UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 14, 2016
Alarm.com Holdings, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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001-37461
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26-4247032
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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8281 Greensboro Drive
Tysons, Virginia
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22102
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (877) 389-4033
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
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Officers; Compensatory Arrangements of Certain Officers.
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On November 14, 2016, Alarm.com Holdings, Inc. (the “Company”) announced that Steve Valenzuela would be joining the Company as its Chief Financial Officer, effective November 15, 2016. At a meeting of the Board of Directors (the “Board”) of the Company held on November 8, 2016, the Board appointed Mr. Valenzuela as the Company’s Chief Financial Officer and as the Company’s principal financial officer for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), both appointments to become effective November 15, 2016.
Mr. Valenzuela, age 59, most recently served as the Chief Financial Officer of SugarCRM, a customer relationship management software company, from January 2015 to November 2016. From October 2013 to December 2014, Mr. Valenzuela served as the Chief Financial Officer of Apigee Corporation, a software provider for the management of API’s and internet of things. Prior to this, Mr. Valenzuela was the Chief Financial Officer of Zenprise, a mobile device management software company, from April 2011 to December 2012, and then as a result of Citrix’s acquisition of Zenprise in January 2013, as the Vice President of Finance and Operations for the Mobile Platforms Group of Citrix from January 2013 to October 2013. Mr. Valenzuela holds a B.S. degree in accounting from San Jose State University and an M.B.A. from Santa Clara University.
In connection with his appointment, the Company entered into an offer letter (the “Offer Letter”) with Mr. Valenzuela. Under the Offer Letter, Mr. Valenzuela will receive an initial annual base salary of $335,000. He will be entitled to the same benefits as the other executives of the Company, except that he is also eligible to receive up to $50,000 in relocation assistance.
In lieu of participation in the Alarm.com Holdings Inc. 2016 Executive Bonus Plan and pro-rated eligibility for a fiscal 2016 bonus thereunder, he will receive a cash signing bonus of $75,000. After fiscal 2016, pursuant to the terms of the Offer Letter, Mr. Valenzuela is eligible for an annual bonus payment of up to $167,500 upon the Company’s achievement of certain goals which are generally set by the Compensation Committee, with input from the Chief Executive Officer, in the first quarter of each year for such fiscal year.
In connection with his appointment and pursuant to the terms of the Offer Letter, the Compensation Committee approved the grant to Mr. Valenzuela of an option to purchase up to 65,000 shares of the Company’s common stock, effective November 15, 2016, with an exercise price equal to the closing price of the Company’s common stock on the Nasdaq Global Select Market on that date. Twenty percent (20%) of the shares subject to the option will vest after one year, and the remainder of the shares will vest in equal monthly installments over the next 48 months, subject to Mr. Valenzuela’s continuous service with the Company through each vesting date. In addition, pursuant to the terms of the Offer Letter, the Compensation Committee approved the grant to Mr. Valenzuela of a restricted stock unit award (the “RSU Award”) for a number of shares of the Company’s common stock equal to $1,000,000 divided by the closing price of the Company’s common stock on November 15, 2016 (rounded down to the nearest whole share). Forty percent (40%) of the shares subject to the RSU Award shall vest on each of the second and fourth anniversary of the RSU Award grant date, and the final twenty percent (20%) shall vest on the fifth anniversary of the RSU Award grant date.
In the event of a Change in Control (as defined in the Company’s 2015 Equity Incentive Plan), the unvested shares subject to the option grant and the RSU Award would fully vest upon the occurrence of certain events as more fully described in the Offer Letter.
Additionally, under the terms of the Offer Letter, within three months of Mr. Valenzuela’s first and second anniversary of employment with the Company, subject to his continuous service and subject to Compensation Committee approval at such time, Mr. Valenzuela will be awarded a restricted stock unit award for a number of shares of the Company’s common stock equal to $250,000 divided by the closing price of the Company’s common stock on the applicable restricted stock unit award grant date (rounded down to the nearest whole share).
If Mr. Valenzuela’s employment is terminated by the Company without cause, then he will be entitled to receive continuing payments of his then-current salary for a period of four months, as well as payment of the health insurance premiums for continued coverage under COBRA for a period of six months.
The foregoing description of the Offer Letter is qualified in its entirety by reference to the full text of the Offer Letter, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated by reference herein.
The Company anticipates that Mr. Valenzuela will enter into the Company’s standard form of indemnification agreement and standard form of invention assignment and restrictive covenants agreement, which contains provisions governing the nondisclosure of confidential information of the Company, provisions requiring the assignment of certain intellectual property rights to the Company, as well as non-competition and non-solicitation restrictive covenants. Mr. Valenzuela was not appointed to serve as Chief Financial Officer or principal financial officer pursuant to any arrangements or understandings with the Company (other than the Offer Letter) or with any other person, and there are no related party transactions between Mr. Valenzuela and the Company that would require disclosure under Item 404(a) of Regulation S-K.
Item 7.01
Regulation FD Disclosure.
On November 14, 2016, the Company issued a press release announcing the appointment of Steve Valenzuela as the Company’s Chief Financial Officer and principal financial officer. A copy of the Company’s press release is furnished with this Form 8-K and attached hereto as Exhibit 99.1.
The information in this item, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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10.1
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Offer Letter by and between the Company and Steve Valenzuela.
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99.1
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Press Release dated November 14, 2016.
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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.
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Alarm.com Holdings, Inc.
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Dated: November 14, 2016
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By:
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/s/ Stephen Trundle
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Stephen Trundle
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President and Chief Executive Officer
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INDEX TO EXHIBITS
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Exhibit No.
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Description
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10.1
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Offer Letter by and between the Company and Steve Valenzuela.
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99.1
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Press Release dated November 14, 2016.
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October 12, 2016
Steve Valenzuela
Delivered via email
Dear Steve,
Alarm.com is pleased to offer you the position of Chief Financial Officer working out of our Tysons Corner, VA office and reporting to Stephen Trundle, President & CEO. Your start date is tentatively set for Monday, November 14, 2016 and will be finalized upon satisfactory completion of our pre-employment background screening. This offer will expire on Friday, October 14, 2016 if not accepted.
Your compensation and incentives will be as follows.
Base Compensation
Your base compensation will be a semi-monthly salary of $13,958.33, which, when annualized, is $335,000, less applicable deductions and withholdings. This salary is compensation for all hours worked in the pay period. As an exempt employee, you will not be eligible for overtime pay. Payroll is processed on a semi-monthly basis.
Incentive Compensation
You will also be eligible for an annual discretionary cash bonus of up to $167,500, less applicable deductions and withholdings. When awarded, cash incentive compensation bonuses are generally based on your performance measured against Alarm.com corporate performance criteria determined by the Compensation Committee, the performance of your department, and a qualitative assessment of performance completed by the CEO with feedback from the Board of Directors. Any such bonus will be paid annually.
Following the start of your employment, Alarm.com will provide you a sign on bonus payment of $75,000. This payment will be made within your first two paychecks and will be in lieu of pro-rated bonus eligibility for time worked during 2016.
Relocation Assistance
In order to offset your relocation to the Washington DC area, Alarm.com agrees to reimburse you up to $50,000 of the combination of a) IRS allowable relocation reimbursements and b) non IRS allowed (taxable) relocation costs to be grossed up. You must complete the relocation by July 17, 2017 and request for payment must be made within 60 days following the relocation with accompanying receipts/documentation.
To assist with your local start date in advance of relocation, Alarm.com agrees to cover flights as well as corporate housing/long term stay accommodations between your start date of employment and through the date of your relocation, to not extend beyond July 17, 2017.
Equity Compensation
Subject to approval by our Board of Directors, you will be awarded 65,000 stock options under Alarm.com’s 2015 Equity Incentive Plan. Options will vest over 5 years with 20% vesting on the first anniversary date of the grant and monthly thereafter.
Subject to approval by our Board of Directors, you will also be awarded Restricted Stock Units (RSUs) equivalent to $1M in value as of the award date. Additionally, within 3 months of your 1
st
and 2
nd
year employment anniversary dates you will also be awarded, subject to Board approval, Restricted Stock Units (RSUs) equivalent to $250,000 in
value as of the award date. Vesting on such RSUs will be over 5 years such that 40% vests at the 2nd anniversary date of the grant, an additional 40% vests at the 4
th
anniversary of the grant and the remaining 20% vests at the 5
th
anniversary date.
As the Company’s CFO, your options and RSUs will be eligible for accelerated vesting on a Change in Control event (as defined in the 2015 Equity Incentive Plan). In the event of a Change in Control, the unvested shares subject to your outstanding options and RSUs will fully vest upon the earlier of: (1) if the acquirer seeks your help during a transition period, and such transition period does not exceed 12 months after the closing of the Change of Control transaction, then on the last day of the transition period or if the acquirer does not seek such a transition period, upon the closing of such Change in Control transaction (2) twelve months following the closing
of the Change in Control transaction (3) the date of your involuntary termination by the acquirer (4) after closing of the Change of Control transaction when an acquirer requires relocation more than 35 miles from the current work location and you choose not to relocate or (5) upon a Change of Control, when the acquirer reduces your cash compensation package from compensation in force at time of closing of the Change in Control transaction. If you are requested to stay by the acquirer for a transitional period not to exceed twelve months following the Change in Control transaction, and you choose not to stay for some or all of the requested period, then there will be no acceleration. Aside from these benefits upon a Change in Control, Alarm.com does not require or provide management contracts.
Severance Agreement
If employment is terminated involuntarily, except for cause, Alarm.com agrees to pay 4 months’ severance pay and 6 months’ COBRA equivalent.
Benefits
Alarm.com offers a comprehensive benefits package, including health, disability, life insurance, and a 401k Plan that includes corporate matching contributions up to $3,000 per year. You and your eligible dependents may participate in a full range of benefits in accordance with Alarm.com’s current eligibility requirements. It will be necessary for you to make benefit elections within 30 days of your hire date with Alarm.com. Employee benefits are subject to change at the sole discretion of Alarm.com.
This offer is contingent on your submission of satisfactory proof of your eligibility to work in the United States. In addition, as a condition of your employment, you are required to sign the attached Restrictive Covenants Agreement.
This offer is contingent upon satisfactory completion of a pre-employment background screening. This background screening may include a social security number confirmation; verification of previous employment; verification of education; a credit check; and a criminal background investigation. All information related to these items should have been disclosed on your application. If the results of the pre-employment background check are not satisfactory, or it is found that you falsified or did not disclose relevant information on your application, Alarm.com reserves the right to withdraw this offer or terminate your employment.
Your employment with Alarm.com is at-will, meaning that you or the employer may terminate the employment at any time for any reason not prohibited by law with or without prior notice. This may occur before any particular equity grant vests or any particular compensation becomes due to you. After any termination you will not be entitled to any further equity award grants or vesting, compensation or other benefits, except as indicated for a change of control event, and except as required by law or confirmed in writing at the time of your departure. Nothing in the offer is intended to create a contract for employment or guarantee of continued employment with Alarm.com. This at-will relationship may not be modified except by individual written agreement signed by you and an authorized officer of Alarm.com. Alarm.com reserves the right to change the terms and conditions of your employment at any time for any reason not prohibited by law, with or without prior notice to you.
By signing this letter, you warrant that you will not disclose any trade secrets or confidential information of any prior employer, that you are under no contractual or other legal restriction that would prevent you from accepting this offer, and that you will not, in the course and scope of your Alarm.com employment, violate any previous agreement with any other employer, including, but not limited to, non-compete or non-solicit agreements. By accepting this offer, you also agree to adhere to Alarm.com’s policies and procedures, including those contained in the Alarm.com employee handbook.
This letter, together with the Restrictive Covenants Agreement referenced above, constitutes the full terms and conditions of your employment with Alarm.com. It supersedes any other oral or written statements that may have been made to you.
It is intended that all of the benefits and payments payable under this letter satisfy, to the greatest extent possible, an exemption from Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and this letter
will be construed to the greatest extent possible as consistent with those exemptions, and to the extent not so exempt, this letter will be construed to the greatest extent possible in a manner that complies with Section 409A.
If you agree to accept this offer, please sign and date this letter as well as the Restrictive Covenants Agreement. Return all pages to Victoria Schillinger, VP of Human Resources at HR@alarm.com prior to the offer expiration date so that we can begin making arrangements for your arrival. If you have any questions, please do not hesitate to contact Victoria Schillinger. We look forward to the contribution that you can make to our team.
Sincerely,
/s/Stephen S. Trundle
Stephen S. Trundle
President & CEO, Alarm.com
ACCEPTED:
/s/Steve Valenzuela
DATE:
Oct. 12, 2016
Print Name:
Steve Valenzuela
Alarm.com Names Steve Valenzuela as New Chief Financial Officer
Tysons, VA, November 14, 2016
-- Alarm.com (Nasdaq: ALRM), the leading platform for the connected home and business, today announced that Steve Valenzuela has been named Chief Financial Officer (CFO), effective November 15, 2016. He will be responsible for leading the company’s Finance organization including financial planning and analysis, accounting, tax, treasury and investor relations. Mr. Valenzuela will report to Alarm.com’s President and Chief Executive Officer, Steve Trundle.
“I’m very pleased to welcome Steve to the Alarm.com management team,” said Mr. Trundle. “He will bring a wealth of experience in the software industry that includes extensive experience in M&A and international operations, and will add depth to our already strong Finance team.”
Mr. Valenzuela joins Alarm.com from SugarCRM, where he served as CFO since January of 2015, bringing decades of executive experience with technology companies ranging from fast-growing start-ups to publicly-traded, multi-billion dollar enterprises. He has served as CFO of five different software enterprises including Apigee Corporation and served as the Vice President of Finance and Operations for the Mobile Platforms Group at Citrix following its acquisition of Zenprise, where he was CFO. Earlier in his career Mr. Valenzuela held financial management positions with Tandem Computers, Atari and Intel. Mr. Valenzuela holds an MBA from Santa Clara University, and a B.S. degree in Accounting from San Jose State University.
“I’m excited to join the strong management team at Alarm.com,” said Mr. Valenzuela. “They have built a great business that is well positioned to capture emerging opportunities in dynamic markets. I look forward to contributing to Alarm.com’s continued growth and offering my leadership and financial expertise.”
About Alarm.com
Holdings, Inc.
Alarm.com is the leading platform solution for the connected home and business. Millions of people depend on Alarm.com's technology to monitor and control their property from anywhere. Centered on security and remote monitoring, our platform addresses a wide range of market needs and enables application-based control for a growing variety of Internet of Things (IoT) devices. Our security, video monitoring, intelligent automation and energy management solutions are available through our network of thousands of professional service providers in North America and around the globe. Alarm.com's common stock is traded on the Nasdaq under the ticker symbol ALRM. For more information, please visit www.alarm.com.
CONTACT:
Investor Relations:
Jonathan Schaffer
The Blueshirt Group
ir@alarm.com
Media Relations:
Matthew Zartman
Alarm.com
mzartman@alarm.com