is unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 12 months. The Participant shall not be
considered to have a Disability within the meaning of this Section 3(f) unless the Participant
furnishes proof of such physical or mental impairment, in such form and at such times as the
Company may require.

     4. Method of Exercise. Subject to the limitations in Sections 3 and 7 and the termination
provisions of Sections 8 and 10(b), below, that portion of the Option that is vested may be
exercised at any time from the date of this Agreement until 5 p.m. Central Time on the Option
Termination Date, as defined in Section 3(a), above, by delivery of the Exercise Notice attached to
this Agreement as Exhibit A to an officer of the Company stating the number of Option
Shares with respect to which the Option is being exercised. No partial exercise of such Option may
be for less than one (1) full share and in no event shall the Company be required to transfer
fractional shares to the Participant.

     5. Payment for Option Shares. Within five (5) business days of the Company’s receipt of the
Exercise Notice, the Participant shall make full payment of the Option Price (i) in cash; (ii) if
permitted by the Committee, by means of tendering shares of Common Stock valued at fair market
value on the date of exercise, as determined by the Committee; or (iii) any combination of (i) and
(ii). Shares of Common Stock tendered shall be duly endorsed in blank or accompanied by stock
powers duly endorsed in blank. Upon the Company’s receipt of (a) full payment of the aggregate
Option Price for the Option Shares so purchased, (b) a fully executed

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	Tomo Therapy Incorporated
	 	Stock Option Agreement

copy of the shareholder agreement as provided in Section 6, below, and (c) satisfactory proof of
the Participant’s payment of any income or employment tax withholding obligations, if any, as
provided in Section 11, below, certificates for such shares shall be delivered to the Participant.
If within five (5) business days of the Company’s receipt of the Exercise Notice, the Company does
not receive full payment of the aggregate Option Price for the Option Shares being purchased, or an
executed copy of the shareholder agreement required by Section 6, or satisfactory proof that the
Participant has satisfied the withholding obligations set forth in Section 11, the Exercise Notice
will be deemed null and void, the Company shall not be obligated to deliver a certificate for the
Option Shares described in the Exercise Notice, and the Company shall have no further obligation
with respect to the Exercise Notice or the Option Shares described therein.

     6. Transfer Restrictions and Obligation to Execute Shareholder Agreement. Upon exercise, in
full or in part, of the Option and the issuance of any of the Option Shares, such Option Shares
shall be subject to restrictions on transfer, and the Company will be granted the right to
repurchase the issued Option Shares under certain circumstances, including termination of
employment, all as set forth in a shareholder agreement in the form required by the Company as of
the first date that Option Shares are issued to the Participant hereunder. As a condition to the
Participant’s right to exercise the Option, in part or in full, the Participant agrees to execute
and deliver such shareholder agreement as of the date the Participant first exercises the Option,
whether in full or in part, and be bound by the terms of such agreement.

     7. Limitations.

        (a) The aggregate fair market value (determined by the Committee as of the date the
Option is granted) of any Option Shares that become exercisable for the first time by the
Participant during any calendar year shall not exceed One Hundred Thousand Dollars ($100,000) or
such other limit as may be established from time to time by the Code.

      (b) The Participant agrees to satisfy all applicable federal, state, and local income and
employment tax withholding obligations or other taxes, if any, that may be incurred at any time in
connection with the Participant’s receipt or exercise of the Option and any subsequent sale or
other disposition of any of the Option Shares.

     8. Termination.

       (a) In all events, the Option shall expire and all of the Participant’s rights
thereunder shall terminate not later than the Option Termination Date, as defined in Section 3(a),
above. Except as expressly provided otherwise in subsections (b) through (d) of this Section 8, if
the employment of the Participant terminates, then all of the unvested portion of the Option shall
terminate immediately and that portion of the Option that is vested but unexercised shall terminate
as of 5 p.m. Central Time upon the earlier of (i) the date three (3) months after the date of the
Participant’s termination of employment with the Company, or (ii) the Option Termination Date. To
the extent the Participant fails to exercise the vested portion of the Option prior to the time and
date specified in the preceding sentence, the Option terminates and all rights of the Participant
with respect to the Option are forfeited.

4

 

			
	Tomo Therapy Incorporated
	 	Stock Option Agreement

      (b) If termination of employment results from the deliberate, willful, or gross misconduct of
a Participant or the Participant’s unreasonable neglect of or refusal to perform the Participant’s
duties or responsibilities, then the Option, or that portion of it that remains unexercised as of
the date of Participant’s termination, may not be exercised and all of the Participant’s rights in
the Option shall be forfeited as of date of the Participant’s termination.

      (c) If termination of employment results from the Disability, as defined in Section 3(f),
above, of the Participant, the Option may be exercised at any time within twelve (12) months after
such termination of employment, but in no event beyond the Option Termination Date. The Option may
be exercised by, and upon such exercise the Option Shares issued to, the Participant if legally
competent or a legally designated guardian or representative of the Participant if the Participant
is legally incompetent as a result of such Disability.

      (d) If termination of employment results from the death of the Participant, the personal
representative of the Participant’s estate, or a person who by bequest, inheritance, or otherwise
by reason of the Participant’s death acquired the right to exercise the Option, may exercise the
Option at any time within twelve (12) months after the death of the Participant, but in no event
beyond the Option Termination Date.

     9. Nontransferability of Option. The Option granted hereunder is not transferable by the
Participant other than by will or the laws of descent or distribution, and, except as provided in
Section 8(c), above, may be exercised during the lifetime of the Participant only by the
Participant.

     10. Adjustments Upon Changes in Capitalization, Merger, or Asset Sale.

      (a) Changes in Capitalization. Subject to any required action by the shareholders of the
Company, the number of Option Shares subject to the Option, the number of shares of Common Stock
that have been authorized for issuance under the Plan but as to which no Options have yet been
granted (or which have been returned to the Plan upon cancellation or expiration of an Option), and
the Option Price, shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
reclassification of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. No adjustment shall require
the Company to issue or sell a fractional share and the total adjustment shall be limited
accordingly. Except as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of Option Shares or the
Option Price.

      (b) Merger or Asset Sale. In the event of a merger of the Company with or into another
corporation or other business entity, or the sale of substantially all of the assets of the
Company, the Option shall be assumed, as described below, by the successor entity or its

5

 

			
	Tomo Therapy Incorporated
	 	Stock Option Agreement

parent or subsidiary (in either case, the “Successor”) by substitution of an equivalent option
or right. If the Successor refuses or otherwise fails to assume the Option, (i) the Participant
shall immediately vest in and have the right to exercise the Option as to all of the Option Shares,
including those Option Shares as to which the Participant would not otherwise be vested or have the
right to exercise; and (ii) the Option shall be exercisable as to all Option Shares for a period of
fifteen (15) days from the date the Committee gives written notice to the Participant stating that
a substituted option or right will not be issued by or on behalf of the Successor and that the
Option is therefore immediately vested and exercisable as to all Option Shares for fifteen (15)
days under this Section 10(b). The Committee’s notice to the Participant under this Section 10(b)
shall be given not less than fifteen (15) days prior to the closing of such merger or asset sale.
If the Option is not fully exercised within the fifteen (15) day exercise period provided under
this Section 10(b), the Option and all rights of the Participant thereunder will terminate. For
purposes of this Section 10(b), the Option shall be considered assumed if, following the merger or
sale of assets, the equivalent option or substituted right confers the right to purchase or
receive, for each Option Share subject to the Option on the effective date of the transaction, the
same consideration (whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets is not solely common
stock of the successor entity or its parent or subsidiary, the Committee may, with the consent of
the Successor, provide for the consideration to be received upon the exercise of the Option, for
each Option Share, to be solely common stock of the successor entity or its parent or subsidiary
equal in fair market value to the per share consideration received by holders of Common Stock in
the merger or sale of assets. No such substitution shall require the Company, the successor
entity, or its parent or subsidiary to issue or sell a fractional share and the total substitution
shall be limited accordingly.

     11. Tax Consequences. Some of the federal tax consequences relating to the exercise of this
Option or the disposition of the Option Shares, as of the date of this Agreement, are set forth
below. This Summary is not complete, and the tax laws and regulations are subject to change. The
Participant should consult a tax advisor before exercising this Option or disposing of any of the
Option Shares.

      (a) Exercise of Incentive Stock Option. If this Option qualifies as an Incentive Stock Option
under the Code, the Participant will have no regular federal income tax liability upon its
exercise, although the excess, if any, of the fair market value of the Option Shares on the date of
exercise over their aggregate Option Price will be treated as an adjustment to the alternative
minimum tax for federal tax purposes and may subject the Participant to alternative minimum tax in
the year of exercise. In addition, after the date of this Agreement, the Code and/or the
regulations thereunder may be amended so as to require the Participant to pay, and the Company to
withhold, employment taxes on the excess, if any, of the fair market value of the Option Shares on
the date of exercise over their aggregate Option Price.

      (b) Disposition of Option Shares. If Option Shares acquired pursuant to exercise of the
Option are held by the Participant until the later of one year from the date of their acquisition
or the second anniversary of this Agreement, any gain realized by the Participant on the subsequent
sale of such Option Shares will be treated as long term capital gain for federal

6

 

			
	Tomo Therapy Incorporated
	 	Stock Option Agreement

income tax purposes. Conversely, if any Option Shares are sold either within one year of their
acquisition or prior to the second anniversary of this Agreement, any gain realized by the
Participant on such sale will be treated as compensation income (taxable at ordinary income tax
rates) to the extent of the difference between the aggregate Option Price and the lesser of (i) the
fair market value of such Option Shares on the date of exercise, or (ii) the sale price of such
Option Shares. Any additional gain will be taxed as capital gain, short-term or long-term
depending on the period that the Option Shares were held.

      (c) Notice of Disqualifying Disposition of Option Shares. If the Participant sells or
otherwise disposes of any of the Option Shares acquired pursuant to exercise of that portion of
this Option that qualifies as an Incentive Stock Option before the later of (i) one year after the
exercise date, or (ii) the second anniversary of this Agreement, the Participant shall immediately
notify the Company in writing of such disposition. The Participant acknowledges that he or she may
be subject to income tax withholding by the Company on the compensation income recognized from such
early disposition of the Option Shares by payment in cash or out of the current earnings paid to
the Participant.

     12. Binding Effect. This Agreement shall be construed in accordance with the provisions of
the Plan as implemented from time to time by the Committee and shall be binding upon the parties
hereto and their respective heirs, executors, administrators, successors, and assigns.

     13. Governing Law. This Agreement shall be governed by, and construed in accordance with the
laws of the State of Wisconsin.

     14. Notices. The Exercise Notice, in the form attached hereto, shall only be considered given
by the Participant and received by the Company when actually received by an officer of the Company
along with (a) full payment for the Option Shares being purchased thereby, (b) a fully executed
copy of the shareholder agreement required under Section 6, above, and (c) the Participant’s
satisfaction of any income or employment tax withholding obligations, as required by Sections 5, 7,
and 11, above. Any other notice or other communication required or permitted to be given under the
terms of this Agreement shall be in writing and shall be considered to be given and received in all
respects (i) when personally delivered to a party, (ii) on the next business day following the date
on which it is sent via reputable overnight courier service; (iii) five (5) days after being sent
by certified or registered United States mail, postage prepaid, return receipt requested, or (iv)
when transmitted by fax if confirmation of receipt is printed on the sending fax machine. Any
notice to the Participant shall be addressed to that address last appearing on the Company’s
records. Any notice to the Company shall be addressed to the Company’s Chief Executive Officer at
the Company’s then principal place of business.

     15. No Continuing Rights. This Agreement shall not confer upon the Participant any right with
respect to continuation of employment by the Company, alter the Participant’s at-will employment
status, or interfere in any way with the right of the Company to terminate the Participant’s
employment to the Company at any time with or without notice, except as may otherwise be provided
in any other written agreement between the Participant and the Company.

7

 

			
	Tomo Therapy Incorporated
	 	Stock Option Agreement

     In Witness Whereof, the parties have signed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	TOMOTHERAPY INCORPORATED

 	 
	 	By:  	 	 
	 	 	Paul Reckwerdt, President 	 
	 	 	 	 
	 

     The undersigned Participant hereby accepts the foregoing Option and agrees to the terms and
conditions of this Incentive Stock Option Agreement and of the Plan.

	 	 	 
	 

	 	PARTICIPANT:
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	Name:
	 	 
	 

	 	 

8

 

TomoTherapy Incorporated — Incentive Stock Option Plan — Exhibit A

EXERCISE NOTICE

     1. Exercise of Option. Effective as of today,         , 20   , the undersigned (the
“Participant”) hereby elects to exercise the Participant’s option (the “Option”) to
purchase _____shares of the Common Stock (the “Shares”) of TomoTherapy Incorporated
(the “Company”) under and pursuant to the Company’s Incentive Stock Option Plan (the
“Plan”) and the Participant’s Stock Option Agreement with the Company dated         (the
“Option Agreement”).

     2. Representations of the Participant. The Participant acknowledges that the Participant has
received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound
by their terms and conditions. The Participant also acknowledges that as a condition of exercise,
the Participant agrees to execute and be bound by a shareholder agreement that places restrictions
on transfer of the Shares and grants the Company the right to repurchase the Shares upon the
occurrence of certain events, including termination of employment (the “Shareholder
Agreement”).

     3. Rights as Shareholder. Until (a) the stock certificate evidencing such Shares is issued
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) and delivered to the Participant, and (b) the Shareholder Agreement is
executed and delivered by the Participant, no right to vote or receive dividends or any other
rights as a shareholder of the Company shall exist with respect to the Shares, notwithstanding the
exercise of the Option. The Company shall issue and deliver (or cause to be issued and delivered)
such stock certificate promptly after the Option is exercised and the Shareholder Agreement is
executed and delivered to the Company.

     Thereafter, the Participant shall enjoy rights as a shareholder until such time as the
Participant disposes of the Shares or the Company and/or its assignee(s) exercises its right of
first refusal or the repurchase rights contained in the Shareholder Agreement. Upon such exercise,
the Participant shall have no further rights as a holder of the Shares except the right to receive
payment for the Shares so purchased in accordance with the provisions of the Shareholder Agreement,
and the Participant shall cause the certificate(s) evidencing the Shares to be surrendered to the
Company for transfer or cancellation.

     4. Delivery of Payment. The Participant shall deliver payment of the aggregate Option Price
for the Shares to the Company with this Exercise Notice.

     5. Tax Consultation. The Participant understands that the Participant may suffer adverse tax
consequences as a result of the Participant’s purchase or disposition of the Shares. The
Participant represents that the Participant has consulted with any tax consultants that the
Participant deems advisable in connection with the purchase or disposition of the Shares and that
the Participant is not relying on the Company for any tax advice.

     6. Taxes. The Participant agrees to satisfy all applicable federal, state and local income
and employment tax withholding obligations, if any, incurred as a result of this exercise and shall
have either (a) delivered to the Company with this Exercise Notice the full amount of

A-1

 

TomoTherapy Incorporate Incentive Stock Option Plan-Exercise Notice

such obligations, or (b) made arrangements acceptable to the Company to satisfy such
obligations. In the case of an Incentive Stock Option, the Participant also agrees, as partial
consideration for the designation of the Option as an Incentive Stock Option, to notify the Company
in writing within thirty (30) days of any disposition of any shares acquired by exercise of the
Option if such disposition occurs within two (2) years from the date of the Option Agreement or
within one (1) year from the date such Shares were purchased by the Participant. If the Company is
required to satisfy any federal, state or local income or employment tax withholding obligations as
a result of such an early disposition, the Participant agrees to satisfy the amount of such
withholding in a manner that the Committee prescribes.

     7. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be
submitted by the Participant or by the Company to the Committee, which shall review such dispute at
its next regular meeting. The resolution of such a dispute by the Committee shall be final and
binding on all persons.

     8. Successors and Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this agreement shall inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,
this Exercise Notice shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.

     9. Governing Law; Severability. This Exercise Notice shall be governed by and construed in
accordance with the laws of the State of Wisconsin. Should any provision of this Exercise Notice
be determined by a court of law to be illegal or unenforceable, the other provisions shall
nevertheless remain effective and enforceable.

     10. Notices. Any notice required under Section 6, above, shall be given in writing and shall
be deemed effectively given upon personal delivery or upon deposit in the United States mail by
certified mail, with postage and fees prepaid, addressed to the Company at its then principal place
of business. The Participant acknowledges, however, that this Exercise Notice is not effective
until actually received by an officer of the Company pursuant to Section 14 of the Option
Agreement.

     11. Further Instruments. The parties agree to execute such further instruments and to take
such further action as may be reasonably necessary to carry out the purposes and intent of this
agreement.

	 	 	 	 	 	 	 
	Submitted by:	 	Accepted by:
	PARTICIPANT	 	TomoTherapy Incorporated
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	(Signature)

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 

A-2

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