ACCURAY INCORPORATED (NASDAQ:ARAY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(e) Compensatory Arrangements of Certain Officers.
The Board of Directors of Accuray Incorporated (the Company) or
its delegated committee generally reviews the terms of the
Companys employment agreements with its executive officers every
two years and, if applicable, authorizes the Company to enter
into new employment agreements with such officers. On January1,
2017, the Company entered into new employment agreements (each,
an Employment Agreement, and collectively, the Employment
Agreements) with each of Joshua H. Levine, Kelly Londy, Kevin
Waters, and Alaleh Nouri (each, an Executive Officer), which
amended and restated the employment agreements previously entered
into between the Company and each such Executive Officer.
Each Employment Agreement is for a three-year term that begins on
January1, 2017 and automatically renews for successive three-year
terms unless the Company or the applicable Executive Officer
provides timely notice of non-renewal. Each Employment Agreement
sets forth the applicable Executive Officers title and salary, as
well as the target annual incentive bonus that such Executive
Officer is eligible to receive under the Companys Performance
Bonus Plan, which is based on the attainment of certain
performance criteria established and evaluated by the Company.
The table below shows each Executive Officers title, salary and
target annual bonus (shown as a percentage of base salary
actually earned, which will be calculated in accordance with the
Companys Performance Bonus Plan) under such Executive Officers
Employment Agreement:
|
ExecutiveOfficer |
|
Title |
|
Base Salary |
|
Bonus Percentage |
|
|
|
Joshua H. Levine |
President and Chief Executive Officer |
$ |
710,000 |
|
% |
|||
|
Kelly Londy |
Executive Vice President and Chief Operating Officer |
$ |
450,500 |
|
% |
|||
|
Kevin Waters |
Senior Vice President and Chief Financial Officer |
$ |
381,600 |
|
% |
|||
|
Alaleh Nouri |
Senior Vice President, General Counsel and Corporate |
$ |
347,000 |
|
% |
Each Employment Agreement provides that during the applicable
Executive Officers employment with the Company, such Executive
Officer may be granted options to purchase shares of Company
common stock, restricted stock units, market stock units, and
performance stock units under the Companys 2016 Equity Incentive
Plan.
Each Employment Agreement also provides that the applicable
Executive Officer is entitled to severance benefits in the event
of termination of such Executive Officers employment by the
Company without cause or such Executive Officers resignation of
employment for good reason, including (i)a lump sum payment equal
to six months of base salary for each Executive Officer other
than Mr.Levine, the Companys Chief Executive Officer, whose lump
sum payment will be equal to twelve months of his base salary;
(ii)a prorated portion of the bonus he or she would have received
for the fiscal year in which his or her employment terminates;
(iii)reimbursement of health insurance premiums for six months
for each Executive Officer other than Mr.Levine, who will receive
twelve months of reimbursement; (iv)payment for outplacement
services; and (v)other customary benefits. In the event of
termination of employment because of death or incapacity, each
Executive Officers Employment Agreement provides for six months
of accelerated vesting of such Executive Officers
then-outstanding equity awards, with the exception of Mr.Levines
Employment Agreement, which provides that Mr.Levine will receive
twelve months of accelerated vesting of his then-outstanding
equity awards. In the event that an Executive Officer is
terminated without cause or resigns for good reason three months
prior to or within twelve months following a change in control of
the Company, each Executive Officers Employment Agreement
provides that such Executive Officer will be entitled to enhanced
severance benefits, including (i)a lump sum payment equal to
twenty-four months of such Executive Officers base salary;
(ii)200% of such Executive Officers target bonus for the fiscal
year in which such change in control occurs; (iii)the full
acceleration of all of such Executive Officers then-outstanding
unvested equity awards; and (iv)other customary benefits. Such
enhanced severance benefits will be in lieu of any severance
benefits an Executive Officer would otherwise be entitled to
receive as a result of the termination of such Executive Officers
employment by the Company without cause or such Executive
Officers resignation for good reason independent of a change in
control.
The benefits and payments described above may be subject to a
delay of up to six months, as necessary to avoid the imposition
of additional tax under Section409A of the Internal Revenue
Code (the Code). In addition, if any payments or benefits
payable to the Executive Officers under their respective
Employment Agreements would be subject to the excise tax
provided under Section4999 of the Code, then such payments or
benefits will be reduced to the extent necessary to ensure that
no amount will be subject to such excise tax; provided,
however, that a reduction will be made only if, as a result of
such reduction, the Executive Officers net after-tax benefit
exceeds the net after-tax benefit such Executive Officer would
realize if the reduction were not made.
The Company will file the Employment Agreements as exhibits to
its Quarterly Report on Form10-Q for the quarter ended March31,
2017. The foregoing description of the material terms of the
Employment Agreements is subject to, and qualified in its
entirety by reference to, the Employment Agreements when filed.
