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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement Confidential, for use of the
[X] Definitive Proxy Statement Commission only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2)).
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or
(S)240.14a-12
FARO TECHNOLOGIES, INC.
(Name of Registrant as Specified in its Charter)
FARO TECHNOLOGIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
__________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
__________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
__________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
__________________________________________________________________________
(5) Total fee paid:
__________________________________________________________________________
[_] Fee previously paid with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
__________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
__________________________________________________________________________
(3) Filing Party:
__________________________________________________________________________
(4) Date Filed:
__________________________________________________________________________
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FARO TECHNOLOGIES, INC.
[LOGO OF FARO]
125 Technology Park
Lake Mary, Florida 32746
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 1, 2001
----------------
To the Shareholders of FARO Technologies, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of FARO
Technologies, Inc. (the "Company") will be held at the offices of the Company,
125 Technology Park, Lake Mary, Florida, on Tuesday, May 1, 2001 at 10:00 A.M.,
local time, for the following purposes:
1. To elect two directors, each to serve for a term of three years, and
one director to serve for a term of one year.
2. To transact such other business as may properly come before the
meeting.
Shareholders of record as of the close of business on March 15, 2001 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement of the Annual Meeting. Information relating to the matters to be
considered and voted on at the Annual Meeting is set forth in the proxy
statement accompanying this Notice.
By Order of the Board of Directors
/s/ Gregory A. Fraser
April 2, 2001 GREGORY A. FRASER, Ph.D.
Secretary
YOUR VOTE IS IMPORTANT
Shareholders who do not expect to attend the meeting in person are urged to
complete, date and sign the enclosed proxy and return it promptly in the
enclosed postage-paid envelope.
FARO TECHNOLOGIES, INC.
[LOGO OF FARO]
125 Technology Park
Lake Mary, Florida 32746
PROXY STATEMENT FOR
2001 ANNUAL MEETING OF SHAREHOLDERS
----------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of FARO Technologies, Inc. (the
"Company") for use at the Annual Meeting of Shareholders to be held on Tuesday,
May 1, 2001 at 10:00 A.M., local time, at the offices of the Company, 125
Technology Park, Lake Mary, Florida, and at any adjournment or postponement of
Annual Meeting. The telephone number at that address is (407) 333-9911. The
Notice of Annual Meeting, this Proxy Statement and the accompanying proxy,
together with the Company's Annual Report to Shareholders and Form 10-K for the
year ended December 31, 2000, are first being sent to shareholders on or about
March 30, 2001 to shareholders entitled to vote at the Annual Meeting.
Shareholders of record as of March 15, 2001 (the "Record Date") are entitled
to notice of and to vote at the Annual Meeting. As of the Record Date, there
were 11,030,706 shares of the Common Stock outstanding and entitled to vote.
There is no other class of voting securities outstanding. Each outstanding
share of Common Stock is entitled to one vote on all matters submitted to a
vote of shareholders. Votes may not be cumulated in the election of directors.
The presence, in person or by proxy, at the Annual Meeting of the holders of a
majority of the share of Common Stock entitled to vote will constitute a quorum
for purposes of the Annual Meeting.
If the proxy card accompanying this Proxy Statement is properly executed,
dated and returned to the Company, and not revoked, the shares of Common Stock
represented by the proxy will be voted as instructed on the proxy card. If no
instructions are given, the shares of Common Stock represented by the proxy
will be voted "FOR" each of the Proposals listed in the Notice of Annual
Meeting of Shareholders and described more fully in this Proxy Statement. The
giving of the proxy does not affect the right to vote in person if the
shareholder attends the Annual Meeting. The shareholder may revoke the proxy at
any time prior to the voting of the shares represented by the proxy by giving
written notice of revocation to the Secretary of the Company, by delivering to
the Secretary of the Company
1
a duly executed proxy bearing a later date or by appearing at the Annual
Meeting and voting by written ballot in person.
Proxies solicited by this Proxy Statement may be exercised only at the Annual
Meeting and any adjournment of the Annual Meeting and will not be used for any
other meeting. Proxies solicited by this Proxy Statement will be returned to
the Board of Directors and will be tabulated by an inspector of elections
designated by the Board of Directors who will not be employed by the Company or
any of its affiliates.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspector of elections appointed for the Annual Meeting who will also
determine whether a quorum is present for the transaction of business. The
Company's Bylaws provide that a quorum is present if the holders of a majority
of the issued and outstanding shares of Common Stock entitled to vote at the
Annual Meeting are present in person or represented by proxy. Abstentions will
be counted as shares that are present and entitled to vote for purposes of
determining whether a quorum is present. Shares held by nominees for beneficial
owners will also be counted for purposes of determining whether a quorum is
present if the nominee has the discretion to vote on at least one of the
matters presented, even though the nominee may not exercise discretionary
voting power with respect to other matters and even though voting instructions
have not been received from the beneficial owner (a "broker non-vote"). Neither
abstentions nor broker non-votes are counted in determining whether a proposal
has been approved.
Under Florida law, if a quorum exists, directors are elected by a plurality
of the votes cast by the shares entitled to vote in the election. Shareholders
are requested to vote by completing the enclosed proxy and returning it signed
and dated in the enclosed postage-paid envelope, which requires no postage if
mailed in the United States. Shareholders are urged to indicate their votes in
the spaces provided on the proxy. Proxies solicited by the Board of Directors
of the Company will be voted in accordance with the directions given in the
proxy. Where no instructions are indicated, signed proxies will be voted "FOR"
each of the proposals listed in the Notice of Annual Meeting of Shareholders.
Returning your completed proxy will not prevent you from voting in person at
the Annual Meeting, should you be present and wish to do so.
The cost of solicitation of Proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone by directors, officers, and other employees
of the Company without additional compensation. The Company also has made
arrangements with brokerage firms, banks,
2
nominees, and other fiduciaries to forward proxy solicitation materials for
shares of common stock held of record to the beneficial owners of such shares.
The Company will reimburse such record holders for their reasonable out-of-
pocket expenses.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors recommends the following nominees for election as
directors and urges each shareholder to vote "FOR" the nominees. Executed
proxies in the accompanying form will be voted at the annual meeting in favor
of the election as directors of the nominees named below, unless authority to
do so is withheld.
The Company's Board of Directors is divided into three classes, as nearly
equal as possible, with each class serving three-year terms expiring at the
third annual meeting of shareholders after their elections. The term of one of
the classes of directors expires at the 2001 Annual Meeting of Shareholders.
Accordingly, two directors will be elected at the Annual Meeting to serve until
their terms expire at the 2004 Annual Meeting of Shareholders (in each case,
until their respective successors are elected and qualified).
In addition to the class of directors whose terms expire at the 2001 Annual
Meeting of Shareholders, the Florida Business Corporation Act requires that any
director elected by the Board of Directors during the year to fill a vacancy on
the Board of Directors must stand for re-election by the shareholders at the
next meeting of the shareholders. One director was elected by the Board of
Directors during the year 2000 to fill a vacancy. This director will be elected
at the Annual Meeting to serve until 2002, which is the year that the term of
his class of director expires, or until his successor is elected and qualified.
In the event any such nominee is unable to serve, the persons designated as
proxies will cast votes for such other person in their discretion as a
substitute nominee. The Board of Directors has no reason to believe that the
nominees named below will be unable, or if elected, will decline to serve.
The following information is set forth with respect to the persons nominated
for election as a director and each director of the Company whose term of
office will continue after the meeting.
3
Nominees for Election at the Annual Meeting
Director Term
Name Age Since Expires
---- --- -------- -------
Norman Schipper, Q.C....................................... 70 1982 2001
Alexandre Raab............................................. 76 1982 2001
Stephen R. Cole............................................ 49 2000 2002
Norman Schipper, Formerly, a Partner in the Toronto office of the law
Q.C................... firm of Goodmans from 1962 until his mandatory
retirement as Partner on December 31, 1997; now
Counsel to the firm.
Alexandre Raab........ Chairman of the Board of Advanced Agro Enterprises, a
privately held company in Ontario, Canada, since 1991.
Mr. Raab is the father of Simon Raab.
Stephen R. Cole....... Fellow of Institute of Chartered Accountants of
Ontario, Canada. President since 1975 and Founding
Partner of Cole & Partners, a Toronto, Canada based
mergers and acquisition and corporate finance advisory
service company.
Messrs. Schipper and Alexandre Raab each will be elected for a three year
term, with their terms expiring at the 2004 Annual Meeting of Shareholders. Mr.
Cole was elected by the Board of Directors during 2000 to fill a vacancy on the
Board. If elected at this Annual Meeting, Mr. Cole will be elected for a one-
year term expiring at the 2002 Annual Meeting of Shareholders.
Directors Whose Terms Will Continue After the Annual Meeting
Director Term
Name Age Since Expires
---- --- -------- -------
Simon Raab, Ph.D. ......................................... 48 1982 2003
Hubert D'Amours............................................ 62 1990 2003
Andre Julien............................................... 57 1986 2003
Gregory A. Fraser, Ph.D.................................... 46 1982 2002
Simon Raab, Ph.D. .... Chairman of the Board and Chief Executive Officer of
the Company since its inception in 1982, and President
since 1986. Mr. Raab is a co-founder of the Company
and is the son of Alexandre Raab.
Hubert d'Amours.......
President of Montroyal Capital, Inc. and Capimont,
Inc., two venture capital investment firms, since
1990.
Andre Julien..........
Independent consultant, formerly President, LAB
Pharmacological Research International, Montreal
Canada. Former President and owner of Chateau Paints,
Inc., a coatings and paint manufacturer in Montreal,
Canada from 1969 until 1994.
Gregory A. Fraser.....
Co-founder of the Company, has served as Executive
Vice President since September 1999. Formerly Chief
Financial Officer and Executive Vice President since
May 1997. Secretary, Treasurer and a director of the
Company since its inception in 1982.
4
BOARD OF DIRECTORS
General
Seven meetings of the Board were held during 2000. In all the meetings, 96%
of the members attended the meetings of the Board and the committees thereof of
which they are a member during the periods which they served.
Audit Committee
The Audit Committee consists of Messrs. d'Amours, Julien, and Cole. There is
no formal Chairman of the Audit Committee. The Audit Committee held one meeting
during 2000. All members of the Audit Committee were in attendance.
The Audit Committee reviews the independence, qualifications and activities
of the Company's independent certified public accountants and the Company's
financial policies, control procedures and accounting staff. The Audit
Committee recommends to the Board the appointment of the independent certified
public accountants and reviews and approves the Company's financial statements.
The Audit Committee also reviews transactions between the Company and any
officer or director or any entity in which an officer or director of the
Company has a material interest. The Audit Committee is governed by a written
charter approved by the Board of Directors. A copy of this charter is included
in Appendix A.
Compensation Committee
The Compensation Committee consists of all members of Board. Mr. Julien
currently serves as Chairman of the Compensation Committee. The Compensation
Committee held one meeting during 2000. The Compensation Committee is
responsible for establishing the compensation of the Company's directors,
officers and other managerial personnel, including salaries, bonuses,
termination arrangements and other benefits. In addition, the Compensation
Committee administers the Company's 1993 Stock Option Plan, 1997 Employee Stock
Option Plan, and 1997 Non-employee Director Stock Option Plan.
Report of the Audit Committee
Under the guidance of a written charter adopted by the Board of Directors,
the Audit Committee is responsible for overseeing the company's financial
reporting process on behalf of the Board of Directors. A copy of the charter is
included in Appendix A to this proxy statement. Management has the primary
responsibility for the system of internal controls and the financial reporting
process. The independent certified public accountants have the responsibility
to express an opinion on the financial statements based on an audit
5
conducted in accordance with generally accepted auditing standards. The Audit
Committee has the responsibility to monitor and oversee these processes.
In fulfilling its responsibilities, the Audit Committee recommended to the
Board the selection of the company's independent certified public accountants,
Ernst & Young LLP. That firm has discussed with the Committee and provided
written disclosures to the Committee on (1) that firm's independence as
required by the Independence Standards Board and (2) the matters required to be
communicated under generally accepted auditing standards.
The Committee reviewed with the independent certified public accountants the
overall scope and specific plans for its audit. Without management present, the
Committee met separately with the independent certified public accountants to
review the results of their examinations, their evaluation of the company's
internal controls, and the overall quality of the Company's accounting and
financial reporting. The Committee reviewed and discussed with management and
the independent certified public accountants the Company's audited financial
statements.
Following these actions, the Committee recommended to the Board that the
audited financial statements be included in the company's Annual Report on Form
10-K for the year ended December 31, 2000 for filing with the Securities and
Exchange Commission.
Director Compensation
Under the 1997 Non-Employee Directors' Fee Plan, directors of the Company who
are not executive officers are entitled to receive fees of $1,000 for each
Board meeting attended, and $500 per committee meeting attended, plus the
expenses of attending meetings. During 2000, Messrs. d'Amours, Cole, Colley,
Julien, Alexandre Raab, and Schipper earned directors' fees of $8,000, $4,500,
$3,500, $8,000, $7,500, and $7,500, respectively. In 2000, Mr. Alexandre Raab
waived his earned fees.
Generally, upon election to the Board, and then annually on the day following
the annual meeting of shareholders, each director who is not an executive
officer is granted a stock option to acquire 3,000 shares of Common Stock. The
exercise price for such shares is equal to the closing sale price of the Common
Stock as reported on The Nasdaq Stock Market on the date the director is
elected or reelected to the Board, or on the date of the day following the
annual meeting of shareholders for directors whose term will continue after the
annual meeting. Options granted to Directors generally are granted upon the
same terms and conditions as options granted to executive officers and key
employees. Additionally, the Company's 1997 Non-employee Directors' Fee Plan
permits non-employee directors to elect to receive directors' fees in the form
of Common Stock rather than cash.
6
Common Stock issued in lieu of cash directors' fees are issued at the end of
the quarter in which the fees are earned, with the number of shares being based
on the fair market value of the Common Stock for the five trading days
immediately preceding the last business day of the quarter. Directors may defer
the receipt of fees for federal income tax purposes, whether payable in cash or
in Common Stock. During the year ended December 31, 2000, the non-employee
directors' fees were paid in cash only to Mr. Colley. All remaining non-
employee directors' fees were deferred for federal income tax purposes.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the year ended December 31, 2000, the executive officers and directors
of the Company filed with the Securities and Exchange Commission (the
"Commission") on a timely basis all required reports relating to transactions
involving equity securities of the Company beneficially owned by them, except
for a late filing of a Form 3--Initial Statement of Beneficial Ownership of
Securities by Stephen Cole and a Form 4--Statement of Changes in Beneficial
Ownership for the month of June, 2000 by Hubert d'Amours. The Company has
relied solely on the written representation of its executive officers and
directors and copies of the reports they have filed with the Commission
providing this information.
7
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date (except as noted)
by each person known to the Company to own beneficially more than five percent
of the Company's Common Stock, each director, each nominee for election as a
director, each executive officer, and all executive officers and directors as a
group.
Amount Percent
Beneficially of
Name of Beneficial Owner Owned (1) Class (2)
------------------------ ------------ ---------
Simon Raab, Ph.D. (3).................................. 3,095,695 27.45%
Gregory A. Fraser, Ph.D. (4)........................... 602,265 5.38%
Hubert d'Amours (5).................................... 95,997 *
Andre Julien (6)....................................... 52,265 *
Alexandre Raab (7)..................................... 514,879 4.65%
Norman H. Schipper, Q.C. (8)........................... 187,757 1.69%
Stephen R. Cole (9).................................... 24,227 *
Wellington Management Company, LLP (10)................ 970,000 8.79%
All directors and executive officers as a group (7
persons) (11)......................................... 4,573,085 41.46%
- ----------------
* Represents less than one percent of the Company's outstanding Common
Stock.
(1) The named shareholders have sole voting and dispositive power with
respect to all shares shown as being beneficially owned by them, except
as otherwise indicated. Shares owned includes deferred share units
payable in shares of Common Stock on a one-for-one basis under the 1997
Non-Employee Directors' Fee Plan.
(2) Percentage is based on the number of shares of the Company's Common Stock
outstanding as of March 20, 2001 plus the number of shares issuable to
all directors and executive offices pursuant to currently exercisable
stock options.
(3) Includes 2,849,028 shares held by Xenon Research, Inc. ("Xenon"), and
includes options to purchase (i) 80,000 shares at $13.20 per share, (ii)
100,000 shares at $14.30 per share, and (iii) 66,667 shares at $3.64 per
share which Mr. Raab has the right to acquire pursuant to currently
exercisable stock options. Simon Raab and Diana Raab, his spouse, own all
of the outstanding capital stock of Xenon. The number of shares does not
include options to purchase 33,333 shares at $3.64 per share which Mr.
Raab has the right to acquire pursuant to stock options which are
currently not exercisable.
(4) Includes 55,010 shares held by Linda Fraser and includes options to
purchase (i) 60,000 shares at $12.00 per share, (ii) 60,000 shares at
$13.00 per share, and (iii) 40,000 shares at $3.31 per share which Mr.
Fraser has the right to acquire pursuant to currently exercisable stock
options. The number of shares reflected does not include options to
purchase 20,000 shares at $3.31 per share which Mr. Fraser has the right
to acquire pursuant to stock options which are currently not exercisable.
8
(5) Includes 5,637 notional shares subject to terms of 1997 Non-Employee
Directors' Fee Plan, and options to purchase (i) 38,000 shares at 12.00
per share, (ii) 3,000 shares at $11.35 per share, (iii) 3,000 shares at
$4.88 per share, and (iv) 3,000 shares at 3.13 per share which Mr.
d'Amours has the right to acquire pursuant to stock options that are
exercisable within 60 days of the Record Date.
(6) Does not include 473,508 shares owned by Philanderer Six, Inc. Mr. Julien
has a minority interest in Philanderer Six, Inc., but does not have
voting power or dispositive power over the shares of common stock owned
by Philanderer Six, Inc. In addition to 5,265 notional shares subject to
the terms of the 1997 Non-Employee Directors' Fee Plan, it includes
options to purchase (I) 38,000 shares at $12.00 per share, (ii) 3,000
shares at $11.35 per share, (iii) 3,000 shares at $4.88 per share, and
(iv) 3,000 shares at $3.13 per share which Mr. Julien has the right to
acquire pursuant to stock options that are exercisable within 60 days of
the Record Date.
(7) Includes 463,158 shares owned by Geanal Holding, Inc. all of the capital
stock of which is owned by Mr. Alexandre Raab, and includes options to
purchase (i) 38,000 shares at $12.00 per share, (ii) 3,000 shares at
$11.35 per share, (iii) 3,000 shares at $4.88 per share, and (iv) 3,000
shares at $3.13 per share which Mr. Raab has the right to acquire
pursuant to stock options that are exercisable within 60 days of the
Record Date.
(8) Includes 134,654 shares owned by Shanklin Investments, Limited, in which
Mr. Schipper has a controlling interest, and includes options to purchase
(I) 38,000 shares at $12.00 per share, (ii) 3,000 shares at $11.35 per
share, (iii) 3,000 shares at $4.88 per share, and (iv) 3,000 shares at
$3.13 per share which Mr. Schipper has the right to acquire pursuant to
stock options that are exercisable within 60 days of the Record Date.
(9) Includes 966 notional shares subject to the terms of the 1997 Non-
Employee Directors' Fee Plan. Does not include option to purchase 3,000
shares at $2.75 per share which are not exercisable within 60 days of the
Record Date.
(10) The following information is derived from a Schedule 13G filed on
February 14, 2001 by Wellington Management Co., LLP reflecting beneficial
ownership as of December 31, 2000. Wellington Management Co., LLP is an
investment adviser registered under Section 203 of the Investment
Adviseres Act of 1940 and has sole voting and dispositive power of the
shares owned by it. The address of Wellington Management Co., Inc. is 75
State Street, Boston, Massachusetts 02109.
(11) Includes 12,072 notional shares subject to the terms of the 1997 Non-
Employee Directors' Fee Plan and options to purchase 596,666 pursuant to
currently exercisable stock options.
9
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation paid
by the Company to the Chief Executive Officer and the Company's other executive
officers:
Summary Compensation Table
Annual Compensation Long Term Compensation
-------------------------------- ---------------------------
Awards Payouts
------------------- -------
Restricted
Other Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Award(s) SARs Payouts Compensation
Name and Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- --------------------------- ---- ------- ------ ------------ ---------- -------- ------- ------------
Simon Raab, Ph.D. 2000 235,340 94,240
President, Chairman and 1999 220,000 44,000
Chief Executive Officer 1998 181,666 80,000 200,000
Gregory A. Fraser, Ph.D. 2000 171,013 51,360
Executive Vice President, 1999 160,000 32,000
Secretary and Treasurer 1998 116,875 80,000 120,000
The following table sets forth information with respect to grants of stock
options during 2000 to the executive officers named in the Summary Compensation
Table.
Option/SAR Grants in Last Fiscal Year
Potential Realizable
Percent of Value At Assumed
Number of Total Annual Rates of Stock
Shares Options/SARs Exercise Price Appreciation For
Underlying Granted to Or Base Option Term
Options/SARs Employees in Price Expiration -----------------------
Name Granted Fiscal Year ($/Sh) Date 5% 10%
- ---- ------------ ------------ -------- ---------- ----------- -----------
None
The following table sets forth information with respect to aggregate stock
option exercises by the executive officers named in the Summary Compensation
Table during 2000 and the year-end value of unexercised options held by such
executive officers.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Options/SAR Value Table
Value of
Unexercised
Number of In-the-Money
Unexercised Options/SARs at
Number of Options/SARs FY-End ($)*
Shares Acquired At FY-End -------------------------
Name on Exercise Value Realized ($) (#) Exercisable Unexercisable
---- --------------- ------------------ ------------ ----------- -------------
Simon Raab (1) 0 $ 0 280,000 $ 0 $ 0
Gregory A. Fraser (2) 0 $ 0 180,000 $ 0 $ 0
10
- ----------------
* Based on the average high and low sales prices of the Company's Common Stock
on December 31, 2000 as quoted on The Nasdaq Stock Market.
(1) Of the 280,000 stock options held by Mr. Raab, 80,000 were granted on
September 13, 1997, expire on September 13, 2007, and are currently
exercisable, 100,000 were granted on February 28, 1998, expire on February
28, 2008, and are currently exercisable; and 100,000 were granted on
December 9, 1998, expire on December 9, 2008, and 66,667 shares are
currently exercisable, and the remaining 33,333 shares are exercisable on
each of December 9, 2001.
(2) Of the 180,000 stock options held by Mr. Fraser, 60,000 were granted on
September 13, 1997, expire on September 13, 2007, and are currently
exercisable, 60,000 were granted on February 28, 1998, expire on February
28, 2008, and are currently exercisable; and 60,000 were granted on
December 9, 1998, expire on December 9, 2008, and 40,000 are currently
exercisable, and the remaining 20,000 options are exercisable on December
9, 2001.
Report by the Compensation Committee
on Executive Compensation
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. A
component of overall compensation is the granting of stock options, the award
of which is made by the Compensation Committee and is discussed in "Long-Term
Stock Incentives," below. The Compensation Committee consists of the entire
Board, except in matters involving compensation of the two directors who are
employees of the Company, in which matters these two directors absented
themselves from the meeting and abstained from voting.
The Compensation Committee's primary objective with respect to executive
compensation is to establish programs that attract and retain key managers and
align their compensation with the Company's overall business strategies,
values, and performance. To this end, the Compensation Committee established
and the Board endorsed an executive compensation philosophy for 2000, which
included the following considerations:
. a "pay-for-performance" feature that differentiates compensation results
based upon organizational results and overall performance against plan;
and
. stock incentives, in certain cases, as a component of total compensation
in order to closely align the interests of the Company's executives with
the long-term interests of shareholders which facilitates retention of
talented executives and encourages Company stock ownership and capital
accumulation; and
. emphasis on total compensation vs. cash compensation, under which base
salaries are generally set at or below competitive levels but which
motivates and rewards
11
Company executives with total compensation (including incentive programs)
at or above competitive levels, if the financial performance of the
Company meets or exceeds goals established for the year.
For 2000, the Company's executive compensation program was comprised of the
following primary components: (a) base salaries; (b) annual cash incentive
opportunities in the form of bonus; and (c) long-term incentive opportunities
in the form of stock options. Each primary component of pay is discussed below.
Base Salaries. Base salaries paid the Company's executive officers are
subject to annual review and adjustment on the basis of individual and Company
performance, level of responsibility, individual experience, and competitive,
inflationary, and internal equity considerations. The base salary for Simon
Raab, the Company's President and Chief Executive Officer, was increased in
2000 based upon such factors as the Company's profitability, cash flow and
capital spending for the prior fiscal year, and subjective considerations, such
as overall employee morale, succession planning, general personnel issues, and
competitive positions. The Compensation Committee generally attempts to set
base salaries of executive officers at levels that are comparable or slightly
below "market" rates, as determined from information gathered by the Company
from publicly traded companies which are similar in size and in the same
industry group as the Company and which were used by Dow Jones in compiling the
Industrial Technology Index appearing in the performance graph set forth below.
The Compensation Committee believes that for the year ended December 31, 2000,
executive salaries, including the salary paid to Mr. Raab, the Company's
President and Chief Executive Officer, were equal to or less than the range of
salaries paid by the companies surveyed.
Annual Cash Incentives. Company executives are eligible to receive annual
cash bonus awards to focus attention on achieving key goals pursuant to bonus
plans designed to provide competitive incentive pay only in the event such
objectives are met or exceeded. The objectives include specific targets for
earnings as reflected in the Company's financial plan submitted by management
and approved by the Compensation Committee and the Board based on a variety of
factors, including viability of the target growth rate and amount of earnings
appropriate to satisfy shareholder expectations.
During the year ended December 31, 2000, Simon Raab, the Company's Chief
Executive Officer, exceeded certain goals established by the Compensation
Committee and in 2001, awarded Mr. Raab a bonus of $94,136 which was paid in
March 2001.
12
Long-Term Stock Incentives. Long-term stock incentives, which are a component
of compensation, are awarded by the Compensation Committee of the Board. The
Compensation Committee consists of the seven Directors whose names are listed
at the end of this report, five of whom qualify as disinterested persons for
purposes of Rule 16b-3 under the Securities Exchange Act of 1934. The
Compensation Committee administers the Company's 1993 Stock Option Plan (the
"1993 Plan"), 1997 Employee Stock Option Plan (the "1997 Plan"), and 1997
Nonemployee Director Stock Option Plan (the "Nonemployee Director Plan") (the
1993 Plan, 1997 Plan, and Nonemployee Director Plan are collectively referred
to as the "Plans"), and determines the recipients of the nonqualified and
incentive Plans and non-Plan stock options and the exercise price of such stock
options on the date of grant.
The 1993 Plan provides for the grant of "incentive stock options," within the
meaning of Section 422 of the Internal Revenue Code, and nonqualified stock
options, for federal income tax purposes, to officers and other key employees
of the Company, and nonqualified stock options to non-employee directors of the
Company. The 1997 Plan provides for the grant of incentive stock options and
nonqualified stock options to officers and key employees of the Company. The
Non-employee Director Plan provides for the grant of nonqualified stock options
and formula options to non-employee directors. The 1993 Plan was originally
adopted by the Board and shareholders in 1993. Grants to executives under the
Company's 1993 Plan and 1997 Plan are determined by the Compensation Committee
and are designed to align a portion of the executive compensation package with
the long-term interests of the Company's shareholders by providing an incentive
that focuses attention on managing the Company from the perspective of an owner
with an equity stake in the business.
Grants of stock options generally are limited to officers and other key
employees and managers of the Company who are in a position to contribute
substantially to the growth and success of the Company and its subsidiaries.
Incentive stock options and nonqualified stock options are granted for terms up
to ten years, and are designed to reward exceptional performance with a long-
term benefit, facilitate stock ownership, and deter recruitment of key Company
personnel by competitors and others. In evaluating annual compensation of
executive officers, the Compensation Committee takes into consideration the
stock options as a percentage of total compensation, consistent with its
philosophy that stock incentives more closely align the interests of company
managers with the long-term interests of shareholders, and takes the number of
options granted to an executive officer into consideration in determining base
salaries of executive officers. In granting stock options to executive
officers, the Compensation Committee considers the number and size of stock
13
options already held by an executive officer when determining the size of stock
option awards to be made to the officer in a given fiscal year.
Messrs. Raab and Fraser were not granted any stock options in 1999 and 2000.
At March 15, 2000 the executive officers appearing in the Summary Compensation
Table held stock or currently held the right to acquire stock representing 31.9
percent of the Company's outstanding Common Stock.
Section 162(m). Section 162(m) to the Internal Revenue Code of 1986, as
amended (the "Code"), which prohibits a deduction to any publicly held
corporation for compensation paid to a "covered employee" in excess of $1
million per year (the "Dollar Limitation"). A covered employee is any employee
who appears in the Summary Compensation Table who is also employed by the
Company on the last day of the Company's calendar year. The Compensation
Committee does not expect the deductibility of compensation paid in 2000 to any
executive officer to be affected by Section 162(m). The Compensation Committee
may consider alternatives to its existing compensation programs in the future
with respect to qualifying executive compensation for deductibility.
The Company generally is entitled to a tax deduction upon an employee's
exercise of nonqualified options in an amount equal to the excess of the value
of the shares over the exercise price. Such deduction is considered
compensation for purposes of the Dollar Limitation with respect to options
having an exercise price less than fair market value at the date of grant.
Deductibility of compensation in future years to Messrs. Raab and Fraser may be
affected by the Dollar Limitation if they remain covered employees and exercise
options in amounts which would result in compensation to Mr. Raab and/or Mr.
Fraser exceeding the Dollar Limitation in any year. As of December 31, 2000,
Messrs. Raab and Fraser held options to acquire 280,000 and 180,000 shares,
respectively, of the Company's Common Stock. All these options are at a higher
exercise price than the current market price. Of the options held by Messrs.
Raab and Fraser at year end, (1) 80,000 and 60,000 respectively expire on
September 13, 2007, and are currently exercisable; (2) 100,000 and 60,000
respectively expire on February 28, 2008 and are currently exercisable; and (3)
100,000 and 60,000 respectively expire on December 9, 2008, and 66,667 and
40,000 respectively are currently exercisable. Messrs. Raab and Fraser have
each agreed to cooperate with the Company in exercising their options so as to
minimize any loss of deductibility due to the Dollar Limitation.
Conclusion. As described above, the Company's executive compensation program
provides a link between total compensation and the Company's performance and
long-term
14
stock price appreciation consistent with the compensation philosophies set
forth above. This program has been established since the Company's
establishment of its first stock option plan in 1993, and has been a
significant factor in the Company's growth and profitability and the resulting
gains achieved by the Company's shareholders.
March 15, 2001 Compensation Committee
Hubert d'Amours
Andre Julien
Alexandre Raab
Norman Schipper
Stephen Cole
Simon Raab
Gregory Fraser
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of Messrs. Hubert d'Amours,
Andre Julien, Alexandre Raab, Norman Schipper, Stephen Cole, Simon Raab, and
Gregory Fraser. Currently, Mr. Julien serves as Chairman of the Committee.
Stock option grants are considered part of the overall compensation for
executive officers of the Company. There were no transactions during the year
ended December 31, 2000 between the Company and members of the Compensation
Committee or entities in which they own an interest, other than as disclosed in
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, below.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its headquarters from Xenon Research, Inc. ("Xenon"), all
of the issued and outstanding capital stock of which is owned by Simon Raab,
the Company's President and Chief Executive Officer, and Diana Raab, his
spouse. The term of the lease expires on February 28, 2006, and the Company has
two five-year renewal options. Base rent under the lease was $355,000 for 2000.
Base rent during renewal periods will reflect changes in the U.S. Bureau of
Labor statistics consumer Price Index for all Urban Consumers. The terms of the
lease were approved by an independent committee of the Company's Board of
Directors upon review of an independent market study of comparable rental rates
and such terms are, in the opinion of the Board of Directors, no less favorable
than those that could be obtained on an arm's-length basis.
15
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total shareholder
return with the cumulative total shareholder return of the Dow Jones Equity
Market Index and the Dow Jones Industrial Technology Index since the Company's
initial public offering in September 1997 assuming in each case an initial
investment of $100 on September 18, 1997:
Cumulative Total Return
9/18/97 9/97 12/97 3/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99
FARO TECHNOLOGIES, INC. 100 101 72 74 65 19 25 39 31 21 18
DOW JONES EQUITY MARKET 100 100 103 117 121 109 133 139 148 138 160
DOW JONES INDUSTRIAL EQUIPMENT 100 100 88 88 78 65 81 72 99 107 218
16
INDEPENDENT PUBLIC ACCOUNTANTS
In August 21, 2000, Deloitte & Touch LLP ("Deliotte"), who had served as
principal accountant to audit the consolidated financial statements of the
Company, resigned from its engagement with the Company. Following Deloitte's
resignation, the Board of Directors of the Company approved the engagement of
Ernst & Young LLP as the principal accountant and replacement for Deloitte.
During the two most recent fiscal years and the subsequent interim period
preceding August 21, 2000 (date of resignation), no report of Deloitte on the
Company's consolidated financial statements contained an adverse opinion or a
disclaimer of opinion, nor was one qualified as to uncertainty, audit scope, or
accounting principles. During the two most recent fiscal years and the
subsequent interim period preceding August 21, 2000 (date of resignation),
there were no disagreements with Deloitte on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of
Deloitte, would have caused Deloitte to make a reference to the subject matter
of the disagreements in connection with its report.
Deloitte did not advise the Company at any time during the two most recent
fiscal years and the subsequent interim period preceding August 21, 2000 (date
of resignation):
(a) that the internal controls necessary for the Company to develop
reliable consolidated financial statements did not exist;
(b) that information had come to its attention that had led it to no
longer be able to rely on management's representations, or that had made it
unwilling to be associated with the consolidated financial statements
prepared by management;
(c) of the need to expand significantly the scope of its audit, or that
information had come to its attention during the two most recent fiscal
years and the subsequent interim period preceding August 21, 2000 (date of
resignation) that if further investigated may (i) materially have impacted
the fairness or reliability of either: a previously issued audit report or
the underlying consolidated financial statements, or the consolidated
financial statements issued or to be issued covering the fiscal periods
subsequent to the date of the most recent consolidated financial statements
covered by an audit report or (ii) have caused it to be unwilling to rely
on management's representations or be associated with the Company's
consolidated financial statements; or
(d) that information had come to its attention that it concluded
materially impacts the fairness or reliability of either (i) a previously
issued audit report or the underlying
17
consolidated financial statements issued or to be issued covering the
fiscal periods subsequent to the date of the most recent consolidated
financial statements covered by an audit report.
Neither the Company nor anyone on its behalf has consulted with Ernst & Young
regarding either: (a) the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit opinion that
might be rendered on the Company's consolidated financial statements, and
neither a written report nor oral advice was provided to the Company that Ernst
& Young concluded was an important factor considered by the Company in reaching
a decision as to an accounting, auditing or financial reporting issue; or (b)
any matter that was the subject of either a disagreement or any other event
described above.
The fees billed by Deloitte and Ernst &Young LLP for professional services
rendered in connection with all audit and non-audit related matters for the
year ended December 31, 2000 were as follows:
Audit Fees
Deloitte and Ernst & Young LLP have billed the Company approximately $205,000
for the audit of the Company's annual financial statements for the year ended
December 31, 2000 and the reviews of the interim financial statements included
in the Company's Quarterly Reports on Form 10-Q filed during the year ended
December 31, 2000. Of the $205,000 in audit fees, $188,000 were billed by Ernst
& Young LLP and $17,000 were billed by Deloitte.
Financial Information Systems Design and Implementation Fees
The Company did not engage either Deloitte or Ernst & Young LLP to provide
advice to the Company regarding financial information systems design and
implementation during the year ended December 31, 2000.
All Other Fees
Deloitte and Ernst & Young LLP have billed the Company approximately $158,000
for all professional services rendered by Deloitte and Ernst & Young LLP (other
than those covered above under "Audit Fees" and "Financial Information Systems
Design and Implementation Fees") during the year ended December 31, 2000. These
fees represent compensation for tax compliance services. Of the $158,000 in
corporate tax and VAT compliance fees, $11,000 were billed by Ernst & Young LLP
and $147,000 were billed by Deloitte.
18
The Audit Committee has determined that the services provided by Ernst &Young
LLP and Deloitte that were not directly related to the most recent audit are
compatible with maintaining the principal accountant's independence.
The Company does not expect representatives of Deloitte to be present at the
Annual Meeting. Representatives of Ernst & Young LLP are expected to be present
at the Annual Meeting. Those representatives will have the opportunity to make
a statement if they desire to do so and are expected to be available to respond
to appropriate questions.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
The deadline for submission of shareholder proposals pursuant to Rule 14a-8
under the Securities Exchange Act of 1934 ("Rule 14a-8") for inclusion in the
Company's proxy statement for its 2002 Annual Meeting of Shareholders is
December 3, 2001. Notice to the Company of a shareholder proposal submitted
otherwise than pursuant to Rule 14a-8 will be considered untimely, and the
persons named in proxies solicited by the Board of Directors of the Company for
its 2002 Annual Meeting of Shareholders may exercise discretionary voting power
with respect to any such proposal if received by the Company after February 16,
2002.
OTHER MATTERS
If any other matters shall come before the Annual Meeting, the persons named
in the proxy, or their substitutes, will vote thereon in accordance with their
judgment. The Board does not know of any other matters which will be presented
for action at the meeting.
By Order of the Board of Directors
/s/ Gregory A. Fraser
April 2, 2000 GREGORY A. FRASER, Ph.D.
Secretary
19
APPENDIX A
FARO TECHNOLOGIES, INC.
Restated Audit Committee Charter
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation
to any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the corporation's policies, procedures and
practices at all levels. The Audit Committee's primary duties and
responsibilities are to:
. Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
. Review and appraise the audit efforts of the Corporation's independent
certified public accountants and internal auditing department, if
applicable.
. Provide an open avenue of communication among the independent certified
public accountants, financial and senior management, the internal
auditing department, if applicable, and the Board of Directors.
The Audit Committee will primarily fulfill three responsibilities by carrying
out the activities enumerated in Section IV of this Charter. This Charter,
however, is not intended to, and does not, create any legal or fiduciary duties
or responsibilities or form the basis for a breach of fiduciary duty or
potential liability if not complied with.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be "independent" as that term is
used in the applicable rules and regulations of the National Association of
Securities Dealers, Inc., and free from any relationship that, in the opinion
of the Board, would interfere with the exercise of his or her independent
judgment as a member of the Committee. All members of the Committee shall have
a working familiarity with basic finance and accounting practices, and at least
one member of the Committee shall have accounting or related financial
management expertise.
Committee members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Corporation or an
outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the director of the
internal auditing department, if applicable, and the independent certified
public accountants in separate executive sessions to discuss any matters that
the Committee or each of these groups believe should be discussed privately. In
addition, the Committee or at least its Chair should meet with the independent
certified public accountants and management quarterly to review the
Corporation's financials consistent with Item IV.4. below.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports Review
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
2. Review the organization's annual financial statements and any reports
or other financial information submitted to any governmental body, or
the public, including any certification, report, opinion, or review
rendered by the independent certified public accountants.
3. Review the regular internal reports to management prepared by the
internal auditing department, if applicable, and management's
response.
4. Review with financial management and the independent certified public
accountants the 10-Q prior to its filing, or prior to the release of
earnings. The Chair of the Committee may represent the entire
Committee for purposes of this review.
A-2
Independent Accountants
5. Recommend to the Board of Directors the selection of the independent
certified public accountants, considering independence and
effectiveness and approve the fees and other compensation to be paid to
the independent certified public accountants. On an annual basis, the
Committee should review and discuss with the accountants all
significant relationships the accountants have with the Corporation to
determine the accountants' independence.
6. Review the performance of the independent certified public accountants
and approve any proposed discharge of the independent certified public
accountants when circumstances warrant.
7. Periodically consult with the independent certified public accountants
out of the presence of management about internal controls and the
completeness and accuracy of the organization's financial statements.
Financial Reporting Processes
8. In consultation with the independent certified public accountants and
the internal auditors if applicable, review the integrity of the
organization's financial reporting processes, both internal and
external.
9. Consider the independent certified public accountants' judgements
about the quality and appropriateness of the Corporation's accounting
principles as applied in its financial reporting.
10. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent certified public accountants, management,
or the internal auditing department, if applicable.
Process Improvement
11. Establish regular and separate systems of reporting to the Audit
Committee by each of management, the independent certified public
accountants and the internal auditors if applicable, regarding any
significant judgments made in management's preparation of the
financial statements and the view of each as to appropriateness of
such judgments.
12. Following completion of the annual audit, review separately with each
of management, the independent certified public accountants and the
internal auditing department, if
A-3
applicable, any significant difficulties encountered during the course
of the audit, including any restrictions on the scope of work or access
to required information.
13. Review any significant disagreement among management and the
independent certified public accountants or the internal auditing
department, if applicable, in connection with the preparation of the
financial statements.
14. Review with the independent certified public accountants, the internal
auditing department, if applicable, and management the extent to which
changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented. (This review
should be conducted at an appropriate time subsequent to
implementation of changes or improvements, as decided by the
Committee.)
Ethical and Legal Compliance
15. Establish, review and update periodically a Code of Ethical Conduct
and ensure that management has established a system to enforce this
Code.
16. Review management's monitoring of the Corporation's compliance with
the organization's Ethical Code, and ensure that management has the
proper review system in place to ensure that Corporation's financial
statements, reports and other financial information disseminated to
governmental organizations, and the public satisfy legal requirements.
17. Review activities, organizational structure, and qualifications of the
internal audit department, if applicable.
18. Review with the organization's counsel, legal compliance matters
including corporate securities trading policies.
19. Review with the organization's counsel, any legal matter that could
have a significant impact on the organization's financial statements.
20. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
A-4
PROXY
FARO TECHNOLOGIES, INC.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2001
The undersigned stockholder appoints SIMON RAAB and GREGORY A. FRASER, or
either of them, as proxy with full power of substitution, to vote the shares of
voting securities of FARO Technologies, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
at the offices of the Company, 125 Technology Park, Lake Mary, Florida, on
Tuesday, May 1, 2001, at 10:00 am., local time, and at any adjournments thereof,
upon matters properly coming before the meeting, as set forth in the Notice of
Annual Meeting and Proxy Statement, both of which have been received by the
undersigned. Without otherwise limiting the general authorization given hereby,
such proxy is instructed to vote as follows:
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE PROPOSALS INDICATED ON THIS CARD AND AS SUCH PROXIES DEEM
ADVISABLE WITH DISCRETIONARY AUTHORITY ON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING AND ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
PLEASE CHECK THE BOXES BELOW, SIGN, DATE AND RETURN THIS PROXY TO FIRSTAR BANK,
N.A., 1555 NORTH RIVERCENTER DRIVE, SUITE 301, MILWAUKEE, WISCONSIN 53212, IN
THE SELF-ADDRESSED ENVELOPE PROVIDED.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
FARO TECHNOLOGIES, INC. 2001 ANNUAL MEETING
1. TO ELECT THREE DIRECTORS: 1 - Norman Schipper, Q.C. [_] FOR all nominees [_] WITHHOLD AUTHORITY
(to serve for a term of three years) 2 - Alexandre Raab listed to the left (except to vote for all nominees
as specified below). listed to the left.
(to serve for a term of one year) 3 - Stephen R. Cole
(Instructions: To withhold authority to vote for any indicated -----------------------------
nominee, write the numbers(s)of the nominee(s) in the box provided -----------------------------
to the right.)
In his discretion, the proxy is authorized to vote upon such other business
as may properly come before the meeting.
Check appropriate box
Indicate changes below: Date____________________ NO. OF SHARES
Address Change? [_] Name Change? [_]
-----------------------------
-----------------------------
Signature(s) In Box
-----------------------------
-----------------------------
Print Names
Please sign exactly as your name appears hereon. When signing
as attorney, executor, administrator, trustee or guardian,
please give your full title. If shares are jointly held, each
holder must sign. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by an authorized
person.