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Exhibit 10.7
ACCURAY INCORPORATED
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement (" Agreement ") is effective as
of ,
2006, by and between Accuray Incorporated, a Delaware corporation
(the " Company "),
and
(" Indemnitee ").
A. The
Company recognizes the continued difficulty in obtaining liability
insurance for its directors, officers, employees, controlling
persons, fiduciaries and other agents and affiliates, the
significant increases in the cost of such insurance and the general
reductions in the coverage of such insurance.
B. The
Company further recognizes the substantial increase in corporate
litigation in general, subjecting directors, officers, employees,
controlling persons, fiduciaries and other agents and affiliates to
expensive litigation risks at the same time as the availability and
coverage of liability insurance has been severely limited.
C. The
current protection available to directors, officers, employees,
controlling persons, fiduciaries and other agents and affiliates of
the Company may not be adequate under the present circumstances,
and directors, officers, employees, controlling persons,
fiduciaries and other agents and affiliates of the Company (or
persons who may be alleged or deemed to be the same), including the
Indemnitee, may not be willing to continue to serve or be
associated with the Company in such capacities without additional
protection.
D. The
Company (a) desires to attract and retain the involvement of
highly qualified persons, such as Indemnitee, to serve and be
associated with the Company, and (b) accordingly, wishes to
provide for the indemnification and advancement of expenses to the
Indemnitee to the maximum extent permitted by law.
E. In
view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the
Company as set forth herein.
In consideration
of the mutual promises and covenants contained herein, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1.
Certain Definitions.
(a) "
Change in Control " shall be deemed to have occurred if, on
or 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), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company
acting in such capacity or a corporation owned directly or
indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company
representing more than 50% of the total voting power represented by
the Company's then outstanding Voting Securities (as defined
below), (ii) during any period of two (2) consecutive
years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by
the Company's shareholders was approved by a vote of at least two
thirds ( 2 / 3 ) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the shareholders of
the Company approve a merger or consolidation of the Company with
any other corporation other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or
(iv) the shareholders of the Company approve
a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of (in one transaction or a
series of related transactions) all or substantially all of the
Company's assets.
(b) "
Claim " shall mean with respect to a Covered Event (as
defined below): any threatened, asserted, pending or completed
action, suit, proceeding or alternative dispute resolution
mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such
action, suit, proceeding or alternative dispute resolution
mechanism, whether civil, criminal, administrative, investigative
or other.
(c) References
to the " Company " shall include, in addition to Accuray
Incorporated, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger
to which Accuray Incorporated (or any of its wholly owned
subsidiaries) is a party, which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if
Indemnitee is or was a director, officer, employee, agent or
fiduciary of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had
continued.
(d) "
Covered Event " shall mean any event or occurrence related
to the fact that Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Company, or any subsidiary of
the Company, or is or was serving at the request of the Company as
a director, officer, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action or inaction on the part of Indemnitee
while serving in such capacity.
(e) "
Expenses " shall mean any and all losses, claims, damages
expenses and liabilities, joint or several (including attorneys'
fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, to
be a witness in or to participate in, any action, suit, proceeding,
alternative dispute resolution mechanism, hearing, inquiry or
investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld)
actually and reasonably incurred, of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result
of the actual or deemed receipt of any payments under this
Agreement.
(f) "
Expense Advance " shall mean a payment to Indemnitee
pursuant to Section 3 of Expenses in advance of the settlement
of or final judgement in any action, suit, proceeding or
alternative dispute resolution mechanism, hearing, inquiry or
investigation, which constitutes a Claim.
(g) "
Independent Legal Counsel " shall mean an attorney or firm
of attorneys, selected in accordance with the provisions of
Section 2(d) hereof, who shall not have otherwise performed
services for the Company or Indemnitee within the last three
(3) years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other indemnitees
under similar indemnity agreements).
(h) References
to " other enterprises " shall include employee benefit
plans; references to " fines " shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit
plan; and references to " serving at the request of the
Company " shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties
on, or involves services by, such director, officer, employee,
agent or fiduciary with respect to an employee benefit plan, its
participants or its beneficiaries; and if Indemnitee acted in good
faith and in a manner Indemnitee reasonably
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believed to be in the interest of the
participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner " not
opposed to the best interests of the Company " as referred to
in this Agreement.
(i) "
Reviewing Party " shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Board of
Directors in accordance with applicable law to review the Company's
obligations hereunder and under applicable law, which may include a
member or members of the Company's Board of Directors, Independent
Legal Counsel or any other person or body not a party to the
particular Claim for which Indemnitee is seeking
indemnification.
(j) "
Section " refers to a section of this Agreement unless
otherwise indicated.
(k) "
Voting Securities " shall mean any securities of the Company
that vote generally in the election of directors.
2.
Indemnification.
(a)
Indemnification of Expenses
. Subject to the provisions of
Section 2(b) below, the Company shall indemnify Indemnitee for
Expenses to the fullest extent permitted by law if Indemnitee was
or is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant
in, any Claim (whether by reason of or arising in part out of a
Covered Event), including all interest, assessments and other
charges incurred in connection with or in respect of such
Expenses.
(b)
Review of Indemnification
Obligations . Notwithstanding the
foregoing, in the event any Reviewing Party shall have determined
(in a written opinion, in any case in which Independent Legal
Counsel is the Reviewing Party) that Indemnitee is not entitled to
be indemnified hereunder under applicable law, (i) the Company
shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made prior to such determination by
such Reviewing Party and (ii) the Company shall be entitled to
be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all Expenses theretofore paid in indemnifying
Indemnitee (within thirty (30) days after such determination);
provided, however , that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee is entitled
to be indemnified hereunder under applicable law, any determination
made by any Reviewing Party that Indemnitee is not entitled to be
indemnified hereunder under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any
Expenses theretofore paid in indemnifying Indemnitee until a final
judicial determination is made with respect thereto (as to which
all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for any Expenses
shall be unsecured and no interest shall be charged thereon.
(c)
Indemnitee Rights on Unfavorable
Determination; Binding Effect . If any
Reviewing Party determines that Indemnitee substantively is not
entitled to be indemnified hereunder in whole or in part under
applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or
challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and,
subject to the provisions of Section 15, the Company hereby
consents to service of process and to appear in any such
proceeding. Absent such litigation, any determination by any
Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.
(d)
Selection of Reviewing Party; Change in
Control . If there has not been a Change
in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other
than a Change in Control which has been approved by a majority of
the Company's Board of Directors who were directors immediately
prior to such Change in Control), any Reviewing Party with respect
to all matters thereafter arising concerning the rights of
Indemnitee to indemnification of Expenses under this Agreement or
any other agreement or under the Company's
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Certificate of Incorporation or bylaws as now or
hereafter in effect, or under any other applicable law, if desired
by Indemnitee, shall be Independent Legal Counsel selected by the
Indemnitee and approved by Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall
render its written opinion to the Company and Indemnitee as to
whether and to what extent Indemnitee would be entitled to be
indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable
fees of the Independent Legal Counsel referred to above and to
indemnify fully such counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this
Agreement, the Company shall not be required to pay Expenses of
more than one Independent Legal Counsel in connection with all
matters concerning a single Indemnitee, and such Independent Legal
Counsel shall be the Independent Legal Counsel for any or all other
Indemnitees unless (i) the Company otherwise determines or
(ii) any Indemnitee shall provide a written statement setting
forth in detail a reasonable objection to such Independent Legal
Counsel representing other Indemnitees.
(e)
Mandatory Payment of Expenses
. Notwithstanding any other provision of
this Agreement other than Section 10 hereof, to the extent
that Indemnitee has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any Claim, Indemnitee shall be indemnified
against all Expenses incurred by Indemnitee in connection
therewith.
(f)
Contribution
. If the indemnification provided for in
this Agreement is for any reason held by a court of competent
jurisdiction to be unavailable to an Indemnitee, then in lieu of
indemnifying Indemnitee thereunder, the Company shall contribute to
the amount paid or payable by Indemnitee as a result of such
Expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Compan
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