iRobot 2014 Annual Report Download - page 47

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directors in any calendar year period. No more than 3,100,000 shares of common stock may be issued in the form of incentive stock
options.
Effect of Awards. For purposes of determining the number of shares of common stock available for issuance under the 2015 Plan,
the grant of any “full value” award, such as a restricted stock award, restricted stock unit, unrestricted stock award or performance share
will be counted as 1.61 shares for each share of common stock actually subject to the award. The grant of any stock option or stock
appreciation right will be counted for this purpose as one share for each share of common stock actually subject to the award.
Stock Options. The 2015 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 2015 Plan will be non-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 persons eligible to
receive incentive options and to non-employee directors and consultants. The option exercise price of each option will be determined
by the compensation 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 be the closing price of the shares of common stock on the NASDAQ Global Market on 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 committee and may not exceed ten years from the date of grant. The
compensation 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 under certain circumstances.
Options subject to performance-based vesting may not become fully vested prior to one year from the date of grant and all other
options may not become fully vested prior to three years from the date of grant. These minimum vesting restrictions do not apply to
awards granted to non-employee directors and consultants.
Upon exercise of options, the option exercise price must be paid in full by one of the following methods except to the extent provided
in the option award certificate: (i) in cash or by certified or bank check or other instrument acceptable to the compensation committee;
(ii) by delivery (or attestation to the ownership) of shares of common stock that are not then subject to restrictions under any Company
plan; (iii) by 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; or (iv) with respect to non-qualified options, by a “net exercise” arrangement pursuant to which
the Company will reduce the number of shares issuable upon exercise by the largest whole number of shares with a fair market value
that does not exceed the aggregate 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. No more than 3,100,000 shares
may be issued in the form of incentive stock options under the 2015 Plan.
Stock Appreciation Rights. The compensation committee may award stock appreciation rights subject to such conditions and
restrictions as it may determine. Stock appreciation rights entitle the recipient to shares of common stock equal to the value of the
appreciation in the stock price over the exercise price. The exercise price may not be less than the fair market value of the common stock
on the date of grant. The maximum term of a stock appreciation right is ten years.
Stock appreciation rights subject to performance-based vesting may not become fully vested prior to one year from the date of grant
and all other stock appreciation rights may not become fully vested prior to three years from the date of grant. These minimum vesting
restrictions do not apply to awards granted to non-employee directors and consultants.
Restricted Stock and Restricted Stock Units. The compensation committee may award shares of common stock and restricted stock
units to participants subject to such conditions and restrictions as the compensation committee may determine. These conditions and
restrictions may include the achievement of certain performance goals (as summarized above) and/or continued employment with us
through a specified restricted period. Restricted stock units are ultimately payable in the form of shares of common stock. During the
vesting period, restricted stock awards and restricted stock units may be credited with dividend equivalent rights (but dividend equivalents
payable with respect to restricted stock awards and restricted stock units with vesting tied to the attainment of performance criteria shall
not be paid unless and until such performance conditions are attained).
Restricted stock awards and restricted stock units subject to performance-based vesting may not become fully vested prior to one
year from the date of grant and all other restricted stock awards and restricted stock units may not become fully vested prior to three years
from the date of grant. These minimum vesting restrictions do not apply to awards granted to non-employee directors and consultants.
Unrestricted Stock Awards. The compensation committee may also grant shares of common stock that are free from any restrictions
under the 2015 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. No more than 5% of the shares reserved may be granted under the
2015 Plan pursuant to unrestricted stock awards.
Proxy Statement