Consulting Agreement - Align Technology Inc. and Peter Riepenhausen
[LOGO] ALIGN [LOGO] Illegible (R)
June 17, 2002
Peter Riepenhausen
Chairman, Europe
Dear Peter:
I am very pleased that you have agreed to assume the new assignment for Align
Technology that we recently discussed. This letter is to outline the key
responsibilities and duties of your new role as an Advisor to the Company and
confirm the terms and conditions of our agreement with respect to this role.
As an Advisor to the Company, you will assist us in European market strategy
development and cultivating and retaining key customers in Europe. Your role as
an Advisor will commence on September 1, 2002. In the interim, you will continue
in your role as Chairman, Europe.
In the coming weeks, I will rely upon you to develop and implement strategies
for keeping Country Managers and other key personnel fully engaged and focused
on mission critical activities and business objectives and assure the complete
transfer of all banking accounts, country entity board responsibilities, and
business and personnel files to the appropriate individuals in Santa Clara or
Europe.
As an Advisor to the Company, you will be subject to the Company's standard
consulting agreement. The consulting agreement is attached.
In your advisory role, you will be required to be available, upon reasonable
notice, both via telephone and in person, one to three days per month for a
period of one year, commencing on September 1, 2002 and ending August 31, 2003.
Your remuneration will be US$5,000.00 per month. In the event we engage your
services after August 31, 2003, you will be remunerated on a per diem basis, at
a mutually agreed rate.
As long as you remain an employee or consultant of the Company, we will allow
your May 2000, September 2000, November 2000, and September 2001 option grants
to continue vesting until May 2003, September 2003, November 2003, and September
2004, respectively, at which times they will become fully vested. Your September
2001 option grant will become a Non-Qualified Option (NSO) when your employment
status changes.
In addition, subject to the approval of the Board of Directors at the June 27,
2002 Board Meeting, Align Technology will grant you a stock issuance of 50,000
shares of Align
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Technology common stock which shall be subject to the right of repurchase by the
Company until vested. The stock shall vest as to 50% (25,000) of the shares
after one year and 12.5% (6,250) of the shares at the end of each quarter
thereafter, for full vesting after two years. The purchase price of the stock
will be determined when the stock issuance is approved by the Board of
Directors.
The above commitments are contingent upon the execution of the Consulting
Agreement and your agreement to certain conditions and the release of specific
claims or causes of action against the Company. A Release of Claims agreement is
also attached for your review.
Align has been well served by your vision, strategic insights and contributions
to global growth. I know the Company will continue to benefit from your input
and advice while you serve as an advisor and I appreciate your willingness to
assume this assignment.
Sincerely,
Thomas M. Prescott
President and Chief Executive Officer
Attachments: Consulting Agreement
Release of Claims Agreement
2
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Attachment A
CONSULTANT PROPRIETARY INFORMATION
NONDISCLOSURE AGREEMENT
June 17, 2002
Align Technology, Inc.
881 Martin Avenue
Santa Clara, CA 95050
Ladies and Gentlemen:
The following contains all of the terms of my Consulting Agreement (the
"Agreement") with Align Technology, Inc., a Delaware corporation (the "Company,"
which term includes the Company's subsidiaries), and supersedes all other
understandings, oral or written, between us:
1. The amount of time I will spend as a consultant to the Company, the
nature of the services provided (the "Services") and my compensation are set
forth on Exhibit A hereto.
2. I recognize that it is the express intention of the parties to this
Agreement that I work as an independent contractor, and not an employee, agent,
joint venturer, or partner of the Company. Nothing in this Agreement shall be
interpreted or construed as creating or establishing an employment relationship
between the Company and myself.
3. I recognize that I will have no authority to act on or enter into any
contract or understanding, incur any liability or make any representation on
behalf of the Company without first obtaining specific written instructions from
an authorized officer of the Company.
4. I recognize that I am solely responsible for all taxes, withholdings,
and other similar statutory obligations, including, but not limited to, workers'
compensation insurance. I agree to defend, indemnify and hold the Company
harmless from any and all claims made by an entity on account of an alleged
failure by me to satisfy any such tax or withholding obligation.
5. I will supply any tools and equipment necessary to perform the Services.
6. Should I, in my sole discretion, deem it necessary to employ assistants
to aid me in the performance of the Services, I agree that the Company will not
direct, supervise, or control in any way such assistants in their performance of
Services. I further agree that such assistants are employed solely by me, and
that I alone am responsible for providing workers' compensation insurance for my
employees, for paying the salaries and wages of my employees, and for ensuring
that all required tax withholdings are made. I further represent and warrant
that I maintain workers' compensation insurance coverage for my employees and
acknowledge that I alone have responsibility for such coverage.
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7. I recognize that the Company is engaged in a continuous program of
research, development and production respecting its business. The Company
possesses or has rights to information that has been created, discovered,
developed or otherwise become known to the Company (including information
developed by, discovered by or created by me which arises out of my consulting
relationship with the Company) which has commercial value in its business
("Proprietary Information"). For example, Proprietary Information includes, but
is not limited to, software programs, other computer programs and copyrightable
material, technical drawings, product ideas, trade secrets, concepts for
resolving software development issues, data and know- how, inventions (whether
patentable or not), improvements, marketing plans and customer lists.
8. I understand that my consulting relationship creates a relationship of
confidence and trust between me and the Company with respect to any (i)
Proprietary Information or (ii) confidential information applicable to the
business of any customer of the Company or other entity with which the Company
does business and which I learn in connection with my consulting relationship.
At all times, both during my consulting relationship with the Company and after
its termination, I will keep in confidence and trust all such information, and I
will not use or disclose any such information without the written consent of the
Company, except as may be necessary in the ordinary course of performing my
duties to the Company. This obligation shall end whenever such information
enters the public domain and is no longer confidential or proprietary through no
improper action or inaction by me.
9. In addition, I hereby agree:
(a) All Proprietary Information shall be the sole property of the
Company and its assigns, and the Company and its assigns shall be the sole owner
of all patents, copyrights and other rights in connection therewith. I hereby
assign to the Company any rights I may have or acquire in such Proprietary
Information. At all times, both during my services as a consultant with the
Company and after its termination, I will keep in confidence and trust all
Proprietary Information, and I will not use or disclose any Proprietary
Information or anything relating to it without the written consent of the
Company, except as may be necessary in the ordinary course of performing my
duties to the Company.
(b) All documents or other media, records, apparatus, equipment and
other physical property whether or not pertaining to Proprietary Information,
furnished to me by the Company or produced by me or others in connection with my
consulting relationship shall be and remain the sole property of the Company. I
shall return and deliver all such property of the Company immediately as and
when requested by the Company. I shall return and deliver all such property
(including any copies thereof) upon request and, even without any request, upon
termination of my consulting.
(c) During my consulting relationship, I will not engage in any
business activity which creates a conflict of interest in relation to the
subject matter of my consulting for Align Technology.
(d) I will promptly disclose to the Company all improvements,
inventions, works of authorship, trade secrets, computer programs, designs,
formulas, mask works, ideas, processes, techniques, know-how and data, whether
or not patentable ("Inventions") which relate
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to the subject matter of my consulting and which are conceived, developed or
learned by me, either alone or jointly with others, during the term of my
consulting relationship.
(e) During the term of my consulting, I will not solicit any employee
of the Company to leave the Company for any reason or to devote less than all of
any such employee's efforts to the affairs of the Company.
(f) All Inventions which I conceive, develop or learn (in whole or in
part, either alone or jointly with others) in connection with performance of my
consulting for the Company or which use the Company's Proprietary Information
shall be the sole property of the Company and its assigns (and to the extent
permitted by law shall be works made for hire). The Company and its assigns
shall be the sole owner of all trade secret rights, patents, copyrights and
other rights anywhere in the world in connection therewith, and I hereby assign
to the Company any rights I may have or acquire in such Inventions.
(g) With regard to Inventions described in (f) above, I will assist
the Company or its assigns in every proper way (but at the Company's expense) to
obtain and from time to time enforce patents, copyrights or other rights on the
Inventions in any and all countries, and to that end I will execute all
appropriate documents. This obligation shall continue beyond the termination of
my consulting relationship, but the Company shall then compensate me at a
reasonable rate for time spent. If the Company is unable for any reason
whatsoever to secure my signature to any such document (including renewals,
extensions, continuations, divisions or continuations in part), I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents, as my agents and attorneys-in-fact to act for and in my behalf and
instead of me, but only for the purpose of executing and filing any such
documents and doing all other lawfully permitted acts to accomplish the
foregoing with the same legal force and effect as if done by me.
(h) For purposes of clarifying paragraphs 9 and 10(f) above, I agree
that I will not include or publish any findings, observations, opinions or other
information concerning the Company or any of its products, services or business
practices in any research report or any scientific, medical or other journal,
whether or not the Company is mentioned by name or such information places the
Company in a favorable light, and whether or not such information is made
available privately or commercially, in hard copy or electronic form, without
the express prior written consent of the Company's President or CEO.
(i) As a matter of record I attach hereto (as Exhibit B) a list of
existing inventions or improvements relevant to the subject matter of my
consulting relationship with the Company which have been made or conceived or
first reduced to practice by me alone, or jointly with others, prior to my
services as a consultant to the Company that I desire to remove from the
operation of this Agreement, and I covenant that such list is complete.
(j) I represent that execution of this Agreement, my consulting
relationship with the Company and my performance of my proposed duties to the
Company in the development of its business will not violate any obligations I
may have to any person or entity, including the obligation to keep confidential
any proprietary information of that person or entity. I have not entered into
any agreement in conflict with this one.
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10. This Agreement shall be effective as of the first day of my consulting
relationship with the Company and shall benefit the Company, its successors and
assigns.
11. This Agreement may be terminated by either the Company or myself at any
time by giving five (5) days' written notice of termination. Such notice may be
given at any time for any reason, with or without cause. Termination of this
Agreement will not affect the obligations of either party arising out of events
or circumstances occurring prior to such termination.
12. This Agreement shall not be assignable by either the Company or myself
without the express written consent of the other party.
13. I agree that any dispute in the meaning, effect or validity of this
Agreement shall be resolved in accordance with the laws of the State of
California without regard to the conflict of laws provisions thereof. I further
agree that if one or more provisions of this Agreement are held to be illegal or
unenforceable under applicable California law, such illegal or unenforceable
portion(s) shall be limited or excluded from this Agreement to the minimum
extent required so that this Agreement shall otherwise remain in full force and
effect and enforceable in accordance with its terms.
14. I agree that the covenants and obligations contained in this Agreement
relate to special, unique and extraordinary matters and that a violation of any
of such covenants or obligations may cause the Company irreparable injury for
which adequate remedy at law will not be available; and, therefore, that upon
any such breach of any such covenant or obligation, or any threat thereof, the
Company shall be entitled to the immediate remedy of a temporary restraining
order, preliminary injunction or such other form of injunctive or equitable
relief in addition to whatever remedies they might have at law. Furthermore, I
agree to indemnify the Company against, and shall reimburse the Company for, and
in respect of any and all claims, demands, losses, cost, expenses, obligations,
liabilities, damages, remedies and penalties, including interest, penalties and
reasonable attorneys' fees and expenses that the Company shall incur or suffer
and which arise from, are attributable to, by reason of or in connection with
any breach or inaccuracy of or any failure to perform or comply will any of my
agreements or covenants contained in this Agreement.
Accepted and Agreed to: /s/ PETER RIEPENHAUSEN
-----------------------------------
Consultant Signature
PETER RIEPENHAUSEN
Print Name
Align Technology, Inc.
ALT KOENIGSTR. 17
Print Address
By: /s/ Thomas M. Prescott 61462 KOENIGSTEIN, GERMANY
----------------------------------- City, State, ZIP
Title: President & CEO
SSN or Tax ID - -
EXHIBIT A
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l. Duties and Responsibilities:
Among other duties, you will assist us in European market strategy
development and cultivating and retaining key customers in Europe. Your
role as an Advisor will commence on September 1, 2002. In the interim, you
will continue in your role as Chairman, Europe.
Align will rely upon you to develop and implement strategies for keeping
Country Managers and other key personnel fully engaged and focused on
mission critical activities and business objectives and assure the complete
transfer of all banking accounts, country entity board responsibilities,
and business and personnel files to the appropriate individuals in Santa
Clara or Europe.
2. Compensation:
US $5,000/month from September 1, 2002 through August 31, 2003.
3. Expense Reimbursement
The company will reimburse for reasonable business expenses. All travel
expenses must be pre-approved in advance.
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EXHIBIT B
Align Technology, Inc.
881 Martin Avenue
Santa Clara, CA 95050
Ladies and Gentlemen:
1. The following is a list of existing inventions or improvements relevant
to the subject matter of my consulting with Align Technology, Inc. (the
"Company") that I desire to expressly clarify are not the subject of the
Consulting Agreement.
[X] No inventions or improvements
Additional sheets attached
----
See below:
----
2. I propose to bring to my consulting the following materials and
documents of a third party:
[X] No materials or documents
See below:
----
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GENERAL RELEASE OF ALL CLAIMS
(Exception - California - Attachment B)
On behalf of myself, my heirs, executors, administrators and assigns, I
hereby make the following agreements and acknowledgements in exchange for
Benefits to be received by me as described in the Consultant Proprietary
Information Nondisclosure Agreement ("Attachment A") and the June 17, 2002
letter (the "Letter") received by me from the Company and signed by Thomas
Prescott, President & CEO, Align Technology, Inc.
1. I acknowledge that:
a. I have received all wages earned by and owed to me by Align Technology,
Inc. ("Align"), as of the date this release is signed, except wages that will be
earned by me as Chairman, Europe, from the date this release is signed, through
September 1, 2002, and any benefits proposed under Attachment A and the Letter;
and
b. I understand that in order to receive the benefits provided by
Attachment A and the Letter, I must sign and return this General Release to
Align, no later than forty-five (45) calendar days after I have received this
General Release.
2. I agree that I fully and forever waive, release, acquit and discharge Align
Technology, Inc. and any and all past, current and future parent, subsidiary and
affiliated companies, predecessors and successors thereto (together the
"Company"), as well as the Company's officers, directors, agents, employees,
affiliates, representatives, shareholders and assigns, from any and all claims,
actions, charges, complaints, grievances and causes of action of whatever
nature, whether now known or unknown, which exist or may in the future exist
arising from or relating to events, acts or omissions prior to the Effective
Date of this General Release; my recruitment and hiring by the Company, my
employment with the Company and the termination thereof, including but not
limited to: claims for bonuses, or for severance; claims of breach of contract,
breach of the covenant of good faith and fair dealing, wrongful termination,
violation of public policy, fraud, intentional or negligent misrepresentation,
defamation, personal injury, infliction of emotional distress, and claims under
Title VII of the 1964 Civil Rights Act, the Equal Pay Act of 1963, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the Civil
Rights Act of 1866, the Employee Retirement Income Security Act of 1974, the
Worker Adjustment Retraining and Notification Act, the Family Medical Leave Act,
the Worker Adjustment Retraining and Notification Act, the California Government
Code, the California Labor Code, and any other local, state and federal laws and
regulations relating to employment, except any claim I may have for:
a. unemployment or any state disability insurance benefits pursuant to the
terms of applicable state law;
b. workers' compensation insurance benefits under the terms of any worker's
compensation insurance policy or fund of the Company;
c. to continue participation in certain of the Company's group benefit
plans pursuant to the terms and conditions of the federal law known as COBRA;
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d. to any benefit entitlements vested as the date of my separation,
pursuant to written terms of any Company employee benefit plan; and
e. to any stock and stock options pursuant to the terms of existing stock
option, stock purchase, and/or stock issuance agreement(s) and any addenda or
waivers thereto, between me and the Company, as modified by the Letter.
f. to indemnification and hold harmless protection with respect to my
action as an officer of the Company, whether contained in a contract for my
benefit, the Certificate of Incorporation or By-Laws equivalent of the Company
or under statutory provisions that provide for such indemnification and hold
harmless protection or pursuant to Directors and Officers Insurance maintained
by the Company for such purpose (pursuant to which I will continue to be covered
to the extent that the Company continues in effect any such insurance).
3. I understand and agree that if, hereafter, I discover facts different from or
in addition to those which I now know or believe to be true, that the waivers
and releases of this General Release shall be and remain effective in all
respects notwithstanding such different or additional facts or the discovery of
such facts. The Company also agrees that if, hereafter, it discovers facts
different from or in addition to those which it now knows or believes to be
true, that the waivers and releases of this General Release shall be and remain
effective in all respects notwithstanding such different or additional facts or
the discovery of such facts. I agree that I fully and forever waive any and all
rights and benefits conferred upon me by the provisions of Section 1542 of the
Civil Code of the State of California, which states as follows (parentheticals
added):
A general release does not extend to claims which the creditor [i.e., me]
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with the debtor [i.e., the Company].
4. The Company agrees that it fully and forever waives, releases, acquits and
discharges me from any and all claims, actions, charges, complaints, grievances
and causes of action of whatever nature, whether now known or unknown, which
exist or may in the future exist arising from or relating to events, acts or
omissions prior to the Effective Date of this General Release.
5. I agree that neither the fact nor any aspect of this General Release is
intended, or should be construed at any time, to be an admission of liability or
wrongdoing by either myself or by the Company.
6. I agree that I will not make any negative or disparaging statements or
comments, either as fact or as opinion, about the Company, including but not
limited to its employees, officers, directors, shareholders, vendors, products
or services, business, technologies, market position, performance and other
similar information concerning the Company.
7. I agree that if any provision, or portion of a provision, of this General
Release is, for any reason, held to be unenforceable, that such unenforceability
will not affect any other
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provision, or portion of a provision, and this General Release shall be
construed as if such unenforceable provision or portion had never been contained
herein.
8. I understand that, even if I did not sign this General Release, I would still
be bound by confidential/proprietary/trade secret information, non-disclosure
and inventions assignment agreement(s) signed by me in connection with my
employment with the Company, or by a predecessor or successor of Align, pursuant
to the terms of such agreement(s).
9. I understand that if I want to elect COBRA Benefits, after September 1, 2002,
I must timely complete and return to Align the Election Form-COBRA for me and my
eligible dependents. I further understand that I must promptly pay the COBRA
premiums due in order to continue health benefit plan coverages for me and my
dependents.
10. I understand that I may have forty-five (45) days after receipt of this
General Release within which I may review and consider, and should discuss with
an attorney of my own choosing, and decide whether or not to sign this General
Release. I also understand that, for the period of seven (7) days after I sign
this General Release, I may revoke it by delivering a written notification of my
revocation, no later than the seventh day, to:
Human Resources
Align Technology, Inc.
881 Martin Avenue
Santa Clara, CA 95050
Facsimile: (408) 470-1022
The Effective Date of this General Release will be the eighth day after I have
signed it, provided that I have delivered it to Align and I have not revoked it
during the seven days after I signed it. I understand that I should return my
signed General Release to Align at the address above.
11. I understand that I may disclose such facts and information, to my spouse
and to my attorneys, accountants or tax advisors to whom and only to the extent
that disclosure is necessary to effect the purposes for which I have consulted
such attorneys, accountants or tax advisors. I agree that in connection with any
disclosure permitted hereunder, I shall cause such my spouse, attorneys,
accountants or tax advisors to whom disclosure has been made, to agree to comply
with this requirement of confidentiality and nondisclosure (this "Requirement"),
and in the event any such third party breaches this Requirement, such breach
shall be deemed to have been committed by me. I agree that, in the event of any
breach of this Requirement, I shall immediately return to Align the Benefits
received by me, no later than twenty (20) days after service of written demand
by Align. I acknowledge that, in the event of any breach of this Requirement,
the stock issuance of 50,000 shares referred to in the Letter will immediately
be rendered null and void. I further agree that if I fail to timely return such
Benefits as demanded by Align, the prevailing party in any legal action brought
by me or by Align in connection with such failure and/or any alleged breach of
the Requirement shall be entitled to recover their attorneys fees and costs from
the non-prevailing party, in addition to any other remedies available under
applicable law.
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12. I agree and understand that this General Release contains the entire
agreement between the Company and me with respect to any matters referred to
herein, and that it supersedes any and all previous oral or written agreements
except those referenced in 2.d., 2.e., and 8., above.
I HAVE READ THIS GENERAL RELEASE; I UNDERSTAND IT AND KNOW THAT I AM GIVING UP
IMPORTANT RIGHTS; I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY OF MY OWN
CHOOSING BEFORE SIGNING IT AND I HAVE BEEN ENCOURAGED TO CONSULT WITH SUCH AN
ATTORNEY; AND I SIGN IT VOLUNTARILY:
(DATE & SIGN):
Signed: Aug 4, 2002 Employee's Signature:
/s/ Peter Riepenhausen
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Employee's Name (Printed): Peter Riepenhausen