UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As previously disclosed, on August 22, 2022, the Board of Directors (the “Board”) of Arlo Technologies, Inc. (the “Company”) approved an executive retention plan and delegated authority to the Compensation and Human Capital Committee of the Board (the “Committee”) to approve individual retention agreements (the “Retention Agreements”) with the Company’s Chief Executive Officer, Matt McRae and General Counsel, Brian Busse. The Retention Agreements provide Messrs. McRae and Busse with certain cash bonus opportunities and equity grants that vest upon achievement by the Company of specified cumulative paid subscriber and gross margin goals over a five-year performance period beginning in September 2022.
On November 5, 2024, the Committee approved an amendment (the “Amendment”) to the Retention Agreements to provide that in lieu of the final incremental cash bonus that Messrs. McRae and Busse, respectively, are eligible to be paid upon achievement of 5,000,000 cumulative paid subscribers (the “Final Cash Retention Bonus”), the Company would instead grant each of Messrs. McRae and Busse a performance-vesting restricted stock unit award (the “Substitute Awards”). The number of performance stock units subject to each Substitute Award will be determined by dividing the value of the Final Cash Retention Bonus ($2,000,000 and $200,000 for Messrs. McRae and Busse, respectively) by the 30-day trailing average price per share of the Company’s common stock calculated as of the grant date of the Substitute Awards, which shall be the first trading day following the release of earnings for the third quarter of 2024. The Substitute Awards will vest in full upon achievement of all of the following issuance conditions: (i) achievement by the Company of 5,000,000 cumulative paid subscribers on or before September 30, 2027; (ii) determination that the blended margins on such cumulative paid subscriber accounts equal or exceed the Required Margin (as defined in the Retention Agreements); (iii) achievement by the Company of at least $300,000,000 in annual recurring revenue on or before September 30, 2027; and (iv) continuous service by Messrs. McRae and Busse through the later of (a) October 1, 2025, and (b) the date on which the last of the issuance conditions described in the foregoing clauses (i), (ii) and (iii) above are achieved.
A copy of the form of Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K. The above summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1.
| Item 8.01 | Other Events. |
On November 7, 2024, the Company made available a presentation regarding its executive compensation program to be used in meetings with its investors and stockholders. The presentation is attached hereto as Exhibit 99.1 and incorporated by reference herein. A copy of the presentation will also be available on the Company’s investor website under the Events & Presentations section at investor.arlo.com.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit Number |
Description | |
| 10.1* | Form of Amendment to Retention Agreement | |
| 99.1 | Corporate Presentation, dated November 7, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * | Indicates management contract or compensatory plan or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARLO TECHNOLOGIES, INC. | ||
| By: | /s/ Kurtis Binder | |
| Name: | Kurtis Binder | |
| Title: | Chief Financial Officer and Chief Operating Officer |
Date: November 7, 2024