Form 10-K FARO TECHNOLOGIES INC For: Dec 31
FARO TECHNOLOGIES, INC.
2018 NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
1. Purpose. The purpose of the FARO Technologies, Inc. 2018 Non-Employee Director Deferred Compensation Plan (the “Plan”) is to provide non-employee members of the Board of Directors of FARO Technologies, Inc., a Florida corporation (the “Corporation”), with the opportunity to elect, on an annual basis, to (i) convert all of the annual cash retainer fees (“Retainer Fees”) as well as any annual committee and chair fees other than reimbursements (“Ancillary Fees”) otherwise payable to them by the Corporation into deferred stock units and (ii) defer the annual equity award of restricted stock units granted to them by the Corporation.
2. Definitions. For purposes of the Plan:
(a) “Account” shall mean the separate account maintained on the books of the Corporation for each Participant pursuant to Section 8, consisting of the Cash Retainer Sub-Account and/or the RSU Sub-Account.
(b) “Board” shall mean the Board of Directors of the Corporation.
(c) “Committee” shall mean the Compensation Committee of the Board, or a subcommittee thereof, or such other committee designated by the Board to administer the Plan.
(d) “Common Stock” shall mean the common stock, par value $0.0001 per share, of the Corporation, and all rights appurtenant thereto.
(e) “Deferred Stock Units” shall mean deferred stock units credited to a Participant’s Account pursuant to elections by the Participant under Sections 6 and 7.
(f) “Director” shall mean any member of the Board who is not an employee of the Corporation or any of its subsidiaries or affiliates.
(g) “Effective Date” shall mean October 24, 2018.
(h) “Fair Market Value” means as of any date the closing price of the Common Stock as reported on the NASDAQ Stock Market for that date or, if no closing price is reported for that date, the closing price on the next preceding date for which a closing price is reported, unless otherwise determined by the Committee.
(i) “Initial Grant” means the initial equity grant received by a Director at the time the Director first becomes a member of the Board, if any.
(j) “Participant” shall mean a Director who makes a deferral election under Section 6 or 7 of the Plan.
(k) “Plan” shall mean the FARO Technologies, Inc. 2018 Non-Employee Director Deferred Compensation Plan, as set forth herein and as amended from time to time.
(l) “Restricted Stock Units” or “RSUs” shall mean restricted stock units granted to the Participant under the Stock Plan.
(m) “Section 409A” shall mean Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance issued thereunder.
(n) “Separation from Service” shall mean a “separation from service” from the Corporation, within the meaning of Section 409A and the regulations promulgated thereunder.
(o) “Stock Plan” shall mean the FARO Technologies, Inc. 2014 Incentive Plan, as amended from time to time, or any successor equity plan adopted by the Corporation.
3. Administration. The Plan shall be administered by the Committee. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof as well as any agreement or instrument entered into hereunder; and establish, amend, waive and revoke rules and regulations as it deems necessary or desirable for the administration of the Plan. Further, the Committee shall have full power to make any other determination which may be necessary or advisable for the Plan’s administration. All such interpretations, rules, regulations and conditions shall be final, binding and conclusive upon the Participants and all other persons having or claiming any right or interest in the Plan or the Deferred Stock Units.
For the avoidance of doubt, the ministerial functions of the Plan shall be handled by employees of the Corporation, in accordance with the rules and regulations established by the Committee.
No member of the Board or Committee, and no officer or employee of the Corporation to whom the Committee delegates any of its power and authority hereunder or who otherwise assists in the administration of the Plan, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and such officers and employees shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Corporation’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.
4. Eligibility. Each Director shall be eligible to participate in the Plan and to make the elections provided under Sections 6 and 7. A Director shall cease to be eligible to make elections provided under Sections 6 and 7 when the Director ceases to be a Director, as defined in this Plan.
5. Relation to Stock Plan. Deferred Stock Units granted or credited in accordance with (i) Section 6 shall be considered Deferred Stock Units issued pursuant to Section 9 of the Stock Plan and (ii) Section 7 shall be considered Restricted Stock Units issued pursuant to Section 9 of the Stock Plan. The Deferred Stock Units subsequently credited in lieu of dividends relating to Deferred Stock Units issued under the Stock Plan shall be considered restricted Deferred Stock Units issued pursuant to the Stock Plan. The Deferred Stock Units referred to in this paragraph, and Common Stock issued thereunder, will be subject to the terms and conditions of the Stock Plan, as well as the provisions
of this Plan. The Deferred Stock Units referred to in this paragraph, and Common Stock issued thereunder, will reduce the authorized share number under Section 5.1 of the Stock Plan to the extent provided in the Stock Plan.
6. Deferral of Cash Retainer (Equity).
(a) Annual Elections. Prior to the first day of each calendar year beginning on or after January 1, 2019, each Director may elect to defer payment of 100% of the Director’s Retainer Fees and Ancillary Fees to be earned in such calendar year that will be credited to the Cash Retainer Sub-Account of the Participant’s Account. To be effective, such election must be completed and delivered to the Corporation prior to the first day of the calendar year in which the services relating to the cash retainer fee are performed. Any election made under this Section shall become irrevocable as of December 31 of the year prior to the year in which the services relating to the cash retainer fee are performed. Participants shall always be one hundred percent (100%) vested in the amount they defer pursuant to this Section 6.
(b) Initial Participant Elections. An individual who initially becomes a Director during a calendar year may not make a deferral election with respect to the pro rata portion of the Retainer Fees and Ancillary Fees he or she receives during his or her initial, partial calendar year of service. A new Director may first defer payment of his or her Retainer Fees and Ancillary Fees in accordance with the election requirements set forth in Section 6(a) above.
(c) Effect of Elections. Any election made pursuant to this Section 6 shall remain in effect for the Retainer Fees and Ancillary Fees earned and paid in the following calendar year. Deferral of any Retainer Fees and Ancillary Fees earned and paid to the Director in subsequent years will require the completion and delivery of a new election form in accordance with the election requirements set forth in Section 6(a) above.
7. Deferral of Annual Grants of Restricted Stock Units.
(a) Annual Elections. Prior to the first day of each calendar year beginning on or after January 1, 2019, each Director may elect, in accordance with rules and procedures established by the Committee, to (i) elect to receive all of his or her annual equity grant from the Corporation received during the calendar year, if any, in the form of Restricted Stock Units, or (ii) defer payment of all such Restricted Stock Units granted to the Director in such calendar year and have them credited to the RSU Sub-Account of the Participant’s Account in accordance with Section 8(c). To be effective, such election must be completed and delivered to the Corporation prior to the first day of the calendar year in which the underlying Restricted Stock Units are granted. Any election made under this Section shall become irrevocable as of December 31 of the year prior to the year in which the underlying Restricted Stock Units are granted. For the avoidance of doubt, Initial Grants may not be deferred under the Plan.
(b) New Participant Elections. An individual who initially becomes a Director during a calendar year may not make a deferral election with respect to the pro rata portion of the annual Restricted Stock Unit grant, if any, he or she receives during his or her initial, partial calendar year of service. A new Director may first make a deferral election with respect to an annual equity grant in accordance with the election requirements set forth in Section 7(a) above.
(c) Effect of Elections. Any election made pursuant to this Section 7 shall remain in effect for the annual Restricted Stock Unit grant made in the following calendar year. Deferral of any Restricted Stock Unit grants made to the Director in subsequent years will require the completion and delivery of a new election form in accordance with the election requirements set forth in Section 7(a) above.
(d) Vesting of Restricted Stock Units. For the avoidance of doubt, the vesting of any Restricted Stock Units deferred under Section 7(a) shall be governed by the terms of the Stock Plan and document thereunder evidencing the Restricted Stock Unit grant. If the Restricted Stock Unit award is forfeited for any reason under the Stock Plan, no amounts shall be payable under this Plan as a result of any deferral election under Section 7(a). Upon vesting in the RSU Sub-Account, all such Restricted Stock Units shall be considered to be Deferred Stock Units and are referred to the same in this Plan.
8. Accounts.
(a) Accounts Generally. The Account of each Participant shall be a notional account. All amounts credited to such Account shall be bookkeeping entries only. Statements that identify the Participant’s Account balance shall be provided, or made available, to Participants no less frequently than annually.
(b) Cash Retainer Sub-Account. The crediting of Deferred Stock Units to the Cash Retainer Sub-Account of the Participant’s Account pursuant to Section 6 shall be made as of the dates the Retainer Fees and Ancillary Fees earned by the Participant during the applicable calendar year would otherwise have been payable to the Participant. The number of Deferred Stock Units to be credited shall be equal to the result of dividing the cash amount deferred as of each such date by the Fair Market Value of one share of Common Stock on such date.
(c) RSU Sub-Account. The crediting of Deferred Stock Units to the RSU Sub-Account of the Participant’s Account pursuant to Section 7 shall be made as of the dates the Restricted Stock Units granted to the Participant during the applicable calendar year become vested. Any Restricted Stock Units that do not vest, or that vest after the Director has a Separation from Service, shall not be deferred under the Plan.
(d) Cash Dividends. Whenever any cash dividends are declared on the Common Stock, the Corporation will credit the Cash Retainer Sub-Account and RSU Sub-Account of each Participant on the date such dividend is paid with a number of additional Deferred Stock Units equal to the result of dividing (i) the product of (x) the total number of Deferred Stock Units credited to the Participant’s Sub-Account on the record date for such dividend and (y) the per share amount of such dividend by (ii) the Fair Market Value of one share of Common Stock on the date such dividend is paid by the Corporation to the holders of Common Stock.
(e) Capitalization Adjustments. In the event of (i) any change in the Common Stock through a merger, consolidation, reorganization, recapitalization or otherwise, (ii) a stock dividend, or (iii) a stock split, combination or other changes in the Common Stock, all as described in Section 15 of the Stock Plan, the Deferred Stock Units credited
to the Cash Retainer Sub-Account and RSU Sub-Account of each Participant shall be increased or decreased proportionately in accordance with Section 15 of the Stock Plan.
9. Payment of Account. Payment of the Participant’s Account shall be paid to the Participant (or, in the event of the Participant’s death, to the Participant’s beneficiary, as provided in Section 11) shall be paid as provided below.
(a) Cash Retainer Sub-Account. Deferred Stock Units credited to the Participant’s Cash Retainer Sub-Account shall be paid in a single payment no later than the 60 business day following the date the Participant incurs a Separation from Service for any reason other than his or her death. The payment shall be in shares of Common Stock equal to the number of Deferred Stock Units credited to the Participant’s Cash Retainer Sub-Account on the payment date, provided that any fractional Deferred Stock Unit shall be paid in cash based on the Fair Market Value of one share of Common Stock on the payment date.
(b) RSU Sub-Account. Deferred Stock Units credited to the Participant’s RSU Sub-Account shall be paid in a single payment no later than the 60 business day following the date the Participant incurs a Separation from Service for any reason other than his or her death. The payment shall be in shares of Common Stock equal to the number of Deferred Stock Units credited to the Participant’s RSU Sub-Account on the payment date, provided that any fractional Deferred Stock Unit shall be paid in cash based on the Fair Market Value of one share of Common Stock on the payment date.
(c) Distribution upon Death. If a Participant incurs a Separation from Service due to death or his or her death occurs after Separation from Service but before payment to him or her Account, all or the remaining balance of his or her Account shall be paid to such Participant’s beneficiaries in a lump sum no later than the 60 business day following the date of death, in accordance with the provisions of Section 11. However, if the identity of the beneficiary cannot be determined or located, payment to the beneficiary may be delayed to the extent allowed under Section 409A.
10. Change in Control. In the event of a Change in Control (as defined in the Stock Plan) that constitutes a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the Corporation’s assets under Section 409A, the Account of each Participant shall be paid to the Participant in a lump sum in cash within ten business days after the date of the Change in Control. With respect to the Cash Retainer Sub-Account and the RSU Sub-Account, such payment shall be in an amount equal to the result of multiplying (A) the number of Deferred Stock Units credited to the Participant’s Account on the Change in Control date by (B) the Fair Market Value of one share of Common Stock on the Change in Control date.
11. Beneficiary Designation. Each Participant shall have the right, at any time, to designate any person or persons, including a trust, as his beneficiary or beneficiaries to whom payment under the Plan shall be paid in the event of the Participant’s death prior to payment of the Participant’s Account. Any beneficiary designation must be made or changed by a Participant by a written instrument, on such form prescribed by the Committee, which is filed with the Corporation prior to the Participant’s death. If a Participant fails to designate a beneficiary, or if all designated
beneficiaries predecease the Participant, the Account shall be paid to the Participant’s surviving spouse, if any, or if none, to the Participant’s estate.
12. Amendment and Termination. The Board may amend or terminate the Plan at any time in whole or in part; provided, however, that no amendment or termination shall directly or indirectly reduce the balance of any deferred compensation or reduce the Deferred Stock Units credited to a Participant’s Account held hereunder as of the effective date of such amendment or termination; provided, further that no amendment or termination shall adversely affect the rights of a Participant to such Deferred Stock Units, without the consent of the Participant (or the Participant’s beneficiary in the event of the Participant’s death). Notwithstanding the foregoing, the Plan may be amended at any time, without the consent of any Participant (or beneficiary) if necessary or desirable, as determined by the Corporation, to comply with the requirements, or avoid the application, of Section 409A.
A termination of the Plan will not be effective to cause a deferral election in place under the Plan for the applicable year to be modified or discontinued prior to the end of such year, if such modification or discontinuation would violate Section 409A. The Board may terminate the Plan and provide for the acceleration and liquidation of all benefits remaining due under the Plan pursuant to Treas. Reg. § 1.409A-3(j)(4)(ix). If such a termination and liquidation occurs, all deferrals and credits under the Plan will be discontinued as of the termination date established by the Board, and benefits remaining due will be paid in a lump-sum at the time specified by the Board as part of the action terminating the Plan and consistent with Treas. Reg. § 1.409A-3(j)(4)(ix).
The Board may terminate the Plan other than pursuant to Treas. Reg. § 1.409A-3(j)(4)(ix). In the event of such other termination, all deferral and credits under the Plan will be discontinued as of the end of the Plan Year, but all benefits remaining payable under the Plan will be paid at the same time and in the same form as if the termination had not occurred - that is, the termination will not result in any acceleration of any distribution under the Plan.
13. General Provisions.
(a) Unfunded Plan. The Plan at all times shall be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Corporation for payment of any benefits hereunder. No Participant, beneficiary or any other person shall have any interest in any particular assets of the Corporation by reason of the right to receive a benefit under the Plan and any such Participant, beneficiary or other person shall have only the rights of a general unsecured creditor of the Corporation with respect to any rights under the Plan. All payments hereunder shall be made by the Corporation from its general assets at the time and in the manner provided for in the Plan. Nothing contained in the Plan shall constitute a guaranty by the Corporation or any other person or entity that the assets of the Corporation will be sufficient to pay any benefit hereunder.
(b) Non-Alienation of Benefits. Neither a Participant nor any other person shall have any rights to sell, assign, transfer, pledge, anticipate, or otherwise encumber the amounts, if any, payable under the Plan to the Participant or any other person. Any attempted sale, assignment, transfer or pledge shall be null and void and without any legal effect.
No part of the amounts payable under the Plan shall be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
(c) Code Section 409A. This Plan is subject to Section 409A and is intended to be maintained in compliance with Section 409A and the regulations thereunder applicable to nonqualified deferred compensation plans. To the extent any provision of this Plan does not satisfy the requirements of Section 409A or any regulations or other guidance issued by the Treasury Department or the Internal Revenue Service under Section 409A, such provision will be applied in a manner consistent with such requirements, regulations or guidance, notwithstanding any provision of the Plan to the contrary, and to the extent not prohibited by Section 409A, the provisions of the Plan and the rights of Participants and beneficiaries hereunder shall be deemed to have been modified accordingly. Each payment and benefit hereunder shall constitute a “separately identified” amount within the meaning of Treasury Regulation §1.409A-2(b)(2). The Committee, in its sole discretion shall determine the requirements of Section 409A that are applicable to the Plan and shall interpret the terms of the Plan in a manner consistent therewith. Under no circumstances, however, shall the Corporation or any affiliate or any of its or their employees, officers, directors, service providers or agents have any liability to any person for any taxes, penalties or interest due on amounts paid or payable under the Plan, including any taxes, penalties or interest imposed under Section 409A.
(d) No Stockholder Rights. Neither the Participant nor any other person shall have any rights as a stockholder of the Corporation with respect to the Deferred Stock Units credited to the Participant’s Account until the shares of Common Stock are issued to the Participant (or the beneficiary of the Participant).
(e) Severability. If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of the Plan, and the Plan shall be enforced as if the invalid provisions had never been set forth therein.
(f) Successors in Interest. The obligation of the Corporation under the Plan shall be binding upon any successor or successors of the Corporation, whether by merger, consolidation, sale of assets or otherwise, and for this purpose reference herein to the Corporation shall be deemed to include any such successor or successors.
(g) Governing Law; Interpretation. The Plan shall be construed and enforced in accordance with, and governed by, the laws of the State of Florida, without giving effect to principles of conflict of laws.
FARO Technologies, Inc. 2014 Incentive Plan
Deferred Stock Unit Award Agreement
Pursuant to the provisions of the FARO Technologies, Inc. 2014 Incentive Plan (as amended, the “Plan”) and the FARO Technologies, Inc. 2018 Non-Employee Director Deferred Compensation Plan (the “Deferred Compensation Plan”), you have elected to receive 100% of your (a) annual cash retainer for service on the FARO Board of Directors (the “Board”) earned and paid during 20[XX], and (b) other fees relating to your service as a chairperson or a member of the Board or any committee of the Board, as applicable, earned and paid during 20[XX] (collectively, the “20[XX] Director Fees”) in the form of deferred stock units that represent the right to receive shares of FARO’ common stock and defer settlement of such deferred stock units until such time as you experience a separation of service from FARO.
Grantee:
Grant Date:
Number of Deferred Stock Units Granted: 1
THIS DEFERRED STOCK UNIT AWARD AGREEMENT (this “Agreement”) evidences the grant of shares of deferred stock units by FARO Technologies, Inc., a Florida corporation (the “Company”), to the Grantee named above, on the date indicated above, pursuant to the provisions of the Plan and the Deferred Compensation Plan. For purposes of this Agreement, the Grantee shall be a Participant under the Plan and the Deferred Compensation Plan.
This Agreement, the Deferred Compensation Plan and the Plan contain the terms and conditions governing the deferred stock units. The parties hereto agree as follows:
1.Grant of Units. The Company hereby confirms the grant to Grantee, as of the Grant Date and subject to the terms and conditions in this Agreement and the Plan, of the number of Deferred Stock Units specified above (the “Units”). Each Unit represents the right to receive one share of the Company’s common stock.
2.Vesting. The Units are fully and immediately vested as of the Grant Date.
3.Tax Consequences. No shares will be delivered to Grantee in settlement of vested Units unless Grantee has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of the Shares.
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1 The number of deferred stock units to be credited to your account shall be determined by dividing (i) 100% of that portion of the 20[XX] Director Fees that otherwise would have been paid with respect to the applicable calendar quarter but for your election herein by (ii) the Fair Market Value of a share of FARO’s common stock as of the end of the first business day of the applicable calendar quarter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Grant Date.
FARO TECHNOLOGIES, INC.
By:_____________________
Name:
Title:
GRANTEE:
By:_____________________
Name:
FARO Technologies, Inc. 2014 Incentive Plan
Restricted Stock Unit Award Agreement
You have been selected to participate in the FARO Technologies, Inc. 2014 Incentive Plan (as amended, the “Plan”), as specified below:
Grantee:
Grant Date:
Number of Restricted Stock Units Granted:
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) evidences the grant of shares of restricted stock units by FARO Technologies, Inc., a Florida corporation (the “Company”), to the Grantee named above, on the date indicated above, pursuant to the provisions of the Plan. For purposes of this Agreement, the Grantee shall be a Participant under the Plan.
This Agreement and the Plan contain the terms and conditions governing the restricted stock units. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:
1.Grant of Units. The Company hereby confirms the grant to Grantee, as of the Grant Date and subject to the terms and conditions in this Agreement and the Plan, of the number of restricted stock units specified above (the “Units”). Each Unit represents the right to receive one Share of the Company’s common stock. Prior to their settlement or forfeiture in accordance with the terms of this Agreement, the Units granted to Grantee will be credited to an account in Grantee’s name maintained by the Company. This account shall be unfunded and maintained for book-keeping purposes only, with the Units simply representing an unfunded and unsecured contingent obligation of the Company.
2.Vesting; Forfeiture. The Units will vest in full the day prior to the Company’s next annual meeting of shareholders. If the Grantee’s service as a director of the Company ceases for any reason prior to the date the Units vests, the Units that has not yet vested as of the date of such cessation of service will be immediately forfeited without further consideration or any act or action by the Grantee; provided, however, if, prior to the date the Units have vested, the Grantee’s service as a director of the Company ceases as a result of death or disability (as determined by the Committee), the Committee, in its sole discretion, shall have the right to immediately vest all or any portion of such Units, subject to such terms as the Committee, in its sole discretion, deems appropriate.
3.Settlement.
a.Subject to the provisions of Section 3(b), after any Units vest pursuant to Section 2, the Company shall, as soon as practicable (but no later than the 15th day of the third calendar month following the vesting date), cause to be issued and delivered to Grantee (or to his or her personal representative or designated beneficiary or estate in the event of Grantee’s death, as applicable) one Share in payment and settlement of each vested Unit. Delivery of the Shares shall be effected by the issuance of a stock certificate to Grantee, by an appropriate entry in the stock register maintained by the Company’s transfer agent with a notice of issuance provided to Grantee, or by the electronic delivery of the Shares to a brokerage account Grantee designates, shall be subject to compliance with all applicable legal requirements as provided in Section 17 of the Plan, and shall be in complete satisfaction and settlement of such vested Units. The Company will pay any original issue or transfer taxes with respect to the issue and transfer of Shares to Grantee pursuant to this Agreement, and all fees and expenses incurred by it in connection therewith. If the Units that vest include a fractional Unit, the Company shall round the number of vested Units to the nearest whole Unit prior to issuance of Shares as provided herein.
b.If Participant has elected to defer the Units (“Deferred Units”) pursuant to the terms of the 2018 Non-Employee Director Deferred Compensation Plan (the “Director Deferred Plan”), after any Deferred Units vest pursuant to Section 2 the settlement of such Deferred Units shall be governed by the terms of the Director Deferred Plan and the Participant’s related deferral election.
4.Dividend Equivalents. If the Company pays cash dividends on its Shares while any Units subject to this Agreement are outstanding, then the Company shall credit, as of each dividend payment date, a dollar amount of dividend equivalents to Grantee’s account. The dollar amount of the dividend equivalents credited shall be determined by multiplying the number of Units credited to Grantee’s account pursuant to this Agreement as of the dividend record date times the dollar amount of the cash dividend per Share. Grantee’s right to receive such accrued dividend equivalents shall vest, and the amount of the accrued dividend equivalents shall be paid in cash, to the same extent and at the same time as the underlying Units to which the dividend equivalents relate vest and are settled, as provided in Sections 2 and 3 of this Agreement, provided however, that any dividend equivalents accrued on Deferred Units shall settle as provided in the Director Deferred Plan. No interest shall accrue on any unpaid dividend equivalents. Any dividend equivalents accrued on Units that are forfeited in accordance with this Agreement shall also be forfeited.
5. Nontransferability of Units. The Units may not be sold, transferred, assigned or otherwise alienated, encumbered or hypothecated by the Grantee, other than by will or the laws of descent and distribution or as otherwise expressly permitted pursuant to the Plan, until they are vested.
6.Powers of the Company Not Affected. The existence of this Award shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or prior preference stock senior to or affecting the Shares or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business or any other corporate act or proceeding, whether of a similar character or otherwise.
7.Interpretation by Committee. As a condition of the granting of the Units the Grantee agrees, for himself or herself and his or her legal representatives or guardians, that this Agreement shall be interpreted by the Committee and that any interpretation by the Committee of the terms of this Agreement and any determination made by the Committee pursuant to this Agreement shall be final, binding and conclusive.
8.Tax Consequences. No Shares will be delivered to Grantee in settlement of vested Units unless Grantee has made arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of the Shares.
9.Miscellaneous.
(a) This Agreement and the rights of the Grantee hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. In addition to the restrictions described herein, the Committee shall have the right to impose such restrictions on any Shares acquired pursuant to this Award as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under applicable federal and state tax law, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.
(b) It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Grantee.
(c) The Grantee agrees to take all steps necessary to comply with all applicable provisions of federal and state securities and tax laws in exercising his or her rights under this Agreement.
(d) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(e) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase of all or substantially all of the business and/or assets of the Company, or the result of a merger, consolidation or otherwise.
(f) The Company may, in its sole discretion, decide to deliver any documents related to current or future participants in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
(g) Except to the extent Participant has elected to defer the Units pursuant to the terms of the Director Deferred Plan, the award of Units as provided in this Agreement and any issuance of Shares or payment pursuant to this Agreement are intended to be exempt from Section 409A of the Code under the short-term deferral exception specified in Treas. Reg. § 1.409A-l(b)(4).
(h) To the extent not preempted by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Grant Date.
FARO TECHNOLOGIES, INC.
By:_____________________
Name:
Title:
GRANTEE:
By:_____________________
Name:
FARO TECHNOLOGIES, INC.
EXECUTIVE SEVERANCE PLAN
AND SUMMARY PLAN DESCRIPTION
(Effective February 14, 2019)
INTRODUCTION
The FARO Technologies, Inc. Executive Severance Plan (the “Plan”) is designated to provide separation pay to eligible employees following a qualified termination.
ELIGIBILITY AND PARTICIPATION
You become a Participant in the Plan when you meet all of the following criteria:
• | you are employed by FARO Technologies, Inc. or a participating affiliate (“the Company” or “FARO”) and on payroll in the United States; |
• | you are classified by the Company at the Senior Vice President level or above; |
• | you receive an official written notice from the Plan Administrator stating you are eligible to participate in this Plan; and |
• | you are not covered by an individual agreement or other plan that provides severance benefits (other than severance benefits in connection with a change in control of the Company). |
The business decisions that may result in you becoming eligible to participate in the Plan or to receive benefits under the Plan are decisions to be made by the Plan Administrator in its sole discretion.
Your participation ends when you are no longer eligible to receive any Plan benefits or when you no longer satisfy the requirements to participate in the Plan, as listed above. Individuals classified by FARO as contractors to FARO, leased employees or as any other non-employee status are not eligible to participate in the Plan, even if the person is later reclassified as an employee retroactively.
This Plan is intended to represent the exclusive severance benefits payable to a Participant by the Company. Accordingly, any Participant who is entitled to receive severance benefits payable in connection with a change of control of the Company pursuant to a change in control agreement or plan is prohibited from also receiving severance benefits under this Plan. In other words, a Participant may not collect severance benefits under this Plan if he or she receives benefits under a change in control agreement or plan between the Participant and the Company.
For purposes of this Plan, “For Cause,” as determined in the sole discretion of the Plan Administrator, is defined as (a) your failure to perform substantially your duties with the Company and/or any of its subsidiaries (excluding any such failure resulting from your disability) after a written demand for substantial performance is delivered to you by or on behalf of the Board of Directors of the Company (the “Board”) which identifies the manner in which the Board believes that you have not substantially performed your duties and providing you a minimum of 30 days to cure the identified deficiencies, (b) you engagement in illegal conduct or gross misconduct that is materially injurious to the Company or any of its subsidiaries, (c) your engagement in conduct or misconduct that materially harms the reputation or financial position of the Company or any of its subsidiaries, (d) your obstruction or impediment of, or failure to, materially cooperate with an investigation authorized by the Board (provided that you shall be given written notice and a reasonable opportunity to cure any alleged breach of this clause (d)), (e) your conviction of, or plea of nolo contondere to, a felony or of a crime involving fraud, dishonesty, violence or moral turpitude, (f) a finding of your liability in any SEC or other civil or criminal securities law action, (g) your committing of an act of fraud or embezzlement against the Company or any of its subsidiaries, (h) the Plan Administrator’s determination that you violated FARO’s Global Ethics Policy or committed other acts of misconduct, or violation of state or federal law relating to the workplace (including laws related to sexual harassment or age, sex or other prohibited discrimination); or (i) your acceptance of a bribe or kickback.
For purposes of this Plan, you will be considered to be disabled if you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or are, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the participant’s employer.
BENEFITS
If you are eligible, you will become a Participant and receive the benefits set forth in Schedule A (attached), only if you meet the criteria for payment set forth in this Plan.
As set forth in Schedule A, your benefits may be reduced, including by any amounts payable pursuant to the Worker Adjustment and Retraining Notification Act or any other legally imposed terms and conditions of employment under applicable federal, state or local statute, regulation or ordinance.
To receive benefits under the Plan, you must:
• | not voluntarily terminate your employment, resign or retire with or from the Company for any reason; |
• | be involuntarily terminated from the Company other than (a) For Cause, (b) as a result of a disability or death, or (c) through automatic termination due to an extended leave of absence; |
• | not have been offered a job with a company or organization that purchases (or has purchased) some or all of the operation in which you are employed, or is a direct or indirect successor in ownership or management of the operation in which you are employed; |
• | not have been offered a job with a third-party service provider to which your position with the Company has been outsourced; |
• | not have been transferred to or offered a job with a company or organization that is affiliated (directly or indirectly) with the Company; |
• | not be eligible to receive severance pay or benefits under any other severance plan or an individual agreement with the Company due to the termination (including severance benefits under a change in control agreement or plan); |
• | execute and deliver to the Company a complete a release of claims generally as described below and in the form provided to you by the Company following your notification of termination (the “Release”) and not revoke such Release; |
• | continue as a satisfactory employee until your termination date as determined by the Company in accordance with its needs; and |
• | abide by such other written terms and conditions as the Company may establish as a condition to participation in, or payment of benefits under, the Plan. |
RELEASE OF CLAIMS REQUIREMENT
You will not be eligible for Plan benefits unless you sign the Release after your employment with the Company actually terminates. You may obtain a copy of the current form of Release at any time by contacting the Plan Administrator. However, the Company will determine the contents of the Release and may revise it from time to time as appropriate to deal with particular severance situations. The Release that you will be required to sign to receive Plan benefits may differ from any agreement you previously received.
The Release will generally include provisions regarding return of Company property and other topics, including a release of all claims against the Company and its employees and its representatives. The Release may also include provisions regarding confidentiality, non-competition with the Company for a period of time after your employment terminates and non-solicitation of customers and/or employees.
Plan benefits will be paid only after your Release becomes effective and the rescission period has passed without your having revoked the Release. If you revoke the Release, Plan benefits will not be paid.
FORM AND TIMING OF BENEFIT
The cash severance benefits payable hereunder will be paid in a single lump sum cash payment, made as soon as administratively practicable following your date of termination and the date your Release has become irrevocable.
AMENDMENT AND TERMINATION
Although the Company expects to maintain the Plan indefinitely, the Company reserves the right to amend, modify or terminate this Plan at any time and for any reason. Therefore, entitlement to severance benefits under the Plan are not guaranteed and may be eliminated in the future in the sole discretion of the Company, except where benefits under the Plan have been provided or promised by FARO in a fully-executed and enforceable Severance Agreement and General Release made effective at the time of the employee’s termination of employment. Consideration provided by FARO under such a Severance Agreement and General Release, once fully executed and effective, shall not be subject to modification or termination unilaterally by FARO or the Plan Administrator.
NON-ALIENATION OF BENEFITS
No Plan benefit can be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or charged, and any attempt by any Participant or other person to do so will be void.
LEGAL CONSTRUCTION
This Plan is a severance welfare plan and shall be construed in accordance with the Employee Retirement Income Security Act of 1976, as amended (“ERISA”) and, to the extent not preempted by ERISA, with the laws of the State of Florida. All controversies, disputes, and claims arising under the Plan shall be submitted to the United States District Court of the Middle District of Florida.
ADMINISTRATION AND OPERATION OF THE PLAN
The Company is the “Plan Sponsor” and the “Plan Administrator” of the Plan as such terms are used in ERISA. However, the Company may designate any person or a committee as the fiduciary designated to administer the Plan. Until determined otherwise, the Plan Administrator shall be FARO’s Compensation Committee.
Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan. The responsibilities of the Plan Administrator under the Plan shall be carried out on its behalf by the Company’s directors, officers, employees and agents, acting on behalf or in the name of the Company in their capacity as directors, officers, employees and agents and not as individual fiduciaries. The Company or the Plan Administrator may delegate any of its fiduciary responsibilities under the Plan to another person or persons pursuant to a written instrument that specifies the fiduciary responsibilities so delegated to each such person.
The Plan Administrator has full and absolute discretion in the exercise of its authority under this Plan, including without limitation, the authority to determine any person’s right to benefits under the Plan, the correct amount and form of any benefits, the authority to decide any appeal, the authority to review and correct the actions of any prior compensation committee, and all of the rights, powers, and authorities specified in the Plan. Notwithstanding any provision of law or any explicit or implicit provision of this document, any action taken or ruling or decision made, by the Plan Administrator in the exercise of any of its powers and authorities under the Plan, shall be final and conclusive as to all parties, regardless of whether the Plan Administrator or one or more of its members may have an actual or potential conflict of interest with respect to the subject matter of the action, ruling, or decision. Thus, no final action, ruling, or decision of the Plan Administrator shall be subject to de novo review in any judicial proceeding and no final action, ruling, or decision of the Plan Administrator may be set aside unless it is held to have been arbitrary and capricious by a final judgment of a court having jurisdiction with respect to the issue. The Plan Administrator may engage the services of such persons or organizations to render advice or perform services with respect to its responsibilities under the Plan as it shall determine to be necessary or appropriate. Such persons or organizations may include (without limitation) attorneys, accountants and consultants.
BASIS OF PAYMENTS TO AND FROM THE PLAN
All benefits under the Plan shall be paid by the Company. The Plan shall be unfunded and benefits hereunder shall be paid only from the general assets of the Company.
WITHHOLDING TAXES
The Company may withhold from all payments to you pursuant to this Plan all taxes that are required to be withheld under applicable federal, state or local law, as determined by the Company in its sole discretion. You are responsible for all amounts due under federal, state or local laws as a result of receiving any benefits due under the Plan.
DENIAL OF BENEFITS/CLAIMS AND APPEAL PROCEDURES
If you are terminated, the Plan Administrator will notify you of your entitlement to severance benefits. If you are denied severance benefits, you may file a claim for benefits. Under normal circumstances, your claim will be decided by the Plan Administrator within 90 days (up to 180 days if special circumstances require a delay) of receipt of your claim. If your claim is denied for any reason, the Plan Administrator will notify you of its action and the reasons why, with specific references to the Plan provisions that apply. The Plan Administrator will also tell you how you can appeal the decision. If the Plan Administrator does not act upon your claim within 90 days (or 180 days, if notified of an extension by the Plan Administrator), your claim is deemed denied.
If your claim is denied in whole or in part, or the Plan Administrator does not act upon your claim within 90 days (or 180 days, if notified of an extension by the Plan Administrator), you may file an appeal with the Plan Administrator for a full and fair review of the denial of your claim. To do this, you must submit a written appeal to the Plan Administrator stating the reason you believe you are entitled to benefits. You should submit all written comments, documents, records and other information relating to your claim. You (or your duly authorized representative) shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to your claim. A decision on your appeal will be made not later than 60 days after receipt of a written request for review unless special circumstances require an extension of time for processing (such as the need to hold a hearing), in which event a decision should be rendered as soon as possible, but in no event later than 120 days after such receipt by giving you written notice indicating the special circumstances requiring the extension of time prior to the termination of the initial 60 day period. The decision on appeal shall be written and shall include specific reasons for the decision, with specific references to the pertinent Plan provisions on which the decision is based, a statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to your claim, and a statement of your right to bring an action under ERISA section 502(a).
In carrying out its responsibilities under the Plan, the Plan Administrator has full and final discretion to interpret the terms of the Plan and to determine eligibility for and entitlement to benefits in accordance with the terms of the Plan.
No legal action for benefits under the Plan shall be brought unless and until you have followed the appeal procedure set forth above and have your request for Plan benefits denied both initially and on appeal. No legal action for benefits under the Plan shall be brought after one year following the date your benefits under the Plan originally were denied or deemed denied.
OTHER PLAN INFORMATION
Plan sponsor and plan administrator: The Plan Sponsor is FARO Technologies Inc., and the Plan Administrator of the Plan is the Compensation Committee of the Company, each of which may be contacted at FARO Technologies, Inc., 250 Technology Park, Lake Mary, Florida 32746, (407) 333-9911. The Plan Administrator is the named fiduciary charged with responsibility for administering the Plan. Legal process may be served on the Company at this address.
Employer Identification Number: The Company’s Federal Employer Identification Number is 59-3157093.
ERISA: The Plan is a welfare benefit plan, providing for severance benefits.
Plan Number: 502
Plan Year: The Plan year is the calendar year. However, the first plan year is a short plan year starting on the effective date of the Plan and ending on December 31, 2019.
SECTION 409A OF THE CODE
The Plan and payments thereunder are intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that any payments under the Plan are deemed to be deferred compensation subject to Code Section 409A and if you are a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), payment of any amounts subject to Code Section 409A shall be delayed until the earlier of (a) the expiration of the six-month period measured from the date of the your “separation from service” (within the meaning of Code Section 409A) or (b) the date of your death. Upon the expiration of the applicable Code Section 409A delay period, all payments subject to and deferred pursuant to this paragraph shall be paid in a lump sum to you.
PLAN NOT A CONTRACT OF EMPLOYMENT
The Plan is not an employment contract and does not assure the continued employment with the Company of any employee covered by the Plan for any time or period. The Company reserves the right to terminate any employee at any time and for any reason.
STATEMENT OF ERISA RIGHTS
As a Participant in the Plan, you're entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:
Receive Information About Your Plan and Benefits
• | Examine, without charge, at the Plan Administrator's office and at other specified locations, such as worksites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series) filed for the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. |
• | Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description. The administrator may make a reasonable charge for the copies. |
Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of an employee benefit plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.
Enforcement of Your Rights
If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time periods.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, and you have exhausted the claims and appeal process for the Plan, you may file suit in a state or Federal court. If it should happen that Plan fiduciaries misuse the Plan's money, or if you're discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you're successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
Assistance with Your Questions
If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration (EBSA), U.S. Department of Labor, listed in your telephone directory, or at www.dol.gov/ebsa, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
US.121790221.01
SCHEDULE A
In exchange for a signed Severance Agreement and General Release, the following severance benefits will be paid to eligible Participants who are classified by the Company at the Senior Vice President level at the time of their covered termination under the FARO Technologies Inc. Executive Severance Plan:
1. | A single lump sum severance payment equivalent to twelve (12) months’ base pay; |
2. | If you are eligible for and you timely elect COBRA coverage following your termination of employment, the Company will pay the Company’s regular employer portion towards your COBRA premiums for any medical, dental and/or vision insurance coverage you elect to continue, based on your benefits plan elections in effect at the time of termination for up to twelve (12) months, or if earlier, the time period for which you are eligible for COBRA continuation. You will be required to pay the employee portion and after the end of the Company subsidy period, continuation under COBRA will be solely at your expense); and |
3. | Use of the Employee Assistance Plan provided by the Company for the subsidized COBRA period. |
The Company will set off on a pro-rata basis any severance pay amount in the event a Participant becomes re-employed by the Company during the 12 months following receipt of a severance payment under this Plan.
For purposes of the Plan, “base pay” means the regular annual rate of pay as in effect on your Termination Date which you are receiving as annual salary, excluding amounts: (i) received under short-term or long-term incentive or other bonus plans, regardless of whether or not the amounts are deferred, or (ii) designated by the Company as payment toward reimbursement of expenses.
These benefits may be reduced by any amounts payable pursuant to the Worker Adjustment and Retraining Notification Act or any other similar federal, state or local statute, regulation or ordinance. In addition, these benefits may be reduced by any amounts that you owe the Company or an affiliate, as determined by the Company. In addition, payments hereunder shall be delayed to the extent required to ensure the Participant is not subject to additional taxation under Section 409A.
NON-RESIDENTIAL TENANCY AGREEMENT
In Brescia, in the year 2017, on this 1st day of the month of July, this deed under private seal was entered into in triplicate for all legal effects and purposes
BETWEEN:
EREDI MARTINELLI MARMI E GRANITI S.p.A., a company with registered office at 5 Via Industriale, Rezzato (BS), Companies’ Register entry number and tax identification number 00023070170 and VAT number 00023070170, entered in the REA Brescia Economic and Administrative under number 118547, represented herein by its legal representative Luigi MARTINELLI, referred to herein as the “Landlord”,
And
OPTO-TECH S.R.L., a company based at 11 Via Pastrengo, Brescia, Companies’ Register entry and tax identification and VAT number 03373440985, entered in the REA Brescia Economic and Administrative under number 528779, represented herein by its legal representative by Matteo CAROCCI, tax identification number CRC MTT 72H01 B157B, referred to herein as the “Tenant”,
the parties agree that
ARTICLE 1
The Landlord will rent to the Tenant the portion of the premises located at 163/b Via Giacomo Matteotti, Rezzato (BS), namely:
• | Administrative offices, first floor, identified in the new territorial cadastre (NCT), sheet 23, cadastral parcel 7, sub-parcel 23, class A/10, Class 02, cadastral income EUR 557.77; |
that the Parties declare to know.
All the above documents as identified in the cadastral map signed by both parties and attached hereto form an integral part of this Agreement.
The premises are let in bulk and not by measure.
ARTICLE 2
The tenancy is for a fixed term of six years and is to run from 1st July 2017 to 30th June 2023, renewable for a further term of six years and in the procedures envisaged by Act 392/78 as amended.
ARTICLE 3
The annual rent amounts to EUR 6,000.00 (six thousand euros and zero cents) plus VAT, as agreed and accepted, is payable upon receipt of the relevant invoice in advance every month within the fifth day of the due date by bank transfer with a fixed value date.
It is
It is worth noting that the Landlord has opted for the non-VAT taxable regime as envisaged by Act 246/2006.
The Tenant shall not delay the payment of rent beyond the terms set forth by current provisions of law and shall only be entitled to undertake any actions or raise any exceptions unless the accrued rents have been duly paid.
ARTICLE 4
The property covered by this tenancy agreement is intended for use as a service artisan business, as envisaged by the Technical Regulations implementing the DMI-TMAG General Regional Plan attached hereto which, when signed by both Parties, form an integral part of this Agreement, being understood that the intended use must not be changed nor the property be sublet, wholly or partly, without the Landord’s written consent.
Pursuant to arts. 34, 35 and 37 of the same Act 392/78, the intended use excludes direct contact with the public, users and consumers, and the retail sale.
ARTICLE 5
The Tenant hereby declares to have inspected the let premises and found them fit for the intended use, free from defects that may affect the health of those carrying out an activity, in a good state of repair, and undertakes to return them on the expiry of the tenancy agreement in the same state, subject to normal wear and tear.
The tenant shall not make any additions to the premises that cannot be removed at any time without damaging the premises or any other innovation without the Landlord’ prior written consent. The Landlord is held harmless from any obligation and liability regarding any licences required by the competent authorities in connection with the specific activity carried out by the Tenant and any adaptation works.
ARTICLE 6
The Landlord declares that the property was built to a duly-granted building permit and the Landlord is allowed to inspect or have the property inspected at any time of the day, during the normal working hours.
ARTICLE 7
The Tenancy Agreement is governed by the provisions of Act no. 392 of 27/07/1978 as amended, namely those of Act no. 118 of 05/04/1985.
ARTICLE 8
The annual rent covered by Article 3 shall be reviewed and updated annually on the Landland’s request to reflect 100% of the changes made according to consumer price increases for factory and office workers (ISTAT Index) .
ARTICLE 9
The Tenant holds the Landlord harmless from any liability for direct or indirect damage caused by wilful or negligent act of other tenants in the building unit or any third parties.
The Landlord shall not be held liable for the discontinued provision of technological services, which goes beyond his control.
ARTICLE 10
The Tenant shall be responsible for ordinary maintenance operations, namely those relating to electric power, hydraulic, water, lighting, methane gas systems, bathroom appliances, door locks and keys, door and window hinges, wall and ceiling coverings and door and window frames, floor tiles and coverings, taps and fittings and domestic hot water and heating systems.
ARTICLE 11
The failure on the part of the Tenant to comply with any of the covenants included in this Agreement will cause its termination by law.
ARTICLE 12
The Tenant may withdraw from the Tenancy Agreement prior to its expiry date by giving the Landlord a six months’ prior notice pursuant to art. 27, subsection 7, of Act 392/1978.
This Tenancy Agreement must be registered by the Landlord and the registration fees will be equally shared between the Parties.
ARTICLE 13
The Landlord delivers on this same date one Energy Performance Certificate:
IDENTIFICATION CODE 17161 - 000199/10 EXPIRY DATE 27/09/2020
ARTICLE 14
All disputes arising out of or in connection with the interpretation, application and execution of this Tenancy Agreement shall, subject to matters relating to the Tenant’s failure to pay the rents, be settled amicably by a board of three arbitrators appointed by the President of the Court of Brescia. The arbitrators shall decide on equitable grounds, without formal proceedings, and the arbitration award will be final.
ARTICLE 15
As agreed with the Landlord, the Tenant is not required to pay any security deposit.
ARTICLE 16
The clauses of this Agreement are legally valid and binding on both Parties unless stated otherwise or changed by specific laws on tenancy, where applicable.
* * * * *
In witness whereof, the Parties have signed for acceptance all the above listed articles, none excepted.
Brescia, 1st July 2017
The Landlord
Eredi Martinelli Marmi e Graniti Spa
[signature illegible]
]
The Tenant
OPTO TECH Srl
[signature illegible]
Pursuant to arts. 1341 and 1342 of the Italian Civil Code, the Parties explicitly acknowledge arts. 2, 3, 4, 5, 6, 7, 8, 9,10, 11, 12, 13, 14, 15 and 16 of this Agreement, none excepted.
The Landlord
Eredi Martinelli Marmi e Graniti Spa
[signature illegible]
]
The Tenant
OPTO TECH Srl
[signature illegible]
Brescia Provincial Office Territory Cadastral Services Change of Use Receipt Notice | Date: 13/10/2014 Time: 9.42.32 Page 1 of 1 | ||
Building Land Registry Feedback code: 000A4XX78 | Municipality of REZZATO (Code: C3JZ) Unit for ordinary use no.: 1 Type of cadastral map:- Unit for special dedicated use no.: Communal Non-Transferrable goods no.: Reason for change: CHANGE FROM RESIDENTIAL TO OFFICE USE | Company: 1 of 1 Unit being changed no.: Unit being constituted no.: 1 Unit being suppressed no.: 1 | |
REAL ESTATE UNITS
Cadastral identification | Proposed classification data |
Prog. | Op. | Sheet | Number | Sub. | Location | ZC | Cat. | Cl. | Cons. | SupCat. | Cad. income | Rur | |
1 | S | 23 | 7 | 12 | |||||||||
2 | C | NCT | 7 | 23 | Via Matteotti G. no. 163/B, first floor | U | A10 | 02 | 3 | 75 | 557.77 | ||
Round seal illegible
Italian Revenue Agency Land Registry for Buildings Provincial Office of Brescia | Protocol declaration no. of Cadastral map of urban real estate unit Via Matteotti G. 163/B | |
Cadastral ID data: Section : NCT Sheet : 23 Parcel : 7 Sub-parcel: 23 | Prepared by: Augusto Berardi Entered in the Register of Surveyors Province of Brescia under no. 2822 | |
ENTRATEL ONLINE SERVICE FOR THE PRESENTATION OF TAX RETURNS
ACKNOWLEDGEMENT OF RECEIPT (art. 3, subsection 10, of Italian Presidential Decree no. 322/1998)
LIST OF DOCUMENTS ACQUIRED AND/OR REJECTED
RECEPTION PROTOCOL : 17071915182157053
FILE NAME : RLI12000000004014916
TYPE OF DOCUMENT : Registration of tenancy and lease agreements
DOCUMENTS ACQUIRED: 1
DOCUMENTS REJECTED : 0
Result Document protocol Tax Identification number Denomination
Acquired 000001 00023070170 ------------------
EXHIBIT 21.1
FARO TECHNOLOGIES, INC. LIST OF SUBSIDIARIES
Name | Jurisdiction of Organization | |
Antares-Desenvolvimento de Software, Lda. | Portugal | |
Cam2 SRL | Italy | |
Cam2 Sweden AB | Sweden | |
FARO Benelux BV | Netherlands | |
FARO Business Technologies India Pvt. Ltd | India | |
FARO Cayman LP | Cayman Islands | |
FARO Cayman Ltd | Cayman Islands | |
FARO Delaware LLC | Delaware | |
FARO Deutschland Holding GmbH | Germany | |
FARO Europe GmbH & Co. KG | Germany | |
FARO FHN Netherlands Holdings BV | Netherlands | |
FARO Japan Inc. | Japan | |
FARO Scanning GmbH | Germany | |
FARO Scanner Production GmbH | Germany | |
FARO 3D Software GmbH | Germany | |
FARO International (Shanghai) Co., Ltd | China | |
FARO Singapore Pte Ltd | Singapore | |
FARO Spain SL | Spain | |
FARO Swiss Holding GmbH | Switzerland | |
FARO Swiss Manufacturing GmbH | Switzerland | |
FARO Technology Polska sp.zo.o | Poland | |
FARO Turkey Olcu Sistemleri Ltd. Sti | Turkey | |
FARO Verwaltungs GmbH | Germany | |
FARO Technologies (Thailand) Ltd | Thailand | |
Faro Laser Trackers, LLC | Delaware | |
3D Measurement Technologies, S de RL de CV | Mexico | |
OOO FARO RUS | Russia | |
FARO Technologies UK Ltd. | United Kingdom | |
FARO Technologies do Brasil Ltda | Brazil | |
FARO Technologies Canada, Inc. | Canada | |
MWF-Technology GmbH | Germany | |
Moldware GmbH | Germany | |
Open Technologies SRL | Italy | |
Opto-Tech SRL | Italy | |
Laser Control Systems Limited. | United Kingdom | |
Photocore AG | Switzerland | |
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our reports dated February 20, 2019, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of FARO Technologies, Inc. on Form 10-K for the year ended December 31, 2018. We consent to the incorporation by reference of said reports in the Registration Statements of FARO Technologies, Inc. on Forms S-8 (File No. 333-160660, File
No. 333-197762 and File No. 333-226491).
/s/ GRANT THORNTON LLP
Orlando, Florida
February 20, 2019
EXHIBIT 31-A
FARO Technologies, Inc.
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Simon Raab, certify that:
1. I have reviewed this Annual Report on Form 10-K of FARO Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 20, 2019
/s/ Simon Raab
Name: Simon Raab
Title: President and Chief Executive Officer (Principal Executive Officer)
EXHIBIT 31-B
FARO Technologies, Inc.
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Robert Seidel, certify that:
1. I have reviewed this Annual Report on Form 10-K of FARO Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 20, 2019
/s/ Robert Seidel
Name: Robert Seidel
Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
EXHIBIT 32-A
FARO Technologies, Inc.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned President and Chief Executive Officer of FARO Technologies, Inc., (the Company), hereby certify that the Annual Report on Form 10-K for the year ended December 31, 2018 (the Report) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: February 20, 2019
/s/ Simon Raab
Name: Simon Raab
Title: President and Chief Executive Officer (Principal Executive Officer)
EXHIBIT 32-B
FARO Technologies, Inc.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Chief Financial Officer of FARO Technologies, Inc., (the Company), hereby certify that the Annual Report on Form 10-K for the year ended December 31, 2018 (the Report) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: February 20, 2019
/s/ Robert Seidel
Name: Robert Seidel
Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
EXHIBIT 99.1
FARO TECHNOLOGIES INC. PROPERTIES
No. | Location | Sq. Ft. | Owned/ Leased | Purposes | ||||
1 | 125 Technology Park, Lake Mary, Florida | 35,000 | Leased | Manufacturing, research and development, service | ||||
2 | 250 Technology Park, Lake Mary, Florida | 46,500 | Leased | Headquarters, sales, marketing, administration | ||||
3 | 290 National Road Exton, Pennsylvania | 90,400 | Leased | Manufacturing, research and development, service | ||||
4 | One Wall Street Suite 115, Hudson, NH 03051 | 21,400 | Leased | Manufacturing, research and development, service, sales | ||||
5 | Lingwiesenstrasse 11/2 70825 Korntal-Muenchingen BW, Germany | 105,300 | Leased | European headquarters, manufacturing, sales, research and development, service | ||||
6 | Wiesengasse 20 CH-8222 Beringen Switzerland | 15,900 | Leased | Manufacturing | ||||
7 | Unit 1° Great Central Way Butlers Leap Rugby Warwickshire CV21 3Xh, Great Britain | 12,700 | Leased | Sales, service | ||||
8 | 716 Kumada Nagakute-shi, Aichi 480-1144, Japan | 15,900 | Leased | Sales, service | ||||
9 | 188 Pingfu Road, Shanghai, China | 24,700 | Leased | Sales, service | ||||
10 | No. 3 Changi South St 2 #01-01 Xilin Districentre Building B, Singapore | 22,000 | Leased | Asia headquarters, manufacturing, sales, service | ||||
11 | 215 Avenida Centuria, Parque Indutrial, Apodaca, Nuevo Leon 66600 - Mexico | 36,000 | Leased | Sales, service | ||||
12 | Via Giancomo Matteotti, 161, 25086 Rezzato BS | 21,420 | Leased | Manufacturing, research and development, service, sales | ||||