TOMOTHERAPY INCORPORATED
2000 STOCK OPTION PLAN
As Amended and Restated May 23,
2001
1.
Purpose . The purpose of the TomoTherapy Incorporated
2000 Stock Option Plan (the “Plan”) is to provide
favorable opportunities to certain employees, directors, and
advisors of TomoTherapy Incorporated, (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 growth and profitability.
Pursuant to the
Plan, options to purchase the Company’s common stock
(“Options”) may be granted by the Company. Options
granted under the Plan may be either “Incentive Stock
Options,” as defined in Section 422(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), or
options which do not meet the requirements of Section 422(b) of the
Code, herein referred to as “Nonqualified Stock
Options.”
2.
Effective Date and Term of Plan . The Plan shall be
effective as of the 15 th day of August, 2000 and shall continue for a
period of ten years thereafter unless sooner terminated as provided
in Paragraph 16.
3.
Approval of Shareholders . The Plan is subject to the
approval of the shareholders of the Company. 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 Company (“Common Stock”) may be
issued pursuant to options granted under this Plan (the
“Shares”). The maximum number of shares of Common Stock
that may be issued pursuant to the exercise of options granted
under the Plan is 5,694 shares, subject to any adjustments provided
in Paragraph 15, all of which may be Incentive Stock Options.
The shares may be authorized and unissued, or issued and reacquired
shares, as the Board of Directors may determine. Shares with
respect to which Options are not exercised prior to termination
shall be available for future grants under the Plan.
5.
Administration . The Plan shall be administered by the
Board of Directors of the Company or a committee of the Board of
Directors (the “Administrator”). Subject to the express
provisions of the Plan, the Administrator shall have complete
authority in its discretion, to determine those persons
(“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 Administrator 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 Administrator may take into account
the nature of the services rendered by the respective Participants,
their present and potential contributions to the success of the
Company and such other factors as the Administrator in its
discretion shall deem relevant. Subject to the express provisions
of the Plan, the Administrator 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
Administrator’s determinations on the matters referred to in
this paragraph shall be conclusive. Options granted pursuant to the
Plan shall be evidenced by stock option agreements between the
Company and the Participant to whom the Options are granted (the
“Option Agreement”), in such form as the Administrator
shall from time to time adopt.
6.
Eligibility . An Option may be granted under the Plan to
those current or prospective employees, directors, and advisors
designated as eligible to participate by the Administrator (the
“Participants”). The Administrator shall inform each
individual so designated of his or her eligibility to participate
in the Plan. Participation in the Plan shall be entirely voluntary.
The foregoing notwithstanding, only employees of the Company are
eligible to receive Incentive Stock Options.
7.
Option Price . The option price per share will be
determined by the Administrator at the time each Option is granted,
but the price for an Incentive Stock Option shall not be less than
100% of the fair market value as determined by the Administrator of
a share of Common Stock on the date of grant. If an Incentive Stock
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 Company on the date of the grant,
the option price per share shall not be less than 110% of its fair
market value.
8.
Option Periods . The term of each Option will be for
such period as the Administrator shall determine; provided,
however, that for an Incentive Stock Option, the term shall not
exceed ten years from the date of grant, and further provided that
if an Incentive Stock 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 Company 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 Administrator acts to grant the Option or such
later date as the Administrator shall specify. Each Option shall be
subject to earlier termination as described under Paragraphs 13 and
16.
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9.
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 13 and in the
Option Agreement) by written notice delivered to an officer of the
Company, stating the number of shares with respect to which the
Option is being exercised. In no event shall the Company be
required to issue fractional shares to a Participant.
10.
Payment for Shares . The Shares that may be purchased
under an Option shall be paid in full at the time of the exercise
(i) in cash, (ii) if permitted by the Administrator, by
means of tendering shares of Common Stock, which have been held by
the Participant for more than six months and have not been used
within the prior six-month period to exercise an option, either
directly or by attestation, valued at fair market value on the date
of exercise, or (iii) any combination thereof. 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 11. A holder of an Option shall have none of the
rights of a shareholder until the shares are issued to him or
her.
11.
Transfer Restrictions . 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. 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
Company’s Bylaws; (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
Company, exempt from registration under such Act and laws), and
(iii) the restrictions contained in a shareholder agreement
dated as of the date shares are issued to the Participant, which
agreement shall be substantially in the form of an agreement to be
attached to the Participant’s Option Agreement. The
Participant shall execute such documents as may be required by the
Company to become a party to such shareholder agreement.
12.
Exercise Limits . If the aggregate fair market value
(determined 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 exceeds One Hundred Thousand
Dollars ($100,000) or such other limit as may be required by the
Code, then the option for the first $100,000 worth of option shares
to become exercisable in such calendar year will be an Incentive
Stock Option and the option for the amount in excess of $100,000
that become exercisable and are exercised in that calendar year
will be Nonqualified Stock Options.
13.
Termination of Employment .
(a) If
the employment of a Participant terminates, or service to the
Company by a non-employee terminates, other than pursuant to
paragraphs (b) through (d) of
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this
Section 13, all unvested Options shall immediately terminate
and all vested but unexercised, deferred or unpaid Options shall
terminate three (3) months after such termination of
employment or service, unless the Administrator agrees to extend
this period, in which case such extension will render those Options
Nonqualified Stock Options. During the three (3) month period
described herein, the Options shall be exercisable only to the
extent provided in the Option Agreement. In all events, an Option
will not be exercisable after the end of its term as set forth in
the Option Agreement.
(b) If
termination of employment is a termination for “cause,”
as defined herein, then none of the Options may be exercised and
all of the Participant’s rights in the Options shall be
forfeited upon termination. “Cause” shall mean any of
the following: (i) any act, failure to act, conduct, pattern
of conduct, or condition injurious or potentially injurious to the
business or reputation of the Company; (ii) any conviction for
a misdemeanor or felony the circumstances of which the
Administrator determines is substantially related to the
circumstances of the Participant’s job; (iii) the
willful and continued failure to perform substantially the
Participant’s duties for the Company, which failure remains
uncured fourteen (14) days after written notice from the
Company of such failure; or (iv) theft or fraud by the
Participant with respect to the business of the Company.
(c) In
the event of a Participant’s death, the Participant’s
estate or beneficiaries shall have a period specified in the Stock
Option Agreement within which to exercise any outstanding Options
held by the Participant under such terms, and to the extent, as may
be specified in the applicable Stock Option Agreement. Rights to
any such outstanding Options shall pass by will or the laws of
descent and distribution.
(d) In
the event a Participant is deemed by the Company to be disabled
within the meaning of Company’s group long-term disability
plan, or if the Company does not have such a plan, Section 22(e)(3)
of the Code, the Options shall be exercisable for the period, and
to the extent, specified in the Option Agreement. Options and
rights to any such Options may be paid to or exercised by the
Participant, if legally competent, or a legally designated guardian
or representative if the Participant is legally incompetent by
virtue of such disability.
(e) In
the event of uncertainty as to interpretation of or controversies
concerning this Section 13, the Administrator’s
determinations shall be binding and conclusive.
14.
Tax Withholding . The Company shall have the right to
deduct applicable taxes from any Option payment and withhold, at
the time of delivery or vesting of shares under the Plan, an
appropriate number of shares for payment of taxes required by law
or to take such other action as may be necessary in the opinion of
the Company to satisfy all obligations for withholding of such
taxes. The Company may defer making delivery with respect to Common
Stock obtained pursuant to an Option hereunder until arrangements
satisfactory to it have been made with respect to any such
withholding obligation. If
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Common Stock is
used to satisfy tax withholding, such stock shall be valued based
on the fair market value when the tax withholding is required to be
made.
15.
Adjustment of Number of Shares . In the event of any
change in the outstanding Common Stock of the Company by reason of
a stock split, stock dividend, combination or reclassification of
shares, recapitalization, merger, or similar event, the
Administrator may adjust proportionally (a) the number of
shares of Common Stock (i) reserved under the Plan, (ii)
available for Incentive Stock Options, (iii) for which Options
may be granted to an individual Participant, and (iv) covered
by outstanding Options denominated in stock; (b) the stock
prices related to outstanding Options; and (c) the appropriate
fair market value and other price determinations for such Options.
In the event of any other change affecting the Common Stock or any
distribution (other than normal cash dividends) to holders of
Common Stock, such adjustments as may be deemed equitable by the
Administrator, including adjustments to avoid fractional shares,
shall be made to give proper effect to such event. In the event of
a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Administrator
shall be authorized to issue or assume stock options, whether or
not in a transaction to which Section 424(a) of the Code applies,
by means of substitution of new stock options for previously issued
stock options or an assumption of previously issued stock
options.
16.
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 with respect to Incentive Stock Options,
(i) increase the aggregate number of shares which may be
issued pursuant to Options granted under the Plan, except as
permitted under Paragraph 15 or (ii) increase the maximum
number of Shares that may be issued under the Plan, to any
individual in any twelve month period. 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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TOMOTHERAPY INCORPORATED
2000 STOCK OPTION PLAN
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1.
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Pursuant to the following separate
unanimous written consent resolutions of the Board of Directors and
all of the shareholders of the Company, effective in both cases,
March 15, 2001, the Board of Directors and the Shareholders
approved amending the 2000 Stock Option Plan as described
below:
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RESOLVED, that Section 4 of the TomoTherapy
Incorporated 2000 Stock Option Plan (“the Plan”) be
amended by adding 2,334 shares of the Corporation’s Common
Stock to the maximum number of shares that may be issued pursuant
to the exercise of options granted under the Plan, thereby
increasing the current maximum number under the Plan from 3,360 to
5,694 shares of Common Stock.”
“RESOLVED , that an amendment to Section 4 of the
TomoTherapy Incorporated 2000 Stock Option Plan (“the
Plan”) that adds 2,334 shares of the Corporation’s
Common Stock to the maximum number of shares that may be issued
pursuant to the exercise of options granted under the Plan, thereby
increasing the current maximum number under the Plan from 3,360 to
5,694 shares of Common Stock., is hereby
approved.”
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2.
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Pursuant to a resolution duly
approved by the Board of Directors at their meeting on May 23,
2001, the Board of Directors approved amending the 2000 Stock
Option Plan, as follows:
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RESOLVED , that Sections 1 and 6 of the TomoTherapy
Incorporated 2000 Stock Option Plan be amended by adding the
following text after the word “employees” in the second
line of each Section: “, directors, and
advisors”.
TOMOTHERAPY INCORPORATED
STOCK OPTION AGREEMENT
(Incentive Stock Option)
This Stock Option
Agreement (this “ Agreement ”) is made as of
, 200 , by and between
TomoTherapy Incorporated (the “ Company
”) and
(the “Participant”).
The Company has
adopted the TomoTherapy Incorporated 2000 Stock Option Plan (the
“ Plan ”) to encourage certain employees,
directors, and advisors 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 Company
considers it desirable and in its best interest 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
defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended (the “ Code ”). To the extent, if any,
that the option granted under this Agreement does not, as of the
date of this Agreement or any date hereafter, qualify as an
Incentive Stock Option under the terms of this Agreement, the Plan,
or Section 422(b) of the Code, it is the intent of the parties that
all or that portion of the option granted under this Agreement that
does not so qualify shall be, and shall be treated and referred to
in this Agreement as, a “ Nonqualified Stock Option
,” as that term is defined in the Plan.
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
”).
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TomoTherapy Incorporated
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Stock Option
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3. Term
of the Option and 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 (10
th ) anniversary of the date of this Agreement (the
“ Option Termination Date ”).
(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 Administrator may approve] ; and,
(ii)
An additional twenty-five (25%) of the Option Shares shall vest
thereafter on [insert 2
nd 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;
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TomoTherapy Incorporated
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Stock Option
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(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
(iv)
the sale or disposition by the Company of all or substantially all
of 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 (a) disabled within the meaning of the Company’s
group long-term disability plan, or, (b) if the Company does
not have such a plan, permanently and totally disabled as that term
is defined in Section 22(e)(3) of the Code, as such Section
may be amended 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 twelve
(12) months.
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 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) share and in no event shall the
Company be required to transfer fractional shares to the
Participant.
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5.
Payment for Option . At the time of exercise, the
Participant shall make full payment of the Option Price (i) in
cash; (ii) if permitted by the Administrator, by means of
tendering shares of Common Stock that have been held by the
Participant for more than six months and have not been used within
the prior six-month period to exercise an option, either directly
or by attestation, valued at fair market value on 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 the
Company’s receipt of (a) the payment of the entire
Option Price for the Option Shares so purchased, (b) a fully
executed 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 Sections 7 and
11, below certificates for such shares shall be delivered to the
Participant. If the items listed in the preceding sentence,
including full payment of the Option Price, are not received by the
Company at the time of exercise, the Exercise Notice will be deemed
null and void, the Company shall not be obligated to deliver a
certificate for the Option Shares, 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 pursuant thereto, 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
substantially in the form attached to this Agreement as
Exhibit B , which form, as the same may be revised by
the Company through the date the Participant first exercises the
Option, is hereinafter referred to as the “ Shareholder
Agreement .” As a condition to the Participant’s
right to exercise the Option, in full or in part, the Participant
agrees to execute and deliver the 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.
(a) If
the aggregate fair market value (determined by the Administrator 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 exceeds One Hundred Thousand Dollars ($100,000) or
such other limit as may be required by the Code from time to time,
then that amount of the Option attributable to the first $100,000
worth of Option Shares to become exercisable in such calendar year
will be an Incentive Stock Option, and the remaining portion of the
Option for the amount in excess of $100,000 that become exercisable
in that calendar year will be a Nonqualified Stock
Option.
(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.
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(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) three (3) months
after 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 within the time specified
in the preceding sentence, the Option terminates and all rights of
the Participant with respect to the Option are
forfeited.
(b) If
termination of employment is a termination for “Cause,”
as defined herein, then the Option, or that portion of it that
remains unexercised as of the date of such termination, may not be
exercised and all of the Participant’s rights in the Option
shall be forfeited upon such termination. As used in this
Agreement, the term “ Cause ” shall mean any of
the following: (i) any act, failure to act, conduct, pattern
of conduct, or condition injurious or potentially injurious to the
business or reputation of the Company; (ii) any conviction for
a misdemeanor or felony the circumstances of which the
Administrator determines is substantially related to the
circumstances of the Participant’s job; (iii) the
willful and continued failure to perform substantially the
Participant’s duties for the Company, which failure remains
uncured fourteen (14) days after written notice from the Company of
such failure; or (iv) theft or fraud by the Participant with
respect to the business of the Company.
(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 one (1) year 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 one
(1) year after the death of the Participant, but in no event
beyond the Option Termination Date.
9.
Nontransferability of Options . 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.
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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
Administrator, 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 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
Administrator 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 Administrator’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 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
Administrator 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
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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 an Incentive Stock Option . With respect to that
portion of the Option that qualifies as an Incentive Stock Option,
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, at the time of
exercise 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)
Exercise of Non-Qualified Stock Option . With respect to
that portion, if any, of the Option that qualifies as a
Non-Qualified Stock Option, the Participant will be treated as
having received compensation income (taxable at ordinary income
rates) equal to the excess, if any, of the fair market value of the
Option Shares on the date of exercise over their aggregate Option
Price, and the Company will be required to withhold from the
Participant’s compensation or collect from the Participant
(if the Participant is no longer employed by the Company) and pay
to the applicable taxing authorities at the time of exercise an
amount in cash equal to a percentage of this compensation income,
and the Company may refuse to deliver the Option Shares if such
withholding amounts are not delivered at the time of
exercise.
(c)
Disposition of Option Shares . If Option Shares acquired
pursuant to exercise of that portion of this Option that qualifies
as an Incentive Stock 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 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. In the case of Option Shares acquired pursuant to
exercise of that portion, if any, of this Option that qualifies as
a Non-Qualified Stock Option, if such Option Shares are held by the
Participant for at least one year after their acquisition, any gain
realized on their subsequent sale will be treated as long-term
capital gain for federal income tax purposes.
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(d)
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 Administrator (as defined in the Plan) 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.
[Remainder of page intentionally
left blank. Signature page follows.]
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In Witness Whereof , the
parties have signed this Agreement as of the date first above
written.
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By:
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Paul Reckwerdt,
President
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The undersigned
Participant hereby accepts the foregoing Option and agrees to the
terms and conditions of this Stock Option Agreement and of the
Plan.
9
TomoTherapy
Incorporated 2000 Stock Option Plan —
Exhibit A
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 2000 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
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