EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This AGREEMENT is entered into as of September 12, 2005, by and between Gil Laks
(the “Executive”) and Align Technology, Inc., a Delaware corporation (the
“Company”).

 

WHEREAS, the Executive is currently employed by the Company as Vice President,
International;

 

WHEREAS, the Company desires to increase the duties and responsibilities of the
Executive and appoint the Executive as an executive officer of the Company to
serve at the discretion of the Board of Directors;

 

WHEREAS, the Executive desires to accept such appointment on the terms and
conditions set forth herein;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants set
forth below, the parties hereby agree as follows:

 

1.             DUTIES AND SCOPE OF EMPLOYMENT.

 

(A)           POSITION.  FOR THE TERM OF HIS EMPLOYMENT UNDER THIS AGREEMENT
(“EMPLOYMENT”), THE COMPANY AGREES TO EMPLOY THE EXECUTIVE IN THE POSITION OF
VICE PRESIDENT, INTERNATIONAL.  THE EXECUTIVE SHALL REPORT TO THE CHIEF
EXECUTIVE OFFICER.  THE EXECUTIVE ACCEPTS SUCH EMPLOYMENT AND AGREES TO
DISCHARGE ALL OF THE DUTIES NORMALLY ASSOCIATED WITH SAID POSITION, AND TO
FAITHFULLY AND TO THE BEST OF HIS ABILITIES PERFORM SUCH OTHER SERVICES
CONSISTENT WITH HIS POSITION AS VICE PRESIDENT, INTERNATIONAL AS MAY FROM TIME
TO TIME BE ASSIGNED TO HIM BY THE CHIEF EXECUTIVE OFFICER (THE “CEO”).

 

(B)           OBLIGATIONS TO THE COMPANY.  DURING THE TERM OF HIS EMPLOYMENT,
THE EXECUTIVE SHALL DEVOTE HIS FULL BUSINESS EFFORTS AND TIME TO THE COMPANY. 
THE EXECUTIVE AGREES NOT TO ACTIVELY ENGAGE IN ANY OTHER EMPLOYMENT, OCCUPATION
OR CONSULTING ACTIVITY FOR ANY DIRECT OR INDIRECT REMUNERATION WITHOUT THE PRIOR
APPROVAL OF THE CEO, PROVIDED, HOWEVER, THAT THE EXECUTIVE MAY, WITHOUT THE
APPROVAL OF THE CEO, SERVE IN ANY CAPACITY WITH ANY CIVIC, EDUCATIONAL OR
CHARITABLE ORGANIZATION.  THE EXECUTIVE MAY OWN, AS A PASSIVE INVESTOR, NO MORE
THAN ONE PERCENT (1%) OF ANY CLASS OF THE OUTSTANDING SECURITIES OF ANY PUBLICLY
TRADED CORPORATION.

 

(C)           NO CONFLICTING OBLIGATIONS.  THE EXECUTIVE REPRESENTS AND WARRANTS
TO THE COMPANY THAT HE IS UNDER NO OBLIGATIONS OR COMMITMENTS, WHETHER
CONTRACTUAL OR OTHERWISE, THAT ARE INCONSISTENT WITH HIS OBLIGATIONS UNDER THIS
AGREEMENT.  THE EXECUTIVE REPRESENTS AND WARRANTS THAT HE WILL NOT USE OR
DISCLOSE, IN CONNECTION WITH HIS EMPLOYMENT BY THE COMPANY, ANY TRADE SECRETS OR
OTHER PROPRIETARY INFORMATION OR INTELLECTUAL PROPERTY IN WHICH THE EXECUTIVE OR
ANY OTHER PERSON HAS ANY RIGHT, TITLE OR INTEREST AND THAT HIS EMPLOYMENT BY THE
COMPANY AS CONTEMPLATED BY THIS AGREEMENT WILL NOT INFRINGE OR VIOLATE THE
RIGHTS OF ANY OTHER PERSON OR ENTITY.  THE EXECUTIVE REPRESENTS AND WARRANTS TO
THE

 

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COMPANY THAT HE HAS RETURNED ALL PROPERTY AND CONFIDENTIAL INFORMATION BELONGING
TO ANY PRIOR EMPLOYERS.

 

(D)           COMMENCEMENT DATE.  THE EXECUTIVE COMMENCED FULL-TIME EMPLOYMENT
ON SEPTEMBER 12, 2005.

 

2.             CASH AND INCENTIVE COMPENSATION.

 

(A)           SALARY.  THE COMPANY SHALL PAY THE EXECUTIVE AS COMPENSATION FOR
HIS SERVICES A BASE SALARY AT A GROSS ANNUAL RATE OF $215,000, PAYABLE IN
ACCORDANCE WITH THE COMPANY’S STANDARD PAYROLL SCHEDULE.  THE COMPENSATION
SPECIFIED IN THIS SUBSECTION (A), TOGETHER WITH ANY ADJUSTMENTS BY THE COMPANY
FROM TIME TO TIME, IS REFERRED TO IN THIS AGREEMENT AS “BASE SALARY.”

 

(B)           TARGET BONUS.  THE EXECUTIVE SHALL BE ELIGIBLE TO PARTICIPATE IN
AN ANNUAL BONUS PROGRAM THAT WILL PROVIDE HIM WITH AN OPPORTUNITY TO EARN A
POTENTIAL ANNUAL BONUS EQUAL TO 60.0% OF THE EXECUTIVE’S BASE SALARY.  THE
AMOUNT OF THE BONUS SHALL BE BASED UPON THE PERFORMANCE OF THE EXECUTIVE, AS SET
BY THE INDIVIDUAL PERFORMANCE OBJECTIVES DESCRIBED IN THIS SUBSECTION, AND THE
COMPANY IN EACH CALENDAR YEAR, AND SHALL BE PAID BY NO LATER THAN JANUARY 31 OF
THE FOLLOWING YEAR, CONTINGENT ON THE EXECUTIVE REMAINING EMPLOYED BY THE
COMPANY AS OF SUCH DATE.  THE EXECUTIVE’S INDIVIDUAL PERFORMANCE OBJECTIVES AND
THOSE OF THE COMPANY’S SHALL BE SET BY THE CEO AFTER CONSULTATION WITH THE
EXECUTIVE BY NO LATER THAN MARCH 31, OF EACH CALENDAR YEAR.  FOR CALENDAR YEAR
2005, THE EXECUTIVE’S BONUS SHALL BE PRORATED BASED ON THE NUMBER OF DAYS OF
SUCH YEAR THAT THE EXECUTIVE WAS EMPLOYED BY THE COMPANY.  ANY BONUS AWARDED OR
PAID TO THE EXECUTIVE WILL BE SUBJECT TO THE DISCRETION OF THE BOARD.

 

(C)           STOCK OPTIONS.  THE EXECUTIVE SHALL BE ELIGIBLE FOR AN ANNUAL
INCENTIVE STOCK OPTION GRANT SUBJECT TO THE APPROVAL OF THE BOARD.  THE PER
SHARE EXERCISE PRICE OF THE OPTION WILL BE EQUAL TO THE PER SHARE FAIR MARKET
VALUE OF THE COMMON STOCK ON THE DATE OF GRANT, AS DETERMINED BY THE BOARD OF
DIRECTORS.  THE TERM OF SUCH OPTION SHALL BE TEN (10) YEARS, SUBJECT TO EARLIER
EXPIRATION IN THE EVENT OF THE TERMINATION OF THE EXECUTIVE’S EMPLOYMENT.    THE
EXECUTIVE SHALL VEST IN 25% OF THE OPTION SHARES AFTER THE FIRST TWELVE (12)
MONTHS OF CONTINUOUS SERVICE AND SHALL VEST IN THE REMAINING OPTION SHARES IN
EQUAL MONTHLY INSTALLMENTS OVER THE NEXT THREE (3) YEARS OF CONTINUOUS SERVICE. 
THE GRANT OF EACH SUCH OPTION SHALL BE SUBJECT TO THE OTHER TERMS AND CONDITIONS
SET FORTH IN THE COMPANY’S 2005 INCENTIVE PLAN AND IN THE COMPANY’S STANDARD
FORM OF STOCK OPTION AGREEMENT.

 

3.             VACATION AND EXECUTIVE BENEFITS.  DURING THE TERM OF HIS
EMPLOYMENT, THE EXECUTIVE SHALL BE ELIGIBLE FOR 17 DAYS VACATION PER YEAR, IN
ACCORDANCE WITH THE COMPANY’S STANDARD POLICY FOR SENIOR MANAGEMENT, AS IT MAY
BE AMENDED FROM TIME TO TIME.  DURING THE TERM OF HIS EMPLOYMENT, THE EXECUTIVE
SHALL BE ELIGIBLE TO PARTICIPATE IN ANY EMPLOYEE BENEFIT PLANS MAINTAINED BY THE
COMPANY FOR SENIOR MANAGEMENT, SUBJECT IN EACH CASE TO THE GENERALLY APPLICABLE
TERMS AND CONDITIONS OF THE PLAN IN QUESTION AND TO THE DETERMINATIONS OF ANY
PERSON OR COMMITTEE ADMINISTERING SUCH PLAN.

 

4.             BUSINESS EXPENSES.  DURING THE TERM OF HIS EMPLOYMENT, THE
EXECUTIVE SHALL BE AUTHORIZED TO INCUR NECESSARY AND REASONABLE TRAVEL,
ENTERTAINMENT AND OTHER BUSINESS EXPENSES IN CONNECTION WITH HIS DUTIES
HEREUNDER.  THE COMPANY SHALL REIMBURSE THE EXECUTIVE FOR SUCH EXPENSES UPON
PRESENTATION OF AN ITEMIZED ACCOUNT AND APPROPRIATE SUPPORTING DOCUMENTATION,
ALL IN ACCORDANCE WITH THE COMPANY’S GENERALLY APPLICABLE POLICIES.

 

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5.             TERM OF EMPLOYMENT.

 

(A)           BASIC RULE.  THE COMPANY AGREES TO CONTINUE THE EXECUTIVE’S
EMPLOYMENT, AND THE EXECUTIVE AGREES TO REMAIN IN EMPLOYMENT WITH THE COMPANY,
FROM THE COMMENCEMENT DATE SET FORTH IN SECTION 1(D) UNTIL THE DATE WHEN THE
EXECUTIVE’S EMPLOYMENT TERMINATES PURSUANT TO SUBSECTION (B) BELOW.  THE
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY SHALL BE “AT WILL,” AND EITHER THE
EXECUTIVE OR THE COMPANY MAY TERMINATE THE EXECUTIVE’S EMPLOYMENT AT ANY TIME,
FOR ANY REASON, WITH OR WITHOUT CAUSE.  ANY CONTRARY REPRESENTATIONS, WHICH MAY
HAVE BEEN MADE TO THE EXECUTIVE SHALL BE SUPERSEDED BY THIS AGREEMENT.  THIS
AGREEMENT SHALL CONSTITUTE THE FULL AND COMPLETE AGREEMENT BETWEEN THE EXECUTIVE
AND THE COMPANY ON THE “AT WILL” NATURE OF THE EXECUTIVE’S EMPLOYMENT, WHICH MAY
ONLY BE CHANGED IN AN EXPRESS WRITTEN AGREEMENT SIGNED BY THE EXECUTIVE AND A
DULY AUTHORIZED OFFICER OF THE COMPANY.

 

(B)           TERMINATION.  THE COMPANY MAY TERMINATE THE EXECUTIVE’S EMPLOYMENT
AT ANY TIME AND FOR ANY REASON (OR NO REASON), AND WITH OR WITHOUT CAUSE, BY
GIVING THE EXECUTIVE NOTICE IN WRITING.  THE EXECUTIVE MAY TERMINATE HIS
EMPLOYMENT BY GIVING THE COMPANY FOURTEEN (14) DAYS ADVANCE NOTICE IN WRITING. 
THE EXECUTIVE’S EMPLOYMENT SHALL TERMINATE AUTOMATICALLY IN THE EVENT OF HIS
DEATH OR PERMANENT DISABILITY.  FOR PURPOSES OF THIS AGREEMENT, “PERMANENT
DISABILITY” SHALL MEAN THAT THE EXECUTIVE HAS BECOME SO PHYSICALLY OR MENTALLY
DISABLED AS TO BE INCAPABLE OF SATISFACTORILY PERFORMING THE DUTIES UNDER THIS
AGREEMENT FOR A PERIOD OF ONE HUNDRED EIGHTY (180) CONSECUTIVE CALENDAR DAYS.

 

(C)           RIGHTS UPON TERMINATION.  EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 6, UPON THE TERMINATION OF THE EXECUTIVE’S EMPLOYMENT PURSUANT TO THIS
SECTION 5, THE EXECUTIVE SHALL ONLY BE ENTITLED TO THE COMPENSATION, BENEFITS
AND REIMBURSEMENTS DESCRIBED IN SECTIONS 2, 3 AND 4 FOR THE PERIOD PRECEDING THE
EFFECTIVE DATE OF THE TERMINATION.  THE PAYMENTS UNDER THIS AGREEMENT SHALL
FULLY DISCHARGE ALL RESPONSIBILITIES OF THE COMPANY TO THE EXECUTIVE.

 

(D)           TERMINATION OF AGREEMENT.  THE TERMINATION OF THIS AGREEMENT SHALL
NOT LIMIT OR OTHERWISE AFFECT ANY OF THE EXECUTIVE’S OBLIGATIONS UNDER
SECTION 7.

 

6.             TERMINATION BENEFITS.

 

(A)           GENERAL RELEASE.  ANY OTHER PROVISION OF THIS AGREEMENT
NOTWITHSTANDING, SUBSECTIONS (B), (C) OR (D) BELOW SHALL NOT APPLY UNLESS THE
EXECUTIVE (I) HAS EXECUTED A GENERAL RELEASE IN A FORM PRESCRIBED BY THE COMPANY
OF ALL KNOWN AND UNKNOWN CLAIMS THAT HE MAY THEN HAVE AGAINST THE COMPANY OR
PERSONS AFFILIATED WITH THE COMPANY, AND (II) HAS AGREED NOT TO PROSECUTE ANY
LEGAL ACTION OR OTHER PROCEEDING BASED UPON ANY OF SUCH CLAIMS.

 

(B)           TERMINATION WITHOUT CAUSE.  IF, DURING THE TERM OF THIS AGREEMENT,
AND NOT IN CONNECTION WITH A CHANGE OF CONTROL AS ADDRESSED IN
SUBSECTION (C) BELOW, THE COMPANY TERMINATES EXECUTIVE’S EMPLOYMENT WITHOUT
CAUSE OR DUE TO PERMANENT DISABILITY OR EXECUTIVE RESIGNS FOR GOOD REASON, THEN:

 

(I)            THE EXECUTIVE SHALL IMMEDIATELY VEST IN AN ADDITIONAL NUMBER OF
SHARES UNDER ALL OUTSTANDING OPTIONS AS IF HE HAD PERFORMED TWELVE (12)
ADDITIONAL MONTHS OF SERVICE; AND

 

(II)           THE COMPANY SHALL PAY THE EXECUTIVE, AN AMOUNT EQUAL TO:  (X) THE
THEN CURRENT YEAR’S TARGET BONUS PRORATED FOR THE NUMBER OF DAYS OF EXECUTIVE IS
EMPLOYED IN SAID YEAR, PAYABLE IN A LUMP SUM WITHIN 30 DAYS OF THE DATE OF
TERMINATION OF EMPLOYMENT; (Y) ONE YEAR’S BASE SALARY, PAYABLE IN EQUAL
INSTALLMENTS IN ACCORDANCE WITH THE COMPANY’S

 

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STANDARD PAYROLL SCHEDULE; AND (Z) THE GREATER OF THE THEN CURRENT YEAR’S TARGET
BONUS OR THE ACTUAL PRIOR YEAR’S BONUS, PAYABLE IN A LUMP SUM ON THE ONE YEAR
ANNIVERSARY OF TERMINATION OF EMPLOYMENT.  THE EXECUTIVE’S BASE SALARY SHALL BE
PAID AT THE RATE IN EFFECT AT THE TIME OF THE TERMINATION OF EMPLOYMENT.

 

(C)           UPON A CHANGE OF CONTROL. IN THE EVENT OF THE OCCURRENCE OF A
CHANGE IN CONTROL WHILE THE EXECUTIVE IS EMPLOYED BY THE COMPANY:

 

(I)            THE EXECUTIVE SHALL IMMEDIATELY VEST IN AN ADDITIONAL NUMBER OF
SHARES UNDER ALL OUTSTANDING OPTIONS AS IF HE HAD PERFORMED TWELVE (12)
ADDITIONAL MONTHS OF SERVICE; AND

 

(II)           IF WITHIN TWELVE (12) MONTHS FOLLOWING THE OCCURRENCE OF THE
CHANGE OF CONTROL, ONE OF THE FOLLOWING EVENTS OCCURS:

 

(A) THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY THE COMPANY WITHOUT CAUSE; OR

 

(B) THE EXECUTIVE RESIGNS FOR GOOD REASON

 

THEN THE EXECUTIVE SHALL IMMEDIATELY VEST AS TO ALL SHARES UNDER ALL OUTSTANDING
OPTIONS AND THE COMPANY SHALL PAY THE EXECUTIVE, IN A LUMP SUM, AN AMOUNT EQUAL
TO:  (I) THE THEN CURRENT YEAR’S TARGET BONUS PRORATED FOR THE NUMBER OF DAYS OF
EXECUTIVE IS EMPLOYED IN SAID YEAR; (II) ONE YEAR’S BASE SALARY; AND (III) THE
GREATER OF THE THEN CURRENT YEAR’S TARGET BONUS OR THE ACTUAL PRIOR YEAR’S
BONUS.  THE EXECUTIVE’S BASE SALARY SHALL BE PAID AT THE RATE IN EFFECT AT THE
TIME OF THE TERMINATION OF EMPLOYMENT.

 

(D)           HEALTH INSURANCE.  IF SUBSECTION (B) OR (C) ABOVE APPLIES, AND IF
THE EXECUTIVE ELECTS TO CONTINUE HIS HEALTH INSURANCE COVERAGE UNDER THE
CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985, AS AMENDED (“COBRA”)
FOLLOWING THE TERMINATION OF HIS EMPLOYMENT, THEN THE COMPANY SHALL PAY THE
EXECUTIVE’S MONTHLY PREMIUM UNDER COBRA UNTIL THE EARLIEST OF (I) 12 MONTHS
FOLLOWING THE TERMINATION OF THE EXECUTIVE’S EMPLOYMENT, OR (II) THE DATE UPON
WHICH THE EXECUTIVE COMMENCES EMPLOYMENT WITH AN ENTITY OTHER THAN THE COMPANY.

 

(E)           DEFINITION OF “CAUSE.”  FOR ALL PURPOSES UNDER THIS AGREEMENT,
“CAUSE” SHALL MEAN ANY OF THE FOLLOWING:

 

(I)            UNAUTHORIZED USE OR DISCLOSURE OF THE CONFIDENTIAL INFORMATION OR
TRADE SECRETS OF THE COMPANY;

 

(II)           ANY BREACH OF THIS AGREEMENT OR THE EMPLOYEE PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT BETWEEN THE EXECUTIVE AND THE COMPANY;

 

(III)          CONVICTION OF, OR A PLEA OF “GUILTY” OR “NO CONTEST” TO, A FELONY
UNDER THE LAWS OF THE UNITED STATES OR ANY STATE THEREOF;

 

(IV)          MISAPPROPRIATION OF THE ASSETS OF THE COMPANY OR ANY ACT OF FRAUD
OR EMBEZZLEMENT BY EXECUTIVE, OR ANY ACT OF DISHONESTY BY EXECUTIVE IN
CONNECTION WITH THE PERFORMANCE OF HIS DUTIES FOR THE COMPANY THAT ADVERSELY
AFFECTS THE BUSINESS OR AFFAIRS OF THE COMPANY; OR

 

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(V)           INTENTIONAL MISCONDUCT OR THE EXECUTIVE’S FAILURE TO
SATISFACTORILY PERFORM HIS/HER DUTIES AFTER HAVING RECEIVED WRITTEN NOTICE OF
SUCH FAILURE AND AT LEAST THIRTY (30) DAYS TO CURE SUCH FAILURE.

 

The foregoing shall not be deemed an exclusive list of all acts or omissions
that the Company may consider as grounds for the termination of the Executive’s
Employment.

 

(F)            DEFINITION OF “GOOD REASON.”  FOR ALL PURPOSES UNDER THIS
AGREEMENT, THE EXECUTIVE’S RESIGNATION FOR “GOOD REASON” SHALL MEAN THE
EXECUTIVE’S RESIGNATION WITHIN NINETY (90) DAYS THE OCCURRENCE OF ANY ONE OR
MORE OF THE FOLLOWING EVENTS:

 

(I)            THE EXECUTIVE’S POSITION, AUTHORITY OR RESPONSIBILITIES BEING
SIGNIFICANTLY REDUCED;

 

(II)           THE EXECUTIVE BEING ASKED TO RELOCATE HIS PRINCIPAL PLACE OF
EMPLOYMENT SUCH THAT HIS COMMUTING DISTANCE FROM HIS RESIDENCE PRIOR TO THE
CHANGE OF CONTROL IS INCREASED BY OVER THIRTY-FIVE (35) MILES;

 

(III)          THE EXECUTIVE’S ANNUAL BASE SALARY OR BONUS BEING REDUCED; OR

 

(IV)          THE EXECUTIVE’S BENEFITS BEING MATERIALLY REDUCED.

 

(G)           DEFINITION OF “CHANGE OF CONTROL.”  FOR ALL PURPOSES UNDER THIS
AGREEMENT, “CHANGE OF CONTROL” SHALL MEAN ANY OF THE FOLLOWING:

 

(I)            A SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY;

 

(II)           THE ACQUISITION OF MORE THAN FIFTY PERCENT (50%) OF THE COMMON
STOCK OF THE COMPANY (WITH ALL CLASSES OR SERIES THEREOF TREATED AS A SINGLE
CLASS) BY ANY PERSON OR GROUP OF PERSONS;

 

(III)          A REORGANIZATION OF THE COMPANY WHEREIN THE HOLDERS OF COMMON
STOCK OF THE COMPANY RECEIVE STOCK IN ANOTHER COMPANY (OTHER THAN A SUBSIDIARY
OF THE COMPANY), A MERGER OF THE COMPANY WITH ANOTHER COMPANY WHEREIN THERE IS A
FIFTY PERCENT (50%) OR GREATER CHANGE IN THE OWNERSHIP OF THE COMMON STOCK OF
THE COMPANY AS A RESULT OF SUCH MERGER, OR ANY OTHER TRANSACTION IN WHICH THE
COMPANY (OTHER THAN AS THE PARENT CORPORATION) IS CONSOLIDATED FOR FEDERAL
INCOME TAX PURPOSES OR IS ELIGIBLE TO BE CONSOLIDATED FOR FEDERAL INCOME TAX
PURPOSES WITH ANOTHER CORPORATION; OR

 

(IV)          IN THE EVENT THAT THE COMMON STOCK IS TRADED ON AN ESTABLISHED
SECURITIES MARKET, A PUBLIC ANNOUNCEMENT THAT ANY PERSON HAS ACQUIRED OR HAS THE
RIGHT TO ACQUIRE BENEFICIAL OWNERSHIP OF MORE THAN FIFTY PERCENT (50%) OF THE
THEN-OUTSTANDING COMMON STOCK AND FOR THIS PURPOSE THE TERMS “PERSON” AND
“BENEFICIAL OWNERSHIP” SHALL HAVE THE MEANINGS PROVIDED IN SECTION 13(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 OR RELATED RULES PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR THE COMMENCEMENT OF OR PUBLIC
ANNOUNCEMENT OF AN INTENTION TO MAKE A TENDER OFFER OR EXCHANGE OFFER FOR MORE
THAN FIFTY PERCENT (50%) OF THE THEN OUTSTANDING COMMON STOCK.

 

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7.             NON-SOLICITATION AND NON-DISCLOSURE.

 

(A)           NON-SOLICITATION.  DURING THE PERIOD COMMENCING ON THE DATE OF
THIS AGREEMENT AND CONTINUING UNTIL THE FIRST ANNIVERSARY OF THE DATE WHEN THE
EXECUTIVE’S EMPLOYMENT TERMINATED FOR ANY REASON, THE EXECUTIVE SHALL NOT
DIRECTLY OR INDIRECTLY, PERSONALLY OR THROUGH OTHERS, SOLICIT OR ATTEMPT TO
SOLICIT (ON THE EXECUTIVE’S OWN BEHALF OR ON BEHALF OF ANY OTHER PERSON OR
ENTITY) THE EMPLOYMENT OF ANY EMPLOYEE OF THE COMPANY OR ANY OF THE COMPANY’S
AFFILIATES.

 

(B)           PROPRIETARY INFORMATION.  AS A CONDITION OF EMPLOYMENT, THE
EXECUTIVE HAS PREVIOUSLY ENTERED INTO A PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT WITH THE COMPANY, ATTACHED TO THIS AGREEMENT AS EXHIBIT A, WHICH IS
INCORPORATED HEREIN BY REFERENCE.

 

8.             SUCCESSORS.

 

(A)           COMPANY’S SUCCESSORS.  THIS AGREEMENT SHALL BE BINDING UPON ANY
SUCCESSOR (WHETHER DIRECT OR INDIRECT AND WHETHER BY PURCHASE, LEASE, MERGER,
CONSOLIDATION, LIQUIDATION OR OTHERWISE) TO ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S BUSINESS AND/OR ASSETS.  FOR ALL PURPOSES UNDER THIS AGREEMENT, THE
TERM “COMPANY” SHALL INCLUDE ANY SUCCESSOR TO THE COMPANY’S BUSINESS AND/OR
ASSETS WHICH BECOMES BOUND BY THIS AGREEMENT.

 

(B)           EXECUTIVE’S SUCCESSORS.  THIS AGREEMENT AND ALL RIGHTS OF THE
EXECUTIVE HEREUNDER SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE
EXECUTIVE’S PERSONAL OR LEGAL REPRESENTATIVES, EXECUTORS, ADMINISTRATORS,
SUCCESSORS, HEIRS, DISTRIBUTEES, DEVISEES AND LEGATEES.

 

9.             MISCELLANEOUS PROVISIONS.

 

(A)           NOTICE.  NOTICES AND ALL OTHER COMMUNICATIONS CONTEMPLATED BY THIS
AGREEMENT SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN WHEN
PERSONALLY DELIVERED OR WHEN MAILED BY OVERNIGHT COURIER, U.S. REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND POSTAGE PREPAID.  IN THE CASE OF
THE EXECUTIVE, MAILED NOTICES SHALL BE ADDRESSED TO HIM AT THE HOME ADDRESS
WHICH HE MOST RECENTLY COMMUNICATED TO THE COMPANY IN WRITING.  IN THE CASE OF
THE COMPANY, MAILED NOTICES SHALL BE ADDRESSED TO ITS CORPORATE HEADQUARTERS,
AND ALL NOTICES SHALL BE DIRECTED TO THE ATTENTION OF ITS SECRETARY.

 

(B)           MODIFICATIONS AND WAIVERS.  NO PROVISION OF THIS AGREEMENT SHALL
BE MODIFIED, WAIVED OR DISCHARGED UNLESS THE MODIFICATION, WAIVER OR DISCHARGE
IS AGREED TO IN WRITING AND SIGNED BY THE EXECUTIVE AND BY AN AUTHORIZED OFFICER
OF THE COMPANY (OTHER THAN THE EXECUTIVE).  NO WAIVER BY EITHER PARTY OF ANY
BREACH OF, OR OF COMPLIANCE WITH, ANY CONDITION OR PROVISION OF THIS AGREEMENT
BY THE OTHER PARTY SHALL BE CONSIDERED A WAIVER OF ANY OTHER CONDITION OR
PROVISION OR OF THE SAME CONDITION OR PROVISION AT ANOTHER TIME.

 

(C)           WHOLE AGREEMENT.  NO OTHER AGREEMENTS, REPRESENTATIONS OR
UNDERSTANDINGS (WHETHER ORAL OR WRITTEN) WHICH ARE NOT EXPRESSLY SET FORTH IN
THIS AGREEMENT HAVE BEEN MADE OR ENTERED INTO BY EITHER PARTY WITH RESPECT TO
THE SUBJECT MATTER OF THIS AGREEMENT.  THIS AGREEMENT AND THE PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT CONTAIN THE ENTIRE UNDERSTANDING OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF.

 

(D)           WITHHOLDING TAXES.  ALL PAYMENTS MADE UNDER THIS AGREEMENT SHALL
BE SUBJECT TO REDUCTION TO REFLECT TAXES OR OTHER CHARGES REQUIRED TO BE
WITHHELD BY LAW.

 

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(E)           CHOICE OF LAW.  THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA (EXCEPT PROVISIONS GOVERNING THE CHOICE OF LAW).

 

(F)            SEVERABILITY.  THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OR PROVISIONS OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR
ENFORCEABILITY OF ANY OTHER PROVISION HEREOF, WHICH SHALL REMAIN IN FULL FORCE
AND EFFECT.

 

(G)           ARBITRATION.  EACH PARTY AGREES THAT ANY AND ALL DISPUTES WHICH
ARISE OUT OF OR RELATE TO THE EXECUTIVE’S EMPLOYMENT, THE TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT, OR THE TERMS OF THIS AGREEMENT SHALL BE RESOLVED THROUGH
FINAL AND BINDING ARBITRATION.  SUCH ARBITRATION SHALL BE IN LIEU OF ANY TRIAL
BEFORE A JUDGE AND/OR JURY, AND THE EXECUTIVE AND COMPANY EXPRESSLY WAIVE ALL
RIGHTS TO HAVE SUCH DISPUTES RESOLVED VIA TRIAL BEFORE A JUDGE AND/OR JURY. 
SUCH DISPUTES SHALL INCLUDE, WITHOUT LIMITATION, CLAIMS FOR BREACH OF CONTRACT
OR OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, CLAIMS OF DISCRIMINATION,
CLAIMS UNDER ANY FEDERAL, STATE OR LOCAL LAW OR REGULATION NOW IN EXISTENCE OR
HEREINAFTER ENACTED AND AS AMENDED FROM TIME TO TIME CONCERNING IN ANY WAY THE
SUBJECT OF THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR ITS TERMINATION.  THE
ONLY CLAIMS NOT COVERED BY THIS AGREEMENT TO ARBITRATE DISPUTES ARE:  (I) CLAIMS
FOR BENEFITS UNDER THE UNEMPLOYMENT INSURANCE BENEFITS; (II) CLAIMS FOR WORKERS’
COMPENSATION BENEFITS UNDER ANY OF THE COMPANY’S WORKERS’ COMPENSATION INSURANCE
POLICY OR FUND; (III) CLAIMS ARISING FROM OR RELATING TO THE NON-COMPETITION
PROVISIONS OF THIS AGREEMENT; AND (IV) CLAIMS CONCERNING THE VALIDITY,
INFRINGEMENT, OWNERSHIP, OR ENFORCEABILITY OF ANY TRADE SECRET, PATENT RIGHT,
COPYRIGHT, TRADEMARK OR ANY OTHER INTELLECTUAL PROPERTY RIGHT, AND ANY CLAIM
PURSUANT TO OR UNDER ANY EXISTING CONFIDENTIAL/PROPRIETARY/TRADE SECRETS
INFORMATION AND INVENTIONS AGREEMENT(S) SUCH AS, BUT NOT LIMITED TO, THE
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT.  WITH RESPECT TO SUCH
DISPUTES, THEY SHALL NOT BE SUBJECT TO ARBITRATION; RATHER, THEY WILL BE
RESOLVED PURSUANT TO APPLICABLE LAW.

 

Arbitration shall be conducted in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association (“AAA
Rules”), provided, however, that the arbitrator shall allow the discovery
authorized by California Code of Civil Procedure section 1282, et seq., or any
other discovery required by applicable law in arbitration proceedings,
including, but not limited to, discovery available under the applicable state
and/or federal arbitration statutes.  Also, to the extent that any of the AAA
Rules or anything in this arbitration section conflicts with any arbitration
procedures required by applicable law, the arbitration procedures required by
applicable law shall govern.

 

Arbitration will be conducted in Santa Clara County, California or, if the
Executive does not reside within 100 miles of Santa Clara County at the time the
dispute arises, then the arbitration may take place in the largest metropolitan
area within 50 miles of the Executive’s place of residence when the dispute
arises.

 

During the course of the arbitration, the Executive and the Company will each
bear equally the arbitrator’s fee and any other type of expense or cost of
arbitration, unless applicable law requires otherwise, and each shall bear their
own respective attorneys’ fees incurred in connection with the arbitration.  The
arbitrator will not have authority to award attorneys’ fees unless a statute or
contract at issue in the dispute authorizes the award of attorneys’ fees to the
prevailing party. In such case, the arbitrator shall have the authority to make
an award of attorneys’ fees as required or permitted by the applicable statute
or contract.  If there is a dispute as to whether the Executive or the Company
is the prevailing party in the arbitration, the arbitrator will decide this
issue.

 

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The arbitrator shall issue a written award that sets forth the essential
findings of fact and conclusions of law on which the award is based.  The
arbitrator shall have the authority to award any relief authorized by law in
connection with the asserted claims or disputes.  The arbitrator’s award shall
be subject to correction, confirmation, or vacation, as provided by applicable
law setting forth the standard of judicial review of arbitration awards. 
Judgment upon the arbitrator’s award may be entered in any court having
jurisdiction thereof.

 

(H)           NO ASSIGNMENT.  THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS OF
THE EXECUTIVE HEREUNDER ARE PERSONAL TO THE EXECUTIVE AND MAY NOT BE TRANSFERRED
OR ASSIGNED BY THE EXECUTIVE AT ANY TIME.  THE COMPANY MAY ASSIGN ITS RIGHTS
UNDER THIS AGREEMENT TO ANY ENTITY THAT ASSUMES THE COMPANY’S OBLIGATIONS
HEREUNDER IN CONNECTION WITH ANY SALE OR TRANSFER OF ALL OR A SUBSTANTIAL
PORTION OF THE COMPANY’S ASSETS TO SUCH ENTITY.

 

(I)            COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

[The remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

 

 

 

Gil Laks

 

 

 

  /s/ Gil Laks

 

 

 

 

 

 

ALIGN TECHNOLOGY, INC.

 

 

 

 

 

  /s/ Thomas M. Prescott

 

 

By: Thomas M. Prescott

 

Title: President and CEO

 

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EXHIBIT A

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
(ATTACHED)

 

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ALIGN TECHNOLOGY, INC.

 

EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

 

In consideration of my employment or continued employment by ALIGN TECHNOLOGY,
INC. (the “Company”), and the compensation now and hereafter paid to me, I
hereby agree as follows:

 

1.             PROPRIETARY INFORMATION.  At all times during my employment and
thereafter, I will hold in strictest confidence and will not disclose, use,
lecture upon or publish any of the Company’s Proprietary Information (defined
below), except as such disclosure, use or publication may be required in
connection with my work for the Company, or unless an officer of the Company
expressly authorizes such in writing.  “Proprietary Information” shall mean any
and all confidential and/or proprietary knowledge, data or information of the
Company, its affiliated entities, customers and suppliers, including but not
limited to information relating to products, processes, know-how, designs,
formulas, methods, developmental or experimental work, improvements,
discoveries, inventions, ideas, source and object codes, data, programs, other
works of authorship, and plans for research and development.  During my
employment by the Company I will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employer or any other person
to whom I have an obligation of confidentiality, and I will not bring onto the
premises of the Company any unpublished documents or any property belonging to
any former employer or any other person to whom I have an obligation of
confidentiality unless consented to in writing by that former employer or
person.

 

2.             Assignment of Inventions.

 

2.1.         Proprietary Rights.  The term “Proprietary Rights” shall mean all
trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.

 

2.2.         Inventions. The term “Inventions” shall mean all trade secrets,
inventions, mask works, ideas, processes, formulas, source and object codes,
data, programs, other works of authorship, know-how, improvements, discoveries,
developments, designs and techniques.

 

2.3.         Prior Inventions. I have set forth on Exhibit B (Previous
Inventions) attached hereto a complete list of all Inventions that I have, alone
or jointly with others, made prior to the commencement of my employment with the
Company that I consider to be my property or the property of third parties and
that I wish to have excluded from the scope of this Agreement (collectively
referred to as “Prior Inventions”).  If no such disclosure is attached, I
represent that there are no Prior Inventions.  If, in the course of my
employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
modify, use and sell such Prior Invention.  Notwithstanding the foregoing, I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company’s prior written
consent.

 

2.4.         Assignment of Inventions.  Subject to Section 2.6 and except for
those Inventions which I can prove qualify fully under the provisions of
California Labor Code 2870 (as set forth in Exhibit A), I hereby assign and
agree to assign in the future (when any such Inventions or Proprietary Rights
are first reduced to practice or first fixed in a tangible medium, as
applicable) to the Company all my right, title and interest in and to any and
all Inventions (and all Proprietary Rights with respect thereto).  I will, at
the Company’s request, promptly execute a written assignment to the Company of
any such Company Invention, and I will preserve any such Invention as part of
the Proprietary Information of the Company (the “Company Inventions”).

 

2.5.         Obligation to Keep Company Informed.  I will promptly and fully
disclose in writing to the Company all Inventions during my employment and for
one (1) year after my employment, including any that may be covered by
Section 2870.  I agree to assist in every proper way and to execute those
documents and take such acts as are reasonably requested by the Company to
obtain,

 

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sustain and from time to time enforce patents, copyrights and other rights and
protections relating to Inventions in the United States or any other country.

 

2.6.         Government or Third Party.  I also agree to assign all my right,
title and interest in and to any particular Company Invention to a third party,
including without limitation the United States, as directed by the Company.

 

3.             NO CONFLICTING OBLIGATION.  I REPRESENT that my performance of
all the terms of this Agreement and as an employee of the Company does not and
will not breach any agreement to keep in confidence information acquired by me
in confidence or in trust prior to my employment by the Company.  I have not
entered into, and I agree I will not enter into, any agreement either written or
oral in conflict herewith.

 

4.             RETURN OF COMPANY DOCUMENTS.  Upon termination of my employment
with the Company for any reason whatsoever, voluntarily or involuntarily, and at
any earlier time the Company requests, I will deliver to the person designated
by the Company all originals and copies of all documents and other property of
the Company in my possession, under my control or to which I may have access.  I
will not reproduce or appropriate for my own use, or for the use of others, any
property, Proprietary Information or Company Inventions.

 

5.             LEGAL AND EQUITABLE REMEDIES.  Because my services are personal
and unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to any
other rights and remedies that the Company may have for a breach of this
Agreement.

 

6.             NOTICES.  Any notices required or permitted hereunder shall be
given to the appropriate party at the address specified below or at such other
address as the party shall specify in writing.  Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by certified
or registered mail, three (3) days after the date of mailing.

 

7.             EMPLOYMENT.  I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without cause.

 

GENERAL PROVISIONS.  This Agreement will be governed by and construed according
to the laws of the State of California, as such laws are applied to agreements
entered into and to be performed entirely within California between California
residents.  In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.  This Agreement will be binding upon my heirs, executors, administrators
and other legal representatives and will be for the benefit of the Company, its
successors, and its assigns.  The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.  No waiver by the Company of any
breach of this Agreement shall be a waiver of any preceding or succeeding
breach.  No waiver by the Company of any right under this Agreement shall be
construed as a waiver of any other right.  The obligations pursuant to Sections
1 and 2 of this Agreement shall apply to any time during which I was previously
employed, or am in the future employed, by the Company as a consultant if no
other agreement governs nondisclosure and assignment of inventions during such
period.  This Agreement is the final, complete and exclusive agreement of the
parties with respect to the subject matter hereof and supersedes and merges all
prior discussions between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged.  Any subsequent change
or changes in my duties, salary or compensation will not affect the validity or
scope of this Agreement.

 

12

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This Agreement shall be effective as of the first day of my employment with the
Company.

 

Dated:

 

 

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

(Printed Name)

 

 

 

 

 

ACCEPTED AND AGREED TO:
ALIGN TECHNOLOGY, INC.

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

(Address)

 

 

 

 

 

 

 

 

 

 

 

Dated:

 

 

 

 

 

13

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EXHIBIT A

 

LIMITED EXCLUSION NOTIFICATION

 

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor
Code that the foregoing Agreement between you and the Company does not require
you to assign or offer to assign to the Company any invention that you developed
entirely on your own time without using the Company’s equipment, supplies,
facilities or trade secret information except for those inventions that either:

 

1.             Relate at the time of conception or reduction to practice of the
invention to the Company’s business, or actual or demonstrably anticipated
research or development of the Company;

 

2.             Result from any work performed by you for the Company.

 

To the extent a provision in the foregoing Agreement purports to require you to
assign an invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of this state and is unenforceable.

 

This limited exclusion does not apply to any patent or invention covered by a
contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.

 

I ACKNOWLEDGE RECEIPT of a copy of this notification.

 

 

By:

 

 

 

(PRINTED NAME OF EMPLOYEE)

 

 

 

Date:

 

 

 

 

WITNESSED BY:

 

 

 

 

 

 

 

 

(PRINTED NAME OF REPRESENTATIVE)

 

 

A-1

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EXHIBIT B

 

TO:

ALIGN TECHNOLOGY, INC.

 

 

FROM:

 

 

 

 

DATE:

 

 

 

 

SUBJECT:

Previous Inventions

 

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1.             Except as listed in Section 2 below, the following is a complete
list of all inventions or improvements relevant to the subject matter of my
employment by ALIGN TECHNOLOGY, INC. (the “Company”) that have been made or
conceived or first reduced to practice by me alone or jointly with others prior
to my engagement by the Company:

 

o

 

No inventions or improvements.

 

 

 

o

 

See below:

 

 

 

o         Additional sheets attached.

 

2.             Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):

 

Invention or Improvement

 

Party(ies)

 

Relationship

 

 

 

 

 

 

 

 

1.

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

 

 

 

 

 

 

 

o         Additional sheets attached.

 

2

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