iRobot 2008 Annual Report Download - page 124

8. Common Stock
Common stockholders are entitled to one vote for each share held and to receive dividends if and when
declared by the Board of Directors and subject to and qualified by the rights of holders of the preferred stock. Upon
dissolution or liquidation of the Company, holders of common stock will be entitled to receive all available assets
subject to any preferential rights of any then outstanding preferred stock.
9. Stock Option Plans
The Company has options outstanding under four stock incentive plans: the 1994 Stock Option Plan (the “1994
Plan”), the 2001 Special Stock Option Plan (the “2001 Plan”), the 2004 Stock Option and Incentive Plan (the “2004
Plan”) and the 2005 Stock Option and Incentive Plan (the “2005 Plan” and together with the 1994 Plan, the 2001
Plan and the 2004 Plan, the “Plans”). The 2005 Plan is the only one of the four plans under which new awards may
currently be granted. Under the 2005 Plan, which became effective October 10, 2005, 1,583,682 shares were
initially reserved for issuance in the form of incentive stock options, non-qualified stock options, stock appreciation
rights, deferred stock awards and restricted stock awards. Additionally, the 2005 Plan provides that the number of
shares reserved and available for issuance under the plan will automatically increase each January 1, beginning in
2007, by 4.5% of the outstanding number of shares of common stock on the immediately preceding December 31.
Stock options returned to the Plans as a result of their expiration, cancellation or termination are automatically made
available for issuance under the 2005 Plan. Eligibility for incentive stock options is limited to those individuals
whose employment status would qualify them for the tax treatment associated with incentive stock options in
accordance with the Internal Revenue Code. As of December 27, 2008, there were 1,537,701 shares available for
future grant under the 2005 Plan.
Options granted under the Plans are subject to terms and conditions as determined by the compensation
committee of the board of directors, including vesting periods. Options granted under the Plans are exercisable in
full at any time subsequent to vesting, generally vest over periods from 0 to 5 years, and expire 7 or 10 years from the
date of grant or, if earlier, 60 or 90 days from employee termination. The exercise price of incentive stock options is
equal to the closing price on the NASDAQ Global Market on the date of grant. The exercise price of nonstatutory
options may be set at a price other than the fair market value of the common stock.
10. Income Taxes
The components of income tax expense were as follows:
2008 2007 2006
(In thousands)
Current
Federal ........................................... $2,137 $ 1,450 $169
State . ............................................ 231 187 135
Foreign ........................................... 10 3 —
Total current tax provision ........................... 2,378 1,640 304
Deferred
Federal . ............................................ (2,009) (10,198) —
Total income tax provision (benefit) .................... $ 369 $ (8,558) $304
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iROBOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)