iRobot 2008 Annual Report Download - page 42

at a meeting of stockholders. In addition, to the extent determined by the Administrator to be required by
the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of
the Code or to ensure that compensation earned under Awards qualifies as performance-based compensa-
tion under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company
stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 14 shall limit the
Administrator’s authority to take any action permitted pursuant to Section 3(d).”
Summary of the 2005 Plan
The following description of certain features of the 2005 Plan is intended to be a summary only.
Term of the Plan. The 2005 Plan was adopted by our board of directors on September 28, 2005, and
subsequently approved by our stockholders on October 10, 2005. Awards of incentive stock options may be
granted under the 2005 Plan until September 28, 2015. No other awards may be granted under the 2005 Plan
after September 28, 2015. Our board of directors may discontinue the 2005 Plan at any time.
Plan Administration. The compensation committee has full power to select, from among the individuals
eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to
participants, and to determine the specific terms and conditions of each award, subject to the provisions of the
2005 Plan. The compensation committee currently consists of the following members of our board of directors:
George McNamee, Paul J. Kern and Ronald Chwang. The compensation committee may delegate to any other
executive officer the authority to grant awards at fair market value to employees who are not subject to the
reporting and other provisions of Section 16 of the Securities Exchange Act of 1934, as amended.
Shares Available for Issuance under the 2005 Plan. We initially reserved 1,583,682 shares of our
common stock for the issuance of awards under the 2005 Plan. In addition, the 2005 Plan provides that the
number of shares reserved and available for issuance under the 2005 Plan will automatically increase each
January 1, beginning in 2007, by 4.5% of the outstanding number of shares of our common stock on the
immediately preceding December 31. This number is subject to adjustment in the event of a stock split, stock
dividend or other change in our capitalization. Generally, shares from awards under the 2005 Plan that are
forfeited, canceled, held back upon exercise of an option or settlement of an award to cover the exercise price
or tax withholding, reacquired by us prior to vesting, satisfied without the issuance of stock or otherwise
terminated (other than by exercise) are added back to the 2005 Plan and made available for future awards. In
addition, stock options returned to our Amended and Restated 1994 Stock Plan, Amended and Restated 2001
Special Stock Option Plan and Amended and Restated 2004 Stock Option and Incentive Plan, as of result of
their expiration, cancellation or termination, are automatically made available for issuance under our 2005
Plan. If our capital structure changes, because of a stock dividend, a reorganization or similar event, the
number of shares that can be issued under the 2005 Plan will be appropriately adjusted.
As of March 20, 2009, stock options and other unvested restricted stock and deferred stock awards under
the 2005 Plan covering 3,783,713 shares of our common stock were outstanding, and 2,448,891 shares were
available for future grants under the 2005 Plan (assuming no outstanding awards under the other equity
compensation plans are forfeited, cancelled or terminated (other than by exercise) after such date). Based
solely on the closing price of our common stock as reported by NASDAQ on March 20, 2009 of $8.40, the
maximum aggregate market value of our common stock that could potentially be issued under the 2005 Plan
as of such date (including unvested restricted stock awards) is approximately $52,353,874.
Eligibility and Limitations on Grants. Persons eligible to participate in the 2005 Plan will be our full or
part-time officers, employees, non-employee directors and other key persons (including consultants and
prospective officers) as selected from time to time by the compensation committee. As of March 20, 2009,
approximately 487 individuals were eligible to participate in the 2005 Plan.
The maximum award of stock options, stock appreciation rights, deferred stock or restricted stock granted
to any one individual will not exceed 2,500,000 shares of our common stock (subject to adjustment for stock
splits and similar events) for any fiscal year period.
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