InterDigital Inc (IDCC)

[Corp_Buyer]

Danny- What Analysts Really Think

Since you are so very concerned about what analysts are thinking recently about IDCC regarding compensation and governance issues at IDCC, how do YOU interpret the exchange with Richard Sherman during the latest IDCC 4Q04 conf. call?

It seems Richard Sherman is a sell-side software analyst with Janney Montgomery Scott, a Northeastern regional brokerage subsidiary of Penn Mutual Life. Perhaps Sherman became interested in IDCC as a result of IDCC's recent MUOS software contract through General Dynamics.

From the pointed nature of his questions during the CC, it is apparent that Sherman has STRONG RESERVATIONS about initiating coverage due to the prospect of continued EARNINGS MISSES stemming from the burgeoning management compensation plans, especially the RSU and cash GIVEAWAYS under the LTIP. He referred specifically to "comp plans" and "adversely affected earnings".

And, his rhetorical question about shareholder approval also showed his concern with corporate governance issues at IDCC. From the last CC:

"Richard Sherman, - Analyst [83]

Good morning. Could you summarize the comp plans that you referred to in your release that adversely affected earnings, and could you comment whether these plans were ever presented to the shareholders?

Rich Fagan, InterDigital Communications - CFO [84]

The comp plans were implemented first half of last year... So in 2005 you have elements of two different periods of the program that get expensed.

Richard Sherman, - Analyst [85]

And can you dimensionalize what the amounts have been or what the amounts were for '04?

Rich Fagan, InterDigital Communications - CFO [86]

I don't have that at hand, Richard. I will be happy to get back to you with that."

Danny, I hope this very recent Q&A from a prospective analyst will help you finally understand what analysts are truly thinking about our self-serving, misaligned, overcompensated, management, apparently ineffective corporate governance, and lack of financial controls at IDCC.

MO,
Corp_Buyer