EMPLOYMENT
SEPARATION AGREEMENT
This
Employment Separation Agreement (the “Agreement”) is
entered into by and between Helen Greiner
(“Ms. Greiner” or the “Executive”) and
iRobot Corporation (“iRobot” or the
“Company”) as of October 22, 2008.
WHEREAS,
Ms. Greiner is a founder of iRobot and currently serves as
Chairman of the Board of the Company;
WHEREAS,
Ms. Greiner has indicated her desire to resign from active
employment with the Company to pursue business opportunities in the
area of unmanned aerial vehicles (“UAV”);
WHEREAS,
Ms. Greiner wishes to resign from her employment with the
Company and her position as Chairman of the Board;
WHEREAS,
both Ms. Greiner and iRobot desire that Ms. Greiner
continue to serve as a Director of the Company;
WHEREAS,
Ms. Greiner and iRobot now wish to extinguish all prior
agreements relating to severance pay and benefits including without
limitation, the Executive Agreement dated March 15, 2006 (the
“Executive Agreement”) and replace all such agreements
with this Agreement which sets forth the terms and conditions of
the separation of Ms. Greiner’s employment from the
Company.
NOW
THEREFORE, in consideration of the mutual promises contained in
this Agreement, Ms. Greiner and iRobot agree as follows:
1.
Resignation and Continued Service .
Ms. Greiner’s resignation from employment with iRobot is
effective October 24, 2008 (the “Separation
Date”). In addition, Ms. Greiner resigns, effective as
of October 24, 2008 as Chairman of the Board and, except as
provided in the following sentence, all other offices of the
Company and any of its subsidiaries that she currently holds.
Ms. Greiner will continue to serve as a non-employee director
of the Company.
2.
Payments and Benefits to Executive .
|
|
a.
|
|
Separation Pay
. Ms. Greiner will receive separation pay from the Company in
the total amount equal to one year’s salary continuation
($330,625), payable in equal installments bi-weekly on the
Company’s regular payroll dates except as provided below. The
Company has determined that Ms. Greiner is a “specified
employee” within the
|
|
|
|
|
meaning
of Section 409A(a)(2)(B)(i) of the Internal Revenue Code (the
“Code”). The Company also has determined that the
services to be provided by Ms. Greiner subsequent to the
Separation Date, pursuant to Sections 9 and 10 below, will be
less than 20% of the average level of services she provided to the
Company during the preceding 36 months. Because the salary
continuation payments will be considered deferred compensation
subject to Section 409A of the Code, such payments shall not
be payable until the date that is the earlier of (i) six
months and one day after the Separation Date or
(ii) Ms. Greiner’s death. The first salary
continuation installment shall include a catch-up payment covering
amounts that would otherwise have been paid during the six-month
period but for the application of this provision, and the balance
of the installments shall be payable in accordance with their
original schedule.
|
|
|
|
|
|
|
|
b.
|
|
Usual Benefits
. Consistent with the Company’s policies, Ms. Greiner will
continue to be eligible for employee benefits through the
Separation Date, including medical and dental benefits and accrual
of vacation. No later than the next regular payroll date following
the Separation Date, iRobot shall pay Ms. Greiner all salary
due and owing and any accrued but unused vacation. In addition, the
Company shall reimburse Ms. Greiner for business expenses
incurred on or before the Separation Date, in accordance with the
Company’s expense reimbursement practices. Except as set
forth below, Ms. Greiner’s eligibility to participate in
other employee benefits will cease upon the Separation
Date.
|
|
|
|
|
|
|
|
c.
|
|
Health Benefits Continuation
. If Ms. Greiner elects to continue her medical and dental
insurance coverage after the Separation Date under the law known as
COBRA, the Company shall pay a percentage of the medical and dental
insurance premiums for Ms. Greiner and her dependents, equal
to the same percentage of such premiums paid by the Company during
Ms. Greiner’s employment, from the Separation Date until
the earlier of: (i) four months from the Separation Date;
(ii) the date Ms. Greiner and her dependents become
eligible for health or dental insurance through another employer;
or (iii) the date Ms. Greiner and her dependents become
ineligible for COBRA for any reason (the “Benefits
Continuation Period”). Ms. Greiner agrees to notify the
Company promptly upon becoming eligible for health or dental
insurance from another employer or upon becoming
otherwise
|
2
|
|
|
|
ineligible for COBRA. If Ms. Greiner elects COBRA continuation
coverage, she may continue coverage for herself and any dependents
after the end of the Benefits Continuation Period at her own
expense for the remainder of the COBRA period, to the extent she
and they remain eligible.
|
|
|
|
|
|
|
|
d.
|
|
Acceleration of Unvested Stock Options and Restricted
Stock
. Schedule A hereto sets forth a summary of certain
outstanding stock options and restricted stock awards granted to
Ms. Greiner by the Company pursuant to the Company’s
stock option and incentive plans (“Stock Option Plans”)
and the relevant award agreements (“Award Agreements”).
The parties agree that, if Ms. Greiner ceases to serve as a
Director of the Company, they will execute a separate agreement
under which all of Ms. Greiner’s stock options and
restricted stock awards listed on Schedule A will vest upon
the date that she ceases to serve as a Director.
|
|
|
|
|
|
|
|
e.
|
|
Incentive Pay
. Ms. Greiner is currently eligible to receive Incentive Pay
for calendar year 2008 in an amount up to 80% of her annual salary.
The amount equal to 80% of her annual salary is referred to herein
as “Full Incentive Pay.” The parties agree that
Ms. Greiner will receive as Incentive Pay for calendar year
2008 a percentage of her salary (pro rated to the Separation Date)
that is equal to the highest percentage of salary paid to any
iRobot executive not subject to a guaranteed bonus for calendar
year 2008, provided, however, that if the Company receives notice
from the U.S. Government prior to December 27, 2008 that the
Company has been awarded its bid on the pending XYZ program,
Ms. Greiner will receive no less than Full Incentive Pay for
calendar year 2008. The incentive payment will be made on or before
March 15, 2009.
|
|
|
|
|
|
|
|
f.
|
|
Payment in Lieu of Matching 401k Contribution. Since
Ms. Greiner’s employment will end prior to December 31,
2008, she will not be eligible for any matching contributions by
the Company for the 2008 Plan Year under the Company’s 401k
Savings Plan. In lieu of such contributions, the Company shall make
a lump sum payment to Ms. Greiner in the amount of $6,900, net
of applicable tax withholdings, on or before March 31,
2009.
|
3
|
|
g.
|
|
Tax Treatment
. The Company shall undertake to make deductions, withholdings and
tax reports with respect to payments and benefits under this
Agreement to the extent that it reasonably and in good faith
determines that it is required to make such deductions,
withholdings and tax reports. Nothing in this Agreement shall be
construed to require the Company to make any payments to compensate
Ms. Greiner for any adverse tax effect associated with any
payments or benefits or for any deduction or withholding from any
payment or benefit.
|
3.
Confidentiality and NonCompetition and NonSolicitation
Agreement and No Corporate Opportunity . Ms. Greiner
shall not disclose to any third party any information which, during
her employment, she knew, or reasonably should have known, is
considered by the Company to be confidential and/or proprietary.
The foregoing is in addition to, and not in lieu of, any obligation
set forth in the NonCompetition and NonSolicitation Agreement
between Ms. Greiner and iRobot dated March 15, 2006 (the
“NonCompetition and NonSolicitation Agreement”), which
terms and conditions shall remain in full force and effect and are
incorporated herein by reference. The Company acknowledges and
agrees that business activity in the area of UAV would not be a
competitive business activity within the meaning of the
Non-Competition and Non-Solicitation Agreement and that
Ms. Greiner may work in the area of UAV without violating her
non-competition obligations under that agreement. The Company
further acknowledges that Ms. Greiner may solicit any and all
Govern
|