UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 2, 2007
INTERDIGITAL COMMUNICATIONS CORPORATION
(Exact Name of Registrant as Specified in Charter)
Pennsylvania 1-11152 23-1882087
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
781 Third Avenue
King of Prussia, PA 19406-1409
(Address of Principal Executive Offices)
(610) 878-7800
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Item 1.01. Entry into a Material Definitive Agreement.
(a) On July 2, 2007, for the purpose of reorganizing into a holding company
structure, InterDigital Communications Corporation executed a Plan of
Reorganization ("Plan") and an Agreement and Plan of Merger ("Merger Agreement")
with InterDigital, Inc., a Pennsylvania corporation and another newly formed
Pennsylvania corporation owned 100% by InterDigital, Inc. ("Merger Sub"). The
common stock of InterDigital Communications Corporation has been publicly traded
since 1981. Pursuant to the Merger Agreement, Merger Sub has merged (the
"Merger") with and into InterDigital Communications Corporation, with
InterDigital Communications Corporation as the surviving corporation. As a
result of the Merger, InterDigital Communications Corporation is now a
wholly-owned subsidiary of InterDigital, Inc. Following the Merger, InterDigital
Communications Corporation will convert from a Pennsylvania corporation into a
Delaware corporation and then convert into a Delaware limited liability company
and change its name to InterDigital Communications, LLC. The Merger, together
with the subsequent conversion of InterDigital Communications Corporation into a
Delaware limited liability company and a further conversion to a Pennsylvania
limited liability company, is herein referred to collectively as the
"Reorganization." As a result of the Reorganization, neither the business
conducted by InterDigital, Inc. and InterDigital Communications Corporation in
the aggregate, nor the consolidated assets and liabilities of InterDigital, Inc.
and InterDigital Communications Corporation, in the aggregate, will change.
At the time the Plan and the Merger Agreement were executed, InterDigital,
Inc. was a direct, wholly-owned subsidiary of InterDigital Communications
Corporation and Merger Sub was a wholly-owned subsidiary of InterDigital, Inc.
and an indirect subsidiary of InterDigital Communications Corporation. Pursuant
to Section 1924(b)(4) of the Pennsylvania Business Corporation Law of 1988
("PBCL"), shareholder approval was not required for, and will not be sought in
connection with the Merger.
By virtue of the Merger, each share of InterDigital Communications
Corporation's outstanding common stock has been converted, on a share-for-share
basis, into a share of common stock of InterDigital, Inc. As a result, each
shareholder of InterDigital Communications Corporation has become the owner of
an identical number of shares of common stock of InterDigital, Inc.
InterDigital, Inc.'s common stock will be traded under the name
"InterDigital, Inc." and will continue to be listed on the NASDAQ Global Select
Market under the ticker symbol "IDCC."
Pursuant to the Amended and Restated Rights Agreement by and between
InterDigital Communications Corporation and American Stock Transfer and Trust
Company dated December 15, 2006 ("Rights Agreement"), which has been assumed by
InterDigital, Inc. as a successor to the Rights Agreement (in accordance with
the Rights Agreement), each share of common stock of InterDigital, Inc. is
accompanied by an attached right to purchase one unit of the InterDigital,
Inc.'s Series B Junior Participating Preferred Stock. For a more detailed
description of the Rights Agreement, see Note 12 of the Notes to Consolidated
Financial Statements included in the Annual Report on Form 10-K of InterDigital
Communications Corporation for the year ended December 31, 2006.
Further, each outstanding stock option and restricted stock unit ("RSU")
with respect to the acquisition of shares of InterDigital Communications
Corporation's common stock now represents an option or RSU, as the case may be,
with respect to the acquisition of an identical number of shares of
InterDigital, Inc.'s common stock, upon the same terms and conditions as the
original option or RSU.
The conversion of shares of capital stock in the Merger occurred without an
exchange of certificates. Accordingly, certificates formerly representing shares
of outstanding common stock of InterDigital Communications Corporation are
deemed to represent the same number of shares of common stock in InterDigital,
Inc. Shareholders do not need to exchange their share certificates.
The provisions of the articles of incorporation and bylaws of InterDigital,
Inc. are the same as those of InterDigital Communications Corporation prior to
the Merger. The authorized capital stock of InterDigital, Inc., the
designations, rights, powers and preferences of such capital stock and the
qualifications, limitations and restrictions thereof are also the same as the
capital stock of InterDigital Communications Corporation immediately prior to
the Merger. The directors and executive officers of InterDigital, Inc., are the
same individuals who were directors and executive officers, respectively, of
InterDigital Communications Corporation immediately prior to the Merger. The
Reorganization will not give rise to any taxable gain or loss to shareholders,
option holders or RSU holders of InterDigital Communications Corporation.
Upon consummation of the Merger, InterDigital, Inc.'s common stock was
deemed to be registered under Section 12(b) of the Securities Exchange Act of
1934, as amended, pursuant to Rule 12g-3(a) promulgated thereunder. For purposes
of Rule 12g-3(a), InterDigital, Inc., is the successor issuer to InterDigital
Communications Corporation.
A copy of InterDigital Communications Corporation's press release
announcing the Reorganization is attached hereto as Exhibit 99.1.
(b) As a result of the Reorganization, on July 2, 2007, InterDigital
Communications Corporation, InterDigital, Inc. and certain of their domestic
subsidiaries acting as guarantors (collectively, "InterDigital"), entered into a
First Amendment, Consent and Joinder to Credit Agreement ("First Amendment") of
a $60 million unsecured revolving credit facility ("Credit Agreement") with Bank
of America, N.A., as Administrative Agent, lender and L/C issuer and Citizens
Bank of America, as lender. The Credit Agreement was first entered into on
December 28, 2005 and expires on December 28, 2007. The First Amendment modifies
the corporate entities identified as the named borrowers and subsidiary
guarantors to reflect the fact that the Reorganization has taken place. There
were no other material modifications to the terms of the Credit Agreement as
such terms are described in InterDigital Communication Corporation's Form 8-K
dated December 29, 2005, and which are incorporated herein by reference.
As of July 2, 2007, InterDigital Communication Corporation did not have any
amounts outstanding under the Credit Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On July 2, 2007, InterDigital Communications Corporation and InterDigital,
Inc. and certain of their domestic subsidiaries acting as guarantors, entered
into the First Amendment of the Credit Agreement with Bank of America, N.A., as
Administrative Agent, lender and L/C issuer and Citizens Bank of America, as
lender. The material terms and conditions of the First Amendment are described
in Item 1.01(b) above and are incorporated herein by reference. Except with
respect to the identity of the parties to the Credit Agreement, which was
amended to reflect the fact that the Reorganization has taken place, there were
no other material modifications to the terms of the Credit Agreement as such
terms are described in InterDigital Communication Corporation's Form 8-K dated
December 29, 2005, and which are incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
The information contained in Item 1.01 is incorporated herein by reference.
Item 5.02. Compensatory Arrangements of Certain Officers.
(e) In connection with the Reorganization described in Item 1.01 above,
effective as of July 2, 2007, the named executive officers of InterDigital
Communications Corporation have each entered into an Amendment and Assignment of
Employment Agreement together with InterDigital Communications Corporation and
InterDigital, Inc. The Amendment and Assignment of Employment Agreement for each
such individual (i) assigns each named executive officer's current employment
agreement from InterDigital Communications Corporation to InterDigital, Inc.,
(ii) affirms that the Reorganization described in Item 1.01(a) above is not a
"Change of Control" as such term is defined within each named executive
officer's employment agreement, and (iii) allows InterDigital, Inc. to assign
such named executive officers, as appropriate, to various subsidiaries.
In addition, in connection with the Reorganization described in Item 1.01
above, effective as of July 2, 2007, the directors and named executive officers
of InterDigital Communications Corporation have each entered into an Assignment
and Assumption of Indemnity Agreement together with InterDigital Communications
Corporation and InterDigital, Inc. The Assignment and Assumption of Indemnity
Agreement provides for the assignment of each of the above individual's
Indemnity Agreement from InterDigital Communications Corporation to
InterDigital, Inc., with no other modifications. The Indemnity Agreements
provide that in addition to InterDigital, Inc.'s general obligation to maintain
directors' and officers' liability insurance, InterDigital, Inc. will, subject
to certain conditions, indemnify and defend in whole or in part, such directors,
officers or agents of InterDigital, Inc. or InterDigital, Inc.'s subsidiaries in
connection with their service to InterDigital, Inc. and its subsidiaries.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The information contained in Item 1.01 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated July 2, 2007.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
InterDigital Communications Corporation
By: /s/ William J. Merritt
----------------------
William J. Merritt
President and Chief Executive Officer
Date: July 2, 2007
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release dated July 2, 2007