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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): December 21, 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 (IRS Employer
of incorporation) File Number) 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 8.01. Other Events.
On December 21, 2005, the Compensation Committee of the Board of Directors
of InterDigital Communications Corporation (the Company) approved the
acceleration of vesting of all stock options which are scheduled to vest on or
after January 1, 2006. As a result, options to purchase approximately 785,000
shares of the Company's common stock that would otherwise have vested at various
times over the next six years have become fully vested. The Company expects to
record a non-cash pre-tax charge of approximately $0.2 million in fourth quarter
2005 related to the acceleration. Approximately one-half of the options that
were accelerated have strike prices below $17.66, the closing price per share of
the Company's common stock on December 21, 2005.
The acceleration eliminates future compensation expense the Company would
otherwise recognize with respect to these options following the Company's
adoption of FASB Statement No. 123(R), Share-Based Payment, on January 1, 2006.
The acceleration will eliminate a non-cash charge of approximately $7 million
that would have been recognized over the next six years. The Company will
continue to recognize expense for its remaining equity-based incentive programs.
Reporting officers, who hold less than 3% of the accelerated options, have
agreed not to sell the shares related to the accelerated options until the
original vesting date occurs.
In April 2004, InterDigital realigned its equity compensation structure and
substantially reduced the use of stock options as an incentive for a broad group
of managers and executives, opting instead to adopt a new long term compensation
program that includes a performance-based cash component and tenure-based
restricted stock units (RSUs) as a form of equity compensation.
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/ Richard J. Fagan
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Richard J. Fagan
Chief Financial Officer
Dated: December 27, 2005