Question-and-Answer Session
Operator
(Operator Instructions). Our first question today comes from Jonathon Skeels with Davenport
Jonathon Skeels - Davenport
A few quick questions, First could you just remind me of the details on the long-term incentive program?
Bill Merritt
The long term intensive program as it is described in our disclosure, typically it’s a three year program. They alternate between the cash programs and stock programs and goals in those programs are typically related to cash flow over those periods. Licensing penetration over those periods and we also have goal with respect to the penetration of our slim modem IP as well in some of those programs
Jonathon Skeels - Davenport
Okay.. To reduction in operating expenses you reported you have there being structural exchanges that should be in place going forward, the $4 million and lower operating expense is related to this?
Scott McQuilkin
No. that the structural expensive I referred to, relate primarily to our exit from the product and modem business at the end of the first quarter. The $4 million is a cumulative adjustment, based on the amount that we had accrued under one of those long-term incentive plans. We made an adjustment based on changing the expected payout under that plan and it was a cumulative adjustment.
Going forward, I think the expense that you should expect to see reduces from about $1.2 million a quarter to about $0.6 million a quarter and that just relating to the one plan that was affected.
Jonathon Skeels - Davenport
Okay. Great and helpful. Then the rebound in per-unit wise licensees, I guess that was mostly due to strength in the Japanese handset manufactures rebound there?
Scott McQuilkin
The big rebound I would say is related to Japan, there is significance portion of our per-unit license revenue but at the same time we had other per-unit licensees who continued to grow very rapidly I'd say, as we've seen them grow in the past.
Jonathon Skeels - Davenport
Okay, and than I guess, could you talk may be about plans for the cash balance and if you could maybe provide some detail on a breakdown may be on your priorities for cash between buyback, M&A and may be your cash that you want to keep on hand for future litigations?
Bill Merritt
I think, I'll make up a couple of points about that, the first key point is, I think what we’re going to do what we have always done, which is invest the cash based on what generates most shareholder value. I think, second, right now we’re actually fairly fortunate to have a significant cash balance at a point in the economics cycle where I think some of the market prices are adjusting and therefore afford an opportunity makes some strategic investments that have the opportunity to generate significant values.
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