Document:

EX-10.1

 EXHIBIT 10.1 

LUNA INNOVATIONS INCORPORATED 

SENIOR MANAGEMENT INCENTIVE PLANS 

FISCAL YEAR 2013 
 SENIOR MANAGEMENT INCENTIVE PLAN (CEO, CFO AND CSO) 
 Eligible Participants: 
 The initial participants are: Chief Executive Officer, Chief
Financial Officer and Chief Strategy Officer. Others may be added from time to time with prior approval of the Chief Executive Officer or Compensation Committee, as appropriate. The target percentage awards for the initial participants are 50% of
their respective annual base salaries as of December 31, 2013. 
 Metrics and Awards: 

The 2013 Senior Management Incentive Plan (the “Senior Management Incentive Plan”) is structured as a percentage of each
participant’s annual base salary as of December 31, 2013 and is triggered only if the company achieves a strategic goal approved by the Compensation Committee (the “Strategic Goal”) or achieves an adjusted operating
income (loss) exceeding $[***] for the year ending December 31, 2013. If the bonus is based on the achievement of adjusted operating income (loss), the amount of bonus will range from 5% to 150% of target, with 5%, 100% and 150% payable upon
achievement of adjusted operating income (loss) levels of $[***], [***] and [***], respectively. If the bonus is based on the achievement of the Strategic Goal, the payout will range from 100% to 150% of target, depending on the timing of
achievement. 
 Payment: 
 Bonus
awards under this plan will be paid annually following the approval of the Compensation Committee and completion of an audit of the company’s financial statements for the year ending December 31, 2013. 

SENIOR MANAGEMENT INCENTIVE PLAN FOR THE
CHIEF TECHNOLOGY OFFICER 
 Metrics and Awards: 

The Senior Management Incentive Plan for the Company’s Chief Technology Officer (the “Chief Technology Officer Plan”) is
structured as a percentage of the participant’s annual base salary as of December 31, 2013, with a target percentage of 50%. The bonus under the Chief 

  
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Technology Officer Plan will be based upon the extent to which the Company’s Lightwave Division achieves a certain target for revenue (75% weighting), with 5%, 100% and 150% of the amount
attributable to this component payable upon achievement of revenue of $[***], [***] and [***], respectively, and a certain target for income before allocation of general corporate overhead expenses (“Income Before
Allocations”) (25% weighting), with 5%, 100% and 150% of the amount attributable to this component payable upon achievement of Income Before Allocations of $[***], [***] and [***], respectively. 

Payment: 
 Bonus awards under this plan
will be paid annually following the approval of the Compensation Committee and completion of an audit of the company’s financial statements for the year ending December 31, 2013. 

  
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 EXHIBIT 10.2 

AMENDMENT No. 6 
 to the 
 Intuitive-Luna Development and Supply Agreement dated June 11, 2007
(“Original Agreement”) 
 between 
 INTUITIVE SURGICAL, INC. 
 and 

LUNA INNOVATIONS INCORPORATED (“Luna”) 
 This Amendment No. 6 is entered into by and between Intuitive Surgical Operations, Inc., a successor in interest to Intuitive Surgical, Inc. by assignment with respect to the Agreement,
(“Intuitive”) and Luna on December 15, 2012 (“Amendment Date”). 
 BACKGROUND 

 

	 	A.	Intuitive Surgical, Inc. and Luna agreed to amend the Original Agreement by Amendment No. X dated May 20, 2008 to replace Exhibit 2.1 of the Original Agreement.

  

	 	B.	As part of settlement of certain litigation between Luna and Hansen Medical, Inc., Intuitive and Luna agreed to amend the Agreement by Amendment dated January 12,
2010 (“Amendment No. 1”). 

  

	 	C.	Intuitive and Luna again agreed to amend the Agreement by Amendment No. 2 dated April 20, 2010, in regard to development work to be performed in 2010.

  

	 	D.	Intuitive and Luna agreed to further amend the Agreement by Amendment No. 3 dated September 2, 2010, in regard to development work to be performed in 2010.

  

	 	E.	Intuitive and Luna further agreed to amend the Agreement by Amendment No. 4 dated March 8, 2011, in regard to development work to be performed in 2011.

  

	 	F.	Intuitive and Luna further agreed to amend the Agreement by Amendment No. 5 dated March 19, 2012, in regard to development work to be performed in 2012.

  

	 	G.	The Original Agreement as amended by Amendments No. X, 1, 2, 3, 4, and 5 shall be referred to as the “Agreement”. 

 

	 	H.	The parties now wish to amend the Agreement further with respect to the payment schedule, the Specifications for the [***], and [***] Milestones and how to measure the
achievement of those Milestones. 

 Intuitive and Luna agree to amend the Agreement as follows: 

 

	 	1.	Terms not defined in this Amendment No. 6 shall have the meaning assigned to them in the Agreement. 

 

	 	2.	Notwithstanding any provision in Amendment No. 5 to the contrary, the payments and Specifications for the [***] Milestones for the Milestones are hereby revised as
follows: 

  

	 	•	 	 Intuitive and Luna hereby agree to revise and provide a more detailed Specifications for [***] Milestones. Such revised and more detailed
Specifications for the [***] Milestones are attached hereto as Exhibit 2.1. The 

  

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payment for the revised [***] Milestone is hereby [***] to [***] because [***] in this Amendment No. 6 while the payments for the [***] Milestones remain at [***] each. Accordingly, the total
revised aggregate payment for the [***] Milestones is [***]. Upon the full execution of this Amendment by Intuitive and Luna, Intuitive will pay the sum of [***] to Luna by or before [***], representing payment for work so far done on the [***]
Milestones. 

  

	 	•	 	 The remaining payments for the [***] Milestones, a total of [***], will be due and payable by Intuitive to Luna upon the achievement of the [***]
Milestones by Luna. Luna and Intuitive have agreed that these [***] Milestones shall be deemed to be achieved upon completion and delivery of the Tasks set forth on Schedule 1 hereto. 

 

	 	3.	Intuitive and Luna will use reasonable and good faith efforts to meet in person prior to [***], to discuss any Development Work anticipated for 2013 and the budget for
same. 

  

	 	4.	Except as specifically provided for herein, all of the terms and conditions of the Agreement shall remain in full force and effect. In the event of a conflict or
inconsistency between the terms and conditions contained in this Amendment No. 6 and the Agreement, the provisions herein shall prevail. 

 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the Amendment Date. 
  

									
	INTUITIVE SURGICAL OPERATIONS, INC.	 		 	LUNA INNOVATIONS INCORPORATED
					
	Sign:	 	 /s/ David Larkin
	 		 	Sign:	 	 /s/ Scott A. Graeff

	Name:	 	 David Larkin
	 		 	Name:	 	 Scott A. Graeff

	Title:	 	 V.P. Engineering
	 		 	Title:	 	 Chief Strategy Officer

	Date:	 	 12/20/2012
	 		 	Date:	 	 12/23/2012

  

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 EXHIBIT 2.1 for Amendment No. 6 

MILESTONES AND LUNA PRODUCT SPECIFICATIONS 
 [***] 

  

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 SCHEDULE 1 
 [***] 

  

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 4EX-10.3

 EXHIBIT 10.3 

AMENDMENT No. 7 
 to the 
 Intuitive-Luna Development and Supply Agreement dated June 11, 2007
(“Original Agreement”) 
 between 
 INTUITIVE SURGICAL, INC. 
 and 

LUNA INNOVATIONS INCORPORATED (“Luna”) 
 This Amendment No. 7 is entered into by and between Intuitive Surgical Operations, Inc., a successor in interest to Intuitive Surgical, Inc. by assignment with respect to the Agreement,
(“Intuitive”) and Luna on January 1, 2013 (“Amendment Date”). 
 BACKGROUND 

 

	 	A.	Intuitive Surgical, Inc. and Luna agreed to amend the Original Agreement by Amendment No. X dated May 20, 2008 to replace Exhibit 2.1 of the Original Agreement.

  

	 	B.	As part of settlement of certain litigation between Luna and Hansen Medical, Inc., Intuitive and Luna agreed to amend the Agreement by Amendment dated January 12,
2010 (“Amendment No. 1”). 

  

	 	C.	Intuitive and Luna again agreed to amend the Agreement by Amendment No. 2 dated April 20, 2010, in regard to development work to be performed in 2010.

  

	 	D.	Intuitive and Luna agreed to further amend the Agreement by Amendment No. 3 dated September 2, 2010, in regard to development work to be performed in 2010.

  

	 	E.	Intuitive and Luna further agreed to amend the Agreement by Amendment No. 4 dated March 8, 2011, in regard to development work to be performed in 2011.

  

	 	F.	Intuitive and Luna further agreed to amend the Agreement by Amendment No. 5 dated March 19, 2012, in regard to development work to be performed in 2012.

  

	 	G.	Intuitive and Luna further agreed to amend the Agreement with respect to the payment schedule, the Specifications for the Ninth, Tenth, and Eleventh Milestones and how
to measure the achievement of those Milestones by Amendment No. 6 dated December 15, 2012. 

  

	 	H.	The Original Agreement as amended by Amendments No. X, 1, 2, 3, 4, 5, and 6 shall be referred to as the “Agreement”. 

 

	 	I.	The parties now wish to amend the Agreement further with respect to development work to be performed in 2013, 2014, and 2015. 

Intuitive and Luna agree to amend the Agreement as follows: 
  

	 	1.	Terms not defined in this Amendment No. 7 shall have the meaning assigned to them in the Agreement. 

  
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	 	2.	Milestones [***] through [***] and respective Luna Product Specifications per Exhibit 2.1 for Amendment No. 7 attached hereto are hereby added to the Agreement by this
reference. Milestones [***] through [***] shall be referred to as the “Outer Milestones”. The Milestone due dates are as specified in Exhibit 2.1 for Amendment No. 7. The Parties understand and agree that during the performance of this
Agreement, the Milestones, Luna Product Specifications and the expected time and costs to achieve same may continue to evolve and be refined. In the event of any proposed Substantial Change(s), the Parties will renegotiate Exhibit 2.1 and the
respective Milestone payments in good faith, with approval of a proposed Substantial Change not to be unreasonably withheld. The Parties will memorialize any agreed-upon Substantial Change in a written amendment signed by both Parties. The Parties
also understand and agree that the Luna Product Specifications could, in the future, pose significantly more difficult technical challenges than currently expected. “Substantial Change” shall mean a change that [***] If Luna proposes a
Substantial Change, Luna will provide Intuitive with a detailed accompanying explanation of the underlying reasons and basis for the proposed Substantial Change. [***] It is the Parties’ intent for Luna to be reasonably compensated for
additional time or cost needed to perform extra work due to a Substantial Change at compensation rates consistent with historical work performed under this Agreement. [***] 

 

	 	3.	Milestones Review. Every six (6) months from the Amendment Date (but with the first one being nine (9) months from the Amendment Date), Intuitive and Luna
shall review (and adjust as necessary) the Milestones and Luna Product Specifications, Exhibit 2.1 for Amendment No. 7, for the next twelve (12) months. The second review in a given calendar year (that is, on or about the end of the calendar
year), shall culminate in a written amendment finalizing the Outer Milestones, the respective Luna Product Specifications, the respective Milestone due dates, and the respective payments for the Development Work for the coming calendar year.

  

	 	4.	 Payment. Intuitive will pay Luna a total of [***] for the Development Work to be performed in 2013 under this Amendment, [***] for the Development Work
to be performed in 2014 under this Amendment, and [***] for the Development Work to be performed in 2015 under this Amendment (an aggregate total of [***]). A portion of the payments for each Milestone shall be made in quarterly installments on or
about the 15th day of the second month of each calendar
quarter, while the remaining portion shall be paid within 15 days of technical achievement by Luna of the Luna Product Specifications for the Milestone in accordance with the Test Procedures set forth on Exhibit 2.1A (except for Outer Milestones,
for which Test 

  
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Procedures will be mutually agreed by the Parties in the future) incorporated into this Amendment by this reference (“Achievement”), as outlined below and as further set out in the
attached Amendment No. 7 Payment Schedule. 

  

	 	•	 	 [***] 

  

	 	5.	Amendment No. 7 Payment Schedule, attached hereto, sets forth a tabular representation of the payment schedule for Development Work under this Amendment.

 If Intuitive reasonably determines that Achievement has not occurred, Intuitive shall have 30 days from
delivery of notice from Luna that Achievement has occurred to send Luna specific notice of which Luna Product Specifications Intuitive does not believe have been achieved and test results demonstrating such assertion (conducted in accordance with
the Test Procedures set forth on Exhibit 2.1A). If Luna disagrees, the project manager and responsible business executive from each of Luna and Intuitive shall conduct a meeting by teleconference (or otherwise) to try to resolve any differences of
opinion, to be held within 10 days of the notice to Luna of non-achievement. If they still cannot resolve these differences, the project manager and responsible business executive from each of Luna and Intuitive shall arrange to meet in person to
resolve within 30 days of such notice. In any event, payments tied to Achievement shall be due on the respective date the particular Milestone Achievement is determined to have actually occurred. 

 

	 	6.	[***] 

  

	 	7.	Except as specifically provided for herein, all of the terms and conditions of the Agreement shall remain in full force and effect. In the event of a conflict or
inconsistency between the terms and conditions contained in this Amendment No. 7 and the Agreement, the provisions herein shall prevail. 

  
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 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the Amendment Date.

  

									
	INTUITIVE SURGICAL OPERATIONS, INC.	 		 	LUNA INNOVATIONS INCORPORATED
					
	Sign:	 	 /s/ David Larkin
	 		 	Sign:	 	 /s/ My E. Chung

	Name:	 	 David Larkin
	 		 	Name:	 	 My E. Chung

	Title:	 	 V.P. Engineering
	 		 	Title:	 	 President & CEO

	Date:	 	 06/28/2013
	 		 	Date:	 	 06/28/2013

  
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 Amendment No. 7 Payment Schedule 

[***] 

  
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 EXHIBIT 2.1 for Amendment No. 7 

MILESTONES AND LUNA PRODUCT SPECIFICATIONS 
 [***] 

  
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