Availability or your proxy card (if you received a printed copy of the proxy materials). Votes submitted through the Internet must be received by 11:59 p.m. Eastern Time on May 22, 2024.
•By Telephone. You may vote using a touch-tone telephone by calling 1-800-690-6903, 24 hours a day, seven days a week. You will need the 16-digit control number included on your Notice of Internet Availability or your proxy card (if you received a printed copy of the proxy materials). Votes submitted by telephone must be received by 11:59 p.m. Eastern Time on May 22, 2024.
•By Mail. If you received printed proxy materials, you may submit your vote by completing, signing and dating each proxy card received and returning it promptly in the prepaid envelope we have provided or returning it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received no later than by May 22, 2024 to be voted at the annual meeting.
•During the Annual Meeting. You may vote during the annual meeting by going towww.virtualshareholdermeeting.com/IRBT2024. You will need the 16-digit control number included on your Notice of Internet Availability or your proxy card (if you received a printed copy of the proxy materials). If you previously voted via the Internet (or by telephone or mail), you will not limit your right to vote online at the annual meeting.
If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated and returned your proxy card. If you vote via the Internet or by telephone, do not return your proxy card.
Participation in the Virtual Annual Meeting
Our 2024 Annual Meeting will be a completely virtual meeting. There is no physical meeting location.
To participate in the virtual meeting, visitwww.virtualshareholdermeeting.com/IRBT2024and enter the 16-digit control number included on your Notice of Internet Availability or your proxy card (if you received a printed copy of the proxy materials). You may begin to log into the meeting platform beginning at 8:15 a.m. Eastern Time on May 23, 2024. The meeting will begin promptly at 8:30 a.m. Eastern Time on May 23, 2024.
Stockholders will also have the opportunity to submit questions prior to the annual meeting at www.proxyvote.com by logging on with your control number or during the annual meeting through www.virtualshareholdermeeting.com/IRBT2024by typing your question in the “Ask a Question” field and clicking “Submit.” Questions pertinent to meeting matters will be read and answered during the annual meeting, subject to time constraints. A technical support telephone number will be posted on the log-in page of www.virtualshareholdermeeting.com/IRBT2024 that you can call if you encounter any difficulties accessing the virtual meeting during the check-in or during the meeting.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
3
ELECTION OF DIRECTORS
Nominees
Nominee
Our board of directors currently consists of
eightseven members. Our
amended and restated certificate of incorporationExisting Certificate currently divides the board of directors into three classes. One class is elected each year for a term of three years. The board of directors, upon the recommendation of the nominating and corporate governance committee, has nominated
Colin M. Angle and Deborah G. Ellinger,Eva Manolis and recommended that
eachshe be elected to the board of directors as a Class I director,
each to hold office until the annual meeting of stockholders to be held in the year
20212027 or until
his or her successor has been duly elected and qualified or until
his or her earlier death, resignation or removal.
Mr. Angle, Dr. Chwang and Ms.
Ellinger are currently Class I directors whose terms are set to expire at this annual meeting. Dr. Chwang is retiring from the board following the expirationof his term at the 2018 annual meeting. Each of Mr. Angle and Ms. EllingerManolis has consented to being named in this
proxy statementProxy Statement and has agreed to serve if elected. The board of directors is also composed of (i) two Class II directors (Mohamad Ali and
Michael Bell)Dr. Ruey-Bin Kao) whose terms are currently set to expire upon the election and qualification of directors at the annual meeting of stockholders to be held in
2019,2025, and (ii) three Class III directors (Andrew Miller,
Elisha FinneyKaren Golz and Michelle
V. Stacy) whose terms are currently set to expire upon the election and qualification of directors at the annual meeting of stockholders to be held in
2020. If Proposal 42026. Colin Angle is
approved by the stockholders, each of Mr. Anglea Class I director and
Ms. Ellinger, along with all other directors, will standnot standing for
electionre-election at the
2019annual meeting, and as a result, his term as director will end at the annual meeting.
The board of directors knows of no reason why
any of the
nomineesnominee named in this
proxy statementProxy Statement would be unable or for good cause will not serve, but if
anythe nominee should for any reason be unable to serve or for good cause will not serve, the board of directors reserves the right to nominate
a substitute
nomineesnominee for election prior to the annual meeting, in which case the Company will file an amendment to this
proxy statementProxy Statement disclosing the identity of such substitute
nomineesnominee and related information and the proxies will be voted for such substitute
nominees.nominee. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the
nomineesnominee named below.
Recommendation of the Board:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” ELECTION OF THE NOMINEE LISTED BELOW.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 4
RecommendationTable of the BoardTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE“FOR”ELECTION OF THE NOMINEES LISTED BELOW.
Contents
The following table sets forth our
nomineesnominee to be elected at the annual meeting and continuing directors, the positions
with us currently held by each nominee and director, the year each nominee’s or director’s current term is currently set to expire and each nominee’s and director’s current class:
| | | | | | | | | | | |
Nominee’s or Director’s Name | | Position(s) with the Company | | Year Current Term
Will Expire | | | Current Class
of Director | |
| | | |
NomineesNominee for Class I Directors:
Director: | | | | | | | | | | | |
| Eva Manolis | Director | 2024 | I |
Colin M. Angle
Continuing Directors: | | |
|
| Mohamad Ali | Director | 2025 | II |
| Dr. Ruey-Bin Kao | Director | 2025 | II |
| Karen Golz | Director | 2026 | III |
| Andrew Miller | Director, Chairman of the Board Chief Executive Officer and
Director
| 2026 | | 2018 | | | | I | III |
| Michelle Stacy | Director | 2026 | |
Deborah G. Ellinger
| | Lead Independent Director | | | 2018 | | | | I | |
| | | |
Continuing Directors:
| | | | | | | | | | |
| | | |
Mohamad Ali
| | Director | | | 2019 | | | | II | |
| | | |
Michael Bell
| | Director | | | 2019 | | | | II | |
| | | |
Andrew Miller
| | Director | | | 2020 | | | | III | |
| | | |
Elisha Finney
| | Director | | | 2020 | | | | III | |
| | | |
Michelle V. Stacy
| | Director | | | 2020 | | | | III | |
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement
5
Specific Qualifications, Skills and Experience Required of the Board
The nominating and corporate governance committee believes that certain qualifications, skills and experience should be represented on the board, as described below, although not every member of the board must possess all such qualifications, skills and experience to be considered capable of making valuable contributions to the board.
| | | | | |
| | | | PUBLIC CO. LEADERSHIP Our business is complex and evolving rapidly. Our leadership is comprised of individuals who have helped lead public companies or operating business units of significant size and have proven leadership experience in developing and advancing a vision and making executive-level decisions. |
| PUBLIC CO. BOARD EXPERIENCE We look for directors who have proven public company board experience, and who have demonstrated a steady hand in representing stockholders’ interests. |
| 4FINANCE AND CAPITAL MANAGEMENT Our business and financial model is complex and global in scope. Individuals with financial expertise are able to identify and understand the issues associated with our business and take an analytical approach to capital allocation decisions. |
| GLOBAL OPERATING EXPERIENCE We are a global company, with approximately 53% of our revenue coming from the Americas, 27% from EMEA and 20% from the Asia-Pacific region in 2023. Global experience enhances understanding of the complexities and issues associated with running a global business and the challenges we face. |
| GLOBAL CONSUMER PRODUCTS SALES AND MARKETING Our business is entirely focused on delivering exceptional consumer products. We benefit from directors who have deep experience with consumer-centric businesses focused on meeting the consumers’ needs. |
| DIRECT TO CONSUMER Our strategy involves increasing transactions directly with our consumers, which requires us to communicate effectively with our customers to better understand how they use our products and what other products and services we can provide to increase our revenue per customer. We look for directors who have experience effectively scaling DTC business models. |
| CONSUMER TECHNOLOGY INSIGHT AND TRENDS Our products represent the marriage of consumer convenience with high tech engineering. We look for directors with expertise in and comfort with technology. |
| SOFTWARE/SAAS The largest portion of our employee base is comprised of software engineers and our products can contain more than a million lines of code. Directors that can help steer the Company with issues of agile software development, competitive hiring of software engineers, and alternate business models drawn from the software industry help keep us competitive. |
| SMART HOME Our newest products represent an important part of the Internet of Things and emerging smart home ecosystems. Directors with experience in this area aid in the execution of our corporate strategy. |
| DIVERSITY We believe directors with diverse backgrounds, including gender diversity, provide competing perspectives that enhance our competitiveness. |
| |
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
6
Board of Directors
Over the past eight years we have added six independent directors who have further diversified the board in terms of experience, expertise, geographical residency and understanding, and gender. In particular, these new directors have brought relevant, complementary skill sets and insights in disciplines that span global branding, strategic software development, cloud infrastructure, data analytics, consumer business and finance, all of which are critical to our strategy. We continually evaluate our board member skills for alignment with our strategic goals. The following matrix summarizes our directors’ skills that are critical to our success:
Skills Matrix
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Public Co. Leadership | Public Co. Board Experience | Finance and Capital Management | Global Operating Experience | Global Consumer Products Sales and Marketing | Direct to Consumer | Consumer Technology Insight and Trends | Software/SAAS | Smart Home | Diversity |
| Board Members | | | | | | | | | | |
| Mohamad Ali | | | | | | | | | | |
| Karen Golz | | | | | | | | | | |
| Dr. Ruey-Bin Kao | | | | | | | | | | |
| Eva Manolis | | | | | | | | | | |
| Andrew Miller | | | | | | | | | | |
| Michelle Stacy | | | | | | | | | | |
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
7
Board Diversity Matrix (As of [●], 2024)
We believe directors with diverse backgrounds, including gender diversity, provide competing perspectives that enhance our competitiveness. The following table sets forth information on the voluntarily self-identified diversity characteristics of the members of our board of directors:
| | | | | | | | | | | | | | | | | | | | | | | |
| Total Number of Directors: 7 | | | | | | | |
| Angle 2 | Ali | Golz | Kao | Manolis | Miller | Stacy |
| Part I: Gender Identity | | | | | | | |
| Male | | | | | | | |
| Female | | | | | | | |
| Part II: Demographic Background | | | | | | | |
| African American or Black | | | | | | | |
| Alaskan Native or Native American | | | | | | | |
| Asian | | | | | | | |
| Hispanic or Latinx | | | | | | | |
| Native Hawaiian or Pacific Islander | | | | | | | |
| White | | | | | | | |
| Two or More Races or Ethnicities | | | | | | | |
| LGBTQ+ | | | | | | | |
| | | | | | | | | | | | | | |
| | | | |
| Board and Governance Information |
| 7 | Size of Board | | ✓ | Proxy Access |
| 6 | Number of Independent Directors | | ✓ | Majority Voting for Directors |
| 61 | Average Age of Directors | | ✓ | Annual Election of Directors3 |
| 9 | Board Meetings Held in Fiscal 2023 | | ✓ | Independent Directors Meet Without Management Present |
| 7 | Average Tenure of Independent Directors (in years) | | ✓ | Director Stock Ownership Guidelines |
| | | ✓ | Code of Business Conduct and Ethics for Directors, Officers and Employees |
| | | ✓ | Director Self-Evaluation Program |
2Colin Angle is a Class I director nominees to be electedand not standing for re-election at the annual meeting, the directors and the executive officers of the Company, their ages immediately prior toas a result, his term as director will end at the annual meeting, meeting.
3The Company is seeking stockholder approval at the Annual Meeting to declassify its board of directors.
Notice of Annual Meeting of Stockholdersand the positions currently held by each such person with the Company:iRobot 2024 Proxy Statement 8
Director Nominee Class I
| | | | | | | | | | | | | | | | | | | | |
| | Eva Manolis DIRECTOR SINCE: 2019 AGE: 60 Director | | | | | |
| Name
| | iRobot Committees: •Audit Committee •Nominating and Corporate Governance Committee | Age
| | | Position
Public Directorships: •Fair Isaac Corporation (since April 2018) •Shutterfly, Inc. (former) (from October 2016 to September 2019) |
| Colin M. Angle(4)
| | | 50 | | Chairman of the Board, Chief Executive Officer and Director
|
Deborah G. Ellinger(3)
| | | 59 | | | Lead Independent Director
|
Mohamad Ali(1)(4)
| | | 47 | | | Director
|
Michael Bell(1)(2)
| | | 51 | | | Director
|
Andrew Miller(2)(3)
| | | 57 | | | Director
|
Elisha Finney(1)(2)
| | | 56 | | | Director
|
Michelle V. Stacy(1)(4)
| | | 63 | | | Director
|
Alison Dean
| | | 53 | | | Executive Vice President, Chief Financial Officer, Treasurer and Principal Accounting Officer
|
Christian Cerda
| | | 48 | | | Chief Operating Officer
|
Russell J. Campanello
| | | 62 | | | Executive Vice President, Human Resources and Corporate Communications
|
Glen D. Weinstein
| | | 47 | | | Executive Vice President, Chief Legal Officer
|
| | |
(1) Member of compensation and talent committee
(2) Member of audit committee
| | (3) Member of nominating and corporate governance committee
(4) Member of strategy and finance committee
|
Colin M. Angle,aco-founder of iRobot, has served as chairman of the board since October 2008, as chief executive officer since June 1997, and prior to that, as our president since November 1992. He
Eva Manolis has served as a director since October 1992. AsJuly 2019. She brings more than 30 years of product development and global ecommerce experience within the consumer technology space to the iRobot board. Ms. Manolis served in aco-founder variety of executive roles at Amazon.com, Inc. from 2005 through 2016, where she was successful in developing and chiefgrowing customer adoption of technologies, products, programs and services across a variety of categories, including consumer electronics. Most recently, Ms. Manolis served as vice president of consumer shopping at Amazon.com, Inc. from 2010 until 2016 with responsibility for worldwide innovative shopping experiences, including the development of features and services for the company’s mobile app and website on a global scale. Prior to that, Ms. Manolis served as vice president of web and mobile retail applications from 2008 to 2010 and vice president of global retail applications from 2005 to 2008. Ms. Manolis also founded Shutterfly, Inc. in 1999 and served as executive officer, Mr. Angle provides a critical contributionvice president of products, services and strategy until 2002. At Shutterfly, she was responsible for the vision, architecture, design and development of the company’s website from inception to profitability. In addition to her service on the iRobot board of directors, she also currently serves on the board of directors at Fair Isaac Corporation and previously served on the board of directors at Shutterfly, Inc.
Experience and Qualifications
Ms. Manolis brings more than 30 years of product development and global ecommerce experience within the consumer technology space to iRobot.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
9
Continuing Directors
| | | | | | | | | | | | | | | | | |
| | Karen Golz DIRECTOR SINCE: 2021 AGE: 70 Director | | |
| | iRobot Committees: •Chair of Audit Committee | | Public Directorships: •Aspen Technology, Inc. (since May 2022, previously a director of the predecessor company since March 2021) •Analog Devices, Inc. (since June 2018) the |
| | | |
Karen M. Golz is a retired partner from Ernst & Young ("EY"), a public accounting firm, where she held various senior leadership positions during her tenure at the firm, including most recently as Global Vice Chair, Japan from July 2016 to June 2017, and prior thereto, from July 2010 to June 2016, as Global Vice Chair, Professional Practice. Ms. Golz also served on EY’s Global Risk Management Executive Committee, which was charged with his detailed knowledgerisk management across EY’s global network, from 2008 to 2016. Ms. Golz currently serves as senior advisor to The Boston Consulting Group’s Audit and Risk Committee, a role she has held since August 2017, and as a principal for K.M. Golz Associates, LLC, a consulting services company, since August 2017. She also sits on the Board of Directors of the Company, our employees, our client base, our prospects, the strategic marketplace and our competitors. Mr. Angle previously worked at theUniversity of Illinois Foundation. Ms. Golz is also a National Aeronautical and Space Administration’s Jet Propulsion Laboratory where he participated in the designAssociation of the behavior controlled rovers that led to Sojourner exploring Mars in 1997. HeCorporate Directors Board Leadership Fellow. She holds a B.S. in Electrical EngineeringAccountancy, summa cum laude, from the University of Illinois, Urbana-Champaign and an M.S. in Computer Science, both from MIT.Deborah G. Ellingeris a certified public accountant ("CPA").
Experience and Qualifications
Ms. Golz has accounting, auditing, and risk management expertise and extensive experience helping global organizations address the complexities of international regulation and standards.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
10
| | | | | | | | | | | | | | |
| Andrew Miller DIRECTOR SINCE: 2016 AGE: 63 Chairman of the Board | | |
| iRobot Committees: •Audit Committee
| | Public Directorships: • Verint Systems (since December 2019) • Vontier Corporation (since October 2020) |
| |
Andrew Millerhas served as a director since November 2011. SheSeptember 2016 and brings extensivecritical financial leadership as well as software, cloud infrastructure and Internet of Things ("IoT") experience in international retailto iRobot as the Company continues to grow its consumer business globally and consumer products from her experiencefocus on the connected home. Mr. Miller most recently served as a formerexecutive vice president and chief executivefinancial officer of several consumer goodsPTC, a provider of software technology platforms and retail companies. Shesolutions, from early 2015 until May 2019. At PTC, he was the presidentresponsible for global finance, tax and CEO of Ideal Image, a chain of 130 medical spas providingnon-surgical cosmetic procedures across the UStreasury, investor relations, information technology, pricing, corporate real estate, and Canada, from 2016 until her retirement in March 2018; chairman andcustomer administration. From 2008 to 2015, Mr. Miller served as chief executivefinancial officer of The Princeton Review,Cepheid, a high-growth molecular diagnostics company, which assists students globallywhere he built world-class finance and information technology teams and a nationally recognized investor relations program. Mr. Miller has also served in test preparationfinancial leadership roles at Autodesk, MarketFirst Software, Cadence Design Systems, and tutoring, from 2012Silicon Graphics. In addition to 2014; presidenthis service on the iRobot board of Restoration Hardware,directors, Mr. Miller serves as a luxury home furnishings retailer, from 2008 to 2009;director on the board of Verint Systems (Nasdaq: VRNT), a global software and chief executive officercloud provider of Wellness Pet Food,actionable intelligence solutions, where he is a naturalpet-food company, from 2004 to 2008. Ms. Ellinger led each of those companies while they were owned by two private equity firms, and threemember of the four transitioned to new ownership, yielding three to seven times return on capital to investors. Previously, she served as an executive vice president at CVS Pharmacy, a senior vice president at Staples and a partner at The Boston Consulting Group, and began her career with Mellon Financial Corporation. Ms. Ellingerboard’s audit committee. Mr. Miller also serves on the board of The Commonwealth Institute,Vontier Corporation (NYSE: VNT), a nonprofit,global industrial technology company focused on smarter transportation and mobility, where he is chair of the audit committee and a member of the compensation committee. He is also a former director of board of Interpublic Group, The Princeton Review, Sealy Corporation, National Life Group,United Online, where he chaired the audit committee and several private companies. Her assignments have taken her all overserved on the world. She has livedcompensation committee. Mr. Miller holds a B.S. in Commerce with an emphasis in Accounting from Santa Clara University and worked in Europe, Asiawas a CPA.
Experience and America. Ms. Ellinger is qualifiedQualifications
Mr. Miller brings critical financial leadership as
aBarrister-at-Law in London,well as
a member ofsoftware, cloud infrastructure and IoT experience to iRobot as the
Inner Temple. She holds an M.A.Company continues to grow its consumer business globally and
B.A. in Law and Mathematics fromfocus on the
University of Cambridge, England.connected home.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement
11
| | | | | | | | | | | | | | | | | |
| | Michelle Stacy DIRECTOR SINCE: 2014 AGE: 68 Director | | | |
| | iRobot Committees: •Chair of Compensation and Talent Committee •Nominating and Corporate Governance Committee | 5 | Public Directorships: •Flex Pharma, Inc. (former) (from March 2016 to July 2019) |
| | |
Michelle V. Stacy has served as a director since August 2014. During her five-year tenure as president at Keurig Inc., a division of Keurig Green Mountain, Inc., from 2008 to 2013, the company’s revenue grew from $493 million in 2008 to $4.3 billion in 2013. Ms. Stacy has also served as lead executive director of Coravin, Inc. and a director of LCP Edge Holdco, LLC (Hydrafacial), Young Innovations Inc., Flex Pharma and Tervis Inc. Ms. Stacy currently serves on the board of Bellwether Coffee Co., Miltons Bakery, and SkullCandy. Ms. Stacy is a recognized expert on identifying strategies to successfully build top line growth for global brands. She holds a B.S. from Dartmouth College and an M.S. in Management from J.L. Kellogg Graduate School of Management — Northwestern University, and is bilingual in French and English.
Experience and Qualifications
As the former president of Keurig, Inc. and former vice president and general manager with Gillette/Procter & Gamble Co., Ms. Stacy brings to the board of directors a wealth of experience leading consumer-focused, high-growth businesses and building global brands.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
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| | | | | | | | | | | | | | | | | |
| | Mohamad Ali DIRECTOR SINCE: 2015 AGE: 53 Director | | |
| | iRobot Committees: •Compensation and Talent Committee •Chair of Nominating and Corporate Governance Committee | | Public Directorships: •Henry Schein (since February 2021) •Carbonite, Inc. (former) (from December 2014 to July 2019) |
| | |
Mohamad Alihas served as a director since August 2015 and brings extensive experience with capital allocation in technology companies, as well as strategic software development, including cloud infrastructure and data analytics. HeMohamad Ali has served as Senior Vice President (SVP) and Chief Operating Officer for IBM Consulting since October 2023, where he is responsible for the global operational performance of IBM Consulting, including Global Delivery, Cybersecurity services, asset development and scaling AI-enabled solutions that make greater use of IBM technology. Previously, Mr. Ali was chief executive officer and a director of International Data Group, Inc. (IDG), a leading market intelligence and demand generation company focused on the technology industry, from August 2019 to May 2023. Prior to IDG, he served as the president, chief executive officer and director of Carbonite, Inc. from 2014 to present., a global leader in data protection, since 2014. Mr. Ali has successfully led Carbonite’s continued growth, serving the ever-evolving technologytechnological needs of small andmid-size midsize businesses and consumers. Boston-based Carbonite provides cloud and hybrid backup and recovery solutions for home and business. Previously, Mr. Ali served as chief strategy officer at Hewlett-Packard, a manufacturer of computers and enterprise products, from 2012 to 2014 and president of Avaya Global Services, an enterprise communications company. He also served in senior leadership roles at IBM Corporation ("IBM"), a multinational technology and consulting company, where he acquired numerous companies to build IBM’s analytics and big data business. In additionMr. Ali is a director of Henry Schein (Nasdaq: HSIC), the world’s largest provider of health care solutions to servingoffice-based dental and medical practitioners, as well as Oxfam America, Massachusetts Technology Leadership Council, and the WGBH Educational Foundation, each a nonprofit entity, and previously served on the board of directors of Carbonite, Mr. Ali is also a director of Oxfam America and Massachusetts Technology Leadership Council and previously served on the Board of Directors ofInc., City National Corporation, and City National Bank. HeMr. Ali was named to Boston Business Journal’s 2008 “40 Under 40” list, and recognized2022 EY Entrepreneur of the Year for New England, 2018 CEO of the Year by Massachusetts High Tech magazine as a 2011All-Star.Technology Leadership Council, and finalist in America's 1988 National Science Talent Search. Mr. Ali holds a B.S. and an M.S. in Electrical Engineering, both from Stanford University.Michael Bell
Experience and Qualifications
Mr. Ali brings extensive experience with capital allocation in technology companies, as well as strategic software development, including cloud infrastructure and data analytics.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
13
| | | | | | | | | | | | | | | | | |
| | Dr. Ruey-Bin Kao DIRECTOR SINCE: 2018 AGE: 63 Director | | |
| | iRobot Committees: •Compensation and Talent Committee | | Public Directorships: •Want Want China Holdings Ltd. (former) (from 2011 to July 2018) •Autohome, Inc. (former) (from February 2014 to June 2016) |
| | |
Dr. Ruey-Bin Kao has served as a director since March 2016 and brings significantJune 2018. He has more than 37 years of expertise in technology, telecommunication, corporate governance, and consumer businesses. Dr. Kao has held senior leadership roles, driving revenue growth and profitability, at numerous global companies, including Telstra Corporation Ltd. (“Telstra”) (Chief Executive Officer, Greater China), Applied Materials China (President, China), China Hewlett-Packard Co. Ltd (China Managing Director/General Manager of Enterprise Business), Motorola, Inc. (China Chairman / President) and AT&T Bell Laboratories (Business and Product Marketing Manager). Most recently, from January 2014 to December 2017, Dr. Kao served as the InternetChief Executive Officer, Greater China, at Telstra, Australia’s leading telecommunications and technology company, where his management responsibilities included building strategic partnerships to enhance the company’s brand, as well as developing and executing an effective growth strategy by identifying areas of Thingspotential in the rapidly evolving Greater China market. Dr. Kao was formerly a director of China Telecommunications Corporation, China National Travel Services Group Corporation Ltd. and Shenhua Group Corporation Ltd. (now known as China Energy Investment Corporation Ltd.). Dr. Kao holds a bachelor’s degree in Computer Science from Tamkang University, master’s degree in Computer and Information Science from the University of Delaware and a doctorate degree of Business Administration from the Hong Kong Polytechnic University.
Experience and Qualifications
Dr. Kao has deep experience as an executive in high-tech companies and in international operations, particularly in China, through his work with Telstra, Applied Materials, China Hewlett-Package and Motorola, and extensive experience in telecommunication, corporate governance, and consumer business.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
14
The Board of Directors and Its Committees
Board of Directors
The board of directors met nine (9) times during the fiscal year ended December 30, 2023, and took action by unanimous written consent four (4) times. Each of the directors attended at Silver Spring Networks, Inc., Intel Corporation, Apple, Inc.,least 75% of the aggregate of the total number of meetings of the board of directors and Palm, Inc. Hethe total number of meetings of all committees of the board of directors on which he or she served during fiscal 2023. The board of directors has the following standing committees: audit committee, compensation and talent committee and nominating and corporate governance committee, each of which operates pursuant to a separate charter that has been approved by the board of directors. A current copy of each charter is available within the Corporate Governance section of our website at https://investor.irobot.com/corporate-governance/highlights. The information found on, or accessible through, our website is not incorporated into, and does not form a part of, this Proxy Statement or any other report or document we file with or furnish to the SEC. Each committee reviews the appropriateness of its charter at least annually and retains the authority to engage its own advisors and consultants. In May 2022, the board of directors formed an ad hoc transaction committee in connection with the proposed acquisition of iRobot by Amazon. Messrs. Angle and Miller and Ms. Stacy served as members of the transaction committee, which was dissolved effective January 2024.The composition and responsibilities of each current committee are summarized below.
Board Committees
Below is a summary of the committee structure and membership information for each of our standing committees.4
| | | | | | | | | | | |
| Audit
Committee | Compensation and Talent Committee | Nominating and
Corporate Governance Committee |
| | | |
| Mohamad Ali | | | |
| Colin Angle | | | |
Karen Golz | | | |
| Dr. Ruey-Bin Kao | | | |
| Eva Manolis | | | |
Andrew Miller | | | |
| Michelle Stacy | | | |
= Chair 
= Member = Financial Expert4Colin Angle is a Class I director and not standing for re-election at the annual meeting, and as a result, his term as director will end at the annual meeting.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
15
| | | | | | | | | | | |
| Audit Committee | Met 7 times in 2023 |
| | | |
Committee Chair Karen Golz | Responsibilities | | |
| •Appointing, approving the compensation, and assessing the independence, of our independent registered public accounting firm; •Pre-approving auditing and permissible non-audit services (including certain tax compliance, planning and advice services), and the terms of such services, to be provided by our independent registered public accounting firm; •Reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures; •Coordinating the oversight and reviewing the adequacy of our internal control over financial reporting; •Overseeing the performance of our internal auditors and internal audit functions, including reviewing the annual internal audit risk assessment as well as the scope of, and overall plans for, the annual internal audit program; •Establishing policies and procedures for the receipt and retention of accounting related complaints and concerns; •Reviewing and discussing with management risk assessments and risk management, including cyber security; •Overseeing our compliance with certain legal and regulatory requirements including, but not limited to, the Foreign Corrupt Practices Act; •Preparing the audit committee report required by SEC rules to be included in our annual Proxy Statement; •Reviewing certain relationships and related transactions; and •Such other matters as the committee deems appropriate. For additional information concerning the audit committee, see the “Report of the Audit Committee of the Board of Directors.”
The audit committee took action by unanimous written consent one (1) time during the fiscal year ended December 30, 2023. |
| | | |
| Committee Members | Independence and Financial Expertise |
| Andrew Miller | Each member of the audit committee of the board of directors is an independent director within the meaning of the director independence standards of The Nasdaq Stock Market LLC ("Nasdaq") and the SEC, including Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, the board of directors has determined that each of Mr. Miller, Ms. Golz and Ms. Manolis are financially literate and that Mr. Miller and Ms. Golz each qualifies as an “audit committee financial expert” under the rules of the SEC. |
|
| Eva Manolis | | | |
| | | |
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| | | | | | | | | | | |
| Compensation and Talent Committee | Met 4 times in 2023 |
| | | |
Committee Chair Michelle Stacy | Responsibilities | |
|
| •Annually reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer and other executive officers; •Evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer and other executive officers based on such evaluation; •Reviewing and recommending to the board of directors for approval the compensation of our chief executive officer; •Overseeing and administering our compensation, welfare, benefit and pension plans and similar plans; •Reviewing and making recommendations to the board of directors with respect to director compensation; •Reviewing and making recommendations to the board of directors with respect to succession planning for senior management; •Reviewing the Company's programs related to diversity and inclusion; •Retaining and approving the compensation of any compensation advisers; •Evaluating the independence of any such compensation advisers; •Overseeing the Company’s efforts to promote diversity and inclusion in the workforce; and •Overseeing the management’s efforts to foster a company culture aligned with the Company’s values and strategy.
The compensation and talent committee took action by unanimous written consent eight (8) times during the fiscal year ended December 30, 2023. |
| | | |
| Committee Members | Independence |
| Mohamad Ali | Each member of the compensation and talent committee of the board of directors is an independent director within the meaning of the director independence standards of Nasdaq and a non-employee director as defined in Rule 16b-3 of the Exchange Act. |
|
| Dr. Ruey-Bin Kao |
| | | |
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| | | | | | | | | | | |
| Nominating and Corporate Governance Committee | Met 2 times in 2023 |
| | | |
Committee Chair Mohamad Ali | Responsibilities | | |
| •Developing and recommending to the board a set of corporate governance principles and best practices, including considering the adequacy of the by-laws and certificate of incorporation for consideration by stockholders; •Evaluating, monitoring and recommending to the board corporate governance policies, including a code of business conduct and ethics and a set of corporate governance guidelines; •Overseeing the annual evaluation of the board, the committees of the board and management; •Developing and recommending to the board criteria for board and committee membership; •Establishing procedures for identifying and evaluating director candidates, including nominees recommended by stockholders; •Overseeing the Company's environmental, social and governance ("ESG") programs, including assessing the Company's performance against ESG metrics and reviewing ESG disclosures; •Coordinating continuing education for directors on topics that will assist them in discharging their duties; •Identifying individuals qualified to become board members; and •Recommending to the board the persons to be nominated for election as directors and to each of the board’s committees.
The nominating and corporate governance committee took action by unanimous written consent one (1) time during the fiscal year ended December 30, 2023. |
| | | |
| Committee Members | Independence |
| Michelle Stacy | Each member of the nominating and corporate governance committee of the board of directors is an independent director within the meaning of the director independence standards of Nasdaq and applicable rules of the SEC. |
|
| Eva Manolis | | | |
| | | |
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DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the director nominee to be elected at the annual meeting, the continuing directors, and the executive officerofficers of the Company, their ages immediately prior to the annual meeting, and president of Silver Spring Networks, a leading networking platform and solutions provider for smart energy networks, from September 2015 until his retirementthe positions currently held by each such person with the Company:
| | | | | | | | |
| Name | Age | Position |
| Mohamad Ali(2)(3) | 53 | Director |
| Karen Golz(1) | 70 | Director |
| Dr. Ruey-Bin Kao(2) | 63 | Director |
| Eva Manolis(1)(3) | 60 | Director |
| Andrew Miller(1) | 63 | Director, Chairman of the Board |
| Michelle Stacy(2)(3) | 68 | Director |
| Glen Weinstein | 53 | Interim Chief Executive Officer |
| Jean Jacques Blanc | 59 | Executive Vice President, Chief Commercial Officer |
| Russell J. Campanello | 68 | Executive Vice President, Human Resources and Corporate Communications |
| Tonya Drake | 45 | Executive Vice President, General Counsel and Secretary |
| Faris Habbaba | 64 | Executive Vice President, Chief Research and Development Officer |
| Julie Zeiler | 58 | Executive Vice President, Chief Financial Officer |
| | | | | |
| |
| (1) | Member of the audit committee |
| (2) | Member of the compensation and talent committee |
| (3) | Member of the nominating and corporate governance committee |
|
|
Executive Officers
Glen Weinstein was appointed interim Chief Executive Officer in January 2018. Previously,2024. Mr. Weinstein previously served as our executive vice president and chief legal officer from 2010August 2012 to 2015 he held various roles at Intel Corporation,January 2024, as our general counsel from July 2000 to August 2012, and as senior vice president from January 2005 to August 2012. He also served as our secretary from March 2004 to January 2024. Prior to joining the Company, Mr. Weinstein was with Covington & Burling LLP, a multinational technology corporation specializinglaw firm in the production of semiconductor chips, including Corporate Vice President New Devices Group, Corporate VP Mobile and Communications Group and Corporate Vice President Ultra Mobility Group. He was head of Product Development at Palm, Inc. from 2007 to 2010. He worked at Apple, Inc. from 1991 to 2007 and played significant roles in development of Apple iPhone and Apple TV products, serving as Vice President, CPU Software from 2002 to 2007. HeWashington, D.C. Mr. Weinstein holds a B.S. in Mechanical Engineering from the University of Pennsylvania.Ronald Chwang, Ph.D.has served as a director since November 1998 and brings extensive experience in technology, manufacturing, supply chain, business development and Asian operations. Since January 2005, he has been the chairman and president of iD Ventures America, LLC (formerly known as Acer Technology Ventures, LLC) part of the iD SoftCapital Group, a venture investment and management consulting service group. He was the chief executive officer of Acer America from 1992 until 1997, growing it to over $1 Billion in revenues, and then became chairman and president of Acer Technology Ventures until 2004, managing high-tech venture investment activities in North America. Previously, he was president of two Acer business groups in Taiwan, from 1986 to 1991. Dr. Chwang holds a B.Eng. (with honors) in Electrical Engineering from McGill UniversityMIT and a Ph.D. in Electrical EngineeringJ.D. from the University of Southern California. Dr. Chwang will retire from the board following the expiration of his term at the 2018 annual meeting after nearly twenty years of service on our board.
Andrew Millerhas served as a director since September 2016 and brings critical financial leadership as well as software, cloud infrastructure and Internet of Things (IoT) experience to iRobot as the company continues to grow its consumer business globally and focus on the connected home. Mr. Miller has served as executive vice president and chief financial officer of PTC, a provider of software technology platforms and solutions, since early 2015. At PTC, he is responsible for global finance, tax and treasury, investor relations, information technology, pricing, corporate real estate, and customer administration. From 2008 to 2015, Mr. Miller served as chief financial officer of Cepheid, a high-growth molecular diagnostics company. While at Cepheid, he built world- class finance and information technology teams and a nationally recognized investor relations program. Mr. Miller has also served in financial leadership roles at Autodesk, MarketFirst Software, Cadence Design Systems, and Silicon Graphics. He is a former director of United Online. Mr. Miller holds a B.S. in Commerce with an emphasis in Accounting from Santa Clara University and was a CPA.
Elisha Finney has served as a director since January 2017. Ms. Finney brings more than 25 years of financial and technology-related expertise to iRobot as the company focuses on expanding internationally,
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
scaling its connected product line and maximizing value for its shareholders. Until her retirement in May 2017, Ms. Finney served as executive vice president and CFO of Varian Medical Systems, a leading developer of radiation oncology treatments and software, where she served in various management roles since 1999. Her management responsibilities at Varian Medical Systems included corporate accounting; corporate communications and investor relations; internal financial and compliance audit; risk management; tax and treasury, and information technology. She also serves on the board of directors at Cutera, ICU Medical, Mettler-Toledo, and NanoString. She previously served as a board member at Altera Corporation, Thoratec and Laserscope. She holds a B.A. in Risk Management and Insurance from the University of Georgia and an M.B.A. in Finance from Golden Gate University where she received the 1992 “Outstanding Graduate of the Masters Programs in Finance” Award. Ms. Finney was the 2015 UGA Terry College of Business Distinguished Alumni of the Year and the recipient of Silicon Valley Business Journal’s 2013 “Women of Influence” Award.
Michelle V. Stacy has served as a director since August 2014. As the former president of Keurig, Inc. and former vice president and general manager with Gillette/Procter & Gamble Co., Ms. Stacy brings to the board of directors a wealth of experience leading consumer businesses and building global brands. During her five-year tenure at Keurig Inc., a division of Keurig Green Mountain, Inc., from 2008 to 2013, the company’s revenue grew from $493 million in 2008 to $4.3 billion for 2013. Ms. Stacy is a director of Coravin, Inc., Flex Pharma, Inc., a former director of Young Innovations Inc., Tervis Inc, and the French Cultural Center, a nonprofit. She is a professional speaker on leadership, innovation and growth. She holds a B.S. from Dartmouth College and an M.S. in Management from J.L. Kellogg GraduateVirginia School of Management — Northwestern University, and is bilingual in French and English.
Executive Officers
Alison DeanLaw.
Jean Jacques Blanchas served as our executive vice president, chief financial officer, treasurer and principal accountingcommercial officer since April 2013. Ms. DeanFebruary 2020 and is responsible for leading our global go-to market commercial strategy. Mr. Blanc previously served as our senior vice president, corporate finance from February 2010 until March 2013. From March 2007 until February 2010, Ms. Dean served as our vice president financial controls & analysis. From August 2005 untiland general manager of EMEA from March 2007, Ms. Dean served2017 to February 2020 and as our vice president financial planning & analysis. From 1995sales and Marketing EMEA from April 2014 to August 2005, Ms. Dean servedFebruary 2017. Prior to joining iRobot, Mr. Blanc held leadership roles in a number of positionscommercial management at 3ComWhirlpool Corporation, including vice president and corporate controller from 2004 to 2005general manager, France and vice president of finance — worldwide sales, North West Europe. Earlier in his career, he held commercial roles at Phillips. Mr. Blanc graduated from 2003 to 2004. Ms. Dean holds a B.A.Institut Superieur du Commerce in Business Economics from Brown University and an M.B.A. from Boston University.Christian Cerdahas served as our chief operating officer since May 2016. Mr. Cerda previously served as executive vice president of our Home Robot Business Unit from February 2015 until May 2016, and its senior vice president and general manager since May 2013. He has direct responsibility over global sales, marketing and product management and leads Global Commercial and Supply Chain Operations, overseeing manufacturing and supply chain. Prior to iRobot, he was general manager and vice president of Sales and Marketing from April 2010 to March 2013 at Whirlpool Corporation, a multinational manufacturer of home appliances, where he was responsible for sales, marketing, brand communications, product development and operations. Previously, he served in senior positions at The Boston Consulting Group and Procter & Gamble Co. Mr. Cerda holds a B.S. in Computer Engineering from Universidad Simon Bolivar and an M.S. in Business Administration with distinction from the Northwestern University Kellogg Graduate School of Management.
Paris, France.
Russell J. Campanellohas served as our executive vice president, human resources and corporate communications since February 2014. Mr. Campanello previously served as our senior vice president, human resources and corporate communications from July 2013 until February 2014. From November 2010 until July 2013, Mr. Campanello served as our senior vice president, human resources. Prior to joining iRobot, Mr. Campanello served as senior vice president, human resources and administration at Phase Forward, Inc. from April 2008 until September 2010. Mr. Campanello previously served as senior vice president of human resources and marketing at Keane, Inc., a business process and information technology consulting firm, from SeptemberNotice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
2003 to October 2007. Prior to Keane, Mr. Campanello served as chief people officer at NerveWire, Inc. from August 2000 to February 2003. Prior to NerveWire, he served as senior vice president, human resources at Genzyme Corp. from November 1997 to July 2000. Earlier in his career, Mr. Campanello spent nine years as vice president of human resources at Lotus Development Corporation. He holds a B.S. in Business Administration from the University of Massachusetts.
Glen D. Weinstein
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Tonya Drake was appointed as our executive vice president, general counsel and secretary in January 2024. Ms. Drake previously served as our senior vice president and deputy general counsel from March 2020 to January 2024, and as vice president and assistant general counsel from July 2014 to March 2020. Prior to joining iRobot, Ms. Drake was a principal at Fish & Richardson P.C. in Boston. She holds a B.S. in Electrical Engineering from Purdue University, a M.S. in Electrical Engineering and Computer Science from MIT, and a J.D. from Boston University School of Law.
Faris Habbaba has served as our chief research and development officer since June 2021 and is responsible for driving technology development and advanced research to support product roadmaps. Prior to joining iRobot, Mr. Habbaba served as vice president of engineering at Zebra Technologies, a mobile computing company, from January 2016 to June 2021 where he managed a global team of more than 1,000 software and hardware engineers. Earlier in his career, Mr. Habbaba held engineering, supply chain, product management and business leadership roles at Motorola Solutions, Inc. Mr. Habbaba holds a B.S. in mechanical engineering from the University of Florida and has been awarded more than a dozen U.S. and international patents.
Julie Zeilerhas served as our executive vice president and chief legalfinancial officer since August 2012. Mr. Weinstein previously servedMay 2020, overseeing the Company’s financial operations, investor relations and facilities organizations. In her prior role, as our general counsel from July 2000 to August 2012 and as senior vice president fromof fniance, she led the Company’s financial planning and analysis, and treasury functions since joining the Company in January 2005 to August 2012. Since March 2004, he has also served as our secretary.2017. Prior to joining iRobot, Mr. Weinstein was with Covington & Burling LLP,Ms. Zeiler served in a law firm in Washington, D.C. Mr. Weinsteinnumber of senior financial leadership positions at Boston Scientific Corporation from 1996 to 2017 that included its global operations, European business and major product lines. In addition, her experience includes financial management roles at Digital Equipment Corporation from 1987 to 1996. Ms. Zeiler holds a B.S.B.A. in Mechanical EngineeringEconomics and English from MIT and a J.D. from the University of Virginia School of Law.Albion College.
Our executive officers are elected by the board of directors on an annual basis and serve until their successors have been duly elected and qualified or until their earlier death, resignation or removal.
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CORPORATE GOVERNANCE AND BOARD MATTERS
Board Leadership Structure
Our current leadership structure splits the roles of CEO and chairman, with Mr. Angle servesMiller serving as our chief executive officer and chairman of the board. The board of directors believes that having our chief executive officer as chairman of the board facilitates the board of directors’ decision-making process because Mr. Angle has first-hand knowledge of our operations and the major issues facing us. This also enables Mr. Angle to act as the key link between the board of directors and other members of management. To assure effective independent oversight, ourby-laws provide that the independent members of our board of directors will designate a lead independent director if the chairman of the board is not an independent director. When Mr.
Miller succeeded Mr. Angle as chairman of the board of directors in January 2024, the chairman role moved to an independent director,
as discussed further in “Executive Sessions of Independent Directors” below.so the lead independent director position was no longer required.
Independence of Members of the Board of Directors
The board of directors has determined that Dr.
Chwang, Mses. Ellinger, FinneyKao, Msses. Golz, Manolis and Stacy, and Messrs. Ali
Bell, and Miller are independent within the meaning of the director independence standards of
The Nasdaq
Stock Market (“NASDAQ”) and the SEC. Furthermore, the board of directors has determined that each member of each of the
committeesaudit committee, compensation and talent committee, and nominating and corporate governance committee of the board of directors is independent within the meaning of the director independence standards of
NASDAQNasdaq and the
SEC, save Mr. Angle who serves on the strategy and finance committee and is our chief executive officer.SEC.
Executive Sessions of Independent Directors
Executive sessions of the independent directors are held during each regularly scheduled
in-person meeting of the board of directors. Executive sessions do not include any of our
non-independent directors and are chaired by
a lead independent director who is appointed annually by the board of directors from our independent
directors. Ms. Ellinger currently serves as the lead independent director. In this role, Ms. Ellinger serves as chairperson of the independent director sessions.chairman. The independent directors of the board of directors met in executive session four (4) times in
2017.Role of Lead Independent Director
The lead independent director works to ensure that “all voices are heard” within the boardroom and proactively spends considerable time with the chief executive officer, and other executive officers, to understand the Company’s vision and strategy and works to focus the board of directors on areas aligned with the Company’s vision and strategy. In addition to acting as the chairperson of the independent director sessions, the lead independent director assists the board in assuring effective corporate governance. The lead independent director’s specific duties include:
providing the chairman of the board with input as to preparation of agendas for meetings;2023.
advising the chairman of the board as to the quality, quantity and timeliness of the flow of information from the Company’s management that is necessary for the independent directors to effectively and responsibly perform their duties;
coordinating and developing the agenda for the executive sessions of the independent directors;
acting as principal liaison between the independent directors and the chairman of the board on critical issues;
acting as a spokesperson for the independent directors able to talk with major investors and stockholders on topics of overall governance;
evaluating, along with the members of the compensation and talent committee, the chief executive officer’s performance and meeting with the chief executive officer to discuss such evaluation; and
acting as chairperson of the board in the absence of the chairman of the board or a vacancy in the position of chairman of the board.
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
The Board of Directors’ Role in Risk Oversight
The board of directors oversees our risk management process. This oversight is primarily accomplished through the board of directors’ committees and management’s reporting processes, including receiving regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic and reputational risks. The audit committee focuses on risk related to accounting, internal controls,
and financial and tax
reporting.reporting, privacy and cybersecurity. The audit committee also assesses economic and business risks and monitors compliance with ethical standards. The compensation and talent committee identifies and oversees risks associated with our executive compensation policies and practices, and the nominating and corporate governance committee identifies and oversees risks associated with director independence, related party transactions and the implementation of corporate governance policies.
The strategy and finance committee oversees currency risk management policies and risks related to other treasury and tax policies.
Policies Governing Director Nominations
The nominating and corporate governance committee of the board of directors is responsible for reviewing with the board of directors from time to time the appropriate qualities, skills and characteristics desired of members of the board of directors in the context of the needs of the business and current
make-up of the board of directors. This assessment includes consideration of the following minimum qualifications that the nominating and corporate governance committee believes must be met by all directors:
nominees
•Nominees must have experience at a strategic or policy making level in a business, government,non-profit or academic organization of high standing;
nominees•Nominees must be highly accomplished in their respective fields, with superior credentials and recognition;
nominees•Nominees must be well regarded in the community and shall have a long-term reputation for the highest ethical and moral standards;
nominees•Nominees must have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards on which the nominee may serve;
nominees•Nominees must be free of conflicts of interest and potential conflicts of interest, in particular with respect to relationships with other boards; and
nominees•Nominees must, to the extent such nominee serves or has previously served on other boards, demonstrate a history of actively contributing at board meetings.
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We do not have a formal board diversity policy. However, pursuant to the Policy Governing Director Qualifications and Nominations, as part of its evaluation of potential director candidates and in addition to other standards the nominating and corporate governance committee may deem appropriate from time to time for the overall structure and composition of the board of directors, the nominating and corporate governance committee may consider whether each candidate, if elected, assists in achieving a mix of board members that represent a diversity of background and experience. Accordingly, the board of directors seeks members from diverse professional backgrounds who combine a broad spectrum of relevant industry,
geographical understanding and strategic experience and expertise that, in concert, offer us and our stockholders
diversitya diverse set of
opinionopinions and
insightinsights in the areas most important to us and our corporate mission. In addition, nominees for director are selected to
havebring complementary, rather than overlapping, skill sets. All candidates for director nominee must have time available to devote to the activities of the board of directors. The nominating and corporate governance committee also considers the independence of candidates for director nominee, including the appearance of any conflict in serving as a director. Candidates for director nominee who do not meet all of these criteria may still be considered for nomination to the board of directors, if the nominating and corporate governance committee believes that the candidate will make an exceptional contribution to us and our stockholders.
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Process for Identifying and Evaluating Director Nominees
The board of directors delegates the initial selection and nomination process to the nominating and corporate governance committee, with the expectation that other members of the board of directors, and of management, will be requested to take part in the process as appropriate.
Generally, the nominating and corporate governance committee identifies candidates for director nominee in consultation with management, through the use of search firms or other advisors, through the recommendations submitted by stockholders or through such other methods as the nominating and corporate governance committee deems to be helpfulhelpful to identify candidates. Once candidates have been identified, the nominating and corporate governance committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the nominating and corporate governance committee. The nominating and corporate governance committee may gather information about the candidates through interviews, detailed questionnaires, comprehensive background checks or any other means that the nominating and corporate governance committee deems to be helpful in the evaluation process. The nominating and corporate governance committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the board of directors. Based on the results of the evaluation process, the nominating and corporate governance committee recommends candidates for the board of directors’ approval as director nominees for election to the board of directors. The nominating and corporate governance committee also recommends candidates to the board of directors for appointment to the committees of the board of directors. Once appropriate candidates have been identified, the entire board of directors votes on the candidates, as the selection of board nominees is a responsibility of the entire board of directors.
Procedures for Recommendation of Director Nominees by Stockholders
The nominating and corporate governance committee will consider director nominee candidates who are recommended by our stockholders. Stockholders, in submitting recommendations to the nominating and corporate governance committee for director nominee candidates, shall follow the following procedures:
The nominating and corporate governance committee must receive any such recommendation for nomination not
later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the date of the
proxy statementProxy Statement delivered to stockholders in connection with the preceding year’s annual meeting.
All recommendations for nomination must be in writing and include the following:
•Name and address of the stockholder making the recommendation;
•A representation that the stockholder is a record holder of the Company’s securities, or if the stockholder is not a record holder, evidence of ownership;
•Name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five full fiscal years of the individual recommended for consideration as a director nominee;
•A description of the qualifications and background of the proposed director nominee which addresses the minimum qualifications, actual or potential conflicts of interest, and other criteria for board membership approved by the board of directors from time to time and set forth in the Company’s Policy Governing Director Qualifications and Nominations;
•A description of all arrangements or understandings between the stockholder and the proposed director nominee;
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•The consent of the proposed director nominee (i) to be named in the proxy statementProxy Statement for the annual meeting and (ii) to serve as a director if elected at such annual meeting; and
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
•Any other information regarding the proposed director nominee that is required to be included in the proxy statement.Proxy Statement.
Nominations must be sent to the attention of our
secretarySecretary by U.S. mail (including courier or expedited delivery service) to:
Bedford, Massachusetts 01730
Attn: Secretary of iRobot Corporation
Our Secretary will promptly forward any such nominations to the nominating and corporate governance committee.
In addition, our
by-laws permit eligible stockholders, or groups of stockholders, owning continuously for at least three years shares of the Company’s stock representing an aggregate of at least 3% of the Company’s outstanding shares, to nominate and include in the Company’s proxy materials director nominees constituting up to two or 25%, whichever is greater, of the board of directors, provided that the stockholders and nominees satisfy the requirements in our
by-laws. Written notice of stockholder nominees to the board of directors must be received not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary
of the proceeding year’s annual meeting. For details on the Company’s proxy access procedures, please refer to our
by-laws.
Policy Governing Security Holder Communications with the Board of Directors
The board of directors provides to every security holder the ability to communicate with the board of directors as a whole and with individual directors on the board of directors through an established process for security holder communications as follows:
For communications directed to the board of directors as a whole, security holders may send such communications to the attention of the chairman of the board of directors by U.S. mail (including courier or expedited delivery service) to:
Bedford, Massachusetts 01730
Attn: Chairman of the Board, c/o Secretary
For security holder communications directed to an individual director in his or her capacity as a member of the board of directors, security holders may send such communications to the attention of the individual director by U.S. mail (including courier or expedited delivery service) to:
Bedford, Massachusetts 01730
Attn: [Name of the director], c/o Secretary
We will forward any such security holder communication to the chairman of the board, as a representative of the board of directors, or to the director to whom the communication is addressed. We will forward such communications by certified U.S. mail to an address specified by each director and the chairman of the board for such purposes or by secure electronic transmission.
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Policy Governing Director Attendance at Annual Meetings of Stockholders
Our policy is to schedule a regular meeting of the board of directors on the same date as as or immediately prior to, our annual meeting of stockholders and, accordingly, directors are encouraged to be present at our stockholder meetings. The tenOur directors are expected to participate in the virtual annual meeting of stockholders, unless they have a conflict that cannot be resolved. Seven board members who were directors at the time of the annual meeting of stockholders held in 2017,2023 attended the meeting.
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Board of Directors Evaluation Program
The board of directors performs annual self-evaluations of its composition and performance, including evaluations of its standing committees and individual evaluations for each director. In addition, each of the standing committees of the board of directors conducts its own self-evaluation, which is reported to the board of directors. The board of directors retains the authority to engage its own advisors and consultants.
For more corporate governance information, you are invited to access the Corporate Governance section of our website availablesuch information athttp: https://www.irobot.cominvestor.irobot.com/corporate-governance/highlights.
Code of Business Conduct and Ethics
We have adopted a “code of ethics,” as defined by regulations promulgated under the Securities Act of 1933, as amended ("Securities Act"), and the Exchange Act, that applies to all of our directors and employees worldwide, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. A current copy of the Code of Business Conduct and Ethics is available at the Corporate Governance section of our website athttp:https://www.irobot.cominvestor.irobot.com/corporate-governance/highlights. A copy of the Code of Business Conduct and Ethics may also be obtained, free of charge, from us upon a request directed to: iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730, Attention: Investor Relations. We intend to disclose any amendment to or waiver of a provision of the Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on itsour website available athttp:https://www.irobot.cominvestor.irobot.com/corporate-governance/highlights and/or in our public filings with the SEC.
We have adopted a Human Rights Policy. Respect for human rights is an essential value for our companyCompany and for the communities in which we operate. We are committed to ensuring that our employees and individuals in the communities affected by our activities are treated with dignity and respect. We believe that following these principles helps our employees and our business thrive as we develop new and exciting technologies for the smart home.For more corporate governanceadditional information you are invited to accessabout this policy, please visit our website at
www.irobot.com.
iRobot’s Manufacturing Supply Chain Partners: Business Conduct, Environment, Labor Practices
Our primary contract manufacturers and most significant suppliers work under a master supply agreement that includes provisions for compliance with environmental regulations consistent with the iRobot General Environmental Regulatory Requirements, conflict minerals provisions within Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), anti-corruption laws and all applicable local government regulations regarding minimum wage, living conditions, overtime, working conditions, child labor laws and the applicable labor and environmental laws. For additional information about these practices, please visit the Corporate GovernanceSocial Responsibility section of our website available athttp://www.irobot.com.Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board of Directors
The board of directors met eleven (11) times during the fiscal year ended December 30, 2017, and took action by unanimous written consent two (2) times. Each of the directors attended at least 75% of the aggregate of the total number of meetings of the board of directors and the total number of meetings of all committees of the board of directors on which they served during fiscal 2017. The board of directors has the following standing committees: audit committee; compensation and talent committee; nominating and corporate governance committee; and strategy and finance committee, each of which operates pursuant to a separate charter that has been approved by the board of directors. A current copy of each charter is available at the Corporate Governance section of our website athttp://www.irobot.comwww.irobot.com/about-irobot/corporate-social-responsibility. Each committee reviews the appropriateness of its charter at least annually. Each committee retains the authority to engage its own advisors and consultants. The composition and responsibilities of each committee are summarized below.
Audit Committee
The audit committee of the board of directors currently consists of Messrs. Miller and Bell and Ms. Finney, each of whom is an independent director within the meaning of the director independence standards of NASDAQ and the SEC, includingRule 10A-3(b)(1) under the Exchange Act, as amended, or the Exchange Act. In addition, the board of directors has determined that each of Messrs. Miller and Bell and Ms. Finney, are financially literate and that Messrs. Miller and Bell and Ms. Finney each qualifies as an “audit committee financial expert” under the rules of the SEC. Mr. Miller serves as the chairman of the audit committee.
The audit committee met eight (8) times during the fiscal year ended December 30, 2017. The audit committee operates under a written charter adopted by the board of directors, a current copy of which is available at the Corporate Governance section of our website athttp://www.irobot.com.
As described more fully in its charter, the audit committee oversees the integrity of our financial statements, our accounting and financial reporting processes, our internal controls over financial reporting, our internal and external audit functions and the safeguarding of our assets. In fulfilling its role, the audit committee responsibilities include:
appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
pre-approving auditing and permissiblenon-audit services (including certain tax compliance, planning and advice services), and the terms of such services, to be provided by our independent registered public accounting firm;
reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;
overseeing the performance of our internal auditors and internal audit functions, including reviewing the annual internal audit risk assessment as well as the scope of, and overall plans for, the annual internal audit program;
establishing policies and procedures for the receipt and retention of accounting related complaints and concerns;
reviewing and discussing with management risk assessments and risk management, including cyber security;
overseeing the development of business continuity plans;
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
overseeing our compliance with certain legal and regulatory requirements including, but not limited to, the Foreign Corrupt Practices Act;
preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
reviewing certain relationships and related transactions; and
such other matters as the committee deems appropriate.
For additional information concerning the audit committee, see the “Report of the Audit Committee of the Board of Directors.”
Compensation and Talent Committee
The compensation and talent committee of the board of directors currently consists of Messrs. Bell and Ali, and Mses. Finney and Stacy, each of whom is an independent director within the meaning of the director independence standards of NASDAQ, anon-employee director as defined in Rule16b-3 of the Exchange Act, and an outside director pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). Mr. Bell serves as the chairman of the compensation and talent committee. The compensation and talent committee’s responsibilities include:
annually reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer and other executive officers;
evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer and other executive officers;
overseeing and administering our compensation, welfare, benefit and pension plans and similar plans;
reviewing and making recommendations to the board of directors with respect to director compensation;
reviewing and making recommendations to the board of directors with respect to succession planning for senior management;
retaining and approving the compensation of any compensation advisers; and
evaluating the independence of any such compensation advisers.
The compensation and talent committee met five (5) times and took action by unanimous written consent four (4) times during the fiscal year ended December 30, 2017. The compensation and talent committee operates under a written charter adopted by the board of directors, a current copy of which is available at the Corporate Governance section of our website athttp://www.irobot.com.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee of the board of directors currently consists of Ms. Ellinger, Mr. Miller, and Dr. Chwang, each of whom is an independent director within the meaning of the director independence standards of NASDAQ and applicable rules of the SEC. Ms. Ellinger serves as the chairman of the nominating and corporate governance committee. The nominating and corporate governance committee’s responsibilities include:
developing and recommending to the board criteria for board and committee membership;
establishing procedures for identifying and evaluating director candidates including nominees recommended by stockholders;
identifying individuals qualified to become board members;
recommending to the board the persons to be nominated for election as directors and to each of the board’s committees;
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
developing and recommending to the board a code of business conduct and ethics and a set of corporate governance guidelines; and
overseeing the evaluation of the board and management.
The nominating and corporate governance committee met six (6) times during the fiscal year ended December 30, 2017. The nominating and corporate governance committee operates under a written charter adopted by the board of directors, a current copy of which is available at the Corporate Governance section of our website athttp://www.irobot.com.
Strategy and Finance Committee
Messrs. Ali and Angle, Dr. Chwang and Ms. Stacy currently serve as members of our strategy and finance committee. Mr. Ali serves as the chairman of the strategy and finance committee. The responsibilities of the strategy and finance committee include:
reviewing periodically with management the Company’s strategic objectives and their translation into stockholder value creation;
reviewing with management on a regular basis contemplated transactional opportunities that support the Company’s strategic business objectives;
reviewing with and, when appropriate, making recommendations to the board of directors regarding the Company’s capital allocation objectives, strategies and plans;
reviewing the Company’s capital allocation process annually and significant capital programs periodically;
reviewing and making recommendations to the board of directors regarding the Company’s authorization to repurchase its common stock; approving any actions taken under each such plan, and monitoring actual repurchases under the repurchase authorization;
reviewing and discussing with management the Company’s annual and long-term business and financial plans, including the financial impacts of these plans; and as part of its review of the Company’s annual and long-term business and financial plans, reporting to the board of directors concerning its review of such plans and the financial and business assumptions underlying the Company’s financial projections and budgets; and
reviewing the Company’s annual operating plan, and reviewing with management the significant projects, research and development programs or other investments.
The strategy and finance committee met four (4) times during the fiscal year ended December 30, 2017. The strategy and finance committee operates under a written charter adopted by the board of directors, a current copy of which is available at the Corporate Governance section of our website athttp://www.irobot.com.
Compensation and Talent Committee Interlocks and Insider Participation
During
2017,2023, Mses.
FinneyManolis and Stacy, and
Messrs.Mr. Ali and
BellDr. Kao served as members of the compensation and talent committee. No member of the compensation and talent committee was an employee or former employee of us or any of our subsidiaries, or had any relationship with us requiring disclosure herein.
During the last year, no executive officer of the Company served as: (i) a member of the compensation and talent committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our compensation and talent committee; (ii) a director of another entity, one of whose executive officers served on our compensation and talent committee; or (iii) a member of the compensation
and talent committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the Company.
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
No portion of this audit committee report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), through any general statement incorporating by reference in its entirety the
proxy statementProxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.
This report is submitted by the audit committee of the board of directors. The audit committee currently consists of
Karen Golz, Andrew Miller
Michael Bell and
Elisha Finney.Eva Manolis. None of the members of the audit committee is an officer or employee of the Company, and the board of directors has determined that each member of the audit committee meets the independence requirements promulgated by
NASDAQNasdaq and the SEC, including Rule
10A-3(b)(1) under the Exchange Act. Each of
Messrs.Mr. Miller and
Bell and Ms.
FinneyGolz is an “audit committee financial expert” as is currently defined under SEC rules. The audit committee operates under a written charter adopted by the board of directors.
The audit committee oversees the Company’s accounting and financial reporting processes on behalf of the board of directors. The meetings of the audit committee are designed to facilitate and encourage communication among the audit committee, Company management, the independent registered public accounting firm and the Company’s internal audit function. The Company’s management has the primary responsibility for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities, the audit committee has reviewed and discussed with management the Company’s consolidated financial statements for the fiscal quarters and full year ended December 30,
2017,2023, including a discussion of, among other things, the quarterly and annual earnings press releases, the quality of the Company’s accounting principles, the reasonableness of significant estimates and judgments, and the clarity of disclosures in the Company’s financial statements.
The audit committee ensures that the Company establishes and appropriately resources a professional internal auditing function and that there are no unjustified restrictions or limitations imposed on that function. In addition to reviewing and approving the annual internal audit plan and overseeing other internal audit activities, the audit committee regularly reviews and discusses the results of internal audit reports.
The audit committee also reviewed with PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, the results of their audit and discussed matters required to be discussed by the
Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board, other standardsapplicable requirements of the Public Company Accounting Oversight Board
rules ofand the
SEC and other applicable regulations.SEC. The audit committee has reviewed permitted services under rules of the SEC as currently in effect and discussed with PricewaterhouseCoopers LLP their independence from management and the Company, including the matters in the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has considered and discussed the compatibility of
non-audit services provided by PricewaterhouseCoopers LLP with that firm’s independence. For each engagement, Company management provided the audit committee with information about the services and fees, sufficiently detailed to allow the audit committee to make an informed judgment about the nature and scope of the services and the potential for the services to impair the independence of the independent registered public accounting firm. After the end of each fiscal year, Company management provides the audit committee with a summary of actual fees incurred with the independent registered public accounting firm.
The audit committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examinations; their evaluations of the Company’s internal
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
control, including internal control over financial reporting; and the overall quality of the Company’s financial reporting. Additionally, the audit committee meets in separate executive sessions with the Company’s chief financial officer and the head of internal audit.
In accordance with SEC rules and PricewaterhouseCoopers LLP policies, lead and concurring audit partners are subject to rotation requirements that limit the number of consecutive years an individual partner may provide services to our Company to a maximum of five years. The selection of the lead audit partner pursuant to this rotation policy involves a meeting between the candidate for the role and the chair of the audit committee, as well as with the full audit committee and members of management.
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The audit committee has also evaluated the performance of PricewaterhouseCoopers LLP, including, among other things, the length of time the firm has been engaged; its familiarity with our operations and businesses, accounting policies and practices, and our internal controls over financial reporting; and the appropriateness of fees paid to PricewaterhouseCoopers LLP for audit andnon-audit services in 2017,2023, on an absolute basis and as compared towith the scope of prior year audits. Information about PricewaterhouseCoopers LLP’s fees for 20172023 is discussed below in this proxy statementProxy Statement under “Proposal 2 -Ratification of Appointment of Independent Registered Public Accountants.Accounting Firm.” Based on its evaluation, the audit committee has retained PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the 20182024 fiscal year.
Based on its review of the financial statements and the aforementioned discussions, the audit committee concluded that it would be reasonable to recommend, and on that basis, did recommend, to the board of directors that the audited financial statements be included in the Company’s Annual Report on
Form 10-K for the year ended December 30,
2017,2023, which was filed with the SEC on February
16, 2018.27, 2024.
| | |
| Respectfully submitted by the Audit Committee, |
|
Andrew Miller (chairman)Karen Golz (chair) |
Michael Bell
Elisha Finney
Andrew Miller |
| Eva Manolis |
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REPORT OF THE COMPENSATION AND TALENT COMMITTEE OF THE BOARD OF DIRECTORS
No portion of this compensation and talent committee report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), through any general statement incorporating by reference in its entirety the
proxy statementProxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.
The compensation and talent committee of the board of directors, which is comprised solely of independent directors within the meaning of applicable rules of The NASDAQ Stock Market, Inc., outsideNasdaq, and non-employee directors within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, andnon-employee directors within the meaning of Rule16b-3 under the Exchange Act, is responsible for developing executive compensation policies and advising the board of directors with respect to such policies and administering the Company’s cash incentive and equity incentive plans. The compensation and talent committee sets performance goals and objectives for the chief executive officer and the other executive officers, evaluates their performance with respect to those goals and sets their compensation based upon the evaluation of their performance. In evaluating executive officer pay, the compensation and talent committee retains the services of aan outside compensation consultant and considers recommendations from the chief executive officer with respect to goals and compensation of the other executive officers. The compensation and talent committee assesses the information it receives in accordance with its business judgment. The compensation and talent committee also periodically reviews director compensation. All decisions with respect to executive and director compensation are approved by the compensation and talent committee.committee or recommended by the compensation and talent committee to the full board for approval. All decisions regarding chief executive officer and director compensation are reviewed and ratified by the full board. Messrs. Bell andMichelle Stacy, Mohamad Ali, and Mses. Finney and Stacy, andDr. Ruey-Bin Kao are the current members of the compensation and talent committee.
The compensation and talent committee has reviewed and discussed the Compensation Discussion and Analysis (the “CD&A”) for the year ended December 30,
20172023 with management. In reliance on
thethose reviews and discussions referred to above, the compensation and talent committee recommended to the board of directors, and the board of directors has approved, that the CD&A be included in this
proxy statementProxy Statement and incorporated by reference in our Annual Report on Form
10-K for the year ended December 30,
2017,2023, which was filed with the SEC on February
16, 2018.27, 2024.
| | |
| Respectfully submitted by the Compensation and Talent Committee, |
|
Michael Bell (chairman)Michelle Stacy (chair) |
| Mohamad Ali |
Elisha Finney |
Michelle StacyDr. Ruey-Bin Kao |
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COMPENSATION AND OTHER INFORMATION
CONCERNING EXECUTIVE OFFICERS AND DIRECTORS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an overview of our executive compensation philosophy and objectives. It also outlines the compensation program for our chief executive officer, chief financial officer, and three most highly-compensated executive officers (other than our chief executive officer and chief financial offer) during 2023.
Our compensation philosophy is based on a desire to balance retention of executive talent withemphasize pay for performance through incentive compensation whichthat is designed to rewardclosely link the realized compensation of our named executive officers forto our financial performance, operational performance, and operating performance.the performance of our stock. We also believe that the compensation of our named executive officers should strongly align our executives’ interests with those of our stockholders and focus executive behavior on the achievement of both near-term corporate targets as well as long-term business objectives and strategies. It isstrategies, with the responsibilityultimate goal of the compensationdelivering value for our stockholders and talent committeecustomers. The details of our named executive officers 2023 compensation are outlined below.
On January 28, 2024, we mutually agreed to terminate our previously announced Merger Agreement, originally signed on August 4, 2022, under which Amazon would have acquired iRobot. The Merger Agreement was terminated once it became clear that the deal had no path to regulatory approval in the European Union. Colin Angle at the same time stepped down as chief executive officer, as the Company began a significant operational restructuring. The board of directors has initiated a search process for a permanent CEO. In the meantime, the Board appointed Glen Weinstein as the Company’s interim chief executive officer.Mr. Weinstein previously served as the Company’s executive vice president and chief legal officer.
Leading up to administerthese announcements in early 2024, for the full-year fiscal 2023, we were operating under the terms of the Merger Agreement with Amazon and we were required to adhere to operating covenants that required us to deviate some from certain aspects of our compensation practicesphilosophy in order to ensure they are competitivecomply with these covenants. Most importantly, we were only permitted to grant time-based equity awards in 2023, whereas normally we would provide a mix of time-based and include incentives designedperformance-based equity awards.
2023 Overview
While our focus in 2023 was on closing the acquisition by Amazon, thereby maximizing return to appropriately drive our shareholders, during 2023, we also introduced multiple new products and digital technologies to markets worldwide. We introduced the Roomba Combo® j5+ and Roomba Combo® i5+ robot vacuum and mops, giving customers more choice when it comes to an iRobot 2-in-1 floor cleaning solution. We also expanded our product lineup further with the introductions of the Roomba Combo® j9+ 2-in-1 robot vacuum and mop and Roomba® j9+ robot vacuum. In addition we introduced thoughtful iRobot OS features Dirt Detective and SmartScrub, our latest cleaning automation features.
However, 2023 was a challenging year for the company, our revenue performance was impacted by lower orders from retailers and distributors largely resulting from a decline in consumer sentiment and resultant spending. The overall market conditions continued to be challenging and we saw increased competition in EMEA, Japan and the U.S. throughout 2023. Revenue declined by 25% from the prior year, to $891 million, and we recorded an operating loss of $264 million.
Our focus for 2024 will be aligning our cost structure with near-term revenue expectations and driving profitability, including through specificthe following financial and strategic objectives.initiatives:
•Achieving gross margin improvements through a focus on design-to-value and more beneficial terms with our existing and new manufacturing partners;
•Reducing research and development expenditure by pausing work unrelated to our core floorcare business and through increased offshoring of non-core engineering functions to lower-cost regions;
•Centralizing global marketing activities and consolidating agency expenditures to reduce sales and marketing expenses while seeking efficiencies in demand generation activities to drive sales more cost effectively;
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•Evaluating and streamlining our global entity structure to eliminate unnecessary real estate expenditures, legal entity costs and find efficiencies in operations; and Focusing our product roadmap on core value drivers within robotic floorcare; and
•A reduction of approximately 350 employees, which represents 31 percent of the Company’s workforce as of December 30, 2023. We expect to record restructuring charges totaling between $12 million and $13 million, primarily for severance and related costs.
We have an iconic brand that people love. Our marketing efforts will support key retailers in stores and online to deliver the premium experience that our customers expect and deserve. In the near term, we are taking these necessary actions to stabilize the business, improve liquidity, and focus on bringing innovative products to our customers. We are confident in our ability to build on our legacy of innovation as a standalone company and to navigate this period successfully.
Compensation Highlights:
Our 2024 compensation decisions and talent committee annually reviews2023 incentive plan outcomes reflect both the challenges we faced during the year and approves elementsour pay for performance philosophy. Specifically:
•No salary increases. In light of our recent performance and our focus on minimizing our expense, our named executive compensation, includingofficers received no salary increases for 2022, 2023 or 2024. However, Mr. Weinstein assumed a new role as the Company's interim chief executive officersofficer, and while his base salary will remain the same in 2024, he receives additional compensation in the form of a stipend of $27,500 per month while serving as interim chief executive officer base salaries, cash incentivesofficer.
•No annual bonus payouts. We fell short of the threshold performance levels for revenue and equity awards.Our performance as a company in 2017 was very strong. Innon-GAAP operating income under our first full year as a solely consumer-focused business, we delivered full year revenue of $883.9 million, which represented an increase of 34% from full year revenue in 2016, and earnings per share of $1.77 in 2017 compared with $1.48 for full year 2016.
Our compensation and talent committee, in conjunction with management, evaluates our overall executive compensation program each year.2023 bonus plan. As a result, no annual bonuses were paid to our named executive officers under the annual bonus plan for the third year in a row.
•LongTerm Incentives.We granted solely RSUs in 2023, and did not grant PSUs in 2023, as we were not permitted to grant performance-based long-term incentive awards under the operating covenants of the Merger Agreement with Amazon.
•PSU Vestings:
◦2021 Plan: We did not achieve the threshold performance levels for non-GAAP operating income for the 2021 PSUs that were eligible to vest based on cumulative non-GAAP operating income performance through 2023 and, accordingly, none of those PSUs vested.
◦2022 Plan: In 2022, we introduced PSUs that are eligible to be earned based on our relative total shareholder return (" rTSR") over one, two, and three-year periods. For the one-year performance period ended December 31, 2022, 64% of the eligible shares vested. For the two-year performance period ended December 31, 2023, 16% of the eligible shares vested. Details of these PSUs are described below in the Long-Term Incentive section of this ongoing review, we made a numberCompensation Discussion and Analysis.
Our incentive plans are highly sensitive to the Company's performance and emphasize pay that is variable and/or “performance-based” and/or “at risk.” Our 3-year performance has fallen far below our expectations, and accordingly, our CEO’s 3-year realizable pay was only 57% of changes in our long-term incentive plan for 2017, which included increasinghis targeted total compensation over that period, as shown below. Additionally, with the percentage of PSUs and removing the use of stock options. We also adjusted the design of our PSU plan so performancetermination of the entire planMerger Agreement with Amazon on January 28, 2024, and the resulting impact on our stock price, our CEO’s realizable pay for the 3-year period dropped to 31% of his target total compensation. The 3-year realizable pay is measured at the end ofcalculated as base salary paid, actual bonus paid, and long-term incentives granted in a three-year performance period, eliminating the interimone-year cumulative goals as well as thecatch-up provision,given year and we added an opportunity to earn above and below target based on actual performance achievementvalued at the end of the three-year2023 year. Realizable pay assumes target performance period. For our 2018 long-term incentive plan, we shiftedfor any PSUs granted during the payout metric from operating income asapplicable year. As a percentageresult, these figures do not take into account the lack of revenue to three-year cumulative operating incomeany vesting of the PSUs in dollars. 2022.
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Objectives of Our Compensation Program
We believe our compensation philosophies and objectives, as
further described below, have aligned executive compensation with Company performance.
Objectives of Our Compensation Program
Our compensation programs for our executive officers are designed to achieve the following objectives:
•Provide competitive compensation that attracts, motivates and retains the best talent and the highest caliber executives in order to help us to achieve our strategic objectives;
•Connect a significant portion of the total potential compensation paid to executives to our annual financial performance;
Align•Directly align management’s interest with the interests of stockholders through long-term equity incentives; and
•Provide management with performance goals that are directly linked to our longer-term planplans for growth and profit.
We believe the compensation of our named executive officers should reflect their success as a management team, rather than as individuals, in attaining key operating objectives, such as Adjusted EBITDA,non-GAAP operating income as a percentage of revenue(loss) and revenue in dollars.revenue. We define Adjusted EBITDAnon-GAAP operating income (loss) as earningsoperating income (loss) before interest, taxes, depreciation and amortization of acquired intangible assets, stock-based compensation expense, tariff refunds, net merger, acquisition and divestiture expenses, net intellectual property litigation(expense) income, and restructuring and other expense restructuring expense andnon-cash stock compensation as shown in Exhibit A of this proxy.Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
We also believe that the compensation. See page 33 of our named executive officers should not be based onForm 10-K for the short-term performanceyear ended December 30, 2023, for a reconciliation of our stock, whether favorable or unfavorable, but rather that the price of our stock will, in the long-term, reflect ournon-GAAP operating performance, and ultimately, the management of the Company.
(loss) to GAAP operating loss.
Methodologies for Establishing Executive Compensation
The compensation and talent committee, which is comprised entirely of independent directors, reviews the compensation packages for our named executive officers, including an analysis of all elements of compensation separately and in the aggregate. In determining the appropriate compensation levels for our chief executive officer, the compensation and talent committee meets with only itself and the executive vice president, human resources and corporate communications.communications, along with the independent compensation consultant engaged by the compensation and talent
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committee. With respect to the compensation levels of all other named executive officers, the compensation and talent committee meets with our chief executive officer and, as needed, our executive vice president, human resources and corporate
communications.communications, as well as with the independent compensation consultant engaged by the compensation and talent committee. Our chief executive officer annually reviews the performance of each of the other named executive officers with the compensation and talent committee.
The compensation and talent committee has engaged
Pearl Meyer & Partners, LLC (“Pearl Meyer”),Pay Governance as
anits independent compensation
consultant. The compensation consultant
to workworks with
themthe compensation and talent committee in addition to our human resources department and the chief executive officer to assist them
inwith a range of items, including establishing an appropriate peer group, developing the
structure of the executive compensation program and
in formulating recommendations regarding base salary levels, target incentive awards, performance goals for incentive compensation and equity awards for named executive officers. In conjunction with the annual performance review of each named executive officer, the compensation and talent committee carefully considers the recommendations of the chief executive officer with respect to the other executive officers when setting base salary, bonus payments under the prior year’s incentive compensation plan, and target amounts and performance goals for the current year’s incentive compensation plan. In addition, the compensation and talent committee similarly determines the size and structure of equity incentive awards, if any, for each named executive officer.
Moreover, the compensation and talent committee considers the results of the advisory vote on named executive officer compensation, or the “say on pay” vote, that is currently held each year at
ourthe Company’s annual meeting of stockholders.
At the May 20172023 annual meeting of stockholders, the Company held its annual say on pay vote. The results of the say on pay vote held in May 20172023 were as follows: | | | | | | | | |
For | | | 18,468,528 | | | | 96.77% | |
Against | | | 517,855 | | | | 2.71% | |
Abstain | | | 99,368 | | | | 0.52% | |
follows (as a percentage of the votes cast):
| | | | | | | | |
| For | 15,349,698 | 86.4% |
| Against | 2,411,101 | 13.6% |
The results of the say on pay vote are advisory and not binding on the Company, the board of directors or the compensation and talent committee. The board of directors and the compensation and talent committee, however, value the opinions of our stockholders and take the results of the say on pay vote into account when making decisions regarding the compensation of our named executive officers. Over
While our flexibility was limited during 2023 as a result of the
past few years, we have met directlyoperating covenants in place in connection with
many of our largest stockholders and listened to their feedback related to our executive compensation programs.As part of ongoing efforts to be responsive to the concerns of our investors regarding our executive compensation programs and to reward outstanding operational and financial performance,proposed acquisition by Amazon, the compensation and talent committee will, in consultation with Pearl Meyer,Pay Governance and as appropriate, continue to consider changes to our compensation programs as appropriate in responseintended to further align the pay of our senior executives with our performance while taking into account our business strategy, input from stockholders and evolving factors such as the business environment, the competitive market for talent and competition for talent.other emerging trends. Additionally, the compensation and talent committee will continue to consider the outcome of our say on pay votes, regulatory changes and emerging best practices when making future compensation decisions for our named executive officers.
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Our compensation plans are developed, in part, by utilizing publicly available compensation data and subscriptionsubscription- compensation survey data for global, national and regional companies in the technology and consumer technology industries. We believeindustries, including those that focus on smart-tech and high-tech products. When determining the practicesrange of this group of companies provide us with appropriate compensation benchmarks, because these companies have similar business models and tend to compete with us to attract executives and other employees. For benchmarkingcompetitive practice for executive compensation, we typically review the compensation data for companies with revenues, numbers of employees, market capitalizationscapitalization, headcount and levels of ongoing research &and development investment similar to our profile. Beginning with fiscal year 2017, we have removed defense oriented companies fromThere is an expanded discussion on our compensation survey data as a result of our divestment of our defense and security business unit and aligned with companies in comparable industries that focus on smart-tech and high-tech products andpeer group in the consumer technology industry.
section “Compensation Comparisons” below. While there are no perfect benchmarks for our Company, we believe that this approach provides us with valuable insights as to the competitive range of pay levels and practices of companies similar to ours.
Compensation
ConsultantConsultants
As
theits independent compensation consultant,
Pearl MeyerPay Governance provides the compensation and talent committee with advice on a broad range of executive compensation matters.
TheIn fiscal 2023, the scope of
itsPay Governance’s services
includesincluded the following:
•Apprising the compensation and talent committee of compensation-related and regulatory trends and developments in the marketplace;
Informing the compensation and talent committee of regulatory developments relating to executive compensation practices;
•Assessing the composition of the peer companies used for comparative purposes; and
Identifying potential changes to the executive compensation program to maintain competitiveness and ensure consistency with business strategies, good governance practices and alignment with stockholder interests; and
•Reviewing the Compensation Discussion &and Analysis section of the Company’s proxy statement.Proxy Statement.
The
As more fully described on page 42,the compensation and talent committee has assessed the independence of Pearl Meyerreviewed its relationship with Pay Governance pursuant to SEC rules and concluded that no conflict of interest exists that would prevent Pearl Meyer from independently advisingdetermined Pay Governance’s work for the compensation and talent committee.committee
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did not raise any conflicts of interest. The Company did not engage
Pearl MeyerPay Governance for any other consulting work in fiscal
2017.2023.
Compensation Comparisons
Developing
Developing a compensation peer group for compensation comparison purposes is not an easy task for theour Company. We do not have any “true” consumer robotic comparatorpeer companies that are publicly-traded, stand-alone, U.S.-based andsize-appropriate. We believe ourthe mix of technology, smart technology/connected devices, and technology/consumer products entities that comprise our current compensation peer group firms isprovides appropriate reference points for compensation and performance comparison purposes, but our peer group firms differ substantially from the peer groups used by some proxy advisory firms. These organizations tend to compare us to companies in the consumer durables industry such as home builders, retailers and furniture distributors/manufacturers (i.e., companies with little to no technology attributes to their respective products). These differences in peer group firms used to determine alignment of pay and performance result in substantial differences in Company performance and how compensation is valued and delivered to executives. Technology, smart technology/connected devices and technology/consumer products companies perform and pay differently from home builders, retailers and furniture distributors/manufacturers. Additionally, recruitment efforts at companies focused on technology, smart technology/connected devices and technology/consumer products are largely focused on robotics/technology experts/industry leaders and individuals with engineering backgrounds. The compensation and talent committee takes all of these unique dynamics into account annually when reviewing our peer group firms and compensation practices.Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
comparisons.
The following selection criteria, developed in conjunction with the compensation and talent committee, which are
thoroughlycarefully reviewed
annually and adjusted
(as needed),as needed, were used to develop the comparative
compensation peer group used in assessing the competitiveness of our executive compensation program and in helping
to develop fiscal
2017year 2023 compensation actions:
•Companies with revenues within a similar range and generally similar market capitalization;
•Companies within comparable industries that focus on smart-tech and high-tech products (e.g., consumer durables, consumer services, aerospace, capital goods, electronics equipment, information technology, instruments and components, computers and peripherals, networking equipment and computer hardware);
•Companies with highly-engineered products and complex networked technologies with multiple industry applications;
•Technology companies whose products contain both hardware and software components, in particular cloud-connected devices, smart monitors, networked devices and consumer wearables; and
•Companies with moderate to high sales growth and opportunity.
•Other secondary criteria also considered include:
◦Companies classified asconsidered to be engaging in “disruptive innovation;”
◦Companies withproducing high-technology products with brand recognition and/or that focus on disposable income “luxury” goods; and
◦Companies with low to moderate margins and moderatecomparable levels of ongoing investment in research and development expense that indicate similar business models and financial strategy.
Our
compensation peer group for
20172023 consisted of the following
14 companies:sixteen companies, which we show in two different technology segments. Technology companies that focus on high tech products for consumers, and broader companies that have a technology focus and meet some or all of the criteria mentioned above. | | | | | |
| Consumer Technology Companies | | Broader Technology Companies |
Alarm.com Holdings, Inc. | 3D Systems Corporation | | Nautilus Inc.
|
FAROCorsair Gaming, Inc.
| Dolby Laboratories, Inc. |
| Garmin Ltd. | Faro Technologies, Inc. | | Netgear, Inc.
|
FitbitGoPro, Inc.
| | Novanta, Inc Inc. |
GoPro, Inc.
| | Plantronics, Inc.
|
Harmonic Inc.
| | Tivo, Inc.
|
InvenSense, Inc.
| | Trimble Inc
|
Logitech International S.A. | Trimble Inc. |
| NETGEAR, Inc. | |
| Plantronics, Inc. | |
| Roku, Inc. | |
| Sonos, Inc. | |
| Universal Electronics Inc. | |
| Vizio Holding Corp. | |
These 14 companies, at
This 2023 compensation peer group differs slightly from the 2022 compensation peer group due to the removal of Azenta Inc, as their business model has shifted primarily to life sciences tools and services, and the removal of Coherent, Inc. which was acquired by II-VI on July 1, 2022. Plantronics, Inc. was acquired by HP, Inc. on August 29, 2022 after we had set the 2023 Peer Group. Additions included Corsair Gaming, Inc. and VIZIO Holding Corp., both of whom focus on high tech products for consumers and meet several of the criteria mentioned above.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
32
At the time of the
analysis,peer group review on June 30, 2022, this group of peers had
a trailing 12-month median
annual revenuesrevenue of
$645 millionapproximately $1.4 billion and a median market capitalization of
$1,350 million.approximately $1.9 billion. iRobot at this same time had trailing 12-month revenue of approximately $1.5 billion and a market capitalization of approximately $2.1 billion.
The compensation and talent committee reviews all components of compensation for named executive officers. In accordance with its charter, the compensation and talent committee also, among other responsibilities, administers our incentive compensation plan, and reviews management’s recommendations on
company-wideCompany-wide compensation programs and practices. In setting compensation levels for our executive officers in fiscal
2017,2023, the compensation and talent committee considered many factors in addition to the
benchmarkingcompetitive market analysis described above, including, but not limited to:
•The limitations provided under the operating covenants in the Merger Agreement;
•The scope and strategic impact of the executive officer’s responsibilities;
our•Our past business performance, and future expectations;
our•Our long-term goals and strategies;
the•The performance and experience of each individual;
past•Retention considerations;
•Unvested equity holdings;
•Past compensation levels of each individual and of the named executive officers as a group;
relative•Relative levels of pay among the executive officers;
the•The amount of each component of compensation in the context of the executive officer’s total compensation and other benefits;
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
•Input from the evaluationsboard with respect to its evaluation of and recommendations offor the chief executive officer; and
•Input from the chief executive officer bywith respect to the boardevaluation of directors, and evaluations and recommendations offor the other named executive officers by the chief executive officer; andofficers.
the competitiveness of the compensation packages relative to the selected benchmarks as highlighted by the independent compensation consultant’s analysis.
The compensation and talent committee
determinesrecommends to the full board compensation for our chief executive officer using the same factors it
usesconsiders for other executive officers
while placingWith the exception of fiscal 2023 during which we were only permitted to grant time-based RSUs under the operating covenants in the Merger Agreement with Amazon, we have placed greater emphasis on
performance-based opportunities through long-term equity and short-term cash incentive compensation, which we believe better alignsPSUs for our chief executive
officer’s interests withofficer since 2021 by awarding 60% of his target long-term incentives in the form of PSUs as compared to 50% for our
success and the interests of our stockholders.other named executive officers. In assessing the compensation paid to our chief executive officer, the compensation and talent committee relies on
bothinput from the board of directors on performance, information from our selected
peer group benchmarks and its judgment with respect to the factors described above.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
33
Elements of Compensation
and 2023 Annual Target Compensation
Our executive compensation program in 20172023 consisted of three primary elements: base salary, annual cash incentives, and long-term equity awards in the form of RSUs. Because of the restrictions imposed by the operating covenants of the Merger Agreement, which permitted us to grant only time-based restricted stock unitslong-term incentive compensation awards, equity awards were granted entirely in the form of RSUs for 2023. Under normal circumstances equity grants are a mix of RSUs and PSUs.PSUs for our named executive officers. All of our executive officers are also are eligible for certain benefits offered to employees generally, including life, health, disability and dental insurance, as well as participation in our 401(k) plan and employee stock purchase plan. . We have also entered into executive agreements with our executive officers that provide for certain severance benefits upon a qualifying termination of employment, including a qualifying termination in connection with a change in control of the Company.Base Salary
In 2017, the The target compensation and talent committee believesmix for each of our named executive officers includingwas determined at the beginning of 2023 and is summarized in the charts below.
The compensation mix shown above is based on the target amount for each of the elements and does not contemplate the upside and downside opportunity included in our chief executive officer, were paid salaries in line with their qualifications, experience and responsibilities. variable incentive plans.
Elements of Compensation
Base Salary
Salaries are
reviewed on an annual basis and are structured
so they areto be within the
market competitive range of salaries paid by the peer companies reviewed by the compensation and talent committee
in high-technology industries, including consumer electronics and smart technologies. Wedescribed above. While we generally aim to set base salaries for each of our executives
aboveto market competitive levels, the
market median in the relevant industriescompensation and
talent committee also
taketakes into consideration many additional factors (described below) that we believe
enableare important and have enabled us to attract, motivate and retain our leadership team in an extremely competitive environment.
Salaries are reviewed on an annual basis.The
In 2023, the compensation and talent committee reviewed the base salaries for each of our executive officers, taking into account an assessment of the individual’s responsibilities, experience, individual performance and contribution to ourthe Company's performance, and also generally takestaking into account the competitive environment for attracting and retaining executives consistent with our business needs.needs, along with those factors previously described. With respect to each of our other named executive officers, our chief executive officer provided a detailed evaluation and recommendation related to base salary adjustments, if any.
In connection with our annual review process in February 2023 and taking into account the considerations discussed above as well as our 2022 performance, the compensation and talent committee made no adjustments to the base salaries for any
(excludingof the named executive officers for
himself).2023. We similarly maintained base salaries for our named executive officers at the same levels for 2024.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
34
For 2023 and 2024, base salaries of our named executive officers were reviewed by the compensation and talent committee and no adjustments were made. The table below shows the annualized 2022, 2023 and 2024 base salaries for our named executive officers and the percentage year-over-year increase in base salaries.
| | | | | | | | | | | | | | | | | |
| | 2022 Base Salary | % Increase | 2023 Base Salary | % Increase | 2024 Base Salary |
| Colin Angle(1) | $850,000 | 0.0% | $850,000 | 0.0% | $850,000 |
| Julie Zeiler | $500,000 | 0.0% | $500,000 | 0.0% | $500,000 |
| Glen Weinstein(2) | $430,000 | 0.0% | $430,000 | 0.0% | $430,000 |
| Russell J. Campanello | $410,000 | 0.0% | $410,000 | 0.0% | $410,000 |
| Faris Habbaba | $415,000 | 0.0% | $415,000 | 0.0% | $415,000 |
| | | | | |
| |
| (1) | On January 28, 2024, Mr. Angle stepped down as chief executive officer and chairman of the board of directors and entered into a transitional services and separation agreement with the Company pursuant to which he will remain as an employee of the Company in the role of Senior Advisor for a period of up to 12 months. In this role, Mr. Angle will continue to receive an annual base salary of $850,000. |
| (2) | Mr. Weinstein was appointed as the Company's interim chief executive officer in January 2024 upon Mr. Angle's resignation. While his base salary will remain the same in 2024, he will receive additional compensation for his services as interim chief executive officer in the form of an additional base stipend of $27,500 per month. |
We believe that the base salaries of our named executive officers, which
range from 12% to 25%on average are 19% as a percentage of total
target compensation, are set at an appropriate level to align our
incentive compensation mix with our compensation philosophy.
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
In February 2017, and as part of the annual review process while taking into account the considerations discussed above, the compensation and talent committee made no base salary adjustments other than for Mr. Cerda, who received a base salary increase as part of the annual review process, as noted in the table below. For 2018, base salaries of our named executives were reviewed by the compensation and talent committee and it was determined not to make any adjustments to our named executive officers’ base salaries other than for Mr. Angle and Ms. Dean, as noted in the table below.
| | | | | | | | | | |
| | | 2016 Base Salary | | % Increase | | 2017 Base Salary | | % Increase | | 2018 Base Salary |
Colin M. Angle | | $700,000 | | — | | $700,000 | | 7.1% | | $750,000 |
Alison Dean | | $460,000 | | — | | $460,000 | | 3.3% | | $475,000 |
Christian Cerda | | $425,000 | | 5.9% | | $450,000 | | — | | $450,000 |
Russell J. Campanello | | $350,000 | | — | | $350,000 | | — | | $350,000 |
Glen D. Weinstein | | $380,000 | | — | | $380,000 | | — | | $380,000 |
Cash Incentive Compensation
2023 Annual Cash Incentive Compensation
The compensation and talent committee believes that short-term cash incentive compensation for
our executive officers should be contingent upon successful achievement of significant financial and business objectives and implementation of our business strategy. For our named executive officers, including our chief executive officer, the payment of cash incentive awards is based on an evaluation of achievement against predetermined Company financial and operational metrics in accordance with our Senior Executive Incentive Compensation Plan
(“SEICP”) adopted by the compensation and talent committee. For each named executive officer, 100% of his or her target cash incentive compensation in
20172023 was tied to key Company financial and operating performance measures.
CashWe aim to set our cash incentive opportunities for named executive officers
are generally targeted above theto be market
mediancompetitive for performance at target
and are scaled appropriately below and above targetwith actual amounts earned adjusted up or down based on
actual performance achievement,
similar to cash incentives provided to officers in our peer group of companies reviewed by the compensation and talent committee in the consumer technology industry and companies that focus on smart and high-tech products. The actual amount of the cash incentives paid to the named executive officers, however, is subject to the compensation and talent committee’s determination of our performance in general and the achievement of specificpre-established goals.as described below.
For fiscal
2017,2023, the threshold, target and maximum bonus award opportunities under our
Senior Executive Incentive Compensation PlanSEICP for each of our named executive officers, as a percentage of base salary, are set forth in the table below. These target bonus amounts were set at levels the compensation and talent committee determined were appropriate to
achievesupport our business plan, which involved growing the Company in a profitable, cost-effective way.
| | | | | | |
| | | Incentive Bonus Award Opportunity Payout Scale (% of base salary) |
| | | Threshold
(12.5% of target opportunity)
(1) | | Target (100%) | | Maximum
(200% of target opportunity)
(2) |
Colin M. Angle | | 12.50% | | 100.00% | | 200.00% |
Alison Dean | | 9.38% | | 75.00% | | 150.00% |
Christian Cerda | | 9.38% | | 75.00% | | 150.00% |
Russell J. Campanello | | 7.50% | | 60.00% | | 120.00% |
Glen D. Weinstein | | 7.50% | | 60.00% | | 120.00% |
| | | | | | | | | | | |
| | Incentive Bonus Award Opportunity Payout Scale (% of base salary) |
| | Threshold (25% of target opportunity) (1) | Target (100%) | Maximum (200% of target opportunity) (2) |
| Colin Angle | 28.75% | 115.00% | 230.00% |
| Julie Zeiler | 18.75% | 75.00% | 150.00% |
| Glen Weinstein | 18.75% | 75.00% | 150.00% |
| Russell J. Campanello | 18.75% | 75.00% | 150.00% |
| Faris Habbaba | 15.00% | 60.00% | 120.00% |
| | | | | |
| |
| (1) | Cash incentive payments are made only if the Company has achieved a specified Adjusted EBITDAnon-GAAP operating income hurdle, excluding cash incentive compensation expense. |
| (2) | This reflects the maximum incentive cash payout levels established under our Senior Executive Incentive Compensation PlanSEICP for 20172023 based on the specific goals established for fiscal 2017.2023. |
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 35
The following tables summarize the
20172023 performance measures, associated weightings and goals for each of the named executive officers under the
Senior Executive Incentive Compensation Plan,SEICP, including actual performance achievement.
As discussed previously, the payout opportunity ranges from 12.5% of the target incentive opportunity for achieving threshold level of performance to 200% of the target incentive opportunity for achieving maximum level of performance. | | | | | | | | | | | | | | |
| | | | | | Performance Goal | | |
Metric | | Weightings | | | Threshold | | Target
(100%) | | Maximum | | 2017 Actual
Performance | | Actual
Percentage
Earned (as %
of target) |
| | | | | | $ in millions |
Adjusted EBITDA, excluding cash incentive compensation expense | | | 50 | % | | $99.7 | | $117.3 | | $156.0 | | $146.0 | | 86% |
Company Revenue | | | 50 | % | | $735.1 | | $816.8 | | $980.2 | | $883.9 | | 71% |
Total Payout (as a % of Target) | | | | | | | | | | | | | | 157% |
* | Actual percentage earned (as % of target) is relative to the weightings of both metrics which is 50% respectively |
The compensation and talent committee chose this mix of financial targets for cash incentive compensation because it believes it creates a balanced focus on growth and profitability, and it believes that executive officers should be focused on a small set of critical, team-based financial and operating metrics that reinforce the executive’s role and impact and companythe Company’s business strategy. Also,
As shown in the compensationtable below, our results were below threshold for both performance metrics. As a result and talent committee established a hurdle where the available total incentive compensation payoutconsistent with our pay for the entire employee base - includingperformance culture, the named executive officers - would be reduced on adollar-for-dollar basis if Adjusted EBITDA, excluding cash incentive compensation expense, fell below $99.7 million (the thresholddid not receive any payouts under the SEICP for Adjusted EBITDA shown2023 performance.
| | | | | | | | | | | | | | | | | | | | |
| | | Performance Goal | |
| Metric | Weightings | Threshold | Target* | Maximum | 2023 Actual Performance | Actual Percentage Earned (as % of target) |
| | | $ in millions |
| Non-GAAP Operating loss, excluding cash incentive compensation expense | 50% | $(132.4) | $(120.4) | $0.0 | $(198.5) | 0% |
| Company Revenue | 50% | $896.0 | $1,054.1 | $1,264.9 | $890.6 | 0% |
| Total Payout (as a % of Target) | | | | | | 0% |
Transaction Bonus Program Under the Merger Agreement
As previously disclosed, in connection with, and under the table above).Based on our achievementterms of, the performance metrics set forth above,Merger Agreement, we established a cash transaction bonus program providing for transaction bonuses in an aggregate amount not to exceed $12 million. Awards under the following cash awards were madetransaction bonus program vested and became payable as follows: (i) 25% on the six-month anniversary of the date of the Merger Agreement, (ii) 25% on the closing of the transactions contemplated by the Merger Agreement and (iii) 50% on the three-month anniversary of the closing of the transactions contemplated by the Merger Agreement, generally subject to the named executive officers for performanceemployee’s continued employment through the applicable payment date. Each of Ms. Zeiler and Messrs. Weinstein and Campanello were awarded bonuses under the transaction bonus program in fiscal 2017 pursuantan amount equal to our Senior Executive Incentive Compensation Plan:
| | | | | | |
| | | Incentive Bonus Award |
| | | Original
Target Incentive
Opportunity | | Achievement | | ICP Earned &
Paid |
Colin M. Angle | | $700,000 | | 157% | | $1,099,001 |
Alison Dean | | $345,000 | | 157% | | $541,650 |
Christian Cerda | | $337,500 | | 157% | | $529,875 |
Russell J. Campanello | | $210,000 | | 157% | | $329,700 |
Glen D. Weinstein | | $228,000 | | 157% | | $357,960 |
the applicable executive’s annual base salary. In accordance with the terms of the transaction bonus program, 25% of the bonuses vested and became payable in February 2023 on the six-month anniversary of the date that the Merger Agreement was originally entered into. Because the Merger Agreement was terminated, the remaining 75% of the bonuses payable under the transaction bonus program were forfeited and will not be paid.
In
2017,2023, given the operating covenants imposed by the Merger Agreement with Amazon, our named executive officers were eligible to receive
RSUs only, however we have returned to a
mixbalance of
time-based restricted stock unitsRSUs and PSUs
in 2024. Typically, a combination of RSUs and PSUs are granted that are intended to promote success by aligning employee financial interests with long-term stockholder value. Long-term incentives are awarded based on various factors primarily relating to the responsibilities of the individual officer or employee, his or her past performance, anticipated future contributions, prior grants,
and competitive market and retention considerations as well as the pool of
shares available
sharesfor grant and Company performance. In general, our compensation and talent committee
baseswill base its decisions to grant long-term incentives on recommendations of our chief executive officer
(for employees other than himself) and the compensation and talent committee’s analysis of peer group and industry compensation information, with the intention of
keeping the executives’ overall target compensation levels competitive with our peers.
In 2022, we introduced a new PSU plan pursuant to which PSUs are earned based on our relative TSR over one, two, and three-year performance periods, with the potential for an adjustment based on performance against a three-year cumulative profitability goal. To earn the target number of PSUs, iRobot must outperform the TSR of a broad market index, the Russell 2000 Total Return Index (the "Index") by five points of TSR. Payout under this plan is capped at target if our absolute TSR is negative. The PSUs are also subject to an overall payout cap of 200% of target. This design puts a direct focus on shareholder value creation, and coupled with our short-term incentive plan, that includes annual revenue and non-GAAP operating income performance metrics, provides a strong balance between short and long-term business drivers and helps ensure that the realized pay of our executives closely aligns with the shareholder experience. As noted above, in 2023, we were unable to grant PSUs due to the operating covenants of the Merger Agreement with Amazon.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 36
keeping the executives’ overall compensation at a competitive level with the comparator companies reviewed by the compensation and talent committee in consumer technology and smart and high-tech industries.
While historically we used a mix
The compensation and talent committee believes
athat our traditional mix
in ourof long-term equity awards
between restricted stock unitsis market competitive and
PSUsstrongly aligns the incentives of our executives with the interests of our stockholders and the long-term performance of the Company by directly tying a significant portion of the value that may be realized from our equity compensation to the performance of the
Company.Both time-basedCompany and performance-based restricted stock units arethe value of our stock.
We typically
grantedgrant equity awards in March
of each fiscal year. Starting in 2022, RSUs vest based on continued service with one-third vesting after one year, and
vestthe remaining two-thirds vesting in
equal annualquarterly installments over
fourthe following two years.
Annual awards are sized relative to Company and individual performance for the prior year. Granting our annual awards using the prior year’s performance to size our awards may result in a disconnect in our awards relative to our performance in the year of grant.
During fiscal 2017,year 2023, our compensation and talent committee approved the time-based restricted stock unit and PSURSU awards set forth in the table below to each of our named executive officers.
| | | | | | | | |
| | Grant Date Fair Value ($) | RSUs (#) |
| Colin Angle | 5,499,992 | 125,199 |
| Julie Zeiler | 1,724,999 | 39,267 |
| Glen Weinstein | 1,499,990 | 34,145 |
| Russell J. Campanello | 1,379,973 | 31,413 |
| Faris Habbaba | 1,724,999 | 39,267 |
While grants in 2023 were entirely in RSUs, the following chart depicts the typical mix of PSUs and RSUs in our annual long-term incentive program:
2022 PSU Award Achievement
For PSUs granted in 2022, the number of shares earned is based upon the TSR of iRobot’s common stock as compared to the TSR of the Index over the following performance periods:
| | | | | |
| Performance Periods |
| Begin Date | End Date |
| 1/2/2022 | 12/31/2022 |
| 1/2/2022 | 12/30/2023 |
| 1/2/2022 | 12/28/2024 |
| |
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
37
Calculations of TSR
The TSR calculation for iRobot and the Index is based upon the 60-trading day average price prior to and including the start of each performance period (the “Beginning Average Price”) and the 60-trading day average price at the end of each performance period (the “Ending Average Price”).
The payout
opportunity on the PSUs rangesschedule can result in payout percentages ranging from
50% of the target opportunity for achieving threshold level of performance0% to 200% of the target
opportunity for achieving maximum level of performance. The number of
PSUs actually earned will bePSUs. The payout percentage is capped at 100% if iRobot’s TSR is negative over the applicable performance period. Payout is determined
atbased on percentage point difference in iRobot’s TSR when compared to the
endTSR of the
three-year performance period by measuring the Company’s actual 2017 to 2019 cumulative financial performance against the target performance. | | | | | | | | | | |
| | | Grant Date
Fair Value
($) | | Restricted
Stock Units
(#) | | PSUs
(# at Threshold)
(50% of Target) | | PSUs
(# at Target) | | PSUs
(# at Maximum)
(200% of Target) |
Colin M. Angle | | 4,153,559 | | 36,225 | | 18,112 | | 36,225 | | 72,450 |
Alison Dean | | 1,433,250 | | 12,500 | | 6,250 | | 12,500 | | 25,000 |
Christian Cerda | | 1,384,520 | | 12,075 | | 6,037 | | 12,075 | | 24,150 |
Russell J. Campanello | | 742,424 | | 6,475 | | 3,237 | | 6,475 | | 12,950 |
Glen D. Weinstein | | 891,482 | | 7,775 | | 3,887 | | 7,775 | | 15,550 |
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
The following chart depicts the mix of the components of our annual long-term incentive (“LTI”) program for 2017 & 2018:
Performance Share Units
The Company’s and the compensation and talent committee’s overall goals for selecting metrics for the PSU component of the long-term incentive program include:
AlignmentIndex, with business strategy;
Alignment with stockholder interest in improving long-term business fundamentals;
Correlation with total stockholder return; and
Complementary to our short-term incentive metrics.
The compensation and talent committee also determined that operating income as a percentage of revenue (with a threshold requirement for a minimum amount of revenue) continued to be the optimal initial metric for our PSU component. We believe operating income percent is an excellent measure of the underlying profitability of the enterprise and it has historical correlation with total stockholder return. Operating income as a percentage of revenue is also a regularly reported GAAP financial measure, is understood by our investor base, and can be reasonably forecasted over the relevant performance period. We believe operating income as a percentage of revenue in our long-term incentives coupled with the revenue component of our short-term incentives provides strong focus on, and balance between, important short- and long-term business drivers. Moreover, operating income as a percentage of revenue tends to reflect the performance of our executive team as opposed to macro-economic factors or industry-wide trends beyond the control of our team. All financial goals for each of the outstanding three-year PSU plans are established at the beginning of the three-year performance period.
PSUs granted in 2017 and 2018 will be earned and vest at the end of the three-year performance period based upon performance over the entire three-year period. In addition, our named executive officers will have the opportunity to earn below or above the target number of RSUs granted if performance is above a threshold level
Long-Term Equity Components Time-Based 50% RSU’s 50% PSU’s 50% Performance-Based 50% 2017 & 2018
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
PSUs earned when iRobot’s TSR exceeds the Index TSR by five percentage points (the “TSR Goal”).
| | | | | | | | |
| | |
| Performance Period | TSR Goal | | | Number of Earned PSUs if iRobot's TSR equals the TSR Goal |
| 01/02/2022 - 12/31/2022 | 5 percentage points above Index TSR | 281/3 of Target Award |
| 01/02/2022 - 12/30/2023 | 5 percentage points above Index TSR | 1/3 of Target Award |
| 01/02/2022 - 12/28/2024 | 5 percentage points above Index TSR | 1/3 of Target Award |
| | |
With respect to each performance period, the portion of the total number of PSUs eligible to be earned for such period will be adjusted for over- or under-performance against the TSR Goal as follows:
| | | | | | | | |
| Payout Schedule |
| Performance Relative to Index | | Payout Percentage |
| +55.0% and above | | 200% |
| +5.00% | | 100% |
| (45.0)% and below | | 0% |
but
•Under-performance: If the Company’s TSR for any performance period is more than 45% below target or above target level. These changes made in 2017 are aligned with our peer groupthe Index TSR for such performance period, no portion of companies reviewed by the compensation and talent committee in the technology and robotics industries.For the PSUs granted in 2015are earned with respect to such performance period. If the Company’s TSR for any performance period is between 45% below the Index TSR for such performance period (the “Threshold TSR Amount”) and 2016, the number of shares actuallyTSR Goal, the earned at the endportion of the three-yearPSUs with respect to such performance period could range fromincreases ratably between 0% toand 100% as the Company’s TSR increases between the Threshold TSR Amount and the TSR Goal (
i.e., the portion of the PSUs earned is increased by 2% for every 1% increase between the Threshold TSR Amount and the TSR Goal). At the TSR Goal, 100% of the target number of PSUs granted based onfor such performance period are earned.
•Over-performance: If both (i) the Company’s performance against three-year operating income and revenue goals. In addition, while all vesting of earned PSUs occurs on the third anniversary of the date of grant, achievement of intermediate targetsTSR for the three-yearperformance period allows PSUs to be deemedexceeds the TSR Goal and (ii) the Company’s actual TSR for such performance period is greater than zero, then the earned but not yet vested for the intermediate periods. Achievement of the cumulative target will allow all shares subject to the PSUs to be earned regardless of the achievement of the intermediate annual targets. Unvested awards are not eligible to receive any dividends or voting rights until the point at which any shares are earned and vested. Under this plan, participants can only earn awards at 100% of target or at 0% of target (for performance below 100% of target) for each year as there is no scaled award opportunity above target under our long-term incentive plans issued in the years 2015 and 2016.The following table outlines the revenue threshold and target operating income percent for the three-year performance goals for the PSU plan for the 2015 through 2017 cycle. No more than 100% of the PSUs granted can be earned.
| | | | | | | | | | | | |
| | | Revenue (in millions) | | Operating Income Percent | | |
2015 - 2017 PSU Performance Cycle | | Threshold | | Actual
Performance
Achieved | | | | Target | | Actual
Performance
Achieved | | Actual Payout
Level
Achieved |
2015 | | $624 | | $617 | | | | 9.0% | | 9.8% | | 0% |
2016 | | $635 | | $661 | | | | 9.0% | | 8.7% | | 0% |
2017 | | $724 | | $827(1) | | | | 9.5% | | 11.3%(1) | | 100% |
Cumulative | | $1,983 | | $2,104 | | | | 9.2% | | 10% | | 100% |
Corresponding Payout | | | | | | | | 100.0% | | | | |
(1) | 2017 actual results are adjusted to exclude the impact of the Company’s 2017 acquisitions of its distributors in Japan and Western Europe. |
For 2015,one-third of the awarded PSUs were deemed earned if the Company achieved a revenue threshold of $624 million and a minimum 9.0% operating income as a percentage of revenue. In 2015, the Company achieved $617 million in revenue and 9.8% in operating income as a percentage of revenue. Because the revenue threshold was not achieved, no portion of the PSUs awarded under the 2015 long-term incentive plan for the 2015 through 2017 plan cycle with respect to 2015such performance were earned. For 2016,one-thirdperiod increases ratably between 100% and 200% of the awardedtarget number of PSUs were deemed earned ifas the Company achieved a revenue threshold of $635 millionCompany’s TSR increases between the TSR Goal and a minimum 9.0% operating income as a percentage of revenue. In 2016,55% above the Company achieved $661 million in revenue and 8.7% in operating income as a percentage of revenue. WhileIndex TSR for such performance period (the “Maximum TSR Amount”) (
i.e., the Company did achieve $661 million in revenue, it did not achieve the necessary operating income as a percentage of revenue in 2016. Accordingly, no portion of the PSUs awarded under the 2015 long-term incentive plan for the 2015 through 2017 plan cycle with respect to 2016 performance were earned. For 2017,one-third of the awarded PSUs were deemed earned if the Company achieved a revenue threshold of $724 million and a minimum 9.5% operating income as a percentage of revenue. For 2017, the company achieved $827 million in revenue, and 11.3% in operating income as a percentage of revenue. Accordingly,one-third of the totaltarget number of PSUs awarded were earned. In addition,earned increases by 2% for every 1% increase between the Company metTSR Goal and the cumulative three-year targets forMaximum TSR Amount). At the three-year performance cycle; therefore, allMaximum TSR Amount, 200% of the target number of PSUs underare earned assuming that the 2015 long-term incentive plan were deemed earned and vested.Company’s TSR for such performance period is greater than zero.
For the second performance period, iRobot’s TSR of (55.2)% underperformed the Index TSR of (18.2)% by (37)% resulting in an overall payout of 16% of target. These results are summarized in the below chart.
| | | | | |
| Results 1/2/2022 to 12/30/2023 Performance Period |
| IRBT TSR | (55.2)% |
| Index TSR | (18.2)% |
| Outperformance | (37.0)% |
| Payout Percentage | 16% |
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement
38
| | | | | | | | | | | | | | |
| | *1/2/2022 to 12/30/2023 Performance Period |
| | PSUs At Threshold | PSUs At Target (1/3) | PSUs At Maximum | Total PSUs Earned |
| Colin Angle | 175 | 17,580 | 35,160 | 2,812 |
| Julie Zeiler | 39 | 3,995 | 7,990 | 639 |
| Glen Weinstein | 34 | 3,462 | 6,924 | 554 |
| Russell J. Campanello | 31 | 3,196 | 6,392 | 511 |
| Faris Habbaba | 39 | 3,995 | 7,990 | 639 |
| | | | | |
| |
| * | | 29 | | PSUs represented in the chart represent the PSUs at threshold, target, and maximum for the second performance period. The amounts represent one third of the total threshold, target and maximum number of PSUs granted. |
Specifically, the named-executive officers earned the following PSUs with respect to the 2015 through 2017 long-term incentive plan cycle:
| | | | | | | | | | |
| | | 2015-2017 PSUs At Target & Earned |
| | | PSUs
At Target | | 2015 Earned PSUs | | 2016 Earned PSUs | | 2017 Earned PSUs | |
Total PSUs Earned |
Colin M. Angle | | 19,400 | | 0 | | 0 | | 19,400 | | 19,400 |
Alison Dean | | 7,142 | | 0 | | 0 | | 7,142 | | 7,142 |
Christian Cerda | | 8,542 | | 0 | | 0 | | 8,542 | | 8,542 |
Russell J. Campanello | | 3,883 | | 0 | | 0 | | 3,883 | | 3,883 |
Glen D. Weinstein | | 3,883 | | 0 | | 0 | | 3,883 | | 3,883 |
The following table outlines the threshold and target three-year performance goals for the
2021 PSU
plan for the 2016 through 2018 cycle. No more than 100% of the PSUs granted can be earned. | | | | | | | | | | |
| | | Revenue (in millions) | | Operating Income Percent | | |
2016 - 2018 PSU Performance Cycle | | Threshold | | Actual
Performance
Achieved | | Target | | Actual
Performance
Achieved | | Actual Payout
Level
Achieved |
2016 | | $635 | | $661 | | 8.0% | | 8.7% | | 100% |
2017 | | $724 | | $827(1) | | 9.8% | | 11.3%(1) | | 100% |
2018 | | $833 | | — | | 10.5% | | — | | — |
Cumulative | | $2,191 | | — | | 9.5% | | — | | — |
Corresponding Payout | | | | | | 100.0% | | | | |
(1) | 2017 actual results are adjusted to exclude the impact of the Company’s 2017 acquisitions of its distributors in Japan and Western Europe. |
For 2016,one-third of the awarded PSUs were deemed earned if the Company achieved a revenue threshold of $635 million and a minimum 8.0% operating income as a percentage of revenue. In 2016, the Company achieved $661 million in revenue and 8.7% in operating income as a percentage of revenue. Accordingly,one-third of the total number of PSUs awarded were earned, but have not yet vested. For 2017,one-third of the awarded PSUs were deemed earned if the Company achieved a revenue threshold of $724 million and a minimum 9.8% operating income as a percentage of revenue. In 2017, the Company achieved $827 million in revenue and 11.3% in operating income as a percentage of revenue. Accordingly,one-third of the total number of PSUs awarded were earned, but have not yet vested. Specifically, the named-executive officers earned the following PSUs with respect to the 2016 through 2018 long-term incentive plan cycle:
| | | | | | | | | | |
| | | 2016-2018 PSUs At Target & Earned |
| | | PSUs
At Target | | 2016 Earned PSUs | | 2017 Earned PSUs | | 2018 Earned PSUs | | Total PSUs Earned
to Date |
Colin M. Angle | | 24,867 | | 8,289 | | 8,289 | | — | | 16,578 |
Alison Dean | | 9,592 | | 3,197 | | 3,197 | | — | | 6,394 |
Christian Cerda | | 11,133 | | 3,711 | | 3,711 | | — | | 7,422 |
Russell J. Campanello | | 4,308 | | 1,436 | | 1,436 | | — | | 2,872 |
Glen D. Weinstein | | 5,857 | | 1,952 | | 1,952 | | — | | 3,904 |
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Award Achievement
For the PSUs granted in 2017,2021, the number of shares earned at the end of the three-year performance period will rangecould have ranged from 0% to 200% of the target number of PSUs granted based on the Company’s performance against a three-year cumulative Non-GAAP operating income and revenue goals. All financial goals for the three-year cumulative PSU plans were established at the beginning of the three-year performance period.goal. The following table outlines the revenue threshold and targetNon-GAAP operating income percentthreshold, target, and maximum goals, along with the Company's actual performance for the three-year performance period from 2021 through 2023. Payout achievement is shown in the table.
| | | | | | | | | | | | | | | | | |
| | Operating Income Performance (in millions) |
2021-2023 PSU Performance Cycle | Threshold | Target | Maximum | Actual Performance Achieved | Actual Payout Level |
| Cumulative | $554 | $792 | $1,030 | $(346.6) | 0% |
| PSUs Eligible for Vesting | 25% | 100% | 200% | | |
For the 2021 PSUs, the three-year cumulative
performance goals for the PSU plan for the 2017 through 2019 cycle. Actual performance achieved will exclude the impact of the 2017 acquisition of the Company’s distributor in Western Europe. | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Revenue (in millions) | | | Operating Income Percent | | | | |
2017 - 2019
PSU Performance Cycle | | Threshold | | | Actual
Performance
Achieved | | | Threshold | | | Target Range | | | Maximum | | | Actual
Performance
Achieved | | | Actual Payout
Level Achieved | |
Cumulative | | $ | 2,384 | | | | — | | | | 8.2 | % | | | 9.7% - 10/7% | | | | 12.2 | % | | | — | | | | — | |
Corresponding Payout | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Under this plan, if the revenue threshold is attained, the below chart illustrates the payout range forNon-GAAP operating income percent attainment. In order to earn shares aachievement was $(346.6) million, which fell below the threshold performance level of 80% of operating income percent must be achieved. To earn 100% of shares operating income percent must achieve a target range between 95% to 105%. Achievement above 105% would earn more than 100% of shares up to a maximum of 200% of shares at 120% attainment.
| | | | | | | | |
| | | 2017-2019 PSUs At Threshold, Target & Maximum |
| | | PSUs
At Threshold | | PSUs At Target | | PSUs Maximum | | Total PSUs Earned
to Date |
Colin M. Angle | | 18,112 | | 36,225 | | 72,450 | | — |
Alison Dean | | 6,250 | | 12,500 | | 25,000 | | — |
Christian Cerda | | 6,037 | | 12,075 | | 24,150 | | — |
Russell J. Campanello | | 3,237 | | 6,475 | | 12,950 | | — |
Glen D. Weinstein | | 3,887 | | 7,775 | | 15,550 | | — |
LTI Changes for 2018
In addition to$554 million; therefore no PSUs granted in 2021 were deemed earned and vested. The table below outlines the changes we madedetails. Mr. Habbaba is excluded from the table below because he joined the Company in 2017, starting in 2018, we have removed revenue as a performance metric in the PSU plan design2021 and changed the payout metric from three-year cumulative operating income as a percentage of annual revenue to three-year cumulative operating income in dollars.
did not hold any 2021 PSUs.
| | | | | | | | | | | | | | |
| | 2021-2023 PSUs At Threshold, Target & Maximum |
| | PSUs At Threshold | PSUs At Target | PSUs At Maximum | Total PSUs Earned |
| Colin Angle | 6,811 | 27,245 | 54,490 | 0 |
| Julie Zeiler | 1,548 | 6,192 | 12,384 | 0 |
| Glen Weinstein | 1,341 | 5,366 | 10,732 | 0 |
| Russell J. Campanello | 1,238 | 4,953 | 9,906 | 0 |
Other Benefits and Perquisites
We also have various broad-based employee benefit plans. Our executive officers participate in these plans on the same terms as other eligible employees, subject to any legal limits on the amounts that may be contributed by or paid to executive officers under these plans. We offer a 401(k) plan, which allows our U.S. employees an opportunity to invest in a wide array of funds on apre-tax basis or roth basis. The Company matches up to 3% of eligible pay ($0.50 on each dollar an employee contributes up to a maximum of 6%). In 2017, we established an employee stock purchase plan for the benefit of all of our U.S., UK and Canadian based employees. In connection with the proposed merger with Amazon which was terminated in January 2024, the last offering period under the employee stock purchase program ended and our last purchase occurred on November 15, 2022.No additional offering periods have been offered since that point. We do not provide pension arrangements or post-retirement health coverage for our named executive officers or other employees. We also maintain insurance and other benefit plans for our employees. We offer no perquisites to our executive officers in the United States that are not otherwise available to all of our employees.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
39
Stock Ownership Guidelines
We maintain
equitystock ownership guidelines to further align the interests of our senior management and directors with those of our stockholders. Under the guidelines, executives are expected to hold common stock
inNotice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
that is valued at an amount ranging from two times base salary for our senior executives to six times base salary for our chief executive officer. Our directors are also expected to hold common stock in an amount equal to six times their current annual cash retainer fee for board retainer fee.
service.
For purposes of these guidelines, stock ownership
includes shares for whichexcludes unvested equity awards as well as the
executive or director has direct or indirect ownership or control, including stock andin-the-moneyvalue associated with any vested,
stock options, but
does not include unvested restricted stock units or unvestedunexercised stock options. Executives and directors are expected to meet their ownership guidelines within five years of becoming subject to the guidelines.
All executivesExecutives and directors are
currently meetingrequired to retain 20% of the shares acquired upon vesting or
exercise of equity awards until they are
working to achieve these guidelines withinin compliance with the
five-year time period.guidelines.
Since 2005, we have had a written insider trading policy that
applies to all of our employees, including officers, and directors. The policy, among other things, prohibits holding Company securities as collateral in a margin account, any hedging transactions,
short sales, and
prohibitsputs/calls, and pledging of Company securities as collateral for a loan unless the pledge has been approved by the compensation and talent committee of the board of directors. To date, no such approval has been requested or given.
We have entered into executive agreements with each of our named executive
officers.officers (but Mr. Angle’s executive agreement was superseded by his transitional services and separation agreement as described below). The executive agreements provide for severance payments equal to 50% of such officer’s annual base salary at the highest annualized rate in effect during the
one-year period immediately prior to termination, payable in six equal monthly installments, as well as monthly premium payments for continued health, dental and vision benefits for up to six months following termination, in the event that we terminate
his or herthe named executive officer's employment other than for cause,
or his or her death or disability, as
each term is defined in the executive agreements. In addition, these executive agreements provide that if we experience a change in control, as defined in the executive agreements, and the employment of such officer is terminated by the Company
withoutother than for cause
or his or her death or disability at any time within the period beginning on the date that is 45 days prior to the date of the public announcement of the execution of a definitive agreement for a change in control and ending on the first anniversary of the effective date of the change in control, or if such officer terminates his or her employment for good reason, as defined in the executive agreements, during the
one-year period following the change in control, then all unvested equity
awards held by such officer
becomesbecome fully-vested and immediately exercisable and such officer is entitled to severance payments equal to 200% of his or her annual base salary, at the highest annualized rate in effect during the period
immediatelybeginning in the year prior to the effective date of the change in control and
ending on the date of termination of employment, and 200% of such officer’s highest target cash incentive
compensation with respect to the year prior to the year in which the change in control occurred and ending in the year in which the officer’s employment is terminated, each payable in 24 equal monthly installments, as well as monthly premium payments for continued health, dental and vision benefits for up to 24 months following termination. Receipt of the severance payments and benefits under the executive agreements is subject to the executive officer’s execution of a separation agreement, including a general release of claims, in a form and of a scope reasonably acceptable to the Company and compliance with any noncompetition, inventions and/or nondisclosure obligations owed to the Company. There are no tax
gross-up payable under the executive agreements or otherwise.
Clawback Policy
In
2015, the Company adopted a clawback policy that providesaddition, as described above, on January 28, 2024, Mr. Angle stepped down as chief executive officer and chairman of the board of directors
discretionand entered into a transitional services and separation agreement with the Company pursuant to
reduce the amount of future compensation (both cash and equity) payable towhich he will remain as an
executiveemployee of the Company
in the role of senior advisor for
excess proceeds from incentive compensation received by sucha period of up to 12 months. The transitional services and separation agreement replaced Mr. Angle’s executive
due to a material restatement of financial statements. The clawback period is the three-year period following the filing of any such restated financial statementsagreement with the
SEC.Company and provides for Mr. Angle to continue to continue to receive his annual base salary of $850,000 and continue vesting in his outstanding equity awards while he remains employed by the Company; however, he will not be eligible for a bonus based on 2024 performance. If after six months the Company and Mr. Angle mutually agree to end the senior advisor relationship or if at any time during the 12-month period the Company terminates Mr. Angle’s employment without cause, as defined in the transitional services and separation agreement, the Company will (i) pay to Mr. Angle the remainder of the base salary that Mr. Angle would have received had he remained in the role for the full 12 months and (ii) accelerate the vesting of Mr. Angle’s then-outstanding equity awards through March 12, 2025, in each case subject to Mr. Angle’s continued compliance with restrictive covenants and providing transitional services as requested by the interim chief executive officer or new chief executive officer for up to 20 hours per month. In addition, if a change in control occurs within three months after January 28, 2024, Mr. Angle will be eligible for the change in control benefits under his previous executive agreement, described above. The transition agreement also provides that Mr. Angle will be subject to
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 40
noncompetition and nonsolicitation restrictions in connection with his transition from the Company and includes a general release of claims from Mr. Angle in favor of the Company. The terms of the transitional services and separation agreement supersede any benefits for which Mr. Angle would have otherwise been eligible under any other agreement between Mr. Angle and the Company, including his executive agreement.
Additionally, as described above, Mr. Weinstein entered into an agreement to serve as the Company's interim chief executive officer.
Clawback Policy
In light of the SEC’s adoption of final clawback rules in October 2022 and the NASDAQ’s adoption of final listing standards consistent with the SEC rules in June 2023, we adopted an amended and restated clawback policy on August 1, 2023. Under the amended and restated clawback policy, if we are required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement under the securities laws, we must (subject to certain limited exceptions described in the policy and permitted by the final clawback rules) recover erroneously awarded compensation received by any current or former executive officer of the Company in the three fiscal years prior to the date we were required to restate our financial statements that is in excess of the amount that would have been received based on the restated financial statements.
Tax Deductibility of Executive Compensation
The new tax law signed into law December 22, 2017 made a number of significant changes to
Section 162(m) of the
Code. Section 162(m)Internal Revenue of
the Code1986, as amended (the "Code") generally places a $1 million limit on the amount of compensation a company can deduct in any one year for certain executive officers. While we consider tax deductibility as one factor in determining executive compensation, the compensation and talent committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by us for tax purposes.
The exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our named executive officers and certain other individuals in excess of $1 million will not be deductible unless it qualifies for the limited transition relief applicable to certain arrangements in place as of November 2, 2017.Despite our efforts to structure certain performance-based awards in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing the performance-based compensation exemption from the deduction limit, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) in fact will. Further, we reserve the right to modify compensation that was initially intended to be exempt from Section 162(m) if we determine that such modifications are consistent with our business needs.
We believe that
shareholderstockholder interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in
non-deductible compensation expenses.
Risk Oversight of Compensation Programs
The
As part of its annual review, the compensation and talent committee
annually reviews and determined that our compensation program for
executive officers isemployees are not structured to be reasonably likely to present a material adverse risk to us based on the following factors:
•Our compensation program for executive officers is designed to provide a balanced mix of cash and equity and annual and longer-term incentives, including compensation based on the achievement of performance targets.
•The base salary portion of compensation is designed to provide a steady income regardless of our stock price performance, so executives do not feel pressured to focus primarily on stock price performance to the detriment of other important business metrics.
•Our time-based restricted stock unitRSU grants generally vest over three or four years.
•Our PSUs vest only after the achievement ofif we achieve pre-determined significant long-term metrics designed to drive the long-term interests of our stockholders.
•PSU awards align the interests of our executive officers with the success of our business strategy.
•Maximum payout levels for cash and equity incentives are capped.
•We have adopted a clawback policy that applies to cash and equity incentive compensation.
•The compensation and talent committee engages an independent compensation consultant.
•Our executive incentive programs include multiple performance measurement periods.
•Our stock ownership guidelines align the interests of our executive officers with those of our stockholders.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
41
Compensation Consultant Independence
Pursuant to its charter, the compensation and talent committee has the sole authority to retain, terminate, obtain advice from, oversee and compensate its outside advisors, including its compensation consultant.
The compensation and talent committee retained
Pearl MeyerPay Governance as its independent executive compensation consultant for
2017. Pearl Meyer2023. Pay Governance reports directly to the compensation and talent committee, and the
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
compensation and talent committee may replace Pearl MeyerPay Governance or hireaugment Pay Governance by hiring additional consultants at any time. Pearl MeyerPay Governance attends meetings of the compensation and talent committee, as requested, and communicates with the chairmanchair of the compensation and talent committee between meetings; however, the committee or the full board of directors makes all decisions regarding the compensation of the Company’s executive officers.
Pearl Meyer
Pay Governance provides various executive compensation services to the compensation and talent committee with respect to our executive officers and other key employees at the compensation and talent committee’s request. The services
Pearl MeyerPay Governance provides include advising the compensation and talent committee on the principal aspects of the executive compensation program and evolving best practices and providing market information and analysis regarding the competitiveness of our program design and awards in
relationshiprelation to our performance.
The compensation and talent committee reviews the services provided by its outside consultants and believes
Pearl MeyerPay Governance is independent in providing executive compensation consulting services. The compensation and talent committee conducted a specific review of its relationship with
Pearl Meyer,Pay Governance, and determined
Pearl Meyer’sPay Governance’s work for the compensation and talent committee did not raise any conflicts of interest, consistent with the guidance provided under the Dodd-Frank Act and by the SEC and
NASDAQ.Nasdaq. In making this determination, the compensation and talent
committee notedconsidered the
following:following factors:Pearl Meyer
•That Pay Governance did not provide any services to us or our management other than service to the compensation and talent committee (including compensation benchmarking for our senior leadership team), and it itstheir services were limited to executive compensation consulting;
Fees•That fees paid by us to Pearl MeyerPay Governance represented less than 1.0% of Pearl Meyer’sPay Governance’s total revenue for the period January 20172023 through December 2017;2023;
Pearl Meyer•Pay Governance maintains a Conflictsan Independence Policy and an Insider Trading Policy which werethat is provided to the compensation and talent committee with specific policies and procedures designed to ensure independence;
None of the Pearl Meyer•That Pay Governance consultants on our account haddid not have any business or personal relationship with members of our compensation and talent committee members;committee;
None of the Pearl Meyer•That Pay Governance consultants on our account haddid not have any business or personal relationship with our executive officers; and
None of•That Pay Governance's Independence Policy prohibits the Pearl Meyer consultants on our account from directly ownowning shares of our stock.
The compensation and talent committee continues to monitor the independence of its compensation consultant on a periodic basis.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 42
Executive Compensation
Summary
The following table sets forth summary compensation information for our chief executive officer, chief financial officer,
and the three other most highly compensated executive
officers:officers serving as executive officer as of December 31, 2023:
SUMMARY COMPENSATION TABLE —
2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary
($)(1) | | | Stock
Awards
($)(2) | | | Option
Awards
($)(2) | | | Non-Equity
Incentive Plan
Compensation
($)(3) | | | All Other
Compensation
($)(4) | | | Total
($) | |
Colin M. Angle Chairman, Chief Executive
Officer and Director | | | 2017 2016 2015 | | | | 700,000 696,154 684,135 | | | | 4,153,559 2,472,244 1,996,260 | | | | — 807,409 646,548 | | | | 1,099,001 910,000 465,750 | | | | 8,782 7,950 7,950 | | | | 5,961,343 4,893,757 3,800,643 | |
| | | | | | | |
Alison Dean | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Executive Vice President,
Chief Financial Officer,
Treasurer and Principal
Accounting Officer | | | 2017 2016 2015 | | | | 460,000 455,385 433,654 | | | | 1,433,250 953,604 734,878 | | | | — 311,552 238,003 | | | | 541,650 448,500 222,525 | | | | 8,100 7,950 7,950 | | | | 2,443,000 2,176,991 1,637,010 | |
| | | | | | | |
Christian Cerda | | | 2017 | | | | 446,154 | | | | 1,384,520 | | | | — | | | | 529,875 | | | | 8,100 | | | | 2,368,649 | |
Chief Operating Officer | | | 2016 2015 | | | | 419,808 400,000 | | | | 1,151,228 878,938 | | | | 377,732 284,498 | | | | 378,220 165,600 | | | | 7,950 7,950 | | | | 2,334,938 1,736,986 | |
| | | | | | | |
Russell J. Campanello | | | 2017 | | | | 350,000 | | | | 742,424 | | | | — | | | | 329,700 | | | | 8,100 | | | | 1,430,224 | |
Executive Vice President,
Human Resources and
Corporate Communications | | | 2016 2015 | | | | 348,462 344,231 | | | | 428,335 399,595 | | | | 140,033 129,411 | | | | 273,000 140,760 | | | | 7,950 7,950 | | | | 1,197,780 1,021,947 | |
| | | | | | | |
Glen D. Weinstein | | | 2017 | | | | 380,000 | | | | 891,482 | | | | — | | | | 357,960 | | | | 8,100 | | | | 1,637,542 | |
Executive Vice President and
Chief Legal Officer | | | 2016 2015 | | | | 377,693 369,481 | | | | 583,496 399,595 | | | | 190,824 129,411 | | | | 296,400 151,110 | | | | 7,950 7,950 | | | | 1,456,365 1,057,547 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(4) | Total ($) |
| Colin Angle | | | | | | | |
| Former Chairman, Chief Executive Officer and Director | 2023 | 850,000 | — | 5,499,992 | — | 9,900 | 6,359,892 |
| 2022 | 850,000 | — | 5,071,127 | — | 9,150 | 5,930,277 |
| 2021 | 846,154 | — | 5,418,537 | — | 8,700 | 6,273,391 |
| | | | | | | |
| Julie Zeiler | | | | | | | |
Executive Vice President, Chief Financial Officer | 2023 | 500,000 | 125,000 | 1,724,999 | — | 9,900 | 2,359,899 |
| 2022 | 500,000 | — | 1,381,498 | — | 9,150 | 1,890,648 |
| | 2021 | 488,462 | — | 1,477,783 | — | 8,700 | 1,974,945 |
| | | | | | | |
| Glen Weinstein | | | | | | | |
| Interim Chief Executive Officer, and Former Executive Vice President and Chief Legal Officer | 2022 | 430,000 | 107,500 | 1,499,990 | — | 9,900 | 2,047,390 |
| 2022 | 430,000 | — | 1,197,313 | — | 9,150 | 1,636,463 |
| 2021 | 426,923 | — | 1,280,650 | — | 8,700 | 1,716,273 |
| | | | | | | |
| Russell J. Campanello | | | | | | | |
Executive Vice President, Human Resources and Corporate Communications | 2023 | 410,000 | 102,500 | 1,379,973 | — | 9,900 | 1,902,373 |
| | | | | | |
| | | | | | | |
Faris Habbaba (5) | | | | | | | |
| Executive Vice President, Chief Research and Development Officer | 2023 | 415,000 | — | 1,724,999 | — | 9,900 | 2,149,899 |
| 2022 | 415,000 | — | 1,381,498 | — | 9,150 | 1,805,648 |
| 2021 | 223,462 | 216,896 | 2,214,919 | — | 3,823 | 2,659,100 |
| | | | | |
| (1) | Represents salary earned in the fiscal years presented, which covered 52 weeks for fiscal year 20172023, 2022 and 20162021. |
| (2) | The amounts reported for Ms. Zeiler in the amount of $125,000, Mr. Weinstein in the amount of $107,500, & Mr. Campanello in the amount of $102,500 were payments made pursuant to the transaction bonus program of the merger agreement. The bonus program paid 25% of the transaction bonus on the six-month anniversary of the date of the merger agreement. The amount reported for Mr. Habbaba, represents a $75,000 sign-on bonus paid to him upon his hire and 53 weeksa guaranteed pro-rated target bonus for the 2021 fiscal year 2015.in the amount of $141,896, each payable pursuant to the terms of his employment. |
(2)(3) | Represents the aggregate grant date fair value for stock and option awards granted in the fiscal years ended December 30, 2017,2023, December 31, 20162022, and January 2, 2016,1, 2022, as applicable, in accordance with Financial Accounting Standards Board, Accounting Standards Codification Topic 718 (“ASC Topic 718”) disregarding any estimates of service-based forfeitures. For PSUs, the value reported includes the value of the award at the grant date based upon the probable outcome of the performance conditions. See the information appearing in note 1312 to our consolidated financial statements included as part of our Annual Report on Form10-K for the fiscal year ended December 30, 2017 for certain assumptions made in the valuation of stock and option awards. 10-K. |
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| (3) | | | | |
| (4) | Represents amounts paid in 2018, 2017 and 2016, respectively under the Company’s Senior Executive Incentive Compensation Plan for performance in the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016, as applicable. |
(4) | IncludesFor 2023, includes 401(k) matching contributions for each of our named executive officers. Excludesas set forth in the table below. The table excludes medical, group life insurance and certain other benefits received by the named executive officers that are available generally to all of our salaried employees. For |
| | | | | |
| 401(k) Matching Contributions ($) |
Colin M. Angle | 9,900 |
| Julie Zeiler | 9,900 |
| Glen Weinstein | 9,900 |
| Russell J. Campanello | 9,900 |
| Faris Habbaba | 9,900 |
| | | | | |
| (5) | Mr. Habbaba employment commenced on June 7, 2021, and the amount reported in the “Salary” column for 2017 also includes of the incremental cost to the Company of a Roomba Vacuum cleaner received by him.2021 represents his base salary earned in fiscal 2021. |
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Grants of Plan-Based Awards in 2023
The following table sets forth, for each of the named executive officers, information about grants of plan-based awards during fiscal year 2023:
GRANTS OF PLAN-BASED AWARDS — 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock and Option Awards ($) |
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) |
| Colin Angle | — | 244,375 | 977,500 | 1,955,000 | — | — | — | — | — |
| | 3/10/2023 | — | — | — | — | — | — | 125,199 | 5,499,992 |
| | — | — | — | — | — | — | — | — | — |
| Julie Zeiler | — | 93,750 | 375,000 | 750,000 | — | — | — | — | — |
| | 3/10/2023 | — | — | — | — | — | — | 39,267 | 1,724,999 |
| | — | — | — | — | — | — | — | — | — |
| Glen Weinstein | — | 80,625 | 322,500 | 645,000 | — | — | — | — | — |
| | 3/10/2023 | — | — | — | — | — | — | 34,145 | 1,499,990 |
| | — | — | — | — | — | — | — | — | — |
| Russel J. Campanello | — | 76,875 | 307,500 | 615,000 | — | — | — | — | — |
| | 3/10/2023 | — | — | — | — | — | — | 31,413 | 1,379,973 |
| | — | — | — | — | — | — | — | — | — |
| Faris Habbaba | — | 62,250 | 249,000 | 498,000 | — | — | — | — | — |
| 3/10/2023 | — | — | — | — | — | — | 39,267 | 1,724,999 |
| | — | — | — | — | — | — | — | — | — |
| | | | | |
| (1) | | | | Reflects the threshold, target and maximum incentive cash payout levels established under our SEICP. However, no amounts were actually earned or paid for fiscal year 2023. |
| (2) | As described above, we did not grant any PSUs in fiscal 2023 due to restrictions imposed by the Merger Agreement with Amazon. |
| (3) | 35 | | All stock awards granted were made pursuant to our 2018 Plan. |
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Outstanding Equity Awards at Fiscal Year End
The following table sets forth, for each of the named executive officers, information about unexercised option awards and other unvested equity awards that were held as of December 30, 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END — 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
| Colin Angle | 3/06/2020 | — | — | — | — | | 10,295 | 398,417 | — | — |
| | 3/12/2021 | — | — | — | — | | 9,081 | 351,435 | — | — |
| | 3/11/2022 | — | — | — | — | | 14,650 | 566,955 | 17,580 | 680,346 |
| | 3/10/2023 | — | — | — | — | | 125,199 | 4,845,201 | — | — |
| Julie Zeiler | 3/10/2017 | 5,950 | — | 57.33 | 3/10/2024 | | — | — | — | — |
| | 3/12/2021 | — | — | — | — | | 1,548 | 59,908 | — | — |
| | 3/11/2022 | — | — | — | — | | 2,996 | 115,945 | 3,995 | 154,607 |
| 3/10/2023 | — | — | — | — | | 22,906 | 886,462 | — | — |
| Glen Weinstein | 3/06/2020 | — | — | — | — | | 3,020 | 116,874 | — | — |
| | 3/12/2021 | — | — | — | — | | 2,682 | 103,793 | — | — |
| | 3/11/2022 | — | — | — | — | | 4,328 | 167,494 | 3,462 | 133,979 |
| | 3/10/2023 | — | — | — | — | | 34,145 | 1,321,412 | — | — |
| Russell J. Campanello | 3/06/2020 | — | — | — | — | | 2,469 | 95,550 | — | — |
| | 3/12/2021 | — | — | — | — | | 2,476 | 95,821 | — | — |
| 3/11/2022 | — | — | — | — | | 3,995 | 154,607 | 3,196 | 123,685 |
| 3/10/2023 | — | — | — | — | | 31,413 | 1,215,683 | — | — |
| Faris Habbaba | 6/11/2021 | — | — | — | — | | 5,778 | 223,609 | — | — |
| 3/11/2022 | — | — | — | — | | 2,996 | 115,945 | 3,995 | 154,607 |
| 3/10/2023 | — | — | — | — | | 22,906 | 886,462 | — | — |
| | | | | |
| (1) | Stock option grants vested over a four-year period, at a rate of twenty-five percent (25%) on the first anniversary of the grant date, and the remainder in equal quarterly installments thereafter. |
| (2) | RSU awards granted prior to 2022 vest over a four-year period, at a rate of twenty-five percent (25%) on each anniversary of the grant date. RSU awards granted in 2022 and after vest over a three-year period, with one-third (1/3) vesting on the one-year anniversary of the grant date, and the remaining two-thirds (2/3) vesting in eight equal quarterly installments over the remaining two years. |
| (3) | Amounts disclosed in this column were calculated based on the closing price of our common stock on December 29, 2023, the last business day of the fiscal year ended December 30, 2023, of $38.70. |
| (4) | PSU awards granted in 2022 are earned and vest at the end of one, two, and three-year performance periods. For additional information on the PSU awards, see the section above entitled “Compensation Discussion and Analysis — Elements of Compensation — Long-Term Incentives.” |
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Option Exercises and Stock Vested
The following table sets forth, for each of the named executive officers, information with respect to the exercise of stock options and the vesting of RSU awards and PSU awards during the year ended December 30, 2023.
OPTION EXERCISES AND STOCK VESTED — 2023
| | | | | | | | | | | | | | | | | |
| | Option Awards | | Stock Awards |
| Name | Number of Shares Acquired on Exercise(#) | Value Realized on Exercise($)(1) | | Number of Shares Acquired on Vesting(#)(2) | Value Realized on Vesting($)(3) |
| Colin Angle | 36,013 | 1,535,594 | | 52,277 | 2,235,611 |
| Julie Zeiler | — | — | | 39,415 | 1,584,659 |
| Glen Weinstein | — | — | | 13,887 | 592,067 |
| Russell J. Campanello | — | — | | 12,369 | 527,091 |
| Faris Habbaba | — | — | | 39,464 | 1,568,253 |
| | | | | |
| (1) | Amounts disclosed in this column were calculated based on the difference between the fair market value of our common stock on the date of exercise and the exercise price of the options in accordance with regulations promulgated under the Exchange Act. |
| (2) | Ms. Zeiler and Mr. Habbaba had RSUs accelerated on December 29, 2023, subject to a claw-back, because it was identified they may have exceed their respective thresholds under Section 280G of the Code as a result of potential payments in connection with the planned merger with Amazon. Ms. Zeiler had 23,985 RSUs accelerated, with a value realized of $928,220 on vesting. Mr. Habbaba had 24,137 RSUs accelerated, with a value realized of $934,102 on vesting. |
| (3) | Amounts disclosed in this column were calculated based on the fair market value of the shares on the vesting date. |
Potential Benefits Upon Termination or Change in Control
Severance and Change in Control Arrangements in General
The Company has entered into executive agreements with each of the named executive officers and a transitional services and separation agreement with Mr. Angle, the terms of which are described in further detail in the “Compensation Discussion and Analysis” section above.
Cash Payments and/or Acceleration of Vesting Following Certain Termination Events
Assuming the employment of our named executive officers was terminated without cause (not in connection with a change in control) on December 31, 2023, our named executive officers would be entitled to cash payments in the amounts set forth opposite their names in the table below, subject to any deferrals required under Section 409A of the Code.
| | | | | | | | | | | |
| | Base Salary ($) | Continuation of Health Plan Premium Payments ($) | Total ($) |
| Colin Angle | 425,000 | 16,617 | 441,617 |
| Julie Zeiler | 250,000 | 11,352 | 261,352 |
| Glen Weinstein | 215,000 | 12,602 | 227,602 |
| Russell J. Campanello | 205,000 | 16,617 | 221,617 |
| Faris Habbaba | 207,500 | 4,201 | 211,701 |
Assuming the employment of our named executive officers was terminated by the Company without cause during the period beginning on the date that is 45 days prior to the date of the public announcement of the execution of a definitive agreement for a change in control and ending on the first anniversary of the effective date of the change in control, or such officers resigned with good reason during the one-year period following a change in control and such termination or resignation occurred on December 30, 2023, our named executive officers would be entitled to cash payments in the amounts set forth opposite their names in the below table, subject to any delay in payment required under
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Section 409A of the Code, and acceleration of vesting as set forth in the table below. The total amount payable to each executive officer may be subject to reduction in certain circumstances if the amount would cause the executive officer to incur an excise tax under Section 4999 of the Code. The following table provides the market value (that is, the value based upon our stock price on December 29, 2023) of RSUs or PSUs that would become exercisable or vested as a result of these acceleration events as of December 30, 2023.
| | | | | | | | | | | | | | | | | | | | |
| Name | Base Salary ($) | Bonus ($) | Continuation of Health Plan Premium Payments ($) | Market Value of Stock Options ($) | Market Value of RSUs and PSUs ($) | Total ($) |
| Colin Angle | 1,700,000 | 1,955,000 | 66,470 | — | 8,577,081 | 12,298,551 |
| Julie Zeiler | 1,000,000 | 750,000 | 45,409 | — | 1,611,158 | 3,406,567 |
| Glen Weinstein | 860,000 | 645,000 | 50,407 | — | 2,185,234 | 3,740,641 |
| Russell J. Campanello | 820,000 | 615,000 | 66,470 | — | 2,000,713 | 3,502,183 |
Faris Habbaba | 830,000 | 498,000 | 16,802 | — | 1,535,229 | 2,880,031 |
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is required to disclose the
median of the annual total compensation of our
employeesmedian employee (excluding our chief executive officer), the annual total compensation of our principal executive officer
Chairman of the Board and chief executive officer, Colin M. Angle, and the ratio of these two amounts.
The Company selected December 30, 2017,2023, the last day of our most recently-completedrecently completed fiscal year, as the date upon which the median employee was identified. As of this date, the Company employed 7641,113 employees globally, excluding 77 individuals that became employees as a result of the April 2017 acquisition of Sales On Demand Corporation and 92 individuals that became employees as a result of the October 2017 acquisition of Robopolis.globally. The Company included all of our other full-time employees, part-time employees and interns, excluding the chief executive officer, in our analysis to identify the median employee. The Company did not elect to make any other exclusions as permitted under the SEC de minimis rule.
A Consistently Applied Compensation Measure was used to identify the median employee based on the sum of base pay/regular wages, overtime, bonus, commissions and equity grant date fair value. The Company elected to include bonus payments and equity awards given the broad participation rates in these programs across the employee population. Annualized salary rates for full-time employees and hourly pay rates and actual hours worked were used as reasonable estimates of salary/wages.
Using the compiled data, the Company determined that the 20172023 annual total compensation of our median employee as of December 30, 2017 was $134,822 And2023 was $130,493and Mr. Angle’s annual total compensation for 20172023 was $5,961,343,$6,359,892, both of which were calculated in accordance with Item 402(c) of RegulationS-K. The ratio of these amounts was 44:49:1.
Pay Versus Performance
The following table shows the total compensation as set forth in the Summary Compensation Table and “compensation actually paid,” calculated in accordance with Item 402(v) of Regulation S-K of our principal executive officer (“PEO”) and, on an average basis, our other named executive officers for the past four fiscal years, our TSR, the TSR of our 2023 peer group used for compensation benchmarking over the same period, our net income, and Company-Selected Measure, which is the Company’s TSR relative to the Index, calculated in the manner used for the PSUs granted to the NEOs in 2022. To further help understand the TSR relationship, we have included supplemental disclosure showing percentile rank as a parenthetical vs. the Index constituents.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (1)(3)(4) | Value of Initial Fixed $100 Investment Based On: | Net Income (dollars in thousands) | | | |
| Company TSR | Peer Group TSR (5) | Relative TSR vs. Russell 2000 Index (6) |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) |
| 2023 | $ | 6,359,892 | | $ | 3,988,330 | | $ | 2,114,890 | | $ | 1,498,124 | | $ | 76.44 | | $ | 121.26 | | $ | (304,710) | | (35) | | % | (~P23) |
| 2022 | $ | 5,930,277 | | $ | 3,742,696 | | $ | 1,834,495 | | $ | 1,238,722 | | $ | 95.06 | | $ | 89.87 | | $ | (286,295) | | (13) | | % | (~P43) |
| 2021 | $ | 6,273,391 | | $ | (3,096,075) | | $ | 2,061,594 | | $ | (424,081) | | $ | 130.12 | | $ | 167.11 | | $ | 30,390 | | (33) | | % | (~P25) |
| 2020 | $ | 6,192,685 | | $ | 14,450,419 | | $ | 1,701,843 | | $ | 3,441,952 | | $ | 158.58 | | $ | 174.29 | | $ | 147,068 | | 51 | | % | (~P87) |
Grants
1.SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay Versus Performance Table. Compensation actually paid does not necessarily represent cash and/or equity value transferred to the applicable named executive officer without restriction, but rather is a value calculated in accordance with Item 402(v) of Plan-Based Awards in 2017Regulation S-K.
2.The following table sets forth,tables show the adjustments made to our PEO’s total compensation as reported in the Summary Compensation Table to calculate “compensation actually paid” for each of the named executive officers, information about grants of plan-based awards during fiscal year 2017:GRANTS OF PLAN-BASED AWARDS — 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1) | | | Estimated Future Payouts Under
Equity Incentive Plan
Awards(2) | | | All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3) | | | Grant
Date Fair
Value of Stock
and Option
Awards
($) | |
Name | | Grant
Date | | | Threshold
($) | | | Target
($) | | | Maximum
($) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | | |
Colin M. Angle | | | — | | | | 87,500 | | | | 700,000 | | | | 1,400,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 36,225 | | | | 2,076,779 | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | 18,112 | | | | 36,225 | | | | 72,450 | | | | — | | | | 2,076,779 | |
Alison Dean | | | — | | | | 43,125 | | | | 345,000 | | | | 690,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 12,500 | | | | 716,625 | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | 6,250 | | | | 12,500 | | | | 25,000 | | | | — | | | | 716,225 | |
Christian Cerda | | | — | | | | 42,188 | | | | 337,500 | | | | 675,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 12,075 | | | | 692,260 | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | 6,037 | | | | 12,075 | | | | 24,150 | | | | — | | | | 692,260 | |
Russell J. Campanello | | | — | | | | 26,250 | | | | 210,000 | | | | 420,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6,475 | | | | 371,212 | |
| | | 3/10/2017 | | | | — | | | | — | | | | — | | | | 3,237 | | | | 6,475 | | | | 12,950 | | | | — | | | | 371,212 | |
Glen D. Weinstein | | | — | | | | 28,500 | | | | 228,000 | | | | 456,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/11/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,775 | | | | 445,741 | |
| | | 3/11/2017 | | | | — | | | | — | | | | — | | | | 3,887 | | | | 7,775 | | | | 15,550 | | | | — | | | | 445,741 | |
(1) | This reflects the threshold, target and maximum incentive cash payout levels established under our Senior Executive Incentive Compensation Plan. The actual amounts paid for fiscal year 2017 are disclosed in the“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
(2) | This reflects the threshold, target and maximum equity incentive payout levels associated with PSUs made pursuant to our 2015 Stock Plan, which amounts will be payable in shares of our common stock, if the performance metrics are achieved under the terms of the awards. |
(3) | All stock awards were made pursuant to the 2015 Stock Plan. |
year:
PEO Summary Compensation Table Total to Compensation Actually Paid Reconciliation
| | | | | | | | | | | | | | |
| Year | Summary Compensation Table Total | Deductions from Summary Compensation Table Total | Additions to Summary Compensation Table Total | Compensation Actually Paid |
|
| 2023 | $ | 6,359,892 | | $ | (7,216,763) | | $ | 4,845,201 | | $ | 3,988,330 | |
| 2022 | $ | 5,930,277 | | $ | (5,923,915) | | $ | 3,736,334 | | $ | 3,742,696 | |
| 2021 | $ | 6,273,391 | | $ | (12,744,963) | | $ | 3,375,498 | | $ | (3,096,075) | |
| 2020 | $ | 6,192,685 | | $ | (4,396,024) | | $ | 12,653,758 | | $ | 14,450,419 | |
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The following table sets forth,below further details the adjustments made to the PEO’s Summary Compensation Table totals to determine “compensation actually paid” for each of the PEO:
| | | | | | | | | | | | | | | | | |
| PEO | 2023 | 2022 | 2021 | 2020 |
Summary Compensation Table (“SCT”) Total | $ | 6,359,892 | | $ | 5,930,277 | | $ | 6,273,391 | | $ | 6,192,685 | |
| Deduction for Amounts Reported Under the "Stock Awards" Column in the SCT | $ | (5,499,992) | | $ | (5,071,127) | | $ | (5,418,537) | | $ | (3,851,977) | |
| Deduction for Amounts Reported Under the "Option Awards" Column in the SCT | $ | — | | $ | — | | $ | — | | $ | — | |
| Increase in Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | $ | 4,845,201 | | $ | 3,736,334 | | $ | 1,196,578 | | $ | 9,919,027 | |
| Increase in Fair Value of Awards Granted During Year that Vested During Year | $ | — | | $ | — | | $ | — | | $ | — | |
| Increase/Decrease in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End | $ | (1,436,291) | | $ | (708,083) | | $ | (7,326,426) | | $ | 2,734,731 | |
| Increase/Decrease in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vested During Year | $ | (280,481) | | $ | (144,705) | | $ | 2,178,919 | | $ | (544,047) | |
| Deduction of Fair Value of Awards Granted Prior to Year that were Forfeited During the Year | $ | — | | $ | — | | $ | — | | $ | — | |
| Increase Based Upon Incremental Fair Value of Awards Modified During Year | $ | — | | $ | — | | $ | — | | $ | — | |
| Increase Based on Dividends or other Earnings Paid During Year Prior to Vesting Date of Award | $ | — | | $ | — | | $ | — | | $ | — | |
| Total Additions | $ | 4,845,201 | | $ | 3,736,334 | | $ | 3,375,498 | | $ | 12,653,758 | |
| Total Deductions | $ | (7,216,763) | | $ | (5,923,915) | | $ | (12,744,963) | | $ | (4,396,024) | |
| Total Adjustments | $ | (2,371,562) | | $ | (2,187,581) | | $ | (9,369,466) | | $ | 8,257,734 | |
| Compensation Actually Paid | $ | 3,988,330 | | $ | 3,742,696 | | $ | (3,096,075) | | $ | 14,450,419 | |
3.Amounts represent average total compensation reported in the Summary Compensation Table and average “compensation actually paid” to our named executive officers information about unexercised option awards and other unvested equity awards that were held(excluding our PEO) for the relevant fiscal year, which includes the individuals indicated in the table below for each fiscal year:
| | | | | | | | |
| Year | | Non-PEO NEO's |
| 2023 | | Julie Zeiler, Glen Weinstein, Russell Campanello, and Faris Habbaba |
| 2022 | | Julie Zeiler, Glen Weinstein, Jean Jacques Blanc, and Faris Habbaba |
| 2021 | | Julie Zeiler, Glen Weinstein, Jean Jacques Blanc, and Faris Habbaba |
| 2020 | | Julie Zeiler, Alison Dean, Glen Weinstein, Tim Saeger, Keith Hartsfield, and Russell Campanello |
4.The following tables shows the adjustments made to the average Summary Compensation Table totals of our named executive officers (excluding our PEO) as of December 30, 2017.OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END — 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Option Awards | | | Stock Awards | |
Name | | Grant
Date | | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number
of
Shares or
Units of
Stock That
Have Not
Vested
(#)(3) | | | Market Value
of
Shares or
Units of
Stock
That Have
Not
Vested
($)(4) | | | Equity
Incentive Plan
Awards;
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(5) | | | Equity
Incentive Plan
Awards;
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(4) | |
Colin M. Angle | | | 3/9/2012 | | | | 40,825 | | | | — | | | $ | 26.59 | | | | 3/9/2019 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/8/2013 | | | | 36,175 | | | | — | | | $ | 22.86 | | | | 3/8/2020 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/7/2014 | | | | 14,508 | | | | 967 | | | $ | 43.35 | | | | 3/7/2021 | | | | 6,775 | | | | 519,643 | | | | — | | | | — | |
| | | 6/6/2014 | | | | 18,469 | | | | 1,231 | | | $ | 35.43 | | | | 6/6/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/6/2015 | | | | 15,977 | | | | 7,261 | | | $ | 34.30 | | | | 3/6/2022 | | | | 38,800 | | | | 2,975,960 | | | | — | | | | — | |
| | | 6/5/2015 | | | | 14,595 | | | | 8,755 | | | $ | 32.38 | | | | 6/5/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/11/2016 | | | | 15,756 | | | | 20,257 | | | $ | 33.14 | | | | 3/11/2023 | | | | 53,877 | | | | 4,132,366 | | | | 8,289 | | | | 635,766 | |
| | | 6/10/2016 | | | | 11,607 | | | | 19,343 | | | $ | 37.62 | | | | 6/10/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | | | | | | | | | | | | | | | | | 36,225 | | | | 2,778,458 | | | | 18,112 | | | | 1,389,190 | |
| | | | | | | | | |
Alison Dean | | | 3/7/2014 | | | | 318 | | | | 319 | | | $ | 43.35 | | | | 3/7/2021 | | | | 2,233 | | | | 171,271 | | | | — | | | | — | |
| | | 6/6/2014 | | | | 406 | | | | 406 | | | $ | 35.43 | | | | 6/6/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/6/2015 | | | | 534 | | | | 2,671 | | | $ | 34.30 | | | | 3/6/2022 | | | | 14,283 | | | | 1,095,506 | | | | — | | | | — | |
| | | 6/5/2015 | | | | 537 | | | | 3,225 | | | $ | 32.38 | | | | 6/5/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/11/2016 | | | | 868 | | | | 7,812 | | | $ | 33.14 | | | | 3/11/2023 | | | | 20,781 | | | | 1,593,903 | | | | 3,198 | | | | 245,287 | |
| | | 6/10/2016 | | | | 747 | | | | 7,468 | | | $ | 37.62 | | | | 6/10/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | $ | — | | | | | | | | 12,500 | | | | 958,750 | | | | 6,250 | | | | 479,375 | |
| | | | | | | | | |
| Russell J. Campanello | | | 3/9/2012 | | | | 5,500 | | | | — | | | $ | 26.59 | | | | 3/9/2019 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/8/2013 | | | | 6,450 | | | | — | | | $ | 22.86 | | | | 3/8/2020 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/7/2014 | | | | 4,617 | | | | 308 | | | $ | 43.35 | | | | 3/7/2021 | | | | 2,154 | | | | 165,212 | | | | — | | | | — | |
| | | 6/6/2014 | | | | 5,883 | | | | 392 | | | $ | 35.43 | | | | 6/6/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/6/2015 | | | | 3,198 | | | | 1,452 | | | $ | 34.30 | | | | 3/6/2022 | | | | 7,766 | | | | 595,652 | | | | — | | | | — | |
| | | 6/5/2015 | | | | 2,923 | | | | 1,752 | | | $ | 32.38 | | | | 6/5/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | �� 3/11/2016 | | | | 2,730 | | | | 3,508 | | | $ | 33.14 | | | | 3/11/2023 | | | | 9,334 | | | | 715,918 | | | | 1,436 | | | | 110,141 | |
| | | 6/10/2016 | | | | 2,016 | | | | 3,359 | | | $ | 37.62 | | | | 6/10/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | $ | — | | | | | | | | 6,475 | | | | 496,633 | | | | 3,237 | | | | 248,278 | |
| | | | | | | | | |
Christian Cerda | | | 3/7/2014 | | | | 2,966 | | | | 197 | | | $ | 43.35 | | | | 3/7/2021 | | | | 2,081 | | | | 159,613 | | | | — | | | | — | |
| | | 6/6/2014 | | | | 3,774 | | | | 251 | | | $ | 35.43 | | | | 6/6/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/6/2015 | | | | 7,030 | | | | 3,195 | | | $ | 34.30 | | | | 3/6/2022 | | | | 17,083 | | | | 1,310,266 | | | | — | | | | — | |
| | | 6/5/2015 | | | | 6,423 | | | | 3,852 | | | $ | 32.38 | | | | 6/5/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/11/2016 | | | | 4,961 | | | | 6,377 | | | $ | 33.14 | | | | 3/11/2023 | | | | 16,972 | | | | 1,301,752 | | | | 2,611 | | | | 200,264 | |
| | | 6/10/2016 | | | | 5,485 | | | | 9,140 | | | $ | 37.62 | | | | 6/10/2023 | | | | 7,150 | | | | 548,405 | | | | 1,100 | | | | 84,370 | |
| | | 9/9/2016 | | | | 1,493 | | | | 3,282 | | | $ | 39.09 | | | | 9/9/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | $ | — | | | | | | | | 12,075 | | | | 926,153 | | | | 6,037 | | | | 463,038 | |
| | | | | | | | | |
Glen D. Weinstein | | | 3/7/2014 | | | | 2,637 | | | | 176 | | | $ | 43.35 | | | | 3/7/2021 | | | | 1,233 | | | | 94,571 | | | | — | | | | — | |
| | | 6/6/2014 | | | | 3,352 | | | | 223 | | | $ | 35.43 | | | | 6/6/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/6/2015 | | | | 3,198 | | | | 1,452 | | | $ | 34.30 | | | | 3/6/2022 | | | | 7,766 | | | | 595,652 | | | | — | | | | — | |
| | | 6/5/2015 | | | | 2,923 | | | | 1,752 | | | $ | 32.38 | | | | 6/5/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/11/2016 | | | | 3,719 | | | | 4,781 | | | $ | 33.14 | | | | 3/11/2023 | | | | 12,716 | | | | 975,317 | | | | 1,953 | | | | 149,795 | |
| | | 6/10/2016 | | | | 2,748 | | | | 4,577 | | | $ | 37.62 | | | | 6/10/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 3/10/2017 | | | | — | | | | — | | | $ | — | | | | | | | | 7,775 | | | | 596,343 | | | | 3,887 | | | | 298,133 | |
reported in the Summary Compensation Table to calculate “compensation actually paid” for each fiscal year:
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 50
(1) | Except as otherwise noted, stock option grants vest over a four-year period, at a rate of twenty-five percent (25%) on the first anniversary of the grant date, and the remainder in equal quarterly installments thereafter. |
(2) | Stock options granted on June 6, 2014 vest at a rate of twenty-five percent (25%) on March 7, 2015, and the remainder in equal quarterly installments over the following three-year period. |
(3) | Restricted stock unit awards vest over a four-year period, at a rate of twenty-five percent (25%) on each anniversary of the grant date. |
(4) | Amounts disclosed in this column were calculated based on the closing price of our common stock on December 29, 2017, the last business date of the fiscal year ended December 30, 2017. |
(5) | PSU awards for plan years 2015 and 2016 are earned over a three-year period and vest at the end of such three-year period, dependent on achievement ofpre-established performance goals and objectives. For plan year 2017 PSUs will be earned and vest at the end of a three-year cumulative period. For additional information on the PSU awards, see the section above entitled “Compensation Discussion and Analysis — Elements of Compensation — Long-Term Incentives.” |
Option Exercises and Stock VestedThe following table sets forth, for eachTable of the named executive officers, information with respect to the exercise of stock options and the vesting of restricted stock unit awards and PSUs during the year ended December 30, 2017.
OPTION EXERCISES AND STOCK VESTED — 2017
| | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| | | | |
Name | | Shares
Acquired on
Exercise(#) | | Value
Realized on
Exercise($)
(1) | | Number of Shares
Acquired on
Vesting(#) | | Value
Realized on
Vesting($)
(2) |
Colin M. Angle | | | 45,200 | | | | 2,105,335 | | | | 59,021 | | | | 3,328,096 | |
Alison Dean | | | 54,827 | | | | 3,231,633 | | | | 21,042 | | | | 1,344,567 | |
Christian Cerda | | | 60,000 | | | | 4,629,120 | | | | 19,419 | | | | 1,167,656 | |
Russell J. Campanello | | | 10,000 | | | | 604,700 | | | | 13,515 | | | | 760,810 | |
Glen D. Weinstein | | | 18,837 | | | | 1,364,667 | | | | 11,536 | | | | 650,685 | |
(1) | Amounts disclosed in this column were calculated based on the difference between the fair market value of our common stock on the date of exercise and the exercise price of the options in accordance with regulations promulgated under the Exchange Act. |
(2) | Amounts disclosed in this column were calculated based on the fair market value of the shares on the date of settlement following vesting. |
ContentsPotential Benefits Upon Termination or Change in Control
Severance and Change in Control Arrangements in General
The Company has entered into executive agreements with each of the named executive officers, the terms of which are described in the “Compensation Discussion and Analysis” section above.
| | | | | | | | | | | | | | |
| Year | Summary Compensation Table Total | Deductions from Summary Compensation Table Total | Additions to Summary Compensation Table Total | Compensation Actually Paid |
|
| 2023 | $ | 2,114,890 | | $ | (1,890,979) | | $ | 1,274,213 | | $ | 1,498,124 | |
| 2022 | $ | 1,834,495 | | $ | (1,559,090) | | $ | 963,316 | | $ | 1,238,722 | |
| 2021 | $ | 2,061,594 | | $ | (3,410,738) | | $ | 925,062 | | $ | (424,081) | |
| 2020 | $ | 1,701,843 | | $ | (1,005,287) | | $ | 2,745,396 | | $ | 3,441,952 | |
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 51
Cash Payments and/or Acceleration
The table below further details the employment ofadjustments to determine the average “compensation actually paid” to our named executive officers (excluding our PEO):
| | | | | | | | | | | | | | | | | |
| Average of Named Executive Officers Excluding the PEO | 2023 | 2022 | 2021 | 2020 |
| Summary Compensation Table (“SCT”) Total | $ | 2,114,890 | | $ | 1,834,495 | | $ | 2,061,594 | | $ | 1,701,843 | |
| Deduction for Amounts Reported Under the "Stock Awards" Column in the SCT | $ | (1,582,490) | | $ | (1,277,879) | | $ | (1,551,209) | | $ | (879,042) | |
| Deduction for Amounts Reported Under the "Option Awards" Column in the SCT | $ | — | | $ | — | | $ | — | | $ | — | |
| Increase in Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | $ | 1,077,505 | | $ | 963,316 | | $ | 656,017 | | $ | 2,263,576 | |
| Increase in Fair Value of Awards Granted During Year that Vested During Year | $ | — | | $ | — | | $ | — | | $ | — | |
| Increase/Decrease in Fair Value from Prior Year-end to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End | $ | (308,489) | | $ | (216,785) | | $ | (1,859,528) | | $ | 415,362 | |
| Increase/Decrease in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vested During Year | $ | 196,708 | | $ | (64,425) | | $ | 269,045 | | $ | (30,359) | |
| Deduction of Fair Value of Awards Granted Prior to Year that were Forfeited During the Year | $ | — | | $ | — | | $ | — | | $ | (95,886) | |
| Increase Based Upon Incremental Fair Value of Awards Modified During Year | $ | — | | $ | — | | $ | — | | $ | 66,458 | |
| Increase Based on Dividends or other Earnings Paid During Year Prior to Vesting Date of Award | $ | — | | $ | — | | $ | — | | $ | — | |
| Total Additions | $ | 1,274,213 | | $ | 963,316 | | $ | 925,062 | | $ | 2,745,396 | |
| Total Deductions | $ | (1,890,979) | | $ | (1,559,090) | | $ | (3,410,738) | | $ | (1,005,287) | |
| Total Adjustments | $ | (616,766) | | $ | (595,773) | | $ | (2,485,675) | | $ | 1,740,109 | |
| Compensation Actually Paid | $ | 1,498,124 | | $ | 1,238,722 | | $ | (424,081) | | $ | 3,441,952 | |
5.We used the 2023 peer group used for compensation benchmarking purposes to illustrate the value of initial fixed $100 investment.
As of December 31, 2023, there were sixteen companies in our 2023 peer group used for compensation benchmarking purposes, which are: 3D Systems Corporation, Alarm.com Holdings, Inc., Corsair Gaming, Inc., Dolby Laboratories, Inc., Faro Technologies, Inc., Garmin Ltd., GoPro, Inc., Logitech International S.A., NETGEAR, Inc., Novanta Inc., Plantronics, Inc., Roku, Inc., Sonos, Inc., Trimble Inc., Universal Electronics Inc., and VIZIO Holding Corp. From the prior years peer group, we removed Azenta Inc., and Coherent Corp as the Azenta business model shifted primarily to life science tools and services, and Coherent Corp was terminated without cause (notacquired by II-VI on July 1st, 2022. Plantronics, Inc. was acquired by HP, Inc. on August 29, 2022 after we had set the 2023 Peer Group. We added Corsair Gaming and Vizio Holding Corp., both of whom focus on high tech products for consumers and meet several of our key criteria discussed in connection with a changethe Compensation Discussion and Analysis. For the prior year’s peer group, the TSR based on the value of an initial fixed $100 on 12/31/2019, is $176.01 in control)2020, $173.33 in 2021, $93.83 in 2022, and 126.03 in 2023. The TSR of the 2023 peer group is provided in the table above on December 30, 2017,page 32.
6.Relative TSR is defined as the percentage by which our TSR is greater than or less than the Russell 2000 Index. While we consider numerous financial and non-financial performance measures for the purpose of evaluating and determining executive compensation, we consider relative TSR against the Index (which is the primary measure used to determine for the number of PSUs earned for purposes of the 2022 PSU awards) to be the most important performance measure used by the Company to link compensation actually paid to the named executive officers would be entitledfor fiscal year 2023 to cash paymentsCompany performance.
Narrative to Relationship Between "Compensation Actually Paid" and Performance Measures
We use a mix of performance measures in
the amounts set forth opposite their names in the table below, subjectour annual and long-term incentive programs to
any deferrals required under Section 409A of the Code. | | | | | | | | | | | | | | | | | | |
Name | | | | Base
Salary
($) | | | | Continuation of
Health Plan
Premium
Payments ($) | | | | Total ($) |
Colin M. Angle | | | | | 350,000 | | | | | | 13,526 | | | | | | 363,526 | |
Alison Dean | | | | | 230,000 | | | | | | 12,069 | | | | | | 242,069 | |
Christian Cerda | | | | | 225,000 | | | | | | 13,526 | | | | | | 238,526 | |
Russell J. Campanello | | | | | 175,000 | | | | | | 13,526 | | | | | | 188,526 | |
Glen D. Weinstein | | | | | 190,000 | | | | | | 12,069 | | | | | | 202,069 | |
Assuming the employment of ouralign executive pay with Company performance. Our named executive officers was terminated byofficers’ target total compensation is heavily weighted towards short and long-term performance with performance goals aligned with stockholders’ interest. We believe the Company without cause during the period beginning on the date that is 45 days prior to the date of the public announcement of the execution of a definitive agreement for a change in control and ending on the first anniversary of the effective date of the change in control, or such officers resigned with good reason during theone-year period following a change in control and that such termination or resignation occurred on December 30, 2017, our named executive officers would be entitled to cash payments in the amounts set forth opposite their names in the below table, subject to any delay in payment required under Section 409A of the Code, and acceleration of vesting as set forth in the table below. The total amount payable to each executive officer may be subject to reduction in certain circumstances if the amount would cause the executive officer to incur an excise tax under Section 4999 of the Code. The following table provides the market value (that is, the value based upon our stock price on December 29, 2017, minus the exercise price, if any) of stock options and restricted stock units that would become exercisable or vested as a result of these acceleration events as of December 30, 2017.
| | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Base
Salary
($) | | Bonus
($) | | Continuation
of Health
Plan
Premium
Payments
($) | | Market
Value of
Stock
Options
($) | | Market
Value of
Restricted
Stock and
Restricted
Stock Units
($) | | Total
($) |
Colin M. Angle | | | 1,400,000 | | | | 1,400,000 | | | | 54,104 | | | | 2,417,260 | | | | 7,746,913 | | | | 12,918,277 | |
Alison Dean | | | 920,000 | | | | 690,000 | | | | 48,276 | | | | 915,717 | | | | 2,781,219 | | | | 5,355,212 | |
Christian Cerda | | | 900,000 | | | | 675,000 | | | | 54,104 | | | | 1,081,527 | | | | 3,021,750 | | | | 5,732,381 | |
Russell J. Campanello | | | 700,000 | | | | 420,000 | | | | 54,104 | | | | 449,741 | | | | 1,455,306 | | | | 3,079,151 | |
Glen D. Weinstein | | | 760,000 | | | | 456,000 | | | | 48,276 | | | | 541,416 | | | | 1,664,620 | | | | 3,470,312 | |
Pay Versus
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement
52
Performance tables show the alignment between compensation actually paid to the named executive officers and the Company’s performance, consistent with our compensation philosophy as described in our CD&A on page 36. Specifically, a large portion of the named executive officers’ potential compensation for 2023 was based on relative TSR against the Index and as such the PEO and non-PEO named executive officers’ “compensation actually paid” each year was generally aligned with our relative TSR performance and increased when our relative TSR performance increased but declined when our relative TSR performance declined. Our revenue and operating income performance over the period also generally align with compensation actually paid.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
53
As shown in the Pay Versus Performance table, the Company’s net income has decreased and the PEO and other named executive officers’ compensation actually paid declined significantly in 2021 from 2020 with some recovery in 2022 and 2023. This is due in large part to the significant emphasis the Company places on equity incentives, which are sensitive to changes in stock price. The Company does not use net income to determine compensation levels or incentive plan payouts.
As outlined in our Compensation Discussion and Analysis on page 32 we do not have any true consumer robotic peer companies that are publicly traded. The pandemic created some volatility within our peer group’s TSR and while our TSR performance was behind the peer group the end of 2020 and 2021, our TSR recovered in 2022 with the announced planned acquisition of iRobot by Amazon in August of 2022, and our TSR fell behind the peer group by the end of 2023 with speculative news at the end of 2023 that the deal with Amazon may be blocked by regulators. This performance generally aligned well with compensation actually paid to our named executive officers.
The table below compares the cumulative four-year total shareholder return of iRobot's common stock with the cumulative total shareholder return of a customized peer group of fifteen companies that includes: 3D Systems Corporation, Alarm.com Holdings, Inc., Corsair Gaming, Inc., Dolby Laboratories, Inc., Faro Technologies, Inc., Garmin Ltd., GoPro, Inc., Logitech International S.A., NETGEAR, Inc., Novanta, Inc., Roku, Inc. , Sonos, Inc. , Trimble Inc., Universal Electronics Inc. and VIZIO Holding Corp. The table assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on 12/31/2019 and tracks it through 12/31/2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 12/19 | | 12/20 | | 12/21 | | 12/22 | | 12/23 |
| iRobot Corporation | | | 100.00 | | 158.58 | | 130.12 | | 95.06 | | 76.44 |
| Peer Group | | | 100.00 | | 174.29 | | 167.11 | | 89.87 | | 121.26 |
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
54
As required by SEC rules, the three performance measures listed below represent the most important metrics we used to link “compensation actually paid” to Company performance for 2023. As further explanation of how these performance metrics are used to determine each named executive officer’s compensation is described in our Compensation Discussion and Analysis within the sections titled “Cash Incentive Compensation” and “Long-Term Incentives.”
| | |
| Most Important Performance Measures |
•Relative Total Shareholder Return |
•Non-GAAP Operating Income loss (1) |
40 | | •Revenue |
| | | | | |
| (1) | When reconciling to GAAP operating income loss, non-GAAP operating income (loss) reflects adjustments for amortization of acquired tangible assets, stock-based compensation, tariff refunds, net merger, acquisition, and divestiture expense (income), and restructuring/other. |
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
55
To further show the alignment of pay and performance, we have shown our PEO’s realizable pay over the past three years to supplement the Pay Versus Performance table. This shows a similar story to compensation actually paid, where pay has fallen below target when we fall short of compensatory performance goals.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
56
In connection with our efforts to attract and retain
highly-qualifiedhighly qualified individuals to serve on our board of directors, we maintain a cash and equity compensation policy for our
non-employee members of our board of directors. In fiscal year
2017,2023, each
non-employee member of our board of directors was entitled to the following cash compensation:
| | | | | |
Annual retainer for Boardboard membership | | | $ 50,000 | 55,000 |
Annual retainer for lead independent director | | | $ 20,000 | 25,000 |
Audit Committee | | | |
|
Annual retainer for committee membership | | | $ 10,000 | 12,500 |
Additional retainer for committee chair | | | $ 10,000 | 12,500 |
Compensation and Talent Committee | | | | |
Annual retainer for committee membership | | | $ 7,500 | 10,000 |
Additional retainer for committee chair | | | $ 7,500 | 10,000 |
Nominating and Corporate Governance Committee | | | | |
Annual retainer for committee membership | | | $ 5,000 | |
Additional retainer for committee chair | | | $ 5,000 | |
Strategy and Finance Committee
| | | | |
Annual retainer for committee membership
| | | $ 7,500
| |
Additional retainer for committee chair
| | | —
| |
Members of the ad hoc transaction committee did not receive fees for service on such committee.
Pursuant to our
Non-employee Non-Employee Directors’ Deferred Compensation Program, each
non-employee director may elect in advance to defer the receipt of these cash fees. During the deferral period, the cash fees
will beare deemed invested in stock units. The deferred compensation will be settled in shares of our common stock upon the termination of service of the director or such other time as may have been previously elected by the director. The shares will be issued from our
2015 Stock2018 Plan or a subsequent stock option and incentive plan approved by our stockholders.
In
2017,2023, each of our
non-employee members of our board of directors was entitled to the following equity compensation:
Upon initial election to the board of directors, anon-employee director receives aone-time grant of restricted stock units having a fair market value of $220,000, measured at the end of the tenth week of the fiscal quarter in which the director was elected, which vests over a four-year period at a rate of twenty- five percent (25%) on each of the first four anniversaries of the grant date.
Beginning in the second quarter of 2017, at
At the end of the tenth week of the fiscal quarter in which our annual meeting of stockholders occurs, each
re-electednon-employee re-elected non-employee director receives a grant of
restricted stock unitsRSUs having a fair market value of
$130,000,$200,000, which vests
in full on the first anniversary of such grant.
All of our directors are reimbursed for reasonable
out-of-pocket expenses incurred in attending meetings of the board of directors.
For 2024, in connection with Mr. Miller’s appointment as chairman of the board of directors, our board of directors determined that an additional annual cash retainer in the amount of $60,000 would be paid to the chairman of the board of directors.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
57
Compensation
The following table provides compensation information for the fiscal year ended December 30,
20172023, for each
non-employee member of our board of directors.
No memberThe table excludes Mr. Angle, who is a named executive officer of
our board of directors receivesthe Company and did not receive any additional compensation for
services renderedhis service as
a member of our board of directors.Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
director in 2023.
DIRECTOR COMPENSATION TABLE —
2017 | | | | | | | | | | | | | | | | | | | | | | |
Name | | | | Fees Earned or
Paid in Cash
($) | | | | | Stock Awards
($)(5) | | | | | Total ($) |
Mohamad Ali (1) | | | | | 65,000 | | | | | | | | 129,970 | | | | | | | | 194,970 | |
Michael Bell | | | | | 71,250 | | | | | | | | 129,970 | | | | | | | | 201,220 | |
Ronald Chwang, Ph.D. (2) | | | | | 62,500 | | | | | | | | 129,970 | | | | | | | | 192,470 | |
Gail Deegan (3) | | | | | 37,500 | | | | | | | | — | | | | | | | | 37,500 | |
Deborah G. Ellinger | | | | | 80,000 | | | | | | | | 129,970 | | | | | | | | 209,970 | |
Andrea Geisser (3) | | | | | 37,500 | | | | | | | | — | | | | | | | | 37,500 | |
Elisha Finney (4) | | | | | 65,625 | | | | | | | | 349,945 | | | | | | | | 415,570 | |
Andrew Miller | | | | | 70,000 | | | | | | | | 129,970 | | | | | | | | 199,970 | |
Michelle V. Stacy | | | | | 65,000 | | | | | | | | 129,970 | | | | | | | | 194,970 | |
| | | | | | | | | | | |
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) |
| Mohamad Ali | 72,500 | 199,968 | 272,468 |
| Deborah Ellinger (2) | 32,500 | 199,968 | 232,468 |
| Karen Golz | 80,000 | 199,968 | 279,968 |
| Dr. Ruey-Bin Kao | 65,000 | 199,968 | 264,968 |
| Eva Manolis | 77,500 | 199,968 | 277,468 |
| Andrew Miller | 92,500 | 199,968 | 292,468 |
| Michelle Stacy | 80,000 | 199,968 | 279,968 |
| (1) | Mr. Ali deferred all of his 2017 cash compensation pursuant to ourNon-employee Directors’ Deferred Compensation Program under which he received stock units in lieu of cash. |
|
| (2) | Dr. Chwang will retire from the board following the expiration of his term at the 2018 annual meeting. | | | |
(3) | Ms. Deegan and Mr. Geisser stepped down from the board of directors at the 2017 annual meeting of stockholders and as a result were not eligible to receive a stock award in 2017. |
(4) | Ms. Finney was elected to the board of directors in January 2017 and received a stock award in connection with her election. |
(5)(1) | Represents the grant date fair value of restricted stock unitsRSUs awarded in the fiscal year ended December 30, 20172023 in accordance with ASC Topic 718 disregarding any estimates of forfeitures. The grant date fair value is the fair market value of our common stock on the date of grant multiplied by the number of shares of common stock underlying such restricted stock unitRSU award. |
| (2) | Ms. Ellinger resigned from the board effective June 30, 2023.
|
The
non-employee members of our board of directors who held such position on December 30,
20172023, held the following aggregate number of unvested
restricted stock unitsRSUs as of such date:
| | | | | |
| Name | | | | | | Number of Unvested Restricted Stock Units |
Name
Mohamad Ali | | | | Number of
Unvested
Restricted
Stock
Units4,983 |
Mohamad Ali
Karen Golz | | | | | 5,068
| 4,983 |
Michael Bell
Dr. Ruey-Bin Kao | | | | | 5,739
| 4,983 |
Ronald Chwang, Ph.D.
Eva Manolis | | | | | 1,354
| 4,983 |
Deborah G. Ellinger
Andrew Miller | | | | | 1,354
| 4,983 |
Elisha Finney
Michelle Stacy | | | | | 5,191
| |
Andrew Miller
| | | | | 4,171
| |
Michelle V. Stacy
| | | | | 3,006
| 4,983 |
Transactions with Related Persons
Mr. Miller has served
Ms. Ellinger resigned from the board effective June 30, 2023 and did not hold any unvested RSUs as
a member of
our board of directors since September 2017, and currently serves as the Chief Financial Officer of PTC Inc. (“PTC”), which provides engineering software and cloud services to the Company. In fiscal year 2017, the Company paid to PTC approximately $529,274 in respect of these services.December 30, 2023.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 58
Other than the payments to PTC described above and the compensation agreements and other arrangements which are described in the “Compensation Discussion and Analysis” section
Transactions with Related Persons
In 2023, there was no transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $120,000 and in which any director, executive officer, holder of five percent or more of any class of our capital stock or any member of their immediate family had or will have a direct or indirect material interest.
Our board of directors has adopted a written related party transaction approval policy, which sets forth our policies and procedures for the review, approval or ratification of any transaction required to be reported in our filings with the SEC. Our policy with regard to related party transactions is that all related party transactions are to be reviewed by our general counsel, who will determine whether the contemplated transaction or arrangement requires the approval of the board of directors, the nominating and corporate governance committee, both or neither.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 59
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC
ACCOUNTANTSACCOUNTING FIRM
The audit committee of the board of directors has retained
the firm of PricewaterhouseCoopers LLP (“PwC”),
an independent registered public
accountants,accounting firm, to serve as independent registered public accountants for our
20182024 fiscal year. PwC has served as our independent registered public accounting firm since 1999. The Company is asking stockholders to ratify the selection by the audit committee of the board of directors of PwC as our independent auditors for the
20182024 fiscal year. Although ratification by the stockholders is not required by law, the board of directors has determined that it is desirable to request approval of this selection by the stockholders as a matter of good corporate governance. In the event the stockholders fail to ratify the appointment of PwC, the audit committee will consider this factor when making any determinations regarding PwC.
As provided in the audit committee charter, the audit committee is directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditors for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the
company.Company. Each year, the audit committee considers whether to retain PwC and whether such service continues to be in the best interests of the Company and our stockholders. Among other things, the audit committee considers:
•the quality and scope of the audit;
•the independence of PwC;
•the performance of the lead engagement partner, the number of people staffed on the engagement team, and the quality of the engagement team, including the quality of the audit committee’s ongoing communications with and the capability and expertise of the team;
•PwC’s tenure as our independent auditor and its familiarity with our global operations and business, accounting policies and practices, and internal controls over financial reporting; and
•external data relating to audit quality and performance, including recent PCAOB inspection reports available for PwC.
Based on this evaluation, the members of the audit committee and the board of directors believe that PwC is independent and that it is in the best interests of the Company and
ourits stockholders to retain PwC to serve as
ourits independent auditors for the fiscal year
2018.2024.
The audit committee is also responsible for selecting the lead engagement partner. The rules of the
Securities and Exchange Commission (the “SEC”)SEC and PwC’s policies require mandatory rotation of the lead engagement partner every five years. In
2015,2021, the audit committee selected a new lead engagement partner to begin in the
20162022 fiscal year. During
2015,2021, the audit committee, including the chair of the audit committee, were directly involved in the selection of the new lead engagement partner. The process for selecting a new lead engagement partner was fulsome and allowed for thoughtful consideration of multiple candidates, each of whom met a list of specified criteria. The process included discussions between the chair of the audit committee and PwC as to all of the final candidates under consideration for the position, meetings with the full audit committee and management, and robust interviews with the final candidates.
Pre-Approval of Audit and
Non-audit Services
The audit committee
of the board of directors has implemented procedures under our audit committee
pre-approval policy for audit and
non-audit services (the
“Pre-Approval “Pre-Approval Policy”) to ensure that all audit and permitted
non-audit services to be provided to us have been
pre-approved by the audit committee. Specifically, the audit committee
pre-approves the use of PwC for specified audit and
non-audit services, within approved
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
monetary limits. If a proposed service has not beenpre-approved pursuant to thePre-Approval Policy, then it must be specificallypre-approved by the audit committee before it may be provided by PwC. Anypre-approved services exceeding thepre-approved monetary limits require specific approval by the audit committee. For additional information concerning the audit committee and its activities with PwC, see “The Board of Directors and Its Committees” and “Report of the Audit Committee of the Board of Directors.”
Representatives of PwC attended all of the standard audit committee meetings in
2017.2023. We expect that a representative of PwC will attend the annual meeting, and the representative will have an opportunity to make a statement if he or she so desires. The representative will also be available to respond to appropriate questions from stockholders.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
60
PricewaterhouseCoopers LLP Fees
The following table shows the aggregate fees for professional services rendered by PwC to us during the fiscal years ended December 30,
20172023 and December 31,
2016. | | | | | | | | | | | | |
| | | 2017 | | | | | 2016 |
Audit Fees | | $ | 1,793,395 | | | | | | | $ | 1,099,304 | |
Audit-Related Fees | | | 0 | | | | | | | | 177,876 | |
Tax Fees | | | 939,087 | | | | | | | | 548,558 | |
All Other Fees | | | 5,698 | | | | | | | | 3,394 | |
| | | | | | | | | | | | |
Total | | $ | 2,768,180 | | | | | | | $ | 1,829,132 | |
| | | | | | | | | | | | |
2022.
| | | | | | | | | | | | | | | | | |
| | | 2023 | | | 2022 |
| Audit Fees | $ | 2,207,025 | | | $ | 2,243,626 | |
| Audit-Related Fees | | — | | | — |
| Tax Fees | | 106,794 | | | 91,833 |
| All Other Fees | | 29,409 | | | 100,356 |
| Total | $ | 2,343,228 | | | $ | 2,435,815 | |
Audit Fees for both years consist of fees for professional services associated with the annual consolidated financial statements audit, statutory filings, consents and assistance with and review of documents filed with the SEC.
Consists of fees associated with services related to review of accounting for significant transactions and other services that were reasonably related to the performance of audits or reviews of our financial statements and were not reported above under “Audit Fees.”
Tax Fees consist of fees for professional services rendered for assistance with federal, state, local and international tax planning and compliance.
All other fees include licenses to technical accounting research software and fees associated with services to perform an assessment of compliance with global privacy laws. The audit committee has determined that the provision of services described above to us by PwC is compatible with maintaining their independence.
Recommendation of the
BoardBoard:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOUVOTE “FOR”“
FOR” THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLPAS IROBOT’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSACCOUNTING FIRM FOR 2018.
FISCAL 2024.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 61
APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS
At our 2014 annual meeting of stockholders, our stockholders voted to request that our board of directors take the steps necessary so that each voting requirement in our
existing amendedExisting Certificate and
restated certificate of incorporation (the “Existing Certificate”) andby-laws that calls for a greater than a simple majority vote be eliminated and replaced by a majority voting standard.
In
each year from 2015
to 2022, our nominating and corporate governance committee and our board of directors determined it was appropriate to propose the amendments described below, and included the proposal described below in our
proxy statementProxy Statement for the
2015respective annual meeting.
DespiteThese amendments were not proposed in 2023 due to the pending merger with Amazon. As detailed in the table below, despite receiving the affirmative votes of
holdersa majority of
58%holders of the outstanding shares at
the 2015each annual meeting
from 2015 to 2022, in each year since 2015 during which the proposal was presented, the proposal failed to receive the affirmative vote of holders of 75% of the outstanding shares, which is
the required
threshold for
approval of the proposal.In 2016, our nominating and corporate governance committee and our board of directors again determined it was appropriate to propose the amendments described below, and included the proposal described below in our proxy statement for the 2016 annual meeting. Despite receiving the affirmative votes of holders of over 68% of the outstanding shares at the 2016 annual meeting, the proposal failed to receive the affirmative vote of holders of 75% of the outstanding shares, which is the required threshold for approval of the proposal.
In 2017, our nominating and corporate governance committee and our board of directors again determined it was appropriate to propose the amendments described below, and included the proposal described below in our proxy statement for the 2017 annual meeting. Despite receiving the affirmative votes of holders of over 69% of the outstanding shares at the 2017 annual meeting, the proposal failed to receive the affirmative vote of holders of 75% of the outstanding shares, which is the required threshold for approval of the proposal.
approval.
| | | | | | | | | | | | | | | | | |
| Year | For | | Against | Abstentions | Broker Non-Votes |
| 2022 | 18,491,741 | | 87,623 | 24,468 | 3,701,832 |
| 2021 | 19,969,407 | | 80,058 | 39,726 | 3,554,106 |
| 2020 | 13,190,094 | | 161,387 | 49,139 | 6,772,725 |
| 2019 | 18,492,812 | | 138,436 | 40,470 | 5,749,298 |
| 2018 | 14,914,013 | | 86,022 | 59,826 | 6,363,508 |
| 2017 | 18,913,736 | | 118,581 | 53,434 | 4,221,576 |
| 2016 | 19,761,152 | | 326,257 | 204,328 | 202,522 |
| 2015 | 17,179,055 | | 101,106 | 33,543 | 6,857,005 |
Our board of directors continues to believe that the amendments to the Existing Certificate described below and set forth in the Certificate of Amendment attached to this Proxy Statement as Annex A are in the best interests of the Company’s stockholders, and, in light of the strong support received at the 2015 2016 and 2017to 2022 annual meetings, our board of directors has unanimously adopted a resolution approving and declaring the advisability of the below amendments to our Existing Certificate of Amendment, which changechanges the voting provisions in the Existing Certificate as follows:
Removal of Directors; Article VI, Section 5 - Currently, the approval of the holders of 75% or more of the shares of the Company entitled to vote at an election of directors is required to remove a director from office prior to the expiration of his or her term with cause. If this proposal is approved, stockholders will have the ability to remove a director from office prior to the expiration of his or her term with cause and the affirmative vote of a majority of the shares of the Company entitled to vote at an election of directors, which is the lowest allowable vote threshold under Delaware law; provided, however, that if Proposal 4 is approved by stockholders, the ability to remove will be without cause.
By-law Amendments; Article VIII, Section 2 - Currently, the Existing Certificate allows stockholders to amend or repeal our
by-laws if at least 75% of the shares of the Company entitled to vote on such matter vote in favor of the amendment or repeal. If this proposal is approved, stockholders will have the ability to amend our
by-laws with the affirmative vote of a majority of the shares cast and entitled to vote on such matter (with “abstentions,” “broker
non-votes,” and “withheld” votes not counted as a vote either “for” or “against” such amendment or repeal).
Amendments to Certain Provisions of the Certificate of Incorporation; Article IX - Currently, the approval of at least 75% of the shares of the Company entitled to vote on such matter is required to amend or repeal
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Articles V, VI, VII, VIII or IX of the Existing Certificate, which address, among other things, actions by written consent of stockholders, special meetings of stockholders requirements and procedures for electing and removing board members and filling vacancies, limitation of liability of directors,by-law amendments, and amendments of the Existing Certificate. If this proposal is approved, the threshold approval for stockholders to amend or repeal these provisions will be a vote of the majority of the outstanding shares of the Company entitled to vote on such amendment or repeal, which is the lowest allowable vote threshold under Delaware law.
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
62
This description of the proposed amendments to our Existing Certificate is a summary and is qualified by the full text of the proposed amendmentsCertificate of Amendment to our Existing Certificate, which is attached to this proxy statementProxy Statement asAnnex A and is marked to show the changes described above.incorporated herein by reference.
To be approved, the proposed
amendments to our Existing Certificate
requireof Amendment requires an affirmative vote of holders of 75% of the outstanding shares entitled to vote on the record date. If approved, the
proposed amendments to our Existing Certificate
of Amendment will become effective upon
the filing
of an amended and restated certificate of corporation with the Secretary of State of the State of Delaware, which we would do promptly after the annual meeting.
If this proposal is approved by the stockholders, we will make conforming amendments to ourby-laws to require the vote of a majority of the shares cast for the amendment or repeal of ourby-laws.
Recommendation of the
BoardBoard:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”"THE APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 63
APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS
At our 2015 annual meeting of stockholders, our stockholders voted to request that our board of directors take the steps necessary to reorganize the board of directors into one class with each director subject to election each year. As part of the request, our stockholders proposed that the Company would have the option to phase such declassification in over three years.
In 2016, our board of directors, after carefully considering the advantages and
disadvantagedisadvantages of reorganizing the board of directors into one class with each director subject to election each year, unanimously adopted a resolution approving and declaring the advisability of amendments to our Existing Certificate that would declassify our board of directors over a three-year period and provide for the annual election of all of our directors commencing at the 2017 annual meeting, subject to obtaining approval of such amendments by our stockholders at the 2016 annual meeting.
Despite receiving the affirmative votes of holders of over 68%a majority of the outstanding shares at the 2016 annual meeting, the proposal failed to receive the affirmative vote of holders of 75% of the outstanding shares, which is the required threshold for approval of the proposal.
In
2017,each year from 2016 to 2022, our board of directors, after further careful consideration, unanimously adopted a resolution approving and declaring the advisability of amendments to our Existing Certificate that would immediately declassify our board of directors and provide for the annual election of all of our directors commencing at the
2018next scheduled annual meeting, subject to obtaining approval of such amendments by our
stockholders atstockholders. This proposal was not submitted in 2023 due to the
2017 annual meeting.pending merger with Amazon.
Despite receiving the affirmative votes of
holdersa majority of
over 69%holders of the outstanding shares at
the 2017each annual meeting
from 2016 to 2022 in each year during which the proposal was submitted since 2016 the proposal failed to receive the affirmative vote of holders of 75% of the outstanding shares, which is
required for approval. The table below details the
required threshold for approvalvoting results on proposals to declassify our board of
the proposal.directors since 2016:
| | | | | | | | | | | | | | | |
| Year | For | Against | Abstentions | Broker Non-Votes | |
| 2022 | 18,491,741 | 87,623 | 24,468 | 3,701,832 | |
| 2021 | 19,992,568 | 51,998 | 44,625 | 3,554,106 | |
| 2020 | 13,230,665 | 75,909 | 94,046 | 6,772,725 | |
| 2019 | 18,508,599 | 114,069 | 49,050 | 5,749,298 | |
| 2018 | 14,932,946 | 57,771 | 69,144 | 6,363,508 | |
| 2017 | 18,910,693 | 121,045 | 54,013 | 4,221,576 | |
| 2016 | 19,752,012 | 318,969 | 220,756 | 202,522 | |
Our board of directors continues to believe that the amendments to the Existing Certificate described below and set forth in the Certificate of Amendment attached to this Proxy Statement as Annex B are in the best interests of the Company’s stockholders and in light of the strong support received at both the 2016 and 2017 annual meetings, our board of directors has again unanimously adopted a resolution approving and declaring the advisability of the below amendments to our Existing Certificate to declassify the board. After careful review and consideration, our board of directors has determined that it is incommencing at the best interests of the Company’s stockholders2025 annual meeting, subject to upon approval by the Company’s stockholders, declassify our board of directors and provide for annual election of all of our directors commencing at the 2019 annual meeting.stockholders. If this Proposal 4 is approved by the stockholders, the terms for all directors will end at the 20192025 annual meeting, and commencing with the 20192025 annual meeting, all directors will be elected forone-year terms at each subsequent annual meeting. If this Proposal 4 is approved, any director appointed by the board of directors as a result of a newly created directorship or to fill a vacancy would hold office until the next occurring annual meeting.
Article VI, Section 3 of our Existing Certificate currently provides that our directors are divided into three classes, with each class serving a three-year term. Under the proposed amendments to our Existing Certificate in this Proposal 4, Article VI, Section 3 of the Existing Certificate would be amended to eliminate the classified board structure. If the proposed amendments are approved, commencing with the 20192025 annual meeting of stockholders, all directors will stand for election forone-year terms expiring at the next succeeding annual meeting of stockholders. In all cases, each director will hold office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. Any director appointed to the board of directors to fill a vacancy following the 20192025 annual meeting of stockholders will hold office for a term expiring at the next annual meeting of stockholders following such appointment. Corresponding changes
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
64
related to the declassification of the board
wouldwill be made to Article VI, Section 4 of the Existing Certificate pertaining to vacancies on the board of directors. Article VI, Section 5 of the Existing Certificate, which currently provides
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
that directors may be removed by stockholders only for cause, wouldwill also be amended to allow for removal of directors without cause. If the stockholders do not approve this Proposal 4, our board of directors will remain classified and our directors will continue to be subject to the classifications set forth in our Existing Certificate.
This description of the proposed amendments to our Existing Certificate is a summary and is qualified by the full text of the proposed amendmentsCertificate of Amendment to our Existing Certificate, which is attached to this proxy statementProxy Statement asAnnex AB and is marked to show the changes described above.incorporated herein by reference.
To be approved, the proposed
amendments to our Existing Certificate
requireof Amendment requires an affirmative vote of holders of 75% of the outstanding shares entitled to vote on the record date. If approved, the proposed
amendments to our Existing Certificate
of Amendment will become effective upon
the filing
of an amended and restated certificate of corporation with the Secretary of State of the State of Delaware, which we would do promptly after the annual meeting.
Recommendation of the
BoardBoard:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”FOR” THE APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 65
APPROVAL OF AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO ELIMINATE THE PROHIBITION ON STOCKHOLDERS’ ABILITY TO
Our Existing Certificate and our
by-laws provide that special meetings of the stockholders may be called only by the affirmative vote of a majority of the board of directors.
As part of our board of directors’ ongoing review of corporate governance practices, the board of directors has reviewed and considered the advantages and disadvantages of permitting stockholders to call special meetings. Stockholder-called special meetings may divert management’s time away from the Company’s
day-to-day operations and involve significant organization, distribution, legal and other costs, which may ultimately be counter to the best interest of the Company’s stockholders as a whole. The board of directors also recognizes that the ability to call special meetings would allow stockholders to convene to vote on matters outside of the annual meeting that are important to the Company’s growth and success. As a result, our board of directors believes that stockholders, or groups of stockholders, owning at least 25% of the Company’s outstanding
shares of common stock (the “Requisite Threshold”) should have the ability to call special meetings.
In each year from 2017 to 2022, our board of directors unanimously adopted a resolution approving and declaring the advisability of an amendment to our Existing Certificate to eliminate the prohibition on stockholders’ ability to call a special meeting, subject to obtaining approval of such amendments by our stockholders atstockholders. This proposal was not proposed in 2023 due to the 2017 annual meeting, and unanimously approved, subject to stockholder approval of this proposal, amendments to ourby-laws to establishpending merger with Amazon.
As detailed in the
requirements and procedures for stockholders to call special meetings.Despitetable below, despite receiving the affirmative votes of holdersa majority of over 69%holders of the outstanding shares at the 2017each annual meeting from 2017 to 2022, in each year since 2017 during which the proposal was submitted, the proposal failed to receive the affirmative vote of holders of 75% of the outstanding shares, which is the required threshold for approval of the proposal.
| | | | | | | | | | | | | | |
| Year | For | Against | Abstentions | Broker Non-Votes |
| 2022 | 18,491,741 | 87,623 | 24,468 | 3,701,832 |
| 2021 | 19,994,600 | 50,028 | 44,563 | 3,554,106 |
| 2020 | 13,232,040 | 115,547 | 53,033 | 6,772,725 |
| 2019 | 18,450,183 | 119,269 | 102,266 | 5,749,298 |
| 2018 | 14,945,267 | 62,032 | 52,562 | 6,363,508 |
| 2017 | 18,948,123 | 97,937 | 39,691 | 4,221,576 |
Our board of directors continues to believe that the amendment to the Existing Certificate to eliminate the prohibition on stockholders’ ability to call a special meeting is in the best interests of the Company’s stockholders and has again unanimously adopted a resolution approving and declaring the advisability of an amendment to our Existing Certificate to remove the first sentence of Article V, Section 2, which provides that special meetings may only be called by the affirmative vote of a majority of the board of directors. Our board of directors, believes that this amendment is in the best interests ofsubject to approval by the Company’s stockholders. Our board of directors has unanimously approved, subject to stockholder approval of
If this proposal
is approved by the stockholders, we will make conforming amendments to our
by-laws to establish the requirements and procedures for stockholders to call special meetings (the
“By-law “By-law Amendment”). The
By-law Amendment
provideswill provide that stockholders, or groups of stockholders, holding the Requisite Threshold may direct the Company’s Secretary to call special meetings.
TheBy-law Amendment will become effective only upon approval of this proposal.
The above description of the proposed amendment to our Existing Certificate is a summary and is qualified by the full text of the proposed amendmentCertificate of Amendment to our Existing Certificate, which is attached to this proxy statementProxy Statement asAnnex AC and is marked to show the changes described above.incorporated herein by reference.
To be approved, the proposed
amendment to our Existing Certificate
of Amendment requires an affirmative vote of holders of 75% of the outstanding shares entitled to vote on the record date. If approved, the proposed
amendment to our Existing Certificate
of Amendment will become effective upon
the filing
of an amended and restated certificate of incorporation with the Secretary of State of the State of Delaware, which we would do promptly after the annual meeting.
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66
Recommendation of the
BoardBoard:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO
ELIMINATE THE PROHIBITION ON STOCKHOLDERS’ ABILITY TO CALL
A SPECIAL MEETING.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 67
APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO LIMIT THE IROBOTLIABILITY OF CERTAIN OFFICERS OF THE COMPANY IN CERTAIN CIRCUMSTANCES AS PERMITTED BY RECENT AMENDMENTS TO THE DELAWARE GENERAL CORPORATION LAW
Background
The State of Delaware, which is our state of incorporation, recently enacted legislation that enables Delaware companies to limit the liability of certain officers in limited circumstances under Section 102(b)(7) of the General Corporation Law of the State of Delaware (“DGCL”). Amended DGCL Section 102(b)(7) only permits exculpation for direct claims brought by stockholders for breach of an officer’s fiduciary duty of care, including class actions, but does not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the corporation itself or for derivative claims brought by stockholders in the name of the corporation. Furthermore, the limitation on liability does not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Our Existing Certificate currently provides for the exculpation of directors as permitted by the DGCL, but it does not include a provision that allows for the exculpation of officers.
The board of directors believes it is important to provide protection from certain liabilities and expenses that may discourage prospective or current directors from accepting or continuing membership on corporate boards and prospective or current officers from serving corporations. In the absence of such protection, qualified directors and officers might be deterred from serving as directors or officers due to exposure to personal liability and the risk that substantial expense will be incurred in defending lawsuits, regardless of merit. In particular, the board of directors took into account the narrow class and type of claims from which such officers would be exculpated from liability pursuant to amended DGCL Section 102(b)(7), the limited number of the Company’s officers that would be impacted, and the benefits the board of directors believes would accrue to iRobot by providing exculpation in accordance with DGCL Section 102(b)(7), including, without limitation, the ability to attract and retain key officers and the potential to reduce litigation costs associated with frivolous lawsuits.
The board of directors balanced these considerations with our corporate governance guidelines and practices and determined that it is advisable and in the best interests of iRobot and our stockholders to amend the Existing Certificate to add Article X to adopt amended DGCL Section 102(b)(7) and extend exculpation protection to our officers in addition to our directors. We refer to this proposed amendment to the Existing Certificate as the “Exculpation Amendment” in this Proxy Statement.
Text of the Proposed Exculpation Amendment
The Exculpation Amendment would amend the Existing Certificate by adding a new article to reflect the Delaware law provisions regarding exculpation of officers as follows:
“ARTICLE X
LIMITATION OF OFFICER LIABILITY
To the fullest extent permitted by the DGCL, an Officer (as defined below) of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as an officer of the Corporation, except for liability (a) for any breach of the Officer’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) for any transaction from which the Officer derived an improper personal benefit, or (d) arising from any claim brought by or in the right of the Corporation. If the DGCL is amended after the effective date of this Certificate to authorize corporate action further eliminating or limiting the personal liability of Officers, then the liability of an Officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. For purposes of this ARTICLE X, “Officer” shall mean an individual who has been duly appointed as an officer of the Corporation and who, at the time of an act or omission as to which liability is asserted, is deemed to have consented to service of process to the registered agent of the Corporation as contemplated by 10 Del. C. § 3114(b).
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Any amendment, repeal or modification of this ARTICLE X by either of (i) the stockholders of the Corporation or (ii) an amendment to the DGCL, shall not adversely affect any right or protection existing at the time of such amendment, repeal or modification with respect to any acts or omissions occurring before such amendment, repeal or modification of a person serving as an Officer at the time of such amendment, repeal or modification.”
This description of the proposed Exculpation Amendment is a summary and is qualified by the full text of the proposed Certificate of Amendment to our Existing Certificate, which is attached to this Proxy Statement as Annex D and is incorporated herein by reference.
Reasons for the Proposed Exculpation Amendment
The board of directors believes that the Exculpation Amendment is necessary to continue to attract and retain experienced and qualified officers. The board of directors believes that in the absence of such protection, qualified officers might be deterred from serving as officers of the Company due to exposure to personal liability. The nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower both directors and officers to best exercise their business judgment in furtherance of stockholder interests. We expect our peers to adopt exculpation clauses that limit the personal liability of officers in their certificates of incorporation, and failing to adopt the proposed Exculpation Amendment could impact our recruitment and retention of exceptional officer candidates that conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company. Further, the board of directors believes that the Exculpation Amendment would not negatively impact stockholder rights, particularly taking into account the narrow class and type of claims for which officers’ liability would be exculpated.
Accordingly, the board of directors has determined that the proposed Exculpation Amendment is advisable and in the best interest of iRobot and our stockholders and authorized and approved the proposed Exculpation Amendment, subject to approval by stockholders at the Annual Meeting.
The proposed Exculpation Amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any officer.
Timing and Effect of the Proposed Exculpation Amendment
If the proposed Exculpation Amendment is approved by our stockholders, it will become effective immediately upon the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware, which we expect to file promptly after the Annual Meeting. The Exculpation Amendment will only serve to eliminate or limit the liability of an
officer for any act or omission occurring from and after the date of its effectiveness.
The affirmative vote of holders of a majority of the shares of our capital stock outstanding and entitled to vote as of the record date is required to approve the Exculpation Amendment. Abstentions and broker non-votes will have the effect of a vote against the Exculpation Amendment.
Recommendation of the Board:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
APPROVAL OF AN AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS OF THE COMPANY IN CERTAIN CIRCUMSTANCES AS PERMITTED BY RECENT AMENDMENTS TO THE DELAWARE GENERAL CORPORATION LAW.
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PROPOSAL 7
APPROVAL OF AN AMENDMENT TO THE 2018 STOCK OPTION AND INCENTIVE PLAN
Proposal
The board of directors believes that stock-based incentive awards can play an important role in the success of the Company by encouraging and enabling the employees, officers,
non-employee directors and consultants of the Company and its subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. The board of directors believes that providing such persons with a direct stake in the Company assures a closer identification of the interests of such individuals with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.
On March 26, 2018, the board of directors adopted, subject to stockholder approval, the 2018 Stock Plan. The 2018 Stock Plan is designed to enhance the flexibility to grant equity awards to our officers, employees,non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the board of directors and/or the compensation and talent committee. A copy of the 2018 Stock Plan is attached as Annex B to this proxy statement and is incorporated herein by reference.
If our 2018 Stock Plan is approved, we intend to discontinue granting awards under our 2015 Stock Plan.
As of December 30, 2017, there were stock options to acquire 712,954 shares of common stock outstanding under our equity compensation plans, with a weighted average exercise price of $34.34 and a weighted average remaining term of 4.27 years. In addition, as of December 30, 2017, there were 938,453 unvested full value awards with time-based vesting and 242,061 unvested full value awards with performance vesting outstanding at target under our equity compensation plans. Other than the foregoing, no awards under our equity compensation plans were outstanding as of December 30, 2017.
Summary of Material Features of the 2018 Stock Plan
The material features of the 2018 Stock Plan are:
The maximum number of shares of common stock to be issued under the 2018 Stock Plan is 1,750,000;
Rationale for Share Increase
The award of stock options (both incentive andnon-qualified options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash-based awards, and dividend equivalent rights and is permitted;
Shares tendered or held back for taxes will not be added back to the reserved pool under the 2018 Stock Plan. Upon the exercise of a stock appreciation right that is settled in shares of common stock, the full number of shares underlying the award will be charged to the reserved pool. Additionally, shares we reacquire on the open market will not be added to the reserved pool under the 2018 Stock Plan;
Stock options and stock appreciation rights will not be repriced in any manner without stockholder approval;
The value of all awards awarded under the 2018 Stock Plan and all other cash compensation paid by us to anynon-employee director in any calendar year may not exceed $750,000 and no more than 50,000 shares of common stock may be issued pursuant to awards under the 2018 Stock Plan tonon-employee directors in any calendar year;
Minimum vesting of one year required for all equity awards, other than a limited number of excepted awards under the 2018 Plan;
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Any dividends or dividend equivalents payable with respect to any equity award are subject to the same vesting provisions as the underlying award;
Any materialproposed amendment to the 2018 Stock Plan is subject to approval by our stockholders; and
The term of the 2018 Stock Plan will expire on May 23, 2028.
Based solely on the closing price of our common stock as reported by NASDAQ on March 28, 2018 and the maximum number of shares that would have been available for awards as of such date under the 2018 Stock Plan, the maximum aggregate market value of the common stock that could potentially be issued under the 2018 Stock Plan is $110,407,500. The shares of common stock underlying any awards that are forfeited, canceled or otherwise terminated, other than by exercise, under the 2018 Stock Plan or the 2015 Stock Plan will be added back to the shares of common stock available for issuance under the 2018 Stock Plan. Shares tendered or held back upon exercise of a stock option or settlement of an award under the 2018 Stock Plan to cover the exercise price or tax withholding and (ii) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of common stock available for issuance under the 2018 Stock Plan. In addition, shares of common stock repurchased on the open market will not be added back to the shares of common stock available for issuance under the 2018 Stock Plan.
Rationale for Share Increase
The 2018 Stock Plan(the "Plan Amendment") is critical to our ongoing effort to build stockholder value. Equity incentive awards are an important component of our executive andnon-executive employees’ compensation. Ourcompensation and our compensation and talent committee and the board of directors believe that we must continue to offer a competitive equity compensation program in order to attract, retain and motivate the talented and qualified employees necessary for our continued growth and success.
Currently we have a limited number of shares remaining for future issuance under the 2018 Plan, and in our current cash constrained environment, there is a risk associated with not being able to deliver equity compensation for the talent we need to hire and retain in view of the recent decline in share value and termination of the Merger Agreement with Amazon. The technology industry in which we compete for talent typically offers equity compensation as a component of employees' overall compensation package, and in order to effectively attract and retain talent we have built a compensation strategy that includes equity compensation.
We manage our long-term stockholder dilution by limiting the number of equity incentive awards granted annually. The compensation and talent committee carefully monitors our annual net burn rate, total dilution and equity expense in order to maximize stockholder value by granting only the number of equity incentive awards that it believes are necessary and appropriate to attract, reward and retain our employees. Our compensation philosophy reflects broad-based eligibility for equity incentive awards for high performing employees. By doing so, we link the interests of those employees with those of our stockholders and motivate our employees to act as owners of the business.
This proposal is generally consistent with our prior approved increase in the number of shares issuable pursuant to the 2018 Plan, The increase in 2022 as percentage of shares of common stock outstanding was 3.33% and the number of shares requested under this proposal represents 3.22%. Our 3-year average gross burn rate of 2.97% and net burn rate of 2.0% are at or below the median of our peer group, and we consider them reasonable and within market norms. This proposal, if approved, would result in a total overhang of 11.55%, well below the median of our peer group, and is comparable to our increase in 2022 which had a post-request total overhang of 11.89%.
Summary of Governance and Material Features of the Amended 2018 Plan
•No evergreen or automatic replenishment feature.
•Minimum vesting of one year required for all equity awards, other than a limited number of excepted awards.
•Any dividends or dividend equivalents payable with respect to any equity award are subject to the same vesting provisions as the underlying award.
•Any material amendment is subject to approval by our stockholders; and
•The term of the 2018 Plan, as amended by the Plan Amendment (the "Amended Plan") will expire on May 23, 2028.
•The maximum number of shares of common stock that may be issued under the Amended 2018 Plan is 4,295,000;
•The award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash- based awards, and dividend equivalent rights and is permitted;
•Shares tendered or held back for taxes will not be added back to the reserved pool under the Amended 2018 Plan. Upon the exercise of a stock appreciation right that is settled in shares of common stock, the full number of shares underlying the award will be charged to the reserved pool. Additionally, shares we reacquire on the open market will not be added to the reserved pool under the Amended 2018 Plan;
•Stock options and stock appreciation rights may not be repriced in any manner without stockholder approval;
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70
•The value of all awards awarded under the Amended 2018 Plan and all other cash compensation paid by us to any non-employee director in any calendar year may not exceed $750,000 and no more than 50,000 shares of common stock may be issued pursuant to awards under the Amended 2018 Plan to non-employee directors in any calendar year;
The board of directors and the Company’s stockholders previously adopted the iRobot Corporation 2018 Stock Option and Incentive Plan, which was subsequently amended in May 2020 and 2022, On [●] 2024, the board of directors adopted the Plan Amendment , subject to stockholder approval, to increase the aggregate number of shares authorized for issuance under the 2018 Plan by 900,000 shares, subject to adjustment as provided for in the Amended 2018 Plan. The Plan Amendment is designed to enhance the flexibility to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by the board of directors and/or the compensation and talent committee. A copy of the 2018 Plan as amended by the Plan Amendment is attached as Annex E to this Proxy Statement and is incorporated herein by reference.
We are requesting that shareholders approve the proposed Plan Amendment. If this proposal is approved by our stockholders at the annual meeting, the Plan Amendment providing for the additional 900,000shares will become effective on the date of the annual meeting. If stockholders do not approve this proposal, the proposed 900,000 additional shares will not become available for issuance under the 2018 Plan and the 2018 Plan will otherwise remain in effect in accordance with its terms. In such event, the board of directors will consider whether to adopt alternative arrangements based on its assessment of our needs. We believe that the proposed share pool increase to the 2018 Plan pursuant to the Plan Amendment is reasonable, appropriate, and in the best interests of our stockholders.
As of March 14, 2024, there were no outstanding stock options to acquire shares of common stock outstanding under our equity compensation plans. In addition, as of March 14, 2024, there were 1,691,679unvested full value awards with time-based vesting and 48,528 unvested full value awards with performance vesting outstanding at target under our equity compensation plans. Other than the foregoing, no awards under our equity compensation plans were outstanding as of March 14, 2024. As of March 14, 2024, there were 363,566shares of common stock available for awards under our equity compensation plans.
Based solely on the closing price of our common stock as reported by Nasdaq on March 14, 2024and the maximum number of shares that would have been available for awards as of such date under the Amended 2018 Plan had it been in effect on such date, the maximum aggregate market value of the common stock that could potentially be issued under the Amended 2018 Plan is [●]. The shares of common stock underlying any awards that are forfeited, canceled or otherwise terminated, other than by exercise, under the Amended 2018 Plan or the iRobot Corporation 2015 Stock Option and Incentive Plan (the “2015 Plan”) will be added back to the shares of common stock available for issuance under the Amended 2018 Plan. Shares tendered or held back upon exercise of a stock option or settlement of an award under the Amended 2018 Plan to cover the exercise price or tax withholding and (ii) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of common stock available for issuance under the Amended 2018 Plan. In addition, shares of common stock repurchased on the open market will not be added back to the shares of common stock available for issuance under the Amended 2018 Plan.
The following table sets forth information regarding historical awards granted and earned
forduring the
2015 through 20172021, 2022 and 2023 fiscal year period, and the corresponding burn rate, which is defined as the number of shares subject to equity-based awards granted in a year divided by the weighted average number of shares of common stock outstanding for that year, for each of the last three fiscal years:
| | | | | | | | | | | | |
Share Element | | 2015 | | 2016 | | 2017 |
Stock Options Granted | | | 323,104 | | | | 314,770 | | | | 10,975 | |
Time-Based Full-Value Awards Granted | | | 505,277 | | | | 458,237 | | | | 396,164 | |
Performance Based Full-Value Awards Granted | | | 71,133 | | | | 82,085 | | | | 105,650 | |
Total Awards Granted | | | 899,514 | | | | 855,092 | | | | 512,789 | |
Weighted average common shares outstanding during the fiscal year | | | 29,549,859 | | | | 27,698,127 | | | | 27,611,325 | |
Annual Burn Rate | | | 3.04 | % | | | 3.09 | % | | | 1.86 | % |
Three-Year Average Burn Rate | | | | | | | 2.66 | % | | | | |
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 71
Our
| | | | | | | | | | | | | | |
| Share Element | | 2021 | 2022 | 2023 |
| Stock Options Granted | | — | — | — |
| Time Based Full-Value Awards Granted | | 523,496 | 638,554 | 1,001,090 |
| Performance-Based Full-Value Awards Granted | | 134,127 | 153,676 | — |
| Performance-Based Full-Value Awards Vested | | 55,503 | — | 32,669 |
| Total Awards Granted | | 657,623 | 792,230 | 1,001,090 |
| Weighted average common shares outstanding during fiscal year | | 27,687,037 | 27,213,741 | 27,676,000 |
| Annual Burn Rate | | 2.38% | 2.91% | 3.62% |
| Three-Year Average Burn Rate | | | 2.97% | |
The compensation and talent committee determined the size of
the increase to the reserved pool under the
2018 Stock Plan
Amendment based on projected equity awards to anticipated new hires, projected annual equity awards to existing employees and an assessment of the magnitude of increase that our institutional investors and the firms that advise them would likely find acceptable. We anticipate that if our request to increase the share reserve is approved by our stockholders, it will be sufficient to provide equity incentives to attract, retain, and motivate employees for a period of three years or less following the effective date of the
2018 Stock Plan.Plan Amendment.
Summary of the
Amended 2018
Stock Plan
The following description of certain features of the
Amended 2018
Stock Plan is intended to be a summary only. The summary is qualified in its entirety by the full text of the 2018
Stock Plan,
which was filed as an exhibit to the Company’s Registration Statement on Form S-8 filed with the SEC on June 7, 2018, and is incorporated herein by reference, the first amendment to the 2018 Plan, which was filed as an exhibit to the Company’s Registration Statement on Form S-8 filed with the SEC on June 30, 2020, and is incorporated herein by reference, and the second amendment to the 2018 Plan, which was filed as an exhibit to the Company’s Registration Statement on Form S-8 filed with the SEC on June 17, 2022, and is incorporated herein by reference, and the Plan Amendment, which is attached hereto as Annex
B.E.
Administration.The Amended 2018 Stock Plan will be administered by the compensation and talent committee. The compensation and talent committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the Amended 2018 Stock Plan. The compensation and talent committee may delegate to our chief executive officer or another executive officer or a committee comprised of the chief executive officer and another officer or officers of the Company the authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Exchange Act and not members of the delegated committee, subject to certain limitations and guidelines.Eligibility;
Eligibility; Plan Limits.Limits. All full-time and part-time officers, employees,non-employee directors and consultants are eligible to participate in the Amended 2018 Stock Plan, subject to the discretion of the administrator. As of March 26, 2018,14, 2024, approximately 958763 individuals would have been eligible to participate in the Amended 2018 Stock Plan had it been effective on such date, which includes five executive officers, 946758 employees who are not executive officers, sixseven non-employee directors and one consultant.zero consultants. There are certain limits on the number of awards that may be granted under the Amended 2018 Stock Plan. For example, no more than 1,750,0004,295,000 shares of common stock may be granted in the form of incentive stock options.
Director Compensation Limit. The Amended 2018 Stock Plan provides that the value of all awards awarded under the Amended 2018 Stock Plan and all other cash compensation paid by the Company to anynon-employee director in any calendar year shall not exceed $750,000 and no more than 50,000 shares of common stock may be issued pursuant to awards under the Amended 2018 Stock Plan to anynon-employee director in any calendar year.
Minimum Vesting Period. The minimum vesting period for each equity award granted under the Amended 2018 Stock Plan must be at least one year, provided (1) that up to 5% of the shares authorized for issuance under the Amended 2018 Plan may be utilized for unrestricted stock awards or other equity awards with a minimum vesting period of less than one year and (2) annual awards tonon-employee directors that occur in connection with the Company’s annual meeting of stockholders may vest on the date of the Company’s next annual meeting of stockholders but in no event shall the vesting period for such awards be less than 50 weeks. In addition, the Administratoradministrator may grant equity awards that vest within one year (i) if such awards are granted as substitute awards in replacement of other awards (or awards previously granted by
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72
an entity being acquired (or assets of which are being acquired)) that were scheduled to vest within one year or (ii) if such awards are being granted in connection with an elective deferral of cash compensation that, absent a deferral election, otherwise would have been paid to the grantee within the one year.
Stock Options. The Amended 2018 Stock Plan permits the granting of (1) options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Code and (2) options that do not so qualify. Options granted under the Amended 2018 Stock Plan will benon-qualified options if they fail to qualify as incentive options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries.Non-qualified options may be granted to any personsNotice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
eligible to receive incentive options and tonon-employee directors and consultants. The option exercise price of each option will be determined by the Compensation Committeecompensation and talent committee but may not be less than 100% of the fair market value of the common stock on the date of grant. Fair market value for this purpose will beis the last reported sale price of the shares of common stock on NASDAQNasdaq on the date immediately preceding the grant date. The exercise price of an option may not be reduced after the date of the option grant, other than to appropriately reflect changes in our capital structure.
The term of each option will be fixed by the
Compensation Committeecompensation and talent committee and may not exceed ten years from the date of grant. The
Compensation Committeecompensation and talent committee will determine at what time or times each option may be exercised. Options may be made exercisable in installments and the exercisability of options may be accelerated by the
Compensation Committee.compensation and talent committee. In general, unless otherwise permitted by the compensation and talent committee, no option granted under the
Amended 2018
Stock Plan is transferable by the optionee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order, and options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable to the compensation and talent committee or by delivery (or attestation to the ownership) of shares of common stock that are beneficially owned by the optionee and that are not subject to risk of forfeiture. Subject to applicable law, the exercise price may also be delivered to the Company by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, the compensation and talent committee may permit
non-qualified options to be exercised using a net exercise feature which reduces the number of shares issued to the optionee by the number of shares with a fair market value equal to the exercise price.
To qualify as incentive options, options must meet additional federal tax requirements, including a $100,000 limit on the value of shares subject to incentive options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. The compensation and talent committee may award stock appreciation rights subject to such conditions and restrictions as the compensation and talent committee may determine. Stock appreciation rights entitle the recipient to cash or shares of common stock equal to the value of the appreciation in the stock price over the exercise price. The exercise price iswill be determined by the compensation and talent committee but may not be less than 100% of the fair market value of the common stock on the date of grant. The term of a stock appreciation right may not exceed ten years.
Restricted Stock. The compensation and talent committee may award shares of common stock to participants subject to such conditions and restrictions as the compensation and talent committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment or other service relationship with us through a specified restricted period. During the vesting period, restricted stock awards may be credited with dividend equivalent rights (but dividend equivalentsdividends but dividends payable with respect to a restricted stock awardsaward shall not be paid unless and until the applicable performance goals are attained and/or the continued employment periods are completed).awards vests.
Restricted Stock Units. The compensation and talent committee may award restricted stock units to participants. Restricted stock units are ultimately payable in the form of cash or shares of common stock subject to such conditions and restrictions as the compensation and talent committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment or other service relationship with the Company through a specified vesting period. In the compensation and talent committee’s sole discretion, it may permit a participant to make an advance election to receive a portion of his or her future cash compensation otherwise due in the form of a restricted stock unit award, subject to the participant’s compliance with theNotice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
procedures established by the Compensation Committeecompensation and talent committee and requirements of Section 409A of the Code. During the deferral period, the deferred stock awards may be credited with dividend equivalent rights.
Unrestricted Stock Awards.Awards. The compensation and talent committee may also grant shares of common stock which are free from any restrictions under the Amended 2018 Stock Plan. Unrestricted stock may be granted to any participant in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant.
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Dividend Equivalent Rights.The compensation and talent committee may grant dividend equivalent rights to participants, which entitle the recipient to receive credits for dividends that would be paid if the recipient had held specified shares of common stock. Dividend equivalent rights may be granted as a component of anotheran award (other thanof restricted stock units or as a freestanding award. Dividend equivalent rights granted as a component of an award of restricted stock option or stock appreciation right)units may be paid only if the relatedrestricted stock unit award becomes vested. Dividend equivalent rights may not be granted as a component of a stock option or stock appreciation right award. Dividend equivalent rights may be settled in cash, shares of common stock or a combination thereof, in a single installment or installments, as specified in the award.
Cash-Based Awards. The compensation and talent committee may grant cash bonuses under the Amended 2018 Stock Plan to participants. The cash bonuses may be subject to the achievement of certain performance goals.
Change of Control Provisions. The Amended 2018 Stock Plan provides that upon the effectiveness of a “sale event,” as defined in the Amended 2018 Stock Plan, all awards will terminate in connection with a sale event unless they are assumed, substituted, or continued by the successor entity. To the extent the parties to the sale event do not provide for awards under the 2018 Stock Plan to be assumed, substituted or continued by the successor entity, awards of stock options and stock appreciation rights will become exercisable prior to their termination. In addition, theThe Company may make or provide for payment, in cash or in kind, to participants holding options and stock appreciation rightsawards equal to the difference between the per share cash consideration and the applicable exercise price (if any), or each participant will be permitted, within a specified period of time prior to the consummation of the sale event, to exercise all outstanding stock options orand stock appreciation rights. The compensationrights (to the extent then exercisable) held by such participant, but in such case the board of directors shall first accelerate the exercisability of such stock options and talent committee shall also have the optionstock appreciation rights prior to make or provide for a payment, in cash or in kind, to grantees holding other awards in an amount equal to the per share cash consideration multiplied by the number of vested shares under such awards.termination. Unless otherwise determined by our board of directors, any repurchase rights or other rights of the Company that relate to an award will continue to apply to consideration (including cash) that has been substituted, assumed, amended or paid for such award in connection with a sale event.
Adjustments for Stock Dividends, Stock Splits, Etc. The Amended 2018 Stock Plan requires the compensation and talent committee to make appropriate adjustments to the number of shares of common stock that are subject to the Amended 2018 Stock Plan, to certain limits in the Amended 2018 Stock Plan, and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.
Tax Withholding. Participants in the Amended 2018 Stock Plan are responsible for the payment of any federal, state or local taxes that the Company is required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. Subject to approval by theThe compensation and talent committee, participants may elect to have theirrequire that tax withholding obligations be satisfied by authorizing the Company to withholdwithholding shares of common stock to be issued pursuant to the exercise or vesting.vesting of an award. The compensation and talent committee may also require awardsthe Company’s or any affiliate’s tax withholding obligation to be subjectsatisfied, in whole or in part, by an arrangement whereby a certain number of shares issued pursuant to mandatory share withholding upany award are immediately sold and proceeds from such sale are remitted to the requiredCompany or the applicable affiliate in an amount that would satisfy the withholding amount.amount due.
Amendments and Termination.Termination. The board of directors may at any time amend or discontinue the Amended 2018 Stock Plan and the compensation and talent committee may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. To the extent required under theNasdaq rules, of NASDAQ, any amendments that materially change the terms of the Amended 2018 Stock Plan will beNotice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
subject to approval by our stockholders. Amendments shall also be subject to approval by our stockholders if and to the extent determined by the compensation and talent committee to be required by the Code to preserve the qualified status of incentive options.
Effective Date of Plan.The 2018 Stock Plan was originally approved by our board of directors on March 26, 2018. 2018, and approved by our stockholders on May 23, 2018, the first amendment to the 2018 Plan was originally approved by our board of directors on March 24, 2020, and approved by our stockholders on May 20, 2020, and the second amendment to the 2018 Plan was originally approved by our board of directors on March 30, 2022, and approved by our
stockholders on May 27, 2022. The Plan Amendment was approved by the board of directors on March 24, 2024. Awards of incentive options may be granted under the Amended 2018 Stock Plan until March 25,23, 2028. No other awards may be granted under the Amended 2018 Stock Plan after the date that is ten years from the date of stockholder approval.May 23, 2028.
Because the grant of awards under the Amended 2018 Stock Plan is within the discretion of the compensation and talent committee, the Company cannot determine the dollar value or number of shares of common stock that will in the future be received by or allocated to any participant in the Amended 2018 Stock Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the Amended 2018 Stock Plan, the following table provides information concerning the benefits that were received by the following persons and groups during 2017:2023: each named executive officer; all current
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
74
executive officers, as a group; all current directors who are not executive officers, as a group; and all current employees who are not executive officers, as a group.
| | | | | | | | | | | | | | | | |
| | | Options | | | Stock Awards |
| | | | |
Name and Position | | Average
Exercise Price
($) | | | Number of
Awards
(#) | | Dollar Value
($)(1) | | Number of
Awards
(#) |
Colin M. Angle,Chairman,Chief Executive Officer
and Director | | | | | | | | | | | 4,153,558 | | | | 72,450 | |
Alison Dean,Executive Vice President, Chief
Financial Officer, Treasurer and Principal
Accounting Officer | | | | | | | | | | | 1,433,250 | | | | 25,000 | |
Christian Cerda,Chief Operating Officer | | | | | | | | | | | 1,384,520 | | | | 24,150 | |
Russell J. Campanello,Executive Vice President,
Human Resources and Corporate
Communications | | | | | | | | | | | 742,424 | | | | 12,950 | |
Glen D. Weinstein,Executive Vice President and Chief Legal Officer | | | | | | | | | | | 891,482 | | | | 15,550 | |
All current executive officers, as a group | | | | | | | | | | | 8,605,234 | (3) | | | 150,100 | |
All current directors who are not executive officers, as a group | | | | | | | | | | | 1,129,768 | (3) | | | 13,315 | |
All current employees who are not executive officers, as a group | | | 57.33 | (2) | | | 10,975 | | | | 25,096,689 | (3) | | | 338,399 | |
| | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name and Position | Average Exercise Price ($) | Number of Awards(#) | | Dollar Value ($)(1) | Number of Awards |
Colin Angle, former Chairman and Chief Executive Officer and Director | — | — | | 5,499,992 | 125,199 |
Julie Zeiler, Executive Vice President and Chief Financial Officer | — | — | | 1,724,999 | 39,267 |
Glen Weinstein, Interim Chief Executive Officer and former Executive Vice President and Chief Legal Officer | — | — | | 1,499,990 | 34,145 |
Russell J. Campanello, Executive Vice President of Human Resources and Corporate Communications | — | — | | 1,379,973 | 31,413 |
Faris Habbaba, Executive Vice President, Chief Research and Development Officer | — | — | | 1,724,999 | 39,267 |
| All current executive officers, as a group | — | — | | 11,829,953 | 269,291 |
| All current directors who are not executive officers, as group | — | — | | 1,399,775 | 34,881 |
| All current employees who are not executive officers, as a group | — | — | | 28,912,982 | 696,918 |
| | | | | |
| (1) | The valuation of stock awards is based on the grant date fair value computed in accordance with ASC Topic 718 disregarding any estimates of forfeitures. The grant date fair value is the fair market value of our common stock on the date of grant multiplied by the number of shares of common stock underlying such stock award. |
(2) | Represents the weighted average exercise price for the group. |
(3) | Represents the aggregate grant date fair value for the group. |
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Tax Aspects Underunder the Code
The following is a summary of the principal federal income tax consequences of certain transactions under the
Amended 2018
Stock Plan. It does not describe all federal tax consequences under the
Amended 2018
Stock Plan, nor does it describe state or local tax consequences.
Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If shares of common stock issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the optionexercise price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If shares of common stock acquired upon the exercise of an incentive option are disposed of prior to the expiration of the
two-year and
one-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of common stock at exercise (or, if less, the amount realized on a sale of such shares of common stock) over the
optionexercise price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive option is paid by tendering shares of common stock.
If an incentive option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a
non-qualified option. Generally, an incentive option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.
Non-Qualified Options. No income is realized by the optionee at the time anon-qualified option is granted. Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the optionexercise price and the fair market value of the shares of common stock on the date of exercise, and we receive a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares of common stock have been held. Special rules will apply where all or a portion of the exercise price of thenon-qualified option is paid by tendering shares of
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
75
common stock. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.
Other Awards. The Company generally will be entitled to a tax deduction in connection with other awards under the Amended 2018 Stock Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomesnon-forfeitable, unless the award provides for a further deferral.
Parachute Payments. The vesting of any portion of an award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may benon-deductible to the Company, in whole or in part, and may subject the recipient to anon-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Limitation on Deductions. Under Section 162(m) of the Code, the Company’s deduction for awards under the Amended 2018 Stock Plan may be limited to the extent that any “covered employee” (as defined in Section 162(m) of the Code) receives compensation in excess of $1 million a year.Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
Equity Compensation Plan Information
The following table provides information as of December 30,
20172023 regarding shares of common stock that may be issued under our equity compensation plans, consisting of the
Amended and Restated 2004 Stock Option and Incentive Plan, theiRobot Corporation 2005 Stock Option and Incentive Plan, as amended, the Evolution Robotics, Inc. 2007 Stock Plan,
and the 2015
Plan, the 2018 Plan and our 2017 Employee Stock
Plan. | | | | | | | | | | | | |
Plan Category | | Number of
securities to be
issued upon
exercise of
outstanding
options, units and
rights (a) | | Weighted average
exercise price of
outstanding
options, units and
rights (b) | | | Number of
securities
remaining
available for future
issuance under
equity
compensation plan
(excluding
securities
referenced in
column (a))(c) |
Equity compensation plans approved by security holders | | | 1,989,469 | (1) | | $ | 34.72 | | | | 590,655 | (2) |
Equity compensation plans not approved by security holders | | | 9,099 | (3) | | $ | 4.65 | | | | — | |
Total | | | 1,999,568 | (4) | | $ | 34.34 | | | | 590,655 | |
| | | | | | | | | | | |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, units and rights (a) | Weighted average exercise price of outstanding options, units and rights (b) | Number of securities remaining available for future issuance under equity compensation plan (excluding securities referenced in column (a))(c) |
| Equity compensation plans approved by security holders | 1,513,442(1) | $57.33 | 822,528(2) |
| Equity compensation plans not approved by security holders | — | — | — |
| Total | 1,513,442 | $57.33 | 822,528 |
| | | | | |
| |
| (1) | Includes 703,8555,950 shares of common stock issuable upon the exercise of outstanding options, 938,4531,353,599 shares of common stock issuable upon the vesting of restricted stock units,RSUs, and 347,161153,839 shares of common stock issuable upon the vesting of PSUs if specified performance metrics are achieved at maximum.target levels. |
| (2) | As of December 30, 2017,2023, there were no shares available for grants under the Amended and Restated 2004 Stock Option and Incentive Plan, our 2005 Stock Option and Incentive Plan, as amended, and the Evolution Robotics, Inc. 2007 Stock Plan and 590,655or the 2015 Plan. As of December 30, 2023, there were 822,528 shares available under the 2015 Stock Plan. In connection with2018 Plan and 418,027 shares available under the adoption of the 2015 Stock Plan in 2015, the board of directors determined that no further shares would be granted under any previous Plans.ESPP. |
(3) | Represents shares issued pursuant to the Evolution Robotics, Inc. 2007 Stock Plan, acquired by the Company as part of the acquisition of Evolution Robotics, Inc., on October 1, 2012. |
(4) | Includes 712,954 shares of common stock issuable upon the exercise of outstanding options. |
Recommendation of the
BoardBoard:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE“FOR”FOR” THEAPPROVAL OF THE AMENDMENT TO THE IROBOT CORPORATION 2018 STOCK OPTION AND INCENTIVE PLAN
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 76
NON-BINDING, ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Pursuant to Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to vote on a non-binding, advisory resolution approving the named executive officers’ compensation described herein. This proposal, known as a “say-on-pay” proposal, gives the Company’s stockholders the opportunity to express their views on our named executive officers' compensation. At our
20172023 annual meeting of stockholders, our stockholders voted, on a
non-binding, advisory basis, for the Company to hold future
non-binding advisory say-on-pay votes
on the compensation of our named executive officers on an annual basis. In accordance with the advisory vote by our stockholders, we hold a
non-binding, advisory vote on the compensation of our named executive officers every year.
The following proposal, commonly known as a “say on pay” proposal, gives our stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers.
This vote is not intended to address any specific item of compensation or the compensation of any particular officer, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices, as discussed in this
proxy statement.Proxy Statement. Accordingly, we are asking our stockholders to vote “FOR” the following resolution at our annual meeting of stockholders:
“RESOLVED, that the Company’s stockholders approve, on
ana non-binding, advisory basis, the compensation of the Company’s named executive officers, as disclosed in this
proxy statement,Proxy Statement pursuant to Item 402 of Regulation S-K, including
in the Compensation Discussion and Analysis, compensation tables and
related narrative discussion.”
Before you vote, we recommend that you read the
Compensation“Compensation Discussion and
Analysis and Executive Compensation Summary sectionsAnalysis” section of this
proxy statementProxy Statement for additional details on the Company’s executive compensation programs and philosophy.
This vote is advisory, and therefore not binding on the Company, the compensation and talent committee or our board of directors. However, our board of directors and our compensation and talent committee value the opinions of our stockholders and intend to take into account the outcome of the vote when considering future compensation decisions for our named executive officers.officers
.
Recommendation of the
BoardBoard:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”FOR” THE APPROVAL, ON ANA NON-BINDING, ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 77
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial ownership of the Company’s common stock as of March 9, 2018:11, 2024 by: (i) by each person who is known by the Company to beneficially own more than 5% of the outstanding shares of common stock; (ii) by each director or nominee of the Company; (iii) by each named executive officer of the Company; and (iv) by all directors and executive officers of the Company as a group. Unless otherwise noted below, the address of each person listed on the table is c/o iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730. | | | | | | | | |
Name of Beneficial Owner | | | | Shares Beneficially
Owned(1) | | | | Percentage of Shares
Beneficially
Owned(2) |
| | | | |
BlackRock, Inc.(3) 55 East 52nd St. New York, NY 10055 | | | | 3,778,273 | | | | 13.48% |
| | | | |
The Vanguard Group, Inc.(4) 100 Vanguard Boulevard Malvern, PA 19355 | | | | 3,211,936 | | | | 11.46% |
| | | | |
Colin M. Angle(5) | | | | 608,387 | | | | 2.17% |
| | | | |
Alison Dean(6) | | | | 64,750 | | | | * |
| | | | |
Christian Cerda(7) | | | | 75,419 | | | | * |
| | | | |
Russell J. Campanello(8) | | | | 101,278 | | | | * |
| | | | |
Glen D. Weinstein(9) | | | | 77,056 | | | | * |
| | | | |
Mohamad Ali | | | | 9,052 | | | | * |
| | | | |
Michael Bell | | | | 4,385 | | | | * |
| | | | |
Ronald Chwang(10) | | | | 11,276 | | | | * |
| | | | |
Deborah G. Ellinger | | | | 16,504 | | | | * |
| | | | |
Elisha Finney(11) | | | | 960 | | | | * |
| | | | |
Andrew Miller | | | | 499 | | | | * |
| | | | |
Michelle V. Stacy | | | | 14,276 | | | | * |
| | | | |
All executive officers, directors and nominees as a group (12 individuals) | | | | 983,842 | | | | 3.51% |
| | | | | | | | |
| Name of Beneficial Owner | Shares Beneficially Owned(1) | Percentage of Shares Beneficially Owned(2) |
| BlackRock, Inc.(3) | 4,763,619 | 16.75% |
| The Vanguard Group(4) | 2,986,960 | 10.50% |
| PRIMECAP Management Company(5) | 1,761,755 | 6.19% |
| Mohamad Ali | 25,378 | * |
| Colin Angle(6) | 147,267 | * |
| Karen Golz | 6,285 | * |
| Dr. Ruey-Bin Kao | 12,005 | * |
| Andrew Miller | 12,102 | * |
| Eva Manolis | 11,713 | * |
| Michelle Stacy | 20,457 | * |
| Russell Campanello(7) | 46,961 | * |
| Faris Habbaba | 31,147 | * |
| Glen Weinstein(8) | 165,664 | * |
| Julie Zeiler | 35,610 | * |
| All executive officers, directors and nominees as a group (13 individuals)(9) | 580,734 | 2.04% |
| | | | | |
| |
| * | Represents less than 1% of the outstanding common stock. |
| |
| (1) | Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to shares. Unless otherwise indicated below, to the knowledge of the Company, all persons listed below have sole voting and investment power with respect to their shares of common stock, except to the extent authority is shared by spouses under applicable law. Pursuant to the rules of the SEC, the number of shares of common stock deemed outstanding includes (i) shares issuable pursuant to options held by the respective person or group that are currently exercisable or may be exercised within 60 days of March 9, 201811, 2024 and (ii) shares issuable pursuant to restricted stock units held by the respective person or group that vest within 60 days of March 9, 2018.11, 2024. |
| (2) | Applicable percentage of ownership as of March 9, 201811, 2024 is based upon 28,029,77128,444,145 shares of common stock outstanding. |
Notice of Annual Meeting of Stockholdersand iRobot 2024 Proxy Statement
78
| | | | | |
| (3) | BlackRock, Inc. has sole voting power with respect to 3,709,0584,710,470 shares and sole dispositive power with respect to 3,778,2734,763,619 shares. The address of BlackRock, Inc. is 55 East 52nd Street,50 Hudson Yards, New York, NY 10055. |
| 10001. This information has been obtained from a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 23, 2018. |
Notice of Annual Meeting of Stockholders and iRobot 2018 Proxy Statement
(4) | The Vanguard Group Inc. has sole voting power with respect to 51,7530 shares, shared voting power with respect to 6,20046,936 shares, sole dispositive power with respect to 3,156,0832,912,486 shares and shared dispositive power with respect to 55,85374,474 shares. Vanguard Fiduciary Trust Company (“VFTC”), a wholly-owned subsidiaryThe address of The Vanguard Group Inc., is the beneficial owner of 49,653 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. (“VIA”), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 8,300 shares as a result of its serving as investment manager of Australian investment offerings. The address of each reporting entity is 100 Vanguard Boulevard, Malvern, PA 19355. This information has been obtained from a Schedule 13G/A filed by The Vanguard Group Inc. with the SEC on February 9, 2018.13, 2024. |
| (5) | The address of PRIMECAP Management Company is 177 E. Colorado Blvd., 11th Floor, Pasadena, CA 91105. This information has been obtained from a Schedule 13G/A filed by PRIMECAP Management Company with the SEC on February 12, 2024. |
| (6) | Includes 177,207 shares issuable upon exercise of stock options and 21,4904,541 shares issuable upon vesting of restricted stock units.units and 14,767 shares held by the Colin M. Angle 2011 Trust, for which Mr. Angle serves as trustee. Mr. Angle disclaims beneficial ownership of the securities held by the Colin M. Angle 2011 Trust in excess of his pecuniary interest therein. |
(6)(7) | Includes 6,822 shares issuable upon exercise of stock options and 7,9211,238 shares issuable upon vesting of restricted stock units. |
(7)(8) | Includes 35,782 shares issuable upon exercise of stock options and 6,9361,341 shares issuable upon vesting of restricted stock units. |
(8)(9) | Includes 35,325 shares issuable upon exercise of stock options and 3,7738,823 shares issuable upon vesting of restricted stock units. |
(9) | Includes 20,546 shares issuable upon exercise of stock options and 4,882 shares issuable upon vesting of restricted stock units. |
(10) | Includes 79,210 shares held in a trust for the benefit of certain of Dr. Chwang’s family members. Asco-trustees of the family trust, shares voting and dispositive power over the shares held by the trust with Dr. Chwang’s spouse. |
(11) | Includes 960 shares issuable upon vesting of restricted stock units. |
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 79
ADDITIONAL INFORMATION
Other Matters
The board of directors knows of no other matters to be brought before the annual meeting. If any other matters are properly brought before the annual meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in accordance with their best judgment on such matters, under applicable laws.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single Notice or other proxy materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
Brokers with account holders who are Company stockholders may be “householding” our proxy materials. A single Notice or other proxy materials may be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you notify your broker or the Company that you no longer wish to participate in “householding.”
If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice or other proxy materials, you may (1) notify your broker, (2) direct your written request to: iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730, Attention: Secretary or (3) contact our Investor Relations department by telephone at (781) 430-3003. Stockholders who currently receive multiple copies of the Notice or other proxy materials at their address and would like to request “householding” of their communications should contact their broker. In addition, the Company will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of the annual report and Proxy Statement to a stockholder at a shared address to which a single copy of the documents was delivered.
Proposals of stockholders intended for inclusion in the
proxy statementProxy Statement to be furnished to all stockholders entitled to vote at our
20192025 annual meeting of stockholders, pursuant to Rule
14a-8 promulgated under the Exchange Act by the
Securities and Exchange Commission,SEC, must be received at the Company’s principal executive offices not later than
[●], 2018.December 10, 2024. Stockholders who meet the applicable eligibility requirements under the proxy access provision of our
by-laws and wish to include nominees for our board of directors in the Company’s
proxy statementProxy Statement for the
20192025 annual meeting, or stockholders who wish to make a proposal at the
20192025 annual meeting (other than a proposal made pursuant to Rule
14a-8 or pursuant to the proxy access provision of our
by-laws), must in each case notify us between
[●], 2019January 23, 2025 and
[●], 2019.February 22, 2025. If a stockholder who wishes to present a proposal fails to notify us by
[●], 2019February 22, 2025 and such proposal is brought before the
20192025 annual meeting, then under the
Securities and Exchange Commission’sSEC’s proxy rules, the proxies solicited by management with respect to the
20192025 annual meeting will confer discretionary voting authority with respect to the stockholder’s proposal on the persons selected by management to vote the proxies. If a stockholder makes a timely notification, the proxies may still exercise discretionary voting authority under circumstances consistent with the SEC’s proxy rules. In
addition, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 24, 2025. In order to curtail controversy as to the date on which we received a proposal, it is suggested that proponents submit their proposals by Certified Mail, Return Receipt Requested, to iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730, Attention: Secretary.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than ten percent of a registered class of our equity securities We also encourage you to file reports of ownership and changes in ownership with the SEC. Such persons are required by regulations of the SECsubmit any such proposals via email to furnish us with copies of all such filings. Based solely on our review of copies of such filings we believe that all such persons complied on a timely basis with all Section 16(a) filing requirements during the fiscal year ended December 30, 2017, except that Messrs. Angle, Cerda, Campanello and Weinstein and Mses. Dean and Finney each did not timely file a Form 4 with respect to one transaction.
tdrake@irobot.com.
EXPENSES AND SOLICITATION
The Company will pay all costs of soliciting these proxies. In addition, some of our officers and employees may solicit proxies by telephone or in person. We will reimburse brokers for the expenses they incur in forwarding the proxy materials to you. The Company has retained Georgeson LLCWe may also retain an independent proxy solicitation firm to assist us within the solicitation of proxies for a fee not to exceed $11,000, plus reimbursement forout-of-pocket expenses.proxies.
Notice of Annual Meeting of Stockholdersand iRobot 20182024 Proxy Statement 80
TOTAL STOCKHOLDER RETURN
The graph below matches the cumulative 5-Year total return of holders of iRobot
CorporationAdjusted EBITDA Reconciliation to GAAP
(unaudited,Corporation's common stock with the cumulative total returns of the NASDAQ Composite index and a customized peer group of fifteen companies that includes: 3D Systems Corp, Alarm.Com Holdings Inc, Corsair Gaming, INc., Dolby Laboratories Inc, Faro Technologies Inc, Garmin Ltd, GoPro Inc, Logitech International S.A., Netgear Inc, Novanta Inc, Roku Inc, Sonos Inc, Trimble Inc, Universal Electronics Inc. and Vizio Holding Corp.. The graph assumes that the value of the investment in thousands)
| | | | | | | | |
| | | For the twelve months ended | |
| | |
| | | December 30,
2017 | | | December 31,
2016 | |
Net income | | $ | 50,964 | | | $ | 41,939 | |
Interest income, net | | | (1,649) | | | | (934) | |
Income tax expense | | | 25,402 | | | | 19,422 | |
Depreciation | | | 12,284 | | | | 9,974 | |
Amortization | | | 13,215 | | | | 3,632 | |
| | | | | | | | |
EBITDA | | | 100,216 | | | | 74,033 | |
Stock-based compensation expense | | | 19,751 | | | | 15,995 | |
Net merger, acquisition and divestiture expense | | | 3,109 | | | | 1,848 | |
Gain on business acquisition | | | (2,243) | | | | — | |
Net intellectual property litigation expense | | | 5,068 | | | | 665 | |
Restructuring expense | | | — | | | | 1,857 | |
| | | | | | | | |
Adjusted EBITDA | | $ | 125,901 | | | $ | 94,398 | |
| | | | | | | | |
Adjusted EBITDA as a % of revenue | | | 14.2% | | | | 14.3% | |
Useour common stock, in each index, and in the peer group (including reinvestment ofNon-GAAP Financial Measures
In evaluating its business, dividends) was $100 on 12/31/2018 and tracks it through 12/31/2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 12/18 | | 12/19 | | 12/20 | | 12/21 | | 12/22 | | 12/23 |
| iRobot Corporation | | 100.00 | | | 60.46 | | | 95.88 | | | 78.67 | | | 57.48 | | | 46.21 | |
| Nasdaq Composite | | 100.00 | | | 136.16 | | | 198.10 | | | 242.03 | | | 163.28 | | | 236.17 | |
| Peer Group | | 100.00 | | | 154.31 | | | 271.60 | | | 267.46 | | | 144.78 | | | 194.48 | |
Notice of Annual Meeting of Stockholdersand iRobot considers and uses Adjusted EBITDA as a supplemental measure2024 Proxy Statement
81
Table of its operating performance. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, net merger, acquisition and divestiture expense, gain on business acquisition, net intellectual property litigation expense, and restructuring expense. The Company also presents Adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company’s operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, Adjusted EBITDA does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than iRobot, limiting their usefulness as comparative tools. iRobot compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally.
Contents
PROPOSED AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION
The following are proposed changes to our amended and restated certificate of incorporation as described in
Proposals 3, 4 and 5. The text indicated by underline will be added, and the text indicated by strike-through will be deleted.Proposal 3.
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**********ANNEX A
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
iRobot Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the lawsGeneral Corporation Law of the State of Delaware (the “Corporation”“DGCL”), does hereby certifies as follows:certify:
1. The namePursuant to Section 242 of the Corporation is iRobot Corporation. The date of the filing of its originalDGCL, this Certificate of Incorporation with the Secretary of State of the State of Delaware was December 20, 2000 (the “Original Certificate”). The name under which the Corporation filed the Original Certificate was iRobot Corporation.2. ThisAmendment to Amended and Restated Certificate of Incorporation (the “Certificate”(this “
Amendment”) amends restates and integrates the provisions of the Amended and Restated Certificate of Incorporation that was filed with the Secretary of State of the StateCorporation (the “Certificate”).
2. This Amendment has been approved and duly adopted by the Corporation’s Board of
Delaware onOctober 26November 15, 2005 (the “AmendedDirectors and
Restated Certificate”), and was duly adoptedstockholders in accordance with the provisions of
SectionsSection 242
and 245 of the
Delaware General Corporation Law (the “DGCL”).DGCL.
3. The textCertificate is hereby amended as follows:
A. In Article VI, Section 5, the phrase “holders of 75% or more” is hereby deleted and replaced with the Amended and Restated Certificateword “majority”.
B. Article VIII, Section 2 is hereby amended and restated in its entirety to
provide as herein set forth in full.ARTICLE I
The name of the Corporation is iRobot Corporation.
ARTICLE II
The address of the Corporation’s registered office in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The name of its registered agent at such address is Corporation Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
The total number of shares of capital stock which the Corporation shall have authority to issue is One Hundred Five Million (105,000,000) shares, of which (i) One Hundred Million (100,000,000) shares shall be a class designated as common stock, par value $0.01 per share (the “Common Stock”), and (ii) Five Million (5,000,000) shares shall be a class designated as undesignated preferred stock, par value $0.01 per share (the “Undesignated Preferred Stock”).
The number of authorized shares of the class of Common Stock and Undesignated Preferred Stock may from time to time be increased or decreased (but not below the number of shares outstanding) by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote, without a vote of the holders of the Undesignated Preferred Stock (except as otherwise provided in any certificate of designations of any series of Undesignated Preferred Stock).
The powers, preferences and rights of, and the qualifications, limitations and restrictions upon, each class or series of stock shall be determined in accordance with, orread as set forth below in, this Article IV.
A.COMMON STOCK
Subject to all the rights, powers and preferences of the Undesignated Preferred Stock and except as provided by law or in this Article IV (or in any certificate of designations of any series of Undesignated Preferred Stock):
(a) the holders of the Common Stock shall have the exclusive right to vote for the election of directors of the Corporation (the “Directors”) and on all other matters requiring stockholder action, each outstanding share entitling the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote;provided,however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate (or on any amendment to a certificate of designations of any series of Undesignated Preferred Stock) that alters or changes the powers, preferences, rights or other terms of one or more outstanding series of Undesignated Preferred Stock if the holders of such affected series are entitled to vote, either separately or together with the holders of one or more other such series, on such amendment pursuant to this Certificate (or pursuant to a certificate of designations of any series of Undesignated Preferred Stock) or pursuant to the DGCL;
(b) dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the Corporation legally available for the payment of dividends, but only when and as declared by the Board or any authorized committee thereof; and
(c) upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock.
B.UNDESIGNATED PREFERRED STOCK
The Board of Directors or any authorized committee thereof is expressly authorized, to the fullest extent permitted by law, to provide for the issuance of the shares of Undesignated Preferred Stock in one or more series of such stock, and by filing a certificate pursuant to applicable law of the State of Delaware, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof.
below:
ARTICLE V
STOCKHOLDER ACTION
1. Action without Meeting. Except as otherwise provided herein, any action required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders and may not be taken or effected by a written consent of stockholders in lieu thereof.
2. Special Meetings.Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock, special meetings of the stockholders of the Corporation may be called only by the Board of Directors acting pursuant to a resolution approved by the affirmative vote of a majority of the Directors then in office. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.
ARTICLE VI
DIRECTORS
1. General. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors except as otherwise provided herein or required by law.
2. Election of Directors. Election of Directors need not be by written ballot unless theBy-laws of the Corporation (the
“By-laws”) shall so provide.3. Number of Directors; Term of Office. The number of Directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors.
The Directors, other than those who may be elected by the holders of any series of Undesignated Preferred Stock, shall be classified, with respect tothe term for which they severally hold office, into three classes, as nearly equal in number as reasonably possible. The initial Class I Directors of theCorporation shall be Colin M. Angle and Ronald Chwang; the initial Class II Directors of the Corporation shall be Helen Greiner, George C. McNamee andPeter Meekin; and the initial Class III Directors of the Corporation shall be Rodney A. Brooks, Andrea Geisser and Jacques S. Gansler. The initial Class IDirectors shall serve for a term expiring at the annual meeting of stockholders to be held in 2006, the initial Class II Directors shall serve for a term expiring atthe annual meeting of stockholders to be held in 2007, and the initial Class III Directors shall serve for a term expiring at the annual meeting of stockholders to be held in 2008. At each annual meeting of stockholders, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election.Subject to the rights, if any, of the holders of any series ofUndesignated Preferred Stock, at the annual meeting of stockholders of the Corporation that is held in calendar year 2019 and at each annual meeting ofstockholders of the Corporation thereafter, all Directors shall be elected to hold office for aone-year term expiring at the next annual meeting ofstockholders of the Corporation.Notwithstanding the foregoing,the Directorselected to each class shall hold office until their successors are duly elected and qualified or until their earlier resignation, death or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of Article IV of this Certificate, the holders of any one or more series of Undesignated Preferred Stock shall have the right, voting separately as a series or together with holders of other such series, to elect Directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate and any certificate of designations applicable thereto.
4. Vacancies. Subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock to elect Directors and to fill vacancies in the Board of Directors relating thereto, any and all vacancies in the Board of Directors, however occurring, including, without limitation, by reason of an increase in size of the Board of Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely and exclusively by the affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors, and not by the stockholders. Any Director appointed in accordance with the preceding sentence shall hold officefor a term expiring at the next annual meeting of stockholders of the Corporation held after such appointmentfor the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal.Subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock to elect Directors, when the number of Directors is increased or decreased, the Board of Directors shall, subject to Article VI.3 hereof, determine the class or classes to which the increased or decreased number of Directors shall be apportioned; provided,however, that no decrease in the number of Directors shall shorten the term of any incumbent Director. In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, shall exercise the powers of the full Board of Directors until the vacancy is filled.
5. Removal. Subject to the rights, if any, of any series of Undesignated Preferred Stock to elect Directors and to remove any Director whom the holders of any such stock have the right to elect, any Director (including persons elected by Directors to fill vacancies in the Board of Directors) may be removed from office(i) only withwithoutcauseand (ii) only by the affirmative vote of theholders of 75% or moremajorityof the shares then entitled to vote at an election of Directors. At least forty-five (45) days prior to any meeting of stockholders at which it is proposed that any Director be removed from office, written notice of such proposed removaland the alleged grounds thereof shall be sent to the Director whose removal will be considered at the meeting.
ARTICLE VII
LIMITATION OF LIABILITY
A Director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (a) for any breach of the Director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL or (d) for any transaction from which the Director derived an improper personal benefit. If the DGCL is amended after the effective date of this Certificate to authorize corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Any repeal or modification of this Article VII by either of (i) the stockholders of the Corporation or (ii) an amendment to the DGCL, shall not adversely affect any right or protection existing at the time of such repeal or modification with respect to any acts or omissions occurring before such repeal or modification of a person serving as a Director at the time of such repeal or modification.
ARTICLE VIII
AMENDMENT OFBY-LAWS
1. Amendment by Directors. Except as otherwise provided by law, theBy-laws of the Corporation may be amended or repealed by the Board of Directors by the affirmative vote of a majority of the Directors then in office.
2.Amendment by Stockholders. TheBy-laws of the Corporation may be amended or repealed at any annual meeting of stockholders, or special meeting of stockholders called for such purpose as provided in theBy-laws, by the affirmative vote ofat least 75%outstanding shares(with (with “abstentions”, “brokernon-votes” and “withheld” votes not counted as a vote either “for” or “against” such amendment or repeal); provided, however, that if the Board ofDirectors recommends that stockholders approve such amendment or repeal at such meeting of stockholders, such amendment or repeal shall only require theaffirmative vote of the majority of the outstanding shares entitled.”
C. Article IX is hereby amended and restated in its entirety to
vote on such amendment or repeal, voting togetherread as
a single class.ARTICLE IX
set forth below:
“AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend or repeal this Certificate in the manner now or hereafter prescribed by statute and this Certificate, and all rights conferred upon stockholders herein are granted subject to this reservation. Whenever any vote of the holders of voting stock is required to amend or repeal any provision of this Certificate, and in addition to any other vote of holders of voting stock that is required by this Certificate or by law, such amendment or repeal shall require the affirmative vote of the majority of the outstanding shares entitled to vote on such amendment or repeal, and the affirmative vote of the majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose; provided,purpose.”
***
PROPOSED AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION
The following are proposed changes to our amended and restated certificate of incorporation as described in Proposal 4.
***************
ANNEX B
CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
iROBOT CORPORATION
iRobot Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:
1. Pursuant to Section 242 of the DGCL, this Certificate of Amendment to Amended and Restated Certificate of Incorporation (this “Amendment”) amends the provisions of the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”).
2. This Amendment has been approved and duly adopted by the Corporation’s Board of Directors and stockholders in accordance with the provisions of Section 242 of the DGCL.
3. The Certificate is hereby amended as follows:
Article VI, Sections 3, 4 and 5 are hereby amended and restated in their entirety to read as set forth below:
“3. Number of Directors; Term of Office. The number of Directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors.
Subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock, at the annual meeting of stockholders of the Corporation that is held in calendar year 2023 and at each annual meeting of stockholders of the Corporation thereafter, all Directors shall be elected to hold office for a one-year term expiring at the next annual meeting of stockholders of the Corporation. Notwithstanding the foregoing, Directors shall hold office until their successors are duly elected and qualified or until their earlier resignation, death or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of Article IV of this Certificate, the holders of any one or more series of Undesignated Preferred Stock shall have the right, voting separately as a series or together with holders of other such series, to elect Directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate and any certificate of designations applicable thereto.
4. Vacancies. Subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock to elect Directors and to fill vacancies in the Board of Directors relating thereto, any and all vacancies in the Board of Directors, however thatoccurring, including, without limitation, by reason of an increase in size of the Board of Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely and exclusively by the affirmative vote of nota majority of the remaining Directors then in office, even if less than 75%a quorum of the outstandingBoard of Directors, and not by the stockholders. Any Director appointed in accordance with the preceding sentence shall hold office for a term expiring at the next annual meeting of stockholders of the Corporation held after such appointment and until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal. In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, shall exercise the powers of the full Board of Directors until the vacancy is filled.
5. Removal. Subject to the rights, if any, of any series of Undesignated Preferred Stock to elect Directors and to remove any Director whom the holders of any such stock have the right to elect, any Director (including persons elected by Directors to fill vacancies in the Board of Directors) may be removed from office without cause by the affirmative vote of the holders of 75% or more of the shares then entitled to vote onat an election of Directors. At least forty-five (45) days prior to any meeting of stockholders at which it is proposed that any Director be removed from office, written notice of such proposed removal shall be sent to the Director whose removal will be considered at the meeting.”
***
PROPOSED AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION
The following are proposed changes to our amended and restated certificate of incorporation as described in Proposal 5.
***************
ANNEX C
CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
iROBOT CORPORATION
iRobot Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:
1. Pursuant to Section 242 of the DGCL, this Certificate of Amendment to Amended and Restated Certificate of Incorporation (this “Amendment”) amends the provisions of the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”).
2. This Amendment has been approved and duly adopted by the Corporation’s Board of Directors and stockholders in accordance with the provisions of Section 242 of the DGCL.
3. The Certificate is hereby amended as follows:
Article V, Section 2 is hereby amended and restated in its entirety to read as set forth below:
“2. Special Meetings. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.”
***
***
PROPOSED AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION
The following are proposed changes to our amended and restated certificate of incorporation as described in Proposal 6.
***************
ANNEX D
CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
iROBOT CORPORATION
iRobot Corporation (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:
1.Pursuant to Section 242 of the DGCL, this Certificate of Amendment to Amended and Restated Certificate of Incorporation (this “Amendment”) amends the provisions of the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”).
2.This Amendment has been approved and duly adopted by the Corporation’s Board of Directors and stockholders in accordance with the provisions of Section 242 of the DGCL.
3.The Certificate is hereby amended as follows:
A new Article X is hereby added immediately following Article IX to read as set forth below:
“ARTICLE X
LIMITATION OF OFFICER LIABILITY
To the fullest extent permitted by the DGCL, an Officer (as defined below) of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as an officer of the Corporation, except for liability (a) for any breach of the Officer’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) for any transaction from which the Officer derived an improper personal benefit, or (d) arising from any claim brought by or in the right of the Corporation.If the DGCL is amended after the effective date of this Certificate to authorize corporate action further eliminating or limiting the personal liability of Officers, then the liability of an Officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. For purposes of this ARTICLE X, “Officer” shall mean an individual who has been duly appointed as an officer of the Corporation and who, at the time of an act or omission as to which liability is asserted, is deemed to have consented to service of process to the registered agent of the Corporation as contemplated by 10 Del. C. § 3114(b).
Any amendment, repeal or modification of this ARTICLE X by either of (i) the stockholders of the Corporation or (ii) an amendment to the DGCL, shall not adversely affect any right or protection existing at the time of such amendment, repeal or modification with respect to any acts or omissions occurring before such amendment, repeal andor modification of a person serving as an Officer at theaffirmative vote time of not less than 75%such amendment, repeal or modification.”
***
PROPOSED AMENDMENTS TO THE 2018 PLAN
The following are proposed changes to the
outstanding shares of each class entitled to vote thereon2018 Plan as
a class, shall be required to amend or repeal anyprovision of Article V, Article VI, Article VII, Article VIII or Article IX of this Certificate.described in Proposal 7.
ANNEX BE
THIRD AMENDMENT
TO THE
IROBOT CORPORATION
2018 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is
WHEREAS, iRobot Corporation (the “Company”) maintains the iRobot Corporation 2018 Stock Option and Incentive Plan (the “Plan”). The purpose, which was previously adopted by the Board of Directors on March 26, 2018 and approved by the Plan is to encourage and enable the officers, employees,Non-Employee Directors and Consultants of iRobot Corporation (the “Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its businesses to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with thosestockholders of the Company on May 23, 2018;
WHEREAS, the Plan was amended effective May 20, 2020 and
its stockholders, thereby stimulating their efforts onMay 27, 2022 to increase the
Company’s behalf and strengthening their desire to remain with the Company.The following terms shall be defined as set forth below:
“Act” means the Securities Actnumber of 1933, as amended, and the rules and regulations thereunder.
“Administrator” means either the Board or the compensation committee of the Board or a similar committee which is comprised of not less than twoNon-Employee Directors who are independent.
“Award” or“Awards,” except where referring to a particular category of grantshares reserved under the Plan, shall include Incentive Stock Options,Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, and Dividend Equivalent Rights.
“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Certificate is subject to the terms and conditions of the Plan.
“Board” meansPlan;
WHEREAS, the Board of Directors of the
Company.“Cash-Based Award” means an Award entitlingCompany believes that the recipient to receive a cash-denominated payment.
“Code” meansnumber of shares of common stock of the Internal Revenue Code of 1986,Company (“Common Stock”) remaining available for issuance under the Plan, as amended and any successor Code, and related rules, regulations and interpretations.
“Consultant” means any natural personhas become insufficient for the Company’s anticipated future needs under the Plan;
WHEREAS, Section 16 of the Plan provides that provides bona fide services tothe Board of Directors of the Company withinmay amend the meaningPlan at any time, subject to certain conditions set forth therein; and
WHEREAS, the Board of FormS-8 promulgatedDirectors of the Company has determined that it is in the best interests of the Company to amend the Plan, subject to stockholder approval, to increase both the aggregate number of shares of Common Stock available for issuance under the Securities Act,Plan, and provided, further,the number of shares that a Consultant will include only those persons to whom the issuance of Shares may be registered under FormS-8 promulgated underissued in the Securities Act.“Dividend Equivalent Right” means an Award entitlingform of Incentive Stock Options (as defined in the granteePlan) from
3,395,000 shares to receive credits based on cash dividends that would have been paid on4,295,000 shares.
NOW, THEREFORE:
1.Increase in Shares. Section 3(a) of the Plan is hereby amended by deleting it in its entirety and replacing it with the following:
“The maximum number of shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued toreserved and held by the grantee.“Effective Date” means the date on whichavailable for issuance under the Plan becomes effective as set forth in Section 19.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Global Market, The New York Stock Exchange or another national securities exchange, the determination shall be made by reference4,295,000 shares, subject to the Stock’s closing price on such exchange. If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price.
“Incentive Stock Option” means any Stock Option designated and qualifiedadjustment as an “incentive stock option” as definedprovided in this Section 4223. For purposes of the Code.
“Minimum Vesting Period” means theone-year period following the date of grant of an Award.
“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
“Option” or“Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.
“Restricted Shares” meansthis limitation, the shares of Stock underlying a Restrictedany awards under the Plan or the Company’s 2015 Stock Option and Incentive Plan that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. Notwithstanding the foregoing, the following shares shall not be added to the shares authorized for grant under the Plan: (i) shares tendered or held back upon exercise of an Option or settlement of an Award that remainto cover the exercise price or tax withholding, and (ii) shares subject to a risk of forfeiture or the Company’s right of repurchase.
“Restricted Stock Award” means an Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Restricted Stock Units” means an Award of stock units subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Sale Event” means the consummation of (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Stock of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.
“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
“Service Relationship” means any relationship as an employee, director, or Consultant of the Company or any Subsidiary or any successor entity (e.g., a Service Relationship shall be deemed to continue without interruption in the event an individual’s status changes from full-time employee to part-time employee or Consultant).
“Stock” means the Common Stock, par value $0.01 per share, of the Company, subject to adjustments pursuant to Section 3.
“Stock Appreciation Right” means an Award entitlingRight that are not issued in connection with the recipient to receive shares of Stock (or cash, to the extent explicitly provided for in the applicable Award Certificate) having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise pricestock settlement of the Stock Appreciation Right multiplied byupon exercise thereof. In the number ofevent the Company repurchases shares of Stock with respecton the open market, such shares shall not be added to which the Stock Appreciation Right shall have been exercised.
“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.
“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than ten percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.
“Unrestricted Stock Award” means an Award of shares of Stock freeavailable for issuance under the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any restrictions.
SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
| (a) | Administration of Plan. The Plan shall be administered by the Administrator. |
| (b) | Powers of Administrator. The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority: |
| (i) | to select the individuals to whom Awards may from time to time be granted; |
| (ii) | to determine the time or times of grant, and the extent, if any, of Incentive Stock Options,Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees; |
| (iii) | to determine the number of shares of Stock to be covered by any Award; |
| (iv) | to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the forms of Award Certificates; |
| (v) | to accelerate at any time the exercisability or vesting of all or any portion of any Award in circumstances involving the grantee’s death, disability, retirement or termination of employment or a change in control (including a Sale Event); |
| (vi) | subject to the provisions of Section 5(c), to extend at any time the period in which Stock Options may be exercised; and |
| (vii) | at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan. |
All decisions and interpretationstype or types of the Administrator shall be binding on all persons, including the Company and Plan grantees.
| (c) | Delegation of Authority to Grant Awards. Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive Officer or another executive officer of the Company or a committee comprised of the Chief Executive Officer and another officer or officers of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards to individuals who are (i) not subject to the reporting and other provisions of Section 16 of the Exchange Act and (ii) not members of the delegated committee. Any such delegation by the Administrator shall include a limitation as to the amount of Stock underlying Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan. |
| (d) | Minimum Vesting Period. The vesting period for each Award granted under the Plan must be at least equal to the Minimum Vesting Period; provided, however, that (i) nothing in this Section 2(d) shall limit the Administrator’s authority to accelerate the vesting of Awards as set forth in Section 2(b)(v) above; (ii) notwithstanding the foregoing, up to 5% of the shares of Stock authorized for issuance under the Plan may be utilized for Unrestricted Stock Awards or other Awards with a vesting period that is less than the Minimum Vesting Period (each such Award, an “Excepted Award”); and (iii) notwithstanding the foregoing, annual Awards toNon-Employee Directors that occur in connection with the Company’s annual meeting of stockholders may vest on the date of the Company’s next annual meeting of stockholders; provided, however, that in no event will the vesting period for any such award be less than 50 weeks. Notwithstanding the foregoing, in addition to Excepted Awards, the Administrator may grant Awards that vest (or permit previously granted Awards to vest) within the Minimum Vesting Period (i) if such Awards are granted as substitute Awards in replacement of other Awards (or awards previously granted by an entity being acquired (or assets of which are being acquired)) that were scheduled to vest within the Minimum Vesting Period or (ii) if such Awards are being granted in connection with an elective deferral of cash compensation that, absent a deferral election, otherwise would have been paid to the grantee within the Minimum Vesting Period. |
| (e) | Award Certificate. Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or Service Relationship terminates. |
| (f) | Indemnification. Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s articles or bylaws or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company. |
| (g) | Foreign Award Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be necessary
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| or advisable (and such subplans and/or modifications shall be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or after an Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law. |
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
| (a) | Stock Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 1,750,000 shares, subject to adjustment as provided in this Section 3. For purposes of this limitation, the shares of Stock underlying any awards under the Plan or the Company’s 2015 Stock Option and Incentive Plan that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. Notwithstanding the foregoing, the following shares shall not be added to the shares authorized for grant under the Plan: (i) shares tendered or held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, and (ii) shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right upon exercise thereof. In the event the Company repurchases shares of Stock on the open market, such shares shall not be added to the shares of Stock available for issuance under the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that no more than 1,750,000 sharesAward; provided, however, that no more than 4,295,000 shares of the Stock may be issued in the form of Incentive Stock Options. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company. |
| (b) | Maximum Awards toNon-Employee Directors. Notwithstanding anything to the contrary in this Plan, (i) the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to anyNon-Employee Director in any calendar year shall not exceed $750,000 and (ii) no more than 50,000 shares of Stock may be issued pursuant to Awards toNon-Employee Directors in any calendar year. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with ASC 718 or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions. |
| (c) | Changes in Stock. Subject to Section 3(d) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or othernon-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Stock Options, (ii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iii) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, and (iv) the exercise price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable. The Administrator
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| shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration cash dividends paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares. |
| (d) | Mergers and Other Transactions. In the case of and subject to the consummation of a Sale Event, the parties thereto may cause the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree. To the extent the parties to such Sale Event do not provide for the assumption, continuation or substitution of Awards, upon the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate. In the event of such termination, (i) the Company shall have the option (in its sole discretion) to make or provide for a cash payment to the grantees holding Awards, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of shares of Stock subject to such outstanding Awards (to the extent then vested or, in the case of Options and Stock Appreciation Rights, exercisable at prices not in excess of the Sale Price) and (B) if applicable, the aggregate exercise price (if any) of such outstanding Awards; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights (to the extent then exercisable) held by such grantee, but in such case the Board shall first accelerate the exercisability of such Options and Stock Appreciation Rights prior to termination. Unless otherwise determined by the Board (on the same basis or on different bases as the Board shall specify), any repurchase rights or other rights of the Company that relate to an Option, Stock Appreciation Right or other Award shall continue to apply to consideration, including cash, that has been substituted, assumed, amended or paid for a Stock Option, Stock Appreciation Right or other Award pursuant to this paragraph. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions. |
SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and other employees,Non-Employee Directors and Consultants of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.
SECTION 5. STOCK OPTIONS
| (a) | Award of Stock Options. The Administrator may grant Stock Options under the Plan. Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve. |
Stock Options granted under the Plan may be either Incentive Stock Options orNon-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed aNon-Qualified Stock Option.
Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.
| (b) | Exercise Price. The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date. Notwithstanding the foregoing, Stock Options may be granted with an exercise price per share that is less than 100 percent of the Fair Market Value on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. |
| (c) | Option Term. The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is granted. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years from the date of grant. |
| (d) | Exercisability; Rights of a Stockholder. Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date. Subject to Section 2(b)(v), the Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options. |
| (e) | Method of Exercise. Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods except to the extent otherwise provided in the Option Award Certificate: |
(i) In cash, by certified or bank check or other instrument acceptable to the Administrator;
(ii) Through the delivery (or attestation to the ownership following such procedures as the Company may prescribe) ofauthorized but unissued shares of Stock that are not then subject to restrictions under any Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date;
(iii) By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Company shall prescribe as a condition of such payment procedure; or
(iv) With respect to Stock Options that are not Incentive Stock Options, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercisereacquired by the largest whole numberCompany.”
2.Effective Date of shares with a Fair Market Value that does not exceed the aggregate exercise price.Payment instruments will be received subject to collection. The transferAmendment. This Amendment to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.
| (f) | Annual Limit on Incentive Stock Options. To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute aNon-Qualified Stock Option. |
SECTION 6. STOCK APPRECIATION RIGHTS
| (a) | Award of Stock Appreciation Rights. The Administrator may grant Stock Appreciation Rights under the Plan. A Stock Appreciation Right is an Award entitling the recipient to receive shares of Stock (or cash, to the extent explicitly provided for in the applicable Award Certificate) having a value equal to the excess of the Fair Market Value of a share of Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised. |
| (b) | Exercise Price of Stock Appreciation Rights. The exercise price of a Stock Appreciation Right shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant. |
| (c) | Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan. |
| (d) | Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator. The term of a Stock Appreciation Right may not exceed ten years. |
SECTION 7. RESTRICTED STOCK AWARDS
| (a) | Nature of Restricted Stock Awards. The Administrator may grant Restricted Stock Awards under the Plan. A Restricted Stock Award is any Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant. Conditions may be based on continuing employment (or other Service Relationship) and/or achievement ofpre-established performance goals and objectives. |
| (b) | Rights as a Stockholder. Upon the grant of the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Shares and receipt of dividends; provided that dividends shall accrue, but not be paid, on Restricted Stock Awards subject to either time-based or performance-based vesting criteria until the applicable vesting provisions lapse. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Shares shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Shares are vested as provided in Section 7(d) below, and (ii) certificated Restricted Shares shall remain in the possession of the Company until such Restricted Shares are vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe. |
| (c) | Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Certificate. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, if a grantee’s employment (or other Service Relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Shares that have not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed
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| to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other Service Relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a stockholder. Following such deemed reacquisition of Restricted Shares that are represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration. |
| (d) | Vesting of Restricted Shares. The Administrator at the time of grant shall specify the date or dates and/or the attainment ofpre-established performance goals, objectives and other conditions on which thenon-transferability of the Restricted Shares and the Company’s right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of suchpre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Shares and shall be deemed “vested.” |
SECTION 8. RESTRICTED STOCK UNITS
| (a) | Nature of Restricted Stock Units. The Administrator may grant Restricted Stock Units under the Plan. A Restricted Stock Unit is an Award of stock units that may be settled in shares of Stock (or cash, to the extent explicitly provided for in the Award Certificate) upon the satisfaction of such restrictions and conditions at the time of grant. Conditions may be based on continuing employment (or other Service Relationship) and/or achievement ofpre-established performance goals and objectives. The terms and conditions of each such Award shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. Except in the case of Restricted Stock Units with a deferred settlement date that complies with Section 409A, at the end of the vesting period, the Restricted Stock Units, to the extent vested, shall be settled in the form of shares of Stock. Restricted Stock Units with deferred settlement dates are subject to Section 409A and shall contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order to comply with the requirements of Section 409A. |
| (b) | Election to Receive Restricted Stock Units in Lieu of Compensation. The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Stock Units. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Stock Units based on the Fair Market Value of Stock on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate. Any Restricted Stock Units that are elected to be received in lieu of cash compensation shall be fully vested, unless otherwise provided in the Award Certificate. |
| (c) | Rights as a Stockholder. A grantee shall have the rights as a stockholder only as to shares of Stock acquired by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the stock units underlying his Restricted Stock Units, subject to the provisions of Section 11 and such terms and conditions as the Administrator may determine. |
| (d) | Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, a grantee’s right in all Restricted Stock Units that have not vested shall automatically terminate upon the grantee’s termination of employment (or other Service Relationship) with the Company and its Subsidiaries for any reason. |
SECTION 9. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Administrator may grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan. An Unrestricted Stock Award is an Award pursuant to which the grantee may receive shares of Stock free of any restrictions under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.
SECTION 10. CASH-BASED AWARDS
Grant of Cash-Based Awards. The Administrator may grant Cash-Based Awards under the Plan. A Cash-Based Award is an Award that entitles the grantee to a payment in cash upon the attainment of specified performance goals. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash.
SECTION 11. DIVIDEND EQUIVALENT RIGHTS
| (a) | Dividend Equivalent Rights. The Administrator may grant Dividend Equivalent Rights under the Plan. A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other Award to which it relates) if such shares had been issued to the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Stock Units or as a freestanding award. Dividend Equivalent Rights may not be granted as a component of a Stock Option award or Stock Appreciation Right award.The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of an Award of Restricted Stock Units shall provide that such Dividend Equivalent Right shall be settled only upon settlement or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award. |
| (b) | Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 16 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent Rights shall automatically terminate upon the grantee’s termination of employment (or other Service Relationship) with the Company and its Subsidiaries for any reason. |
SECTION 12. TRANSFERABILITY OF AWARDS
| (a) | Transferability. Except as provided in Section 12(b) below, during a grantee’s lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity. No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void. |
| (b) | Administrator Action. Notwithstanding Section 12(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by subsequent written approval that the grantee (who is an employee or director) may transfer his or herNon-Qualified Stock Options to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award. In no event may an Award be transferred by a grantee for value. |
| (c) | Family Member. For purposes of Section 12(b), “family member” shall mean a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,mother-in-law,father-in-law,son-in-law,daughter-in-law,brother-in-law, orsister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than 50 percent of the voting interests. |
| (d) | Designation of Beneficiary. To the extent permitted by the Company, each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death; provided, however, that in no event may a grantee designate a third party financial institution as a beneficiary to exercise any Award or receive any payment under any Award. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate. |
SECTION 13. TAX WITHHOLDING
| (a) | Payment by Grantee. Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee or direct that the proceeds from a sale of Stock on behalf of the grantee be paid over to the Company to satisfy any such tax withholding obligations. The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee. |
| (b) | Payment in Stock. In the discretion of the Administrator, the Company’s required tax withholding obligation may be satisfied, in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due; provided, however, that the amount withheld does not exceed the maximum statutory tax rate or such lesser amount as is necessary to avoid adverse accounting treatment or as determined by the Administrator. The Administrator may also require Awards to be subject to mandatory share withholding up to the required withholding amount. For purposes of share withholding, the Fair Market Value of withheld shares shall be determined in the same manner as the value of Stock includible in income of the Participants. The required tax withholding obligation may also be satisfied, in whole or in part, by an arrangement whereby a certain number of shares of Stock issued pursuant to any Award are immediately sold and proceeds from such sale are remitted to the Company in an amount that would satisfy the withholding amount due. |
SECTION 14. SECTION 409A AWARDS
To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any 409A Award may not be accelerated except to the extent permitted by Section 409A.
SECTION 15. TERMINATION OF SERVICE RELATIONSHIP, TRANSFER, LEAVE OF ABSENCE, ETC.
| (a) | Termination of Service Relationship. If the grantee’s employment or other Service Relationship is with a Subsidiary and such Subsidiary ceases to be a Subsidiary, the grantee shall be deemed to have terminated his or her Service Relationship for purposes of the Plan. |
| (b) | For purposes of the Plan, the following events shall not be deemed a termination of employment or other Service Relationship: |
(i) a transfer to the employment or service of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or
(ii) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right tore-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.
SECTION 16. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in Section 3(c) or 3(d), without prior stockholder approval, (a) in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or (b) effect repricing of Stock Options or Stock Appreciation Rights through cancellation andre-grants or cancellation of Stock Options or Stock Appreciation Rights in exchange for cash or other Awards. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 16 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(c) or 3(d).
SECTION 17. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other
arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.
SECTION 18. GENERAL PROVISIONS
| (a) | No Distribution. The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof. |
| (b) | Issuance of Stock. To the extent certificated, stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any evidence of book entry or certificates evidencing shares of Stock pursuant to the exercise or settlement of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded. Any Stock issued pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate or notations on any book entry to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator. |
| (c) | Stockholder Rights. Until Stock is deemed delivered in accordance with Section 18(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award. |
| (d) | Other Compensation Arrangements; No Employment Rights. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment (or other Service Relationship) with the Company or any Subsidiary. |
| (e) | Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be subject to the Company’s insider trading policies and procedures, as in effect from time to time. |
| (f) | Clawback Policy. Awards under the Plan shall be subject to the Company’s clawback policy, as in effect from time to time. |
| (g) | Awards Granted Under Prior Plans. Notwithstanding anything herein to the contrary, equity awards granted under the Company’s prior equity incentive plans, including, without limitation the 2015
|
| Plan, the iRobot Corporation Amended and Restated 2004 Stock Option and Incentive Plan, the iRobot Corporation 2005 Stock Option and Incentive Plan, as amended, and the Evolution Robotics 2007 Stock Plan (collectively, the “Prior Plans”), shall continue to be governed by the terms and conditions of the Prior Plan under which such awards were granted |
SECTION 19. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon stockholder approvalthe date that it is approved by the Company’s stockholders in accordance with applicable state law, the Company’s bylawslaws and articles of incorporation, and applicable stock exchange rules. No grants of Stock Options andregulations.
3.Other Provisions. Except as set forth above, all other Awards may be made hereunder after the tenth anniversaryprovisions of the Effective DatePlan shall remain unchanged.
Corporate Office
8 Crosby Drive
Bedford, Massachusetts 01730
Phone: 781.430.3000
Transfer Agent
Computershare Trust
Company, Inc.
P.O. Box 505000
Louisville, KY 40233
(800) 962-4284
International +1 (781) 575-3120
Legal Counsel
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
Phone: 617.570.1000
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
101 Seaport Boulevard
Boston, Massachusetts 02110
Phone: 617.530.5000
Common Stock Information
Our common stock is traded on the Nasdaq Global Select Market under the symbol “IRBT.”
Investor Information
Karian Wong
SVP & Principal Accounting Officer
investorrelations@irobot.com
A copy of our financial reports, stock
quotes, news releases, SEC filings, as
well as information on our products is
available in the Investor Relations section of
www.irobot.com
Board Members
Mohamad Ali
Director, Nominating and no grants of Incentive Stock Options may be made hereunder after the tenth anniversaryCorporate Governance Committee Chair
Karen Golz
Director, Audit Committee Chair
Dr. Ruey-Bin Kao
Director
Eva Manolis
Director
Andrew Miller
Director, Chairman of the
date the Plan is approved by the Board.SECTION 20. GOVERNING LAW
This PlanBoard
Michelle Stacy
Director, Compensation and all AwardsTalent Committee Chair
Executive Team
Glen D. Weinstein
Interim Chief Executive Officer
Julie Zeiler
Executive Vice President and actions taken thereunder shall be governed by,Chief Financial Officer
Jean Jacques Blanc
Executive Vice President, Chief Commercial Officer
Tonya Drake
Executive Vice President and construed in accordance with, the lawsGeneral Counsel
Faris Habbaba
Executive Vice President, Chief Research and Development Officer
Russell Campanello
Executive Vice President, Human Resources and Corporate Communications
iRobot Mission
Empowering People To Do More
Corporate Headquarters
8 Crosby Drive
Bedford, MA 01730
USA
Phone: 781.430.3000
iRobot.com
info@irobot.com
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| | | Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
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| | | Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
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| | | VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
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| | | Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Eastern Time, on May 23, 2018.
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| | | 
| | Vote by Internet
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| | | | • Go towww.investorvote.com/IRBT
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| | | | • Or scan the QR code with your smartphone
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| | | | • Follow the steps outlined on the secure website
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| | | Vote by telephone
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| | | | | | • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone
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Using ablack inkpen, mark your votes with anXas shown in
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IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE
BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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A | | Proposals — The Board of Directors recommends a vote FOR items 1, 2, 3, 4, 5, 6, and 7. |
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1. | | To elect two (2) Class I directors (Colin M. Angle and Deborah G. Ellinger), nominated by the Board of Directors, each to serve for a three-year term and until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal. | | + | | |
| | The Board recommends a vote FOR all nominees. | | | | | | | |
| | NOMINEES: | | | | 01 – Colin M. Angle | | 02 – Deborah G. Ellinger | | | | | | | | | | |
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☐
| | Mark here to vote
FOR all nominees
| | ☐
| | Mark here to WITHHOLD
vote from all nominees
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| | For AllEXCEPT- To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below. | | |
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| | | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain |
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| 2. | | To ratify the appointment of the firm of PricewaterhouseCoopers LLP as auditors for the fiscal year ending December 29, 2018.TheBoard recommends avoteFORthis proposal number2. | | ☐ | | ☐ | | ☐ | | 3. | | To approve amendments to our amended and restated certificate of incorporation to eliminate supermajority voting requirements.The Board recommends a vote FOR this proposal number 3. | | ☐ | | ☐ | | ☐ |
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| 4. | | To approve amendments to our amended and restated certificate of incorporation to declassify the board of directors.The Board recommends a vote FOR this proposal number 4. | | ☐ | | ☐ | | ☐ | | 5. | | To approve amendments to our amended and restated certificate of incorporation to eliminate the prohibition on stockholders’ ability to call a special meeting.TheBoard recommends avoteFORthis proposal number5. | | ☐ | | ☐ | | ☐ |
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| 6. | | To approve iRobot Corporation’s 2018 Stock Option and Incentive Plan.The Board recommends a vote FOR this proposal number 6. | | ☐ | | ☐ | | ☐ | | 7. | | To approve, on an advisory basis, the compensation of our named executive officers.TheBoard recommends avoteFORthis proposal number7. | | ☐ | | ☐ | | ☐ |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 23, 2018. THE PROXY STATEMENT AND
ANNUAL REPORT TO SHAREHOLDERS ARE AVAILABLE AT
http://materials.proxyvote.com/462726
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IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. |
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Proxy — iRobot Corporation
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Proxy for Annual Meeting of Stockholders
May 23, 2018
SOLICITED BY THE BOARD OF DIRECTORS
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The undersigned hereby appoints each of Glen D. Weinstein and Alison Dean as proxy, with full power of substitution to vote all shares of stock of iRobot Corporation (the “Company”) which the undersigned is entitled to vote at the Annual Meeting of Stockholders of iRobot Corporation to be held on Wednesday, May 23, 2018, at 8:30 a.m. local time, at iRobot Corporation headquarters located at 8 Crosby Drive, Bedford, Massachusetts 01730, and at any adjournments or postponements thereof, upon matters set forth in the Notice of Annual Meeting of Stockholders and Proxy Statement dated [●], a copy of which has been received by the undersigned. |
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2, 3, 4, 5, 6, AND 7, AND WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
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PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. SEE REVERSE SIDE.
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Change of Address— Please print new address below. | | | | Meeting Attendance | | |
| | | | Mark box to the right
if you plan to attend
the Annual Meeting. | | ☐ |
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C | | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below |
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Please sign exactly as name appears below. Joint owners must both sign. Attorney, executor, administrator, trustee or guardian must give full title as such. A corporation or partnership must sign its full name by authorized person. |
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Date (mm/dd/yyyy) — Please print date below. | | Signature 1 — Please keep signature within the box. | | Signature 2 — Please keep signature within the box. |
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| | IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. | | | | |
