Exhibit 10.4


UTSTARCOM, INC.


2006
EQUITY INCENTIVE PLAN


NOTICE
OF GRANT OF PERFORMANCE UNITS


Unless otherwise defined
herein, the terms defined in the 2006 Equity Incentive Plan (the “Plan”) will
have the same defined meanings in this Notice of Grant of Performance Units
(the “Notice of Grant”).


 


	
   

  	
  Participant:

  
	
   

  	
   

  
	
   

  	
  Address:

  



You have been granted the
right to receive Performance Units, subject to the terms and conditions of the
Plan, this Notice of Grant and the Performance Unit Award Agreement attached
hereto as Exhibit A (the “Award Agreement”) as follows:


 


	
   

  	
  Date of Grant

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Target Number of
  Performance Units

  	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Performance Period

  	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Performance
  Matrix

  	
   

  	
  The
  number of Performance Units in which you may vest in accordance with the
  Vesting Schedule below will depend upon achievement [Insert
  Description of Performance Goal(s)] and will be determined in
  accordance with the Performance Matrix, attached hereto as Appendix B. [Insert Performance Target(s)].

  
							



Vesting
Schedule:


The Performance Units
will vest as follows: [Insert Vesting Schedule]


In the event Participant
ceases to be a Service Provider for any or no reason before Participant vests
in the Performance Units, the Performance Units and Participant’s right to
acquire any Units hereunder will immediately terminate.


 


By
Participant’s signature and the signature of the Company’s representative
below, Participant and the Company agree that this Award of Performance Units
is granted under and governed by the terms and conditions of the Plan and the
Award Agreement, both of which are made a part of this document.


	
  PARTICIPANT

  	
   

  	
  UTSTARCOM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Title

  



 

















 


EXHIBIT A


PERFORMANCE
UNIT AWARD AGREEMENT


1.             Grant.  The Company hereby grants to the Participant
named in the attached Notice of Grant  an Award of Performance Units, subject to all
of the terms and conditions in this Award  Agreement and 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.


2.             Company’s
Obligation to Pay.  Each Performance
Unit represents the right to receive a Share on the date it vests.  Unless and until the Performance Units will
have vested in the manner set forth in Section 3, Participant will have no
right to payment of any such Performance Units. 
Prior to actual payment of any vested Performance Units, such Performance
Unit will represent an unsecured obligation of the Company, payable (if at all)
only from the general assets of the Company. 
Any Performance Units that vest in accordance with Sections 3 or 4 will
be paid to Participant (or in the event of Participant’s death, to his or her
estate) in whole Units, subject to Participant satisfying any applicable tax
withholding obligations as set forth in Section 7.  Subject to the provisions of Section 4, such
vested Performance Units shall be paid in Shares as soon as practicable after
vesting, but in each such case within the period ending no later than the date
that is two and one half (21⁄2) months from the end of the Company’s tax year
that includes the vesting date.


3.             Vesting
Schedule.  Except as provided in
Section 4, and subject to Section 5, the Performance Units awarded by this
Award Agreement will vest in accordance with the vesting provisions set forth
in the Notice of Grant.  Performance
Units  scheduled to
vest on a certain date or upon the occurrence of a certain condition will not
vest in Participant in accordance with any of the provisions of this Award  Agreement, unless
Participant will have been continuously a Service Provider from the Date of
Grant until the date such vesting occurs.


4.             Administrator
Discretion.  The Administrator, in
its discretion, may accelerate the vesting of the balance, or some lesser
portion of the balance, of the unvested Performance Units at any time, subject
to the terms of the Plan.  If so
accelerated, such Performance Units will be considered as having vested as of
the date specified by the Administrator.


Notwithstanding anything in the Plan or this Award
Agreement to the contrary, if the vesting of the balance, or some lesser
portion of the balance, of the Performance Units is accelerated in connection
with Participant’s termination as a Service Provider (provided that such
termination is a “separation from service” within the meaning of Section 409A,
as determined by the Company),
other than due to death, and if (x) Participant
is a “specified employee” within the meaning of Section 409A at the time of
such termination as a Service Provider and (y) the payment of such accelerated
Performance Units will result in the imposition of additional tax under Section
409A if paid to Participant on or within the six (6) month period following
Participant’s termination as a Service Provider, then the payment of such
accelerated Performance Units will not be made until the date six (6) months
and one (1) day following the date of Participant’s termination as a Service
Provider, unless the Participant dies following his or her termination as a
Service Provider, in which case, the Performance Units will be paid in Units to
the Participant’s estate as soon as practicable following his or her
death.  It is the intent

















 


of this Award Agreement to comply with the requirements of Section 409A
so that none of the Performance Units provided under this Award Agreement or
Units issuable thereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply.  For purposes of this Award Agreement, “Section
409A” means Section 409A of the Code, and any proposed, temporary or final
Treasury Regulations and Internal Revenue Service guidance thereunder, as each
may be amended from time to time.


5.             Forfeiture
upon Termination of Status as a Service Provider.  Notwithstanding any contrary provision of
this Award Agreement, the balance of the Performance Units that have not vested
as of the time of Participant’s termination as a Service Provider for any or no
reason and Participant’s right to acquire any Units hereunder will immediately
terminate.


6.             Death
of Participant.  Any distribution or delivery to be made to
Participant under this Award Agreement will, if Participant is then
deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant,
the administrator or executor of Participant’s estate.  Any such transferee must furnish the Company
with (a) written notice of his or her status as transferee, and
(b) evidence satisfactory to the Company to establish the validity of the
transfer and compliance with any laws or regulations pertaining to said
transfer.


7.             Withholding
of Taxes.  Notwithstanding any contrary
provision of this Award
Agreement, no certificate representing the Units will be issued to
Participant, unless and until satisfactory arrangements (as determined by the
Administrator) will have been made by Participant with respect to the payment of
income, employment and other taxes which the Company determines must be
withheld with respect to such Units.  The
Administrator, in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit Participant to satisfy such tax
withholding obligation, in whole or in part (without limitation) by
(a) paying cash, (b) electing to have the Company withhold otherwise
deliverable Units having a Fair Market Value equal to the minimum amount
required to be withheld, (c) delivering to the Company already vested and
owned Units having a Fair Market Value equal to the amount required to be
withheld, or (d) selling a sufficient number of such Units otherwise
deliverable to Participant through such means as the Company may determine in
its sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld.  To the extent determined
appropriate by the Company in its discretion, it shall have the right (but not
the obligation) to satisfy any tax withholding obligations by reducing the
number of Units otherwise deliverable to Participant.  If Participant fails to make satisfactory
arrangements for the payment of any required tax withholding obligations
hereunder at the time any applicable Performance Units otherwise are scheduled
to vest pursuant to Sections 3 or 4, Participant will permanently forfeit such
Performance Units and any right to receive Units thereunder and the Performance
Units will be returned to the Company at no cost to the Company.


8.             Rights
as Stockholder.  Neither Participant
nor any person claiming under or through Participant will have any of the
rights or privileges of a stockholder of the Company in respect of any Units
deliverable hereunder unless and until certificates representing such Units
will have been issued, recorded on the records of the Company or its transfer
agents or registrars, and delivered to Participant.  After such issuance, recordation and
delivery, Participant will have all the rights of a stockholder of the Company
with respect to voting such Units and receipt of dividends and distributions on
such Units.

















 


9.             No Guarantee of Continued
Service.  PARTICIPANT ACKNOWLEDGES
AND AGREES THAT THE VESTING OF THE PERFORMANCE UNITS PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A 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 AWARD OF PERFORMANCE
UNITS OR ACQUIRING UNITS 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.


10.           Address for
Notices.  Any notice to be given to the
Company under the terms of this Award Agreement will be addressed to the
Company at UTStarcom, Inc., 1275 Harbor Bay Parkway, Suite 100, Alameda, CA
94502, or at such other address as the Company may hereafter designate in
writing.


11.           Grant
is Not Transferable.  Except to the
limited extent provided in Section 6, this grant and the rights and
privileges conferred hereby will not be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and will not
be subject to sale under execution, attachment or similar process.  Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this grant and the rights and privileges conferred hereby
immediately will become null and void.


12.           Binding
Agreement.  Subject to the limitation
on the transferability of this grant contained herein, this Award  Agreement will be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.


13.           Additional
Conditions to Issuance of Stock.  If
at any time the Company will determine, in its discretion, that the listing,
registration or qualification of the Units upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory authority is necessary or desirable as a condition to the issuance
of Units to Participant (or his or her estate), such issuance will not occur
unless and until such listing, registration, qualification, consent or approval
will have been effected or obtained free of any conditions not acceptable to
the Company.  Where the Company
determines that the delivery of the payment of any Units will violate federal
securities laws or other applicable laws, the Company will defer delivery until
the earliest date at which the Company reasonably anticipates that the delivery
of Units will no longer cause such violation. 
The Company will make all reasonable efforts to meet the requirements of
any such state or federal law or securities exchange and to obtain any such consent
or approval of any such governmental authority.


14.           Plan
Governs.  This Award Agreement is
subject to all terms and provisions of the Plan.  In the event of a conflict between one or
more provisions of this Award Agreement and one or more provisions of the Plan,
the provisions of the Plan will govern. 
Capitalized terms used and not defined in this Award Agreement will have
the meaning set forth in the Plan.

















 


15.           Administrator Authority.  The Administrator will have the power to
interpret the Plan and this Award Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules (including, but not limited
to, the determination of whether or not any Performance Units have
vested).  All actions taken and all
interpretations and determinations made by the Administrator in good faith will
be final and binding upon Participant, the Company and all other interested
persons.  No member of the Administrator
will be personally liable for any action, determination or interpretation made
in good faith with respect to the Plan or this Award  Agreement.


16.           Electronic
Delivery.  The Company may, in its
sole discretion, decide to deliver any documents related to Performance Units
awarded under the Plan or future Performance Units that may be awarded under
the Plan by electronic means or request Participant’s consent to participate in
the Plan by electronic means. 
Participant hereby consents to receive such documents by electronic
delivery and agrees to participate in the Plan through any on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.


17.           Captions.  Captions provided herein are for convenience
only and are not to serve as a basis for interpretation or construction of this
Award Agreement.


18.           Agreement
Severable.  In the event that any
provision in this Award
Agreement will be held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed
to have any effect on, the remaining provisions of this Award Agreement.


19.           Modifications
to the Agreement.  This Award  Agreement constitutes the
entire understanding of the parties on the subjects covered.  Participant expressly warrants that he or she
is not accepting this Award  Agreement in reliance on any promises, representations, or inducements
other than those contained herein. 
Modifications to this Award Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the
Company.  Notwithstanding anything to the
contrary in the Plan or this Award  Agreement, the Company reserves the right to
revise this Award Agreement as it deems necessary or advisable, in its sole
discretion and without the consent of Participant, to comply with Section 409A
or to otherwise avoid imposition of any additional tax or income recognition
under Section 409A in connection to this Award of Performance Units.


20.           Amendment,
Suspension or Termination of the Plan. 
By accepting this Award, Participant expressly warrants that he or she
has received an Award of Performance Units under the Plan, and has received,
read and understood a description of the Plan. 
Participant understands that the Plan is discretionary in nature and may
be amended, suspended or terminated by the Company at any time.


21.           Governing
Law.  This Award Agreement shall be
governed by the laws of the State of California, without giving effect to the conflict
of law principles thereof.  For purposes
of litigating any dispute that arises under this Award of Performance Units or
this Award Agreement, the parties hereby submit to and consent to the
jurisdiction of the State of California, and agree
that such litigation shall be conducted in the courts of Alameda County,
California, or the federal courts for the United
States for the Northern District of California, and no other courts, where this
Award of Performance Units is made and/or to be performed.

















 


APPENDIX
B


PERFORMANCE
MATRIX


 


[INSERT
PERFORMANCE MATRIX]