Exhibit 10.1
EMPLOYMENT AGREEMENT
This AGREEMENT is entered into on September 25, 2006 by and
between Sonia Clark (the "Executive") and Align Technology, Inc., a
Delaware
corporation (the "Company").
1.
Duties and Scope of Employment.
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(a) Position.
For the term of her
employment
under this
Agreement ("Employment"), the Company agrees to employ the
Executive
in the position of Vice President, Human Resources. 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 her
abilities
perform such other services consistent with her position as
Vice
President,
Human Resources as may from time to time be assigned to him by
the
CEO.
(b) Obligations
to the Company.
During the term
of her
Employment, the Executive shall devote her 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 she is under no obligations or
commitments, whether contractual or otherwise, that are
inconsistent with
her
obligations under this Agreement. The Executive represents and
warrants
that she
will not use or disclose, in connection with her 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 her 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 she
has
returned
all property and confidential information belonging to any
prior
employers.
(d) Commencement
Date. The Executive
commenced
full-time
Employment on September 25, 2006.
2. Cash
and Incentive Compensation.
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(a) Salary.
The Company shall pay
the Executive
as
compensation for her services a base salary at a gross annual rate
of
$250,000,
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."
1.
<PAGE>
(b) Target
Bonus. The Executive shall be
eligible
to participate in an annual bonus program that will provide her
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;
provided,
however,
that for calendar year 2006, the Company guarantees that
Executive
will be
paid a prorated bonus based on the number of days of such year
that
the
Executive was employed by the Company equal to $37,500.
(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. Each restricted stock unit award vests 25% on the one
year anniversary of the date
of grant with 6.25% vesting quarterly
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
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her 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 her
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 her 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.
2.
<PAGE>
(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 her Employment by giving the Company fourteen
(14)
days
advance notice in writing. The Executive's Employment shall
terminate
automatically in the event of her 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 she 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 she had performed twelve (12)
additional months of service; and
3.
<PAGE>
(ii) if
within twelve (12)
months
following the occurrence of the Change of Control, one of the
following
events occurs:
(A) the Executive's
employment is
terminated by the Company without
Cause; or
(B) the Executive resigns for Good
Reason
then the Executive shall immediately
vest as to all shares under all outstanding options and
restricted
stock units 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 her health
insurance
coverage
under the Consolidated Omnibus Budget Reconciliation Act of
1985,
as amended
("COBRA") following the termination of his Employment, then the
Company
shall pay the Executive's monthly premium under COBRA until the
earliest
of (i) 12 months following the termination of the Executive's
Employment, or (ii) the date upon which the Executive commences
employment
with an
entity other than the Company.
(e) Definition of
"Cause." For all purposes
under this
Agreement, "Cause" shall mean any of the following:
(i)
Unauthorized use or
disclosure
of
the confidential information or trade secrets of the Company;
(ii) Any
breach of this
Agreement or the
Employee Proprietary Information and Inventions Agreement between
the
Executive and the Company;
(iii) Conviction
of, or a plea of
"guilty" or "no contest" to, a felony under the laws of the
United
States or any state thereof;
(iv)
Misappropriation of
the assets of
the Company or any act of fraud or embezzlement by Executive, or
any
act of dishonesty by Executive in connection with the performance
of
her duties for the Company that adversely affects the business
or
affairs of the Company; or
(v)
Intentional misconduct
or the
Executive's failure to satisfactorily perform his/her duties
after
having received written notice of such failure and at least thirty
(30)
days to cure such failure.
The foregoing shall not be deemed an exclusive list of all
acts or omissions that the Company may consider as grounds for the
termination
of the Executive's Employment.
(f) Definition
of "Good Reason." For all
purposes
under this Agreement, the Executive's resignation for "Good
Reason"
shall mean
the Executive's resignation within ninety (90) days the
occurrence
of any one or more of the following events:
4.
<PAGE>
(i)
The Executive's
position,
authority or
responsibilities
being
significantly reduced;
(ii) The
Executive being asked to
relocate her principal place of employment such that her
commuting
distance from her residence prior to the Change of Control is
increased
by over thirty-five (35) miles;
(iii) The
Executive's annual Base Salary
or bonus being reduced; or
(iv) The
Executive's benefits being
materially reduced.
(g) Definition
of "Change of
Control." For
all
purposes under this Agreement, "Change of Control" shall mean any
of the
following:
(i)
a sale of all or substantially all
of the assets of the Company;
(ii) the
acquisition
of more than fifty
percent (50%) of the common stock of the Company (with all classes
or
series thereof treated as a single class) by any person or group
of
persons;
(iii) a
reorganization
of the Company
wherein the holders of common stock of the Company receive stock
in
another company (other than a subsidiary of the Company), a merger
of
the Company with another company wherein there is a fifty percent
(50%)
or greater change in the ownership of the common stock of the
Company
as a result of such merger, or any other transaction in which
the
Company (other than as the parent corporation) is consolidated
for
federal income tax purposes or is eligible to be consolidated
for
federal income tax purposes with another corporation; or
(iv) in
the event that the common
stock is traded on an established securities market, a public
announcement that any person has acquired or has the right to
acquire
beneficial ownership of more than fifty percent (50%) of the
then-outstanding common stock and for this purpose the terms
"person"
and "beneficial ownership" shall have the meanings provided in
Section
13(d) of the Securities and Exchange Act of 1934 or related
rules
promulgated by the Securities and Exchange Commission, or the
commencement of or public announcement of an intention to make a
tender
offer or exchange offer for more than fif
