Corporate Governance Guidelines
OVERVIEW - THE ROLE OF THE BOARD OF DIRECTORS
It is the paramount duty of the Board of Directors of Align Technology, Inc. (the "Company") to oversee the Chief
Executive Officer and other senior management in the competent and ethical operation of the Company on a day-to-day basis.
To satisfy this duty, the directors will take a proactive, focused approach to their position, and set standards to ensure that the
Company is committed to business success through maintenance of the highest standards of responsibility and ethics.
Directors bring to the Company a wide range of experience, knowledge and judgment. These varied skills mean that good
governance depends on far more than a "check the box" approach to standards or procedures. The Company's governance
structure is designed to be a working structure for principled actions, effective decision-making and appropriate monitoring of
both compliance and performance.
Effective directors maintain an attitude of constructive skepticism and careful review. Our directors know that their job
requires them to ask probing questions of management and to take the action necessary to get accurate and honest answers.
Our directors also rely on the advice, reports and opinions of management, counsel and our expert advisers. In doing so the
Board of Directors constantly evaluates the qualifications of those it relies upon for information and advice, and also looks to
the process used by managers and advisers in reaching their recommendations.
Finally, our Board of Directors prides itself on keeping up to date on best governance practices. We intend to continually
monitor the way we govern ourselves, including reviewing whether there are alternatives or new ideas which would strengthen
our governance structures.
DIRECTOR QUALIFICATIONS AND OTHER MATTERS
1. Board Membership Criteria
The Nominating and Governance Committee of the Board of Directors is expected to identify, evaluate and recommend
nominees to the Board of Directors as well as evaluate the composition, organization and governance of the Board of
Directors and its committees. The Nominating and Governance Committee is responsible for reviewing with the Board of
Directors, on an annual basis, the appropriate skills and characteristics required of members of the Board of Directors. In
this assessment, the Nominating and Governance Committee shall consider the following:
The current size and composition of the Board of Directors and the needs of the Board of Directors and the
respective committees of the Board.
Such factors as judgment, independence, character and integrity, age, area of expertise, diversity of experience,
length of service, and potential conflicts of interest.
Such other factors as the Committee may consider appropriate.
2. Future Commitments
Each member of the Board of Directors must ensure that other existing and anticipated future commitments do not
materially interfere with the member's service as director. Directors should advise the Nominating and Governance
Committee or the Boards of Directors of any invitations to join the Board of Directors of any other public company prior to
accepting another directorship.
3. Size and Composition of the Board
The Board of Directors shall review from time to time the appropriateness of its size. The Board of Directors may
consider expanding or reducing its size to a size it determines is most effective for operations. The Board of Directors
shall have a majority of directors who meet the criteria for independence established from time to time by the Nasdaq
Stock Market and the rules and regulations of the Securities and Exchange Commission.
4. Selection of New Director Candidates and Nominations of Directors
The Nominating and Governance Committee is responsible for identifying potential candidates for membership and
recommending nominees to the full Board. The Nominating and Governance Committee will annually recommend to the
full Board the slate of directors for election by the stockholders.
5. Extending the Invitation to a New Potential Director to Join the Board
An invitation to join the Board of Directors may be extended by the Board itself, or, with the Board's authorization, by the
Chairman of the Nominating and Governance Committee, or by the Chief Executive Officer.
6. Chairman of the Board and the Chief Executive Officer
The Board of Directors does not have a policy on whether or not the roles of Chief Executive Officer and Chairman of the
Board of Directors should be separate and, if they are not to be separate, whether the Chairman should be selected
from the non-employee directors or be an employee. The Board of Directors believes these issues should be considered
as part of a broader succession planning process.
7. Term Limits
The Board of Directors believes that term limits are on balance not the best way to maximize the effectiveness of the
Board of Directors. While term limits may help insure the introduction of fresh perspectives and new viewpoints, they may
have the countervailing effect of causing the loss of the benefit gained from the contributions of directors who have
developed, over time, increasing insight into the Company. The Nominating and Governance Committee will regularly
evaluate the contributions of existing Board members and the need for new directors and as appropriate, suggest the
resignation and replacement of a Board member.
8. Directors who Change their Present Job Responsibilities
The Board of Directors, through the Nominating and Governance Committee, will have the opportunity to review the
appropriateness of the continued service of directors who change their position or responsibility that they held when they
were elected to the Board of Directors.
9. Director Compensation
The form and amount of director compensation will be determined by the Compensation Committee in accordance with
the policies, principles and criteria set forth in its charter. The Compensation Committee will conduct an annual review of
BOARD DUTIES AND BOARD MEETING PROCEDURES
10. Board Meetings
The Board of Directors is expected to meet at least once per quarter.
11. Preparation and Participation at Meetings
The fundamental role of the directors is to exercise their business judgment to act in what they reasonably believe to be
in the best interests of the Company and its stockholders. In fulfilling that responsibility, the directors should be able to
rely on the honesty and integrity of the Company's senior management and expert legal, accounting, and other advisers.
Members of the Board of Directors are expected to rigorously prepare for, attend and participate in all Board of Directors
and applicable committee meetings, and to spend the time needed and meet as often as necessary to properly
discharge their obligations.
12. Board Material Distributed in Advance
Information and data that is important to the Board of Directors' understanding of the business to be conducted at a
Board of Directors or committee meeting should generally be distributed in writing to the directors prior to the meeting, so
meeting time may be conserved and discussion time focused on questions that the Board of Directors have about the
materials. If the subject matter is too sensitive to be distributed in writing, a presentation should be made at the meeting.
13. Executive Sessions of Independent Directors
The Board of Directors' policy is to have separate meeting time exclusively for the independent directors. Such meetings
should occur on at least a semi-annual basis. The independent directors will select a lead independent director who will
assume the responsibility of chairing the regularly scheduled meetings of independent directors and bear such further
responsibilities that the outside directors as a whole might designate from time to time.
14. Agendas for Board Meetings
The Chief Executive Officer will establish the agenda for each meeting of the Board of Directors and will distribute it in
advance to the Board of Directors. Each member of the Board of Directors is free to suggest the inclusion of items on the
agenda and to raise at any meeting of the Board of Directors subjects that are not on the agenda for that meeting.
The Board of Directors will review the Company's long-term strategic plans and the big-picture challenges faced by the
Company in executing these plans during at least one meeting of the Board of Directors per year.
BOARD RELATIONSHIP WITH SENIOR MANAGEMENT
15. Board Access to Senior Management
The Board of Directors has complete access to all Company officers and employees. Any meetings or contacts that a
director desires to initiate may be arranged directly by the director or through the Chief Executive Officer or other
Company officer. The directors should use their judgment to ensure that any such contact or communication is not
disruptive to the business operations of the Company, and to the extent this is not appropriate, copy the Chief Executive
Officer with any written communications.
16. Attendance of Non-Directors at Board Meetings
The Board of Directors welcomes the attendance of senior officers at each meeting of the Board of Directors. The Board
of Directors also encourages management to schedule managers to present at meetings of Board of Directors who: (a)
can provide additional insight into the items being discussed because of personal involvement in these areas or (b) have
future senior management potential that management believes should be given exposure to the Board of Directors.
17. Board Interaction with Stockholders, the Press and Others
The Board of Directors believes that management speaks for the Company. Individual members of the Board of Directors
may occasionally meet or otherwise communicate with various constituencies that are involved with the Company, but it is
expected that members of the Board of Directors would do this with the knowledge of management and, in most
instances, absent unusual circumstances or as contemplated in committee charters, at the request of management. The
Company encourages, but does not require, directors to attend the annual meeting of stockholders.
18. Standing Committees of the Board
The Board has the following standing committees: the Audit Committee, the Compensation Committee and the
Nominating and Governance Committee. All of the members of these committees will meet the criteria for independence
established by the Nasdaq Stock Market and any applicable SEC rules, as well as any other membership criteria
specified in the applicable committee charter. Pursuant to rules established by the Nasdaq Stock Market, the Board has
the responsibility to make an affirmative determination that each of its independent directors meets such criteria. The
Board of Directors may, from time to time, form new committees as it deems appropriate.
19. Assignment and Rotation of Committee Members
Committee members will be appointed by the Board of Directors upon recommendation by the Nominating and
Governance Committee. There will, from time to time, be occasions on which the Board of Directors may want to rotate
committee members, but the Board of Directors does not believe that formal policy of rotation is mandated.
20. Committee Charters
Each committee shall have its own charter. The charter will set forth the principles, policies, objectives and
responsibilities of the committees in addition to the qualifications for committee membership, procedures for committee
member nomination, committee organization and functioning and how the committee will communicate with the Board of
Directors. The charters will provide that each committee will meet to review its performance at least once a year.
21. Committee Meetings and Agenda
The Chairman of each committee will, in consultation with the appropriate committee members and members of
management, and in accordance with the committee's charter, determine the frequency and length of committee
meetings and develop the committee's agenda. Agendas are distributed to all committee members in advance of the
meeting. Committee members may suggest additional agenda items and may raise subjects that are not on the agenda
at any meeting.
22. Chief Executive Officer Evaluation
The Compensation Committee will conduct an annual review of the Chief Executive Officer's performance, in accordance
with the charter and principles of that committee. The Board of Directors will review the committee's report to ensure that
the current Chief Executive Officer is providing the best leadership for the Company, for a short, intermediate and long-
23. Board of Directors Evaluation
The Nominating and Governance Committee will oversee the annual Board of Directors evaluation process in
accordance with the charter and principles of that committee. As part of this process, directors will conduct a self-
evaluation to review the progress and effectiveness of the Board of Directors and its committees, and will submit its
comments to the Nominating and Governance Committee. The Nominating and Governance Committee will then report
back to the Board of Directors, and the full Board of Directors will consider and discuss the committee's report.
24. Management Succession
The Nominating and Governance Committee should conduct an annual review on succession planning, in accordance
with the charter and principles of that committee. The committee should report its recommendation to the Board of
Directors. The entire Board of Directors, along with the committee, will nominate and evaluate potential successors for
Chief Executive Officer. The Chief Executive Officer should make available his or her recommendation for potential
successors, together with the reasons for such recommendation and any suggested strategy or development plans for
25. Director Orientation and Continuing Education
The Company will have an orientation program for new directors. The orientation program will include presentations that
review the Company's business strategies, its financial and accounting systems and risk management controls, its code
of business conduct and methods and compliance programs, and its internal and independent auditor. The orientation
should include an introduction to the Company's senior management and visits to its corporate headquarters.
All directors shall complete any and all continuing education requirements mandated by rules adopted by the Securities
and Exchange Commission and/or the Nasdaq Stock Market.
26. Oversight of Corporate Governance Policies and Procedures
The Board of Directors has adopted these corporate governance principles and policies and shall regularly reevaluate
27. Related Party Transactions
The Audit Committee shall review and approve in advance any proposed related party transactions in compliance with
the rules of the Nasdaq Stock Market.
28. Public Communication with the Board
The Board of Directors shall provide a means by which persons, including shareholders and employees, may
communicate directly with non-management directors with respect to matters relating to the Company's corporate
governance and performance. The Board of Directors shall approve a process to be maintained by the Company's
management for collecting and distributing communications to the Board. The means of communications with the Board
shall be disclosed in the Company's annual proxy statement.
29. Stockholder Nominations
Stockholders holding not less than one percent (1%) of the outstanding shares of the Company's common stock
continuously for at least 12 months prior to the date of the submission may suggest director candidates for consideration
by the Nominating and Governance Committee. A stockholder that desires to recommend a candidate for election to the
Board of Directors shall direct the recommendation in writing to the Chairman of the Nominating and Governance
Committee and provide the candidate's name, home and business contact information, biographical data and relevant
qualifications, a signed letter from the candidate indicating willingness to serve, information regarding any relationships
between the candidate and the Company within the last three years, and evidence of the required ownership of Common
Stock by the recommending stockholder.