Document:

Unassociated Document

     

    
      
        	
                Exhibit
                  10.1

              	
                EXECUTION
                  COPY

              

      

    

    

      RETIREMENT
        &
        GENERAL RELEASE AGREEMENT

       

      This
        Retirement and General Release Agreement (“Agreement”) is made by and between
        Eldon M. Bullington (“Bullington”) and Align Technology, Inc. (“Align”).
        Bullington and Align will hereinafter be referred to as the
“Parties.”

      

      R
        E C I T A L S

       

      WHEREAS,
        Bullington previously notified Align of his intention to retire on December
        14,
        2007 (the “Retirement Date”); and

      

      WHEREAS,
        Align and Bullington (the “Parties”) have agreed on terms and conditions
        governing Bullington’s retirement.

      

      NOW,
        THEREFORE, for and in consideration of the promises and undertakings described
        below, the Parties agree as follows:

      

      

      A
        G R E E M E N T S

       

      	A.  	
              ALIGN.
                

            

       

      1.  Separation
        from Service.
        Bullington shall continue to serve as Vice President, Finance and Chief
        Financial Officer of Align until December 14, 2007. Bullington’s separation from
        employment with Align will be effective at the close of business on
        December 14, 2007 (the “Retirement Date”). 
        On the
        Retirement Date, Bullington shall cease performing services for Align, and
        after
        that date shall not be allowed to act on Align’s behalf. 

       

      2.  Incentive
        Compensation Payments.
        On the
        Retirement Date, Bullington shall be entitled to the payment of $177,216
        (the
“Target Bonus Amount”). This amount shall be paid to Bullington within ten days
        of either the Retirement Date or the date of execution of this agreement,
        whichever is later. In addition, to the extent the Compensation Committee
        of
        Align’s Board of Directors approves a performance modifier related to its
        executive officer incentive awards of greater than one (1), Align agrees
        to
        multiply the Target Bonus Amount by the applicable performance modifier and
        remit to Bullington any amount greater than the Target Bonus Amount by check
        made payable to Eldon Bullington and delivered to Bullington’s home address no
        later than January 31, 2008 (the “Additional Bonus Amount”). Each of the Target
        Bonus Amount and the Additional Bonus Amount shall be paid less applicable
        deductions and withholdings. 

       

      	B.  	
              BULLINGTON.

            

       

      1.  General
        Release.
        In
        consideration of the bonus payout described above, Bullington hereby fully
        and
        forever releases, waives, discharges and promises not to sue or otherwise
        institute or cause to be instituted any legal or administrative proceedings
        against Align or any of its current and former officers, directors, attorneys,
        shareholders, predecessor, successor, affiliated or related companies, agents,
        employees and assignees thereof (collectively, the “Company”), with respect to
        any and all liabilities, claims, demands, contracts, debts, obligations and
        causes of action of any nature, kind, and description, whether in law, equity
        or
        otherwise, whether or not now known or ascertained, which currently do or
        may
        exist, including without limitation any matter, cause or claim arising from
        or
        relating in any way toBullington’s employment with Align or the termination
        therefrom, including, but not limited to any claims for unpaid wages, severance,
        benefits, penalties, breach of contract, breach of the covenant of good faith
        and fair dealing, infliction of emotional distress, misrepresentation, claims
        under Title VII of the Civil Rights Act, under the Age Discrimination in
        Employment Act, under the California Fair Employment and Housing Act, under
        the
        California Labor Code, under the Employment Retirement Income and Security
        Act
        and under any other statutory or common law claims relating to employment
        or the
        termination thereof,
        except
        any
        claims Bullington may have, which, as a matter of law, are not subject to
        waiver, such as:

      

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                    Exhibit
                      10.1

                  	
                    EXECUTION
                      COPY

                  

          

        

         

      

      	a.  	
              unemployment
                insurance benefits pursuant to the terms of applicable
                law;

            

      	b.  	
              workers’
                compensation insurance benefits pursuant to Division 4 of the California
                Labor Code, under the terms of any workers’ compensation insurance policy
                or fund of Align;

            

      	c.  	
              continued
                participation in certain of Align’s group benefit plans on a temporary
                basis pursuant to the federal law known as
                COBRA;

            

       

      	d.  	
              rights
                or claims under the Age Discrimination in Employment Act (“ADEA”) that may
                arise after the date this Agreement is signed;

            

       

      	e.  	
              the
                right to file an administrative charge with the Equal Employment
                Opportunity Commission, the Department of Fair Employment & Housing,
                the National Labor Relations Board and any other governmental entity
                to
                which waiver of the right to file an administrative claim is unlawful;
                

            

       

      	f.  	
              claims
                for indemnification under California Labor Code section 2802, including,
                but not limited to, any claims for indemnification as a result of
                any
                lawsuits or other actions brought against Bullington and/or the Company
                arising out of Bullington’s duties as CFO, to the extent that and limited
                to such claims that are based actions that were within the course
                and
                scope of Bullington’s prior employment with the Company, including without
                limitation any litigation filed by Michael Swartzburg.
                

            

       

      With
        regard to Section B.1.e., Bullington understands and agrees that, in the
        event
        he files an administrative charge, he shall not seek, be entitled to, or
        accept
        any financial remuneration of any type as a result of the charge. With regard
        to
        Section B.1.f., Bullington acknowledges that he is presently unaware of any
        claims for indemnification that have not already been submitted to the Company.
        

       

      2.  Waiver
        - Civil Code Section 1542.
        Bullington understands and agrees that Section B.1., above, applies to claims,
        known and presently unknown by Bullington; and that this means that if,
        hereafter, Bullington discovers facts different from or in addition to those
        which Bullington now knows or believes to be true, that the releases, waivers,
        discharge and promise not to sue or otherwise institute legal action shall
        be
        and remain effective in all respects notwithstanding such different or
        additional facts or the discovery of such fact. Accordingly, Bullington hereby
        agrees that he fully and forever waives any and all rights and benefits
        conferred upon his by the provisions of Section 1542 of the Civil Code of
        the
        State of California which states as follows (parentheticals added):

       

      A
        general
        release does not extend to claims which the creditor [i.e.,
        Bullington] does not know or suspect to exist in his favor at the time of
        executing the release, which if known by him or her must have materially
        affected his or her settlement with the debtor [i.e.,
        the
        Company].

      
        

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                      Exhibit
                        10.1

                    	
                      EXECUTION
                        COPY

                    

            

          

           

        

      

      3.  No
        Other Pending Claims.
        Bullington hereby represents and warrants that he has neither filed nor served
        any claim, demand, suit or legal proceeding against the Company.

       

      4.  No
        Prior Assignments.
        Bullington hereby represents and warrants that he has not assigned or
        transferred, or purported to assign or transfer, to any third person or entity
        any claim, right, liability, demand, obligation, expense, action or causes
        of
        action being waived or released pursuant to this Agreement.

       

      5.  Material
        Inducements.
        Bullington hereby agrees and acknowledges that the releases, waivers and
        promises contained in this Agreement, including the promises of confidentiality
        and non-disclosure, are material inducements for the consideration described
        in
        Section A., above. 

       

      6.  Agreement
        Inures to Align.
        Bullington hereby agrees and understands that this Agreement shall bind him,
        and
        his heirs, executors, administrators and agents thereof and that it inures
        to
        the benefit of Align and its current and former officers, directors, attorneys,
        shareholders, predecessors, successors, affiliated or related companies,
        agents,
        employees and assignees thereof. 

       

      7.  Proprietary
        Information.
        Bullington hereby acknowledges and agrees that (a) he is bound by, and has
        continuing obligations under, the Proprietary Information and Inventions
        Agreement (“PIIA”) signed by him on October 1, 2002 and the Amended and Restated
        Employment Agreement by and between Bullington and Align dated April 5, 2007;
        (b) he has returned to Align all items of property paid for and/or provided
        by
        Align for his use during employment with Align including, but not limited
        to,
        any laptops, computer and office equipment, software programs, cell phones,
        pagers, access cards and keys, credit and calling cards; and (c) he has returned
        to Align all documents (electronic and paper) created and received by him
        during
        his employment with Align, and he has not retained any such documents, except
        he
        may keep his personal copies of (i) documents evidencing his hire, compensation,
        benefits and termination (including this Agreement); (ii) any materials
        distributed generally to stockholders of the Company, and (iii) his copy
        of the
        PIIA. The PIIA is incorporated herein by this reference.

       

      	C.  	
              ALIGN
                AND BULLINGTON.

            

       

      1.  Attorneys
        Fees and Expenses.
        Each
        party to this Agreement shall bear their own respective attorneys’ fees and
        expenses related to the negotiation of this Agreement, and each agrees to
        hold
        the other harmless from the payment of all such attorneys’ fees and
        expenses.

       

      2.  No
        Admission.
        Nothing
        contained in this Agreement shall constitute, be construed or be treated
        as an
        admission of liability or wrongdoing by Bullington, by Align, or by any current
        or former employee, officer or director of Align.

       

      3.  Governing
        Law.
        California law shall govern the construction, interpretation and enforcement
        of
        this Agreement.

       

      4.  Severability.
        If any
        provision or portion thereof, of this Agreement shall for any reason be held
        to
        be invalid or unenforceable or to be contrary to public policy or any law,
        then
        the remainder of the Agreement shall not be affected thereby.

       

      5.  Arbitration
        of Disputes Arising from Agreement.
        Any and
        all disputes that arise out or relate to this Agreement or any of the subjects
        hereof shall be resolved through final and binding arbitration. Binding
        arbitration will be conducted in Santa Clara County in accordance with
        California Code of Civil Procedure section 1282, et
        seq.,
        and
        the rules and regulations of the American Arbitration Association then in
        effect
        for resolution of commercial disputes. Each of the Parties understands and
        agrees that arbitration shall be instead of any civil litigation, each waives
        its right to a jury trial, and each understands and agrees that the arbitrator’s
        decision shall be final and binding to the fullest extent permitted by law
        and
        enforceable by any court having jurisdiction thereof. Each of the Parties
        will
        bear their own respective attorneys’ fees and will equally share the cost of
        arbitration, although the arbitrator may award the prevailing party his/its
        reasonable attorneys’ fees and costs of arbitration except that such fees and
        costs may not be recovered by Align that result from Align’s defense against any
        claim by Bullington challenging the waiver, release and discharge of rights
        under the Age Discrimination in Employment Act.

      
        

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                      Exhibit
                        10.1

                    	
                      EXECUTION
                        COPY

                    

            

             

          

        

      

      6.  Counterpart
        Signatures.
        Bullington and Align hereby acknowledge that this Agreement may be executed
        in
        counterpart originals with like effect as if executed in a single original
        document.

       

      7.  Time
        to Consider; Revocation Period; Effective Date.
        Bullington understands and agrees that he may have up to a full twenty-one
        (21)
        days after receipt of this Agreement within which he may review, consider,
        and
        decide whether or not to sign this Agreement, and, if Bullington has not
        taken
        that full time period, that he expressly waives the remaining time period
        and
        will not assert the invalidity of this Agreement or any portion thereof on
        this
        basis. Bullington further acknowledges and is hereby advised that he should
        discuss the terms of this Agreement with an attorney of his choosing at his
        sole
        expense. Bullington also understands that, for the period of seven (7) days
        after the date he signs this Agreement, he may revoke the release of his
        claims
        under the Age Discrimination in Employment Act (“ADEA”),. Bullington understands
        that if he wishes to revoke his release of claims under the ADEA, he must
        deliver written notice of revocation, no later than the seventh day after
        he
        signs this Agreement, to:

       

      Align
        Technology, Inc.

      Attn.:
        Human Resources

      881
        Martin Ave. 

      Santa
        Clara, CA 95050

      Facsimile:
        (408) 470-1024

       

      Bullington
        further understands that the Effective Date of this General Release will
        be the
        eighth day after both of the Parties have signed it and it has been delivered
        to
        Align. 

       

      8.
        Results
        of Negotiation; Knowing and Voluntary Execution.
        The
        Parties hereby acknowledge that this Agreement is the result of negotiation
        between them, that each were represented by an attorney of their own choosing
        in
        deciding whether or not to sign this Agreement and that each has read and
        understands the foregoing Agreement and that each affixes their respective
        signature to this Agreement knowingly, voluntarily and without
        coercion.

       

      9.
        Entire
        Agreement; Modification.
        The
        Parties hereby acknowledge and agree that except for any pre-existing stock,
        stock option and/or purchase agreement(s) between Bullington and Align, and
        any
        amendments and waivers thereto, no promises or representations were or are
        made
        which do not appear written in this Agreement. The Parties agree that this
        Agreement contains the entire agreement by Bullington and Align, and that
        neither is relying on any representation or promise that does not appear
        in this
        Agreement. The Parties further agree that the benefits provided in this
        Agreement fully satisfy any obligations Align may have to provide any severance
        or other benefits to Bullington under that certain Employment Agreement by
        and
        between Bullington and Align dated October 1, 2002, including, but not limited
        to, the terms of the Amended and Restated Employment Agreement dated April
        5,
        2007. This Agreement may be changed only by another written agreement signed
        by
        Bullington and the Chief Executive Officer of Align. 

       

      10.
        Enforcement
        Costs.
        If an
        action is brought by either party for breach of any provision of this Agreement,
        the non-breaching party shall be entitled to recover all reasonable attorneys’
fees and costs in defending or bringing such an action.

      
        

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                      Exhibit
                        10.1

                    	
                      EXECUTION
                        COPY

                    

            

             

            
              	 	 	 
	 	
                      ELDON
                        M.
                        BULLINGTON

                    
	 
 	 
 	 
 
	Date: December
                      14, 2007	 	/s/ Eldon
                      M.
                      Bullington
	 	
                    

            

          

        

      

      
         

        
          	 	 	 
	 	
                  ALIGN
                    TECHNOLOGY,
                    INC.

                
	 
 	 
 	 
 
	Date: December
                  14, 2007	 	/s/ Thomas
                  M.
                  Prescott
	 	
                   

                   

                  
                    By:
                      Thomas M. Prescott

                    Title:
                      President and CEO

                  

                

           

          Page 5
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            5Unassociated Document

    
       

      EMPLOYMENT
        AGREEMENT

      

      

      This
        EMPLOYMENT AGREEMENT is entered into on December 14, 2007 by and between
        KENNETH
        B. AROLA (the “Executive”)
        and
        Align Technology, Inc., a Delaware corporation (the “Company”).
        

       

      1.  Duties
        and Scope of Employment.

       

      (a)  Position.
        For the
        term of the Executive’s employment under this Agreement (“Employment”),
        the
        Company agrees to employ the Executive in the position of Vice President,
        Finance and Chief Financial Officer.
        The
        Executive shall report to the Chief Executive Officer (the “CEO”).
        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
        Executive’s abilities perform such other services consistent with Executive’s
        position as Vice President, Finance and Chief Financial Officer as may from
        time
        to time be assigned to Executive by the CEO.

       

      (b)  Obligations
        to the Company.
        During
        the term of the Executive’s Employment, the Executive shall devote Executive’s
        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 Executive is under
        no
        obligations or commitments, whether contractual or otherwise, that are
        inconsistent with Executive’s obligations under this Agreement. The Executive
        represents and warrants that the Executive will not use or disclose, in
        connection with the Executive’s 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 the Executive’s
        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 Company that the Executive has returned all property and
        confidential information belonging to any prior employers. 

       

      (d)  Commencement
        Date.
        The
        Executive commenced full-time employment in the position set forth in Section
        1
        (a) above, effective December 14, 2007.

       

      2.  Cash
        and Incentive Compensation.

       

      (a)  Salary.
        The
        Company shall pay the Executive as compensation for the Executive’s services a
        base salary at a gross annual rate of $275,000 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 the Executive with an opportunity to earn a potential annual bonus
        equal
        to 60% 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. Any bonus awarded or paid to the Executive will
        be
        subject to the discretion of the Board.

       

      (c)  Incentive
        Awards.
        The
        Executive shall be eligible for an annual incentive stock option grant and/or
        restricted stock unit award subject to the approval of the Board
        in all
        respects, including the terms described herein.
        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 accordance with the vesting provisions approved by
        the
        Compensation Committee of the Board of Directors, which vesting is currently
        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. Each restricted stock unit
        award
        currently vests 25% on the one year anniversary of the date of grant with
        25%
        vesting yearly thereafter.
        The
        grant of each such option and/or restricted stock unit 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 and restricted stock unit
        agreement, as applicable. 

       

      3.  Vacation
        and Executive Benefits.
        During
        the term of the Executive’s Employment, the Executive shall be eligible
to
        accrue
        17 days
        vacation per year
        on a
        pro-rata basis throughout the year,
        in
        accordance with the Company’s standard policy for senior management,
including
        provisions with respect to maximum accrual, as
        it may
        be amended from time to time. During the term of the Executive’s 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,
        and to
        the right of the Company to make changes in such plans from time to
        time.

       

      4.  Business
        Expenses.
        During
        the term of the Executive’s Employment, the Executive shall be authorized to
        incur necessary and reasonable travel, entertainment and other business expenses
        in connection with her 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.

       

      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 the Executive’s Employment by giving the
        Company fourteen (14) days advance notice in writing. The Executive’s Employment
        shall terminate automatically in the event of Executive’s 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 essential
        functions of Executive’s position and 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
        Agreement.
        Any
        other provision of this Agreement notwithstanding, Subsections (b), (c) or
        (d)
below
        shall not apply unless the Executive (i) has,
        within
        the time prescribed by the Company,
        executed
        a General
        Release Agreement
        in a
        form prescribed by the Company by
        which
        the Executive waives and releases with irrevocable effect
        all
        known and unknown claims that the Executive may then have against the Company
        or
        persons affiliated with the Company
        which
        are waivable under applicable law,
        and
        (ii) pursuant
        to such General Release Agreement has
        agreed not to prosecute any legal action or other proceeding based upon any
        of
        such claims.
        to the
        full extent permissible under applicable law, and (iii) pursuant to such
        General
        Release Agreement has acknowledged Executive’s continuing obligations under this
        Agreement and the Proprietary Information and Inventions Agreement referenced
        below.

       

      (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 the Executive resigns for Good Reason, then:

       

      (i)  as
        of the
        date of termination of Employment,
        Executive shall immediately conditionally
        vest
        in
        an additional number of shares under all outstanding options and restricted
        stock units as if the Executive had performed twelve (12) additional months
        of
        service,
        subject
        to Executive’s execution of the General Release Agreement described above with
        irrevocable effect and suspension of exercise rights with respect to such
        conditionally vested shares until such execution;
        

       

      (ii)  the
        Company shall pay the Executive, in a lump sum upon the effectiveness of
        the
        General Release to be executed by Executive in accordance with Section 6(a)
        above, 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; (y) one year’s Base
        Salary; and (z) 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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (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 and restricted stock units as if the Executive 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
        conditionally
        vest
        as
        to all shares under all outstanding options and restricted stock
        units,
        subject
        to Executive’s execution of the General Release Agreement described above with
        irrevocable effect and suspension of exercise rights with respect to such
        conditionally vested shares until such execution,
        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
        the
        Executive’s health insurance coverage under the Consolidated Omnibus Budget
        Reconciliation Act of 1985, as amended (“COBRA”) following the termination of
        Employment, then the Company shall pay the Executive’s monthly premium under
COBRA
        for
        COBRA
        coverage for the Executive 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 her
        duties for the Company that adversely affects the business or affairs of
        the
        Company; 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (v)  Intentional
        misconduct; or

       

      (vi)  the
        Executive’s failure to satisfactorily perform the Executive’s 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, subject to the notice and cure period described
        below, the Executive’s resignation for “Good Reason” shall mean the Executive’s
        resignation upon written notice to the Company delivered within ninety (90)
        days
        after the occurrence of any one or more of the following events and with
        an
        effective date within such ninety- (90-) day period:

       

      (i)  The
        Executive’s position, authority or responsibilities being
        significantly
        reduced;

       

      (ii)  The
        Executive being asked to relocate the Executive’s principal place of employment
        such that the Executive’s commuting distance from the Executive’s residence
        prior to such relocation is increased by over thirty-five (35)
        miles;

       

      (iii)  The
        Executive’s annual Base Salary or bonus being materially reduced; or

       

      (iv)  The
        Executive’s benefits being materially reduced. 

       

      The
        Executive shall provide written notice to the Company at least thirty (30)
        days
        prior to the effective date of Executive’s resignation, identifying the event or
        events Executive claims constitute Good Reason and describing in reasonable
        detail the fact supporting the claim. The Company shall have at least thirty
        (30) days to take action to remedy the condition claimed by the Executive
        as
        Good Reason, but shall have no obligation to take such action. In the event
        the
        Company remedies the condition then Good Reason shall be deemed not to exist.
        At
        the expiration of the remedial period and prior to the effective date of
        Executive’s resignation, Executive shall provide written notice to the Company,
        stating whether Executive (A) withdraws Executive’s resignation based on the
        Company’s remedy of the condition, (B) chooses to resign anyway notwithstanding
        such remedy, or (C) claims the condition has not been remedied and chooses
        to
        resign based on a claim of Good Reason. In the absence of such notice,
        Executives resignation shall become effective and Executive shall be deemed
        to
        have resigned without Good Reason. 

       

      (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.

       

      (h)  Section
        409A.
        Notwithstanding anything to the contrary in this Agreement, any cash severance
        payments otherwise due to Executive pursuant to this Section 6 or otherwise
        on
        or within the six-month period following Executive’s termination will accrue
        during such six-month period and will become payable in a lump sum payment
        on
        the date six (6) months and one (1) day following the date of Executive’s
        termination, provided, that such cash severance payments will be paid earlier,
        at the times and on the terms set forth in the applicable provisions of this
        Section 6, if the Company reasonably determines that the imposition of
        additional tax under Section 409A of the Internal Revenue Code of 1986, as
        amended (“Code
        Section 409A”),
        will
        not apply to an earlier payment of such cash severance payments. In addition,
        this Agreement will be deemed amended to the extent necessary to avoid
        imposition of any additional tax or income recognition prior to actual payment
        to Executive under Code Section 409A and any temporary, proposed or final
        Treasury Regulations and guidance promulgated thereunder and the parties
        agree
        to cooperate with each other and to take reasonably necessary steps in this
        regard.

       

      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 previoulsy entered into a Proprietary
        Information and Inventions Agreement with the Company, 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 the Executive at the home address which the Executive
        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.

       

      (e)  Choice
        of Law.
        The
        validity, interpretation, construction and performance of this Agreement
        shall
        be governed by the laws of the State of California without applications of
        its
        provisions with respect to
        choice
        of law,
        except
        for the Arbitration provision in paragraph 11, below, which is governed by
        the
        Federal Arbitration Act, 9 U.S.C. § 1 et
        seq. 

       

      (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. Nothing
        in this Agreement shall prohibit any party from seeking provisional remedies
        in
        court in aid of arbitration including temporary restraining orders, preliminary
        injunctions and other provisional remedies pursuant to California Code of
        Civil
        Procedure section 1281.8 (or any successor statutes) and/or applicable federal
        law. Likewise, nothing in this Agreement shall should be interpreted as
        restricting or prohibiting Employee from filing a charge or complaint with
        a
        federal, state, or local governmental or administrative agency charged with
        investigating and/or prosecuting charges or complaints under any applicable
        federal, state or municipal law or regulation. Claims or disputes arising
        under
        any law that permits resort to an administrative or governmental agency
        notwithstanding an agreement to arbitrate those claims may be brought before
        that agency as permitted by applicable law, including, without limitation,
        claims or charges brought before the National Labor Relations Board, the
        U.S.
        Equal Employment Opportunity Commission, the United States Department of
        Labor,
        the California Workers' Compensation Appeals Board, and the California
        Employment Development Department. Nothing in this Agreement shall be deemed
        to
        preclude a party from bringing an administrative claim before any agency
        in
        order to fulfill the party's obligation to exhaust administrative remedies
        before making a claim in arbitration

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      This
        arbitration section of the Agreement shall be exclusively governed by and
        construed and enforced pursuant to the substantive and procedural provisions
        of
        the Federal Arbitration Act, 9 U.S.C. § 1 (“FAA”), and not individual state
        substantive and procedural laws regarding enforcement of arbitration agreements.
        A neutral arbitrator shall be selected by mutual agreement of the parties
        from
        the then-available arbitrators associated with ADR Services, Judicate West,
        ARC
        or such other arbitration service that the parties may mutually agree upon.
        If,
        for any reason, the parties are unable to mutually agree upon the selection
        of
        an arbitrator, either party may apply to a court of competent jurisdiction
        for
        appointment of a neutral arbitrator. The court shall then appoint a retired
        judge to serve as the arbitrator, who shall act under this Policy with the
        same
        force and effect as if the parties had selected the arbitrator by mutual
        agreement.The
        arbitrator shall allow the parties to take discovery and bring motions as
        authorized by the
        forum
        state's procedural rules,
        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 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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      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.

       

       

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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.

       

      

      /s/
        Kenneth B. Arola      

       

      KENNETH
        B. AROLA

      

      ALIGN
        TECHNOLOGY, INC.

      

      

      /s/
        Thomas M. Prescott

      By:
        Thomas M. Prescott

      Title:
        President and CEO

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