Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, 2020 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.
Management's annual report on internal control over financial reporting.
See “Report of Management on Internal Control over Financial Reporting” of this Annual Report on Form 10-K.
Changes in internal control over financial reporting.
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
Certain information required by Part III is omitted from this Form 10-K because we intend to file a definitive Proxy Statement for our 2020 Annual Meeting of Stockholders (the “Proxy Statement”) not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and certain information to be included therein is incorporated herein by reference.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 401 of Regulation S-K concerning our directors is incorporated by reference to the Proxy Statement under the section captioned “Election of Directors.” The information required by Item 401 of Regulation S-K concerning our executive officers is set forth in Item 1— “Business” of this Annual Report on Form 10-K . The information required by Item 405 of Regulation S-K is incorporated by reference to the section entitled “Delinquent Section 16(a) Reports” contained in the Proxy Statement. The information required by Item 407(c)(3), 407(d)(4) and 407(d)(5) of Regulation S-K is incorporated by reference to the Proxy Statement under the section entitled “Corporate Governance”.
Code of Ethics
We have a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer. This code of ethics is posted on our Internet website. The Internet address for our website is www.aligntech.com , and the code of ethics may be found on the “Corporate Governance” section of our “Investors” webpage.
We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above, or as otherwise required by the NASDAQ Global Market.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K is incorporated by reference to the Proxy Statement under the section captioned “Executive Compensation.” The information required by Items 407(e)(4) and (e)(5) is incorporated by reference to the Proxy Statement under the section captioned “Corporate Governance—Compensation Committee Interlocks and Insider Participation” and “Compensation Committee of the Board Report,” respectively.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by Item 403 of Regulation S-K is incorporated by reference to the Proxy Statement under the section captioned “Principal Stockholders”.
Equity Compensation Plan Information
The following table provides information as of December 31, 2020 about our common stock that may be issued upon the exercise of options and awards granted to employees, consultants or members of our Board of Directors under all existing equity compensation plans, including the 2005 Incentive Plan and the Employee Stock Purchase Plan ("ESPP"), each as amended, and certain individual arrangements (Refer to Note 12 "Stockholders’ Equity” of the Notes to Consolidated Financial Statements for a description of our equity compensation plans).
Plan Category Number of securities to be issued upon
exercise of outstanding options and restricted stock units (a) Weighted average
exercise price of
outstanding
options (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a))
Equity compensation plans approved by security holders 859,149 1
$ — 4,950,369 2, 3
Equity compensation plans not approved by security holders — — —
Total 859,149 $ — 4,950,369
1 Includes 631,905 RSUs and 227,244 MSUs at target, which have an exercise price of zero
2 Includes 325,665 shares available for issuance under our ESPP. We are unable to ascertain with specificity the number of securities to be issued upon exercise of outstanding rights or the weighted average exercise price of outstanding rights under the ESPP.
3 Includes 688,590 of potentially issuable MSUs if performance targets are achieved at maximum payout
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 404 and Item 407 of Regulation S-K is incorporated by reference to the Proxy Statement under the sections captioned “Certain Relationships and Related Party Transactions” and “Corporate Governance—Director Independence,” respectively.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 9(e) of Schedule 14A of the Securities Act of 1934, as amended, is incorporated by reference to the Proxy Statement under the section captioned “Ratification of Appointment of Independent Registered Public Accountants.”
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
1. Consolidated financial statements
The following documents are filed as part of this Annual Report on Form 10-K:
Report of Independent Registered Public Accounting Firm 54
Consolidated Statements of Operations for the year ended December 31, 2020, 2019 and 2018 57
Consolidated Statements of Comprehensive Income for the year ended December 31, 2020, 2019 and 2018 58
Consolidated Balance Sheets as of December 31, 2020 and 2019 59
Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2020, 2019 and 2018 60
Consolidated Statements of Cash Flows for the year ended December 31, 2020, 2019 and 2018 61
Notes to Consolidated Financial Statements 62
2. The following financial statement schedule is filed as part of this Annual Report on Form 10-K:
Schedule II—Valuation and Qualifying Accounts and Reserves for the year ended December 31, 2020, 2019 and 2018
All other schedules have been omitted as they are not required, not applicable, or the required information is otherwise included.
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Balance at
Beginning
of Period Additions
(Reductions)
to Costs and
Expenses Write
Offs Balance at
End of Period
(in thousands)
Allowance for doubtful accounts:
Year Ended December 31, 2018 1
$ 5,814 $ 870 $ ( 4,306 ) $ 2,378
Year Ended December 31, 2019 1
$ 2,378 $ 5,853 $ ( 1,475 ) $ 6,756
Year Ended December 31, 2020 $ 6,756 $ 12,073 $ ( 8,590 ) $ 10,239
Valuation allowance for deferred tax assets:
Year Ended December 31, 2018 $ 278 $ ( 27 ) $ — $ 251
Year Ended December 31, 2019 $ 251 $ 835 $ — $ 1,086
Year Ended December 31, 2020 $ 1,086 $ 239 $ — $ 1,325
1 Certain prior period information has been recast to conform to current year presentation.
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(b) The following Exhibits are included in this Annual Report on Form 10-K:
Exhibit
Number Description Form Date Exhibit
Number
Incorporated
by Reference
herein Filed
herewith
3.1
Amended and Restated Certificate of Incorporation of registrant
S-1, as amended (File No. 333-49932) 12/28/2000 3.1
3.1A
Certificate of Amendment to the Amended and Restated Certificate of Incorporation
8-K 5/20/2016 3.01
3.2
Amended and Restated Bylaws of registrant
8-K 2/29/2012 3.2
4.1
Form of Specimen Common Stock Certificate
S-1, as amended (File No. 333-49932) 1/17/2001 4.1
4.2
Description of the Capital Stock of registrant
10-K 2/28/2020 4.2
10.1†
Registrant's 2010 Employee Stock Purchase Plan
8-K 5/25/2010 10.02
10.2†
Registrant's 2005 Incentive Plan (as amended May 2016)
*
10.3†
Form of RSU agreement under Registrant's 2005 Incentive Plan (Officer Form for officers appointed after September 2016)
10-K 2/28/2020 10.3
10.3A†
Form of RSU agreement under Registrant's 2005 Incentive Plan (Officer Form for officers appointed prior to September 2016)
10-K 2/28/2020 10.3A
10.4†
Form of RSU agreement (CEO)
10-K 2/28/2020 10.4
10.5†
Form of RSU agreement under Registrant's 2005 Incentive Plan (Non-employee Director Form)
10-K 2/28/2020 10.5
10.6†
Align 2019 Global RSU Agreement
10-K 2/28/2019 10.6
10.7†
Form of option award agreement under registrant’s 2005 Incentive Plan
10-Q 8/4/2005 10.4
10.8†
Form of Market Stock Unit Agreement under Registrant's 2005 Incentive Plan (Officer Form for MSU awards granted in 2018 , 2019 and 2020 to officers appointed after September 2016)
10-K 2/28/2020 10.8
10.8A†
Form of Market Stock Unit Agreement under Registrant's 2005 Incentive Plan (Officer Form for MSU awards granted in 20 18, 2019 a nd 2020 to officers appointed prior to September 2016)
10-K 2/28/2020 10.8A
10.9†
Form of Market Stock Unit Agreement under Registrant's 2005 Incentive Plan (Officer Form for MSU awards granted in 2021 to officers appointed after September 2016)
*
10.9A†
Form of Market Stock Unit Agreement under Registrant's 2005 Incentive Plan (Officer Form for MSU awards granted in 2021 to officers appointed prior to September 2016)
*
10.10†
Form of Market Stock Unit Agreement for CEO (Focal grants)
10-K 2/28/2020 10.9
10.1 1 †
Form of Market Stock Unit Agreement for CEO Special MSU Award June 2018
8-K 6/25/2018 10.1
10.1 2 †
Form of Employment Agreement entered into by and between registrant and each executive officer (other than CEO for executives appointed prior to September 2016)
10-Q 5/8/2008 10.3
10.1 3 †
Form of Employment Agreement entered into by and between registrant and each executive officer (other than CEO for executives appointed after September 2016)
10-K 2/28/2017 10.8
10.1 4 †
Amended and Restated Chief Executive Officer Employment Agreement between Align Technology, Inc. and Joseph Hogan
10-Q 5/1/2015 10.3
10.1 5 †
Employment Agreement between registrant and John F. Morici (Chief Financial Officer)
10-Q 11/8/2016 10.2
10.16†
Form of Executive Officer Relocation Reimbursement Agreement
*
10.1 7 †
Form of Indemnification Agreement by and between registrant and its Board of Directors and its executive officers
S-1 as amended (File No. 333-49932) 1/17/2001 10.15
10.18
Sale and Purchase Agreement between CETP III Ivory S.a.r.l., and Align Technology, Inc. and its indirect wholly owned German subsidiary, mertus 602.GmbH, dated March 3, 2020
10-Q 5/5/2020 10.1
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Exhibit
Number Description Form Date Exhibit
Number
Incorporated
by Reference
herein Filed
herewith
10.1 9
Class C Non-Incentive Unit Purchase Agreement dated July 25, 2016
8-K 7/28/2016 10.1
10. 20
Membership Interest Purchase Agreement dated July 24, 2017 between Align Technology, Inc. and SmileDirectClub, LLC.
8-K 7/27/2017 10.2
10.2 1
Credit Agreement between Align Technology, Inc. and t he lender s party thereto from time to time and Citibank, N.A., as ad minis trative ag ent, dated July 21, 2020
10-Q 10/30/2020 10.1
21.1
Subsidiaries of Align Technology, Inc.
*
23.1
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
*
31.1
Certifications of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003
*
31.2
Certifications of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003
*
32 t
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2003
*
101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). *
101.SCH Inline XBRL Taxonomy Extension Schema Document *
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document *
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) *
__________________________________
† Management contract or compensatory plan or arrangement filed as an Exhibit to this form pursuant to Items 14(a) and 14(c) of Form 10-K.
t Furnished herewith
ITEM 16. FORM 10-K SUMMARY
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ALIGN TECHNOLOGY, INC.
By: / S / JOSEPH M. HOGAN
Joseph M. Hogan
President and Chief Executive Officer
Date: February 26, 2021
Each person whose signature appears below constitutes and appoints Joseph M. Hogan or John F. Morici, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/S/ JOSEPH M. HOGAN President and Chief Executive Officer (Principal Executive Officer) February 26, 2021
Joseph M. Hogan
/S/ JOHN F. MORICI Chief Financial Officer and Senior Vice President, Global Finance (Principal Financial Officer and Principal Accounting Officer) February 26, 2021
John F. Morici
/S/ KEVIN J. DALLAS Director February 26, 2021
Kevin J. Dallas
/S/ JOSEPH LACOB Director February 26, 2021
Joseph Lacob
/S/ C. RAYMOND LARKIN, JR. Director February 26, 2021
C. Raymond Larkin, Jr.
/S/ GEORGE J. MORROW Director February 26, 2021
George J. Morrow
/S/ ANNE M. MYONG Director February 26, 2021
Anne M. Myong
/S/ THOMAS M. PRESCOTT Director February 26, 2021
Thomas M. Prescott
/S/ ANDREA L. SAIA Director February 26, 2021
Andrea L. Saia
/S/ GREG J. SANTORA Director February 26, 2021
Greg J. Santora
/S/ SUSAN E. SIEGEL Director February 26, 2021
Susan E. Siegel
/S/ WARREN S. THALER Director February 26, 2021
Warren S. Thaler
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