**Exhibit10.3**

 

**FORM OF STOCK OPTION AWARD AGREEMENT**

 

**DIRECTORS AND OFFICERS**

 

***Certificateof Stock Option Grant***

1275 Harbor Bay Parkway

Alameda, CA  94502 USA

Main: 1-510-864-8800

Fax:   1-510-864-8802

 

Employee ID:

 

You have been granted an option to purchase UTStarcom, Inc. CommonStock as follows:

 

**Type ofOption:**

**GrantNo.:**

**StockOption Plan:**

**Date ofGrant:**

**VestingCommencement Date:**

**TotalNumber of Option Shares:**

**OptionExercise Price per Share:**

**TotalExercise Price of Option Shares:**

**Term/ExpirationDate:**

 
| ** **              | ** ** | **Vesting  Frequency** | ** ** | **Total  Shares Vesting** |
|-------------------------|------------|------------------------|------------|---------------------------|
| **Vesting Period Ends** | ** ** | **During  Period**     | ** ** | **Over  Period**          |
| ** **              | ** ** | ** **             | ** ** | ** **                |
| ** **              | ** ** | ** **             | ** ** | ** **                |
| ** **              | ** ** | ** **             | ** ** | ** **                |

 

You agree by acceptance of this grant that this grant is subject to theterms and conditions of the 2006 Equity Incentive Plan (as amended from time totime), the Stock Option Award Agreement for the Plan year (the “Award Agreement”),and any country-specific terms and conditions contained in an Appendix to theAward Agreement if you are resident in or transfer to one of the countriesidentified therein.

 

 

[Signature]

 

[Name]

 

[Title]

 

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** **

**UTSTARCOM, INC.**

** **

**2006 EQUITY INCENTIVEPLAN**

** **

**STOCK OPTION AWARDAGREEMENT**

** **

**DIRECTORSAND OFFICERS**

 

Unless otherwise defined herein, the terms defined in the 2006 EquityIncentive Plan (the “**Plan**”) willhave the same defined meanings in this Stock Option Award Agreement (the “**Award Agreement**”).

 

# **I.**                                       NOTICE OF STOCK OPTION GRANT

# ** **

A.                                   The Plan Administrator of UTStarcom, Inc.,a Delaware corporation (the “**Company**”), herebygrants to the individual named in the Certificate of Stock Option Grant (the “**Participant**”) an option (the “**Option**”)to purchase the number of shares, as set forth in the Certificate of StockOption Grant, at the exercise price per share set forth in the Certificate ofStock Option Grant (the “**Exercise Price**”),subject to the terms and conditions of the Plan, which is incorporated hereinby reference.  Subject to Section 19(c) ofthe Plan, in the event of a conflict between the terms and conditions of thePlan and the terms and conditions of this Award Agreement, the terms andconditions of the Plan will prevail.

 

Subject to any acceleration provisions contained in the Plan or setforth below, this Option may be exercised, in whole or in part, in accordancewith the following schedule:

 

Twenty-fivepercent (25%) of the Shares subject to the Option shall vest twelve (12) monthsafter the Vesting Commencement Date, and 1/48 of the Shares subject to theOption shall vest each month thereafter on the same day of the month as theVesting Commencement Date (and if there is no corresponding day, on the lastday of the month), subject to Participant continuing to be an active ServiceProvider through such dates.

 

B.                                     Termination Period:

 

This Option shall be exercisable for three (3) months afterParticipant ceases to be an active Service Provider, unless such termination isdue to Participant’s death or Disability or such termination occurs withintwelve (12) months after a Change in Control, in which case this Option shallbe exercisable for****twelve (12)months after Participant ceases to be a Service Provider.  Notwithstanding the foregoing, in no eventmay this Option be exercised after the Term/Expiration Date as provided aboveand may be subject to earlier termination as provided in Section 14(c) ofthe Plan.

 

# **II.**                                   AGREEMENT

# ** **

A.                                   Exercise of Option.

 

#### 1.                                       Right to Exercise. This Option is exercisable during its term in accordance with theVesting Schedule set out in the Certificate of Stock Option Grant and the applicableprovisions of the Plan and this Award Agreement.

####  

#### 2.                                       Method of Exercise. This Option is exercisable by delivery of an exercise notice, in theform attached as Exhibit A (the “**ExerciseNotice**”) or in such other form and manner as determined by the Administrator,which will state the election to exercise the Option, the number of Shares inrespect of which the Option is being exercised (the “**ExercisedShares**”), and such other representations and agreements as may berequired by the Company pursuant to the provisions of the Plan.  The Exercise Notice will be completed byParticipant and delivered to the Company. The Exercise Notice will be accompanied by payment of the aggregateExercise Price as to all Exercised 

 

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#### Shares,together with any applicable withholding taxes. This Option will be deemed to be exercised upon receipt by the Companyof such fully executed Exercise Notice accompanied by such aggregate ExercisePrice and any applicable tax withholding (as discussed in greater detail in Section II.Gbelow).

####  

No Shares will be issued pursuant to the exercise ofthis Option unless such issuance and exercise comply with Applicable Laws.  Assuming such compliance, for income taxpurposes the Exercised Shares will be considered transferred to Participant onthe date the Option is exercised with respect to such Exercised Shares.

 

B.                                     Method of Payment.

 

Payment of the aggregateExercise Price will be by any of the following, or a combination thereof, at theelection of Participant:

 

### 1.                                       cash;

###  

### 2.                                       check; or

###  

### 3.                                       consideration received by the Companyunder a formal cashless exercise program adopted by the Company in connectionwith the Plan.

###  

C.                                     Non-Transferability of Option. Unless determined otherwise by the Administrator, this Option may not betransferred in any manner otherwise than by will or by the laws of descent ordistribution and may be exercised during the lifetime of Participant only byParticipant.

 

D.                                    Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry on the booksof the Company or of a duly authorized transfer agent of the Company) of theShares, no right to vote or receive dividends or any other rights as astockholder will exist with respect to the Shares, notwithstanding the exerciseof the Option.  The Shares so acquiredwill be issued to Participant as soon as practicable after exercise of theOption.  No adjustment will be made for adividend or other right for which the record date is prior to the date of issuance,except as provided in Section 14 of the Plan.

 

E.                                      Restrictions on Exercise. This Option may not be exercised until such time as the Plan has beenapproved by the shareholders of the Company, or if the issuance of such Sharesupon such exercise or the method of payment of consideration for such shareswould constitute a violation of any Applicable Law or other law orregulation.  Further, Participant agreesthat, if so requested by the Company, Participant shall not exercise thisOption, or sell or otherwise transfer any Shares or other securities of theCompany.  Participant also agrees thatthe Company may issue stop-transfer instructions with respect to Participant’sShares.

 

F.                                      Term of Option.

 

This Option may be exercised only within the term setout in the Certificate of Stock Option Grant and Notice of Stock Option Grant,and may be exercised during such term only in accordance with the Plan and theterms of this Award Agreement.

 

G.                                     Tax Obligations.

 

### 1.                                       Regardless of any action the Company or Participant’semployer (the “**Employer**”) takes with respect toany or all income tax, social insurance, payroll tax, payment on account orother Tax Obligations related to Participant’s participation in the Plan andlegally applicable to Participant (“**Tax Obligations**”),Participant acknowledges that the ultimate liability for all Tax Obligations isand remains Participant’s responsibility and may exceed the amount actuallywithheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (a) makeno representations or undertaking regarding the treatment of any TaxObligations in connection with any aspect of the Option, including, withoutlimitation, the grant, vesting or exercise of the Option, the issuance of Sharesat exercise of the Option, the subsequent sale of Shares acquired pursuant tosuch 

 

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### issuance and the receipt of any dividends; and (b) donot commit to and are under no obligation to structure the terms of the grantor any aspect of the Option to reduce or eliminate Participant’s liability forTax Obligations or to achieve any particular tax result.  Furthermore, if Participant has becomesubject to tax in more than one jurisdiction between the Date of Grant and thedate of any relevant taxable event, Participant acknowledges that the Companyand/or the Employer (or former employer, as applicable) may be required towithhold or account for Tax Obligations in more than one jurisdiction.

###  

### 2.                                       Prior to any relevant taxable or taxwithholding event, as applicable, Participant will pay or make adequatearrangements satisfactory to the Company and/or the Employer to satisfy all TaxObligations.  In this regard, Participantauthorizes the Company and/or the Employer, or their respective agents, attheir discretion, to satisfy the obligations with regard to all Tax Obligationsby one or a combination of the following: (a) withholding from Participant’swages or other cash compensation paid to Participant by the Company, theEmployer and/or any other Subsidiary or Affiliate; or (b) withholding fromproceeds of the sale of shares acquired at exercise of the Option eitherthrough a voluntary sale or through a mandatory sale arranged by the Company(on Participant’s behalf pursuant to this authorization); or (c) withholdingin shares to be issued at exercise of the Option.

###  

### 3.                                       To avoid any negative accountingtreatment, the Company may withhold or account for Tax Obligations byconsidering applicable minimum statutory withholding amounts or otherapplicable withholding rates.  If theobligation for Tax Obligations is satisfied by withholding in Shares, for taxpurposes, Participant is deemed to have been issued the full number of Sharessubject to the exercised Option Shares, notwithstanding that a number of theShares are held back solely for the purpose of paying the Tax Obligations dueas a result of any aspect of Participant’s participation in the Plan.

###  

### 4.                                       Finally, Participant shall pay to theCompany or the Employer any amount of Tax Obligations that the Company or theEmployer may be required to withhold or account for as a result of Participant’sparticipation in the Plan that cannot be satisfied by the means previouslydescribed in this Section.  The Companymay refuse to issue or deliver the Shares or the proceeds of the sale ofShares, if Participant fails to comply with Participant’s obligations inconnection with the Tax Obligations.

###  

H.                                    No Advice Regarding Grant. PARTICIPANT UNDERSTANDS THAT HE/SHE MAY SUFFER ADVERSE TAXCONSEQUENCES AS A RESULT OF PARTICIPANT’S PARTICIPATION IN THE PLAN INCLUDING,WITHOUT LIMITATION, EXERCISE OF THE OPTION, OR PURCHASE OR DISPOSITON OF THESHARES.  PARTICIPANT REPRESENTS THATPARTICIPANT HAS CONSULTED WITH ANY TAX, LEGAL OR FINANCIAL CONSULTANTSPARTICIPANT DEEMS ADVISABLE IN CONNECTION WITH THE EXERCISE OF THE OPTION, ORPURCHASE OR DISPOSITON OF THE SHARES, AND THAT PARTICIPANT IS NOT RELYING ONTHE COMPANY FOR ANY TAX ADVICE.

 

I.                                         Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documentsrelated to current or future participation in the Plan by electronicmeans.  Participant hereby consents toreceive such documents by electronic delivery and agrees to participate in thePlan through an online or electronic system established and maintained by theCompany or a third party designated by the Company.

 

J.                                        Entire Agreement; Governing Law; Venue.

 

### 1.                                       The Plan is incorporated herein byreference.  The Plan and this AwardAgreement (with any country-specific appendix thereto) constitute the entireagreement of the parties with respect to the subject matter hereof andsupersede in their entirety all prior undertakings and agreements of theCompany and Participant with respect to the subject matter hereof, and may notbe modified adversely to Participant’s interest except by means of a writingsigned by the Company and Participant.

###  

### 2.                                       This Award Agreement is governed by theinternal substantive laws, but not the choice of law rules, of California.  For purposes of litigating any dispute thatarises directly or indirectly from the relationship of the parties evidenced bythe Option or this Award Agreement, the parties hereby submit to and consent tothe exclusive jurisdiction of the State of California and agree that suchlitigation shall be conducted only in the courts of the County of 

 

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### Alameda, State of California, or the federal courtsfor the United States for the Northern District of California, and no othercourts, where this grant is made and/or to be performed.

###  

K.                                    Language.  IfParticipant received this Award Agreement or any other document related to thePlan translated into a language other than English and if the meaning of thetranslated version differs from the English version, the English version shallcontrol.

 

L.                                      Severability. The provisions of this Award Agreement are severable and if any one ormore provisions are determined to be illegal or otherwise unenforceable, inwhole or in part, the remaining provisions shall nevertheless be binding andenforceable.

 

M.                                 Appendix. Notwithstanding any provisions in this Award Agreement, the Optiongranted to Participant shall be subject to any special terms and conditions setforth in any Appendix to this Award Agreement for Participant’s country.  Moreover, if Participant relocates to one ofthe countries included in the Appendix, the special terms and conditions forsuch country shall apply to Participant, to the extent the Company determines thatthe application of such terms and conditions is necessary or advisable in orderto comply with local law or to facilitate the administration of the Plan.  The Appendix constitutes part of this AwardAgreement.

 

N.                                    Imposition of Other Requirements.  The Company reserves the right to impose otherrequirements on Participant’s participation in the Plan, on the Option and onany Shares acquired under the Plan, to the extent the Company determines it isnecessary or advisable in order to comply with local law or facilitate theadministration of the Plan, and to require Participant to execute anyadditional agreements or undertaking that may necessary to accomplish theforegoing.

 

O.                                    No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANTTO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS AN ACTIVESERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARYEMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEINGGRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREESTHAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THEVESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIEDPROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’SRIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING ORRETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICEPROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

 

By Participant’s receipt of this Award Agreement,Participant and the Company agree that this Option is granted under andgoverned by the terms and conditions of the Plan and this Award Agreement(including any country-specific appendix thereto).  Participant has reviewed the Plan and thisAward Agreement in their entirety, has had an opportunity to obtain the adviceof counsel prior to executing this Award Agreement and fully understands allprovisions of the Plan and this Award Agreement.  Participant hereby agrees to accept asbinding, conclusive and final all decisions or interpretations of theAdministrator upon any questions relating to the Plan and this Award Agreement.  Participant further agrees to notify theCompany upon any change in the residence address indicated below.

 

***[Appendixwith Country-Specific Terms and Conditions Immediately Follows]***

 

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**APPENDIXA**

 

**ADDITIONAL TERMS ANDCONDITIONS**

**UTSTARCOM, INC.**

**2006 EQUITY INCENTIVEPLAN**

**STOCK OPTION AWARDAGREEMENT**

** **

**FOR U.S.PARTICIPANTS**

 

***TERMS AND CONDITIONS***

 

This Appendix includes additional terms and conditionsthat govern the Option granted under the Plan if Participant resides in theU.S. or is subject to taxation in the U.S. Certain capitalized terms used but not defined in this Appendix shallhave the meanings set forth in the Plan, the Certificate of Stock Option Grantand/or the Award Agreement to which this Appendix is attached.

 

A.                                   Incentive Stock Options.

 

1.                                       If designated in the Notice of Grant asan Incentive Stock Option (“**ISO**”), theOption is intended to qualify as an Incentive Stock Option under Section 422of the Code.  However, if the Option is intendedto be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule ofCode Section 422(d) it will be treated as a Nonstatutory Stock Option(“**NSO**”). Further, if for any reason the Option (or portion thereof) shall notqualify as an ISO, then, to the extent of such nonqualification, such Option(or portion thereof) shall be regarded as a NSO granted under the Plan.  In no event shall the Administrator, theCompany or any Parent or Subsidiary or any of their respective employees ordirectors have any liability to Participant (or any other person) due to thefailure of the Option to qualify for any reason as an ISO.

 

2.                                       If the Option granted to Participantherein is an ISO, and if Participant sells or otherwise disposes of any of theShares acquired pursuant to the ISO on or before the later of (a) the datetwo years after the Date of Grant, or (b) the date one year after the dateof exercise, Participant will immediately notify the Company in writing of suchdisposition.  Participant agrees thatParticipant may be subject to income tax withholding by the Company on thecompensation income recognized by Participant.

 

B.                                     Method of Payment. In addition to the methods of payment set forth in Section II.B ofthe Award Agreement, payment of the Exercise Price may also be made, at theelection of Participant, by surrender of other Shares which, (a) shall bevalued at its Fair Market Value on the date of exercise, and (b) must beowned free and clear of any liens, claims, encumbrances or security interests,if accepting such Shares, in the sole discretion of the Administrator, does notresult in any adverse accounting consequences to the Company.

 

C.                                     Code Section 409A. Under Code Section 409A, an Option that vests after December 31,2004 (or that vested on or prior to such date but which was materially modifiedafter October 3, 2004) that was granted with a per Share exercise pricethat is determined by the Internal Revenue Service (the “**IRS**”)to be less than the Fair Market Value of a Share on the date of grant (a “discountoption”) may be considered “deferred compensation.”  An Option that is a “discount option” mayresult in (i) income recognition by Participant prior to the exercise ofthe Option, (ii) an additional twenty percent (20%) federal income tax,and (iii) potential penalty and interest charges.  The “discount option” may also result inadditional state income, penalty and interest tax to the Participant.  Participant acknowledges that the Companycannot and has not guaranteed that the IRS will agree that the per Shareexercise price of this Option equals or exceeds the Fair Market Value of aShare on the date of grant in a later examination.  Participant agrees that if the IRS determinesthat the Option was granted with a per Share exercise price that was less thanthe Fair Market Value of a Share on the date of grant, Participant shall besolely responsible for Participant’s costs related to such a determination.

 

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**APPENDIX B**

 

**ADDITIONALTERMS AND CONDITIONS**

**UTSTARCOM,INC.**

**2006EQUITY INCENTIVE PLAN**

**STOCKOPTION AWARD AGREEMENT**

 

**FORNON-U.S. PARTICIPANTS**

 

***TERMSAND CONDITIONS***

 

This Appendix includesadditional terms and conditions that govern the Option granted under the Planif Participant resides in one of the countries listed below during the exerciseperiod.  Certain capitalized terms usedbut not defined in this Appendix shall have the meanings set forth in the Plan,the Certificate of Stock Option Grant and/or the Award Agreement to which thisAppendix is attached.

 

***NOTIFICATIONS***

 

This Appendix alsoincludes notifications relating to exchange control and other issues of whichParticipant should be aware with respect to his or her participation in thePlan.  The information is based on theexchange control, securities and other laws in effect in the countries listedin this Appendix, as of August 2008. Such laws are often complex and change frequently.  As a result, the Company strongly recommendsthat Participant not rely on the notifications herein as the only source ofinformation relating to the consequences of his or her participation in thePlan because the information may be outdated when Participant exercises theOption and purchases Shares, or when Participant subsequently sells Sharesacquired under the Plan.

 

In addition, thenotifications are general in nature and may not apply to Participant’sparticular situation, and the Company is not in a position to assureParticipant of any particular result.  Accordingly,Participant is advised to seek appropriate professional advice as to how therelevant laws in Participant’s country may apply to Participant’ssituation.  Finally, if Participant is acitizen or resident of a country other than the one in which Participant iscurrently working, the information contained herein may not be applicable toParticipant.

 

***ALLNON-U.S. PARTICIPANTS***

 

A.                                   Nature of Grant.  In accepting the grant of the Option,Participant acknowledges that:

 

### 1.                                       the Plan is established voluntarily bythe Company, is discretionary in nature and may be modified, amended, suspendedor terminated by the Company at any time;

###  

### 2.                                       the grant of the Option is voluntary andoccasional and does not create any contractual or other right to receive futuregrants of Options, or benefits in lieu of Options, even if Options have beengranted repeatedly in the past;

###  

### 3.                                       all decisions with respect to futuregrants of Options, if any, will be at the sole discretion of the Company;

###  

### 4.                                       Participant is voluntarily participatingin the Plan;

###  

### 5.                                       the Option and the Option Shares are anextraordinary item that does not constitute compensation of any kind forservices of any kind rendered to the Company or the Employer and which isoutside the scope of Participant’s employment contract, if any;

###  

### 6.                                       the Option and the Option Shares are notintended to replace any pension rights or compensation;

 

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### 7.                                       the Option and the Option Shares are notpart of normal or expected compensation or salary for any purposes, including,without limitation, calculating any severance, resignation, termination,redundancy, dismissal, end-of-service payments, bonuses, long-service awards,pension or retirement or welfare benefits or similar payments and in no eventshould be considered as compensation for, or relating in any way to, pastservices for the Company, the Employer or any Subsidiary or Affiliate;

###  

### 8.                                       the grant of the Option and Participant’sparticipation in the Plan shall not be interpreted to form an employmentcontract or relationship with the Company or any Subsidiary or Affiliate;

###  

### 9.                                       the future value of the Option and theOption Shares is unknown and cannot be predicted with certainty;

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### 10.                                 if the Option Shares do not increase invalue, the Option will have no value;

###  

### 11.                                 if Participant exercises the Option andobtains Shares, the value of those Shares may increase or decrease in value,even below the Exercise Price per Share;

###  

### 12.                                 in consideration of the grant of theOption, no claim or entitlement to compensation or damages shall arise fromforfeiture of the Option resulting from termination of Participant’s status asa Service Provider for the Company or the Employer (for any reason whatsoeverand whether or not in breach of local labor laws), and Participant irrevocablyreleases the Company and the Employer from any such claim that may arise; if,notwithstanding the foregoing, any such claim is found by a court of competentjurisdiction to have arisen, Participant shall be deemed irrevocably to havewaived his or her entitlement to pursue such claim;

###  

### 13.                                 in the event of termination ofParticipant’s status as a Service Provider (whether or not in breach of locallabor laws), Participant’s right to vest in the Option under the Plan, if any,will terminate effective as of the date that Participant’s status as an activeService Provider terminates and will not be extended by any notice periodmandated under local law (*e.g.*, status asan active Service Provider would not include a period of “garden leave” orsimilar period pursuant to local law); the Administrator shall have theexclusive discretion to determine when Participant’s status as an activeService Provider has terminated for purposes of the Option grant; and

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### 14.                                 the Option and benefits under the Plan,if any, will not automatically transfer to another company in the case of amerger, takeover or transfer of liability.

###  

B.                                     *Data Privacy.*

 

### *1.**                                     **Participant hereby explicitly andunambiguously consents to the collection, use and transfer, in electronic orother form, of Participant’s personal data as described in this  Award Agreement and any other Option grantmaterials by and among, as applicable, the Employer, the Company and any otherSubsidiary or Affiliate for the exclusive purpose of implementing,administering and managing my participation in the Plan.*

###  

### *2.**                                     **Participant understands that theCompany and the Employer may hold certain personal information aboutParticipant, including, but not limited to, Participant’s name, home addressand telephone number, date of birth, social insurance number or otheridentification number, salary, nationality, job title, any Shares ordirectorships held in the Company, details of all Options or any otherentitlement to Shares granted, canceled, exercised, vested, unvested oroutstanding in Participant’s favor, for the exclusive purpose of implementing,administering and managing the Plan (“**Data**”).*

###  

### *3.**                                     **Participant understands that Datawill be transferred to any broker designated by the Company and any other thirdparties as may be selected by the Company in the future, which are assistingthe Company with the implementation, administration and management of thePlan.  Participant understands that therecipients of the Data may be located in the United States or elsewhere, andthat the recipients’ country (e.g., the United States) may have different dataprivacy laws and protections than Participant’s country.  Participant understands that he or she mayrequest a list with the names and addresses of any potential recipients of theData by contacting Participant’s local*

 

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### *human resourcesrepresentative.  Participant authorizesthe Company, any broker designated by the Company and any other possiblerecipients which may assist the Company (presently or in the future) withimplementing, administering and managing the Plan to receive, possess, use,retain and transfer the Data, in electronic or other form, for the sole purposeof implementing, administering and managing Participant’s participation in thePlan.  Participant understands that Datawill be held only as long as is necessary to implement, administer and manageParticipant’s participation in the Plan. Participant understands that he or she may, at any time, view Data,request additional information about the storage and processing of Data,require any necessary amendments to Data or refuse or withdraw the consentsherein, in any case without cost, by contacting in writing Participant’s localhuman resources representative. Participant understands, however, that refusing or withdrawing his orher consent may affect his or her ability to participate in the Plan.  For more information on the consequences ofParticipant’s refusal to consent or withdrawal of consent, Participantunderstands that he or she may contact Participant’s local human resourcesrepresentative.*

###  

**CHINA**

 

***TERMSAND CONDITIONS***

 

**Cashless, Sell-All ExerciseRestriction.**  Dueto regulatory issues in China, Participant will be required to exercise theOption and pay the Exercise Price and any Tax Obligation related thereto by acashless, sell-all exercise, such that Participant will deliver a properlyexecuted notice together with irrevocable instructions to a broker in a formacceptable to the Company providing for the immediate sale of all of the Sharesacquired upon the exercise of the Option pursuant to a program adopted by theCompany.  The cash proceeds of sale, lessthe aggregate Exercise Price, any Tax Obligations and broker’s fees orcommissions, will be remitted to Participant. In the event of changes in regulatory requirements, the Company reservesthe right to eliminate the cashless sell-all method of exercise requirementand, in its sole discretion, to permit cash exercise or cashless sell-to-coverexercises.

 

**Exchange Control Requirements.**  Participant understands andagrees that, pursuant to local exchange control requirements, Participant willbe required to repatriate the cash proceeds from the immediate sale of the Sharesissued upon exercise of the Option to China. Participant understands that, under local law, such repatriation of hisor her cash proceeds may need to be effectuated through a special exchangecontrol account established by the Company or the Employer or one of theCompany’s other Subsidiaries, and Participant hereby consents and agrees thatany proceeds from the sale of any Shares he or she acquires may be transferredto such special account prior to being delivered to Participant.  In accordance with Section II.N of theAward Agreement, Participant further agrees to comply with any otherrequirements that may be imposed by the Company in the future in order tofacilitate compliance with exchange control requirements in China.

 

**HONG KONG**

 

***TERMSAND CONDITIONS***

 

In the event that Sharesare issued to Participant or his or her heirs earlier than six (6) monthsfrom the Date of Grant, due to legal requirements in Hong Kong, the Shares maynot be sold prior to six (6) months after the Date of Grant.

 

***NOTIFICATIONS***

 

*Warning:  The offer of a grant of an Option and theShares to be issued upon exercise do not constitute a public offering ofsecurities under Honk Kong law, and are available only to Service Providers ofthe Company and its Subsidiaries.*

 

*Please note that the contents ofthe Award Agreement, including the Certificate of Stock Option Grant and thisAppendix, and the Plan have not been reviewed by any regulatory authority inHong Kong.  The Participant is cautionedto review the Grant documentation carefully as it may not include the sameinformation as an offer made by a Hong Kong issuer.  If the Participant is in any doubt about anyof the contents of the Option Agreement, including this Appendix, theCertificate of Stock Option Grant or the Plan, the Participant should obtainindependent legal advice.*

 

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**INDIA**

 

***TERMSAND CONDITIONS***

 

**Restriction of ExerciseMethods.  **Dueto legal restrictions in India, Participant acknowledges and agrees that acashless, “sell to cover” method of exercise, whereby a certain number ofOption Shares are sold immediately upon exercise and the proceeds of the saleare remitted to the Company to cover the aggregate Exercise Price and any Taxor FBT (see below) Obligations, with Participant receiving the remainingShares, shall not be permitted.  In theevent of changes in regulatory requirements, the Company reserves the right, inits sole discretion, to permit a cashless “sell to cover” method of exercise.

 

**Fringe Benefit Tax.**  By accepting the Option andparticipating in the Plan, Participant consents and agrees to assume any andall liability for fringe benefit tax (“FBT”) that may be payable by the Companyor the Employer in connection with the exercise of the Option.  Participant further understands that theCompany may refuse to deliver Shares to Participant if the Company or theEmployer cannot recover from Participant the amount of FBT due in connectionwith the exercise of the Option.

 

***NOTIFICATIONS***

 

**Exchange Control Information.**  Participant acknowledges andagree that any proceeds from the sale of Shares acquired under the Plan and anydividends received in respect of the Shares must be repatriated to India andconverted into local currency within 90 days of receipt.  Participant must obtain a foreign inwardremittance certificate (“FIRC”) from the bank where the foreign currency isdeposited and maintain the FIRC as evidence of repatriation of funds to beproduced if requested by the Reserve Bank of India or the Employer.

 

**JAPAN**

 

***NOTIFICATIONS***

 

**Exchange Control Notification.**  If Participant acquiresShares valued at more than ¥100,000,000 in a single transaction, theParticipant must file a “Securities Acquisition Report” with the Ministry ofFinance (“MOF”) through the Bank of Japan within 20 days of the purchase ofsuch Shares.

 

In addition, ifParticipant pays more than ¥30,000,000 in a single transaction for the purchaseof Shares upon the exercise of the Option, the Participant must file a “PaymentReport” with the MOF through the Bank of Japan by the 20th day of the monthfollowing the month in which the payment was made.  The precise reporting requirements varydepending on whether the relevant payment is made through a bank in Japan.

 

A Payment Report isrequired independently from a Securities Acquisition Report.  Therefore, if the total amount thatParticipant pays upon a one-time transaction for exercising the Option andpurchasing Shares exceeds ¥100,000,000, then Participant must file both aPayment Report and a Securities Acquisition Report.

 

**KOREA**

 

***NOTIFICATIONS***

 

**Exchange Control Information.**  If Participant realizesUS$500,000 or more from the sale of Shares, Participant must repatriate theproceeds to Korea within eighteen months of sale.

 

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**EXHIBITA**

** **

**UTSTARCOM,INC.**

** **

**2006EQUITY INCENTIVE PLAN**

** **

**EXERCISENOTICE**

** **

UTStarcom, Inc.

1275 Harbor Bay Parkway

Suite 100

Alameda, CA 94502

 

Attention: [              ]

 

1.                                       Exercise of Option. Effective as of today,                                 ,          , the undersigned (“**Participant**”) hereby elects to purchase                            shares (the “**Shares**”) of the Common Stock ofUTStarcom, Inc. (the “**Company**”) underand pursuant to the 2006 Equity Incentive Plan (the “**Plan**”)and the Award Agreement dated                (the “**Award Agreement**”).  The purchase price for the Shares will be$                          ,as required by the Award Agreement.

 

2.                                       Delivery of Payment. Participant herewith delivers to the Company the full purchase price forthe Shares and any required withholding taxes to be paid in connection with theexercise of the Option.

 

3.                                       Representations of Participant. Participant acknowledges that Participant has received, read andunderstood the Plan and the Award Agreement and agrees to abide by and be boundby their terms and conditions.

 

4.                                       Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry on the booksof the Company or of a duly authorized transfer agent of the Company) of theShares, no right to vote or receive dividends or any other rights as astockholder will exist with respect to the Shares, notwithstanding the exerciseof the Option.  The Shares so acquiredwill be issued to Participant as soon as practicable after exercise of theOption.  No adjustment will be made for adividend or other right for which the record date is prior to the date ofissuance, except as provided in Section 14 of the Plan.

 

5.                                       Tax Consultation. Participant understands that Participant may suffer adverse taxconsequences as a result of Participant’s purchase or disposition of theShares.  Participant represents thatParticipant has consulted with any tax consultants Participant deems advisablein connection with the purchase or disposition of the Shares and thatParticipant is not relying on the Company for any tax advice.

 

6.                                       Entire Agreement; Governing Law. The Plan and Award Agreement are incorporated herein by reference.  This Exercise Notice, the Plan, and the AwardAgreement constitute the entire agreement of the parties with respect to thesubject matter hereof and supersede in their entirety all prior undertakingsand agreements of the Company and Participant with respect to the subjectmatter hereof, and may not be modified adversely to Participant’s interestexcept by means of a writing signed by the Company and Participant.  This agreement is governed by the internalsubstantive laws, but not the choice of law rules, of California.

 

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| Submitted by: |   | Accepted by:            |
|---------------|--------|-------------------------|
|          |   |                    |
| PARTICIPANT:  |   | UTSTARCOM, INC.         |
|          |   |                    |
|          |   |                    |
| Signature     |   | By                      |
|          |   |                    |
|          |   |                    |
| Print Name    |   | Its                     |
|          |   |                    |
| Address:      |   | Address:                |
|          |   |                    |
|          |   | 1275 Harbor Bay Parkway |
|          |   | Suite 100          |
|          |   | Alameda, CA 94502       |
|          |   |                    |
|          |   |                    |
|          |   | Date Received           |

 

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