Underwriting Agreement
On August 2, 2018, Arlo entered into an Underwriting Agreement by and among Arlo and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Deutsche Bank Securities Inc., as representatives of the several underwriters named therein (the “Underwriting Agreement”), in connection with the initial public offering of up to 11,747,250 shares of Arlo Common Stock, which includes 1,532,250 shares of Arlo Common Stock allocated to the underwriters’30-day option to purchase additional shares of Arlo Common Stock, which was exercised in full on August 3, 2018. The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is attached hereto as Exhibit 1.1 and incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the Separation and the IPO, (a) effective as of the effectiveness of Arlo’s registration statement on Form8-A (the “Exchange Act Registration Statement”) on August 2, 2018, Ms. Jocelyn Carter-Miller and Messrs. Ralph E. Faison and Grady K. Summers were appointed to the board of directors of Arlo and (b) effective as of the completion of the IPO on August 7, 2018, Ms. Carter-Miller and Messrs. Faison and Summers resigned from the Board of Directors of NETGEAR.
In connection with the resignations of Ms. Carter-Miller and Messrs. Faison and Summers from the Board of Directors, NETGEAR decreased the size of its Board of Directors from ten to seven members.
In connection with the resignation of Mr. Summers, effective as of the completion of the IPO on August 7, 2018, Mr. Brad Maiorino was appointed as Chair of the Cybersecurity Committee of the Board of Directors, to serve in such capacity until the election and qualification of his respective successor or, if earlier, his death or resignation or removal from the Cybersecurity Committee.
In connection with the resignation of Ms. Carter-Miller, effective as of August 7, 2018, the Board of Directors determined that Ms. Julie A. Shimer, who also serves as the Company’s Lead Independent Director, meets the independence standards for service on the Audit Committee of the Board of Directors, and subject to her continuing to satisfy the requirements for service on the Audit Committee, Ms. Shimer was appointed as a member of the Audit Committee, to serve in such capacity until the election and qualification of her respective successor or, if earlier, her death or resignation or removal from the Audit Committee.
In connection with the Separation and the IPO, effective as of the completion of the IPO on August 7, 2018, Ms. Christine M. Gorjanc resigned as Chief Financial Officer of NETGEAR and was appointed as Chief Financial Officer of Arlo; and Patrick J. Collins III resigned as Senior Vice President of Smart Home Products of NETGEAR and was appointed as Senior Vice President of Product of Arlo.
In connection with the resignation of Ms. Gorjanc, effective as of August 7, 2018, Mr. Bryan Murray was appointed as Chief Financial Officer of NETGEAR. Mr. Murray has been with NETGEAR for over sixteen years, serving in various management roles within finance. Prior to assuming the role of Chief Financial Officer, he served as NETGEAR’s Vice President of Finance and Corporate Controller. Before joining NETGEAR in 2001, he worked in public accounting at Deloitte and Touche LLP. He holds a B.A. from the University of California, Santa Barbara and is licensed as a Certified Public Accountant.
In his role as Chief Financial Officer, Mr. Murray initially will receive an annual base salary of $366,000, subject to adjustment from time to time at the sole discretion of NETGEAR’s Board of Directors. He also will be eligible to receive an annual target bonus of up to 75% of his base salary, based on NETGEAR’s achievement of various financial and/or other goals established by the Board of Directors. In connection with Mr. Murray’s appointment, he was granted an option to purchase 30,000 shares of NETGEAR common stock. The shares subject to this option will vest over a four-year period, with 25% of the shares vesting after one year and the remainder vesting in equal monthly installments over the succeeding three years.
Mr. Murray also is expected to enter into NETGEAR’s standard executive officer indemnification agreement as well as a change in control and severance agreement. Under the terms of the change in control and severance agreement, upon a termination without cause or resignation with good reason, Mr. Murray would be entitled to (1) cash severance equal to his annual base salary, (2) 12 months of health benefits continuation and (3) accelerated vesting of any unvested equity awards that would have vested during the 12 months following the termination date. Upon a termination without cause or resignation with good reason that occurs during the one month prior to or 12 months following a change in control of NETGEAR, Mr. Murray would be entitled to (1) cash severance equal to the sum of his annual base salary and his target annual bonus, (2) 12 months of health benefits continuation and (3) accelerated vesting of all outstanding, unvested equity awards. Severance would be conditioned upon the execution and non-revocation of a release of claims.
Item 7.01 Regulation FD.
In connection with the closing of the IPO, on August 7, 2018, NETGEAR and Arlo issued a joint press release announcing the closing of the IPO. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
