iRobot 2014 Annual Report Download - page 53

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47
PROPOSAL 6
STOCKHOLDER PROPOSAL ENTITLED "ELECT EACH DIRECTOR ANNUALLY"
On December 6, 2014, the Company received by electronic mail a letter dated November 17, 2014 containing the following
proposal from Mr. James McRitchie, 9295 Yorkship Court, Elk Grove, CA 95758, beneficial owner of 80 shares of the Company's
common stock. In accordance with SEC rules, we are reprinting the proposal and supporting statement in this proxy statement as they
were submitted to us:
The Board of Directors of iRobot does not support the adoption of the resolution proposed below and asks stockholders to
consider management’s response, which follows the stockholder proposal.
Stockholder Proposal
Proposal 6 - Elect Each Director Annually
RESOLVED, shareholders ask that our Company take the steps necessary to reorganize the Board of Directors into one class
with each director subject to election each year. Although our management is capable of putting forth a management proposal to
completely adopt this proposal topic in one-year, management would nonetheless have the option to phase it in over 3-years.
Arthur Levitt, former Chairman of the Securities and Exchange Commission, said, "In my view it's best for the investor if the
entire board is elected once a year. Without annual election of each director shareholders have far less control over who represents
them."
A total of 79 S&P 500 and Fortune 500 companies, with aggregate market capitalization of one trillion dollars, adopted this
topic in 2012 and 2013. Annual elections are widely viewed as a corporate governance best practice. Annual election of each director
could make directors more accountable, and thereby contribute to improved performance and increased company value.
iRobot shareholders are strongly in favor of improving our corporate governance as this proposal will do. For example, iRobot
shareholders gave 82% support to a 2014 shareholder proposal to change certain voting thresholds to a more democratic 51%
standard. There is a link between improved governance and improved profits.
Please vote to protect enhance value: Elect Each Director Annually - Proposal 6
Recommendation of the Board
The board of directors unanimously recommends you vote “AGAINST” this proposal.
The board of directors has considered the most effective structure for the term of each director and has determined, for the
reasons set forth below, that the current classified structure of the board of directors continues to be in the best long-term interests of
the Company and its stockholders.
Stability, Continuity and Experience. In accordance with our amended and restated certificate of incorporation, the board of
directors is divided into three classes, with each class serving a staggered three-year term. This classified structure provides the board
of directors with stability and continuity, enhancing long-term strategic planning and initiatives by the board of directors that often
require several years to implement and realize results. This classified structure also ensures that, at any given time, the board of
directors is comprised of experienced directors who are intimately familiar with our business, strategic goals, history and culture. A
classified board of directors ensures continuity of leadership and informed decision making, as at any given time the majority of the
directors will have prior experience serving on the board of directors and a deep understanding of the concerns and issues facing the
Company.
Accountability. All directors, regardless of the length of their term of office, are required to act in their capacity as a director in
a manner that complies with their fiduciary duties to the Company and its stockholders. The board of directors believes that the
experience of individual directors is more important to effective board governance than annual elections. The classified structure of
the board of directors strengthens our ability to attract and retain high quality directors who are willing to make the significant
commitment of time and effort to the Company and its stockholders that effective board service requires. In addition, stockholders
currently have the ability to elect a majority of the board of directors in just two consecutive annual meetings, which affords
Proxy Statement