EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”) is entered into as of April
5, 2007, by and between Len M. Hedge (the “Executive”)
and Align Technology, Inc., a Delaware corporation (the
“Company”). This Agreement supersedes and replaces in
its entirety that certain Employment Agreement dated March 1, 2003
between the Executive and the Company.
1.
Duties and Scope of Employment .
(a)
Position . For the term of his employment under this
Agreement (“Employment”), the Company agrees to employ
the Executive in the position of Vice President, Operations,
General Counsel and Corporate Secretary. 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 his abilities perform such other
services consistent with his position as Vice President,
Operations, as may from time to time be assigned to him by the
CEO.
(b)
Obligations to the Company . During the term of his
Employment, the Executive shall devote his full business efforts
and time to the Company. The Executive agrees not to actively
engage in any other employment, occupation or consulting activity
for any direct or indirect remuneration without the prior approval
of the CEO, provided, however, that the Executive may, without the
approval of the CEO, serve in any capacity with any civic,
educational or charitable organization. The Executive may
own, as a passive investor, no more than one percent (1%) of any
class of the outstanding securities of any publicly traded
corporation.
(c)
No Conflicting Obligations . The Executive
represents and warrants to the Company that he is under no
obligations or commitments, whether contractual or otherwise, that
are inconsistent with his obligations under this Agreement.
The Executive represents and warrants that he will not use or
disclose, in connection with his employment by the Company, any
trade secrets or other proprietary information or intellectual
property in which the Executive or any other person has any right,
title or interest and that his employment by the Company as
contemplated by this Agreement will not infringe or violate the
rights of any other person or entity. The Executive
represents and warrants to the Company that he 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 his services a base salary at a gross annual rate
of $281,925, payable in accordance with the Company’s
standard payroll schedule. The compensation specified in this
Subsection (a), together with any adjustments by the Company from
time to time, is referred to in this Agreement as “Base
Salary.”
(b)
Target Bonus . The Executive shall be eligible to
participate in an annual bonus program that will provide him with
an opportunity to earn a potential annual bonus equal to 60% 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. The per share
exercise price of the option will be equal to the per share fair
market value of the common stock on the date of grant, as
determined by the Board of Directors. The term of such option
shall be ten (10) years, subject to earlier expiration in the event
of the termination of the Executive’s Employment. The
Executive shall vest in 25% of the option shares after the first
twelve (12) months of continuous service and shall vest in the
remaining option shares in equal monthly installments over the next
three (3) years of continuous service. The grant of each such
option 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
his Employment, the Executive shall be eligible for 17 days
vacation per year, in accordance with the Company’s standard
policy for senior management, as it may be amended from time to
time. During the term of his Employment, the Executive shall
be eligible to participate in any employee benefit plans maintained
by the Company for senior management, subject in each case to the
generally applicable terms and conditions of the plan in question
and to the determinations of any person or committee administering
such plan.
4.
Business Expenses . During the term of his Employment,
the Executive shall be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection
with his duties hereunder. The Company shall reimburse the
Executive for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance
with the Company’s generally applicable policies.
5.
Term of Employment .
(a)
Basic Rule . The Company agrees to continue the
Executive’s Employment, and the Executive agrees to remain in
Employment with the Company, from the commencement date set forth
in Section 1(d) until the date when the Executive’s
Employment terminates pursuant to Subsection (b) below. The
Executive’s Employment with the Company shall be “at
will,” and either the Executive or the Company may terminate
the Executive’s Employment at any time, for any reason, with
or without Cause. Any contrary representations, which may
have been made to the Executive shall be superseded by this
Agreement. This Agreement shall constitute the full and
complete agreement between the Executive and the Company on the
“at will” nature of the Executive’s Employment,
which may only be changed in an express written agreement signed by
the Executive and a duly authorized officer of the
Company.
(b)
Termination . The Company may terminate the
Executive’s Employment at any time and for any reason (or no
reason), and with or without Cause, by giving the Executive notice
in writing. The Executive may terminate his Employment by
giving the Company fourteen (14) days
2
advance notice in
writing. The Executive’s Employment shall terminate
automatically in the event of his death or Permanent
Disability. For purposes of this Agreement, “Permanent
Disability” shall mean that the Executive has become so
physically or mentally disabled as to be incapable of
satisfactorily performing the duties under this Agreement for a
period of one hundred eighty (180) consecutive calendar
days.
(c)
Rights Upon Termination . Except as expressly provided
in Section 6, upon the termination of the Executive’s
Employment pursuant to this Section 5, the Executive shall only be
entitled to the compensation, benefits and reimbursements described
in Sections 2, 3 and 4 for the period preceding the effective date
of the termination. The payments under this Agreement shall
fully discharge all responsibilities of the Company to the
Executive.
(d)
Termination of Agreement . The termination of this
Agreement shall not limit or otherwise affect any of the
Executive’s obligations under Section 7.
6.
Termination Benefits .
(a)
General Release . Any other provision of this
Agreement notwithstanding, Subsections (b), (c) or (d) below shall
not apply unless the Executive (i) has executed a general release
in a form prescribed by the Company of all known and unknown claims
that he may then have against the Company or persons affiliated
with the Company, and (ii) has agreed not to prosecute any legal
action or other proceeding based upon any of such
claims.
(b)
Termination without Cause . If, during the term of
this Agreement, and not in connection with a Change of Control as
addressed in Subsection (c) below, the Company terminates
Executive’s employment without Cause or Executive resigns for
Good Reason, then:
(i)
the Executive shall immediately vest in an additional number of
shares under all outstanding options and restricted stock units as
if he had performed twelve (12) additional months of service;
and.
(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 he had performed twelve (12) additional months of service;
and
(ii)
if within twelve (12) months following the occurrence of the Change
of Control, one of the following events occurs:
(A)&nbs
|
