Letter of Assignment - Long Term International Agreement between Align Technology, Inc. and Zelko Relic dated December 9, 2019

December 9, 2019

Zelko Relic

[Address Withheld]

Dear Zelko:

This letter of assignment (the "Agreement") is to confirm a mutual understanding between you and Align Technology, Inc (the "Home Company") of the terms and conditions applying to your long-term international assignment (the "Assignment") to Align Technology Switzerland GmbH (the "Host Company") as outlined below:

The terms and conditions outlined in this Agreement will be in effect only for the period of your employment on this Assignment. The term of the Assignment may be extended by written agreement of the parties.

During the Assignment, you shall be based at the offices of the Host Company in the Host Location, or at such other location as may be agreed upon by you and the Home Company. You shall, however, also travel to other locations at such times as may be appropriate for the performance of your duties under this Agreement. During the Assignment, you shall perform services as requested by, and under the sole direction and control of, the directors, officers and employees of the Host Company, acting only on behalf and for the benefit of the Host Company. In the event this Assignment is extended or a new assignment occurs, a new written agreement shall be executed. You are subject to reassignment to any of the Home Company’s locations throughout the world. Such reassignment will depend on the future needs of the Home Company.

During the Assignment and any period that you are on assignment for the Home Company outside the Home Location, this Agreement and the benefits contained herein, are contingent upon you being authorized to work and reside in the Host Location. Home Company (and Host Company if necessary) will support your application for any visas, residence permits or other necessary authorizations.

If you lose or fail to obtain your authorization to work in the Host Location at any time, for any reason during the life of this Agreement or your Assignment, Home Company will consider your circumstances, but may, at its sole discretion, consider all or any portion of this Agreement void.

Your Assignment is temporary in nature. At all times during your Assignment, you will remain an at-will employee of Home Company. The terms and conditions of your offer letter and proprietary information and inventions agreement with Home Company (collectively "Offer Letter") will remain applicable, unless modified by this Agreement. This Agreement is based on our confidence that this Assignment and your continued employment with Home Company will be a mutually rewarding and enriching experience, but it is not an employment contract, and does not represent a guarantee of continued employment for any period of time. Regardless of any statement contained in this Agreement, your employment with the Home Company is “employment at-will”, which means that either you or the Home Company may terminate your employment relationship at any time, for any reason, with or without cause, and with or without notice to the other party. Nothing in this Agreement is intended to modify or alter the at-will nature of your employment relationship. For the avoidance of doubt, this does not in any way give rise to a direct employment relationship between you and the Host Company. Your employment with the Home Company is subject to the laws of the Home Location. Host Location law shall not apply to this Assignment or the services performed during your Assignment, and you hereby agree to waive all claims under Host Location law, if any.

If you die, become disabled or the Home Company terminates your employment for reason other than for Cause before the end of this Assignment, the Home Company will cover the cost of returning you and your accompanying family members as well as your personal effects back to the Home Location immediately. "Cause" is determined by the Home Company in its sole discretion, but examples of Cause would include conduct by you involving dishonesty, failure to follow the “Employment Restrictions” Section below, or failure to abide by any material term of this Agreement or your Offer Letter.

Home Company requires you, during the course of your Assignment, to abide by all requirements set out in the Home Company's International Long Term Assignment Policy (the "Policy"). As part of this, should any requirement set out in the Policy conflict with any requirement of your employment with the Home Company or the Offer Letter, the former will take precedence to the extent allowed by applicable law.

Depending on the documentation needed to support your Assignment, you may also be required to enter into a local employment agreement with the Host Company covering the period of your Assignment.

Please note that all allowances and benefits provided in this Agreement cease upon your return to the Home Location or upon reassignment to a new location, the terms of this Agreement will cease to have effect and you will revert to the terms and conditions of your Offer Letter.

Your Assignment to the Host Company may be voluntarily ended by you upon thirty (30) days' prior written notice, or involuntarily ended by either the Home Company or the Host Company, at any time, for any reason, and without payment of any indemnity by the Home or Host Company unless expressly required by applicable law. If the Home Company or the Host Company ends this Assignment early, it will attempt to give you thirty (30) days' prior notice, to assist you in preparing for the transition.

If you voluntarily resign from employment with the Home Company while on Assignment, all Assignment-related relocation payments, Assignment-related allowances and Assignment-related support provided under this Agreement will cease upon the date of resignation to the extent allowed by applicable law. In situations where you voluntarily resign from employment or are involuntarily terminated for "Cause," neither Home Company nor Host Company will bear any relocation costs, unless expressly required by the law applicable.

For the avoidance of doubt, the termination of your employment with the Home Company shall automatically terminate your Assignment under this Agreement. If your employment with the Home Company terminates during the Assignment, the continuing obligations in your Offer Letter will remain in effect.

Further, as a requirement to receive any Assignment-related benefits, you will be required to provide your signed acknowledgement and acceptance of Exhibit B attached herein, which shall be applicable for the duration of your Assignment to the extent allowed under applicable law.

It is understood that during your Assignment, and employment with Home Company, you will not engage in any employment or business enterprises that would in any way conflict with your service and the interests of the Home Company or the Host Company. The Home Company's Code of Conduct, Export/Import, and any other regulation to lawful trade policies apply to all transactions and conflicts of interest. In addition, you agree to comply with all applicable laws in the Host Location, including all applicable laws concerning governmental payments. Except as permitted under the express written policies of the Home Company, you shall not, directly or indirectly, pay, give or offer anything of value to any foreign government officer, employee or representative, or to any foreign political party or candidate for or incumbent in any foreign political office, for any personal or business reasons, including in order to assist in obtaining, retaining or directing business.

You will continue to be an employee of the Home Company and will continue to be paid by the Home Company from the Home Location payroll. Salary actions, including timing and amounts of increases (if any), will be consistent with the Home Company’s customary payroll and performance review practices in effect in your Home Location. While on Assignment, incentive payments will be administered and paid according to the customary incentive policies and practices of the Home Company.

Throughout your Assignment, unless otherwise provided in this Agreement, you shall be entitled to participate in any employee benefit plans, programs or arrangements of the Home Company for which you are eligible, as well as any benefit plans, programs or arrangements of the Home Company designed to replace the existing plans, programs or arrangements during your Assignment. These benefits and assignment allowances and reimbursements, including those that follow in this Agreement, are excluded from your regular salary and shall not be considered for purposes of determining any notice, overtime, 13 months' pay, severance, bonus, vacation pay, holiday allowance, or similar to the extent allowed under applicable law. Any severance or severance-related payments that may be payable under any non-U.S. jurisdiction will reduce the amount payable under the Home Company's prevailing severance or severance-related practices, if any, in the United States.

These Assignment benefits and allowances are provided at the sole discretion of Home Company. You shall not acquire a right to such benefits and allowances, and Home Company reserves the right to change, modify, amend or discontinue such benefits and allowances at any time, at its sole discretion, to the extent allowed by applicable law. You understand and agree that the benefits provided under your Offer Letter (if any) and U.S. benefit policies which are directly related to your performance of work in Home Location (e.g. transportation allowance) will cease to apply during your Assignment.

You will be eligible for vacation under the Home Company's vacation policy, unless otherwise required by local law.

You will be eligible to observe the local policy for holidays in the Host Location.

You will be covered by Home Company’s tax equalization policy for the duration of your Assignment. Home Company’s philosophy regarding tax equalization is that as an international assignee, you will neither materially gain nor lose from the difference in income and social tax costs between your Home and Host Location, within certain parameters. Thus, while on the Assignment, you will pay approximately the same U.S. income (U.S. federal, state and local) and social security tax, on tax equalized income, which you would have paid had you remained in your Home Location.

You will be required to comply with all Home Location, Host Location and foreign laws regarding personal income and social security taxes and thus you will be responsible for ensuring timely completion of personal tax returns in the Host and Home locations (as required).

To assist you in this regard, the Home Company will designate a tax service provider and pay for the preparation of required tax returns and tax equalization settlement calculations for you for all tax years affected by the Assignment. You will be required to meet with the Home Company-designated tax service provider for a tax briefing prior to your departure from the Home Location and after arrival in the Host Location to confirm that you understand the tax implications of the Assignment. You will be required to use the tax return preparation services of the Home Company’s designated tax service provider. The Home Company will not reimburse any fees incurred by you in utilizing the services of another tax service provider.

To the extent permissible under applicable laws, it is intended that you will remain covered under your Home Location social security scheme. However, if you are subject to social security charges in the Host Location during the Assignment, and the Host Location permits you to apply for a refund of such charges, you agree to apply for such refund, and have such refund paid to Host Company or Home Company where possible. If it is not possible for a refund to go directly to Host Company or Home Company, then you agree and authorize Home Company or Host Company, as applicable, to deduct and set off any such amounts refunded to you from any payments due from Home Company or Host Company to you, up to the maximum extent permitted by law. If the set-off is insufficient to cover the refund that you received, you agree to pay the Home Company or Host Company, as applicable, the amount still outstanding.

You will be responsible for penalties and interest charges, if any, incurred as a result of your personal actions.

By accepting this Assignment, you confirm your agreement to the terms and conditions of the Home Company's tax equalization policy including, but not limited to:

In addition to your Home Location compensation, you will be entitled to receive the Assignment allowances and provisions as described in the Policy. The amount of each of these allowances is specified in the Summary of Long Term International Assignment Provisions, attached herein as Exhibit A, and will be reviewed with you by your international assignment consultant.

While you are on the Assignment, all Assignment allowances, deductions and other compensation items referenced herein will be administered by the Home Company from the Home Location payroll.

The provisions of this Agreement are severable. If any provision is found by any court of competent jurisdiction to be unreasonable and invalid, that determination shall not affect the enforceability of the other provisions. Furthermore, if any of the restrictions against various activities is found to be unreasonable and invalid, the court before which the matter is pending shall enforce the restriction to the maximum extent it deems to be reasonable or valid.

This Agreement and all related matters in dispute thereto shall be construed in accordance with California State substantive law without regard to the choice of law principles thereof.

All questions concerning the construction, validity and interpretation of this Agreement arising during the period of this Agreement and/or directly or indirectly relating to or arising out of the Assignment including, but not limited to, claims of discrimination arising under state or federal law, the termination thereof, and/or to the interpretation and/or implementation of this Agreement, will exclusively be subject to arbitration. The arbitration will be held in California in the United States of America, and will be governed by the rules as established at that time by the American Arbitration Association for the resolution of employment disputes.

To the extent that you are entitled to rights, benefits or compensation under the laws of both Host Location and your Home Location, you agree that you will be entitled to such rights, benefits, or compensation that are no greater than those provided to you under the terms of this Agreement, so that any advantages, entitlements or protections that may apply to you under the laws of both jurisdictions may not be combined.

No failure or delay by any party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or particular exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by any party of any breach of any provision of this Agreement shall be deemed to be a waiver of any subsequent breach of that or any other provision of this Agreement.

All amounts paid pursuant to this Agreement shall be subject to deductions and withholding for taxes (income, social, foreign or otherwise) to the extent agreed to by you or required by applicable law.

Certain payments, reimbursements, and benefits to be made to you under this Agreement may be subject to Section 409A of the U.S. Internal Revenue Code (“Section 409A”). The Home Company intends that this Agreement will be administered and interpreted in accordance with Section 409A so that amounts payable under the Agreement shall be exempt or compliant with Section 409A. If any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner so that all payments comply with Section 409A. Any benefits or amounts payable under this Agreement upon your termination of employment that constitute deferred compensation under Section 409A (i) shall be paid only if such termination constitutes a separation from service under Section 409A, and (ii) if you are a “specified employee”, the payment shall be delayed until six months and one day from the date of termination of employment.

Any reimbursement of benefits will be made not later than the last day of your taxable year following the year in which the related expense was incurred (subject to you providing any required supporting documentation) in accordance with Treas. Reg. Section 409A-3(i)(1)(iv). Any reimbursement payments due to you shall not be subject to liquidation or exchange for another benefit and the amount of such expenses eligible for reimbursement or such benefits that you receive in one taxable year shall not affect the expenses eligible for reimbursement or the amount of such benefits that you will receive in any other taxable year.

Any amounts payable to you pursuant to any tax equalization agreement (within the meaning of Treas. Reg. Section 1.409A-1(b)(8)(iii)) shall be made not later than the last day of your second taxable year following the year in which your U.S. Federal income tax return is required to be filed (including any extensions) for the year to which the compensation subject to the tax equalization payment relates, or, if later, the second taxable year following the latest such taxable year in which your foreign tax return or payment is required to be filed or made for the year to which the compensation subject to the tax equalization payment relates. In the event of a tax audit, litigation or other tax proceedings related to the Policy, supplemental tax equalization payments may be made during the period described in Treas. Reg. Section 1.409A-3(i)(1)(v).

The Home Company makes no representation or warranty and shall have no liability to you or any other person if any provision of the Agreement, the Policy or the Home Company's tax equalization policy is determined to constitute deferred compensation subject to Section 409A but does not satisfy an exemption from, or the conditions of, Section 409A.

During the Assignment, your confidentiality obligations towards the Home Company will remain unaffected by your Assignment (and they extend to the Host Company during your Assignment). Upon termination of your employment and/or Assignment, you must return all copies of documents containing Confidential Information, as well as all Home or Host Company assets and property, including documents (in electronic or paper format), files, books, papers, memos, hardware, software, equipment, and electronic media storage, in your possession. Home Company hereby informs you, and you acknowledge your understanding, that under the U.S. Defend Trade Secrets Act of 2016 (the “DTS Act”), to the extent the DTS Act applies to you, you may not be held criminally or civilly liable for certain disclosure of a “trade secret,” as defined in the DTS Act, made in confidence to a government official or to an attorney for the sole purpose of reporting or investigating a suspected violation of law.

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement by and among, as applicable, the Home Company and its affiliates for the exclusive purpose of managing and administering your Assignment.

You understand that the Home Company holds certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, email address, family size, marital status, sex, beneficiary information, emergency contacts, passport/visa information, age, language skills, drivers license information, nationality, C.V. (or resume), wage history, employment references, social insurance number or other identification number, salary, job title, employment or severance contract, current wage and benefit information, personal bank account number, and tax related information for purposes of managing and administering your Assignment (“Data”).

 

You understand that Data may be transferred to any third parties assisting in the management and administration of your Assignment, that these recipients may be located in the Home Location or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting the Human Resources Department.

You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of managing and administering your Assignment. You understand that Data will be held only as long as is necessary to manage and administer your Assignment.

You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Human Resources Department.

Each of the Home Company group companies (the Home Company and its subsidiaries and affiliates) is a third party beneficiary of this Agreement and each of them has the full right and power to enforce rights, interests and obligations under this Agreement without limitation or other restriction.

Aires is Home Company's designated relocation management company and, as such, will be coordinating all aspects of your Assignment including coordination of suppliers, policy questions, payroll (calculations of allowance, deductions) and general questions and concerns. You will be contacted by an international assignment consultant from Aires to setup your initial consultation call.

Please acknowledge receipt of this Agreement and agreement with its terms by signing the two originals and returning one to the person listed below.

Sincerely yours,

Stuart Hockridge                    

SVP, Global Human Resources

ACKNOWLEDGE AND AGREE:                                 

            

Employee Name:     Zelko Relic    

Host Location:     [Withheld]

Payroll Location:    United States

I understand and agree that all relocation/allowance payments and benefits related to my Assignment made to me or on my behalf by Home Company prior to the completion of twenty four (24) months of service on Assignment, measured from the Effective Date, shall not be considered "earned" until twenty four (24) months of employment with the Home Company on Assignment have been completed.

In the event I am involuntarily terminated for "Cause" or voluntarily resign from my employment with Home Company, Home Company will not assume the cost for return transportation to the Home Location or return shipment of furniture, household goods, or personal effects except where mandated by applicable law. Should I choose to remain in the Host Location, my tax equalization calculation, calculated pursuant to the Home Company's tax equalization policy, will assume that I left the Host Location within thirty (30) days of such resignation. Should I be involuntarily terminated for "Cause" or voluntarily resign from my employment with Home Company within the first twelve (12) months of the Effective Date, I will be required to repay 100% of the relocation/assignment costs and benefits related to my Assignment, to the extent allowed under applicable law. Should I be involuntarily terminated for "Cause" or voluntarily resign from my employment with Home Company between twelve (12) and twenty-four (24) months of the Effective Date, I will be required to repay 50% of the relocation/assignment costs related to the Assignment to the extent allowed under applicable law.

In the event of involuntary termination due to performance issues and/or job restructuring, no reimbursement is required.

In accordance with the above, if my employment with Home Company terminates prior to the completion of twenty four (24) months of service on Assignment, measured from the Effective Date, I authorize at the time of termination of my employment Home Company to withhold from my final pay check any Assignment-related monies due to Home Company, if any, in accordance with the formula stated above, in the above described scenarios. In the event the amount I owe Home Company is greater than the amount of my final pay check, I agree to pay the balance in full to Home Company within thirty (30) days of my termination date.

_____________________________________        ________________________    

Zelko Relic                          Date

                        

I accept that all interpretations under this International Assignment Tax Equalization Policy Agreement, shall be controlled by the Home Company. Home Company shall have the right and privilege at any time it deems necessary and proper to amend, add, or delete provisions to and from this International Assignment Tax Equalization Policy Agreement, without prior notice.

In addition, I understand, as the employee, I am fully responsible for all penalties and interest charges assessed by any tax authority due to my failure to (1) provide information to the Home Company's designated tax services provider on a timely basis, (2) notify the Home Company's designated tax services provider of any significant personal income or investment transactions, or (3) cooperate with the Home Company with respect to the tax equalization process.

I understand and agree that, to the extent allowed by applicable law, Home Company will reduce my compensation by an estimated hypothetical tax. The estimated hypothetical tax is an amount which approximates my periodic tax deductions/withholdings, if applicable, calculated with reference to compensation, benefits, deductions and credits otherwise available to me had I remained in my Home Location. In return, Home Company will advance wages that I have not yet earned to assist with the payment of my actual Home and Host Location tax liabilities.

I understand that these wage advances provided by the Home Company for payment of taxes constitutes an obligation by me to Home Company, which will be reconciled with the final liabilities that are Home Company's responsibility through the annual tax equalization settlement calculation. After completion of the tax equalization settlement statement for each taxable year, I agree to repay any obligation for each taxable year within thirty (30) days. If I fail to repay any obligation to Home Company within thirty (30) days after completion of the tax equalization settlement statement, then, unless Home Company and I have agreed otherwise in writing, Home Company shall have the right, to the extent allowed under applicable law, to:

The total obligation will become immediately due and payable if my employment with Home Company or any of its affiliate corporations is terminated, whether voluntarily or involuntarily, to the extent allowed under applicable law.

If I fail to furnish tax records in response to a request by the Home Company, or cease employment with the Home Company or any of its subsidiaries for any reason before the tax records needed to complete the year-end tax equalization settlement statement, then Home Company shall have the right to calculate such amounts by making reasonable assumptions of probable taxes. If an amount is owed to Home Company, Home Company shall also have the right to require immediate payment of such amount, including the right to reduce future amounts paid to me whether as wages, salary or other compensation for services performed in light of my having received wage advances that I have not yet earned, unless Home Company and I have agreed otherwise in writing.

By signing, I accept all terms and conditions of this International Assignment Tax Equalization Policy Agreement.

Acknowledgment and acceptance: