Exhibit 10.1

 

UTSTARCOM, INC.

 

AMENDED AND RESTATED CHANGE OF CONTROL/INVOLUNTARY TERMINATION

SEVERANCE AGREEMENT

This Change of Control/Involuntary Termination Severance Agreement (the
“Agreement”) is made and entered into effective as of November 30, 2007 (the
“Effective Date”), by and between Hong Liang Lu (the “Employee”) and UTStarcom,
Inc., a Delaware corporation (the “Company”).  Certain capitalized terms used in
this Agreement are defined in Section 1 below.

RECITALS

A.                                   The Company and the Employee previously
entered into a Change of Control Severance Agreement dated January 17, 2003
which provided the Employee with severance benefits upon the Employee’s
termination of employment under certain circumstances (the “Original
Agreement”).

B.                                     The Board of Directors of the Company
(the “Board”) believes that it is in the best interests of the Company and its
shareholders to provide the Employee with enhanced financial security and
sufficient encouragement to remain with the Company and wishes to augment
certain terms of the Original Agreement, which is hereby amended and restated in
its entirety.

AGREEMENT

In consideration of the mutual covenants herein contained and the continued
employment of Employee by the Company, the parties agree as follows:

1.               DEFINITION OF TERMS.  THE FOLLOWING TERMS REFERRED TO IN THIS
AGREEMENT SHALL HAVE THE FOLLOWING MEANINGS:

(A)          CAUSE.  “CAUSE” SHALL MEAN (I) ANY ACT OF PERSONAL DISHONESTY TAKEN
BY THE EMPLOYEE IN CONNECTION WITH HIS RESPONSIBILITIES AS AN EMPLOYEE WHICH IS
INTENDED TO RESULT IN SUBSTANTIAL PERSONAL ENRICHMENT OF THE EMPLOYEE,
(II) 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, (III) A WILLFUL ACT BY THE EMPLOYEE WHICH CONSTITUTES MISCONDUCT AND
IS INJURIOUS TO THE COMPANY, AND (IV) CONTINUED WILLFUL VIOLATIONS BY THE
EMPLOYEE OF THE EMPLOYEE’S OBLIGATIONS TO THE COMPANY AFTER THERE HAS BEEN
DELIVERED TO THE EMPLOYEE A WRITTEN DEMAND FOR PERFORMANCE FROM THE COMPANY
WHICH DESCRIBES THE BASIS FOR THE COMPANY’S BELIEF THAT THE EMPLOYEE HAS NOT
SUBSTANTIALLY PERFORMED HIS DUTIES.

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

 

(B)         CHANGE OF CONTROL.  “CHANGE OF CONTROL” SHALL MEAN THE OCCURRENCE OF
ANY OF THE FOLLOWING EVENTS:

(I)             THE APPROVAL BY SHAREHOLDERS OF THE COMPANY 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) MORE THAN FIFTY PERCENT (50%) OF THE TOTAL VOTING POWER
REPRESENTED BY THE VOTING SECURITIES OF THE COMPANY OR SUCH SURVIVING ENTITY
OUTSTANDING IMMEDIATELY AFTER SUCH MERGER OR CONSOLIDATION;

(II)          THE APPROVAL BY THE SHAREHOLDERS OF THE COMPANY OF A PLAN OF
COMPLETE LIQUIDATION OF THE COMPANY OR AN AGREEMENT FOR THE SALE OR DISPOSITION
BY THE COMPANY OF ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS;

(III)       ANY “PERSON” (AS SUCH TERM IS USED IN SECTIONS 13(D) AND 14(D) OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED) BECOMING THE “BENEFICIAL OWNER”
(AS DEFINED IN RULE 13D-3 UNDER SAID ACT), DIRECTLY OR INDIRECTLY, OF SECURITIES
OF THE COMPANY REPRESENTING 50% OR MORE OF THE TOTAL VOTING POWER REPRESENTED BY
THE COMPANY’S THEN OUTSTANDING VOTING SECURITIES; OR

(IV)      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”
SHALL MEAN DIRECTORS WHO EITHER (A) ARE DIRECTORS OF THE COMPANY AS OF THE DATE
HEREOF, 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 TRANSACTIONS DESCRIBED IN
SUBSECTIONS (I), (II), OR (III) OR IN CONNECTION WITH AN ACTUAL OR THREATENED
PROXY CONTEST RELATING TO THE ELECTION OF DIRECTORS OF THE COMPANY.

(C)          GOOD REASON.  “GOOD REASON” SHALL MEAN (I) WITHOUT THE EMPLOYEE’S
EXPRESS WRITTEN CONSENT, A SIGNIFICANT REDUCTION OF THE EMPLOYEE’S DUTIES,
POSITION OR RESPONSIBILITIES RELATIVE TO THE EMPLOYEE’S DUTIES, POSITION OR
RESPONSIBILITIES IN EFFECT IMMEDIATELY PRIOR TO SUCH REDUCTION, OR THE REMOVAL
OF THE EMPLOYEE FROM SUCH POSITION, DUTIES AND RESPONSIBILITIES, UNLESS THE
EMPLOYEE IS PROVIDED WITH COMPARABLE DUTIES, POSITION AND RESPONSIBILITIES;
PROVIDED, HOWEVER, THAT A REDUCTION IN DUTIES, POSITION OR RESPONSIBILITIES
SOLELY BY VIRTUE OF THE COMPANY BEING ACQUIRED AND MADE PART OF A LARGER ENTITY
SHALL NOT CONSTITUTE A “GOOD REASON;” (II) WITHOUT THE EMPLOYEE’S EXPRESS
WRITTEN CONSENT, A SUBSTANTIAL REDUCTION, WITHOUT GOOD BUSINESS REASONS, OF THE
FACILITIES AND PERQUISITES (INCLUDING OFFICE SPACE AND LOCATION) AVAILABLE TO
THE EMPLOYEE IMMEDIATELY PRIOR TO SUCH REDUCTION; (III) A REDUCTION BY THE
COMPANY OF THE EMPLOYEE’S BASE SALARY AS IN EFFECT IMMEDIATELY PRIOR TO SUCH
REDUCTION; (IV) A MATERIAL REDUCTION BY THE COMPANY IN THE KIND OR LEVEL OF
EMPLOYEE BENEFITS TO WHICH THE EMPLOYEE IS ENTITLED IMMEDIATELY PRIOR TO SUCH
REDUCTION WITH THE RESULT THAT THE EMPLOYEE’S OVERALL BENEFITS PACKAGE IS
SIGNIFICANTLY REDUCED; (V) WITHOUT THE EMPLOYEE’S EXPRESS WRITTEN CONSENT, THE
RELOCATION OF THE EMPLOYEE TO A FACILITY OR A LOCATION MORE THAN FIFTY
(50) MILES FROM HIS CURRENT LOCATION; (VI) ANY PURPORTED TERMINATION OF THE
EMPLOYEE BY THE COMPANY WHICH IS NOT EFFECTED FOR CAUSE OR FOR WHICH THE GROUNDS
RELIED UPON ARE NOT VALID; OR (VII) THE FAILURE OF THE COMPANY TO OBTAIN THE
ASSUMPTION OF THIS AGREEMENT BY ANY SUCCESSORS CONTEMPLATED IN SECTION 9 BELOW.

(D)         INVOLUNTARY TERMINATION.  “INVOLUNTARY TERMINATION” SHALL MEAN ANY
TERMINATION (OTHER THAN A TERMINATION FOR CAUSE) OF THE EMPLOYEE BY THE COMPANY.

 

2

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

 

(E)          TERMINATION DATE.  “TERMINATION DATE” SHALL MEAN THE EFFECTIVE DATE
OF ANY NOTICE OF TERMINATION DELIVERED BY ONE PARTY TO THE OTHER HEREUNDER.

2.               TERM OF AGREEMENT.  THIS AGREEMENT WILL HAVE A TERM OF THREE
(3) YEARS COMMENCING ON THE EFFECTIVE DATE.  FOLLOWING THE EXPIRATION OF THE
THREE-YEAR TERM, THE EMPLOYEE AND THE COMPANY MAY, BUT ARE NOT OBLIGATED TO,
ENTER INTO A NEW AGREEMENT.  IF EMPLOYEE’S EMPLOYMENT CONTINUES FOLLOWING THE
EXPIRATION OF THE THREE-YEAR TERM, AND THE COMPANY AND EMPLOYEE DO NOT ENTER
INTO A NEW AGREEMENT, EMPLOYEE’S THEN CURRENT BENEFITS ARRANGEMENTS SHALL
CONTINUE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT UNTIL THE PARTIES AGREE
OTHERWISE.

3.               AT-WILL EMPLOYMENT.  THE COMPANY AND THE EMPLOYEE ACKNOWLEDGE
THAT SUBJECT TO THE PROVISIONS OF THIS AGREEMENT, THE EMPLOYEE’S EMPLOYMENT IS
AND SHALL CONTINUE TO BE AT-WILL, AS DEFINED UNDER APPLICABLE LAW.  IF THE
EMPLOYEE’S EMPLOYMENT TERMINATES FOR ANY REASON, THE EMPLOYEE SHALL NOT BE
ENTITLED TO ANY PAYMENTS, BENEFITS, DAMAGES, AWARDS OR COMPENSATION OTHER THAN
AS PROVIDED BY THIS AGREEMENT, OR AS MAY OTHERWISE BE ESTABLISHED UNDER THE
COMPANY’S THEN EXISTING EMPLOYEE BENEFIT PLANS OR POLICIES AT THE TIME OF
TERMINATION.

4.               SEVERANCE BENEFITS.

(A)          TERMINATION FOLLOWING A CHANGE OF CONTROL.  IF THE EMPLOYEE’S
EMPLOYMENT WITH THE COMPANY TERMINATES AS A RESULT OF A GOOD REASON OR AN
INVOLUNTARY TERMINATION AT ANY TIME WITHIN EIGHTEEN (18) MONTHS AFTER A CHANGE
OF CONTROL, EMPLOYEE SHALL BE ENTITLED TO THE FOLLOWING SEVERANCE BENEFITS:

(I)             TWENTY-FOUR (24) MONTHS OF EMPLOYEE’S BASE SALARY AS IN EFFECT
AS OF THE DATE OF SUCH TERMINATION, LESS APPLICABLE WITHHOLDING, PAYABLE IN A
LUMP SUM WITHIN THIRTY (30) DAYS OF THE TERMINATION DATE;

(II)          TWO HUNDRED PERCENT (200%) OF EMPLOYEE’S FULL ANNUAL PERFORMANCE
TARGET BONUS FOR THE YEAR IN WHICH THE TERMINATION OCCURS, PAYABLE IN A LUMP SUM
WITHIN THIRTY (30) DAYS OF THE DATE OF TERMINATION;

(III)       ALL EQUITY AWARDS, INCLUDING WITHOUT LIMITATION STOCK OPTION GRANTS,
RESTRICTED STOCK AND STOCK PURCHASE RIGHTS, GRANTED BY THE COMPANY TO THE
EMPLOYEE PRIOR TO THE CHANGE OF CONTROL SHALL BECOME FULLY VESTED OR RELEASED
FROM THE COMPANY’S REPURCHASE RIGHT (IF ANY SHARES OF STOCK PURCHASED BY OR
GRANTED TO THE EMPLOYEE PRIOR TO THE CHANGE OF CONTROL REMAIN SUBJECT TO SUCH
REPURCHASE RIGHT) AND EXERCISABLE AS OF THE DATE OF THE TERMINATION TO THE
EXTENT SUCH EQUITY AWARDS ARE OUTSTANDING AND UNEXERCISABLE OR UNRELEASED AT THE
TIME OF SUCH TERMINATION.  THE EMPLOYEE SHALL BE PERMITTED TO EXERCISE HIS
VESTED EQUITY AWARDS (INCLUDING AWARDS THAT VEST AS A RESULT OF THE AGREEMENT)
FOR TWELVE (12) MONTHS FROM THE DATE OF TERMINATION; AND

(IV)      AN AMOUNT EQUAL TO TWELVE (12) MONTHS OF HEALTH INSURANCE PREMIUMS FOR
CONTINUATION COVERAGE PURSUANT TO THE CONSOLIDATED OMNIBUS RECONCILIATION ACT OF
1985 AS AMENDED (“COBRA”) AT THE SAME LEVEL OF HEALTH (I.E., MEDICAL, VISION AND
DENTAL) COVERAGE AND BENEFITS AS IN EFFECT FOR THE EMPLOYEE ON THE DAY
IMMEDIATELY PRECEDING THE DAY OF THE EMPLOYEE’S TERMINATION OF EMPLOYMENT,
PAYABLE IN A LUMP SUM WITHIN THIRTY (30) DAYS OF THE DATE OF TERMINATION.

3

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

 

(B)         TERMINATION APART FROM A CHANGE OF CONTROL.  IF THE EMPLOYEE’S
EMPLOYMENT WITH THE COMPANY TERMINATES AS A RESULT OF A GOOD REASON OR AN
INVOLUNTARY TERMINATION DURING THE TERM OF THIS AGREEMENT, THEN THE EMPLOYEE
SHALL BE ENTITLED TO THE FOLLOWING SEVERANCE BENEFITS:

(I)             TWENTY-FOUR (24) MONTHS OF EMPLOYEE’S BASE SALARY AS IN EFFECT
AS OF THE DATE OF SUCH TERMINATION, LESS APPLICABLE WITHHOLDING, PAYABLE IN A
LUMP SUM WITHIN THIRTY (30) DAYS OF THE TERMINATION;

(II)          ONE HUNDRED PERCENT (100%) OF EMPLOYEE’S FULL ANNUAL PERFORMANCE
TARGET BONUS FOR THE YEAR IN WHICH THE TERMINATION OCCURS, PAYABLE IN A LUMP SUM
WITHIN THIRTY (30) DAYS OF THE TERMINATION;

(III)       ALL EQUITY AWARDS, INCLUDING WITHOUT LIMITATION STOCK OPTION GRANTS,
RESTRICTED STOCK AND STOCK PURCHASE RIGHTS, GRANTED BY THE COMPANY TO THE
EMPLOYEE SHALL BECOME FULLY VESTED OR RELEASED FROM THE COMPANY’S REPURCHASE
RIGHT (IF ANY SHARES OF STOCK PURCHASED BY OR GRANTED TO THE EMPLOYEE REMAIN
SUBJECT TO SUCH REPURCHASE RIGHT) AND EXERCISABLE AS OF THE DATE OF THE
TERMINATION TO THE EXTENT SUCH EQUITY AWARDS ARE OUTSTANDING AND UNEXERCISABLE
OR UNRELEASED AT THE TIME OF SUCH TERMINATION.  THE EMPLOYEE SHALL BE PERMITTED
TO EXERCISE HIS VESTED EQUITY AWARDS (INCLUDING AWARDS THAT VEST AS A RESULT OF
THE AGREEMENT) FOR TWELVE (12) MONTHS FROM THE DATE OF TERMINATION; AND

(IV)      AN AMOUNT EQUAL TO TWELVE (12) MONTHS OF HEALTH INSURANCE PREMIUMS FOR
CONTINUATION COVERAGE PURSUANT TO COBRA AT THE SAME LEVEL OF HEALTH (I.E.,
MEDICAL, VISION AND DENTAL) COVERAGE AND BENEFITS AS IN EFFECT FOR THE EMPLOYEE
ON THE DAY IMMEDIATELY PRECEDING THE DAY OF THE EMPLOYEE’S TERMINATION OF
EMPLOYMENT, PAYABLE IN A LUMP SUM WITHIN THIRTY (30) DAYS OF THE DATE OF
TERMINATION.

(C)          TERMINATION APART FROM A CHANGE OF CONTROL OR INVOLUNTARY
TERMINATION.  FOR AVOIDANCE OF DOUBT, IF THE EMPLOYEE’S EMPLOYMENT WITH THE
COMPANY TERMINATES AS A RESULT OF CAUSE, THEN THE EMPLOYEE SHALL NOT BE ENTITLED
TO RECEIVE SEVERANCE OR OTHER BENEFITS HEREUNDER, EXCEPT THOSE BENEFITS REQUIRED
TO BE PROVIDED BY LAW.

(D)         ACCRUED WAGES AND VACATION; EXPENSES.  WITHOUT REGARD TO THE REASON
FOR, OR THE TIMING OF, EMPLOYEE’S TERMINATION OF EMPLOYMENT: (I) THE COMPANY
SHALL PAY THE EMPLOYEE ANY UNPAID BASE SALARY DUE FOR PERIODS PRIOR TO THE
TERMINATION DATE; (II) THE COMPANY SHALL PAY THE EMPLOYEE ALL OF THE EMPLOYEE’S
ACCRUED AND UNUSED VACATION THROUGH THE TERMINATION DATE; AND (III) FOLLOWING
SUBMISSION OF PROPER EXPENSE REPORTS BY THE EMPLOYEE, THE COMPANY SHALL
REIMBURSE THE EMPLOYEE FOR ALL EXPENSES REASONABLY AND NECESSARILY INCURRED BY
THE EMPLOYEE IN CONNECTION WITH THE BUSINESS OF THE COMPANY PRIOR TO THE
TERMINATION DATE.  THESE PAYMENTS SHALL BE MADE PROMPTLY UPON TERMINATION AND
WITHIN THE PERIOD OF TIME MANDATED BY LAW.

5.               SECTION 409A.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, IF THE COMPANY, REASONABLY DETERMINES THAT SECTION 409A OF THE CODE
WILL RESULT IN THE IMPOSITION OF ADDITIONAL TAX TO AN EARLIER PAYMENT OF ANY
SEVERANCE OR OTHER BENEFITS OTHERWISE DUE TO THE EMPLOYEE PURSUANT TO SECTION 4
OF THIS AGREEMENT OR OTHERWISE ON OR WITHIN THE SIX (6) MONTH PERIOD FOLLOWING
THE EMPLOYEE’S TERMINATION, THE SEVERANCE BENEFITS WILL ACCRUE DURING SUCH SIX

 

 

4

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

 

(6) MONTH PERIOD AND WILL BECOME PAYABLE IN A LUMP SUM PAYMENT ON THE DATE SIX
(6) MONTHS AND ONE (1) DAY FOLLOWING THE EMPLOYEE’S DATE OF TERMINATION.  ALL
SUBSEQUENT PAYMENTS, IF ANY, WILL BE PAYABLE AS PROVIDED IN THIS AGREEMENT.  IN
ADDITION, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THIS
AGREEMENT WILL BE DEEMED AMENDED TO THE EXTENT NECESSARY TO AVOID IMPOSITION OF
ANY ADDITIONAL TAX OR INCOME RECOGNITION PRIOR TO ACTUAL PAYMENT TO THE EMPLOYEE
UNDER CODE SECTION 409A AND ANY TEMPORARY, PROPOSED OR FINAL TREASURY
REGULATIONS AND GUIDANCE PROMULGATED THEREUNDER AND THE PARTIES AGREE TO
COOPERATE WITH EACH OTHER AND TO TAKE REASONABLY NECESSARY STEPS IN THIS
REGARD.  THE EMPLOYEE AGREES TO WORK WITH THE COMPANY IN GOOD FAITH TO AMEND
THIS AGREEMENT BY DECEMBER 31, 2008 TO COMPLY WITH THE FINAL TREASURY
REGULATIONS AND ANY SUBSEQUENT GUIDANCE PROMULGATED UNDER CODE SECTION 409A.

6.               LIMITATION ON PAYMENTS.  IN THE EVENT THAT THE SEVERANCE AND
OTHER BENEFITS PROVIDED FOR IN THIS AGREEMENT OR OTHERWISE PAYABLE TO THE
EMPLOYEE (I) CONSTITUTE “PARACHUTE PAYMENTS” WITHIN THE MEANING OF SECTION 280G
OF THE CODE, AND (II) WOULD BE SUBJECT TO THE EXCISE TAX IMPOSED BY SECTION 4999
OF THE CODE (THE “EXCISE TAX”), THEN EMPLOYEE’S BENEFITS UNDER THIS AGREEMENT
SHALL BE EITHER

(A)          DELIVERED IN FULL, OR

(B)         DELIVERED AS TO SUCH LESSER EXTENT WHICH WOULD RESULT IN NO PORTION
OF SUCH 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
Employee on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code.

Unless the Company and the Employee otherwise agree in writing, any
determination required under this Section shall be made in writing by the
Company’s independent public accountants (the “Accountants”), whose
determination shall be conclusive and binding upon the Employee and the Company
for all purposes.  For purposes of making the calculations required by this
Section, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Section 280G and 4999 of the
Code.  The Company and the 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.

 

 

5

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

 

7.               RELEASE AND NON-DISPARAGEMENT AGREEMENT.  AS A CONDITION TO
RECEIVING SEVERANCE OR OTHER BENEFITS UNDER THIS AGREEMENT, EMPLOYEE WILL BE
REQUIRED TO SIGN A WAIVER AND RELEASE OF ALL CLAIMS ARISING OUT OF HIS
INVOLUNTARY TERMINATION OR SEPARATION FOR GOOD REASON 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.

8.               DEATH OR DISABILITY.  WITH RESPECT TO EMPLOYEE’S EQUITY AWARDS,
IN THE EVENT OF EMPLOYEE’S DEATH OR DISABILITY AS SUCH TERMS ARE DEFINED IN THE
APPLICABLE EQUITY PLANS, AND EMPLOYEE IS STILL EMPLOYED BY THE COMPANY AT THE
TIME OF SUCH DEATH OR DISABILITY, THEN ALL OF EMPLOYEE’S EQUITY AWARDS SHALL
BECOME FULLY VESTED AND EXERCISABLE.

9.               NONSOLICITATION.  EMPLOYEE AGREES FURTHER THAT, FOR THE PERIOD
OF HIS EMPLOYMENT BY THE COMPANY AND FOR ONE (1) YEAR AFTER THE DATE OF
TERMINATION OF HIS EMPLOYMENT BY THE COMPANY, HE WILL NOT, EITHER DIRECTLY OR
THROUGH OTHERS, SOLICIT OR ATTEMPT TO SOLICIT ANY EMPLOYEE, INDEPENDENT
CONTRACTOR OR CONSULTANT OF THE COMPANY TO TERMINATE HIS OR HER RELATIONSHIP
WITH THE COMPANY IN ORDER TO BECOME AN EMPLOYEE, CONSULTANT OR INDEPENDENT
CONTRACTOR TO OR FOR ANY OTHER PERSON OR ENTITY.

10.         SUCCESSORS.

(A)          COMPANY’S SUCCESSORS.  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 SHALL ASSUME THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT AND AGREE
EXPRESSLY TO PERFORM THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT IN THE SAME
MANNER AND TO THE SAME EXTENT AS THE COMPANY WOULD BE REQUIRED TO PERFORM SUCH
OBLIGATIONS IN THE ABSENCE OF A SUCCESSION.  FOR ALL PURPOSES UNDER THIS
AGREEMENT, THE TERM “COMPANY” SHALL INCLUDE ANY SUCCESSOR TO THE COMPANY’S
BUSINESS AND/OR ASSETS WHICH EXECUTES AND DELIVERS THE ASSUMPTION AGREEMENT
DESCRIBED IN THIS SUBSECTION (A) OR WHICH BECOMES BOUND BY THE TERMS OF THIS
AGREEMENT BY OPERATION OF LAW.

(B)         EMPLOYEE’S SUCCESSORS.  WITHOUT THE WRITTEN CONSENT OF THE COMPANY,
EMPLOYEE SHALL NOT ASSIGN OR TRANSFER THIS AGREEMENT OR ANY RIGHT OR OBLIGATION
UNDER THIS AGREEMENT TO ANY OTHER PERSON OR ENTITY.  NOTWITHSTANDING THE
FOREGOING, THE TERMS OF THIS AGREEMENT AND ALL RIGHTS OF EMPLOYEE HEREUNDER
SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, EMPLOYEE’S PERSONAL OR
LEGAL REPRESENTATIVES, EXECUTORS, ADMINISTRATORS, SUCCESSORS, HEIRS,
DISTRIBUTEES, DEVISEES AND LEGATEES.

11.         NOTICES.

(A)          GENERAL.  NOTICES AND ALL OTHER COMMUNICATIONS CONTEMPLATED BY THIS
AGREEMENT SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN WHEN
PERSONALLY DELIVERED OR WHEN MAILED BY U.S. REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED AND POSTAGE PREPAID.  IN THE CASE OF THE EMPLOYEE, MAILED
NOTICES SHALL BE ADDRESSED TO HIM AT THE HOME ADDRESS WHICH HE MOST RECENTLY
COMMUNICATED TO THE COMPANY IN WRITING.  IN THE CASE OF THE COMPANY, MAILED
NOTICES SHALL BE ADDRESSED TO ITS CORPORATE HEADQUARTERS, AND ALL NOTICES SHALL
BE DIRECTED TO THE ATTENTION OF ITS SECRETARY.

 

 

6

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

 

(B)         NOTICE OF TERMINATION.  ANY TERMINATION BY THE COMPANY FOR CAUSE OR
BY THE EMPLOYEE AS A RESULT OF A VOLUNTARY RESIGNATION OR AN INVOLUNTARY
TERMINATION SHALL BE COMMUNICATED BY A NOTICE OF TERMINATION TO THE OTHER PARTY
HERETO GIVEN IN ACCORDANCE WITH THIS SECTION.  SUCH NOTICE SHALL INDICATE THE
SPECIFIC TERMINATION PROVISION IN THIS AGREEMENT RELIED UPON, SHALL SET FORTH IN
REASONABLE DETAIL THE FACTS AND CIRCUMSTANCES CLAIMED TO PROVIDE A BASIS FOR
TERMINATION UNDER THE PROVISION SO INDICATED, AND SHALL SPECIFY THE TERMINATION
DATE (WHICH SHALL BE NOT MORE THAN THIRTY (30) DAYS AFTER THE GIVING OF SUCH
NOTICE).  THE FAILURE BY THE EMPLOYEE TO INCLUDE IN THE NOTICE ANY FACT OR
CIRCUMSTANCE WHICH CONTRIBUTES TO A SHOWING OF INVOLUNTARY TERMINATION SHALL NOT
WAIVE ANY RIGHT OF THE EMPLOYEE HEREUNDER OR PRECLUDE THE EMPLOYEE FROM
ASSERTING SUCH FACT OR CIRCUMSTANCE IN ENFORCING HIS RIGHTS HEREUNDER.

12.         ARBITRATION.

(A)          ANY DISPUTE OR CONTROVERSY ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH, OR TERMINATION THEREOF, SHALL BE SETTLED BY BINDING
ARBITRATION TO BE HELD IN SANTA CLARA COUNTY, CALIFORNIA, IN ACCORDANCE WITH THE
NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES THEN IN EFFECT OF THE
AMERICAN ARBITRATION ASSOCIATION (THE “RULES”).  THE ARBITRATOR MAY GRANT
INJUNCTIONS OR OTHER RELIEF IN SUCH DISPUTE OR CONTROVERSY.  THE DECISION OF THE
ARBITRATOR SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE
ARBITRATION.  JUDGMENT MAY BE ENTERED ON THE ARBITRATOR’S DECISION IN ANY COURT
HAVING JURISDICTION.

(B)         THE ARBITRATOR(S) SHALL APPLY CALIFORNIA LAW TO THE MERITS OF ANY
DISPUTE OR CLAIM, WITHOUT REFERENCE TO CONFLICTS OF LAW RULES.  THE ARBITRATION
PROCEEDINGS SHALL BE GOVERNED BY FEDERAL ARBITRATION LAW AND BY THE RULES,
WITHOUT REFERENCE TO STATE ARBITRATION LAW.  EMPLOYEE HEREBY CONSENTS TO THE
PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN CALIFORNIA FOR
ANY ACTION OR PROCEEDING ARISING FROM OR RELATING TO THIS AGREEMENT OR RELATING
TO ANY ARBITRATION IN WHICH THE PARTIES ARE PARTICIPANTS.

(C)          EMPLOYEE UNDERSTANDS THAT NOTHING IN THIS SECTION MODIFIES
EMPLOYEE’S AT-WILL EMPLOYMENT STATUS.  EITHER EMPLOYEE OR THE COMPANY CAN
TERMINATE THE EMPLOYMENT RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.

(D)         EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION.  EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF,
RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
ARBITRATION, CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:

(I)             ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH
OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND
FAIR DEALING, BOTH EXPRESS AND IMPLIED;

 

 

7

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

 

NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR
INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.

(II)          ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL
STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF
1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT,
THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, ET
SEQ;

(III)       ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS
RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

13.         MISCELLANEOUS PROVISIONS.

(A)          NO DUTY TO MITIGATE.  THE EMPLOYEE SHALL NOT BE REQUIRED TO
MITIGATE THE AMOUNT OF ANY PAYMENT CONTEMPLATED BY THIS AGREEMENT, NOR SHALL ANY
SUCH PAYMENT BE REDUCED BY ANY EARNINGS THAT THE EMPLOYEE MAY RECEIVE FROM ANY
OTHER SOURCE.

(B)         WAIVER.  NO PROVISION OF THIS AGREEMENT MAY BE MODIFIED, WAIVED OR
DISCHARGED UNLESS THE MODIFICATION, WAIVER OR DISCHARGE IS AGREED TO IN WRITING
AND SIGNED BY THE EMPLOYEE AND BY AN AUTHORIZED OFFICER OF THE COMPANY (OTHER
THAN THE EMPLOYEE).  NO WAIVER BY EITHER PARTY OF ANY BREACH OF, OR OF
COMPLIANCE WITH, ANY CONDITION OR PROVISION OF THIS AGREEMENT BY THE OTHER PARTY
SHALL BE CONSIDERED A WAIVER OF ANY OTHER CONDITION OR PROVISION OR OF THE SAME
CONDITION OR PROVISION AT ANOTHER TIME.

(C)          INTEGRATION.  THIS AGREEMENT, TOGETHER WITH ANY OUTSTANDING EQUITY
AWARD AGREEMENTS REFERENCED HEREIN REPRESENT THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE PARTIES AS TO THE SUBJECT MATTER HEREIN AND SUPERSEDE
ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS, WHETHER WRITTEN OR ORAL, WITH RESPECT
TO THIS AGREEMENT AND ANY EQUITY AWARD AGREEMENTS.

(D)         CHOICE OF LAW.  THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL SUBSTANTIVE
LAWS, BUT NOT THE CONFLICTS OF LAW RULES, OF THE STATE OF CALIFORNIA.

(E)          SEVERABILITY.  THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION
OR PROVISIONS OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY
OF ANY OTHER PROVISION HEREOF, WHICH SHALL REMAIN IN FULL FORCE AND EFFECT.

(F)            EMPLOYMENT TAXES.  ALL PAYMENTS MADE PURSUANT TO THIS AGREEMENT
SHALL BE SUBJECT TO WITHHOLDING OF APPLICABLE INCOME AND EMPLOYMENT TAXES.

(G)         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER WILL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

 

8

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

 

(H)         NO REPRESENTATIONS.  THE EMPLOYEE REPRESENTS THAT HE HAS HAD THE
OPPORTUNITY TO CONSULT WITH HIS ATTORNEYS AND TAX ADVISORS, AND HAS CAREFULLY
READ AND UNDERSTANDS THE SCOPE, EFFECT AND POTENTIAL TAX CONSEQUENCES OF THE
PROVISIONS OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE POTENTIAL
CONSEQUENCES OF SECTION 409A OF THE CODE.  THE EMPLOYEE REPRESENTS THAT HE IS
NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

 

 

9

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

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

 

COMPANY:

UTSTARCOM, INC.

 

 

 

By:

/s/ Susan Marsch

 

 

 

Title:

VP and General Counsel

 

 

 

 

EMPLOYEE:

/s/ Hong Liang Lu

 

Signature

 

 

 

Hong Liang Lu

 

Printed Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO CHANGE OF CONTROL/
INVOLUNTARY TERMINATION SEVERANCE AGREEMENT

 

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