AMENDMENT
This Amendment is made between InterDigital Communications Corporation
("InterDigital") and William J. Merritt ("Employee"), with reference to the
following recitals:
A. InterDigital and Employee are parties to a certain Employment Agreement
("Agreement") dated September 3, 1998.
B. InterDigital and Employee desire to amend certain terms of the
Agreement, as set forth herein.
NOW, THEREFORE, in consideration of the above recitals, the mutual promises
contained herein and intending to be legally bound thereby, the parties agree as
follows:
1. Tax Gross-Up. The following provision is hereby added to the end of Section
10 of the Agreement.
"In the event any amount or benefit payable to the Employee under this
Agreement or under any other plan, agreement or arrangement applicable to
the Employee, is subject to an excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (or imposed under
any successor provision of the Code imposing a tax liability on "excess
parachute payments" as that term is defined in Code Section 280G), Employee
shall be entitled, in addition to any other amounts payable under the terms
of this Agreement or under any other plan, agreement or arrangement
applicable to the Employee, to a cash payment in an amount sufficient to
indemnify the Employee (or such other person as may be liable for the
payment of such excise tax) for the amount of any such excise tax, and
leaving Grantee with an amount, net after all federal, state and local
taxes, equal to the amount Grantee would have had if no portion of his
benefit under the Plan constituted an "excess parachute payment."
Notwithstanding the foregoing, the determination of the amount necessary to
indemnify the Employee shall be made taking into account all other payments
made to the Employee under any plans, agreements or arrangements aside from
this Agreement that are intended to indemnify the Employee with respect to
excise taxes on "excess parachute payments. Any disputes as to calculations
to be made under this paragraph shall be resolved by the Company's
independent auditors, whose determinations shall be final and binding. This
provision shall survive the termination of this Agreement and Employee's
employment."
2. Business. The definition of "Business" is hereby amended to be "the design
and
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development of technology content and system solutions for advanced digital
wireless communications applications and the licensing of wireless digital
telephone technology (as more particularly described in the Company's Form
10-K)". The definition of Business shall change and evolve over time as the
Company's business changes and evolves, and such definition shall automatically
adjust each year with the filing of the Company's then current Form 10-K to be
consistent with the business of the Company described therein.
3. Change in Control Definition. Section 7(b) of the Agreement is hereby amended
to read as follows:
"For purposes of this Section 7, a "Change of Control" means the
acquisition (including by merger or consolidation, or by the issuance by
the Company of its securities) by one or more persons in one transaction or
a series of related transactions, of more than fifty percent (50%) of the
voting power represented by the outstanding stock of the Company on the
date hereof or a sale of substantially all of the assets of the Company.
For these purposes,"Person" means an individual, partnership, corporation,
joint venture, association, trust, unincorporated association, other entity
or association."
4. Termination Letter. The Agreement shall be amended to provide for the
requirement that Employee sign the Company's standard form termination letter as
a condition to receiving severance and benefits continuation in the event of a
termination for absenteeism and in the event of a Change in Control and that ,
to be effective, the termination letters must not be revoked. Accordingly, the
phrase "and provided Employee signs Company's standard form termination letter
as provided for in Section 9 below" is hereby added to the second sentence of
Section 6(b) after the words "In addition," and to the second sentence of
Section 7 after the words "In addition, (i)". Further, a new Section 9 is hereby
added to read as follows:
"As a condition precedent to the Company's payment of severance and
continuation of medical and dental insurance coverage pursuant to Sections
1, 5, 6 and 7 above, Employee must sign and deliver to Company Company's
termination letter (without revocation to the extent such right is
provided) which includes a broad-based employment release, an obligation to
return Company property and a reiteration of Employee's confidentiality
obligations, within the time frame specified in the termination letter."
5. Covenant Not to Compete. The covenants contained in Sections 8(a) and 8(b)
shall be deemed only to apply to activities that are "directly competitive" with
the Company's Business. An activity shall be deemed "directly competitive" when
there is a reasonable likelihood that the activity prohibited would result in
the use of technical trade secrets or other highly confidential information of
the Company's or its business associates.
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6. Enforcement. The following provision is hereby added to the end of Section 8
of the Agreement:
"Employee acknowledges that the damages sustainable by the Company as a
result of Employee's failure to comply with the restrictions contained in
this Section 8 are extremely difficult to measure. Accordingly, in the
event Employee fails to comply with these restrictions, Company shall have
the right, in addition to all other remedies at law or in equity, to have
the provisions of this Section 8 of this Agreement specifically enforced by
any court having equity jurisdiction and to obtain a temporary or permanent
injunction or order prohibiting Employee from violating the provisions
thereof. In any proceeding by InterDigital to obtain injunctive relief,
Employee's ability to answer in damages shall not be a bar or be interposed
as a defense to the granting of relief and the Company shall not be
required to post a bond or other undertaking in such a proceeding."
7. Entire Agreement. Section 13 of the Agreement is hereby amended to add the
following at the end of the Section: "excepting the non-disclosure agreement and
the Statement of Ethics signed by Employee at the commencement of Employee's
employment with the Company, various forms related to the commencement of
Employee's employment with the Company and Employee's participation in employee
benefit plans offered by the Company (including, without limitation, option and
restricted stock agreements), and agreements to be bound by Company policies to
the extent that these other agreements do not conflict with the terms of this
Agreement.
8. Force and Effect. Nothing contained herein or in the Agreement shall be
construed to alter Employee's status as an employee-at-will. Except as amended
and modified herein, the Agreement shall continue in full force and effect.
INTENDING TO BE LEGALLY BOUND, the parties have executed this Amendment
as of the 6th day of April, 2000.
INTERDIGITAL COMMUNICATIONS CORPORATION
By: /s/ Howard E. Goldberg
------------------------------------
/s/ William J. Merritt
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WILLIAM J. MERRITT
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