EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
This AGREEMENT is entered into as of
September 12, 2005, by and between Gil Laks (the “
Executive ”) and Align Technology, Inc., a
Delaware corporation (the “ Company
”).
WHEREAS, the Executive is currently
employed by the Company as Vice President,
International;
WHEREAS, the Company desires to
increase the duties and responsibilities of the Executive and
appoint the Executive as an executive officer of the Company to
serve at the discretion of the Board of Directors;
WHEREAS, the Executive desires to
accept such appointment on the terms and conditions set forth
herein;
NOW THEREFORE, in consideration of
the premises and the mutual covenants set forth below, the parties
hereby agree as follows:
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,
International. The Executive shall report to the Chief
Executive Officer. 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, International as may from time to time be assigned to
him by the Chief Executive Officer (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
1
Company that he has returned
all property and confidential information belonging to any prior
employers.
(d)
Commencement
Date . The Executive
commenced full-time Employment on September 12,
2005.
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 $215,000, 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 him with an opportunity to earn a potential annual bonus
equal to 60.0% 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. For calendar year
2005, the Executive’s bonus shall be prorated based on the
number of days of such year that the Executive was employed by the
Company. Any bonus awarded or paid to the Executive will be
subject to the discretion of the Board.
(c)
Stock
Options . The Executive shall
be eligible for an annual incentive stock option grant 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 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.
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
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 due to
Permanent Disability or Executive resigns for Good Reason,
then:
(i)
the Executive shall immediately
vest in an additional number of shares under all outstanding
options as if he had performed twelve (12) additional months of
service; and
(ii)
the Company shall pay the
Executive, 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, payable in a lump sum within 30
days of the date of termination of Employment; (y) one year’s
Base Salary, payable in equal installments in accordance with the
Company’s
standard payroll schedule; and (z)
the greater of the then current year’s Target Bonus or the
actual prior year’s bonus, payable in a lump sum on the one
year anniversary of termination of Employment. 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 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) 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
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 his 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 his 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:
(i)
The Executive’s position,
authority or responsibilities being significantly
reduced;
(ii)
The Executive being asked to
relocate his principal place of employment such that his commuting
distance from his 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 anot
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