ALLEGRO MICROSYSTEMS INC

Current report

Amendment to Chief Executive Officer Employment Agreement

Current report

On October 31, 2024, the Company entered into an amendment (the “Amendment”) to the employment agreement, dated May2, 2022, between the Company and Vineet Nargolwala, the Company’s Chief Executive Officer (the “CEO Employment Agreement”). The Amendment was authorized by the Board of Directors of the Company (the “Board”) at the recommendation of the Board’s Compensation Committee (the “Committee”) following a comprehensive market review by the Committee of all the Company’s executive severance arrangements and based on advice and recommendations from the Committee’s independent compensation consultant.

Current report

The Amendment revised the severance amount under the CEO Employment Agreement that would apply in the case of a termination without cause or resignation for good reason outside of a change in control (“CIC”) scenario from 2.0 times base salary (and a pro-rated target level bonus for the year of termination) and up to 12 months of health care continuation payments to 2.0 times base salary plus target annual bonus (and a pro-rated target level bonus for the year of termination) and up to 18 months of health care continuation payments. The Amendment does not change the severance amount under the CEO Employment Agreement that would apply in the case of termination without cause or resignation for good reason within 24 months after the occurrence of a CIC, which remains at a 2.0 times base salary plus target annual bonus and up to 24 months of health care continuation payments. The Amendment also specifies that the CIC “protection” period, during which termination without cause or resignation for good reason would trigger full equity award vesting acceleration is 24 months following the occurrence of a CIC, notwithstanding the fact that this period is 12 months in Mr. Nargolwala’s outstanding equity award agreements.

Current report

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the Amendment, a copy of which is filed as Exhibit 10.5 to this Quarterly Report and incorporated by reference herein.

Current report

Amendments to Other Executive Severance Arrangements

Current report

As a result of the market review by the Committee, the Committee also authorized the Company to modify the Company’s standard form of executive severance agreement to be entered into with any new executive officers going forward (the “New Severance Agreement”). The New Severance Agreement would provide that in the case of termination without cause or resignation for good reason of the relevant officer, he or she would receive severance payments equal to 1.0 times base salary plus target annual bonus (and a pro-rated target level bonus for the year of termination). The New Severance Agreement also adds a Section 280G “best net benefit” provision, which provides that if the executive’s total payments and benefits in connection with a CIC transaction (“Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”), such Total Payments would be reduced solely to the extent necessary to ensure that no portion of the Total Payments is subject to the Excise Tax (the “Reduced Payments”), but only if such Reduced Payments would be larger than the original Total Payments to the executive on an after-tax basis. Consistent with our current policies and agreements, none of our executive officers would be entitled to receive any “gross up” payments on account of any Excise Tax.

Current report

The New Severance Agreement does not amend the severance agreements that the Company has previously entered into with its executive officers (other than Mr. Nargolwala), would only be used for newly hired or promoted executives going forward and has not yet been entered into with any individual officers.

Current report

To further align with current market practice, the Committee also authorized the Company to amend all of the Company’s outstanding executive restricted stock unit and performance stock unit award agreements to increase the CIC “protection” period from 12 to 24 months following a CIC event, where a termination without cause or resignation for good reason during such period would trigger full equity award vesting acceleration.