EXHIBIT 10.23
INTERDIGITAL COMMUNICATIONS CORPORATION
1999 RESTRICTED STOCK PLAN
(Effective October 14, 1999)
1. PURPOSE
The purpose of the Plan is to promote the ability of InterDigital
Communications Corporation (the "Company") to recruit and retain key employees,
directors, consultants and advisors, and enhance the growth, profitability and
shareholder value of the Company by providing the incentive of long-term awards
for continued service and the attainment of performance objectives.
2. DEFINITIONS
(a) "Affiliate" means, with respect to any Person, any other person
that, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, the term
"control," including its correlative terms "controlled by" and "under common
control with," mean, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
(b) "Award" means an award of Restricted Stock granted under the Plan.
(c) "Award Agreement" means a written agreement evidencing and
reflecting the terms of an Award.
(d) "Board" means the Board of Directors of the Company.
(e) "Change of Control" shall mean the happening of any of the
following:
(i) the acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of
the Exchange Act) of "Beneficial Ownership" (as the term beneficial ownership is
used for purposes of Rule 13d-3 promulgated under the Exchange Act) of fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"), provided that for
purposes of this paragraph, Voting Securities acquired directly from the Company
by any Person shall be excluded from the determination of such Person's
Beneficial Ownership of Voting Securities (but such Voting Securities shall be
included in the calculation of the total number of Voting Securities then
outstanding); or
(ii) approval by shareholders of the Company of (A) a merger,
reorganization or consolidation involving the Company if the shareholders of the
Company immediately before such merger, reorganization or consolidation do not
or will not own directly or indirectly immediately following such merger,
reorganization or consolidation, more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from or surviving such merger, reorganization or consolidation in substantially
the same proportion as their ownership of the Voting Securities immediately
before such merger, reorganization or consolidation or (B) (1) a complete
liquidation or dissolution of the Company or (2) an agreement for the sale or
other disposition of all or substantially all of the assets of the Company; or
(iii) acceptance by shareholders of the Company of shares in a
share exchange if the shareholders of the Company immediately before such share
exchange do not or will not own directly or indirectly immediately following
such share exchange more than fifty percent (50%) of the combined voting power
of the outstanding voting securities of the corporation resulting from or
surviving such share exchange in substantially the same proportion as the
ownership of the Voting Securities outstanding immediately before such share
exchange.
(f) "Committee" means the Compensation & Stock Option Committee of the
Board.
(g) "Company" means InterDigital Communications Corporation, a
Pennsylvania corporation, including any successor thereto by merger,
consolidation, acquisition of all or substantially all the assets thereof, or
otherwise.
(h) "Date of Grant" means the date on which an Award is granted.
(i) "Eligible Person" means an employee of a Participating Company, or
a director of, or consultant or advisor to a Participating Company as determined
by the Committee.
(j) "Grantee" means an Eligible Person who is granted an Award.
(k) "Gross-Up Amount" means the quotient obtained by the following
formula:
Gross-Up Amount = Taxable Income
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1 - Tax Rate
where:
(i) "Taxable Income" is the amount that is includible
in the Grantee's taxable income for federal, state
and local tax purposes, as applicable, as the result
of the grant or lapse of forfeiture conditions on an
Award or other circumstances triggering the
imposition of taxation, and
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(ii) "Tax Rate" is the highest marginal federal,
state and local tax rates.
(l) "Participating Company" means the Company and each of the
Subsidiary Companies.
(m) "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization.
(n) "Plan" means the InterDigital Communications Corporation 1999
Restricted Stock Plan, as set forth herein, and as amended from time to time.
(o) "Restricted Stock" means Shares subject to restrictions as set
forth in an Award.
(p) "Share" or "Shares" means a share or shares of Common Stock, $.01
par value, of the Company.
(q) "Subsidiary Companies" means any Affiliate that is controlled by
the Company.
(r) "Terminating Event" means either the liquidation of the Company or
a Change in Control.
(s) "Third Party" means any Person, together with such Person's
Affiliates, provided that the term "Third Party" shall not include the Company
or an Affiliate of the Company
(t) "1933 Act" means the Securities Act of 1933, as amended.
(u) "1934 Act" means the Securities Exchange Act of 1934, as amended.
3. RIGHTS TO BE GRANTED
Rights that may be granted under the Plan are rights to Restricted
Stock, which gives the Grantee ownership rights in the Shares subject to the
Award, which Shares may be subject to a substantial risk of forfeiture or other
restrictions on transferability, as set forth in Paragraph 7. Each Award granted
pursuant to the Plan shall be evidenced by an Award Agreement in such form as
the General Counsel of the Company (subject to the terms of the Plan) may from
time to time determine. Each Award Agreement shall incorporate by reference all
terms and conditions of the Plan.
4. SHARES SUBJECT TO THE PLAN
Not more than 1,500,000 Shares in the aggregate may be issued under the
Plan pursuant to the grant of Awards, subject to adjustment in accordance with
Paragraph 9. The Shares issued
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under the Plan may, at the Company's option, be either Shares held in treasury
or Shares originally issued for such purpose. If Restricted Stock is forfeited
pursuant to the terms of an Award, other Awards with respect to such Shares may
be granted.
5. ADMINISTRATION OF THE PLAN
(a) Administration. The Plan shall be administered by the Committee.
(b) Grants. Subject to the express terms and conditions set forth in
the Plan, the Committee shall have the power, from time to time, to:
(i) select those Eligible Persons to whom Awards
shall be granted under the Plan, determine
the number of Shares to be granted pursuant
to each Award, and, pursuant to the
provisions of the Plan (as well as any other
Company plan relating to such Award), to
determine or modify the terms and conditions
of each Award, including the restrictions
applicable to such Shares, based on such
factors as the Committee shall determine in
its sole discretion;
(ii) interpret the Plan's provisions, prescribe,
amend and rescind rules and regulations for
the Plan, and make all other determinations
necessary or advisable for the
administration of the Plan; and
(iii) amend the terms of any agreement relating to
any Award issued under the Plan; provided
that no Award shall be materially adversely
affected by any such amendment without the
written consent of the Grantee.
The determination of the Committee in all matters as stated above shall be
conclusive.
(c) Meetings. In its capacity as administrator of the Plan, the
Committee shall hold meetings at such times and places as it may determine. Acts
approved at a meeting by a majority of the members of the Committee or acts
approved in writing by the unanimous consent of the members of the Committee
shall be the valid acts of the Committee.
(d) Exculpation. No member of the Committee shall be personally liable
for monetary damages for any action taken or any failure to take any action in
connection with the administration of the Plan or the granting of Awards
thereunder.
(e) Indemnification. Each member of the Committee shall be entitled
without further act on his part to indemnity from the Company to the fullest
extent provided by applicable law and the Company' s Articles of Incorporation
and By-laws in connection with or arising out of
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any action, suit or proceeding with respect to the administration of the Plan or
the granting of Awards thereunder in which he may be involved by reason of his
being or having been a member of the Committee, whether or not he continues to
be such member of the Committee at the time of the action, suit or proceeding.
6. ELIGIBILITY
Awards may be granted only to Eligible Persons, as determined by the
Committee.
7. RESTRICTED STOCK AWARDS
The Committee may grant Awards in accordance with the Plan. The terms
and conditions of Awards shall be set forth in writing as determined from time
to time by the Committee, consistent, however, with the following:
(a) Time of Grant. All Awards shall be granted within ten (10) years
from the date of adoption of the Plan by the Board.
(b) Shares Awarded. The provisions of Awards need not be the same with
respect to each Grantee. No cash or other consideration shall be required to be
paid by the Grantee in exchange for an Award.
(c) Awards and Certificates. A certificate shall be issued to each
Grantee in respect of Shares subject to an Award. Such certificate shall be
registered in the name of the Grantee and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Award.
The Company may require that the certificate evidencing such Restricted Stock be
held by the Company until all restrictions on such Restricted Stock have lapsed.
In the absence of a determination by the Committee at the time of grant, Shares
bearing forfeiture conditions shall be so held by the Company and Shares without
forfeiture conditions shall not be so held.
(d) Restrictions. Subject to the provisions of the Plan and the Award,
during a period set by the Committee commencing with the Date of Grant, the
Grantee shall not be permitted to sell, transfer, pledge or assign Restricted
Stock awarded under the Plan except by will or by the laws of descent and
distribution.
(e) Lapse of Restrictions. Subject to the provisions of the Plan and
the Award, restrictions upon Shares subject to an Award shall lapse at such time
or times and on such terms and conditions as the Committee may determine and as
are set forth in the Award. The Award may provide for the lapse of restrictions
in installments, as determined by the Committee. The Committee may, in its sole
discretion, waive, in whole or in part, any remaining restrictions with respect
to such Grantee's Restricted Stock.
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(f) Rights of the Grantee. Grantees may have such rights with respect
to Shares subject to an Award as may be determined by the Committee and set
forth in the Award, including the right to vote such Shares, and the right to
receive dividends paid with respect to such Shares. In the absence of
restrictions imposed by the Committee, the Grantee shall be a stockholder with
respect to all the shares represented by the share certificates and shall have
all the rights of a stockholder with respect to all the restricted shares,
including the right to vote such shares and to receive all dividends and other
distributions paid with respect to such shares.
(g) Termination of Grantee's Employment. The transfer of employment of
an Eligible Person between Participating Companies shall not be deemed a
termination of employment. In the event that a Grantee terminates employment
with all Participating Companies, then, except as otherwise provided pursuant to
the provisions of an Award or as otherwise determined by the Committee, all
Shares remaining subject to restrictions shall be forfeited by the Grantee,
canceled by the Company and held in the Company's Treasury.
(h) Delivery of Shares. When the restrictions imposed on Restricted
Stock lapse with respect to one or more Shares, the Company shall notify the
Grantee that such restrictions no longer apply, and shall deliver to the Grantee
(or the person to whom ownership rights may have passed by will or the laws of
descent and distribution) a certificate for the number of Shares for which
restrictions have lapsed without any legend or restrictions (except those that
may be imposed by the Committee, in its sole judgment, under Paragraph 8(a)).
The right to payment of any fractional Shares that may have accrued shall be
satisfied in cash, measured by the product of the fractional amount times the
fair market value of a Share at the time the applicable restrictions lapse, as
determined by the Committee.
(i) Tax Gross-Up Payments. The Committee may in its discretion provide
that in connection with the grant of any Award, the lapse of any forfeiture
condition or any other circumstance resulting in the imposition of taxation, the
Company shall pay cash bonuses to the Grantee (or the person to whom ownership
rights may have passed by will or the laws of descent and distribution) in an
aggregate amount not to exceed the Gross-Up Amount minus the Taxable Income. In
the absence of a determination by the Committee at the time of grant, the
Company shall pay the aforesaid tax gross up payment in an aggregate amount
equal to the Gross-Up Amount minus the Taxable Income. The Committee may, in its
discretion, further provide that, in the event of a Change in Control, the
amount payable under this Section shall include an additional amount sufficient
to indemnify the Grantee (or such other person to whom ownership rights may have
passed by will or the laws of descent and distribution) for the amount of any
excise tax under Section 4999 of the Internal Revenue Code, or any successor
provision ("Section 4999"), on the "excess parachute payment" under Section 280G
of the Internal Revenue Code, or any successor provision, to such Grantee or
other person along with the amount of any applicable income tax on the total
amount of such gross up payment, so that the Grantee or such other person will
receive, net after all income taxes, the full value of the Award
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after the Grantee has paid any income taxes and any excise taxes due under
Section 4999 of the Code on the "excess parachute payment" and any excise tax
under Section 4999.
8. SECURITIES LAWS; TAXES
(a) Securities Laws. The Committee shall have the power to make each
grant of Awards under the Plan subject to such conditions as it deems necessary
or appropriate to comply with the then-existing requirements of the 1933 Act and
the 1934 Act. In the event the grant of an Award of Restricted Stock is not
registered under the 1933 Act, such conditions may include the delivery by the
Grantee of an investment representation to the Company in connection with the
lapse of restrictions on Shares subject to an Award, or the execution of an
agreement by the Grantee to refrain from selling or otherwise disposing of the
Shares acquired for a specified period of time or on specified terms.
(b) Taxes. Subject to the rules of Paragraph 8(c), the Company shall be
entitled, if necessary or desirable, to withhold the amount of any tax, charge
or assessment attributable to the grant of any Award or lapse of restrictions
under any Award. The Company shall not be required to deliver Shares pursuant to
any Award until it has been indemnified to its satisfaction for any such tax,
charge or assessment.
(c) Payment of Tax Liabilities; Election to Withhold Shares or Pay Cash
to Satisfy Tax Liability. In connection with the grant of any Award or the lapse
of restrictions under any Award, the Company shall have the right to (A) require
the Grantee to remit to the Company an amount sufficient to satisfy any federal,
state and/or local withholding tax requirements prior to the delivery or
transfer of any certificate or certificates for Shares subject to such Award, or
(B) take any action whatever that it deems necessary to protect its interests
with respect to tax liabilities, including, but not limited to the Company's
withholding a portion of the Shares subject to such Award having a fair market
value approximately equal to the minimum amount of taxes required to be withheld
by the Company under applicable law. The Company's obligation to make any
delivery or transfer of Shares shall be conditioned on the Grantee's compliance,
to the Company's satisfaction, with any withholding requirement.
9. CHANGES IN CAPITALIZATION
In the event that Shares are changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company, whether
through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split-up or other substitution of securities of the Company, the Board
shall make appropriate equitable anti-dilution adjustments to the number and
class of shares of stock available for issuance under the Plan, and subject to
outstanding Awards. Any reference to the term "Shares" in the Plan and option
agreements shall be a reference to the appropriate number and class of shares of
stock available for issuance under the Plan, as adjusted pursuant to this
Paragraph 9. The Board's adjustment
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shall be effective and binding for all purposes of this Plan. The adjustment
provided for in this Paragraph 9 may require the Company to issue fractional
shares, and the total adjustment with respect to the Plan shall be determined
accordingly.
10. TERMINATING EVENTS
Immediately prior to and contingent upon the consummation of any
Terminating Event, all Company imposed restrictions on Restricted Stock (other
than Restricted Stock that has previously been forfeited) shall be eliminated.
11. AMENDMENT AND TERMINATION
The Plan may be amended by the Committee or the Company's Board of
Directors at any time; provided, that no Award shall be adversely affected by
any such termination or amendment without the written consent of the Grantee. No
Restricted Stock may be awarded under the Plan at any time after the date that
is ten years after the effective date of the Plan; provided, that the Plan shall
not be deemed to have terminated until all Restricted Stock shall have either
had applicable restrictions lapse or have been forfeited or have otherwise been
canceled.
12. EFFECTIVE DATE
The effective date of the Plan is October 14, 1999.
13. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant to the
Plan shall be governed by and construed in accordance with Pennsylvania law.
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