InterDigital
Annual Employee Bonus
Plan
This 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.
All regular
full-time or part-time employees 1 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) received an individual
performance appraisal rating of less than “2.75” (Meets
Job Requirements) for 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.
Each employee
is assigned a target bonus. The target bonus is a percentage of the
employee’s annual base salary in effect as of the end of the
Plan Year. If the Company or Department achieves certain business
performance results and the employee achieves certain individual
goals, then the employee will receive the target bonus. Company or
Department business performance results will be measured based on
either the Company’s Annual Goals, as
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1
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“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).
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2
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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.
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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 target bonus
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 the
employees, normally in the first quarter of each Plan Year. The
assessment of individual performance goals will be accomplished
through the employee’s annual performance rating. The
business and individual performance goals are intended to be
reasonable “stretch” goals.
The impact of
actual business/departmental or individual performance during the
Plan Year on the bonus paid varies between positions, with the
bonus for the Company officers and senior level management
employees being more dependent upon overall Company/Department
performance, while the bonuses for lower level management and
non-management employees being more dependent upon individual
performance. The relative weighting of the business/departmental
and individ
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