DannyD re managing the investment not the company, you said:
...”That is also the thing I find most lacking in yourself and others who can point out every flaw in the management team and the business strategy but insist on using the result of that analysis to try to manage the company rather than their investment in the company.”
When you say manage the investment in the company, I assume that you are referring only to investment decisions to buy, sell, or hold, since I have heard you expound this on several occasions. Do you honestly believe that shareholders only have the right to buy, sell, or hold, and nothing else? From the above statement, it appears that is what you are implying.
What about the right to vote for directors; don’t we owners at least have that right in influencing the managing of the company? I will exercise my clear right to vote against Roath’s reelection to the BoD, and try to encourage others to do likewise. I will probably do the same thing next year when Campagna comes up for reelection. It seems to me that the voting decisions and discussions re issues germane to the vote are very much basic rights that shareholders have.
I also believe that shareholders can and should try to affect positive and needed changes in the company. Is trying to help improve a company, the same as trying to manage the company, which you are so against? Didn’t you try to do exactly that when you presented a report directly to IDCC officials on your suggestions for improving communications?
Myself and many others supported your shareholder activism on our behalf, because we all felt that communication was a big problem area at IDCC. If only they would have followed some of your suggestions, because many of us still feel that the communication company still has a problem in communicating with shareholders, analysts, and the Street. However, communication is not IDCC’s only problem area.
I defined eleven specific concerns/problem-areas that I and other shareholders felt could be improved upon at IDCC. A small group of institutional investors and individual shareholders tried to arrange a direct meeting with Campagna in Chicago to go over these concerns in person, but he changed his mind about the meeting and called it off. Therefore some of us sent several emails to IDCC’s BoD detailing the concerns and making suggestions for improvements. A brief summary of those concerns from a January 2003 email as follows:
1. IDCC needs to foster a "shareholder friendly" environment, which would include better treatment of, accountability to, considerations for, and communications with individual and institutional investors.
2. IDCC needs to obtain greater Wall Street coverage from major brokerage firms, from prominent analysts, from more institutional investors, and from leading Wall Street publications. IDCC is a public company and not a privately run company, thus better and more effective communication with Wall Street is imperative.
3. IDCC's compensation committee needs to be expanded from two to include more outside directors. The Chairman of the Board should be taken off this committee due to possible appearances of conflict of interest. The current stock option policies should be thoroughly investigated as to the issues of excessiveness versus reasonableness, and tied to significant increases in shareholder value. There should be overall percentage limits as to the total outstanding options to the total outstanding shares. Also reasonable percentage limits should be established on the stock options granted each year, with an equitable sharing of the options between insiders and other productive IDCC employees.
4. IDCC’s compensation committee needs to review the compensation packages of each company officer and each board member for reasonableness when compared to a large sampling of comparable size/type companies. Officer and director compensation at IDCC should not be significantly more than the average compensations of small-cap technological companies, unless there is clear and documented justification for doing so. This sampling should be fully documented and available upon request.
5. IDCC needs to limit discretionary insider selling to just a few specified exceptions.
Instead IDCC needs to utilize prearranged 10b5-1 Trading Plans for the vast majority of future insider selling and limited to once a year. This policy would help minimize the negative implications normally associated with significant numbers of ongoing discretionary insider sales, while still allowing insider selling to occur, no matter if they have material undisclosed insider information or not.
6. IDCC needs to critically evaluate its current top management team and current board of directors. Is the necessary talent and expertise in place at the highest echelon to take IDCC to the next level, and to turn our small-cap company into a mid-to-large cap company and sustain it there?
7. IDCC needs to have in place before or at the beginning of each year a clearly laid out Business Plan, which should achieve increased shareholder value if properly executed. This plan should include annual goals, accompanying strategies, and milestone measurements. The plan should also provide measurement milestones per quarter for certain goals, such as quarterly revenues/earnings/cash flow. The Business Plan itself and a comparison of actual results to the plan should be clearly communicated to the Board, shareholders, and analysts on an ongoing basis. Company officers should be evaluated by and held accountable for the execution of the Business Plan by the Board.
8. IDCC needs to develop a revenue model that will aid analysts in understanding and projecting IDCC's future revenues. This model should include recurring royalty from existing licensees by product (infrastructure/handsets/other devices), settlement amounts/recurring royalties from anticipated new licensees, engineering services revenues from existing/new partnerships, chip revenues, protocol software revenues, technology transfer revenues, and any other projected revenue source. A good comprehensive revenue model should aid in projecting quarterly revenues, obtaining increased analyst coverage, and providing increased institutional investment in IDCC. This revenue model may have to await resolution of the big three (Nokia, Samsung, Ericy), but should be made available soon afterwards.
9. IDCC needs to adequately disclose how much is riding on the Ericy case. Does a Nokia rate agreement hinge upon Ericy? Do we have pending licenses or memos of understanding with non-licensees, such as Motorola, tied to or contingent upon Ericy? Do we have any existing licensees whose royalty obligations are tied-to, contingent upon, being delayed by, or otherwise affected by the Ericy litigation? How many patents and claims were removed from further trial consideration in Ericy? Were the claims removed from further consideration in the Ericy lawsuit due to favorable rulings from the judge on Ericy’s pretrial motions, mutual consent/agreement, mediation, or pretrial rulings favorable to IDCC? What amount of damages are we seeking from Ericy for past infringement? Are all our legal eggs in this one basket?
10. IDCC needs better disclosures dealing with its existing licensees. Which licensees are we currently receiving recurring royalty payments from, which licensees are we currently earning deferred revenues from, which licensees are we in royalty disputes with, which licensees have prepaid advance balances remaining, which licensees have 2G paid-up provisions and what are the details of these provisions? IDCC also needs more disclosure about the Nokia, Matsushita, and Alcatel licenses?
11. IDCC needs to explain why we are experiencing so much difficulty in obtaining new licensees and updated licenses. If we really have what we claim to have and if we have a licensing team of 8 to 10 attorneys trying to obtain new and updated licenses, then why are we having so much difficulty with licensing? Why haven’t some of our existing licensees, who are now selling 3G products, updated their licenses?
Do you feel that we as shareholder owners do not have the right to try and affect positive change, because this borders on managing the company rather than the investment? Do you think that shareholders shouldn’t send emails to the directors, who are supposed to be the shareholders official representatives re corporate matters? Why is your report and meeting with IDCC officials in trying to improve communications at IDCC not managing the company, but my efforts at trying to get certain things improved at IDCC is managing the company?
AI
