Exhibit 10.1

 

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November 15, 2009

 

Kenneth Luk

 

(Delivery by email)

 

Dear Kenneth:

 

I am pleased to confirm the offer of employment by UTStarcom Inc. (hereafter
“UTStarcom” or the “Company”).  The terms and conditions outlined in this offer
of employment are contingent upon the acceptance of this offer within one week
from the date of this letter, and commencement of your employment with the
Company no later than December 17th, 2009.

 

Your job title will be Senior Vice President and Chief Financial Officer.  You
will report directly to Peter Blackmore, President and Chief Executive Officer,
and will be located in Hangzhou, China, or any other location in China as
requested by the Company.

 

All payments and stock awards will be subjected to any applicable tax or other
legally-required withholding.  You will however be tax equalized to Hong Kong
per our tax equalization policy as detailed below.

 

The key elements of this employment offer are as follows:

 

Base Salary:  Your starting salary will be an annual salary of RMB 2,500,000,
with a 12 month pay schedule per year. Your salary will be paid on the last day
of each month, and will be reviewed on an annual basis. Such reviews will not
automatically result in an adjustment to your salary.

 

Global Performance Bonus:  Your on target bonus is 50% of your base salary,
which is based on both company and individual performance.  The terms and
conditions of the Global Performance Bonus may be modified at anytime at the
sole discretion of management.  For the 2010 fiscal year, a minimum of 80% of
your Annual Bonus target will be guaranteed to you, and will be payable at the
time bonuses for the 2010 fiscal year are paid to other executives (but no later
than March 15, 2011).

 

Sign-on Bonus:  You will be paid a Sign-on Bonus of RMB 340,800 payable after
your start date on the first payroll as soon as administratively possible.  If
you resign from UTStarcom within six (6) months from your employment with
UTStarcom, the Sign-on Bonus must be repaid to UTStarcom in full.

 

Restricted Stock Award:  We will recommend to the Compensation Committee (the
“Compensation Committee”) of our Board of Directors, at its next meeting after
your start date at which grants are considered for approval, that you be granted
an award of 300,000 Restricted

 

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Stock of UTStarcom common stock. One-third of the shares will vest on the first
anniversary of the date of grant, then one-third of the shares will vest
annually thereafter, subject to your continuing to provide services to UTStarcom
(or one of its subsidiary companies) through each applicable vesting date.

 

Executive Involuntary Termination Severance Pay Plan:  You will be covered by
the Amended and Restated Executive Involuntary Termination Severance Pay Plan on
the commencement of your employment, in which the terms and conditions, in part
provide as follows:

 

In the event of involuntary termination of your employment for reasons other
than cause, death or disability, you will be provided with payment of one year’s
base salary plus 100% of your on target bonus for the year in which the
termination occurs, an amount equal to twelve (12) months of the premiums for
continuation coverage for your health benefits and 100% full vesting of equity
as granted to you, including without limitation to stock options, restricted
stock, restricted stock units, stock appreciation rights, performance units,
performance shares and other stock awards.

 

Financial Planning benefit:  UTStarcom will cover up to RMB 34,100 per year of
costs incurred by you in obtaining comprehensive financial planning and
investment management services to assist you in understanding your financial
picture and estate planning and insurance needs.  Covered services include
retirement planning, education funding, portfolio risk management, concentrated
stock and employee stock option management, 10b5-1 design, income and asset
protection, estate planning and philanthropic gifting.  While we have made
special arrangements for these services to be provided by Merrill Lynch, you can
use any provider of your choice.  This is considered a taxable benefit.

 

Expatriate Benefits:  You will be eligible to receive expatriate benefits as
follows:

 

·                  Housing: You will be provided an apartment in Hangzhou, with
monthly rental not to exceed RMB 20,450.  In the event you are asked to move to
Beijing, this allowance is subject to re-negotiation in the event that an
apartment of an appropriate standard cannot be funded by this allowance.

 

·                  Car Allowance:  You will be provided a car and driver in
Hangzhou through the company’s car fleet, or in Beijing in the event you are
asked to relocate.

 

·                  Relocation assistance of up to RMB 102,250 to cover the
actual expenses of reasonable, documented travel, and moving to and storing your
personal effects in the assignment country within 90 days from your start date.
You have the option of submitting receipts for reimbursement or receive a
taxable lump sum amount.  If you resign from your employment with the Company
within one (1) year following your start date, you agree that you will
immediately repay the Company the full amount of the relocation reimbursement
that you receive, less 1/12 of that amount for each full month that you are
actually employed by the Company and this will not be pro-rated if you worked
less than a full month.

 

·                  Home visit travel benefit of one round-trip airfare per
quarter to visit Hong Kong.

 

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·                  Repatriation: In the event of repatriation, the Company will
reimburse you for the actual, reasonable, documented moving and travel costs
incurred by you to return to your home country.  The maximum amount of such
reimbursement will be up to RMB 102,250 (which amount will be subject to setoff
for any amounts owed by you to the Company) and original receipts are required;
no lump sum payment option is available. To qualify for the reimbursement,
relocation expense must be incurred within 90 days following effective date of
your repatriation.

 

·                  Medical, Dental & Vision Plan coverage will be provided under
Aetna Global Benefits policy.

 

·                  Taxation equalization: The Company will provide you with tax
equalization so that you incur no additional tax liability or benefit as a
result of your assignment outside Hong Kong. In other words, your tax liability
will be the same as if you had remained in your home country.  The Company will
provide tax preparation and equalization services through Deloitte & Touche,
which will also assist you in complying with all applicable tax laws of your
home country and host country.  Tax preparation and equalization will be subject
to the terms and conditions of the Company’s Tax Equalization Policy.

 

·                  Meal Allowance: You will also be eligible for a meal
allowance of RMB 8 per working day.

 

Interest or penalties imposed by tax authorities as a result of improper
reporting or delays in providing necessary documents by you to Deloitte & Touche
will be your responsibility.

 

To the extent that it is required by the laws of Hong Kong that you and the
Company contribute towards your mandatory provident fund (“MPF”), the Company
shall so contribute as required and you agree that the Company may deduct your
portion of the relevant contribution to the MPF from your remuneration so long
as you are required to so contribute and you are under our employ.

 

You will be entitled to 15 business days of annual leave upon joining the
Company. Days of your entitled annual leave will increase one day for every
three years of continuous service up to a maximum of 20 days.  You will be
subject to your assignment country’s holiday schedule.

 

You will be entitled to other employee benefits according to the Company
regulations, and be required to observe the terms and conditions as described in
the regulations.

 

You may terminate your employment with the Company upon 30 days notice to the
Company. Similarly, in the event that the Company wishes to terminate your
service for reasons of unsatisfactory performance or redundancy, you shall be
given 30 days notice. However, the Company has a right to give 1 day notice of
termination of employment in case of serious instances of violations of work
rules, discourtesy to staff or clients, misbehavior or actions which damage the
reputation of the Company.  In the case of malfeasance, theft, fraud or other
serious misbehavior, such termination may be made effective immediately. The
Company may tender payment, in lieu of the notice referred to above.

 

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You may learn certain facts, know-how, trade secrets or other confidential
information during your employment at the Company. Signature of this agreement
represents your promise that during and after your employment with the Company,
you will keep all such information strictly confidential, and will never use it
for the benefit of yourself or a third party, unless prior written permission
for such use is obtained from the Company.

 

This letter agreement sets forth the terms of your employment with the Company
and supersedes any prior representations or agreements, whether written or
oral.  This agreement may not be modified or amended except by a subsequent
written agreement, signed by an authorized officer of the Company and by you.

 

This offer is contingent upon successful reference or background checks.  We ask
that you indicate your consent and approval of the provisions of your offer
letter attachment by signing the acknowledgment block below on the offer letter
and initialing each page of your offer letter attachments.

 

For and on behalf of

 

UTStarcom Inc.

 

 

 

 

 

Mark Green

 

Senior Vice President, Global Human Resources & Real Estate

 

 

 

 

 

Acknowledge and agreed by,

 

 

 

 

 

Kenneth Luk

 

 

 

 

 

Date

 

 

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