Exhibit
10.3


 


FORM OF STOCK OPTION AWARD AGREEMENT


 


DIRECTORS AND OFFICERS


 


Certificate
of 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. Common
Stock as follows:


 


Type of
Option:


Grant
No.:


Stock
Option Plan:


Date of
Grant:


Vesting
Commencement Date:


Total
Number of Option Shares:


Option
Exercise Price per Share:


Total
Exercise Price of Option Shares:


Term/Expiration
Date:


 


	
   

  	
   

  	
  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 the
terms and conditions of the 2006 Equity Incentive Plan (as amended from time to
time), the Stock Option Award Agreement for the Plan year (the “Award Agreement”),
and any country-specific terms and conditions contained in an Appendix to the
Award Agreement if you are resident in or transfer to one of the countries
identified therein.


 


 


[Signature]


 


[Name]


 


[Title]


 


1

















 


UTSTARCOM, INC.


 


2006 EQUITY INCENTIVE
PLAN


 


STOCK OPTION AWARD
AGREEMENT


 


DIRECTORS
AND OFFICERS


 


Unless otherwise defined herein, the terms defined in the 2006 Equity
Incentive Plan (the “Plan”) will
have 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”), hereby
grants 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 Stock
Option Grant, at the exercise price per share set forth in the Certificate of
Stock Option Grant (the “Exercise Price”),
subject to the terms and conditions of the Plan, which is incorporated herein
by reference.  Subject to Section 19(c) of
the Plan, in the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Award Agreement, the terms and
conditions of the Plan will prevail.


 


Subject to any acceleration provisions contained in the Plan or set
forth below, this Option may be exercised, in whole or in part, in accordance
with the following schedule:


 


Twenty-five
percent (25%) of the Shares subject to the Option shall vest twelve (12) months
after the Vesting Commencement Date, and 1/48 of the Shares subject to the
Option shall vest each month thereafter on the same day of the month as the
Vesting Commencement Date (and if there is no corresponding day, on the last
day of the month), subject to Participant continuing to be an active Service
Provider through such dates.


 


B.                                     Termination Period:


 


This Option shall be exercisable for three (3) months after
Participant ceases to be an active Service Provider, unless such termination is
due to Participant’s death or Disability or such termination occurs within
twelve (12) months after a Change in Control, in which case this Option shall
be exercisable for  twelve (12)
months after Participant ceases to be a Service Provider.  Notwithstanding the foregoing, in no event
may this Option be exercised after the Term/Expiration Date as provided above
and may be subject to earlier termination as provided in Section 14(c) of
the Plan.


 


II.                                   AGREEMENT


 


A.                                   Exercise of Option.


 


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


 


2.                                       Method of Exercise. 
This Option is exercisable by delivery of an exercise notice, in the
form attached as Exhibit A (the “Exercise
Notice”) 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 in
respect of which the Option is being exercised (the “Exercised
Shares”), and such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan.  The Exercise Notice will be completed by
Participant and delivered to the Company. 
The Exercise Notice will be accompanied by payment of the aggregate
Exercise Price as to all Exercised 


 


1

















 


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


 


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


 


B.                                     Method of Payment.


 


Payment of the aggregate
Exercise Price will be by any of the following, or a combination thereof, at the
election of Participant:


 


1.                                       cash;


 


2.                                       check; or


 


3.                                       consideration received by the Company
under a formal cashless exercise program adopted by the Company in connection
with the Plan.


 


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


 


D.                                    Rights as Stockholder. 
Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
Shares, no right to vote or receive dividends or any other rights as a
stockholder will exist with respect to the Shares, notwithstanding the exercise
of the Option.  The Shares so acquired
will be issued to Participant as soon as practicable after exercise of the
Option.  No adjustment will be made for a
dividend 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 been
approved by the shareholders of the Company, or if the issuance of such Shares
upon such exercise or the method of payment of consideration for such shares
would constitute a violation of any Applicable Law or other law or
regulation.  Further, Participant agrees
that, if so requested by the Company, Participant shall not exercise this
Option, or sell or otherwise transfer any Shares or other securities of the
Company.  Participant also agrees that
the Company may issue stop-transfer instructions with respect to Participant’s
Shares.


 


F.                                      Term of Option.


 


This Option may be exercised only within the term set
out 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 the
terms of this Award Agreement.


 


G.                                     Tax Obligations.


 


1.                                       Regardless of any action the Company or Participant’s
employer (the “Employer”) takes with respect to
any or all income tax, social insurance, payroll tax, payment on account or
other Tax Obligations related to Participant’s participation in the Plan and
legally applicable to Participant (“Tax Obligations”),
Participant acknowledges that the ultimate liability for all Tax Obligations is
and remains Participant’s responsibility and may exceed the amount actually
withheld by the Company or the Employer. 
Participant further acknowledges that the Company and/or the Employer (a) make
no representations or undertaking regarding the treatment of any Tax
Obligations in connection with any aspect of the Option, including, without
limitation, the grant, vesting or exercise of the Option, the issuance of Shares
at exercise of the Option, the subsequent sale of Shares acquired pursuant to
such 


 


2

















 


issuance and the receipt of any dividends; and (b) do
not commit to and are under no obligation to structure the terms of the grant
or any aspect of the Option to reduce or eliminate Participant’s liability for
Tax Obligations or to achieve any particular tax result.  Furthermore, if Participant has become
subject to tax in more than one jurisdiction between the Date of Grant and the
date of any relevant taxable event, Participant acknowledges that the Company
and/or the Employer (or former employer, as applicable) may be required to
withhold or account for Tax Obligations in more than one jurisdiction.


 


2.                                       Prior to any relevant taxable or tax
withholding event, as applicable, Participant will pay or make adequate
arrangements satisfactory to the Company and/or the Employer to satisfy all Tax
Obligations.  In this regard, Participant
authorizes the Company and/or the Employer, or their respective agents, at
their discretion, to satisfy the obligations with regard to all Tax Obligations
by one or a combination of the following: (a) withholding from Participant’s
wages or other cash compensation paid to Participant by the Company, the
Employer and/or any other Subsidiary or Affiliate; or (b) withholding from
proceeds of the sale of shares acquired at exercise of the Option either
through a voluntary sale or through a mandatory sale arranged by the Company
(on Participant’s behalf pursuant to this authorization); or (c) withholding
in shares to be issued at exercise of the Option.


 


3.                                       To avoid any negative accounting
treatment, the Company may withhold or account for Tax Obligations by
considering applicable minimum statutory withholding amounts or other
applicable withholding rates.  If the
obligation for Tax Obligations is satisfied by withholding in Shares, for tax
purposes, Participant is deemed to have been issued the full number of Shares
subject to the exercised Option Shares, notwithstanding that a number of the
Shares are held back solely for the purpose of paying the Tax Obligations due
as a result of any aspect of Participant’s participation in the Plan.


 


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


 


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


 


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


 


J.                                        Entire Agreement; Governing Law; Venue.


 


1.                                       The Plan is incorporated herein by
reference.  The Plan and this Award
Agreement (with any country-specific appendix thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Participant with respect to the subject matter hereof, and may not
be modified adversely to Participant’s interest except by means of a writing
signed by the Company and Participant.


 


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


 


3

















 


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


 


K.                                    Language.  If
Participant received this Award Agreement or any other document related to the
Plan translated into a language other than English and if the meaning of the
translated version differs from the English version, the English version shall
control.


 


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


 


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


 


N.                                    Imposition of Other Requirements.  The Company reserves the right to impose other
requirements on Participant’s participation in the Plan, on the Option and on
any Shares acquired under the Plan, to the extent the Company determines it is
necessary or advisable in order to comply with local law or facilitate the
administration of the Plan, and to require Participant to execute any
additional agreements or undertaking that may necessary to accomplish the
foregoing.


 


O.                                    No Guarantee of Continued Service. 
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT
TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS AN ACTIVE
SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY
EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES
THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE 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’S
RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR
RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE
PROVIDER 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 and
governed by the terms and conditions of the Plan and this Award Agreement
(including any country-specific appendix thereto).  Participant has reviewed the Plan and this
Award Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Award Agreement and fully understands all
provisions of the Plan and this Award Agreement.  Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and this Award Agreement.  Participant further agrees to notify the
Company upon any change in the residence address indicated below.


 


[Appendix
with Country-Specific Terms and Conditions Immediately Follows]


 


4

















 


APPENDIX
A


 


ADDITIONAL TERMS AND
CONDITIONS


UTSTARCOM, INC.


2006 EQUITY INCENTIVE
PLAN


STOCK OPTION AWARD
AGREEMENT


 


FOR U.S.
PARTICIPANTS


 


TERMS AND CONDITIONS


 


This Appendix includes additional terms and conditions
that govern the Option granted under the Plan if Participant resides in the
U.S. or is subject to taxation in the U.S. 
Certain capitalized terms used but 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 this Appendix is attached.


 


A.                                   Incentive Stock Options.


 


1.                                       If designated in the Notice of Grant as
an Incentive Stock Option (“ISO”), the
Option is intended to qualify as an Incentive Stock Option under Section 422
of the Code.  However, if the Option is intended
to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of
Code Section 422(d) it will be treated as a Nonstatutory Stock Option
(“NSO”). 
Further, if for any reason the Option (or portion thereof) shall not
qualify 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, the
Company or any Parent or Subsidiary or any of their respective employees or
directors have any liability to Participant (or any other person) due to the
failure of the Option to qualify for any reason as an ISO.


 


2.                                       If the Option granted to Participant
herein is an ISO, and if Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (a) the date
two years after the Date of Grant, or (b) the date one year after the date
of exercise, Participant will immediately notify the Company in writing of such
disposition.  Participant agrees that
Participant may be subject to income tax withholding by the Company on the
compensation income recognized by Participant.


 


B.                                     Method of Payment. 
In addition to the methods of payment set forth in Section II.B of
the Award Agreement, payment of the Exercise Price may also be made, at the
election of Participant, by surrender of other Shares which, (a) shall be
valued at its Fair Market Value on the date of exercise, and (b) must be
owned free and clear of any liens, claims, encumbrances or security interests,
if accepting such Shares, in the sole discretion of the Administrator, does not
result 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 modified
after October 3, 2004) that was granted with a per Share exercise price
that 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 “discount
option”) may be considered “deferred compensation.”  An Option that is a “discount option” may
result in (i) income recognition by Participant prior to the exercise of
the Option, (ii) an additional twenty percent (20%) federal income tax,
and (iii) potential penalty and interest charges.  The “discount option” may also result in
additional state income, penalty and interest tax to the Participant.  Participant acknowledges that the Company
cannot and has not guaranteed that the IRS will agree that the per Share
exercise price of this Option equals or exceeds the Fair Market Value of a
Share on the date of grant in a later examination.  Participant agrees that if the IRS determines
that the Option was granted with a per Share exercise price that was less than
the Fair Market Value of a Share on the date of grant, Participant shall be
solely responsible for Participant’s costs related to such a determination.


 


5
















 


APPENDIX B


 


ADDITIONAL
TERMS AND CONDITIONS


UTSTARCOM,
INC.


2006
EQUITY INCENTIVE PLAN


STOCK
OPTION AWARD AGREEMENT


 


FOR
NON-U.S. PARTICIPANTS


 


TERMS
AND CONDITIONS


 


This Appendix includes
additional terms and conditions that govern the Option granted under the Plan
if Participant resides in one of the countries listed below during the exercise
period.  Certain capitalized terms used
but 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 this
Appendix is attached.


 


NOTIFICATIONS


 


This Appendix also
includes notifications relating to exchange control and other issues of which
Participant should be aware with respect to his or her participation in the
Plan.  The information is based on the
exchange control, securities and other laws in effect in the countries listed
in this Appendix, as of August 2008. 
Such laws are often complex and change frequently.  As a result, the Company strongly recommends
that Participant not rely on the notifications herein as the only source of
information relating to the consequences of his or her participation in the
Plan because the information may be outdated when Participant exercises the
Option and purchases Shares, or when Participant subsequently sells Shares
acquired under the Plan.


 


In addition, the
notifications are general in nature and may not apply to Participant’s
particular situation, and the Company is not in a position to assure
Participant of any particular result.  Accordingly,
Participant is advised to seek appropriate professional advice as to how the
relevant laws in Participant’s country may apply to Participant’s
situation.  Finally, if Participant is a
citizen or resident of a country other than the one in which Participant is
currently working, the information contained herein may not be applicable to
Participant.


 


ALL
NON-U.S. PARTICIPANTS


 


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


 


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


 


2.                                       the grant of the Option is voluntary and
occasional and does not create any contractual or other right to receive future
grants of Options, or benefits in lieu of Options, even if Options have been
granted repeatedly in the past;


 


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


 


4.                                       Participant is voluntarily participating
in the Plan;


 


5.                                       the Option and the Option Shares are an
extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to the Company or the Employer and which is
outside the scope of Participant’s employment contract, if any;


 


6.                                       the Option and the Option Shares are not
intended to replace any pension rights or compensation;


 


6

















 


7.                                       the Option and the Option Shares are not
part 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 event
should be considered as compensation for, or relating in any way to, past
services for the Company, the Employer or any Subsidiary or Affiliate;


 


8.                                       the grant of the Option and Participant’s
participation in the Plan shall not be interpreted to form an employment
contract or relationship with the Company or any Subsidiary or Affiliate;


 


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


 


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


 


11.                                 if Participant exercises the Option and
obtains 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 the
Option, no claim or entitlement to compensation or damages shall arise from
forfeiture of the Option resulting from termination of Participant’s status as
a Service Provider for the Company or the Employer (for any reason whatsoever
and whether or not in breach of local labor laws), and Participant irrevocably
releases 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 competent
jurisdiction to have arisen, Participant shall be deemed irrevocably to have
waived his or her entitlement to pursue such claim;


 


13.                                 in the event of termination of
Participant’s status as a Service Provider (whether or not in breach of local
labor 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 active
Service Provider terminates and will not be extended by any notice period
mandated under local law (e.g., status as
an active Service Provider would not include a period of “garden leave” or
similar period pursuant to local law); the Administrator shall have the
exclusive discretion to determine when Participant’s status as an active
Service Provider has terminated for purposes of the Option grant; and


 


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


 


B.                                     Data Privacy.


 


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


 


2.                                      Participant understands that the
Company and the Employer may hold certain personal information about
Participant, including, but not limited to, Participant’s name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any Shares or
directorships held in the Company, details of all Options or any other
entitlement to Shares granted, canceled, exercised, vested, unvested or
outstanding in Participant’s favor, for the exclusive purpose of implementing,
administering and managing the Plan (“Data”).


 


3.                                      Participant understands that Data
will be transferred to any broker designated by the Company and any other third
parties as may be selected by the Company in the future, which are assisting
the Company with the implementation, administration and management of the
Plan.  Participant understands that the
recipients of the Data may be located in the United States or elsewhere, and
that the recipients’ country (e.g., the United States) may have different data
privacy laws and protections than Participant’s country.  Participant understands that he or she may
request a list with the names and addresses of any potential recipients of the
Data by contacting Participant’s local 


 


7

















 


human resources
representative.  Participant authorizes
the Company, any broker designated by the Company and any other possible
recipients which may assist the Company (presently or in the future) with
implementing, administering and managing the Plan to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the sole purpose
of implementing, administering and managing Participant’s participation in the
Plan.  Participant understands that Data
will be held only as long as is necessary to implement, administer and manage
Participant’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 consents
herein, in any case without cost, by contacting in writing Participant’s local
human resources representative. 
Participant understands, however, that refusing or withdrawing his or
her consent may affect his or her ability to participate in the Plan.  For more information on the consequences of
Participant’s refusal to consent or withdrawal of consent, Participant
understands that he or she may contact Participant’s local human resources
representative.


 


CHINA


 


TERMS
AND CONDITIONS


 


Cashless, Sell-All Exercise
Restriction.  Due
to regulatory issues in China, Participant will be required to exercise the
Option and pay the Exercise Price and any Tax Obligation related thereto by a
cashless, sell-all exercise, such that Participant will deliver a properly
executed notice together with irrevocable instructions to a broker in a form
acceptable to the Company providing for the immediate sale of all of the Shares
acquired upon the exercise of the Option pursuant to a program adopted by the
Company.  The cash proceeds of sale, less
the aggregate Exercise Price, any Tax Obligations and broker’s fees or
commissions, will be remitted to Participant. 
In the event of changes in regulatory requirements, the Company reserves
the right to eliminate the cashless sell-all method of exercise requirement
and, in its sole discretion, to permit cash exercise or cashless sell-to-cover
exercises.


 


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


 


HONG KONG


 


TERMS
AND CONDITIONS


 


In the event that Shares
are issued to Participant or his or her heirs earlier than six (6) months
from the Date of Grant, due to legal requirements in Hong Kong, the Shares may
not be sold prior to six (6) months after the Date of Grant.


 


NOTIFICATIONS


 


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


 


Please note that the contents of
the Award Agreement, including the Certificate of Stock Option Grant and this
Appendix, and the Plan have not been reviewed by any regulatory authority in
Hong Kong.  The Participant is cautioned
to review the Grant documentation carefully as it may not include the same
information as an offer made by a Hong Kong issuer.  If the Participant is in any doubt about any
of the contents of the Option Agreement, including this Appendix, the
Certificate of Stock Option Grant or the Plan, the Participant should obtain
independent legal advice.


 


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INDIA


 


TERMS
AND CONDITIONS


 


Restriction of Exercise
Methods.  Due
to legal restrictions in India, Participant acknowledges and agrees that a
cashless, “sell to cover” method of exercise, whereby a certain number of
Option Shares are sold immediately upon exercise and the proceeds of the sale
are remitted to the Company to cover the aggregate Exercise Price and any Tax
or FBT (see below) Obligations, with Participant receiving the remaining
Shares, shall not be permitted.  In the
event of changes in regulatory requirements, the Company reserves the right, in
its sole discretion, to permit a cashless “sell to cover” method of exercise.


 


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


 


NOTIFICATIONS


 


Exchange Control Information.  Participant acknowledges and
agree that any proceeds from the sale of Shares acquired under the Plan and any
dividends received in respect of the Shares must be repatriated to India and
converted into local currency within 90 days of receipt.  Participant must obtain a foreign inward
remittance certificate (“FIRC”) from the bank where the foreign currency is
deposited and maintain the FIRC as evidence of repatriation of funds to be
produced if requested by the Reserve Bank of India or the Employer.


 


JAPAN


 


NOTIFICATIONS


 


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


 


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


 


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


 


KOREA


 


NOTIFICATIONS


 


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


 


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EXHIBIT
A


 


UTSTARCOM,
INC.


 


2006
EQUITY INCENTIVE PLAN


 


EXERCISE
NOTICE


 


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 of
UTStarcom, Inc. (the “Company”) under
and 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 for
the Shares and any required withholding taxes to be paid in connection with the
exercise of the Option.


 


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


 


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


 


5.                                       Tax Consultation. 
Participant understands that Participant may suffer adverse tax
consequences as a result of Participant’s purchase or disposition of the
Shares.  Participant represents that
Participant has consulted with any tax consultants Participant deems advisable
in connection with the purchase or disposition of the Shares and that
Participant 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 Award
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Participant with respect to the subject
matter hereof, and may not be modified adversely to Participant’s interest
except by means of a writing signed by the Company and Participant.  This agreement is governed by the internal
substantive 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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