DEF 14A of SmartRent, Inc., Apr 3, 2024

DEF 14A of SmartRent, Inc.

Filed Apr 3, 2024 · FY20230000950170-24-040672

Open on EDGAR

  1. Election of Directors

    Election of Directors Our Board currently consists of seven members, but the size of the Board will decrease to six members upon the completion of the Annual Meeting. The Board is divided into three staggered classes of directors. At the Annual Meeting, two Class III directors will be elected for a three-year term to succeed the Class III directors whose terms are then expiring. Each director’s term continues until the election and qualification of their successor, or such director’s earlier death, resignation, or removal. Our nominating and corporate governance committee has recommended, and the Board has approved, John Dorman and Lucas Haldeman as nominees for election as Class III directors at the Annual Meeting. Ms. Beard will continue to serve as a director until her term expires at the Annual Meeting, but she is not standing for re-election. If elected, Messrs. Dorman and Haldeman will serve as Class III directors for a three-year term expiring at the annual meeting of stockholders to be held in 2027 and until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation, or removal. John Dorman and Lucas Haldeman have agreed to stand for election as Class III directors, and we have no reason to believe that any nominee will be unable to serve if elected. Should any director nominee become unavailable for election as a result of an unexpected occurrence, your proxy authorizes the persons named as proxies to vote for a substitute nominee if our Board so chooses, or our Board may reduce its size. The terms of office of the directors in Class I and Class II will not expire until the annual meeting of stockholders to be held in 2025 and 2026, respectively. The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

  2. Nominees for Election Until the Annual Meeting of Stockholders to be Held in 2027

    Nominees for Election Until the Annual Meeting of Stockholders to be Held in 2027 Our Board recommends a vote FOR each of the Class III director nominees to elect them to our Board. John Dorman, age 73, has served as a member of our Board since August 2021. Mr. Dorman has served as the Chairman of the board of directors of DeepDyve, Inc., a privately held technology platform for scientific and scholarly research since 2007, and also serves on the board of directors for Target Hospitality (Nasdaq: TH), a provider of full-service modular housing solutions for corporate workforce and government-funded humanitarian applications. Mr. Dorman also serves on the board of directors of Landgate, Inc., a privately held information platform and marketplace connecting property owners with renewable energy developers. Mr. Dorman will serve as a board director of LoanDepot, Inc. (NYSE: LDI), a national non-bank lender serving consumers, until the end of his term in June 2024. Additionally, from 2012 to 2021, Mr. Dorman served on the board of directors of CoreLogic, Inc. (NYSE: CLGX). Prior to this appointment, from 2010 to 2013, he was Chairman of the board of directors of Online Resources Corporation (Nasdaq: ORCC) when it was acquired by ACI Worldwide. Previously, Mr. Dorman served as a director and, from 1998 to 2003, as Chairman and Chief Executive Officer of Digital Insight Corporation (Nasdaq: DGIN), a provider of software as a service for online banking and bill payment for financial institutions. Prior to that, he was Senior Vice President and General Manager of the Global Financial Services Division of Oracle Corporation. Earlier in his career, Mr. Dorman was Chairman and Chief Executive Officer of Treasury Services Corporation, a provider of enterprise modeling and financial analysis software for global financial institutions that was acquired by Oracle in 1997. Mr. Dorman holds a Bachelor of Arts degree in Business Administration and Philosophy from Occidental College and a Master of Business Administration in Finance from the USC Marshall School of Business. We believe his strategic perspective in the financial innovation space, financial expertise, and board experience makes Mr. Dorman well qualified to serve as a member of our Board. Lucas Haldeman, age 46, the Chief Executive Officer and founder of SmartRent, has served as a member of our Board since August 2021. Mr. Haldeman has spent the last two decades innovating and developing property management technology for the real estate industry. Prior to founding SmartRent in 2017, he served as the Chief Technology and Marketing Officer of Colony Starwood Homes (formerly NYSE: SFR and now part of Invitation Homes Inc. (NYSE: INVH)) from 2013 through 2016. Previously, he served as the Chief Information and Marketing Officer for Beazer Pre-Owned Rental Homes from 2012 through 2013 and was the founder and managing partner of Nexus Property Management, Inc. from 2006 through 2012. Mr. Haldeman received a Bachelor of Special Studies degree in economics and business, English, and computer science from Cornell College. We believe that Mr. Haldeman’s in-depth multifamily knowledge and significant experience innovating and developing property management technology for the real estate industry makes him well qualified to serve as a member of our Board.

  3. Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders Ann Sperling, age 68, has served as a member of our Board since August 2021. Ms. Sperling has over four decades of real estate and management experience, including roles in commercial real estate investment and development, and leadership roles in public real estate companies. Prior to her recent retirement, from 2013 to 2023, Ms. Sperling was Senior Director at Trammell Crow Company, the development and investment firm which is a subsidiary of CBRE. Earlier in her career Ms. Sperling spent twenty-five years at Trammell Crow Company prior to its merger with CBRE, culminating as Senior Managing Director and Area Director in the Rocky Mountain Region. Prior to her last role at Trammell Crow, she was at Jones Lang LaSalle, the public real estate investment and services firm, first as Chief Operating Officer, Americas, and then as President, Markets West. Prior to that, Ms. Sperling was Managing Director of Catellus, then a mixed-use development and investment subsidiary of the public REIT, ProLogis. Ms. Sperling serves on the Advisory Board of the nonprofit Gates Institute for Regenerative Medicine and is a Board Advisor to Anderson Holdings, a privately held company with diversified holdings including substantial commercial real estate. Ms. Sperling also serves on the board of directors for Apartment Income REIT (NYSE: AIRC). Previously, she served on the board of directors of the Apartment Investment and Management Company (NYSE: AIV), prior to its spinout of Apartment Income REIT. She holds a Bachelor of Science degree in biology and psychology from Tufts University and a Master of Business Administration from Harvard Business School. We believe that Ms. Sperling’s extensive real estate investment and development operations, marketing, and finance experience makes her well qualified to serve as a member of our Board. Frederick Tuomi, age 69, a private real estate investor, has served as a member of our Board since August 2021. Mr. Tuomi served as President, Chief Executive Officer, and director of Invitation Homes Inc. (NYSE: INVH), a national single-family rental company, from 2017 until his retirement in 2019. Prior to its merger with Invitation Homes, Mr. Tuomi served as Chief Executive Officer and director of Starwood Waypoint Homes from 2016 until 2017. Prior to its merger with Starwood Waypoint Homes, he served as Co-President and Chief Operating Officer of Colony American Homes, Inc. from 2013 until 2016. Mr. Tuomi was Executive Vice President and President-Property Management for Equity Residential (NYSE: EQR), a multifamily REIT, from 1994 to 2013. He currently serves as a Venture Partner Consultant with Real Estate Technology Ventures and is a member of the boards of directors of the privately held companies Lessen, Inc., a tech-enabled property services provider; VBC, a modular building company; UltraClean Express, a car wash aggregator; and AvantStay, a vacation rental management firm. Mr. Tuomi is an Affiliate Partner with Lindsay Goldberg LLC, a private equity firm. Throughout his career, he has served on numerous multifamily and single-family rental industry boards and executive committees, including the National Rental Home Council, National Multi-Housing Council, California Housing Council, California Apartment Association, Atlanta Apartment Association, and the USC Lusk Center for Real Estate. Mr. Tuomi also previously served as a member of the board of directors of Tejon Ranch Co. (NYSE: TRC), a diversified real estate development and agribusiness company. He received his Bachelor of Arts degree in Information Systems and Master of Business Administration from Georgia State University. We believe that Mr. Tuomi’s extensive real estate and technology background, and understanding of both the multi-family housing and rental market, make him well qualified to serve as a member of our Board.

  4. Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders Bruce Strohm, age 69, a private real estate investor, has served as a member of our Board since August 2021. From June 2019 to December 2020. Mr. Strohm served as Chief Legal Officer of Equity International, a private equity company focused on investing in real estate outside the United States. He previously served as the Executive Vice President, General Counsel and Corporate Secretary of Equity Residential (NYSE: EQR), a multifamily REIT, from January 1995 until January 2018. Mr. Strohm worked closely with the chief executive officer and chief financial officer on capital markets activities and shareholder relations. Mr. Strohm earned a Bachelor of Science degree in accounting from the University of Illinois and a Juris Doctor degree from Northwestern University Law School. We believe Mr. Strohm’s extensive legal, real estate, public company, and financial experience makes him well qualified to serve as a member of our Board. Alison Dean, age 59, was appointed as a member of our Board in March 2024. Ms. Dean has over three decades of experience in high tech overseeing corporate finance and financial planning, as well as information technology, supply chain operations, acquisitions, and investor relations. From April 2005 until her retirement in May 2020, Ms. Dean held executive positions at iRobot Corporation (Nasdaq: IRBT), a global consumer robot company, most recently as Executive Vice President, Chief Financial Officer. From 2013 to 2020, she was the Treasurer and Principal Accounting Officer at iRobot. Prior to that, she held several financial positions at 3Com Corporation (Nasdaq: COMS), a digital electronics manufacturer, from 1995 to 2005, including vice president and corporate controller (2004 to 2005) and vice president of finance, worldwide sales (2003 to 2004). Ms. Dean has served on the board of directors of Yeti Holding, Inc. (NYSE: YETI) a global retailer of outdoor products, since October 2020 and Everbridge, Inc. (Nasdaq: EVBG), a global software company that provides critical event management and enterprise safety applications, since July 2018. Ms. Dean has also served as a board member for Salsify, a privately held commerce management software company, since September 2021. Ms. Dean holds a Bachelor of Arts degree in Business Economics from Brown University and a Master of Business Administration from Boston University. We believe Ms. Dean’s extensive background in finance, technology, and operations qualifies her to serve on our Board.

  5. Non-Employee Director Compensation

    Non-Employee Director Compensation We compensate our non-employee directors with a combination of cash and equity in the form of restricted stock units (“RSUs”). Lucas Haldeman, our Chief Executive Officer, also serves as a director and we compensate Mr. Haldeman solely for serving as our Chief Executive Officer - see “Executive Compensation” below - and do not provide additional compensation for his service as a director. Our Board adopted a non-employee director compensation policy that is designed to enable us to attract and retain highly qualified non-employee directors. Specifically, we provide annual cash payments, payable quarterly in arrears, to each director who is not an employee of ours, with additional amounts for service as Lead Independent Director and chairpersons or members of our audit, compensation, and nominating and corporate governance committees, as set forth below:

  6. Non-Employee Director Compensation

    | Cash(1) | Annual Amount ($) | | Board member fee | 80,000 | | Lead Independent Director fee | 20,000 | | Committee chair fee(2) | | | Audit Committee | 20,000 | | Compensation Committee | 15,000 | | Nominating and Corporate Governance Committee | 10,000 | | Committee member fee(2) | | | Audit Committee | 10,000 | | Compensation Committee | 7,500 | | Nominating and Corporate Governance Committee | 5,000 |

  7. Non-Employee Director Compensation

    (1) Amounts reflected are annual amounts; payments are made on a quarterly basis. (2) Each committee chair receives only the fee due to him or her for his service as chair on such committee and does not receive an additional fee as a member of such committee. In addition to cash compensation, our non-employee director compensation policy provides for the grant of annual equity awards in the form of RSUs to our non-employee directors as follows:

  8. Non-Employee Director Compensation

    | Equity(1) | Grant Date Fair Value ($) | | Annual restricted stock unit grant(2) | 150,000 |

  9. Non-Employee Director Compensation

    (1) Each equity award has a grant date fair value as shown in the table (subject to minor variations due to the rounding of any fractional share). (2) Each annual restricted stock unit award is scheduled to vest as to 100% of such award on the earlier of (a) the date immediately preceding the date of the next annual stockholder meeting following the grant or (b) one year from the grant date, subject to the director’s continued service through such vesting date. The following table provides information for all compensation awarded to, earned by, or paid to each person who served as a non-employee director in the fiscal year ending December 31, 2023. Mr. Haldeman is not included in the table below because he did not receive additional compensation for his service as a director. The compensation received by Mr. Haldeman as an employee for the fiscal year ending December 31, 2023, is shown below in “Executive Compensation-Summary Compensation Table.”

  10. Non-Employee Director Compensation

    | Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Total ($) | | Ann Sperling | 95,000 | 150,000 | 245,000 | | Frederick Tuomi | 111,250 | 150,000 | 261,250 | | Robert Best(3) | 91,250 | 150,000 | 241,250 | | Bruce Strohm | 100,000 | 150,000 | 250,000 | | Alana Beard | 87,500 | 150,000 | 237,500 | | John Dorman | 106,875 | 150,000 | 256,875 | | Alison Dean(4) | ― | ― | ― |

  11. Non-Employee Director Compensation

    (1) Amounts shown in this column reflect the total cash retainer earned by each director for board and committee service during 2023. (2) Amounts shown in this column do not reflect dollar amounts actually received by our non-employee directors. Instead, these amounts reflect the aggregate grant date fair value of each equity award granted in 2023, computed in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Assumptions used in the calculation of these amounts are included in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. (3) Mr. Best resigned from the Board effective January 15, 2024. (4) Ms. Dean was appointed to the Board on March 21, 2024. The following table lists all outstanding equity awards held by our non-employee directors as of December 31, 2023:

  12. Non-Employee Director Compensation

    | Name | Number of Shares Subject to Outstanding Stock Options | Number of Shares Subject to Outstanding Restricted Stock Units | | Ann Sperling | | 48,553 | | Frederick Tuomi | 187,057 | 48,553 | | Robert Best(1) | | 48,553 | | Bruce Strohm | | 48,553 | | Alana Beard | | 48,553 | | John Dorman | | 48,553 |

  13. Non-Employee Director Compensation

    (1) Mr. Best resigned from the Board effective January 15, 2024. Upon such resignation, the restricted stock units shown in the table above, all of which were unvested as of such resignation date, were forfeited by him. We currently reimburse our directors for their reasonable out-of-pocket expenses in connection with attending meetings of our Board and committees.

  14. Approval of the SmartRent, Inc. 2021 Equity Incentive Plan, as Amended and Restated, to Increase the Shares Reserved for Issuance Thereunder

    Approval of the SmartRent, Inc. 2021 Equity Incentive Plan, as Amended and Restated, to Increase the Shares Reserved for Issuance Thereunder

  15. Overview

    Overview We are requesting that stockholders approve the SmartRent, Inc. 2021 Equity Incentive Plan (the “Plan”) as amended and restated, which increases the number of shares of our Class A common stock (“Shares”) that may be issued under the Plan by 8,900,000 shares (the “Share Increase”). Upon recommendation of the compensation committee, the Board approved the amended and restated Plan on March 19, 2024, subject to the approval of our stockholders at the Annual Meeting. The amended and restated Plan, if approved by stockholders, will allow the Company to continue to provide equity awards as part of the Company’s compensation program, which is a critical tool for motivating, attracting, and retaining talented employees and for providing incentives that promote the success of the Company’s business and increased stockholder value. The Board and compensation committee believe that equity awards motivate high levels of performance, more closely align the interests of employees with those of stockholders by giving employees an opportunity to hold an ownership stake in the Company and provide an effective means of recognizing employee contributions toward the Company’s success. The Plan initially was approved by the Board on May 12, 2021, and was approved by our stockholders on August 23, 2021. The Plan became effective as of August 24, 2021, upon the completion of the Business Combination. The Plan, as amended and restated, has not been amended in any material way since it initially was approved by our stockholders, other than to increase the number of Shares that may be issued under the Plan. As of February 29, 2024, there were 4,474,616 Shares remaining available for issuance under the Plan. If the proposed amendment and restatement of the Plan is not approved by our stockholders, the Plan will remain in effect without being amended by the Share Increase and awards will continue to be made under the Plan to the extent Shares remain available. However, in that case, we may not be able to continue our equity incentive program in the future or it may be severely limited. This could preclude us from successfully attracting and retaining highly skilled employees. The Board and compensation committee believe that that the Share Increase will enable us to continue to use the Plan to achieve our recruiting, retention, and incentive objectives and will be essential to our future success. The Company’s executive officers and directors have an interest in this proposal as they are eligible to receive an equity award under the Plan. Our Board unanimously recommends that stockholders vote FOR the approval of the Company’s 2021 Equity Incentive Plan, as amended and restated.

  16. Background of the Share Increase Under the Plan

    Background of the Share Increase Under the Plan If our stockholders approve the amended and restated Plan, we currently anticipate that the Shares will be sufficient to meet our expected needs through 2027. We currently anticipate that we will be requesting additional Shares under the Plan at our 2027 annual meeting of stockholders. Subject to adjustment upon changes in capitalization of the Company as provided under the Plan, the total number of Shares that will be reserved for issuance under the Plan, as amended and restated, will be equal to 24,400,000 Shares. In considering the number of Shares to be reserved for issuance under the amended and restated Plan, the Company took into account various factors, including the following: Attracting and Retaining Talent. We considered the importance of an appropriately sized pool of Shares to continue to be able to attract, retain, and engage highly skilled personnel. • Equity Compensation in a Competitive Labor Market. In the enterprise smart home solutions industry, there is significant competition for experienced individuals with the skills necessary to execute our strategy and drive our business. Our success depends in large part on such key employees. To succeed in a competitive market for talent, it is important to provide competitive compensation packages that include equity compensation sufficient to meet our recruiting, retention, and incentive objectives. • Historical Grant Practices. Under our equity incentive plans, in fiscal years 2021, 2022, and 2023, we granted stock options and restricted stock units covering 7,668,774, 2,220,533, and 6,015,986 Shares (excluding the grant of assumed awards in the Business Combination in 2021 and any purchase rights under our 2021 Employee Stock Purchase Plan), respectively, for a total of 15,905,293 Shares over such three-year period. Forecasted Grant Practices. We anticipate that the Shares reserved under the Plan, as amended and restated, based on currently projected Share use, will be sufficient for the granting of equity awards thereunder for approximately the next three years. As a result, we currently anticipate that we will be requesting additional Shares thereunder at our 2027 Annual Meeting. Despite the projected Share use described above, future circumstances and business needs, such as higher than expected headcount increases, including officers and other key employees to support growth in our business development or merger and acquisition activity, may result in significantly higher or lower Share use than currently projected. Overhang. As of February 29, 2024, our total overhang is 15.3%. For this purpose, we calculated total overhang as (x) the sum of (i) 11,679,675 Shares subject to outstanding options under the Plan and our 2018 Stock Plan (the “Prior Plan”), plus (ii) 6,103,348 Shares subject to outstanding and unvested restricted stock units under the Plan and Prior Plan, plus (iii) 4,474,616 Shares available for future issuance under the Plan, plus (iv) 8,900,000 additional Shares requested pursuant to this proposal, with such sum divided by 203,868,714, which is the total number of outstanding Shares of our Class A Common Stock as of February 29, 2024. Our issued overhang is 8.7%. For this purpose, we calculated issued overhang as (x) the sum of (i) 11,679,675 Shares subject to outstanding options under the Plan and Prior Plan, plus (ii) 6,103,348 Shares subject to outstanding and unvested restricted stock units under the Plan and Prior Plan, with such sum divided by 203,868,714, which is the total number of outstanding Shares of our Class A Common Stock as of February 29, 2024. Our Prior Plan previously terminated and, therefore, no additional equity awards have been granted under such plan since its termination or will be granted under such plan in the future. The following table shows, as of February 29, 2024, the number of Shares subject to outstanding options and restricted stock units granted under such plans, the weighted average exercise price of such options, and the weighted average remaining term of such options:

  17. Summary of the 2021 Equity Incentive Plan

    Summary of the 2021 Equity Incentive Plan This section summarizes certain principal features of the Plan. The summary is qualified in its entirety by reference to the complete text of the Plan, a copy of which is attached as Appendix A to this Proxy Statement. General. The purpose of the Plan is to advance our interests and the interests of our stockholders by providing an incentive to attract, retain, and reward employees and other service providers and by motivating them to contribute to our growth and profitability. These incentives are provided through the grant of stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, performance shares, performance units, other stock-based awards, and cash-based awards. Authorized Shares. Subject to the adjustment provisions in the Plan, and prior to the Share Increase, the maximum aggregate number of Shares authorized for issuance under the Plan is 15,500,000 Shares. Under the amended and restated Plan, our stockholders are being asked to approve a Share Increase of 8,900,000 Shares to the maximum aggregate number of Shares that may be issued under the Plan. Thus, if our stockholders approve the Plan, as amended and restated, then subject to the adjustment provisions in the Plan, the maximum aggregate number of Shares that may be issued under the Plan will equal 24,400,000 Shares. Such 24,400,000 Shares, subject to the adjustment provisions in the Plan, also will constitute the maximum number of Shares that may be issued under the amended and restated Plan for purposes of Shares issuable pursuant to the exercise of any incentive stock options granted under the Plan (which is also increased from 15,500,000 Shares). Shares issuable under the Plan will consist of authorized but unissued or reacquired shares of our Class A Common Stock or any combination thereof. As of February 29, 2024, a total of 9,221,564 Shares were subject to awards outstanding under the Plan and the number of Shares that were available for future issuance under the Plan was 4,474,616 Shares. Share Counting. If an award granted under the Plan expires or otherwise terminates or is cancelled without having been exercised or settled in full, or if Shares acquired under an award that are subject to forfeiture or repurchase are forfeited or repurchased by the Company for not more than the participant’s purchase price, the Shares allocable to the terminated portion of the award or such forfeited or repurchased Shares will again become available for issuance under the Plan. If the exercise price of a stock option is paid by tender to the Company, or attestation of ownership, of Shares owned by the participant or by means of a net exercise (referring generally to the Company’s reduction of Shares otherwise issuable to the participant upon exercise having a fair market value that covers the aggregate exercise price for the exercised Shares), then the number of Shares available for issuance under the Plan will be reduced by the net number of Shares for which the option is exercised. Upon payment in Shares pursuant to the exercise of stock appreciation rights, the number of Shares available for issuance under the Plan will be reduced only by the number of Shares actually issued in such payment. Shares will not be considered issued under the Plan and therefore will not reduce the number of Shares available for issuance to the extent an award is settled in cash or Shares are withheld or reacquired by the Company in satisfaction of tax withholding obligations. Adjustments for Capital Structure Changes. Appropriate and proportionate adjustments will be made in the number and kind of shares subject to the Plan and any outstanding awards, to the numerical limits on shares that may be issued pursuant to the exercise of incentive stock options granted under the Plan, and in the exercise or purchase price per share under any outstanding award, in order to prevent dilution or enlargement of participants’ rights under the Plan, in the event of any change in the Shares effected without receipt of consideration by the Company whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in our capital structure, or in the event of a dividend or distribution to our stockholders in a form other than Shares (excluding regular, periodic cash dividends) that has a material effect on the fair market value of our Shares, subject to any required action by the stockholders. In such circumstances, the Committee also has the discretion under the Plan to adjust other terms of outstanding awards to reflect, or related to, such changes in our capital structure or distributions as it deems appropriate. If a majority of the shares, that are of the same class as the shares subject to outstanding awards granted under the Plan, are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event, as defined in the Plan) shares of another corporation (the “Converted Shares”), the Committee (as defined below) may unilaterally amend the outstanding awards to provide that such awards are for Converted Shares. In the event of any such amendment, the number of shares subject to, and the exercise or purchase price per share of, such outstanding awards will be adjusted in a fair and equitable manner as determined by the Committee. Non-Employee Director Award Limits. The aggregate grant date fair value (computed as of the date of grant in accordance with U.S. generally accepted accounting principles) of all awards granted under the Plan as compensation for service as a non‑employee director, to a non‑employee director during any fiscal year of the Company, taken together with any cash compensation paid to such non‑employee director for service as a non‑employee director during such fiscal year, will not exceed $1,000,000. Administration. The Plan is administered by the compensation committee, although the Board retains the right to appoint such other committee or subcommittee of the Board to administer the Plan, with such powers as the Board may specify. The Board also may administer the Plan. For purposes of this summary of the Plan, the term “Committee” will refer to the compensation committee, the Board, or any such other duly appointed committee administering the Plan. The Committee may delegate to one or more of our officers the authority to grant awards to employees of the Company or any parent or subsidiary corporation or other affiliated entity of the Company, who are not officers, directors, or other person whose transactions in Shares are subject to Section 16 of the Exchange Act (“Insider Participants”), subject to applicable law, certain limitations contained in the Plan, and award guidelines established by the Committee. With respect to participation in the Plan by Insider Participants and while any Company securities are registered pursuant to Section 12 of the Exchange Act, the Plan will be administered in compliance with the requirements of Rule 16b‑3 of the Exchange Act.

  18. Summary of the 2021 Equity Incentive Plan

    Subject to the provisions of the Plan, the Committee determines in its discretion the persons to whom and the times at which awards are granted, the types and sizes of awards, the fair market value of Shares or other property and the terms and conditions of the awards granted under the Plan. The Committee, subject to certain limitations under the Plan, may amend, modify, extend, cancel, or renew any award, waive any restrictions or conditions applicable to any award or shares issued under the award, and accelerate, continue, extend, or defer the exercisability or vesting of any award or shares issued under the award. The Committee may permit or require the deferral of payment or settlement of an award, subject to the provisions of the Plan. The Committee has the power to make all other determinations and take such other actions with respect to the Plan or any award under the Plan as the Committee may deem advisable, to the extent not inconsistent with the Plan provisions or applicable law. The Committee will interpret the Plan and awards granted under it, and all determinations of the Committee generally will be final and binding on all persons having an interest in the Plan or any award under the Plan. Plan administration expenses are paid by the Company. The Plan additionally provides, subject to certain limitations, for indemnification by the Company generally of any director, officer or employee for certain expenses relating to administration of the Plan, which may include certain attorneys’ fees and amounts paid in a settlement or judgment in connection with the defense of any action, suit or proceeding relating to the Plan. All awards granted under the Plan will be evidenced by a written or electronic agreement between the Company and the participant, specifying the terms and conditions of the award, consistent with the requirements of the Plan. Prohibition of Option and SAR Repricing. The Plan expressly provides that, without the approval of our stockholders, the Committee will not approve a program providing for any of the following, with respect to options or stock appreciation rights with exercise prices per share greater than the fair market value of a Share (“Underwater Awards”): either the cancellation of such outstanding Underwater Awards in exchange for the grant of new options or stock appreciation rights at a lower exercise price or the amendment of such outstanding Underwater Awards to reduce the exercise price; the grant of new full value awards in exchange for the cancellation of such outstanding Underwater Awards; or the cancellation of such outstanding Underwater Awards in exchange for cash payments. Full value awards generally refers to awards granted under the Plan that are settled in Shares, excluding any options and stock appreciation rights, and restricted stock purchase rights or other stock-based awards for which the Company receives payment equal to the fair market value at grant of the shares subject to such award. Eligibility. Awards may be granted to employees and consultants of the Company or any parent or subsidiary corporation or other affiliated entity of the Company, and members of the Board. However, incentive stock options may be granted only to employees who, as of the time of grant, are employees of the Company or any parent or subsidiary corporation of the Company. As of March 31, 2024, there are approximately 141 such employees (including five executive officers of the Company), no such consultants, and six such non‑employee directors who would be eligible to participate in the Plan. Stock Options. The Plan permits the grant of options as nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Code, or any combination of these. The exercise price per share of an option may not be less than the fair market value of a Share on the date of grant, other than certain options granted in assumption or substitution for another option in connection with certain corporate transactions. However, any incentive stock option granted to a person who at the time of grant owns stock with more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company (a “10% Stockholder”) must have an exercise price per share equal to at least 110% of the fair market value of a Share on the date of grant. The Plan provides that the option exercise price may be paid in cash or in the Committee’s discretion and subject the terms of the Plan, by cashless exercise (generally referring to irrevocable instructions delivered to a broker to assign to the Company the proceeds of a disposition of shares being exercised under the award); net exercise (generally referring to the reduction of shares otherwise issuable upon option exercise having a fair market value that covers the aggregate exercise price of the exercised Shares); a tender to the Company, or attestation of ownership, of Shares owned by the participant having a fair market value covering the aggregate exercise price for the exercised Shares; such other lawful consideration as approved by the Committee; or any combination of these. The Committee determines the terms and conditions of options, including vesting and exercisability. The maximum term of any option granted under the Plan is ten years or such shorter period specified in the award agreement, and an incentive stock option granted to a 10% Stockholder must have a term not exceeding five years. Unless otherwise permitted by the Committee, any unvested option will terminate immediately upon the participant’s termination of service, and a vested option generally will remain exercisable for three months following the participant’s termination of service, provided that if service terminates as a result of the participant’s disability or death (or such death occurs within three months of service termination or such shorter or longer period that the Committee may specify), the option generally will remain exercisable for 12 months, but in any event the option must be exercised no later than its expiration date. If the exercise of an option is prevented due to certain conditions preventing the lawful issuance of Shares under the option, the option will remain exercisable until the later of 30 days after the date such exercise no longer will be so prevented, or the end of the option’s post-termination exercise period, but in any event no later than the option’s expiration date. Notwithstanding any Plan provision to the contrary, if a participant’s service is terminated for cause or if, following the participant’s termination and during the period the option otherwise would remain exercisable, the participant engages in any act that would constitute cause, the option will terminate immediately. Stock Appreciation Rights. The Plan permits the grant of stock appreciation rights either in tandem with an option (a “Tandem SAR”) or independently of any option (a “Freestanding SAR”). A Tandem SAR requires the option holder to elect between the exercise of the related option for Shares or the exercise of such Tandem SAR. A Tandem SAR is exercisable only at the time and only to the extent that the related option is exercisable, while a Freestanding SAR is exercisable at such times or upon such events and subject to the terms and conditions specified by the Committee. The exercise price per share of each stock appreciation right may not be less than the fair market value of a Share on the date of grant, other than certain stock appreciation rights granted in assumption or substitution for other stock appreciation rights, such as in connection with certain corporate transactions.

  19. Summary of the 2021 Equity Incentive Plan

    Upon the exercise of any stock appreciation right, the participant is entitled to receive an amount equal to the excess of the fair market value of the exercised Shares over the aggregate exercise price for such Shares. Payment upon exercise of a Tandem SAR may be made only in Shares, while payment upon exercise of a Freestanding SAR may be made in cash and/or Shares. A Tandem SAR will terminate no later than the date the related option expires or is terminated or cancelled. The maximum term of any Freestanding SAR is ten years. If, on the date on which an exercisable stock appreciation right would terminate or expire, the exercise of such stock appreciation right would result in payment to its holder, then such stock appreciation right automatically will be deemed exercised as of such date. The Company may elect to discontinue such deemed exercise at any time or to restrict such deemed exercise to certain groups of participants. The terms and conditions relating to the period of exercisability following termination of service with respect to options (as summarized further above) generally also apply to stock appreciation rights. Restricted Stock Awards. The Plan permits the grant of restricted stock awards either in the form of a restricted stock purchase right, giving a participant a right to purchase Shares, or in the form of a restricted stock bonus, pursuant to which Shares are granted to the participant, in consideration for services rendered by the participant. The Committee determines the purchase price payable under restricted stock purchase rights. A restricted stock purchase right will be exercisable for such period determined by the Committee, which will not exceed thirty (30) days from the award’s date of grant. Subject to the terms of the Plan, a participant may pay the purchase price under a restricted stock purchase right in cash, other consideration as the Committee approves and as permitted by applicable law, or in any combination of these methods. Restricted stock awards may (but need not) be subject to vesting conditions as the Committee specifies, which may include service and/or the attainment of one or more performance goals which may be those described below in connection with performance shares and performance units. Participants holding restricted stock generally will have the rights of a stockholder with respect to the Shares subject to the award, including the right to vote and receive any dividends and other distributions paid with respect to such Shares, except that such dividends or distributions will be subject to the same restrictions as the applicable Shares under the restricted stock award on which they were paid. Unless otherwise provided by the Committee, if a participant’s service terminates for any reason, the Company will have the ability to repurchase for the purchase price paid by the participant any shares acquired by the participant under a restricted stock purchase right that remain unvested and the participant will forfeit to the Company any then unvested shares under a restricted stock bonus. Restricted Stock Units. The Plan permits the grant of restricted stock units, or RSUs, which represent unfunded bookkeeping entries generally granting rights to receive Shares or, if determined by the Committee in the award agreement, in lieu thereof a cash payment equal to the fair market value thereof. No monetary payment is required for receipt of RSUs. The Committee may (but need not) require that the RSUs be subject to vesting, including based on service, or the attainment of one or more performance goals which may be those described below in connection with performance shares and performance units. Unless otherwise provided by the Committee, if a participant’s service terminates for any reason, the participant will forfeit any then unvested RSUs. Performance Shares and Performance Units. The Plan permits the grant of performance shares and performance units (“Performance Awards”), which generally consist of unfunded bookkeeping entries granting the right to receive payment upon attainment of applicable performance goals. Unless determined otherwise by the Committee, each performance share will have an initial value equal to the fair market value of a Share at grant, and each performance unit will have an initial value established by the Committee at grant. Performance Awards may be settled in cash, Shares, or a combination of both. The Committee will establish one or more performance goals applicable to a Performance Award and such other terms and conditions for determining the final value and any payout under the award. The Committee, in its discretion, will determine the performance goals under a Performance Award, which may include, but are not limited to: revenue; sales; expenses; operating income; gross margin; operating margin; earnings before any one or more of: stock-based compensation expense, interest, taxes, depreciation and amortization; pre-tax profit; pre-tax profit; net operating income; net income; economic value added; free cash flow; operating cash flow; balance of cash, cash equivalents and marketable securities; stock price; earnings per share; return on stockholder equity; return on capital; return on assets; return on investment; total stockholder return, employee satisfaction; employee retention; market share; customer satisfaction; product development; research and development expense; and completion of an identified special project and completion of a joint venture or other corporate transaction and personal performance objectives established for an individual participant or group of participants. To prevent the dilution or enlargement of a participant’s rights with respect to a Performance Award, the Committee may make certain appropriate adjustments (whether positive or negative) in the method of calculating any applicable performance measures for the applicable performance period. The Committee also may make adjustments to amounts payable under a Performance Award to reflect the participant’s individual job performance or other factors determined by the Committee. Following completion of the applicable performance period, the Committee will determine the extent to which the applicable performance goals have been attained during the performance period and the resulting value to be paid to the participant. Unless otherwise provided by the Committee, if a participant’s service terminates due to the participant’s death or disability prior to completion of the applicable performance period, the final award value will be determined on the basis of the performance goals attained during the entire performance period but will be prorated for the number of months of the participant’s service during the performance period. Unless otherwise provided by the Committee, if a participant’s service terminates before completion of the performance period, the Performance Award will be forfeited. Cash-Based Awards and Other Stock-Based Awards. The Plan permits the grant of cash-based awards or other stock-based awards in such amounts and subject to such terms and conditions as the Committee determines. Cash-based awards will specify a monetary payment or range of payments, while other stock-based awards will be denominated in Shares, may be expressed in terms of Shares or units based on Shares, or may provide for the transfer of Shares or payment in cash or otherwise of amounts based on the value of Shares.

  20. Summary of the 2021 Equity Incentive Plan

    Such awards may be subject to vesting conditions based on continued performance of service or subject to the attainment of one or more performance goals, including goals similar to those described above in connection with Performance Awards. Settlement of awards may be in cash, Shares or other securities, or a combination thereof, as determined by the Committee. The effect on such awards of the participant’s termination of service will be determined by the Committee and set forth in the participant’s award agreement. Dividend Equivalent Rights. Participants generally have no voting rights or rights to receive dividends with respect to any awards until Shares are issued under such awards to the participant. However, the Committee may grant dividend equivalent rights with respect to Shares subject to any RSUs, performance shares, or stock-based awards, which generally would credit the participant with the right to receive cash or additional Shares under the award equal to any cash dividends. Dividend equivalent rights are subject to the same vesting conditions and settlement terms as the applicable Shares subject to the award. Non-Transferability. Awards granted under the Plan generally are nontransferable by the participant other than by will or by the laws of descent and distribution. Shares acquired pursuant to a restricted stock award may not be transferred until vested, except pursuant to an Ownership Change Event or by will or the laws of descent and distribution. Options, stock appreciation rights, and restricted stock purchase rights generally are exercisable during the participant’s lifetime only by the participant. However, the Committee may permit an option, Tandem SAR related to a nonstatutory stock option, or Freestanding SAR to be assigned or transferred to certain family members or certain trusts or certain other limited entities and, in the case of an incentive stock option, to the extent that the transfer will not disqualify its tax qualification status as an incentive stock option. Change in Control. Upon a Change in Control (as defined in the Plan), outstanding awards under the Plan will be subject to the definitive agreement entered into by the Company in connection with such Change in Control. The Committee in its discretion may provide for acceleration of exercisability, vesting, or settlement of awards in connection with a Change in Control, including in relation to the termination of a participant’s service before, upon or after a Change in Control. Upon a Change in Control, without the consent of any participant, any awards (or portions of awards) that are denominated in Shares may be cancelled in exchange for cash, stock or other property, and any outstanding awards (or portions of awards) may be assumed or continued, or substituted with substantially equivalent awards with respect to the acquirer’s stock. Any awards (or portions of awards) not assumed or otherwise continued will terminate upon the Change in Control. Any awards granted under the Plan to a non‑employee director as compensation for service as a non‑employee director that are not assumed, continued, or substituted in a Change in Control will accelerate vesting in full. For purposes of the Plan, a “Change in Control” generally means the occurrence of any one or more of the following: (a) a person (with certain exceptions described in the Plan) acquiring beneficial ownership of more than 50% of the total fair market value or total combined voting power of the Company’s securities entitled to vote in the election of the Company’s directors; (b) a date specified by the Committee after stockholders have approved a plan of complete liquidation or dissolution of the Company; or (c) an Ownership Change Event or series thereof in which Company stockholders immediately before such event or series do not retain more than 50% beneficial ownership of the total combined voting power of securities entitled to vote generally in the election of the Company’s directors or (if applicable) the entity to which the assets of the Company are transferred. However, a Change in Control will not include a transaction described in either of the foregoing clauses (a) or (c) if a majority of the members of the board of directors of the continuing or surviving or successor entity, or its parent, immediately after such transaction, consists of incumbent directors. For purposes of the Plan, an “Ownership Change Event” generally means (a) a sale or exchange of more than 50% of the total combined voting power of the Company’s securities entitled to vote in the election of the Company’s directors; (b) a merger or consolidation in which the Company is a party; or (c) the sale, exchange or transfer of all or substantially all of the Company’s assets (other than to one or more subsidiaries of the Company). Withholding. The Company may deduct from the Shares issuable to a participant upon the exercise or settlement of an award, or to accept from the participant the tender of, Shares having a fair market value equal to all or any part of any applicable tax withholding obligations. The fair market value of any Shares used to satisfy any such tax withholding obligations will not exceed the amount determined by the applicable minimum statutory withholding rates (or the maximum individual statutory withholding rates for the applicable jurisdiction if use of such rates would not result in adverse accounting consequences or cost). The Company may require a participant to direct a broker, upon the vesting, exercise, or settlement of an award, to sell a portion of the shares subject to the award to cover the applicable tax withholding obligations and to remit such tax withholding amount to the Company in cash. Amendment, Suspension or Termination. The Committee may amend, suspend, or terminate the Plan at any time, provided that no amendment may be made without stockholder approval that would increase the maximum aggregate number of Shares authorized for issuance under the Plan, change the class of persons eligible to receive incentive stock options or require stockholder approval under any applicable law, regulation, or rule, including the rules of any stock exchange on which the Shares are then listed. The Plan will continue in effect until its termination by the Committee, provided that no awards may be granted under the Plan following the tenth anniversary of the date of approval of the Plan’s adoption by the Board which approval occurred on May 12, 2021. No amendment, suspension or termination of the Plan may materially adversely affect an outstanding award without participant consent, unless necessary or advisable to comply with any applicable law, regulation, or rule.

  21. Summary of the 2021 Equity Incentive Plan

    Clawback. To the extent that any clawback or similar provisions applicable to awards under the Plan are required by applicable law, listing standards and/or policies adopted by the Company, awards under the Plan will be subject to such provisions. In addition, the Committee may specify in an award agreement that the participant’s rights, payments, and benefits under an award will be subject to reduction, cancellation, forfeiture, or recoupment upon specified events, which may include, for example, termination of service for cause. The Plan further provides that, if the Company is required to prepare an accounting restatement due to the Company’s material noncompliance, as result of misconduct, with any financial reporting requirement under securities laws, then any participant who knowingly or through gross negligence engaged in misconduct or failed to prevent the misconduct, and any participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, will be required to reimburse the Company for any payments under awards received within 12 months following public issuance or SEC filing of the financial document embodying such financial reporting requirement, and any profits realized from sale of Company securities during such 12-month period.

  22. New Plan Benefits

    | Name of Non-Employee Director or Group | Grant Date Fair Value of Restricted Stock Units ($) | Number of Shares Subject to Restricted Stock Units (#) | | Ann Sperling | 150,000 | ―(1) | | Frederick Tuomi | 150,000 | ―(1) | | Bruce Strohm | 150,000 | ―(1) | | Alana Beard | ― | ―(1) | | John Dorman | 150,000 | ―(1) | | Alison Dean | 150,000 | ―(1) | | All current directors who are not executive officers, as a group | 750,000 | ―(1) |

  23. New Plan Benefits

    | Name of Individual or Identity of Group and Principal Position | Grant Date Fair Value of Stock Options ($) | Number of Shares Subject to Stock Options (#) | Aggregate Grant Date Fair Value of Restricted Stock Units ($) | Number of Shares Subject to Restricted Stock Units (#) | | Lucas Haldeman, Chief Executive Officer | 2,500,000 | 1,276,935 | ― | ― | | Isaiah DeRose-Wilson, Chief Technology Officer | 400,000 | 204,309 | ― | ― | | Robyn Young, Chief Marketing Officer | 400,000 | 204,309 | ― | ― | | Hiroshi Okamoto, former Chief Financial Officer | 400,000 | 204,309 | ― | ― | | All current executive officers, as a group (6 individuals) | 4,000,000 | 2,043,094 | 375,000 | 143,728 | | All current directors who are not executive officers, as a group (6 individuals) | ― | ― | 749,988 | 208,330 | | All employees, including all current officers who are not executive officers, as a group | 1,354,523 | 660,810 | 4,555,481 | 1,580,872 |

  24. Summary Compensation Table

    Summary Compensation Table The following table sets forth all of the compensation awarded to, earned by, or paid to our named executive officers during fiscal 2022 and 2023.

  25. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Equity Awards ($) | Non-Equity Incentive Compensation ($) | All other Compensation(1) ($) | Total ($) | | Lucas Haldeman | 2023 | 750,000 | 2,500,000(2) | 949,894(3) | 22,500 | 4,222,394 | | Chief Executive Officer | 2022 | 781,250 | 1,068,845 | 468,750 | 20,500 | 2,339,345 | | Isaiah DeRose-Wilson | 2023 | 325,000 | 400,000(2) | 226,559(3) | 17,549 | 969,108 | | Chief Technology Officer | 2022 | 325,000 | 549,293 | 127,269 | 16,950 | 1,018,513 | | Robyn Young | 2023 | 315,000 | 400,000(2) | 228,299(3) | 11,550 | 954,849 | | Chief Marketing Officer | 2022 | 196,875 | 400,000 | 109,982 | 0 | 706,857 | | Hiroshi Okamoto(4) | 2023 | 400,000 | 400,000(2) | 163,740(3) | 20,454 | 984,194 | | Former Chief Financial Officer | 2022 | 250,000 | 400,000 | 128,022 | 5,231 | 783,253 |

  26. Summary Compensation Table

    (1) Represents match of contributions to our 401(k) savings plan, which we provide to all eligible employees. (2) Represents the grant date fair market value of option awards granted under the SmartRent 2021 Equity Incentive Plan on January 24, 2023, each of which is scheduled to vest with respect to 25% of the underlying shares on the one-year anniversary of the grant date and annually thereafter in three equal installments, subject to continued employment. These amounts reflect the grant date fair value of the awards, and do not correspond to the actual value that will be realized by the named executive officer. See the notes to our financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for a discussion of all assumptions made by us in determining the FASB ASC Topic 718 values of our equity awards. (3) Represents a cash incentive award to our named executive officers for the year ended December 31, 2023. Mr. Okamoto resigned from his position as Chief Financial Officer effective November 14, 2023, but remained employed with the Company until December 31, 2023.

  27. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table presents information regarding outstanding equity awards held by our named executive officers as of December 31, 2023. All awards were granted under our 2018 Stock Plan or Equity Incentive Plan.

  28. Outstanding Equity Awards as of December 31, 2023

    | | | | Option Awards | | | | Stock Awards | | | Name | Grant Date | Vesting Commencement Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(1) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) ($) | | Lucas Haldeman | 8/17/2019 | 8/17/2019 | 2,132,420 | – | 0.47 | 10/1/2027 | – | – | | | 11/18/2020 | 12/18/2020 | 1,710,269 | 508,460 | 0.64 | 12/18/2030 | – | – | | | 4/19/2021 | 4/19/2021 | – | – | – | – | 162,819 | 519,393 | | | 8/24/2021 | 8/24/2021 | – | – | – | – | 57,974 | 184,937 | | | 1/18/2022 | 1/18/2022 | – | – | – | – | 281,598 | 898,298 | | | 1/24/2023 | 1/24/2023 | – | 1,276,935 | 2.87 | 1/24/2033 | – | – | | Isaiah DeRose-Wilson | 8/17/2019 | 8/17/2019 | 1,421,613 | 0 | 0.47 | 8/17/2029 | – | – | | | 4/19/2021 | 4/19/2021 | – | – | – | – | 97,691 | 311,634 | | | 8/24/2021 | 8/24/2021 | – | – | – | – | 4,868 | 15,529 | | | 1/18/2022 | 1/18/2022 | – | – | – | – | 27,778 | 88,612 | | | 1/24/2023 | 1/24/2023 | – | 204,309 | 2.87 | 1/24/2033 | – | – | | Robyn Young | 5/09/2022 | 5/09/2022 | – | – | – | – | 60,873 | 194,185 | | | 1/24/2023 | 1/24/2023 | – | 204,309 | 2.87 | 1/24/2033 | – | – | | Hiroshi Okamoto | 5/09/2022 | 5/09/2022 | – | – | – | – | 60,873 | 194,185 | | | 1/24/2023 | 1/24/2023 | – | 204,309 | 2.87 | 1/24/2033 | – | – |

  29. Outstanding Equity Awards as of December 31, 2023

    (1) Each RSU represents a contingent right to receive one share of our Class A Common Stock. RSUs vest with respect to 25% on the first anniversary of the vesting commencement date set forth in the table and monthly thereafter in 36 equal installments. The aggregate dollar value of the RSUs is based on $3.19 per unit, the fair market value of our Class A Common Stock on December 31, 2023.