-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WseYWC+uil2ZXxIvod5rH1hlorN9aKdesjX0ojouXTQX0qaP+CUR4QHth0VoDpiu zATVxOU3EVdenwpXaPlLzw== 0000950115-97-000676.txt : 19970501 0000950115-97-000676.hdr.sgml : 19970501 ACCESSION NUMBER: 0000950115-97-000676 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970430 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERDIGITAL COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000354913 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 231882087 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11152 FILM NUMBER: 97592364 BUSINESS ADDRESS: STREET 1: 781 THIRD AVE CITY: KING OF PRUSSIA STATE: PA ZIP: 19406-1409 BUSINESS PHONE: 6102787800 MAIL ADDRESS: STREET 1: 781 THIRD AVE CITY: KING OF PRUSSIA STATE: PA ZIP: 19406-1409 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL MOBILE MACHINES CORP DATE OF NAME CHANGE: 19920703 10-K/A 1 AMENDMENT TO ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K/A (Amendment No. 1) (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission File Number 1-11152 INTERDIGITAL COMMUNICATIONS CORPORATION (Exact name of registrant as specified in its charter) Pennsylvania 23-1882087 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 781 Third Avenue, King of Prussia, Pennsylvania 19406 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: 610-878-7800 Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $.01 per Share (Title of Class) Securities registered pursuant to Section 12(g) of the Act: $2.50 Cumulative Convertible Preferred Stock, Par Value $2.50 per Share (Title of Class) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] On March 14, 1997, the aggregate market value of the Registrant's Common Stock, $.01 par value, held by non-affiliates of the Registrant was approximately $303,731,695. On March 14, 1997, there were 48,115,912 shares of the Registrant's Common Stock, $.01 par value outstanding. Documents Incorporated by Reference Not Applicable. Part III Item 10. Directors and Executive Officers of the Registrant Information concerning executive officers appears under the caption "Item 1. Business-Executive Officers of the Company" in Part I of the Form 10-K. The following individuals currently comprise the Board of Directors and are identified by term of office: Members of The Board of Directors Having a Three Year Term Expiring at 2000 Annual Meeting D. RIDGELY BOLGIANO, 65, has been a director of the Company since 1981. He has been a Vice President and Chief Scientist of the Company since April 1984, and Acting President of InterDigital Patents Corporation ("IPC"), the Company's wholly owned subsidiary since May 1996. He has been affiliated with the Company in various capacities since 1974. WILLIAM A. DOYLE, 47, became a director in May 1996, filling the vacancy left by the resignation of William Burns. He has served as President of the Company since November 1994. He was Executive Vice President, Chief Administrative Officer, General Counsel and Secretary of the Company from February 1994 to November 1994 and served as Vice President, General Counsel and Secretary of the Company from March 1991 to February 1994. Member of the Board of Directors Having a Term Expiring at 1999 Annual Meeting HARRY G. CAMPAGNA, 58, Chairman of the Board, has been a director of the Company since April 1994. Mr. Campagna has been the President and Chairman of the Board of Qualitex Co., a company co-owned by Mr. Campagna and his wife, for more than the past five years. Qualitex is a manufacturer of press pads and related items for the garment, apparel and textile industries. Member of the Board of Directors Having a Term Expiring at 1998 Annual Meeting BARNEY J. CACIOPPO, 69, has been a director of the Company since May 1995. He has been the owner and President of Harbor Engineering & Service Co., an engineering and consulting firm, since February 1965. He was the owner and President of Argon Electric Co., a company which provides electrical construction services, for 25 years until his retirement in January 1993. He is a registered professional engineer in the State of Illinois. 1 Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission and the American Stock Exchange initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Executive officers, directors and greater than ten percent shareholders (collectively, "Reporting Persons") are additionally required to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations of Reporting Persons that no other reports were required with respect to fiscal 1996, all Section 16(a) filing requirements applicable to the Reporting Persons were complied with; except that each of Mr. Garrison, Mr. Lemmo and Mr. Harley Sims, a deceased, former director of the Company, filed one report late relating to one transaction. Item 11. Executive Compensation Summary Compensation Table The following table sets forth certain information concerning the annual and long-term compensation paid to or for (i)the Company's Chief Executive Officer during the fiscal year ended December 31, 1996 and (ii) the Company's four other most highly compensated other executive officers whose total annual salary and bonus exceeded $100,000 in 1996 (collectively, the "Named Officers"), for services rendered to the Company and its subsidiaries during fiscal years 1994, 1995 and 1996: 2
Long-Term Compensation ------------------------ Annual Compensation Awards ------------------------------------------ ------------------------ Other Securities All Other Name and Annual Underlying Compen- Principal Compensation Options/ sation Position Year Salary Bonus(1) ($)(2) SARs (#) (3) --------- ---- -------- --------- ------------ ---------- ---------- Gregory E. Webb 1996 $ 53,977 $ 0 $ 40,743(4) 250,000 $ 390 Chief Executive Officer (Since October 1996) William J. Burns 1996 $ 83,333 $ 33,333 $ 30,289(5) 0 $169,397 Chief Executive 1995 $394,520(6) $100,000 $ 0 0 $ 16,790 Officer (from 1994 $ 15,151 $ 0 $ 0 250,000 $ 0 November 1994 to April 1996) William A. Doyle 1996 $186,667 $ 0 $ 0 40,000 $ 800 President 1995 $170,000 $ 68,000 $ 0 0 $ 19,894 1994 $139,627 $ 0 $ 0 70,000 $ 2,805 Howard E. Goldberg 1996 $146,667 $ 0 $160,000(7) 30,000 $ 979 Executive Vice President 1995 $125,000 $ 50,000 $ 34,437(8) 50,000 $ 9,042 General Counsel and 1994 $104,268 $ 0 $ 23,854(9) 30,000 $ 1,933 Secretary James W. Garrison 1996 $116,652 $ 0 $ 0 30,000 $ 255 VP-Finance, Chief 1995 $110,000 $ 44,000 $ 0 0 $ 9,745 Financial Officer, 1994 $ 84,267 $ 0 $ 0 57,000 $ 1,228 Treasurer Mark Lemmo 1996 $140,000 $ 0 $ 75,000(10) 30,000 $ 211 Executive Vice President 1995 $125,942 $ 75,000 $ 0 1,500 $ 20,456 (Since May 1996) 1994 $113,923 $ 0 $ 0 32,500 $ 1,777 D. Ridgely Bolgiano 1996 $111,667 $ 0 $ 0 30,000 $ 2,294 Vice President and 1995 $105,000 $292,000(11) $ 0 0 $ 2,246 Chief Scientist, Acting 1994 $105,000 $ 0 $ 0 1,500 $ 2,246 President of InterDigital Patents Corporation
- ---------------------- (1) Amounts listed as bonuses for fiscal 1995 were accrued but not paid until 1996 for each Named Officer. Amount listed as bonus for fiscal 1996 for Mr. Burns has been accrued but not paid. (2) As permitted by rules established by the Commission, no amounts are shown with respect to certain "perquisites" where such amounts do not exceed the lesser of 10% of bonus plus salary or $50,000. (3) Amounts listed under "All Other Compensation" for 1996 represent the dollar value of insurance premiums with respect to term life insurance (Webb $390; Burns $2,730; Doyle $800; Goldberg $979; Garrison $255; Lemmo $211; Bolgiano $2,293), and in the case of Mr. Burns $166,667 in severance in connection with his resignation. (4) In connection with his move to join the Company in October 1996, the Company reimbursed Mr. Webb for certain relocation expenses in the amount of $40,743. (5) Includes $28,711 in buyout of car lease pursuant to Mr. Burns' Separation Agreement with the Company. (6) Includes the amount of $144,520 which was accrued in 1994. 3 (7) Amount listed represents commissions related to a transaction completed in 1996. (8) Amount listed includes $33,187 in commissions related to certain transactions completed in 1995. (9) Amount listed represents commissions related to certain transactions completed in 1994. (10) Amount listed represents commissions related to a transaction completed in 1996. (11) A portion ($250,000) of Mr. Bolgiano's bonus was awarded in settlement of all claims for payment under the IPC Executive Bonus Plan and in consideration of any claims Mr. Bolgiano would otherwise have asserted under such Plan which was terminated in 1995. In conjunction with Mr. Burns' resignation as Chief Executive Officer, Chairman of the Board and as a director of the Company, the Company and Mr. Burns entered into a Separation and Confidentiality Agreement and Consulting Agreement, each effective April 30, 1996. Pursuant to the Separation and Confidentiality Agreement the Company paid Mr. Burns $100,000 as a bonus award for fiscal 1995 under the Company's Executive Bonus Plan and agreed to pay, among other things, $33,333 as a bonus award for his services as an executive in fiscal 1996 which shall be paid no later than June 1, 1997, to continue medical benefits or pay the cost of obtaining similar medial benefits until April 30, 1997, and to provide certain other benefits and payments which, have totalled approximately $33,000. Under the Consulting Agreement, which has a one year term, the Company agreed to pay Mr. Burns $20,833 per month for the term of the Agreement. Each of Messrs. Doyle, Garrison, Goldberg, Lemmo and Webb have entered into employment agreements with the Company (the "Employment Agreements") that provide severance pay benefits, among other things, in certain events of termination of employment. Certain of these agreements generally provide for the payment of severence up to a maximum of one year's salary (approximately one million dollars aggregate at December 31, 1996) and up to a maximum of one year's continuation of medical and dental benefits. In certain of these agreements, in the event of a termination following a change of congtrol, which is defined as the acquisition, including by merger or consolidation, or by the issuance by the Company of its securities, by one or more persons in one transaction or a series of related transactions, of more than fifty percent of the voting power represented by the outstanding stock of the Company, the employee would generally receive two years salary and the immediate vesting of all stock options. The Employment Agreements (executed between October 1996 and April, 1997) provide annual salaries of said Executive Officers as follows: Doyle $220,000; Garrison $130,000; Goldberg $190,000; Lemmo $170,000 and Webb $250,000. 4 Pursuant to action by the Board Mr.Bolgiano is paid an annual salary of $125,000. In addition, Bolgiano has entered a Severance Benefit Agreement with the Company having eighteen month terms beginning April 1996 which provide that if employment is terminated for any reason other than death, resignation, disability or for cause, the Company will continue to pay salary and related benefits as if he were still employed for the term of the Agreement. The Agreement also provides that employment will be deemed constructively terminated upon any significant adverse change in his authority resulting in a reduction of base salary or any required geographic relocation. Stock Option Grants, Exercises and Holdings The following tables set forth certain information concerning stock options granted to and exercised by the Named Officers during fiscal 1996 and unexercised stock options held by them at the end of fiscal 1996. 5 Option/SAR Grants in Last Fiscal Year
Individual Grants ------------------------------------- Number of % of Total Potential Realizable Value Securities Options/SARs at Assumed Annual Rates Underlying Granted to of Stock Price Options/ Employees in Exercise Appreciation for Option Term(1) SARs Last Fiscal or Base Expiration ------------------------------ Name Granted (#) Year Price Date 5% 10% ---- ----------- ------------- --------- ---------- -------- -------- William J. Burns 0 0 $ -- $- $0 $0 William A. Doyle 40,000 5% $7.69 10/05/06 $193,448 $490,235 Howard E. Goldberg 30,000 3.8% $7.69 10/05/06 $145,086 $367,676 James W. Garrison 30,000 3.8% $7.69 10/05/06 $145,086 $367,676 Mark Lemmo 30,000 3.8% $7.69 10/05/06 $145,086 $367,676 D. Ridgely Bolgiano 30,000 3.8% $7.69 10/05/06 $145,086 $367,676 Gregory E. Webb 100,000 12.8% $7.69 10/05/06 $483,620 $1,225,588 100,000 12.8% $9.23 10/05/06 $569,155 $1,824,861 50,000 6.3% $11.53 10/05/06 $362,558 $918,793
- -------------- (1) The values of unexercised, in-the-money options are calculated by subtracting the exercise price from the fair market value of the shares of Common Stock underlying the options at December 31, 1997. 6 Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Number of Securities Value of Unexercised Underlying In-the-Money Options/SARs Options/SARs at Shares at FY-End (#) FY-End ($)(1) Acquired On Value ---------------------------- --------------------------- Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable ---- ----------- ---------- ----------- ------------- ----------- ------------- Gregory E. Webb ....... 0 $0 0 250,000 $0 $0 William J. Burns ...... 0 $0 298,500 0 $704,688 $0 William A. Doyle ...... 0 $0 156,667 41,667 $178,750 $22,918 Howard E. Goldberg .... 0 $0 148,333 46,667 $ 67,187 $13,438 James W. Garrison ..... 9,500 $66,500 60,200 35,300 $ 53,850 $26,525 Mark Lemmo ............ 15,000 $73,125 55,990 25,000 $0 $0 D. Ridgely Bolgiano ... 0 $0 60,800 0 $ 14,105 $0
- ---------------------- (1) The values of unexercised, in-the-money options are calculated by subtracting the exercise price from the fair market value of the shares of Common Stock underlying the options at December 31, 1996. Compensation of Directors Under the terms of the Company's 1995 Stock Option Plan for Employees and Outside Directors, each member of the Board who is not an officer or employee of the Company ("Outside Director") receives an annual grant of non-qualified stock options to purchase Common Stock at an exercise price equal to the fair market value of the Common Stock at the date of grant. The non- discretionary grant is made on July 1 of each year to Outside Directors who served continuously from July 1 of the preceding year, and prorated option grants are made for service for a partial year. The annual grant entitles each Outside Director to purchase 12,000 shares of the Company's Common Stock, and additional options were granted to Outside Directors to acquire 2,000 shares for each committee of the Board on which the director served as chairperson. In addition, each Outside Director who served as a member of any Board committee (on which he does not also serve as chairman) will receive a non-discretionary option grant to acquire 1,000 shares of Common Stock. Commencing in 1996, the Company ceased to pay Outside Directors annual director's fees or other fees for attending Board meetings, however, the Company continues to reimburse directors for certain expenses incurred in attending Board and committee meetings. 7 Compensation Committee Interlocks and Insider Participation During 1996 the following directors served on the Compensation and Stock Option Committee of the Board: Mr. Sims and Mr. Campagna. Neither of the aforementioned Committee members was an officer or employee of the Company or any of its subsidiaries during 1996, or was formerly an officer of the Company or any of its subsidiaries. Item 12. Security Ownership of Certain Beneficial Owners and Management Security Ownership Of Certain Beneficial Owners The following table sets forth certain information regarding beneficial ownership of the Company's Common Stock, as of February 12, 1997, by each person known to the Company to be the beneficial owner of more than 5% of any class of the Company's outstanding Common Stock. This information is based solely upon such shareholder's Schedule 13G, dated February 12, 1997, as filed with the Securities and Exchange Commission. The shareholder listed possesses sole voting and investment power with respect to the shares listed. Amount and Percent of Name and Address of Nature of Common Stock Beneficial Owner Ownership(1) Outstanding - ------------------- ------------ ------------ Heartland Advisors,Inc......... 5,988,100 12.5% 790 North Milwaukee Street Milwaukee, WI 53202 8 Security Ownership Of Management The following table sets forth certain information regarding beneficial ownership of the Company's Common Stock, as of March 31, 1997, by each of the Company's directors, by each of the Named Officers, and by all executive officers and directors of the Company as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares listed.
Percent of Amount and Common Stock Nature of Outstanding (if Name of Beneficial Owner Ownership(1) greater than 1%)(2) ------------------------ ------------ ------------------- D. Ridgely Bolgiano............................... 243,055 - William J. Burns ................................. 505,905(3) 1.1% Barney J. Cacioppo ............................... 123,622(3) - Harry G. Campagna ................................ 230,725(3) - William A. Doyle.................................. 158,224 - James W. Garrison................................. 60,200 - Howard E. Goldberg................................ 151,200(3) - Mark Lemmo........................................ 59,843 - Gregory E. Webb .................................. 23,864 - All directors and officers as a group (11 persons) 1,080,733(3)(4) 2.3%
- -------------------- (1) Includes the following number of shares of Common Stock which may be acquired by the persons and group identified in the table (or members of the immediate family or other persons or entities affiliated with such persons or members of such group), through the exercise of options or warrants which were exercisable as of March 31, 1997 or will become exercisable within 60 days of such date: Mr. Bolgiano, 173,050; Mr. Burns, 336,500; Mr. Cacioppo, 92,622; Mr. Campagna, 150,725; Mr. Doyle, 156,667; Mr. Garrison, 60,200; Mr. Goldberg, 148,333; Mr. Lemmo, 55,990; Mr. Webb 16,667; all directors and executive officers as a group including Mr. Gifford, an executive officer appointed April 28, 1997, whose beneficial ownership is reflected as of such date, 884,254. (2) Based upon 48,119,412 shares of Common Stock issued and outstanding at March 31, 1997. (3) Investment and voting power with respect to certain of such shares may be shared with members of the immediate family or other persons or entities affiliated with the listed person or members of the listed group. (4) Reflects beneficial ownership of all directors and officers as of March 31, 1997 except as to Joseph A. Gifford, an executive officer appointed April 28, 1997, whose benficial ownership is reflected as of such date. Item 13. Certain Relationships and Related Transactions During 1996, the Company utilized as a consultant Michael W. Burns, the son of William J. Burns, who was Chief Executive Officer and a member of the Board of Directors. He was paid $72,000 for such services and was reimbursed for certain traveling expenses. 9 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. April 30, 1997 INTERDIGITAL COMMUNICATIONS CORPORATION By: /s/ Gregory E. Webb ------------------------------------ Gregory E. Webb Chief Executive Officer By: /s/ James W. Garrison ------------------------------------ James W. Garrison Vice President-Finance, Chief Financial Officer and Treasurer 10 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company and in the capacities and on the dates indicated. Date: April 30, 1997 /s/ D. Ridgely Bolgiano -------------------------------- D. Ridgely Bolgiano, Director Date: April 30, 1997 /s/ Harry G. Campagna -------------------------------- Harry G. Campagna, Director Date: April 30, 1997 /s/ Barney J. Cacioppo -------------------------------- Barney J. Cacioppo, Director Date: April 30, 1997 /s/ William A. Doyle -------------------------------- William A. Doyle, Director 11 -----END PRIVACY-ENHANCED MESSAGE-----