Document:

Exhibit 10.3

 

FORM OF STOCK OPTION AWARD
AGREEMENT

 

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 Start Date:

Total Number of Option Shares:

Option Exercise Price per Share:

Total Exercise Price of Option Shares:

Grant 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]

  	
   

  

 

 

UTSTARCOM, INC.

 

2006 EQUITY INCENTIVE PLAN

 

STOCK OPTION AWARD AGREEMENT

 

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, 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 Shares, together
with any applicable withholding taxes. 
This Option will be deemed to be exercised upon receipt by the 

 

1

 

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.H
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 Optioned
Stock, 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.             Participant’s Representations.  In the event the shares have not been
registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, Participant shall, if required by Company, concurrently
with the exercise of all or portions of the Option, deliver to Company his or
her Investment Representations Statement in a form acceptable to the Company.

 

G.            Term of Option.

 

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

 

H.            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 

 

2

 

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 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 achieve
any particular tax result.  Furthermore,
if Participant has become subject to tax in more than one jurisdiction between
the Grant Date 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.

 

I.             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;

 

3

 

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.

 

J.             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.

 

K.            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, 

 

4

 

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 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.

 

L.             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.

 

M.           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 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.

 

N.            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.

 

O.            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.

 

P.             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 

 

5

 

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.

 

Q.            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.

 

R.            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]

 

6

 

APPENDIX

 

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 sell 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.

 

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.Q 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.

 

7

 

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.

 

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.

 

8

 

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.

 

9Exhibit
10.1

 

AMENDMENT

TO

ENGINEERING,
PROCUREMENT AND

CONSTRUCTION
SERVICES

FIXED
PRICE CONTRACT

LOCATION:
AURORA, NEBRASKA

 

THIS AMENDMENT (“Amendment”)
is made and entered into effective as of October 1, 2008 by and between
Aventine Renewable Energy - Aurora West, LLC (“Owner”) and Kiewit Energy
Company (“Kiewit”).

 

WITNESSETH

 

WHEREAS, Owner and Kiewit are parties to that
certain Engineering, Procurement and Construction Services Fixed Price Contract
dated May 31, 2007 (the “Contract”); and

 

WHEREAS, Owner and Kiewit desire to amend the
Contract as set forth below.

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, Owner and Kiewit agree as
follows;

 

1.             Capitalized
terms not defined herein shall have the meaning set forth in the Contract.

 

2.             The
first sentence of Section 5.1 of the Contract is deleted in its entirety and
the following language is inserted in lieu thereof:

 

“Kiewit guarantees that Substantial
Completion of the Work will be  achieved
no later than June 30, 2009 (“Guaranteed Substantial Completion Date”).”

 

3.             The
third sentence of Section 5.1 of the Contract is hereby amended by inserting
the following language after the phrase “provided, however,” on the last line
of page 12 of the Contract:

 

“such Base LDs shall not commence with until
the 31st Day after the Guaranteed Substantial Completion Date (i.e.
Day 1 under item (i) above shall be such 31st Day after the
Guaranteed Substantial Completion Date) and provided further, however, . . .”

 

4.             Section
5.3 Early Completion Bonus of the Contract
is deleted in its entirety and there shall be no early completion bonus under
the Contract.

 

5.             For
all Work performed under the Contract prior to September 22, 2008 (i.e. for
Work covered by invoices through and including Monthly Progress Invoice No. 18),
Owner will  make monthly progress
payments in accordance with Section 8.3. For all Work performed under the
Contract from and after September 22, 2008, notwithstanding any language of the
second, third and fourth sentences of Section 8.3 to the contrary, Owner shall
pay for such Work in nine (9) equal monthly installments. Such nine (9) equal
monthly installments shall be determined as 

 

 

follows: (i)
first, an amount equal to the initial Contract Sum of Two Hundred Thirty
Million Seventeen Thousand Four Hundred Sixteen and no/100 Dollars
($230,017,416) shall be adjusted (up or down) for any agreed upon changes to
the Contract Sum as a result of any agreed upon Change Orders, and for any
adjustments to the Contract Sum under the fourth sentence of Section 8.1 for
Work performed prior to September 22, 2008, (ii) second, all progress payments
paid by Owner for Work performed under the Contract prior to September 22, 2008
(excluding any Excluded Taxes included in such progress payments) shall be
subtracted from the amount determined under item (i) above; for the avoidance
of doubt, all amounts paid by Owner or its affiliates under the AWA and the
Pre-EPC Agreement shall be considered as progress payments paid by Owner, (iii)
third, the amount determined under item (ii) above shall be increased by any
Excluded Taxes which Owner and Kiewit estimate, as of October 1, 2008, will be
owed by Owner under Section 8.1 for Work performed from and after September 22,
2008, (iv) fourth, the amount determined under item (iii) above shall be
adjusted up or down for any adjustments to the Contract Sum under the fourth
sentence of Section 8.1 which Kiewit and Owner estimate, as of October 1, 2008,
will occur for Work to be performed from and after September 22, 2008, and (v) fifth,
the amount determined under item (iv) shall be the amount to be paid by Owner
in nine (9) equal monthly installments (each installment being the amount
determined under item (iv) divided by nine (9)) commencing with Work performed under
the Contract from and after September 22, 2008, for which the first of such
nine (9) installments will be paid by Owner in November 2008 and the last of
such nine (9) installments will be paid by Owner in July 2009, subject to the
payment process hereafter set forth in this Section 8.3. However, the last of
these nine (9) monthly installment payments shall be subject to adjustment to
reflect any difference, up or down, between the total amount owed by Owner
under this Contract for the Work and the total amount paid by Owner under this
Contract for the Work (including payment of such ninth (9th) monthly
installment before any such adjustment and including credits for all amounts
paid by Owner or its affiliates under the AWA and the Pre-EPC Agreement) .”

 

6.             The
Applications for Payment and supporting documentation to be submitted by Kiewit
to Owner under Section 8.3 of the Contract pertaining to the nine (9)
installment payments which are described in paragraph 5. of this Amendment
shall contain the same information as Applications for Payment and supporting
documentation previously submitted by Kiewit as well as the calculation of the
installment payments with reasonable supporting documentation; provided,
however, each Monthly Progress Invoice shall also include line items
identifying the difference (both for the current period and on a cumulative
basis) between what the progress payment(s) would have been had Section 8.3 of
the Contract not been amended as set forth in paragraph 5. of this Amendment
and the installment payment(s) determined under Section 8.3 of the Contract as
amended under paragraph 5. of this Amendment.

 

7.             The
corn grind date in order, in part, for Plant Startup to occur under the
Contract is targeted to occur on May 30, 2009.

 

8.             Except
as set forth above, all terms of the Contract shall remain in full force and
effect.

 

9.             This
Amendment may be executed by Kiewit and Owner in any number of counterparts,
each of which shall be deemed an original instrument, but all of which together
shall constitute one and the same instrument. Execution may be evidenced by facsimile

 

2

 

signatures
with original signature pages to follow in due course.

 

IN WITNESS WHEREOF, the Parties have caused
this Amendment to be executed effective as of October 1, 2008.

 

 

	
  AVENTINE RENEWABLE ENERGY -

  	
   

  	
  KIEWIT ENERGY COMPANY

  
	
  AURORA WEST, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Daniel R. Trunfio, Jr.

  	
   

  	
  By: 

  	
  /s/ Brad Kaufman

  
	
   

  	
   

  	
   

  	
   

  
	
  Name: Daniel R. Trunfio, Jr.

  	
   

  	
  Name: Brad Kaufman

  
	
   

  	
   

  	
   

  
	
  Title: Chief Operating
  Officer

  	
   

  	
  Title: President

  

 

3

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