Exhibit 10.5
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT is
executed as of June 16, 2008 entered into effective as of
June 16, 2008 by and between DANA CAMBRA (the “
Executive ”) and Align Technology, Inc., a
Delaware corporation (the “ Company ”), with
effect as of Executive’s first day of employment with 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, Research & Development. 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, Research & Development 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 . It is expected that
Executive will commence full-time Employment on or before
June 16, 2008.
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
$279,000, 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.
(d)
One Time
Bonus and Relocation Assistance. The Company agrees to
provide Executive with a furnished two bedroom apartment in
California for up to six (6) months, which may be extended
upon the CEO’s approval. Executive will also be granted a
sign on bonus of $100,000. This bonus payment will be added
to and included in Executive’s first regularly scheduled
paycheck, and is subject to all normal and appropriate payroll
withholdings. In the event Executive voluntarily leaves the Company
within the first twelve months of his employment, Executive
will be responsible for returning 100% of the sign on
bonus. In the event Executive voluntarily leaves the
Company after twelve months but prior to twenty four months of his
employment, Executive will be responsible for returning a portion
of the sign on bonus as follows: For each full month of
full-time employment, the Company will forgive 1/24 of the sign on
bonus and the remaining unforgiven portion will be due and payable
to the Company on demand.
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
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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
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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
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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
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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
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