At the Annual Meeting, shareholders will vote on the following matters:

Holders of record of FARO common stock at the close of business on March 25, 2022April 4, 2023, are entitled to vote at the Annual Meeting.

FARO is pleasedDetailed information as to the business to be providing accesstransacted and matters to our proxy materials primarily by taking advantagebe acted upon at the Annual Meeting is contained in the accompanying Notice of the SecuritiesAnnual Meeting and Exchange Commission rule that allows issuers to furnishProxy Statement. FARO mailed these proxy materials to theiryou, and all of our other shareholders, over the Internet. Onon or about April 14, 2022, we will mail a Notice of Internet Availability of Proxy Materials (the “Notice”) to the majority of our shareholders, and on or about the same date, we will mail a printed copy of the proxy statement and a proxy card to shareholders who have requested to receive them. On the mailing date of the Notice, all shareholders will have the ability to access all of the24, 2023. These proxy materials including thecontain instructions for voting online or by telephone and include our fiscal 2022 annual report to shareholders. We encourage you to review these proxy statement, on a website referred to in the Notice and the proxy statement. We believe this method allows us to providematerials before you with the information you need more expeditiously, while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting.vote.

We have adopted an SEC-approved procedure called “householding.” Under this procedure, we may deliver a single copy of the Notice and, if applicable, this Proxy Statement and the Annual Reportproxy materials to multiple shareholders who share the same address unless we have received contrary instructions from one or more of the shareholders. This procedure reduces the environmental impact of our annual meetings and reduces our printing and mailing costs. Shareholders who participate in householding will continue to receive separate proxy cards if they received a printed set of the proxy materials.cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, this Proxy Statement and the Annual Reportproxy materials to any shareholder at a shared address to which we delivered a single copy of any of these documents.

This year our Annual Meeting will be a completely virtual meeting. There will be no physical meeting location.

Shareholders may select a frequency of every one, two or three years, or they may abstain from voting on this proposal. The non-binding selection of one of the three frequency options requires the affirmative vote of a majority of the votes cast by the shareholders. If none of the frequency options receives the approval of a majority of the votes cast, the Board will view as the selection of the shareholders the frequency alternative that receives the greatest number of votes. Abstentions and broker non-votes will have no impact on the outcome of this matter.

The three nominees for director, Moonhie Chin, John Donofriodirectors, Michael D. Burger, Alex Davern, and Yuval Wasserman,Rajani Ramanathan are currently directors of the Company and are proposed to be elected at the Annual Meeting to serve until the 20252026 annual meeting of shareholders. TheOf the remaining fiveseven directors, whosesix of the directors' terms do not expire at the Annual Meeting, and they will continue to serve as members of the Board for the terms set forth below. One director, Mr. Stephen Cole, has confirmed that he will be retiring from the Board upon the expiration of his current term at the Company’s 2023 Annual Meeting. As Mr. Cole will not stand for re-election to the Board when his current term ends effective upon the commencement of the 2023 Annual Meeting, the Board has resolved that upon the expiration of Mr. Cole’s term, the authorized number of directors shall be reduced to nine. Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement.

Directors are elected by a plurality of the votes cast, meaning that the three nominees receiving the highest number of affirmative votes cast for the election of directors at the Annual Meeting will be elected as directors. Shares may not be voted cumulatively, and proxies cannot be voted for a greater number of persons than the number of nominees named. If you received a printed set of proxy materials, sharesShares voted by the accompanying proxy card will be voted “FOR” Moonhie Chin, John DonofrioMichael D. Burger, Alex Davern, and Yuval Wasserman,Rajani Ramanathan, unless the proxy card is marked to withhold authority. If you vote “Withhold” with respect to one or more nominees, your shares will not be voted with respect to the person or persons indicated.indicated, and will have no impact on the outcome of the election. Broker non-votes on the election of directors will have no impact on the outcome of the election. We have a director resignation policy for those director nominees who receive more “withhold” than “for” votes in uncontested elections, which requires such director nominees to tender their resignation to the Board following certification of the shareholder vote. The Nominating, Governance and Sustainability Committee will then act to determine whether to accept the director’s resignation and submit such recommendation for prompt consideration by the Board.

The Board believes that Mr. Donofrio’s qualifications to sit on our Board include his strong experience and skills in legal, risk management, intellectual property protection and licensing, corporate governance, manufacturing, and government regulation.

Role and Risk Oversight of the Board of Directors

Each Board committee is also responsible for reviewing our risk exposure with respect to the respective committee’s areas of responsibility, discussing such risks with Company management, and reporting significant risks to the Board. Each Board committee is comprised of the group of independent Board members that best contribute to the Oversight Functions.

The Audit Committee focuses on significant risks associated with financial exposures. The Talent, Development and Compensation Committee particularly reviews risks related to our compensation policies and practices as well as other organizational exposures. The Nominating, Governance and Sustainability Committee focuses on risks relating to our corporate governance structure and practices.

The Board has the flexibility to establish a leadership structure that works best for the Company at a particular time and reviews that structure periodically. At times during our past, the positions of Chairman of the Board and President and CEO have been held by two different people and, at other times, the positions have been combined and held by the same person. Currently, John DonofrioYuval Wasserman is our independent Chairman of the Board. Subject to his election and effective as of immediately following the Annual Meeting, Yuval Wasserman will serve as our next independent Chairman of the Board. The Board believes that having an independent Chairman of the Board allows our CEO, Mr. Burger, to concentrate on overseeing the management of our business while Mr. DonofrioWasserman provides leadership and oversight of the functioning of the Board. Because we currently have an independent Chairman of the Board, there is currently no Lead Director.

The Chairman of the Board, in addition to setting board meeting schedules and agendas and chairing board meetings, facilitates information flow and communication between the independent directors and Company management; coordinates the activities of the other independent directors; together with the Talent, Development and Compensation Committee and the Board, evaluates the performance of the President and CEO; recommends the retention of Board consultants;advisors; has the authority to call meetings of the independent directors; if requested by significant shareholders, ensures that he is available for consultation and direct communication; and performs such other duties and responsibilities as the Board of Directors from time to time determines.

Executive sessions of independent directors are held at each regularly scheduled Board meeting for a discussion of relevant subjects, including the Oversight Functions. The Chairman of the Board with input from the independent directors, prepares the agenda for executive sessions of the independent directors, although all independent directors are encouraged to raise any matters for discussion. The Chairman of the Board presides over the executive sessions of the independent directors. In addition, independent directors meet with the CEO separately at least quarterly at regularly scheduled executive sessions to discuss management succession and other issues.

We believe that our current Board structure appropriately ensures that an independent director serves in a Board leadership position, acting as a liaison between the Board and Company management and allowing the Board to better perform its Oversight Functions. The current Board structure allows our President and CEO to focus on the day-to-day operations of the Company and also permits the independent directors to discuss and address risk management with Company management in Board meetings, as well as separate from management in executive session. The Board evaluates its leadership structure from time to time and changes it as circumstances warrant.

We are required to comply with Nasdaq’s listing standards, including its corporate governance rules. Nasdaq rules require the Board to be comprised of a majority of independent directors, as that term is defined by the Nasdaq Stock Market Rules.

The Board has affirmatively determined that Jawad Ahsan, Lynn Brubaker, Stephen R. Cole, John Donofrio, Moonhie Chin, Alex Davern, John Donofrio, Rajani Ramanathan, Yuval Wasserman, and Jeroen van Rotterdam are independent directors, as defined by the Nasdaq Stock Market Rules. The Board has determined that Mr. Burger is the only director who is not independent, because he is the President and CEO of the Company. In addition, none of our directors areis a party to any agreement or arrangement that would require disclosure pursuant to Nasdaq Rule 5250(b)(3).

The Board of Directors held six11 regular meetings and no special meetings during 2021.2022. Each of our directors then in office attended all of the applicable regular meetings of the Board and of the committees on which he or she served during 2021.2022. In addition, the independent directors met in executive session without the presence of management at each regular Board meeting in 20212022 and when deemed appropriate at other meetings of the Board and of the committees. While we have not adopted a formal policy regarding Board attendance at annual shareholder meetings, we encourage each of our Board members to attend the annual shareholder meetings in person. Withperson or virtually through an online meeting portal, as applicable. Prior to 2020, the exceptiononset of the 2020 and 2021 annual meetings, all ofCOVID-19 pandemic, our directors attended the Company'sCompany’s annual meeting of shareholders in person.

The Board of Directors has three standing committees: an Audit Committee, a Talent, Development and Compensation Committee, and a Nominating, Governance and Sustainability Committee. Each committee previously was comprised of all of our independent Board members but effective at the Annual Meeting, each committee's composition will be revised to appoint specific directors to specific committees.

The table below shows current membership for each of the standing Board committees:

The Nominating, Governance and Sustainability Committee’s duties and responsibilities include, among other things:

Annually, the Nominating, Governance and Sustainability Committee reviews the composition of the Board to assess whether it reflects the appropriate experience, tenure, skills, qualifications and qualificationsattributes expected of Board members, as well as a variety of complementary experiences and backgrounds, sufficient to provide sound and prudent guidance, particularly in the areas of senior leadership, operations, finance, technology and governance. The Nominating, Governance and Sustainability Committee assesses the effectiveness of diversity within the Board every year as part of this annual assessment. If, as a result of the assessment, the Nominating, Governance and Sustainability Committee determines that adding or replacing a director is advisable, the Nominating, Governance and Sustainability Committee initiates a search for a suitable candidate to fulfill the Board’s needs. In addition, our Corporate Governance Guidelines provide that if any director who undergoes a change of occupation must notify the Chairman of the Board and the Chairman ofor retires, then the Nominating, Governance and Sustainability Committee of the change and offer to submit his or her resignation. The Board, through the Nominating, Governance and Sustainability Committee, shallmust review the continued appropriateness of such director’s Board membership underand take such action as is deemed necessary, including the changed circumstances and shall determine whether to acceptacceptance or reject therejection of any offer of resignation.resignation by such director.

A shareholder who wishes to nominate a person for election to the Board of Directors must submit a timely written notice to the Company, Attention: Secretary, 250 Technology Park, Lake Mary, Florida 32746. UnderTo be timely under our Bylaws, we must receive the written nomination for an annual meeting not less than 90 days and not more than 120 days prior to the first anniversary of the previouspreceding year’s annual meeting of shareholders, or, ifprovided, however, that in the event that, (i) no annual meeting was held the previouspreceding year or (ii) the date of the current year’s annual meeting is advanced more than 30 days before or delayed more than 60 days after thesuch anniversary date, we must receive the written nomination not more than 120 days prior to the current year’s annual meeting and not less than the later of 90 days prior to thesuch annual meeting or ten days following the day on which public announcement of the date of the annual meeting is first made. For a special meeting, we must receive the written nomination not less than the later of 90 days prior to thesuch special meeting or ten days following the day on which public announcement of the date of the special meeting is first made. Under the Bylaws, the nomination must include (i) all information relating to the candidatesuch proposed nominee that iswould be required to be disclosed in solicitations of proxies for anthe election of directors, or is otherwise required, in each case pursuant to Regulation 14A of the Exchange Act, including the nominee’s written consent to be named in the proxy statement as a nominee and to serving as a director if elected, (ii) a description of (a) all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and (b) any other material relationships, between theor among such shareholder and any beneficial owner, if any, on whose behalf the director nomination is made, and their respective affiliates and associates or others acting in concert with the shareholder or beneficial owner, on the one hand, and each candidateproposed nominee and his or her respective affiliates and associates, or others acting in concert with the candidate,proposed nominee, on the other hand, including all information required under Item 404 of Regulation S–K if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate of or person acting in concert with the shareholder or beneficial owner, were the “registrant” for purposes of that rule and the candidateproposed nominee was a director or executive officer of such registrant, and (iii) as to the shareholder giving such notice and any beneficial owner on whose behalf the director nomination is made, (a) their names and addresses, (b) the class and number of shares of our stock beneficially owned by them, directly or indirectly, as of the applicable record date (c) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock) has been made, an effect or intent of which is to mitigate loss to or manage risk of stock price changes for, or to increase the voting power of, thesuch shareholder or thesuch beneficial owner with respect to any share of our stock, and (d) a representation as to whether the shareholder or any beneficial owner on whose behalf the nomination is made intends, or is or intends to be part of a group that intends, to deliver a proxy statement and/or form of proxy to at least the percentage of our shareholders required to elect the nominee or otherwise to solicit proxies from shareholders in support of the nomination. We may require any proposed nominee to furnish such other information as may reasonably be required to determine his or her eligibility to serve as an independent director or that could be material to a reasonable shareholder’s understanding of the nominee’s independence.

We use a combination of cash and equity compensation to attract and retain qualified candidates to serve on the Board, as detailed in the table below. In setting director compensation, we consider Board compensation benchmarks provided by our third partythird-party compensation consultant, Compensia. Our Director Compensation Program was amended on July 1, 2021.

This proposal is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our executive compensation program and practices. The TDCC endeavors to ensure that the philosophy and operation of our compensation program reinforces our culture and values, creates a balance between risk and reward, attracts, motivates, and retains executives over the long-term and alignspromotes the closer alignment of their interests with those of our shareholders. The TDCC strives to provide total compensation relating to the President and CEO, the other named executive officers and all other employees at the Vice President level and above reporting directly to the President and CEO, that is fair, reasonable and achieves the objective described above. Our executive compensation program includes a significant performance-based component, in the form of a short-term annual incentive award, as well as a substantial emphasis on “at-risk,” equity-based long-term incentives. Please read the Compensation Discussion and Analysis, together with the related compensation tables and narrative disclosure below, for a detailed explanation of our executive compensation program and practices.

Effective June 28, 2021, Katrona Tyrrell resigned from her positionIn April 2022, Mr. Beadle’s employment as Chief People Officer,our Senior Vice President Human Resources.of Sales was terminated and after a transition period his employment with us ended on April 29, 2022. We appointed Mr. Sexton as Senior Vice President of Sales, effective as of April 18, 2022.

In February 2020, we outlinedDespite these challenges, FARO’s management remained focused throughout 2022 on executing our newbusiness strategy, withnavigating and mitigating the primary objective of realizing profitable revenue growth that would ultimately drive increased long-term shareholder value. Our Board of Directors approvedmacro environment challenges and establishing a global restructuring plan (the “Restructuring Plan”), which supports our strategic plan and broadly relies on the following key tenants:

On an annual basis, the compensation of our NEOs is disclosed in our annual proxy statement and submitted to our shareholders for a non-binding advisory vote (“Say on Pay”). In 2022, approximately 36% of the votes cast disapproved of our executive compensation program on an advisory basis. We believe that the vote was -0.9%substantially influenced by the recommendations of the two primary proxy advisory firms, Glass-Lewis and Institutional Shareholder Services (“ISS”), which fell behind our industry group, peer group,who split their shareholder vote recommendation on the Company’s Advisory Vote to Ratify Named Executive Officers’ Compensation proposal, with Glass-Lewis recommending “for” and ISS recommending “against” the proposal. Considering the divergent recommendations of the two proxy advisory firms, and the Russell 2000 index. Our three-year TSRresulting relatively high “against” vote, the Board sought to understand more fully the recommendation provided by ISS to the Company’s shareholders. After further research, it was determined that the equity acceleration provided to a named executive officer who left the Company in 2021, which was consistent with prior practice for 2019 and 2020 named executive officer departures, was not a contractual obligation of the Company and therefore was viewed as discretionary resulting in ISS’s “against” vote recommendation on the proposal.

As a result of the shareholder outreach, along with the input from the Company’s compensation advisors, in the last twelve months the Company took the following actions to further align its compensation practices with current industry group.trends in executive compensation:

Annual short-term cash incentive opportunities are expressed as a percentage of each participant’s base salary. The target award opportunity for Mr. Burger, Mr. Muhich, and Mr. Beadle and Ms. Tyrrell in 20212022 was 100%, 65%, 60% and 40%60% of their respective annual base salaries. As Ms. Tyrrell'sMr. Beadle’s employment was terminated during 2021, she2022, he was not eligible under the terms of the short-term incentive arrangement for a short-term cash incentive payout for 2021.2022.

Grants to executivesAnother key element in the compensation of our executive team is long-term equity incentive compensation are determined by the TDCC and are designed to alignawards, which tie a significant portion of compensation to the executive compensation package withCompany’s performance over time. In 2022, we granted a mix of 50% time-based RSUs (TRSU) and 50% performance-based RSUs (PRSU) as long-term incentive awards to our NEO’s. In combination, we believe these grants provide a balanced focus on sustainable long-term shareholder value creation and retention of key executives in the long-term interests of our shareholders.collective stakeholders. They are also reflective of market practice within our compensation peer group. The total target grant value is established using market data to determine a competitive rate intended to balance the objectives of ensuring appropriate pay positioning in the market while enabling the Company to attract, recruit and retain high-performing talent in a competitive environment. Starting in 2023, the long-term equity incentive awardsgrant mix will shift to 40% time-based vesting and 60% performance based vesting placing more emphasis on aligning pay for performance.

For the 2022 equity grants, the TDCC (or in the case of our CEO, the TDCC recommended and the Board) established the long-term equity award values for Mr. Burger, Mr. Muhich, and Mr. Sexton based on recommendations from Compensia, individual performance, retention consideration and market data. The PRSUs granted in 2021 to Messrs. Burger, Muhich, Beadle and Ms. Tyrrell considered the advice of its compensation consultant, Compensia. As a result, the TDCC determined the mix and vesting of equity awards granted to our named executive officers in 2021 as follows: (1) 50% of the value of the equity awards was in the form of PRSUs, which2022 vest at the end of three years based upon achievement of the Company's relative total shareholder return ("TSR"(“TSR”) compared to the TSRTSRs of the companies in the Russell 2000 Growth Index and pre-established thresholds; and (2) 50% of the value of the equity awards was in the form of TRSUs that vest in equal installments over three years. The TDCC typically grants fair value of the equity incentive awards to approximate the median of our peer group, with adjustments as necessary for the individual executive due to retention concerns and performance.