iRobot 2015 Annual Report Download - page 48

Executive Agreements
We have entered into executive agreements with each of our named executive officers. The executive
agreements provide for severance payments equal to 50% of such officer’s annual base salary at the highest
annualized rate in effect during the one-year period immediately prior to termination, payable in six equal monthly
installments, as well as monthly premium payments for continued health, dental and vision benefits for up to six
months following termination, in the event that we terminate his or her employment other than for cause, as
defined in the executive agreements. In addition, these executive agreements provide that if we experience a
change in control, as defined in the executive agreements, and the employment of such officer is terminated by the
Company without cause at any time within the period beginning on the date that is 45 days prior to the date of the
public announcement of the execution of a definitive agreement for a change in control and ending on the first
anniversary of the effective date of the change in control, or if such officer terminates his or her employment for
good reason, as defined in the executive agreements, during the one-year period following the change in control,
then all unvested equity held by such officer becomes fully-vested and immediately exercisable and such officer is
entitled to severance payments equal to 200% of his or her annual base salary, at the highest annualized rate in
effect during the period immediately prior to the effective date of the change in control and the date of termination
of employment, and 200% of such officer’s highest target cash incentive with respect to the year prior to the year
in which the change in control occurred and ending in the year in which the officer’s employment is terminated,
each payable in 24 equal monthly installments, as well as monthly premium payments for continued health, dental
and vision benefits for up to 24 months following termination. Receipt of the severance payments and benefits
under the executive agreements is subject to the executive officer’s execution of a separation agreement, including
a general release of claims, in a form and of a scope reasonably acceptable to the Company and compliance with
any noncompetition, inventions and/or nondisclosure obligations owed to the Company. There are no tax gross-up
payable under the executive agreements or otherwise.
It is the belief of the compensation and talent committee that these provisions are consistent with executive
severance arrangements that are customary for public companies at our stage of development and are necessary
in order to hire and/or retain our key talent.
Clawback
In 2015, the Company adopted a clawback policy that provides the board of directors discretion to reduce
the amount of future compensation payable to an executive of the Company for excess proceeds from incentive
compensation received by such executive due to a material restatement of financial statements. The clawback
period is the three-year period following the filing of any such restated financial statements with the SEC.
Tax Deductibility of Executive Compensation
In general, under Section 162(m) of the Code, we cannot deduct, for federal income tax purposes,
compensation in excess of $1,000,000 paid to certain executive officers. This deduction limitation does not
apply, however, to compensation that meets all the requirements to be deemed “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder.
We have considered the limitations on deductions imposed by Section 162(m) of the Code and it is our present
intention, for so long as it is consistent with our overall compensation objective, to structure executive
compensation to minimize application of the deduction limitations of Section 162(m) of the Code, while also
maintaining the flexibility to pay compensation that is subject to the deduction limitations imposed by
Section 162(m) of the Code.
Notice of Annual Meeting of Stockholders and iRobot 2016 Proxy Statement
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