The simple answer to this is that you need to know when you want to stop printing, and break out of the the read-test-print loop. It looks like you are wanting to stop at the first blank line after you've found the desired data, so try this:

    if ($line =~ /$arc/) {
        $s = 'true';
    }

    # New test here:
    last if ($s && $line =~ /^[\s\n\r]*$/);

    if ($s) {
        print OUTPUT $line;
    }
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This is untested, but I wanted to keep the new code in-line with what you already have.

--rjray