INTERDIGITAL, INC.
2009 STOCK INCENTIVE PLAN
The purpose of the
InterDigital, Inc. 2009 Stock Incentive Plan (the
“Plan”) is to advance the interests of InterDigital,
Inc. (the “Company”) by stimulating the efforts of
employees, officers, non-employee directors and other service
providers, in each case who are selected to be participants, by
heightening the desire of such persons to continue working toward
and contributing to the success and progress of the Company. Upon
approval by the Company’s shareholders, the Plan will
supersede the Company’s Prior Plans with respect to future
awards, and provides for the grant of Incentive and Nonqualified
Stock Options, Stock Appreciation Rights, Restricted Stock and
Restricted Stock Units, any of which may be performance-based, and
for Incentive Bonuses, which may be paid in cash or stock or a
combination thereof, as determined by the Administrator.
As used in the
Plan, the following terms shall have the meanings set forth
below:
(a) “Administrator”
means the Administrator of the Plan in accordance with
Section 19.
(b) “Award”
means an Incentive Stock Option, Nonqualified Stock Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit or
Incentive Bonus granted to a Participant pursuant to the provisions
of the Plan, any of which the Administrator may structure to
qualify in whole or in part as a Performance Award.
(c) “Award
Agreement” means a written agreement or other instrument as
may be approved from time to time by the Administrator implementing
the grant of each Award. An Agreement may be in the form of an
agreement to be executed by both the Participant and the Company
(or an authorized representative of the Company) or certificates,
notices or similar instruments as approved by the
Administrator.
(d) “Board”
means the board of directors of the Company.
(e) “Change
in Control” means the occurrence of any of the following
after the Effective Date:
(1) Any
“person,” as such term is used in Section 13(d) and
14(d) of the Exchange Act (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company, or any company owned, directly or indirectly, by
the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), acquires
voting securities of the Company and immediately thereafter is a
“50% Beneficial Owner.” For purposes of this provision,
a “50% Beneficial Owner” shall mean a person who is the
“beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
the
Company
representing 50% or more of the combined voting power of the
Company’s then-outstanding voting securities; or
(2) During any
period of two consecutive years commencing on or after the
Effective Date, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director
designated by a person (as defined above) who has entered into an
agreement with the Company to effect a transaction described in
subsections (1), (3), (4) or (5) of this definition)
whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any
reason to constitute at least a majority thereof; or
(3) The
consummation of a merger, consolidation, recapitalization, or
reorganization of the Company, or a reverse stock split of any
class of voting securities of the Company, other than any such
transaction which would result in at least 50% of the combined
voting power of the voting securities of the Company or the
surviving entity outstanding immediately after such transaction
being beneficially owned by the persons who were shareholders of
the Company immediately prior to the transaction in substantially
the same proportion as their ownership of the voting power
immediately prior to the transaction; provided that, for purposes
of this Section 2(f)(3), such continuity of ownership (and
preservation of relative voting power) shall be deemed to be
satisfied if the failure to meet such 50% threshold (or to
substantially preserve such relative ownership of the voting
securities) is due solely to the acquisition of voting securities
by an employee benefit plan of the Company, such surviving entity
or a subsidiary thereof; or
(4) The
shareholders of the Company accept shares in a share exchange in
which 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 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; or
(5) The
shareholders of the Company have approved a plan of complete
liquidation of the Company; or
(6) The
consummation of a sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction
having a similar effect).
(f) “Code”
means the Internal Revenue Code of 1986, as amended from time to
time, and the rulings and regulations issues thereunder.
(g) “Common
Stock” means the Company’s common stock, par value
$.01, subject to adjustment as provided in
Section 12.
(h) “Company”
means InterDigital, Inc., a Pennsylvania corporation.
2
(i) “Detrimental
Activity” with respect to a Participant means that such
Participant:
(1) Has engaged in
any type of disloyalty to the Company, including without
limitation, insubordination, fraud, embezzlement, theft or
dishonesty in the course of his or her employment or engagement;
or
(2) Has been
convicted of a felony; or
(3) Has disclosed
any confidential or proprietary information without the consent of
the Company; or
(4) Has breached
the terms of any written confidentiality agreement or any
non-competition agreement with the Company in any material
respect.
(j) “Exchange
Act” means the Securities Exchange Act of 1934, as amended
from time to time.
(k) “Fair
Market Value” means the fair market value of Common Stock,
Awards or other property as determined by the Administrator or
under procedures established by the Administrator. The Fair Market
Value of Shares shall be the closing sale price reported on the
composite tape of the principal stock exchange on which the Shares
are listed on the day as of which such value is being determined
or, if there is no sale on that day, then on the last previous day
on which a sale was reported.
(l) “Incentive
Bonus” means a bonus opportunity awarded under Section 9
pursuant to which a Participant may become entitled to receive an
amount based on satisfaction of such performance criteria as are
specified in the Award Agreement.
(m) “Incentive
Stock Option” means a stock option that is intended to
qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
(n) “Nonemployee
Director” means each person who is, or is elected to be, a
member of the Board and who is not an employee of the Company or
any Subsidiary.
(o) “Nonqualified
Stock Option” means a stock option that is not intended to
qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
(p) “Option”
means an Incentive Stock Option and/or a Nonqualified Stock Option
granted pursuant to Section 6 of the Plan.
(q) “Participant”
means any individual described in Section 3 to whom Awards
have been granted from time to time by the Administrator and any
authorized transferee of such individual.
(r) “Performance
Award” means an Award, the grant, issuance, retention,
vesting or settlement of which is subject to satisfaction of one or
more Qualifying Performance Criteria established pursuant to
Section 14.
3
(s) “Plan”
means the InterDigital, Inc. 2009 Stock Incentive Plan as set forth
herein and as amended from time to time.
(t) “Prior
Plans” means the InterDigital Communications Corporation 1999
Restricted Stock Plan, the InterDigital Communications Corporation
2000 Stock Award and Incentive Plan and the InterDigital
Communications Corporation 2002 Stock Award and Incentive
Plan.
(u) “Qualifying
Performance Criteria” has the meaning set forth in
Section 14(b).
(v) “Restricted
Stock” means Shares granted pursuant to Section 8 of the
Plan.
(w) “Restricted
Stock Unit” means an Award granted to a Participant pursuant
to Section 8 pursuant to which Shares or cash in lieu thereof
may be issued in the future.
(x) “Share”
means a share of the Common Stock, subject to adjustment as
provided in Section 12.
(y) “Stock
Appreciation Right” means a right granted pursuant to
Section 7 of the Plan that entitles the Participant to
receive, in cash or Shares or a combination thereof, as determined
by the Administrator, value equal to or otherwise based on the
excess of (i) the Fair Market Value of a specified number of
Shares at the time of exercise over (ii) the exercise price of
the right, as established by the Administrator on the date of
grant.
(z) “Subsidiary”
means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company where each of the
corporations in the unbroken chain other than the last corporation
owns stock possessing at least 50 percent or more of the total
combined voting power of all classes of stock in one of the other
corporations in the chain, and if specifically determined by the
Administrator in the context other than with respect to Incentive
Stock Options, may include an entity in which the Company has a
significant ownership interest or that is directly or indirectly
controlled by the Company.
(aa) “Termination
of Employment” means ceasing to serve as a full-time employee
of the Company and its Subsidiaries or, with respect to a
Nonemployee Director or other service provider, ceasing to serve as
such for the Company, except that with respect to all or any Awards
held by a Participant (i) the Administrator may determine,
subject to Section 6(d), that an approved leave of absence or
approved employment on a less than full-time basis is not
considered a Termination of Employment, (ii) the Administrator
may determine that a transition of employment to service with a
partnership, joint venture or corporation not meeting the
requirements of a Subsidiary in which the Company or a Subsidiary
is a party is not considered a Termination of Employment,
(iii) service as a member of the Board or other service
provider shall constitute continued employment with respect to
Awards granted to a Participant while he or she served as an
employee and (iv) service as an employee of the Company or a
Subsidiary shall constitute continued employment with respect to
Awards granted to a Participant while he or she served as a member
of the Board or other service provider. The Administrator shall
determine whether any corporate transaction, such as a sale or
spin-off of a division or subsidiary that employs a Participant,
shall be deemed to result in a Termination of Employment with
the
4
Company and its
Subsidiaries for purposes of any affected Participant’s
Options, and the Administrator’s decision shall be final and
binding.
Any person who is
a current or prospective officer or employee of the Company or of
any Subsidiary shall be eligible for selection by the Administrator
for the grant of Awards hereunder. In addition, Nonemployee
Directors and any other service providers who have been retained to
provide consulting, advisory or other services to the Company or to
any Subsidiary shall be eligible for the grant of Awards hereunder
as determined by the Administrator. Options intending to qualify as
Incentive Stock Options may only be granted to employees of the
Company or any Subsidiary within the meaning of the Code, as
selected by the Administrator.
4. Effective
Date and Termination of Plan
This Plan was
adopted by the Board as of April 27, 2009, and it will become
effective (the “Effective Date”) when it is approved by
the Company’s shareholders at a meeting of the
Company’s shareholders or by written consent in accordance
with the laws of the Commonwealth of Pennsylvania, which approval
must be obtained within twelve (12) months of the adoption of
this Plan by the Board. The Plan shall remain available for the
grant of Awards until the tenth (10th) anniversary of the Effective
Date. Notwithstanding the foregoing, the Plan may be terminated at
such earlier time as the Board may determine. Termination of the
Plan will not affect the rights and obligations of the Participants
and the Company arising under Awards theretofore granted and then
in effect.
5. Shares
Subject to the Plan and to Awards
(a)
Aggregate Limits . The aggregate number of Shares issuable
pursuant to all Awards shall not exceed 2,114,439, plus
(i) any Shares that were authorized for issuance under the
Prior Plans that, as of the Effective Date, remain available for
issuance under the Prior Plans (not including any Shares that are
subject to, as of the Effective Date, outstanding awards under the
Prior Plans or any Shares that prior to the Effective Date were
issued pursuant to awards granted under the Prior Plans) and
(ii) any Shares subject to outstanding awards under the Prior
Plans as of the Effective Date (the “Prior Plan
Awards”) that on or after such date cease for any reason to
be subject to such awards (other than by reason of exercise or
settlement of the awards to the extent they are exercised for or
settled in vested and nonforfeitable shares). The aggregate number
of Shares available for grant under this Plan and the number of
Shares subject to outstanding Awards shall be subject to adjustment
as provided in Section 12. The Shares issued pursuant to
Awards granted under this Plan may be shares that are authorized
and unissued or shares that were reacquired by the Company,
including shares purchased in the open market.
(b)
Issuance of Shares . For purposes of Section 5(a), the
aggregate number of Shares issued under this Plan at any time shall
equal only the number of Shares actually issued upon exercise or
settlement of an Award. The aggregate number of Shares available
for Awards under this Plan at any time shall not be reduced by
(i) Shares subject to Awards that have been terminated,
expired unexercised, forfeited or settled in cash, (ii) Shares
subject to Awards (or Prior Plan Awards) that have been retained or
withheld by the Corporation in payment or
5
satisfaction of
the exercise price, purchase price or tax withholding obligation of
an Award (or Prior Plan Award), or (iii) Shares subject to
Awards (or Prior Plan Awards) that otherwise do not result in the
issuance of Shares in connection with payment or settlement
thereof. In addition, Shares that have been delivered (either
actually or by attestation) to the Company in payment or
satisfaction of the exercise price, purchase price or tax
withholding obligation of an Award (or Prior Plan Award) shall be
available for Awards under this Plan.
(c) Tax
Code Limits . In each calendar year a Participant may be
granted Awards under this Plan denominated in Shares relating up to
his or her Annual Share Limit. A Participant’s Annual Share
Limit, in any calendar year, shall equal 300,000 Shares plus the
amount of the Participant’s unused Annual Share Limit as of
the close of the previous year, which number shall be calculated
and adjusted pursuant to Section 12 only to the extent that
such calculation or adjustment will not affect the status of any
Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code but which
number shall not count any tandem SARs (as defined in
Section 7). In each calendar year a Participant may be granted
Awards under this Plan denominated in cash (and not Shares)
relating up to his or her Annual Cash Limit. A Participant’s
Annual Cash Limit, in any calendar year, shall equal
$1.5 million plus the amount of the Participant’s unused
Annual Cash Limit as of the close of the previous year. The
aggregate number of Shares that may be issued pursuant to the
exercise of Incentive Stock Options granted under this Plan shall
not exceed 3,000,000, which number shall be calculated and adjusted
pursuant to Section 12 only to the extent that such
calculation or adjustment will not affect the status of any option
intended to qualify as an Incentive Stock Option under
Section 422 of the Code.
(a)
Option Awards . Options may be granted at any time and from
time to time prior to the termination of the Plan to Participants
as determined by the Administrator. No Participant shall have any
rights as a shareholder with respect to any Shares subject to
Options hereunder until said Shares have been issued. Each Option
shall be evidenced by an Award Agreement. Options granted pursuant
to the Plan need not be identical but each Option must contain and
be subject to the terms and conditions set forth below.
(b)
Price . The Administrator will establish the exercise price
per Share under each Option, which, in no event will be less than
the Fair Market Value of the Shares on the date of grant; provided,
however, that the exercise price per Share with respect to an
Option that is granted in connection with a merger or other
acquisition as a substitute or replacement award for options held
by optionees of the acquired entity may be less than 100% of the
Fair Market Value of the Shares on the date such Option is granted
if such exercise price is based on a formula set forth in the terms
of the options held by such optionees or in the terms of the
agreement providing for such merger or other acquisition. The
exercise price of any Option may be paid in Shares, cash or a
combination thereof, as determined by the Administrator, including
an irrevocable commitment by a broker to pay over such amount from
a sale of the Shares issuable under an Option, the delivery of
previously owned Shares and withholding of Shares deliverable upon
exercise.
6
(c) No
Repricing without Shareholder Approval . Other than in
connection with a change in the Company’s capitalization (as
described in Section 12) the exercise price of an Option may
not be reduced without shareholder approval (including canceling
previously awarded Options in exchange for cash, other Awards or
Options or Stock Appreciation Rights with an exercise price that is
less than the exercise price of the original Award).
(d)
Provisions Applicable to Options . The date on which Options
become exercisable shall be determined at the sole discretion of
the Administrator and set forth in an Award Agreement. Unless
provided otherwise in the applicable Award Agreement, to the extent
that the Administrator determines that an approved leave of absence
is not a Termination of Employment, the vesting period and/or
exercisability of an Option shall be adjusted by the Administrator
during or to reflect the effects of any period during which the
Participant is on an approved leave of absence or is employed on a
less than full-time basis. The Administrator shall establish the
term of each Option, which in no case shall exceed a period of
10 years from the date of grant.
(e)
Incentive Stock Options . Notwithstanding anything to the
contrary in this Section 6, in the case of the grant of an
Option intending to qualify as an Incentive Stock Option:
(i) if the Participant owns stock possessing more than
10 percent of the combined voting power of all classes of
stock of the Company (a “10% Shareholder”), the
exercise price of such Option must be at least 110 percent of
the Fair Market Value of the Shares on the date of grant and the
Option must expire within a period of not more than five
(5) years from the date of grant, and (ii) Termination of
Employment will occur when the person to whom an Award was granted
ceases to be an employee (as determined in accordance with Section
3401(c) of the Code and the regulations promulgated thereunder) of
the Company and its Subsidiaries. Notwithstanding anything in this
Section 6 to the contrary, options designated as Incentive
Stock Options shall not be eligible for treatment under the Code as
Incentive Stock Options (and will be deemed to be Nonqualified
Stock Options) to the extent that either (1) the aggregate
Fair Market Value of Shares (determined as of the time of grant)
with respect to which such Options are exercisable for the first
time by the Participant during any calendar year (under all plans
of the Company and any Subsidiary) exceeds $100,000, taking Options
into account in the order in which they were granted, or
(2) such Options otherwise remain exercisable but are not
exercised within 3 months of Termination of Employment (or
such other period of time provided in Section 422 of the
Code).
7. Stock
Appreciation Rights
Stock Appreciation
Rights may be granted to Participants from time to time either in
tandem with or as a component of other Awards granted under the
Plan (“tandem SARs”) or not in conjunction with other
Awards (“freestanding SARs”) and may, but need not,
relate to a specific Option granted under Section 6. The
provisions of Stock Appreciation Rights need not be the same with
respect to each grant or each recipient. Any Stock Appreciation
Right granted in tandem with an Award may be granted at the same
time such Award is granted or at any time thereafter before
exercise or expiration of such Award. All freestanding SARs shall
be granted subject to the same terms and conditions applicable to
Options as set forth in Section 6 and all tandem SARs shall
have the same exercise price, vesting, exercisability, forfeiture
and termination provisions as the Award to which they relate.
Subject to the provisions of Section 6
7
and the
immediately preceding sentence, the Administrator may impose such
other conditions or restrictions on any Stock Appreciation Right as
it shall deem appropriate. Stock Appreciation Rights may be settled
in Shares, cash or a combination thereof, as determined by the
Administrator and set forth in the applicable Award
Agreement.
8.
Restricted Stock and Restricted Stock Units
(a)
Restricted Stock and Restricted Stock Unit Awards .
Restricted Stock and Restricted Stock Units may be granted at any
time and from time to time prior to the termination of the Plan to
Participants as determined by the Administrator. Restricted Stock
is an award or issuance of Shares the grant, issuance, retention,
vesting and/or transferability of which is subject during specified
periods of time to such conditions (including continued employment
or performance conditions) and terms as the Administrator deems
appropriate. Restricted Stock Units are Awards denominated in units
of Shares under which the issuance of Shares is subject to such
conditions (including continued employment or performance
conditions) and terms as the Administrator deems appropriate. Each
grant of Restricted Stock and Restricted Stock Units shall be
evidenced by an Award Agreement. Unless determined otherwise by the
Administrator, each Restricted Stock Unit will be equal to one
Share and will entitle a Participant to either the issuance of
Shares or payment of an amount of cash determined with reference to
the value of Shares. Restricted Stock and Restricted Stock Units
granted pursuant to the Plan need not be identical but each grant
of Restricted Stock and Restricted Stock Units must contain and be
subject to the terms and conditions set forth below.
(b)
Contents of Agreement . Each Award Agreement shall contain
provisions regarding (i) the number of Shares or Restricted
Stock Units subject to such Award or a formula for determining such
number, (ii) the purchase price of the Shares, if any, and the
means of payment, (iii) the performance criteria, if any, and
level of achievement versus these criteria that shall determine the
number of Shares or Restricted Stock Units granted, issued,
retainable and/or vested, (iv) such terms and conditions on
the grant, issuance, vesting and/or forfeiture of the Shares or
Restricted Stock Units as may be determined from time to time by
the Administrator, (v) the term of the performance period, if
any, as to which performance will be measured for determining the
number of such Shares or Restricted Stock Units, and
(vi) restrictions on the transferability of the Shares or
Restricted Stock Units. Shares issued under a Restricted Stock
Award may be issued in the name of the Participant and held by the
Participant or held by the Company, in each case as the
Administrator may provide.
(c)
Vesting and Performance Criteria . The grant, issuance,
retention, vesting and/or settlement of shares of Restricted Stock
and Restricted Stock Units will occur when and in such installments
as the Administrator determines or under criteria the Administrator
establishes, which may include Qualifying Performance Criteria.
Notwithstanding anything in this Plan to the contrary, the
performance criteria for any Restricted Stock or Restricted Stock
Unit that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m)
of the Code will be a measure based on one or more Qualifying
Performance Criteria selected by the Administrator and specified
when the Award is granted.
|
