iRobot 2013 Annual Report Download

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Dear Stockholder: April 9, 2014
You are cordially invited to attend the annual meeting of stockholders of iRobot Corporation to be held at 2:00 p.m., local time,
on Tuesday, May 20, 2014 at iRobot Corporation headquarters located at 8 Crosby Drive, Bedford, Massachusetts 01730.
At this annual meeting, you will be asked to elect two (2) Class III directors for three-year terms, to ratify the appointment of
our independent registered public accountants, to cast an advisory vote on the approval of the compensation of our named executive
officers, and to consider a stockholder proposal entitled “Simple Majority Vote." The board of directors unanimously recommends that
you vote FOR election of the director nominees, FOR ratification of appointment of our independent registered public accountants,
and FOR approval, on an advisory basis, of the compensation of our named executive officers. The board of directors makes no
recommendation as to how you should vote on the stockholder proposal.
Details regarding the matters to be acted upon at this annual meeting appear in the accompanying proxy statement. Please give
this material your careful attention.
Whether or not you plan to attend the annual meeting, we urge you to sign and return the enclosed proxy so that your shares will
be represented at the annual meeting. If you attend the annual meeting, you may vote in person even if you have previously returned
your proxy card. Your prompt cooperation will be greatly appreciated.
Very truly yours,
COLIN M. ANGLE
Chief Executive Officer & Chairman of the Board
Proxy StatementProxy Statement

Table of contents

  • Page 1
    ..., 2014 at iRobot Corporation headquarters located at 8 Crosby Drive, Bedford, Massachusetts 01730. At this annual meeting, you will be asked to elect two (2) Class III directors for three-year terms, to ratify the appointment of our independent registered public accountants, to cast an advisory vote...

  • Page 2
    ...: Annual "say-on-pay" vote Oversight of risks associated with compensation policies and practice Strong stock ownership and stock holding guidelines "Double trigger" change in control agreements Independent compensation consultant No pension benefits for executive officers No discounted options No...

  • Page 3
    ... card. Directions to iRobot Corporation headquarters can be found at the Company's website, http:// www.irobot.com. By Order of the Board of Directors, GLEN D. WEINSTEIN Executive Vice President, Chief Legal Officer and Secretary Bedford, Massachusetts April 9, 2014 IMPORTANT NOTICE REGARDING THE...

  • Page 4

  • Page 5
    ...at Annual Meetings of Stockholders Board of Directors Evaluation Program Code of Ethics THE BOARD OF DIRECTORS AND ITS COMMITTEES Board of Directors Audit Committee Compensation Committee Nominating and Corporate Governance Committee Compensation Committee Interlocks and Insider Participation REPORT...

  • Page 6

  • Page 7
    ... local time, at iRobot Corporation headquarters located at 8 Crosby Drive, Bedford, Massachusetts 01730, and any adjournments or postponements thereof. An annual report to stockholders, containing financial statements for the fiscal year ended December 28, 2013, is being mailed together with this...

  • Page 8
    ... the appointment of the independent registered public accountants, the advisory vote on the compensation of our named executive officers, and the stockholder proposal entitled "Simple Majority Vote," the board of directors knows of no other matters to be presented at the annual meeting. If any other...

  • Page 9
    ... named executive officer of the Company; and (iv) by all directors and executive officers of the Company as a group. Unless otherwise noted below, the address of each person listed on the table is c/o iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730. Name of Beneficial Owner Shares...

  • Page 10
    ... of 1,178,400 shares. Crosby Advisors LLC, a whollyowned subsidiary of Crosby Company of New Hampshire LLC ("CCNH"), is the beneficial owner of 320,169 shares as a result of providing investment advisory services to individuals, trusts and limited liability entities. Members of the family of Edward...

  • Page 11
    ..., Ronald Chwang, Ph.D., Paul J. Kern, Gen. U.S. Army (ret) and Deborah G. Ellinger) whose terms expire upon the election and qualification of directors at the annual meeting of stockholders to be held in 2015 and (ii) two Class II directors (George McNamee and Paul Sagan) whose terms expire upon the...

  • Page 12
    ... 1998 Paul J. Kern, Gen. U.S. Army (ret.) 2006 Deborah G. Ellinger 2011 George C. McNamee 1999 Paul Sagan 2010 Director Director 2014 2014 III III Chairman of the Board, Chief Executive Officer and Director Director Director Director Director Director 2015 I 2015 2015 2015 2016 2016 I I I II II...

  • Page 13
    ...be elected at the annual meeting, the directors and the executive officers of the Company, their ages immediately prior to the annual meeting, and the positions currently held by each such person with the Company: Name Age Position Colin M. Angle Alison Dean Russell J. Campanello Paolo Pirjanian...

  • Page 14
    ...was a managing director of Butler Capital Corporation. Prior to that, he was a managing director of Onex Investment Corporation, a Canadian management buyout company. From 1974 to 1986, he was a senior officer of Exor America. Mr. Geisser has been a board member and audit committee member of several...

  • Page 15
    ...also a board member of the New York Stock Exchange Inc., MapInfo, Home Shopping Network and the Meta Group. He received his Bachelor of Arts degree from Yale University. Mr. McNamee brings to the board of directors his extensive experience regarding the management of public and private companies, as...

  • Page 16
    ...and strategic and reputational risks. The audit committee focuses on risk related to accounting, internal controls, and financial and tax reporting. The audit committee also assesses economic and business risks and monitors compliance with ethical standards. The compensation committee identifies and...

  • Page 17
    ...board of directors seeks members from diverse professional backgrounds who combine a broad spectrum of relevant industry and strategic experience and expertise that, in concert, offer us and our stockholders diversity of opinion and insight in the areas most important to us and our corporate mission...

  • Page 18
    ... a member of the board of directors, security holders may send such communications to the attention of the individual director by U.S. mail (including courier or expedited delivery service) to: iRobot Corporation 8 Crosby Drive Bedford, Massachusetts 01730 Attn: [Name of the director], c/o Secretary...

  • Page 19
    ... to: iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730, Attention: Investor Relations. We intend to disclose any amendment to or waiver of a provision of the Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal...

  • Page 20
    ... independent registered public accounting firm our annual and quarterly financial statements and related disclosures; • coordinating the oversight and reviewing the adequacy of our internal control over financial reporting; • overseeing the performance of our internal auditors and internal audit...

  • Page 21
    Proxy Statement • reviewing and making recommendations to the board with respect to director compensation. The compensation committee met nine (9) times and took action by unanimous written consent five (5) times during the fiscal year ended December 28, 2013. The compensation committee ...

  • Page 22
    ... the board of directors, a current copy of which is available at the Corporate Governance section of our website at http://www.irobot.com. Compensation Committee Interlocks and Insider Participation During 2013, Dr. Chwang, Ms. Ellinger and Mr. McNamee served as members of the compensation committee...

  • Page 23
    ...responsibilities, the audit committee has reviewed and discussed with management the Company's consolidated financial statements for the fiscal quarters and full year ended December 28, 2013, including a discussion of, among other things, the quarterly and annual earnings press releases, the quality...

  • Page 24
    ... advising the board of directors with respect to such policies and administering the Company's cash incentive, stock option and employee stock purchase plans. The compensation committee sets performance goals and objectives for the chief executive officer and the other executive officers, evaluates...

  • Page 25
    ... Ava 500 business collaboration robots in the first half of 2014. This excellent performance was reflected in a 90% stock price appreciation in fiscal 2013 over fiscal 2012. Based on our strong 2013 performance, our named executive officers received significant incentive cash compensation in 2013...

  • Page 26
    ... peer companies for cash and long-term incentive compensation purposes, analyze applicable compensation data and determine appropriate compensation levels and plan design for our executive officers. PM&P also helps review the peer group annually, provides the compensation committee with up to date...

  • Page 27
    ... reviews all components of compensation for named executive officers. In accordance with its charter, the compensation committee also, among other responsibilities, administers our incentive compensation plan, and reviews and makes recommendations to management on company-wide compensation programs...

  • Page 28
    ... executive compensation program consists of three primary elements: salary, an annual cash incentive, and long-term equity interests, primarily in the form of stock options and restricted stock units. All of our executive officers also are eligible for certain benefits offered to employees generally...

  • Page 29
    ... 2013. For 2014, Ms. Dean's target bonus award was increased to 62.5% of her base salary. The target bonus awards for the other named executive officers remained the same for fiscal 2014. While the Senior Executive Incentive Compensation Plan is designed to provide cash incentive payments based...

  • Page 30
    ...awards were made to the named executive officers for performance in fiscal 2013 pursuant to our Senior Executive Incentive Compensation Plan: Incentive Bonus Award Original Target Incentive Opportunity Achievement ICP Earned Colin M. Angle Alison Dean Glen D. Weinstein Russell J. Campanello Paolo...

  • Page 31
    ... our compensation objectives and policies described above when reviewing the long-term incentive program. In March 2013, we granted stock options and restricted stock unit awards to our named executive officers. We also granted stock options and restricted stock unit awards to Ms. Dean in connection...

  • Page 32
    ... voting on 2014 say on pay, we encourage stockholders to consider the evolution of our executive compensation program, alignment of our pay and performance for 2013, and our overall Company performance and increased stockholder value created in the most recent year. Stock Ownership Guidelines and...

  • Page 33
    ... overall compensation objective, to structure executive compensation to minimize application of the deduction limitations of Section 162(m) of the Code. Risk Oversight of Compensation Programs The compensation committee annually reviews and believes our compensation program for executive officers is...

  • Page 34
    ... for our senior leadership team), and it its services were limited to executive compensation consulting. Fees paid by us to PM&P represented 0.1% of PM&P's total revenue for the period December 2012 through November 2013; PM&P maintains a Conflicts Policy and an Insider Trading Policy which were...

  • Page 35
    ... 3,333,680 2,736,457 Alison Dean (5) Executive Vice President, Chief Financial Officer and Treasurer 2013 308,838 - 721,142 179,783 306,150 7,650 1,523,563 Russell J. Campanello Executive Vice President, Human Resources and Corporate Communications 2013 2012 2011 2013 322,115 300,000 300...

  • Page 36
    ... of $7,650 and a cash payment of $506,325, which is equal to the amount that Mr. Beck would have received under the Company's Senior Executive Incentive Compensation Plan if he had remained employed by the Company through the date on which amounts were paid to the executive officers under such plan...

  • Page 37
    ... pursuant to our 2005 Stock Option and Incentive Plan (the "2005 Plan"). Represents the target and maximum amount of Mr. Leahy's incentive payments under the Senior Executive Cash Incentive Compensation Plan. Mr. Leahy's employment with the Company terminated on April 5, 2013 and, as a result, Mr...

  • Page 38
    ... Pirjanian on October 1, 2012 were granted as replacement awards for unvested stock options that Dr. Pirjanian held in Evolution Robotics, Inc. as of the date that the Company acquired Evolution Robotics, Inc. Mr. Beck's employment with the Company terminated on December 27, 2013 and pursuant to the...

  • Page 39
    ... 2013 above. In exchange for these payments and benefits, Mr. Beck delivered to us a fully effective release of all claims against the Company and its affiliates. Cash Payments and/or Acceleration of Vesting Following Certain Termination Events Assuming the employment of our named executive officers...

  • Page 40
    ... Beck under the 2005 Plan. The intrinsic value of the stock options and restricted stock units held by Mr. Beck that vested in connection with his termination of employment was $224,621 and $750,940, respectively. Assuming the employment of our named executive officers was terminated by the Company...

  • Page 41
    ...be issued from our 2005 Plan. In 2013, each of our non-employee members of our board of directors was entitled to the following equity compensation under our 2005 Plan: Upon initial election to the board of directors, a non-employee director receives a one-time grant of restricted stock units having...

  • Page 42
    ...-employee members of our board of directors who held such position on December 28, 2013 held the following aggregate number of unexercised options and unvested restricted stock units as of such date: Number of Securities Underlying Unexercised Options Number of Unvested Restricted Stock Units Name...

  • Page 43
    ... related to the performance of audits or reviews of our financial statements and were not reported above under "Audit Fees." Tax Fees Tax Fees consist of fees for professional services rendered for assistance with federal, state, local and international tax planning compliance. All Other Fees All...

  • Page 44
    Recommendation of the Board THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS iROBOT'S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR 2014. 38

  • Page 45
    ... and Executive Compensation Summary sections of this Proxy Statement for additional details on the Company's executive compensation programs and philosophy. This vote is advisory, and therefore not binding on the Company, the compensation committee or our board of directors. However, our board of...

  • Page 46
    ..." On November 27, 2013, the Company received by electronic mail a letter dated November 26, 2013 containing the following proposal from Mr. James McRitchie, 9295 Yorkship Court, Elk Grove, CA 95758, beneficial owner of 100 shares of the Company's common stock. In accordance with SEC rules, we are...

  • Page 47
    ...their proposals by Certified Mail, Return Receipt Requested, to iRobot Corporation, 8 Crosby Drive, Bedford, Massachusetts 01730, Attention: Secretary. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires our directors, executive officers and persons who...

  • Page 48
    Exhibit A iRobot Corporation Adjusted EBITDA Reconciliation to GAAP (unaudited, in thousands) For the twelve months ended December 28, 2013 December 29, 2012 Net income Interest income, net Income tax expense Depreciation Amortization EBITDA Stock-based compensation expense Merger and acquisition ...

  • Page 49
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    ...it through 12/31/2013. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among iRobot Corporation, the NASDAQ Composite Index, and S&P Technology Hardware & Equipment Industry Group $500 $450 $400 $350 $300 $... The stock price performance included in this graph is not necessarily indicative of future...

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    iRobot Mission Empowering People To Do More Corporate Headquarters 8 Crosby Drive Bedford, MA 01730 USA Phone: 781.430.3000 Fax: 781.430.3001 www.irobot.com [email protected]