Exhibit 10.90


 


UTSTARCOM, INC.


 


CHANGE OF
CONTROL SEVERANCE AGREEMENT


 


This
Change of Control Severance Agreement (the ”Agreement”) is made and
entered into effective as of January 31, 2003 (the ”Effective Date”),
by and between Ying Wu (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.            It is expected that the Company from
time to time will consider the possibility of a Change of Control.  The Board of Directors of the as Company
(the ”Board”) recognizes that such consideration can be a distraction to
the Employee and can cause the Employee to consider alternative employment
opportunities.


 


B.            The Board believes that it is in the
best interests of the Company and its shareholders to provide the Employee with
an incentive to continue his employment and to maximize the value of the
Company upon a Change of Control for the benefit of its shareholders.


 


C.            In order to provide the Employee with
enhanced financial security and sufficient encouragement to remain with the
Company notwithstanding the possibility of a Change of Control, the Board
believes that it is imperative to provide the Employee with certain severance
benefits upon the Employee’s termination of employment following a Change of
Control.


 


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)           Involuntary
Termination.  “Involuntary
Termination” 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 (as,
for example, following a Change of Control, the Chief Financial Officer of the
Company is made the Chief Financial Officer of the acquiring entity);
(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 6 below.


 


(d)           Termination
Date.  “Termination Date” shall mean
the effective date of any notice of termination delivered by one party to the
other hereunder.


 


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2.             Term
of Agreement.  This Agreement shall
terminate upon the date that all obligations of the parties hereto under this
Agreement have been satisfied or, if earlier, on the date, prior to a Change of
Control, Employee is no longer employed by the Company.


 


3.             At-Will
Employment.  The Company and the
Employee acknowledge that 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 an
Involuntary Termination at any time within twelve (12) 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 Involuntary Termination;


 


(ii)           one
hundred percent (100%) of Employee’s bonus for the year in which the
termination occurs;


 


(iii)          all
stock options granted by the Company to the Employee prior to the Change of
Control shall become fully vested and exercisable as of the date of the
termination to the extent such stock options are outstanding and unexercisable
at the time of such termination and all stock subject to a right of repurchase
by the Company (or its successor) that was purchased prior to the Change of
Control shall have such right of repurchase lapse with respect to all of the
shares;


 


(iv)          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; provided, however, that (i) the
Employee constitutes a qualified beneficiary, as defined in
Section 4980B(g)(1) of the Internal Revenue Code of 1986, as amended;
and  (ii) Employee elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant
to COBRA.  The Company shall continue to
provide Employee with health coverage until the earlier of (i) the date
Employee is no longer eligible to receive continuation coverage pursuant to
COBRA, or (ii) twelve (12) months from the termination date.


 


(b)           Termination
Apart from a Change of Control.  If
the Employee’s employment with the Company terminates other than as a result of
an Involuntary Termination within the twelve (12) months following a
Change of Control, then the Employee shall not be entitled to receive severance
or other benefits hereunder, but may be eligible for those benefits (if any) as
may


 


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then
be established under the Company’s then existing severance and benefits plans
and policies at the time of such termination.


 


(c)           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.             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.


 


6.             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


 


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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.


 


7.             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.


 


(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 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.


 


8.             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


 


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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; 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.


 


9.             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


 


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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 and any outstanding stock
option agreements and restricted stock purchase 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 stock option
agreement or restricted stock purchase agreement.


 


(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.


 


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/ Michael J. Sophie

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO/VP Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE:

  	
  /s/ Ying Wu

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Ying Wu

  
	
   

  	
  Printed Name

  
				



 


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