Replies to post #22791 on InterDigital Inc (IDCC)

[mickeybritt]

Blueskywaves

You are just full of it aren't you. I can assure you that IDCC could hire all the engineers they wanted to hire without any option package. I assure you that for many 30 years of waiting doesn't merit any big rewards for management either for 29 years of failure. If the company needs more shares then be specific about the purpose of the shares and covenant as such so they will not and could not be used for any other purpose. You know It is strange to me that the company expects all this money but didn't make one mention of a stock split. If you are looking to increase liquidity and encourage larger institutions they will need more shares available for these big buyers.

Does IDCC already own necessary patents to collect on 2G and 3G? If they already have the engine and transmission then what are these engineers working on the hub caps? Like I said crank the engine up and engage the transmission and get out of the parking lot, and let someone see this vehicle moving with your technology, and willing to acknowledge it, kind of like seeing a Hummer coming down the road, you know its a Hummer and it deserves some respect as you sure don't want to get ran over by it.

I challenge you to say these officers have not only been adequately paid in the years where nothing was produced they were exceptionally well paid and got options like there was no tomorrow, and when the options fell to out of the money they were repriced to the best of my knowledge to make sure they got a good deal and they got 4 shares for buying 1 while the rest of us got 1 and seen it dilluted to 1/2 a share, so you tell me whose benefiting with no risk and who is the risk takers. Is Harry a big risk taker, or Rip, or Guy, you answer me and tell me how they are at risk or for that matter tell me how the engineers are at risk. Trust me the engineers or the officers if they got a better deal at another company most would cut and run, as evidenced in the sports world, loyalty is a characteristic that is scarce now a days.

I assure you if I was in charge of the company not only would I not receive options, neither would the employees. I think if we had a great year then a special bonus should be paid to all the employees as a reward for their performance. I also suggest if a individual did something above and beyond that made the company money a bonus should be awarded to that person, and I have no problem with quarterly awards of cash being given to a person who increases the wealth of the company, but if no one did anything special then the award would be shelved till a recognizable achievement was done. Are you even familiar with the unemployment rate going up, and factories moving out of this country? What makes you think a incentive package is needed to aquire personell? I also don't see where IDCC will aquire a company that will make the engine and transmission royalty increase by the amount spent on the aquisition. Now here I could be wrong but it is still my opinion and thats what matters to me, just as you had yours and you posted it and so I am posting mine.

Mickey

[plumear]

blueskywaves, RE: 2002 Annual report tidbits:

RE: "...out of a total outstanding pool of 10,462,000 stock options, 7,702,000 options were exercisable as of 12/31/2002 at a weighted average exercise price of $12.14. That's a potential cash infusion of $93.5M."

True. It would be a total cash infusion of $177.8M if that same stock were sold publicly at Friday's closing price. Now THAT would put IDCC in a good position and give shareholders something for the dilution of shares.

RE: "Restricted stock issued went from 813k shares in 2001 to 915k shares in 2002 or less than 13%. If I am correct that these warrants and restricted stock are generally reserved for management and outside consultants then it is worth noting that the number of restricted stock issued only increased by 13% in 2002. Is that excessive? Royalty income increased by 170% and the stock increased by 50%!!!"

OK, let's look at that. The stock rose 50%.(Figures are selective for a specific period to support your argument) The value of the options already owned by management rose with it. Management has it's potential bonus. Good for them; good for shareholders. Managements interest aligned with shareholders. Options increased 13%. Shareholders did not get similar benefit. Disconnect between management and shareholders. Is that excessive? Maybe yes, particularly since your analysis period does not take into account all factors. One thing is certain. The share of the IDCC pie keeps getting bigger for management, thereby shrinking the shareholder slice. This has been going on since before your selective period of analysis when the price did not see the gains you point out. During that period, the shareholders rode a rollercoaster while management kept getting a fatter share. (Of course some used those times to trade some and thusly benefitted, but you disparaged GE-Jim for that in one of your recent slams of him)

RE: "The average size of each employee's option package is nearly 35k with a 10-year vesting period."

That's good! Employees need to be rewarded and are. Most opposed to an increase in management options are for increasing the pool for employee options. They approved the last request for an increase because they were led to believe the employees, not management, would get that increase. "Fooled once, shame on you. Fooled twice, shame on me." Let's see some guarantees. We would not need any more options available if management hadn't gorged themselves with the last bonanza.

RE: "Adding 5M more options to the pool would allow IDCC room to budget 115 more average-sized option packages (read: employees) or a total of 169 packages."

THATS what I wnat to read! Put it in the proposal!

RE: "What a shame it would be if IDCC can not take full advantage of this migration of scarce technical talent because of the short-sightedness of some sad sacks, er, shareholders.<G>!"

Yeah what a shame it would be. It would be very short-sighted not to make sure the options were not reserved for where they would do us the most good.

[sophist]

To Blueskywaves: Thank you for presenting a rational series of arguments in defense of the proposed Option Plan. Only fools or complete dogmatists are unwilling to acknowledge that Options could have some benefits for IDCC which could consequently improve shareholder value offsetting the effects of dilution. An intelligent analysis of the Option Plan should be based on as clear an understanding of both its costs and benefits to the shareholders who are being asked to vote on it.

In short, a proper cost/benefit analysis should be undertaken in the evaluation of this Option Plan. You help mightily to clarify some of the potential benefits, which is not nearly as easy to do as to calculate the potential costs. Openminded people owe you their gratitude.

My problem with the debate about the Option Plan is that Management has failed to clarify their specific reasons for requesting this Option Plan, or at least well enough to clarify their intentions on how and when these Options will be distributed, how and when the "strike price" will be determined for each Option package granted, to whom they will be granted and for what purpose, and what controls are or will be put in place to minimize or eliminate any chance of them being abused. To my knowledge not a single person on this board, despite the immense amount of chatter and complaining, has either requested Management to clarify these and other uncertainties regarding the Option Plan or reported to this board any clarifications they have received in this regard.

So I fear that most, if not all, shareholders will be voting on this Option proposal without being fully informed. This is not unusual,unfortunately, and most elections have a large component of random irrationality wherein people rarely make an informed judgment as to what is really in their best interest. Proxy voting is just one example where people ironically vote with more ignorance than wisdom.