Delaware | 8731 | 77-0259 335 | ||
(State or Other Jurisdiction of
Incorporation or Organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Mark T. Bettencourt, Esq.
Edward A. King, Esq. Goodwin Procter LLP Exchange Place Boston, Massachusetts 02109 (617) 570-1000 |
Mark G. Borden, Esq.
Omar White, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, Massachusetts 02109 (617) 526-6000 |
The information
contained in this prospectus is not complete and may be changed.
Neither we nor the selling stockholders may sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting offers to buy these securities in any state where the
offer or sale is not
permitted.
|
Shares |
Underwriting | Proceeds to | Proceeds to | ||||||||||||||
Price to | Discounts and | iRobot | Selling | |||||||||||||
Public | Commissions | Corporation | Stockholders | |||||||||||||
Per Share
|
$ | $ | $ | $ | ||||||||||||
Total
|
$ | $ | $ | $ |
MORGAN STANLEY | JPMORGAN |
i
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the risks of investing in our common stock discussed under Risk Factors beginning on page 6, and the consolidated financial statements and notes to those consolidated financial statements, before making an investment decision. |
iRobot provides robots that enable people to complete complex tasks in a better way. Founded in 1990 by roboticists who performed research at the Massachusetts Institute of Technology, we have developed proprietary technology incorporating advanced concepts in navigation, mobility, manipulation and artificial intelligence to build industry-leading robots. Our Roomba floor vacuuming robot and recently announced Scooba floor washing robot perform time-consuming domestic chores, and our PackBot tactical military robots perform battlefield reconnaissance and bomb disposal. In addition, we are developing the Small Unmanned Ground Vehicle reconnaissance robot for the U.S. Armys transformational Future Combat Systems program and, in conjunction with Deere & Company, the R-Gator unmanned ground vehicle. We sell our robots to consumers through a variety of distribution channels, including over 7,000 retail locations and our on-line store, and to the U.S. military and other government agencies worldwide. | |
As of July 2, 2005, we had 214 full-time employees, of whom over half are engineers specializing in the design of robots. We have developed expertise in all the disciplines necessary to build durable, high-performance and cost-effective robots through the close integration of software, electronics and hardware. Our core technologies serve as reusable building blocks that we adapt and expand to develop next generation and new products, reducing the time, cost and risk of product development. Our significant expertise in robot design and engineering, combined with our management teams experience in military and consumer markets, positions us to capitalize on the expected growth in the market for robots. | |
Over the past three years, we sold more than 1.2 million of our Roomba floor vacuuming robots. We also sold to the U.S. military during that time more than 200 of our PackBot tactical military robots, most of which have been deployed on missions in Afghanistan and Iraq. |
Over the past several decades, the desire to continue to improve productivity and quality of life has led to the development of robots. Historical attempts at producing robots have had limited success due to the inherent complexities in integrating multiple technologies to deliver truly functional robots at affordable prices. Behavior-based robots, which represent a new generation of robots, can effectively deal with dynamic and changing environments, and are particularly well suited for consumer, military and industrial tasks that are repetitive, physically demanding or dangerous. The need for robots has increased in parallel with the evolution of robot technology. | |
We believe that the demand for robots that can complete domestic chores is developing rapidly due to demographic trends, including the aging population, increasing prevalence of dual-income households, declining birth rates and ongoing reduction in peoples free time. According to the 2004 United Nations Economic Commission for Europe in cooperation with the International Federation of Robotics, there will be approximately $2.6 billion spent worldwide on household robots from 2004 through 2007. |
1
| Deliver Great Products and Continue to Expand Our Existing Markets. Our strategy is to deliver innovative products rapidly at economical price points and continue to extend our consumer and military product offerings. | |
| Innovate to Penetrate New Markets. Our culture of innovation and experience enables us to rapidly develop robots for use in a broad range of applications and to penetrate new market segments globally. | |
| Complement Our Core Competencies With Strategic Alliances. We rely on strategic alliances to provide complementary competencies and enhance our ability to enter and compete in new markets. | |
| Leverage Our Research and Development Efforts Across Different Products and Markets. By using our research and development across all our products and markets, our strategy is to develop cost-effective robots and rapidly bring them to market. | |
| Build a Community of Third-Party Developers Around Our Platforms. Our extendable product platforms with open interfaces allow us to foster a community of third-party developers that we believe will enable us to expand our footprint while maintaining market leadership. | |
| Continue to Strengthen Our Brand. To strengthen our brand, we will reinforce our message of innovation, reliability, safety and value through continued investment in our marketing programs. | |
| Continue to Invest Aggressively in Our Business and Our People. We will maximize long-term profitability by continuing to invest significant resources over the next several years in our product development and sales efforts, and in training highly-qualified personnel. |
2
| we have incurred significant losses since inception, including net losses of $10.8 million, $7.4 million and $7.2 million in the years ended December 31, 2002 and 2003 and the six months ended July 2, 2005, respectively, resulting in an accumulated deficit of $34.0 million at July 2, 2005, and our future profitability is uncertain; | |
| we operate in an emerging market, which makes it difficult to evaluate our business and future prospects; | |
| we have generated, and expect to continue to generate, more than half of our revenue from our Roomba line of floor vacuuming robots; and | |
| we depend on the U.S. federal government for a significant portion of our revenue. |
3
4
shares
shares
shares
shares
shares
Use of proceeds
We intend to use the net proceeds to us from this offering for
working capital and other general corporate purposes, including
to finance the development of new products, sales and marketing
activities, capital expenditures and the costs of operating as a
public company. We will not receive any proceeds from the sale
of shares by the selling stockholders. See Use of
Proceeds for more information.
Risk factors
You should read the Risk Factors section of this
prospectus for a discussion of factors that you should consider
carefully before deciding to invest in shares of our common
stock.
Proposed NASDAQ National Market symbol
IRBT
2,954,233 shares of common stock issuable upon exercise of
options outstanding as of July 2, 2005 at a weighted
average exercise price of $2.39 per share;
613,623 shares of common stock reserved as of July 2,
2005 for future issuance under our stock-based compensation
plans; and
18,000 shares of common stock issuable upon the exercise of
a warrant, with an approximate exercise price of $3.74 per
share.
the automatic conversion of all outstanding shares of our
preferred stock into 9,557,246 shares of common stock, upon
the closing of the offering;
the filing of our amended and restated certificate of
incorporation and the adoption of our amended and restated
by-laws immediately prior to the effectiveness of this
offering; and
no exercise by the underwriters of their over-allotment option.
Table of Contents
5
Six Months Ended
Year Ended December 31,
June 30,
July 2,
2002
2003
2004
2004
2005
(unaudited)
(in thousands, except per share data)
$
6,955
$
45,896
$
82,147
$
23,087
$
34,723
7,223
7,661
12,365
5,039
8,233
639
759
531
483
62
14,817
54,316
95,043
28,609
43,018
4,896
31,194
59,321
16,471
26,750
11,861
6,143
8,371
3,345
5,770
16,757
37,337
67,692
19,816
32,520
(1,940
)
16,979
27,351
8,793
10,498
1,736
3,848
5,504
2,563
5,713
7,128
20,521
21,404
9,188
12,061
90
8,864
24,369
26,908
11,751
17,864
(10,804
)
(7,390
)
443
(2,958
)
(7,366
)
(10,774
)
(7,411
)
219
(3,000
)
(7,157
)
$
(2.00
)
$
(0.79
)
$
0.01
$
(0.31
)
$
(0.72
)
$
(2.00
)
$
(0.79
)
$
0.01
$
(0.31
)
$
(0.72
)
5,391
9,352
9,660
9,530
10,008
5,391
9,352
19,183
9,530
10,008
$
0.01
$
(0.37
)
$
0.01
$
(0.37
)
18,002
19,565
19,183
19,565
(1)
Beginning in the first quarter of 2004, we converted from
recognizing revenue from U.S. consumer product sales on a
sell-through basis (when retail stores sold our
robots) to a sell-in basis (when our robots are
shipped to retail stores). As a result of this conversion, our
revenue and gross profit in the first quarter of 2004 included
$5.7 million and $2.5 million, respectively, from
robots shipped prior to 2004.
(2)
We have computed the pro forma net income (loss) per share and
the pro forma weighted-average shares outstanding included in
the statement of operations data as we describe in Note 2
of the notes to our consolidated financial statements.
July 2, 2005
Actual
As Adjusted
(unaudited)
(in thousands)
$
15,090
$
40,336
33,672
37,506
(30,843
)
Table of Contents
| generate sufficient revenue to maintain profitability; | |
| acquire and maintain market share in our consumer and military markets; | |
| manage growth in our operations; | |
| attract and retain customers of our consumer robots; | |
| develop and renew government contracts for our military robots; | |
| attract and retain additional roboticists and other highly-qualified personnel; | |
| adapt to new or changing policies and spending priorities of governments and government agencies; and | |
| access additional capital when required and on reasonable terms. |
6
| seasonality in the sales of our consumer products; | |
| the size and timing of orders from military and other government agencies; | |
| the mix of products that we sell in the period; | |
| disruption of supply of our products from our manufacturers; | |
| the inability to attract and retain qualified, revenue-generating personnel; | |
| unanticipated costs incurred in the introduction of new products; | |
| costs of labor and raw materials; | |
| our ability to introduce new products and enhancements to our existing products on a timely basis; | |
| price reductions; | |
| the amount of government funding and the political, budgetary and purchasing constraints of our government agency customers; and | |
| cancellations, delays or contract amendments by government agency customers. |
7
| terminate contracts for convenience, in whole or in part, at any time and for any reason; | |
| reduce or modify contracts or subcontracts if its requirements or budgetary constraints change; | |
| cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; | |
| exercise production priorities, which allow it to require that we accept government purchase orders or produce products under its contracts before we produce products under other contracts, which may displace or delay production of more profitable orders; | |
| claim certain rights in products provided by us; and | |
| control or prohibit the export of certain of our products. |
8
| lack of direct control over production capacity and delivery schedules; | |
| lack of direct control over quality assurance, manufacturing yields and production costs; | |
| lack of enforceable contractual provisions over the production and costs of consumer products; | |
| risk of loss of inventory while in transit from China; and | |
| risks associated with international commerce with China, including unexpected changes in legal and regulatory requirements, changes in tariffs and trade policies, risks associated with the protection of intellectual property and political and economic instability. |
9
| the cost, performance and reliability of our products and products offered by our competitors; | |
| public perceptions regarding the effectiveness and value of robots; | |
| customer satisfaction with robots; and | |
| marketing efforts and publicity regarding robots. |
10
| changes in government programs that are related to our products and services; | |
| adoption of new laws or regulations relating to government contracting or changes to existing laws or regulations; | |
| changes in political or public support for security and defense programs; | |
| delays or changes in the government appropriations process; | |
| uncertainties associated with the war on terror and other geo-political matters; and | |
| delays in the payment of our invoices by government payment offices. |
| developers of robotic floor care products such as AB Electrolux, Alfred Kärcher GmbH & Co., Samsung Electronics Co., Ltd., Koolatron Corp. and Yujin Robotic Co. Ltd.; |
11
| developers of small unmanned ground vehicles such as Foster-Miller, Inc. a wholly owned subsidiary of QinetiQ North America, Inc., Allen-Vanguard Corporation, and Remotec a division of Northrop Grumman Corporation; and | |
| established government contractors working on unmanned systems such as Lockheed Martin Corporation, BAE Systems, Inc. and General Dynamics Corporation. |
12
13
14
| our collaborators may not devote the resources necessary or may otherwise be unable to complete development and commercialization of these potential products; | |
| our existing collaborations are and future collaborations may be subject to termination on short notice; | |
| our collaborators may be pursuing alternative technologies or developing alternative products, either on their own or in collaboration with others, that may be competitive with our products, which could affect our collaborators commitment to the collaboration with us; | |
| reductions in marketing or sales efforts or a discontinuation of marketing or sales of our products by our collaborators could reduce our revenue; | |
| our collaborators may terminate their collaborations with us, which could make it difficult for us to attract new collaborators or harm our reputation in the business and financial communities; and | |
| our collaborators may pursue higher priority programs or change the focus of their development programs, which would weaken our collaborators commitment to us. |
15
| the Federal Acquisition Regulations and supplemental agency regulations, which comprehensively regulate the formation and administration of, and performance under government contracts; | |
| the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with contract negotiations; | |
| the Cost Accounting Standards, which impose accounting requirements that govern our right to reimbursement under cost-based government contracts; | |
| the Foreign Corrupt Practices Act, which prohibits U.S. companies from providing anything of value to a foreign official to help obtain, retain or direct business, or obtain any unfair advantage; | |
| the False Claims Act and the False Statements Act, which, respectively, impose penalties for payments made on the basis of false facts provided to the government, and impose penalties on the basis of false statements, even if they do not result in a payment; and | |
| laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data. |
16
| difficulties in integrating the operations, technologies, products, existing contracts, accounting and personnel of the target company and realizing the anticipated synergies of the combined businesses; | |
| difficulties in supporting and transitioning customers, if any, of the target company; | |
| diversion of financial and management resources from existing operations; | |
| the price we pay or other resources that we devote may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or other resources to another opportunity; | |
| risks of entering new markets in which we have limited or no experience; | |
| potential loss of key employees, customers and strategic alliances from either our current business or the target companys business; | |
| assumption of unanticipated problems or latent liabilities, such as problems with the quality of the target companys products; and | |
| inability to generate sufficient revenue to offset acquisition costs. |
17
| hire additional roboticists and other personnel; | |
| develop new or enhance existing robots and robot accessories; | |
| enhance our operating infrastructure; | |
| acquire complementary businesses or technologies; or | |
| otherwise respond to competitive pressures. |
18
| difficulties in staffing, managing and supporting operations in multiple countries; | |
| difficulties in enforcing agreements and collecting receivables through foreign legal systems and other relevant legal issues; | |
| fewer legal protections for intellectual property; | |
| foreign and U.S. taxation issues and international trade barriers; | |
| difficulties in obtaining any necessary governmental authorizations for the export of our products to certain foreign jurisdictions; | |
| potential fluctuations in foreign economies; | |
| government currency control and restrictions on repatriation of earnings; | |
| fluctuations in the value of foreign currencies and interest rates; | |
| general economic and political conditions in the markets in which we operate; | |
| domestic and international economic or political changes, hostilities and other disruptions in regions where we currently operate or may operate in the future; and | |
| different and changing legal and regulatory requirements in the jurisdictions in which we currently operate or may operate in the future. |
19
| fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; | |
| changes in estimates of our financial results or recommendations by securities analysts; | |
| failure of any of our products to achieve or maintain market acceptance; | |
| changes in market valuations of similar companies; | |
| success of competitive products; | |
| changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; | |
| announcements by us or our competitors of significant products, contracts, acquisitions or strategic alliances; | |
| regulatory developments in the United States, foreign countries or both; | |
| litigation involving our company, our general industry or both; | |
| additions or departures of key personnel; | |
| investors general perception of us; and | |
| changes in general economic, industry and market conditions. |
20
Number of Shares and | ||
% of Total Outstanding | Date Available for Sale Into Public Market | |
shares,
or %
|
On the date of this prospectus | |
shares,
or %
|
90 days after the date of this prospectus | |
shares,
or %
|
180 days after the date of this prospectus, subject to extension in specified instances, due to lock-up agreements between the holders of these shares and the underwriters. However, Morgan Stanley & Co. Incorporated and J.P. Morgan Securities Inc. can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares at any time | |
shares,
or %
|
180 days after the date of this prospectus, subject to extension in specified instances, due to a lock-up agreement between the holders of these shares and us. However, with the underwriters consent, we can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares at any time | |
shares,
or %
|
Between 181 and 365 days after the date of this prospectus, depending on the requirements of the federal securities laws |
21
| limitations on the removal of directors; | |
| a classified board of directors so that not all members of our board are elected at one time; | |
| advance notice requirements for stockholder proposals and nominations; | |
| the inability of stockholders to act by written consent or to call special meetings; | |
| the ability of our board of directors to make, alter or repeal our by-laws; and | |
| the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval. |
22
23
24
25
| on an actual basis; and | |
| on an as adjusted basis to give effect to the conversion of our convertible preferred stock and to reflect the sale of shares of common stock that we are offering at an assumed initial public offering price of $ per share, which is the midpoint of the range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
As of July 2, 2005 | |||||||||
Actual | As Adjusted | ||||||||
(unaudited) | |||||||||
(in thousands) | |||||||||
Preferred stock, $.01 par value, 9,557 shares
authorized and issued, actual; 5,000 shares authorized, no
shares issued, as adjusted:
|
$ | 37,506 | | ||||||
Stockholders equity (deficit):
|
|||||||||
Common stock, $.01 par value: 35,000 shares
authorized; 10,338 shares issued, actual;
100,000 shares authorized, shares issued, as adjusted
|
103 | ||||||||
Additional paid-in capital
|
4,578 | ||||||||
Deferred stock-based compensation
|
(1,480 | ) | |||||||
Accumulated deficit
|
(34,044 | ) | |||||||
Total stockholders equity (deficit)
|
(30,843 | ) | |||||||
Total capitalization
|
$ | 6,663 | |||||||
26
Assumed initial public offering price per share
|
$ | ||||||||
Net tangible book value as of July 2, 2005
|
$ | ||||||||
Increase attributable to this offering
|
|||||||||
Adjusted net tangible book value per share after this offering
|
|||||||||
Dilution in net tangible book value per share to new investors
|
$ | ||||||||
Shares Purchased | Total Consideration | ||||||||||||||||||||
Average Price | |||||||||||||||||||||
Number | Percent | Amount | Percent | Per Share | |||||||||||||||||
Existing stockholders
|
% | $ | % | $ | |||||||||||||||||
New investors
|
$ | ||||||||||||||||||||
Total
|
% | $ | % | ||||||||||||||||||
27
Six Months | ||||||||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||
June 30, | July 2, | |||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||
Consolidated Statement of Operations:
|
||||||||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||||||||
Product
revenue
(1)
|
$ | 1,904 | $ | 1,408 | $ | 6,955 | $ | 45,896 | $ | 82,147 | $ | 23,087 | $ | 34,723 | ||||||||||||||||
Contract revenue
|
8,846 | 12,077 | 7,223 | 7,661 | 12,365 | 5,039 | 8,233 | |||||||||||||||||||||||
Royalty revenue
|
| 27 | 639 | 759 | 531 | 483 | 62 | |||||||||||||||||||||||
Total revenue
|
10,750 | 13,512 | 14,817 | 54,316 | 95,043 | 28,609 | 43,018 | |||||||||||||||||||||||
Cost of Revenue
|
||||||||||||||||||||||||||||||
Cost of product revenue
|
1,506 | 1,148 | 4,896 | 31,194 | 59,321 | 16,471 | 26,750 | |||||||||||||||||||||||
Cost of contract revenue
|
6,607 | 8,566 | 11,861 | 6,143 | 8,371 | 3,345 | 5,770 | |||||||||||||||||||||||
Total cost of revenue
|
8,113 | 9,714 | 16,757 | 37,337 | 67,692 | 19,816 | 32,520 | |||||||||||||||||||||||
Gross Profit
(Loss)
(1)
|
2,637 | 3,798 | (1,940 | ) | 16,979 | 27,351 | 8,793 | 10,498 | ||||||||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||||||||
Research and development
|
3,225 | 1,846 | 1,736 | 3,848 | 5,504 | 2,563 | 5,713 | |||||||||||||||||||||||
Selling, general and administrative
|
3,038 | 4,669 | 7,128 | 20,521 | 21,404 | 9,188 | 12,061 | |||||||||||||||||||||||
Stock-based
compensation
(2)
|
| | | | | | 90 | |||||||||||||||||||||||
Total operating expenses
|
6,263 | 6,515 | 8,864 | 24,369 | 26,908 | 11,751 | 17,864 | |||||||||||||||||||||||
Operating Income (Loss)
|
(3,626 | ) | (2,717 | ) | (10,804 | ) | (7,390 | ) | 443 | (2,958 | ) | (7,366 | ) | |||||||||||||||||
Other Income (Expense), Net
|
171 | 101 | 45 | 15 | (80 | ) | (41 | ) | 211 | |||||||||||||||||||||
Income (Loss) Before Income Taxes
|
(3,455 | ) | (2,616 | ) | (10,759 | ) | (7,375 | ) | 363 | (2,999 | ) | (7,155 | ) | |||||||||||||||||
Income Tax Expense
|
8 | 16 | 15 | 36 | 144 | 1 | 2 | |||||||||||||||||||||||
Net Income (Loss)
|
$ | (3,463 | ) | $ | (2,632 | ) | $ | (10,774 | ) | $ | (7,411 | ) | $ | 219 | $ | (3,000 | ) | $ | (7,157 | ) | ||||||||||
Net Income (Loss) Per Share
|
||||||||||||||||||||||||||||||
Basic
|
$ | (0.66 | ) | $ | (0.50 | ) | $ | (2.00 | ) | $ | (0.79 | ) | $ | 0.01 | $ | (0.31 | ) | $ | (0.72 | ) | ||||||||||
Diluted
|
$ | (0.66 | ) | $ | (0.50 | ) | $ | (2.00 | ) | $ | (0.79 | ) | $ | 0.01 | $ | (0.31 | ) | $ | (0.72 | ) | ||||||||||
Number of Shares Used in Per Share Calculations
|
||||||||||||||||||||||||||||||
Basic
|
5,231 | 5,312 | 5,391 | 9,352 | 9,660 | 9,530 | 10,008 | |||||||||||||||||||||||
Diluted
|
5,231 | 5,312 | 5,391 | 9,352 | 19,183 | 9,530 | 10,008 | |||||||||||||||||||||||
Pro Forma Net Income (Loss)
Data
(3)
:
|
||||||||||||||||||||||||||||||
Pro Forma Net Income (Loss) Per Share
|
||||||||||||||||||||||||||||||
Basic
|
$ | 0.01 | $ | (0.37 | ) | |||||||||||||||||||||||||
Diluted
|
$ | 0.01 | $ | (0.37 | ) | |||||||||||||||||||||||||
Number of Shares Used in Pro Forma Per Share Calculations
|
||||||||||||||||||||||||||||||
Basic
|
18,002 | 19,565 | ||||||||||||||||||||||||||||
Diluted
|
19,183 | 19,565 |
(1) | Beginning in the first quarter of 2004, we converted from recognizing revenue from U.S. consumer product sales on a sell-through basis (when retail stores sold our robots) to a sell-in basis (when our robots are shipped to retail stores). As a result of this conversion, our revenue and gross profit in the first quarter of 2004 included $5.7 million and $2.5 million, respectively, from robots shipped prior to 2004. |
28
(2) | Stock-based compensation recorded in 2005 breaks down by expense classification as follows: |
Six Months Ended | |||||
July 2, 2005 | |||||
(unaudited) | |||||
(in thousands) | |||||
Cost of product revenue
|
$ | 9 | |||
Cost of contract revenue
|
11 | ||||
Research and development
|
32 | ||||
Selling, general and administrative
|
38 | ||||
Total stock-based compensation
|
$ | 90 | |||
(3) | We have computed the pro forma net income (loss) per share and the pro forma weighted-average shares outstanding included in the statement of operations data as we describe in Note 2 of the notes to our consolidated financial statements. |
As of December 31, | ||||||||||||||||||||||||
As of July 2, | ||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 806 | $ | 7,179 | $ | 3,014 | $ | 4,620 | $ | 19,441 | $ | 15,090 | ||||||||||||
Total assets
|
5,241 | 10,580 | 8,705 | 27,827 | 46,314 | 40,336 | ||||||||||||||||||
Total liabilities
|
2,015 | 3,182 | 12,049 | 25,624 | 33,097 | 33,672 | ||||||||||||||||||
Total redeemable convertible preferred stock
|
7,873 | 14,639 | 14,639 | 27,562 | 37,506 | 37,506 | ||||||||||||||||||
Total stockholders equity (deficit)
|
(4,646 | ) | (7,241 | ) | (17,983 | ) | (25,359 | ) | (24,289 | ) | (30,843 | ) |
29
30
Cost of Revenue |
31
Gross Profit |
Research and Development Expenses |
| salaries and related costs for our engineers; | |
| costs for high technology components used in product and prototype development; and | |
| costs of test equipment used during product development. |
Selling, General and Administrative Expenses |
| salaries and related costs for sales and marketing personnel; | |
| salaries and related costs for executives and administrative personnel; | |
| advertising, marketing and other brand-building costs; | |
| professional services costs; | |
| information systems and infrastructure costs; | |
| travel and related costs; and | |
| occupancy and other overhead costs. |
32
Stock-Based Compensation Expenses |
Fiscal Periods |
Revenue Recognition |
33
Accounting for Stock-Based Awards |
34
35
Accounting for Income Taxes |
Warranty |
Inventory Valuation |
Six Months Ended | |||||||||||||||||||||||
Fiscal Year Ended December 31, | |||||||||||||||||||||||
June 30, | July 2, | ||||||||||||||||||||||
2002 | 2003 | 2004 | 2004 | 2005 | |||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Revenue
|
|||||||||||||||||||||||
Product
revenue
(1)
|
$ | 6,955 | $ | 45,896 | $ | 82,147 | $ | 23,087 | $ | 34,723 | |||||||||||||
Contract revenue
|
7,223 | 7,661 | 12,365 | 5,039 | 8,233 | ||||||||||||||||||
Royalty revenue
|
639 | 759 | 531 | 483 | 62 | ||||||||||||||||||
Total revenue
|
14,817 | 54,316 | 95,043 | 28,609 | 43,018 | ||||||||||||||||||
Cost of Revenue
|
|||||||||||||||||||||||
Cost of product revenue
|
4,896 | 31,194 | 59,321 | 16,471 | 26,750 | ||||||||||||||||||
Cost of contract revenue
|
11,861 | 6,143 | 8,371 | 3,345 | 5,770 | ||||||||||||||||||
Total cost of revenue
|
16,757 | 37,337 | 67,692 | 19,816 | 32,520 | ||||||||||||||||||
Gross profit
(loss)
(1)
|
(1,940 | ) | 16,979 | 27,351 | 8,793 | 10,498 |
36
Six Months Ended
Fiscal Year Ended December 31,
June 30,
July 2,
2002
2003
2004
2004
2005
(unaudited)
(in thousands)
1,736
3,848
5,504
2,563
5,713
7,128
20,521
21,404
9,188
12,061
90
8,864
24,369
26,908
11,751
17,864
(10,804
)
(7,390
)
443
(2,958
)
(7,366
)
45
15
(80
)
(41
)
211
(10,759
)
(7,375
)
363
(2,999
)
(7,155
)
15
36
144
1
2
$
(10,774
)
$
(7,411
)
$
219
$
(3,000
)
$
(7,157
)
(1) | Beginning in the first quarter of 2004, we converted from recognizing revenue from U.S. consumer product sales on a sell-through basis (when retail stores sold our robots) to a sell-in basis (when our robots are shipped to retail stores). As a result of this conversion, our revenue and gross profit in the first quarter of 2004 included $5.7 million and $2.5 million, respectively, from robots shipped prior to 2004. |
(2) | Stock-based compensation recorded in 2005 breaks down by expense classification as follows: |
Six Months Ended | |||||
July 2, 2005 | |||||
(unaudited) | |||||
(in thousands) | |||||
Cost
of product revenue
|
$ | 9 | |||
Cost
of contract revenue
|
11 | ||||
Research
and development
|
32 | ||||
Selling,
general and administrative
|
38 | ||||
Total
stock-based compensation
|
$ | 90 | |||
Fiscal Year Ended | Six Months Ended | ||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
June 30, | July 2, | ||||||||||||||||||||||
2002 | 2003 | 2004 | 2004 | 2005 | |||||||||||||||||||
Revenue
|
|||||||||||||||||||||||
Product revenue
|
47.0 | % | 84.5 | % | 86.4 | % | 80.7 | % | 80.8 | % | |||||||||||||
Contract revenue
|
48.7 | 14.1 | 13.0 | 17.6 | 19.1 | ||||||||||||||||||
Royalty revenue
|
4.3 | 1.4 | 0.6 | 1.7 | 0.1 | ||||||||||||||||||
Total revenue
|
100.0 | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||
Cost of Revenue
|
|||||||||||||||||||||||
Cost of product revenue
|
33.0 | 57.4 | 62.4 | 57.6 | 62.2 | ||||||||||||||||||
Cost of contract revenue
|
80.1 | 11.3 | 8.8 | 11.7 | 13.4 | ||||||||||||||||||
Total cost of revenue
|
113.1 | 68.7 | 71.2 | 69.3 | 75.6 | ||||||||||||||||||
Gross profit (loss)
|
(13.1 | ) | 31.3 | 28.8 | 30.7 | 24.4 |
37
Fiscal Year Ended
Six Months Ended
December 31,
June 30,
July 2,
2002
2003
2004
2004
2005
11.7
7.1
5.8
9.0
13.3
48.1
37.8
22.5
32.1
28.0
0.2
59.8
44.9
28.3
41.1
41.5
(72.9
)
(13.6
)
0.5
(10.4
)
(17.1
)
0.3
(0.1
)
(0.1
)
0.5
(72.6
)
(13.6
)
0.4
(10.5
)
(16.6
)
0.1
0.2
(72.7
)%
(13.6
)%
0.2
%
(10.5
)%
(16.6
)%
Comparison of Six Months Ended July 2, 2005 to Six Months Ended June 30, 2004 |
Revenue |
Cost of Revenue |
38
Gross Profit |
Research and Development |
Selling, General and Administrative |
Other Income (Expense), Net |
Income Tax Provision |
Comparison of Years Ended December 31, 2004 and 2003 |
Revenue |
39
Cost of Revenue |
Gross Profit |
Research and Development |
Selling, General and Administrative |
Other Income (Expense), Net |
40
Income Tax Provision |
Comparison of Years Ended December 31, 2003 and 2002 |
Revenue |
Cost of Revenue |
Gross Profit |
Research and Development |
Selling, General and Administrative |
41
Other Income (Expense), Net |
Income Tax Provision |
Fiscal Quarter Ended | |||||||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | July 2, | ||||||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | ||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
Revenue
|
|||||||||||||||||||||||||||
Product
revenue
(1)
|
$ | 15,812 | $ | 7,275 | $ | 25,502 | $ | 33,558 | $ | 12,531 | $ | 22,193 | |||||||||||||||
Contract revenue
|
2,221 | 2,818 | 3,461 | 3,865 | 4,539 | 3,693 | |||||||||||||||||||||
Royalty revenue
|
465 | 18 | (15 | ) | 62 | 62 | | ||||||||||||||||||||
Total revenue
|
18,498 | 10,111 | 28,948 | 37,485 | 17,132 | 25,886 | |||||||||||||||||||||
Cost of Revenue
|
|||||||||||||||||||||||||||
Cost of product revenue
|
10,417 | 6,053 | 18,560 | 24,290 | 9,834 | 16,917 | |||||||||||||||||||||
Cost of contract revenue
|
1,352 | 1,994 | 2,101 | 2,924 | 3,124 | 2,645 | |||||||||||||||||||||
Total cost of revenue
|
11,769 | 8,047 | 20,661 | 27,214 | 12,958 | 19,562 | |||||||||||||||||||||
Gross
profit
(1)
|
6,729 | 2,064 | 8,287 | 10,271 | 4,174 | 6,324 | |||||||||||||||||||||
Operating Expenses
|
|||||||||||||||||||||||||||
Research and development
|
1,422 | 1,141 | 1,206 | 1,735 | 3,048 | 2,665 | |||||||||||||||||||||
Selling, general and administrative
|
4,790 | 4,399 | 4,139 | 8,077 | 5,295 | 6,766 | |||||||||||||||||||||
Stock-based
compensation
(2)
|
| | | | 27 | 63 | |||||||||||||||||||||
Total operating expenses
|
6,212 | 5,540 | 5,345 | 9,812 | 8,370 | 9,494 | |||||||||||||||||||||
Operating income (loss)
|
517 | (3,476 | ) | 2,942 | 459 | (4,196 | ) | (3,170 | ) | ||||||||||||||||||
Other income (expense), net
|
(35 | ) | (5 | ) | (7 | ) | (32 | ) | 97 | 114 | |||||||||||||||||
Income (loss) before income taxes
|
482 | (3,481 | ) | 2,935 | 427 | (4,099 | ) | (3,056 | ) | ||||||||||||||||||
Income tax expense
|
1 | | 124 | 19 | 2 | | |||||||||||||||||||||
Net income (loss)
|
$ | 481 | $ | (3,481 | ) | $ | 2,811 | $ | 408 | $ | (4,101 | ) | $ | (3,056 | ) | ||||||||||||
42
(1) | Beginning in the first quarter of 2004, we converted from recognizing revenue from U.S. consumer product sales on a sell-through basis (when retail stores sold our robots) to a sell-in basis (when our robots are shipped to retail stores). As a result of this conversion, our revenue and gross profit in the first quarter of 2004 included $5.7 million and $2.5 million, respectively, from robots shipped prior to 2004. |
(2) | Stock-based compensation recorded in 2005 breaks down by expense classification as follows: |
Fiscal Quarter Ended | |||||||||
March 31, | July 2, | ||||||||
2005 | 2005 | ||||||||
(unaudited) | |||||||||
(in thousands) | |||||||||
Cost
of product revenue
|
$ | 3 | $ | 6 | |||||
Cost
of contract revenue
|
4 | 7 | |||||||
Research
and development
|
10 | 22 | |||||||
Selling,
general and administrative
|
10 | 28 | |||||||
Total
stock-based compensation
|
$ | 27 | $ | 63 | |||||
Fiscal Quarter Ended | |||||||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | July 2, | ||||||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | ||||||||||||||||||||||
Revenue
|
|||||||||||||||||||||||||||
Product revenue
|
85.5 | % | 72.0 | % | 88.0 | % | 89.5 | % | 73.1 | % | 85.7 | % | |||||||||||||||
Contract revenue
|
12.0 | 27.9 | 12.0 | 10.3 | 26.5 | 14.3 | |||||||||||||||||||||
Royalty revenue
|
2.5 | 0.1 | | 0.2 | 0.4 | | |||||||||||||||||||||
Total revenue
|
100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||||
Cost of Revenue
|
|||||||||||||||||||||||||||
Cost of product revenue
|
56.3 | 59.9 | 64.1 | 64.8 | 57.4 | 65.4 | |||||||||||||||||||||
Cost of contract revenue
|
7.3 | 19.7 | 7.3 | 7.8 | 18.2 | 10.2 | |||||||||||||||||||||
Total cost of revenue
|
63.6 | 79.6 | 71.4 | 72.6 | 75.6 | 75.6 | |||||||||||||||||||||
Gross profit
|
36.4 | 20.4 | 28.6 | 27.4 | 24.4 | 24.4 | |||||||||||||||||||||
Operating Expenses
|
|||||||||||||||||||||||||||
Research and development
|
7.7 | 11.3 | 4.2 | 4.6 | 17.8 | 10.3 | |||||||||||||||||||||
Selling, general and administrative
|
25.9 | 43.5 | 14.3 | 21.6 | 30.9 | 26.1 | |||||||||||||||||||||
Stock-based compensation
|
| | | | 0.2 | 0.2 | |||||||||||||||||||||
Total operating expenses
|
33.6 | 54.8 | 18.5 | 26.2 | 48.9 | 36.6 | |||||||||||||||||||||
Operating income (loss)
|
2.8 | (34.4 | ) | 10.1 | 1.2 | (24.5 | ) | (12.2 | ) | ||||||||||||||||||
Other income (expense), net
|
(0.2 | ) | | | (0.1 | ) | 0.6 | 0.4 | |||||||||||||||||||
Income (loss) before income taxes
|
2.6 | (34.4 | ) | 10.1 | 1.1 | (23.9 | ) | (11.8 | ) | ||||||||||||||||||
Income tax expense
|
| | 0.4 | 0.1 | | | |||||||||||||||||||||
Net income (loss)
|
2.6 | % | (34.4 | )% | 9.7 | % | 1.0 | % | (23.9 | )% | (11.8 | )% | |||||||||||||||
43
Discussion of Cash Flows |
44
Working Capital Facility |
| incur or guaranty additional indebtedness; | |
| create liens; | |
| enter into transactions with affiliates; |
45
| make loans or investments; | |
| sell assets; | |
| pay dividends or make distributions on, or repurchase, our stock; or | |
| consolidate or merge with other entities. |
Working Capital and Capital Expenditure Needs |
Payments Due by Period | ||||||||||||||||
Less Than | 1 to | 3 to | ||||||||||||||
1 Year | 3 Years | 5 Years | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Operating leases
|
$ | 929 | $ | 1,519 | $ | 766 | $ | 3,214 |
46
Foreign Currency Risk |
Interest Rate Sensitivity |
47
48
49
50
iRobot Innovation Engine |
51
52
53
54
Consumer Products |
55
| the ability to sense a cliff or drop-off point and to react by reversing course automatically; | |
| a non-marring bumper to clean up to obstacles without damaging furniture or walls; | |
| a wide cleaning path to clean an entire room on a single battery charge; | |
| an edging brush to clean along surface edges; | |
| dirt-sensing, which allows the Roomba robot to detect dirtier areas in the home and respond by increasing and extending the intensity of its cleaning efforts in that concentrated space; and | |
| improved cleaning and maintenance operations, enhancing the user friendliness of the Roomba robot. |
56
Government and Industrial Products |
Contract Research and Development Projects |
57
| Route Reconnaissance. Move ahead of the soldier along a planned route of advance and return maps and video of what lies ahead. | |
| Perimeter Reconnaissance. Traverse the entire perimeter of a building complex and return with maps and video. | |
| Street-Based Reconnaissance. Navigate down city streets using street-following behaviors along with GPS/ INS and return maps and video of the urban terrain. The modular Wayfarer navigation payload connects to the standard PackBot payload interface and includes light detection and ranging, or LIDAR, stereo vision, forward-looking infrared, or FLIR, and inertial navigation system sensor hardware. |
58
Deere & Company. We have entered into a strategic business agreement with the commercial and consumer equipment division of Deere & Company to explore and potentially collaborate on multiple projects involving technology and product development and commercialization efforts. We have collaborated with Deere & Company on the development of the R-Gator unmanned ground vehicle. Deere & Company has provided funded research and development, access to its M-Gator military utility vehicle platform and certain other technology, and we have provided robot technologies, including our AWARE Robot Intelligence Systems. Technology jointly developed under the agreement will be owned by both Deere & Company and us, and technology independently developed by either Deere & Company or us will be owned by the developing party. We and Deere & Company are currently in the process of producing a limited number of R-Gator prototypes for evaluation by potential government contractors. Net proceeds from sales of the R-Gator generally will be shared equally between us and Deere & Company, subject to recoupment of each partys respective contribution to the project. | |
To facilitate management of the R-Gator project and additional collaborative activities, we and Deere & Company have established a joint management committee to develop proposals for projects, oversee and report on the progress and fulfillment of projects, and seek opportunities to further the goals of the strategic business relationship through joint demonstration of technology and products at trade shows, industry days and internal management reviews. We believe that our strategic alliance with Deere & Company will lead to technologies, and later products, that are directly applicable to serving markets such as agricultural and construction equipment, in which we believe autonomous vehicles can play a significant role. Under the agreement, we have agreed not to work with any third party on projects competitive with certain Deere & Company products if Deere & Company makes annual payments to us under the agreement of at least $2.0 million. | |
The Clorox Company. We have entered into a joint development and license agreement with The Clorox Company, whereby Clorox is the exclusive provider of the cleaning solution for the Scooba floor washing robot. Our alliance with The Clorox Company allows us to integrate their cleaning technology and know-how into our floor washing robot, improves consumer perception and awareness of our brand by association and through joint marketing, and provides a necessary product component at an affordable price. |
Consumer |
59
Amazon.com
|
Kohls | |
Bed
Bath & Beyond
|
Linens n Things | |
Best
Buy
|
Mitsui & Co. | |
Brookstone
|
M. Block & Sons | |
BJs
Wholesale Club
|
Sears | |
Hammacher
Schlemmer
|
The Sharper Image | |
The
Home Depot
|
Target | |
Home
Shopping Network
|
Government and Industrial |
Research Support Agencies | Military Customers | |
U.S. Defense Advanced Research Projects Agency
(DARPA)
|
U.S. Army | |
U.S. Space and Warfare Command (SPAWAR)
|
U.S. Marine Corps | |
U.S. Army Tank-automotive and Armaments Command
(TACOM)
|
U.S. Navy | |
Technology Support Working Group (TSWG)
|
Customer Service and Support |
60
61
Team Organization |
62
Global Engineering |
Spiral Development |
Leveraged Model |
63
64
65
66
developers of robotic floor care products such as AB Electrolux,
Alfred Kärcher GmbH & Co., Samsung Electronics
Co., Ltd., Koolatron Corp. and Yujin Robotic Co. Ltd.;
developers of small unmanned ground vehicles such as
Foster-Miller, Inc.a wholly owned subsidiary of QinetiQ
North America, Inc., Allen-Vanguard Corporation, and
Remoteca division of Northrop Grumman Corporation; and
established government contractors working on unmanned systems
such as Lockheed Martin Corporation, BAE Systems, Inc. and
General Dynamics Corporation.
Table of Contents
the Federal Acquisition Regulations and supplemental agency
regulations, which comprehensively regulate the formation and
administration of, and performance under government contracts;
the Truth in Negotiations Act, which requires certification and
disclosure of all cost and pricing data in connection with
contract negotiations;
the Cost Accounting Standards, which impose accounting
requirements that govern our right to reimbursement under
cost-based government contracts;
the Foreign Corrupt Practices Act, which prohibits
U.S. companies from providing anything of value to a
foreign official to help obtain, retain or direct business, or
obtain any unfair advantages;
the False Claims Act and the False Statements Act, which,
respectively, impose penalties for payments made on the basis of
false facts provided to the government, and impose penalties on
the basis of false statements, even if they do not result in a
payment; and
laws, regulations and executive orders restricting the use and
dissemination of information classified for national security
purposes and the exportation of certain products and technical
data.
Table of Contents
Table of Contents
Name | Age | Position | ||||
Helen Greiner
|
37 | Chairman of the Board | ||||
Colin Angle
|
38 | Chief Executive Officer and Director | ||||
Rodney Brooks, Ph.D.
|
50 | Chief Technology Officer and Director | ||||
Geoffrey P. Clear
|
55 | Senior Vice President, Chief Financial Officer and Treasurer | ||||
Joseph W. Dyer
|
58 | Executive Vice President and General Manager | ||||
Gregory F. White
|
41 | Executive Vice President and General Manager | ||||
Glen D. Weinstein
|
34 | Senior Vice President, General Counsel and Secretary | ||||
Gerald C. Kent, Jr.
|
40 | Vice President and Controller | ||||
Ronald
Chwang
(1)
|
57 | Director | ||||
Jacques S.
Gansler
(2)
|
70 | Director | ||||
Andrea
Geisser
(3)
|
62 | Director | ||||
George
McNamee
(1)(2)(3)
|
58 | Director | ||||
Peter
Meekin
(1)(2)(3)
|
56 | Director |
(1) | Member of the compensation committee. |
(2) | Member of the nominating and corporate governance committee. |
(3) | Member of the audit committee. |
67
68
| appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm; | |
| pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; | |
| reviewing and discussing with management and the 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; | |
| establishing policies and procedures for the receipt and retention of accounting related complaints and concerns; and |
69
| preparing the audit committee report required by Securities and Exchange Commission rules to be included in our annual proxy statement. |
| annually reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer; | |
| evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer; | |
| reviewing and approving the compensation of our other executive officers; | |
| overseeing and administering our compensation, welfare, benefit and pension plans and similar plans; and | |
| reviewing and making recommendations to the board with respect to director compensation. |
| developing and recommending to the board criteria for board and committee membership; | |
| establishing procedures for identifying and evaluating director candidates including nominees recommended by stockholders; | |
| identifying individuals qualified to become board members; | |
| recommending to the board the persons to be nominated for election as directors and to each of the boards committees; | |
| developing and recommending to the board a code of business conduct and ethics and a set of corporate governance guidelines; and | |
| overseeing the evaluation of the board and management. |
70
Compensation Earned |
Long-Term | |||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||
Awards | |||||||||||||||||||||
Restricted | Securities | ||||||||||||||||||||
Stock | Underlying | All Other | |||||||||||||||||||
Name and Principal Position | Salary | Bonus | Awards | Options | Compensation (1)(2) | ||||||||||||||||
Colin Angle
|
$ | 234,520 | $ | 151,914 | $ | 71,741 | | $ | 6,150 | ||||||||||||
Chief Executive Officer | |||||||||||||||||||||
Helen Greiner
|
234,512 | 135,804 | 71,741 | | 6,150 | ||||||||||||||||
Chairman of the Board | |||||||||||||||||||||
Geoffrey P. Clear
|
240,757 | 67,237 | 24,169 | | 6,150 | ||||||||||||||||
Senior Vice President,
Chief Financial Officer and Treasurer |
|||||||||||||||||||||
Gregory F. White
|
260,467 | 131,705 | 443,280 | | 6,150 | ||||||||||||||||
Executive Vice President and General Manager | |||||||||||||||||||||
Joseph W. Dyer
|
239,701 | 104,547 | 41,251 | 420,000 | 6,150 | ||||||||||||||||
Executive Vice President and General Manager |
(1) | Excludes medical, group life insurance and certain other benefits received by the named executive officers that are available generally to all of our salaried employees and certain perquisites and other personal benefits received by the named executive officers which do not exceed the lesser of $50,000 or 10% of any such named executive officers total annual compensation reported in this table. |
(2) | Represent 401(k) matching contributions. |
71
Option Grants in Last Fiscal Year |
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Number of | Options at | In-the-Money Options at | ||||||||||||||||||||||
Shares | December 31, 2004 | December 31, 2004 | ||||||||||||||||||||||
Acquired | Value | |||||||||||||||||||||||
Name | on Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Colin Angle
|
| | 347,710 | | | |||||||||||||||||||
Helen Greiner
|
| | | | | | ||||||||||||||||||
Geoffrey P. Clear
|
53,440 | $ | 119,172 | | 80,160 | | ||||||||||||||||||
Gregory F. White
|
46,601 | $ | 20,971 | 42,393 | 210,586 | |||||||||||||||||||
Joseph W. Dyer
|
| | 75,000 | 345,000 |
72
Amended and Restated 1994 Stock Plan |
Amended and Restated 2001 Special Stock Option Plan |
Amended and Restated 2004 Stock Option and Incentive Plan |
73
2005 Stock Option and Incentive Plan |
74
401(k) Plan |
Employment and Severance Arrangements |
75
| any breach of the directors duty of loyalty to us or our stockholders; | |
| any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; | |
| any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or | |
| any transaction from which the director derived an improper personal benefit. |
76
| we will indemnify our directors, officers and, in the discretion of our board of directors, certain employees to the fullest extent permitted by the Delaware General Corporation Law; and | |
| we will advance expenses, including attorneys fees, to our directors and, in the discretion of our board of directors, to our officers and certain employees, in connection with legal proceedings, subject to limited exceptions. |
77
Total Common | Aggregate | |||||||||||
Purchaser (1) | Stock Equivalents | Consideration Paid | Investment Participation | |||||||||
Stockholders Associated with Directors
|
||||||||||||
Trident
Capital
(2)
|
2,194,680 | $ | 10,604,858 | Series E and F | ||||||||
Acer Technology
Ventures
(3)
|
2,603,699 | 7,209,635 | Series A, C, D, E and F | |||||||||
First Albany
Entities
(4)
|
1,418,165 | 4,241,126 | Series B, C, D, E and F | |||||||||
Fenway
Partners
(5)
|
1,339,920 | 5,464,717 | Series D, E and F |
(1) | See Principal and Selling Stockholders for more detail on shares held by these purchasers. |
(2) | Trident Capital includes Trident Capital Fund-V, L.P., Trident Capital Fund-V Affiliates Fund, L.P., Trident Capital Fund-V Affiliates Fund (Q), L.P., Trident Capital Fund-V Principals Fund, L.P. and Trident Capital Parallel Fund-V, C.V. Consideration paid to us by Trident Capital for our convertible preferred stock in 2003 and 2004 was $9,500,002 and $1,104,855, respectively. Mr. Meekin, who is one of our directors, is a Managing Director of Trident Capital Management-V, L.L.C., the sole general partner of Trident Capital Fund-V, L.P., Trident Capital Fund-V Affiliates Fund, L.P., Trident Capital Fund-V Affiliates Fund (Q), L.P., and Trident Capital Fund-V Principals Fund, L.P. and the sole investment general partner of Trident Capital Parallel Fund-V, C.V. |
(3) | Acer Technology Ventures includes Acer Technology Venture Fund L.P., IP Fund One, L.P. and iD6 Fund, L.P. Consideration paid to us by Acer Technology Ventures for our convertible preferred stock in 1998, 2000, 2001, 2003 and 2004 was $1,550,189, $1,500,001, $1,107,390, $1,900,003 and $1,152,051, respectively. Dr. Chwang, who is one of our directors, is a General Partner of the management company for each of Acer Technology Venture Fund L.P., IP Fund One, L.P. and iD6 Fund, L.P. |
78
(4) | First Albany Entities includes First Albany Companies Inc., First Albany Private Fund 1999, LLC, First Albany Private Fund 2003, LLC, FA Technology Ventures, L.P., and First Albany Private Fund 2004, LLC. Consideration paid to us by First Albany Entities for our convertible preferred stock in 1999, 2000, 2001, 2003 and 2004 was $1,000,006, $1,574,999, $568,861, $300,001 and $797,258, respectively. Mr. McNamee, who is our one our directors, is the Chairman of First Albany Companies Inc. |
(5) | Fenway Partners includes FPIP Trust, LLC, FPIP, LLC and Fenway Partners Capital Fund II, L.P. Mr. Geisser, who is one of our directors, is a Managing Director of Fenway Partners, Inc., the Managing Member of FPIP Trust, LLC and FPIP, LLC. Consideration paid to us by Fenway Partners for our convertible preferred stock in 2001, 2003 and 2004 was $4,000,000, $871,844 and $592,872, respectively. Mr. Geisser is also a Managing Director of Fenway Partners II, LLC, the sole General Partner of Fenway Partners Capital Fund II, L.P. |
79
| each person known to us to be the beneficial owner of more than 5% of our common stock; | |
| each named executive officer; | |
| each of our directors; | |
| all of our executive officers and directors as a group; and | |
| each selling stockholder. |
Shares Beneficially | Shares Beneficially | ||||||||||||||||||||
Owned Prior | Owned After the | ||||||||||||||||||||
to the Offering | Shares | Offering | |||||||||||||||||||
Offered | |||||||||||||||||||||
Beneficial Owner | Number | Percent | (29) | Number | Percent | ||||||||||||||||
5% Stockholders:
|
|||||||||||||||||||||
Acer Technology
Ventures
(1)
|
2,603,699 | 13.1% | |||||||||||||||||||
5201 Great America Parkway
Suite 270 Santa Clara, CA 95054 |
|||||||||||||||||||||
Trident
Capital
(2)
|
2,194,680 | 11.0% | |||||||||||||||||||
325 Riverside Avenue
Westport, CT 06880 |
|||||||||||||||||||||
Grinnell
More
(3)
|
1,455,954 | 7.3% | |||||||||||||||||||
First Albany
Entities
(4)
|
1,418,165 | 7.1% | |||||||||||||||||||
677 Broadway
Albany, NY 12207 |
|||||||||||||||||||||
Fenway
Partners
(5)
|
1,339,920 | 6.7% | |||||||||||||||||||
152 West 57th Street
59th Floor New York, NY 10019 |
|||||||||||||||||||||
Directors and Named Executive Officers:
|
|||||||||||||||||||||
Helen Greiner
|
1,699,619 | 8.5% | |||||||||||||||||||
Colin
Angle
(6)
|
2,252,424 | 11.1% | |||||||||||||||||||
Rodney
Brooks, Ph.D.
(7)
|
2,389,695 | 12.0% | |||||||||||||||||||
Geoffrey P.
Clear
(8)
|
132,285 | * | |||||||||||||||||||
Joseph W.
Dyer
(9)
|
89,892 | * |
80
Shares Beneficially | Shares Beneficially | |||||||||||||||||||
Owned Prior | Owned After the | |||||||||||||||||||
to the Offering | Shares | Offering | ||||||||||||||||||
Offered | ||||||||||||||||||||
Beneficial Owner | Number | Percent | (29) | Number | Percent | |||||||||||||||
Gregory F.
White
(10)
|
457,412 | 2.3% | ||||||||||||||||||
Ronald
Chwang
(1)
|
2,603,699 | 13.1% | ||||||||||||||||||
Jacques S.
Gansler
(11)
|
16,667 | * | ||||||||||||||||||
Andrea
Geisser
(5)
|
1,339,920 | 6.7% | ||||||||||||||||||
George
McNamee
(12)
|
180,901 | * | ||||||||||||||||||
Peter
Meekin
(2)
|
2,194,680 | 11.0% | ||||||||||||||||||
Executive officers and directors as a group
(13 persons)
(13)
|
13,421,596 | 65.8% | ||||||||||||||||||
Other Selling Stockholders:
|
||||||||||||||||||||
M. David Adler and Bella G. Adler (JTWROS)
|
415,000 | 2.1% | ||||||||||||||||||
David S. Barrett and Ann H. Barrett (JTWROS)
|
75,000 | * | ||||||||||||||||||
James R.
Allard
(14)
|
55,700 | * | ||||||||||||||||||
Michael R.
Bassett
(15)
|
23,500 | * | ||||||||||||||||||
Boeckh Capital Co. Ltd.
|
63,334 | * | ||||||||||||||||||
Robert Campbell
|
16,876 | * | ||||||||||||||||||
Chris Casey and Giovanna Casey (JTWROS)
|
31,000 | * | ||||||||||||||||||
Mark
Chiappetta
(16)
|
25,800 | * | ||||||||||||||||||
Dale W.
Church
(17)
|
66,820 | * | ||||||||||||||||||
Mike
Ciholas
(18)
|
25,000 | * | ||||||||||||||||||
Michael F. Cronin
|
16,746 | * | ||||||||||||||||||
FBF, LLLP
|
68,344 | * | ||||||||||||||||||
Walter
Fiederowicz
(19)
|
1,464,644 | 7.4% | ||||||||||||||||||
Alan
Goldberg
(20)
|
1,503,342 | 7.6% | ||||||||||||||||||
Hugh Johnson
|
33,862 | * | ||||||||||||||||||
Joseph L. Jones and Sue E. Stewart
(JTWROS)
(21)
|
96,085 | * | ||||||||||||||||||
Dan Kilmurray
|
30,469 | * | ||||||||||||||||||
Jonathan Tarter Klein and Ellen Elisabeth (JTWROS)
|
40,000 | * | ||||||||||||||||||
Lindalee A. Lawrence
|
3,844 | * | ||||||||||||||||||
Michael Lindburg
|
33,748 | * | ||||||||||||||||||
Kenneth Mabbs
|
26,827 | * | ||||||||||||||||||
David P. Miller
|
114,505 | * | ||||||||||||||||||
Scott Nielsen Miller and Lisa Anne Cosimi
(JTWROS)
(22)
|
76,000 | * | ||||||||||||||||||
Ullas J. Naik
|
14,266 | * | ||||||||||||||||||
Timothy R.
Ohm
(23)
|
39,540 | * | ||||||||||||||||||
Painter Hill Venture Fund I, L.P.
|
64,405 | * | ||||||||||||||||||
Matthew R. Palma and Kelly S. Palma
(JTWROS)
(24)
|
25,000 | * | ||||||||||||||||||
Erik Pedersen
|
198,435 | 1.0% | ||||||||||||||||||
Polly K.
Pook
(25)
|
66,500 | * | ||||||||||||||||||
Rosario and William Robert (JTWROS)
|
105,000 | * | ||||||||||||||||||
Pavlo
Rudakevych
(26)
|
152,500 | * | ||||||||||||||||||
Beno Sternlicht
|
28,616 | * | ||||||||||||||||||
Paul J.
Tavalone
(27)
|
47,000 | * |
81
Shares Beneficially | Shares Beneficially | |||||||||||||||||||
Owned Prior | Owned After the | |||||||||||||||||||
to the Offering | Shares | Offering | ||||||||||||||||||
Offered | ||||||||||||||||||||
Beneficial Owner | Number | Percent | (29) | Number | Percent | |||||||||||||||
Glen
Weinstein
(28)
|
64,402 | * | ||||||||||||||||||
Steve Weston
|
200,000 | 1.0% | ||||||||||||||||||
Stephen P. Wink
|
7,864 | * | ||||||||||||||||||
Chikyung Won and Laetitia G. Won (JTWROS)
|
65,000 | * |
(1) | Consists of 1,737,279 shares held by Acer Technology Venture Fund L.P., 818,420 shares held by IP Fund One, L.P. and 48,000 shares held by iD6 Fund, L.P. Dr. Chwang is a General Partner of the management company for each of Acer Technology Venture Fund L.P., IP Fund One, L.P. and iD6 Fund, L.P., and may be deemed to share voting and investment power with respect to all shares held by those entities. Dr. Chwang disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. |
(2) | Consists of 1,966,075 shares held by Trident Capital Fund-V, L.P., 11,427 shares held by Trident Capital Fund-V Affiliates Fund, L.P., 10,904 shares held by Trident Capital Fund-V Affiliates Fund (Q), L.P., 56,905 shared held by Trident Capital Fund-V Principals Fund, L.P. and 149,369 shares held by Trident Capital Parallel Fund-V, C.V. Mr. Meekin is one of six Managing Directors of Trident Capital Management-V, L.L.C., the sole general partner of Trident Capital Fund-V, L.P., Trident Capital Fund-V Affiliates Fund, L.P., Trident Capital Fund-V Affiliates Fund (Q), L.P., and Trident Capital Fund-V Principals Fund, L.P. and the sole investment general partner of Trident Capital Parallel Fund-V, C.V., and may be deemed to share voting and investment power with respect to all shares held by those entities. Mr. Meekin disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. |
(3) | Includes 1,029,738 shares held by Real World Interface, Inc. Trust. Mr. More is a trustee of the Real World Interface, Inc. Trust and may be deemed to share voting and investment power with respect to such shares. Mr. More disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. |
(4) | Consists of 1,218,336 shares held by First Albany Companies Inc., 22,844 shares held by First Albany Private Fund 1999, LLC, 64,378 shares held by First Albany Private Fund 2003, LLC, 94,658 shares held by FA Technology Ventures, L.P. and 17,949 shares held by First Albany Private Fund 2004, LLC. Through a Special Committee of its Board of Directors, consisting of Alan Goldberg and Walter Fiederowicz, First Albany Companies Inc. exercises sole voting and investment power with respect to all shares held by First Albany Companies Inc., First Albany Private Fund 1999, LLC, First Albany Private Fund 2003, LLC and First Albany Private Fund 2004, LLC. |
(5) | Consists of 5,053 shares held by FPIP Trust, LLC, 3,665 shares held by FPIP, LLC and 1,331,202 shares held by Fenway Partners Capital Fund II, L.P. Mr. Geisser is a Managing Director of Fenway Partners, Inc., the Managing Member of FPIP Trust, LLC and FPIP, LLC. Mr. Geisser is also a Managing Director of Fenway Partners II, LLC, the sole General Partner of Fenway Partners Capital Fund II, L.P., and may be deemed to share voting and investment power with respect to all shares held by those entities. Mr. Geisser disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. |
(6) | Includes 347,710 shares issuable to Mr. Angle upon exercise of stock options. Also includes 200,000 shares held in a trust for the benefit of certain of his family members. |
(7) | Includes 252,000 shares held in a trust for the benefit of certain of his family members. Also includes 204,090 shares held by Robotic Ventures Fund I, L.P., of which Dr. Brooks is a General Partner. Dr. Brooks disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. |
(8) | Includes 26,720 shares issuable to Mr. Clear upon exercise of stock options. |
(9) | Includes 49,249 shares issuable to Mr. Dyer upon exercise of stock options. |
(10) | Includes 8,505 shares issuable to Mr. White upon exercise of stock options. |
(11) | Consists of shares issuable to Dr. Gansler upon exercise of stock options. |
(12) | Includes 94,658 shares held by FA Technology Ventures, L.P. and 3,495 shares held by FA Technology Managers, LLC. Mr. McNamee is a Partner of the General Partner of FA Technology Ventures, L.P. and may be deemed to share voting and investment power with respect to all shares held thereby. Mr. McNamee is a Manager of FA Technology Managers, LLC and may be deemed to share voting and investment power with respect to all shares held thereby. Mr. McNamee disclaims beneficial ownership of the shares held by FA Technology Ventures, L.P. and FA Technology Managers, LLC except to the extent of his pecuniary interest, if any. |
(13) | Includes an aggregate of 496,851 shares issuable upon exercise of stock options held by seven executive officers and directors. |
(14) | Includes 35,700 shares issuable to Mr. Allard upon exercise of stock options. |
(15) | Consists of 23,500 shares issuable to Mr. Bassett upon exercise of stock options. |
(16) | Includes 23,300 shares issuable to Mr. Chiappetta upon exercise of stock options. |
(17) | Consists of 66,820 shares issuable to Mr. Church upon exercise of stock options. |
(18) | Consists of 25,000 shares issuable to Mr. Ciholas upon exercise of stock options. |
(19) | Includes 1,218,336 shares held by First Albany Companies Inc., 22,844 shares held by First Albany Private Fund 1999, LLC, 64,378 shares held by First Albany Private Fund 2003, LLC, 94,658 shares held by FA Technology Ventures, L.P. and 17,949 shares held by First Albany Private Fund 2004, LLC. Through a Special Committee of its Board of Directors, consisting of Mr. Fiederowicz and Alan Goldberg, First Albany Companies Inc. exercises sole voting and investment power with respect to all shares held by First Albany Companies Inc., First Albany Private Fund 1999, LLC, First Albany Private Fund 2003, LLC and First |
82
Albany Private Fund 2004, LLC. Mr. Fiederowicz disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. | |
(20) | Includes 1,218,336 shares held by First Albany Companies Inc., 22,844 shares held by First Albany Private Fund 1999, LLC, 64,378 shares held by First Albany Private Fund 2003, LLC, 94,658 shares held by FA Technology Ventures, L.P. and 17,949 shares held by First Albany Private Fund 2004, LLC. Through a Special Committee of its Board of Directors, consisting of Mr. Goldberg and Walter Fiederowicz, First Albany Companies Inc. exercises sole voting and investment power with respect to all shares held by First Albany Companies Inc., First Albany Private Fund 1999, LLC, First Albany Private Fund 2003, LLC and First Albany Private Fund 2004, LLC. Mr. Goldberg disclaims beneficial ownership of such shares except to the extent of his pecuniary interest, if any. Also includes shares held by FCC as Custodian Alan Goldberg Keough M/P/P. |
(21) | Includes 1,900 shares issuable to Mr. Jones upon exercise of stock options. |
(22) | Includes 44,000 shares issuable to Mr. Miller upon exercise of stock options. |
(23) | Includes 14,540 shares issuable to Mr. Ohm upon exercise of stock options. |
(24) | Includes 15,000 shares issuable to Mr. Palma upon exercise of stock options. |
(25) | Includes 25,000 shares held by Polly K. Pook and Barbara S. Pook (JTWROS), over which Polly K. Pook and Barbara S. Pook share voting and investment power. |
(26) | Includes 2,500 shares issuable to Mr. Rudakevych upon exercise of stock options. |
(27) | Includes 12,000 shares issuable to Mr. Tavalone upon exercise of stock options. |
(28) | Includes 16,000 shares held by Glen Weinstein and Elisa DAndrea (JTWROS), over which Mr. Weinstein and Ms. DAndrea share voting and investment power, and 42,000 shares issuable to Mr. Weinstein upon exercise of stock options. |
(29) | If the underwriters overallotment option is exercised in full, the additional shares sold would be allocated among the selling stockholders as follows: |
Shares Subject to the | ||||
Overallotment | ||||
Selling Stockholders | Option | |||
If the underwriters overallotment option is exercised in part, the additional shares sold would be allocated pro rata based upon the share amounts set forth in the preceding table. |
83
84
85
| the close of business of the tenth calendar day following the first public announcement that a person or group of affiliated or associated persons, referred to as an acquiring person, has acquired beneficial ownership of 15% or more of the outstanding shares of common stocks; or |
86
| the close of business on the tenth business day (or such later calendar day as our board of directors may determine) following the commencement of a tender offer or exchange offer by any person or group (other than certain exempt persons) that could result upon its completion in such person or group becoming the beneficial owner of 15% or more of the outstanding shares of common stock. |
| before the stockholder became interested, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; | |
| upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or | |
| at or after the time the stockholder became interested, the business combination was approved by the board of directors of the corporation and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder. |
87
Shares Eligible | ||||||
Days After Date of this Prospectus | for Sale | Comment | ||||
Upon Effectiveness
|
Shares sold in the offering | |||||
Upon Effectiveness
|
Freely tradable shares saleable under Rule 144(k) that are not subject to the lock-up | |||||
90 Days
|
Shares saleable under Rules 144 and 701 that are not subject to a lock-up | |||||
180 Days
|
Lock-up released, subject to extension; shares saleable under Rules 144 and 701 | |||||
Thereafter
|
Restricted securities held for one year or less |
| offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock; or | |
| enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock, |
88
| 1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering; or | |
| the average weekly trading volume in our common stock on the NASDAQ National Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. |
89
Name | Number of Shares | |||
Morgan Stanley & Co. Incorporated
|
||||
J.P. Morgan Securities Inc.
|
||||
First Albany Capital Inc.
|
||||
Needham & Company, LLC
|
||||
Adams Harkness, Inc.
|
||||
Total
|
||||
90
| offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock; or | |
| enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock, |
| the sale of shares to the underwriters; | |
| the issuance by us of shares of our common stock upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing; | |
| transactions by anyone other than us relating to shares of common stock or other securities acquired in open market transactions after the completion of the offering of the shares; | |
| the grant of options to purchase common stock or shares of our common stock to our officers, directors, advisors or consultants pursuant to equity plans disclosed in this prospectus; | |
| the issuance by us of up to 2,000,000 shares of common stock, in connection with any acquisition, collaboration or other similar strategic transaction; | |
| transfers of shares or any security convertible into our common stock as a bona fide gift; or | |
| distributions by a selling stockholder of shares or any security convertible into our common stock to limited partners or stockholders of the selling stockholder, |
| during the last 17 days of the 180-day period, we issue an earnings release or material news or a material event relating to us occurs; or | |
| prior to the expiration of the 180-day period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, |
91
Paid by Selling | ||||||||||||||||||||||||
Paid by Us | Stockholders | Total | ||||||||||||||||||||||
No Exercise | Full Exercise | No Exercise | Full Exercise | No Exercise | Full Exercise | |||||||||||||||||||
Per share
|
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Total
|
$ | $ | $ | $ | $ | $ |
92
93
94
Page | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 |
F-1
F-2
F-3
Fiscal Year Ended | Six Months Ended | |||||||||||||||||||||
December 31, | December 31, | December 31, | June 30, | July 2, | ||||||||||||||||||
2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||
Product revenue
|
$ | 6,955,215 | $ | 45,896,313 | $ | 82,147,080 | $ | 23,087,249 | $ | 34,723,592 | ||||||||||||
Contract revenue
|
7,222,589 | 7,661,244 | 12,365,114 | 5,038,983 | 8,232,950 | |||||||||||||||||
Royalty revenue
|
638,704 | 758,595 | 530,955 | 483,316 | 62,037 | |||||||||||||||||
Total revenue
|
14,816,508 | 54,316,152 | 95,043,149 | 28,609,548 | 43,018,579 | |||||||||||||||||
Cost of revenue:
|
||||||||||||||||||||||
Cost of product revenue
|
4,896,025 | 31,193,513 | 59,321,238 | 16,471,000 | 26,750,347 | |||||||||||||||||
Cost of contract revenue
|
11,860,610 | 6,143,347 | 8,370,487 | 3,345,591 | 5,770,138 | |||||||||||||||||
Total cost of revenue
|
16,756,635 | 37,336,860 | 67,691,725 | 19,816,591 | 32,520,485 | |||||||||||||||||
Gross profit (loss)
|
(1,940,127 | ) | 16,979,292 | 27,351,424 | 8,792,957 | 10,498,094 | ||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||
Research and development
|
1,735,831 | 3,848,010 | 5,504,321 | 2,563,083 | 5,712,525 | |||||||||||||||||
Selling, general and administrative
|
7,128,105 | 20,521,298 | 21,404,106 | 9,188,128 | 12,061,316 | |||||||||||||||||
Stock-based
compensation
(1)
|
| | | | 90,489 | |||||||||||||||||
Total operating expenses
|
8,863,936 | 24,369,308 | 26,908,427 | 11,751,211 | 17,864,330 | |||||||||||||||||
Operating income (loss)
|
(10,804,063 | ) | (7,390,016 | ) | 442,997 | (2,958,254 | ) | (7,366,236 | ) | |||||||||||||
Other (expense) income, net
|
44,764 | 15,282 | (79,762 | ) | (41,069 | ) | 211,000 | |||||||||||||||
Income (loss) before income taxes
|
(10,759,299 | ) | (7,374,734 | ) | 363,235 | (2,999,323 | ) | (7,155,236 | ) | |||||||||||||
Income tax expense
|
14,695 | 36,227 | 144,175 | 1,306 | 2,250 | |||||||||||||||||
Net income (loss)
|
$ | (10,773,994 | ) | $ | (7,410,961 | ) | $ | 219,060 | $ | (3,000,629 | ) | $ | (7,157,486 | ) | ||||||||
Net income (loss) per share
|
||||||||||||||||||||||
Basic
|
$ | (2.00 | ) | $ | (0.79 | ) | $ | 0.01 | $ | (0.31 | ) | $ | (0.72 | ) | ||||||||
Diluted
|
$ | (2.00 | ) | $ | (0.79 | ) | $ | 0.01 | $ | (0.31 | ) | $ | (0.72 | ) | ||||||||
Number of shares used in per share calculations
|
||||||||||||||||||||||
Basic
|
5,390,679 | 9,351,880 | 9,659,993 | 9,530,022 | 10,007,932 | |||||||||||||||||
Diluted
|
5,390,679 | 9,351,880 | 19,182,595 | 9,530,022 | 10,007,932 |
(1) | Stock-based compensation recorded in 2005 breaks down by expense classification as follows: |
Six Months Ended | |||||
July 2, 2005 | |||||
(unaudited) | |||||
Cost of product revenue
|
$ | 8,835 | |||
Cost of contract revenue
|
10,998 | ||||
Research and development
|
31,832 | ||||
Selling, general and
administrative
|
38,824 | ||||
Total stock-based
compensation
|
$ | 90,489 | |||
F-4
Note | ||||||||||||||||||||||||||||
Common Stock | Additional | Receivable | ||||||||||||||||||||||||||
Paid-In | from | Deferred | Accumulated | |||||||||||||||||||||||||
Shares | Value | Capital | Stockholder | Compensation | Deficit | Total | ||||||||||||||||||||||
Balance at December 31, 2002
|
9,291,760 | $ | 92,918 | $ | 1,661,896 | $ | (43,000 | ) | $ | | $ | (19,694,351 | ) | $ | (17,982,537 | ) | ||||||||||||
Issuance of common stock warrants related to debt financing
|
22,312 | 22,312 | ||||||||||||||||||||||||||
Issuance of common stock for exercise of stock options
|
68,990 | 690 | 11,758 | 12,448 | ||||||||||||||||||||||||
Net loss
|
(7,410,961 | ) | (7,410,961 | ) | ||||||||||||||||||||||||
Balance at December 31, 2003
|
9,360,750 | 93,608 | 1,695,966 | (43,000 | ) | | (27,105,312 | ) | (25,358,738 | ) | ||||||||||||||||||
Issuance of restricted stock
|
397,584 | 3,976 | 967,217 | (669,912 | ) | 301,281 | ||||||||||||||||||||||
Amortization of deferred compensation relating to restricted
stock
|
283,325 | 283,325 | ||||||||||||||||||||||||||
Issuance of common stock for exercise of stock options
|
371,123 | 3,710 | 262,313 | 266,023 | ||||||||||||||||||||||||
Net income
|
219,060 | 219,060 | ||||||||||||||||||||||||||
Balance at December 31, 2004
|
10,129,457 | 101,294 | 2,925,496 | (43,000 | ) | (386,587 | ) | (26,886,252 | ) | (24,289,049 | ) | |||||||||||||||||
Amortization of deferred compensation relating to restricted
stock
|
100,340 | 100,340 | ||||||||||||||||||||||||||
Issuance of Common Stock for exercise of stock options
|
208,117 | 2,081 | 367,860 | 369,941 | ||||||||||||||||||||||||
Repayment of note receivable from stockholder
|
43,000 | 43,000 | ||||||||||||||||||||||||||
Deferred compensation relating to issuance of stock options
|
1,284,473 | (1,284,473 | ) | | ||||||||||||||||||||||||
Amortization of deferred compensation relating to stock options
|
90,489 | 90,489 | ||||||||||||||||||||||||||
Net loss
|
(7,157,486 | ) | (7,157,486 | ) | ||||||||||||||||||||||||
Balance at July 2, 2005 (unaudited)
|
10,337,574 | $ | 103,375 | $ | 4,577,829 | $ | | $ | (1,480,231 | ) | $ | (34,043,738 | ) | $ | (30,842,765 | ) | ||||||||||||
F-5
Fiscal Year Ended | Six Months Ended | |||||||||||||||||||||
December 31, | December 31, | December 31, | June 30, | July 2, | ||||||||||||||||||
2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||||
Net income (loss)
|
$ | (10,773,994 | ) | $ | (7,410,961 | ) | $ | 219,060 | $ | (3,000,629 | ) | $ | (7,157,486 | ) | ||||||||
Adjustments to reconcile net loss to net cash used in operating
activities
|
||||||||||||||||||||||
Depreciation and amortization
|
511,335 | 735,170 | 1,313,705 | 389,188 | 886,864 | |||||||||||||||||
Loss on disposal of fixed assets
|
| 29,384 | 1,265 | | | |||||||||||||||||
Interest expense relating to issuance of warrants
|
| 22,312 | | | | |||||||||||||||||
Amortization of deferred compensation
|
| | 283,325 | 177,328 | 190,829 | |||||||||||||||||
Changes in working capital(use) source
|
||||||||||||||||||||||
Accounts receivable and related party trade receivables
|
237,164 | (7,481,472 | ) | (6,298,751 | ) | 4,663,824 | 7,091,598 | |||||||||||||||
Unbilled revenue
|
(325,371 | ) | (526,573 | ) | 368,759 | 832,041 | (155,919 | ) | ||||||||||||||
Inventory
|
(1,829,773 | ) | (8,795,412 | ) | 3,750,677 | 8,277,867 | (4,730,540 | ) | ||||||||||||||
Other current assets
|
(434,970 | ) | (146,481 | ) | 420,061 | 574,990 | (79,370 | ) | ||||||||||||||
Accounts payable
|
3,869,832 | 1,908,212 | 12,799,653 | (1,074,734 | ) | 30,752 | ||||||||||||||||
Accrued expenses
|
219,778 | 2,582,888 | 1,017,271 | (836,895 | ) | 209,441 | ||||||||||||||||
Accrued compensation
|
679,609 | 295,001 | 1,118,462 | 138,127 | (387,102 | ) | ||||||||||||||||
Provision for contract settlement
|
2,361,055 | 1,377,835 | (142,821 | ) | (87,502 | ) | 48,326 | |||||||||||||||
Deferred revenue
|
1,787,035 | 5,952,843 | (5,913,405 | ) | (6,517,187 | ) | 740,214 | |||||||||||||||
Change in long-term liabilities
|
| 133,200 | (66,600 | ) | (66,600 | ) | (66,600 | ) | ||||||||||||||
Net cash provided by (used in) operating activities
|
(3,698,300 | ) | (11,324,054 | ) | 8,870,661 | 3,469,818 | (3,378,993 | ) | ||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||||||||
Purchase of property and equipment
|
(448,412 | ) | (1,329,913 | ) | (3,222,446 | ) | (758,315 | ) | (1,384,561 | ) | ||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||||
Principal payments on capital lease obligations
|
(51,009 | ) | (14,102 | ) | | | | |||||||||||||||
Borrowings under revolving line of credit, net
|
| 1,338,980 | (1,338,980 | ) | (1,338,980 | ) | | |||||||||||||||
Repayment of note receivable from stockholder
|
| | | | 43,000 | |||||||||||||||||
Proceeds from stock option exercises
|
32,894 | 12,448 | 266,024 | 225,724 | 369,941 | |||||||||||||||||
Proceeds from issuance of restricted stock
|
| | 301,281 | 301,281 | | |||||||||||||||||
Net proceeds from sale of preferred stock
|
| 12,922,735 | 9,944,366 | (270 | ) | | ||||||||||||||||
Net cash provided by financing activities
|
(18,115 | ) | 14,260,061 | 9,172,691 | (812,245 | ) | 412,941 | |||||||||||||||
Net increase in cash and cash equivalents
|
(4,164,827 | ) | 1,606,094 | 14,820,906 | 1,899,258 | (4,350,613 | ) | |||||||||||||||
Cash and cash equivalents, at beginning of period
|
7,178,670 | 3,013,843 | 4,619,937 | 4,619,937 | 19,440,843 | |||||||||||||||||
Cash and cash equivalents, at end of period
|
$ | 3,013,843 | $ | 4,619,937 | $ | 19,440,843 | $ | 6,519,195 | $ | 15,090,230 | ||||||||||||
Supplemental disclosure of cash flow information
|
||||||||||||||||||||||
Cash paid for interest
|
$ | 8,621 | $ | 28,572 | $ | 142,367 | $ | 67,955 | $ | 5,665 | ||||||||||||
Cash paid for income taxes
|
14,756 | 14,206 | 123,941 | | 6,800 | |||||||||||||||||
Supplemental disclosure of noncash investing and financing
activities
|
||||||||||||||||||||||
During 2004, 2003 and 2002, the Company transferred $186,011, $16,960 and $115,595, respectively, of inventory to fixed assets. | ||||||||||||||||||||||
During the first six months of 2005 and 2004, the Company transferred $140,489 and $1,815, respectively, of inventory to fixed assets. |
F-6
1. | Nature of the Business |
Liquidity and Operations |
2. | Summary of Significant Accounting Policies |
Unaudited Interim Financial Statements |
Unaudited Pro Forma Presentation |
F-7
Fiscal Year-End |
Cash and Cash Equivalents |
Revenue Recognition |
F-8
Allowance for Doubtful Accounts |
Balance at December 31, 2001
|
$ | | |||
Provision
|
30,000 | ||||
Deduction
|
|||||
Balance at December 31, 2002
|
30,000 | ||||
Provision
|
237,329 | ||||
Deduction
|
(19,408 | ) | |||
Balance at December 31, 2003
|
247,921 | ||||
Provision
|
(64,835 | ) | |||
Deduction
|
(133,086 | ) | |||
Balance at December 31, 2004
|
$ | 50,000 | |||
Provision
|
| ||||
Deduction
|
| ||||
Balance at July 2, 2005
|
$ | 50,000 | |||
F-9
Inventory |
Balance at December 31, 2001
|
$ | 385,900 | |||
Provision
|
174,686 | ||||
Deduction
|
(224,810 | ) | |||
Balance at December 31, 2002
|
335,776 | ||||
Provision
|
2,214,656 | ||||
Deduction
|
(181,878 | ) | |||
Balance at December 31, 2003
|
2,368,554 | ||||
Provision
|
| ||||
Deduction
|
(465,637 | ) | |||
Balance at December 31, 2004
|
$ | 1,902,917 | |||
Provision
|
| ||||
Deduction
|
(90,549 | ) | |||
Balance at July 2, 2005
|
$ | 1,812,368 | |||
Property and Equipment |
Estimated | ||
Useful Life | ||
Computer and research equipment
|
3 years | |
Furniture
|
5 | |
Machinery
|
2-5 | |
Business applications software
|
5 | |
Capital leases and leasehold improvements
|
Term of lease |
Impairment of Long-Lived Assets |
F-10
Research and Development |
Internal Use Software |
Use of Estimates |
Reclassification |
Concentration of Credit Risk and Significant Customers |
F-11
Investment in Affiliates |
Stock-Based Compensation |
Fiscal Year Ended | Six Months Ended | ||||||||||||||||||||
December 31, | December 31, | December 31, | June 30, | July 2, | |||||||||||||||||
2002 | 2003 | 2004 | 2004 | 2005 | |||||||||||||||||
(unaudited) | |||||||||||||||||||||
Net income (loss)
|
|||||||||||||||||||||
As reported
|
$ | (10,773,994 | ) | $ | (7,410,961 | ) | $ | 219,060 | $ | (3,000,629 | ) | $ | (7,157,486 | ) | |||||||
Add back: Stock-based employee compensation expense reported in
net income (loss)
|
| | 283,325 | 177,328 | 190,829 | ||||||||||||||||
Less: Stock-based employee compensation expense determined under
fair-value method for all awards
|
(28,917 | ) | (52,863 | ) | (394,102 | ) | (222,411 | ) | (361,895 | ) | |||||||||||
Pro forma income (loss)
|
$ | (10,802,911 | ) | $ | (7,463,824 | ) | $ | 108,283 | $ | (3,045,712 | ) | $ | (7,328,552 | ) | |||||||
Net income (loss) per share, as reported
|
|||||||||||||||||||||
Basic
|
$(2.00 | ) | $(0.79 | ) | $0.01 | $(0.31 | ) | $(0.72 | ) | ||||||||||||
Diluted
|
$(2.00 | ) | $(0.79 | ) | $0.01 | $(0.31 | ) | $(0.72 | ) | ||||||||||||
Pro forma net income (loss) per share
|
|||||||||||||||||||||
Basic
|
$(2.00 | ) | $(0.80 | ) | $0.01 | $(0.32 | ) | $(0.73 | ) | ||||||||||||
Diluted
|
$(2.00 | ) | $(0.80 | ) | $0.01 | $(0.32 | ) | $(0.73 | ) | ||||||||||||
Number of shares used in per share calculations
|
|||||||||||||||||||||
Basic
|
5,390,679 | 9,351,880 | 9,659,993 | 9,530,022 | 10,007,932 | ||||||||||||||||
Diluted
|
5,390,679 | 9,351,880 | 19,182,595 | 9,530,022 | 10,007,932 |
F-12
2002 | 2003 | 2004 | ||||||||||
Risk-free interest rate
|
2.8% | 3.0% | 3.4% | |||||||||
Expected dividend yield
|
| | | |||||||||
Expected life
|
5 years | 5 years | 5 years | |||||||||
Expected volatility
|
| | |
Earnings Per Share |
Advertising Expense |
Income Taxes |
Lease Termination Costs |
Comprehensive Income (Loss) |
Recent Accounting Pronouncements |
F-13
3. | Inventory |
December 31, | ||||||||||||
July 2, | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
(unaudited) | ||||||||||||
Raw materials
|
$ | 1,510,995 | $ | 427,181 | $ | 707,465 | ||||||
Work in process
|
145,919 | | | |||||||||
Finished goods
|
9,762,697 | 7,241,753 | 11,692,009 | |||||||||
$ | 11,419,611 | $ | 7,668,934 | $ | 12,399,474 | |||||||
4. | Property and Equipment |
December 31, | ||||||||||||
2003 | 2004 | July 2, 2005 | ||||||||||
(unaudited) | ||||||||||||
Computer and equipment
|
$ | 1,682,876 | $ | 2,826,932 | $ | 3,997,600 | ||||||
Furniture
|
59,954 | 160,942 | 164,298 | |||||||||
Machinery
|
935,820 | 2,544,330 | 2,593,176 | |||||||||
Leasehold improvements
|
194,700 | 272,107 | 350,045 | |||||||||
Software purchased for internal use
|
630,323 | 919,636 | 1,003,390 | |||||||||
Leased equipment
|
144,682 | 144,682 | 144,682 | |||||||||
3,648,355 | 6,868,629 | 8,253,191 | ||||||||||
Less: accumulated depreciation and amortization
|
2,043,322 | 3,356,119 | 4,242,984 | |||||||||
$ | 1,605,033 | $ | 3,512,510 | $ | 4,010,207 | |||||||
F-14
5. | Accrued Expenses |
December 31, | ||||||||||||
2003 | 2004 | July 2, 2005 | ||||||||||
(unaudited) | ||||||||||||
Accrued warranty
|
$ | 1,522,228 | $ | 1,398,382 | $ | 2,028,425 | ||||||
Accrued lease termination costs
|
326,324 | 37,879 | | |||||||||
Accrued rent
|
389,687 | 339,172 | 318,058 | |||||||||
Accrued sales commissions
|
200,375 | 554,919 | 312,165 | |||||||||
Accrued accounting fees
|
171,000 | 161,000 | 95,563 | |||||||||
Accrued co-op advertising allowance
|
64,931 | 1,176,791 | 1,142,811 | |||||||||
Accrued other
|
128,121 | 151,794 | 132,356 | |||||||||
$ | 2,802,666 | $ | 3,819,937 | $ | 4,029,378 | |||||||
6. | Revolving Line of Credit |
7. | Common Stock |
F-15
8. | Redeemable Convertible Preferred Stock |
December 31, | ||||||||
2003 | 2004 | |||||||
Series F; 1,412,430 shares authorized, issued and
outstanding at December 31, 2004, net of issuance costs
(liquidation preference $10,000,004)
|
$ | | $ | 9,944,637 | ||||
Series E; 2,799,353 shares authorized, issued and
outstanding at December 31, 2004 and 3,002,069 shares
authorized, 2,799,353 issued and outstanding at
December 31, 2003, net of issuance costs (liquidation
preference $13,044,985)
|
12,922,735 | 12,922,465 | ||||||
Series D; 1,870,908 and 2,500,000 shares authorized,
1,870,908 issued and outstanding at December 31, 2004 and
2003, net of issuance costs (liquidation preference $7,000,002)
|
6,766,550 | 6,766,550 | ||||||
Series C; 1,470,000 shares authorized, issued and
outstanding at December 31, 2004 and 2003, net of issuance
costs (liquidation preference $5,500,005)
|
5,478,244 | 5,478,244 | ||||||
Series B; 668,185 shares authorized, issued and
outstanding at December 31, 2004 and 2003, net of issuance
costs (liquidation preference $1,000,006)
|
966,761 | 966,761 | ||||||
Series A; 1,336,370 shares authorized, issued and
outstanding at December 31, 2004 and 2003, net of issuance
costs (liquidation preference $1,550,189)
|
1,427,579 | 1,427,579 | ||||||
$ | 27,561,869 | $ | 37,506,236 | |||||
Conversion Rights |
Redemption Rights |
Dividend Rights |
F-16
Voting Rights |
Liquidation Rights |
Change in Control |
9. | Note Receivable from Stockholder |
F-17
10. | Stock Option Plan |
F-18
Number of | Weighted Average | |||||||
Shares | Exercise Price | |||||||
Outstanding at December 31, 2002
|
1,579,708 | $ | 0.584 | |||||
Granted
|
494,455 | 2.294 | ||||||
Exercised
|
(68,990 | ) | 0.171 | |||||
Canceled
|
(21,715 | ) | 1.034 | |||||
Outstanding at December 31, 2003
|
1,983,458 | 1.019 | ||||||
Granted
|
1,544,959 | 2.170 | ||||||
Exercised
|
(768,707 | ) | 0.737 | |||||
Canceled
|
(154,710 | ) | 1.790 | |||||
Outstanding at December 31, 2004
|
2,605,000 | 1.770 | ||||||
Weighted average fair value of options granted during 2004
|
$ | 0.416 | ||||||
Options available for future grant at December 31, 2004
|
290,973 |
Options | ||||||||||||||||||||
Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
Average | Weighted | Weighted | ||||||||||||||||||
Remaining | Average | Average | ||||||||||||||||||
Number | Contractual | Exercise | Number | Exercise | ||||||||||||||||
Exercise Price | Outstanding | Life | Price | Exercisable | Price | |||||||||||||||
$0.0002
|
378,710 | 2.52 | years | $ | 0.0002 | 378,710 | $ | 0.0002 | ||||||||||||
0.24
|
191,380 | 4.25 | 0.24 | 191,380 | 0.24 | |||||||||||||||
0.50
|
7,940 | 4.93 | 0.50 | 7,940 | 0.50 | |||||||||||||||
0.55
|
247,038 | 7.97 | 0.55 | 58,018 | 0.55 | |||||||||||||||
1.87
|
219,028 | 5.96 | 1.87 | 166,278 | 1.87 | |||||||||||||||
2.33
|
901,654 | 8.96 | 2.33 | 201,333 | 2.33 | |||||||||||||||
2.78
|
614,675 | 9.55 | 2.78 | 2,050 | 2.78 | |||||||||||||||
4.60
|
44,575 | 9.92 | 4.60 | | | |||||||||||||||
$0.0002-$4.60
|
2,605,000 | 7.48 | $ | 1.770 | 1,005,709 | $ | 0.863 | |||||||||||||
F-19
Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Deferred Stock | ||||||||||||||||||||||
# of Shares | Exercise | Reassessed | Intrinsic | Based | ||||||||||||||||||||
Grant Dates | Period | Granted | Price | Fair Value | Value | Compensation | ||||||||||||||||||
7/1/04-9/30/04
|
Q3-04 | 306,675 | $ | 2.7800 | 0 | $ | 2.78000 | $ | 0.00000 | $ | 0 | |||||||||||||
10/1/04-12/31/04
|
Q4-04 | 125,325 | $ | 3.4273 | 3 | $ | 3.42733 | $ | 0.00000 | $ | 0 | |||||||||||||
1/1/05-3/31/05
|
Q1-05 | 555,625 | $ | 4.8810 | 5 | $ | 6.98110 | $ | 2.10005 | $ | 1,166,842 | |||||||||||||
4/1/05-7/2/05
|
Q2-05 | 22,150 | $ | 4.9600 | 0 | $ | 10.05749 | $ | 5.09749 | $ | 112,909 | |||||||||||||
1,009,775 | $ | 1,279,751 | ||||||||||||||||||||||
11. | Warrants |
F-20
12. | Income Taxes |
2002 | 2003 | 2004 | |||||||||||
Current
|
|||||||||||||
Federal
|
$ | | $ | 33,285 | $ | 89,794 | |||||||
State
|
14,695 | 2,942 | 54,381 | ||||||||||
$ | 14,695 | $ | 36,227 | $ | 144,175 | ||||||||
2003 | 2004 | |||||||||
Deferred tax asset
|
||||||||||
Net operating loss carryforwards
|
$ | 4,997,578 | $ | 5,184,200 | ||||||
Tax credits
|
735,387 | 1,019,900 | ||||||||
Reserves and accruals
|
5,313,241 | 5,228,000 | ||||||||
Total deferred tax asset
|
11,046,206 | 11,432,100 | ||||||||
Valuation allowance
|
(11,046,206 | ) | (11,432,100 | ) | ||||||
Net deferred tax asset
|
$ | | $ | | ||||||
F-21
2002 | 2003 | 2004 | ||||||||||
Expected federal income tax
|
$ | (3,770,898 | ) | $ | (2,521,382 | ) | $ | 123,531 | ||||
Permanent items
|
5,914 | 21,874 | 45,112 | |||||||||
State taxes
|
(551,993 | ) | (411,920 | ) | (302,183 | ) | ||||||
Credits
|
75,011 | (165,387 | ) | (165,600 | ) | |||||||
Other
|
| | 57,488 | |||||||||
Increase in valuation allowance
|
4,256,661 | 3,113,042 | 385,827 | |||||||||
$ | 14,695 | $ | 36,227 | $ | 144,175 | |||||||
13. | Commitments and Contingencies |
Legal |
F-22
Lease Obligations |
Operating Leases | |||||
2005
|
$ | 929,180 | |||
2006
|
771,989 | ||||
2007
|
746,630 | ||||
2008
|
766,394 | ||||
2009
|
| ||||
Thereafter
|
| ||||
Total minimum lease payments
|
$ | 3,214,193 | |||
Guarantees and Indemnification Obligations |
Warranty |
Balance, December 31, 2002
|
$ | 8,063 | ||
Provisions
|
1,514,165 | |||
Warranty settlements
|
| |||
Balance, December 31, 2003
|
1,522,228 | |||
Provisions
|
1,277,811 | |||
Warranty settlements
|
(1,401,657 | ) | ||
Balance, December 31, 2004
|
1,398,382 | |||
Provisions
|
2,144,127 | |||
Warranty settlements
|
(1,514,084 | ) | ||
Balance, July 2, 2005 (unaudited)
|
$ | 2,028,425 | ||
F-23
Restricted Cash |
14. | Employee Benefits |
15. | Related Party Transactions |
16. | Business Segment Information |
Consumer |
Government and Industrial |
F-24
Other |
Fiscal Year Ended | Six Months Ended | |||||||||||||||||||||
December 31, | December 31, | December 31, | June 30, | |||||||||||||||||||
2002 | 2003 | 2004 | 2004 | July 2, 2005 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||
Consumer
|
$ | | $ | 43,073,149 | $ | 71,332,584 | $ | 19,400,585 | $ | 19,573,344 | ||||||||||||
Government & Industrial
|
| 11,243,003 | 23,231,496 | 8,777,533 | 23,383,198 | |||||||||||||||||
Other
|
14,816,508 | | 479,069 | 431,430 | 62,037 | |||||||||||||||||
Total revenue
|
14,816,508 | 54,316,152 | 95,043,149 | 28,609,548 | 43,018,579 | |||||||||||||||||
Cost of revenue:
|
||||||||||||||||||||||
Consumer
|
| 27,386,629 | 48,281,833 | 12,279,393 | 14,497,592 | |||||||||||||||||
Government & Industrial
|
| 9,950,231 | 19,307,902 | 7,537,198 | 18,034,011 | |||||||||||||||||
Other
|
16,756,635 | | 101,990 | | (11,118 | ) | ||||||||||||||||
Total cost of revenue
|
16,756,635 | 37,336,860 | 67,691,725 | 19,816,591 | 32,520,485 | |||||||||||||||||
Gross profit (loss):
|
||||||||||||||||||||||
Consumer
|
| 15,686,520 | 23,050,751 | 7,121,192 | 5,075,752 | |||||||||||||||||
Government & Industrial
|
| 1,292,772 | 3,923,594 | 1,240,335 | 5,349,187 | |||||||||||||||||
Other
|
(1,940,127 | ) | | 377,079 | 431,430 | 73,155 | ||||||||||||||||
Total gross profit
|
(1,940,127 | ) | 16,979,292 | 27,351,424 | 8,792,957 | 10,498,094 | ||||||||||||||||
Research and development
|
||||||||||||||||||||||
Other
|
1,735,831 | 3,848,010 | 5,504,321 | 2,563,083 | 5,712,525 | |||||||||||||||||
Selling, general and administrative
|
||||||||||||||||||||||
Other
|
7,128,105 | 20,521,298 | 21,404,106 | 9,188,128 | 12,061,316 | |||||||||||||||||
Stock-based compensation
|
||||||||||||||||||||||
Other
|
| | | | 90,489 | |||||||||||||||||
Other (expense) income, net
|
||||||||||||||||||||||
Other
|
44,764 | 15,282 | (79,762 | ) | (41,069 | ) | 211,000 | |||||||||||||||
Income (loss) before income taxes
|
||||||||||||||||||||||
Other
|
$ | (10,759,299 | ) | $ | (7,374,734 | ) | $ | 363,235 | $ | (2,999,323 | ) | $ | (7,155,236 | ) | ||||||||
17. | Subsequent Event |
F-25
II-1
II-2
II-3
II-4
Item 13.
Other Expenses of Issuance and Distribution.
$
13,536
12,000
100,000
*
*
*
*
*
*
$
*
*
To be filed by amendment.
Item 14.
Indemnification of Directors and Officers.
Table of Contents
Table of Contents
Item 15.
Recent Sales of Unregistered Securities.
(a)
Issuances of Capital Stock.
(b)
Grants and Exercises of Stock Options; Awards of
Restricted Stock.
(c)
Issuance of Warrant.
Item 16.
Exhibits.
Table of Contents
Item 17.
Undertakings.
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial
bona fide
offering thereof.
Table of Contents
II-5
II-6
iROBOT CORPORATION
By:
/s/ Colin M. Angle
Colin M. Angle
Chief Executive Officer and Director
Signature
Title(s)
/s/ Helen Greiner
Chairman of the Board
/s/ Colin M. Angle
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Geoffrey P. Clear
Senior Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
/s/ Gerald C. Kent, Jr.
Vice President and Controller
(Principal Accounting Officer)
*
Director
*
Director
*
Director
*
Director
Table of Contents
Signature
Title(s)
*
Director
*
Director
*By:
/s/ Gerald C. Kent, Jr.
Attorney-in-fact
Table of Contents
Number
Description
1
.1*
Form of Underwriting Agreement
3
.1**
Amended and Restated Certificate of Incorporation of the
Registrant
3
.2**
Form of Second Amended and Restated Certificate of Incorporation
of the Registrant (to be effective upon the completion of the
offering)
3
.3**
Amended and Restated By-laws of the Registrant
4
.1*
Specimen Stock Certificate for shares of the Registrants
Common Stock
4
.2*
Shareholder Rights Agreement between the Registrant and
Computershare Trust Company, Inc., as the Rights Agent
5
.1*
Opinion of Goodwin Procter LLP
10
.1**
Fifth Amended and Restated Registration Rights Agreement by and
among the Registrant, the Investors and the Stockholders named
therein, dated as of November 10, 2004
10
.2**
Form of Indemnification Agreement between the Registrant and its
Directors and Executive Officers
10
.3**
Registrants 2005 Incentive Compensation Plan
10
.4**
Amended and Restated 1994 Stock Plan and forms of agreements
thereunder
10
.5
Amended and Restated 2001 Special Stock Option Plan and form of
agreement thereunder
10
.6**
Amended and Restated 2004 Stock Option and Incentive Plan and
forms of agreements thereunder
10
.7**
Lease Agreement between the Registrant and Burlington Crossing
Office LLC for the premises located at 63 South Avenue,
Burlington, Massachusetts, dated as of October 29, 2002, as
amended
10
.8**
Warrant to Purchase Common Stock of the Registrant issued to
Silicon Valley Bank, dated as of January 30, 2003
10
.9**
Loan and Security Agreement between the Registrant and Fleet
National Bank, dated as of May 26, 2005
10
.10
Employment Agreement between the Registrant and Colin Angle,
dated as of January 1, 1997
10
.11
Employment Agreement between the Registrant and Helen Greiner,
dated as of January 1, 1997
10
.12
Employment Agreement between the Registrant and Geoffrey P.
Clear, dated as of March 28, 2003
10
.13
Employment Agreement between the Registrant and Joseph W. Dyer,
dated as of February 18, 2004
10
.14
Employment Agreement between the Registrant and Gregory F.
White, dated as of February 18, 2004
10
.15
Independent Contractor Agreement between the Registrant and
Rodney Brooks, dated as of December 30, 2002
10
.16**
Government Contract DAAE07-03-9-F001 (Small Unmanned Ground
Vehicle)
10
.17**
Government Contract N00174-03-D-0003 (Man Transportable Robotic
System)
10
.18**
2005 Stock Option and Incentive Plan and forms of agreements
thereunder
10
.19#**
Manufacturing and Services Agreement between the Registrant and
Gem City Engineering Corporation, dated as of July 27, 2004
10
.20*
Non-Employee Directors Deferred Compensation Program
23
.1*
Consent of Goodwin Procter LLP (included in Exhibit 5.1)
23
.2
Consent of PricewaterhouseCoopers LLP
24
.1
Power of Attorney (included in page II-5)
*
To be filed by amendment.
**
Previously filed.
Indicates a management contract or any compensatory plan,
contract or arrangement.
#
Confidential treatment requested for portions of this document.
Exhibit 10.5
AMENDED AND RESTATED
2001 SPECIAL STOCK OPTION PLAN
OF IROBOT CORPORATION
SECTION 1. ESTABLISHMENT AND PURPOSE.
The purpose of this Plan is to amend and restate in its entirety the 2001 Special Stock Option Plan of the Company. The Plan is designed to offer selected employees, directors and consultants an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company's Common Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory options as well as ISOs intended to qualify under section 422 of the Code.
SECTION 2. DEFINITIONS.
(a) "Board of Directors" shall mean the Board of Directors of the Company, as constituted from time to time.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.
(c) "Committee" shall mean a committee of the Board of Directors, as described in Section 3(a).
(d) "Company" shall mean iRobot Corporation, a Delaware corporation.
(e) "Employee" shall mean (i) any employee of the Company or of a Subsidiary as determined in accordance with the provisions of Treasury Regulation Section 1.421-7(h) under the Code or any successor regulations thereto, (ii) a member of the Board of Directors, (iii) an independent contractor who performs services for the Company or a Subsidiary, and (iv) any individual who is employed by any partnership in which the Company has a substantial partnership interest.
Service as a member of the Board of Directors or as an independent contractor shall be considered employment for all purposes of the Plan except the second sentence of Section 4(a).
(f) "Exercise Price" shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Committee in the applicable Stock Option Agreement.
(g) "Fair Market Value" shall mean the fair market value of a Share, as determined by the Committee in good faith. Such determination shall be conclusive and binding on all persons.
(h) "ISO" shall mean an employee incentive stock option described in section 422(b) of the Code.
(i) "Nonstatutory Option" shall mean an employee stock option not described in section 422(b) or section 423(b) of the Code.
(j) "Offeree" shall mean an individual to whom the Committee has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).
(k) "Option" shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.
(1) "Optionee" shall mean an individual who holds an Option.
(m) "Plan" shall mean this Amended and Restated 2001 Special Stock Option Plan of iRobot Corporation.
(n) "Purchase Price" shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee.
(o) "Service" shall mean service as an Employee.
(p) "Share" shall mean one share of Stock, as adjusted in accordance with Section 9 (if applicable).
(q) "Stock" shall mean the Common Stock of the Company.
(r) "Stock Option Agreement" shall mean the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to his Option.
(s) "Stock Purchase Agreement" shall mean the agreement between the Company and an Offeree who acquires Shares under the Plan which contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.
(t) "Subsidiary" shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than 50 percent of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
(u) "Total and Permanent Disability" shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than six months.
SECTION 3. ADMINISTRATION.
(a) Committee Membership. The Plan shall be administered by the Committee, which shall consist of three members of the Board of Directors. The members of the Committee shall be appointed by the Board of Directors. If no Committee has been appointed, the entire Board of Directors shall constitute the Committee.
(b) Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee.
(c) Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and discretion to take the following actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating to the Plan;
(iii) To authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale and when Options are to be granted under the Plan;
(v) To select the Offerees and Optionees;
(vi) To determine the number of Shares to be offered to each Offeree or to be made subject to each Option; (vii) To prescribe the terms and conditions of each award or sale of Shares, including (without limitation) the Purchase Price, and to specify the provisions of the Stock Purchase Agreement relating to such award or sale;
(viii) To prescribe the terms and conditions of each Option, including (without limitation) the Exercise Price, to determine whether such Option is to be classified as an ISO or as a Nonstatutory Option, and to specify the provisions of the Stock Option Agreement relating to such Option;
(ix) To amend any outstanding Stock Purchase Agreement or Stock Option Agreement, subject to applicable legal restrictions and to the consent of the Offeree or Optionee who entered into such agreement; and
(x) To take any other actions deemed necessary or advisable for the administration of the Plan.
All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all Optionees, and all persons deriving their rights from an Offeree or Optionee. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan, any Option, or any right to acquire Shares under the Plan.
(d) Financial Reports. Not less often than annually, the Company shall furnish to Optionees and Offerees reports of its financial condition, unless such Optionees and Offerees have access to equivalent information through their employment. Such reports need not be audited.
SECTION 4. ELIGIBILITY.
(a) General Rule. Only Employees shall be eligible for designation as Optionees or Offerees by the Committee. In addition, only individuals who are employees of the Company or of a Subsidiary as determined in accordance with the provisions of Treasury Regulation Section 1.421-7(h) under the Code or any successor regulations thereto shall be eligible for the grant of ISOs.
(b) Ten-Percent Shareholders. An Employee who owns more than 10 percent of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for designation as an Optionee of an ISO unless (i) the Exercise Price is at least 110 percent of the Fair Market Value of a Share on the date of grant, and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant.
(c) Attribution Rules. For purposes of Subsection (b) above, in determining stock ownership, an Employee shall be deemed to own the stock owned, directly or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately by or for its shareholders, partners or beneficiaries. Stock with respect to which such Employee holds an option shall not be counted.
(d) Outstanding Stock. For purposes of Subsection (b) above, "outstanding stock" shall include all stock actually issued and outstanding immediately after the grant. "Outstanding stock" shall not include shares authorized for issuance under outstanding options held by the Employee or by any other person.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares or shares of Stock reacquired in any manner. The aggregate number of Shares which may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall not exceed 544,300 Shares, subject to adjustment pursuant to Section 9. The number of Shares which are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan.
(b) Additional Shares. In the event that any outstanding Option or
other right for any reason expires or is cancelled or otherwise terminated, the
Shares allocable to the unexercised portion of such Option or other right shall
again be available for issuance under the Plan. In the event that Shares are
reacquired by the Company pursuant to a forfeiture provision, a right of
repurchase, a right of first refusal or a transaction under Section 8(b), such
Shares shall again be available for the issuance under the Plan, provided that
Shares that were acquired pursuant to the exercise of an Option which are
subsequently reacquired by the Company shall not be available for issuance
pursuant to the exercise of another Option (except as specifically provided in
Section 5(a)) and provided further that, the cumulative number of such Shares
that are available for reissuance under the Plan will not exceed 544,300 Shares.
(c) Per-Participant Limit. Subject to adjustment under Section 9, no Employee may receive rights to acquire Shares under the Plan (whether by way of Option or otherwise) during any one fiscal year that exceeds 500,000 Shares.
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) Stock Purchase Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Offeree and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical.
(b) Duration of Offers and Nontransferability of Rights. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Offeree within 30 days after the grant of such right was communicated to him by the Committee. Such right shall not be transferable and shall be exercisable only by the Offeree to whom such right was granted.
(c) Purchase Price. The Purchase Price of Shares to be offered under the Plan shall be determined by the Committee, in its sole and absolute discretion, and may be less than, equal to, or greater than the Fair Market Value of such Shares but in no event shall be less than the par value of such Shares. The Purchase Price shall be payable in a form described in Section 8.
(d) Withholding Taxes. As a condition to the award or purchase of Shares, the Offeree shall make such arrangements as the Committee may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such award or purchase.
(e) Restrictions on Transfer of Shares. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture, conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 9. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option. In no event shall the aggregate Fair Market Value of Stock (determined
at the time an ISO is granted) for which ISOs granted to any Employee are
exercisable for the first time by such Employee during any calendar year (under
all stock option plans of the Company and any Subsidiary) exceed One Hundred
Thousand Dollars ($100,000); provided, however, that this limitation shall have
no force or effect if its inclusion in the Plan is not necessary for Options
issued as ISOs to qualify as incentive stock options within the meaning of
Section 422 of the Code. Any Option which would, but for its failure to satisfy
the foregoing restriction, qualify as an ISO shall nevertheless be a valid
Option, but to the extent of such failure it shall be deemed to be a
Nonstatutory Option.
(c) Exercise Price. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than 100 percent
of the Fair Market Value of a Share on the date of grant, except as otherwise
provided in Section 4(b). The Exercise Price of a Nonstatutory option shall be
determined by the Committee, in its sole and absolute discretion, and may be
less than, equal to, or greater than the Fair Market Value of a Share on the
date of grant. The Exercise Price shall be payable in a form described in
Section 8.
(d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Committee may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.
(e) Exercisability and Term. Each Stock Option Agreement shall specify the date(s) or event(s) when all or any installment of the Option is to become exercisable. The vesting of any Option shall be determined by the Committee at its sole discretion. The Stock Option Agreement shall also specify the term of the Option. The term shall not exceed 10 years from the date of grant, except as otherwise provided in Section 4(b). Subject to the preceding sentence, the Committee at its sole discretion shall determine when an Option is to expire.
(f) Nontransferability. During an Optionee's lifetime, his Option(s) shall be exercisable only by him and shall not be transferable. In the event of an Optionee's death, his Option(s) shall not be transferable other than by will or by the laws of descent and distribution.
(g) Termination of Service (Except by Death). If an Optionee's Service terminates for any reason other than his death, then his Option(s) shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (e) above;
(ii) The date 60 days after the termination of his Service for any reason other than Total and permanent disability; or
(iii) The date six months after the termination of his Service by reason of Total and Permanent Disability.
The Optionee may exercise all or part of his Option(s) at any time before the expiration of such Option(s) under the preceding sentence, but only to the extent that such Option(s) had become exercisable before his Service terminated or became exercisable as a result of the termination. The balance of such Option(s) shall lapse when the Optionee's Service terminates. In the event that the Optionee dies after the termination of his Service but before the expiration of his Option(s), all or part of such Option(s) may be exercised (prior to expiration) by the executors or administrators of the Optionee's estate or by any person who has acquired such Option(s) directly from him by bequest or inheritance, but only to the extent that such Option(s) had become exercisable before his Service terminated or became exercisable as a result of the termination.
(h) Leaves of Absence. For purposes of Subsection (g) above, Service shall be deemed to continue while the Optionee is on military leave, sick leave or other bona fide leave of absence (as determined by the Committee). The foregoing notwithstanding, in the case of an ISO granted under the Plan, Service shall not be deemed to continue beyond the first 90 days of such leave, unless the Optionee's reemployment rights are guaranteed by statute or by contract.
(i) Death of Optionee. If an Optionee dies while he is in Service, then his Option(s) shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection (e) above; or
(ii) The date six months after his death.
All or part of the Optionee's Option(s) may be exercised at any time before the expiration of such Option(s) under the preceding sentence by the executors or administrators of his estate or by any person who has acquired such Option(s) directly from him by bequest or inheritance, but only to the extent that such Option(s) had become exercisable before his death or became exercisable as a result of his death. The balance of such Option(s) shall lapse when the Optionee dies.
(j) No Rights as a Shareholder. An Optionee, or a transferee of an Optionee, shall have no rights as a shareholder with respect to any Shares covered by his Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 9.
(k) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding Options or may accept the cancellation of outstanding Options (to the extent not previously exercised) in return for the grant of new Options at the same or a different price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair his rights or increase his obligations under such Option.
(1) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares.
SECTION 8. PAYMENT FOR SHARES.
(a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or check payable to the order of the Company at the time when such Shares are purchased, except as provided in Subsections (b), (c), (d) and (e) below.
(b) Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may be made all or in part with Shares which have already been owned by the Optionee or his representative for more than 12 months and which are surrendered to the Company in good form for transfer. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.
(c) Services Rendered. At the discretion of the Committee, Shares may be awarded under the Plan in consideration of services rendered to the Company or a Subsidiary prior to the award. If Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a determination (at the time of the award) of the value of the services rendered by the Offeree and the sufficiency of the consideration to meet the requirements of Section 6(c) and applicable law.
(d) Full Recourse Note. At the discretion of the Committee, a portion of the Purchase Price or Exercise Price of Shares issued under the Plan may be payable by the issuance and delivery to the Company or a Subsidiary by the Optionee or Offeree of a personal full recourse note of the Optionee or Offeree bearing interest payable not less than annually at no less than 100% of the lowest applicable Federal rate as determined in accordance with Section 1274(d) of the Code; provided such note is secured by the Shares so purchased;
provided further that the Optionee or Offeree deliver to the Company cash or a check payable to the order of the Company in an amount equal to the aggregate par value of the Shares to be issued.
(e) Cashless Exercise. Only if the Stock is then publicly traded and only in the case of the exercise of an Option, delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the Exercise Price of an Option, or delivery by the Optionee to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check payable to the order of the Company sufficient to pay the Exercise Price of an Option.
SECTION 9. ADJUSTMENT OF SHARES.
(a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the value of Shares, a combination or consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization or a similar occurrence, the Committee shall make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 5, (ii) the number of Shares covered by each outstanding Option, or (iii) the Exercise Price under each outstanding Option.
(b) Mergers and Other Reorganizations. In the event that the Company is to be consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company's assets or otherwise, all outstanding Options shall be subject to the agreement governing such transaction. Such agreement shall provide (i) for the assumption of outstanding Options by the surviving corporation or its parent or for its continuation by the Company (if the Company is a surviving corporation), without the Optionees' consent, (ii) for the acceleration of the exercisability of outstanding Options followed by their cancellation if not exercised, without the Optionees' consent (and any such cancellation shall not occur earlier than 30 days after such acceleration is
effective and the Optionees have been notified of such acceleration), (iii) for a limited period of exercise of outstanding Options to the extent then exercisable, without the Optionees' consent, upon notice to the Optionees, followed by its cancellation if not exercised (and any such cancellation shall not occur earlier than 30 days after such limited period of exercise is effective and the Optionees have been notified of such), or (iv) for the termination of outstanding Options in exchange for a cash payment equal to the difference between the Fair Market Value of one Share (if greater than the Exercise Price) and the Exercise Price multiplied by the number of Shares issuable upon exercise of such outstanding Options, but only with the Optionees' consent.
(c) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, all outstanding Options granted hereunder shall terminate immediately prior to the consummation of such action or at such other time and subject to such other conditions as shall be determined by the Committee.
(d) Reservation of Rights. Except as provided in this Section 9, an Optionee or Offeree shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of the Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. Any shares of the capital stock of the Company issued or issuable pursuant to the foregoing adjustments shall be subject to the same restrictions imposed on the Options granted under the Plan and the Shares issued or issuable upon exercise of such Options.
(e) Fractional Shares. No fractional shares shall be issued under the Plan and the Optionees shall receive from the Company cash in lieu of such fractional shares.
SECTION 10. LEGAL REQUIREMENTS.
(a) Securities Laws. Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange on which the Company's securities may then be, listed.
(b) S Corporation Status. In the event that the Company is an S corporation," as defined in section 1361(a) of the Code, Shares shall not be issued under the Plan if the issuance or delivery of such Shares would cause the Company to lose its status as an "S corporation."
SECTION 11. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any right or Option granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee. The Company and its Subsidiaries reserve the right to terminate any person's Service at any time and for any reason.
SECTION 12. DURATION AND AMENDMENTS; GOVERNING LAW; CONFIDENTIALITY.
(a) Term of the Plan. The Plan, as set forth herein, shall become effective on October 30, 2001, subject to the approval of the Company's shareholders. In the event that the shareholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, any Option grants or Stock awards already made shall be null and void, and no additional Option grants or Stock awards shall be made after such date. The Plan shall terminate automatically on October 30, 2011 and may be terminated on any earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan which increases the number of Shares available for issuance under the Plan (except as provided in Section 9), or which materially
changes the class of persons who are eligible for the grant of ISOs, shall be subject to the approval of the Company's shareholders. Shareholder approval shall not be required for any other amendment of the Plan.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan.
(d) Governing Law. The Plan and all awards or sales of Shares or grants of Options hereunder shall be governed and interpreted in accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law.
(e) Confidentiality. Notwithstanding anything to the contrary in this Plan or any Stock Purchase Agreement or Stock Option Agreement entered into under this Plan, nothing shall in any way limit the ability of the Company or any Offeree or Optionee to disclose to any person the tax treatment and tax structure of any right to purchase Shares granted hereunder.
SECTION 13. EXECUTION.
To record the adoption of the Plan, the Company has caused its authorized officer to execute the same.
iRobot Corporation
By: /s/ Colin Angle ------------------------------- Title: Chief Executive Officer |
iROBOT CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
THE SHARES OF COMMON STOCK ISSUABLE PURSUANT TO THIS RESTRICTED STOCK PURCHASE AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE OPTION OR THE SHARES UNDER THE SECURITIES ACT, OR AN OPINION OF COUNSEL, WHICH IS SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
iRobot Corporation (the "Company") hereby issues and sells the shares of its common stock specified below (the "Shares") pursuant to its Amended and Restated 2001 Special Stock Option Plan. The terms and conditions attached hereto are also a part hereof.
Name of purchaser (the "Stockholder"):
Date:
Number of shares sold hereunder:
Purchase price per share:
Form of payment:
Number of Shares that are Vested Shares on the Vesting Start Date:
Number of Shares that are Unvested Shares on the Vesting Start Date:
Vesting Start Date:
Vesting Schedule:
This stock purchase satisfies in full all commitments that the Company has to the Stockholder with respect to the issuance of restricted stock.
iRobot Corporation
------------------------------------ By: Signature of Stockholder -------------------------------- Name of Officer: Street Address: Title: |
iROBOT CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT -- INCORPORATED TERMS AND CONDITIONS
iRobot Corporation (the "Company") agrees to sell to the Stockholder, and the Stockholder agrees to purchase from the Company, shares of the Company's common stock ("Common Stock") on the following terms and conditions:
1. Grant Under Plan. This stock purchase is made pursuant to and is governed by the Company's Amended and Restated 2001 Special Stock Option Plan (the "Plan") and, unless the context otherwise requires, terms used herein shall have the same meanings as in the Plan. The Stockholder acknowledges receipt of a copy of the Plan.
2. Purchase and Sale of Stock; Payment of Purchase Price. The Company hereby sells and the Stockholder hereby purchases the Shares specified on the cover page at the price specified thereon. The purchase price is being paid by the Stockholder upon execution and delivery of this agreement as set forth on the cover page hereof. The Company will promptly issue a certificate or certificates registered in the Stockholder's name representing the Shares, with such certificates to be held in escrow in accordance with the terms hereof.
3. Vesting if Business Relationship Continues.
(a) Vesting Schedule. If the Stockholder has continuously maintained a Business Relationship with the Company through the vesting dates specified on the cover page hereof, Unvested Shares shall become Vested Shares (or shall "vest") on such dates in an amount equal to the number of shares set opposite the applicable date on the cover page. The Stockholder agrees not to sell, assign, transfer, pledge, hypothecate, gift, mortgage or otherwise encumber or dispose of (except to the Company or any successor to the Company) all or any Unvested Shares or any interest therein, and any Unvested Shares shall be held in escrow by the Company in accordance with the terms of Section 6 below unless and until they become Vested Shares or are repurchased by the Company pursuant to Section 4 below. If the Stockholder's Business Relationship with the Company ceases, voluntarily or involuntarily, with or without cause, no Unvested Shares shall become Vested Shares thereafter under any circumstances with respect to the Stockholder. Any determination under this agreement as to the status of a Business Relationship or other matters referred to above shall be made in good faith by the Board of Directors of the Company. The Board of Directors, in its discretion, may accelerate any vesting dates.
(b)(i) Accelerated Vesting Based on Earning of Incentive Compensation. Notwithstanding the provisions of Section 3(a) above, if the Stockholder has continuously maintained a Business Relationship with the Company through the dates specified below, the Unvested Shares shall become Vested Shares (or shall "vest") on the following schedule:
One Year from the Vesting Start Date: (A/4) Shares Two Years from Vesting Start Date: (A/4) Shares Three Years from Vesting Start Date: (A/4) Shares Four Years from Vesting Start Date: (A/4) Shares Restricted Stock Purchase Agreement May 2004 Page 2 |
Where:
B = the lesser of: (i) the total Incentive Compensation Bonus earned by the Stockholder for Fiscal Year as determined by the Compensation Committee of the Company's Board of Directors and (ii) ;
P = $ ; and
A = B/P.
(c) Accelerated Vesting Due to Mergers and Other Reorganizations. In the event that the Company is to be consolidated with or acquired by another entity in a merger, sale of substantially all of the Company's assets or otherwise, during the Stockholders Business Relationship and there are then any Unvested Shares, such agreement shall provide for substantially similar terms as are provided for under Section 9(b) of the Plan (to the extent applicable).
(d) Termination of Employment. For purposes hereof, employment shall not be considered as having terminated during any military leave, sick leave or other bona fide leave if such leave has been approved in writing by the Company and if such written approval contractually obligates the Company to continue the employment of the Stockholder after the approved period of absence; in the event of such an approved leave of absence, vesting of Unvested Shares shall be suspended (and the period of the leave of absence shall be added to all vesting dates) unless otherwise provided in the Company's written approval of the leave of absence. For purposes hereof, a termination of employment followed by another Business Relationship shall be deemed a termination of the Business Relationship with all vesting to cease unless the Company enters into a written agreement related to such other Business Relationship in which it is specifically stated that there is no termination of the Business Relationship under this agreement. This agreement shall not be affected by any change of employment within or among the Company and its Subsidiaries so long as the Stockholder continuously remains an employee of the Company or any Subsidiary.
(e) Business Relationship. For purposes hereof, Business Relationship shall include service to the Company or its successor in the capacity of an employee, officer, director or consultant.
4. Restrictions on Transfer; Purchase by the Company. The Stockholder
may not sell, assign, transfer, pledge, encumber or dispose of ("Transfer") all
or any of his or her Unvested Shares except to the Company pursuant to this
Section 4, and may Transfer Vested Shares only in accordance with the transfer
restrictions provided in this Section 4 or elsewhere in this agreement. The
Stockholder may not at any time transfer any Shares to any individual,
corporation, partnership or other entity that engages in any business activity
that is in competition, directly or indirectly, with the products or services
being developed, manufactured or sold by the Company. The determination of
whether any proposed transferee engages in any business activity that is in
competition with those of the Company shall be made by the Board of Directors of
the Company in good faith. This prohibition shall be applicable in addition to
and separately from the other provisions hereof.
Upon the termination of the Stockholder's Business Relationship, the Stockholder shall sell to the Company (or the Company's assignee) and the Company shall purchase all Unvested Shares in
Restricted Stock Purchase Agreement
May 2004
accordance with the procedures set forth below. In addition, the Company (or the Company's assignee) may (but shall not be obligated to) purchase from Stockholder all but not less than all Vested Shares in accordance with the procedures set forth below. The purchase price (the "Repurchase Price") of such Shares (the "Repurchased Shares") shall be in the case of Unvested Shares, the price paid for them (subject to adjustment as herein provided) and in the case of Vested Shares, shall be the greater of (i) the price paid for them (subject to adjustment as herein provided) and (ii) the product of the Fair Market Value (as defined in the Plan) at the time of repurchase and the number of Vested Shares to be repurchased. The sale of the Unvested Shares shall take place automatically upon termination of the Stockholder's Business Relationship. Such sale shall be effected by the Escrow Holder's (as defined below) delivery to the Company of a certificate or certificates evidencing the Unvested Shares, duly endorsed for transfer to the Company. Upon receipt thereof, the Company shall mail a check for the applicable Repurchase Price to the Stockholder or shall cancel indebtedness owed to the Company by the Stockholder by written notice mailed to the Stockholder, or both. The Company's right of repurchase with respect to Vested Shares shall be exercisable by written notice delivered to the Stockholder within 60 days following the termination of the Stockholders Business Relationship. Such notice shall set forth the date on which the repurchase is to be effected and shall not be more than 30 days after the date of the notice. In order to effect such sale, the Company shall mail a check for the applicable Repurchase Price to the Stockholder or shall cancel indebtedness owed to the Company by the Stockholder by written notice mailed to the Stockholder, or both. Upon the mailing of a check in payment of the purchase price in accordance with the terms hereof or cancellation of indebtedness as aforesaid, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name or cancel the number of Shares being repurchased by the Company. As part of the sale (but not as a condition to its effectiveness), the Stockholder (or, if applicable, the Escrow Holder) shall deliver to the Company a certificate or certificates evidencing the Vested Shares, duly endorsed for transfer to the Company.
Notwithstanding the foregoing and the provisions of Section 9, a Stockholder may transfer: (i) all or any Vested Shares as a gift to any family member or to any trust or similar estate planning entity for the benefit of any such family member or the Stockholder provided that any such transferee shall agree in writing with the Company, as a condition precedent to such transfer, to be bound by all of the provisions of this agreement to the same extent as if such transferee were the Stockholder, or (ii) any or all Vested Shares by will or the laws of descent and distribution, in which event each such transferee shall be bound by all of the provisions of this agreement to the same extent as if such transferee were the Stockholder or (iii) any or all Vested or Unvested Shares by court order, in which event each such transferee shall be bound by all of the provisions of this agreement to the same extent as if such transferee were the Stockholder. As used herein, the word "family" shall include any spouse, lineal ancestor or descendant (whether natural or adoptive), brother or sister of the Stockholder.
5. Investment Representation. The Stockholder represents, warrants and
acknowledges that the Stockholder: (i) has had an opportunity to ask questions
of and receive answers from a Company representative concerning the terms and
conditions of this investment; (ii) is acquiring the Shares with the
Stockholder's own funds, for the Stockholder's own account for the purpose of
investment, and not with a view to any resale or other distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act");
(iii) is a sophisticated investor with such knowledge and experience in
financial and business matters as to be able to evaluate the merits and risks of
an investment in the Shares and that the Stockholder is able to and must bear
the economic risk of the investment in the Shares for an indefinite period of
time because the Shares have not been registered under the Securities Act, and
therefore, cannot be offered or sold unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Furthermore, the Company may place legends on any stock certificate
Restricted Stock Purchase Agreement
May 2004
representing the Shares with the securities laws and contractual restrictions thereon and issue related stop transfer instructions.
The Stockholder acknowledges and understands that the Shares have not
been registered under the Securities Act, nor registered pursuant to the
provisions of the securities laws or other laws of any other applicable
jurisdictions, in reliance on exemptions for private offerings contained in
Section 4(2) of the Securities Act and in the laws of such jurisdictions. The
Stockholder further understands that the Company has no intention and is under
no obligation to register the Shares under the Securities Act or to comply with
the requirements for any exemption that might otherwise be available, or to
supply the Stockholder with any information necessary to enable the Stockholder
to make routine sales of the Shares under Rule 144 or any other rule of the
Securities and Exchange Commission.
6. Escrow of Shares. All Unvested Shares shall be held in escrow by the Company, as escrow holder ("Escrow Holder").
The Escrow Holder is hereby directed to transfer the Unvested Shares in accordance with this agreement or instructions signed by both the Stockholder and the Company. If the Company or any assignee exercises its repurchase rights hereunder, the Escrow Holder, upon receipt of written notice of such exercise from the Company or such assignee, shall take all steps necessary to accomplish such transfer. The Stockholder hereby grants the Escrow Holder an irrevocable power of attorney coupled with an interest to take any and all actions required to effect such transfer.
The Escrow Holder may act in reliance upon advice of counsel in reference to any matter(s) connected with this agreement, and shall not be liable for any mistake of fact or error of judgment, or for any acts or omissions of any kind, unless caused by its willful misconduct or gross negligence.
With respect to any Unvested Shares that become Vested Shares, the Company, upon the written request of the Stockholder, shall promptly issue a new certificate for the number of shares which have become Vested Shares and shall deliver such certificate to the Stockholder and shall deliver to the Escrow Holder a new certificate for the remaining Unvested Shares in exchange for the certificate then being held by the Escrow Holder.
Subject to the terms hereof, the Stockholder shall have all the rights of a stockholder with respect to the Unvested Shares while they are held in escrow, including without limitation, the right to vote the Unvested Shares and receive any cash dividends declared thereon. If, from time to time while the Escrow Holder is holding Unvested Shares, there is any stock dividend, stock split or other change in or respecting such shares, any and all new, substituted or additional securities to which the Stockholder is entitled by reason of his or her ownership of the Unvested Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as "Unvested Shares" for purposes of this agreement and the repurchase rights of the Company.
7. Certain Tax Matters. If the Company in its discretion determines that it is obligated to withhold any tax in connection with the transfer of, or the lapse of restrictions on, the Shares, the Stockholder hereby agrees that the Company may withhold from the Stockholder's wages or other remuneration the appropriate amount of tax. At the discretion of the Company, the amount required to be withheld may be withheld in cash from such wages or other remuneration. The Stockholder further agrees that, if the Company does not withhold an amount from the Stockholder's wages or other remuneration sufficient to satisfy the withholding obligation of the Company, the Stockholder will make reimbursement on demand, in cash, for the amount underwithheld.
Restricted Stock Purchase Agreement
May 2004
The Stockholder represents that he or she has received tax advice from his or her own personal tax advisor on the tax consequences of a purchase of the Shares. The Stockholder understands the tax consequences of filing (and not filing) a Section 83(b) election under the Internal Revenue Code of 1986, as amended (the "Code"). The filing of a Section 83(b) election is the Stockholder's responsibility.
8. Legends. All certificates representing Shares purchased under this Agreement shall be endorsed with the following legends:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS CERTAIN REPURCHASE RIGHTS TO THE COMPANY UPON TERMINATION OF SERVICE WITH THE COMPANY AND CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
9. Restrictions on Transfer of Vested Shares; Company's Right of First Refusal.
(a) Exercise of Right. Vested Shares may not be transferred without the Company's written consent except in accordance with Section 4 or in accordance with the further provisions of this Section 9. If the Stockholder desires to transfer all or any part of the Vested Shares to any person other than the Company (an "Offeror"), the Stockholder shall: (i) obtain in writing an irrevocable and unconditional bona fide offer (the "Offer") for the purchase thereof from the Offeror; and (ii) give written notice (the "Option Notice") to the Company setting forth the Stockholder's desire to transfer such shares, which Option Notice shall be accompanied by a photocopy of the Offer and shall set forth at least the name and address of the Offeror and the price, number of Vested Shares proposed to be sold and terms of the Offer. Upon receipt of the Option Notice, the Company shall have an assignable option to purchase such Vested Shares (the "Offered Shares") specified in the Option Notice (subject, however, to any change in such terms permitted under Subsection (b) below), such option to be exercisable by giving, within 30 days after receipt of the Option Notice, a written counter-notice to the Stockholder. If the Company elects to purchase such Offered Shares, it shall be obligated to purchase, and the Stockholder shall be obligated to sell to the Company or its assignee, such Offered Shares at the price and terms indicated in the Offer within 30 days from the date of delivery by the Company of such counter-notice. To the extent that the consideration proposed to be paid by the Offeror for the shares consists of property other than cash or a promissory note, the consideration required to be paid by the Company may consist of cash equal to the fair market value of such property, as determined in good faith by the Board of Directors of the Company.
(b) Sale of Vested Shares to Offeror. The Stockholder may, for
60 days after the expiration of the option period as set forth in
Section 9(a), sell to the Offeror, pursuant to the
Restricted Stock Purchase Agreement
May 2004
terms of the Offer, all of the Offered Shares not purchased or agreed to be purchased by the Company or its assignee. Any proposed sale on terms and conditions different than those described in the Option Notice, as well as any subsequent proposed sale by the Shareholder, shall again be subject to the procedure described in Subsection (a) above; provided, however, that the Stockholder shall not sell such Shares to such Offeror if such Offeror is a competitor of the Company and the Company gives written notice to the Stockholder, within 30 days of its receipt of the Option Notice, stating that the Stockholder shall not sell his or her Vested Shares to such Offeror; and provided, further, that prior to the sale of such Vested Shares to an Offeror, such Offeror shall execute an agreement with the Company pursuant to which such Offeror agrees to be subject to the restrictions set forth in this Section 9. If any or all of such Vested Shares are not sold pursuant to an Offer within the time permitted above, the unsold Vested Shares shall remain subject to the terms of this Section 9.
(c) Binding Effect. The Company's Right of First Refusal shall inure to the benefit of its successors and assigns and shall be binding upon any purchaser of the Shares.
(d) Expiration of Company's Right of First Refusal and Transfer Restrictions. The first refusal rights of the Company and the transfer restrictions set forth in this Section 9 shall expire as to Vested Shares immediately prior to the closing of a public offering of Common Stock by the Company pursuant to an effective registration statement filed under the Securities Act. In addition, if the Company and the Stockholder are parties to an agreement containing first refusal provisions similar to the foregoing, such other agreement shall control.
10. Failure to Deliver Shares. If the Stockholder (or his or her legal representative) who has become obligated to sell Shares hereunder shall fail to deliver such Shares to the Company in accordance with the terms of this agreement, the Company may, at its option, in addition to all other remedies it may have, mail to the Stockholder the purchase price for such Shares as is herein specified. Thereupon, the Company: (i) shall cancel on its books the certificate or certificates representing such Shares to be sold; and (ii) shall issue, in lieu thereof, a new certificate or certificates in the name of the Company representing such Shares (or cancel such Shares), and thereupon all of such Stockholder's rights in and to such Shares shall terminate.
11. Lock-up Agreement. The Stockholder agrees that in the event that the Company effects an initial underwritten public offering of Common Stock registered under the Securities Act, the Shares may not be sold, offered for sale or otherwise disposed of, directly or indirectly, without the prior written consent of the managing underwriters) of the offering, for such period of time after the execution of an underwriting agreement in connection with such offering that all of the Company's then directors and executive officers agree to be similarly bound.
12. Arbitration. Any dispute, controversy, or claim arising out of, in connection with, or relating to the performance of this agreement or its termination shall be settled by arbitration in the Commonwealth of Massachusetts, pursuant to the rules then obtaining of the American Arbitration Association. Any award shall be final, binding and conclusive upon the parties and a judgment rendered thereon may be entered in any court having jurisdiction thereof.
13. Provision of Documentation to Stockholder. By signing this agreement the Stockholder acknowledges receipt of a copy of this agreement and a copy of the Plan.
14. Miscellaneous.
Restricted Stock Purchase Agreement
May 2004
(a) Notices. All notices hereunder shall be in writing and shall be deemed given when sent by mail, if to the Stockholder, to the address set forth below or at the address shown on the records of the Company, and if to the Company, to the Company's principal executive offices, attention of the Corporate Secretary.
(b) Entire Agreement; Modification. This agreement constitutes the entire agreement between the parties relative to the subject matter hereof, and supersedes all proposals, written or oral, and all other communications between the parties relating to the subject matter of this agreement. This agreement may be modified, amended or rescinded only by a written agreement executed by both parties.
(c) Fractional Shares. All fractional Shares resulting from the adjustment provisions contained in the Plan shall be rounded down.
(d) Changes in Capital Structure. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or event, the securities received in respect of such event shall be "Shares" hereunder subject to this agreement and shall retain the same status as "Vested Shares" or "Unvested Shares" as the Shares in respect of which they were received, and the repurchase price per security subject to repurchase shall be appropriately adjusted by the Company.
(e) Severability. The invalidity, illegality or unenforceability of any provision of this agreement shall in no way affect the validity, legality or enforceability of any other provision.
(f) Successors and Assigns. This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, subject to the limitations set forth herein.
(g) Governing Law. This agreement shall be governed by and interpreted in accordance with the internal laws of the State of Delaware without giving effect to the principles of the conflicts of laws thereof.
(h) No Obligation to Continue Employment. Neither the Plan, this agreement nor any provision hereof imposes any obligation on the Company to continue the Stockholder in employment or any other Business Relationship with the Company.
Restricted Stock Purchase Agreement
May 2004
Exhibit 10.10
IS ROBOTICS
EMPLOYMENT AGREEMENT
THIS IS AN AGREEMENT, effective as of January 1st, 1997 by and between IS Robotics, a Massachusetts corporation (the "Company"), and Colin M. Angle (the "Employee").
RECITALS:
WHEREAS, the Company desires to employ the Employee and the Employee desires to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the parties agree as follows:
1. Employment
The Company hereby employs the Employee, and the Employee hereby accepts employment with the Company, upon the terms and conditions hereinafter set forth.
2. Duties
The Employee shall serve as Chief Executive Officer of the Company. In such capacity, the Employee will report to the Board of Directors of the Company and will perform such duties on behalf of the Company consistent with such office as may be assigned to him from time to time by the Board of Directors of the Company. The Employee agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Board of Directors of the Company, provided they are not inconsistent with the provisions of this Agreement.
3. Term
The commencement date of the Employee's initial term of employment under this Agreement is the date first above written, and Employee's employment will continue, unless sooner terminated as provided below, until June 20th, 2000. Upon the expiration of the initial effective term, this Agreement shall be automatically renewed for successive one-year terms unless terminated as provided in Section 7 hereof (as so extended, the "Employment Term").
4. Extent of Services
During the term of his employment, the Employee will devote full time at a minimum of 160 hours per month, and his best efforts to the performance of his duties under this Agreement. Under no circumstances will the Employee knowingly take any action contrary to the best interests of the Company.
5. Compensation In consideration of the services rendered by the Employee under this Agreement, the Company will pay the Employee compensation as follows:
5.1 Base Salary. A base salary ("Base Salary") of $110,000 per year for the term of this Agreement, payable in accordance with the Company's ordinary payroll practices; provided, however, that if the Company's Operating Income or Cash Flow is insufficient to pay the Employee's Base Salary, the Employee's Base Salary for such year shall be reduced to the amount that the Company is capable of paying to the Employee as determined in the good faith judgment of either the Company's Board of Directors or the Employee. Any such deficiency shall be paid by the Company to the Employee in the next fiscal year that the Company generates sufficient operating income to pay all of its obligations and the deficiency amount, as determined in the good faith judgment of the Company's Board of Directors. Operating Income shall mean the Company's income before depreciation, interest and taxes. This base salary will be reviewed quarterly by the senior management team.
5.2 Bonus. The Employee will be entitled to receive a bonus each calendar year during the Employment Period in accordance with the achievement of certain profitability levels as more fully set forth on Schedule 1 attached hereto. The timing of such bonus payments shall be determined by the Board of Directors of the Company, in its sole discretion.
5.3 Stock Options. Upon execution of this agreement, the Employee will be granted 10,000 non-qualified stock options with a 3 year vesting period.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be entitled to four weeks of vacation in each fiscal year and health insurance consistent with the health insurance provided
by the Company to other similarly-situated employees of the Company. The Employee will be entitled to such additional compensation, bonuses or benefits as the Company's Board of Directors, in its sole discretion, may decide.
6.2 Expenses. The Company will, upon substantiation thereof, reimburse the Employee for all reasonable expenses of types authorized by the Treasurer of the Company in the ordinary course of business and incurred by the Employee in connection with the Company's business affairs. The Employee must regularly submit, for approval to the Treasurer of the Company, a statement of these expenses and will comply with such other accounting and reporting requirements as the Company may from time to time establish.
6.3 Board Representation. The Employee shall be entitled to a seat on IS Robotics' Board of Directors as long as the Employee maintains greater than a 10% equity position in the company on a fully diluted basis.
6.4 Severance Period. If the Company terminates the Employee for reasons other than cause, then for purposes of this section, the "severance period" is the period of time beginning when the Employee is terminated and ending at the latest of the following times:
(a) 6 months
(b) The expiration of the non-compete clause of this agreement.
6.5 Severance Pay. The Employee is entitled to continuing pay at a level equal to his average base salary over the past 2 years for the duration of the severance period.
7. Termination
7.1 By the Company. The Company may terminate the Employee's employment with the Company (a) upon the expiration of the Employment Period in accordance with the terms of this Agreement, (b) at any time without notice for "cause", as defined below, (c) at any time upon 60 days' advance notice, as specified in Section 3 above, or (d) upon the death of the Employee.
7.2 By the Employee. The Employee may terminate his employment with the Company at any time upon 60 days' advance notice, in accordance with Section 3 above.
7.3 Cause. For the purposes of this Section, "cause"
means:
(a) engaging in any crime or offense involving money or other property of the Company, or
(b) failure or refusal to perform specific directives of the Company's Board of Directors consistent with the Employee's, duties, or
(c) conviction of a felony, or
(d) failure to adhere to written Company policies, or
(e) A material breach of this Agreement
7.4 Amounts Payable Upon Termination. Upon termination of the Employee's employment with the Company in accordance with Section 8.1, all moneys owed the Employee will become immediately payable, and all compensation and benefits under this Agreement with the exception of severance pay will cease, effective the date of termination.
8. Additional Terms
8.1 Non-Competition. During the term of this Agreement and for a period of two (2) years after the termination of this Agreement, the Employee shall not, without the Company's prior written consent, which shall not be unreasonably withheld, directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as a holder of not more than 1% of the total outstanding stock of a publicly held company), engage in the business of developing, producing, marketing or selling similar products or services in the Robotics Industry, as such term is defined in Exhibit A attached hereto and made a part hereof;
(b) recruit, solicit or induce, or attempt to induce, any employee, consultant or agent of the Company to terminate their employment with, or otherwise cease their relationship with, the Company after the Employee's departure; or
(c) solicit, divert or take away, or attempt to divert
or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by the Employee during the term of this Agreement.
8.2 Confidentiality and Nondisclosure. In consideration and as a condition of my employment, or continuing employment, by IS Robotics and/or by companies which it owns, controls, or is affiliated with, or their successors in business (the "Company"), and the compensation paid therefore:
(a) I agree to keep confidential, except as the Company may otherwise consent in writing, and not to disclose, or make any use of except for the benefit of the Company, at any time either during or subsequent to my employment, any trade secrets, confidential information, knowledge, data, or other information of the Company relating to products, processes, know-how, designs, customer lists, business plans, marketing plans and strategies, and pricing strategies or any subject matter pertaining to any business of the Company or any of its clients, licensees or affiliates, which I may produce, obtain or otherwise acquire during the course of my employment, except as herein provided. I further agree not to deliver, reproduce or in any way allow any such trade secrets, confidential information, knowledge, data or other information, or any documentation relating thereto, to be delivered or used by any third parties without specific direction or consent of a duly authorized representative of the Company.
(b) Return of Confidential Material. In the event of my termination of employment with the Company for any reason whatsoever, I agree to promptly surrender and deliver to the Company all records, materials, equipment, drawings and data of any nature pertaining to any invention or confidential information of the Company or to my employment, and I will not take with me any description containing or pertaining to any confidential information, knowledge or data of the Company which I may produce or obtain during the course of my employment. In the event of the termination of my employment, I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit A.
(c) Maintenance of Records. I agree to keep and maintain adequate and current written records of all sales and customer transactions, which records shall be available to and remain the sole property of the Company at all times.
8.3 Remedies. The Employee acknowledges that any breach of the provisions of this Section 8 shall result in serious and
irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. The Employee agrees, therefore, that, in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Employee and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages.
8.4 Survival of Obligations. The obligations of the Employee under this Section 8 will survive the termination of this Agreement.
9. Notices
All notices under this Agreement must be in writing and must be delivered by hand or mailed by certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:
IF TO THE COMPANY: IS Robotics Twin City Officer Center 22 McGrath Highway, Suite 6 Somerville, MA 01778 Attention: President WITH A COPY TO: Epstein Becker & Green, P.C. 75 State Street Boston, MA 02109 Attn: Susan Pravda, Esq. IF TO THE EMPLOYEE: To the address set forth below the signature of the Employee; |
or to such other address as is specified in a notice complying with this
Section 10. Any such notice is deemed given on the date delivered by hand or
three days after the date of mailing.
10. Miscellaneous
10.1 Modification. This Agreement constitutes the entire Agreement between the parties with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral. This Agreement may not be amended or revised except by a writing signed by the parties.
10.2 Successors and Assigns. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any corporation with
which or into which the Company may be merged or which may succeed to its assets or business, although the obligations of the Employee are personal and may be performed only by him.
10.3 Captions. Captions have been inserted in this Agreement solely for convenience of reference, and in no way define, limit or affect the scope or substance of any provision of this Agreement.
10.4 Severability. The provisions of this Agreement are severable, and invalidity of any provision does not affect the validity of any other provision. In the event that any court of competent jurisdiction determines that any provision of this Agreement or the application thereof is unenforceable because of its duration or scope, the parties agree that the court in making such determination will have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form is valid and enforceable to the full extent permitted by law.
10.5 Governing Law. This Agreement is to be construed under and governed by the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
IS ROBOTICS
By: /s/ Helen Greiner --------------------------------- President |
EMPLOYEE
/s/ Colin M. Angle ------------------------------------- Colin M. Angle |
Address:
Exhibit 10.11
IS ROBOTICS
EMPLOYMENT AGREEMENT
THIS IS AN AGREEMENT, effective as of January 1st, 1997 by and between IS Robotics, a Massachusetts corporation (the "Company"), and Helen Greiner (the "Employee"):
RECITALS:
WHEREAS, the Company desires to employ the Employee and the Employee desires to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the parties agree as follows:
1. Employment
The Company hereby employs the Employee, and the Employee hereby accepts employment with the Company, upon the terms and conditions hereinafter set forth.
2. Duties
The Employee shall serve as President of the Company. In such capacity, the Employee will report to the Board of Directors of the Company and will perform such duties on behalf of the Company consistent with such office as may be assigned to him from time to time by the Board of Directors of the Company. The Employee agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Board of Directors of the Company, provided they are not inconsistent with the provisions of this Agreement.
3. Term
The commencement date of the Employee's initial term of employment under this Agreement is the date first above written, and Employee's employment will continue, unless sooner terminated as provided below, until June 20th, 2000. Upon the expiration of the initial effective term, this Agreement shall be automatically renewed for successive one-year terms unless terminated as provided in Section 7 hereof (as so extended, the "Employment Term").
4. Extent of Services
During the term of his employment, the Employee will devote full time at a minimum of 160 hours per month, and his best efforts to the performance of his duties under this Agreement. Under no circumstances will the Employee knowingly take any action contrary to the best interests of the Company.
5. Compensation
In consideration of the services rendered by the Employee under this Agreement, the Company will pay the Employee compensation as follows:
5.1 Base Salary. A base salary ("Base Salary") of $110,000 per year for the term of this Agreement, payable in accordance with the Company's ordinary payroll practices; provided, however, that if the Company's Operating Income or Cash Flow is insufficient to pay the Employee's Base Salary, the Employee's Base Salary for such year shall be reduced to the amount that the Company is capable of paying to the Employee as determined in the good faith judgment of either the Company's Board of Directors or the Employee. Any such deficiency shall be paid by the Company to the Employee in the next fiscal year that the Company generates sufficient operating income to pay all of its obligations and the deficiency amount, as determined in the good faith judgment of the Company's Board of Directors. Operating Income shall mean the Company's income before depreciation, interest and taxes. This base salary will be reviewed quarterly by the senior management team.
5.2 Bonus. The Employee will be entitled to receive a bonus each calendar year during the Employment Period in accordance with the achievement of certain profitability levels as more fully set forth on Schedule 1 attached hereto. The timing of such bonus payments shall be determined by the Board of Directors of the Company, in its sole discretion.
5.3 Stock Options Upon execution of this agreement, the Employee will be granted 10,000 non-qualified stock options with a 3 year vesting period.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be entitled to four weeks of vacation in each fiscal year and health insurance consistent with the health insurance provided
by the Company to other similarly-situated employees of the Company. The Employee will be entitled to such additional compensation, bonuses or benefits as the Company's Board of Directors, in its sole discretion, may decide.
6.2 Expenses. The Company will, upon substantiation thereof, reimburse the Employee for all reasonable expenses of types authorized by the Treasurer of the Company in the ordinary course of business and incurred by the Employee in connection with the Company's business affairs. The Employee must regularly submit, for approval to the Treasurer of the Company, a statement of these expenses and will comply with such other accounting and reporting requirements as the Company may from time to time establish.
6.3 Board Representation The Employee shall be entitled to a seat on IS Robotics' Board of Directors as long as the Employee maintains greater than a 10% equity position in the company on a fully diluted basis.
6.4 Severance Period If the Company terminates the Employee for reasons other than cause, then for purposes of this section, the "severance period" is the period of time beginning when the Employee is terminated and ending at the latest of the following times:
(a) 6 months
(b) The expiration of the non-compete clause of this agreement.
6.5 Severance Pay The Employee is entitled to continuing pay at a level equal to his average base salary over the past 2 years for the duration of the severance period.
7. Termination
7.1 By the Company. The Company may terminate the Employee's employment with the Company (a) upon the expiration of the Employment Period in accordance with the terms of this Agreement, (b) at any time without notice for "cause", as defined below, (c) at any time upon 60 days' advance notice, as specified in Section 3 above, or (d) upon the death of the Employee.
7.2 By the Employee. The Employee may terminate his employment
with the Company at any time upon 60 days' advance notice, in accordance with
Section 3 above.
7.3 Cause. For the purposes of this Section, "cause"
means:
(a) engaging in any crime or offense involving money or other property of the Company, or
(b) failure or refusal to perform specific directives of the Company's Board of Directors consistent with the Employee's duties, or
(c) conviction of a felony, or
(d) failure to adhere to written Company policies, or
(e) A material breach of this Agreement
7.4 Amounts Payable Upon Termination. Upon termination of the Employee's employment with the Company in accordance with Section 8.1, all moneys owed the Employee will become immediately payable, and all compensation and benefits under this Agreement with the exception of severance pay will cease, effective the date of termination.
8. Additional Terms
8.1 Non-Competition. During the term of this Agreement and for a period of two (2) years after the termination of this Agreement, the Employee shall not, without the Company's prior written consent, which shall not be unreasonably withheld, directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as a holder of not more than 1% of the total outstanding stock of a publicly held company), engage in the business of developing, producing, marketing or selling similar products or services in the Robotics Industry, as such term is defined in Exhibit A attached hereto and made a part hereof;
(b) recruit, solicit or induce, or attempt to induce, any employee, consultant or agent of the Company to terminate their employment with, or otherwise cease their relationship with, the Company after the Employee's departure; or
(c) solicit, divert or take away, or attempt to divert
or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by the Employee during the term of this Agreement.
8.2 Confidentiality and Nondisclosure. In consideration and as a condition of my employment, or continuing employment, by IS Robotics and/or by companies which it owns, controls, or is affiliated with, or their successors in business (the "Company"), and the compensation paid therefore:
(a) I agree to keep confidential, except as the Company may otherwise consent in writing, and not to disclose, or make any use of except for the benefit of the Company, at any time either during or subsequent to my employment, any trade secrets, confidential information, knowledge, data, or other information of the Company relating to products, processes, know-how, designs, customer lists, business plans, marketing plans and strategies, and pricing strategies or any subject matter pertaining to any business of the Company or any of its clients, licensees or affiliates, which I may produce, obtain or otherwise acquire during the course of my employment, except as herein provided. I further agree not to deliver, reproduce or in any way allow any such trade secrets, confidential information, knowledge, data or other information, or any documentation relating thereto, to be delivered or used by any third parties without specific direction or consent of a duly authorized representative of the Company.
(b) Return of Confidential Material. In the event of my termination of employment with the Company for any reason whatsoever, I agree to promptly surrender and deliver to the Company all records, materials, equipment, drawings and data of any nature pertaining to any invention or confidential information of the Company or to my employment, and I will not take with me any description containing or pertaining to any confidential information, knowledge or data of the Company which I may produce or obtain during the course of my employment. In the event of the termination of my employment, I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit A.
(c) Maintenance of Records. I agree to keep and maintain adequate and current written records of all sales and customer transactions, which records shall be available to and remain the sole property of the Company at all times.
8.3 Remedies. The Employee acknowledges that any breach of the provisions of this Section 8 shall result in serious and
irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. The Employee agrees, therefore, that, in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Employee and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages.
8.4 Survival of Obligations. The obligations of the Employee under this Section 8 will survive the termination of this Agreement.
9. Notices
All notices under this Agreement must be in writing and must be delivered by hand or mailed by certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:
IF TO THE COMPANY: IS Robotics Twin City Officer Center 22 McGrath Highway, Suite 6 Somerville, MA 01778 Attention: President WITH A COPY TO: Epstein Becker & Green, P.C. 75 State Street Boston, MA 02109 Attn: Susan Pravda, Esq. IF TO THE EMPLOYEE: To the address set forth below the signature of the Employee; |
or to such other address as is specified in a notice complying with this Section
10. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
10. Miscellaneous
10.1 Modification. This Agreement constitutes the entire Agreement between the parties with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral. This Agreement may not be amended or revised except by a writing signed by the parties.
10.2 Successors and Assigns. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any corporation with
which or into which the Company may be merged or which may succeed to its assets or business, although the obligations of the Employee are personal and may be performed only by him.
10.3 Captions. Captions have been inserted in this Agreement solely for convenience of reference, and in no way define, limit or affect the scope or substance of any provision of this Agreement.
10.4 Severability. The provisions of this Agreement are severable, and invalidity of any provision does not affect the validity of any other provision. In the event that any court of competent jurisdiction determines that any provision of this Agreement or the application thereof is unenforceable because of its duration or scope, the parties agree that the court in making such determination will have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form is valid and enforceable to the full extent permitted by law.
10.5 Governing Law. This Agreement is to be construed under and governed by the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
IS Robotics
By: /s/ COLIN M. ANGLE ________________________ Colin M. Angle CEO |
EMPLOYEE
/s/ HELEN GREINER ___________________________ Helen Greiner |
Address:
Exhibit 10.12
iROBOT CORPORATION
EMPLOYMENT AGREEMENT -- GEOFFREY CLEAR
THIS IS AN AGREEMENT, dated as of March 28, 2003 (the "Commencement Date") by and between iRobot Corporation, a Delaware corporation (the "Company" or "iRobot"), and Geoffrey P. Clear (the "Employee").
RECITALS:
WHEREAS, the Company desires to continue to employ the Employee and the Employee desires to be employed by the Company;
WHEREAS, the Company and the Employee desire to more formally memorialize the terms of employment detailed in an April 30, 2002 Offer Letter the ("Offer Letter");
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the parties agree as follows:
1. Employment
Effective immediately, the Company shall continue to employ the Employee, and the Employee shall agree to continued employment by the Company, upon the terms and conditions hereinafter set forth.
2. Duties
The Employee shall serve as Chief Financial Officer of the Company. In such capacity, the Employee will report to the President and the Chief Executive Officer of the Company and will perform such duties on behalf of the Company consistent with such office. The Employee agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Board of Directors of the Company, provided they are not inconsistent with the provisions of this Agreement.
3. Term
The Employee's employment shall commence upon the Commencement Date and shall continue, unless sooner terminated as provided below, until December 31, 2005 (the "Employment Term").
4. Extent of Services
During the term of his employment, the Employee will devote full time at a minimum of 160 hours per month, and his best efforts to the performance of his duties under this Agreement.
Under no circumstances will the Employee knowingly take any action contrary to the best interests of the Company.
5. Compensation
In consideration of the services rendered by the Employee under this Agreement, the Company will pay the Employee compensation as follows:
5.1 Base Salary. A base salary ("Base Salary") of $231,000 per year for the Employment Term, payable in accordance with the Company's ordinary payroll practices, and prorated for any partial year.
5.2 Bonus. The Employee will be eligible to receive a fifteen (15%) to forty (40%) percent bonus, calculated on the Base Salary, each calendar year during the Employment Term in accordance with the achievement of certain revenue and profitability criteria to be mutually agreed through good faith negotiations between Company and Employee. The award and amount of any bonus are at the discretion of the CEO and President, and subject to approval by the Compensation Committee of the Board of Directors.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be entitled to three weeks of vacation in each fiscal year and health insurance consistent with the health insurance provided by the Company to other similarly-situated employees of the Company from time to time, where participation in benefit plans is subject to the terms and conditions of those plans and applicable company policy. As of April 1, 2003, the Employee shall be entitled to accrue at a rate of four weeks of vacation each fiscal year. The Employee will be entitled to such additional compensation, bonuses or benefits as the Company's Board of Directors, in its sole discretion, may decide from time to time.
6.2 Expense. The Company will, upon substantiation thereof, reimburse the Employee for all reasonable expenses required in the ordinary course of business and incurred by the Employee in connection with the Company's business affairs. The Employee must regularly submit, to the Treasurer or President of the Company, a statement of these expenses and will comply with such other accounting and reporting requirements as the Company may from time to time establish.
6.3 Severance Period. If (i) the Company terminates the employment of the Employee for reasons other than cause (as defined in Section 7.3), expiration of the Employment Term or the Employee's death or disability, or (ii) the Employee terminates his employment pursuant to Section 7.2(b), then for purposes of this Agreement, the "Severance Period" is the period of time beginning on the effective date of termination and ending at the later of the following times:
Employment Contract with Mr. Clear
March 28, 2003
(a) 6 months thereafter
(b) The expiration of the non-compete clause of this Agreement.
6.4 Severance Pay. The Employee is entitled to continuing pay
at a level equal to his annual Base Salary in effect immediately prior to the
Severance Period prorated for duration of the Severance Period ("Severance
Pay"). Employee shall receive Severance Pay during the Severance Period in
addition to any compensation due under Section 5 for services through
termination and reimbursement, pursuant to Section 6.2, of all expenses incurred
on or prior to termination. There is no obligation to pay a bonus as defined in
Section 5.2, above, during the severance period. All payments under this Section
6.4 are subject to federal, state and local payroll or tax withholding.
7. Termination
7.1 By the Company. The Company may terminate the Employee's
employment with the Company (a) upon the expiration of the Employment Term in
accordance with the terms of this Agreement, provided at least six (6) month
notice of intention to terminate is provided by the Company to the Employee, (b)
at any time without notice for "cause", as defined in subsections (a) or (c) of
Section 7.3, (c) at any time upon thirty (30) days' notice for "cause", as
defined in subsections (b), (c) or (e) of Section 7.3, (d) at any time upon 60
days' advance notice (provided Severance Pay is paid to Employee), (e) if the
Employee is incapacitated or disabled by accident, sickness or otherwise so as
to render the Employee mentally or physically incapable of performing the
services required to be performed under this Agreement with or without
reasonable accommodation for a period of ninety (90) consecutive days or longer
or for any ninety (90) days in any period of one hundred eighty (180)
consecutive days or (f) upon the death of the Employee.
7.2 By the Employee. (a) The Employee may terminate his
employment with the Company at any time upon 60 days' advance notice, (b) The
Employee may terminate his employment with the Company if the Company materially
breaches any of the terms or conditions contained herein. Any termination by the
Employee under this subsection (b) shall be made by giving thirty (30) days'
advance written notice of such termination, with reasonable specificity of the
details thereof, and shall be deemed to be information subject to the
confidentiality provisions of Section 8.2. Such notice of termination must be
given within thirty (30) days of the alleged material breach precipitating the
notice of termination, or, if the breach is not immediately known to the
Employee, within thirty (30) days of the date the Employee learns of the alleged
breach. A termination pursuant to this Section 7.2(b) shall take effect thirty
(30) days after the giving of the notice contemplated hereby unless the Company
shall, during such thirty (30) day period, remedy the alleged breach. The
Employee acknowledges and agrees that any attempted remedy hereunder by the
Company shall not be considered to be an admission of any violation or breach of
this Agreement by the Company.
7.3 Cause. For the purposes of Section 7.1 and Section 6.3, "cause" means:
Employment Contract with Mr. Clear
March 28, 2003
(a) participation in a fraud or act of dishonesty against the Company, including a breach of the duty of loyalty, which adversely affects the Company in a material way, or
(b) failure or refusal to perform specific directives of the Company's Board of Directors consistent with the Employee's duties, unless the Employee remedies such failure or refusal (if such failure or refusal is susceptible to remedy) within thirty (30) days following notice by the Company of its intent to terminate the Employee's employment pursuant to this Section, or
(c) conviction of a felony or any crime involving moral turpitude or dishonesty, or
(d) material failure to adhere to written Company policies, unless the Employee
remedies such failure (if such failure is susceptible to remedy) within thirty
(30) days following notice by the Company of its intent to terminate the
Employee's employment pursuant to this Section, or
(e) a material breach of this Agreement or the Employee's Invention and Confidentiality Agreement executed on or about February 6, 2003
7.4 Amounts Payable Upon Termination. Upon termination of the Employee's employment with the Company in accordance with Section 7.1, all monies owed the Employee, other than Severance Pay obligations, if any, will become immediately payable, and all compensation and benefits under this Agreement with the exception of Severance Pay will cease, effective the date of termination.
8. Additional Terms
8.1 Non Competition. During the term of this Agreement and for a period of one (1) year after the termination of this Agreement for Section 8.1(a) and two (2) years after the termination of this Agreement for Sections 8. l(b) and 8.1(c), the Employee shall not, without the Company's prior written consent, which shall not be unreasonably withheld, directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as a holder of not more than 5% of the total outstanding stock of a publicly held company), engage in the business of developing, producing, marketing or selling products or services in the same specific categories similar to products or services that (i) were developed, produced, marketed or sold by the Company during the Employee's employment with the Company, or (ii) were discussed within the previous three years but not dismissed by the Company's Board of Directors during the Employee's employment;
Employment Contract with Mr. Clear
March 28, 2003
(b) recruit, solicit or induce, or attempt to induce, any employee, consultant or agent of the Company to terminate their employment with, or otherwise cease their relationship with, the Company after or just prior to the Employee's departure; or
(c) divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by the Employee during the term of this Agreement.
8.2 Confidentiality and Nondisclosure. In consideration and as a condition of the Employee's employment, or continuing employment, by iRobot and/or by companies which it owns, controls, or is affiliated with, or their successors in business (for purposes of this Section 8.2 only, the "Company"), and the compensation paid therefor, the Employee agrees:
(a) (i) To keep confidential, except as the Company may otherwise consent in writing, and not to disclose, or make any use of except for the benefit of the Company, at any time either during or subsequent to the Employee's employment, any trade secrets, confidential information, knowledge, data, or other information of the Company relating to products, processes, know-how, designs, customer lists, business plans, marketing plans and strategies, and pricing strategies or any subject matter pertaining to any business of the Company or any of its clients, licensees or affiliates, which the Employee may produce, obtain or otherwise acquire during the course of his employment, except as herein provided and (ii) not to deliver, reproduce or in any way allow any such trade secrets, confidential information, knowledge, data or other information, or any documentation relating thereto, to be delivered or used by any third parties without specific direction or consent of a duly authorized representative of the Company.
(b) In the event of the Employee's termination of employment with the Company for any reason whatsoever, (i) to surrender and deliver to the Company promptly all records, materials, equipment, drawings and data of any nature pertaining to any invention or confidential information of the Company or to the Employee's employment, and the Employee will not take with him any description containing or pertaining to any confidential information, knowledge or data of the Company which the Employee may produce or obtain during the course of his employment and (ii) to sign and deliver a "Termination Certificate" in the form to be provided by the Company.
8.3 Remedies. The Employee acknowledges that any breach of the provisions of this Section 8 shall result in serious and irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. The Employee agrees, therefore, that, in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Employee and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages.
9. Assignment of Inventions.
Employment Contract with Mr. Clear
March 28, 2003
9.1 Disclosure. The Employee will promptly and fully disclose to the Company any and all computer programs and documentation, inventions, discoveries, developments, designs, data, know-how, concepts and ideas, whether or not patentable, that are authored, conceived, developed, reduced to practice or prepared by the Employee alone or by the Employee and others, during the period of the Employee's employment with the Company, relating either to any computer programs and other products and services developed and/or licensed, sold, leased or otherwise distributed or put into use by the Company, during the term of the Employee's employment, or to any prospective activities of the Company known to the Employee as a consequence of employment with the Company (the "Inventions").
9.2 Further Assurances. Upon and/or following disclosure of each Invention to the Company, the Employee will, during the Employee's employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.
9.3 Works Made For Hire. The Employee acknowledges that all computer programs, documentation, works of authorship and copyrightable works prepared in whole or in part by the Employee in the course of the Employee's employment, including without limitation all Inventions, will be "works made for hire" under the Copyright Act of 1976 (the "Copyright Act"), and will be the sole property of the Company and the Company will be the sole author of such works within the meaning of the Copyright Act. All such works, as well as all copies of such works in whatever medium, will be owned exclusively by the Company and the Employee hereby expressly disclaims any and all interests in such works. If the copyright to any such work would not be the property of the Company by operation of law, the Employee hereby and without further consideration, irrevocably assigns to the Company all right, title and interest in such work, including all so-called "moral rights," and will assist the Company and its nominees in every proper way, at the Company's expense, to secure, maintain and defend for the Company's own benefit copyrights and any extensions and renewals thereof on such work, including translations thereof in any and all countries, such work to be and to remain the property of the Company whether copyrighted or not. If the foregoing moral rights cannot be so assigned under the applicable laws of the countries in which such rights exist, the Employee hereby waives such moral rights and consents to any action of the Company that would violate such rights in the absence of such consent.
9.4 Assignment; Power of Attorney. Without in any way limiting the foregoing, the Employee hereby assigns to the Company all right, title and interest to all Inventions, including but not limited to patent rights. In the event the Company is unable, after reasonable effort, to secure the Employee's signature on any letters patent, copyright or other analogous
Employment Contract with Mr. Clear
March 28,2003
protection relating to an Invention, whether because of the Employee's physical or mental incapacity or for any other reason whatsoever, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney-in-fact, to act for and in his behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution thereon with the same legal force and effect as if executed by the Employee.
10. Notices
All notices under this Agreement must be in writing and must be delivered by hand or mailed by certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:
IF TO THE COMPANY: iRobot Corporation
63 South Avenue Burlington, MA 01803 Attention: Glen D. Weinstein
IF TO THE EMPLOYEE: To the address set forth below the signature of the Employee;
or to such other address as is specified in a notice complying with this Section
10. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
11. Miscellaneous
11.1 Modification. This Agreement constitutes the entire Agreement between the parties with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral, including without limitation the Offer Letter. Notwithstanding the foregoing, nothing in this Agreement shall modify the Invention & Confidentiality Agreement executed by the Employee and Company on or about February 6, 2003. This Agreement may not be amended or revised except by a writing signed by the parties.
11.2 Successors and Assigns. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, although the obligations of the Employee are personal and may be performed only by him.
11.3 Captions. Captions have been inserted in this Agreement solely for convenience of reference, and in no way define, limit or affect the scope or substance of any provision of this Agreement.
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March 28, 2003
11.4 Severability. The provisions of this Agreement are severable, and invalidity of any provision does not affect the validity of any other provision. In the event that any court of competent jurisdiction determines that any provision of this Agreement or the application thereof is enforceable because of its duration or scope, the parties agree that the court in making such determination will have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form is valid and enforceable to the full extent permitted by law.
11.5 Governing Law. This Agreement is to be construed under and governed by the laws of the Commonwealth of Massachusetts, excluding its conflict of laws provisions. Any and all actions under this Agreement shall be brought by the parties in the courts of the Commonwealth of Massachusetts, which is the exclusive jurisdiction and venue for this Agreement.
11.6 Survival. The provisions of Sections 6.3, 6.4, 7, 8, 9, 10 and 11 shall survive the Employee's employment and the termination of this Agreement.
11.7 Arbitration. Except for the right to obtain provisional remedies or interim relief, which right is preserved without any waiver of the right to arbitration, any dispute under this Agreement shall be settled by arbitration under the rules of the American Arbitration Association, in Boston, Massachusetts. The arbitration shall be kept confidential to the maximum extent practical. Such arbitration shall be final and binding on the parties. In the event of any dispute between the parties arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees and costs incurred in the action, as determined by a court of competent jurisdiction or an arbitration court having competence under this Agreement.
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March 28, 2003
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
iROBOT CORPORATION
By: /s/ HELEN GREINER --------------------------------------- Helen Greiner, President |
EMPLOYEE
/s/ GEOFFREY P. CLEAR --------------------------------------- Geoffrey P. Clear |
Address:
Employment Contract with Mr. Clear
March 28, 2003
www.irobot.com
iROBOT
May 2, 2003
Mr. Geoffrey P. Clear
iRobot Corporation
63 South Avenue
Burling, MA 01803
Re: First Modification to March 28, 2003 Employment Agreement
Dear Geoff:
Pursuant to Section 11.1 of your March 28, 2003 Employment Agreement, you hereby agree to replace Section 5.2 in its entirety with the following:
5.2 Bonus. The Employee will be eligible to receive up to a forty (40%) percent bonus, calculated on the Base Salary, each calendar year during the Employment Term in accordance with the achievement of certain revenue and profitability criteria to be mutually agreed through good faith negotiations between Company and Employee. The award and amount of any bonus are at the discretion of the CEO and President, and subject to approval by the Compensation Committee of the Board of Directors.
Sincerely,
/s/ GLEN WEINSTEIN ------------------- Glen Weinstein |
Agreed:
/s/ GEOFFREY P. CLEAR --------------------- Geoffrey P. Clear May 2, 2003 |
tel (781) 345-0200
fax (781) 345-0201
63 South Avenue
Burlington, MA 01803
Exhibit 10.13
iROBOT CORPORATION
EMPLOYMENT AGREEMENT - JOSEPH W. DYER
THIS IS AN AGREEMENT, dated as February 18,2004 (the "Commencement Date") by and between iRobot Corporation, a Delaware corporation (the "Company" or "iRobot"), and Joseph W. Dyer (the "Employee").
RECITALS:
WHEREAS, the Company desires to employ the Employee and the Employee desires to be employed by the Company;
WHEREAS, the Company and the Employee desire to more formally memorialize the terms of employment detailed in a July 23, 2003 Offer Letter (the "Offer Letter");
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the parties agree as follows:
1. Employment
Effective immediately, the Company shall employ the Employee, and the Employee shall agree to employment by the Company, upon the terms and conditions hereinafter set forth.
2. Duties
The Employee shall serve as Executive Vice President & General Manager for Military Systems of the Company. In such capacity, the Employee will report to the President and the Chief Executive Officer of the Company and will perform such duties on behalf of the Company consistent with such office and using the Employee's best efforts. The Employee agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Board of Directors of the Company, provided they are not inconsistent with the provisions of this Agreement.
3. Term
The Employee's employment shall commence upon the Commencement Date and shall continue, unless sooner terminated as provided below, until December 31,2006 (the "Employment Term"). The Employment Term will be extended automatically for an additional one (1) year terms, unless either one of the parties notifies the other of the decision not to extend the Agreement prior to the end of an Employment Term.
4. Extent of Services
During the term of his employment, the Employee will devote full time at a minimum of 160 hours per month, said his best efforts to the performance of his duties under this Agreement. Under no circumstances will the Employee knowingly take any action contrary to the best interests of the Company.
5. Compensation
In consideration of the services rendered by the Employee under this Agreement, the Company will pay the Employee compensation as follows:
5.1 Base Salary. A base salary ("Base Salary") of $230,000 per year for the Employment Term, payable in accordance with the Company's ordinary payroll practices, and prorated for any partial year.
5.2 Bonus. The Employee will be eligible to receive a sixty percent (60%) bonus, calculated on the Base Salary, each calendar year during the Employment Term in accordance with the achievement of certain revenue and profitability criteria to be mutually agreed through good faith negotiations between Company and Employee. The award and amount of any bonus are at the discretion of the President and CEO, and subject to approval by the Compensation Committee of the Board of Directors. The Company will guarantee a bonus for 2003 performance in the amount of sixty percent (60%) of Base Salary earned during calendar 2003, to be paid upon the later of the Commencement Date or the Employee's first date of employment.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be entitled to accrue three weeks of vacation in each fiscal year and health insurance consistent with the health insurance provided by the Company to other similarly-situated employees of the Company from time to time, where participation in benefit plans is subject to the terms and conditions of those plans and applicable Company policy. The Employee will be entitled to such additional compensation, bonuses or benefits as the Company's Board of Directors, in its sole discretion, may decide from time to time.
6.2 Expense. The Company will, upon substantiation thereof, reimburse the Employee for all reasonable expenses required in the ordinary course of business and incurred by the Employee in connection with the Company's business affairs. The Employee must regularly submit, to the Treasurer or President of the Company, a statement of these expenses and will comply with such other accounting and reporting requirements as the Company may from time to time establish.
6.3 Severance Period. If (i) the Company terminates the employment of the Employee for reasons other than cause (as defined in Section 7.3), expiration of the Employment
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Term or the Employee's death or disability, or (ii) the Employee terminates his employment pursuant to Section 7.2(b), then for purposes of this Agreement, the "Severance Period" is the period of time beginning on the effective date of termination and ending at the later of the following times:
(a) twelve (12) months thereafter
(b) The expiration of the non-compete clause of this Agreement.
6.4 Severance Pay. The Employee is entitled to continuing pay at
a level equal to his annual Base Salary in effect immediately prior to the
Severance Period prorated for duration of the Severance Period less any amounts
earned through employment by the Employee during the Severance Period
("Severance Pay"). Employee shall receive Severance Pay during the Severance
Period in addition to any compensation due under Section 5 for services through
termination and reimbursement, pursuant to Section 6.2, of all expenses incurred
on or prior to termination. There is no obligation to pay a bonus as defined in
Section 5.2, above, during the severance period. All payments under this Section
6.4 are subject to federal, state and local payroll or tax withholding.
7. Termination
7.1 By the Company. The Company may terminate the Employee's
employment with the Company (a) upon the expiration of the Employment Term in
accordance with the terms of this Agreement, provided at least three (3) months
notice of intention to terminate is provided by the Company to the Employee, (b)
at any time without notice for "cause", as defined in subsections (a) or (c) of
Section 7.3, (c) at any time upon thirty (30) days' notice for "cause", as
defined in subsections (b), (c) or (e) of Section 7.3, (d) at any time upon 60
days' advance notice (provided Severance Pay is paid to Employee), (e) if the
Employee is incapacitated or disabled by accident, sickness or otherwise so as
to render the Employee mentally or physically incapable of performing the
services required to be performed under this Agreement with or without
reasonable accommodation for a period of ninety (90) consecutive days or longer
or for any ninety (90) days in any period of one hundred eighty (180)
consecutive days or (f) upon the death of the Employee.
7.2 By the Employee. (a) The Employee may terminate his
employment with the Company at any time upon 60 days' advance notice. (b) The
Employee may terminate his employment with the Company if the Company materially
breaches any of the terms or conditions contained herein. Any termination by the
Employee under this subsection (b) shall be made by giving thirty (30) days'
advance written notice of such termination, with reasonable specificity of the
details thereof, and shall be deemed to be information subject to the
confidentiality provisions of Section 8.2. Such notice of termination must be
given within thirty (30) days of the alleged material breach precipitating the
notice of termination, or, if the breach is not immediately known to the
Employee, within thirty (30) days of the date the Employee learns of the alleged
breach. A termination pursuant to this Section 7.2(b) shall take effect thirty
(30) days after the giving of the notice contemplated hereby unless the Company
shall, during such
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thirty (30) day period, remedy the alleged breach. The Employee acknowledges and agrees that any attempted remedy hereunder by the Company shall not be considered to be an admission of any violation or breach of this Agreement by the Company.
7.3 Cause. For the purposes of Section 7.1 and Section 6.3, "cause" means:
(a) participation in a fraud or act of dishonesty against the Company, including a breach of the duty of loyalty or cause of adverse publicity, which adversely affects the Company in a material way, or
(b) inadequate performance of duties or failure or refusal to perform specific directives of the Company's Board of Directors consistent with the Employee's duties, unless the Employee remedies such failure or refusal (if such failure or refusal is susceptible to remedy) within thirty (30) days following notice by the Company of its intent to terminate the Employee's employment pursuant to this Section, or
(c) conviction of a felony or any crime involving moral turpitude or dishonesty, or
(d) material failure to adhere to written Company policies, unless the Employee remedies such failure (if such failure is susceptible to remedy) within thirty (30) days following notice by the Company of its intent to terminate the Employee's employment pursuant to this Section, or
(e) a material breach of this Agreement or the Employee's Invention and Confidentiality Agreement executed on or about the Commencement Date.
7.4 Amounts Payable Upon Termination. Upon termination of the Employee's employment with the Company in accordance with Section 7.1, all monies owed the Employee, other than Severance Pay obligations, if any, will become immediately payable, and all compensation and benefits under this Agreement with the exception of Severance Pay will cease, effective the date of termination.
8. Additional Terms
8.1 Non Competition. During the term of this Agreement and for a period of two (2) years after the termination of this Agreement, the Employee shall not, without the Company's prior written consent, which shall not be unreasonably withheld, directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as a holder of not more than 5% of the total outstanding stock of a publicly held company), engage in the business of developing, producing, marketing or selling products or services in the same specific categories similar to
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products or services that (i) were developed, produced, marketed or sold by the Company during the Employee's employment with the Company, or (ii) were discussed within the previous three years but not dismissed by the Company's Board of Directors during the Employee's employment;
(b) recruit, solicit or induce, or attempt to induce, any employee, consultant or agent of the Company to terminate their employment with, or otherwise cease their relationship with, the Company after or just prior to the Employee's departure; or
(c) divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by the Employee during the term of this Agreement.
8.2 Confidentiality and Nondisclosure. In consideration and as a condition of the Employee's employment, or continuing employment, by iRobot and/or by companies which it owns, controls, or is affiliated with, or their successors in business (for purposes of this Section 8.2 only, the "Company"), and the compensation paid therefor, the Employee agrees:
(a) (i) To keep confidential, except as the Company may otherwise consent in writing, and not to disclose, or make any use of except for the benefit of the Company, at any time either during or subsequent to the Employee's employment, any trade secrets, proprietary or confidential information, knowledge, data, or other information of the Company relating to products, processes, know-how, designs, customer lists, business plans, marketing plans and strategies, and pricing strategies or any subject matter pertaining to any business of the Company or any of its clients, licensees or affiliates ("Confidential Information"), which the Employee may produce, obtain or otherwise acquire during the course of his employment, except as herein provided and (ii) not to deliver, reproduce or in any way allow any Confidential Information to be delivered or used by any third parties without specific direction or consent of a duly authorized representative of the Company.
(b) In the event of the Employee's termination of employment with the Company for any reason whatsoever, (i) to surrender and deliver to the Company promptly all records, materials, equipment, drawings and data of any nature pertaining to any invention or confidential information of the Company or to the Employee's employment, and the Employee will not take with him any description containing or pertaining to any confidential information, knowledge or data of the Company which the Employee may produce or obtain during the course of his employment and (ii) to sign and deliver a "Termination Certificate" in the form to be provided by the Company.
8.3 Remedies. The Employee acknowledges that any breach of the provisions of this Section 8 shall result in serious and irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. The Employee agrees, therefore, that, in addition to any other remedy it may have, the Company shall be entitled to
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enforce the specific performance of this Agreement by the Employee and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages.
9. Assignment of Inventions.
9.1 Disclosure. The Employee will promptly and fully disclose to the Company any and all computer programs and documentation, inventions, discoveries, developments, designs, data, know-how, concepts and ideas, whether or not patentable, that are authored, conceived, developed, reduced to practice or prepared by the Employee alone or by the Employee and others, during the period of the Employee's employment with the Company, relating either to any computer programs and other products and services developed and/or licensed, sold, leased or otherwise distributed or put into use by the Company, during the term of the Employee's employment, or to any prospective activities of the Company known to the Employee as a consequence of employment with the Company (the "Inventions").
9.2 Further Assurances. Upon and/or following disclosure of each Invention to the Company, the Employee will, during the Employee's employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.
9.3 Works Made For Hire. The Employee acknowledges that all computer programs, documentation, works of authorship and copyrightable works prepared in whole or in part by the Employee in the course of the Employee's employment, including without limitation all Inventions, will be "works made for hire" under the Copyright Act of 1976 (the "Copyright Act"), and will be the sole property of the Company and the Company will be the sole author of such works within the meaning of the Copyright Act. All such works, as well as all copies of such works in whatever medium, will be owned exclusively by the Company and the Employee hereby expressly disclaims any and all interests in such works. If the copyright to any such work would not be the property of the Company by operation of law, the Employee hereby and without further consideration, irrevocably assigns to the Company all right, title and interest in such work, including all so-called "moral rights," and will assist the Company and its nominees in every proper way, at the Company's expense, to secure, maintain and defend for the Company's own benefit copyrights and any extensions and renewals thereof on such work, including translations thereof in any and all countries, such work to be and to remain the property of the Company whether copyrighted or not. If the foregoing moral rights cannot be so assigned under the applicable laws of the countries in which such rights exist, the Employee hereby waives such moral rights and consents to any action of the Company that would violate such rights in the absence of such consent.
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9.4 Assignment: Power of Attorney. Without in any way limiting the foregoing, the Employee hereby assigns to the Company all right, title and interest to all Inventions, including but not limited to patent rights. In the event the Company is unable, after reasonable effort, to secure the Employee's signature on any letters patent, copyright or other analogous protection relating to an Invention, whether because of the Employee's physical or mental incapacity or for any other reason whatsoever, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney-in-fact, to act for and in his behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution thereon with the same legal force and effect as if executed by the Employee.
10. Notices
All notices under this Agreement must be in writing and must be delivered by hand or mailed by certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:
IF TO THE COMPANY: iRobot Corporation
63 South Avenue Burlington, MA 01803 Attention: Glen D. Weinstein
IF TO THE EMPLOYEE: To the address set forth below the signature of the Employee;
or to such other address as is specified in a notice complying with this Section
10. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
11. Miscellaneous
11.1 Modification. This Agreement constitutes the entire Agreement between the parties with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral, including without limitation the Offer Letter. Notwithstanding the foregoing, nothing in this Agreement shall modify the Invention & Confidentiality Agreement executed by the Employee and Company on or about February 6, 2003. This Agreement may not be amended or revised except by a writing signed by the parties.
11.2 Successors and Assigns. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, although the obligations of the Employee are personal and may be performed only by him.
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11.3 Captions. Captions have been inserted in this Agreement solely for convenience of reference, and in no way define, limit or affect the scope or substance of any provision of this Agreement.
11.4 Severability. The provisions of this Agreement are severable, and invalidity of any provision does not affect the validity of any other provision. In the event that any court of competent jurisdiction determines that any provision of this Agreement or the application thereof is enforceable because of its duration or scope, the parties agree that the court in making such determination will have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form is valid and enforceable to the full extent permitted by law.
11.5 Governing Law. This Agreement is to be construed under and governed by the laws of the Commonwealth of Massachusetts, excluding its conflict of laws provisions. Any and all actions under this Agreement shall be brought by the parties in the courts of the Commonwealth of Massachusetts, which is the exclusive jurisdiction and venue for this Agreement.
11.6 Survival. The provisions of Sections 6.3, 6.4, 7, 8, 9, 10 and 11 shall survive the Employee's employment and the termination of this Agreement.
11.7 Arbitration. Except for the right to obtain provisional remedies or interim relief, which right is preserved without any waiver of the right to arbitration, any dispute under this Agreement shall be settled by arbitration under the rules of the American Arbitration Association, in Boston, Massachusetts. The arbitration shall be kept confidential to the maximum extent practical. Such arbitration shall be final and binding on the parties. In the event of any dispute between the parties arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees and costs incurred in the action, as determined by a court of competent jurisdiction or an arbitration court having competence under this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
iROBOT CORPORATION
By: /s/ HELEN GREINER --------------------------------- Helen Greiner, President |
EMPLOYEE
/s/ JOSEPH W. DYER ------------------------------------- Joseph W. Dyer |
Address:
Employment Contract with Mr. Dyer
February 2004
Exhibit 10.14
iROBOT CORPORATION
EMPLOYMENT AGREEMENT - GREG WHITE
THIS IS AN AGREEMENT, dated as of February 18, 2004 (the "Commencement Date") by and between iRobot Corporation, a Delaware corporation (the "Company" or "iRobot"), and Greg White (the "Employee").
RECITALS:
WHEREAS, the Company desires to continue to employ the Employee and the Employee desires to be employed by the Company;
WHEREAS, the Company and the Employee desire to more formally memorialize the terms of employment detailed in an March 6, 2003 Offer Letter the ("Offer Letter");
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, the parties agree as follows:
1. Employment
Effective immediately, the Company shall continue to employ the Employee, and the Employee shall agree to continued employment by the Company, upon the terms and conditions hereinafter set forth.
2. Duties
The Employee shall serve as Executive Vice President - General Manager of the Company. In such capacity, the Employee will report to the President and Chief Executive Officer of the Company and will perform such duties on behalf of the Company consistent with such office, including primary responsibility for the sales and marketing of all products for the Company's Consumer Division. The Employee agrees to abide by the reasonable rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Board of Directors of the Company, provided they are not inconsistent with the provisions of this Agreement.
3. Term
The Employee's employment shall commence upon the Commencement Date and shall continue, unless sooner terminated as provided below, until December 31, 2005 (the "Employment Term").
4. Extent of Services
During the term of his employment, the Employee will devote full time, at a minimum of 160 hours per month, and his best efforts to the performance of his duties under this Agreement. Under no circumstances will the Employee knowingly take any action contrary to the best interests of the Company.
5. Compensation
In consideration of the services rendered by the Employee under this Agreement, the Company will pay the Employee compensation as follows:
5.1 Base Salary. A base salary ("Base Salary") of $249,990 per year for the Employment Term, payable in accordance with the Company's ordinary payroll practices, and prorated for any partial year.
5.2 Bonus. The Employee will be eligible to receive a target bonus of sixty (60%) percent, calculated on the Base Salary, each calendar year during the Employment Term in accordance with the achievement of certain revenue and profitability criteria to be mutually agreed through good faith negotiations between Company and Employee. The award and amount of any bonus are at the discretion of the CEO and President, and subject to approval by the Compensation Committee of the Board of Directors.
5.3 Stock Options. The Company agrees to grant the Employee the following stock or stock option grants: (a) options to purchase up to one-half of one percent (0.5%) of the fully diluted capitalization of the Company as of March 30, 2003, at fair market value at the time of grant, vesting at a rate of 20% per year, with an acceleration provision for up to 40% of the grant at the time of a qualified Initial Public Offering of the Company's stock; (b) options to purchase up to one percent (1.0%) of the fully diluted capitalization of the Company as of March 30, 2003, at fair market value at the time of grant, vesting on December 31, 2007, December 31, 2008, and December 31, 2009, at a rate of 33.3% per year; provided however that the vesting shall be accelerated by achieving financial and marketing objectives to be determined through good faith negotiations between Company and Employee at the time of grant; and (c) a grant of restricted stock of one and one-half of one percent (1.5%) of the fully diluted capitalization of the Company as of March 30, 2003, at a price of one dollar ($1.00) per share, with restrictions lapsing over three years at a rate of 33.33% per year on the anniversary of hire, to be granted on November 1, 2003 provided the Employee remains employed at the Company.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be entitled to three weeks of vacation in each fiscal year and health insurance consistent with the health insurance provided by the Company to other similarly-situated employees of the Company from time to time, where participation in benefit plans is subject to the terms and conditions of those plans and applicable company policy. The Employee will be entitled to such additional
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compensation, bonuses or benefits as the Company's Board of Directors, in its sole discretion, may decide from time to time.
6.2 Expense. The Company will, upon substantiation thereof, reimburse the Employee for all reasonable expenses required in the ordinary course of business and incurred by the Employee in connection with the Company's business affairs. The Employee must regularly submit, to the Treasurer or President of the Company, a statement of these expenses and will comply with such other accounting and reporting requirements as the Company may from time to time establish.
6.3 Severance Period. If (i) the Company terminates the employment of the Employee for reasons other than cause (as defined in Section 7.3), expiration of the Employment Term or the Employee's death or disability, or (ii) the Employee terminates his employment pursuant to Section 7.2(b), then for purposes of this Agreement, the "Severance Period" is the period of time beginning on the effective date of termination and ending at the later of the following times:
(a) 6 months thereafter
(b) The expiration of the non-compete clause of this Agreement.
6.4 Severance Pay. The Employee is entitled to continuing pay at a level equal to his annual Base Salary in effect immediately prior to the Severance Period prorated for duration of the Severance Period ("Severance Pay"). Employee shall receive Severance Pay during the Severance Period in addition to any compensation due under Section 5 for services through termination and reimbursement, pursuant to Section 6.2, of all expenses incurred on or prior to termination. There is no obligation to pay a bonus as defined in Section 5.2, above, during the severance period. All payments under this Section 6.4 are subject to federal, state and local payroll or tax withholding.
7. Termination
7.1 By the Company. The Company may terminate the Employee's
employment with the Company (a) upon the expiration of the Employment Term in
accordance with the terms of this Agreement, provided at least six (6) month
notice of intention to terminate is provided by the Company to the Employee, (b)
at any time without notice for "cause", as defined in subsections (a) or (c) of
Section 7.3, (c) at any time upon thirty (30) days' notice for "cause", as
defined in subsections (b), (d) or (e) of Section 7.3, (d) at any time upon 60
days' advance notice (provided Severance Pay is paid to Employee), (e) if the
Employee is incapacitated or disabled by accident, sickness or otherwise so as
to render the Employee mentally or physically incapable of performing the
services required to be performed under this Agreement with or without
reasonable accommodation for a period of ninety (90) consecutive days or longer
or for any ninety (90) days in any period of one hundred eighty (180)
consecutive days or (f) upon the death of the Employee.
Employment Agreement with Mr. White
February 2004
7.2 By the Employee. (a) The Employee may terminate his employment with the Company at any time upon 60 days' advance notice. (b) The Employee may terminate his employment with the Company if the Company materially breaches any of the terms or conditions contained herein. Any termination by the Employee under this subsection (b) shall be made by giving thirty (30) days' advance written notice of such termination, with reasonable specificity of the details thereof, and shall be deemed to be information subject to the confidentiality provisions of Section 8.2. Such notice of termination must be given within thirty (30) days of the alleged material breach precipitating the notice of termination, or, if the breach is not immediately known to the Employee, within thirty (30) days of the date the Employee learns of the alleged breach. A termination pursuant to this Section 7.2(b) shall take effect thirty (30) days after the giving of the notice contemplated hereby unless the Company shall, during such thirty (30) day period, remedy the alleged breach. The Employee acknowledges and agrees that any attempted remedy hereunder by the Company shall not be considered to be an admission of any violation or breach of this Agreement by the Company.
7.3 Cause. For the purposes of Section 7.1 and Section 6.3, "cause" means:
(a) participation in a fraud or act of dishonesty against the Company, including a breach of the duty of loyalty, which adversely affects the Company in a material way, or
(b) failure or refusal to perform specific directives of the Company's Board of Directors consistent with the Employee's duties, unless the Employee remedies such failure or refusal (if such failure or refusal is susceptible to remedy) within thirty (30) days following notice by the Company of its intent to terminate the Employee's employment pursuant to this Section, or
(c) conviction of a felony or any crime involving moral turpitude or dishonesty, or
(d) material failure to adhere to written Company policies, unless the Employee remedies such failure (if such failure is susceptible to remedy) within thirty (30) days following notice by the Company of its intent to terminate the Employee's employment pursuant to this Section, or
(e) a material breach of this Agreement or the Employee's Invention and Confidentiality Agreement executed on or about February 6, 2003.
7.4 Amounts Payable Upon Termination. Upon termination of the Employee's employment with the Company in accordance with Section 7.1, all monies owed the Employee, other than Severance Pay obligations, if any, will become immediately payable, and all compensation and benefits under this Agreement with the exception of Severance Pay will cease, effective the date of termination.
8. Additional Terms
Employment Agreement with Mr. White
February 2004
8.1 Non Competition. During the term of this Agreement and for a period of one (1) year after the termination of this Agreement for Section 8.1(a) and two (2) years after the termination of this Agreement for Sections 8.1(b) and 8.1(c), the Employee shall not, without the Company's prior written consent, which shall not be unreasonably withheld, directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant, director, joint venturer, investor, lender, or in any other capacity whatsoever (other than as a holder of not more than 5% of the total outstanding stock of a publicly held company), engage in the business of developing, producing, marketing or selling products or services in the same specific categories similar to products or services that (i) were developed, produced, marketed or sold by the Company during the Employee's employment with the Company, or (ii) were discussed within the previous three years but not dismissed by the Company's Board of Directors during the Employee's employment;
(b) recruit, solicit or induce, or attempt to induce, any employee, consultant or agent of the Company to terminate their employment with, or otherwise cease their relationship with, the Company after or just prior to the Employee's departure; or
(c) divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by the Employee during the term of this Agreement.
8.2 Confidentiality and Nondisclosure. In consideration and as a condition of the Employee's employment, or continuing employment, by iRobot and/or by companies which it owns, controls, or is affiliated with, or their successors in business (for purposes of this Section 8.2 only, the "Company"), and the compensation paid therefor, the Employee agrees:
(a) (i) To keep confidential, except as the Company may otherwise consent in writing, and not to disclose, or make any use of except for the benefit of the Company, at any time either during or subsequent to the Employee's employment, any trade secrets, confidential information, knowledge, data, or other information of the Company relating to products, processes, know-how, designs, customer lists, business plans, marketing plans and strategies, and pricing strategies or any subject matter pertaining to any business of the Company or any of its clients, licensees or affiliates, which the Employee may produce, obtain or otherwise acquire during the course of his employment, except as herein provided and (ii) not to deliver, reproduce or in any way allow any such trade secrets, confidential information, knowledge, data or other information, or any documentation relating thereto, to be delivered or used by any third parties without specific direction or consent of a duly authorized representative of the Company.
Employment Agreement with Mr. White
February 2004
(b) In the event of the Employee's termination of employment with the Company for any reason whatsoever, (i) to surrender and deliver to the Company promptly all records, materials, equipment, drawings and data of any nature pertaining to any invention or confidential information of the Company or to the Employee's employment, and the Employee will not take with him any description containing or pertaining to any confidential information, knowledge or data of the Company which the Employee may produce or obtain during the course of his employment and (ii) to sign and deliver a "Termination Certificate" in the form to be provided by the Company.
8.3 Remedies. The Employee acknowledges that any breach of the provisions of this Section 8 shall result in serious and irreparable injury to the Company for which the Company cannot be adequately compensated by monetary damages alone. The Employee agrees, therefore, that, in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Employee and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages.
9. Assignment of Inventions.
9.1 Disclosure. The Employee will promptly and fully disclose to the Company any and all computer programs and documentation, inventions, discoveries, developments, designs, data, know-how, concepts and ideas, whether or not patentable, that are authored, conceived, developed, reduced to practice or prepared by the Employee alone or by the Employee and others, during the period of the Employee's employment with the Company, relating either to any computer programs and other products and services developed and/or licensed, sold, leased or otherwise distributed or put into use by the Company, during the term of the Employee's employment, or to any prospective activities of the Company known to the Employee as a consequence of employment with the Company (the "Inventions").
9.2 Further Assurances. Upon and/or following disclosure of each Invention to the Company, the Employee will, during the Employee's employment and at any time thereafter, at the request and cost of the Company, sign, execute, make and do all such deeds, documents, acts and things as the Company and its duly authorized agents may reasonably require to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.
9.3 Works Made For Hire. The Employee acknowledges that all computer programs, documentation, works of authorship and copyrightable works prepared in whole or in part by the Employee in the course of the Employee's employment, including without limitation all Inventions, will be "works made for hire" under the Copyright Act of 1976 (the "Copyright Act"), and will be the sole property of the Company and the Company will be the sole author of
Employment Agreement with Mr. White
February 2004
such works within the meaning of the Copyright Act. All such works, as well as all copies of such works in whatever medium, will be owned exclusively by the Company and the Employee hereby expressly disclaims any and all interests in such works. If the copyright to any such work would not be the property of the Company by operation of law, the Employee hereby and without further consideration, irrevocably assigns to the Company all right, title and interest in such work, including all so-called "moral rights," and will assist the Company and its nominees in every proper way, at the Company's expense, to secure, maintain and defend for the Company's own benefit copyrights and any extensions and renewals thereof on such work, including translations thereof in any and all countries, such work to be and to remain the property of the Company whether copyrighted or not. If the foregoing moral rights cannot be so assigned under the applicable laws of the countries in which such rights exist, the Employee hereby waives such moral rights and consents to any action of the Company that would violate such rights in the absence of such consent.
9.4 Assignment; Power of Attorney. Without in any way limiting the foregoing, the Employee hereby assigns to the Company all right, title and interest to all Inventions, including but not limited to patent rights. In the event the Company is unable, after reasonable effort, to secure the Employee's signature on any letters patent, copyright or other analogous protection relating to an Invention, whether because of the Employee's physical or mental incapacity or for any other reason whatsoever, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his agent and attorney-in-fact, to act for and in his behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution thereon with the same legal force and effect as if executed by the Employee.
10. Notices
All notices under this Agreement must be in writing and must be delivered by hand or mailed by certified or registered mail, postage prepaid, return receipt requested, to the parties as follows:
IF TO THE COMPANY: iRobot Corporation
63 South Avenue Burlington, MA 01803 Attention: Glen D. Weinstein
IF TO THE EMPLOYEE: To the address set forth below the signature of the Employee;
or to such other address as is specified in a notice complying with this Section
10. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
11. Miscellaneous
Employment Agreement with Mr. White
February 2004
11.1 Modification. This Agreement constitutes the entire Agreement between the parties with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral, including without limitation the Offer Letter. Notwithstanding the foregoing, nothing in this Agreement shall modify the Invention & Confidentiality Agreement executed by the Employee and Company on or about March 24, 2003. This Agreement may not be amended or revised except by a writing signed by the parties.
11.2 Successors and Assigns. This Agreement is binding upon and inures to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business, although the obligations of the Employee are personal and may be performed only by him.
11.3 Captions. Captions have been inserted in this Agreement solely for convenience of reference, and in no way define, limit or affect the scope or substance of any provision of this Agreement.
11.4 Severability. The provisions of this Agreement are severable, and invalidity of any provision does not affect the validity of any other provision. In the event that any court of competent jurisdiction determines that any provision of this Agreement or the application thereof is enforceable because of its duration or scope, the parties agree that the court in making such determination will have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form is valid and enforceable to the full extent permitted by law.
11.5 Governing Law. This Agreement is to be construed under and governed by the laws of the Commonwealth of Massachusetts, excluding its conflict of laws provisions. Any and all actions under this Agreement shall be brought by the parties in the courts of the Commonwealth of Massachusetts, which is the exclusive jurisdiction and venue for this Agreement.
11.6 Survival. The provisions of Sections 6.3, 6.4, 7, 8, 9, 10 and 11 shall survive the Employee's employment and the termination of this Agreement.
11.7 Arbitration. Except for the right to obtain provisional remedies or interim relief, which right is preserved without any waiver of the right to arbitration, any dispute under this Agreement shall be settled by arbitration under the rules of the American Arbitration Association, in Boston, Massachusetts. The arbitration shall be kept confidential to the maximum extent practical. Such arbitration shall be final and binding on the parties. In the event of any dispute between the parties arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees and costs incurred in the action, as determined by a court of competent jurisdiction or an arbitration court having competence under this Agreement.
Employment Agreement with Mr. White
February 2004
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
iROBOT CORPORATION
BY: /s/ Helen Greiner ------------------------------ Helen Greiner, President |
EMPLOYEE
/s/ Greg White --------------------------------- Greg White |
Address:
Employment Agreement with Mr. White
February 2004
Exhibit 10.15
INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR AGREEMENT (the "Agreement") dated December 30, 2002 (the "Effective Date") is made between iRobot Corporation and its affiliates, successors, assigns and duly authorized representatives ("Company"), with an office at 63 South Avenue, Burlington, MA 01803-4903, and Rodney A. Brooks ("Contractor"), with an office at 545 Tech Square, 9th Floor, Cambridge, MA 02139, for the purpose of setting forth the exclusive terms and conditions by which Company desires to acquire Contractor's services.
In consideration of the mutual obligations specified in this Agreement, the parties, intending to be legally bound hereby, agree to the following:
1. Services:
(a) Company hereby retains Contractor, and Contractor hereby agrees to continue to perform for Company, certain services assigned to Contractor by Company in Company's sole discretion, including, but not limited to, fundraising, marketing, and technical projects (the "Services"). Contractor is responsible for providing the necessary equipment, tools, materials and supplies to perform the Services.
(b) Contractor agrees to keep Company updated, promptly upon Company's request, of any progress, problems, and/or developments of which Contractor is aware regarding the Services. Company shall have the right to require such updates in writing from Contractor in a format specified by Company or acceptable to Company in its sole discretion.
2. Compensation:
(a) In exchange for the full, prompt, and satisfactory performance of all Services to be rendered to Company hereunder (not to exceed 35 hours per month), Company shall provide Contractor, as full and complete compensation for the Services rendered hereunder, compensation at the rate of $500.00 per hour. Company shall pay such compensation within 30 days of approval of each invoice from Contractor setting forth the Services performed (but Contractor will not submit invoices more often than monthly).
(b) For a period of three (3) years starting with fiscal year 2003, Contractor will receive an annual bonus of $66,600 ("Annual Bonus"), payable within ninety (90) days of the close of the Company's fiscal year; provided, however, the Annual Bonus will only be payable if Contractor has provided and continues to be available to provide Services to the Company no less than twenty-five (25) hours per month averaged on an annual basis.
(c) In addition to the Annual Bonus, Company hereby agrees that Contractor will be eligible for additional compensation for specific projects. Such additional compensation, and whether Contractor is eligible for same, will be determined and awarded at Company's Board of Directors' sole discretion.
(d) The Company will, upon substantiation thereof, reimburse the Contractor for all reasonable expenses required in the ordinary course of business and incurred by the Contractor in connection with the Company's business affairs. The Contractor must regularly submit, to the Treasurer of the Company, a statement of these expenses and will comply with such other accounting and reporting requirements as the Company may from time to time establish.
(e) Contractor shall not be entitled to receive any other compensation or any benefits from Company (except as expressly set forth herein). Except as otherwise required by law, Company shall not withhold any sums or payments made to Contractor for social security or other federal, state or local tax liabilities or contributions, and all withholdings, liabilities, and contributions shall be solely Contractor's responsibility. Further, Contractor understands and agrees that the Services are not covered under the unemployment compensation laws and are not intended to be covered by workers' compensation law.
3. Confidentiality and Nondisclosure. In consideration and as a condition of the Contractor's continuing relationship with iRobot and/or by companies which it owns, controls, or is affiliated with, or their successors in business (for purposes of this Section 3 only, the "Company"), and the compensation paid for Contractor's Services, the Contractor agrees:
(a) Except as deemed necessary by the Contractor to perform the
Services hereunder, (i) to keep confidential, except as the Company may
otherwise consent in writing, and not to disclose, or make any use of except for
the benefit of the Company, at any time either during or subsequent to the
Contractor's relationship with the Company, any trade secrets, confidential
information, knowledge, data, or other information of the Company relating to
products, processes, know-how, designs, customer lists, business plans,
marketing plans and strategies, and pricing strategies or any subject matter
pertaining to any business of the Company or any of its clients, licensees or
affiliates, which the Contractor may produce, obtain or otherwise acquire during
the course of his relationship with the Company, except as herein provided and
(ii) not to deliver, reproduce or in any way allow any such trade secrets,
confidential information, knowledge, data or other information, or any
documentation relating thereto, to be delivered or used by any third parties
without specific direction or consent of a duly authorized representative of the
Company.
(b) In the event of termination of the Contractor's relationship with the Company for any reason whatsoever, (i) to surrender and deliver to the Company promptly all records, materials, equipment, drawings and data of any nature pertaining to any invention or confidential information of the Company or to the Contractor's engagement with the Company, and the Contractor will not take with him any description containing or pertaining to any confidential information, knowledge or data of the Company which the Contractor may produce or obtain during the course of performing the Services and (ii) to sign and deliver a "Termination Certificate" in the form attached as Exhibit A.
(c) To keep and maintain adequate and current written records of all sales and customer transactions, which records shall be available to and remain the sole property of the Company at all times.
4. Further Assurances: During the term of this Agreement and for a
period of one (1) year after the termination of this Agreement for Section 4(a)
and two (2) years after the termination of this Agreement for Sections 4(b) and
4(c), the Contractor shall not, without the Company's prior written consent,
which shall not be unreasonably withheld, directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant, director, joint venturer, saver, lender, or in any other capacity whatsoever (other than as a holder of not more than 5% of the total outstanding stock of a publicly held company), engage in the business of developing, producing, marketing or selling products or services similar to products or services in the Robotics Industry (as defined herein), provided, however, that the Contractor may provide, subject to Section 3 of this Agreement, services to educational or research organizations that do not compete with the Company or develop, produce, market or sell products or services that compete with the Company's products or services. For purposes of this Agreement, the Robotics Industry shall be defined as those areas of business where embedded control, mechanical actuators, sensors and artificial intelligence are combined together to create value.
(b) recruit, solicit or induce, or attempt to induce, any employee, consultant or agent of the Company to terminate their employment with, or otherwise cease their relationship with, the Company after cessation of the Contractor's relationship with the Company; or
(c) solicit, divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by the Contractor during the term of this Agreement.
5. Indemnification/Release:
(a) Contractor agrees to take all necessary precautions to prevent injury to any persons (including employees of Company) or damage to property (including Company's property) during the term of this Agreement, and shall indemnify, defend and hold harmless Company, its officers, directors, stockholders, employees, representatives and/or agents from any claim, liability, loss, cost, damage, judgment, settlement or expense (including reasonable attorney's fees) resulting from or arising in any way out of injury (including death) to any person or damage to property arising in any way out of any act, error, omission or negligence on the part of Contractor in the performance or failure to fulfill any Services or obligations under this Agreement.
(b) Contractor further agrees that any breach of this Agreement by Contractor will cause irreparable harm to Company and that in the event of such breach or threatened breach, Company shall have, in addition to any and all remedies of law and those remedies stated in this Agreement, the right to an injunction or other equitable relief to prevent the violation of Contractor's obligations hereunder.
(c) Contractor agrees to indemnify and hold Company harmless from and against any and all claims, demands, liabilities, damages, costs, or expenses (including without limitation attorney's fees, back wages, liquidated damages, penalties or interest) resulting from Company's failure to withhold, or pay any and all federal or state taxes required to be withheld or paid by employers or employees, including, without limitation, and any and all income tax, social security, and F.U.T.A. taxes.
6. Termination:
(a) This Agreement shall be effective on the date hereof and shall continue until terminated by either party upon sixty (60) days' written notice. In the event of termination, Contractor shall ensure, upon request, that he will perform such work as may be requested to complete and/or transfer work in process to Company or to a party designated by Company. Contractor shall be compensated at the rate specified in Section 2(a) for such services.
(b) Contractor also shall be entitled to a pay out upon termination of this Agreement, provided that Contractor executes a comprehensive release agreement in Company's (and its officers, directors, stockholders, employees, representatives and/or agents) favor containing a mutual release provision and agrees to comply with all of his obligations that survive the termination of his assignment and this Agreement. This pay out will equal to twelve months of Contractor's pay at the aggregate monthly rate as of the last complete month during which the Contractor provided Services to Company hereunder prior to termination of this Agreement. This termination pay out will be paid in equal monthly installments over the pay out period.
(c) In addition to any payments made under Section 6(b) and notwithstanding Section 2(b), Contractor also shall be entitled to a one-time bonus payment upon termination of this Agreement, provided that Contractor executes a comprehensive release agreement in Company's (and its officers, directors, stockholders, employees, representatives and/or agents) favor containing a mutual release provision and agrees to comply with all of his obligations that survive the termination of his assignment and this Agreement. This bonus payment will equal: $133,200, if the Contractor is terminated during fiscal year 2004; $66,600, if the Contractor is terminated during fiscal year 2005; and there will be no bonus payment if termination occurs thereafter.
7. Independent Contractor:
(a) Company and Contractor expressly agree and understand that Contractor is an independent contractor and nothing in this Agreement nor the Services rendered hereunder is meant, or shall be construed in any way or manner, to create between them a relationship of employer and employee, principal and agent, partners, joint employers or any other relationship other than that of independent parties contracting with each other solely for the purpose of carrying out the provisions of the Agreement. Contractor is not Company's agent and, except as expressly authorized (after the date hereof) by Company in writing, is not authorized and shall not have the power or authority to bind Company or incur any liability or obligation, or act on Company's behalf. Without Company's prior written consent, at no time shall Contractor represent that he is an agent of Company, or that any of the views, advice, statements and/or
information that may be provided while performing the Services are those of Company.
(b) While Company is entitled to provide Contractor with general guidance to assist Contractor in completing the scope of work to Company's satisfaction, Contractor is ultimately responsible for directing and controlling the performance of the task and the scope of work, in accordance with the terms and conditions of this Agreement. Contractor shall use his best efforts, energy and skill in his own name and in such manner as he sees fit.
8. General:
(a) This Agreement does not create an obligation on Company to continue to retain Contractor except as set forth herein. This Agreement may not be changed unless mutually agreed upon in writing by both Contractor and Company. Sections 3, 4, 5, 6, 7 and 8 shall survive the termination of this Agreement regardless of the manner of such termination. Any waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of such provision or any other provision hereof.
(b) Contractor hereby agrees that each provision herein shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limited or reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear.
(c) Company shall have the right to assign this Agreement to its successors and assigns and this Agreement shall inure to the benefit of and be enforceable by said successors or assigns. Contractor may not assign this Agreement or any rights or obligations hereunder without Company's prior written consent. This Agreement shall be binding upon Contractor's heirs, executors, administrators and legal representatives. This Agreement and all aspects of the relationship between the parties hereto shall be construed and enforced in accordance with and governed by the internal laws of the Commonwealth of Massachusetts without regard to its conflict of laws provisions. Moreover, the parties hereby irrevocably submit to the exclusive jurisdiction of the state or federal courts of the Commonwealth of Massachusetts for the purpose of any claim or action arising out of or based upon this Agreement and agree not to commence any such claim or action other than in the above-named courts.
(d) This Agreement contains the entire agreement between the parties hereto with respect to the engagement of Contractor by Company herein, except for the November 12, 1998 letter agreement between Contractor and Company's predecessor, IS Robotics Corporation, which shall remain in full force and effect in accordance with its terms and to the extent that it is not in conflict with the terms of this Agreement. All other negotiations and agreements (written or oral) between the parties are superseded by this Agreement, including, without limitation, the agreement, dated as of January 1, 1997, by and between Company's predecessor (IS Robotics Corporation) and Contractor, and there are no representations, warranties, understandings or agreements other than those expressly set forth herein. The language of all parts of this
Agreement will in all cases be construed as a whole in accordance with its fair meaning and not strictly for or against either party hereto.
(e) All notices provided for in this Agreement shall not be given in writing and shall be effective when either served by hand delivery, electronic facsimile transmission, express overnight courier service, or by registered or certified mail, return receipt requested, addressed to the parties at their respective addresses as set forth at the beginning of this Agreement, or to such other address or addresses as either party may later specify by written notice to the other.
IN WITNESS WHEREOF, the parties hereto have executed this Independent Contractor Agreement under seal as of the date first above written.
iROBOT CORPORATION /s/ RODNEY A. BROOKS By: /s/ HELEN GREINER -------------------- ----------------- Rodney A. Brooks Name: Helen Greiner --------------- |
EXHIBIT A
TERMINATION CERTIFICATE
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Amendment No. 3 to the Registration Statement on Form S-1 of our report dated May 4, 2005, except for Note 17, as to which the date is May 26, 2005 relating to the financial statements of iRobot Corporation, which appears in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP Boston, Massachusetts October 14, 2005 |