Document:

Document

                                    Exhibit 10.6

Hasbro, Inc. 

Performance Rewards Program
 
January 1, 2022

Hasbro, Inc.

Performance Rewards Program

1.0Background

1.1    Performance Rewards Program (“PRP”)

						
		▪Establishes standard criteria to determine PRP eligibility and overall company or business objectives.  

		
		▪Provides guidelines for the establishment of target incentive awards.  

		
		The following describes the various plans that are funded pursuant to the PRP.  

▪Corporate Plan - Funding under the PRP for eligible employees identified pursuant to Section 1.5 is based on performance of Hasbro, Inc. and its subsidiaries (the “Company”). 

▪Business Area Plans - Funding under the PRP for eligible employees identified pursuant to Section 1.5 will be based on the performance of the applicable business area of the Company.  For purposes of this document, each of the following is referred to as “Business Area:” the Consumer Products reporting segment, the Entertainment reporting segment and the Wizards of the Coast and Digital Gaming reporting segment (“Wizards”), and the following other business units: Commercial, Digital Licensing, Family Brands, Film & TV, Licensed Consumer Products, PULSE, Round Room Live, and Secret Location.

		

▪Performance objectives and goals are established to measure performance achievement and may be based on one or more of the following: Net Revenues; Operating Profit Margin and Free Cash Flow for Company performance; and Net Revenues and Operating Profit Margin for Business Area performance.

1.2    Purpose 
The Company has established this PRP for the purpose of providing annual incentive compensation to those employees who contribute significantly to the growth and success of the Company’s business; to attract and retain, in the employ of the Company, individuals of outstanding ability; and to align the interests of employees with the interest of the Company’s shareholders.

1.3     General Guideline
No employee has any legal entitlement to participate in the PRP or to receive an incentive award under the PRP.
    

1.4    Scope
The PRP is applicable to eligible employees of the Company.

    1.5    Eligibility
Management shall determine, in its sole discretion, those employees whose duties and responsibilities contribute significantly to the growth and success of the Company’s 
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business and are eligible to participate in the PRP. Eligibility to participate in the PRP does not guarantee the receipt of an incentive award under the PRP. Unless otherwise required by law or determined by management, if an employee is eligible to participate in the PRP and/or any other annual incentive (or similar) plan implemented from time to time by the Company, such employee may only participate in one plan at the same time, as determined by the Company in its sole discretion. 

Eligible employees will be assigned to the Corporate Plan or a Business Area Plan for an employee’s applicable Business Area, in each case at the Company’s sole discretion. Eligible employees selected to participate in either the Corporate Plan or one of the Business Area Plans are referred to herein as “participants.”

2.0    Incentive Award Levels

    2.1    Target Incentive Award
        Except as otherwise determined by the Company, target incentive awards are expressed as a percentage of earned salary for the PRP year. For purposes of this PRP, earned salary means all base compensation for the participant for the fiscal year, which base compensation shall include all base compensation amounts deferred into the Company’s retirement savings plan (but excluding any matching or Company contributions made to such plan on the participant’s behalf), the Company’s Non-Qualified Deferred Compensation Plan and/or any similar successor plans for the fiscal year and excludes, where allowed by law, any bonus or other benefits, other than base compensation, for the fiscal year. By design, the target incentive awards are the award levels that PRP participants are eligible to earn when they, the Company or their applicable Business Area achieve their financial goals and objectives. Target incentive awards may be determined by job level, previously determined percentage of base salary, or a previously determined fixed percentage or amount. Target incentive awards may also vary by region or Business Area.  
    
    2.2    Maximum Incentive Award
Under the PRP, the maximum incentive award for participants below job level 80 is 200% of the target incentive award. The maximum incentive award for employees in a job level 80 or above is 300% of the target incentive award.

3.0Measures of Performance
•PRP funding for the Corporate Plan is based 100% on Company performance.  
•PRP funding for each of the Business Area Plans is based 80% on the applicable Business Area performance and 20% on Company performance.  

    3.1    Establishing Company or Business Area Performance Metrics and Targets
        In the first quarter of the PRP year, the Company’s senior management will establish performance metrics and the level of target performance for the year associated with each of the performance metrics for the Corporate Plan and the various Business Area Plans. Those performance metrics and target levels are reviewed and approved by the Company’s Chief Executive Officer (“CEO”) and, with respect to the Corporate Plan, by the Company’s Board of Directors (“Board”) or the Compensation Committee of the Board (the “Compensation Committee”).

    3.2    Company Performance Metrics
Company performance is measured by Net Revenue, Operating Profit Margin and Free Cash Flow. Company performance is determined by individually assessing performance against goals for each metric, applying the performance scale, weighting each metric and summing the total. 

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    The weightings and definitions of the Company metrics are:

									
	Metric	Definition	Weighting
	Net Revenue	Third Party Gross Sales (after returns) less Sales Allowances plus Third Party Royalty Income, Digital Gaming Revenue, Film & TV Programming and Production & Distribution Revenue	40%
	Operating Profit Margin	Operating Profit divided by Net Revenues	40%
	Free Cash Flow	Net cash provided by operating activities less Capital Expenditures	20%

    3.3    Business Area Performance Metrics
Each Business Area will assess performance based on Net Revenue and Operating Profit Margin specific to the respective Business Area.  Business Area performance is determined by individually assessing performance against goals for each metric, applying the performance scale, weighting each metric and summing the total.  

    The weightings and definitions for the metrics for each Business Area Plan are:

									
	Metric	Definition	Weighting
	Business Area Net Revenue	As applicable for the respective Business Area: Third Party Gross Sales (after returns) less Sales Allowances plus Third Party Royalty Income, Digital Gaming Revenue and Film & TV Programming Production and Distribution Revenue	50%
	Business Area Operating Profit Margin	Operating Profit divided by Net Revenues	50%

4.0Development of Funding Pools 
After the end of the fiscal year, the actual performance for the Company and each of the Business Areas will be calculated (based on the Company’s and the respective Business Area’s performance against the target goals established for each performance metric as of fiscal year-end) and approved by the Company’s Chief Financial Officer.  

The performance scales for the metrics for the Corporate Plan and Business Area Plans, as applicable, are as follows: 
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Revenue Performance Scale:
        Performance % of Target    Funding Pool Scale %     
                < 85%                                     0%                        
                85%                                        50%                      Threshold performance
                100%                                     100%                     Target performance
                ≥115%                                   200%                     Maximum performance
                                
                Operating Profit Margin Performance Scale:
          Performance % of Target     Funding Pool Scale %     
                < 80%                                     0%                        
                80%                                        50%                      Threshold performance
                100%                                     100%                     Target performance
                ≥125%                                   200%                     Maximum performance

Free Cash Flow Performance Scale:
        Performance % of Target    Funding Pool Scale %     
                < 80%                                     0%                        
                80%                                        50%                      Threshold performance
                100%                                     100%                     Target performance
                ≥125%                                   200%                     Maximum performance

In the event that achievement for a performance metric is between threshold performance and target performance or between target performance and maximum performance, the applicable funding pool scale percentage will be determined by linear interpolation between threshold performance and target performance or between target performance and maximum performance, as applicable.

In the case of the Corporate Plan, the applicable performance metric must achieve threshold performance or no award is payable under that metric before the performance scale is applied to the applicable metric.  The failure of one metric to achieve threshold performance does not impact the other metrics; provided, however, that for funding to occur at least one metric must achieve threshold performance.  In the case of the Business Area Plans, both performance metrics must achieve at least threshold performance or no award is payable for the Business Area component of the respective Business Area Plan.

The payout attributable to each performance metric will be weighted and added to arrive at the overall achievement which determines the funding pool. 

An illustrative example of the development of a funding pool for the Corporate Plan and the Company component of the Business Area Plans is as follows:

If the Company achieves Net Revenue of 100% of target (which results in 100% funding) and Operating Profit Margin of 80% of target (which results in 50% funding) but Free Cash Flow does not reach threshold performance, then the aggregate weighted achievement for the Corporate Plan would be 60%, calculated as follows:

(100% x 40%) + (50% x 40%) + (0% x 20%) = 60%
    
In this scenario, the Company component for each of the respective Business Area Plans would be 12%, calculated as follows:

(60% x 20%)  = 12%

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Illustrative examples of the development of a funding pool for the Business Area component of a Business Area Plan are as follows:

If the applicable Business Area achieves Revenue of 100% of target (which results in 100% funding) and Business Area Operating Profit Margin of 65% of target (which is below the 80% threshold), the Business Area component of the respective Business Area Plan will not fund (0% funding).  In this scenario, the funding pool, if any, will be determined solely by the Company component of the Business Area Plans.   

                               or 

If the applicable Business Area achieves Revenue of 100% of target (which results in 100% funding), and Operating Profit Margin of 80% of target (which results in a 50% funding), the aggregate weighted achievement for the Business Area component of the respective Business Area Plan would be 75%, calculated as follows: 

(100% x 50%) + (50% x 50%) = 75%

Once all Business Area results have been calculated, the funding pool of each respective Business Area component is developed. The Business Area component funding pool for each of the Business Areas (weighted at 80%), combined with the Company component funding pool (weighted at 20%), will equal the aggregate of the PRP funding pool for the respective Business Area Plan.  

4.1    Funding Pools
The Company calculates the Corporate Plan funding pool based on the Company’s performance through the end of the fiscal year against the applicable performance targets (“Corporate Plan Funding Pool”).  The Company calculates the funding pool for the Business Area Plans based on the Company’s performance and the performance of each Business Area through the end of the fiscal year against the applicable performance targets for the respective Business Area (the “Business Area Funding Pool” refers to the aggregate pool for all Business Area Plans and, together with the Corporate Plan Funding Pool, is referred to hereinafter as the “Funding Pool”).

Although the CEO and the Compensation Committee reserve the right to alter the Funding Pool after year end, but prior to the actual payment of awards to participants in the PRP, it is expected that such discretion will only be exercised in rare or extreme circumstances, and that generally the Funding Pool, as it has been computed, will be paid (absent any affirmative exercise of this discretion) to the participants in the PRP collectively following the end of the fiscal year.

4.2    High Performer Pool
    Following the end of the year, but prior to the payment of all awards under the PRP, management of the Company, in its sole discretion, may determine it appropriate to reward high-performing Company employees through an additional funding pool (the “High Performer Pool”).   Funding of the High Performer Pool is determined by the achievement of the Company’s Operating Profit, overall Company or reporting segment performance and affordability. The aggregate amount of the High Performer Pool is subject to Compensation Committee approval.  
    
    4.3    Total Awards Under the PRP
The aggregate of all incentive awards under the PRP shall consist of the sum of the Funding Pool and the High Performer Pool.

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4.4.    Management Review
Payment of any incentive award to an employee is subject to management’s review.  For purposes of the PRP, management has the ability to review the proposed payout of any incentive award under the PRP to an eligible employee and to determine whether such proposed incentive award should be adjusted based on the participant’s performance, contributions to the organization, or any other factor not prohibited by applicable law. In completing this review, management has the option of providing a zero value incentive award to the employee regardless of Company or Business Area performance. For participants that do not receive an incentive award or that receive a reduced incentive award, the portion of such employee’s potential incentive award that might have been reflected in the Funding Pool will remain in the Funding Pool and be allocated to other PRP participants in the manner determined by management. 

5.0    Removals, Transfers, Terminations, Promotions and Hiring Eligibility
    Except to the extent applicable legal requirements or the terms of an employment agreement mandate a different result, the following scenarios will be addressed under the PRP in the manner set forth below.

    5.1    Participants whose employment with the Company is terminated because of retirement or disability:

						
		▪After the close of the PRP year, but prior to the actual distribution of incentive awards for such year, may be awarded an incentive award for the plan year at the discretion of the Chief Human Resource Officer. For any such participant who is not given an incentive award, the portion of such person’s potential incentive award that might have been reflected in the Funding Pool will remain in the Funding Pool and be allocated to PRP participants in the manner determined by management.

▪After the beginning, but prior to the close of the PRP year, no award shall be granted unless authorized at the discretion of the Chief Human Resource Officer.

    5.2    Participants whose employment with the Company is terminated because 
        of death:

						
		▪After the close of the PRP year, but prior to the actual distribution of awards for such year, shall be awarded an incentive award. Such payment will be made to the deceased employee’s estate.

		
		▪After the beginning, but prior to the close of the PRP year, no award shall be granted unless authorized at the discretion of the Chief Human Resource Officer. Any such payments will be made to the deceased employee’s estate.

    5.3    Participants who resign for any reason after the close of the PRP year, but prior to the distribution of incentive awards for such year, will not receive an incentive award.  For any such employee, the portion of such person’s potential incentive award that might have been reflected in the Funding Pool will remain in the Funding Pool and be allocated to PRP participants in the manner determined by management.

    5.4    Participants who are discharged from the employ of the Company or any 
        of its subsidiaries for cause or for any offense involving moral turpitude or 
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an offense involving breach of the fiduciary duty owed by the individual to the Company will not be entitled to an incentive award for any PRP year. For any such employee, the portion of such person’s potential incentive award that might have been reflected in the Funding Pool will remain in the Funding Pool and be allocated to PRP participants in the manner determined by management.

    5.5    Participants who are discharged from the employ of the Company or any of its subsidiaries due to any reason other than the ones enumerated above, including, without limitation, employees who are discharged due to job elimination: 
            
						
		▪After the close of the PRP year, but prior to the actual distribution of incentive awards for such year, may be awarded an incentive award. No award shall be granted unless authorized at the discretion of the Chief Human Resource Officer. For any such employee who is not given an incentive award, the portion of such person’s potential incentive award that might have been reflected in the Funding Pool will remain in the Funding Pool and be allocated to PRP participants in the manner determined by management.

		
		▪After the beginning, but prior to the close of the PRP year, the employee is no longer eligible for that year. However, a discretionary incentive award may be granted by the Chief Human Resource Officer.  

		

    5.6    Participants under statutory or contractual notices as may be required by applicable law:

						
		▪At the end of the fiscal year, may be awarded an incentive award for the PRP year. Except as may be required by applicable law, no award shall be granted unless authorized at the discretion of the Chief Human Resource Officer. For any such employee who is not given an incentive award, the portion of such person’s potential incentive award that might have been reflected in the Funding Pool will remain in the Funding Pool and be allocated to PRP participants in the manner determined by management.

		
		▪Which ends prior to the close of the PRP year, shall not be eligible for an incentive award for that plan year. However, a discretionary incentive award may be granted by the Chief Human Resource Officer.

    5.7    Participants transferred during the PRP year from one division of the Company to another where such transfer results in the participant being assigned to different plans during the same PRP year (e.g., from the Corporate Plan to a Business Area Plan; from a Business Area Plan to the Corporate Plan; or from a Business Area Plan to a different Business Area Plan), will be eligible to receive an incentive award (subject to achievement of the requisite performance) through the plan associated with such employee’s position at the end of the PRP year, but the award amount may be based on the performance of the respective plans associated with the employee’s positions during the same PRP year, in such amount and in such manner as determined in the sole discretionary of the Chief Human Resource Officer.

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    5.8    Employees hired during the PRP year must be actively employed on or before October 1st or another date designated by the Chief Human Resource Officer of the PRP year to participate in the PRP for that PRP year. Incentive awards will be made based upon the employee's earned salary during the period of their employment with the Company during the PRP year.
        

    5.9    The eligibility for an incentive award under the PRP for employees who remain employed with the Company during the PRP year but whose change in employment status through promotion or reclassification affects their level of participation:

						
		▪Prior to October 1st or another date designated by the Chief Human Resource Officer, of the PRP year, will participate at the level consistent with the promotion or reclassification.

		▪After October 1st or another date designated by the Chief Human Resource Officer, but prior to the close of the PRP year, will participate at the level consistent with their classification prior to the promotion or reclassification.

    5.10    The eligibility for an incentive award under the PRP for employees who remain employed with the Company during the PRP year but whose change in employment status through demotion affects their level of participation will be determined in the sole discretion of the Chief Human Resource Officer.

6.0    Administration of the PRP

    6.1    Amendments to the PRP (Contingency Clause)
The CEO and the Compensation Committee reserve the right to interpret, amend, modify, or terminate the PRP in accordance with changing conditions at any time in their sole discretion.

    6.2    Incentive Award Distribution
        Incentive awards, when payable, shall be paid as near to the close of the Company’s fiscal year as may be feasible. In furtherance of the preceding sentence, any incentive awards under the PRP will be paid no later than the date allowable to ensure tax deductibility in the year of accrual, which in the case of the United States is two and a half months after the fiscal year end.  Participants in the PRP must be employed at the time of award distribution in order to receive an incentive award, except as otherwise provided herein.

                    No individual has the right to receive an incentive award until it has been approved and distributed in accordance with the provisions of the PRP.

    6.3    Non-Assignment of Awards
        Participants eligible to receive incentive awards shall not have any right to pledge, assign, or otherwise dispose of any unpaid or projected awards.

    6.4    Deferral of Awards
Participants eligible to defer incentive awards through the Deferred Compensation Program (DCP) may elect to do so during the annual DCP enrollment.  

6.5       Clawback of Awards            
By accepting any incentive award under the Plan, the participant hereby acknowledges and agrees that any incentive compensation the participant is awarded is subject to the Hasbro, Inc. Clawback Policy, as it may be amended from time to 
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time by the Board.  Such acknowledgement and agreement is a material condition to receiving any incentive award under the Plan, which would not have been awarded to the participant otherwise.  
 
6.6    Stock Ownership 
    Additionally, the participant acknowledges and agrees that if the participant is now, or becomes subject in the future to, the Hasbro, Inc. Executive Stock Ownership Policy, as it may be amended from time to time by the Board (the “Stock Ownership Policy”), then the receipt of any incentive award under the PRP is contingent upon the participant’s compliance with the terms of the Stock Ownership Policy, including without limitation, the requirement to retain an amount equal to at least 50% of the net shares received as a result of the exercise, vesting or payment of any equity awards granted until the Participant’s applicable requirement levels are met. Failure to comply with the Stock Ownership Policy may, in the Company’s sole discretion, result in the reduction or total elimination of any incentive award that otherwise might be payable under the PRP and/or result in the Company determining to substitute other forms of compensation, such as equity, for any award the participant otherwise might have received under the PRP. 

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SEVERANCE AGREEMENT AND GENERAL RELEASE

This Severance Agreement and General Release (this “Agreement”) dated this 21st day of April 2022, is entered into by and between FARO Technologies, Inc. (the “Company”), and Kevin Beadle (“Executive”).

Recitals

WHEREAS, in connection with Executive’s separation from the Company, and in order to promote a smooth and amicable transition of duties, the Company has decided to offer the separation compensation and other consideration described herein, conditioned upon Executive’s compliance with the terms and conditions described in this Agreement.

NOW THEREFORE, in consideration of the promises and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Agreement

1) Separation. Executive’s last date of employment with the Company shall be April 29, 2022 (the “Separation Date”). Executive hereby resigns from any and all officer, director, employee, consultant, service provider or equivalent positions that Executive may hold or be deemed to hold with the Company, effective as of the Separation Date.

2) Consideration. Contingent upon: (i) Executive’s execution of this Agreement and this Agreement becoming irrevocable and effective; (ii) Executive’s compliance with the terms of this Agreement; (iii) Executive behaving professionally and complying with all workplace policies between the date of this Agreement and the Separation Date; and (iv) Executive reaffirming the terms of this Agreement including the release so that it covers the period between the date of this Agreement and the Separation Date by signing and returning the Certificate attached as Exhibit A hereto after the Separation Date but no later than seven days after the Separation Date, the Company agrees to pay Executive the following consideration (the “Separation Compensation”):

(a) A lump sum payment equal to Executive’s current base salary in the amount of $310,000, which shall be made within thirty (30) days following Certificate Effective Date (as defined in Exhibit A below);

(b) Executive’s health insurance benefits with the Company shall continue on the same terms and conditions through the Separation Date, and cease to be effective at the conclusion of the Separation Date. Following the Separation Date, in the event that Executive chooses to exercise his rights under COBRA to continue his participation in the Company’s health insurance plan, the Company shall directly pay the premium for Executive and his covered dependents through the earlier of (A) April 30, 2023, or (B) the date 

Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s) (the “Subsidized COBRA Period”), provided that if the Company determines that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act) or incurring an excise tax, then, in lieu of the foregoing benefit, a taxable amount equal to each remaining Company subsidy payment will thereafter be paid to Executive in substantially equal monthly installments. Should the Executive or covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s), Executive must notify the Company immediately regardless if Executive has elected to enroll in such coverage. Per the terms of this Agreement, the COBRA subsidy will cease when Executive becomes eligible under another employer’s plan(s). 

(c) Executive shall have use of the Employee Assistance Plan provided by the Company during the Subsidized COBRA Period; and

(d) An additional lump sum payment equal to $255,000, which shall be made within thirty (30) days following Certificate Effective Date (as defined in Exhibit A below).

3) General Release and Covenant Not to Sue. In return for the Separation Compensation described in Section 2, Executive fully and forever discharges and releases the Company, its subsidiaries and affiliates, and each of their respective officers, directors, managers, employees, agents, attorneys and successors and assigns (collectively, the “FARO Companies”) from any and all claims or causes of action, known or unknown, for relief of any nature, arising on or before the date of this Agreement, which Executive now has or claims to have or which Executive at any time prior to signing this Agreement had, against the FARO Companies, including, but in no way limited to: any claim arising from or related to Executive’s employment by FARO or the termination of Executive’s employment with FARO, including but not limited to any claim under the Age Discrimination in Employment Act (“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 1981, the Americans With Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”), the Employee Retirement Income Security Act (“ERISA”), the Equal Pay Act (“EPA”), the Occupational Safety and Health Act (“OSHA”), the Florida Civil Rights Act, Florida Civil Rights Act (§§ 760.01 to 760.11, Fla. Stat.), Florida Whistleblower Protection Act (§§ 448.101 to 448.105, Fla. Stat.), Florida Workers' Compensation Retaliation provision (§ 440.205, Fla. Stat.), Florida Minimum Wage Act (§ 448.110, Fla. Stat.), Article X, and Section 24 of the Florida Constitution (Fla. Const. art. X, § 24); Texas Labor Code (specifically including the Texas Payday Law, the Texas Anti-Retaliation Act, Chapter 21 of the Texas Labor Code, and the Texas Whistleblower Act) and any and any and all other local, state, and federal law claims arising under statute or common law. Executive further represents that he has not assigned to any other person any of such claims, and that he has the full right to grant this release. It is agreed that this is a general release and it is to be broadly construed as a release of all claims, except those that cannot be released by law. By signing this Agreement, Executive acknowledges that he is doing so knowingly and 

voluntarily, that he understands that he may be releasing claims he may not know about, and that he is waiving all rights he may have had under any law that is intended to protect him from waiving unknown claims.

4) Protected Disclosures. Nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with any federal, state or local governmental agency or commission (a “Government Agency”). In addition, nothing contained in this Agreement limits Executive’s ability to communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including Executive’s ability to provide documents or other information, without notice to the Company, nor does anything contained in this Agreement apply to truthful testimony in litigation. If Executive files any charge or complaint with any Government Agency and if the Government Agency pursues any claim on Executive’s behalf, or if any other third party pursues any claim on Executive’s behalf, Executive waives any right to monetary or other individualized relief (either individually, or as part of any collective or class action); provided that nothing in this Agreement limits any right Executive may have to receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission.

5) No Admission of Liability. The signing of this Agreement, the payment of the Separation Compensation, and the conferring of any other consideration upon Executive is not an admission by the Company of fault or potential liability on the part of the Company. Rather, this Agreement is entered into in an effort to provide Executive with a separation package and to end the parties’ employment relationship on an amicable basis. Executive agrees that neither this Agreement nor any of its terms shall be offered or admitted into evidence or referenced in any judicial or administrative proceedings for the purpose or with the effect of attempting to prove fault or liability on the part of the Company, except as may be necessary to consummate or enforce the express terms of this Agreement.

6) Announcement to Employees and Third Parties. Both Executive and the Company agree to announce Executive's separation from the Company as a voluntary retirement. Executive and the Company agree to represent to employees, customers, and other third parties, unless otherwise required by law or process, that Executive is voluntarily retiring as of the Separation Date.

7) Confidentiality and Non-Disparagement. Executive remains subject to the obligations set forth in the Intellectual Property & Confidentiality Agreement and Non-Competition Addendum dated December 17, 2019 (the “Restrictive Covenant Agreement”). Executive hereby reaffirms his obligations under Restrictive Covenant Agreement, the terms of which are incorporated herein by reference. Executive agrees not to make any disparaging statements concerning the Company, its parent, or any of their affiliates, services, products, or current or former officers, directors, shareholders, employees or agents. This obligation extends to and includes statements on social media and any other medium.

8) Return of Property. Executive agrees that within one (1) day following the Separation Date, Executive will have returned all Company business records and 

property, including as applicable all financial files, notes, computers, cell phone, keys, contracts, employee records, files, correspondence, thumb drives, or the like containing information which was provided by the Company or obtained as a result of Executive’s employment relationship with the Company.

9) Future Assistance. In partial consideration for receiving the Separation Compensation, Executive agrees that he will reasonably cooperate and make himself reasonably available to the Company in the event his assistance is needed to locate, understand, or clarify work previously performed by his or other work-related issues relating to his employment. Executive further agrees, upon the Company’s request, to cooperate, assist and make himself reasonably available to the Company or its attorneys, on an as-needed basis, to provide information related to the Company in connection with any matter of which Executive had personal knowledge or involvement during the term of employment with the Company. This may include, but is not limited to, making himself reasonably available to provide information to the Company’s attorneys, providing truthful and accurate sworn testimony in the form of deposition, affidavit and/or otherwise requested by the Company or providing testimony to government agencies.

10) Taxes. All payments under this Separation Agreement shall be reduced by any applicable tax withholdings. It is intended that the benefits provided under this Separation Agreement shall comply with the provisions of Section 409A of the Internal Revenue Code (“Section 409A”) or qualify for an exemption to Section 409A, and this Separation Agreement shall be construed and interpreted in accordance with such intent. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

11) Miscellaneous.

a) Executive shall pay all damages (including, but not limited to, litigation and/or defense costs, expenses, prejudgment interest, and reasonable attorneys’ fees) incurred by the Company as a result of Executive’s material breach of this Agreement. The Company shall pay all damages (including, but not limited to, litigation and/or defense costs, expenses, prejudgment interest, and reasonable attorneys’ fees) incurred by Executive as a result of the Company’s material breach of this Agreement.

b) Executive agrees that the Company shall have no other obligations or liabilities to him except as provided herein. This Agreement shall be construed as a whole in accordance with its fair meaning and the laws of the State of Florida. Any dispute under this Agreement shall be adjudicated by a court of competent jurisdiction in the 

state or federal courts of Orange County, Florida. Except as otherwise provided for herein, this Agreement constitutes the entire agreement between the Company and Executive on the matters described herein and it shall not be modified unless in writing and executed by a duly authorized officer of the Company. The provisions of this Agreement are severable and if any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision.

c)  EXECUTIVE ACKNOWLEDGES THAT HE VOLUNTARILY ENTERS INTO THIS AGREEMENT WITH A FULL AND COMPLETE UNDERSTANDING OF ITS TERMS AND LEGAL EFFECT. EXECUTIVE REPRESENTS THAT HE WAS ADVISED TO CONSULT WITH AN ATTORNEY ABOUT THE PROVISIONS OF THIS AGREEMENT BEFORE SIGNING BELOW.

d)  Executive further represents that by entering into this Agreement, Executive is not relying on any statements or representations made by the Company, its officers, directors, agents, or employees, which are not specifically incorporated in this Agreement; rather, Executive is relying upon Executive’s own judgment and the advice of Executive’s attorney, if applicable.
 
e)  The offer embodied in this Agreement shall remain open and capable of acceptance by Executive until May 2, 2022 after which time the offer shall be revoked. Executive acknowledges that he has been given at least 21 calendar days from the date of this Agreement to accept the terms of this Agreement, although he may accept it at any time within those 21 days. After Executive executes this Agreement, Executive will still have an additional 7 days in which to revoke his acceptance. To revoke, Executive must notify the Company’s CEO in writing delivered via hand delivery or certified mail, return receipt requested, and the Company’s CEO must receive such written notification before the end of the 7-day revocation period. If Executive does not execute this Agreement within the 21-day period, or if he timely revokes this Agreement during the 7-day revocation period, this Agreement will not become effective and he will not be entitled to the Separation Compensation provided for in Section 2 above, and he will return to the Company any and all Separation Compensation already received by him under this Agreement.

f) This Agreement may not be revoked at any time after the expiration of the 7-day revocation period referenced in Section 11(e) above. This Agreement is not intended to and shall not affect the right of Executive to file a lawsuit, complaint or charge that challenges the validity of this Agreement under the Older Workers Benefit Protection Act, 29 U.S.C. §626(f), with respect to claims under the ADEA. Executive agrees, however, that, with the exception of an action to challenge his waiver of claims under the ADEA, if he ever attempts to make, assert or prosecute any claim(s) covered by the General Release and Covenant Not to Sue in Section 3, he will, prior to filing or instituting such claim(s), return to the Company any and all the Separation Compensation payments already received by him under this Agreement, plus interest at the highest legal rate, and, with the exception of an action to challenge his waiver of claims under the ADEA, if the Company prevails in defending the enforceability of any portion of the Agreement or in defending itself against any such claim, he will pay the Company’s attorneys’ fees and costs incurred 

in defending itself against the claim(s) and/or the attempted revocation, recession or annulment of all or any portion of this Agreement.

g) The rights and obligations of the Company under this Agreement shall inure to the benefit of, and shall be binding upon the successors and assigns of the Company and by this Section 11(g), Executive expressly consents to the Company’s right to assign this agreement. This Agreement cannot be assigned by Executive.

h) Except for those agreements specifically preserved herein, this Agreement sets forth the entire agreement between the parties concerning the termination of Executive’s employment with the Company and supersedes any other written or oral promises concerning the subject matter of this Agreement.

i) This Agreement may be signed in counterparts or transmitted by electronic means, but shall be considered duly executed if so signed by the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year indicated below.

FARO TECHNOLOGIES, INC.

			
	By: /s/ Michael D. Burger
	Its: President & CEO  
	Date: April 11, 2022

			
	By: /s/ Kevin Beadle
	Date: April 21,2022

EXHIBIT A

CERTIFICATE UPDATING RELEASE OF CLAIMS

           I, hereby acknowledge and certify that I entered into a Severance Agreement and General Release with FARO Technologies, Inc. (the “Company”), dated this 21st day of April 2022 (the “Agreement”). Capitalized but undefined terms in this Certificate are defined in the Agreement. Pursuant to the Agreement, I am required to sign this “Certificate,” which updates the release of claims in the Agreement, in order to receive the severance benefits described in the Agreement. For this Certificate to become effective and for me to receive such severance benefits, I must sign this Certificate after the Separation Date but no later than seven days after the Separation Date. I will not sign this Certificate before the Separation Date. Subject to the foregoing, the date I sign this Certificate is the “Certificate Effective Date.” I further agree as follows:

1.A copy of this Certificate was attached as an Exhibit to the Agreement.
2.In consideration of the benefits described in the Agreement, for which I become eligible only if I sign this Certificate, I hereby extend the release of claims set forth in the Agreement to any and all claims that arose after the date I signed the Agreement through the date I signed this Certificate, subject to all other exclusions and terms set forth in the Agreement. 
3.I have carefully read and fully understand all of the provisions of this Certificate, I knowingly and voluntarily agree to all of the terms set forth in this Certificate, and I acknowledge that in entering into this Certificate, I am not relying on any representation, promise or inducement made by the Company or its officers, directors, employees, agents or other representatives with the exception of those promises expressly contained in this Certificate and the Agreement. 
4.I also represent that I have not been subject to any retaliation or any other form of adverse action by the released parties for any action taken by me as an employee or resulting from my exercise of or attempt to exercise any statutory rights recognized under federal, state or local law. I agree that I have been paid all unpaid wages and other compensation owed to me as of the Separation Date. I also agree that none of my rights have been violated under any statute, common law or Company policy, program or agreement. I represent that I have reported any and all workplace injuries that I suffered during my employment, if any, to the Company before executing this Certificate.
5.I agree that this Certificate is part of the Agreement. 
Accepted and Agreed:

________________________________________
            Kevin Beadle

__________________________
Date

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