Exhibit
      10.1

     

    CONSULTING
      AGREEMENT

    


    This
      Agreement is by and between John J. Garber (“Consultant”) and Perceptron, Inc.
      (“Company”) and is effective on the date of the last signature below (“Effective
      Date”).

    


    Consultant
      has expressed to the Company his desire to retire in 2007. Based on this
      intention, effective January 19, 2007, Consultant will resign as the Company’s
      Vice President - Finance and Chief Financial Officer. Pursuant to the terms
      and
      conditions of this Agreement, the Company desires to obtain Consultant’s
      services as needed until December 31, 2007 to facilitate with the transition
      of
      his job functions to other individuals. Therefore, in consideration of the
      mutual promises, covenants, and conditions contained in this Agreement, the
      sufficiency of which is hereby acknowledged, the parties agree as
      follows:

    


    1. 
Services
      and Payment.
      Consultant agrees to undertake and complete as requested the Services (as
      defined in Exhibit A) in accordance with and on the schedule specified in
Exhibit
      A.
      As the
      only consideration due Consultant regarding the subject matter of this
      Agreement, Company will pay Consultant in accordance with Exhibit
      A.

    


    2. 
Ownership;
      Rights; Proprietary Information; Publicity.

    


    a. 
Company
      will own all right, title and interest (including patent rights, copyrights,
      trade secret rights, mask work rights, trademark rights, sui
      generis database
      rights and all other intellectual and industrial property rights of any sort
      throughout the world) relating to any and all inventions (whether or not
      patentable), works of authorship, mask works, designations, designs, know-how,
      ideas and information made or conceived or reduced to practice, in whole or
      in
      part, by Consultant in connection with the Services or any Proprietary
      Information (as defined below) (collectively, “Inventions”) and Consultant will
      promptly disclose and provide all Inventions to Company. Consultant hereby
      makes
      all assignments necessary to accomplish the foregoing ownership. Consultant
      shall further assist Company, at Company’s expense, to further evidence, record
      and perfect such assignments, and to perfect, obtain, maintain, enforce and
      defend any rights assigned. Consultant hereby irrevocably designates and
      appoints Company as his agents and attorneys-in-fact to act for and in
      Consultant’s behalf to execute and file any document and to all other lawfully
      permitted acts to further the foregoing with the same legal force and effect
      as
      if executed by Consultant.

    


    b. 
Consultant
      agrees that all Inventions and all other business, technical and financial
      information (including, without limitation, the identity of and information
      relating to customers or employees) Consultant develops, learns or obtains
      in
      connection with Services or that are received by or for Company in confidence,
      constitute “Proprietary Information.” Consultant will hold in confidence and not
      disclose or, except in performing the Services, use any Proprietary Information.
      However, Consultant shall not be obligated under this paragraph with respect
      to
      information Consultant can document is or becomes readily publicly available
      without restriction through no fault of Consultant. Upon termination and as
      otherwise requested by Company, Consultant will promptly return to Company
      all
      items and copies containing or embodying Proprietary Information, except that
      Consultant may keep his personal copies of its compensation records and this
      Agreement.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    c. 
As
      additional protection for Proprietary Information, Consultant agrees that during
      the period over which he is (or is supposed to be) providing Services and for
      one year thereafter (i) Consultant will not encourage or solicit any employee
      or
      consultant of Company to leave Company for any reason and (ii) Consultant will
      not engage in any activity that is in any way competitive with the business
      or
      demonstrably anticipated business of Company, and Consultant will not assist
      any
      other person or organization in competing or in preparing to compete with any
      business or demonstrably anticipated business of Company.

    


    d. 
If
      any
      part of the Services or Inventions is based on, incorporates or is an
      improvement or derivate of, or cannot be reasonably and fully made, used,
      reproduced, distributed and otherwise exploited without using or violating
      technology or intellectual property rights owned or licensed by Consultant
      and
      not assigned hereunder, Consultant hereby grants Company and its successors
      a
      perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable
      right and license to exploit and exercise all such technology and intellectual
      property rights in support of Company’s exercise or exploitation of the
      Services, Inventions, other work performed hereunder, or any assigned rights
      (including any modifications, improvements and derivatives of any of
      them).

    


    3. 
Warranty.
      Consultant warrants that: (i) the Services will be performed in a professional
      and workmanlike manner and that none of such Services or any part of this
      Agreement is or will be inconsistent with any obligation Consultant may have
      to
      others; (ii) all work under this Agreement shall be Consultant’s original work
      and none of the Services or Inventions or any development, use, production,
      distribution or exploitation thereof will infringe, misappropriate or violate
      any intellectual property or other right of any person or entity (including,
      without limitation, Consultant); and (iii) Consultant has the full right to
      allow Consultant to provide the Company with the assignments and rights provided
      for herein.

    


    4. 
Termination.
      If
      either party materially breaches a material provision of this Agreement, the
      other party may terminate this Agreement upon 10 days’ notice unless the breach
      is cured within the notice period. Company also may terminate this Agreement
      at
      any time, with or without cause, upon 10 days’ notice, but, if (and only if)
      without cause, Company shall upon termination pay Consultant all unpaid amounts
      due for Services completed prior to notice of termination. Sections 2 (subject
      to the limitations on Section 2.c. stated therein) through Section 8 of this
      Agreement and any remedies for breach of this Agreement shall survive any
      termination or expiration. Company may communicate such obligations to any
      other
      (or potential) client or employer of Consultant.

    


    
      
         

      

      
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    5. 
Relationship
      of the Parties.
      Notwithstanding any provision hereof, for all purposes of this Agreement each
      party shall be and act as an independent contractor and not as partner, joint
      venturer, or agent of the other and shall not bind nor attempt to bind the
      other
      to any contract. Consultant is an independent contractor and is solely
      responsible for all taxes, withholdings, and other statutory or contractual
      obligations of any sort, including, but not limited to, Workers’ Compensation
      Insurance; and Consultant agrees to defend, indemnify and hold Company harmless
      for any and all claims, damages, liability, attorneys’ fees and expenses on
      account of (i) an alleged failure by Consultant to satisfy any such obligations
      or any other obligation (under this Agreement or otherwise) or (ii) any other
      action or inaction of Consultant. If Consultant is a corporation, it will ensure
      that its employees and agents are bound in writing to Consultant’s obligations
      under this Agreement.

    


    6. 
Assignment.
      This
      Agreement and the services contemplated hereunder are personal to Consultant
      and
      Consultant shall not have the right or ability to assign, transfer, or
      subcontract any obligations under this Agreement without the written consent
      of
      Company. Any attempt to do so without the written consent of Company shall
      be
      void.

    


    7. 
Notice.
      All
      notices under this Agreement shall be in writing, and shall be deemed given
      when
      personally delivered, or three days after being sent by prepaid certified or
      registered U.S. mail to the address of the party to be noticed as set forth
      herein or such other address as such party last provided to the other by written
      notice.

    


    8. 
Miscellaneous.
      Any
      breach of Section 2 or 3 will cause irreparable harm to Company for which
      damages would not be an adequate remedy, and, therefore, Company will be
      entitled to injunctive relief with respect thereto in addition to any other
      remedies. The failure of either party to enforce its rights under this Agreement
      at any time for any period shall not be construed as a waiver of such rights.
      No
      changes or modifications or waivers to this Agreement will be effective unless
      in writing and signed by both parties. In the event that any provision of this
      Agreement shall be determined to be illegal or unenforceable, that provision
      will be limited or eliminated to the minimum extent necessary so that this
      Agreement shall otherwise remain in full force and effect and enforceable.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Michigan without regard to the conflicts of laws provisions thereof.
      In
      any action or proceeding to enforce rights under this Agreement, the prevailing
      party will be entitled to recover costs and attorneys fees. Headings herein
      are
      for convenience of reference only and shall in no way affect interpretation
      of
      the Agreement.

     

    

      
        	
                John
                  J. Garber (Consultant)

              	
                Perceptron,
                  Inc. (Company)

              
	 	 
	
                /s/
                  John J. Garber      1/5/07

              	
                By:
                  /s/ A.A. Pease     
                  1/5/07        
                  

              
	
                 

              	
                      
                  Alfred A. Pease, President

              
	
                Address:
                  47827 Halyard Drive

              	
                      
                  47827 Halyard Drive

              
	
                Plymouth,
                  MI 48170

              	
                      
                  Plymouth, MI 48170

              


      

    

     

     

    
      
         

      

      
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    EXHIBIT
      A

    


    SERVICES

    


    Until
      December 31, 2007, upon forty-eight hours notice by the Company, Consultant
      will
      be available Monday through Friday, 8:00 a.m. to 5:00 p.m., to the Company
      by
      phone and/or in person in the Company’s Plymouth headquarters, if necessary,
      related to any issues or questions involving his prior position as Vice
      President - Finance and Chief Financial Officer of the Company.

    


    Consultant
      will be paid a fee of (i) $100.00 for each hour or (ii) $500.00 for each day
      of
      work payable within thirty (30) days after receipt of an invoice detailing
      the
      hours or days worked. Consultant understands that he will not be entitled to
      any
      benefits (health, dental, life, disability, vacation, etc.), unless specifically
      stated below, provided by Company to its employees.

    


    Consultant
      will be entitled to expense reimbursement in accordance with the Company’s
      normal procedures. Consultant is to submit all expenses to the Company’s
      President, for his approval.

    


    Consultant
      will be entitled to three weeks of earned vacation time and therefore
      Consultant’s last day on the Company’s payroll will be February 9,
      2007.

    


    Stock
      Options: Upon approval of this Agreement by the Management Development,
      Compensation and Stock Option Committee of the Board of Directors, all existing
      stock options that have not vested will immediately vest. Consultant will have
      until December 31, 2007 to exercise any vested stock options.

     

     

    
      
         

      

      
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