FARO Founders Enter into SEC Rule 10b5-1 Trading Plans
LAKE MARY, Fla., June 10 -- FARO Technologies, Inc. today announced that its two founders, Simon Raab, President and CEO, and Gregory Fraser, Executive Vice President and CFO, have entered into trading plans under SEC Rule 10b5-1. To effect the trading plans, Drs. Raab and Fraser have entered into variable prepaid forward sales contracts, referred to as a STARS transaction by Bank of America, with respect to the forward sale by Drs. Raab and Fraser of up to 750,000 and 250,000 shares of FARO common stock, respectively. The variable prepaid forward sales contracts provide Drs. Raab and Fraser with less in immediate proceeds than a direct sale of the shares, in exchange for the opportunity to keep future appreciation of FARO shares up to $35, $37 and $42 per share over the next 10, 18 and 22 months, respectively.
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In connection with this transaction, Bank of America will sell into the marketplace up to 1,000,000 shares of FARO common stock based upon instructions set forth in the trading plans. The sales will take place in accordance with the volume and manner of sale restrictions of SEC Rule 144. Pursuant to the variable prepaid forward sales contracts, Drs. Raab and Fraser may deliver up to 750,000 and 250,000 shares of FARO common stock, respectively, to Bank of America at three different maturity dates to settle the forward sale transactions, with the actual number of shares to be determined at the respective delivery times based upon the market price of the stock at that time. Drs. Raab and Fraser will retain voting rights for all of their respective shares subject to the variable prepaid forward contracts until settlement at maturity.
While the actual number of shares Drs. Raab and Fraser will deliver to settle the variable prepaid forward contracts will not be determined until maturity of the STARS, if the price of FARO's common stock appreciates, Drs. Raab and Fraser could retain up to 303,572 of the 1,000,000 shares subject to the transaction.
"We are bullish on the prospects for FARO Technologies, Inc., and while we've decided to generate liquidity for estate planning purposes, the STARS transaction allows us to do so while retaining a significant amount of upside potential in the underlying shares," said Dr. Raab. "We also retain voting rights over these shares, giving us influence in the future direction of the Company."
About FARO:
FARO Technologies, Inc. designs, develops and markets software and portable, computerized measurement devices. The Company's products allow manufacturers to perform three-dimensional inspections of parts and assemblies on the shop floor. This helps eliminate manufacturing errors, and thereby increases productivity.
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