Exhibit 10.4

 

UTSTARCOM, INC.

AMENDED AND RESTATED

EXECUTIVE INVOLUNTARY TERMINATION SEVERANCE PAY PLAN

 

1.             Introduction.  The purpose of this UTStarcom, Inc. Executive
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 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           “Director” means a member of the Company’s Board of Directors.

 

2.9           “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.

 

2.10         “Effective Date” means June 20, 2006.

 

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

 

2

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

 

2.12         “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.

 

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

 

2.14         “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).

 

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

 

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

 

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

 

2.18         “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 4.3.

 

4.             Severance Benefit.

 

4.1           Involuntary Termination.  If 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

 

3

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

 

for Good Reason, then, subject to the Covered Employee’s compliance with
Section 4.3, 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 (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 11.2..

 

4.1.2        Health Benefits.  The Company shall pay to the Covered Employee an
amount equal to twelve (12) months of the premiums for continuation coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“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 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 11.2.

 

4.1.3       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.

 

4.2           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 4.2, 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 4.2 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

 

4

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

 

REQUIRED BY THIS SECTION 4.2, 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 4.2.

 

4.3           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. NO
SEVERANCE BENEFITS WILL BE PAID OR PROVIDED UNTIL THE WAIVER AND RELEASE
AGREEMENT BECOMES EFFECTIVE.

 

4.4           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

 

5

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

 

DELEGATE IN WRITING TO ANY OTHER PERSON ALL OR ANY PORTION OF HIS OR HER
AUTHORITY OR RESPONSIBILITY WITH RESPECT TO THE PLAN.

 

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, MODIFY OR TERMINATE THE PLAN AT ANY TIME, WITHOUT ADVANCE NOTICE TO ANY
COVERED EMPLOYEE; PROVIDED, HOWEVER, THAT, COMMENCING ON THE DATE OF A CHANGE IN
CONTROL, NO AMENDMENT OR TERMINATION OF THE PLAN SHALL REDUCE THE SEVERANCE
BENEFIT PAYABLE TO ANY COVERED EMPLOYEE (UNLESS THE AFFECTED COVERED EMPLOYEE
CONSENTS TO SUCH AMENDMENT OR TERMINATION). 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         AMENDMENT.  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 OF THE CODE AND ANY REGULATIONS AND OTHER GUIDANCE ISSUED
THEREUNDER.

 

11.2         DISTRIBUTIONS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
PLAN, IF A COVERED EMPLOYEE IS A “SPECIFIED EMPLOYEE” (“SPECIFIED EMPLOYEE”)
WITHIN THE MEANING OF SECTION 409A OF THE CODE AND ANY FINAL REGULATIONS AND
GUIDANCE PROMULGATED THEREUNDER (“SECTION 409A”) AT THE TIME OF A COVERED
EMPLOYEE’S TERMINATION, THEN THE SEVERANCE AND BENEFITS PAYABLE TO THE COVERED
EMPLOYEE PURSUANT TO THIS PLAN (OTHER THAN DUE TO DEATH), IF ANY, AND ANY OTHER
SEVERANCE PAYMENTS OR SEPARATION BENEFITS WHICH MAY BE CONSIDERED DEFERRED
COMPENSATION UNDER SECTION 409A (TOGETHER, THE “DEFERRED COMPENSATION SEPARATION
BENEFITS”), WHICH ARE OTHERWISE DUE TO THE COVERED EMPLOYEE ON OR WITHIN THE SIX
(6) MONTH PERIOD FOLLOWING THE COVERED EMPLOYEE’S TERMINATION WILL ACCRUE DURING
SUCH SIX (6) MONTH PERIOD AND WILL BECOME PAYABLE IN A LUMP SUM PAYMENT ON THE
DATE SIX (6) MONTHS AND ONE (1) DAY FOLLOWING THE DATE OF THE COVERED EMPLOYEE’S
TERMINATION OF EMPLOYMENT OR THE DATE OF THE COVERED EMPLOYEE’S DEATH, IF
EARLIER. ALL SUBSEQUENT DEFERRED COMPENSATION SEPARATION BENEFITS, IF ANY, WILL
BE PAYABLE IN ACCORDANCE WITH THE PAYMENT SCHEDULE APPLICABLE TO EACH PAYMENT OR
BENEFIT. THE FOREGOING PROVISIONS ARE INTENDED TO COMPLY WITH THE REQUIREMENTS
OF SECTION 409A SO THAT NONE OF THE SEVERANCE PAYMENTS AND 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.

 

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

 

6

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

 

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 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.

 

7

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

 

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.

 

21.           ADDITIONAL INFORMATION.

 

Plan Name:

 

UTStarcom, Inc. 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.

 

8

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

 

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.

 

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.

 

9

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

 

23.           Execution.

 

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

 

 

 

UTStarcom, Inc.

 

 

 

 

 

By

/s/ Francis P. Barton

 

 

 

Title

EVP and Chief Financial Officer

 

 

 

 

Date

January 30, 2008

 

10

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

 

EXHIBIT A – COVERED EMPLOYEES

 

Ari Bose

Mark Green

David King

Viraj Patel

 

11

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