Document:

Exhibit 10.3

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into effective as of May 5,
2008 by and between [EXECUTIVE] (the “Executive”)
and Align Technology, Inc., a Delaware corporation (the “Company”). This Agreement supersedes and
replaces in its entirety that certain Employment Agreement dated [INSERT DATE]
between the Executive and the Company.

 

WHEREAS, the Company and Executive (the “Parties”)
have previously entered into an Employment Agreement dated as of [INSERT
DATE]  (the “Prior Employment Agreement”) pursuant to which the Parties
agreed to certain terms and conditions related to Executive’s employment with
the Company and certain other related matters.

 

WHEREAS, in connection with the adoption of Rule 409A of the Internal
Revenue Code of 1986, as amended (“Code Section 409A”),
the Parties which to amend the Prior Employment Agreement to, among other
things, comply with Code Section 409A.

 

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,
[INSERT TITLE].  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, [INSERT TITLE]
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.

 

 

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 [SALARY] 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 entered into a Proprietary Information and Inventions Agreement with the
Company December 30,2005, 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.

 

[The remainder of this page intentionally left
blank.]

 

 

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.

 

 

	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALIGN TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Thomas M. Prescott

  
	
   

  	
  Title: President and CEOExhibit 10.4

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED
AND RESTATED EMPLOYMENT AGREEMENT is entered into effective as of May 5,
2008 by and between THOMAS M. PRESCOTT (the “Executive”)
and Align Technology, Inc., a Delaware corporation (the “Company”). This Agreement supersedes and replaces in its
entirety that certain Amended and Restated Employment Agreement dated April 5,
2007 between the Executive and the Company.

 

WHEREAS,
the Company and Executive (the “Parties”) have
previously entered into an Amended and Restated Employment Agreement dated as
of April 5, 2007 (the “Prior Employment
Agreement”) pursuant to which the Parties agreed to certain terms
and conditions related to Executive’s employment with the Company and certain
other related matters.

 

WHEREAS,
in connection with the adoption of Rule 409A of the Internal Revenue Code
of 1986, as amended (“Code Section 409A”),
the Parties wish to amend the Prior Employment Agreement to, among other
things, comply with Code Section 409A.

 

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 President and
Chief Executive Officer.    Executive
shall diligently, in good faith and to the best of his abilities perform all
duties indident to this position and as are determined and assigned to him from
time to time by the Board of Directors of the Company (the “Board”).

 

(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 Board, provided, however, that the Executive may, without the
approval of the Board, 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.

 

 

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 $518,400, 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 100% 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 vesting
commencement date 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 Executive’s Employment is terminated for any
reason other than Cause, then 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:  (i) the then current year’s Target Bonus
prorated for the number of days of Executive is employed in said year; (ii) twenty-four
(24) months’ Base Salary; and (iii) the greater of one hundred fifty
percent (150%) 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 as to all shares under all outstanding options
and restricted stock units; 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, subject to Executive’s
execution of the General Release Agreement described above with irrevocable
effect, 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) twenty-four (24) months’ Base Salary; and (iii) the
greater of one hundred fifty percent (150%) 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) eighteen (18) 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 entered into a Proprietary Information and
Inventions Agreement with the Company, dated March 27, 2002, 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.

 

[The remainder of this page intentionally
left blank.]

 

 

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/ Thomas M. Prescott

  
	
   

  	
   

  
	
   

  	
  THOMAS M. PRESCOTT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALIGN TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Roger E. George

  
	
   

  	
  By: Roger E. George

  
	
   

  	
  Title:

  	
  Vice President, Legal and Corporate Affairs,

  
	
   

  	
   

  	
  General
  Counsel and Corporate Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]