Exhibit 10.3


UTSTARCOM, INC.


2006
EQUITY INCENTIVE PLAN


NOTICE
OF GRANT OF PERFORMANCE SHARES


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 Shares
(the “Notice of Grant”).


 


	
   

  	
  Participant:

  
	
   

  	
   

  
	
   

  	
  Address:

  



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


	
   

  	
  Date of Grant

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Target Number of
  Performance Shares

  	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  	
   

  
	
   

  	
  Performance Period

  	
   

  	
  [

  	
   

  	
  ]

  
	
   

  	
   

  
	
   

  	
  Performance
  Matrix

  	
  The
  number of Performance Shares 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 Shares
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 Shares, the Performance Shares and Participant’s right to
acquire any Shares 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 Shares
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
SHARE AWARD AGREEMENT


1.             Grant.  The Company hereby grants to the Participant
named in the attached Notice of Grant  an Award of Performance Shares, 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
Share represents the right to receive a Share on the date it vests.  Unless and until the Performance Shares will
have vested in the manner set forth in Section 3, Participant will have no
right to payment of any such Performance Shares.  Prior to actual payment of any vested
Performance Shares, such Performance Share will represent an unsecured
obligation of the Company, payable (if at all) only from the general assets of
the Company.  Any Performance Shares 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 Shares, 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 Shares 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 Shares awarded by this
Award Agreement will vest in accordance with the vesting provisions set forth
in the Notice of Grant.  Performance
Shares  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 Shares at any time, subject
to the terms of the Plan.  If so
accelerated, such Performance Shares 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 Shares 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 Shares 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 Shares 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 Shares

















 


will be paid in Shares 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 Shares provided under this Award Agreement or
Shares 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 Shares 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 Shares 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
Shares 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 Shares.  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 Shares having a Fair Market Value equal
to the minimum amount required to be withheld, (c) delivering to the
Company already vested and owned Shares having a Fair Market Value equal to the
amount required to be withheld, or (d) selling a sufficient number of such
Shares 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 Shares 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 Shares otherwise are scheduled
to vest pursuant to Sections 3 or 4, Participant will permanently forfeit such
Performance Shares and any right to receive Shares thereunder and the
Performance Shares 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 Shares
deliverable hereunder unless and until certificates representing such Shares
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 Shares and receipt of dividends and distributions on
such Shares.

















 


9.             No Guarantee of Continued
Service.  PARTICIPANT ACKNOWLEDGES
AND AGREES THAT THE VESTING OF THE PERFORMANCE SHARES 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
SHARES 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.


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 Shares 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 Shares 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 Shares 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 Shares 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 Shares 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 Shares
awarded under the Plan or future Performance Shares 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 Shares.


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 Shares 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
Shares 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 Shares is made and/or to
be performed.

















 


APPENDIX
B


PERFORMANCE
MATRIX


 


[INSERT PERFORMANCE MATRIX]