iRobot 2014 Annual Report Download - page 62

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(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. A Stock Option grant (excluding grants to
Non-Employee Directors and Consultants) shall not become fully exercisable sooner than three years after grant if subject to time-
based vesting (but may become exercisable ratably over such three-year period beginning at the end of the first one-year period). A
Stock Option grant shall not become exercisable sooner than one year after grant if subject to performance-based vesting unless
accelerated as permitted by Section 2(b)(v) hereof. A Stock Option grant to Non-Employee Directors or Consultants shall not become
exercisable sooner than one year after grant. 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) of 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 exercise by the largest
whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.
Payment instruments will be received subject to collection. The transfer 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 a Non-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 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.