iRobot 2014 Annual Report Download - page 58

A-2
“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.
“Performance-Based Award” means any Restricted Stock Award, Restricted Stock Units, Performance Share Award or Cash-
Based Award granted to a Covered Employee that is intended to qualify as “performance-based compensation” under Section 162(m)
of the Code and the regulations promulgated thereunder.
“Performance Criteria” means the criteria that the Administrator selects for purposes of establishing the Performance Goal
or Performance Goals for an individual for a Performance Cycle. The Performance Criteria (which shall be applicable to the
organizational level specified by the Administrator, including, but not limited to, the Company or a unit, division, group, or Subsidiary
of the Company) that will be used to establish Performance Goals are limited to the following: total shareholder return; earnings
before interest, taxes, depreciation and amortization; net income (loss) (either before or after interest, taxes, depreciation and/or
amortization); adjusted earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation expense,
merger and acquisition expense, net intellectual property litigation expense, and restructuring expense (Adjusted EBITDA); changes in
the market price of the Stock; economic value-added; funds from operations or similar measure; sales or revenue; acquisitions or
strategic transactions; operating income (loss); cash flow (including, but not limited to, operating cash flow and free cash flow); return
on capital, assets, equity, or investment; return on sales; gross or net profit levels; productivity; expense; margins; operating efficiency;
customer satisfaction; working capital; earnings (loss) per share of Stock; sales or market shares; and number of customers, any of
which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group.
Unless otherwise specified in an Award Certificate in order to qualify as performance based compensation for purposes of Section 162
(m) of the Code or otherwise, the Committee may appropriately adjust any evaluation performance under a Performance Criterion to
exclude any of the following events that occurs during a Performance Cycle: (i) asset write-downs or impairments; (ii) litigation or
claim judgments or settlements; (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting
reporting results; (iv) accruals for reorganizations and restructuring programs; (v) any extraordinary non-recurring items, including
those described in the Financial Accounting Standards Board’s authoritative guidance and/or in management’s discussion and analysis
of financial condition of operations appearing the Company’s annual report to stockholders for the applicable year; (vi) acquisitions
and/or divestures; and (vii) any other extraordinary items adjusted from the Company U.S. GAAP results.
“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the
Administrator may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of
determining a grantee’s right to and the payment of a Restricted Stock Award, Restricted Stock Units, Performance Share Award or
Cash-Based Award, the vesting and/or payment of which is subject to the attainment of one or more Performance Goals. Each such
period shall not be less than one year.
“Performance Goals” means, for a Performance Cycle, the specific goals established in writing by the Administrator for a
Performance Cycle based upon the Performance Criteria.
“Performance Share Award” means an Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals.
“Restricted Shares” means the shares of Stock underlying a Restricted Stock Award that remain 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” shall mean 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.