UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
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Date
of Report (Date of earliest event reported)
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November
17, 2005
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FARO
Technologies, Inc.
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(Exact
name of registrant as specified in its charter)
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Florida
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0-23081
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59-3157093
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(State
or other jurisdiction of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer Identification
No.)
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125
Technology Park, Lake Mary, Florida
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32746
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(407)
333-9911
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(Former
name or former address, if changed since last report.)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions (see General Instruction A.2. below):
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o
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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ITEM
1.01 Entry
into a Material Definitive Agreement
On
November 11, 2005, the Compensation Committee of the Board of Directors of
FARO
Technologies, Inc. (the "Company") approved the acceleration of vesting of
all
unvested and "out-of-the-money" stock options previously awarded to its
employees and other eligible participants under the Company's Stock Plans
with
exercise prices equal to or greater than the closing price on November 11,
2005
of $19.18 per share. The acceleration of vesting will be effective for stock
options outstanding as of November 11, 2005. There were approximately 596,710
shares for which the vesting was accelerated with a weighted average exercise
price of $21.65.
The
purpose of the acceleration is to enable the Company to avoid recognizing
compensation expense associated with these options in future periods in its
consolidated statements of operations, upon effectiveness of the application
of
FASB Statement No. 123R (Share-Based Payment) which the Company will adopt
effective January 1, 2006. The pre-tax charge estimated by the Company to
be
avoided as a result of the acceleration amounts to approximately $6.7 million
pre-tax over the course of the original vesting periods. The estimated pre-tax
charge avoided is $4.0 million in 2006, $2.4 million in 2007 and $0.3 million
in
2008. In addition, we will begin granting a combination of time and performance
based options and restricted stock units in 2006, which will be reflected
as
compensation expense in our results of operations. Therefore, the acceleration
of vesting for substantially all previously awarded stock options is part
of the
transition to our new long-term incentive program.
The
Compensation Committee also required that as a condition of the acceleration,
each employee agrees to refrain from selling common stock acquired upon the
exercise of accelerated options until the date on which the exercise would
have
been permitted under the option's pre-acceleration vesting terms or, if earlier,
the employee’s last day of employment.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FARO
Technologies, Inc.
(Registrant)
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Date
November
17, 2005
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By: | /s/ Barbara Smith |
| Barbara Smith | ||
| CFO | ||