8-K

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
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                                    FORM 8-K

                                 CURRENT REPORT

                        PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         DATE OF REPORT (Date of earliest event reported): June 20, 2005
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                     InterDigital Communications Corporation
             (Exact name of registrant as specified in its charter)



         Pennsylvania                    1-11152                   23-1882087
(State or other jurisdiction     (Commission File Number)        (IRS Employer
        of incorporation)                                    Identification No.)




781 Third Avenue, King of Prussia, PA                              19406-1409
 (Address of Principal Executive Offices)                          (Zip Code)


        Registrant's telephone number, including area code: 610-878-7800

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

|_| Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

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Item 1.01. Entry into a Material Definitive Agreement.

       (a) On June 20, 2005, the Company entered into an employment agreement
with Bruce Bernstein (the "Employment Agreement"), under which Mr. Bernstein
will serve as the Company's General Patent Counsel. Pursuant to the Employment
Agreement, Mr. Bernstein reports to the Chief Executive Officer and will receive
an annual base salary of $265,000, subject to upward adjustment from time to
time ("Base Salary"), together with benefits which are provided to similarly
situated employees of the Company (e.g., medical, dental, vision, 410(k),
expense reimbursement). Mr. Bernstein will be eligible to participate in the
Company's Annual Employee Bonus Plan with an annual target bonus level of 40% of
his Base Salary for 2005. Mr. Bernstein will be eligible to receive a LTIP cash
bonus and restricted stock unit award pursuant to the Company's Long-Term
Compensation Program at an initial program target of 80% of his Base Salary.
Additionally, Mr. Bernstein has been awarded 20,000 stock options vesting over
three years beginning in June 2005 and a signing bonus of $10,000.

         The Employment Agreement provides that if Mr. Bernstein is terminated
without cause or terminates his employment for good reason (as both "cause" and
"good reason" are defined in the Employment Agreement), and provided he executes
the Company's standard form termination letter, he will be entitled to continue
to receive his Base Salary, together with dental and health coverage under
COBRA, for a period of twelve months. Should any payment to be made to Mr.
Bernstein under the Employment Agreement constitute a payment of nonqualified
deferred compensation pursuant to Section 409A of the Internal Revenue Code of
1986, as amended (the "Code), such payment shall be delayed until the date that
is six months after the date of his separation. Further, in the event any amount
or benefit payable to Mr. Bernstein under the Employment Agreement or under any
other plan, agreement or arrangement applicable to Mr. Bernstein, is subject to
an excise tax imposed pursuant to Section 4999 of the Code (relating to "excess
parachute payments," as defined in Code Section 280G), Mr. Bernstein will be
entitled to receive a cash "gross-up" payment from the Company in an amount
sufficient to indemnify him for the amount of any such excise tax on an
after-tax basis. Mr. Bernstein is subject to covenants not to compete under the
Employment Agreement during the term of employment and for a period of 12 months
following separation of service, regardless of the reason.

         A copy of the Employment Agreement is attached hereto as Exhibit 10.1.

         In addition, on June 21, 2005, the Company entered into an Indemnity
Agreement with Mr. Bernstein. The Indemnity Agreement is in the form executed by
all directors, officers or agents of the Company or the Company's subsidiaries,
and provides that in addition to the Company's general obligation to maintain
directors' and officers' liability insurance, the Company will, subject to
certain conditions, indemnify and defend in whole or in part, such directors,
officers or agents of the Company or the Company's subsidiaries in connection
with their service to the Company and its subsidiaries.

         The Indemnity Agreement entered into with Mr. Bernstein is
substantially identical in all material respects (except as to the parties
thereto and the date) to the Indemnity Agreement filed with the Securities and
Exchange Commission as Exhibit 10.47 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2003.



Item 9.01.        Financial Statements and Exhibits.

(c)      Exhibits

10.1     Employment Agreement by and between InterDigital Communications
         Corporation and Bruce Bernstein dated June 20, 2005.




                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.


                             INTERDIGITAL COMMUNICATIONS CORPORATION


                             By: /s/ R.J. Fagan
                                 -----------------------------------------------
                                 Richard J. Fagan
                                 Chief Financial Officer



Dated:  June 22, 2005




                                  EXHIBIT INDEX


Exhibit No.                                Description
- -----------                                -----------

10.1                        Employment Agreement by and between InterDigital
                            Communications Corporation and Bruce Bernstein dated
                            June 20, 2005.

EX-10.1

                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT is made as of this 20th day of June, 2005, by
and between Bruce Bernstein (the "Employee"), and InterDigital Communications
Corporation, a corporation organized and existing under the laws of Commonwealth
of Pennsylvania (the "Company").

         WHEREAS, the Company is engaged in the business of design and
development of advanced wireless technologies and products that drive voice and
data communications and the licensing of wireless digital technology and
patents, as such business may be redefined from time to time and as further
described as such in the Company's then current Annual Report on Form 10-K (the
"Business").

         WHEREAS, the Company has offered Employee employment as General Patent
Counsel, and Employee is willing to accept such offer, as set forth in this
Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:

1.       Employment and Term. The Company hereby employs Employee and Employee
hereby accepts at-will employment with the Company, as General Patent Counsel of
the Company (such position, Employee's "Position") for a period commencing on
June 20, 2005, and continuing until employment hereunder is terminated pursuant
to the provisions of Section 9 hereof (the "Term").

2.        Duties. During the Term, Employee shall serve the Company faithfully
and to the best of his ability and shall devote his full time, attention, skill
and efforts to the performance of the duties required by or appropriate for his
Position. Employee agrees to assume such duties and responsibilities as may be
customarily incident to such position, and as may be assigned to Employee from
time to time by the Chief Executive Officer of the Company or his or her
designee. Employee shall report initially to the Chief Executive Officer of the
Company.

3.       Other Business Activities. During the Term, Employee will not, without
the prior written consent of the Company, directly or indirectly engage in any
other business activities or pursuits whatsoever, except (i) activities that do
not interfere with the timely completion of Employee's job duties or otherwise
conflict with or limit Employee's ability to serve the Company faithfully and to
the best of his ability, and (ii) activities in connection with any charitable
or civic activities, personal investments and serving as an executor, trustee or
in other similar fiduciary capacity; provided, such activities do not interfere
with his performance of his responsibilities and obligations pursuant to this
Agreement. Employee's engagement in such other activities shall, in each case,
be consistent with the Company's Code of Conduct.

4.       Compensation.

         A. Base Salary. The Company shall pay Employee, and Employee hereby
agrees to accept, as compensation for all services rendered hereunder and for
Employee's covenant not to compete covenants as provided for in Section 8
hereof, a base salary at the annual rate of Two Hundred Sixty Five Thousand
Dollars ($265,000.00) (subject to any upward adjustment from time to time in the
Company's sole discretion in accordance with Company compensation policies, the
"Base Salary"). The Base Salary shall be inclusive of all applicable income,
social security and other taxes and charges which are required by law to be
withheld by the Company or which are requested to be withheld by Employee, and
which shall be withheld and paid in accordance with the Company's normal payroll
practice for its similarly situated executive employees from time to time in
effect. Nothing in this provision shall be construed to alter Employee's status
as an employee at will.



          B.        Signing Bonus. Employee shall be paid a signing bonus of Ten
Thousand Dollars ($10,000.00) to be paid with the first regular payroll
following Employee's date of hire.

          C.        Annual Incentive Bonus. Employee shall be eligible to
participate in the Company's Annual Employee Bonus Plan, as amended from time to
time (the "Bonus Plan"), commencing in 2005 on the terms and conditions no less
favorable than those provided to similarly situated executive employees.
Employee shall have an initial target bonus level of 40% of Base Salary, based
on the achievement of goals to be set by the Compensation Committee and Chief
Executive Officer in their sole discretion. The bonus shall be subject to the
terms of the Bonus Plan, as amended from time to time in the Company's sole
discretion.

          D.       Long Term Compensation Plan. Employee shall be eligible to
participate in the Company's Long-Term Compensation Plan ("LTCP"), as it may be
amended from time to time in the Company's sole discretion. Employee's initial
target level shall be 80% of Base Salary, subject to the vesting, payment and
other provisions of the LTCP.

          E.      Stock Options. Effective on the first date of Employee's
employment with the Company and as approved by the Compensation Committee of the
Board of Directors, Employee will be granted non qualified options to purchase
20,000 shares of the Company's common stock at an exercise price equal to the
closing market price on the NASDAQ of the Company's common stock on the date of
grant as reported in the Wall Street Journal or if not a day the stock is traded
on NASDAQ, the next business day. Such options shall be granted pursuant to, and
shall be governed by, the terms and conditions of the Company's 2000 Stock Award
and Incentive Plan and the terms and conditions in effect thereunder (together,
the "2000 Plan"). Subject to such terms and conditions of the 2000 Plan, the
stock options shall vest in six installments as follows:

         June 30, 2005                               3,333 shares
         December 31, 2005                           3,333 shares
         June 30, 2006                               3,333 shares
         December 31, 2006                           3,333 shares
         June 30, 2007                               3,334 shares
         December 31, 2007                           3,334 shares


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5.        Benefits and Expenses.

          A.    Company Plan Participation. Employee and his dependants shall be
entitled to receive those employee benefits (including without limitation
medical plan, dental plan, optional 401K participation, "Flexible Perks" program
and expense reimbursement) as shall be provided to similarly situated executive
employees of the Company ("Benefits").

          B.    Paid Time Off. Employee will be eligible for 23 days Paid Time
Off ("PTO") (subject to any increase from time to time in accordance with
Company policy), with the ability to carry over any unused PTO earned in a given
year to the following year up to a maximum of one year's PTO accrual.

          C.    Tax Gross Up. In the event any amount or benefit payable to
the Employee under this Agreement or under any other plan, agreement or
arrangement applicable to the Employee, is subject to an excise tax imposed
under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
(or imposed under any successor provision of the Code imposing a tax liability
on "excess parachute payments" as that term is defined in Code Section 280G),
Employee shall be entitled, in addition to any other amounts payable under the
terms of this Agreement or under any other plan, agreement or arrangement
applicable to the Employee, to a cash payment in an amount sufficient to
indemnify the Employee (or such other person as may be liable for the payment of
such excise tax) for the amount of any such excise tax, and leaving Employee
with an amount, net after all federal, state and local taxes, equal to the
amount Employee would have had if no portion of his benefit under the Plan
constituted an "excess parachute payment". Notwithstanding the foregoing, the
determination of the amount necessary to indemnify the Employee shall be made
taking into account all other payments made to the Employee under any plans,
agreements or arrangements aside from this Agreement that are intended to
indemnify the Employee with respect to excise taxes on "excess parachute
payments." Any disputes as to calculations to be made under this paragraph shall
be resolved by the Company's independent auditors, whose determinations shall be
final and binding.

          D.      Nonqualified Deferred Compensation. If any payment to
Executive under the terms of this Agreement is determined to constitute a
payment of nonqualified deferred compensation for purposes of Section 409A of
the Code, such payment shall be delayed until the date that is six months after
the date of Executive's separation from service with the Company, so as to
comply with the special rule for certain "specified employees" set forth in Code
Section 409A(a)(2)(B)(i) unless it is determined that immediate distribution is
permissible (and does not trigger any additional tax liability pursuant to Code
Section 409A(a)(l)) pursuant to Code Section 409A(a)(2)(A)(v) by reason of being
payable in connection with a change in the ownership or effective control of the
Company or in the ownership of a substantial portion of the assets of the
Company or is otherwise determined not to be subject to such additional tax
liability.

6.               Confidentiality. Employee recognizes and acknowledges that the
Proprietary Information (as hereinafter defined) is a valuable, special and
unique asset of the Business of the Company. As a result, both during the Term
and thereafter, Employee shall not, without the prior written consent of the
Company, for any reason either directly or indirectly divulge to any third party
or use for his own benefit, or for any purpose other than the exclusive benefit
of the Company, any confidential, proprietary, business and technical
information or trade secrets of the Company or of any subsidiary or affiliate of
the Company ("Proprietary Information") revealed, obtained or developed in the
course of his employment with the Company. Such Proprietary Information shall


                                       3


include, but shall not be limited to, the intangible personal property described
in Section 7B hereof, any information relating to methods of production and
manufacture, research, computer codes or instructions (including source and
object code listings, program logic algorithms, subroutines, modules or other
subparts of computer programs and related documentation, including program
notation), computer processing systems and techniques, concepts, layouts,
flowcharts, specifications, know how, any associated user or service manuals or
other like textual materials (including any other data and materials used in
performing the Employee's duties), all computer inputs and outputs (regardless
of the media on which stored or located), hardware and software configurations,
designs, architecture, interfaces, plans, sketches, blueprints, and any other
materials prepared by the Employee in the course of, relating to or arising out
of his employment by the Company, or prepared by any other Company employee,
representative, or contractor for the Company, or its customers, costs, business
studies, business procedures, finances, marketing data, methods, plans and
efforts, the identities of licensees, strategic partners, customers, contractors
and suppliers and prospective licensees, strategic partners, customers,
contractors and suppliers, the terms of contracts and agreements with licensees,
strategic partners, customers, contractors and suppliers, the Company's
relationship with actual and prospective licensees, strategic partners,
customers, contractors and suppliers and the needs and requirements of, and the
Company's course of dealing with, any such actual or prospective licensees,
strategic partners, customers, contractors and suppliers, personnel information,
customer and vendor credit information, and any other materials that have not
been made available to the general public, provided, that nothing herein
contained shall restrict Employee's ability to make such disclosures during the
course of his employment as may be necessary or appropriate to the effective and
efficient discharge of the duties required by or appropriate for his Position or
as such disclosures may be required by law; and further provided, that nothing
herein contained shall restrict Employee from divulging or using for his own
benefit or for any other purpose any Proprietary Information that is readily
available to the general public so long as such information did not become
available to the general public as a direct or indirect result of Employee's
breach of this Section 6. Failure by the Company to mark any of the Proprietary
Information as confidential or proprietary shall not affect its status as
Proprietary Information under the terms of this Agreement. Notwithstanding the
above, nothing in this Section 6 shall be construed to limit Employee's right to
use and disclose to others general knowledge relating to the practice of law and
the industry in which the Business is conducted.

7.        Property.

          A.    Ownership. All right, title and interest in and to Proprietary
Information shall be and remain the sole and exclusive property of the Company
(or its partners, customers, vendors, etc., as the case may be). During the
Term, Employee shall not remove from the Company's offices or premises any
documents, records, notebooks, files, correspondence, reports, memoranda or
similar materials of or containing Proprietary Information, or other materials
or property of any kind belonging to the Company unless necessary or appropriate
in accordance with the duties and responsibilities required by or appropriate
for his Position and, in the event that such materials or property are removed,
all of the foregoing shall be returned to their proper files or places of
safekeeping as promptly as possible after the removal shall serve its specific
purpose. Employee shall not make, retain, remove and/or distribute any copies of
any of the foregoing for any reason whatsoever except as may be necessary in the
discharge of his assigned duties and shall not divulge to any third person the
nature of and/or contents of any of the foregoing or of any other oral or
written information to which he may have access or with which for any reason he
may become familiar, except as disclosure shall be necessary in the performance
of his duties; and upon the termination of his employment with the Company, he
shall leave with or return to the Company all originals and copies of the
foregoing then in his possession or control, whether prepared by Employee or by
others.

                                       4


          B.      Assignment

                (i) Employee agrees that all right, title and interest in and to
any innovations, designs, systems, analyses, ideas for marketing programs, and
all copyrights, patents, trademarks and trade names, and similar intangible
personal property which have been or are developed or created in whole or in
part by Employee (1) at any time and at any place while the Employee is employed
by Company and which, in the case of any or all of the foregoing, are related to
and used in connection with the Business of the Company, (2) as a result of
tasks assigned to Employee by the Company, or (3) from the use of premises or
personal property (whether tangible or intangible) owned, leased or contracted
for by the Company (collectively, the "Intellectual Property"), shall be and
remain forever the sole and exclusive property of the Company. The Employee
shall promptly disclose to the Company all Intellectual Property, and the
Employee shall have no claim for additional compensation for the Intellectual
Property. The Company acknowledges that Employee is a named inventor on a
pending patent application which the Employee covenants has been disclosed in
writing by the Employee to the Company. Company shall have no ownership right or
other interest in or to the invention, which is the subject of such patent
application, to such patent application itself, to any subsequently filed patent
application(s) claiming priority therefrom, or to any patent(s) that may grant
from any of the foregoing patent applications. Company acknowledges that the
foregoing invention, patent application(s) and patent(s) do not constitute
Intellectual Property.

                (ii)  Employee acknowledges that all the Intellectual
Property that is copyrightable shall be considered a work
made for hire under United States Copyright Law. To the extent that any
copyrightable Intellectual Property may not be considered a work made for hire
under the applicable provisions of the United States Copyright Law, or to the
extent that, notwithstanding the foregoing provisions, the Employee may retain
an interest in any Intellectual Property that is not copyrightable, the Employee
hereby irrevocably assigns and transfers to the Company any and all right,
title, or interest that the Employee may have in the Intellectual Property under
copyright, patent, trade secret and trademark law, in perpetuity or for the
longest period otherwise permitted by law, without the necessity of further
consideration. The Company shall be entitled to obtain and hold in its own name
all copyrights, patents, trade secrets, and trademarks with respect thereto.

                 (iii)  Employee further agrees to reveal promptly all
information relating to the same to an appropriate officer
of the Company and to cooperate with the Company and execute such documents as
may be necessary or appropriate (1) in the event that the Company desires to
seek copyright, patent or trademark protection, or other analogous protection,
thereafter relating to the Intellectual Property, and when such protection is
obtained, to renew and restore the same, or (2) to defend any opposition
proceedings in respect of obtaining and maintaining such copyright, patent or
trademark protection, or other analogous protection.

                                       5


                  (iv)      In the event the Company is unable after reasonable
effort to secure Employee's signature on any of the
documents referenced in Section 7B(iii) hereof, whether because of Employee's
physical or mental incapacity or for any other reason whatsoever, Employee
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Employee's agent and attorney in fact, to act for and in
his behalf and stead to execute and file any such documents and to do all other
lawfully permitted acts to further the prosecution and issuance of any such
copyright, patent or trademark protection, or other analogous protection, with
the same legal force and effect as if executed by Employee.

8.             Covenants. The Employee shall not, during the Term
and thereafter for the Restricted Period (as defined
below), do any of the following, directly or indirectly, in any capacity,
without the prior written consent of the Company, which consent shall not be
unreasonably withheld:

          A. engage or participate in any business directly competitive with the
Company's Business, or the business of any of the Company's subsidiaries or
affiliates, as same are conducted during the Term with respect to any period
during the Term, or upon the termination of Employee's employment hereunder with
respect to any period thereafter arising during the Restricted Period;

          B.        (i) become interested in (as owner, stockholder, lender,
partner, co-venturer, director, officer, employee, agent, consultant or
otherwise) any person, firm, corporation, association or other entity engaged in
any business that is directly competitive with the Business of the Company or
the business of any subsidiary or affiliate of the Company, or (ii) become
interested in (as owner, stockholder, lender, partner, co-venturer, director,
officer, employee, agent, consultant or otherwise) any portion of the business
of any person, firm, corporation, association or other entity where such portion
of such business is directly competitive with the Business of the Company or the
business of any subsidiary or affiliate of the Company. Notwithstanding the
foregoing, Employee may hold not more than one percent (1%) of the outstanding
securities of any class of any publicly traded securities of a company that is
engaged in activities referenced in Section 8A hereof;

          C.        influence or attempt to influence any licensee, strategic
partner, supplier, or customer of the Company or potential licensee, strategic
partner, supplier or customer of the Company to terminate or modify any written
or oral agreement or course of dealing with the Company; or

          D.        influence or attempt to influence any person or entity to
either (i) terminate or modify their employment, consulting, agency,
distributorship or other arrangement with the Company, or (ii) employ or retain,
or arrange to have any person or entity employ or retain, any person or entity
that has been employed or retained by the Company as an employee, consultant,
agent, or distributor of the Company at any time during the twelve (12) month
period immediately preceding the termination of Employee's employment hereunder.

                                       6


          For purposes of this Agreement, the Restricted Period shall constitute
a period ending one (1) year after the date Employee's employment is terminated,
regardless of the reason for termination.

          An activity shall be deemed "directly competitive" when based on
Employee's actual possession (whether or not in tangible form) of technical
information, trade secrets or confidential information of the Company or of any
subsidiary or affiliate of the Company or its business associates,the activity
prohibited would result in the use of such technical or trade secret or
confidential information. As long as such activities are not "directly
competitive", Employee may engage in the following activities during the Term or
during the Restricted Period: engaging or participating in the development of,
management of, consulting in respect of, investment in and/or monetization (by
way of, for example, assertion, enforcement, and licensing) of intellectual
property, or becoming interested in (as owner, stockholder, lender, partner,
co-venturer, director, office, employee, agent, consultant or otherwise) an
entity the principal business of which is the development of, management of,
consulting in respect of, investment in and/or monetization (by way of, for
example, assertion, enforcement, and licensing) of intellectual property, even
when such intellectual property has conflicting or overlapping scope with
respect to and/or relates to the same technical field(s) as the Company's
Intellectual Property (for example, where such intellectual property includes
patents and/or patent applications relating to wireless technologies and
products that drive voice and data communications) or (at any time after
termination of Employee's employment hereunder) practicing in the legal
profession,whether in-house or in private practice.

          In the case of Employee's termination, for any reason, or Employee's
notice of his desire to terminate employment, Employee shall specify in writing
the name of the employer (if any) the Employee intends to accept future
employment with during the Restricted Period and the nature of the proposed
employment. Thereafter, Company shall render its decision whether or not the
Company believes such employment would violate Section 8A or 8B above with
respect to the proposed employment and shall notify Employee in writing of such
determination within fourteen (14) days of Employee's written notice of the
proposed employer and nature of proposed employment.

Termination. Employee's employment hereunder may be terminated during the Term
upon the occurrence of any one of the events described in this Section 9. Upon
termination, Employee shall be entitled only to such compensation and benefits
as described in this Section 9.

9.        Termination by Employee. Employee may terminate Employee's employment
hereunder at any time, for Good Reason or without Good Reason, effective upon
the date designated by Employee in written notice of the termination of his
employment hereunder pursuant to this Section 9A. For purposes of this
Agreement, Good Reason shall mean (i) the failure by the Company to pay in a
timely manner Base Salary or any other material form of compensation or material
Benefit to be paid or provided to Employee which failure is not cured within ten
(10) business days after notice to Company, or (ii) a change in the location of
the Company office where Employee's office is maintained beyond a radius of 100
miles from the location of that office on June 20, 2005. In the event of a
termination of Employee's employment hereunder pursuant to this Section 9A, this
Agreement shall terminate effective upon the passage of 10 days without cure if
for Good Reason, otherwise upon receipt by Company of Employee's notice of

                                       7


termination. In such event, Employee's rights to compensation and benefits
hereunder shall terminate as of the date of termination, except that Employee
shall be eligible for the accrued and unpaid Base Salary, employee benefits
(including expense reimbursement) as provided herein ("Benefits") in accordance
with the terms of the respective benefit plans or their terms and conditions as
in effect at the time, and other forms of compensation payable herein ("Other
Compensation") up through the date of termination. In addition, solely if such
termination is for Good Reason and provided Employee signs Company's standard
form termination letter as provided for in Section 10 below, Employee shall be
eligible to receive (i) continued payment of Employee's Base Salary, and (ii)
continued payment (during COBRA) of the Company's portion of the premium for
medical and dental coverage on terms and conditions comparable to those most
recently provided to the Employee pursuant to this Agreement, both for the
period of twelve (12) months commencing upon the Effective Date of the
Employee's release as defined in Section 10 below. Such severance payments shall
be inclusive of all applicable income, social security and other taxes and
charges which are required by law to be withheld by the Company and shall be
withheld and paid in accordance with the Company's normal payroll practice for
its employees from time to time in effect. Except as specifically set forth in
this Section 9A, all Base Salary, Benefits and Other Compensation shall cease at
the time of such termination, subject to the terms of any benefit or
compensation plan then in force and applicable to Employee. Except as
specifically set forth in this Section 9A, the Company shall have no liability
or obligation to Employee or any other person claiming under or through him for
compensation or benefits hereunder by reason of such termination.

          B.      Termination for Cause. If the Company terminates Employee's
employment for Cause, then this Agreement shall terminate immediately and
Employee's rights to compensation and benefits hereunder shall terminate as of
the date of termination, except that Employee shall be eligible for the accrued
and unpaid portion of his Base Salary, Benefits and Other Compensation up
through the date of termination. For purposes of this Agreement, the term
"Cause" shall mean (i) any material breach of Employee's employment obligations
under this Agreement toward which there is no substantial progress to cure
thirty (30) days after Employee's receipt of written notice of such breach from
the Company, or (ii) Employee commits an act or omission which results in or is
intended to result in gain or enrichment of Employee at the expense of Company;
or (iii) an act by Employee involving any type of willful misconduct with
respect to the Company, including without limitation fraud, embezzlement, theft
or dishonesty in the course of his employment; or (iv) during the term of
Employee's employment, Employee's conviction of a felony. Except as specifically
set forth in this Section 9B, the Company shall have no liability or obligation
to Employee or any other person claiming under or through him for compensation
or benefits hereunder by reason of such termination.

          C.       Termination on Death. If Employee dies, then this Agreement
shall terminate immediately and Employee's rights to compensation and benefits
hereunder shall terminate as of the date of death, except that Employee's
executors, legal representatives or administrators shall be eligible for the
accrued and unpaid portion of his Base Salary, Benefits and Other Compensation
up through the date of death. Except as specifically set forth in this Section
9C, the Company shall have no liability or obligation hereunder to Employee's
executors, legal representatives, administrators, heirs or assigns or any other
person claiming under or through him by reason of Employee's death, except that
Employee's executors, legal representatives, administrators, or beneficiaries
may be eligible to receive the payment prescribed under any life, death or
disability benefits plan in which he is a participant as an employee of the
Company, and to exercise any rights afforded under any compensation or benefit
plan then in effect.

                                       8


          D.       Termination for Inability to Perform. In the event of a long
term disability of the Employee (as such term is defined in the Company's Long
Term Disability Plan) such that the Employee is not otherwise qualified to
perform the essential functions of the Position with or without reasonable
accommodation ("Inability to Perform"), Employee's employment hereunder may be
terminated by the Company. In such event, this Agreement shall terminate on the
date of termination and Employee will be eligible to receive all accrued and
unpaid Base Salary and Benefits and Other Compensation, including payments
prescribed under any disability insurance plan or arrangement in which Employee
is a participant. Except as specifically set forth in this Section 9D, the
Company shall have no liability or obligation to Employee or any other person
claiming under or through him for compensation or benefits hereunder by reason
of Employee's disability or such termination. The foregoing shall not limit the
Company's obligations to comply with the Americans With Disabilities Act.

          E.       Termination Without "Cause". The Company may terminate
Employee's employment hereunder at any time, for any or no reason, without
cause, effective upon the date designated by the Company. In the event Company
terminates Employee's employment without Cause or due to Inability to Perform,
as set forth above, this Agreement shall terminate on the date of termination
and Employee shall be eligible to receive all accrued but unpaid Base Salary,
Benefits and Other Compensation up to the date of termination. In addition,
provided Employee signs Company's standard form termination letter as provided
for in Section 10 below, Employee shall be entitled to receive (i) continued
payment of Employee's Base Salary, and (ii) continued payment (during the
applicable COBRA period) of the Company's portion of the premium for medical and
dental coverage on terms and conditions comparable to those most recently
provided to the Employee pursuant to this Agreement, both for the period of
twelve (12) months commencing upon the Effective Date of the release as defined
in Section 10 below. Such payments shall be inclusive of all applicable income,
social security and other taxes and charges which are required by law to be
withheld by the Company and shall be withheld and paid in accordance with the
Company's normal payroll practice for its employees from time to time in effect.
Except as specifically set forth in this Section 9E, the Company shall have no
liability or obligation to Employee or any other person claiming under or
through him for compensation or benefits hereunder by reason of such
termination.

          F.      Termination for Absenteeism

                  (i) Regular attendance at work or in conducting work is an
essential element of Employee's Position. Without limiting the Company's right
to terminate Employee pursuant to Section 9B or 9D herein, in the event that
Employee is absent for more than one hundred and fifty (150) days within any
rolling twelve (12) month period, Employee's employment hereunder may be
terminated by Company.

                 (ii)  In the event of a termination of Employee's
employment hereunder pursuant to Section 9F(i), Employee will
be eligible to receive all accrued and unpaid (as of the date of such
termination) Base Salary and Benefits and Other Compensation, including payments
prescribed under any disability or life insurance plan or arrangement in which

                                       9


Employee is a participant or to which Employee is a party as an employee of the
Company. In addition, provided Employee signs Company's standard form
termination letter as provided for in Section 10 below, Employee shall be
entitled to receive (i) continued payment of Employee's Base Salary, and (ii)
continued payment (during the applicable COBRA period) of the Company's portion
of the premium for medical and dental coverage on terms and conditions
comparable to those most recently provided to the Employee pursuant to this
Agreement (to the extent such coverage is not provided under other Company
policies, plans or programs relating to Disability), both for the period of
twelve (12) months commencing upon the Effective Date of the release as defined
in Section 10 below. Such severance payments shall be inclusive of all
applicable income, social security and other taxes and charges which are
required by law to be withheld by the Company and shall be withheld and paid in
accordance with the Company's normal payroll practice for its employees from
time to time in effect. Such severance amounts shall be reduced by the amount of
payments received by the Employee with respect to this period pursuant to any
Social Security entitlement or any long term disability or any other employee
benefit plan, policy or program maintained to provide benefits in the event of
disability in which the Employee was entitled to participate at the time of
termination under Section 9F(i). Except as specifically set forth in this
Section 9F(i), the Company shall have no liability or obligation to Employee or
any other person claiming under or through him for compensation or benefits
hereunder by reason of such termination.

          G.      Change of Control.

                  (i) If there is a Change of Control during the Term, and
Employee's employment with the Company hereunder is terminated within one (1)
year following such Change of Control by the Company (except for Cause) or by
Employee (whether or not for Good Reason) Employee shall be eligible to receive
all accrued but unpaid (as of the effective date of such termination) Base
Salary, Benefits and Other Compensation. In addition, under these circumstances,
provided Employee signs Company's standard form termination letter as provided
for in Section 10 below, (i) Employee shall be eligible to receive, on the
Effective Date as defined in Section 10 below, (i) an amount equal to two (2)
years' worth of Employee's Base Salary, and (ii) all stock options granted to
Employee by Company which pursuant to the terms of the applicable option plan
vest upon a "change in control" or "change of control" (as defined under that
plan) shall vest, and (iii) all restrictions on restricted stock and RSUs, to
the extent the Company in its sole discretion subsequently grants such
securities, which pursuant to the terms of the applicable restricted stock plan
lift (including as to vesting) shall be lifted. Such payments shall be inclusive
of all applicable income, social security and other taxes and charges which are
required by law to be withheld by the Company. Except as specifically set forth
in this Section 9G, all Base Salary, Benefits and Other Compensation shall cease
at the time of such termination, subject to the terms of any benefit or
compensation plans then in force and applicable to Employee, and the Company
shall have no other liability or obligation hereunder to Employee or any other
person claiming under or through him by reason of such termination.

                   (ii)  For purposes of this Section 9G, a "Change of
Control" means the acquisition (including by merger or
consolidation, or by the issuance by the Company of its securities) by one
Person or more than one Person in one transaction or a series of related
transactions, of more than fifty percent (50%) of the voting power represented
by the outstanding stock of the Company on the date hereof or a sale of
substantially all of the assets of the Company. A "Change of Control" shall not
include a corporate reorganization of the Company. For these purposes, "Person"
means an individual, partnership, corporation, joint venture, association,
trust, unincorporated association, other entity or association.

                                       10


10.       Termination Letter. As a condition precedent to the Company's payment
of severance and continuation of medical and dental insurance coverage pursuant
to Sections 9A, 9E, 9F and 9G above, Employee must sign and deliver to Company
the Company's form of termination letter, without revocation, which includes a
broad based employment release (containing, without limitation, a release of
claims for age discrimination), an obligation to return Company property and a
reiteration of Employee's confidentiality and other post-termination obligations
and restrictions, within the time frame specified in the termination letter. The
Effective Date of the release shall be the day after Employee's right to revoke
the release has expired.

11.       Company Understanding. The Company does not want to benefit from any
proprietary or other information, in any form, that Employee is under a duty not
to use or divulge, whether it be from Employee's current employer or any other
person or entity. Accordingly and as a condition of employment hereunder,
Employee is instructed not to violate the terms of any such restriction or
otherwise breach said duty. In furtherance thereof, and without limiting other
action, Employee represents and warrants to the Company that:

          A.   Except as otherwise previously disclosed to Company (with respect
to the Agreement dated October 26, 2001, between Employee and BTG International,
Inc.), to Employee's knowledge, there are no restrictions, agreements or
understandings whatsoever to which Employee is a party which would prevent or
make unlawful Employee's execution of this Agreement or Employee's employment
hereunder, or which are or would be inconsistent or in conflict with this
Agreement or Employee's employment hereunder, or would prevent, limit or impair
in any way the performance by Employee of his obligations hereunder;

          B.  Employee's execution of this Agreement and Employee's employment
hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which Employee is a party or by which
Employee is bound, and

          C.  Employee is free to execute this Agreement and to enter into the
employ of the Company pursuant to the provisions set forth herein.

          D.  Employee will comply with the Agreement dated October 26, 2001
between Employee and BTG International, Inc.

12.       Survival of Provisions. Notwithstanding anything in this Agreement to
the contrary, all representations, warranties, obligations of performance,
statements, responsibilities, indemnities, terms or conditions impliedly or
expressly involving performance subsequent to the expiration or termination of
this Agreement, or which cannot be determined to have been fully performed until
after such time, or which by a fair reading of their nature are intended to
survive shall be deemed to survive. If for any reason Employee shall continue to
be employed by the Company following the termination of Employee's employment
under this Agreement, Employee shall have no right to receive any severance or
other payments hereunder until Employee ceases to be employed by the Company,
whereupon Employee's right to severance or other payments, if any, shall be
governed by the provisions of Section 9 hereof with respect to the particular
circumstances involved in the Employee's termination of employment.

                                       11


13.       Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and Employee and their respective successors,
executors, administrators, heirs and/or permitted assigns. Subject to Section
9(G), the Company also may assign this Agreement in connection with any sale or
merger (whether a sale or merger of stock or assets or otherwise) or corporate
reorganization of the Company or the business of the Company. Employee expressly
consents to the assignment of the Confidentiality and Covenant provisions set
forth in Paragraphs 6, 7 and 8 above of this Agreement to any new owner of the
Company's business or purchaser of the Company. Employee may not assign, pledge
or encumber his or her interest in or obligations under this Agreement without
the written consent of the Chief Executive Officer of the Company.

14.       Employee Benefits. This Agreement shall not be construed to be in lieu
or to the exclusion of any other rights, benefits and privileges to which
Employee may be entitled as an employee of the Company under any retirement,
pension, profit sharing, insurance, hospital or other plans or benefits which
may now be in effect or which may hereafter be adopted.

15.       Notice. Any notice or communication required or permitted under this
Agreement shall be made in writing and sent by certified or registered mail,
return receipt requested, by hand delivery, or by recognized overnight courier,
addressed as follows:

                  If to Employee:

                           Bruce Bernstein, either in person or to:

                           111 Glenwood Road
                           Merion Station, PA 19066

                  If to Company:
                           InterDigital Communications Corporation
                           781 Third Avenue
                           King of Prussia, Pennsylvania 19406
                           Attn: General Counsel

          or to such other address as either party may from time to time duly
specify by notice given to the other party in the manner specified above.

16.       Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous discussions,
agreements and understandings of every nature between the parties hereto
relating to the employment of Employee with the Company excepting the
Non-Disclosure and Assignment of Ideas Agreement signed by Employee at the
commencement of Employee's employment with the Company, various forms related to
the commencement of Employee's employment with the Company and Employee's
participation in employee benefit plans offered by the Company (including,
without limitation, option and restricted stock agreements), and agreements to
be bound by Company policies to the extent that these other agreements do not
conflict with the terms of this Agreement. This Agreement may not be changed or
modified, except by an Agreement in writing signed by each of the parties
hereto.

                                       12


17.       Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

18.       Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without reference
to conflict of laws principles.

19.       Invalidity. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the validity of any other provision of this Agreement, and such
provision(s) shall be deemed modified to the extent necessary to make it
enforceable.

20.       Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

21.       Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and legal
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or day which is a holiday in the Commonwealth of Pennsylvania,
then such final day shall be deemed to be the next day which is not a Saturday,
Sunday or legal holiday.

22.       Specific Enforcement; Extension of Period.

          A.   Employee acknowledges that the restrictions contained in Sections
6, 7, and 8 hereof survive the termination of his employment, regardless of the
reason, are reasonable and necessary to protect the legitimate interests of the
Company and its subsidiaries and affiliates and that the Company would not have
entered into this Agreement in the absence of such restrictions. Employee also
acknowledges that any breach by him of Sections 6, 7, and 8 hereof will cause
continuing and irreparable injury to the Company for which monetary damages
would not be an adequate remedy. The Employee shall not, in any action or
proceeding to enforce any of the provisions of this Agreement, assert the claim
or defense that an adequate remedy at law exists. In the event of such breach by
Employee, the Company shall have the right to enforce the provisions of Sections
6, 7, and 8 of this Agreement by seeking injunctive or other relief in any
court, and this Agreement shall not in any way limit remedies of law or in
equity otherwise available to the Company. If an action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover, in addition to any other relief, reasonable
attorneys' fees, costs and disbursements. In the event that the provisions of
Sections 6, 7, and 8 hereof should ever be adjudicated to exceed the time,
geographic, or other limitations permitted by applicable law in any applicable
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, or other limitations permitted by applicable
law.

          B.   In the event that Employee shall be in breach of any of the
restrictions contained in Section 8 hereof, then the Restricted Period shall be
extended for a period of time equal to that period of time that Employee is in
breach of such restriction. The Company agrees to notify Employee as soon as
practicable following a determination that Employee is in breach of any
restriction contained in Section 8.

                                       13


          C.   In the event that Employee shall be in breach of any of the
restrictions contained in Sections 6, 7 or 8 hereof, Employee shall forfeit his
right to any further payments pursuant to Section 9 (without limiting any other
relief to which the Company may be entitled), but the release in the termination
letter as described in Section 10 will remain in full force and effect.


23.       Consent to Suit. Any legal proceeding arising out of or relating to
this Agreement shall be instituted in the District Court of the Eastern District
of Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in the Commonwealth of
Pennsylvania, and the Employee hereby consents to the personal and exclusive
jurisdiction of such court and hereby waives any objection that the Employee may
have to the laying of venue of any such proceeding and any claim or defense of
inconvenient forum.

24.       Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the day and year first written above.

ATTEST:                                    INTERDIGITAL COMMUNICATIONS
                                           CORPORATION

/s/ Lisa Axt Alexander                     /s/ William J. Merritt
- ------------------------------------       -------------------------------------
By: Lisa Axt Alexander                     By: William J. Merritt
Title: Deputy General Counsel              Title: Chief Executive Officer


EMPLOYEE


/s/ Bruce Bernstein
- ------------------------------------
Bruce Bernstein


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