exv10w1










EXHIBIT 10.1




InterDigital

Annual Employee Bonus Plan




Purpose




The Annual Employee Bonus Plan (“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 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 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 target bonus based on their level in the organization. The target bonus
is a percentage of the employee’s annual base salary actually paid during the Plan Year. Based on
the Company’s or Department’s level of achievement of certain annual business/departmental
objectives and the employee’s contributions toward the Company’s/Department’s goal achievement, the
employee will receive the appropriate payout under the Plan. Company or Department business
performance results will be measured based on either the Company’s Annual Goals, as approved 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 based on Departmental Goals, as approved by the Department
Head and the C.E.O, for all other levels of employees. If the actual results of the Company or
Department business performance for the year exceed or fall short of the targets, then the bonus
payout will be adjusted up or down, depending upon the level of business and individual
achievement. The specific adjustments and an example of how the bonus is calculated are described
below.




The business performance goals will be determined by the Compensation Committee for the C.E.O.,
C.F.O, President of the Company’s patent holding subsidiaries and other Sr. Officer levels, and the
business performance goals for each Department will be determined by the Department Head and C.E.O
and will be communicated to employees, normally in the first quarter of each Plan Year. The
assessment of individual performance will be determined by the Department Head based on the
employee’s contributions toward the achievement of the Departmental goals, generally subsumed in
their individual performance goals for the Plan Year. The business/department and individual
performance goals are intended to be reasonable “stretch” goals.




The Annual Target Bonus for each band, and the associated weighting factors, are as follows:






 




			
	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.




 









 










	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Band
(In the event a Participant changes
bands during the Plan Year, the Annual Target
 Bonus will be
calculated based on the Participant’s actual band at year-end)	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	Percentage of Bonus	 	 	 	 
	 	 	 	 	 	Related to Business	 	 	Percentage of Annual	 
	 	Annual Target	 	 	Performance	 	 	Target Bonus	 
	 	Bonus	 	 	(either Company	 	 	Related to Individual	 
	 	(% of base salary)	 	 	or Departmental)	 	 	Performance	 
	C.E.O.
	 	 	75	%	 	 	75	%	 	 	25	%
	C.F.O. / President of patent holding
subs
	 	 	50	%	 	 	75	%	 	 	25	%
	Other Sr. Officer
	 	 	40	%	 	 	75	%	 	 	25	%
	Functional VP
	 	 	35	%	 	 	75	%	 	 	25	%
	Senior Director
	 	 	25	%	 	 	75	%	 	 	25	%
	Director / Functional Equivalent
	 	 	20	%	 	 	75	%	 	 	25	%
	Senior Manager / Functional Equivalent
	 	 	15	%	 	 	75	%	 	 	25	%
	Manager / Functional Equivalent
	 	 	10	%	 	 	75	%	 	 	25	%
	Non-Management
	 	 	4%/6%/8% (based on position band)	 	 	 	75	%	 	 	25	%






In each Plan Year, the portion of the Annual Target Bonus related to business performance may be
allocated among a number of business 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
business/departmental performance and the portion attributable to individual performance. The
impact of actual results as compared to business/departmental and individual goals on any bonus to
be paid is described below.




Business 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 the established
business goals by a certain percentage (e.g., actual Company earnings exceed an established goal by
ten percent), then the payout of that portion of the annual target bonus related to that business
goal will be increased by that percentage amount above the goal, up to a maximum of a 100% increase
over the bonus associated with that goal. Thus, if actual Company/Department performance on a
particular goal exceeds the goal by 10%, then the target bonus associated with that goal will be
increased by 10% (see below):




	 	 	 	 	 
	Results	 	Percentage Payout	 
	101%
	 	 	101	%
	ò
	 	 	ò	 
	200%
	 	 	200	%






Results below the goal: If the actual business performance falls short of an established
goal by a certain percentage (e.g., actual Company earnings are 10% less than the earnings goal),
then the portion of the bonus associated with that business goal will be decreased by that
percentage of the shortfall, with no bonus being payable for a goal if the goal is missed by more
than 20%. The scale for results below the target is below:




	 	 	 	 	 
	 	 	Percentage	 
	Results	 	Payout	 
	100%
	 	 	100	%
	90%
	 	 	90	%
	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.




Individual Performance. 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 10% of base salary ($5,000). 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
	 	 	 	 	 	 	 	 	 	 	96	%	 	 	38.40	%
	 
	 	 	40	%	 	 	96	%	 	(1 to 1 ratio)	 	 	(96% x 40	%)
	Goal Two
	 	 	 	 	 	 	 	 	 	 	102	%	 	 	35.70	%
	 
	 	 	35	%	 	 	102	%	 	(1 to 1 ratio)	 	 	(102% x 35	%)
	Individual Performance
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	23.75	%
	 
	 	 	25	%	 	 	95	%	 	 	95	%	 	 	(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 10% = $4,892.50







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 Sr. Officer
and Functional Vice President bands or technical equivalent positions (i.e., “Fellow”), the
Compensation Committee may, in its discretion, pay up to 100% of the bonus in restricted common
stock pursuant to the 2009 Stock Incentive Plan, as amended. If restricted common 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.




March 2010