Exhibit 10.3

 

[g159921kei001.jpg]

 

July 29, 2005

 

(Delivery by Facsimile and Overnight Courier)

 

Francis P. Barton

14720 Montalvo Road

Saratoga, CA 95070

 

Dear Fran:

 

I am pleased to confirm UTStarcom’s job offer to you for the position of
Executive Vice President and Chief Financial Officer, with a starting date of
August 1, 2005.  This position reports directly to Hong Lu, the Company’s
Chairman, Chief Executive Officer and President, and is located at the Company’s
headquarters in Alameda, California.

 

The key elements of this employment offer are as follows:

 

Salary:  Your gross annual salary is $500,000.  Paydays are on the 15th and the
last day of each month.  Direct deposit is available.

 

Signing Bonus: You will be paid a gross signing bonus amount of $250,000,
payable upon the commencement of your employment with the Company.

 

Options:  You will be granted UTStarcom stock options and share purchase rights,
as follows:

 

a)              Stock Options: You will be granted UTStarcom stock options in
the total amount of 400,000 shares, at the fair market value (i.e., market
closing price) on the grant date, which shall be Monday August 1, 2005.  These
options will be vested in four years from the grant date: 25% of the options
will be vested after one year, and the remaining shares will be vested at 1/36th
per month thereafter.

 

b)             Share Purchase Rights:  You will be granted UTStarcom share
purchase rights (SPRs) in the total amount of 100,000 shares, with the
opportunity for you to exercise these rights at a per share price of $0.00125
within 60 days of the date of this offer letter.  These SPRs will be vested in
four years from the grant date: 25% of the SPRs will be vested after one year
from the date of grant, 25% after two years, 25% after three years, and 25%
after four years from the date of grant.

 

Annual Bonus:  For calendar year 2005, you will be eligible for a total gross
cash bonus amount of up to $250,000, of which $125,000 shall be guaranteed to
you.  Your total aggregate bonus will be based upon completion of mutually
agreed upon performance objectives as determined by Hong Lu, and paid in
February 2006.

 

Change in Control/Involuntary Termination Agreement:  You will be offered a
change in control agreement between yourself and the Company, which shall
include mutually agreed upon language which will provide that in the case of
your involuntary termination from Company service (in a case other than change
in control), that you would receive a gross payment equal to one year’s gross
base salary (equal to the base salary in effect at the time of your involuntary
termination); full payment of the gross annual bonus being offered at the time
of your involuntary termination; and continued vesting in Company stock options
and SPRs granted prior to the date of your involuntary termination for a period
of twelve (12) months from the date of your involuntary termination.

 

--------------------------------------------------------------------------------

 

Paid Time Off (PTO): You will be provided at the inception of your employment
with an accrual rate for PTO equivalent to 25 days per year, which will continue
during your employment with the Company pursuant to the Company’s policies
relating to PTO accrual and use.

 

Transportation Assistance: The Company will provide for you, on a net taxation
basis, a driving service to transport you from your home to the Company’s
Alameda offices for purposes of work on Mondays through Fridays.

 

Please be prepared to provide proof of eligibility for employment in the United
States on your first day of work, in compliance with the Immigration Reform and
Control Act (Form I-9).  Additionally, this offer of employment is contingent
upon completion of both personal reference verifications, and a criminal
background check.  UTStarcom reserves the right to withdraw its offer of
employment to you if the results of the reference verifications and/or the
criminal background check are not satisfactory, in the sole judgment of
UTStarcom.

 

As an employee of the Company, you will be expected to abide by Company
rules and regulations. You will be expected to sign and comply with an
agreement, which requires, among other provisions, the non-disclosure of
proprietary information.

 

Under separate cover I will forward to you the following materials for your
review: a proposed Change in Control Agreement (as described above); a proposed
Indemnification Agreement; a Director and Officers’ Questionnaire; and a Power
of Attorney regarding outside counsel’s filing of SEC Forms 3/4/5 on your
behalf.

 

We are pleased that you have chosen to become part of the UTStarcom team, and
wish you the very best as you begin your employment with UTStarcom. If you have
any questions about UTStarcom or its benefit programs, please feel free to
contact either myself at 510-749-1530 (or Russell@utstar.com), or Ed Hudson, the
Company’s Director of Human Resources, at 510-769-2828 (or
ed.hudson@utstar.com).

 

Please sign one copy of this letter to indicate your intent to accept the terms
and conditions of this offer letter, and please return the signed copy to the
Human Resource Department confidential fax at (510) 338-4395.

 

Sincerely,

 

 

Russell L. Boltwood

 

General Counsel/CHRO

 

 

 

I accept the terms and conditions of this offer letter, and I understand that it
replaces those of any earlier offers of employment (if any).

 

 

Signed:

/s/ Francis P. Barton

 

 

Employee Signature

 

 

Print Name:

Francis P. Barton

 

 

 

 

Date:

July 29, 2005

 

 

 

--------------------------------------------------------------------------------