VRAY ViewRay Inc

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 28, 2020, the Company and Shahriar Matin, Chief Operating Officer, entered into a separation agreement (the “Separation Agreement”) as part of a program to retain select senior leaders while also providing an option for them to continue with the Company in the event economic conditions under the coronavirus pandemic improve. The Separation Agreement modifies certain severance and other related provisions of the Employment Agreement entered into between the Company and Mr. Matin dated July 22, 2018 (as amended December 20, 2018, the “Original Agreement”).

Pursuant to the Separation Agreement, Mr. Matin will remain employed in his current role for up to one year (the “Severance Period”), and will retain his current 2020 base salary, his eligibility under the Company’s Annual Incentive Plan (the “AIP”) or any other target bonus opportunity for the 2020 calendar year (conditioned on his continued employment through and including December 31, 2020), and the continued vesting of previously granted equity awards for the duration of his employment during the Severance Period. After the first six months of the Severance Period, Mr. Matin and the Company may mutually agree to a reduced work schedule for Mr. Matin to allow him flexibility to engage in efforts to find alternative employment. If Mr. Matin remains employed in his current role through the entire Severance Period, all of his then unvested restricted stock units (“RSUs”) will become vested.

If, during the Severance Period, Mr. Matin is terminated by the Company without cause or resigns for any reason, then he will be entitled to severance pay for the number of months then remaining in the Severance Period, COBRA reimbursement for up to twelve months, payment of his target bonus in accordance with the terms of the Original Agreement, accelerated vesting of then unvested RSUs that would otherwise have vested within the twenty-four months after termination in accordance with the terms of the Original Agreement, and continued exercisability of any vested stock options for up to one year from the termination date. If at the time of Mr. Matin’s termination without cause or resignation during the Severance Period he is then also eligible for a 2020 AIP payment, he will be entitled only to the greater of the AIP payment or payment of his target bonus.

If Mr. Matin is terminated with cause in the first six months of the Severance Period, all of his unvested RSUs will be forfeited. If Mr. Matin is terminated with cause in the second six months of the Severance Period, his unvested RSUs will vest on a pro rata basis calculated as a percentage of the second six-month portion of the Severance Period in which Mr. Matin remained employed prior to his termination date.  

If a change in control transaction occurs while Mr. Matin remains employed during the Severance Period, he will have the option to remain subject to the terms and conditions of the Separation Agreement or to revert to and be subject to the change in control termination and severance provisions set forth in the Original Agreement.

During the Severance Period, Mr. Matin will continue to be eligible to receive the other benefits he was eligible to receive prior to execution of the Separation Agreement.

If at the end of the Severance Period the Company and Mr. Matin agree to continue his employment, the Company will perform an assessment of any compensation forfeited during the Severance Period for purposes of providing, at the Company’s discretion, potential make-whole true-up adjustments to future compensation arrangements.

The foregoing description of the Separation Agreement is only a summary and is qualified in its entirety by reference to the Separation Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.