iRobot 2012 Annual Report Download - page 46

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After thoughtful consideration, the board of directors recommends a vote against the proposal because:
• The proposal has eligibility standards that are inappropriately low and would be impractical and expensive for the
Company to implement.
• The proposal is unnecessary because the Company's policies and procedures already provide the Company's
stockholders with the opportunity to have meaningful input in the director nomination and election process.
• The Nominating and Corporate Governance Committee is best positioned to review and recommend director nominees
who have the skills and qualifications to enhance the effectiveness of the board of directors and who will represent the
interests of all stockholders and not just those with a narrow agenda.
• The proposal strips the ability of the board of directors to fulfill its duty of identifying and evaluating potential board
members.
• The proposal strips the ability of the board of directors to fulfill its duty of identifying and evaluating potential board
members.
• The proposal requests the Company to take action but does not provide clear guidelines as to what action to take.
The proposal has eligibility standards that are inappropriately low and would be impractical and expensive for the
Company to implement. The eligibility requirements to submit a director nomination contained in the proposal are
inappropriately low. The thresholds in the proposal at issue here would require (i) a group of stockholders to own only 1% of
the outstanding shares of the Company's common stock for two years or (ii) a group of 50 or more stockholders to each own as
little as $2,000 of common stock and for the group to collectively own one half of one percent of the Company's common
stock, for one year. The proposal's low thresholds subject the Company to significant additional expense and diversion of
management time and energy. Just one nomination by a group of 50 stockholders would require the Company to verify the
amount and duration of common stock ownership of at least 50 stockholders. This means the Company could be required to
verify the share ownership of possibly numerous individuals each year. In many cases, because smaller holdings of the
Company's common stock are held in brokerage accounts, the Company would have to investigate through the brokerage firms
whether the requirements of the stockholder proposal have been met. We do not think that such investigations constitute the
best use of the Company's resources. Allowing stockholders who exhibit such an immaterial investment in the Company to
make nominations using the Company's proxy materials could lead to the election of “special interest directors” who may be
inclined to represent the interests of the stockholders who have nominated them rather than the overall interests of all
stockholders. Unlike the board of directors, individual stockholders or stockholder groups that would be eligible to invoke the
new powers suggested by the proposal owe no legal duties to any of their fellow stockholders to act in their best interests, and
the board of directors believes it is inadvisable for the Company to subsidize the proxy challenges that may be designed to
further narrow agendas irrespective of stockholder interests generally. Additionally, the Company already bears the expense of
filing and distributing proxy materials which would contain the stockholder nominee, and the board of directors is likely to feel
compelled to undertake an additional and expensive campaign to inform stockholders of the reasons the stockholder nominee
should not be elected. It is worth noting that the United States Court of Appeals for the District of Columbia overturned the
SEC's proxy access rule precisely because it determined that the SEC had not adequately assessed the expense and distraction
proxy contests would entail.
The proposal is unnecessary because the Company's stockholders already have the opportunity to have meaningful
input in the nomination and election process. The proposal is not necessary because stockholders already have a meaningful
voice in electing directors; they can already recommend and nominate director candidates. The Nominating and Corporate
Governance Committee has a defined procedure for individuals to recommend director candidates, which is described above in
“Policies Governing Director Nominations.” The policies are designed to produce nominees that possess the educational,
professional, business and personal attributes that are best suited to further the Company's purposes. This process gives
stockholders an opportunity to recommend director candidates to the board of directors and have their qualifications properly
reviewed by the Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee is best positioned to review and recommend director nominees
who have the skills and qualifications to enhance the effectiveness of the board of directors and who will represent the
interests of all stockholders and not just those with a narrow agenda. Each member of the Nominating and Corporate
Governance Committee (as well as 90% of the directors on our board) is an independent director. The Nominating and
Corporate Governance Committee has the responsibility to identify and nominate qualified director candidates to serve on our
board of directors. An effective board is made up of individuals having disparate talents and experiences. The Nominating and
Corporate Governance Committee, and not an individual stockholder, is best equipped to evaluate the particular talents and