EXHIBIT 10.42

 

June 21, 2004

 

PERSONAL AND CONFIDENTIAL

 

Robert D. Mitchell

4800 Inverness Woods Road

Bloomington, Indiana 47401

 

Re:    Employment Terms

 

Dear Bob:

 

Align Technology, Inc. (the “Company”) is pleased to offer you the position of
Vice President of Worldwide Sales.

 

Your anticipated start date is July 12 (the “Effective Date”), and you will
attend new hire orientation from 9:00 a.m. to 4:00 p.m. Your rate of pay will be
a bi-weekly salary of $8653.85, which equals an annual salary of $225,000, less
payroll deductions and all required withholdings. In addition, you will be
eligible for a discretionary annual target bonus of 60% of your base salary,
which bonus is based on your meeting agreed-upon performance objectives
established between you and me. We will discuss these objectives in more detail
shortly after you start. You will be guaranteed the bonus for FY2004 of 60% of
$225,000, payable in early 2005 according the Company’s standard practice,
prorated for the number of days that you are employed during 2004.

 

Recognizing that you will incur additional costs such as M.B.A. tuition,
acquiring an automobile and higher taxes and living expenses, you will also
receive a cost of living supplement to your monthly salary, less payroll
deductions and all required withholdings, as follows:

 

  1. for the remainder of 2004 and 2005, $6,000

 

  2. for 2006, $4,800

 

  3. for 2007, $4,200

 

  4. for 2008, $3,000.

 

You will receive a signing bonus in the amount of $100,000.00, subject to all
taxes and withholdings (the “Signing Bonus”). Should your employment with the
Company be terminated within the first year of your employment, the Signing
Bonus must be reimbursed to the Company based on the attached reimbursement
agreement (See “Attachment A”). In addition, if you purchase a home in the Bay
Area during the first twelve months of your employment, upon the execution of a
binding purchase contract for such home, you will be entitled to receive the
amount of $400,000.00, subject to all taxes and withholdings (the “Offer Letter
Bonus”). Should your employment with the Company be terminated within the first
three years of your employment, the Offer Letter Bonus must be reimbursed to the
Company based on the attached reimbursement agreement (See “Attachment A”).

 

Align will cover the normal, reasonable costs associated with your relocation
from Bloomington, Indiana to the Bay Area as set forth in the attached
relocation agreement (See “Attachment B”). Should your employment with the
Company be terminated voluntarily within the first three years of your
employment, your relocation costs must be reimbursed to the Company based on
attached relocation agreement.

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Robert D. Mitchell

June 21, 2004

Page 2

 

You will be eligible for the standard Company benefits, including medical
insurance, 17 days of paid vacation annually, and sick leave. You will be
eligible to participate in most benefits on the first day of employment. Details
about these benefit plans are available for your review.

 

Subject to the approval of the Board of Directors, Align Technology will grant
you the option to purchase 215,000 shares of Align Technology common stock which
shall vest as to 25% of the shares on the first anniversary of your employment
and as to l/48th of the shares at the end of each month thereafter, for full
vesting after 4 years. The exercise price shall be 100% of the fair market value
of the stock on the date of grant, which shall be the later of your employment
date or the date the grant is approved by the board.

 

Align Technology may modify compensation and benefits from time to time as it
deems necessary, with the exception of the stock purchase rights cited in the
previous paragraph. The stock purchase rights cited in the previous paragraph
may only be modified by mutual agreement between Align Technology, Inc. and
yourself.

 

 

Your place of work will be at the offices of Align Technology, 881 Martin Ave,
Santa Clara, CA 95050. Of course, Align Technology may change your position,
duties, and work location from time to time as it deems necessary.

 

As an Align Technology employee, you will be expected to abide by Company rules
and regulations, acknowledge in writing that you have read the Company’s
Employee Handbook, and sign and comply with a Proprietary Information and
Inventions Agreement which prohibits unauthorized use or disclosure of Align
Technology proprietary information.

 

Normal working hours are from 8:00 a.m. to 5:00 p.m., Monday through Friday. As
an exempt employee, you may be expected to work additional hours as required by
the nature of your work assignments.

 

You may terminate your employment with Align Technology at any time and for any
reason whatsoever simply by notifying Align Technology. Likewise, Align
Technology may terminate your employment at any time and for any reason
whatsoever, with or without cause or advance notice. Also, Align Technology
retains its discretion to make all other decisions concerning your employment
(e.g. demotions, transfers, job responsibilities, compensation or any other
managerial decisions) with or without cause. This at-will employment
relationship cannot be changed except in writing signed by a Company officer.

 

Although your employment will be “at-will,” if the Company terminates your
employment at any time without “Cause” or if you resign for “Good Reason” you
will be credited with one (1) year vesting of your options in addition to
whatever vesting you have earned to date, provided that you sign a full release
of all claims at the time your employment terminates.

 

For the purpose of additional vesting under this letter, “Cause” shall mean a
Company-initiated termination for any of the following reasons: (a) failure to
perform the material duties of your position; (b) being convicted of a crime;
(c) committing an act of fraud against, or the misappropriation of property
belonging to the Company; (d) intentional misconduct; or (e) a material breach
by you of this Agreement or any confidentiality or proprietary information
agreement between you and the Company. A termination by the Company for any
other reason is a termination without Cause.

 

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Robert D. Mitchell

June 21, 2004

Page 3

 

Also for the purposes of additional of vesting under this agreement, “Good
Reason” shall mean any reduction in your base salary, or if you are required to
relocate more than 35 miles from the current location of the Company. A
resignation by you for any other reason would be a resignation without Good
Reason. You would be required to give the Company notice and a reasonable
opportunity during which to cure before resigning for Good Reason.

 

It is anticipated that Align Technology and you will enter into the Company’s
standard form of Executive Employment Agreement. Included in that agreement will
be provisions to address the implications of a change of control on your stock
option grant, as well as the terms of your relocation allowance, and
termination.

 

Unless and until such aforementioned standard form Executive Employment
Agreement is executed by the Company and you, this letter, together with your
Proprietary Information and Inventions Agreement, constitute the complete, final
and exclusive embodiment of the entire agreement between you and the Company
with respect to the terms and conditions of your employment, and these terms
supersede any other agreements or promises made to you by anyone, whether oral
or written. As required by law, this offer is subject to satisfactory proof of
your right to work in the United States.

 

Please note that, in compliance with the Immigration Reform Act of 1986, all new
employees are required to submit proof of U.S citizenship or legal alien status
within three business days of employment with Align Technology. Enclosed is an
I-9 Form that lists the documents that you can present to fulfill this
requirement. Please bring your documents, along with a completed I-9 Form, on
your first day of employment.

 

Please sign and date the original offer letter upon your acceptance, and mail
back to me.

 

A copy of the offer letter is enclosed for your files. If you have any
questions, please contact me at (408) 470-1112.

 

We look forward to your favorable reply and to a productive and enjoyable work
relationship.

 

Sincerely,

 

Thomas M. Prescott, President & CEO

 

ACCEPTED:

/s/ Robert D. Mitchell

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Robert D. Mitchell

6-21-04

Date