Exhibit 10.1
faroimagea02.jpg [faroimagea02.jpg] FARO Technologies
250 Technology Park, Lake Mary, FL 32746
Tel: +1.407.333.9911 | Toll Free: 800.736.0234 Nasdaq: FARO
Fax: +1.407.333.4181www.FARO.com

July 11, 2019
Mr. Allen Muhich
12620 SW Winterview Dr.
Portland, OR 97224-0701
    
RE: Offer of Employment
Dear Allen,
We are pleased to extend to you a conditional offer of employment as Chief
Financial Officer (“CFO”) for FARO Technologies, Inc. (“FARO” or the “Company”)
based at our Company headquarters in Lake Mary, Florida. This letter will serve
to set forth the terms of our offer which, if accepted, remains subject to
ratification by the Company’s Compensation Committee.
If you accept our offer, we propose a start date of July 26, 2019 (the “Start
Date”), conditioned upon your completion of a satisfactory reference check,
satisfactory in-depth background investigation and satisfactory drug screening
and your counter-signing and returning this offer letter and our Patent &
Confidentiality Agreement and Non-Competition Addendum. Copies of the Agreement
and Addendum are enclosed for your review and consideration. We reserve the
right to rescind our employment offer should you refuse to consent to a
background check for employment purposes, should we determine that the results
of your check are inconsistent with our hiring criteria for the CFO role, should
you refuse to sign the enclosed documents, or should the Compensation Committee
fail to ratify the terms of this offer.
Management and Position
Presuming the conditions for your offer are met, your employment with FARO will
be “at-will”, which means that your employment will not be for any fixed term
and that both you and the Company both retain the absolute right to terminate
your employment at any time, with or without cause or notice. The at-will nature
of your employment relationship may only be modified, altered or changed through
a written agreement signed by the Company’s President and CEO, Michael Burger.
Verbal statements by any of FARO’s officers, employees or other representatives
will not, in any way, be effective to amend our conditional offer or otherwise
guarantee employment with the Company for any specific period of time or on any
specific terms.
In your position, you will report directly to Michael Burger, President and CEO,
and will have the duties, responsibilities and authority customarily associated
with the position. While you are employed, it is expected that you will devote
substantially all of your full professional time and best professional efforts
to FARO’s business and will not engage in any activities that compete with the
Company in any way. The Company also expects that you will, at all times, adhere
to its professional standards and comply with all of its policies, practices and
procedures, including but not limited to those policies prohibiting harassment
and discrimination (including sexual harassment), protecting confidential
business information, and governing the use of the Company’s information
systems.

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Compensation and Benefits
Annual Base Salary and Exempt Status
Your annual base salary shall be $371,000.00 paid bi-weekly as it is earned on
FARO’s regularly-scheduled pay dates, which may be direct deposited or tendered
by check in accordance with your request. Your employment with the Company will
be full-time. Your position is considered exempt from the overtime pay and
minimum wage requirements of applicable federal and state law, which means you
will be expected to report to the office as scheduled during our regular
business hours and as otherwise reasonably necessary to fulfill your job duties
and meet other business needs but will not be eligible to earn overtime
compensation for any hours you work in excess of forty (40) in any given
workweek.
Health and Welfare Benefits
Upon commencement of employment, you will be eligible to participate in and
receive benefits under the welfare benefit plans, policies, programs and
practices provided by the Company as those are available to all other executive
employees based in the United States. Benefit coverage is established by FARO
policies and practices, governing plan documents and any necessary approval of
the Board of Directors. Further information concerning these plans, policies,
programs and practices will be issued to you by FARO upon your Start Date.
Benefit costs may vary depending on when in the plan year the date of hire
occurs (FARO’s benefit year begins on March 1st and ends on February 28th or
29th as applicable). FARO reserves its right to at any time to amend, modify,
add-to or discontinue any and all benefits offered, in accordance with
applicable law.
Paid Time Off
You are eligible to take Paid Time Off after completion of your introductory
period, which is initially set for ninety (90) days but may be extended one or
more times at the Company’s discretion. The PTO calendar runs from March 1 to
February 28 (or February 29) each year. From your Start Date until the end of
the current PTO year, you will be granted 13 days of PTO together with 1
floating holiday for the 2019-2020 benefit year. On March 1, 2020, you will
receive 23 days of PTO together with 2 floating holidays for the 2020-2021
benefit year. Scheduling, approval, tracking and other provisions concerning the
use of PTO is governed by the Company’s PTO Policy. You will additionally be
granted other time off (such as for holidays, sick days, etc.) in accordance
with law and applicable Company policies.
Signing Bonus
The Company will pay you a one-time signing bonus equal to $200,000.00 (the
“Signing Bonus”), in a single lump sum in cash within thirty (30) calendar days
of your Start Date; provided that, you will be required to repay the net value
of the Signing Bonus if you voluntarily resign from your employment before the
second anniversary of your Start Date or are terminated by the Company for
“Cause” within that same time period. For purposes of this offer, “Cause” means,
as determined by the Company: (i) your failure to perform your duties with the
Company, following a written demand for substantial performance within thirty
(30) days from service thereof and failure to cure the identified deficiencies,
(ii) you engage in illegal conduct or gross misconduct that is materially
injurious to the Company or any affiliate, (iii) you engage in conduct or
misconduct that materially harms the reputation or financial position of the
Company or any affiliate, (iv) you are convicted of, or plead nolo contendere to
a felony or to a crime involving fraud, dishonesty, violence or moral turpitude,
(v) you are found liable in any SEC or other civil or criminal securities law
action, (vi) you commit an act of fraud or embezzlement against the Company or
any affiliate, or (vii) you accept a bribe or kickback.

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Initial Equity Grant
Upon commencement of employment, you will be granted restricted stock units with
a target value of $1,000,000.00. This initial equity grant will be comprised of
a combination of performance-vesting restricted stock units and time-vesting
restricted stock units, in a ratio of 50% and 50%, respectively. The grant will
be subject to the terms and conditions applicable to performance-vesting
restricted stock units and time-vesting restricted stock units granted under the
Company’s existing long-term incentive plan, as amended from time to time (the
“Plan”), along with the applicable forms of award agreements. 
Relocation Summary
Relocation will be facilitated by NEI Global Relocation. As part of the
relocation assistance, FARO will provide direct reimbursement of the real estate
agent’s commission (capped at 7%) and customary, non-recurring home sale closing
costs, up to a combined total of $50k. Please refer to the summary program
policy for all other information. You will be able to access the NEI website
once you have accepted the position. We would expect you to relocate by the end
of 2021. NOTE: Should you voluntarily leave FARO prior to 12 months from the
date of your relocation, you must repay a prorated portion of all relocation
expenses incurred, including all Company tax liabilities. Your signature below
will confirm that you have read and understood the terms and conditions of the
Relocation Assistance offered by FARO, including all limitations.
Incentive, Savings and Retirement Plans
During your employment, you will be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs available to all
other executive employees of the Company based in the United States. Without
limiting the foregoing, the following shall apply:
a)
for the annual performance period ending December 31, 2019 and continuing
annually throughout your employment thereafter, in accordance with the Company’s
Short Term Incentive Plan you will be eligible to receive a cash bonus based
upon the achievement of performance goals established by the Compensation
Committee of the Board and agreed upon by you, with a target bonus of sixty-five
percent (65%) of your Base Salary; provided that any annual bonus for fiscal
year 2019 awarded to you shall be a prorated amount of the annual bonus that
would have been paid for full-year fiscal 2019 based on the number of days you
are employed by the Company during the fiscal year. You must be employed by the
Company on the last day of the fiscal year to which a bonus relates in order to
earn a bonus for that year. Any bonus awarded to you will be paid within two and
one-half months (2½) after the end of the performance period to which it
relates.

b)
beginning with the annual performance period ending December 31, 2020 and
thereafter continuing throughout your employment, you will be eligible for
annual grants under the Company’s long-term incentive plan or plans of
stock-based awards based upon the achievement of performance goals established
from year to year by the Compensation Committee of the Board, with a target
value initially of $600,000.00. Grants are expected to be awarded as a
combination of performance-vesting restricted stock units and time-vesting
restricted stock units, in a ratio of 50% and 50%, respectively. Nothing in this
letter requires the Board to make grants of restricted stock units or other
awards in any year or to make grants of any specific types of awards or in any
certain amount or ratio. Vesting of such grants or awards will be governed by
the terms of the Company’s long-term incentive plan or plans of stock-based
awards, as the same are in effect and/or amended by the Company from time to
time.

    
Expense Reimbursement
You will receive prompt reimbursement for all reasonable business expenses you
incur during the course of performing your duties and responsibilities for the
Company, in accordance with the policies, practices and procedures of the
Company generally available to executive employees of the Company based in the
United States and subject to change from time to time.

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Severance Pay
In the event of your termination of employment without Cause, you will be
eligible to receive severance pay in accordance with the terms of the Company’s
Executive Severance Plan, provided that you sign, return and do not revoke a
release agreement in a form prepared by the Company. The terms of the Company’s
Executive Severance Plan may be amended from time to time, in the Company’s sole
discretion, and shall be controlling.
Beginning of Employment, Verification of Eligibility to Work and Employment Tax
Withholdings
On your first day of employment, please report to Katrona Tyrrell, Chief People
Officer.
In accordance with the Immigration Reform and Control Act of 1986, it is
necessary that you provide verification of employment status. Please be prepared
to provide documentation per page 5 of the U.S. Citizenship and Immigration
Services Form I-9 on your first day of employment. A copy of Form I-9 can be
found at https://www.uscis.gov/i-9. In order to assure that you are paid
promptly, you will also need to complete a W-4 form.
All onboarding paperwork, including payroll forms, will be done online through
the Workday portal. Please log onto Workday throughout the new hire process to
complete onboarding tasks as soon as they become available to you. This prevents
unnecessary delays to your employment with FARO.
Performance Management
Minimum performance expectations for all positions must be achieved and will be
monitored on a regular ongoing basis. If you do not maintain established
performance standards and/or successfully complete relevant training, you will
be subject to FARO's Performance Improvement/Disciplinary Action Process as
applied to all employees. Changes in compensation may or may not coincide with
your performance reviews and may occur from time-to-time in FARO’s sole
discretion. Any compensation changes will depend upon a number of things
including but not limited to your work performance and responsibilities, FARO’s
financial performance, and the general economic environment.
Additional Contingencies
You are responsible for evaluating and ensuring freedom from any non-compete or
other restrictive covenants you may have with any previous employers. If a
dispute arises between you and a previous employer, FARO may take any steps it
deems necessary, up to and including termination of your employment, to protect
the Company.
This offer letter supersedes and replaces all conversations or other
correspondence on this matter.
We are looking forward to having you as part of the FARO team and believe that
this offer provides you an exciting and unique professional opportunity! Should
you have any questions about the Company or regarding this offer, please contact
Katrona Tyrrell at 407-562-5020.

Kindly note that, for planning purposes, we will be unable to hold this
conditional employment offer open for you beyond three business days of the date
written above. A signed copy of this letter must be received by FARO within that
time frame, or the offer will become invalid and be automatically rescinded.
Sincerely,
/s/ Michael Burger
Michael Burger
President and Chief Executive Officer

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Acknowledgement
I hereby accept FARO’s conditional offer of employment at-will on the terms set
forth above, which I understand must be ratified by the Company’s Compensation
Committee to be effective. I understand that, should my employment offer be
confirmed, I am not guaranteed employment for any period of time and that the
terms, conditions and benefits of my employment are subject to change in the
Company’s sole discretion with or without Cause or notice. I also understand
that should I refuse to sign the Patent & Confidentiality Agreement and
Non-Competition Addendum the Company provided or consent to a background check,
reference check and drug screening for employment purposes, or should the
results of that check be inconsistent with the hiring criteria for the role for
which I applied, the Company’s conditional offer of employment to me will be
rescinded.

/s/ Allen Muhich                        Date: July 15, 2019
Allen Muhich