exv10w2









Exhibit 10.2




InterDigital

Short-Term Incentive Plan




Purpose



This Short-Term Incentive Plan (this “Plan”) is designed to provide an effective means to motivate
and compensate eligible employees, on an annual basis, through cash and/or stock award bonuses
based on the achievement of business and individual performance objectives during each calendar
year (“Plan Year”). The Plan is intended to be the Company’s primary vehicle for the granting of
annual bonuses. However, the Company may, in certain limited circumstances, grant bonuses outside
of this Plan, in the sole discretion of the Company.



The compensation contemplated under this Plan is considered “pay for performance,” in that any
payout under the Plan is subject to the achievement of specific performance goals by the Company
and by each individual during the Plan Year. The Company believes that such compensation can be a
highly effective form of compensation that can enhance the employer-employee “stakeholder”
relationship. In addition, the Company hopes that by providing short-term incentive compensation,
the Company will motivate and increase the retention rate among its employees, which, in turn, will
enhance the Company’s long-term value.




Who Is Eligible?



All regular full-time or part-time employees1 will be eligible to receive a bonus payout
under the Plan, unless an employee: (i) is not working actively at the time of the payout of the
bonus or at least as of March 15th of the year following the end of the Plan Year (unless such
person was involuntarily terminated other than for intentional wrongdoing after the end of the Plan
Year, but before the bonus was paid), (ii) was working actively for the Company for less than
ninety (90) days during the Plan Year, (iii) is determined not to have performed minimally at a
“Meets Job Requirements” level during the Plan Year, or (iv) was involuntarily terminated for
unsatisfactory performance or misconduct, such determination to be made in the C.E.O.’s sole
discretion (or the Compensation Committee in the case of Section 16 Officers) based upon documented
or other objective substantiation.



The Compensation Committee may grant exceptions to the above eligibility criteria in its sole
discretion. The Chief Administrative Officer may grant exceptions to the above eligibility criteria
for non-executive employees who have worked through the end of the third quarter of a Plan Year,
provided, however, that any bonus so awarded may not exceed $25,000. In addition, employees who
meet the eligibility requirements set out above but were not regular full-time or part-time
employees for the full Plan Year will be paid any bonus on a pro rata basis.2 The pro
rata amount will be calculated based on the employee’s income, i.e., base salary / regular pay and
other eligible earned income, if applicable, paid during the Plan Year.




How Does the Plan Work?



Each employee is assigned a Plan target based on their level in the organization. The target bonus
is a percentage of the employee’s annual base salary in effect as of the end of the Plan Year.
Based on the Company’s or Department’s level of achievement of certain annual
corporate/departmental objectives and the employee’s individual contributions toward the
Company’s/Department’s goal achievement, the employee will receive the appropriate






 




			
	1	 	“Regular full-time” and “regular part-time”
employees are defined in the Company’s employee handbook and
specifically exclude “seasonal/casual employees” (which are also
defined in the Company’s employee handbook).
	 
	2	 	Employees who do not work a full Plan Year
because they were out of work on an approved leave of absence for part of the
plan year will be paid any bonus on a pro rata basis by calculating the bonus
based on the actual amount of eligible base income earned during the Plan Year.
If the Employee is paid for part of the leave through PTO or other eligible
accrued form of income (not including STD or worker’s compensation payments),
this income will be included in the base salary calculation.




 









 









payout under the Plan. Corporate annual goals and performance results will be approved and measured by the
Compensation Committee for the C.E.O., C.F.O., President of the Company’s patent holding
subsidiaries and other Senior Officers. Departmental annual goals and performance results will be
approved by each Department Head and the C.E.O. for all other employees. The corporate and
departmental goals will be communicated to employees, normally in the first quarter of each Plan Year.
The corporate and departmental performance goals are designed to be reasonable “stretch” goals.



Individual annual goals and performance results will be approved and measured by the Compensation
Committee for the C.E.O., by the C.E.O. for other Senior Officers and by each respective Department
Head for all other employees. The individual performance goals are designed to be reasonable
“stretch” goals.



The Plan target for each employee position band, and the associated weighting factors, are as
follows:




	 	 	 	 	 	 	 	 	 	 	 
	Band	 	 	 	Percentage of Bonus	 	 
	(In the event a Participant changes bands during the	 	 	 	Related to Business	 	Percentage of Annual
	Plan Year, the Annual Target	 	Annual Target	 	Performance	 	Target Bonus
	Bonus will be calculated based on the Participant’s	 	Bonus	 	(either Corporate	 	Related to Individual
	actual band at year-end)	 	(% of base salary)	 	or Departmental)	 	Performance
	C.E.O.

	 	80%
	 	 	75	%	 	 	25	%
	C.F.O. / President of patent holding subs

	 	55%
	 	 	75	%	 	 	25	%
	Other Senior Officer

	 	45%
	 	 	75	%	 	 	25	%
	Vice President (or functional equivalent)

	 	40%
	 	 	75	%	 	 	25	%
	Senior Director (or functional equivalent)

	 	30%
	 	 	75	%	 	 	25	%
	Director (or functional equivalent)

	 	25%
	 	 	75	%	 	 	25	%
	Senior Manager (or functional equivalent)

	 	20%
	 	 	75	%	 	 	25	%
	Manager (or functional equivalent)

	 	15%
	 	 	75	%	 	 	25	%
	Non-Manager

	 	9%/11%/13% 

(based on position 

band)
	 	 	75	%	 	 	25	%





In each Plan Year, the portion of the Plan target related to business performance may be allocated
among a number of corporate/departmental goals.




How Do Actual Business and Individual Performance Affect the Bonus to Be Paid?



As described above, the bonus payout consists of two components: the portion attributable to
corporate/departmental performance and the portion attributable to individual performance. If the
Company’s or a Department’s actual goal results and/or the employee’s individual performance for
the year exceed or fall short of the established targets, then the bonus payout will be adjusted up
or down relative to the level of overachievement or underachievement. The impact of actual results
as compared to corporate/departmental and individual goals on any bonus to be paid is described
below.



Corporate Goals. The calculation of the portion of the bonus payout associated with the
business performance will be based upon either the Company’s actual business results measured
against the goals set by the Compensation Committee (for the C.E.O., C.F.O, President of the
Company’s patent holding subsidiaries and other Sr. Officers) or the Department’s actual business
results measured against the goals set by the Department (for all other bands). If the Company or
Department achieves a specified goal, then 100% of the portion of the bonus related to that
business goal will be awarded. If actual results deviate from established business goals, then the
bonus payout amounts will be determined as follows.




 









 







Results above the goal: If the Company/Department performance exceeds an established
business goal by a certain percentage, then the payout of that portion of the annual target bonus
associated with that business goal will be increased by the same percentage point(s) representing
the overachievement (see below):




	 	 	 	 	 
	Results	 	Percentage Payout
	101%

	 	 	101	%
	   ò

	 	ò

	200%

	 	 	200	%





Results below the goal: If the Company/Department performance falls short of an established
goal by a certain percentage, then the payout of that portion of the annual target bonus associated
with that business goal will be decreased by the same percentage point(s) representing the
shortfall, with no bonus being payable for a particular goal if the result is less than 80% of the
target (see below):




	 	 	 	 	 
	 	 	Percentage
	Results	 	Payout
	100%

	 	 	100	%
	    ò

	 	ò

	80%

	 	 	80	%
	< 79%

	 	 	0	%





The Compensation Committee, in its sole discretion, may determine that a business goal has been
substantially met or has been met to a degree warranting a higher payout than would otherwise be
calculable under this Plan. For example, the Compensation Committee may determine that one-time
charges should be disregarded in determining the payout under an earnings performance goal.
Similarly, the C.E.O. in conjunction with the Department Head can determine that a departmental
goal has been substantially met to a degree warranting a higher payout than would otherwise be
calculable under this Plan.



Individual Performance. As described above, the evaluation of individual performance
portion of the bonus payout is the responsibility of the Department Head (with input from the
employee’s direct supervisor, as appropriate) based on the employee’s performance during the Plan
Year and their relative level of contributions to the Departmental goals.




When Will the Bonus Be Paid?



Bonuses will normally be paid under the Plan on or before March 15 of the year following each Plan
Year.




An Example of How the Bonus Is Calculated




     Assume an entry-level management employee is earning a base salary of $50,000 and is employed
for the full Plan Year. The employee has an annual target bonus of 15% of base salary ($7,500). The
Department established two goals of equal weight for the Plan Year. The actual results for the
first goal were 4% below the target; the actual results for the second goal were 2% above the
target. The Department Head determines the employee’s individual performance to be 95%. The
employee’s bonus would be calculated as follows:



	 	 	 	 	 	 	 	 	 
	 	 	A	 	 	 	 	 	 
	 	 	Percentage of	 	B	 	 	 	 
	 	 	Bonus Relating to	 	Result as a	 	C	 	 
	 	 	Performance	 	Percentage	 	Percentage	 	A x C
	Performance Factor	 	Factor	 	of Goal	 	Payout	 	Weighted Result
	Goal One
	 	40%	 	96%	 	96% 
 (1 to 1 ratio)	 	38.40% 
 (96% x 40%)
	Goal Two
	 	35%	 	102%	 	102% 
 (1 to 1 ratio)	 	35.70% 
 (102% x 35%)
	Individual Performance
	 	25%	 	95%	 	95%	 	23.75% 
 (25% x 95%)
	Total
	 	100%	 	N/A	 	N/A	 	97.85%
	Bonus Calculation	 	Base Salary x Weighted Result x Annual Target 
 Bonus = Bonus to be paid 
 $50,000 x 97.85% x 15% = $7,338.75







 









 






Who May Receive Bonus Payments in Common Stock?



For the C.E.O., C.F.O., President of the Company’s patent holding subsidiaries, other Senior
Officer and Vice President bands or functional equivalent positions, the Compensation Committee
may, in its discretion, pay up to 100% of the bonus in common or restricted stock pursuant to the
2009 Stock Incentive Plan, as amended. If common or restricted stock is to be paid in lieu of cash,
the number of shares to be granted will be calculated as follows:




	 	 	 	 	 	 	 

	 

	 	Number of Shares =
	 	Up to 100% of Bonus
 

Closing Common Stock Price on the
	 	 
	 

	 	 	 	Date Prior to the Grant as Reported in 	 	 
	 

	 	 	 	 the Wall Street Journal	 	 





The stock will be registered. The Company will not impose any other material restrictions (other
than those set out in the 2009 Stock Incentive Plan or required by law) or forfeiture provisions,
including no forfeiture provisions applicable to termination of employment.




Miscellaneous



The establishment of this Plan, any provisions of this Plan, and/or any action of the Compensation
Committee or any Company officer with respect to this Plan, does not confer upon any employee the
right to continued employment with the Company. The Company reserves the right to dismiss any
employee at will (at any time, with or without prior notice, with or without cause), or otherwise
deal with an employee to the same extent as though the Plan had not been adopted.



The Company may, at its discretion, provide for any federal, state or local income tax withholding
requirements and Social Security or other tax requirements applicable to the accrual of payment of
benefits under the Plan, and all such determinations shall be final and conclusive.



Payment of bonuses awarded under this Plan shall be made no later than March 15 of the year
following the Plan Year in which the services relating to such bonus award were rendered. The
resolution of any questions with respect to payments and entitlements pursuant to the provisions of
this Plan shall be determined by the Compensation Committee, in its sole discretion, and all such
determinations shall be final and conclusive.



This Plan may be terminated or revoked by the Compensation Committee, at its sole discretion, at
any time and amended by the Compensation Committee, at its sole discretion, from time to time
without the approval of any employee, provided that such action does not reduce the amount of any
Bonus payment below an amount equal to the amount that would have been payable to the eligible
employee with respect to the Plan Year in which the termination, revocation or amendment of the
Plan occurs under the terms of the Plan as in effect immediately prior to such termination,
revocation or amendment, applied on a pro rata basis.




October 2010 (effective beginning 2011 Plan Year)