ExOne Co (Form: 10-Q, Received: 11/09/2017 17:05:20)

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐ (Do not check if a small reporting company)

Small reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-35806

The ExOne Company

(Exact name of registrant as specified in its charter)

Delaware

46-1684608

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

127 Industry Boulevard

North Huntingdon, Pennsylvania 15642

(Address of principal executive offices) (Zip Code)

(724) 863-9663

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 9, 2017, 16,158,619 shares of common stock, par value $0.01, were outstanding.

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

Since our initial public offering, we have continued to qualify as an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An EGC may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies.

As an EGC:

•

We are exempt from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

•

We are permitted to provide less extensive disclosure about our executive compensation arrangements;

•

We are not required to give our stockholders non-binding advisory votes on executive compensation or golden parachute arrangements; and

•

We have elected to use an extended transition period for complying with new or revised accounting standards.

We may choose to take advantage of some, but not all, of these reduced burdens. We will continue to operate under these provisions until December 31, 2018, or such earlier time that we are no longer an EGC. We would cease to be an EGC if we have more than $1.07 billion in annual revenues, qualify as a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which requires us to have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

The ExOne Company and Subsidiaries

Condensed Statement of Consolidated Operations and Comprehensive Loss (Unaudited)

(in thousands, except per-share amounts)

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Revenue	$	15,887		$	12,988		$	37,555		$	33,157
Cost of sales		11,790			9,428			29,829			24,215
Gross profit		4,097			3,560			7,726			8,942
Operating expenses
Research and development		2,871			1,898			7,219			5,737
Selling, general and administrative		6,062			5,234			18,338			15,222
		8,933			7,132			25,557			20,959
Loss from operations		(4,836	)		(3,572	)		(17,831	)		(12,017	)
Other expense (income)
Interest expense		24			22			69			276
Other (income) expense ̶ net		(11	)		(8	)		134			(306	)
		13			14			203			(30	)
Loss before income taxes		(4,849	)		(3,586	)		(18,034	)		(11,987	)
Provision for income taxes		14			25			23			43
Net loss	$	(4,863	)	$	(3,611	)	$	(18,057	)	$	(12,030	)
Net loss per common share:
Basic	$	(0.30	)	$	(0.23	)	$	(1.13	)	$	(0.76	)
Diluted	$	(0.30	)	$	(0.23	)	$	(1.13	)	$	(0.76	)
Comprehensive loss:
Net loss	$	(4,863	)	$	(3,611	)	$	(18,057	)	$	(12,030	)
Other comprehensive income:
Foreign currency translation adjustments		1,194			489			4,713			2,288
Comprehensive loss	$	(3,669	)	$	(3,122	)	$	(13,344	)	$	(9,742	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The ExOne Company and Subsidiaries

Condensed Consolidated Balance Sheet (Unaudited)

(in thousands, except per-share and share amounts)

	September 30,			December 31,
	2017			2016
Assets
Current assets:
Cash and cash equivalents	$	17,706		$	27,825
Restricted cash		1,098			330
Accounts receivable ̶ net of allowance of $1,494 (2017) and $1,566 (2016)		6,539			6,447
Inventories ̶ net		16,643			15,838
Prepaid expenses and other current assets		2,293			1,159
Total current assets		44,279			51,599
Property and equipment ̶ net		49,489			51,134
Intangible assets ̶ net		152			668
Other noncurrent assets		781			777
Total assets	$	94,701		$	104,178
Liabilities
Current liabilities:
Current portion of long-term debt	$	135		$	132
Current portion of capital leases		25			72
Accounts payable		4,311			2,036
Accrued expenses and other current liabilities		5,033			5,124
Deferred revenue and customer prepayments		7,533			7,371
Total current liabilities		17,037			14,735
Long-term debt ̶ net of current portion		1,543			1,644
Capital leases ̶ net of current portion		41			10
Other noncurrent liabilities		9			9
Total liabilities		18,630			16,398
Contingencies and commitments
Stockholders' equity
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,092,114 (2017) and 16,017,115 (2016) shares issued and outstanding		161			160
Additional paid-in capital		173,158			171,116
Accumulated deficit		(87,226	)		(68,761	)
Accumulated other comprehensive loss		(10,022	)		(14,735	)
Total stockholders' equity		76,071			87,780
Total liabilities and stockholders' equity	$	94,701		$	104,178

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The ExOne Company and Subsidiaries

Condensed Statement of Consolidated Cash Flows (Unaudited)

(in thousands)

	Nine Months Ended
	September 30,
	2017			2016
Operating activities
Net loss	$	(18,057	)	$	(12,030	)
Adjustments to reconcile net loss to net cash used for operations:
Depreciation and amortization		4,966			4,280
Equity-based compensation		2,043			1,104
Amortization of debt issuance costs		4			209
Deferred income taxes		—			(29	)
Recoveries for bad debts ̶ net		(51	)		(256	)
Provision (recoveries) for slow-moving, obsolete and lower of cost or market inventories ̶ net		1,872			(356	)
(Gain) loss from disposal of property and equipment ̶ net		(322	)		163
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:
Decrease in accounts receivable		288			4,681
(Increase) decrease in inventories		(2,772	)		399
(Increase) decrease in prepaid expenses and other assets		(1,438	)		795
Increase (decrease) in accounts payable		2,032			(1,296	)
Decrease in accrued expenses and other liabilities		(522	)		(1,259	)
(Decrease) increase in deferred revenue and customer prepayments		(938	)		1,687
Net cash used for operating activities		(12,895	)		(1,908	)
Investing activities
Capital expenditures		(874	)		(690	)
Proceeds from sale of property and equipment		3,702			52
Net cash provided by (used for) investing activities		2,828			(638	)
Financing activities
Net proceeds from issuance of common stock ̶ registered direct offering to a related party		—			12,447
Net proceeds from issuance of common stock ̶ at the market offerings		—			595
Payments on long-term debt		(102	)		(102	)
Payments on capital leases		(64	)		(61	)
Net cash (used for) provided by financing activities		(166	)		12,879
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		882			138
Net change in cash, cash equivalents, and restricted cash		(9,351	)		10,471
Cash, cash equivalents, and restricted cash at beginning of period		28,155			19,672
Cash, cash equivalents, and restricted cash at end of period	$	18,804		$	30,143

Supplemental disclosure of noncash investing and financing activities
Transfer of internally developed 3D printing machines from inventories to property and equipment for internal use or leasing activities	$	2,363		$	2,666
Transfer of internally developed 3D printing machines from property and equipment to inventories for sale	$	597		$	1,276
Property and equipment acquired through financing arrangements	$	48		$	—
Property and equipment included in accounts payable	$	94		$	15
Property and equipment included in accrued expenses and other current liabilities	$	84		$	—
Advance deposits on property and equipment	$	12		$	203

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The ExOne Company and Subsidiaries

Condensed Statement of Changes in Consolidated Stockholders’ Equity (Unaudited)

(in thousands)

										Accumulated
										other			Total
	Common stock				Additional		Accumulated			comprehensive			stockholders'
	Shares		$		paid-in capital		deficit			loss			equity
Balance at December 31, 2015		14,447	$	144	$	156,627	$	(54,163	)	$	(13,535	)	$	89,073
Registered direct offering of common stock to a related party, net of issuance costs		1,424		15		12,432		—			—			12,447
At the market offerings of common stock, net of issuance costs		92		1		594		—			—			595
Net loss		—		—		—		(12,030	)		—			(12,030	)
Other comprehensive income		—		—		—		—			2,288			2,288
Equity-based compensation		32		—		1,104		—			—			1,104
Balance at September 30, 2016		15,995	$	160	$	170,757	$	(66,193	)	$	(11,247	)	$	93,477

Balance at December 31, 2016		16,017	$	160	$	171,116	$	(68,761	)	$	(14,735	)	$	87,780
Cumulative-effect adjustment due to the adoption of Financial Accounting Standards Board Accounting Standards Update 2016-16		—		—		—		(408	)		—			(408	)
Net loss		—		—		—		(18,057	)		—			(18,057	)
Other comprehensive income		—		—		—		—			4,713			4,713
Equity-based compensation		75		1		2,042		—			—			2,043
Balance at September 30, 2017		16,092	$	161	$	173,158	$	(87,226	)	$	(10,022	)	$	76,071

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The ExOne Company and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(dollars in thousands, except per-share and share amounts)

Note 1. Basis of Presentation

Organization

The ExOne Company (“ExOne”) is a corporation organized under the laws of the state of Delaware. ExOne was formed on January 1, 2013, when The Ex One Company, LLC, a Delaware limited liability company, merged with and into a Delaware corporation, which survived and changed its name to The ExOne Company (the “Reorganization”). As a result of the Reorganization, The Ex One Company, LLC became ExOne, the common and preferred interest holders of The Ex One Company, LLC became holders of common stock and preferred stock, respectively, of ExOne, and the subsidiaries of The Ex One Company, LLC became the subsidiaries of ExOne. The condensed consolidated financial statements include the accounts of ExOne, its wholly-owned subsidiaries, ExOne Americas LLC (United States); ExOne GmbH (Germany); ExOne Property GmbH (Germany); ExOne KK (Japan); ExOne Italy S.r.l (Italy); ExOne Sweden AB (Sweden); and through September 2016, MWT—Gesellschaft für Industrielle Mikrowellentechnik mbH (Germany). Collectively, the consolidated group is referred to as the “Company”.

On September 15, 2016, the Company completed a transaction merging its MWT—Gesellschaft für Industrielle Mikrowellentechnik mbH (Germany) subsidiary with and into its ExOne GmbH (Germany) subsidiary. The purpose of this transaction was to further simplify the Company’s legal structure. There were no significant accounting or tax related impacts associated with the merger of these wholly owned subsidiaries.

The Company filed a registration statement on Form S-3 (No. 333-203353) with the Securities and Exchange Commission (“SEC”) on April 10, 2015. The purpose of the Form S-3 was to register, among other securities, debt securities. Certain subsidiaries of the Company (other than any minor subsidiary) are co-registrants with the Company (“Subsidiary Guarantors”), and the registration statement registered guarantees of debt securities by one or more of the Subsidiary Guarantors. The Subsidiary Guarantors are 100% owned by the Company and any guarantees by the Subsidiary Guarantors will be full and unconditional.

Basis of Presentation

The condensed consolidated financial statements of the Company are unaudited. The condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the results of operations, financial position and cash flows of the Company. All material intercompany transactions and balances have been eliminated in consolidation. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2016 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Quarterly Report on Form 10-Q should be read in connection with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which includes all disclosures required by GAAP.

The preparation of these condensed consolidated financial statements requires the Company to make certain judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. Areas that require significant judgments, estimates and assumptions include accounting for accounts receivable (including the allowance for doubtful accounts); inventories (including the allowance for slow-moving and obsolete inventories); product warranty reserves; contingencies; income taxes (including the valuation allowance on certain deferred tax assets and liabilities for uncertain tax positions); equity-based compensation (including the valuation of certain equity-based compensation awards issued by the Company); and testing for impairment of long-lived assets (including the identification of asset groups by management, estimates of future cash flows of identified asset groups and fair value estimates used in connection with assessing the valuation of identified asset groups). The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Certain amounts relating to restricted cash ($330) and intangible assets – net ($668) in the accompanying condensed consolidated balance sheet at December 31, 2016, have been reclassified from prepaid expenses and other current assets and other noncurrent assets, respectively, to conform to current period presentation. Certain amounts relating to provision (recoveries) for slow-moving, obsolete and lower of cost or market inventories – net ($356) and amortization of debt issuance costs ($5) in the accompanying condensed statement of consolidated cash flows for the nine months ended September 30, 2016, have been reclassified from decrease in inventories and decrease in prepaid expenses and other assets, respectively, to conform to current period presentation.

Recently Adopted Accounting Guidance

On January 1, 2017, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory.” This ASU modifies existing guidance and is intended to reduce diversity in practice with respect to the accounting for the income tax consequences of intra-entity transfers of assets. The ASU indicates that the former exception to income tax accounting that requires companies to defer the income tax effects of certain intercompany transactions would apply only to intercompany inventory transactions. That is, the exception no longer applies

to intercompany sales and transfers of other assets ( e.g. , property and equipment or intangible assets). Under the former exception, income tax expense associated with intra-entity profits in an intercompany sale or transfer of assets was eliminated from earnings. Instead, that cost was deferred and recorded on the balance sheet ( e.g. , as a prepaid asset) until the assets left the consolidated gro up. Similarly, the entity was prohibited from recognizing deferred tax assets for the increases in tax bases due to the intercompany sale or transfer. A modified retrospective basis of adoption was required for this ASU. As a result, a cumulative-effect ad justment of approximately $408 has been recorded to accumulated deficit on January 1, 2017, in connection with this adoption. This cumulative-effect adjustment relates to the prepaid expense associated with intra-entity transfers of property and equipment included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet at December 31, 2016.

On January 1, 2017, the Company adopted FASB ASU 2016-17, “Consolidation: Interests Held through Related Parties That Are under Common Control.” This ASU modifies former guidance with respect to how a decision maker that holds an indirect interest in a variable interest entity (“VIE”) through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker needs to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. The Company does not have significant involvement with entities subject to consolidation considerations impacted by VIE model factors addressed by this ASU. Management has determined that the adoption of this ASU did not have an impact on the condensed consolidated financial statements of the Company.

On January 1, 2017, the Company adopted FASB ASU 2015-11, “Inventory: Simplifying the Measurement of Inventory.” This ASU requires inventories to be measured at the lower of cost and net realizable value, with net realizable value defined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation. Management has determined that the adoption of this ASU did not have an impact on the condensed consolidated financial statements of the Company.

Recently Issued Accounting Guidance

The Company considers the applicability and impact of all ASUs issued by the FASB. Recently issued ASUs not listed below were assessed and determined to be either not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In May 2017, the FAS B issued ASU 2017-09, “Compensation – Stock Compensation: Scope of Modification Accounting.” This ASU requires registrants to apply modification accounting unless three specific criteria are met. The three criteria are: the fair value of the award is the same before and after the modification, the vesting conditions are the same before and after the modification and the classification as a debt or equity award is the same before and after the modification. This ASU becomes effective for the Company on January 1, 2018, and is to be applied prospectively to new awards granted after adoption. Early adoption is permitted. Management is currently evaluating the potential impact of this ASU on the consolidated financial statements of the Company.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” This ASU is intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. This ASU becomes effective for the Company on January 1, 2019. Early adoption is permitted. Management is currently evaluating the potential impact of this ASU on the consolidated financial statements of the Company.

In February 2016, the FASB issued ASU 2016-02, “Leases.” As a result of this ASU, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. As a result of this ASU, lessor accounting is largely unchanged and lessees will no longer be provided with a source of off-balance sheet financing. This ASU becomes effective for the Company on January 1, 2019. Early adoption is permitted. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Management is currently evaluating the potential impact of this ASU on the consolidated financial statements of the Company.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This ASU created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue, and, therefore, supersedes virtually all existing revenue recognition requirements and guidance. This framework is expected to provide a consistent and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: identify the

contract(s) with a customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract(s), and recognize revenue when, or as , the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of this guidance for the Company until January 1, 2019, or January 1, 2018, in the event that the Company no longer qualifies as an EGC. Early adoption is permitted, but the Company may adopt the changes no earlier than January 1, 2017 (regardless of EGC status). Management is currently evaluating the potenti al impact of these collective changes on the consolidated financial statements of the Company.

Note 2. Liquidity

On February 6, 2013, the Company commenced an initial public offering of 6,095,000 shares of its common stock at a price to the public of $18.00 per share, of which 5,483,333 shares of common stock were sold by the Company and 611,667 shares of common stock were sold by a selling stockholder (including consideration of the exercise of the underwriters’ over-allotment option). The Company received approximately $90,371 in unrestricted net proceeds in connection with this offering (net of underwriting commissions and offering costs).

On September 9, 2013, the Company commenced a secondary public offering of 3,054,400 shares of its common stock at a price to the public of $62.00 per share, of which 1,106,000 shares of common stock were sold by the Company and 1,948,400 shares of common stock were sold by selling stockholders (including consideration of the exercise of the underwriters’ over-allotment option). The Company received approximately $64,948 in unrestricted net proceeds in connection with this offering (net of underwriting commissions and offering costs).

On January 8, 2016, the Company announced that it had entered into an At Market Issuance Sales Agreement (“ATM”) with FBR Capital Markets & Co. (“FBR”) and MLV & Co. LLC (“MLV”) pursuant to which FBR and MLV agreed to act as distribution agents in the sale of up to $50,000 in the aggregate of ExOne common stock in “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). Both FBR and MLV were identified as related parties to the Company on the basis of significant influence in that a member of the Board of Directors of the Company also served as a member of the Board of Directors of FBR (which controlled MLV). The terms of the ATM were reviewed and approved by a sub-committee of the Board of Directors of the Company (which included each of the members of the Audit Committee of the Board of Directors except for the identified director who also held a position on the Board of Directors of FBR). This related party determination ended on June 1, 2017, when the identified director ceased serving as a member of the Board of Directors of FBR. Terms of the ATM require a 3.0% commission on the sale of common stock under the ATM and an initial reimbursement of certain legal expenses of $25. During the quarter ended March 31, 2016, the Company sold 91,940 shares of common stock under the ATM at a weighted average selling price of approximately $9.17 per share resulting in gross proceeds to the Company of approximately $843. Unrestricted net proceeds to the Company from the sale of common stock under the ATM during the quarter ended March 31, 2016 were approximately $595 (after deducting offering costs of approximately $248, including certain legal, accounting and administrative costs associated with the ATM, of which approximately $50 was paid to FBR or MLV relating to the aforementioned initial reimbursement of certain legal expenses and commissions on the sale of common stock under the ATM). There have been no sales of shares of common stock under the ATM during any periods subsequent to the quarter ended March 31, 2016.

On January 11, 2016, the Company announced that it had entered into a subscription agreement with Rockwell Forest Products, Inc. and S. Kent Rockwell for the registered direct offering and sale of 1,423,877 shares of ExOne common stock at a per share price of $9.13 (a $0.50 premium from the closing price on the close of business on January 8, 2016). Both Rockwell Forest Products, Inc. and S. Kent Rockwell were identified as related parties to the Company as S. Kent Rockwell served as Chairman and CEO of the Company and was the controlling shareholder of Rockwell Forest Products, Inc. at the time of the transaction. The terms of this transaction were reviewed and approved by a sub-committee of independent members of the Board of Directors of the Company (which included each of the members of the Audit Committee of the Board of Directors). The sub-committee of independent members of the Board of Directors of the Company were advised on the transaction by an independent financial advisor and independent legal counsel. Concurrent with the approval of this sale of common stock under the terms identified, a separate sub-committee of independent members of the Board of Directors of the Company approved the termination of the Company’s revolving credit facility with RHI Investments, LLC. Following completion of the registered direct offering on January 13, 2016, the Company received gross proceeds of approximately $13,000. Unrestricted net proceeds to the Company from the sale of common stock in the registered direct offering were approximately $12,447 (after deducting offering costs of approximately $553).

The Company has incurred a net loss in each of its annual periods since its inception. As shown in the accompanying condensed statement of consolidated operations and comprehensive loss, the Company incurred a net loss of approximately $4,863 and $18,057 for the quarter and nine months ended September 30, 2017, respectively. As noted above, the Company has received cumulative unrestricted net proceeds from the sale of its common stock of approximately $168,361 to fund its operations. At September 30, 2017, the Company had approximately $17,706 in unrestricted cash and cash equivalents.

Management believes that the Company’s existing capital resources will be sufficient to support the Company’s operating plan. If management anticipates that the Company’s actual results will differ from its operating plan, management believes it has sufficient capabilities to enact cost savings measures to preserve capital. Further, the Company may seek to raise additional capital to support its growth through additional debt, equity or other alternatives (including asset sales) or a combination thereof.

Note 3. Accumulated Other Comprehensive Loss

The following table summarizes changes in the components of accumulated other comprehensive loss:

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
Foreign currency translation adjustments	2017			2016			2017			2016
Balance at beginning of period	$	(11,216	)	$	(11,736	)	$	(14,735	)	$	(13,535	)
Other comprehensive income		1,194			489			4,713			2,288
Balance at end of period	$	(10,022	)	$	(11,247	)	$	(10,022	)	$	(11,247	)

Foreign currency translation adjustments consist of the effect of translation of functional currency financial statements (denominated in the euro and Japanese yen) to the reporting currency of the Company (United States dollar) and certain long-term intercompany transactions between subsidiaries for which settlement is not planned or anticipated in the foreseeable future.

There were no tax impacts related to income tax rate changes and no amounts were reclassified to earnings for either of the periods presented.

Note 4. Loss Per Share

The Company presents basic and diluted loss per common share amounts. Basic loss per share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the applicable period. Diluted loss per share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares and common equivalent shares outstanding during the applicable period.

As the Company incurred a net loss during each of the quarters and nine months ended September 30, 2017 and 2016, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock, including stock options (696,137 – 2017 and 317,637 – 2016) and unvested restricted stock issued (67,505 – 2017 and 112,504 – 2016), was anti-dilutive.

The information used to compute basic and diluted loss per common share was as follows:

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net loss	$	(4,863	)	$	(3,611	)	$	(18,057	)	$	(12,030	)
Weighted average shares outstanding (basic and diluted)		16,069,453			15,997,146			16,048,257			15,912,628
Net loss per common share:
Basic	$	(0.30	)	$	(0.23	)	$	(1.13	)	$	(0.76	)
Diluted	$	(0.30	)	$	(0.23	)	$	(1.13	)	$	(0.76	)

Note 5. Restructuring

On January 26, 2017, the Company committed to a plan to consolidate certain of its three-dimensional (“3D”) printing operations from its North Las Vegas, Nevada facility into its Troy, Michigan and Houston, Texas facilities and exit its non-core specialty machining operations in its Chesterfield, Michigan facility. These actions were taken as a result of t he accelerating adoption rate of the Company’s sand printing technology in North America which has resulted in a refocus of the Company’s operational strategy.

As a result of these actions, during the quarter ended March 31, 2017, the Company recorded charges of approximately $984, including approximately $110 associated with involuntary employee terminations, approximately $7 associated with other exit costs and approximately $867 associated with asset impairments. Charges associated with involuntary employee terminations and other exit costs were recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss. Charges associated with asset impairments were split between cost of sales ($598), as a component of depreciation expense, and selling, general and administrative expenses ($269), as a component of amortization expense, in the accompanying condensed statement of operations and comprehensive loss. During the quarter ended June 30, 2017, the Company recorded a charge of approximately $32 associated with an additional involuntary employee termination which required a service commitment through April 2017. This charge was recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss. There have been no additional charges recorded associated with this plan in subsequent periods. There are no additional charges expected to be incurred associated with this plan in future periods. The Company has settled all amounts associated with involuntary employee terminations and other exit costs.

Charges associated with asset impairments relate principally to the Company’s plan to exit its non-core specialty machining operations in its Chesterfield, Michigan facility. On April 21, 2017, the Company sold to a third party certain assets associated with these operations including inventories (approximately $79), property and equipment (approximately $2,475) and other contractual

rights (approximately $269). Total gross proceeds from the sale of these assets were approximately $2,050. After deducting costs directly attributable to the sale of these assets (approximately $128), the Company recorded an impairment loss during the quarter ended March 31, 2017, of approximately $859 split between property and equipment ($590) and intangible assets ($269) based on the excess of the carrying v alue over the estimated fair value of the related assets at March 31, 2017, and a loss on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approxima tely $42. Additionally, the Company recorded an impairment loss during the quarter ended March 31, 2017, of approximately $8 associated with certain property and equipment which was abandoned in connection with the Company’s exit of its North Las Vegas, Ne vada facility.

Separate from the transaction described above, on May 9, 2017, the Company sold to a third party certain property and equipment (principally land and building) associated with its North Las Vegas, Nevada facility. Total gross proceeds from the sale of these assets were approximately $1,950. After deducting costs directly attributable to the sale of these assets (approximately $137), the Company recorded a gain on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $347.

In April 2016, the Company committed to a plan to consolidate certain of its 3D printing operations in its Auburn, Washington facility into its North Las Vegas, Nevada facility and reorganize certain of its corporate departments as part of its 2016 operating plan. As a result of these actions, during the quarter ended June 30, 2016, the Company incurred a net charge of approximately $170 including, $57 associated with involuntary employee terminations and $113 associated with the disposal of certain property and equipment related to the Auburn, Washington facility which was either sold or abandoned. This net charge was split between cost of sales ($129), research and development ($2) and selling, general and administrative expenses ($39) in the accompanying statement of consolidated operations and comprehensive loss. In addition to the net charge incurred by the Company in connection with this plan, the Company also has an operating lease commitment for the Auburn, Washington facility with a lease term through December 2018. At the time of closure of this facility, the Company was able to secure a firmly committed sublease arrangement with a third party which fully offsets its remaining contractual operating lease liability. There have been no additional charges recorded associated with this plan in subsequent periods. There are no additional charges expected to be incurred associated with this plan in future periods. The Company has settled all amounts associated with involuntary employee terminations.

Note 6. Impairment

During the quarter ended September 30, 2017, as a result of continued operating losses and cash flow deficiencies, the Company identified a triggering event requiring a test for the recoverability of long-lived assets held for use at the asset group level. Assessing the recoverability of long-lived assets held for use requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, the Company operates as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held for use, the Company determined the carrying amount of long-lived assets held for use to be in excess of the estimated future undiscounted net cash flows of the related assets. The Company proceeded to determine the fair value of its long-lived assets held for use, principally through use of the market approach. The Company’s use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held for use exceeded their carrying value and as such no impairment loss was recorded .

A significant decrease in the market price of a long-lived asset, adverse change in the use or condition of a long-lived asset, adverse change in the business climate or legal or regulatory factors impacting a long-lived asset and continued operating losses and cash flow deficiencies associated with a long-lived asset, among other indicators, could cause a future assessment to be performed which may result in an impairment of long-lived assets held for use, resulting in a material adverse effect on the financial position and results of operations of the Company.

Note 7. Cash, Cash Equivalents, and Restricted Cash

The following provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the accompanying condensed consolidated balance sheet to the same such amounts shown in the accompanying condensed statement of consolidated cash flows:

	September 30,		December 31,
	2017		2016
Cash and cash equivalents	$	17,706	$	27,825
Restricted cash		1,098		330
Cash, cash equivalents, and restricted cash shown in the condensed statement of consolidated cash flows	$	18,804	$	28,155

Restricted cash at September 30, 2017 includes approximately $768 associated with cash collateral required by a German bank for a financial guarantee issued by ExOne GmbH in connection with a commercial transaction requiring security. Restricted cash at both September 30, 2017 and December 31, 2016 includes approximatel y $330 associated with cash collateral required by a United States bank to offset certain short-term, unsecured lending commitments associated with the Company’s corporate credit card program. Each of the balances described are considered legally restricte d by the Company.

Note 8. Inventories

Inventories consist of the following:

	September 30,		December 31,
	2017		2016
Raw materials and components	$	7,306	$	7,429
Work in process		6,253		5,166
Finished goods		3,084		3,243
	$	16,643	$	15,838

Raw materials and components consist of consumable materials and component parts and subassemblies associated with 3D printing machine manufacturing and support activities. Work in process consists of 3D printing machines and other products in varying stages of completion. Finished goods consist of 3D printing machines and other products prepared for sale in accordance with customer specifications.

At September 30, 2017 and December 31, 2016, the allowance for slow-moving and obsolete inventories was approximately $3,364 and $1,517, respectively, and has been reflected as a reduction to inventories (principally raw materials and components). Included in the allowance for slow-moving and obsolete inventories at September 30, 2017, is approximately $1,631 related to certain raw material and component inventories associated with the Company’s Exerial 3D printing machine platform (see further discussion below).

During the quarter ended June 30, 2017, the Company recorded a charge of approximately $1,460 to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss attributable to certain raw material and component inventories (principally machine frames and other fabricated components) associated with the Company’s Exerial 3D printing machine platform based on decisions made by the Company during the period related to certain design changes and improvements to the underlying platform (rendering certain elements of the previous design obsolete).

During the quarter ended June 30, 2016, the Company recorded a credit of approximately $507 to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss attributable to the reversal of a previously recorded reserve for certain inventories associated with the Company’s laser micromachining product line which was discontinued at the end of 2014, based on the sale of such laser micromachining inventories during the period.

During the quarter and nine months ended September 30, 2017, the Company recorded a (credit) charge of approximately ($11) and $116, respectively, to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss associated with certain work in process inventories for which cost was determined to exceed net realizable value. There were no such credits or charges recorded by the Company during the quarter or nine months ended September 30, 2016.

Note 9. Product Warranty Reserves

Substantially all of the Company’s 3D printing machines are covered by a standard twelve month warranty. Generally, at the time of sale, a liability is recorded (with an offset to cost of sales) based upon the expected cost of replacement parts and labor to be incurred over the life of the standard warranty. Expected cost is estimated using historical experience for similar products. The Company periodically assesses the adequacy of the product warranty reserves based on changes in these factors and records any necessary adjustments if actual experience indicates that adjustments are necessary. Future claims experience could be materially different from prior results because of the introduction of new, more complex products, a change in the Company’s warranty policy in response to industry trends, competition or other external forces, or manufacturing changes that could impact product quality. In the event that the Company determines that its current or future product repair and replacement costs exceed estimates, an adjustment to these reserves would be charged to cost of sales in the period such a determination is made.

The following table summarizes changes in product warranty reserves (such amounts reflected in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet for each respective period):

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Balance at beginning of period	$	1,075		$	992		$	1,115		$	1,308
Provisions for new issuances		243			403			763			699
Payments		(174	)		(146	)		(427	)		(648	)
Reserve adjustments		(100	)		(89	)		(466	)		(235	)
Foreign currency translation adjustments		14			4			73			40
Balance at end of period	$	1,058		$	1,164		$	1,058		$	1,164

Note 10. Contingencies and Commitments

Contingencies

On July 1, 2017, the Company (through its ExOne GmbH subsidiary) entered into a Settlement Agreement with Kocel Foundry Limited (also known as Kocel CSR Casting Company, Limited) and Kocel Group (Hong Kong) Limited (collectively, “Kocel”) relating to settlement of the arbitration case (no. 100019-2017) administered by the Swiss Chambers’ Arbitration Institution Notice of Arbitration, as filed by the Company on January 25, 2017. Among other things, the Settlement Agreement provided for a cash payment from ExOne GmbH to Kocel of approximately $811 and a settlement and release of claims related to a sales agreement between the parties for certain 3D printing machines and related equipment (the “Sales Agreement”). Based on the terms of the Settlement Agreement, including the final acceptance by Kocel of the 3D printing machines and related equipment, and relief from further obligation, liability or warranty for both parties (excluding certain intellectual property considerations), the Company recorded revenue of approximately $2,762 associated with the Sales Agreement (net of the cash payment made by ExOne GmbH to Kocel, such payment made on July 5, 2017) and the related cost of sales, during the quarter ending September 30, 2017.

The Company and its subsidiaries are subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. Other than the matter further described above, management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on the financial position, results of operations or cash flows of the Company.

Commitments

In the normal course of its operations, ExOne GmbH issues financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security. ExOne GmbH maintains a credit facility agreement with a German bank which provides for various short-term financings in the form of overdraft credit, financial guarantees, letters of credit and collateral security for commercial transactions for approximately $1,500 (€1,300). In addition, ExOne GmbH may use the credit facility agreement for short-term, fixed-rate loans in minimum increments of approximately $100 (€100) with minimum terms of at least thirty days. The overdraft credit interest rate is fixed at 10.2% while the interest rate associated with commercial transactions requiring security (financial guarantees, letters of credit or collateral security) is fixed at 1.75%. The credit facility agreement has an indefinite term and is subject to cancellation by either party at any time upon repayment of amounts outstanding or expiration of commercial transactions requiring security. There is no commitment fee associated with the credit facility agreement. There are no negative covenants associated with the credit facility agreement. The credit facility agreement has been guaranteed by the Company. At September 30, 2017 and December 31, 2016, there were no outstanding borrowings in the form of overdraft credit or short-term loans under the credit facility agreement. At September 30, 2017, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under the credit facility agreement were approximately $865 (€732). Included in the total outstanding financial guarantees and letters of credit issued by ExOne GmbH are approximately $584 (€494) with expiration dates ranging from October 2017 through July 2018 and approximately $281 (€238) which have no expiration date. At December 31, 2016, total outstanding guarantees and letters of credit issued by ExOne GmbH under the credit facility agreement were approximately $400 (€380).

In addition to amounts issued by ExOne GmbH under the credit facility agreement, during the quarter ended March 31, 2017, ExOne GmbH entered into separate agreements with the same German bank for additional capacity for financial guarantees and letters of credit associated with certain commercial transactions requiring security. Terms of the separate agreements are substantially similar to those of the existing credit security agreement except that the German bank required cash collateral to be posted by ExOne GmbH in connection with any related issuance. At September 30, 2017, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under these separate agreements were approximately $768 (€650) which expired in October 2017.

Note 11. Income Taxes

The provision for income taxes for the quarters ended September 30, 2017 and 2016 was $14 and $25, respectively. The provision for income taxes for the nine months ended September 30, 2017 and 2016 was $23 and $43, respectively. The Company has completed a discrete period computation of its provision for income taxes for each of the periods presented. Discrete period computation is as a result of jurisdictions with losses before income taxes for which no tax benefit can be recognized and an inability to generate reliable estimates for results in certain jurisdictions as a result of inconsistencies in generating net operating profits (losses) in those jurisdictions.

The effective tax rate for the quarters ended September 30, 2017 and 2016 was 0.3% (provi sion on a loss) and 0.7% (provision on a loss), respectively. The effective tax rate for the nine months ended September 30, 2017 and 2016 was 0.1% (provision on a loss) and 0.4% (provision on a loss), respectively. The effective tax rate differs from the United States federal statutory rate of 34.0% for each of the periods presented primarily due to net changes in valuation allowances for the periods.

The Company has provided a valuation allowance for its net deferred tax assets as a result of the Company not generating consistent net operating profits in jurisdictions in which it operates. As such, any benefit from deferred taxes in any of the periods presented has been fully offset by changes in the valuation allowance for net deferred tax assets. The Company continues to assess its future taxable income by jurisdiction based on recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that the Company may be able to enact in future periods, the impact of potential operating changes on the business and forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that the Company is able to reach the conclusion that its net deferred tax assets are realizable based on any combination of the above factors in a single, or in multiple, taxing jurisdictions, a reversal of the related portion of the Company’s existing valuation allowances may occur.

The Company has a liability for uncertain tax positions related to certain capitalized expenses and intercompany transactions. At September 30, 2017 and December 31, 2016, the liability for uncertain tax positions was approximately $846 and $754, respectively, and is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet. At September 30, 2017 and December 31, 2016, the Company had an additional liability for uncertain tax positions related to its ExOne GmbH (Germany) subsidiary of approximately $304 and $232, respectively, which were fully offset against net operating loss carryforwards. At September 30, 2017 and December 31, 2016, the Company had an additional liability for uncertain tax positions related to its ExOne KK (Japan) subsidiary of approximately $554 and $416, respectively, which were fully offset against net operating loss carryforwards.

In July 2017, local taxing authorities in Japan completed their examination of the Company’s ExOne KK (2014-2016) subsidiary, resulting in an income tax obligation of approximately $5, which was reflected in the provision for income taxes in the accompanying condensed statement of consolidated operations during the quarter ended June 30, 2017. At September 30, 2017, the Company’s ExOne GmbH (2010-2013) and ExOne Property GmbH (2013) subsidiaries were under examination by local taxing authorities. The Company is unable to reasonably predict an outcome related to this examination, the result of which may be material in a future period to the financial position, results from operations and cash flows of the Company.

Note 12. Equity-Based Compensation

On January 24, 2013, the Board of Directors of the Company adopted the 2013 Equity Incentive Plan (the “Plan”). In connection with the adoption of the Plan, 500,000 shares of common stock were reserved for issuance pursuant to the Plan, with automatic increases in such reserve available each year annually on January 1 from 2014 through 2023 equal to the lesser of 3.0% of the total outstanding shares of common stock as of December 31 of the immediately preceding year or, a number of shares of common stock determined by the Board of Directors, provided that the maximum number of shares authorized under the Plan will not exceed 1,992,241 shares, subject to certain adjustments.

Stock options and restricted stock issued by the Company are generally subject to service conditions resulting in annual vesting on the anniversary of the date of grant over a period typically ranging between one and three years. Certain stock options and restricted stock issued by the Company vest immediately upon issuance. Stock options issued by the Company have a contractual life which expires over a period typically ranging between five and ten years from the date of grant subject to continued service to the Company by the participant .

The following table summarizes the total equity-based compensation expense recognized for awards issued under the Plan:

	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Equity-based compensation expense recognized:
Stock options	$	768	$	347	$	1,244	$	490
Restricted stock		440		203		799		614
Total equity-based compensation expense before income taxes		1,208		550		2,043		1,104
Benefit for income taxes*		—		—		—		—
Total equity-based compensation expense net of income taxes	$	1,208	$	550	$	2,043	$	1,104

*	The benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on valuation allowances against net deferred tax assets.

At September 30, 2017, total future compensation expense related to unvested awards yet to be recognized by the Company was approximately $1,145 for stock options and $449 for restricted stock. Total future compensation expense related to unvested awards

yet to be recognized by the Company is expected to be recognized over a weighted-average remaining vesting period of approximately 1.3 years.

During the nine months ended September 30, 2017, the fair value of stock options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	February 10, 2017	August 14, 2017
Weighted average fair value per stock option	$5.46 - $5.75	$3.40 - $4.38
Volatility	62.89% - 63.75%	61.68% - 67.92%
Average risk-free interest rate	1.89% - 1.94%	1.40% - 1.82%
Dividend yield	0.00%	0.00%
Expected term (years)	5.0 - 5.5	2.5 - 5.5

During the nine months ended September 30, 2016, the fair value of stock options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	August 12, 2016		August 19, 2016
Weighted average fair value per stock option	$8.07		$7.97
Volatility		66.43%		66.24%
Average risk-free interest rate		1.18%		1.20%
Dividend yield		0.00%		0.00%
Expected term (years)		6.0		5.5

For certain stock option awards, volatility is estimated based on the historical volatility of the Company when the expected term of the award is less than the period for which the Company has been publicly traded. For certain stock option awards, volatility is estimated based on the historical volatilities of certain peer group companies when the expected term of the award exceeds the period for which the Company has been publicly traded. The average risk-free rate is based on a weighted average yield curve of risk-free interest rates consistent with the expected term of the awards. Expected dividend yield is based on historical dividend data as well as future expectations. Expected term is calculated using the simplified method as the Company does not have sufficient historical exercise experience upon which to base an estimate.

The activity for stock options was as follows:

	Nine Months Ended
	2017							2016
	Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Outstanding at beginning of period		314,303		$	15.62	$	9.38		210,970		$	17.43	$	10.67
Stock options granted		389,000		$	8.16	$	3.89		139,000		$	13.72	$	8.00
Stock options exercised		—		$	—	$	—		—		$	—	$	—
Stock options forfeited		(500	)	$	15.74	$	9.60		(6,001	)	$	15.74	$	9.60
Stock options expired		(6,666	)	$	17.43	$	10.67		(26,332	)	$	17.74	$	10.87
Outstanding at end of period		696,137		$	11.51	$	6.35		317,637		$	15.77	$	9.48
Stock options exercisable at end of period		427,953		$	12.67	$	7.16		178,304		$	17.01	$	10.32
Stock options expected to vest at end of period		268,184		$	9.66	$	5.06		132,908		$	14.18	$	8.38

At September 30, 2017, intrinsic value associated with stock options exercisable was approximately $586. At September 30, 2017, intrinsic value associated with stock options expected to vest was approximately $659. The weighted average remaining contractual term of stock options exercisable and expected to vest at September 30, 2017, was approximately 6.7 years and 7.2 years, respectively. There were no stock option exercises during the nine months ended September 30, 2017 or 2016.

The activity for restricted stock was as follows:

	Nine Months Ended
	2017					2016
	Shares of Restricted Stock			Weighted Average Grant Date Fair Value		Shares of Restricted Stock			Weighted Average Grant Date Fair Value
Outstanding at beginning of period		94,171		$	14.29		77,670		$	19.57
Restricted stock granted		60,000		$	9.01		74,500		$	11.78
Restricted stock vested		(74,999	)	$	12.40		(35,998	)	$	19.25
Restricted stock forfeited		(11,667	)	$	14.28		(3,668	)	$	19.46
Outstanding at end of period		67,505		$	11.69		112,504		$	14.52
Restricted stock expected to vest at end of period		67,505		$	11.69		112,504		$	14.52

Restricted stock vested during the nine months ended September 30, 2017 and 2016, had a fair value of approximately $670 and $351, respectively.

Note 13. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1		Observable inputs such as quoted prices in active markets for identical investments that the Company has the ability to access.

Level 2		Inputs include:

		Quoted prices for similar assets or liabilities in active markets;

		Quoted prices for identical or similar assets or liabilities in inactive markets;

		Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

		Inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.

Level 3		Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The Company is required to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities in its consolidated financial statements, in accordance with GAAP.

During the quarter ended March 31, 2017, the Company entered into two separate foreign exchange forward contracts with a German bank in an effort to hedge the variability of certain foreign exchange risks between the Euro (the functional currency of the Company’s ExOne GmbH subsidiary) and British Pound Sterling (the currency basis for cash flows resulting from a commercial sales arrangement with a customer). The first of the two foreign exchange forward co ntracts was both entered into and settled (in connection with cash received from the customer) during the quarter ended March 31, 2017, resulting in a realized gain on settlement of approximately $16 ( € 15). The second of the two foreign exchange forward co ntracts was settled on August 31, 2017, resulting in a realized gain on settlement of approximately $14 ( € 12). Neither of the contracts was designated as a hedging instrument and accordingly, realized and unrealized gains (losses) for all periods have been recorded to other (income) expense – net in the accompanying condensed statement of consolidated operations and comprehensive loss. The Company has classified both contracts as Level 2 fair value measurements.

The carrying values and fair values of other financial instruments (assets and liabilities) not required to be recorded at fair value were as follows:

	September 30,				December 31,
	2017				2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	17,706	$	17,706	$	27,825	$	27,825
Restricted cash	$	1,098	$	1,098	$	330	$	330
Current portion of long-term debt*	$	135	$	140	$	132	$	138
Current portion of capital leases	$	25	$	25	$	72	$	72
Long-term debt ̶ net of current portion*	$	1,543	$	1,570	$	1,644	$	1,674
Capital leases ̶ net of current portion	$	41	$	41	$	10	$	10

* Carrying values at September 30, 2017 and December 31, 2016 are net of unamortized debt issuance costs of approximately $32 and $36, respectively.

The carrying amounts of cash and cash equivalents, restricted cash, current portion of long-term debt and current portion of capital leases approximate fair value due to their short-term maturities. The fair value of long-term debt – net of current portion and capital leases – net of current portion have been estimated by management based on the consideration of applicable interest rates (including certain instruments at variable or floating rates) and other available information (including quoted prices of similar instruments available to the Company). Cash and cash equivalents and restricted cash are classified in Level 1; current portion of long-term debt, current portion of capital leases, long-term debt – net of current portion and capital leases – net of current portion are classified in Level 2 .

Note 14. Concentration of Credit Risk

During the quarters and nine months ended September 30, 2017 and 2016, the Company conducted a significant portion of its business with a limited number of customers, though not necessarily the same customers for each respective period. For the quarters ended September 30, 2017 and 2016, the Company’s five most significant customers represented approximately 46.0% and 36.0% of total revenue, respectively. For the nine months ended September 30, 2017 and 2016, the Company’s five most significant customers represented approximately 22.2% and 21.4% of total revenue, respectively. At September 30, 2017 and December 31, 2016, accounts receivable from the Company’s five most significant customers were approximately $2,293 and $1,867, respectively.

Note 15. Related Party Transactions

Revenues

Sales of products and/or services to related parties for the quarters ended September 30, 2017 and 2016 were approximately $8 and $1, respectively. Sales of products and/or services to related parties for the nine months ended September 30, 2017 and 2016 were approximately $25 and $73, respectively. None of the transactions met a threshold requiring review and approval by the Audit Committee of the Board of Directors of the Company.

There were no amounts due from related parties at September 30, 2017. Amounts due from related parties at December 31, 2016, were approximately $1 and are reflected in accounts receivable – net in the accompanying condensed consolidated balance sheet. In addition, the Company has received prepayments for certain undelivered services to a related party of approximately $8 at September 30, 2017, which are reflected in deferred revenue and customer prepayments in the accompanying condensed consolidated balance sheet. There were no prepayments received from related parties at December 31, 2016.

Expenses

During the quarters ended September 30, 2017 and 2016, purchases from related parties were approximately $4 and $3, respectively. During the nine months ended September 30, 2017 and 2016, purchases from related parties were approximately $12 and $13, respectively. Purchases by the Company during the quarters and nine months ended September 30, 2017 and 2016 included website design services and leased office space from related parties under common control by the Executive Chairman of the Company (formerly the Chairman and CEO of the Company through August 19, 2016). None of the transactions met a threshold requiring review and approval by the Audit Committee of the Board of Directors of the Company.

The Company also receives the benefit of the corporate use of an airplane from a related party under common control by the Executive Chairman of the Company (formerly the Chairman and CEO of the Company through August 19, 2016) for no consi deration. The Company estimates the fair market value of the benefits received during the quarter and nine months ended September 30, 2016 were approximately $17 and $21, respectively. There were no such benefits received during the quarter or nine months ended September 30, 2017.

Amounts due to related parties at September 30, 2017 and December 31, 2016, were approximately $1 and $1, respectively. Amounts due to related parties for both periods are reflected in accounts payable in the accompanying condensed consolidated balance sheet.

Revolving Credit Facility with a Related Party

On October 23, 2015, ExOne and its ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors, entered into a Credit Agreement (the “Credit Agreement”) with RHI Investments, LLC (“RHI”), a related party, on a $15,000 revolving credit facility to (i) assist the Company in its efforts to finance customer acquisition of its 3D printing machines and 3D printed and other products and services and (ii) provide additional funding for working capital and general corporate purposes. RHI was determined to be a related party based on common control by the former Chairman and CEO of the Company (the Executive Chairman of the Company effective August 19, 2016). Prior to execution, the Credit Agreement was subject to review and approval by a sub-committee of independent members of the Board of Directors of the Company (which included each of the members of the Audit Committee of the Board of Directors). The Company incurred approximately $215 in debt issuance costs associated with the Credit Agreement.

On January 10, 2016, the Company delivered notice to RHI of its intent to terminate the Credit Agreement in connection with the closing of a registered direct offering of common stock to an entity under common control by the former Chairman and CEO of the Company (the Executive Chairman of the Company effective August 19, 2016) . There were no borrowings under the Credit Agreement from January 1, 2016 through the effective date of its termination, January 13, 2016. In connection with the termination, the Company settled its remaining accrued interest under the Credit Agreement of approximately $5 relating to the commitment fee on the unused portion of the revolving credit facility (100 basis points, or 1.0% on the unused portion of the revolving credit facility) . In addition, during the quarter ended March 31, 2016, the Company recorded approximately $204 to interest expense related to the accelerated amortization of debt issuance costs. Upon termination of the Credit Agreement, all liens and guaranties in respect thereof were released.

Other

Refer to Note 2 for further discussion relating to two separate equity offerings during the quarter ended March 31, 2016, certain elements of which qualified as related party transactions.

Note 16. Subsequent Events

The Company has evaluated all of its activities and concluded that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollars in thousands, except per-share amounts)

The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and related notes thereto set forth in this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the year ended December 31, 2016.

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to our future financial or business performance, strategies, or expectations. Forward-looking statements typically are identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” as well as similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could” and “may.”

We caution that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to items described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: our ability to enhance our current 3D printing machines and technology and develop new 3D printing machines ; our ability to qualify more industrial materials in which we can print; timing and length of sales of 3D printing machines; demand for our products; our ability to achieve cost savings through consolidation or exiting of certain North American operations ; the impact of increases in operating expenses and expenses relating to proposed investments and alliances; the availability of skilled personnel; the impact of market conditions and other factors on the carr ying value of long-lived assets; our competitive environment and our competitive position; our ability to continue as a going concern ; individual customer contractual requirements; the impact of customer specific terms in machine sale agreements on the per iod in which we recognize revenue ; the impact of loss of key management; risks related to global operations including effects of foreign currency and risks related to the situation in the Ukraine and the United Kingdom’s referendum to withdraw from the Eur opean Union; demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products ; our plans regarding increased international operations in additional international locations; the scope, nature or impact of alliances and strateg ic investments and our ability to integrate strategic investments ; sufficiency of funds for required capital expenditures, working capital, and debt service; the adequacy of sources of liquidity; the effect of litigation, contingencies and warranty claims; liabilities under laws and regulations protecting the environment; the impact of governmental laws and regulations; operating hazards, war, terrorism and cancellation or unavailability of insurance coverage; the impact of disruption of our manufacturing facilities, production service centers (“PSCs”) or ExOne adoption centers (“EACs”); the adequacy of our protection of our intellectual property; expectations regarding demand for our industrial products, operating revenues, operating and maintenance expense s, insuran ce expenses and deductibles, interest expenses, debt levels, and other matters with regard to outlook; and material weaknesses in our internal control over financial reporting .

Overview

Our Business

We are a global provider of 3D printing machines and 3D printed and other products, materials and services to industrial customers. Our business primarily consists of manufacturing and selling 3D printing machines and printing products to specification for our customers using our installed base of 3D printing machines. Our machines serve direct and indirect applications. Direct printing produces a component; indirect printing makes a tool to produce a component. We offer pre-production collaboration and print products for customers through our network of PSCs and EACs. We also supply the associated materials, including consumables and replacement parts, and other services, including training and technical support that is necessary for purchasers of our 3D printing machines to print products. We believe that our ability to print in a variety of industrial materials, as well as our industry-leading volumetric output (as measured by build box size and printing speed) uniquely position us to serve the needs of industrial customers .

Outlook

Our 2017 priorities include the following:

•

Continue to accelerate the adoption rate of binder jet technologies. We plan to grow our market leading position with respect to 3D printing solutions for customers and continue advancing our innovations in direct and indirect printing, principally through an expansion of our fine powder direct printing capabilities and development activities associated with larger format direct and indirect 3D printing machines.

•

Evaluation of our business model. We continue to focus our efforts on optimizing our business model, including maximizing our facility utilization and our gross profit. We have consolidated certain of our operations to achieve

efficiencies and we will continue to consider additional strategic decisions resulting in further consolidation, elimination or other modification to our existing machine manufacturing, PSC and other operations, including, but not limited to, converting certain of our PSCs into EACs. We are reviewing our product lines to better manage our prod uct marketing and delivery to our customers to accelerate the adoption rate of our technologies. We are continuously reviewing the industry for developments in printing technologies, materials, methods, innovations, or services that offer strategic benefit s that can improve, accelerate or advance our products or services.

•

Strengthening our commercial team and reprioritizing our focus. We have added new talent to our commercial leadership team and have added new tools and processes to improve the efficiency and effectiveness of our selling efforts. As our global installed base of 3D printing machines continues to grow, we continue to invest in our customer-centric approach to managing our operations (including talent addition and the process of converting certain of our PSCs into EACs). Our goal is to collaborate with our customers and remain the market leader and supplier of choice for binder jet technologies and products for industrial applications.

Recent Developments

On January 26, 2017, we committed to a plan to consolidate certain of our 3D printing operations from our North Las Vegas, Nevada facility into our Troy, Michigan and Houston, Texas facilities and exit our non-core specialty machining operations in our Chesterfield, Michigan facility. These actions were taken as a result of t he accelerating adoption rate of our sand printing technology in North America which has resulted in a refocus of our operational strategy.

As a result of these actions, during the quarter ended March 31, 2017, we recorded charges of approximately $984, including approximately $110 associated with involuntary employee terminations, approximately $7 associated with other exit costs and approximately $867 associated with asset impairments. Charges associated with involuntary employee terminations and other exit costs were recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss. Charges associated with asset impairments were split between cost of sales ($598), as a component of depreciation expense, and selling, general and administrative expenses ($269), as a component of amortization expense, in the accompanying condensed statement of operations and comprehensive loss. During the quarter ended June 30, 2017, we recorded a charge of approximately $32 associated with an additional involuntary employee termination which required a service commitment through April 2017. This charge was recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss. There have been no additional charges recorded associated with this plan in subsequent periods. There are no additional charges expected to be incurred associated with this plan in future periods. We have settled all amounts associated with involuntary employee terminations and other exit costs.

Charges associated with asset impairments relate principally to our plan to exit our non-core specialty machining operations in our Chesterfield, Michigan facility. On April 21, 2017, we sold to a third party certain assets associated with these operations including inventories (approximately $79), property and equipment (approximately $2,475) and other contractual rights (approximately $269). Total gross proceeds from the sale of these assets were approximately $2,050. After deducting costs directly attributable to the sale of these assets (approximately $128), we recorded an impairment loss during the quarter ended March 31, 2017, of approximately $859 split between property and equipment ($590) and intangible assets ($269) based on the excess of the carrying value over the estimated fair value of the related assets at March 31, 2017, and a loss on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $42. Additionally, we recorded an impairment loss during the quarter ended March 31, 2017, of approximately $8 associated with certain property and equipment which was abandoned in connection with our plan to exit our North Las Vegas, Nevada facility.

Separate from the transaction described above, on May 9, 2017, we sold to a third party certain property and equipment (principally land and building) associated with our North Las Vegas, Nevada facility. Total gross proceeds from the sale of these assets were approximately $1,950. After deducting costs directly attributable to the sale of these assets (approximately $137), we recorded a gain on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $347.

The consolidation of our 3D printing operations from our North Las Vegas, Nevada facility into our Troy, Michigan and Houston, Texas facilities is not expected to have a significant impact on our revenues in future periods. We expect annualized cost savings related to this consolidation of approximately $600, with approximately $570 in the form of cash cost savings (principally employee and facility maintenance costs) and approximately $30 in the form of reduced depreciation expense. All cost savings associated with this consolidation are expected to benefit cost of sales. We expect to invest these cost savings into technological or process advancements that support either long-term cost benefits or revenue growth.

We expect annualized reductions in revenue related to our exit of our non-core specialty machining operations in our Chesterfield, Michigan facility of approximately $1,400. Revenues associated with our non-core specialty machining operations in our Chesterfield, Michigan facility were approximately $346 for the nine months ended September 30, 2017 and approximately $427 and $1,075 for the quarter and nine months ended Septemb er 30, 2016, respectively. We expect annualized cost savings related to this exit of approximately $500, with approximately $200 in the form of cash cost savings (principally employee-related and other operating costs), approximately $200 in the form of re duced depreciation expense and approximately $100 in the form of reduced amortization expense. Cost savings associated with the exit of this facility are expected to benefit cost of sales by approximately $400 and selling, general and administrative expens es by approximately $100. We expect to invest these cost savings into technological or process advancements that support either long-term cost benefits or revenue growth.

On March 22, 2017, we terminated our Cooperation Agreement with Swerea SWECAST AB (“Swerea”), resulting in an exit of our PSC operations in Jönköping, Sweden, effective April 1, 2017. Also on March 22, 2017, we agreed to a leasing agreement with Beijer Industri AB, effective April 1, 2017, related to our 3D printing machine and related equipment located on the Swerea premises, previously covered under our Cooperation Agreement with Swerea. Both of these actions were taken in connection with our continuing evaluation of our business model in an effort to both streamline our existing European operations, and to take strategic advantage of our existing relationship with Beijer Industri AB in promoting indirect binder jet technologies in Scandinavia. There were no penalties or other adverse effects associated with our termination of our Cooperation Agreement with Swerea. There were no significant effects on our results of operations or financial position associated with these actions.

Impairment

During the quarter ended September 30, 2017, as a result of continued operating losses and cash flow deficiencies, we identified a triggering event requiring a test for the recoverability of long-lived assets held for use at the asset group level. Assessing the recoverability of long-lived assets held for use requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, we operate as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held for use, we determined the carrying amount of long-lived assets held for use to be in excess of the estimated future undiscounted net cash flows of the related assets. We proceeded to determine the fair value of our long-lived assets held for use, principally through use of the market approach. Our use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held for use exceeded their carrying value and as such no impairment loss was recorded .

A significant decrease in the market price of a long-lived asset, adverse change in the use or condition of a long-lived asset, adverse change in the business climate or legal or regulatory factors impacting a long-lived asset and continued operating los ses and cash flow deficiencies associated with a long-lived asset, among other indicators, could cause a future assessment to be performed which may result in an impairment of long-lived assets held for use, resulting in a material adverse effect on our financial position and results of operations.

Backlog

At September 30, 2017, our backlog was approximately $20,900 of which approximately $17,900 is expected to be fulfilled during the next twelve months. At December 31, 2016, our backlog was approximately $19,700.

Results of Operations

Net Loss

Net loss for the quarter ended September 30, 2017, was $4,863, or $0.30 per basic and diluted share, compared with a net loss of $3,611 or $0.23 per basic and diluted share, for the quarter ended September 30, 2016. Net loss for the nine months ended September 30, 2017, was $18,057, or $1.13 per basic and diluted share, compared with a net loss of $12,030 or $0.76 per basic and diluted share, for the nine months ended September 30, 2016. The increase in our net loss for both periods was principally due to a net decrease in our gross profit (as a percentage of sales) along with increases in research and development and selling, general and administrative expenses (all changes further described below).

Revenue

The following table summarizes revenue by product line:

	Quarter Ended								Nine Months Ended
	September 30,								September 30,
	2017				2016				2017				2016
3D printing machines	$	8,552	53.8	%	$	6,489	50.0	%	$	17,081	45.5	%	$	13,461	40.6	%
3D printed and other products, materials and services		7,335	46.2	%		6,499	50.0	%		20,474	54.5	%		19,696	59.4	%
	$	15,887	100.0	%	$	12,988	100.0	%	$	37,555	100.0	%	$	33,157	100.0	%

Revenue for the quarter ended September 30, 2017, was $15,887 compared with revenue of $12,988 for the quarter ended September 30, 2016, an increase of $2,8 99, or 22.3%. The increase in revenue was as a result of increases in revenue attributable to both of our product lines (3D printing machines and 3D printed and other products, materials and services). The increase in revenues from 3D printing machines res ulted from a slightly higher volume of units sold (12 3D printing machines sold during the quarter ended September 30, 2017, as compared to 11 3D printing machines sold during the quarter ended September 30, 2016) and a favorable mix of 3D printing machine s sold (as we sold eight indirect printers during the quarter ended September 30, 2017, as compared to six indirect printers during the quarter ended September 30, 2016, indirect printers generally bearing a higher average selling price than direct printer s). The increase in revenues from 3D printed and other products, materials and services principally resulted from an increase in revenues from our direct PSC printing operations as a result of increased customer acceptance of our binder jet technologies an d an increase in service revenues (maintenance services and replacement components for 3D printing machines) based on an increased global installed base of 3D printing machines. These increases in revenues from 3D printed and other products, materials and services were offset by a decrease in product sales associated with our former specialty machining operation located in our Chesterfield, Michigan facility (approximately $427) following the sale of certain assets associated with this operation in April 20 17.

Revenue for the nine months ended September 30, 2017, was $37,555 compared with revenue of $33,157 for the nine months ended September 30, 2016, an increase of $4,398, or 13.3%. The increase in revenue was as a result of increases in revenue attributable to both of our product lines (3D printing machines and 3D printed and other products, materials and services). The increase in revenues from 3D printing machines resulted primarily from an increase in volume of 3D printing machines sold (25 3D printing machines sold during the nine months ended September 30, 2017, as compared to 21 3D printing machines sold during the nine months ended September 30, 2016) and a favorable mix of 3D printing machines sold (as we sold 14 indirect printers during the quarter ended September 30, 2017, as compared to 11 indirect printers during the quarter ended September 30, 2016, indirect printers generally bearing a higher average selling price than direct printers). The increase in revenues from 3D printed and other products, materials and services principally resulted from an increase in revenues from our direct PSC printing operations as a result of increased customer acceptance of our binder jet technologies and an increase in service revenues (maintenance services and replacement components for 3D printing machines) based on an increased global installed base of 3D printing machines. These increases in revenues from 3D printed and other products, materials and services were offset by a decrease in product sales associated with our former specialty machining operation located in our Chesterfield, Michigan facility (approximately $729) following the sale of certain assets associated with this operation in April 2017 and the absence of the sale of remaining inventories associated with our former laser micromachining product line (approximately $475) during the quarter ended June 30, 2016.

The following table summarizes 3D printing machines sold by type (refer to the “Our Machines and Machine Platforms” section of Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2016, for a description of 3D printing machines by type):

	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
3D printing machine units sold:
Exerial		4		—		4		—
S-Max+		1		—		1		1
S-Max		1		4		7		5
S-Print		2		1		2		3
S-15		—		1		—		2
M-Flex		2		1		6		3
Innovent		2		3		5		6
X1-Lab		—		1		—		1
		12		11		25		21

Cost of Sales and Gross Profit

Cost of sales for the quarter ended September 30, 2017, was $11,790 compared with cost of sales of $9,428 for the quarter ended September 30, 2016, an increase of $2,362, or 25.1%. The increase in cost of sales was primarily due to an increase in our variable cost of sales associated with our increase in revenues.

Gross profit for the quarter ended September 30, 2017, was $4,097 compared with gross profit of $3,560 for the quarter ended September 30, 2016. Gross profit percentage was 25.8% for the quarter ended September 30, 2017, compared with 27.4% for the quarter ended September 30, 2016. The change in gross profit was the result of the increase in revenues net of the increase in cost of sales as further described above. This includes our recognition of four Exerial 3D printing machines during the quarter ended September 30, 2017 (approximately $2,762), which yielded a break-even result on a contribution margin basis. Excluding these unit sales, we benefitted from overall higher realized pricing on 3D printing machine sales and better leverage of our fixed cost base due to higher sales of 3D printed and other products, materials and services.

Cost of sales for the nine months ended September 30, 2017, was $29,829 compared with cost of sales of $24,215 for the nine months ended September 30, 2016, an increase of $5,614, or 23.2%. The increase in cost of sales was primarily due to an i ncrease in our variable cost of sales associated with our increase in revenues. In addition, we recognized a net charge associated with slow-moving, obsolete and lower of cost or market inventories of approximately $1,872 during the nine months ended Septe mber 30, 2017, compared to a net recovery of approximately $356 during the nine months ended September 30, 2016. The net charge recorded during the nine months ended September 30, 2017, was primarily attributable to certain raw material and component inven tories (principally machine frames and other fabricated components) of approximately $1,460 recorded during the quarter ended June 30, 2017, associated with our Exerial 3D printing machine platform based on decisions made by us during the period related to certain design changes and improvements to the underlying platform (rendering certain elements of the previous design obsolete). The net recovery recorded during the nine months ended September 30, 2016, principally relates to the sale of certain inventor ies associated with our former laser micromachining product line (approximately $507) during the quarter ended June 30, 2016. Also, during the nine months ended September 30, 2017, we incurred costs of approximately $747 (approximately $142 in employee ter mination costs, $7 in other exit costs and $598 in asset impairments) associated with our consolidation of our 3D printing operations from our facility in North Las Vegas, Nevada into our Troy, Michigan and Houston, Texas facilities and our plan to exit ou r non-core specialty machining operations in Chesterfield, Michigan. These increases were offset by net gains on disposal of property and equipment recorded during the nine months ended September 30, 2017 (approximately $286), compared to net losses on dis posal of property and equipment recorded during the nine months ended September 30, 2016 (approximately $169). Net gains on disposal of property and equipment recorded during the nine months ended September 30, 2017, primarily related to our sale of certai n property and equipment (principally land and building) associated with our consolidation and exit of our North Las Vegas, Nevada PSC. Net losses on disposal of property and equipment recorded during the nine months ended September 30, 2016, primarily rel ated to our sale and abandonment of certain property and equipment associated with our consolidation and exit of our Auburn, Washington PSC and the sale of certain machinery and equipment associated with our former specialty machining operations in Chester field, Michigan.

Gross profit for the nine months ended September 30, 2017, was $7,726 compared with gross profit of $8,942 for the nine months ended September 30, 2016. Gross profit percentage was 20.6% for the nine months ended September 30, 2017, compared with 27.0% for the nine months ended September 30, 2016. The decrease in gross profit was the result of the increase in revenues net of the increase in cost of sales as further described above. This includes the aforementioned recognition of Exerial units during the quarter ended September 30, 2017. Excluding these unit sales, we benefitted from overall higher realized pricing on 3D printing machine sales and better leverage of our fixed cost base (net of the items further described above) due to higher sales of 3D printed and other products, materials and services.

Research and Development

Research and development expenses for the quarter ended September 30, 2017, were $2,871 compared with research and development expenses of $1,898 for the quarter ended September 30, 2016, an increase of $973, or 51.3%. The increase in research and development expenses was primarily due to increases in employee-related costs (salaries, benefits and equity-based compensation) of approximately $295 and consulting and professional fees associated with certain machine development and other organizational development activities of approximately $521.

Research and development expenses for the nine months ended September 30, 2017, were $7,219 compared with research and development expenses of $5,737 for the nine months ended September 30, 2016, an increase of $1,482, or 25.8%. The increase in research and development expenses was primarily due to increases in employee-related costs (salaries, benefits and equity-based compensation) of approximately $362, consulting and professional fees associated with certain machine development and other organizational development activities of approximately $852 and material costs of approximately $193 (primarily associated with fine powder direct printing development activities).

Selling, General and Administrative

Selling, general and administrative expenses for the quarter ended September 30, 2017, were $6,062 compared with selling, general and administrative expenses of $5,234 for the quarter ended September 30, 2016, an increase of $828, or 15.8%. The increase in selling, general and administrative expenses was principally due to increases in employee-related costs (principally salaries, benefits and equity-based compensation) of approximately $933 associated with our investment in our commercial leadership team and executive severance costs, and consulting and professional fees of approximately $324 (principally executive consulting, legal and other administrative arrangements). These increases were offset by decreases in trade show expenses of approximately $148 and a decrease in our provision for bad debts from customers (net recoveries of approximately $183 during the quarter ended September 30, 2017, compared to a net provision of approximately $15 during the quarter ended September 30, 2016).

Selling, general and administrative expenses for the nine months ended September 30, 2017, were $18,338 compared with selling, general and administrative expenses of $15,222 for the nine months ended September 30, 2016, an increase of $3,116, or 20.5%. The increase in selling, general and administrative expenses was principally due to increases in employee-related costs (salaries, benefits and equity-based compensation) of approximately $1,522 associated with our investment in our commercial leadership team and executive severance costs, consulting and professional fees of approximately $819 (principally executive consulting, legal and other administrative arrangements), lower net recoveries for bad debts from customers (net recoveries of approximately $51 during the nine months ended September 30, 2017, compared to net recoveries of approximately $256 during the nine months ended September 30,

2016), an impairment of intangible assets of approxima tely $269 during the quarter ended March 31, 2017, in connection with our plan to exit our non-core specialty machining operations at our Chesterfield, Michigan facility, and an increase in selling costs of approximately $175 (promotional expenses, trade s how activities and sales commissions on 3D printing machine sales).

Interest Expense

Interest expense for the quarter ended September 30, 2017, was $24 compared with interest expense of $22 for the quarter ended September 30, 2016, an increase of $2, or 9.1%. Amounts for both periods consisted principally of periodic interest expense associated with long-term debt and capital lease obligations.

Interest expense for the nine months ended September 30, 2017, was $69 compared with interest expense of $276 for the nine months ended September 30, 2016, a decrease of $207, or 75.0%. The decrease in interest expense was principally due to the effect of the termination of the revolving credit facility with a related party during the quarter ended March 31, 2016, which resulted in an acceleration of amortization of debt issuance costs of approximately $204.

Other (Income) Expense – Net

Other (income) expense – net for the quarter ended September 30, 2017, was ($11) compared with other (income) expense – net of ($8) for the quarter ended September 30, 2016. Amounts for both periods consisted principally of interest income on cash and cash equivalents balances offset by net foreign exchange losses on commercial transactions and certain intercompany transactions between subsidiaries either settled or planned for settlement in the foreseeable future.

Other (income) expense – net for the nine months ended September 30, 2017, was $134 compared with other (income) expense – net of ($306) for the nine months ended September 30, 2016. The change of $440 was principally due to net currency exchange losses on certain intercompany transactions between subsidiaries either settled or planned for settlement in the foreseeable future, for the nine months ended September 30, 2017, as compared to net currency exchange gains during the nine months ended September 30, 2016.

Provision for Income Taxes

The provision for income taxes for the quarters ended September 30, 2017 and 2016, was $14 and $25, respectively. The effective tax rate for the quarters ended September 30, 2017 and 2016, was 0.3% (provision on a loss) and 0.7% (provision on a loss), respectively. The provision for income taxes for the nine months ended September 30, 2017 and 2016, was $23 and $43, respectively. The effective tax rate for the nine months ended September 30, 2017 and 2016, was 0.1% (provision on a loss) and 0.4% (provision on a loss), respectively. For each of the quarters and nine months ended September 30, 2017 and 2016, the effective tax rate differs from the U.S. federal statutory rate of 34.0% primarily due to net changes in valuation allowances for the period.

We have provided a valuation allowance for our net deferred tax assets as a result of our inability to generate consistent net operating profits in jurisdictions in which we operate. As such, any benefit from deferred taxes in any of the periods presented in our condensed consolidated financial statements has been fully offset by changes in the valuation allowance for net deferred tax assets. We continue to assess our future taxable income by jurisdiction based on our recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that we may be able to enact in future periods, the impact of potential operating changes on our business and our forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that we are able to reach the conclusion that net deferred tax assets are realizable based on any combination of the above factors in a single, or multiple, taxing jurisdictions, a reversal of the related portion of our existing valuation allowances may occur.

Impact of Inflation

Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition are not significant.

Liquidity and Capital Resources

Liquidity

We have incurred a net loss in each of our annual periods since our inception. In addition, we incurred a net loss of approximately $4,863 and $18,057 for the quarter and nine months ended September 30, 2017, respectively. In connection with the completion of our initial public offering and subsequent secondary offerings (including our ATM), we have received cumulative unrestricted net proceeds from the sale of our common stock of approximately $168,361 to fund our operations. At September 30, 2017, we had approximately $17,706 in unrestricted cash and cash equivalents.

We believe that our existing capital resources will be sufficient to support our operating plan. If we anticipate that our actual results will differ from our operating plan, we believe we have sufficient capabilities to enact cost savings measures to preserve

capital. Further, we may seek to raise additional capital to sup port our growth through additional debt, equity or other alternatives (including asset sales) or a combination thereof.

Cash Flows

The following table summarizes the significant components of cash flows for each of the nine month periods ended September 30 and our cash, cash equivalents, and restricted cash balances at September 30, 2017 and December 31, 2016:

	2017			2016
Net cash used for operating activities	$	(12,895	)	$	(1,908	)
Net cash provided by (used for) investing activities		2,828			(638	)
Net cash (used for) provided by financing activities		(166	)		12,879
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		882			138
Net change in cash, cash equivalents, and restricted cash	$	(9,351	)	$	10,471


	September 30, 2017			December 31, 2016
Cash and cash equivalents	$	17,706		$	27,825
Restricted cash		1,098			330
Cash, cash equivalents, and restricted cash shown in the condensed statement of consolidated cash flows	$	18,804		$	28,155

Operating Activities

Net cash used for operating activities for the nine months ended September 30, 2017, was $12,895 compared with net cash used for operating activities of $1,908 for the nine months ended September 30, 2016. The change of $10,987 was due to an increase in our net loss combined with a decrease in net cash inflows from changes in assets and liabilities, including a decrease in cash inflows from customers (principally due to the implementation of more favorable liquidity terms with customers during the nine months ended September 30, 2016) and an increase in cash outflows related to inventories (based on our operating plans for delivery of 3D printing machines to customers). These changes were partially offset by a reduction in cash outflows to vendors (based on the timing of payment).

Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2017, was $2,828 compared with net cash used for investing activities of $638 for the nine months ended September 30, 2016.

Net cash provided by investing activities for the nine months ended September 30, 2017, included cash inflows of approximately $3,702 in proceeds from the sale of property and equipment, mostly attributable to our sale of assets associated with our non-core specialty machining operation in Chesterfield, Michigan and our PSC in North Las Vegas, Nevada during the quarter ended June 30, 2017. Remaining activity for both periods included cash outflows for capital expenditures consistent with our operating plans.

We expect our remaining 2017 capital expenditures to be limited to spending associated with sustaining our existing operations and strategic asset acquisition and deployment (additional estimated spending of less than $1,000) .

Financing Activities

Net cash used for financing activities for the nine months ended September 30, 2017, was $166 compared with net cash provided by financing activities of $12,879 for the nine months ended September 30, 2016.

Uses of cash for the nine months ended September 30, 2017, included principal payments on outstanding debt and capital leases.

Sources of cash for the nine months ended September 30, 2016, included net proceeds from the issuance of common stock of approximately $12,447 in connection with our registered direct offering to a related party and approximately $595 in connection with our ATM. Uses of cash for the nine months ended September 30, 2016, included principal payments on outstanding debt and capital leases.

Off Balance Sheet Arrangements

In the normal course of our operations, our ExOne GmbH subsidiary issues financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security. At September 30, 2017, total outstanding financial guarantees and letters of credit issued by us were approximately $1,633 (€1,382). Included in the total outstanding financial guarantees and letters of credit issued by us are approximately $1,352 (€1,144) with expiration dates ranging from October 2017 through July 2018 and approximately $281 (€238) which have no expiration date. At December 31, 2016, total outstanding financial guarantees and letters of credit issued by us were approximately $400 (€380). For further discussion related to financial guarantees

and letters of credit issued by us, refer to Note 10 to the condensed consolidated financial statements in Pa rt I Item 1 of this Quarterly Report on Form 10-Q .

Recently Issued and Adopted Accounting Guidance

Refer to Note 1 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

Refer to Note 1 of the consolidated financial statements in Part I, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk from fluctuations in foreign currency exchange rates which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating and financing activities and, when we consider it to be appropriate, through the use of derivative financial instruments. We do not purchase, hold or sell derivative financial instruments for trading or speculative purposes.

The local currency is the functional currency for significant operations outside of the United States. The determination of the functional currency of an operation is made based on the appropriate economic and management indicators.

Foreign currency assets and liabilities are translated into their United States dollar equivalents based on period end spot exchange rates, and are included in stockholders’ equity as a component of other comprehensive income (loss). Revenues and expenses are translated at average exchange rates. Transaction gains and losses that arise from exchange rate fluctuations are charged to operations as incurred, except for gains and losses associated with certain long-term intercompany transactions for which settlement is not planned or anticipated in the foreseeable future, which are included in accumulated other comprehensive loss in the condensed consolidated balance sheet.

We transact business globally and are subject to risks associated with fluctuating foreign exchange rates. Approximately 68.2% and 59.3% of our consolidated revenue was derived from transactions outside the United States for the quarters ended September 30, 2017 and 2016, respectively. Approximately 61.2% and 54.0% of our consolidated revenue was derived from transactions outside the United States for the nine months ended September 30, 2017 and 2016, respectively. This revenue is generated primarily from wholly-owned subsidiaries operating in their respective countries and surrounding geographic areas. This revenue is primarily denominated in each subsidiary’s local functional currency, including the euro and Japanese yen. A hypothetical change in foreign exchange rates of +/- 10.0% for the quarter and nine months ended September 30, 2017, would result in an increase (decrease) in revenue of approximately $1,100 and $2,300, respectively. These subsidiaries incur most of their expenses (other than intercompany expenses) in their local functional currencies.

At September 30, 2017, we held approximately $18,804 in cash, cash equivalents, and restricted cash, of which approximately $15,366 was held by certain of our subsidiaries in United States dollars.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2017. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this evaluation, management concluded as of September 30, 2017, that our disclosure controls and procedures were not effective at the reasonable assurance level due to a material weakness in our internal control over financial reporting as discussed in the Company’s Annual Report on Form 10-K filed on March 16, 2017.

As a result of the material weakness described in our Annual Report on Form 10-K, we performed additional analysis and other post-closing procedures to ensure our condensed consolidated financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements and related notes thereto included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

With oversight from our executive management and Audit Committee of our Board of Directors, we continue to address the identified material weakness in our information technology system platform specific to our ExOne GmbH subsidiary, in particular, how this information technology system platform impacts our accounting for inventories specific to ExOne GmbH. Our approach includes the identification and remediation of known errors in the original implementation of, and subsequent changes to, this information technology system platform in an effort to reduce certain manual processes and controls necessary to ensure accurate and timely reporting of operating results associated with this subsidiary. We expect this process to be completed by December 31, 2017.

We can provide no assurance at this time that management will be able to report that our internal control over financial reporting will be effective as of December 31, 2017. As an EGC, we are exempt from the requirement to obtain an attestation report from our independent registered public accounting firm on the assessment of our internal controls pursuant to the Sarbanes-Oxley Act of 2002 until such time that we no longer qualify as an EGC.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

We are subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. Other than the matter further described above, management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

Item 1A.

Risk Factors.

There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

Item 6.

Exhibits.

(a)(3) Exhibits

The Exhibits listed on the accompanying Index to Exhibits are filed as part of this Quarterly Report on Form 10-Q.

EXHIBIT INDEX

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Exhibit Number	Description	Method of Filing


10.1	Executive At-Will Employment Agreement dated August 4, 2017, by and between The ExOne Company and JoEllen Lyons Dillon.	Filed herewith.
10.2	The ExOne Company Change of Control Severance Plan dated August 8, 2017.	Filed herewith.
31.1	Rule 13(a)-14(a) Certification of Principal Executive Officer.	Filed herewith.
31.2	Rule 13(a)-14(a) Certification of Principal Financial Officer.	Filed herewith.

32	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.	Filed herewith.

101.INS	XBRL Instance Document.	Filed herewith.

101.SCH	XBRL Taxonomy Extension Schema Document.	Filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.

Signatures

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

The ExOne Company

By:		/s/ James L. McCarley
		James L. McCarley
		Chief Executive Officer
		(Principal Executive Officer)

Date:		November 9, 2017

By:		/s/ Brian W. Smith
		Brian W. Smith
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Date:		November 9, 2017

Exhibit 10.1

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

This EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT (“At-Will Agreement”) dated as of August 4, 2017, is by and between The ExOne Company, a Delaware corporation (the “Company”), and JoEllen Lyons Dillon (the “Executive”). Collectively, the Employee and the Company are referred to herein as the “Parties.”

WHEREAS, the Company and the Executive have mutually agreed to terminate the Executive’s current employment agreement, dated March 7, 2013, by mutual amendment, and replace it with this At-Will Agreement, freely negotiated by the Parties, wherein the Executive shall be employed as an at-will employee of the Company, effective as provided herein;

WHEREAS, the Company desires to employ the Executive on an at-will basis and the Executive agrees to such at-will employment with the Company as the Executive Vice President – Strategic Development and Capital Markets, Chief Legal Officer and Corporate Secretary of the Company as more fully articulated herein; and

WHEREAS, the Executive is willing to commit herself to serve the Company, on the terms and conditions herein provided.

In order to effect the foregoing, the Company and the Executive wish to enter into this At-Will Agreement on the terms and conditions set forth below. Accordingly, in consideration of the premises and the respective covenants and agreements of the Parties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE 1
TERMINATION OF MARCH 2013 AGREEMENT AND EXECUTION OF THIS AT-WILL AGREEMENT

Section 1.01. Termination of March 2013 Agreement. The Parties agree that, contingent upon the Executive’s execution and non-revocation of the release and waiver agreement attached hereto as Exhibit A, and the payments or benefits set forth in this Section 1.01, (1) the March 7, 2013 Employment Agreement (“March 2013 Agreement”) between the Executive and the Company shall be terminated with no further obligations on the part of the Company under the March 2013 Agreement for the payment of any compensation, severance, bonuses, benefits or other remuneration that is, or arguably could be, due and owing to the Executive under the terms of the March 2013 Agreement, except for reimbursable expenses and (2) this At-Will Agreement shall govern the Executive’s continued service with the Company. This At-Will Agreement shall become effective immediately following the expiration of the revocation period of the release and waiver agreement attached hereto in Exhibit A (the “Effective Date”). In connection with the foregoing, the Company shall grant or pay the benefits set forth below to the Executive on the later of: two (2) business days after the Company’s Second Quarter 2017 Earnings Conference Call or ten (10) days after the Effective Date:

The Company shall make a one-time cash payment to the Executive in the amount of Two Hundred Forty Thousand and 00/100 Dollars ($240,000.00), less applicable withholdings;

The Company shall grant 15,000 fully vested shares of common stock to the Executive as a Stock Bonus Award under The ExOne Company 2013 Equity Incentive Plan, which shall represent all bonuses and long term incentive plan compensation payable to the Executive for 2017 under the March 2013 Agreement, or under any and all other Company sponsored plans or programs; and

The Company shall make a one-time cash payment to Executive for all accrued but unpaid vacation as of June 30, 2017, as well as all remaining benefits due and owing to the Executive

under the March 2013 Agreement, which the Executive acknowledges totals an amount equal to Thirty-Six Thousand, Nine Hundred Twenty-Three and 08/100 Dollars ($36,923.08), less applicable withholdings.

ARTICLE 2
POSITION AND DUTIES

Section 2.01. Position. The Executive shall be employed by the Company on an at-will basis, meaning that either the Company or the Executive may terminate the employment relationship with or without notice for any reason or no reason at all. The Executive’s at-will employment shall be effective as of the Effective Date and the Executive’s title shall be Executive Vice President – Strategic Development and Capital Markets, Chief Legal Officer and Corporate Secretary, reporting to the Chief Executive Officer (“CEO”) and in all respects in accordance with the Company’s articles of incorporation and bylaws.

Section 2.02. Duties. The Executive shall have such responsibilities, powers and duties as may from time to time be prescribed by the CEO, Executive Chairman of the Board of Directors and/or Board of Directors (“Board”); provided that such responsibilities, powers and duties are substantially consistent with those customarily assigned to individuals serving in the Executive’s positions at comparable companies or as may be reasonably required by the conduct of the business of the Company. The Executive owes a duty of loyalty to the Company and, subject to the provisos contained herein, shall devote her full-time efforts to the business and affairs of the Company and its subsidiaries. The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the CEO; provided, however, that nothing in this At-Will Agreement shall preclude the Executive from managing her personal or family investments or serving as a director of not-for-profit organizations or public company boards, so long as such activities do not create a conflict of interest with the Company or its business endeavors (which the Company acknowledges is the case with respect to the boards on which the Executive currently serves). The Company agrees to allow the Executive to serve on such boards without use of vacation or time off, provided that such service does not materially interfere with the Executive’s performance of her duties hereunder and the Executive utilizes her international travel to also benefit the Company.

ARTICLE 3
BASE SALARY AND OTHER BENEFITS

Section 3.01. Base Salary. Effective as of the Effective Date, the Executive’s salary shall be Three Hundred and 00/100 Dollars ($300,000) per annum (the “Base Salary”). The Base Salary will be payable in accordance with the normal payroll practices of the Company. Periodically, the Board, Executive Chairman or the CEO shall review the Executive’s job performance and compensation, and if deemed appropriate by the Board, in its discretion, the Executive’s Base Salary may be increased but shall not be decreased; such adjusted Base Salary shall become the new Base Salary.

Section 3.02. Bonuses. During employment, in addition to the Base Salary, the Executive shall be eligible to participate in an annual bonus plan on such terms established from time to time by the Board or the Compensation Committee of the Board, as applicable. The Parties acknowledge that the Executive is not entitled to any bonuses for 2017, or any prior year.

Section 3.03. Incentive Plans. The Executive shall be eligible to participate in any awards under The ExOne Company 2013 Equity Incentive Plan or any other long term incentive compensation plan maintained by the Company on the terms established from time to time by the Board or the Compensation Committee of the Board, as applicable. The Parties acknowledge that the grant of 15,000 shares of common stock referenced in Section 1.01 represents the Executive’s participation in the The ExOne

Company 2013 Equity Incentive Plan for 2017 and that no further or additional grant is due and owing to, or expected by, the Executive for 2017, or any prior year, under the Com pany’s incentive plan, the March 2013 Agreement, or otherwise.

Section 3.04. Benefits. The Executive shall be entitled to participate in all employee benefit and fringe benefit plans and arrangements made available by the Company to its executives and key management employees upon the terms and subject to the conditions set forth in the applicable plan or arrangement. The Executive will be entitled to a maximum of four (4) weeks of paid vacation annually, to be utilized in accordance with the Company’s vacation policy. The Executive acknowledges and agrees that the Company has paid out to the Executive all accrued by unpaid vacation, including vacation accrued through June 30, 2017, under the March 2013 Agreement. The Executive’s health and welfare benefits shall continue at the same level as under the March 2013 Agreement or at a comparable level as provided, from time to time, to the Company’s executives and key management employees.

Section 3.05. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred by her in the course of performing her duties under this At-Will Agreement in accordance with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses (“Reimbursable Expenses”), subject to the Company’s requirements with respect to reporting and documentation of such Reimbursable Expenses.

ARTICLE 4
CHANGE OF CONTROL

Section 4.01. Change-of-Control.

The Company shall include the Executive for participation in any Change-of-Control severance plan if adopted by the Company at a participation level equal to the highest participation level of the executive management team of the Company (excluding the CEO), under the terms and conditions set forth in such Change-of-Control severance plan. In the event that the Change-of-Control severance plan adopted by the Company provides for an offset of any amount previously paid to any covered person as severance, the Parties acknowledge and agree that the payment made in Section 1.01(a) of this At-Will Agreement shall be considered severance for purposes of such offset under the Change-of-Control severance plan.

In the event that a Change-of-Control, as defined in subsection (d) below, occurs on or before December 31, 2018 and the Executive does not qualify for a benefit under the Change-of-Control severance described in Section 4.01(a) as a result of such Change-of-Control, the Company shall provide the Executive with an amount equal to two times (2X) the Executive’s annual Base Salary, less the amount paid under Section 1.01(a) of this At-Will Agreement, as a Change-of-Control benefit, provided, that within thirty (30) days of the Executive’s termination of employment, the Executive has delivered to the Company a signed waiver and release of claims agreement as contained in Exhibit B, or other version acceptable to the Company, and not revoked such waiver and release agreement as provided for therein, and provided further, that one of the following conditions is met:

The Change-of-Control occurs following termination of employment (i) within six (6) months if termination of employment is initiated by the Executive, for any reason or no reason, prior to December 31, 2017; or (ii) if termination of employment by the Company, within the period up to and including December 31, 2018; or

The Change-of-Control occurs during the Executive’s employment with the Company and the Executive is terminated by the Company for any reason within twelve (12) months following the Change-of-Control.

Such Change-of-Control benefit, shall be paid to the Executive, in a lump sum, less applicable withholdings, as liquidated damages for lost future remuneration, as follows:

If under Section 4.01(b)(1) above, within forty-five (45) days of the date of the Change-of-Control (if the Executive is terminated prior to the Change-of-Control); or

If under Section 4.01(b)(2) above, within forty-five (45) days of the Executive’s termination of employment for any reason following the Change-of-Control.

For purposes of only this Section 4.01(b) of this At-Will Agreement, “Change-of-Control” is defined as:

if any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing greater than 50% of the combined voting power of the Company’s then outstanding securities, whether or not the Board shall have first given its approval of such acquisition; or

during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new Directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; or

the consummation of a merger, combination or consolidation of the Company with any other corporation; provided, however, a Change in Control shall not be deemed to have occurred: (i) if such merger, combination or consolidation would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) either directly or indirectly more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) if the corporate existence of the Company is not affected and following the merger or consolidation, the majority of the Directors of the Company prior to such merger or consolidation constitute at least a majority of the Board or the entity that directly or indirectly controls the Company after such merger or consolidation; or

the sale or disposition by the Company of all or substantially all the Company’s assets; or

the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or its subsidiaries.

However, in no event shall a Change-of-Control be deemed to have occurred, with respect to the Executive under Section 4.01(b) of this At-Will Agreement, if the Executive is “part of a purchasing group” which consummates the Change-of-Control transaction. The Executive shall be deemed “part of the purchasing group” for purposes of the preceding sentence if the Executive is an equity participant or has agreed to become an equity participant in the purchasing company or group where her individual participation equals more than a majority (more than 51%) of the voting securities of the purchasing company.

ARTICLE 5
TERMINATION

Section 5.01. Termination. The Executive’s employment hereunder is on an at-will basis and may be terminated by either the Company or the Executive at any time and for any reason. The Parties acknowledge and agree that the Executive’s employment under this At-Will Agreement may be brief and that no representations have been made to the Executive by the Company, or any of its officers, directors

or representatives with respect to an anticipated duration of an employment under this At-Will Agreement, and further, the Parties each represent and warrant that they have not relied upon this At-Will Agreement to provide any expectation of continued employment for or with the Company. Upon termination of the Executive’s employment by either Party, the Executive shall be entitled to compensation a nd benefits through such date of termination. In the event that either the Executive terminates employment for any reason or no reason at all, or in the event that the Company terminates the Executive’s employment for any reason or no reason at all, and p rovided that within thirty (30) days of the Executive’s termination of employment, the Executive has delivered to the Company a signed waiver and release of claims agreement as contained in Exhibit B, or other version acceptable to the Company, and not rev oked such waiver and release agreement as provided for therein, the Company agrees to provide the Executive post-termination benefits as specified below:

If the Executive’s employment is terminated by the Company on or prior to December 31, 2017, the Executive shall be entitled to salary continuation from the date of termination through December 31, 2017, in accordance with the Company’s normal payroll practices, less applicable withholdings, however, if Executive’s employment is terminated by the Company after December 31, 2017, the Executive shall receive severance in the amount of two (2) weeks of salary for each full year of employment with the Company as of the date of termination, based upon a calculation of service commencing as of the Effective Date, payable in a lump sum, less applicable withholdings, within forty-five (45) days of the Executive’s termination;

A cash payment for all accrued, but unused, vacation pay (commencing as outlined in Section 3.04 herein) through the date of termination;

COBRA health care continuation at the Company’s expense for a period of up to eighteen (18) months following termination of employment or until such earlier date that the Executive is covered under another group health plan;

Immediate acceleration of vesting, upon payment of anticipated withholding tax or other arrangement for payment suitable to the Company, of all outstanding shares of restricted stock awarded under The ExOne Company 2013 Equity Incentive Plan as of the Effective Date;

Reimbursement for Reimbursable Expenses incurred by the Executive prior to the date of termination pursuant to the Company’s policy on reimbursable business expenses; and

Survival of the Change-of-Control provisions provided in Article 4 hereof pursuant to the terms thereof.

The Executive’s entitlement to severance benefits shall be determined hereunder and shall not be payable under any other plan or program, other than severance benefits being paid under a Change-of-Control severance plan or under Article 4 of this At-Will Agreement.

The Executive shall cooperate with the Company to ensure an orderly transition of her responsibilities in connection with a termination of employment.

Section 5.02. Release. Notwithstanding any other provision hereof, the Executive shall not be required by the release contained in the separation and release agreement attached hereto as Exhibit B to release claims that the Executive may have against the Company for Reimbursable Expenses incurred by her during the course of her employment, claims that arise after the effective date of the waiver and release attached hereto as Exhibit B, any rights the Executive may have to enforce Section 5.01 of this At-Will Agreement or benefits being paid under a Change-of-Control severance plan or under Article 4 of this At-Will Agreement, and claims for which the Executive is entitled to be indemnified under the Company’s

charter, by-laws or under applicable law or pursuant to the Company’s directors’ and officer’s liability insurance policies or under the Indemnification A greement dated March 27, 2013.

ARTICLE 6
CONFIDENTIAL INFORMATION

Section 6.01. Confidential Information and Trade Secrets. The Executive and the Company agree that certain materials, including, but not limited to, information, data and other materials relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion credit and financial data, manufacturing processes, financial methods, plans or the business and affairs of the Company and its Affiliates, constitute proprietary confidential information and trade secrets. Accordingly, the Executive will not at any time during or after the Executive’s employment with the Company disclose or use for the Executive’s own benefit or purposes or the benefit or purposes of any Person, other than the Company and any of its Affiliates, any proprietary confidential information or trade secrets. The foregoing obligations imposed by this Section 6.01 will not apply (a) in the course of the business of and for the benefit of the Company, (b) if such information has become, through no fault of the Executive, generally known to the public, or (c) if the Executive is required by law to make disclosure (after giving the Company notice and an opportunity to contest such requirement). The Executive agrees that upon termination of employment with the Company for any reason, the Executive will immediately return to the Company all memoranda, books, paper, plans, information, letters and other data, and all copies thereof or therefrom, which in any way relate to the business of the Company and its Affiliates. The Executive further agrees that the Executive will not retain or use for the Executive’s account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company or any of its Affiliates. Nothing in this At-Will Agreement shall limit the Executive’s ability to report potential violations of law to any appropriate governmental authority.

Section 6.02. Notice of Immunity under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016. Notwithstanding any other provision of this At-Will Agreement or the provisions contained in any other agreements pertaining to confidentiality that the Executive has signed, the Executive understands that the Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that (a) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the Company’s trade secrets to the Executive’s attorney and use the trade secret information in the court proceeding if the Executive: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

ARTICLE 7
NONCOMPETITION

Section 7.01. Noncompetition.

a. The Executive acknowledges and recognizes the highly competitive nature of the business of the Company and its Affiliates and accordingly agrees that during the term of the Executive’s employment and for a period of one (1) year after the termination thereof:

The Executive will not directly or indirectly engage in any business which is in competition with any line of business conducted by the Company during the term of Executive’s employment or any of its Affiliates, including, but not limited to, where such engagement is as an officer, director, proprietor, employee, partner, investor (other than

as a holder of less than 1% of the outstanding capital stock of a publicly traded corporation), consultant, advisor, agent or sales representative, in any Restricted Territory (defined below);

The Executive will not perform or solicit the performance of services for any customer or client of the Company or any of its Affiliates;

The Executive will not directly or indirectly induce any employee of the Company or any of its Affiliates to (i) engage in any activity or conduct which is prohibited pursuant to this Section 7.01, or (ii) terminate such employee’s employment with the Company or any of its Affiliates. Moreover, the Executive will not directly or indirectly employ or offer employment (in connection with any business which is in competition with any line of business conducted by the Company or any of its Affiliates) to any person who was employed by the Company or any of its Affiliates unless such person shall have ceased to be employed by the Company or any of its Affiliates for a period of at least twelve (12) months; and

The Executive will not directly or indirectly assist others in engaging in any of the activities which are prohibited under clauses (1)-(3) of this Section 7.01(a) above.

The covenant contained in Section 7.01(a)(1) above is intended to be construed as a series of separate covenants, one for each county, town, city and state or other political subdivision of a Restricted Territory. For purposes of this At-Will Agreement, “Restricted Territory” means the counties, towns, cities, states or other political subdivisions of any country in which the Company or its Affiliates operates or does business. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in the preceding subsections. If, in any judicial proceeding, the court shall refuse to enforce any of the separate covenants (or any part thereof) deemed included in such subsections, then such unenforceable covenant (or such part) shall be deemed to be eliminated from this At-Will Agreement for the purpose of those proceedings to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced.

It is expressly understood and agreed that although the Executive and the Company consider the restrictions contained in this Section 7.01 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this At-Will Agreement is an unenforceable restriction against the Executive, the provisions of this At-Will Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this At-Will Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

ARTICLE 8
EQUITABLE RELIEF

Section 8.01. Equitable Relief. The Executive acknowledges that (a) the covenants contained in Sections 6.01 and 7.01 hereof are reasonable, (b) the Executive’s services are unique, and (c) a breach or threatened breach by her of any of her covenants and agreements with the Company contained in Sections 6.01 or 7.01 hereof could cause irreparable harm to the Company for which it would have no adequate remedy at law. Accordingly, and in addition to any remedies which the Company may have at law, in the event of an actual or threatened breach by the Executive of her covenants and agreements contained in Sections 6.01 or 7.01 hereof, the Company shall be entitled as a matter of right to an injunction, without a requirement to post bond, out of any court of competent jurisdiction, restraining any violation or further violation of such promises by the Executive or the Executive’s employees, partners or agents.

ARTICLE 9
INDEMNIFICATION

Section 9.01. Indemnification. The Company agrees that if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that she is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, the Executive shall be indemnified and held harmless by the Company to the fullest extent permitted or authorized by applicable law and the Company’s certificate of incorporation or bylaws, against all cost, expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if she has ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of the Executive’s heirs, executors and administrators.

Section 9.02. The Company acknowledges and agrees that the Executive’s Indemnification Agreement dated March 27, 2013 remains in full force and effect following the Effective Date and Executive’s termination of employment. Nothing in this At-Will Agreement or the waiver and release agreements attached hereto as Exhibit A and B shall diminish the Executive’s rights under the Indemnification Agreement dated March 27, 2013.

Section 9.03. D&O Insurance. During Executive’s employment, the Company shall keep in place a directors’ and officers’ liability insurance policy (or policies) providing comprehensive coverage to the Executive to the same extent that the Company provides such coverage for any other officer or director of the Company and, following termination of employment, the Executive shall be entitled to such coverage to the same extent that the Company provides such coverage for any other current or former officer or director of the Company.

ARTICLE 10
MISCELLANEOUS

Section 10.01. Remedies. The Company or the Executive will have all rights and remedies set forth in this At-Will Agreement, all rights and remedies which the Company or the Executive has been granted at any time under any other agreement or contract and all of the rights which the Company or the Executive has under any law, provided that the Executive has not waived such rights by her execution and non-revocation of either of the release and waiver agreements attached as Exhibit A or B to this At-Will Agreement. The Company or the Executive will be entitled to enforce such rights specifically, without posting a bond or other security, to recover damages by reason of any breach of any provision of this At-Will Agreement and to exercise all other rights granted by law. The failure of the Company or the Executive to enforce at any time any provision of this At-Will Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

Section 10.02. Consent to Amendments. The provisions of this At-Will Agreement may be amended or waived only by a written agreement executed and delivered by the Company and the Executive. No other course of dealing between the parties to this At-Will Agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of any such parties. Notwithstanding the foregoing or any provisions of this At-Will Agreement to the contrary, the Company may at any time, with the consent of the Executive, modify or amend any provision of this At-Will Agreement or take any other action, to the extent necessary or advisable to ensure that this At-Will Agreement complies with or is exempt from

Section 409A of the Code and that any payments or benefits under this At-Will Agreement are not subject to interest and penalties under Section 409A of the Code.

Section 10.03. Successors and Assigns. All covenants and agreements contained in this At-Will Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not, provided that the Executive may not assign her rights or delegate her obligations under this At-Will Agreement without the written consent of the Company.

Section 10.04. Severability. Whenever possible, each provision of this At-Will Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this At-Will Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this At-Will Agreement.

Section 10.05. Counterparts. This At-Will Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.

Section 10.06. Descriptive Headings. The descriptive headings of this At-Will Agreement are inserted for convenience only and do not constitute a part of this At-Will Agreement.

Section 10.07. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this At-Will Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient, two business days after the date when sent to the recipient by reputable express courier service (charges prepaid) or four (4) business days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the Executive and to the Company at the addresses set forth below.

If to the Executive:

1330 Bennington Avenue, Pittsburgh, PA 15217

If to the Company:

The ExOne Company
127 Industry Boulevard, North Huntingdon, PA 15642
Attn: Chief Executive Officer

Section 10.08. Withholding. The Company may withhold from any amounts payable under this At-Will Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation, including Executive’s tax liability with respect to any grant of equity, including the 15,000 shares of common stock referenced in Section 1(b) above.

Section 10.09. No Third Party Beneficiary. This At-Will Agreement will not confer any rights or remedies upon any person other than the Company, the Executive and their respective heirs, executors, successors and assigns.

Section 10.10. Entire Agreement. Except as provided herein, this At-Will Agreement constitutes the entire agreement among the Parties regarding Executive’s employment and supersedes the March 2013 Agreement, any prior understandings, agreements or representations by or among the Parties, written or oral, that may have related in any way to the subject matter hereof. Notwithstanding anything contained herein, the Employee/Independent Contractor Proprietary Information and Assignment of Inventions Agreement dated March 7, 2013; the Indemnification Agreement by and between the Parties dated March 27, 2013; and the Restricted Stock Agreements dated March 11, 2013, December 19, 2014, August 12, 2016; shall not be superseded by this At-Will Agreement and each remains in full force and effect.

Section 10.11. Construction. The language used in this At-Will Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any pa rty. Any reference to any federal, state, local or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The use of the word “including” in this At-Will Agreement m eans “including without limitation” and is intended by the parties to be by way of example rather than limitation.

Section 10.12. Survival. Articles 6, 7, 8, 9 and 10 hereof will survive and continue in full force in accordance with their terms notwithstanding any termination of the Executive’s employment, and this At-Will Agreement shall otherwise remain in full force to the extent necessary to enforce any rights and obligations arising hereunder. The benefits to the Executive contained in Articles 4 and 5 hereof shall survive and continue in full force in accordance with their terms and conditions notwithstanding any termination of the Executive’s employment, provided that within thirty (30) days of the Executive’s termination of employment, the Executive has delivered to the Company a signed waiver and release of claims agreement as contained in Exhibit B, or other version acceptable to the Company, and not revoked such waiver and release agreement as provided for therein.

Section 10.13. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AT-WILL AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW OF PENNSYLVANIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section 10.14. Internal Revenue Code Section 409A.

If any benefit provided under this At-Will Agreement is subject to the provisions of Section 409A of the Code and the regulations issued thereunder, the provisions of this At-Will Agreement shall be administered, interpreted and construed in a manner necessary to comply with Section 409A and the regulations issued thereunder (or disregarded to the extent such provision cannot be so administered, interpreted, or construed.)

For purposes of this At-Will Agreement, the Executive shall be considered to have experienced a termination of employment only if the Executive has terminated employment with the Company and all of its controlled group members within the meaning of Section 409A of the Code. For purposes hereof, the determination of controlled group members shall be made pursuant to the provisions of Section 414(b) and 414(c) of the Code; provided that the language “at least 50 percent” shall be used instead of “at least 80 percent” in each place it appears in Section 1563(a)(1), (2) and (3) of the Code and Treas. Reg. § 1.414(c)-2. Whether the Executive has terminated employment will be determined based on all of the facts and circumstances and in accordance with the guidance issued under Section 409A of the Code.

For purposes of Section 409A, each severance benefit payment shall be treated as a separate payment. Each payment under this At-Will Agreement is intended to be exempt from Section 409A to the maximum extent provided under Section 409A as follows:

(a) the Employee’s termination date and within the applicable 2 1/2 month period specified in Treas. Reg. § 1.409A-1(b)(4) is intended to be exempt under the short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4); (b) post-termination medical benefits are intended to be exempt under the medical benefits exceptions as specified in Treas. Reg. § 1.409A-1(b)(9)(v)(B); and (c) to the extent payments are made as a result of an involuntary separation, each payment that is not otherwise exempt under the short-term deferral exception or medical benefits exception is intended to be exempt under the involuntary pay exception as specified in Treas. Reg. § 1.409A-1(b)(9)(iii). The Executive shall have no right to designate the date of any payment under this At-Will Agreement.

With respect to payments subject to Section 409A of the Code (and not exempt therefrom), if any, it is intended that each payment is paid on a permissible distribution event and at a specified time consistent with Section 409A of the Code. Notwithstanding any provision of this At-Will Agreement to the contrary, to the exten t that a payment hereunder is subject to Section 409A of the Code (and not excepted therefrom) and payable on account or a termination of employment, such payment shall be delayed for a period of six months after the date of termination (or, if earlier, th e death of the Executive) if the Executive is a “specified employee” (as defined in Section 409A of the Code and determined in accordance with the procedures established by the Company). Any payment that would otherwise have been due or owing during such 6-month period will be paid immediately following the end of the 6-month period in the month following the month containing the 6-month anniversary of the date of termination.

IN WITNESS WHEREOF, the parties hereto have executed this At-Will Agreement as of the date and year first above written.


The ExOne Company		Executive JoEllen Lyons Dillon
By:

/s/ James L. McCarley		/s/ JoEllen Lyons Dillon
James McCarley Chief Executive Officer

EXHIBIT A

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

WAIVER AND RELEASE AGREEMENT OF CLAIMS PRIOR TO AT-WILL EMPLOYMENT

WAIVER AND GENERAL RELEASE AGREEMENT

THIS WAIVER AND GENERAL RELEASE AGREEMENT (this “Waiver and Release”) is made as of this 4 ^th day of August, 2017, by and between THE EXONE COMPANY and its corporate affiliates, parent and subsidiaries (collectively the “Company”) and JOELLEN LYONS DILLON (the “Executive”).

WHEREAS, the Company and the Executive have mutually agreed to terminate the Executive’s employment agreement dated March 7, 2013, by mutual amendment, and replace it with an at-will employment agreement, freely negotiated by the Parties, wherein the Executive shall be employed as an at-will employee of the Company, effective July 1, 2017 (“At-Will Agreement”);

WHEREAS, the Company desires to employ the Executive on an at-will basis and the Executive agrees to such at-will employment with the Company; and

WHEREAS, the Parties have agreed to sufficient consideration which is hereby acknowledged by the Executive for the Executive to waive and release the Company from any and all claims to compensation, severance, bonuses, benefits or other remuneration under her March 7, 2013 employment agreement and any other claims arising prior to or as of the date of this Waiver and Release.

NOW, THEREFORE, for and in consideration of the Company’s commitments in Article 1 of the At-Will Agreement, and intending to be legally bound, the Executive and the Company hereby agree as follows:

1. (a) The Executive does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates, subsidiaries and parents, and its and their respective officers, directors, employees, and agents, and its and their respective successors and assigns, heirs, executors, and administrators, as well as the current and former fiduciaries of any pension, welfare, or other benefit plans applicable to the employees or former employees of the Company, and the current and former welfare and other benefit plans sponsored by the Company (collectively, “Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which the Executive ever had, now has, or hereafter may have, whether known or unknown, or which the Executive’s heirs, executors, or administrators may have, by reason of any matter, cause or thing whatsoever, from the beginning of time to the date the Executive signs this Waiver and Release, and particularly, but without limitation of the foregoing general terms, any and all terms and conditions of the Executive’s March 7, 2013 employment agreement, any claims arising from or relating in any way to the Executive’s employment relationship with the Company prior to the date of this Waiver and Release, the terms and conditions of her employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Worker Readjustment and Retraining Notification Act, the Consolidated Omnibus Budget Reconciliation Act, the Employee Retirement Income Security Act of 1974, the Pennsylvania Human Relations Act, and any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs. This Waiver and Release is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.

EXHIBIT A

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

WAIVER AND RELEASE AGREEMENT OF CLAIMS PRIOR TO AT-WILL EMPLOYMENT

barred from releasing, such as the Executive’s entitlement to vested pension benefits. Notwithstanding any other provision hereof, the Executive shall not release claims that arise after the effective date of the Waiver and Release, any rights the Executive may have to enforce Article 1, Article 4, Article 5 or any other terms of the At-Will Agreement, and claims f or which the Executive is entitled to be indemnified under the Indemnification Agreement dated March 2013, the Company’s charter, by-laws or under applicable law or pursuant to the Company’s directors’ and officer’s liability insurance policies.

(c) Nothing herein is intended to or shall preclude the Executive from filing a charge with any appropriate federal, state or local government agency and/or cooperating with said agency in its investigation. The Executive, however, explicitly waives any right to file a personal lawsuit or receive monetary damages that the agency may recover against the Releasees, without regard as to who brought any said complaint or charge. Employee further agrees that to the extent any relief, including monetary relief, is awarded in any such proceeding referenced under this subparagraph (c), all amounts paid as consideration under Article 1 of the At-Will Agreement shall be a setoff and credit against any such award to the fullest extent permitted by law.

(d) The Executive represents and agrees by signing below that the Executive has not been denied any leave or benefit requested, has received the appropriate pay for all hours worked for the Company, and has no known workplace injuries or occupational diseases.

(e) To the fullest extent permitted by law, the Executive represents and affirms that (i) the Executive has not filed or caused to be filed on the Executive’s behalf any claim for relief against any Releasee and, to the best of the Executive’s knowledge and belief, no outstanding claims for relief have been filed or asserted against the Company or any Releasee on the Executive’s behalf; and (ii) the Executive has not reported any improper, unethical or illegal conduct or activities to any supervisor, manager, department head, human resources representative, agent or other representative of the Company, to any member of the Company’s legal or compliance departments, or to the ethics hotline, and has no knowledge of any such improper, unethical or illegal conduct or activities. The Executive agrees to promptly dismiss with prejudice all claims for relief filed before the date the Executive signs this Waiver and Release.

(f) The Company does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Executive from all claims, demands or causes of action arising out of facts or occurrences prior to the date of this Waiver and Release, but only to the extent the Company knows or reasonably should know of such facts or occurrence and only to the extent such claim, demand or cause of action relates to a violation of applicable law or the performance of the Executive’s duties with the Company; provided, however, that this release of claims shall not in any case be effective with respect to any claim by the Company alleging a breach of the Executive’s obligations under this Waiver and Release.

2. The Executive further agrees and recognizes that the Executive’s employment relationship with the Company has been modified to an at-will relationship, and that the Company has no remaining obligations to the Executive under her March 7, 2013 employment agreement.

3. This Waiver and Release and the At-Will Agreement contain the entire agreement between the Company and the Executive relating to the subject matter hereof. No prior or contemporaneous oral or written agreements or representations may be offered to alter the terms of this Waiver and Release. To the extent the Executive has entered into other agreements with the Company that are not in conflict with this Waiver and Release, including, but not limited to the At-Will Agreement, the Employee/Independent Contractor Proprietary Information and Assignment of Inventions Agreement dated March 7, 2013, the Executive’s Indemnification Agreement dated March 27, 2013, and the Restricted Stock Agreements dated March 11, 2013, December 19, 2014 and August 12, 2016, the terms of this Waiver and Release shall not supersede, but shall be in addition to such other agreements.

EXHIBIT A

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

WAIVER AND RELEASE AGREEMENT OF CLAIMS PRIOR TO AT-WILL EMPLOYMENT

4. Except as required by law, the Executive agrees not to disclose the terms of this Waiver and Release or the At-Will Agreement to anyone, except the Executive’s spouse, attorney and, as necessary, tax/financial advisor. Likewise, the Company a grees that the terms of this Waiver and Release will not be disclosed except as may be necessary to obtain approval or authorization to fulfill its obligations hereunder or as required by law. It is expressly understood that any violation of the confident iality obligation imposed hereunder constitutes a material breach of this Wavier and Release.

5. Notice of Immunity under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016. Notwithstanding any other provision of this Waiver and Release or the provisions contained in any other agreements pertaining to confidentiality that the Executive has signed, the Executive understands that the Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that: (i) is made: (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the Company’s trade secrets to the Executive’s attorney and use the trade secret information in the court proceeding if the Executive: (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.

6. Nothing in this Waiver and Release shall prohibit or restrict the Executive from: (i) making any disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s designated legal, compliance or human resources officers; or (iii) filing, testifying, participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization.

7. The parties agree and acknowledge that the agreement by the Company described herein, and the release of any asserted or unasserted claims against the Releasees, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Releasees to the Executive.

8. The Executive agrees and recognizes that should the Executive materially breach the obligations or covenants set forth in Article 6 or 7 of the At-Will Agreement, the Company will have no further obligation to provide the Executive with the consideration set forth in Articles 1, 4 or 5 of the At-Will Agreement, and will have the right to seek repayment of all consideration paid up to the time of any such breach. Notwithstanding the foregoing, the Executive acknowledges that if the Executive breaches Article 6 or 7 of the At-Will Agreement, and if the Company terminates or recovers any of the payments or benefits provided under Article 1 of the At-Will Agreement (as provided for in Articles 6 and 7 of the At-Will Agreement), the release provided by Section 1 of this Waiver and Release shall remain valid and enforceable.

9. The Executive further agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as to an equitable accounting of all earnings, profits and other benefits arising from any violations of this Waiver and Release, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.

10. This Waiver and Release and the obligations of the parties hereunder shall be construed, interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania.

EXHIBIT A

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

WAIVER AND RELEASE AGREEMENT OF CLAIMS PRIOR TO AT-WILL EMPLOYMENT

11. The Executive certifies and acknowledge s as follows:

(a) That the Executive has read the terms of this Waiver and Release, and that the Executive understands its terms and effects, including the fact that the Executive has agreed to REMISE, RELEASE AND FOREVER DISCHARGE the Releasees from any legal action arising out of the Executive’s employment relationship with the Company through the date of this Waiver and Release; and

(b) That the Executive has signed this Waiver and Release voluntarily and knowingly in exchange for the consideration described herein and in Article 1 of the At-Will Agreement, which the Executive acknowledges is adequate and satisfactory to her and which the Executive acknowledges is in addition to any other benefits to which the Executive is otherwise entitled; and

(c) That the Executive has been and is hereby advised in writing to consult with an attorney prior to signing this Waiver and Release; and

(d) That the Executive does not waive rights or claims that may arise after the date this Waiver and Release is executed; and

(e) That the Company has provided the Executive with a period of twenty-one (21) days within which to consider this Waiver and Release, and that the Executive has signed on the date indicated below after concluding that this Wavier and Release is satisfactory ; and

(f) The Executive acknowledges that this Waiver and Release may be revoked within seven (7) days after execution, and it shall not become effective until the expiration of such seven (7) day revocation period. In the event of a timely revocation by the Executive, this Waiver and Release will be deemed null and void and the Company will have no obligations hereunder or under Articles 1, 4 or 5 of the At-Will Agreement.

EXHIBIT A

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

WAIVER AND RELEASE AGREEMENT OF CLAIMS PRIOR TO AT-WILL EMPLOYMENT

Intending to be legally bound hereby, the Executive and the Company executed the foregoing Waiver and Release this 4th day of August, 2017.


JoEllen Lyons Dillon
/s/ JoEllen Lyons Dillon		Witness:	Nancy Bowman
Executive

The ExOne Company
By:	/s/ James L. McCarley	Witness:	Nancy Bowman
Name: James McCarley Title: Chief Executive Officer

EXHIBIT B

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

SEPARATION AND RELEASE AGREEMENT

SEPARATION OF EMPLOYMENT AND GENERAL RELEASE AGREEMENT

THIS SEPARATION OF EMPLOYMENT AND GENERAL RELEASE AGREEMENT (this “Separation and Release Agreement”) is made as of this _____ day of ________________, __________, by and between THE EXONE COMPANY and its corporate affiliates, parent and subsidiaries (collectively the “Company”) and JOELLEN LYONS DILLON (the “Executive”).

WHEREAS, the Executive formerly was employed by the Company as Executive Vice President – Strategic Development and Capital Markets, Chief Legal Officer and Corporate Secretary;

WHEREAS, the Executive and Company entered into an At-Will Employment Agreement, dated July 1, 2017 (the “At-Will Agreement”) which provides for certain payments and benefits in the event that the Executive’s employment is terminated by the Company; and

WHEREAS, the Executive’s employment with the Company was terminated qualifying the Executive to receive certain payments and benefits, as set forth in Articles 4 and 5 of the At-Will Agreement, subject to, among other things, the Executive’s execution of this Release as defined therein.

NOW, THEREFORE, for and in consideration of the Company’s commitments in Articles 4 and 5 of the At-Will Agreement, and intending to be legally bound, the Executive and the Company hereby agree as follows:

1. (a) The Executive does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates, subsidiaries and parents, and its and their r espective officers, directors, employees, and agents, and its and their respective successors and assigns, heirs, executors, and administrators, as well as the current and former fiduciaries of any pension, welfare, or other benefit plans applicable to the employees or former employees of the Company, and the current and former welfare and other benefit plans sponsored by the Company (collectively, “Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which the Executive ever had, now has, or hereafter may have, whether known or unknown, or which the Executive’s heirs, executors, or administrators may have, by reason of any matter, cause or thing whatsoever, from the beginning of time to the date the Executive signs this Separation and Release Agreement, and particularly but without limitation of the foregoing general terms, any claims arising from or relating in any way to the Executive’s employment relationship with the Company, the terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Worker Readjustment and Retraining Notification Act, the Consolidated Omnibus Budget Reconciliation Act, the Employee Retirement Income Security Act of 1974, the Pennsylvania Human Relations Act, and any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs. This Separation and Release Agreement is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.

(b) Although Paragraph 1(a) is intended to be a general release related to Executive’s employment, it is understood and agreed that Paragraph 1(a) excludes claims related to the Executive’s right to receive the payments and benefits described in Articles 1, 4, 5 or any other term of the At-Will Agreement, as well as claims under any statute or common law that the Executive is legally barred from releasing, such as the Executive’s entitlement to vested pension benefits. Notwithstanding any other provision hereof, the Executive shall not release claims that the Executive may have against the Company

EXHIBIT B

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

SEPARATION AND RELEASE AGREEMENT

for reimbur sement of ordinary and necessary business expenses incurred by her during the course of her employment, claims that arise after the effective date of the release in this Separation and Release Agreement, any rights the Executive may have to enforce Article 1, Article 4, Article 5 or any other terms of the At-Will Agreement, and claims for which the Executive is entitled to be indemnified under the Indemnification Agreement dated March 27, 2013, the Company’s charter, by-laws or under applicable law or purs uant to the Company’s directors’ and officer’s liability insurance policies.

(c) Nothing herein is intended to or shall preclude the Executive from filing a charge with any appropriate federal, state or local government agency and/or cooperating with said agency in its investigation. The Executive, however, explicitly waives any right to file a personal lawsuit or receive monetary damages that the agency may recover against the Releasees, without regard as to who brought any said complaint or charge. Employee further agrees that to the extent any relief, including monetary relief, is awarded in any such proceeding referenced under this subparagraph (c), all amounts paid as consideration under Articles 4 and 5 of the At-Will Agreement shall be a setoff and credit against any such award to the fullest extent permitted by law.

(f) The Com pany does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Executive from all claims, demands or causes of action arising out of facts or occurrences prior to the date of this Separation and Release Agreement, but only to the extent the Company knows or reasonably should know of such facts or occurrence and only to the extent such claim, demand or cause of action relates to a violation of applicable law or the performance of the Executive’s duties with the Company; provided, however, that this release of claims shall not in any case be effective with respect to any claim by the Company alleging a breach of the Executive’s obligations under this Separation and Release Agreement.

2. The Executive further agrees and recognizes that the Executive’s employment relationship with the Company has been permanently severed, that the Executive shall not seek employment with the Company or any affiliated entity at any time in the future, and that the Company has no obligation to employ the Executive in the future.

3. Except as otherwise provided herein, including in Section 9, the Executive further agrees that the Executive will not disparage or subvert the Company, or make any statement reflecting negatively on the Releasees including, but not limited to, statements relating to the operation or management of the Company, the Executive’s employment and the termination of the Executive’s employment, irrespective of the truthfulness or falsity of such statement. Except as otherwise provided herein, including in Section 9, the Company agrees and the Company agrees to cause the Company’s then current members of the

EXHIBIT B

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

SEPARATION AND RELEASE AGREEMENT

board of directors and executive management team, each to not disparage or subvert the Executive, or make any statement reflecting negatively on the Executive in cluding, but not limited to, statements relating to the Executive’s employment and the termination of the Executive’s employment, irrespective of the truthfulness or falsity of such statement.

4. The Executive acknowledges that if the Executive had not executed this Separation and Release Agreement containing a release of all claims, the Executive would not have been entitled to the payments and benefits set forth in Articles 4 and 5 of the At-Will Agreement.

5. This Separation and Release Agreement and the At-Will Agreement contain the entire agreement between the Company and the Executive relating to the subject matter hereof. No prior or contemporaneous oral or written agreements or representations may be offered to alter the terms of this Separation and Release Agreement. To the extent Employee has entered into other agreements with the Company that are not in conflict with this Separation and Release Agreement, including, but not limited to, the Executive’s Indemnification Agreement dated March 27, 2013, the Employee/Independent Contractor Proprietary Information and Assignment of Inventions Agreement dated March 7, 2013, and the Restricted Stock Agreements dated March 11, 2013, December 19, 2014 and August 12, 2016 (and additional restricted stock agreements agreed to by the Parties), the terms of this Separation and Release Agreement shall not supersede, but shall be in addition to such other agreements.

6. Except as required by law, the Executive agrees not to disclose the terms of this Separation and Release Agreement to anyone, except the Executive’s spouse, attorney and, as necessary, tax/financial advisor. Likewise, the Company agrees that the terms of this Separation and Release Agreement will not be disclosed except as may be necessary to obtain approval or authorization to fulfill its obligations hereunder or as required by law. It is expressly understood that any violation of the confidentiality obligation imposed hereunder constitutes a material breach of this Separation and Release Agreement.

7. Notice of Immunity under the Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016. Notwithstanding any other provision of this Separation and Release Agreement or the provisions contained in any other agreements pertaining to confidentiality that the Executive has signed, the Executive understands that the Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that: (i) is made: (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit t or other proceeding. If the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the Company’s trade secrets to the Executive’s attorney and use the trade secret information in the court proceeding if the Executive: (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.

8. The Executive represents that the Executive has returned to the Company or destroyed and does not presently have in the Executive’s possession or control any Confidential Information as defined in the At-Will Agreement, records and business documents, whether on computer or hard copy, and other materials (including but not limited to computer disks and tapes, computer programs and software, office keys, correspondence, files, customer lists, technical information, customer information, pricing information, business strategies and plans, sales records and all copies thereof) (collectively, the “Corporate Records”) provided by the Company and/or its predecessors, subsidiaries or affiliates or obtained as a result of the Executive’s prior employment with the Company and/or its predecessors, subsidiaries or affiliates, or created by the Executive while employed by or rendering services to the Company and/or its predecessors, subsidiaries or affiliates. In addition, the Executive has or will

EXHIBIT B

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

SEPARATION AND RELEASE AGREEMENT

promptly return in good condition any other Company owned equipment or proper ty, including, but not limited to, automobiles, personal data assistants, facsimile machines, copy machines, pagers, credit cards, cellular telephone equipment, business cards, laptops and computers. At the Executive’s request, the Company will make reaso nable arrangements to transfer cellular phone numbers and personal fax numbers to the Executive.

9. Nothing in this Separation and Release Agreement shall prohibit or restrict the Executive, the Company, or any member of the Company’s board of directors or executive management team from: (i) making any disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s designated legal, compliance or human resources officers; or (iii) filing, testifying, participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization.

10. The parties agree and acknowledge that the agreement by the Company described herein, and the release of any asserted or unasserted claims against the Releasees, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Releasees to the Executive.

11. The Executive agrees and recognizes that should the Executive materially breach the obligations or covenants set forth in Article 6 or 7 of the At-Will Agreement, the Company will have no further obligation to provide the Executive with the consideration set forth in Articles 4 and 5 of the At-Will Agreement, and will have the right to seek repayment of all consideration paid up to the time of any such breach. Notwithstanding the foregoing, the Executive acknowledges that if the Executive breaches Article 6 or 7 of the At-Will Agreement, and if the Company terminates or recovers any of the payments or benefits provided under Articles 4 and 5 of the At-Will Agreement (as provided for in Articles 6 and 7 of the At-Will Agreement), the release provided by Section 1 of this Separation and Release Agreement shall remain valid and enforceable.

12. The Executive further agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as to an equitable accounting of all earnings, profits and other benefits arising from any violations of this Separation and Release Agreement, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. The Company further agrees that the Executive shall be entitled to preliminary and permanent injunctive relief for Executive’s claims under this Separation and Release Agreement where there is no adequate remedy at law, without the necessity of proving actual damages, as well as to an equitable accounting of all earnings, profits and other benefits arising from such violations of this Waiver and Release, which rights shall be cumulative and in addition to any other rights or remedies to which the Executive may be entitled.

13. This Separation and Release Agreement and the obligations of the parties hereunder shall be construed, interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania.

14. The Executive certifies and acknowledges as follows:

(a) That the Executive has read the terms of this Separation and Release Agreement, and that the Executive understands its terms and effects, including the fact that the Executive has agreed to REMISE, RELEASE AND FOREVER DISCHARGE the Releasees from any legal action arising out of

EXHIBIT B

EXECUTIVE AT-WILL EMPLOYMENT AGREEMENT

SEPARATION AND RELEASE AGREEMENT

the Executive’s employment relationship with the Company and the termination of that employment relationship; and

(b) That the Executive has signed this Separation and Release Agreement voluntarily and knowingly in exchange for the consideration described herein, which the Executive acknowledges is adequate and satisfactory to her and which the Executive acknowledges is in addition to any other benefits to which the Executive is otherwise entitled; and

(c) That the Executive has been and is hereby advised in writing to consult with an attorney prior to signing this Separation and Release Agreement; and

(d) That the Executive does not waive rights or claims that may arise after the date this Separation and Release Agreement is executed; and

(e) That the Company has provided the Executive with a period of twenty-one (21) days within which to consider this Separation and Release Agreement, and that the Executive has signed on the date indicated below after concluding that this Separation and Release Agreement is satisfactory ; and

(f) The Executive acknowledges that this Separation and Release Agreement may be revoked within seven (7) days after execution, and it shall not become effective until the expiration of such seven (7) day revocation period. In the event of a timely revocation by the Executive, this Separation and Release Agreement will be deemed null and void and the Company will have no obligations hereunder or under Articles 4 and 5 of the At-Will Agreement.

Intending to be legally bound hereby, the Executive and the Company executed the foregoing Separation of Employment and General Release Agreement this _____ day of _______, ____.


JoEllen Lyons Dillon
			Witness:
Executive
The ExOne Company

By:			Witness:
Name: James McCarley Title: Chief Executive Officer

Exhibit 10.2

THE EXONE COMPANY

CHANGE OF CONTROL SEVERANCE PLAN

And Summary Pl an Description

Effective August 8, 2017

This Severance P l an (the “Plan") shall become effective with respect to any particular Designated Employee (as defined below) as of the date such Designated Employee is employed in a position that has been designated for participation in the Plan by The ExOne Company (“ExOne” and, together with its subsidiaries, the “ Company") as provided in Exhibit A hereto. This document is al so intended to constitute the Summary Pl an Description for the Plan.

The Plan is effective as of August 8, 2017. The Plan is intended to comply with the provisions of Section 409A of the I nternal Revenue Code of 1986, as amended (the “Code") and the regulations and other Treasury Department guidance promulgated thereunder, and shall be i nterpreted accordingly.

Purpose

Consistent with creating long-term shareholder value, the principal purposes of the Pl an are to (i) provide an incentive to the Designated Employees to remain in the employ of the Company, notwithstanding any uncertainty and job i nsecurity wh i ch may be created by an actual or prospective Change of Control , (ii ) encourage the Designated Employee's full attention and dedication to the Company currently and in the event of any actual or prospective Change of Control, and (iii) provide an incentive for the Designated Employees to be objective concerning any potential Change of Control and to fully support any Change of Control transaction approved by the Board of Directors.

Defi niti ons

Certain terms not otherwise defined i n this Pl an shall have the meanings set forth i n this Secti on 2.

(a) Cause . For purposes of this Plan and any agreements entered into pursuant to the Plan only, Cause shall mean:

(i) fraud, misappropriation, embezzlement or other act of material misconduct against the Company or any of its affiliates;

(ii) conviction of a felony involving a crime of moral turpitude;

(iii) willful and knowing violation of any rules or regulations of any governmental or regulatory body material to the business of the Company; or

(iv) substantial and willful failure to render services in accordance with the terms of this Agreement (other than as a result of illness, accident or other physical or mental incapacity), provided that a demand for performance of services has been del ivered to the Designated Employee i n writing by or on behalf of the board of directors of the Employer at l east 60 days prior to termination i dentifying the manner i n which such board of directors believes that the Desi gnated Employee has failed to perform and (B) the Designated Employee has thereafter failed to remedy such failure to perform.

(b) Change of Control . The term "Change of Control" means the occurrence of any of the following, provided such event also constitutes a change in control event as defined under Section

409A of the Code:

(i) if any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing greater than 50% of the combined voting power of the Company’s then outstanding securities, whether or not the Board shall have first given its approval of such acquisition; or

(ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new Directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof; or

(iii) the consummation of a merger, combination or consolidation of the Company with any other corporation or entity; provided, however, a Change in Control shall not be deemed to have occurred: (i) if such merger, combination or consolidation would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) either directly or indirectly more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) if the corporate existence of the Company is not affected and following the merger or consolidation, the majority of the Directors of the Company prior to such merger or consolidation constitute at least a majority of the Board or the entity that directly or indirectly controls the Company after such merger or consolidation; or

(iv) the sale or disposition by the Company of all or substantially all the Company’s assets; or

(v) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.

(c) Compensation . “Compensation" shall mean the Designated Employee's annual base salary as in effect immediately prior to the date the Notice of Termination provided for in Section 3(c) of the Plan is given or i n effect immediately prior to the date of the Change of Control, whichever is greater.

(d) Designated Empl oyees . "Designated Employees" shall refer to those employees of ExOne and i ts subs i d i ar i es (the ent i ty di rectly employing a Designated Employee shall be referred to herein, with respect to such Designated Employee, as the "Employer") who are employed in a position that is listed on Exhibit A attached hereto.

(e) Good Reason . A Designated Employee's termination of employment with the Company shall be deemed for "Good Reason" if it occurs within six months of any of the following without the Designated Employee's express written consent:

(i) A material and sustained diminution in the Designated Employee's duties or position from those in effect i mmediate l y prior to the Change of Control;

(ii) A material reduction by the Company in the Designated Employee's annual base sal ary as i n effect on the date of a Change of Control or as in effect thereafter if such compensation has been increased and such i ncrease was approved prior to the Change of Control;

(iii) Relocation of the Designated Employee's primary place of employment to any pl ace more than 35 miles from the employee’s designated primary pl ace of employment;

(iv) Any material breach by the Company of any provision of the Pl an or of any agreement entered into between the Company and the Designated Employee; or

(v) Any failure by the Company to obtain the assumption of the Plan or any agreement entered i nto pursuant to the P l an by any successor or assign of ExOne.

A Designated Employee claiming Good Reason for termination of employment must give written notice to the Company of his intention to terminate his employment for Good Reason, which notice shall (i) state in detail the particular circumstances that constitute the grounds on which the proposed termination for Good Reason is based and (ii) be given no later than 90 days after the first occurrence of such circumstances. The Company shall have 30 days after receiving such notice in which to cure such grounds. If the Company fails to cure such grounds within such 30-day period, such Designated Employee's employment with the Company shall thereupon terminate for Good Reason.

(f) Protection Period . Protection Period means the period (i) starting on the earlier of (A) the date on which a definitive agreement is signed that, if consummated, would result in the occurrence of a Change of Control, or (B) the Change of Control itself if not preceded by such a definitive agreement, and (ii) ending on the earlier of (A) the date which is 18 months following the occurrence of the Change of Control, or (B) the public announcement that the transaction(s) contemplated by the definitive agreement will not take place.

(g) Release . Release means a general release of claims against the Company and the other persons specified therein substantially in the form attached hereto as Exhibit B, or in such other form as is required to comply with applicable law.

Termination In Connection with Change of Control

(a) Termination of Employment .

(i) In the event a Designated Employee in Tier I, Tier II or Tier III, at any time during the Protection Period, either (A) has a voluntary employment termination for Good Reason, or (B) has an involuntary employment termination for any reason other than for Cause, such Designated Employee shall be entitled to receive following such employment termination the payments and benefits described in Section 4(a) and 5 of this Pl an.

(ii) In the event a Designated Employee in Tier 1, within 30 days following the date of a Change of Control, has a voluntary employment termination (with or without Good Reason), such Designated Employee shall be entitled to receive following such employment termination the payments and benefits described in Section 4(b) of the Plan; provided, however, that such Designated Employee shall be required to repay any such payments or benefits to the Company if such Designated Employee becomes reemployed by the Company or reengages with the Company as a consultant within 12 months following the Date of Termination.

(iii) In the event a Designated Employee in Tier II or Tier III, within 30 days after the date which is 18 months after the date of the Change of Control, has a voluntary termination (with or without Good Reason), such Designated Employee shall be entitled to receive following such employment termination the payment and benefits described in Section 4(c) of the Plan.

(iv) Notwithstanding any other provision of this Plan, no payments or benefits shall be made or provided under this Plan in the event that the Designated Employee's employment i s terminated by hi s Disability or by his death or for Cause.

(b) Disability . If, as a result of the Designated Employee's incapacity due to physical or mental illness, accident or other i ncapacity (as determined by the board of directors of the applicable Employer i n good faith) , the Designated Employee shall have been absent from his duties with the

Employer on a full-time basis for si x consecutive months (or for a period of 180 days, whether or not consecutive, in any 12 consecutive month period) and, within 30 days after written Notice of Termination thereafter given by the Employer, the Designated Empl oyee shall not have returned to the full time performance of the Designated Employee's duties, the Empl oyer may, to the extent permitted by applicable law, terminate the Designated Employee's employment for "Disability".

(c) Notice of Termination . Any purported termination of the Designated Employee's employment by the Designated Employee's Employer or the Designated Employee hereunder shall be communicated by a Notice of Termination to the other party in accordance with the terms of the agreement entered into pursuant to the Pl an. For purposes of the Plan and any agreement entered into pursuant hereto, a "Notice of Termination" shall mean a written notice which shall i ndicate those specific termination provisions in the Plan applicable to the termination and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for application of the prov i sions so i ndicated.

(d) Date of Termination . "Date of Termination” shall mean (i) if the Designated Employee is terminated by the Employer for Disability, thirty (30) days after Notice of Termination is given to the Desi gnated Employee (provi ded that the Designated Employee shall not have returned to the performance of the Designated Employee's duties on a full-time basis during such thirty (30) day period) or (ii) if the Designated Employee's employment is terminated by the Employer for any other reason or by the Designated Employee, the date on whi ch a Notice of Termination is given.

Severance Compensation upon Termination of Employment

(a) If the employment wi th the Company of a Designated Employee i n Tier I, Tier II or Tier III shall be terminated as set forth in Section 3(a)(i) of the Plan, then ExOne shall cause each Employer to pay and provide as follows to such Designated Empl oyee:

(i) For a Desi gnated Employee in Tier I, (A) provided a Change of Control is effectuated during the Protection Period, a • lump sum in cash on the sixtieth day following the later of the Date of Termination or the date on which the Change of Control occurs, in an amount equal to 2.5x the Designated Employee’s Compensation; and (B) for 18 months following the Date of Termination, health (medical, dental and vision) benefits substantially similar to those benefits which the Designated Employee is receiving immediately prior to the Change of Control or, if greater, immediately prior to the Notice of Termination.

(ii) For a Designated Employee in Tier II, (A) provided a Change of Control is effectuated during the Protection Period, a lump sum in cash on the sixtie th day following the later of the Date of Termination or the date on which the Change of Control occurs, in an amount equal to 2.0x the Designated Employee’s Compensation; and (B) for 18 months following the Date of Termination, health (medical, dental and vision) benefits substantially similar to those benefits which the Designated Employee is receiving immediately prior to the Change of Control or, if greater, immediately prior to the Notice of Termination.

(iii) For a Designated Employee in Tier III, ( A) provided a Change of Control is effectuated during the Protection Period, a lump sum in cash on the sixtieth day following the later of the Date of Termination or the date on which the Change of Control occurs, in an amount equal to 1.0x the Designated Employee’s Compensation; and (B) for 12 months following the Date of Termination, health (medical, dental and vision) benefits substantially similar to those benefits which the Designated Employee is receiving immediately prior to the Change of Control or, if greater, immediately prior to the Notice of Termination

The benefit continuation period described in subsections (i), (ii) and (iii) above shall run concurrently with the period of COBRA continuation if COBRA benefits are elected by the Designated Employee, and any remaining COBRA benefits following the end of such benefit continuation period shall be at the Designated Employee’s sole expense.

(b) If the employment wi th the Company of a Designated Employee i n Tier I shall be terminated as set forth in Section 3(a)(ii) of the Plan, then ExOne shall cause each Employer to pay and provide to such Designated Empl oyee a lump sum payment on the sixtieth day following the Date of Termination, in an amount equal to 2.0x the Designated Employee’s Compensation.

(c) If the employment with the Company of a Designated Employee in Tier II or Tier III shall be terminated as set forth in Section 3(a)(iii) of the Plan , then ExOne shall cause each Employer to pay and provide as follows to such Designated Employee: (i) for a Designated Employee in Tier II, a lump sum in cash on the sixtieth day following the Date of Termination, in an amount equal to nine (9) months of the Designated Employee’s monthly Compensation; and (ii) for a Designated Employee in Tier III, a lump sum in cash on or as soon as administratively practicable, but in any event within 30 days, following the Date of Termination, in an amount equal to six (6) months of the Designated Employee’s monthly Compensation.

(d) Release . No Designated Employee shall be eligible to receive any payments or other benefits under the Plan unless he or she executes a Release in favor of the Company and others as set forth on Exhibit B, or in such other form as is required to comply with applicable law, relating to all claims or liabilities of any kind against ExOne including his or her employment with ExOne or a subsidiary thereof and the termination of the Designated Employee’s employment, and such Release becomes effective and has not been revoked by the Designated Employee by the sixtieth (60th) day following the Date of Termination. If the Designated Employee does not execute and return the Release such that it does not become effective, or if the Release has been revoked, within the applicable 60-day period, the Designated Employee shall cease to be entitled to any payments or benefits under this Plan.

Equity Vesting

Pursuant to the Board’s authority under any Ex One equity incentive plan or individual award agreement, but not amending any provisions of such plans, 50% of any unvested ExOne stock options, restricted stock, restricted stock units or any other equity based awards held by a Designated Employee and outstanding immediately prior to the occurrence of a Change of Control (“Unvested Equity Awards”) shall become vested and exercisable upon the occurrence of a Change of Control. The amount of any Unvested Equity Awards that are subject to the achievement of performance goals that shall be eligible to vest pursuant to this Section 5 shall be determined based on achievement of the performance goals as of the date of the Change of Control, following adjustment of such goals in good faith by the Committee to reflect the shortened performance period. The remaining 50% of any Unvested Equity Awards shall become vested and exercisable pursuant to the terms of the equity incentive plan or individual award agreement, provided that any remaining Unvested Equity Awards shall vest and become exercisable upon a termination of such Designated Employee’s employment following such Change of Control pursuant to Section 3(a)(i) of the Plan, subject to the Designated Employee’s execution and non-revocation of a Release pursuant to Section 4(d).

Tax Matters

The Designated Employee will be liable for and will pay all Designated Employee’s tax liability by virtue of any payments made to the Designated Employee under the Plan or otherwise. The Designated Employee shall not be entitled to any parachute tax gross-up payment. Accordingly, notwithstanding any contrary provisions in any other plan, program or policy of ExOne, if all or any portion of the benefits payable under the Plan, either alone or together with other payments and benefits which the Designated Employee receives or is entitled to receive from ExOne or any other source, would constitute an “excess parachute payment” within the meaning of Section 280G of Code, ExOne shall reduce the Designated Employee’s payments and benefits payable under the Plan to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code. The effect of the excise tax imposed under Section 4999 of the Code and other factors applicable in the determinations to be made under this Section shall be determined by the Accountants. For the purposes of this Section 6, the "Accountants" shall mean ExOne’s independent certified pub l i c accountants serving i mmed i ately prior to the Change of Control. All fees and expenses of the Accountants in

connection with matters relating to this Section 6 shall be paid by ExOne.

Noncompetition .

If at any time during the Designated Employee’s employment and for a period of 12 months thereafter, the Designated Employee, without the express, prior written consent of the Company’s General Counsel, either directly or indirectly, as an employee, agent, contractor, consultant, partner, member, officer, director or stockholder (other than as a stockholder of less than 5% of the equities of a publicly traded corporation), wherever the Company is marketing or providing its services or products, participates in any activity as, or for, an individual, business or any other entity or enterprise engaged or having publicly announced its intent to engage in business that is substantially similar to the Company’s business, and which is the same or similar to the activities in which the Designated Employee was involved at the Company, then the Designated Employee shall immediately deliver to the Company an amount in cash equal to (i) the amount of any severance previously paid to the Designated Employee pursuant to Section 4 above, and (ii) the aggregate fair market value, determined as of the applicable exercise or settlement date, of all shares of ExOne stock which were delivered to the Employee or cancelled in payment of taxes upon exercise or settlement of any equity awards which vested pursuant to Section 5 above, less any amount paid by the Designated Employee for such shares.

The rights of the Company set forth in this Section 7 shall not limit or restrict in any manner any rights or remedies which the Company or any of its affiliates may have under law or under any separate employment, confidentiality or other agreement with the Designated Employee or otherwise with respect to the events described above. In any judicial proceeding any provision of this Section 7 is found to be so broad as to be unenforceable, such provision shall be interpreted to be only so broad as to be enforceable.

Claims Procedure

(a)

Claims Procedure .

(i) Benefits will be provided to each Designated Empl oyee as specified in this Pl an. If a Designated Employee believes that he has not been provi ded with benefits due under the Plan, then the Designated Employee (who i s hereafter referred to as the "Claimant") has the right to make a written claim for benefits under the Plan. Written claims for severance pay benefits shall be governed by the following procedures; any wri tten claims for health or welfare benefits shall be governed by the claims procedures of the applicable health or welfare plan. If such a written claim is made, and the Administrator wholly or partially denies the clai m, the Administrator shall provide the Claimant with written notice of such denial , setting forth, in a manner cal culated to be understood by the Claimant:

(A) the specific reason or reasons for such denial;

(B) specific reference to pertinent Plan provisions on which the denial is based;

(C) a description of any additional material or information necessary for the Clai mant to perfect the claim and an explanation of why such material or information is necessary; and

(D) an explanation of the Plan's claims review procedure and time li mits applicable to those procedures, including a statement of the Clai mant's ri ght to bring a civil action under ERI SA Section 502(a) if the claim is denied on appeal.

(ii) The written notice of any claim denial pursuant to Secti on 8(a)(i) shall be given not later than thirty (30) days after receipt of the claim by the Administrator, unless the Administrator determines that special circumstances require an extension of time for processing the claim, in which event:

(A) written notice of the extension shall be given by the Administrator to the Claimant prior to thirty (30) days after receipt of the claim;

(B) the extension shall not exceed a peri od of thirty (30) days from the end of the initial thirty (30) day period for giving notice of a claim denial; and

(C) the extension noti ce shall indicate (1) the special circumstances requiring an extension of time and (2) the date by which the Administrator expects to render the benefit determination.

(iii) The decision of the Administrator shall be final unless the Clai mant, within sixty (60) days after recei pt of notice of the cl aims denial from the Administrator, submits a written request to the Board of Directors of ExOne, or its del egate, for an appeal of the denial. During that sixty (60) day period, the Cl aimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information rel evant to the claim for benefits. The Cl aimant shall be provided the opportunity to submit written comments, documents, records, and other information rel ating to the claim for benefits as part of the Claimant's appeal. The Clai mant may act i n these matters individually, or through his or her authorized representative.

(iv) After receiving the written appea l , i f the Board of Directors of ExOne, or its delegate, shall issue a written decision notifying the Claimant of its dec i s i on on rev i ew, not l ater than thirty (30) days after rece i pt of the written appeal , unless the Board of Directors of ExOne or its delegate determines that special circumstances require an extension of time for revi ewing the appeal, i n which event:

(A) written notice of the extension shall be given by the Board of Directors of ExOne or i ts de l egate prior to thirty (30) days after receipt of the written appeal;

(B) the extension shall not exceed a peri od of thirty (30) days from the end of the ini tial thirty (30) day review period; and

(C) the extension notice shall i ndi cate (1) the special circumstances requiring an extension of time and (2) the date by which the Board of Di rectors of ExOne or its delegate expects to render the appeal decision.

The period of time within which a benefit determination on review i s required to be made shall begin at the time an appeal is received by the Board of Directors of ExOne or i ts delegate, w i thout regard to whether all the information necessary to make a benefit determination on review accompanies the filing of. the appeal. If the period of time for reviewing the appeal i s extended as permitted above, due to a claimant's failure to submit i nformation necessary to decide the claim on appea l , then the period for making the benefit determination on revi ew shall be tolled from the date on which the notification of the extension i s sent to the claimant until the date on which the claimant responds to the request for additional information.

(v) I n conducting the revi ew on appeal , the Board of Directors of ExOne or its del egate shall take into account all comments, documents, records, and other information submitted by the claimant relating to the cla i m, without regard to whether such i nformation was submitted or considered in the initial benefit determination. If the Board of Directors of ExOne or i ts delegate upholds the den i al, the written not i ce of decision from the Board of Directors of ExOne or its delegate shall set forth, in a manner calculated to be understood by the Claimant:

(A) the specific reason or reasons for the denial;

(B) specific reference to pertinent Plan provisions on which the denial is based;

(C) a statement that the Claimant is entitled to be receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information rel evant to the claim for benefits; and

(D) a statement of the Claimant's right to bring a civil action under ERI SA 502(a).

(vi) If the Plan or any of its representatives fail to follow any of the above claims procedures, the Claimant shall be deemed to have duly exhausted the admini strative remedies available under the plan and shall be entitled to pursue any available remedies under ERISA Section 502(a), including but not limited to the filing of an action for immediate declaratory relief regarding benefits due under the Plan.

(vii) If the Board of Directors of ExOne or i ts delegate upho l ds the denial on review of a severance pay claim, or if a health or welfare benefit claim is denied on review under the applicable health or welfare plan and/or the administrative remedies thereunder have been exhausted, then the Claimant shall have the ri ght to bri ng a civil action under ERISA Section 502(a).

Mitigation of Damages; Effect of Plan

(a) The Designated Employee shall not be required to mi ti gate damages or the amount of any payment provided for under the Pl an by seeki ng other employment or otherwise, nor shall the amount of any payment provided for under the Plan, i ncluding without l i m i tat i on Section 4 of the Plan, be reduced by any compensation earned by the Designated Employee as a result of employment by another employer or by retirement benefits after the Date of Termination, or otherwise except as expressly provided in Section 11 herein.

(b) Except as otherwise expressly provided herein, the provisions of the Plan, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Designated Employee's existing rights, or ri ghts which would accrue solely as a resul t of the passage of time, under any benefit plan, employment agreement or other contract, plan or arrangement.

10.

Amendments; No Effect On Employment Prior To or After Protection Period

(a) This Plan wi th respect to all Designated Employees or any particular Designated Employee may be terminated or amended by the Board of Directors of ExOne or by i ts Compensation Committee or any other duly authorized Commi ttee thereof; provi ded that a termination or any amendment that reduces the benefits to the Designated Employee provided hereunder or otherwise adversely affects the rights of the Designated Employee shall not be permitted during the Protection Period wi thout the Desi gnated Employee's prior written consent. Termination or amendment of this Plan shall not affect any obligation of ExOne under this Plan which has accrued and is unpaid as of the effective date of the termination or amendment.

(b) Notwi thstanding anything herein or in any agreement entered into pursuant to the Plan to the contrary, the Board of Di rectors of ExOne or the Compensation Committee thereof may amend the Plan (which amendment shall be effective upon i ts adopt i on or at such other t i me designated by the Board of Directors or Compensation Committee, as applicable) at any time as may be necessary, upon the advice of ExOne’s counsel , to avoid the i mposit i on of the additional tax under Section 409A(a)( 1 )(B) of the Code; provided, however, that any such amendment shall be i mplemented in such a manner as to preserve, to the greatest extent possibl e, the terms and conditions of the Plan as in existence immediately prior to any such amendment.

(c) Nothing i n this Plan shall confer upon the Designated Employee any ri ght to continue in the employ of the Company prior to or after (or, subject to the terms of this Plan, during) the Protection Period or shall interfere with or restrict in any way the ri ghts of the Employer, which are hereby expressly reserved except as may otherwise be provided under any other written agreement between the Designated Employee and the Empl oyer, to di scharge the Designated Employee at any time prior to or after (or, subject to the terms of the Plan, during) the Protection Period for any reason whatsoever, with or without Cause. The Designated Employee and ExOne, on behalf of each Employer, acknowledge that, except as may otherwise be provided under any other written agreement between the Designated Employee and such Employer, the employment of the Designated Employee by the Employer is “at will," and if, pri or to the start of or after the end of the Protection Period, the Designated Employee's employment with the Employer terminates for any reason or for no reason, then, except as otherwise provided in Section 4(b) and 4(c), the Designated Employee shall have no further rights under this Plan.

(d) The Employer may withhold from any amounts payable under this Plan such Federal, state, local or other taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Designated Employee's or ExOne’s failure to insist upon strict compliance with any provision hereof or the failure to assert any right the Designated Employee or ExOne may have hereunder, including, without limitation, the right of the Designated Employee to terminate employment for Good Reason, as defined herein, shall not be deemed to be a waiver of such provision or right or any other provision or right under this Plan.

11 . Effect Of Other Agreements

Notwithstanding anything to the contrary provided in this Plan, (i) any amounts payabl e to a Designated Employee pursuant to Section 4 of the Plan shall be reduced by any other amounts of compensation or severance benefits actually paid by the Company to such Designated Employee (A) as a result of the Designated Employee’s termination of employment, or (B) to the extent permitted by applicable law, to obviate a severance obligation where the Designated Employee does not terminate employment and (ii) any benefits that may be provided to a Desi gnated Employee following a termination of empl oyment pursuant to Section 4 of the Plan shall be reduced to the extent that substantially identical benefits are actually received by the Designated Employee under an existing severance agreement or requirement. It is expressly understood, however, that no amounts payable hereunder shall be reduced by amounts payable under the Company's retirement or deferred compensation plans or by amounts payable as accrued vacation or because of the acceleration of the benefits under ExOne’s equity incentive pl ans.

12.

Effect Of Section 409A of the Code.

The Plan is intended to provide payments that are exempt from or compliant with the provisions of Section 409A and the Plan shall be interpreted accordingly.

Each payment under the Plan is intended to be compliant with or excepted from Section 409A, including, but not limited to, by compliance with the short-term deferral exception as specified in Treasury Regulation § 1.409A-1(b)(4) and the involuntary separation pay exception within the meaning of Treasury Regulation § l.409A-1(b)(9)(iii), and the provisions of the Plan will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted or construed).

All reimbursements or provision of in-kind benefits pursuant to the Plan shall be made in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. Specifically, the amount reimbursed or in-kind benefits provided under the Plan during the Designated Employee's taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime

maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Designated Employee's taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

In the event that any Designated Employee also participates in any other severance arrangement sponsored and maintained by the Company, and if the payments under this plan or the other severance arrangement are nonqualified deferred compensation within the meaning of Section 409A (as defined in this Section 10 of this Plan), then the time and form of payments to be made under this Plan and the other severance arrangement, to the extent they are of the same amounts, will be conformed so that such payments are in compliance with the requirements of Section 409A.

Notwithstanding anything to the contrary in this Plan, if, upon the advice of its counsel, ExOne determines that any payments or benefits to be provided to a Designated Employee who is a "Specified Employee" (as such term is defined under Section 409A of the Code and the regulations and other Treasury Department guidance promulgated thereunder (collectively, "Section 409A")) of an Employer (a "Specified Employee") by ExOne or the Employer pursuant to Section 4 of this Plan are or may become subject to the additional tax under Section 409A(a)(1)(B) or any other taxes or penalties imposed under Section 409A ("409A Taxes") as applicable at the time such payments and benefits are otherwise required under this Plan, then:

(a) such payments shall be delayed until the date that is the earlier of six months after date of the Specified Employee's "separation from service" (as such term is defined under Section 409A) with the Company or the date of the Specified Employee's death, or such shorter period that, in the opinion of such counsel, is sufficient to avoid the imposition of 409A Taxes (the "Payments Delay Period"), without interest; and

(b) with respect to the provision of such benefits, for a period of six months following date of the Specified Employee's "separation from service" (as such term is defined under Section 409A) with the Company, or such shorter period, that, in the opinion of such counsel, is sufficient to avoid the imposition of 409A Taxes (the " Benefits Delay Period"), the Specified Employee shall be responsible for the full cost of providing such benefits, and (ii) on the first day following the Benefits Delay Period, the Employer shall reimburse the Specified Employee for the costs of providing such benefits imposed on the Specified Employee during the Benefits Delay Period, without interest.

EXHIBIT A

THE EXONE COMPANY

CHANGE OF CONTROL SEVERANCE PLAN

DESIGNATED EMPLOYEES

Tier I Employees

Chief Executive Officer

Tier II Employees

[List]

Tier III Employees

[List]

EXHIBIT B

THE EXONE COMPANY

CHANGE OF CONTROL SEVERANCE PLAN

FORM OF RELEASE

[Attached.]

Exhibit 31.1

CERTIFICATIONS

I, James L. McCarley, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The ExOne Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2017

The ExOne Company

/s/ James L. McCarley

James L. McCarley

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Brian W. Smith, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The ExOne Company;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2017

The ExOne Company

/s/ Brian W. Smith

Brian W. Smith

Chief Financial Officer

(Principal Financial Officer and Principal

Accounting Officer)

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of this Quarterly Report on Form 10-Q of The ExOne Company (the “Company”) for the quarterly period ended September 30, 2017, with the Securities and Exchange Commission on the date hereof (the “Report”), the Undersigned certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2017

/s/ James L. McCarley

James L. McCarley

Chief Executive Officer

(Principal Executive Officer)

/s/ Brian W. Smith

Brian W. Smith

Chief Financial Officer

(Principal Financial Officer and Principal

Accounting Officer)