EXHIBIT 10.1
InterDigital, Inc.
Amended Executive Severance and Change in Control Policy
This Executive Severance and Change in Control Policy (the “Policy”) is designed to provide certain protections to a select group of key employees of InterDigital, Inc. (“InterDigital” or the “Company”) or any of its subsidiaries in connection with a change in control of InterDigital or if in connection with the involuntary termination of their employment under the circumstances described in this Policy. The Policy is designed to be an “employee welfare benefit plan” (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), and this document is both the formal plan document and the required summary plan description for the Policy.
Term: This Policy will have an initial term of three years commencing on the Effective Date (the “Initial Term”). On the third anniversary of the Effective Date (as defined below) and each anniversary thereafter, this Policy will renew automatically for additional one year terms (each an “Additional Term” and the then-current Initial Term or an Additional Term, as applicable, the “Term”), unless the Company provides each Eligible Employee written notice of non-renewal at least 30 days prior to the date of automatic renewal (such period of time, the “Renewal Deadline”). Notwithstanding the foregoing provisions, if (a) a Change in Control occurs when there are fewer than 12 months remaining during the Initial Term or an Additional Term, the term of this Policy will extend automatically through the date that is 12 months following the effective date of the Change in Control, or (b) if an initial occurrence of an act or omission by the Company constituting the grounds for Good Reason (as defined below) has occurred (the “Initial Grounds”), and the expiration date of the Cure Period (as defined below) with respect to such Initial Grounds could occur following the expiration of the Initial Term or an Additional Term, then the term of this Policy with respect to an Eligible Employee with Initial Grounds will extend automatically through the date that is 30 days following the expiration of such cure period, but such extension of the term shall only apply with respect to the Initial Grounds. If an Eligible Employee becomes entitled to benefits under this Policy during the term of this Policy, the Policy will not terminate until all of the obligations of the parties hereto with respect to this Policy have been satisfied. For clarity, an election by the Company not to renew this Policy for an Additional Term will not be deemed to be a termination of an Eligible Employee’s employment without Cause or grounds for a resignation for Good Reason and, accordingly, Eligible Employee will not be eligible for severance benefits set forth herein.
Eligible Employee: An individual is only eligible for protection under this Policy if he or she is an Eligible Employee and complies with its terms (including any terms in the employee’s Participation Agreement (as defined below)). To be an “Eligible Employee,” an employee must (a) have been designated by the Compensation Committee of the Board (the “Compensation Committee”) as eligible to participate in the Policy and (b) have executed a participation agreement in the form attached hereto as Exhibit A (a “Participation Agreement”).
Policy Benefits: An Eligible Employee will be eligible to receive the payments and benefits set forth in this Policy and his or her Participation Agreement if his or her employment with the Company or any of its subsidiaries terminates as a result of a Qualified Termination. The amount and terms of any Equity Vesting, Salary Severance, Bonus Severance, COBRA Payment, and Outplacement Services that an Eligible Employee may receive on his or her Qualified Termination will depend on whether his or her Qualified Termination is a COC Qualified Termination or a Non-COC Qualified Termination. All benefits under this Policy payable on a Qualified Termination will be subject to the Eligible Employee’s compliance with the Release Requirement and any timing modifications required to avoid adverse taxation under Section 409A.
Equity Vesting: An Eligible Employee’s acceleration of vesting of Company equity awards upon a Qualified Termination or otherwise will continue to be governed by the Eligible Employee’s equity award agreements (each such agreement, an “Equity Award Agreement”) under the applicable Company equity incentive plan (each, a “Plan”).
Salary Severance: On a Qualified Termination, an Eligible Employee will be eligible to receive salary severance payment(s) equal to the applicable percentage (set forth in his or her Participation Agreement) of his or her Base Salary (“Salary Severance”). The Eligible Employee’s salary severance payment(s) will be paid in cash at the time(s) specified in his or her Participation Agreement.
Bonus Severance: On a Qualified Termination, an Eligible Employee will be eligible to receive bonus severance payment(s) with respect to any annual bonus set forth in his or her Participation Agreement in the applicable percentage set forth in his or her Participation Agreement (“Bonus Severance”). The Eligible Employee’s Bonus Severance payment(s) will be paid in cash at the time(s) specified in his or her Participation Agreement.
COBRA Payment: Upon a Qualified Termination, the Company will either (i) pay, on behalf of Eligible Employee, the cost of COBRA continuation coverage for the Eligible Employee and any eligible dependents there were covered under the Company’s health care plans immediately prior to the date of his or her Qualified Termination for the applicable period set forth in the Eligible Employees’ Participation Agreement or (ii) pay the Eligible Employee a lump-sum cash payment equal to 1.5 times of the cost of COBRA continuation coverage for the Eligible Employee and any eligible dependents that were covered under the Company’s health care plans immediately prior to the date of his or her eligible Qualified Termination through the end of the applicable period set forth in the Eligible Employee’s Participation Agreement.
Outplacement Services: On a Qualified Termination, an Eligible Employee will be eligible to receive reasonable outplacement services in accordance with any applicable Company policy in effect as of the Qualified Termination (or if no such policy is in effect, as determined by the Company, in its sole discretion, provided that such outplacement services are provided by qualified consultants selected by the Company, at the Company’s expense, in an amount not to exceed $10,000) (“Outplacement Services”).
Death of Eligible Employee: If the Eligible Employee dies before all payments or benefits he or she is entitled to receive under this Policy have been paid, such unpaid amounts will be paid to his or her designated beneficiary, if living, or otherwise to his or her personal representative in a lump-sum payment as soon as possible following his or her death.
Recoupment: If the Company discovers after the Eligible Employee’s receipt of payments or benefits under this Policy that grounds for the termination of the Eligible Employee’s employment for Cause existed, then the Eligible Employee will not receive any further payments or benefits under this Policy and, to the extent permitted under applicable laws, will be required to repay to the Company any payments or benefits he or she received under the Policy (or any financial gain derived from such payments or benefits).
Release: The Eligible Employee’s receipt of any severance payments or benefits upon his or her Qualified Termination under this Policy is subject to (i) the Eligible Employee’s continued compliance with the terms of his or her Nondisclosure and Assignment of Ideas Agreement (the “Covenants Agreement”), and (ii) the Eligible Employee signing and not revoking the Company’s then-standard separation agreement and release of claims (which may include an agreement not to disparage the Company, non-solicit provisions, and other standard restrictive covenants, terms and conditions) (the “Release” and such requirement, the “Release Requirement”), which must become effective and irrevocable no later than the 60th day following the Eligible Employee’s Qualified Termination (the “Release Deadline”). If the Release does not become effective and irrevocable by the Release Deadline, the Eligible Employee will forfeit any right to severance payments or benefits under this Policy. In no event will severance payments or benefits under the Policy be paid or provided until the Release actually becomes effective and irrevocable. Notwithstanding any other payment schedule set forth in this Policy or the Eligible Employee’s Participation Agreement, none of the severance payments and benefits payable upon such Eligible Employee’s Qualified Termination under this Policy will be paid or otherwise provided prior to the 60th day following the Eligible Employee’s Qualified Termination. Except as otherwise set forth in an Eligible Employee’s Participation Agreement or to the extent that payments are delayed under the paragraph below entitled “Section 409A,” on the first regular payroll pay day following the 60th day following the Eligible Employee’s Qualified Termination, the Company will pay or commence to pay the Eligible Employee the severance payments and benefits that the Eligible Employee would otherwise have received under this Policy on or prior to such date, with the balance of such severance payments and benefits being paid or provided as originally scheduled. Any installment payments that would have been made to an Eligible Employee during the 60 day period immediately following an Eligible Employee’s separation from service but for the preceding sentence will be paid to an Eligible Employee on the first Company payroll following the Release Deadline and the remaining payments will be made as provided in this Policy.
Section 409A: The Company intends that all payments and benefits provided under this Policy or otherwise are exempt from, or comply with, the requirements of Section 409A of the Code and any guidance promulgated thereunder (collectively, “Section 409A”) so that none of the payments or benefits will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted in accordance with this intent. No payment or benefits to be paid to an Eligible Employee, if any, under this Policy or otherwise, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until such Eligible Employee has a “separation from service” within the meaning of Section 409A. If, at the time of the Eligible Employee’s termination of employment, the Eligible Employee is a “specified employee” within the meaning of Section 409A, then the payment of the Deferred Payments will be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that the Eligible Employee will receive payment on the first payroll date that occurs on or after the date that is 6 months and 1 day following his or her termination of employment. The Company reserves the right to amend the Policy as it deems necessary or advisable, in its sole discretion and without the consent of any Eligible Employee or any other individual, to comply with any provision required to avoid the imposition of the additional tax imposed under Section 409A or to otherwise avoid income recognition under Section 409A prior to the actual payment of any benefits or imposition of any additional tax. Each payment, installment, and benefit payable under this Policy is intended to constitute a separate payment for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2). In no event will the Company reimburse any Eligible Employee for any taxes that may be imposed on him or her as a result of Section 409A.
Parachute Payments:
Reduction of Severance Benefits. Notwithstanding anything set forth herein to the contrary, if any payment or benefit that an Eligible Employee would receive from the Company or any other party whether in connection with the provisions herein or otherwise (the “Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Best Results Amount. The “Best Results Amount” will be either (x) the full amount of such Payment or (y) such lesser amount as would result in no portion of the Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local employment taxes, income taxes and the Excise Tax, results in the Eligible Employee’s receipt, on an after-tax basis, of the greater amount notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting parachute payments is necessary so that the Payment equals the Best Results Amount, reduction will occur in the following order: reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Eligible Employee’s equity awards unless the Eligible Employee elects in writing a different order for cancellation. The Eligible Employee will be solely responsible for the payment of all personal tax liability that is incurred as a result of the payments and benefits received under this Policy, and the Eligible Employee will not be reimbursed by the Company for any such payments.
Determination of Excise Tax Liability. The Company will select a professional services firm to make all of the determinations required to be made under these paragraphs relating to parachute payments. The Company will request that firm provide detailed supporting calculations both to the Company and the Eligible Employee prior to the date on which the event that triggers the Payment occurs if administratively feasible, or subsequent to such date if events occur that result in parachute payments to the Eligible Employee at that time. For purposes of making the calculations required under these paragraphs relating to parachute payments, the firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith determinations concerning the application of the Code. The Company and the Eligible Employee will furnish to the firm such information and documents as the firm may reasonably request in order to make a determination under these paragraphs relating to parachute payments. The Company will bear all costs the firm may reasonably incur in connection with any calculations contemplated by these paragraphs relating to parachute payments. Any such determination by the firm will be binding upon the Company and the Eligible Employee, and the Company will have no liability to the Eligible Employee for the determinations of the firm.
Administration: The Policy will be administered by the Compensation Committee or its delegate (in each case, a “Plan Administrator”). The Plan Administrator will have full discretion to administer and interpret the Policy. Any decision made or other action taken by the Plan Administrator with respect to the Policy and any interpretation by the Plan Administrator of any term or condition of the Policy, or any related document, will be conclusive and binding on all persons and be given the maximum possible deference allowed by law. The Plan Administrator is the “plan administrator” of the Policy for purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity.
Attorneys Fees: The Company and each Eligible Employee will bear their own attorneys’ fees incurred in connection with any disputes between them.
Exclusive Benefits: Except as may be set forth in an Eligible Employee’s Participation Agreement, this Policy is intended to be the only agreement between the Eligible Employee and the Company regarding any change in control or severance payments or benefits (other than any acceleration of equity which shall continue to be governed by the Equity Award Agreements) to be paid to the Eligible Employee on account of a termination of employment whether unrelated to, concurrent with, or following, a Change in Control. Accordingly, by executing a Participation Agreement, an Eligible Employee hereby forfeits and waives any rights to any severance or change in control benefits set forth in any employment agreement, offer letter, and/or the Company’s Severance Pay Plan, except as set forth in this Policy, the Eligible Employee’s Participation Agreement and the Equity Award Agreements.
Tax Withholding: All payments and benefits under this Policy will be paid less applicable withholding taxes. The Company or the subsidiary employing the Eligible Employee, as applicable, is authorized to withhold from any payments or benefits all federal, state, local and/or non-U.S. taxes required to be withheld therefrom and any other required payroll deductions. The Company or the subsidiary employing the Eligible Employee, as applicable, will not pay, reimburse Eligible Employee for, or be liable or responsible for any of Eligible Employee’s taxes arising from or relating to any payments or benefits under this Policy; instead, any such taxes will be solely the responsibility of Eligible Employee.
Amendment or Termination: The Compensation Committee may amend or terminate the Policy at any time, without advance notice to any Eligible Employee or other individual and without regard to the effect of the amendment or termination on any Eligible Employee or on any other individual. Notwithstanding the preceding, no amendment or termination of the Policy will be made if such amendment or termination would reduce the benefits provided hereunder or impair an Eligible Employee’s eligibility under the Policy (unless the affected Eligible Employee consents to such amendment or termination), except that the Compensation Committee may unilaterally and without consent of any Eligible Employee make any such amendments that are necessary or appropriate to comply with applicable laws. For clarity, an action by the Plan Administrator not to renew the Policy in accordance with the Term provision above will not be an action that requires an Eligible Employee’s consent. Further, an action to amend the Policy in a given Term that is effective as of the commencement of an Additional Term will not be an action that requires an Eligible Employee’s consent. Any action to amend or terminate the Policy will be taken in a non-fiduciary capacity.
Claims Procedure: Any Eligible Employee who believes he or she is entitled to any payment under the Policy may submit a claim in writing to the Plan Administrator. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Policy on which the denial is based. The notice will also describe any additional information needed to support the claim and the Policy’s procedures for appealing the denial. The denial notice will be provided within 90 days after the claim is received. If special circumstances require an extension of time (up to 90 days), written notice of the extension will be given within the initial 90-day period. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the claim.
Appeal Procedure: If the claimant’s claim is denied, the claimant (or his or her authorized representative) may apply in writing to the Plan Administrator for a review of the decision denying the claim. Review must be requested within 60 days following the date the claimant received the written notice of their claim denial or else the claimant loses the right to review. The claimant (or representative) then has the right to review and obtain copies of all documents and other information relevant to the claim, upon request and at no charge, and to submit issues and comments in writing. The Plan Administrator will provide written notice of the decision on review within 60 days after it receives a review request. If additional time (up to 60 days) is needed to review the request, the claimant (or representative) will be given written notice of the reason for the delay. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Plan Administrator expects to render its decision. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Policy on which the denial is based. The notice will also include a statement that the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant to the claim and a statement regarding the claimant’s right to bring an action under Section 502(a) of ERISA.
Successors: Any successor to the Company of all or substantially all of the Company’s business and/or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or other transaction) will assume the obligations under the Policy and agree expressly to perform the obligations under the Policy in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under the Policy, the term “Company” will include any successor to the Company’s business and/or assets which becomes bound by the terms of the Policy by operation of law, or otherwise.
Applicable Law: The provisions of the Policy will be construed, administered, and enforced in accordance with ERISA and, to the extent applicable, the internal substantive laws of the state of Delaware (but not its conflict of laws provisions).
Definitions: Unless otherwise defined in an Eligible Employee’s Participation Agreement, the following terms will have the following meanings for purposes of this Policy and the Eligible Employee’s Participation Agreement:
“Base Salary” means the Eligible Employee’s annual base salary as in effect immediately prior to his or her Qualified Termination (or if such Qualified Termination is due to a resignation for Good Reason based on a material reduction in base salary, then the Eligible Employee’s annual base salary in effect immediately prior to such reduction) or, if such Qualified Termination is a COC Qualified Termination and such amount is greater, at the level in effect immediately prior to the Change in Control.
“Board” means the Board of Directors of the Company.
“Cause” means (i) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of the Eligible Employee with respect to the Eligible Employee’s obligations or otherwise relating to the business of the Company; (ii) the Eligible Employee’s material breach of this Agreement or the Covenants Agreement; (iii) the Eligible Employee’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, any felony, or any crime of moral turpitude; or (iv) the Eligible Employee’s willful neglect of duties as determined in the sole and exclusive discretion of the Company (or in the case of the Company’s Chief Executive Officer, in the sole and exclusive discretion of the Board).
“Change in Control” has the same defined meaning as set forth in the Company’s 2017 Equity Incentive Plan, as amended from time to time.
“Change in Control Period” will mean the period beginning upon a Change in Control and ending 12 months following a Change in Control.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code” means the Internal Revenue Code of 1986, as amended.
“Disability” means the total and permanent disability as defined in Section 22(e)(3) of the Code unless the Company maintains a long-term disability plan at the time of the Eligible Employee’s termination, in which case, the determination of disability under such plan also will be considered “Disability” for purposes of this Policy.
“Effective Date” means the date this Policy was approved by the Compensation Committee.
“Good Reason” means the Eligible Employee’s termination of his or her employment in accordance with the next sentence after the occurrence of one or more of the following events without the Eligible Employee’s express written consent: (i) a material diminution in the Eligible Employee’s base salary or in the Eligible Employee’s target bonus opportunity under the incentive plan as in effect for the year in which the termination occurs; (ii) a material diminution in the Eligible Employee’s title, authority, duties or responsibilities; (iii) a material failure to comply with payment of Eligible Employee’s compensation; (iv) relocation of the Eligible Employee’s primary office more than 50 miles from the Eligible Employee’s current office; or (v) any other action or inaction that constitutes a material breach by the Company of the Policy or the Covenants Agreement. For purposes of this Policy, Good Reason shall only exist if the Eligible Employee provides a notice of termination for Good Reason to the Company within ninety (90) days after the initial existence of such grounds and the Company has had sixty (60) days from the date on which such notice is provided to cure such circumstances. If the Eligible Employee does not terminate his or her employment for Good Reason within sixty (60) days following the end of such sixty (60) day period within which the Company was entitled to remedy the course of conduct constituting Good Reason but failed to do so, then the Eligible Employee shall be deemed to have waived his or her right to terminate for Good Reason with respect to such grounds.
“Qualified Termination” means a termination of the Eligible Employee’s employment (i) either (A) by the Company other than for Cause, death, or Disability or (B) by the Eligible Employee for Good Reason, in either case, during the Change in Control Period (a “COC Qualified Termination”) or (ii) outside of the Change in Control Period by the Company other than for Cause, death, or Disability (a “Non-COC Qualified Termination”).
Additional Information:
| | | | | | | | |
Plan Name: | | InterDigital, Inc. Executive Severance and Change in Control Policy |
| | |
| Plan Sponsor: | | InterDigital, Inc. |
| | 200 Bellevue Parkway, Suite 300, |
| | Wilmington, DE 19809-3727 |
| | |
Identification Numbers: | | 505 |
| | |
| Plan Year: | | Company’s Fiscal Year |
| | |
| Plan Administrator: | | InterDigital, Inc. |
| | Attention: Plan Administrator of the InterDigital, Inc. Executive Severance and Change in Control Policy |
| | 200 Bellevue Parkway, Suite 300, |
| | Wilmington, DE 19809-3727 |
| | |
| Agent for Service of | | |
| Legal Process: | | InterDigital, Inc. |
| | Attention: General Counsel |
| | 200 Bellevue Parkway, Suite 300, |
| | Wilmington, DE 19809-3727 |
| | Service of process may also be made upon the Plan Administrator. |
| | |
| Type of Plan: | | Severance Plan/Employee Welfare Benefit Plan |
| | |
| Plan Costs: | | The cost of the Policy is paid by the Company. |
| | |
Statement of ERISA Rights:
Eligible Employees have certain rights and protections under ERISA:
They may examine (without charge) all Policy documents, including any amendments and copies of all documents filed with the U.S. Department of Labor, such as the Policy’s annual report (Internal Revenue Service Form 5500). These documents are available for review in the Company’s Human Resources Department.
They may obtain copies of all Policy documents and other Policy information upon written request to the Plan Administrator. A reasonable charge may be made for such copies.
In addition to creating rights for Eligible Employees, ERISA imposes duties upon the people who are responsible for the operation of the Policy. The people who operate the Policy (called “fiduciaries”) have a duty to do so prudently and in the interests of Eligible Employees. No one, including the Company or any other person, may fire or otherwise discriminate against an Eligible Employee in any way to prevent them from obtaining a benefit under the Policy or exercising rights under ERISA. If an Eligible Employee’s claim for a severance benefit is denied, in whole or in part, they must receive a written explanation of the reason for the denial. An Eligible Employee has the right to have the denial of their claim reviewed. (The claim review procedure is explained above.)
Under ERISA, there are steps Eligible Employees can take to enforce the above rights. For instance, if an Eligible Employee requests materials and does not receive them within 30 days, they may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and to pay the Eligible Employee up to $147 a day until they receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If an Eligible Employee has a claim which is denied or ignored, in whole or in part, he or she may file suit in a state or federal court. If it should happen that an Eligible Employee is discriminated against for asserting their rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in a federal court.
In any case, the court will decide who will pay court costs and legal fees. If the Eligible Employee is successful, the court may order the person sued to pay these costs and fees. If the Eligible Employee loses, the court may order the Eligible Employee to pay these costs and fees, for example, if it finds that the claim is frivolous.
If an Eligible Employee has any questions regarding the Policy, please contact the Plan Administrator. If an Eligible Employee has any questions about this statement or about their rights under ERISA, they may contact the nearest area office of the Employee Benefits Security Administration (formerly the Pension and Welfare Benefits Administration), U.S. Department of Labor, listed in the telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. An Eligible Employee may also obtain certain publications about their rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
July 2024
TIER 1
EXHIBIT A
InterDigital, Inc. Severance and Change in Control Policy
Participation Agreement
This Participation Agreement (“Agreement”) is made and entered into by and between [NAME] on the one hand, and InterDigital, Inc. (the “Company”) on the other.
You have been designated as eligible to participate in the Policy, a copy of which is attached hereto, under which you are eligible to receive the following severance payments and benefits upon a Qualified Termination, subject to the terms and conditions of the Policy.
Definitions:
“Qualified Termination” means either a Non-COC Qualified Termination or COC Qualified Termination, as defined below.
“Non-COC Qualified Termination” means termination of employment by the Company other than for Cause, death or Disability or by the Eligible Employee for Good Reason.
“COC Qualified Termination” means termination of employment by the Company other than for Cause, death or Disability or by the Eligible Employee for Good Reason during the Change of Control Period.
“Change of Control Period” means the period beginning upon a Change in Control and ending 24 months following a Change in Control.
“Cause” means (i) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of Eligible Employee with respect to Eligible Employee’s obligations to the Company, in each case which results in material harm to the business or reputation of the Company; (ii) Executive’s willful and material breach of his Nondisclosure and Assignment of Ideas Agreement (“NDAIA”); or (iii) Executive’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, any felony, or any crime of moral turpitude; or (iv) the Executive’s willful neglect of duties as determined in the sole and exclusive discretion of the Board of Directors.
“Good Reason” means Eligible Employee’s termination of his employment in accordance with the next sentence after the occurrence of one or more of the following events without Eligible Employee’s express written consent: (i) a material diminution in Eligible Employee’s base salary or target bonus opportunity under the incentive plan as in effect for the year in which the termination occurs; (ii) a material diminution in Eligible Employee’s title, authority, duties or responsibilities; (iii) a material failure to comply with payment of Eligible Employee’s compensation; (iv) relocation of Eligible Employee’s primary office more than 50 miles from Eligible Employee’s then-current office; or (v) any other action or inaction that constitutes a material breach by the Company of the Executive Severance Policy or NDAIA Good Reason shall only exist if Eligible Employee provides a notice of termination for Good Reason to the Company within ninety (90) days after the initial existence of such grounds and the Company has had thirty (30) days from the date on which such notice is provided to cure such circumstances. If the Eligible Employee does not terminate his employment for Good Reason within ninety (90) days following the end of such thirty (30) day period within which the Company was entitled to remedy the course of conduct constituting Good Reason but failed to do so, then Eligible Employee shall be deemed to have waived his right to terminate for Good Reason with respect to such grounds.
Non-COC Qualified Termination
If your Qualified Termination is a Non-COC Qualified Termination, you will be entitled to the following benefits, subject to your compliance with the Policy:
•Equity Vesting: As provided in the applicable Plan and the Equity Award Agreements.
•Salary Severance: Your percentage of Base Salary will be 200%, payable in equal installments over 24 months in accordance with the Company’s regular payroll procedures.
•Bonus Severance: None.
•COBRA Payment: 18 months.
•Outplacement Services: Yes.
COC Qualified Termination
If your Qualified Termination is a COC Qualified Termination, you will be entitled to the following benefits, subject to your compliance with the Policy:
•Equity Vesting: As provided in the applicable Plan and the Equity Award Agreements.
•Salary Severance: Your percentage of Base Salary will be 200%, payable in lump-sum.
•Bonus Severance: 200% of your target bonus under Company’s short-term incentive plan, payable in lump-sum.
•COBRA Payment: 24 months.
•Outplacement Services: No.
Other Provisions
You agree that the Policy and the Agreement constitute the entire agreement of the parties hereto and supersede in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties, and will specifically supersede any severance and/or change in control provisions of any offer letter, employment agreement, or equity award agreement entered into between you and the Company, except that equity vesting or acceleration rights provided for under your Equity Award Agreements shall continue to govern.
This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
By its signature below, each of the parties signifies its acceptance of the terms of this Agreement, in the case of the Company by its duly authorized officer effective as of the last date set forth below.
| | | | | | | | |
| INTERDIGITAL, INC. | | ELIGIBLE EMPLOYEE |
| | |
| By:___________________________ | | Signature:______________________ |
| Date:_________________________ | | Date:__________________________ |
| | |
[Signature Page of the Participation Agreement]
TIER 2
EXHIBIT A
InterDigital, Inc. Severance and Change in Control Policy
Participation Agreement
This Participation Agreement (“Agreement”) is made and entered into by and between [NAME] on the one hand, and InterDigital, Inc. (the “Company”) on the other.
You have been designated as eligible to participate in the Policy, a copy of which is attached hereto, under which you are eligible to receive the following severance payments and benefits upon a Qualified Termination, subject to the terms and conditions of the Policy.
Non-COC Qualified Termination
If your Qualified Termination is a Non-COC Qualified Termination, you will be entitled to the following benefits, subject to your compliance with the Policy:
•Equity Vesting: As provided in the applicable Plan and the Equity Award Agreements.
•Salary Severance: Your percentage of Base Salary will be 150%, payable in equal installments over 18 months in accordance with the Company’s regular payroll procedures.
•Bonus Severance: None.
•COBRA Payment: 12 months.
•Outplacement Services: Yes.
COC Qualified Termination
If your Qualified Termination is a COC Qualified Termination, you will be entitled to the following benefits, subject to your compliance with the Policy:
•Equity Vesting: As provided in the applicable Plan and the Equity Award Agreements.
•Salary Severance: Your percentage of Base Salary will be 200%, payable in lump-sum.
•Bonus Severance: 100% of your target bonus under Company’s short-term incentive plan, payable in lump-sum.
•COBRA Payment: 24 months.
•Outplacement Services: No.
Other Provisions
You agree that the Policy and the Agreement constitute the entire agreement of the parties hereto and supersede in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties, and will specifically supersede any severance and/or change in control provisions of any offer letter, employment agreement, or equity award agreement entered into between you and the Company, except that equity vesting or acceleration rights provided for under your Equity Award Agreements shall continue to govern.
This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
By its signature below, each of the parties signifies its acceptance of the terms of this Agreement, in the case of the Company by its duly authorized officer effective as of the last date set forth below.
| | | | | | | | |
| INTERDIGITAL, INC. | | ELIGIBLE EMPLOYEE |
| | |
| By:___________________________ | | Signature:______________________ |
| Date:_________________________ | | Date:__________________________ |
| | |
[Signature Page of the Participation Agreement]
EXHIBIT 10.2
INTERDIGITAL, INC.
TERM SHEET FOR RESTRICTED STOCK UNITS
(XXXX LTCP Performance-based)
InterDigital, Inc. (the “Company”), hereby grants to the Participant named below the number of Restricted Stock Units specified below (the “Award”), upon the terms and subject to the conditions set forth in this Term Sheet for Restricted Stock Units (the “Term Sheet”), the Standard Terms and Conditions of Restricted Stock Units (the “Standard Terms and Conditions”) and the equity plan specified below (the “Plan”). Capitalized terms not defined herein have the meanings set forth in the Plan or the Standard Terms and Conditions or Exhibit A attached hereto.
Plan: The Company’s 2017 Equity Incentive Plan, as amended
Name of Participant: _______________________________________
Grant Number: _______________________________________
Grant Date: _______________________________________
Number of Restricted Stock Units: _______________________________________
Vesting Schedule: The Award vests upon “Vesting Date” as follows:
On DATE, if at all, subject to Participant continuing to be a Service Provider through such date and the achievement, as approved by the Human Capital Committee of the Board, of the performance goal(s), as set forth in Exhibit A, and parameters set forth in the Standard Terms and Conditions (the date on which all or a portion of the Award vests, the “Vesting Date”); provided that the Award may vest earlier pursuant to the terms of this Term Sheet and the Standard Terms and Conditions.
Pro-rated Vesting: If Participant’s employment is terminated by the Company or any Parent, Subsidiary, or Affiliate of the Company (as applicable, the “Employer”) without Cause or by reason of Participant’s death or Disability, in each case during the last year of a Performance Period, the Award will be eligible to vest as to a prorated portion subject to Participant’s execution of a release of claims in favor of the Company within 60 days following termination of employment, except that no release is required for a termination of Participant’s employment due to death or Disability. Such pro-rata portion will be determined by multiplying the number of Restricted Stock Units that would have otherwise become vested according to the performance goals and parameters set forth in Exhibit A (based on actual performance over the Performance Period), if any, by the fraction equal to the number of days during the period beginning on the Grant Date and ending on the Vesting Date (the “Restricted Period”) for which Participant was employed by the Employer divided by the total number of days during the Restricted Period.
Change in Control; Accelerated Vesting:
Upon a Change in Control, the Award (to the extent then outstanding) will be deemed earned based on the greater of target or actual performance, measured as of the day immediately prior to the Change in Control; such deemed earned Award shall remain subject to service-based vesting as described under “Vesting Schedule” above (without regard to any further performance-based conditions on Exhibit A or otherwise). For the avoidance of doubt, any reference in Section 16(c) of the Plan to vesting criteria being deemed achieved at one hundred percent (100%) of target levels shall instead refer to being deemed achieved based on the greater of target or actual performance, measured as of the day immediately prior to the Change in Control. Without limiting the generality of the foregoing, if Participant’s employment is terminated within 1 year following a Change in Control, either by the Employer other than for Cause, death, or Disability or by Participant for Good Reason, 100% of the then-unvested portion of the Award will vest upon termination, subject to Participant’s execution of a release of claims in favor of the Company within 60 days following termination of employment.
By accepting this Term Sheet, Participant acknowledges that he or she has received and read, and agrees that this Award will be subject to, the terms of this Term Sheet, the Plan, the Standard Terms and Conditions and Exhibit A attached hereto.
INTERDIGITAL, INC. STANDARD TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
Pursuant to the terms of its 2017 Equity Incentive Plan (the “Plan”), InterDigital, Inc., a Pennsylvania corporation (the “Company”), has granted the individual (“Participant”) named in the Term Sheet for Restricted Stock Units (the “Term Sheet”) an award (the “Award”) of Restricted Stock Units representing the right to receive shares of Common Stock (“Shares”) as set forth in the Term Sheet on the terms and conditions as set forth in these Standard Terms and Conditions of Restricted Stock Units, including the Terms and Conditions for Non-U.S. Participants attached hereto as Appendix A and any additional terms and conditions for Participant’s country set forth in the Addendum for Non-U.S. Participants (the “Addendum”) attached hereto as Appendix B, as applicable, (altogether, the “Award Agreement”), the Term Sheet and the Plan (which are incorporated herein by reference).
1.Grant of Restricted Stock Units. The Company has granted to Participant an Award of Restricted Stock Units, subject to all of the terms and conditions herein and in the Term Sheet and the Plan, which are incorporated herein by reference. Subject to Section 22(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Term Sheet and these Standard Terms and Conditions of Restricted Stock Units, the terms and conditions of the Plan will prevail. Capitalized terms not defined herein have the meanings set forth in the Plan or the Term Sheet.
2.Company’s Obligation to Pay. Each Restricted Stock Unit represents the right to receive a Share on the date it vests. Unless and until the Restricted Stock Units will have vested in the manner set forth in the Term Sheet or Section 3, Participant will have no right to payment of any such Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such Restricted Stock Unit will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.
3.Payment after Vesting.
a.General Rule. Subject to Section 7, any Restricted Stock Units that vest will be paid to Participant (or in the event of Participant’s death, to his or her properly designated beneficiary or estate) in whole Shares. Subject to the provisions of Section 3(b), such vested Restricted Stock Units will be paid in whole Shares as soon as practicable following (i) both scoring by the Administrator of the performance goals and parameters set forth in Exhibit A to the Term Sheet and passage of the Vesting Date or (ii) if applicable, the date of the termination of employment, but in each such case no later than March 15 of the year following the date the Restricted Stock Units vest. In no event will Participant be permitted, directly or indirectly, to specify the taxable year of payment of any Restricted Stock Units payable under this Award Agreement.
b.Acceleration.
i.Discretionary Acceleration. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Restricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Administrator. The payment of Shares vesting pursuant to this Section 3(b) will in all cases be paid at a time or in a manner that is exempt from, or complies with, Section 409A. The prior sentence may be superseded in a future agreement or amendment to this Award Agreement only by direct and specific reference to such sentence.
ii.Notwithstanding anything in the Plan or this Award Agreement or any other agreement (whether entered into before, on or after the Grant Date), if the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to Participant’s death, and if (x) Participant is a “specified employee” within the meaning of Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Restricted Stock Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the 6-month period following Participant’s termination as a Service Provider, then the payment of such accelerated Restricted Stock Units will not be made until the date 6 months and 1 day following the date of Participant’s termination as a Service Provider, unless Participant dies following his or her termination as a Service Provider, in which case, the Restricted Stock Units will be paid in Shares to Participant’s estate as soon as practicable following his or her death.
c.Section 409A. It is the intent of this Award Agreement that it and all payments and benefits hereunder be exempt from, or comply with, the requirements of Section 409A so that none of the Restricted Stock Units provided under this Award Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under this Award Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). For purposes of this Award Agreement, “Section 409A” means Section 409A of the Code, and any final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.
4.Forfeiture Upon Termination as a Service Provider. Unless otherwise provided in the Term Sheet, if Participant ceases to be a Service Provider for any or no reason, the then-unvested Restricted Stock Units awarded by this Award Agreement will thereupon be forfeited at no cost to the Company and Participant will have no further rights thereunder.
5.Tax Consequences. Participant has reviewed with his or her own tax advisors the federal, state, local, and foreign tax consequences of this investment and the transactions contemplated by this Award Agreement. With respect to such matters, Participant relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. Participant understands that Participant (and not the Company) will be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Award Agreement.
6.Death of Participant. Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with (i) written notice of his or her status as transferee, and (ii) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
7.Withholding of Taxes. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment, social insurance, payroll and other taxes which the Company determines must be withheld with respect to such Shares. Prior to vesting and/or settlement of the Restricted Stock Units, Participant will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment obligations of the Company and/or the Employer. In this regard, Participant authorizes the Company and/or the Employer to withhold all applicable tax withholding obligations legally payable by Participant from his or her wages or other cash compensation paid to Participant by the Company and/or the Employer or from proceeds of the sale of Shares. Alternatively, or in addition, if permissible under applicable local law, the Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require Participant to satisfy such tax withholding obligation, in whole or in part (without limitation) by (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount required to be withheld, (iii) delivering to the Company already vested and owned Shares having a Fair Market Value equal to the amount required to be withheld, or (iv) selling a sufficient number of such Shares otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. To the extent determined appropriate by the Company in its discretion, it will have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of Shares otherwise deliverable to Participant and, until determined otherwise by the Company, this will be the method by which such tax withholding obligations are satisfied. If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time any applicable Restricted Stock Units otherwise are scheduled to vest pursuant to Section 3 or tax withholding obligations related to Restricted Stock Units otherwise are due, Participant will permanently forfeit such Restricted Stock Units and any right to receive Shares thereunder and the Restricted Stock Units will be returned to the Company at no cost to the Company.
8.Dividend Equivalents. During the period beginning on the Grant Date as indicated in the Term Sheet and ending on the date that the Restricted Stock Units are settled or terminate, whichever occurs first, Participant will accrue Dividend Equivalents based on any dividend that would have been paid on the Restricted Stock Units had the Restricted Stock Units been issued and outstanding Shares on the record date for the dividend. The number of Restricted Stock Units credited to Participant’s account will include fractional Restricted Stock Units calculated to at least three decimal places, unless otherwise determined by the Administrator. Such accrued Dividend Equivalents will vest and become payable upon the same terms and at the same time as the Restricted Stock Units to which they relate, including any delay in payment to which the related Restricted Stock Units may be subject pursuant to Section 3. Payments of Dividend Equivalents will be net of federal, state, and local withholding taxes.
9.Rights as Shareholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a shareholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation, and delivery, Participant will have all the rights of a shareholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.
10.No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE SERVICE RECIPIENT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS RESTRICTED STOCK UNIT AWARD OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE SERVICE RECIPIENT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
11.Grant is Not Transferable. Except to the limited extent provided in Section 6, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.
12.Address for Notices. Any notice to be given to the Office of the General Counsel at the Company at InterDigital, Inc., 200 Bellevue Parkway, Suite 300, Wilmington, DE 19809, USA, or at such other address as the Company may hereafter designate in writing.
13.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to this Award of Restricted Stock Units by electronic means, and Participant hereby consents to receive such documents by electronic delivery.
14.No Waiver. Either party’s failure to enforce any provision or provisions of this Award Agreement will not in any way be construed as a waiver of any such provision or provisions, nor prevent that party from thereafter enforcing each and every other provision of this Award Agreement. The rights granted both parties herein are cumulative and will not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.
15.Successors and Assigns. The Company may assign any of its rights under this Award Agreement to single or multiple assignees, and this Award Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Award Agreement will be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Participant under this Award Agreement may only be assigned with the prior written consent of the Company.
16.Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any state, federal or foreign law, the tax code and related regulations or under the rulings or regulations of the United States Securities and Exchange Commission or any other governmental regulatory body or the clearance, consent or approval of the United States Securities and Exchange Commission or any other governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate) hereunder, such issuance will not occur unless and until such listing, registration, qualification, rule compliance, clearance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. Subject to the terms of the Award Agreement and the Plan, the Company will not be required to issue any certificate or certificates for Shares hereunder prior to the lapse of such reasonable period of time following the date of vesting of the Restricted Stock Units as the Administrator may establish from time to time for reasons of administrative convenience.
17.Interpretation. The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. Neither the Administrator nor any person acting on behalf of the Administrator will be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Award Agreement.
18.Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.
19.Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Award of Restricted Stock Units under the Plan, and has received, read, and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.
20.Modifications to the Agreement. This Award Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this Award of Restricted Stock Units.
21.Governing Law; Venue; Severability. This Award Agreement and the Restricted Stock Units are governed by the internal substantive laws, but not the choice of law rules, of the Commonwealth of Pennsylvania (USA). For purposes of litigating any dispute that arises under these Restricted Stock Units or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the Commonwealth of Pennsylvania (USA), and agree that such litigation will be conducted in the courts of Montgomery County, Pennsylvania (USA), or the federal courts for the United States for the Eastern District of Pennsylvania (USA), and no other courts. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Award Agreement will continue in full force and effect.
22.Entire Agreement. The Plan is incorporated herein by reference. The Plan and this Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to Participant’s interest except by means of a writing signed by the Company and Participant.
23.Non-U.S. Participants. Notwithstanding any provisions in this Award Agreement, if Participant is a resident or citizen of, or is working in, a country outside the United States at any time during the life of the Award, Participant’s participation in the Plan shall be subject to the Terms and Conditions for Non-U.S. Participants attached hereto as Appendix A and any additional terms and conditions for Participant’s country set forth in the Addendum attached hereto as Appendix B. Moreover, if Participant transfers residence and/or employment to, or is considered a citizen or resident for local law purposes of, one of the countries included in the Addendum, the additional terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Terms and Conditions for Non-U.S. Participants and the Addendum constitute part of this Award Agreement.
24.Definitions.
a.“Cause” has the meaning set forth in Participant’s employment agreement, other service agreement, or the Company’s Executive Severance and Change in Control Policy, if such policy is applicable to Participant, (in each case, in existence on the Grant Date), or, if no such agreement or definition exists, means (i) willful and repeated failure of Participant to perform substantially his or her duties (other than any such failure resulting from incapacity due to physical or mental illness); (ii) Participant’s conviction of, or plea of guilty or nolo contendere to, a felony which is materially and demonstrably injurious to the Company or any Parent, Subsidiary, or Affiliate of the Company; (iii) willful misconduct or gross negligence by Participant in connection with his or her service; (iv) unsatisfactory job performance; or (v) Participant’s breach of any material obligation or duty owed to the Company or any Parent, Subsidiary, or Affiliate of the Company.
b.“Good Reason” has the meaning set forth in Participant’s employment agreement, other service agreement, or the Company’s Executive Severance and Change in Control Policy, if such policy is applicable to Participant, (in each case, in existence on the Grant Date), or, if no such agreement or definition exists, means any of the following events, occurring without Participant’s prior written consent: (i) any material reduction in Participant’s base salary (other than a proportionate reduction in salary which is applied to a majority of the Employer’s employees); (ii) a material diminution of Participant’s duties or responsibilities within the Employer; and (iii) a relocation of Participant’s primary work location (or office) by a distance of more than 50 miles. Notwithstanding the foregoing, Good Reason shall only exist if Participant provides the Employer with written notice within 90 days of the initial occurrence of any of the foregoing events or conditions, and the Employer or any successor or Affiliate of the Employer fails to eliminate the conditions constituting Good Reason within 30 days after receipt of written notice of such event or condition from Participant. Participant’s resignation from employment with the Employer for Good Reason must occur within 6 months following the initial occurrence of one of the foregoing events or conditions.
Appendix A
INTERDIGITAL, INC.
Terms and Conditions for Non-U.S. Participants
Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Plan and the Award Agreement.
1.Responsibility for Taxes. This provision supplements Section 7 of the Award Agreement.
Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax‑related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including, but not limited to, the grant, vesting, or settlement of the Award, the subsequent sale of Shares acquired pursuant to the Award and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to tax in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
In connection with any relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy their withholding obligations with regard to all Tax-Related Items, if any, by one or a combination of the following:
a.withholding from Participant’s wages, salary or other cash compensation payable to Participant by the Company, the Employer and/or any other Affiliate;
b.withholding from proceeds of the sale of Shares under the Plan, either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization without further consent);
c.withholding in Shares to be issued upon settlement of the Restricted Stock Units, or
d.any other method determined by the Company, to the extent permitted under the Plan and applicable laws;
provided, however, that if Participant is an officer of the Company subject to Section 16 of the Exchange Act, the obligation for any Tax-Related Items will be satisfied only by one or a combination of methods (a), (b) and (d) above.
The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other applicable withholding rates, including maximum rates applicable in Participant’s jurisdiction(s). In the event of over-withholding, Participant may receive a refund of any over-withheld amount in cash (with no entitlement to the Shares equivalent), or if not refunded, Participant may seek a refund from the applicable tax authorities. In the event of under-withholding, Participant may be required to pay additional Tax-Related Items directly to the applicable tax authorities or to the Company and/or Employer. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of Shares subject to the Award, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items.
Finally, Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described.
2.Nature of Grant. Participant acknowledges, understands and agrees that:
a.the Plan is established voluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
b.the grant of the Award is exceptional, discretionary, voluntary and occasional and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted in the past;
c.all decisions with respect to future awards, if any, will be at the sole discretion of the Company;
d.Participant is voluntarily participating in the Plan;
e.the Award and any Shares acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation;
f.the Award and any Shares acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation or salary for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, leave-related payments, holiday top-up, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for or relating in any way to, past services for the Company, the Employer or any other Affiliate;
g.unless otherwise agreed in writing with the Company, the Award and any Shares acquired under the Plan, and the income from and value of same, are not granted as consideration for, or in connection with, the service Participant may provide as a director of an Affiliate or Subsidiary;
h.this Award and Participant’s participation in the Plan shall not create a right to employment or other service relationship, or be interpreted as forming or amending an employment or service contract with the Company, the Employer or any other Affiliate or Subsidiary, and shall not interfere with the ability of the Company, the Employer or any other Affiliate or Subsidiary, as applicable, to terminate Participant’s employment or other service relationship, if any;
i.the future value of the Shares underlying the Award is unknown, indeterminable, and cannot be predicted with certainty;
j.no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting from the Participant’s termination as Service Provider (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any);
k.unless otherwise provided in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Award Agreement do not create any entitlement to have the Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of the Company; and
l.neither the Company, the Employer nor any other Affiliate or Subsidiary shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Award or of any amounts due to Participant pursuant to settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement.
3.Data Privacy
Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement and any other Award grant materials by and among, as applicable, the Employer, the Company and any other Affiliate or Subsidiary for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.
Participant understands that the Company and the Employer hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number (e.g., resident registration number), salary, nationality, job title, any Shares of stock or directorships held in the Company, details of all awards or any other entitlement to Shares or equivalent benefits awarded, cancelled, purchased, exercised, vested, unvested, or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.
Participant understands that Data will be transferred to CompIntelligence, Inc. and Etrade, Inc. and certain of their affiliated companies (collectively, “Stock Plan Administrator”), or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of Data may be located in the United States or elsewhere, and that the recipients’ country may have different data privacy laws and protections than Participant’s country. Participant understands that Participant may request a list with the names and addresses of any potential recipients of Data by contacting Participant’s local human resources representative. Participant authorizes the Company, CompIntelligence, Inc. and Etrade, Inc. and any other possible recipients which may assist the Company, (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data to a broker, escrow agent or other third party with whom any Shares acquired under the Plan may be deposited.
Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that Participant may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting Participant’s local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Restricted Stock Units under the Plan or other equity awards to Participant or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.
4.Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant’s country, or the broker’s country, or where the Shares are listed, Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect Participant’s ability to, directly or indirectly, accept, acquire, sell, or attempt to sell or otherwise dispose of Shares, rights to Shares (e.g., Restricted Stock Units), or rights linked to the value of Shares, during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws and/or regulations in the applicable jurisdictions or Participant’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders Participant places before possessing the inside information. Furthermore, Participant may be prohibited from (i) disclosing inside information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Participant is responsible for ensuring compliance with any applicable restrictions and should consult Participant’s personal legal advisor on this matter.
5.Foreign Asset/Account Reporting; Exchange Controls. Participant’s country may have certain foreign asset and/or account reporting requirements and/or exchange controls that may affect Participant’s ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside Participant’s country. Participant may be required to report such accounts, assets or transactions to the tax or other authorities in Participant’s country. Participant also may be required to repatriate sale proceeds or other cash received as a result of Participant’s participation in the Plan to Participant’s country through a designated bank or broker and/or within a certain time after receipt. Participant acknowledges that it is Participant’s responsibility to be compliant with such regulations, and Participant is advised to consult Participant’s personal legal advisor for any details.
6.Language. By accepting the Award Agreement, Participant acknowledges and represents that Participant is sufficiently proficient in the English language, or has consulted with an advisor who is sufficiently proficient in English, so as to allow Participant to understand the terms of the Award Agreement and any other documents related to the Plan. If Participant has received a copy of this Award Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version of the Plan, and in the event of any conflict the English version will govern.
Appendix B
INTERDIGITAL, INC.
STANDARD TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
Addendum for Non-U.S. Participants
Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Plan, the Award Agreement and the Terms and Conditions for Non-U.S. Participants.
Terms and Conditions
This Addendum includes additional terms and conditions that govern the Award if Participant resides and/or works in one of the countries listed below. If Participant is a citizen or resident of a country (or is considered as such for local law purposes) other than the one in which Participant is currently residing and/or working or if Participant moves or transfers to another country after receiving the Award, the Company will, in its sole discretion, determine the extent to which the terms and conditions herein will be applicable to Participant.
Notifications
This Addendum also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of September 2022. Such laws are often complex and change frequently. Participant should not rely on the information in this Addendum as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time that the Award vests or Participant sells Shares acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to Participant’s particular situation and the Company is not in a position to assure Participant of a particular result. Accordingly, Participant should seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.
If Participant is a citizen or resident of a country (or is considered as such for local law purposes) other than the one in which Participant is currently residing and/or working or if Participant moves or transfers to another country after receiving the Award, the information contained herein may not be applicable to Participant in the same manner.
European Union (“EU”) / European Economic Area (“EEA”) / United Kingdom (“UK”)
Data Privacy Notice. If Participant resides and/or works in the EU/EEA or the UK, the following provision is applicable to Participant:
The Company, with its principal office at 200 Bellevue Parkway, Suite 300, Wilmington, DE 19809, USA, is the controller responsible for the processing of Participant’s personal data by the Company and the third parties noted below.
aData Collection, Processing and Usage. Pursuant to applicable data protection laws, Participant is hereby notified that the Company collects, processes and uses certain personal information about Participant for the legitimate purpose of implementing, administering and managing the Plan and generally administering equity awards, specifically Participant’s name, email address, work location, status (active, terminated, rehired), Plan eligibility, date of birth any Restricted Stock Units, and details of all options, any other entitlement to Restricted Stock Units awarded, canceled, exercised, vested, or outstanding in Participant’s favor (“Personal Data”). In granting the Restricted Stock Units under the Plan, the Company will collect, process, use, disclose and transfer (collectively, “Processing”) Personal Data for purposes of implementing, administering and managing the Plan. The Company’s legal basis for the Processing of Personal Data is the Company’s legitimate business interests of managing the Plan, administering equity awards and complying with its contractual and statutory obligations, as well as the necessity of the Processing for the Company to perform its contractual obligations under this Award Agreement and the Plan. Participant’s refusal to provide Personal Data would make it impossible for the Company to perform its contractual obligations and may affect Participant’s ability to participate in the Plan. As such, by enrolling in the Plan, Participant voluntarily acknowledges the Processing of Participant’s Personal Data as described herein.
bOutside Service Providers. The Company and the Employer may transfer Personal Data to the broker (currently Compensation Intelligence, Inc. and Etrade, Inc. and their affiliates), independent service providers based in the United States of America, which assist the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Personal Data with another company that serves in a similar manner. The Processing of Personal Data will take place through both electronic and non-electronic means. Personal Data will only be accessible by those individuals requiring access to it for purposes of implementing, administering and operating the Plan. When receiving the Personal Data, if applicable, the broker provides appropriate safeguards in accordance with the Standard Contractual Clauses or other appropriate cross-border transfer solutions. By participating in the Plan, Participant understands that the broker will Process the Personal Data for the purposes of implementing, administering and managing Participant’s participation in the Plan.
cInternational Personal Data Transfers. The Plan and Restricted Stock Units are administered in the United States of America, which means it will be necessary for Personal Data to be transferred to, and Processed in the United States of America. When transferring Personal Data to the United States of America, the Company provides appropriate safeguards in accordance with the Standard Contractual Clauses or other appropriate cross-border transfer solutions. Participant may request a copy of the appropriate safeguards with the broker or the Company by contacting Total_Rewards.
dData Retention. The Company will use Personal Data only as long as is necessary to implement, administer and manage Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including under tax, exchange control, securities, and labor laws. When the Company no longer needs Personal Data related to the Plan, the Company will remove it from its systems. If the Company keeps Personal Data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be for compliance with applicable law.
eData Subject Rights. To the extent provided by law, Participant has the right to (i) subject to certain exceptions, request access or copies of Personal Data the Company Processes, (ii) request rectification of incorrect Personal Data, (iii) request deletion of Personal Data, (iv) place restrictions on Processing of Personal Data, (v) lodge complaints with competent authorities in Participant’s country, and/or (vi) request a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding Participant’s rights or to exercise Participant’s rights, Participant may contact Total_Rewards@InterDigital.com. Participant also has the right to object, on grounds related to a particular situation, to the Processing of Personal Data, as well as opt-out of the Plan, in any case without cost, by contacting Total_Rewards@InterDigital.com. Participant’s provision of Personal Data is a contractual requirement. Participant understands, however, that the only consequence of refusing to provide Personal Data is that the Company may not be able to administer the Restricted Stock Units, or grant other awards or administer or maintain such awards. For more information on the consequences of the refusal to provide Personal Data, Participant may contact Total_Rewards@InterDigital.com.
Belgium
Notifications
Foreign Asset/Account Reporting Information. Belgian residents are required to report any security or bank account (including brokerage accounts) they maintain outside of Belgium on their annual tax return. In a separate report, they must provide the National Bank of Belgium with certain details regarding such foreign accounts (including the account number, bank name and country in which any such account was opened). The forms to complete this report are available on the website of the National Bank of Belgium.
Stock Exchange Tax Information. A stock exchange tax applies to transactions executed by a Belgian resident through a non-Belgian financial intermediary, such as a U.S. broker. The stock exchange tax likely will not apply when the Restricted Stock Units vest, but likely will apply when shares of Common Stock are sold. Participant should consult with a personal tax or financial advisor for additional details on Participant’s obligations with respect to the stock exchange tax.
Annual Securities Account Tax Information. A new “annual securities accounts tax” has been implemented, which imposes a 0.15% annual tax on the value of qualifying securities held in a Belgian or foreign securities account. The tax will not apply unless the total value of securities Participant holds in such an account exceeds an average of €1 million on four reference dates within the relevant reporting period (i.e., December 31, March 31, June 30 and September 30). Different payment obligations may apply, depending on whether the securities account is held with a Belgian or foreign financial institution. Participant should consult Participant’s personal tax advisor for more information regarding Participant’s annual securities accounts tax payment obligations.
Canada
Terms and Conditions
Form of Settlement. For the avoidance of doubt, the Award shall be paid in Shares only. In no event shall the Award be paid in cash, notwithstanding any discretion contained in the Plan to the contrary. This provision is without prejudice to the application of Section 7 of the Award Agreement or Section 1 of the Terms and Conditions for Non-U.S. Participants.
Termination as Service provider. This provision replaces the second paragraph of Section 4 of the Award Agreement:
For purposes of the Award, in the event Participant’s termination as Service Provider (regardless of the reason for such termination and whether or not the termination is later found to be invalid, unlawful or in breach of employment laws in the jurisdiction where Participant is providing services or the terms of Participant’s employment agreement, if any), Participant’s right to vest in the Award will terminate as of the date that is the earlier of: (i) the date of Participant’s termination as Service Provider, and (ii) the date that Participant receives notice of termination from the Employer. In either case, the date shall exclude any period during which notice, pay in lieu of notice or related payments or damages are provided or required to be provided under local law. For greater certainty, Participant will not earn or be entitled to any pro-rated vesting for that portion of time before the date on which Participant’s right to vest terminates, nor will Participant be entitled to any compensation for lost vesting.
If, notwithstanding the foregoing, applicable employment standards legislation explicitly requires continued vesting during a statutory notice period, Participant’s right to vest in the Restricted Stock Units, if any, will terminate effective as of the last date of the minimum statutory notice period, but Participant will not earn or be entitled to pro-rated vesting if the vesting date falls after the end of Participant’s statutory notice period, nor will Participant be entitled to any compensation for lost vesting.
The following provisions will apply if you are a resident of Quebec:
Data Privacy. This provision supplements Section 3 of the Terms and Conditions for Non-U.S. Participants:
Participant hereby authorizes the Company (including any Affiliate or Subsidiary) and the Company’s representatives, including the broker(s) designated by the Company, to discuss with and obtain all relevant information from all personnel, professional or non-professional, involved with the administration and operation of the Plan. Participant further authorizes the Company, any Affiliate, any Subsidiary, CompIntelligence, Inc. and Etrade, Inc., or such other broker(s) as designated by the Company, to disclose and discuss the Plan with their advisors. Participant further authorizes the Company and any Affiliate or Subsidiary to record such information and to keep such information in Participant’s employee file. Participant acknowledges and agrees that Participant’s personal information, including any sensitive personal information, may be transferred or disclosed outside the province of Quebec, including to the U.S. If applicable, Participant also acknowledges and authorizes the Company, its Affiliates, its Subsidiaries, CompIntelligence, Inc. and Etrade, Inc. to use technology for profiling purposes and to make automated decisions that may have an impact on Participant or the administration of the Plan.
French Language Documents A French translation of the Award Agreement and the Plan will be made available to the Participant as soon as reasonably practicable. The Participant understands that, from time to time, additional information related to the offering of the Plan might be provided in English and such information may not be immediately available in French. However, upon request, the Company will translate into French documents related to the offering of the Plan as soon as reasonably practicable.
Documents en Langue Française. Une traduction française du présent Contrat d’Attribution et du Plan sera mise à la disposition du Participant dès que cela sera raisonnablement possible. Le Participant comprend que, de temps à autre, des informations supplémentaires relatives à l’offre du Plan peuvent être fournies en anglais et que ces informations peuvent ne pas être immédiatement disponibles en français. Cependant, sur demande, la Société traduira en français les documents relatifs à l’offre du Plan dès que cela sera raisonnablement possible.
Notifications
Securities Law Information. There may be securities law implications if you sell Shares acquired under the Plan through a broker other than a broker appointed under the Plan or if the sale does not take place through the facilities of a stock exchange outside of Canada on which the Shares are listed (i.e., the Nasdaq Global Select Market).
Foreign Asset/Account Reporting Information. Specified foreign property, including Shares and rights to receive Shares (e.g., Restricted Stock Units) of a non-Canadian company held by a Canadian resident must generally be reported annually on a Form T1135 (Foreign Income Verification Statement) if the total cost of the specified foreign property exceeds C$100,000 at any time during the year. Thus, the Restricted Stock Units must be reported (generally at a nil cost) if the C$100,000 cost threshold is exceeded because Participant holds other specified foreign property. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares. The ACB ordinarily is equal to the fair market value of the Shares at the time of acquisition, but if Participant owns other Shares, this ACB may have to be averaged with the ACB of the other Shares. Participant should consult with Participant’s personal tax advisor to ensure compliance with the applicable reporting obligations.
Finland
There are no country-specific provisions.
France
Terms and Conditions
Language Consent. By accepting the Restricted Stock Units, Participant confirms having read and understood the Plan and the Award Agreement, which were provided in the English language. Participant accepts the terms of those documents accordingly.
Consentement Relatif à la Langue Utilisée. En acceptant le droit sur des actions assujetti à des restrictions, le Participant confirme avoir lu et comprendre le Plan et le Contrat d’Attribution qui ont été transmis en langue anglaise. Le Participant accepte les dispositions de ces documents en connaissance de cause.
Notifications
Foreign Asset/Account Reporting Information. French residents holding cash or securities (including Shares acquired under the Plan) outside of France or maintaining foreign bank, securities or brokerage accounts (including accounts opened or closed during the tax year) must declare such assets and accounts to the French tax authorities when filing an annual tax return.
Tax Information. The Restricted Stock Units are not intended to qualify for special tax or social security treatment in France.
United Kingdom
Terms and Conditions
Responsibility for Taxes. Participant agrees that Participant is liable for all Tax-Related Items and hereby covenant to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). Participant also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on Participant’s behalf. For the purposes of the Agreement, Tax-Related Items include (without limitation) employment income tax, employee National Insurance contributions and the employee portion of the Health and Social Care levy.
Notwithstanding the foregoing, if Participant is a director or an executive officer of the Company (within the meaning of such terms for purposes of Section 13(k) of the Exchange Act), Participant acknowledges that may not be able to indemnify the Company or the Employer for the amount of any income tax not collected from or paid by Participant, as it may be considered a loan. In this case, the amount of any income tax not collected within 90 days of the end of the U.K. tax year in which the event giving rise to the Tax-Related Item(s) occurs may constitute an additional benefit to Participant on which additional income tax and National Insurance contributions may be payable. Participant will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or the Employer (as appropriate) for the value of any employee National Insurance contributions and employee Health and Social Care levy due on this additional benefit, which the Company or the Employer may collect from Participant by any of the means referred to in the Plan or this Award Agreement.
EXHIBIT 10.3
INTERDIGITAL, INC.
TERM SHEET FOR STOCK OPTION AWARD
(YEAR Performance-Based)
InterDigital, Inc. (the “Company”), hereby grants to the Participant named below an option (the “Option” or “Award”) to purchase the number of shares of the Company’s Common Stock specified below at the exercise price per Share (the “Exercise Price”) specified below, upon the terms and subject to the conditions set forth in this Term Sheet for Stock Option Award (the “Term Sheet”), the Standard Terms and Conditions of Stock Option Award (the “Standard Terms and Conditions”) and the equity plan specified below (the “Plan”). Capitalized terms not defined herein have the meanings set forth in the Plan or the Standard Terms and Conditions.
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Plan: | | The Company’s 2017 Equity Incentive Plan, as amended |
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Name of Participant: | | %%FIRST_NAME%-% %%LAST_NAME%-% |
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Grant Number: | | %%OPTION_NUMBER%-% |
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| Grant Date: | | %%OPTION_DATE,’Month DD, YYYY’%-% |
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| Expiration Date: | | The 10th anniversary of the Grant Date |
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Target Shares Granted: | | %%TOTAL_SHARES_GRANTED,’999,999,999’%-% (“Target Options”); |
| | The maximum number of Shares issuable under this Award is 200% of the Target Options (“Maximum Options”), as described above. |
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Type of Option: | | %%OPTION_TYPE_LONG%-% |
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Exercise Price: | | %%OPTION_PRICE%-% |
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Vesting Schedule: | | The Option vests upon “Vesting Date” as follows: |
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| | On DATE, if at all, subject to Participant continuing to be a Service Provider through such date and the achievement, as approved by the Human Capital Committee of the Board, of the performance goal(s), as set forth in Exhibit A, and parameters set forth in the Standard Terms and Conditions (the date on which all or a portion of the Option vests, the “Vesting Date”); provided, that the Option may vest earlier pursuant to the terms of this Term Sheet and the Standard Terms and Conditions. |
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| | Notwithstanding anything herein to the contrary, in no event shall more than the Maximum Options vest and be eligible for exercise. |
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| Pro-rated Vesting: | | If Participant’s employment is terminated by the Company or any Parent, Subsidiary, or Affiliate of the Company (as applicable, the “Employer”) without Cause or by reason of Participant’s death or Disability, in each case, during the last year of a Performance Period, the Option will remain eligible to vest as to a prorated portion, subject to Participant’s execution of a release of claims in favor of the Company within 60 days following termination of employment, except that no release is required for a termination of Participant’s employment due to death or Disability. Such pro-rata portion will be determined by multiplying the number of Shares subject to the Option that would otherwise have become vested according to the performance goals and parameters set forth in the Standard Terms and Conditions and Exhibit A (based on actual performance over the performance period), if any, by the fraction equal to the number of days during the Performance Period that Participant was employed by the Employer divided by the total number of days during the Performance Period. |
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| | Notwithstanding the Termination Period section below, on a qualifying termination described in this section, the Option will remain exercisable for 6 months after the Vesting Date for such Performance Period. For clarity, on a qualifying termination described in this section, any Shares subject to the unvested Option will not immediately revert to the Plan on such termination. Instead such unvested Option will remain eligible to vest on the Vesting Date of such Performance Period and any vested Option will remain exercisable for 6 months after the Vesting Date. |
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Change in Control; Accelerated Vesting: |
| | Upon a Change in Control, the Option (to the extent then outstanding) will be deemed earned based on the greater of target or actual performance, measured as of the day immediately prior to the Change in Control; such deemed earned Award shall remain subject to service-based vesting as described under “Vesting Schedule” above (without regard to any further performance-based conditions on Exhibit A or otherwise). For the avoidance of doubt, any reference in Section 16(c) of the Plan to vesting criteria being deemed achieved at one hundred percent (100%) of target levels shall instead refer to being deemed achieved based on the greater of target or actual performance, measured as of the day immediately prior to the Change in Control. Without limiting the generality of the foregoing, if Participant’s employment is terminated within 1 year following a Change in Control, either by the Employer other than for Cause, death, or Disability or by Participant for Good Reason, 100% of the then-unvested portion of the Award will vest upon termination, subject to Participant’s execution of a release of claims in favor of the Company within 60 days following termination of employment. |
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Termination Period: | | This Option will be exercisable for 6 months after Participant ceases to be a Service Provider for any reason other than termination of Participant’s Service Provider status for Cause, unless such termination is due to Participant’s death or Disability, in which case this Option will be exercisable for 12 months after Participant ceases to be a Service Provider; provided, however, that if Participant dies during such 6-month post-termination exercise period, the Option may be exercised following Participant’s death for 12 months after Participant’s death. If Participant’s Service Provider status is terminated by the Company for Cause, the entire Option, whether or not then vested and exercisable, will be immediately forfeited and canceled as of the date of such termination. Notwithstanding the foregoing sentence, in no event may this Option be exercised after the Expiration Date listed above and may be subject to earlier termination as provided in Section 16(c) of the Plan. |
By accepting this Term Sheet, Participant acknowledges that he or she has received and read, and agrees that the Option will be subject to, the terms of this Term Sheet, the Plan, and the Standard Terms and Conditions.
INTERDIGITAL, INC.
STANDARD TERMS AND CONDITIONS OF STOCK OPTION AWARD
These Standard Terms and Conditions apply to a Stock Option Award granted under the InterDigital, Inc. 2017 Equity Incentive Plan (the “Plan”), which is evidenced by the Term Sheet for Stock Option Award (the “Term Sheet”).
1Grant of Option. The Company has granted to the individual (the “Participant”) named in the Term Sheet an option (the “Option”) to purchase the number of Shares set forth in the Term Sheet at the exercise price per Share set forth in the Term Sheet (the “Exercise Price”), subject to all of the terms and conditions herein and in the Term Sheet and the Plan, which are incorporated herein by reference. Subject to Section 22(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Term Sheet and this Standard Terms and Conditions of Stock Option Award (together, the “Award Agreement”), the terms and conditions of the Plan will prevail. Capitalized terms not defined herein have the meanings set forth in the Plan or the Term Sheet.
If designated in the Term Sheet as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an ISO under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). However, if this Option is intended to be an ISO, to the extent required under the $100,000 rule of Code Section 422(d) it will be treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason this Option (or portion thereof) will not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) will be regarded as a NSO granted under the Plan. In no event will the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.
2.Administrator Discretion. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Option at any time, subject to the terms of the Plan. If so accelerated, such Option will be considered as having vested as of the date specified by the Administrator.
3.Termination of Relationship as a Service Provider. Unless otherwise provided by the Administrator, on the date that Participant ceases to be a Service Provider, if Participant is not vested as to the entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. Following termination of Participant’s Service Provider status, the Option may be exercised to the extent that the Option is vested on the date of termination within the applicable period of time specified in the Term Sheet, but in no event later than the Expiration Date set forth in the Term Sheet. If the Option is not so exercised within such applicable period of time or by the Expiration Date (as applicable), the Option will terminate, and the Shares covered by such Option will revert to the Plan.
a.Death of Participant. If Participant dies while a Service Provider, the Option may be exercised by Participant’s designated beneficiary in accordance with the provisions of this Section 3, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by Participant, then the Option may be exercised by the personal representative of Participant’s estate or by the person(s) to whom the Option is transferred pursuant to Participant’s will or in accordance with the laws of descent and distribution.
b.Tolling Expiration.
i.If the exercise of the Option following the termination of Participant’s status as a Service Provider (other than upon Participant’s death or Disability) would result in liability under Section 16(b), then the Option will terminate on the earlier of (A) the Expiration Date set forth in the Term Sheet, or (B) the 10th day after the last date on which such exercise would result in liability under Section 16(b); or
ii.if the exercise of the Option following the termination of Participant’s status as a Service Provider (other than upon Participant’s death or Disability) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (A) the Expiration Date set forth in the Term Sheet or (B) the expiration of a 30-day period after the termination of Participant’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.
4.Exercise of Option.
a.Right to Exercise. This Option may be exercised only within the term set out in the Term Sheet, and may be exercised during such term only in accordance with the Plan and the terms of this Award Agreement.
b.Method of Exercise. This Option will be exercisable in a manner and pursuant to such procedures as the Administrator may determine, which procedure will require Participant to state that he/she is electing to exercise the Option (the “Exercise Notice”), the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and will require Participant to make such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares together with any applicable tax withholding. This Option will be deemed to be exercised upon receipt by the Company of such Exercise Notice accompanied by the aggregate Exercise Price.
5.Method of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant:
a.cash;
b.check;
c.consideration received by the Company under its customary cashless exercise program; or
d.surrender of other Shares which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares, provided that accepting such Shares, in the sole discretion of the Administrator, will not result in any adverse accounting consequences to the Company.
6.Tax Obligations.
a.Withholding Taxes. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment and other taxes which the Company determines must be withheld with respect to such Shares. To the extent determined appropriate by the Company in its discretion, it will have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of Shares otherwise deliverable to Participant. If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time of the Option exercise, Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.
b.Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date 2 years after the Grant Date, or (ii) the date 1 year after the date of exercise, Participant will immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant.
c.Code Section 409A. Under Code Section 409A, an option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the fair market value of a share on the date of grant (a “Discount Option”) may be considered “deferred compensation.” A Discount Option may result in (i) income recognition by Participant prior to the exercise of the option, (ii) an additional 20% federal income tax, and (iii) potential penalty and interest charges. The Discount Option may also result in additional state income, penalty, and interest charges to Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share Exercise Price of this Option equals or exceeds the Fair Market Value of a Share on the Grant Date in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share Exercise Price that was less than the Fair Market Value of a Share on the Grant Date, Participant will be solely responsible for Participant’s costs related to such a determination.
7.Rights as Shareholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a shareholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book entry form) will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation, and delivery, Participant will have all the rights of a shareholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.
8.No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE SERVICE RECIPIENT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE SERVICE RECIPIENT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
9.Address for Notices. Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Office of the General Counsel at the Company at InterDigital, Inc., 200 Bellevue Parkway, Suite 300, Wilmington, DE 19809, or at such other address as the Company may hereafter designate in writing.
10.Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant.
11.Successors and Assigns. The Company may assign any of its rights under this Award Agreement to single or multiple assignees, and this Award Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Award Agreement will be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of Participant under this Award Agreement may only be assigned with the prior written consent of the Company.
12.Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration, qualification or rule compliance of the Shares upon any securities exchange or under any state, federal or foreign law, the tax code and related regulations or under the rulings or regulations of the United States Securities and Exchange Commission or any other governmental regulatory body or the clearance, consent or approval of the United States Securities and Exchange Commission or any other governmental regulatory authority is necessary or desirable as a condition to the purchase by, or issuance of Shares, to Participant (or his or her estate) hereunder, such purchase or issuance will not occur unless and until such listing, registration, qualification, rule compliance, clearance, consent or approval will have been completed, effected or obtained free of any conditions not acceptable to the Company. Subject to the terms of the Award Agreement and the Plan, the Company will not be required to issue any certificate or certificates for Shares hereunder prior to the lapse of such reasonable period of time following the date of exercise of the Option as the Administrator may establish from time to time for reasons of administrative convenience.
13.Interpretation. The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the Option have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. Neither the Administrator nor any person acting on behalf of the Administrator will be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Award Agreement.
14.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to the Option by electronic means, and Participant hereby consents to receive such documents by electronic delivery.
15.Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.
16.Agreement Severable. In the event that any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.
17.Amendment, Suspension or Termination of the Plan. By accepting this Option, Participant expressly warrants that he or she has received an Option under the Plan, and has received, read, and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.
18.Governing Law and Venue. This Agreement will be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Option or this Agreement, the parties hereby submit to and consent to the jurisdiction of the Commonwealth of Pennsylvania, and agree that such litigation will be conducted in the courts of Montgomery County, Pennsylvania, or the federal courts for the United States for the Eastern District of Pennsylvania, and no other courts.
19.Modifications to the Agreement. This Award Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or Applicable Laws or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code in connection with the Option.
20.No Waiver. Either party’s failure to enforce any provision or provisions of this Award Agreement will not in any way be construed as a waiver of any such provision or provisions, nor prevent that party from thereafter enforcing each and every other provision of this Award Agreement. The rights granted both parties herein are cumulative and will not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.
21.Tax Consequences. Participant has reviewed with its own tax advisors the federal, state, local, and foreign tax consequences of this investment and the transactions contemplated by this Award Agreement. With respect to such matters, Participant relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. Participant understands that Participant (and not the Company) will be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Award Agreement.
22.Definitions.
a.“Cause” has the meaning set forth in Participant’s employment agreement, other service agreement, or the Company’s Executive Severance and Change in Control Policy, if such policy is applicable to Participant, (in each case, in existence on the Grant Date), or, if no such agreement or definition exists, means (i) willful and repeated failure of Participant to perform substantially his or her duties (other than any such failure resulting from incapacity due to physical or mental illness); (ii) Participant’s conviction of, or plea of guilty or nolo contendere to, a felony which is materially and demonstrably injurious to the Company or any Parent, Subsidiary, or Affiliate of the Company; (iii) willful misconduct or gross negligence by Participant in connection with his or her service; (iv) unsatisfactory job performance; or (v) Participant’s breach of any material obligation or duty owed to the Company or any Parent, Subsidiary, or Affiliate of the Company.
b.“Good Reason” has the meaning set forth in Participant’s employment agreement, other service agreement, or the Company’s Executive Severance and Change in Control Policy, (in each case, in existence on the Grant Date), or, if no such agreement or definition exists, means any of the following events, occurring without Participant’s prior written consent: (i) any material reduction in Participant’s base salary (other than a proportionate reduction in salary which is applied to a majority of the Employer’s employees); (ii) a material diminution of Participant’s duties or responsibilities within the Employer; and (iii) a relocation of Participant’s primary work location (or office) by a distance of more than 50 miles. Notwithstanding the foregoing, Good Reason shall only exist if Participant provides the Employer with written notice within 90 days of the initial occurrence of any of the foregoing events or conditions, and the Employer or any successor or Affiliate of the Employer fails to eliminate the conditions constituting Good Reason within 30 days after receipt of written notice of such event or condition from Participant. Participant’s resignation from employment with the Employer for Good Reason must occur within 6 months following the initial occurrence of one of the foregoing events or conditions.