iRobot 2015 Annual Report Download - page 12

Background of the Solicitation
The following timeline is provided in order to help stockholders understand the discussions that have been
held between the Company and Red Mountain Capital (“Red Mountain”) during 2015 and 2016 regarding our
strategic plan and discussions about potential candidates to join our Board. These discussions were terminated
with no agreement, and Red Mountain has nominated two directors to serve in place of the two directors who are
recommended by our Board for election. During these conversations, the Company’s representatives provided
only publicly available information, as Red Mountain refused several requests to sign confidentiality agreements
that would have enabled us to discuss our strategies and plans in more depth. The Board does not endorse the
Red Mountain nominees and unanimously recommends you use the WHITE proxy card to vote FOR the election
of each of the nominees proposed by the Board.
On February 12, 2014, as part of our Board’s ongoing review of the Company’s business and financial
performance, our Board decided to focus resources and capital on the Company’s home robots business unit, and
began considering strategic alternatives with respect to the Company’s defense and security (“D&S”) business
unit. In connection with this decision, our Board engaged Blackstone Advisory Partners LP, now known as PJT
Partners, to begin exploring a potential sale of the D&S business unit.
On April 1, 2014, in connection with its review of the Company’s capital allocation plan, our Board
authorized the repurchase of up to $50 million of our common stock for the twelve months ended April 30, 2015.
On July 29, 2014, at Red Mountain’s request, a call took place between a representative of the Company
and Ted Moon, a Red Mountain analyst, in which Mr. Moon asked questions regarding the Company’s business
and strategy for the future.
On February 11, 2015 and February 24, 2015, at Red Mountain’s request, follow-up calls took place
between a representative of the Company and Mr. Moon regarding the Company’s financial outlook and strategy.
On March 19, 2015 our Board authorized the repurchase of up to $50 million of our common stock for the
twelve months ending April 30, 2016.
On March 11, 2015, in conjunction with the Piper Jaffray Technology, Media & Telecommunications
Conference in New York City, our Chief Executive Officer, Colin Angle, and our Senior Vice President, Investor
Relations, Elise Caffrey, met with Mr. Moon as part of a meeting with a larger group of investors. During the
meeting, Mr. Angle and Ms. Caffrey discussed our business and various operational matters with the group.
On March 17, 2015, in conjunction with the Sidoti & Company Emerging Growth Research Institutional
Investor Forum in New York City, our Chief Financial Officer, Alison Dean, and Ms. Caffrey met briefly with
Mr. Moon. During the meeting, Ms. Dean responded to questions from Mr. Moon regarding our financial
reporting and business outlook. Mr. Moon requested an in-person meeting with management, which was agreed
would occur following the Company’s April 22, 2015 earnings call.
On April 8, 2015, Red Mountain filed a Schedule 13D with the SEC disclosing it beneficially owned 5.1% of
the outstanding shares of common stock of the Company and sent a letter to the Company stating that Red Mountain
expected to engage in a dialogue with the Company’s management regarding a number of actions that it believed the
Company could take to create value for our stockholders. In particular, Red Mountain’s Schedule 13D and letter
suggested that the Company: (i) focus exclusively on home robots; (ii) optimize its capital structure by increasing
leverage; (iii) allocate capital by focusing on risk-adjusted returns; and (iv) upgrade its corporate governance.
Following Red Mountain’s letter to the Company, members of the Company’s management team had four in-
person meetings with representatives of Red Mountain, which occurred on May 1, 2015, May 15, 2015, June 23, 2015,
and August 3, 2015. These meetings covered a broad range of topics, including the Company’s business and results of
Notice of Annual Meeting of Stockholders and iRobot 2016 Proxy Statement
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