Exhibit 10.29

 

UTSTARCOM, INC.

AMENDED AND RESTATED

VICE PRESIDENT CHANGE IN CONTROL AND

INVOLUNTARY TERMINATION SEVERANCE PAY PLAN

 

1.             Introduction.  The purpose of this UTStarcom, Inc. Vice President
Change in Control and Involuntary Termination Severance Pay Plan, as amended and
restated (the “Plan”) is to provide assurances of specified severance benefits
to eligible employees of the Company whose employment is subject to being
involuntarily terminated (other than for Cause, death or Disability).  The Plan
is intended to (a) assure that the Company will have continued dedication and
objectivity of its employees, and (b) provide the Company’s employees with an
incentive to continue their employment and to motivate its employees to maximize
the value of the Company for the benefit of its stockholders.  This Plan is an
“employee welfare benefit plan,” as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended.  This document constitutes
both the written instrument under which the Plan is maintained and the required
summary plan description for the Plan.

 

2.             Important Terms.  To help you understand how this Plan works, it
is important to know the following terms:

 

2.1           “Administrator” means the Company, acting through its Senior Vice
President of Human Resources or any person to whom the Administrator has
delegated any authority or responsibility pursuant to Section 8, but only to the
extent of such delegation.

 

2.2           “Base Pay” means a Covered Employee’s regular straight-time salary
as in effect during the last regularly scheduled payroll period immediately
preceding the date on which the Severance Benefit becomes payable.  Base Pay
does not include payments for overtime, shift premium, incentive compensation,
incentive payments, bonuses, commissions or other compensation.

 

2.3           “Board” means the Board of Directors of the Company.

 

2.4           “Cause” means (a) any act of personal dishonesty taken by the
Covered Employee in connection with his or her responsibilities as an employee
which is intended to result in substantial personal enrichment of the Covered
Employee, (b) a Covered Employee’s conviction of a felony which the Board
reasonably believes has had or will have a material detrimental effect on the
Company’s reputation or business, (c) a willful act by the Covered Employee
which constitutes misconduct and is injurious to the Company, and (d) continued
willful violations by the Covered Employee of the Covered Employee’s obligations
to the Company after there has been delivered to the Covered Employee a written
demand for performance from the Company which describes the basis for the
Company’s belief that the Covered Employee has not substantially performed his
or her duties.

 

2.5           “Change in Control” shall mean the occurrence of any of the
following events:

 

(a)           Any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of
the Exchange

 

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Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the total voting power represented by the Company’s
then outstanding voting securities; or

 

(b)           The consummation of the sale or disposition by the Company of all
or substantially all of the Company’s assets; or

 

(c)           The consummation of a merger or consolidation of the Company, with
any other corporation, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company, or such surviving entity or its parent outstanding immediately
after such merger or consolidation; or

 

(d)           A change in the composition of the Board, as a result of which
fewer than a majority of the Directors are Incumbent Directors. “Incumbent
Directors” means Directors who either (A) are Directors as of the effective date
of the Plan (pursuant to Section 22), or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of
those Directors whose election or nomination was not in connection with any
transaction described in subsections (i), (ii) or (iii) or in connection with an
actual or threatened proxy contest relating to the election of Directors.

 

2.6           “Company” means UTStarcom, Inc., a Delaware corporation, and any
successor by merger, acquisition, consolidation or otherwise that assumes the
obligations of the Company under the Plan.

 

2.7           “Covered Employee” means an employee of the Company who is
identified on Exhibit A to this Plan or who is designated by the Administrator
in writing from time to time as a Covered Employee.

 

2.8           “Determination Period” means the time period beginning on the date
of the Change in Control and ending eighteen (18) months following the Change in
Control.

 

2.9           “Director” means a member of the Company’s Board of Directors.

 

2.10         “Disability” means that the Covered Employee has been unable to
perform his or her Company duties as the result of his or her incapacity due to
physical or mental illness, and such inability, at least twenty-six (26) weeks
after its commencement or one hundred eighty (180) days in any consecutive
twelve (12) month period, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Covered Employee
or the Covered Employee’s legal representative (such agreement as to
acceptability not to be unreasonably withheld).  Termination resulting from
Disability may only be effected after at least thirty (30) days’ written notice
by the Company of its intention to terminate the Covered Employee’s employment. 
In the event that the Covered Employee resumes the performance of substantially
all of his or her duties hereunder before the termination of his or her
employment becomes effective, the notice of intent to terminate will
automatically be deemed to have been revoked.

 

2.11         “Effective Date” means June 20, 2006.

 

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2.12         “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended.

 

2.13         “Good Reason” means, without the Covered Employee’s express written
consent, (a) a significant reduction of the Covered Employee’s duties, position
or responsibilities relative to the Covered Employee’s duties, position or
responsibilities in effect immediately prior to such reduction, or the removal
of the Covered Employee from such position, duties and responsibilities, unless
the Covered Employee is provided with comparable duties, position and
responsibilities; provided, however, that the sole occurrence of the Company
being acquired and made part of a larger entity shall not constitute a “Good
Reason”; (b) a reduction by the Company of the Covered Employee’s base salary as
in effect immediately prior to such reduction; (c) a material reduction by the
Company in the kind or level of employee compensation or benefits to which the
Covered Employee is entitled immediately prior to such reduction, with the
result that the Covered Employee’s overall benefits package is significantly
reduced; (d) the relocation of the Covered Employee to a facility or location
where such relocation increases the distance the Covered Employee must travel to
work by more than thirty (30) miles from the Covered Employee’s commute prior to
the relocation; or (e) the failure of the Company to obtain the assumption of
this Plan by any successor to the Company (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company’s business and/or assets.

 

2.14         “Involuntary Termination” means a termination of employment of a
Covered Employee under the circumstances described in Section 4.1 or
Section 4.2.

 

2.15         “Option” means a right granted pursuant to the Company’s stock
option plan(s) to purchase common stock of the Company pursuant to the terms and
conditions of such plan(s).

 

2.16         “Plan” means the UTStarcom, Inc. Vice President Change in Control
and Involuntary Termination Severance Pay Plan, as set forth in this document,
and as hereafter amended from time to time.

 

2.17         “Severance Benefit” means the compensation and other benefits the
Covered Employee will be provided pursuant to Section 4.

 

2.18                           “Severance Date” means the date on which a
Covered Employee experiences an Involuntary Termination.

 

2.19         “Specified Employee” means any Covered Employee who would be
considered a “Specified Employee” as that term is defined in
Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the
“Code”).

 

3.             Eligibility for Severance Benefit.  An individual is eligible for
the Severance Benefit under the Plan, in the amount set forth in Section 4, only
if he or she is a Covered Employee on the date he or she experiences an
Involuntary Termination and executes, and does not revoke, a release in favor of
the Company as required by Section 4.4.

 

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4.             Severance Benefit.

 

4.1           Involuntary Termination Apart From a Change in Control.  If at any
time before a Change in Control or after the Determination Period following a
Change in Control, the Company (or any parent or subsidiary of the Company)
terminates a Covered Employee’s employment for other than Cause, death or
Disability, or the Covered Employee terminates his or her employment with the
Company for Good Reason, then, subject to the Covered Employee’s compliance with
Section 4.4, the Covered Employee shall receive the following Severance Benefit
from the Company:

 

4.1.1        Severance Benefit.  Each Covered Employee shall be entitled to
receive a lump sum cash payment equal to two (2) weeks of Base Pay for each year
of service with the Company, with a minimum payment equal to six (6) months of
Base Pay, payable within thirty (30) days following the Involuntary Termination;
provided, however, that if the Covered Employee is a Specified Employee at the
time of such termination, payment shall be delayed as provided for in
Section 11.3.

 

4.1.2        Health Benefits.  The Company shall pay to the Covered Employee an
amount equal to six (6) months of the premiums for continuation coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
for the Covered Employee (and any eligible dependents) under the Company’s
medical, dental and vision plans at the same level of coverage in effect on the
Severance Date, payable in a lump within thirty (30) days following the
Involuntary Termination, provided, however, that if the Covered Employee is a
Specified Employee at the time of such termination, payment shall be delayed as
provided for in Section 11.3.

 

4.1.3        Accelerated Vesting of Equity Awards.  Each Covered Employee shall
not receive any accelerated vesting on his or her outstanding and unvested
equity compensation awards.  The Covered Employee’s equity awards shall be
exercisable until the earliest of (a) twelve (12) months from the Employee’s
date of termination, (b) the latest date the equity award could have expired by
its original terms under any circumstances, (c) the tenth (10th) anniversary of
the original date of grant of the equity award, or (d) the date provided for
under the equity plan under which the award was granted.

 

4.2           Involuntary Termination Following a Change in Control.  If at any
time within the Determination Period following a Change in Control, the Company
(or any parent or subsidiary of the Company) terminates a Covered Employee’s
employment for other than Cause, death or Disability, or the Covered Employee
terminates his or her employment with the Company for Good Reason, then, subject
to the Covered Employee’s compliance with Section 4.4, the Covered Employee
shall receive the following Severance Benefit from the Company:

 

4.2.1        Severance Benefit.  Each Covered Employee shall be entitled to
receive a lump sum cash payment equal to (a) one (1) year of Base Pay and
(b) one hundred percent (100%) of his or her target bonus for the year of the
Involuntary Termination, payable within thirty (30) days following the
Involuntary Termination; provided, however, that if the Covered Employee is a
Specified Employee at the time of such termination, payment shall be delayed as
provided for in Section 11.3.

 

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4.2.2        Health Benefits.  The Company shall pay to the Covered Employee an
amount equal to twelve (12) months of the premiums for continuation coverage
under COBRA of each Covered Employee (and any eligible dependents) under the
Company’s medical, dental and vision plans at the same level of coverage in
effect on the Severance Date, payable in a lump sum within thirty (30) days
following the Involuntary Termination; provided, however, that if the Covered
Employee is a Specified Employee at the time of such termination, payment shall
be delayed as provided for in Section 11.3.

 

4.2.3        Accelerated Vesting of Equity Awards.  Each Covered Employee shall
fully vest in and, if applicable, have the right to exercise, all of his or her
outstanding and unvested equity compensation awards.  The Covered Employee’s
equity awards (including awards that vest as a result of the Plan) shall be
exercisable until the earliest of: (a) twelve (12) months from the Employee’s
date of termination, (b) the latest date the equity award could have expired by
its original terms under any circumstances, (c) the tenth (10th) anniversary of
the original date of grant of the equity award, or (d) the date provided for
under the equity plan under which the award was granted.

 

4.3           Parachute Payments.  In the event that the severance and other
benefits provided for in this Plan or otherwise payable or provided to the
Covered Employee (i) constitute “parachute payments” within the meaning of
Section 280G of the Code and (ii) but for this Section 4.3, would be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Employee’s severance benefits hereunder Section 4 shall be either

 

(A)           DELIVERED IN FULL, OR

 

(B)           DELIVERED AS TO SUCH LESSER EXTENT WHICH WOULD RESULT IN NO
PORTION OF SUCH SEVERANCE BENEFITS BEING SUBJECT TO THE EXCISE TAX,

 

WHICHEVER OF THE FOREGOING AMOUNTS, TAKING INTO ACCOUNT THE APPLICABLE FEDERAL,
STATE AND LOCAL INCOME TAXES AND THE EXCISE TAX, RESULTS IN THE RECEIPT BY THE
COVERED EMPLOYEE ON AN AFTER-TAX BASIS OF THE GREATEST AMOUNT OF SEVERANCE
BENEFITS, NOTWITHSTANDING THAT ALL OR SOME PORTION OF SUCH SEVERANCE BENEFITS
MAY BE TAXABLE UNDER SECTION 4999 OF THE CODE.  UNLESS THE COMPANY AND THE
COVERED EMPLOYEE OTHERWISE AGREE IN WRITING, ANY DETERMINATION REQUIRED UNDER
THIS SECTION 4.3 SHALL BE MADE IN WRITING IN GOOD FAITH BY THE ACCOUNTING FIRM
SERVING AS THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTANTS IMMEDIATELY PRIOR TO THE
CHANGE OF CONTROL (THE “ACCOUNTANTS”).  IN THE EVENT OF A REDUCTION IN BENEFITS
HEREUNDER, THE COVERED EMPLOYEE SHALL BE GIVEN THE CHOICE OF WHICH BENEFITS TO
REDUCE.  FOR PURPOSES OF MAKING THE CALCULATIONS REQUIRED BY THIS SECTION 4.3,
THE ACCOUNTANTS MAY MAKE REASONABLE ASSUMPTIONS AND APPROXIMATIONS CONCERNING
APPLICABLE TAXES AND MAY RELY ON REASONABLE, GOOD FAITH INTERPRETATIONS
CONCERNING THE APPLICATION OF SECTIONS 280G AND 4999 OF THE CODE.  THE COMPANY
AND THE COVERED EMPLOYEE SHALL FURNISH TO THE ACCOUNTANTS SUCH INFORMATION AND
DOCUMENTS AS THE ACCOUNTANTS MAY REASONABLY REQUEST IN ORDER TO MAKE A
DETERMINATION UNDER THIS SECTION.  THE COMPANY SHALL BEAR ALL COSTS THE
ACCOUNTANTS MAY REASONABLY INCUR IN CONNECTION WITH ANY CALCULATIONS
CONTEMPLATED BY THIS SECTION 4.3.  ANY REDUCTION IN PAYMENTS AND/OR BENEFITS
REQUIRED BY THIS SECTION 4.3 WILL OCCUR IN THE FOLLOWING ORDER: (I) REDUCTION OF
CASH PAYMENTS; (II) REDUCTION OF VESTING ACCELERATION OF EQUITY AWARDS; AND
(III) REDUCTION OF OTHER BENEFITS PAID OR PROVIDED TO THE COVERED EMPLOYEE.  IN
THE EVENT THAT ACCELERATION OF VESTING OF EQUITY AWARDS IS TO BE REDUCED, SUCH
ACCELERATION OF VESTING WILL BE CANCELLED IN THE REVERSE ORDER

 

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OF THE DATE OF GRANT FOR THE COVERED EMPLOYEE’S EQUITY AWARDS.  IF TWO OR MORE
EQUITY AWARDS ARE GRANTED ON THE SAME DATE, EACH AWARD WILL BE REDUCED ON A
PRO-RATA BASIS.

 

4.4           RELEASE AND NON-DISPARAGEMENT AGREEMENT.  AS A CONDITION TO
RECEIVING SEVERANCE BENEFITS UNDER THIS PLAN, EACH COVERED EMPLOYEE WILL BE
REQUIRED TO SIGN A WAIVER AND RELEASE OF ALL CLAIMS ARISING OUT OF HIS OR HER
INVOLUNTARY TERMINATION AND EMPLOYMENT WITH THE COMPANY AND ITS SUBSIDIARIES AND
AFFILIATES AND AN AGREEMENT NOT TO DISPARAGE THE COMPANY, ITS DIRECTORS, OR ITS
EXECUTIVE OFFICERS, IN A FORM REASONABLY SATISFACTORY TO THE COMPANY, PROVIDED
THAT SUCH RELEASE IS EFFECTIVE WITHIN SIXTY (60) DAYS FOLLOWING THE COVERED
EMPLOYEE’S TERMINATION OF EMPLOYMENT OR SUCH SHORTER PERIOD SPECIFIED IN THE
RELEASE (THE “RELEASE DEADLINE”).  IF THE RELEASE OF CLAIMS DOES NOT BECOME
EFFECTIVE BY THE RELEASE DEADLINE, THE COVERED EMPLOYEE WILL FORFEIT ANY RIGHTS
TO THE SEVERANCE BENEFITS UNDER THIS PLAN.  NO SEVERANCE BENEFITS WILL BE PAID
OR PROVIDED UNTIL THE WAIVER AND RELEASE AGREEMENT BECOMES EFFECTIVE OR
IRREVOCABLE.

 

4.5           VACATION DAYS.  ANY UNUSED VACATION PAY ACCRUED AS OF A COVERED
EMPLOYEE’S DATE OF INVOLUNTARY TERMINATION WILL BE PAID AT THE TIME THE COVERED
EMPLOYEE RECEIVES HIS OR HER SEVERANCE BENEFIT.  NO COVERED EMPLOYEE MAY USE ANY
ACCRUED BUT UNUSED VACATION PAY TO EXTEND HIS OR HER INVOLUNTARY TERMINATION
DATE.

 

5.             TERMINATION OF BENEFITS.  BENEFITS UNDER THIS PLAN SHALL
TERMINATE IMMEDIATELY FOR A COVERED EMPLOYEE IF SUCH COVERED EMPLOYEE, AT ANY
TIME, VIOLATES ANY PROPRIETARY INFORMATION OR CONFIDENTIALITY OBLIGATION TO THE
COMPANY OR THE TERMS OF ANY APPLICABLE NON-COMPETITION AGREEMENT WITH THE
COMPANY.

 

6.             NON-DUPLICATION OF BENEFITS.  NOTWITHSTANDING ANY OTHER PROVISION
IN THE PLAN TO THE CONTRARY, THE SEVERANCE BENEFITS PROVIDED HEREUNDER SHALL BE
IN LIEU OF ANY OTHER SEVERANCE AND/OR RETENTION PLAN BENEFITS AND THE SEVERANCE
BENEFITS PROVIDED HEREUNDER SHALL BE REDUCED BY ANY SEVERANCE PAID OR PROVIDED
TO A COVERED EMPLOYEE UNDER ANY OTHER PLAN OR ARRANGEMENT.

 

7.             WITHHOLDING.  THE COMPANY WILL WITHHOLD FROM ANY SEVERANCE
BENEFIT ALL FEDERAL, STATE, LOCAL AND OTHER TAXES REQUIRED TO BE WITHHELD
THEREFROM AND ANY OTHER REQUIRED PAYROLL DEDUCTIONS.

 

8.             ADMINISTRATION.  THE COMPANY IS THE ADMINISTRATOR OF THE PLAN
(WITHIN THE MEANING OF SECTION 3(16)(A) OF ERISA).  THE PLAN WILL BE
ADMINISTERED AND INTERPRETED BY THE ADMINISTRATOR (IN HIS OR HER SOLE
DISCRETION).  THE ADMINISTRATOR IS THE “NAMED FIDUCIARY” OF THE PLAN FOR
PURPOSES OF ERISA AND WILL BE SUBJECT TO THE FIDUCIARY STANDARDS OF ERISA WHEN
ACTING IN SUCH CAPACITY.  ANY DECISION MADE OR OTHER ACTION TAKEN BY THE
ADMINISTRATOR WITH RESPECT TO THE PLAN, AND ANY INTERPRETATION BY THE
ADMINISTRATOR OF ANY TERM OR CONDITION OF THE PLAN, OR ANY RELATED DOCUMENT,
WILL BE CONCLUSIVE AND BINDING ON ALL PERSONS AND BE GIVEN THE MAXIMUM POSSIBLE
DEFERENCE ALLOWED BY LAW.  THE ADMINISTRATOR HAS THE AUTHORITY TO ACT FOR THE
COMPANY (IN A NON-FIDUCIARY CAPACITY) AS TO ANY MATTER PERTAINING TO THE PLAN;
PROVIDED, HOWEVER, THAT THIS AUTHORITY DOES NOT APPLY WITH RESPECT TO (A) THE
COMPANY’S POWER TO AMEND OR TERMINATE THE PLAN OR (B) ANY ACTION THAT COULD
REASONABLY BE EXPECTED TO INCREASE SIGNIFICANTLY THE COST OF THE PLAN IS SUBJECT
TO THE PRIOR APPROVAL OF THE SENIOR OFFICER OF THE COMPANY.  THE ADMINISTRATOR
MAY DELEGATE IN WRITING TO ANY OTHER PERSON ALL OR ANY PORTION OF HIS OR HER
AUTHORITY OR RESPONSIBILITY WITH RESPECT TO THE PLAN.

 

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9.             ELIGIBILITY TO PARTICIPATE.  THE ADMINISTRATOR WILL NOT BE
EXCLUDED FROM PARTICIPATING IN THE PLAN IF OTHERWISE ELIGIBLE, BUT HE OR SHE IS
NOT ENTITLED TO ACT OR PASS UPON ANY MATTERS PERTAINING SPECIFICALLY TO HIS OR
HER OWN BENEFIT OR ELIGIBILITY UNDER THE PLAN.  THE SENIOR OFFICER OF
UTSTARCOM, INC. WILL ACT UPON ANY MATTERS PERTAINING SPECIFICALLY TO THE BENEFIT
OR ELIGIBILITY OF THE ADMINISTRATOR UNDER THE PLAN.

 

10.           AMENDMENT OR TERMINATION.  THE COMPANY RESERVES THE RIGHT TO AMEND
OR MODIFY THE PLAN AT ANY TIME, WITHOUT ADVANCE NOTICE TO ANY COVERED EMPLOYEE;
PROVIDED, HOWEVER, THAT NO AMENDMENT OR MODIFICATION OF THE PLAN SHALL REDUCE
THE SEVERANCE BENEFIT PAYABLE TO ANY COVERED EMPLOYEE (UNLESS THE AFFECTED
COVERED EMPLOYEE CONSENTS TO SUCH AMENDMENT OR TERMINATION).  THE COMPANY SHALL
OBTAIN CONSENT FROM A COVERED EMPLOYEE PRIOR TO TERMINATING THE PLAN AS TO SUCH
COVERED EMPLOYEE’S PARTICIPATION IN THE PLAN.  ANY ACTION OF THE COMPANY IN
AMENDING OR TERMINATING THE PLAN WILL BE TAKEN IN A NON-FIDUCIARY CAPACITY.

 

11.           CODE SECTION 409A.

 

11.1         NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS PLAN, NO SEVERANCE
BENEFITS TO BE PAID OR PROVIDED TO A COVERED EMPLOYEE, IF ANY, PURSUANT TO THIS
PLAN, WHEN CONSIDERED TOGETHER WITH ANY OTHER SEVERANCE PAYMENTS OR SEPARATION
BENEFITS THAT ARE CONSIDERED DEFERRED COMPENSATION UNDER CODE SECTION 409A, AND
THE FINAL REGULATIONS AND ANY GUIDANCE PROMULGATED THEREUNDER (“SECTION 409A”)
(TOGETHER, THE “DEFERRED COMPENSATION SEPARATION BENEFITS”) WILL BE PAID OR
OTHERWISE PROVIDED UNTIL THE COVERED EMPLOYEE HAS A “SEPARATION FROM SERVICE”
WITHIN THE MEANING OF SECTION 409A.

 

11.2         ANY SEVERANCE BENEFITS THAT WOULD BE CONSIDERED DEFERRED
COMPENSATION SEVERANCE BENEFITS WILL BE PAID ON, OR, IN THE CASE OF
INSTALLMENTS, WILL NOT COMMENCE UNTIL, THE SIXTIETH (60TH) DAY FOLLOWING THE
COVERED EMPLOYEE’S SEPARATION FROM SERVICE, OR, IF LATER, SUCH TIME AS REQUIRED
BY SECTION 11.3.  ANY INSTALLMENT PAYMENTS THAT WOULD HAVE BEEN MADE TO THE
COVERED EMPLOYEE DURING THE SIXTY (60) DAY PERIOD IMMEDIATELY FOLLOWING THE
COVERED EMPLOYEE’S SEPARATION FROM SERVICE BUT FOR THE PRECEDING SENTENCE WILL
BE PAID TO THE COVERED EMPLOYEE ON THE SIXTIETH (60TH) DAY FOLLOWING THE COVERED
EMPLOYEE’S SEPARATION FROM SERVICE AND THE REMAINING PAYMENTS SHALL BE MADE AS
PROVIDED IN THIS PLAN.

 

11.3         NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS PLAN, IF A COVERED
EMPLOYEE IS A “SPECIFIED EMPLOYEE” WITHIN THE MEANING OF SECTION 409A AT THE
TIME OF THE COVERED EMPLOYEE’S TERMINATION (OTHER THAN DUE TO DEATH), THEN THE
DEFERRED COMPENSATION SEPARATION BENEFITS THAT ARE PAYABLE WITHIN THE FIRST SIX
(6) MONTHS FOLLOWING THE COVERED EMPLOYEE’S SEPARATION FROM SERVICE WILL BECOME
PAYABLE ON THE FIRST PAYROLL DATE THAT OCCURS ON OR AFTER THE DATE SIX
(6) MONTHS AND ONE (1) DAY FOLLOWING THE DATE OF THE COVERED EMPLOYEE’S
SEPARATION FROM SERVICE.  ALL SUBSEQUENT DEFERRED COMPENSATION SEPARATION
BENEFITS, IF ANY, WILL BE PAYABLE IN ACCORDANCE WITH THE PAYMENT SCHEDULE
APPLICABLE TO EACH PAYMENT OR BENEFIT.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IF THE COVERED EMPLOYEE DIES FOLLOWING THE COVERED EMPLOYEE’S
SEPARATION FROM SERVICE, BUT PRIOR TO THE SIX (6) MONTH ANNIVERSARY OF THE
SEPARATION FROM SERVICE, THEN ANY PAYMENTS DELAYED IN ACCORDANCE WITH THIS
PARAGRAPH WILL BE PAYABLE IN A LUMP SUM AS SOON AS ADMINISTRATIVELY PRACTICABLE
AFTER THE DATE OF THE COVERED EMPLOYEE’S DEATH AND ALL OTHER DEFERRED
COMPENSATION SEPARATION BENEFITS WILL BE PAYABLE IN ACCORDANCE WITH THE PAYMENT
SCHEDULE APPLICABLE TO EACH PAYMENT OR BENEFIT.  EACH PAYMENT AND

 

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BENEFIT PAYABLE UNDER THIS PLAN IS INTENDED TO CONSTITUTE SEPARATE PAYMENTS FOR
PURPOSES OF SECTION 1.409A-2(B)(2) OF THE TREASURY REGULATIONS.

 

11.4         ANY AMOUNT PAID UNDER THIS PLAN THAT SATISFIES THE REQUIREMENTS OF
THE “SHORT-TERM DEFERRAL” RULE SET FORTH IN SECTION 1.409A-1(B)(4) OF THE
TREASURY REGULATIONS WILL NOT CONSTITUTE DEFERRED COMPENSATION SEPARATION
BENEFITS FOR PURPOSES OF SECTION 11.1 ABOVE.

 

11.5         ANY AMOUNT PAID UNDER THIS PLAN THAT QUALIFIES AS A PAYMENT MADE AS
A RESULT OF AN INVOLUNTARY SEPARATION FROM SERVICE PURSUANT TO
SECTION 1.409A-1(B)(9)(III) OF THE TREASURY REGULATIONS THAT DOES NOT EXCEED THE
SECTION 409A LIMIT WILL NOT CONSTITUTE DEFERRED COMPENSATION SEPARATION BENEFITS
FOR PURPOSES OF SECTION 11.1 ABOVE.  FOR PURPOSES OF THIS PLAN, “SECTION 409A
LIMIT” WILL MEAN THE LESSER OF TWO (2) TIMES: (I) THE COVERED EMPLOYEE’S
ANNUALIZED COMPENSATION BASED UPON THE ANNUAL RATE OF PAY PAID TO THE COVERED
EMPLOYEE DURING THE COMPANY’S TAXABLE YEAR PRECEDING THE COMPANY’S TAXABLE YEAR
OF THE COVERED EMPLOYEE’S TERMINATION OF EMPLOYMENT AS DETERMINED UNDER TREASURY
REGULATION 1.409A-1(B)(9)(III)(A)(1) AND ANY INTERNAL REVENUE SERVICE GUIDANCE
ISSUED WITH RESPECT THERETO; OR (II) THE MAXIMUM AMOUNT THAT MAY BE TAKEN INTO
ACCOUNT UNDER A QUALIFIED PLAN PURSUANT TO SECTION 401(A)(17) OF THE CODE FOR
THE YEAR IN WHICH THE COVERED EMPLOYEE’S EMPLOYMENT IS TERMINATED.

 

11.6         THE FOREGOING PROVISIONS ARE INTENDED TO COMPLY WITH THE
REQUIREMENTS OF SECTION 409A SO THAT NONE OF THE SEVERANCE BENEFITS TO BE
PROVIDED HEREUNDER WILL BE SUBJECT TO THE ADDITIONAL TAX IMPOSED UNDER
SECTION 409A, AND ANY AMBIGUITIES HEREIN WILL BE INTERPRETED TO SO COMPLY. 
NOTWITHSTANDING ANYTHING IN THIS PLAN TO THE CONTRARY, THE COMPANY RESERVES THE
AUTHORITY TO AMEND THE PLAN AS IT DEEMS NECESSARY OR DESIRABLE, AND WITHOUT THE
CONSENT OF ANY COVERED EMPLOYEE OR WITHOUT PROVIDING ANY ADVANCE NOTICE OF ANY
SUCH AMENDMENT, IN ORDER TO ENSURE THE PLAN COMPLIES WITH SECTION 409A.

 

12.           CLAIMS PROCEDURE.  ANY EMPLOYEE OR OTHER PERSON WHO BELIEVES HE OR
SHE IS ENTITLED TO ANY PAYMENT UNDER THE PLAN MAY SUBMIT A CLAIM IN WRITING TO
THE ADMINISTRATOR.  IF THE CLAIM IS DENIED (IN FULL OR IN PART), THE CLAIMANT
WILL BE PROVIDED A WRITTEN NOTICE EXPLAINING THE SPECIFIC REASONS FOR THE DENIAL
AND REFERRING TO THE PROVISIONS OF THE PLAN ON WHICH THE DENIAL IS BASED.  THE
NOTICE WILL ALSO DESCRIBE ANY ADDITIONAL INFORMATION NEEDED TO SUPPORT THE CLAIM
AND THE PLAN’S PROCEDURES FOR APPEALING THE DENIAL.  THE DENIAL NOTICE WILL BE
PROVIDED WITHIN 90 DAYS AFTER THE CLAIM IS RECEIVED.  IF SPECIAL CIRCUMSTANCES
REQUIRE AN EXTENSION OF TIME (UP TO 90 DAYS), WRITTEN NOTICE OF THE EXTENSION
WILL BE GIVEN WITHIN THE INITIAL 90-DAY PERIOD.  THIS NOTICE OF EXTENSION WILL
INDICATE THE SPECIAL CIRCUMSTANCES REQUIRING THE EXTENSION OF TIME AND THE DATE
BY WHICH THE ADMINISTRATOR EXPECTS TO RENDER ITS DECISION ON THE CLAIM.

 

13.           APPEAL PROCEDURE.  IF THE CLAIMANT’S CLAIM IS DENIED, THE CLAIMANT
(OR HIS OR HER AUTHORIZED REPRESENTATIVE) MAY APPLY IN WRITING TO THE
ADMINISTRATOR FOR A REVIEW OF THE DECISION DENYING THE CLAIM.  REVIEW MUST BE
REQUESTED WITHIN 60 DAYS FOLLOWING THE DATE THE CLAIMANT RECEIVED THE WRITTEN
NOTICE OF THEIR CLAIM DENIAL OR ELSE THE CLAIMANT LOSES THE RIGHT TO REVIEW. 
THE CLAIMANT (OR REPRESENTATIVE) THEN HAS THE RIGHT TO REVIEW AND OBTAIN COPIES
OF ALL DOCUMENTS AND OTHER INFORMATION RELEVANT TO THE CLAIM, UPON REQUEST AND
AT NO CHARGE, AND TO SUBMIT ISSUES AND COMMENTS IN WRITING.  THE ADMINISTRATOR
WILL PROVIDE WRITTEN NOTICE OF HIS OR HER DECISION ON REVIEW WITHIN 60 DAYS
AFTER IT RECEIVES A REVIEW REQUEST.  IF ADDITIONAL TIME (UP TO 60 DAYS) IS
NEEDED TO REVIEW THE REQUEST, THE CLAIMANT (OR REPRESENTATIVE) WILL BE GIVEN
WRITTEN NOTICE OF THE REASON FOR THE DELAY.  THIS NOTICE OF EXTENSION WILL
INDICATE THE SPECIAL CIRCUMSTANCES REQUIRING

 

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THE EXTENSION OF TIME AND THE DATE BY WHICH THE ADMINISTRATOR EXPECTS TO RENDER
ITS DECISION.  IF THE CLAIM IS DENIED (IN FULL OR IN PART), THE CLAIMANT WILL BE
PROVIDED A WRITTEN NOTICE EXPLAINING THE SPECIFIC REASONS FOR THE DENIAL AND
REFERRING TO THE PROVISIONS OF THE PLAN ON WHICH THE DENIAL IS BASED.  THE
NOTICE SHALL ALSO INCLUDE A STATEMENT THAT THE CLAIMANT WILL BE PROVIDED, UPON
REQUEST AND FREE OF CHARGE, REASONABLE ACCESS TO, AND COPIES OF, ALL DOCUMENTS
AND OTHER INFORMATION RELEVANT TO THE CLAIM AND A STATEMENT REGARDING THE
CLAIMANT’S RIGHT TO BRING AN ACTION UNDER SECTION 502(A) OF ERISA.

 

14.           SOURCE OF PAYMENTS.  ALL SEVERANCE BENEFITS WILL BE PAID IN CASH
FROM THE GENERAL FUNDS OF THE COMPANY; NO SEPARATE FUND WILL BE ESTABLISHED
UNDER THE PLAN; AND THE PLAN WILL HAVE NO ASSETS.  NO RIGHT OF ANY PERSON TO
RECEIVE ANY PAYMENT UNDER THE PLAN WILL BE ANY GREATER THAN THE RIGHT OF ANY
OTHER GENERAL UNSECURED CREDITOR OF THE COMPANY.

 

15.           INALIENABILITY.  IN NO EVENT MAY ANY CURRENT OR FORMER EMPLOYEE OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES SELL, TRANSFER, ANTICIPATE,
ASSIGN OR OTHERWISE DISPOSE OF ANY RIGHT OR INTEREST UNDER THE PLAN.  AT NO TIME
WILL ANY SUCH RIGHT OR INTEREST BE SUBJECT TO THE CLAIMS OF CREDITORS NOR LIABLE
TO ATTACHMENT, EXECUTION OR OTHER LEGAL PROCESS.

 

16.           NO ENLARGEMENT OF EMPLOYMENT RIGHTS.  NEITHER THE ESTABLISHMENT OR
MAINTENANCE OF THE PLAN, ANY AMENDMENT OF THE PLAN, NOR THE MAKING OF ANY
BENEFIT PAYMENT HEREUNDER, WILL BE CONSTRUED TO CONFER UPON ANY INDIVIDUAL ANY
RIGHT TO BE CONTINUED AS AN EMPLOYEE OF THE COMPANY.  THE COMPANY EXPRESSLY
RESERVES THE RIGHT TO DISCHARGE ANY OF ITS EMPLOYEES AT ANY TIME, WITH OR
WITHOUT CAUSE.

 

17.           APPLICABLE LAW.  THE PROVISIONS OF THE PLAN WILL BE CONSTRUED,
ADMINISTERED AND ENFORCED IN ACCORDANCE WITH ERISA AND, TO THE EXTENT
APPLICABLE, THE LAWS OF THE STATE OF CALIFORNIA.

 

18.           SEVERABILITY.  IF ANY PROVISION OF THE PLAN IS HELD INVALID OR
UNENFORCEABLE, ITS INVALIDITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER
PROVISION OF THE PLAN, AND THE PLAN WILL BE CONSTRUED AND ENFORCED AS IF SUCH
PROVISION HAD NOT BEEN INCLUDED.

 

19.           HEADINGS.  HEADINGS IN THIS PLAN DOCUMENT ARE FOR PURPOSES OF
REFERENCE ONLY AND WILL NOT LIMIT OR OTHERWISE AFFECT THE MEANING HEREOF.

 

20.           INDEMNIFICATION.  THE COMPANY HEREBY AGREES TO INDEMNIFY AND HOLD
HARMLESS THE OFFICERS AND EMPLOYEES OF THE COMPANY, AND THE MEMBERS OF ITS
BOARDS OF DIRECTORS, FROM ALL LOSSES, CLAIMS, COSTS OR OTHER LIABILITIES ARISING
FROM THEIR ACTS OR OMISSIONS IN CONNECTION WITH THE ADMINISTRATION, AMENDMENT OR
TERMINATION OF THE PLAN, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. 
THIS INDEMNITY WILL COVER ALL SUCH LIABILITIES, INCLUDING JUDGMENTS, SETTLEMENTS
AND COSTS OF DEFENSE.  THE COMPANY WILL PROVIDE THIS INDEMNITY FROM ITS OWN
FUNDS TO THE EXTENT THAT INSURANCE DOES NOT COVER SUCH LIABILITIES.  THIS
INDEMNITY IS IN ADDITION TO AND NOT IN LIEU OF ANY OTHER INDEMNITY PROVIDED TO
SUCH PERSON BY THE COMPANY.

 

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21.           ADDITIONAL INFORMATION.

 

Plan Name:

UTStarcom, Inc. Vice President Change in Control and Involuntary Termination
Severance Pay Plan

 

 

Plan Sponsor:

UTStarcom, Inc.

 

1275 Harbor Bay Parkway

 

Alameda, CA 94502

 

 

Identification Numbers:

EIN: 52-1782500

 

 

Plan Year:

Calendar year

 

 

Plan Administrator:

UTStarcom, Inc.

 

Attention: Vice President, Human Resources

 

1275 Harbor Bay Parkway

 

Alameda, CA 94502

 

 

 

(510) 864-8800

 

 

Agent for Service of

 

Legal Process:

UTStarcom, Inc.

 

Attention: General Counsel

 

1275 Harbor Bay Parkway

 

Alameda, CA 94502

 

 

 

(510) 864-8800

 

 

 

Service of process may also be made upon the Plan Administrator.

 

 

Type of Plan

Bonus Plan/Severance Plan/Employee Welfare Benefit Plan

 

 

Plan Costs

The cost of the Plan is paid by the Employer.

 

22.           Statement of ERISA Rights.

 

As a Covered Employee under the Plan, you have certain rights and protections
under ERISA:

 

(a)           You may examine (without charge) all Plan documents, including any
amendments and copies of all documents filed with the U.S. Department of Labor,
such as the Plan’s annual report (IRS Form 5500).  These documents are available
for your review in the Company’s Human Resources Department.

 

(b)           You may obtain copies of all Plan documents and other Plan
information upon written request to the Plan Administrator.  A reasonable charge
may be made for such copies.

 

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In addition to creating rights for Covered Employees, ERISA imposes duties upon
the people who are responsible for the operation of the Plan.  The people who
operate the Plan (called “fiduciaries”) have a duty to do so prudently and in
the interests of you and the other Covered Employees.  No one, including the
Company or any other person, may fire you or otherwise discriminate against you
in any way to prevent you from obtaining a benefit under the Plan or exercising
your rights under ERISA.  If your claim for a severance benefit is denied, in
whole or in part, you must receive a written explanation of the reason for the
denial.  You have the right to have the denial of your claim reviewed.  (The
claim review procedure is explained in Sections 12 and 13 above.)

 

Under ERISA, there are steps you can take to enforce the above rights.  For
instance, if you request materials and do not receive them within 30 days, you
may file suit in a federal court. In such a case, the court may require the Plan
Administrator to provide the materials and to pay you up to $110 a day until you
receive the materials, unless the materials were not sent because of reasons
beyond the control of the Plan Administrator.  If you have a claim which is
denied or ignored, in whole or in part, you may file suit in a state or federal
court.  If it should happen that you are discriminated against for asserting
your rights, you may seek assistance from the U.S. Department of Labor, or you
may file suit in a federal court.

 

In any case, the court will decide who will pay court costs and legal fees.  If
you are successful, the court may order the person you have sued to pay these
costs and fees.  If you lose, the court may order you to pay these costs and
fees, for example, if it finds that your claim is frivolous.

 

If you have any questions regarding the Plan, please contact the Plan
Administrator.  If you have any questions about this statement or about your
rights under ERISA, you may contact the nearest area office of the Employee
Benefits Security Administration (formerly the Pension and Welfare Benefits
Administration), U.S. Department of Labor, listed in your telephone directory,
or the Division of Technical Assistance and Inquiries, Employee Benefits
Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W.
Washington, D.C. 20210.  You may also obtain certain publications about your
rights and responsibilities under ERISA by calling the publications hotline of
the Employee Benefits Security Administration.

 

23.           Execution.

 

In Witness Whereof, the Company, by its duly authorized officer, has executed
this Plan on the date indicated below.

 

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UTStarcom, Inc.

 

 

 

 

 

By

 

 

 

 

Title

 

 

 

 

 

Date

 

 

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