Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Lump sum is allocated over the contract life
Accrual based accounting recognizes revenue when earned, not when paid. While there are different methods that can be used for the revenue recognition, IDCC has historically used a straight line (equal amounts for each period) amortization over the life of the contract.
Don't hold your breath Data
I would LOVE a PR in about an hour !!!!!
I just called Janet Point to ask her what the expected time lag between Sammy agreement and PR (I don't know that she would've answered), but her message says that she's out of the office today. Just another tea leaf to throw in the cup.
Other thoughts...
On Heartland falling under 5%, it may be due to the fact that IDCC has gone up while most of their other holdings have gone down and it made IDCC too big a percentage of Heartland's holdings. Some funds have restrictions on that. Whatever IDCC was weighted six months ago probably doubled by year end.
On the RSU's, the amount sold to cover taxes looked to be 10-15% in most cases, which is nowhere near enough to cover federal, state and employment taxes on the earnings, so it seems that they weren't anxious to sell right now.
Frank
2009 IRA contributions
Friday, 1/2/09 is the first day you can make your 2009 IRA contributions. If you believe IDCC is going to be heading higher and you are planning to make IRA contributinos for 2009 then putting the money in early will provide you with a better benefit then waiting until the last minute. If you haven't made your 2008 contribution yet you may want to consider getting it in quickly.
Trade date is used for taxes
The date you make the trade determines the transaction date for tax purposes, so any sales made on December 31, 2008 will be reported on your 1099B and your 2008 tax return.
Quartzman, good analysis of IDCC's PE factors
Also add the exceptionally strong balance sheet, soon to get even stronger, which pretty much eliminates the risk of a cash crunch that could put IDCC in a bind, regardless of the overall economy and credit markets.
Here's the 8k
Merry Christmas to all. Haven't read this yet, but it doesn't appear to be anything significant to the financial results, just changes to the bylaws.
Frank
Section 1.1 Registered Office .
The Registered Office of the Corporation shall be at 781 Third Avenue, King of Prussia, Pennsylvania until otherwise changed by the Board of Directors.
Section 2.1 Place of Shareholders’ Meetings .
Meetings of the shareholders shall be held at the Registered Office of the Corporation or at such other place within or without Pennsylvania as the Board of Directors may fix.
Section 2.2 Annual Meeting of Shareholders .
An Annual Meeting of shareholders shall be held in every calendar year at such time as the Board of Directors may fix. At the Annual Meeting of shareholders, directors shall be elected to serve for the ensuing year or until their successors shall be duly elected and qualified, and there shall be transacted such other business as may properly be brought before the Meeting.
A financial report of the Corporation’s business as of the close of the preceding fiscal year shall be presented at the Annual Meeting, and shall be sent to shareholders.
Section 2.3 Special Meetings of Shareholders .
Special Meetings of shareholders may be called at any time by the Chairman of the Board, the President, the Board of Directors, or by the shareholders if permitted by, and in accord with, the Pennsylvania Business Corporation Law. At any time, upon written request of any person entitled to call a Special Meeting, it shall be the duty of the Secretary to fix the date of such Special Meeting to be held not less than five or more than sixty days after the receipt of the request and to give due notice thereof. If the Secretary shall neglect or refuse to fix the date of the meeting and give notice thereof, the person or persons making the request may do so.
Section 2.4 Notice of Shareholders’ Meetings .
Written notice of every meeting of the shareholders, stating the place, the date and hour thereof and, in the case of a special meeting of the shareholders, the general nature of the business to be transacted at such meeting, shall be given to the shareholders either personally or by sending a copy thereof by first class or express mail, postage prepaid, telegram (with messenger service specified), telex, TWX (with answer back received), courier service (with charges prepaid), electronic mail, facsimile transmission or by any other means permitted by the Pennsylvania Business Corporation Law, to such shareholder address (or to his or her telex, TWX, electronic mail address, facsimile number or other place as specified in the Pennsylvania Business Corporation Law), at the direction of the Secretary or, in the absence of the Secretary, any Assistant Secretary, at least ten (10) days prior to the day named for a meeting called to consider a fundamental change under Chapter 19 of the Pennsylvania Business Corporation Law, as it may from time to time be amended, or five (5) days prior to the day named for the meeting in any other case, to each shareholder of record entitled to vote at such meeting on the date fixed as a record date in accordance with these Bylaws, or if no record date be fixed, then of record at the close of business on the tenth (10 th ) day next preceding the day on which such notice is given or, if notice is waived, at the close of business on the day immediately preceding the day of the meeting, at such address (or telex, TWX, facsimile or telephone number or electronic mail address) as appears on the transfer books of the Corporation. Any notice of any meeting of shareholders may also state, provided such is consistent with Section 2.6 of these Bylaws, the quorum requirements for an adjourned meeting.
Section 2.5 Waiver of Notice of Shareholders’ Meetings .
Whenever written notice is required to be given by law, by the Articles or these ByLaws, a written waiver thereof signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Except in the case of a Special Meeting of shareholders, neither the business to be transacted nor the purpose of the meeting need be specified in the Waiver of Notice of such Meeting.
Attendance of a person, either in person or by proxy, at any meeting shall constitute a waiver of notice of such meeting, except where a person attends a meeting for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened.
Section 2.6 Quorum for Shareholders’ Meetings .
a. The presence, in person or by proxy, of the shareholders entitled to cast a majority of the votes which all shareholders are entitled to cast on a matter to be voted upon at a meeting of shareholders shall constitute a quorum, and the acts of such quorum, at a duly organized meeting of shareholders, shall constitute the acts of all the shareholders. The shareholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
b. If a meeting cannot be organized because a quorum is not in attendance, the shareholders present in person or by proxy may, except as otherwise provided by the Pennsylvania Business Corporation Law, adjourn the meeting to such time and place as they may determine, but in the case of any meeting at which directors are to be elected, only from day to day and only as directed by the holders of at least a majority of the shares entitled to be voted at an election of directors. When a meeting is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted, other than by announcement at the meeting at which such adjournment is taken. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally noticed.
Section 2.7 Conduct of Shareholders’ Meetings .
Meetings of the shareholders shall be presided over by the Chairman of the Board, or if he is not present, by the President or, if he is not present, by a Vice President or, if none of the Chairman of the Board or the President or Vice President is present, by a Chairman to be chosen at the meeting. The Secretary of the Corporation or, in his absence, an Assistant Secretary or one temporarily designated as such shall act as Secretary of the meeting.
Section 2.8 Shareholders Participation by Electronic Means .
The right of any shareholder to participate in any shareholder meeting by means of telephone conference, the Internet or other electronic means by which all persons participating in the meeting may hear each other and, in which event, all shareholders so participating shall be deemed present at such meeting, shall be granted solely in the discretion of the Board.
Section 2.9 Voting by Shareholders .
Except as otherwise provided by law or in the Articles, every shareholder of record shall have the right, at every shareholder meeting, to one vote for every share standing in his name on the books of the Corporation. Every shareholder entitled to vote at a meeting of the shareholders or to express consent or dissent to a corporate action in any other fashion may authorize another person to act for him or her by proxy appointed by an instrument in writing (or transmitted by electronic means which results in a writing) executed by such shareholder or by the shareholder’s attorney thereunto duly authorized and delivered to the Secretary. The presence of, or vote or other action at a meeting of shareholders, or the expression of consent or dissent to corporate action by a written proxy of a shareholder, shall constitute the presence of, or vote or action by, or written consent or dissent of the shareholder. Each proxy shall be executed in writing by the shareholder or by the shareholder’s duly authorized attorney-in-fact, and filed with the Secretary. A proxy, unless coupled with an interest, shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until written notice of revocation has been given to the Secretary. An unrevoked proxy shall not be valid after three (3) years from the date of its execution, unless a longer time is expressly provided therein. A proxy shall not be revoked by the death or incapacity of the maker unless, before the vote is counted or the authority is exercised, written notice of such death or incapacity is given to the Secretary.
Directors shall be elected by plurality vote. Any other matter brought before a duly organized meeting for a vote of the shareholders, including, without limitation, the amendment of any Bylaw, shall be decided by a majority of the votes cast at such meeting by the shareholders present in person or by proxy and entitled to vote thereon, unless the matter is one for which a different vote is required by an express provision of the Pennsylvania Business Corporation Law, the Articles or a Bylaw adopted by the shareholders, in any of which cases such express provision shall govern and control the decision on such matter.
All voting and elections shall be taken viva voce unless a vote by ballot shall, in the discretion of the Chairman of the meeting, be stated to be the manner of voting, or unless a vote by ballot shall be demanded by a shareholder before the voting or election begins, or unless otherwise required by law or by the Articles.
Section 2.10 Judges of Election .
In advance of any meeting of shareholders, the Board of Directors may appoint Judges of Election, who need not be shareholders, to act at such meeting or any adjournment thereof. If Judges of Election be not so appointed, the Chairman of the meeting may, and on the request of any shareholder or his proxy shall, make such appointment at the meeting. The number of Judges shall be one or three, and no candidate shall act as a Judge. On request of the Chairman of the meeting or of any shareholder or his proxy, the Judges shall make a report in writing of any challenge or question or matter determined by them and execute a certificate of any fact found by them.
Section 2.11 Record Date .
The Board may fix a time, prior to the date of any meeting of the shareholders, as a record date for the determination of the shareholders entitled to notice of, or to vote at, the meeting, which time, except in the case of an adjourned meeting, shall not be more than ninety (90) days prior to the date of the meeting. Only the shareholders of record at the close of business on the record date so fixed shall be entitled to notice of, or to vote at, such meeting, notwithstanding any transfer of securities on the books of the corporation after any record date so fixed. The Board may similarly fix a record date for the determination of shareholders for any other purpose. When a determination of shareholders of record has been made as herein provided for purposes of a meeting, the determination shall apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting.
Section 2.12 Notice of Shareholder Business and Nominations .
a. Annual Meetings of Shareholders.
(i) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the shareholders at an annual meeting of shareholders may be made (A) pursuant to the Corporation’s notice of meeting, (B) by or at the direction of the Board of Directors or (C) by any shareholder of the Corporation who was a shareholder of record at the time of giving of notice provided for in this Section 2.12, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.12.
(ii) For nominations or other business to be properly brought before an annual meeting by a shareholder pursuant to clause (C) of paragraph (a)(i) of this Section 2.12, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for shareholder action. To be timely, a shareholder’s notice must be received by the Secretary at the principal executive offices of the Corporation not later than the 60th day nor earlier than the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder must be so received not earlier than the 90th day prior to the annual meeting and not later than the later of the 60th day prior to the annual meeting or the 15th day following the day on which public announcement of the date of the meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period for the giving of a shareholder’s notice as described above. A shareholder’s notice shall: (A) set forth, as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (1) the name and address of such shareholder, as they appear on the Corporation’s books, and of such beneficial owner; (2) the class and number of shares of the Corporation which are owned beneficially and of record by such shareholder and such beneficial owner; (3) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such shareholder or beneficial owner, if any, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (4) any proxy, contract, arrangement, understanding or relationship pursuant to which such shareholder or beneficial owner, if any, has a right to vote any shares of any security of the Corporation or has granted any such right to any person or persons, (5) any short interest in any security of the Corporation (for purposes of these Bylaws a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (6) any rights to dividends on the shares of the Corporation owned beneficially by such shareholder that are separated or separable from the underlying shares of the Corporation, (7) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, (8) any performance-related fees (other than an asset-based fee) that such shareholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such shareholder’s immediate family sharing the same household (which information shall be supplemented by such shareholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date) and (9) a representation that such shareholder and beneficial owner intend to appear in person or by proxy at the meeting; (B) set forth, as to each person whom the shareholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 14a-11 thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (C) with respect to each nominee for election or reelection to the Board of Directors, include a completed and signed questionnaire, representation and agreement required by Section 2.13 of these Bylaws; and (D) if the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, set forth (1) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder and beneficial owner, if any, in such business and (2) a description of all agreements, arrangements and understandings between such shareholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such shareholder.
(iii) Notwithstanding anything in paragraph (a)(ii) of this Section 2.12 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation at the annual meeting is increased pursuant to an act of the Board of Directors of the Corporation and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors on or before the date which is 15 days before the latest date by which a shareholder may timely notify the Corporation of nominations or other business to be brought by a shareholder in accordance with paragraph (a)(ii) of this Section 2.12, a shareholder’s notice required by this Section 2.12 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the 15th day following the day on which such public announcement is first made by the Corporation.
b. Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Corporation who is a shareholder of record at the time of giving of notice provided for in this paragraph (b), who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this paragraph (b). In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any such shareholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the shareholder’s notice required by paragraph (a)(ii) of this Section 2.12 shall be received by the Secretary at the principal executive offices of the Corporation not earlier than the 90th day prior to such special meeting and not later than the later of the 60th day prior to such special meeting or the 15th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period for the giving of a shareholder’s notice as described above.
c. General.
(i) Only such persons who are nominated in accordance with the procedures set forth in this Section 2.12 shall be eligible to serve as directors and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.12. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.12 and, if any proposed nomination or business is not in compliance with this Section 2.12, to declare that such defective proposal or nomination shall be disregarded.
(ii) For purposes of this Section 2.12, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(iii) If the Corporation is required under Rule 14a 8 under the Exchange Act to include a shareholder’s proposal in its proxy statement, such shareholder shall be deemed to have given timely notice for purposes of this Section 2.12 with respect to such proposal.
Nothing in this Section 2.12 shall be deemed to affect any rights of the holders of any series of Preferred Stock to elect directors.
Section 2.13 Submission of Questionnaire, Representation and Agreement
To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 2.12 of these Bylaws) to the Secretary of the Corporation at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
Section 3.1 Board of Directors, Number, Qualification, Elections, Term of Office and Compensation .
The business and affairs of the Corporation shall be managed by a Board of not less than five (5) nor more than fifteen (15) Directors, as may be fixed from time to time by the vote of a majority of the whole Board. Directors shall be of full age, but need not be residents of Pennsylvania or shareholders of the Corporation.
A nominee for any vacancy on the Board of Directors who has not been proposed by the Board of Directors or by the Nomination and Search Committee of the Board may only be proposed for such vacancy if (a) such nomination follows the procedures set forth in Section 2.12 and (b) such nominee meets each of the following criteria: (i) if elected, such nominee would owe a duty of undivided loyalty to the Board of Directors and the Corporation without having any divided loyalties to any other person or entity whose interests are antithetical or adverse to the Corporation; (ii) such nominee has not been indicted or convicted for any crime nor has been the subject of any criminal investigation; (iii) such nominee has not been sanctioned or disciplined by any federal, state or local governmental authority or body or court; (iv) such nominee does not have a personal history which might prove to be an embarrassment to the Corporation in the reasonable judgment of the Board of Directors; (v) such nominee is not subject to the control, direct or indirect, of any competitor of the Corporation; (vi) such nominee meets the objective criteria for independence established by any national securities exchange or association on which the securities of the Corporation are listed; (vii) such nominee does not have any direct or indirect agreement with the Corporation regarding his or her nomination, nor does a third party nominator of such nominee have any such direct or indirect agreement with the Corporation; and (viii) if such nominee was nominated by a third person or entity, then such nominee may not have any of the following relationships with the nominator: (A) if the nominator is a natural person, then the nominee may not be a member of the nominator’s immediate family; (B) if the nominator is an entity, then neither the nominee nor his or her immediate family members may have been an employee of the nominator entity during the current calendar year nor the immediately preceding calendar year; (C) neither the nominee nor any of his or her immediate family members may have accepted, directly or indirectly, any consulting, advisory or other compensatory fee from the nominator (excluding retirement benefits); (D) such nominee may not be an officer or director of the nominator or of any member of a controlled group of which the nominator is a member; (E) such nominee does not control the nominator nor any member of a controlled group of which the nominator is a member; and (F) such nominee may not have been nominated directly or indirectly, by any person or entity which itself would fail the criteria in (i) through (vii) above.
The Directors, other than any who may be elected by the holders of shares of any class or series of stock entitled to elect Directors separately pursuant to the terms of Articles Fifth of the Articles of Incorporation or any resolution or resolutions providing for the issuance of such stock adopted by the Board of Directors shall be classified, with respect to the duration of the term for which they severally hold office, into three classes as nearly equal as possible (each, individually a “Three Year Class”, and collectively the “Three Year Classes”). Such Three Year Class which shall be elected at the Annual Meeting of Shareholders held in 1993 for a term expiring at the Annual Meeting of Shareholders to be held in 1996 shall be designated as “Class A”; the second Three Year Class to be elected at the Annual Meeting of Shareholders held in 1994 for a term expiring at the Annual Meeting of Shareholders to be held in 1997 shall be designated as “Class B”; and the third Three Year Class to be elected at the Annual Meeting of Shareholders held in 1995 for a term expiring at the Annual Meeting of Shareholders to be held in 1998 shall be designated as “Class C”. The Board of Directors shall increase or decrease the number of Directors in one or more classes as may be appropriate whenever it increases or decreases the number of Directors pursuant to this Section 3.1, in order to ensure that the three Three Year Classes shall be as nearly equal in number of possible. At each Annual Meeting of Shareholders, the successors of the class of Directors whose term expires at that meeting shall be elected to hold office for a term expiring at the Annual Meeting of Shareholders held in the third year following the year of their election.
The Board of Directors shall have the authority to fix the compensation of Directors for their services and to authorize payment for expenses of attendance at meetings. A Director may also be a salaried officer or employee of the Corporation.
The Board of Directors may elect a Chairman who shall, when present, preside at all meetings of the Board of Directors and at all meetings of shareholders. The Chairman may appoint another member of the Board to preside in his absence.
Section 3.2 Quorum for Directors’ Meetings .
A majority of the Directors in office shall be necessary to constitute a quorum for the transaction of business, and the acts of a majority of the Directors present at a meeting at which a quorum is present shall be the acts of the Board of Directors. A Director who is present at a meeting shall be counted in determining the presence of a quorum even though a contract or transaction between the Corporation and such Director or another business in which such Director has a financial interest is authorized at the meeting.
Section 3.3 Directors’ Consent in Lieu of Meeting .
Any action which may be taken at a meeting of the Board of Directors or of any Committee thereof may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by all of the Directors or the members of the Committee, as the case may be, and shall be filed with the Secretary of the Corporation. One or more Directors may participate in a meeting of the Board of Directors or a Committee thereof by means of a conference telephone or similar communications equipment by means of which all persons participating in such meeting can hear each other.
Section 3.4 Vacancies in Board of Directors .
Except as otherwise provided for or fixed pursuant to the Articles of Incorporation of the Corporation, newly created directorships resulting from an increase in the number of Directors, and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled exclusively by the vote of a majority of the remaining members of the Board, even though less than a quorum, and shall not be filled by a vote of the shareholders unless there are no members of the Board remaining in office. Any person elected as a Director in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the directorship was created or the vacancy occurred and until such Director’s successor shall have been elected and qualified. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.
Section 3.5 Place of Meeting of Board of Directors .
The meetings of the Board of Directors may be held at such place within Pennsylvania, or elsewhere, as a majority of the Directors may from time to time appoint or as may be designated in the notice calling the meeting.
Section 3.6 Organization Meeting of the Board of Directors .
After the election of Directors by the shareholders, the newly elected Board may meet for the purpose of organization or otherwise:
a. Immediately following their election, or at such time and place as shall be fixed by vote of the shareholders at the Annual Meeting (and in either such case no notice of such meeting to the newly elected Directors shall be necessary in order legally to constitute the meeting, provided a majority of the whole Board shall be present); or
b. At such time and place as may be fixed by consent in writing of all the Directors.
Section 3.7 Regular Meetings of the Board of Directors .
Regular Meetings of the Board of Directors shall be held at such time and place as shall be determined by a majority of the Board.
Section 3.8 Special Meetings of the Board of Directors .
Special Meetings of the Board of Directors may be called by the Chairman of the Board, President or Secretary on at least two days’ notice to each Director, either personally or by mail or by facsimile transmission, of the time and place of such Special Meeting. At the written request of two Directors, Special Meetings shall be called by the Chairman of the Board or President or Secretary in like manner and on like notice.
Section 3.9 Adjournments of Meetings of the Board of Directors .
If a meeting of the Board of Directors is adjourned, it shall not be necessary to give any notice of the adjourned meeting, or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken.
Section 3.10 Powers of Board of Directors .
a. Organizational Meeting: At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the Annual Meeting of shareholders, it shall be the duty of the Board of Directors to elect or appoint the officers of the Corporation.
b. General Powers: The Board of Directors shall have all the power and authority granted by law to Directors except as may be specifically excepted by the Articles or by these ByLaws.
c. Committees: The Board of Directors, by Resolution adopted by a majority thereof, may designate an Executive Committee and one or more other committees, each of which shall consist of at least two Directors and such other Directors as shall be appointed by the Board of Directors to serve as alternate members of any such Committee to replace any absent or disqualified member at any Committee Meeting. In the event that any member of any such Committee shall be absent from or disqualified at such Meeting, the member or members thereof present at any such Meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another Director to act at the Meeting in the place of any such absent or disqualified member. Any such Committee shall have and exercise the authority of the Board of Directors in the management of the business and affairs of the Corporation to the extent provided in the Resolution creating such Committee.
Section 3.11 Removal of Directors by Shareholders or Board of Directors .
Subject to the right of any class or series of stock entitled to elect Directors separately, any Director may be removed from office, with or without assigning any cause, by the affirmative vote of the holders of at least 80% of the combined voting power of the then outstanding shares of stock entitled to vote generally in the election of Directors, voting together as a single class.
The Board of Directors shall have the power to remove any Director from office for cause, as determined by a majority of the members of the Board in office (excluding the member of the Board who is the subject of removal). For purposes of this Section 3.11, “cause” shall be deemed to exist where a Director: (a) has been declared of unsound mind by the order of a court, (b) has been convicted of a felony, (c) has been determined by the Board to have committed a dishonest act involving the Corporation, to have committed a gross abuse of authority or duty in his or her capacity as a Director, or to have intentionally inflicted harm on the Corporation, or (d) commits any other act or omission that is determined by the Board of Directors to constitute cause, consistent with the Pennsylvania Business Corporation Law.
Section 3.12 The Chairman of the Board Powers and Duties .
The Chairman of the Board shall, when present, preside at all meetings of the Board of Directors and at all meetings of shareholders. Unless otherwise directed by the Board of Directors, the Chairman of the Board shall have full power and authority on behalf of the Corporation to attend and act and vote at any meeting of the shareholders of any corporation in which the corporation may hold stock, and at any such meeting he shall possess and may exercise any and all of the rights and powers incident to the ownership of such stock which the Corporation, as the owner thereof, might have possessed and exercised if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons. He shall also do and perform such other duties as from time to time may be assigned to him by the Board of Directors.
Section 3.13 Officers .
The Officers of the Corporation shall be a Chief Executive Officer, a President, a Secretary, and a Treasurer, all of whom shall be elected or appointed by the Board of Directors. The Board of Directors may also elect one or more Vice Presidents, one or more Assistant Treasurers and one or more Assistant Secretaries. Any two or more offices may be held by the same person.
The Board of Directors may at any time also elect or appoint such other officers, assistant officers and agents as it shall deem necessary and as the needs of the Corporation may require. Such other officers, assistant officers and agents shall have such authority and shall perform such duties as from time to time may be prescribed by the Board of Directors.
The Officers shall be elected each year at the organization meeting of the Board of Directors, but if not so elected, they, and any assistant officers or agents the Board of Directors shall desire to appoint, may be elected from time to time during the year. It shall not be necessary for any officer of the Corporation to be a Director.
Section 4.1 The Chief Executive Officer — Powers and Duties .
The Chief Executive Officer shall have responsibility for general supervision and direction of the business of the Corporation, subject to the overall supervision of the Board of Directors. Unless otherwise directed by the Board of Directors, the Chief Executive Officer shall have full power and authority on behalf of the Corporation to attend and act and vote at any meeting of the shareholders of any corporation in which the Corporation may hold stock, and at any such meeting he shall possess and may exercise any and all of the rights and powers incident to the ownership of such stock which the Corporation, as owner thereof, might have possessed and exercised if present. Further, unless otherwise directed by the Board of Directors, the Chief Executive Officer is authorized to execute in the name of the Corporation contracts and other documents requiring the signature of the Corporation. He shall also do and perform such other duties as from time to time may be assigned to him by the Board of Directors.
Section 4.2 The President- Powers and Duties .
The President shall have responsibility for day-to-day supervision and direction of the regular business and operations of the Corporation, subject to the overall supervision of the Board of Directors and the Chief Executive Officer. Unless otherwise directed by the Board of Directors, the President shall have full power and authority on behalf of the shareholders of the Corporation to attend and act and vote at any meeting of the shareholders of any corporation in which the Corporation may hold stock, and at any such meeting shall possess and may exercise any and all of the rights and powers incident to the ownership of such stock which the Corporation, as the owner thereof, might have possessed and exercised if present. Further, unless otherwise directed by the Board of Directors, the President is authorized to execute in the name of the Corporation contracts and other documents requiring the signature of the Corporation. He shall also do and perform such other duties as from time to time may be assigned to him by the Board of Directors.
Section 4.3 General Patent Counsel — Powers and Duties .
The General Patent Counsel shall have the responsibility for the intellectual property portfolio and the management and enforcement of the intellectual property of the Corporation, subject to the policies and directions of the Chief Executive Officer and the Board of Directors. General Patent Counsel shall manage the day-to-day operation of the Patent Department of the Corporation, shall act as the chief legal advisor to the Board of Directors and the Chief Executive Officer in administering the patent and intellectual property matters of the Corporation, and shall have such powers and shall perform such duties as may be from time-to-time assigned to him by the Board of Directors or by the Chief Executive Officer.
Section 4.4 General Counsel — Powers and Duties .
The General Counsel shall have the responsibility for supervision of the legal activities of the Corporation, subject to the policies and directions of the Chief Executive Officer and the Board of Directors. General Counsel shall manage the day-to-day operation of the Legal Department of the Corporation, shall act as the chief legal advisor to the Board of Directors, the Chief Executive Officer and other officers of the Corporation in formulating and administering the legal policies of the Corporation, and shall have such powers and shall perform such duties as may be from time-to-time assigned to him by the Board of Directors or by the Chief Executive Officer.
Section 4.5 The Vice President Powers and Duties .
A Vice President or Vice Presidents shall be elected by the Board of Directors, if the Board of Directors determines that such offices shall be created. The Vice President (or, if there are more than one, then each Vice President) shall have such powers and shall perform such duties as may from time to time be assigned to him or them by the Board of Directors or by the Chairman of the Board or by the President.
Section 4.6 Treasurer Powers and Duties .
The Treasurer shall have the custody of all the funds and securities of the Corporation which may come into his hands. When necessary or proper (unless otherwise ordered by the Board of Directors) he shall (a) endorse for collection on behalf of the Corporation, checks, notes and other obligations, (b) deposit the same to the credit of the Corporation in such banks or depositaries as the Board of Directors may designate and (c) sign all receipts and vouchers for payments made by the Corporation. He shall, at all reasonable times, exhibit his books and accounts to the Board of Directors of the Corporation upon the request of any Director, and he shall also, if so directed by the Board of Directors, annually prepare and submit to the Annual Meeting of the shareholders a full statement of the assets and liabilities of the Corporation and of its transactions during the preceding year, and he shall have such other powers and shall perform such other duties as may be assigned to him from time to time by the Board of Directors. He shall give such bond for the faithful performance of his duties as may be required by the Board of Directors.
Section 4.7 Assistant Treasurer Powers and Duties .
Each Assistant Treasurer shall have such powers and perform such duties as may be assigned to him by the Board of Directors.
Section 4.8 Secretary — Powers and Duties .
Unless otherwise ordered by the Board of Directors, the Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors in proper minute books to be kept for such purpose, and shall attend to the giving of all notices by the Corporation, including notices of meetings, the administration of certificate books, transfer books, the capital stock ledger and such other books and papers of the Corporation as the Board of Directors may direct. The Secretary shall in general perform all the duties incident to the office of Secretary and shall have such other powers and perform such other duties as may be assigned by the Board of Directors. Absent a separate appointment by the Board of Directors, the General Counsel of the Corporation shall serve as the Secretary of the Corporation. In the event the Board of Directors appoints as Secretary someone other than the General Counsel, such person shall report to and work under the supervision of the General Counsel with respect to the duties of the Secretary.
Section 4.9 Assistant Secretary Powers and Duties.
Each Assistant Secretary shall have such powers and perform such duties as may be assigned to him or them by the Board of Directors.
Section 4.10 Removal and Vacancies.
The Board of Directors shall have power to remove any officer from office at any time and shall also have the power to fill any vacancies in any office occurring from whatever reason. Such power shall be exercised by a majority vote of the Directors in office at the time of such removal or vacancy, although less than a quorum.
Section 5.1 Share Certificates .
Every shareholder of record shall be entitled to a share certificate representing the shares owned by him, provided that the shares represented thereby shall have been fully paid for. Such share certificate shall be signed by the Chairman of the Board, President, or a Vice President, and by the Secretary or Treasurer except where such share certificate is signed by a transfer agent or a registrar, in which case the signature of any officer of the Corporation upon such share certificate may be a facsimile, engraved or printed.
Section 5.2 Transfer of Share Certificates .
The transfer of a share certificate and the shares represented thereby shall be made on the books of the Corporation only by the registered owner thereof or by his attorney duly authorized in writing to make such transfer, and only upon surrender of such share certificate, which shall be canceled at the time of transfer.
The Corporation shall be entitled to treat the holder of record of any share certificate or certificates and the shares represented thereby as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share certificate or certificates and shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law or by the Articles.
Section 5.3 Lost Share Certificate .
The holder of any certificate representing shares of stock of the Corporation shall immediately notify the Corporation of any mutilation, loss or destruction thereof, and the Board of Directors may, in its discretion, cause one or more new certificates for the same number of shares in the aggregate to be issued to such holder upon the surrender of the mutilated certificate, or in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction and deposit of indemnity by bond or otherwise in such form and amount and with such surety or sureties as the Board of Directors may require to indemnify the Corporation against loss or liability by reason of the issuance of such new certificate, but the Board may, in its discretion, refuse to issue such new certificates save upon the order of some court having jurisdiction in such matters.
Section 6.1 Fiscal Year .
The fiscal year of the Corporation shall be established by the Board of Directors.
Section 7.1 Indemnification .
a. The Corporation shall indemnify and hold harmless to the fullest extent permitted under the Pennsylvania Business Corporation Law, the Directors’ Liability Act (the “DLA”) and other applicable law, as such laws existed on the date this Section 7.1 was adopted by the Board Of Directors or, except as provided in Section 7.1(f) hereof, as such laws may thereafter by amended (“Pennsylvania Law”), any person who was or is a party or was or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation (collectively, for purposes of this Section 7.1 and Section 7.2 hereof, “Proceeding”), by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director or officer of another corporation, or if a director or officer of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in any such capacity, and may indemnify and hold harmless to the fullest extent permitted under Pennsylvania Law any person who was or is a party or was or is threatened to be made a party to such a Proceeding by reason of the fact that he is or was or has agreed to become an employee or agent of the Corporation, or, if any employee or agent of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, liability and loss (including, without limitation, attorneys’ fees and disbursements, punitive and other damages, judgments, fines, penalties, excise taxes assessed with respect to an employee benefit plan, amounts paid or to be paid in settlement and costs and expenses of any nature) incurred by him in connection with such Proceeding and any appeal therefrom: provided, that such indemnification shall not be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court in a final, binding adjudication to have constituted willful misconduct or recklessness.
b. The Corporation may indemnify and hold harmless to the fullest extent permitted under Pennsylvania Law any person who was or is a party or was or is threatened to be made a party to any Proceeding, by reason of any of his actions in a non official capacity while serving as a director, officer, employee or agent of the Corporation, against expenses, liability and loss including, without limitation, attorneys’ fees and disbursements, punitive and other damages, judgments, fines, penalties, excise taxes assessed with respect to an employee benefit plan, amounts paid or to be paid in settlement and costs and expenses of any nature incurred by him in connection with such Proceeding and any appeal therefrom: provided, that such indemnification shall not be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court in a final, binding adjudication to have constituted willful misconduct or recklessness.
c. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of guilty or nolo contendere, or its equivalent, shall not, of itself, create a presumption that the persons’ conduct constituted willful misconduct or recklessness.
d. Expenses incurred by a director or officer in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of the Proceeding, provided that, if Pennsylvania Law requires, the payment of such expenses shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as mandated in this Section 7.1 or otherwise. Expenses incurred by other employees and agents may be so paid to the extent provided by the Board of Directors, upon receipt of the foregoing undertaking by or on behalf of the employee or agent.
e. The indemnification provided by this Section 7.1 shall be in addition to and not exclusive of any other rights to which those seeking indemnification may be entitled under Pennsylvania Law, or under any ByLaw, agreement executed by the Corporation, insurance policy, fund of any nature established by the Corporation, vote of shareholders or disinterested directors or otherwise. The indemnification so provided by this Section 7.1 or otherwise, may be granted whether or not the Corporation would have the power to indemnify such person under any provision of Pennsylvania Law other than the DLA.
f. The indemnification provisions of this Section 7.1 shall constitute a contract between the Corporation and each of its directors, officers, employees and agents who are or may be entitled to indemnification hereunder and who serve in any such capacity at any time while such provisions are in effect. Any appeal or modification of the indemnification provisions of this Section 7.1 shall not limit any such person’s rights to indemnification (including the advancement of expenses) then existing or arising out of events, acts or omissions occurring prior to such repeal or modification, including, without limitation, the right to indemnification with respect to Proceedings commenced after such repeal or modification based in whole or in part upon any such event, act or omission.
g. The Corporation may create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise may secure or insure in any manner its indemnification obligations, whether arising under or pursuant to this Section 7.1 or otherwise.
h. The Corporation may purchase and maintain insurance to insure its indemnification obligations on behalf of any person who is or was or has agreed to become a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any expense, liability or loss asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Section 7.1 or under any provision of Pennsylvania Law other than the DLA.
i. The indemnification provided by this Section 7.1 shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
j. If Section 7.1 or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer, and may indemnify each employee or agent of the Corporation, as to expenses, liability and loss (including, without limitation, attorneys’ fees and disbursements, punitive and other damages, judgments, fines, penalties, excise taxes assessed with respect to an employee benefit plan, amounts paid or to be paid in settlement and costs and expenses of any nature) incurred by him in connection with any Proceeding, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Section 7.1 that shall not have been invalidated and to the fullest extent permitted by applicable law.
Section 7.2 Limitation on Directors’ Personal Liability .
a. To the fullest extent permitted under the DLA, as it existed on the date this Section 7.2 was adopted or, except as provided in subsection 7.2(e), as such law may thereafter be amended, a director of this Corporation shall not be personally liable for monetary damages as a result of any action or failure to act unless both: (1) the director has breached or failed to perform the duties of his office under Section 8363 of the DLA: and (2) the breach or failure to perform constitutes self dealing, willful misconduct or recklessness.
b. The provisions of this Section 7.2 shall not apply to: (1) the responsibility or liability of a director pursuant to any criminal statute: or (2) the liability of a director for the payment of taxes pursuant to local, state or federal law.
c. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of guilty or nolo contendere, or its equivalent, shall not, of itself, create a presumption that the director breached or failed to perform the duties of his office under Section 8363 of the DLA and that the breach or failure to perform constituted self dealing, willful misconduct or recklessness.
d. Notwithstanding the date of adoption of this Section 7.2, the provisions of Section 7.2 shall apply to any action filed or breaches of performance of duty or any failure of performance of duty by any director on or after January 27, 1987.
e. No amendment to or repeal of this Section 7.2 or the relevant provisions of the DLA shall reduce the limitation on directors’ personal liability for or with respect to any events, acts or omissions of such director occurring prior to such amendment or repeal, including, without limitation, the limitation on personal liability with respect to any Proceedings commenced after such repeal or modification based in whole or in part upon any such event, act or omission.
Section 8.1 Amendments to ByLaws .
The holders of all the shares outstanding and entitled to vote may, by a majority vote, make, alter, amend or repeal any provision of these ByLaws at any Annual or Special Meeting duly convened after notice to the shareholder of the meeting to be held for such purpose, provided, however, that the affirmative vote of the holders of at least 80 percent of the combined voting power of all the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class shall be required to alter, amend or repeal Sections 3.1, 3.4, 3.11 or this Section 8.1, or to adopt any provision inconsistent therewith.
The Board of Directors, by a majority vote of the members thereof, may make, alter, amend or repeal any provisions of these ByLaws at any Regular or Special Meeting, duly convened after notice to the Directors of such purpose. The shareholders shall have the right to change such action by a majority vote of the shareholders entitled to vote thereon at any Annual Meeting which may be duly convened for the purpose of changing such action, after notice to the shareholders entitled to notice thereof, provided, however, that the vote of the holders of at least 80 percent of the combined voting power of all of the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class, shall be required to change such action with respect to Sections 3.1, 3.4, 3.11 or this Section 8.1.
Section 9.1 Control Share Acquisitions .
Subchapter G “Control Share Acquisitions” of Chapter 25 of Title 15 of the Pennsylvania Consolidated Statutes, as existing on July 18, 1990 or as may thereafter be amended, shall not be applicable to the Corporation.
Section 10.1 Disgorgement by Certain Controlling Shareholders .
Subchapter H “Disgorgement by Certain Controlling Shareholders Following Attempts to Acquire Control” of Chapter 25 of Title 15 of the Pennsylvania Consolidated Statutes, as existing on July 18, 1990 or as may thereafter be amended, shall not be applicable to the Corporation.
DATED: DECEMBER 19, 2008
OT - Wash sales
Buying call options on the stock sold is generally considered buying substantially identical stock, which triggers the wash rules. The information posted by Ronny agrees with my understanding of the rules.
ellismd, his answer is absolutely correct
You only get the 0% tax rate on capital gains so long as your total taxable income (including the capital gains) is under the 15% tax bracket. I didn't look them up, but the numbers he gave are very close if not exactly right.
They also upped the age limit on the kiddie tax to 18, and to 23 for students, so if anyone gets the bright idea of gifting stock to their kids so they can sell it, it will still get taxed at the parents rate if the child is subject to kiddie tax.
The above is general info and off the top of my head. Before taking any action check out your particular situation with your tax advisor.
Re: bets on Jan 9 closing price
I'd say that most of the folks here have thousands of bets on the Jan 9 price and beyond. The nice thing is that for most of us whatever the answer is will be much higher than our average cost.
nicmar, the ITC is not a court
They don't set a rate nor assess damages. They just determine if the patent is valid and infringed. If it is, then they issue an injunction. If it can be shown that IDCC has a valid patent that is required to produce a 3G phone, then any manufacturer would have to infringe to make their phone. There is no need to get into how long they've infringed, just are they infringing now. If IDCC can find one valid patent that cover all the infringers (an essential patent), no need to specify every infringed patent. The one wild card that Sammy threw in was the FRAND defense, saying that they had a license. However if we are offering the companies licenses in line with what LG and Samsung agreed to, I don't see that defense holding water. So I do believe that challenging multiple infringers in one case is possible. The combining of the Nokia and Samsung cases support that position. As a practical matter, I do believe that once we get the big dogs in the pound, the strays and mutts will be much easier to sign as the fair market value will be set through multiple agreements, the critical mass of licenses will argue strongly for the strength of IDCCs patents, and the legal fees for the little guys are a much bigger financial burden, so signing is cheaper than fighting to get a license a dime a unit cheaper.
I'm not an lawyer and the above is based on my understanding from the posts here. If any attorneys can correct or clarify my statements, please do.
Data, thanks for your continued contributions. eom
The streets fear is our opportunity
and even more unfortunately, the street in general is preoccupied with just staying alive
The street not reacting to some very positive news provides those of us who do understand this stock with a great opportunity to build our positions at a low cost. Unless you need to sell some stock in the next month, are on the options clock or put yourself in danger of a margin call, having IDCC temporarily undervalued is not a big deal. If you have funds coming available it allows you to buy more at discount prices. I plan on funding my IRAs for 2009 on January 2, so the street ignoring IDCC is a positive for me.
Whizzer, great post.
You really hit the nail on the head.
Nokia is different than Samsung
Apparently Samsung had no place to run, or they would not have agreed to license with IDCC.
Is NOK in a different position than Samsung?
As far as I know, they are in virtualy the same position.
I suggest they will agree with the best terms they think they can get with IDCC on their differences and stay away from the ITC.
The difference is that Samsung was facing an ITC decision that could've banned its products on November 25. They had something to lose by not settling by that date. Nokia successfully delayed their day of reckoning until August. I would be shocked to see Nokia sign before the Samsung contract is done as they would want to glean whatever information they could from the public disclosures. After that, they might want to settle if they got what they thought was a great offer so they could save the legal fees. However I think it is not unlikely that they will fight tooth and nail until the end trying to squeeze every last penny out, just like Samsung did and Ericsson eight long years ago. So I agree with your last statement, but to me that means going through the ITC process to try and gain some leverage.
Mickey, you are misstating Mr. Merritt's position
He has never ever said that we will get $2 a unit from future licensees. He has said that we are currently averaging about $2 a unit on our 3G licenses, and that he hoped to receive an average of $1.50 going forward. (My comment - This is because the ASP will fall over time and IDCC will be adding high volume sellers that get volume discounts to the mix.) He has also stated, as evidenced by the slide show, that they expect their overall licensing revenues to be between $1 - $2 per unit. Therefore I think it is very unlikely that Samsung or any tier one provider will be paying $2 per unit. I personally would be quite happy if they get $1 per unit ($0.80 for prepaid) from the tier ones. That will propel the share price quite nicely.
Mickey, let me put it another way...
I may be dumb as a stump, but you tell me if this makes any sense. A company says it expects to license everyone at $1-$2 a unit and the biggest dogs in the kennel are growling and snapping at them, fighting for the best price. Before Michael Vick turns 'em loose on each other, they back off and make nice. Why would the infringer pay at the highest end of IDCC's range when they could pay that after they got whooped in the fight. I ain't no IP negotiator nor a dog fighting expert, but just common sense says they ain't paying $2 a unit. If I'm wrong, I'll apologize as I slink away to the bank with my big bag o gold.
IDCC free cash flow definition is standard stuff
Interdigital defines "free cash flow" as operating cash flow less purchase of property, equipment, technology licenses and investments in patents. The first 9 months produced over 77 million in free cash flow.
Operating cash flow is the cash generated by the business. It's the profit and loss adjusted for non-cash items (such as the receipt and subsequent amortization (earning) of deferred (prepaid) revenue and depreciation). It is also adjusted to show the actual income received and expenses paid instead of the accrual based amounts. While that shows the cash generated by the business operations, it does not account for capital expenditures or investments. So those items are backed out to arrive at free cash flow - the actual change in cash from one period to the next. IDCCs free cash flow has been outstanding, and as they sign more licenses and collect more for past infringement it is going to be even better. Which reminds me, free cash flow is also reduced by dividend payments. :)
I love this part from the presentation
Recent Samsung Announcement
* Resolves 2G dispute and establishes a new license 3G agreement for sales through 2012.
* Establishes payment options to be selected in early 2009.
I also love seeing the notation on the chart that IDCC has 50% of the market licensed, up from 35%.
The above is a very strong statement from management that the deal is done. I was very confident before this, but now I would be shocked if the contract is not completed. This is beyond "substantial progress towards resolution of all disputes between them." Way cool.
Data, great post
You really stated your case clearly. Thank you very much for your well informed and well reasoned contributions to this board. When you are called negative, it comes from a desire to discredit any but the most optimistic opinions.
You take a lot of flack here and I want to publicly thank you for all your contributions for the nine years I've been following Jim's boards. I appreciate your providing factual information and knowledge based opinions, especially when some post incorrect or overly hopeful predictions.
Thanks,
Frank
Ellismd - a very good analysis
I think it is quite reasonable, not optimistic or conservative. I was about to do a similar post but yours is almost the same. I am thinking that Samsung, Nokia and Sony/Ericssom should be done by Q4 2009.
A couple of minor points. Add $10 -$20 dollars a share for cash on hand, depending on the amounts of prepayments and 2G. I wouldn't assume the expense reduction for legal costs as I'm sure a company flush with funds and success will have other expenses rise.
To be conservative, cut your $5 per share in half and use an ultra consevative estimate of a 10 PE and you have a $25 share price.
So what I see here is a stock that, with mediocre execution, should be selling for $40 - $50 per share within two years. With decent to good agreements, the Houston 100 will be a reality within that time frame. (Aside to Ed F, you had a "gut" feeling of no good news, which, if correct, would've caused IDCC to fall 50% or more, yet after you're rendered "gutless" by the results, you have the audacity to post about how you sold your investments in September except for this little stock that you have consistently belittled. So are a liar or an idiot?)
So what does this all mean to me as an investor? I've gone to 110% invested in IDCC, using margin. I see very limited downside risk, good to great upside. The current weakness in the overall market, combined with the street's lack of respect for IDCC's future prospects, and possibly some manipulation by the shorts to exit ahead of the run has given everyone one last (I hope) fantastic buying opportunity. So my advice is to take any dry powder and buy now. I do not recommend going on margin or buying options as delays and volatility can result in you being right and still losing. For those of us that have been compulsively following this stock for years, this is the opportunity. We understand what the company has, what the risks are, the potential rewards. Now is chance to put all that DD to work.
No need to wish everyone luck. When you study, analyze and take action on your knowledge, success will follow. 2009 will be IDCC's "next year" that we've all been waiting for.
Happy Thanksgiving everyone.
Badgerkid, you may be right
When I asked her about what binding meant, she just referred to the ITC date of February 9. I did not inquire further because I could not envision IDCC choosing to enter into a lenghty legal proceeding to enforce the contract. I say lengthy because I've experienced binding arbitration and the ITC, which are both considered expedited, and I've found both of those to be lengthy. So maybe that was some of my preconcieved notions leading me to an incorrect conclusion.
I still believe that if Samsung does not sign then IDCC will proceed to the Feb 9 ITC decision and not attempt to enforce the binding term sheet.
I do think SAM crippled their ITC case
I'm not an attorney, so that doesn't mean much, but I'm glad to see you had the same thought.
I think any FRAND or equitable estoppel arguments went out the window when SAM agreed to the binding terms sheet. Any attempt to use this as a delaying tactic will not be well received by the ALJ.
I am confident that IDCC has at least one patent that is valid and infringed, so if the bs equitable estoppel and FRAND defenses are now toast, an ITC decision looks even better to me.
Powerful profit engine
Have never seen a more powerful profit engine than a fab line churning out low failure rate chips with a strong market value/demand.
Yup, QCOM. Fixed costs while licensees sales increase by leaps and bounds, with the added revenue falling to the bottom line. I LOVE that model and would be very happy if IDCC were to sell the slim chip and get back to just collecting on their patents.
Revlis, give her a call
The focus of my concern was when will we get financial details on this agreement. I am not very concerned about the exact timing of the contract and payment, so I did not pin her down on that. My understanding from my conversation is that they have 45 days to complete the contract and pay, but if the precise timing of that is important to your investment decision, then you should ask her directly.
No enforcement of binding term sheet
I asked her that given IDCC's experience with binding arbitration with Samsung, how binding is the binding term sheet. She replied that if they did not sign, then there was the ITC ruling February 9.
Above per Janet. Below my thoughts.
My goodness, what kind of masochist would want to enter into another lengthy legal process to enforce a contract, further delaying IDCC getting paid. It's time to move forward. If they don't want to pay a fair rate, get an ITC decision. If you win, then get your price with the leverage of a ban. If not, proceed to court and get a FRAND rate or settle at lower numbers to get a deal done. I believe IDCC does have at least one valid and infringed patent and therefore I'm willing to get a decision. QCOM exploded after it got its big win. I'm sure there was great pressure on them to settle for something that might have tripled the stock price. Would've been a terrible mistake by them. If you've got the goods, get a fair price or get a ruling.
I just spoke with Janet Point
NOTE - This is my summary of the conversation based on my interpretation of what she said.
She confirmed that Samsung has 45 days to complete a contract and make payment within the terms of the binding term sheet. If they do not, then IDCC will proceed to the ITC decision on Feb 9.
I asked her about any release of the financial details. She indicated that no information would be forthcoming until they had a final agreement. I asked if IDCC could make a disclosure using a range based on the term sheet. She said at this time there is no plan to make any financial disclosures until the contract is signed.
It looks like the groundhog came out and saw his shadow, so we have six more weeks of waiting.
Answers we need from IDCC
Many are cheering the big win, but we don't yet know if it was a win (like the LG deal) or a buckle (like the settlement with Ericsson). We have a "binding term sheet" with Samsung. Is that anything like "binding arbitration" with them?
Mr. Merritt said "The agreement is consistent with our long term strategic plan, and reflects well on the strength of our patent portfolio and our ability to design flexible deal structures." If he was referring to getting $1 - $2 a unit for 3G, then I am absolutely thrilled with the agreement even if it includes giving away some hard earned 2G monies. I sincerely hope the long term strategic plan is not to settle for whatever they can get whenever decisions on patents are about to be announced.
For the risk adverse, this takes away much of the downside risk, but the cost is getting full value on the patents. Until we know the terms, this investor is still undecided on whether the deal is a good one. It seems that I'm the lone holdout.
For those of you who want to chide me for being so negative, please include what you think is a good deal or a bad deal. I remember after Ericsson, those that were the most strident that IDCC would get hundreds of millions were the loudest supporters of what I thought and still think was a poor result. So let's here what you think before the facts are known.
Here's my view:
Poor is anything under 40 cents a unit - should not have settled.
40 cents to 80 cents is fair to good.
80 cents to 1.50 is good to incredible.
The above ranges are increased by 10 cents if we don't get paid for 2006, another 15 cents if we don't get paid for 2007, and penny for every $10 million reduction to the $180 million we are owed for 2G.
My3sons87 - Thanks for posting the info.
Earlier 8K regards IRC Section 409A
I just received an excert from a 66 page presentation on making sure companies are in compliance with the final regulations that the IRS issued last year related to 409A. Apparently there are some pitfalls and companies are advised to modify their plans to insure compliance. My guess is that IDCC's update to their plan that was disclosed in the 8K was caused by the company complying with the updated law.
imalurker, you did misinterpret Loops post
I believe Loop was saying the lower PEs being applied to earnings will cost IDCC a billion in potential market cap GAINS when they hit a home run. If the earnings are $2 a share and IDCC gets a multiple of 14 instead of 25, then IDCC would lose $2 x 11 x 5 million shares = ~ $1 billion.
Questions about the ITC decision
have been addressed by Olddog. Here are the relevent posts. I suggest you (and everyone else) read all of olddog's posts. Good information and no bs.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33180774
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33312046
Regarding how puts are priced
Option prices (puts and calls) are made up of three components. An intrinsic value, a volatility value and a time value. The intrinsic value is the difference between the stock price and the option strike price. If the option is out of the money, then the intrinsic value is zero. The farther out of the money it is, the more it will reduce any volatility or time value. The option price is increased by the expected volatility of the stock. Options on stocks that have wild swings have a high premium, while options on stable stocks have lower premiums. The time value is higher the more time is left, as obviously the more time there is, the more likely it is that the price will move the desired direction during that time.
Yes, the December puts are pricey, but it's because there is a major unknown coming in two weeks that will likely cause a big price movement. The reason some folks may wait until November 24 to buy puts is that they may believe that there is little risk of significant bad news before November 25. The expectation is that the decision will be handed down on the 25th. Why would the judge issue the decision early? He wants a settlement and knows that settlements tend to happen right before the decision, so I doubt he would possibly derail a settlement by announcing a decision early. If one believes that, then waiting makes very good sense. If there is a settlement before then there is no need to buy a put. It also will tend to reduce the time premium. However in IDCC's current situation, I don't think it will affect it much. The time premium is right now is greatly influenced by the ITC date because that is the date that something big is likely to happen. I was considering buying some December puts and selling November puts a couple of weeks ago, but the price discrepancy was very large. That makes sense because the big potential for bad news is November 25. If the ITC date was somehow moved to December 26, I believe the December puts and calls would fall significantly.
Someone asked why would you buy puts if you believe that long term IDCC will get paid and the price will be much higher. Well, if you bought some puts and the price does fall, you can sell the puts for a profit and take the proceeds and buy more stock at a cheap price. That way you protect the downside without forfeiting upside potential. Selling the stock and sitting on the sidelines for the decision gives you much better protection (you are selling at $22, not $18 ($20 strike price less $2 premium), but you will miss out on the jump in price on the news. Don't forget to consider the tax ramifications of the trades as well. Long term buy and holders don't have that problem. Everyone has to decide what is best for their situation.
Bulldzr, I agree completely
There is no reason to insult judges or analysts. One can attack their opinion and point out the errors in their opinions to help others here understand the issues. Ridiculing people whose opinions make a difference in this stock has no purpose.
Olddog, thanks for that example
I like that only the summary decision is released publicly. This means that only IDCC and Samsung will what was persuasive to the ALJ. That will put IDCC at an advantage with Nokia. I can't imagine Samsung wanting to help a competitor keep it's costs down, especially one that bailed from their joint case.
Olddog, thanks for all you contribute here.
Frank
Whizzer, thanks for your post.
An excellent summary of the dynamics at play. Well said.
dclarke, are you speaking of yourself?
CCwriter, I have never seen anyone post so confidently and be so wrong. As I posted earlier, I think that management pushed out some payables (ie attorney bills) into Q4 when they have more revenues coming in. In my opinion Ronnie is just a bean counter not a manager of business, there is a big difference as we have seen.
You confidently state that IDCC's reduction in expense is due to "pushing out" some payables by delaying payment under the terms of the invoice. News flash for you - IDCC uses the accrual basis of accounting. Expenses are charged to the period in which they are INCURRED, not when they are paid.
Ronny counts beans based on the information available to him. He cleary states his assumptions and the source for each one. If anyone disagrees, Ronny looks at the input and rationally answers, and makes adjustments when he deems it appropriate. Logical and reasoned. His projections have been historically better than the professional analysts and I've yet to see any of his misses caused by anything that he should've known.
So if you or CCwriter or anyone else don't like Mr. Marchmas generous and valuable contributions to the board, ignore him. If you can't ignore him at least refrain from ignorant criticism until you add some value here.
Data, interpreting your post
Obviously your post shows some folks who are very upset and considering suicide. What I can't tell is if they are traders or lawyers supporting IDCC, Samsung or Nokia. Everyone please take the time to look for clues so we can beat this issue to death with a couple of hundred posts.
Relax everybody. This quarters earnings means almost nothing to the stock price compared to the huge affect of the ITC case less than four weeks from now. If we get to November 25 and there is no announcement, THEN someone can put a very funny video of me going crazy on YouTube. Don't sweat the small stuff.
OT - Rotating image
Right click and select rotate.
Whizzer, that is the compelling argument
that keeps me heavily invested in IDCC. To look at a really conservative estimate, we'll start at break even, assuming that the decreased litigation costs are replaced by other expense increases. We'll assume IDCC gets 25 cents per device, additional licenses only come to 50% of the total market and sales are 10% less than currently projected.
645MM units x 90% x 50% = 290MM additional units licensed
290MM units x $0.25 per unit x 66% kept after tax = $48MM profit.
This results in over $1 per share of income. At a PE of 20 you have a $20 share price.
I would be very disappointed if the above IDCC scenario turned out to be accurate. However it demonstrates how little is priced in at these levels.
This does not take into account the cash on hand that IDCC has now and will grow when 2G amounts are collected (SAMMY alone should add $4 per share), 3G catch up payments when new licenses are signed, or income from chip sales. Also in times like this cash is king. IDCC may find a very good opportunity for an acquisition of a company that has a great future but has liquidity problems. Or they may start paying a regular dividend which would widen the stock's appeal.
The big risks I see are:
1) Delay in getting the contracts signed. The longer it drags out, the less bang for the buck we get. Recurring earnings get multiples, catch up payments do not. Also there is risk that the companies that owe us will not be able to pay... how strong are Nokia, Samsung, Ericksson, Motorola? How will they be affected by the current financial situation?
2) Having our patents found to be invalid or non-essential. I think combined outcomes of the cases so far have shown IDCC's IP to be valid and required, however it is complex and there is always risk when there is a dispute.
The point of all this is that in my very strong opinion, the risk/reward at these levels is strongly skewed towards the positive. Even with what most here would consider very poor execution by IDCC, the potential share price should easily top $30. If they can get 80 cents a unit ($1 - 20% prepayment discount), that translates into a share price of over $60 still using the other conservative projections. IMO, this is the time to buy IDCC. Markets are volatile so you have to be able to put aside your emotions, but now is the time to act.
I think that there is 50/50 chance IDCC settles with SAM between Veteran's Day and Thanksgiving. If not, I think there is a 1/3 chance ALJ rules in IDCC's favor and recommends an injunction. Either way, the price will jump. Of course, this is IDCC, so I would not be shocked to see us back on the litigation merry-go-round, but I'm hoping that this year is the "next year" we've been waiting for for so long.
OT Data,
I love the kitchy pics, audio and video clips you drop in once in a while. I hate to be rude, but you seem to have the same twisted sense of humor I do.