I NTER D IGITAL C OMMUNICATIONS C ORPORATION
L ONG T ERM C OMPENSATION P ROGRAM
The Company implemented the Long Term Compensation Program (the “Program”) to encourage management and executive
level employees to continue to exercise their best efforts toward ensuring the success of the Company. All regular full-time or
regular part-time employees (as defined in the Employee Handbook) at or above a manager or technical equivalent level are
eligible to participate in the Program.
Compensation Components. As further described below, the Program consists of two compensation components: (1) a Long-
Term Incentive Plan providing performance-based cash bonuses (the “LTIP”), and (2) an award of restricted stock units
(“RSUs”) under the Company’s 1999 Restricted Stock Plan.
The LTIP component of the Program rewards grantees based on the Company’s achievement of performance goals
established/approved by the Compensation Committee of the Board of Directors (the “Compensation Committee”).
The RSU awards provide recipients with an opportunity to share in the growth of the Company’s value in the marketplace. An
RSU is a contractual right to receive a share(s) of InterDigital Common Stock after completion of a specified vesting period.
Program Cycle. The Program operates in cycles (the “Program cycle”). The first Program cycle began on April 1, 2004 and will
end on January 1, 2006. Subsequent Program cycles are intended to be overlapping three-year cycles, beginning January 1, 2005
and recurring every other year thereafter.
LTIP Cash Bonuses . The LTIP cash bonus targets are established based on a percentage of annual base salary and a payout
under the LTIP is based on the Company’s achievement of certain performance goals associated with each Program cycle,
established by the Compensation Committee at the start of each Program cycle. Your cash LTIP payout may exceed or be less
than your targeted amount depending on achievement of the performance goals, or no