iRobot 2013 Annual Report Download - page 46

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40
PROPOSAL 4
STOCKHOLDER PROPOSAL ENTITLED “SIMPLE MAJORITY VOTE”
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 reprinting the proposal and supporting statement in this proxy statement as they
were submitted to us:
Stockholder Proposal
Proposal 4 - Simple Majority Vote
RESOLVED, Shareholders request that our board take the steps necessary so that each voting requirement in our charter and bylaws
that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of the votes cast for and
against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a
majority of the votes cast for and against such proposals consistent with applicable laws.
Shareowners are willing to pay a premium for shares of corporations that have excellent corporate governance. Supermajority voting
requirements have been found to be one of six entrenching mechanisms that are negatively related to company performance according
to "What Matters in Corporate Governance" by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School.
Supermajority requirements are arguably most often used to block initiatives supported by most shareowners but opposed by a status
quo management.
This proposal topic won 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-
Hill and Macy's. The proponents of these proposals included Ray T. Chevedden and William Steiner. Currently a 1%-minority can
frustrate the will of our 74%-shareholder majority.
This proposal should also be more favorably evaluated due to our Company's clearly improvable corporate governance performance as
reported in 2013:
GMI Ratings, an independent investment research firm, reported that we lacked many good governance features. Shareholders could
not elect each director annually and shareholders did not have the right to call a special meeting or to act by written consent. There
was a poison pill with a 15% threshold that would not expire until October 2015. We lacked confidential voting.
Our lead director, George McNamee, had 14-years long-tenure which negatively impacts our director independence. Mr. McNamee
was also negatively flagged by GMI and received a whopping 25% in negative votes. Director Ronald Chwang had 15-years long
tenure. Paul Sagan received 23% in negative votes.
Approval of holders of 75% of shares was required to amend our Articles regarding stockholder action, board of directors, limitation
of liability, bylaw amendments, amendments of the charter and to remove a director for cause. GMI said there were forensic
accounting ratios related to expense recognition that had extreme values either relative to industry peers or to our company's own
history.
Returning to the core topic of this proposal from the context of our clearly improvable corporate climate, please vote to protect
shareholder value:
Simple Majority Vote - Proposal 4
Recommendation of the Board
THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION AS TO HOW YOU SHOULD VOTE ON THE
STOCKHOLDER PROPOSAL; INSTEAD THE BOARD OF DIRECTORS WELCOMES STOCKHOLDER INPUT ON
THE PROPOSAL.