Faro Technologies, Inc.

Compensation Committee Charter

 

MISSION STATEMENT

 

The Company’s executive compensation program is administered by the Compensation Committee of the Board, which has responsibility for all aspects of the compensation program for the executive officers of the Company include those who have attained the title of Vice President or above.  The Compensation Committee’s primary objective with respect to executive compensation is to establish programs that attract and retain key managers and to ensure alignment of executive compensation with the Company’s overall business strategies, values, and performance. Pay for Performance is a key element of Faro’s pay philosophy and programs.

 

ORGANIZATION

 

·         The Committee shall be comprised of two or more directors as determined by the Board

·         All members of the Committee shall meet the general independence requirements of the Nasdaq Stock Market, Inc. (“Nasdaq”) and any applicable rules and regulations of the Securities and Exchange Commission (the “SEC”)

·         The Committee shall meet as frequently as circumstances dictate

·         The members of the Committee shall be appointed by the Board annually or as necessary to fill vacancies

·         The Chairperson of the Committee shall be appointed by the Board

·         The Chairperson will chair and set the agenda for Committee meetings; provided that in the Chairperson’s absence, the Chairperson’s responsibilities may be undertaken by another member of the Committee

·         Any member of the Committee may call meetings of the Committee

 

ROLES AND RESPONSIBILITIES

 

The Compensation Committee's primary responsibility is to assure that the senior executives of the Company and its subsidiaries are compensated effectively in a manner consistent with the stated compensation strategy of the Company, internal equity considerations, competitive practice, and the requirements of the appropriate regulatory bodies.

More specifically, the Compensation Committee shall be responsible for the following:

·         Review from time to time and approve the Company's stated compensation strategy to ensure that management is rewarded appropriately for its contributions to Company growth and profitability and that the Company's executive compensation strategy supports organization objectives and shareholder interests.

·         Review annually and determine the individual elements of total compensation for the Chief Executive Officer and Executive Vice President consistent with the Company's compensation strategy and objectives.

·         Assure that the Company's annual and long-term bonus and incentive compensation plans are administered in a manner consistent with the Company's compensation strategy as to participation, target annual incentive awards, corporate financial goals, actual awards paid to senior management, and total funds reserved for payment under the compensation plans.

·         Make recommendations to the Board with respect to incentive compensation plans and equity-based plans and approve, subject, where appropriate, to submission to shareholders, all new equity-related incentive plans for senior management.

·         If appropriate, hire experts in the field of executive compensation to assist the Compensation Committee with its reviews.

·         Such other duties and responsibilities (i) as may be assigned to the Compensation Committee, from time to time, by the Board of Directors of the Company and/or the Chairman of the Board of Directors, (ii) as set forth in the By-Laws of the Company, or (iii) as designated in the plan documents of any Company plan.

 

MEETING SCHEDULE

 

Each year, during the third quarter, the Compensation Committee meets with the Vice President of Human Resources who presents all relevant information for review and approval by the Board. 

 

REPORTING RESPONSIBILITIES

 

Report regularly to the Board (a) following meetings of the Committee, (b) with respect to such other matters as are relevant to the Committee’s discharge of its responsibilities and (c) with respect to such recommendations as the Committee may deem appropriate, which report may take the form of an oral report by the Committee’s Chairperson or any other member of the Committee designated by the Committee to make such report

 

OTHER AUTHORITY AND RESOURCES

 

The Compensation Committee may conduct or authorize investigations into or studies of matters within the Compensation Committee's scope of responsibilities, and may retain, at the Company's expense, such independent counsel or other advisers as it deems necessary. The Compensation Committee shall have the sole authority to retain or terminate a compensation consultant to assist the Compensation Committee in carrying out its responsibilities, including sole authority to approve the consultant's fees and other retention terms, such fees to be borne by the Company